The Fairchild Corporation
110 East 59th Street, 31st Floor New York, NY 10022 212-308-6700 / Fax:
212-888-5674
Jeffrey J. Steiner
Chairman & Chief Executive Officer
January 22, 2003
Mr. John L. Flynn The Fairchild Corporation 45025 Aviation Drive, Suite 400
Dulles, VA 20166
RE: Amendment to Incentive Contract dated February 27, 1998
Dear John:
You and The Fairchild Corporation ("Fairchild") have entered into a letter
agreement dated as of February 27, 1998 (your "Incentive Contract"), regarding
severance and change of control payments as an incentive to your continued
employment with Fairchild. This letter constitutes an "Amendment" to your
Incentive Contract. Capitalized terms used but not otherwise defined herein have
the meaning ascribed to them in your Incentive Contract. This Amendment is
entered into in order to induce your continued employment with Fairchild, and
for other valuable consideration, the receipt and adequacy of which are
acknowledged by both parties.
Satisfaction of Change of Control Payment Obligations: Your Incentive Contract
provides that in the event of a Change of Control, you shall be entitled to
receive certain payments from Fairchild. On December 3, 2002, Fairchild
Fasteners was acquired by Alcoa Inc. (the "Alcoa Transaction"). In connection
with the Alcoa Transaction, and the relinquishment of your rights to any future
change of control payments under your existing Incentive Contract, the Company's
Board of Directors has agreed that you are entitled to a change of control
payment in the aggregate amount of $900,000. Fifty percent (50%) of such payment
was made to you in January 2003. The remaining 50% shall be paid to you in four
equal quarterly installments, with the first installment to be made on March 3,
2003.
By executing this Amendment, you agree that the payments made or to be made to
you in connection with the Alcoa Transaction (as provided in the paragraph
above) fully satisfy Fairchild's obligations to you under the paragraph "Change
Of Control" in your Incentive Contract. You also agree that Fairchild shall have
no further payment obligations to you under the "Change of Control" paragraph in
your Incentive Contract, irrespective of any future "Change of Control," and
that such paragraph shall be deemed deleted, in its entirety, from your
Incentive Contract effective as of the date hereof.
Effect of Amendment: Except as amended hereby, your Incentive Contract shall
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remain in full force and effect.
Governing Law: This Amendment shall be governed by Delaware law, without regard
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to its conflict of law provisions.
Amendments and Waivers. This Amendment may not be amended or waived except in
writing, signed by the person against whom such amendment or waiver or sought to
be enforced.
Subject to Board Ratification. This Amendment is conditioned on approval and
ratification by Fairchild's Board of Directors. In the event such approval and
ratification is not obtained on or before March 31, 2003, this Amendment shall
be null and void.
Please acknowledge your agreement with the terms of this Amendment by signing
the attached copy and returning same to The Fairchild Corporation (Attention,
Mary Shaw.) This Amendment shall be effective as of the date of your acceptance
or upon the approval and ratification by Fairchild's Board of Directors
(whichever occurs last).
Very truly yours,
THE FAIRCHILD CORPORATION
By: /s/ JEFFREY J. STEINER
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Jeffrey J. Steiner
Chairman & Chief Executive Officer
ACCEPTED AND AGREED
/s/ JOHN L. FLYNN Date: January 22, 2002
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John L. Flynn
Date of Board Approval And Ratification: February 6, 2003
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