AGREEMENT
Exhibit 10.5
AGREEMENT
This Agreement is made and entered into by and between Xxxxxxx X. XxXxxxx (“Executive”), a
resident of the state of Texas, and Xxxxxx Aircraft Industries, Inc., a Delaware corporation with
its principal place of business in Dallas, Texas (“Xxxxxx” or the “Company”).
Executive and Xxxxxx (“the parties”) have agreed that Executive’s employment with the Company
will conclude as provided in this Agreement. In connection with this separation from employment and
subject to this Agreement, Xxxxxx has agreed to provide Executive with certain payments and other
benefits to which Executive would not be entitled absent his execution of this Agreement. Further,
Executive and Xxxxxx desire to settle any and all disputes related directly or indirectly to
Executive employment with Xxxxxx, including but not limited to all compensation-related matters and
the separation of Executive’s employment with Xxxxxx, in accordance with the terms and conditions
set forth in this Agreement.
Therefore, in consideration of the mutual covenants and agreements set forth in this
Agreement, and other good and valuable consideration, the sufficiency of which is hereby
acknowledged by both parties, Executive and Xxxxxx agree as follows:
1. Executive agrees that his last day to report to work will be on October 27, 2005 and that
he will separate from employment with Xxxxxx effective December 31, 2005 (“Separation Date”).
During the period from his last day of work until his Separation Date, Executive will make himself
reasonably available to assist the Company in transitioning Executive’s work. Except as otherwise
specified herein or under the applicable employee health and welfare or retirement plans, all of
Executive’s privileges, perquisites and benefits as a Xxxxxx employee will end as of the close of
business on October 27, 2005.
2. Compensation: In connection with the Executive’s separation from Xxxxxx, Xxxxxx will
provide Executive the following payments and benefits in consideration for his execution and
non-revocation of this Agreement and his fulfillment of the other obligations set forth herein:
a. Separation Pay: Within ten (10) days after the Effective Date of this Agreement (as
defined herein), Xxxxxx will pay to Executive a one-time lump sum equal to fifty-two (52)
times Executive’s current weekly, regular base salary. This payment will be made only on
the conditions that Executive has signed this Agreement, has not exercised his right to
revoke this Agreement (as described more fully in Paragraph 10), and has fulfilled the
other obligations set forth in this Agreement. This payment will not be considered
eligible compensation for purposes of the Xxxxxx Retirement Plan or the Savings and
Investment Plan. Except as set forth in this Agreement, Executive will not be entitled to
any other payment under any Xxxxxx layoff, severance, retention or change in control
agreement, plan or policy at the end of his employment with Xxxxxx.
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b. Deductions: Xxxxxx will deduct from the above payment the amount necessary to repay in
full Executive’s outstanding principal and accrued interest pursuant to that Promissory
Note dated October 24, 2000 between Executive and the Company.
c. Deferred Compensation Plan: Within ten (10) days after the Separation Date, Executive
will receive a one-time, lump-sum distribution of his accrued benefit under the Rabbi
Trust, with such amount to be calculated at an assumed value of $15.00 per share.
d. Outplacement Services: Beginning on the eighth day after the Effective Date, Executive
will be entitled to outplacement services with a firm of the Company’s choosing for a
period of one (1) year, provided pursuant to the terms of the contract between Xxxxxx and
the outplacement firm.
e. Accrued Vacation. Executive’s accrued vacation will be applied during the period
between his last day of work on October 27, 2005 and his Separation Date. After his
Separation Date, Executive will receive payment for remaining accrued but unused vacation,
if any.
f. Health Care Benefits: Neither Executive nor his dependents will be eligible for
coverage under Xxxxxx’x benefit plans after midnight Central Time on the Separation Date.
Executive may elect continuation of group health benefits for himself and his eligible
dependents through COBRA as set forth in the applicable Plan Rules. Executive will be
responsible for paying the entire cost of any applicable monthly premiums and
administrative costs of continuation coverage for himself and/or his dependents as provided
by the applicable Plan Rules. Within ten (10) days after the Separation Date, Xxxxxx will
pay Executive a one-time, lump-sum amount equal to the employer’s portion of continuation
coverage costs for a 12-month period.
g. Withholdings: Xxxxxx will withhold all required payroll deductions, including any
applicable taxes, from the above payments.
h. Excess Plan: The Company will honor the terms of any election properly made by
Executive with respect to the form of his benefit distribution under the Company’s
non-qualified retirement plan.
3. Inclusive of Income and All Other Benefits: Except as provided in Paragraph 2 above,
Executive acknowledges and agrees that he has received all other compensation and benefits due and
owing from Xxxxxx and that he has no further claim to any compensation or employee benefits from
Xxxxxx.
4. Equity Plans: The terms of Executive’s Stock Option Agreements shall govern the exercisability
and timing of exercising of his stock options. In accordance
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with those agreements, all non-vested stock options shall be forfeited, and no further vesting
shall occur, following the Separation Date. Executive may continue to hold shares of stock
purchased before the Separation Date, under the terms and conditions set forth in the Shareholders’
Agreement.
5. Confidential Information: Executive acknowledges and agrees that in the course of his
employment with Xxxxxx, he has had access to confidential, proprietary and/or trade secret
information relating to the business affairs of Xxxxxx. Executive agrees that he will continue to
maintain the complete confidentiality of Xxxxxx’x confidential, proprietary and/or trade secret
information and otherwise comply with all applicable fiduciary duties owed to the Company in
connection with Executive’s position as an officer of the Company. Executive agrees that at no time
following the execution of this Agreement will he disclose or otherwise make available to any
person, company and/or other entity, Xxxxxx’x confidential, proprietary and/or trade secret
information.
6. Non-Solicitation: Executive agrees that for a period of one (1) year following the
Effective Date of this Agreement, he shall not, and shall not cause any employer in which he plays
a role in management, operation or investment decisions, to: (a) solicit, entice, persuade or
induce any individual employed by Xxxxxx or its affiliates to terminate his or her employment with
Xxxxxx or its affiliates; (b) solicit any such individual for employment, consulting arrangements
or other similar arrangements, including as an independent contractor; (c) approach any such
individual for any of the foregoing purposes; or (d) assist in taking such actions by any third
party, in each case without the prior written consent of Xxxxxx. However, this Agreement shall not
prohibit the employment or the soliciting the employment of any such individual who has been
terminated by Xxxxxx or its affiliates or who has terminated his employment with Xxxxxx or its
affiliates out of his own volition and not at the behest or encouragement of Executive, nor the
soliciting of employment through the placement of advertisements in newspapers or journals of
general circulation or the Internet.
7. Return of Xxxxxx Property: Executive agrees to immediately return all property owned by
Xxxxxx in his possession including, but not limited to, any Company files, documents, drawings,
plans, or photographs; any Xxxxxx credit card (or credit card for which Xxxxxx is the guarantor);
and any badge, personal digital assistant, computer, telephone, pager, fax machine, or printer.
8. Waiver and Release: Executive, for and on behalf of himself and his heirs,
administrators, executors, successors and assigns, hereby releases, acquits, and forever discharges
Xxxxxx and its subsidiaries, affiliates and related companies, and the current and former
directors, officers, executives, managers, agents, attorneys, insurers, independent contractors and
employees of Xxxxxx and all its related entities (the “Released Parties”), from any and all claims,
whether direct or indirect, fixed or contingent, now known or unknown, which Executive ever had,
has, or may claim to have against the Released Parties, for, upon, or by reason of any matter, act,
action, inaction, decision, event or subject prior to the time Executive signs this Agreement.
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Executive understands and agrees that by executing this Agreement, he is giving up any and all
manner of actions or causes of action, suits, debts, claims, complaints, or demands of any kind
whatsoever against the Company, in law or in equity, including, but not limited to claims under the
Age Discrimination in Employment Act of 1967 and under any other federal, state, or local law or
regulation; as well as claims that this Agreement was procured through fraud or duress.
This Agreement does not waive or release: (i) any rights or claims Executive may have under
the Age Discrimination in Employment Act arising after the date he signs this Agreement; (ii)
Executive’s right to file a charge or participate in an investigation or proceeding conducted by
the Equal Employment Opportunity Commission (although your rights to recovery in such a proceeding
are governed by this Agreement and specifically by this Waiver and Release paragraph); or (iii)
any rights or claims Executive may have for breach of this Agreement. In addition, nothing in this
agreement shall limit or reduce any rights that Executive may have to indemnification pursuant to
the terms of the By-Laws of the Company.
9. Consideration Period: The Executive will have twenty-one (21) days from the date he
receives this offer to consider it. During this time period, Executive is hereby advised to seek
legal counsel regarding the effect of this Agreement. Changes to this Agreement, whether material
or immaterial, will not restart the consideration period. Executive may execute the Agreement in
less than twenty-one days if he so wishes.
10. Right to Rescind: Executive may rescind this Agreement for a period of seven (7)
calendar days after signing it. Any rescission must be in writing and hand-delivered or mailed to
the person listed below so that it is received no later than 5:00 p.m. (Central Time) on the
seventh calendar day after Executive signs this Agreement. If mailed, the rescission must be sent
by certified mail, return receipt requested and addressed as follows:
Xxxxx X. XxXxxxxxxx
Deputy General Counsel
Xxxxxx Aircraft Industries, Inc.
M/S 49L-29
P. O. Xxx 000000
Xxxxxx, XX 00000-0000
Deputy General Counsel
Xxxxxx Aircraft Industries, Inc.
M/S 49L-29
P. O. Xxx 000000
Xxxxxx, XX 00000-0000
If Executive rescinds this Agreement, it shall not be effective or enforceable, and Executive
will not receive the benefits described in Paragraph 2 of this Agreement, other than final pay and
accrued vacation pay.
11. Effective Date: This Agreement will not become effective until eight (8) days after
Executive signs it and returns it to the Company, and then it will only become effective if not
revoked.
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12. Effect of Breach: If Executive breaches any provision of this Agreement, Xxxxxx will
have no further obligations under Paragraph 2 of this Agreement. Executive agrees that in the event
he breaches this Agreement, Xxxxxx will be entitled to repayment of all monies paid to Executive
under Paragraph 2 (excluding payment for accrued but unused vacation under Paragraph 2(e)),
together with the attorneys’ fees and costs incurred to collect these monies and/or to seek
injunctive relief. Notwithstanding the provisions of this Paragraph, Xxxxxx acknowledges that if
Executive challenges the validity of this Agreement under the Older Workers Benefit Protection Act,
he will not be obligated to return the consideration provided under this Agreement as a
prerequisite to suit.
13. No Admission of Fault or Liability: The parties agree that this Agreement is not
intended to, and does not, constitute an admission of liability or fault on the part of either
Executive or Xxxxxx under any legal theory whatsoever.
14. Enforceable Contract/Severability: The parties agree that this Agreement is an
enforceable contract under the laws of the State of Texas. The parties further agree that to the
extent any part of this Agreement is construed to be in violation of any law, such part shall be
modified to achieve the objective of the parties to the fullest extent permitted, and the balance
of the Agreement shall remain in full force and effect.
15. Entire Agreement: The parties agree that this Agreement constitutes the entire
Agreement between Executive and Xxxxxx regarding the subject matter hereof, unless otherwise
explicitly stated herein. Any modification or addition to this Agreement must be in writing,
signed by an officer of Xxxxxx and Executive.
16. Governing Law: The parties agree that this Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Texas. The parties further agree that any
suit, action or proceeding arising out of or seeking to enforce any provision of this Agreement may
be brought only in a court of competent jurisdiction in Dallas County, Texas, and the parties
hereby consent to the jurisdiction of such courts in any such suit, action or proceeding.
17. Knowing and Voluntary Agreement: Executive affirms by his signature below that he
has entered into this Agreement knowingly, freely and voluntarily. He acknowledges that he has had
adequate time to consider the terms and conditions of this Agreement, with legal counsel if
desired, and to decide whether he wished to execute this document. Executive agrees that this
Agreement is written in language understandable to him.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their signatures below.
| Xxxxxxx X. XxXxxxx | Xxxxxx Aircraft Industries, Inc. | |||||
| By: | Xxxxxx X. Xxxxxxxx | |||||
/s/
Xxxxxxx X. XxXxxxx |
/s/ Xxxxxx X. Xxxxxxxx | |||||
| Its: | Vice President, Human Resources | |||||
Dated: October 26, 2005
|
Dated: | October 26, 2005 | ||||
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