Document:

EX-4.1

 Exhibit 4.1 

Wisconsin Power and Light Company 

OFFICERS’ CERTIFICATE 

Dated as of October 14, 2014 
  

 
 Setting Forth
Terms of a Series of Debt Securities 
 4.10% Debentures due 2044 

 
  

Pursuant to the Indenture 

Dated as of June 20, 1997 

 OFFICERS’ CERTIFICATE 

The undersigned, the Vice President and Treasurer and the Senior Vice President and Chief Financial Officer of Wisconsin Power and Light
Company, a Wisconsin corporation (the “Company”), hereby certify as provided below pursuant to Section 2.01 of the Indenture, dated as of June 20, 1997 (the “Indenture”), between the Company and Wells Fargo Bank,
National Association, successor, as Trustee (the “Trustee”). This Officers’ Certificate, dated October 14, 2014, is delivered, pursuant to authority granted to the undersigned by resolutions adopted on November 6, 2013 by
the Board of Directors of the Company, for the purpose of creating and setting forth the terms of a series of Securities to be issued pursuant to the Indenture. Capitalized terms not otherwise defined herein are used as defined in the Indenture.

 1. The Board of Directors of the Company has authorized the creation by the Company of one or more series of Securities under the
Indenture through one or more Officers’ Certificates, and pursuant to such authorization and in accordance with the Indenture this Officers’ Certificate is being delivered to the Trustee to establish the terms of a series of Securities as
set forth therein and herein. 
 2. The title of the Securities shall be “4.10% Debentures due 2044” (herein called the
“Debentures”). 
 3. The aggregate principal amount of the Debentures which may be authenticated and delivered under the Indenture
shall be U.S. $250,000,000, except for Debentures authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debentures as provided in Sections 2.07, 2.08, 2.13 or 9.06 of the Indenture and except for
Debentures which, pursuant to Section 2.02 of the Indenture, are deemed never to have been authenticated and delivered thereunder. Notwithstanding the foregoing limit on the aggregate principal amount of the Debentures, the Debentures may be
reopened in accordance with Section 2.01 of the Indenture. 
 4. Subject to earlier redemption, the principal of the Debentures shall be
payable in U.S. dollars on October 15, 2044. 
 5. The Debentures shall bear interest at the rate of 4.10% per annum; such interest
shall accrue from October 14, 2014 (or from the most recent interest payment date to which interest on the Debentures has been paid or provided for); the interest payment dates on which such interest shall be payable shall be April 15 and
October 15 in each year, commencing April 15, 2015; the regular record dates for the determination of Holders to whom interest is payable shall be the March 31 and September 30 before each interest payment date. Interest on the
Debentures shall be payable in U.S. dollars. 
 6. Pursuant to the Indenture, the Trustee has been appointed as the Registrar for the
Debentures. The Trustee is hereby further appointed as the initial Paying Agent and Transfer Agent of the Debentures. The principal of and interest on the Debentures shall be payable at the office of the Paying Agent, which shall initially be
located in Minneapolis, Minnesota. 

 7. The Debentures shall not be subject to any sinking fund and shall not be repurchasable or
redeemable at the option of a Holder. The Debentures shall be issuable as Registered Securities and shall not be exchangeable for Bearer Securities. 

8. Prior to April 15, 2044 (six months prior to maturity), the Debentures shall be redeemable at the option of the Company at any time in
whole or from time to time in part at a redemption price equal to the greater of (i) 100% of the principal amount of such Debentures and (ii) the sum, as determined by the Independent Investment Banker and delivered to the Trustee, of the
present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate plus 15 basis points, plus in each case accrued interest to the date of redemption; provided, however, that installments of interest on Debentures due on an interest payment date which occurs on or before any
redemption date shall be payable to the Holders of such Debentures who were registered Holders as of the close of business on the record date immediately preceding such interest payment date. 

9. On or after April 15, 2044 (six months prior to maturity), the Debentures shall be redeemable at the option of the Company at any time
in whole or from time to time in part at a redemption price equal to 100% of the principal amount of such Debentures, plus in each case accrued interest to the date of redemption; provided, however, that installments of interest on Debentures due on
an interest payment date which occurs on or before any redemption date shall be payable to the Holders of such Debentures who were registered Holders as of the close of business on the record date immediately preceding such interest payment date.

 10. The terms defined below shall, for all purposes of the Debentures under the Indenture and this Officers’ Certificate, have the
meanings specified, unless the context clearly otherwise requires or unless otherwise indicated: 
 “Business Day” means any day
other than Saturday, Sunday or a day on which Federal or State banking institutions in the city of the office of the Paying Agent is maintained are authorized or obligated by law, executive order or regulation to close. 

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as
having an actual or interpolated maturity comparable to the remaining term of the Debentures to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt
securities of a comparable maturity to the remaining term of such Debentures. 
 “Comparable Treasury Price” means, with respect
to any redemption date, (i) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 
 “Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the Company. 

  
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 “Reference Treasury Dealer” means each of J.P. Morgan Securities LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Mizuho Securities USA Inc., or their affiliates which are primary U.S. Government securities dealers and one primary U.S. Government securities dealer located in the United States (a “Primary
Treasury Dealer”) selected by the Company, and their respective successors; provided, however, that if any of the foregoing or their affiliates shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary
Treasury Dealer. 
 “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent
Investment Banker by the Reference Treasury Dealers at 3:30 pm New York time on the third Business Day preceding such redemption date. 

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity
or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. 

11. Section 4.07 of the Indenture shall apply to the Debentures. 

12. Defeasance and covenant defeasance under Article 8 of the Indenture shall be applicable to the Debentures. 

13. The Debentures shall initially be issued in whole in the form of one or more global Securities. The Depository Trust Company, a clearing
agency registered under the Securities Exchange Act of 1934, as amended (“DTC”), shall initially serve as the depositary for such global Security or Securities. For so long as DTC shall be the depositary, all Debentures shall be registered
in its name or in the name of a nominee thereof. While the Debentures are evidenced by one or more global Securities, the depositary or its nominee, as the case may be, shall be the sole Holder thereof for all purposes under the Indenture. Neither
the Company nor the Trustee shall have any responsibility or the obligation to the depositary’s participants or the beneficial owners for whom they act with respect to their receipt from the depositary of payments on the Debentures or notices
given under the Indenture. The global Security or Securities provided for hereunder shall bear such legend or legends as may be required from time to time by the depositary. 

14. Except as hereinafter described, Debentures in definitive form will not be issued. Notwithstanding the foregoing, in the event the Company
decides to discontinue the use of global Securities, any Event of Default has occurred or is continuing or if DTC is at any time unwilling, unable or ineligible to continue as depositary, and a successor depositary is not appointed by the Company
within 90 days, the Company shall issue individual Debentures in certificated form to owners of “book-entry” ownership interests in exchange for the Debentures held by DTC or its nominee, as the case may be. In such instance, an owner of a
“book-entry” ownership interest will be entitled to physical delivery of certificates equal in principal amount to such “book-entry” ownership interest and to have such certificates registered in its name. Individual certificates
so issued will be issued in denominations of $1,000 or any multiple thereof. 

  
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 15. Additional terms regarding the Debentures are as set forth in the form of the Debentures set
forth below. 
 16. The form of the Debentures shall be substantially as follows: 

  
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	No.	  	$

 WISCONSIN POWER AND LIGHT COMPANY 

[Form of 4.10% Debentures due 2044] 

CUSIP 976826BK2; ISIN: US976826BK24 
 WISCONSIN
POWER AND LIGHT COMPANY 

promises to pay to                    
                                         
                                         
                                         
                                         
                                       

or registered assigns 
 the principal sum of
                                     Dollars on
October 15, 2044 
 Interest Payment Dates: April 15 and October 15 

Dated: 
  

									
	WELLS FARGO BANK, NATIONAL ASSOCIATION	 		 	WISCONSIN POWER AND LIGHT COMPANY
	Trustee, Transfer Agent and Paying Agent	 		 		 	
		 		 		 	By:	 	  

		 		 		 	[Title of Authorized Officer]
	Authenticated:	 		 		 	
			
	 WELLS FARGO BANK, NATIONAL ASSOCIATION

Registrar
	 		 	(CORPORATE SEAL)
		 		 		 		 	  

	 	 	 		 	[Title of Authorized Officer]
	By:	 	  
	 		 		 	
		 	Authorized Signatory	 		 		 	

  
 -5- 

 WISCONSIN POWER AND LIGHT COMPANY 

4.10% Debentures due 2044 

Interest. Wisconsin Power and Light Company (the “Company”), a Wisconsin corporation, promises to pay interest on the
principal amount of this Security (as defined herein) at the rate per annum shown above. The Company will pay interest semiannually on April 15 and October 15 of each year commencing April 15, 2015. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 14, 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

Record Date. The interest payable, and punctually paid or duly provided for, on any interest payment date will, as provided in the
Indenture, be paid to the Person in whose name this Debenture is registered at the close of business, on the regular record date for such interest, which shall be the March 31 and September 30 before each interest payment date. 

Method of Payment. The Company will pay interest on the Securities to the persons who are registered holders of Securities at the close
of business on the record date for the next interest payment date, except as otherwise provided in the Indenture. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money. It may mail an interest check to a holder’s registered address.

 Securities Agents. Initially, Wells Fargo Bank National Association will act as Paying Agent, Transfer Agent and Registrar. The
Company may change any Paying Agent or Transfer Agent without notice. The Company or any Affiliate may act in any such capacity. Subject to certain conditions, the Company may change the Trustee. 

Indenture. The Company issued the securities of this series (individually a “Security” and collectively the
“Securities”) under an Indenture, dated as of June 20, 1997 (the “Indenture”), between the Company and Wells Fargo Bank National Association, successor, as Trustee (the “Trustee”). The terms of the Securities
include those stated in the Indenture and in the Officers’ Certificate establishing the Securities and those made part of the Indenture by the Trust Indenture Act of 1939, as amended. Securityholders are referred to the Indenture, the
above-referenced Officers’ Certificate and such Act for a statement of such terms. 
 Maturity; Redemption. The principal on the
Securities shall be payable on October 15, 2044. Prior to April 15, 2044 (six months prior to their maturity), the Company may redeem the Securities as a whole or in part, at the Company’s option, at a redemption price equal to the
greater of (i) 100% of the principal amount of such Securities and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption)
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 15 basis points, plus in each case accrued interest to the date of redemption. 

On or after April 15, 2044 (six months prior to their maturity), the Company may redeem the Securities as a whole or in part, at the
Company’s option, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. 

  
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 Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Securities to be redeemed at his registered address. 
 Denominations,
Transfer, Exchange. The Securities are in registered form without coupons in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Transfer Agent may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or the Indenture. 

Persons Deemed Owners. The registered holder of a Security may be treated as its owner for all purposes. 

Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the holders
of not less than a majority in aggregate principal amount of the securities of all series affected by the amendment. Subject to certain exceptions, a default on a series may be waived with the consent of the holders of a majority in principal amount
of the series. 
 Without the consent of any Securityholder, the Indenture or the Securities may be amended, among other things, to cure any
ambiguity, defect or inconsistency that does not adversely affect the rights of any Securityholder in any material respect; to provide for assumption of Company obligations to Securityholders; or to make any change that does not adversely affect the
rights of any Securityholder in any material respect. 
 Restrictive Covenants. The Securities are unsecured general obligations of
the Company limited to $250,000,000 principal amount; provided, however, that the Securities may be reopened for issuance of additional Securities in accordance with Section 2.01 of the Indenture. The Indenture does not limit other
unsecured debt. Section 4.07 of the Indenture, which limits certain mortgages and other liens, will apply with respect to the Securities. The limitations are subject to a number of important qualifications and exceptions. 

Successors. When a successor assumes all the obligations of the Company under the Securities and the Indenture, the Company will be
released from those obligations. 
 Defeasance Prior to Maturity. Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of and interest on the Securities to maturity. U.S. Government
Obligations are securities backed by the full faith and credit of the United States of America or certificates representing an ownership interest in such Obligations. 

  
 -7- 

 Defaults and Remedies. An Event of Default includes: default for 60 days in payment of
interest on the Securities; default in payment of principal on the Securities; default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities; and certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Securities may declare the principal of all the Securities to be due and payable immediately. 

Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee.

 Trustee Dealings with Company. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with those persons, as if it were not Trustee. 
 No Recourse
Against Others. A director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 

Authentication. This Security shall not be valid until authenticated by a manual signature of the Registrar. 

Abbreviations. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors Act), and U/T/M/A (=Uniform Transfers to Minors Act). 

The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture and the Officers’
Certificate, which contains the text of this Security. Requests may be made to: Corporate Secretary, Wisconsin Power and Light Company, 4902 North Biltmore Lane, Madison, Wisconsin 53718. 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 

  
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 ASSIGNMENT FORM 

To assign this Security, fill in the form below: 

I or we assign and transfer this Security to
                                         
                                         
                                         
       
  
  

 
  
  

 
  

 
 (Print or type assignee’s name, address and zip
code) 
 (Insert assignee’s soc. sec. or tax I.D. no.) 

and irrevocably appoint
                                 agent to transfer this Security on the books of
the Company. The agent may substitute another to act for him. 
  

					
	Date:                     ,         	  	Your signature:	 	  

			
		  		 	  

 (Sign exactly as your name appears on the face of this Security) 

 

	
	Signature Guaranteed:
	
	  

  
 -1- 

 IN WITNESS WHEREOF, we have set our hands as of the day and year first above written. 

 

			
	WISCONSIN POWER AND LIGHT COMPANY
		
	By:	 	 /s/ Thomas L. Hanson

		 	Thomas L. Hanson
		 	Senior Vice President and Chief Financial Officer
		
	By:	 	 /s/ John E. Kratchmer

		 	John E. Kratchmer
		 	Vice President and Treasurer

 [Signature Page to WPL Officers’ Certificate (Pursuant to the Indenture)]Exhibit 10.8

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made as of September 15, 2014, by and between KLX Inc., a Delaware corporation (the “Company”), and Amin J. Khoury (“Executive”).  This Agreement shall become effective as of the Effective Date (as defined below) and if the Effective Date does not occur or the spin-off of the Company by B/E Aerospace, Inc., a Delaware corporation (“B/E”), is abandoned, this Agreement shall be null and void ab initio and will have no force or effect.

 

WHEREAS, Executive, having provided services to B/E since August 1, 1987, has agreed to commence providing services to the Company contingent upon consummation of the distribution of the shares of the Company to the shareholders of B/E (the date of such distribution, the “Effective Date”), and the Company wishes to procure such services; and

 

WHEREAS, the board of directors of B/E has determined that it is in the best interests of its shareholders that Executive become Chairman and Chief Executive Officer of the Company as of the Effective Date; and

 

WHEREAS, Executive and the Company wish to enter into this Agreement that sets forth the terms and conditions of his employment with the Company.

 

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties agree as follows:

 

1.           Arrangement.  Executive shall provide to the Company, and the Company shall accept from Executive, the services set forth in Section 3.2 below, subject to the terms and conditions set forth in this Agreement.

 

2.           Term.  Subject to Section 5 hereof, the Company agrees to employ Executive, and Executive agrees to be employed by the Company, in each case pursuant to this Agreement, for a period commencing on the Effective Date and ending on the third anniversary of the Effective Date (the “Initial Term”); provided, however, that the period of Executive’s employment pursuant to this Agreement shall be automatically extended for successive one-year periods thereafter (each, a “Renewal Term”), in each case unless either party to this Agreement provides the other party with written notice that such period shall not be so extended at least ninety (90) days in advance of the expiration of the Initial Term or the then-current Renewal Term, as applicable (the Initial Term and any Renewal Term, collectively, the “Employment Term”).  Each additional one-year Renewal Term shall be added to the end of the next scheduled expiration date of the Initial Term or Renewal Term, as applicable, as of the first day after the last date on which notice may be given pursuant to the preceding sentence.

 

3.             Capacity, Services and Performance.

 

3.1           Capacity.  Executive shall serve the Company as its Chairman of the Board of Directors of the Company (the “Board”) and Chief Executive Officer, or in such other Board or executive capacity as the Board may designate from time to time, but only upon agreement with Executive.

 

3.2           Services.  In the capacity set forth in Section 3.1 above, Executive shall be retained by the Company and shall perform such duties and responsibilities on behalf of the Company as Executive and the Board shall by mutual agreement from time to time determine.

 

3.3           Performance.  During the Employment Term, Executive shall use his business judgment, skill and knowledge to the advancement of the Company’s interests and to the discharge of his

 

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duties and responsibilities hereunder; provided, however, that Executive shall be required only to devote so much time as Executive determines is reasonably necessary to discharge his duties as Chairman of the Board and Chief Executive Officer, and, subject to the provisions of Section 5 below, Executive may engage in other business activities during the Employment Term, including, without limitation, serving as Executive Chairman of B/E, as a member of the board of directors of and as a consultant to B/E.

 

4.             Compensation and Benefits.

 

4.1           Salary.  Effective as of the Effective Date, and during the Employment Term, Executive shall receive an annual salary (the “Salary”) of one million dollars ($1,000,000) during each year of the Employment Term.  The Salary shall be reviewed annually and may be adjusted upward (but not downward) by the Board or the Compensation Committee of the Board (the “Compensation Committee”) in its discretion.

 

4.2           Bonuses.  Executive may receive bonuses from the Company when, as and if determined from time to time by the Compensation Committee, with the target annual incentive opportunity for Executive to be no less than one hundred and seventy-five percent (175%) of Executive’s then current Salary (“Target Bonus”).  Any such bonuses paid to Executive shall be in addition to the Salary then in effect.  The incentive bonus shall be paid in accordance with Company policy, but in no event later than March 15th of the year following the year in respect of which Executive earned such bonus.

 

4.3           Benefits.   Except to the extent equivalent benefits are provided by B/E (including post-retirement benefits), during the Employment Term, Executive shall participate in all employee benefit plans, life insurance plans, disability income plans, incentive compensation plans and other benefit plans, as may be from time to time in effect for executives of the Company.  In addition, Executive shall be entitled to all rights and benefits pursuant to the Company’s travel policy, which shall be no less favorable for Executive than his rights and benefits pursuant to B/E’s travel policy as of July 1, 2014.

 

4.4           Business Expenses.  The Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by him during the Employment Term in the performance of his services for the Company.

 

4.5           Equity Incentive Compensation.  So long as employed by the Company, Executive shall be eligible to participate in any applicable equity incentive compensation program of the Company on the terms set forth by the Compensation Committee in its sole discretion, which program may include stock options, restricted stock awards or units (“Equity Awards”).  The grant date fair value of the annual Equity Awards granted to Executive (determined in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, or any successor promulgation) shall be no less than two hundred and fifty percent (250%) of Executive’s then current Salary.

 

4.6         Initial Equity Grant.  On the thirtieth day (30th) following the Effective Date (and if the stock of the Company is not traded on such date, the next trading day), Executive shall be granted Equity Awards with respect to Company common stock with a grant date fair value of fifteen million dollars ($15,000,000) (determined in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, or any successor promulgation) (the “Initial Grant”).  The Initial Grant shall be granted (i) one-half in stock options to acquire Company common stock that vest ratably on each of the first three (3) anniversaries of the Effective Date and (ii) one-half in restricted stock units, (A) three-quarters of which vest ratably on each of the first three (3) anniversaries of the Effective Date and (B) one-quarter of which vest based on the achievement of reasonable performance goals to be determined by the Company’s Board or the Compensation Committee, in

 

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consultation with management of the Company, prior to the Effective Date.  Prior to the grant date of the Initial Grant, Executive shall have the opportunity to make an election to defer settlement of the restricted stock units granted as part of the Initial Grant pursuant to the terms set forth in the SERP (as defined below); provided, that any election to defer settlement must be compliant with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and with the Company’s stock ownership policies.  All other terms and conditions shall be established by the Company’s Board or the Compensation Committee prior to the Effective Date.

 

4.7         Retirement Compensation.  The Company shall establish a deferred compensation plan (“SERP”) that is substantially similar to the B/E 2010 Deferred Compensation Plan, including allowing for the deferral of Equity Awards thereunder, on or as soon as practicable following the Effective Date.  On the ninetieth (90th) day following the Effective Date and on a quarterly basis thereafter during the Employment Term, the Company will make a tax deferred contribution to the SERP (the “Retirement Contribution”) on behalf of Executive equal to twenty-five percent (25%) of the Salary in effect as of the date of such contribution.  Each Retirement Contribution shall be allocated to Executive’s retirement account under the SERP, shall be fully vested on the date that such Retirement Contribution is made and shall otherwise be subject to the terms and conditions of the SERP.

 

5.             Proprietary Rights and Non-Competition.      Executive acknowledges that the Company is engaged in a continuous program of research, development and production in connection with its business, present and future, and hereby covenants as follows:

 

5.1           Confidentiality.  Executive will maintain in confidence and will not disclose or use, either during or after the Employment Term, any proprietary or confidential information or know-how belonging to the Company (“Proprietary Information” hereinafter defined), whether or not in written form, except to the extent required to perform duties on behalf of the Company.  For purposes of this Agreement, “Proprietary Information” shall mean any information, not generally known to the relevant trade or industry, which was obtained from the Company, or which was learned, discovered, developed, conceived, originated or prepared by Executive in connection with this Agreement.  Such Proprietary Information includes, without limitation, software, technical and business information relating to the Company’s inventions or products, research and development, production processes, manufacturing and engineering processes, machines and equipment, finances, customers, marketing and production and future business plans, information belonging to customers or suppliers of the Company disclosed incidental to Executive’s performance under this Agreement, and any other information which is identified as confidential by the Company, but only so long as the same is not generally known in the relevant trade or industry.

 

5.2             Inventions.

 

5.2.1           Definition of Inventions.  For purposes of this Agreement, “Inventions” shall mean any new or useful art, discovery, contribution, finding or improvement, whether or not patentable, and all related know-how.  Inventions shall include, without limitation, all designs, discoveries, formulae, processes, manufacturing techniques, semiconductor designs, computer software, inventions, improvements and ideas.

 

5.2.2           Disclosure and Assignment of Inventions.  Executive will promptly disclose and describe to the Company all Inventions which he may solely or jointly conceive, develop, or reduce to practice during the Employment Term (i) which relate at the time of conception, development, or reduction to practice of the Invention to the Company’s business or actual or demonstrably anticipated research or development, (ii) which were developed, in whole or in part, on the Company’s time or with the use of any of the Company’s equipment, supplies, facilities or trade secret information, or (iii) which

 

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resulted from any work performed by Executive for the Company (the “Company’s Inventions”).  Executive hereby assigns to the Company all of his right, title and interest world-wide in and to the Company’s Inventions and in all intellectual property rights based upon the Company’s Inventions; provided, however, that Executive does not assign or agree to assign any Inventions, whether or not relating in any way to the Company’s business or demonstrably anticipated research and development, which were made by him prior to the date of this Agreement, or which were developed by him independently during the Employment Term and not under the conditions stated in subparagraph (ii) above.

 

5.3           Documents and Materials.  Upon termination of this Agreement or at any other time upon the Company’s request, Executive will promptly deliver to the Company, without retaining any copies, all documents and other materials furnished to him by the Company (other than personal copies of documents relating to Executive’s employment terms), prepared by him for the Company or otherwise relating to the Company’s business, including, without limitation, all written and tangible material in his possession incorporating any Proprietary Information.

 

5.4           Competitive Employment.  During the Employment Term and for a period of two (2) years thereafter (collectively, the “Restricted Term”), Executive will not engage in any employment, consulting, or other activity in any business directly competitive with the Company without the Company’s written consent, which consent shall not be unreasonably withheld; provided, however, that nothing in this Section 5.4 shall preclude Executive from serving as an employee or director of B/E, a consultant for B/E, a director of any other corporation, or a partner or investor in a private equity firm.

 

5.5           Non-Solicitation.  During the Restricted Term, Executive will not solicit or encourage, or cause others to solicit or encourage, any employees of the Company to terminate their employment with the Company.

 

5.6           Acts to Secure Proprietary Rights.

 

5.6.1           Further Acts.  Executive agrees to perform, during and after the Employment Term, all acts deemed necessary or desirable by the Company to permit and assist it, at its expense, in perfecting and enforcing the full benefits, enjoyment, rights and title throughout the world in the Company’s Inventions.  Such acts may include, without limitation, execution of documents and assistance or cooperation in the registration and enforcement of applicable patents and copyrights or other legal proceedings.

 

5.6.2           Appointment of Attorney-In-Fact.  In the event that the Company is unable, for any reason whatsoever, to secure Executive’s signature to any lawful and necessary document required to apply for or execute any patent, copyright or other applications with respect to any of the Company’s Inventions (including improvements, renewals, extensions, continuations, divisions or continuations in part thereof), Executive hereby irrevocably appoints the Company and its duly authorized officers and agents as his agents and attorneys-in-fact to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other rights thereon with the same legal force and effect as if executed by him, intending hereby to create a so-called “durable power” which will survive any subsequent disability.

 

5.7           No Conflicting Obligations.  Executive’s performance of this Agreement does not breach and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by him.

 

5.8           Corporate Opportunities.  Executive agrees that during the Employment Term, he will

 

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first present to the Board, for its acceptance or rejection on behalf of the Company, any opportunity to create or invest in any company which is or will be involved in the distribution of aerospace consumables products and logistics services or any provider of technical services and associated rental equipment and logistics to the energy sector, which comes to his attention and in which he, or any of his affiliates, might desire to participate.  If the Board rejects the same or fails to act thereon in a reasonable time, Executive shall be free to invest in, participate or present such opportunity to any other natural person, corporation, limited liability company, limited or general partnership, or any other entity (each, a “Person”).

 

5.9           Specific Performance.  Executive acknowledges that a breach of any of the promises or agreements contained herein could result in irreparable and continuing damage to the Company for which there may be no adequate remedy at law, and the Company shall be entitled to seek injunctive relief and/or a decree for specific performance.

 

6.             Termination and Change of Control.

 

6.1           Termination Date; Termination or Resignation other than Death. Incapacity or in connection with a Change of Control or Good Reason.

 

6.1.1           Termination Date.  The term “Termination Date” shall mean the date on which Executive incurs a Separation from Service (as defined below) with the Company and its subsidiaries and affiliates for any reason.

 

6.1.2           Termination by Executive.  If Executive resigns his employment with the Company for any reason other than (i) death pursuant to Section 6.2, (ii) Incapacity pursuant to Section 6.3, or (iii) Good Reason pursuant to Section 6.4.3, then on the Termination Date, Executive shall receive payment of (A) any accrued and unpaid Salary and benefits through the Termination Date and (B) any earned but unpaid bonuses payable to Executive as determined by the Compensation Committee for any fiscal periods of the Company ending prior to the Termination Date.

 

6.1.3           Termination by the Company.  If the Company terminates Executive’s employment hereunder for any reason other than (i) death pursuant to Section 6.2 or (ii) Incapacity pursuant to Section 6.3then on the Termination Date, Executive shall receive payment of (A) any accrued and unpaid Salary and benefits through the Termination Date, (B) any earned but unpaid bonuses payable to Executive as determined by the Compensation Committee for any fiscal periods of the Company ending prior to the Termination Date, (C) a lump-sum amount equal to two (2) times the sum of Executive’s (i) Salary and (ii) Target Bonus, in each case at the rates in effect on the Termination Date, and (D) any Equity Awards granted to Executive that would not vest on or prior to the Termination Date shall vest and be exercisable immediately, and, notwithstanding any termination of employment provisions set forth in the applicable agreement or related plan, all Equity Awards shall continue to be exercisable until their original stated expiration date.

 

6.2           Death.

 

6.2.1   Executive’s employment hereunder shall terminate upon his death.  In such event, the Company shall, within thirty (30) days following the date of death, pay to such Person as Executive shall have designated in a notice filed with the Company, or if no such Person shall have been designated, to his estate, a lump-sum payment equal to two (2) times the sum of Executive’s (i) Salary and (ii) Target Bonus, in each case at the rates in effect on the Termination Date.

 

6.2.2    The Company shall, within thirty (30) days following Executive’s date of death, also pay to such Person as Executive shall have designated in a notice filed with the Company, or if no

 

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such Person shall have been designated, to his estate, a lump-sum amount equal to (i) any accrued and unpaid Salary and benefits through his date of death, and (ii) any earned but unpaid bonuses payable to Executive as determined by the Compensation Committee for any fiscal periods of the Company ending prior to the date of death.

 

6.2.3    Upon Executive’s death, any Equity Awards granted to Executive that would not vest on or prior to the Termination Date shall vest and, if applicable, be exercisable immediately and, notwithstanding any termination of employment provisions set forth in the applicable agreement or related plan, all Equity Awards shall continue to be exercisable until their original stated expiration date.

 

6.3           Incapacity.  If, in the reasonable judgment of the Compensation Committee, as a result of Executive’s incapacity due to a medically determinable physical or mental illness, Executive shall have been absent from his full-time duties as described hereunder for the entire period of twelve (12) consecutive months (“Incapacity”), Executive’s employment shall terminate at the end of the twelve (12)-month period as provided in this Section 6.3.  In such event:

 

(i)           the Company shall give prompt notice to Executive of any such termination;

 

(ii)        the Company shall pay to Executive within thirty (30) days following the Termination Date, a lump-sum payment equal to two (2) times the sum of Executive’s (A) Salary and (B) Target Bonus, in each case at the rates in effect on the Termination Date;

 

(iii)       the Company shall pay to Executive within ten (10) business days after the Termination Date a lump-sum amount equal to (A) any accrued and unpaid Salary and benefits through the Termination Date and (B) any earned but unpaid bonuses payable to Executive as determined by the Compensation Committee for any fiscal periods of the Company ending prior to the Termination Date; and

 

(iv)           any Equity Awards granted to Executive that would not vest on or prior to the Termination Date shall vest and, if applicable, be exercisable immediately and, notwithstanding any termination of employment provisions set forth in the applicable agreement or related plan, such Equity Awards shall continue to be exercisable until their original stated expiration date.

 

Any dispute between the Compensation Committee and Executive with respect to Executive’s Incapacity shall be settled by reference to a competent medical authority mutually agreed to by the Compensation Committee and Executive or his personal representative, whose decision shall be binding on all parties.

 

6.4           Change of Control; Good Reason; Definitions.

 

6.4.1           Change of Control.  If a “Change of Control” of the Company occurs, the Company will be obligated as provided in this Section 6.4.  For purposes of determining the Company’s obligations under this Section 6.4, the date on which a Change of Control is effective shall be referred to as the “Change of Control Date.”  The payments described in Section 6.4.2 shall be made on the Change of Control Date.

 

6.4.2           Change of Control.   If a Change of Control occurs during the Employment Term, Executive’s employment shall be terminated as of the Change of Control Date and the Company or its successor shall pay to Executive:

 

(i)           any accrued and unpaid Salary and benefits through the Change of Control Date;

 

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(ii)           any earned but unpaid bonuses payable to Executive for any fiscal periods of the Company ending prior to the Change of Control Date;

 

(iii)           a lump-sum amount equal to two (2) times the sum of Executive’s (A) Salary and (B) Target Bonus, in each case at the rates in effect on the Change of Control Date; and

 

(iv)           any Equity Awards granted to Executive that would not vest on or prior to the Change of Control Date shall vest and be exercisable immediately upon the date immediately preceding the Change of Control Date, and, notwithstanding any termination of employment provisions set forth in the applicable agreement or related plan, all Equity Awards shall continue to be exercisable until their original stated expiration date.

 

6.4.3           Good Reason.  If Executive resigns his employment at anytime for Good Reason, then the Company or its successor shall pay/provide to Executive:

 

(i)           any accrued and unpaid Salary and benefits through the Termination Date, as such term is defined in Section 6.1.1, above;

 

(ii)           any earned but unpaid bonuses payable to Executive for any fiscal periods of the Company ending prior to the Termination Date;

 

(iii)         a lump-sum amount equal to two (2) times the sum of Executive’s (A) Salary and (B) Target Bonus, in each case at the rates in effect on the Termination Date; and

 

(iv)          any Equity Awards granted to Executive that would not vest on or prior to the Termination Date shall vest and be exercisable immediately, and, notwithstanding any termination of employment provisions set forth in the applicable agreement or related plan, all Equity Awards shall continue to be exercisable until their original stated expiration date.

 

The payments described in this Section 6.4.3 shall be made on the Termination Date.

 

6.4.4           Definitions.

 

(i)           For purposes of this Agreement, a “Change of Control” means:

 

(A)           Individuals who, as of the Effective Date constitute the Board (the “Incumbent Board “) cease for any reason to constitute at least a majority of the Board, provided that any Person becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act) shall be, for purposes of this Agreement, considered as though such Person were a member of the Incumbent Board;

 

(B)           a transaction or other event occurs such that any Person or Persons acting as a group acquires ownership of stock of the Company that, together with stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company;

 

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(C)           a transaction or other event occurs such that any one Person or group acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such Person or group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or

 

(D)           a transaction or other event occurs such that any one Person or group acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such Person or group) ownership of assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that no acquisition of ownership of the assets of the Company shall be deemed a Change of Control if the acquiring Person or group is:

 

(1)         A stockholder of the Company in exchange for or with respect to its stock;

 

(2)         Any Majority Owned Entity, as defined below, of the Company;

 

(3)         A Person or group of which the Company is a Majority Owned Entity; or

 

(4)         A Majority Owned Entity of any Person or group described by (3), above.

 

(ii)           For the purposes of this Section 6.4.4, Persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as the result of the same public offering.  However, Persons will be considered to be acting as a group if they are owners of a Person that enters into a merger, consolidation, purchase or acquisition of stock or assets or similar business transaction with the Company.

 

(iii)           For the purposes of this Section 6.4.4, a “Majority Owned Entity” of any Person is any entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by such Person.

 

(iv)           A Change of Control shall occur on the effective date of any event specified in Section 6.4.4(i) above.  In connection with any determination of ownership for purposes of Section 6.4.4(i) above, the attribution rules of Section 318(a) of the Code shall apply.

 

(v)           For purposes of this Agreement, “Good Reason” means:

 

(A)           Any decrease in Executive’s Salary or a failure by the Company to pay any material compensation due and payable to Executive in connection with his employment;

 

(B)           Any change in Executive’s responsibilities, positions, duties, status, title or reporting relationships;

 

(C)           Executive ceasing to be the Chief Executive Officer of the Company;

 

(D)           Requiring Executive to be based at any office or location other than Executive’s principal place of employment; or

 

(E)           A material breach by the Company of any term of this Agreement;

 

provided that Executive has given notice thereof to the Company and the Company has not cured the Good Reason within thirty (30) days after receiving such notice.

 

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6.5          280G Matters.

 

6.5.1           Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, distribution, benefit, equity-based or other compensation or other transfer or action by the Company to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to an excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with respect to any such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Accounting Firm (as defined below) shall, in consultation with Executive’s legal counsel or other advisor designated by Executive (“Executive’s Advisor”), calculate whether to reduce any of the Payments to Executive so that the Parachute Value (as defined below) of all Payments to Executive, in the aggregate, equals the applicable Safe Harbor Amount (as defined below). Payments shall be so reduced only if the Accounting Firm determines, subject to the approval of Executive’s Advisor, with such approval not to be unreasonably withheld or delayed, that Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Payments were so reduced.

 

6.5.2   If the Accounting Firm determines that the aggregate Payments to Executive should be reduced so that the Parachute Value of all Payments to Executive, in the aggregate, equals the applicable Safe Harbor Amount, and Executive’s Advisor approves such determination, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm and approved by Executive’s Advisor under this Section 6.5 shall be binding upon the Company and Executive and shall be made as soon as reasonably practicable and in no event later than 15 days following the date of Executive’s termination of employment.

 

6.5.3       The reduction contemplated by this Section 6.5, if applicable, shall be made by reducing payments and benefits (to the extent such amounts are considered Payments) under the following sections in the following order: (i) any Payments as a result of the acceleration of the vesting of performance-based Equity Awards pursuant to Section 6.4.2(iv), (ii) any Payments under Section 6.4.2(iii)that are “parachute payments” within the meaning of Section 280G of the Code,(iii) any other cash Payments that are “parachute payments” that would be made upon a Change of Control, beginning with payments that would be made last in time and (iv) any Payments as a result of accelerated vesting of Equity Awards for which the amount considered contingent on the change in ownership or control is determined in accordance with Treasury Regulation 1.280G-1, Q&A 24(c).

 

6.5.4       As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement that should not have been so paid or distributed (each, an “Overpayment”) or that additional amounts that will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed (each, an “Underpayment”), in each case consistent with the calculation of the applicable Safe Harbor Amount hereunder.   In the event that the Accounting Firm, based on the assertion of a deficiency by the Internal Revenue Service against the Company or Executive which the Accounting Firm believes, and Executive’s Advisor agrees, has a high probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of Executive shall be repaid by Executive to the Company; provided, however, that (i) no such repayment shall be required if and to the extent such deemed repayment would not either reduce the amount on which Executive is subject to tax under Sections 1 or  4999 or generate a refund of such taxes; and (ii) to the extent such repayment would generate a refund of such taxes, Executive shall only be required to pay to the Company the Overpayment less the amount of tax to be

 

9

 

refunded and to transfer the refund of such taxes to the Company when received. In the event that the Accounting Firm, based on controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

 

6.5.5       All fees and expenses of the Accounting Firm in implementing the provisions of this Section 6.5 shall be borne by the Company, and the Company shall reimburse Executive for all reasonable advisory fees incurred with respect to this Section 6.5(including for any services provided by Executive’s Advisor) and any legal and accounting fees incurred with respect to disputes related thereto (including for any services provided by Executive’s Advisor).

 

6.5.6       In connection with making determinations under this Section 6.5, the Accounting Firm shall take into account the value of any reasonable compensation for services to be rendered by Executive before or after the Change of Control, including any agreement not to render services to competitors pursuant to the non-competition provisions applicable to Executive under Section 5of this agreement and any other non-competition provisions that may apply to Executive, and the Company shall cooperate in the valuation of any such services, including any non-competition provisions.

 

6.5.7    The following terms shall have the following meanings for purposes of this Section 6.5:

 

(A)       “Accounting Firm” shall mean a mutually agreed upon nationally recognized accounting firm (a “Big Four” accounting firm) that is not serving as accountant or auditor for the Company or the individual, entity or group effecting the Change of Control.

 

(B)       “Net After-Tax Receipt” shall mean the Present Value of a Payment net of all taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the Code and under applicable state, local, and foreign laws, determined by applying the highest marginal rate under Section 1 of the Code and under state, local, and foreign laws that applied to Executive’s taxable income for the immediately preceding taxable year, or such other rate as such Executive shall certify, in Executive’s sole discretion, as likely to apply to Executive in the relevant tax year.

 

(C)       “Parachute Value” of a Payment shall mean the present value as of the date of the change in control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

 

(D)       “Present Value” of a Payment shall mean the economic present value of a Payment as of the date of the change in control for purposes of Section 280G of the Code, as determined by the Accounting Firm using the discount rate required by Section 280G(d)(4) of the Code.

 

(E)        “Safe Harbor Amount” means (x) 3.0 times Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code, minus (y) $1.00.

 

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7.           Withholding. All payments made by the Company under this Agreement shall be reduced by any amounts in respect of income, social security, FICA and other similar taxes at the then-prevailing rates required to be withheld by the Company under applicable law.

 

8.           Indemnification.   To the maximum extent permitted under Delaware law as from time to time in effect, and subject to any mandatory exclusion of indemnification under Delaware law applicable to the indemnification of Executive under this Section 8, the Company hereby agrees to indemnify Executive and hold him harmless from, against and in respect of any and all damages, deficiencies, actions, suits, proceedings, demands, assessments, judgments, claims, losses, costs, expenses, obligations and liabilities arising from or related to the performance of the services under this Agreement by  Executive.

 

9.           Legal Fees.   In the event of any litigation, dispute or contest arising from a breach of this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred in connection with such litigation, dispute or contest, including without limitation, reasonable attorneys’ fees, disbursement and costs, and experts’ fees and costs.

 

10.          Unfunded Status.  This Agreement is intended to constitute an unfunded plan for incentive compensation.  Nothing contained herein shall give Executive any rights that are greater than those of a general unsecured creditor of the Company.  In its sole discretion, the Compensation Committee may authorize the creation of trusts, acquisition of life insurance policies or other arrangements to meet the obligations created under this Agreement.

 

11.           Section 409A.

 

11.1           If any amounts that become due under Section 6 of this Agreement constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, payment of such amounts shall not commence until Executive incurs a “Separation from Service” (as defined below) if and only if necessary to avoid accelerated taxation or tax penalties in respect of such amounts.

 

11.2           Notwithstanding any provision of this Agreement to the contrary, if Executive is a “Specified Employee” (as defined below) he shall not be entitled to any payments upon a Separation from Service until the earlier of (i) the date which is the first (1st) business day following the date that is six (6) months after Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death.  The Company shall establish a trust pursuant to Rev. Proc. 92-64, promulgated under subpart E, part I, subchapter J, chapter 1, subtitle A of the Code, as modified by Notice 2000-56, and fund any such payments that are deferred pursuant to this Section 11.2 that otherwise would be immediately payable to  Executive.  The provisions of this Section 11.2 shall only apply if required to comply with Section 409A of the Code.

 

11.3           For purposes of this Agreement, “Separation from Service” shall have the meaning set forth in Section 409A(a)(2)(A)(i) of the Code and determined in accordance with the default rules under Section 409A of the Code.  “Specified Employee” shall have the meaning set forth in Section 409A(a)(2)(B)(i) of the Code, as determined in accordance with the uniform methodology and procedures adopted by the Company and then in effect.

 

11.4           It is intended that the terms and conditions of this Agreement comply with Section 409A of the Code.  If any provision of this Agreement contravenes any regulations or Treasury guidance promulgated under Section 409A of the Code, or could cause any amounts or benefits hereunder to be subject to taxes, interest and penalties under Section 409A of the Code, this Agreement or any provision hereof may be reformed by Executive, subject to the consent of the Company (which consent shall not be 

 

11

 

unreasonably withheld) to:  (i) comply with, or avoid being subject to, Section 409A of the Code, (ii) avoid the imposition of taxes, interest and penalties under Section 409A of the Code, and/or (iii) maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A of the Code, provided, however, that no such amendment shall have the effect of reducing the amount of any payment or benefit payable to Executive pursuant to this Agreement.

 

11.5           Anything in this Agreement to the contrary notwithstanding, no reimbursement payable to Executive pursuant to any provisions of this Agreement or pursuant to any plan or arrangement of the Company or its subsidiary or affiliate covered by this Agreement shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, except to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code.  No amount reimbursed during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year.

 

12.           Waiver.  Executive’s or the Company’s failure to insist upon strict compliance with any provision hereof or any other provision of this Agreement or the failure to assert any right that Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.  Similarly, the waiver by any party hereto of a breach of any provision of this Agreement by the other party will not operate or be construed as a waiver of any other or subsequent breach by such other party.

 

13.           Mutual Waiver.   Executive and the Company agree to sign a mutual waiver and release of claims agreement effective as of the Termination Date substantially in the form attached hereto as Exhibit A, and hereby incorporated by reference (the “Mutual Waiver”).

 

14.           Severability.         If any part of this Agreement is found to be invalid or unenforceable, that part will be deemed amended to achieve as nearly as possible the same economic effect as the original provision, and the remainder of this Agreement will remain in full force and effect.

 

15.           Notices.        Any notice or other communication in connection with this Agreement shall be deemed to be delivered if in writing, addressed as provided below (or to such other Person or address as to which either party may notify the other in accordance with this Section 15) and actually delivered at said address:

 

If to Executive, to him at:

 

Amin J. Khoury

149 South Beach Road

Hobe Sound, FL  33455

 

If to the Company, to it at:

 

KLX Inc.

1300 Corporate Center Way,

Wellington, FL 33414

Attention:  General Counsel

 

16.           Survival.       The provisions of Sections 4.6 and 5 through 17 inclusive hereof shall each survive any termination or expiration of this Agreement in accordance with the applicable statute of limitation period(s).

 

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17.           Miscellaneous.           This Agreement, including the attached exhibits, constitutes the entire understanding of the parties with respect to the subject matter hereof, and supersedes all such prior and contemporaneous understandings and agreements, whether oral or written, regarding such subject matter.  This Agreement may be amended or modified only by a written instrument signed by Executive and by a duly authorized representative of the Company.  This Agreement may be executed in any number of counterparts, which together shall constitute one and the same instrument.  Except as otherwise provided in this Agreement, this Agreement shall be governed by and construed in accordance with the laws (other than the conflicts of law rules) of the State of Florida.  The headings in this Agreement are for convenience of reference only and shall not alter or otherwise affect the meaning hereof.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto execute this Employment Agreement as of the date first above written.

 

	
EXECUTIVE
    	
 
    	
KLX   INC.
    
	
 
    	
 
    	
 
    
	
/s/   Amin J. Khoury
    	
 
    	
By:
    	
/s/   Roger Franks
    
	
Amin J.   Khoury
    	
 
    	
Name: 
    	
Roger   Franks
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

[SIGNATURE PAGE FOR AMIN KHOURY EMPLOYMENT AGREEMENT]

 

 

EXHIBIT A

 

Form of Mutual Waiver Agreement

 

SEPARATION AGREEMENT AND MUTUAL RELEASE

 

This Separation Agreement and Mutual Release (the “Agreement”), is made as of                  , 20      , by and between KLX Inc., a Delaware corporation (the “Company”) and Amin J. Khoury (“Employee”), for the purpose of memorializing the terms and conditions of the Employee’s departure from the Company’s employment.

 

Now, therefore, in consideration of the sum of one dollar ($1.00) and the mutual promises, agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, (the “Settlement Consideration”), the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.           Termination; Employment Agreement.  Effective                   , 20    , Employee’s employment with the Company was terminated.  Upon Employee’s termination, Employee and the Company shall each have those respective surviving rights, obligations and liabilities described in that certain Employment Agreement, dated as of             , 2014, by and between Employee and the Company (the “Employment Agreement”).

 

2.           Non-Released Claims.

 

(a)           Employee Non-Released Claims.  It is explicitly agreed, understood and intended that the general release of claims provided for in this Agreement shall not include or constitute a waiver of the Company’s, its agent, representative or designee’s obligations to Employee (i) that are specified in the Employment Agreement as surviving the termination of Employee’s employment, (ii) that arise out of or from respondeat superior  principles, (iii) for claims for indemnification and defense under any organizational documents, agreement, insurance policy, or at law or in equity concerning either the Company, its subsidiaries, affiliates, directors, officers or employees, (iii) concerning any deferred compensation plan, 401(k) plan, equity plan or retirement plan, and (iv) any claims not waivable under applicable law, collectively, the “Employee Non-Released Company Claims”.

 

(b)           Company Non-Released Claims.  It is explicitly agreed, understood and intended that the general release of claims provided for in this Agreement shall not include or constitute a waiver of (i) the Employee’s obligations to the Company concerning the Company’s confidential information and proprietary rights that survive Employee’s termination of employment, including those specified in Section 6 of the Employment Agreement, (ii) any claim of the Company for fraud based on willful and intentional acts or omissions of Employee, other than those taken in good faith and in a manner that Employee believed to be in or not opposed to the interests of the Company, proximately causing a financial restatement by the Company, and (iii) any claims not waivable by the Company under applicable law, collectively, the “Company Non-Released Employee Claims”.

 

3.           General Release in Favor of the Company:  Employee, for himself and for his heirs, executors, administrators, trustees, legal representatives and assigns (collectively, the “Releasers”), hereby forever releases and discharges the Company, its Board of Directors, and any of its past, present, or future parent corporations, subsidiaries, divisions, affiliates, officers, directors, agents, trustees, administrators, attorneys, employees, employee benefit and/or pension plans or funds (including qualified and non-qualified plans or funds), successors and/or assigns and any of its or their past, present or future parent corporations, subsidiaries, divisions, affiliates, officers, directors, agents, trustees, administrators, attorneys, employees, employee benefit and/or pension plans or funds (including qualified and non-qualified plans or funds), successors and/or assigns (whether acting as agents for the Company or in their individual capacities) (collectively, the “Releasees”) from any and all claims, demands, causes of action, and liabilities of any kind whatsoever (upon any legal or equitable theory, whether contractual, common-law, statutory, federal, state, local, or otherwise), whether known or unknown, by reason of any act, omission, transaction or occurrence which Releasers ever had, now have or hereafter can, shall or may have against Releasees up to and including the date of the execution of this Agreement, except for the Employee Non-Released Company Claims.  Without limiting the generality of the foregoing, Releasers hereby release and discharge Releasees from:

 

(a)           any and all claims for backpay, frontpay, minimum wages, overtime compensation, 

 

 

bonus payments, benefits, reimbursement for expenses, or compensation of any kind (or the value thereof), and/or for liquidated damages or punitive damages (under any applicable statute or at common law);

 

(b)           any and all claims, relating to Employee’s employment by the Company,  the terms and conditions of such employment, employee benefits related to Employee’s employment, the termination of Employee’s employment, and/or any of the events relating directly or indirectly to or surrounding such termination;

 

(c)           any and all claims of discrimination, harassment, whistle blowing or retaliation in employment (whether based on federal, state or local law, statutory or decisional), including without limitation, all claims under the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Civil Rights Act of 1866, 42 USC §§ 1981-86, as amended, the Equal Pay Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act, the Florida Civil Rights Act of 1992, the Florida Whistle-Blower Law (Fla. Stat. § 448.101 et seq.), the Florida Equal Pay Act, and waivable rights under the Florida Constitution;

 

(d)           any and all claims under any contract, whether express or implied;

 

(e)           any and all claims for unintentional or intentional torts, for emotional distress and for pain and suffering;

 

                                (f)           any and all claims for violation of any statutory or administrative rules, regulations or codes;

 

(g)           any and all claims for attorneys’ fees, costs, disbursements, wages, bonuses, benefits, vacation and/or the like;

 

which Releasers ever had, now have or hereafter can, shall or may have against Releasees for, upon or by reason of any act, omission, transaction or occurrence up to and including the date of the execution of this Agreement, except for the Employee Non-Released Company Claims.

 

4.           General Release in Favor of Employee.    The Releasees, and each of them, hereby release Releasers, and each of them, from all claims or causes of action whatsoever, known or unknown, including any and all claims of the common law of the State of Florida, including but not limited to breach of contract (whether written or oral), promissory estoppel, defamation, unjust enrichment, or claims for attorneys’ fees and costs and all claims which were alleged or could have been alleged against the Employee which arose from the beginning of the world to the date of this Agreement, except for the Company Non-Released Employee Claims.

 

5.           Non-Disparagement.  The parties agree that they will not (a) disparage or encourage or induce others to disparage the other party (including, without limitation, the Releasees and the Releasers), or (b) engage in any conduct or induce any other person to engage in any conduct that is any way injurious to either party’s (including, without limitation, the Releasees’ or the Releasers’) reputation and interests (including, without limitation, any negative or derogatory statements or writings).

 

6.           Covenants not to Sue.

 

(a)           Employee Covenant not to Sue.  Employee represents and warrants that to date, he has not filed any lawsuit, action, complaint or charge of any kind with any federal, state, or county court or administrative or public agency against the Company or any other Releasee.  Without in any way limiting the generality of the foregoing, Employee hereby covenants not to sue or to assert, prosecute, or maintain, directly or indirectly, in any form, any claim or cause of action against any person or entity being released pursuant to this Agreement with respect to any matter, cause, omission, act, or thing whatsoever, occurring in whole or in part on or at any time prior to the date of this Agreement, except for the Employee Non-Released Company Claims.  Employee agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right waived in this Agreement.

 

 

(b)           Company Covenant not to Sue.  The Company represents and warrants that to date, it has not filed any lawsuit, action, complaint or charge of any kind with any federal, state, or county court or administrative or public agency against Employee or any other Releaser.  Without in any way limiting the generality of the foregoing, the Company hereby covenants not to sue or to assert, prosecute, or maintain, directly or indirectly, in any form, any claim or cause of action against any person or entity being released pursuant to this Agreement with respect to any matter, cause, omission, act, or thing whatsoever, occurring in whole or in part on or at any time prior to the date of this Agreement, except for the Company Non-Released Employee Claims.  The Company agrees that it will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right waived in this Agreement.

 

                7.           No Admission.  The making of this Agreement is not intended, and shall not be construed, as an admission that the Company or any of the Releasees, has violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract or committed any wrongdoing whatsoever.

 

8.           Effectiveness.  This Agreement shall not become effective until the eighth day following Employee’s signing of this Agreement (“Effective Date”) and Employee may at any time prior to the Effective Date revoke this Agreement by giving notice in writing of such revocation to:

 

KLX Inc.

1300 Corporate Center Way,

Wellington, FL 33414

Attn: General Counsel

 

In the event that Employee revokes this Agreement prior to the eighth day after his execution thereof, this Agreement, and the promises contained herein, shall automatically be deemed null and void.

 

9.           Employee Acknowledgement.  Employee acknowledges that he has been advised in writing to consult with an attorney before signing this Agreement, and that Employee has been afforded the opportunity to consider the terms of this Agreement for twenty-one (21) days prior to its execution.  Employee further acknowledges that he has read this Agreement in its entirety, that he fully understands all of its terms and their significance, that he has signed it voluntarily and of Employee’s own free will, and that Employee intends to abide by its provisions without exception.

 

10.           Severability.  If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, void or unenforceable, such provision shall have no effect, however, the remaining provisions shall be enforced to the maximum extent possible.

 

11.           Entire Agreement.  This Agreement and the Employment Agreement, taken together, constitute the complete understanding between the parties and supersedes all such prior agreements between the parties and may not be changed orally.  Employee acknowledges that neither the Company nor any representative of the Company has made any representation or promises to Employee other than as set forth herein or therein.  No other promises or agreements shall be binding unless in writing and signed by the parties.

 

12.           General Provisions.

 

(a)           Governing Law; Jurisdiction; Venue.  This Agreement shall be enforced, governed and interpreted by the laws of the State of Florida without regard to Florida’s conflict of laws principles. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled in a court of competent jurisdiction in the State of Florida in Palm Beach County.  Each party consents to the jurisdiction of such Florida court in any such civil action or legal proceeding and waives any objection to the laying of venue in such Florida court.

 

(b)           Prevailing Party.   In the event of any litigation, dispute or contest arising from a breach of this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred in connection with such litigation, dispute or contest, including without limitation, reasonable attorneys’ fees, disbursement and costs, and experts’ fees and costs.

 

 

(c)           Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed as an original, but all of which together shall constitute one and the same instrument.

 

(d)           Binding Effect.  This Agreement is binding upon, and shall inure to the benefit of, the parties, the Releasers and the Releasees and their respective heirs, executors, administrators, successors and assigns.

 

(e)           Interpretation.  Should any provision of this Agreement require interpretation or construction, it is agreed by the parties that the entity interpreting or construing this Agreement shall not apply a presumption that the provisions hereof shall be more strictly construed against one party who prepared the Agreement, it being agreed that all parties have participated in the preparation of all provisions of this Agreement.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Separation Agreement and Mutual Release as of the date first written above.

 

	
 
    	
 
    	
KLX   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    
	
Amin J.   Khoury
    	
 
    	
PRINT   NAME:
    
	
 
    	
 
    	
TITLE:
    
	
STATE   OF FLORIDA
    	
)
    	
 
    
	
 
    	
) ss.
    	
 
    
	
COUNTY   OF
    	
)
    	
 
    

 

I HEREBY CERTIFY, that on this day, before me, an officer duly authorized in the State and County aforesaid to take acknowledgments, personally appeared Amin J. Khoury, to me known to be the person described in and who executed the foregoing instrument, and acknowledged to and before me that he/she executed the same.  This individual is personally known to me or has produced a                                              as identification and did take an oath.

 

SWORN TO AND SUBSCRIBED before me this            day of                 , 20    .

 

	
 
    	
Notary   Public
    
	
 
    	
My   Commission Expires:

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