EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "Agreement") made as of the 1st day of
December,
2005 by and between Rick Hockensmith
("Employee") and DHB Industries, Inc., a
Delaware corporation (together with all
divisions, subsidiaries and groups, the
"Company").
NOW, THEREFORE,
in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable
consideration the receipt and
sufficiency of which is acknowledged, the
parties agree as follows:
1. TERM. The
Company agrees to employ Employee, and Employee agrees to be
employed by the Company, subject to the
terms and conditions of this Agreement,
for the period commencing on December 1,
2005 (the "Effective Date") and
terminating on November 30, 2007 (as may be
earlier terminated or extended as
set forth below, the "Employment Period"),
unless earlier terminated as provided
in Section 7; provided, however, that
Employee shall have the right to extend
the Employment Period until November 30,
2009 provided he provide notice to the
Company of such extension to the Company no
less than sixty (60) days prior to
November 30, 2007.
2. EMPLOYMENT
DUTIES.
2.1 TITLE. During the Employment Period, Employee shall be employed
in
the business of
the Company. Employee shall serve with the title of Chief
Operating
Officer. Employee shall devote substantially all of his working
time and efforts
to the performance of his duties under this Agreement.
2.2 LOCATION. In performing his duties hereunder, Employee shall
be
available for
reasonable travel, as the needs of the business of the
Company may
require. Employee shall be based at the Company's Pompano
Beach, Florida
facility.
2.3 REPORTING. Employee shall report to the Chief Executive
Officer
and President of
the Company, and to such other persons as such Chief
Executive
Officer shall direct from time to time.
3.
COMPENSATION/BENEFITS. In consideration of Employee's services
hereunder, the Company shall provide
Employee the following:
3.1 BASE SALARY. During the Employment Period, the Employee
shall
receive an
annual rate of base salary ("Base Salary") in an amount not
less
than $500,000;
provided, however, if at any time David H. Brooks ceases to
serve as a
director and Chief Executive Officer of the Company, the
Employee's base
salary shall be increased to $1,250,000 per annum effective
as of the date
David H. Brooks ceases to serve as a director and Chief
Executive
Officer of the Company.
3.2 BONUSES. Commencing at the close of each fiscal year of the
Company during
the Employment Period, the Company shall review the
performance of
the Company and of Employee during the prior fiscal year,
and the Company
may provide Employee with additional compensation as a
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bonus if the
Board, or any compensation committee thereof, in its sole
discretion,
determines that Executive's contribution to the Company
warrants such
additional payment and the Company's anticipated financial
performance of
the present period permits such payment. Bonuses shall be
paid as a lump
sum not later than sixty (60) days after the end of the
Company's
preceding fiscal year, provided Employee remains employed and
has
not given notice
of termination at the time such payment is due.
3.3 EQUITY COMPENSATION. To induce Employee to enter into this
Agreement,
Employee shall be granted by the Company a warrant or option to
purchase shares
of common stock of the Company, pursuant to a separate
agreement, dated
the date hereof, between the Company and Employee, in the
form attached as
Schedule 3.3 hereto.
3.4 VACATIONS. Employee shall be entitled to two (2) weeks of
paid
vacation per
calendar year. Unused vacation shall not be carried over to
any subsequent
year.
3.5 OTHER BENEFITS. The Company shall provide to Employee such
other
benefits,
including the right to participate in medical and other benefit
plans, as are
made generally available to executives of the Company from
time to
time.
4.
EXPENSES/INDEMNIFICATION.
4.1 EXPENSES. The Company shall reimburse Employee for the
reasonable
business
expenses incurred by Employee in the course of performing his
duties for the
Company, upon submission of invoices, vouchers or other
appropriate
documentation, as may be required in accordance with the
policies in
effect from time to time for executive employees of the
Company.
4.2 INDEMNITY. To the fullest extent permitted by law, the
Company
shall indemnify
Employee with respect to any actions commenced against
Employee in his
capacity as an officer, director, employee, agent or
fiduciary or
former officer, director, employee, agent or fiduciary of the
Company, or any
affiliate thereof for which Employee may render service in
such capacity,
whether by or on behalf of the Company, its shareholders or
third parties,
and the Company shall advance to Employee on a timely basis
an amount equal
to the reasonable fees and expenses incurred in defending
such actions,
after receipt of an itemized request for such advance, and an
undertaking from
Employee to repay the amount of such advance, with
interest at a
reasonable rate from the date of the request, as determined
by the Company,
if it shall ultimately be determined that Employee is not
entitled (as a
matter of law or by judicial determination) to be
indemnified
against such expenses. This indemnity shall survive any
termination of
employment under this Agreement and is in addition to and
not in
limitation of any other right to indemnification or exoneration
to
which Employee
is entitled at law, or under the governing charter documents
of the Company.
The Company agrees to use its best efforts to secure and
maintain
officers' and directors' liability insurance, including
coverage
for
Employee.
5. COVENANTS AND
CONFIDENTIAL INFORMATION.
5.1 RESTRICTIVE COVENANTS. Employee acknowledges the Company's
reliance on and expectation of
Employee's continued commitment to
performance of
his duties and responsibilities during the Employment
Period. In light
of such reliance and expectation on the part of the
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Company, during
the applicable period hereafter specified in Section 5.2,
Employee shall
not, directly or indirectly, do or suffer either of the
following:
(a) (1) own, manage, control or participate in the ownership,
management or control of, or be employed or engaged by or
otherwise
affiliated or associated as an employee, agent, representative,
consultant, independent contractor or otherwise with, any other
corporation, partnership, proprietorship, firm, association or
other
business entity engaged in the business of, or otherwise engage in
the
business of, manufacturing, selling or distributing body armor or
body
armor related products within the United States in direct or
indirect
competition with the Company or any of its affiliates;
(2) solicit any business or contracts from any customers of the
Company or its affiliates, any past customers of the Company or
its
affiliates, or any prospective customers of the Company or its
affiliates (i.e., potential customers from which the Company or
its
affiliates has solicited business at any time during the twelve
(12)
month period preceding the expiration or termination of the
Employment
Period), except as necessitated by Employee's position with the
Company and then only in furtherance of the business interests of
the
Company or its affiliates;
(3) induce or attempt to induce any such customer to alter its
business relationship with the Company or its affiliates except
as
necessitated by Employee's position with the Company and then only
in
furtherance of the business interests of the Company or its
affiliates;
(4) solicit or induce or attempt to solicit or induce any
employee of the Company or its affiliates to leave the employ of
the
Company or any of its affiliates for any reason whatsoever or hire
any
employee or any person who was an employee of the Company or
its
affiliates within the twelve (12) month period prior to such
hiring;
or
(5) directly or indirectly, engage in any conduct or make any
statement, whether in commercial or noncommercial speech,
disparaging
or criticizing in any way the Company or any of its affiliates, or
any
products or services offered by any of them, nor shall Employee
engage
in any other conduct or make any other statement that could be
reasonably expected to impair the goodwill of any of the Company
or
any if its affiliates, the reputation of any products or services
of
the Company or any of its affiliates or the marketing of such
products
or services.
(b) disclose, divulge, discuss, copy or otherwise use or suffer
to be used in any manner, other than in accordance with
Employee's
duties hereunder, any confidential or proprietary information
relating
to the Company's or any of its affiliates' businesses,
prospects,
finances, operations or properties or other trade secrets of
the
Company or any of its affiliates, it being acknowledged by
Employee
that all such information regarding the business of the Company or
any
of its affiliates compiled or obtained by, or furnished to,
Employee
while Employee shall have been employed by o
