Exhibit 10.2
CHANGE OF CONTROL
AGREEMENT
This Agreement is made this 19
th day of January, 2009, by and between Argon ST, Inc.,
a Delaware corporation (the “Company”), and Kerry M.
Rowe (the “Executive”).
WHEREAS, the Board of Directors of
the Company (the “Board”) recognizes that the
possibility of a Change of Control (as defined below) exists and
that the threat or the occurrence of a Change of Control can result
in significant distraction of the Company’s key management
personnel because of the uncertainties inherent in such a
situation;
WHEREAS, the Board has determined
that it is essential, and in the best interest of the Company and
its stockholders, for the Company to retain the services of the
Executive in the event of the threat or the occurrence of a Change
of Control, and to ensure the Executive’s continued
dedication and efforts in such event without undue concern by the
Executive for the Executive’s personal financial and
employment security; and
WHEREAS, in order to induce the
Executive to remain in the employ of the Company in the event of
the threat or the occurrence of a Change of Control, the Company
desires to enter into this Agreement with the Executive to provide
the Executive with certain benefits in the event of the threat or
the occurrence of a Change of Control.
NOW, THEREFORE, the parties hereto,
in consideration of their respective promises herein, and intending
to be legally bound, agree as follows:
1. Term of Agreement.
This Agreement shall commence as of January 19, 2009 (the
“Effective Date”), and shall continue in effect for
five (5) years until January 19, 2014 (the
“Term”); provided, however, that on the first
expiration of the Term, the Term shall automatically be extended
for another five (5) years; provided, however, that following
the occurrence of a Change of Control, the Term (either initial or
as extended) shall not expire prior to the expiration of at least
twenty-four (24) months after such event.
2. Payments .
(a) If, during the Term, the Executive’s employment with
the Company or its Affiliates shall be terminated by the Company,
or by the Executive for Good Reason, within twenty-four
(24) months following a Change of Control, the Executive shall
be entitled to the following compensation and benefits:
i. within 60 days of the
termination of his employment, he shall be paid an amount equal to
two (2) years of his base salary at the date of the Change of
Control; and
ii. for the next eighteen
(18) months, the Company shall, at its expense, continue on
behalf of the Executive and his dependents and beneficiaries, the
life insurance, disability, medical, dental and hospitalization
coverage and benefits provided to the Executive immediately prior
to the Change of Control. The Company’s obligation hereunder
with respect to this subparagraph ii shall be reduced to the extent
that the Executive obtains coverage and benefits pursuant to a
subsequent employer’s benefit plans, provided that the
aggregate coverage and benefits of the combined benefit plans is no
less favorable to the Executive than the coverage and benefits
required to be provided hereunder. In the event such coverage and
benefits may be barred under applicable law or regulations or by
the terms of the plans themselves (or where such continuation would
adversely affect the tax status of the benefit plan pursuant to
which the coverage and benefits are provided), the Company shall
pay to the Executive the reasonable cash equivalent of such
coverage and benefits, as determined by the Company’s
independent auditors, in lieu of such coverage and benefits.
iii. The Executive shall not be
required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise. No payment
under this Agreement shall be offset or reduced by the amount of
any compensation or benefits provided to the Executive in any
subsequent employment except as provided in subparagraph ii
above.
(b) This Agreement is not
intended to constitute a “nonqualified deferred compensation
plan” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”).
Notwithstanding the foregoing, if the Company determines that
(i) this Agreement or any benefit paid to the Executive
hereunder is subject to Section 409A of the Code, and
(ii) the Executive is a “specified employee”
within the meaning of Section 409A of the Code, then to the
extent necessary to avoid the imposition of additional income taxes
or penalties or interest on the Executive under Section 409A
of the Code, payments due under Section 2(a) shall be accumulated
and paid to the Executive in a lump-sum payment on the first day of
the seventh month following the date of the termination of his
employment.
3. Fees and Expenses .
The Company shall pay all reasonable legal fees and related
expenses (including the costs of experts, evidence and counsel)
incurred by the Executive as they become due as a result of the
Executive seeking to obtain or enforce any right or benefit
provided by this Agreement or any other plan or arrangement
maintained by the Company under which Executive is or may be
entitled to receive benefits.
4. Notices . For
purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing, shall be signed
by the Executive, if to the Company, or by a duly authorized
officer of the Company, if to the Executive, and shall be deemed to
have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage paid, addressed to the
respective addresses given by each party to the other, provided
that all notices to the Company shall be directed to the attention
of the Board with a copy to the General Counsel of the Company. All
notices and communications shall be deemed to have been received on
the date of delivery thereof or on the third business day after the
mailing thereof, except that notice of change of address shall be
effective only upon receipt.
5. Nature of Rights .
(a) Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any
benefit, bonus, incentive, other plan or program provided by the
Company or any Affiliate of the Company and for which the Executive
may qualify, nor shall anything herein limit or reduce such rights
or benefits the Executive may have under any other agreements with
the Company or any Affiliate of the Company. Amounts which are
vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company or any Affiliate
of the Company shall be payable in accordance with such plan or
program.
(b) Nothing in this Agreement
shall be construed to create any right to employment on behalf of
the Executive that the Executive does not otherwise possess, nor to
affect any rights of the Company to terminate Executive at
will.
6. Settlement of Claims
. The Company’s obl
