Exhibit 10.12(b)
AMENDED AND RESTATED SEVERANCE AGREEMENT
This Amended And Restated Severance Agreement (the
"Agreement") is made and entered into as of this 28th day of
December, 2001 (the "Effective Date"), by and between ATLANTIC
COAST AIRLINES HOLDINGS, INC., a Delaware corporation ("ACAH")
and ATLANTIC COAST AIRLINES, a California corporation ("ACA")
(ACAH and ACA are herein collectively referred to as the
"Company") and THOMAS J. MOORE ("Moore").
Witnesseth That:
Whereas, Moore is currently employed by the Company as
Chief Operating Officer and President, and in connection with
such employment entered into a Severance Agreement (last restated
as of December 28, 1999) with the Company; and
Whereas, the Company wishes to assure itself of the
continued services of Moore; and
Whereas, the Board of Directors of the Company has
determined that the best interests of the Company would be served
by entering into this amended and restated Agreement with Moore;
Now, Therefore, the parties, for and in consideration
of the mutual and reciprocal covenants and agreements hereinafter
contained, and intending to be legally bound hereby, do contract
and agree as follows:
1. Employment. Company hereby employs Moore and Moore
hereby accepts employment by Company and agrees to perform his
duties and responsibilities hereunder upon all of the terms and
conditions as are hereinafter set forth.
2. Duties. Moore shall serve the Company in the
capacities of Chief Operating Officer and President. Moore shall
be responsible for supervising and directing all operations of
the Company and of any other entity(ies) to which the Company's
obligations under this Agreement shall be assigned pursuant to
Paragraph 12. Moore shall otherwise be responsible for carrying
out all such other duties and services for the Company
commensurate with Moore's position, as may be designed from time
to time by the Chief Executive Officer of the Company (the
"CEO").
3. Term of Employment. Moore's term of employment
under this Restated Agreement shall commence on the Effective
Date and shall terminate on the last day of the calendar month
which is twelve (12) calendar months after the Effective Date,
unless further extended as hereinafter set forth. Commencing on
each successive anniversary of the Effective Date, the Agreement
shall automatically be extended for an additional twelve (12)
months without further action by either party unless Moore's
employment has previously been terminated or unless Moore or the
Company has provided notice of intention to terminate Moore's
employment pursuant to the terms of Paragraph 10 below, in which
case Moore's term of employment under this Agreement will be
extended to the pending Termination Date.
4. Extent of Service. Moore shall devote such time
and attention as is required to perform his obligations under
this Agreement and will at all times faithfully and
industriously, consistent with his ability, experience and
talent, perform his duties hereunder under the direction of the
CEO.
5. Compensation During the term of this Agreement.
Company agrees to pay to Moore, and Moore agrees to accept from
Company, in full payment for services rendered by Moore and work
to be performed by him under the terms of this Agreement, the
following:
A. Salary. An annual base salary of [Two
Hundred Fifty Thousand Dollars ($250,000)]. Commencing on
October 1, 2002 and on each October 1 thereafter, the amount of
Moore's base salary shall be increased as determined by the
Compensation Committeeof the Board of Directors of the Company
(the "Compensation Committee"). Moore's base salary for each
year shall be payable to him in accordance with the reasonable
payroll practices of the Company as from time to time in effect
for executive employees (but in no event less often than
monthly).
B. Management Incentive Plan. Moore shall
participate in the Company's Management Incentive Program, or any
successor bonus plan or program for management employees.
C. Executive Bonuses. Moore shall be eligible
for an additional annual bonus under an executive performance
bonus plan currently known as Senior Management Incentive Plan
("SMIP") for so long as the Board of Directors determines to
maintain such plan. Under such plan, each calendar year, Moore
shall be entitled to receive a bonus equal to a specified
percentage of base salary upon the attainment of certain pre-
established goals. Such goals and percentage of salary shall be
determined by the Compensation Committee prior to the
commencement of each plan year. The bonus amount each year shall
be paid in cash, stock, options or such other form as the
Compensation Committee provides, paid at the time period provided
under such plan, at the same time and in the same form as paid
generally to other eligible employees, except to the extent that
this Agreement provides otherwise.
D. Deferred Compensation.
(i) Moore will be entitled to deferred
compensation under an unfunded and non-tax qualified arrangement
("Deferred Compensation") as described in this Paragraph 5.D.,
which shall supercede and control over all prior deferred
compensation arrangements. The amounts credited as Deferred
Compensation will be recorded as a bookkeeping entry representing
a general unsecured obligation of the Company and Moore shall not
have a claim to any specific assets of the Company in
satisfaction of the amounts, if any, payable as Deferred
Compensation. As of the Effective Date, the balance in the
Deferred Compensation account recorded for Moore shall equal
$__________, which is the amount of the Company's Deferred
Compensation "contributions" under the Severance Agreement
between the Company and Moore, as such was amended from time to
time, through the Effective Date. After the Effective Date, the
Company will credit Deferred Compensation at the rate of one
hundred percent (100%) of Moore's annual base salary. Deferred
Compensation will be based on Moore's annual base salary in
effect on January 1 in each year, and will be credited as of
January 1 in each year. The Company may provide the Deferred
Compensation through a benefit plan so long as (1) the amount
credited by the Company on Moore's behalf equals the amount set
forth herein, and (2) the vesting schedule, credit for Years of
Service, and terms of distribution are all at least as favorable
to Moore as set forth herein. No interest or rate of return or
other appreciation or depreciation of value shall accrue or be
payable on amounts credited to Moore as Deferred Compensation
pursuant to this Paragraph 5.D. unless the Company elects
otherwise.
(ii) Vesting of Deferred Compensation will be
based upon "Years of Service," with Moore to be credited with one
Year of Service for completion of each twelve (12) consecutive
month period of employment with the Company beginning January 1,
1997 and ending on the Deferred Compensation Ending Date (as
defined below). (That is, Moore will continue to be credited
with Years of Service during any applicable Severance Period, as
further provided in Paragraph 10.E.(iv) hereof.) Moore will
become vested in the Deferred Compensation based on the following
schedule:
PERCENTAGE
YEARS OF SERVICE VESTED
LESS THAN 4 0%
AT LEAST 4 BUT LESS THAN 5 25%
AT LEAST 5 BUT LESS THAN 6 35%
AT LEAST 6 BUT LESS THAN 7 50%
AT LEAST 7 BUT LESS THAN 8 65%
AT LEAST 8 BUT LESS THAN 9 80%
AT LEAST 9 100%
In the event of a Change in Control (as defined and determined
under Paragraph 8.C.(ii) of this Agreement) of the Company, Moore
shall become immediately 100% vested in his Deferred Compensation
amount notwithstanding the above vesting schedule.
(iii) The "Deferred Compensation Ending Date"
shall mean the date of Termination Date (as defined below) if
Moore's employment with the Company is terminated at any time
under circumstances that do not entitle him to Severance
Compensation pursuant to Paragraph 10 of this Agreement, or shall
mean the last day of the Severance Period (as defined in
Paragraph 10) if Moore is entitled to Severance Compensation.
During a Severance Period, Deferred Compensation shall continue
to accrue and vest pursuant to the terms of Paragraph 10.E.(iv)
hereof. Upon the Deferred Compensation Ending Date, the Company
shall pay to Moore whatever Deferred Compensation amount is equal
to the applicable vested percentage of the total amount then
credited to his account pursuant to this Paragraph 5.D. The
Company shall make this payment in cash within thirty (30) days
following the Deferred Compensation Ending Date, provided that
the Company shall have a right of set-off against, and may reduce
the amount payable as Deferred Compensation by, any amount owed
or payable by Moore to the Company.
E. Split Dollar Life Insurance. The Company
shall advance amounts to fund payment of the premiums under a
split dollar life insurance arrangement covering Moore as
provided in this Paragraph 5.E. As of the date hereof, the split
dollar life insurance arrangement is provided under a policy or
policies with Phoenix Home Life Mutual (such policies and
agreements related thereto, the "Split Dollar Agreement"). The
Company shall continue to abide by the terms of the Split Dollar
Agreement with Moore in force on the date of this Agreement, but,
subject to the foregoing, the Company may implement a substitute
Split Dollar Agreement so long as the amount of premiums funded
by the Company on Moore's behalf equals the amount set forth
herein.
(i) Moore shall be the owner of the policy under
the Split Dollar Agreement and will have the right to designate
his beneficiary with respect to proceeds of the policy payable
upon his death; provided, however, that notwithstanding the
foregoing, the Company shall have a collateral assignment of the
policy as security for the repayment of the amounts paid by the
Company toward the premiums for the policy.
(ii) The Company shall pay the annual premium due
on the policy in an amount specified in this Agreement, as
amended from time to time. From and after the Effective Date,the
amount of the annual premium the Company pays shall equal one
hundred percent (100%) of Moore's annual base salary in effect on
January 1 in each year the Company is obligated to fund the
premium as described herein. Provided that Moore remains employed
with the Company as of January 1 in a given year, the Company
shall, except as provided in Paragraph 5.E.(iii) below, for such
year pay, on or before the due date(s) under the terms of the
policy, the entire amount of the annual premium due on the policy
acquired pursuant to this Paragraph 5.E. During any
Severance Period, the Company's obligation to pay the annual
premium due on the split dollar insurance policy shall continue
pursuant to the terms of Paragraph 10.E.(v) hereof.
(iii) The "Split Dollar Release Date" shall
mean (a) the Termination Date (as defined below), if Moore's
employment with the Company is terminated at any time under
circumstances that do not entitle him to Severance Compensation
pursuant to Paragraph 10 of this Agreement, or (b) the last day
of the Severance Period (as defined in Paragraph 10), if Moore is
entitled to Severance Compensation. The Company shall fund
payment of the premiums as provided in the Paragraph 5.E. in each
year until the Split Dollar Release Date. Upon the Split Dollar
Release Date, the following shall occur:
(a) Moore shall pay to the Company an amount
equal to the total of all premiums paid by the Company on the
split dollar policy(ies) acquired pursuant to his employment with
the Company to the date hereof or subsequently pursuant to this
Paragraph 5.E., without interest thereon. The Company may, at
its option, collect such amount from any amounts it or any of its
affiliates owes to Moore. Upon receipt of such payment the
Company shall release its interest in the policy, or a portion
thereof, on Moore's life acquired pursuant to the terms of the
Split Dollar Agreement, or any or all of the paid up additions
standing to the credit of such policy, if any, such that the
released interest equals the total of all premiums paid by the
Company on the split dollar policy(ies) acquired pursuant to this
Paragraph 5.E. The Company agrees that the amount of any such
release of interest by the Company shall reduce the amount of
"Liabilities" (as such term is defined in the Agreement of
Assignment of Life Insurance Death Benefit As Collateral entered
into between Moore and the Company in connection with the Split
Dollar Agreement) owed to the Company in connection with the
Split Dollar Agreement and related Collateral Assignment
Agreement. Accordingly, the Company also agrees to reduce to
such extent its interest as acquired by collateral assignment of
the policy pursuant to the Split Dollar Agreement and related
Collateral Assignment Agreement.
(b) The Split Dollar Agreement shall
continue in full force and effect and survive separate and apart
from this Agreement; provided, however, that the Company shall
have no further obligation to pay any premium on the policy under
the Split Dollar Agreement which has a due date after the Split
Dollar Release Date and such obligation shall be transferred to
Moore.
F. Discretionary Compensation. The Company may
pay Moore discretionary compensation, bonuses and benefits in
addition to those provided for herein in such amounts and at such
times as the Compensation Committee shall determine.
G. Compensation Upon a Change in Control. Upon
a Change in Control, whether or not Moore's employment has
terminated, Moore shall receive all of the following
compensation, paid at the time of the Change in Control:
(i) Salary. A payment in the amount of 300%
of Moore's annual base salary in effect at the time of the
Change in Control.
(ii) Bonus. For all bonus plans in which
Moore is participating as of a Change in Control, the Company
shall pay to Moore a lump sum bonus payout. This payout shall
consist of a payment in the amount calculated by the formula [(x
+ y) * z] where (x) is Moore's base salary earned in the year from
January 1 to the date of the Change in Control, (y) is the amount
which is three times Moore's annual base salary in effect at the
time of the Change in Control, and (z) is the percentage which
under each plan is the maximum percentage of base salary that Moore
was eligible to earn during the year in which the Change in
Control occurred assuming all targets were met in full, whether
or not said targets actually were met. The payments provided for
under this Paragraph 5.G.(ii) will be paid in cash or in such
other form as bonus amounts generally are paid to eligible
employees, or in a combination thereof, as determined by the
Compensation Committee, within thirty days following the Change
in Control and shall be considered to be full compensation for
all amounts due to Moore for bonus plans in which he was
participating as of the Change in Control, and he shall not be
entitled to any further payments under any of said plans during
the year of participation. Notwithstanding the above, any bonus
due to Moore for years (or any other applicable bonus period)
completed prior to the date in which the Change of Control occurs
but not yet paid shall be paid in addition to the bonus described
herein.
(iii) Disability Insurance. The Company
will prepay, to the time of Moore's reaching age 65, the premiums
due on any disability insurance policy as was provided to Moore
as of the time of Change in Control. In the event that the
Company discontinued or reduced the amount of coverage of any
disability insurance within one year preceding a Change in
Control, the Company shall at the time of the Change in Control
re-establish disability insurance to the amount previously
provided and with equivalent coverage, and shall prepay future
premiums as provided herein.
(iv) Other Benefits Upon a Change in Control.
Moore shall receive all of the other benefits separately provided
herein or in other agreements as occurring upon a Change in
Control. These include vesting of unvested stock options and
restricted stock. In the event a Change in Control occurs, Moore
shall be entitled to the insurance benefits provided upon Change
in Control per Paragraph 10.E.(v) and the travel benefits, per
Paragraph 10.E.(viii), as provided upon a Change in Control.
These benefits will apply at the time of termination of Moore's
employment, even if Moore's employment is subsequently terminated
in a fashion that does not give rise to Severance Compensation.
(v) Certain Adjustments. If, as a result
of payments provided for under or pursuant to this Agreement
together with all other payments in the nature of compensation
provided to or for the benefit of Moore under any other agreement
in connection with a Change in Control, any state, local or
federal taxing authority imposes any taxes on Moore that would
not be imposed on such payments but for the occurrence of a
Change in Control, including any excise tax under Section 4999 of
the Internal Revenue Code and any successor or comparable
provision, then, in addition to any other benefits provided under
or pursuant to this Agreement or otherwise, the Company
(including any successor to the Company) shall pay to Moore at
the time any such payments are made under or pursuant to this or
the other agreements, an amount equal to the amount of any such
taxes imposed or to be imposed on Moore (the amount of any such
payment, the "Parachute Tax Reimbursement"). In addition, the
Company (including any successor to the Company) shall "gross up"
such Parachute Tax Reimbursement by paying to Moore at the same
time an additional amount equal to the aggregate amount of any
additional taxes (whether income taxes, excise taxes, special
taxes, employment taxes or otherwise) that are or will be payable
by Moore as a result of the Parachute Tax Reimbursement being
paid or payable to Moore and/or as a result of the additional
amounts paid or payable to Moore pursuant to this sentence, such
that after payment of such additional taxes Moore shall have been
paid on a net after-tax basis an amount equal to the Parachute
Tax Reimbursement. The amount of any Parachute Tax Reimbursement
and of any such gross-up amounts shall be determined by the
Company's independent auditing firm, whose determination, absent
manifest error, shall be treated as conclusive and binding absent
a binding determination by a governmental taxing authority that a
greater amount of taxes are payable by Moore.
H. Employment or Termination Following a Change
in Control. Provided that he remains employed and the parties
have not otherwise agreed to amend this Agreement, following a
Change in Control Moore's employment shall continue on the terms
set forth in this Agreement and Moore shall remain subject to
this Agreement, and be entitled to receive the compensation,
payments and benefits provided for in this Agreement. In the
event that Moore's employment is terminated upon or within one
year following the Change in Control, such that Moore would be
entitled to Severance Compensation, any amounts due at the time
of termination as Severance Compensation under Paragraphs
10.E.(i) and 10.E.(ii) herein shall be reduced by any amounts
paid under Paragraph 5.G.(i) and 5.G.(ii) at the time of Change
in Control (under no circumstances would Moore be required to
repay the amounts paid to Moore under Paragraph 5.G(i) and
5.G.(ii)), but Moore will be entitled to all other Severance
Compensation as provided in Paragraph 10.E. herein. In the event
that Moore's employment is terminated more than one year
following the Change in Control, Moore will be entitled to all
payments and benefits provided for herein with respect to such
termination of employment.
6. Benefits.
A. The Company shall pay for or provide Moore
such vacation time and benefits, including but not limited to,
coverage under Company's major medical, accident, health, dental,
disability and life insurance plans, as are made available to
other executive employees of Company generally (and, to the
extent provided by such policies, to Moore's dependents).
B. The Company agrees to promptly reimburse
Moore for any otherwise unreimbursed health or medical insurance
premiums and/or uncovered medical expenses up to $10,000 per
calendar year under a written medical reimbursement plan
maintained for Moore and other key executive employees. If such
payments are taxable to Moore, the Company shall pay Moore a
gross-up equal to the estimated income, FICA and Medicare taxes
due with respect to such reimbursement, with federal and state
income taxes being estimated at the highest marginal rates.
C. Moore shall be eligible to participate in any
profit sharing plan, employee stock ownership plan or other
qualified retirement plan adopted by Company to the same extent
as other executive employees of Company. Moore shall also be
eligible to participate in any stock option, restricted stock,
stock appreciation rights or stock purchase plans or programs or
nonqualified deferred compensation arrangements of Company, which
participation shall be at levels as may be determined appropriate
by the Compensation Committee.
D. The Company agrees to reimburse Moore for the
cost of investment and tax planning services up to $5,000
incurred during each calendar year. If such payments are taxable
to Moore, the Company shall pay Moore a gross-up equal to the
estimated income, FICA and Medicare taxes due with respect to
such reimbursement, with federal and state income taxes being
estimated at the highest marginal rates.
7. Reimbursement of Expenses. The Company agrees to
promptly reimburse Moore, within fifteen (15) days after
presentation of receipts and other appropriate documentation, for
all reasonable, ordinary and necessary travel costs and other
necessary expenses incurred by Moore in performing his duties
pursuant to this Agreement.
8. Stock Options
A. Mandatory Stock Options. Company agrees to
continue in force a stock option plan or one which is
substantially similar to the existing plan ("Stock Option Plan"),
which has been approved by the shareholders of the Company, and,
on the first business day in each October commencing in October
2002 and (subject to the provisions of Paragraph 10.E.(iii))
continuing so long as Moore is employed by the Company to grant
Moore options under the Stock Option Plan to purchase not less
than 100,000 shares of the common stock of ACAH (such number to
be adjusted to reflect any stock splits or other adjustments
after the Effective Date) at the price per share at the closing
of the trading market on the last business date prior to such
grant. The Company also agrees to approve the issuance of such
additional shares as are necessary to enable Moore to exercise
such options. The Company will not be required to reserve shares
from existing plans to cover future obligations under this
Paragraph, but will use reasonable efforts to obtain shareholder
approval as necessary from time to time to make a sufficient
number of additional shares available on a timely basis, and will
provide Moore with equivalent alternative compensation should
approval not be obtained. The terms of the grant of such options
shall be consistent with the terms of the Stock Option Agreement
being utilized at the time of the grant for stock options granted
to other senior executive officers at or below Moore's position
with the Company. The Compensation Committee retains full
discretion of whether to grant any additional stock options other
than those required as provided above, and to change the terms of
the Stock Option Agreement for any such additional stock options.
B. Acceleration of Stock Options upon a Change
in Control. If the Company experiences a Corporate Change, the
exercisability and vesting of all Stock Options held by Moore as
of the date of the Corporate Change shall accelerate as of the
date of such Corporate Change. The Compensation Committee of the
Company's Board of Directors shall provide that if a Corporate
Change occurs, then effective as of a date selected by the
Compensation Committee, the Compensation Committee (which for
purposes of the Corporate Changes described in clauses (iii) and
(v) of the definition of Corporate Change below shall be the
Compensation Committee as constituted prior to the occurrence of
such Corporate Change) acting in its sole discretion without the
consent or approval of Moore, will effect one or more of the
following alternatives or combination of alternatives with
respect to all outstanding Stock Options (which alternatives may
be conditional on the occurrence of such of the Corporate Change
specified in clause (i) through (v) of the definition of
Corporate Change below which gives rise to the Corporate Change):
(1) in the case of a Corporate Change specified in clauses (i),
(ii) or (iv) of the definition thereof, provide that exercisable
options (including any options exercisable pursuant to the first
sentence of this Paragraph 8.B.) then outstanding may be
exercised in full for a limited period of time on or before a
specified date (which will permit Moore to participate with the
Common Stock received upon exercise of such option in the event
of a Corporate Change specified in clauses (i), (ii) or (iv) of
the definition of Corporate Change below, as the case may be)
fixed by the Compensation Committee, after which specified date
all unexercised options and all rights of Moore thereunder shall
terminate, (2) provide that exercisable options (including any
options exercisable pursuant to the first sentence of this
Paragraph 8.B.) then outstanding may be exercised so that such
options may be exercised in full for their then remaining term,
or (3) require the mandatory surrender to the Company of
outstanding options held by Moore (including any options
exercisable pursuant to the first sentence of this Paragraph
8.B.) as of a date, before or not later than sixty days after
such Corporate Change, specified by the Compensation Committee,
and in such event the Compensation Committee shall thereupon
cancel such options and the Company shall pay to Moore an amount
of cash equal to the excess of the fair market value of the
aggregate shares subject to such option over the aggregate option
price of such shares; provided, however, the Compensation
Committee shall not select an alternative (unless consented to by
Moore) that, if Moore exercised his accelerated options pursuant
to alternative 1 or 2 and participated in the transaction
specified in clause (i), (ii) or (iv) of the definition of
Corporate Change below or received cash pursuant to
alternative 3, would result in Moore's owing any money by virtue
of operation of Section 16(b) of the Exchange Act. If all such
alternatives have such a result, the Compensation Committee shall
take such action, which is hereby authorized, to put Moore in as
close to the same position as Moore would have been in had
alternative 1, 2 or 3 been selected but without resulting in any
payment by Moore pursuant to Section 16(b) of the Exchange Act.
Notwithstanding the foregoing, with the consent of Moore, the
Compensation Committee may in lieu of the foregoing make such
provision with respect of any Corporate Change as it deems
appropriate.
C. Definitions. For purposes of this Agreement:
(i) "Stock Options" shall mean any grant to
Moore by the Company, pursuant to a Stock Option Plan, of the
right and option to purchase from the Company a specified number
of shares of Atlantic Coast Airlines Holdings, Inc. common stock
under certain terms and conditions.
(ii) "Change in Control" and "Corporate
Change" shall each mean (i) any merger or consolidation in which
the Company shall not be the surviving entity (or survives only
as a subsidiary of another entity, unless the stockholders of
Company immediately before such merger or consolidation own,
directly or indirectly immediately following such merger or
consolidation, substantially all of the combined voting power of
the surviving entity in substantially the same proportion as
their ownership immediately before such merger or consolidation,
(ii) the sale of all or substantially all of the Company's assets
to any other person or entity (other than a wholly-owned
subsidiary), (iii) the acquisition of beneficial ownership or
control of (including, without limitation, power to vote) more
than 50% of the outstanding shares of Common Stock by any person
or entity (including a "group" as defined by or under Section
13(d)(3) of the Exchange Act), (iv) the dissolution or
liquidation of the Company, (v) a contested election of
directors, as a result of which or in connection with which the
persons who were directors of the Company before such election or
their nominees cease to constitute a majority of the Board, or
(vi) any other event specified by the Compensation Committee.
D. Amendment to Existing Option Agreements. The
provisions of Paragraph 8.B. and 8.C herein shall apply to all
Stock Options or restricted stock previously granted to Moore,
and this Agreement shall be deemed to be a restatement of the
previous amendment to all Stock Option or Restricted Stock
Agreements presently in existence between the Company and Moore,
and will supersede any language to the contrary contained in said
agreements. These terms will also apply to mandatory Stock
Options granted as provided in subparagraph A above. The
Compensation Committee retains full discretion of whether to
grant any additional Stock Options in the future, and if so
whether the terms provided herein will apply to said Stock
Options.
E. The Company has granted to Moore options,
under the Stock Option Plan and pursuant to a Company Stock
Option Agreement, to purchase 100,000 shares (prior to adjustment
for subsequent stock splits) of the common stock of ACAH
effective as of July 21, 1999 at the price per share at the
closing of the trading market on July 20, 1999. Moore
acknowledges that said grant is in lieu of grants that that may
otherwise have been due to him prior to October 1, 2000.
9. Deductions. Deductions shall be made from any
component of Moore's compensation provided pursuant to this
Agreement or otherwise for social security, Medicare, federal,
state and local withholding taxes, and any other such taxes as
may from time to time be required by any governmental authority.
10. Termination. Moore's employment with the Company
shall be terminated only in accordance with the following
provisions:
A. Disability.
(i) In the event Moore shall become mentally
or physically disabled so as to have been unable to perform his
duties hereunder for six (6) consecutive months, subject to
Moore's right to return to work as provided below, Company shall
have the right to terminate Moore's employment with Company upon
the expiration of such six month period; provided, however, that
upon any such termination Company shall be obligated to provide
Moore with Severance Compensation as provided in Paragraph 10.E.
herein. Such six-month period shall be deemed to have commenced
on the date when Moore is first unable to perform his duties on a
substantially full-time basis because of mental or physical
disability and shall end on the date on which Moore shall return
to the substantial full-time performance of his duties. If at
the expiration of such six month period, the Company shall desire
to terminate Moore on the basis of disability, it shall give
written notice to him. Moore's employment shall thereafter be
terminated if he does not return to substantial full-time
performance of his duties within ten (10) calendar days after
such notice is given.
(ii) Nothing contained herein shall be
construed to affect Moore's rights under any disability insurance
or similar policy, whether maintained by the Company, Moore or
another party. The Company may utilize a disability policy to
fund, in whole or in part, the compensation that would be due to
Moore during the term of or in the event of a disability, in
which case the proceeds of the policy would not be in addition to
any compensation otherwise payable to Moore.
(iii) For purposes of this Agreement,
Moore shall be deemed to be disabled when he shall have been
absent from his duties because of sickness, illness, injury or
other physical or mental infirmity on a substantially full-time
basis. In the event of a dispute as to whether Moore is
disabled, the issue of the determination of disability shall be
submitted to a Board of Arbiters for a binding decision under the
procedures set forth in Paragraph 10.A.(v) below.
(iv) At the end of any disability (other
than a disability that results in the termination of Moore's
employment with the Company), Moore shall return to work and this
Agreement shall continue as though such disability had not
occurred.
(v) If there is a dispute as to whether
Moore is subject to any disability, the issue shall be submitted
to a Board of Arbiters (whose decision shall be binding on the
Company and Moore) consisting of three persons: one physician who
specializes in the physical or mental disability in dispute
(hereinafter referred to as a "Specialist") shall be appointed on
behalf of Company by the Chairman of the Board, or by the
Compensation Committee; a second Specialist shall be appointed by
Moore and a third Specialist shall be appointed by the two
Specialists so appointed. The decision of a majority of such
Specialists shall be binding upon the parties hereto. If a
majority of the Specialists determines that Moore is not subject
to any disability for purposes of this Agreement, Moore shall
return to work under the provisions hereof. Such Specialists may
physically examine Moore, who hereby consents to such examination
and to make available any pertinent medical records. The cost of
such Specialists shall be paid by Company.
(vi) If it is determined that Moore can
return to work hereunder on a part-time basis, the parties agree
to use good faith efforts to negotiate the terms of Moore's
return to work.
(vii) During any period in which Moore is
disabled but his employment shall not have been terminated, Moore
shall continue to receive his base salary and any applicable
bonus, and shall continue to receive all benefits as an employee
and as provided herein generally. Any options previously granted
shall continue to vest, but no new options shall be issued to
Moore. Any mandatory option grants as provided herein shall be
deferred until such time as the disability period ends.
(viii) During any period in which Moore is
disabled but his employment shall not have been terminated, Moore
shall continue to be credited with Years of Service for purposes
of vesting of Deferred Compensation as set forth in Paragraph
5.D.
B. Death.
(i) Moore's employment with Company shall
terminate immediately upon Moore's death; provided, however, that
Company shall be obligated to provide the Severance Compensation
as specified in Paragraph 10.E. herein to Moore's estate, heirs
or beneficiaries.
(ii) Nothing contained herein shall be
construed to affect Moore's rights under any life insurance or
similar policy, whether maintained by Company, Moore or another
party. The Company may utilize a life insurance policy to fund,
in whole or in part, the Severance Compensation that would be
payable in the event of Moore's death, in which case the proceeds
of any such policy other than the Split Dollar Agreement would
not be in addition to any Severance Compensation otherwise
payable under this Paragraph 10.B.
C. Termination by Moore.
(i) Other than Following a Change in
Control. Moore may terminate his employment by delivering to
Company sixty (60) days' written notice, and such termination
shall be effective on the sixtieth (60th) day following the date
of receipt of such notice (the "Termination Date"). In such
event, Moore (i) shall continue to render his services up to the
Termination Date if so requested by Company and (ii) shall be
paid his regular base salary and shall receive all benefits up to
the Termination Date. Moore will be entitled to payment of any
bonus due but not yet paid for prior bonus periods (paid at the
same time it would have been paid had Moore's employment not been
terminated), but will not be entitled to Severance Compensation,
to any bonus for the current bonus period, or to any other
compensation, bonus or fringe benefits accrued after the
Termination Date.
(ii) Following a Change in Control.
Notwithstanding the above, in the event of any termination by
Moore of his employment with the Company which is effected within
twelve (12) months following a Change in Control as defined and
determined under Paragraph 8.C. of this Agreement, Company shall
be obligated to provide Moore with Severance Compensation as
provided in Paragraph 10.E. herein; provided that payments made
as separately provided in Paragraph 5.H. of this Agreement shall
be deducted from Severance Compensation due in this event. The
twelve month period will be deemed to mean any notice given
within twelve months following a Change in Control where an
actual termination occurs within sixty days following said
notice.
D. Termination by Company.
(i) Without Cause. Company may, without
cause, terminate Moore's employment under this Agreement at any
time by giving Moore fifteen (15) days' written notice thereof,
and such termination shall be effective on the fifteenth day
following the date such notice is given (said 15th day, the
"Termination Date"). In the event Moore's employment with
Company is terminated without cause, Company shall be obligated
to provide Moore with Severance Compensation as provided in
Paragraph 10.E. herein. At the option of Company, Moore's
employment shall be immediately terminated upon the Company
giving such notice, in which case Moore shall continue to receive
his full base salary and related fringe benefits through the
Termination Date. Notwithstanding any provision of this
Agreement to the contrary, any termination of Moore's employment
by the Company, for any reason or no reason, effected as a result
of, in connection with or within twelve (12) months following a
Change in Control, as defined and determined under Paragraph 8.C.
of this Agreement, shall automatically be deemed to be a
termination without cause provided that any amounts due as
Severance Compensation shall be reduced as provided in Paragraph
5.H. The twelve month period will be deemed to mean any notice
given within twelve months following a Change in Control
regardless of when actual termination occurs following said
notice.
(ii) For Cause. Company may terminate Moore's
employment under this Agreement immediately for "cause". In such
event, the Company shall not be liable to Moore for any
compensation, bonus or benefits after the date of termination of
employment. Cause shall be defined as any of the following: (i)
willful unauthorized misconduct in the material performance of
Moore's duties hereunder, (ii) commission of an act of theft,
fraud, dishonesty or personal misconduct by Moore, which act is
harmful to Company, (iii) breach of any provision of this
Agreement if such breach has not been cured by Moore (or if Moore
has not compensated the Company for such breach by payment of an
amount deemed reasonable by the Company if the breach cannot be
cured) within fifteen (15) days after the Company gives Moore
written notice of such breach. Any termination under this
Paragraph 10.D.(ii) shall take effect immediately upon the
Company giving Moore written notice thereof.
E. Severance Compensation. "Severance
Compensation" is defined as all of the compensation and benefits
described in this Paragraph 10.E. It will be provided to Moore
upon the occurrence of any of the events described elsewhere in
this Agreement as providing for Moore's receipt of Severance
Compensation, but not in any other circumstances except to the
extent that individual components of Severance Compensation may
be separately provided pursuant to the terms of this Agreement.
"Termination Date" is defined as the last day of Moore's
employment with the Company. "Severance Period" is defined as
the period beginning on the day following the Termination Date
and ending on the day which is two years following the
Termination Date. Benefits extending to Moore's spouse shall
refer to Moore's spouse as of the date such benefits are extended
or, after Moore's death, to Moore's spouse as of the date of his
death. The compensation and benefits to be provided as Severance
Compensation are as follows:
(i) Severance Pay. Throughout the Severance
Period, Moore will receive severance pay at the rate of 100% of
his annual base salary in effect at the time of his termination,
to be paid on the Company's regular payroll payment dates at the
same time and in the same fashion as the Company's regular
payroll payments. In the event that a Termination Date occurs on
or before December 31, 1999 such that Moore is entitled to
Severance Compensation as provided herein, severance pay will be
at the rate of 100% of his annual base salary that would have
been in effect beginning January 1, 2000 as provided herein.
(ii) Bonus. For all bonus plans in which
Moore is participating as of the Termination Date, the Company
shall pay to Moore a lump sum bonus payout. This payout shall
consist of a payment in the amount calculated by the formula [(x
+ y) * z] where (x) is Moore's base salary earned in the year from
January 1 to the Termination Date, (y) is the amount which is
three times Moore's annual base salary in effect at the time of
Termination, and (z) is the percentage which under each plan is
the maximum percentage of base salary that Moore was eligible to
earn during the year in which the Termination Date occurred
assuming all targets were met in full, whether or not said
targets actually were met. The payments provided for under this
Paragraph 10.E.(ii) will be paid in cash or in such other form as
bonus amounts generally are paid to eligible employees, or in a
combination thereof, as determined by the Compensation Committee,
within thirty days following the Termination Date and shall be
considered to be full compensation for all amounts due to Moore
for bonus plans in which he was participating as of the
Termination Date, and he shall not be entitled to any further
payments under any of said plans during the Severance Period or
thereafter. Notwithstanding the above, any bonus due to Moore
for years (or any other applicable bonus period) completed prior
to the Termination Date but not yet paid shall be paid in
addition to the bonus described herein. If such bonus for prior
years is in the form of restricted stock, such bonus will be
considered earned to the extent that applicable vesting targets
have been met as of the Termination Date, whether the
confirmation that the targets have been met occurs before or
after the Termination Date. If such targets have been met but
the stock has not yet been distributed, Moore will be entitled to
receive the stock, or, at the option of the Company, the cash
equivalent thereof, no later than the date the stock was due to
be distributed had the termination not occurred. Any such stock
for which targets have not been met will be forfeited.
(iii) Stock Options. All options to
purchase shares of ACAH stock that have been granted to Moore and
that are not exercisable as of the Termination Date shall
terminate as of said date. For all options that are exercisable
as of said date (including options that are accelerated following
a Change in Control pursuant to Paragraph 8 above), the terms of
exercise, payment, and expiration, shall be as provided in each
option agreement. All options that would have been granted to
Moore in the future pursuant to Paragraph 8.A. hereof shall not
be granted if the date on which they would have been granted
occurs after the Termination Date, even though said date may
occur during the Severance Period.
(iv) Deferred Compensation. The Deferred
Compensation program will continue throughout the Severance
Period, including Moore's accumulation of Years of Service for
vesting purposes, and including the Company's continuation of
contributions. At the end of the Severance Period, the Company
shall pay Moore an amount equal to his vested interest under the
Deferred Compensation as provided in Paragraph 5.D.(iii).
Alternatively, the Company may elect to pay such amounts to Moore
as would be payable during the Severance Period by the Company
under the Deferred Compensation program in a single lump sum
payment within fifteen (15) days after the Termination Date.
Notwithstanding the foregoing, the Company shall have a right of
set-off against, and may reduce the amount payable as Deferred
Compensation by, any amount owed or payable by Moore to the
Company.
(v) Insurance Programs. The Split Dollar
Agreement shall continue in full force and effect through the
Severance Period and shall survive separate and apart from this
Agreement, and the Company's obligation to pay all premiums
pursuant to this Agreement shall continue in accordance with the
terms of this Agreement for the Severance Period. At the end of
the Severance Period, Moore shall pay to the Company an amount
equal to the total of all premiums paid by the Company on the
split dollar policy(ies) acquired pursuant to Paragraph 5.E.,
without interest thereon, and upon receipt of such payment the
Company shall release its interest in the policy, or a portion
thereof, on Moore's life acquired pursuant to the terms of the
Split Dollar Agreement, or any or all of the paid up additions
standing to the credit of such policy, if any, such that such
released interest equals the total of all premiums paid by the
Company on the split dollar policy(ies) acquired pursuant to
Paragraph 5.E. Alternatively, if the Company elects to pay the
Deferred Compensation to Moore within fifteen (15) days after the
Termination Date pursuant to Paragraph 10.E.(iv) above, the
Company at the time of such payment may demand payment from Moore
of an amount equal to the total of all premiums paid by the
Company on the split dollar policy(ies) acquired pursuant to
Paragraph 5.E., without interest thereon, and upon receipt of
such payment release its interest in the policy, or portion
thereof, acquired pursuant to the terms of the Split Dollar
Agreement, and any or all of the paid up additions standing to
the credit of such policy, if any, and thereafter the Company
shall be under no obligation to pay any further premiums under
the Split Dollar Agreement. Coverage under the Company's major
medical, accident, health, dental, disability and life insurance
plans as from time to time provided to other executive employees
of the Company (and, to the extent provided by such policies, to
Moore's dependents) shall continue to be paid for by the Company
during the Severance Period or, in the event of Moore's
termination upon or following a Change of Control of the Company
as defined in Paragraph 8.C., for the longer of the Severance
Period or the remainder of Moore's and his spouse's life, and
including children to age 21 as per coverage provided prior to
the Change in Control. Provided, however, if such coverage
cannot be continued during the Severance Period or until Moore's
and his spouse's death, as the case may be, under the terms of
such policies or plans, the Company shall reimburse Moore for the
cost of comparable coverage under individually obtained policies
or for COBRA coverage, or shall make other arrangements to assure
that Moore has comparable coverage.
(vi) Vacation. Vacation shall not continue
to accrue after the Termination Date under any circumstances.
(vii) Executive Medical Reimbursement
Plan and Investment and Tax Planning. Throughout the Severance
Period, the Company will continue to promptly reimburse Moore for
any otherwise unreimbursed health and medical insurance premiums
and/or uncovered medical expenses up to $10,000 per calendar year
under a written medical reimbursement plan maintained for the
Company's key executive employees, and for the $5,000 per year
investment and tax planning service expenses, incurred during
each calendar year, including the tax gross-up, if applicable.
(viii) Travel Benefits. The Atlantic Coast
Airlines Holdings, Inc. and its subsidiaries flight pass
privileges currently granted to Moore will continue for the
Severance Period. Moore and his wife shall be provided with free
travel on the Company's planes or on the planes of any successor
in interest to the Company on a positive space basis, and his
children shall be provided free travel on a space available
basis. Moore shall not be entitled to travel benefits on any
other airline.
(ix) Deductions for Taxes. Subject to
Paragraph 5.G.(v), any compensation due to Moore hereunder will
be subject to deductions for social security, federal and state
withholding taxes, and any other such taxes as may from time to
time be required by governmental authority.
11. Nonsolicitation, Non-Competition, and Confidentiality
A. Nonsolicitation and Non-Competition. For so
long as Moore is an employee of the Company, and continuing
thereafter for twelve months following any termination of Moore's
employment, or with respect to the provisions of (i), below, for
the longer of such twelve month period or for such period as
Moore is receiving Severance Compensation, Moore shall not,
without the prior written consent of the Company, directly or
indirectly, as a sole proprietor, member of a partnership,
stockholder or investor, officer or director of a corporation, or
as an employee, associate, consultant or agent of any person,
partnership, corporation or other business organization or entity
other than the Company: (i) solicit or endeavor to entice away
from the Company or any of its subsidiaries any person or entity
who is, or, during the then most recent 12 month period, was
employed by, or had served as an agent of, the Company or any of
its subsidiaries; or (ii) engage in or contract with others to
engage in any business enterprise, line of work consulting
contract, joint venture or other arrangement which conducts a
business or businesses substantially similar to the business
conducted by Company in any area in which Company or any of its
affiliates or subsidiaries provides or plans to provide air
transportation to the public. Moore acknowledges that the
geographic area covered hereby, and the period and nature of the
agreed restrictions are reasonable and necessary for the
protection of the business of the Company. All provisions of
this Paragraph concerning non-competition are severable; and
while it is the intention of the parties that all of said
provisions shall be enforceable, if any one of the same shall be
held to be unenforceable in whole or in part, the remainder shall
continue to be in full force and effect. The terms of this
Paragraph 11.A will not apply following any termination of
Moore's employment that was effected as a result of, in
connection with or within twelve (12) months following a Change
in Control. The provisions of clause (ii) above of this
Paragraph 11.A will not apply following any termination of
Moore's employment by the Company other than for cause. The
twelve month period will be deemed to mean any notice given
within twelve months following a Change in Control regardless of
when actual termination occurs following said notice.
B. Confidentiality. Moore covenants and agrees
with the Company that he will not at any time, except in
performance of his obligations to the Company hereunder or with
the prior written consent of the Company, directly or indirectly,
disclose any secret or confidential information that he may learn
or has learned by reason of his association with the Company or
any of its subsidiaries and affiliates. The term "confidential
information" includes information not previously disclosed to the
public or to the trade by the Company's management, or otherwise
in the public domain, with respect to the Company's or any of its
affiliates' or subsidiaries', products, facilities, applications
and methods, trade secrets and other intellectual property,
systems, procedures, manuals, confidential reports, price lists,
customer lists, technical information, financial information
(including the revenues, costs or profits associated with the
Company), business plans, prospects or opportunities, but shall
exclude any information which (i) is or becomes available to the
public or is generally known in the industry or industries in
which the Company operates other than as a result of disclosure
by Moore in violation of his agreements under this Paragraph 11.B
or (ii) Moore is required to disclose under any applicable laws,
regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or
other process of law.
C. Exclusive Property. Moore confirms that all
confidential information is and shall remain the exclusive
property of the Company. All business records, papers and
documents kept or made by Moore relating to the business of the
Company shall be and remain the property of the Company, except
for such papers customarily deemed to be the personal copies of
Moore.
D. Injunctive Relief. Without intending to
limit the remedies available to the Company, Moore acknowledges
that a breach of any of the covenants contained in this Paragraph
11 may result in material and irreparable injury to the Company
or its affiliates or subsidiaries for which there is no adequate
remedy at law, that it will not be possible to measure damages
for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to seek a
temporary restraining order and/or a preliminary or permanent
injunction restraining Moore from engaging in activities
prohibited by this Paragraph 11 or such other relief as may be
required specifically to enforce any of the covenants in this
Paragraph 11. If for any reason, it is held that the
restrictions under this Paragraph 11 are not reasonable or that
consideration therefor is inadequate, such restrictions shall be
interpreted or modified to include as much of the duration and
scope identified in this Paragraph 11 as will render such
restrictions valid and enforceable.
12. Assignment This Agreement, as it relates to the
employment of Moore, is a personal contract and the rights and
interests of Moore hereunder may not be sold, transferred,
assigned, pledged or hypothecated. However, this Agreement shall
inure to the benefit of and be binding upon Company and its
successors and assigns including, without limitation, any
corporation or other entity into which Company is merged or which
acquires all or substantially all of the outstanding common stock
or assets of Company. At any time prior to a Change in Control,
Company may provide, without the prior written consent of Moore,
that Moore shall be employed pursuant to this Agreement by any of
its affiliates instead of or in addition to Company, and in such
case all references herein to the "Company" shall be deemed to
include any such entity, provided that such action shall not
relieve Company of its obligation to make or cause an affiliate
to make or provide for any payment to or on behalf of Moore
pursuant to this Agreement.
13. Invalid Provisions. The invalidity of any one or
more of the paragraphs or provisions of this Agreement shall not
affect the reasonable enforceability of the remaining paragraphs
or provisions of this Agreement, all of which are inserted herein
conditionally upon being valid in law; and in the event one or
more of the paragraphs or provisions contained herein shall be
invalid, this instrument shall be construed as if such invalid
paragraphs or provisions had not been inserted or, alternatively,
said paragraphs or provisions shall be reasonably limited to the
extent that the applicable court interpreting the provisions of
this Agreement considers to be reasonable.
14. Specific Performance. The parties hereby agree
that any violation by Moore of the covenants and agreements
contained herein shall cause irreparable damage to the Company,
and the Company may, as a matter of course, enjoin and restrain
said violation by Moore by process issued out of a court of
competent jurisdiction, in addition to any other remedies that
said court may see fit to award.
15. Binding Effect. All the terms of this Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective legal representatives, successors and
assigns.
16. Waiver of Breach or Violation Not Deemed
Continuin. The waiver by the Company of any provision of this
Agreement may be effected only by a written waiver duly executed
on behalf of the Company and except to the extent specifically
provided in such waiver shall not operate as, or be construed to
be, a waiver of any subsequent breach hereof.
17. Entire Agreement; Law Governing This Agreement
supersedes in its entirety the terms of the Severance Agreement
between the parties dated as of December 28, 1999 and any and all
other agreements, either oral or in writing, between the parties
hereto with respect to the subject matter hereof, by and between
the Company and Moore, and contains all the covenants and
agreements among the parties with respect to such subject matter.
Notwithstanding the foregoing, to the extent that the Company's
Deferred Compensation contributions or any other compensation or
benefit provided for hereunder was paid, granted, credited or
funded under and pursuant to an earlier version of this Agreement
with respect to service prior to the Effective Date and at rates
provided for under such earlier version, then such compensation
or benefit need not be again paid, granted or funded,
respectively, pursuant to this Agreement. This Agreement shall
be construed in accordance with the laws of the Commonwealth of
Virginia, without regard to principles of conflicts of law.
Moore hereby acknowledges that he was given the opportunity to be
represented by counsel of his choosing in the drafting and
negotiation of this Agreement and that he reviewed this
Agreement. In interpreting this Agreement, a court shall not
treat either party as the draftsman of the Agreement.
18. Paragraph Headings. The Paragraph headings
contained in this Agreement are for convenience only and shall in
no manner be construed as a part of this Agreement.
19. Release by Moore. In the event of a termination of
employment by Moore that results in the payment of Severance
Compensation to him pursuant to the terms of this Agreement, in
consideration for such Severance Compensation and as a condition
precedent to the payment thereof, Moore hereby agrees to execute
a full and complete release to the Company releasing any and all
claims that he may have against the Company including any claims
relating to his termination of employment.
20. Notices. All notices permitted or required to be
given pursuant to this Agreement shall be in writing and shall be
deemed to have been sufficiently given, subject to the further
provisions of this Paragraph 20, for all purposes when presented
personally to such party (which in the case of notice to the
Company, shall be presented to the person holding the office or
offices identified below) or sent by facsimile transmission, any
national overnight delivery service, or certified or registered
mail, to such party at its address set forth below:
If to Moore, to the most recent address indicated for
Moore's residence in the personnel records of Company, unless
Moore gives written notice that such notices are to be delivered
to another address.
If to ACA or the Company:
Atlantic Coast Airlines Holdings, Inc.
Atlantic Coast Airlines
45200 Business Court
Dulles, VA 20166
Attention: General Counsel or Corporate
Secretary
Fax No. (703) 650-6294
Such notice shall be deemed to be given and received
when delivered if delivered personally, upon electronic or other
confirmation of receipt if delivered by facsimile transmission,
the next business day after the date sent if sent by a national
overnight delivery service, or five (5) business days after the
date mailed if mailed in the continental United States by
certified or registered mail. Any notice of any change in such
address shall also be given in the manner set forth above.
Whenever the giving of notice is required, the giving of such
notice may be waived in writing by the party entitled to receive
such notice.
In Witness Whereof, the Company has hereunto caused this
Agreement to be executed by a duly authorized officer and Moore
has hereunto set his hand as of the day and year first above
written.
WITNESS:
- ----------------- ------------------
Thomas J. Moore
COMPANY:
ATTEST: ATLANTIC COAST AIRLINES
HOLDINGS, INC.
___________________ BY:_______________
Richard J. Kennedy, Kerry B. Skeen,
Secretary Chairman & Chief Executive
Officer
ATTEST: ATLANTIC COAST AIRLINES
___________________ BY:_______________
Richard J. Kennedy, Kerry B. Skeen,
Secretary Chairman & Chief Executive
Officer