Exhibit 10.7
EMPLOYMENT
AGREEMENT
THIS AGREEMENT, dated as of
February 24, 2011, is made by and between TransDigm Group
Incorporated, a Delaware corporation (the “Company”),
and Albert Rodriguez (the “Executive”).
RECITALS:
WHEREAS, the Executive holds the
position of Executive Vice President – Mergers and
Acquisitions of the Company; and
WHEREAS, the parties would like to
enter into an employment agreement on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of
the foregoing and of the respective covenants and agreements set
forth below, the parties hereto agree as follows:
1. Certain Definitions
.
(a) “ Annual Base
Salary ” shall have the meaning set forth in
Section 4(a).
(b) “ Board ”
shall mean the Board of Directors of the Company.
(c) “ Cause ”
shall mean either of the following: (i) the repeated failure
by the Executive, after written notice from the Board,
substantially to perform his material duties and responsibilities
as an officer or employee or director of the Company or any of its
subsidiaries (other than any such failure resulting from incapacity
due to reasonably documented physical or mental illness), or
(ii) any willful misconduct by the Executive that has the
effect of materially injuring the business of the Company or any of
its subsidiaries, including, without limitation, the disclosure of
material secret or confidential information of the Company or any
of its subsidiaries.
(d) “ COBRA ”
shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as may be amended from time to time.
(e) “ Code ”
shall mean the Internal Revenue Code of 1986, as amended. Reference
to a Section of the Code includes all rulings, regulations,
notices, announcements, decisions, orders and other pronouncements
that are issued by the United States Department of the Treasury,
the Internal Revenue Service, or any court of competent
jurisdiction that are lawful and pertinent to the interpretation,
application or effectiveness of such Section.
(f) “ Common Stock
” shall mean the common stock of the Company, $0.01 par value
per share.
(g) “ Company ”
shall have the meaning set forth in the preamble hereto.
(h) “ Compensation
Committee ” shall mean the Compensation Committee of the
Board whose members shall be appointed by the Board from time to
time.
(i) “ Date of
Termination ” shall mean (i) if the
Executive’s employment is terminated by reason of his death,
the date of his death, and (ii) if the Executive’s
employment is terminated pursuant to Sections 5(a)(ii) - (vi), the
date specified in the Notice of Termination.
(j) “ Disability
” shall mean the Executive’s absence from employment
with the Company due to: (i) his inability to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months; or (ii) such
medically determinable physical or mental impairment, which can be
expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, and for
which the Executive is receiving income replacement benefits for a
period of not less than three (3) months under an accident and
health plan covering the Company’s employees.
(k) “ Effective Date
” shall mean the date of this Agreement.
(l) “ Equity Compensation
Agreements ” shall mean any written agreements between
the Company and the Executive pursuant to which the Executive holds
or is granted options to purchase Common Stock, including, without
limitation, agreements evidencing options granted under any option
plan adopted or maintained by the Company for employees generally,
and any management deferred compensation or similar plans of the
Company.
(m) “ Exchange Act
” shall mean the Securities Exchange Act of 1934, as
amended.
(n) “ Executive ”
shall have the meaning set forth in the preamble hereto.
(o) “ Good Reason
” shall mean the occurrence of any of the following:
(i) a material diminution in the Executive’s title,
duties or responsibilities, without his prior written consent, or
(ii) a reduction of the Executive’s aggregate cash
compensation (including bonus opportunities), benefits or
perquisites, without his prior written consent, (iii) the
Company requires the Executive, without his prior written consent,
to be based at any office or location that requires a relocation
greater than 30 miles from Cleveland, Ohio, or (iv) any
material breach of this Agreement by the Company.
(p) “ Notice of
Termination ” shall have the a meaning set forth in
Section 5(b).
(q) “ Payment Period
” shall have the meaning set forth in
Section 6(b)(i).
(r) “ Specified
Employee ” shall have the meaning set forth in Code
Section 409A
(s) “ Term ”
shall have the meaning set forth in Section 2.
2. Employment . The Company
shall employ the Executive, for the period set forth in this
Section 2, in the position(s) set forth in Section 3 and
upon the other terms and conditions herein provided. The term of
employment under this Agreement (the “Term”) shall be
for the period beginning on the Effective Date and ending on
October 1, 2016 unless earlier terminated as provided in
Section 5; provided, however, that unless so earlier
terminated or unless the Executive or the Company shall give
written notice to the other of his or its intention not to renew
this Agreement no less than sixty days prior to the scheduled
expiration thereof, upon October 1, 2016, this Agreement shall
automatically be renewed for an additional two year
period.
3. Position and Duties .
During the Term, the Executive shall serve as Executive Vice
President – Mergers and Acquisitions of each of the Company
and its subsidiary, TransDigm, Inc. (“TransDigm”), with
such customary responsibilities, duties and authority as may from
time to time be assigned to the Executive by the Chief Executive
Officer. During the Term, the Executive shall devote substantially
all his working time and efforts to the business and affairs of the
Company and TransDigm; provided, that it shall not be considered a
violation of the foregoing for the Executive to (i) with the
prior consent of the Board (which consent shall not unreasonably be
withheld), serve on corporate, industry, civic or charitable boards
or committees, and (ii) manage his personal investments, so
long as none of such activities significantly interferes with the
Executive’s duties hereunder.
4. Compensation and Related
Matters .
(a) Annual Base Salary .
During the Term (commencing as of the first pay period following
the date of this Agreement), the Executive shall receive a base
salary at a rate that is no less than $335,000 per annum payable in
accordance with the Company’s normal payroll practices, which
shall be reviewed by the Compensation Committee on or prior to each
anniversary of the Effective Date during the Term and may be
increased, but not decreased, upon such review (the “Annual
Base Salary”).
(b) Bonus . For each fiscal
year during the Term, the Executive shall be eligible to
participate in the Company’s annual cash bonus plan in
accordance with terms and provisions which shall be consistent with
the Company’s executive bonus policy in effect as of the date
hereof. The Executive’s target bonus for calendar year 2011
and thereafter will be 65% of his Annual Base Salary.
(c) Non-Qualified Deferred
Compensation . During the Term, the Executive shall be eligible
to participate in any non-qualified deferred compensation plan or
program (if any) offered by the Company to its
executives.
(d) Long Term Incentive
Compensation . During the Term, the Executive shall be entitled
to participate in the Option Plan or any successor plan
thereto.
(e) Benefits . During the
Term, the Executive shall be entitled to participate in the other
employee benefit plans, programs and arrangements of the Company
now (or, to the extent determined by the Board or Compensation
Committee, hereafter) in effect which are applicable to the senior
officers of the Company generally, subject to and on a basis
consistent with the terms, conditions and overall administration
thereof (including the right of the Company to amend, modify or
terminate such plans).
(f) Expenses . Pursuant to
the Company’s customary policies in force at the time of
payment, the Executive shall be reimbursed for all expenses
properly incurred by the Executive on the Company’s behalf in
the performance of the Executive’s duties
hereunder.
(g) Vacation . The Executive
shall be entitled to an amount of annual vacation days, and to
compensation in respect of earned but unused vacation days in
accordance with the Company’s vacation policy as in effect as
of the Effective Date. The Executive shall also be entitled to paid
holidays in accordance with the Company’s practices with
respect to same as in effect as of the Effective Date.
(h) Automobile . During the
Term, the Company shall provide the Executive with an annual
automobile allowance at a rate determined by the Chief Executive
Officer and generally consistent with allowance currently granted
to the Executive.
(i) Club Membership . During
the Term, the Company shall pay on behalf of the Executive, or
reimburse the Executive for, annual membership fees payable in
connection with the Executive’s membership in one country
club of the Executive’s choice.
5. Termination .
(a) The Executive’s employment
hereunder may be terminated by the Company or the Executive, as
applicable, without any breach of this Agreement only under the
following circumstances and in accordance with subsection
(b):
(i) Death . The
Executive’s employment hereunder shall terminate upon his
death.
(ii) Disability . If the
Company determines in good faith that the Executive has incurred a
Disability, the Company may give the Executive written notice of
its intention to terminate the Executive’s employment. In
such event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
the Executive, provided that within such 30 day period the
Executive shall not have returned to full-time performance of his
duties. The Executive shall continue to receive his Annual Base
Salary until the 90th day following the date of the Notice of
Termination.
(iii) Termination for Cause .
The Company may terminate the Executive’s employment
hereunder for Cause.
(iv) Resignation for Good
Reason . The Executive may terminate his employment hereunder
for Good Reason.
(v) Termination without Cause
. The Company may terminate the Executive’s employment
hereunder without Cause.
(vi) Resignation without Good
Reason . The Executive may resign his employment hereunder
without Good Reason.
(b) Notice of Termination .
Any termination of the Executive’s employment by the Company
or by the Executive under this Section 5 (other than
termination pursuant to subsection (a)(i)) shall be communicated by
a written notice from the Board or the Executive to the other
indicating the specific termination provision in this Agreement
relied upon, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and
specifying a Date of Termination which, except in the case of
Termination by reason of Disability or Termination for Cause
pursuant to Section 5(a)(ii) or 5(a)(iii), respectively, shall
be at least 90 days following the date of such notice (a
“Notice of Termination”). In the event of Termination
for Cause pursuant to Section 5(a)(iii), the Executive shall
have the right, if the basis for such Cause is curable, to cure the
same within 15 days following the Notice of Termination for Cause,
and Cause shall not be deemed to exist if the Executive cures the
event giving rise to Cause within such 15 day period. In the event
of Termination by the Executive for Good Reason pursuant to
Section 5(a)(iv), the
Company shall have the right, if the basis for
such Good Reason is curable, to cure the same within 15 days
following the Notice of Termination for Good Reason, and Good
Reason shall not be deemed to exist if the Company cures the event
giving rise to Good Reason within such 15 day period. The Executive
shall continue to receive his Annual
