Exhibit 10.16
Key Employee Retention Agreement
The purpose of this Agreement (the "Agreement") between
Integrated Defense Technologies, Inc. (the "Company") and
Xxxx X. Xxxxxx (the "Employee") is to provide for continuity
of management and integration of the business operations of
the Company during the period leading up to as well as after
the date of the proposed sale, merger, consolidation or
other business combination resulting in a change of control
of the Company involving all or a substantial amount of the
business, securities or assets of the Company on terms and
conditions in the best interests of the Company (the
"Sale").
1. Term of Agreement
This Agreement will be in effect upon the execution of
this Agreement by the Company and the Employee and
through the date corresponding to the six month
anniversary of the closing of the Sale (the "Closing
Date"), unless terminated earlier in accordance with
Paragraphs 6 or 7.
2. Criteria for Incentive Payment
The Employee will be eligible for the incentive payment
specified in Paragraph 3 (the "Incentive") under this
Agreement if:
o The Employee remains employed at the Company through
the Closing Date and at the Company or its successor
for the six-month period immediately following the
Closing Date;
o The Employee devotes best effort and diligence to
the on-going business affairs of the Company, the
successful completion of the Sale, and the
integration of the Company into the organization of
the party which completes a Sale (the "Purchaser");
and
o The Employee otherwise meets all other conditions in
this Agreement, including without limitation, the
provisions of Paragraph 12.
3. Amount of Incentive Payment
The Incentive payable under this Agreement is an amount
equal to $200,000.
4. Payment of Incentive
The Incentive payable under this Agreement shall be
paid within the 30-day period immediately following the
six month anniversary date of the Closing Date, or
within 30 days of an event which makes the Employee
eligible for a payment under Paragraph 5. When paid,
the Incentive will be subject to normal and required
deductions and withholdings. The Incentive will not
qualify as earnings under any pension plan or for any
other employee benefit purpose.
5. Layoff, Disability, Resignation for Good Reason, or Death
If, after the Closing Date and within the term of this
Agreement, the Employee is laid off by the Purchaser,
becomes disabled, voluntarily resigns for good reason,
or dies, the Employee will be eligible for the
Incentive payment under this Agreement. For a layoff
after the Closing Date, payment of the Incentive will
be made in addition to any severance payments otherwise
due the Employee under the Purchaser's severance plan,
if any. "Good reason" shall only mean: During the six-
month period beginning on the Closing Date, (i) a
reduction in the Employee's base salary or (ii) a
material diminution of the Employee's responsibilities
as a result of removal from, or changes in, the
position held by the Employee immediately prior to the
Sale, other than such changes as job title, reporting
relationship, or employees supervised which result
solely by virtue of the Sale.
6. Retirement, Resignation or Termination for Cause
If the Employee retires, resigns for other than good
reason, or is discharged for cause during the term of
this Agreement, the Employee will not be eligible for
any payment of the Incentive under this Agreement and
this Agreement will terminate immediately.
7. Termination of Agreement
This Agreement will terminate and the Employee will
have no right to payment of the Incentive under this
Agreement if the Closing Date has not occurred by
December 31, 2003.
8. No Contract of Employment
Nothing is this Agreement may be construed as an
expressed or implied contract of employment for any
duration, and this Agreement does not limit the ability
of either the Employee or the Company to terminate the
employment relationship at will.
9. No Assignment
No Incentive payable under this Agreement may be
assigned, transferred, pledged, or otherwise
encumbered, or subject to any legal process for the
payment of any claim against the Employee.
10. Entire Agreement
This Agreement represents the complete understanding of
the parties with respect to the subject matter hereof
and no other promises or agreements shall be binding or
modify this Agreement unless in writing and signed by
both parties.
11. Governing Law
This Agreement shall be governed in all respects by and
in accordance with the laws of the State of New York
without regard to its conflict of law provisions.
12. Release Requirement
No Incentive otherwise due under this Agreement will be
paid unless and until the Employee executes a Release,
in a form determined by the Company or its successor,
as a condition for payment under this Agreement.
INTEGRATED DEFENSE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. XxXxxx
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Name: Xxxxxx X. XxXxxx,
Title: Chairman of the Board of Directors
Agreed to and Accepted:
Signed: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Date: March 3, 2003
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