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Exhibit 10.44
SIMULA, INC.
CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
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Name of Employee (herein "Employee"): Xxx Xxxxxxx
Position: Executive Vice President-Technology
Date: February 1, 2000
Termination Date: [Termination of Employment]
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THIS AGREEMENT is entered into between Simula, Inc. and its controlled
affiliates ("Company" or "Employer"), and Employee for the following purposes
and upon the following conditions:
1. PURPOSE. In order to attract and retain key employees, the Company
believes it is necessary to provide for the fulfillment of the expectation of
long-term employment with the Company (i) by providing a financial benefit to
Employee in the case of employment termination after a Change of Control of the
Company, and to (ii) protect against employees' distraction or departure, to the
detriment of the Company, in the event of a proposed or pending Change of
Control transaction.
2. TERM. This Agreement shall be effective as of the date stated above
and shall terminate concurrently with the Employee's termination from employment
with the Company. This Agreement creates no obligation on behalf of the Company
other than as specified herein. In the event Employee terminates voluntarily or
involuntarily from the Company under any circumstances other than a Change of
Control, this Agreement shall confer no rights upon Employee.
3. CHANGE OF CONTROL. For purposes of this Agreement "Change of
Control" shall be deemed to have occurred when any of the following events
occur:
(i) the direct or indirect acquisition by any person or
related group of persons (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company) of
beneficial ownership (within the meaning of Rule 13-d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing
in excess
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of 20% of the total combined voting power of the Company's outstanding
securities pursuant to a tender or exchange offer made directly to the
Company's stockholders or other transaction; or
(ii) a change in the composition of the Board of Directors
over a period of 36 consecutive months or less, such that a majority of
the Board members (rounded up to the next whole numbers) ceases, by
reason of one or more contested elections for Board membership, to be
comprised of individuals who either (A) have been Board members
continuously since the beginning of such period, or (B) have been
elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was
approved by the Board; or
(iii) a merger or consolidation approved by the stockholders
of the Company, 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) at
least 80% of the total voting power represented by voting securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation; or
(iv) The sale, transfer, or other disposition (in one
transaction or a series of transactions) of all or substantially all of
the assets of the Company approved by the stockholders or the complete
liquidation or dissolution of the Company approved by the stockholders.
4. COMPENSATION. Severance compensation ("Compensation") will be paid
to Employee in the event of a Change of Control where:
(i) Employee is terminated by the acquiring person or
surviving entity within one year of the effective date of the Change of
Control; or
(ii) Employee voluntarily resigns from his position within a
period of 180 days after the effective date of the Change of Control.
Compensation shall be calculated and paid as follows:
(iii) Employee's then current annual base salary, plus the
equivalent dollar value for one year of all benefits (including
insurance, defined benefit plan contributions by the Company in
qualified and unqualified plans, and similar benefits) multiplied by
four (4);
(iv) the dollar amount necessary for payment of all taxes on
such Compensation including, without limitation, all employment taxes,
income taxes and alternative minimum income taxes, if any, payable with
respect to a lump sum payment
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in that year, grossed up by an amount necessary to pay all such taxes
on the amounts paid under this subparagraph (ii), and as further
provided in Section 7; and
(iii) the Compensation shall be paid in a lump sum within ten
(10) days of the termination of employment.
5. STOCK OPTIONS. In the event of a Change of Control, in addition to
the Compensation set forth above:
(i) all unexercised stock purchase options in the name of
Employee on the effective date of the Change of Control shall be
subject to accelerated vesting and shall thereupon be deemed fully
exercisable and shall be exercised and paid for by the Employer,
acquiring person, or surviving entity, on behalf of Employee and the
total number of shares of Common Stock represented by the total number
of options shall be fully paid, nonassessable, and validly issued to
Employee, without payment of monetary consideration by Employee.
Alternatively, the optionee may elect in lieu of the receipt of shares,
to relinquish his options with respect to all or any of such shares and
receive a payment equal to the price paid for common share in such
merger, tender offer, or similar transaction multiplied by the number
of common shares the optionee could have purchased with the options;
(ii) in connection with Employee's receipt of the foregoing
option shares or consideration, Employer will pay full tax assistance
to keep Employee whole due to this immediate income, including payment
of all relevant employment taxes, income taxes, capital gains taxes,
and alternative minimum income taxes, grossed up by an amount necessary
to pay all such taxes on the amounts paid under this subparagraph (ii),
and as further provided in Section 7; and
(iii) in the event of a Change of Control of the Company by
the exchange of securities or issuance of stock in a merger or
otherwise, Employer and the acquiring person or surviving entity shall
extend to Employee the opportunity to sell or exchange the option
shares issued under provisions (i) and (ii) in a manner and at a time
that will allow Employee to benefit, at his election, from the exchange
or issuance of stock in the merger, exchange, or other transaction.
6. CONDITION. Notwithstanding any other provision in this Agreement, or
unless the operation of this paragraph shall expressly and voluntarily be waived
or modified by the Employee in a written instrument signed by the Employee
specifically for that purpose, the remuneration under Sections 4 and 5 required
to be paid by Employer to Employee under this Agreement shall be paid by the
Employer or by the acquiring person or surviving entity as a condition to the
acquisition, merger, exchange, or other transaction.
7. EXCISE TAXES. The Internal Revenue Code of 1986, as amended (the
"Code), will impose significant tax on Employee and the Company if the total
amounts received by the Employee due to a Change of Control exceed prescribed
limits. This includes a 20% excise tax on certain amounts received in excess of
the prescribed limits and a loss of deduction for the
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Company. If, as a result of these Code provisions, the Employee is required to
pay such excise tax, then upon written notice from the Employee to the Company,
the Company shall pay the Employee an amount equal to the total excise tax
imposed on the Employee (including the excise taxes on any excise tax
reimbursements due pursuant to this sentence and the excise taxes on any income
tax reimbursements due pursuant to the next sentence). If the Company is
obligated to pay taxes for the Employee pursuant to the preceding sections, the
Company also shall pay the Employee an amount equal to the "total presumed
federal and state taxes" that could be imposed on the Employee with respect to
the excise tax reimbursements due to the Employee pursuant to the preceding
sentence and the income tax reimbursements due to the Employee pursuant to this
sentence. For purposes of the preceding sentence, the "total presumed federal
and state taxes" that could be imposed on the Employee shall be conclusively
calculated using a combined tax rate equal to the sum of the then prevailing
maximum marginal federal and state income tax rates. No adjustments will be made
in this combined rate for the deduction of state taxes on the federal return,
the loss of itemized deductions or exemptions, or for any other purpose. The
Employee shall be responsible for paying the actual taxes. The amounts payable
to the Employee pursuant to this or any other agreement or arrangement with
Company shall not be limited in any way by the amount that may be paid pursuant
to the Code without the imposition of an excise tax or the loss of Company
deductions.
8. EFFECT ON OTHER AGREEMENTS. This Change of Control Agreement shall
be supplemental to and will modify a written employment contract between
Employer and Employee, if any. Except as otherwise provided by written contract,
Employee shall remain "at will," and this Change of Control Agreement shall not
confer upon Employee any contractual rights to employment, except as described
in an employment agreement, if any, and as provided in this Change of Control
Agreement. To the extent of any inconsistency between this Agreement and any
other agreements with the employee, the Agreement shall be interpreted and
applied in the way to confer upon Employee the greatest benefit. The agreements
shall be read and applied consistent with each other, but in the event of a
conflict, the terms most favorable to the Employee will be applied from the
various provisions of the agreements in the aggregate.
9. RETURN OF BOOKS AND PAPERS. Upon the termination of Employee's
employment with Employer for any reason, Employee shall deliver promptly to
Employer all manuals and memoranda; all cost, pricing and other financial data;
all customer information; all other written or printed materials which are the
property of the Company (and any copies of them); and all other materials which
may contain confidential information relating to the business of Employer, which
Employee may then have in his possession whether prepared by Employee or not.
10. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered mail to
his residence in the case of Employee, or to its principal office in the case of
Employer.
11. WAIVER OF BREACH. The waiver of Employer of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.
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12. ASSIGNMENT. The rights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. Employee may not sell, assign, transfer, or delegate
any duties, rights or interests created under this Agreement without the express
written consent of the Employer.
13. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
the 1st day of February, 2000.
SIMULA, INC.
By
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"EMPLOYER"
/s/ Xxx Xxxxxxx
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Xxx Xxxxxxx "EMPLOYEE"
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