Employment Agreement - American Body Armor & Equipment Inc. and Richard T. Bistrong
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 18, 1996,
between AMERICAN BODY ARMOR & EQUIPMENT, INC., a Florida corporation (the
"Company"); and RICHARD T. BISTRONG (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Employee and to be assured
of his services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on such
terms and conditions; and
WHEREAS, the parties desire to terminate the Employment Agreement,
dated as of February 6, 1995, between the Company and the Employee (the "1995
Employment Agreement") and to have the terms and provisions of this Agreement
govern their respective rights and obligations.
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. Termination of 1995 Employment Agreement; Employment. The 1995
Employment Agreement is hereby terminated in all respects and shall be of no
further force or effect, and from and after the date hereof, the terms and
provisions of this Agreement shall govern the respective rights and obligations
of the parties hereto with respect to the subject matter hereof. The Company
hereby employs the Employee as the Vice President -- Sales and Marketing of the
Company, and the Employee accepts such employment, upon the terms and subject to
the conditions set forth in this Agreement.
2. Term. The term of this Agreement shall be three (3) years,
commencing on the date hereof and ending on January 17, 1999 (the "Initial
Term"), subject to earlier termination pursuant to the provisions of Section 10
herein. The employment of the Employee shall automatically continue hereunder
following the Initial Term for successive one (1) year periods (the "Renewal
Terms") (on terms to be mutually agreed upon by the parties), unless the Company
or the Employee gives notice to the other at least sixty (60) days prior to the
end of the Initial Term of its or his election to terminate this Agreement at
the end of the Initial Term. Subsequent to the Initial Term, the employment of
the Employee hereunder may be terminated at the end of any Renewal Term by
delivery by either the Employee or the Company of a written notice to the
other party at least sixty (60) days prior to the end of any Renewal Term.
3. Duties. During the term of this Agreement, the Employee shall serve
as the Vice President -- Sales and Marketing of the Company and shall perform
all duties commensurate with his position and as may be assigned to him by an
officer of the Company. 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.
4. Compensation and Benefits. (a) During the term of this Agreement,
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 $120,000 per year (the "Base Compensation"). The Employee's salary
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) During the term of this Agreement, 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. 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.
(c) The Employee shall be entitled to receive non-qualified options to
purchase 21,250 shares of the Company's common stock and incentive stock
options to purchase 28,750 shares of the Company's common stock, in each case
at an exercise price of $.97 per share of common stock. Such options shall be
exercisable for a period of eight (8) years from the date of grant, and all of
such options shall vest on January 18, 1999; provided, however, that upon a
breach by the Employee of the provisions of Sections 7 or 8 hereof, the
Employee shall have no right to exercise any such options granted hereunder or
otherwise held by the Employee; and provided, further, that in the event that
this Agreement is terminated by the Company without cause prior to the
expiration of the Initial Term, or a "change in control" (as hereinafter
defined) occurs, then a pro-rata number of such options shall vest on the date
of such termination or change in control, as the case may be, based upon the
number of months elapsed under this Agreement in relation to the total number of
months during the Initial Term of this Agreement, and the balance of such
options shall no longer be exercisable by the Employee, and shall terminate.
The Employee shall also be entitled to participate, at the sole and absolute
discretion of the Compensation Committee of the Board of Directors of the
Company, in the Company's incentive stock option plan. Such participation
shall be based upon, among other things, the Employee's performance and the
Company's performance. In addition, the Employee may be entitled, during the
term of this Agreement, to receive such additional options, at such exercise
prices and other terms, and/or to participate in such other bonus plans,
whether during the term of this Agreement or upon termination pursuant to
Section 10 hereof, as the Compensation Committee of the Board of Directors of
the Company may, in its sole and absolute discretion, determine.
(d) The Company shall provide the Employee an automobile allowance of
$600 per month.
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 Company's Board of
Directors, 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.
6. Representation of Employee. 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
Company or the performance by the Employee of his duties under this Agreement.
The Employee further covenants and agrees that except as herein provided, he
will not sell, transfer, assign, pledge or otherwise dispose of any shares of
capital stock or securities convertible into capital stock of the Company until
January 18, 1999; 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. For purposes hereof, a
"change in control" of the Company shall be deemed to have occurred in the event
that: (i) (A) Warren B. Kanders ("Kanders") is no longer Chairman of the Board
of Directors of the Company, or (B) Kanders and entities controlled by Kanders
do not, through the ownership of voting securities or otherwise, control the
election of the Board of Directors of the Company, and (ii) Kanders and entities
controlled by Kanders own in the aggregate less than 25% of the issued and
outstanding shares of common stock of the Company.
7. Confidentiality. For purposes of this Section 7, all references
to the Company shall be deemed to include the Company's affiliates and
subsidiaries.
(a) Confidential Information. The Employee acknowledges that as a
result of his employment with the Company, the Employee has and will continue
to have knowledge of, and access to, proprietary and confidential information
of the Company, including, without limitation, research and development plans
and results, software, data bases, technology, inventions, trade secrets,
technical information, know-how, plans, specifications, methods of operations,
product information, product availability, pricing information, financial,
business and marketing information and plans and the identity of customers and
suppliers (collectively, the "Confidential Information"), and that such
information, even though it may be contributed, 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 this Agreement, use, reveal, report, publish, transfer or otherwise
disclose to any 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 and who have
a need for such information for purposes in the best interests of the Company,
and except for such information which is or becomes of general public knowledge
from authorized sources other than the Employee. The Employee acknowledges that
the Company would not enter into this Agreement without the assurance that all
such confidential and proprietary information will be used for the exclusive
benefit of the Company.
(b) Return of Confidential Information. Upon the termination of
Employee's employment with the Company, the Employee shall promptly deliver to
the Company all drawings, manuals, letters, notes, notebooks, reports and
copies thereof and all other materials relating to the Company's business,
including without limitation any materials incorporating Confidential
Information, which are in the Employee's possession or control.
8. Noncompetition. For purposes of this Section 8, all references to
the Company shall be deemed to include 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 the term of this
Agreement and for a period of one (1) year after the expiration or termination
of this Agreement, 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 are marketed, alone or in association with others, as principal,
officer, agent, employee, director, partner, stockholder or lender (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, including without limitation, the development, manufacture and
distribution of bullet and projectile resistant garments, including bullet
resistant and sharp instrument penetration resistant vests, bullet resistant
blankets, bomb disposal suits and helmets, bomb protection and disposal
equipment and load bearing vests, and other ballistic protection and security
equipment, including explosive ordnance device (EOD) handling and detection
equipment, EOD suppression and disposal equipment, helmets, face masks,
shields, hard armor ballistic plates, customized armor for vehicles and other
custom armored products, and related products, or any other business engaged
in by the Company at the time in question for which the Employee is directly
or indirectly responsible (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);
provided, however, that in the event the Employee is terminated without cause,
then the provisions of this Section 8 will continue to be applicable to the
Employee, except that, in the event that Base Compensation is not paid to the
Employee pursuant to Section 10(d) hereof, then the restrictions on sale of
the Company's securities contained in Section 6 hereof shall not be applicable
to the extent necessary to allow the Employee to sell a sufficient number of
shares of common stock of the Company as will result in gross proceeds to the
Employee equal to his Base Compensation during such one (1) year period as
described in this Section 8, less any salary, commissions, wages or other
income received by the Employee from any other source during such period. During
the same period, the Employee shall not, and shall not 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 years, a customer of the Company or any successor to the
business of the Company, or otherwise divert or attempt to divert any business
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 years. The Employee shall not at any time,
directly or indirectly, use or purport to authorize any person to use any name,
mark, 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 Section 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 shall be entitled to injunctive and other
equitable relief to secure the enforcement of these provisions, and shall be
entitled to receive reimbursement from the Employee for all attorneys' fees and
expenses incurred by the Company in enforcing these 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 such 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. In the event that this
Agreement is terminated upon the death of the Employee, then a pro-rata number
of options for the purchase of common stock of the Company granted to the
Employee, based upon the number of months elapsed under this Agreement in
relation to the total number of months during the Initial Term of this
Agreement, shall accrue to the estate of the Employee (the "Accrued Death
Options"), and such Accrued Death Options shall vest on January 18, 1999, and
the balance of any options shall no longer be exercisable by the Employee or his
estate, and shall terminate.
(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 90 consecutive days or for an
aggregate of 120 days, whether or not consecutive, in any twelve month period,
due to illness, accident or any other physical or mental incapacity, as solely
determined by the Board of Directors of the Company. In the event that this
Agreement is terminated upon the permanent disability of the Employee, then a
pro-rata number of options for the purchase of common stock of the Company
granted to the Employee, based upon the number of months elapsed under this
Agreement in relation to the total number of months during the Initial Term
of this Agreement, shall accrue to the Employee (the "Accrued Disability
Options"), and such Accrued Disability Options shall vest on January 18, 1999,
and the balance of any options shall no longer be exercisable by the Employee,
and shall terminate.
(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; (ii) gross negligence or willful
misconduct of the Employee in connection with the performance of his duties
under this Agreement, or Employee's willful refusal to perform any of his
duties or responsibilities required pursuant to this Agreement; (iii) fraud,
criminal conduct, dishonesty or embezzlement by the Employee; or (iv) Employee's
misappropriation for personal use of assets or business opportunities of the
Company.
(d) Without Cause. This Agreement may be terminated at any time by
the Company without cause upon giving the Employee three (3) days prior
written notice of such termination. In such event, the Employee shall be
entitled to receive his Base Compensation in accordance with the provisions of
Section 4(a) hereof throughout the balance of the term of this Agreement,
reduced, dollar for dollar, with any salary, commissions, wages or other
income received by him from any other source during such period.
11. Miscellaneous.
(a) Survival. The provisions of Sections 7, 8, and 9 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, termination or attempted 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; provided, however, that
Employee's compensation may be increased at any time by the Company without
in any way affecting any of the other terms and conditions of this Agreement,
which in all other respects shall remain in full force and effect.
(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 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
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.
To the Company: American Body Armor &
Equipment, Inc.
85 Nassau Place
Yulee, Florida 32097
Attn.: Jonathan M. Spiller
With a copy to: Kane Kessler, P.C.
1350 Avenue of the Americas
New York, New York 10019
Attn.: Robert L. Lawrence, Esq.
To the Employee: Richard T. Bistrong
4503 Old Lantern Court
Ponte Vedra Beach, FL 32082
(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. This Agreement shall be subject to the
exclusive jurisdiction of the courts of New York County, New York. Any breach
of any provision 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 the parties irrevocably and expressly
agree to submit to the jurisdiction of the courts of 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.
(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.
IN WITNESS WHEREOF, each of the parties hereto have duly executed this
Agreement as of the date set forth above.
AMERICAN BODY ARMOR & EQUIPMENT, INC.
By: /s/Jonathan M. Spiller
Name: Jonathan M. Spiller
Title: President and
Chief Executive Officer
/s/ Richard T. Bistrong
Richard T. Bistrong