Exhibit
10.15
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is signed on
the 14 th
day of April, 2008, effective as of the 1 st
day of January, 2008, by and between Arotech Corporation , a
Delaware corporation with offices at 1229 Oak Valley Drive, Ann
Arbor, Michigan 48108 (the “Company”), and Thomas J. Paup , an
individual residing at 4716 Lohr Road, Ann Arbor, Michigan 46108
(the “Employee”).
W I T N E
S S E T H :
WHEREAS , the Company and the Employee entered into an
Employment Agreement dated as of December 30, 2005 (the
“Original Agreement”); and
WHEREAS , the Company and the Employee now wish to extend
the Employee’s employment and to amend and restate the
Original Agreement in its entirety in accordance with the terms of
this Agreement;
NOW , THEREFORE , the parties
hereto do hereby agree as follows:
1.
Title and Duties
.
(a) The
Employee will serve as Vice President – Finance and
Chief Financial Officer of the Company, except that the
Company may, from time to time, change the title and/or duties
of the Employee in such manner as shall not unduly prejudice
the rights of the Employee hereunder. The Employee will report
to the President and Chief Operating Officer of the Company or
to such other person as shall be designated, from time to
time, by the Board of Directors of the Company.
(b) The
Employee shall not during the term hereof undertake or accept
any other employment or occupation, whether paid or unpaid
provided ,
however , that
the Employee may continue to work up to eight (8) evenings per
month as a
Finance Instructor at Eastern
Michigan
University
. The Employee acknowledges and agrees that, although ordinary
working hours are expected to be Monday through Friday, 8 a.m.
to 5 p.m., under certain circumstances the performance of his
duties hereunder may require additional time and/or domestic
and international travel. The Employee acknowledges that this
is a managerial position, and that accordingly overtime hours
will be worked as needed, without additional
compensation.
(c) The
Employee’s place of work will be in Ann Arbor, Michigan,
or at such other place as the Company may from time to time
specify, provided that the employment of the Employee on a
permanent basis at a place which is located more that fifty
(50) miles from Ann Arbor, Michigan shall be done only with
the Employee’s prior consent.
2.
Compensation and Benefits.
(a) The
Company shall pay the Employee, as compensation for all of the
employment services provided by him hereunder during the term
of this Agreement, an annualized base salary of one hundred
sixty thousand dollars ($160,000) (the “Base
Salary”). The Base Salary will be paid semi-monthly in
arrears on the fifteenth and final day of each month. The Base
Salary will, effective January 1 of each year beginning
January 1, 2009, be increased annually by six percent (6%) to
reflect changes in the Consumer Price Index during the
previous year, irrespective of the actual extent of any such
changes. Additionally, the Base Salary may be increased from
time to time, effective January 1 of each year beginning
January 1, 2009, in accordance with the
Company’s procedures, and in the Company’s sole
discretion, based on the Employee’s performance during
the prior year.
(b) The
Company agrees to pay or cause to be paid to the Employee on
each March 31 following the first anniversary of this
Agreement, or as soon thereafter as may be possible in order
to determine the relevant results of the Company, an annual
bonus, as follows:
(i)
If, as of such anniversary, the
Company shall have attained 90% of the Company’s
Budgeted Number (as defined below) for the year preceding such
anniversary, then Employee’s bonus shall be equal to 20%
of Employee’s gross annual Base Salary as then in effect
for the year preceding such anniversary;
(ii)
If, as of such anniversary, the
Company shall have attained 120% of the Company’s
Budgeted Number (as defined below) for the year preceding such
anniversary, then Employee’s bonus shall be equal to 50%
of Employee’s gross annual Base Salary as then in effect
for the year preceding such anniversary;
(iii)
If, as of such anniversary, the Company shall have
attained more than 90% but less than 120% of the
Company’s Budgeted Number (as defined below), then
Employee’s bonus shall be calculated as
follows:
B
= (S x 20%) +
(N-90)/30 x (S x 30%)
Where:
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B =
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The
amount of Employee’s annual bonus; and
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N =
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The
percentage of the Budgeted Number (as defined below) that was
attained by the Company in the immediately preceding fiscal year;
provided ,
however ,
that N is more than 90 and less than 120;
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S =
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Employee’s
gross annual Base Salary.
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For
the purposes of this Section 2(b), the Budgeted Number shall
be the budgeted results of the Company as agreed by the Board
prior to the end of each fiscal year for the fiscal year
designated in such budget, and may include targets for any or
all of the following factors: (i) revenues; (ii) cash flow,
and (iii) EBITDA. In the event that some but not all targets
are reached, the Compensation Committee shall made a
determination as to what percentage of the Budgeted Number was
attained.
(c) The
Company has granted to the Employee a retention bonus of
65,000 shares of restricted stock, vesting (i) 10,834 shares
on December 31, 2008, 10,833 shares on December 31, 2009, and
10,833 shares on December 31, 2010, with each such vesting
being contingent on the Employee being employed by the Company
on the scheduled vesting date, and (ii) 10,834 shares on
December 31, 2008, 10,833 shares on December 31, 2009, and
10,833 shares on December 31, 2010, with each such vesting
being contingent on the Employee being employed by the Company
on the scheduled vesting date and on performance criteria to
be established by the Compensation Committee of the Board of
Directors.
(d) The
Employee shall be entitled to a paid annual vacation of twenty
(20) business days with respect to, and during, each twelve
(12) month period of his employment hereunder, provided that
the unused portion of any such vacation, in respect to any
year, may be carried forward only to the next two-year period.
Upon termination Employee shall be paid for all accrued but
unused vacation. Any vacation days taken by Employee in
advance of their actual accrual shall be considered an advance
on wages and deducted from any wages owing at termination.
Timing of vacations will be cleared in advance with the
Company.
(e) The
Employee shall be entitled to paid sick leave of five (5) days
with respect to, and during, each twelve (12) month period of
his employment hereunder.
(f) The
Company shall provide the Employee and his family with medical
insurance and related insurance benefits in accordance with
its policies from time to time for all employees
generally.
(g) The
Company shall reimburse the Employee’s work-related
expenses, against proper receipts, subject to and in
accordance with policies adopted, from time to time, by the
Company.
3.
Confidential Information;
Return of Materials; Inventions; on-Solicitation.
(a) In
the course of his employment by the Company hereunder, the
Employee will have access to, and become familiar with,
“Confidential Information” (as hereinafter
defined) of the Company. The Employee shall at all times
hereinafter maintain in the strictest confidence all such
Confidential Information and shall not divulge any
Confidential Information to any person, firm or corporation
without the prior written consent of the Company. For purposes
hereof, “Confidential Information” shall mean all
information in any and all media which is confidential by its
nature including, without limitation, data, technology,
know-how, inventions, discoveries, designs, p
