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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 11, 2000
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PS Group Holdings, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-7141 33-0692068
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(State or Other (Commission (IRS Employer
Jurisdiction of Incorporation) File Number) Identification No.)
4370 La Jolla Village Drive, Suite 1050, San Diego, California 92122
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (858) 642-2999
--------------------------
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On February 11, 2000, PS Group Holdings, Inc. (the "Company") filed and
began to mail its definitive proxy statement relating to a special meeting of
its stockholders to be held on March 13, 2000, to consider and vote on the
proposed merger with PSG Acquisition, Inc., a newly formed corporation wholly-
owned by Heritage Air Holdings Statutory Trust, which was announced on December
20, 1999 and reported by the Company in a current report on 8-K filed on
December 22, 1999 (the "Merger"). The proxy statement, among other things,
describes certain agreements between the Company's subsidiary, PS Group, Inc.
("PSG") and three of the Company's and PSG's senior executives (the "Executive
Agreements"). This report is being filed to put on record the Executive
Agreements in advance of the time that they would otherwise be filed and, if the
proposed Merger were to close prior to the required filing date of the Company's
next periodic report, would never be required to be filed.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
Exhibit 10.1 Amended and Restated Separation Agreement between PS
Group, Inc. and Charles E. Rickershauser, Jr., restated as of February 4, 2000
and effective as of December 18, 1999.
Exhibit 10.2 Restated Executive Retirement Agreement between PS Group,
Inc. and Charles E. Rickershauser, Jr., effective as of December 18, 1999.
Exhibit 10.3 Employment Agreement between PS Group, Inc. and Lawrence
A. Guske effective as of December 18, 1999.
Exhibit 10.4 Amended and Restated Bonus Agreement between Lawrence A.
Guske and PS Group, Inc. restated as of February 4, 2000 and effective as of
December 18, 1999.
Exhibit 10.5 Amended and Restated Consulting Agreement between PS
Group, Inc. and Johanna Unger dated as of December 18, 1999 and restated as of
February 4, 2000.
Exhibit 10.6 Amended and Restated Separation Agreement between PS
Group, Inc. and Johanna Unger, restated as of February 4, 2000 and effective as
of December 18, 1999.
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Exhibit 10.7 Letter to Heritage Air Holdings Statutory Trust from PS
Group Holdings, Inc. dated February 4, 2000 regarding coverage provided by the
SERP insurance policy.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PS Group Holdings, Inc.
(Registrant)
Date February 11, 2000 By /s/ L.A. Guske
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Lawrence A. Guske
Vice President-Finance and Chief
Financial Officer and Authorized
Officer of the Registrant
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<TABLE>
<CAPTION>
EXHIBIT INDEX
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<S> <C>
Exhibit 10.1 Amended and Restated Separation Agreement between PS Group, Inc.
and Charles E. Rickershauser, Jr., restated as of February 4, 2000
and effective as of December 18, 1999.
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Exhibit 10.2 Restated Executive Retirement Agreement between PS Group, Inc. and
Charles E. Rickershauser, Jr., effective as of December 18, 1999.
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Exhibit 10.3 Employment Agreement between PS Group, Inc. and Lawrence A. Guske
effective as of December 18, 1999.
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Exhibit 10.4 Amended and Restated Bonus Agreement between Lawrence A. Guske and
PS Group, Inc. restated as of February 4, 2000 and effective as of
December 18, 1999.
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Exhibit 10.5 Amended and Restated Consulting Agreement between PS Group, Inc.
and Johanna Unger dated as of December 18, 1999 and restated as of
February 4, 2000.
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Exhibit 10.6 Amended and Restated Separation Agreement between PS Group, Inc.
and Johanna Unger, restated as of February 4, 2000 and effective
as of December 18, 1999.
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Exhibit 10.7 Letter to Heritage Air Holdings Statutory Trust from PS Group
Holdings, Inc. dated February 4, 2000 regarding coverage provided
by the SERP insurance policy.
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</TABLE>
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Exhibit 10.1
AMENDED AND RESTATED
RICKERSHAUSER SEPARATION AGREEMENT
This Amended and Restated Separation Agreement (this "Separation
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Agreement") is made this 4th day of February, 2000, by and between PS Group,
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Inc., a Delaware corporation (the "Company"), and Charles E. Rickershauser, Jr.
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("Employee"), and is effective as of the 18th day of December 1999, with
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reference to the following facts:
A. Employee has served as Chairman of the Board of the Company since 1991
and as Chief Executive Officer of the Company since October 1994. Employee has
also served as Chairman of the Board and Chief Executive Officer of the
Company's parent corporation, PS Group Holdings, Inc., a Delaware corporation
("Holdings"), since 1996;
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B. On December 18, 1999, Holdings entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Heritage Air Holdings Statutory Trust, a
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Connecticut statutory trust ("Parent"), and PSG Acquisition, Inc., a Delaware
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corporation ("Merger Sub"), providing for the merger of Merger Sub with and into
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Holdings (the "Merger"), as a result of which the stockholders of Holdings will
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receive $12 per share for each of their shares and Holdings will become a
wholly-owned subsidiary of Parent;
C. Employee's employment with the Company and each of its affiliates, and
all of his directorships and offices with the Company and each of its
affiliates, will terminate at the effective time of the Merger (the "Effective
---------
Time");
- ----
D. The Board of Directors of Holdings (with the Executive having recused
himself) has determined that Employee's services to Holdings and its
subsidiaries merit a payment to Employee of a bonus, to be paid in accordance
with the following provisions, if the Merger occurs, and the Board of Directors
of the Company (with the Executive having recused himself) has approved this
Separation Agreement; and
E. Concurrently with the execution of the Merger Agreement, the Company and
Employee entered into a Separation Agreement dated December 18, 1999 (the
"Original Agreement") which they now wish to amend and restate in its entirety.
------------------
NOW THEREFORE, the Company and Employee hereby agree as follows:
<PAGE>
1. Termination of Employment and Benefits
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(a) At the Effective Time, the employment of Employee by the Company and
each of its affiliates, and all of Employee's directorships and offices with the
Company and each of its affiliates, shall automatically cease.
(b) At the Effective Time, Employee shall cease to be entitled to any
future compensation or employment benefits from the Company or any of its
affiliates and to any benefits under the general severance policy of Holdings
and its subsidiaries set forth in the resolution of the Board of Directors of
Holdings as adopted on May 30, 1997 (the "Severance Policy"); provided, however,
----------------
that: (i) the foregoing shall not affect Employee's entitlement to benefits to
which he has theretofore become entitled prior to the Effective Time, whether or
not paid or received; and (ii) the foregoing shall have no effect on the
provisions of the Restated Executive Retirement Agreement dated December 18,
1999 between Employee and the Company (the "Retirement Agreement").
--------------------
2. Bonus Payments.
--------------
(a) In recognition of Employee's valuable contribution to the Company,
Holdings and their affiliates, and in light of the provisions of Section 1 of
this Separation Agreement, the Company shall pay Employee the following bonus
payments (each, a "Bonus Payment") if the Merger occurs:
-------------
(i) On the last day of each calendar month beginning with the month
following the month in which the Effective Time occurs and ending on (and
including) June 30, 2001, the Company shall pay Employee the sum of $11,900; and
(ii) On June 30, 2001 the Company shall pay Employee an amount (in
addition to the final monthly payment referred to in (i) above) equal to (x)
$400,000 minus (y) the sum of the payments made under (i) above.
(b) Interest shall accrue from the Effective Time on each Bonus Payment
until the date such Bonus Payment is paid to Employee. Such interest shall
accrue at the short-term 120% AFR (applicable Federal rate) in effect at the
Effective Time, compounded semi-annually, and shall be paid with the applicable
Bonus Payment.
(c) All Bonus Payments and interest thereon shall be subject to any
deductions or withholdings required by law.
(d) In the event of Employee's death prior to the payment of any Bonus
Payment, all subsequent Bonus Payments shall be paid, on their respective due
dates (together with interest as specified in Section 2(b)), to Employee's
executor or
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administrator or to such other person as Employee has theretofore specified in a
signed document delivered to the Company.
(e) Notwithstanding anything to the contrary in Sections 2(a), (b) and (d),
the Company's obligation to make any Bonus Payment (or interest thereon) shall
be conditioned on:
(i) Employee having executed, on or after the date on which the
Effective Time occurs, and not having thereafter revoked within the revocation
period specified therein, a Release substantially in the form of Exhibit 1 to
this Separation Agreement; and
(ii) Employee having complied with his confidentiality obligations
under Section 3 of this Agreement.
(f) Anything in this Separation Agreement to the contrary notwithstanding,
if any amounts to be paid to Employee (or to his executor, administrator or
other payee specified by him) under this Separation Agreement, or any other
plan, agreement or program of the Company or any of its affiliates, would result
in a "parachute payment" (as defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code"), then the aggregate of such ----
"parachute payments" shall be reduced so that the aggregate of the amounts paid
to Employee which would otherwise constitute "parachute payments" will equal
three times Employee's "base amount" (as defined in Section 280G(b)(3) of the
Code) less $1.00. Any determination to be made under the preceding sentence
shall be made by an independent accounting firm with a nationally recognized tax
practice that has not performed services for the Company or any of its
affiliates, which firm shall be selected by the Company and be reasonably
acceptable to Employee, it being agreed that such accounting firm may not be the
Company's or Holdings' independent auditors. The Company agrees to pay the
accounting firm's fees and expenses with respect to any such determination.
Nothing herein shall limit the parties' respective rights in the event that an
applicable government taxing authority or court takes a position which is
inconsistent with any such determination.
(g) Employee acknowledges that he has no unused vacation due to him under
the Company's existing vacation policy as applied to him and he will not be
entitled to any accrued vacation when his employment by the Company terminates
at the Effective Time.
3. Confidentiality
---------------
Employee agrees that he will not use for his own benefit or disclose to any
third party, either during his employment or thereafter, any confidential
information or data concerning the business or activities of the Company, Parent
or any of their respective subsidiaries or affiliates acquired at any time while
employed or rendering services to the
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Company or any of its subsidiaries or affiliates, or any of their respective
predecessors or successors. Employee's obligations under this covenant and any
liability for failure to satisfy these obligations shall survive any termination
of this Separation Agreement.
4. Termination
-----------
This Separation Agreement shall terminate, and be null and void, in the
event that; prior to the Effective Time:
(a) The Merger Agreement is terminated pursuant to its terms; or
(b) Employee's services as an employee of the Company cease for any reason
other than Employee's death or disability.
5. Entire Agreement
----------------
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supercedes, as of the Effective Time,
all other written, oral or implied agreements between the parties including,
without limitation, the Original Agreement and the Severance Policy; provided,
--------
however, that this Agreement shall have no effect with respect to (i) the
- -------
Retirement Agreement or (ii) the Amended and Restated Split-Dollar Life
Insurance Agreement dated as of January 1, 1999 between the Company and Janet
Rickershauser. This Agreement may be modified or amended only by a writing
signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement as of the day and year first written above.
PS GROUP, INC.
By: /s/ L. A. Guske
---------------
Lawrence A. Guske
Vice President-Finance
EMPLOYEE
/s/ Charles E. Rickershauser, Jr.
---------------------------------
Charles E. Rickershauser, Jr
4
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Exhibit 1
Release From All Claims
_________________, 2000
[Name]
[Title]
PS Group, Inc.
[Address]
Dear ______________:
In consideration of the payment to me (or to my executor, administrator
or other payee designated by me in writing, in the event of my death), on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties (as defined below) from any and all claims, actions, causes of
action, suits, costs, controversies, judgements, decrees, verdicts, damages,
liabilities, attorneys' fees, covenants, contracts, and agreements
(collectively, "Claims") that I may have, or in the future may possess, with
------
respect to the Company Parties, including, but not limited to, any Claims
relating to my employment with the Company Parties or the termination thereof,
any Claims arising under Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, each of these
as amended, or any other federal or state or local law, whether such Claim
arises under statute, common law or in equity, and whether or not I or any of
the Company Parties is presently aware of the existence of such Claim, but
excluding the following Claims (the "Excluded Claims"): (i) Claims under the
----------------
Amended and Restated Separation Agreement dated February __, 2000 between the
Company and me; (ii) Claims under the Retirement Agreement; and (iii) Claims for
indemnification in respect of my services as a director and/or officer and/or
employee of any of the Company Parties in accordance with Sections 5.06(a) and
(b) of the Merger Agreement and related claims under the directors' and
officers' liability insurance policy obtained in accordance with Section 5.06(c)
of the Merger Agreement. I also hereby forever release, discharge and waive any
right I may have to recover in any proceeding brought by any federal, state or
local agency against any of the Company Parties to enforce any such laws, but
excluding Excluded Claims. I agree that the Bonus Payments shall be in full
satisfaction of any and all Claims for payment or other benefits
<PAGE>
of any kind that I may have against the Company Parties except for any other
Excluded Claims.
For purposes of this letter, the "Company Parties" means the Company,
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Parent and any and all of their respective predecessor or successor companies,
shareholders, subsidiaries and affiliates wherever located and each of their
present, former and future directors, officers, employees, agents, attorneys,
heirs and assigns. Capitalized terms that are used but not defined herein have
the meanings assigned to them in the Separation Agreement.
In addition to the foregoing, in consideration of the payment, on their
respective due dates, of each Bonus Payment I hereby release and discharge the
Company Parties from any and all Claims that I may have as of the date I sign
this letter arising under the Federal Age Discrimination in Employment Act of
1967, as amended, and the applicable rules and regulations promulgated
thereunder (the "ADEA"). By signing this letter, I hereby acknowledge and
----
confirm the following: (i) I was advised by the Company to consult with an
attorney of my choice prior to signing this letter and to have such attorney
explain to me the terms of this letter, including, without limitation, the terms
relating to my release of claims arising under the ADEA; (ii) I was given a
period of not fewer than 21 days to consider the terms of this letter and to
consult with an attorney of my choosing with respect thereto; and (iii) I am
providing the release and discharge set forth in this paragraph only in exchange
for consideration in addition to anything of value to which I am already
entitled.
To ensure that the foregoing release is fully enforceable in accordance
with its terms, I agree to waive any and all rights of Section 1542 of the
California Civil Code (to the extent applicable) as it exists from time to time
or a successor provision thereto, which provides:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor.
In addition, to ensure that the foregoing release is fully enforceable in
accordance with its terms, subject to the payment, or their respective due
dates, of each Bonus Payment I agree to waive any protection that may exist
under any comparable or similar statute and under any principle of common law of
the United States or any and all States with respect to all Claims (other than
Excluded Claims).
THIS MEANS THAT (EXCEPT AS EXPRESSLY PROVIDED HEREIN) BY SIGNING THIS
LETTER, I WILL HAVE WAIVED ANY RIGHT I MAY HAVE HAD TO BRING A LAWSUIT OR MAKE
ANY CLAIM AGAINST THE COMPANY
2
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PARTIES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY PARTIES UP TO THE DATE OF
THE SIGNING OF THIS LETTER.
In addition I have been advised of my right to revoke this letter during
the seven-day period after signing, provided such revocation is in writing,
signed by me and delivered to the Company. I understand that in the event of any
such revocation, all obligations of the Company with respect to the Bonus
Payments will terminate and be of no further effect as of the date of such
revocation.
_______________________________________
Charles E. Rickershauser, Jr.
ACKNOWLEDGED:
PS GROUP, INC.
By: _____________________________________
Name: Lawrence A. Guske
Title: Vice President
Date: February 4, 2000
3
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Exhibit 10.2
RESTATED EXECUTIVE RETIREMENT AGREEMENT
This Restated Executive Retirement Agreement (this "Restated Agreement") is
------------------
made this 18th day of December 1999, by and between PS Group, Inc., a Delaware
corporation (the "Company"), and Charles E. Rickershauser, Jr. (the
-------
"Executive"), with reference to the following facts:
---------
A. The Executive has served as Chairman of the Board of the Company since
1991, and as Chief Executive Officer of the Company since October, 1994.
B. The Executive is not a participant in the Retirement Plan for Corporate
Officers of PS Group, Inc. and Participating Subsidiaries.
C. The Company and the Executive are parties to an Executive Retirement
Agreement dated March 12, 1997 (the "Original Agreement") that was entered into
------------------
in order to compensate the Executive for his services to the Company by
augmenting his accrued unfunded retirement benefit and to clarify terms and
conditions under which such retirement benefit would be accrued and paid.
D. The Original Agreement was amended and restated effective March 23, 1998
in order to provide for an increase in the amount of the unfunded retirement
benefit to be credited to the Executive's Account (as hereinafter defined) for
calendar year 1998 from $50,000 to $100,000.
E. The Original Agreement was further amended and restated effective March
25, 1999 (as so amended and restated, the "Amended Agreement") in order to
-----------------
provide for an increase in the amount of the unfunded retirement benefit to be
credited to the Executive's Account for calendar year 1999 and subsequent years
from $50,000 to $100,000.
F. This Agreement restates the Amended Agreement to provide that the
benefits payable to Executive on the "Payment Trigger Date" (as hereinafter
defined) shall be made in a lump sum and to make appropriate conforming changes.
This Agreement also clarifies certain provisions of the Amended Agreement to
confirm and reiterate the agreement of the parties, dating from the Original
Agreement, with respect to (i) the continuing accrual of interest on the Account
between the Termination Date (as hereinafter defined) and the Payment Trigger
Date and (ii) the Company's obligation to pay the benefits to the Executive's
designated beneficiary, or to other specified persons in
<PAGE>
the absence of a designated beneficiary, in the event of the Executive's death
before the Payment Trigger Date.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Definitions.
-----------
For purposes of this Agreement, the following terms are defined as follows:
1.1 "Account" means the account maintained pursuant to Section 2 of this
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Agreement.
1.2 "Beneficiary" means the person or persons designated or determined
-----------
pursuant to Section 3.2.
1.3 "Board" means the Board of Directors of the Company, without the
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participation of the Executive.
1.4 "Payment Trigger Date" means the later of June 30, 2001, or the
--------------------
Termination Date.
1.5 "Previously Accrued Amounts" means the unfunded retirement benefit and
--------------------------
interest thereon which accrued on or before December 31, 1996 pursuant to the
previous agreement between the Company and the Executive, and which consists of:
(a) Fifty Thousand Dollars ($50,000.00) per year accrued on December 31
of each calendar year from 1991 through 1996, inclusive;
(b) Interest accrued during each calendar year from 1992 through 1996,
inclusive, at the rate paid on one-year U.S. Treasury Bills as of January 1 of
such calendar year.
1.6 "Termination Date" means the date on which the Executive ceases to
perform services for any reason (including, but not limited to, the Executive's
death, total and permanent disability, or retirement) for the Company either in
the capacity of Chairman of the Board of Directors or in the capacity of Chief
Executive Officer.
2. The Account.
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2.1 The Company shall establish and maintain the Account, which shall be
credited with the following amounts:
(a) As of December 31, 1996, the Previously Accrued Amounts;
(b) As of December 31, 1996, the sum of Fifty Thousand Dollars
($50,000.00);
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(c) As of the last day of each calendar month in each calendar year
beginning with calendar year 1997, the sum of Eight Thousand Three Hundred
Thirty-Three and 33/100 Dollars ($8.333.33), but subject to Section 2.2 if any
calendar month includes the Termination Date; and
(d) Interest during each calendar year beginning with 1997
compounded daily at the rate paid on one-year U.S. Treasury Bills as of January
1 of such calendar year; provided, however, that such interest shall cease to
accrue on the Payment Trigger Date.
2.2 For the calendar month which includes the Termination Date, the full
amount specified in Section 2.1(c) with respect to such month shall be credited
to the Account on the Termination Date rather than on the last day of such
month, and no amounts shall be credited to the Account under Section 2.1(c) with
respect to any calendar month after the calendar month which includes the
Termination Date.
2.3 In accordance with the provisions of Section 7, the Account shall be
for bookkeeping purposes only, and the Company shall not be required to acquire
or maintain any investments corresponding to the Account balance.
3. Payment of Benefits.
-------------------
3.1 Payment of benefits under this Agreement shall be made as soon as
administratively practicable following the Payment Trigger Date in the form of a
lump sum in an amount equal to the balance in the Account as of the Payment
Trigger Date.
3.2 If the Executive dies before the Payment Trigger Date, the payment
provided for in Section 3.1 shall be made to such one or more persons (a
"Beneficiary") as the Executive has designated in writing to the Board prior to
-----------
his death. The Executive may change the designation of his Beneficiaries at any
time by giving written notice of such change to the Board. The Executive may
designate one or more contingent Beneficiaries to receive benefits in the event
of the death of the primary Beneficiaries. If, upon the death of the Executive
prior to the time the Company makes the payment provided for in Section 3.1, no
designation of a Beneficiary is effective, or no designated Beneficiary
survives, such payment shall be made to the following persons in the following
order of priority: (a) the Executive's surviving spouse; (b) the Participant's
surviving children, and any descendants of a deceased child by right of
representation; and (c) the executor or administrator of the estate of the
Executive.
4. Confidential Information; Forfeiture of Benefits.
------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary,
benefits under this Agreement are paid with the understanding that the Executive
does not engage or become involved in any occupation or any activity or
relationship which involves the
3
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use or disclosure to others of information or practices acquired or learned
while employed by the Company or any of its subsidiaries or parent and which any
of them reasonably regards as confidential or their property or trade secret, or
in any other activity detrimental to any of them. If the Company, after a
thorough investigation, finds that the Executive has violated the provisions of
this Section 4, benefits payable hereunder shall be forfeited. Notwithstanding
any other provision of this Agreement to the contrary, no benefits will be
payable under this Agreement if the Executive confesses to, or is convicted of,
an act of fraud, theft or dishonesty amounting to a felony and arising in the
course of or in connection with his employment with the Company or any of its
subsidiaries or parent, and, in such case, all such benefits will be forfeited.
5. Receipt of Releases.
-------------------
Any payment of benefits under this Agreement shall, to the full extent
thereof, be in full satisfaction of all claims against the Company and its
subsidiaries and parent, and the Company may require the recipient thereof, as a
condition precedent to such payment, to execute a receipt and release to such
effect.
6. ERISA; Administration.
---------------------
6.1 This Agreement constitutes a pension benefit plan within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is unfunded and maintained for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees. This Plan constitutes the "summary plan description" required under
ERISA, as well as the governing document of the Plan. The "administrator" of the
Plan, within the meaning of Section 3(16) of ERISA, and the "named fiduciary"
thereof, within the meaning of Section 402 of ERISA, is the Board. Attached
hereto as Exhibit "A" is a statement of the Executive's rights under ERISA.
Attached hereto as Exhibit "B" is a statement of the claims procedure under this
Agreement and ERISA.
6.2 The Board, acting as the "administrator" under ERISA, shall have the
full power, authority, and discretion to construe and interpret the terms and
provisions of this Agreement, and to compute and certify to the amount and form
of benefits payable under this Agreement. Any interpretation or construction of
this Agreement by the Board shall be final and binding on all parties,
including, but not limited to, the Executive and any Beneficiary.
7. Unsecured General Creditor.
--------------------------
The Executive and his Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interests in any specific property
or assets of the Company. No assets of the Company shall be held under any
trust, or held in any way as collateral security for the fulfilling of the
obligations of the Company under this
4
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Agreement. This Agreement shall not cause any of the Company's assets to be
pledged or restricted. The obligations of the Company under the Agreement
pending payment under Section 3 shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the future, and the rights of
the Executive and his Beneficiaries shall be no greater than those of unsecured
general creditors. The Company may, but need not, acquire investments
corresponding to the Account hereunder, and it is not under any obligation to
maintain any investment it may make. Any such investments, if made, shall be in
the name of the Company, and shall be its sole property in which neither the
Executive nor any Beneficiary shall have any interest.
8. Restriction Against Assignment.
------------------------------
The Company shall pay all amounts payable hereunder only to the person
or persons designated by this Agreement and not to or for any other person. No
part of the Account shall be liable for the debts, contracts, or engagements of
the Executive, any Beneficiary, or successors in interest, nor shall the Account
be subject to execution by levy, attachment, or garnishment or by any other
legal or equitable proceeding, nor shall any such person have any right to
alienate, anticipate, transfer, commute, pledge, encumber, or assign any
benefits or payments hereunder in any manner whatsoever. Any purported
alienation, anticipation, transfer, commutation, pledge, encumbrance, or
assignment shall be void and of no effect. If the Executive, any Beneficiary, or
successor in interest is adjudicated bankrupt, and such person's rights to
distribution or payment under this Agreement are subject to involuntary transfer
or assignment in any such proceeding, the Board may in its discretion cancel
such distribution or payment (or any part thereof) to or for the benefit of the
Executive, such Beneficiary or successor in interest.
9. Withholding.
-----------
There shall be deducted from the payment to the Executive or a Beneficiary
made under Section 3 all taxes which are required to be withheld by the Company
from such payment. If any taxes, including employment taxes with respect to the
Account, are required to be withheld prior to the time of payment, the Company
may withhold such amounts from other compensation paid to the Executive.
10. Amendment, Modification, Suspension or Termination.
--------------------------------------------------
The Board may amend, modify, suspend or terminate this Agreement in whole
or in part, except that no amendment, modification, suspension or termination
shall have any retroactive effect to reduce any amounts allocated to the Account
or the Company's payment obligation under Section 3.
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11. Governing Law.
-------------
This Agreement shall be construed, governed and administered in
accordance with the laws of the State of California, to the extent such laws are
not preempted by ERISA.
12. Payments on Behalf of Persons Under Incapacity.
----------------------------------------------
In the event that the amount payable under Section 3 is payable to a person
who, in the sole judgment of the Board, is considered by reason of physical or
mental condition to be unable to give a valid receipt or release therefor, the
Board may direct that such payment be made to any person found by the Board, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Board and the Company.
13. No Employment Rights.
--------------------
This Agreement shall not confer upon the Executive any right to be employed
by or serve as a director of the Company or any of its subsidiaries or parent,
or any other right not expressly provided hereunder.
14. Headings Not Part of Agreement.
------------------------------
Headings and subheadings in this Agreement are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.
15. Counterparts.
------------
This Agreement may be executed in two counterparts, each of which shall
constitute an original document but both of which together shall constitute a
single instrument.
6
<PAGE>
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
The "Company"
PS GROUP, INC.
By: /s/ L. A. Guske
---------------------------------
Lawrence A. Guske
Vice President-Finance
The "Executive"
/s/ Charles E. Rickershauser, Jr.
------------------------------------
Charles E. Rickershauser, Jr.
7
<PAGE>
EXHIBIT A
Information Provided Under ERISA. This Executive Retirement Agreement
--------------------------------
constitutes an unfunded Plan of deferred compensation, maintained on a calendar
year basis. The Company is the Plan sponsor, Plan Administrator, and agent for
service of legal process. The Company bears the costs of all benefits under the
Plan.
The Company's address, telephone number and employer identification number
are as follows:
4370 La Jolla Village Drive, Suite 1050
San Diego, CA 92122
Attn: Ms. Johanna Unger
Telephone No.: (858) 642-2999
Employer Identification No.: 33-0692068
The Plan number assigned to the Plan is 003.
Statement of ERISA Rights. A Participant in this Plan is entitled to
-------------------------
certain rights and protections under a federal law known as "ERISA." ERISA
provides that all Plan Participants shall be entitled to examine, without
charge, at the Plan Administrator's office, all Plan documents and the Plan's
annual report. Copies of these documents and other Plan information may also be
obtained upon written request to the Plan Administrator. A reasonable charge may
be made for copies.
In addition to creating rights for plan participants, ERISA imposes duties
upon the people who are responsible for the operation of this Plan. The people
who operate this Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in your interest. No one, including your employer or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining benefits or exercising your rights under ERISA. If your claim
for benefits is denied in whole or in part, you must receive a written
explanation of the reason for this denial. You have the right to have the Plan
Administrator review and reconsider your claim, as described in Exhibit B to the
letter to which this Exhibit is attached.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
30 days, you may file a claim in Federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $100 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the Plan Administrator. If you have a claim for
benefits which is denied or ignored, in whole or in part, you may file a claim
in Federal or state court. If you are discriminated against
<PAGE>
for asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file a lawsuit in Federal court. The court will decide who
should pay the costs and legal fees of lawsuit. If you are successful, the court
may order the person you have sued to pay these costs and fees. If you lose, the
court may order you to pay these costs and fees, for example, if it finds your
claim is frivolous.
If you have any questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S. Labor
Management Services Administration, Department of Labor.
2
<PAGE>
EXHIBIT B
---------
If you believe you are entitled to a benefit under this Agreement, you may
make a claim for such benefit by filing with the Company a written statement
setting forth the amount and type of payment so claimed. The statement shall
also set forth the facts supporting the claim. The claim may be filed by mailing
or delivering it to the Board of Directors of the Company.
Within sixty (60) calendar days after receipt of such a claim, the Board
shall notify you in writing of its action on such claim and if such claim is not
allowed in full, shall state the following in a manner calculated to be
understood by you:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent provisions of this Agreement on which
the denial is based;
(c) A description of any additional material or information necessary for
you to be entitled to the benefits that have been denied and an explanation of
why such material or information is necessary; and
(d) An explanation of this Agreement's claim review procedure.
If you disagree with the action taken by the Board, you or your duly
authorized representative may apply to the Board for a review of such action.
Such application shall be made within one hundred twenty (120) calendar days
after receipt by you of the notice of the Board's action on your claim. The
application for review shall be filed in the same manner as the claim for
benefits. In connection with such review, you may inspect any documents or
records pertinent to the matter and may submit issues and comments in writing to
the Board. A decision by the Board shall be communicated to you within sixty
(60) calendar days after receipt of the application. The decision on review
shall be in writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by you, and specific references to the
pertinent provisions of this Agreement on which the decision is based.
<PAGE>
Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 18, 1999
(the "Execution Date"), by and between PS GROUP, INC., a Delaware corporation
(the "Company"), and Lawrence A. Guske ("Employee").
WHEREAS, PS Group Holdings, Inc., a Delaware corporation,
Heritage Air Holders Statutory Trust, a Connecticut statutory trust ("Parent"),
and PSG Acquisition, Inc., a Delaware corporation ("Merger Sub"), are
concurrently herewith entering into an Agreement and Plan of Merger, dated as of
December 18, 1999 (the "Merger Agreement"), pursuant to which Merger Sub shall
merge with and into the Company (the "Merger"); and
WHEREAS, in connection with the Merger, the parties hereto desire to
enter into this Agreement, to be effective at the Effective Time (as defined in
the Merger Agreement);
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties agree as follows:
1. Employment. The Company offers Employee employment in the position
----------
of Vice President-Finance and Chief Financial Officer or other position mutually
agreed to on the terms and conditions set forth herein (the "Offer"). The Offer
shall expire on the thirtieth day following the Execution Date (the "Offer
Expiration Date"). Employee may accept the Offer by delivering written notice of
such acceptance to the Company at any time prior to the Offer Acceptance Date
(the "Employment Election"). Employee may reject the Offer at any time prior to
the Offer Acceptance Date by delivering written notice of such rejection to the
Company (the "Non-Employment Election"). If Employee fails to make the
Employment Election prior to the Offer Expiration Date, he shall be deemed to
have made the Non-Employment Election. In the event that the Non-Employment
Election is made, this Agreement shall be null and void.
2. Term. Subject to Section 9, the term of this Agreement (the "Term")
----
shall be one year from the Effective Time; provided, however, that the Term may
be extended from time to time by a written instrument signed by both parties. In
the event that the Merger Agreement is terminated pursuant to its terms or
Employee does not continue his services as an employee of the Company during the
period from the date hereof until the Effective Time, this Agreement shall be
null and void.
3. Duties of Employee. During the Term, Employee shall have the duties
------------------
and authority normally associated with the position of Vice President-Finance
and
<PAGE>
Chief Financial Officer; provided, however, that the Company at its discretion
may from time to time assign additional duties and authority to Employee as are
mutually agreed. In addition, during the Term, Employee shall work with the
designated representatives of Parent and its affiliates to manage the operations
of the Company and its subsidiaries that remain after the Merger, and shall use
his best efforts in consultation with the designated representatives of the
Company to maximize the value of the assets of the Company and its subsidiaries
(either through ongoing management of such assets or sales thereof) and minimize
the liabilities of the Company and its subsidiaries. Employee shall also perform
various duties reasonably requested by the Company that were previously
performed by Johanna Unger (to the extent such duties continue to be necessary
after the Effective Time and are not performed by Ms. Unger pursuant to her
Consulting Agreement with the Company). Employee shall be based in San Diego,
California with limited travel requirements (unless mutually agreed), and his
offices shall be located at the existing offices of the Company until such time
as the current lease is terminated and such offices are relocated within the San
Diego, California area.
4. Exclusive Services. Employee shall devote his energies and
------------------
abilities to the full time performance of his duties under this Agreement, and
shall carry out such duties in a competent and efficient manner. Employee shall
not without the written consent of the Company render services for compensation
to any other employer or person during the Term, nor shall Employee engage in
any other activity which conflicts or interferes with the performance of his
duties hereunder.
5. Compensation. (a) As consideration for his services hereunder,
------------
Employee shall receive an annual salary of $192,500, payable in accordance with
the Company's normal payroll practices.
(b) Any amounts paid to Employee pursuant to this Agreement shall be
subject to any deductions or withholdings required by law.
6. Benefits. (a) Except as provided below and subject to the terms
--------
thereof, Employee shall continue to participate in those employee benefit plans
maintained by the Company (including the Company's existing medical plan
(subject to any modifications imposed by the insurance carrier), but excluding
the 401(k) plan) in which he is participating immediately prior to the date
hereof; provided, however, that this Agreement shall not prohibit the Company
from modifying or replacing any such plan with a plan that provides no less
advantageous benefits in the aggregate than the prior plan.
(b) Benefit accruals with respect to Employee under the Retirement
Plan for Corporate Officers of PSA, Inc. and Participating Subsidiaries, dated
March 12, 1984, shall cease as of the Effective Time.
2
<PAGE>
7. Bonus. In addition to the compensation and benefits described in
-----
Sections 5 and 6 of this Agreement, Employee shall be eligible to receive an
annual discretionary bonus based on Parent's assessment of his performance.
Employee's entitlement to such bonus, or a pro-rated portion thereof for any
partial calendar year, shall be determined in the sole discretion of Parent.
8. Confidentiality. Employee agrees that he will not use for his own
---------------
benefit or disclose to any third party, either during his employment or
thereafter, any confidential information or data concerning the business or
customers of the Company, Parent or any of their respective subsidiaries or
affiliates acquired at any time while employed or rendering services to the
Company or any of its subsidiaries or affiliates, or any of their respective
predecessors or successors. Employee's obligations under this covenant, and any
liability for failure to satisfy these obligations, shall survive any
termination of this Agreement.
9. Termination. In addition to the termination provisions of the
-----------
second sentence of Section 2, this Agreement shall terminate under the following
circumstances:
(a) This Agreement shall automatically terminate upon the death,
Disability or resignation of Employee. For purposes of this Agreement,
"Disability" means a physical or mental disability or infirmity of
Employee, as determined by a physician of recognized standing selected by
the Company, that prevents (or in the opinion of such physician, is
reasonably expected to prevent) the normal performance of Employee's duties
with the Company for any continuous period of 180 days, or for 180 days
during any one twelve-month period.
(b) The Company may terminate this Agreement for Cause (as defined
below). For purposes of this Agreement, "Cause" means (i) commission by
Employee of a significant act of dishonesty, deceit or breach of fiduciary
duty in the performance of his duties hereunder; (ii) the gross neglect or
willful failure of Employee to perform his duties hereunder; (iii) any act
by Employee which reflects materially and adversely upon the Company,
Parent or any of their respective subsidiaries or affiliates; or (iv) any
material breach by Employee of this Agreement.
10. Effect of Termination. If this Agreement is terminated on account
---------------------
of Employee's death, Disability or resignation or by the Company for Cause, the
Company shall cease to have any obligations hereunder; provided, however, that
such termination shall not affect Employee's obligations under Section 8 or the
entitlement of Employee or his heirs to any death, disability or retirement
payments to which they may be entitled as of the date of termination under any
employee benefit plans maintained by the Company.
3
<PAGE>
11. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties concerning the subject matter hereof, and supersedes, as of
the Effective Time, all other written, oral or implied agreements between the
parties, including, without limitation, (i) the Employment Agreement dated as of
January 15, 1988 between the Company and Employee, as amended from time to time,
and (ii) any agreement, arrangement or understanding providing for severance or
"change of control" benefits or payments; provided, however, this Agreement
shall have no effect with respect to (a) the Split Dollar Life Insurance
Agreement executed by Employee on January 1, 1986, as amended by the letter
dated March 23, 1999 and (b) the Bonus Agreement dated as of December 18, 1999
between the Company and Employee. This Agreement may be modified or amended only
by a writing signed by both parties.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Execution Date.
PS GROUP, INC.
By: /s/ Charles E. Rickershauser
------------------------------------
Name: Charles E. Rickershauser, Jr.
Title: Chief Executive Officer
EMPLOYEE
/s/ L. A. Guske
------------------------------------
Lawrence A. Guske
5
<PAGE>
Exhibit 10.4
AMENDED AND RESTATED
GUSKE BONUS AGREEMENT
This Amended and Restated Bonus Agreement (this "Bonus Agreement") is made
---------------
this 4th day of February, 2000, by and between PS Group, Inc., a Delaware
corporation (the "Company"), and Lawrence A. Guske ("Employee"), and is
-------- --------
effective as of the 18th day of December, 1999, with reference to the following
facts:
A. Employee has served as Vice President-Finance and Chief Financial
Officer of the Company since May 29, 1976. Employee has also served as Vice
President-Finance and Chief Financial Officer of the Company's parent
corporation, PS Group Holdings, Inc., a Delaware corporation ("Holdings"), since
--------
1996;
B. On December 18, 1999, Holdings entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Heritage Air Holdings Statutory Trust, a
----------------
Connecticut statutory trust ("Parent"), and PSG Acquisition, Inc., a Delaware
------
corporation ("Merger Sub"), providing for the merger of Merger Sub with and into
----------
Holdings (the "Merger"), as a result of which the stockholders of Holdings will
------
receive $12 per share for each of their shares and Holdings will become a
wholly-owned subsidiary of Parent;
C. The Board of Directors of Holdings has determined that Employee's
services to Holdings and its subsidiaries merit a payment to Employee of a
bonus, if the Merger occurs, in consideration for the Employee relinquishing, as
of the Effective Time, his rights under his Employment Agreement with the
Company dated as of January 15, 1988, as amended (the "Current Employment
------------------
Agreement"). To give effect to such determination, concurrently with the
- ---------
execution of the Merger Agreement, the Company, with the approval of its Board
of Directors, entered into a Bonus Agreement dated December 18, 1999 (the
"Original Agreement") with Employee;
------------------
D. On December 18, 1999, concurrently with the execution of the Merger
Agreement, Employee entered into an employment agreement with the Company (the
"New Employment Agreement") which entitled Employee, within the period specified
- -------------------------
therein, to elect to be employed, effective at the effective time of the Merger
(the "Effective Time"), on the terms set forth in the New Employment Agreement
--------------
(which terms will supercede the terms of the Current Employment Agreement) for a
term ending on the first anniversary of the date on which the Effective Time
occurs (the "First Anniversary"). Within the time specified in the New
-----------------
Employment Agreement, Employee elected to be employed on the terms thereof if
the Effective Time occurs. Notwithstanding such election, Employee's employment
with each of the Company's
<PAGE>
affiliates, all of his directorships with each of the Company's affiliates, and
all of his offices with each of the Company's affiliates, will terminate at the
Effective Time;
E. In light of Employee's decision to elect employment under the New
Employment Agreement, a portion of the bonus referred to in Recital C will be
paid to Employee at the Effective Time and the balance will be deferred (without
interest) until, and paid on, the First Anniversary, in each case subject to the
terms and conditions of this Bonus Agreement; and
F. The Company and Employee now wish to amend and restate the Original
Agreement in its entirety.
NOW, THEREFORE, the Company and Employee hereby agree as follows:
1. Bonus Payments.
--------------
(a) In recognition of Employee's valuable contribution to the Company,
Holdings and their affiliates, the Company shall pay Employee the
following bonus payments (each, a "Bonus Payment") if the Merger
-------------
occurs:
(i) Immediately following the Effective Time, the Company shall pay
Employee the sum of $385,000; and
(ii) Subject to Section 1(d), on the First Anniversary the Company
shall pay Employee the sum of $165,000 (the "Deferred Amount").
---------------
(b) No interest shall be payable on any Bonus Payment in respect of the
period prior to its due date hereunder.
(c) All Bonus Payments shall be subject to any deductions or withholdings
required by law.
(d) If Employee dies or suffers a "Disability" (as defined in the New
Employment Agreement) prior to the payment of the Deferred Amount, the Deferred
Amount shall be paid, on its due date, to Employee's executor or administrator
or to such other person as Employee has theretofore specified in a signed
document delivered to the Company.
(e) Notwithstanding anything to the contrary in Sections 1(a), (b) and (d):
(i) the Company's obligation to make the Bonus Payment due immediately
following the Effective Time shall be conditioned on Employee having
executed, on or after the date on which the Effective Time occurs, and not
having thereafter revoked within the revocation period specified therein, a
Release substantially in the form of Exhibit 1 to this Bonus Agreement; and
2
<PAGE>
(ii) the Company's obligation to pay the Deferred Amount shall be
conditioned on Employee having executed, on or after the First Anniversary,
and not having thereafter revoked within the revocation period specified
therein, a second Release substantially in the form of said Exhibit 1.
(f) Anything in this Bonus Agreement to the contrary notwithstanding, if
any amounts to be paid to Employee (or to his executor, administrator or other
payee specified by him) under this Bonus Agreement, or any other plan, agreement
or program of the Company or any of its affiliates, would result in a "parachute
payment" (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), then the aggregate of such "parachute payments" shall
----
be reduced so that the aggregate of the amounts paid to Employee which would
otherwise constitute "parachute payments" will equal three times Employee's
"base amount" (as defined in Section 280G(b)(3) of the Code) less $1.00. Any
determination to be made under the preceding sentence shall be made by an
independent accounting firm with a nationally recognized tax practice that has
not performed services for the Company or any of its affiliates, which firm
shall be selected by the Company and be reasonably acceptable to Employee, it
being agreed that such accounting firm may not be the Company's or Holdings'
independent auditors. The Company agrees to pay the accounting firm's fees and
expenses with respect to any such determination. Nothing herein shall limit the
parties' respective rights in the event that an applicable government taxing
authority or court takes a position which is inconsistent with any such
determination.
(g) Nothing in this Bonus Agreement shall affect Employee's right to
receive, when his employment by the Company terminates for any reason (whether
before or after the Effective Time), all vacation pay that has accrued under the
Company's existing vacation policy as applied to Employee.
2. Benefit Accruals.
----------------
Benefit accruals with respect to Employee under the Retirement Plan
for Corporate Officers of PS Group, Inc. and Participating Subsidiaries, dated
March 12, 1984, shall cease as of the Effective Time.
3. Confidentiality.
---------------
Employee agrees that he will not use for his own benefit or disclose to any
third party, either during his employment or thereafter, any confidential
information or data concerning the business or activities of the Company, Parent
or any of their respective subsidiaries or affiliates acquired at any time
while employed or rendering services to the Company or any of its subsidiaries
or affiliates, or any of their respective predecessors or successors.
Employee's obligations under this covenant and any liability for failure to
satisfy these obligations shall survive any termination of this Bonus Agreement.
3
<PAGE>
4. Termination.
-----------
This Bonus Agreement shall terminate, and be null and void, in the event
that, prior to the Effective Time:
(a) The Merger Agreement is terminated pursuant to its terms; or
(b) Employee's services as an employee of the Company cease for any reason
other than Employee's death or Disability.
5. Entire Agreement.
----------------
This Bonus Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supercedes, as of the Effective Time,
all other written, oral or implied agreements between the parties including,
without limitation, the Current Employment Agreement and the Original Agreement.
The Employment Agreement dated December 18, 1999 between the Company and
Employee shall remain in full force and effect. This Bonus Agreement may be
modified or amended only by a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Bonus Agreement
as of the day and year first written above.
PS GROUP, INC.
By: /s/ Charles E. Rickershauser, Jr.
---------------------------------
Charles E. Rickershauser, Jr.
Chief Executive Officer
EMPLOYEE
/s/ L. A. Guske
---------------
Lawrence A. Guske
4
<PAGE>
Exhibit 1
Release From All Claims
__________________, [2000]
[Name]
[Title]
PS Group, Inc.
[Address]
Dear ______________:
In consideration of the payment to me (or to my executor, administrator or
other payee designated by me in writing, in the event of my death), on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties (as defined below) from any and all claims, actions, causes of
action, suits, costs, controversies, judgements, decrees, verdicts, damages,
liabilities, attorneys' fees, covenants, contracts, and agreements
(collectively, "Claims") that I may have, or in the future may possess, with
------
respect to the Company Parties, including, but not limited to, any Claims
relating to my employment with the Company Parties or the termination thereof,
any Claims arising under Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, each of these
as amended, or any other federal or state or local law, whether such Claim
arises under statute, common law or in equity, and whether or not I or any of
the Company Parties is presently aware of the existence of such Claim, but
excluding the following Claims (the "Excluded Claims"): (i) Claims under the
---------------
Amended and Restated Bonus Agreement dated February __, 2000 between the Company
and me; (ii) Claims under the Employment Agreement dated December 18, 1999
between the Company and me; (iii) Claims for accrued vacation pay; (iv) Claims
under the Retirement Plan for Corporate Officers of PSA, Inc. Participating
Subsidiaries as amended and restated as of March 12, 1984; (v) Claims under the
Split Dollar Life Insurance Agreement dated January 1, 1986 (as modified by
letter dated March 23, 1999) between the Company and me; and (vi) Claims for
indemnification in respect of my services as a director and/or officer and/or
employee of any of the Company Parties in accordance with Sections 5.06(a) and
(b) of the Merger Agreement and related claims under the directors' and
officers' liability insurance policy obtained in accordance with Section 5.06(c)
of the Merger Agreement. I also hereby forever release, discharge and waive any
right I may have to recover in any proceeding brought by any federal, state or
local agency against any of the Company Parties to enforce any such
5
<PAGE>
laws, but excluding Excluded Claims. I agree that the Bonus Payments shall be in
full satisfaction of any and all Claims for payment or other benefits of any
kind that I may have against the Company Parties except for any other Excluded
Claims.
For purposes of this letter, the "Company Parties" means the Company,
---------------
Parent and any and all of their respective predecessor or successor companies,
shareholders, subsidiaries and affiliates wherever located and each of their
present, former and future directors, officers, employees, agents, attorneys,
heirs and assigns. Capitalized terms that are used but not defined herein have
the meanings assigned to them in the Bonus Agreement.
In addition to the foregoing, in consideration of the payment, on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties from any and all Claims (other than Excluded Claims) that I may
have as of the date I sign this letter arising under the Federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules
and regulations promulgated thereunder (the "ADEA"). By signing this letter, I
----
hereby acknowledge and confirm the following: (i) I was advised by the Company
to consult with an attorney of my choice prior to signing this letter and to
have such attorney explain to me the terms of this letter, including, without
limitation, the terms relating to my release of claims arising under the ADEA;
(ii) I was given a period of not fewer than 21 days to consider the terms of
this letter and to consult with an attorney of my choosing with respect thereto;
and (iii) I am providing the release and discharge set forth in this paragraph
only in exchange for consideration in addition to anything of value to which I
am already entitled.
To ensure that the foregoing release is fully enforceable in accordance
with its terms, I agree to waive any and all rights of Section 1542 of the
California Civil Code (to the extent applicable) as it exists from time to time
or a successor provision thereto, which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor.
In addition, to ensure that the foregoing release is fully enforceable in
accordance with its terms, subject to the payment, on their respective due
dates, of the Bonus Payments, I agree to waive any protection that may exist
under any comparable or similar statute and under any principle of common law of
the United States or any and all States with respect to all Claims (other than
Excluded Claims).
THIS MEANS THAT (EXCEPT AS EXPRESSLY PROVIDED HEREIN) BY SIGNING THIS
LETTER, I WILL HAVE WAIVED ANY RIGHT I MAY HAVE HAD TO BRING A LAWSUIT OR MAKE
ANY CLAIM AGAINST THE COMPANY
2
<PAGE>
PARTIES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY PARTIES UP TO THE DATE OF
THE SIGNING OF THIS LETTER.
In addition I have been advised of my right to revoke this letter during
the seven-day period after signing, provided such revocation is in writing,
signed by me and delivered to the Company. I understand that in the event of
any such revocation, all obligations of the Company with respect to the Bonus
Payments will terminate and be of no further effect as of the date of such
revocation.
___________________________________
Lawrence A. Guske
ACKNOWLEDGED:
PS GROUP, INC.
By: ___________________________________
Name: Charles E. Rickershauser, Jr.
Title: Chief Executive Officer
Date: __________________________ [2000]* [ ]**
_________________________________
* Release under Section 1(e)(i) of the foregoing Bonus Agreement.
** Release under Section 1(e)(ii) of the foregoing Bonus Agreement.
3
<PAGE>
Exhibit 10.5
AMENDED AND RESTATED
CONSULTING AGREEMENT
AMENDED AND RESTATED CONSULTING AGREEMENT (the "Agreement") dated as
of December 18, 1999 and amended and restated as of February 4, 2000, by and
between PS GROUP, INC., a Delaware corporation (the "Company"), and Johanna
Unger ("Consultant").
WHEREAS, PS Group Holdings, Inc., a Delaware corporation, Heritage Air
Holdings Statutory Trust, a Connecticut statutory trust ("Parent"), and PSG
Acquisition, Inc., a Delaware corporation ("Merger Sub"), entered into an
Agreement and Plan of Merger, dated as of December 18, 1999 (the "Merger
Agreement"), pursuant to which Merger Sub shall merge with and into the Company
(the "Merger");
WHEREAS, in connection with the Merger and with the approval of the
board of directors of the Company, the parties entered into a Consulting
Agreement dated December 18, 1999 (the "Original Agreement"); and
WHEREAS, the Company and Consultant now desire to amend and restate
the Original Agreement in its entirety to be effective at the Effective Time (as
defined in the Merger Agreement).
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties agree as follows:
1. Consulting Services. The Company agrees to engage the services of
-------------------
Consultant and Consultant agrees to provide such services on the terms and
conditions set forth below.
2. Term. Subject to Section 8, the term of this Agreement (the
----
"Term") shall be one year from the Effective Time; provided, however, that the
----
Term may be extended from time to time by a written instrument signed by both
parties. In the event that the Merger Agreement is terminated pursuant to its
terms or Consultant does not continue her services as an employee of the Company
during the period from the date hereof until the Effective Time, this Agreement
shall be null and void.
3. Responsibilities of Consultant. During the Term, Consultant shall
------------------------------
provide such consulting and advisory services relating to the Company and its
subsidiaries and affiliates as may be reasonably requested by Parent or the
Company from time to time. In addition, Consultant shall assist Lawrence A.
Guske in taking over
<PAGE>
the various duties performed by Consultant for the Company, its subsidiaries and
affiliates prior to the Effective Time. Such services shall not be required to
be performed by Consultant for more than 25 hours per week. Consultant shall
carry out such duties in a competent and efficient manner.
4. Compensation. (a) As consideration for her consulting and advisory
------------
services hereunder, Consultant shall be paid $150.00 for each hour during which
such consulting and advisory services are performed (documented to the
reasonable satisfaction of the Company). Such amounts shall be payable in
accordance with the Company's normal payroll practices.
(b) Any amounts paid to Consultant pursuant to this Agreement shall be
subject to any deductions or withholdings required by law.
5. Benefits. (a) Except as provided below and subject to the terms
--------
thereof, Consultant shall continue to participate in those employee benefit
plans maintained by the Company (other than the 401(k) plan) and in which she is
participating immediately prior to the date hereof; provided, however, that this
Agreement shall not prohibit the Company from modifying or replacing any such
plan with a plan that provides substantially similar benefits.
(b) Benefit accruals with respect to Consultant under the Retirement
Plan for Corporate Officers of PSA, Inc. and Participating Subsidiaries, dated
March 12, 1984, shall cease as of the Effective Time. Benefit accruals with
respect to Consultant under the vacation policy of the Company shall cease as of
the Effective Time.
6. Allowances. During the Term, Consultant shall be entitled to a
----------
tuition allowance of $14,000.
7. Confidentiality. Consultant agrees that she will not use for her
---------------
own benefit or disclose to any third party, either during the Term or
thereafter, any confidential information or data concerning the business or
customers of the Company, Parent or any of their respective subsidiaries or
affiliates acquired at any time while employed or rendering services to the
Company or any of its subsidiaries or affiliates, or any of their respective
predecessors or successors. Consultant's obligations under this covenant, and
any liability for failure to satisfy these obligations, shall survive any
termination of this Agreement.
8. Termination. In addition to the termination provisions of the
-----------
second sentence of Section 2, this Agreement shall terminate under the following
circumstances:
(a) This Agreement shall automatically terminate upon the death,
Disability, or resignation of Consultant. For purposes of this Agreement,
2
<PAGE>
"Disability" means a physical or mental disability or infirmity of
Consultant, as determined by a physician of recognized standing selected by
the Company, that prevents (or in the opinion of such physician, is
reasonably expected to prevent) the normal performance of Consultant's
duties with the Company for any continuous period of 180 days, or for 180
days during any one twelve-month period.
(b) The Company may terminate this Agreement for Cause (as defined
below). For purposes of this Agreement, "Cause" means (i) commission by
Consultant of a significant act of dishonesty, deceit or breach of
fiduciary duty in the performance of her duties hereunder; (ii) the gross
neglect or willful failure of Consultant to perform her duties hereunder;
(iii) any act by Consultant which reflects materially and adversely upon
the Company, Parent or any of their respective subsidiaries or affiliates;
or (iv) any material breach by Consultant of this Agreement.
9. Effect of Termination. If this Agreement is terminated on account
---------------------
of Consultant's death, Disability or resignation or by the Company for Cause,
the Company shall cease to have any obligations hereunder; provided, however,
that such termination shall not affect Consultant's obligations under Section 7
or the entitlement of Consultant or her heirs to any death, disability or
retirement payments to which they may be entitled as of the date of termination
under any employee benefit plans maintained by the Company.
10. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties concerning the subject matter hereof, and supersedes, at the
Effective Time, all other written, oral or implied agreements between the
parties, including, without limitation, (i) the Employment Agreement dated as of
April 18, 1988 between the Company and Consultant, as amended from time to time,
and (ii) any agreement, arrangement or understanding providing for severance or
"change of control" benefits or payments; provided however, this Agreement shall
have no effect with respect to the Separation Agreement dated as of December 18,
1999 between the Company and Consultant. This Agreement may be modified or
amended only by a writing signed by both parties.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PS GROUP, INC.
By: /s/ Charles E. Rickershauser, Jr.
---------------------------------
Name: Charles E. Rickershauser, Jr.
Title: Chief Executive Officer
CONSULTANT
/s/ Johanna Unger
-----------------
Johanna Unger
4
<PAGE>
Exhibit 10.6
AMENDED AND RESTATED
UNGER SEPARATION AGREEMENT
This Amended and Restated Separation Agreement (this "Separation
----------
Agreement") is made this 4th day of February, 2000, by and between PS Group,
Inc., a Delaware corporation (the "Company"), and Johanna Unger ("Employee"),
------- --------
and is effective as of the 18th day of December, 1999, with reference to the
following facts:
A. Employee has served as Vice President and Controller of the Company
since March 1988. Employee has also served as Vice President and Controller of
the Company's parent corporation, PS Group Holdings, Inc., a Delaware
corporation ("Holdings"), since 1996;
--------
B. On December 18, 1999, Holdings entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Heritage Air Holdings Statutory Trust, a
----------------
Connecticut statutory trust ("Parent"), and PSG Acquisition, Inc., a Delaware
------
corporation ("Merger Sub"), providing for the merger of Merger Sub with and into
----------
Holdings (the "Merger"), as a result of which the stockholders of Holdings will
------
receive $12 per share for each of their shares and Holdings will become a
wholly-owned subsidiary of Parent;
C. Employee's employment with the Company and each of its affiliates, and
all of her directorships and offices with the Company and each of its
affiliates, will terminate at the effective time of the Merger (the "Effective
---------
Time");
- ----
D. The Board of Directors of Holdings has determined that Employee's
services to Holdings and its subsidiaries merit a payment to Employee of a
bonus, to be paid in accordance with the following provisions, if the Merger
occurs, in consideration for the Employee relinquishing, as of the Effective
Time, her rights under her Employment Agreement with the Company dated as of
April 18, 1988, as amended (the "Employment Agreement"), and her Split Dollar
-------------------
Life Insurance Agreement with the Company dated as of January 1, 1986, as
modified by letter dated March 23, 1999 (the "Insurance Agreement"). To give
-------------------
effect to such determination, concurrently with the execution of the Merger
Agreement, the Company, with the approval of its Board of Directors, entered
into a Separation Agreement dated December 18, 1999 (the "Original Agreement")
------------------
with Employee; and
E. The Company and Employee now wish to amend and restate the Original
Agreement in its entirety.
NOW THEREFORE, the Company and Employee hereby agree as follows:
<PAGE>
1. Termination of Employment and Benefits.
--------------------------------------
(a) At the Effective Time, the employment of Employee by the Company and
each of its affiliates, and all of Employee's directorships and offices with the
Company and each of its affiliates, shall automatically cease.
(b) At the Effective Time, all of Employee's rights under the Employment
Agreement and the Insurance Agreement shall lapse and those agreements shall
cease to be of any force and effect. As of the Effective Time, Employee
relinquishes all right and title in, and benefits under, the Insurance Agreement
and the insurance policy referred to therein.
2. Bonus Payments.
--------------
(a) In recognition of Employee's valuable contribution to the Company,
Holdings and their affiliates, and in light of the provisions of Section 1 of
this Separation Agreement, the Company shall pay Employee the following bonus
payments (each, a "Bonus Payment") if the Merger occurs:
-------------
(i) Immediately following the Effective Time, the Company shall pay
Employee the sum of $335,000; and
(ii) On the last day of each calendar month beginning with the month
following the month in which the Effective Time occurs and ending
on (and including) the twelfth calendar month, the Company shall
pay Employee the sum of $16,750.
(b) No interest shall be payable on any Bonus Payment in respect of the
period prior to its due date hereunder.
(c) All Bonus Payments shall be subject to any deductions or withholdings
required by law.
(d) In the event of Employee's death prior to the payment of any Bonus
Payment, all subsequent Bonus Payments shall be paid, on their respective due
dates, to Employee's executor or administrator or to such other person as
Employee has theretofore specified in a signed document delivered to the
Company.
(e) Notwithstanding anything to the contrary in Sections 2(a), (b) and (d):
(i) the Company's obligation to make the Bonus Payments referred to in Section
2(a) shall be conditioned on Employee having executed, on or after the date on
which the Effective Time occurs, and not having thereafter revoked within the
revocation period specified therein, a Release substantially in the form of
Exhibit 1 to this Separation Agreement; and (ii) the Company's obligation to
make the final Bonus Payment referred to in Section
2
<PAGE>
2(a)(ii) shall be further conditioned on Employee having executed, not earlier
than 8 days before the due date of such final payment, and not having thereafter
revoked within the revocation period specified therein, a second Release
substantially in the form of said Exhibit 1.
(f) Anything in this Separation Agreement to the contrary notwithstanding,
if any amounts to be paid to Employee (or to her executor, administrator or
other payee specified by her) under this Separation Agreement, or any other
plan, agreement or program of the Company or any of its affiliates, would result
in a "parachute payment" (as defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Code"), then the aggregate of such
----
"parachute payments" shall be reduced so that the aggregate of the amounts paid
to Employee which would otherwise constitute "parachute payments" will equal
three times Employee's "base amount" (as defined in Section 280G(b)(3) of the
Code) less $1.00. Any determination to be made under the preceding sentence
shall be made by an independent accounting firm with a nationally recognized tax
practice that has not performed services for the Company or any of its
affiliates, which firm shall be selected by the Company and be reasonably
acceptable to Employee, it being agreed that such accounting firm may not be the
Company's or Holdings' independent auditors. The Company agrees to pay the
accounting firm's fees and expenses with respect to any such determination.
Nothing herein shall limit the parties' respective rights in the event that an
applicable government taxing authority or court takes a position which is
inconsistent with any such determination.
(g) Nothing in this Separation Agreement shall affect Employee's right to
receive, when her employment by the Company terminates for any reason (whether
before or at the Effective Time), all vacation pay that has accrued under the
Company's existing vacation policy as applied to Employee.
3. Confidentiality.
---------------
Employee agrees that she will not use for her own benefit or disclose to
any third party, either during her employment or thereafter, any confidential
information or data concerning the business or activities of the Company, Parent
or any of their respective subsidiaries or affiliates acquired at any time
while employed or rendering services to the Company or any of its subsidiaries
or affiliates, or any of their respective predecessors or successors.
Employee's obligations under this covenant and any liability for failure to
satisfy these obligations shall survive any termination of this Separation
Agreement.
4. Termination.
-----------
This Separation Agreement shall terminate, and be null and void, in the
event that, prior to the Effective Time:
(a) The Merger Agreement is terminated pursuant to its terms; or
3
<PAGE>
(b) Employee's services as an employee of the Company cease for any reason
other than Employee's death or disability.
5. Entire Agreement.
----------------
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supercedes, as of the Effective Time,
all other written, oral or implied agreements between the parties including,
without limitation, the Employment Agreement and the Original Agreement. The
Consulting Agreement dated December 18, 1999 between the Company and Employee
shall remain in full force and effect. This Agreement may be modified or
amended only by a writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Separation
Agreement as of the day and year first written above.
PS GROUP, INC.
By: /s/ Charles E. Rickershauser, Jr.
---------------------------------
Charles E. Rickershauser, Jr.
Chief Executive Officer
EMPLOYEE
/s/ Johanna Unger
-----------------
Johanna Unger
4
<PAGE>
Exhibit 1
Release From All Claims
_______________, 2000
[Name]
[Title]
PS Group, Inc.
[Address]
Dear ______________:
In consideration of the payment to me (or to my executor, administrator or
other payee designated by me in writing, in the event of my death), on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties (as defined below) from any and all claims, actions, causes of
action, suits, costs, controversies, judgements, decrees, verdicts, damages,
liabilities, attorneys' fees, covenants, contracts, and agreements
(collectively, "Claims") that I may have, or in the future may possess, with
------
respect to the Company Parties, including, but not limited to, any Claims
relating to my employment with the Company Parties or the termination thereof,
any Claims arising under Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, each of these
as amended, or any other federal or state or local law, whether such Claim
arises under statute, common law or in equity, and whether or not I or any of
the Company Parties is presently aware of the existence of such Claim, but
excluding the following Claims (the "Excluded Claims"): (i) Claims under the
---------------
Amended and Restated Separation Agreement dated February __, 2000 between the
Company and me; (ii) Claims under the Consulting Agreement dated December 18,
1999 between the Company and me; (iii) Claims for accrued vacation pay; (iv)
Claims under the Retirement Plan for Corporate Officers of PSA, Inc. and
Participating Subsidiaries as amended and restated as of March 12, 1984; and (v)
Claims for indemnification in respect of my services as a director and/or
officer and/or employee of any of the Company Parties in accordance with
Sections 5.06(a) and (b) of the Merger Agreement and related claims under the
directors' and officers' liability insurance policy obtained in accordance with
Section 5.06(c) of the Merger Agreement. I also hereby forever release,
discharge and waive any right I may have to recover in any proceeding brought by
any federal, state or local agency against any of the Company Parties to
<PAGE>
enforce any such laws, but excluding Excluded Claims. I agree that the Bonus
Payments shall be in full satisfaction of any and all Claims for payment or
other benefits of any kind that I may have against the Company Parties except
for any other Excluded Claims.
For purposes of this letter, the "Company Parties" means the Company,
---------------
Parent and any and all of their respective predecessor or successor companies,
shareholders, subsidiaries and affiliates wherever located and each of their
present, former and future directors, officers, employees, agents, attorneys,
heirs and assigns. Capitalized terms that are used but not defined herein have
the meanings assigned to them in the Separation Agreement.
In addition to the foregoing, in consideration of the payment, on their
respective due dates, of each Bonus Payment, I hereby release and discharge the
Company Parties from any and all Claims (other than Excluded Claims) that I may
have as of the date I sign this letter arising under the Federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules
and regulations promulgated thereunder (the "ADEA"). By signing this letter, I
----
hereby acknowledge and confirm the following: (i) I was advised by the Company
to consult with an attorney of my choice prior to signing this letter and to
have such attorney explain to me the terms of this letter, including, without
limitation, the terms relating to my release of claims arising under the ADEA;
(ii) I was given a period of not fewer than 21 days to consider the terms of
this letter and to consult with an attorney of my choosing with respect thereto;
and (iii) I am providing the release and discharge set forth in this paragraph
only in exchange for consideration in addition to anything of value to which I
am already entitled.
To ensure that the foregoing release is fully enforceable in accordance
with its terms, I agree to waive any and all rights of Section 1542 of the
California Civil Code (to the extent applicable) as it exists from time to time
or a successor provision thereto, which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement
with the debtor.
In addition, to ensure that the foregoing release is fully enforceable in
accordance with its terms, subject to the payment, or their respective due
dates, of each Bonus Payment, I agree to waive any protection that may exist
under any comparable or similar statute and under any principle of common law of
the United States or any and all States with respect to all Claims (other than
Excluded Claims).
THIS MEANS THAT (EXCEPT AS EXPRESSLY PROVIDED HEREIN) BY SIGNING THIS
LETTER, I WILL HAVE WAIVED ANY RIGHT I MAY HAVE HAD TO BRING A LAWSUIT OR MAKE
ANY CLAIM AGAINST THE COMPANY
2
<PAGE>
PARTIES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY PARTIES UP TO THE DATE OF
THE SIGNING OF THIS LETTER.
In addition I have been advised of my right to revoke this letter during
the seven-day period after signing, provided such revocation is in writing,
signed by me and delivered to the Company. I understand that in the event of
any such revocation, all obligations of the Company with respect to the Bonus
Payments will terminate and be of no further effect as of the date of such
revocation.
___________________________________
Johanna Unger
ACKNOWLEDGED:
PS GROUP, INC.
By: ___________________________________
Name:
Title:
Date: ___________________________________
3
<PAGE>
Exhibit 10.7
PS GROUP HOLDINGS, INC.
4370 La Jolla Village Drive
Suite 1050
San Diego, California 92122
February 4, 2000
Heritage Air Holdings Statutory Trust
c/o First Union National Bank, as trustee
10 State House Square
Hartford, Connecticut 06103
Attention: W. Jeffrey Kramer
Re: Agreement and Plan of Merger Dated as of December 18, 1999
Among Ourselves, Yourselves and PSG Acquisition, Inc.
(the "Merger Agreement")
-----------------------------------------------------------
Gentlemen:
In connection with the execution of the Merger Agreement, the parties had
intended the "SERP Policy" (as defined in Section 5.05(b) of the Merger
Agreement) to insure not only the obligations of PS Group, Inc. and Statex
Petroleum, Inc. specified in Section 5.05(b) but also the payments to be made by
PS Group, Inc. to Charles E. Rickershauser, Jr. under the Separation Agreement
dated December 18, 1999 between PS Group, Inc. and Mr. Rickershauser (as amended
and restated concurrently herewith, the "Rickershauser Separation Agreement").
However, Section 5.05(b) of the Merger Agreement inadvertently omitted a
provision to this effect.
Please countersign this letter to confirm your agreement that, for all
purposes of the Merger Agreement, the SERP Policy is required to cover the
amounts due to Mr. Rickershauser, under the Rickershauser Separation Agreement,
as "Bonus Payments" (as defined in Section 2(a) thereof) together with interest
on the Bonus Payments (as specified in Section 2(b) thereof).
<PAGE>
Thank you for your cooperation.
Very truly yours,
PS GROUP HOLDINGS, INC.
By: /s/ L. A. Guske
---------------
Lawrence A. Guske
Vice President-Finance
ACCEPTED AND AGREED
HERITAGE AIR HOLDINGS
STATUTORY TRUST
By: FIRST UNION NATIONAL BANK,
not in its individual capacity but
solely as Trustee
By: /s/ Brian D. Porch
---------------------------------
Name: Brian D. Porch
Title: Vice President, Authorized officer
2
