Exhibit 10.2

 

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August 8, 2019

 

Kerry Shiba

 

Re: Transaction Bonus Opportunity and Severance Agreement Amendment

 

Dear Kerry,

 

As you may know, Wesco Aircraft Holdings, Inc.  (the “Company”), expects to
commence a sale process (the “Sale Process”) that may result in a sale of all or
substantially all of the assets or equity interests of the Company (a “Company
Sale”).

 

The Company considers it essential to the operation of the Company and the
success of the Sale Process to retain you through and following the closing of a
Company Sale (the “Closing” and such date the Closing occurs, the “Closing
Date”) and desires to reward you for your contributions to the Company through
the Closing and thereafter. Therefore, the Company is pleased to offer you the
opportunity to receive a transaction bonus in the amount of $750,000.42 (the
“Transaction Bonus”), subject to the terms and conditions of this letter. 
Provided the Closing of a Company Sale occurs, fifty percent (50%) of the
Transaction Bonus will be paid to you in cash within 3 business days following
the Closing and the remaining fifty percent (50%) of the Transaction Bonus will
be paid to you in cash on the six month anniversary of the Closing Date, in each
case, less applicable taxes and withholdings and subject to your continued
employment with the Company through the applicable payment date. If, on or
following the Closing Date, your employment with the Company is terminated by
the Company without Cause or by you for Good Reason, and all or a portion of
your Transaction Bonus remains unpaid as of such date, then upon such
termination you will be paid your Transaction Bonus to the extent not already
paid to you prior to such termination.  For purposes of this letter “Cause” and
“Good Reason” will have the meaning given to such terms under the Executive
Severance Agreement the (“Severance Agreement”) previously entered into between
you and Wesco Aircraft Hardware Corp. (“Hardware”), as modified below.

 

In addition, in connection with the Sale Process, the Company has determined
that it is appropriate to modify certain provisions of the Severance Agreement
as set forth herein.  In the event the Sale Process results in a Company Sale,
the Company and Hardware each agree as follows, effective as of the Closing
Date::

 

1.                                      “Good Reason” for purposes of the
Severance Agreement (and this letter agreement) shall mean the occurrence of any
of the following events or conditions without Executive’s written consent:

 

(i)                                     a material diminution in Executive’s
authority, duties or responsibilities;

 

(ii)                                  a material diminution in Executive’s base
salary or target annual bonus level;

 

(iii)                               a material change in the geographic location
at which Executive must perform his or her duties, which shall not include a
relocation of Executive’s principal place of

 

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employment to any location within a fifty (50) mile radius of the location from
which Executive served the Company immediately prior to the relocation; or

 

(iv)                              the failure of the Company to obtain an
agreement from any successor to the Company or the Parent to assume and agree to
perform the Severance Agreement, as contemplated in Section 12(a) of the
Severance Agreement.

 

Executive must provide written notice to the Company of the occurrence of any of
the foregoing events or conditions within ninety (90) days of the occurrence of
such event or the date upon which Executive reasonably became aware that such an
event or condition had occurred.  The Company or any successor or affiliate
shall have a period of thirty (30) days to cure such event or condition after
receipt of written notice of such event from Executive.  Any voluntary
termination for “Good Reason” following such thirty (30) day cure period must
occur no later than the date that is six (6) months following the date notice
was provided by Executive.  Executive’s voluntary Separation from Service by
reason of resignation from employment with the Company for Good Reason shall be
treated as involuntary.

 

2.                                      If you incur a Qualifying Termination
(as defined in the Severance Agreement) at any time on or within 3 years
following the Closing Date, you will be entitled to receive the enhanced
severance payments and benefits set forth in Section 3(b) of the Severance
Agreement (i.e., the requirement that such termination occur within 2 years
following a Change in Control shall be increased to 3 years).

 

3.                                      The Company’s right to not extend the
Term of the Severance Agreement by delivering a written notice of non-renewal
shall no longer apply, such that the Severance Agreement shall remain in effect
indefinitely following the Closing Date.

 

Whether a particular transaction constitutes a Company Sale and any other
determinations required to be made pursuant to this letter will be made by the
board of directors of the Company (the “Board”) as constituted prior to the
Company Sale. Additionally, in the event that the Sale Process does not
ultimately result in a Company Sale, the Board may, in its sole discretion,
determine that you may still receive all or a portion of your Transaction Bonus.

 

You acknowledge that pursuant to your Severance Agreement and other agreements
previously entered into between you and the Company or its subsidiaries, you are
subject to certain restrictive covenants, including confidentiality,
non-solicitation and non-disparagement provisions. In consideration for the
Transaction Bonus and modifications to the Severance Agreement as described in
this letter, you hereby re-affirm and agree to comply with the restrictive
covenants and to be subject to a non-competition provision, which are set forth
in Exhibit A hereto (the “Restrictive Covenants”), provided, that the provisions
of this letter shall not limit or reduce the scope of any other restrictive
covenant set forth in any other agreement between you and the Company or its
subsidiaries.  All of the provisions of Exhibit A are incorporated into and made
a part of this letter agreement.

 

You acknowledge and represent to the Company that you have been represented by
licensed legal counsel of your choosing in connection with your negotiation and
execution of this letter agreement and specifically that you have been
represented by Akin Gump Strauss Hauer & Feld, LLP (your “Attorney”) in
connection herewith.   You further acknowledge that, after taking the advice of
your Attorney and with the expectation that all of the provisions of this letter
agreement, including Exhibit A, will be fully enforceable against you by the
Company or its successor, you acknowledge that you fully understand all of the
provisions of this letter agreement, including Exhibit A, are fully aware of
their legal effect, intend that they shall be enforceable against you in
accordance with their terms, have not acted in

 

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reliance upon any representations or promises made by the Company other than
those contained in writing herein, and have entered into this letter agreement
freely based on your own judgement and the advice of your Attorney.

 

This letter represents the entire agreement between you and the Company with
respect to a bonus arrangement payable in connection with a Company Sale or any
transaction or retention bonus arrangement and it supersedes any other promises,
warranties or representations with regard to this subject matter. This letter
and your right to receive the Transaction Bonus will expire and terminate, and
be of no further force or effect, if the Closing Date of a Company Sale does not
occur before the one year anniversary of the date of this letter, or earlier if
the Sale Process is discontinued or if the Board determines for any reason not
to pursue a Company Sale at any time.  The Transaction Bonus is a special
payment to you and will not be taken into account in computing the amount of
salary or compensation for purposes of determining any bonus, incentive,
severance, notice, redundancy, pension, retirement, death or other benefit under
any benefit plan or compensation arrangement of the Company.

 

Additionally, subject to the Severance Agreement and except as may otherwise be
set forth in a separate written agreement between you and the Company, your
employment relationship with the Company remains at will, meaning that either
you or the Company may terminate your employment at any time, with or without
cause or advance notice.  Nothing in this letter is intended to or should be
construed to contradict, modify or alter your employment or other service
relationship with the Company.  By accepting this letter, you hereby agree that
this letter may only be amended or modified by a written instrument signed by a
duly authorized representative of the Company.

 

Thank you for your hard work and contributions to the Company.

 

 

 

Sincerely,

 

 

 

 

 

/s/ John Holland

 

 

Name:

John Holland

 

 

Title:

Executive Vice President, Chief Legal and Human Resources Officer

 

 

 

Accepted

 

 

 

 

 

/s/ Kerry Shiba

 

 

Name: Kerry Shiba

 

 

 

 

 

 

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Exhibit A

Restrictive Covenants

 

Kerry Shiba (“Executive”) and Wesco Aircraft Holdings, Inc.  (the “Company”)
agree as set forth below. Any defined terms used in this Exhibit A not otherwise
defined herein shall have the meaning set forth in the Executive Severance
Agreement the (“Severance Agreement”) previously entered into between Executive
and Wesco Aircraft Hardware Corp.

 

1.                                      Restrictive Covenants.

 

(a)                                 Executive recognizes and agrees that in
order to assure that Executive devotes all of Executive’s professional time and
energy to the operations of the Company while employed by the Company, and that
during and after such employment in order to adequately protect the Company’s
investment in its proprietary information and trade secrets and to protect such
information and secrets and all other confidential information from disclosures
to competitors and to protect the Company from unfair competition, certain
restrictive covenants as set forth below, are necessary, reasonable and
desirable.  Executive understands and agrees that the restrictions imposed in
these covenants represent a fair balance of the Company’s rights to protect its
business and Executive’s right to pursue employment.

 

(b)                                 During the period of Executive’s service
with the Company and for a period of 2 years thereafter, the Executive will not,
directly or indirectly, (I) solicit for employment or employ (or attempt to
solicit for employment or employ), for Executive or on behalf of any sole
proprietorship, partnership, corporation, limited liability company or business
or any other person (other than the Company or any of its subsidiaries or
Affiliates), any Executive of the Company or any of its subsidiaries or
Affiliates or any person who was such an Executive during the one-year period
preceding the date of such solicitation, employment or attempted solicitation or
employment, or (II) encourage any such Executive to leave his or her employment
with the Company or any of its Subsidiaries or Affiliates.

 

(c)          Executive shall not, during the period of Executive’s service with
the Company and for a period of one year thereafter (the “Non-Compete Period”),
directly or indirectly engage in, have any equity interest in, or manage or
operate any person, firm, corporation, partnership or business (whether as a
director, officer, Executive, agent, representative, partner, security holder,
consultant or otherwise) that engages in any business which competes with any
Business (as defined below) of Wesco anywhere in the Restricted Territory (as
defined below); provided, however, that Executive shall be permitted to acquire
a passive debt or equity interest in such a business provided such business has
a class of publicly-traded securities and the securities directly or indirectly
beneficially owned by Executive do not represent more than two percent (2%) of
the outstanding interest in such business.

 

(d)         As used in Section 1(c), (A) the term “Wesco” shall include the
Company and its direct or indirect parents, if any, and its subsidiaries, and
(B) the term “Business” shall mean the business of Wesco, as such business may
be expanded or altered during the period of Executive’s employment with Wesco,
including, without limitation, the business of (i) procuring, delivering and
otherwise managing the inventory of chemicals for or on behalf of any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture, unincorporated organization or
governmental entity (or any department, agency or political subdivision
thereof), training and managing the waste produced by such individuals and
entities or providing services ancillary thereto, including process improvement,
consultation, environmental health and safety compliance or waste handling
services, or (ii) providing inventory management services or purchasing and
distributing aerospace parts, machined parts, electrical components, bearings,
and fastener installation tooling for or on behalf of any individual,
partnership, corporation, limited liability company, association, joint stock
company, trust, joint venture, unincorporated organization or governmental
entity (or any department, agency or political

 

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subdivision thereof), and (C), “Restricted Territory” means (i) any state in the
United States (other than the State of California), (ii) the United Kingdom, and
(iii) any other country in the world where Wesco conducts Business as of the
date of Executive’s termination of employment with the Company.

 

(e)                                  In the event the terms of this Section 1
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other respect,
it will be interpreted to apply only for the maximum period of time for which it
may be enforceable, in the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action. A reviewing
court of appropriate jurisdiction shall have the authority to “blue pencil” or
otherwise modify such provision so as to render it enforceable while maintaining
the parties’ original intent to the maximum extent possible. Each provision of
this letter is severable from the other provisions hereof, and if one or more
provisions hereof are declared invalid, the remaining provisions shall
nevertheless continue in full force and effect.

 

2.              Non-disclosure of Proprietary Information

 

(a)                                 Except in connection with the faithful
performance of Executive’s duties or pursuant to Section 2(b), Executive shall,
in perpetuity, maintain in confidence and shall not directly, indirectly or
otherwise, use, disseminate, disclose or publish, or use for his benefit or the
benefit of any person, firm, corporation or other entity any confidential or
proprietary information or trade secrets of or relating to the Company or any of
its subsidiaries or Affiliates (including, without limitation, intellectual
property in the form of patents, trademarks and copyrights and applications
therefor, ideas, inventions, works, discoveries, improvements, information,
documents, formulae, practices, processes, methods, developments, source code,
modifications, technology, techniques, data, programs, other know-how or
materials, owned, developed or possessed by the Company or any of its
subsidiaries or Affiliates, whether in tangible or intangible form, information
with respect to the Company’s or its subsidiaries’ or Affiliates’ operations,
processes, products, inventions, business practices, finances, principals,
vendors, suppliers, customers, potential customers, marketing methods, costs,
prices, contractual relationships, regulatory status, prospects and compensation
paid to employees or other terms of employment), or deliver to any person, firm,
corporation or other entity any document, record, notebook, computer program or
similar repository of or containing any such confidential or proprietary
information or trade secrets.  The parties hereby stipulate and agree that as
between them the foregoing matters are important, material and confidential
proprietary information and trade secrets and affect the successful conduct of
the businesses of the Company and its subsidiaries and Affiliates (and any
successors or assignees thereof).

 

(b)                                 Executive may respond to a lawful and valid
subpoena or other legal process but shall give the Company the earliest
practicable notice thereof, shall, as much in advance of the return date as
practicable, make available to the Company and its counsel the documents and
other information sought and shall reasonably assist such counsel at the
Company’s expense in resisting or otherwise responding to such process.

 

(c)                                  Nothing in this letter shall prohibit
Executive from (i) disclosing information and documents when required by law,
subpoena or court order (subject to the requirements of Section 2(b) above),
(ii) disclosing information and documents to his professional adviser(s),
(iii) disclosing the post-employment restrictions in this letter in confidence
to any potential new employer, or (iv) disclosing information that has been or
is hereafter disclosed and made public through no act or omission of Executive
in violation of this letter, any other confidentiality obligation or duty owed
to the Company or any act or omission of any person which to the knowledge of
Executive has any legally binding confidentiality obligation or duty to the
Company, or is otherwise ascertainable from public or trade sources or otherwise
generally known in the trade.

 

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3.              Non-Disparagement.  Each party to this letter (which, in the
case of the Company, shall mean its officers and the members of the Board)
agrees, during the period of Executive’s service with the Company and
thereafter, to refrain from Disparaging (as defined below) the other party and
its Affiliates, including, in the case of the Company, any of its services,
technologies or practices, or any of its directors, officers, employees, agents,
representatives or stockholders, either orally or in writing.  Nothing in this
paragraph shall preclude any party from making truthful statements that are
reasonably necessary to comply with applicable law, regulation or legal process,
or to defend or enforce a party’s rights under this letter.  For purposes of
this letter, “Disparaging” means making remarks, comments or statements, whether
written or oral, that impugn the character, integrity, reputation or abilities
of the person being disparaged.

 

4.              Inventions.  All rights to discoveries, inventions, improvements
and innovations (including all data and records pertaining thereto) related to
the business of the Company and its subsidiaries and Affiliates, whether or not
patentable, copyrightable, registrable as a trademark, or reduced to writing,
that Executive may discover, invent or originate during the period of his
service with the Company, either alone or with others and whether or not during
working hours or by the use of the facilities of the Company (“Inventions”),
shall be the exclusive property of the Company.  Executive shall promptly
disclose all Inventions to the Company, shall execute at the request of the
Company any assignments or other documents the Company may deem reasonably
necessary to protect or perfect its rights therein, and shall assist the
Company, upon reasonable request and at the Company’s expense, in obtaining,
defending and enforcing the Company’s rights therein. Executive hereby appoints
the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.

 

5.              Injunctive Relief.  It is recognized and acknowledged by
Executive that a breach of the covenants contained in Sections 1, 2, 3 and 4
will cause irreparable damage to Company and its goodwill, the exact amount of
which will be difficult or impossible to ascertain, and that the remedies at law
for any such breach will be inadequate.  Accordingly, Executive agrees that in
the event of a breach of any of the covenants contained in Sections 1, 2, 3 and
4, in addition to any other remedy which may be available at law or in equity,
the Company will be entitled to specific performance and injunctive relief
without the requirement to post bond.

 

6.              General Provisions.

 

(a)                              Governing Law and Venue.  This letter will be
governed by and construed in accordance with the laws of the United States and
the State of Delaware applicable to contracts made and to be performed wholly
within such State, and without regard to the conflicts of laws principles
thereof.  Any suit brought hereon shall be brought in the state or federal
courts sitting in Wilmington, Delaware, the parties hereby waiving any claim or
defense that such forum is not convenient or proper.  Each party hereby agrees
that any such court shall have in personam jurisdiction over it and consents to
service of process in any manner authorized by Delaware law.

 

(b)                                 Notices.  Any notice required or permitted
by this letter shall be in writing and shall be delivered as follows with notice
deemed given as indicated:  (a) by personal delivery when delivered personally;
(b) by overnight courier upon written verification of receipt; (c) by telecopy
or facsimile transmission upon acknowledgment of receipt of electronic
transmission; or (d) by certified or registered mail, return receipt requested,
upon verification of receipt.  Notice shall be sent to Executive at the address
set forth below and to the Company at its principal place of business, or such
other address as either party may specify in writing.

 

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(c)                               Survival.  The terms of this Exhibit A shall
survive termination of Executive’s employment with the Company.

 

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