Contract
Exhibit
10.1
LMI AEROSPACE, INC., a
Missouri corporation (the “Corporation”), and XXXXX XxXXXXXXX (“Employee”) hereby
agree as follows:
1. Employment. The
Corporation hereby employs Employee, and Employee accepts employment from the
Corporation, upon the terms and conditions hereinafter set forth in this
Employment Agreement (“Agreement”).
2. Term of
Employment.
(A) The initial
term of Employee’s employment under this Agreement shall commence on July 6,
2009 (the “Commencement Date”) and shall terminate on January 1, 2011; provided,
however, that this Agreement shall automatically extend for successive one-year
terms unless not later than October 31 of any year beginning in 2010, either
party has given written notice to the other party of its or his intention not to
extend the term of this Agreement (in which case, this Agreement shall terminate
at the end of the then-current term); and provided, further, that the term of
employment may be terminated upon the earlier occurrence of any of the following
events:
(1) Upon the
termination of the business or corporate existence of the
Corporation;
(2) At the
Corporation’s option, in the event the Corporation determines that Employee is
not performing the duties required of him hereunder to the satisfaction of the
Corporation;
(3) Upon the
death of Employee;
(4) At the
Corporation’s option, if Employee shall suffer a permanent
disability. For the purposes of this Agreement, “permanent
disability” means any physical or mental impairment that renders Employee unable
for a period of six (6) months or more to perform the essential job functions of
his position, even with reasonable accommodation, as determined by a physician
selected by the Corporation. Employee acknowledges and agrees that he
shall voluntarily submit to a medical and/or psychological examination for the
purpose of determining his continued fitness to perform the essential functions
of his position whenever requested to do so by the Corporation. If
the Corporation elects to terminate the employment relationship under this
subparagraph (4), the Corporation shall notify Employee or his representative in
writing, and the termination shall become effective on the date that such
notification is given;
(5) At the
Corporation’s option, upon ten (10) calendar days’ written notice to Employee,
in the event of any breach or default by Employee of any of the terms of this
Agreement or of any of Employee’s duties or obligations hereunder. In
lieu of providing ten (10) calendar days’ advance written notice, the
Corporation, at its sole option, may terminate Employee’s services immediately
and pay him an amount that is equivalent to ten (10) calendar days of his
salary, less any deductions required by law;
(6) At the
Corporation’s option, without any advance notice, in the event that Employee
engages in conduct that, in the opinion of the Corporation, (1) constitutes
dishonesty of any kind (including, but not limited to, any misrepresentation of
facts or falsification of records) in Employee’s relations, interactions or
dealings with the Corporation or its customers; (2) constitutes a felony; (3)
potentially may or will expose the Corporation to public disrepute or disgrace,
or potentially may or will cause harm to the customer relations, operations or
business prospects of the Corporation; (4) constitutes harassment or
discrimination towards any person associated with the Corporation, whether an
employee, agent or customer, based upon that person’s race, color, national
origin, sex, age, disability, religion or other protected status; (5) reflects
disruptive or disorderly conduct, including but not limited to, acts of
violence, fighting, intimidation or threats of violence against any person
associated with the Corporation, whether an employee, agent or customer, or
possessing a weapon while on the Corporation’s premises or while acting on
behalf of the Corporation; (6) is indicative of abusive or illegal drug use
while on the Corporation’s premises or while acting on the Corporation’s behalf;
or (7) constitutes a willful violation of any governmental rules or regulations;
or
(7) At the
Employee’s option, after providing the Corporation with at least thirty (30)
calendar days advance written notice of his intention to terminate the
employment relationship.
If
employment is terminated for any of the reasons set forth in subparagraphs (3)
through (7) of this section 2(A), Employee shall be entitled to receive only the
Base Salary (as that term is hereinafter defined) accrued but unpaid as of the
date of the termination and shall be ineligible to receive any additional
compensation or severance pay. If, on the other hand, employment is
terminated by the Corporation during the term of this Agreement for any reason
other than those set forth in paragraphs (3) through (7) of this section 2(A),
subject to the conditions set forth in paragraphs 2(C) and (D) of this
Agreement, the Corporation shall provide severance pay to Employee in an amount
based upon his length of service with the Corporation. Specifically,
the Corporation shall provide Employee with six (6) months of Base Salary if he
has less than five (5) years of service with the Corporation as of the date of
his termination and with twelve (12) months of Base Salary if he has five (5) or
more years of service with the Corporation as of the date of his
termination. Such severance pay shall be paid in equal monthly
installments commencing immediately after the
termination. Notwithstanding the foregoing, if at the time of
Employee’s termination, Employee is considered a ‘specified employee’ within the
meaning of Section 409A(a)(2) of the Code, and if any payment that Employee
becomes entitled to under this Agreement would be considered deferred
compensation subject to Section 409A of the Code, then no such payment shall be
payable prior to the date that is the earlier of (1) six months and one day
after Employee’s termination, or (2) Employee’s death, and the initial payment
shall include a catch-up payment covering amounts that would otherwise have been
paid during the six-month period but for application of this
provision.
(B) If Employee’s
employment with the Corporation is terminated in conjunction with a change in
the control of the Corporation or in conjunction with the sale of substantially
all of the operating assets of the Corporation, the Corporation will provide
Employee with severance pay under the circumstances specified in subparagraphs
(1) or (2) of this section 2(B) as the case may be, and the conditions set forth
in paragraphs 2(C) and (D) of this Agreement. For the purposes of
this Agreement, a “change in control” is defined as the sale of substantially
all of the operating assets of the Corporation or the acquisition of more than
fifty percent (50%) of the stock of the Corporation by a group of shareholders
or an entity that acquires control of the Corporation (a
“Purchaser”).
(1) If the change
in control or the sale results in the involuntary termination of Employee or
results in Employee electing to terminate his employment for a good reason as
determined by the Corporation in its sole discretion (such as the Purchaser
refusing to offer full time employment to Employee on terms comparable to those
provided by the Corporation prior to the acquisition or the Purchaser requiring
Employee to move to a new location), the Corporation shall provide Employee with
severance pay in an amount that is equal to two times his annual Base Salary and
shall pay Employee any reasonably anticipated Performance Bonus for the fiscal
year in which he was terminated, on a prorated basis.
(2) If Employee
voluntarily terminates his employment without a good reason (as determined by
the Corporation in its sole discretion) within ninety (90) days after the change
in control or the sale, the Corporation shall provide Employee with six (6)
months of Base Salary if he has less than five (5) years of service with the
Corporation as of the date of his termination and with twelve (12) months of
Base Salary if he has five (5) or more years of service with the Corporation as
of the date of his termination.
(C) The severance
pay provided for in section 2(A) and 2(B) of this Agreement shall be paid in
equal monthly installments commencing immediately after the
termination. Notwithstanding the foregoing, if at the time of
Employee’s termination, Employee is considered a ‘specified employee’ within the
meaning of Section 409A(a)(2) of the Code, and if any payment that Employee
becomes entitled to under this Agreement would be considered deferred
compensation subject to Section 409A of the Code, then no such payment shall be
payable prior to the date that is earlier of (1) six months and one day after
Employee’s termination, or (2) Employee’s death, and the initial payment shall
include a catch-up payment covering amounts that would otherwise have been paid
during the six-month period but for application of this provision.
(D) Notwithstanding
anything to the contrary, (i) the amount of severance pay provided under this
Agreement shall not under any circumstances exceed the limitations set forth in
§ 280G of the Code, and (ii) the Corporation’s obligation to pay the severance
pay provided for in this section 2 shall be conditioned on Employee’s execution
of a written waiver and release agreement satisfactory to the
Corporation.
3. Compensation.
(A) During the
period from the Commencement Date to December 31, 2009, the Corporation shall
compensate Employee for Employee’s services rendered hereunder by paying to
Employee an annual salary (the “Base Salary”) of Three Hundred Thousand Dollars
($300,000.00), prorated for the months employed in 2009. During the
period from January 1, 2010 to December 31, 2010, Employee’s Base Salary shall
be Three Hundred Nine Thousand Dollars ($309,000.00). Thereafter, as
long as this Agreement remains in effect, the annual Base Salary that the
Corporation shall pay to Employee for his services rendered hereunder will be
Three Hundred Nine Thousand Dollars ($309,000.00), prorated for any year in
which Employee is not employed for the entire year. Payment of this
salary will be made in accordance with the payroll policies of the Corporation
in effect from time to time. Notwithstanding anything in this
paragraph to the contrary, the Corporation reserves the right to deduct or
withhold all amounts from Employee’s salary as may be required by law or
otherwise mutually agreed to by the parties hereto.
(B) With respect
to each fiscal year of the Corporation during which (i) the Employee is employed
under the terms of this Agreement as of the first day of the next fiscal year,
and (ii) the Corporation's “Annual Income from Operations” (as that term is
hereinafter defined) is at least 60.00% of budgeted Annual Income from
Operations, the Corporation shall pay to Employee, in addition to the Base
Salary, an annual “Performance Bonus”.
The
amount of the annual Performance Bonus (if any) shall be equal to:
|
(1)
|
5.00%
of Employee’s Base Salary; plus
|
|
(2)
|
0.65%
of the Corporation’s Annual Income from Operations that is above 60.00% of
budgeted Annual Income from Operations, but not greater than budgeted
Annual Income from Operations, plus 1.00% of Annual Income from Operations
above budget.
|
The
Compensation Committee of the Board of Directors of the Corporation (the
“Compensation Committee”) retains the right to modify or adjust the manner in
which the Performance Bonus is calculated in the event that the Corporation
either acquires the assets of another entity, or any portion thereof, or sells
its assets, or any portion thereof, to another entity.
In the
event the Corporation’s Annual Income from Operations for any given fiscal year
is less than 60.00% of budgeted Annual Income from Operations, Employee shall
not be entitled to a Performance Bonus with respect to such fiscal
year.
For
purposes of the calculation of the Performance Bonus, the Corporation’s “Annual
Income from Operations” means the consolidated Income from Operations of the
Corporation and its subsidiaries, for a given fiscal year, as determined by the
firm of independent certified public accountants providing auditing services to
the Corporation, using generally accepted accounting principles consistently
applied, and calculated without regard to (a) federal and state income tax, (b)
any interest expense or other income and expense as they appear on the
Corporation’s annual audited financial statements, and (c) any income or loss
attributable to any other corporation or entity (including the assets of a
corporation or entity that constitute an operating business) acquired by or
merged into the Corporation subsequent to the effective date of this
Agreement. The Corporation shall pay to Employee any Performance
Bonus due Employee hereunder not later than fifteen (15) days after the receipt
by the Corporation of its annual audited financial statements, which the
Corporation expects to receive within ninety (90) days after the end of each
fiscal year of the Corporation.
(C) In addition
to the Base Salary and Performance Bonus (if any), Employee shall be entitled to
receive such bonus compensation as the Compensation Committee may authorize from
time to time.
4. Duties of
Employee.
(A) Employee
shall serve as President and Chief Operating Officer or in such other positions
as may be determined by the Board of Directors of the Corporation, and Employee
shall perform such duties on behalf of the Corporation and its subsidiaries by
such means, at such locations, and in such manner as may be specified from time
to time by the Chief Executive Officer or Board of Directors of the
Corporation.
(B) Employee
agrees to abide by and conform to all rules established by the Corporation
applicable to its employees.
(C) Employee
acknowledges that he is being employed as a full-time employee, and Employee
agrees to devote so much of Employee’s entire time, attention and energies to
the business of the Corporation as is necessary for the successful operation of
the Corporation and shall endeavor at all times to improve the business of the
Corporation. Employee shall not accept any business commitments other
than with the Corporation without the advance written consent of the
Corporation’s Chief Executive Officer.
5. Expenses. During
the period of Employee’s employment, except as otherwise specifically provided
in this Agreement, the Corporation will pay directly, or reimburse Employee for,
all items of reasonable and necessary business expenses approved in advance by
the Corporation if such expenses are incurred by Employee in the interest of the
business of the Corporation. All such expenses paid by Employee will
be reimbursed by the Corporation upon presentation by Employee, from time to
time (but not less than quarterly), of an itemized account of such expenditures
in accordance with the Corporation’s policy for verifying such
expenditures. The Corporation shall furnish Employee with an American
Express or other suitable credit card for purposes of charging appropriate
expenses incurred by Employee in the interest of the business of the
Corporation.
6. Fringe
Benefits.
(A) Employee
shall be entitled to participate in any health, accident and life insurance
program and other benefits that have been or may be established by the
Corporation for salaried employees of the Corporation. In addition,
the Corporation will pay directly, or reimburse Employee for, the lesser of (1)
the cost of retiree health coverage previously purchased while an employee of
Gulfstream Aerospace Corporation or (2) the amount the Corporation pays for or
reimburses for retiree health coverage for similarly situated employees of the
Corporation. Further, the Corporation will reimburse Employee up to
Four Thousand Eight Hundred Dollars ($4,800.00) per year for certain life
insurance costs incurred by the Employee for Hartford Life Insurance policy
#LT4862254 previously obtained by the Employee. In addition,
Corporation shall pay directly, or reimburse Employee for, the lesser of (1)
costs incurred by Employee between the Commencement Date and Employee’s
enrollment in Corporation’s dental insurance program for COBRA dental coverage
or (2) the amount the Corporation provides on behalf of similarly situated
employees of the Corporation for dental coverage. Such amounts to be
reimbursed to Employee will be grossed-up to cover any income taxes incurred on
such amounts by the Employee.
(B) Employee
shall be entitled to an annual vacation without loss of compensation for such
period as may be determined by the Board of Directors of the
Corporation.
(C) The
Corporation shall furnish to Employee during the term of his employment an
automobile selected by the Corporation to aid Employee in the performance of his
duties. In addition, the Corporation shall reimburse Employee during
the term of his employment the costs of insuring and maintaining the automobile,
including fuel costs for the automobile. Upon agreement of the
Corporation and Employee, the Corporation may, in lieu of the automobile,
provide Employee with a Six Thousand Dollar ($6,000.00) annual automobile
allowance.
(D) The
Corporation shall furnish to Employee during the term of his employment a laptop
computer and mobile phone with email and data capability, as selected by the
Corporation, to aid Employee in the performance of his duties.
(E) Beginning on
the Commencement Date and extending for a period of six (6) months, the
Corporation shall furnish the Employee with executive coaching to aid the
Employee in the transition of employment with the Corporation.
(F) The
Corporation shall reimburse the Employee for temporary lodging in the St. Louis,
Missouri metropolitan area for three (3) calendar months to begin upon the
Commencement Date, and for such additional months as mutually agreed in writing
by the Corporation and the Employee. The Corporation shall reimburse
the Employee’s expenses, exclusive of taxes, for actual costs to transport
personal belongings needed during the period of temporary housing, and to
relocate his household goods to the St. Louis, Missouri metropolitan area, upon
securing permanent housing and upon presentment of proper
documentation. The Corporation shall also reimburse the Employee for
two (2) trips by Employee’s spouse to the St. Louis, Missouri metropolitan area
during the period of his temporary lodging, for purposes of searching for and
securing permanent housing.
7. Covenants of
Employee.
(A) During the
term of Employee’s employment with the Corporation and for all time thereafter,
Employee covenants and agrees that Employee will not in any manner directly or
indirectly, except as required in Employee’s duties to the Corporation, disclose
or divulge to any person, entity, firm or company whatsoever, or use for
Employee’s own benefit or the benefit of any other person, entity, firm or
company, directly or indirectly, any knowledge, devices, information,
techniques, customer lists, business plans or other data belonging to the
Corporation or developed by Employee on behalf of the Corporation during his
employment with the Corporation, without regard to whether all of the foregoing
matters will be deemed confidential, material or important, the parties hereto
stipulating, as between them, that the same are important, material,
confidential and the property of the Corporation, that disclosure of the same to
or use of the same by third parties would greatly affect the effective and
successful conduct of the business of the Corporation and the goodwill of the
Corporation, and that any breach of the terms of this subparagraph (A) shall be
a material breach of this Agreement.
(B) During the
term of Employee’s employment with the Corporation and for a period of two (2)
years or one (1) year with respect to subparagraph (4) below (the “Covenant
Term”) after cessation for whatever reason of such employment (except as
hereinafter provided in subparagraph (C) of this paragraph 7), Employee
covenants and agrees that Employee will not in any manner directly or
indirectly:
(1) solicit,
divert, take away or interfere with any of the customers (or their respective
affiliates or successors) of the Corporation;
(2) engage
directly or indirectly, either personally or as an employee, partner, associate
partner, officer, manager, agent, advisor, consultant or otherwise, or by means
of any corporate or other entity or device, in any business which is competitive
with the business of the Corporation. For purposes of this covenant a
business will be deemed competitive if it is conducted in whole or in part
within any geographic area wherein the Corporation is engaged in marketing its
products, and if it involves the manufacture of component parts for the
aerospace industry or any other business which is in any manner competitive, as
of the date of cessation of Employee’s employment, with any business then being
conducted by the Corporation or as to which the Corporation has then formulated
definitive plans to enter;
(3) induce any
salesman, distributor, supplier, manufacturer, representative, agent, jobber or
other person transacting business with the Corporation to terminate their
relationship with the Corporation, or to represent, distribute or sell products
in competition with products of the Corporation; or
(4) induce or
cause any employee of the Corporation to leave the employ of the
Corporation.
(C) The parties
agree that the Covenant Term provided for in the preceding subparagraph (B)
shall be:
(1) reduced to
six (6) months after cessation for whatever reason of Employee’s employment with
the Corporation in the event all of the operating assets or all of the common
stock of the Corporation is sold to any entity or individuals unaffiliated with
the Corporation, its successors or assigns; or
(2) eliminated if
the business currently operated by the Corporation is terminated, and the assets
of the Corporation are liquidated.
(D) All the
covenants of Employee contained in this paragraph 7 shall be construed as
agreements independent of any other provision of this Agreement, and the
existence of any claim or cause of action against the Corporation, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Corporation of these covenants.
(E) It is the
intention of the parties to restrict the activities of Employee under this
paragraph 7 only to the extent necessary for the protection of legitimate
business interests of the Corporation, and the parties specifically covenant and
agree that should any of the provisions set forth therein, under any set of
circumstances not now foreseen by the parties, be deemed too broad for such
purpose, said provisions shall automatically be amended and modified to the
minimum extent necessary in order for the provision(s) in question to be valid
and enforceable.
8. Documents. Upon
cessation of Employee’s employment with the Corporation, for whatever reason,
all documents, records (including without limitation, customer records),
notebooks, invoices, statements or correspondence, including copies thereof,
relating to the business of the Corporation then in Employee’s possession,
whether prepared by Employee or others, will be delivered to and left with the
Corporation, and Employee agrees not to retain copies of the foregoing documents
without the written consent of the Corporation.
9. Remedies. In
the event of the breach by Employee of any of the terms of this Agreement,
notwithstanding anything to the contrary contained in this Agreement, the
Corporation may terminate the employment of Employee in accordance with the
provisions of paragraph 2 of this Agreement. It is further agreed
that any breach or evasion of any of the terms of this Agreement by Employee
will result in immediate and irreparable injury to the Corporation and will
authorize recourse to injunction and/or specific performance as well as to other
legal or equitable remedies to which the Corporation may be
entitled. In addition to any other remedies that it may have in law
or equity, the Corporation also may require an accounting and repayment of all
profits, compensation, remuneration or other benefits realized, directly or
indirectly, as a result of such breaches by Employee or by a competitor’s
business controlled, directly or indirectly, by Employee. No remedy
conferred by any of the specific provisions of this Agreement is intended to be
exclusive of any other remedy and each and every remedy given hereunder or now
or hereafter existing at law or in equity by statute or
otherwise. The election of any one or more remedies by the
Corporation shall not constitute a waiver of the right to pursue other available
remedies. Employee expressly agrees to pay all reasonable costs and
attorneys’ fees incurred by the Corporation in order to enforce Employee’s
obligations under this Agreement, regardless of whether litigation is commenced
or prosecuted to a judgment.
10. Severability. All
agreements and covenants contained herein are severable, and in the event any of
them shall be held to be invalid by any court of competent jurisdiction, this
Agreement, subject to subparagraph 7(E) hereof, shall continue in full force and
effect and shall be interpreted as if such invalid agreements or covenants were
not contained herein.
11. Waiver or
Modification. No waiver or modification of this Agreement or
of any covenant, condition or limitation herein shall be valid unless in writing
and duly executed by the party to be charged therewith, and no evidence of any
waiver or modification shall be offered or received in evidence in any
proceeding, arbitration or litigation between the parties hereto arising out of
or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this paragraph
11 may not be waived except as herein set forth. Failure of the
Corporation to exercise or otherwise act with respect to any of its rights
hereunder in the event of a breach of any of the terms or conditions hereof by
Employee shall not be construed as a waiver of such breach nor prevent the
Corporation from thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
12. Assignability. This
Agreement may be assigned by the Corporation to another entity that purchases
substantially all of the assets of the Corporation or acquires a majority of the
stock of the Corporation. The services to be performed by Employee
hereunder are personal in nature, and, therefore, Employee shall not assign
Employee’s rights or delegate Employee’s obligations under this Agreement, and
any attempted or purported assignment or delegation not herein permitted shall
be null and void.
13. Successors. Subject
to the provisions of paragraph 12, this Agreement shall be binding upon and
shall inure to the benefit of the Corporation and Employee and their respective
heirs, executors, administrators, legal administrators, successors and
assigns.
14. Notices. Any
notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been given if delivered personally, by
over-night courier, or by certified or registered mail, return receipt
requested, if to the Corporation, to:
|
Xxxxxx
X. Xxxx, President
LMI
AEROSPACE, INC.
X.X.
Xxx 000
Xx.
Xxxxxxx, XX 00000-0000
|
and, if
to Employee, to:
|
Xxxxx
XxXxxxxxx
000
Xxxxxxxxx Xxxxxxxx
Xxxxxx,
XX 00000
|
or to
such other address as may be specified by either of the parties in the manner
provided under this paragraph 14.
15. Construction. This
Agreement shall be deemed for all purposes to have been made in the State of
Missouri and shall be governed by and construed in accordance with the laws of
the State of Missouri, notwithstanding either the place of execution hereof, nor
the performance of any acts in connection herewith or hereunder in any other
jurisdiction.
16. Venue. The
parties hereto agree that any suit filed arising out of or in connection with
this Agreement shall be brought only in the United States District Court for the
Eastern District of Missouri, unless that court lacks jurisdiction, in which
case such action shall be brought only in the Circuit Court for St. Louis
County, Missouri.
17. Disclosure of
Existence of Agreement. To preserve the Corporation’s rights
under this Agreement, the Corporation may advise any third party of the
existence of this Agreement and its terms, and Employee specifically releases
and agrees to indemnify and hold the Corporation harmless from any liability for
doing so.
18. Agreement Drafted
by the Corporation’s Counsel; Interpretation. Each party
hereto acknowledges that the Corporation’s counsel, Gallop, Xxxxxxx &
Xxxxxx, X.X., prepared this Agreement on behalf of and in the course of its
representation of the Corporation and not Employee. Employee
acknowledges and represents that: (a) he has been advised to seek the advice of
independent counsel and (b) he has had the opportunity to seek the advice of
independent counsel. Notwithstanding the foregoing, if a question of
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
19. Review by and
Approval of Compensation Committee. This Agreement, including
each element of Employee’s compensation provided for in paragraph 3 has been
reviewed and approved by the Compensation Committee.
20. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior employment, consulting and similar agreements, written and/or oral
between the Corporation and Employee. Employee hereby waives and releases all
rights and claims under any such employment, consulting or other similar
agreements or with respect thereto.
The
parties have executed this Agreement on this 22nd day of June,
2009.
|
“CORPORATION”
|
||
|
LMI
AEROSPACE, INC.
|
||
|
By:
|
/s/ Xxxxxx X. Xxxx | |
|
Xxxxxx
X. Xxxx, President
|
||
|
“EMPLOYEE”
|
||
|
/s/ Xxxxx XxXxxxxxx
|
||
|
Xxxxx
XxXxxxxxx
|
||
