SPR Spirit Aerosystems Holdings Inc

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of report (date of earliest event reported): September 30, 2023

 

 

Spirit AeroSystems Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware		001-33160		20-2436320
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

3801 South Oliver Wichita, Kansas 67210

(Address of principal executive offices)(zip code)

 

(316) 526-9000

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.01 per share		SPR		New York Stock Exchange

 

 

 

Item 5.02.

Departures of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Thomas C. Gentile III

 

Effective as of September 30, 2023 (the “Separation Date”), Thomas C. Gentile III ceased to serve as the President and Chief Executive Officer of Spirit AeroSystems Holdings, Inc. (the “Company”) and as a member of the Board of Directors (the “Board”) of the Company.

 

Spirit AeroSystems, Inc. (the “Employer”) entered into a Separation Agreement and General Release (the “Separation Agreement”) with Mr. Gentile. Pursuant to the Separation Agreement, so long as Mr. Gentile does not revoke his acceptance of the Separation Agreement within the time provided to do so and satisfies the other terms and conditions of the Separation Agreement (including compliance with the Restrictive Covenants, as defined below), Mr. Gentile will receive the following consideration in accordance with the terms of Section 6 of the Employment Agreement between the Employer and Mr. Gentile entered into on February 13, 2016 and effective as of April 1, 2016, as amended (the “Gentile Employment Agreement”):

 

	·	Cash severance equal to one year of Mr. Gentile’s current annualized base salary, or $1,300,000, to be paid in substantially equal installments on the Employer’s regular payroll dates during the 12-month period following the Separation Date; and
	·	Additional cash payments equal to the cost necessary to maintain continued medical and dental benefit coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for the 12-month period following the Separation Date, to be paid in substantially equal monthly installments during the 12-month period following the Separation Date.

 

In addition to the obligations under the Gentile Employment Agreement, the Separation Agreement provides (i) for payment equal to the cost necessary to maintain continued medical and dental coverage under COBRA for an additional one-month period following the Separation Date and continued vision coverage under COBRA, (ii) for outplacement services for a period of 12 months following the Separation Date, not to exceed $100,000, (iii) for reimbursement of up to $25,000 in attorney’s fees incurred by Mr. Gentile in connection with the negotiation of the Separation Agreement, and (iv) that 91,978 of his outstanding time-based restricted stock units (“RSUs”), previously granted to Mr. Gentile under the Spirit AeroSystems Holdings, Inc. long-term incentive program (the “LTIP”) maintained pursuant to and in accordance with the terms and conditions of the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended or restated from time to time (the “OIP”) that were otherwise scheduled to vest in February 2024 will remain outstanding and eligible to vest on their originally scheduled vesting dates, in each case, subject to Mr. Gentile’s execution of and continued compliance with the Separation Agreement, including compliance with the Restrictive Covenants.

 

The Separation Agreement further provides that, for a period of three months following the Separation Date (the “Consulting Period”), Mr. Gentile will serve as an advisor to the Company’s interim President and Chief Executive Officer and will provide consulting and transition services to the Company, the Board, and the Company’s interim President and Chief Executive Officer, as requested and at such times as mutually agreed to by the parties. Mr. Gentile will receive a retainer in the amount of $50,000 and in addition an hourly rate of compensation of $2,500 for the provision of such services in excess of 20 hours, subject to Mr. Gentile’s execution of and continued compliance with the Separation Agreement, including compliance with the Restrictive Covenants.

 

Mr. Gentile remains subject to certain restrictive covenants relating to confidentiality, non-competition and non-solicitation, as set forth in the Gentile Employment Agreement (the “Restrictive Covenants”).

 

The foregoing description of the Separation Agreement is not complete and is qualified in its entirety by reference to the full text of the Separation Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Patrick M. Shanahan

 

On September 30, 2023, the Board appointed Patrick M. Shanahan as interim President and Chief Executive Officer of the Company and of the Employer. In connection with that appointment, Mr. Shanahan will assume the role of the Company’s principal executive officer (as contemplated by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange Act”)) and also continue to serve on the Board as a non-independent member.

 

 

Mr. Shanahan, age 61, has served as a director of the Company since 2021. Mr. Shanahan served as the 33rd Deputy Secretary of Defense. He served as Acting Secretary of Defense from January 1, 2019 to June 23, 2019. Mr. Shanahan previously served as the Senior Vice President, Supply Chain & Operations at The Boeing Company. Mr. Shanahan joined The Boeing Company in 1986 and spent over three decades with the company in a variety of roles. Mr. Shanahan is a National Academy of Engineering Member, Royal Aeronautical Society Fellow, Society of Manufacturing Engineers Fellow and American Institute of Aeronautics and Astronautics Associate Fellow. He served as a regent at the University of Washington for over five years. Mr. Shanahan holds a Bachelor of Science degree in mechanical engineering from the University of Washington and two advanced degrees from the Massachusetts Institute of Technology. Mr. Shanahan currently serves as a director of each of Leidos Holdings, Inc. and CAE, Inc. and previously served as a director for Zanite Acquisition Corporation from 2021 to 2022.

 

There are no arrangements or understandings between Mr. Shanahan and any other persons pursuant to which he was selected to serve as the Company’s President and Chief Executive Officer. There are no family relationships between Mr. Shanahan and any director or executive officer of the Company, and Mr. Shanahan has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

Effective as of September 30, 2023 (the “Shanahan Start Date”), the Employer entered into an Employment Agreement with Mr. Shanahan memorializing the terms of his role as President and Chief Executive Officer of the Company (the “Shanahan Employment Agreement”). Pursuant to the Shanahan Employment Agreement, Mr. Shanahan will receive an annualized base salary of $2,000,000 and will be eligible (i) to receive a one-time grant of RSUs under the LTIP maintained pursuant to and in accordance with the terms and conditions of the OIP, with a grant date value of approximately $8,000,000 (the “RSU Grant”), as further described below, (ii) to receive temporary housing benefits in Wichita, Kansas provided in accordance with the terms and conditions of the Company’s relocation policy, (iii) to use the Company’s aircraft in accordance with the terms and conditions of the Company’s aircraft policy, and (iv) to receive an automobile allowance provided in accordance with the terms and conditions of the Company’s automobile policy.

 

If Mr. Shanahan’s employment is terminated by the Employer without “cause” or if Mr. Shanahan resigns for “good reason” (each such quoted term as defined in the Shanahan Employment Agreement), then the RSUs granted to Mr. Shanahan pursuant to the RSU Grant shall become fully vested as of the date of such termination of employment, subject to his continued compliance with the confidentiality, non-competition and non-solicitation covenants set forth in the Shanahan Employment Agreement and satisfaction of a release of claims requirement.

 

If Mr. Shanahan’s employment is terminated by the Employer without cause or if Mr. Shanahan resigns for good reason, in each case, within one year following a “change in control” (such term as defined in the Shanahan Employment Agreement and such termination of employment, a “Qualifying Termination”), then Mr. Shanahan will be eligible to receive cash severance equal to one year’s annualized base salary, and if such Qualifying Termination occurs prior to the first anniversary of the Shanahan Start Date, then Mr. Shanahan will also be eligible to receive additional cash severance equal to the portion of his annualized base salary that he would have otherwise received during the one-year period of employment following the Shanahan Start Date but for the Qualifying Termination. These potential severance benefits are subject to Mr. Shanahan’s continued compliance with the confidentiality, non-competition and non-solicitation covenants set forth in the Shanahan Employment Agreement and satisfaction of a release of claims requirement.

 

The grant date value of the RSU Grant is based on the number of shares subject to the grant multiplied by $16.14, the closing price of the Common Stock on Friday, September 29, 2023. Because the Company had not announced the change in its Chief Executive Officer or other material information, such as its results for the third fiscal quarter of 2023, that closing price may not reflect all material information, which could result in a higher or lower value being received than is evident from the most recent closing price. The Compensation Committee of the Board took that possibility into consideration when it determined the size of the award.

 

During the period Mr. Shanahan serves as the Company’s President and Chief Executive Officer, Mr. Shanahan will not receive compensation as a non-employee director of the Company. In connection with the appointment of Mr. Shanahan as the Company’s President and Chief Executive Officer, Mr. Shanahan ceased to serve as a member of the Audit Committee of the Board and of the Risk Committee of the Board, in each case, effective as of September 30, 2023.

 

 

The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Shanahan Employment Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 7.01.

Regulation FD Disclosure.

 

On October 2, 2023, the Company issued a press release announcing Mr. Gentile’s departure and the appointment of Mr. Shanahan as the Company’s interim President and Chief Executive Officer, as discussed below. A copy of the press release is furnished as Exhibit 99.1.

 

The information furnished with this report, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any other filing under the Securities Act of 1933, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number		Description of Exhibit
10.1		Separation Agreement and General Release, dated September 30, 2023, by and between Thomas C. Gentile III and Spirit AeroSystems, Inc.
10.2		Employment Agreement, dated September 30, 2023, by and between Patrick M. Shanahan and Spirit AeroSystems, Inc.
99.1		Press release dated October 2, 2023.
104		Cover Page Interactive Date File. The cover page XBRL tags are embedded within the inline XBRL document (contained in Exhibit 101).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SPIRIT AEROSYSTEMS HOLDINGS, INC.
Date: October 2, 2023	By:	/s/ Mindy McPheeters
		Mindy McPheeters
		Senior Vice President, General Counsel & Corporate Secretary

 

 

 

Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered into by and among Spirit AeroSystems, Inc. (the “Company”), Spirit AeroSystems Holdings, Inc., the parent of the Company (the “Parent”), and Thomas C. Gentile III (the “Executive”).

 

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Separation. Effective as of September 30, 2023 (the “Separation Date”), the Executive is no longer employed by the Company as its President & Chief Executive Officer and no longer holds any and all other positions he held as an officer or director of the Company or any of its subsidiaries or as an officer of the Parent due to the tendering of his resignation from such positions. In accordance with the Employment Agreement between the Company and the Executive entered into on the 13^th day of February 2016 and effective as of the 1^st day of April 2016, as amended (the “Employment Agreement”), no other action is required for these separations to be effective.

 

2.            Consulting Services. For a period of three (3) months (the “Consulting Term”) following the Separation Date, the Executive agrees that he shall provide consulting and transition services as an advisor to the Company’s interim Chief Executive Officer (the “Consulting Services”) as expressly requested by, or at the direction of, the Company’s interim Chief Executive Officer and at such times as mutually agreed to by the Executive. For the Consulting Services provided by the Consultant pursuant to this Agreement, the Company shall pay to the Executive a non-refundable retainer in an amount equal to fifty thousand dollars ($50,000.00) (the “Retainer”) within thirty (30) days following the Effective Date. The Executive will be entitled an amount equal to two thousand five hundred dollars ($2,500.00) per hour of Consulting Services provided by the Executive (the “Consulting Fee”). Within ten (10) days following the end of each calendar month during the Consulting Term, the Executive will provide the Company with a written invoice describing, in reasonable detail, the Consulting Services requested by the Company provided by the Executive during such calendar month and the hours devoted to providing such services. When the total amount due to the Executive with respect to the Consulting Services exceeds the amount of the Retainer, the Company will pay all Consulting Fees in excess of the Retainer within ninety (90) days of the Company’s receipt of the applicable invoice.

 

3.            Consideration in Settlement. In consideration of (i) the release of all claims described below in Paragraph 9, (ii) the covenants in Paragraphs 10, 11 and 16(b), (iii) the protective agreements described in Paragraph 12, (iv) the agreement of future cooperation in Paragraph 21 and (v) the other terms of this Agreement, and further provided the Executive does not revoke his acceptance of this Agreement pursuant to Paragraph 25, the Company agrees to compensate the Executive as follows:

 

(a)            Separation Payments. The Company shall pay the Executive the following:

 

i.

An amount equal to one million three hundred thousand dollars ($1,300,000), which represents one year of the Executive’s annual base salary in effect immediately prior to the Separation Date (the “Separation Payment”); and

 

 

ii.

If the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall pay the Executive an amount equal to the monthly COBRA premium (covering medical, vision, and dental benefits) for the Executive and the Executive’s dependents (the “COBRA Payments”). Such COBRA Payments shall initially equal $1,554.35 per month, subject to increase on July 1, 2024, less applicable tax withholdings, and shall be paid in substantially equal installments at the beginning of each month between the Separation Date and the earliest to occur of: (A) the thirteenth (13th) month anniversary of the Separation Date and (B) the date that the Executive is no longer eligible to receive COBRA continuation coverage; provided, however, that the first installment shall not be paid until the First Installment Date (as defined below).

 

(b)            The Separation Payment shall be paid in substantially equal installments on the Company’s regular payroll dates commencing on the first payroll date coinciding with, or next if administratively necessary, following the Effective Date (the date of such first payment, the “First Installment Date”); provided, however, that the first installment shall include (without interest) the number of installments of the Severance Payments that the Executive would have received between the Separation Date and the First Installment Date had there been no delay in payment. The Company, the Parent and the Executive agree that (i) each installment payment of the Separation Payment and COBRA Payment shall be deemed to be a separate payment for purposes of Section 409A and (ii) the payment of any portion of the Separation Payment and COBRA Payment that neither constitutes a “short term deferral,” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), nor is exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9), shall be delayed until the first regular payroll date of the Company that coincides with or immediately follows April 1, 2024.

 

(c)            LTIP Awards. With respect to the stock awards identified on Schedule A to this Agreement that were granted under the Spirit AeroSystems Holdings, Inc. Amended and Restated Long-Term Incentive Plan maintained pursuant to and in accordance with the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan (the “Specified Unvested Awards”), the Company waives, and shall take all necessary action to cause such waiver of, the requirement that the Executive to be employed by the Company through the applicable Vesting Date (as specified in Schedule A) in February 2024 (the “Vesting Date”). With respect to each Specified Unvested Award that is listed on Schedule A, on the applicable Vesting Date, the Executive shall become fully vested in that portion of the Specified Unvested Award indicated in column 6 of Schedule A For the avoidance of doubt, (i) any other outstanding awards not expressly identified on Schedule A that remain unvested on the Separation Date shall be forfeited, (ii) the Executive shall become fully vested in the Specified Unvested Awards in all respects on the Vesting Date as if Executive’s employment had not terminated prior to such date, (iii) any restrictions on transfer or other similar restrictions with respect to the Specified Unvested Awards will continue to apply through the Vesting Date as if Executive’s employment had not terminated prior to the Vesting Date, (iv) all other terms of the Specified Unvested Award will continue to apply except to the extent not conflicting with this Agreement, and (v) the Company shall withhold from the Specified Unvested Amount the amount required by the Company to withhold for the payment of federal or state taxes.

 

 

(d)            Outplacement Services. During the twelve (12) month period following the Separation Date, the Executive shall be entitled to receive outplacement services from Lee Hecht Harrison LLC at a level commensurate for executives who held positions substantially similar to the Executive’s position with the Company (the “Outplacement Services”). The Company shall pay all costs for such Outplacement Services on a timely basis, provided that, the total cost of such Outplacement Services shall not exceed one hundred thousand dollars ($100,000).

 

(e)            Attorney’s Fees. The Company shall reimburse the Executive up to twenty five thousand dollars ($25,000) for the legal fees incurred by the Executive in connection with the negotiation and documentation of this Agreement; provided that, upon request by the Company, Executive provides the Company with reasonable documentation of such fees (it being understood that no such documentation shall be required that is subject to attorney-client privilege).

 

4.            Benefit Plans. Following the Separation Date, the Executive shall be entitled to all benefits and compensation with respect to which, as of the Separation Date, is vested in accordance with the terms of the applicable plans, programs and arrangements, including, without limitation, the following: (i) in accordance with the Company’s policies regarding business expenses, any business expenses incurred by the Executive in connection with his employment with the Company that have not been reimbursed by the Separation Date, (ii) with respect to the Spirit Aerosystems Holdings, Inc. Retirement & Savings Plan, the Executive’s account balance and accrued benefit, and (iii) with respect to the Spirit Aerosystems Holdings, Inc. Amended and Restated Deferred Compensation Plan (the “DCP”), the Executive’s entire balance credited to his “Deferred Compensation Account,” including “Employer Match Account” and “Employer Discretionary Contribution Account” (each term as defined under the DCP).

 

5.            Indemnification. The Company and the Executive acknowledge and agree that, following the Separation Date, the Executive shall continue to be entitled to be indemnified by the Parent, the Company and their affiliates and covered by any applicable officer and director insurance, in each case, subject to the terms of applicable agreements (including bylaws of the Parent and the Company) and insurance policies as in effect as of the Separation Date.

 

6.            Taxes. The Company and the Executive acknowledge and agree that all payments made hereunder constitute “wages” for purposes of FICA, FUTA and income tax withholding and such taxes shall be withheld, as well as any other withholdings that are typically deducted from wages, as to any payments made under this Agreement. The Parent, the Company and the Executive agree that, to the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A) (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by the Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.

 

 

7.            Other Continuing Rights. The Executive agrees that, except for his accrued base salary earned through the Separation Date and the payments outlined above in this Paragraph 3, he has been paid all other compensation due to him, including but not limited to all salary, bonuses, deferred compensation, incentives and all other compensation of any nature whatsoever. Except as set forth above, no other sums (contingent or otherwise) shall be paid to the Executive in respect of his employment by the Company or the Parent, and any such sums (whether or not owed) are hereby expressly waived by the Executive.

 

8.            Contingent Entitlement. The Executive acknowledges and agrees that his entitlement to payments, benefits and reimbursements under Paragraph 2 and Paragraph 3(a) through (e) shall be conditioned on his continuing compliance with Paragraphs 9, 10, 11, 12, 16(b) and 21 of the Agreement. The Executive’s violation of any obligation within Paragraphs 9, 10, 11, 12, 16(b) or 21 shall terminate the Company’s obligation to continue to make payments or reimbursements or otherwise provide consideration in accordance with Paragraph 2 and Paragraphs 3(a) through (e).

 

9.            General Release. As a material inducement to the Company and the Parent to enter into this Agreement and in consideration of the payments and benefits to be made by the Company and the Parent to the Executive in accordance with Paragraphs 2 and 3 above, the Executive, on behalf of himself, his representatives, agents, estate, heirs, successors and assigns, and with full understanding of the contents and legal effect of this Agreement and having the right and opportunity to consult with his counsel, releases and discharges the Company, the Parent, and their respective shareholders, officers, directors, supervisors, members, managers, employees, agents, representatives, attorneys, insurers, parent companies, divisions, subsidiaries, affiliates and all employee benefit plans sponsored or contributed to by the Company or the Parent (including any fiduciaries thereof), and all related entities of any kind or nature, and its and their predecessors, successors, heirs, executors, administrators, and assigns (collectively, the “Released Parties”) from any and all claims, actions, causes of action, grievances, suits, charges, or complaints of any kind or nature whatsoever, that he ever had or now has (through the date that the Executive signs this Agreement), whether fixed or contingent, liquidated or unliquidated, known or unknown, suspected or unsuspected, and whether arising in tort, contract, statute, or equity, before any federal, state, local, or private court, agency, arbitrator, mediator, or other entity, regardless of the relief or remedy; provided, however, and subject to Paragraph 10 below, the Agreement is not intended to and does not limit the Executive’s right to file a charge or participate in an investigative proceeding of the Equal Employment Opportunity Commission (“EEOC”), Securities Exchange Commission, or another governmental agency. Without limiting the generality of the foregoing, it being the intention of the parties to make this release as broad and as general as the law permits, this release specifically includes, but is not limited to, and is intended to explicitly release: any claims under the Employment Agreement; and any and all subject matter and claims arising from any alleged violation by the Released Parties under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990) (the “ADEA”); the Fair Labor Standards Act; Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991 (42 U.S.C. § 1981); the Immigration Reform Control Act; the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the Rehabilitation Act of 1973, as amended; the Employee Retirement Income Security Act of 1974, as amended (whether such subject matter or claims are brought on an individual basis, a class representative basis, or otherwise on behalf of an employee benefit plan or trust); the Kansas Act Against Discrimination, the Kansas Age Discrimination in Employment Act, the Kansas wage payment statutes, and other similar state or local laws; the Americans with Disabilities Act; the Family and Medical Leave Act; the Genetic Information Nondiscrimination Act of 2008; the Worker Adjustment and Retraining Notification Act; the Equal Pay Act; Executive Order 11246; Executive Order 11141; and any other statutory claim, tort claim, employment or other contract or implied contract claim, or common law claim for wrongful discharge, breach of an implied covenant of good faith and fair dealing, defamation, invasion of privacy, or any other claim, arising out of or involving his employment with the Company, his services to the Parent, the termination of his employment with the Company, or involving any other matter, including but not limited to the continuing effects of his employment with the Company, his services to the Parent, or termination of employment with the Company.

 

 

The Executive further acknowledges that he is aware that statutes exist that render null and void releases and discharges of any claims, rights, demands, liabilities, action and causes of action which are unknown to the releasing or discharging party at the time of execution of the release and discharge. The Executive hereby expressly waives, surrenders and agrees to forego any protection to which he would otherwise be entitled by virtue of the existence of any such statute in any jurisdiction including, but not limited to, the State of Kansas. The foregoing notwithstanding, the Company and the Parent hereby acknowledge and agree that the foregoing release shall not apply with respect to (i) to enforce the terms of this Agreement and to receive payment of amounts or benefits hereunder, including, without limitation, the Separation Payment and COBRA Payment, (ii) the Executive’s right to benefits due to terminated employees under any employee benefit plan of the Company, the Parent or any of their affiliates in which the Executive participated (excluding any severance or similar plan or policy), in accordance with the terms thereof (including rights to elect continuation coverage pursuant to Part 6 of Title I of ERISA and Section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”), (iii) the Executive’s right to indemnification as an officer and director of the Company and the Parent in accordance with the Company’s and the Parent’s certificate of incorporation and bylaws and the terms of any indemnification agreement with the Parent and/or the Company to which the Executive is a party as of the date hereof, and to continued coverage under the Company’s and any Directors and Officers liability insurance policies covering directors and officers of the Parent and the Company, as in effect from time to time; and (iv) to release any claims that may not lawfully be waived, including but not limited to any ADEA claims that may arise after the date that the Executive signs this Agreement.

 

10.            Covenant Not to Sue. The Executive, for himself, his heirs, executors, administrators, successors and assigns agrees not to bring, file, claim, sue or cause, assist, or permit to be brought, filed, or claimed any action, cause of action, or proceeding regarding or in any way related to any of the claims described in Paragraph 9 above, and further agrees that this Agreement will constitute and may be pleaded as, a bar to any such claim, action, cause of action or proceeding. If the Executive files a charge or participates in an investigative proceeding of the EEOC or another governmental agency, or is otherwise made a party to any proceedings described in Paragraph 9 above, the Executive will not seek and will not accept any monetary or personal relief or recovery from a Released Party as a result of such EEOC or comparable state or local agency proceeding or subsequent legal actions. Nothing herein limits the Executive’s right to receive an award for information provided to any governmental agencies (including, for the avoidance of doubt, any monetary award or bounty from any governmental agency or regulatory or law enforcement authority in connection with any protected “whistleblower” activity), and nothing herein prevents the Executive from filing a claim for unemployment insurance or workers’ compensation benefits.

 

 

11.            No Disparaging, Untrue Or Misleading Statements. The Executive represents that he has not made, and agrees that he will not make, to any third party any disparaging, untrue, or misleading written or oral statements about or relating to the Company or the Parent, or their products or services (or about or relating to any officer, director, agent, employee, or other person acting on the Company’s or the Parent’s behalf). The Company agrees to direct its “named executive officers,” as such term is defined under Item 402 of Regulation S-K promulgated by the Securities and Exchange Commission, and the members of its Board of Directors, not to make, and use reasonable efforts to ensure that such named executive officers and directors, will not make, to any third party or to employees and directors of the Company and the Parent, any disparaging, untrue, or misleading written or oral statements about or relating to the Executive or the services of the Executive as an employee or director of the Company and Parent. The foregoing provision shall not be effective with respect to any information required to be disclosed by the Executive, Company or named executive officers by the order of a court or administrative agency, subpoena or other legal or administrative demand, nor will it prevent any permitted activity as described in Paragraph 13 below.

 

12.            Protective Agreement. The Executive acknowledges and agrees that he shall continue to be bound by the terms and conditions of Section 4 of the Employment Agreement, the terms of which are incorporated herein by reference; provided that, the parties agree that the noncompetition and non-solicitation periods as set forth under Sections 4(c) and (d) of the Employment Agreement shall be applicable for a period of one year following the Separation Date.

 

In the event that the Executive wishes to pursue an opportunity that may implicate Sections 4(c) or 4(d) of the Employment Agreement, the Executive agrees that he will present the details of such opportunity to the Company’s Chief Administrative Offer, and the Company will act reasonably in considering whether the Executive would be permitted to pursue such opportunity, including in considering whether a potential business activity is competitive with the Business (as defined in the Employment Agreement).

 

13.            Permitted Activities. Notwithstanding any other provision of this Agreement or the Employment Agreement, nothing in this Agreement is intended to, or does, preclude Executive or any other individual from (i) contacting, reporting to, responding to an inquiry from, filing a charge or complaint with, communicating with, or otherwise participating in an investigation conducted by, the EEOC, the Securities and Exchange Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, or any other federal, state, or local governmental agency, commission, or regulatory body; (ii) giving truthful testimony or making statements under oath in response to a subpoena or other valid legal process or in any legal proceeding; (iii) otherwise making truthful statements as required by law or valid legal process; (iv) engaging in any concerted or other legally protected activities; or (v) disclosing a trade secret in confidence to a governmental official, directly or indirectly, or to an attorney, if the disclosure is made solely for the purpose of reporting or investigating a suspected violation of law.

 

 

Furthermore, notwithstanding the provisions herein, the Executive is hereby notified that the immunity provisions in Section 1833 of title 18 of the United States Code provide that an individual cannot not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Executive likewise understands that, if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the Company’s trade secret(s) to his attorney and use the trade secret information in the court proceeding, if the Executive (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.

 

14.            Severability. If any provision of this Agreement shall be found by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, then such provision shall be construed and/or modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. The parties further agree to seek a lawful substitute for any provision found to be unlawful; provided, that, if the parties are unable to agree upon a lawful substitute, the parties desire and request that a court or other authority called upon to decide the enforceability of this Agreement modify the Agreement so that, once modified, the Agreement will be enforceable to the maximum extent permitted by the law in existence at the time of the requested enforcement.

 

15.            Waiver. A waiver by the Company of a breach of any provision of this Agreement by the Executive shall not operate or be construed as a waiver or estoppel of any subsequent breach by the Executive. No waiver shall be valid unless in writing and signed by an authorized officer of the Company.

 

16.            Miscellaneous Provisions.

 

(a)            Representations. The Executive represents and certifies that he has carefully read and fully understands all of the provisions and effects of this Agreement, has knowingly and voluntarily entered into this Agreement freely and without coercion, and acknowledges that the Company advised him to consult with an attorney prior to executing this Agreement. The Executive is voluntarily entering into this Agreement and neither the Company nor Parent nor any of their respective employees, officers, directors, representatives, attorneys or other agents made any representations concerning the terms or effects of this Agreement other than those contained in the Agreement itself and the Executive is not relying on any statement or representation by the Company or any other Released Parties in executing this Agreement. The Executive is relying on his own judgment and that of his attorney to the extent so retained. The Executive also specifically affirms that this Agreement clearly expresses his intent to waive fraudulent inducement claims, and that he disclaims any reliance on representations about any of the specific matters in dispute.

 

 

(b)            Return of Property. In entering into this Agreement or as agreed upon by the Parties, the Executive represents that he has returned or he shall return to the Company all of the Company’s and the Parent’s and their respective subsidiaries’ property that has been in the Executive’s possession, custody or control, including, without limitation, (i) all keys, access cards, badges, credit cards, mobile devices, computer hardware, computer software, data, materials, documents, records, policies, client and customer information, marketing information, design information, specifications and plans, data base information and lists, and any other property or information of the Company, the Parent and their subsidiaries (whether those materials are in paper or computer-stored form), and (ii) all documents and other property containing, summarizing, or describing any Confidential Information (as defined in the Employment Agreement), including all originals and copies. The Executive affirms that (A) he will not retain any such property or information in any form (except as permitted in accordance with the following clause), and will not give copies of such property or information or disclose their contents to any other person (B) within fourteen (14) business days from the Effective Date of this Agreement, the Executive will make his cell phone (and any other personal devices used for work-related communications) available to the Company, or an approved third-party vendor, and provide any necessary information, i.e. pass codes, etc., to allow access to text messages and other communications for the purpose of downloading and electronically retaining the same so the Company is compliant with its requirements as to all applicable legal hold(s); the Executive agrees to preserve all such content on the device(s) prior to the time the Company completes this process.

 

17.            Complete Agreement. This Agreement (and, as referenced herein, the Employment Agreement) sets forth the entire agreement between the parties, and fully supersedes any and all prior agreements or understandings, whether oral or written, between the parties pertaining to actual or potential claims arising from the Executive’s employment with the Company and the Parent or the termination of the Employment Agreement, provided, however, that all obligations, rights, and terms under Sections 4, 8 and 9 of the Employment Agreement, which are incorporated by reference herein, shall not be superseded and shall remain in full force and effect. The Executive expressly warrants and represents that no promise or agreement which is not herein expressed has been made to him in executing this Agreement.

 

18.            No Assignment of Claims. The Executive represents that he has not assigned his rights with respect to any claim that the Executive releases hereunder to any third party.

 

19.            No Admission of Liability. The Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by the Executive. No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Executive or any third party.

 

 

20.            Reimbursement. If the Executive or his heirs, executors, administrators, successors or assigns (a) is in breach of or breaches Paragraphs 9, 10, 11, 12, 16(b) or 21 of this Agreement, or (b) files a lawsuit of any kind or nature against one or more of the Released Parties, or a claim of any kind or nature against one or more of the Released Parties, the Executive or his heirs, executors, administrators, successors or assigns shall be obligated to tender back to the Company, as a contractual remedy hereunder, all payments made to him or them under Paragraph 3 of this Agreement. The Company and the Executive acknowledge that the remedy set forth hereunder is not to be considered a form of liquidated damages and the tender back shall not be the exclusive remedy hereunder.

 

21.            Future Cooperation. Upon the reasonable written request to the Executive by the Company’s general counsel or Board of Directors, the Executive agrees to provide reasonable assistance and cooperation, without the necessity of subpoena, in any matter or matters (including but not limited to any regulatory, law enforcement or judicial investigations or proceedings, mediations, arbitrations or lawsuits, any claim negotiations with customers or suppliers, or otherwise) of which the Company identifies the Executive as potentially having knowledge (or otherwise relating to Executive’s expertise or experience), where deemed appropriate by the Company, including providing information, preparing for, and/or attending any hearing or proceeding (whether relating to the Company’s defense or prosecution of any existing or future actions, arbitrations, claims or litigations or otherwise). The Company will reimburse the Executive for the reasonable costs and expenses incurred by the Executive, including any lost wages, in connection therewith, provided however, that such reimbursements (i) are not intended to influence in any way the testimony Executive gives under oath, and Executive agrees to testify truthfully and (ii) do not encompass attorney’s fees incurred by Executive. The Company’s agreement to reimburse Executive through this Agreement is not based, conditioned or contingent in any way on the substance, content or efficacy of Executive’s testimony, or the outcome of any particular matter.

 

22.            Amendment. This Agreement may not be altered, amended, or modified except in writing signed by both the Executive and the Company.

 

23.            Joint Participation. The parties hereto participated jointly in the negotiation and preparation of this Agreement, and each party has had the opportunity to obtain the advice of legal counsel and to review and comment upon the Agreement. Accordingly, it is agreed that no rule of construction shall apply against any party or in favor of any party. This Agreement shall be construed as if the parties jointly prepared this Agreement, and any uncertainty or ambiguity shall not be interpreted against one party and in favor of the other.

 

24.            Time in Which to Consider. The Executive shall have twenty-one (21) days in which to consider this Agreement, although the Executive may accept this Agreement at any time prior to the expiration of such twenty-one (21)-day period. Any changes to this Agreement, whether material or immaterial, do not restart the running of the consideration period.

 

25.            Revocation and Effective Date. The Executive may revoke any acceptance of this Agreement within seven (7) days, and this Agreement shall not become binding or enforceable until this seven (7) day period has expired without the Executive having so revoked. This Agreement shall become effective on the eighth (8th) day following the Executive’s signing of this Agreement (the “Effective Date”). To revoke this Agreement, the Executive must provide a signed written notice of revocation addressed to Mindy McPheeters, Spirit Senior Vice President, General Counsel & Corporate Secretary, 3801 S. Oliver St., Wichita, Kansas 67210, postmarked or placed for delivery by a common carrier for overnight delivery no later than the seventh (7th) day after the Executive executes this Agreement.

 

 

26.            Dispute Resolution. Any dispute arising out of or relating to this Agreement shall be subject to the dispute resolution provisions set forth in Section 8 of the Employment Agreement, which provisions are hereby incorporated by reference. IN ENTERING INTO THIS AGREEMENT, THE PARTIES ARE KNOWINGLY AND VOLUNTARILY WAIVING THEIR RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING UT OF OR RELATING TO THIS AGREEMENT.

 

27.            Execution of Agreement. This Agreement may be executed in counterparts, each of which shall be considered an original, but which when taken together, shall constitute one Agreement. This Agreement, to the extent signed and delivered by means of a facsimile machine or by PDF file (portable document format file), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the originally signed version delivered in person. At the request of any party hereto, each other party shall re-execute original forms hereof and deliver them to all other parties.

 

 

PLEASE READ THIS AGREEMENT AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING IT. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING THOSE UNDER THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT, AND OTHER FEDERAL, STATE AND LOCAL LAWS PROHIBITING DISCRIMINATION IN EMPLOYMENT.

 

THE EXECUTIVE ACKNOWLEDGES AND UNDERSTANDS THAT HE HAS BEEN AFFORDED TWENTY-ONE (21) DAYS TO CONSIDER THE AGREEMENT AND TO HAVE THE AGREEMENT REVIEWED BY HIS ATTORNEY, IF HE SO CHOOSES. THE EXECUTIVE FURTHER UNDERSTANDS THAT HE HAS SEVEN (7) DAYS TO REVOKE THE AGREEMENT AFTER THE DATE HE SIGNS THE AGREEMENT.

 

IN WITNESS WHEREOF, the Executive, the Company, and the Parent have voluntarily signed this Separation Agreement and General Release consisting of twelve (12) pages effective as of the date set forth by their signatures below.

 

SPIRIT AEROSYSTEMS, INC.			Thomas C. Gentile III
By:	/s/ Justin Welner
	Justin Welner
Its:	Senior Vice President,
	Chief Administration & Compliance Officer		/s/ Thomas C. Gentile III
Date:	October 1, 2023		Date:	October 1, 2023
SPIRIT AEROSYSTEMS HOLDINGS, INC.
By:	/s/ Justin Welner
	Justin Welner
Its:	Senior Vice President,
	Chief Administration & Compliance Officer
Date:	October 1, 2023

 

 

Schedule A

Specified Unvested Awards

 

1	2	3	4	5	6
Grant Name	Grant Date	Shares Underlying Award	“Vesting Date” in February 2024	Vesting Criteria	Number of Shares Vesting on Vesting Date
RSUs	26 Feb. 2021	100,164	26 Feb. 2024	Time	33,388
RSUs	7 Feb. 2022	72,384	7 Feb. 2024	Time	24,128
RSUs	10 Feb. 2023	103,384	10 Feb. 2024	Time	34,462

 

 

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), entered into and effective as of the 30th day of September, 2023 (the “Effective Date”), by and between SPIRIT AEROSYSTEMS, INC., a Delaware corporation (the “Company”), and Patrick M. Shanahan (“Employee”). The Company’s parent company is Spirit AeroSystems Holdings, Inc. (“Holdings”).

 

RECITALS

 

WHEREAS, the Company is engaged in the manufacture, fabrication, maintenance, repair, overhaul, and modification of aircraft and aircraft components and markets and sells its services and products to its customers throughout the world (the “Business”); and

 

WHEREAS, the Company has agreed to employ Employee, and Employee has agreed to serve as the President and Chief Executive Officer of the Company and of Holdings, and Employee has agreed to accept such employment in accordance with the terms and conditions of this Agreement; and

 

WHEREAS, in the course of performing Employee’s duties for the Company, Employee will gain certain confidential and proprietary information belonging to the Company, develop relationships that are vital to the Company’s goodwill, and acquire other important benefits to which the Company has a protectable interest.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing, and the representations, warranties, and covenants hereinafter, the parties hereto agree as follows:

 

Section 1.              Employment. The Company hereby hires Employee as its President and Chief Executive Officer, and Employee agrees to serve in such capacity and to also serve as President and Chief Executive Officer of Holdings, and to perform such duties and services in and about the Business as are appropriate for a person in such positions. Employee shall be Kansas-based during his employment hereunder, and Employee’s office will be at the Company’s headquarters in Wichita, Kansas. Employee shall devote Employee’s full business time to this employment and to Employee’s service to the Company and Holdings. Employee’s employment hereunder shall commence as of the Effective Date and shall continue until termination of the Agreement in accordance with its terms (the “Employment Period”). Employee shall report directly to the Board of Directors of Holdings (the “Board”). During the Employment Period, Employee will continue to serve as a member of the Board, but will serve in the capacity of a non-independent director during such period.

 

Section 2.              Performance. Employee shall use Employee’s reasonable best efforts and skill to faithfully enhance and promote the Business and the welfare and best interests of the Company and Holdings. Employee shall comply with all rules and regulations of the Company and Holdings that are applicable to Employee, follow all laws and regulations of applicable government authorities, and be governed by reasonable decisions and instructions of the Company as are consistent with job duties as described above. Notwithstanding the foregoing, Employee will be permitted to, with the prior written consent of the Board, act or serve as a director, trustee, committee member, or principal of any type of business, civic, or charitable organization as long as (a) such activities are disclosed in writing to the Company’s Global Compliance office in accordance with the Company’s Code of Conduct, and (b) such activities or services do not materially interfere with the performance of Employee’s duties or responsibilities to the Company or Holdings.

 

 

Section 3.              Compensation. Except as otherwise provided for herein, for all services to be performed by Employee in any capacity hereunder, including all services performed for the Company or Holdings and including any services as an officer, director, member of any committee, or any other duties assigned Employee throughout the Employment Period, the Company shall pay or provide Employee with the following, and Employee shall accept the same, as compensation for the performance of Employee’s undertakings and the services to be rendered by Employee:

 

(a)           Base Salary. Employee will be entitled to an annualized salary at the rate of Two Million Dollars ($2,000,000.00) (the “Base Salary”), which shall be paid in accordance with the Company’s policies and procedures as in effect from time to time.

 

(b)           Annual Incentive Compensation. Employee shall not be eligible for annual incentive compensation under the Spirit AeroSystems Holdings, Inc. short-term incentive program (the “STIP”) maintained pursuant to and in accordance with the terms and conditions of the Spirit AeroSystems Holdings, Inc. 2014 Omnibus Incentive Plan, as amended or restated from time to time (the “OIP”).

 

(c)            Long-Term Incentive Awards. Employee will be eligible to receive a one-time award of restricted stock units under the Spirit AeroSystems Holdings Inc. long-term incentive program (the “LTIP”), granted by the Board or its compensation committee, pursuant to and in accordance with the terms and conditions of the OIP and the Company’s standard time-based restricted stock unit award agreement for U.S. participants. Employee’s one-time LTIP award opportunity will have an aggregate target grant date fair value equal to 400% of Base Salary, determined as of the Effective Date. Employee’s LTIP award will be granted as soon as administratively feasible (but in all events within thirty (30) days) following the Effective Date of this Agreement.

 

(d)           Relocation Benefits and Related Perquisites. During the Employment Period, Employee will be entitled to (i) temporary housing in Wichita, Kansas, which shall be provided pursuant to the terms of the Company’s Corporate Domestic Relocation Guide — Level 4 Policy (Senior Vice President and Above), (ii) use of corporate aircraft to travel between Wichita, Kansas and Seattle, Washington, which use shall be provided in accordance with the terms and conditions of the Company’s aircraft policy, and (iii) an automobile allowance provided in accordance with the terms of the Company’s automobile policy.

 

(e)           Other Benefit Plans. Employee shall also be eligible to participate in the Company’s other employee benefit plans, policies, practices, and arrangements as the same may be offered to other officers of the Company from time to time, including, without limitation, (i) any retirement plan, excess or supplementary plan, profit sharing plan, savings plan, health and dental plan, disability plan, survivor income and life insurance plan, executive financial planning program, or other arrangement, or any successors thereto; and (ii) such other benefit plans as the Company may establish or maintain from time to time (collectively the “Benefit Plans”); provided, however, that nothing in this Section 3(e) shall be construed as providing for participation in the Company’s STIP or Deferred Compensation Plan. Employee’s entitlement to any other compensation or benefits shall be determined in accordance with the terms and conditions of the Benefit Plans and other applicable programs, practices, and arrangements then in effect.

 

 

(f)            Earned Time Off. Employee will be provided with earned time off and twelve (12) paid holidays each year in accordance with the Company’s policies and practices in effect from time to time. Notwithstanding any contrary policy or practice, however, Employee will be credited with a minimum of twenty-five (25) days of earned time off per year.

 

(g)           Fringe Benefits. Employee will be provided with all fringe benefits and perquisites in accordance with the Company’s policies as the same may be amended from time to time.

 

(h)           Withholding Taxes. The Company shall have the right to deduct from all payments made to Employee hereunder any federal, state, or local taxes required by law to be withheld.

 

(i)            Expenses. During Employee’s employment, the Company shall promptly pay or reimburse Employee for all reasonable out-of-pocket expenses incurred by Employee in the performance of duties hereunder in accordance with the Company’s policies and procedures then in effect.

 

The Company and Employee each acknowledge that amounts paid under this Agreement, the OIP or the other Benefit Plans are subject to any policy on the recovery of compensation (i.e., a so-called “clawback policy”), as it exists now or as later adopted, and as thereafter amended from time to time. The Company hereby represents and affirms that the size of the LTIP award provided hereunder was not determined wholly or in part by a Company financial reporting measure.

 

Section 4.               Restrictions.

 

(a)           Acknowledgements. Employee acknowledges and agrees that: (i) during the term of Employee’s employment, because of the nature of Employee’s responsibilities and the resources provided by the Company, Employee will acquire valuable and confidential skills, information, trade secrets, and relationships with respect to the Business; (ii) Employee may develop on behalf of the Company and Holdings a personal acquaintance and/or relationship with various persons, including, but not limited to, customers and suppliers, which acquaintances may constitute the Company’s or Holdings’ only contact with such persons, and, as a consequence of the foregoing, Employee will occupy a position of trust and confidence with respect to the Company’s and Holdings’ affairs; (iii) the Business involves the marketing and sale of the Company’s products and services to customers throughout the entire world, the Company’s and Holdings’ competitors, both in the United States and internationally, consist of both domestic and international businesses, and the services to be performed by Employee for the Company and Holdings involve aspects of both the Company’s and Holdings’ domestic and international business; and (iv) it would be impossible or impractical for Employee to perform Employee’s duties for the Company and Holdings without access to the Company’s and Holdings’ confidential and proprietary information and contact with persons that are valuable to the goodwill of the Company and Holdings. Employee acknowledges that if Employee went to work for, or otherwise performed services for, a third party engaged in a business substantially similar to the Business, the disclosure by Employee to a third party of such confidential and proprietary information and/or the exploitation of such relationships would harm the Company’s and Holdings’ Business.

 

 

(b)           Reasonableness. In view of the foregoing and in consideration of the remuneration to be paid to Employee, Employee agrees that it is reasonable and necessary for the protection of the goodwill and business of the Company and Holdings and their respective subsidiaries as may exist from time to time (collectively, the Company, Holdings and their respective subsidiaries as may exist from time to time are referred to herein as the “Company Group”) that Employee make the covenants contained in this Agreement regarding the conduct of Employee during and subsequent to Employee’s employment by the Company, and that the Company Group may suffer injury if Employee engages in conduct prohibited by this Agreement.

 

(c)            Non-Compete. During the term of Employee’s employment by the Company and for a period of (i) in the case of involuntary termination by the Company without Cause or termination by Employee for Good Reason, one (1) year after termination of employment, and (ii) in the case of termination of employment for any other reason, two (2) years after termination of such employment, Employee shall not, directly or indirectly, anywhere in the world: own, manage, operate, control, be employed by, solicit sales for, invest in, participate in, advise, consult with, or be professionally invested in or engaged with the ownership, management, operation, or control of any business which is engaged, in whole or in part, in the Business, or any business that is competitive therewith or any portion thereof, except in each case for the exclusive benefit of the Company Group; provided, however, that Employee shall not be deemed to have breached this provision if (A) Employee’s sole relation with any such entity consists of Employee’s holding, directly or indirectly, not greater than two percent (2%) of the outstanding securities of a company which are either listed on or through a national securities exchange or owned through an investment in a private equity or other commingled fund, or (B) Employee provides services to (or owns the related equity of) such an entity so long as the combined revenues of such entity and its affiliates relating to the competition with the Business or competitive activities as described in this paragraph represent in the aggregate less than five percent (5%) of the combined revenues of such entity and its affiliates and so long as Employee has no direct involvement in any activities that compete with the Business.

 

(d)            Non-Solicitation. In addition, during the term of Employee’s employment by the Company and for a period of (i) in the case of involuntary termination by the Company without Cause or termination by Employee for Good Reason, one (1) year after termination of employment, and (ii) in the case of termination of employment for any other reason, two (2) years after termination of such employment, Employee shall not, directly or indirectly: solicit or take any action to induce (A) any employee to quit or terminate their employment with any member of the Company Group other than in connection with Employee’s good faith performance of his duties during the Employment Period or (B) any customer to cease doing business with, or reduce or modify its business with, any member of the Company Group other than in connection with Employee’s good faith performance of his duties during the Employment Period. This Section 4(d) shall not prohibit general solicitations for employment not specifically directed at employees of any member of the Company Group.

 

 

(e)           Confidentiality.

 

(i)           Confidential Information. For purposes of this Agreement, “Confidential Information” means any information (whether in written, oral, graphic, schematic, demonstration, or electronic format, whether or not specifically marked or identified as confidential, and whether obtained by Employee before or after the Effective Date), not otherwise publicly disclosed by a member of the Company Group, regarding (without limitation) any member of the Company Group, or their Business, customers, suppliers, business partners, prospects, contacts, contractual arrangements, discussions, negotiations, evaluations, labor negotiations, bids, proposals, aircraft programs, costs, pricing, financial condition or results, plans, strategies, governmental relations, projections, analyses, methods, processes, models, tooling, know-how, trade secrets, discoveries, research, developments, inventions, engineering, technology, proprietary information, intellectual property, designs, computer software, intelligence, legal or regulatory compliance, accounting decisions, opportunities, challenges, and any other information of a confidential or proprietary nature or that is competitively valuable to any member of the Company Group by virtue of not being generally known to the public. Notwithstanding the foregoing, Confidential Information will not include any information that (A) Employee is required to disclose by a court order, subpoena, or other legal demand, so long as (1) Employee gives the Company written notice and an opportunity to contest or seek confidential treatment of such disclosure; and (2) Employee fully cooperates at the Company’s expense with any such contest or confidential treatment request; (B) has been otherwise publicly disclosed, or made publicly available by Company or Holdings; or (C) was obtained by Employee in good faith from a source that was under no obligation of confidentiality to any member of the Company Group or any customer or supplier.

 

(ii)            Non-Use and Non-Disclosure. Without the express written consent of the Company or Holdings, Employee will not at any time (whether during the Employment Period or after any termination of employment for any reason) use for any purpose (other than for the exclusive benefit of the Company and Holdings) or disclose to any person (except at the direction of the Company or Holdings) any Confidential Information.

 

 

(iii)          Permitted Disclosures. Notwithstanding the foregoing or any other provision of this Agreement, and specifically Section 4(e)(ii) above, nothing in this Agreement or in any other agreement between Employee and the Company or Holdings is intended to, or does, preclude Employee from (A) contacting, reporting to, responding to an inquiry from, filing a charge or complaint with, communicating with, or otherwise participating in an investigation conducted by the U.S. Securities and Exchange Commission, or any other federal, state, or local governmental agency, commission, or regulatory body; (B) giving truthful testimony or making statements under oath in response to a subpoena or other valid legal process or in any legal proceeding; (C) otherwise making truthful statements as required by law or valid legal process; (D) engaging in any other legally protected activities; or (E) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Furthermore, pursuant to the Defend Trade Secrets Act of 2016, Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (1) is made (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Employee likewise understands that, if he files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Employee may disclose the trade secret(s) of the Company or Holdings to Employee’s attorney and use the trade secret information in the court proceeding, if Employee (I) files any document containing the trade secret under seal; and (II) does not disclose the trade secret, except pursuant to court order.

 

(f)            Effect of Breach. Employee agrees that a breach of this Section 4 cannot adequately be compensated by money damages and, therefore, each member of the Company Group shall be entitled, in addition to any other right or remedy available to it (including, but not limited to, an action for damages), to seek an injunction restraining such breach or a threatened breach and to specific performance of such provisions, and Employee hereby consents to the issuance of such injunction and to the ordering of specific performance, without the requirement of any member of the Company Group to post a bond or other security.

 

(g)           Other Rights Preserved. Nothing in this Section eliminates or diminishes rights which the Company may have with respect to the subject matter hereof under any other agreements, governing statutes, or under provisions of law, equity, or otherwise.

 

(h)           Section 409A. The Company and Employee intend that the payments and benefits provided for in this Agreement either be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), or be provided in a manner that complies with Section 409A of the Code, and any ambiguity herein shall be interpreted so as to be consistent with the intent of this Section 4(h). Employee acknowledges that Section 409A of the Code places responsibility for additional taxes and penalties on Employee and not the Company in the event of a breach of the provisions of Section 409A of the Code. Notwithstanding anything contained herein to the contrary, all payments and benefits under Section 6(b) of this Agreement shall be paid or provided only at the time of a termination of Employee’s employment that constitutes a “separation from service” from the Company within the meaning of Section 409A of the Code and the regulations and guidance promulgated thereunder (determined after applying the presumptions set forth in Treas. Reg. Section 1.409A-1(h)(1)). Further, if at the time of Employee’s termination of employment with the Company, Employee is a “specified employee” as defined in Section 409A of the Code as determined by the Company in accordance with Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in payments or benefits ultimately paid or provided to Employee) until the date that is at least six (6) months following Employee’s termination of employment with the Company (or the earliest date permitted under Section 409A of the Code), whereupon the Company will pay Employee a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to Employee under this Agreement during the period in which such payments or benefits were deferred. Thereafter, payments will resume in accordance with this Agreement. For purposes of Section 409A of the Code, each of the payments that may be made under this Agreement are designated as separate payments.

 

 

Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any calendar year shall not affect in-kind benefits or reimbursements to be provided in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Employee and, if timely submitted, reimbursement payments shall be promptly made to Employee following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred. In no event shall Employee be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred. This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Employee.

 

Additionally, in the event that following the date hereof the Company or Employee reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and Employee shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (i) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

 

Section 5.              Termination. This Agreement and Employee’s employment shall terminate upon the following circumstances:

 

(a)           Without Cause. At any time at the election of either Employee or the Company for any reason or no reason, without Cause (as defined below), but subject to the provisions of this Agreement. It is expressly understood that Employee’s employment is strictly “at will” and may be terminated by either party at any time.

 

(b)           Cause. At any time at the election of the Company for Cause. “Cause” for this purpose shall mean (i) Employee’s commission of a material breach of this Agreement or acts involving fraud, material and intentional dishonesty, material and intentional unauthorized disclosure of Confidential Information, the commission of a felony or other crime involving moral turpitude, or material violation of policies of any member of the Company Group made available to Employee; (ii) direct and deliberate acts constituting a material breach of Employee’s duty of loyalty to any member of the Company Group; (iii) Employee’s refusal or material failure (other than by reason of a Disability (as defined below)) to perform Employee’s job duties and responsibilities, including, but not limited to, any duties or responsibilities reasonably assigned to Employee by the Board, if such refusal or failure is not remedied within thirty (30) days after Employee receives written notice thereof from the Board; or (iv) (v) Employee’s inability to obtain and maintain the appropriate level of United States security clearance.

 

 

(c)           Good Reason. At any time (subject to the notice and cure provisions included in this clause (c)) at the election of Employee for Good Reason. “Good Reason” for this purpose shall mean the occurrence of any of the following, in each case during the Employment Period and without Employee’s consent: (i) a material diminution in Employee’s Base Salary, other than a general reduction in Base Salary that does not exceed twenty percent (20%) and that affects similarly situated executives in substantially the same proportions; (ii) a material diminution in Employee’s title, authority, duties, reporting relationships or responsibilities; (iii) a requirement that Employee report to anyone other than the Board; or (iv) any other action or inaction with respect to the terms and conditions of Employee’s employment that constitutes a material breach by the Company of this Agreement. Employee cannot terminate employment for Good Reason unless (A) Employee has provided written notice to the Company of the existence of the circumstances providing grounds for termination for Good Reason within 30 days of the initial existence of the condition; (B) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Company; and (C) the date of Employee’s termination of employment must occur within ninety (90) days after the initial existence of the condition specified in such notice.

 

(d)           Death or Disability. Upon Employee’s death or Employee being unable, due to physical or mental disability (and after giving effect to reasonable accommodation, if available and required by applicable law), to render the services required to be rendered by Employee for a period of one hundred eighty (180) days during any twelve (12)-month period (“Disability”).

 

Section 6.               Effect of Termination.

 

(a)           Termination Other than Section 6(b). If Employee’s employment is terminated for any reason other than as described in Section 6(b) below, the Company will pay Employee’s compensation only through the last day of the Employment Period (less any amounts the Company may offset or deduct as specified in this Agreement or as otherwise permitted), and, except as may otherwise be expressly provided in this Agreement (including Section 3(e) hereof) or the OIP, the LTIP, or in any Benefit Plan, the Company shall have no further obligation to Employee.

 

(b)           Non-Cause, Good Reason, Death, Disability, Retirement.

 

(i)           If Employee’s employment is terminated by the Company without Cause or is terminated by Employee for Good Reason (each, a “Qualifying Termination”), then for as long as Employee complies with his continuing obligations under Section 4, Employee will be treated as one hundred percent (100%) vested in all time-based LTIP awards granted to Employee pursuant to this Agreement. The treatment of all outstanding LTIP awards granted to Employee during the Employment Period shall otherwise be governed by the terms of the OIP, the LTIP, and the applicable award agreements thereunder, including the terms thereunder that provide for 100% vesting upon Employee’s death, Disability, or Retirement (as such term is defined under the applicable LTIP award agreements).

 

(ii)           Further, if Employee experiences a Qualifying Termination within twelve (12) months after a Change in Control (as defined below) (such termination, a “CIC Termination”), then as long as Employee complies with his continuing obligations under Section 4, Employee will receive severance in an amount equal to one (1) times Employee’s then-current annualized Base Salary rate, which severance will be payable in a single lump-sum cash payment within sixty (60) days following the date of termination, and, if, and only if, such CIC Termination occurs prior to the one (1) year anniversary of the Effective Date, Employee will also receive an additional single lump-sum cash payment within sixty (60) days following the date of termination, equal to the remaining amount of Base Salary that Employee would have received if Employee would have remained employed from the applicable date of termination through the one (1) year anniversary of the Effective Date.

 

 

(iii)         “Change in Control” means, for purposes of this Agreement, (A) a transaction pursuant to which a Person, or more than one Person acting as a group, acquires more than fifty percent (50%) of the total voting power of Holdings (including, but not limited to, acquisition by merger, consolidation, recapitalization, reorganization or sale or transfer of the Holdings’ equity interests); (B) a merger or consolidation involving Holdings in which Holdings is not the surviving entity; (C) a transaction that is a sale or transfer of all or substantially all of the assets of Holdings or the Company, if all or substantially all of the proceeds from such transaction are distributed to the stockholders of Holdings; or (iv) a majority of the members of the Board are replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election. Capitalized Terms used in this definition, but not defined herein shall have the meaning assigned to them in the OIP.

 

(c)           Release. With respect to any severance payable and accelerated vesting of previously unvested time-based LTIP awards that occurs solely by virtue of the operation of Section 6(c), Employee shall be entitled to such severance and vesting only if he signs an agreement acceptable to the Company (in a form that will be provided to Employee by the Company within seven (7) days following the end of the Employment Period, which form shall not contain additional restrictive covenants and which form, to the extent it includes any non-disparagement covenants, will reflect mutual obligations, the scope of which shall be established by the Company) that releases the Company and each other member of the Company Group from all actions, suits, claims, proceedings and demands, including those related to the Employment Period and the termination of employment (except for rights to benefits provided under Section 6(b) of this Agreement and under the Benefit Plans or as may otherwise be expressly provided in this Agreement). Employee must sign and tender the release as described above not later than sixty (60) days following Employee’s last day of employment, or such earlier date as required by the Company, and if Employee fails or refuses to do so (or if Employee exercises any revocation right as set forth in the release), Employee shall forfeit the right to such severance and accelerated vesting pursuant to Section 6(b) that would otherwise be due and payable. If vesting is accelerated solely pursuant to Section 6(b) of this Agreement, such vesting will occur as soon as administratively feasible following the execution and non-revocation of the release described in this Section 6(c). For the sake of clarity, the release requirements included in this Section 6(c) shall not apply to the extent that vesting of Employee’s LTIP awards occurs pursuant to the terms of the OIP, LTIP, and award agreement and absent the application of Section 6(b) of this Agreement.

 

(d)           Return of Property. Upon termination of employment, and at any other time upon the Company’s request, Employee shall deliver all trade secret, confidential information, records, notes, data, memoranda, and equipment of any nature that are in Employee’s possession or under Employee’s control and that are the property of any member of the Company Group or relate to the business of the Company Group, and Employee shall pay to the Company any amounts due and owing from Employee to the Company as specified in this Agreement; provided, however, Employee shall be permitted to retain his personal address book and his cell phone number.

 

 

(e)           Survival. Employee’s obligations under Section 4 through Section 9 of this Agreement shall survive the expiration or termination of this Agreement and the end of the Employment Period. The Company shall have no obligation to provide the accelerated vesting set forth in Section 6(c) above unless and until Employee has fully complied with Employee’s obligations under this Section 6.

 

Section 7.               Representations and Warranties.

 

(a)           No Conflicts. Employee represents and warrants to the Company and Holdings that Employee is under no duty (whether contractual, fiduciary, or otherwise) that would prevent, restrict, or limit Employee from fully performing all duties and services for the Company and Holdings, and the performance of such duties and services shall not conflict with any other agreement or obligation to which Employee is bound. Employee agrees to comply with all obligations that Employee may have to prior employers and other third parties in the course of his employment with or service to the Company and Holdings.

 

(b)           No Hardship. Employee represents and acknowledges that Employee’s experience and/or abilities are such that observance of the covenants contained in this Agreement will not cause Employee any undue hardship and will not unreasonably interfere with Employee’s ability to earn a livelihood.

 

Section 8.               Alternative Dispute Resolution.

 

(a)            Mediation. Employee and the Company Group agree to submit, prior to arbitration, all unsettled claims, disputes, controversies, and other matters in question between them arising out of or relating to this Agreement (including but not limited to any claim that the Agreement or any of its provisions is invalid, illegal, or otherwise voidable or void) or the dealings or relationship between Employee and the Company or Holdings (“Disputes”) to mediation in Wichita, Kansas and in accordance with the Commercial Mediation Rules of the American Arbitration Association then in effect. The mediation shall be private, confidential, voluntary, and nonbinding. Any party may withdraw from the mediation at any time before signing a settlement agreement upon written notice to each other party and to the mediator. The mediator shall be neutral and impartial. The mediator shall be disqualified as a witness, consultant, expert, or counsel for either party with respect to the matters in Dispute and any related matters. The Company Group and Employee shall pay their respective attorneys’ fee and other costs associated with the mediation, and the Company Group and Employee shall equally bear the costs and fees of the mediator. If a Dispute cannot be resolved through mediation within ninety (90) days of being submitted to mediation, the parties agree to submit the Dispute to arbitration.

 

 

(b)           Arbitration. Subject to Section 8(a), all Disputes will be submitted for binding arbitration to the American Arbitration Association on demand of either party. Such arbitration proceeding will be conducted in Wichita, Kansas and, except as otherwise provided in this Agreement, will be heard by one (1) arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) and not by any state arbitration law. The arbitrator will have the right to award or include in his award any relief which he deems proper under the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and reasonable attorneys’ fees and costs, provided that the arbitrator will not have the right to amend or modify the terms of this Agreement. The award and decision of the arbitrator will be conclusive and binding upon all parties hereto, and judgment upon the award may be entered in any court of competent jurisdiction. Except as specified above, the Company Group and Employee shall pay their respective attorneys’ fees and other costs associated with the arbitration, and the Company shall solely bear the costs and fees of the arbitrator. Nothing in this Section shall preclude Employee from filing a charge or complaint with a federal, state or other governmental administrative agency, and nothing herein will require the arbitration of claims that, as a matter of applicable law, the parties cannot agree to arbitrate.

 

(c)           Confidentiality. Employee and the Company agree that they will not disclose, or permit those acting on their behalf to disclose, any aspect of the proceedings under Section 8(a) and Section 8(b), including but not limited to the resolution or the existence or amount of any award, to any person, firm, organization, or entity of any character or nature, unless divulged (i) to an agency of the federal or state government, (ii) pursuant to a court order, (iii) pursuant to a requirement of law, (iv) pursuant to prior written consent of the other party, or (v) pursuant to a legal proceeding to enforce a settlement agreement or arbitration award. This provision is not intended to prohibit nor does it prohibit Employee’s or the Company’s disclosures of the terms of any settlement or arbitration award to their attorney(s), accountant(s), financial advisor(s), or family members, provided that they comply with the provisions of this paragraph and the Company or Employee, as the case may be, shall be responsible for any non-compliance with this paragraph by persons to whom any such terms have been disclosed pursuant to this sentence.

 

(d)           Injunctions. Notwithstanding anything to the contrary contained in this Section 8, the Company Group and Employee shall have the right in a proper case to obtain temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that the Company Group and Employee must contemporaneously submit the Disputes for nonbinding mediation under Section 8(a) and then for arbitration under Section 8(b) on the merits as provided herein if such Disputes cannot be resolved through mediation.

 

(e)           THE PARTIES ACKNOWLEDGE THAT, IN ENTERING INTO THIS SECTION 8, THEY ARE KNOWINGLY AND VOLUNTARILY WAIVING THEIR RIGHTS TO A JURY TRIAL.

 

 

Section 9.               General.

 

(a)           Notices. All notices required or permitted under this Agreement shall be in writing, may be made by personal delivery or facsimile transmission, effective on the day of such delivery or receipt of such transmission, or may be mailed by registered or certified mail, effective two (2) days after the date of mailing, addressed as follows:

 

To the Company:

 

Spirit AeroSystems, Inc.

Attention: Mindy McPheeters, 

Senior Vice President, General Counsel, and Corporate Secretary
3801 S. Oliver 

P.O. Box 7780008, Mail Code K11-60
Wichita, KS 67278-0008 

E-mail:

 

or such other person or address as designated in writing to Employee.

 

To Employee:

 

Patrick M. Shanahan 

at Employee’s last known residence address or to such other address as designated by Employee in writing to the Company.

 

(b)           Successors. Neither this Agreement nor any right or interest therein shall be assignable or transferable (whether by pledge, grant of a security interest, or otherwise) by Employee or Employee’s beneficiaries or legal representatives, except by will, by the laws of descent and distribution, or inter vivos revocable living grantor trust as Employee’s beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns, and Employee and shall be enforceable by them and Employee’s heirs, legatees, and legal personal representatives, provided that the Company may not assign this Agreement except to an acquirer of all or substantially all of its assets and then only if the assignee assumes the obligations hereunder in writing or operation of law. Holdings is an intended beneficiary of Employee’s covenants, representations and warranties that are applicable to it and shall be entitled to enforce and rely upon such provisions.

 

(c)            Waiver, Modification, and Interpretation. No provisions of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in a writing signed by Employee and an appropriate officer of the Company empowered to sign the same by the Board. No waiver by either party at any time of any breach by the party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of Kansas; provided, however, that the corporate law of the state of incorporation of the Company’s parent shall govern issues related to the issuance of shares of its common stock. Except as provided in Section 8, any action brought to enforce or interpret this Agreement shall be maintained exclusively in the state and federal courts located in Wichita, Kansas.

 

(d)           Interpretation. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement. No provision of this Agreement shall be interpreted for or against any party hereto on the basis that such party was the draftsman of such provision; and no presumption or burden of proof shall arise disfavoring or favoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

 

(e)           Counterparts. The Company and Employee may execute this Agreement in any number of counterparts, each of which shall be deemed to be an original but all of which shall constitute but one instrument. In proving this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

 

(f)            Invalidity of Provisions. If a court of competent jurisdiction shall declare that any provision of this Agreement is invalid, illegal, or unenforceable in any respect, and if the rights and obligations of the Parties to this Agreement will not be materially and adversely affected thereby, in lieu of such illegal, invalid, or unenforceable provision the court may add as a part of this Agreement a legal, valid, and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as is possible. If such court cannot so substitute or declines to so substitute for such invalid, illegal, or unenforceable provision, (i) such provision will be fully severable; (ii) this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; and (iii) the remaining provisions of this Agreement will remain in full force and effect and not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom. The covenants contained in this Agreement shall each be construed to be a separate agreement independent of any other provision of this Agreement, and the existence of any claim or cause of action of Employee against the Company, predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of said covenants.

 

(g)           Entire Agreement. This Agreement (together with the documents expressly referenced herein) constitutes the entire agreement between the parties, supersedes in all respects any prior agreement between the Company and Employee and may not be changed except by a writing duly executed and delivered by the Company and Employee in the same manner as this Agreement.

 

(h)           No Mitigation. Employee shall not be required, as a condition to receiving any payments or benefits under this Agreement, to seek or obtain any other employment after any termination of employment hereunder or to take any steps to reduce the amount of any payment or benefit described in this Agreement. Further, the amount of any payment or benefit provided in this Agreement shall not be reduced by any compensation earned by Employee as the result of any employment by another employer or other compensation for services.

 

(i)            Indemnity. The Company will indemnify Employee to the same extent the Company indemnifies other comparable level executives of the Company consistent with the Company’s Certificate of Incorporation and Bylaws.

 

 

(j)            Excess Parachute Payments. If any portion of the payments or benefits under this Agreement, or under any other agreement with Employee or any plan of the Company or its affiliates (in the aggregate, “Total Payments”), would constitute an “excess parachute payment” and would, but for this paragraph, result in the imposition on Employee of an excise tax under Section 4999 of the Code (the “Excise Tax”), then the Total Payments to be made to Employee shall either be (i) delivered in full, or (ii) delivered in such amount so that no portion of such Total Payments would be subject to the Excise Tax, whichever of the foregoing results in the receipt by Employee of the greatest benefit on an after-tax basis (taking into account the applicable federal, state and local income taxes and the Excise Tax) and the reduction will be made in such manner that results in the maximum amount to be retained by Employee and is in compliance with Code sections 280G and 409A. The determination required by this paragraph shall be made by the Company in its reasonable determination and in reliance on its tax advisors.

 

[Signature page follows.]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first written above to be effective on the Effective Date.

 

SPIRIT AEROSYSTEMS, INC. (the “Company”)

 

By:

/s/ Justin Welner

	Name: Justin Welner
	Title: Senior Vice President/Chief Administration & Compliance Officer

  

“Employee”

 

	/s/ Patrick M. Shanahan
	Patrick M. Shanahan

 

SPIRIT AEROSYSTEMS, HOLDINGS, INC. (“Holdings”)

 

By:

/s/ Justin Welner

	Name: Justin Welner
	Title: Senior Vice President/Chief Administration & Compliance Officer
	Signed by Holdings solely for purposes of acknowledging and agreeing to Sections 3(b), 3(c), 6(b), and 8, and those provisions of the Agreement necessary to interpret and apply them.

 

Signature Page

 

 

Exhibit 99.1

 

 

Spirit AeroSystems Announces Leadership Transition

 

Patrick M. Shanahan Appointed Interim President and Chief Executive Officer

 

Thomas C. Gentile III No Longer Serves as President, Chief Executive Officer and Director

 

Company to Release Third Quarter Financial Results November 1, 2023

 

WICHITA, Kan. – Oct. 2, 2023 – Spirit AeroSystems Holdings, Inc. (NYSE: SPR) (together with its subsidiary, Spirit AeroSystems, Inc., the “Company,” “Spirit” or “Spirit AeroSystems”) today announced that Patrick M. Shanahan, a member of the Company's Board of Directors (the “Board”), has been appointed interim President and Chief Executive Officer, effective immediately. Mr. Shanahan succeeds Thomas C. Gentile III as President and Chief Executive Officer. Mr. Gentile has resigned as a member of the Board, effective September 30, 2023. The Company’s Board will conduct a search to identify a new Chief Executive Officer.

 

“Spirit plays a vital role in the aerospace industry and is well-positioned to fulfill the growing demand in this important market,” said Robert D. Johnson, Chair of the Board. “Pat is a seasoned executive with nearly four decades of commercial and defense aerospace leadership and senior Department of Defense experience, and he has a valuable customer perspective. I am confident that his leadership will ensure a smooth transition for all of our stakeholders as we look to identify a new Chief Executive Officer.”

 

Mr. Johnson continued, “On behalf of the entire Board, I thank Tom for his contributions during the last seven years leading the Company through some of the most challenging times that the industry has faced. We wish him the best in his future endeavors.”

 

Mr. Shanahan’s career spans both commercial and military programs, including 31 years with The Boeing Company and service as Deputy Secretary of Defense and Acting Secretary of Defense. As the 33^rd Deputy Secretary of Defense, Mr. Shanahan helped lead the development of key Department of Defense policies and strategies. Mr. Shanahan has served on the Spirit AeroSystems Board since November 2021.

 

“I believe Spirit possesses the assets, know-how and talent to satisfy the extraordinary aviation demand and mitigate global supply chain challenges,” said Mr. Shanahan. “I look forward to working closely with our stakeholders, the Board and the Spirit team to meet all of our customer commitments, build teamwork, stabilize operations and drive improved cash flow.”

 

  

“It has been my honor to lead Spirit, strengthen its capabilities, and grow its global enterprise,” said Mr. Gentile. “With positive market trends and opportunities ahead, I am as confident as ever in the team’s ability to effectively navigate a challenging macro environment and deliver on its commitments to our customers and shareholders.”

 

Mr. Gentile will serve as a consultant to the Company for a period of three months to ensure a smooth transition.

 

Third Quarter 2023 Financial Results

 

The Company also announced that it will release its third quarter 2023 financial results at 6:30 a.m. Central Daylight Time (CDT) on Wednesday, November 1, 2023.

 

Mr. Shanahan will be joined by Spirit's Senior Vice President and Chief Financial Officer Mark Suchinski on a conference call presentation about third quarter 2023 results at 10 a.m. CDT.

 

That presentation will be broadcast online and include a question-and-answer session. The Company's news release detailing the results will also be available. The live audio stream and slide presentation can be accessed November 1, 2023, at http://investor.spiritaero.com/.

 

About Patrick M. Shanahan

 

Patrick M. Shanahan served as the 33rd Deputy Secretary of Defense, where he helped lead the development of key Department of Defense policies and strategies. Mr. Shanahan served at The Boeing Company for more than three decades, including as Senior Vice President, Supply Chain and Operations, Senior Vice President, Commercial Airplane Programs, Vice President and General Manager of the 787 Dreamliner, Vice President and General Manager of Boeing Missile Defense Systems, and Vice President and General Manager of Boeing Rotorcraft Systems. Mr. Shanahan is a National Academy of Engineering Member, Royal Aeronautical Society Fellow, Society of Manufacturing Engineers Fellow and American Institute of Aeronautics and Astronautics Associate Fellow. He served as a regent at the University of Washington for over five years. Mr. Shanahan currently serves on the boards of Leidos Holdings, Inc. and CAE Inc. Shanahan holds a bachelor’s degree in mechanical engineering from the University of Washington, a master’s degree in mechanical engineering from the Massachusetts Institute of Technology (MIT), and an MBA from the MIT Sloan School of Management.

 

On the web: www.spiritaero.com

 

On X (formerly Twitter): @SpiritAero

 

Contacts:

 

Media:	Chuck Cadena
	(316) 526-3910
	chuck.cadena@spiritaero.com

 

Forrest Gossett

(316) 371-6751

forrest.s.gossett@spiritaero.com

 

Investor Relations:

(316) 523-7040

Ryan Avey

ryan.d.avey@spiritaero.com

 

  

About Spirit AeroSystems

 

Spirit AeroSystems is one of the world's largest manufacturers of aerostructures for commercial airplanes, defense platforms, and business/regional jets. With expertise in aluminum and advanced composite manufacturing solutions, the company's core products include fuselages, integrated wings and wing components, pylons, and nacelles. Also, Spirit serves the aftermarket for commercial and business/regional jets. Headquartered in Wichita, Kansas, Spirit has facilities in the U.S., U.K., France, Malaysia and Morocco. More information is available at www.spiritaero.com.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that may involve many risks and uncertainties. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "aim," "anticipate," "believe," "could," "continue," "estimate," "expect," "goal," "forecast," "intend," "may," "might," "objective," "outlook," "plan," "predict," "project," "should," "target," "will," "would," and other similar words, or phrases, or the negative thereof, unless the context requires otherwise. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. We caution investors not to place undue reliance on any forward-looking statements. Important factors that could cause actual results to differ materially from those reflected in such forward-looking statements and that should be considered in evaluating our outlook include, without limitation, the continued fragility of the global aerospace supply chain; our ability to accurately estimate and manage performance, cost, and revenue under our contracts; our ability and our suppliers' ability or willingness to meet stringent delivery requirements; the impact of significant health events (including the COVID-19 pandemic) on our business and operations; the timing and conditions surrounding the full worldwide return to service (including receiving the remaining regulatory approvals) of the B737 MAX, future demand for the aircraft, and any residual impacts of the B737 MAX grounding on production rates for the aircraft; our reliance on Boeing for a significant portion of our revenues; our ability to execute our growth strategy, including our ability to complete and integrate acquisitions; the Company's dependence on its workforce, including its ability to employ sufficient numbers of qualified employees to effectively and efficiently maintain its operations; demand for our products and services; the effect of economic or geopolitical conditions in the industries and markets in which we operate in the U.S. and globally; our ability to manage our liquidity, borrow additional funds or refinance debt; and other factors disclosed in our filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022. These factors are not exhaustive and it is not possible for us to predict all factors that could cause actual results to differ materially from those reflected in our forward-looking statements. These factors speak only as of the date hereof, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. Except to the extent required by law, we undertake no obligation to, and expressly disclaim any obligation to, publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

  

v3.23.3

Cover	Sep. 30, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Entity File Number	001-33160
Entity Registrant Name	Spirit AeroSystems Holdings, Inc.
Entity Central Index Key	0001364885
Entity Tax Identification Number	20-2436320
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3801 South Oliver
Entity Address, City or Town	Wichita
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	67210
City Area Code	316
Local Phone Number	526-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock, par value $0.01 per share
Trading Symbol	SPR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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