EMPLOYEE RETENTION AGREEMENTEmployee Retention Agreement |
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MTC TECHNOLOGIES INC | David S. Gutridge. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.1
AGREEMENT
THIS AGREEMENT (the “Agreement”), effective as of January 16, 2007, is entered into between MTC Technologies Inc. on behalf of itself, its officers, directors, shareholders, employees and agents (in their individual and representative capacities), and its parent, affiliated, successor, subsidiaries and other related companies, and each of them jointly and severally (herein singularly and collectively called the “Company”), and David S. Gutridge on behalf of himself and his heirs, executors, guardians, administrators, successors and assigns, and each of them jointly and severally (herein singularly and collectively called “Employee”). (Collectively, the Company and Employee are referred to hereafter as the “Parties”)
WHEREAS, Employee has served the Company in various capacities for several years, including as Chief Financial Officer and Chief Executive Officer, and has expressed his desire to retire from employment with the Company;
WHEREAS, the Company desires to retain Employee in order to utilize his significant experience in the business matters of the Company and Employee desires to provide such services to the Company;
NOW, THEREFORE, in consideration of the above and for other good and valuable consideration as described herein, the Parties agree as follows:
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1. |
Employment. |
The Company hereby employs the Employee, and the Employee agrees to serve, as a Consulting Advisor from January 16, 2007 through January 15, 2009. The period of January 16, 2007 through January 15, 2009 shall be referred to as the “Term.” During the Term, Employee will render such services to the Company, as the Company may request of Employee on an on-call basis from time to time, at a time and place of Employee’s choosing. The Employee shall perform such duties consistent with the Employee’s position as may be assigned to him from time to time by the Chairman of the Board of the Company. Employee will, with reasonable notice, but at no personal cost or expense to Employee, during or after the term of this Agreement, furnish information as may be in his possession and cooperate with the Company, as may reasonably be requested, in connection with any claims or legal actions in which the Company or any of its parent, subsidiaries or affiliates are or may become a party.
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Payments and Benefits. |
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A. |
In consideration of Employee agreeing to extend his services as provided herein and for the other covenants made by Employee in this Agreement, including without limitation the covenants made in Section 7, the Company shall compensate Employee at an annual rate of $250,000, payable in 27 equal payments of $10,416.67 starting on January 31, 2007 and thereafter on or before the 15th and the last day of each calendar month, through March 15, 2008. On or before March 15, 2008, the Company shall make a final payment of $218,749.91 (the “Final Payment”). If at any time prior to the end of the Term the Agreement is terminated pursuant to Section 3(a) or 3(b), Employee shall be obligated to return to the Company the pro rata portion of the Final Payment which has yet to be earned from the date of such termination through the end of the Term. All payments shall be |
subject to all applicable withholdings and pursuant to the Company’s regular payroll schedule. Not withstanding the above, in the event of a “Change in Control”, as defined in the Company’s 2002 Equity and Performance Incentive Plan, all remaining payments under this section 2A shall be accelerated and immediately paid to Employee on or before the date of such Change in Control.
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B. |
Employee is entitled to benefits under the Company’s welfare benefit plans, including his right to participate in the Company’s 401(k) savings plan in which he may participate on the same basis as any other employee of the Company. Notwithstanding the terms of any such stock option grant, Employee further agrees that his right to exercise any stock option or other option to acquire Common Stock of the Company pursuant to the Company’s 2002 Equity and Performance Incentive Plan shall expire: |
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with respect to any options which are “in the money” as of the date hereof, on December 31, 2007; and |
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2. |
with respect to all other options, on September 15, 2008. |
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C. |
Notwithstanding Section 2.B above, Employee shall be entitled to participate in and receive any bonus or other annual incentive amounts paid by the Company with respect to calendar year 2006 as determined by the Compensation Committee of the Board of Directors of the Company in its sole discretion. |
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D. |
The Company shall pay or reimburse Employee for all reasonable expenses incurred by Employee in connection with the performance of his duties and obligations under this Agreement, subject to presentation of reasonable substantiation and/or vouchers, and otherwise in accordance with Employee’s past practice and such procedures as the Company may from time to time establish for expense reimbursement applicable to similarly situated employees of the Company. |
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Termination. The Employee’s employment by the Company: (a) may be terminated by the Company for cause (as defined below) at any time; and (b) may be terminated by the Employee, without cause at any time upon thirty (30) days’ prior written notice delivered by the Employee to the Company. “Cause” means that the Employee shall have: |
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i. |
been convicted of a criminal violation involving, in each case, fraud, embezzlement or theft in connection with the Employee’s duties or in the course of the Employee’s employment with the Company; |
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ii. |
committed intentional wrongful damage to property of the Company; or |
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iii. |
committed intentional wrongful disclosure of secret processes or confidential information of the Company; |
and any such act shall have been demonstrably and materially harmful to the Company.
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