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EXHIBIT 10.10
RANGER AEROSPACE CORPORATION
CHAIRMAN AGREEMENT
THIS AGREEMENT is made as of April 2, 1998, between Ranger
Aerospace Corporation, a Delaware corporation (the "Company"), Aircraft Services
International Group, Inc. ("ASIG"), Tioga Capital Corporation ("Tioga"), and
Xxxxxx Xxxxxxxx ("Executive").
The Company, ASIG and the Tioga desire to enter into an
agreement pursuant to which the Executive shall serve as Chairman of both the
Company and ASIG.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Chairman of the Board. The Company and ASIG hereby offer,
and Executive hereby accepts, the position of Chairman upon the terms and
conditions set forth in this Agreement.
2. Position and Duties.
(a) During the Board Period, as defined in paragraph 4,
Executive shall serve as Chairman of both the Company and ASIG and shall report
to and receive direction from the Board.
(b) Executive shall devote his best efforts to the business
and affairs of the Company and its Subsidiaries. Executive shall perform his
duties and responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner. The parties hereto acknowledge
and agree that Executive will not devote 100% of his business efforts to matters
pertaining to the Company and its Subsidiaries. During the Board Period,
Executive shall present to the Company, the Board and to the chief executive
officer of the Company every acquisition or investment opportunity in the
aerospace and aviation industries, whether foreign or domestic, of which
Executive becomes aware and desires to pursue. Executive may pursue any such
opportunity (as investor or otherwise) unless the Board provides written notice
to Executive within five business days after Executive has provided such
opportunity to the Board that the Company intends to pursue such opportunity.
3. Compensation.
(a) During the Board Period, Tioga shall be entitled to, and
ASIG or the Company shall pay, a Chairman's fee of $150,000 per year for
services Executive renders as Chairman, which shall adjust automatically on each
anniversary hereof by the Consumer Price Index, and which the Board may elect,
in its sole discretion, to increase at any time.
(b) Upon the occurrence of a Liquidity Event (provided that
Executive has not breached the terms of this Agreement or any other agreement
between Executive or Tioga on the one hand and the Company or ASIG on the other
and has not been terminated for Cause), Tioga shall be
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entitled to, and Ranger or ASIG shall pay, a bonus of $1,350,000, which amount
shall represent consideration and compensation for services rendered by
Executive under the terms of this Agreement.
(c) In connection with future private placements of equity
securities of the Company, the Company shall offer Tioga and/or Chairman the
right to purchase shares of such equity securities, at the price and on other
terms offered for sale by the Company pro rata (based on the aggregate fully
diluted percentage of equity securities of the Company owned by such Persons up
to an amount equal to the product determined below in this paragraph (c), and in
connection therewith, the Company shall make additional loans to Tioga or
Executive for the purpose of acquiring such equity, except that the Company
shall not be obligated, under any circumstances, to loan Tioga and/or Executive,
in the aggregate, an amount greater than an amount equal to the product of (i)
$1,500,000 multiplied by (ii) a fraction, the numerator of which is the
aggregate number of fully vested shares of Common Stock held by Executive and
his Family Group (as defined in the Securityholders Agreement dated as of the
date hereof) and the denominator of which is the aggregate number of fully
vested shares of Common Stock, calculated on a fully-diluted basis, held by all
employees of the Company and its Subsidiaries, Executive, and their respective
Family Groups on such date. At any time prior to a Qualified Public Offering, in
the event the Company offers common equity securities for sale to the Other
Investors or any of them, at a price per share below the per share price paid by
the Other Investors for common equity securities purchased under the Securities
Purchase Agreement, Chairman shall have the right to purchase for cash at the
same price and on the same terms his pro rata share (based on the percentage of
the total common equity securities of the Company held by Chairman or his Family
Group) of the securities offered by the Company; provided that if the Company
offers common equity securities for sale only in connection with its offer of
other securities of the Company, Chairman must also purchase his pro rata share
of such other securities.
(d) ASIG shall reimburse Executive for all travel and other
expenses reasonably incurred by Executive in the performance of his duties
pursuant to this Agreement, provided that Executive provides ASIG with
reasonable written documentation as required under ASIG's policies and
procedures to support reimbursement.
(e) For a period of three years from the date hereof,
Executive shall be entitled to receive health benefits and health, life and
disability insurance at levels and coverage generally provided to senior
executives at the Company, but shall receive no other benefits generally
provided to senior executives at the Company.
(f) If the Company has terminated Executive as Chairman, other
than for Cause, the Company or ASIG shall pay to Tioga (or such other person as
Chairman may direct), as severance compensation, so long as Executive complies
with the terms of this Agreement (including, without limitation paragraphs 5 and
6 hereof), an amount equal to the fee otherwise payable under paragraph 3(a)
above. Such payment shall be made in twelve equal monthly installments and shall
be subject to customary withholding taxes (if any).
4. Term. Executive shall serve as the Chairman for three (3)
years from the date hereof (the "Board Period"). Subject to earlier termination
as specifically provided in this Agreement, the Board Period shall be
automatically extended for additional terms of one (1) year each, unless,
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by an action of a majority of the directors then on the Board (excluding
Executive), the Company notifies Executive of its election not to extend the
Board Period in writing no less than ninety (90) days prior to the expiration of
the then current term,. The Board Period shall terminate (the "Termination")
prior to such date upon (i) Executive's resignation, death or Permanent
Disability, (ii) upon the removal of the Executive for Cause or (iii) a
Qualified Public Offering. The Board Period may be terminated, and the Executive
may be removed as Chairman at any time (whether with or without Cause) at the
option of the Board.
5. Confidentiality. Executive understands and agrees that the
nature of the Company's business, including the Company's customer lists,
business plans, budgets, contracts, personnel information, methods and systems
used in conducting business, pricing policies, technical bulletins, manuals,
profit and loss information and other related internal business information and
trade secrets are all of a confidential nature and are valuable assets of the
Company. Executive covenants and agrees, upon due termination of the Board
Period for any reason, to immediately return to the Company all such
confidential information and documents referred to in the preceding sentence
(including any other trade secret information) and will not make copies of such
materials. Further, Executive covenants and agrees that he will not at any time
furnish, divulge or otherwise disclose such confidential information or material
to anyone other than those within the Company authorized to receive information,
and will not use such material and information against the best interest of the
Company, except as required by law. In the event of any actual or threatened
breach by Executive of the provisions of this confidentiality covenant, the
Company shall be entitled to a temporary and/or permanent injunction from any
court of competent jurisdiction, without posting bond or other security,
restraining Executive from violating this confidentiality covenant. Nothing
herein stated shall be construed as prohibiting the Company from pursuing any
other remedies available to Company for such breach or threatened breach,
including the recovery of damages from Executive.
6. Noncompete and Nonsolicitation. During the Board Period and
for a period of eighteen (18) months after Executive's Termination (unless
Executive has been terminated without Cause, in which case, during the Board
Period and for a period of twelve(12) months thereafter) , Executive will not
(for himself or on behalf of, or in conjunction with any other person or
persons, limited liability company, partnership, proprietorship, corporation or
other business entity), directly or indirectly, own, manage, operate, control,
be employed by, consult with, participate in, or be connected in any manner with
the ownership, management, operation, consulting or control of, any business
engaged in the Company's Business, and operating anywhere in North America,
Continental Europe and the United Kingdom, Bahamas and any other country where
the Company is operating or has a joint venture on the date of Executive's
termination of employment. Notwithstanding anything contrary in this paragraph,
this covenant not to compete shall not prohibit Executive from owning less than
2% of any class of stock in any publicly traded corporation provided that
Executive has no rights or affiliation with such corporation other than his
rights as a stockholder. In the event of any actual or threatened breach by
Executive of the provisions of this non-competition covenant, the Company and/or
ASIG shall, notwithstanding the provisions of paragraph 9(j), be entitled to a
temporary and/or permanent injunction from any court of competent jurisdiction,
without posting bond or other security, restraining Executive from owning,
managing, operating, controlling, being employed by, participating in or being
in any way so connected with any such business. Nothing herein stated shall be
construed as prohibiting the Company and/or ASIG from pursuing any other
remedies available to the Company and/or ASIG for such breach or threatened
breach, including the recovery of damages from Executive.
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During the Board Period and for a period of eighteen (18)
months after Executive's Termination, Executive shall not directly or indirectly
through another entity (i) induce or attempt to induce any employee of the
Company or its direct or indirect Subsidiaries, or in any way interfere with the
relationship between the Company or its direct or indirect Subsidiaries and any
employee thereof, (ii) hire any person who was an employee of the Company or its
direct or indirect Subsidiaries at any time while Executive served as Chairman
or (iii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or its direct or indirect
Subsidiaries to cease doing business with the Company or its direct or indirect
Subsidiaries, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or its direct
or indirect Subsidiaries (including, without limitation, making any negative
statements or communications about the Company or the Company's stockholders,
other directors or management).
If any one of the restrictions contained herein shall for any
reason be held to be excessively broad as to duration or geographical area, it
shall be deemed amended by limiting and reducing it so as to be valid and
enforceable to the extent compatible with applicable law.
7. Definitions.
"Board' means the Board of Directors of the Company.
"Cause" shall mean any of the following acts by Executive: (i)
the commission of a felony or a crime involving moral turpitude (as determined
by the Board in its good faith judgment) or any indictment for a felony or crime
involving moral turpitude, (ii) the commission of any other act or omission
involving dishonesty, disloyalty or fraud with respect to the Company or any of
its Subsidiaries or any of their customers or suppliers, (iii) conduct tending
to bring the Company or any of its Subsidiaries into substantial public disgrace
or disrepute, (iv) failure to perform duties as reasonably directed by the Board
which failure is not cured within 15 days after written notice thereof to
Executive, (v) gross negligence or willful misconduct with respect to the
Company or any of its Subsidiaries or (vi) any other material breach of this
Agreement which is not cured within 15 days after written notice thereof to
Executive.
Should the Company and Executive be unable to agree on whether
or not the Executive's conduct, acts or omissions constitute Cause within thirty
(30)days after the Board Period and Executive's duties as Chairman have been
terminated, the controversy as to whether Executive's conduct constitutes Cause
(without regard to whether the Board acted in good faith) shall be settled by
arbitration as provided in paragraph 9(j). Executive shall not be deemed to have
been terminated for "Cause" without delivery to Executive of a written notice
from the Company specifying in reasonable detail the facts and circumstances
that are the basis for terminating the Board Period and Executive's duties as
Chairman.
"Common Stock" shall mean any class of common stock of the
Company, whether voting or nonvoting, issued and outstanding.
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"Company Stock" means the Company's Common Stock, Notes and
Preferred Stock.
"Company Business" shall include any business engaged in by
the Company and/or ASIG at any time during the Board Period, including without
limitation, ASIG's business of (a) providing fueling services at airports, (b)
owning or operating fuel storage and distribution facilities, and (c) providing
ground handling, baggage and supply services at airports.
"Independent Third Party" means any person (other than
Chairman and all other executive employees of the Company and its Subsidiaries)
(i) who, immediately prior to the contemplated transaction, does not own Company
Stock representing in excess of 5% of the Company's Voting Power, (ii) who is
not controlling, controlled by or under common control with any such person, and
(iii) who is not the spouse or descendant (by birth or adoption) of any such
person.
"Liquidity Event" means (i) a sale for cash of all or
substantially all of the assets of the Company or ASIG to an Independent Third
Party pursuant to which the holders of Company Stock receive cash or Readily
Marketable Securities sufficient to return to the Other Investors in an amount
in excess of the aggregate purchase price paid for Company stock under the
Purchase Agreement plus $1,350,000, (ii) a recapitalization pursuant to which
the Notes are repaid in full, the Preferred Stock is redeemed and the holders of
Common Stock receive cash or Readily Marketable Securities sufficient to return
to the Other Investors in an amount in excess of the aggregate purchase price
paid for Company stock under the Purchase Agreement plus $1,350,000, (iii) a
sale of all of the capital stock of the Company for cash or Readily Marketable
Securities sufficient to return to the Other Investors in an amount in excess of
the aggregate purchase price paid for Company stock under the Purchase
Agreement, (iv) upon the termination of all holdback or standstill agreements
entered into by the Company or the Other Investors in connection with the
consummation of a Qualified Public Offering or (v) the Company Stock satisfying
the Market Float Requirements.
"1933 Act" means the Securities Act of 1933, as amended from
time to time.
"Market Float Requirements" means that the Common Stock which
has been registered and sold in one or more underwritten public offerings has an
aggregate capitalization value in excess of $30,000,000 of Common Stock.
"Notes" means the subordinated notes issued by the Company
under the Securities Purchase Agreement.
"Other Investors" means each of Xxxx Xxxxxxx Mutual Life
Insurance Company and CIBC Wood Gundy Ventures, Inc., Xxxxxxx Xxxxxx and
Xxxxxxxx Street Partners, II.
"Permanent Disability" means a disability which, in the good
faith judgment of the Board of Directors, renders Executive mentally
incapacitated or physically disabled so that he is unable to engage in his usual
duties for a period of ninety (90) days or more, whether consecutive or not,
within any twelve (12) consecutive month period.
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"Preferred Stock" means the Series A Preferred Stock of the
Company, issued and outstanding.
"Qualified Public Offering" means the sale, in an underwritten
public offering by the Company registered under the 1933 Act, of shares of
Common Stock having an aggregate primary offering value of at least $30 million
and a market valuation of the Common Stock that would, should the Company be
liquidated, be sufficient to return to the Other Investors their investments
made pursuant to the Securities Purchase Agreement plus $1,350,000.
"Readily Marketable Securities" means securities of any class
which are freely tradeable without restriction, and of which securities of such
class have been registered and sold in one or more underwritten public offerings
and that at the time of determination have an aggregate market value in excess
of $30,000,000.
"Securities Purchase Agreement" means the Securities Purchase
Agreement of even date between the Company and the other persons named therein.
"Securityholders Agreement" means the Securityholders
Agreement of even date between the Company, Xxxx Xxxxxxx Mutual Life Insurance
Company, CIBC Wood Gundy Ventures, Inc., the Xxxxxxxx Xxxxxxxx Trust and certain
other persons named therein.
"Subsidiary" means any corporation of which the Company owns
securities having a majority of the ordinary voting power in electing the board
of directors directly or through one or more subsidiaries.
"Termination" has the meaning set forth in paragraph 4.
"Voting Power" means, with respect to each share of Company
Stock as determined on a fully-diluted basis, one (1) vote per share with
respect to each share of Class A Common Stock and each share of Class B Common
Stock (whether designated as voting or nonvoting).
8. Notices. Any notice provided for in this Agreement must be
in writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
To the Company:
Ranger Aerospace Corporation
GSP International Airport
Box 12233
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
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With copies (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To ASIG:
Aircraft Service International Group, Inc.
0000 XX 00 Xxxxxxx, #000
Xxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
To Executive:
Xxxxxx Xxxxxxxx
Tioga Capital Corporation
000 Xxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxx, Esq.
Coudert Brothers
0000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S.
mail.
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9. General Provisions.
(a) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement and those documents
expressly referred to herein embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
(c) Counterparts. This Agreement may be executed in any number
of counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by Executive, the Company, ASIG and their respective successors and assigns;
provided that the rights and obligations of Executive under this Agreement shall
not be assignable.
(e) Choice of Law. The corporate law of the State of Delaware
shall govern all questions concerning the relative rights of the Company or its
stockholders. All other questions con cerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits hereto shall
be governed by the internal law, and not the law of conflicts, of the State of
Delaware.
(f) Remedies. Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorney's fees) caused by any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party shall be entitled to specific performance and/or other injunctive
relief (without posting any bond or deposit) from any court of competent
jurisdiction in order to enforce or prevent any violations of the provisions of
this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may
be amended and waived only by the written agreement of the Company and the
Chairman.
(h) Business Days. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or legal
holiday in the state in which the Company's chief executive office is located,
the time period shall be automatically extended to the business day immediately
following such Saturday, Sunday or holiday.
(i) Executive's Representations. Executive hereby represents
and warrants to the Company that (a) the execution, delivery and performance of
this Agreement by Executive does not and shall not conflict with, breach,
violate or cause a default under any contract, agreement,
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instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (b) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (c) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby
acknowledges and represents that he has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.
(j) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration in
accordance with the requirements of the labor arbitration rules of the American
Arbitration Association then in effect. Arbitration shall commence upon the
appointment of arbitrators mutually agreeable to the parties and shall continue,
without interruption unless required by arbitrator, with written decision of the
arbitrator(s) to be issued within one-hundred fifty (150) days after filing a
Notice of Arbitration. All expenses and fees incurred in the conduct of the
arbitration shall be shared by Executive and ASIG. Each party shall bear its own
respective attorneys' and other legal fees. Any decision, award or order by
arbitration shall be binding upon the parties hereof.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
RANGER AEROSPACE CORPORATION
By: /s/ XXXXXXX X. XXXXXX
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Its: President and CEO
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AIRCRAFT SERVICES INTERNATIONAL
GROUP, INC.
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Its: President
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TIOGA CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------
Its: President
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/s/ XXXXXX X. XXXXXXXX
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XXXXXX XXXXXXXX
