Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (this “Agreement”) is made and
entered into by and between David A. Baldini (“Baldini”) and Aerosonic
Corporation (the “Company”).

WHEREAS, Baldini has been employed by the Company as its Chairman, President and
Chief Executive Officer, pursuant to that certain Amended and Restated
Employment Agreement by and between the Company and Baldini, dated as of
November 28, 2005 (the “Employment Agreement”), which is attached hereto as
Exhibit  A;

WHEREAS, effective November 16, 2007 Baldini had separated from service with the
Company and pursuant to such separation Baldini has resigned from his position
as a member and Chairman of the Board Directors of the Company (the “Board”) and
from all other positions with the Company and its subsidiaries or affiliates;
and

WHEREAS, Baldini and the Company desire to set forth the terms of Baldini’s
separation from the Company.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:

1.       Cessation of Employment. Baldini confirms the effectiveness of his
separation from service with the Company as President and Chief Executive
Officer of the Company, member and Chairman of the Board and from all other
positions with the Company and its subsidiaries or affiliates (including, but
not limited to, Avionics Specialties, Inc. and Op Technologies, Inc.) effective
November 16, 2007.

2.          Effective Date. The effective date of this Agreement shall be the
eighth day after Baldini signs this Agreement (the “Effective Date”). As of the
Effective Date, if Baldini has not revoked this Agreement pursuant to Section 11
below, this Agreement shall be fully effective and enforceable.

 

3.

Severance and Benefits.

a.          Severance Pay. From November 16, 2007 (the “Separation Date”)
through the eighteen (18)-month anniversary thereof (the “Severance Period”),
Baldini shall be compensated by payment at his regular base salary rate in
effect as of the Separation Date of this Agreement (provided, that this
Agreement shall have been executed by the parties and not revoked by Baldini),
payable in accordance with the normal payroll periods of the Company; provided,
however, that the first severance payment made to Baldini pursuant to this
Section 3(a) shall include any and all base salary not previously paid to
Baldini for the period from the Separation Date through the Effective Date
(provided, that this Agreement shall have been executed by the parties and not
revoked by Baldini).

b.          Benefits. Through the twenty-eight (28)-month anniversary of the
Separation Date (the “Benefit Period”), the Company shall continue to provide
Baldini and his spouse health insurance at least as comprehensive as the health
insurance provided to Baldini and his spouse immediately prior to the Separation
Date (the “Continued Health Insurance”). In the event that during the Benefit
Period Baldini obtains other employment which provides him health benefits
comparable to the Continued Health Insurance, then the Continued Health
Insurance shall cease at such time. The monthly premium cost to Baldini for the
Continued Health Insurance shall be no greater than the monthly cost to Baldini
for the Company-provided health insurance as in place immediately prior to the
Separation Date. Notwithstanding the foregoing, Baldini’s rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) shall not in
any way be diminished as a result of the foregoing.

c.          Outplacement Services; Legal Fees. In connection with Baldini’s
search for a new position, the Company will pay for executive recruiting fees in
an amount equal to one month of Baldini’s base salary, payable to Baldini within
ten (10) days of the Effective Date. Baldini shall also be entitled to
reimbursement of legal fees incurred in connection with the negotiation and
review of this Agreement, such reimbursement of legal fees incurred by Baldini
in connection with the negotiation and preparation of this Agreement not to
exceed an aggregate of $5,000.

 

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d.          PTO Reimbursement. Baldini hereby acknowledges and agrees that he
has received full payment of his accrued, unused paid time off (“PTO”) as of the
Separation Date and he is not entitled to any other PTO payment as of the date
of his separation from service with the Company.

e.          Other Compensation. Baldini shall not be entitled to any other forms
of compensation during the Severance Period except as provided herein. All
payments shall be subject to applicable withholdings.

f.           Insurance Coverage. Nothing in this Agreement shall be interpreted
to create or to waive any rights that Baldini may have to coverage under any
insurance policy maintained by the Company for director’s and officer’s
liability coverage.

g.          Stock Options. Notwithstanding anything to the contrary in any other
agreement or arrangement, written or otherwise, Baldini will be permitted to
exercise any stock options that may be vested as of the Separation Date, until
the twelve (12) month anniversary of the Separation Date.

4.          Confidential Information and Trade Secrets. Baldini agrees to
protect and hold in confidence all Trade Secrets (as defined below) and
Confidential Information (as defined below) (collectively, “Company
Information”) belonging to the Company that Baldini has received through or as a
result of Baldini’s employment by the Company and to take no action that may
cause any such information to lose its character as Company Information. Baldini
shall neither disclose, divulge nor communicate to any third party any Trade
Secrets belonging to the Company.

For purposes of this Section 4, “Confidential Information” means confidential
data and confidential information relating to the Company’s business (which does
not rise to the status of a Trade Secret) which has value to the Company and is
not generally known to its competitors, including, but not limited to, Company
pricing information, marketing information, revenue, customer preferences,
customer lists, and other financial, marketing and sales information that would
have value if disclosed to competitors. Confidential Information shall not
include any data or information that (i) has been voluntarily disclosed to the
public by the Company, (ii) has been independently developed and disclosed to
the public by others, (iii) otherwise enters the public domain through lawful
means, or (iv) was already known by the Baldini at the time of disclosure to
him.

For purposes of this Section 4, “Trade Secrets” means information including, but
not limited to, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product or service plans or lists of actual or
potential customers or suppliers or customer preferences which (1) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means, by other persons who can obtain
economic value from its disclosure or use; and (2) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy. The
provisions in this Agreement restricting the disclosure and use of Trade Secrets
shall survive the execution of the Agreement and shall survive for so long as
the respective information qualifies as a trade secret under applicable law.

5.          Non-Compete. Baldini agrees that through the eighteenth (18th) month
anniversary of the Separation Date he will not, directly or indirectly, engage
in or be concerned with or interested in, advise, lend money to, guarantee the
debts or obligations of, or permit his name or any part thereof to be used or
employed by, any business (whether as a proprietor, partner, joint venturer,
employer, agent, employee, consultant, officer, beneficial or record owner
(other than as a passive investor owning less than a 2% interest in a publicly
held company)) which is competitive in any respect with any of the businesses of
the Company and its subsidiaries as conducted as of the Separation Date or which
is, directly or indirectly, engaged in the design, development, production,
marketing or distribution of products of the nature designed, developed,
produced marketed or distributed by the Company or any of its subsidiaries as of
the Separation Date. If any of the foregoing provisions relating to the
duration, business or geographic scope of this covenant shall be held to be more
restrictive than permitted by the law of the jurisdiction in which the Company
seeks enforcement thereof by the final determination of a court of competent
jurisdiction, and all appeals therefrom shall have failed or the time for such
appeals shall have expired, such provision, shall be limited to the extent
permitted by law. It is agreed that it would be impossible to fully compensate
the Company for damages for breach of the obligations of Baldini hereunder.
Accordingly, Baldini and the Company specifically agree that the Company and any
of its affiliates or successors shall be entitled to temporary and permanent
injunctive relief to enforce such obligations and that such relief may be
granted without the necessity of proving actual damages.

6.          Acknowledgment and Incorporation of Continuing Post-Employment
Restrictions. Baldini and the Company acknowledge that notwithstanding anything
herein to the contrary, or that could be construed to the contrary, each shall
remain bound by paragraphs 5, 11, 12 and 14 of the Employment Agreement, in
accordance with their terms, which paragraphs are incorporated herein by
reference. A copy of the Employment Agreement is attached as Exhibit  A.

 

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7.          Non-disparagement. Baldini shall not disparage Company products, the
Company, any subsidiary or affiliate, or any of Company’s directors, officers or
employees. The Company agrees that neither the members of the Board nor its
executive officers shall disparage Baldini.

8.          Severability. The provisions of this Agreement are severable, and if
any part of them are found to be unenforceable, the other provisions of this
Agreement shall remain fully valid and enforceable.

 

9.

Complete Release.

a.          Release by Baldini. As a material inducement to the Company to enter
into this Agreement, Baldini hereby irrevocably and unconditionally releases,
acquits, and forever discharges the Company and each of the Company’s
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, attorneys, parent companies, divisions, subsidiaries,
affiliates (and agents, directors, officers, employees, representatives and
attorneys of such parent companies, divisions, subsidiaries and affiliates), and
all persons acting by, through, under or in concert with any of them
(collectively, the “Company Releasees”), or any of them, from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses of any nature whatsoever, known or unknown,
suspected or unsuspected, including, but not limited to, any rights arising out
of any alleged contracts or violations or breaches of any contracts, express or
implied, or any tort, or any legal restrictions on the Company’s right to
terminate employees, or any federal, state or other governmental statute,
regulation, or ordinance (all collectively hereinafter referred to as the
“Claim” or “Claims”) and, including, without limitation, (1) Title VII of the
Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race,
color, religion, sex, and national origin discrimination); (2) the Americans
with Disabilities Act (disability discrimination); (3) 42 U.S.C. § 1981
(discrimination); (4) the federal Age Discrimination in Employment Act (age
discrimination); (5) the Older Workers Benefit Protection Act; (6) the Equal Pay
Act; and (7) the Employee Retirement Income Security Act (“ERISA”), which
Baldini now has, owns or holds, or claims to have, own or hold, or which Baldini
at any time heretofore had owned or held, or claimed to have owned or held,
against each or any of the Company and the Company Releasees at any time up to
and including the Effective Date of this Agreement.

b.           Release by the Company. As a material inducement to Baldini to
enter into this Agreement, the Company and the Company Releasees hereby
irrevocably and unconditionally release, acquit, and forever discharge Baldini
and each of Baldini’s heirs, assigns, agents, representatives, attorneys, and
all persons acting by, through, under or in concert with any of them
(collectively, the “Baldini Releasees”), from any and all Claims which the
Company and the Company Releasees now have, own or hold, or claim to have, own
or hold, or which the Company or the Company Releasees at any time heretofore
had owned or held, or claimed to have owned or held, against each or any of
Baldini and the Baldini Releasees at any time up to and including the Effective
Date of this Agreement.

 

10.

No Knowledge of Illegal Activity; Cooperation; No Further Employment.

a.           No Knowledge of Illegal Activity. Baldini acknowledges that he has
no knowledge of any actions or inactions by any of the Company Releasees or by
Baldini that he believes could possibly constitute a basis for a claimed
violation of any federal, state, or local law, any common law or any rule
promulgated by an administrative body (including, without limitation, any breach
of fiduciary duty to the Company).

 

b.

Cooperation.

(i)        Baldini shall fully cooperate in the defense of any action brought by
any third party against the Company that relates in any way to Baldini’s acts or
omissions while employed by the Company or in the defense of any action brought
by any third party relating to litigation pending against the Company as of the
Separation Date.

(ii)        During the Severance Period, Baldini shall be reasonably available
to respond to reasonable requests by the Company for information pertaining to
or relating to matters which may be within the knowledge of Baldini; provided,
however, that the activity per this Subsection (ii) shall not materially
interfere with Baldini’s then-current professional activities. The Company
agrees to indemnify, defend and hold harmless Baldini against any liability
incurred by, or claims made against, Baldini within the course and scope of
activity performed per this Subsection (ii). Baldini’s performance of any
activity per this Subsection (ii) shall never be greater than 20 percent of the
average level of services performed by Baldini during the immediately preceding
36-month period, per the guidance on separation from service in Treasury
Regulation Section 1.409A-1(h)(ii).

 

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(iii)      The Company shall reimburse Baldini for all reasonable expenses
incurred in the performance of activity performed per this Subsection (b) in
accordance with the Company’s expense reimbursement guidelines.

c.           No Further Employment. Baldini understands and agrees that he is
not entitled to any further or future employment with the Company or further or
future compensation and/or payments of any kind from the Company other than
those specifically provided for under this Agreement. Baldini warrants and
represents that he shall not hereafter reapply for or otherwise seek any
position of employment with the Company and he shall not institute or
participate in any claim, action, lawsuit or proceeding against the Company for
any failure to employ or re-employ him after the Effective Date.

11.        Age Discrimination in Employment Act. Baldini hereby acknowledges and
agrees that this Agreement and the separation of service of Baldini’s employment
and all actions taken in connection therewith are in compliance with the Age
Discrimination in Employment Act and the Older Workers Benefit Protection Act
and that the release set forth in Section 9 hereof shall be applicable, without
limitation, to any claims brought under these Acts. Baldini further acknowledges
and agrees that:

a.        The release given by Baldini in this Agreement is given solely in
exchange for the consideration set forth in Section 3 of this Agreement and such
consideration is in addition to anything of value which Baldini was entitled to
receive prior to entering into this Agreement;

b.         By entering into this Agreement, Baldini does not waive rights or
claims that may arise after the date this Agreement is executed;

c.         Baldini has been advised to consult an attorney prior to entering
into this Agreement, and this provision of the Agreement satisfies the
requirement of the Older Workers Benefit Protection Act that Baldini be so
advised in writing;

d.         Baldini has been offered twenty-one (21) days from receipt of this
Agreement within which to consider the terms of this Agreement; and

e.         For a period of seven (7) days following Baldini’s execution of this
Agreement, Baldini may revoke this Agreement, and this Agreement shall not
become effective or enforceable until such seven (7) day period has expired.

12.        No Other Representations. Baldini represents and acknowledges that in
executing this Agreement, Baldini does not rely, and has not relied, upon any
representation or statement not set forth herein made by any of the Company
Releasees or by any of the Company Releasees’ agents, representatives, or
attorneys with regard to the subject matter, basis or effect of the Agreement or
otherwise.

13.        Sole and Entire Agreement. This Agreement sets forth the entire
agreement between the parties hereto, and supersedes any and all prior
agreements or understandings between the parties, except as to paragraphs 5, 11,
12 and 14 of the Employment Agreement attached as Exhibit  A.

14.        Binding Effect, Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
representatives, successors, transferees and permitted assigns. This Agreement
shall not be assignable by Baldini but shall be freely assignable by the
Company.

15.        Knowledgeable Decision by Baldini. Baldini represents and warrants
that he has read all the terms of this Agreement. Baldini understands the terms
of this Agreement and understands that this Agreement releases forever the
Company from any legal action arising from Baldini’s relationship with the
Company. Baldini is signing and delivering this Agreement of his own free will
in exchange for the consideration to be given to Baldini, which Baldini
acknowledges and agrees is adequate and satisfactory.

16.        Full and Careful Consideration. Baldini may take up to twenty-one
(21) days to decide whether Baldini wants to accept and sign this Agreement.
Also, if Baldini signs this Agreement, Baldini will have an additional seven (7)
days after signing to revoke this Agreement. This Agreement will not be
effective or enforceable, nor will any consideration be paid, until after the
revocation period has expired. Again, Baldini is free, and encouraged, to
discuss the contents and advisability of signing this Agreement with an
attorney.

 

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17.        Return of Company Materials and Property. Baldini understands and
agrees that, as of the Separation Date, Baldini will return to the Company all
files, memoranda, records, credit cards, manuals, computer equipment, computer
software, pagers, cellular phones, facsimile machines, vehicles, and any other
equipment and other documents or information, whether in electronic or some
other form, and all other physical or personal property that Baldini received
from the Company and/or that he used in the course of his employment with the
Company and that are the property of the Company or its customers.

18.        Section 409A. This Agreement is intended to comply with the
applicable requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and shall be construed and interpreted in accordance
therewith. Notwithstanding the preceding, the Company shall not be liable to
Baldini or any other person if the Internal Revenue Service or any court or
other authority having jurisdiction over this matter determines for any reason
that any payments under this Agreement are subject to taxes, penalties or
interest as a result of failing to comply with Section 409A of the Code.

19.        Delay of Payment. Notwithstanding any other provision of this
Agreement, if Baldini is a “specified employee” within the meaning of
Section 409A of the Code, to the extent necessary to comply with Section 409A of
the Code, no payments (which are not otherwise exempt) may be made hereunder
before the date which is six months after Baldini’s separation from service or,
if earlier, his death. Any amounts which would have otherwise been required to
be paid during such six months, or if earlier, until Baldini’s death shall be
paid to Baldini in one lump sum cash payment as soon as administratively
practical after the date which is six (6) months after Baldini’s separation from
service or, if earlier, after Baldini’s death. Any other payments scheduled to
be made under this Agreement shall be made and provided at the times otherwise
designated in this Agreement disregarding the delay of payment for the payments
described above. Additionally, notwithstanding any other provision of this
Agreement, Baldini will only be entitled to receive payment on separation from
service with the Company when the separation qualifies as a “separation from
service” within the meaning of Section 409A of the Code. The Company and Baldini
acknowledge that the severance pay provided in this Agreement does not exceed
the limit described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A).

20.        Venue. Baldini agrees that, at the option of the Company, any action
brought to enforce or to test the enforceability of any provision of this
Agreement, may be brought in either the United States District Court for the
Middle District of Florida, or the Circuit Court of Pinellas County, Florida.
Baldini hereby voluntarily consents to personal jurisdiction in the State of
Florida and waives any right he may otherwise have to contest the assertion of
jurisdiction over him in Florida.

21.        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.

[Signatures on next page]

 

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January 2, 2008

/s/ David A. Baldini

Date David A. Baldini

 

January 2, 2008

AEROSONIC CORPORATION

Date

 

/s/ P. Mark Perkins

By: P. Mark Perkins
Its: Interim President and CEO

 

 

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Exhibit “A”

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This employment agreement (the "Agreement"), made this 28 th day of November,
2005, by and between Aerosonic Corporation, a Delaware corporation (the
"Company"), and David A. Baldini (the "Employee") residing at 595 Glengarry
Court, Earlysville, Virginia 22936.

WHEREAS, the Company and the Employee entered into an employment agreement dated
May 14, 2003 (the "Original Agreement").

WHEREAS , the Company wishes to amend and restate the Original Agreement on the
terms and conditions hereinafter set forth.

NOW, THEREFORE , for these and other valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Employee
hereby agree as follows:

1.

Employment of Employee.  On the terms and conditions hereinafter set forth, the
Company hereby employs the Employee as Chairman, President and Chief Executive
Officer and the Employee hereby accepts such employment.

2.

Duration of Employment.  Employment of the Employee by the Company hereunder
shall commence at the date of the consummation of the Agreement and shall
continue for a period of three years from such date.  This Agreement shall be
renewed automatically for one additional year on the first anniversary of the
commencement of the Term and on each subsequent anniversary thereafter, unless
earlier terminated pursuant to the provisions of paragraph 8 hereof, or unless
either party provides the other with a notice of termination at least 180 days
prior to such anniversary date. (As used in this Agreement, "Term" shall mean
the initial term and any renewal term of this Agreement).

3.

Duties of Employee.   The Employee shall serve the Company well and faithfully
and shall, at all times, use his best efforts to promote the interest thereof
and during the term of his employment hereunder shall devote his full business
time and energies to the Company and its subsidiaries.  The Employee shall
comply with all lawful requests and directions given to him by the Board of
Directors of the Company (the "Directors") consistent with this position set
forth in paragraph 1 and shall supply the Directors with such information and
reports as the Directors may from time to time reasonably request.

4.

Place of Employment.  Except with his consent, the Employee shall not be
required to perform duties which require his principal office or residence be
maintained outside 1212 North Hercules Avenue, Clearwater, FL 33765; provided,
however, that, in the discharge of his responsibilities hereunder, the Employee
agrees to travel on business for reasonable time periods commensurate with his
duties.  The Employee shall be reimbursed for such travel in accordance with the
Company's policy in respect thereof.  All other out-of-pocket expenses incurred
in connection with the Employee's duties under this agreement shall be
reimbursed in accordance with the Company's policy in respect thereof.

5.

Confidential information.  The Employee shall not disclose the private affairs
of the Company, or any subsidiary or affiliate of the Company, to any person
other than such persons as the Directors or Management may direct or for the
Company's purposes, and shall not use for his own purpose or for any purpose
other than those of the Company, its subsidiaries or affiliates any information
of a confidential nature in relation to the business of the Company or any
subsidiary or affiliate of the Company they may have or acquire.

 

 

 

 

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6.

Compensation of Employee.  During the term of employment provided for herein,
the Employee shall be paid a minimum annual salary of $ 197,600 in U.S. dollars
("Base Salary"), which salary shall be paid to the Employee in equal biweekly
installments in arrears.  Any increases in the Base Salary will be recommended
by the Compensation Committee and approved by the Board of Directors.

7.

Benefits and Future Bonuses.  During the term of this agreement, Employee shall
be entitled to participate in and shall receive such benefits from the Company
as are afforded comparable executive employees subject to benefit plan
restrictions and Company policy as it may be in effect from time to time.  All
bonuses and stock options will be recommended by the Compensation Committee and
approved by the Board of Directors.

8.

Termination of Employment.  The Employee's employment under this agreement shall
terminate upon the death of the Employee and may be terminated by the Company at
its option, by notice in writing to the Employee at least thirty (30) days prior
to said termination, upon the occurrence of any of the following events:

 

8.1

the physical or mental disability of the Employee, as defined below;

 

8.2

the material breach by the Employee of any material provision of this agreement,
which breach (if capable of being cured) is not cured within thirty (30) days of
notice of such breach;

 

8.3

a good faith determination by the Directors that the Employee has commenced
willful misconduct, failure to follow Company policy or a direct and legal
direction from management, or a material breach of generally accepted industry
standards that materially affects the Company or its public image, or
constitutes a material dereliction of duty. However, no act or failure to act on
the part of the Employee shall be considered "willful" unless it is done, or
omitted to be done, by the Employee in bad faith or without reasonable belief
that the Employee's act or omission was in the best interests of the Company.
 Any act, or failure to act, based upon express authority given pursuant to a
resolution duly adopted by the Directors with respect to such act or omission or
based upon the advice of counsel for the Company shall be conclusively presumed
to be done, or omitted to be done, by the Employee in good faith and in the best
interests of the Company; or

 

8.4

a determination by the Directors that the Employee should be discharged for any
other reason, with or without cause.

Upon termination of the Employee's employment under this Agreement, neither the
Company nor the Employee shall have any further duties or obligations hereunder
except that (I) the Employee shall continue to be bound in all respects by his
obligations concerning confidential information pursuant to paragraph 5 hereof,
(II) upon such termination (i) by reason of death or pursuant to subparagraphs
(a)-(c) of this paragraph 8, the Company shall pay the Employee's Base Salary
prorated through the date of termination and (ii) upon such termination by
reason of death or physical or mental disability of the Employee, the Company
shall pay the Employee's bonus, if any, for the twelve-month period in which
such termination occurs (calculated and payable in accordance with paragraph 7
hereof) prorated for the number of days in that year up to the date of death or
date of termination for physical and mental disability (all payments owing to
the Employee under the immediately preceding clauses (i) and (ii) of this
paragraph 8 shall, in the event of termination by death, be paid to the estate
of the Employee) and (iii) in the event that the Employee is terminated pursuant
to subparagraph (d) of this paragraph 8, the Employee shall continue to be bound
in all respects by his obligation under paragraph 9 hereof for a period of three
(3) years from the date of such termination and the Company shall, during the
remainder of the three year term specified in paragraph 2 hereof, continue to
pay the Employee's Base Salary pursuant to paragraph 6 hereof and provide the
Employee with the benefits and future bonuses provided for pursuant to paragraph
7 hereof so long as the Employee shall not be materially in breach of such
obligation.

 

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For purposes of this paragraph 8, the Employee shall be deemed to have suffered
a physical or mental disability if (x) he shall fail because of a perceived
mental or physical disability to perform the services required hereunder to the
reasonable satisfaction of the Directors for a period of three consecutive
months or for a period of six months during any twelve-month period or (y) if a
physician selected by the Company, after examining the Employee, shall determine
that the Employee has suffered a physical or mental disability that will prevent
him from performing the services required hereunder for a period of four
consecutive months or for a period of six months during a twelve-month period.
 The Employee may, at his own expense, select another physician to conduct a
further examination of the Employee.  In the event that the opinion of the
physician selected by the Employee differs from the opinion of the physician
selected by the Company, then such physicians shall mutually agree upon a third
physician whose opinion shall be binding upon the parties.  In the event that it
is finally determined, pursuant to the examination by such third physician, that
the Employee is not suffering such a physical or mental disability, the Employee
shall not be terminated pursuant to the immediately preceding clause (y) of this
paragraph 8.

In the event that the Employee receives or realizes any amounts in connection
with long-term disability insurance (the premiums for which were paid by the
Company, or any affiliates thereof), those amounts shall be deducted from any
Base Salary payable to the Employee for that period.  The Company agrees that it
shall not exercise its right to terminate this agreement as a result of the
Employee's disability so as to deprive the Employee of any benefits which would
otherwise become payable to the Employee under any disability insurance policy
or salary continuation plan then maintained by the Company.

9.

Termination Due to Change in Control .

 

9.1

Employee may terminate Employee's employment for any reason due to a Change in
Control (as herein defined) or during the eighteen-month period following a
Change in Control if the successor entity following a Change in Control (A)
causes any material change in the terms of Employee's employment as set forth in
this Agreement or (B) reassigns the Employee’s principal place of employment in
excess of 25 miles from the principal place of Employee’s employment.

 

9.2

For purposes of this Agreement "Change in Control"  shall mean:

 

(i)

any "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 ( the "Exchange Act")) becomes a "beneficial
owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act) (other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;
or

 

(ii)

the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation or other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or

 

(iii)

the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

 

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9.3

In the event of a termination due to a Change in Control, the Company shall pay
to the Employee, as severance pay, an amount equal to the Employee's Base Salary
at the current level at the time of termination for the remainder of the Term
(including any extension),  either (i) in a lump sum no later than fifteen (15)
days following termination, or (ii) in equal monthly installments, in the sole
discretion of the Employee.

10.

Non-Competition.

 

10.1

The Employee agrees that from and after the date hereof and ending on the third
anniversary of the termination date of the Employee's employment hereunder he
will not, directly or indirectly, engage in or be concerned with or interested
in, advise, lend money to, guarantee the debts or obligations of, or permit his
name or any part thereof to be used or employed by, any business (whether as a
proprietor, partner, joint venturer, employer, agent, employee, consultant,
officer, beneficial or record owner (other than as a passive investor owning
less than a 2% interest in a publicly held company)) which is competitive in any
respect with any of the businesses of the Company and its subsidiaries as
conducted as of the date the Employee's employment is terminated hereunder or
which is, directly or indirectly, engaged in the design, development,
production, marketing or distribution of products of the nature designed,
developed, produced marketed or distributed by the Company or any of its
subsidiaries as of the date of the Employee's employment is terminated
hereunder.  In the event that this agreement is assigned to any entity other
than a subsidiary of the Company, this non-competition clause shall refer to the
businesses of the Company and its subsidiaries and not those of the assignee as
of the date of any such assignment.

 

10.2

If any of the foregoing provisions relating to the duration, business or
geographic scope of this covenant shall be held to be more restrictive than
permitted by the law of the jurisdiction in which the Company seeks enforcement
thereof by the final determination of a court of competent jurisdiction, and all
appeals therefrom shall have failed or the time for such appeals shall have
expired, such provision, shall be limited to the extent permitted by law.

 

10.3

It is agreed that it would be impossible to fully compensate the Company for
damages for breach of the obligations of the Employee hereunder.  Accordingly,
the Employee and the Company specifically agree that the Company and any of its
affiliates or successors shall be entitled to temporary and permanent injunctive
relief to enforce such obligations and that such relief may be granted without
the necessity of proving actual damages.

11.

Governing Law.  This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Florida without regard to its choice
of law provisions.

12.

Indemnification.   To the fullest extent allowed by law, the Company shall
defend and indemnify the Employee for all acts committed while in the course and
scope of his position as a director, officer, employee or agent of the Company,
or any subsidiary of the Company, by reason of any action or inaction on the
part of the Employee while an officer or director or by reason of the fact that
the Employee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, limited
liability company, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement (if
such settlement is approved in advance by the Company, which approval shall not
be unreasonably withheld) actually and reasonably incurred by the Employee in
connection with such action, suit or proceeding if the Employee acted in good
faith and in a manner the Employee reasonably believed to be in or not opposed
to the best interests of the Company.

13.

Entire Agreement; Waiver .  This Agreement constitutes the entire Agreement
between the parties relating to the subject matter hereof and there are no terms
relating to the subject matter hereof other than those contained in this
agreement.  No variation hereof shall be deemed valid unless in writing and
signed by the parties hereto and no discharge of the terms hereof shall be
deemed valid unless by full performance by the parties hereto or by writing
signed by the parties hereto.  No waiver by

 

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either party of any provision or condition of the Agreement to be performed by
the Employee or it shall be deemed a waiver of similar or dissimilar provisions
or conditions at the time or any prior or subsequent time.

14.

Severability.  Each provision of this agreement is intended to be severable from
the others so that if any provision or term hereof is determined to be illegal
or invalid for any reason whatsoever, such illegality or invalidity shall not
affect the validity of the remaining provisions and terms hereof.

15.

Assignment.  This agreement may not be assigned without prior written consent of
the parties hereto, except that the Company may assign this agreement:  (i) to
any of the Company's divisions, subsidiaries or affiliates or (ii) upon the
Employee's prior consent, which consent shall not be unreasonably withheld, to
any assignee, licensee or purchaser of the Company.

16.

Notices.  Any notice or other communication given or rendered hereunder by
either party hereto shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, if to the Company, addressed to
the Company at 1212 N. Hercules Avenue, Clearwater, FL 33765, Attention:  David
A. Baldini or his designee, and if to the Employee, addressed to the Employee at
his residence address as set forth above.

17.

Captions.  The paragraph captions are inserted only as a matter of convenience
and reference and in no way define, limit or describe the scope of this
agreement or the intent of any provision hereof.

IN WITNESS WHEREOF , this Agreement has been executed by the parties hereto as
of the date first above written.

Employee:

/s/  David A. Baldini

Name: David A. Baldini

Company: Aerosonic Corporation

/s/  Gary E. Colbert

Name: Gary E. Colbert

Executive Vice President and Chief Financial Officer

 

 

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