AMENDED AND RESTATED
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
This Amended and Restated Severance and Change in Control
Agreement ("Agreement") made and entered into as of the 8th
day of April, 1997, by and between AAR CORP., a Delaware
corporation ("Company"), and Xxxxxx X. Xxxxxx ("Employee").
WHEREAS, the Company currently employs Employee as an employee at will in the
capacity of Vice President-Trading Group; and
WHEREAS, Employee desires the Company to pay Employee certain severance payments
upon a Change in Control of AAR CORP. and upon termination of employment prior
to a Change in Control; and
WHEREAS, the Company is willing to pay Employee severance payments under certain
circumstances if Employee agrees to confidentiality, non-compete and certain
other covenants.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth and
other good and valuable consideration, the parties hereto agree as follows:
1. EMPLOYMENT. Employee will continue employment with the Company as an at
will employee subject to the terms and conditions hereinafter set forth.
2. DUTIES. During the continuation of his employment, Employee shall:
(a) well and faithfully serve the Company and do and perform assigned
duties and responsibilities in the ordinary course of his
employment and the business of the Company (within such limits as
the Company may from time to time prescribe), professionally,
faithfully and diligently.
(b) devote his full time, energy and skill to the business of the
Company and his assigned duties and responsibilities, and to the
promotion of the best interests of the Company; provided that
Employee shall not (to the extent not inconsistent with Section 4
below) be prevented from (a) serving as a director of any
corporation consented to in advance in writing by the Company, (b)
engaging in charitable, religious, civic or other non-profit
community activities, or (c) investing his personal assets in such
form or manner as will not require any substantial services on his
part in the operation or affairs of the business in which such
investments are made or which would detract from or interfere or
cause a conflict of interest with performance of his duties
hereunder.
(c) observe all policies and procedures of the Company in effect from
time to time applicable to employees of the Company including,
without limitation, policies with respect to employee loyalty and
prohibited conflicts of interest.
3. CONFIDENTIAL INFORMATION, ASSIGNMENT OF INVENTIONS.
(a) Employee acknowledges that the trade secrets, confidential
information, secret processes and know-how developed and acquired
by AAR CORP. and its affiliates or subsidiaries (together the
"Affiliated Companies") are among their most valuable assets and
that the value of such information may be destroyed by
unauthorized disclosure. All such trade secrets, confidential
information, secret processes and know-how imparted to or learned
by Employee in the course of his employment with respect to the
business of the Affiliated Companies (whether acquired before or
after the date hereof) will be deemed to be confidential and will
not be used or disclosed by Employee, except to the extent
necessary to perform his duties and, in no event, disclosed to
anyone outside the employ of the Affiliated Companies and their
authorized consultants and advisors, unless (i) such information
is or has been made generally available to the public, (ii)
disclosure of such information is required by law in the opinion
of Employee's counsel (provided that written notice thereof is
given to Company as soon as possible but not less than 24 hours
prior to such disclosure), or (iii) express written authorization
to use or disclose such information has been given by the Company.
If Employee ceases to be employed by the Company for any reason,
he shall not take with him any electronically stored data,
documents or other papers containing or reflecting trade secrets,
confidential information, secret processes, know-how, or computer
software programs. Employee acknowledges that his employment
hereunder will place him in a position of utmost confidence and
that he will have access to confidential information concerning
the operation of the business of the Affiliated Companies,
including, but not limited to, manufacturing methods,
developments, secret processes, know-how, computer software
programs, costs, prices and pricing methods, sources of supply and
customer names and relations. All such information is in the
nature of a trade secret and is the sole and exclusive property of
the Affiliated Companies and shall be deemed confidential
information for the purposes of this paragraph.
(b) Employee hereby assigns to the Company all rights that Employee
may have as author, designer, inventor or otherwise as creator of
any written or graphic material, design, invention, improvement,
or any other idea or thing whatever that Employee may write, draw,
design, conceive, perfect, or reduce to practice during employment
with the Company or within 120 days after termination of such
employment, whether done during or outside of normal work hours,
and whether done alone or in conjunction with others
("Intellectual Property"), provided, however, that Employee
reserves all rights in anything done or developed entirely by
Employee on Employee's own personal time and without the use of
any Company equipment, supplies, facilities or information, or the
participation of any other Company employee, unless it relates to
the Company's business or reasonably anticipated business, or
grows out of any work performed by Employee for the Company.
Employee will promptly disclose all such Intellectual Property
developed by Employee to the Company, and fully cooperate at the
Company's request and expense in any efforts by the Company or its
assignees to secure protection for such Intellectual Property by
way of domestic or foreign patent, copyright, trademark or service
xxxx registration or otherwise, including executing specific
assignments or such other documents or taking such further action
as may be considered necessary
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to vest title in Company or its assignees and obtain patents or
copyrights in any and all countries.
4. NON-COMPETE; SEVERANCE.
(a) Employee agrees that during his continuation of employment with
the Company and for one (1) year thereafter so long as the Company
makes the severance payments to Employee pursuant to subsections
4(b) or 4(c) below, he shall not, without the express written
consent of the Company, either alone or as a consultant to, or
partner, employee, officer, director, or stockholder of any
organization, entity or business, (i) take or convert for
Employee's personal gain or benefit or for the benefit of any
third party, any business opportunities which may be of interest
to the Company or any Affiliated Company which Employee becomes
aware of during the term of his employment; (ii) engage in direct
or indirect competition with the Company or any Affiliated Company
within 100 miles of any location within the United States of
America or any other country where the Company or any Affiliated
Company does business from time to time during the term hereof;
(iii) solicit in connection with any activity which is competitive
with any of the businesses of the Company or any Affiliated
Company, any customers of the Company or any Affiliated Company;
(iv) solicit for employment any sales, marketing or management
employee of Company or any Affiliated Company or induce or attempt
to induce any customer or supplier of the Company or any
Affiliated Company to terminate or materially change such
relationship. Company and Employee acknowledge the reasonableness
of the foregoing covenants not to compete and non-solicitation,
including but not limited to the geographic area and duration of
time which are a part hereof, and further, that the restrictions
stated in this Section 4 are reasonably necessary for the
protection of Employer's legitimate proprietary interests. This
covenant not to compete may be enforced with respect to any
geographic area in which the Company or any Affiliated Company
does business during the term hereof. Nothing herein shall
prohibit Employee from being the legal or equitable holder, solely
for investment purposes, of less than 5% of the capital stock of
any publicly held corporation which may be in direct or indirect
competition with the Company or any Affiliated Company.
(b) Upon termination of Employee's employment by the Company prior to
a Change in Control (as defined in 6(c)(i) below) for any reason
other than Cause (as defined in 6(c)(iv) below), the Company will
pay Employee severance each month for 12 months ("Severance
Period"), in an amount (subject to applicable withholding) equal
to 1/12 of Employee's base salary; and, further, the Company will
pay Employee a PIP bonus award in accordance with and subject to
the terms and conditions of Employee's PIP in a lump sum at the
time any such PIP bonuses are payable under the PIP or at such
time as the Severance Period is complete, whichever is later (with
interest at prime rate plus one percentage point from the earlier
of such dates), for any PIP bonuses earned (1) in the completed
fiscal year preceeding termination but not due and payable prior
to termination, and (2) prorata for the period prior to
termination of emloyment in any partial PIP fiscal year based on
Employee's performance against Employee's PIP during such partial
period; provided, however, that (i) all such monthly payment
obligations shall terminate immediately upon Employee obtaining
full time employment in a
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comparable position in terms of salary level, and (ii) all such
payment obligations shall terminate or lapse immediately upon any
breach by Employee of Section 3 or 4(a) of this Agreement or if
Employee shall commence any action or proceeding in any court or
before any regulatory agency arising out of or in connection with
termination of his employment.
(c) If Employee terminates his employment or Employee's employment is
terminated by the Company for Cause (as defined below), the
Company may elect (but is not required to), by written notice
thereof to Employee, within five (5) days of any such termination
of Employee's employment with the Company prior to a Change in
Control (as defined below), to pay Employee severance as provided
in and subject to the provisions of subsection 4(b) above.
(d) Employee may terminate this Severance and Change in Control
Agreement effective immediately upon notice thereof in writing to
Company at any time while still employed within a sixty (60)
calendar day period immediately following the effective date of
any reduction by Company in (i) Employee's level of responsibility
or position from that held by Employee as Vice President-Trading
Group on the effective date of this Agreement, or (ii) Employee's
level of compensation, including retirement benefits in effect
immediately prior to any such change.
(e) If at any time, any clause or portion of this Section 4 shall be
deemed invalid or unenforceable by the laws of the jurisdiction in
which it is to be enforced by reason of being vague or
unreasonable as to duration, geographic scope, nature of
activities restricted, or for any other reason, this provision
shall be considered divisible as to such portions and the
foregoing restrictions set forth in 4(a) shall become and be
immediately amended to include only such duration, scope or
restriction and such event as shall be deemed reasonable and
enforceable by the court or other body having jurisdiction to
enforce this Agreement; and the parties hereto agree that the
restrictions, as so amended, shall be valid and binding as though
the invalid or unenforceable portion had not been involved herein.
(f) The Employee acknowledges and agrees that the Company would be
irreparably harmed by violations of Section 3 or Section 4(a)
above, and in recognition thereof, the Company shall be entitled
to an injunction or other decree of specific performance with
respect to any violation thereof (without any bond or other
security being required) in addition to other available legal and
equitable remedies.
5. TERMINATION OF EMPLOYMENT.
(a) Upon and after termination of employment howsoever arising,
Employee shall, upon request by Company:
(1) immediately return to the Company all correspondence,
documents, business calendars/diaries, or other property
belonging to the Company which is in his possession,
(2) immediately resign from any office Employee holds with the
Company or any Affiliated Company; and
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(3) cooperate fully and in good faith with the Company in the
resolution of all matters Employee worked on or was involved
in during Employee's employment with the Company.
Employee's cooperation will include reasonable consultation
by telephone. Further, in connection therewith, Employee
will, at Company's request upon reasonable advance notice
and subject to Employee's availability, make himself
available to Company in person at Company's premises, for
testimony in court, or elsewhere; provided, however, that in
such event, Company shall reimburse all Employee's
reasonable expenses and pay Employee a reasonable per diem
or hourly stipend.
6. CHANGE IN CONTROL.
(a) In the event (i) a Change in Control of AAR CORP. occurs, and (ii)
(A) at any time during the 24 month period commencing on the date
of the Change in Control the Company terminates Employee's
employment for other than Cause or Disability, or Employee
terminates his employment for Good Reason, in either case by
written notice to the other party (including the particulars
thereof), and having given the other party the opportunity to be
heard with respect thereto, or (B) Employee's employment with the
Company terminates for any reason other than Disability or death
during the 30 day period commencing on the expiration of the
aforementioned 24 month period, and (iii) neither incumbent in the
positions of Chief Executive Officer or Chief Operating Officer of
the Company on the effective date hereof 1 is Chief Executive
Officer of the Company at the time of such termination of
employment, then:
(1) the Company shall promptly pay to Employee in a lump sum (A)
all base salary earned through the date of termination, (B)
any cash bonus earned by Employee for the fiscal year of the
Company most recently ended prior to the date of termination
to the extent unpaid on the date of termination, (C) a
prorata portion of the cash bonus Employee would have earned
had he been employed by the Company on the last day of the
fiscal year in which the date of termination occurs
(assuming all performance targets have been met) that is
applicable to the period commencing on the first day of such
fiscal year and ending on the date of termination, and (D)
any and all other benefits and amounts earned by Employee
prior to the date of termination to the extent unpaid, all
subject to applicable withholding.
(2) The Company shall promptly pay to Employee in a lump sum, a
cash payment in an amount equal to three times Employee's
total compensation (base salary plus cash bonus) for either
the fiscal year of the Company most recently ended prior to
the date of termination, or the preceding fiscal year,
whichever is the highest total compensation, or such lesser
amount as Employee may elect to take, subject to applicable
withholding. Employee may elect to take payment of any
amounts on a schedule of his own choosing; provided that
such schedule shall be completed no later than three years
from the date of Employee's termination of employment.
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(3) Employee and his dependents shall continue to be covered by,
and receive benefits in accordance with the terms of, all of
the Company's medical, dental and life insurance plans for
three years following the date of termination, and at no
less than the levels he and his dependents were receiving
immediately prior to the Change in Control. Employee's
dependents shall be entitled to continued coverage pursuant
to the preceding sentence for the balance of such three year
period in the event of Employee's death during such period.
The period during which Employee and his dependents are
entitled to continuation of group health plan coverage
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended, and Part 6 of Title I of the Employee
Retirement Income Security Act of 1974, as amended, shall
commence on the date next following the expiration of the
aforementioned three year period.
(4) Employee shall receive an additional retirement benefit,
over and above that which Employee would normally be
entitled to under the Company's retirement plans or programs
applicable to Employee, equal to the actuarial equivalent of
the additional amount that Employee would have earned under
such retirement plans or programs had he accumulated three
additional continuous years of service. Such amount shall
be paid to Employee in a cash lump sum payment at his normal
retirement age, as defined in the AAR CORP. Retirement Plan
or any successor plan. Alternatively, Employee may elect to
receive such payment at his early retirement age, as defined
in the AAR CORP. Retirement Plan or any successor plan, with
a corresponding actuarial reduction in the amount of such
payment, based upon the earlier date of such payment.
(5) The Company, at its expense, shall provide Employee with
outplacement services of a nationally recognized
outplacement firm until the earlier of (a) the Employee's
attainment of employment, or (b) the date eighteen (18)
months from the date of Employee's termination of
employment; provided, however, that the cost of such
outplacement services shall not exceed 10% of Employee's
annual base salary.
(b) In the event that a Change in Control has occurred, both for
purposes of this Agreement and for purposes of the AAR CORP. Stock
Benefit Plan, as amended ("Plan"), whether or not such Change in
Control has the prior written approval of a majority of the
Continuing Directors (as defined in the Plan), and notwithstanding
any conditions or restrictions contained in any agreement between
the Company and Employee related to any Award granted to Employee
under the Plan, all Options or Limited Rights, or both, granted to
Employee under the Plan will become immediately exercisable, and
all restrictions on Restricted Stock granted to Employee under the
Plan will immediately lapse.
(c) For purposes of this Agreement
(i) "Change in Control" means the earliest of:
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(1) any person (as such term is used in Section 13(d) of
the Securities Exchange Act of 1934, as amended
("Exchange Act")), has acquired (other than directly
from the Company) beneficial ownership (as that term is
defined in Rule 13d-3 under the Exchange Act), of more
than 20% of the outstanding capital stock of the
Company entitled to vote for the election of directors;
(2) the commencement by an entity, person, or group (other
than the Company or a subsidiary of the Company) of a
tender offer or an exchange offer for more than 20% of
the outstanding voting stock of the Company;
(3) the effective time of (i) a merger or consolidation or
other business combingation of the Company with one or
more other corporations as a result of which the
holders of the outstanding voting stock of the Company
immediately prior to such business combination hold
less than 60% of the voting stock of the surviving or
resulting corporation, or a transfer of substantially
all of the assets of the Company other than to an
entity of which the Company owns at least 80% of the
voting stock;
(4) the election over any period of time to the Board of
Directors of the Company without the recommendation or
approval of the incumbent Board of Directors of the
Company, of the lesser of (i) three directors, or (ii)
directors constituting a majority of the number of
directors of the Company then in office; or
(5) the occurrence of any arrangement or understanding
relating to the Company which would give rise to a
filing requirement with the Securities and Exchange
Commission pursuant to Rule 14f-1 of the Exchange Act
Rules under the Securities Exchange Act of 1934.
(ii) "Good Reason" means:
(1) a material reduction in the nature or scope of
Employee's duties, responsibilities, authority, power
or functions from those enjoyed by Employee immediately
prior to the Change in Control, or a material reduction
in Employee's compensation (including benefits),
occurring at any time during the two-year period
immediately after the Change in Control; or
(2) a good faith determination by Employee that as the
result of a Change in Control and a material change in
employment circumstances at any time during the
immediate two year period after the Change in Control,
he is unable to carry out his assigned duties and
responsibilities in a manner consistent with the
practices, standards, values or philosophy of the
Company immediately prior to the Change in Control; or
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(3) a relocation of the primary place of employment of at
least 100 miles.
(iii) "Disability" means:
(1) a physical or mental condition which has prevented
Employee from substantially performing his assigned
duties for a period of 180 consecutive days and which
is expected to continue to render Employee unable to
substantially perform his duties on a full-time basis
and otherwise meets the benefit eligibility
requirements of the Company's Long Term Disability
Welfare Benefit Plan. The Company will make reasonable
accommodation for any handicap of Employee as may be
required by applicable law.
In the event of termination by the Company for Disability
after a Change in Control, a good faith determination of
the existence of a Disability shall be made by resolution of
the Compensation Committee of the Board of Directors of the
Company, in its sole discretion, setting forth the
particulars of the Disability which shall be final and
binding upon the Employee. The Company may require the
submission of such medical evidence as to the condition of
the Employee as it may deem necessary in order to arrive at
its determination of the occurrence of a Disability, and
Employee will cooperate in providing any such information.
Employee will be provided with reasonable opportunity to
present additional medical evidence as to the medical
condition of Employee for consideration prior to the Board
making its determination of the occurrence of a Disability.
Upon termination of Employment by Company for Disability
after a Change in Control, Employee will receive Disability
payments pursuant to the Company's short and long term
Disability welfare benefit plans then in effect according to
the terms of such plans and continue to be eligible to
participate in the Company's medical, dental and life
insurance programs then in effect and available to officers
of the Company in accordance with their terms for a period
of 3 years from the date of such termination of this
Agreement.
(iv) "Cause" means:
(1) Employee engages, during the performance of his duties
hereunder, in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation
or intentional wrongdoing or malfeasance;
(2) Employee intentionally disobeys or disregards a lawful
and proper direction of the Board or the Company; or
(2) Employee materially breaches the Agreement and such
breach by its nature, is incapable of being cured, or
such breach remains uncured for more than 10 days
following receipt by Employee of written notice from
the Company specifying the nature of the breach of the
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Agreement that involves inattention by Employee to his
duties under the Agreement shall be deemed a breach capable
of cure.
Without limiting the generality of the foregoing, the following
shall not constitute Cause for the termination of the employment
of Employee or the modification or diminution of any of his
authority hereunder:
(1) any personal or policy disagreement between Employee and the
Company or any member of the Board; or
(2) any action taken by Employee in connection with his duties
hereunder, or any failure to act, if Employee acted or
failed to act in good faith and in a manner he reasonably
believed to be in and not opposed to the best interest of
the Company and he had no reasonable cause to believe his
conduct was unlawful, or
(3) termination of Employee's employment for overall
unsatisfactory performance (including, but not limited to,
failure to meet financial goals).
Termination for Cause shall be limited to a good faith finding by
resolution of the Compensation Committee of the Board, setting
forth the particulars thereof. Any such action shall be taken at
a regular or specially called meeting of the Compensation
Committee of the Board, after a minimum 10 days notice thereof to
Employee, with termination of Employee's employment with the
Company for Cause listed as an agenda item. Employee will be
given a reasonable opportunity to be heard at such meeting with
counsel present if Employee desires. Any such resolution shall
be final and binding.
Upon termination of employment by the Company for Cause, no
further compensation or benefits shall accrue or be payable to
Employee by the Company, except for any compensation, bonus or
other benefits which have accrued to Employee prior to the date
of any such termination.
Nothing herein shall be construed to prevent the Company from
terminating Employee's employment at any time for any reason or
for no reason.
(d) The Company will pay reasonable legal/attorney's fees incurred by
Employee in connection with enforcement of any right or benefit under
this Section 6.
7. CHANGES IN BUSINESS. The Company, acting through its Board of Directors,
will at all times have complete control over the Company's business and
retirement and other employee health and welfare benefit plans ("Plans").
Without limiting the generality of the foregoing, the Company may at any
time or times change or discontinue any or all of its present or future
operations or Plans (subject to their terms), may close or move any one or
more of its divisions or offices, may undertake any new servicing or sales
operation, may sell any one or more of its divisions or offices to any
company not controlled, directly or indirectly, by
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the Company or may take any and all other steps which its Board of
Directors, in its exclusive judgment, shall deem desirable, and Employee
shall have no claim or recourse against the Company, its officers,
directors or employees, by reason of such action except for enforcement of
the provisions of Section 4 and 6 of this Agreement.
8. SEVERANCE PAYMENT AS SOLE OBLIGATION. Except as expressly provided in
Sections 4 and 6 above, no further compensation, payments, liabilities or
benefits shall accrue or be payable to Employee upon or as a result of
termination of Employee's employment for any reason whatsoever except for
any compensation, bonus or other benefits which accrued to Employee prior
to the date of employment termination.
The amounts paid to the Employee under Section 4 and 6 of this Agreement
shall be considered severance pay in consideration of past services
Employee has rendered to the Company and in consideration of Employee's
continued service from the date hereof to entitlement to those payments.
9. NOTICES. Any notice or other instrument or thing required or permitted to
be given, served or delivered to any of the parties hereto shall be
delivered personally or deposited in the United States mail, with proper
postage prepaid, telegram, teletype, cable or facsimile transmission to the
addresses listed below:
(a) If to the Company, to:
AAR CORP.
0000 X. Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: Chairman
With a copy to:
AAR CORP.
0000 X. Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) If to Employee, to:
Xxxxxx X. Xxxxxx
00 Xxxxxx Xxxx
X. Xxxxxxxxxx, XX 00000
or to such other address as either party may from time to time designate by
notice to the other. Each notice shall be effective when such notice and
any required copy are delivered to the applicable address.
10. NON-ASSIGNMENT.
(a) The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Employee,
and any attempted
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unpermitted assignment shall be null and void and without further
effect; provided, however, that, upon the sale or transfer of all or
substantially all of the assets of the Company, or upon the merger by
the Company into or the combination with another corporation or other
business entity, or upon the liquidation or dissolution of the
Company, this Agreement will inure to the benefit of and be binding
upon the person, firm or corporation purchasing such assets, or the
corporation surviving such merger or consolidation, or the shareholder
effecting such liquidation or dissolution, as the case may be. After
any such transaction, the term Company in this Agreement shall refer
to the entity which conducts the business now conducted by the
Company. The provisions of this Agreement shall be binding upon and
inure to the benefit of the estate and beneficiaries of Employee and
upon and to the benefit of the permitted successors and assigns of the
parties hereto.
(b) The Employee agrees on behalf of himself, his heirs, executors and
administrators, and any other person or person claiming any benefit
under him by virtue of this Agreement, that this Agreement and all
rights, interests and benefits hereunder shall not be assigned,
transferred, pledged or hypothecated in any way by the Employee or by
any beneficiary, heir, executor, administrator or other person
claiming under the Employee by virtue of this Agreement and shall not
be subject to execution, attachment or similar process. Any attempted
assigned, transfer, pledge or hypothecation or any other disposition
of this Agreement or of such rights, interests and benefits contrary
to the foregoing provisions or the levy or any execution, attachment
or similar process thereon shall be null and void and without further
effect.
11. SEVERABILITY. If any term, clause or provision contained herein is declared
or held invalid by any court of competent jurisdiction, such declaration or
holding shall not affect the validity of any other term, clause or
provision herein contained.
12. CONSTRUCTION. Careful scrutiny has been given to this Agreement by the
Company, Employee, and their respective legal counsel. Accordingly, the
rule of construction that the ambiguities of the contract shall be resolved
against the party which caused the contract to be drafted shall have no
application in the construction or interpretation of this Agreement or any
clause or provision hereof.
13. ENTIRE AGREEMENT. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties and supersede all
prior agreements, arrangements and communications, whether oral or written,
pertaining to the subject matter hereof.
14. WAIVER. No provision of this Agreement may be amended, modified, waived or
discharged unless such amendment, modification, waiver or discharge is
agreed to in writing signed by Employee and an authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
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15. GOVERNING LAW. The validity, interpretation, construction and performance
of this Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois without regard to its conflicts of law
principles.
16. EXECUTION. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and which shall constitute but one and
the same Agreement.
WITNESS the due execution of this Agreement by the parties hereto as of the day
and year first above written.
Employer:
AAR CORP.
By:/s/ Xxxxx X. Xxxxxx
----------------------
Title: President
Employee:
/s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
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ATTACHMENT 2
OUTLINE OF TERMS OF
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
EMPLOYMENT:
- Continuation of at-will employment relationship.
DUTIES:
- Obligation of loyalty and commitment to perform assigned duties
professionally, faithfully and diligently on a full time basis and observe
all Company policies.
CONFIDENTIAL INFORMATION:
- Employee agrees to treat Company information (and that of Affiliated
Companies) in a confidential manner and not to disclose such to third
parties without authorization.
ASSIGNMENT OF INVENTIONS:
- Employee agrees to disclose and assign intellectual property rights
(inventions and copyrightable material conceived, made or written during
the term of employment to Company.
NON-COMPETE COVENANT:
- Employee agrees not to compete with Company (or Affiliated Companies) or
solicit employees during employment and for a period of 12 months
thereafter so long as the Company pays severance to Employee or is excused
from doing so due to Employee's breach of the confidentiality/non-compete
covenants of the Agreement or the commencement of any action by Employee
against Company for termination of employment.
TERMINATION OF EMPLOYMENT/SEVERANCE:
- If Employee's employment is terminated by Company for any reason other than
Cause prior to a Change in Control of AAR CORP., Company will pay 12 months
severance to Employee; the covenant not to compete will not be enforceable
if Company is in default of its obligation to pay severance. Company may
elect to pay severance to Employee upon Employee's termination of
employment or if he is terminated by Company for Cause.
- No severance is payable in the event Employee breaches the non-compete
covenants or commences any legal proceeding against the Company for termination
of employment.
TERMINATION OF AGREEMENT:
- Employee may terminate the Agreement upon notice in writing to Company
within sixty (60) days after any reduction in employee's level of
responsibility or position from that held on the effective date or level of
compensation, including retirement benefits.
CHANGE IN CONTROL:
- In the event of (1) a Change in Control (as defined in the Agreement) and
(2) termination of employment within 2 years thereafter by Company for
other than Cause or Disability (as defined in the Agreement), or Employee
terminates employment for Good Reason (as defined in the Agreement), and
(3) neither the CEO nor COO in office on the effective date are CEO at the
time of such termination of employment, the Company will
- pay Employee three (3) years severance
- continue medical, dental and life insurance for three (3) years
- provide a supplemental retirement benefit which is based on three
additional years of credited service
CHANGES IN COMPANY'S BUSINESS OR RETIREMENT/HEALTH & WELFARE PLANS:
- Company reserves right to manage/change/terminate its businesses and
retirement and employee health and welfare plans.
THIS IS AN OUTLINE OF TERMS ONLY. PLEASE REFER TO AGREEMENT FOR ACTUAL TERMS
AND CONDITIONS WHICH SHALL BE CONTROLLING
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