EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
26th
day of May, 2009 by and between Aerosonic Corporation, hereinafter called “the
Company,” and Xxxxx X. Xxxxxxx, hereinafter called “Executive,” and provides as
follows:
RECITALS
WHEREAS,
the Company desires to hire Executive as Executive Vice President and Chief
Financial Officer and Executive desires to serve in such capacity, subject to
the terms provided herein; and
WHEREAS,
the parties have mutually agreed upon the terms and conditions of Executive’s
employment by the Company as hereinafter set forth.
TERMS OF
AGREEMENT
NOW,
THEREFORE, for and in consideration of the premises and of the mutual promises
and undertakings of the parties as hereinafter set forth, the parties covenant
and agree as follows:
Section
1. Employment. Executive
shall be employed as Executive Vice President and Chief Financial Officer
of the Company. He shall perform such services for the Company as may
be assigned to Executive from time to time upon the terms and conditions
hereinafter set forth. Executive shall report to the Chief Executive
Officer of the Company.
Section
2. Term. This
Agreement shall commence on May 26, 2009, (the “Effective Date”), and
Executive’s employment shall be “at will” and may be terminated by Executive or
the Company in accordance with Section 10 of this
Agreement.
Section
3.
Exclusive
Service. Executive shall devote his best efforts and full time
to rendering services on behalf of the Company in furtherance of its best
interests. Executive shall comply with all policies, standards and
regulations of the Company now or hereafter promulgated, and shall perform his
duties under this Agreement to the best of his abilities and in accordance with
standards of conduct applicable to a chief financial officer of a publicly
traded company.
Section
4. Salary.
(a) As
compensation while employed hereunder, Executive, during his faithful
performance of this Agreement, in whatever capacity rendered, shall receive an
annual base salary of $180,000.00, payable on such terms and in a series of
substantially equal installments according to the Company’s normal payroll
practices. The Company’s Board of Directors, in its discretion, may
adjust Executive’s base salary during the term of this Agreement.
(b) The
Company shall withhold state and federal income taxes, social security taxes and
such other payroll deductions as may from time to time be required by law or
agreed upon in writing by Executive and the Company. The Company
shall also withhold and remit to the proper party any amounts agreed to in
writing by the Company and Executive for participation in any corporate
sponsored benefit plans for which a contribution is required.
(c) Except
as otherwise expressly set forth hereunder, no compensation shall be paid
pursuant to this Agreement in respect of any month or portion thereof subsequent
to any termination of Executive’s employment with the Company.
Section
5. Benefits. Executive
shall be entitled, as of July 1, 2009 to participate in or become a participant
in any fringe benefits and employee benefit plans maintained by the Company for
which he is or will become eligible on such terms as the Company’s Board of
Directors may, in its discretion, establish, modify or otherwise change,
consistent with the terms of any such employee benefit
plan. Executive shall be entitled to four (4) weeks of paid vacation
per year in accordance with the policies of the Company.
Section
6. Stock Incentive
Plan. Executive will be entitled to participate in the
Company’s Stock Incentive Plan, as the Company’s Board of Directors, in its
discretion, may decide and to the extent permitted under the terms of the
plan.
Section
7. Initial Stock Option
Award. On or as soon as practicable after the date on which
Executive commences employment, the Board of Directors shall grant to Executive
options to purchase a total of 25,000 shares of Common Stock of the Company (the
“Options”). The exercise price of the Options shall be the fair
market value per share of Common Stock as set by the Board of Directors on the
grant date. The Options shall be granted under the Company’s 2004
Stock Incentive Plan, as may be amended from time to time (the
“Plan”). The Options shall be subject to the terms, provisions and
conditions of the Plan. In the event that any provision of this
Agreement respecting the Options shall conflict with the terms of the Plan,
however, this Agreement shall control. The Options shall be incentive
stock options, within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), to the extent permitted by law, and shall have a
10 year term. The Options shall vest and become exercisable annually
over the first three years of employment, one-third per year, with the first
such vesting to occur on the one-year anniversary of the Effective Date and
subsequent vesting to occur on the same date in each of the following two (2)
years, provided that Executive remains in the employ of the Company continuously
through the applicable vesting date or as otherwise provided in this
Agreement.
Section
8. Bonuses. Executive
will be eligible to earn a performance bonus of up to thirty-five percent (35%)
of his annual base salary based upon his achieving certain performance
targets/goals achieved, (the basis for which will be established within eight
(8) weeks after the Effective Date) per fiscal year, in cash, stock or other
equity compensation (as determined by the Board of Directors), based on his
achieving certain performance goals and metrics to be determined by the
Company’s Board of Directors; provided, however, that Executive’s performance
bonus, if any, for the fiscal year ending January 31, 2010, shall be prorated
based upon the Effective Date. Unless the Company’s Board of
Directors determines otherwise in its sole discretion, receipt of bonus under
any such plan or program will not be guaranteed and will depend upon Executive’s
and/or the Company’s performance.
Section
9. Business Expenses;
Relocation Expenses. The Company shall reimburse Executive for
reasonable and customary business expenses incurred in the conduct of the
Company’s business. Such expenses will include business meals,
out-of-town lodging and travel expenses, and membership dues and costs to attend
meetings and conventions of business-appropriate organizations and
associations. Additionally, the Company shall reimburse Executive for
reasonable and documented out-of-pocket expenses all in accordance with the
Company’s policies and procedures, including: (i) the relocation of Executive
from the State of Pennsylvania to Clearwater, Florida; (ii) one house-hunting
trip for Executive and his spouse; and (iii) temporary accommodations (to
include reasonable expenses for meals, lodging, travel expenses) for up to two
(2) months (collectively, the “Relocation Expenses”), the aggregate of all
Relocation Expenses not to exceed $25,000. Executive agrees to timely
submit records and receipts of reimbursable items and agrees that the Company
can adopt reasonable rules and policies regarding such
reimbursement. Each approved reimbursement shall be made in no event
later than December 31 of the year following the year in which the expense was
incurred.
Section
10. Termination.
(a) Notwithstanding
the cessation of Executive’s employment, the parties hereto shall be required to
carry out any provisions of this Agreement which contemplate performance by them
subsequent to such termination. In addition, no termination shall
affect any liability or other obligation of either party hereto which shall have
accrued prior to such termination, including, but not limited to, any liability,
loss or damage on account of breach. No termination of employment
shall terminate the obligation of the Company to make payments of any vested
benefits provided hereunder or pursuant to any Executive benefit plan maintained
by the Company in which Executive participates at the time of such termination
or the obligations of Executive under Sections 11, 12 and
13 of this Agreement.
(b) Executive’s
employment hereunder may be terminated by Executive upon thirty (30) days
written notice to the Company or at any time by mutual agreement in
writing.
(c) This
Agreement shall terminate upon the death of Executive; provided, however, that
in such event, in addition to the compensation, (including salary and vested
bonus, if any), accrued as of date of Executive’s death, the Company shall pay
to the estate of Executive the salary which otherwise would have been payable to
Executive from his date of death through then end of the month in which his
death occurs in substantially equal installments at the time such payments would
have been made in accordance with Section 4(a)
beginning with the pay date of the first full payroll period beginning
immediately following the death of Executive, subject to Section
25.
(d) The
Company may terminate Executive’s employment other than for “Cause,” as defined
in Section
10(e), at any time upon written notice to Executive, which termination
shall be effective immediately.
(e)
The Company shall have the right to terminate Executive’s
employment under this Agreement at any time for Cause, which termination shall
be effective immediately. Termination for “Cause” shall include
termination for Executive’s personal dishonesty, willful misconduct, breach of a
fiduciary duty involving personal profit, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses), conviction of a
felony or of a misdemeanor involving moral turpitude, misappropriation of the
Company’s assets, or a material breach of any other provision of this
Agreement. In the event Executive’s employment under this Agreement
is terminated for Cause, Executive shall thereafter have no right to receive any
compensation or other benefits under this Agreement.
(f) The
Company may terminate Executive’s employment under this Agreement, after having
established Executive’s disability, by giving to Executive written notice of its
intention to terminate his employment for disability and his employment with the
Company shall terminate effective on the 90th day after receipt of such notice
if within 90 days after such receipt Executive shall fail to return to the
full-time performance of the essential functions of his position (and if
Executive’s disability has been established pursuant to the definition of
“disability” set forth below). For purposes of this Agreement,
“disability” means either (i) disability which after the expiration of more than
13 consecutive weeks after its commencement is determined to be total and
permanent by a physician selected and paid for by the Company or its insurers,
and acceptable to Executive or his legal representative, which consent shall not
be unreasonably withheld or (ii) disability as defined in the policy of
disability insurance maintained by the Company for the benefit of Executive,
whichever shall be more favorable to Executive. Notwithstanding any
other provision of this Agreement, the Company shall comply with all
requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et. seq. Upon
termination for disability, Executive in addition to the compensation (including
salary and vested bonus, if any) accrued as of date of this termination, will
also receive in substantially equal installments the salary that would otherwise
would have been payable to Executive through the end of the month in which such
termination occurs at the time such payments would have been made in accordance
with Section
4(a) beginning with the pay date of the first full payroll period
beginning immediately following the effective date of Executive’s termination of
employment because of Executive’s disability, subject to Section
25.
(g) In
addition to the compensation (including salary and vested bonus, if any) accrued
as of date of this termination, Executive is entitled to (i) severance pay of
three (3) month’s salary if terminated by the Company within twelve (12) months
from the Effective Date, or (ii) severance pay of six (6) months salary if
Executive is terminated by the Company after Executive has completed more than
twelve (12) months of employment with the Company from the Effective Date.
Executive is not entitled to any severance if the termination is due to “Cause”
as defined in Section
10(e). Payment of severance will be made in substantially equal
installments according to the Company’s normal payroll practices as consistent
with the payment of Executive compensation pursuant to Section
4(a).
Section
11. Confidentiality/Nondisclosure. Executive
covenants and agrees that any and all information concerning the customers,
businesses and services of the Company of which he has knowledge or access as a
result of his association with the Company in any capacity, shall be deemed
confidential in nature and shall not, without the proper written consent of the
Company, be directly or indirectly used, disseminated, disclosed or published by
Executive to third parties other than in connection with the usual conduct of
the business of the Company. Such information shall expressly
include, but shall not be limited to, information concerning the Company’s trade
secrets, business operations, business records, customer lists or other customer
information. Upon termination of employment Executive shall deliver
to the Company all originals and copies of documents, forms, records or other
information, in whatever form it may exist, concerning the Company or its
business, customers, products or services. In construing this
provision it is agreed that it shall be interpreted broadly so as to provide the
Company with the maximum protection. This Section 11 shall not
be applicable to any information which, through no misconduct or negligence of
Executive, has previously been disclosed to the public by anyone other than
Executive. The Confidentiality Agreement dated April 28, 2009 between
the Executive and the Company shall remain in full force and
effect.
Section
12. Covenants Against
Competition. Executive acknowledges that he will obtain from
the Company valuable information regarding the business of the Company, and that
the services to be rendered by Executive are of a special character which have
unique value to the Company, the loss of which will not be readily
calculable. Executive further acknowledges that the customers of the
Company are located throughout the world, and the market of the Company has no
defined geographic boundaries, so a business could be located anywhere in the
world, and certainly within the United States, and compete with the
Company. In view of the unique value to the Company of the services
of Executive and in light of the confidential information to be obtained by or
disclosed to Executive as hereinabove set forth, including access to the
business plans and methods of operation of the Company, and as a material
inducement to the Company to employ Executive, he covenants and agrees as
follows:
(a)
Commencing with the date of this Agreement and continuing for a period of
six (6) months after Executive ceases to be employed by the Company for any
reason, Executive shall not, directly or indirectly, own, operate, manage,
control or participate in the ownership, operation, management or control, or
perform services of a nature substantially similar to those performed or
provided by Executive for the Company during the last twelve months of his
employment, to or for any person, firm, or other entity engaged in the business
of providing products or services which are the same as, or substantially the
same as, those provided by the Company at the time Executive’s employment
ceases, and which are competitive with the Company (‘the
Business”). The restrictions set forth herein apply only to those
persons, firms, or other entities which are engaged in the Business within the
Continental United States. Nothing herein shall prohibit Executive
from working (i) for any person, firm or entity that is not in competition with
the Company, or (ii) in any employment position in which he could not cause the
Company any competitive harm.
(b) Commencing
with the date of this Agreement and continuing for a period of six (6) months
after Executive’s employment ceases, Executive shall not, directly or
indirectly, as a principal, agent, employer, employee, partner, consultant, or
in any other capacity, solicit, divert from the Company or do business with any
customer of the Company, either in whole or in part, for the purpose of
providing any products or services which are the same as or substantially the
same as, and which are competitive with, the Company products and services sold
at the time Executive’s employment ceases. The phrase “customer” of
the Company means any person or entity (i) to whom Executive has, directly or
indirectly, provided services or products on behalf of the Company at any time
during the 12 months preceding the cessation of Executive’s employment; (ii) to
whom Executive had, directly or indirectly, either met, spoken or communicated
with for the purpose of offering the Company’s services or products during the
12 months preceding the cessation of his employment; or (iii) any person or
entity about whom Executive acquired material information based on his
employment with the Company within 12 months of cessation thereof, and as to
whom Executive has been informed that the Company will be or has been providing
Company products or services.
(c)
Commencing with the date of this Agreement and continuing for a
period of six (6) months after he ceases to be employed by the Company for any
reason, Executive shall not, directly or indirectly, recruit, solicit for
employment or employ any person who was an employee of the Company at any time
during the twelve (12) months preceding the cessation of Executive’s
employment.
Section
13. Remedies. Executive
agrees that a breach of any of the covenants set forth in Sections 11 or 12 or
their subparts would result in irreparable injury and damage to the Company for
which it would have no adequate remedy at law; and Executive further agrees that
in the event of such a breach, the Company shall be entitled to an immediate
injunction to prevent such violations. In the event an action is
brought in regard to the covenants set forth in Sections 11 or 12,
the prevailing party shall be entitled to receive all costs and attorneys’ fees
as a result of such breach.
Section
14. Reasonableness of
Restrictions. Executive has carefully read and considered the
provisions of Sections
11 and 12 hereof and, having done so, agrees that the restrictions set
forth in such Sections (including but not limited to, the time period of the
restrictions, the geographic restrictions and the restrictions on the scope of
activity set forth in Section 12 hereof)
are fair and reasonable and are reasonably required for the protection for the
interests of the Company, its officers, directors, and other
employees.
Section
15. Governing
Law. This Employment Agreement shall be subject to and
construed in accordance with the laws of the State of Florida, without giving
effect to its principles of conflict of laws.
Section
16. Venue. Executive
agrees that, at the option of the Company, any action brought to enforce or to
test the enforceability of any provision of this Agreement, may be brought in
either the United States District Court for the Middle District of Florida or
the Circuit Court of Pinellas County, Florida.
Section
17. Continued
Validity. In the event that any of the provisions of Sections 11 or 12 (or
their subparts) hereof shall be held to be invalid or unenforceable, the
remaining provisions shall nevertheless continue to be valid and enforceable as
though the invalid or unenforceable parts had not been included
therein. In the event that any provisions of Section 12 relating
to geographic scope, time period and/or restricted activity shall be declared by
a court of competent jurisdiction to exceed the maximum time period or
restrictions on activities such court deems reasonable and enforceable, the
parties agree that said geographic scope, time period, and/or other restrictions
may be modified by the court in a manner which such court deems reasonable and
enforceable.
Section
18. Assignability. This
Agreement shall be binding upon and inure to the benefit of the Company, and may
be assigned by the Company to any person or firm who may succeed to the majority
of the assets of the Company. This Agreement shall not be assignable
by Executive.
Section
19. Notices. Any
and all notices, designations, consents, offers, acceptance or any other
communications provided for herein shall be given in writing and shall be deemed
properly delivered if delivered in person or by registered or certified mail,
return receipt requested, addressed in the case of the Company to its registered
agent or in the case of Executive to his last known address.
Section
20. Entire
Agreement.
(a) This
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes any and all other agreements, either oral
or in writing, among the parties hereto with respect to the subject matter
hereof.
(b) This
Agreement may be executed in one or more counterparts, each of which shall be
considered an original copy of this Agreement, but all of which together shall
evidence only one agreement.
Section
21. Amendment and
Waiver. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of each of the parties
hereto. No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person or party to be charged.
Section
22. Case and
Gender. Wherever required by the context of this Agreement,
the singular or plural case and the masculine, feminine and neuter genders shall
be interchangeable.
Section
23. Captions. The
captions used in this Employment Agreement are intended for descriptive and
reference purposes only and are not intended to affect the meaning of any
Section hereunder.
Section
24. Section
409A. This Agreement is intended to comply with the applicable
requirements of Section 409A of the Code and shall be construed and interpreted
in accordance therewith. Notwithstanding the preceding, the Company
shall not be liable to Executive or any other person if the Internal Revenue
Service or any court or other authority having jurisdiction over such matter
determines for any reason that any payments under this Agreement are subject to
taxes, penalties or interest as a result of failing to comply with Section 409A
of the Code.
Section
25. Delay of
Payment. Notwithstanding any other provision of this
Agreement, if Executive is a “specified employee” within the meaning of Section
409A of the Code, to the extent necessary to comply with Section 409A of the
Code, no payments (which are not otherwise exempt) may be made hereunder before
the date which is six months after Executive’s separation from service or, if
earlier, his death. Any amounts which would have otherwise been
required to be paid during such six months or, if earlier, until Executive’s
death, shall be paid to Executive in one lump sum cash payment as soon as
administratively practical after the date which is six months after Executive’s
separation from service or, if earlier, after Executive’s death. Any
other payments scheduled to be made under this Agreement shall be made and
provided at the times otherwise designated in this Agreement disregarding the
delay of payment for the payments described in this Section
25. Additionally, notwithstanding any other provision of this
Agreement, Executive will only be entitled to receive payment on termination of
his employment when the termination of employment qualifies as a “separation
from service” within the meaning of Section 409A of the Code.
IN
WITNESS WHEREOF, the Company has caused this Employment Agreement to be signed
by its duly authorized officer and Executive has hereunto set his hand and seal
on the day and year first above written.
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AEROSONIC
CORPORATION
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By:
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Xxxxxxx
X. Xxxxxxx,
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President
and Chief Executive Officer
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EXECUTIVE
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By:
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Xxxxx
X. Xxxxxxx,
Executive
Vice President,
Chief
Financial Officer
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