Document:

exv10w1

EXHIBIT 10.1

SECOND MODIFICATION AGREEMENT

	 	 	 	 	 
	DATE:

	 	August 5, 2008	 	 
	 
	 	 	 	 
	PARTIES:

	 	Borrower:
	 	WHITE ELECTRONIC DESIGNS CORPORATION,
	 

	 	 	 	an Indiana corporation
	 
	 	 	 	 
	 

	 	Bank:
	 	JPMORGAN CHASE BANK, N.A., as Administrative
	 

	 	 	 	Agent and Lender

RECITALS:

     A. Bank has extended to Borrower credit (“Loan”) under that Credit Agreement, dated as of
April 3, 2007 (as amended from time to time, “Credit Agreement”) in the original principal amount
of $30,000,000.00 as evidenced by that Note (Revolving Loans) dated as of April 3, 2007 (the
“Note”). As of August 5, 2008, the outstanding principal balance of the Loan is $0.00. All
undefined capitalized terms used herein shall have the meaning given them in the Credit Agreement.

     B. The Loan is secured by, among other things, the Security Documents. The agreements,
documents, and instruments securing the Loan and the Credit Agreement are referred to individually
and collectively as the “Security Documents.”

     C. Borrower has requested that Bank modify the Loan and the Credit Documents as provided
herein. Bank is willing to so modify the Loan and the Credit Documents, subject to the terms and
conditions herein.

AGREEMENT:

     For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Bank agree as follows:

SECTION 1. ACCURACY OF RECITALS, ACKNOWLEDGEMENTS.

     1.1 Borrower acknowledges the accuracy of the Recitals.

SECTION 2. MODIFICATION OF CREDIT DOCUMENTS; OTHER AGREEMENTS.

     2.1 The definition of Net Income in Section 1.01 of the Credit Agreement is hereby amended to
read as follows:

     “Net Income” means, as applied to any Person, the net income (or net loss) of
such Person for the period in question (after provision for income taxes) determined
in accordance with GAAP, provided that the impact of any extraordinary non-cash
gains or losses, determined in accordance with GAAP and any non-cash goodwill
impairments or non-cash gains or losses on sale of

 

 

discontinued operations shall be excluded from the determination of “Net Income.”

SECTION 3. RATIFICATION OF CREDIT DOCUMENTS AND COLLATERAL.

     The Credit Documents are ratified and affirmed by Borrower and shall remain in full force and
effect as modified herein. Any property or rights to or interests in property granted as security
in the Credit Documents shall remain as security for the Loan and the obligations of Borrower in
the Credit Documents.

SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES.

     Borrower represents and warrants to Bank:

     4.1 No default or event of default under any of the Credit Documents as modified herein, nor
any event, that, with the giving of notice or the passage of time or both, would be a default or an
event of default under the Credit Documents as modified herein has occurred and is continuing.

     4.2 There has been no material adverse change in the financial condition of Borrower or any
other person whose financial statement has been delivered to Bank in connection with the Loan from
the most recent financial statement received by Bank.

     4.3 Each and all representations and warranties of Borrower in the Credit Documents are
accurate on the date hereof.

     4.4 Borrower has no claims, counterclaims, defenses, or set-offs with respect to the Loan or
the Credit Documents as modified herein.

     4.5 The Credit Documents as modified herein are the legal, valid, and binding obligation of
Borrower, enforceable against Borrower in accordance with their terms.

     4.6 Borrower is validly existing under the laws of the State of its formation or organization
and has the requisite power and authority to execute and deliver this Agreement and to perform the
Credit Documents as modified herein. The execution and delivery of this Agreement and the
performance of the Credit Documents as modified herein have been duly authorized by all requisite
action by or on behalf of Borrower. This Agreement has been duly executed and delivered on behalf
of Borrower.

SECTION 5. BORROWER COVENANTS.

     Borrower covenants with Bank:

     5.1 Borrower shall execute, deliver, and provide to Bank such additional agreements,
documents, and instruments as reasonably required by Bank to effectuate the intent of this
Agreement.

-2-

 

     5.2 Borrower fully, finally, and absolutely and forever releases and discharges Bank and its
present and former directors, shareholders, officers, employees, agents, representatives,
successors and assigns, and their separate and respective heirs, personal representatives,
successors and assigns, from any and all actions, causes of action, claims, debts, damages,
demands, liabilities, obligations, and suits, of whatever kind or nature, in law or equity of
Borrower, whether now known or unknown to Borrower, and whether contingent or matured, (i) in
respect of the Loan, the Credit Documents, or the actions or omissions of Bank in respect of the
Loan or the Credit Documents and (ii) arising from events occurring prior to the date of this
Agreement.

SECTION 6. CONDITIONS.

     6.1 The agreements of Bank and the modifications contained herein shall not be binding upon
Bank until Bank has executed and delivered this Agreement and Bank has received, at Borrower’s
expense, all of the following, all of which shall be in form and content satisfactory to Bank and
shall be subject to approval by Bank:

          (a) An original of this Agreement fully executed by the Borrower and Guarantors.

          (b) Such resolutions or authorizations and such other documents as Bank may require relating
to the existence and good standing of that corporation, partnership or trust, and the authority of
any person executing this Agreement or other documents on behalf of that corporation, limited
liability company, partnership or trust.

          (c) Payment of all the internal and external costs and expenses incurred by Bank in connection
with this Agreement (including, without limitation, inside and outside attorneys, appraisal,
appraisal review, processing, title, filing, and recording costs, expenses, and fees).

			
	SECTION 7.	 	INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.

     The Credit Documents as modified herein contain the complete understanding and agreement of
Borrower and Bank in respect of the Loan and supersede all prior representations, warranties,
agreements, arrangements, understandings, and negotiations. No provision of the Credit Documents
as modified herein may be changed, discharged, supplemented, terminated, or waived except in a
writing signed by the parties thereto.

SECTION 8. BINDING EFFECT.

     The Credit Documents as modified herein shall be binding upon and shall inure to the benefit
of Borrower and Bank and their successors and assigns and the executors, legal administrators,
personal representatives, heirs, devisees, and beneficiaries of Borrower, provided, however,
Borrower may not assign any of its right or delegate any of its obligation under the Credit
Documents and any purported assignment or delegation shall be void.

-3-

 

SECTION 9. CHOICE OF LAW.

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Arizona, without giving effect to conflicts of law principles.

SECTION 10. COUNTERPART EXECUTION.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same document. Signature pages may
be detached from the counterparts and attached to a single copy of this Agreement to physically
form one document.

     DATED as of the date first above stated.

	 	 	 	 	 	 	 
	 	 	WHITE ELECTRONIC DESIGNS
 CORPORATION, an Indiana corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Roger A. Derse	 	 
	 

	 	Name:	 	Roger A. Derse	 	 
	 

	 	Title:
	 	VP/CFO	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	BORROWER	 	

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., individually
 and as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Stephen B. Monyer	 	 
	 

	 	Name:
	 	Stephen B. Monyer	 	 
	 

	 	Title:
	 	VP	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	BANK	 	

-4-exv10w1

Exhibit 10.1

	 	 	 	 	 	 	 
	 

	 	A subsidiary of Pinnacle West Capital Corporation	 	 
	 
	 

	 	Donald E. Brandt
	 	Tel 602/250-5602
	 	Mail Station 9042
	 

	 	President and Chief Executive Officer
	 	Fax 602/250-3303
	 	PO Box 53999
	 

	 	 	 	 	 	Phoenix, AZ 85072-3999

June 17, 2008

Mr. James R. Hatfield

6300 N.E. 109th Street

Edmond, OK 73013

Dear Jim,

I am delighted to extend to you this offer to become the Senior Vice President & Chief Financial
Officer of both Pinnacle West Capital Corporation and Arizona Public Service Company. The details
of our proposal are included in Attachment A.

If you are in agreement with the terms of our offer of employment as described herein, please sign
as requested below.

Jim, I am confident that this will be a challenging and rewarding opportunity for you. Bill Post
and I are excited about the prospect of you joining our team and we will personally do all we can
to ease your and your family’s transition. We look forward to your contributions to our
organization.

If you have any questions, please do not hesitate to contact me.

Sincerely,

/s/ Donald E. Brandt

DB08-07/ps

Signing this letter indicates your acceptance of the terms of this offer.

	 	 	 	 	 	 	 
	Acceptance: 

	 	/s/ James R. Hatfield
 

	 	Date: 6/18/08

	 	

 

 

Attachment A

	•	 	Annual base salary of $450,000.
	 
	•	 	Hiring incentive of $200,000 payable during the first two weeks of your employment, and
$100,000 paid within two weeks of the first anniversary of your employment date.
	 
	•	 	4 weeks vacation annually
	 
	•	 	Vehicle allowance of $10,000 per year
	 
	•	 	Participation in the officer annual incentive plan with a target payment of 50% and up
to a maximum of 100% of annual base salary. Annual incentive payments are dependent on
company and business unit performance and are generally paid during the first quarter of
the subsequent year. Incentive for 2008 will be prorated based on employment date.
	 
	•	 	Long-Term Stock Based Compensation: Typically awarded annually, with the average base
award for senior vice presidents representing a target equity face value of approximately
$260,000 that vests over four years.

	 	o	 	At the next Human Resources Committee meeting following your hire date,
the Committee will be asked to approve: (1) an award of 1,400 performance shares
which will vest on 2/1/2009; (2) an award of 2,000 performance shares which will
vest on 2/1/2010; (3) an award of 3,400 performance shares which will vest on
2/1/2011; (4) an award of 2,500 restricted stock units that will vest through
2/1/2011 and (5) an award of 3,500 restricted stock units that will vest through
2/1/2012. The intent of these awards is to establish your standing on a pro-rata
basis within the three long-term performance cycles that are currently running for
other officers.

	•	 	Participation in the Supplemental Executive Retirement Plan. The SEBRP is structured as
a cash balance plan that the company contributes a percent of your base and annual
incentive compensation as follows:

	 	 	 	 	 
	 	 	Percent of Monthly
	Age	 	Compensation Contribution
	40–44
	 	 	16	%
	45–49
	 	 	20	%
	50–54
	 	 	24	%
	55 and over
	 	 	28	%

	•	 	Financial planning benefit of $7,500 the first year utilized and $3,750 each subsequent
year.

-1-

 

	•	 	Deferred Compensation Plan (DCP):

	 	o	 	The DCP provides you with the opportunity to defer part of your
compensation on a pre-tax basis. The deferred amount also earns interest. The
company sets the interest amount each calendar year. (For the last several years,
the interest rate has been 7.5%)

	•	 	Historically, we have provided officers with Key Executive Employment & Severance
Agreements for change of control purposes. In the event of payment under this plan, you
would receive 2.99 times base salary and annual incentive as described in the document.
	 
	•	 	If you enroll in the company’s benefit program within the first 30 days of employment,
your medical, dental, and life insurance will be effective on your one-month anniversary
date of employment. Medical and dental plan premiums are on a pre-tax basis. We will
provide you with a payment equal to the cost of your OGE COBRA coverage (grossed up for
taxes) to bridge your medical coverage until the effective date of your coverage under the
Pinnacle and APS plan.
	 
	•	 	Relocation benefits will include household goods transportation and storage, temporary
living up to six months or longer if business needs arise, and home sale and home finding
assistance. So as to facilitate and expedite your relocation, you may elect any home sale
option under our executive relocation program without regard to any time periods that
generally apply.

All items of compensation, and all benefits, that are provided pursuant to a compensation or
benefit plan will be subject to the terms and provisions of the relevant plan.

This offer is contingent upon successful completion of a pre-employment medical screening and
background check.

-2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]