AMENDED AND RESTATED
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
This Amended and Restated Severance and Change in Control
Agreement ("Agreement") made and entered into as of the 8th
day of April, 1997, by and between AAR CORP., a Delaware
corporation ("Company"), and Xxxxxxx X. Xxxxxxxxx
("Employee").
WHEREAS, the Company currently employs Employee as an employee at will in the
capacity of Vice President, Chief Financial Officer & Treasurer; and
WHEREAS, Employee desires the Company to pay Employee certain severance
payments upon a Change in Control of AAR CORP. and upon termination of
employment prior to a Change in Control; and
WHEREAS, the Company is willing to pay Employee severance payments under
certain circumstances if Employee agrees to confidentiality, non-compete and
certain other covenants.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth and
other good and valuable consideration, the parties hereto agree as follows:
1. EMPLOYMENT. Employee will continue employment with the Company as an at
will employee subject to the terms and conditions hereinafter set forth.
2. DUTIES. During the continuation of his employment, Employee shall:
(a) well and faithfully serve the Company and do and perform
assigned duties and responsibilities in the ordinary course of his
employment and the business of the Company (within such limits as the
Company may from time to time prescribe), professionally, faithfully
and diligently.
(b) devote his full time, energy and skill to the business of the
Company and his assigned duties and responsibilities, and to the
promotion of the best interests of the Company; provided that
Employee shall not (to the extent not inconsistent with Section 4
below) be prevented from (a) serving as a director of any corporation
consented to in advance in writing by the Company, (b) engaging in
charitable, religious, civic or other non-profit community
activities, or (c) investing his personal assets in such form or
manner as will not require any substantial services on his part in
the operation or affairs of the business in which such investments
are made or which would detract from or interfere or cause a conflict
of interest with performance of his duties hereunder.
(c) observe all policies and procedures of the Company in effect
from time to time applicable to employees of the Company including,
without limitation, policies with respect to employee loyalty and
prohibited conflicts of interest.
3. CONFIDENTIAL INFORMATION, ASSIGNMENT OF INVENTIONS.
(a) Employee acknowledges that the trade secrets, confidential
information, secret processes and know-how developed and acquired by
AAR CORP. and its affiliates or subsidiaries (together the
"Affiliated Companies") are among their most valuable assets and that
the value of such information may be destroyed by unauthorized
disclosure. All such trade secrets, confidential information, secret
processes and know-how imparted to or learned by Employee in the
course of his employment with respect to the business of the
Affiliated Companies (whether acquired before or after the date
hereof) will be deemed to be confidential and will not be used or
disclosed by Employee, except to the extent necessary to perform his
duties and, in no event, disclosed to anyone outside the employ of
the Affiliated Companies and their authorized consultants and
advisors, unless (i) such information is or has been made generally
available to the public, (ii) disclosure of such information is
required by law in the opinion of Employee's counsel (provided that
written notice thereof is given to Company as soon as possible but
not less than 24 hours prior to such disclosure), or (iii) express
written authorization to use or disclose such information has been
given by the Company. If Employee ceases to be employed by the
Company for any reason, he shall not take with him any electronically
stored data, documents or other papers containing or reflecting trade
secrets, confidential information, secret processes, know-how, or
computer software programs. Employee acknowledges that his
employment hereunder will place him in a position of utmost
confidence and that he will have access to confidential information
concerning the operation of the business of the Affiliated Companies,
including, but not limited to, manufacturing methods, developments,
secret processes, know-how, computer software programs, costs, prices
and pricing methods, sources of supply and customer names and
relations. All such information is in the nature of a trade secret
and is the sole and exclusive property of the Affiliated Companies
and shall be deemed confidential information for the purposes of this
paragraph.
(b) Employee hereby assigns to the Company all rights that Employee
may have as author, designer, inventor or otherwise as creator of any
written or graphic material, design, invention, improvement, or any
other idea or thing whatever that Employee may write, draw, design,
conceive, perfect, or reduce to practice during employment with the
Company or within 120 days after termination of such employment,
whether done during or outside of normal work hours, and whether done
alone or in conjunction with others ("Intellectual Property"),
provided, however, that Employee reserves all rights in anything done
or developed entirely by Employee on Employee's own personal time and
without the use of any Company equipment, supplies, facilities or
information, or the participation of any other Company employee,
unless it relates to the Company's business or reasonably anticipated
business, or grows out of any work performed by Employee for the
Company. Employee will promptly disclose all such Intellectual
Property developed by Employee to the Company, and fully cooperate at
the Company's request and expense in any efforts by the Company or
its assignees to secure protection for such Intellectual Property by
way of domestic or foreign patent, copyright, trademark or service
xxxx registration or otherwise, including executing specific
assignments or such other documents or taking such further action as
may be considered necessary
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to vest title in Company or its assignees and obtain patents or
copyrights in any and all countries.
4. NON-COMPETE; SEVERANCE.
(a) Employee agrees that during his continuation of employment with
the Company and for one (1) year thereafter so long as the Company
makes severance payments to Employee pursuant to subsections 4(b) or
4(c) below, he shall not, without the express written consent of the
Company, either alone or as a consultant to, or partner, employee,
officer, director, or stockholder of any organization, entity or
business, (i) take or convert for Employee's personal gain or benefit
or for the benefit of any third party, any business opportunities
which may be of interest to the Company or any Affiliated Company
which Employee becomes aware of during the term of his employment;
(ii) engage in direct or indirect competition with the Company or any
Affiliated Company within 100 miles of any location within the United
States of America or any other country where the Company or any
Affiliated Company does business from time to time during the term
hereof; (iii) solicit in connection with any activity which is
competitive with any of the businesses of the Company or any
Affiliated Company, any customers of the Company or any Affiliated
Company; (iv) solicit for employment any sales, marketing or
management employee of Company or any Affiliated Company or induce or
attempt to induce any customer or supplier of the Company or any
Affiliated Company to terminate or materially change such
relationship. Company and Employee acknowledge the reasonableness of
the foregoing covenants not to compete and non-solicitation,
including but not limited to the geographic area and duration of time
which are a part hereof, and further, that the restrictions stated in
this Section 4 are reasonably necessary for the protection of
Employer's legitimate proprietary interests. This covenant not to
compete may be enforced with respect to any geographic area in which
the Company or any Affiliated Company does business during the term
hereof. Nothing herein shall prohibit Employee from being the legal
or equitable holder, solely for investment purposes, of less than 5%
of the capital stock of any publicly held corporation which may be in
direct or indirect competition with the Company or any Affiliated
Company.
(b) The Company will pay Employee, upon termination of Employee's
employment by the Company prior to a Change in Control (as defined in
6(c)(i) below) for any reason other than Cause (as defined in
6(c)(iv) below), severance each month for 12 months, in an amount
(subject to applicable withholding) equal to 1/12 of Employee's base
salary; and, further, if the Company pays discretionary bonuses to
its officers for the fiscal year in which Employee's employment is
terminated, Employee will be paid a bonus in a lump sum at the time
any such bonuses are paid to other officers or at such time as the
Severance Period is complete, whichever is later (with interest at
prime rate plus one percentage point from the earlier of such dates),
(1) for the completed fiscal year preceding termination if such bonus
has not been paid prior to termination, and (2) for the fiscal year
in which employment is terminated, prorata for the period prior to
termination of employment based on Employee's performance during such
period; provided, however, that (i) all such monthly payment
obligations shall terminate immediately upon Employee obtaining full
time employment in a comparable position in terms of salary level,
and (ii) all
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such payment obligations shall terminate or lapse immediately upon any
breach by Employee of Section 3 or 4(a) of this Agreement or if
Employee shall commence any action or proceeding in any court or
before any regulatory agency arising out of or in connection with
termination of his employment.
(c) If Employee terminates his employment or Employee's employment
is terminated by the Company for Cause (as defined below), the
Company may elect (but is not required to), by written notice thereof
to Employee, within five (5) days of any such termination of
Employee's employment with the Company prior to a Change in Control
(as defined below), to pay Employee severance as provided in and
subject to the provisions of subsection 4(b) above.
(d) Employee may terminate this Severance and Change in Control
Agreement effective immediately upon notice thereof in writing to
Company at any time while still employed within a sixty (60) calendar
day period immediately following the effective date of any reduction
by Company in (i) Employee's level of responsibility or position from
that held by Employee as Vice President, Chief Financial Officer &
Treasurer on the effective date of this Agreement, or (ii) Employee's
level of compensation, including retirement benefits in effect
immediately prior to any such change.
(e) If at any time, any clause or portion of this Section 4 shall be
deemed invalid or unenforceable by the laws of the jurisdiction in
which it is to be enforced by reason of being vague or unreasonable
as to duration, geographic scope, nature of activities restricted, or
for any other reason, this provision shall be considered divisible as
to such portions and the foregoing restrictions set forth in 4(a)
shall become and be immediately amended to include only such
duration, scope or restriction and such event as shall be deemed
reasonable and enforceable by the court or other body having
jurisdiction to enforce this Agreement; and the parties hereto agree
that the restrictions, as so amended, shall be valid and binding as
though the invalid or unenforceable portion had not been involved
herein.
(f) The Employee acknowledges and agrees that the Company would be
irreparably harmed by violations of Section 3 or Section 4(a) above,
and in recognition thereof, the Company shall be entitled to an
injunction or other decree of specific performance with respect to
any violation thereof (without any bond or other security being
required) in addition to other available legal and equitable
remedies.
5. TERMINATION OF EMPLOYMENT.
(a) Upon and after termination of employment howsoever arising,
Employee shall, upon request by Company:
(1) immediately return to the Company all correspondence,
documents, business calendars/diaries, or other property
belonging to the Company which is in his possession,
(2) immediately resign from any office Employee holds with
the Company or any Affiliated Company; and
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(3) cooperate fully and in good faith with the Company in the
resolution of all matters Employee worked on or was involved
in during Employee's employment with the Company. Employee's
cooperation will include reasonable consultation by telephone.
Further, in connection therewith, Employee will, at Company's
request upon reasonable advance notice and subject to Employee's
availability, make himself available to Company in person at
Company's premises, for testimony in court, or elsewhere;
provided, however, that in such event, Company shall reimburse
all Employee's reasonable expenses and pay Employee a reasonable
per diem or hourly stipend.
6. CHANGE IN CONTROL.
(a) In the event (i) a Change in Control of AAR CORP. occurs and
(ii) (A) at any time during the 24 month period commencing on the
date of the Change in Control the Company terminates Employee's
employment for other than Cause or Disability, or Employee terminates
his employment for Good Reason, in either case by written notice to
the other party (including the particulars thereof), and having given
the other party the opportunity to be heard with respect thereto, or
(B) Employee's employment with the Company terminates for any reason
other than Disability or death during the 30 day period commencing on
the expiration of the aforementioned 24 month period, and (iii)
neither incumbent in the positions of Chief Executive Officer or
Chief Operating Officer of the Company on the effective date hereof
is Chief Executive Officer of the Company at the time of such
termination of employment, then:
(1) The Company shall promptly pay to Employee, in a lump sum (A) all
base salary earned through the date of termination, (B) any cash
bonus earned by Employee for the fiscal year of the Company most
recently ended prior to the date of termination to the extent
unpaid on the date of termination, (C) a prorata portion of the
cash bonus Employee would have earned had he been employed by the
Company on the last day of the fiscal year in which the date of
termination occurs (assuming all performance targets have been
met) that is applicable to the period commencing on the first day
of such fiscal year and ending on the date of termination, and
(D) any and all other benefits and amounts earned by Employee
prior to the date of termination to the extent unpaid, all
subject to applicable withholding.
(2) The Company shall promptly pay to Employee in a lump sum, a cash
payment in an amount equal to three times Employee's total
compensation (base salary plus cash bonus) for either the fiscal
year of the Company most recently ended prior to the date of
termination, or the preceding fiscal year, whichever is the
highest total compensation, or such lesser amount as Employee may
elect to take, subject to applicable withholding. Employee may
elect to take payment of any amounts on a schedule of his own
choosing; provided that such schedule shall be completed no later
than three years from the date of Employee's termination of
employment.
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(3) Employee and his dependents shall continue to be covered by, and
receive benefits, in accordance with the terms of, all of the
Company's medical, dental and life insurance plans for three
years following the date of termination, and at no less than the
levels he and his dependents were receiving immediately prior to
the Change in Control. Employee's dependents shall be entitled
to continued coverage pursuant to the preceding sentence for the
balance of such three year period in the event of Employee's
death during such period. The period during which Employee and
his dependents are entitled to continuation of group health plan
coverage pursuant to Section 4980B of the Internal Revenue Code
of 1986, as amended, and Part 6 of Title I of the Employee
Retirement Income Security Act of 1974, as amended, shall
commence on the date next following the expiration of the
aforementioned three year period.
(4) Employee shall receive an additional retirement benefit, over and
above that which Employee would normally be entitled to under the
Company's retirement plans or programs applicable to Employee,
equal to the actuarial equivalent of the additional amount that
Employee would have earned under such retirement plans or
programs had he accumulated three additional continuous years of
service. Such amount shall be paid to Employee in a cash lump
sum payment at his normal retirement age, as defined in the AAR
CORP. Retirement Plan or any successor plan. Alternatively,
Employee may elect to receive such payment at his early
retirement age, as defined in the AAR CORP. Retirement Plan or
any successor plan, with a corresponding actuarial reduction in
the amount of such payment, based upon the earlier date of
payment.
(5) The Company, at its expense, shall provide Employee with
outplacement services of a nationally recognized outplacement
firm until the earlier of (a) the Employee's attainment of
employment, or (b) the date eighteen (18) months from the date of
Employee's termination of employment; provided, however, that the
cost of such outplacement services shall not exceed 10% of
Employee's annual base salary.
(b) In the event that a Change in Control has occurred, both for
purposes of this Agreement and for purposes of the AAR CORP. Stock
Benefit Plan, as amended ("Plan"), whether or not such Change in
Control has the prior written approval of a majority of the
Continuing Directors (as defined in the Plan), and notwithstanding
any conditions or restrictions contained in any agreement between the
Company and Employee related to any Award granted to Employee under
the Plan, all Options or Limited Rights, or both, granted to Employee
under the Plan will become immediately exercisable, and all
restrictions on Restricted Stock granted to Employee under the Plan
will immediately lapse.
(c) For purposes of this Agreement
(i) "Change in Control" means the earliest of:
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(1) any person (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), has
acquired (other than directly from the Company) beneficial
ownership (as that term is defined in Rule 13d-3 under the
Exchange Act), of more than 20% of the outstanding capital stock
of the Company entitled to vote for the election of directors;
(2) the commencement by an entity, person, or group (other than the
Company or a subsidiary of the Company) of a tender offer or an
exchange offer for more than 20% of the outstanding voting stock
of the Company;
(3) the effective time of (i) a merger or consolidation or other
business combination of the Company with one or more other
corporations as a result of which the holders of the outstanding
voting stock of the Company immediately prior to such business
combination hold less than 60% of the voting stock of the
surviving or resulting corporation, or (ii) a transfer of
substantially all of the assets of the Company other than to an
entity of which the Company owns at least 80% of the voting
stock;
(4) the election over any period of time to the Board of Directors of
the Company without the recommendation or approval of the
incumbent Board of Directors of the Company, of the lesser of (i)
three directors, or (ii) directors constituting a majority of the
number of directors of the Company then in office;
(5) the occurrence of any arrangement or understanding relating to
the Company which would give rise to a filing requirement with
the Securities and Exchange Commission pursuant to Rule 14f-1 of
the Exchange Act Rules under the Securities Exchange Act of 1934.
(ii) "Good Reason" means:
(1) a material reduction in the nature or scope of Employee's duties,
responsibilities, authority, power or functions from those
enjoyed by Employee immediately prior to the Change in Control,
or a material reduction in Employee's compensation (including
benefits), occurring at any time during the two-year period
immediately after the Change in Control; or
(2) a good faith determination by Employee that as the result of a
Change in Control and a material change in employment
circumstances at any time during the immediate two year period
after the Change in Control, he is unable to carry out his
assigned duties and responsibilities in a manner consistent with
the practices, standards, values or philosophy of the Company
immediately prior to the Change in Control; or
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(3) a relocation of the primary place of employment of at least 100
miles.
(iii) "Disability" means:
(1) a physical or mental condition which has prevented Employee from
substantially performing his assigned duties for a period of 180
consecutive days and which is expected to continue to render
Employee unable to substantially perform his duties on a
full-time basis and otherwise meets the benefit eligibility
requirements of the Company's Long Term Disability Welfare
Benefit Plan. The Company will make reasonable accommodation for
any handicap of Employee as may be required by applicable law.
In the event of termination by the Company for Disability after a
Change in Control, a good faith determination of the existence of a
Disability shall be made by resolution of the Compensation Committee
of the Board of Directors of the Company, in its sole discretion,
setting forth the particulars of the Disability which shall be final
and binding upon the Employee. The Company may require the submission
of such medical evidence as to the condition of the Employee as it may
deem necessary in order to arrive at its determination of the
occurrence of a Disability, and Employee will cooperate in providing
any such information. Employee will be provided with reasonable
opportunity to present additional medical evidence as to the medical
condition of Employee for consideration prior to the Board making its
determination of the occurrence of a Disability.
Upon termination of Employment by Company for Disability after a
Change in Control, Employee will receive Disability payments pursuant
to the Company's short and long term Disability welfare benefit plans
then in effect according to the terms of such plans and continue to
be eligible to participate in the Company's medical, dental and life
insurance programs then in effect and available to officers of the
Company in accordance with their terms for a period of 3 years from
the date of such termination of this Agreement.
(iv) "Cause" means:
(1) Employee engages, during the performance of his duties hereunder,
in acts or omissions constituting dishonesty, intentional breach
of fiduciary obligation or intentional wrongdoing or malfeasance;
(2) Employee intentionally disobeys or disregards a lawful and proper
direction of the Board or the Company; or
(3) Employee materially breaches the Agreement and such breach by its
nature, is incapable of being cured, or such breach remains
uncured for more than 10 days following receipt by Employee of
written notice from the Company specifying the nature of the
breach and
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demanding the cure thereof. For purposes of his clause (3), a
material breach of the Agreement that involves inattention by
Employee to his duties under the Agreement shall be deemed a
breach capable of cure.
Without limiting the generality of the foregoing, the following shall
not constitute Cause for the termination of employment of Employee or
the modification or diminution of any of his authority hereunder:
(1) any personal or policy disagreement between Employee and the
Company or any member of the Board; or
(2) any action taken by Employee in connection with his duties
hereunder, or any failure to act, if Employee acted or failed to
act in good faith and in a manner he reasonably believed to be in
and not opposed to the best interest of the Company and he had no
reasonable cause to believe his conduct was unlawful; or
(3) termination of Employee's employment for overall unsatisfactory
performance (including, but not limited to, failure to meet
financial goals).
Termination for Cause shall be limited to a good faith finding by
resolution of the Compensation Committee of the Board, setting forth
the particulars thereof. Any such action shall be taken at a regular
or specially called meeting of the Compensation Committee of the
Board, after a minimum 10 days notice thereof to Employee, with
termination of Employee's employment with the Company for Cause listed
as an agenda item. Employee will be given a reasonable opportunity to
be heard at such meeting with counsel present if Employee desires.
Any such resolution shall be final and binding.
Upon termination of employment by Company for Cause, no further
compensation or benefits shall accrue or be payable to Employee by the
Company, except for any compensation, bonus or other benefits which
have accrued to Employee prior to the date of any such termination.
Nothing herein shall be construed to prevent the Company from
terminating Employee's employment at any time for any reason or for no
reason.
(d) The Company will pay reasonable legal/attorney's fees incurred by
Employee in connection with enforcement of any right or benefit under
this Section 6.
7. CHANGES IN BUSINESS. The Company, acting through its Board of Directors,
will at all times have complete control over the Company's business and
retirement and other employee health and welfare benefit plans ("Plans").
Without limiting the generality of the foregoing, the Company may at any
time or times change or discontinue any or all of its present or future
operations or Plans (subject to their terms), may close or move any one
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or more of its divisions or offices, may undertake any new servicing or
sales operation, may sell any one or more of its divisions or offices to
any company not controlled, directly or indirectly, by the Company or may
take any and all other steps which its Board of Directors, in its exclusive
judgment, shall deem desirable, and Employee shall have no claim or
recourse against the Company, its officers, directors or employees by
reason of such action except for enforcement of the provisions of Sections
4 and 6 of this Agreement.
8. SEVERANCE PAYMENT AS SOLE OBLIGATION. Except as expressly provided in
Sections 4 and 6 above, no further compensation, payments, liabilities or
benefits shall accrue or be payable to Employee upon or as a result of
termination of Employee's employment for any reason whatsoever except for
any compensation, bonus or other benefits which accrued to Employee prior
to the date of employment termination.
The amounts paid to the Employee under Section 4 and 6 of this Agreement
shall be considered severance pay in consideration of past services
Employee has rendered to the Company and in consideration of Employee's
continued service from the date hereof to entitlement to those payments.
9. NOTICES. Any notice or other instrument or thing required or permitted to
be given, served or delivered to any of the parties hereto shall be
delivered personally or deposited in the United States mail, with proper
postage prepaid, telegram, teletype, cable or facsimile transmission to the
addresses listed below:
(a) If to the Company, to:
AAR CORP.
0000 X. Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: Chairman
With a copy to:
AAR CORP.
0000 X. Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) If to Employee, to:
Xxxxxxx X. Xxxxxxxxx
0000 X. Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or to such other address as either party may from time to time designate
by notice to the other. Each notice shall be effective when such notice
and any required copy are delivered to the applicable address.
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10. NON-ASSIGNMENT.
(a) The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Employee,
and any attempted unpermitted assignment shall be null and void and
without further effect; provided, however, that, upon the sale or
transfer of all or substantially all of the assets of the Company, or
upon the merger by the Company into or the combination with another
corporation or other business entity, or upon the liquidation or
dissolution of the Company, this Agreement will inure to the benefit
of and be binding upon the person, firm or corporation purchasing
such assets, or the corporation surviving such merger or
consolidation, or the shareholder effecting such liquidation or
dissolution, as the case may be. After any such transaction, the
term Company in this Agreement shall refer to the entity which
conducts the business now conducted by the Company. The provisions
of this Agreement shall be binding upon and inure to the benefit of
the estate and beneficiaries of Employee and upon and to the benefit
of the permitted successors and assigns of the parties hereto.
(b) The Employee agrees on behalf of himself, his heirs, executors
and administrators, and any other person or person claiming any
benefit under him by virtue of this Agreement, that this Agreement
and all rights, interests and benefits hereunder shall not be
assigned, transferred, pledged or hypothecated in any way by the
Employee or by any beneficiary, heir, executor, administrator or
other person claiming under the Employee by virtue of this Agreement
and shall not be subject to execution, attachment or similar process.
Any attempted assigned, transfer, pledge or hypothecation or any
other disposition of this Agreement or of such rights, interests and
benefits contrary to the foregoing provisions or the levy or any
execution, attachment or similar process thereon shall be null and
void and without further effect.
11. SEVERABILITY. If any term, clause or provision contained herein is
declared or held invalid by any court of competent jurisdiction, such
declaration or holding shall not affect the validity of any other term,
clause or provision herein contained.
12. CONSTRUCTION. Careful scrutiny has been given to this Agreement by the
Company, Employee, and their respective legal counsel. Accordingly, the
rule of construction that the ambiguities of the contract shall be
resolved against the party which caused the contract to be drafted shall
have no application in the construction or interpretation of this
Agreement or any clause or provision hereof.
13. ENTIRE AGREEMENT. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties and supersede all
prior agreements, arrangements and communications, whether oral or
written, pertaining to the subject matter hereof.
14. WAIVER. No provision of this Agreement may be amended, modified, waived
or discharged unless such amendment, modification, waiver or discharge is
agreed to in writing signed by Employee and an authorized officer of the
Company. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a
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waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.
15. GOVERNING LAW. The validity, interpretation, construction and performance
of this Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois without regard to its conflicts of law
principles.
16. EXECUTION. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and which shall constitute but one
and the same Agreement.
WITNESS the due execution of this Agreement by the parties hereto as of the day
and year first above written.
Employer:
AAR CORP.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Title: President
Employee:
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
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ATTACHMENT 2
OUTLINE OF TERMS OF
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
EMPLOYMENT:
- Continuation of at-will employment relationship.
DUTIES:
- Obligation of loyalty and commitment to perform assigned duties
professionally, faithfully and diligently on a full time basis and observe
all Company policies.
CONFIDENTIAL INFORMATION:
- Employee agrees to treat Company information (and that of Affiliated
Companies) in a confidential manner and not to disclose such to third
parties without authorization.
ASSIGNMENT OF INVENTIONS:
- Employee agrees to disclose and assign intellectual property rights
(inventions and copyrightable material conceived, made or written during
the term of employment to Company.
NON-COMPETE COVENANT:
- Employee agrees not to compete with Company (or Affiliated Companies) or
solicit employees during employment and for a period of 12 months
thereafter so long as the Company is not in default of its obligation to
pay severance to Employee or is excused from doing so due to Employee's
breach of the confidentiality/non-compete covenants of the Agreement or
the commencement of any action by Employee against Company for termination
of employment.
TERMINATION OF EMPLOYMENT/SEVERANCE:
- If Employee's employment is terminated by Company for any reason other
than Cause prior to a Change in Control of AAR CORP., Company will pay 12
months severance to Employee; the covenant not to compete will not be
enforceable if Company is in default of its obligation to pay severance.
- No severance is payable in the event Employee breaches the non-compete
covenants or commences any legal proceeding against the Company for
termination of employment.
TERMINATION OF AGREEMENT:
- Employee may terminate the Agreement upon notice in writing to Company
within sixty (60) days after any reduction in employee's level of
responsibility or position from that held
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on the effective date which adversely affects employee's level of
compensation, including retirement benefits.
CHANGE IN CONTROL:
- In the event of (1) a Change in Control (as defined in the Agreement) and
(2) termination of employment within 2 years thereafter by Company for
other than Cause or Disability (as defined in the Agreement), or Employee
terminates employment for Good Reason (as defined in the Agreement), and
(3) neither the CEO nor COO in office on the effective date are CEO at the
time of such termination of employment, the Company will
- pay Employee three (3) years severance
- continue medical, dental and life insurance for three (3) years
- provide a supplemental retirement benefit which is based on
three additional years of credited service
CHANGES IN COMPANY'S BUSINESS OR RETIREMENT/HEALTH & WELFARE PLANS:
- Company reserves right to manage/change/terminate its businesses and
retirement and employee health and welfare plans.
THIS IS AN OUTLINE OF TERMS ONLY. PLEASE REFER TO AGREEMENT FOR ACTUAL TERMS
AND CONDITIONS WHICH SHALL BE CONTROLLING
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