CONSULTING AGREEMENT
CONSULTING AGREEMENT (the "Agreement") dated as of March 9, 1997, by
and between General Electric Company, a New York corporation ("Parent"), and
Xxxxxx X. Xxxxxx, Xx.("Consultant").
WHEREAS, Parent, GB Merger Corp., and Greenwich Air Services, Inc.,
a Delaware corporation (the "Company"), have entered into a Merger Agreement,
dated as of the date hereof (the "Merger Agreement"), pursuant to which the
Company will merge with and into GB Merger Corp. (the "Merger"); and
WHEREAS, Consultant has served as Chief Executive Officer and
Chairman of the Board of Directors of the Company and will resign from such
positions effective as of the consummation of the Merger; and
WHEREAS, Parent wishes to retain Consultant to provide consulting
and advisory services following his resignation from the Company and Consultant
has agreed to provide such services on the conditions set forth herein; and
WHEREAS, in connection with the Merger, the parties desire to enter
into this Agreement, to be effective at the "Effective Time" (as defined in the
Merger Agreement);
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties hereby agree as follows:
1. Effectiveness of Agreement and Consulting Engagement.
1.1. Effectiveness of Agreement. This Agreement shall become
effective as of the Effective Time. In the event that the Merger is not
consummated, this Agreement shall be null and void.
1.2. Consulting Engagement. (a) Parent hereby agrees to engage
Consultant as an independent contractor and advisor on the terms and conditions
set forth herein and Consultant hereby accepts such engagement with Parent.
Consultant's services hereunder shall consist of rendering to the best of his
ability such consulting and advisory services in connection with the Company
Businesses (as such term is defined in the Merger Agreement), as may reasonably
be requested from time to time by the Chief Executive Officer or the Board of
Directors of Parent (the "Board"), or the designee of either thereof, and to
facilitate the successful transition of the Company from its current form to a
business owned by Parent; provided, that (i) Consultant shall not be required to
travel or relocate, and (ii) the requirement that Consultant devote time to
perform services pursuant to this Agreement shall be subject to the time
available to Consultant during normal business hours after the conduct by
Consultant of his other businesses, which shall take precedence in all cases.
Consultant shall make himself available on
a reasonable basis from time to time to provide such services, but there shall
be no established schedule for Consultant's services and he shall not be
required to devote any minimum number of days to such services. Parent expressly
acknowledges and agrees that Consultant's primary occupation and business
interests shall be conducted by Consultant in endeavors other than Consultant's
services pursuant to this Agreement.
(b) Notwithstanding anything contained herein to the contrary, Consultant
may elect to have his rights and obligations hereunder assigned to a subchapter
S corporation (the "S Corp") of which he is a principal shareholder, provided
that (i) the S Corp shall rely exclusively on Consultant to act on its behalf in
providing the consulting services required hereunder, (ii) the S Corp executes a
writing in which it expressly agrees to be bound by this Agreement as
"Consultant" hereunder, and (iii) Consultant, in his individual capacity, shall
continue to be bound by the restrictive covenants contained in Section 5 hereof
Following any assignment of rights and obligations to the S Corp in accordance
with this Section 1.2(b), except as provided above or as the context would
otherwise require, all references to "Consultant" hereunder shall be deemed to
refer to the S Corp.
1.3. Independent Contractor Status. Consultant is an independent
contractor under this Agreement and shall be free to exercise his discretion and
judgment as to the methods and means of performing the services performed
hereunder. Consultant is not an employee of Parent, will not by virtue of this
Agreement be considered an employee of Parent for any purpose, and will not be
entitled to any benefits, rights, or privileges provided by Parent to its
employees under any Parent welfare or other benefit plans, including, without
limitation, Parent insurance, pension, and savings and security plans.
Consultant shall be solely responsible for the payment of any and all of his
required contributions and/or taxes including without limitation: federal, state
and/or local income taxes and withholding; workers' compensation insurance;
unemployment contribution insurance; and social security taxes. Consultant
represents that he is complying and will continue to comply with all federal,
state and local requirements regarding employment taxes and income taxes, and
will indemnify and hold Parent harmless from any action by governmental agencies
arising out of his failure to perform any such responsibilities.
1.4. No Agency. Nothing contained in this Agreement shall be
construed as creating an agency relationship between Parent or any of its
subsidiaries or affiliates ("Affiliates") and Consultant and, without Parent's
prior written consent, Consultant shall have no authority hereunder to bind
Parent or any of its Affiliates or make any commitments on Parent's or any of
its Affiliate's behalf. Consultant shall not take any action in connection with
his rendering of services hereunder which he reasonably believes would cause any
third party to assume that he has such authority.
2. Compensation.
2.1. Consulting and Non-Competition Fee. As compensation for the
consulting services to be performed, and the restrictive covenants to be
complied with pursuant to Section S. by Consultant hereunder, (i) Parent shall
pay Consultant a fee each year of the Consulting Period which shall be payable
in equal installments, no less frequently than quarterly in advance, at the
annual rate of $1 million and (ii) Parent shall make a $1 million payment each
year of the Consulting Period in the name of Consultant to a charitable
organization chosen by Consultant (the "Fees").
2.2. Expenses. Pursuant to Parent's customary policies in force at
the time of payment, Consultant shall be promptly reimbursed for all authorized
expenses properly and reasonably incurred by him on behalf of Parent or its
Affiliates in the performance of his duties hereunder upon presentation of
appropriate documentation consistent with Parent's policies concerning expense
reimbursement.
3. Consulting Period.
Consultant's engagement under this Agreement shall commence as of
the Effective Time, and shall terminate on the fifth anniversary thereof (the
"Consulting Period"), unless terminated earlier pursuant to Section 4. Section 5
shall survive any termination of this Agreement and shall remain in full force
and effect. In the event Consultant dies or becomes permanently disabled during
the Consulting Period, the Fees shall continue to be paid to him or, in the
event of his death, to his beneficiary, until the end of the Consulting Period
in accordance with the terms of this Agreement.
4. Termination.
4.1. Termination by Parent for Cause. (a) The Consulting Period may
be terminated at any time by Parent for Cause (as defined below). Upon such a
termination, Parent shall have no obligation to Consultant other than the
payment of Consultant's earned but unpaid compensation through the effective
date of such termination and reimbursement of authorized expenses pursuant to
Section 2.2 of this Agreement.
(b) For purposes of this Agreement, the term "Cause" shall mean
either of the following:
(i) Consultant's conviction of a criminal offense arising out
of a breach of trust, fraud, or embezzlement against Parent; or
(ii) Any breach by Consultant of any material provision of
Section 5 of
5. Restrictive Covenants.
5.1. Confidentiality. Consultant understands and acknowledges that
during his employment with the Company prior to this Agreement and through the
course of his consulting engagement pursuant to this Agreement, he has had and
will have access to and has learned and will learn (i) information proprietary
to Parent and its Affiliates that concerns the operation and methodology of the
Company Businesses as the same are hereafter conducted by the Parent and its
Affiliates (the "Aircraft Engine Services Business") or (ii) other information
proprietary to Parent and its Affiliates, including, without limitation, trade
secrets, processes, patent and trademark applications, product development,
price, customer and supply lists, pricing and marketing plans, policies and
strategies, details of client and consultant contracts, operations methods,
product development techniques, business acquisition plans, new personnel
acquisition plans and all other confidential information with respect to the
Aircraft Engine Services Business (collectively, "Proprietary Information").
Consultant agrees that, at all times (including following termination of the
Consulting Period), he will keep confidential and will not disclose directly or
indirectly any such Proprietary Information to any third party, except as
required to fulfill his duties hereunder, and will not misuse, misappropriate or
exploit such Proprietary Information in any way. The restrictions contained
herein shall not apply to any information which (a) was already available to the
public at the time of disclosure, or subsequently become available to the
public, otherwise than by breach of this Agreement, or (b)was disclosed due to a
requirement of law. Upon any termination of the Consulting Period, Consultant
shall promptly return to Parent and its Affiliates all documents, computer
disks, records, notebooks and similar repositories of any Proprietary
Information in his possession, including copies thereof.
5.2. Restrictions on Competitive Employment. (a) During the period
beginning on the Effective Time and ending one year after the cessation of the
consulting engagement of Consultant for any reason (the "Restricted Period"),
Consultant shall not (as principal, agent, employee, consultant or otherwise),
anywhere worldwide, directly or indirectly, without the prior written approval
of Parent, engage in activities for, or render services to (including, without
limitation, computer programming, data entry, sales or product development), any
firm or business (i) materially engaged in direct or indirect competition with
the Company, the Parent and its Affiliates in the business of (x) repair and
overhaul of aircraft and aeroderivative gas turbine engines, components,
accessories and structural flight control services or (y) sale and distribution
of aircraft and aeroderivative gas turbine engines, components, assemblies,
modules and units of Aircraft Engine Services Business whether or not in the
geographic areas in which such lines of business are currently conducted by
the Company, the Parent, or its Affiliates (the "Core Aircraft Engine Services
Business"), (ii) materially engaged in developing products or services
competitive with those of the Core Aircraft Engine Services Business (all of the
businesses in clauses (i) and (ii) collectively, the "Competitive Business").
Notwithstanding the foregoing, (x) Consultant may have an interest consisting of
publicly traded securities constituting less than 5% percent of any class of
publicly traded securities in any public company engaged in a Competitive
Business so long as he is not employed by and does not consult with, or become a
director of or otherwise engage in any activities for, such company, and (y)
Consultant may continue to operate World Air Leases, it being understood and
agreed that the business of World Air Leases shall not be considered a
Competitive Business hereunder to the extent that it continues to engage in the
kinds of activities in which it is engaged as of the date hereof Notwithstanding
anything contained in this Section 5, Consultant agrees that Consultant shall
not, at any time during the Restricted Period, deliberately take any action
which (I) would interfere with any contractual or customer relationships of
Parent or its Affiliates in respect of the Aircraft Engine Services Business, or
any relationship with the employees of, or vendors or contractors to, Parent or
its Affiliates in respect of the Aircraft Engine Services Business, or (II)
would result in a material diminution of business to Parent or its Affiliates in
respect of the Core Aircraft Engine Services Business.
(b) During the Restricted Period (or, if shorter, until the fifth
anniversary of the Effective Time), Consultant shall not pursue, assist, or
become otherwise involved in any capacity with any transaction or proposed
transaction relating to (x) the repair and overhaul of aircraft and
aeroderivative gas turbine engines, components, accessories and structural
flight control services or (y) the sale and distribution of aircraft and
aeroderivative gas turbine engines, components, assemblies, modules and units
which Consultant participated in or was first advised of in connection with the
performance of his services as Consultant under this Agreement unless Consultant
first apprises Parent of such transaction and Parent declines to pursue such
transaction.
5.3. Remedies. Consultant acknowledges and agrees that damages for a
breach or threatened breach of any of the covenants set forth in this Section 5
will be difficult to determine and will not afford a full and adequate remedy,
and therefore agrees that Parent, in addition to seeking actual damages in
connection therewith, may seek specific enforcement of any such covenant in any
court of competent jurisdiction, including, without limitation, by the issuance
of a temporary or permanent injunction upon posting of adequate bond in respect
thereof
6. Notices. Any notice or communication given by either party hereto to
the other shall be in writing and personally
delivered or mailed by registered or certified mail, return receipt requested,
postage prepaid, to the following addresses:
(a) if to Parent:
General Electric Company
One Xxxxxxx Way
Mail Drop J104
Xxxxxxxx, Xxxx 00000-0000
Attn: Vice President & General Counsel
With a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, III, Esq.
(b) if to Consultant:
With a copy to:
Greenberg, Traurig, Hoffman,
Lipoff, Xxxxx & Quentel, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Any notice shall be deemed given when actually delivered to such
address, or five days after such notice has been mailed or one day after such
notice has been sent by Federal Express, whichever comes earliest. Any person
entitled to receive notice may designate in writing, by notice to the other,
such other address to which notices to such person shall thereafter be sent.
7. Miscellaneous.
7.1. Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes
upon its effectiveness all other prior agreements, plans, programs and
understandings between the parties with respect to such subject matter hereof
7.2. Amendment; Waiver. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
7.3. Binding Effect: Assignment. The rights and obligations of this
Agreement shall bind and inure to the benefit
of any successor of Parent by reorganization merger or consolidation, or any
assignee of all or substantially all of Parent's business and properties. Parent
may assign its rights and obligations under this Agreement to any of its
majority-owned Affiliates (provided that such assignment shall automatically
terminate if such Affiliate shall cease to be majority-owned by Parent) without
the consent of Consultant, but shall remain liable for any payments provided
hereunder not timely made by any Affiliate assignee. Except as specifically
provided herein, Consultant's rights or obligations under this Agreement may not
be assigned by Consultant.
7.4. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
7.5. Governing Law. This Agreement shall be construed in accordance
with and governed for all purposes by the laws and public policy (other than
conflict of laws principles) of the State of New York applicable to contracts
executed and to be wholly performed within such State.
7.6. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
New York, New York in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction.
7.7. Further Assurances. Each of the parties agrees to execute,
acknowledge, deliver and perform, and cause to be executed, acknowledged,
delivered and performed, at any time and from time to time, as the case may be,
all such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably necessary to carry out the
provisions or intent of this Agreement.
7.8. Severability. The parties have carefully reviewed the
provisions of His Agreement and agree that they are fair and equitable. However,
in light of the possibility of differing interpretations of law and changes in
circumstances, the parties agree that if any one or more of the provisions of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions of this
Agreement shall, to the extent permitted by law, remain in full force and effect
and shall in no way be affected, impaired or invalidated. Moreover, if any of
the provisions contained in this Agreement is determined by a court of competent
jurisdiction to be excessively broad as to duration, activity, geographic
application or subject, it shall be construed, by limiting or reducing it to the
extent legally permitted, so as to be enforceable to the extent compatible with
then applicable law.
7.9. Enforceability By Beneficiaries. This Agreement shall inure to
the benefit of and be enforceable by Consultant's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Consultant should die while any amount would still be
payable to Consultant hereunder if Consultant had continued to live, all such
amounts, shall be paid in accordance with the terms of this Agreement to his
devises, legates or other designee or, if there is no such designee, to his
estate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CONSULTANT
/s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, Xx.
