Employment Agreement - American Body Armor & Equipment Inc. and Jonathan M. Spiller
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January
18, 1996, between AMERICAN BODY ARMOR & EQUIPMENT, INC., a Florida
corporation (the "Company"); and JONATHAN M. SPILLER (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 January 1, 1994, between the Company and the
Employee, as amended (the "1994 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 1994 Employment Agreement; Employment. The
1994 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 President
and Chief Executive Officer 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 President and Chief Executive Officer of the Company
and shall perform all duties commensurate with his position and as may
be assigned to him by the Board of Directors 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 $160,000 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 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 with a leased
automobile for the Employee's business use. In addition, the Company shall
reimburse the Employee for the Employee's dues at Marsh Landing Country Club.
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. In addition, in the event that
this Agreement is terminated by the Company without cause prior to the
expiration of the Initial Term, or upon a change in control, a pro-rata
number of options, if any, for the purchase of common stock of the
Company granted to the Employee 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.
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
Emmployee 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.: Warren B. Kanders
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: Jonathan M. Spiller
128 Lamplighter Lane
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/Richard T. Bistrong
------------------------------------
Name: Richard T. Bistrong
Title: Vice President-
Sales Marketing
/s/Jonathan M. Spiller
-----------------------------------
Jonathan M. Spiller