AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of April 22,
1999 (the "Agreement"), is by and between World Airways, Inc., a Delaware
corporation, its successors and assigns (hereinafter "World") and Xxxxxxx X.
Xxxxx (Xxxxx).
WHEREAS, World and Xxxxx wish to amend the Employment Agreement between
themselves dated as of June 9, 1997; and
WHEREAS, Xxxxx has agreed to serve as a member of World's senior management team
in charge of Strategic Planning as of the date hereof;
NOW, THEREFORE, World and Xxxxx in consideration of the mutual covenants and
promises contained herein, do hereby agree as follows:
1. ACCEPTANCE OF EMPLOYMENT. Subject to the terms and conditions set forth
below, World agrees to continue to employ Xxxxx in the above described new
position and Xxxxx accepts such employment.
2. TERM. The period of employment shall be from the date first written above
through December 31, 1999, unless further extended or sooner terminated as
hereinafter set forth. Not later than June 15th of each year, Xxxxx shall
initiate discussions with the President and CEO regarding the renewal of the
Agreement. If World does not wish to renew this Agreement at its expiration, or
wishes to renew on different terms, World shall give written notice to Xxxxx by
June 30th of each year. If Xxxxx does not wish to renew this Agreement at its
expiration, or wishes to renew on different terms, Xxxxx shall give written
notice to World by June 30th of each year. In the absence of notice, this
Agreement shall be renewed on the same terms and conditions for successive terms
of one year from the date of expiration.
3. POSITION AND DUTIES. Xxxxx shall serve as World's senior executive of
Strategic Planning with the duties performed as of the date hereof, which duties
and responsibilities will include fleet planning, providing analysis and
development of corporate strategy (Strategy), selling of the Strategy to
internal and external stakeholders, developing corporate plans (Plans) to
implement the strategy, and monitoring the implementation of the Strategy and
Plans. The President and CEO will have reasonable latitude to make changes in
Xxxxx'x responsibilities, except that Xxxxx'x responsibilities may not be
modified in a way that would be inconsistent with the status of a company
executive. Following a Change of Control (as hereinafter defined), Xxxxx'x
responsibilities may not be changed without mutual agreement. Xxxxx agrees to
render his services to the best of his abilities and will comply with all
policies, rules and regulations of the company and will advance and promote to
the best of his ability the business and welfare of the company. Xxxxx shall
devote all of his working time, attention, knowledge and skills solely to the
business and interest of World. Xxxxx may not accept any other engagement with
or without compensation which would affect his ability to devote all of his
working time and attention to the business and affairs of World without the
prior written approval of the President and CEO. Xxxxx agrees to accept
assignments on behalf of World or affiliated companies commensurate with his
responsibilities hereunder, except that the terms and conditions of assignments
exceeding 60 consecutive days outside the Washington, D.C. metropolitan area
will require mutual agreement.
4. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. Xxxxx shall receive a minimum salary of $170,000 per
annum payable in accordance with the payroll procedures for World's
salaried employees in effect during the term of this Agreement. Xxxxx
agrees to participate equally, on a percentage basis, in any across the
board salary reductions approved by senior management.
(b) ELIGIBILITY FOR BONUSES. Xxxxx shall be eligible to receive an
annual bonus pursuant to World's management incentive compensation
plan, if any, as the Board of Directors may adopt from time to time.
(c) PERFORMANCE STOCK OPTIONS. Xxxxx has been granted options to
purchase World's Common Stock, par value $.001 per share ("World
Airways Common Stock") pursuant to the 1995 World Airways Stock Option
Plan (the "Plan") as set forth in the Stock Option Agreement between
World and Xxxxx dated June 9, 1997 (the "Option Agreement").
(d) BUSINESS EXPENSES. Xxxxx shall be entitled to reimbursement of
reasonable business related expenses from time to time consistent with
World's policies, including, without limitation, submitting in a timely
manner appropriate documentation of such expenses.
(e) FRINGE BENEFITS. Xxxxx shall be entitled to participate in all
employee benefit plans made available from time to time to all
executives of World in accordance with the terms of such plans.
(f) PERSONNEL POLICIES, CONDITIONS AND BENEFITS. Except as otherwise
provided herein, Xxxxx'x employment shall be subject to the personnel
policies and benefits plans which apply generally to World's employees
as the same may be interpreted, adopted, revised or deleted from time
to time, during the term of this Agreement, by World in its sole
discretion. While this Agreement is in effect, Xxxxx shall accrue
vacation at the rate of one month per year and such vacation shall be
taken in accordance with the Company's procedures.
(g) INDEMNIFICATION; D&O INSURANCE. Subject to Section 9(f) of this
Agreement, World shall provide (or cause to be provided) to Xxxxx
indemnification against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlements in connection with any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including an action
by or in the right of World) by reason of his being or having been an
officer, director or employee of World or any affiliated entity,
advance expenses (including attorneys' fees) incurred by Xxxxx in
defending any such civil, criminal, administrative or investigative
action, suit or proceeding and maintain directors' and officers'
liability insurance coverage (including coverage for securities-related
claims) upon substantially the same terms and conditions as set forth
in the Indemnification Agreement of even date herewith between Xxxxx
and World Airways, Inc. (the "Indemnity Agreement").
5. TERMINATION OF EMPLOYMENT.
(a) DEATH. Xxxxx'x employment hereunder shall terminate upon his death,
in which event World shall have no further obligation to Xxxxx or his
estate with respect to compensation, other than the disposition of life
insurance and related benefits and accrued and unpaid base salary and
incentive compensation for periods prior to the date of termination, if
any, pursuant to the terms of the respective employee benefits and
incentive compensation plans then in effect.
(b) BY WORLD FOR DISABILITY. If Xxxxx incurs a disability and such
disability continues for a period of twelve (12) consecutive months,
then World may terminate this Agreement upon written notice to Xxxxx,
in which event World shall have no obligation to Xxxxx with respect to
compensation under Section 4(a) of this Agreement. The term
"disability" means a physical or mental illness that will prevent Xxxxx
from performing the essential functions of his job for at least twelve
(12) months or is likely to result in death. If Xxxxx becomes entitled
to Social Security benefits payable on account of disability, he will
be deemed conclusively to be disabled for purposes of this Agreement.
c) BY WORLD FOR CAUSE.
(i) Except under the circumstances set forth in 5(c)(ii)
below, the President and CEO of World may terminate this
Agreement, subject to Section 9(f) and those provisions that
survive this Agreement, for Cause. "Cause" shall be defined as
(A) sustained performance deficiencies which are communicated
to Xxxxx in written performance appraisals and/or other
written communications (including, but not limited to memos
and/or letters) by the President and CEO of World, (B) gross
misconduct, including significant acts or omissions
constituting dishonesty, intentional wrongdoing or
malfeasance, whether or not relating to the business of World,
C) commission of a felony or any crime involving fraud or
dishonesty, or (D) a material breach of this Agreement.
(ii) In the event of a Change of Control, as defined below,
Xxxxx may only be terminated for Cause pursuant to a
resolution duly adopted by the affirmative vote
of a majority of the entire membership of the Board at a
meeting of the Board finding that, in the good faith opinion
of the Board, Xxxxx was guilty of conduct set forth in
5(c)(i)(A), (B), (C) or (D) provided, however, that Xxxxx may
not be terminated for Cause hereunder unless: (1) Xxxxx
receives prior written notice of World's intention to
terminate this Agreement for Cause and the specific reasons
therefor; and (2) Xxxxx has an opportunity to be heard by
World's Board of Directors and be given, if the acts are
correctable, a reasonable opportunity to correct the act or
acts (or non-action) giving rise to such written notice. If
the Board by resolution duly adopted by the affirmative vote
of a majority of the entire membership of the Board finds that
Xxxxx fails to make such correction after reasonable
opportunity to do so, this Agreement may be terminated for
Cause.
(d) BY WORLD FOR OTHER THAN CAUSE. In the event the Board of Directors
terminates this Agreement for reasons other than Cause or Disability as
defined in sub-paragraph (c) above, World will pay to Xxxxx within ten
(10) days of notice of termination (or, in the case of incentive bonus
compensation, within ten (10) days of determination of amounts payable
under the applicable bonus plan) the greater of eighteen months base
salary, or the undiscounted remainder of his base salary, in each case
including deferred salary and/or bonus compensation, payable under this
Agreement. In addition, all granted but unvested stock options under
the Option Agreement shall become immediately exercisable. In the event
that any payment to Xxxxx under this paragraph is subject to any
federal or state excise tax, World shall pay to Xxxxx an additional
amount equal to the excise tax imposed including additional federal and
state income and excise taxes as a result of the payments under this
paragraph, and such payment will be made when the excise tax and income
taxes are due; provided, however, that Xxxxx agrees to assist World
Airways by using his best efforts to structure matters so that any
payment to Xxxxx under this paragraph is not subject to any federal or
state excise tax. Whether an excise tax is payable, and the amount of
the excise tax and additional income taxes payable, shall be determined
by World's accountants and World shall hold Xxxxx harmless for any and
all taxes, penalties, and interest that may become due as a result of
the failure to properly determine that an excise tax is payable or the
correct amount of the excise tax and additional income taxes, together
with all legal and accounting fees reasonably incurred by Xxxxx in
connection with any dispute with any taxing authority with respect to
such determinations and/or payments. In the event of a disagreement
between World and Xxxxx as to whether the termination was for Cause,
that issue shall be submitted by Xxxxx within twenty (20) days of the
notice of termination to binding arbitration, or any objection to
World's determination that termination is for Cause shall be waived.
(e) BY XXXXX FOR GOOD REASON. Xxxxx may terminate his employment
hereunder (for purposes of this Agreement "Good Reason") after giving
at least 30 days notice in the event that, without Xxxxx'x consent: (i)
World relocates its general and administrative offices or Xxxxx'x place
of employment to an area other than the Washington, D.C.
Standard Metropolitan Statistical Area, (ii) he is assigned any duties
substantially inconsistent with Section 3 hereof, (iii) World reduces
his annual base salary as in effect on the date hereof or as the same
may be increased from time to time, except as provided in Section 4(a)
herein; (iv) World fails, without Xxxxx'x consent, to pay Xxxxx any
portion of his current compensation, or to pay him any portion of an
installment of deferred compensation under any deferred compensation
program of World, within seven (7) days of the date such compensation
is due; (v) World fails to continue in effect any compensation plan in
which Xxxxx participates which is material to Xxxxx'x total
compensation, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such
plan, or to continue Xxxxx'x participation therein (or in such
substitute or alternative Plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of Xxxxx'x participation relative to other participants; (vi)
World fails to continue to provide Xxxxx with benefits substantially
similar to those enjoyed by Xxxxx under any of World's pension, life
insurance, medical, health and accident, or disability plans in which
Xxxxx was participating, World takes any action which would directly or
indirectly materially reduce any of such benefits or deprive Xxxxx of
any material fringe benefit enjoyed by Xxxxx, or World fails to provide
Xxxxx with the number of paid vacation days to which Xxxxx is entitled
hereunder; (vii) World terminates, or proposes to terminate, Xxxxx'x
employment hereunder contrary to the requirements of Section 5(c)
hereof (for purposes of this Agreement, no such termination or
purported termination shall be effective) and Xxxxx has submitted the
matter to arbitration, as set forth in Section 5(d); or (viii) the
Board approves the liquidation or dissolution of World prior to the end
of this Agreement. In the event that Xxxxx decides to terminate this
Agreement and his employment with World or any successor in interest in
accordance with the provisions of this Section 5(e), World shall have
the same obligations as set forth in Section 5(d) hereof. Any other
payments due or actions required under this paragraph shall be made as
lump sums or taken within 10 days of termination of the Agreement.
(f) BY XXXXX FOR OTHER THAN GOOD REASON. Notwithstanding the above,
Xxxxx may upon giving reasonable notice, not to be less than 30 days,
terminate this Agreement without further obligation on the part of
Xxxxx or World.
6. CHANGES OF CONTROL.
(a) For purposes of this Agreement, a "Change of Control" includes the
occurrence of any one or more of the following events:
(i) any Person is or becomes the Beneficial Owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of
securities of World representing more than 50% of the combined
voting power of World's then outstanding securities; or
(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board of World and any new director (other than
a director designated by a Person who has entered into an
agreement with World to effect a transaction described in
clause (i), (iii) or (iv) or this Section 5 (f)) whose
election by the Board of World or nomination for election by
the stockholders of World was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a majority
thereof; or
(iii) the shareholders of World approve a merger or
consolidation of World with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of World outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit
plan of World or any of its affiliates, at least 50% of the
combined voting power of the voting securities of World or
such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of World (or similar
transaction) in which no Person acquires more than 50% of the
combined voting power of World's then outstanding securities;
or
(iv) the shareholders of World approve a plan of complete
liquidation of World or an agreement for the sale or
disposition by World of all or substantially all of World's
assets.
(b) "PERSON" DEFINED. For purposes of this Section, "Person" shall have
the meaning given in Section (3)(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (i) World or WorldCorp, Inc. or any of their subsidiaries
or affiliates; (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of World or WorldCorp, Inc. or any of
their subsidiaries; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (iv) a corporation
owned, directly or indirectly, by the stockholders of World or
WorldCorp, Inc. in substantially the same proportions as their
ownership of stock of World or WorldCorp, Inc.
7. NOTICE OF TERMINATION. Termination of this Agreement by World or termination
of this Agreement by Xxxxx shall be communicated by written notice to the other
party hereto, specifically indicating the termination provision relied upon.
8. COMPANY PROPERTY. At the termination of Xxxxx'x employment, whether voluntary
or involuntary, Xxxxx shall return all company property, including without
limitation all electronic and paper files and documents and all copies thereof.
9. CONFIDENTIALITY/RESTRICTIVE COVENANT.
(a) Xxxxx recognizes and acknowledges that he will acquire during his
employment with World information that is confidential to World and
that represents valuable, special and unique assets of World
("Confidential Information"). Such Confidential Information (whether or
not reduced to tangible form) includes, but is not limited to: trade
secrets; financing documents and information; financial data; new
product information; copyrights; information relating to schedules and
locations; cost and pricing information; performance features; business
techniques; business methods; business and marketing plans or
strategies; business dealings and arrangements; business objectives;
customer information; sales information; acquisition, merger or
business development plans or strategies; research and development
projects; legal documents and information; personnel information; and
any and all other information concerning World's business and business
practices that is not generally known or made available to the public
or to World's competitors which, if misused or disclosed, could
adversely affect the business of World. Xxxxx agrees that he will not,
during employment with World and for a period of two (2) years
following termination of employment for any reason, whether voluntary
or involuntary, with or without Cause, directly or indirectly:
(i) disclose any Confidential Information to any person,
company or other entity (other than authorized persons
employed by or affiliated with World who, in the interest of
World, have a business need to know such information), or
(ii) use any Confidential Information in any way, except as
required by his duties to World or by law, unless he obtains
World's prior written approval of such disclosure or use.
World's rights under this Section shall be cumulative to, and
shall not limit, World's rights under the Virginia Uniform
Trade Secrets Act or any other state or federal trade secret
or unfair competition statute or law. The parties hereto
stipulate that as between them, the foregoing matters are
important, material, and confidential and gravely affect the
successful conduct of the business of World, and World's good
will, and that any breach of the terms of this paragraph shall
be a material breach of this Agreement.
(b) While employed by World and for a period of two (2) years following
termination of employment for any reason, whether voluntary or
involuntary, with or without Cause, Xxxxx agrees that he will not,
directly or indirectly, either as principal, agent, employee, employer,
owner, stockholder (owning more than 5% of a corporation's shares),
partner, contractor, consultant or in any other individual or
representative capacity:
(i) Request, induce or attempt to induce any customer of
World: (A) to terminate or curtail any business relationship
with World or (B) to establish or attempt to establish a
similar business relationship with a person or entity other
than World;
(ii) Solicit, cause, encourage or in any way assist any person
or entity to solicit, any aviation business from any person or
entity who at such time is, or within the preceding twelve
(12) months, had been a customer of World, unless such
customer of World was also already a customer of such other
person or entity on the date of Xxxxx'x termination;
(iii) Induce or attempt to induce any of World's officers,
directors, or employees to terminate their employment or
relationship with World, or induce or attempt to induce any
such persons to provide aviation-related services or services
similar to those they provide for World for any other person,
firm or organization.
(c) Xxxxx agrees that the restrictions set forth in this Agreement are
reasonable, proper, and necessitated by legitimate business interests
of World and do not constitute an unlawful or unreasonable restraint
upon Xxxxx'x ability to earn a livelihood. The parties agree that in
the event any of the restrictions in this Agreement are found to be
overbroad or unreasonable by a tribunal or court of competent
jurisdiction, the parties agree that this Agreement should be enforced
to the maximum extent allowed by applicable law, and the parties
authorize and request such court or tribunal to determine the maximum
time, geographic area, activity and other applicable limitations
allowable by law and to reform the applicable provisions to such
maximum limitations.
(d) Xxxxx acknowledges that it may be impossible to assess the monetary
damages incurred by his violation of this Agreement, or any of its
terms, and that any threatened or actual violation or breach of this
Agreement, or any of its terms, will constitute immediate and
irreparable injury to World. Therefore, Xxxxx expressly agrees that, in
addition to any and all monetary damages and other remedies and relief
available to World as a result of Xxxxx'x violation or breach of this
Agreement, World shall be entitled to an injunction restraining Xxxxx
from violating or breaching this Agreement, or any of its terms (and no
bond or other security will be required in connection therewith); World
will be entitled to specific performance of this Agreement; and World
will be entitled to recover its reasonable attorneys' fees and costs
incurred to enforce, or prosecute or defend any action relating to,
this Agreement. In the event World enforces this Agreement through
court order or other decree, Xxxxx agrees that the restrictions
contained in this Agreement shall remain in effect for a period of
twenty four (24) consecutive months from the effective date of such
order or decree enforcing the Agreement.
(e) Section 12 of this Agreement, relating to arbitration, shall not
apply to this Section 9. The parties agree that any dispute between
them relating to or involving this Section 9, including without
limitation, any question concerning the construction, validity,
application, interpretation or alleged breach or threatened breach of
this Section 9, shall be litigated in a court in the Commonwealth of
Virginia.
(f) Section 4(h) of this Agreement and any other indemnity agreements
between Xxxxx and World shall not apply to actions, suits or
proceedings to enforce World's rights under, or that otherwise relate
to, this Agreement, including without limitation, this Section 9.
(g) References in this Section 9 to "World" include World Airways, Inc.
and any and all of its current or future parents, subsidiaries,
affiliated companies, and divisions.
10. BENEFICIARY. The Beneficiary of any payment due and payable at the time of
Xxxxx'x death, or otherwise due upon his death, shall be such person or persons
as Xxxxx shall designate in writing to World. If no such beneficiary shall
survive Xxxxx, any such payments shall be made to his estate.
11. INTELLECTUAL PROPERTY.
(a) Any improvements, new techniques, processes, inventions, works,
discoveries, products or copyrightable or patentable materials made or
conceived by Xxxxx, either solely or jointly with other person(s), (1)
during Xxxxx'x period of employment by World, during working hours; (2)
during the period after termination of his employment during which he
is retained by World as a consultant; or (3) with use of World's
intellectual property or Confidential Information, shall be the sole
and exclusive property of World without royalty or other consideration
to Xxxxx.
(b) Xxxxx agrees to inform World promptly and in full of such
intellectual property by a full written report setting forth in detail
the procedures used and the results achieved.
(c) Xxxxx shall at World's request and expense execute any and all
applications, assignments, or other instruments which World shall deem
necessary to apply for, register, and/or obtain copyrights or Letters
Patent of the United States or of any foreign country, or to otherwise
protect World's interests in such intellectual property.
(d) Xxxxx shall assign and does hereby assign to World all interests
and rights, including but not limited to copyrights, in any such
intellectual property.
12. ARBITRATION. Except as described in Section 9, above, any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration, under the commercial arbitration rules of the
American Arbitration Association. The prevailing party in any such arbitration,
or any court action to enforce or vacate an arbitration award, shall be entitled
to its costs and reasonable attorneys fees from the other party.
13. NO WAIVER. The failure of either party at any time to enforce any provisions
of this Agreement or to exercise any remedy, option, right, power or privilege
provided for herein, or to require the performance by the other party of any of
the provisions hereof, shall in no way be deemed a waiver of such provision at
the same or at any prior or subsequent time.
14. GOVERNING LAW. All questions concerning the construction, validity,
application and interpretation of this Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia without giving
effect to any choice of law or conflict of law provision or rule (whether of
Virginia or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than Virginia. Xxxxx agrees to submit to personal
jurisdiction in the State of Virginia.
15. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not be deemed to affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
16. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
World, its successors and assigns, including any corporation or other business
entity which may acquire all or substantially all of World's assets or business,
or within which World may be consolidated or merged, or any surviving
corporation in a merger involving World.
17. WAIVER OR MODIFICATION OF AGREEMENT. No waiver or modification of this
Agreement shall be valid unless in writing and duly executed by both parties.
18. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
WORLD AIRWAYS, INC.
By: ________________________________
Xxxxxxx X. Xxx, Xx.
President and CEO
________________________________
Xxxxxxx X. Xxxxx
