Document:

Employment Letter with Ronald A. Aramini

 Exhibit 10.3 
 [Letterhead of Alabama Aircraft Industries, Inc.] 
 January 21, 2008 
 Mr. Ronald A. Aramini 
 1943 North 50th Street 
 Birmingham, Alabama 35212 
 Dear Ron: 
 On December 31, 2007, the term of your Amended And Restated Employment Agreement
(“Employment Agreement”) with Alabama Aircraft Industries, Inc., formerly named Pemco Aviation Group, Inc., (the “Company”) expired. The purpose of this letter is to confirm the following terms and conditions of your continued
employment as President and Chief Executive Officer of the Company: 
  

	 	1.	Position, Duties and Location. As President and Chief Executive Officer of the Company, you have those powers and duties normally associated with the position of
President and Chief Executive Officer and such other powers and duties as may be prescribed by the Board of Directors of the Company. You will be based at the Company’s headquarters located in Birmingham, Alabama. 

  

	 	2.	Annual Base Salary and Stock Options. Your annual base salary will be $285,000. You will retain all stock options that have been awarded to you with or without regard
to your Employment Agreement, and any such options that are not fully vested shall continue to vest in accordance with the terms under which they were awarded. Going forward, additional grants of stock options are at the discretion of the Board of
Directors of the Company and also are subject to the applicable terms and provisions of the Company’s stock option program. 

  

	 	3.	Incentive Bonus Compensation. You will be eligible to participate in the Company’s executive incentive compensation program under which bonus awards are based
upon individual performance and the performance of the Company. Your target bonus will be 100% of your base salary, and you may earn up to 150% of your target bonus. All incentive bonuses are at the discretion of the Board of Directors of the
Company, and there is no guarantee that any incentive bonuses actually will be paid. 

  

	 	4.	 Change of Control. In the event of a “Change of Control” of the Company as defined in EXHIBIT A hereto, all of your non-vested stock
options shall immediately become 100% vested. If (i) your Company employment is involuntarily terminated by the Company during the 270-day period that immediately follows such a Change of Control or (ii) you voluntarily trigger a
“Good Reason Separation” from your Company employment during the 270-day period that immediately follows a Change of Control, you will receive payment of your annual base salary, in the amount specified in Paragraph 2, above, for the
365-day period that begins as of the date your employment terminates under this sentence, with any such payment to be made in accordance with 

	 	 
Company payroll procedures that apply to employees who have not terminated Company employment as of the date of this letter. For the purposes of this
Paragraph 4, “Good Reason Separation” means your employment separation following the initial existence of one or more of the following conditions arising without your consent: (a) a material diminution in your base compensation;
(b) a material diminution in your authority, duties, or responsibilities; (c) a requirement that you report to a corporate officer or employee instead of reporting directly to the board of directors of a corporation (or similar governing
body with respect to an entity other than a corporation); (d) a material diminution in the budget over which you retain authority; (e) a material change in the geographic location at which you must perform the services; and/or (f) any
other action or inaction that constitutes a material breach by the Company of the terms and conditions of your employment with the Company. Notwithstanding the foregoing terms and provisions of this Paragraph 4, you must provide notice to the
Company of the existence of the condition described above in this Paragraph 4 within a period not to exceed 90 days of the initial existence of the condition, upon the notice of which the Company must be provided a period of at least 30 days during
which it may remedy the condition and not be required to pay benefits to you under this Paragraph 4. 

  

	 	5.	Expenses. The Company shall promptly reimburse you for all reasonable business expenses upon the timely presentation of reasonably itemized statements of such expenses
in accordance with the Company’s policies and procedures now in force or as such policies and procedures may be modified with respect to all executive officers of the Company. All expenses must be submitted within 30 days of incurrence. To the
extent required for compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and applicable guidance and regulations issued thereunder by the Internal Revenue Service (collectively hereinafter referred to as “Section
409A”), each reimbursement amount shall be paid by the Company no later than March 15 of the year following the year in which the expense was incurred. 

  

	 	6.	Compliance with Section 409A. To the extent applicable, you and the Company intend that the terms and condition of your employment set forth herein shall
meet an exemption from or comply with Section 409A. If and to the extent the Company shall determine that such terms and conditions may result in the failure of amounts payable as provided herein to comply with the requirements of Code
Section 409A, the Company shall take such unilateral action as it deems necessary or advisable, including without limitation, (i) any amendment or modification of the terms and conditions of your employment to conform them to the
requirements of Code Section 409A (including, without limitation, any amendment or modification of the terms applicable to the timing or form of any payments), (ii) pay to you immediately or in a lump sum any amount otherwise payable to
you, provided such payment does not violate Code Section 409A, and/or (iii) delay payment of any amounts until such amounts would otherwise not violate Code Section 409A. Any such amendment or modification made under the immediately
preceding sentence may adversely affect your rights without your consent. Notwithstanding any provision of this Agreement to the contrary, in the event you are a “specified employee” (as defined in Section 409A), payments otherwise
payable to you within the six (6) months following a “separation from service” (as defined in Section 409A) cannot commence until the earlier of (a) the lapse of six (6) months after a “separation from
service” or (b) the date of your death. Furthermore, the first six (6) months of any such payments of deferred compensation that are delayed due to your status as a specified employee (if any) shall be paid at the beginning of the
seventh month following your separation from service. All remaining payments shall be made as would ordinarily have been made under the terms and conditions of your employment set forth herein. 

	 	7	Vacation. You will be entitled to the number of weeks of vacation per year provided to the Company’s executive officers under the Company’s executive
vacation policy; provided, however, that your vacation shall not be less than three weeks per calendar year. 

  

	 	8.	Employee Benefit Programs. You will be eligible to continue to participate in the general employee benefit programs offered by the Company to its officers and/or
employees, including health and retirement programs. Eligibility for participation in and receipt of benefits under the Company’s benefit programs is governed by the terms, provisions and rules of the benefit programs, and the benefit programs
are subject to change by the Company at any time. 

  

	 	9.	Board Fees. You will be eligible to receive Board Fees in accordance with applicable policies established by the Board of Directors of the Company.

  

	 	10.	No Employment Agreement. Your Company employment will be on an at-will basis on and after January 1, 2008. This means that either you or the Company may end the
employment relationship at any time, with or without notice or cause. By signing below, you and we acknowledge that this letter is intended neither to change the at-will nature of our relationship nor to create an employment contract between you and
the Company. 

 The Board of Directors of the Company recognizes the key leadership role you will continue to play, the
importance of your work and contributions to the Company’s financial recovery and success, and the significant work that remains to be done. Please feel free to contact me with any questions. 
  

	
	Very truly yours,
	
	/s/ H.T. Bowling
	Harold T. Bowling
	Chair, Compensation Committee of Alabama
Aircraft Industries, Inc., formerly named Pemco Aviation Group, Inc.

  

	
	Accepted:
	
	/s/ Ronald A. Aramini
	Ronald A. Aramini
	
	Date: 1/21/08

 EXHIBIT A 
 Change of Control 
 A “Change of Control” shall occur if: 
 (a) the individuals who, as of December 1, 1999, constitute the Board (the “Incumbent Board”), cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual becoming a director subsequent to December 1, 1999 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 shall be considered as though such an individual were a member of the Incumbent Board; or 
 (b) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended), other than any such individual, entity or group which includes a member of the Incumbent
Board, acquires (directly or indirectly) the beneficial ownership (within the meaning of Rule 13d-3 promulgated under such Act) of more than 50% of the voting power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (“Voting Power”); or 
 (c) consummation of a merger or consolidation involving the Company,
or a sale or disposition of all or substantially all of the Company’s assets, or a plan of liquidation or dissolution of the Company, other than (i) a merger or consolidation in which the holders of the voting securities of the Company
outstanding immediately prior to the merger or consolidation hold at least a majority of the Voting Power of the surviving corporation immediately after such merger or consolidation, (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) by which no person, other than any individual, entity or group which includes a member of the Incumbent Board, acquires more than 50% of the Voting Power of the Company, or (iii) a merger
or consolidation in which the Company is the surviving corporation and such transaction was determined not to be a Change of Control, which transaction and determination was approved by a majority of the Board in actions taken prior to, and with
respect to, such transaction.Stipulation and Consent to Issuance of an Order to Cease and Desist

 Exhibit 10.1 
 UNITED STATES OF AMERICA 
 Before The 
 OFFICE OF THRIFT SUPERVISION 
  

					
	In the Matter of	  	)	  	Order No.: WE-08-002
		  	)	  	
	AMERICAN SAVINGS BANK, F.S.B.,	  	)	  	Effective Date: January 23, 2008
	Honolulu, Hawaii.	  	)	  	
		  	)	  	
	OTS Docket No.: 08384	  	)	  	
		  	)	  	

 STIPULATION AND CONSENT TO ISSUANCE OF AN 
 ORDER TO CEASE AND DESIST FOR AFFIRMATIVE RELIEF 
 WHEREAS, the Office of Thrift Supervision (OTS), based upon information derived from the exercise of its regulatory responsibilities, is of the opinion that grounds exist to initiate an administrative cease and
desist proceeding for affirmative relief against American Savings Bank, F.S.B., Honolulu, Hawaii, OTS Docket No. 08384 (Institution), pursuant to 12 U.S.C. § 1818(b); 
 WHEREAS, the Institution desires to cooperate with the OTS and to avoid the time and expense of such administrative proceeding; and 
 WHEREAS, the Institution enters into this Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief
(Stipulation) without admitting or denying that grounds exist to initiate an administrative cease and desist proceeding but admitting the statements and conclusions in Paragraph 1 below, concerning jurisdiction; hereby stipulates and agrees to the
following: 

 1. Jurisdiction. 
 (a) The Institution is a “savings association” within the meaning of 12 U.S.C. § 1813(b) and 12 U.S.C. § 1462(4). Accordingly, the
Institution is an “insured depository institution” as that term is defined in 12 U.S.C. § 1813(c); 
 (b) Pursuant to 12
U.S.C. § 1813(q), the Director of the OTS is the “appropriate Federal banking agency” with jurisdiction to maintain an administrative cease and desist proceeding against such a savings association. Therefore, the Institution is
subject to the jurisdiction of the OTS to initiate and maintain a cease and desist proceeding against it pursuant to 12 U.S.C. § 1818(b); and 
 (c) The Director of the OTS has delegated to the Regional Director of the West Region of the OTS (Regional Director) the authority to issue cease and desist orders where the savings association has consented to the issuance of the orders.

 2. OTS Findings of Fact. The OTS has found that the Institution has failed to comply fully with the requirements of the
Currency and Foreign Transactions Reporting Act (the Bank Secrecy Act or BSA), 31 U.S.C. § 5311 et seq.; the related BSA regulations issued by the United States Department of the Treasury, 31 C.F.R. Part 103 and the OTS, 12 C.F.R. §
563.177; and the OTS regulations governing suspicious activity reports (SAR) set forth in 12 C.F. R. § 563.180. 
 In addition, the OTS
has determined that the Institution has failed to comply fully with certain consumer affairs and compliance laws and regulations, including specifically those related to the Truth in Lending Act, 15 U.S.C. §1601 et seq., 12 C.F.R. Part
226 (Regulation Z); the Real Estate Settlement Procedures Act, 12 U.S.C. §2601 et seq., 24 C.F. R. Part 3500 (Regulation X); the Flood Disaster Protection Act, 42 U.S.C. 4001 et seq., 12 

  

 2 

 
C.F.R. Part 572; and the Home Mortgage Disclosure Act, 12 U.S.C. §2801 et seq., 12 C.F.R. Part 203 (Regulation C). 
 The Institution has begun taking corrective actions to address the deficiencies found by the OTS. 
 3. Consent. The Institution consents to the issuance by the OTS of the accompanying Consent Order to Cease and Desist for Affirmative
Relief (Order). The Institution further agrees to comply with the terms of the Order upon issuance and stipulates that the Order complies with all requirements of law. 
 4. Finality. The Order is issued under 12 U.S.C. § 1818(b) and upon its effective date shall be a final order, effective and fully enforceable by the OTS under 12 U.S.C. § 1818(i). 

5. Waivers. The Institution waives the following: 
 (a) The right to be served with a written notice of the OTS’s charges provided by 12 U.S.C. § 1818(b) and 12 C.F.R. Part 509; 
 (b) The right to an administrative hearing of the OTS’s charges against it as provided by 12 U.S.C. § 1818(b), 12 C.F.R. Part 509; 
 (c) The right to seek judicial review of the Order including, without limitation, any such right provided by 12 U.S.C. § 1818(h), or otherwise to
challenge the validity of the Order; and 
 (d) Any and all claims against the OTS, including its employees and agents, and any other
governmental entity for the award of fees, costs, or expenses related to this OTS enforcement matter whether arising under common law, federal statute, or otherwise. 
  

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 6. OTS Authority Not Affected. Nothing in this Stipulation or accompanying Order shall
inhibit, estop, bar, or otherwise prevent the OTS from taking any other action affecting the Institution if at any time OTS deems it appropriate to do so to fulfill the responsibilities placed upon OTS by law. 
 7. Other Government Actions Not Affected. Institution acknowledges and agrees that its consent to the issuance of the Order does not
release, discharge, compromise, settle, dismiss, resolve, or in any way affect any actions, charges against, or liability of the Institution that arise pursuant to this action or otherwise, and that may be or have been brought by any other
government entity other than the OTS. 
 8. Miscellaneous. 
 (a) The laws of the United States of America shall govern the construction and validity of this Stipulation and of the Order; 
 (b) All references to OTS in this Stipulation and the Order shall also mean any of the OTS’s predecessors, successors, and assignees; 
 (c) The section and paragraph headings in this Stipulation and the Order are for convenience only, and such headings shall not affect the interpretation
of this Stipulation or the Order; 
 (d) The terms of this Stipulation and the Order represent the final agreement of the parties with
respect to the subject matters hereof and constitute the sole agreement of the parties with respect to such subject matters; and 
 (e) This
Stipulation and the Order shall remain in effect until terminated, modified, or suspended in writing by the OTS, acting through its Director, Senior Deputy Director, Regional Director, or other authorized representative. 
  

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 9. Signature of Directors. 
 Each Director signing this Stipulation attests that he or she voted in favor of a Board Resolution authorizing the consent of the Institution to the
issuance of the Order and the execution of the Stipulation. 
 WHEREFORE, the Institution, by a majority of its directors, executes
this Stipulation and Consent to the Issuance of an Order to Cease and Desist for Affirmative Relief intending to be legally bound hereby. 
  

											
	American Savings Bank, F.S.B.	 		 	Office of Thrift Supervision	 	
	Honolulu, Hawaii	 		 	West Region	 	
					
	Accepted by a majority of its directors:	 		 	By:	 	 /s/ Darrel W. Dochow
	 	
		 		 		 		 	Darrel W. Dochow	 	
	By:	 		 		 		 	Regional Director, West	 	
					
	 /s/ Kenton T. Eldridge
	 		 		 	Dated: January 23, 2008	 	
	Director	 		 		 		 	
					
	 /s/ Diane J. Plotts
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Don E. Carroll
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Bert A. Kobayashi
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Jeffrey N. Watanabe
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Constance H. Lau
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Richard W. Gushman, II
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Shirley J. Daniel
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Louise K. Y. Ing
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Victor H. Li
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Jorge G. Camara, M.D.
	 		 		 		 	
	Director	 		 		 		 	
					
	 /s/ Barry K. Taniguchi
	 		 		 		 	
	Director	 		 		 		 	

  

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