AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of April 1, 2004 (“Effective Date”) by and between TIMCO AVIATION SERVICES, INC. (“TIMCO”), a Delaware corporation, and Xxxx Xxxxxxxxx (the “Employee”).
TIMCO’S subsidiary, Triad International Maintenance Corporation, currently employs Employee pursuant to that certain Employment Agreement, dated effective as of September 2001 (the “Old Agreement”);
TIMCO wishes to amend and restate the Old Agreement and to employ the Employee on the terms and conditions set forth in this Agreement.
In consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement, the parties hereto agree as follows:
(a) Employment. TIMCO agrees to employ the Employee as Senior Vice President of Engineering and Interior Manufacturing. Employee agrees to accept such employment and serve in such position, on the terms and subject to the conditions of this Agreement.
(b) Employment Period. The period during which the Employee shall serve as an employee of TIMCO under this Agreement shall commence on the Effective Date, and unless earlier terminated pursuant to this Agreement or extended through agreement of the parties, shall expire on March 31, 2007 (the period for which the Employee is an employee of TIMCO is hereinafter referred to as the “Employment Period”).
(c) Duties and Responsibilities. During the Employment Period, the Employee shall have such authority and responsibility and perform such duties as may be assigned to him from time to time at the direction of the Chief Operating Officer of TIMCO, and in the absence of such assignment, such duties customary to Employee’s office as are necessary to the business and operations of TIMCO and its affiliates. During the Employment Period, the Employee’s employment shall be full time and the Employee shall perform his duties honestly, diligently, competently, in good faith and in the best interests of TIMCO and shall use his best efforts to promote the interests of TIMCO and shall refer to TIMCO opportunities in the aerospace industry that have been referred to Employee.
(a) Base Salary. In consideration for the Employee’s services hereunder and the restrictive covenants contained herein, the Employee shall be paid an annual base salary of $225,000 (the “Salary”), payable in accordance with TIMCO’s customary payroll practices. Notwithstanding the foregoing, Employee’s annual Salary may be increased at any time and from time to time to levels greater than the level set forth in the preceding sentence at the sole discretion of the Compensation Committee of the Board of Directors of TIMCO (“Committee”) to reflect merit or other increases.
(b) Bonus. In addition to the Salary, the Employee shall be eligible to receive an annual bonus (“Bonus”) equal to 65% of the Employee’s Base Salary. The Bonus shall be based on the achievement of corporate goals and objectives as established by the Committee after consultation with the management of TIMCO. The achievement of said goals and objectives shall be determined by the Committee. With respect to any Fiscal Year during which the Employee is employed by TIMCO for less than the entire Fiscal Year, the Bonus shall be prorated for the period during which the Employee was so employed. The Bonus shall be payable within thirty (30) days after the completion of the financial statements for the particular Fiscal Year as to which the Bonus relates. The term “Fiscal Year” as used herein shall mean each period of twelve (12) calendar months commencing on January 1st of each calendar year during the Employment Period and expiring on December 31st of such year.
(c) Retention Bonus. In consideration for Employee entering into the Agreement, and in addition to the other compensation and benefits payable hereunder, Employee shall receive a retention bonus (the “Retention Bonus”) in the amount of $37,500, $12,500 of which shall be paid on the date of the execution of this agreement, $12,500 of which shall be paid on April 1, 2005 (so long as Employee has not been terminated for Cause or voluntarily resigned from his employment with TIMCO as of such date), and $12,500 of which shall be paid on April 1, 2006 (so long as Employee has not been terminated for Cause or voluntarily resigned from his employment with TIMCO as of such date).
(d) Stock Options. Employee shall be eligible to receive grants of stock options or other equity incentives at the discretion of the Committee.
(e) Other Compensation Programs. The Employee shall be entitled to participate in TIMCO’s incentive and deferred compensation programs and such other programs as are established and maintained generally for the benefit of TIMCO’s employees or executive officers, subject to the provisions of such plans or programs.
(f) Vacations. The Employee shall be entitled to three weeks of vacation on an annual basis. Employee shall be entitled to be reimbursed for any accrued and unused vacation time as of the date he is no longer an employee of TIMCO.
(g) Other Benefits. During the term of this Agreement, the Employee shall also be entitled to participate in any other health insurance programs, life insurance programs, disability programs, stock option plans, bonus plans, pension plans and other fringe benefit plans and
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programs as are from time to time established and maintained for the benefit of TIMCO’s employees or executive officers, subject to the provisions of such plans and programs.
(h) Expenses. The Employee shall be reimbursed for all out-of-pocket expenses reasonably incurred by him on behalf of or in connection with the business of TIMCO, pursuant to the normal standards and guidelines followed from time to time by TIMCO.
(i) Education Expenses. Employee shall be reimbursed for expenses as incurred (tuition and books) in obtaining a mater’s degree in business administration (or such other degree as is approved by TIMCO’s Chief Executive Officer), in an amount up to $30,000 per year and $60,000 in the aggregate. Employee shall provide substantiation with respect to his tuition and books. Notwithstanding the foregoing, if Employee voluntarily leaves the employ of TIMCO or is terminated for Cause within two years after receiving his degree (or otherwise completing his studies), he shall repay TIMCO the funds advanced with respect to his education.
(j) Withholding. All payments made to the Employee hereunder shall be made net of any applicable withholding for income taxes and the Employee’s share of FICA, FUTA or other taxes. TIMCO shall withhold such amounts from such payments to the extent required by applicable law and remit such amounts to the applicable governmental authorities in accordance with applicable law.
(a) For Cause. TIMCO shall have the right to terminate this Agreement and to discharge the Employee for Cause (as defined below), at any time during the term of this Agreement. Termination for Cause shall mean, during the term of this Agreement, (i) Employee’s conduct that would constitute under federal or state law either a felony or a misdemeanor involving moral turpitude, or a determination by TIMCO’s Board of Directors, after consideration of all available information and following the procedures set forth below, that Employee has willfully violated TIMCO’s policies or procedures involving discrimination, harassment, alcohol or substance abuse, or work place violence causing material injury to TIMCO, (ii) Employee’s actions or omissions that constitute fraud, dishonesty or gross misconduct, (iii) Employee’s knowing and intentional breach of any fiduciary duty that causes material injury to TIMCO, and (iv) Employee’s inability to perform his material duties, after reasonable notice and an opportunity to resolve the issues, due to alcohol or other substance abuse. Any termination for Cause pursuant to this Section shall be given to the Employee in writing and shall set forth in detail all acts or omissions upon which TIMCO is relying to terminate the Employee for Cause.
Upon any determination by TIMCO that Cause exists to terminate the Employee, TIMCO shall cause a special meeting of the Board of Directors to be called and held at a time mutually convenient to the Board of Directors and Employee, but in no event later than ten (10) business days after Employee’s receipt of the notice that TIMCO intends to terminate the Employee for Cause. Employee shall have the right to appear before such special meeting of the Board of Directors with legal counsel of his choosing to refute such allegations and shall have a reasonable period of time to cure any actions or omissions which provide TIMCO with a basis to terminate the Employee for Cause (provided that such cure period shall not exceed 30 days). A
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majority of the members of the Board of Directors must affirm that Cause exists to terminate the Employee. No finding by the Board of Directors will prevent the Employee from contesting such determination through appropriate legal proceedings provided that the Employee’s sole remedy shall be to xxx for damages, not reinstatement, and damages shall be limited to those that would be paid to the Employee if he had been terminated without Cause.
(b) Without Cause. At any time during the Employment Period, TIMCO shall have the right to terminate the Employment Period and to discharge the Employee without cause effective upon delivery of written notice to the Employee. Upon any such termination by TIMCO without cause, provided that Employee is otherwise in compliance with the provisions of Sections 5 and 6 hereof, the Employee shall be entitled to receive each month for every month remaining in the Employment Period an amount equal to the monthly portion of his Salary, when and as the same would have been due and payable hereunder but for such termination, and otherwise TIMCO shall not have any further obligations hereunder from and after the date of such termination.
(c) Death or Disability. At any time during the Employment Period if Employee is unable to perform his duties and responsibilities as provided herein, due to his death or due to a physical or mental disability for more than one hundred eighty (180) days, TIMCO upon written notice may terminate the Employment Period provided that Employee shall receive disability payments during the term of Employees disability which Employee is entitled to receive under the applicable Companies (as defined hereafter) Disability Plan.
5. Restrictive Covenants. In consideration of the foregoing, the Employee agrees that he shall not:
(a) during the Employment Period and for a period of one-year following the termination of the Employment Period for any reason, directly or indirectly, alone or as a partner, joint venture, officer, director, member, employee, consultant, agent, independent contractor or shareholder of, or lender to, any company or business, engage in any business in the aerospace industry directly or indirectly in competition with the business of TIMCO or its affiliates (TIMCO and its affiliates being referred to herein collectively as the “Companies”) as such business now exists or as it may exist at the time of termination; provided, however, that, the beneficial ownership of less than five percent (5%) of the shares of stock of any other corporation having a class of equity securities actively traded on a national securities exchange or over-the-counter market shall not be deemed, in and of itself, to violate the prohibitions of this Section; and, provided further, that Employee shall be entitled to receive each month for one-year following the termination of the Employment Period Employee’s monthly portion of the Salary, unless Employee has been was terminated for “Cause,” in which case this restrictive covenant shall apply notwithstanding the payment of severance;
(b) for a period of one-year following the termination of the Employment Period, directly or indirectly (i) induce any Person which is a customer of any of the Companies, to patronize any business in the aerospace industry directly or indirectly in competition with business conducted by any of the Companies; (ii) canvass, solicit or accept from any Person which is a customer of any of the Companies, any such competitive business; or (iii) request or advise any Person which is a customer or supplier of any of the Companies, to withdraw, curtail
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or cancel any such customer’s or supplier’s business with any of the Companies, or its or their successors;
(c) for a period of one year following the Employment Period, directly or indirectly employ, or knowingly permit any company or business directly or indirectly controlled by him, to employ, any person who was employed by any of the Companies, at or within the prior three months, or in any manner seek to induce any such person to leave his or her employment;
(d) at any time following the date hereof, directly or indirectly, in any way outside of his employment with any of the Companies utilize, disclose, copy, reproduce or retain in his possession any of the Companies’ proprietary rights or records, including, but not limited to, any of its customer lists.
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other equitable relief; provided, however, that, this shall in no way limit any other remedies which the Companies may have.
13. Governing Law. This Agreement shall be construed in accordance with and governed for all purposes by the laws of the State of North Carolina applicable to contracts executed and to be wholly performed within such State.
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(a) Entire Agreement. This Agreement contains the entire understanding of the parties in respect of its subject matter and supersedes all prior agreements and understandings (oral or written) between or among the parties with respect to such subject matter.
[Signatures on next page]
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SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
| TIMCO AVIATION SERVICES, INC. | ||||
| By: | /s/ Xxx Xxxx | |||
| Name: Xxx Xxxx | ||||
| Title: President | ||||
| EMPLOYEE: | ||||
| /s/ Xxxx Xxxxxxxxx | ||||
| Name: Xxxx Xxxxxxxxx | ||||
| Address for Notices: | ||||
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