EMPLOYMENT AGREEMENT
TEMPCO ENGINEERING, INC., f/k/a METAL CORPORATION, a Missouri
corporation (the "Corporation"), and ▇▇▇▇▇▇ ▇. Star ("Employee") hereby agree as
follows:
1. Employment. The Corporation hereby employs Employee, and Employee
accepts employment from the Corporation, upon the terms and conditions
hereinafter set forth.
2. Term of Employment. The Employee's employment under this Agreement
shall commence on April 1, 2001 and shall terminate on December 31, 2003 (the
"Initial Term") unless sooner terminated as herein set forth. After expiration
of the Initial Term, and subject to the termination provisions hereinafter
contained, this Agreement shall be automatically renewed as of January 1, 2004
and each January 1 thereafter (each such renewal period year being hereinafter
referred to as a "Renewal Term"); provided that neither party has given written
notice to the other party of its election not to renew at least 60 days prior to
the renewal date. (The Initial Term, together with any and all renewal Terms,
being hereinafter sometimes collectively referred to as the "Term of this
Agreement").
3. Termination of Employment.
Employee's employment with Corporation may be terminated upon the
earlier occurrence of any of the following events:
(a) Upon the termination of the business or corporate existence of the
Corporation;
(b) Upon the death of the Employee;
(c) At the Corporation's option, if Employee shall suffer a permanent
disability; (For the purposes of this Agreement, "permanent disability" means
any physical or mental impairment that renders the Employee unable for a period
of six (6) months or more to perform the essential job functions of his
position, even with reasonable accommodation, as determined by a physician
selected by the Corporation. The Employee acknowledges and agrees that he shall
voluntarily submit to a medical or psychological examination for the purpose of
determining his continued fitness to perform the essential functions of his
position whenever reasonably and in good faith requested to do so by the
Corporation's Board of Directors. Corporation shall ensure that Employee
promptly receives a copy of all reports and opinions issued as a result of such
examination. If the Corporation elects to terminate the employment relationship
on this basis, the Corporation shall notify the Employee in writing specifying
in detail the reason for the termination and concurrently provide Employee all
reports and opinions issued by medical and psychological professionals used as
the basis for the termination decision. Such termination shall become effective
thirty (30) days after the date that such notification is given, during which
time Corporation's Board of Directors shall in good faith reconsider the
termination based upon any information Employee may provide);
(d) At the Corporation's option, upon ten (10) calendar days' written
notice to Employee, in the event of any breach or default by Employee of any of
the material terms of this Agreement or of any of Employee's duties or
obligations hereunder, or in the event the Corporation determines that Employee
is not performing the duties required of him hereunder to the satisfaction of
the Corporation. In lieu of providing ten (10) calendar days' advance written
notice, the Corporation, at its sole option, may terminate the Employee's
services immediately and pay him an amount that is equivalent to ten (10)
calendar days of his salary, less any deductions required by law;
(e) At the Corporation's option, without any advance notice, in the
event that the Employee engages in material conduct which, in the opinion of the
Corporation's Board of Directors after a good faith investigation, (1)
constitutes dishonesty of any kind (including, but not limited to, any
misrepresentation of facts or falsification of records) in Employee's relations,
interactions or dealings with the Corporation or its customers; (2) constitutes
a felony; (3) potentially may or will expose the Corporation to public disrepute
or disgrace, or potentially may or will cause harm to the customer relations,
operations or business prospects of the Corporation; (4) constitutes harassment
or discrimination towards any person associated with the Corporation, whether an
employee, agent or customer, based upon that person's race, color, national
origin, sex, age, disability, religion, or other protected status; (5) reflects
disruptive or disorderly conduct, including but not limited to, acts of
violence, fighting, intimidation or threats of violence against any person
associated with the Corporation, whether an employee, agent or customer, or
possessing a weapon while on the Corporation's premises or while acting on
behalf of the Corporation; (6) is indicative of abusive or illegal drug use
while on the Corporation's premises or while acting on the Corporation's behalf;
or (7) constitutes a willful violation of any governmental rules or regulations;
or
(f) At the Employee's option, after providing the Corporation with at
least thirty (30) calendar days advance written notice of his intention to
terminate the employment relationship.
Upon termination of employment for any reason, Employee shall be entitled to
receive only the Base Salary (as that term is hereinafter defined) accrued but
unpaid as of the date of termination and shall not be entitled to additional
compensation except as expressly provided in this Agreement.
4. Duties of Employee.
(A) Employee shall serve as General Manager of the Corporation or in
such other positions of similar or higher stature and responsibility as may be
determined by the Board of Directors of the Corporation, and Employee shall
perform such duties on behalf of the Corporation, at such locations, and in such
manner as may be specified from time to time by the officers or Board of
Directors of the Corporation. Notwithstanding the foregoing, Employee shall not
be required to work at or from a location other than the Burbank, California
area for more than forty-five (45) days in any calendar year.
(B) Employee agrees to abide by and conform to all rules established by
the Corporation applicable to its employees.
(C) Employee acknowledges that he is being employed as a full-time
employee, and Employee agrees to devote so much of Employee's entire time,
attention and energies to the business of the Corporation as is necessary for
the successful operation of the Corporation and shall endeavor at all times to
improve the business of the Corporation. Employee shall not accept any business
commitments other than with the Corporation without the advance written consent
of the President of LMI Aerospace, Inc., the Parent Corporation of the
Corporation (hereinafter "Parent Corporation"), which consent shall not be
unreasonably withheld or delayed.
5. Compensation.
(A) During the term of this Agreement the Corporation shall compensate
Employee for Employee's services rendered hereunder by paying to Employee an
annual salary (the "Base Salary") of One Hundred Forty-Five Thousand and Five
Hundred Dollars ($145,500.00), less any authorized or required payroll
deductions. Beginning in January 1, 2003, Employee's Base Salary shall be One
Hundred Fifty-Four Thousand Five Hundred Dollars ($154,500). Payment of this
salary will be made in accordance with the payroll policies of the Corporation
in effect from time to time.
(B) With respect to each fiscal year of the Corporation during which
(i) the Employee is employed under the terms of this Agreement as of the last
day of such fiscal year, and (ii) the Corporation's "Annual Net Income" (as that
term is hereinafter defined) is above the baseline as shown below, and/or (ii)
the Parent Corporation's Annual Net Income (including the Corporation's) is more
than the baseline as shown below, the Corporation shall pay to Employee, in
addition to the Base Salary, an annual "Performance Bonus".
The amount of the annual Performance Bonus (if any) shall be equal to:
(1) 3% of the Corporation's Annual Net Income in excess of Three
Million Dollars ($3,000,000.00) up to a maximum bonus amount of
Forty-Eight Thousand Dollars ($48,000.00), except for year 2001
for which the maximum bonus amount is Thirty-Six Thousand Dollars
($36,000.00). In year 2001 only, Annual Net Income of the
Corporation will be based on the Corporation's Net Income earned
during the nine month period beginning April 1, 2001 and ending
December 31, 2001, annualized to 12 months and pro-rated at 75%.
In subsequent years, the Corporation's Annual Net Income will be
based on the twelve month period beginning January 1, and ending
December 31;
plus
(2) 1% of the Parent's Annual Net Income (including the Annual Net
Income of the Corporation) that is in excess of Five Million
Dollars ($5,000,000.00) up to a maximum bonus amount of
Twenty-Four Thousand Dollars ($24,000.00), except for year 2001
for which the maximum bonus amount is Eighteen Thousand Dollars
($18,000). In 2001 only, the Annual Net Income of the Parent will
be based on the Parent's Net Income earned during the nine month
period beginning April 1, 2001 and ending December 31, 2001,
annualized to 12 months and prorated at 75%. In subsequent years,
the Parent's Annual Net Income will be based on the twelve month
period beginning January 1, and ending December 31.
In the event the Corporation's Annual Net Income for any given fiscal year is
less than Three Million Dollars ($3,000,000.00), the Employee shall not be
entitled to a Corporation Performance Bonus with respect to such fiscal year. In
the event the Parent's Annual Net Income for any given fiscal year is less than
Five Million Dollars ($5,000,000.00), the Employee shall not be entitled to a
Parent Performance Bonus with respect to such fiscal year. Notwithstanding
anything contained herein to the contrary, in the event the sum of the
Employee's Corporation Performance Bonus plus the Employee's Parent Performance
Bonus with respect to a fiscal year plus the Employee's benefit under all
performance/production incentive programs of the Corporation in which the
Employee is entitled to a bonus ("Incentive Benefit") for such fiscal year
exceeds Seventy-Two Thousand Dollars ($72,000.00), the amount of the Employee's
Performance Bonus for such year shall be reduced so that the sum of the
Performance Bonus and the Incentive Benefit equals Seventy-Two Thousand Dollars
($72,000.00). For year 2001 only, the amount of the Employee's Performance Bonus
for such year shall be reduced so that the sum of the Performance Bonus and the
Incentive Benefit equals Fifty-Four Thousand Dollars ($54,000.00).
For purposes of the calculation of the Performance Bonus, the Corporation's
"Annual Net Income" means the consolidated net profit of the Corporation, for a
given fiscal year, as determined by the firm of independent certified public
accountants providing auditing services to the Corporation, using generally
accepted accounting principles consistently applied, and calculated without
regard to (a) any formula bonuses paid pursuant to employment contracts, and (b)
federal and state income tax. The Corporation shall pay to Employee any
Performance Bonus due the Employee hereunder not later than fifteen (15) days
after the receipt by the Corporation of its annual audited financial statements,
which the Corporation expects to receive within ninety (90) days after the end
of each fiscal year of the Corporation.
For purposes of the calculation of the Performance Bonus, the Parent's "Annual
Net Income" means the consolidated net profit of the Parent and its
subsidiaries, for a given fiscal year, as determined by the firm of independent
certified public accountants providing auditing services to the Parent, using
generally accepted accounting principles consistently applied, and calculated
without regard to (a) any bonus paid to the Parent's Chairman of the Board and
any formula bonuses paid pursuant to employment contracts, and (b) federal and
state income tax. The Corporation shall pay to Employee any Performance Bonus
due the Employee hereunder not later than fifteen (15) days after the receipt by
the Parent of its annual audited financial statements, which the Parent expects
to receive within ninety (90) days after the end of each fiscal year of the
Parent.
Any Performance Bonus due the Employee hereunder shall be deemed earned if
Employee is employed as of December 31 of the fiscal year notwithstanding a
later termination of employment.
(C) In addition to the Base salary and Performance Bonus (if any),
Employee shall be eligible to receive such bonus compensation as the Board of
Directors of the Corporation may authorize from time to time.
6. Expenses. During the period of Employee's employment, except as
otherwise specifically provided in this Agreement, the Corporation will pay
directly, or reimburse Employee for, all items of reasonable and necessary
business expenses approved in advance by the Corporation if such expenses are
incurred by Employee in the interest of the business of the Corporation. All
such expenses paid by Employee will be reimbursed by the Corporation upon
presentation by Employee of an itemized account of such expenditures in
accordance with the Corporation's policy for verifying such expenditures.
Employee shall retain for his own personal use any benefits earned while
traveling for business as frequent flier miles and frequent hotel stay programs.
7. Fringe Benefits.
(A) Employee shall be entitled to participate in any health, accident
and life insurance program and other benefits which have been or may be
established by the Corporation on the same basis as other salaried employees of
the Corporation at the same or similar level as Employee so long as the
Corporation continues to provide such programs and benefits to such employees at
the same or similar level. Employee acknowledges that such programs and the
benefits offered thereunder may be changed, replaced or eliminated by the
Corporation in the future, consistent with changes, replacements or eliminations
made in such programs to other salaried employees at the same or similar level
of the Corporation.
(B) Employee is expected to work as many hours as required to perform
his job and to the extent his duties are satisfied, he may be permitted to take
up to four (4) weeks vacation subject to the consent of the President of Parent
Corporation. Starting on January 1, 2002, and on each January 1st thereafter
that Employee remains employed by the Corporation pursuant to the terms of this
Agreement, Employee shall be entitled to receive an amount equal to four (4)
weeks of his then Base Salary as vacation pay. During calendar year 2002, and
during each calendar year thereafter in which Employee remains employed by the
Corporation pursuant to this Agreement, Employee's Base Salary shall be reduced
by an amount equal to the Employee's Base Salary divided by 365 days, times the
number of days of the four (4) weeks of vacation Employee takes as permitted by
this Section 7(B). Any adjustment made to the Employee's Base Salary pursuant to
this section shall be made in accordance with the payroll policies of the
Corporation in effect from time to time.
(C) The Corporation shall furnish to the Employee during the term of
his employment an automobile selected by the Corporation to aid the Employee in
the performance of his duties.
8. Documents. Upon cessation of Employee's employment with the
Corporation, for whatever reason, all company property, including, but not
limited to, all documents, records (including without limitation, customer
records), books, notebooks, records, personal notes, list of customers, and all
reproductions, duplicates, contracts and correspondence pertaining to the
Corporation and/or Parent's customers, statements or correspondence, including
copies thereof, relating to the business of the Corporation and/or Parent then
in Employee's possession, whether prepared by Employee or others, will be
delivered to and left with the Corporation, and Employee agrees not to retain
copies of the foregoing documents without the written consent of the
Corporation.
9. Remedies. In addition to any other remedies that it may have in law
or equity, each of the parties may require an accounting and repayment of all
profits, compensation, remuneration or other benefits realized, directly or
indirectly, as a result of any breach of this Agreement. No remedy conferred by
any of the specific provisions of this Agreement is intended to be exclusive of
any other remedy and each and every remedy given hereunder or now or hereafter
existing at law or in equity by statute or otherwise. The election of any one or
more remedies by a party shall not constitute a waiver of the right to pursue
other available remedies.
10. Severability. All agreements and covenants contained herein are
severable, and in the event any of them shall be held to be invalid by any court
of competent jurisdiction, this Agreement, shall continue in full force and
effect and shall be interpreted as if such invalid agreements or covenants were
not contained herein.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the Corporation and the Employee with respect to the subject matter
hereof and supersedes all prior proposals, negotiations, representations,
communications, writings, outlines and agreements between the Corporation and
the Employee with respect to the subject matter hereof, whether oral or written,
which shall be of no further force and effect. No amendments to this Agreement,
except as expressly provided herein to the contrary, may be made except by a
writing signed by both parties.
12. Waiver or Modification. No waiver or modification of this Agreement
or of any covenant, condition or limitation herein shall be valid unless in
writing and duly executed by the party to be charged therewith, and no evidence
of any waiver or modification shall be offered or received in evidence in any
proceeding, arbitration or litigation between the parties hereto arising out of
or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this Paragraph
may not be waived except as herein set forth. Failure of a party to exercise or
otherwise act with respect to any of its rights hereunder in the event of a
breach of any of the terms or conditions hereof by the other party shall not be
construed as a waiver of such breach nor prevent the other party from thereafter
enforcing strict compliance with any and all of the terms and conditions hereof.
13. Assignability. The services to be performed by Employee hereunder
are personal in nature and, therefore, Employee shall not assign Employee's
rights or delegate Employee's obligations under this Agreement, and any
attempted or purported assignment or delegation not herein permitted shall be
null and void.
14. Successors. Subject to the provisions of paragraph 13, this
Agreement shall be binding upon and shall inure to the benefit of the
Corporation and Employee and their respective heirs, executors, administrators,
legal administrators, successors and assigns.
15. Arbitration. Except as otherwise expressly provided in this
Agreement, any controversy or claim arising out of or relating to this Agreement
or any other agreement contemplated hereunder, or the interpretation or breach
hereof or thereof, or any employment-related claim or controversy ("Claims") for
which there is a legal cause of action (whether or not statutorily based) shall
be submitted to binding arbitration before the American Arbitration Association
("AAA") in Los Angeles, California in accordance with the National Rules for the
Resolution of Employment Disputes of the AAA and as authorized by California
Code of Civil Procedure Section 1280 et seq.
The Claims covered by this paragraph include, but are not limited to, claims of
wrongful or constructive discharge, claims for wages or other compensation due,
claims for any breach of contract or covenant (express or implied), all tort
claims, claims for discrimination or harassment (including, but not limited to,
race, sex, pregnancy, religion, national origin, age, marital status, or
disability), claims for benefits (except where a collectively bargained employee
benefit plan specifies that its claims procedure shall culminate in an appeal
procedure different from this one), and claims for violation of any federal,
state, or other governmental law, statute, regulation, or ordinance. This
includes the federal Age Discrimination In Employment Act, as amended, Title VII
of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act
of 1990, and the Equal Pay Act of 1963, as amended, among other anti-
discrimination statutes.
This provision does not restrict the Employee from filing a claim or charge with
any state or federal agency, for example, the Equal Employment Opportunity
Commission, state unemployment agency, state workers' compensation, where
applicable. In addition, claims for breach of written non-competition
agreements, non-solicitation agreements or confidentiality agreements are not
covered by this policy.
A single arbitrator shall decide the case and shall in writing state the
essential findings of fact and conclusions of law supporting any award. If the
parties cannot agree on selection of the arbitrator within fifteen (15) days of
the date of a written request for arbitration, the selection shall be made
pursuant to the AAA rules from the AAA's panel of arbitrators familiar with
employment disputes.
The parties incorporate by this reference California Code of Civil Procedure
Section 1283.05, which gives the parties certain discovery rights. Corporation
shall pay the arbitrator's fees and expenses, AAA administrative charges, and
hearing room charges (if any) in connection with any such arbitration.
Either Party may obtain a copy of the transcript of the proceedings at their
expense or may tape record the proceedings. In case of conflict between any
Party's tape recording and the official transcript or the arbitrator's own tape
recording, the official transcript or, if none, the arbitrator's recording shall
be the only legally controlling record. Any Party shall have the right to
request the arbitrator to correct the official transcript.
The arbitrator will be empowered to apply any applicable statute and to award
damages, reinstatement and any other relief (s)he deems just and proper which is
provided in any statute applicable to the claim, including attorney's fees.
Each party shall have the right to file a post-hearing brief. A judgment of any
court having jurisdiction may be entered on the arbitration award.
Both the Employee and the Corporation may be, but are not required to be,
represented by legal counsel at the arbitration. Each party must advise the
other in writing whether or not they intend to be represented by counsel and the
name of the counsel at least thirty (30) days in advance of the commencement of
hearing. If a party fails to provide timely notice of the party's intent to be
represented by counsel, the other party may move for a continuance of the
arbitration to seek legal representation. The failure to provide timely notice
shall not result in a loss of a party's right to have a full hearing on the
merits.
The Parties specifically covenant and agree that should any of the provisions of
this paragraph 15 be deemed too broad for such purpose, said provisions will
nevertheless be valid and enforceable to the extent necessary to effect the
parties' intention to submit their disputes to arbitration.
16. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered personally or mailed by certified or registered mail, return receipt
requested, if to the Corporation, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
LMI Aerospace, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
and, if to Employee, to:
▇▇▇▇▇▇ ▇. Star
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as may be specified by either of the parties in the
manner provided under this paragraph 16.
17. Choice of Law; Jurisdiction and Venue. This Agreement shall be
governed by and interpreted and enforced in accordance with the internal
substantive laws of the State of California, without regard to its conflicts of
law provisions or interpretations and notwithstanding the place of execution
hereof or the performance of any acts under this Agreement in any other
jurisdiction. Each party consents to the personal jurisdiction of the state and
federal courts located in the State of California for purpose of any suit,
action or other proceeding arising out of this Agreement, waives any argument
that venue in any such forum is not convenient and agrees that the venue of any
litigation initiated by either of them in connection with this Agreement shall
be in either the Superior Court of Los Angeles County, California, or the United
States District Court, the Western Division of the Central District of
California.
18. Disclosure of Existence of Agreement. To preserve their respective
rights under this Agreement, the parties may advise any third party of the
existence of this Agreement and its terms, and each party specifically releases
and agrees to indemnify and hold the other party harmless from any liability for
doing so.
19. Opportunity to Review. The Parties hereby represent and warrant
that they have had an opportunity to review this Agreement and consult their
respective attorneys about the Agreement, and understand the meaning and effect
of each paragraph of this Agreement.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION. BY
SIGNING THIS, EMPLOYEE AGREES TO ARBITRATE, RATHER THAN GO TO
COURT, TO ENFORCE ANY EMPLOYMENT RIGHTS THAT EMPLOYEE MAY HAVE.
The parties have executed this Agreement as of April 2, 2001.
TEMPCO ENGINEERING, INC. f/k/a
METAL CORPORATION
("Corporation")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇. Star
-------------------------------
▇▇▇▇▇ ▇. Star ("Employee")
