EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 1, 2005,
is entered into between ARMOR HOLDINGS, INC., a Delaware corporation (the
"Company") and XXXXXX X. XXXXXXXX (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to continue to employ the Employee as
President and Chief Operating Officer of the Company and to be assured of his
services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to continue to be employed as President
and Chief Operating Officer of the Company on such terms and conditions; and
WHEREAS, the Compensation Committee of the Company's Board of Directors
(the "Compensation Committee") and the Company's Board of Directors (the
"Board"), at meetings duly called and held, have each authorized and approved
the execution and delivery of this Agreement by the Company; and
WHEREAS, the previous employment agreement between the Employee and the
Company, dated as of January 1, 2002, as amended on November 4, 2003 (the
"Previous Agreement"), expired on December 31, 2004 pursuant to its terms.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Company and the Employee hereby agree as follows:
1. EMPLOYMENT. The Company hereby continues to employ the Employee as the
President and Chief Operating Officer of the Company, and the Employee accepts
such continued employment, upon the terms and subject to the conditions set
forth in this Agreement.
2. TERM. The term of this Agreement shall commence on the date hereof and
terminate on December 31, 2007 (the "Term"), subject to earlier termination
pursuant to the provisions of Section 10 hereof.
3. DUTIES. During the Term of this Agreement, the Employee shall serve as
President and Chief Operating Officer of the Company and shall, under the
control of the Chief Executive Officer of the Company and the Board, perform all
duties commensurate with his position and as may be assigned to him by the Chief
Executive Officer of the Company or the Board. The Employee shall devote his
full business time and energies to the business and affairs of the Company and
shall use his best efforts, skills and abilities to promote the interests of the
Company and to diligently and competently perform the duties of his position.
Notwithstanding
the foregoing, it is understood and agreed that the Employee from time to time
may (a) be appointed to additional offices or to different offices than those
set forth above (including, without limitation, additional offices with any
affiliate of the Company), (b) perform such duties other than those set forth
above, and/or (c) relinquish one or more of such offices or other duties as may
be mutually agreed to by and between the Company and the Employee, and that no
such action shall be deemed or construed to otherwise amend or modify any of the
remaining terms or conditions of this Agreement.
4. COMPENSATION AND BENEFITS.
(a) Base Compensation. During the Term, the Company shall pay to the
Employee, and the Employee shall accept from the Company, as compensation for
the performance of services under this Agreement and the Employee's observance
and performance of all of the provisions hereof, a salary of $700,000.00 per
year (as may be adjusted from time to time pursuant to this Section 4(a), the
"Base Compensation"). During the Term, the Compensation Committee shall review
Employee's Base Compensation (i) on an annual basis based on the performance of
Employee and the Company, and (ii) upon a significant change in the business of
the Company, as determined in the sole discretion of the Compensation Committee.
The Employee's Base Compensation shall be payable in accordance with the normal
payroll practices of the Company and shall be subject to withholding for
applicable taxes and other amounts.
(b) Bonuses. In addition to any other bonus(es), whether based on
performance, operations or otherwise, that the Compensation Committee may award
to Employee in its sole discretion, the Company shall provide Employee with a
minimum cash bonus of 100% of Base Compensation in each year of the Term so long
as the Company achieves the Company's target for earnings before interest,
taxes, depreciation and amortization, as computed by the Company on a consistent
basis ("EBITDA") for such year as reflected in the annual budget approved by the
Board (the "Annual Bonus"). In the sole discretion of the Compensation Committee
and the Board of Directors, any Annual Bonus may be increased based on
performance to a target level of 200% of Base Compensation; provided that
nothing herein shall limit the discretion of the Compensation Committee and the
Board of Directors to further adjust the Annual Bonus based upon performance.
For purposes of this Section 4(b), any Annual Bonus payable to the Employee
shall be paid no later than 2 1/2 months after the end of the fiscal year in
question during the Term.
(c) Stock Options; Restricted Stock; Stock Bonus Awards.
(i) Generally. The Employee shall also be entitled to participate, at the
sole and absolute discretion of the Compensation Committee, in the
Company's 2002 Stock Incentive Plan, or such other stock incentive plan as
the Company may have in effect from time to time (the "Stock Incentive
Plan"). Such participation and awards shall be based upon, among other
things, the Employee's performance and the Company's performance, all as
determined by the Compensation Committee. In addition, the Employee may be
entitled, during the Term of this Agreement, to receive additional options,
restricted stock and Stock Bonus Awards at such prices and other terms,
and/or to participate in such other bonus plans, whether during the term of
this Agreement or
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upon termination pursuant to Section 10 hereof, as the Compensation
Committee may, in its sole and absolute discretion, determine.
(ii) Grants Effected Hereby. The Employee shall be entitled to receive the
Stock Bonus Awards and options set forth in Schedule A attached hereto.
(iii) Availability. The Company shall use its commercially reasonable
efforts to keep the requisite number of options and shares of Common Stock
available under the Stock Incentive Plan to fulfill the grants and options
referenced herein.
(d) Medical and Fringe Benefits. During the Term, the Employee shall be
entitled to participate in or benefit from, in accordance with the eligibility
and other provisions thereof, the Company's medical insurance and other fringe
benefit plans or policies as the Company may make available to, or have in
effect for, its personnel with commensurate duties from time to time, including,
without limitation, any Supplemental Executive Retirement Plan. The Company
retains the right to terminate or alter any such plans or policies from time to
time. The Employee shall also be entitled to four weeks paid vacation each year,
sick leave and other similar benefits in accordance with policies of the Company
from time to time in effect for personnel with commensurate duties. Subject to
the terms of this Section 4(d), the Employee will be entitled to receive at no
cost to the Employee, (i) eighteen months of coverage for the medical benefits
described above if the Company does not offer to renew this Agreement upon
expiration of the Term on substantially similar terms, and (ii) three years of
coverage for the medical benefits described above if this Agreement is
terminated by the Company without cause or there occurs a change in control (as
hereinafter defined) and the Employee terminates this Agreement; provided,
however, that in each such case, such coverage need not be provided by the
Company if the Employee is eligible for commensurate coverage for the medical
and other fringe benefits described above through another employer. In the event
of a termination of this Agreement pursuant to Section 10(a) or 10(b) hereof,
the Employee and/or his family, as applicable, shall be entitled to receive, at
no cost to them, three years of medical and dental coverage that the Employee
had at the time of such termination.
(e) Use of Company Aircraft. For security purposes, during the Term, so
long as the Company (or one of its subsidiaries) owns an interest in, or a right
to use, a private jet aircraft, the Employee shall use such aircraft for
business purposes, and upon reasonable notice, and provided that such aircraft
is not required at such times for business purposes, the Company will make
available such aircraft to Employee and his family for up to fifty (50) flight
hours per year for his and his family's personal use, in each case at no cost to
the Employee other than any applicable personal income taxes payable in
connection therewith. An amount equal to the related benefit of such personal
use of the aircraft will be included in Employee's taxable income as required
pursuant to the Internal Revenue Code of 1986, as amended (the "Code"), and
related regulations.
(f) Payments Upon Change in Control or Without Cause Termination. Upon the
occurrence of a change in control, the Employee shall have the right to
terminate this Agreement; provided, however, that if requested to do so by the
Company, the Employee shall provide consulting services to the Company for
transition purposes for a period of six months following the effective date of
such change in control and his termination of this Agreement, and the
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Company shall pay consulting fees to the Employee for such six month period in
an amount equal to the compensation he would have otherwise received under this
Agreement had it been in effect for such six month period. Upon the termination
of this Agreement by the Employee due to the occurrence of a change in control,
the Employee shall be entitled to receive by wire transfer of immediately
available funds, in one lump sum, immediately upon the consummation of the
change in control, three times the sum of (i) the Employee's highest annual Base
Compensation, plus (ii) the Annual Bonus for such year, in each case since
January 1, 2004. Upon the termination of this Agreement by the Company pursuant
to Section 10(d) hereof, the Employee shall be entitled to receive by wire
transfer of immediately available funds, in one lump sum, within 5 business days
of termination by the Company pursuant to Section 10(d) three times the
Employee's highest annual Base Compensation since January 1, 2004. If the
Company does not offer to renew this Agreement upon expiration of the Term on
substantially similar terms, and provided that the Employee is no longer
employed by the Company, the Employee shall be entitled to receive one and
one-half times the Employee's highest annual Base Compensation since January 1,
2004, which shall be payable in accordance with the normal payroll practices of
the Company over a period of eighteen months, and shall be subject to
withholding for applicable taxes and other amounts; provided, however, that such
payments shall not commence until six months have elapsed from the effective
date of such non-renewal; and provided, further, that the first payment that is
payable after such six month period shall include all amounts that would have
been payable during such six month period but were withheld due to the
provisions hereof. For purposes of this Agreement, each payment referred to in
this Section 4(f) shall be a "Termination Payment". Any Termination Payment
shall be subject to withholding for applicable taxes and other amounts.
Notwithstanding anything to the contrary set forth herein, in the event that the
Employee has breached his obligations under Sections 7 or 8 hereof, then the
Employee shall immediately repay to the Company the full amount of the gross
Termination Payment before taking into account any withholdings for applicable
taxes and other amounts. For purposes of this Agreement, a non-renewal of this
Agreement shall not be deemed to have occurred if the Company offers the
Employee to renew this Agreement upon the same terms and conditions set forth
herein and the Employee rejects such offer.
5. REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this Agreement,
upon submission of proper invoices, receipts or other supporting documentation
satisfactory to the Company and in specific accordance with such guidelines as
may be established from time to time by the Board, the Employee shall be
reimbursed by the Company for all reasonable business expenses actually and
necessarily incurred by the Employee on behalf of the Company in connection with
the performance of services under this Agreement. In addition, the Company shall
provide the Employee with a non-accountable supplemental expense reimbursement
allowance equal to 7.5% of the Base Compensation of the Employee per year for
each year during the Term.
6. REPRESENTATIONS OF EMPLOYEE; RESTRICTIONS ON SALE; TERMINATION OF
UNVESTED OPTIONS AND UNVESTED STOCK.
(a) No Conflict. The Employee represents and warrants that he is not party
to, or bound by, any agreement or commitment, or subject to any restriction,
including but not limited to agreements related to previous employment
containing confidentiality or noncompete covenants, which in the future may have
a possibility of adversely affecting the business of the
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Company or the performance by the Employee of his duties under this Agreement.
The Employee further represents and warrants that he is not aware of any
criminal activity or a violation of Company policy by any employee or agent of
the Company that has not been disclosed to the Company, and covenants and agrees
that upon his obtaining any such information, the Employee shall promptly
disclose such information to a responsible officer of the Company and to the
Company's outside counsel as set forth in Section 12(f)(ii).
(b) Restrictions on Sale of Stock. The Employee further covenants and
agrees that, except as provided in the next sentence of this Section 6(b), he
will not sell, transfer, hypothecate, grant a security interest in, pledge or
otherwise dispose of any shares of capital stock of the Company, securities
convertible into capital stock of the Company and the shares of capital stock of
the Company underlying such convertible securities that are set forth on
Schedule A attached hereto or that may be granted after the date hereof
(collectively, the "Locked Shares") until the expiration of the lock-up
restrictions contained herein or as otherwise contained in the grant agreements
with respect to such Locked Shares, and such restrictions on dispositions shall
apply upon a termination of this Agreement for cause as described in Section
10(c) hereof; provided, however, that the restrictions with respect to such
dispositions as set forth in this sentence shall not apply to the Employee in
the event of a "change in control" of the Company or in the event of a
termination of this Agreement pursuant to Sections 10(a), 10(b) or 10(d) hereof.
With respect to any shares of capital stock of the Company, securities
convertible into capital stock of the Company and the shares of capital stock of
the Company underlying such convertible securities other than the Locked Shares
owned by the Employee, some of which are set forth on Schedule B attached
hereto, the Employee shall give the Company's Chairman of the Board five
business days advance written notice of any intent to sell such Common Stock. In
the event of a termination of this Agreement by the Company for cause, or a
termination of this Agreement by the Employee, any existing lock-up restrictions
still applicable on the date of termination to the Locked Shares shall be
extended for a period of five years from the date such lock-up restriction is
initially scheduled to terminate. The grants of Stock Bonus Awards and options
identified herein shall be evidenced by separate Stock Bonus Award agreements
and stock option award agreements, as applicable, between the Company and the
Employee. Notwithstanding the foregoing, the Employee shall, to the extent
permitted under applicable law, rule or regulation, be permitted to (i) transfer
the Locked Shares to his immediate family members or trusts for the benefit of
his immediate family members for estate planning purposes; provided that any
such transferees shall be subject to the restrictions applicable to the Employee
set forth herein; and (ii) in connection with any restricted stock award or
Stock Bonus Awards, dispose of shares by having the Company withhold shares of
Common Stock in order to satisfy the Employee's tax obligations.
(c) Change in Control Definition. For purposes hereof, a "change in
control" of the Company shall be deemed to have occurred in the event that: (i)
individuals who, as of the date hereof, constitute the Board cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Board shall be
considered as though such individual was a member of the Board as of the date
hereof; (ii) the Company shall have been sold by either (A) a sale of all or
substantially all its assets, or (B) a merger or consolidation, other than any
merger or consolidation pursuant to which the Company acquires another entity,
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or (C) a tender offer, whether solicited or unsolicited; or (iii) any party,
other than the Company, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of voting securities of the Company representing 40% or more of the
total voting power of all the then-outstanding voting securities of the Company.
(d) Accelerated Vesting. In addition, in the event that this Agreement is
terminated by the Company without cause pursuant to Section 10(d) hereof prior
to the expiration of the Term or upon the occurrence of a "change in control",
except as set forth herein, all grants of Common Stock granted to the Employee
pursuant to Section 4 hereof shall vest and become immediately exercisable and
saleable and any lock-up provisions applicable thereto, or to any options
granted to the Employee, shall terminate.
(e) Termination of Unvested Stock.
(i) Termination by Company. In the event that this Agreement is
terminated by the Company with cause pursuant to Section 10(c) hereof
prior to the expiration of the Term, all unvested grants of Common
Stock granted to the Employee pursuant to the terms of this Agreement
or otherwise shall terminate and be null and void.
(ii) Termination by Employee. In the event that this Agreement is
terminated by the Employee, other than due to a change in control, all
unvested grants of Common Stock granted to the Employee shall
terminate and be null and void.
7. CONFIDENTIALITY; INTELLECTUAL PROPERTY. For purposes of this Section 7,
all references to the Company shall be deemed to include all of the Company's
affiliates and subsidiaries.
(a) Confidential Information. The Employee acknowledges that as a
result of his/her employment with the Company, the Employee has and will
continue to have knowledge of, and access to, proprietary and confidential
information of the Company (in written, graphic, oral and/or other forms, and in
electronic, magnetic, paper and other media), including, without limitation,
information regarding the Company's assets, properties, business, plans,
strategies, operations, business and product development, including without
limitation, acquisitions and new lines of business, trade secrets, novel ideas,
inventions, know-how, customers, business affiliates, techniques, training
materials, algorithms, computer programs (including source code and object
code), designs, formulas, test plans, data, analyses and results, services,
costs, finances, financial statements and projections, financial and marketing
information, markets, sales, vendors, suppliers, personnel, pricing policies,
plans for future developments, acquisition or disposition strategies,
specifications, technology, research and development, and other similar
information in respect of the Company (collectively, the "Confidential
Information"), and that such information, even though it may be contributed to,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense, which are the exclusive
property of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the term of his employment with the Company, use
(whether for personal gain or otherwise), reveal, report, publish, transfer or
otherwise disclose to any
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person, corporation or other entity, any of the Confidential Information without
the prior written consent of the Company, except to responsible officers and
employees of the Company and other responsible persons who are in a contractual
or fiduciary relationship with the Company who have a need for such information
for purposes in the best interests of the Company, and except (i) for such
information which is or becomes of general public knowledge from authorized
sources other than the Employee, or (ii) as may be required by law, regulation,
legal proceeding or court order. The Employee acknowledges that the Company
would not enter into this Agreement without the assurance that all such
Confidential Information will be used for the exclusive benefit of the Company.
(b) Return of Confidential Information. Confidential Information or other
information relating to the Company's business or products which come into the
possession of the Employee shall remain the sole property of the Company, and
shall not be copied, photocopied, reprinted or otherwise reproduced or
disseminated by the Employee except in the performance of his duties as an
employee of the Company and then only at the direction of the Company. Upon the
earlier of the Company's request therefor, or the termination of the Employee's
employment by the Company, the Employee shall return to the Company all such
information, and all copies, facsimiles, replicas, photocopies, and
reproductions of them.
(c) Intellectual Property. (i) Employee expressly agrees that any products,
works of authorship, deliverables, designs, processes, drawings or inventions
produced by him at the request or on behalf of the Company (the "Materials")
shall be the property of the Company. The Company shall own all right, title and
interest in and to the Materials, and all additions to, deletions from,
alterations of or revisions to, and each part thereof, including all tools and
work in progress with respect thereto, and all other materials provided to
Employee by or at the expense of the Company. Without limiting the foregoing,
Employee hereby acknowledges that his work and services for the Company and all
results thereof are "works made for hire" for the Company as that term is
defined by the Copyright Act of 1976, as amended (the "Copyright Act"), and the
Company shall own all right, title and interest therein. The Company shall be
considered the author of the Materials for purposes of copyright and shall own
all the rights in and to the copyright to the Materials, and, as between
Employee and the Company, only the Company shall have the right to obtain
copyright registration of the Materials which the Company may do in its name,
its trade name or the name of its nominee. The Company shall have the sole and
exclusive rights to do and authorize any and all of the acts set forth in
Section 106 of the Copyright Act with respect to the Materials and any
derivatives thereof, and to secure any extensions or renewals of such
copyrights. Employee retains no rights to the Materials and agrees not to
challenge the validity of the Company's ownership of the Materials.
(ii) To the extent that the Materials are determined by a court of
competent jurisdiction or the Register of Copyrights not to be a work made for
hire and/or for purposes of ownership of any inventions or patent rights in and
to the Materials, Employee hereby irrevocably assigns, transfers, releases and
conveys to the Company all right, title and interest (including all patent,
copyright, trade secret and trademark rights) of Employee in and to the
Materials. The rights hereby conveyed to the Company hereunder include without
limitation all rights to any and all inventions relating to or described in the
Materials. Employee further agrees to execute (and to cause its principals,
employees and agents to execute) any and all documents
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deemed necessary or appropriate by the Company to effectuate a complete transfer
of ownership of all rights in the Materials to the Company throughout the world.
(iii) The Employee will promptly disclose to the Company all
Materials conceived, developed or acquired by him alone or with others during
the term of his employment with the Company, whether or not conceived during
regular working hours, through the use of Company time, material or facilities
or otherwise. Without limiting the scope of this Section 7, all such Materials
shall be the sole and exclusive property of the Company, and upon the Company's
request, the Employee shall deliver to the Company all drawings, models and
other data and records relating to such Materials. In the event any such
Materials shall be deemed by the Company to be patentable or copyrightable, the
Employee shall, at the expense of the Company, assist the Company in obtaining
any patents or copyrights thereon and execute all documents and do all other
things necessary or proper to obtain letters patent and copyright registrations
and to vest the Company with full title thereto.
(iv) The Employee irrevocably designates and appoints the Company
and each of its duly authorized officers or agents, individually, as his agent
and attorney-in-fact, to act for and in his behalf and stead to execute and file
any such document and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, or other rights
or protection with the same force and effect as if executed and delivered by the
Employee.
8. NON-COMPETITION. For purposes of this Section 8, all references to the
Company shall be deemed to include all of the Company's affiliates and
subsidiaries. The Employee will not utilize his special knowledge of the
business of the Company and his relationships with customers, suppliers of the
Company and others to compete with the Company. During his employment by the
Company and for a period of (i) eighteen months after the expiration of this
Agreement without renewal or (ii) three years after the termination of this
Agreement for any reason (the "Restricted Period"), the Employee shall not
engage, directly or indirectly, or have an interest, directly or indirectly,
anywhere in the United States of America or any other geographic area where the
Company does business or in which its products or services are marketed, alone
or in association with others, as principal, officer, agent, employee, director,
partner or stockholder (except with respect to his employment by the Company),
or through the investment of capital, lending of money or property, rendering of
services or otherwise, in any business competitive with or substantially similar
to that engaged in by the Company or any vendor, supplier or distributor of the
Company during the term of Employee's employment by the Company, or any line of
business or acquisition that the Company either (i) contemplates entering into,
whether or not actually entered into, or (ii) has obtained due diligence or
other information on during Employee's employment with the Company (it being
understood hereby, that the ownership by the Employee of 5% or less of the stock
of any company listed on a national securities exchange shall not be deemed a
violation of this Section 8). For a period of three years following the
expiration of this Agreement without renewal or the termination of this
Agreement for any reason, the Employee shall not, nor shall he permit any of his
employees, agents or others under his control to, directly or indirectly, on
behalf of himself or any other person, (i) call upon, accept business from, or
solicit the business of any person who is, or who had been at any time during
the preceding two (2) years a customer of the Company or any successor to the
business of the Company, or otherwise divert or attempt to divert any business
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from the Company or any such successor, or (ii) directly or indirectly recruit
or otherwise solicit or induce any person who is an employee of, or otherwise
engaged by, the Company or any successor to the business of the Company to
terminate his or her employment or other relationship with the Company or such
successor, or hire any person who has left the employ of the Company or any such
successor during the preceding two (2) years. Employee further agrees that if
any such customer contacts Employee during the Restricted Period in respect of
doing business with Employee, Employee will advise such customer of the
restrictions on his ability to do business with such customer contained herein.
The Employee shall not at any time, directly or indirectly, use or purport to
authorize any person to use any name, xxxx, logo, trade dress or other
identifying words or images which are the same as or similar to those used at
any time by the Company in connection with any product or service, whether or
not such use would be in a business competitive with that of the Company. Any
breach or violation by the Employee of the provisions of this Section 8 shall
toll the running of any time periods set forth in this Section 8 for the
duration of any such breach or violation.
9. REMEDIES. The restrictions set forth in Sections 7 and 8 are considered
by the parties to be fair and reasonable. The Employee acknowledges that the
restrictions contained in Sections 7 and 8 will not prevent him from earning a
livelihood. The Employee further acknowledges that the Company would be
irreparably harmed and that monetary damages would not provide an adequate
remedy in the event of a breach of the provisions of Sections 7 or 8.
Accordingly, the Employee agrees that, in addition to any other remedies
available to the Company, the Company (i) shall be entitled to specific
performance, injunction, and other equitable relief to secure the enforcement of
such provisions, (ii) shall not be required to post bond in connection with
seeking any such equitable remedies, and (iii) shall be entitled to receive
reimbursement from the Employee for all attorneys' fees and expenses incurred by
the Company in enforcing such provisions. If any provisions of Sections 7, 8, or
9 relating to the time period, scope of activities or geographic area of
restrictions is declared by a court of competent jurisdiction to exceed the
maximum permissible time period, scope of activities or geographic area, the
maximum time period, scope of activities or geographic area, as the case may be,
shall be reduced to the maximum which such court deems enforceable. If any
provisions of Sections 7, 8, or 9 other than those described in the preceding
sentence are adjudicated to be invalid or unenforceable, the invalid or
unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which adjudication is made) in such manner as to render them
enforceable and to effectuate as nearly as possible the original intentions and
agreement of the parties.
10. TERMINATION. This Agreement may be terminated prior to the expiration
of the Term set forth in Section 2 upon the occurrence of any of the events set
forth in, and subject to the terms of, this Section 10.
(a) Death. This Agreement will terminate immediately and automatically upon
the death of the Employee.
(b) Disability. This Agreement may be terminated at the Company's option,
immediately upon notice to the Employee, if the Employee shall suffer a
permanent disability. For the purposes of this Agreement, the term "permanent
disability" shall mean the Employee's inability to perform his duties under this
Agreement for a period of ninety (90) consecutive days
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or for an aggregate of one hundred twenty (120) days, whether or not
consecutive, in any twelve (12) month period, due to illness, accident or any
other physical or mental incapacity, as reasonably determined by the Board. In
the event that a dispute arises with respect to the disability of the Employee,
the parties shall each select a physician licensed to practice in the State of
Florida to make such a determination. If the two (2) physicians selected cannot
agree on a determination, they will mutually select a third physician and the
decision of the majority of the three (3) physicians will be binding.
(c) Cause. This Agreement may be terminated at the Company's option,
immediately upon notice to the Employee, upon: (i) breach by the Employee of any
material provision of this Agreement and the expiration of a 10-day cure period
for such breach after written notice thereof has been given to the Employee
(which cure period shall not be applicable to clauses (ii) through (v) of this
Section 10(c)); (ii) gross negligence or willful misconduct of the Employee in
connection with the performance of his duties under this Agreement; (iii)
Employee's failure to perform any reasonable directive of the Chief Executive
Officer of the Company or the Board; (iv) fraud, criminal conduct, dishonesty or
embezzlement by the Employee; or (v) Employee's misappropriation for personal
use of any assets (having in excess of nominal value) or business opportunities
of the Company.
(d) Without Cause. This Agreement may be terminated at any time by the
Company without cause immediately upon giving written notice to the Employee of
such termination. In such event, the Employee shall be entitled to receive the
Termination Payment in accordance with the provisions of Section 4(f) hereof.
11. ADDITIONAL DISCRETIONARY BENEFITS. At the sole and absolute discretion
of the Board of Directors of the Company, the Board of Directors may grant to
the Employee additional benefits, including, without limitation, (i) the right
to receive a gross-up payment to the extent of any applicable excise taxes
imposed by Section 4999 of the Code; and (ii) the right to participate in any
Supplemental Executive Retirement Plan that may be adopted by the Board of
Directors in its sole and absolute discretion.
12. MISCELLANEOUS.
(a) Survival. The provisions of Sections 4(d) and (f), 6(b), 7, 8, 9, 11
and 12 shall survive the termination of this Agreement.
(b) Entire Agreement. This Agreement sets forth the entire understanding of
the parties and merges and supersedes any prior or contemporaneous agreements
between the parties pertaining to the subject matter hereof.
(c) Modification. This Agreement may not be modified or terminated orally,
and no modification or waiver of any of the provisions hereof shall be binding
unless in writing and signed by the party against whom the same is sought to be
enforced.
(d) Waiver. Failure of a party to enforce one or more of the provisions of
this Agreement or to require at any time performance of any of the obligations
hereof shall not be construed to be a waiver of such provisions by such party
nor to in any way affect the validity of
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this Agreement or such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.
(e) Successors and Assigns. Neither party shall have the right to assign
this Agreement, or any rights or obligations hereunder, without the consent of
the other party; provided, however, that upon the sale of all or substantially
all of the assets, business and goodwill of the Company to another company, or
upon the merger or consolidation of the Company with another company, this
Agreement shall inure to the benefit of, and be binding upon, both Employee and
the company purchasing such assets, business and goodwill, or surviving such
merger or consolidation, as the case may be, in the same manner and to the same
extent as though such other company were the Company; and provided, further,
that the Company shall have the right to assign this Agreement to any affiliate
or subsidiary of the Company. Subject to the foregoing, this Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their legal
representatives, heirs, successors and permitted assigns.
(f) Communications. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been given
at the time personally delivered or when mailed in any United States post office
enclosed in a registered or certified postage prepaid envelope and addressed to
the addresses set forth below, or to such other address as any party may specify
by notice to the other party; provided, however, that any notice of change of
address shall be effective only upon receipt:
(i) To the Company: Armor Holdings, Inc.
00000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
(ii) With a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
(iii) To the Employee: Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
(g) Severability. If any provision of this Agreement is held to be invalid
or unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall not affect the validity and enforceability of the other
provisions of this Agreement and the provision held to be invalid or
unenforceable shall be enforced as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
(h) Jurisdiction; Venue; Waiver of Jury Trial. This Agreement shall be
subject to the exclusive jurisdiction of the courts located in New York County,
New York. Any breach of any provisions of this Agreement shall be deemed to be a
breach occurring in the State of New York by virtue of a failure to perform an
act required to be performed in the State of New York, and
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the parties irrevocably and expressly agree to submit to the jurisdiction of the
courts located in New York County, New York for the purpose of resolving any
disputes among them relating to this Agreement or the transactions contemplated
by this Agreement and waive any objections on the grounds of forum non
conveniens or otherwise. The parties hereto agree to service of process by
certified or registered United States mail, postage prepaid, addressed to the
party in question. The parties hereto irrevocably waive the right to a jury
trial in connection with any action arising under this Agreement or the
employment of Employee.
(i) Governing Law. This Agreement is made and executed and shall be
governed by the laws of the State of New York, without regard to the conflicts
of law principles thereof.
(j) No Third-Party Beneficiaries. Each of the provisions of this Agreement
is for the sole and exclusive benefit of the parties hereto and shall not be
deemed for the benefit of any other person or entity.
(k) Code Section 409A. The parties to this Agreement intend that the
Agreement complies with Section 409A of the Code, where applicable, and this
Agreement shall be interpreted in a manner consistent with that intention. To
the extent not otherwise provided by this Agreement, and solely to the extent
required by Section 409A of the Code, no payment or other distribution required
to be made to the Employee hereunder (including any payment of cash, any
transfer of property and any provision of taxable benefits) as a result of his
termination of employment with the Company shall be made earlier than the date
that is six (6) months and one day following the date on which the Employee
separates from service with the Company and its affiliates (within the meaning
of Section 409A of the Code).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth above.
ARMOR HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
and Chairman of the Board
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
XXXXXX X. XXXXXXXX
