SEPARATION AGREEMENT
Exhibit 10.1
This Agreement is entered into by and between Xxxxxx X. Xxxxxxxx (“Executive”), a resident of
the state of Texas, and Xxxxxx Aircraft Industries, Inc., a Delaware corporation with its principal
place of business in Dallas, Texas (“Xxxxxx” or the “Company”).
Executive and Xxxxxx (“the parties”) have agreed that Executive’s employment with the Company
will conclude as provided in this Agreement. In connection with this separation from employment and
subject to this Agreement, Xxxxxx has agreed to provide Executive with certain payments and other
benefits to which Executive would not be entitled absent his execution of this Agreement. Further,
Executive and Xxxxxx desire to settle any and all disputes between the parties arising out of the
employment relationship or separation from employment.
Therefore, in consideration of the covenants and agreements set forth in this Agreement,
Executive and Xxxxxx agree as follows:
1. Executive agrees that his separation from employment with Xxxxxx was effective June 9, 2006
(“Separation Date”).
2. Compensation: In connection with the Executive’s separation from Xxxxxx, and in lieu
of other benefits that might be provided under any other layoff or severance policy, plan or
agreement, Xxxxxx will provide Executive the following payments and benefits in exchange for his
fulfillment of the terms and obligations in this Agreement:
a. Separation Pay: Within thirty (30) days after the Effective Date of this Agreement
(as defined in Paragraph 11), Xxxxxx will pay to Executive a one-time lump sum equal to
fifty-two (52) times Executive’s current weekly, regular base salary. This payment will be
made only on the conditions that Executive has signed this Agreement, has not exercised his
right to revoke this Agreement (as described more fully in Paragraph 10), and has fulfilled
the other obligations set forth in this Agreement. This payment will not be considered
eligible compensation for purposes of the Xxxxxx Retirement Plan or the Savings and
Investment Plan.
b. Accrued Vacation. Within ten (10) days after the Separation Date, Executive will
receive payment for all accrued but unused vacation, if any.
c. Employee Benefits: Except as otherwise specified in this Agreement or under terms of
the applicable employee benefit plans, all of Executive’s privileges, perquisites and
benefits as a Xxxxxx employee will end as of the close of business on the Separation Date.
Neither Executive nor his dependents will be eligible for coverage under the Company’s
employee health and welfare benefit plan or any supplemental health care benefits plan
after midnight Central Time on the Separation Date.
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Executive may elect to continue existing group medical and dental benefits coverage
for himself and his eligible dependents under COBRA at regular COBRA rates. The Company
will pay Executive a one-time lump sum equal to the amount of his regular COBRA
continuation coverage costs for twelve months, less the amount of his applicable weekly
contributions for such coverage, as calculated on the Separation Date. If Executive is not
covered by medical and dental benefits as of the Separation Date, Executive is not eligible
to receive this payment.
Executive is responsible for paying the applicable cost of any COBRA coverage, along
with any administrative fees (with after-tax dollars). If rates for active employees
increase during the COBRA continuation period, Executive’s costs will also increase.
Likewise, the coverage offered is the same as is offered to similarly-situated active
employees, including any amendments to or terminations of the group medical and dental
plans occurring after the Separation Date.
d. Outplacement Assistance: Outplacement services will be provided to Executive by the
Company’s designated outplacement service provider through March 15, 2007. All services
will be subject to then-applicable contract terms between the Company and the provider.
e. Withholdings: Xxxxxx will withhold all required payroll deductions, including any
applicable taxes, from the above payments.
3. Inclusive of Income and All Other Benefits: Except as provided in Paragraph 2 above,
Executive acknowledges and agrees that that this Agreement provides for compensation over and above
anything to which he would have otherwise been entitled and that he has no further claim to any
compensation, severance pay or other benefits from Xxxxxx under any plan, policy, practice or
agreement.
4. Equity Plans: The terms of Executive’s Stock Option Agreements, if any, shall govern the
exercisability and timing of exercising of his stock options. In accordance with those agreements,
all non-vested stock options shall be forfeited, and no further vesting shall occur, following the
Separation Date. Executive may continue to hold shares of stock purchased before the Separation
Date, under the terms and conditions set forth in the applicable Shareholders’ Agreement.
The Company agrees, upon Executive’s request within thirty (30) days after the Effective Date,
to repurchase from Executive, at the current fair market value, shares of common stock owned by
Executive sufficient for Executive to repay in full Executive’s outstanding principal and accrued
interest pursuant to the Promissory Note dated October 24, 2000 between Executive and the Company.
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5. Confidential Information: Executive acknowledges and agrees that in the course of his
employment with Xxxxxx, he has had access to Confidential Information relating to the business
affairs of Xxxxxx and its suppliers and customers. “Confidential Information” means the Company’s
confidential and/or proprietary information and/or trade secrets that cannot be obtained readily by
third parties from outside sources. Confidential Information includes, by way of example only, the
following information regarding customers, employees, suppliers, and the industry not generally
known to the public: technical information concerning products, equipment, services, and processes;
procurement procedures and pricing techniques; the names of and other information concerning
customers, investors, and business affiliates and the Company’s relationship with them; pricing
strategies; positions, plans, and strategies for expansion or acquisitions; budgets; research;
financial and sales data; evaluations, opinions, and interpretations of information and data;
prospective customers’ names and marks; electronic databases; models; specifications; computer
programs; internal business records; contracts benefiting or obligating the Company; bids or
proposals submitted to any third party; technologies and methods; and other such information.
Executive agrees that he will continue to maintain the complete confidentiality of this
Confidential Information and will otherwise comply with all applicable fiduciary duties owed to the
Company in connection with Executive’s position as an officer of the Company. Executive agrees that
at no time after he signs this Agreement will he disclose, use, or otherwise make available to any
person, company and/or other entity, Xxxxxx’x Confidential Information.
a. Unfair Competition Restrictions. Ancillary to the rights provided to Executive following
employment termination as set forth in this Agreement and any addenda or amendments to this
Agreement, the Company’s provision of Confidential Information, specialized training, and goodwill
support to Executive, and Executive’s agreements regarding the use of same, and in order to protect
the value of any equity-based compensation, training, goodwill support and/or the Confidential
Information described above, the Company and Executive agree to the following provisions against
unfair competition:
i. Executive agrees that for a period of twelve (12) months following the Separation
Date (“Restricted Term”), Executive will not, directly or indirectly, for Executive or for
others, anywhere in the United States (the “Restricted Area”) do the following, unless
expressly authorized to do so in writing by the Chief Executive Officer of the Company:
Engage in, or assist any person, entity, or business engaged in, the selling or providing
of products or services that would displace the products or services that (i) the Company
is currently in the business of providing, or was planning to be in the business of
providing, as of the time Executive separated from the Company, and (ii) that Executive had
involvement in or received Confidential Information about in the course of employment.
Executive further understands that the foregoing restrictions may limit his ability to
engage in certain businesses during the Restricted Term, but acknowledges that these
restrictions are necessary to protect the Confidential Information the Company has provided
to Executive.
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ii. A failure to comply with the foregoing restrictions will create a presumption that
Executive is engaging in unfair competition. Executive agrees that this covenant does not
prevent Executive from using and offering the skills that Executive possessed prior to
receiving access to Confidential Information, confidential training, and knowledge from the
Company. This Agreement creates an advance approval process, and nothing herein is
intended, or will be construed as, a general restriction against the pursuit of lawful
employment in violation of any controlling state or federal laws. Executive shall be
permitted to engage in activities that would otherwise be prohibited by this covenant if
such activities are determined in the sole discretion of the Chief Executive Officer of the
Company to be no material threat to the legitimate business interests of the Company.
b. Enforcement of Covenants. Executive acknowledges that a breach of the covenants set
forth above will cause irreparable damage to the Company, for which the Company’s remedy at law
for damages will be inadequate. Therefore, in the event of breach or anticipatory breach of the
covenants set forth in this section by Executive, that the Company shall be entitled to seek
the following particular forms of relief, in addition to remedies otherwise available at law or
equity: (A) injunctions enjoining or restraining such breach or anticipatory breach in any
court of competent jurisdiction; and (B) recovery of all reasonable sums expended and costs,
including reasonable attorney’s fees, incurred by the Company to enforce the covenants set
forth in Paragraph 5.
c. Separability of Covenants. If a court decides that any of the covenants set forth in
Paragraph 5 exceed the time, geographic, or occupational limitations permitted by applicable
laws, the parties agree that such provisions shall be reformed to the maximum time, geographic,
or occupational limitations permitted by applicable laws.
6. Non-Solicitation: Executive also agrees that, for a period starting on the Separation Date
and ending on the first anniversary of that date, he will not, either on his own behalf or jointly
with or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner or
shareholder, or otherwise on behalf of any other person, firm or corporation, directly or
indirectly solicit or attempt to solicit away from the Company any of its officers or employees;
provided, however, that a general advertisement to which an employee of the Company responds shall
not be deemed, standing alone, to result in a breach of this paragraph.
7. Return of Xxxxxx Property: Executive agrees to immediately return all property owned by
Xxxxxx in his possession including, but not limited to, any Company files, documents, drawings,
plans, or photographs; any Xxxxxx credit card (or credit card for which Xxxxxx is the guarantor);
and any badge, personal digital assistant, computer, telephone, pager, fax machine, or printer.
8. Waiver and Release: Executive, for and on behalf of himself and his heirs,
administrators, executors, successors and assigns, hereby releases and forever discharges
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Xxxxxx and its subsidiaries, affiliates and related companies, and the current and former
directors, officers, executives, managers, agents, attorneys, insurers, independent contractors and
employees of Xxxxxx and all its related entities (the “Released Parties”), from any and all claims,
whether direct or indirect, fixed or contingent, now known or unknown, which Executive ever had,
has now, or may claim to have against the Released Parties, by reason of any matter, act, action,
inaction, decision, event or subject existing or occurring as of the time Executive signs this
Agreement.
Executive understands and agrees that by executing this Agreement, he is giving up any and all
actions or causes of action, suits, debts, claims, complaints, or demands of any kind whatsoever
against the Company, in law or in equity, including but not limited to claims under the Age
Discrimination in Employment Act of 1967 and under any other federal, state, or local law or
regulation; as well as claims that this Agreement was procured through fraud or duress.
This Agreement does not waive or release: (i) any rights or claims that arise or commence
after the date he signs this Agreement; (ii) Executive’s right to file a charge or participate in
an investigation or proceeding conducted by the Equal Employment Opportunity Commission (although
any rights to recovery in such a proceeding are governed by this Agreement and specifically by this
Waiver and Release paragraph); (iii) any rights or claims Employee may have for employee benefits
pursuant to the terms of any Company retirement plans, savings plans, or employee welfare benefit
plan providing medical, surgical or hospital benefits; or (iv) any rights or claims Executive may
have for breach of this Agreement.
9. Consideration Period: Executive will have up to twenty-one (21) days from the date he
receives this Agreement to consider it. During this time period, Executive is hereby advised to
seek legal counsel regarding the effect of this Agreement. Changes to this Agreement, whether
material or immaterial, will not restart this time period. Executive may sign and return the
Agreement in less than twenty-one days if he wishes.
10. Right to Rescind: Executive can revoke the Agreement in writing within seven (7)
days after signing it. The revocation must be received by W. Xxxxx Xxxxx, Jr., General Counsel,
Xxxxxx Aircraft Industries, Inc., X.X. Xxx 000000, Xxxxxx, Xxxxx 00000, no later than midnight of
the seventh day.
11. Effective Date: This Agreement will become effective and enforceable eight (8) days
after Executive signs it and returns it to the Company (the “Effective Date”), if not revoked as
provided in Paragraph 10.
12. Effect of Breach: If Executive breaches any provision of this Agreement, Xxxxxx will
have no further obligations under Paragraph 2 of this Agreement. Executive agrees that in the event
he breaches this Agreement, Xxxxxx will be entitled to legal remedies, including but not limited to
repayment of all monies paid to Executive under Paragraph 2 (excluding payment for accrued but
unused vacation), together with the attorneys’ fees and costs incurred to collect these monies.
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13. No Admission of Fault or Liability: The parties agree that this Agreement is not
intended to, and does not, constitute an admission of liability or fault on the part of either
Executive or Xxxxxx.
14. Enforceable Contract/Severability: The parties agree that this Agreement is an
enforceable contract under the laws of the State of Texas. The parties further agree that to the
extent any part of this Agreement is found to be in violation of any law or unenforceable as
written, that part shall be modified to achieve the objective of the parties to the fullest extent
permitted, and the balance of the Agreement shall remain in full force and effect.
15. Entire Agreement: The parties agree that this Agreement constitutes the entire
Agreement between Executive and Xxxxxx regarding its subject matter, unless otherwise explicitly
stated herein. Any modification or addition to this Agreement, to be effective, must be in writing
and signed by Executive and an officer of Xxxxxx.
16. Governing Law: The parties agree that this Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Texas. The parties further agree that any
suit, action or proceeding arising out of or seeking to enforce any provision of this Agreement may
be brought only in a court of competent jurisdiction in Dallas County, Texas, and the parties
hereby consent to the jurisdiction of such courts.
| BY SIGNING THIS AGREEMENT, EXECUTIVE ACKNOWLEGES (i) HE HAS CAREFULLY READ THIS AGREEMENT AND VOLUNTARILY AGREES TO ITS TERMS, (ii) HE UNDERSTANDS THIS AGREEMENT, AND (iii) HE HAS BEEN GIVEN THE OPPORTUNITY TO ASK ANY QUESTIONS ABOUT THIS AGREEMENT. |
IN WITNESS WHEREOF, the parties have executed this Agreement by their signatures below.
| Xxxxxx X. Xxxxxxxx | Xxxxxx Aircraft Industries, Inc. | |||||||||||
| By: | Xxxxxx X. Xxxxxxxx | |||||||||||
/s/ Xxxxxx X. Xxxxxxxx |
/s/ Xxxxxx X. Xxxxxxxx | |||||||||||
| Its: | Vice President, Human Resources | |||||||||||
Dated: |
June 14, 2006 | Dated: | June 14, 2006 | |||||||||
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