EXHIBIT 10.2
EMPLOYMENT AND NONCOMPETITION AGREEMENT
AGREEMENT, dated as of the 16th day of September, 1996, by and between
TRILECTRON INDUSTRIES, INC., a New York corporation (the "EMPLOYER"), and
CHARLES L. KOTT (the "EMPLOYEE").
WITNESSETH:
WHEREAS, the Employee desires to continue his employment with 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 September 16, 1996,
pursuant to which all of the outstanding capital stock of the Employer is being
acquired by HEICO Corporation, a Florida corporation ("HEICO"), and will expire
on December 31, 1998 (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 President
of the Employer and shall report to the Chairman of the Employer's Board of
Directors or his designee. The Employee agrees to use his best efforts, entire
professional time, attention, and energies to the advancement and promotion of
the business of the Employer and shall assume and competently perform such
reasonable responsibilities and duties, consistent with the position of
President, as may be assigned to him from time to time by the Chairman of the
Board of the Employer. 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.
(i) BASE SALARY. As 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 (i) during calendar year 1996 at a per
annum rate of $150,000, and (ii) during each succeeding 12-month period of the
Term, at the per annum rate of $150,000 increased by any increases determined to
be warranted by the Employer's Board of Directors in its sole discretion. Such
salary shall be payable in accordance with the customary payroll practices of
the Employer.
(ii) INCENTIVE BONUS. The Employee shall be paid an annual bonus
based on the Operating Income (as hereinafter defined) during each calendar year
or part thereof during which the Employee is employed hereunder ("Incentive
Bonus"); PROVIDED, HOWEVER, that Operating Income for calendar year 1996 shall
include Operating Income of the Employer from January 1, 1996 to the date of
this Agreement (the "PRE-ACQUISITION PERIOD"). Each Incentive Bonus shall be
equal to six percent (6%) of Operating Income for such calendar year or part
thereof and shall be paid promptly following the determination of Operating
Income for such period. As used in this section and SECTION 2(b), "OPERATING
INCOME" means net revenue of the Employer from operations, excluding revenue
earned at the corporate level and not derived from the operations of the
Employer during the Pre-Acquisition Period or the Employer after the date of
this Agreement, as the case may be, minus all Operating Expenses (as hereinafter
defined) and (to the extent not otherwise included in Operating Expenses) all
interest expense incurred by the Employer as a result of all debt for borrowed
money in excess of $2,500,000 and its industrial development revenue bond
financing, all determined, to the extent not inconsistent with the provisions of
this clause (ii), in accordance with the methodology employed by the Employer
prior to the date of the Stock Purchase Agreement and with generally accepted
accounting principles consistently applied from year to year. For purposes of
this section, "OPERATING EXPENSES" means operating expenses which are directly
traceable to the business of the Employer during the Pre-Acquisition Period and
to the business of the Employer thereafter but shall exclude general corporate
expense allocations of HEICO other than those which are directly traceable to
the operations of the Employer (such as legal and accounting fees and insurance
but excluding any allocation of HEICO corporate overhead such as HEICO's
officers' salaries), domestic and foreign income taxes, extraordinary items,
minority interests, and the cumulative effects of changes in accounting
principles.
(iii) PERFORMANCE BONUS. In addition to the Incentive Bonus, the
Employee shall be eligible to participate in a bonus pool (the "Bonus Pool") to
be established annually by the Employer for the benefit of the Employee and the
four other executive officers of the Employer or any other executive officer or
officers of the Employer who may from time to time be substituted for any such
executive officer(s) whose employment
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with the Employer is (are) terminated. The Employer shall contribute to the
Bonus Pool each year, commencing with the calendar year 1997, an amount equal to
thirty percent (30%) of the amount, if any, by which actual Operating Income for
the immediately preceding calendar year exceeds the projected Operating Income
for such preceding year in the Projections set forth on EXHIBIT A attached
hereto. The percentages (which may be as little as zero and as great as 100%) of
the Bonus Pool to be allocated to each participating executive officer in each
year shall be determined in the sole discretion of the Employee and may be
varied from year to year, PROVIDED, HOWEVER, that the Employee's participation
in the Bonus Pool ("Performance Bonus") for any year shall not exceed twenty
percent (20%) of the Bonus Pool for such year.
(iv) STOCK OPTIONS. Simultaneous with the execution of this
Agreement, the Employer's parent company, HEICO, has granted to the Employee an
option (the "Option") to purchase an aggregate of 19,800 shares (the "Option
Shares") of HEICO's Common Stock, $.01 par value per share, pursuant to the
terms of a Grant of Non-Qualified Stock Option of even date herewith entered
into between HEICO and Employee. The Option shall qualify the Employee to
purchase the Option Shares at a purchase price of $18.30 per share, shall vest
as to one-third of the Option Shares on December 31, 1996, December 31, 1997 and
December 31, 1998 and shall have a term of ten years. The right of the Employee
to exercise the Option with respect to one-half of the total Option Shares which
vest each year shall be subject to the Employer achieving plan performance for
such year as specified in the Grant of Non-Qualified Stock Option, with his
right to purchase the remaining one-half of the Option Shares not being so
subject.
(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. Except as provided herein, the Employer will provide to the Employee
such pension benefits, holiday, 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. For
purposes of determining the Employee's entitlement to, and level of, employee
benefits, the Employee will be credited with his prior tenure with the Employer.
The Employer shall provide the Employee with three (3) weeks paid vacation for
calendar year 1996 and four (4) weeks paid vacation for each ensuing calendar
year under this Agreement, but the Employee shall not be entitled to receive
vacation pay in lieu of leave for accrued but unused vacation leave nor shall
the Employee be entitled to accrue vacation time from year-to-year.
(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
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with the Employer as the sole beneficiary thereof. 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 FOR CAUSE. The Employer may terminate
the employment of the Employee at any time for Cause (as defined below) either
with or without notice. Following termination of employment of the Employee for
Cause, the Employer shall: (i) promptly pay the Employee his Incentive Bonus
which had accrued as of the end of the last full calendar month prior to the
date on which the Employee's employment was terminated if the Incentive Bonus
was not previously paid with respect to such period; and (ii) promptly pay the
Employee the Performance Bonus which had accrued as of the end the last calendar
year immediately prior to the year in which the Employee's employment is
terminated (the "Termination Year") if the Performance Bonus was not previously
paid with respect to such prior year. As used in this Agreement, "CAUSE" shall
mean: (i) dishonesty or other unlawful conduct by the Employee that adversely
affects the Employer; (ii) the Employee's conviction for commission of a felony
or of any crime involving moral turpitude, fraud, dishonesty or
misrepresentation, or (iii) any material breach by the Employee of this
Agreement or failure to perform his duties hereunder (other than by reason of
his death or disability), after written notice from the Chairman of the Board of
Directors of the Employer to the Employee specifying in reasonable detail the
nature of the acts or omissions constituting such breach or failure and a
reasonable opportunity to cure said breach or failure if the same is curable.
(b) TERMINATION BY THE EMPLOYER FOR FAILURE TO MEET PROJECTIONS. The
Employer may also terminate the employment of the Employee by giving notice to
the Employee at any time within 90 days following the end of the calendar years
1996 or 1997, if the Operating Income for any such year is less than
seventy-five percent (75%) of the projected Operating Income set forth for such
year in EXHIBIT A attached hereto; PROVIDED, HOWEVER, that Operating Income for
calendar year 1996 shall include Operating Income of the Employer during the
Pre-Acquisition Period. If such right to terminate with respect to an Operating
Income shortfall for any year is not exercised within the 90- day period
following the end of such year, it may not thereafter be exercised unless there
is an Operating Income shortfall with respect to a succeeding calendar year. If
the Employer exercises the option to terminate the employment of the Employee
pursuant to this SECTION 2(bP, the Employer shall: (i) pay the Employee (in
accordance with the customary payroll practices of the Employer) his base salary
(in effect at the time of the Employee's termination) during the one-year period
following such termination; (ii) promptly pay the Employee his Incentive Bonus
which had accrued as of the end of the
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last calendar year prior to the Termination Year if the Incentive Bonus was not
previously paid with respect to such prior year; (iii) promptly pay the Employee
the Performance Bonus which had accrued as of the end of the last calendar year
prior to the Termination Year if the Performance Bonus was not previously paid
with respect to such prior year; and (iv) pay to the Employee his Incentive
Bonus which had accrued as of the last full calendar month prior to the date on
which the Employee's employment was terminated if the Incentive Bonus was not
previously paid with respect to such period.
(c) TERMINATION BY THE EMPLOYER FOR DISABILITY OF EMPLOYEE. The Employer
may also terminate the employment of the Employee if the Employee becomes unable
to perform his duties hereunder by reason of serious illness, mental incapacity
or physical disability which continues for any continuous period of ninety (90)
days or for periods aggregating ninety (90) days in any one hundred eighty (180)
day period, which termination shall become effective upon giving a termination
notice to the Employee at any time after the expiration of the applicable 90- or
180-day period. If the Employer terminates the employment of the Employee
pursuant to this SECTION 2(c), the Employee shall be entitled to the salary,
Incentive Bonus and Performance Bonus payments specified in SECTION 2(b) except
that the Termination Year shall be the calendar year in which the notice of
termination is given under this SECTION 2(c). In addition, the Employer shall
pay to the Employee his Incentive Bonus which had accrued as of the last full
calendar month prior to the date on which the Employee's employment was
terminated if the Incentive Bonus was not previously paid with respect to such
period.
(d) VOLUNTARY TERMINATION BY EMPLOYEE. The Employee may choose to
voluntarily terminate his employment by providing the Employer with at least
twenty (20) business days' written notice of his intent to voluntarily terminate
employment ("TERMINATION NOTICE PERIOD"). Voluntary termination within the
contemplation of this Section does not include constructive discharge. 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 base
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 freely and voluntarily terminates his employment with
the Employer, the Employer shall: (i) promptly pay the Employee his Incentive
Bonus which had accrued as of the end of the last full calendar month prior to
the date on which the Employee's employment is terminated if the Incentive Bonus
was not previously paid with respect to such period; and (ii) promptly pay the
Employee the Performance Bonus which had accrued as of the end the calendar year
immediately prior to the Termination Year if the Performance Bonus was not
previously paid with respect to such prior year.
(e) TERMINATION OF AGREEMENT OF BY DEATH OF THE EMPLOYEE. This
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Agreement shall be terminated by the death of the Employee as of the date of
death. In the event of the Employee's death, the Employer shall pay any
beneficiary of the Employee designated by him in a writing on file with the
Employer at the time of his death, or if no such writing is on file, to his
estate, the salary, Incentive Bonus and Performance Bonus payments specified in
SECTION 2(c) except that the Termination Year shall be the calendar year in
which the Employee's death occurs.
(f) TERMINATION BY THE EMPLOYER WITHOUT CAUSE. If the Employer
terminates the employment of the Employee for any reason other than those
specified in SECTIONS 2(a), (b), (c) or (e), the Employer shall pay the
Employee, in accordance with the Employer's customary payroll practices, the
base salary which he would be entitled to receive pursuant to SECTION 1(c)(I)
for the remainder of the Term, and the Employee shall continue to remain bound
by the provisions of SECTION 3(B) and each of the other provisions of SECTION 3
for the remainder of such Term. In the event of such termination of employment,
the Employee shall also be entitled to the Incentive Bonus and Performance Bonus
payments specified in SECTION 2(b). In addition, the Employer shall pay to the
Employee, promptly following the end of the Termination Year, a Performance
Bonus, if any is earned for the Termination Year, equal to the Performance Bonus
he would have received if he had been employed for the full Termination Year
multiplied by a percentage the numerator or which is the number of full calendar
months in the Termination Year during which the Employee was employed hereunder
and the denominator of which is twelve (12) and multiplying the resultant number
by the same percentage of the Bonus Pool that he was paid for the calendar year
immediately prior to the Termination Year. In addition, although the Employer is
not obligated to pay the Employee any additional salary pursuant to SECTION
1(c)(1) or other compensation hereunder following the expiration of the Term
(except as provided above in this SECTION 2(f)), if the Employer, at its option,
elects to continue to pay such salary for the one- or two-year period following
the expiration of the Term, the Employee shall continue to be bound by the
provisions of SECTION 3(b) for such additional year or years, as the case may
be. In any event, the Employee shall continue to be bound by all of the other
provisions of SECTION 3 for the time periods specified therein. The Employer
shall have no liability to the Employee for termination of employment of the
Employee without Cause other than as provided in this Section 2(f).
SECTION 3. NON-COMPETITION; STANDSTILL; PROTECTION OF CONFIDENTIAL
INFORMATION; ETC.
(a) RATIONAL 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. The Employee also acknowledges that the Employer designs,
manufactures, sells and services certain aircraft ground and
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support equipment (such services and products provided or manufactured by the
Employer being herein referred to collectively as "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. The Employee and the Employer agree that both prior to and during the
course of his employment with the Employer (including during the Pre-Acquisition
Period) Employee had, has, and will 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 for
the protection of the goodwill and legitimate business interests of the Employer
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 COMPETING 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; PROVIDED, HOWEVER, that the
restrictions set forth in this SECTION 3(b) shall not apply in the event of the
expiration of the Term unless at least 90 days prior to the end of the Term, the
Employer offers to the Employee a two-year extension of this Agreement on
substantially the same terms and conditions (including the grant of an
additional stock option with respect to HEICO Common Stock) as are contained in
this Agreement; PROVIDED FURTHER, HOWEVER, that if the Employer terminates the
employment of the Employee without Cause as provided in SECTION 2(f) and the
Employer and does not elect to continue the Employee's base salary following the
expiration of the Term as provided in such section, the restrictions set forth
in this SECTION 3(b) shall not apply following such expiration. During the
Restrictive Period, the Employee agrees not to utilize his special knowledge of
the business of the Employer and his relationship with customers, suppliers and
others to compete with the Employer in any business which is the same as or
substantially similar to the business (the "PROHIBITED BUSINESS") conducted by
the Employer at any time during the Employer's employment of the Employee.
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
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
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investment of capital, lending of money or property, rendering of services or
advice or otherwise, in any business competitive with or substantially 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, 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 the Employer in an attempt to divert any business relating to the Products
from the Employer or prevent the Employer from receiving any business relating
to the Products or (ii) recruit or otherwise solicit or induce any person who
was an employee of, or otherwise engaged by, the Employer at any time during the
Restrictive Period to terminate his or her employment or other relationship with
the Employer or hire any person who has left the employ of the Employer during
the Restrictive Period. The Employee shall not at any time, directly or
indirectly, use or purport to authorize any person to use 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 the Employer 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 ten (10) years from the date hereof,
he will not (i) acquire, offer or agree to acquire, directly or indirectly, by
purchase or otherwise, control of the Employer or any of the Related Entities,
(ii) 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, (iii) 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 individual(s) not
nominated and supported by the Employer or any of the Related Entities, their
management or their Board of Directors, (iv) pursue, assist any person or entity
in pursuing, 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' Board of Directors
, or (v) advise or otherwise act, alone or in concert with others, directly or
indirectly, to seek
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to control or influence the management, Board of Directors or policies of the
Employer or any of the Related Entities. References in this Section to "Related
Entities" means at any time only those Related Entities which at such time have
a class of securities registered under the Securities Exchange Act of 1934, as
amended.
(d) DISCLOSURE OF CONFIDENTIAL INFORMATION. The Employer 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 and proprietary information with respect to the business and
operations of the Employer, which cannot be ascertainable by lawful means, 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 and 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, 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 or
may be readily ascertainable through lawful means.
(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, during the
Restrictive Period, he shall not make any comments concerning the Employer or
any
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of the Related Entities to any individual or entity, including but not limited
to, clients, customers, employees, or financial or credit institutions, which
have a reasonable likelihood of causing an adverse effect on the Employer or any
of the Related Entities; PROVIDED, HOWEVER, that this provision shall not apply
to statements made by the Employee pursuant to an order of a court or other
tribunal having jurisdiction over the Employee or to statements made in the
course of litigation or arbitration between the parties hereto.
(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 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 and remedies which may be available to the Employer
and the Related Entities. 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 of the parties that the
provisions of SECTIONS 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)
and (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 this SECTION 3, 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. Except as provided above, 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.
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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 or expiration 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.
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 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:
Charles L. Kott
732 Live Oak Terrace, N.E.
St. Petersburg, Florida 33703
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
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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.
(e) NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
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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,
including without limitation any arbitration, 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,
including, without limitation, reimbursement for all attorneys' fees and
expenses incurred in successfully enforcing or successfully defending against
the enforcement of the provisions of SECTION 3.
(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) ARBITRATION. Upon demand of either party hereto, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement
("Disputes") between parties to this
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Agreement shall be resolved by binding arbitration as provided herein. Disputes
may include, without limitation, claims for breach of contract, counterclaims
and disputes as to whether a matter is subject to arbitration. Arbitration shall
be conducted under and governed by the Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association. All arbitration hearings shall
be conducted in Dade or Broward County, Florida, before a panel of three (3)
arbitrators. Each party hereto shall select one of the three arbitrators and the
two so selected shall select the third, PROVIDED, HOWEVER, that if the two
arbitrators cannot agree upon a third arbitrator, the third arbitrator shall be
selected in the manner provided in the Arbitration Rules. All applicable
statutes of limitation shall apply to any Dispute. A judgment upon the award may
be entered in any court having jurisdiction.
Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that the
Employer may employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The Employer
shall have the right to proceed in any court of proper jurisdiction to obtain
provisional or ancillary remedies, including injunctive or other equitable
relief, against any violation by the Employee of any of the provisions of
SECTION 3 hereof; PROVIDED, HOWEVER, that should the Employer initiate such an
action, this section shall not bar the Employee from raising, either by way of
affirmative defense or counterclaim, any claims Employee has against the
Employer. Preservation of these remedies does not limit the power of the
arbitrators to grant similar remedies that may be requested by a party in a
Dispute.
(l) 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.
(m) 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.
[Signatures are on next page]
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
/S/ CHARLES L. KOTT
---------------------------------
CHARLES L. KOTT
TRILECTRON INDUSTRIES, INC.
By: /S/ VICTOR MENDELSON
------------------------------
Name: VICTOR MENDELSON
Title: VICE CHAIRMAN
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EXHIBIT A
PROJECTIONS (000'S $)
- ----------------------------------------------------------------------------------------------------------
YEAR 1996 1997 1998 1999* 2000*
---- ---- ---- ---- ----
- ----------------------------------------------------------------------------------------------------------
Net Sales 15,000 17,000 18,500 21,000 22,000
- ----------------------------------------------------------------------------------------------------------
Gross Profit 3,680 4,240 4,730 5,460 5,890
- ----------------------------------------------------------------------------------------------------------
Operating 2,250 2,550 2,775 3,150 3,330
Expense
- ----------------------------------------------------------------------------------------------------------
Operating 1,430 1,690 1,955 2,310 2,590
Income
- ----------------------------------------------------------------------------------------------------------
- ----------------------------
* The years 1999 and 2000 are included solely in the event this Agreement is
renewed by the parties hereto, neither such party being obligated to so renew.
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EXHIBIT B
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:
1. I have complied with all provisions of the Agreement, including
those relating to Intellectual Property and Confidential Information.
2. I have fully disclosed all terms 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.
3. I understand that the misappropriation of confidential
information and documents may be considered a crime under the laws of the State
of Florida.
-----------------------------
CHARLES L. KOTT
STATE OF FLORIDA )
) SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this __ day of
________, 199__, by Charles L Kott.
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:
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