Exhibit 10.56(b)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made and entered into as of the
Effective Date provided in Section 2, by and between CHAUTAUQUA AIRLINES, INC.
(hereinafter referred to as the "Company"), a New York corporation, and Xxxxx X.
Xxxxxx (hereinafter referred to as the "Executive").
RECITALS
WHEREAS, the Executive is party to an Employment Agreement dated as of
July 16, 1999 with the Company (the "Prior Agreement"); and
WHEREAS, Republic Airways Holdings Inc., the parent of the Company
("RJET"), contemplates issuing shares of common stock in a public offering
(the "IPO"); and
WHEREAS, subject to the successful completion of the IPO as provided in
Section 2 hereof, the Company and the Executive desire to amend certain
provisions of the Prior Agreement and to enter into this Amended and Restated
Employment Agreement,
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, and intending to be legally bound, the parties hereto
agree as follows:
1. EMPLOYMENT. Subject to the satisfaction of the conditions set forth in
this Section 2, the Company agrees to employ the Executive, and the Executive
agrees to render his services to the Company, as its Executive Vice President
and Chief Operating Officer, during the Term (as defined below). In connection
with his employment the Executive shall serve without additional payment or
compensation of any kind as an officer of any direct or indirect subsidiary or
affiliate of the Company designated by the Board of Directors of the Company
(including without limitation, RJET, collectively, the "Affiliates"). The
Executive shall render his services at the direction of the President and the
Board of Directors of the Company at the Company's offices in Indianapolis,
Indiana. The Executive agrees to use his best efforts to promote and further the
business, reputation and good name of the Company and the Affiliates
(collectively, the "Company Group") and the Executive shall promptly and
faithfully comply with all instructions, directions, requests, rules and
regulations made or issued from time to time by the Company.
2. (a) INITIAL PUBLIC OFFERING. The effectiveness ofthis Amended and
Restated Employment Agreement is expressly conditioned upon and subject to the
successful completion on or before September 30, 2002 of an IPO by RJET. The
Effective Date of this Amended and Restated Employment Agreement shall be the
effective date of the IPO. In the event RJET does not successfully complete an
IPO on or before September 30, 2002, this Amended and Restated Employment
Agreement shall be null and void and shall have no force or effect and the Prior
Agreement shall continue according to its terms.
3. TERM. The term of employment pursuant to this Agreement (the "Term")
shall continue until July 31, 2005; provided that either party may terminate
this Agreement by providing the other with 30 days prior written notice of such
termination. Notwithstanding the foregoing, this Agreement may be terminated by
the Company or by the Executive in the event
that "Cause" for such termination exists as provided in Section 8 below. In the
event (i) the Company terminates this Agreement or the Executive's employment
other than for Cause, or (ii) the Executive terminates this Agreement or the
Executive's employment for Cause, the Company shall pay the Executive Severance
Compensation as provided in Section 4(c) hereof. In the event the Company
terminates this Agreement or the Executive's employment for Cause, or in the
event the Executive terminates this Agreement or his employment other than for
Cause, the Executive shall not be entitled to any Severance Compensation or
other compensation of any kind following the effective date of such termination.
4. COMPENSATION. As full and complete compensation for all the Executive's
services hereunder, the Company shall pay the Executive the compensation
described below.
(a) CASH COMPENSATION.
(i) During the Term, the Company shall pay the Executive an annual
base salary of $140,000 ("Base Salary"). The Board of Directors shall
review the Executive's Base Salary each year and shall have the right in
its discretion to increase such Base Salary. In the event this Agreement
is terminated prior to the expiration of the Term, the Company shall pay
to the Executive, in addition to any Severance Compensation payable under
Section 4(c), any accrued but unpaid Base Salary through the termination
date.
(ii) In addition to the Base Salary, during the Term, the Company
shall pay to the Executive an annual deferred compensation payment (a
"Deferred Compensation Payment") in the amount of $56,000. The Deferred
Compensation Payment shall be paid each year during the Term at the end of
the calendar year and shall be prorated for the 2005 calendar year for the
period from January 1, 2005 through the end of the Term. In the event this
Agreement or the Executive's employment is terminated, the Executive shall
not be entitled to any Deferred Compensation Payment for such year or any
subsequent period.
(iii) In addition to the Base Salary and Deferred Compensation
Payment, during the Term, the Company may pay to the Executive an annual
bonus (a "Bonus") in an amount, if any, as the Board of Directors of the
Company shall determine in its discretion. The Bonus, if any, may be paid
each year during the Term at the end of the calendar year and may be
prorated for the 2005 calendar year for the period from January 1, 2005
through the end of the Term. In the event this Agreement or the
Executive's employment is terminated, the Executive shall not be entitled
to any Bonus Compensation for such year or any subsequent period.
(b) EQUITY COMPENSATION.
(i) On the Effective Date of this Agreement, the Company shall cause
RJET to issue to the Executive pursuant to the Republic Airways Holdings
Inc. 2002 Equity Incentive Plan (the "Plan"), as compensation and without
cost to the Executive, options (the "New Options") to purchase [57,600 ?]
BASED ON AN ASSUMED 20MM SHARES OUTSTANDING AFTER THE IPO, OTHERWISE
SUBJECT TO RATABLE ADJUSTMENT] shares of RJET's Common Stock, par value
$.001 per share (the "Common Stock"). The New Options
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shall be in addition to the options to purchase Common Stock previously
granted to the Executive. The New Options shall have an exercise price per
share that is equivalent to 110% of the price at which shares of Common
Stock are offered to the public in the IPO. The New Options shall vest and
become immediately exercisable as to 1/24 of the shares subject to the New
Options on the last day of each month beginning in August 2003, subject to
termination as provided in the Plan. The terms and conditions of the New
Options shall be governed in all respects by the Plan, and in the event of
any conflict or inconsistency between the terms of this Section 3(b) and
the Plan, the terms of the Plan shall control.
(ii) The vesting of any options to purchase stock of RJET previously
granted to the Executive under the terms of the Prior Agreement or any
agreement entered into contemporaneously with the Prior Agreement shall be
governed by the terms of such agreement notwithstanding that other terms
and provisions of such agreement are superseded by this Amended & Restated
Employment Agreement.
(c) SEVERANCE COMPENSATION. In the event (i) the Company terminates this
Agreement or the Executive's employment with the Company other than for Cause,
or (ii) the Executive terminates this Agreement or his employment with the
Company for Cause, the Company shall pay to the Executive as Severance
Compensation $140,000, provided that in the event the remainder of the Term is
less than 12 months, such Severance Compensation shall be prorated for the
remainder of the Term. For example, if the Company terminates this Agreement
other than for Cause with 4 months remaining in the Term, the Company shall pay
the Executive Severance Compensation of $46,667. The Executive shall also
receive as Severance Compensation (i) subject to the next following sentence, an
immediate vesting of those New Options that would have vested during the 12
months after such termination, or such lesser period through the end of the
Term, if the Executive's employment had not been terminated, and (ii)
continuation of medical benefits for the lesser of 12 months or the remainder of
the Term. Notwithstanding the foregoing, in the event the Executive terminates
this Agreement or his employment for Cause as a result of a Change of Control
(as defined herein), all unvested New Options shall immediately vest.
5. NO OTHER COMPENSATION. Except as otherwise expressly provided herein,
or in any other written document executed by the Company and the Executive, no
other compensation or other consideration shall become due or payable to the
Executive on account of the services rendered to the Company Group. The Company
shall have the right to deduct and withhold from the compensation payable to the
Executive hereunder any amounts required to be deducted and withheld under the
provisions of any statute, regulation, ordinance, order or any other amendment
thereto, heretofore or hereafter enacted, requiring the withholding or deduction
of compensation.
6. MEDICAL & 401K BENEFITS. The Company agrees that the Executive shall be
entitled to participate in any retirement, 401K, disability, medical, pension,
profit sharing, group insurance, or any other plan or arrangement, or in any
other benefits now or hereafter generally available to executives of the
Company, in each case to the extent that the Executive shall be eligible under
the general provisions thereof.
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7. VACATION. The Executive shall be entitled to take three weeks of paid
vacation which shall accrue monthly during each 12 months of the Executive's
employment hereunder, and which vacation shall be taken on dates to be selected
by mutual agreement of the Company and the Executive.
8. TERMINATION FOR CAUSE.
(a) TERMINATION FOR CAUSE BY THE COMPANY. The Company, by written notice to the
Executive, may immediately terminate this Agreement and the Executive's
employment hereunder for Cause. As used herein, a termination by the Company
"for Cause" shall mean that the Executive has (i) willfully or materially
refused to perform a material part of his duties hereunder, (ii) materially
breached the provisions of Sections 9, 10 or 11 hereof, (iii) acted fraudulently
or dishonestly in his relations with the Company, (iv) committed larceny,
embezzlement, conversion or any other act involving the misappropriation of
Company funds or assets in the course of his employment, or (v) been indicted or
convicted of any felony or other crime involving an act of moral turpitude.
(b) TERMINATION FOR CAUSE BY THE EXECUTIVE. The Executive, by 20 business days
prior written notice to the Company, may terminate this Agreement and his
employment hereunder for Cause, provided that the Company shall have the right
to cure such Cause within such 20 business day period. As used herein, a
termination by the Executive "for Cause" shall mean that (i) the Company has
materially diminished the duties and responsibilities of the Executive with
respect to the Company, (ii) the Company has required the Executive to relocate
his residence from Indianapolis to another location without the consent of the
Executive or (iii) a Change of Control has occurred. As used herein, a "Change
of Control" shall mean a transaction, other than a public or private offering of
Common Stock by RJET pursuant to which a shareholder other than Wexford Capital
LLC ("Wexford") and its Affiliates acquires majority voting control of RJET.
9. CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges
that he shall receive in the course of his employment hereunder certain
confidential information and trade secrets concerning the Company Group's
business and affairs which may be of great value to the Company Group. The
Executive therefore agrees that he will not disclose any such information
relating to the Company Group, the Company Group's personnel or their operations
other than in the ordinary course of business or in any way use such information
in any manner which could adversely affect the Company Group's business. For
purposes of this Agreement, the terms "trade secrets" and "confidential
information" shall include any and all information concerning the business and
affairs of the Company Group and any division or other affiliate of the Company
Group that is not generally available to the public.
10. NON-COMPETITION. The Executive agrees that without the prior written
consent of the Board of Directors during the Term and for a period of 12 months
following the termination or expiration of this Agreement, he will not
participate as an advisor, partner, joint venturer, investor, lender, consultant
or in any other capacity in any business transaction or proposed business
transaction (a) with respect to which the Executive had a material personal
involvement on behalf of the Company Group during the last 12 months of his
employment with the Company, or (b) that could reasonably be expected to compete
with the Company Group's
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business or operations or proposed or contemplated business or transactions of
the Company Group that are (I) known by the Executive as of the date of such
termination or expiration, and (II) contemplated by the Company Group to proceed
during the 12 month period following such termination or expiration. For these
purposes, the mere ownership by the Executive of securities of a public company
not in excess of 2% of any class of such securities shall not be considered to
be competition with the Company Group.
11. NON-SOLICITATION. The Executive agrees that during the Term, and for a
period of 12 months following the termination or expiration of this Agreement,
he shall not, without the prior written consent of the Company, directly or
indirectly, employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed by the Company Group or any of its
divisions or affiliates while the Executive was employed by the Company.
12. BREACH OF THIS AGREEMENT. If the Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Sections 9, 10 or 1l
of this Agreement, then the Company shall have the right and remedy to have
those provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed by the Executive that the rights and privileges
of the Company granted in Sections 9, 10 and 11 are of a special, unique and
extraordinary character and any such breach or threatened breach will cause
great and irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company.
13. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing (including facsimile, telegraphic, telex or cable
communication) and shall be deemed to have been duly given when delivered by
hand or mailed, certified or registered mail, return receipt requested and
postage prepaid:
If to the Company: Chautauqua Airlines, Inc.
0000 Xxxxx Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, President
If to the Executive: Xxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
14. APPLICABLE LAW. This Agreement was negotiated and entered into within
the State of Indiana. All matters pertaining to this Agreement shall be governed
by the laws of the State of Indiana applicable to contracts made and to be
performed wholly therein. Nothing in this Agreement shall be construed to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any material present or
future statute, law, governmental regulation or ordinance as a result of which
the parties have no legal right to contract or perform, the latter shall
prevail, but in such event the provision(s) of this Agreement affected shall be
curtailed and limited only to the extent necessary to bring it or them within
the legal requirements.
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15. ENTIRE AGREEMENT; MODIFICATION; CONSENTS AND WAIVERS. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements or understandings, written or
oral, between the parties with respect to the subject matter hereof. No
interpretation, change, termination or waiver of or extension of time for
performance under any provision of this Agreement shall be binding upon any
party unless in writing and signed by the party intended to be bound thereby.
Except as otherwise provided in this Agreement, no waiver of or other failure to
exercise any right under or default or extension of time for performance under
any provision or this Agreement shall affect the right of any party to exercise
any subsequent right under or otherwise enforce said provision or any other
provision hereof or to exercise any right or remedy in the event of any other
default, whether or not similar.
16. SEVERABILITY. The parties acknowledge that, in their view, the terms
of this Agreement are fair and reasonable as of the date signed by them,
including as to the scope and duration of post-termination activities.
Accordingly, if any one or more of the provisions contained in this Agreement
shall for any reason, whether by application of existing law or law which may
develop after the date of this Agreement, be determined by an arbitrator or
court of competent jurisdiction to be excessively broad as to scope of activity,
duration or territory, or otherwise unenforceable, the parties hereby jointly
request such court to construe any such provision by limiting or reducing it so
as to be enforceable to the maximum extent in favor of the Company compatible
with then-applicable law. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall nonetheless be determined by an
arbitrator or court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
17. ASSIGNMENT. The Company may, at its election, assign this Agreement or
any of its rights hereunder. This Agreement may not be assigned by the
Executive.
18. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
19. ARBITRATION. Each of the parties hereby irrevocably and
unconditionally consents to arbitrate any dispute arising out of or relating in
any manner to this Agreement or the employment relationship contemplated hereby
or the termination thereof, or any alleged breach of any term or provision of
this Agreement. Such arbitration shall be conducted in Indianapolis, Indiana by
a single arbitrator in accordance with the rules of the American Arbitration
Association then in effect. Judgement may be entered on the arbitrator's award
in any federal or state court in Indiana (and the parties expressly consent to
the jurisdiction of such court), or in any other court having jurisdiction. Each
of the Parties agrees that in any arbitration arising out of or relating to this
Agreement or the employment relationship contemplated hereby or the termination
thereof, or any alleged breach of any term or provision of this Agreement or in
any action to enter judgment on an award in such arbitration each party shall
bear its own fees and expenses.
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20. SURVIVAL. The provisions of Sections 9 through 19 of this Agreement
shall survive any expiration or termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
CHAUTAUQUA AIRLINES, INC.
By: /s/ XXX XXXXXXXX
---------------------------
Name:
Title:
XXXXX X. XXXXXX
By: /s/ XXXXX X. XXXXXX
---------------------------
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