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EXHIBIT 10.1.8
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT effective April 1, 1999 (the
"Agreement") by and between AMERICAN AIRCARRIERS SUPPORT, INCORPORATED (the
"Company") with principal offices at Fort Mill, South Carolina and MICAH CHAPMAN
(the "Employee").
NOW THEREFORE, in consideration of the foregoing premises and mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment. The Company agrees to employ the Employee and the
Employee agrees to serve the Company as the President of a newly formed
subsidiary that acquired the assets of Complete Controls, Inc. ("CCI").
2. Position and Responsibilities. The Employee shall exert his best
efforts and devote full time and attention to the affairs of the Company.
Employee shall have no ownership in or operate any other active closely-held
corporation or business entity in the aviation or aviation parts or overhaul
business. The Employee shall have the authority and responsibility given by the
general direction, approval and control of the Board of Directors, Chief
Executive Officer, and President/Chief Operating Officer of the Company, to the
restrictions, limitations and guidelines set forth by the Board of Directors in
resolutions adopted in the minutes of the Board of Directors meetings, copies of
which will be provided to the Employee from time to time and will be
incorporated herein by reference.
3. Term of Employment. The term of the Employee's employment under this
Agreement shall be deemed to have commenced on April 1, 1999 and shall continue
until April 1, 2002, (the "Initial Term"), subject to extension as hereinafter
provided or termination pursuant to the provisions set forth hereafter. Provided
that Employee is in compliance with all of his obligations hereunder, the term
of Employee's employment shall be automatically extended for two (2) additional
one-year terms upon expiration of the Initial Term unless either party hereto
receives 30 days' prior written notice from the other electing not to extend the
Employee's employment. Compensation during the term shall be that set forth in
Section 5 hereof, unless one of the termination provisions overrides.
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4. Duties. During the period of his employment hereunder and except for
illness, specified vacation periods and reasonable leaves of absence, the
Employee shall devote his best efforts and full attention and skill to the
business and affairs of the Company and its affiliated companies, as such
business and affairs now exist and as they may be hereinafter changed or added
to, under and pursuant to the general direction of the Board of Directors of the
Company.
5. Compensation. Commencing on April 1, 1999, the Company shall pay to
the Employee as compensation for his services the sum of $150,000.00 per year,
payable semi-monthly. Base compensation shall be reviewed annually by the
Compensation Committee of the Company. Employee shall also be eligible to
periodic stock option grants subject to the discretion of the Compensation
Committee of the Board of Directors. Concurrently with Employee's hire, Employee
shall be granted options to purchase 5,000 shares of Company's common stock at
the exercise price equal to the closing price of Company's common stock on the
date of the grant with vesting as set forth in the Plan.
6. Employee's Incentive Pay. In addition to the compensation set forth
in Section 5 hereof, an EBITDA incentive compensation bonus shall be available
to Employee for each of the years of Employee's employment and shall be computed
from the following formula based on CCI's financial performance. The bonus
payments ("Payments") shall be calculated on a cumulative basis with respect to
each calendar year period as described below, beginning April 1, 1999, and shall
be paid, subject to the restrictions of such payment contained in this Agreement
and subject to applicable federal and local income tax and other payroll
withholding requirements, as follows: eighty percent (80%) of the amount payable
with respect to Employee shall be paid on or before January 31st of the
following year, and the balance shall be paid on the earlier of May 31st or the
date on which the audited financial statements for the Company which includes
the results for CCI for the applicable calendar year are issued by Company's
independent auditors. All amounts payable shall be paid directly to the
Employee, provided Employee is employed by the Company.
The Payments with respect to each calendar year (the "Period Payment")
shall be a percentage (the "Allocable Percentage") of Employee's base salary as
set forth in Section 5 of this Agreement for such year determined in accordance
with the level
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(the "Applicable Earnings Level") of earnings (taking into account Payments made
hereunder) before interest, taxes, depreciation and amortization ("EBITDA") of
CCI for such Period. The Applicable Earnings Level shall be a percentage of the
management case level of EBITDA during any Period (the "Management Case
EBITDA"), as listed on Schedule 6 attached hereto, and the corresponding
Allocable Percentage for each Applicable Earnings Level shall be as listed on
Schedule 6. Actual EBITDA with respect to any Period shall be determined by the
Company based on the financial statements of CCI, included in the audited
financial statements of the Company.
7. Expense Reimbursement. The Company will reimburse the Employee, at
least semi-monthly, for all reasonable and necessary expenses, including without
limitation, travel expenses, and reasonable entertainment expenses, incurred by
him in carrying out his duties under this Agreement. The Employee shall present
to the Company each month an account of such expenses in such form as is
reasonably required by the Board of Directors.
8. Medical and Dental Coverage. Commencing with employment, the
Employee will be entitled to participate in the Company's employee group medical
and other group insurance programs on the same basis as other employees of the
Company.
9. Medical Examination. The Employee agrees to submit himself for
physical examination on one occasion per year as requested by the Company for
the purpose of the Company's obtaining life insurance on the life of the
Employee for the benefit of the Company as may be required; provided, however,
that the Company shall bear the entire cost of such examinations and shall pay
all premiums on any key man life insurance obtained for the benefit of the
Company as beneficiary or with respect to any other designated beneficiary.
10. Vacation Time. The Employee shall be entitled each year to a
reasonable vacation in accordance with the established practices of the Company,
now or hereafter in effect for the executive personnel, during which time the
Employee's compensation shall be paid in full.
11. Benefits Payable on Disability. If the Employee becomes disabled
such that he is unable to properly perform services hereunder by reason of
illness or other physical or mental incapacity, the Company shall continue to
pay the Employee
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his then current salary hereunder for the first three (3) months of such
continuous disability commencing with the first date of such disability.
12. Obligations of Employee During and After Employment.
(a) The Employee agrees that during the terms of his
employment under this Agreement, he will engage in no other business
activities directly or indirectly, which are competitive with or which
might place him in a competing position to that of the Company, or any
affiliated company.
(b) The Employee realizes that during the course of his
employment, Employee will have produced and/or have access to
confidential business plans, information, business opportunity records,
notebooks, data, formula, specifications, trade secrets, customer
lists, account lists and secret inventions and processes of the Company
and its affiliated companies. Therefore, during or subsequent to his
employment by the Company, or by an affiliated company, the Employee
agrees to hold in confidence and not to directly or indirectly disclose
or use or copy or make lists of any such information, except to the
extent authorized by the Company in writing. All records, files,
business plans, documents, equipment and the like, or copies thereof,
relating to Company's business, or the business of an affiliated
company, which Employee shall prepare, or use, or come into contact
with, shall remain the sole property of the Company, or of an
affiliated company, and shall not be removed from the Company's or the
affiliated company's premises without its written consent, and shall be
promptly returned to the Company upon termination of employment with
the Company and its affiliated companies. The restrictions and
obligations of Employee set forth in this Section 12(b) shall not apply
to (i) information that is or becomes generally available and known to
the industry (other than as a result of a disclosure directly or
indirectly by Employee); or (ii) information that was known to Employee
prior to Employee's employment by the Company or its predecessor.
(c) Because of his employment by the Company, Employee shall
have access to trade secrets and confidential information about the
Company, its business plans, its business accounts, its business
opportunities, its expansion
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plans into other geographical areas and its methods of doing business.
Employee agrees that for a period of two (2) years after termination or
expiration of his employment, he will not, directly or indirectly,
compete with the Company in its then present business or anticipated
lines in the aviation business. Further, for the same two (2) year
period, Employee shall not hire or entice to hire any employees of
Company to any other business Employee may pursue following termination
or expiration of employment.
(d) In the event a court of competent jurisdiction finds any
provision of this Section 12 to be so overbroad as to be unenforceable,
then such provision shall be reduced in scope by the court, but only to
the extent deemed necessary by the court to render the provision
reasonable and enforceable, it being the Employee's intention to
provide the Company with the broadest protection possible against
harmful competition.
13. Termination for Cause by the Company. The Company may, without
liability, terminate the Employee's employment hereunder for cause at any time
upon written notice from the Board of Directors specifying such cause, and
thereafter the Company's obligations hereunder shall cease and terminate;
provided, however, that such written notice shall not be delivered until after
the Board of Directors shall have given the Employee written notice specifying
the conduct alleged to have constituted such cause and the Employee has failed
to cure such conduct, if curable, within fifteen (15) days following receipt of
such notice.
Grounds for termination "for cause" are one or more of the following:
(a) A willful breach of a material duty by the
Employee during the course of his employment;
(b) Habitual neglect of a material duty by the
Employee;
(c) Action or inaction by the Employee which places the
Company in circumstances of financial peril;
(d) Fraud on the Company or conviction of a felony involving
or against the Company; and
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(e) Ownership or operation of any other closely-held
corporation or business entity actively engaged in the aviation or
aviation parts business.
14. Termination by the Employee or the Company Without Cause.
(a) The Employee, without cause, may terminate this Agreement
upon 90 days prior written notice to the Company. In such event, the
Employee shall be required to render the services required under this
Agreement during such 90-day period unless otherwise directed by the
Board of Directors. Compensation for vacation time not taken by
Employee shall be paid to the Employee at the date of termination.
Employee shall be paid for only the ninety (90) day period pursuant to
normal pay practices and then all obligations hereunder regarding
compensation in any form shall cease.
(b) The Company, without cause, may terminate this Agreement.
In such event, the Company shall pay a severance allowance equal to the
balance of the contract payable over the term of the contract at
regular monthly installments unless the parties negotiate a mutually
acceptable discounted lump sum. No other benefits will be provided once
this Agreement is terminated and all other obligations hereunder
regarding compensation in any form shall cease.
15. Termination upon Death of Employee. In addition to any other
provision relating to the termination, this Agreement shall terminate upon the
Employee's death. In such event, the Company shall pay a severance allowance
equal to one hundred eighty (180) days' salary to the Employee's estate, which
may be covered by an insurance policy.
16. Arbitration. Any controversy, dispute or claim arising out of, or
relating to, this Agreement and/or its interpretation shall, unless resolved by
agreement of the parties, be settled by binding arbitration in Charlotte, North
Carolina in accordance with the Rules of the American Arbitration Association
then existing. This Agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law of the State of South Carolina. The award
rendered by the arbitrators shall be final and judgment may be entered upon the
award in any court of the State of South Carolina having jurisdiction of the
matter.
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17. General Provisions.
(a) The Employee's rights and obligations under this Agreement
shall not be transferrable by assignment or otherwise, nor shall
Employee's rights be subject to encumbrance or to the claims of the
Company's creditors. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other
corporation, or the sale by the Company of all or substantially all of
its property or assets.
(b) This Agreement and the rights of Employee with respect to
the benefits of employment referred to herein constitute the entire
Agreement between the parties hereto in respect of the employment of
the Employee by the Company and supersede any and all other agreements
either oral or in writing between the parties hereto with respect to
the employment of the Employee. The parties however acknowledge a
separate Confidentiality and Noncompetition Agreement which shall stand
on its own separate and apart from this Agreement.
(c) The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part thereof are
declared invalid or unenforceable by a court of competent jurisdiction
or in an arbitration proceeding, the validity and enforceability of the
remainder of such provisions or parts thereof and the applicability
thereof shall not be affected thereby.
(d) This Agreement may not be amended or modified except by a
written instrument executed by Company and Employee.
(e) This Agreement and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the
State of South Carolina.
18. Construction. Throughout this Agreement the singular shall include
the plural, and the plural shall include the singular, and the masculine and
neuter shall include the feminine, wherever the context so requires.
19. Text to Control. The headings of paragraphs and sections are
included solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
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20. Authority. The officer executing this agreement on behalf of the
Company has been empowered and directed to do so by the Board of Directors of
the Company.
21. Effective Date. This Agreement shall be effective on as of the date
cited above.
FOR THE COMPANY: AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
Dated April 1. 1999 By: /s/ JOSEPH E. CIVILETTO
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Title: President
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FOR THE EMPLOYEE:
Dated April 1, 1999 /s/ MICAH CHAPMAN (SEAL)
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MICAH CHAPMAN