UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 1, 1999
AVTEAM, INC.
(Exact name of registrant as specified in its charter)
Florida 0-20889 65-0313187
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
3230 Executive Way
Miramar, Florida 33025
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(Address, including zip code, of principal executive office)
(954) 431-2359
Registrant's telephone number, including area code
NOT APPLICABLE
(Former name, former address and fiscal year, if changed since last report)
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ITEM 5. OTHER EVENTS.
AVTEAM, Inc. (the "Company") has entered into an Amended and Restated
Employment Agreement with Donald A. Graw ("Graw Restated Agreement"), the
Company's President and Chief Executive Officer, dated September 1, 1999. Mr.
Graw's prior agreement would have expired December 6, 1999. Graw Restated
Agreement amends and extends Mr. Graw's original employment agreement with the
Company, dated January 1, 1994, as amended, through September 1, 2002. Graw
Restated Agreement provides for Mr. Graw's continued employment as President and
Chief Executive Officer of the Company. Mr. Graw is to receive an annual base
salary ("Salary") of $350,000.00, subject to cost of living adjustment. The
foregoing does not purport to be a complete description of the Graw Restated
Agreement and reference is made to the Graw Restated Agreement filed as an
exhibit hereto for all of its terms and conditions.
The Company has also entered into an Amended and Restated Employment
Agreement with Jaime J. Levy ("Levy Restated Agreement"), the Company's
Executive Vice President, dated September 1, 1999. Mr. Levy's prior agreement
would have expired December 6, 1999. Levy Restated Agreement amends and extends
Mr. Levy's original employment agreement with the Company, dated January 1,
1994, as amended, through September 1, 2002. Levy Restated Agreement provides
for Mr. Levy's continued employment as Executive Vice President of the Company.
Mr. Levy is to receive an annual base salary ("Salary") of $300,000.00, subject
to cost of living adjustment. The foregoing does not purport to be a complete
description of the Levy Restated Agreement and reference is made to the Levy
Restated Agreement filed as an exhibit hereto for all of its terms and
conditions.
ITEM 7. EXHIBITS.
EXHIBIT NO. DOCUMENT
10.1 Amended and Restated Employment Agreement by and
between the Company and Donald A. Graw, dated
September 1, 1999.
10.2 Amended and Restated Employment Agreement by and
between the Company and Jaime J. Levy, dated
September 1, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVTEAM, INC.
Date: September 10, 1999 By: /s/ Donald A. Graw
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Donald A. Graw
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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10.1 Amended and Restated Employment Agreement by and between the
Company and Donald A. Graw, dated September 1, 1999.
10.2 Amended and Restated Employment Agreement by and between the
Company and Jaime J. Levy, dated September 1, 1999.
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EXHIBIT 10.1
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement ("Restated
Agreement") is made and effective as of this 1st day of September, 1999, between
AVTEAM, INC., a Florida corporation ("Company"), and DONALD A. GRAW
("Employee").
RECITALS
The Company and Employee entered into an Employment Agreement dated
January 1, 1994 (the "Graw Agreement"), which was subsequently amended effective
January 1, 1996 by Amendment No. 1 thereto, Amendments No. 2 and No. 3 thereto
dated as of April 12, 1996 and by Amendment No. 4 dated December 6, 1996. The
Company and Employee now wish to amend and restate the employment relationship
between the Company and Employee by terminating the Graw Agreement and
Amendments No. 1, No. 2, No. 3 and No. 4 thereto, and replacing the same with
the terms and conditions set forth below as of the date first written above.
AGREEMENTS
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is acknowledged by the
parties, the Company and Employee agree as follows:
1. TERMINATION OF GRAW AGREEMENT AND AMENDMENTS NO. 1, NO. 2, NO. 3 AND
NO. 4: The Graw Agreement and Amendments No. 1, No. 2, No. 3 and No. 4 thereto
are hereby terminated in their entirety without any further liability to either
party, except with respect to any provisions thereof which expressly survive
termination.
2. TERM OF EMPLOYMENT: The Company employs Employee and Employee
accepts employment with the Company for period beginning on the Effective Date
of this Restated Agreement and ending September 1, 2002 ("Initial Employment
Term"). This Restated Agreement shall be renewed automatically for an additional
one-year period on the expiration of the Initial Employment Term and on each
subsequent one-year anniversary date unless the Company's Board of Directors
notifies Employee in writing or Employee notifies the Company's Board of
Directors in writing that such renewal shall not take place. Said notice shall
be given not less than ninety (90) days prior to any such anniversary date.
In the event of any extension of this Restated Agreement for one or
more consecutive one (1) year terms, the terms of this Restated Agreement shall
be deemed to continue in effect for the term of such extension ("Extended
Employment Term"). The Initial Employment Term and the Extended Employment Term
will be collectively referred to as the "Employment Term," unless otherwise
specified by the Company's Board of Directors. Any Extended Employment Term must
be in writing, signed by an officer (other than Employee) authorized by the
Board of Directors of the Company.
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3. DUTIES OF EMPLOYEE: Employee shall serve as the President of the
Company throughout the Employment Term. In his capacity as President, Employee
shall be the chief executive officer of the Company, shall preside at all
meetings of the shareholders and the Board of Directors (if he shall be a member
of the board), shall have general and active management of the business and
affairs of the Company and shall see that all orders and resolutions of the
Board of Directors are carried into effect.
4. EXCLUSIVE SERVICES: Employee's services shall be exclusive to the
Company, and Employee shall devote such portion of his productive time and
attention to the business of the Company as shall be reasonably necessary to
carry out his duties during the Employment Term. Employee shall not engage in
any other businesses, duties, or pursuits whatsoever, or directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether for compensation or otherwise, unless such
activity is fully disclosed to the Company and approved by the Company's Board
of Directors. This Restated Agreement shall not be interpreted to prohibit
Employee from making passive personal investments or conducting private business
affairs if such activities do not materially interfere with the services
required under this Restated Agreement.
5. NON-COMPETITION:
To induce the Company to enter into this Restated Agreement, Employee agrees
that:
A. DEFINED TERMS: The principal business of the Company is (i)
valued-added reselling of aftermarket jet engines, jet engine
components and new and used aircraft material to other suppliers of
aftermarket engines and components, aircraft engine and component
manufacturers and their affiliates, overhaul facilities, international
and regional air carriers and operators, and leasing companies and (ii)
the operation of an FAA licensed overhaul facility (the "Business").
The region serviced by the Company is a geographic area which currently
includes the United States of America (the "Region"). Employee's
employment with the Company will bring Employee into close contact with
the members and other customers of the Company and with the trade
secrets and other confidential affairs of the Company. The Company has
a significant interest in protecting its proprietary interest in, and
the good will associated with, the foregoing. As used in this Section
5, the term "Restricted Period" means the period of one year following
termination of Employee's employment with the Company for any reason
whatsoever (other than termination by reason of expiration of the
Employment Term).
B. PERIOD OF EMPLOYMENT: During the term of Employee's
employment hereunder, Employee shall not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in or acquire, hold, or
retain any interest in any business which is competitive with the
Business of the Company in any location, or any business selling to or
doing business with the Company, unless such participation or interest
is fully disclosed to the Company and approved by a majority of the
Company's Board of Directors. The foregoing notwithstanding, Employee
may acquire, hold or retain equity ownership of any publicly held
company, provided that such equity ownership does not exceed five
percent (5%) of the issued and outstanding shares of the voting stock
of such company.
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C. RESTRICTED PERIOD: During the Restricted Period, unless the
Company and Employee shall otherwise agree in writing, Employee shall
not, (i) compete directly with the Company in the Region; (ii) enter
into the employ of, or render any services to, as an independent
contractor or otherwise, any person or entity engaged in the Business
(or any aspect thereof) in competition with the Company in the Region;
(iii) become interested, as an individual, partner, co-venturer,
shareholder, officer, director, employee, principal, agent, trustee or
in any other relationship or capacity, in any person or entity engaged
in the Business (or any aspect thereof) in competition with the Company
in the Region; or (iv) on his own behalf or on behalf of or as an
employee or agent of any other person or business, contact or approach
any person or business wherever located, with a view to selling or
assisting others to sell products or services substantially competing
with the Business. The Company and Employee shall meet periodically to
review the kinds of businesses each deems to be in competition with the
Company in the Region. They shall seek to reach agreement as to such
kinds of businesses solely for the purposes of this Restated Agreement.
Any such agreement shall not be indicative of what business or
businesses may be in competition with the Company for any other
purpose. In the event such periodic reviews do not occur, competing
kinds of businesses shall be those contemplated by the term "Business"
in Subsection 5.A.
D. NON-SOLICITATION. Employee agrees that during the one year
period after termination of Employee's employment with Company for any
reason whatsoever, he will not, directly or indirectly:
(i) Employ, hire or engage any employee then or
during any part of the preceding 12 months
connected with Company or any of its
subsidiaries to leave the employ of such
entities; or
(ii) Induce any person connected with or employed
by Company or any of its subsidiaries to
leave the employ of such entities; or
(iii) Solicit the employment of any such person on
his own behalf or on behalf of any other
business enterprise.
E. ENFORCEABILITY: If any portion of Section 5 is held to be
illegal, unenforceable, void, or voidable, the remainder shall remain
in full force and effect, and Section 5 shall be deemed altered and
amended to the minimum extent necessary to bring it within the legal
requirements of enforceability.
6. UNIQUE SERVICES: Employee hereby represents and agrees that the
services to be performed under the terms of this Restated Agreement are of a
special, unique, unusual, extraordinary, and intellectual character that gives
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in any action at law. Employee, therefore, expressly
agrees that the Company, in addition to any rights or remedies that the Company
might possess, shall be entitled to injunctive and other equitable relief to
prevent or remedy a breach of this Restated Agreement by Employee.
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7. INDEMNIFICATION: The Company shall defend Employee against all
claims made against Employee, and it shall indemnify Employee for all losses
sustained by Employee, in direct consequence of the discharge of Employee's
duties on the Company's behalf, including any claim brought against, or any loss
sustained by, Employee in his role as an officer or employee of the Company
based on a claim that any of the Company's products or services infringe a third
party patent, copyright or trade secret; provided, that Employee promptly
notifies the Company in writing of any such claim, gives the Company full
authority for the conduct of such defense and participates in and aids the
Company's counsel by giving whatever time, information, expertise and assistance
is reasonably requested for such defense. Employee agrees to indemnify and hold
the Company and its shareholders harmless, individually and collectively, from
and against any liabilities, claims, costs, or expenses (including shareholders)
as a result of actions by Employee in excess of his authority as set forth
herein.
8. CONFIDENTIAL INFORMATION: Employee acknowledges that in his
employment hereunder, and during prior period of employment with the Company, he
has occupied and will continue to occupy a position of trust and confidence.
During the period of Employee's employment hereunder and the Restricted Period
thereafter, Employee shall not, except as may be required to perform his duties
hereunder or as required by applicable law, without limitation in time or until
such information shall have become public other than by Employee's unauthorized
disclosure, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company. "Confidential Information" shall
mean information about the Company, and its respective clients and customers
that is not disclosed by the Company that was learned by Employee in the course
of his employment by the Company, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists, pricing policies, suppliers, market strategies, product development
concepts and all papers, resumes, and records (including computer records) of
the documents containing such Confidential Information. Employee acknowledges
that such Confidential Information is specialized, unique in nature and of great
value to the Company, and that such information gives the Company a competitive
advantage. The Employee agrees to deliver or return to the Company, at the
Company's request at any time or upon termination or expiration of his
employment or as soon thereafter as possible, all documents, computer tapes and
disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company or prepared by the Employee
during the term of his employment by the Company.
9. COMPENSATION:
A. SALARY: The Company shall pay Employee an annual base
salary ("Salary") of $350,000.00, payable in equal monthly installments
in accordance with the normal payroll procedures of the Company or at
such other time or times as Employee and the Company shall agree.
Except as otherwise provided herein, the Company's obligation to pay
Employee's Salary under this Restated Agreement shall cease as of the
date of termination of Employee's employment. The Board of the Company
shall review the performance and salary of Employee shortly after each
anniversary of the Effective Date of this Agreement. Effective January
1, 2001 and on each January 1 thereafter, Employee's Salary shall be
adjusted to reflect the increase, if any, in the cost of living. The
adjustment shall be made by adding to his Salary an amount obtained by
multiplying
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the Salary by the percentage by which the level of the Consumer Price
Index for the Miami, Florida Metropolitan Area as of the last day of
the preceding calendar year compiled by the Bureau of Labor Statistics
of the United States Department of Labor, has increased over its level
as of the Effective Date of this Agreement.
B. INCENTIVE COMPENSATION: Employee shall be eligible to
participate in the Company's Incentive Compensation Plan on the terms
and conditions established by the Board of Directors of the Company.
C. STOCK OPTIONS: Employee shall be eligible to participate in
the Company's Stock Option Plan.
10. EMPLOYEE BENEFITS:
A. VACATION TIME AND SICK LEAVE: Employee shall be entitled to
(4) weeks of vacation and fifteen (15) days of sick leave without loss
of compensation each year during the Employment Term. For the purposes
of this paragraph, a year shall begin on the effective date of this
Restated Agreement as set forth above. In the event that Employee takes
vacation time or sick leave in excess of the minimum numbers set forth
in this paragraph, the Board of Directors shall determine whether or
not Employee shall receive compensation for such excess days. Unless
otherwise established by the Company's Board of Directors, in the event
that Employee does not for any reason take the total amount of vacation
time authorized during any year, he shall be deemed to have waived any
entitlement to vacation time for that year. Sick days may not be
accumulated.
B. ADDITIONAL BENEFITS: Employee shall be entitled to all
employment benefits made available to other employees of the Company
and its affiliates, commensurate with Employee's position and title
with the Company and the Employee's work location. Such benefits shall
include, but are not limited to, such health insurance, disability
insurance, life insurance, pension, and retirement plans as are adopted
from time to time by the Company.
C. WORKING FACILITIES. The Company shall furnish the Employee
with an office, secretarial help and such other facilities and services
suitable to his title and position and adequate for the performance of
his duties hereunder.
D. EXPENSES. Company agrees to reimburse Employee for all
reasonable expenses incurred by him in providing services under this
Agreement in accordance with its policies and practices regarding
expense reimbursement then in effect.
11. TAX WITHHOLDING: The Company shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for any and all federal, social security, state and local taxes,
assessments or charges now applicable or that may be enacted and become
applicable in the future.
12. TERMINATION OF RESTATED AGREEMENT:
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A. TERMINATION FOR CAUSE: The Company may terminate Employee's
employment under this Restated Agreement for "Cause," at any time, but
only in the event of (a) Employee's conviction of a felony (provided,
however, that following indictment for a felony, and prior to
conviction, the Company may, without limiting or modifying in any other
way its obligations under this Restated Agreement, suspend Employee
from the performance of his duties hereunder), or (b) a determination
by the Company's Board of Directors, acting reasonably and in good
faith, that Employee has (1) neglected his material duties or performed
his material duties in an incompetent manner, (2) committed fraudulent
or dishonest actions, or (3) deliberately injured or attempted to
injure the Company; provided, however, that Employee shall not be
deemed to have been terminated for Cause unless and until there shall
have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership
of the Board of Directors of the Company, finding that, in the good
faith opinion of such board, he was guilty of or had engaged in conduct
constituting Cause as set forth herein and specifying the particulars
thereof in detail.
B. EFFECT OF TERMINATION FOR CAUSE: In the event of
termination of Employee for cause as set forth in Subsection 12.A, or a
voluntary termination by Employee in breach of this Restated Agreement
without the consent of the Company, Employee shall have no right to any
bonuses, salaries, benefits or entitlements other than those required
by law or specifically provided under the terms of the applicable plan
document. Payment of any further bonuses or other salaries claimed by
Employee will be in the sole and absolute discretion of the Company,
and Employee shall have no entitlement thereto.
C. DISABILITY AND DEATH: If, during the Employment Term,
Employee should die or suffer any physical or mental illness that
renders him incapable of fulfilling his obligations under this Restated
Agreement, and such incapacity exists or may reasonably be expected to
exist for more than ninety (90) calendar days in the aggregate, the
Company may, upon five (5) calendar days written notice to Employee,
terminate this Restated Agreement. The determination of the Company
that Employee is incapable of fulfilling his obligations under this
Restated Agreement shall be final and binding. In the event of
termination under this Subsection 12.C, Employee, or his estate, shall
be entitled to an amount equal to six (6) months' Salary and any other
accrued compensation, plus such additional benefits, if any, as may be
approved by the Company's Board of Directors. Employee, or his estate,
shall, upon termination under the terms of this Subsection 12.C, be
further entitled to additional compensation, to be calculated on a pro
rata basis according to the number of accrued vacation days, if any,
not taken by Employee during the year defined for the purposes of
vacation, in which Employee was terminated.
D. VOLUNTARY TERMINATION BY EMPLOYEE AT THE END OF THE
EMPLOYMENT TERM: In the event of voluntary termination by Employee at
the end of the Initial Employment Term, or any Extended Employment
Term, (except any termination pursuant to Subsection 12.G), Employee
shall be entitled only to those amounts that have accrued to the date
of termination or are expressly payable under the terms of the
Company's applicable benefit plans or are required by applicable law.
The Company may, in its sole
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and absolute discretion, confer such other benefits or payments as it
determines, but Employee shall have no entitlement thereto.
E. TERMINATION BY EMPLOYER AT THE END OF THE EMPLOYMENT TERM:
In the event that Employee's employment is terminated by the Company at
the end of the Initial Employment Term or any Extended Employment Term
as a result of the Company's notice specified in Section 2 above,
Employee shall be treated as in Subsection 12.D.
F. TERMINATION BY EMPLOYER DURING THE EMPLOYMENT TERM: In the
event of termination by the Employer other than at the end of the
Initial Employment Term or Extended Employment Term, other than for
Cause under Subsection 12.A and except as otherwise contemplated under
Subsection 12.G.(i), Employee shall be entitled to two (2) year's base
salary (at Employee's then current base) payable in a lump sum in cash
upon such termination.
G. TERMINATION RELATING TO A CHANGE IN CONTROL AND FOR GOOD
REASON. If a Change of Control occurs and (i) Employee's employment is
terminated by Company within one (1) year after the Change in Control
or (ii) Employee voluntarily terminates employment, for Good Reason,
within one year after the event-giving rise to Good Reason, the Company
shall pay Employee upon such termination a lump sum in cash equivalent
to:
i. An amount equal to 2.99 times (a) the
Employee's Salary and (b) the average of
Employee's two preceding annual incentive
compensation payment; and
ii. A pro rata portion of Employee's Incentive
Compensation or other bonus through the
termination date, less applicable payroll
deductions; and
iii. Unused vacation and holiday pay through the
termination date, less applicable payroll
deductions;
a. CHANGE IN CONTROL. For purpose of this
Agreement, a "Change in Control" shall mean the
occurrence of any of the following events:
1. The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (collectively, a
"person") of Beneficial Ownership (as such term is
defined in Rule 1 3d-3 promulgated under the Exchange
Act), directly or indirectly, of fifty (50%) percent
or more of the then outstanding shares of common
stock of the Company (collectively, the "Outstanding
Common Stock"); provided, however, that the following
shall not constitute a Change in Control:
(A) Any acquisition of the Outstanding
Common Stock directly from the
Company;
(B) Any acquisition by the Underwriter
(as such term is defined in Section
2(11) of the Securities Act of
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1933, as amended) for the purpose of
making a public offering;
(C) Any acquisition by the Company,
whether or not the fifty (50%)
threshold set forth above is exceeded
in such acquisition; or
(D) Any acquisition by an employee
benefit plan (or related trust)
sponsored or maintained by the
Company or any corporation controlled
by the Company.
2. Approval by the shareholders of the
Company of (x) a reorganization, merger or
consolidation with respect to which persons who were
the shareholders of the Company immediately prior to
such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in
the election of directors of the reorganized, merged
or consolidated company's then outstanding voting
securities, or (y) the sale of all or substantially
all of the assets of the Company, unless the approved
reorganization, merger, consolidation or sale is
subsequently abandoned;
3. A change in a majority of the Company's
Board of Directors of the Company during any 24-month
period without the approval of a majority of
directors in office at the beginning of such period.
b. GOOD REASON. For purposes of this Agreement, "Good
Reason" shall mean:
(i) The assignment to the Employee of any
duties inconsistent in any material respect with the
Employee's position (including status, offices,
titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 3 of
this Agreement, or any other action by the Company
which results in a diminution in such position,
authority, duties or responsibilities, excluding for
this purpose (a) an assignment of substantially
equivalent position, authority, duties and
responsibilities, or (b) an isolated, insubstantial
and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after
receipt of written notice thereof given by the
Employee;
(ii) Any failure by the Company to comply
with any of the provisions of Sections 9 or 10 of
this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after
receipt of written notice thereof given by the
Employee;
(iii) The Company's requiring the Employee
to be based at any office or location other than the
Company's offices in Miramar or Miami,
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except for travel reasonably required in connection
with the performance of the Employee's
responsibilities hereunder; or
(iv) Any purported termination by the
Company of the Employee's employment other than as
expressly permitted by this Agreement.
H. CONFIDENTIALITY: Nothing in this Section 12 shall affect
the rights of the parties under Section 5 above.
I. PAYMENT OF SALARY AT TERMINATION. Notwithstanding anything
to the contrary, with respect to Salary only, termination of employment
by Employer or by Employee for any reason provided under Subsections
12A through 12G shall never result in payment of more than 2.99 times
the Employee's Salary.
J. PAYMENT OF ACCRUED COMPENSATION AT TERMINATION:
Notwithstanding anything to the contrary, any accrued compensation
payable to Employee., including any severance benefits, payable to
Employee at the time of his termination, may be allocated at the option
of Employee to the purchase of shares in the Company under employee
stock options granted under Subsection 9.C, to the extent permitted by
law and in accordance with the Company's Stock Option Plan.
13. EXCISE TAX PAYMENTS:
A. Notwithstanding anything contained in this Agreement to the
contrary, in the event that any payment (within the meaning of Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended or replaced
(the "Code"), or distribution to or for the benefit of the Employee,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise in connection with, or arising out
of, his employment with the Company (a "Payment" or "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Employee with respect to such
excise tax (such excise tax, interest and penalties collectively
referred to as the "Excise Tax"), then the Employee shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Employee of all such taxes (including
any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment equal to the
Excise Tax impose upon the Payments; PROVIDED, that the Employee shall
not be entitled to receive any additional payment relating to any
interest or penalties attributable to any action or omission by the
Employee in bad faith.
B. An initial determination shall be made by an accounting
firm mutually agreeable to the Company and the Employee and, if not
agreed to within ten days after the date of termination, a national
independent accounting firm selected by the Employee (the "Accounting
Firm") as whether a Gross-Up Payment is required pursuant to this
Section 13 and the amount of such Gross-Up Payment. To permit the
Accounting Firm to make the initial determination, the Company shall
furnish the Accounting Firm with all information reasonably required
for such firm to complete such determination as soon as practicable
after the date of termination, but in no event more than twenty-five
(25) days thereafter. All fees, costs and expenses (including), but not
limited to, the cost of retaining experts) of the
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Accounting Firm shall be borne by the Company and the Company shall pay
such fees, costs and expenses as they become due. The Accounting Firm
shall provide detailed supporting calculations, reasonably acceptable
both to the Company and the Employee within thirty (30) days of the
date of termination, if applicable, or such other time as requested by
the Company or by the Employee (provided the Employee reasonably
believes that any of the Payments may be subject to the Excise Tax).
The Gross-Up Payment, if any, as determined pursuant to this Section
13(b) shall be paid by the Company to the Employee within five (5)
business days of the receipt of the Accounting Firm's determination. If
the Accounting Firm determines that no Excise Tax is payable by the
Employee with respect to a Payment or Payments, it shall furnish the
Employee with an opinion reasonably satisfactory to the Employee that
no Excise Tax will be imposed with respect to any such Payment or
Payments. Any such initial determination by the Accounting Firm of the
Gross-Up Payment shall be binding upon the Company and the Employee
subject to the application of Section 13(c).
C. As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Overpayment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred upon
a "Final Determination" (as hereinafter defined) that the tax liability
of the Employee (whether in respect of the then current taxable year of
the Employee or in respect of any prior taxable year of the Employee)
will be increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which the Company has failed to
make a sufficient Gross-Up Payment. An Overpayment shall be deemed to
have occurred upon a "Final Determination" (as hereinafter defined)
that the Excise Tax shall not be imposed (or shall be reduced) upon a
Payment or Payments with respect to which the Employee had previously
received a Gross-Up Payment. A Final Determination shall be deemed to
have occurred when (i) in the case of an Overpayment, the Employee has
received from the applicable government tax liability authority a
refund of taxed or other reduction in his tax liability imposed as a
result of a Payment or, in the case of an Underpayment, the Employee
receives notice from a competent governmental authority that his tax
liability imposed as a result of a Payment will be increased, and (ii)
in the case of an Overpayment or an Underpayment, upon either (x) the
date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and
conclusively binds the Employee and such taxing authority, or in the
event that a claim is brought before a court of competent jurisdiction,
the date upon which a final determination has been made by such court
and either all appeals have been taken and finally resolved or the time
for all appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations with respect
to the Employee's applicable tax return has expired. If an Underpayment
occurs, the Employee shall promptly notify the Company and the Company
shall promptly pay to the Employee an additional Gross-Up Payment equal
to the amount of the Underpayment plus an interest and penalties
imposed on the Underpayment (other than interest and penalties
attributable to any action or omission by the Employee in bad faith).
If an Overpayment occurs, the amount of the Overpayment shall be
treated as a loan by the Company to the Employee and the Employee
shall, within ten (10) business days of the occurrence of such
Overpayment, pay the Company the amount of the Overpayment, with
interest computed in the same manner as for an Underpayment.
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D. Notwithstanding anything contained in this Agreement to the
contrary, in the event it is determined that an Excise Tax will be
imposed on any Payment or Payments, the Company shall pay to the
applicable governmental taxing authorities as Excise Tax withholding,
the amount of the Excise Tax that the Company has actually withheld
from the Payment or Payments.
14. OBLIGATIONS UPON TERMINATION: In the event of any termination of
his employment, for whatever reason, Employee will promptly deliver to the
Company all physical property, discs, documents, notes, printouts, and all
copies thereof and other materials in Employee's possession or under Employee's
control pertaining to the business of the Company, including, but not limited
to, those embodying or relating to the Confidential Information (as defined in
Section 8 herein).
If Employee would like to keep certain property, such as material
relating to professional societies or other non-confidential material, upon the
termination of employment with the Company, he agrees to discuss such issues
with the Company. Where such a request does not put Confidential Information of
the Company at risk, the Company will customarily grant the request.
Upon termination of employment with the Company, Employee's obligations
under this Section 14 shall survive and the Employee shall, if requested by the
Company, reaffirm Employee's recognition of the importance of maintaining the
confidentiality of the Company's Confidential Information and reaffirm all of
the Employee's obligations set forth in this Section 14.
15. LIFE INSURANCE: The Company may, in its sole discretion, purchase
such life insurance policies as it deems necessary or appropriate, naming
Employee as the insured and the Company as beneficiary. Employee hereby agrees
to submit to any reasonable medical examination required for the purchase of
such insurance.
16. NOTICES: Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
certified mail, return receipt requested. Mailed notices shall be addressed to
the parties as follows:
If notice is to the Company, to:
AVTEAM, INC.
Miramar Park of Commerce
3230 Executive Way
Miramar, Florida 33025
Attn: Chairman, Board of Directors
with copy to:
Baker & McKenzie
1200 Brickell Avenue, Suite 1900
Miami, Florida 33131
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Attn: Noel H. Nation, Esq.
If notice is to Employee, to:
Donald A. Graw
6211 NW. 98th Drive
Parkland, Florida 33076
Either party may change its address by written notice in accordance
with this Section 16. Notices delivered personally shall be deemed communicated
as of the dates of actual receipt; mailed notices shall be deemed communicated
as of forty-eight (48) hours after the date of mailing.
17. ARBITRATION: Any controversy between the parties involving the
construction or application of any of the terms, provisions or conditions of
this Restated Agreement or in any way connected with Employee's employment with
the Company, including but not limited to, breach of this Restated Agreement,
termination or discharge, claims of age, gender, race or disability
discrimination, sexual harassment or civil rights violations shall, within
thirty days of the written notice to the other party, be submitted to final and
binding arbitration as follows:
A. The arbitration shall be held in Broward County, Florida.
B. The arbitration shall be conducted by one arbitrator, who
is a member of the American Arbitration Association ("AAA") and in
accordance with the rules of the AAA then in effect, subject to the
specific exceptions set out in Subsection 1 7.C, unless both parties
agree otherwise. The arbitrator shall be chosen from a panel of persons
with knowledge of and experience in employment and employment law
issues.
C. Notwithstanding any rule of the AAA to the contrary, (1)
the parties shall be entitled to conduct discovery (i.e., investigation
of facts through deposition and other means) which shall be governed by
the Florida Rules of Civil Procedure then in effect; (2) the arbitrator
shall have all power and authority relating to such discovery as are
allowed under the Florida Rules of Civil Procedure; (3) the arbitrator
shall apply Florida substantive law; (4) at the election and at the
expense of either party, a Court Reporter may record the hearing and
such recording will be the official record of the proceeding; and (5)
the arbitrator shall specify the basis for, and the type of damage
award, if any, entered.
D. The arbitrator's authority to order discovery and enter
judgment shall be final and binding. It may be enforced through an
order of a court of competent jurisdiction. Such judgment may be
reviewed by a court only on the grounds of bias, improper conduct of
the arbitrator, abuse of discretion, or violation of public policy.
Notwithstanding the foregoing agreement to arbitrate, either
party may apply to any court of competent jurisdiction for temporary
restraining orders, preliminary injunctions, permanent injunctions, or
other extraordinary relief, to remedy any actual or threatened
unauthorized disclosure of confidential information or unauthorized
use, copying, marketing, or distribution of confidential information.
Such application shall be
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made before the arbitrator is appointed and assumes his or her
responsibilities. The seeking of injunctive relief shall not operate to
prejudice the rights of the parties to arbitrate their disputes.
18. ATTORNEYS' FEES AND COSTS: If either party fails to perform its
respective obligations under this Restated Agreement, and the other party is
thereby required to incur attorneys' fees or other fees or costs, including but
not limited to the costs of arbitration, the party so incurring such fees and
costs shall be entitled to the payment of those fees and costs by the breaching
party.
19. ENTIRE AGREEMENT: This Restated Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee by the Company and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this Restated Agreement acknowledges that
no representations, inducements, promises, or agreements, oral or written, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Restated Agreement shall be valid or binding on either party.
20. MODIFICATIONS: Any modification of this Restated Agreement shall be
effective only if it is in writing and signed by both parties.
21. EFFECT OF WAIVER: The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this Restated
Agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
22. PARTIAL INVALIDITY: If any provision of this Restated Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way, unless such partial invalidity materially
affects the intent of the parties.
23. GOVERNING LAW: This Restated Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
24. ASSIGNABILITY: The rights and duties of either party hereunder
shall not be assignable by either party, except that this Restated Agreement and
all rights and obligations hereunder may be assigned by the Company to, and be
assumed by, any corporation or other business entity which succeeds to all or
substantially all of the assets and business of the Company through merger,
consolidation, acquisition of assets, or other corporate reorganization.
25. SURVIVAL: The covenants, agreements, representations and warranties
contained in or made pursuant to this Restated Agreement shall survive
Employee's termination of employment irrespective of any investigation made by
or on behalf of any party.
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IN WITNESS WHEREOF, the parties have executed this Restated Agreement
effective as of the day and year first above written.
AVTEAM, INC.
By: /s/ Mark Koondel
Name: Mark Koondel
Title: Chief Financial Officer
EMPLOYEE:
/s/ Donald A. Graw
Donald A. Graw
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EXHIBIT 10.2
THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement ("Restated
Agreement") is made and effective as of this 1st day of September, 1999
("Effective Date"), between AVTEAM, INC. a Florida corporation ("Company"), and
JAIME J. LEVY ("Employee").
RECITALS
The Company and Employee entered into an Employment Agreement dated
January 1, 1994 (the "Levy Agreement"), which was subsequently amended effective
January 1, 1996 by Amendment No. 1 thereto, Amendments No. 2 and No. 3 thereto
dated as of April 12, 1996 and by Amendment No. 4 dated December 6, 1996. The
Company and Employee now wish to amend and restate the employment relationship
between the Company and Employee by terminating the Levy Agreement and
Amendments No. 1, No. 2, No. 3 and No.4 thereto, and replacing the same with the
terms and conditions set forth below as of the date first written above.
AGREEMENTS
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is acknowledged by the
parties, the Company and Employee agree as follows:
1. TERMINATION OF LEVY AGREEMENT AND AMENDMENTS NO. 1, NO. 2, NO. 3 AND
NO. 4: The Levy Agreement and Amendments No. 1, No. 2, No. 3 and No.4 thereto
are hereby terminated in their entirety without any further liability to either
party, except with respect to any provisions thereof which expressly survive
termination.
2. TERM OF EMPLOYMENT: The Company employs Employee and Employee
accepts employment with the Company for a period beginning on the Effective Date
of this Restated Agreement and ending September 1, 2002 ("Initial Employment
Term"). This Restated Agreement shall be renewed automatically for an additional
one-year period on the expiration of the Initial Employment Term and on each
subsequent one-year anniversary date unless the Company's Board of Directors or
Chief Executive Officer notifies Employee in writing or Employee notifies the
Company's Chief Executive Officer or Board of Directors in writing that such
renewal shall not take place. Said notice shall be given not less than ninety
(90) days prior to any such anniversary date.
In the event of any extension of this Restated Agreement for one or
more consecutive one (1) year terms, the terms of this Restated Agreement shall
be deemed to continue in effect for the term of such extension ("Extended
Employment Term"). The Initial Employment Term and the Extended Employment Term
will be collectively referred to as the "Employment Term," unless otherwise
specified by the Company's Board of Directors. Any Extended Employment Term must
be in writing, signed by the Chief Executive Officer of the Company.
<PAGE>
3. DUTIES OF EMPLOYEE: Employee shall serve as the Executive Vice
President of the Company throughout the Employment Term. In his capacity as
Executive Vice President, Employee shall act under the direction of the
President and in the absence or disability of the President shall perform the
duties and exercise the powers of the President. He shall perform such other
duties and have such other powers as the president or the Board of Directors may
from time to time prescribe.
4. EXCLUSIVE SERVICES: Employee's services shall be exclusive to the
Company, and Employee shall devote such portion of his productive time and
attention to the business of the Company as shall be reasonably necessary to
carry out his duties during the Employment Term. Employee shall not engage in
any other businesses, duties, or pursuits whatsoever, or directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether for compensation or otherwise, unless such
activity is fully disclosed to the Company and approved by the Company's Board
of Directors. This Restated Agreement shall not be interpreted to prohibit
Employee from making passive personal investments or conducting private business
affairs if such activities do not materially interfere with the services
required under this Restated Agreement.
5. NON-COMPETITION; NON-SOLICITATION. To induce the Company to enter
into this Restated Agreement, Employee agrees that:
A. DEFINED TERMS: The principal business of the Company is (i)
valued-added reselling of aftermarket jet engines, jet engine
components and new and used aircraft material to other suppliers of
aftermarket engines and components, aircraft engine and component
manufacturers and their affiliates, overhaul facilities, international
and regional air carriers and operators, and leasing companies and (ii)
the operation of an FAA licensed overhaul facility (the "Business").
The region serviced by the Company is a geographic area which currently
includes the United States of America (the "Region"). Employee's
employment with the Company will bring Employee into close contact with
the members and other customers of the Company and with the trade
secrets and other confidential affairs of the Company. The Company has
a significant interest in protecting its proprietary interest in, and
the good will associated with, the foregoing. As used in this Section
5, the term "Restricted Period" means the period of one year following
termination of Employee's employment with the Company for any reason
whatsoever (other than termination by reason of expiration of the
Employment Term).
B. PERIOD OF EMPLOYMENT: During the term of Employee's
employment hereunder, Employee shall not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in or acquire, hold, or
retain any interest in any business which is competitive with the
Business of the Company in any location, or its shareholders or any
business selling to or doing business with the Company, unless such
participation or interest is fully disclosed to the Company and
approved by a majority of the Company's Board of Directors. The
foregoing notwithstanding, Employee may acquire, hold or retain equity
ownership of any publicly held company, provided that
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such equity ownership does not exceed five percent (5%) of the issued
and outstanding shares of the voting stock of such company.
C. RESTRICTED PERIOD: During the Restricted Period, unless the
Company and Employee shall otherwise agree in writing, Employee shall
not, (i) compete directly with the Company in the Region; (ii) enter
into the employ of, or render any services to, as an independent
contractor or otherwise, any person or entity engaged in the Business
(or any aspect thereof) in competition with the Company in the Region;
(iii) become interested, as an individual, partner, co-venturer,
shareholder, officer, director, employee, principal, agent, trustee or
in any other relationship or capacity, in any person or entity engaged
in the Business (or any aspect thereof) in competition with the Company
in the Region; or (iv) on his own behalf or on behalf of or as an
employee or agent of any other person or business, contact or approach
any person or business wherever located, with a view to selling or
assisting others to sell products or services substantially competing
with the Business. The Company and Employee shall meet periodically to
review the kinds of businesses each deems to be in competition with the
Company in the Region. They shall seek to reach agreement as to such
kinds of businesses solely for the purposes of this Restated Agreement.
Any such agreement shall not be indicative of what business or
businesses may be in competition with the Company for any other
purpose. In the event such periodic reviews do not occur, competing
kinds of businesses shall be those contemplated by the term "Business"
in Subsection 5.A.
D. NON-SOLICITATION. Employee agrees that during the one year
period after termination of Employee's employment with Company for any
reason whatsoever, he will not, directly or indirectly:
(i) Employ, hire or engage any employee then or
during any part of the preceding 12 months
connected with Company or any of its
subsidiaries to leave the employ of such
entities; or
(ii) Induce any person connected with or employed
by Company or any of its subsidiaries to
leave the employ of such entities; or
(iii) Solicit the employment of any such person on
his own behalf or on behalf of any other
business enterprise.
E. ENFORCEABILITY: If any portion of Section 5 is held to be
illegal, unenforceable, void, or voidable, the remainder shall remain
in full force and effect, and Section 5 shall be deemed altered and
amended to the minimum extent necessary to bring it within the legal
requirements of enforceability.
6. UNIQUE SERVICES: Employee hereby represents and agrees that the
services to be performed under the terms of this Restated Agreement are of a
special, unique, unusual, extraordinary, and intellectual character that gives
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in any action at law. Employee, therefore, expressly
agrees that the Company, in addition to any rights or remedies that the Company
might
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possess, shall be entitled to injunctive and other equitable relief to prevent
or remedy a breach of this Restated Agreement by Employee.
7. INDEMNIFICATION: The Company shall defend Employee against all
claims made against Employee, and it shall indemnify Employee for all losses
sustained by Employee, in direct consequence of the discharge of Employee's
duties on the Company's behalf, including any claim brought against, or any loss
sustained by, Employee in his role as an officer or employee of the Company
based on a claim that any of the Company's products or services infringe a third
party patent, copyright or trade secret; provided, that Employee promptly
notifies the Company in writing of any such claim, gives the Company full
authority for the conduct of such defense and participates in and aids the
Company's counsel by giving whatever time, information, expertise and assistance
is reasonably requested for such defense. Employee agrees to indemnify and hold
the Company and its shareholders harmless, individually and collectively, from
and against any liabilities, claims, costs, or expenses (including shareholders)
as a result of actions by Employee in excess of his authority as set forth
herein.
8. CONFIDENTIAL INFORMATION: Employee acknowledges that in his
employment hereunder, and during prior period of employment with the Company, he
has occupied and will continue to occupy a position of trust and confidence.
During the period of Employee's employment hereunder and the Restricted Period
thereafter, Employee shall not, except as may be required to perform his duties
hereunder or as required by applicable law, without limitation in time or until
such information shall have become public other than by Employee's unauthorized
disclosure, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company. "Confidential Information" shall
mean information about the Company, and its respective clients and customers
that is not disclosed by the Company that was learned by Employee in the course
of his employment by the Company, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists, pricing policies, suppliers, market strategies, product development
concepts and all papers, resumes, and records (including computer records) of
the documents containing such Confidential Information. Employee acknowledges
that such Confidential Information is specialized, unique in nature and of great
value to the Company, and that such information gives the Company a competitive
advantage. The Employee agrees to deliver or return to the Company, at the
Company's request at any time or upon termination or expiration of his
employment or as soon thereafter as possible, all documents, computer tapes and
disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company or prepared by the Employee
during the term of his employment by the Company.
9. COMPENSATION:
A. SALARY: The Company shall pay Employee an annual base
salary of $300,00.00 ("Salary"), payable in equal monthly installments
in accordance with the normal payroll procedures of the Company or at
such other time or times as Employee and the Company shall agree.
Except as otherwise provided herein, the Company's obligation to pay
Employee's Salary under this Restated Agreement shall cease as of the
date of termination of Employee's employment. The President and Chief
Executive Officer of the Company shall review the performance and
salary of Employee shortly after each
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anniversary of the Effective Date of this Agreement. Effective January
1, 2001 and on each January thereafter, Employee's Salary shall be
adjusted to reflect the increase, if any, in the cost of living. The
adjustment shall be made by adding to his Salary an amount obtained by
multiplying the Salary by the percentage by which the level of the
Consumer Price Index for the Miami, Florida Metropolitan Area as of the
last day of the preceding calendar year compiled by the Bureau of Labor
Statistics of the United States Department of Labor, has increased over
its level as of the Effective Date of this Agreement.
B. INCENTIVE COMPENSATION: Employee shall be eligible to
participate in the Company's Incentive Compensation Plan on the terms
and conditions established by the Board of Directors of the Company.
C. STOCK OPTIONS: Employee shall be eligible to participate in
the Company's Stock Option Plan.
10. EMPLOYEE BENEFITS:
A. VACATION TIME AND SICK LEAVE: Employee shall be entitled to
four (4) weeks of vacation and fifteen (15) days of sick leave without
loss of compensation each year during the Employment Term. For the
purposes of this paragraph, a year shall begin on the effective date of
this Restated Agreement as set forth above. In the event that Employee
takes vacation time or sick leave in excess of the minimum numbers set
forth in this paragraph, the Board of Directors shall determine whether
or not Employee shall receive compensation for such excess days. Unless
otherwise established by the Company's Board of Directors, in the event
that Employee does not for any reason take the total amount of vacation
time authorized during any year, he shall be deemed to have waived any
entitlement to vacation time for that year. Sick days may not be
accumulated.
B. ADDITIONAL BENEFITS: Employee shall be entitled to all
employment benefits made available to other employees of the Company
and its affiliates, commensurate with Employee's position and title
with the Company and the Employee's work location. Such benefits shall
include, but are not limited to, such health insurance, disability
insurance, life insurance, pension, and retirement plans as are adopted
from time to time by the Company.
C. WORKING FACILITIES. The Company shall furnish the Employee
with an office, secretarial help and such other facilities and services
suitable to his title and position and adequate for the performance of
his duties hereunder.
D. EXPENSES. Company agrees to reimburse Employee for all
reasonable expenses incurred by him in providing services under this
Agreement in accordance with its policies and practices regarding
expense reimbursement then in effect.
11. TAX WITHHOLDING: The Company shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for any and all federal, social security, state and local taxes,
assessments or charges now applicable or that may be enacted and become
applicable in the future.
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12. TERMINATION OF RESTATED AGREEMENT:
A. TERMINATION FOR CAUSE: The Company may terminate Employee's
employment under this Restated Agreement for "Cause," at any time, but
only in the event of (a) Employee's conviction of a felony (provided,
however, that following indictment for a felony, and prior to
conviction, the Company may, without limiting or modifying in any other
way its obligations under this Restated Agreement, suspend Employee
from the performance of his duties hereunder), or (b) a determination
by the Company's Board of Directors, acting reasonably and in good
faith, that Employee has (1) neglected his material duties or performed
his material duties in an incompetent manner, (2) committed fraudulent
or dishonest actions, or (3) deliberately injured or attempted to
injure the Company; provided, however, that Employee shall not be
deemed to have been terminated for Cause unless and until there shall
have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership
of the Board of Directors of the Company, finding that, in the good
faith opinion of such board, he was guilty of or had engaged in conduct
constituting Cause as set forth herein and specifying the particulars
thereof in detail.
B. EFFECT OF TERMINATION FOR CAUSE: In the event of
termination of Employee for cause as set forth in Subsection 12.A, or a
voluntary termination by Employee in breach of this Restated Agreement
without the consent of the Company, Employee shall have no right to any
bonuses, salaries, benefits or entitlements other than those required
by law or specifically provided under the terms of the applicable plan
document. Payment of any further bonuses or other salaries claimed by
Employee will be in the sole and absolute discretion of the Company,
and Employee shall have no entitlement thereto.
C. DISABILITY AND DEATH: If, during the Employment Term,
Employee should die or suffer any physical or mental illness that
renders him incapable of fulfilling his obligations under this Restated
Agreement, and such incapacity exists or may reasonably be expected to
exist for more than ninety (90) calendar days in the aggregate, the
Company may, upon five (5) calendar days written notice to Employee,
terminate this Restated Agreement. The determination of the Company
that Employee is incapable of fulfilling his obligations under this
Restated Agreement shall be final and binding. In the event of
termination under this Subsection 12.C, Employee, or his estate, shall
be entitled to an amount equal to six (6) months' Salary and any other
accrued compensation, plus such additional benefits, if any, as may be
approved by the Company's Board of Directors. Employee, or his estate,
shall, upon termination under the terms of this Subsection 12.C, be
further entitled to additional compensation, to be calculated on a pro
rata basis according to the number of accrued vacation days, if any,
not taken by Employee during the year defined for the purposes of
vacation, in which Employee was terminated.
D. VOLUNTARY TERMINATION BY EMPLOYEE AT THE END OF THE
EMPLOYMENT TERM: In the event of voluntary termination by Employee at
the end of the Initial Employment Term, or any Extended Employment
Term, (except any termination pursuant to Subsection 12.G), Employee
shall be entitled only to those amounts that have accrued to the date
of
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termination or are expressly payable under the terms of the Company's
applicable benefit plans or are required by applicable law. The Company
may, in its sole and absolute discretion, confer such other benefits or
payments as it determines, but Employee shall have no entitlement
thereto.
E. TERMINATION BY EMPLOYER AT THE END OF THE EMPLOYMENT TERM:
In the event that Employee's employment is terminated by the Company at
the end of the Initial Employment Term or any Extended Employment Term
as a result of the Company's notice specified in Section 2 above,
Employee shall be treated as in Subsection 12.D.
F. TERMINATION BY EMPLOYER DURING THE EMPLOYMENT TERM: In the
event of termination by the Employer other than at the end of the
Initial Employment Term or Extended Employment Term, other than for
cause under Subsection 12.A and except as otherwise contemplated under
Subsection 12.G.(i),, Employee shall be entitled to two (2) year's base
salary (at Employee's then current base) payable in a lump sum in cash
upon such termination.
G. TERMINATION RELATING TO A CHANGE IN CONTROL AND FOR GOOD
REASON. If a Change of Control occurs and (i) Employee's employment is
terminated by Company within one (1) year after the Change in Control
or (ii) Employee voluntarily terminates employment, for Good Reason,
within one year after the event-giving rise to Good Reason, the Company
shall pay Employee upon such termination a lump sum in cash equivalent
to:
i. An amount equal to two and a half (2.5)
times (a) the Employee's Salary and (b) the
average of Employee's two preceding annual
incentive compensation payments; and
ii. A pro rata portion of Employee's Incentive
Compensation or other bonus through the
termination date, less applicable payroll
deductions; and
iii. Unused vacation and holiday pay through the
termination date, less applicable payroll
deductions;
a. CHANGE IN CONTROL. For purpose of this
Agreement, a "Change in Control" shall mean the
occurrence of any of the following events:
1. The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (collectively, a
"person") of Beneficial Ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of fifty (50%) percent
or more of the then outstanding shares of common
stock of the Company (collectively, the "Outstanding
Common Stock"); provided, however, that the following
shall not constitute a Change in Control:
(A) Any acquisition of the Outstanding
Common Stock directly from the
Company;
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(B) Any acquisition by the Underwriter
(as such term is defined in
Section 2(11) of the Securities
Act of 1933, as amended) for the
purpose of making a public
offering;
(C) Any acquisition by the Company,
whether or not the fifty (50%)
threshold set forth above is
exceeded in such acquisition; or
(D) Any acquisition by an employee
benefit plan (or related trust)
sponsored or maintained by the
Company or any corporation
controlled by the Company.
2. Approval by the shareholders of the
Company of (x) a reorganization, merger or
consolidation with respect to which persons who were
the shareholders of the Company immediately prior to
such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in
the election of directors of the reorganized, merged
or consolidated company's then outstanding voting
securities, or (y) the sale of all or substantially
all of the assets of the Company, unless the approved
reorganization, merger, consolidation or sale is
subsequently abandoned;
3. A change in a majority of the Company's
Board of Directors of the Company during any 24-month
period without the approval of a majority of
directors in office at the beginning of such period.
b. GOOD REASON. For purposes of this Agreement, "Good
Reason" shall mean:
(i) The assignment to the Employee of any
duties inconsistent in any material respect with the
Employee's position (including status, offices,
titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 3 of
this Agreement, or any other action by the Company
which results in a diminution in such position,
authority, duties or responsibilities, excluding for
this purpose (a) an assignment of substantially
equivalent position, authority, duties and
responsibilities, or (b) an isolated, insubstantial
and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after
receipt of written notice thereof given by the
Employee;
(ii) Any failure by the Company to comply
with any of the provisions of Sections 9 or 10 of
this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after
receipt of written notice thereof given by the
Employee;
(iii) The Company's requiring the Employee
to be based at any office or location other than the
Company's offices in Miramar or Miami,
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except for travel reasonably required in connection
with the performance of the Employee's
responsibilities hereunder; or
(iv) Any purported termination by the
Company of the Employee's employment other than as
expressly permitted by this Agreement.
H. CONFIDENTIALITY: Nothing in this Section 12 shall affect
the rights of the parties under Section 5 above.
I. PAYMENT OF SALARY AT TERMINATION. Notwithstanding anything
to the contrary, with respect to Salary only, termination of employment
by Employer or by Employee for any reason provided under Subsections
12A through 12G shall never result in payment of more than two and a
half (2.5) times the Employee's Salary.
J. PAYMENT OF ACCRUED COMPENSATION AT TERMINATION:
Notwithstanding anything to the contrary, any accrued compensation
payable to Employee, including any severance benefits, payable to
Employee at the time of his termination, may be allocated at the option
of Employee to the purchase of shares in the Company under employee
stock options granted under Subsection 9.C, to the extent permitted by
law and in accordance with the Company's Stock Option Plan.
13. EXCISE TAX PAYMENTS:
A. Notwithstanding anything contained in this Agreement to the
contrary, in the event that any payment (within the meaning of Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended or replaced
(the "Code"), or distribution to or for the benefit of the Employee,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise in connection with, or arising out
of, his employment with the Company (a "Payment" or "Payments"), would
be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Employee with respect to such
excise tax (such excise tax, interest and penalties collectively
referred to as the "Excise Tax"), then the Employee shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Employee of all such taxes (including
any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment equal to the
Excise Tax impose upon the Payments; PROVIDED, that the Employee shall
not be entitled to receive any additional payment relating to any
interest or penalties attributable to any action or omission by the
Employee in bad faith.
B. An initial determination shall be made by an accounting
firm mutually agreeable to the Company and the Employee and, if not
agreed to within ten days after the date of termination, a national
independent accounting firm selected by the Employee (the "Accounting
Firm") as whether a Gross-Up Payment is required pursuant to this
Section 13 and the amount of such Gross-Up Payment. To permit the
Accounting Firm to make the initial determination, the Company shall
furnish the Accounting Firm with all information reasonably required
for such firm to complete such determination as soon as practicable
after the date of termination, but in no event more than twenty-five
(25) days thereafter. All fees, costs and
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expenses (including), but not limited to, the cost of retaining
experts) of the Accounting Firm shall be borne by the Company and the
Company shall pay such fees, costs and expenses as they become due. The
Accounting Firm shall provide detailed supporting calculations,
reasonably acceptable both to the Company and the Employee within
thirty (30) days of the date of termination, if applicable, or such
other time as requested by the Company or by the Employee (provided the
Employee reasonably believes that any of the Payments may be subject to
the Excise Tax). The Gross-Up Payment, if any, as determined pursuant
to this Section 13(b) shall be paid by the Company to the Employee
within five (5) business days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is
payable by the Employee with respect to a Payment or Payments, it shall
furnish the Employee with an opinion reasonably satisfactory to the
Employee that no Excise Tax will be imposed with respect to any such
Payment or Payments. Any such initial determination by the Accounting
Firm of the Gross-Up Payment shall be binding upon the Company and the
Employee subject to the application of Section 13(c).
C. As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Overpayment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred upon
a "Final Determination" (as hereinafter defined) that the tax liability
of the Employee (whether in respect of the then current taxable year of
the Employee or in respect of any prior taxable year of the Employee)
will be increased by reason of the imposition of the Excise Tax on a
Payment or Payments with respect to which the Company has failed to
make a sufficient Gross-Up Payment. An Overpayment shall be deemed to
have occurred upon a "Final Determination" (as hereinafter defined)
that the Excise Tax shall not be imposed (or shall be reduced) upon a
Payment or Payments with respect to which the Employee had previously
received a Gross-Up Payment. A Final Determination shall be deemed to
have occurred when (i) in the case of an Overpayment, the Employee has
received from the applicable government tax liability authority a
refund of taxed or other reduction in his tax liability imposed as a
result of a Payment or, in the case of an Underpayment, the Employee
receives notice from a competent governmental authority that his tax
liability imposed as a result of a Payment will be increased, and (ii)
in the case of an Overpayment or an Underpayment, upon either (x) the
date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and
conclusively binds the Employee and such taxing authority, or in the
event that a claim is brought before a court of competent jurisdiction,
the date upon which a final determination has been made by such court
and either all appeals have been taken and finally resolved or the time
for all appeals have been taken and finally resolved or the time for
all appeals has expired or (y) the statute of limitations with respect
to the Employee's applicable tax return has expired. If an Underpayment
occurs, the Employee shall promptly notify the Company and the Company
shall promptly pay to the Employee an additional Gross-Up Payment equal
to the amount of the Underpayment plus an interest and penalties
imposed on the Underpayment (other than interest and penalties
attributable to any action or omission by the Employee in bad faith).
If an Overpayment occurs, the amount of the Overpayment shall be
treated as a loan by the Company to the Employee and the Employee
shall, within ten (10) business days of the occurrence of such
Overpayment, pay the Company the amount of the Overpayment, with
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interest computed in the same manner as for an Underpayment.
D. Notwithstanding anything contained in this Agreement to the
contrary, in the event it is determined that an Excise Tax will be
imposed on any Payment or Payments, the Company shall pay to the
applicable governmental taxing authorities as Excise Tax withholding,
the amount of the Excise Tax that the Company has actually withheld
from the Payment or Payments.
14. OBLIGATIONS UPON TERMINATION: In the event of any termination of
his employment, for whatever reason, Employee will promptly deliver to the
Company all physical property, discs, documents, notes, printouts, and all
copies thereof and other materials in Employee's possession or under Employee's
control pertaining to the business of the Company, including, but not limited
to, those embodying or relating to the Confidential Information (as defined in
Section 8 herein).
If Employee would like to keep certain property, such as material
relating to professional societies or other non-confidential material, upon the
termination of employment with the Company, he agrees to discuss such issues
with the Company. Where such a request does not put Confidential Information of
the Company at risk, the Company will customarily grant the request.
Upon termination of employment with the Company, Employee's obligations
under this Section 14 shall survive and the Employee shall, if requested by the
Company, reaffirm Employee's recognition of the importance of maintaining the
confidentiality of the Company's Confidential Information and reaffirm all of
the Employee's obligations set forth in this Section 14.
15. LIFE INSURANCE: The Company may, in its sole discretion, purchase
such life insurance policies as it deems necessary or appropriate, naming
Employee as the insured and the Company as beneficiary. Employee hereby agrees
to submit to any reasonable medical examination required for the purchase of
such insurance.
16. NOTICES: Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
certified mail, return receipt requested. Mailed notices shall be addressed to
the parties as follows:
If notice is to the Company, to:
AVTEAM, INC.
Miramar Park of Commerce
3230 Executive Way
Miramar, Florida 33025
Attn: Chairman, Board of Directors
with copy to:
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Baker & McKenzie
1200 Brickell Avenue, Suite 1900
Miami, Florida 33131
Attn: Noel H. Nation, Esq.
If notice is to Employee, to:
Jaime J. Levy
18111 N.W. 16th Street
Pembroke Pines, Florida 33029
Either party may change its address by written notice in accordance
with this Section 16. Notices delivered personally shall be deemed communicated
as of the dates of actual receipt; mailed notices shall be deemed communicated
as of forty-eight (48) hours after the date of mailing.
17. ARBITRATION: Any controversy between the parties involving the
construction or application of any of the terms, provisions or conditions of
this Restated Agreement or in any way connected with Employee's employment with
the Company, including but not limited to, breach of this Restated Agreement,
termination or discharge, claims of age, gender, race or disability
discrimination, sexual harassment or civil rights violations shall, within
thirty days of the written notice to the other party, be submitted to final and
binding arbitration as follows:
A. The arbitration shall be held in Broward County, Florida.
B. The arbitration shall be conducted by one arbitrator, who
is a member of the American Arbitration Association ("AAA") and in
accordance with the rules of the AAA then in effect, subject to the
specific exceptions set out in Subsection 17.C, unless both parties
agree otherwise. The arbitrator shall be chosen from a panel of persons
with knowledge of and experience in employment and employment law
issues.
C. Notwithstanding any rule of the AAA to the contrary, (l)
the parties shall be entitled to conduct discovery (i.e., investigation
of facts through deposition and other means) which shall be governed by
the Florida Rules of Civil Procedure then in effect; (2) the arbitrator
shall have all power and authority relating to such discovery as are
allowed under the Florida Rules of Civil Procedure; (3) the arbitrator
shall apply Florida substantive law; (4) at the election and at the
expense of either party, a Court Reporter may record the hearing and
such recording will be the official record of the proceeding; and (5)
the arbitrator shall specify the basis for, and the type of damage
award, if any, entered.
D. The arbitrator's authority to order discovery and enter
judgment shall be final and binding. It may be enforced through an
order of a court of competent jurisdiction. Such judgment may be
reviewed by a court only on the grounds of bias, improper conduct of
the arbitrator, abuse of discretion, or violation of public policy.
Notwithstanding the foregoing agreement to arbitrate, either
party may apply to any court of competent jurisdiction for temporary
restraining orders, preliminary injunctions,
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permanent injunctions, or other extraordinary relief, to remedy any
actual or threatened unauthorized disclosure of confidential
information or unauthorized use, copying, marketing, or distribution of
confidential information. Such application shall be made before the
arbitrator is appointed and assumes his or her responsibilities. The
seeking of injunctive relief shall not operate to prejudice the rights
of the parties to arbitrate their disputes.
18. ATTORNEYS' FEES AND COSTS: If either party fails to perform its
respective obligations under this Restated Agreement, and the other party is
thereby required to incur attorneys' fees or other fees or costs, including but
not limited to the costs of arbitration, the party so incurring such fees and
costs shall be entitled to the payment of those fees and costs by the breaching
party.
19. ENTIRE AGREEMENT: This Restated Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of Employee by the Company and contains all of the
covenants and agreements between the parties with respect to that employment in
any manner whatsoever. Each party to this Restated Agreement acknowledges that
no representations, inducements, promises, or agreements, oral or written, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Restated Agreement shall be valid or binding on either party.
20. MODIFICATIONS: Any modification of this Restated Agreement shall be
effective only if it is in writing and signed by both parties.
21. EFFECT OF WAIVER: The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this Restated
Agreement by the other party shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power at any one time or times be deemed a waiver or relinquishment of that
right or power for all or any other times.
22. PARTIAL INVALIDITY: If any provision of this Restated Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way, unless such partial invalidity materially
affects the intent of the parties.
23. GOVERNING LAW: This Restated Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
24. ASSIGNABILITY: The rights and duties of either party thereunder
shall not be assignable by either party, except that this Restated Agreement and
all rights and obligations hereunder may be assigned by the Company to, and be
assumed by, any corporation or other business entity which succeeds to all or
substantially all of the assets and business of the Company through merger,
consolidation, acquisition of assets, or other corporate reorganization.
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25. SURVIVAL: The covenants, agreements, representations and warranties
contained in or made pursuant to this Restated Agreement shall survive
Employee's termination of employment irrespective of any investigation made by
or on behalf of any party.
IN WITNESS WHEREOF, the parties have executed this Restated Agreement
effective as of the day and year first above written.
AVTEAM, INC.
By: /s/ Donald A. Graw
Donald A. Graw
President and Chief Executive Officer
EMPLOYEE:
/s/ Jaime J. Levy
Jaime J. Levy
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