Exhibit 10.5
EVERGREEN INTERNATIONAL AVIATION, INC.
0000 Xxxxx Xxxx Xxxx . Xx Xxxxxxxxx, XX 00000-0000 XXX
Phone (000) 000-0000 . Fax (000) 000-0000
Telex 360841-SITA HDQOO156
Xx. Xxxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Dear Xxxxxxx:
This letter agreement (this "Agreement") confirms the terms and conditions
of your employment with Evergreen International Aviation, Inc. (the "Company")
as of the Effective Date (as defined herein).
1. Position: You will serve as the Chief Executive Officer of the Company
and Chairman of the Board of Directors of the Company (the "Board").
2. Term: Five (5) years, commencing on the date on which the Company completes
the refinancing and/or restructuring of the Company's current senior credit
facility (the "Effective Date"); provided, however, that the term of this
Agreement shall automatically be extended from day to day so that it always has
a remaining term of five (5) years.
3. Base Salary: You will be paid a base salary at the annual rate of $3,000,000
per year; subject to increase (but not any decreases) as determined by the Board
(the "Base Salary"). All forms of compensation referred to in this Agreement are
subject to reduction to reflect applicable withholding and payroll taxes.
4. Annual Bonus: At the discretion of the Board, you would be entitled to
receive a bonus based on such factors as the Board of Directors may determine in
its discretion; provided, however that the amount of such bonus shall be used
solely (i) to satisfy any obligations of you or your affiliates to Evergreen
Holdings, Inc. and its subsidiaries and (ii) to satisfy any taxes payable by you
or your affiliates as a result of the receipt of such bonus or the satisfaction
of such obligations.
5. Transaction Bonus: On the Effective Date, you shall be entitled to a lump
sum payment of $4,000,000, payable within ten (10) business days of the
Effective Date.
6. Fringe Benefits:
(a) Welfare and Other Fringe Benefits. You will be entitled to participate
in all benefits programs for which Company executives are eligible.
(b) Business Expenses. You will be entitled to reimbursement for necessary
and reasonable business expenses incurred in the performance of your duties.
(c) Vacation: You will be entitled to vacation according to policy, but no
less than four (4) weeks annually.
(d) Car Allowance: You will be entitled to two (2) leased vehicles
comparable to the type provided by the Company to you immediately prior to the
Effective Date, and all reasonable costs of use, repair and maintenance of such
vehicles.
7. Payments upon Termination:
(a) Termination by Company for Cause; or Voluntary Resignation without Good
Reason. In the event your employment with the Company is terminated (i) by the
Company for Cause (as defined below) or (ii) by reason of your voluntary
resignation without Good Reason (as defined below), you will be entitled to
receive accrued but unpaid Base Salary and bonuses through the date of
termination and any benefits payable under applicable welfare benefit plans or
other arrangements.
For purposes of this Agreement, "Cause" shall be defined to include:
(i) your conviction of or guilty plea to a felony; or (ii) acts of material
personal dishonesty, theft or fraud by you in connection with your duties as an
officer of the Company and intended to result in your personal gain.
(b) Termination for Disability or Death. In the event your employment is
terminated as a result of your Disability or death, you or your estate (as the
case may be) will be entitled to:
(1) your Base Salary through the date of such termination;
(2) a portion of your Annual Bonus for the year in which the
termination occurs, prorated through the date of such termination;
(3) any benefits payable under applicable welfare benefit plans or
other arrangements; and
(4) an amount equal to (i) five (5) times your Base Salary then in
effect plus (ii) an amount equal to five (5) times the average of Annual Bonuses
paid to you in the five (5) years immediately preceding such termination,
payable in equal installments in accordance with Company's normal payroll
practices for a period of five (5) years following termination of employment.
For purposes of this Agreement, "Disability" shall be defined to mean:
your inability to work by reason of your disability for a period of six (6)
consecutive months.
2
(c) Termination by Company other than for Death, Disability or for Cause;
Resignation for Good Reason. If your employment with the Company is terminated
(i) by Company for any reason other than your death or Disability or for Cause
or (ii) by you for Good Reason, you will be entitled to:
(1) your Base Salary through the date of such termination;
(2) a portion of your Annual Bonus for the year in which the
termination occurs, prorated through the date of such termination;
(3) any benefits payable under applicable welfare benefit plans or
other arrangements;
(4) a lump sum payment equal to (i) five (5) times your Base Salary
then in effect plus (ii) an amount equal to five (5) times the average of the
Annual Bonuses paid to you in the five (5) years immediately preceding such
termination; and
(5) Company-paid health coverage for a period of five (5) years
following termination of employment.
For purposes of this Agreement, "Good Reason" shall be defined to
include: (i) assignment to you of duties inconsistent with your position or an
adverse change in the status, position or conditions of your employment or the
nature of your responsibilities in effect as of the Effective Date, or your
removal from, or any failure to re-elect you to, any of such positions, (ii)
reduction by the Company in your Base Salary, (iii) relocation of the Company's
principal offices to a location the distance of which from your current
principal residence is more than 25 miles greater than the distance from your
current residence to the current office, (iv) failure to pay you any portion of
your Base Salary within seven (7) days of the due date, (v) failure by the
Company to continue in effect any benefit or compensation plan in which you
participate or (vi) failure of the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement.
8. Mitigation; Offset: You will not be subject to mitigation or offset of
benefits.
9. Indemnification: You will be indemnified by the Company and its subsidiaries
to the maximum extent permitted by applicable law, and following the Term will
remain covered under any Director and Officer liability insurance policies for
matters arising during the Term.
10. Legal Expenses. The Company shall reimburse you for all legal fees and
expenses reasonably incurred in connection with the negotiation of this
Agreement, and reasonably incurred as a result of enforcing the benefits under
this Agreement.
This Agreement contains all the understandings between you and the Company
with respect to your employment with the Company and supersedes all other prior
3
agreements and understandings, whether oral or in writing. No provision of this
Agreement may be amended or waived unless agreed to in writing, signed by you
and an authorized member of the Board. This Agreement will be governed by and
construed in accordance with the laws of the State of Oregon, without regard to
principles of conflict of laws.
To indicate your acceptance of the terms and conditions of this Agreement,
please sign and date this Agreement in the space provided below. A duplicate
original is enclosed for your records.
Sincerely,
EVERGREEN INTERNATIONAL
AVIATION, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
President
ACCEPTED AND AGREED TO this
30th day of April, 2003.
/s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
4
