COMPUFLIGHT, INC.
c/o Navtech Systems Support Inc.
Xxxxx 000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx Xxxxxx N2L-5Z5
August 5, 1999
Xx. Xxxxxxx X. Xxxx
00 Xxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Re: Retirement Agreement
Dear Xxxx:
This agreement (the "Retirement Agreement") shall confirm the understanding
between Compuflight, Inc. (the "Company") and Xxxxxxx X. Xxxx (the "Employee")
with respect to the retirement of the Employee from the Company. Both the
Company and the Employee acknowledge and agree that all rights and obligations
of the parties hereunder shall be governed by and subject to the following terms
and conditions.
1. Retirement. (a) The parties acknowledge and agree that, effective
October 31, 1999 (the "Retirement Date"), the Employee's employment with the
Company will end. The parties agree further that the Employment Agreement dated
as of December 1, 1993 between the Company and the Employee, as amended by the
amendments thereto dated as of March 14, 1996, January 8, 1997, June 17, 1997,
March 30, 1999, and April 30, 1999 (collectively, the "Employment Agreement"),
and any and all obligations of the Company to the Employee, or for the
Employee's benefit, incurred prior to the date hereof are hereby terminated and
of no further force or effect, and neither the Employee nor the Company shall
have any further liability or obligation thereunder or otherwise in connection
with the Employee's employment by the Company, except as expressly provided for
herein.
(b) Prior to the Retirement Date (the "Pre-Retirement Period"), the
Employee shall continue to be employed by the Company and shall be entitled to
receive salary at the rate of one hundred fifty-one thousand dollars ($151,000)
per annum and the health and medical insurance benefits which he currently
receives. During the Pre-Retirement Period, the Employee shall provide twenty
(20) hours of service per month in the performance of his duties and shall
perform such services on behalf of the Company as shall be directed by the Chief
Executive Officer of the Company. The Employee acknowledges and agrees that,
notwithstanding anything herein to the contrary, he shall not accrue any
additional vacation or other leave during the Pre-Retirement Period and that no
amounts are or shall be payable by the Company for any accrued vacation or other
leave.
(c) The Company represents to the Employee that all amounts withheld from
the Employee's salary with regard to his XXXX XXX during 1999 will have been
deposited into the Company's 401(k) plan account for the Employee's benefit by
the Retirement Date.
2. Post-Retirement Obligations. (a) The parties agree that, as the only
obligation of the Company to the Employee on and after the Retirement Date
(other than the obligations of the Company under Section 4 hereof) and in
consideration of past services and the Employee's covenants set forth herein,
the Company shall pay to the Employee, as a retirement payment, the amount of
six hundred thousand dollars ($600,000) (the "Retirement Payment"), payable in
ninety-six (96) equal installments of six thousand two hundred fifty dollars
($6,250) payable on the tenth (10th) and twenty-fifth (25th) days of each month
beginning November 25, 1999 and ending November 10, 2003 (the "Payout Period").
The provisions of that certain letter dated August 10, 1999 from the Company to
the Employee with respect to the Retirement Payment, a copy of which is attached
hereto as Exhibit A, shall be considered a part hereof.
(b) The Company's obligation to pay the Retirement Payment is evidenced by
a promissory note of the Company of even date in the principal amount of six
hundred thousand dollars ($600,000) (the "Retirement Note"). The Company shall
be entitled to deduct from each payment due under the Retirement Note all
applicable withholding taxes. The Retirement Note will be delivered to the
Employee on the day following the date on which this Retirement Agreement
becomes effective in accordance with the provisions of Section 5 hereof.
(c) In connection with the Retirement Note, the Company agrees to purchase
by September 1, 1999 a decreasing term life insurance policy on the life of the
Employee (the "Policy") in the original amount of the Retirement Note. The
Policy amount shall decrease to the extent of one hundred fifty thousand dollars
($150,000) per year. The Company agrees to maintain the Policy in effect until
all payments due to the Employee under the Retirement Note have been paid. In
the event of the death of the Employee, the Company shall use the proceeds from
the Policy to prepay to the estate of the Employee any amounts due to the
Employee under the Retirement Note. Under no circumstances shall the Company be
obligated to pay, as insurance premiums for the Policy, an amount in excess of
such number of dollars per annum as shall equal two percent (2%) of the
declining death benefit on each annual anniversary date (the "Premium Cap"). In
the event the Company is unable to obtain life insurance coverage for a premium
equal to or less than the Premium Cap (whether as a result of the Employee's
health or otherwise) from at least two (2) insurers, then the Policy amount
shall be reduced to an amount that can be obtained for the Premium Cap. The
Employee agrees to cooperate fully in connection with the Company's efforts to
obtain the Policy. In no event shall the Company be liable for its failure to
obtain the Policy if the Employee is considered uninsurable by at least two (2)
insurers. The Company agrees to furnish to the Employee a copy of the Policy
when issued and to direct the insurer to send to the Employee copies of all
correspondence sent by it to the Company.
(d) The Company agrees that, if permitted by applicable law and regulation,
following the Retirement Date and until the end of the Payout Period, it shall
include the Employee in its group medical insurance plan. The Employee shall be
responsible for the payment of all premiums that are due.
3. Resignation. By executing this Retirement Agreement, effective as of the
Retirement Date, the Employee voluntarily and irrevocably resigns from all
capacities and positions with the Company, except that the Employee shall remain
as Chairman of the Board of Directors of the Company, to serve until the next
annual meeting of shareholders and until his successor has been elected and has
qualified, or until his earlier resignation or removal. The Employee
acknowledges and agrees that he shall not be entitled to receive any
compensation for his services as Chairman of the Board of Directors (except for
standard director fees, if any are payable to other outside directors, and
reimbursement for expenses reasonably incurred in connection with his attendance
at any meetings of the Board of Directors of the Company) and that, at the
request of the Company, shall resign his position as such. The Employee
understands and agrees further that, except as expressly provided herein, the
Company shall have no obligation to the Employee, whether for compensation,
payments, benefits or otherwise, arising under or relating to the Employee's
employment with the Company, his retirement therefrom, the Employment Agreement,
or otherwise.
4. Expense Reimbursement. (a) The Employee acknowledges and agrees that,
except for the amount of sixty thousand five hundred ninety-four dollars
($60,594) (the "Reimbursement Amount"), he has been reimbursed for all costs and
expenses that he incurred at any time on behalf of the Company and that, except
as expressly provided herein, he shall be entitled to no further reimbursements
for costs or expenses incurred through the Retirement Date or thereafter. The
Reimbursement Amount, which the parties acknowledge and agree includes a car
allowance in the amount of one thousand dollars ($1,000) per month through the
Retirement Date, shall be payable as follows:
Date Amount
August 25, 1999 $ 5,000
September 25, 1999 5,000
October 25, 1999 5,000
November 25, 1999 10,000
December 25, 1999 10,000
January 25, 2000 10,000
February 25, 2000 5,000
March 25, 2000 5,000
April 25, 2000 5,000
May 25, 2000 Balance
(b) The Company's obligation to pay the Reimbursement Amount is evidenced
by a promissory note of the Company of even date in the principal amount of
sixty thousand five hundred ninety-four dollars ($60,594) (the "Reimbursement
Note" and together with the Retirement Note, the "Notes"). The Reimbursement
Note will be delivered to the Employee on the day following the date on which
this Retirement Agreement becomes effective in accordance with the provisions of
Section 5 hereof.
(c) The parties acknowledge and agree that the Employee has incurred
charges on three credit cards in his name in the performance of his duties on
behalf of the Company and that the last outstanding combined balances due with
respect to the credit cards is twenty thousand five hundred twenty-two dollars
($20,522) (the "Credit Card Amount"), which amount is included within the
Reimbursement Amount. The Employee agrees that he shall use a portion of each
Reimbursement Note payment to pay at least the minimum monthly amount payable to
the credit card companies with respect to the Credit Card Amount, and, following
his receipt of the initial forty thousand seventy-two dollars ($40,072) pursuant
to the Reimbursement Note, shall use all amounts received pursuant thereto to
pay in full the amounts due with respect to the credit cards. The Company agrees
to pay any additional interest charges that are incurred with respect to the
credit cards, except to the extent that the Employee fails to comply with the
provisions of the immediately preceding sentence.
(d) The Company agrees to continue to reimburse the Employee for all
reasonable expenses incurred by him during the Pre-Retirement Period in
connection with his services on behalf of the Company.
5. Release. (a) In consideration of the Company executing and delivering to
the Employee this Retirement Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Employee, the Employee hereby releases and forever discharges the Company,
its parent, subsidiaries, affiliates, related companies, controlling
shareholders, directors, officers, employees, agents, attorneys, successors, and
assigns (collectively, the "Releasees") from all liabilities, causes of action,
suits, claims, damages and demands whatsoever, whether known or unknown, at law
or in equity, whether statutory or common law, whether federal, state, local, or
otherwise, related to, or arising out of, any aspect of his employment with the
Company, or his retirement from such employment, including, but not limited to,
any claims of employment discrimination on any basis which he (including his
heirs, executors, administrators, successors, and assigns) has asserted or could
have asserted, or otherwise. Nothing herein shall be construed to relieve the
Company from its obligations expressly provided for under this Agreement or the
Notes.
(b) The Employee understands that, once this Retirement Agreement becomes
effective, he waives and releases, to the extent consistent with applicable law,
any rights or claims he may have under the numerous laws and regulations
regulating employment, whether federal, state, local or otherwise, including,
but not limited to, the Age Discrimination in Employment Act of 1967, as
amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans
with Disabilities Act, Section 1981 (42 U.S.C. ss. 1981) of the Civil Rights Act
of 1966, the Fair Labor Standards Act, the Equal Pay Act, the Employee
Retirement Income Security Act of 1974, as amended (known as ERISA), the Family
and Medical Leave Act, and the New York State Human Rights Law.
(c) This Retirement Agreement shall not in any way be construed as an
admission by the Releasees of any liability, or of any wrongful, discriminatory,
or unlawful acts whatsoever against the Employee or any other person, and the
Releasees specifically disclaim any liability to, or wrongful, discriminatory,
or unlawful acts against, the Employee or any other person, on the part of the
Releasees.
(d) The Employee acknowledges that he has had no less than twenty-one (21)
days in which to consider the terms of this Retirement Agreement.
(e) This Retirement Agreement will not become effective until seven (7)
days after the date Employee signs this Retirement Agreement, and the Employee
may revoke this Retirement Agreement within seven (7) days after the date this
Retirement Agreement is signed by him, provided that such revocation is in
writing, and is signed and delivered to the Company within such time period. In
the event of such timely revocation by the Employee, this Retirement Agreement
shall be deemed null and void.
6. Confidential Information. (a) The Employee acknowledges and agrees that
it is the policy of the Company to maintain as secret and confidential all
valuable information, not otherwise available to the general public, heretofore
or hereafter acquired, developed or used by the Company and/or any of its
subsidiaries (all references in this Section 6 as well as Sections 7 and 8
hereof to the "Company" shall be deemed to refer to the Company and/or its
subsidiaries) relating to its business, operations, employees and customers (all
such information is referred to herein as "Confidential Information"). Excluded
from the term Confidential Information is information which is or becomes
generally available to the public other than as a result of a disclosure by the
Employee or breach of an agreement of confidence. The Employee recognizes that,
by reason of his employment with the Company, he has acquired, and may continue
to acquire, Confidential Information. The Employee further acknowledges that
such Confidential Information is the property of the Company and is of great
value to the Company. The Employee confirms that it is necessary to protect the
Company's goodwill, and, accordingly, hereby agrees that he will not, directly
or indirectly, at any time, use, publish, disseminate or otherwise disclose any
Confidential Information. In furtherance of the foregoing, the Employee
expressly waives and renounces any claims, and hereby assigns and transfers to
the Company, free and clear of any and all liens or encumbrances, any and all of
his right, title and interest, if any, in and to any and all Confidential
Information.
(b) In the event that the Employee is requested or required (by oral
questions, interrogatories, requests for information or document, subpoena or
similar processes) by a court of competent jurisdiction or by a government
agency to disclose any of the Confidential Information, it is agreed that the
Employee will (a) promptly notify the Company in writing of the existence, terms
and circumstances surrounding any such request and cooperate with the Company so
that the Company may, in addition to any other rights or remedies it may have,
seek an appropriate protective order; and (b) consult with the Company on the
advisability of taking steps to resist or narrow the request. If, in the absence
of a protective order or the receipt of a waiver hereunder, the Employee is
nonetheless, in the opinion of counsel provided and paid for by the Company,
legally required to disclose the Confidential Information, the Employee shall
furnish only that portion of the Confidential Information as he is advised by
such legal counsel is legally required to be disclosed in order to prevent him
from being held liable for contempt or other censure or penalty. The Company
shall reimburse the Employee for all reasonable travel expenses incurred in
connection therewith.
7. Restrictive Covenants. (a) During the four (4) year period commencing
with the Retirement Date, the Employee will not at any time, without the prior
written approval of the Company, directly or indirectly, anywhere throughout the
world, whether individually or as a principal, officer, employee, partner,
director, shareholder, member, manager, agent of or consultant for any entity,
(a) engage or participate in a business which is competitive with that of the
Company, and shall not make any investments in any such competitive entity
(except that the foregoing shall not prohibit the Employee from acquiring up to
one percent (1%) of the outstanding capital stock of any such entity if the
securities of such entity are listed on a national securities exchange, are
reported on the National Association of Securities Dealers Automated Quotation
System, or are traded regularly traded in the over-the-counter market by a
member of a national securities exchange); (b) cause or seek to persuade any
director, officer, employee, customer, account, agent or supplier of the Company
to discontinue the status, employment or relationship of such person or entity
with the Company, or to become employed in any activity competitive with the
activities of the Company; (c) cause or seek to persuade any prospective
customer or account of the Company (which during the year prior to the
Retirement Date was actively being solicited by the Company) to determine not to
enter into a business relationship with Company; (d) hire or retain any
director, officer or employee of the Company; or (e) solicit or cause or
authorize to be solicited, for or on behalf of himself or any third party, any
business which is competitive with the Company from (i) others who are, or were
within one (l) year prior to the Retirement Date, customers or accounts of the
Company, or (ii) any prospective customer or account of the Company which was
then actively being solicited by the Company.
(b) The provisions of paragraph (a) hereof shall terminate in the event the
Company shall fail to make any payment due hereunder and such failure shall
continue unremedied for a period of thirty (30) days following receipt of
written notice thereof from the Employee.
8. Nondisparagement. (a) The Employee agrees that he shall not make any
statement, written or oral, to any officer, director, employee, consultant,
agent, independent contractor, customer or account of the Company, or other
person or entity, or otherwise in general to the public or business community,
or take any action, directly or indirectly, that disparages or is likely to
diminish the reputation of the Company, any officer, director, employee,
consultant, agent or independent contractor of the Company, or which would
adversely affect the ability of any of the foregoing to obtain financing or
otherwise enter into or consummate any business transaction, or the goodwill,
business or reputation of any of the foregoing.
(b) The Company agrees that it shall not make any statement, written or
oral, to any officer, director, employee, consultant, agent, independent
contractor, customer or account of the Company, or other person or entity, or
otherwise in general to the public or business community, or take any action,
directly or indirectly, that disparages or is likely to diminish the reputation
of the or which would adversely affect the ability of the Employee to obtain
financing or otherwise enter into or consummate any business transaction, or the
goodwill, business or reputation of the Employee.
9. Governing Law; Jurisdiction. (a) This Retirement Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without reference to its conflicts of law rules or principles.
(b) The parties hereby agrees that any legal action with regard to this
Retirement Agreement shall be brought in the courts of the State of New York or
of the United States of America for the Eastern District of New York. The
Company hereby appoints Certilman Balin Xxxxx & Xxxxx, LLP, 00 Xxxxxxx Xxxxxx,
Xxxx Xxxxxx, Xxx Xxxx 00000, attention: Xxxx Xxxxxxx, Esq., as its agent for
service of process in connection therewith. The Employee hereby appoints Xxxxxx,
Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxxxxxxx, Xxxxxx Xxxx, Xxx Xxxx 00000, attention
Xxxxxx X. Xxxxxxxx, Esq., as his agent for service of process in connection
therewith.
10. Entire Agreement. This Retirement Agreement contains the full and
complete understanding and agreement of the parties hereto with respect to the
subject matter contained herein and supersedes all prior or contemporaneous
written or oral understandings or agreements with respect to the subject matter
hereof, including, without limitation, the Employment Agreement. No modification
of this Retirement Agreement shall be binding unless made in writing and signed
by the party hereto sought to be charged.
11. Binding Effect; Due Authorization. (a) This Retirement Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors, assigns and legal representatives.
(b) The Company represents that this Retirement Agreement has been duly
authorized by its Board of Directors and that the Chief Executive Officer of the
Company has been duly authorized to execute and deliver this Retirement
Agreement and the Notes. A copy of the Board of Directors resolutions with
respect thereto is attached hereto as Exhibit B.
12. Equitable Relief; Breach. The parties acknowledge and agree that, in
the event the Employee shall violate or threaten to violate any of the
restrictions of Section 6, 7 or 8 hereof or the Company shall violate or
threaten to violate any of the restrictions of Section 8 hereof, the other party
will be without an adequate remedy at law and will therefore be entitled to
enforce such restrictions by temporary or permanent injunctive or mandatory
relief in any court of competent jurisdiction without the necessity of proving
damages and without prejudice to any other remedies which it may have at law or
in equity, it being understood that such remedy shall be in addition to any
other remedies which the party may have at law or in equity. No bond or other
security shall be required in connection therewith.
13. Waiver; Severability. The waiver by either party of a breach of any
provision of this Retirement Agreement shall not operate or be construed as a
waiver of any subsequent breach. If any provision, or part thereof, of this
Retirement Agreement shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision, or part
thereof, and not in any way affect or render invalid or unenforceable any other
provisions of this Retirement Agreement, and this Retirement Agreement shall be
carried out as if such invalid or unenforceable provision, or part thereof, had
been reformed, and any court of competent jurisdiction is authorized to so
reform such invalid or unenforceable provision, or part thereof, so that it
would be valid, legal and enforceable to the fullest extent permitted by
applicable law.
14. Notices; Deliveries. (a) Any notice, delivery or other communication
required or permitted hereunder shall be sufficiently given if delivered by hand
or sent by certified mail, return receipt requested, facsimile transmission or
overnight mail or nationally recognized overnight courier, addressed as follows:
If to the Company:
Xxxxx 000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx Xxxxxx N2L-5Z5
Attention: Xxxxxx Xxxxxxxxx, Chief Executive Officer
Telecopier Number: (000) 000-0000
with a copy to:
Certilman Balin Xxxxx & Xxxxx, LLP
00 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Telecopier Number: (000) 000-0000
If to the Employee:
00 Xxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
or such other address as shall be furnished in writing by either such party as
provided for above.
(b) Notwithstanding the foregoing, any delivery pursuant to Section 5(e)
hereof shall be made by hand, facsimile transmission or overnight mail or
nationally recognized overnight courier.
15. Counterparts; Headings. This Retirement Agreement may be executed in
counterparts, each of which shall be an original, but all of which taken
together shall constitute one agreement. The headings contained in this
Retirement Agreement are solely for the convenience of the parties, and are not
intended to and do not limit, construe or modify any of the terms and conditions
hereof.
16. Representation by Counsel. (a) The Employee acknowledges and agrees
that he has been represented by counsel of his choice in connection with the
negotiation and execution of this Retirement Agreement, and that he has read and
understands this Retirement Agreement, including, without limitation, the
provisions of Section 5 hereof, and has signed it freely and voluntarily.
(b) The Employee acknowledges and agrees that, since he has been
represented by counsel in connection with this Retirement Agreement, any rule or
law or any legal decision that would require the interpretation of any claimed
ambiguities in this Retirement Agreement against the party that drafted it has
no application and is expressly waived by him. The provisions of this Retirement
Agreement shall be interpreted in a reasonable manner to give effect to the
intent of the parties hereto.
If this Retirement Agreement correctly sets forth our agreement with
respect to the subject matter contained herein, please so indicate by signing
where indicated below and returning it to the Company at the address set forth
above.
Very truly yours,
COMPUFLIGHT, INC.
/s/ Xxxxxx Xxxxxxxxx
--------------------
By:
Xxxxxx Xxxxxxxxx
Chief Executive Officer
ACKNOWLEDGED AND AGREED:
/s/ Xxxxxx X. Xxxx
---------------------
Xxxxxxx X. Xxxx
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On August __ , 1999, before me, personally came Xxxxxxx X. Xxxx, to me
known, and known to me to be the individual described in, and who executed the
foregoing Retirement Agreement, and duly acknowledged to me that he executed
same.
/s/ Notary Public
------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On August __, 1999, before me personally came Xxxxxx Xxxxxxxxx, to me
known, who, by me duly sworn, did depose and say that deponent is the Chief
Executive Officer of Compuflight, Inc., the corporation described in, and which
executed the forgoing Retirement Agreement, and that deponent signed deponent's
name by order of the Board of Directors of such corporation.
/s/ Notary Public
--------------------------
Notary Public
Exhibit B
RESOLUTIONS ADOPTED BY
BOARD OF DIRECTORS
OF
COMPUFLIGHT, INC.
AUGUST 25, 1999
RESOLVED, that the Corporation enter into a Retirement Agreement with Xxxxxxx X.
Xxxx (the "Agreement") providing for, among other things, the payment to Xx.
Xxxx of a retirement payment of $600,000 and the reimbursement of expenses of
approximately $60,594; that, in connection therewith, the Corporation execute
and deliver to Xx. Xxxx Promissory Notes in such principal amounts evidencing
its obligation to pay the amounts owed (the "Notes"); and that the Chief
Executive Officer of the Corporation be, and he hereby is, authorized and
directed to execute and deliver the Agreement and the Notes in, or substantially
in, the forms attached hereto as exhibits, with such changes thereto as such
authorized officer shall deem necessary or appropriate (to be conclusively
presumed by his execution and delivery thereof).
RESOLVED, that the Chief Executive Officer of the Corporation and each other
officer of the Corporation be, and each of them hereby is, authorized, empowered
and directed to take all such further action and to execute and deliver all such
further agreements, instruments and documents in the name and on behalf of the
Corporation and under its corporate seal or otherwise, and to pay all such
expenses and taxes, as in their judgment shall be necessary, proper or advisable
in order to carry out fully the intent and accomplish the purposes of the
foregoing resolution.
