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EXHIBIT 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of May 30, 1999 between
Worldwide Flight Services, Inc., a Delaware corporation, together with its
subsidiaries (the "Company") and Xxxx Xxxxxxxxx (the "Executive").
WHEREAS, the parties wish to establish the terms of Executive's future
employment with the Company.
Accordingly, the parties agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment by the Company. The Company shall employ the Executive
effective as of July 12, 1999 (the "Effective Date") to render exclusive and
full-time services to the Company. The Executive will serve in the capacity of
Chief Operating Officer and President of the Company and shall serve as a member
of the Board of Directors of the Company. The Executive will perform such duties
as are imposed on the holder of that office by the By-laws of the Company and
such other duties as are customarily performed by one holding such positions in
the same or similar businesses or enterprises as those of the Company. The
Executive will perform such other duties as may be assigned to him from time to
time by the Chief Executive Officer or the Board of Directors of the Company.
The Executive will devote all his full working-time and attention to the
performance of such duties and to the promotion of the business and interests of
the Company. This provision, however, will not prevent the Executive from
investing his funds or assets in any form or manner, or from acting as a member
of the board of directors of any companies, businesses, or charitable
organizations, so long as such actions do not violate the provisions of Section
5.
1.2 Acceptance of Employment by the Executive. The Executive accepts
such employment and shall render the services described above.
2. Duration of Employment.
This Agreement and the employment relationship hereunder will continue
in effect for three (3) years from the Effective Date (the "Term"). At a time at
least nine months prior to the expiration of the Term, the Company and the
Executive shall discuss whether the Agreement should be renewed upon mutual
written agreement. In the event of the Executive's termination of employment
during the Term, the Company's obligation to continue to pay all base salary,
bonus and other benefits then accrued shall terminate except as may be provided
for in Section 4 of this Agreement.
3. Compensation by the Company.
3.1 Base Salary. As compensation for all services rendered pursuant to
this Agreement, the Company will pay to the Executive an annual base salary
("Base Salary") of
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Two Hundred Thirty-Five Thousand Dollars ($235,000), subject to the adjustment
by the Board of Directors of the Company, in its sole discretion, and payable in
accordance with the payroll practices of the Company.
3.2. Bonuses. The Executive shall be entitled to receive from the
Company an annual cash bonus up to a maximum amount of 50% of Base Salary, as
adjusted, determined by the Compensation Committee of the Board of Directors of
the Company. For the 1999 fiscal year, any bonus paid to the Executive in 2000
will be prorated based on the Effective Date.
3.3 Signing Bonus. The Company shall pay to the Executive a one-time
bonus of Sixty-Two Thousand Five Hundred Dollars ($62,500) as follows: (i)
Thirty Thousand Dollars ($30,000) on the Effective Date and (ii) Thirty-Two
Thousand Five Hundred Dollars ($32,500) on the three month anniversary of the
Effective Date, with respect to the foregone value of unvested stock options and
stock granted by British Airways.
3.4 Participation in Employee Benefit Plans. The Executive shall be
permitted, during the Term, if and to the extent eligible, to participate in any
group life, hospitalization or disability insurance plan, health program,
pension plan or similar benefit plan of the Company, which may be available to
other executives of the Company generally, on the same terms as such other
executives. Additionally, in lieu of spousal coverage under the Company's health
plans, the Executive shall be entitled to cover Marillia Duffles under the
Company's health plans; provided, however, to the extent that such coverage is
not permitted under the terms of such plans, the Company shall pay to the
Executive an amount equal to the economic equivalent of obtaining such coverage,
provided that the Executive will consult with the Company on the most efficient
way to obtain such coverage.
3.5 Stock Options. The Company shall grant to the Executive stock
options under the CHP III Services Holding Corporation 1999 Stock Option Plan
(the "Stock Option Plan") for the purchase of 10,000 shares of the Company's
non-voting common stock, at an exercise price of $3.25 per share. All terms and
conditions applicable to such stock options shall be governed by the provisions
of the Stock Option Plan and any stock option agreements thereunder.
3.6 Purchase of Stock. The Company shall provide the Executive with the
opportunity to purchase an additional 25,000 shares of the Company's preferred
stock, at the price of $10 per share, and 10,000 shares of voting common stock,
at the price of $3.25 per share, in accordance with the Management Subscription
Agreement and the Management Stock BuyBack Agreement between CHP Services
Holding Corporation and the Executive. The Company and Executive may agree to
have the Company finance, with full recourse, up to fifty percent (50%) of the
purchase price of such preferred and voting common stock.
3.7 Car Allowance. The Executive shall be entitled to a monthly car
allowance equal to $400.
3.8 Vacation. The Executive shall be entitled to twenty (20) days of
paid vacation per year.
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3.9 Expense Reimbursement. During the Term, the Executive shall be
entitled to receive prompt reimbursement of all reasonable out-of-pocket
expenses properly incurred by him in connection with his duties under this
Agreement, including reasonable expenses of entertainment and travel, provided
that such expenses are properly approved, documented and reported in accordance
with the policies and procedures of the Company applicable at the time the
expenses are incurred.
3.10 Location and Commuting Expenses. For a period not to exceed
eighteen (18) months from the Effective Date, the Company shall provide
reimbursement to the Executive for (i) a furnished rental apartment in the
Dallas/Fort Worth, Texas, area at a cost not to exceed Two Thousand Five Hundred
Dollars ($2,500) per month and (ii) travel to and from Miami, Florida to
Dallas/Fort Worth for the Executive or Marillia Duffles at a cost not to exceed
Three Thousand Five Hundred Dollars ($3,500) per month, with the Executive using
his best reasonable efforts to coordinate personal travel with Company business
related travel.
3.11 Relocation Package. The Company shall offer to the Executive a
comprehensive relocation package in the event that the Executive chooses to move
from Miami to the Dallas/Fort Worth area.
4. Termination.
4.1 Termination Upon Death. If the Executive dies during the term
hereof, the Executive's legal representatives shall be entitled to receive the
Executive's Base Salary, as adjusted, and accrued bonus for the period ending on
the last day of the month in which the death of the Executive occurs.
4.2 Termination Upon Disability. If during the Term the Executive meets
the requirements for physical or mental disability under the Company's long-term
disability plan and is eligible to receive benefits thereunder, the Company may
at any time prior to the Executive's recovery but after the last day of the
sixth consecutive month of such disability, by written notice to the Executive,
terminate the Executive's employment hereunder.
Additionally, in such event, the Executive (or his legal
representatives) shall be entitled to receive the Executive's Base Salary, as
adjusted, and accrued bonus for the period ending on the date such termination
occurred. Nothing in this Section 4.2 shall be deemed to in any way affect the
Executive's right to participate in any disability plan maintained by the
Company and for which the Executive is otherwise eligible.
4.3 Termination for Cause. The Executive's employment hereunder may be
terminated by the Company for "Cause" (as herein defined) at any time. "Cause"
shall mean with respect to the Executive, (a) the Executive's willful and
continued failure to substantially perform the Executive's duties, (b) repeated
acts of insubordination, or willful failure to execute Company plans and/or
strategies, (c) acts of dishonesty resulting or intending to result in personal
gain or enrichment at the expense of the Company, (d) conviction of, or pleading
guilty or no contest to, a felony, all as determined by the Board of Directors
of the Company in its reasonable judgment; (e) reasonable evidence presented in
writing to the Executive that the Executive engaged in a criminal act involving
moral turpitude or willful misconduct or (f) conduct not conforming to
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standards of good citizenship or good moral character or which is potentially
detrimental to the Company's business, reputation, character or standing,
provided that, in the case of clauses (a) and (b), the Executive shall be
entitled to written notice from the Company and twenty (20) days to cure such
deficiency. Breach of this Agreement and to the extent that an Executive is
subject to a non-competition and confidentiality agreement, breach of such
non-competition and confidentiality agreement, shall constitute Cause under this
Agreement.
Upon termination for Cause hereunder the Executive shall be entitled to
receive the Executive's Base Salary, as adjusted, through the date of
termination.
4.4 Voluntary Termination by the Executive. The Executive may upon at
least ninety (90) days' prior written notice to the Company terminate employment
hereunder.
(a) Upon a voluntary termination for other than Good Reason, the
Executive shall be entitled to receive the Executive's Base Salary, as adjusted,
through the date of termination.
(b) Upon a voluntary termination for Good Reason (other than the
Executive's election to terminate his employment following a Change in Control
as provided in Section 4.5 hereof), the Executive shall be entitled to receive,
(i) in lieu of salary payments to the Executive for periods subsequent to the
date of such termination, the greater of (1) Base Salary, as adjusted, for
eighteen (18) months or (2) Base Salary, as adjusted, for the remaining duration
of the Term and (ii) for the period applicable under (i)(1) or (2) above after
such voluntary termination for Good Reason, the Company shall arrange to provide
the Executive with life, disability, accident and group health insurance
benefits substantially similar to those which the Executive was receiving
immediately prior to the notice of termination. Benefits otherwise receivable by
the Executive pursuant to this provision (ii) shall be reduced to the extent
comparable benefits are actually received by the Executive during the period
following the Executive's termination, and any such benefits actually received
by the Executive shall be reported to the Company.
The term "Good Reason" shall mean (1) a reduction in Base Salary or
any agreed upon benefit under this Agreement without the Executive's consent;
provided, that the Company may at any time or from time to time amend, modify,
suspend or terminate any bonus, incentive compensation or other benefit plan or
program provided to the Executive for any reason and without the Executive's
consent if such modification, suspension or termination is consistent with
similarly situated employees or (2) a material adverse change in the Executive's
responsibilities, position, duties, resources, personnel, reporting
responsibilities or support assigned to the Executive without his or her prior
consent.
4.5 Voluntary Termination by the Executive upon a Change in Control.
In the event of a Change in Control, the Executive shall have the
right (by written notice to the Company within 10 business days of such Change
in Control) to terminate his employment with the Company upon his election. In
that event, the Executive shall be entitled to (a) an immediate lump sum cash
payment of nine (9) months of his Base Salary, as
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adjusted and (b) for the period of nine (9) months after such voluntary
termination upon a Change in Control, the Company shall arrange to provide the
Executive with life, disability, accident and group health insurance benefits
substantially similar to those which the Executive was receiving immediately
prior to the notice of termination. Benefits otherwise receivable by the
Executive pursuant to this provision (b) shall be reduced to the extent
comparable benefits are actually received by the Executive during the period
following the Executive's termination, and any such benefits actually received
by the Executive shall be reported to the Company. The term "Change in Control"
shall be as defined in Section 2 of the CHP III Services Holding Corporation
1999 Stock Option Plan.
4.6 Termination by the Company Other Than For Cause.
(a) If, prior to the expiration of this Agreement, the Company
terminates the Executive's employment for any reason other than Cause, in lieu
of salary payments to the Executive for periods subsequent to the date of such
termination, the Company shall pay to the Executive the greater of (i) Base
Salary, as adjusted, for eighteen (18) months or (ii) Base Salary, as adjusted,
for the remaining duration of the Term.
(b) For the period applicable under (a)(i) or (ii) above after any
termination pursuant to this Section 4.6, the Company shall arrange to provide
the Executive with life, disability, accident and group health insurance
benefits substantially similar to those which the Executive was receiving
immediately prior to the notice of termination. Benefits otherwise receivable by
the Executive pursuant to this paragraph (b) shall be reduced to the extent
comparable benefits are actually received by the Executive during the period
following the Executive's termination, and any such benefits actually received
by the Executive shall be reported to the Company.
(c) Nothing contained in this Section 4.6 shall prevent the
Executive from receiving any and all benefits payable under any severance
benefit plan or program maintained by the Company to which the Executive is
entitled.
5. Restrictions and Obligations of the Executive.
5.1 Confidentiality.
(a) The confidential and proprietary information and, in any
material respect, trade secrets of the Company are among its most valuable
assets, including but not limited to, its customer and vendor lists, database,
engineering, computer programs, frameworks, models, its marketing programs, its
sales, financial, marketing, training and technical information, and any other
information, whether communicated orally, electronically, in writing or in other
tangible forms concerning how the Company creates, develops, acquires or
maintains its products and marketing plans, targets its potential customers and
operates its retail and other businesses. The Company invested, and continues to
invest, considerable amounts of time and money in its process, technology,
know-how, obtaining and developing the goodwill of its customers, its other
external relationships, its data systems and data bases, and all the information
described above (hereinafter collectively referred to as "Confidential
Information"), and any misappropriation or unauthorized disclosure of
Confidential Information in any form
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would irreparably harm the Company. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all Confidential Information relating to
the Company and its business, which shall have been obtained by the Executive
during the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or representatives
of the Executive in violation of this Agreement).The Executive shall take all
reasonable steps to safeguard the Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft. The Executive understands
and agrees that the Executive shall acquire no rights to any such Confidential
Information.
(b) All files, records, documents, drawings, specifications, data,
computer programs, evaluation mechanisms and analytics and similar items
relating thereto or to the Business ( for the purposes of this Agreement,
"Business" shall be as defined in any non-competition and confidentiality
agreement that may be established between the Executive and the Company and/or
CHP III Services Holding Corporation), as well as all customer lists, specific
customer information, compilations of product research and marketing techniques
of the Company, whether prepared by the Executive or otherwise coming into the
Executive's possession, shall remain the exclusive property of the Company, and
the Executive shall not remove any such items from the premises of the Company,
except in furtherance of the Executive's duties under this Employment Agreement.
(c) It is understood that while employed by the Company the
Executive will promptly disclose to it, and assign to it the Executive's
interest in any invention, improvement or discovery made or conceived by the
Executive, either alone or jointly with others, which arises out of the
Executive's employment. At the Company's request and expense, the Executive will
assist the Company during the period of the Executive's employment by the
Company and thereafter in connection with any controversy or legal proceeding
relating to such invention, improvement or discovery and in obtaining domestic
and foreign patent or other protection covering the same.
(d) As requested by the Company from time to time and upon the
termination of the Executive's employment with the Company for any reason, the
Executive will promptly deliver to the Company all copies and embodiments, in
whatever form, of all Confidential Information in the Executive's possession or
within his control (including, but not limited to, memoranda, records, notes,
plans, photographs, manuals, notebooks, documentation, program listings, flow
charts, magnetic media, disks, diskettes, tapes and all other materials
containing any Confidential Information) irrespective of the location or form of
such material. If requested by the Company, the Executive will provide the
Company with written confirmation that all such materials have been delivered to
the Company as provided herein.
5.2 Non-Solicitation or Hire. During the Term and for a three (3) year
period following the termination of the Executive's employment for any reason,
the Executive shall not, (i) solicit, directly or indirectly, any party who is a
customer of the Company or its subsidiaries, or who was a customer of the
Company or its subsidiaries at any time during the twelve month period
immediately prior to the relevant date, for the purpose of marketing, selling or
providing to any party any services or products offered by or available from the
Company or its subsidiaries and relating to the Business, (provided that if the
Executive intends to solicit any
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such party for any other purpose, it shall notify the Company of such intention)
or (ii) employ or solicit, directly or indirectly, for employment any person who
is an employee of the Company or any of its subsidiaries or who was an employee
of the Company or any of its subsidiaries at any time during the twelve month
period immediately prior to any such solicitation or employment.
5.3 Non-Competition. The Executive shall be bound by the terms of any
non-competition and confidentiality agreement that may be established between
the Executive and the Company and/or CHP III Services Holding Corporation.
5.4 During the Term, the Executive agrees not to engage in any act that
is intended, or may reasonably by expected to harm the reputation, business,
prospects or operations of the Company, its officers, directors, stockholders or
employees. The Company further agrees that it will engage in no act which is
intended, or may reasonably be expected to harm the reputation, business or
prospects of the Executive.
5.5 Property. The Executive acknowledges that all originals and copies
of materials, records and documents generated by him or coming into his
possession during his employment by the Company are the sole property of the
Company ("Company Property"). During the Term, and at all times thereafter, the
Executive shall not remove, or cause to be removed, from the premises of the
Company, copies of any record, file, memorandum, document, computer related
information or equipment, or any other item relating to the business of the
Company, or any affiliate, except in furtherance of his duties under the
Agreement. When the Executive terminates his employment with the Company, or
upon request of the Company at any time, the Executive shall promptly deliver to
the Company all copies of Company Property in his possession or control.
5.6 Work Product. The Executive agrees that all inventions, discoveries,
systems, interfaces, protocols, concepts, formats, creations, developments,
designs, programs, products, processes, investment strategies, materials,
computer programs or software, data bases, improvements, or other properties
related to the business of the Company or any of its affiliates, conceived, made
or developed during the term of his employment with the Company, whether
conceived by the Executive alone or working with others, and whether patentable
or not (the "Work Product"), shall be owned by and belong exclusively to the
Company. The Executive hereby assigns to the Company his entire rights to the
Work Product and agrees to execute any documents and take any action reasonably
requested by the Company to protect the rights of the Company in any Work
Product. The Executive acknowledges that any copyrightable subject matter
created by the Executive within the scope of his employment, whether containing
or involving Confidential Information or not, is deemed a work-made-for-hire
under Chapter 17 of the United States Code, entitled "Copyrights," as amended,
and the Company shall be deemed the sole author and owner thereof for any
purposes whatsoever. In the event of any unauthorized publication of any
Confidential Information, the Company shall automatically own the copyright in
such publication. Further, the Company shall automatically hold all patents
and/or trademarks, if any, with respect to any Work Product.
5.7 Tax Withholding. The Company or other payor is authorized to
withhold, from any benefit provided or payment due hereunder, the amount of
withholding taxes
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due any federal, state or local authority in respect of such benefit or payment
and to take such other action as may be necessary in the opinion of the Board of
Directors of the Company to satisfy all obligations for the payment of such
withholding taxes.
6. Other Provisions.
6.1. Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally or sent by
certified mail, postage prepaid, as follows:
(a) If the Company, to:
Worldwide Flight Services, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
XX #0000
Xxxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
CHP III Services Holding Corporation
c/o Xxxxxx Xxxxxx Partners III, L.P.
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
And a copy to:
Xxxxxx Xxxxxx, Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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And a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If the Executive, to his home address set forth in the records of
the Company.
6.2 Entire Agreement. Except as provided in Sections 3.5, 3.6 and 5.3
hereof, this Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
6.3 Waiver and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
6.4 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
6.5 Assignability. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. Subject to the
Executive's rights under Section 4.5, the Company may assign this Agreement and
its rights, together with its obligations, to any other entity which will
substantially carry on the business of the Company.
6.6 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
6.7 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of terms
contained herein.
6.8 Remedies; Specific Performance. The parties hereto hereby
acknowledge that the provisions of Section 5 are reasonable and necessary for
the protection of the Company. In addition, the Executive further acknowledges
that the Company will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive agrees that, in addition to
any other relief to which the Company may be entitled, the Company
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will be entitled to seek and obtain injunctive relief (without the requirement
of any bond) from a court of competent jurisdiction for the purposes of
restraining the Executive from any actual or threatened breach of such
covenants. In addition, without limiting the Company's remedies for any breach
of any restriction on the Executive set forth in Section 5, except as required
by law, the Executive shall not be entitled to any payments set forth in Section
4 hereof if the Executive breaches any of the covenants applicable to the
Executive contained in Section 5, the Executive will immediately return to the
Company any such payments previously received under Sections 4.4, 4.5 and 4.6
upon such a breach, and, in the event of such breach, the Company will have no
obligation to pay any of the amounts that remain payable by the Company under
Section 4.
6.9 Severability. If any term, provision, covenant or restriction of
this Agreement, or any part thereof, is held by a court of competent
jurisdiction of any foreign, federal, state, county or local government or any
other governmental, regulatory or administrative agency or authority to be
invalid, void, unenforceable or against public policy for any reason, 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 or
impaired or invalidated. The Executive acknowledges that the restrictive
covenants contained in Section 5 are a condition of this Agreement and are
reasonable and valid in geographical and temporal scope and in all other
respects.
6.10 Judicial Modification. If any court or arbitrator determines that
any of the covenants in Section 5, or any part of any of them, is invalid or
unenforceable, the remainder of such covenants and parts thereof shall not
thereby be affected and shall be given full effect, without regard to the
invalid portion. If any court or arbitrator determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, such court or arbitrator shall
reduce such scope to the minimum extent necessary to make such covenants valid
and enforceable.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the day and year first above
mentioned.
EXECUTIVE
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
WORLDWIDE FLIGHT SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
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