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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