Exhibit 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of January 8, 2002,
is entered into by and between Advanced Aerodynamics & Structures, Inc., a
California corporation (the "Company"), and Xxxx Xxxxxx, (the "Employee").
INTRODUCTION
The parties hereto desire to provide for the employment of the Employee
with the Company. In order to accomplish such purposes and in consideration of
the terms, covenants and conditions hereinafter set forth, the parties hereby
enter into this Agreement.
ARTICLE 7
EMPLOYMENT; TERM; DUTIES
7.1. EMPLOYMENT. Upon the terms and conditions hereinafter set
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forth, the Company hereby employs the Employee, and the Employee hereby accepts
employment, as Executive Vice President of Group Operations and Engineering of
the Company.
7.2. TERM. Unless sooner terminated as hereinafter provided, the
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Employee's employment hereunder shall be for a term (the "Term") commencing on
the date hereof and terminating on January 8, 2005. Such employment may continue
in accordance with the terms of this Agreement upon mutual agreement of the
parties. On or before March 1, 2005, Employee shall notify the board of
directors of Company of the ending date of the Term, whereupon Company may elect
to give the Employee nine (9) months' notice of its intent not to extend the
Term. Upon expiration of the Term, Employee shall receive one month of the
Severance Payments and Benefits set forth in Section 4.03 for each month during
which the Company failed to give notice of its intent not to extend the Term.
7.3. DUTIES. During the Term, the Employee shall perform such duties
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for the Company as are prescribed by the Bylaws of the Company as of the date of
this Agreement and such additional duties, consistent with such Bylaws and his
position hereunder, as may be assigned to him from time to time by the Board of
Directors of the Company. The Employee shall work for the Company exclusively,
and devote his best efforts, attention and energies to the performance of his
duties hereunder.
ARTICLE 8
COMPENSATION
8.1. COMPENSATION. For all services rendered by the Employee
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hereunder and all covenants and conditions undertaken by him pursuant to this
Agreement, the Company shall pay, and the Employee shall accept, as
compensation, an annual base salary ("Base Salary") of Two Hundred Thousand
Dollars ($200,000), payable in equal bi-weekly installments. The Employee shall
also be paid such bonuses and other compensation as shall be determined from
time to time by the Board of Directors in its sole discretion based on the
performance of the Company.
8.2 STOCK/WARRANTS. As additional consideration for the services to
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be rendered by Employee hereunder, Employee shall be issued 811,216 shares of
the Class A Common Stock of Employer subject to the to the Stock Restriction
Agreement attached hereto as Exhibit 1. Within thirty (30) days following the
final day of each calendar quarter, through January 8, 2005, and as of the date
of the termination of Employee's employment by the Company (each such date being
referred to herein as a "Quarterly Measurement Date"), Employee shall be issued
Additional Shares in an amount such that the total number of shares issued to
Employee pursuant to this Agreement shall equal two percent (2%) of the issued
and outstanding shares of the Class A and Class B Common Stock of the
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Company (and including such other classes of stock which the Company may issue
during the Term of this agreement) as of such Quarterly Measurement Date, and
such Additional Shares shall be vested on a prorata basis such that all shares
have been vested by the end of The Term. Additional Shares will continue to be
issued until the later of a) The Term plus 185 days or b) the Company achieves
annual revenue exceeding $ 250 Million. Employee may elect to either pay an
amount sufficient to cover any withholding tax obligation of the Company, or to
have the Company withhold part of the shares due to him to cover the withholding
obligations arising from the vesting of these shares. Employee will be given the
option to novate to a modified stock plan and agreement that is currently being
considered and drafted by the Board.
ARTICLE 9
BENEFITS
9.1. BENEFITS. During the Term, the Employee shall be provided, at
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Company's expense, a PPOS health insurance plan for the Employee and family and
the accident, disability or hospitalization insurance plans, pension plans or
retirement plans as the Board of Directors makes available to the executive
employees of the Company as a group. Employee shall be entitled to 3 weeks of
vacation annually.
9.2. LIFE INSURANCE. During the Term, the Company will purchase and
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maintain a term life insurance policy insuring the life of the Employee in the
amount of $300,000, and the Employee shall be entitled to designate the
beneficiary of the policy.
9.3. HOUSING. The Company agrees to reimburse Employee for the costs
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of suitable housing in Southern California, not to exceed $2,500 per month
during the term of this Agreement. Employee shall bear the cost of utilities and
maintenance for such housing
ARTICLE 10
TERMINATION; DEATH; DISABILITY
10.1. TERMINATION OF EMPLOYMENT WITH CAUSE. If the Employee (a)
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breaches any material provision of this Agreement or fails to satisfactorily
perform his obligations hereunder in a fashion that has a material and
significantly adverse effect on the operations of the Company, and such breach
and/or failure to perform is not remedied within thirty (30) days after written
notice thereof from the Company (except that any violation of Article V of this
Agreement may at the Company's discretion result in immediate termination); (b)
has been convicted of or entered a guilty plea to any felony; (c) has committed
any act of fraud, misappropriation of funds, embezzlement or any other act of
moral turpitude as determined by the Board of Directors, in good faith; or (d)
has engaged in willful, reckless, fraudulent, dishonest or grossly negligent
misconduct; then, in addition to any other remedies available to it at law, in
equity or as set forth in this Agreement, the Company shall have the right, upon
written notice to the Employee, to immediately terminate his employment (a
"Termination With Cause") hereunder, without any further liability or obligation
to him hereunder or otherwise in respect of his employment, other than its
obligation to abide by the terms of the attached Stock Restriction Agreement and
its obligation to pay accrued but unpaid Base Salary and vacation time as of the
date of termination.
10.2. RESIGNATION. If the Employee resigns, this Agreement shall
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immediately terminate and the Company shall have no further liability or
obligation to Employee hereunder or otherwise in respect of his employment,
other than its obligation to pay accrued but unpaid Base Salary and vacation
time as of the date of resignation and to abide by the terms of the attached
Stock Restriction Agreement. Employee shall comply with the provisions of
Paragraph V, below, however.
10.3. TERMINATION OF EMPLOYMENT WITHOUT CAUSE. Notwithstanding any
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provision to the contrary herein, the Company may at any time, in its sole and
absolute discretion and for any or no reason, terminate the employment of the
Employee hereunder (change of control of 50% or more of the voting shares of
company, through sale, merger, consolidation, or other transaction, shall
constitute termination without cause at the election of the Employee) PROVIDED,
that if such termination is not a Termination With Cause, the Company shall pay
and/or provide the Employee as follows:
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(a) any accrued but unpaid Base Salary as of the date of the
termination as and when such amount is due and payable hereunder.
(b) provided Employee has not accepted employment with another
employer (as provided below), Employer shall pay monthly to Employee one-twelfth
(1/12) of the Base Salary in effect as of the date of such termination (the
"Severance Payments") for a period of twelve (12) months (the "Severance
Period"), with the first payment being made on the thirtieth (30th) day
following such date of termination and with each subsequent payment being made
on the same day of each successive month. The obligation of the Company to
provide the Benefits shall continue for twelve months following the date of such
termination or expiration without offer of renewal, PROVIDED, that the Company
may, at its option, pay for and acquire insurance which will provide to Employee
the Benefits for the duration of the Severance Period.
Notwithstanding the foregoing paragraph (b), the Severance Period,
Severance Payments and the provision of Benefits shall terminate when (i) the
Employee has secured new employment with a base salary equal to or greater than
the Base Salary in effect as of the date of termination. If the Employee accepts
new employment with a base salary (the "New Salary") less than the Base Salary
in effect as of the date of termination and the Severance Period set forth above
has not expired, the Company, in lieu of the remaining Severance Payments to be
made, shall pay the Employee the difference between the total amount of the
remaining Severance Payments due and the total amount of New Salary payable
during the remaining applicable Severance Period.
(c) a cash payment immediately upon the date of termination
equal to the Employee's Base Salary on a daily basis (computed on a 260 workday
year) in effect on the date of termination multiplied by the number of accrued
and unused vacation days at the date of termination.
(d) Restricted stock and such Additional Shares as required to
make employee stock equal to 5% of the shares then outstanding will vest upon
termination.
(e) The provisions of article 5 below will not apply unless
Employee is being paid a salary pursuant to this agreement.
10.4. DEATH; DISABILITY. Employee's employment hereunder shall
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terminate (x) upon his death or (y) if the Employee becomes Disabled (as such
term is hereinafter defined), at the election of the Company by written notice
to the Employee. In the event of a termination of the Employee's employment for
death or Disability, the Company shall pay the Employee (or his legal
representatives, as the case may be) as follows:
(a) any accrued but unpaid compensation for Base Salary as of
the date of death or termination for Disability, as and when such amounts are
due and payable hereunder;
(b) a cash payment payable on the date of termination equal to
the Employee's Base Salary on a daily basis (computed on a 260 workday year) in
effect on the date of death or termination, multiplied by the number of accrued
and unused vacation days at the date of such termination; and
(c) in the event the Employee is Disabled, the Company will
continue to pay Base Salary and Benefits for the Employee for a period of six
(6) months, until and unless the Employee obtains other employment with a
comparable base salary within such period, PROVIDED, that the Company may, at
its option, pay for and acquire insurance which will provide to Employee the
Base Salary and Benefits for the duration of the Severance Period.
(d) Stock and Additional Shares vests pro-rata to the date of
death.
For the purpose of this Agreement, the Employee shall be deemed to be
"Disabled" or have a "Disability" if he has been unable to perform his duties
hereunder for three (3) consecutive months or ninety (90) days in any twelve
(12) consecutive month period, or if a physician certifies that disability will
continue for 90 days, or if Employee has been unable to work for 150 days during
any 16 month period as determined in good faith by the Board of Directors of the
Company and in accordance with applicable laws.
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The Employee acknowledges that the payments referred to in this Section
4.03 constitute the only payments to which the Employee (or his legal
representatives, as the case may be) shall be entitled to receive from the
Company hereunder in the event of a termination of his employment for death or
Disability, and that except for such payments the Company shall have no further
liability or obligation to him (or his legal representatives, as the case may
be) hereunder or otherwise in respect of his employment.
ARTICLE 11
INVENTIONS; NON-DISCLOSURE; NON-COMPETITION
11.1. INVENTIONS. All processes, technologies and inventions relating
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to the aircraft business (collectively, "Inventions"), including new
contributions, improvements, ideas, discoveries, trademarks and trade names,
conceived, developed, invented, made or found by the Employee, alone or with
others, during his employment by the Company, whether or not patentable and
whether or not conceived, developed, invented, made or found on the Company's
time or with the use of the Company's facilities or materials, shall be the
property of the Company and shall be promptly and fully disclosed by the
Employee to the Company. The Employee shall perform all necessary acts
(including, without limitation, executing and delivering any confirmatory
assignments, documents or instruments requested by the Company) to vest title to
any such Inventions in the Company and to enable the Company, at its expense, to
secure and maintain domestic and/or foreign patents or any other rights for such
Inventions.
11.2. NON-DISCLOSURE. The Employee shall not, at any time during the
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Term or thereafter, directly or indirectly disclose or furnish to any other
person, firm or corporation, except in the course of the proper performance of
his duties hereunder (a) any information relating to any process, technique or
procedure used by the Company which is not, specifically, a matter of public
knowledge; or (b) any information relating to the operations or financial status
of the Company (including, without limitation, all financial data and sources of
financing), which information is not specifically a matter of public knowledge;
or (c) any information of a confidential nature obtained as a result of his
present or future relationship with the Company, which information is not
specifically a matter of public knowledge; or (d) the name, address or other
information relating to any customer or supplier of the Company; or (e) any
other trade secrets of the Company. Promptly upon the expiration or termination
of the Employee's employment hereunder for any reason, the Employee (or his
personal representative's as the case may be) shall surrender to the Company all
documents, drawings, work papers, lists, memoranda, records and other data
(including all copies) constituting or pertaining in any way to any of the
foregoing information.
11.3. NON-COMPETITION. The Employee shall not compete with the Company
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for a period of 12 months after his resignation or termination with cause by
being employed in a management capacity with another company that manufactures
piston powered general aviation aircraft.
11.4. NON-SOLICITATION. The Employee shall not, during the Term, and
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for an eighteen (18) month period following the date of a resignation by
Employee or a Termination With Cause or without cause, directly or indirectly
solicit or attempt to solicit the Company's customers, suppliers or any of its
employees.
11.5. BREACH OF PROVISIONS. If a party breaches any of the provisions
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of this Article V, or in the event that any such breach is threatened, in
addition to and without limiting or waiving any other remedies available at law
or in equity, the other party shall be entitled to immediate injunctive relief
in any court, domestic or foreign, having the capacity to grant such relief, to
restrain any such breach or threatened breach and to enforce the provisions of
this Article V. The parties acknowledge and agree that there is no adequate
remedy at law for any such breach or threatened breach and, in the event that
any action or proceeding is brought seeking injunctive relief, the parties shall
not use as a defense thereto that there is an adequate remedy at law.
11.6. REASONABLE RESTRICTIONS. The parties acknowledge that the
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foregoing restrictions, as well as the duration and the territorial scope
thereof as set forth in this Article V, are under all of the circumstances
reasonable and necessary for the protection of the Company and its business.
11.7. DEFINITION. For purposes of this Article V, the term "Company"
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shall be deemed to include any subsidiary or affiliate of the Company.
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ARTICLE 12
MISCELLANEOUS
12.1. BINDING EFFECT. This Agreement shall be binding upon and inure
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to the benefit of the parties hereto and their respective legal representatives,
heirs, distributees, successors and assigns; PROVIDED, that the rights and
obligations of the Employee hereunder shall not be assignable by him.
12.2. NOTICES. Any notice provided for herein shall be in writing and
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shall be deemed to have been given or made (a) when personally delivered or (b)
when sent by telecopier and confirmed within forty-eight (48) hours by letter
mailed or delivered to the party to be notified at its or his address set forth
herein; or three (3) days after being sent by registered or certified mail,
return receipt requested, to the address of the other party set forth or to such
other address as may be specified by notice given in accordance with this
Section 6.02:
If to the Company: Advanced Aerodynamics & Structures, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Employee: Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
12.3. SEVERABILITY. If any provision of this Agreement, or portion
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thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained herein. In
addition, any such invalid or unenforceable provision or portion thereof shall
be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and
enforceable.
12.4. WAIVER. No waiver by a party hereto of a breach or default
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hereunder by the other party shall be considered valid, unless expressed in a
writing signed by such first party, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or any other nature.
12.5. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
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between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements between the Company and Employee, whether written
or oral, relating to any or all matters covered by and contained or otherwise
dealt with in this Agreement. This Agreement does not constitute a commitment of
the Company with regard to the Employee's employment, express or implied, other
than to the extent expressly provided for herein.
12.6. AMENDMENT. No modification, change or amendment of this
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Agreement or any of its provisions shall be valid, unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.
12.7. AUTHORITY. The parties each represent and warrant that they have
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the power, authority and right to enter into this Agreement and to carry out and
perform the terms, covenants and conditions hereof.
12.8. TITLES. The titles of the Articles and Sections of this
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Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.
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12.9. APPLICABLE LAW. This Agreement, and all of the rights and
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obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
substantive laws of the State of California without giving effect to principles
relating to conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:_____________________________________________
Xxxxxx Xxxxxxx
Chairman, Compensation Committee and Director
EMPLOYEE
________________________________________________
Xxxx Xxxxxx
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