Employment Agreement - Warren B. Kanders

Letter Agreement (First Amendment)

Second Amendment to Employment Agreement

 

 

 

EMPLOYMENT AGREEMENT

 

 

                              ARMOR HOLDINGS, INC.

                           1400 Marsh Landing Parkway

                           Jacksonville, Florida 32250

 

 

                                         January 1, 2002

 

 

 

Mr. Warren B. Kanders

Two Soundview Drive

Greenwich, Connecticut 06830

 

Dear Warren:

 

     This letter agreement will set forth our understanding with respect to the

arrangements relating to your employment services as Executive Chairman of the

Board of Directors of Armor Holdings, Inc. (the "Company").

 

     1. Employment. The Company hereby employs Warren B. Kanders ("Kanders") to

serve as the Executive Chairman of the Board of Directors of the Company, and

Kanders hereby accepts such employment from the Company, upon the terms and

subject to the conditions set forth in this letter agreement.

 

     2. Term. This agreement shall commence on the date hereof and shall

continue for a period of five years expiring on December 31, 2006 (the "Term").

 

     3. Duties. During the Term of this agreement, Kanders shall serve as the

Executive Chairman of the Board of Directors of the Company, and as such shall

lead the Company's Board of Directors in establishing the strategy and overall

objectives of the Company and in reviewing the performance of the Company's

management in, among other things, pursuing such strategy and achieving such

objectives. In addition, Kanders will act as Chairman of the Board at meetings

of the Board of Directors and of the stockholders of the Company. Kanders will

determine the amount of time during normal business hours to devote to the

Company in his capacity as Executive Chairman of the Board, with the Company

acknowledging that (i) Kanders' services under this agreement shall not require

the full time and attention of Kanders, and (ii) Kanders is specifically

permitted to attend to and further develop his other interests to the extent

that they do not significantly interfere with his duties hereunder or conflict

with the provisions of Sections 5 and 6 of this agreement, including, without

limitation, the following:

 

         (A) Serving on the board of directors or any committees thereof (or

comparable governing body) or serving as an officer or partner of any business

corporation or entity (other than one in direct competition with the Company),

or civic or charitable

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 2

 

organization, or being a stockholder, partner or member, or otherwise having an

ownership interest in, any such entity;

 

         (B) Delivering lectures, fulfilling speaking engagements or teaching at

educational institutions;

 

         (C) Managing his legal affairs and personal investments; and

 

         (D) Devoting reasonable periods of time to the management of any or all

of his current or future investments or any of their respective affiliates or

investments.

 

To the extent that any such activities have been conducted by Kanders prior to

the date hereof, the continued conduct of such activities (or the conduct of

activities similar in nature and scope thereto) subsequent to the date hereof

shall not be deemed to interfere with the performance of his duties and

responsibilities under this agreement.

 

     4. Compensation and Benefits. (a) Kanders shall be entitled to participate,

at the sole and absolute discretion of the Compensation Committee of the Board

of Directors of the Company, in the Company's incentive stock option plan. Such

participation shall be based upon, among other things, Kanders' performance and

the Company's performance. In addition, Kanders may be entitled, during the term

of this agreement, to receive such additional options, at such exercise prices

and other terms, and/or to participate in such other bonus plans as the

Compensation Committee of the Board of Directors of the Company may, in its sole

and absolute discretion, determine. In addition to the foregoing, Kanders shall

be entitled to receive (i) options to purchase up to 300,000 shares of the

Company's Common Stock, of which 100,000 shares shall vest on each of December

31, 2002, December 31, 2003 and December 31, 2004, (ii) options to purchase up

to 250,000 shares of the Company's Common Stock, all of which shall vest on

December 31, 2006, and (iii) a stock grant of 100,000 shares of the Company's

Common Stock, all of which shall vest 15 years from the date hereof, subject to

acceleration under certain circumstances, all such awards to be upon the terms

and conditions as more fully set forth in a separate agreement between the

Company and Kanders. Options for the purchase of up to 75,000 shares of common

stock described in clause (i) above will have an exercise price of $23.93 per

share, and the balance of the options and stock grants described in clauses (i),

(ii) and (iii) above will be priced based upon the closing price of the shares

of the Company's common stock on the date the same are issued after the

Company's stockholders have approved adoption of the 2002 Stock Incentive Plan

of the Company. Upon the occurrence of a "change in control" (as hereinafter

defined), Kanders shall have the right to terminate this agreement. Upon the

occurrence of a "change in control", or upon the termination of this agreement

by the Company pursuant to Section 8(d) hereof, all of the options and stock

grants described in clauses (i), (ii) and (iii) of this Section 4(a) shall vest

and become immediately exercisable and saleable on the effective date of such

change in control or the date of such termination, as the case may be. Upon

termination of this agreement pursuant to Section 8(a) or Section 8(b) hereof,

the options and stock grants described in clauses (i), (ii) and (iii) of this

Section 4(a) that have not vested as

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 3

 

 

of such termination date shall no longer be exercisable and shall terminate and

be null and void, and any of such options or stock grants that have vested as of

such termination date shall remain vested in accordance with their terms and

this agreement. With respect to any stock grants that terminate in accordance

with the preceding sentence, to the extent that stock certificates have been

delivered to Kanders representing any such terminated stock grants, Kanders

shall promptly deliver such certificates to the Company for cancellation;

provided, that Kanders' failure to so deliver shall in no way contravene the

fact that such shares are null and void, and the Company shall give appropriate

instructions to its stock transfer agent and registrar in respect of the

foregoing.

 

         (b) Kanders represents and warrants that he is not party to, or bound

by, any agreement or commitment, or subject to any restriction, including but

not limited to agreements related to previous employment containing

confidentiality or noncompete covenants, which in the future may have a

possibility of adversely affecting the business of the Company or the

performance by Kanders of his duties under this agreement.

 

         (c) During the term of this agreement, Kanders shall be entitled to

participate in or benefit from, in accordance with the eligibility and other

provisions thereof, the Company's medical insurance and other fringe benefit

plans or policies as the Company may make available to, or have in effect for,

its personnel with commensurate duties from time to time. The Company retains

the right to terminate or alter any such plans or policies from time to time.

Kanders shall also be entitled to four weeks paid vacation each year, sick leave

and other similar benefits in accordance with policies of the Company from time

to time in effect for personnel with commensurate duties.

 

         (d) In addition, Kanders shall be entitled to reimbursement of

out-of-pocket expenses incurred by Kanders in connection with the performance of

his services hereunder upon submission of proper documentation therefor, all in

accordance with the policies of the Company.

 

         (e) For purposes hereof, a "change in control" of the Company shall be

deemed to have occurred in the event that: (i) individuals who, as of the date

hereof, constitute the Board of Directors of the Company cease for any reason to

constitute at least a majority of the Board of Directors of the Company;

provided, however, that any individual becoming a director subsequent to the

date hereof whose election, or nomination for election by the Company's

shareholders, was approved by a vote of at least a majority of the directors

then comprising the Board of Directors shall be considered as though such

individual was a member of the Board of Directors of the Company as of the date

hereof, or (ii) the Company shall have been sold by either (A) a sale of all or

substantially all its assets, or (B) a merger or consolidation, other than any

merger or consolidation pursuant to which the Company acquires another entity,

or (C) a tender offer, whether solicited or unsolicited.

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 4

 

 

         (f) In the event that this agreement is terminated by the Company with

cause pursuant to Section 8(c) hereof prior to the expiration of the Term, all

unvested options granted to the Employee pursuant to the terms of this Agreement

shall terminate, and all unvested stock granted to the Employee pursuant to

Section 4(a)(iii) hereof shall terminate and be null and void, and to the extent

that stock certificates have been delivered to Employee representing any such

terminated stock grants, the Employee shall promptly deliver such certificates

to the Company for cancellation; provided, however, that Employee's failure to

so deliver shall in no way contravene the fact that such shares are null and

void, and the Company shall give appropriate instructions to its stock transfer

agent and registrar in respect of the foregoing. In the event that this

agreement is terminated by Kanders, other than due to a change in control, all

vested options for the purchase of Common Stock of the Company and all vested

stock grants granted to Kanders shall remain subject to the terms of the

agreement by which such options and stock grants were issued, and the unvested

portion of such options and stock grants shall terminate and be null and void,

and to the extent that stock certificates have been delivered to Kanders

representing any such terminated stock grants, Kanders shall promptly deliver

such certificates to the Company for cancellation; provided, that Kanders'

failure to so deliver shall in no way contravene the fact that such shares are

null and void, and the Company shall give appropriate instructions to its stock

transfer agent and registrar in respect of the foregoing.

 

     5. Confidentiality. For purposes of this Section 5, all references to the

Company shall be deemed to include all of the Company's affiliates and

subsidiaries.

 

         (a) Confidential Information. Kanders acknowledges that as a result of

his employment with the Company, Kanders has and will continue to have knowledge

of, and access to, proprietary and confidential information of the Company,

including, without limitation, inventions, trade secrets, technical information,

know-how, plans, specifications, methods of operations, financial and marketing

information, information with respect to business and product development,

including, without limitation, acquisitions and new lines of business, and the

identity of customers and suppliers (collectively, the "Confidential

Information"), and that such information, even though it may be contributed,

developed or acquired by Kanders, constitutes valuable, special and unique

assets of the Company developed at great expense which are the exclusive

property of the Company. Accordingly, Kanders shall not, at any time, either

during or subsequent to the term of this agreement, use (whether for personal

gain or otherwise), reveal, report, publish, transfer or otherwise disclose to

any person, corporation or other entity, any of the Confidential Information

without the prior written consent of the Company, except to responsible officers

and employees of the Company and other responsible persons who are in a

contractual or fiduciary relationship with the Company and who have a need for

such information for purposes in the best interests of the Company, and except

for such information which is or becomes of general public knowledge from

authorized sources other than Kanders. Kanders acknowledges that the Company

would not enter into this agreement without the assurance that all such

Confidential Information will be used for the exclusive benefit of the Company.

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 5

 

 

 

         (b) Return of Confidential Information. Upon the termination of

Kanders' employment with the Company, Kanders shall promptly deliver to the

Company all drawings, manuals, letters, notes, notebooks, reports and copies

thereof and all other materials relating to the Company's business, including

without limitation any materials incorporating Confidential Information, which

are in Kanders' possession or control.

 

         (c) Inventions, etc. Kanders will promptly disclose to the Company all

designs, processes, inventions, improvements, discoveries and other information

related to the business of the Company (collectively "developments") conceived,

developed or acquired by him alone or with others during the term of this

Employment Agreement, whether or not conceived during regular working hours,

through the use of Company time, material or facilities or otherwise. All such

developments shall be the sole and exclusive property of the Company, and upon

request, Kanders shall deliver to the Company all drawings, models and other

data and records relating to such developments. In the event any such

developments shall be deemed by the Company to be patentable or copyrightable,

Kanders shall, at the expense of the Company, assist the Company in obtaining

any patents or copyrights thereon and execute all documents and do all other

things necessary or proper to obtain letters patent and copyrights and to vest

the Company with full title thereto.

 

     6. Non-competition. For purposes of this Section 6, all references to the

Company shall be deemed to include all of the Company's affiliates and

subsidiaries. Kanders will not utilize his special knowledge of the business of

the Company and his relationships with customers, suppliers of the Company and

others to compete with the Company. During the period that this agreement is in

effect and for a period of two (2) years after the expiration or termination of

this agreement, Kanders shall not engage, directly or indirectly, or have an

interest, directly or indirectly, anywhere in the United States of America or

any other geographic area where the Company does business or in which its

products or services are marketed, alone or in association with others, as

principal, officer, agent, employee, director, partner or stockholder (except

with respect to his employment by the Company), or through the investment of

capital, lending of money or property, rendering of services or otherwise, in

any business competitive with or substantially similar to that engaged in by the

Company during the Term of this agreement (it being understood hereby, that the

ownership by Kanders of five percent (5%) or less of the stock of any company

listed on a national securities exchange shall not be deemed a violation of this

Section 6). During the same period, Kanders shall not, and shall not permit any

of his employees, agents or others under his control to, directly or indirectly,

on behalf of himself or any other person, (i) call upon, accept business from,

or solicit the business of any person who is, or who had been at any time during

the preceding two (2) years, a customer of the Company or any successor to the

business of the Company, or otherwise divert or attempt to divert any business

from the Company or any such successor, or (ii) directly or indirectly recruit

or otherwise solicit or induce any person who is an employee of, or otherwise

engaged by, the Company or any successor to the business of the Company to

terminate his or her employment or other relationship with the Company or such

successor, or hire any person who has left the employ of the Company or any such

successor during the preceding two (2) years. Kanders shall

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 6

 

not at any time, directly or indirectly, use or purport to authorize any person

to use any name, mark, logo, trade dress or other identifying words or images

which are the same as or similar to those used at any time by the Company in

connection with any product or service, whether or not such use would be in a

business competitive with that of the Company. Any breach or violation by

Kanders of the provisions of this Section 6 shall toll the running of any time

periods set forth in this Section 6 for the duration of any such breach or

violation.

 

     7. Remedies. The restrictions set forth in Sections 5 and 6 are considered

by the parties to be fair and reasonable. Kanders acknowledges that the

restrictions contained in Section 5 and 6 will not prevent him from earning a

livelihood. Kanders further acknowledges that the Company would be irreparably

harmed and that monetary damages would not provide an adequate remedy in the

event of a breach of the provisions of Sections 5 or 6. Accordingly, Kanders

agrees that, in addition to any other remedies available to the Company, the

Company (i) shall be entitled to specific performance, injunction, and other

equitable relief to secure the enforcement of such provisions, (ii) shall not be

required to post bond in connection with seeking any such equitable remedies,

and (iii) shall be entitled to receive reimbursement from Kanders for all

attorneys' fees and expenses incurred by the Company in enforcing such

provisions. If any provisions of Sections 5, 6, or 7 relating to the time

period, scope of activities or geographic area of restrictions is declared by a

court of competent jurisdiction to exceed the maximum permissible time period,

scope of activities or geographic area, the maximum time period, scope of

activities or geographic area, as the case may be, shall be reduced to the

maximum which such court deems enforceable. If any provisions of Sections 5, 6,

or 7 other than those described in the preceding sentence are adjudicated to be

invalid or unenforceable, the invalid or unenforceable provisions shall be

deemed amended (with respect only to the jurisdiction in which adjudication is

made) in such manner as to render them enforceable and to effectuate as nearly

as possible the original intentions and agreement of the parties.

 

     8. Termination. This agreement may be terminated prior to the expiration of

the Term set forth in Section 2 upon the occurrence of any of the events set

forth in, and subject to the terms of, this Section 8.

 

         (a) Death. This agreement will terminate immediately and automatically

upon the death of Kanders.

 

         (b) Disability. This agreement may be terminated at the Company's

option, immediately upon notice to Kanders, if Kanders shall suffer a permanent

disability. For the purposes of this agreement, the term "permanent disability"

shall mean Kanders' inability to perform his duties under this agreement for a

period of ninety (90) consecutive days or for an aggregate of one hundred twenty

(120) days, whether or not consecutive, in any twelve (12) month period, due to

illness, accident or any other physical or mental incapacity, as reasonably

determined by the Board of Directors of the Company and in accordance with

applicable law. In the event that a dispute arises with respect to the

disability of Kanders, the parties shall each select a physician licensed to

practice in the State of New York to make such a determination. If

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 7

 

 

the two (2) physicians selected cannot agree on a determination, they will

mutually select a third physician and the decision of the majority of the three

(3) physicians will be binding.

 

         (c) Cause. This agreement may be terminated at the Company's option,

immediately upon notice to Kanders, upon: (i) breach by Kanders of any material

provision of this agreement and the expiration of a 10-day cure period for such

breach after written notice thereof has been given to Kanders (which cure period

shall not be applicable to clauses (ii) through (v) of this Section 8(c)); (ii)

gross negligence or willful misconduct of Kanders in connection with the

performance of his duties under this agreement; (iii) Kanders' failure to

perform any reasonable directive of the Board of Directors of the Company; (iv)

fraud, criminal conduct, dishonesty or embezzlement by Kanders; or (v) Kanders'

misappropriation for personal use of any assets (having in excess of nominal

value) or business opportunities (subject, however, to the permitted activities

set forth in Section 3 hereof) of the Company.

 

         (d) Without Cause. This agreement may be terminated at any time by the

Company without cause immediately upon giving written notice to Kanders of such

termination. In such event, Kanders shall be entitled to the acceleration of all

options and stock grants in accordance with the provisions of Section 4(a)

hereof.

 

     9. Tax Effect. If the compensation payable under this agreement, either

alone or together with other payments to Kanders from the Company or one of its

subsidiaries would constitute a "parachute payment" (as defined in Section 280G

of the Internal Revenue Code of 1986, as amended (the "Code")), such severance

compensation may be reduced to the largest amount as will result in no portion

of the severance compensation payments hereunder being subject to the excise tax

imposed by Section 4999 of the Code or being disallowed as deductions to the

Company under Section 280G of the Code. The determination of whether any

reduction shall be made in the severance compensation payments hereunder

pursuant to the foregoing provision shall be made jointly by Kanders and the

Company. Kanders shall be liable for the payment of income and excise taxes, if

any, applicable to him on such severance compensation.

 

     10. Miscellaneous.

 

         (a) Survival. The provisions of Sections 5, 6, and 7 shall survive the

termination of this agreement.

 

         (b) Entire Agreement. This agreement sets forth the entire

understanding of the parties and merges and supersedes any prior or

contemporaneous agreements between the parties pertaining to the subject matter

hereof.

 

         (c) Modification. This agreement may not be modified or terminated

orally, and no modification or waiver of any of the provisions hereof shall be

binding unless in writing and signed by the party against whom the same is

sought to be enforced.

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 8

 

 

         (d) Waiver. Failure of a party to enforce one or more of the provisions

of this agreement or to require at any time performance of any of the

obligations hereof shall not be construed to be a waiver of such provisions by

such party nor to in any way affect the validity of this agreement or such

party's right thereafter to enforce any provision of this agreement, nor to

preclude such party from taking any other action at any time which it would

legally be entitled to take.

 

         (e) Successors and Assigns. Neither party shall have the right to

assign this agreement, or any rights or obligations hereunder, without the

consent of the other party; provided, however, that upon the sale of all or

substantially all of the assets, business and goodwill of the Company to another

company, or upon the merger or consolidation of the Company with another

company, this agreement shall inure to the benefit of, and be binding upon, both

Kanders and the company purchasing such assets, business and goodwill, or

surviving such merger or consolidation, as the case may be, in the same manner

and to the same extent as though such other company were the Company; and

provided, further, that the Company shall have the right to assign this

agreement to any affiliate or subsidiary of the Company. Subject to the

foregoing, this agreement shall inure to the benefit of, and be binding upon,

the parties hereto and their legal representatives, heirs, successors and

permitted assigns.

 

         (f) Communications. All notices, requests, demands and other

communications under this agreement shall be in writing and shall be deemed to

have been given at the time personally delivered or when mailed in any United

States post office enclosed in a registered or certified postage prepaid

envelope and addressed to the addresses set forth below, or to such other

address as any party may specify by notice to the other party; provided,

however, that any notice of change of address shall be effective only upon

receipt.

 

         To the Company:  Armor Holdings, Inc.

                          1400 Marsh Landing Parkway

                          Jacksonville, Florida 32250

                          Attention: Chief Executive Officer

 

         With a copy to:  Kane Kessler, P.C.

                          1350 Avenue of the Americas

                          New York, New York  10019

                          Attention:  Robert L. Lawrence, Esq.

 

         To Kanders:      Warren B. Kanders

                          21 Dairy Road

                          Greenwich, Connecticut 06830

 

         (g) Severability. If any provision of this agreement is held to be

invalid or unenforceable

 

<PAGE>

 

Mr. Warren B. Kanders

January 1, 2002

Page 9

 

by a court of competent jurisdiction, such invalidity or unenforceability shall

not affect the validity and enforceability of the other provisions of this

agreement and the provision held to be invalid or unenforceable shall be

enforced as nearly as possible according to its original terms and intent to

eliminate such invalidity or unenforceability.

 

         (h) Jurisdiction; Venue. This agreement shall be subject to the

exclusive jurisdiction of the courts located in New York County, New York. Any

breach of any provisions of this agreement shall be deemed to be a breach

occurring in the State of New York by virtue of a failure to perform an act

required to be performed in the State of New York, and the parties irrevocably

and expressly agree to submit to the jurisdiction of the courts located in New

York County, New York for the purpose of resolving any disputes among them

relating to this agreement or the transactions contemplated by this agreement

and waive any objections on the grounds of forum non conveniens or otherwise.

The parties hereto agree to service of process by certified or registered United

States mail, postage prepaid, addressed to the party in question.

 

         (i) Governing Law. This agreement is made and executed and shall be

governed by the laws of the State of New York, without regard to the conflicts

of law principles thereof.

 

         (j) No Third-Party Beneficiaries. Each of the provisions of this

agreement is for the sole and exclusive benefit of the parties hereto and shall

not be deemed for the benefit of any other person or entity.

 

     If you are in agreement with the foregoing, please so indicate by signing

in the space indicated below and returning a fully executed copy of this letter

to us.

 

                                       Very truly yours,

 

                                       ARMOR HOLDINGS, INC.

 

 

                                       By:

                                          -------------------------------------

                                          Name:

                                          Title:

 

ABOVE AGREED TO AND ACCEPTED:

 

 

--------------------------------------

         Warren B. Kanders

 

 

 

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LETTER AGREEMENT

 

 

                              ARMOR HOLDINGS, INC.

                           1400 Marsh Landing Parkway

                           Jacksonville, Florida 32250

 

                                  July 26, 2003

 

 

 

Mr. Warren B. Kanders

Two Soundview Drive

Greenwich, Connecticut 06830

 

Dear Warren:

 

                  This letter agreement will amend the letter agreement (the

"Employment Letter") dated as of January 1, 2002 between you and Armor Holdings,

Inc. (the "Company"). Capitalized terms not otherwise defined herein shall have

the meanings ascribed to them in the Employment Letter. Except as expressly

modified by this letter agreement, the Employment Letter shall remain in full

force and effect.

 

         For the remainder of the Term, Kanders shall, in addition to the duties

set forth in the Employment Letter, serve as the Chief Executive Officer of the

Company and shall perform all duties commensurate with his position and as may

be assigned to him by the Board of Directors of the Company and subject to the

control of the Board of Directors of the Company.

 

         Effective as of April 9, 2003, the Company shall pay to Kanders, and

Kanders shall accept from the Company, as compensation for the performance of

services under this letter agreement and the Employment Letter, a salary of

$525,000 per year (the "Base Compensation"). The Base Compensation shall be

payable in accordance with the normal payroll practices of the Company and shall

be subject to withholding for applicable taxes and other amounts. In addition to

the Base Compensation, the Employee may, in the sole and absolute discretion of

the Compensation Committee of the Board of Directors of the Company, be entitled

to incentive compensation which may, among other things, be based upon the

Company's performance and the Employee's performance, all as determined in the

sole and absolute discretion of the Compensation Committee of the Board of

Directors of the Company. Upon the termination of the Employment Letter by

Kanders due to the occurrence of a "change in control", or upon the termination

of the Employment Letter by the Company pursuant to Section 8(d) thereof,

Kanders shall be entitled to receive, in one lump sum, within 5 business days of

the occurrence of such "change in control" or termination by the Company

pursuant to Section 8(d), as the case may be, the greater of (i) his Base

Compensation to the end of the Term, or (ii) twice the Employee's annual Base

Compensation (any such payment is referred to as the "Termination Payment"), and

such Termination Payment shall be subject to withholding for applicable taxes

and other amounts. Notwithstanding anything to the contrary contained herein, in

the event that Kanders has breached his obligations under Sections 5 or 6 of the

Employment Letter, then Kanders shall immediately repay to the Company the full

amount of the gross Termination Payment before taking into account any

withholdings for applicable taxes and other amounts.

 

<PAGE>

 

Mr. Warren B. Kanders

July 26, 2003

Page 2

 

 

         In addition to the compensation set forth above, effective as of the

date hereof for the remainder of the Term, the Company shall provide Kanders

with a non-accountable supplemental benefit allowance equal to 7.5% of Base

Compensation per year.

 

         In addition to the foregoing, Kanders shall be entitled to receive (i)

a stock grant of 200,000 shares of the Company's Common Stock, 66,666 shares of

which shall vest on the date the closing price of the Company's Common Stock on

the New York Stock Exchange (or such other stock market or exchange as the

Common Stock shall then be traded on) shall equal $20 per share or more;

provided, that, such $20 price per share is attained within three years of the

date hereof, and maintained for five consecutive trading days, and the remaining

shares shall vest in 24 equal monthly installments following such date, and (ii)

options to purchase 300,000 shares of the Company's Common Stock at an exercise

price of $14.32 per share, the closing price of the Company's Common Stock on

Friday, July 25, 2003, which shall vest in three annual installments of 100,000

shares commencing on the first anniversary of the date hereof, each of the above

to be subject to the terms and conditions of Section 4 of the Employment Letter

applicable to the awards described therein and which awards shall be upon the

terms and conditions as more fully set forth in a separate agreement between the

Company and Kanders.

 

         If you are in agreement with the foregoing, please so indicate by

signing in the space indicated below and returning a fully executed copy of this

letter to us.

 

                                                     Very truly yours,

 

                                                     ARMOR HOLDINGS, INC.

 

 

                                                     By:

                                                          ----------------------

                                                           Name:

                                                           Title:

 

ABOVE AGREED TO AND ACCEPTED:

 

 

-------------------------------------

            Warren B. Kanders

 

 

 

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AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT -

 

ARMOR HOLDINGS, INC. AND SUBSIDIARIES

 

        THIS AMENDMENT NO. 2 ("Amendment No. 2") is dated as of November 4,

2003, between Armor Holdings, Inc., a Delaware corporation (the "Company") and

Warren B. Kanders ("Kanders"). Capitalized terms not otherwise defined herein

shall have the meanings ascribed to them in the Employment Letter (defined

below).

 

        WHEREAS, the Company and Kanders are parties to a letter agreement (the

"Employment Letter") dated as of January 1, 2002; and

 

        WHEREAS, the Employment Letter was amended pursuant to a letter

agreement dated July 26, 2003 ("Amendment No. 1"); and

 

        WHEREAS, the Company and Kanders desire to further amend the Employment

Letter, as amended by Amendment No.1, in accordance with the terms hereof.

 

        NOW, THEREFORE, in consideration of the premises and other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, and intending to be legally bound, the parties hereby agree as

follows:

 

        1. Clause (i) of the penultimate paragraph of Amendment No. 1 is hereby

deleted in its entirety, and the following is substituted in lieu thereof:

 

                "(i) a stock bonus award of 200,000 shares of the Company's

        Common Stock, all of which shall vest on the date the closing price of

        the Company's Common Stock on the New York Stock Exchange (or such other

        stock market or exchange as the Common Stock shall then be traded on)

        shall equal $20 per share or more; provided, that, such $20 price per

        share is attained and maintained for five consecutive trading days on or

        before July 26, 2006 (such date referred to as the "Vesting Date"); and

        provided, further, that payment of such stock bonus award shall be

        deferred for a period of five years after the Vesting Date (the

        "Deferred Payment Date"); provided, however, that upon the occurrence of

        an Acceleration Event (as defined below) the Deferred Payment Date shall

        be accelerated to coincide with the occurrence of the Acceleration

        Event. For purposes hereof, "Acceleration Event" shall mean (a) Kanders

        being continuously employed by the Company for a period of two years

        from and after the Vesting Date; (b) the occurrence of a "change in

        control" as defined in the Employment Letter; (c) termination of

        Kanders' employment by the Company without cause pursuant to Section

        8(d) of the Employment Letter; or (d) the death or permanent disability

        (as defined in the Employment Letter) of Kanders, and".

 

        2. Except as expressly amended by this Amendment No. 2, the Employment

Letter, as amended by Amendment No. 1 thereto, shall remain in full force and

effect.

 

        3. This Amendment No. 2 shall be governed by, and construed in

accordance with, the laws of the State of New York applicable to contracts

executed and to be fully performed in such State.

 

<PAGE>

 

ARMOR HOLDINGS, INC. AND SUBSIDIARIES

 

        4. This Amendment No. 2 may be executed in any number of counterparts

and via facsimile, but all such counterparts will together constitute one and

the same agreement.

 

        IN WITNESS WHEREOF, the parties hereto have executed and delivered this

Amendment No. 2 as of the day and year first written above.

 

                             ARMOR HOLDINGS, INC.

 

 

                             By: /s/ Robert R. Schiller

                                ------------------------------

                                Name:  Robert R. Schiller

                                Title: Chief Operating Officer and Chief

                                       Financial Officer

 

 

                             /s/ Warren B. Kanders

                             ---------------------------------

                             Warren B. Kanders

 

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