Exhibit 10.1
SEVERANCE
AND CHANGE IN CONTROL AGREEMENT
(Effective
from and after July 9, 2008)
This Severance and Change
in Control Agreement (“Agreement”) made and entered
into as of the th day of
,
by and between , a
corporation (“Company”), and
(“Employee”).
WHEREAS, the Company
currently employs Employee as an employee at will in the capacity
of
,
and
WHEREAS, the Company and
Employee desire to enter into an Agreement as herein set forth to
reflect certain mutually agreed changes to the terms and conditions
thereof; and
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 Employee’s employment, Employee
shall:
(a)
well and faithfully serve the
Company and do and perform assigned duties and responsibilities in
the ordinary course of Employee’s 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 Employee’s full
time, energy and skill to the business of the Company and
Employee’s 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 5 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 Employee’s 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 Employee’s 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.
Benefits
.
Employee shall be entitled to
participate, according to the eligibility provisions of each, in
such welfare plans (including but not limited to medical, dental,
life, accident and disability insurance programs), vacation,
retirement plans and other fringe benefits as may be in effect from
time to time and available to other officers of the Company during
Employee’s employment term. Employee shall also be
entitled to participate in such additional executive fringe
benefits as may be authorized from time to time by the
President and Chief
Executive Officer of the Company. Employee shall be eligible
to participate in the Company’s Supplemental Key Employee
Retirement Plan as an executive level participant.
4.
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 Employee’s 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, Employee shall not
take any electronically stored data, documents or other papers
containing or reflecting trade secrets, confidential information,
secret processes, know-how, or computer software programs from
Company. Employee acknowledges that Employee’s
employment hereunder will place Employee in a position of utmost
confidence and that Employee 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
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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 mark registration or otherwise,
including executing specific assignments or such other documents or
taking such further action as may be considered necessary to vest
title in Company or its assignees and obtain patents or copyrights
in any and all countries.
5.
Non-Compete;
Severance .
(a)
Employee agrees that during
Employee’s 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 5(b) or
5(c) below, Employee 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 5 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 7(c)(i) below) for
any reason other than Cause (as defined in 7(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
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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 such payment obligations shall terminate
or lapse immediately upon any breach by Employee of Section 4
or 5(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
Employee’s employment.
(c)
If Employee terminates
Employee’s 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
5(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 «4» 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)
The Employee acknowledges and
agrees that the Company would be irreparably harmed by violations
of Section 4 or Section 5(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.
6.
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
Employee’s 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 Employee available to Company in
person
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