Exhibit 10.12
Key Employee Retention Agreement
The purpose of this Agreement (the "Agreement") between
Integrated Defense Technologies, Inc. (the "Company") and Xxxx
X. Xxxxxxxx (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 $300,000.
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. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Date: March 25, 2003
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