SEPARATION AGREEMENT & GENERAL RELEASE
Exhibit
10.17
SEPARATION
AGREEMENT & GENERAL RELEASE
THIS
SEPARATION AGREEMENT and GENERAL RELEASE (the “Agreement”) made and entered into
as of this 6th day of July, 2009 by and between DEFENSE SOLUTIONS, INC., (the “Company”) and XXXX
X. LITTLE (“Employee”).
WITNESSETH:
WHEREAS,
Employee has been employed with the Company in recent years; and
WHEREAS,
Employee’s active employment with Company ended effective May 29, 2009;
and
WHEREAS,
the parties desire to set forth their respective rights and obligations in
respect of Employee’s separation of employment from the Company.
NOW,
THEREFORE, in consideration of the covenants and conditions set forth herein,
the parties, intending to be legally bound, agree as follows:
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1.
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Separation
Date: The employment of Employee by the Company, and all
rights and obligations of both parties, is duly and effectively separated
on May 29, 2009 (the “Separation Date”), except as expressly set forth in
this Agreement.
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(a)
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Terms of
Separation: In consideration of the mutual obligations of Company
and Employee herein, Company and Employee agree to the
following:
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(i)
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The
Company will cause its parent company, Defense Solutions Holding, Inc.
(“DFSH”), to issue non-qualified options to the Employee in lieu of paying
Employee any deferred compensation, missed payrolls severance or
separation pay and in consideration of Employee’s agreement to provide
consulting services pursuant to section 9 below. The number of
non-qualified options to be issued to the Employee will be calculated as
follows: (Deferred Compensation + Missed Payrolls ($) + Accrued
Paid Time Off ($) + Separation Pay) / (Closing stock price as of July 1,
2009 * 10). The options will be issued pursuant to an agreement
in substantially the form annexed as Exhibit A hereto. The
amount of Deferred Compensation, Missed Payrolls, Separation Pay, Accrued
Paid Time Off to be used in the calculation set forth above are set forth
on Exhibit B hereto.
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(ii)
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To
the extent that Employee holds Incentive Stock Options to acquire shares
of DFSH common stock granted effective November 14, 2008, the Company will
cause DFSH to execute an Amended and Restated Incentive Stock Option
Agreement in substantially the form annexed hereto as Exhibit C which will
permit the Employee to exercise the Option for a period of twenty-four
(24) months following the Separation
Date.
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(iii)
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To
the extent that Employee holds Incentive Stock Options to acquire shares
of DFSH common stock granted effective April 13, 2009, the Company will
cause DFSH to execute an amendment to such Incentive Stock Option
Agreement in substantially the form annexed hereto as Exhibit D which will
permit the Employee to exercise the Option for a period of twenty-four
(24) months following the Separation
Date.
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(iv)
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Other
amounts owed to the Employee for unpaid expense reimbursement, unpaid
401(k) contributions as set forth on Exhibit B will be paid upon the
earlier of a capital raise by DFSH having gross proceeds of at least
$1,000,000 or as soon as permitted (in the Company’s sole discretion) by
the Company’s cash flow..
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2.
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Restrictive
Covenants:
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(a)
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Confidential
Information. Employee agrees that his employment with
the Company has involved access to certain information that the Company
regards as confidential, privileged or proprietary (the “Confidential
Information”), pertaining to the business and affairs of the Company,
including without limitation, information relating to trade secrets,
products, policies, processes, formulas, operational methods, software,
programs, research, data, know-how, marketing plans and procedures,
pricing practices and policies, strategies, customers, clients, vendors
and suppliers. Employee understands and agrees that he has
enjoyed a special position of trust and confidence with the
Company. Accordingly, Employee agrees that Employee shall
not in any fashion, form or manner, eithis directly or
indirectly, use, sell, divulge, communicate, furnish or disclose to any
person, firm, partnership, company, corporation, or other entity, any
Confidential Information. Furthermore, the Employee shall
immediately deliver to the Company, or at any other time the Company may
request, all memoranda, notes, papers, plans, records, reports, computer
discs or tapes, printouts and software and other documents and data (and
copies thereof) (i) prepared by or on behalf of the Company, (ii)
purchased with Company funds or (iii) in any way relating to the
Confidential Information, work product or the business of the Company
which the Employee may then possess or have under his control, whether or
not such Confidential Information was produced by the Employee’s own
efforts. Employee agrees to refrain from copying, retaining or
distributing copies of any documents relating to such Confidential
Information.
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(b)
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Remedies for
Breach. Employee acknowledges that because of the unique
and extraordinary nature of the Confidential Information, any breach or
threatened breach of Employee’s obligations under this Section 3 will give
rise to irreparable injury to the Company, which injury will be
inadequately compensable in money damages. Accordingly,
Employee agrees that, in addition to any other remedies that may be
available at law or equity, the Company may seek and obtain injunctive
relief against the breach or threatened breach of the foregoing
undertakings. Employee further agrees that in view of the
difficulty in ascertaining the damages which might arise from a breach of
this Section 3, in the event he breaches any portion of this Section 3,
and notwithstanding any other remedies that may be available under this
Agreement, or at law or equity, he shall immediately: (i)
forfeit any and all rights he may have to receive Separation Pay under
this Agreement; and (ii) return to the Company any and all Separation Pay
that may have been paid to Employee under this Agreement. Employee
acknowledges and agrees that the covenants contained herein are necessary
for the protection of the Company’s interests and are reasonable in scope
and context. All of the Company’s remedies for the breach or
threatened breach of this Agreement shall be cumulative and the pursuit of
one remedy shall not be deemed to exclude any other
remedies.
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2
In the
event that any action, suit or proceeding at law or in equity is brought by the
Company pursuant to this Agreement to enforce any covenant contained in this
Agreement or to seek money damages for the threatened breach or breach thereof,
and if the Company is successful in such efforts, the Company shall be entitled,
upon demand, to reimbursement from Employee, for any and all expenses incurred
in connection therewith, including without limitation, reasonable attorney’s
fees and costs actually incurred.
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3.
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Review and Revocation
Period. If Employee has not signed and delivered this
Agreement within twenty-one (21) days of the date first written above, the
Company, in its discretion, may elect to withdraw the offer set forth in
this Agreement. Any revocation within this period must be
submitted, in writing, to Xxxxxxx X. Xxxxxxxx, Chief Executive Officer of
the Company, and must state "I hereby revoke my acceptance of this Mutual
Separation Agreement and General Release." The revocation must
either be personally delivered to Xxxxxxx X. Xxxxxxxx, or mailed to
Xxxxxxx X. Xxxxxxxx at the Company’s offices, and postmarked within seven
(7) days of execution of this Agreement. This Agreement shall
not become effective nor enforceable until the revocation period has duly
expired.
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4.
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General
Release: In consideration of the obligations of Company
herein, Employee releases the Company and its affiliates, parent,
subsidiaries and related entities, and their present and former directors,
officers, employees, members, managers, agents, attorneys, successors and
assigns (collectively the “Released Parties”), from any and all manner of
actions and causes of action, suits, debts, dues, accounts, bonds,
covenants, contracts, agreements, judgments, charges, claims and demands
whatsoever which Employee, his heirs, executors, administrators and
assigns has, had or may hereafter have against the Released Parties or any
of them arising out of or by reason of any cause, matter or thing
whatsoever from the beginning of the world to the date hereof, including
without limitation any and all matters relating to his employment by the
Company and the cessation thereof, his Employee benefits, and all matters
arising under any federal, state or local statute, rule or regulation or
principle of contract law or common law, including but not limited to
Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1866, as amended, the Civil Rights Act of 1991, 42 U.S.C. 2000
et. seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. 621 et. seq., the Older
Workers Benefits Protection Act, the Equal Pay Act, as amended, the
Americans with Disabilities Act of 1990, 42 U.S.C. 101 et. seq., the
Federal Family and Medical Leave Act, the Worker Adjustment Restraining
and Notification Act, the Employee Retirement Income Security Act of 1974,
as amended, 29 U.S.C. 1001 et. seq., any
applicable executive order programs, the Federal Fair Labor Standards Act,
or their state or local counterparts, Pennsylvania Human Relations Act,
Pennsylvania Wage and Hour laws, the Pennsylvania Whistleblower law, the
Pennsylvania Wiretapping and Electronic Surveillance Control Act, or laws
of similar import. This Agreement includes and covers any type
of claim or theory whatsoever. Employee makes this Agreement on
behalf of himself and all who succeed to his respective rights and
responsibilities, his or its heirs and
successors.
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3
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5.
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Return of Company
Property: Employee shall return, on or prior to the
Separation Date, all Company property in his possession including but not
limited to, laptop computer, cellular phone, corporate liable credit
cards, security key cards, telephone cards, computer software and
hardware, pagers, and Company/building identification cards, Company
records and copies of records, correspondence and copies of correspondence
and other books or manuals or handbooks issued by the
Company. Employee represents and warrants that he has no
Company records, copies of records, correspondence or copies of
correspondence. Employee also warrants that he has no debts to the
Company. No Separation Pay shall be paid to the Employee until
all Company property described above is returned by the Employee to the
Company.
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6.
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Confidentiality: Employee
agrees that the terms and conditions of this Agreement are confidential
and that Employee will not disclose the existence of this Agreement or any
of its terms to any third parties, other than spouse, attorney or as
required by law or may be necessary to enforce this
Agreement. Employee agrees that a breach of this provision
voids the Company’s obligations
hereunder.
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7.
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Non-Disparagement: Employee
agrees that he will not publish or communicate to any person or entity any
disparaging remarks, comments or statements concerning the Company or its
affiliates and related entities, directors, officers, agents or
employees. Employee agrees that a breach of this provision
voids the Company’s obligations
hereunder.
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8.
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Representations and
Warranties:
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(a)
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Employee
represents and warrants that he has not filed any charges, claims or
complaints against the Released Parties, and he represents and warrants
that he will not initiate or voluntarily participate or assist in any
charge, claim or complaint filed with, or in any investigation conducted
by, any federal, state or local agency, legislative body, committee or
entity of any kind, or in any claim, lawsuit or investigation that may be
asserted against the Released Parties by other individuals or any federal,
state of local agency, legislative body, committee or entity of any kind,
it being understood that this provision does not affect Employee’s legal
obligation, if any, to appear as a witness if subpoenaed for examination
before trial or subpoenaed for trial or
hearing.
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(b)
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Employee
warrants that he is entering into this Agreement voluntarily, and that,
except as set forth herein, no promises nor inducements for this Agreement
have been made, and he is entering into this Agreement without reliance
upon any statement or representation without by any of the Released
Parties or any other person, concerning any fact material
hereto.
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9.
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Consulting
Services. During the twelve (12) month period following
the Separation Date, Employee agrees to provide consulting services to the
Company as reasonably requested by the Company at a per diem rate set
forth on Exhibit B hereto.
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10.
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Right to Consult
Attorney: Employee acknowledges that he has hereby been
advised in writing of his right to consult with an attorney prior to
signing this Agreement. Employee represents and warrants
that he has obtained legal counsel concerning this Agreement, and fully
understands the terms of this Agreement and that he knowingly and
voluntarily, of his own free will without any duress, being fully informed
and after due deliberation, accept its terms and signs the same as his own
free act. Employee understands that as a result of entering
into this Agreement, he will not have the right to asset that the Company
unlawfully terminated his employment or violated any rights in connection
with his employment.
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11.
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Binding
Agreement: This Agreement shall be binding upon and
shall endure to the benefit of its successors, assigns and legal
representatives of Company and
Employee.
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12.
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No
Admission: Company and Employee agree that neither this
Agreement nor the furnishing of the consideration for this Agreement,
shall be deemed or construed at any time, for any purpose, as an admission
by the Company or Employee of any liability or unlawful conduct at any
time.
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13.
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Severability. If
any one or more of the provisions of this Agreement shall be determined to
be invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality, and enforceability of any such provision in every
other respect and the remaining provisions of this Agreement shall not in
any way be impaired.
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14.
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Pronouns. All
pronouns used herein shall be deemed to refer to the masculine, feminine,
or neuter gender as the context
requires.
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15.
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Counterparts: This
Agreement may be executed in counterparts, each of which shall be deemed
an original, but which together shall constitute one and the same
instrument.
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16.
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Waiver: No
waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver
shall be binding unless it shall be made in writing that will be signed by
the party making the
waiver.
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17.
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Notices: Any
notices, requests and demands and other communications relating to this
Agreement shall be in writing and shall be effective upon delivery to any
party hereto in person, by telecopy with confirmation of its receipt, or
if mailed by certified mail or registered mail, postage
prepaid:
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If to
Company:
Xxxxxxx X. Xxxxxxxx
Defense
Solutions, Inc.
000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx,
Xxxxxxxxxxxx 00000
If to
Employee: Xxxx
X. Little
0000
Xxxxxx Xxxxx
Xxxxx
Xxxxx, XX 00000
If any
party to this Agreement or counsel desires to change his/her or its address for
notification, he/she or it shall promptly notify the other parties in writing
via telefax and by first class mail, postage prepaid, of such change of
address.
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18.
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Entire
Agreement: This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof,
and supersedes any and all prior agreements or understandings between the
parties arising out of or relating to the Employee’s employment and the
cessation thereof. This Agreement may only be changed by
written agreement executed by the
parties.
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19.
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Governing
Law: This Agreement shall be governed by the laws of the
State of New Jersey, without giving effect to the principles of conflicts
of law.
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20.
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Headings: The
section headings in this Agreement are inserted as a matter of convenience
and reference only and are not to be given any effect whatsoever as
construing any provisions of this
Agreement.
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BY
SIGNING THIS MUTUAL SEPARATION AGREEMENT AND GENERAL RELEASE, EMPLOYEE STATES
THAT:
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A.
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EMPLOYEE
HAS READ IT.
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B.
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EMPLOYEE
UNDERSTANDS IT AND KNOWS THAT HE IS GIVING UP IMPORTANT RIGHTS, INCLUDING
BUT NOT LIMITED TO, RIGHTS UNDER TITLE VII OF THE CIVIL RIGHTS ACT OF
1964, AS AMENDED; THE PENNSYLVANIA HUMAN RELATIONS ACT; THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED; THE OLDER WORKERS
BENEFITS PROTECTION ACT; UNDER ALL OTHER STATUTES AND LAWS AS MORE
PARTICULARLY DESCRIBED IN SECTION 4, AND PURSUANT TO ANY OTHER AGREEMENT
OR CONTRACTS EMPLOYEE MAY HAVE HAD WITH THE
COMPANY.
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C.
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EMPLOYEE
AGREES WITH EVERYTHING IN
IT.
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D.
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EMPLOYEE
HAS BEEN ADVISED OF HIS RIGHT TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING
IT, AND THAT HE HAS CONSULTED WITH AN
ATTORNEY.
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E.
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EMPLOYEE
HAS BEEN GIVEN AT LEAST TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER THIS
MUTUAL SEPARATION AGREEMENT AND GENERAL RELEASE BEFORE SIGNING IT, AND HE
UNDERSTANDS THAT FOR A PERIOD OF SEVEN (7) DAYS AFTER SIGNING IT, HE MAY
REVOKE HIS ACCEPTANCE OF IT IN THE MANNER PROVIDED FOR IN THIS MUTUAL
SEPARATION AGREEMENT AND GENERAL
RELEASE.
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F.
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EMPLOYEE
HAS SIGNED THIS MUTUAL SEPARATION AGREEMENT AND GENERAL RELEASE KNOWINGLY
AND VOLUNTARILY AND IN CONSIDERATION OF RECEIVING THE SEPARATION PAYMENTS
AND BENEFITS SET FORTH HEREIN.
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G.
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EMPLOYEE
AGREES THAT THE PROVISIONS OF THIS SEPARATION AGREEMENT AND GENERAL
RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY EMPLOYEE AND AN AUTHORIZED REPRESENTATIVE
OF THE COMPANY.
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IN WITNESS WHEREOF, that the
parties hereto have executed this Agreement as of the day and year first above
written.
| DEFENSE SOLUTIONS, INC. | |||
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Dated: July
6, 2009
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By:
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Name:
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Xxxxxxx
X. Xxxxxxxx
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Title:
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Chief
Executive Officer
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Dated: July
6, 2009
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Xxxx
X. Little
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7
Exhibit
A
UNDER
THE
EQUITY
INCENTIVE PLAN
THIS INCENTIVE STOCK OPTION
AGREEMENT (this “Agreement”) is made as of the 6th day of July, 2009,
between Defense Solutions Holding, Inc. (the “Corporation”) and Xxxx X. Little
(the “Optionee”).
BACKGROUND
A. The
Corporation maintains the Defense Solutions Holding, Inc. Equity Incentive Plan
(the “Plan”) for the benefit of its employees, directors and
consultants.
B. The
Plan permits the award of Options to purchase shares of the Corporation’s Common
Stock, par value $0.001 per share (the “Shares”), subject to the terms of the
Plan.
AGREEMENT
NOW, THEREFORE, in
consideration of these premises and the agreements set forth herein, the
parties, intending to be legally bound hereby, agree as follows:
1. Award of
Option. The Corporation hereby grants to the Optionee the
option (the “Option”) to purchase Two Hundred Sixty-Six Thousand Three Hundred
Thirty-Three (266,333) Shares (the “Option Shares”). The Option is
subject to the terms set forth herein, and in all respects is subject to the
terms, definitions and provisions of the Plan applicable to incentive stock
options, which terms and provisions are incorporated herein by this
reference. Except as otherwise specified herein or unless the context
herein requires otherwise, the terms defined in the Plan will have the same
meanings herein.
2. Nature of the
Option. The Option is intended to be a Non-Qualified Stock
Option. Notwithstanding the foregoing, the Corporation makes no
representation as to the taxation of the Option and the Corporation has not
advised the Optionee on such matters.
3. Date of Grant; Expiration of
Option. The Option is granted as of July 6, 2009 (the
“Effective Date”), and may not be exercised later than July 5,
2019. Notwithstanding anything to the contrary set forth in the Plan,
this Option shall remain outstanding following the term of the Optionee’s
employment or consulting relationship with the Company for any reason,
including, without limitation, death or Disability.
4. Option Exercise
Price. The total cost to the Optionee to purchase, pursuant to
this Agreement, one Share is $.17.
5. Exercise of
Option. The Option will be exercisable during its term only in
accordance with the terms and provisions of the Plan and this Agreement, as
follows:
A-1
(a) Right to
Exercise. All of the Option Shares shall be exercisable as of
the Effective Date.
(b) Method of
Exercise. The Optionee may exercise the Option by providing
written notice to the Corporation stating the election to exercise the Option,
and making such additional representations and agreements as to the Optionee’s
investment intent with respect to the Option Shares as may be required by the
Corporation hereunder or pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Corporation or such other person as
may be designated by the Corporation. The written notice shall be
accompanied by (i) payment of the purchase price, and (ii) an executed Market
Standoff Agreement in the form of Appendix I hereto (the “Market Standoff
Agreement”). Payment of the purchase price shall be by check or such
other consideration and method of payment as may be authorized by the
Corporation’s Board pursuant to the Plan. The certificate(s) for the
Shares as to which the Option shall be exercised shall be registered in the name
of the Optionee and shall be legended as required under the Plan, the Market
Standoff Agreement and/or applicable law.
(c) Partial
Exercise. The Option may be exercised in whole or in part;
provided, however, that any
exercise may apply only with respect to whole numbers of Option
Shares.
(d) Restrictions on
Exercise. The Option may not be exercised on an accelerated
basis upon an initial public offering of the Corporation’s
securities. Upon a Change of Control, the right to exercise the
Option shall be subject to Section 3(d) of the Plan. The Option may
not be exercised if the issuance of the Option Shares upon such exercise would
constitute a violation of any applicable federal or state securities laws or
other laws or regulations. The Board shall have the right to
condition the exercise of the Option upon the registration of the Option Shares
under the Securities Act of 1933. As a further condition to the
exercise of the Option, the Corporation may require the Optionee to make any
representation or warranty to the Corporation as may be required by or advisable
under any applicable law or regulation.
6. Investment
Representations. Unless the Option Shares have been registered
under the Securities Act of 1933, in connection with the acquisition of the
Option, the Optionee represents and warrants to the Corporation as
follows:
(a) The
Optionee is acquiring the Option, and upon exercise of the Option, Optionee will
be acquiring the Option Shares for investment for his own account, not as a
nominee or agent, and not with a view to or for resale in connection with any
distribution thereof.
(b) The
Optionee has a preexisting business or personal relationship with the
Corporation or one of its directors, officers or controlling persons and by
reason of his business or financial experience, has, and could be reasonably
assumed to have, the capacity to protect his interests in connection with the
acquisition of the Option and the Option Shares.
A-2
The Board
may require the Optionee to make additional representations upon exercise of the
Option.
7. Non-Transferability of
Option. The Option may not be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution. During the Optionee’s lifetime, the
Option is exercisable only the Optionee. Subject to the foregoing and
the terms of the Plan, the terms of this Option will be binding upon the
executors, administrators, legal guardians, representatives and heirs of the
Optionee, meaning for purposes of this Agreement, both testamentary heirs and
heirs by intestacy.
8. No Continuation of
Employment. Neither the Plan nor the Option will confer upon
any Optionee any right to continue in the service of the Corporation or any
Affiliate or Subsidiary of the Corporation, or limit, in any respect, the right
of the Corporation to discharge the Optionee at any time, with or without Cause
and with or without notice.
9. Withholding. The
Corporation reserves the right to withhold, in accordance with any applicable
laws, from any consideration payable or property transferable to Optionee any
taxes requires to be withheld by federal, state or local law as a result of the
grant or exercise of this Option or the sale or other disposition of the
Shares. If the amount of any consideration payable to the Optionee is
insufficient to pay such taxes or if no consideration is payable to the
Optionee, upon the request of the Corporation, the Optionee (or such other
person entitled to exercise this Option pursuant to Section 6 of the Plan) will
pay to the Corporation an amount sufficient for the Corporation to satisfy any
federal, state or local tax withholding requirements applicable to and as a
condition to the grant or exercise of this Option or the sale or other
disposition of the Shares issued upon the exercise of this
Option. The minimum required withholding obligations may be settled
with Shares, including Option Shares.
10. The
Plan. The Optionee has received a copy of the Plan, has read
the Plan and is familiar with its terms, and hereby accepts the Option subject
to all of the terms and provisions of the Plan, as amended from time to
time. Pursuant to the Plan, the Board is authorized to interpret the
Plan and to adopt rules and regulations not inconsistent with the Plan as it
deems appropriate. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan with respect to the Option Shares or any
Agreement related to such Shares.
11. Optionee
Acknowledgement. Optionee acknowledges that in the event that
Optionee utilizes the cashless exercise method described above, the Optionee
will be deemed to have (a) exercised the Option with respect to shares
effectively being surrendered in satisfaction of the exercise price and (b) sold
the shares that are deemed to be surrendered in satisfaction of the exercise
price. As a result, the Optionee would recognize ordinary income on
the deemed exercise price in an amount measured by the difference between the
exercise price of the Option and the fair market value of the shares at the time
of exercise. Accordingly, if the Optionee utilizes the cashless
exercise method, Optionee will be subject to tax at ordinary income rates with
respect to the deemed sale of shares that are not actually issued to
Optionee.
A-3
12. Governing
Law. This Option Agreement will be construed in accordance
with the laws of the State of Nevada, without regard to the application of the
principles of conflicts of laws of Nevada or any other
jurisdiction.
13. Amendment. Subject
to the provisions of the Plan, this Agreement may only be amended by a writing
signed by each of the parties hereto.
14. Entire
Agreement. This Agreement, together with the Plan and the
other exhibits attached thereto or hereto, represents the entire agreement
between the parties hereto relating to the subject matter hereof, and merges and
supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature relating to the award of Options to Optionee by
the Corporation.
IN
WITNESS WHEREOF, this Agreement has been executed by the parties effective as of
the 6th day of July, 2009.
| DEFENSE SOLUTIONS HOLDING, INC. | ||||
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By:
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Name:
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Xxxxxxx X. Xxxxxxxx | |||
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Title:
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President | |||
| Xxxx X. Little | ||||
| Address: | ||||
| 0000 Xxxxxx Xxxxx | ||||
| Xxxxx Xxxxx, XX 00000 | ||||
THIS
OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE NOT BEEN
ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED,
EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED
OF, BY GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A SATISFACTORY OPINION OF
COUNSEL SATISFACTORY TO DEFENSE SOLUTIONS, INC. THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS.
A-4
Exhibit
B
Compensation
Information
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Deferred
Compensation:
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$ | 146,452 | ||
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Missed
Payrolls:
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$ | 30,833 | ||
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Separation
Pay:
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$ | 185,000 | ||
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Accrued
Paid Time Off (PTO):
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$ | 4,981 | ||
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Expense
Reimbursements:
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$ | 2,181 | ||
|
401(k)
Payments:
|
$ | 8,479 | ||
|
Per
Diem Rate for Consulting Services:
|
$ | 700 |
B-1
Exhibit
C
Amended
and Restated
This
Amended and Restated Incentive Stock Option Agreement is made as of this 6th day
of July, 2009 by Defense Solutions Holding, Inc. (the “Corporation”) and Xxxx X.
Little (the “Optionee”).
WHEREAS,
Defense Solutions, Inc., a Delaware corporation and a wholly owned subsidiary of
the Corporation (“DSI”), previously granted an incentive stock option (the “DSI
Option”) to the Optionee pursuant to an Incentive Stock Option Agreement dated
as of November 1, 2007;
WHEREAS,
in connection with the merger of DefSol Acquisition Corp. with and into DSI, and
as permitted by the terms of the DSI 2007 Equity Incentive Plan, the Board of
Directors of DSI, effective November 14, 2009, cancelled the DSI Option and
caused the Corporation to issue to the Optionee a new option (the “New Option”)
to purchase Common Stock of the Corporation having terms substantially similar
to the DSI Option, except that the exercise price of the New Option was
established at $.32 per share and the number of shares subject to the New Option
was determined by multiplying the number of shares subject to the DSI Optionby
2.3163;
WHEREAS,
the Corporation wishes to memorialize the grant of the New Option under the
Defense Solutions Holding, Inc. Equity Incentive Plan (the “Plan”) and amend and
restate the terms of the New Option;
NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Corporation hereby agrees that:
|
1.
|
Award of
Option. Effective November 14, 2008, the Corporation has
granted to the Optionee the option (the “Option”) to purchase Five Hundred
Seventy-Nine Thousand Seventy-Five (579,075) Shares (the “Option
Shares”). The Option is subject to the terms set forth herein,
and in all respects is subject to the terms, definitions and provisions of
the Plan applicable to incentive stock options, which terms and provisions
are incorporated herein by this reference. Except as otherwise
specified herein or unless the context herein requires otherwise, the
terms defined in the Plan will have the same meanings
herein.
|
|
2.
|
Nature of the
Option. The Option is intended to be an Incentive Stock
Option. Notwithstanding the foregoing, the Corporation makes no
representation as to the taxation of the Option and the Corporation has
not advised the Optionee on such
matters.
|
|
3.
|
Date of Grant;
Expiration of Option. The Option is granted as of
November 14, 2008 (the “Effective Date”), and may not be exercised later
than July 6, 2011. Notwithstanding anything to the contrary set
forth in the Plan, this Option shall remain outstanding following the term
of the Optionee’s employment or consulting relationship with the Company
for any reason, including, without limitation, death or
Disability.
|
C-1
|
4.
|
Option Exercise
Price. The total cost to the Optionee to purchase,
pursuant to this Agreement, one Share is
$.32.
|
|
5.
|
Exercise of
Option. The Option will be exercisable during its term
only in accordance with the terms and provisions of the Plan and this
Agreement, as follows:
|
|
|
(a)
|
Right to
Exercise. All of the Option Shares shall be exercisable
as of the Effective Date.
|
|
|
(b)
|
Method of
Exercise. The Optionee may exercise the Option by
providing written notice to the Corporation stating the election to
exercise the Option, and making such additional representations and
agreements as to the Optionee’s investment intent with respect to the
Option Shares as may be required by the Corporation hereunder or pursuant
to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Corporation or such other person as may be
designated by the Corporation. The written notice shall be
accompanied by (i) payment of the purchase price, (ii) an executed Market
Standoff Agreement in substantially the form of Appendix I hereto(the
“Market Standoff Agreement”), and (iii) an executed Stock Restriction
Agreement in the form of Appendix II hereto (the “Stock Restriction
Agreement”). Payment of the purchase price shall be by check or
such other consideration and method of payment as may be authorized by the
Corporation’s Board pursuant to the Plan. The certificate(s)
for the Shares as to which the Option shall be exercised shall be
registered in the name of the Optionee and shall be legended as required
under the Plan, the Stock Restriction Agreement, the Market Standoff
Agreement and/or applicable law.
|
|
|
(c)
|
Partial
Exercise. The Option may be exercised in whole or in
part; provided, however, that
any exercise may apply only with respect to whole numbers of Option
Shares.
|
|
|
(d)
|
Restrictions on
Exercise. The Option may not be exercised on an
accelerated basis upon an initial public offering of the Corporation’s
securities. Upon a Change of Control, the right to exercise the
Option shall be subject to Section 3(d) of the Plan. The Option
may not be exercised if the issuance of the Option Shares upon such
exercise would constitute a violation of any applicable federal or state
securities laws or other laws or regulations. The Board shall
have the right to condition the exercise of the Option upon the
registration of the Option Shares under the Securities Act of
1933. As a further condition to the exercise of the Option, the
Corporation may require the Optionee to make any representation or
warranty to the Corporation as may be required by or advisable under any
applicable law or regulation.
|
|
6.
|
Investment
Representations. Unless the Option Shares have been
registered under the Securities Act of 1933, in connection with the
acquisition of the Option, the Optionee represents and warrants to the
Corporation as follows:
|
C-2
|
|
(a)
|
The
Optionee is acquiring the Option, and upon exercise of the Option,
Optionee will be acquiring the Option Shares for investment for his own
account, not as a nominee or agent, and not with a view to or for resale
in connection with any distribution
thereof.
|
|
|
(b)
|
The
Optionee has a preexisting business or personal relationship with the
Corporation or one of its directors, officers or controlling persons and
by reason of his business or financial experience, has, and could be
reasonably assumed to have, the capacity to protect his interests in
connection with the acquisition of the Option and the Option
Shares.
|
The Board
may require the Optionee to make additional representations upon exercise of the
Option.
|
7.
|
Non-Transferability of
Option. The Option may not be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by
the laws of descent or distribution. During the Optionee’s
lifetime, the Option is exercisable only the Optionee. Subject
to the foregoing and the terms of the Plan, the terms of this Option will
be binding upon the executors, administrators, legal guardians,
representatives and heirs of the Optionee, meaning for purposes of this
Agreement, both testamentary heirs and heirs by
intestacy.
|
|
8.
|
No Continuation of
Employment. Neither the Plan nor the Option will confer
upon any Optionee any right to continue in the service of the Corporation
or any Affiliate or Subsidiary of the Corporation, or limit, in any
respect, the right of the Corporation to discharge the Optionee at any
time, with or without Cause and with or without
notice.
|
|
9.
|
Withholding. The
Corporation reserves the right to withhold, in accordance with any
applicable laws, from any consideration payable or property transferable
to Optionee any taxes requires to be withheld by federal, state or local
law as a result of the grant or exercise of this Option or the sale or
other disposition of the Shares. If the amount of any
consideration payable to the Optionee is insufficient to pay such taxes or
if no consideration is payable to the Optionee, upon the request of the
Corporation, the Optionee (or such other person entitled to exercise this
Option pursuant to Section 6 of the Plan) will pay to the Corporation an
amount sufficient for the Corporation to satisfy any federal, state or
local tax withholding requirements applicable to and as a condition to the
grant or exercise of this Option or the sale or other disposition of the
Shares issued upon the exercise of this Option. The minimum
required withholding obligations may be settled with Shares, including
Option Shares.
|
|
10.
|
The
Plan. The Optionee has received a copy of the Plan, has
read the Plan and is familiar with its terms, and hereby accepts the
Option subject to all of the terms and provisions of the Plan, as amended
from time to time. Pursuant to the Plan, the Board is
authorized to interpret the Plan and to adopt rules and regulations not
inconsistent with the Plan as it deems appropriate. The
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under
the Plan with respect to the Option Shares or any Agreement related to
such Shares.
|
C-3
|
11.
|
Optionee
Acknowledgement. Optionee acknowledges that in the event
that Optionee exercises the Option at any time after the three month
period following the date of this Amended and Restated Incentive Stock
Option Agreement, the Option will not be treated as an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as amended
and Optionee will be taxed at ordinary income tax rates upon any such
exercise in an amount equal to the amount by which the fair market value
of a Share of Common Stock exceeds the per share exercise
price.
|
|
12.
|
Governing
Law. This Option Agreement will be construed in
accordance with the laws of the State of Nevada, without regard to the
application of the principles of conflicts of laws of Nevada or any other
jurisdiction.
|
|
13.
|
Amendment. Subject
to the provisions of the Plan, this Agreement may only be amended by a
writing signed by each of the parties
hereto.
|
|
14.
|
Entire
Agreement. This Agreement, together with the Plan and
the other exhibits attached thereto or hereto, represents the entire
agreement between the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating to the
award of Options to Optionee by the
Corporation.
|
C-4
IN
WITNESS WHEREOF, this Agreement has been executed by the parties effective as of
the 6th day of July, 2009.
| DEFENSE SOLUTIONS HOLDING, INC. | ||||
|
By:
|
||||
|
Name:
|
Xxxxxxx
X. Xxxxxxxx
|
|||
|
Title:
|
President
|
|||
| Xxxx X. Little | ||||
| Address: | ||||
| 0000 Xxxxxx Xxxxx | ||||
| Xxxxx Xxxxx, XX 00000 | ||||
THIS
OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE NOT BEEN
ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED,
EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED
OF, BY GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A SATISFACTORY OPINION OF
COUNSEL SATISFACTORY TO DEFENSE SOLUTIONS, INC. THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS.
C-5
Exhibit
D
Amendment
to
This
Amendment to Incentive Stock Option Agreement is made as of this 6th day of
July, 2009 by Defense Solutions Holding, Inc. (the “Corporation”) and Xxxx X.
Little (the “Optionee”).
WHEREAS,
the Corporation has previously granted an incentive stock option (the “Option”)
to the Optionee pursuant to an Incentive Stock Option Agreement dated as of
April 13, 2009;
WHEREAS,
the Corporation wishes to permit the Optionee to exercise the Option at any time
during the twenty-four (24) month period following the date hereof;
NOW,
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Corporation hereby agrees that:
|
15.
|
Amendment of
Option. Section 3 of to the Option Agreement is hereby
amended and restated to read in its entirety as
follows:
|
|
|
“3.
|
Date of Grant;
Expiration of Option. The Option is granted as of April
13, 2009, and may not be exercised later than July 5,
2011. Notwithstanding anything to the contrary set forth in the
Plan, this Option shall remain outstanding following the terms of
Optionee’s employment or consulting relationship with the Company for any
reason, including death or
Disability.”
|
|
16.
|
Optionee
Acknowledgement. Optionee acknowledges that in the event
that Optionee exercises the Option at any time after the three month
period following the date of this Amendment to Incentive Stock Option
Agreement, the Option will not be treated as an “incentive stock option”
under Section 422 of the Internal Revenue Code of 1986, as amended and
Optionee will be taxed at ordinary income tax rates upon any such exercise
in an amount equal to the amount by which the fair market value of a Share
of Common Stock exceeds the per share exercise
price.
|
IN
WITNESS WHEREOF, the parties hereby have executed this Amendment to Incentive
Stock Option Agreement as of the date first above written.
| Defense Solutions Holding, Inc. | ||||
|
By:
|
||||
|
Name:
|
Xxxxxxx
X. Xxxxxxxx
|
|||
|
Title:
|
President
|
|||
| Xxxx X. Little | ||||
D-1
