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EMPLOYMENT AGREEMENT

Employee Retention Agreement

EMPLOYMENT AGREEMENT | Document Parties: US AIRWAYS GROUP INC | US AIRWAYS, INC You are currently viewing:
This Employee Retention Agreement involves

US AIRWAYS GROUP INC | US AIRWAYS, INC

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Title: EMPLOYMENT AGREEMENT
Governing Law: Delaware     Date: 2/28/2007
Industry: Airline     Sector: Transportation

EMPLOYMENT AGREEMENT, Parties: us airways group inc , us airways  inc
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Exhibit 10.128 EMPLOYMENT AGREEMENT      This Employment Agreement is hereby entered into by and between US AIRWAYS, INC. , a Delaware corporation having its principal place of business at Crystal Park Four, 2345 Crystal Drive, Arlington, Virginia 22227 (the "Company") and ALAN W. CRELLIN (the "Executive"), as of the 27th day of September, 2005. W I T N E S S E T H       WHEREAS , the Executive has the responsibilities and duties of the position of Executive Vice President-Operations for the Company; and       WHEREAS , the Board and the Human Resources Committee of the Board believe it to be in the best interests of the Company to enter into this Agreement to properly document the terms and conditions of the Executive’s employment with the Company including, but not limited to, the duties and obligations of the parties under circumstances in which there is a Change of Control of the Company;       NOW, THEREFORE , in consideration of the mutual promises herein contained, the Company and the Executive hereby agree as follows: ARTICLE I DEFINITIONS      1.1 Accrued Obligations shall mean any amounts of Reduced Base Salary plus any accrued and unused vacation pay that has been earned but not yet paid by the Company, determined as of the Executive’s Date of Termination.      1.2 Agreement shall mean this Employment Agreement between the Company and the Executive.      1.3 Affiliate shall mean any parent, brother-sister or subsidiary corporation of the Company, any joint venture in which the Company owns at least a 50 percent interest, and any partnership, limited liability partnership or limited liability corporation in which the Company or any of its wholly-owned Affiliates owns at least a 50 percent interest.

 

 

 

 

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     1.4 Base Salary shall mean the basic rate of pay and does not include any additional compensation in the form of benefits or perquisites and does not include any reductions to the basic rate of pay.      1.5 Board shall mean the Board of Directors of Group or the Board of Directors of the Company, as applicable.      1.6 Cause shall mean:           (a) willful and continued failure to substantially perform his duties with the Company within fifteen (15) days after a written demand for substantial performance is delivered to the Employee which identifies the manner in which the Company believes that the Employee has not substantially performed his duties;           (b) unlawful or willful misconduct which is economically injurious to, or injurious to the reputation or good will of, the Company or to any entity in control of, controlled by or under common control with the Company (and its successors);           (c) indictment for or conviction of, or a plea of guilty or nolo contendere, to a felony charge;           (d) habitual drug or alcohol abuse that impairs the Employee’s ability to perform the essential duties of his position; or           (e) embezzlement, fraud or any other illegal act against the Company or any illegal act committed in connection with the Executive’s performance of his duties.      1.7 Change of Control shall mean the occurrence of any of the following events on or after the Effective Date of this Agreement:           (a) Acquisition of Substantial Percentage . The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 ("the 1934 Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company’s parent, US Airways Group, Inc. ("Group")(the "Outstanding Group Common Stock") or (ii) the combined voting power of the then outstanding voting securities of Group entitled to vote generally in the election of directors (the "Outstanding Group Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (1) any acquisition directly from Group; (2) any acquisition by Group or any of its subsidiaries; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Group or any of its subsidiaries;

 

 

 

 

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     (4) any acquisition by any corporation with respect to which, following such acquisition, more than 85% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were beneficial owners, respectively, of the Outstanding Group Common Stock and Outstanding Group Voting Securities in substantially the same proportions as their ownership, immediately prior to such acquisition, of the Outstanding Group Common Stock and Outstanding Group Voting Securities, as the case may be; or      (5) any acquisition by an individual, entity or group that, pursuant to Rule 13d-1 promulgated under the 1934 Act, is permitted to, and actually does, report its beneficial ownership of Outstanding Group Common Stock and Outstanding Group Voting Securities on Schedule 13G (or any successor Schedule); provided further, that if any such individual, entity or group subsequently becomes required to or does report its ownership of Outstanding Group Common Stock and Outstanding Group Voting Securities on Schedule 13D (or any successor Schedule) then, for purposes of this Section, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual, entity or group becomes required to or does so file, beneficial ownership of all of the Outstanding Group Common Stock and Outstanding Group Voting Securities beneficially owned by it on such date; or           (b) Change of Majority of Board Members . Individuals who, as of the Effective Date of this Agreement, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Group’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents; or           (c) Reorganization, Merger or Consolidation. There is consummated a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Group Common Stock and Outstanding Group Voting Securities immediately prior to such reorganization, merger or consolidation, beneficially own, directly or indirectly, less than 85% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation (or any parent thereof) in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the

 

 

 

 

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Outstanding Group Common Stock and the Outstanding Group Voting Securities, as the case may be; or           (d) Disposition of Assets . Approval by the shareholders of Group of a complete liquidation or dissolution of Group or the consummation of the sale or other disposition of all or substantially all of the assets of Group, other than to a corporation with respect to which, following such sale or other disposition, more than 85% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Group Common Stock and Outstanding Group Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Group Common Stock and Outstanding Group Voting Securities, as the case may be.      1.8 Change of Control Date shall mean the first date on which a Change of Control occurs.      1.9 Change of Control Period shall mean the period beginning on the Change of Control Date and ending on the day two (2) years thereafter.      1.10 Company shall mean US Airways, Inc., a Delaware corporation, and its Affiliates, including its successors and assigns.      1.11 Date of Termination means final date of the Executive’s employment.      1.12 Disability shall mean a mental or physical impairment or injury of the Executive which is determined to result in his total and permanent inability to perform the essential functions of his position without reasonable accommodation, as determined by the Board of Directors based on professional medical and/or psychological opinions, or the Executive’s eligibility to receive disability benefits under the terms and conditions of the Company’s long-term disability policy, based on an "own occupation" definition under the policy      1.13 Effective Date shall mean the date of the emergence of Group and the Company from the protection of the U.S. Bankruptcy Court, as defined by Paragraph 1.63 of the Joint Plan of Reorganization of US Airways Group, Inc. and its Affiliated Debtors, dated August 9, 2005, as amended and confirmed by that certain Findings of Fact, Conclusions of Law and Order Confirming the Joint Plan of Reorganization, dated September 16, 2005.      1.14 Good Reason shall mean:           (a) the assignment to the Executive of any duties materially inconsistent with the Executive’s position, authority, duties or responsibilities as contemplated by this Agreement, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities; provided, that the Executive has delivered a written notice to the Company which identifies the manner in which the Executive believes that the assignment or other Company action would meet the provisions of this paragraph, and the Company has had at

 

 

 

 

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least fifteen (15) days following delivery of the written notice to correct the assignment or action and has not done so;           (b) the failure by the Company to reelect the Executive to a position with materially similar or greater duties than the position held by the Executive on the Effective Date; provided, that the Executive has delivered a written notice to the Company which identifies the manner in which the Executive believes that the Company action would meet the provisions of this paragraph, and the Company has had at least fifteen (15) days following delivery of the written notice to correct the action and has not done so;           (c) any material failure by the Company to comply with the material provisions of this Agreement; provided that the Executive has delivered a written notice to the Company which identifies the manner in which the Executive believes that the Company has failed to meet the material provisions of this Agreement, and the Company has had at least fifteen (15) days following delivery of the written notice to correct any such failure and has not done so;           (d) after a Change of Control Date, any failure of the Company (i) to pay Reduced Base Salary, (ii) to maintain the Executive’s Annual Bonus and Long-Term Incentive Plan target percentages at the same level as immediately prior to the Change of Control, (iii) to maintain and contribute to the EDCP (as defined in Section 4.6 hereof) pursuant to the plan document and this Agreement, (iv) to provide travel privileges to the Executive and his family as in effect prior to the Change of Control Date or at least equivalent to travel privileges provided to other Key Employees, (v) to provide the Executive with the same amount of vacation or paid time off as he had prior to the Change of Control, and (vi) to provide the Executive and the Executive’s family with any other employee benefit plans, programs, policies and practices at a level comparable to that provided to other active Key Employees of the Company;           (e) the Company’s requiring the Executive to be based at any office or location further than a fifty (50) mile radius from the Washington, D.C. metropolitan area, except for travel reasonably required in the performance of the Executive’s responsibilities;           (f) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or           (g) any failure by the Company to comply with and satisfy the successor provisions of Section 11.3 of this Agreement.      1.15 Group shall mean U.S. Airways Group, Inc., the parent of the Company.      1.16 Key Employee shall mean any Executive Vice President of the Company or, in the event of a Change of Control, any officer of a similar level of responsibility.      1.17 Notice of Termination shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other

 

 

 

 

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than the date of receipt of such notice, specifies the Date of Termination (which date shall be not more than fifteen (15) days after the giving of such notice).      1.18 Proprietary Information shall mean information that meets the definition of "trade secret" under the laws of the State of Delaware, as well as any scientific or technical information, design, process, procedure, formula or improvement that is secret and of value, information that Group and/or the Company takes reasonable efforts to protect from disclosure and from which Group and/or the Company derives actual or potential economic value due to its confidential nature, including, but not limited to, technical or nontechnical data, formulas, compilations, programs, devices, methods, techniques, drawings, processes, financial data, lists of actual or potential customers, price lists, business plans, customer and vendor records, training and operations materials and memoranda, personnel records, financial information relating to the business of Group and the Company, accounts, customers, vendors, employees and affairs of Group and the Company, and any information marked "confidential" by Group and/or the Company.      1.19 Reduced Base Salary shall mean the Executive’s Base Salary as reduced pursuant to Company agreements with unions, Company executive compensation guidelines or agreements between the Executive and the Company.      1.20 Term shall mean the period during which this Agreement is effective. The Term of this Agreement is described in Article III hereof. ARTICLE II DUTIES AND RESPONSIBILITY      2.1 Duties and Authority . The Executive is engaged and agrees to perform services for and on behalf of the Company as its Executive Vice President-Operations and shall report directly to the Chief Executive Officer. The Executive shall have such duties and responsibilities as may be assigned to him by the Company’s bylaws or by the Chief Executive Officer. The Executive agrees to perform such duties diligently and efficiently and in accordance with the reasonable directions of the Chief Executive Officer. The Executive shall conduct himself at all times in a business-like and professional manner as appropriate for his position and shall represent the Company in all respects in compliance with good business and ethical practices. In addition, the Executive shall be subject to and abide by the policies and procedures of the Company applicable to personnel of the Company, as may be adopted from time to time.      2.2 Best Efforts. During his employment with the Company, excluding any periods of vacation and sick leave to which the Executive is entitled, subject to the provisions of Section 2.3 below, the Executive shall devote his full attention, energies and best efforts to rendering services on behalf of the Company (or its Affiliates) and shall not engage in any outside employment without the express written consent of the Board.      2.3 Outside Activities . During his employment, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees,

 

 

 

 

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(B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) invest or trade in stocks, bonds, commodities or other forms of investment, including real property if the Executive does not "participate" (within the meaning of Treas. Reg. §§1.469-5(f) and 1.469-5T(f)) in such investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement. The Executive may also participate in any interest or activity which is approved in writing by the Board. At least once each year during this Agreement, and at any time upon the Board’s request, the Executive shall provide a full disclosure to the Corporate Governance Committee of the Board of his participation in any corporate, civic and charitable activities (including service on corporate or charitable boards of directors or trustees). Prior to pursuing or accepting any board membership, teaching position or any other activity which will require a significant portion of the Executive’s time (other than those in which he is engaged on the Effective Date), the Executive agrees to discuss such activity with the Human Resources Committee of the Board.      2.4 No Violation of Other Agreement . By execution of this Agreement, the Executive hereby warrants and represents to the Company that his acceptance of this employment arrangement and his performance of the duties and responsibilities described hereunder will not cause him to violate the terms and conditions of any obligation or agreement to which he is a party and will not expose the Company to any liability in connection with any such obligation or agreement. ARTICLE III AT WILL EMPLOYMENT      3.1 At Will Employment. Prior to a Change of Control, this Agreement shall not have a specified Term. The employment relationship between the Executive and the Company is one of "at-will employment," which provides that either party to the Agreement may terminate the Agreement at any time for any reason. The parties hereto agree that in the event either desires to terminate the Agreement, the terminating party shall provide the other party written notice of the termination.      3.2 Automatic Term Provisions Upon Change of Control . As of a Change of Control Date, this Agreement automatically shall become effective for a two (2) year Term from that date and shall terminate on the close of business on the date two (2) years following the Change of Control Date, unless earlier terminated by the parties pursuant to the provisions hereof. ARTICLE IV COMPENSATION AND BENEFITS      4.1 Base Salary . The Company agrees that the Executive’s annual Base Salary is $425,000, which does not include any benefits or perquisites or reductions. Notwithstanding the

 

 

 

 

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foregoing, the Company and the Executive have agreed to reductions to the Base Salary, which will result in the Executive receiving an annual Reduced Base Salary of $317,475. Base Salary and Reduced Base Salary shall be reviewed at least annually by the Human Resources Committee of the Board and may be increased from time to time based upon performance.      4.2 Emergence Cash Bonus . Upon the earlier of (a) the date of emergence of Group and the Company from protection of the U.S. Bankruptcy Court, or (b) December 31, 2005, if the Executive remains employed on such earlier date, the Company may, at its discretion, provide the Executive a cash bonus in an amount to be determined by the Human Resources Committee.      4.3 Equity Incentives .           (a) Restricted Stock Award . If the Executive remains employed by the Company at the time of emergence of Group and the Company from protection of the U.S. Bankruptcy Court, the Company may, in its discretion, grant to the Executive shares of Restricted Stock under the terms of the Company’s 2004 Omnibus Stock Incentive Plan (the "Omnibus Plan") or any successor plan, in an amount to be determined by the Human Resources Committee. This grant of Restricted Stock shall be made effective as of the date of emergence and shall vest and become transferable as follows: 50% of the Restricted Stock shall become vested and nonforfeitable as of the date of grant, and 25% of the Restricted Stock shall become vested and nonforfeitable on each of the next two anniversaries of such date of emergence.           (b) Stock Option Grant . If the Executive remains employed by the Company at the time of emergence of Group and the Company from protection of the U.S. Bankruptcy Court, the Company may, in its discretion, grant to the Executive a nonqualified stock option for shares of the Company’s common stock, under the terms of the Company’s 2004 Omnibus Stock Incentive Plan or any successor plan, in an amount to be determined by the Human Resources Committee. This stock option shall be granted effective as of the date of emergence, shall have a per share exercise price equal to the per share fair market value of the common stock on the date of grant, and shall become exercisable as follows: 50% of the nonqualified stock option shall become exercisable as of the date of grant, and 25% of the nonqualified stock option shall become exercisable on each of the next two anniversaries of such date of emergence.           (c) Future Grants and Awards . The Executive shall remain eligible to receive future grants and awards of restricted stock, options or any other equity-based grants or awards as may be made under the terms of the Omnibus Plan or any successor plan, as may be determined from time to time by the Human Resources Committee. Following a Change of Control, the Executive shall receive equity-based grants and awards at a level comparable and with vesting and exercisability comparable to any regular and normal course grants and awards made to other Key Employees of the Company.

 

 

 

 

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     4.4 Annual Bonus . The Executive shall be eligible to participate in the Company’s annual cash bonus program under the Company’s Incentive Compensation Plan, as determined by the Human Resources Committee of the Board or any other annual bonus plan hereafter approved by the Board ("Incentive Plan"). The annual bonus under this Section 4.4 shall hereinafter be referred to as the "Annual Bonus."      4.5 Long-Term Incentive Plan . The Executive shall be eligible to participate in the long-term incentive program under the Company’s Long-Term Incentive Plan, as determined by the Human Resources Committee of the Board or any other long-term incentive plan hereafter approved by the Board ("LTIP").      4.6 Retirement Plans. The Executive shall be eligible to participate in the US Airways Group, Inc. Funded Executive Defined Contribution Plan and the US Airways Group, Inc. Unfunded Executive Defined Contribution Plan (the "EDCPs"). While participating in the EDCPs, the Executive shall not be eligible to receive allocations of any employer contributions under any tax-qualified retirement plan or to participate in any other nonqualified retirement or deferred compensation plan sponsored by the Company or Group. EDCP payments reduced after October 11, 2004 shall be restored in monthly installments over a two-year period beginning on October 12, 2006 (the "Restoration Payments"), as long as the Executive remains employed by the Company. Notwithstanding the foregoing, in the event that the Executive terminates employment at any time before commencement of the Restoration Payments or during the period that Restoration Payments are being made due to (i) death, (ii) Disability, (iii) termination by the Company without Cause, or (iv) termination by the Executive due to Good Reason, then the Executive shall be immediately eligible to receive a lump sum payment equivalent to the present value of the Restoration Payments. If the Executive terminates employment due to termination by the Company for Cause or due to the Executive’s voluntary termination, then no Restoration Payments shall be made to the Executive’s account (and/or directly to the Executive), and if Restoration Payments have already commenced, such payments shall cease as of the Date of Termination.      4.7 Welfare and Fringe Benefit Plans . During his employment with the Company, the Executive shall be eligible to participate in the Company’s welfare and fringe benefit plans pursuant to the Company’s plans and policies as in effect for active Key Employees from time to time. The Company reserves the right to amend or terminate any of its welfare and fringe benefit plans and policies (including but not limited to coverages and premium structures) at any time.      4.8 Business Expenses . During his employment with the Company, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the expense reimbursement policies and procedures of the Company applicable to other active Key Employees.      4.9 Withholding, FICA, FUTA, Etc. Any amount to be paid to the Executive under the provisions of this Agreement which represents taxable income shall be subject to, and reduced by, any applicable federal, state or local taxes imposed by law, included, but not limited to, taxes imposed under Subtitle C of the Code.

 

 

 

 

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ARTICLE V TERMINATION OF EMPLOYMENT      5.1 Termination of Employment. The Executive’s employment and this Agreement shall be terminated as follows:           (a) Death: Immediately upon the date of death of the Executive;           (b) Disability : On the tenth (10th) day following written notice provided by the Board to the Executive that his employment is being terminated due to the Executive’s Disability;           (c)

                           
 
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