Employment Agreement - Engineered Support Systems Inc. and Larry K. Brewer
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 1st day of May, 2001, by and between ENGINEERED SUPPORT SYSTEMS, INC.,
(hereinafter referred to as "Employer") and LARRY K. BREWER (hereinafter
referred to as "Employee") (Employer and Employee are sometimes hereinafter
individually referred to as a "Party" and collectively referred to as the
"Parties").
W I T N E S S E T H:
WHEREAS, Employee desires to be employed by or to continue employment
with Employer and Employer desires to employ or continue to employ Employee
under the terms and conditions set forth in this Agreement; and,
WHEREAS, it is the Employer's intention to employ Employee upon the
terms and conditions herein, which recognize and compensate Employee for the
obligations of Employee undertaken hereunder, including specifically, but not by
way of limitation, the covenants of Employee not to compete with the business of
Employer, as provided in paragraph 6.
NOW, THEREFORE, in consideration of the foregoing and the promises and
agreements herein contained and other good valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, Employer and Employee agree as
follows:
1. EMPLOYMENT. Employee hereby accepts employment from Employer upon
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the terms and conditions hereinafter set forth.
2. TERM OF EMPLOYMENT. The term of Employee's employment under this
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Agreement shall be for the period commencing June 1, 2001 and ending May 31,
2003 (hereinafter "Initial Term"). The Employee's employment may be terminated
prior to the expiration of the Initial Term or any extension term of this
Agreement upon the happening of one or more of the following:
(a) The death of Employee if actively employed by the Company at the
time of death;
(b) The Employee's Disability which for purposes hereof shall mean
the Employee's failure substantially to discharge Employee's duties under
this Agreement for ninety (90) consecutive days or one hundred twenty (120) days
in any calendar year, whether or not consecutive, as a result of an injury,
disease, sickness or other physical or mental incapacity; or,
(c) For "cause" immediately upon written notice from the Employer.
For purposes of this Agreement, the term "cause" shall mean the
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Employee's breach or violation of or failure to perform any of the material
terms and conditions of this Agreement or such other conduct or action by the
Employee which in the Employer's sole but reasonable opinion, materially and
adversely affects the business or reputation of the Employer, which shall
include specifically, but not by way of limitation, intentional or negligent
conduct or activity inconsistent with or proscribed by federal or state criminal
statute or regulation or express Employer policy pertaining to a contract with
the United States Government, or any act of dishonesty or disloyalty or breach
of trust against Employer.
(d) By the Employer, without cause, by written notice, at any time.
In this circumstance only and subject to paragraph 19 hereof, the Employee
will be entitled to a severance allowance as hereinafter set forth. The
severance allowance shall be paid over a twelve (12) month period. During the
first six (6) months following the date of his termination, the Employee shall
be paid his then current monthly Base Salary (as hereinafter defined). During
the second six months following the date of his termination, the Employee shall
be paid fifty percent (50%) of his then current monthly Base Salary.
Notwithstanding anything in this provision or in this Agreement to the contrary,
in the event the Employee becomes gainfully employed during this twelve (12)
month period, all remaining payments that may be due under this provision, shall
be reduced by fifty percent (50%).
(e) After the Initial Term (if this Agreement shall be extended),
by the Employee, at any time upon not less than thirty (30) days nor more
than sixty (60) days prior written notice to the Employer.
Except as otherwise provided in paragraph 2(d) above, in the event
of the termination of the Employee's employment hereunder, for any reason,
Employee shall only be entitled to receive his Base Salary in accordance with
the Employer's regular payroll schedule through the effective date of such
termination and thereafter, the Employee shall have no further entitlement to
compensation hereunder.
The Employee understands and agrees that in the event this
Agreement expires by its terms or in the event either party terminates
Employee's employment hereunder for any reason whatsoever, the restrictive
covenants set forth in paragraph 6 hereof and the remedies provision in
paragraph 10 hereof shall remain in full force and effect and shall survive
the expiration and termination of all other terms of this Agreement.
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The Initial Term of this Agreement shall not be extended except by
mutual written agreement of the Parties.
3. JOB DUTIES. Upon the commencement of the Initial Term, the Employer
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agrees to employ the Employee as the Vice President-Business Development of
Employer under the administrative direction of and reporting to such person(s)
as Employer's Board of Directors ("Board") may from time to time direct.
Employee shall perform such duties and tasks as are customarily incident to his
position as well as such other duties and tasks as the Board may from time to
time request or as may be set forth in a job description for the position held
by Employee, as the same may from time to time be modified by Employer.
If there is a Change in Control (as that term is hereinafter defined
in paragraph 19 hereof) of Employer, the Employee may be transferred from
employment with the Employer to employment with another corporation that is
affiliated with the Employer prior to the date on which a Change in Control
occurs, in which case, this other corporation or affiliate shall be substituted
for the Employer in this Agreement, and no termination of the Employee's
employment shall be deemed to have occurred. In the event of such transfer,
Employee shall hold the same or a similar executive position with the other
corporation or affiliate to whom he has been transferred and all other terms and
conditions of this Agreement shall remain in full force and effect.
4. COMPENSATION.
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(a) Subject to the other provisions of this Agreement, and in
consideration of the services to be rendered hereunder, Employer agrees to
compensate Employee with a base salary of One Hundred Thirty-Eight Thousand
Dollars ($138,000.00) per year ("Base Salary"), payable in accordance with
Employer's regular payroll schedule. In addition to the Base Salary, the
Employer may pay the Employee a bonus or bonuses from time to time, which the
Board determines in their sole discretion based on such facts and circumstances
that it shall see fit to consider; provided, however, in no event, shall the
cumulative yearly total of bonuses paid to the Employee in any fiscal year of
the Employer, during the term of this Agreement be less than Thirty-Five
Thousand Dollars ($35,000.00) or exceed fifty percent (50%) of the Employee's
Base Salary.
(b) During the term of this Agreement, Employer will pay or
reimburse Employee for those reasonable and necessary expenses that are incurred
by Employee in the interest of the business of Employer in accordance with the
policy of the Employer and as authorized by the Board.
5. RELATIONSHIP OF THE PARTIES. It is understood and agreed that
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Employee stands in a confidential and fiduciary relationship with Employer and
has special obligations to protect, preserve, enhance, and promote the best
interests of the Employer. Therefore, Employer is relying on this confidential
relationship and on Employee's agreement and commitment that he will devote
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whatever time and attention as is necessary to the business of Employer and will
not during the term of this Agreement, nor any extension hereof, without
Employer's knowledge and written consent, be or become engaged in any other
business activity whether or not such business activity is pursued for gain,
profit, or other proprietary advantage. The foregoing shall not be construed as
preventing Employee from devoting reasonable (but limited) amounts of his time
to civic, community or charitable pursuits, or to personal investment, provided
that such activities do not interfere with Employee's performance of his
responsibilities and duties hereunder or otherwise present a conflict of
interest with respect to Employee's responsibilities to the Employer. A conflict
of interest exists if Employee either directly or indirectly has an undisclosed
financial interest in any company, its affiliates, divisions, subsidiaries or
associates, or in the business opportunities or ventures of any such company or
if it involves a substantial or meaningful investment or other interest in a
business association or other concern which engages in competition with the
Employer. For purposes hereof, a conflict shall not be considered to exist if
the competitor company, other entity or concern is a former employer of the
Employee and the investment in question represents a part of his compensation
package from such former employer or such other investment approved in writing
by Employer.
6. COVENANTS OF EMPLOYEE.
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(a) So long as this Agreement shall be in effect and at all times
after the termination hereof, for whatever reason, Employee covenants,
warrants, and agrees that Employee will not (except as required in Employee's
duties to Employer), in any manner directly or indirectly, actually or attempt
to:
(i) Disclose or divulge to any person, entity, firm or company
whatsoever, or use or utilize for Employee's own benefit or
for the benefit of any third person or concern, or for any
reason inconsistent with the purpose of this Agreement or
inconsistent with Employee's confidential and fiduciary
relationship with Employer, any trade secrets, formulae,
know-how, management and business methods, techniques or
opportunities, customer information, supplier information,
business or financial plans and materials or other information
or data of Employer, and without regard to whether all of the
foregoing matters would otherwise be deemed confidential,
proprietary, material or important, the parties hereto hereby
stipulate, as between them, the foregoing are important,
material, propriety, and confidential and greatly affect the
effective and successful conduct of the business and goodwill
of Employer, and the parties further stipulate that any breach
or evasion of the terms of this subparagraph (a) shall be a
material breach of this Agreement.
(b) During the term of this Agreement and for a period of two
(2) years after the Employee's termination, for whatever reason, Employee
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covenants, warrants, and agrees that Employee will not (except as required in
Employee's duties to Employer), in any manner directly or indirectly, actually
or attempt to:
(i) Solicit, divert, take away from, have contact or interfere
with any of the customers, trade business, patronage,
employees or agents of Employer, or in any manner engage in
any conduct or activity including, but not limited to, verbal
representations or declarations, that would or could be
construed or are intended as a disparagement of Employer's
interests; and
(ii) Engage, within the United States, directly or indirectly,
either personally or as an employee, partner, associate,
consultant, officer, manager, agent, representative, advisor,
investor or stockholder or otherwise, or by means of any corporate
or other entity or device, in any business which is "competitive"
(as hereinafter defined) with the business of Employer.
(c) For purposes hereof, a business will be deemed
"competitive" if any of its products or product processes are substantially
similar in use, design or application to the present and future products or
product processes of Employer or similar to any product with respect to which
Employer as of the date hereof has formulated a definitive interest. The
Employee agrees that during the term of this Agreement and for the term of the
restrictive covenants set forth herein, he will promptly communicate to Employer
the identity of all companies, persons or concerns with whom Employee is
considering employment, association or other relationship along with other
information as to the products of such company, person or concern sufficient in
detail to permit Employer to make a determination as to whether or not
competition exists. In order to preserve its rights under this Agreement, the
Employer may advise any third party with whom the Employee may consider,
establish or contract a relationship of the existence and terms of this
Agreement, and the Employee authorizes and consents to such disclosure, and
Company shall have no liability for so acting.
(d) All of the covenants of Employee contained in this
paragraph 6 shall be construed as agreements independent of any other provision
of this Agreement and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of these covenants.
(e) It is the intention of the parties to restrict the
activities of Employee under this paragraph 6 only to the extent necessary for
the protection of legitimate business interests of Employer, and the parties
specifically covenant and agree that should any of the clauses or provisions set
forth herein, under any set of competent jurisdiction adjudicated to be either
illegal, invalid,
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or unenforceable under present or future law, then, and in that event, it is the
intention of the parties hereto that, in lieu of each such clause or provision,
there shall be substituted or added, and there is hereby substituted and added a
provision as similar in terms to such illegal, invalid, or unenforceable clause
or provision as may be legal, valid, and enforceable.
7. ESSI SECURITIES. Employee agrees to comply fully and faithfully
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with regulations of the Securities and Exchange Commission pertaining to insider
transactions in Engineered Support Systems, Inc.'s ("ESSI") securities and
specifically, to report all intended, contemplated, and consummated transactions
involving ESSI securities to Employer.
8. SUGGESTIONS. The term suggestions as used herein designates all
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ideas, developments, improvements, inventions, or other intellectual property
whether patentable or not, which are conceived of, made, developed, or acquired
by Employee either alone or in conjunction with others during the term of this
Agreement and which are related to the business of Employer. Employee shall
communicate and promptly assign to Employer, all of his suggestions and Employer
shall have a free, exclusive right, title or license to make, use, sell, and
patent as to all such suggestions whether patentable or not. Employee hereby
releases Employer from any and all liability in connection with any of
Employee's suggestions, or liability because of use of any portions thereof.
Employee will, at any time upon request by Employer, execute and deliver any and
all papers and do all acts necessary or appropriate for the proper transfer,
assignment, and protection of license, title and other rights of Employer in and
to any intellectual property to which it may be entitled by virtue of this
paragraph.
9. DOCUMENTS. Employee agrees that all documents, instruments,
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drawings, plans, contracts, proposals, records, notebooks, invoices, statements
and correspondence, including all copies thereof, electronic or otherwise,
whether stored on CD, hard disk, floppy disk or magnetic tape, relating to the
business of Employer, shall be the property of Employer and, upon cessation of
Employee's employment with Employer, for whatever reason, all of the same then
in Employee's possession whether prepared by Employee or others, will be left
with or immediately delivered to Employer.
10. REMEDIES. Notwithstanding anything to the contrary contained in
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this Agreement, it is agreed that any breach or violation of any of the terms of
paragraphs 5, 6 or 7 of this Agreement by Employee will result in immediate and
irreparable injury to Employer and will authorize recourse to an ex parte
temporary restraining order, preliminary injunction, permanent injunction and/or
specific performance as well as to all other legal or equitable remedies to
which Employer may be entitled. Employee acknowledges that in the event of the
termination of the Employee's employment for any reason, Employee's experience
and capabilities are such that Employee can obtain employment in businesses
engaged in other lines or of a different nature, and that the enforcement of a
remedy by way of injunction will not prevent Employee from earning a livelihood.
No remedy conferred by any of the specific provisions of
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this Agreement is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity, by statute or
otherwise. The election of any one or more remedies by Employer shall not
constitute waiver of the right to pursue other available remedies at any time or
cumulatively from time to time.
11. EMPLOYEE BENEFITS. Employee shall be entitled to participate, in
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accordance with the eligibility requirements thereof, in any medical,
disability, accidental death, life insurance, profit sharing trust and 401(k)
programs and other employee benefits which now exist or that may be established
hereafter by Employer on the same basis as other employees of Employer.
12. VACATION. Employee shall be entitled to four (4) weeks paid
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vacation each year, which vacation time shall be taken during such periods as
may be mutually agreed upon by Employer and Employee.
13. SEVERABILITY. Subject to the provisions of paragraph 6(d), all
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agreements and covenants herein contained are severable, and in the event any of
them shall be held to be invalid or unenforceable in any respect, this Agreement
shall be interpreted as if such invalid agreement or covenant were not contained
herein.
14. WAIVER AND MODIFICATION. This Agreement is the final and only
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agreement between the Parties, hereby superseding all prior agreements or
promises not set forth or incorporated herein, whether written or oral. No
amendment, waiver or modification of this Agreement or any covenant, conditions
or limitation herein contained shall be valid unless in writing and duly
executed by the Employee and an officer of the Employer with the express written
consent of the Board, and no evidence of any amendment, waiver or modification
shall be offered or received in evidence in any proceeding, arbitration or
litigation between the Parties hereto arising out of or affecting this
Agreement, or the rights or obligations of the Parties hereunder, unless such
amendment, waiver or modification is in writing, duly executed as aforesaid, and
the Parties further agree that the provisions of this paragraph may not be
waived or modified except as herein set forth.
15. GOVERNING LAW. This Agreement shall be construed and enforced in
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accordance with the laws of the State of Missouri with the exclusive venue for
purposes of litigation being the Circuit Court for the County of St. Louis,
Missouri.
16. ATTORNEYS' FEES AND COSTS. If any action at law or in equity is
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brought to enforce or interpret any of the terms of this Agreement, the
prevailing party shall be entitled to recover from the other party the
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which it may be entitled.
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17. BINDING EFFECT AND NON-ASSIGNMENT. The Employee may not assign the
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benefit of this Agreement or delegate the Employee's obligations under this
Agreement. This Agreement is assignable by the Employer. Subject to the
foregoing limitation on assignment and delegation by the Employee, this
Agreement shall be binding upon and inure to the benefit of the Employer and
Employee and their respective successors, assigns, heirs, legal representatives,
executors, and administrators. The term "Employer" as used in this Agreement
shall mean and include the party so named in the initial paragraph of this
Agreement, the surviving entity of any merger, combination, consolidation or
reorganization to which the Employer is a party, or the corporation or affiliate
to which Employee may be transferred as described in paragraph 3 hereof.
18. NOTICES. All notices, requests, demands, reports or other
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communication hereunder ("Notices") shall be in writing and shall be given by
registered or certified mail, return receipt requested, addressed as follows:
If to Employer:
Engineered Support Systems, Inc.
ATTN: President/Gerald A. Potthoff
201 Evans Lane
St. Louis, MO 63121-1126
With a copy to:
Engineered Support Systems, Inc.
ATTN: General Counsel/David Mattern
201 Evans Lane
St. Louis, MO 63121-1126
If to Employee:
Larry K. Brewer
17142 Surrey View Drive
Chesterfield, MO 63005
or to such other addresses as to which the parties hereto give Notice in
accordance with this paragraph 18.
19. CHANGE IN CONTROL. If there is a Change in Control of Employer and
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Employee is not offered a job with comparable responsibilities and Base Salary
by the new owner of Employer's business, Employer will pay Employee each month
for a period of one year after the date of the ownership change, Employee's then
current monthly Base Salary; provided, however, that if Employee becomes
employed by such ownership group or any other party during such one year period,
then the amount of Employee's monthly Base Salary will be reduced by any
compensation paid to Employee by or on behalf
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of the new owner of Employer's business or any other party with whom Employee
becomes gainfully employed during the one year period. The amounts due to
Employee pursuant to this paragraph 19 shall be payable in accordance with
Employer's regular payroll schedule. The amounts payable to Employee under this
paragraph 19 are in lieu of any severance entitlement that Employee may have
pursuant to paragraph 2(d) hereof. Employee agrees, as a condition to receiving
amounts pursuant to this paragraph 19, that he will advise and regularly update
Employer with respect to his employment and earnings sources after a Change in
Control and to provide Employer with such information as may be reasonably
requested by Employer for purposes of verifying Employee's earnings after the
Change in Control. Employee's entitlement to the amounts provided under this
paragraph 19 are further conditioned upon Employee executing a general release
agreement developed for use by Employer.
For purposes hereof, the term "Change in Control" shall mean the sale
or transfer of all of the capital stock of Employer or the sale or transfer of
all or substantially all of the assets of Employer to a party not owned by or
affiliated with Employer or ESSI.
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IN WITNESS WHEREOF, the Employer and Employee have executed this
Agreement to be duly signed and entered into the day and year first written
above.
"EMPLOYER"
ENGINEERED SUPPORT SYSTEMS, INC.
By: /s/ David D. Mattern
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Name: David D. Mattern
Title: Secretary
"EMPLOYEE"
/s/ Larry K. Brewer
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Larry K. Brewer
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