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AGREEMENT
This Agreement is made and entered into in Wellesley, Massachusetts by
and between BE Avionics, Inc., a Delaware corporation ("BEA"), and Amin J.
Khoury ("Khoury"), as of January 1, 1992.
FOR AND IN CONSIDERATION OF THE MUTUAL PROMISES, TERMS, PROVISIONS AND
CONDITIONS CONTAINED IN THIS AGREEMENT, the parties hereby agree as follows:
1. ARRANGEMENT. Khoury shall provide to BEA, and BEA shall accept from
Khoury, the services, set forth in Paragraph 3.2, subject to the terms and
conditions set forth in this Agreement.
2. TERM. Khoury shall provide, and BEA shall purchase, the services
hereunder for a term (the "Service Term") of ten (10) years, commencing on the
date hereof and ending on December 31, 2001 (the "Expiration Date").
3. CAPACITY, PERFORMANCE, ETC.
3.1. CAPACITY. Khoury shall serve BEA (i) as its Chief Executive
Officer, and (ii) as its Chairman of the Board, or in such other Board capacity
as the Board may designate from time to time, but only upon agreement with
Khoury.
3.2. SERVICES. In the capacities set forth in Paragraph 3.1 above,
Khoury shall be retained by BEA and shall perform such duties and
responsibilities on behalf of BEA as Khoury and the Board shall by mutual
agreement from time to time determine.
3.3. PERFORMANCE. During the Service Term, Khoury shall use his
business judgment, skill and knowledge to the advancement of BEA's interests and
to the discharge of his duties and responsibilities hereunder.
4. COMPENSATION AND BENEFITS.
4.1. BASE FEE. As consideration for his services performed during the
Service Term, BEA agrees to pay Khoury a base fee of $360,000 per annum (the
"Base Fee") , payable in accordance with the payroll practices of BEA for its
executives generally, but in no event less frequently than monthly, and subject
to increase from time to time by the Board, in its sole discretion; PROVIDED,
HOWEVER, that the Base Fee shall be increased on January 1 of each year by an
amount not less than the amount determined by applying to the Adjusted Base Fee
(as defined below) as in effect for the next preceding year the percentage
increase in the U.S. Bureau of Labor Statistics Consumer Price Index Revised -
Urban Wage Earners and Clerical
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Workers - National - All Items (1982-84 = 100) (the "Index") for the preceding
twelve months, from December to December (the Base Fee as adjusted from time to
time shall be referred to as the "Adjusted Base Fee"). In no event shall such
adjustment reduce the Adjusted Base Fee below $360,000.00 per year. If the
Bureau of Labor Statistics does not issue the Index on or before January 1 of
any year for the preceding twelve months, December to December, any adjustments
to either the Base Fee or the Adjusted Base Fee shall be made retroactive to the
beginning of the appropriate adjustment period after the Index is so issued. If
the Index is no longer issued, the Board and Khoury shall agree upon a
substitute adjustment index issued by such agency.
4.2. BONUSES. Khoury may receive bonuses from BEA when, as and if
determined from time to time by the Board. Any such bonuses paid to Khoury shall
be in addition to the Adjusted Base Fee.
4.3. BENEFITS. At BEA's expense, during the Service Term Khoury shall
be treated for benefit purposes as a BEA employee and shall be entitled to
participate in any and all employee benefit plans, medical insurance plans, life
insurance plans, disability income plans, incentive compensation plans and other
benefit plans, other than retirement plans, as may be from time to time in
effect for executives of BEA generally.
4.4. BUSINESS EXPENSES. BEA shall pay or reimburse Khoury during the
Service Term for all reasonable business expenses incurred or paid by him in the
performance of his services, subject to reasonable substantiation and
documentation.
5. PROPRIETARY RIGHTS AND NON-COMPETITION.
Khoury acknowledges that BEA is engaged in a continuous program of
research, development and production in connection with its business, present
and future, and hereby covenants as follows:
5.1. CONFIDENTIALITY. Khoury will maintain in confidence and will not
disclose or use, either during or after the Service Term, any proprietary or
confidential information or know-how belonging to BEA ("Proprietary
Information"), whether or not in written form, except to the extent required to
perform duties on behalf of BEA. For purposes of this Agreement, "Proprietary
Information" shall mean any information, not generally known in the relevant
trade or industry, which was obtained from BEA, or which was learned,
discovered, developed, conceived, originated or prepared by Khoury in connection
with this Agreement. Such Proprietary Information includes, without limitation,
software, technical and business information relating to BEA's inventions or
products, research and development, production processes, manufacturing and
engineering processes, machines and equipment, finances, customers, marketing
and production and future business plans, information belonging to customers or
suppliers of BEA disclosed incidental to Khoury's performance under this
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Agreement, and any other information which is identified as confidential by BEA,
but only so long as the same is not generally known in the relevant trade or
industry.
5.2. INVENTIONS.
5.2.1. DEFINITION OF INVENTIONS. For purposes of this
Agreement, "Inventions" shall mean any new or useful art, discovery,
contribution, finding or improvement, whether or not patentable, and
all related know-how. Inventions shall include, without limitation, all
designs, discoveries, formulae, processes, manufacturing techniques,
semiconductor designs, computer software, inventions, improvements and
ideas.
5.2.2. DISCLOSURE AND ASSIGNMENT OF INVENTIONS. Khoury will
promptly disclose and describe to BEA all Inventions which he may
solely or jointly conceive, develop, or reduce to practice during the
Service Term (i) which relate at the time of conception, development,
or reduction to practice of the Invention to BEA's business or actual
or demonstrably anticipated research or development, (ii) which were
developed, in whole or in part, on BEA's time or with the use of any of
BEA's equipment, supplies, facilities or trade secret information, or
(iii) which resulted from any work performed by Khoury for BEA (the
"BEA Inventions"). Khoury hereby assigns all of his right, title and
interest worldwide in the BEA Inventions and in all intellectual
property rights based upon the BEA Inventions; PROVIDED, HOWEVER, that
Khoury does not assign or agree to assign any Inventions, whether or
not relating in any way to the BEA business or demonstrably anticipated
research and development, which were made by him prior to the date of
this Agreement, or which were developed by him independently during the
term of this Agreement and not under the conditions stated in
subparagraph (ii) above.
5.3. DOCUMENTS AND MATERIALS. Upon termination of this Agreement or at
any other time upon BEA's request, Khoury will promptly deliver to BEA, without
retaining any copies, all documents and other materials furnished to him by BEA,
prepared by him for BEA or otherwise relating to BEA's business, including,
without limitation, all written and tangible material in his possession
incorporating any Proprietary Information.
5.4. COMPETITIVE EMPLOYMENT. During the Service Term and for a period
of two (2) years thereafter (collectively, the "Extended Term"), Khoury will not
engage in any employment, consulting, or other activity in any business
competitive with BEA without BEA's written consent, which consent shall not be
unreasonably withheld; PROVIDED, HOWEVER, because Khoury has other existing
commitments, a list of which is attached hereto, services rendered to those
entities will in no event be deemed competitive with BEA; PROVIDED, FURTHER,
that nothing in this Section 5.4 shall preclude Khoury from serving as a
director of any other corporation.
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5.5. NON-SOLICITATION. During the Extended Term, Khoury will not
solicit or encourage, or cause others to solicit or encourage, any employees of
BEA to terminate their employment with BEA.
5.6. ACTS TO SECURE PROPRIETARY RIGHTS.
5.6.1. FURTHER ACTS. Khoury agrees to perform, during and
after the Service Term, all acts deemed necessary or desirable by BEA
to permit and assist it, at its expense, in perfecting and enforcing
the full benefits, enjoyment, rights and title throughout the world in
the BEA Inventions. Such acts may include, without limitation,
execution of documents and assistance or cooperation in the
registration and enforcement of applicable patents and copyrights or
other legal proceedings.
5.6.2. APPOINTMENT OF ATTORNEY-IN-FACT. In the event that BEA
is unable, for any reason whatsoever, to secure Khoury's signature to
any lawful and necessary document required to apply for or execute any
patent, copyright or other applications with respect to any BEA
Inventions (including improvements, renewals, extensions,
continuations, divisions or continuations in part thereof), Khoury
hereby irrevocably appoints BEA and its duly authorized officers and
agents as his agents and attorneys-in-fact to execute and file any such
application and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights or other rights thereon
with the same legal force and effect as if executed by him, intending
hereby to create a so-called "durable power" which will survive any
subsequent disability.
5.7. NO CONFLICTING OBLIGATIONS. Khoury's performance of this
Agreement does not breach and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by him.
5.8. CORPORATE OPPORTUNITIES. Khoury agrees that he will first present
to the Board, for its acceptance or rejection on behalf of BEA, any opportunity
to create or invest in any company which is or will be involved in equipping or
furnishing airplane cabin interiors, which comes to his attention and in which
he, or any affiliate, might desire to participate. If the Board rejects the same
or fails to act thereon in a reasonable time, Khoury shall be free to invest in,
participate or present such opportunity to any other person or entity.
5.9. SPECIFIC PERFORMANCE. Khoury acknowledges that a breach of any of
the promises or agreements contained herein could result in irreparable and
continuing damage to BEA for which there may be no adequate remedy at law, and
BEA shall be entitled to seek injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages
if appropriate).
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6. TERMINATION AND COMPENSATION THEREON.
6.1. TERMINATION DATE. The term "Termination Date" shall mean the
earlier of (i) the Expiration Date or (ii) if Khoury's services to BEA are
terminated (A) by his death, then the date of his death, or (B) by his
incapacity, then the date on which such termination is to be effective pursuant
to the notice of termination to be given by BEA pursuant to Section 6.3 hereof.
6.2. DEATH. This Agreement shall terminate upon the death of Khoury. In
such event, BEA shall pay to such person as Khoury from time to time may
designate in a notice filed with BEA, or, if no such person shall have been so
designated, to his estate, (i) all fees earned, but not yet paid, hereunder and
(ii) the Retirement Compensation as hereinafter provided.
6.3. INCAPACITY. If, in the reasonable judgement of the Board, as a
result of Khoury's incapacity due to physical or mental illness or otherwise,
Khoury shall for at least nine (9) consecutive months during the term of this
Agreement have been unable to perform his duties under this Agreement, BEA may
terminate this Agreement, and Khoury's services hereunder, by notice to Khoury.
In such event, BEA shall pay the Retirement Compensation to Khoury, and (to the
extent legally practicable) extend to him the applicable fringe benefits
referred to in Section 4.3 hereof until the Expiration Date. Any dispute between
the Board and Khoury with respect to Khoury's incapacity shall be settled by
reference to a competent medical authority mutually agreed to by the Board and
Khoury, the decision of which authority shall be binding on all parties.
6.4. RETIREMENT COMPENSATION. In recognition that Khoury will not be
eligible for any retirement plan to be offered by BEA to its executives (as
provided in Section 4.3), upon the occurrence of the earlier of the Expiration
Date or the Termination Date (such earlier date referred to as the "Cessation
Date"), Khoury shall be entitled to retirement compensation ("Retirement
Compensation") equal to the Adjusted Base Fee in effect immediately prior to the
Cessation Date for each year of service by Khoury to BEA, such service having
commenced as of August 1, 1987 ("Commencement Date"), with a ratable adjustment
should Khoury's final period of service be less than a full year, and payable as
provided in Section 6.5.
6.5. PAYMENT OF RETIREMENT COMPENSATION. Retirement Compensation shall
be paid to Khoury in monthly installments, the first installment to be due and
payable on the first day of the month next beginning after the Cessation Date,
except that if the Cessation Date falls on or after the twentieth day of a
month, such first installment shall be paid on the first day of the second month
next beginning, and in either instance, monthly on the same day of each
succeeding month, for that number of months equal to the number of months
elapsed from the Commencement Date through the Cessation Date. The amount of
each monthly installment
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shall be equal to one-twelfth (1/12th) of the Adjusted Base Fee in effect as of
the Cessation Date.
Notwithstanding the foregoing, Khoury, or his personal representative
if Khoury is deceased or incapable, physically or mentally, of so acting, may
elect to receive the entire Retirement Compensation, or the remaining unpaid
balance thereof, in a lump sum upon written notice to the Board. In such event,
the Board may determine the time of payment of such amount, not to exceed ninety
(90) days from the date of such notice, and the monthly installments due and
payable up to such date shall continue to be paid, except that the lump sum to
be paid shall be present-valued using the lowest Prime Rate reported in the Wall
Street Journal on the first business day after the Board is sent notice of such
election, and if no such Prime Rate is then being published by the Wall Street
Journal, then the rate announced by the largest New York City bank as its prime
or base rate shall be used.
7. WITHHOLDING. All payments made by BEA under this Agreement shall be
reduced by any tax or other amounts required to be withheld by BEA under
applicable law.
8. ASSIGNMENT. Neither BEA nor Khoury may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other party; PROVIDED, HOWEVER, that BEA may assign
its rights and obligations under this Agreement without the consent of Khoury if
BEA shall hereafter effect a reorganization, consolidate with, or merge into any
other entity or transfer all or substantially all of its properties or assets to
any other person or entity. This Agreement shall inure to the benefit of and be
binding upon BEA, Khoury and their respective successors, executors,
administrators, heirs and permitted assigns.
9. INDEMNIFICATION. To the maximum extent permitted under Delaware law as
from time to time in effect, BEA hereby agrees to indemnify Khoury and hold him
harmless from, against and in respect of any and all damages, deficiencies,
actions, suits, proceedings, demands, assessments, judgments, claims, losses,
costs, expenses, obligations and liabilities arising from or related to the
performance of this Agreement by Khoury.
10. WAIVER. The waiver by any party hereto of a breach of any provision of
this Agreement by any other party will not operate or be construed as a waiver
of any other or subsequent breach by such other party.
11. SEVERABILITY. If any part of this Agreement is found invalid or
unenforceable, that part will be amended to achieve as nearly as possible the
same economic effect as the original provision, and the remainder of this
Agreement will remain in full force.
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12. NOTICES. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing, addressed as provided
below and actually delivered at said address.
If to Khoury, to him at the following address:
c/o The K.A.D. Companies, Inc.
36 Washington Street
Suite 190
Wellesley Hills, Massachusetts 02181
If to BEA, to it at the following address:
1601 East Chestnut Avenue
Santa Ana, California 92702
Attention: President
or to such other person or address as to which either party may notify
the other in accordance with this Section 12.
13. ARBITRATION. In the event of a dispute between the parties as to the
meaning or interpretation of this Agreement, or the performance of either party
hereunder, either party may submit the matter for arbitration in Boston,
Massachusetts, to the American Arbitration Association, which is expressly
permitted and required hereby, to include the reasonable costs of arbitration,
including attorney fees, of the prevailing party, in its decision. If the
non-prevailing party should then fail to comply with such decision, the
reasonable costs of enforcement, including attorneys fees, shall be paid to the
prevailing party. Such costs shall specifically include any judicial proceeding
to confirm such decision.
14. SURVIVAL. The obligations of Khoury pursuant to Section 5 hereof and
the obligations of BEA pursuant to Section 6 hereof shall each survive
termination of this Agreement.
15. MISCELLANEOUS. This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
and current understandings and agreements, whether written or oral. This
Agreement may be amended or modified only by a written instrument signed by
Khoury and by a duly authorized representative of BEA. This Agreement may be
executed in any number of counterparts which together shall constitute one
instrument and shall be governed by and construed in accordance with the laws
(other than the conflicts of laws rules) of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands,
as of the date first above written.
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AMIN J. KHOURY
BE AVIONICS, INC.
By
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Robert J. Khoury,
duly authorized
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