EXHIBIT 10.20
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT dated as of September 18, 1996 between Firearms
Training Systems, Inc., a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxxx (the "Executive").
WHEREAS, the Company is the leading worldwide provider of small and
supporting arms training simulators;
WHEREAS, the Company desires to employ the Executive to serve as President
and Chief Executive Officer of the Company, upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive and the
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Executive hereby agrees to be employed by the Company upon the terms and subject
to the conditions contained in this Agreement. The initial term of employment
of the Executive by the Company pursuant to this Agreement shall commence on
October 15, 1996 and, unless earlier terminated pursuant to Section 4, shall end
on March 31, 2002 (such period referred to herein as the "Initial Term");
provided that the terms of this Agreement shall be automatically extended as of
each March 31, commencing March 31, 2002, for one additional year unless either
the Company or the Executive shall have terminated the automatic extension
provisions of this sentence by giving written notice to the other party at least
120 days prior to the then applicable termination date. (The Initial Term and
any extension of the Initial Term pursuant to this Section 1 shall be referred
to herein as the "Employment Period.")
2. POSITION AND DUTIES; RESPONSIBILITIES. (a) Position and Duties. The
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Company shall employ the Executive during the Employment Period as its chief
executive officer, with the title of President and Chief Executive Officer. The
Executive shall report to the Board of Directors of the Company (the "Board")
and not any other officer of the Company. During
the Employment Period, the Executive shall perform faithfully and loyally and to
the best of his abilities the duties assigned to him hereunder, and, except for
the consulting and directorship activities listed in the following sentence or
approved by the Board in accordance with this subsection, shall devote his full
business time, attention and effort to the affairs of the Company and its
subsidiaries and shall use his reasonable best efforts to promote the interests
of the Company and its subsidiaries. The Executive's positions as (1) a
director of Space Imaging, Inc., (2) a member of the Defense Science Board and
(3) a consultant to Raytheon E-Systems and Raytheon Company in accordance with a
noncompetition and consulting agreement between the Executive, Raytheon E-
Systems and Raytheon Company (the "Raytheon Agreement"), are hereby approved.
The Executive may engage in charitable, civic or community activities and, with
the prior approval of the Board, may serve as a director of any other business
corporation, provided that such activities or service do not interfere with his
duties hereunder or violate the terms of any of the covenants contained in
Sections 7, 8 or 9. The Executive's principal office for the performance of his
duties under this Agreement shall be located within the greater metropolitan
area of a city in the United States with a population in such greater
metropolitan area of at least one million (1,000,000).
(b) Responsibilities. Subject to the powers, authority and
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responsibilities vested in the Board and in duly constituted committees of the
Board, the Executive shall have the authority and responsibility for the
formulation and execution of the corporate policy of the Company. The Executive
shall also perform such other duties (not inconsistent with the position of
principal executive officer) on behalf of the Company and its subsidiaries as
may from time to time be authorized or directed by the Board.
3. COMPENSATION. (a) Base Salary. During the Employment Period, the
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Company shall pay to the Executive a base salary at the rate of $350,000 per
annum ("Base Salary"), payable in accordance with the Company's executive
payroll policy. Such Base Salary shall be reviewed annually, and shall be
subject to such annual increases, if any, as determined by the Compensation
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Committee of the Board. The Base Salary shall not be decreased during the
Employment Period.
(b) Annual Bonus. (1) The Executive shall be entitled as of the end of
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each fiscal year to receive an annual incentive bonus payable in cash for each
full fiscal year of the Company during the term of this Agreement, commencing
with the fiscal year ending on March 31, 1998, in accordance with the formula
set forth in this Section 3(b). The Executive shall also be entitled to receive
an incentive bonus for the fiscal year of the Company ending on March 31, 1997
in the amount determined under paragraph (2) below, multiplied by a fraction,
the numerator of which is the number of days of such fiscal year during which
the Executive is employed by the Company and the denominator of which is 365.
The formula set forth in this Section 3(b) shall not be changed, unless the
bonus based on such formula is replaced by a bonus or incentive arrangement with
substantially the same potential value and economic benefit to the Executive as
the bonus based on the formula set forth herein. The annual incentive bonus to
which the Executive is entitled pursuant to this Section 3(b) is referred to
herein as the "Annual Bonus." Nothing in this Section 3(b) or this Agreement
shall prohibit the Board from awarding the Executive an Annual Bonus in an
amount greater than the Annual Bonus calculated in accordance with this Section
3(b) if the Board determines, in its sole discretion, that a greater bonus is
appropriate.
(2) The amount of the Annual Bonus to which the Executive shall be
entitled shall be determined by multiplying the Maximum Bonus Amount by the
Bonus Factor.
(3) As used in this Section 3(b), the following terms have the meanings
set forth below:
(A) the "Bonus Factor" with respect to any fiscal year shall be determined
under clause (i) or (ii) of this subparagraph (A), as the case may be, provided
that the Bonus Factor shall in no event be less than zero and shall in no event
exceed one.
(i) if the EBITDA for such fiscal year is less than or equal to the EBITDA
Target for such
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year, the Bonus Factor for such year shall be equal to:
3.75 X ( (EBITDA/EBITDA Target) - 0.8 ).
(ii) if the EBITDA for such fiscal year is greater than the EBITDA Target
for such year, the Bonus Factor for such year shall be equal to:
(1.25 X ( (EBITDA/EBITDA Target) - 1.0 )) + 0.75.
(B) the term "EBITDA" shall have the same meaning assigned to such term in
the Recapitalization and Stock Purchase and Sale Agreement dated as of June 5,
1996 among Firearms Training Systems International N.V., the Company and Centre
Capital Investors II, L.P. and certain related entities.
(C) the term "EBITDA Target" shall mean,
(i) with respect to the fiscal year of the Company ending in 1997, an
amount equal to $32,086,000; and
(ii) with respect to any subsequent fiscal year, the amount of the
projected EBITDA of the Company set forth in the budget of the Company for such
fiscal year, as approved by the Board.
(D) for each fiscal year, the "Maximum Bonus Amount" shall be equal to
$225,000, or such greater amount determined by the Compensation Committee of the
Board, in its sole discretion.
(4) Notwithstanding anything contained herein to the contrary, the amount
of the Annual Bonus, or prorated Annual Bonus, as the case may be, payable
pursuant to this Section 3(b) shall be rounded up or down, as the case may be,
to the nearest multiple of $100.
(5) The payment of each Annual Bonus shall be made within 30 days after
the Company's independent accountants certify or otherwise issue an opinion
concerning the Company's
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consolidated financial statements for the fiscal year to which such Annual Bonus
relates.
(6) If the Company's fiscal year changes, the provisions of this Section
3(b) shall be changed in an equitable manner to insure that the Executive's
opportunity to earn the Annual Bonus is not materially and adversely affected.
(c) Signing Bonus. Within 10 business days of the date of this Agreement,
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the Company shall pay a bonus to the Executive in the amount of $155,000. In
the event that prior to the end of the 36-month period commencing on the date of
this Agreement either the Executive voluntarily terminates his employment with
the Company as described in Section 4(f), or the Company terminates the
employment of the Executive for Cause (as hereinafter defined) as described in
Section 4(c), the Executive shall, within 30 days following the date of such
termination of employment, repay to the Company an amount equal to $75,000
multiplied by a fraction, the numerator of which is the number of full months
remaining in such 36-month period, and the denominator of which is 36. Such
repayment obligation shall terminate on the earliest to occur of (a) the end of
such 36-month period, (b) termination of the Executive's employment by the
Company other than for Cause and (c) termination of employment with the Company
by the Executive for Good Reason (as defined below). For purposes of this
subsection, the employment of the Executive shall not be deemed to have been
terminated for Cause until the expiration of the 10-day period described in
Section 4(c) following the date on which the Cause Notice (as hereinafter
defined) is provided to the Executive and such notice is not rescinded in
accordance with such section.
(d) Stock Options. As of the date of this Agreement, the Executive shall
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be entitled to receive a grant of nonqualified stock options under the Firearms
Training Systems, Inc. Stock Option Plan (the "Stock Option Plan") as follows:
(1) The Executive shall be granted an option to purchase from the Company
213,000 shares of its Class A Common Stock, $0.00001 par value ("Common Stock"),
at the price of $5.40 per share, under the terms and conditions described in the
Stock Option Agreement Series A, to be entered into by the Executive and the
Company.
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(2) The Executive shall be granted an option to purchase from the Company
an additional 213,000 shares of Common Stock, at the price of $5.40 per share,
under the terms and conditions described in the Stock Option Agreement Series B,
to be entered into by the Executive and the Company; provided that,
notwithstanding Section 2.2(a)(iv) of such stock option agreement, the Committee
(as defined in the Firearms Training Systems, Inc. Stock Option Plan) may cause
the Executive's option to become exercisable with respect to some or all of the
shares subject to the option on the date of grant based on the Committee's
review of the performance of the Company and the Executive at the end of the
fiscal years ending in 1997, 1998 and 1999, respectively, relative to targets
and objectives established by the Committee at the beginning of each such fiscal
year.
(e) Stock Award. In consideration for compensation foregone, as of the
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date of this Agreement the Executive shall be awarded 22,200 shares of Common
Stock in accordance with the terms and subject to the conditions of the Stock
Award Agreement, to be entered into by the Executive and the Company.
(f) Relocation Expenses. The Company shall pay the Executive's reasonable
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expenses related to the relocation of his residence to the Atlanta metropolitan
area and the sale of his residence in the Dallas metropolitan area in accordance
with the Company's relocation policy applicable to the chief executive officer.
(g) Other Benefits. During the Employment Period, the Executive shall be
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entitled to participate, on terms at least as favorable as any other executive
of the Company, in the Company's employee benefit plans generally available to
senior executives of the Company, including group medical, dental, life,
accidental death and disability, short-term disability, long-term disability and
business travel accident plans and profit sharing retirement plan (all such
benefits being hereinafter referred to as the "Employee Benefits"). During the
Employment Period, the Executive shall be permitted first class air travel in
connection with the performance of his duties under this Agreement. The
Executive shall be entitled to take time off for vacation of up to four weeks
duration during any calendar year (prorated for a partial calendar year) or
illness in accordance with the
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Company's policy for senior executives and to receive all other fringe benefits
as are from time to time made generally available to senior executives of the
Company.
(h) Expense Reimbursement. During the Employment Period, the Company
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shall reimburse the Executive for all proper expenses incurred by him in the
performance of his duties hereunder in accordance with the Company's policies
and procedures. These expenses shall include reasonable dues and fees for
professional activities related to conducting his duties under this Agreement.
4. TERMINATION. (a) Death. Upon the death of the Executive, this
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Agreement shall automatically terminate and all rights of the Executive and his
heirs, executors and administrators to compensation and other benefits under
this Agreement shall cease, except for compensation which shall have accrued to
the date of death, including accrued Base Salary and prorated Annual Bonus.
(b) Disability. The Company may, at its option, terminate this Agreement
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upon written notice to the Executive if the Executive, because of physical or
mental incapacity or disability, fails to perform the essential functions of his
position with or without reasonable accommodation required of him hereunder for
a continuous period of 120 days or any 180 days out of any 12-month period.
Upon such termination, all obligations of the Company hereunder shall cease,
except for compensation which shall have accrued to the date of termination,
including accrued Base Salary and prorated Annual Bonus. In the event of any
dispute regarding the existence of the Executive's incapacity hereunder, the
matter shall be resolved by the determination of a physician qualified to
practice medicine in the state of the Executive's residence to be selected by
the Board. The Executive shall have the right to require a second opinion from
a physician qualified to practice medicine in the state of the Executive's
residence, as selected by the Executive. If the initial and second opinions are
inconsistent, the matter shall be resolved by a third opinion from a physician
qualified to practice medicine as selected by agreement between the Company and
the Executive. For purposes of this subsection, the Executive shall submit to
appropriate medical examinations.
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(c) Cause. (i) The Company may, at its option, terminate the Executive's
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employment under this Agreement for Cause (as hereinafter defined). Any such
termination for Cause shall be authorized by the Board. The Executive shall be
given written notice by the Company of the intention to terminate his employment
hereunder for Cause (the "Cause Notice"). The Cause Notice shall state the
particular action(s) or inaction(s) giving rise to termination for Cause. The
Executive shall have 10 days after the Cause Notice is given to cure the
particular action(s) or inaction(s), to the extent a cure is possible. If the
Executive so effects a cure to the satisfaction of the Board, the Cause Notice
shall be deemed rescinded and of no force or effect.
(ii) As used in this Agreement, the term "Cause" shall mean any one or
more of the following:
(A) the Executive's refusal to perform his duties under this Agreement or
to perform specific directives of the Board which are consistent with the scope
and nature of the Executive's duties and responsibilities as set forth herein;
(B) the Executive's intentional act of fraud, embezzlement or theft in
connection with his duties hereunder or in the course of his employment
hereunder or any prior employment, or the Executive's admission or conviction of
a felony or of any crime involving moral turpitude, fraud, embezzlement, theft
or misrepresentation;
(C) any gross negligence or willful misconduct of the Executive resulting
in a material loss to the Company or any of its subsidiaries, or significant
damage to the reputation of the Company or any of its subsidiaries;
(D) any breach by the Executive of any one or more of the covenants
contained in Section 7, 8 or 9 hereof resulting in a material adverse effect
upon the Company or any of its subsidiaries; or
(E) any significant violation of any statutory or common law duty of
loyalty to the Company or any of its subsidiaries.
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(iii) The exercise of the right of the Company to terminate this Agreement
pursuant to this Section 4(c) shall not abrogate the rights or remedies of the
Company or the Executive in respect of the breach giving rise to such
termination.
(iv) If the Company terminates the Executive's employment for Cause, he
shall be entitled to:
(A) accrued Base Salary through the date of the termination of his
employment;
(B) any Annual Bonus owing but not yet paid for any fiscal year ended on
or before the Executive's termination of employment for Cause;
(C) other Employee Benefits to which the Executive is entitled upon his
termination of employment with the Company, in accordance with the terms of the
plans and programs of the Company.
(v) Notwithstanding anything to the contrary contained in this Agreement,
if, following a termination of the Executive's employment for Cause, an
arbitrator appointed pursuant to Section 14, or a court of competent
jurisdiction in a final determination, determines that the Executive was not
guilty of the conduct that formed the basis for the termination, the Executive
shall be entitled, as damages for breach of this Agreement, to the payments and
the economic equivalent of the benefits he would have received had his
employment been terminated by the Company without Cause.
(d) Termination Without Cause. If, during the Employment Period, the
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Board terminates the employment of the Executive hereunder for any reason other
than a reason set forth in subsections (a), (b) or (c) of this Section 4:
(i) concurrent with such termination, the Executive shall be entitled to
receive the payments and benefits specified by Sections 4(c)(iv)(A) through
4(c)(iv)(C) hereof, inclusive; and
(ii) the Company shall continue to pay the Executive his Base Salary which
would otherwise be payable hereunder
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for the duration of (x) the Initial Term, if such termination occurs during the
Initial Term, or (y) any extended term (without further extension), if such
termination occurs during the term as extended pursuant to Section 1.
Notwithstanding clause (ii) of this subsection, the amounts payable to the
Executive under such clause shall be reduced by the amount of salary, bonus or
other compensation which the Executive receives from a subsequent employer. If
the Executive's employment with the Company terminates pursuant to this
subsection (d) prior to October 15, 1999, the Executive shall use reasonable
efforts to seek other employment for this purpose, provided that in no event
shall the Executive be required to accept a position of employment with another
employer of a substantially different character, or of substantially lesser
compensation and benefits, than the Executive's position with the Company as
contemplated in this Agreement, nor shall the Executive be required to accept a
position with another employer the principal office location of which is located
outside any greater metropolitan area of a city in the United States with a
population in such greater metropolitan area of at least one million
(1,000,000).
(e) Voluntary Termination for Good Reason. Upon 30 days prior written
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notice to the Company (or such shorter period as may be permitted by the Board),
the Executive may voluntarily terminate his employment with the Company prior to
the end of the Employment Period for Good Reason (as defined below). If the
Executive voluntarily terminates his employment pursuant to this subsection (e),
the Executive shall be entitled to receive the payments and benefits specified
by Section 4(d), payable in accordance with and subject to the conditions of
such Section. For purposes of this Agreement, "Good Reason" shall mean (i) the
assignment to the Executive of duties inconsistent with the position of Chief
Executive Officer of the Company or (ii) the assignment of the Executive to a
position of lesser dignity. Any dispute which may arise concerning whether a
voluntary termination of employment by the Executive is for Good Reason shall be
resolved by an arbitrator appointed pursuant to Section 14.
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(f) Other Voluntary Termination. Upon 60 days prior written notice to the
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Company (or such shorter period as may be permitted by the Board), the Executive
may voluntarily terminate his employment with the Company prior to the end of
the Employment Period for any reason other than for Good Reason. If the
Executive voluntarily terminates his employment pursuant to this subsection (f),
he shall be entitled to the payments specified by Sections 4(c)(iv)(A) through
4(c)(iv)(C) hereof, inclusive.
5. FEDERAL AND STATE WITHHOLDING. The Company shall deduct from the
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amounts payable to the Executive pursuant to this Agreement the amount of all
required federal, state and local withholding taxes in accordance with the
Executive's Form W-4 on file with the Company, and all applicable federal
employment taxes.
6. STOCK PURCHASE. Promptly following execution of this Agreement, the
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Executive shall purchase from the Company 37,000 shares of Common Stock, in
accordance with the terms and subject to the conditions of the Management Shares
Agreement, to be entered into by the Executive, the Company and certain other
parties to be named therein.
7. NONCOMPETITION; NONSOLICITATION. (a) The Executive acknowledges that
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in the course of his employment with the Company pursuant to this Agreement he
will become familiar with trade secrets and customer lists of, and other
confidential information concerning, the Company and its subsidiaries and that
his services will be of special, unique and extraordinary value to the Company
and its subsidiaries.
(b) The Executive agrees that during the period of his employment with the
Company, the period, if any, during which the Executive is receiving payments
from the Company pursuant to Section 4, and for a period of two years thereafter
(the "Noncompetition Period") he shall not in any manner, directly or
indirectly, through any person, firm or corporation, alone or as a member of a
partnership or as an officer, director, stockholder, investor or employee of or
consultant to any other corporation or enterprise or otherwise, engage or be
engaged, or assist any other person, firm, corporation or enterprise in
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engaging or being engaged, in any business, in which the Executive was involved
or had knowledge, being conducted by, or contemplated by, the Company or any of
its subsidiaries as of the termination of the Executive's employment in any
geographic area in which the Company or any of its subsidiaries is then
conducting such business.
(c) The Executive further agrees that during the Noncompetition Period he
shall not (i) in any manner, directly or indirectly, induce or attempt to induce
any employee of the Company or any of its subsidiaries to terminate or abandon
his or her employment for any purpose whatsoever, or (ii) in connection with any
business to which Section 7(b) applies, call on, service, solicit or otherwise
do business with any customer of the Company or any of its subsidiaries.
(d) Nothing in this Section 7 shall prohibit the Executive from being (i)
a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than two percent of the outstanding stock of any class
of a corporation, any securities of which are publicly traded, so long as the
Executive has no active participation in the business of such corporation.
(e) If, at any time of enforcement of this Section 7, a court or an
arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court or
arbitrator shall be allowed to revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law. This Agreement shall not
authorize a court or arbitrator to increase or broaden any of the restrictions
in this Section.
8. CONFIDENTIALITY. The Executive shall not, at any time during the
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Employment Period or thereafter, make use of or disclose, directly or
indirectly, any (i) trade secret or other confidential or secret information of
the Company or of any of its subsidiaries or (ii) other technical, business,
proprietary or financial information of the Company or of any of its
subsidiaries not available to the public generally or to the competitors of the
Company or to the competitors of any of its
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subsidiaries ("Confidential Information"), except to the extent that such
Confidential Information (a) becomes a matter of public record or is published
in a newspaper, magazine or other periodical available to the general public,
other than as a result of any act or omission of the Executive, (b) is required
to be disclosed by any law, regulation or order of any court or regulatory
commission, department or agency or (c) is necessary to perform properly the
Executive's duties under this Agreement. Promptly following the termination of
the Employment Period, the Executive shall surrender to the Company all records,
memoranda, notes, plans, reports, computer tapes and software and other
documents and data which constitute Confidential Information which he may then
possess or have under his control (together with all copies thereof); provided,
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however, that the Executive may retain copies of such documents as are necessary
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for the preparation of his federal or state income tax returns.
9. INVENTIONS. The Executive hereby assigns to the Company his entire
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right, title and interest in and to all discoveries and improvements, patentable
or otherwise, trade secrets and ideas, writings and copyrightable material,
which may be conceived by the Executive or developed or acquired by him during
the Employment Period, which may pertain directly or indirectly to the business
of the Company or any of its subsidiaries. The Executive agrees to disclose
fully all such developments to the Company upon its request, which disclosure
shall be made in writing promptly following any such request. The Executive
shall, upon the Company's request, execute, acknowledge and deliver to the
Company all instruments and do all other acts which are necessary or desirable
to enable the Company or any of its subsidiaries to file and prosecute
applications for, and to acquire, maintain and enforce, all patents, trademarks
and copyrights in all countries.
10. ENFORCEMENT. The parties hereto agree that the Company and its
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subsidiaries would be damaged irreparably in the event that any provision of
Section 7, 8 or 9 of this Agreement were not performed in accordance with its
terms or were otherwise breached and that money damages would be an inadequate
remedy for any such nonperformance or breach. Accordingly, the Company and its
successors or permitted assigns shall be entitled, in addition to other rights
and remedies existing in their favor, to an injunction or injunctions to prevent
any breach or threatened
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breach of any of such provisions and to enforce such provisions specifically
(without posting a bond or other security). Each of the parties agrees that he
or it will submit himself or itself to the personal jurisdiction of the courts
of the State of New York in any action by the other party to enforce an
arbitration award against him or it or to obtain interim injunctive or other
relief pending an arbitration decision.
11. EXECUTIVE REPRESENTATIONS. The Executive represents and warrants to
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the Company that (i) the execution, delivery and performance of this Agreement
by the Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Executive is a party or by which he is bound, (ii) the Executive is
not a party to or bound by any employment agreement, noncompetition agreement or
confidentiality agreement with any other person or entity, other than the
Raytheon Agreement, and (iii) upon the execution and delivery of this Agreement
by the Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
12. COMPANY REPRESENTATIONS. The Company represents and warrants to the
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Executive that (i) the execution, delivery and performance of this Agreement by
the Company does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Company is a party or by which the Company is bound, and (ii) upon the
execution and delivery of this Agreement by the Executive, this Agreement shall
be the valid and binding obligation of the Company, enforceable in accordance
with its terms, except to the extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
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13. SURVIVAL. Sections 7, 8 and 9 of this Agreement shall survive and
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continue in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Employment Period.
14. ARBITRATION. Any dispute or controversy between the Company and the
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Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration in New York, New
York administered by the American Arbitration Association, with any such dispute
or controversy arising under this Agreement being so administered in accordance
with its Commercial Rules then in effect, and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of the
Company and the Executive. The Company and the Executive acknowledge that this
Agreement evidences a transaction involving interstate commerce. Notwithstanding
any choice of law provision included in this Agreement, the United States
Federal Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision.
15. REIMBURSEMENT OF LEGAL EXPENSES. If any contest or dispute shall
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arise involving the Executive's employment with the Company, including any
contest or dispute (i) under this Agreement, (ii) involving termination of the
Executive's employment with the Company or (iii) involving the failure or
refusal of the Company to perform fully in accordance with the terms hereof, the
Company shall reimburse the Executive, on a current basis, for all legal fees
and expenses (including expert witness fees and the Executive's and such
witnesses' reasonable travel expenses incurred in connection with pursuing or
defending
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such contest or dispute), if any, incurred by the Executive in connection with
such contest or dispute; provided, however, that in the event the final judgment
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or arbitral resolution of any such contest or dispute includes a final,
nonappealable finding denying, in whole or in part, the Executive's claims in
such contest or dispute, the Executive shall be required to reimburse the
Company, over a period not to exceed 12 months from the date of such resolution
or settlement, for that portion of the sums advanced to the Executive pursuant
to this Section 15 which relate, to the extent reasonably ascertainable,
primarily to the Executive's claims so denied.
16. NOTICES. All notices and other communications required or permitted
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hereunder shall be in writing and shall be deemed given when (a) delivered
personally or by overnight courier to the following addresses of the other party
hereto and his or its counsel (or such other address for such party or his or
its counsel as shall be specified by notice given pursuant to this Section) or
(b) sent by facsimile to the following facsimile numbers of the other party
hereto and his or its counsel (or such other facsimile number for such party or
his or its counsel as shall be specified by notice given pursuant to this
Section), with the confirmatory copy delivered by overnight courier to the
addresses of such party and his or its counsel pursuant to this Section:
(a) if to the Company, to:
Firearms Training Systems, Inc.
Attention: Corporate Secretary
0000 XxXxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
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with copies to:
Xx. Xxxx Xxxx
Centre Partners Management LLC
00 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
and
Xxxxx X. Xxxxxx, Esq.
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
(b) if to the Executive, to:
Xx. Xxxxx X. Xxxxxx
(at his most recent home address and/or
facsimile number on file with the Company)
with a copy to:
R. Xxxxxxx Xxxxxx, Esq.
Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
17. SEVERABILITY. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
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18. ENTIRE AGREEMENT. This Agreement, and the agreements referenced
----------------
herein, constitute the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related in any manner to the subject matter hereof.
19. SUCCESSORS AND ASSIGNS. This Agreement shall be enforceable by the
----------------------
Executive and his heirs, executors, administrators and legal representatives,
and by the Company and its successors and assigns. Any successor of the Company
shall assume the liabilities of the Company hereunder.
20. GOVERNING LAW. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the internal laws of the State of New York without
regard to principles of conflict of laws.
21. AMENDMENT AND WAIVER. The provisions of this Agreement may be amended
--------------------
or waived only by the written agreement of the Company and the Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
22. COUNTERPARTS. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
FIREARMS TRAINING SYSTEMS, INC.
By:/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxxx X. Xxxxx
-----------------------------------------
Chairman of
Title: the Board Secretary
--------------------------------------
/s/ Xxxxx X. Xxxxxx
-------------------------------------
Xxxxx X. Xxxxxx
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