Document:

EX-10.12

 

Exhibit
10.12

FINAL DOCUMENT

ATLAS AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

Approved by Compensation Committee: March 20, 2007, subject to approval by shareholders of
2007 Incentive Plan

Shareholder Approval of 2007 Incentive Plan: May 23, 2007

Amended by Compensation Committee: February 15, 2008

 

 

ATLAS
AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

Section 1. Purpose.

     The purpose of the Program is to set forth certain terms and conditions governing cash awards
made under Atlas Air Worldwide Holdings, Inc.’s (“AAWW”) 2007 Incentive Plan (the “Plan”). The
Program shall be treated for all purposes as a sub-plan or arrangement for the grant of Cash Awards
under the Plan. Awards under the Program are intended to qualify for the performance-based
compensation exception to the limitations on tax deductibility imposed by Section 162(m) of the Code
and together with the applicable terms of the Plan and Program shall be construed accordingly. The
Program shall be effective as of January 1, 2007, and shall be applicable for the 2007 Program Year
and subsequent Program Years during the continuance of the Plan unless amended or terminated by the
Committee pursuant to Section 10. Capitalized terms not defined herein shall have the meanings
given in the Plan.

Section 2. Definitions.

     2.1. Award shall mean an opportunity to earn benefits under the Program.

     2.2.
Atlas shall mean AAWW or its subsidiaries.

     2.3. Base Salary shall mean an Eligible Employee’s actual base salary for the
applicable period.

     2.4.  Board shall mean the Board of Directors of AAWW.

     2.5. Beneficiary shall mean a Participant’s beneficiary designated pursuant to Section
8.

     2.6. Code shall mean the Internal Revenue Code of 1986, as amended from time to
time.

     2.7. Committee shall mean the Compensation Committee of the Board.

     2.8. Eligible Employee means any of the Chief Executive Officer, President,
Executive Vice Presidents and Senior Vice Presidents of AAWW and such other Atlas senior
executive officers as shall be designated by the Committee.

     2.9. Participant shall mean any Eligible Employee during such Eligible Employee’s
period of participation in the Program.

     2.10.  Program shall mean this Atlas Air Worldwide Holdings, Inc. Annual Incentive
Program for Senior Executives, as it may be amended from time to time.

     2.11. Program Year shall mean the calendar year.

Section 3. Administration.

     The Program shall be administered by the Committee. The Committee shall have full

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power and authority in its sole discretion to construe and interpret the Program, establish and
amend administrative regulations to further the purpose of the Program, determine the extent to
which Award payments have been earned by virtue of satisfying the financial goal described in
Section 5.2, determine whether to reduce under Sections 5.2(b) through 5.2(e), to the extent that
cost control and management-business objectives have not been satisfied, the amount otherwise
payable under Section 5.2, determine whether to settle a portion of the Award in Atlas stock and
take any other action necessary to administer the Program. All decisions, actions or
interpretations of the Committee shall be final, conclusive, and binding upon all Participants.

Section 4. Participation.

     Each Eligible Employee shall participate in the Program if he or she is employed as an
Eligible Employee on the first day of the Program Year. An individual who becomes an Eligible
Employee during a Program Year but prior to September 30 of the applicable year will participate
only with respect to Base Salary earned on and after the date he or she first becomes an Eligible
Employee. Any determination by the Committee to provide incentive compensation to an Eligible
Employee other than as described in the preceding two sentences shall be treated as a separate
award made outside the Program.

Section 5. Section 5: Determination of Awards.

     5.1. Target Bonus Award, Maximum Bonus Award. The maximum bonus payable
under an Award for each Program Year will be the lesser of (i) the dollar limit set forth in
Section 4,c of the Plan, and (ii) the following percentage of Base Salary for each
Participant:
one-hundred sixty percent (160%) of Base Salary for the CEO, one-hundred twenty percent
(120%) for Executive Vice Presidents and one-hundred percent (100%) of Base Salary for each
other Participant,

     5.2.
Performance_Measures. Payment under an Award is conditioned upon
achievement of the threshold Financial Goal, as described below. If the threshold Financial
Goal
is achieved, the Award payment will be the maximum bonus amount described in Section 5.1
minus such adjustments, if any, as the Committee determines to be appropriate to reflect
levels
of achievement with respect to the Financial Goal (if that Goal is achieved at a level below
the
maximum level) and/or one or more of the other factors described below and/or such other
factors as shall be designated, by the Committee.

     (a) Financial
Goal. The financial goal is based on the Company’s pre-tax
profits. For each Program Year, the threshold pre-tax profit level (which must be met
before any amounts will be payable under Awards), the maximum pre-tax profit level,
intermediate pre-tax profit levels, and the percentage of each Participant’s target
bonus
award that will be deemed achieved at each such profit level, will be determined by the
Committee.

     (b) Cost Control Adjustment. The Committee may reduce maximum Award
payments, if any, to reflect the level of achievement of such cost control goal or
goals as
the Committee may establish for the Program Year.

     (c) Service
Reliability. The Committee may also reduce maximum Award

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payments, if any, to reflect the level of achievement of such service reliability factors as
the Committee may determine for the Program Year.

     (d) Management Business Objectives Adjustment. The Committee may
also reduce maximum Award payments, if any, to reflect the level of achievement of such
individual management business objectives as the Committee may determine in the case
of any Participant for the Program Year.

     (e) Effect
of Corporate Transactions and other Exigencies. Without
limiting the generality of the foregoing, the Committee shall have the authority, to
the
extent consistent with the requirements for satisfying the performance-based
compensation exception under 162(m) of the Code, to identify
objectively determinable
events (for example, but without limitation, acquisitions or dispositions) which, if
they
occur, would have a material effect on objective Performance Criteria applicable to
Awards under the Program, and to adjust such Performance Criteria in an objectively
determinable manner to reflect such events.

Section 6.
Payment of Awards under this Program.

     6.1. General. A Participant will be entitled to receive payment, if any, under an
Award if the Participant is still employed by Atlas on the last day of the Program Year for
which
the Award is paid, unless in the period between the last day of the Program Year and any
payout
under the Program, the Participant is terminated by AAWW for Cause (as defined in Section 7)
or the Participant terminates his employment with AAWW for any reason. A Participant will
receive an Award in the manner and at the times set forth in
Sections 6.2, 6.3 and 6.4.

     6.2. Time of Payment. Any amount payable for an Award for a Program Year shall be
paid by Atlas within two weeks following certification by the Committee as to achievement of
the performance goals following the completion of the year-end audit for the applicable
Program
Year, but in no event later than March 15 of the year following the applicable Program Year.

     6.3. Form of Payment. All amounts payable for an Award shall be paid in cash or
Atlas stock, but Atlas stock may be used, if at all, only for the portion of the Award that
exceeds
fifty percent (50%) of Base Salary.

     6.4.  Termination of Employment.

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     (a) In
General. Except as provided otherwise in this Section 6.4, a
Participant whose employment terminates for any reason prior to the last day of
the
Program Year for which an Award is payable shall forfeit such Award.

     (b) Death or Disability. If a Participant’s employment terminates during a
Program Year by reason of death or Disability (as defined in the Plan), the Committee
may, in its sole discretion, direct that all or a portion of a Participant’s Award be
paid,
taking into account the duration of employment during the Program Year, the
Participant’s performance, and such other matters as the Committee shall deem
appropriate.

     (c) Retirement
or Involuntary Termination. If a Participant’s employment
terminates during a Program Year by reason of normal retirement under a retirement
program of the Company or otherwise with the consent of the Company, the Committee
may, in its sole discretion, direct that the Participant receive the payment that he or
she
would have received, with respect to an Award for the Program Year in which such
termination occurred, if he or she had been employed by Atlas on the last day of such
Program Year. Such payment shall be subject to all terms and conditions of the Program,
including without limitation the provisions of Section 5 (relating to determination of
the Award) and Section 6.2 (relating to the time of payment of
the Award). In addition and
notwithstanding the above, the Company may reduce the amount otherwise payable to a
Participant under this Section 6.4(c) on account of the duration of the Participant’s
employment during the Program Year, the Participant’s performance, and such other
matters as the Committee shall deem appropriate. This Section 6.4 shall not apply to
the
extent the rights of a Participant in such circumstances are governed by another
agreement.

Section 7.
Change in Control.

     In the event the Company undergoes a Change in. Control, Awards will be determined and paid in
accordance with this Section 7 based on the assumption that each of the Financial Goal, the Cost
Control Goal and the Management-Based Objectives have been achieved at a level of 100% of target
for the Plan Year in which the Change in Control takes place pursuant to Section 5 of the Program;
provided, however, if upon completion of the year-end audit for the applicable Program Year it is
determined that the Financial Goal was achieved at a level higher than 100% of target, Awards will
be correspondingly adjusted pursuant to Section 5 of the Program. Notwithstanding the above, a
Participant whose employment with Atlas terminates prior to the Change in Control shall forfeit
such Award, unless such termination is by reason of (i) death, (ii) Disability (as defined in the
Plan), (iii) normal retirement under a retirement program of the Company, (iv) by the Company
without Cause, or (v) by the Participant for Good Reason. For purposes of this Program, “Change in
Control of the Company” shall mean and shall be deemed to have occurred if (i) any Person (within
the meaning of the Exchange Act) or any two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of the Company (or other securities convertible into voting
securities of the Company) representing 40% or more of the combined voting power of all securities
of the Company entitled to vote in the election of directors, other than securities having such
power only by reason of the happening

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of a contingency, or (ii) the Board of Directors of the Company shall not consist of a majority of
Continuing Directors, For purposes of this Program, “Continuing Directors” shall mean the directors
of the Company on the date hereof and each other director, if such other director’s nomination for
election to the Board of Directors of the Company is recommended by a majority of the then
Continuing Directors. “Cause” shall mean (i) the Participant’s refusal or failure (other than
during periods of illness or disability) to perform his or her material duties and responsibilities
to the Company or its affiliates, (ii) the conviction or plea of guilty or nolo contendere of the
Participant in respect of any felony, other than a motor vehicle offense, (iii) the commission of
any act which causes material injury to the reputation, business or business relationships of the
Company or its affiliates including, without limitation, any material breach of written policies of
the Company with respect to trading in securities, (iv) other acts of fraud in connection with the
Participant’s duties and responsibilities to the Company or its affiliates, including, without
limitation, misappropriation, theft or embezzlement in the performance of the Participant’s duties
and responsibilities as an employee of the Company or its affiliates, or (v) a violation of any
material Company policy, including, without limitation, a violation of the laws against workplace
discrimination. “Good Reason” shall mean the failure of the surviving entity in the Change in
Control, of failure of an affiliate of the surviving entity, to continue the Participant in a
position with the surviving entity or affiliate that (a) is not located within 40 miles of the
location of such Participant’s most recent principal location of employment with the Company, (ii)
does not involve substantially comparable duties and responsibilities as such Participant’s most
recent position with the Company, or (iii) does not entitle the Participant to salary, benefits and
other compensation (other than bonus opportunity, which shall be paid as provided above) that, in
the aggregate, are substantially comparable or more favorable than those to which the Participant
most recently was entitled during employment with the Company.

Section 8. Beneficiary Designation.

     8.1. Designation and Change of Designation. Each Participant shall file with Atlas a
written designation of one or more persons as the Beneficiary who shall be entitled to receive
the
Award, if any, payable under the Program upon the Participant’s death. A Participant may, from
time to time, revoke or change his Beneficiary designation without the consent of any prior
Beneficiary by filing a new designation with Atlas. The last such designation received by
Atlas
shall be controlling; provided, however, that no designation, or change or revocation thereof,
shall be effective unless received by Atlas prior to the Participant’s death, and in no event
shall it
be effective as of any date prior to such receipt.

     8.2. Absence of Valid Designation. If no such Beneficiary designation is in effect at
the time of a Participant’s death, or if no designated Beneficiary survives the Participant,
or if
such designation conflicts with law, the Participant’s estate shall be deemed to have been
designated as the Participant’s Beneficiary and shall receive the payment of the amount, if
any,
payable under the Program upon his death. If Atlas is in doubt as to the right of any person
to
receive such amount, Atlas may retain such amount, without liability for any interest thereon,
until the rights thereto are determined, or Atlas may pay such amount into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the liability of
the
Program and Atlas therefor.

     Section 9. General Provisions.

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     9.1. Plan to be Unfunded. The Program is intended to constitute an unfunded
incentive compensation arrangement. Nothing contained in the Program, and no action taken
pursuant to the Program, shall create or be construed to create a trust of any kind. A
Participant’s
right to receive an Award shall be no greater than the right of an unsecured general creditor
of
Atlas. All Awards shall be paid from the general funds of Atlas, and no special or separate
fund
shall be established and no segregation of assets shall be made to assure payment of such
Awards. There shall not vest in any Participant or Beneficiary any right, title, or interest
in and
to any specific assets of Atlas.

     9.2.
Section 409A of the Code. Awards under the Program are intended to be exempt
from the requirements of Section 409A of the Code and shall be construed and administered
accordingly. Notwithstanding anything to the contrary in the Program, neither the Company, nor
any affiliate, nor the Committee, nor any person acting on behalf of the Company, any
affiliate,
or the Committee, shall be liable to any Participant or to the estate or beneficiary of any
Participant or to any other holder of an Award by reason of any acceleration of income, or any
additional tax, asserted by reason of the failure of an Award to satisfy the requirements of
Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section
9.3 shall limit the ability of the Committee or the Company to provide by separate express
written agreement with a Participant for a gross-up payment or other payment in connection
with
any such tax or additional tax.

     9.3. Rights Limited. Nothing contained in the Program shall give any Eligible
Employee the right to continue in the employment of Atlas, or limit the right of Atlas to
discharge an Eligible Employee.

     9.4. Governing Law. The Program shall be construed and governed in accordance
with the laws of the State of New York.

     9.5. Taxes. There shall be deducted from all amounts paid under the Program all
federal, state, local and other taxes required by law to be withheld with respect to such
payments.

Section 10.
Amendment, Suspension, or Termination.

     The Committee reserves the right to amend, suspend, or terminate the Program at any time.

6EX-10.15

 

Exhibit
10.15

Execution Version

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (hereinafter referred to as the
“Agreement”) is made and entered into as of the 21st day of March, 2007 by and between Ronald
A. Lane (hereinafter referred to as the “Employee”) and Atlas Air, Inc., a Delaware
corporation (hereinafter referred to as “Atlas” or the “Company”).

     WHEREAS, the Employee has been employed by the Company as Senior Vice President and Chief
Marketing Officer pursuant to that Employment Agreement dated May 1,2003, as amended on January 24,
2004 and April 20, 2004 (the “Original Employment Agreement”); and

     WHEREAS, the Employee and the Company wish to amend and restate the Original

     Employment Agreement as of the date hereof, on the terms and subject to the conditions set forth in
this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, covenant and agree as follows:

1. DEFINITIONS

     1.1 “Employment Period” shall mean the period commencing on the date hereof and
extending until December 31, 2007, subject to earlier termination as set forth in Section 4.1
below.

     1.2 “Confidential or Proprietary Information” as used herein shall refer to all
information relative to the plans, structure and practices, including information relating to its
customers, contracts and aircraft of Atlas or any affiliate or subsidiary thereof, except:

          (a) information that is or becomes a matter of public knowledge through no
fault of the Employee; or

          (b) information rightfully received by the Employee from a third party
without a duty of confidentiality; or

          (c) information disclosed to the Employee with Atlas’ prior approval for
public dissemination.

2. OBLIGATIONS OF THE EMPLOYEE

     Atlas and the Employee agree to the following rights, obligations and duties:

     2.1 Obligations of the Employee. During the Employment Period, Atlas agrees to retain the
Employee as Senior Vice President and Special Advisor. The scope of the Employee’s

 

 

responsibilities shall be determined by the Board of Directors, the Chief Executive Officer, the
Chief Operating Officer and such other officers of Atlas as the Chief Executive Officer shall deem
appropriate. The Employee shall, except when prevented by illness or permanent disability or during
a period of vacation, devote sufficient Employee business time to ensure accomplishment of the
transition projects set forth in Exhibit A and attention to the good faith performance of
the other duties contemplated by this Agreement.

     2.2 Principal Residence of the Employee. The Employee shall maintain his principal
residence in the Long Beach, California area unless otherwise agreed.

     2.3 New Position Provisions. Upon execution of this Agreement, the parties’
respective rights and obligations under the Original Employment Agreement shall be superseded
by this Agreement. The Employee hereby resigns from his prior position as Senior Vice
President and Chief Marketing Officer of the Company and its affiliates as of the commencement
of the Employment Period.

3. COMPENSATION

     During the Employment Period, Atlas will pay the Employee as follows:

     3.1 Compensation. Atlas will pay the Employee at the rate of $350,720 per annum,
payable in semi-monthly installments.

     3.2 Incentive Bonus Payments. The Employee has received his annual incentive
bonus for 2006, paid in accordance with the Company’s 2006 Annual Incentive Plan for Senior
Executives (the “2006 AIP”). The Employee will not be entitled to any bonus for 2007 whether
under the 2006 AIP or otherwise.

     3.3 Benefits. During the Employment Period, the Employee and the Employee’s
dependents shall be entitled to participate in the Atlas health insurance plans (major
medical,
dental and vision), and Atlas will contribute to the Employee’s monthly premium as provided by
such plan. Atlas reserves the right to discontinue participation in any health insurance plan
at
any time with the understanding that Atlas will comply in full measure with all state and
federal
laws regarding the changes of insurance coverage by private employers and notification under
the Consolidated Omnibus Budget Reconciliation Act. The Employee also shall be entitled, to
the same extent and at a level commensurate with other employees of Atlas, to participate in
any
other benefit plans or arrangements of Atlas.

     3.4 Restricted Shares and Options. During the Employment Period, all Company
restricted shares and stock options will continue to vest in accordance with their terms.

     3.5 Fringe Benefits. The Employee will be entitled to a car allowance in the amount
of $700.00 per month.

4. TERMINATION OF THE EMPLOYMENT PERIOD

     4.1 Termination. Employment hereunder shall be through the Employment Period;
provided, however, that the Company may immediately terminate the Employment Period with

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Cause (as defined below). “Cause” shall be defined as (i) a breach by the Employee of a material
term of this Agreement; (ii) any act of misconduct or dishonesty by the Employee; or, (ii) the
Employee’s failure to perform the transition projects set forth in Exhibit A, which may be amended
from time to time by written agreement of the parties. Provisions of this Agreement shall survive
any termination if so provided herein or if necessary or desirable to accomplish the purposes of
other surviving provisions, including without limitation the obligations of the Company under
Section 4.2 and the obligations of the Employee under Section 4.3

     4.2 Rights Following Termination. Upon termination of the Employment Period by
the Company without Cause or expiration of the Employment Period, the Employee shall be
entitled to: (i) receive the Employee’s base salary and accrued benefits through December 31,
2007; (ii) receive, subject to the Employee’s execution of a separation agreement and general
release (a true and correct copy of which is attached hereto as Exhibit B), (the “Release”),
severance of $526,080 paid in a lump sum within ten (10) days of the Employee’s execution of
the Release (and provided that the Employee does not revoke the Release); (iii) subject to
“the
Employee’s execution of the Release and compliance with the terms of Section 4.3, continued
coverage and rights and benefits available under the Atlas health insurance plans as provided
in
Section 3.3 above for a period of twenty-four (24) months immediately following the date of
termination subject to the Employee paying the same portion for the premiums for such coverage
as he paid during the Employment Period; provided, however, that any such continued
coverage
shall cease in the event the Employee obtains comparable coverage in connection with
subsequent consulting or employment arrangements, and to the extent Atlas is unable to
continue
such coverage, Atlas shall provide the Employee with economically equivalent benefits
determined on an after-tax basis; (iv) Employee’s restricted shares and options that have
vested
or will vest pursuant to the terms and conditions of their related agreements; and (v) receive
any
retired employee benefits available to retired Company employees for which he is eligible
pursuant to the terms of any applicable policies or plan documents, as amended from time to
time. Upon termination of the Employment Period for any other reason (including, without
limitation, by the Company with Cause or by the Employee for any reason), the Employee shall
be entitled only to base salary and accrued benefits through the date the Employee’s
employment
terminates.

     4.3 Restrictive Covenants.

          (a) The Employee covenants and agrees that the Employee will not, at any
time, reveal, divulge or make known to any third party any confidential or proprietary
records,
data, trade secrets, pricing policies, strategy, rate structure, personnel policy, management
methods, financial reports, methods or practice of obtaining or doing business, or any other
Confidential or Proprietary Information of Atlas or any of its subsidiaries or affiliates
(collectively the “Atlas Companies” and each, an “Atlas Company”) which is not in the
public
domain.

          (b) Acknowledging his duty of loyalty to the Atlas Companies, the Employee
agrees that, while he is employed by the Company, he will not, directly or indirectly, whether
as
owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, compete with
any of the Atlas Companies anywhere in the world or undertake any planning for any business
competitive with any of the Atlas Companies. Specifically, but without limiting the generality
of
the foregoing, the Employee agrees that, during his employment with the Company, he will not

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provide advice, services or other assistance of any kind, whether with or without compensation, to
any person or entity which competes, or is planning to compete., with any of the Atlas Companies.
The Employee understands, however, that his passive ownership of one percent (1 %) or less of the
voting stock of any publicly traded company will not be a breach of his obligations hereunder.
After his employment ends, the Employee may compete with any of the Atlas Companies, but should he
choose to so compete within the twelve (12) months immediately following termination of the
Employment Period without first obtaining the express written consent of the Company, which consent
shall not be unreasonably withheld, the Employee agrees that he will not be entitled to the payment
and benefits provided in Sections 4.2(ii) and (iii) above, and if such payment and benefits have
already been provided to the Employee, he shall return to the Company the payment under Section
4.2(ii) within five (5) days of written demand by the Company, or in the event of a dispute as to
whether the Employee has breached any of his obligations under this Section 4.3, Employee shall
return to the Company any payments received within five (5) days after determination of a breach
and in accordance with Sections 5.1, 5.2, 5.3 or 5.5, as appropriate.

          (c) The Employee acknowledges that his access to Confidential or Proprietary
Information and to the Atlas Companies’ customers and his development of goodwill on behalf
of the Atlas Companies with their customers during his employment would give him an unfair
competitive advantage were he to leave employment and begin competing with the Atlas
Companies for their existing customers and that he therefore is being granted access to
Confidential or Proprietary Information and the customers of the Atlas Companies in reliance
on
his agreement hereunder. Therefore, the Employee covenants and agrees that, during the
Employment Period and during the twelve-month period immediately following the termination
of the Employment Period, the Employee will not engage in any of the following activities
directly or indirectly, for any reason, whether for the Employee’s own account or for the
account
of any other person, firm, corporation or other organization;

	 	(i)	 	solicit, employ or otherwise interfere with any of the Atlas
Companies’ contracts or relationships with any officer, director,
employee, independent contractor or with any individual who has been
employed or associated with the Atlas Companies within the six (6)
months prior to the Employee’s termination of his employment
relationship with the Company; or
	 
	 	(ii)	 	solicit or encourage any customer of any of the
Atlas Companies to terminate or diminish its relationship with any of
the Atlas Companies or seek to persuade any such customer to conduct
with, any other person or entity any business or activity which such
customer conducts or could conduct with any of the Atlas Companies;
provided, however, that these restrictions shall apply only with
respect to those persons or entities who are customers of any of the
Atlas Companies within the twelve (12) months prior to the Employee’s
termination of his employment relationship with the Company.

          (d) In the event the Employee breaches any of his obligations under this
Section 4.3, he shall within five (5) days return to the Company any payments he received
under

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Section 4.2(ii) and any benefits under Section, 4.2(iii) shall immediately cease. In the event of a
dispute as to whether the Employee has breached any of his obligations under this Section 4.3,
Employee shall return to the Company any payments received within five (5) days after determination
of a breach and in accordance with Sections 5.1, 5.2, 5.3 or 5.5, as appropriate.

     4.4
Obligation to Cooperate. To the extent Employee is reasonably available to provide
such cooperation to Company, during the twenty-four (24) month period immediately following the
termination of the Employee’s employment, the Employee shall cooperate with the Company with
respect to all matters arising during or related to his employment, including but not limited to
all matters in connection with any governmental investigation, litigation or regulatory or other
proceeding which may have arisen or which may arise following the signing of this Agreement. The
Company will reimburse the Employee out-of-pocket expenses incurred in complying with Company
requests hereunder, provided such expenses are authorized by the
Company in advance. In the event
that any single Company request hereunder requires a commitment from
the Employee of more than five
(5) hours, the Company and the Employee shall mutually agree on reasonable compensation for the
Employee’s services on such matter.

5. DISPUTE RESOLUTION AND CHOICE OF LAW

     5.1. Negotiation. If a dispute between the parties arises under this Agreement, the
parties shall negotiate in good faith in an attempt to resolve their differences. The
obligation of
the parties to negotiate in good faith shall commence immediately, and shall continue for a
period of at least thirty (30) days (“Negotiation”).

     If Negotiation fails to resolve a dispute between the parties within the first thirty (30)
days, either party may proceed to demand mediation (“Mediation”). Upon agreement of both parties,
arbitration may be initiated immediately, in lieu of Mediation.

     5.2. Mediation. If a dispute between the parties arises under this Agreement and has
not been resolved under the Negotiation procedures described herein, either party may require,
by written notice to the other party, that Negotiation be facilitated by a single mediator, to
be
elected by the parties (the “Mediator”).

     The parties shall select the Mediator within ten (10) days after receipt of notice. If the
parties are unable to agree on the Mediator, the Mediator shall be selected by Atlas, but the
selected Mediator shall be independent of Atlas and its affiliates.
The fees of the Mediator shall
be paid by the Company.

     With the assistance of the Mediator, the parties shall continue Negotiation in good faith for
a period not to exceed thirty (30) days. If the parties are unable to reach agreement during this
period, the Mediator shall be discharged and the parties’ obligations under this Mediation section
shall be deemed satisfied.

     5.3. Arbitration. Subject to the duty to negotiate and mediate set forth above, all
disputes, claims, or causes of action arising out of or relating to this Agreement or the
validity,
interpretation, breach, violation, or termination thereof not resolved by Mediation, shall be
finally and solely determined and settled by arbitration, to be conducted in the State of New

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York, USA, in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) in effect at the date of arbitration (“Arbitration”).

     Any Arbitration commenced pursuant to this Agreement shall be conducted by a single neutral
arbitrator, who shall have a minimum of three (3) years of commercial experience (the
“Arbitrator”). The parties shall meet within ten (10) days of failure to resolve by Mediation to
attempt to agree on an Arbitrator. Absent agreement at this meeting, the Arbitrator shall be
selected by AAA. Such Arbitrator shall be free of any conflicts with Atlas and shall hold a hearing
within thirty (30) days of the notice to the Employee.

     If the terms and conditions of this Agreement are inconsistent with the Commercial
Arbitration Rules of the AAA, the terms and conditions of this Agreement shall control.

     The parties hereby consent to any process, notice, or other application to said courts and any
document in connection with Arbitration may be served by (i) certified mail, return receipt
requested; (ii) by personal service; or (iii) in such other manner as may be permissible under the
rules of the applicable court or Arbitration tribunal; provided, however, a reasonable time
for appearance is allowed. The parties further agree that Arbitration proceedings must be
instituted within one (1) year after the occurrence of any dispute, and failure to initiate
Arbitration proceedings within such time period shall constitute an absolute bar to the institution
of any proceeding and a waiver of all claims.

     The parties shall equally divide all costs and expenses incurred in such arbitration
proceeding, provided, however, if the arbitrator rules in favor of the Employee on all
or substantially all of his claims, the Company shall reimburse the Employee his reasonable
attorney fees and costs associated with the arbitration proceedings.

     The Judgment of the Arbitrator shall be final and either party may submit such decision to
courts for enforcement thereof.

     The parties agree that this Section 5 shall be specifically enforceable.

     5.4. Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to principles of conflict of laws.

     5.5 Injunctive Relief. Notwithstanding the foregoing, Sections 5.1, 5.2 and 5.3 shall not
preclude the Company from attempting to pursue a court action to enforce, determine the
enforceability of, or seek injunctive relief due to a breach or threatened breach of the provisions
of Section 4.3 of this Agreement.

6. SEVERABILITY AND ENFORCEABILITY

     It is expressly acknowledged and agreed that the covenants and provisions hereof are
separable; that the enforceability of one covenant or provision shall in no event affect the full
enforceability of any other covenant or provision herein. Further, it is agreed that, in the event
any covenant or provision of this Agreement is found by any court of competent jurisdiction or
Arbitrator to be unenforceable, illegal or invalid, such invalidity, illegality or unenforceability

6

 

shall not affect the validity or enforceability of any other covenant or provision of this
Agreement. In the event a court of competent jurisdiction or an Arbitrator would otherwise hold any
part hereof unenforceable by reason of its geographic or business scope or duration, said part
shall be construed as if its geographic or business scope or duration had been more narrowly
drafted so as not to be invalid or unenforceable.

7. NOTICE

For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given if delivered personally,
if delivered by overnight courier service, if sent by facsimile transmission or if mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to the respective
addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set
forth below, or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon receipt;
provided, however, that: (i) notices sent by personal delivery or overnight courier shall
be deemed given when delivered; (ii) notices sent by facsimile transmission shall be deemed given
upon the sender’s receipt of confirmation of complete transmission; and (iii) notices sent by
United States registered mail shall be deemed given, two days after the date of deposit in the
United States mail.

If to the Company:

Atlas Air, Inc. 
2000
Westchester Avenue

Purchase, NY 10577 
Attn:
General Counsel

Facsimile: 1 914 701-8333

If to Employee:

Ronald A. Lane

The address on file with the records of the Company

8. MISCELLANEOUS

     8.1. No Mitigation. The Employee shall have no duty to mitigate..

     8.2. Withholding. The Company shall be entitled to withhold from the payments and
benefits described herein all income taxes and other amounts required to be withheld by
applicable law.

     8.3.
Pro-Ration. In the event the Employment Period is terminated in the middle of
any calendar month, the amount due for such month shall be pro-rated on a daily basis,

7

 

     8.4. No Waiver Except in Writing. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered a waiver of
such party’s rights or deprive such party of the right thereafter to insist upon strict
adherence to
that term or any other term of this Agreement. No waiver or modification of this Agreement or
any of the terms and conditions set forth herein shall be effective unless submitted to a
writing
duly executed by the parties.

     8.5. Drafting. Both parties have participated in the preparation of this Agreement, and
no rules of construction or interpretation based upon which party drafted any portion of the
Agreement shall be applicable or invoked.

     8.6. No Representations. The parties agree and acknowledge that they have not relied
upon any representation, whether written or oral, of the other party in connection with
entering
into this Agreement.

     8.7. Successors and Assigns. This Agreement shall be binding on Atlas and any
successor thereto, whether by reason of merger, consolidation or otherwise. The duties
and
obligations of the Employee may not be assigned, by the Employee.

     8.8. Confidentiality of Terms. Atlas and the Employee agree that the terms and
conditions of this Agreement are confidential and that they will not disclose the terms of
this
Agreement to any third parties, other than the Employee’s spouse, their attorneys, auditors,
accountants or as required by law or as may be necessary to enforce this Agreement.

     8.9. Full Understanding. The Employee declares and represents that the Employee has
carefully read and fully understands the terms of this Agreement, has had the opportunity to
obtain advice and assistance of counsel with respect thereto, and knowingly and of the
Employee’s own free will, without any duress, being fully informed and after due deliberation,
voluntarily accepts the terms of this Agreement and represents that the execution, delivery
and
performance of this Agreement does not violate any agreement to which the Employee is subject.

     8.10. Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and supersedes all
prior agreements, arrangements, and understandings between the parties with respect to the
subject matter hereof, excluding only any option of restricted share agreements or other
agreements related to a grant of equity or an option to purchase equity in the Company.

     8.11. Counterparts. This Agreement may be executed in any number of separate
counterparts, all of which taken together shall be deemed to constitute one and the same
instrument.

[Signature page follows]

8

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Employment
Agreement on the date and year first above written.

	 	 	 	 	 
	RONALD A. LANE

 	 
	/s/ Ronald A. Lane
 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	ATLAS AIR, INC.

 	 
	By:  	/s/
Willliam J. Flynn
 	 
	Name:  	WILLLIAM J. FLYNN	 
	Title:  	PRESIDENT & CEO 	 

9

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