EXHIBIT 10.1
EMPLOYMENT AND NONCOMPETITION AGREEMENT
AGREEMENT, dated as of the 16th day of August, 1996, by and between
TRILECTRON INDUSTRIES, INC., a New York corporation (the "EMPLOYER"), and
SIGMUND BORAX (the "EMPLOYEE").
WITNESSETH:
WHEREAS, the Employee desires to continue to be employed by the
Employer, and the Employer desires to continue to employ the Employee, upon the
terms and conditions hereinafter set forth; and
WHEREAS, the Employee represents that he is not a party to any
agreement which would prohibit him from entering into this Agreement or his
performing the services required hereunder.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the Employer
and the Employee agree as follows:
SECTION 1. EMPLOYMENT OF EMPLOYEE
(a) TERM. The Employee's employment hereunder will commence on
the date of the closing of the Stock Purchase Agreement, dated as of August 16,
1996, pursuant to which all of the outstanding capital stock of the Employer is
being acquired by HEICO Corporation, a Florida corporation ("HEICO"), from the
Employee, and will expire on the second anniversary of such closing date (the
"TERM"). Notwithstanding the foregoing, the Employee's employment hereunder may
be terminated prior to the expiration of the Term as provided in SECTION 2.
(b) DUTIES AND RESPONSIBILITIES. The Employee shall serve as
Vice Chairman of the Employer. The Employee agrees to use his best efforts,
entire productive time, attention, and energies to the business of the Employer
and shall assume and competently perform such reasonable responsibilities and
duties as may be assigned to him from time to time by the Employer through its
duly authorized management personnel; PROVIDED, HOWEVER, that the Employee shall
not be required to work more than four (4) days per week. To the extent that the
Employer shall have any parent, subsidiaries, affiliated corporations,
partnerships, or joint ventures (collectively "RELATED ENTITIES"), Employee
shall perform such duties to promote these entities and their respective
interests to the same extent as the interests of the Employer and without
additional compensation. At all
times, the Employee agrees to abide by any employee handbook, policy, or
practice that the Employer has or hereafter adopts with respect to its employees
generally.
(c) COMPENSATION. As full compensation for his services
hereunder and in consideration for the Employee's covenants contained in this
Agreement, the Employer shall pay the Employee a salary at the per annum rate of
$150,000, payable in accordance with the customary payroll practices of the
Employer. Simultaneous with the execution of this Agreement, the Employer's
parent company, HEICO Corporation, a Florida corporation ("HEICO"), is granting
to the Employee an option to purchase 11,000 shares of HEICO's Common Stock,
$.01 par value per share, pursuant to the terms of a Stock Option Agreement of
even date herewith between HEICO and the Employee.
(d) EXPENSES; FRINGE BENEFITS AND VACATION POLICY. The
Employer agrees to pay or reimburse the Employee for all reasonable vouchered
business expenses incurred during his employment which have been submitted in
accordance with any expense reimbursement policy or practice of the Employer as
in effect from time to time. The Employer will provide to the Employee a leased
automobile of comparable quality to the automobile currently under lease for the
Employee and such pension benefits, holidays, vacation and other employee
benefits which the Employer provides to similarly situated employees, subject to
the provisions of the various benefit plans, programs, or policies in effect
from time to time. The Employer reserves the right to change or eliminate these
benefits at any time.
(e) LIFE INSURANCE. The Employee agrees that the Employer
shall have the right to obtain life insurance on the Employee's life, at the
Employer's sole expense and with the Employer as the sole beneficiary thereof,
but no representation is made by the Employee as to his insurability. The
Employee shall (i) cooperate fully with the Employer in obtaining such life
insurance, (ii) sign any necessary consents, applications and other related
forms or documents, and (iii) take any required medical examinations.
SECTION 2. TERMINATION OF EMPLOYMENT
(a) TERMINATION BY THE EMPLOYER. The Employer may terminate
the employment of the Employee at any time with or without Cause (as defined
below) and with or without notice. Following termination of employment of the
Employee for cause, the Employer shall have no further obligations under this
Agreement, including payment obligations. If the employment of the Employee is
terminated by the Employer without Cause, the Employee shall continue to be
entitled to receive the compensation payable to him pursuant to SECTION 1(c) but
thereafter shall not be entitled to any of the expense reimbursement or benefits
referred to in SECTION 1(d) except to the extent such right to reimbursement or
benefits were vested at the date of such termination. As used in this
-2-
Agreement, "CAUSE" shall mean the following: (1) the Employee's failure or
refusal to perform his duties, as contemplated by this Agreement, in a
satisfactory manner; after notice and a reasonable opportunity to cure, (2)
dishonesty or other acts that adversely affect the Employer; (3) a violation of
the Employer's written policies or practices which justifies immediate
termination, as defined by the Employer; (4) arrest for or conviction of a
felony or of any crime involving moral turpitude, fraud, dishonesty or
misrepresentation; (5) the commission by the Employee of any act which could
reasonably be expected to injure the reputation, business, or business
relationships of the Employer or Related Entities; (6) the Employee's inability
to perform an essential function of his position, which inability continues for
90 consecutive days or for periods aggregating 90 days in any 180-day period; or
(7) any material breach by Employee of this Agreement or the Stock Purchase
Agreement.
(b) TERMINATION BY EMPLOYEE. The Employee agrees to provide
the Employer with at least twenty (20) business days' written notice of his
intent to terminate employment voluntarily ("TERMINATION NOTICE PERIOD").
Failure to provide such notice terminates the Employee's entitlement to payment
for accrued, unused benefits, such as vacation. The Employer reserves the right
to terminate the Employee before the end of the Termination Notice Period
provided that the Employer pays the Employee the salary that he would have
received from the date of the last payroll payment to the end of the Termination
Notice Period. During the Termination Notice Period, the Employee agrees to make
a good faith effort to perform the duties described hereunder. If the Employee
terminates his employment with the Employer for any reason, the Employer's
obligations, including payment obligations, under this Agreement shall forthwith
cease except as provided in this subparagraph.
SECTION 3. NON-COMPETITION; STANDSTILL; PROTECTION OF CONFIDENTIAL
INFORMATION; ETC.
(a) RATIONALE FOR RESTRICTIONS. The Employee acknowledges that
his services hereunder are of a special, unique, extraordinary and intellectual
character, and his position with the Employer places him in a position of
confidence and trust with the customers, suppliers and employees of the Employer
and/or Related Entities. The Employee also acknowledges that the Employer and
Related Entities design, manufacture, sell and service aircraft, ground and
support equipment (collectively "PRODUCTS") throughout the world and that the
Employer competes with many companies, including, but not limited to, Hobart
Corp. and Stewart and Stevenson, Inc. The Employee further acknowledges that the
rendering of services under this Agreement necessarily requires the disclosure
to the Employee of Confidential Information of the Employer and/or Related
Entities. The Employee and the Employer agree that both prior to and during the
course of employment with the Employer and Trilectron, the Employee had, has,
and will
-3-
continue to develop a personal relationship with the Employer's customers, and a
knowledge of these customers' affairs and requirements which may constitute the
Employer's primary and only contact with such customers. The Employee
acknowledges that the Employer's relationships with its established clientele
may therefore be placed in the Employee's hands in confidence and trust. The
Employee consequently agrees that it is reasonable and necessary for the
protection of the goodwill and legitimate business interests of the Employer and
the Related Entities that the Employee make the covenants contained herein, that
the covenants are a material inducement for the Employer to employ the Employee
and to enter into this Agreement, and that the covenants are given as an
integral part of and incident to this Agreement.
(b) NON-COMPETITION IN RELATED BUSINESS. As used herein, the
term "RESTRICTIVE PERIOD" means the period commencing on the date of this
Agreement and ending two (2) years following the later of (i) the expiration of
the Term or (ii) the termination of the employment of the Employee with the
Employer, irrespective of the reason for such termination and even though such
termination occurs after the expiration of the Term. During the Restrictive
Period, the Employee agrees not to utilize his special knowledge of the business
of the Employer and his relationships with customers, suppliers and others to
compete with the Employer or any of the Related Entities or any of the Related
Entities in any business which is the same as or similar to the business (the
"PROHIBITED BUSINESS") conducted by the Employer or any of the Related Entities
at any time during the Restrictive Period. During the Restrictive Period, the
Employee shall not, directly or indirectly, assist in the creation or
development of, engage or have an interest, anywhere in the United States of
America or any other geographic area where the Employer or any Related Entity
does business or in which its Products are marketed, alone or in association
with others, as principal, officer, agent, employee, director, partner or
stockholder (except as an employee or consultant of the Employer or any of the
Related Entities), or through the investment of capital, lending of money or
property, rendering of services or advice or otherwise, in any business
competitive with or similar to the Prohibited Business. During the Restrictive
Period, the Employee shall not, nor shall he permit any of his employees, agents
or others under his control to, directly or indirectly, on behalf of the any
entity or person, (i) call upon, accept business from, or solicit the business
of any person or entity which is, or who had been at any time during the
preceding two years, a customer of Trilectron, the Employer or any Related
Entity otherwise divert or attempt to divert any business from the Employer or
any of the Related Entities; or (ii) recruit or otherwise solicit or induce any
person who was an employee of, or otherwise engaged by, the Employer or any of
the Related Entities at any tictive Period to terminate his or her employment or
other relationship with the Employer or any of the Related Entities, or hire any
person who has left the employ of the Employer or any of the Related Entities
during the Restrictive Period. The Employee shall not at any time, directly or
indirectly, use or purport to authorize any person to use
-4-
any name, mark, logo, trade dress or other identifying words or images which are
the same as or similar to those used currently, in the past, or during the
Employee's employment by Trilectron or the Employer in connection with any
Product or service, whether or not such use would be in a Prohibited Business.
The ownership or control of up to five percent of the outstanding voting
securities or securities of any class of a company with a class of securities
registered under the Securities Exchange Act of 1934, as amended, shall not be
deemed to be a violation of the provisions of this SECTION 3(b).
(c) STANDSTILL. The Employee agrees that for a period
commencing on the date hereof and ending on the date which is three years from
the date hereof, he will not acquire, offer or agree to acquire, directly or
indirectly, by purchase or otherwise, control of the Employer or any of the
Related Entities, make, or in any way participate, directly or indirectly, as
advisor or otherwise, in any "solicitation" of "proxies" or consents to vote (as
such terms are used in the Proxy Rules of the United States Securities and
Exchange Commission), or seek to advise or influence any person or entity with
respect to the voting of any voting securities of the Employer or any of the
Related Entities, in opposition to any proposed actions of the Board of
Directors of the Employer or any of the Related Entities or in opposition to any
nominees for Directors of the Employer or any of the Related Entities which
nominees have been nominated by the Employer or any of the Related Entities,
their management or their Board of Directors, seek or assist any other party in
seeking representation on the Board of Directors of the Employer or any of the
Related Entities through the election to the Board of Directors of
individuals(s) not nominated and supported by the Employer or any of the Related
Entities, their management or their Board of Directors, pursue or publicly
announce an interest in pursuing an acquisition of control of the Employer or
any of the Related Entities or an alteration of the composition of the
Employer's or any of the Related Entities' Boards of Directors, or advise or
otherwise act, alone or in concert with others, directly or indirectly, to seek
to control or influence the management, Board of Directors or policies of the
Employer or any of the Related Entities.
(d) DISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee
acknowledges that the Products and the inventions, formulas, software, trade
secrets, technology, compositions, know-how, methods and processes of
manufacturing, assembling or fabricating (collectively, the "INTANGIBLE
PROPERTY") and all other confidential or proprietary information with respect to
the business and operations of the Employer are valuable, special and unique
assets of the Employer. The Employee shall not, at any time during or after the
Restrictive Period, disclose, directly or indirectly, to any person or entity,
or use or authorize or purport to authorize any person or entity to use any
confidential or proprietary information with respect to the Employer or any of
the Related Entities without the prior written consent of the Employer,
including without limitation, information as to the financial condition, results
of operations, customers, suppliers,
-5-
Products, Products under development, Intangible Property, sources, leads or
methods of obtaining new products or business, pricing methods or formulas, cost
of supplies, marketing strategies or any other information relating to the
Employer or any of the Related Entities which could reasonably be regarded as
confidential, but not including information which is or shall become generally
available to the public other than as a result of disclosure by the Employer or
any of the Related Entities or any of their agents, affiliates or
representatives or a person to whom any of them has provided such information.
(e) RIGHTS TO INTELLECTUAL PROPERTY. While employed by the
Employer, the Employee will disclose to the Employer any ideas, inventions, or
business plans ("INTELLECTUAL PROPERTY") developed by him which relate directly
or indirectly to the business or a similar business of the Employer or any of
the Related Entities, including without limitation, any process, operation,
product or improvement which may be patentable or copyrightable. The Employee
agrees that the Intellectual Property is or will be the property of the Employer
and that he will, at the Employer's request and cost, do whatever is necessary
to obtain the rights thereto, by patent, copyright or otherwise, for the
Employer. The Employee further agrees that, whether or not he is in the employ
of the Employer, he will cooperate in good faith to the extent and in the manner
requested by the Employer in the prosecution or defense of any patent or
copyright claims or any litigation or other proceedings involving any
Intellectual Property. The Employer will pay for all expenses associated with
the Employee's compliance with this provision.
(f) ANTI-DISPARAGEMENT. The Employee covenants and agrees that,
both during and after the Restrictive Period, he shall not make any comments
which could be construed as negative concerning the Employer or any of the
Related Entities to any individual or entity, including but not limited to,
clients, customers, employees, or financial or credit institutions.
(g) REMEDIES FOR BREACH OF THE AGREEMENT. The restrictions set
forth in SECTIONS 3 (b), (c), (d), (e) and (f) are considered by the parties to
be reasonable for the purposes of protecting the legitimate business interests
of the Employer and the Related Entities and the value of the business and
goodwill of the Employer and the Related Entities. The parties hereto
acknowledge that the Employer and the Related Entities would be irreparably
harmed, and that monetary damages would not provide an adequate remedy to the
Employer and the Related Entities, in the event the covenants contained in
SECTIONS 3 (b), (c), (d), (e) and (f) were not complied with in accordance with
their terms. Accordingly, the Employee agrees that any breach or threatened
breach by him of any provision of SECTIONS 3 (b), (c), (d), (e) and (f) shall
entitle the Employer and the Related Entities to injunctive and other equitable
relief, without the posting of any bond or security, to secure the enforcement
of such provisions, in addition to any other rights
-6-
and remedies which may be available to the Employer and the Related Entities,
and that the Employer and the Related Entities shall be entitled to receive from
the Employee reimbursement for all attorneys' fees and expenses incurred by the
Employer and the Related Entities in enforcing such provisions. In addition to
its other rights and remedies, the Employer and the Related Entities shall have
the right to require the Employee to account for and pay over to the Employer
or the Related Entities, as the case may be, all compensation, profits, money,
accruals and other benefits derived or received, directly or indirectly, by the
Employee from the action constituting such breach. If the Employee breaches the
covenant set forth in SECTION 3(b), the running of the noncompete period
described therein shall be tolled with respect to the Employer or any of the
Related Entities for so long as such breach continues. It is the desire and
intent ofs 3 (b), (c), (d), (e) and (f), be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought. If any provisions of SECTIONS 3 (b), (c), (d), (e) or
(f), relating to the time period, scope of activities or geographic area of
restrictions are declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may
be, shall be reduced to the maximum which such court deems enforceable. If any
provisions of SECTIONS 3 (b), (c), (d), (e) or (f) other than those described
in the preceding sentence are adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties.
(h) SURVIVAL. The provisions of this SECTION 3 shall survive the
termination of this Agreement or the Employee's employment irrespective of the
reason for such termination. The provisions of this SECTION 3 shall continue in
full force and effect after the expiration of the Term even if the Employee
continues to be employed by the Employer without renewing this Agreement.
SECTION 4. RETURN OF EMPLOYER PROPERTY ON TERMINATION
The Employee agrees to promptly return the Employer's property to the
Employer's Florida headquarters upon termination of his employment with the
Employer. The Employer reserves the right to take appropriate legal action
against the Employee in the event of a breach of this provision.
-7-
SECTION 5. VERIFICATION OF COMPLIANCE
Upon termination of employment, the Employee shall, at the request of
the Employer, verify in writing and under oath, in the form attached hereto as
Exhibit A, his compliance with the provisions of this Agreement relating to
Intellectual Property and Confidential Information. This provision shall not
give rise to any independent claim by the Employee for severance pay or other
payments upon the Employee's termination.
SECTION 6. MISCELLANEOUS PROVISIONS
(a) NOTICES. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
delivered personally or sent by prepaid overnight courier for next business day
delivery to the parties at the addresses set forth below their names below (or
at such other addresses as shall be specified by the parties by like notice).
IF TO THE EMPLOYEE:
Sigmund Borax
4212 Marina Court
CORTEZ, FLORIDA 34215
WITH A COPY TO:
Foley & Lardner
100 North Tampa Street
Suite 2700
Tampa, Florida 33602
Russell T. Alba, Esq.
IF TO THE EMPLOYER OR ANY OF THE RELATED ENTITIES:
c/o HEICO Corporation
825 S. Bayshore Drive
Suite 1643
Miami, Florida 33131
Attn: President
-8-
WITH A COPY TO:
Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
150 West Flagler Street
Museum Tower, Suite 2200
Miami, Florida 33130
Attn: Stuart D. Ames, Esq.
Such notices, demands, claims and other communications shall be deemed
given when actually received or in the case of delivery by overnight service
with guaranteed next business day delivery, the next business day or the day
designated for delivery.
(b) ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto relating to the subject matter hereof
and merges all prior discussions, negotiations and agreements, if any, between
them, and neither of the parties hereto shall be bound by any representations,
warranties, covenants, or other understandings relating to the subject matter
hereof, other than as expressly provided or referred to herein.
(c) ASSIGNMENT. This Agreement may not be assigned by the Employee
without the written consent of the Employer but shall be freely assignable by
the Employer in connection with any sale by the Employer of the Prohibited
Business or any substantial part thereof. Subject to the preceding sentence,
this Agreement shall be binding upon, and inure to, the benefit of the parties
hereto and their respective successors, heirs, personal representatives, legal
representatives, and permitted assigns.
(d) WAIVER AND AMENDMENT. Any representation, warranty, covenant,
term or condition of this Agreement which may legally be waived, may be waived,
or the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed by or on
behalf of each such party. No waiver by any party hereto, whether express or
implied, of its rights under any provision of this Agreement shall constitute a
waiver of such party's rights under such provisions at any other time or a
waiver of such party's rights under any other provision of this Agreement. No
failure by any party hereto to take any action against any breach of this
Agreement or default by another party shall constitute a waiver of the former
party's right to enforce any provision of this Agreement or to take action
against such breach or default or any subsequent breach or default by such other
party.
-9-
(e) NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the parties hereto, the Related Parties and their respective
heirs, personal representatives, legal representatives, successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
(f) SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement shall be declared invalid, void or
unenforceable, the remainder of the provisions of this Agreement shall remain in
full force and effect, and such invalid, void or unenforceable provision shall
be interpreted as closely as possible to the manner in which it was written.
(g) HEADINGS. Section headings herein are inserted for convenience
of reference only and are not intended to be a part of, or to affect the meaning
or interpretation of, this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) LITIGATION; PREVAILING PARTY. In the event of any litigation
with regard to this Agreement, the prevailing party shall be entitled to receive
from the non-prevailing party, and the non-prevailing party shall pay upon
demand, all reasonable fees and expenses of counsel for the prevailing party in
connection with such litigation.
(j) GOVERNING LAW AND VENUE. This Agreement has been entered into
and shall be construed and enforced in accordance with the laws of the State of
Florida without reference to the choice of law principles thereof. This
Agreement shall be subject to the exclusive jurisdiction of the courts of the
State of Florida located in Dade or Broward Counties, Florida or the United
States District Court for the Southern District of Florida. The parties
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement, or any judgment entered
by any court in respect hereof brought in Dade or Broward Counties, Florida, and
further irrevocably waive any claim that any suit, action or proceeding brought
in Dade or Broward Counties, Florida has been brought in an inconvenient forum.
(k) REMEDIES CUMULATIVE. No remedy made available by any of the
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity.
-10-
(l) PARTICIPATION OF PARTIES; CONSTRUCTION. The parties hereto
acknowledge that this Agreement and all matters contemplated herein, have been
negotiated between the parties hereto and their respective legal counsel and
that all such parties have participated in the drafting and preparation of this
Agreement from the commencement of negotiations at all times through the
execution hereof. This Agreement shall be construed and interpreted without
regard to any presumption or other rule or interpretation against the party who
may have had primary responsibility for drafting this Agreement.
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
TRILECTRON INDUSTRIES, INC.
By: /S/ VICTOR MENDELSON
--------------------------------
Name: Victor H. Mendelson
Title: Vice Chairman
/S/ SIGMUND BORAX
--------------------------------
SIGMUND BORAX
-11-
EXHIBIT A
My employment by Employer is terminated. I have read and understood my
Employment and Non-Competition Agreement with Employer dated September 16, 1996
(the "AGREEMENT"), and particularly the provisions relating to Intellectual
Property and Confidential Information. I hereby swear, UNDER OATH, that:
I have complied with all provisions of the Agreement,
including those relating to Intellectual Property and Confidential Information.
I have fully disclosed all items of Intellectual Property to
Employer. I have given Employer all documents and other materials referred to in
the Agreement, or if I have not done so, the withheld documents and materials
are: __________________________. If I discover any documents and other materials
covered by this Agreement in my possession in the future, I will immediately
return them to the Employer after discovery.
I understand that the misappropriation of confidential
information and documents may be considered a crime under the laws of the State
of Florida.
--------------------------------
SIGMUND BORAX
STATE OF FLORIDA )
)SS:
COUNTY OF )
The foregoing instrument was acknowledged before me this __ day of
________, 199__ by Sigmund Borax.
Personally Known ______ OR Produced Identification _____
Type of Identification Produced ________________________
----------------------------------------
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
-12-