Document:

EXHIBIT
10.6

     

    RETENTION
AGREEMENT

     

    This RETENTION AGREEMENT (this “Agreement”) is made
and entered into as of the 13th day of December, 2010, by and between AEROSONIC CORPORATION, a
Delaware corporation (the “Company”), and SCOTT R. KEMPSHALL (the “Executive”), and
provides as follows:

     

    RECITALS

     

    WHEREAS,
Executive must be free to make decisions in the best interest of the Company’s
shareholders without being concerned about the immediate impact to Executive’s
job security or compensation;

     

    WHEREAS,
the Company desires to offer Executive assurances that Executive will be paid
severance compensation upon the occurrence of certain events in connection with
a Change of Control as defined herein.

     

    TERMS OF
AGREEMENT

     

    NOW,
THEREFORE, for and in consideration of the premises and of the mutual promises
and undertakings of the parties as hereinafter set forth, the parties covenant
and agree as follows:

     

    1.           Definitions.  As
used in this Agreement, the following terms shall be defined as set forth
below:

     

    “Base Salary” means
the annualized, base salary payable to Executive by the Company as of any
particular date, and excludes all other cash and non-cash compensation paid or
payable to Executive.

     

    “Cause” means
termination of Executive’s employment for Executive’s personal dishonesty,
willful misconduct, breach of a fiduciary duty involving personal profit,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses), conviction of a felony or of a misdemeanor involving moral
turpitude, misappropriation of the Company’s assets, or a material breach of any
other provision of this Agreement or an Employment Agreement.

     

    “Change of Control”
means the occurrence of any one of the following events:

     

    (i)           any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (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.

     

    “Employment Agreement”
means any employment agreement by and between the Executive and the Company that
may be made and entered into after the date of this Agreement, including any
amendments thereto (as Executive currently does not have an employment agreement
with the Company).

     

    “Triggering Event”
means the occurrence of any one of the following events:

     

    (i)       
    the Company terminates Executive’s employment with the
Company without “Cause” as such term is defined herein; or

     

    (ii)           Executive
terminates his employment because the Company has materially reduced Executive’s
Base Salary or the amount of bonus for which Executive is eligible from the
levels in place at the time of the Change of Control; or

     

    (iii)          Executive
terminates his employment because the Company has reduced Executive’s title,
duties, authority or reporting relationships so as to materially reduce
Executive’s overall job responsibilities from the levels in place at the time of
the Change of Control;

     

    provided that, none
of the events described in clauses (ii) and (iii) above shall constitute a
Triggering Event unless and until the Executive first notifies the Company in
writing describing the event(s) which constitute(s) the Triggering Event(s)
within 90 days after the occurrence of such event(s) and the Company fails to
cure such event(s) within 30 days after the Company’s receipt of such written
notice.

     

    2.           Severance
Compensation.

     

    (a)           If
a Triggering Event occurs within eighteen (18) months following a Change of
Control, the Company shall pay to Executive each of the following as “Severance
Compensation”:

     

    (i)           An
amount equal to 110% of Executive’s Base Salary in place at the time of the
Triggering Event, payable as specified below; and

    
      
         

      

      
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    (ii)           An
amount equal to the average of Executive’s bonuses paid over the previous two
fiscal years from the Triggering Event, payable as specified below.

     

    (b)           Payment
of the Severance Compensation is contingent upon: (i) Executive’s executing and
delivering to the Company a release in favor of the Company in a form
satisfactory to the Company and its counsel, which generally and unconditionally
releases from all claims the Company and its directors, officers, employees,
insurers, and other affiliates (the “General Release”) and
the General Release becoming effective without timely revocation; and (ii)
Executive’s satisfactorily performing his obligations under this Agreement as
well as any restrictive covenants, including but not limited to,
confidentiality, non-disclosure, non-solicitation, and non-competition, that may
be made and entered into by and between the Executive and the Company after the
date of this Agreement, whether contained in an Employment Agreement or
otherwise (the “Restrictive
Covenants”).  Specifically, if Executive has not satisfactorily
performed all of his obligations under this Agreement or the foregoing
Restrictive Covenants, then Executive will not be entitled to any Severance
Compensation and the Company shall not pay the Severance Compensation; or, if
such Severance Compensation has already been paid, Executive shall be required
to reimburse the Company in the full amounts paid.  Further, if the
Executive has not executed and delivered the General Release by the date that is
sixty (60) days after the Triggering Event (the “Required Release
Date”), the Executive shall forfeit all rights to receive the Severance
Compensation.

     

    (c)           Subject
to Section 13, the Severance Compensation shall be paid in equal monthly
installments over a period of twelve (12) months on Employer’s regular
payroll dates in effect on the date of termination, commencing with the first
payroll date following the date on which the General Release is executed and
delivered and the expiration of all revocation periods in the General Release
(the “Release
Effective Date”); provided that, if the
date of the Triggering Event and the Required Release Date are in different
calendar years, payment shall commence on the first payroll date of the second
year (regardless of when the Release Effective Date occurs).

     

    (d)           All
Severance Compensation payments are subject to the usual taxes, payroll
deductions and withholdings and shall be mailed to Executive’s last known
residential address.  It is Executive’s obligation to keep the Company
informed as to any changes to such address.

     

    (e)           Executive
shall not be entitled to any other salary, bonuses, employee benefits or other
compensation after termination of his employment for reason other than a
Triggering Event, except as otherwise specifically provided for under an
Employment Agreement, the Company’s employee benefit plans or as otherwise
expressly required by applicable law.

     

    3.           Employment
Status.  This Agreement does not constitute an employment
agreement between the Company and Executive, but rather provides for the payment
of severance compensation to Executive on the termination of his employment with
the Company under the conditions described in this Agreement.  This
Agreement does not guarantee the continued employment of Executive by the
Company or the payment of any other amount of compensation.

    
      
         

      

      
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    4.           Governing
Law.  This Retention Agreement shall be subject to and
construed in accordance with the laws of the State of Florida, without giving
effect to its principles of conflict of laws.

     

    5.           Venue.  Executive
agrees that, at the option of the Company, any action brought to enforce or to
test the enforceability of any provision of this Agreement, may be brought in
either the United States District Court for the Middle District of Florida or
the Circuit Court of Pinellas County, Florida.

     

    6.           Assignability.  This
Agreement shall be binding upon and inure to the benefit of the Company, and may
be assigned by the Company to any person or firm who may succeed to the majority
of the assets of the Company.  This Agreement shall not be assignable
by Executive.

     

    7.           Notices.  Any
and all notices, designations, consents, offers, acceptance or any other
communications provided for herein shall be given in writing and shall be deemed
properly delivered if delivered in person or by registered or certified mail,
return receipt requested, addressed in the case of the Company to its registered
agent or in the case of Executive to his last known address.

     

    8.           Entire
Agreement.

     

    (a)           This
Agreement constitutes the entire agreement among the parties with respect to the
payment of severance compensation upon the occurrence of certain events in
connection with a change of control as defined herein and supersedes any and all
other agreements, either oral or in writing, among the parties hereto with
respect to the subject matter hereof.

     

    (b)           This
Agreement is not intended to supersede, terminate, alter, or modify any
provision in Executive’s Employment Agreement; provided however that this
Agreement is intended to be mutually exclusive of the severance payment
provisions found in any such Employment Agreement such that: (i) if Executive
receives Severance Compensation under this Agreement, he shall not be entitled
to receive any severance payments under any such Employment Agreement; and (ii)
if Executive receives any severance payments under any such Employment
Agreement, he shall not be entitled to receive any Severance Compensation under
this Agreement.

     

    (c)           This
Agreement may be executed in one or more counterparts, each of which shall be
considered and original copy of this Agreement, but all of which together shall
evidence only one agreement.

     

    9.           Amendment
and Waiver.  This Agreement may not be amended except by an
instrument in writing signed by or on behalf of each of the parties
hereto.  No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person or party to be
charged.

    
      
         

      

      
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    10.           Case and
Gender.  Wherever required by the context of this Agreement,
the singular or plural case and the masculine, feminine and neuter genders shall
be interchangeable.

     

    11.           Captions.  The
captions used in this Retention Agreement are intended for descriptive and
reference purposes only and are not intended to affect the meaning of any
Section hereunder.

     

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

     

    13.           Delay of
Payment.  Notwithstanding any other provision of this
Agreement, if Executive is a “specified employee” within the meaning of Section
409A of the Code, to the extent necessary to comply with Section 409A of the
Code, no payments (which are not otherwise exempt) may be made hereunder before
the date which is six months after Executive’s separation from service or, if
earlier, his death.  Any amounts which would have otherwise been
required to be paid during such six months or, if earlier, until Executive’s
death, shall be paid to Executive in one lump sum cash payment on the first
payroll date after the date which is six months after Executive’s separation
from service or, if earlier, after Executive’s death.  Any other
payments scheduled to be made under this Agreement shall be made and provided at
the times otherwise designated in this Agreement disregarding the delay of
payment for the payments described in this Section
13.  Additionally, notwithstanding any other provision of this
Agreement, Executive will only be entitled to receive payment on termination of
his employment when the termination of employment qualifies as a “separation
from service” within the meaning of Section 409A of the Code.  Each
installment under this Agreement shall be regarded as a separate “payment” for
purposes of Section 409A.

     

    (signature
page follows)

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Company has caused this Retention Agreement to be signed by
its duly authorized officer and Executive has hereunto set his hand and seal on
the day and year first above written.

     

    
      
        
          
            
              	
                      AEROSONIC
      CORPORATION

                    
	 
	
                      By:

                    	
                      /s/ Douglas J. Hillman

                    
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                      EXECUTIVE

                    
	 
      	 
      
	
                      /s/ Scott K. Kempshall

                    
	
                      SCOTT
      K.
KEMPSHALL

                    

            

          

        

      

    

    
      
         

      

      
        6EXHIBIT
10.7

    AEROSONIC
CORPORATION

    AMENDMENT TO EMPLOYMENT
AGREEMENT

    

    This
AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made
and entered into as of the 13th day December, 2010, by and between AEROSONIC CORPORATION, a
Delaware corporation (the “Company”) and DOUGLAS J. HILLMAN (the “Executive”), and
provides as follows:

    

    RECITALS

    

    WHEREAS,
the Company and Executive are parties to an Employment Agreement made and
entered as of the 17th day of April, 2008 (the “Employment
Agreement”), which sets forth the terms and conditions of Executive’s
employment with the Company; and

    

    WHEREAS,
the parties desire to amend the Employment Agreement as provided
herein.

    

    TERMS OF
AGREEMENT

    

    NOW,
THEREFORE, for and in consideration of the premises and of the mutual promises
and undertakings of the parties as hereinafter set forth, the parties covenant
and agree as follows:

    

    1.           Capitalized Terms.
All capitalized terms that are used but not expressly defined in this Amendment
have the respective meanings ascribed to them in the Employment
Agreement.

     

    2.           Amendment. Section
10(g) of the Employment Agreement is hereby deleted and completely replaced with
the following:

     

    (g)           In
addition to the compensation (including salary and vested bonus, if any) accrued
as of the date of this termination, Executive is entitled to severance pay of
six (6) month’s salary if Executive is terminated by the
Company.  Executive is not entitled to any severance if the
termination is due to “Cause” as defined in Section 10(e).  Payment of
severance will be made in substantially equal installments according to the
Company’s normal payroll practices as consistent with the payment of Executive
compensation pursuant to Section 4(a).

     

    3.           Entire Agreement;
Inconsistency; Ratification; Execution.  This Amendment records
the final, complete, and exclusive understanding among the parties regarding the
amendment of the Employment Agreement. In the event of a conflict or
inconsistency between the provisions of this Amendment and the Employment
Agreement, the provisions of this Amendment shall control and govern. As amended
by this Amendment, the Employment Agreement is ratified and remains in full
force and effect in accordance with its terms. This Amendment may be executed in
multiple counterparts. A party’s receipt of a facsimile signature page or
portable document format (PDF) copy of a signature page to this Amendment shall
be treated as the party’s receipt of an original signature
page.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Amendment to Employment Agreement
to be signed by its duly authorized officer and Executive has hereunto set his
hand and seal on the day and year first above written.

     

    
      
        
          	 
      	
                  AEROSONIC
      CORPORATION

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/
      Donald Russell

                
	 
      	
                  Name:

                	
                   Donald Russell

                
	 
      	
                  Title:

                	
                  Director, Chair of the Compensation
      Committee

                
	 
      	 
      	 
      
	 
      	
                  EXECUTIVE

                
	 
      	 
      	 
      
	 
      	
                  /s/
      Douglas J. Hillman

                
	 
      	
                  DOUGLAS
      J. HILLMAN

                

        

      

    

     

    
      
         

      

      
        2

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