Document:

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                                                                    Exhibit 10.1

                           SECOND AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

     This Second Amended and Restated Employment Agreement (hereinafter referred
to as the "Agreement"), between World Airways, Inc., a Delaware corporation
(hereinafter referred to as "World"), and Hollis L. Harris, an individual and
resident of Georgia (hereinafter referred to as "Harris"), is entered into as of
the 1st day of June, 2000, and restates, amends, and replaces in its entirety,
without a break in continuity, the Amended and Restated Employment Agreement
dated July 8, 1999 between the parties.

     WHEREAS, the parties wish to extend the term of Harris's employment as
World's Chief Executive Officer and Chairman of the Board of Directors on the
terms and subject to the conditions set forth herein, and

     WHEREAS, Harris requires, as an essential condition to the extension of his
term of employment, that the vesting provisions of his nonqualified stock option
to purchase up to 900,000 shares of World's common stock, granted April 2, 1999
and amended July 28, 1999, be modified, and

     WHEREAS, those vesting provisions generally defer exercisability of the
option until January 1, 2007, unless World's common stock is publicly traded and
the Fair Market Value of the common stock, during any 20 consecutive trading
days, earlier exceeds $2.00 per share (as to 100,000 option shares), equals or
exceeds $4.00 per share (as to 200,000 option shares), equals or exceeds $8.00
per share (as to 400,000 option shares), or equals or exceeds $10.00 per share
(as to the remaining 200,000 option shares), and

     WHEREAS, the Compensation Committee of World's Board of Directors, and the
Board of Directors itself, have reviewed those vesting provisions, in light of
the terms of this Agreement, the employment opportunities available to Harris,
the employment needs of World, and the likelihood that the Fair Market Value of
World's common stock, prior to January 1, 2007, will equal or exceed the
benchmarks set forth above, and have concluded that the vesting provisions
currently in effect detract from World's ability to attract and retain Harris or
an executive of comparable ability as World's Chief Executive Officer and
Chairman of the Board of Directors, and

     WHEREAS, World and Harris have therefore agreed to amend Harris's
nonqualified stock option to modify the vesting provisions.

     NOW, THEREFORE, World and Harris, in consideration of the foregoing and
other mutual covenants and promises contained herein, the sufficiency of which
are hereby acknowledged, hereby agree as follows:

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     1.  Acceptance of Employment.  Subject to the terms and conditions set
         ------------------------
forth below, World agrees to employ Harris and Harris accepts such employment.

     2.  Term.  The period of employment shall be from May 1, 1999, through
         ----
December 31, 2002, unless further extended or sooner terminated as hereinafter
set forth.  In the absence of notice, this Agreement shall be renewed on the
same terms and conditions for one year from the date of expiration.  Not later
than June 30, 2001, Harris shall initiate discussions with World's Board of
Directors (hereinafter "Board") regarding the renewal of this Agreement.  At
that time, if Harris wishes to renew this Agreement on different terms, Harris
shall give written notice to the Chairman of the Executive Committee of the
Board.  If the Board does not wish to renew this Agreement at its expiration, or
wishes to renew on different terms, the Board shall give written notice to
Harris no later than June 30, 2001.

     3.  Position and Duties.  Harris shall continue to serve as Chief Executive
         -------------------
Officer and Chairman of the Board with the duties performed as of June 1, 1999,
as those duties may be changed from time to time. The Board will have reasonable
latitude to make changes in Harris's responsibilities, except that Harris's
responsibilities may not be modified in a way that would be inconsistent with
the status of Chief Executive Officer and Chairman of the Board.  Following a
Change of Control (as hereinafter defined), Harris's responsibilities may not be
changed without mutual agreement.  Harris agrees to render his services to the
best of his abilities and will comply with all policies, rules and regulations
of World and will advance and promote to the best of his ability the business
and welfare of World.  Harris shall devote all of his working time, attention,
knowledge and skills solely to the business and interest of World.  Harris may
not accept any other engagement with or without compensation which would affect
his ability to devote all of his working time and attention to the business and
affairs of World without the prior written approval of the Board pursuant to a
resolution duly adopted by the affirmative vote of a majority of the entire
membership of the Board, excluding the vote of Harris.  Harris agrees to accept
assignments on behalf of World or affiliated companies commensurate with his
responsibilities hereunder, except that the terms and conditions of assignments
exceeding 60 consecutive days outside the Washington, DC metropolitan area will
require mutual agreement.

     4.  Compensation and Related Matters.
         --------------------------------

          (a) Base Salary.  Harris shall receive a minimum salary of $350,000
              -----------
per annum payable in accordance with the payroll procedures for World's salaried
employees in effect during the term of this Agreement.

          (b) Performance Stock Options.  Harris has been granted (i) 100,000
              -------------------------
options to purchase World's Common Stock, par value $.001 per share ("World
Airways Common Stock") pursuant to the 1995 World Airways Stock Option Plan (the
"Plan") as set forth in the

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Stock Option Agreement between World and Harris dated April 2, 1999 (the "Option
Agreement No.1"), and (ii) 900,000 options to purchase World's Common Stock
pursuant to the 1999 Chief Executive Stock Option Plan (the "CEO Plan") as set
forth in the Stock Option Agreement between World and Harris dated April 2, 1999
(the two option grants together referred to as the "Options"). In the event of a
Change in Control as defined below, all Options granted shall be immediately
exercisable.

          (c) Equity Ownership.  The parties acknowledge that Harris's
              ----------------
obligation to purchase $100,000.00 worth of common stock or debentures of World
has been satisfied and discharged.

          (d) Business Expenses.  Harris shall be entitled to reimbursement of
              -----------------
reasonable business related expenses from time to time consistent with World's
policies, including, without limitation, submitting in a timely manner
appropriate documentation of such expenses.

          (e) Fringe Benefits.  Harris shall be entitled to participate in all
              ---------------
employee benefit plans made available from time to time to all executives of
World in accordance with the terms of such plans.  In the event this Agreement
is terminated by either party for any reason other than death or for cause,
Harris may participate in World's health and other benefit programs for a period
of one year from the date of Harris's termination, or until Harris obtains
comparable coverage, whichever is earlier.

          (f) Personnel Policies, Conditions and Benefits.  Except as otherwise
              -------------------------------------------
provided herein, Harris's employment shall be subject to the personnel policies
and benefits plans which apply generally to World's employees as the same may be
interpreted, adopted, revised or deleted from time to time, during the term of
this Agreement, by World in its sole discretion.  While this Agreement is in
effect, Harris shall accrue vacation at the rate of one month per year and such
vacation shall be taken in accordance with the World's procedures.

          (g) Indemnification; D&O Insurance.  Subject to Section 6(f) of this
              ------------------------------
Agreement, World shall provide (or cause to be provided) to Harris
indemnification against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlements in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (including an action by or in the right of World) by reason of
his being or having been an officer, director or employee of World or any
affiliated entity, advance expenses (including attorneys' fees) incurred by
Harris in defending any such civil, criminal, administrative or investigative
action, suit or proceeding  and maintain directors' and officers' liability
insurance coverage (including coverage for securities-related claims) upon
substantially the same terms and conditions as set forth in the Indemnification
Agreement dated April 15, 1999, between Harris and World Airways, Inc. (the
"Indemnity Agreement").

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     5.  Termination of Employment.
         -------------------------

          (a) Death.  Harris's employment hereunder shall terminate upon his
              -----
death, in which event World shall have no further obligation to Harris or his
estate with respect to compensation, other than the disposition of life
insurance and related benefits and accrued and unpaid base salary and incentive
compensation, if any, for periods prior to the date of termination pursuant to
the terms of the respective employee benefits and incentive compensation plans
then in effect.

          (b) By World for Disability.  If Harris incurs a disability and such
              -----------------------
disability continues for a period of twelve (12) consecutive months, then World
may terminate this Agreement upon written notice to Harris, in which event World
shall have no obligation to Harris with respect to compensation under Section
4(a) of this Agreement.  The term "disability" means a physical or mental
illness that will prevent Harris from performing the essential functions of his
job for at least twelve (12) months or is likely to result in death.  If Harris
becomes entitled to Social Security benefits payable on account of disability,
he will be deemed conclusively to be disabled for purposes of this Agreement.

          (c) By World for Cause.  (i) Except under the circumstances set forth
              ------------------
in Section 5(c)(ii) below, the Chairman of the Executive Committee of the Board
pursuant to a resolution duly adopted by the affirmative vote of a majority of
the entire membership of the Board, excluding the vote of Harris, at a meeting
of the Board may terminate this Agreement, subject to Section 6(f) and those
provisions that survive this Agreement, for Cause.  "Cause" shall be defined as
(A) sustained performance deficiencies which are communicated to Harris in
written performance appraisals and/or other written communications (including,
but not limited to memos and/or letters) by the Chairman of the Executive
Committee of the Board pursuant to a resolution duly adopted by the affirmative
vote of a majority of the entire membership of the Board, excluding the vote of
Harris, (B) gross misconduct, including significant acts or omissions
constituting dishonesty, intentional wrongdoing or malfeasance, whether or not
relating to the business of World, (C) commission of a felony or any crime
involving fraud or dishonesty, or (D) a material breach of this Agreement.

     (ii) In the event of a Change of Control, as defined below, Harris may only
be terminated for Cause pursuant to a resolution duly adopted pursuant to a
resolution duly adopted by the affirmative vote of a majority of the entire
membership of the Board, excluding the vote of Harris, at a meeting of the Board
finding that, in the good faith opinion of the Board, Harris was guilty of
conduct set forth in Section 5(c)(i)(A), (B), (C) or (D) provided, however, that
Harris may not be terminated for Cause hereunder unless:  (1) Harris receives
prior written notice of World's intention to terminate this Agreement for Cause
and the specific reasons therefor; and (2) Harris has an opportunity to be heard
by World's Board and be given, if the acts are correctable, a reasonable
opportunity to correct the act or acts (or non-action) giving rise to such
written notice.  If the Board by resolution duly adopted by the affirmative vote
of a majority of the entire membership of the Board finds that Harris fails to
make such correction after reasonable opportunity to do so, this Agreement may
be terminated for Cause.

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          (d) By World for Other Than Cause.  In the event the Board terminates
              -----------------------------
this Agreement for reasons other than Cause or Disability as defined in sub-
paragraph (c) above, World will pay to Harris within ten (10) days of notice of
termination (or, in the case of incentive bonus compensation, if any, within ten
(10) days of determination of amounts payable under the applicable bonus plan)
twenty-four month's base salary, in each case including deferred salary and/or
bonus compensation, if any, payable under this Agreement.  In addition, all
granted but unvested stock Options shall become immediately exercisable.  In the
event that any payment to Harris under this paragraph is subject to any federal
or state excise tax, World shall pay to Harris an additional amount equal to the
excise tax imposed including additional federal and state income and excise
taxes as a result of the payments under this paragraph, and such payment will be
made when the excise tax and income taxes are due; provided, however, that
                                                   --------  -------
Harris agrees to assist World by using his best efforts to structure matters so
that any payment to Harris under this paragraph is not subject to any federal or
state excise tax.  Whether an excise tax is payable, and the amount of the
excise tax and additional income taxes payable, shall be determined by World's
accountants and World shall hold Harris harmless for any and all taxes,
penalties, and interest that may become due as a result of the failure to
properly determine that an excise tax is payable or the correct amount of the
excise tax and additional income taxes, together with all legal and accounting
fees reasonably incurred by Harris in connection with any dispute with any
taxing authority with respect to such determinations and/or payments.  In the
event of a disagreement between World and Harris as to whether the termination
was for Cause, that issue shall be submitted by Harris within twenty (20) days
of the notice of termination to binding arbitration, or any objection to World's
determination that termination is for Cause shall be waived.

          (e) By Harris for Good Reason.  Harris may terminate his employment
              -------------------------
hereunder (for purposes of  this Agreement "Good Reason") after giving at least
30 days notice in the event that, without Harris's consent:  (i) World relocates
its general and administrative offices or Harris' place of employment to an area
other than the Washington, D.C. or Atlanta, Georgia Standard Metropolitan
Statistical Area, (ii) he is assigned any duties substantially inconsistent with
Section 3 hereof, (iii) World reduces his annual base salary as in effect on the
date hereof or as the same may be increased from time to time;  (iv) World
fails, without Harris' consent, to pay Harris any portion of his current
compensation, or to pay him any portion of an installment of deferred
compensation under any deferred compensation program of World, within seven (7)
days of the date such compensation is due;  (v)  World fails to continue in
effect any compensation plan in which Harris participates which is material to
Harris's total compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan,
or to continue Harris's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of Harris's participation relative to
other participants;  (vi) World fails to continue to provide Harris with
benefits substantially similar to those enjoyed by Harris under any of World's
pension, life insurance, medical, health and accident, or disability plans in
which Harris was participating, or World takes any action which would directly
or

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indirectly materially reduce any of such benefits or deprive Harris of any
material fringe benefit enjoyed by Harris; (vii) World terminates, or proposes
to terminate, Harris's employment hereunder contrary to the requirements of
Section 5(c) hereof (for purposes of this Agreement, no such termination or
purported termination shall be effective) and Harris has submitted the matter to
arbitration, as set forth in Section 5(d); or (viii) the Board approves the
liquidation or dissolution of World prior to the end of this Agreement. In the
event that Harris decides to terminate this Agreement and his employment with
World or any successor in interest in accordance with the provisions of this
Section 5(e), World shall have the same obligations as set forth in Section 5(d)
hereof. Any other payments due or actions required under this paragraph shall be
made as lump sums or taken within 10 days of termination of the Agreement.

          (f) By Harris for Other Than Good Reason.  Notwithstanding the above,
              ------------------------------------
Harris may upon giving reasonable notice, not to be less than six months,
terminate this Agreement without further obligation on the part of Harris or
World.

          (g) Changes of Control.  For purposes of this Agreement, a "Change of
              ------------------
Control" includes the occurrence of any one or more of the following events:

              (i) any Person, other than the World, is or becomes the Beneficial
Owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of securities of World
representing more than 50% of the combined voting power of World's then
outstanding securities; or

              (ii) during any period of two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board of World and any new director
(other than a director designated by a Person who has entered into an agreement
with World to effect a transaction described in clause (i), (iii) or (iv) or
this Section 5 (f)) whose election by the Board of World or nomination for
election by the stockholders of World was approved by a vote of at least two-
thirds (2/3) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

              (iii) the shareholders of World approve a merger or consolidation
of World with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of World outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or being
converted into voting securities of the surviving entity), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of World or any of its affiliates, at least 50% of the
combined voting power of the voting securities of World or such surviving entity
outstanding immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of World (or similar
transaction) in which no Person acquires more than 50% of the combined voting
power of World's then outstanding securities; or

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              (iv) the shareholders of World approve a plan of complete
liquidation of World or an agreement for the sale or disposition by World of all
or substantially all of World's assets.

          (h) "Person" Defined.  For purposes of this Section, "Person" shall
              ----------------
have the meaning given in Section (3)(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof; however, a Person shall not include
(i) World or WorldCorp, Inc. or any of their subsidiaries or affiliates; (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
World or WorldCorp, Inc. or any of their subsidiaries; (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities; or
(iv) a corporation owned, directly or indirectly, by the stockholders of World
or WorldCorp, Inc. in substantially the same proportions as their ownership of
stock of World or WorldCorp, Inc.

          (i) Notice of Termination.  Termination of this Agreement by World or
              ---------------------
termination of this Agreement by Harris shall be communicated by written notice
to the other party hereto, specifically indicating the termination provision
relied upon.

          (j) World Property.  At the termination of Harris's employment,
              --------------
whether such termination is voluntary or involuntary, Harris shall return all
World property, including without limitation all electronic and paper files and
documents and all copies thereof.

     6.  Confidentiality/Restrictive Covenant.  (a)  Harris recognizes and
         ------------------------------------
acknowledges that he will acquire during his employment with World information
that is confidential to World and that represents valuable, special and unique
assets of World ("Confidential Information").  Such Confidential Information
(whether or not reduced to tangible form) includes, but is not limited to: trade
secrets; financing documents and information; financial data; new product
information; copyrights; information relating to schedules and locations; cost
and pricing information; performance features; business techniques; business
methods; business and marketing plans or strategies; business dealings and
arrangements; business objectives; customer information; sales information;
acquisition, merger or business development plans or strategies; research and
development projects; legal documents and information; personnel information;
and any and all other information concerning World's business and business
practices that is not generally known or made available to the public or to
World's competitors which, if misused or disclosed, could adversely affect the
business of World.  Harris agrees that he will not, during employment with World
and for a period of two (2) years following termination of employment for any
reason, whether voluntary or involuntary, with or without Cause, directly or
indirectly:

     (i)  disclose any Confidential Information to any person, World or other
          entity (other than authorized persons employed by or affiliated with
          World who, in the interest of World, have a business need to know such
          information), or

     (ii) use any Confidential Information in any way, except as required by his
          duties to

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          World or by law, unless he obtains World's prior written approval of
          such disclosure or use. World's rights under this Section shall be
          cumulative to, and shall not limit, World's rights under the Virginia
          Uniform Trade Secrets Act or any other state or federal trade secret
          or unfair competition statute or law. The parties hereto stipulate
          that as between them, the foregoing matters are important, material,
          and confidential and gravely affect the successful conduct of the
          business of World, and World's good will, and that any breach of the
          terms of this paragraph shall be a material breach of this Agreement.

     (b) While employed by World and for a period of two (2) years following
termination of employment for any reason, whether voluntary or involuntary, with
or without Cause, Harris agrees that he will not, directly or indirectly, either
as principal, agent, employee, employer, owner, stockholder (owning more than 5%
of a corporation's shares), partner, contractor, consultant or in any other
individual or representative capacity:

          (i)  Request, induce or attempt to induce any customer of World: (A)
to terminate or curtail any business relationship with World or (B) to establish
or attempt to establish a similar business relationship with a person or entity
other than World;

          (ii) Solicit, cause, encourage or in any way assist any person or
entity to solicit, any aviation business from any person or entity who at such
time is, or within the preceding twelve (12) months, had been a customer of
World, unless such customer of World was also already a customer of such other
person or entity on the date of Harris's termination;

          (iii)  Induce or attempt to induce any of World's officers, directors,
or employees to terminate their employment or relationship with World, or induce
or attempt to induce any such persons to provide aviation-related services or
services similar to those they provide for World for any other person, firm or
organization.

     (c) Harris agrees that the restrictions set forth in this Agreement are
reasonable, proper, and necessitated by legitimate business interests of World
and do not constitute an unlawful or unreasonable restraint upon Harris's
ability to earn a livelihood.  The parties agree that in the event any of the
restrictions in this Agreement are found to be overbroad or unreasonable by a
tribunal or court of competent jurisdiction, the parties agree that this
Agreement should be enforced to the maximum extent allowed by applicable law,
and the parties authorize and request such court or tribunal to determine the
maximum time, geographic area, activity and other applicable limitations
allowable by law and to reform the applicable provisions to such maximum
limitations.

     (d) Harris acknowledges that it may be impossible to assess the monetary
damages incurred by his violation of this Agreement, or any of its terms, and
that any threatened or actual violation or breach of this Agreement, or any of
its terms, will constitute immediate and irreparable injury to World.
Therefore, Harris expressly agrees that, in addition to any and all

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monetary damages and other remedies and relief available to World as a result of
Harris's violation or breach of this Agreement, World shall be entitled to an
injunction restraining Harris from violating or breaching this Agreement, or any
of its terms (and no bond or other security will be required in connection
therewith); World will be entitled to specific performance of this Agreement;
and World will be entitled to recover its reasonable attorneys' fees and costs
incurred to enforce, or prosecute or defend any action relating to, this
Agreement. In the event World enforces this Agreement through court order or
other decree, Harris agrees that the restrictions contained in this Agreement
shall remain in effect for a period of twenty four (24) consecutive months from
the effective date of such order or decree enforcing the Agreement.

     (e) Section 9 of this Agreement, relating to arbitration, shall not apply
to this Section 6.  The parties agree that any dispute between them relating to
or involving this Section 6, including without limitation, any question
concerning the construction, validity, application, interpretation or alleged
breach or threatened breach of this Section 6, shall be litigated in a court in
the state in which World maintains its principal executive offices.

     (f) Section 4(h) of this Agreement and any other indemnity agreements
between Harris and World shall not apply to actions, suits or proceedings to
enforce World's rights under, or that otherwise relate to, this Agreement,
including without limitation, this Section 6.

     (g) References in this Section 6 to "World" include World Airways, Inc. and
any and all of its current or future parents, subsidiaries, affiliated
companies, and divisions.

     7.  Beneficiary.  The Beneficiary of any payment due and payable at the
         -----------
time of Harris's death, or otherwise due upon his death, shall be such person or
persons as Harris shall designate in writing to World.  If no such beneficiary
shall survive Harris, any such payments shall be made to his estate.

     8.  Intellectual Property.  (a) Any improvements, new techniques,
         ---------------------
processes, inventions, works, discoveries, products or copyrightable or
patentable materials made or conceived by Harris, either solely or jointly with
other person(s), (1) during Harris's period of employment by World, during
working hours; (2) during the period after termination of his employment during
which he is retained by World as a consultant; or (3) with use of World's
intellectual property or Confidential Information, shall be the sole and
exclusive property of World without royalty or other consideration to Harris.

         (b) Harris agrees to inform World promptly and in full of such
intellectual property by a full written report setting forth in detail the
procedures used and the results achieved.

         (c) Harris shall at World's request and expense execute any and all
applications, assignments, or other instruments which World shall deem necessary
to apply for, register, and/or obtain copyrights or Letters Patent of the United
States or of any foreign country,

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or to otherwise protect World's interests in such intellectual property.

         (d) Harris shall assign and does hereby assign to World all interests
and rights, including but not limited to copyrights, in any such intellectual
property.

     9.   Arbitration.  Except as described in Section 6, above, any dispute or
          -----------
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration, under the commercial arbitration rules of the
American Arbitration Association.  The prevailing party in any such arbitration,
or any court action to enforce or vacate an arbitration award, shall be entitled
to its costs and reasonable attorneys fees from the other party.

     10.  No Waiver.  The failure of either party at any time to enforce any
          ---------
provisions of this Agreement or to exercise any remedy, option, right, power or
privilege provided for herein, or to require the performance by the other party
of any of the provisions hereof, shall in no way be deemed a waiver of such
provision at the same or at any prior or subsequent time.

     11.  Governing Law.  All questions concerning the construction, validity,
          -------------
application and interpretation of this Agreement shall be governed by and
construed in accordance with the laws of the State of Virginia without giving
effect to any choice of law or conflict of law provision or rule (whether of
Virginia or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than Virginia.  Harris agrees to submit to personal
jurisdiction in the state in which World maintains its principal executive
offices.

     12.  Validity.  The invalidity or unenforceability of any provision or
          --------
provisions of this Agreement shall not be deemed to affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.

     13.  Successors.  This Agreement shall inure to the benefit of and be
          ----------
binding upon World, its successors and assigns, including any corporation or
other business entity which may acquire all or substantially all of World's
assets or business, or within which World may be consolidated or merged, or any
surviving corporation in a merger involving World.

     14.  Waiver of Modification of Agreement.  No waiver or modification of
          -----------------------------------
this Agreement shall be valid unless in writing and duly executed by both
parties.

     15.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each  of which together will constitute one and the same
instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

                         WORLD AIRWAYS, INC.

                         By:  ____________________________
                              Chairman, Executive Committee

                              _____________________________
                              Hollis L. Harris

                                       10P & F INDUSTRIES, INC.
                                  EXHIBIT 10.3
                              CONSULTING AGREEMENT

      AGREEMENT, effective as of November 1, 2000, between P & F INDUSTRIES,
INC., a Delaware corporation (the "Company") having its principal place of
business at 300 Smith Street, Farmingdale, New York 11735, and SIDNEY HOROWITZ,
residing at 20596 Links Circle, Boca Raton, Florida 33434 (the "Consultant").

                               W I T N E S S E T H
                               - - - - - - - - - -

      WHEREAS, the Company recognizes the value of the experience, training and
background of the Consultant;

      WHEREAS, the Company wishes to utilize the Consultant's expertise and
background regarding the Company; and

      WHEREAS, the Company and the Consultant wish to replace the Consulting
Agreement, dated as of November 1, 1998, between the parties hereto, with this
Agreement.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, it is agreed by and between the parties hereto as
follows:

      1. Term of Service

      The term of the Consultant's service pursuant to this Agreement will
commence on the effective date hereof and will terminate on October 31, 2003
(the "Consulting Term").

      2. Consulting Arrangements

      2.1. The Consultant's services hereunder shall be rendered at such place
or places and times, on such subjects and in such manner as shall be
satisfactory to him. The Company shall pay the Consultant during the Consulting
Term a consulting fee, on a monthly basis in advance, at the rate of $75,000 per
annum.

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      2.2. During the Consulting Term, the Consultant shall be entitled to all
benefits and service credit for benefits under medical insurance, life insurance
and other employee benefit plans, programs and arrangements of the Company as if
he were still employed during such period under this Agreement, to the extent
that such benefits and service credit are available to consultants to the
Company generally under the terms thereof.

      3. Events of Termination

      In the event of the Consultant's death, this Agreement will terminate and
the Consultant shall receive his full consulting fee through the date of death.

      4. Protection of Information

      4.1. In view of the fact that the Consultant's work with the Company will
bring him into close contact with many confidential affairs of the Company,
including matters of a business nature such as information about costs, profits,
markets, sales, plans for future development and other information not readily
available to the public, the Consultant will:

            4.1.1. keep secret all confidential information relating to the
Company and not disclose such information to anyone outside of the Company
either during or after his service with the Company, except with the Company's
prior written consent; and

            4.1.2. deliver promptly to the Company on termination of his
services hereunder, or at any time the Company may so request, all memoranda,
notes, records, lists, reports and other documents (and all copies thereof)
relating to the business of the Company, which he may then possess or have under
his control.

      5. Miscellaneous

      5.1. If any provision contained in this Agreement is hereafter construed
to be invalid or unenforceable, such event will not affect the remainder of this
Agreement, which will be given full effect, without regard to the invalid
portions.

                                       2
<PAGE>

      5.2. If any covenant contained in Article 4, or any part thereof, is held
to be unenforceable because of the duration or scope of such provision or the
area covered thereby, the parties agree that the court making such determination
will have the power to reduce the duration, scope and/or area of such provision
and, in its reduced form, such provision will then be enforceable.

      5.3. This Agreement has been negotiated and executed in the State of New
York, and will be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely in
New York.

      5.4. All notices, requests, consents and other communications required or
permitted to be given hereunder will be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid telegram, or mailed
first class, postage prepaid, by registered or certified mail (if possible),
addressed to either party at the address set forth in the preamble to this
Agreement (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith).

      5.5. The article headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.

      5.6. This Agreement sets forth the entire agreement and understanding of
the parties relating to the subject matter hereof, and supersedes and will
supersede all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof between the Consultant and the
Company.

                                       3
<PAGE>

            5.6.1. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended and the terms or covenants hereof may be waived
only by a written instrument executed by each of the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof will in no
manner affect the right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, will be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.

      IN WITNESS WHEREOF, the parties have duly executed this Agreement this
12th day of October effective as of the date first above written.

                                    P & F INDUSTRIES, INC.

                                    By:
                                         -----------------------------------
                                         Name:  Richard Horowitz
                                         Title: President

                                    By:
                                         -----------------------------------
                                         Name:  Sidney Horowitz

                                       4

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