Exhibit 10.22
SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE
THIS SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made as of this
19th day of November, 2008, by and between Hawker Beechcraft
Corporation (the “Company”), Hawker Beechcraft, Inc.
(“HBI”), and Edgar R. Nelson
(“Employee”).
WHEREAS , Employee was employed by the Company as the
Senior VP of Product Development & Engineering;
and
WHEREAS, THE Employee and the Company have agreed that,
effective as of December 1, 2008 (the “Retirement
Date”), Employee will retire from his position as Senior VP
of Product Development & Engineering for the Company;
and
WHEREAS , pursuant to the terms of separate Subscription
Agreements dated as follows, entered into by and between the
Employee and HBI, the Employee made the following share purchases:
(i) on March 26, 2007, the Employee purchased a total of
1,755.3 shares of HBI common stock for a purchase price of $10.00
per share, (ii) on April 26, 2007, the Employee purchased
a total of 11,081.2 shares of HBI common stock for a purchase price
of $10.00 per share, and (iii) on March 28, 2008, the
Employee purchased a total of 2,000 shares of HBI common stock for
a purchase price of $12.50 per share (such purchased shares in the
aggregate to be referred to as the “Purchased Shares”);
and
WHEREAS, in connection with the Employee’s entry
into the initial Subscription Agreement and purchase of the first
tranche of Purchased Shares, the Employee became party to an
Amended and Restated Shareholders Agreement with HBI dated as of
May 3, 2007 (the Shareholders Agreement”);
and
WHEREAS , on March 26, 2007, upon the sale of
Raytheon Aircraft Company, Raytheon cashed in all unvested
restricted stock awards (“RSAs”) granted to Raytheon
Aircraft employees at $52.17 per share and created the Hawker
Beechcraft Corporation Retention Program, designed to pay employees
the value of their RSAs on their original vesting dates. The
Company granted the Employee the option of investing the value of
the Retention Program, which resulted in the amount of 24, 665.9
shares of HBI common (the “Restricted Shares”), all of
which will have vested as of Employee’s Retirement Date;
and
WHEREAS , pursuant to Section 6.1 of the
Shareholders Agreement, upon the Employee’s Retirement Date,
HBI shall have the right to purchase for cash all or any portion of
his Purchased Shares and vested Restricted Shares, as well as any
shares purchased by Employee as a result of any exercise of stock
options by the Employee (the “Equity Call Option”) at
their Fair Market Value (as defined in the Shareholders Agreement)
on the date of HBI’s exercise of the Equity Call Option;
and
WHEREAS , upon the approval of the HBI Board of
Directors , HBI will exercise the Equity Call Option effective as
of the Retirement Date to the extent stated herein and based upon
the mutual agreements stated herein; and
WHEREAS , in connection with the Employee’s
retirement, the parties have agreed to a separation package and the
resolution of any and all disputes between them;
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NOW, THEREFORE, IT IS HEREBY
AGREED by and between
Employee and the Company as follows:
1. Severance Compensation and
Accrued Vacation : Employee will receive salary
continuance payments for a twelve-(12) month period, from
December 1, 2008 through December 4, 2009 at
Employee’s base pay as of December 1, 2008, subject to
normal statutory withholding. The Employee shall receive any
payroll amounts earned, accrued or owing but not yet paid to
Employee up through and including the Final Payroll Date,
including, but not limited to any benefits accrued or earned, which
will be distributed in accordance with the terms of the applicable
benefit plans and programs of the Company. The Employee shall
receive any vacation time earned and accrued or owing but not yet
paid to Employee up through and including December 1, 2008,
according to the Exempt Employee Vacation Policy existing as of
December 1, 2008.
2. Equity Call Option :
Pursuant to the Equity Call Option by HBI and approval of the HBI
Board of Directors, Employee will receive, no later than
January 9, 2009, a lump sum cash payment equal to the Equity
Call Purchase Price, which shall be equal to the fair market value
on the Retirement Date, in consideration for HBI’s
re-purchase of 39,502.4 shares of Hawker Beechcraft Inc. common
stock purchased by or awarded to the Employee.
3. Vested
Options : As a result of the Employee’s retirement as
stated herein, and pursuant to the Nonqualified Stock Option
Agreements entered into between HBI and the Employee, the following
options shall vest on the Retirement Date or the end of the
revocation period for the Release, whichever is later: (i) a
total of 17,060 shares of the Employee’s 85,300.2
Time-Vesting Options that vested on March 26, 2008;
(ii) a total of 17,060 shares of Time-Vesting Options that
vest as a result of the retirement; (iii) a total of 9,595.9
of the Employee’s 47,979.1 Performance-Vesting, Type A
Options that vested as a result of achievement of the EBITDA target
for 2007; (iv) a total of 9,595.9 of the Employee’s
Performance-Vesting, Type A Options if the EBITDA Target for the
year of retirement is met; (v) a total of 9,595.9 of the
Employee’s 47,979.1 Performance-Vesting, Type B Options that
vested as a result of achievement of the EBITDA target for 32007;
and (vi) a total of 9,595.9 of the Employee’s
Performance-Vesting, Type B Options, if the EBITDA Target for the
year of retirement is met. The Employee may exercise all or any
part of the total number of vested Options, 53,311.8 in total, at
any time prior to the earliest to occur of the tenth (10
th
) anniversary
of the Date of Grant and 5:00 p.m. (Eastern Time) on the ninetieth
(90 th ) day following the date of
the Participant’s retirement. The Employee may exercise all
or any part of the Vested Portion of the 9,595.9 shares of
Performance-Vesting, Type A Options and 9,595.9 shares of
Performance-Vesting, Type B Options at any time prior to the
earliest to occur of the tenth (10 th ) anniversary of the Date
of Grant and 5:00 p.m. (Eastern Time) on the ninetieth (90
th
) day following
the date the Participant is notified in writing by the Company
whether the Target for the year of retirement has been attained,
and thus, whether such options have vested. All other HBI options
held by the Employee other than the Vested Options shall become
null and void, and be unexercisable and of no further force and
effect, as of the Retirement Date or the end of the revocation
period for the Release, whichever is later.
4. Fringe Benefits : You may
continue, on an active employee basis, in Company-sponsored welfare
benefit plans, except for Long-Term Disability, Flexible Spending
Accounts, and Company Travel Insurance, for the period of time you
are on severance. If you are not eligible to participate in an
employer-sponsored medical plan at the end of this period, COBRA
benefits will be made available at that time for a period not to
exceed eighteen (18) months. Your 401(k) deductions will cease
effective your last day worked.
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5. Reduction of Separation
Benefits : The Company and HBI each reserve the right to make
deductions in accordance with applicable law for any monies owed to
the Company or HBI, respectively, by the Employee or the value of
the Company or HBI property that the Employee has retained in his
possession.
6. (a) Employee, for and in
consideration of the commitments of the Company and HBI as set
forth in paragraphs 1 through 4 of this Agreement, and intending to
be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE
the Company and HBI, their affiliates, subsidiaries and parents,
and their officers, directors, employees, and agents, and their
respective successors and assigns, heirs, executors, and
administrators (collectively, “Releasees”) from all
causes of action, suits, debts, claims and demands whatsoever in
law or in equity, which Employee ever had, now has, or hereafter
may have, whether known or unknown, or which Employee’s
heirs, executors, or administrators may have, by reason of any
matter, cause or thing whatsoever, from the beginning of
Employee’s employment to the Final Payroll Date, and
particularly, but without limitation of the foregoing general
terms, any claims arising from or relating in any way to
Employee’s employment relationship with the Company and/or
HBI, the terms and conditions of that employment relationship, and
the termination of that employment relationship, including, but not
limited to, any claims arising under the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act
(“OWBPA”), Title VII of The Civil Rights Act of 1964,
the Americans with Disabilities Act, the Family and Medical Leave
Act of 1993, the Employee Retirement Income Security Act of 1974,
the Rehabilitation Act, the Fair Labor Standards Act (29 U.S.C. 201
et seq.), the Kansas Act Against Discrimination (K.S.A. 44-1001 et
seq.), the Kansas Age Discrimination in Employment Act (K.S.A.
44-1111 et seq.), the Kansas Wage Payment Act (K.S.A. 44-313 et
seq.), and any other claims under any federal, state, or local
common law, statutory, or regulatory provision, now or hereafter
recognized including, but not limited to, breach of contract,
unlawful retaliation, and defamation, and any claims for
attorneys’ fees and costs. This Agreement is effective
without regard to the legal nature of the claims raised and without
regard to whether any such claims are based upon tort, equity,
implied or express contract or discrimination of any
sort.
(b) To the fullest extent permitted
by law, Employee represents and affirms that (i), Employee has not
filed or caused to be filed on Employee’s behalf any claim
for relief against the Company, HBI or any Releasee and, to the
best of Employee’s knowledge and belief, no outstanding
claims fo
