EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of August 1, 1998,
by and between TriStar Aerospace, Inc., doing business at 0000 Xxxxxxxxxxx,
Xxxxxx, Xxxxx 00000 (the "Company") and Xxxxxx X. Xxxxxx, residing presently at
000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000 ("Employee").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of distributing aerospace
hardware and providing inventory management services; and
WHEREAS, Employee is experienced and knowledgeable in the management, sales
and marketing of aerospace hardware business and has agreed to work for the
Company as its Executive Vice President of Sales and Marketing;
WHEREAS, the Company is interested in employing Employee and Employee is
interested in working for the Company; and
WHEREAS, this Agreement will supersede and replace all prior consulting
and/or employment agreements between the Company and Employee;
NOW THEREFORE, in consideration of the mutual covenants and conditions
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT. Employee is hereby employed in the position of Executive
Vice President of Sales and Marketing of the Company to render services in
connection with the management, sales and marketing of the Company. Employee
hereby accepts such employment and agrees that he will at all times use his best
efforts to discharge his duties and utilize his skills in the best interests of
the Company.
2. DUTIES.
(a) Employee will have responsibility for all functions and duties
related to the sales and marketing of the Company, including but not
limited to, business development and customer relations.
(b) Employee will perform all other duties as assigned by the
President and Chief Executive Officer and by the Company's Board of
Directors.
3. LOCATION OF EMPLOYMENT. Employee's office and principal place of
business in carrying out his duties hereunder shall be at the Company's
corporate headquarters in Dallas. Employee will give reasonable consideration
to any proposed change in the location of his employment if such change would
serve the best interest of the Company. If the Company does relocate Employee,
it will provide him with adequate financial compensation to offset his moving
expenses and any losses he incurs due to the relocation.
4. TERM. Employee's employment under this Agreement shall be for a term
of two years commencing on August 1, 1998 (the "Commencement Date") and ending
on August 3, 2000. This Agreement may be renewed if 30 days before the
termination date of this Agreement the parties agree in writing to extend the
Agreement to a specific date. The period beginning on the Commencement Date and
ending July 31, 2000, or upon the expiration of any renewal period shall be
referred to as the "Employment Term."
5. COMPENSATION. In consideration for the services to be performed by
Employee herein, the Company shall pay Employee as follows:
(a) BASE SALARY. The Company shall pay to Employee an annual base
salary of $140,000. This salary shall be payable in accordance with
the customary payroll practices of the Company. The Employee shall be
eligible for such raises as the Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee"), in its sole
and absolute discretion, may provide.
(b) BONUS. In addition to a base salary, the Employee is entitled to
participate in the Executive and Key Employee Incentive Plan or some
other Incentive or Bonus Plan then approved and authorized by the
Compensation Committee. A copy of the most recently approved Bonus
Plan has been provided to and reviewed by the Employee.
(c) TAXES. All compensation paid to Employee hereunder shall be
subject to applicable employment and withholding taxes. Employee
shall be responsible for any taxes resulting from a determination that
any portion of any benefits supplied to Employee hereunder may be
reimbursing personal as well as business expenses.
6. EMPLOYEE BENEFITS.
(a) BENEFIT PLANS OR OTHER ARRANGEMENTS. Subject to meeting
eligibility provisions, Employee shall be entitled to participate in
all employee benefit plans of the Company, and to receive such other
employee benefits as are available to the Company's officers as such
benefits may exist from time to time, including but not limited to,
group health, disability and life insurance benefits and participation
in the Company's 401K Savings Plan, and the Company's profit sharing,
stock purchase and stock option plans. Employee will be subject to
any changes made to the aforesaid employee benefit plans.
(b) VACATIONS AND SICK LEAVE. Employee shall be entitled to receive
the same number of sick leave and vacation days as is maintained in
the Company's vacation and sick leave plan.
7 EXPENSES.
(a) RELOCATION EXPENSES. Upon presentation by the Employee to the
Company of expense reports and satisfactory supporting documentation
evidencing payment of such expenses, in such form as shall be
requested by the Company, the Company shall reimburse the Employee for
such expenses as the
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Board of Directors of the Company, in its sole and absolute
discretion, determines to be necessary and reasonable in
connection with the relocation of Employee, his family and their
personal effects to a new location designated by the Company.
(b) BUSINESS EXPENSES. During the term of the Employee's employment
hereunder, the Employee shall be entitled to receive reimbursement for
all reasonable travel and business expenses incurred by him (in
accordance with the policies and procedures of the Company) at the
express direction of the President of the Company, provided that the
Employee promptly and properly accounts therefore in accordance with
the Company's expense policy.
8. TERMINATION. Employee's employment may be terminated during the
Employment Term by either party at any time by giving written notice to the
other party stating the grounds for such termination in accordance with the
provisions of this Section 8. In the event of such termination, Employee's
rights and entitlements shall be determined in accordance with the following
provisions:
(a) DISABILITY. The Company shall have the right to terminate this
Agreement if Employee incurs a permanent disability during the
Employment Term. For the purpose of this Agreement, "Permanent
Disability" shall mean inability of Employee to perform the services
required hereunder due to physical or mental disability which
continues for either (i) a total of 180 working days during any
12-month period or (ii) 150 consecutive working days. In the event
that either party disputes whether Employee has a permanent
disability, such dispute shall be submitted to a physician mutually
agreed upon by Employee or his legal guardian and the Company. If
the parties are unable to agree on a mutually satisfactory physician,
each shall select a reputable physician, who, together, shall in turn
select a third physician whose determination of Employee's ability to
perform his job duties shall be conclusive and binding to the parties.
Evidence of such disability shall be conclusive notwithstanding that a
disability policy or clause in an insurance policy covering Employee
shall contain a different definition of "Permanent Disability."
If Employee suffers a Permanent Disability and the Company terminates
his employment after the appropriate time period as cited above, the
Company will pay to Employee the balance of his base salary under this
Agreement pursuant to subsection (f) below until the end of the
Employment Term less any disability payments which Employee is
eligible to receive from any insurance company pursuant to a policy
purchased by the Company. Employee also shall receive the cash value
of any earned but unused sick leave and vacation time.
(b) DEATH. If Employee dies during the Employment Term, the Company
will pay to his estate the balance of his base salary under this
Agreement pursuant to subsection (f) below. Employee's estate also
shall receive the cash value of any earned but unused sick leave and
vacation time.
(c) "FOR CAUSE". If the Company terminates this Agreement "For
Cause" as defined in this subsection, Employee shall not be entitled
to any damages from the Company or its employees for such termination.
If the Company terminates this
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Agreement for cause, Employee shall receive his base salary under
Section 5(a) only through the date of termination.
For purposes of this Agreement, "For Cause" shall mean the willful,
continued and material failure by Employee to follow the reasonable
and legitimate directions of the Board of Directors or of the
President and Chief Executive Officer in connection with Employee's
duties hereunder, but only after (i) the Chairman and Chief Executive
Officer delivers a written notice to Employee specifically setting
forth the manner in which he believes Employee has failed to follow
such directions and providing at least 30 days to correct the
deficiencies, and (ii) such willful and material failure to follow
directions is not corrected within the designated time period;
conviction of a felony; embezzlement from the Company; fraud; engaging
in conduct contrary to the best interests of the Company; habitual
absenteeism not related to disability or illness, but only after
written notice from the Board of Directors followed by a repetition of
such habitual absenteeism.
(d) "WITHOUT CAUSE" AND CONSTRUCTIVE TERMINATION. If the Company
terminates this Agreement without Cause or if Employee terminates this
Agreement because of Constructive Termination as defined below,
Employee shall receive an amount equal to two times his base salary
for the twelve month period immediately preceding such termination
of employment in accordance with subsection (f) below, and the cash
value of any earned but unused sick leave and vacation time.
If Employee's employment with the Company terminates pursuant to this
subsection, he shall not be required to mitigate damages by seeking
other employment or otherwise; however, the amount paid by the Company
shall be reduced by any compensation earned by Employee from another
employer or through consulting.
For purposes of this Agreement "Constructive Termination" means the
continued and material failure of the Company to comply with its
covenants and obligations under this Agreement, but only after (i)
Employee delivers written notice to the Company specifically setting
forth the manner in which he believes the Company has so failed to
comply with its covenants and obligations and providing at least 30
days to correct the deficiencies, and (ii) such material failures are
not corrected within the designated time period.
(e) RESIGNATION OR NONRENEWAL OF AGREEMENT. If Employee resigns from
his employment during the Employment Term, he shall receive his base
salary through his date of termination and the cash value of any
earned but unused sick leave and vacation time. If this Agreement
expires by its own terms or either Company or Employee choose not to
renew the Agreement, then Employee shall receive his base salary
through the date the Agreement expires and the cash value of any
earned but unused sick leave and vacation time.
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(f) TIME FOR PAYMENT. The payment of any balance of Employee's base
salary due under this section will be made on the Company's regularly
scheduled pay days.
9. ADDITIONAL OBLIGATIONS OF EMPLOYEE DURING AND AFTER EMPLOYMENT.
(a) ACKNOWLEDGMENTS. Employee acknowledges that, as an officer
and employee of the Company (including its subsidiaries and its
affiliated companies) he will obtain information that derives
independent value from not being generally known to the public.
Employee acknowledges that part of the consideration for the
covenant not to compete in Section 10 is supported by this factor.
(b) NONCOMPETITION AND NONSOLICITATION. During the Employment
Term and for such period of time following the Employment Term as
the Employee shall receive payments pursuant to Section 8(d) hereof
or in the event Employee is terminated for Cause, then for a period
of 12 months from the Date of Termination, Employee will not,
directly or indirectly, work for or provide any services to any
employer or other business entity who competes with the Company.
During such period of noncompetition, Employee shall not solicit
business from any party who, on the date of termination of
Employee's employment is, or within one year prior thereto was, a
customer of the Company or to whom the Company has made, or from
whom the Company has received, a written sales proposal within 12
months prior to such date of termination. Employee understands,
acknowledges, and agrees that such customers are developed and
maintained by the Company through use of confidential, proprietary,
and trade secret information to which Employee may have access
during his employment term. The requirement of this subsection
does not extend to geographical locations in which the Company is
no longer doing business at the time Employee's employment
terminates. Employee also agrees that until 12 months after the
termination of his employment for any reason, he will not directly
or indirectly attempt to persuade or induce any Company employee to
leave his or her employment with the Company or hire any such
employee to work with Employee at a subsequent employer.
(c) RECORDS. All records, files, documents, and the like, or
abstracts, summaries, or copies thereof, relating to the business of
the Company, which the Company or Employee shall prepare or use or
come into contact with during his employment, shall remain the sole
property of the Company and shall not be removed from the premises or
disclosed to any person without written consent of the Company, and
Employee shall promptly return all such records in his possession or
under his control to the Company upon termination of his employment.
(d) TRADE SECRETS AND CONFIDENTIALITY. During the course of
Employee's employment, he will have access to and become familiar with
various trade secrets and confidential information belonging to the
Company, consisting of but not limited to, compilations of
information, financial and operations records, technical
specifications, sales procedures, customer requirements, pricing
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information, customer and supplier lists, methods of doing business,
and business plans. Employee acknowledges that such confidential
information and trade secrets exist and are owned and shall continue
to be owned solely by the Company and that he shall not discuss or
disclose any trade secrets or confidential information belonging to
the Company to any person or entity except as is required for him to
perform his duties under this Agreement.
(e) RELIEF. In addition to its other remedies, the Company shall be
entitled to equitable relief, including provisional and final
injunctive relief, to enforce its rights under this section.
10. NOTICES. All notices required to be given hereunder shall be
personally delivered to the signatories of this Agreement or shall be given by
certified mail, return receipt requested, addressed to the party to which the
notice is to be given at the address for that party first set forth above.
11. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, except involving matters under Section 9 of this Agreement which
will be resolved in the Texas State Courts, shall be settled by binding
arbitration. Any such arbitration proceedings shall be conducted as follows:
(a) Any party wishing to pursue a claim or controversy under this
section must give the other party written notice of the claim or
controversy within 180 days after the disputed event occurred.
(b) Arbitration shall be conducted by three arbitrators, one to be
selected by each of the parties and the third to be designated by the
two arbitrators so selected. In the event of their failure to agree
on the third arbitrator, selection shall be made by the American
Arbitration Association of Dallas, Texas where the arbitration shall
take place.
(c) The arbitrators shall follow the Employment Arbitration Rules of
the American Arbitration Association, except as otherwise provided
herein. The arbitrators shall substantially comply with Texas rules
of evidence; shall grant essential but limited discovery; shall
provide for the exchange of witness lists and exhibit copies; shall
conduct a pretrial hearing; and shall consider dispositive motions.
Each party shall have the right to request the arbitrators to make
findings of specific factual issues.
(d) In the event the Company terminates Employee's employment under
Section 8(c) of this Agreement and Employee challenges the termination
under this section, if the Arbitrator rules that the Company did not
have cause to terminate Employee's employment, the maximum amount of
damages that the Arbitrator may award to Employee is the balance of
his base salary under this Agreement and the cash value of any earned
but unused sick leave and vacation time, $25,000 for relocation
expenses, and Employee's legal fees and expenses in bringing the
arbitration.
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(e) The arbitrators shall complete their proceedings and render their
decision within 40 days after submission of the dispute to them,
unless both parties agree to an extension. Each party shall cooperate
with the arbitrators to comply with procedural time requirements, and
the failure of either to do so shall entitle the arbitrators to extend
the arbitration proceedings accordingly and to impose sanctions on the
party responsible for the delay, payable to the other party.
(f) The majority decision of the arbitrators shall contain
findings of facts on which the decision is based, including any
specific factual findings requested by either party, and shall
further contain the reasons for the decision with reference to the
legal principles on which the arbitrators relied. Such decision of
the arbitrators shall be final and binding upon the parties, and
accordingly the Company and Employee shall promptly comply with the
terms of such award, and a judgment by a court of competent
jurisdiction may be entered in accordance therewith.
(g) The fees and expenses of the arbitrators in connection with the
resolution of disputes pursuant hereto shall be borne by the party who
does not prevail in the arbitration.
(h) The Company and Employee hereby consent to the jurisdiction of
the courts of the State of Texas for purposes of entering judgment
with respect to an arbitration award.
12. INDEMNIFICATION. Employee will be subject to and provided the
protection afforded in the indemnification provisions of the current provisions
of the Company's Certificate of Incorporation and By-Laws.
13. MISCELLANEOUS PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement replaces and supplants all
prior agreements, oral or written, between the parties and constitutes
the entire understanding of the parties; and no change, alteration or
modification hereof may be made except by a writing signed by the
parties hereto.
(b) SUCCESSION. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. The Company shall have the
right to assign this Agreement to a parent, affiliate or subsidiary
corporation or to any corporation with which it may merge or
consolidate subject to the provisions of Section 8(e) herein.
(c) APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
(d) AMENDMENT. This Agreement may only be amended, or a new
agreement substituted, by a written instrument duly authorized and
executed by the Company and Employee.
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(e) WAIVER. The waiver by either party of a breach or violation of
any provision of this Agreement shall not operate as or be construed
as a waiver of any subsequent breach hereof.
(f) SEVERABILITY. The Company and Employee agree that each of the
foregoing covenants shall be deemed a separate, severable and
independent covenant, and in the event any covenant shall be declared
invalid by any court of competent jurisdiction, such invalidity shall
not in any manner affect or impair the validity or enforceability of
any other unrelated part or provision of such covenant or of any other
covenant contained herein.
(g) MULTIPLE ORIGINALS. This Agreement may be executed in multiple
originals, each of which shall be deemed an original.
IN WITNESS WHEREOF the parties have executed this Agreement as of this 1st
day of August, 1998.
COMPANY:
TriStar Aerospace, Inc.
By: /s/XXXXXXX XXXXXXXXXX
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Xxxxxxx Xxxxxxxxxx
President and Chief Executive Officer
EMPLOYEE:
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
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