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Sample Business Contracts

Employment Agreement - Engineered Support Systems Inc. and Gerald A. Potthoff

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                             GERALD A. POTTHOFF

                            EMPLOYMENT AGREEMENT
                            --------------------


         THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st
day of October 1999 by and between ENGINEERED SUPPORT SYSTEMS, INC., a
Missouri corporation (hereinafter called "Employer"), and GERALD A. POTTHOFF
(hereinafter called "Employee").

         WHEREAS, Employee desires to be employed by Employer and Employer
desires to employ Employee under the terms and conditions set forth in this
Agreement; and

         WHEREAS, it is 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 agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8, for the period provided in
paragraph 8 upon the cessation of Employee's employment by Employer for any
reason.

         NOW, THEREFORE, in consideration of the foregoing and the promises
and agreements herein contained, the parties agree as follows:

         1. Employment. Employer hereby employs Employee in the capacity of
            ----------
Employer's Chief Operating Officer and President and Employee hereby accepts
such employment from Employer upon the terms and conditions hereinafter set
forth. This Agreement replaces any and all other employment agreements by
and between Employee and Employer dated prior to the date of this Employment
Agreement.

         2. Term of Employment. The term of Employee's employment under
            ------------------
this Agreement shall be for the period commencing as of, October 1, 1999
and continuing through September 30, 2002, and thereafter continuing
from year to year unless terminated by either party at any time during any
such further term upon the giving of thirty (30) days notice of termination
and/or termination pay, or upon the earlier occurrence of any of the
following events:

         (a) Upon the death of Employee.

         (b) At Employee's option upon ninety (90) days written notice.

         (c) In the event of Employee's Disability (defined as the 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). A determination of Employee's
Disability shall be made by a qualified licensed physician chosen by the
Employer subject to Employee's approval, which approval shall not be
unreasonably withheld. In the event Employer and Employee cannot agree on
the choice of a physician, then such physician shall be chosen by the dean
of the St. Louis University School of Medicine, St. Louis, Missouri, or if
said dean is unwilling or unable to do so, by the dean of another medical
school of recognized national repute. The cost of such determination shall
be borne by Employer, and in the absence of fraud or bad faith, shall be
binding on all parties hereto. Upon termination for any of the foregoing
causes, Employee shall be entitled to receive only the compensation accrued
and unpaid as of the date of termination and shall not be entitled to
additional compensation or other consideration except as otherwise expressly
provided in this Agreement, or such other compensation plans in effect in
which Employee is a participant at the time of termination.

         (d) For cause upon seven (7) days written notice. For purposes of
this Agreement, "cause" shall mean the default in Employee's faithful
performance of the terms and conditions of this Agreement and such failure
or such other action which materially and adversely affects or is materially
detrimental to the operation of Employer's business as determined by
Employer's Board of Directors.

         3. Duties of Employee. During Employee's employment by Employer,
            ------------------
Employee shall serve Employer to the best of Employee's ability and shall
perform such duties and in such capacities as are



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assigned to Employee from time to time by the Chairman of the Board of
Directors of the Employer. Employee agrees during such period to devote
substantial time and efforts to the business of Employer, and to be loyal
and faithful at all times, constantly endeavoring to improve Employee's
ability and knowledge of the business of Employer in an effort to increase
the value of Employee's services for the mutual benefit of Employee and
Employer.

         4. Base Compensation. Subject to the other provisions of this
            -----------------
Agreement and in consideration of services rendered hereunder, Employer
agrees to pay the Employee, for Employee's service during the term of
Employee's employment, a Base Salary as follows:

         For the period of October 1, 1999 through September 30, 2000,
annual compensation of Two Hundred Seventy-Five Thousand Dollars ($275,000)
payable in bi-monthly installments of Eleven Thousand Four Hundred
Fifty-Eight Dollars and Thirty-Three Cents ($11,458.33) on the 15th day and
last day of each month, or upon such other installments as agreed by
Employee and Employer.

         5. Bonus Compensation.
            ------------------

         (a) In addition to the Base Compensation provided in Paragraph 4
hereof, Employer shall pay to Employee an annual bonus to be paid in full in
an amount equal to the amount applying the Bonus Formula contained in a
certain Bonus Plan for certain Executives of Engineered Support Systems,
Inc. dated October 5, 1999 adopted by the Compensation Committee of the
Board of Directors and as from time to time amended. Such amounts shall be
payable on, or before, October 31 for each fiscal year during the term of
this Agreement (subject to the right of Employee to defer his cash bonus
until the month of January of the next calendar year with Employer's
consent, which shall not be unreasonably withheld) and shall be at the sole
discretion of the Chairman upon the advise and counsel of the Compensation
Committee. The Employee's cash bonus for fiscal year 2000 shall be a minimum
of $100,000 and his equity bonus shall be a minimum of 50,000 options with a
strike price equal to the closing price of Employer's stock on October 1,
1999.

         (b) Employee shall be entitled to such other salary, bonuses or
deferred compensation pay as from time to time adopted by the Board of
Directors of Engineered Support Systems, Inc.

         6. Extent of Service. Employee will devote such time, attention and
            -----------------
energy to the business as is reasonable necessary to perform his duties.

         7. Covenants of Employee.
            ---------------------

         (a) During the term of Employee's employment with Employer, and for
a period of two (2) years after the cessation of such employment, for
whatever reason, Employee covenants and agrees that Employee will not
(except as required in Employee's duties to Employer), in any manner
directly or indirectly:

                  (i) Disclose or divulge to any person, entity, firm or
company whatsoever, or use for Employee's own benefit or the benefit of any
other person, entity, firm or company, directly or indirectly, in
competition with the business of Employer, as the same may exist at the date
of such cessation, any knowledge, formulae, devices, information, business
methods, techniques, customer lists, supplier lists, business plans or other
information or data of Employer, without regard to whether all of the
foregoing matters will otherwise be deemed confidential, material or
important, the parties hereto stipulating that as between them, the same are
important, material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer.

                  (ii) Solicit, divert, take away or interfere with any of
the customers, trade, business, patronage, employees or agents of Employer.

                  (iii) Engage, directly or indirectly, either personally or
as an employee, partner, associate, officer, manager, agent, advisor,
consultant 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.


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         (b) For purposes hereof, a business will be deemed competitive if
it is conducted in whole or in part within the continental United States
where Employer then conducts its business and if it involves the manufacture
or sale of environmental control systems for government or commercial use,
or any other business which is in any manner competitive, during or as of
the date of cessation of Employee's employment, with any business then being
conducted by Employer or as to which Employer has then formulated definitive
plans to enter.

         (c) All of the covenants on behalf of Employee contained in this
paragraph 7 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 predicted on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of these
covenants.

         (d) It is the intention of the parties to restrict the activities
of Employee under this paragraph 7 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 circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be illegal, invalid
or unenforceable under present or future laws effective during the term of
this Agreement, 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 or added, as a part of
this Agreement a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be legal, valid and
enforceable.

         8. Expenses.
            --------

         (a) During the period of Employee's employment, Employer will pay
directly, or reimburse Employee, for reasonable and necessary expenses as
from time to time authorized by the Board of Directors of Employer and
incurred by Employee in the interest of the business of Employer. All such
expenses paid by Employee, will be reimbursed by Employer upon presentation
by Employee, from time to time, of an itemized account of such expenditures,
to the extent necessary to permit the deductibility thereof for Federal
income tax purposes in accordance with the from time to time company policy.

         (b) Employer agrees to pay for the monthly dues and charges for
Employee's country club membership at Glen Echo and such other membership
privileges as are approved by Employer's Board of Directors. To the extent
that any such payments are not deductible as ordinary and necessary business
expenses, in accordance with the Internal Revenue Code, such expenditures
will be treated as additional salary to Employee.

         9. Automobile. During the period of this Agreement, Employer shall
            ----------
pay a car allowance as from time to time adopted by the Board of Directors.

         10. Documents. Employee agrees that all documents, instruments,
             ---------
drawings, plans, contracts, proposals, records, notebooks, invoices,
statements and correspondence, including all copies thereof, relating to the
business of Employer shall be the property of Employer; and upon the
cessation of Employee's employment with Employer, for whatever reason, all
of the same then in Employee's possession, whether prepared by Employee of
others, will be left with or immediately delivered to Employer.

         11. Additional Employee Benefits. The Employee shall automatically
             ----------------------------
become enrolled in the Employer's medical, life insurance, disability
income, profit sharing trust and 401(k) programs at such time as he becomes
eligible to participate in the respective programs pursuant to the terms of
the respective programs.

         12. Vacation. Employee shall be entitled to four (4) weeks paid
             --------
vacation each calendar year.

         13. Remedies. In the event of the violation of Employee of any of
             --------
the terms of this Agreement, notwithstanding anything to the contrary
contained in this Agreement, Employer may terminate the employment of
Employee by written notice thereof to Employee and with compensation to
Employee only to the date of such termination. It is further agreed that any
breach or evasion of any of the terms of this Agreement by Employee will
result in immediate and irreparable injury to Employer and will authorize

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recourse to injunction and/or specific performance as well as to all other
legal or equitable remedies to which Employer may be entitled. No remedy
conferred by and of the specific provisions of 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. The election of any one or
more remedies by Employer shall not constitute a waiver of the right to
pursue other available remedies at any time or cumulatively from time to
time. Employee represents and admits that in the event of the cessation of
Employee's employment for any reason, Employee's experience and capabilities
are such that Employee can obtain employment in business 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. In the
event it becomes necessary for Employer to institute a suit at law or in
equity for the purpose of enforcing any of the provisions of this Agreement,
Employer shall be entitled to recover from Employee, Employer's reasonable
attorneys' fees plus court costs and expenses.

         14. Severability. All agreements and covenants herein contained are
             ------------
severable, and in the event any of them shall be held to be invalid or
unenforceable by any court of competent jurisdiction, this Agreement shall
continue in full force and effect and shall be interpreted as if such
invalid agreement or covenant were not contained herein.

         15. Waiver or Modification. No amendment, waiver or modification of
             ----------------------
this Agreement or of any covenant, condition or limitation herein contained
shall be valid unless in writing and duly executed by the party to be
charged therewith, 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. Failure
of Employee or Employer to exercise or otherwise act with respect to any
rights granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a waiver of
such breach, nor prevent Employee or Employer from thereafter enforcing
strict compliance with any and all of the terms and conditions hereof.

         16. Notices. All notices, requests, demands or other communication
             -------
hereunder ("Notice") shall be in writing and shall be deemed given if
delivered personally or mailed by registered or certified mail, return
receipt requested, if to Employer to:

                           Engineered Support Systems, Inc.
                           Attention: David D. Mattern
                           1270 North Price Road
                           St. Louis, Missouri 63132


                  If to Employee, to:

                           Gerald A. Potthoff
                           496 Gabriel
                           Kirkwood, Missouri 63122

or to such other addresses as to which the parties hereto give Notice in
accordance with this Paragraph 16.

         17. Construction. This Agreement shall be governed by and construed
             ------------
and interpreted according to the laws of the State of Missouri,
notwithstanding the place of execution hereof, nor the performance of any
acts in connection herewith or hereunder in any other jurisdiction. For all
purposes hereof, reference to Employer shall include each and every direct
or indirect subsidiary and affiliated company of Employer.

         18. Assignability. The services to be performed by Employee
             -------------
hereunder are personal in nature and therefore Employee shall not assign his
rights or delegate his obligations under this Agreement, and any attempted
or purported assignment or delegation not herein permitted shall be null and
void.

         19. Successors. Subject to the provisions of paragraph 18, this
             ----------
Agreement shall be binding upon and shall inure to the benefit of Employer
and Employee and their respective heirs, executors, administrators, legal
representatives, successors and assigns.


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         20. Severance Allowance. In the event that Employer terminates
             -------------------
Employee's employment for any reason except for cause, then in such event,
Employee shall be entitled to a severance allowance. This severance
allowance will be paid over a twelve (12) month period in accordance with
Employer's regular payroll schedule. During the first six months following
termination, the Employee will be paid his full monthly base salary at the
level in effect as of the date of his termination. During the second six
months following termination, the Employee will be paid fifty percent (50%)
of his monthly base salary as of the date of his termination. If Employer
terminates this Agreement for cause, then Employee shall not be entitled to
any severance payments.

         21. Split Dollar Life Insurance. So long as this Agreement (as
             ---------------------------
extended) remains in effect, Employer agrees to keep in full force and
effect a split dollar life insurance policy having a face value of at least
$2,000,000.00, which split dollar insurance policy will be subject to a
Split Dollar Insurance Agreement that Employer enters into for Employee's
benefit.


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.



"EMPLOYEE"                          "EMPLOYER"

                                     ENGINEERED SUPPORT SYSTEMS, INC.

/s/ Gerald A. Potthoff           By: /s/ David D. Mattern
----------------------------         ---------------------------------------
Gerald A. Potthoff                       David D. Mattern, Secretary









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