April 13, 2021 Dear Whit,
April 13, 2021
Dear Whit,
This letter agreement (“Letter Agreement”), effective as of April 13, 2021 (the “Effective Date”) amends your Employment Agreement with PAE Incorporated (“PAE”), dated May 5, 2020 (the “Employment Agreement”). Capitalized terms used but not defined in this Letter Agreement shall have the meaning set forth in the Employment Agreement.
As of the Effective Date, your Employment Agreement shall be amended such that a new Section 4.05 shall be added to your Employment Agreement to read as follows:
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during the Severance Period, Executive becomes employed by a new employer that provides medical and dental coverage, PAE’s continuing medical and dental coverage (and any cash payments in lieu thereof) shall become secondary to such new employer’s coverage with respect to claims covered by such new employer’s medical and dental plans; and (y) a monthly cash payment grossed up for taxes to permit Executive to purchase life insurance coverage at the same benefit level as currently provided to active senior management employees of PAE and at the same cost to Executive as is generally provided to active senior management employees of PAE. Notwithstanding any provision of this Agreement to the contrary, to the extent necessary to satisfy Section 105(h) of the Code, or if PAE determines it is necessary to avoid the imposition of an excise tax on PAE, PAE will be permitted to alter the manner in which medical and dental benefits are provided to Executive following termination of Executive’s employment; provided that the after-tax cost to Executive of such benefits shall not be greater than the cost applicable to similarly situated executives of PAE who have not terminated employment.
(i) Any RSUs that would have otherwise vested within 12 months following Executive’s termination of employment had Executive continued in employment with PAE shall immediately vest upon such termination of employment and shall be paid within 60 days following such termination of employment; provided that, in the event that Executive’s termination of employment occurs upon or within 12 months following a Change in Control (as defined in the applicable RSU grant agreement) and the applicable RSU grant agreement provides for vesting terms more favorable than those set forth in this Section 4.05(d)(i), the terms of the applicable grant agreement shall apply.
(ii) Executive will earn a pro-rata portion of any outstanding PSUs, subject to achievement of the performance goals for the applicable performance period, each as specified in the applicable PSU award agreement(s). Such pro-rata portion will be equal to the number of PSUs that would otherwise vest as of the end of the performance period, based on achievement of the performance goals, multiplied by a fraction, the numerator of which is the number of full calendar days during the performance period prior to Executive’s date of termination and the denominator of which is the total number of days in the performance period. Payment of such PSUs (if any) shall be made to Executive at the time set forth in the applicable PSU award agreement(s); provided that, in the event that Executive’s termination of employment occurs upon or following a Change in Control (as defined in the applicable PSU grant agreement) or a Change in Control occurs during the applicable performance period and the applicable PSU grant agreement provides for vesting terms more favorable than those set forth in this Section
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4.05(d)(ii), the terms of the applicable grant agreement shall apply. Notwithstanding the foregoing provisions of this Section 4.05(d)(ii), to the extent that as of the date of Executive’s termination of employment, any of Executive’s outstanding PSUs were granted prior to April 1, 2021, then, in lieu of the foregoing provisions of this Section 4.05(d)(ii), Executive’s PSUs shall be treated as though Executive’s employment terminated on account of “Retirement” in accordance with the terms of the applicable grant agreement(s) in effect as of the date hereof.
(iii) In the event of any inconsistency between the terms of the applicable RSU or PSU grant agreement and the terms of this Section 4.05(d), the terms of this Section 4.05(d) shall govern.
All other terms of your Employment Agreement shall remain unchanged except as modified herein.
PAE INCORPORATED,
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Interim President and Chief Executive Officer; Executive Vice President and Chief Financial Officer
Agreed to and Acknowledged by:
_____________________________
▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
_______________________________
Date
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