RETIREMENT AND GENERAL RELEASE
AGREEMENT
THIS RETIREMENT AND GENERAL RELEASE
AGREEMENT is entered into this 29th day of January, 2006, by and
between Atlas Air Worldwide Holdings, Inc. (“Holdings”)
and Jeffrey Erickson (“Employee”).
WHEREAS, Employee is employed by the Company as President
and Chief Executive Officer of Holdings and of Atlas Air, Inc.
(collectively the “Company”), pursuant to that certain
Amended and Restated Employment Agreement dated April 1, 2005 (the
“Employment Agreement”);
WHEREAS, Employee and the Company are entering into this
Agreement to resolve all issues relating to Employee’s
employment, retirement, and termination of the Employment
Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged, the Company and Employee hereby
agree as follows:
1.
Retirement
: Employee shall retire from his employment with
the Company on a date determined by the Company, which date shall
be no later than six months from the date of this Agreement (the
“Retirement Date”). Employee shall receive reasonable
notice from the Company of the Retirement Date.
2.
Payments and Other
Benefits :
(a) (i) In lieu of any and all benefits Employee
would otherwise be entitled to under the Employment Agreement,
Employee will receive supplemental retirement payments based on
Employee’s base annual salary of $524,400 for a period of
eighteen months (the “Payout Period”), commencing six
months after the Retirement Date; and (ii) As a special inducement
to enter into this Agreement, a lump sum payment of $524,400
payable on his Retirement Date.
(b)
The
Company will provide Employee with continued medical, dental, and
vision coverage (as previously elected by Employee) for a period of
twenty-four (24) months after the Retirement Date, subject to
Employee paying the same portion of the premiums for such coverage
as is paid by actively employed executives of the Company during
the period of his employment with the Company; provided, however,
that any such continued coverage shall cease in the event Employee
obtains comparable coverage in connection with subsequent
employment. The provision of such benefits during the Payout Period
shall not count toward the Employee’s entitlement period for
continuation benefits under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”).
(c)
Employee shall fully vest as of the Retirement
Date in the following:
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i. 58,733
shares of Holdings’ restricted stock granted 8/11/04, which
shares would otherwise not vest until July 27, 2006.
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ii. 42,233
stock options granted 8/11/04, with an exercise price of $16.70 per
share, which options would otherwise not vest until July 27, 2006.
These options may be exercised up to the later of (A) ninety (90)
days after the Retirement Date and (B) December 31,
2006.
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iii. 17,333
options granted 3/22/05 with an exercise price of $27.50, which
options would otherwise not vest until January 23, 2007. These
options may be exercised up to the later of (A) ninety (90) days
after the Retirement Date and (B) December 31, 2006.
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For the
avoidance of doubt, all vested options held by Employee, either
because of paragraphs (i) through (iii) above or otherwise, may be
exercised up to the later of (A) ninety (90) days after the
Retirement Date and (B) December 31, 2006. The Company hereby
confirms that the Employee will be entitled to satisfy his
withholding tax obligations on any restricted stock vesting or
option exercises through share withholding.
(d)
Notwithstanding the provisions of the
2005 Senior Executive Annual Incentive Plan which require continued
employment through the payment date for payment eligibility,
Employee will be entitled to payment under such Plan in accordance
with its other terms regardless of the timing of the Retirement
Date.
(e)
Employee will be entitled to receive
a bonus for 2006 equal to fifty percent (50%) of his base salary.
He shall receive that bonus without regard to whether he remains
employed through the payment date, which shall be the same date
that bonuses for other executives are paid under the 2006 Senior
Executive Annual Incentive Plan, but in any event not later than
March 14, 2007.
(f)
The Company will pay Employee’s
attorneys’ fees, to a maximum of $30,000.00, incurred in
connection with his retirement pursuant to, and negotiation of,
this Agreement, upon presentation of a detailed invoice for such
fees.
(g)
Employee shall be entitled to retain
his Company-provided Blackberry and laptop, subject to the
Company’s right to remove any proprietary information.
Company will not provide or pay for service in connection with any
such retained item.
(h)
Company will reimburse Employee for
the cost of moving his personal belongings to his home in Arizona,
to a maximum of $5,000.00, upon presentation of an
invoice.
(i)
Employee will receive a success fee
upon the completion of any “Transaction” as that term
is defined in any engagement letter between the Company and any
selected investment banker entered into during his remaining tenure
as CEO, in an amount equal to 10% of the fee paid to such
investment banker upon such successful completion. No more than two
transactions will qualify for such payment, and those transactions
shall be as agreed upon between Employee and the Board of
Directors. No payment under this provision will be made unless such
agreed-upon transaction closes within one year of the Retirement
Date.
(j)
Employee will receive all accrued and
unpaid amounts owing him as of the Retirement Date, such as
vacation pay and unpaid salary.
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With the exception of the
foregoing, Employee acknowledges and agrees that he shall not be
entitled to receive or accrue any other compensation or benefits
from the Company of any kind or nature whatsoever during the Payout
Period or otherwise, including, but not limited to, any benefits
under the Company’s Long Term Incentive Plan, Annual
Incentive Plan, vacation, profit sharing, 401(k) contributions,
stock option awards of any kind, bonuses, severance pay, or any
other benefits that may be provided to employees or officers of the
Company as a matter of Company policy or practice. Employee further
agrees that during the Payout Period, he will not be eligible to
make any contributions to the Company’s 401(k) Plan. The
payments and benefits described in this Paragraph 2 include
consideration provided to Employee over and above anything of value
to which he would otherwise be entitled.
3.
Comprehensive Release and
Waiver : In
consideration of the benefits provided to him under Paragraph 3,
and except as expressly set forth in this Retirement and General
Release Agreement, Employee hereby releases, waives, and forever
discharges the Company, its officers, directors, employees,
partners, owners, affiliates, and agents, and its and their
respective officers, directors, employees, partners, owners,
affiliates, agents, successors, assigns, benefit plans, and
programs (the “COMPANY RELEASEES”) from any claim,
demand, action, or cause of action, whether known or unknown, which
arose at any time from the beginning of time to the date on which
Employee executes this Agreement. Accordingly, Employee waives and
releases all rights relating to, arising out of, or in any way
connected with his employment with or retirement from the Company,
including, but not limited to, any claim, demand, cause of action,
or right, including claims for attorneys’ fess based on, but
not limited to:
(a)
The
Age Discrimination in Employment Act of 1967, as amended (codified
beginning at 29 U.S.C. Section 621); the Older Workers Benefit
Protection Act (Pub. Law 101-433, 104 Stat. 978 (1990)); Title VII
of the Civil Rights Act of 1964, as amended; the Americans with
Disabilities Act of 1990; the Civil Rights Acts of 1866, 1871, and
1991; the Family and Medical Leave Act of 1993; the Equal Pay Act
of 1963; the Employee Retirement and Income Security Act of 1974,
as amended (“ERISA”); the New York State Civil Rights
Act, as amended; the New York State Human Rights Law, as amended;
the New York State Labor Law, as amended; the New York State
Workers’ Compensation Law’s Retaliation provisions, as
amended; the New York State Disability Benefits law’s
Retaliation provisions, as amended; the New York City
Administrative Code and Charter, as amended; the New York City
Human Rights Law, as amended; any federal, state, or local law
concerning equal pay; and any other federal, state, or local
employment statute, law, or ordinance; provided, however,
that this Agreement shall not affect Employee’s rights under
the Older Workers Benefit Protection Act to have a judicial
determination of the validity of this release and
waiver;
(b)
Any
and all rights or claims under any express or implied contract or
covenant, covenant of good faith and fair dealing, promissory
estoppel, or other promises;
(c)
Any
and all common law claims such as wrongful discharge, violation of
public policy, defamation, negligence, infliction of emotional
distress, any intentional torts, outrageous conduct, interference
with contract, fraud, misrepresentation, and invasion of privacy;
and
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(d)
Any
and all claims for any of the following: money damages including
actual, compensatory, or punitive damages, equitable relief such as
reinstatement or injunctive relief, front or back pay, wages, sick
pay, stock options, vacation pay, bonuses, stock awards, liquidated
damages, costs, expenses, or any other remedies.
Employee acknowledges that he is
releasing all claims and potential claims pursuant to this
Paragraph 3 to the fullest extent permitted at law. The waiver and
release contained in this Paragraph 3, however, does not include:
(a) any rights or claims arising after the
