Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of January 1,
2000, is by and between Pemco Aviation Group, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxx ("Executive").
RECITALS
WHEREAS, pursuant to that certain Employment Agreement dated January 1,
2000 (the "Original Agreement"), the Company has employed Executive as its
President and Chief Executive Officer;
WHEREAS, the Company and Executive have agreed to amend the Original
Agreement to reflect recent discussions between the parties and to more
specifically address certain issues that have arisen since, or that may have
been unclear in, the Original Agreement;
WHEREAS, the Company understands that a potential change of control or
ownership of the Company will present significant concerns for Executive with
respect to his financial and job security;
WHEREAS, the Company desires to assure itself of Executive's services
during any period in which it is confronting such a situation and to provide
Executive with certain financial assurances to enable Executive to perform the
responsibilities of his position without undue distraction and to exercise his
judgment without bias due to his personal circumstances; and
WHEREAS, to achieve these objectives, the Company and Executive desire to
enter into this Amended and Restated Employment Agreement providing, among other
things, the Company and Executive with certain rights and obligations upon the
occurrence of a change of control.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, the parties hereby agree as follows:
1. Employment. The Company hereby agrees to employ Executive as President
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and Chief Executive Officer, and Executive hereby accepts such employment, on
the terms and conditions hereinafter set forth.
2. Term. The period of employment of Executive by the Company hereunder
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(the "Employment Period") shall commence on January 1, 2000 and shall terminate
on December 31, 2005, unless extended in writing by the parties. The Employment
Period may be sooner terminated by either party in accordance with Section 6 of
this Agreement.
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3. Position and Duties. During the Employment Period, Executive shall serve
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as President and Chief Executive Officer of the Company. Executive shall have
those powers and duties normally associated with the position of President and
Chief Executive Officer and such other powers and duties as may be prescribed by
the Board of Directors of the Company (the "Board").
4. Outside Business Activities Precluded. During the Employment Period,
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Executive shall devote his full energies, interest, abilities and productive
time to the performance of this Agreement. Executive shall not, without the
prior written consent of the Company, perform other competitive services of any
kind or engage in any other business activity, with or without compensation.
Executive shall not, without the prior written consent of the Company, engage in
any activity adverse to the Company's interests. Nothing contained herein is
intended to prohibit Executive from spending a reasonable amount of time
managing his personal investments and discharging his civic responsibilities and
other permitted activities as long as such activities do not interfere with his
duties and obligations under this Agreement.
5. Compensation and Related Matters.
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(a) Salary. The Company shall pay Executive an annual base salary of
$250,000 ("Base Salary") during each calendar year of the Employment Period,
prorated for any year in which this Agreement is in effect for only a portion of
the calendar year. Executive's Base Salary shall be payable in approximately
equal installments in accordance with the Company's customary payroll practices.
Executive's Base Salary shall be reviewed by the Company from time to time at
its discretion, and Executive shall receive such salary increases, if any, as
the Company, in its sole discretion, shall determine. If Executive's Base Salary
is increased by the Company, such increased Base Salary shall then constitute
the Base Salary for all purposes of this Agreement.
(b) Bonus. The Board's compensation committee (the "Compensation
Committee") shall maintain an executive bonus pool which will permit Executive
to earn a cash bonus each year of his Employment Period, based on a target bonus
equal to at least 100% of his Base Salary and based upon the operating profits
of the Company and the performance of Executive. The amount of Executive's cash
bonus shall be determined in the sole discretion of the Compensation Committee
and shall be dependent upon, among other things, the achievement of performance
targets established by the Compensation Committee from time to time. The
Compensation Committee has established an executive bonus program for the fiscal
year 2001, a copy of which is attached hereto as Exhibit A, which sets forth a
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target bonus for Executive and allows Executive to earn up to 175% of said
target bonus (depending upon the financial performance of the Company).
(c) Stock Options. As of January 1, 2000, the Company granted to Executive
stock options to purchase 100,000 shares of the Company's common stock at an
exercise price equal to the fair market value per share of the common stock on
the date of issuance. Such options have and will continue to vest on the
following schedule: 20% vested immediately upon grant and the remainder shall
vest at the rate of 20% per year over four years, beginning January 1, 2001 and
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continuing until January 1, 2004. Such options are evidenced by a stock option
agreement between the Company and Executive, a copy of which is attached hereto
as Exhibit B. Further, on March 4, 2002, the Board of Directors of the Company
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granted to Executive an additional stock option to purchase 20,000 shares of the
Company's common stock at an exercise price equal to the fair market value per
share of the Company's common stock on that date ($16.49), which options shall
vest on January 1, 2005; said additional options shall be evidenced by a stock
option agreement in a form that is substantially similar to Exhibit B attached
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hereto.
(d) Expenses. The Company shall promptly reimburse Executive for all
reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses in accordance with the Company's policies and
procedures now in force or as such policies and procedures may be modified with
respect to all executive officers of the Company.
(e) Vacation. Executive shall be entitled to the number of weeks of
vacation per year provided to the Company's executive officers under the
Company's executive vacation policy; provided, however, that Executive's
vacation shall not be less than three weeks per calendar year.
(f) Pension, Incentive Benefit Plans, and Medical Insurance. During the
Employment Period, Executive (and his spouse and dependents to the extent
provided therein) shall be entitled to participate in and be covered under all
welfare benefit plans or programs maintained by the Company from time to time
for the benefit of its executive officers including, without limitation, all
medical, dental, vision, life insurance and long-term disability plans and
programs. In addition, during the Employment Period, Executive shall be eligible
to participate in all pension, retirement, 401(k) and other employee benefit
plans and programs maintained from time to time by the Company for the benefit
of its executive officers, including, but not limited to, the Executive Deferred
Compensation Agreement (as defined below).
Notwithstanding any provision(s) of this Agreement to the contrary, (1) if
the Company terminates Executive's employment hereunder pursuant to Section 6(b)
due to his Disability or terminates Executive's employment hereunder pursuant to
Section 6(c) without Cause, (2) if Executive terminates his employment hereunder
for Good Reason (as defined in Section 21), or (3) if Executive's employment
hereunder continues until December 31, 2005, the Company shall be obligated, on
and/or after the applicable Date of Termination under Section 7(b), to
continuously provide (with no break(s) in coverage) medical, dental and vision
coverage under the Company's medical, dental and vision insurance plans and
programs as in effect from time to time with respect to group(s) of the
Company's non-bargaining unit active employees (the "Salaried Group Insurance
Coverage") for Executive and his spouse for the remainder of their respective
lives; provided, however, that to the extent that Executive and his spouse on
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and/or after such Date of Termination are ineligible for such Salaried Group
Insurance Coverage, the Company shall be obligated to continuously provide (with
no break(s) in coverage) medical, dental and vision coverage under the Company's
medical, dental and vision insurance plans and programs as in effect from time
to time with respect to group(s) of the Company's bargaining unit active
employees (the "Hourly Group Insurance Coverage") for Executive and his spouse
for the remainder of their respective lives. Notwithstanding the foregoing
provisions of this Section 5(f) and to the extent that Executive and his spouse,
on and/or after the applicable Date of
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Termination, are ineligible for Salaried Group Insurance Coverage and/or Hourly
Group Insurance Coverage, the Company shall obtain and continuously maintain
(with no break(s) in coverage) medical, dental and vision insurance coverage for
Executive and his spouse for the remainder of their respective lives through
policy(ies) issued by an insurance company (the "Individual Insurance Coverage")
that will provide medical, dental and vision benefits to Executive and his
spouse that are comparable to such benefits provided under the Salaried Group
Insurance Coverage (or, in the absence of any such Salaried Group Insurance
Coverage, such benefits provided under the Hourly Group Insurance Coverage). The
Salaried Group Insurance Coverage, Hourly Group Insurance Coverage, and/or
Individual Insurance Coverage shall be provided at no cost to Executive and/or
his spouse, except to the extent that (x) the monthly costs of such Salaried
Group Insurance Coverage, Hourly Group Insurance Coverage and/or Individual
Insurance Coverage after the applicable Date of Termination exceed (y) the
actual monthly costs to the Company of providing Salaried Group Insurance
Coverage to Executive and his spouse immediately prior to Executive's applicable
Date of Termination (the "Pre-Termination Salaried Group Insurance Coverage
Costs") (such increases in monthly Group Insurance Coverage costs are
hereinafter referred to as the "Difference"), in which case Executive shall pay
fifty percent (50%) of the Difference, but in any event Executive's obligation
to reimburse the Company for post-termination costs of Salaried Group Insurance
Coverage, Hourly Group Insurance Coverage and/or Individual Insurance Coverage
shall never exceed 50% of the Pre-Termination Salaried Group Insurance Coverage
Costs.
(g) Life Insurance. During the Employment Period and thereafter as provided
herein, the Company shall maintain a policy of insurance on Executive's life in
the face amount of Four Hundred Thousand Dollars ($400,000) comparable at all
times in term and scope with the policy described in Schedule 5(g) attached
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hereto, of which policy the Executive will be the owner. All of the premiums on
such policy shall be paid by the Company during the Executive's employment
hereunder.
(h) Automobile Allowance. During the Employment Period, Executive shall be
entitled to an automobile allowance not to exceed $1,000 per month. The amount
of the allowance shall cover all expenses related to the maintenance of a
business use automobile, including maintenance, depreciation, insurance and
business-related mileage.
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(i) Housing Allowance. During the Employment Period, Executive shall be
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entitled to a housing allowance equal to a minimum of $8,000 per calendar
quarter (the "Housing Allowance"), which amount shall be reviewed annually by
the Company's Board of Directors to determine the adequacy of such amount for
the next calendar year of Executive's Employment Period. For purposes of
determining Executive's compensation upon termination as provided in Section 8
hereof, Executive's "Base Salary" shall mean and include the annual base salary
as determined pursuant to Section 5(a) hereof, plus the amount of Executive's
Housing Allowance for the 12-month period ending on the Date of Termination
under Section 7(b).
6. Termination. Executive's employment hereunder may be terminated during
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the Employment Period under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his death.
(b) Disability. The Company shall have the right to terminate Executive's
employment hereunder upon his Disability.
(c) With or Without Cause. The Company shall have the right to terminate
Executive's employment hereunder at any time with or without Cause. For purposes
of this Agreement, the Company shall have "Cause" to terminate Executive's
employment if, in the good faith judgment of the Company, it is determined that
Executive:
(i) has engaged in willful misconduct, or breach of fiduciary duty
involving personal profit;
(ii) has engaged in willful or repeated failure to substantially
perform his duties or obligations hereunder (other than due to physical or
mental impairment);
(iii) has been convicted of, or has plead guilty or nolo contendere
to, a felony; or
(iv) has engaged in a material breach of any of the covenants set
forth in Sections 9(a) or (c).
(d) Voluntary. Executive shall have the right to terminate his employment
hereunder at any time by providing the Company with a Notice of Termination.
7. Termination Procedure.
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(a) Notice of Termination. Any termination of Executive's employment by the
Company or by Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 11. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated.
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(b) Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 6(b) or 6(c),
immediately upon delivery of a Notice of Termination to Executive (unless a
later date is set forth in the Notice of Termination), and (iii) if Executive's
employment is terminated pursuant to Section 6(d), ninety (90) days following
the delivery of a Notice of Termination to the Company; provided that, in the
case of this clause (iii), the Company may determine upon receipt of the Notice
of Termination that Executive's Date of Termination shall be immediate or some
time prior to the expiration of the ninety-day notice period.
8. Compensation Upon Termination. In the event Executive's employment
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terminates during the Employment Period, the Company shall provide Executive
with the payments and benefits set forth below. Executive acknowledges and
agrees that the payments set forth in this Section 8 constitute liquidated
damages for termination of his employment during the Employment Period.
(a) Death. If Executive's employment is terminated by his death:
(i) the Company shall pay to Executive's beneficiary, legal
representative or estate, as the case may be, the aggregate of (1) a Pro
Rata share of the Bonus Opportunity, (2) Executive's Base Salary through
the Date of Termination, and (3) accrued vacation through the Date of
Termination, which amount shall be payable as soon as practicable following
the Date of Termination, but in any event not later than sixty (60) days
thereafter;
(ii) the Company shall reimburse Executive's beneficiary, legal
representative or estate, as the case may be, pursuant to Section 5(d) for
reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive's beneficiary, legal representative or estate, as the
case may be, shall be entitled to any other rights, compensation and/or
benefits as may be due to any such persons or estate in accordance with the
terms and provisions of any agreements, plans or programs of the Company,
including, but not limited to, the Executive Deferred Compensation
Agreement (as defined below).
(b) Disability. If Executive's employment is terminated for Disability
pursuant to Section 6(b):
(i) the Company shall pay to Executive the aggregate of (1) a Pro Rata
share of the Bonus Opportunity, (2) Executive's Base Salary through the
Date of Termination, and (3) accrued vacation through the Date of
Termination, which amount shall be payable as soon as practicable following
the Date of Termination, but in any event not later than sixty (60) days
thereafter;
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(ii) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable expenses incurred, but not paid prior to such termination of
employment; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company, including,
but not limited to, the Executive Deferred Compensation Agreement (as
defined below).
(c) Without Cause. If Executive's employment is terminated by the Company
without Cause:
(i) the Company shall:
(1) continue paying Executive his Base Salary in accordance with
the Company's customary payroll practices through the earlier of (A)
twenty-four (24) months following the Date of Termination or (B)
December 31, 2005; provided, however, in no event shall the Company
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continue paying Executive his Base Salary for less than twelve (12)
months following the Date of Termination; provided, further, that the
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Company's obligation to continue such payments shall cease on the
earlier of (I) the date, if any, on which Executive becomes employed
by a subsequent employer and is eligible to receive substantially
similar compensation from such subsequent employer (but Executive
shall not be required to seek other employment), or (II) the date
Executive materially breaches the covenants set forth in Section 9(a)
or (c); and
(2) pay to Executive the aggregate of (Y) a Pro Rata share of the
Bonus Opportunity, and (Z) accrued vacation through the Date of
Termination, which aggregate amount shall be payable as soon as
practicable following the Date of Termination, but in any event not
later than sixty (60) days thereafter;
(ii) to the extent permitted by applicable law, the Company shall
maintain in full force and effect, for the continued benefit of Executive,
his spouse and his dependents (as applicable) through the earlier of (A)
twenty-four (24) months following the Date of Termination or (B) December
31, 2005, the life insurance plans and programs in which Executive, his
spouse and his dependents (as applicable) were participating immediately
prior to the Date of Termination at the level in effect and upon
substantially the same terms and conditions (including without limitation
contributions required by Executive for such benefits) as existed
immediately prior to the Date of Termination; provided, however, in no
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event shall the Company continue such benefits on behalf of Executive for
less than twelve (12) months following the Date of Termination; provided,
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further, that the Company's obligations to continue such benefits shall
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cease upon the earlier of (I) the date the date Executive materially
breaches the covenants set forth in Section 9(a) or (c), or (II) the date
or dates on which Executive becomes employed by a
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subsequent employer and is eligible to receive coverage and benefits from
such subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit, basis); provided, further,
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that Executive shall not be required to seek other employment or benefits;
(iii) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable expenses incurred, but not paid, prior to such termination
of employment;
(iv) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company, including,
but not limited to, the Executive Deferred Compensation Agreement (as
defined below); and
(v) any unvested stock options held by Executive shall immediately
vest and Executive shall be entitled to exercise the stock options pursuant
to the terms and conditions of any Company agreement or plan then in
effect; provided that Executive has not materially breached any of the
covenants set forth in Sections 9(a) or (c), Executive shall be entitled to
exercise such options for at least one (1) year following the Date of
Termination.
(vi) This Section 8(c) shall not apply if the Company terminates
Executive's employment without Cause during the Window Period (as defined
below). In the event that such termination is during the Window Period, the
terms of Section 8(e) shall govern the parties' rights and obligations
hereunder.
(d) Cause; Voluntary. If Executive's employment is terminated by the
Company for Cause pursuant to Section 6(c) or by Executive for any reason:
(i) the Company shall pay Executive his Base Salary and, to the extent
required by applicable law, his accrued vacation pay through the Date of
Termination, as soon as practicable following the Date of Termination;
(ii) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable expenses incurred, but not paid prior to such termination of
employment, unless such termination resulted from a misappropriation of
Company funds; and
(iii) Executive shall be entitled to any other rights, compensation
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company, including,
but not limited to, the Executive Deferred Compensation Agreement (as
defined below).
(iv) This Section 8(d) shall not apply if Executive terminates his
employment for Good Reason during the Window Period (as defined below). In
such an event, the terms of Section 8(e) shall govern the parties' rights
and obligations hereunder.
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(e) Window Period after a Change of Control. If, during the Window Period,
(1) the Company initiates the procedure to terminate Executive's employment
without Cause, or (2) if Executive initiates the procedure to terminate his
employment for Good Reason (as defined below):
(i) the Company shall pay to Executive the aggregate of: (1)
Executive's Base Salary through the Date of Termination, (2) accrued
vacation through the Date of Termination and (3) a Pro Rata Share of the
Bonus Opportunity;
(ii) in addition, the Company shall make a cash payment equal to two
(2) times the sum of: (1) Executive's annual Base Salary; and (2) the
greater of (A) the bonus amount paid or payable (including any amounts
payable under the bonus plan referenced in Section 5(b) hereof) to
Executive for the fiscal year of the Company immediately preceding the
Change of Control Date (provided, however, that the average of such bonus
amounts for the two (2) fiscal years of the Company immediately preceding
the Change of Control Date shall be used if available) or (B) the bonus
amount paid or payable to the Executive for the fiscal year of the Company
ending immediately prior to the Date of Termination (provided, however,
that the average of such bonus amounts for the two (2) fiscal years of the
Company ending immediately prior to the Date of Termination shall be used
if available);
(iii) to the extent permitted by applicable law, the Company shall
maintain in full force and effect, for the continued benefit of Executive,
his spouse and his dependents (as applicable) through the earlier of (A)
twenty-four (24) months following the Date of Termination or (B) December
31, 2005, the life insurance plans and programs in which Executive, his
spouse and his dependents (as applicable) were participating immediately
prior to the Date of Termination at the level in effect and upon
substantially the same terms and conditions (including without limitation
contributions required by Executive for such benefits) as existed
immediately prior to the Date of Termination; provided, however, in no
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event shall the Company continue such benefits on behalf of Executive for
less than twelve (12) months following the Date of Termination; provided,
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further, that the Company's obligations to continue such benefits shall
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cease upon the date or dates on which Executive becomes employed by a
subsequent employer and is eligible to receive coverage and benefits from
such subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage, or benefit-by-benefit, basis); provided, further,
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that Executive shall not be required to seek other employment or benefits;
(iv) the Company shall reimburse Executive pursuant to Section 5(d)
for reasonable expenses incurred, but not paid, prior to such termination
of employment;
(v) Executive shall be entitled to any other rights, compensation,
and/or benefits as may be due to Executive in accordance with the terms and
provisions of any agreements, plans or programs of the Company, including,
but not limited to, the Executive Deferred Compensation Agreement (as
defined below);
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(vi) any unvested stock options held by Executive shall immediately
vest and Executive shall be entitled to exercise the stock options pursuant
to the terms and conditions of any Company agreement or plan then in
effect; provided, however, that Executive in all cases shall be entitled to
exercise such options for at least one (1) year following the Date of
Termination;
(vii) all amounts payable to Executive by the Company pursuant to this
Section 8(e) shall be paid in cash in a single lump sum as soon as
practicable, but in no event more than ten (10) business days (or at such
earlier or later date required by law), following the Date of Termination;
and
(viii) The foregoing notwithstanding, the total of the severance
payments payable under this Section 8(c) shall be reduced to the extent
(but only to the extent) that the payment of such total severance payments
(as determined in good faith by the Company's certified public accountants)
would constitute an "excess parachute payment" under Section 280G of the
Internal Revenue Code of 1986, as amended. For the purpose of determining
whether such total severance payments would constitute an "excess parachute
payment" under Code Section 280G, the "base amount" computed under Code
Section 280G shall be allocated to the total severance payments (the
portion of the base amount so allocated shall be an amount which bears the
same ratio to the base amount as the present value of such total severance
payments bears to the aggregate present value of all "parachute payments"
under Code Section 280G).
9. Confidential Information; Ownership of Documents; Non-Competition.
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(a) Confidential Information. Executive shall hold in a fiduciary capacity
for the benefit of the Company all trade secrets and confidential information,
knowledge or data relating to the Company and its businesses and investments,
which shall have been obtained by Executive during Executive's employment by the
Company and which is not generally available public knowledge (other than by
acts of Executive in violation of this Agreement). Except as may be required or
appropriate in connection with carrying out his duties under this Agreement,
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law, or as is necessary in connection with any
adversarial proceeding against the Company (in which case Executive shall use
his reasonable best efforts in cooperating with the Company in obtaining a
protective order against disclosure by a court of competent jurisdiction),
communicate or divulge any such trade secrets, information, knowledge or data to
anyone other than the Company and those designated by the Company or on behalf
of the Company in the furtherance of its business or to perform duties
hereunder. The obligations in this Section 9(a) shall only apply during the
Employment Period and until the second (2nd) anniversary of the Executive's Date
of Termination.
(b) Removal of Documents; Rights to Products. All records, filings,
drawings, documents, models, equipment, and the like relating to the Company's
business which Executive has control over shall not be removed from the
Company's premises without its written consent,
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unless such removal is in the furtherance of the Company's business or is in
connection with Executive's carrying out his duties under this Agreement and, if
so removed, shall be returned to the Company promptly after termination of
Executive's employment hereunder, or otherwise promptly after removal if such
removal occurs following termination of employment. Executive shall assign to
the Company all rights to trade secrets and other products relating to the
Company's business developed by him alone or in conjunction with others at any
time while employed by the Company.
(c) Protection of Business. During the Employment Period and until the
second anniversary of Executive's Date of Termination (but only in the event
Executive is terminated by the Company for Cause or Executive terminates his
employment without Good Reason), Executive shall not (i) engage, anywhere within
the geographical areas in which the Company or any of its affiliates (the
"Designated Entities") are conducting their business operations or providing
services as of the Date of Termination, in any business which is being engaged
in by the Designated Entities as of the Date of Termination, directly or
indirectly, alone, in association with or as a shareholder, principal, agent,
partner, officer, director, employee or consultant of any other organization,
(ii) divert to any entity which is engaged in any business conducted by the
Designated Entities in the same geographic area as the Designated Entities, any
customer of any of the Designated Entities, or (iii) solicit any officer,
employee or consultant of any of the Designated Entities to leave the employ of
any of the Designated Entities. If, at any time, the provisions of this Section
9(c) shall be determined to be invalid or unenforceable, by reason of being
vague or unreasonable as to area, duration or scope of activity, this Section
9(c) shall be considered divisible and shall become and be immediately amended
to only such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter; and Executive agrees that this Section 9(c) as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein.
(d) Injunctive Relief. In the event of a breach or threatened breach of
this Section 9, Executive agrees that the Company shall be entitled to seek
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, Executive acknowledging that damages would be
inadequate and insufficient. If the Company's attempt to secure such an
injunction is not successful, the Company shall pay or reimburse all reasonable
attorneys' fees and other expenses and other costs incurred by Executive in
connection with such attempt. `
(e) Continuing Operation. Except as specifically provided in this Section
9, the termination of Executive's employment or of this Agreement shall have no
effect on the continuing operation of this Section 9.
10. Successors; Binding Agreement.
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(a) This Agreement may and shall be assigned or transferred to, and shall
be binding upon and shall inure to the benefit of, any successor of the Company,
and any such successor shall be deemed substituted for all purposes of the
"Company" under the terms of this
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Agreement. As used in this Agreement, the term "successor" shall mean any
person, firm, corporation or business entity which at any time, whether by
merger, purchase or otherwise, acquires all or substantially all of the assets
or the business of the Company. Notwithstanding such assignment, the Company
shall remain, with such successor, jointly and severally liable for all its
obligations hereunder. Failure of the Company to obtain the agreement of any
successor to be bound, directly or indirectly, by the terms of this Agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall immediately entitle Executive, at his sole option and
election, to compensation from the Company in the same amount and on the same
terms as Executive would be entitled in the event of a termination of employment
without Cause. Except as herein provided, this Agreement may not otherwise be
assigned by the Company (other than to a subsidiary or affiliate) without the
prior written consent of Executive.
(b) The services to be provided by Executive to the Company hereunder are
personal to Executive, and Executive's duties may not be assigned by Executive;
provided, however that this Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors, and
administrators, successors, heirs, distributees, devisees and legatees. If
Executive dies while any amounts payable to Executive hereunder remain
outstanding, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to Executive's devisee, legatee
or other designee or, in the absence of such designee, to Executive's estate.
11. Notice. All notices or other communications which are required or
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permitted hereunder shall be in writing and sufficient if delivered personally,
or sent by nationally-recognized, overnight courier or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
If to Executive: Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to the Company: Pemco Aviation Group, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board
Facsimile: (000) 000-0000
or to such other address as any party may have furnished to the other in writing
in accordance herewith. All such notices and other communications shall be
deemed to have been received (a) in the case of personal delivery, on the date
of such delivery, (b) in the case of a telecopy, when the party receiving such
telecopy shall have confirmed receipt of the communication, (c) in the case of
delivery by nationally-recognized, overnight courier, on the business day
following dispatch and (d) in the case of mailing, on the third business day
following such mailing.
12
12. Miscellaneous. No provisions of this Agreement may be amended, modified
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or waived unless such amendment or modification is agreed to in writing signed
by Executive and by a duly authorized officer of the Company, and such waiver is
set forth in writing and signed by the party to be charged. No waiver by either
party hereto at any time of any breach by the other party hereto of 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. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The respective rights and obligations of the parties hereunder of
this Agreement shall survive Executive's termination of employment and the
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations.
13. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Entire Agreement. This Agreement sets forth the entire agreement of the
----------------
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of such subject matter. Any
prior agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled.
16. Withholding. All payments hereunder shall be subject to any required
-----------
withholding of federal, state and local taxes pursuant to any applicable law or
regulation.
17. Section Headings. The section headings in this Agreement are for
----------------
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.
18. Public Disclosure. No press release or other public disclosure, either
-----------------
written or oral, of this Agreement or its terms shall be made by Executive
without the prior written consent of the Company.
19. Indemnification. From and after the date of this Agreement, the Company
---------------
hereby covenants and agrees to indemnify and hold harmless Executive in a manner
at least consistent with the provisions of the Company's Certificate of
Incorporation and By-laws, as in effect on the date of this Agreement.
20. Governing Law. The provisions of this Agreement shall be construed and
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enforced in accordance with the laws of the State of Delaware.
A-1
21. Definitions. Certain capitalized terms not otherwise defined in the
-----------
body of this Agreement shall have the meanings set forth below:
"Bonus Opportunity" means the bonus that Executive would have earned
for the fiscal year in which employment termination occurs under any and
all bonus plans in effect during such year, including but not limited to
the bonus plan referenced in Section 5(b) of this Agreement. This amount
shall be determined in good faith at the sole discretion of the Company's
Board of Directors. Wherever this Agreement provides for a payment based on
the Bonus Opportunity, the Board, in setting the amount of the payment
pursuant to any applicable bonus plan(s), shall presume that the Company's
minimum performance for such fiscal year will be comparable to the
Company's performance through the Date of Termination for such fiscal year
if such performance were extrapolated for the entire fiscal year, but the
Company's Board of Directors shall not be bound by this minimum performance
extrapolation if the Company's Board of Directors expects the Company's
actual results for such fiscal year to exceed the minimum performance
extrapolation.
"Change of Control" shall have the meaning accorded thereto in
Exhibit C hereto.
---------
"Change of Control Date" means the date on which a Change of Control
occurs.
"Executive Deferred Compensation Agreement" means that certain
deferred compensation agreement between the Company and Executive, a true
and correct copy of which is attached hereto as Exhibit D.
---------
"Good Reason" means the occurrence of any of the following, without
the express written consent of Executive, after the occurrence of a Change
of Control:
(i) the assignment to Executive of any duties inconsistent in any
material adverse respect with Executive's position, authority or
responsibilities as contemplated by Section 3 of this Agreement, or
any other material adverse change in such position, including titles,
authority or responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial
or inadvertent failure remedied by the Company promptly after receipt
of notice thereof given by Executive; or
(iii) the Company's requiring Executive to be based, or to
perform a substantial portion of his duties with the Company, at any
office or location more than 20 miles from that location at which he
performed his services specified under the provisions of Section 3
immediately prior to the Change of Control Date, except for travel
reasonably required in the performance of Executive's
responsibilities.
A-2
"Pro Rata" means the number of days elapsed prior to Executive's Date
of Termination as a percentage of the number of days in the fiscal year.
"Window Period" means the nine (9) month period immediately following
a Change of Control Date.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
Company:
Pemco Aviation Group, Inc.,
a Delaware corporation
By: /s/ X.X. Xxxxxxx
--------------------------
Name: H.T."Skip" Bowling
Title: Vice Chairman, Director
Executive:
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
A-3
EXHIBIT A
(2001 Incentive Compensation Plan)
[See attached.]
A-4
EXHIBIT B
(Stock Option Agreement)
[See attached.]
B-1
EXHIBIT C
Change of Control
-----------------
A "Change of Control" shall occur if:
(a) the individuals who, as of December 1, 1999, constitute the Board (the
"Incumbent Board"), cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director subsequent
to December 1, 1999 whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such an
individual were a member of the Incumbent Board; or
(b) any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than any
such individual, entity or group which includes a member of the Incumbent Board,
acquires (directly or indirectly) the beneficial ownership (within the meaning
of Rule 13d-3 promulgated under such Act) of more than 50% of the voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors ("Voting Power"); or
(c) consummation of a merger or consolidation involving the Company, or a
sale or disposition of all or substantially all of the Company's assets, or a
plan of liquidation or dissolution of the Company, other than (i) a merger or
consolidation in which the holders of the voting securities of the Company
outstanding immediately prior to the merger or consolidation hold at least a
majority of the Voting Power of the surviving corporation immediately after such
merger or consolidation, (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) by which no person,
other than any individual, entity or group which includes a member of the
Incumbent Board, acquires more than 50% of the Voting Power of the Company, or
(iii) a merger or consolidation in which the Company is the surviving
corporation and such transaction was determined not to be a Change of Control,
which transaction and determination was approved by a majority of the Board in
actions taken prior to, and with respect to, such transaction.
C-1
EXHIBIT D
Executive Deferred Compensation Agreement
-----------------------------------------
(See attached)
D-1
SCHEDULE 5(g)
(Life Insurance Policy)
[See attached Certificate of Insurance]
