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EXHIBIT 10.1.1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective January 31, 1998 (the
"Agreement") by and between AMERICAN AIRCARRIERS SUPPORT, INC., a South
Carolina corporation (the "Company"), with principal offices located at 0000
Xxxxxx Xxxxxx Xxxxx, Xxxx Xxxx, Xxxxx Xxxxxxxx 00000 and XXXX X. XXXXX (the
"Executive").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Executive and
the Executive agrees to serve the Company as its Chief Executive Officer and
President.
2. Position and Responsibilities. The Executive shall exert his
best efforts and devote full time and attention to the affairs of the Company.
The Executive shall be in charge of formulating general policy and direction of
the Company, including strategic inventory and engine purchases and sales, and
developing, negotiating and concluding acquisitions, and shall have full
authority and responsibility with respect thereto, subject to the general
direction, approval and control of the Board of Directors and to the
restrictions, limitations and guidelines set forth by the Board of Directors in
resolutions adopted in the minutes of the Board of Directors meetings, copies
of which will be provided to the Executive from time to time and will be
incorporated herein by reference. His powers shall include the authority to
hire and fire personnel of the Company except for members of the Board of
Directors and to retain consultants when he deems necessary in order to
implement Company policies.
3. Board of Directors. The Executive shall at all times
discharge his duties in consultation with and under the supervision of the
Board of Directors of the Corporation. In the
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performance of his duties the Executive shall make his principal office at the
corporate headquarters of the Company in Fort Mill, South Carolina.
4. Term of Employment. The term of the Executive's employment
under this Agreement shall be deemed to have commenced on January 1, 1998 and
shall continue for a three-year period until December 31, 2000, subject to
extension as hereinafter provided or termination pursuant to the provisions set
forth in Paragraph 15 hereafter. Provided that Executive is in compliance with
all of his obligations hereunder, the term of Executive's employment shall be
extended for one additional year at the end of each year of the term or
extended term of this Agreement. For example, if Executive is in compliance
with all of his obligations hereunder on January 1, 1999, the term shall be
extended until December 31, 2001, on January 1, 2000, the term shall be
extended until December 31, 2002, and so on.
5. Duties. During the period of his employment hereunder and
except for illness, specified vacation periods and reasonable leaves of
absence, the Executive shall devote his best efforts and full, attention and
skill to the business and affairs of the Company, as such business and affairs
now exist and as they may be hereinafter changed or added to, under and
pursuant to the general direction of the Board of Directors of the Company.
6. Compensation. Commencing on January 1, 1998, the Company
shall pay to the Executive as compensation for his services the sum of $200,000
per year, payable bi-weekly, or such higher salary as may be from time to time
approved by the Board of Directors. In addition, the Executive shall receive
such additional compensation and/or bonuses or stock options as may be voted to
him at the sole discretion of the Board of Directors.
7. Expense Reimbursement. The Company will reimburse the
Executive, at least monthly, for all reasonable and necessary expenses incurred
by him in carrying out his duties under
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this Agreement. The Executive shall present to the Chief Financial Officer or
Controller each month an itemized account of such expenses in such form as is
reasonably required by the Board of Directors. Such expenses shall include
attorneys' fees and disbursements of Executive in connection with any legal
proceedings (including, but not limited to, arbitration), whether or not
instituted by the Company or Executive, relating to the interpretation or
enforcement of any provision of this Agreement; provided, however, that in the
case of any such proceeding to which the Company and the Executive are adverse
parties, the losing party shall reimburse the prevailing party for all costs
and expenses, including attorneys' fees and disbursements, incurred by the
prevailing party in defense or prosecution of any such proceeding. Prior to
advancing costs and expenses to Executive, the Board of Directors shall have
the right to obtain an agreement, and to require acceptable security therefor,
from Executive requiring him to repay Company for the same should it be
determined that Executive is not entitled to payment of such costs and
expenses.
8. Medical and Dental Coverage. The Executive, his wife, and
those children who qualify will be entitled to participate in the Company's
employee group medical and other group insurance programs on the same basis as
other executives of the Company.
9. Medical Examination. The Executive agrees to submit himself
for physical examination on one occasion per year as requested by the Company
for the purpose of the Company's obtaining life insurance on the life of the
Executive for the benefit of the Company; provided, however, that the Company
shall bear the entire cost of such examinations and shall pay all premiums on
any key man life insurance obtained for the benefit of the Company as
beneficiary.
10. Life Insurance Premiums. If the Executive qualifies for
coverage, the Company agrees to reimburse the Executive up to $10,000 per year
for life insurance premiums which the Executive may pay as premiums on any
policy of life insurance he may purchase for the benefit of his designated
beneficiary or beneficiaries.
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11. Automobile or Automobile Allowance. The Company will provide
the Executive with an automobile or with an automobile allowance in the amount
of $10,000 per year for the duration of his employment with the Company under
this Agreement. The Company shall also provide insurance on such automobile or
will include a reimbursement for insurance in the automobile allowance.
12. Vacation Time. The Executive shall be entitled to take six
(6) weeks paid vacation per calendar year. Such vacation may not be taken in
any greater than consecutive two (2) week increments. Vacation not used by the
Executive during the calendar year will be carried forward up to a maximum of
twelve (12) weeks accrual going forward.
13. Benefits Payable on Disability. If the Executive becomes
disabled from properly performing services hereunder by reason of illness or
other physical or mental incapacity, the Company shall continue to pay the
Executive his then current salary hereunder for the first twelve (12) months of
such continuous disability commencing with the first date of such disability.
If the Executive qualifies for coverage, during the term of this
Agreement, the Company shall purchase and maintain a policy of Disability
Insurance which, after twelve (12) continuous months of disability, will pay up
to $12,000 per month of the Executive's salary until Executive reaches the age
of 65. After the first twelve (12) months of disability, the Company has no
obligation to supplement or augment disability payments made under any such
disability policy or plan or make any other payment in connection with such
disability.
If the Company is unable to obtain a policy of Disability Insurance,
the Company shall pay $10,000 per month to the Executive for a twelve (12)
month period from the twelfth to the twenty-fourth month from the first date of
such disability.
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14. Obligations of Executive During and After Employment.
(a) The Executive agrees that during the terms of his
employment under this Agreement, he will engage in no other business
activities directly or indirectly, which are competitive with or which
might place him in a competing position to that of the Company, or any
affiliated company.
(b) The Executive realizes that during the course of his
employment, Executive will have produced and/or have access to
confidential business plans, information, business opportunity
records, notebooks, data, formula, specifications, trade secrets,
customer lists, account lists and secret inventions and processes of
the Company. Therefore, during or subsequent to his employment by the
Company, the Executive agrees to hold in confidence and not to
directly or indirectly disclose or use or copy or make lists of any
such information, except to the extent authorized by the Company in
writing. All records, files, business plans, documents, equipment and
the like, or copies thereof, relating to Company's business which
Executive shall prepare, or use, or come into contact with, shall
remain the sole property of the Company and shall not be removed from
the Company's premises without its written consent, and shall be
promptly returned to the Company upon termination of employment with
the Company. The restrictions and obligations of Executive set forth
in this Section 14(b) shall not apply to (i) information that is or
becomes generally available and known to the aircraft spare parts
industry (other than as a result of a disclosure directly or
indirectly by Executive); or (ii) information that was known to
Executive prior to Executive's employment by the Company.
(c) Because of his employment by the Company, Executive
will have access to trade secrets and confidential information about
the Company, its business plans, its business accounts, its business
opportunities, its expansion plans and its methods of doing business.
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Executive agrees that for a period of one (1) year after termination
of his employment (except if such termination is as a result of
termination by Executive with cause under Section 17), he will not,
directly or indirectly, compete with the Company in the business of
redistributing aircraft spare parts to businesses doing business with
the Company at the date of termination hereof or within 500 miles of
offices operated by the Company or its agents on the date of
termination. This non-compete agreement shall be void and of no
further force or effect in the event termination occurs pursuant to a
Triggering Event as described in Paragraph 19 hereof and the Company
fails to pay the Executive the amounts required under Paragraphs 19,
or if the Company fails to pay the Executive amounts due pursuant to
Paragraph 17.
(d) In the event this Agreement is terminated by the
Executive without cause pursuant to Paragraph 16 or by the Company
pursuant to a Triggering Event (hereinafter defined), then the
Executive shall have the right to terminate the non-compete agreement
set forth in this Paragraph 14 by releasing the Company from its
obligation to pay the Executive any severance compensation or other
form of compensation otherwise payable hereunder. The Executive shall
make such election within 30 days of termination without cause by the
Company or upon the occurrence of a Triggering Event (hereinafter
defined). The Executive's obligations under the non- compete
agreement and the Company's obligation to pay severance compensation
shall terminate as of the effective date of the notice described above
if the Executive, in his sole discretion, provides the Company such
notice.
(e) In the event a court of competent jurisdiction finds
any provision of this Section 14 to be so overbroad as to be
unenforceable, then such provision shall be reduced in scope by the
court, but only to the extent deemed necessary by the court to render
the provision reasonable and enforceable, it being the Executive's
intention to provide the Company with the broadest protection possible
against harmful competition.
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15. Termination for Cause by the Company. During the term of this
Agreement there can be no termination of the Executive by the Company except
for "Termination for Cause" as outlined below:
(1) Notwithstanding anything herein to the
contrary the Company may, without liability, terminate the
Executive's employment hereunder for cause at any time upon
written notice from the Board of Directors specifying such
cause, and thereafter the Company's obligations hereunder
shall cease and terminate; provided, however, that the Company
shall pay the Executive two (2) weeks pay and that such
written notice shall not be delivered until after the Board of
Directors shall have given the Executive written notice
specifying the conduct alleged to have constituted such cause
and the Executive has failed to cure such conduct, if curable,
within thirty (30) days following receipt of such notice.
Grounds for termination "for cause" include but are not limited to one
or more of the following:
i) A willful breach of duty by the Executive
during the course of his employment;
ii) Habitual neglect of duty by the Executive;
iii) The Executive's material failure to perform
and/or meet objective and measurable financial standards set
by the Board of Directors and agreed upon by the Executive in
advance;
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iv) Action or inaction by the Executive which
places the Company in circumstances of financial peril; and
v) Disloyal, dishonest or illegal conduct of the
Executive.
16. Termination by the Executive without Cause. The Executive,
without cause, may terminate this Agreement upon 90 days' written notice to the
Company. In such event, the Executive shall be required to render the services
required under this Agreement during such 90-day period unless otherwise
directed by the Board of Directors. Compensation for vacation time not taken
by Executive shall be paid to the Executive at the date of termination.
17. Termination by the Executive with Cause. The Executive may
terminate his employment with the Company at any time, upon 30 days' written
notice and opportunity for the Company to remedy any non-compliance, by reason
of (i) the Company's material failure to perform its duties pursuant to this
Agreement, (ii) any material diminishment in the duties and responsibilities,
working facilities, or compensation as described in Paragraphs 2, 5 and 6 of
this Agreement, or (iii) Executive's location of employment is moved more than
40 miles from where it is on the date of this Agreement; provided that such
termination takes place within 90 days after receipt by Executive of written
notice of such relocation. In the event of termination of this Agreement by
the Executive for cause, the Executive shall be entitled to all base salary
specified herein for the remaining term of this Agreement.
18. Termination upon Death of Executive. In addition to any other
provision relating to termination, this Agreement shall terminate upon the
Executive's death. No severance allowance shall be paid to the Executive's
estate.
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19. Lump Sum Compensation. In the event of the occurrence of a
"Triggering Event" which shall be defined to include a (i) change in ownership
in one or a series of transactions of 50% or more of the outstanding shares of
the Company, or (ii) merger, consolidation, reorganization or liquidation of
the Company, and following such Triggering Event the Executive's services are
terminated by the Company or the Executive or the Executive's duties, authority
or responsibilities are substantially diminished, the Executive shall receive
lump sum compensation equal to 2.9 times his annual salary and incentive or
bonus payments, if any, as shall have been paid to the Executive during the
Company's most recent 12-month period within 30 days of the Triggering Event.
If the total amount of the change of control compensation were to exceed three
(3) times the Executive's base amount (the average annual taxable compensation
of the Executive for the five (5) years preceding the year in which the change
of control occurs), the Company and the Executive may agree to reduce the lump
sum compensation to be received by Executive in order to avoid the imposition
of the golden parachute tax as provided in the Tax Reform Act of 1984, as
amended by the Tax Reform Act of 1986.
In the event the Executive is required to hire counsel to negotiate on
his behalf in connection with his termination or resignation from the Company
upon the occurrence of a Triggering Event, or in order to enforce the rights
and obligations of the Company as provided in this Paragraph, the Company shall
reimburse to the Executive all reasonable attorneys' fees which may be expended
by the Executive in seeking to enforce the terms hereof. Such reimbursement
shall be paid every 30 days after the Executive provides copies of invoices
from the Executive's counsel to the Company. However, such invoices may be
redacted to preserve the attorney-client privilege, client confidentiality or
work product.
20. Arbitration. Any controversy, dispute or claim arising out
of, or relating to, this Agreement and/or its interpretation shall, unless
resolved by agreement of the parties, be settled by binding arbitration in
Columbia, South Carolina in accordance with the Rules of the American
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Arbitration Association then existing. This Agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration law of the State of
South Carolina. The award rendered by the arbitrators shall be final and
judgment may be entered upon the award in any court of the State of South
Carolina having jurisdiction of the matter.
21. General Provisions.
(a) The Executive's rights and obligations under this
Agreement shall not be transferrable by assignment or otherwise, nor
shall Executive's rights be subject to encumbrance or to the claims of
the Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its property or assets.
(b) This Agreement and the rights of Executive with
respect to the benefits of employment referred to in Paragraphs 6, 7,
8, 9, 10, 11, 12 and 13 constitute the entire Agreement between the
parties hereto in respect of the employment of the Executive by the
Company and supersede any and all other agreements either oral or in
writing between the parties hereto with respect to the employment of
the Executive.
(c) Executive shall have no duty to mitigate the payment
due him from Company pursuant to this Agreement and any money earned
by Executive from other sources after his employment with the Company
terminates shall not reduce the amount owed him by the Company
pursuant to this Agreement.
(d) The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part thereof are
declared invalid or unenforceable by a court of
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competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts thereof and the applicability
thereof shall not be affected thereby.
(e) This Agreement may not be amended or modified except
by a written instrument executed by Company and Executive.
(f) This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the
laws of the State of South Carolina.
22. Construction. Throughout this Agreement the singular shall
include the plural, and the plural shall include the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
23. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
24. Authority. The officer executing this agreement on behalf of
the Company has been empowered and directed to do so by the Board of Directors
of the Company.
25. Change of Domicile. This Agreement shall, without further
action by the Company or the Executive, be assumed and shall become an
obligation of American Aircarriers Support, Incorporated, a Delaware
corporation, upon the reincorporation of American Aircarriers Support, Inc., a
South Carolina corporation, into the State of Delaware.
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FOR THE COMPANY: AMERICAN AIRCARRIERS SUPPORT, INC.
DATED: March 5, 1998 By: /s/ XXXX X. XXXXX
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Title: President
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FOR THE EXECUTIVE:
DATED: March 5, 1998 By: /s/ XXXX X. XXXXX
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Xxxx X. Xxxxx
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