1
AGREEMENT, dated as of August 19, 1996, between Trans World Airlines,
Inc. ("Company"), and Xxxxxx Xxxxx ("Executive");
WHEREAS, the Company desires to employ and the Executive has accepted
a position as Executive Vice President and Chief Financial Officer; and
WHEREAS, the parties desire to set forth the entirety of their
agreements and understandings;
NOW, THEREFORE, in consideration of the mutual promises contained
herein the parties agree as follows:
1. Employment. The Company hereby employs Executive to render the
----------
services hereinafter described, and Executive hereby accepts such employment
and agrees to render such services, upon and subject to the terms and
conditions described in this Agreement.
2. Term. Executive's employment commences as of the date of this
----
Agreement, and shall continue thereafter for an indefinite period until
terminated at any time by Company or Executive with or without cause.
Nothing in this Agreement or otherwise shall be construed as entitling
Executive to employment for any definite term.
3. Duties.
------
(a) Executive shall serve at the pleasure of the Company in
such executive positions as Executive shall be assigned from time to time
by the President, and shall perform such executive, advisory and/or
administrative and managerial assignments and duties as may be assigned to
Executive from time to time by the President or the President's designee,
all according to the direction and control of the President. Executive will
carry out and perform all such duties and assignments and all directions of
any officer to whom Executive directly or indirectly reports. Executive also
will comply with and carry out all rules and policies of the Company, and
will serve, without additional compensation, as an officer and/or director
or any subsidiary, affiliated or related corporation or business, or of any
company in which Company may hold any interest.
(b) The Executive will, on an exclusive basis, devote his full
time during normal business hours to the business and affairs of the Company
and use his best efforts to promote the interests of the Company and to
perform faithfully and efficiently the responsibilities assigned to
Executive in accordance with the terms of this Agreement.
4. Compensation and Other Terms of Employment. During the period
------------------------------------------
in which Executive is employed by Company, the Executive shall receive the
following:
2
(a) Salary. The Executive will be paid at an annual rate of
------
$230,000.00 on a regular basis, not less frequently than one time per month,
on a regular Company pay day. This rate of pay ("Base Salary") is subject
to adjustment from time to time, and will be reviewed on a regular basis.
All such payments will be subject to withholding for taxes and amounts owed
Company, if any.
(b) Stock Incentive Plan. The Executive shall be eligible to
--------------------
participate in the Company's Key Employee Stock Incentive Plan ("KESIP").
The Executive's grant shall be for 230,000 shares, subject in its entirety
to the terms and conditions set forth in the KESIP Agreement between the
Executive and the Company. The Exercise Price shall be the Fair Market
Value, as that term is defined in the KESIP, of the Company's Common Stock
as of the date of this Agreement. To the extent that there is any
inconsistency between the terms and conditions of this Agreement and those
of the KESIP, the terms and conditions of this Agreement shall control.
(c) Change of Control Agreement. In the event that the
---------------------------
Company's Board of Directors authorizes the Company to enter into "change of
control" severance agreements with one or more of its officers, the
Executive will be offered the opportunity to enter into such an agreement on
terms and conditions no less favorable in any material respect than those
offered to any other of the Company's officers.
(d) Passes. The Executive and his eligible family members
------
will be entitled to card-type Class A "term" passes on the Company's routes
worldwide.
(e) Medical, Dental, Insurance and Accident Insurance. (i)
-------------------------------------------------
The Executive and his eligible dependents will be eligible to participate in
the Company-paid comprehensive Medical and Dental Plan and the Travel
Accident Insurance Program offered by the Company, on the same terms and
conditions applicable to other officers. (ii) The Executive will be
eligible for coverage under the Company's Group Term Life Insurance Plan
under which the Company currently provides Basic Life Insurance of $50,000
coverage at no cost to the Executive. Assuming that the Executive is
insurable at standard rates, the Executive will also have the option to
purchase Additional Group Life Insurance in an amount up to three times the
Executive's Base Salary, less the Basic $50,000 coverage. The monthly cost
of this Additional Life Insurance is currently $4.50 per $10,000 and such
monthly cost may increase from time-to-time. (iii) The Executive will be
eligible to participate in the Company's Voluntary Personal Accident
Insurance Plan. The maximum coverage for this plan is currently $150,000 at
a monthly cost of $6.60 and such monthly cost may increase from
time-to-time. (iv) The Executive will be covered for Long-Term Disability
protection pursuant to plan provisions at standard rates and subject to
standard conditions. Nothing herein shall be construed to prevent the
Company from amending or altering any such plans or programs set forth
herein so long as the Executive continues to have the opportunity to receive
in the aggregate benefits at a level no less favorable than those set forth
herein.
5. Vacation. The Executive will be eligible for three weeks
--------
vacation, per year.
- 2 -
3
6. Termination of Employment.
-------------------------
(a) Death. This Agreement shall terminate automatically
-----
upon the Executive's death. All benefits and compensation then accrued
hereunder, and under any related plans, shall be paid when due to the
Executive's beneficiaries or legal representatives, as appropriate.
(b) Termination Without Cause. The Company shall have the
-------------------------
right to terminate the Executive's employment without cause at any time and
without advance notice. In such event the Company shall pay to the
Executive an amount equal to the Executive's then rate of annual Base Salary
and any accrued, earned unpaid salary and unused vacation as of the
effective date of such termination. Such payment (other than accrued,
earned salary and unused vacation) may be made at the Company's option in a
single lump sum or in equal installments payable over up to a twelve month
period. Upon the making of such payments, the Company shall have no further
obligation to the Executive under this Agreement and Executive accepts such
payments in full satisfaction of all claims against the Company.
(c) Termination For Cause. The Company shall have the right
---------------------
to terminate the Executive's employment at any time and without advance
notice for Cause. For the purposes of this Agreement, "Cause" shall mean
that (i) the Executive is convicted of or engages in conduct which
constitutes a felony, or a misdemeanor involving moral turpitude; or (ii)
the Executive is found by the Company's Board of Directors to have willfully
engaged in conduct which is demonstrably and materially injurious to the
Company; or (iii) the Executive is found by the Company's Board of Directors
to have failed or refused to in any material respect to competently perform
his duties and responsibilities (after notice and opportunity to cure if
such material failure or refusal can be cured); or (iv) the Executive has
breached his duty of loyalty to, or committed any act of fraud, theft or
dishonesty against or involving, the Company or any of its affiliated
companies; or (v) the Executive has breached any provision of this
Agreement. If the Executive's employment is terminated for Cause, the
Company shall pay the Executive his unpaid, accrued salary through the date
of such termination at the rate in effect at the time of such termination
and any accrued, earned or unused vacation through the effective date of
such termination. Upon the making of such payment, the Company shall have
no further obligation to the Executive under this Agreement.
(d) Termination by the Executive. If the Executive
----------------------------
voluntarily terminates his employment, the Executive must give the Company
thirty (30) calendar days advance notice in writing. If the Executive fails
to do so, the Executive shall not be entitled to any accrued rights and
benefits to which the Executive might be entitled under this or any related
agreement and the Company will have no further obligation to the Executive
except for unpaid salary earned by the Executive up to and including the
effective date of such termination.
Upon termination of employment and otherwise upon demand, Executive
will turn over to Company all Company property and documents and all
computer passwords, and will (after copying the same to 3.5 disks and
returning the disks to the Company) delete all Company
- 3 -
4
information from any computer which is not Company property. Upon termination,
all benefits and compensation ceases except as described above.
7. Termination Obligations. The Executive agrees that during his
-----------------------
employment and following his termination under any of the circumstances set
forth herein:
(a) he shall not during his employment or for a period of two
years following the effective date of his termination, directly or
indirectly solicit (or assist or encourage the solicitation of) any employee
of the Company or any of its subsidiaries or affiliated companies to be
employed by the Executive or by any entity in which the Executive owns or
expects to own any equity interest in excess of five (5) percent of any
class of the outstanding securities thereof, or by any entity by which the
Executive is employed or for which the Executive serves or expects to serve
in any capacity; nor (after his employment ends and during such 2 year
period) encourage or induce any Company employee to terminate his or her
Company employment. For the purposes of this paragraph, the term "solicit"
shall mean any contact by the Executive with or providing information to
others who may be expected to contact any employees of the Company or of any
of its subsidiaries or affiliated companies regarding their employment
status, job satisfaction, interest in seeking employment with the Executive,
with any person affiliated with the Executive or by whom the Executive is
employed but shall not include print advertising for personnel or responding
to any unsolicited request for a personal recommendation for or evaluation
of a Company employee or an employee of any of the Company's subsidiaries or
affiliated companies.
(b) he shall hold forever hereafter in a fiduciary capacity
for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries or
affiliated companies, including but not limited to commercial, operational,
marketing, pricing, or financial information including costs, strategies,
forecasts or trade secrets, acquisition strategies or candidates or
personnel acquisition plans ("confidential information") which shall have
been obtained by the Executive during or by reason of his employment by the
Company or by any of its subsidiaries or affiliated companies and which
shall not be public knowledge. During and after the end of the term of
employment, the Executive shall not, without the prior written consent of
the Company or unless required to do so by reason of a court order or
subpoena (in which case Executive shall give Company prompt notice of any
such other subpoena or order, or request therefore, so as to provide Company
the maximum opportunity to contest the same), communicate or divulge any
such confidential information to anyone other than the Company or those
designated by it, except that while employed by the Company in the business
of and for the benefit of the Company the Executive may provide confidential
information as appropriate to those persons who in the Executive's judgment
have a need to know such confidential information.
(c) he shall not for a period of two years following the
effective date of his termination discuss or disclose to the media or
Company personnel the circumstances or terms of his termination of
employment.
- 4 -
5
(d) he shall not publicly disparage or denigrate the Company
or any of its officers, directors or practices.
To the extent that any covenant or agreement contained in this Section
7 shall be determined by a Court to be invalid or unenforceable in any
respect or to any extent, the covenant or agreement shall not be rendered
void, but instead shall be automatically amended to such lesser scope or to
such lesser extent as will grant Company the maximum restriction on
Executive's conduct and activities permitted by applicable law in such
circumstances.
8. No Assignment. This Agreement is personal to the Executive and
-------------
without the Company's prior written consent it shall not be assignable by
the Executive other than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the legal
representatives of Executive's estate, and otherwise is freely assignable by
Company.
9. Assistance. For a period of three (3) years following
----------
termination of employment, Executive will, upon reasonable notice, make
himself available for consultation with Company counsel, to meet with
Company counsel and prepare to testify as a witness or deponent, and to
testify as a witness at a trial, deposition or proceeding, concerning any
legal matter involving or affecting the Company. The Company will pay for
all reasonable and necessary out of pocket travel and telephone costs and
expense incurred by Executive in connection with any such activity.
10. Miscellaneous.
-------------
(a) This Agreement shall be governed by and be construed in
accordance with the internal laws of the State of Missouri, without
reference to principles of conflicts of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. Neither this Agreement nor any of its terms may be amended, waived,
added to or modified other than by written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by regular
or registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxxx Xxxxx
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxx 00000
- 5 -
6
If to the Company:
Trans World Airlines, Inc.
One City Centre
000 Xxxxx 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: General Counsel
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) This Agreement contains the entire understanding between
the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, among the parties with respect thereto. The terms
of any employee manual, handbook, or any policy of the Company, shall not
modify, alter, or invalidate any term of this Agreement nor alter Employee's
at will status, and in case of any conflict between a term of this Agreement
and any such policy, handbook or manual, the terms of this Agreement
control, except for benefit plans and Stock Option awards described herein
(to the extent not otherwise provided in this Agreement).
(e) Executive represents that he is not a party to any
agreement, or under any legal obligation, which could preclude or in any way
impair Executive's performance of Executive's duties for Company. Executive
has not provided, and will not provide, to Company any trade secret of
another person whose secrecy he is obligated to maintain.
(f) Notwithstanding any provision hereof to the contrary,
nothing in this Agreement shall be deemed to entitle the Executive to
employment beyond the Term hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed in
its corporate name, and the Executive has hereunto set his hand, all as of
the day and year first above written.
/s/ XXXXXX XXXXX /s/ XXXXXXX X. XXXXXXX
------------------------------ -----------------------------
XXXXXX XXXXX TRANS WORLD AIRLINES, INC.
BY: Xxxxxxx X. Xxxxxxx
Senior Vice President &
General Counsel
- 6 -
