Employment Agreement - Armor Holdings Inc. and David W. Watson
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of October
29, 1997 between ARMOR HOLDINGS, INC., a Delaware corporation (the "Company");
and David W. Watson, (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.
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. Term. The term of this Agreement shall be three (3) years,
and shall be deemed to have commenced on August 25, 1997 and shall end on
August 24, 2000 (the "Initial Term"), subject to earlier termination pursuant
to the provisions of Section 9 herein. The employment of the Employee shall
automatically continue hereunder following the Initial Term for successive one
(l) 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.
2. Duties. During the term of this Agreement, the Employee
shall serve as the Chief Financial Officer and Treasurer of the Company and
shall perform all duties commensurate with his position and as may be assigned
to him by the Chief Executive 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
3. 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 $140,000 per year (the "Base Compensation"). The
Employee's Base Compensation shall be payable in accordance with the normal
payroll practices of the Company. In addition, the Employee will be entitled,
for the first twelve months of his employment, to a bonus of at least $20,000.
After the initial twelve month period, the Employee will be entitled to
participate in the normal bonus plan of
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the Company but the amount of any bonus will be at the absolute discretion of
the Board of Directors.
The Company shall also pay to the Employee a one-time relocation bonus
of up to a maximum of $50,000 (the "Relocation Bonus"). The Employee's Base
Compensation, guaranteed bonus and the Relocation Bonus 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 incentive
stock options under the Company's incentive stock option plan to purchase
75,000 shares of the Company's common stock. The grant date shall be as of
September 2, 1997, subject to the approval of the Board of Directors, and the
exercise price per share shall be equal to $10.4375, the market price of the
Company's common stock on the date of grant. Such options shall vest in equal
1/3 increments over a period of three years and shall not be exercisable until
September 2, 2000; provided, however, that upon a breach by the Employee of the
provisions of Sections 6 or 7 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, then the
entire amount of such options shall vest and become exercisable on the date of
such termination. In the event of a "change in control" (as hereinafter
defined) of the Company, all of such options shall vest and become exercisable
on the effective date of such change in control. For purposes hereof, "change
in control" of the Company shall mean the sale of all of the shares of capital
stock of the Company, or the sale of all or substantially al1 of the assets of
the Company (other than a transfer of assets to a subsidiary of the Company) or
the merger or consolidation of the Company (other than for the purpose of (x)
consummating an acquisition by the Company or (y) effecting a restructuring of
the Company), the effect of any of which is to result in the sale of the
Company. 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 9 hereof, as the
Compensation Committee of the Board of Directors of the Company may, in its
sole and absolute discretion, determine.
4. 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
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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.
5. 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 non-compete 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.
6. Confidentiality. For purposes of this Section 6, 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 and its subsidiaries, whether now
existing or hereafter acquired or established 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 return to the Company all Confidential Information in his possession
or control, including but not limited to drawings, manuals, computer printouts,
computer diskettes, disks, data, files, lists, memoranda, letters, notes,
notebooks, reports and other writings 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.
7. Noncompetition. For purposes of this Section 7, all
references to the Company shall be deemed to include the Company's affiliates
and subsidiaries. The
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Employee will not utilize his special knowledge of the business of the Company
and his relationships with customers, clients or 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 or
services 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: (i) bullet and projectile resistant vests and other associated
armor products; (ii) narcotic identification and evidence collection kits;
(iii) less-than-lethal munitions, including, but not limited to, tear gas and
pepper sprays; (iv) military or police garments or equipment; (v) the provision
of security consulting or guarding services; or (vi) any other business engaged
in by the Company at the time in question (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
7); provided, however, that in the event the Employee is terminated without
cause, then the provisions of this Section 7 will continue to be applicable to
the Employee. 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, (x) 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 or client 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 (y) 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 7 shall toll the
running of any time periods set forth in this Section 7 for the duration of any
such breach or violation.
8. Remedies. The restrictions set forth in Sections 6 and 7
are considered by the parties to be fair and reasonable. The Employee
acknowledges that the restrictions contained in Sections 6 and 7 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 6 or 7. Accordingly, the Employee agrees that, in addition to any
other remedies
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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 6, 7 or 8 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 6, 7 or 8 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.
9. Termination. This Agreement may be terminated prior to
the expiration of the term set forth in Section 1 upon the occurrence of any
of the events set forth in, and subject to the terms of, this Section 9.
(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 the entire amount
of options for the purchase of common stock of the Company granted to the
Employee shall vest and become exercisable by the estate of the Employee on the
date of such death.
(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 the
entire amount of options for the purchase of common stock of the Company
granted to the Employee shall vest and become exercisable by the Employee on
the date of such termination.
(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.
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(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 3(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 employer or employment contract during such
period.
10. Miscellaneous.
(a) Survival. The provisions of Sections 6, 7 and 8
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.
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(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: Armor Holdings, Inc.
13386 International Parkway
Jacksonville, FL 32218
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: David W. Watson
1401 South First Street, Apt. #F
Jacksonville Beach, FL 32250
(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 provisions
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.
ARMOR HOLDINGS, INC.
By: /s/ Jonathan M. Spiller
______________________________
Jonathan M. Spiller
President and Chief Executive Officer
/s/ David W. Watson
_____________________________
David W. Watson
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