EXHIBIT 99.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement, dated as of May 1,
2005 (this "Agreement"), is made by and between North American Airlines, Inc., a
Delaware corporation ("Employer") and a wholly-owned subsidiary of World Air
Holdings, Inc., a Delaware corporation ("Parent"), and Xxxxxx X. Xxxxxx
("Employee").
W I T N E S S E T H:
WHEREAS, the Parent and Xxxxxx entered into a certain letter of intent,
dated as of April 25, 2005 (the "Letter of Intent"), wherein the Parent and
Xxxxxx agreed to modify certain terms of the Employment Agreement, dated as of
June 1, 2004 (the "Employment Agreement"), by and between the Employer and
Employee in the event the Parent acquired the Employer;
WHEREAS, the Parent acquired 100% of the issued and outstanding shares
of common stock of the Employer on April 27, 2005; and
WHEREAS, the Employer and Employee desire to memorialize the terms
specified in the Letter of Intent and replace the terms of the Employment
Agreement with the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Employer and Employee hereby
agree as follows:
1. TERM OF EMPLOYMENT.
The term of employment shall commence on April 27, 2005 and end on
December 31, 2009. Not later than December 31, 2008, Employee will initiate
discussions with Employee's direct supervisor regarding the renewal of this
Agreement. If at that time, Employee wishes to renew this Agreement on different
terms, Employee will provide written notice to Employee's supervisor. If the
Parent or the Employer does not wish to renew this Agreement or wishes to renew
on different terms, Employee will be provided written notice no later than
January 31, 2009.
2. DUTIES OF EMPLOYEE.
a. Title and General Duties. Employee shall serve as the
Chief Operating Officer of Employer; Employee's specific duties shall be as set
forth on Exhibit A attached hereto and incorporated herein by this reference. In
addition, Employee shall have such other duties and responsibilities as may be
assigned to Employee from time to time by Employer. Employee shall perform all
tasks and carry out all policies and procedures as may be directed by Employer
from time to time. Employee shall not be required to seek direction from
Employer on a daily basis with respect to the ordinary day to day operation of
the business and activities of Employer; provided, however, that any and all
actions and activities which are outside of the scope of the ordinary day to day
business must be approved in advance by Employer.
b. Best Efforts, Full Time. Employee shall serve
Employer loyally and faithfully throughout the term of this Agreement. Employee
shall exert Employee's best efforts, skill, and expertise in the performance of
his duties on behalf of Employer. Employee shall devote his full productive
time, energies, abilities, and attention during business hours and thereafter as
necessary to the proper and efficient performance of his duties hereunder. In
addition to the limitations set forth in paragraph 7.a below, Employee shall not
during the term of this Agreement work for any other airline or any other
business of any kind.
c. Outside Activities. Employee may participate in other
businesses as an investor, provided that Employee shall not, without the prior
written approval of Employer: (i) actively participate in the operation or
management of any other business, or (ii) make or maintain any investment in any
entity with which Employer has a commercial relationship of any kind, including
that of lessor, partner, investor, vendor, supplier, consultant, or otherwise,
or which is in competition with Employer; provided that this shall not prevent
Employee from investing in the securities of any publicly-traded companies so
long as the investment does not constitute more than ten percent (10%) of the
outstanding voting securities of any such company.
d. Employee Rules and Regulations. Employee shall
observe and comply with Employer's nondiscriminatory rules and regulations as
adopted by Employer's Board of Directors from time to time regarding the
performance of his duties, and Employee shall carry out and perform orders,
directions, and policies stated by Employer periodically, whether orally or in
writing. In addition, Employee acknowledges that he has received and reviewed
Employer's personnel manual and agrees to observe and be bound by each of the
conditions, provisions, and requirements set forth therein, as revised from time
to time by Employer. In the event of any conflict between this Agreement and any
policy or handbook of Employer, the provisions of this Agreement shall prevail.
e. Compliance with Law. Employee shall at all times
comply with all law, regulations, and restrictions applicable to the airline
industry and/or applicable to the business of Employer. Employee acknowledges
that it is his responsibility to keep abreast of changing laws, rules, and
regulations affecting the business of Employer as they relate to the performance
of his duties as Chief Operating Officer, and such other duties as may be
assigned to Employee from time to time.
3. COMPENSATION OF EMPLOYEE.
a. Salary. Effective as of May 1, 2005, Employer shall
pay to Employee a base salary of $200,000.00 per year (the "Base Salary"),
payable in the amount of $8,333.33 on a semi-monthly basis.
b. Bonus. Employer shall pay to Employee an annual bonus
based upon the Net Profits of Employer during each calendar year. Effective as
of April 28, 2005, Employee shall be included in the Parent's management
incentive compensation program. The maximum annual bonus payable under this
Section 3.b shall be limited to 80% of the Base Salary. Under the Parent's
management incentive program, "Net Profit" shall be defined as net income after
interest, taxes, depreciation, and amortization and any other employee profit
sharing program expenses.
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c. Retention Incentive. Effective as of May 1, 2005,
Employee will receive an annual retention incentive in the amount $80,000,
payable in the amount of $3,333.33 on a semi-monthly basis.
d. Transitional Incentive. On May 1, 2005, Employee will
receive a transition award of $75,000.
e. Long-Term Incentives. Employee will be eligible to
participate in the Parent's Amended and Restated 1995 Stock Incentive Plan (the
"Stock Incentive Plan"). Effective as of April 27, 2005, Employee will be
granted restricted shares or restricted stock units (as determined by the
Parent's Compensation Committee) of the Parent in the aggregate amount of 50,000
shares. These shares will vest in accordance with the following vesting
schedule: 25% on April 30, 2006, 25% on April 30, 2007, 25% on April 30, 2008,
and 25% on April 30, 2009. In addition, beginning in fiscal 2006, Employee shall
be eligible to participate in any annual long-term incentive awards to senior
management in effect at that time.
f. Withholding. All salary and other sums payable to
Employee pursuant to this Agreement shall be subject to withholding of state and
federal income tax, social security, unemployment tax, and any other sums
required by applicable law.
g. Reimbursements to Employee. Employer shall reimburse
Employee for all reasonable out-of-pocket expenses incurred by Employee within
the scope of his employment hereunder. Reimbursements shall be paid by Employer
to Employee on a monthly basis, upon presentation by Employee of reasonable
evidence of the expenditures incurred. Employer may at its option require that
some or all reimbursable expenses be approved in advance by Employer, subject to
such procedures as may be established by Employer from time to time.
4. EMPLOYMENT BENEFITS.
a. Accrual and use of vacation time and personal time
shall be determined in accordance with the personnel manual of Employer. All
accrual and use of vacation and personal time shall be subject to the provisions
and limitations set forth in Employer's personnel manual and Employer's policies
as may be determined by Employer from time to time. All vacation time must be
scheduled and approved by Employer in advance. Employer is not required to
approved vacation requests which exceed then accrued vacation time. Employee
shall not receive compensation pursuant to this Agreement for any absences in
excess of Employee's then accrued vacation time and personal time.
b. Benefits. Employee shall be entitled to participate
in any profit sharing plans, medical, life insurance, and other benefits
generally made available to other employees of Employer, as such benefits may be
adopted and/or revoked from time to time in the sole direction of Employer.
c. Insurance. Employer shall maintain and keep in effect
during the term of this Agreement unemployment benefits and worker's
compensation insurance coverage for the benefit of Employee, in accordance with
the laws of the State of New York and the United States in effect from time to
time.
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5. CONFIDENTIALITY OF PROPRIETARY INFORMATION.
a. Trade Secrets. Employee has and will organize,
develop, and exert considerable influence in the management of the company
business and in the goodwill of Employer's customers and business contacts and
will, necessarily, obtain special and unique knowledge of the company business
and condition, including without limitation the following matters relating to
the business of Employer (collectively, "Trade Secrets"): correspondence and
memoranda; contracts; legal positions; financial condition; job capabilities;
labor relations; company profitability and profit margins; cost of equipment,
labor, and supplies; relationships with key personnel of current and potential
business contacts; company and business manuals; salary and wage structure;
management policies and techniques; competitive posture and strategies; sources
of supply of equipment, materials, and fuel; contract terms, discounts, and
requirements; materials acquisition terms, discounts, and requirements; bidding
strategies and techniques and manuals; investigations of market potential and
business development; marketing concepts; sales techniques; business expansion
and/or contraction strategies, studies, or investigations; business
opportunities; pricing and price lists; discounts and cost control programs; job
management and control procedures; and customer and supplier names, lists, and
data; all of which information is confidential, unique, and valuable to the
Employer. Employee recognizes that the company business is intensely competitive
with other entities within the airline industry, and that knowledge or use by a
competitor of any of the foregoing confidential matters would unfairly place the
Employer at a competitive disadvantage. Employee further recognizes that he will
be exposed to much of the foregoing confidential information through routine
performance of duties within the company business, and that all of the Trade
Secrets are owned by Employer and regularly used in the operation of Employer's
business.
b. Proprietary Information. All Trade Secrets,
documents, salaries and compensation arrangements, computer programs,
information contracts, business tactics and procedures, equipment, work product
in process, personnel information, know-how, processes, information gathering
techniques, and similar items relating to the business of Employer, whether they
are prepared or developed by Employee or come into Employee's possession in any
other way and whether or not they contain or constitute Trade Secrets owned by
Employer (hereinafter, "Proprietary Information"), are and shall remain the
exclusive property of Employer, are confidential, valuable, special, and unique
assets of the business of Employer, and shall be protected in a manner similar
to Trade Secrets. All creations or contributions of Employee incident to his
services for Employer pursuant to this Agreement shall be deemed to be the
property of Employer, and to have been created as an agent of and on behalf of
the Employer.
c. Confidentiality of Trade Secrets and Proprietary
Information. Employee promises and agrees that Employee shall not misuse,
misappropriate, or disclose any of the Trade Secrets, Proprietary Information,
or other items described herein, directly or indirectly, or use them in any way,
either during the term of this Agreement or at any time thereafter, or disclose
them to any other person or entity, except as required in the course of
employment with Employer or as required to comply with a valid court order.
Employee agrees that Employee will not divulge, communicate, use to the
detriment of Employer, or for the benefit of any person or persons, or misuse in
any way, any Proprietary Information, Trade Secrets, or other confidential
information or property of Employer. Employee further acknowledges and agrees
that any
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information, data, files, processes, investigations, Trade Secrets, Proprietary
Information, or similar items which Employee has developed, discovered, become
aware of, or acquired in connection with employment with Employer was received,
developed, or prepared in confidence and as a fiduciary of Employer.
d. Safekeeping. Employee, wherever possible, shall keep
all Proprietary Information, Trade Secrets, and other confidential material in a
safe, secure place.
e. Files and Records. All files and records relating in
any manner whatsoever to the business of Employer, or the conduct of Employee's
employment, whether prepared by Employee or otherwise coming into Employee's
possession shall be the exclusive property of Employer regardless of who
actually acquired the original file or record or initially prepared the file or
record. If Employee purchases any record book, ledger, or similar item to be
used for recordkeeping, Employee shall notify Employer, and Employer shall
reimburse Employee.
f. Delivery to Employer. Upon the termination of this
Agreement or whenever requested by Employer, Employee shall immediately deliver
to Employer all Proprietary Information, Trade Secrets, files, records, books,
locks, keys, access cards, computer access information, computer codes,
telephones, pagers, and other property in Employee's possession or under
Employee's control which belong to Employer.
6. TERMINATION OF EMPLOYMENT.
a. Events Resulting in Immediate Termination.
Notwithstanding any other provision of this Agreement to the contrary, this
Agreement and Employee's employment hereunder shall be terminated immediately
upon the occurrence of any of the following events:
(i) Employer and Employee reaching mutual
agreement in writing as to termination.
(ii) The death of Employee.
(iii) Employee's disability which continues for a
period of ninety (90) consecutive days. For purposes of this
Agreement, "disability" shall be determined by a licensed
physician selected by Employer and shall be defined as
Employee's inability, through physical or mental illness or
other cause, to perform the majority of his usual duties.
(iv) Termination of Employee by Employer for
cause. For purposes of this Agreement, the term "for cause"
shall not be limited to matters as defined in applicable
statutes or case law, but also shall include without
limitation any of the following: (1) Employee's willful and
persistent failure or refusal to perform any of his
obligations under this Agreement; (2) embezzlement or other
misappropriation of property, including Proprietary
Information, Trade Secrets, or other confidential property of
Employer; (3) repeated insobriety or drug abuse; (4)
persistent and unexcused absenteeism; (5) conduct involving
moral turpitude or conduct tending to bring Employer or
Employee into disrepute, or any conduct
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which offends the community or any group or class within the
community; (6) Employee's failure to rectify a breach or
default of any of the terms, covenants, or conditions of this
Agreement within ten (10) days after written demand from
Employer to cure the breach or default; or (7) any conduct
which constitutes a material breach by Employee of the
provisions set forth in paragraph 2.e above. Any termination
of Employee for cause shall be without prejudice to any other
remedy to which Employer may be entitled either by law, in
equity, or under this Agreement. Employer shall give Employee
written notice of termination, which shall specify the grounds
for the termination and shall be accompanied by a statement of
all relevant facts.
b. Effect of Termination for Cause. If this Agreement
and Employee's term of employment is terminated for cause, Employee shall not be
entitled to any compensation or other benefits of employment from and after the
effective date of the termination. The effective date of the termination shall
be the date of the event specified in paragraph 6.a(i) or 6.a(ii) above, or the
date of delivery by Employer of notice of termination based on the provisions of
6.a(iii) or 6.a(iv)above.
(i) Salary and bonuses shall be prorated and
payable through the effective date of the termination.
(ii) All medical, life insurance, and other
benefits shall be terminated as of the effective date of the
termination of this Agreement; provided, however, that
Employer shall comply with the requirements of COBRA and any
other applicable law requiring the continuation of benefits at
the expense of Employee upon the request of Employee.
c. Effect of Termination Other than for Cause. In the
event Employer terminates this Agreement for reasons other than cause,
disability, or death, Employee will be paid eighteen (18) months of the Base
Salary and retention incentive, including deferred salary and/or bonus
compensation, if any, payable hereunder. In addition, all granted but unvested
stock options, restricted stock, or restricted stock units shall become
immediately exercisable.
7. UNLAWFUL COMPETITION.
a. Throughout Employment Term. During the term of the
Agreement, Employee shall not, without Employer's express prior written consent,
which consent may be withheld in the sole discretion of Employer, directly or
indirectly: (i) render services to or for any other airline business or other
business which is involved in the airline industry, for compensation or
otherwise, or engage in any activity competitive with or adverse to Employer's
business or practice, whether alone, as a partner, or as an officer, director,
employee, or shareholder of any other corporation, or as a trustee, fiduciary,
or other representative, agent, or employee of any other entity; (ii) consult,
assist, or supervise in the planning or organization of any business activity
competitive with or potentially competitive with the business of Employer; or
(iii) influence or attempt to influence customers, salespersons, suppliers,
pilots, flight attendants, or other employees of Employer to leave Employer with
Employee, to divert their
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business or services to Employee or to the new place of business of Employee, or
to otherwise divert their business or services to competitors or others.
b. Upon Termination. Employee acknowledges that the
Proprietary Information, Trade Secrets, and confidential information and
property of Employer acquired by Employee during the term of this Agreement are
of great value to Employer and would be of great value to competitors of
Employer. Therefore, Employee acknowledges his understanding that the
requirements of paragraph 5 of this Agreement regarding the confidentiality of
Trade Secrets and Proprietary Information shall survive the termination of this
Agreement; Employee shall not divulge that information to any third parties for
any reason or use any of such information for any reason other than for the
benefit of Employer. In addition, Employee shall not, for a period of three (3)
years after the date of termination of this Agreement, directly or indirectly,
(i) make known to any person, firm, or company the names or addresses of any of
the customers of Employer or any other information pertaining to them; (ii) call
on, solicit, or take away, or attempt to call on, solicit, or take away any of
the customers of Employer, either for himself or for any other person, firm, or
company, or (iii) influence or attempt to influence customers, salespersons,
suppliers, pilots, flight attendants, or other employees of Employer to leave
Employer with Employee, to divert their business or services to Employee or to
the new place of business of Employee, or to otherwise divert their business or
services to competitors or others.
8. INJUNCTIVE RELIEF.
Employee acknowledges that the services to be furnished hereunder and
the rights granted to Employer herein are of a special, unique, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot reasonably be compensated for in damages in an action at law;
accordingly, the breach by Employee of any of the provisions of this Agreement
will cause Employer irreparable injury and damage. Employer shall be entitled,
as a matter of right and without further notice to Employee, to seek and obtain
an injunction, temporary restraining order, or other equitable relief in
connection with any breach of this Agreement by Employee. This right to seek and
obtain injunctive relief shall be in addition to and not in lieu of any other
rights and remedies which Employer may have, whether at law or in equity, or for
damages or otherwise.
9. ENFORCEMENT.
The parties agree that the provisions of this Agreement shall be
specifically enforceable, and that in addition to any other rights which
Employer may have at law or in equity, Employer shall be entitled to obtain a
restraining order and/or an injunction to prevent violation by Employee of any
provision of this Agreement. The provisions of this Agreement are of tremendous
value to the business of Employer, and were and are a material consideration to
the continued employment of Employee; and without the protection of this
Agreement, Employer would be unable to divulge to Employee the information
necessary to enable Employee to perform his duties hereunder and otherwise
create the opportunity for Employee to enhance his career.
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10. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement
or any breach thereof shall be settled by binding arbitration under the
Commercial Arbitration Rules of the American Arbitration Association, and any
judgment entered and/or award rendered by the arbitrator may be enforced by
appropriate judicial action. The arbitration panel shall consist of one member,
which shall be a person agreed to by the parties within thirty (30) days
following notice by one party to the other that it desires that a matter be
arbitrated. If the parties are unable within the thirty (30) day period to agree
upon an arbitrator, then the panel shall be one arbitrator selected by the New
York City office of the American Arbitration Association, which arbitrator shall
be knowledgeable with respect to the subject matter area of the dispute. The
non-prevailing party shall pay in full any fees and expenses of the arbitrator,
other tribunal fees and expenses, reasonable attorneys' fees of both parties,
any costs of producing witnesses, and any other reasonable costs or expenses
incurred by it and the prevailing party. The arbitrator shall render a decision
within thirty (30) days following the close of presentation by the parties of
their cases and any rebuttal. The parties shall agree within thirty (30) days
following selection of the arbitrator to any pre-hearing procedures or other
procedures necessary for the arbitration to proceed, including interrogatories
or other discovery; provided, in any event each party shall be entitled to
conduct discovery in accordance with applicable law of the State of New York.
The agreement of the parties to arbitrate as set forth herein shall not prohibit
either party from seeking an injunction, temporary restraining order, or other
equitable relief through courts having jurisdiction over the parties pending the
commencement and completion of any arbitration between the parties.
11. MISCELLANEOUS.
a. Additional Acts. Each of the parties hereto shall
execute such documents and accomplish such acts as may be reasonably necessary
in order to give effect to the intentions expressed in this Agreement.
b. Captions. The captions in this Agreement are solely
for the convenience of the parties and should not be construed as being part of
this Agreement or used in the interpretation hereof.
c. Governing Law. All questions with respect to the
interpretation of this Agreement and the rights and liabilities of the parties
shall be governed by the laws of the State of New York.
d. Final Agreement. This Agreement memorializes and
constitutes the final expression and the complete and exclusive statement of
agreement and understanding between the parties; it supersedes and replaces all
prior negotiations, proposed agreements, and agreements, whether written or
unwritten. Each of the parties to this Agreement acknowledges that it has not
executed this Agreement in reliance upon any promise, representation, statement,
or warranty whatsoever, expressed or implied, which is not expressly contained
in this Agreement, nor in reliance upon any belief as to any fact not expressly
recited herein.
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e. Severability. If any part of this Agreement is
determined to be illegal or unenforceable, all other parts shall be given effect
separately and shall not be affected.
f. Attorneys' Fees. In the event litigation, mediation,
or arbitration is commenced to enforce or construe any of the provisions of this
Agreement, to recover damages for breach of any of the provisions of this
Agreement, or to obtain declaratory relief in connection with any of the
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees. In the event this Agreement is asserted, in any
litigation, mediation, or arbitration, as a defense to any liability, claims,
demands, actions, causes of action, or rights herein released or discharged, the
prevailing party on the issue of that defense shall be entitled to recover
reasonable attorneys' fees.
g. Counterparts. This Agreement may be executed in
counterparts and as executed shall constitute one agreement, binding on all
parties, even though all parties do not sign the original or the same
counterpart.
h. Amendment. This Agreement may be amended only by a
written agreement executed by the parties.
i. Arm's-Length Agreement. This Agreement has been
negotiated at arm's length and between persons sophisticated and knowledgeable
in the matters dealt with in this Agreement. In addition, each party has been
given the opportunity to consult with experienced and knowledgeable legal
counsel. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the purpose of the parties
and this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
EMPLOYEE: EMPLOYER:
/s/ Xxxxxx X. Xxxxxx North American Airlines, Inc.,
------------------------------------ a Delaware corporation
Xxxxxx X. Xxxxxx
By: /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Assistant Secretary
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EXHIBIT A
DUTIES OF EMPLOYEE
