EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement") is
dated as of June 1, 1998, between First Aviation Services Inc. ("FAvS" or "the
Company"), and Xxxxxx X. Xxxxxx, an individual (the "Executive").
WITNESSETH:
WHEREAS, the Company believes that the Executive will be a
valued employee of the Company and wishes to secure his employment with the
Company and document the terms of the Executive's employment by the Company.
WHEREAS, the Company also has determined that it is in the
best interests of the Company and its shareholders to reinforce and encourage
the continued attention and dedication of certain key members of the Company's
management, including the Executive, to their assigned duties without
distraction in uncertain circumstances arising from the possibility of a change
in control of the Company.
NOW, THEREFORE, taking into account the foregoing and in
consideration of the mutual promises and conditions contained herein, the
parties hereto agree as follows:
I
EMPLOYMENT
.1 Employment. The Company employs the Executive and the
Executive hereby accepts employment as a vice president upon the terms and
conditions hereinafter set forth.
.2 Term. The employment of the Executive by the Company under
the terms and conditions of this Agreement will commence on the date hereof and
continue, subject to Article IV hereof, for a period of three years ("Employment
Term").
.3 Executive Duties. As a vice president of the Company, the
Executive shall perform such duties as are requested by and shall report
directly to the Company's Senior Vice President. The Executive agrees to devote
his full business time (with allowances for vacations and sick leave) and
attention and best efforts to the affairs of the Company during the Employment
Term. Executive shall not, while an employee of the Company, directly or
indirectly, be engaged (including as a stockholder, proprietor, general partner,
limited partner, trustee, consultant, employee, director, officer, lender,
investor or otherwise) in any business or activity that is competitive with that
of the Company or any of its subsidiaries or affiliates.
II
COMPENSATION AND BENEFITS
.1 Annual Salary. During the Employment Term, the Company
shall pay to the Executive a base salary at the rate of One Hundred Fifty
Thousand Dollars ($150,000) per year (the "Annual Salary"), payable in
substantially equal biweekly installments. The Company will review annually and
may, in the sole discretion of the Board of Directors of the Company, increase
such base salary in light of the Executive's performance, inflation in cost of
living or other factors.
.2 Benefits. Subject to the sole discretion of the Board of
Directors, during the Employment Term, the Executive may be permitted to
participate in and be covered under any and all such performance, bonus, profit
sharing, incentive stock option, and other compensation plans and such medical,
dental, disability, life, and other insurance plans and such other benefits
generally available to other employees of the Company in similar employment
positions, as the Board of Directors shall determine, subject to meeting
applicable eligibility requirements (collectively referred to herein as the
"Company Benefit Plans").
.3 Reimbursement of Expenses. The Executive shall be entitled
to receive prompt reimbursement of all reasonable expenses incurred by the
Executive in performing services hereunder, including all reasonable expenses of
travel, entertainment and living expenses while away from home on business at
the request of, or in the service of, the Company, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company.
.4 Vacation and Holidays. The Executive shall be entitled to
an annual vacation leave of three (3) weeks at full pay or such greater vacation
benefits as may be provided for by the Company's vacation policies applicable to
senior executives of the Company. Up to a maximum of one week of vacation time
may be accumulated and carried over from one year to the next. Executive shall
be entitled to such holidays as are established by the Company for all
employees.
III
CONFIDENTIALITY AND NONDISCLOSURE
.1 Confidentiality. Executive shall not, during Executive's
employment by the Company or thereafter, at any time disclose, directly or
indirectly, to any person or entity or use for Executive's or any other person's
or entity's benefit any trade secrets or confidential information relating to
the Company, its subsidiaries' or affiliates' businesses, operations, marketing
data, business plans, strategies, employees, products, prices, negotiations and
contracts with other companies, or any other subject matter pertaining to the
business of the Company or its subsidiaries or affiliates or any of their
respective clients, customers, suppliers, consultants, or licensees, known,
learned, or acquired by Executive during the period of Executive's employment by
the Company (collectively "Confidential Information"), except as may be
necessary in the ordinary course of performing Executive's particular duties as
an employee of the Company.
.2 Return of Confidential Material. Executive shall promptly
deliver to the Company on termination of Executive's employment by the Company,
whether or not for Cause, or at any time the Company may so request, all
correspondence, workpapers, memoranda, notes, records, reports, manuals,
drawings, blueprints, computer files and records, Confidential Information and
any other documents of a confidential nature belonging to the Company or its
subsidiaries or affiliates, including all copies of such materials which
Executive may then possess or have under Executive's control and any notes of
Executive relating thereto except for information in the public domain and any
such information brought with the executive prior to his employment with the
company. Upon termination of Executive's employment by the Company, Executive
shall not retain any document, data, or other material of any nature containing
or pertaining to the proprietary information of the Company or its subsidiaries
or affiliates.
.3 Prohibition on Solicitation of Customers; Noncompetition.
During the term of Executive's employment by the Company, and for a period of
six months thereafter, Executive shall not, directly or indirectly, either for
Executive or for any other person or entity, solicit any person or entity to
terminate such person's or entity's contractual and/or business relationship
with the Company or its subsidiaries or affiliates, nor shall Executive
interfere with or disrupt or attempt to interfere with or disrupt any such
relationship. In addition, for a period of six months following the term of
Executive's employment by the Company, Executive shall not, directly or
indirectly, be engaged (including as a stockholder, proprietor, general partner,
limited partner, trustee, consultant, employee, director, officer, lender,
investor or otherwise) in any business or activity that is competitive with that
of the Company, its subsidiaries' or affiliates activities within North America.
None of the foregoing shall be deemed a waiver of any rights and remedies the
Company may have under applicable law.
.4 Prohibition on Solicitation of Employees, Agents or
Independent Contractors After Termination. During the term of Executive's
employment by the Company and for a period of six months following the
termination of Executive's employment by the Company, Executive will not solicit
any of the employees, agents, or independent contractors of the Company or its
subsidiaries or affiliates to leave the employ of the Company or its
subsidiaries or affiliates. However, Executive may solicit any employee, agent
or independent contractor who voluntarily terminates his or her employment with
the Company or its subsidiaries or affiliates after a period of 180 days have
elapsed since the termination date of such employee, agent or independent
contractor. None of the foregoing shall be deemed a waiver of any rights and
remedies the Company may have under applicable law.
.5 Right to Injunctive and Equitable Relief. Executive's
obligations not to disclose or use Confidential Information and to refrain from
the solicitations described in this Article III are of a special and unique
character. The Company and its subsidiaries and affiliates cannot be reasonably
or adequately compensated for damages in an action at law in the event Executive
breaches such obligations. Therefore, Executive expressly agrees that the
Company and its subsidiaries and affiliates shall be entitled to injunctive and
other equitable relief without bond or other security in the event of such
breach in addition to any other rights or remedies which the Company or its
subsidiaries or affiliates may possess or be entitled to pursue. Furthermore,
the obligations of Executive and the rights and remedies of the Company and its
subsidiaries and affiliates under this Article III are cumulative and in
addition to, and not in lieu of, any obligations, rights, or remedies created by
applicable law relating to misappropriation or theft of trade secrets or
Confidential Information. The parties agree that the Company and all of the
subsidiaries and affiliates of the Company shall be third party beneficiaries of
this Section III and be entitled to enforce directly against Executive the
provisions of this Section III to the extent that shall be related to the
business of the Company, its subsidiaries or affiliates.
.6 Survival of Obligations. Executive agrees that the terms of
this Article III and Article V hereof shall survive the term of this Agreement
and the termination of Executive's employment by the Company.
IV
TERMINATION
.1 Definitions. For purposes of this Article IV, the following definitions
shall be applicable to the terms set forth below:
(a) Cause. "Cause" shall mean only the following: (i)
continued failure by the Executive after receipt of written
notice thereof to perform his duties hereunder or those duties
which may, from time to time, be reasonably requested by the
Senior Vice President of the Company (other than such failure
resulting from the Executive's incapacity due to physical or
mental illness), as determined by the members of the Board of
Directors in their reasonable discretion; (ii) misconduct by
the Executive which is injurious to the Company; (iii)
conviction of or pleading no contest to a felony or crime of
moral turpitude; (iv) drunkenness or drug use on the job by
the Executive; (v) action by the Executive beyond the scope of
his employment, as such scope is set by the Senior Vice
President of the Company from time to time (vi) a breach of
this Agreement by the Executive.
(b) Disability. "Disability" shall mean a physical or
mental incapacity as a result of which the Executive becomes
unable to continue the proper performance of his duties
hereunder (reasonable absences because of sickness for up to
three (3) consecutive months excepted). A determination of
Disability shall be subject to the certification of a
qualified medical doctor agreed to by the Company and the
Executive or, in the event of the Executive's incapacity to
designate a doctor, the Executive's legal representative. In
the absence of agreement between the Company and the
Executive, each party shall nominate a qualified medical
doctor and the two doctors so nominated shall select a third
doctor, who shall make the determination as to Disability.
.2 Termination by Company. The Executive's employment
hereunder may be terminated by the Company immediately for Cause. Subject to the
provisions contained in Section IV (.3) (b) of this Agreement, the Company may
terminate this Agreement at any time for any reason other than Cause upon thirty
(30) days' written notice to Executive. The effective date of termination
("Effective Date") shall be considered to be thirty (30) days subsequent to
written notice of termination; however, the Company may elect to have Executive
leave the Company and its subsidiaries immediately upon issuance of the
aforementioned written notice.
.3 Severance Benefits Received Upon Termination.
(a) If at any time the Executive's employment is
terminated by the Company for Cause, the Company shall pay the
Executive his Annual Salary prorated through the date such
termination occurs plus payment for any vacation earned but
not taken and the Company shall thereafter have no further
obligations under this Agreement to the Executive or his or
her dependents, beneficiaries or estate; provided, however,
that the Company will continue to honor any obligations that
may have been accrued and vested under then existing Company
Benefit Plans or any other agreements or arrangements
applicable to the Executive.
(b) If at any time the Executive's employment is
terminated by the Company without Cause or as a result of
death or Disability, then the Company shall:
(1) pay to the Executive for termination of
his rights hereunder a lump sum, in cash, within
seven business days following the date of
termination, in an amount equal to six months' salary
based upon the Executive's current "Monthly Base
Salary" (defined as the Annual Salary in effect on
the date of termination divided by twelve (12)), plus
payment for any vacation earned but not taken, and in
addition, the Company will continue to honor any
obligations that may have been accrued and vested
under then existing Company Benefit Plans or any
other agreements or arrangements applicable to the
Executive.
(2) provide Executive with such insurance
coverage as is then required by COBRA or any similar
then applicable law.
.4 No Obligation to Mitigate Damages; No Effect on Other
Contractual Rights.
(a) The Executive shall not be required to mitigate
damages or the amount of any payment provided for under this
Agreement by seeking other employment or otherwise, nor shall
the amount of any payment provided for under this Agreement be
reduced by any compensation earned by the Executive as the
result of employment by another employer after the date of
termination, or otherwise.
(b) The provisions of this Agreement, and any payment
or benefit provided for hereunder, shall not reduce any
amounts otherwise payable, or in any way diminish the
Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, under any Company
Benefit Plan or other contract, plan or arrangement.
(c) Executive may terminate this Agreement upon 30
days written notice to the Company and upon such termination
the Company shall make the payment provided for in Section IV
(.3)(a) only hereof and no further payments shall be required
to be made by the Company to Executive.
V
GENERAL PROVISIONS
.1 Notice. For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company:
Xxxxxx X. Xxxxxxxxxxx
Senior Vice President
First Aviation Services Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
If to the Executive:
Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
.2 No Waivers. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in a writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut without regard
to conflicts of law principles. Executive hereby agrees to submit to the
exclusive jurisdiction of the courts in and of the State of Tennessee, and
consents that service of process with respect to all courts in and of the State
of Tennessee may be made by registered mail to Executive at his address for
notices specified herein.
.4 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
.6 Legal Fees and Expenses. Should any party institute any
action or proceeding to enforce this Agreement or any provision hereof, or for
damages by reason of any alleged breach of this Agreement or of any provision
hereof, or for a declaration of rights hereunder, the prevailing party in any
such action or proceeding shall be entitled to receive from the other party all
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party in connection with such action or proceeding.
.7 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
parties with respect to the subject matter hereof. This Agreement is intended by
the parties as the final expression of their agreement with respect to such
terms as are included in this Agreement and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.
.8 Assignment. This Agreement and the rights, duties, and
obligations hereunder may not be assigned or delegated by any party without the
prior written consent of the other party. Notwithstanding the foregoing
provisions of this Section 5.8, the Company may assign or delegate its rights,
duties, and obligations hereunder to any person or entity which succeeds to all
or substantially all of the business of the Company through merger,
consolidation, reorganization, or other business combination or by acquisition
of all or substantially all of the assets of the Company; provided that such
person assumes the Company's obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
FIRST AVIATION SERVICES INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chief Executive Officer
Xxxxxx X. Xxxxxx
an individual
_/s/ Xxxxxx X. Xxxxxx
