EXHIBIT 10.20

 

August 16, 2004

 

Mr. John Walsh

5480 Bromely Drive

Oak Park, Ca 91377-4749

 

Dear John,

 

I am pleased on behalf of Ducommun Incorporated (the “Company”) to confirm our
offer of employment to you as President, Ducommun Technologies. This letter
documents the terms of your employment.

 

1.    Commencement

 

This offer is contingent on your reporting to work on September 6, 2004.

 

2.    Salary

 

Your base salary will be $242,000 per year, paid biweekly. Merit and salary
reviews are conducted annually.

 

3.    Incentive

 

You will be eligible, with CEO approval, to participate in Ducommun’s annual
bonus plan with a bonus target of 40% of base salary (with a maximum bonus
potential of 120% of base salary). A copy of Ducommun’s 2004 Bonus Plan is
attached to this letter. Bonuses are subject to the approval and are at the
discretion of the Compensation Committee of the Board of Directors. Your first
year of participation will be for the year ending 2004 which will be prorated
for the portion of 2004 you are employed by the Company, with bonus awards made
in the Spring of 2005. As a bonus participant, you must be employed by the
Company at the time a bonus payment is made in order to be eligible to receive a
bonus.

 

4.    Stock Option

 

A recommendation will be made to the Compensation Committee of the Board of
Directors, that a stock option award be granted to you, with an exercise price
equal to the closing price of Ducommun stock on the date of the next
Compensation Committee.

 

5.    Benefits

 

You will be eligible to participate in the following benefit programs provided
by Ducommun Technologies:

 

  •   Health, dental, disability and life insurance (effective your date of
hire)

 

  •   401(k) plan participation and Company matching contribution (currently the
matching contribution is 50% of the first 4% of salary deferred, subject to IRS
limits) (Effective the first of the month following 90 days of employment)

 

  •   Deferred compensation plan participation

 

  •   Monthly auto allowance in accordance with Company policy

 

  •   Three (3) weeks paid vacation per year in accordance with Company policy

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7.    Moving Allowance

 

The Company will reimburse you, or pay on your behalf, the usual and reasonable
out-of-pocket moving expenses you incur should you decide to relocate your
residence from Oak Park to a location in the proximity of the Company’s
corporate headquarters in Carson, California.

 

8.    Interim Housing Allowance

 

The Company will reimburse you, as an expense item, for the cost of renting an
apart-ment or condominium, for utilities and other similar expenses for interim
housing for a period not to exceed three (3) months from the commencement of
your employment. Home business communication expenses (computer, fax) will also
be included as an expense item.

 

9.    Inventions

 

You will assign all of your rights to any invention to the Company as follows:
all inventions which you developed during your working time; all inventions
which you developed using Company equipment, supplies, facilities, or trade
secret information; and all inventions developed entirely on your own time if
those inventions relate, at the time, to the Company’s business or to actual or
demonstrably anticipated research or development of the Company, or if those
inventions resulted from any work performed by you for the Company. This does
not apply to an invention of yours that is protected from being assigned to the
Company under California Labor Code Section 2870.

 

10.    Business Conduct

 

During your employment by the Company, you will not act in any manner contrary
to the best interests of the Company, its parent, subsidiary, or affiliated
companies, or its employees. During your employment by the Company you will not
engage in, or have any financial or other interest in, or render any service in
any capacity to any competitor, customer, or supplier of the Company. During
your employment by the Company you will not solicit or encourage a customer of
the Company to take its business elsewhere. During your employment by the
Company and forever thereafter, you will, upon demand (or upon termination of
your employment), immediately return all Company property and you will not
solicit or encourage a Company employee to work elsewhere or disclose or use any
trade secret or confidential information of the Company. You understand that the
term “trade secret” or “confidential information” means all materials,
chemicals, formulae, data, drawings and techniques used, tests performed,
machines operated and processes used by the Company, and includes without
limitation, all other information concerning the Company, any parent, any
subsidiary, any affiliate, any supplier, or any customer (including, but not
limited to, information regarding the peculiarities, preferences and manner of
doing business) that is not generally known to the public or to other persons.
You also agree that the remedy of law for your breach of this paragraph is
inadequate and that the Company, in addition to any other remedy, can seek
appropriate injunctive relief from an appropriate California court or
arbitrator, at its election.

 

11.    Company Policies

 

You will be subject to and will adhere to all of the Company’s policies
applicable to the Company’s employees generally, including but not limited to,
all policies relating to standards of conduct, conflicts of interest, and
compliance with the Company’s rules and obligations. You represent that you have
no agreement with or obligations to anyone or anything that would in

 

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any way conflict with any of your obligations contained in this Agreement.
Further, you will immediately notify the Company, in writing, of any other
employment or work that you accept during your employment by the Company.

 

12.    Termination of Agreement and Employment At Will

 

Your employment by the Company is at will. This means that your employment may
be terminated at any time, with or without cause, and with or without notice by
you or by the Company. Additionally, the Company can change the terms of
employment, with or without cause, and with or without notice including, but not
limited to, demotion, promotion, transfer, compensation, benefits, duties, and
location of work. This at-will relationship can only be changed by an agreement
in writing signed by the chief executive officer of the Company and approved in
writing as to form by the general counsel for Ducommun Incorporated. Any oral
statement or conduct by a supervisor or manger of the Company will not alter
your at-will employment status. Upon termination, all of the Company’s and your
obligations under this Agreement cease, other than your obligation to
immediately return all Company property, your obligations under paragraph 9, and
your obligations under paragraph 10 concerning solicitation of Company employees
and trade secrets and confidential information (all of which will forever
survive the termination, breach or expiration of this Agreement), and the
Company’s obligations to pay any unpaid, earned salary and any unpaid earned
vacation pay, and to reimburse any unpaid, properly incurred business expenses.

 

13.    Arbitration

 

Your employment by the Company is conditioned on and in consideration of your
signing a separate Arbitration Agreement (a copy of which is attached to this
letter) and returning it to me at the same time as this letter.

 

14.    Applicable Law; Savings Clause; Entire Agreement

 

This Agreement will be governed by the laws of the State of California
applicable to employment contracts. If any of the paragraphs of this Agreement
are or are held to be invalid under the laws of the State of California, this
Agreement will be performed, construed, and, if necessary, enforced to the
fullest extent possible to conform to the intentions of the parties as evidenced
by this Agreement and by all of its paragraphs, including the invalid paragraph.
Furthermore, the Company’s failure to enforce any provision of this Agreement
will not be construed as a waiver of that or any other provision and will not
prevent the Company from later enforcing that or any other provision. This
Agreement constitutes the entire agreement between the Company and you with
respect to the subject matter hereof, and supersedes all prior oral and written
agreements and all contemporaneous oral agreements.

 

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Your signature below will constitute your full acceptance of the terms and
conditions set forth in this Agreement. Please return one executed copy of this
Agreement to me no later than August 20th, 2004.

 

Sincerely,

DUCOMMUN INCORPORATED

By:

 

/s/ Sue Grove        

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Sue Grove

VP Human Resources—Shared Services

 

ACCEPTED AND AGREED:

 

/s/ John Walsh        

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John Walsh

Date:

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Attachments

 

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