Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of the 13 day of
September, 2005 (the "Effective Date"), is by and between SPIRIT AEROSYSTEMS,
INC., a Delaware corporation (the "Company"), and H. XXXXX XXXXXX ("Employee").
Recitals
WHEREAS, the Company is engaged in the manufacture, fabrication,
maintenance, repair, overhaul, and modification of aircraft and aircraft
components and markets and sells its services and products to its customers
throughout the world (the "Business"); and
WHEREAS, the Company desires to hire Employee as its Senior Vice President
of Sales/Marketing and to perform such other services as the Company may direct;
and
WHEREAS, in the course of performing his duties for the Company, Employee
is likely to gain certain confidential and proprietary information belonging to
the Company, develop relationships that are vital to the Company's goodwill, and
acquire other important benefits to which the Company has a protectable
interest;
WHEREAS, Employee has been working in sales and marketing of aircraft
component services and products for more than 20 years, developing experience
and contacts within the industry, and
WHEREAS, the Company has agreed to hire Employee and Employee has agreed to
accept such employment by the Company upon the terms, conditions, and
restrictions contained in this Agreement.
Agreement
NOW THEREFORE, in consideration of the foregoing, and the representations,
warranties, and covenants hereinafter, the parties hereto agree as follows:
Section 1. Employment. In reliance on the representations and warranties made
herein, the Company hereby hires Employee to be its Senior Vice President of
Sales/Marketing, and to perform such duties and services in and about the
business of the Company as may from time to time be assigned to Employee. The
job title and duties referred to in the preceding sentence may be changed by the
Company in the Company's sole discretion at any time. Employee shall devote
Employee's full time to this employment.
Section 2. Performance. Employee shall use Employee's best efforts and skill to
faithfully enhance and promote the welfare and best interests of the Company.
The Employee shall strictly obey all rules and regulations of the Company,
follow all laws and regulations of appropriate
government authorities, and be governed by reasonable decisions and instructions
of the Company as are consistent with job duties as described above.
Section 3. Executive Incentive Plan. Upon entering into this Agreement, Employee
shall invest not less than $200,000 in cash in exchange for shares of the
Company's parent's common stock, which investment will be matched by the Company
on a 4 to 1 basis by a grant of restricted shares, subject to and in accordance
with the terms and conditions of the Company's Executive Incentive Plan ("EIP").
Such investment shall be made by the Company applying $200,000 from the
Sign-on-Bonus (as specified in Section 4(b) below). In connection with the
foregoing and as a condition to the purchase of such shares, Employee agrees to
execute such documents and take such other action as may reasonably be required
by Company or the Company's parent, including, but not limited to, executing a
subscription agreement in a form satisfactory to the Company's parent and
executing a counterpart to the Investor Stockholders Agreement, dated as of June
16, 2005, by and between the Company's parent and the stockholders of the
Company's parent.
Section 4. Compensation. Except as otherwise provided for herein, for all
services to be performed by the Employee in any capacity hereunder, including
without limitation any services as an officer, director, member of any
committee, or any other duties assigned him, throughout the Employment Period
the Company shall pay or provide Employee with the following, and Employee shall
accept the same, as compensation for the performance of his undertakings and the
services to be rendered by him:
(a) Base Salary. Initially, Employee will be entitled to an annual salary
of Two Hundred Thousand Dollars ($200,000) (the "Base Salary"), which shall be
paid in accordance with the Company's policies and procedures. The Base Salary
may not be reduced for any reason during the first two years of Employee's
employment with the Company unless the salaries of other comparable level
executives with the Company are also reduced. Thereafter, the Employee's base
salary may be changed at annual intervals, based on Employee's and Company's
performance, which may include, without limitation, participation in a period
salary evaluation program on the same basis as other employees of the Company of
similar position.
(b) Sign on Bonus. On the Effective Date, the Company shall pay to Employee
(or, as applicable, apply to the benefit of Employee as specified herein) an
advance payment of (i) Two Hundred Thousand Dollars ($200,000), and (ii) an
amount equal to all taxes associated with Employee's receipt of the foregoing
payment so that after payment of all such taxes by Employee, Employee shall have
the total amount of the foregoing payment; which advance payment shall be
forgiven if Employee shall remain employed with the Company for a period of not
less than one (1) year after the Effective Date. This advance payment shall also
be forgiven if Employee is terminated without cause during the first year of
this Agreement. Upon termination for cause within the first year of Employee's
employment with the Company, the Company may deduct from Employee's paycheck(s)
or other amounts owed Employee such advance payment (or any other advances
previously made to Employee). To the extent that such deductions are
insufficient to fully reimburse the Company, Employee shall be liable to the
Company for the balance of the advances previously received.
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(c) Annual Incentive Compensation. Employee shall be provided target
incentive compensation (either in cash, phantom stock, or Common Stock of the
Company's parent, as specified by the administrative committee of the Company's
Short-Term Incentive Plan ("STIP")) pursuant to the terns and conditions of the
STIP. Employee shall be treated as qualified to participate in the STIP during
his first year of employment, even though he will not have been employed for an
entire year at the time of such calculation and payment. The first year
incentives shall include one hundred twenty percent (120%) of Base Salary in
cash, stock, or phantom stock if target incentives are reached or exceeded
(without reduction for partial periods), but if the target incentives are not
reached, Employee shall only be entitled to a target incentive compensation (if
any) otherwise provided by Company policy.
(d) Deferred Compensation Plan. From and after the Effective Date, Employee
shall eligible to participate in the Mid-Western Aircraft Systems Holding, Inc.
Deferred Compensation Plan ("DCP") pursuant to the terms and conditions of the
DCP.
(e) Relocation Expenses. The Company will reimburse Employee's reasonable
expenses under the Company's Relocation Procedure, Tier II for (1) moving
Employee and Employee's family and tangible personal property to Wichita,
Kansas, and (2) reasonable temporary living expenses in Wichita, Kansas.
(f) Other Benefit Plans. Employee shall also participate in the Company's
other employee benefit plans, policies, practices, and arrangements as the same
may be offered to Employee from time to time, including without limitation any
defined benefit retirement plan, excess or supplementary plan, profit sharing
plan, savings plan, health and dental plan, disability plan, survivor income and
life insurance plan, executive financial planning program, other arrangement, or
any successors thereto, the STIP, the EIP, the DCP, and such other benefit plans
(collectively hereinafter referred to as the "Benefit Plans"). The Employee's
entitlement to any other compensation or benefits shall be determined in
accordance with the terms and conditions of the Benefit Plans and other
applicable programs, practices, and arrangements then in effect.
(g) Vacation. An amount of paid vacation to which an employee with fifteen
(15) years of service with the Company is entitled to receive under the
Company's vacation policy (a minimum of four weeks), and all paid holidays given
by the Company to employees in Employee's position, or similar positions.
(h) Fringe Benefits. All fringe benefits and perquisites all in accordance
with the Company's policies as the same may be amended from time to time.
(i) Withholding Taxes. The Company shall have the right to deduct from all
payments made to Employee hereunder any federal, state, or local taxes required
by law to be withheld.
(j) Expenses. During Employee's employment, the Company shall promptly pay
or reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in the performance of duties hereunder in accordance with the Company's
policies and procedures then in effect.
Section 5. Restrictions.
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(a) Acknowledgements. Employee acknowledges and agrees that: (1) during the
term of Employee's employment, because of the nature of Employee's
responsibilities and the resources provided by the Company, Employee will
acquire valuable and confidential skills, information, trade secrets, and
relationships with respect to the Company's business practices and operations;
(2) Employee may develop on behalf of the Company a personal acquaintance and/or
relationship with various persons, including, but not limited to, customers and
suppliers, which acquaintances may constitute the Employee's only contact with
such persons, and, as a consequence of the foregoing, Employee will occupy a
position of trust and confidence with respect to the Company's affairs; (3) the
Business involves the marketing and sale of the Company's products and services
to customers throughout the entire world, that the Company's competitors, both
in the United States and internationally, consist of both domestic and
international businesses, and the services to be performed by Employee for the
Company involve aspects of both the Company's domestic and international
business; (4) it would be impossible or impractical for Employee to perform his
duties for the Company without access to the Company's confidential and
proprietary information and contact with persons that are valuable to the
goodwill of the Company. Employee acknowledges that if he went to work for or
otherwise performs services for a third party engaged in a business
substantially similar to the Business, the disclosure by Employee to a third
party of such confidential and proprietary information and/or the exploitation
of such relationships would be inevitable.
(b) Reasonableness. In view of the foregoing and in consideration of the
remuneration to be paid to Employee, Employee agrees that it is reasonable and
necessary for the protection of the goodwill and business of the Company that
the Employee make the covenants contained in this Agreement regarding the
conduct of Employee during and subsequent to Employee's employment by the
Company, and that the Company will suffer irreparable injury if Employee engages
in conduct prohibited by this Agreement.
(c) Non-Compete. (i) During the term of Employee's employment by the
Company, (ii) if Employee's employment is terminated by Employee or by the
Company with cause, then for a period of a period of two (2) years after such
termination, or (iii) if Employee's employment is terminated by the Company
without cause prior to the expiration of the two (2) years following the
Effective Date, then for a period of twelve (12) month after such termination:
neither Employee, nor any other person or entity with Employee's assistance, nor
any entity in which Employee directly or indirectly has any interest of any kind
(without limitation) shall anywhere in the world, directly or indirectly own,
manage, operate, control, be employed by, solicit sales for, invest in,
participate in, advise, consult with, or be connected with the ownership,
management, operation, or control of any business which is engaged, in whole or
in part, in the Business, or any business that is competitive therewith or any
portion thereof, except for the exclusive benefit of the Company.
(d) No Raiding. In addition, (i) during the term of Employee's employment
by the Company, (ii) if Employee's employment is terminated by Employee or by
the Company with cause, then for a period of a period of two (2) years after
such termination, or (iii) if Employee's employment is terminated by the Company
without cause prior to the expiration of the two (2) years following the
Effective Date, then for a period of twelve (12) month after such termination:
neither the Employee nor any person or entity with his assistance nor any entity
which the Employee or any person with his assistance or any person who he
directly or indirectly controls
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shall, directly or indirectly, (1) solicit or take any action to induce any
employee to quit or terminate their employment with the Company or the Company's
affiliates, or (2) employ as an employee, independent contractor, consultant, or
in any other position, any person who was an employee of the Company or the
Company's affiliates during the aforementioned period.
(e) Confidentiality. Without the express written consent of the Company,
Employee shall not at any time (either during or after the termination of the
term of Employee's employment) use (other than for the benefit of the Company)
or disclose to any other business entity proprietary or confidential information
concerning the Company, the Company's parent's, or any of their affiliates, or
the Company's, the Company's parent, or any of their affiliates' trade secrets
or inventions of which Employee has gained knowledge during his employment with
the Company. This paragraph shall not apply to any such information that: (1)
Employee is required to disclose by law; (2) has been otherwise disseminated,
disclosed, or made available to the public; (3) was obtained after his
employment with the Company ended and from some source other than the Company,
which source was under no obligation of confidentiality.
(f) Effect of Breach. Employee agrees that a breach of this Section 5
cannot adequately be compensated by money damages and, therefore, the Company
shall be entitled, in addition to any other right or remedy available to it
(including, but not limited to, an action for damages), to an injunction
restraining such breach or a threatened breach and to specific performance of
such provisions, and Employee hereby consents to the issuance of such injunction
and to the ordering of specific performance, without the requirement of the
Company to post a bond or other security.
(g) Other Rights Preserved. Nothing in this Section eliminates or
diminishes rights which the Company may have with respect to the subject matter,
hereof under other agreements, the governing statutes, or under provisions of
law, equity, or otherwise. Without limiting the foregoing, this section does not
limit any rights the Company may have under any agreement with Employee
regarding trade secrets and confidential information.
Section 6. Termination. This Agreement shall terminate upon the following
circumstances:
(a) Without Cause. At any time at the election of either Employee or the
Company for any reason or no reason, without cause, but subject to the
provisions of this Agreement. It is expressly understood that Employee's
employment is strictly "at will."
(b) Cause. At any time at the election of the Company for Cause. "Cause"
for this purpose shall mean (i) Employee committing a material breach of this
Agreement or acts involving moral turpitude, including fraud, dishonesty,
disclosure of confidential information, or the commission of a felony, or direct
and deliberate acts constituting a material breach of his duty of loyalty to the
Company; (ii) Employee willfully or continuously refusing to perform the
material duties reasonably assigned to him by the Company that are consistent
with the provisions of this Agreement and not resulting from a Disability; or
(iii) the inability of Employee to obtain and maintain appropriate United States
security clearances.
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(c) Disability. Employee's death or his being unable to render the services
required to be rendered by him during the Employment Period for a period of one
hundred eighty (180) days during any twelve-month period ("Disability").
Section 7. Effect of Termination.
(a) If Employee's employment is terminated (i) by Employee, or (ii) by the
Company for Cause, the Company shall pay Employee's compensation only through
the last day of the Employment Period (less any amounts the Company may off-set
or deduct as specified in this Agreement), and, except as may otherwise be
expressly provided in this Agreement or in any Benefit Plan, the Company shall
have no further obligation to Employee.
(b) If Employee's employment is terminated by the Company prior to the
expiration of two (2) years following the Effective Date for any reason other
than Cause and for so long as Employee is not in breach of his continuing
obligations under Section 5, the Company shall (i) continue to pay Employee an
amount equal to his Base Salary in effect immediately prior to the termination
of his employment for a period of twelve (12) months (less any amounts the
Company may off-set or deduct as specified in this Agreement), and (ii) pay the
costs of COBRA medical and dental benefits coverage which are offered to
Employee after termination for a period of twelve (12) months. Except as may
otherwise be expressly provided in this Agreement or in any Benefit Plan, the
Company shall have no further obligation to Employee.
(c) On termination of employment, Employee shall deliver all trade secret,
confidential information, records, notes, data, memoranda, and equipment of any
nature that are in Employee's possession or under his control and that are the
property of the Company or relate to the business of the Company, and Employee
shall pay to the Company any amounts due and owning from Employee to the Company
as specified in this Agreement.
(d) The obligations of Section 5 through Section 10 of this Agreement shall
survive the expiration or termination of this Agreement.
Section 8. Representations and Warranties.
(a) No Conflicts. Employee represents and warrants to the Company that
Employee is under no duty (whether contractual, fiduciary, or otherwise) that
would prevent, restrict, or limit Employee from fully performing all duties and
services for the Company, and the performance of such duties and services shall
not conflict with any other agreement or obligation to which Employee is bound.
(b) No Hardship. Employee represents and acknowledges that Employee's
experience and/or abilities are such that observance of the covenants contained
in this Agreement will not cause Employee any undue hardship nor will they
unreasonably interfere with Employee's ability to earn a livelihood.
Section 9. Alternative Dispute Resolution.
(a) Mediation. Employee and the Company agree to submit, prior to
arbitration, all unsettled claims, disputes, controversies, and other matters in
question between them arising out
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of or relating to this Agreement (including but not limited to any claim that
the Agreement or any of its provisions is invalid, illegal, or otherwise
voidable or void) or the dealings or relationship between Employee and the
Company ("Disputes") to mediation in Wichita, Kansas and in accordance with the
Commercial Mediation Rules of the American Arbitration Association currently in
effect. The mediation shall be private, confidential, voluntary, and nonbinding.
Any party may withdraw from the mediation at any time before signing a
settlement agreement upon written notice to each other party and to the
mediator. The mediator shall be neutral and impartial. The mediator shall be
disqualified as a witness, consultant, expert, or counsel for either party with
respect to the matters in Dispute and any related matters. The Company and
Employee shall pay their respective attorneys' fee and other costs associated
with the mediation, and the Company and Employee shall equally bear the costs
and fees of the mediator. If a Dispute cannot be resolved through mediation
within ninety (90) days of being submitted to mediation, the parties agree to
submit the Dispute to arbitration.
(b) Arbitration. Subject to Section 9(a), all Disputes will be submitted
for binding arbitration to the American Arbitration Association on demand of
either party. Such arbitration proceeding will be conducted in Wichita, Kansas
and, except as otherwise provided in this Agreement, will be heard by one (1)
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. All matters relating to arbitration will
be governed by the federal Arbitration Act (9 U.S.C. Sections 1 et. seq.) and
not by any state arbitration law. The arbitrator will have the right to award or
include in his award any relief which he deems proper under the circumstances,
including, without limitation, money damages (with interest on unpaid amounts
from the date due), specific performance, injunctive relief, and of this
Agreement, reasonable attorneys' fees and costs, provided that the arbitrator
will not have the right to amend or modify the terms of this Agreement. The
award and decision of the arbitrator will be conclusive and binding upon all
parties hereto, and judgment upon the award may be entered in any court of
competent jurisdiction. Except as specified above, the Company and Employee
shall pay their respective attorneys' fee and other costs associated with the
arbitration, and the Company and Employee shall equally bear the costs and fees
of the arbitrator.
(c) Confidentiality. Employee and the Company agree that they will not
disclose, or permit those acting on their behalf to disclose, any aspect of the
proceedings under Section 9(a) and Section 9(b), including but not limited to
the resolution or the existence or amount of any award, to any person, firm,
organization, or entity of any character or nature, unless divulged (i) to an
agency of the federal or state government, (ii) pursuant to a court order, (iii)
pursuant to a requirement of law, (iv) pursuant to prior written consent of the
Company or Employee, or (v) pursuant to a legal proceeding to enforce a
settlement agreement or arbitration award. This provision is not intended to
prohibit nor does it prohibit Employee's or the Company's disclosures of the
terms of any settlement or arbitration award to their attorney(s),
accountant(s), financial advisor(s), or family members, provided that they
comply with the provisions of this paragraph.
(d) Injunctions. Notwithstanding anything to the contrary contained in this
Section 9, the Company and Employee shall have the right in a proper case to
obtain temporary restraining orders and temporary or preliminary injunctive
relief from a court of competent jurisdiction; provided, however, that the
Company and Employee must contemporaneously submit the
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Disputes for non-binding mediation under Section 9(a) and then for arbitration
under Section 9(b) on the merits as provided herein if such Disputes cannot be
resolved through mediation.
Section 10. General.
(a) Notices. All notices required or permitted under this Agreement shall
be in writing, may be made by personal delivery or facsimile transmission,
effective on the day of such delivery or receipt of such transmission, or may be
mailed by registered or certified mail, effective two (2) days after the date of
mailing, addressed as follows:
To the Company:
Spirit AeroSystems, Inc.
Attention: ___________
3801 X. Xxxxxx
P.O. Box 780008, Mail Code ____
Xxxxxxx, XX 00000-0000
Facsimile Number: (___) ___-____
or such other person or address as designated in writing to Employee.
To Employee:
H. Xxxxx Xxxxxx
at his last known residence address or to such other address as designated
by him in writing to the Company.
(b) Successors. Neither this Agreement nor any right or interest therein
shall be assignable or transferable (whether by pledge, grant of a security
interest, or otherwise) by Employee or Employee's beneficiaries or legal
representatives, except by will, by the laws of descent and distribution, or
inter vivos revocable living grantor trust as Employee's beneficiaries. This
Agreement shall be binding upon and shall inure to the benefit of the Company,
its successors and assigns, and Employee and shall be enforceable by them and
Employee's heirs, legatees, legal personal representatives. If Employee dies
during the term of this Agreement, the obligation to pay salary and provide
benefits shall immediately cease; and, absent actual notice of any probate
proceeding, the Company shall pay any compensation due for the period preceding
Employee's death to the following person(s) in order of preference: (t) spouse
of Employee; (ii) children of Employee eighteen years of age and over, in equal
shares; (iii) father, mother, sisters, and brothers, in equal shares; or (d) the
person to whom funeral expenses are due. Upon payment of such sum, the Company
shall be relieved of all further obligations hereunder.
(c) Waiver, Modification, and Interpretation. No provisions of this
Agreement may be modified, waived, or discharged unless such waiver,
modification, or discharge is agreed to in a writing signed by Employee and an
appropriate officer of the Company empowered to sign the same by the Board of
Directors of the Company. No waiver by either party at any time of any breach by
the party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of similar or
dissimilar provisions or
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conditions at the same time or at any prior to subsequent time. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Kansas; provided, however, that the
corporate law of the state of incorporation of the Company's parent shall govern
issues related to the issuance of shares of its Common Stock. Except as provided
in Section 9, any action brought to enforce or interpret this Agreement shall be
maintained exclusively in the state and federal courts located in Wichita,
Kansas.
(d) Interpretation. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
any provision of this Agreement. No provision of this Agreement shall be
interpreted for or against any party hereto on the basis that such party was the
draftsman of such provision; and no presumption or burden of proof shall arise
disfavoring or favoring any party by virtue of the authorship of any of the
provisions of this Agreement.
(e) Counterparts. The Company and Employee may execute this Agreement in
any number of counterparts, each of which shall be deemed to be an original but
all of which shall constitute but one instrument. In proving this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
(f) Invalidity of Provisions. If a court of competent jurisdiction shall
declare that any provision of this Agreement is invalid, illegal, or
unenforceable in any respect, and if the rights and obligations of the Parties
to this Agreement will not be materially and adversely affected thereby, in lieu
of such illegal, invalid, or unenforceable provision the court may add as a part
of this Agreement a legal, valid, and enforceable provision as similar in terms
to such illegal, invalid, or unenforceable provision as is possible. If such
court cannot so substitute or declines to so substitute for such invalid,
illegal, or unenforceable provision, (i) such provision will be fully severable;
(ii) this Agreement will be construed and enforced as if such illegal, invalid,
or unenforceable provision had never comprised a part hereof; and (iii) the
remaining provisions of this Agreement will remain in fun force and effect and
not be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom. The covenants contained in this Agreement shall each be
construed to be a separate agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of Employee against
the Company, predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of said covenants.
(g) Entire Agreement. This Agreement (together with the documents expressly
referenced herein) constitutes the entire agreement between the parties,
supersedes in all respects any prior agreement between the Company and Employee
and may not be changed except by a writing duly executed and delivered by the
Company and Employee in the same manner as this Agreement.
[continues on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first written above.
SPIRIT AEROSYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Director- Human Resources Support
Services
"Company"
/s/ H. Xxxxx Xxxxxx
----------------------------------------
H. Xxxxx Xxxxxx
"Employee"
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