This Employment
Agreement (the “ Agreement ”) dated as of
February 4, 2009 (the “ Effective Date ”),
is made by and between Vought Aircraft Industries, Inc. , a
Delaware corporation, (together with any successor thereto, the
“ Company ”) and Mark Jolly (the “
Employee ”).
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A.
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It
is the desire of the Company to assure itself of the services of
the Employee by entering into this Agreement.
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B.
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The
Employee and the Company mutually desire that the Employee provide
services to the Company on the terms herein provided.
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NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as
follows:
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(a)
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General . The Company shall employ the
Employee and the Employee shall enter the employ of the Company,
for the period set forth in Section 1(b) , in the
position set forth in Section 1(c) , and upon the other
terms and conditions herein provided.
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(b)
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Employment Term
. The initial term of
employment under this Agreement (the “ Initial Term
”) shall be for the period beginning on February 4 ,
2009 and ending at the end of the day on February 4 , 2010,
unless earlier terminated as provided in Section 3 .
The employment term hereunder shall automatically be extended for
successive one-year periods (“ Extension Terms ”
and, collectively with the Initial Term, the “ Term
”) unless either party gives notice of non-extension to the
other no later than ninety (90) days prior to the expiration
of the then-applicable Term and subject to earlier termination as
provided in Section 3 .
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(c)
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Position and Duties
. The Employee shall
serve as the Corporate Controller of the Company with such
customary responsibilities, duties, and authority as may from time
to time be assigned to the Employee by the Chief Financial Officer
of the Company or his designee. The Employee shall devote
substantially all his working time and efforts to the business and
affairs of the Company (which may include service to its
Affiliates). The Employee agrees to observe and comply with the
rules and policies of the Company as adopted by the Company from
time to time. During the Term, it shall not be a violation of this
Agreement for the Employee to (i) serve on industry trade,
civic or charitable boards or committees; (ii) deliver
lectures or fulfill speaking engagements; (iii) manage his
personal investments and affairs; and (iv) serve on the board
of directors of for-profit enterprises with the Chief Financial
Officer’s prior consent, as long as such activities do not
materially interfere with the performance of the Employee’s
duties and responsibilities as an employee of the Company. During
his employment and following termination of his employment with the
Company, (x) the Employee agrees not to disparage in any
material respect the Company, any of its products or practices, or
any of its directors, officers, agents, representatives,
stockholders or Affiliates, either orally or in writing, and
(y) the Company agrees to disclose only mutually-agreed
information regarding Employee’s employment.
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2.
Compensation and Related Matters.
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(a)
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Annual Base Salary
. During the Term, the
Employee shall receive a base salary at a rate of $200,044.00 per
annum (the “ Annual Base Salary ”), which shall
be paid in accordance with the customary payroll practices of the
Company, subject to adjustment as determined by the Company based
upon periodic formal merit/performance review and goal-setting
processes.
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(b)
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Annual Bonus . During the Term, the Employee will
be eligible to receive annual bonuses based upon achieving annual
financial plan, individual goals, and organization metrics to be
determined by the Board of Directors of the Company, with a target
bonus of 35% of Annual Base Salary for calendar year 2009, prorated
for actual service. Future bonus targets shall be subject to
adjustment as determined by the Board. The Employee is eligible to
receive a guaranteed minimum payment of $75,000 under the 2009
management incentive compensation plan. Any annual bonus that
becomes payable pursuant to this Section 2(b) shall be paid no
later than March 15 th of the year following the year in
which such annual bonus is earned. Provided, however, that if the
Board shall determine that it is administratively impracticable,
which may include inability of the Company to gain certification of
its financial statements, to make such annual bonus payment by
March 15 th , any such payment shall be made as
soon as reasonably practicable after such period and in no event
later than December 31 st of the year following the year for
which such annual bonus was earned.
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(c)
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Relocation Benefits
. The Employee will
receive relocation benefits as described in the attached document
entitled “Relocation Benefit Summary — Plan 2.”
During relocation, the Employee will be provided with local
temporary housing and return trips to the Employee’s previous
home as needed.
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(d)
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Incentive Award Plan
. The Employee will be
granted an incentive award of 2,500 Restricted Stock Units (RSUs)
under the Company’s Incentive Award Plan. The awards will be
subject to vesting based upon the achievement of predefined Company
performance metrics, and shall be subject to such other terms and
conditions as are set forth in the agreements governing such
awards.
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(e)
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Benefits . During the Term, the Employee
shall be entitled to participate in applicable employee benefit
plans, programs and arrangements of the Company, as may be amended
from time to time, that are made available to eligible employees of
the Company.
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(f)
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Vacation . During the Term, the Employee
shall be entitled to participate in the Company’s vacation
policy as follows: (i) upon commencement of employment, the
Employee will be credited with one hundred twenty (120) hours
of vacation time, and (ii) following his one-year anniversary
date, the Employee will begin to accrue additional vacation time at
the rate applicable to employees with fifteen or more years of
service (currently 120 hours annually). Any vacation shall be taken
at the reasonable and mutual convenience of the Company and the
Employee.
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2
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(g)
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Expenses . During the Term, the Company shall
reimburse the Employee for all reasonable travel and other business
expenses incurred by him in the performance of his duties to the
Company in accordance with the Company’s expense
reimbursement policy. To the extent that any reimbursements,
including without limitation any reimbursements pursuant to Section
2(c) above and/or pursuant to this Section 2(g), are
determined to constitute taxable compensation to the Employee, then
reimbursement requests with respect to such expenses must be timely
submitted by the Employee and, if timely submitted, such expenses
shall be reimbursed no later than December 31
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of the year following
the year in which the expense was incurred. In no event shall the
Employee be entitled to receive any such reimbursement payments
after December 31 st of the year following the year in
which the expense was incurred. The amount of any such expenses
reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, except for the reimbursement
of medical expenses referred to in Section 105(b) of the Internal
Revenue Code of 1986, as amended (the “ Code ”),
and the Employee’s right to reimbursement of any such
expenses shall not be subject to liquidation or exchange for any
other benefit.
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(h)
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Indemnification
. The Employee shall be
indemnified and held harmless by the Company to the fullest extent
authorized by the Company’s certificate of incorporation or
bylaws against all costs, expenses, liabilities and losses
reasonably incurred or suffered by the Employee with respect to any
bona fide claim against the Employee or the Company, where such
claim is based on actions taken by the Employee in good faith and
in his capacity as an officer of the Company. Notwithstanding the
foregoing, no amounts shall be paid or advanced in accordance with
this Section 2(h) to the extent that any such amounts would fail to
be exempt from the application of Section 409A (as defined
below) in accordance with Treasury
Regulation 1.409A-1(b)(10).
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The
Employee’s employment hereunder may be terminated by the
Company or the Employee, as applicable, without any breach of this
Agreement only under the following circumstances:
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(i)
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Termination for Cause
. The Company may
terminate the Employee’s employment for Cause.
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(ii)
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Termination without Cause
. The Company may
terminate the Employee’s employment without Cause.
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(iii)
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Non-extension of Term by the
Company . The
Company may give notice of non-extension to the Employee pursuant
to
Section 1(b) .
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(iv)
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Non-extension of Term by the
Employee. The
Employee may give notice of non-extension to the Company pursuant
to
Section 1(b) .
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(v)
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Resignation for Good
Reason . The
Employee may resign his employment for Good Reason.
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(vi)
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Resignation without Good
Reason . The
Employee may resign his employment without Good Reason.
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3
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(b)
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Notice of Termination
. Any termination of the
Employee’s employment by the Company or by the Employee under
this Section 3 shall be communicated by a written
notice to the other party hereto 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 Employee’s employment under
the provision so indicated, and specifying a Date of Termination
which, for terminations under paragraphs (a) (ii) or (vi),
shall be at least sixty (60) days following the date of such
notice (a “ Notice of Termination ”); provided,
however, that the Company may, in its sole discretion, advance the
Date of Termination to any date following the Company’s
receipt of the Notice of Termination. A Notice of Termination
(except pursuant to paragraph (a) (ii)) submitted by the Company
may provide for a Date of Termination on the date the Employee
receives the Notice of Termination, or any date thereafter elected
by the Company in its sole discretion. The failure by the Employee
or the Company to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Cause or Good
Reason shall not waive any right of the Employee or the Company
hereunder or preclude the Employee or the Company from asserting
such fact or circumstance in enforcing the Employee’s or the
Company’s rights hereunder.
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(c)
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Company obligations upon
termination . Upon termination of the
Employee’s employment, the Employee shall be entitled to
receive the sum of the Employee’s Annual Base Salary through
the Date of Termination not theretofore paid; any expenses owed to
the Employee under Section 2(g) , any accrued vacation
pay owed to the Employee pursuant to Section 2(f) , and
any amount accrued and arising from the Employee’s
participation in, or benefits accrued under any employee benefit
plans, programs or arrangements under Section 2(e) ,
which amounts, if any, shall be payable in accordance with the
terms and conditions of such employee benefit plans, programs or
arrangements, and such other or additional benefits as may be, or
become, due to him under the applicable terms of applicable plans,
programs, agreements, corporate governance documents and other
arrangements of the Company and its subsidiaries (collectively, the
“ Company Arrangements ”). The Employee shall
not be entitled to any other payments or benefits, except as
specifically provided in Section 4.
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(a)
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Termination for Cause, Resignation
by Employee Without Good Reason, or upon Non-extension of Term by
the Company or the Employee . If the Employee’s
employment shall be terminated by Company pursuant to
Section 3(a)(i) for Cause, or by Employee pursuant to
Section 3(a)(vi) without Good Reason, or pursuant to
Sections 3(a)(iii) or 3(a)(iv) due to Non-extension of
the Term by the Company or the Employee, the Employee shall not be
entitled to any additional severance payment or severance benefits
under this Agreement or under any other Company plan, policy, or
arrangement.
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4
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(b)
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Termination without Cause by Company
or with Good Reason by Employee . If, during the Term, the Employee
incurs a “separation from service” from the Company
(within the meaning of Section 409A(a)(2)(A)(i) of the Code
and Treasury Regulation Section 1.409A-1(h)) (a “
Separation from Service ”) by reason of a termination
of the Employee’s employment by Company without Cause
pursuant to Section 3(a)(ii) , or by Employee with Good
Reason pursuant to Section 3(a)(v) , the Company shall,
subject to the Employee signing and not revoking, within thirty
(30) days following the Separation from Service, a release of
claims in substantially the form attached hereto as
Exhibit A :
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(i)
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pay
to the Employee a lump-sum amount equal to the Annual Base Salary
that the Employee would have been entitled to receive if the
Employee had continued his employment hereunder for a period of
twelve (12) months following the Date of Termination,
including any guaranteed minimum payment under the management
incentive compensation plan for calendar year 2009 that remains
unpaid as of the Date of Termination, which amount shall be subject
to applicable withholding and payable on the Company’s first
payroll date occurring on or after the 30 th day following the Separation from
Service (the “ First Payroll Date ”), and any
amounts that would otherwise have been paid pursuant to this
Section 4(b)(i) prior to such payroll date shall be
paid in a lump-sum on the First Payroll Date; and
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(ii)
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pay
to the Employee a lump-sum amount equal, as determined by the
Company, to twelve months of the Company’s regular
sh
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