EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Agreement is made as of January 1, 2001, between AIRNET SYSTEMS,
INC., (the "Company") and XXXX XXXXXXXXXXX (the "Employee"), who hereby agree as
follows:
1. EMPLOYMENT OF EMPLOYEE. The Company hereby employs Employee and
Employee hereby accepts employment by the Company, under the terms and
subject to the conditions contained in this Agreement. The Company hereby
employs Employee as its President and Chief Executive Officer.
2. TERM OF EMPLOYMENT. Employee has been employed by the Company
since August 1999, without written agreement. The term of Employee's
employment by the Company under this Agreement shall be for the period (the
"Initial Employment Period") beginning on the date of this Agreement and
ending on December 31, 2001; provided, that the Initial Employment Period
shall extend for successive one year periods (each a "Renewal Employment
Period" and, together with the Initial Employment Period, the "Employment
Period") unless either the Company or Employee provides the other party
notice of termination of this Agreement at least ninety (90) days prior to
the end of the Employment Period.
3. SERVICES. Employee shall use his best efforts in performing the
duties of employment assigned to Employee pursuant to this Agreement in an
efficient, faithful and business-like manner. Employee shall report directly
to the Chairman of the Board of Directors of the Company. Employee shall
perform such duties as requested by, and have such authority to act on behalf
of the Company as may be conferred by, the Board of Directors. Employee shall
devote his full business time, attention, energy and skill to the business of
the Company. During the Employment Period, the Employee shall not engage in
or perform any outside consulting or other services for any person other than
the Company or any of its subsidiaries. Notwithstanding the previous
sentence, the Employee may serve as a director or trustee of any civil,
fraternal, religious, public interest or similar organization. During the
term of this Agreement, the primary place of employment for the Employee
shall be the Greater Columbus Ohio Metropolitan area, provided, however, that
Employee shall be required to travel as necessary or prudent to effectively
and efficiently satisfy the terms of his employment as set forth in this
Agreement.
4. COMPENSATION. For the services described in this Agreement, the
Employee shall receive an initial annual base salary of Three Hundred
Thousand ($300,000.00). On an annual basis, the Compensation Committee of the
Board of Directors will conduct a review of the Employee's performance and
determine whether the Employee's base salary should be adjusted. Pursuant to
such performance review, the Employee's base salary may be increased or
decreased. In the event that the Company adjusts the Employee's initial base
salary, the amount of the initial base salary, together with any
adjustment(s), shall be his base salary. Said base salary shall be payable in
equal installments in accordance with the regular payroll practices of the
Company. Employee shall further be entitled to receive a
bonus according to the plans from time to time established by, and subject to
approval by, the Compensation Committee of the Board of Directors.
5. OTHER EMPLOYEE FRINGE BENEFITS.
(a) IN GENERAL. The Company shall further provide the Employee
with all health and life insurance coverages, sick leave and disability
programs, tax-qualified retirement plan contributions, stock option plans,
paid holidays and vacations, perquisites, and such other fringe benefits of
employment as the Company may provide from time to time to actively employed
senior executives of the Company.
(b) SUPPLEMENTAL BENEFITS. The Company shall also provide the
Employee with the following supplemental benefits:
(i) VACATION. The Employee will be entitled to total
vacation leave during the term of this Agreement of up to four (4) weeks per
year at such time as agreed between the Employee and the Company.
(ii) STOCK OPTION PLAN. The Employee will be entitled to
participate in the AirNet Systems, Inc. Incentive Stock Plan, as may be
amended from time to time (the "Stock Plan"), a copy of which is attached
hereto as Exhibit A. The Employee's participation in the Stock Plan shall be
determined in accordance with the terms and conditions of the Stock Plan and
by the Board of Directors of the Company or the committee thereof
administering the Stock Plan.
(iii) OTHER. The Employee will also be entitled to
participate in such other employee benefit plans, and shall receive such
additional fringe benefits, as the Board of Directors or the Compensation
Committee thereof may from time to time determine.
(c) EXPENSES. The Company shall reimburse the Employee for all
reasonable expenses paid or incurred by Employee in the performance of his
duties under this Agreement. Such reimbursements shall be made in accordance
with the standard expense reporting, approval and reimbursement policies
maintained by the Company from time to time.
6. NON-COMPETITION.
(a) Except with the prior written consent of the Company, during
the Employment Period, and for a period of two (2) years immediately
following termination of his employment with the Company, whether voluntarily
or involuntarily or with or without Cause, the Employee shall not, directly
or indirectly for the benefit of Employee or others, either as principal,
agent, manager, consultant, partner, owner, employee, distributor, dealer,
representative, joint venturer, creditor or otherwise, engage in any work
involving any of the following: (i) any activity involving the delivery of
time sensitive packages or which competes with any service or product of the
Company now
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in existence or in existence as of the Date of Termination; (ii) the promotion,
solicitation, attempt to solicit, license or sell, in any geographic area where
the Company or its successor in interest conducts business of any product or
service in competition with the products or services of the Company; (iii) the
solicitation, attempt to solicit, management, maintenance, sale or license of
any product or service in competition with the products or services of the
Company to any business which was a customer of the Company during the one year
period immediately preceding the cessation of Employee's employment with the
Company; and (iv) the disclosure to any person of the names of any of the
customers of the Company or any other information pertaining to them unless such
information can be obtained from public sources.
(b) The Employee acknowledges that the business of the Company is
national in scope and the national scope is the reason for the geographic
scope and/or duration of the restrictions on competition and solicitation
provided in this Section 6. Satisfaction of the two (2) year period described
in this Section 6 shall be suspended during the time of any activity of the
Employee prohibited by this Section 6. In the event a court grants injunctive
relief to the Company for a failure of Employee to comply with the provision
contained in this Section 6, the noncompetition period shall commence anew
with the date such relief is granted.
(c) The restrictions provided in this Section 6 may be enforced by
the Company, by an action at law, or in equity, including but not limited to,
an action for injunction and/or an action for damages. The provisions of this
Section 6 constitute an essential element of this Agreement, without which
the Agreement would not have been affected by the Company. The provisions of
this Section 6 shall survive the termination of any other obligations of
Employee under this Agreement for a period necessary to enforce its
provisions. If the scope of any restriction contained in this Section 6 is
too broad to permit enforcement of such restriction to its fullest extent,
then such restriction shall be enforced to the maximum extent permitted by
law and the Employee hereby consents and agrees that such scope may be
judicially modified in any proceeding brought to enforce such restriction.
7. CONFIDENTIAL INFORMATION. Employee hereby acknowledges that in the
course of his employment, Employee may receive, have access to or contribute
to confidential, proprietary information or trade secrets of the Company. In
consideration of Employee's initial and continued employment with the Company
and of Employee being given access to Confidential Information (as defined in
subparagraph (a) below), Employee agrees to the following:
(a) "Confidential Information" means all of the Company's
confidential and proprietary information and trade secrets in existence on
the date hereof or at any time during the Employee's employment, including,
but not limited to:
(i) All or any portion or phase of any and all information
constituting or relating to any and all products,
manufacturing techniques, equipment, manufacturing and
test data or materials
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used or owned by or licensed to the Company, whether fully
or partially developed, which information is used or
usable by the Company in its business or by its customers;
(ii) The whole or any portion or phase of any business plans,
financial information, purchasing data, supplier data,
accounting data or other financial information;
(iii) The whole or any portion or phase of any research and
development information, inventions, discoveries, patent
applications, ideas, designs, design procedures,
engineering drawings, sketches, renderings, other
drawings, computer programs, progress reports, algorithms
or processes or other technical information;
(iv) The whole or any portion or phase of any marketing or
sales information, sales records, customer lists, prices,
sales projections, costs, specifications, procurement and
sales activities and procedures, promotion and pricing
techniques, credit and financial data concerning customers
or other sales information; and
(v) Trade secrets, as defined by the laws of the State of
Ohio.
Notwithstanding the foregoing, Confidential Information shall not include
information which has been published, disseminated without obligation of
confidence or which has otherwise become a part of the public domain as of
the date hereof or at any time subsequent to the date hereof, (A) by or
through the affirmative action of the Company or (B) by or through any other
person who has received the prior written approval of the Company in
connection with such publication or dissemination.
(b) Employee acknowledges that all information, whether falling
within the above definition or otherwise, shall be presumed to be
Confidential Information if the Company takes measures designed to prevent
it, in the ordinary course of business, from being available to persons other
than those selected by the Company to have access thereto for limited
purposes.
(c) All information disclosed to Employee or to which Employee
obtains access during the period of Employee's employment, which Employee has
a reasonable basis to believe to be Confidential Information, shall be
presumed to be Confidential Information.
(d) Except as required as a part of Employee's duties at the
Company, Employee shall never, either during Employee's employment by the
Company or thereafter, disclose or use on Employee's own behalf or on behalf
of any person any Confidential Information, as defined in subparagraph (a)
hereof. Upon termination of Employee's
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employment with the Company, regardless of whether such termination is
voluntary, involuntary or with or without Cause, all records of Confidential
Information, including but not limited to, all notes, memos, plans, records,
letters, reports, magnetic tapes, magnetic diskettes and other tangible
materials, including copies thereof in Employee's possession, whether
prepared by Employee or by others, shall be returned to the Company. Upon
request at any time during the term of employment or thereafter, Employee
shall disclose to the Company the names and addresses of any persons to whom
any disclosure of Confidential Information has been made and shall state to
the Company what disclosures have been made to such persons.
(e) Employee agrees to communicate to the Company promptly and
fully, and to assign to the Company, all inventions and technical or business
innovations, including, but not limited to, any and all products and
processes developed or conceived solely by Employee, or jointly with others,
during the term of Employee's employment, which are within the scope of the
Company's business as conducted on the date of this Agreement or at any time
during the term of Employee's employment with the Company, or which were
developed on the Company's time, or which utilized the Company's equipment,
materials or information. Employee further agrees to execute all necessary
papers, and otherwise to assist the Company, at the Company's sole expense,
to obtain patents or other legal protection as the Company deems fit, both
during and after Employee's term of employment with the Company. As to any
such inventions and technical or business innovations, any products or
processes, said inventions, innovations, products and processes, are to be
the property of the Company, and Employee shall have no proprietary interest
therein.
(f) Employee agrees and understands that there are significant
business reasons for entering into this Section 7 and that its restrictions
are reasonable and necessary to protect legitimate business interests of the
Company.
8. CERTAIN OTHER PROHIBITIONS. During the Employment Period and for a
period of two (2) years immediately following the termination of his
employment with the Company, the Employee shall not, either directly or
indirectly, do any of the following: (i) solicit to hire or hire any employee
of the Company or (ii) participate as a shareholder, partner, joint venturer,
officer, director, employee, agent, solicitor, distributor, dealer or
representative, or have any direct or indirect financial interest (including
without limitation the interest of a creditor) with any person who solicits
to hire or hires any employee of the Company.
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OF EMPLOYMENT BY THE COMPANY. The Employee's
employment hereunder may be terminated by the Company without any breach of
this Agreement only under the following circumstances:
(i) The Employee's employment hereunder shall terminate upon
his death and may be terminated by the Company in the event of his
Disability. For
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purposes of this Agreement, the term "Disability" shall mean the inability of
the Employee due to illness (mental or physical), accident, or otherwise, to
perform his duties for any period of one hundred twenty (120) consecutive
days, as determined by an independent physician selected by the Company and
reasonably acceptable to the Employee (or his legal representative), provided
that the Employee does not return to work on substantially a full-time basis
for at least five (5) consecutive business days within thirty (30) days after
Notice of Termination is given by the Company pursuant to the provisions of
Sections 9(c) and 9(d)(ii).
(ii) The Company may terminate the Employee's employment
hereunder for Cause. "Cause" shall be defined to include (i) any willful
breach of the material terms of this Agreement; (ii) any willful breach of
any material duty of employment assigned to the Employee pursuant to this
Agreement; (iii) material refusal to perform the duties of employment
assigned to Employee pursuant to this Agreement; (iv) theft or embezzlement
of a material amount of the Company's property; (v) fraud or (vi) indictment
for criminal activity not including minor misdemeanor traffic offenses.
(b) TERMINATION OF EMPLOYMENT BY EMPLOYEE. The Employee may
terminate his employment at any time. However, he shall be deemed to have
terminated his employment for "Good Reason" only if he terminated his
employment by giving Notice of Termination pursuant to Sections 9(c) and
9(d)(iii) within ninety (90) days after the occurrence of any of the
following events (provided the Company does not cure such event within thirty
(30) days following its receipt of the Employee's Notice of Termination):
(i) Without the Employee's prior written consent, the Company
assigns the Employee to duties materially inconsistent in any respect with
his position, authority, duties or responsibilities as set forth in Section
1, or takes any other action that results in a material diminution in such
position, authority, duties or responsibilities, including, but not limited
to, failing to reappoint or reelect the Employee to any such position;
(ii) The Employee's base salary is reduced for any reason
other than in connection with the termination of his employment, except if
such base salary is reduced in connection with proportionate reductions in
the salaries of all other executive officers of the Company;
(iii) The assignment of the Employee, without his prior
written consent, to a Company office located outside of the Greater Columbus,
Ohio Metropolitan area;
(iv) The Company's failure to obtain an agreement from any
successor or assign of the Company to assume and to agree to perform this
Agreement;
(v) The Company provides notice of termination of this
Agreement pursuant to Section 2; or
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(vi) The Company otherwise materially breaches its
obligations to make payments to the Employee under this Agreement.
(c) NOTICE OF TERMINATION. Any termination of the Employee's
employment by the Company hereunder, or by the Employee other than
termination upon the Employee's death, shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement, a
"Notice of Termination" means a notice that shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
(d) DATE OF TERMINATION. For purposes of this Agreement, an
applicable "Date of Termination" means:
(i) If the Employee's employment is terminated by his death,
the date of his death.
(ii) If the Employee's employment is terminated by the
Company as a result of Disability pursuant to Section 9(a)(i), the date that
is thirty (30) days after Notice of Termination is given.
(iii) If the Employee terminates his employment for Good
Reason pursuant to Section 9(b), the date that is thirty (30) days after
Notice of Termination is given (provided that the Company does not cure such
event during that thirty-day period).
(iv) If the Employee terminates his employment other than for
Good Reason, the date the Notice of Termination is given.
(v) If the Employee's employment is terminated by the Company
for Cause pursuant to Section 9(a)(ii), the date the Notice of Termination is
given.
(vi) If the Employee's employment is terminated by the
Company other than for Cause or Disability, the date that is thirty (30) days
after Notice of Termination is given.
10. AMOUNTS PAYABLE UPON TERMINATION OF EMPLOYMENT OR DURING DISABILITY.
(a) DEATH. If the Employee's employment is terminated by his
death, the Employee's beneficiary (as designated by the Employee in writing
with the Company prior to his death) shall be entitled to the following
payments and benefits: (i) any portion of the Employee's base salary that is
accrued but unpaid, any vacation that is accrued but unused (during the then
current fiscal year only), and any business expenses that are unreimbursed --
all, determined as of the Date of Termination and payable within
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thirty (30) days of such date and (ii) any benefits resulting from the fringe
benefits described in Section 5 upon the Employee's death in accordance with the
provisions of the plan or program that provides each applicable fringe benefit.
In the absence of a beneficiary designation by the Employee, or, if the
Employee's designated beneficiary does not survive the Employee, benefits
described in this Section 10(a) shall be paid to the Employee's estate.
(b) DISABILITY.
(i) During any period that the Employee fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), the Employee shall continue to receive his base salary
and bonus at the rate then in effect for such period until his employment is
terminated pursuant to Section 9(a)(i); provided, however, that payments of
base salary and bonus so made to the Employee shall be reduced by the sum of
the amounts, if any, that were payable to the Employee at or before the time
of any such salary or bonus payment under any disability benefit plan or
plans of the Company and that were not previously applied to reduce any
payment of base salary or bonus.
(ii). Upon his termination of employment because of
Disability, the Employee shall be entitled to the following payments and
benefits:
(A) Those described in Section 10(a); and
(B) for a period of twenty-four (24) months following
his Date of Termination, continuation of all
fringe benefits described in Section 5, except for
the Stock Plan.
(c) TERMINATION BY COMPANY WITHOUT CAUSE, OR TERMINATION BY
EMPLOYEE FOR GOOD REASON. In the event that the Company terminates the
Employee's employment without Cause or the Employee terminates his employment
for Good Reason, the Employee shall be entitled to the following payments and
benefits:
(i) Those described in Section 10(b)(ii);
(ii) A continuation of payment of the Employee's base salary
as in effect on the Date of Termination for a period of
twenty-four (24) months from the Date of Termination;
PROVIDED that, if such Date of Termination occurs on or
after a Change in Control the period shall be thirty-six
(36) months rather than twenty-four (24) months;
(iii) As of his Date of Termination, the Employee shall become
fully vested in all employee benefit programs (other
than any tax qualified retirement or savings plan, the
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Employee's interest in which shall vest in accordance
with such plan's terms), including, without limitation,
all stock options and awards under the Stock Plan, in
which he was a participant at the time of the
termination of his employment;
(iv) A single lump sum payment, payable within thirty (30)
days of the Date of Termination, equal to the Employee's
non-vested interest under any tax qualified retirement
or savings plan maintained by the Company which is
forfeited by the Employee under such plan's terms upon
his termination of employment;
(v) A single lump sum payment, payable within thirty (30)
days of the Date of Termination, equal to the pro
rata portion of any non-discretionary bonus that the
Employee would have been entitled to if he had
remained an employee throughout the fiscal year, such
pro rata portion to be based on the number of days
from the beginning of such fiscal year through the
Date of Termination divided by 365; and
(vi) Employee's reasonable, out-of-pocket fees and expenses
in connection with outplacement services, in an amount
not to exceed $15,000.
(d) TERMINATION BY EMPLOYEE OTHER THAN FOR GOOD REASON OR
TERMINATION BY COMPANY FOR CAUSE. In the event that the Employee terminates
his employment other than for Good Reason or the Company terminates his
employment for Cause, the Employee shall not be entitled to any compensation
except as set forth below:
(i) Any base salary that is accrued but unpaid, any vacation
that is accrued but unused (for the then current fiscal
year only), and any business expenses that are
unreimbursed -- as of the Date of Termination; and
(ii) Any other rights and benefits (if any) provided under
plans and programs of the Company, determined in
accordance with the applicable terms and provisions of
such plans and programs.
11. CHANGE IN CONTROL. Immediately upon the occurrence of a "Change
in Control," the Employee shall become fully vested in all employee benefit
programs (other than any tax qualified retirement or savings plan, the
Employee's interest in which shall vest in accordance with such plan's
terms), including without limitation, all stock options or other awards under
the Stock Plan, in which he was a participant at the time of
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the Change in Control. For purposes of this Agreement, the term "Change in
Control" shall mean the occurrence of any of the following events after the
date of this Agreement (i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors ("Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change in
Control: (A) any acquisition by the Company, (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (C) any acquisition
by the Employee (or a group including the Employee); (ii) the consummation of
any reorganization, merger or consolidation other than a reorganization,
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least fifty percent (50%) of the combined voting power
of the Voting Securities of the Company or such surviving entity outstanding
immediately after such reorganization, merger or consolidation; or (iii) the
consummation of a plan of complete liquidation of the Company or of an
agreement for the sale or disposition by the Company (in one transaction or a
series of transactions) of all or substantially all of the Company's assets.
12. EMPLOYEE'S CAPACITY. Employee represents to the Company
that he has the capacity and right to enter into this Agreement and to
perform all his services and other obligations under this Agreement without
any restriction whatsoever by any other agreement, document, restrictive
covenant or other restriction.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
14. SEVERABILITY. The intention of the parties to this
Agreement is to comply fully with all laws and public policies, and this
Agreement shall be construed consistently with all laws and public policies
to the extent possible. In the event a court of competent jurisdiction
determines any restriction set forth in this Agreement to be unenforceable or
contrary to law in whole or in part, then the Company's rights under this
Agreement shall be the maximum rights allowed by law and the scope of such
restriction shall be judicially modified to reflect the Company's maximum
rights thereunder. If and to the extent that any court of competent
jurisdiction determines that it is impossible to construe any provision of
this Agreement consistently with any law or public policy and consequently
holds that provision to be invalid, this holding shall in no way affect the
validity of the other provisions of this Agreement, which shall remain in
full force and effect.
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15. COMPLETE AGREEMENT. This document contains the entire
agreement between the parties and supersedes any prior discussions,
negotiations, representations, or agreements between them relating to
employment of Employee. No additions or other changes to this Agreement shall
be made or binding on any party unless made in writing and signed by all
parties to this Agreement.
16. NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed to be properly given if delivered
personally, if sent by certified or registered first class mail, postage
prepaid, or if sent by telegram, telex, telecopy, telecommunication or other
similar form of communication (with receipt confirmed), as follows:
If to the Company, to:
AirNet Systems, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Fax: (614)
with a copy to:
Xxxxxx X. Xxxxxx, Xx.
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
If to Employee, to:
Xxxx Xxxxxxxxxxx
[address1]
Granville, OH [zip]
Fax: (614)
or to such other person, address or facsimile number as any party may
designate by written notice. Any notice given by certified mail shall be
deemed to have been given and shall be effective upon notice of receipt,
refusal or unclaimed status after such notice has been mailed to the notice
address of the party to whom notice is to be given.
17. SUCCESSORS. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the respective heirs, legal
representatives, successors and assigns of each party to this Agreement.
18. AMENDMENT AND WAIVER. This Agreement may not be amended,
released, discharged, abandoned, changed or modified in any manner, except by
an instrument in writing signed on behalf of each of the parties hereto. The
failure of any party
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hereto to enforce at any time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision, nor in any way
to affect the validity of this Agreement or any part thereof or the right of
any party thereof to enforce each and every such provision. No waiver or any
breach of this Agreement shall be held to be a waiver of any other or
subsequent breach.
19. CAPTIONS. The captions of the various sections of this
Agreement are not part of the context hereof but are labels to assist in
locating those sections and shall be ignored in construing this Agreement.
20. DEFINITION OF "COMPANY". Unless the context otherwise
requires, the term the "Company" shall include AirNet Systems, Inc. and any
parent, subsidiary or affiliate corporation of AirNet Systems, Inc.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have set their hand effective as of the
date first written above.
EMPLOYEE: AIRNET SYSTEMS, INC.
/s/ Xxx X. Xxxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------ ---------------------
Xxxx Xxxxxxxxxxx Name:
Title: Chief Financial Officer
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