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”).
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