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The Fairchild Corporation
45025 Aviation Drive, Suite 400 Dulles, VA 20166 703-478-5700 / Fax:
703-478-5767
Donald E. Miller
Executive Vice President, General Counsel and Secretary
January 22, 2003
Mr. Jeffrey J. Steiner The Fairchild Corporation 110 East 59th Street, 31st
Floor New York, NY 10022
RE: Amendment to the following contracts (the "Employment Agreements")
(i) Restated and Amended Employment Agreement dated
September 10, 1992 between Jeffrey J. Steiner and The
Fairchild Corporation ("Fairchild"); and
(ii) Employment Agreement dated September 9, 1992 between
Jeffrey J. Steiner and Banner Aerospace, Inc.
("Banner").
Dear Jeffrey:
This letter constitutes an "Amendment" to the Employment Agreements referenced
above. This Amendment is entered into in order to induce your continued
employment with Fairchild and Banner, and for other valuable consideration, the
receipt and adequacy of which are acknowledged by the parties hereto.
Satisfaction of Change in Control Payment Obligations: Section 9 of each of the
Employment Agreements provides that in the event of a Change in Control or
Trigger Event, you shall receive a payment of 2.99 times base salary and 2.99
times the preceding year's bonus (the "Change of Control Payment"), and your
employment shall terminate. Subsection 9.4 provides that you may defer receipt
of the Change of Control Payment for up to two years, in which case your
employment termination shall also be deferred. If you elect to defer payment,
the Change of Control Payment shall be computed at the greater of the amount due
at the time of the "Change in Control" or "Trigger Event" or the amount due at
the date of your election to accept the payment.
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
Employment Agreements, Fairchild's Board of Directors has agreed that you are
entitled to a Change of Control Payment in the amount of $6,280,000, to be paid
as follows: 50% in January 2003 and 50% upon your termination of employment with
Fairchild. In addition, Fairchild and Banner have requested that you do not
terminate your employment, and that you continue to serve as per the terms of
the Employment Agreements.
By executing this Amendment, you agree that the payments to be made to you in
connection with the Alcoa Transaction (as specified above) fully satisfy the
obligations of Fairchild and Banner under Section 9 of each of the Employment
Agreements. You also agree that neither Fairchild nor Banner shall have any
further payment obligations to you under Section 9 of each of the Employment
Agreements, irrespective of any future Change in Control or Trigger Event, and
that Section 9 shall be deemed deleted, in its entirety (including all
subsections thereof), from each of the Employment Agreements effective as of the
date hereof. Further, you agree to continue to be employed by Fairchild and
Banner, as per the terms of the Employment Agreements.
Effect of Amendment: Except as amended hereby, the Employment Agreements 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.
[The Remainder of This Page Intentionally Left Blank]
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/ DONALD E. MILLER
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Donald E. Miller
Executive Vice President,
General Counsel and Secretary
BANNER AEROSPACE, INC.
By: /s/ DONALD E. MILLER
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Donald E. Miller
Vice President
ACCEPTED AND AGREED
/s/ JEFFREY J. STEINER Date: January 22, 2003
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Jeffrey J. Steiner
Date of Fairchild Board Approval And Ratification: February 6, 2003
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