Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10QSB American Body Armor & Equipment, Inc. Form 10-Qsb 13± 53K
2: EX-10 American Body Armor & Equipment, Inc. Exhibit 10.8 8± 31K
3: EX-27 American Body Armor & Equipment, Inc. Financial 1 8K
Data Schedule
EX-10 — American Body Armor & Equipment, Inc. Exhibit 10.8
AMERICAN BODY ARMOR & EQUIPMENT, INC.
EMPLOYMENT AGREEMENT
BY THIS AGREEMENT, made as of this 6th day of February, 1995,
AMERICAN BODY ARMOR & EQUIPMENT, INC., a Florida corporation ("Company")
and RICHARD TODD BISTRONG ("Employee"), in consideration of mutual
benefits set forth herein, hereby agree as follows:
1. Employment. The Company hereby employs the Employee and the
Employee hereby accepts employment upon the terms and conditions
hereinafter set forth.
2. Term. Subject to the provisions for termination as hereafter
provided, the term of this agreement shall begin on February 6, 1995, and
shall terminate on January 30, 1997.
3. Compensation. For all services rendered by the Employee under
this agreement, the Company shall compensate the Employee by paying the
Employee the sum of the following:
(i) $120,000 per year, payable in 26 equal installments (once
every two weeks) (called "Regular Compensation").
(ii) $30,000 payable within thirty (30) days following
Employee's commencement of employment under this agreement
(called "Signing Bonus").
(iii) An amount equal to 2% of the annual net, pre-tax profit
generated by the Company during 1995 and 1996 in excess of
$400,000 per year, as determined according to the Company's
Audited Financial Statement, subject to a maximum of
$45,000 per year (called "Profit Bonus").
(iv) Commission on net eligible base product domestic sales to
other than military and GSA customers at the following
percentages:
- No commissions payable on the first $6,000,000 of net
eligible annual base product domestic sales.
- For achieving annual net eligible base product domestic
sales in excess of $6,000,000 but less than $15,000,000,
commission at the rate of 2.5%.
- For achieving annual net eligible base product domestic
sales in excess of $15,000,000 but less than $25,000,000,
commission at the rate of 2%.
- For achieving annual net eligible base product domestic
sales in excess of $25,000,000, commission at the rate of
1.5% ("Commission Bonus").
Eligible base product sales includes all products currently
manufactured and sold by the Company. Base products shall not
include Gallet helmets, Scanmail Letter Bomb Detectors or any other
products not currently being sold by the Company.
During the first year of the employees employment with the Company,
the total compensation paid to the employee as Regular Compensation,
Profit Bonus and Commission Bonus, will not be less than $190,000
("First Year Guaranteed Compensation").
Net profits shall be calculated in accordance with Company's normal
accounting principles consistently applied throughout its operation and
after all profit sharing contributions. Employee will receive the Profit
Bonus as to net profits earned by the Company during each fiscal year
during the term hereof no later than sixty (60) days following the end of
the fiscal year.
In the event of certain early terminations of this agreement as provided
hereafter, compensation (including First Year Guaranteed Compensation")
payable to the Employee shall (unless otherwise stated) be limited to
amounts Fully Accrued. The term "Fully Accrued" means (i) as to Regular
Compensation the percentage of a year's Regular Compensation as shall
equal the percentage of the year which has expired on the termination
date, (ii) as to Signing Bonus, the entire Signing Bonus, (iii) as to
Profit Bonus only the applicable percentage of net profits having occurred
on or before the date of termination, in which case the $400,000 figure
shall be adjusted based on the percentage of the year which has expired on
the termination date and (iv) as to commissions, only the commission on
orders received and accepted at the date of termination (subject to
adjustment for any non-payments for orders shipped, unless due to failure
on the part of the Company).
4. Duties. The Employee is engaged as Vice President, Sales and
Marketing of the Company to supervise, develop, coordinate and effect all
sales and marketing efforts of the Company's base products, excluding
military and international sales. The precise services of the Employee
may be extended or curtailed, from time to time, at the direction of the
Company. (The Company shall endeavor, but shall not be required, to
provide thirty days advance notice of a material extension or a
curtailment of such services.) If the Employee is elected or appointed as
a director or other officer of the Company during the term of this
agreement, he shall serve in such capacity or capacities without further
compensation; but nothing herein shall be construed as requiring the
Company to cause the election or appointment of the Employee as such
director or other officer.
5. Extent of Services. The Employee shall devote his entire time,
attention and energy to the business of the Company, and shall not during
the term of this agreement, engage in any other business activity whether
or not such business activity is pursued for gain, profit or other
pecuniary advantage; but this shall not be construed as preventing the
Employee from investing his assets in such form or manner as will not
require any services on the part of Employee in the operation of the
affairs of the venture to which such investments are made.
6. Stock Options. The Company shall grant Employee the following
options, pursuant to the terms and conditions of the American Body Armor
and Equipment, Inc. Stock Option Plan:
(i) The Company shall grant the Employee the right and option
to purchase from it 50,000 shares of authorized, issued,
and outstanding common stock of the Company ("Common
Stock") at an exercise price of $0.97 per share. The
option shall be exercisable as follows:
33.3% on February 6, 1996
additional 33.3% on February 6, 1997
additional 33.4% on February 6, 1998,
except that if Employee's employment is terminated without
cause, the option may be exercised within ninety (90) days
following termination. Moreover, if 45% or more of
Company's outstanding shares are sold to a person or group,
the entire option shall be immediately exercisable. The
option shall expire February 6, 2004, or 90 days after the
date of termination of employment, if sooner. Common Stock
issued pursuant to this option may, at the election of the
Board, be registered pursuant to the Securities Act of 1933
and until such registration, if any, shall constitute
restricted securities subject to Rule 144. These options
shall be "non-qualified" for Federal income tax purposes.
(ii) Issuance of shares upon exercise of the options described
above will be subject to payment to the Company by Employee
of the Employee's share of applicable withholding and
payroll tax deposits relating to the "spread" between the
exercise price and the fair market value of the underlying
shares on the date of exercise (such spread is deemed
compensation for federal income tax purposes). Such amount
may be paid by the surrender to the Company of underlying
shares having a value on such date equal to the amount of
the applicable taxes required to be withheld by the Company
from Employee's compensation.
7. Expenses. The Employee is authorized to incur reasonable
expenses for promoting the business of the Company, including expenses for
entertainment, travel and similar items subject to guidelines and policies
established by the Company. The Company will reimburse the Employee for
all such expenses in accordance with the Company's reimbursement policies
for salaried employees, as in effect from time to time.
8. Automobile. The Company will provide the Employee with $600 per
month as a car allowance.
9. Vacation. The Employee shall be entitled each year to a
vacation of four weeks, during which time his compensation shall be paid
in full.
10. Medical Insurance. The Company shall provide employee with
medical insurance on the same basis as the Company generally provides
medical insurance benefits for management employees.
11. Relocation Expenses. In connection with the employee's
relocation to Florida to take up his responsibilities, the Company agrees
to reimburse the employee for the following expenses:
(i) $20,000 called a "Relocation Bonus" to be paid at the
closing on the sale of the Employee's residence in
Cincinnati.
(ii) Employee's reasonable and customary legal fees on the sale
of the Employee's residence in Cincinnati.
(iii) Employee's reasonable and customary real estate sales
commissions on the sales of the Employee's residence in
Cincinnati.
(iv) Reasonable moving expenses for the physical move of the
employee's personal effects from Cincinnati to Florida.
All expenses to be backed up by appropriate documentation to
support such charges.
12. Disability. If the Employee is unable to perform his services
by reason of illness or incapacity for a period of more than sixteen
weeks, the compensation otherwise payable to him during the continued
period of such illness or incapacity shall be reduced by 50%, less any
other disability paid by the Company or insurance policies provided by the
Company. The Employee's full compensation shall be reinstated upon his
return to full employment and to the discharge of his full duties
hereunder. Anything contained herein to the contrary notwithstanding, the
Company may terminate this agreement at any time after the Employee shall
have been absent from his employment, for whatever cause, for a continuous
period of not less than six months, and all obligations of the Company to
the Employee which have not already Fully Accrued shall cease upon any
such termination.
13. Termination.
(a) Without Cause. Without cause, the Company may terminate
this agreement at any time upon three days' written notice to the
Employee. In such event, the Employee shall continue to receive his
Guaranteed Compensation of $190,000 for the first twelve months on a pro-
rated basis, and then the Regular Compensation throughout the balance of
the term of this agreement, but shall be entitled to his Profit Bonus and
Commission Bonus only to the extent Fully Accrued on the date of
termination. (In the event that the remaining original term is less than
six months, Employee shall receive his Regular Compensation for six months
following termination.)
(b) With Cause. Company may terminate the employment of the
Employee hereunder immediately upon written notice thereof in the event of
material malfeasance, misfeasance or nonfeasance by the Employee in
connection with his employment or if he is convicted of a felony. In such
event, the Company shall pay the Employee only such compensation as shall
have Fully Accrued on the date of termination.
(c) Upon Sale of Business. Notwithstanding anything herein
contained to the contrary, the Company may terminate this agreement upon
ten days' notice to the Employee upon the happening of any of the
following events: (i) sale by the Company of substantially all of its
assets to a single purchaser or to a group of associated purchasers; (ii)
sale, exchange or other disposition, in one transaction, of 45% of the
outstanding shares of capital stock of the Company; (iii) a bona fide
decision by the Company to terminate its business and liquidate its
assets; or (iv) the merger or consolidation of the Company in a
transaction which the shareholders of the Company receive less than 50% of
the outstanding voting shares of the new or continued corporation. Upon
such a termination Employee will receive his Regular Compensation for a
period of six (6) months, but shall receive his Profit Bonus and
Commission Bonus only to the extent Fully Accrued on the date of
termination.
(d) Termination by Employee. The Employee may terminate this
agreement at any time upon thirty days' prior written notice to the
Company. In such event, the Employee shall be entitled to receive his
compensation only to the extent Fully Accrued on the date of termination
and Employee shall have no right to exercise his rights under any stock
options. If Employee terminates this contract within the first six
months, Employee must repay the Signing Bonus and Relocation Bonus.
14. Death During Employment. If the Employee dies during the term
of this employment, the Company shall pay to the estate of the Employee
the compensation which would be Fully Accrued as of the end of the
calendar month in which his death occurs. In addition, the Company shall
pay $5,000, within sixty days after the death of the Employee, to the
widow of the Employee, or, if he is not then survived by his widow, then
to the Employee's estate.
15. Non-Disclosure. Employee hereby agrees with Company that
Employee will keep confidential any and all confidential information of
Company, including Company's know-how, trade secrets, manufacturing
techniques, product design, marketing plans, sales data, customer lists,
and other information, data and proprietary information relating to
Company's business (herein called "Proprietary Information") and will not
at any time, without prior written consent of Company, disclose or make
known or allow to be disclosed or made known such Proprietary Information
to any person, firm, corporation or other business entity other than
Company and persons or entities designated by Company. This provision
shall survive the termination of this Agreement.
16. Restrictive Covenants. For a period of one year from the
termination of Employee's employment hereunder (unless that period is
extended as provided in this section) Employee shall not engage in
competition (as hereafter defined) with Company within any state in the
United States, Europe, Mexico, Israel, or within any other country in
which the Company has any existing customers on the date of termination or
in which areas the Employee has solicited customers on behalf of Company
(which area is herein called the "Restricted Area").
The term "engage in competition" means direct or indirect
competition by the Employee with Company without Company's prior express
written consent in any business involving the manufacture and/or sale of
projectile-resistant garments and materials and other ballistic protection
devices, specifically including, without limitation, bullet-proof vests,
knife vests and bomb suits, whether such competition be by Employee's (i)
engaging in that business directly or indirectly, or through any other
person as an owner, shareholder, partner, principal, consultant, sales
agent or employee, or in any other manner or capacity connected with or
related to such business; or (ii) making his services available to any
person, firm or corporation engaged in competition with Company in that
business.
If the Employee violates any part of this restriction, then the
period during which the restriction applies shall be extended by one day
for each day on which any violation occurs. If suit is brought to enforce
this paragraph and Employee is found to have violated the foregoing
restrictions one or more times, for the purposes of preventing the
Employee from benefitting from his own wrong, (i) Company shall be
entitled to an injunction restraining the Employee from further violation
for a period of one year from the date of the final judgment or decree,
less only any such days as the Employee has not violated this agreement;
(ii) Company shall be entitled to liquidated damages of 1/100 of
Employee's annual compensation for each day which Employee is found to
have been in violation of this Restrictive Covenant, which Employee and
Company agree to be a reasonable estimate of the damages which Company
will suffer from such breach, the actual damages not being subject to
precise measurement.
Employee and Company agree that a breach of this Restrictive
Covenant will result in irreparable injury to the Company which cannot be
fully compensated by monetary damages and, accordingly, Company shall be
entitled to an injunction or to specific performance to prevent a breach
or contemplated breach of this covenant.
This Section 176 ("Restrictive Covenants") shall apply whether
or not Employee is terminated with cause and in the event the term of this
Agreement expires and Company does not enter into a new agreement. The
parties acknowledge that the stock options are specific consideration for
this Restrictive Covenant. Upon Employee's breach of this restrictive
covenant, Employee shall have no right to exercise his rights under any
stock options.
Notwithstanding the foregoing, this Section 16 (Restrictive
Covenant) shall not apply in the event the term of this Agreement expires
without termination under Section 13 and Company and Employee do not enter
into a new employment agreement unless one of the three following
conditions occurs: (i) at the time the Agreement expired, the Company had
grounds to terminate the employment of Employee "with cause", as provided
in Section 13(b) hereof; (ii) the Company offered Employee the opportunity
to renew his employment on substantially the same terms as this Agreement,
excluding the Signing Bonus, the First Year Guaranteed Compensation, the
Relocation Bonus and reimbursement of other Relocation Expenses; or (iii)
the Company agrees to continue paying Regular Compensation for one (1)
year following termination of employment.
Notwithstanding the foregoing, this Section 16 (Restrictive
Covenant) shall not apply in the event the Employee is terminated without
cause (pursuant to Section 13(a), within three (3) months of the
expiration of this Agreement, unless the Company agrees to continue paying
Regular Compensation for one (1) year following termination of employment.
This Section 16 (Restrictive Covenant) shall not apply if the
Company (including any successor interested such as successor by merger,
or sale of assets) ceases to do business as a going concern.
17. Solicitation of Company Employees. For a period of twelve (12)
months following termination of Employee's employment hereunder, Employee
shall not solicit or encourage any officer or employee to leave the
Company's employment or hire any officer, employee or consultant which was
employed by the Company within one year of the Employee's termination of
employment.
18. Notices. Any notice required or permitted to be given under
this agreement shall be sufficient if in writing, and sent by registered
mail to his residence in the case of the Employee, or to the principal
office in case of the Company.
19. Waiver of Breach. The waiving by the Company of a breach of any
provision in this agreement by the Employee shall not operate or be
construed as a waiver of any subsequent breach by the Employee.
20. Assignment. The rights and obligations of the Company under
this agreement shall inure to and be binding upon the successors and
assigns of the Company.
21. Entire Agreement/Release. This instrument contains the entire
agreement of the parties with respect to the subject hereof, and no
representations, inducements, promises or agreements, whether written or
oral, not expressly set forth herein shall be of any force and effect, and
all prior discussions, negotiations, understandings and agreements are
superseded by this Agreement. This Agreement may not be changed or
altered except by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
IN WITNESS WHEREOF, the parties hereto have executed this agreement
as of the day and year first above written.
AMERICAN BODY ARMOR &
EQUIPMENT, INC.
By: ______________________________________
Company
______________________________________
Employee
Dates Referenced Herein
| This ‘10QSB’ Filing | | Date | | Other Filings |
|---|
| |  |
| | 2/6/04 | | None on these Dates |
| | 2/6/98 |
| | 2/6/97 |
| | 1/30/97 |
| | 2/6/96 |
| Filed on: | | 11/14/95 |
| For Period End: | | 9/30/95 |
| | 2/6/95 |
| List all Filings |
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