<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1997
REGISTRATION NO. 333-28879
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SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ARMOR HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
DELAWARE 3842, 7381 59-3392443
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Numbers) Identification No.)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
ARMOR HOLDINGS, INC. WARREN B. KANDERS
13386 INTERNATIONAL PARKWAY CHAIRMAN OF THE BOARD
JACKSONVILLE, FLORIDA 32218 ARMOR HOLDINGS, INC.
(904) 741-5400 13386 INTERNATIONAL PARKWAY
JACKSONVILLE, FLORIDA 32218
(904) 741-5400
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<TABLE>
<CAPTION>
<S> <C>
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive including area code, of agent for service)
offices)
</TABLE>
With copies to:
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<CAPTION>
<S> <C> <C>
ROBERT L. LAWRENCE, ESQ. STEVEN R. FINLEY, ESQ.
KANE KESSLER, P.C. GIBSON, DUNN & CRUTCHER LLP
1350 AVENUE OF THE AMERICAS 200 PARK AVENUE
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10166
(212) 541-6222 (212) 351-4000
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practical after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM
OF SECURITIES TO BE AGGREGATE OFFERING AMOUNT OF
REGISTERED AMOUNT TO BE REGISTERED PRICE(1) REGISTRATION FEE(2)
- ------------------------------ ----------------------- ------------------------- --------------------
<S> <C> <C> <C>
Common Stock, $.01 par value 4,600,000 $48,300,000 $14,948
- ------------------------------ ----------------------- -------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
(2) The Company has previously paid to the Commission a registration fee of
$14,948 pursuant to Rule 457(a).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Company's expenses in connection with the Offering described in this
registration statement are set forth below. All amounts except the Securities
and Exchange Commission registration fee, the National Association of
Securities Dealers, Inc. (the "NASD") filing fee are estimated.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee $ 14,948
NASD filing fee ..................................... 4,827
Printing and engraving expenses ..................... 200,000*
American Stock Exchange Fee ......................... 17,500
Accounting fees and expenses ........................ 200,000*
Legal fees and expenses ............................. 200,000*
Blue Sky fees and expenses .......................... 5,000
Transfer agent's fees and expenses .................. 2,000*
Miscellaneous ....................................... 155,725*
----------
Total ............................................... $800,000
==========
</TABLE>
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* Estimated
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the DGCL makes provision for the indemnification of
officers and directors of corporations in terms sufficiently broad to
indemnify the officers and directors of the Company under certain
circumstances from liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
As permitted by the DGCL, the Company's Charter provides that, to the
fullest extent permitted by the DGCL, no director shall be liable to the
Company or to its stockholders for monetary damages for breach of his
fiduciary duty as a director. Delaware law does not permit the elimination of
liability (i) for any breach of the director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) in
respect of certain unlawful dividend payments or stock redemptions or
repurchases or (iv) for any transaction from which the director derives an
improper personal benefit. The effect of this provision in the Charter is to
eliminate the rights of the Company and its stockholders (through
stockholders' derivative suits on behalf of the Company) to recover monetary
damages against a director for breach of fiduciary duty as a director thereof
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i)-(iv), inclusive, above.
These provisions will not alter the liability of directors under federal
securities laws.
The Company's Bylaws provide that the Company may indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Company) by reason of the fact that he is or was a director, officer,
employee or agent of the Company or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such
person's conduct was unlawful.
The Bylaws also provide that the Company may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right
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<PAGE>
of the Company to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by such person
in connection with the defense or settlement of such action or suit if such
person acted under similar standards, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Company unless and only to the extent
that the Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application that despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
The Bylaws also provide that to the extent a director or officer of the
Company has been successful in the defense of any action, suit or proceeding
referred to in the previous paragraphs or in the defense of any claim, issue,
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith; that indemnification provided for in the Bylaws shall not be
deemed exclusive of any other rights to which the indemnified party may be
entitled; and that the Company may purchase and maintain insurance on behalf
of a director or officer of the Company against any liability asserted
against him or incurred by him in any such capacity or arising out of his
status as such whether or not the Company would have the power to indemnify
him against such liabilities under such Bylaws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
CONVERTIBLE NOTES
On April 30, 1996, the Company completed a private placement of the
Convertible Notes pursuant to which $11.5 million aggregate principal amount
of Convertible Notes were sold by the Company solely to accredited investors
pursuant to the Convertible Subordinated Note Purchase Agreement. The
Convertible Notes were sold for the Company by placement agents. The
placement agents received an aggregate of $576,000 in commissions on the
placement of the Convertible Notes. The issuance of the Convertible Notes was
exempt from registration under the Securities Act by virtue of Section 4(2)
thereof. The Convertible Notes were convertible into shares of Common Stock.
The Company elected to redeem all of the Convertible Notes on December 18,
1996. In connection with such redemption, each Noteholder elected to convert
its Convertible Note into shares of Common Stock. A Registration Statement on
Form S-3 of the Company registering the shares of Common Stock into which the
Convertible Notes were convertible was declared effective by the Commission
on November 1, 1996. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."
ACQUISITION OF NIK PRODUCT LINE
Effective as of July 1, 1996, the Company, through NIK, acquired the NIK
Product Line. The Company acquired the NIK Product Line in exchange for
310,931 unregistered shares of the Company's Common Stock. The issuance of
the Common Stock was exempt from registration under the Securities Act by
virtue of Section 4(2) thereof. Such shares were registered pursuant to the
Company's Registration Statement on Form SB-2, which was declared effective
by the Commission on November 1, 1996.
ACQUISITION OF DTCOA ASSETS
On September 30, 1996, the Company, through DTC, acquired the DTCoA Assets
from DTCoA in exchange for approximately $838,000 in cash, 270,728
unregistered shares of the Company's Common Stock and the agreement by the
Company to assume certain specified liabilities of DTCoA. The issuance of the
Common Stock was exempt from registration under the Securities Act by virtue
of Section 4(2) or 4(6) thereof.
SHARES ISSUED TO KEY BANK OF WYOMING
In connection with the Company's acquisition of the DTCoA Assets, the
Company issued to Key Bank of Wyoming ("Key Bank") 358,714 unregistered
shares of the Company's Common Stock and
II-2
<PAGE>
delivered $662,500 as a cash advance against the future proceeds from the
sale of the 358,714 shares in exchange for Key Bank's agreement to release
its security interest in substantially all of the assets of DTCoA. The
issuance of the Common Stock was exempt from registration under the
Securities Act by virtue of Section 4(2) or 4(6) thereof. Such shares were
registered pursuant to the Company's Registration Statement on Form SB-2,
which was declared effective by the Commission on November 1, 1996.
DSL TRANSACTION
In connection with the Company's combination with DSL on April 16, 1997,
the Company issued 1,274,217 unregistered shares of Common Stock for all of
the outstanding ordinary share capital of DSL and paid $7.5 million in cash
for all of the outstanding preference shares. The Company also paid $6.9
million, plus interest, in repayment of DSL's outstanding credit facility.
The issuance of the Common Stock was exempt from registration under the
Securities Act by virtue of Section 4(2) thereof.
GTL ACQUISITION
In connection with the Company's acquisition of the remaining 50% of GTL
that it did not previously own on June 9, 1997, the Company issued 115,176
unregistered shares of Common Stock valued at $1.2 million, paid $570,000 in
cash at closing and agreed to pay $600,000 in cash on September 30, 1997,
subject to certain conditions. As part of this transaction, the Company also
agreed to make a $200,000 loan available to a former stockholder of GTL,
subject to certain conditions. The issuance of the Common Stock was exempt
from registration under the Securities Act by virtue of Section 4(2) thereof.
OPTIONS GRANTED TO RICHMONT CAPITAL PARTNERS I, L.P.
On May 15, 1996, the Company granted to Richmont an option to purchase
300,000 shares of the Company's Common Stock, at a price of $7.50 per share,
subject to adjustment, for a term of up to ten years (the "Richmont
Options").
The Richmont Options and the underlying shares, whether vested or
unvested, are callable by the Company in the event that the closing price per
share of the Company's Common Stock is equal to or greater than $10 for a
period of ten consecutive trading days after December 31, 1997, upon written
notice to Richmont given within 30 days of the conclusion of such ten
consecutive trading days during which the closing price per share of the
Company's Common Stock was equal to or greater than $10. In such event, the
Company may require Richmont to exercise the Richmont Options in whole with
respect to all such shares within ten days of such notice to Richmont. In the
event that Richmont does not exercise the Richmont Options, the Richmont
Options will lapse and be of no further force or effect. The issuance of the
options was exempt from registration under the Securities Act by virtue of
Section 4(2) or 4(6) thereof.
1996 AMENDED AND RESTATED STOCK OPTION PLAN
In 1996 and 1997, an aggregate of 399,000 stock options were granted to
certain executive officers, employees and consultants of the Company pursuant
to the 1996 Option Plan at exercise prices ranging from $6.062 to $9.125 per
share. The exercise prices represent the market price of the Common Stock on
the date of the grant. The issuance of the options was exempt from
registration under the Securities Act by virtue of Section 4(2) thereof.
1996 AMENDED AND RESTATED NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Company has granted an option to purchase 75,000 shares of Common
Stock to each of Messrs. Ehrlich, Sokolow and Strauss and Ms. Townsend, each
a director of the Company, pursuant to the 1996 Directors Plan.
Upon their initial election to the Board of Directors on January 18, 1996,
each of Messrs. Ehrlich and Sokolow, both of whom are Non-Employee Directors,
were granted 75,000 stock options pursuant to the
II-3
<PAGE>
terms of the 1996 Directors Plan, subject to stockholder approval of such
plan. Such options vest in three equal annual installments on January 18,
1997, 1998 and 1999, at an exercise price of $3.75 per share, the closing
trading price of the Company's Common Stock on the National Association of
Securities Dealers Automated Quotation System on January 18, 1996.
Upon his initial election to the Board of Directors on May 13, 1996, Mr.
Strauss, a Non-Employee Director, was granted 75,000 stock options pursuant
to the terms of the 1996 Directors Plan, subject to stockholder approval of
such plan. Such options vest in three equal annual installments on May 13,
1997, 1998, and 1999, at an exercise price of $7.50 per share, the closing
trading price of the Company's Common Stock on the American Stock Exchange on
May 13, 1996.
Upon her initial election to the Board of Directors on December 9, 1996,
Ms. Townsend, a Non-Employee Director, was granted 75,000 stock options
pursuant to the terms of the 1996 Directors Plan. Such options vest in three
equal annual installments on December 9, 1997, 1998 and 1999, at an exercise
price of $8.00 per share, the closing trading price of the Company's Common
Stock on the American Stock Exchange on December 9, 1996.
The issuance of the options was exempt from registration under the
Securities Act by virtue of Section 4(2) thereof.
OTHER STOCK OPTION GRANTS
Since January 1996, the Company has issued to certain key employees
options to purchase 76,500 shares of Common Stock outside of the 1994
Incentive Stock Plan and the 1996 Option Plan and exclusive of the Richmont
Options and those options granted under the 1996 Directors Plan. Such options
were awarded at exercise prices ranging from $0.97 to $1.00 per share. Of
this amount, 12,334 options were forfeited, 6,166 options were exercised and
58,000 remain outstanding. The shares of Common Stock underlying the options
are restricted from further sale, transfer or disposition unless registered
or an exemption is available from the registration requirements of the
Securities Act. The issuance of the options was exempt from registration
under the Securities Act by virtue of Section 4(2) thereof.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
1.1 Form of Underwriting Agreement*
2.1 Share Acquisition Agreement, dated as of April 7, 1997, between Bodycote, AHL and the Company
(filed as Exhibit 2.1 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
2.2 Agreement for the Sale and Purchase of the Whole of the Issued Share Capital of DSL, dated April
16, 1997, between the Company, AHL, NatWest Ventures Nominees Limited and Others and Martin
Brayshaw (filed as Exhibit 2.2 to Form 8-K, Current Report of the Company, dated April 22, 1997
and incorporated herein by reference).
2.3 Share Acquisition Agreement, dated as of June 9, 1997, between the Company, Strontian Holdings
Limited Alpha-A Limited and Others (filed as Exhibit 2.1 to Form 8-K, Current Report of the
Company, dated June 24, 1997 and incorporated by reference).
3.1 Certificate of Incorporation of the Company (filed as Exhibit 3.1 to Form 8-K, Current Report of
the Company, dated September 3, 1996, and incorporated herein by reference).
3.2 Certificate of Merger of American Body Armor & Equipment, Inc. and the Company (filed as Exhibit
3.2 to Form 8-K, Current Report of the Company, dated September 3, 1996, and incorporated herein
by reference).
II-4
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- ------------------------------------------------------------------------------------------------
3.3 Bylaws of the Company (filed as Exhibit 3.3 to Form 8-K, Current Report of the Company, dated
September 3, 1996, and incorporated herein by reference).
4.1 Specimen of Certificate for Common Stock*
5.1 Opinion of Kane Kessler, P.C.*
10.1 Loan Agreement between the Company and Barnett Bank, dated November 14, 1996 (filed as Exhibit
10.1 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by reference).
10.2 Promissory Note, dated November 14, 1996, in the principal amount of $10 million, made by the
Company for the benefit of Barnett Bank (filed as Exhibit 10.2 to Form 10-KSB for fiscal 1996,
dated March 25, 1997 and incorporated herein by reference).
10.3 Acceptance Credit Agreement, dated November 14, 1996, between the Company and Barnett Bank
(filed as Exhibit 10.3 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated
herein by reference).
10.4 Security Agreement, dated November 14, 1996, between the Company and Barnett Bank (filed as
Exhibit 10.4 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by
reference).
10.5 Environmental Agreement, dated November 14, 1996, between the Company and Barnett Bank (filed as
Exhibit 10.5 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by
reference).
10.6 Waiver of Jury Trial, dated November 14, 1996, between Barnett Bank, the Company, NIK, DTC and
Armor Holdings Properties, Inc. (filed as Exhibit 10.6 to Form 10-KSB for fiscal 1996, dated
March 25, 1997 and incorporated herein by reference).
10.7 Security Agreement, dated November 14, 1996, between DTC and Barnett Bank (filed as Exhibit 10.7
to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by reference).
10.8 Security Agreement, dated November 14, 1997, between NIK and Barnett Bank (filed as Exhibit 10.8
to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by reference).
10.9 Security Agreement, dated November 14, 1996, between Armor Holdings Properties, Inc. and Barnett
Bank (filed as Exhibit 10.9 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and
incorporated herein by reference).
10.10 Guaranty of Payment dated November 14, 1996, by DTC for the benefit of Barnett Bank (filed as
Exhibit 10.10 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by
reference).
10.11 Guaranty of Payment, dated November 14, 1996 by NIK for the benefit of Barnett Bank (filed as
Exhibit 10.11 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by
reference).
10.12 Guaranty of Payment, dated November 14, 1996, by Armor Holdings Properties, Inc. for the benefit
of Barnett Bank (filed as Exhibit 10.12 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and
incorporated herein by reference).
10.13 Employment Agreement between Jonathan M. Spiller and the Company, dated as of January 18, 1996
(filed as Exhibit 10.6 to Form 10-KSB for fiscal 1995 and incorporated herein by reference).
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- ------------------------------------------------------------------------------------------------
10.14 Employment Agreement between Richard T. Bistrong and the Company, dated as of January 18, 1996
(filed as Exhibit 10.8 to Form 10-KSB for fiscal 1995 and incorporated herein by reference).
10.15 Employment Agreement between Robert R. Schiller and the Company, effective July 24, 1996 (filed
as Exhibit 10.13 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated herein by
reference).
10.16 Service Agreement between Alastair G.A. Morrison, the Company and DSL, dated April 16, 1997*.
10.17 Service Agreement between the Hon. Richard N. Bethell, the Company and DSL, dated April 16,
1997*.
10.18 Service Agreement between Martin Brayshaw, the Company and DSL, dated April 16, 1997*.
10.19 Jacksonville International Tradeport Purchase and Sale Agreement, dated October 22, 1996,
between the Company and Wilma/Skyland Joint Venture, Ltd. (filed as Exhibit 10.32 to Form 10-KSB
for fiscal 1996, dated March 25, 1997 and incorporated herein by reference).
10.20 Assignment of Purchase and Sale Agreement, dated October 22, 1996, between the Company and Armor
Holdings Properties, Inc. (filed as Exhibit 10.33 to Form 10-KSB for fiscal 1996, dated March
25, 1997 and incorporated herein by reference).
10.21 Construction Escrow Agreement, dated October 22, 1996, between the Company, Armor Holdings
Properties, Inc., GB Investment & Company, Inc. and Kent, Ridge & Crawford, as escrow agent
(filed as Exhibit 10.34 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated
herein by reference).
10.22 Agreement between Owner and Construction Manager, dated October 10, 1996, between the Company,
Armor Holdings Properties, Inc. and GB Investment & Company, Inc., as construction manager
(filed as Exhibit 10.35 to Form 10-KSB for fiscal 1996, dated March 25, 1997 and incorporated
herein by reference).
10.23 Tax Deed, dated April 7, 1997, between the Company and Bodycote (filed as Exhibit 10.1 to Form
8-K, Current Report of the Company, dated April 22, 1997 and incorporated herein by reference).
10.24 Form of Escrow Agreement, dated April 16, 1997, between the Company, the Warrantors and Ashurst
Morris Crisp (filed as Exhibit 10.2 to Form 8-K, Current Report of the Company, dated April 22,
1997 and incorporated herein by reference).
10.25 Form of Registration Rights Agreement, dated April 16, 1997, between the Company and the Vendors
(filed as Exhibit 10.3 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
10.26 Amended and Restated Loan Agreement, dated March 26, 1997, between the Company and Barnett Bank
(filed as Exhibit 10.4 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
10.27 Renewal Promissory Note, dated March 26, 1997, made by the Company in favor of Barnett Bank
(filed as Exhibit 10.5 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
10.28 Form of Amended and Restated Security Agreement, dated March 26, 1997, made by the Company and
each of its U.S. subsidiaries, in favor of Barnett Bank (filed as Exhibit 10.6 to Form 8-K,
Current Report of the Company, dated April 22, 1997 and incorporated herein by reference).
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- ------------------------------------------------------------------------------------------------
10.29 Pledge Agreement, dated March 26, 1997, made by the Company in favor of Barnett Bank (filed as
Exhibit 10.7 to Form 8-K, Current Report of the Company, dated April 22, 1997 and incorporated
herein by reference).
10.30 Form of Collateral Assignment, dated March 26, 1997, made by DTC and NIK in favor of Barnett
Bank (filed as Exhibit 10.8 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
10.31 Amendment to Acceptance Credit Agreement, dated March 26, 1997, between the Company and Barnett
Bank (filed as Exhibit 10.9 to Form 8-K, Current Report of the Company, dated April 22, 1997 and
incorporated herein by reference).
10.32 Consent with respect to Guaranty of Payment, dated as of March 26, 1997, of DTC, NIK and Armor
Holdings Properties, Inc. (filed as Exhibit 10.10 to Form 8-K, Current Report of the Company,
dated April 22, 1997 and incorporated herein by reference).
10.33 Form of Guaranty of Payment, dated November 14, 1996 (filed as Exhibit 10.11 to Form 8-K,
Current Report of the Company, dated April 22, 1997 and incorporated herein by reference).
10.34 Form of Option for 300,000 shares of Common Stock, dated May 15, 1996, granted to Richmont
Capital Partners I, L.P.**
10.35 Agreement, dated June 9, 1997, between the Company and members of senior management of GTL
(filed as Exhibit 10.1 to Form 8-K, Current Report of the Company, dated June 24, 1997 and
incorporated by reference).
10.36 Taxation Indemnity, dated June 9, 1997, by Strontian Holdings Limited in favor of the Company
(filed as Exhibit 10.2 to Form 8-K, Current Report of the Company, dated June 24, 1997 and
incorporated by reference).
10.37 Services Agreement, dated June 9, 1997, between GTL, Alpha-A Limited and others (filed as
Exhibit 10.3 to Form 8-K, Current Report of the Company, dated June 24, 1997 and incorporated by
reference).
10.38 Service Agreement, dated June 9, 1997, between GTL and Mikhail Golovatov (filed as Exhibit 10.4
to Form 8-K, Current Report of the Company, dated June 24, 1997 and incorporated by reference).
10.39 Deed of Covenant, dated June 9, 1997, between the Company, Defence Systems Limited, DSL
(Overseas) Limited, GTL and Igor Orekhov (filed as Exhibit 10.5 to Form 8-K, Current Report of
the Company, dated June 24, 1997 and incorporated by reference).
10.40 Deed of Covenant, dated June 9, 1997, between the Company, Defence Systems Limited, DSL
(Overseas) Limited, GTL and Mikhail Golovatov (filed as Exhibit 10.6 to Form 8-K, Current Report
of the Company, dated June 24, 1997 and incorporated by reference).
10.41 Loan Agreement, dated June 9, 1997, between Strontian Holdings Limited and Defence Systems
Limited (filed as Exhibit 10.7 to Form 8-K, Current Report of the Company, dated June 24, 1997
and incorporated by reference).
10.42 Stock Pledge Agreement, dated June 9, 1997, between Defence Systems Limited, Strontian Holdings
Limited, Mikhail Golovatov and Igor Orekhov (filed as Exhibit 10.8 to Form 8-K, Current Report
of the Company, dated June 24, 1997 and incorporated by reference).
10.43 Termination Agreement of a Joint Venture Agreement relating to GTL, dated June 9, 1997, between
DSL (Overseas) Limited, Strontian Holdings Limited, GTL, Defence Systems Limited and Alpha-A
Limited (filed as Exhibit 10.9 to Form 8-K, Current Report of the Company, dated June 24, 1997
and incorporated by reference).
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ----------- ------------------------------------------------------------------------------------------------
21.1 Subsidiaries of the Company**
23.1 Consent of Deloitte & Touche LLP**
23.2 Consent of KPMG**
23.3 Consent of Kane Kessler, P.C. (included in Exhibit 5.1)*
24.1 Power of Attorney (included in signature page to registration statement)**
</TABLE>
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* Filed herewith.
** Previously filed.
(b) Financial Statement Schedule. Schedule II--Valuation and Qualifying
Accounts.
All other schedules are omitted because the information is not required or
because the information is included in the Consolidated Financial Statements
or the notes thereto.
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(b) The undersigned Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Company has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Jacksonville, State of Florida, on July 22, 1997.
ARMOR HOLDINGS, INC.
By: /s/ Jonathan M. Spiller
-------------------------------
Jonathan M. Spiller
Chief Executive Officer and
President
II-9
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacity indicated on July 22, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------- ------------------------------------------------
<S> <C>
/s/ Jonathan M. Spiller Chief Executive Officer and President
----------------------- (Principal Executive Officer)
Jonathan M. Spiller
* Vice President of Finance and Secretary
----------------------- (Principal Financial and Accounting Officer)
Carol T. Burke
* Chairman of the Board
-----------------------
Warren B. Kanders
* Director
-----------------------
Burtt R. Ehrlich
* Director
-----------------------
Nicolas Sokolow
* Director
-----------------------
Thomas W. Strauss
* Director
-----------------------
Richard Bartlett
* Director
-----------------------
Alair A. Townsend
</TABLE>
* By: /s/ Jonathan M. Spiller
-----------------------------------------------------------------------
Jonathan M. Spiller
As attorney-in-fact for each
of the persons indicated
II-10
<PAGE>
ARMOR HOLDINGS, INC.
FINANCIAL STATEMENT SCHEDULE
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS
ENDED DECEMBER 31, 1994, DECEMBER 31, 1995, AND DECEMBER 28, 1996
<TABLE>
<CAPTION>
VALUATION ALLOWANCE FOR BALANCE AT
ACCOUNTS RECEIVABLE AND BEGINNING OF TRANSFERS FROM BALANCE AT END
INVENTORY PERIOD NET CHANGES ACQUISITIONS OF PERIOD
- ---------------------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Year ended December 31,
1994........................ $498,968 $(231,212) $267,756
Year ended December 31,
1995........................ $267,756 $ 27,075 $294,831
Year ended December 28,
1996........................ $294,831 $ 11,597 $165,082 $471,510
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
The following Exhibits are filed herewith.
<TABLE>
<CAPTION>
EXHIBIT DOCUMENT
- ----------- ------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement
4.1 Specimen of Certificate for Common Stock
5.1 Opinion of Kane Kessler, P.C.
10.16 Service Agreement between Alastair G.A. Morrison, the Company and DSL, dated April 16,
1997.
10.17 Service Agreement between the Hon. Richard N. Bethell, the Company and DSL, dated April
16, 1997.
10.18 Service Agreement between Martin Brayshaw, the Company and DSL, dated April 16, 1997.
23.3 Consent of Kane Kessler, P.C. (included in Exhibit 5.1)
</TABLE>
<PAGE>
ARMOR HOLDINGS, INC.
COMMON STOCK
($0.01 Par Value)
UNDERWRITING AGREEMENT
July ___, 1997
<PAGE>
UNDERWRITING AGREEMENT
July ___, 1997
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Equitable Securities Corporation
511 Union Street, Suite 800
Nashville, Tennessee 37219
Stephens Inc.
101 East Kennedy Boulevard, Suite 4050
Tampa, Florida 33602
as Managing Underwriters
Dear Sirs:
Armor Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell and the persons named in Schedule B (the "Selling
Shareholders") propose to sell to the underwriters named in Schedule A (the
"Underwriters") an aggregate of 4,600,000 shares of Common Stock, par value $
0.01 per share (the "Common Stock"), of the Company, of which 4,000,000 shares
are to be issued and sold by the Company (the "Firm Shares") and an aggregate
of 600,000 shares are to be sold by the Selling Shareholders in the respective
amounts set forth opposite their names in Schedule B, solely for the purpose of
covering overallotments (the "Additional Shares"). The Additional Shares and
the Firm Shares are collectively referred to as the "Shares". The Shares are
described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the "Act"), with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1, including a
prospectus, relating to the Shares. The Company has furnished to you, for use
by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (collectively, the "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement
as in effect at the time of execution of this Agreement or, if the registration
statement is
1
<PAGE>
not yet effective, as amended when it becomes effective, including
all documents filed as a part thereof, and including any registration statement
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act
and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is herein called the
"Registration Statement", and the prospectus in the form filed by the Company
with the Commission pursuant to Rule 424(b) under the Act or, if no such filing
is required, in the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "Prospectus".
The Company, the Selling Shareholders and the Underwriters
agree as follows:
1. Sale and Purchase. On the basis of the representations and
warranties and the other terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Firm Shares (subject to such adjustment as you may determine to avoid
fractional shares) which bears the same proportion to the number of Firm Shares
to be sold by the Company as the number of Firm Shares set forth opposite the
name of such Underwriter on Schedule A bears to the total number of Firm Shares
to be sold by the Company, in each case at a purchase price of $____ per Share.
You may release the Firm Shares for public sale promptly after this Agreement
becomes effective. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, on the basis of the representations and
warranties and the other terms and conditions herein set forth, the Selling
Shareholders hereby grant to the several Underwriters an option to purchase,
and the Underwriters shall have the right to purchase, severally and not
jointly, from such Selling Shareholders all or a portion of the Additional
Shares as may be necessary to cover overallotments made in connection with the
offering of the Firm Shares, at the same purchase price per share to be paid by
the several Underwriters to the Company for the Firm Shares. This option may be
exercised in whole or in part from time to time on or before the thirtieth day
following the date hereof, by written notice to the Company. Any such notice
shall set forth the aggregate number of Additional Shares as to which the
option is being exercised, and the
2
<PAGE>
date and time when the Additional Shares are to be delivered (any such date and
time being herein referred to as an "additional time of purchase"); provided,
however, that no additional time of purchase shall occur earlier than the time
of purchase (as defined below) nor earlier than the second business day* after
the date on which the option shall have been exercised nor later than the
eighth business day after the date on which the option shall have been
exercised. The number of Additional Shares to be sold to each Underwriter at an
additional time of purchase shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased at such additional
time of purchase as the number of Firm Shares set forth opposite the name of
such Underwriter on Schedule A bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares).
2. Payment and Delivery. Payment of the purchase price for
the Firm Shares shall be made to the Company by wire transfer, or certified or
official bank checks in immediately available funds, at the office of Dillon,
Read & Co. Inc. in New York City, against delivery of the certificates for the
Firm Shares to you for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 9:30 A.M., New York City time, on July
___, 1997 (unless another time shall be agreed to by you and the Company or
unless postponed in accordance with the provisions of Section 9). The time at
which such payment and delivery are actually made is called the "time of
purchase". Certificates for the Firm Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the time of purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by you, the
Company agrees to make such certificates available to you for such purpose at
least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall
be made to the Attorney-in-fact referred to in Section 4(d) on behalf of the
Selling Shareholders at the additional time of purchase in the same manner and
at the same office as the payment for the Firm Shares. Certificates for the
Additional Shares shall be delivered to
- ----------------------
* As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
3
<PAGE>
you in definitive form in such names and in such denominations as you shall
specify on the second business day preceding the additional time of purchase.
For the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Selling Shareholders agree to make such
certificates available to you for such purpose at least one full business day
preceding the additional time of purchase.
3. Representations and Warranties of the Company and the
Management Selling Shareholders. The Company and each of Kanders Florida
Holdings, Inc. and Jonathan M. Spiller (the "Management Selling Shareholders"),
jointly and severally, represent and warrant to each of the Underwriters that:
(a) Each Preliminary Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act; when the Registration
Statement becomes or became effective and at all times subsequent
thereto up to the time of purchase and the additional time of
purchase, the Registration Statement and the Prospectus, and any
supplements or amendments thereto, complied and will comply in all
material respects with the provisions of the Act; and the Registration
Statement at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and the Prospectus at all such times did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company and the
Management Selling Shareholders make no representation or warranty
with respect to any statement contained in the Registration Statement
or the Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus and set forth in the section
of the Registration Statement and the Prospectus entitled
"Underwriting".
(b) As of the date of this Agreement, the Company has an
authorized capitalization as set forth under the column entitled
"March 29, 1997, Actual" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" and, as of the time of
purchase, the capitalization of the Company will be as set forth under
the column entitled "March 29, 1997, Pro Forma As Adjusted" in the
section of the Registration Statement and the Prospectus
4
<PAGE>
entitled "Capitalization"; all of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable and are free of statutory
and contractual preemptive rights.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with full power and authority to (i) own its properties
and conduct its business as described in the Registration Statement
and the Prospectus and (ii) execute and deliver this Agreement and to
issue, sell and deliver the Firm Shares as herein contemplated.
(d) Set forth on Schedule D is a list of all subsidiaries of
the Company that own any assets or have any liabilities or have
conducted business during the period beginning January 1, 1992 (the
"Material Subsidiaries"). All of the issued and outstanding shares of
capital stock of each of the Material Subsidiaries are owned directly
or indirectly by the Company; all of such shares have been duly
authorized and validly issued and are fully paid and nonassessable
and, except as described in the Prospectus, are owned free and clear
of any pledge, lien, encumbrance, security interest or other claim;
there are no outstanding rights, subscriptions, warrants, calls,
preemptive rights, options or other agreements of any kind with
respect to the capital stock of any of the Subsidiaries.
(e) Each of the Material Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation, with
full corporate power and authority to own its respective properties
and to conduct its respective businesses.
(f) Each of the Company and each of the Material Subsidiaries
is duly qualified or licensed by and is in good standing in each
jurisdiction in which it owns or leases property or conducts its
business and in each other jurisdiction in which the failure,
individually or in the aggregate, to be so qualified or licensed could
reasonably be expected to have a material adverse effect on the
properties, assets, operations, business,
5
<PAGE>
business prospects or condition (financial or other) of the Company
and the Material Subsidiaries taken as a whole; each of the Company
and each of the Material Subsidiaries is in compliance in all material
respects with the laws, orders, rules, regulations and directives
issued or administered by each such jurisdiction.
(g) Neither the Company nor any of the Material Subsidiaries
is in breach of, or in default under (nor has any event occurred which
with notice, lapse of time or both would constitute a breach of, or
default under), its charter or bylaws, or in the performance or
observance of any obligation, agreement, covenant or condition
contained in any license, indenture, lease, mortgage, deed of trust,
bank loan or credit agreement, material supply agreement or other
agreement or instrument to which the Company or any of the Material
Subsidiaries is a party or by which any of them may be bound or
affected, which breach or default could have a material adverse effect
on the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Material
Subsidiaries taken as a whole. The execution, delivery and performance
of this Agreement, the issuance of the Firm Shares, the sale of the
Shares, the application of the net proceeds thereof as described in
the Prospectus and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), the charter or bylaws of the Company or any of the Material
Subsidiaries or under any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement, material
supply agreement or other agreement or instrument to which the Company
or any of the Material Subsidiaries is a party or by which any of them
or their properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the Material
Subsidiaries.
(h) The Firm Shares, when issued and delivered to and paid
for by the Underwriters as contemplated hereby, will be duly
authorized, validly issued, fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive
right or other claim. The Additional Shares are duly authorized,
validly issued, fully paid and non-assessable.
6
<PAGE>
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus; and the certificates
for the Shares are in due and proper form and the holders of the
Shares after making payment therefor will not be subject to personal
liability by reason of being such holders.
(k) No approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance of the Firm Shares and sale of the Shares as
contemplated hereby, other than registration of the Shares under the
Act, clearance of the offering of the Shares with the National
Association of Securities Dealers, Inc. (the "NASD"), listing the Firm
Shares on the American Stock Exchange, Inc. (the "AMEX") and any
necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters.
(l) Each person who has the right, contractual or otherwise,
to cause the Company to register pursuant to the Act any securities of
the Company in consequence of the issue and sale of the Shares to the
Underwriters hereunder either included such securities in the
Registration Statement or duly waived such right and each person who
has the right, contractual or otherwise, to cause the Company to issue
to it any securities of the Company in consequence of the issue and
sale of the Shares to the Underwriters hereunder has duly waived such
right.
(m) Each of (i) Deloitte & Touche LLP, whose reports on the
certain consolidated financial statements and the supplemental
consolidated financial statements of the Company and (ii) KPMG, whose
report on the consolidated financial statements of each of DSL Group
Limited and DSL Holdings Limited are included in the Registration
Statement and the Prospectus, are independent public accountants with
respect to the Company as required by the Act and the applicable
published rules and regulations thereunder.
(n) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the
7
<PAGE>
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required.
(o) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Material Subsidiaries or any of their properties, at law or in equity,
or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency that could
result in a judgment, decree or order having a material adverse effect
on the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Material
Subsidiaries taken as a whole.
(p) The audited and unaudited financial statements included
in the Registration Statement and the Prospectus present fairly the
consolidated financial condition of the Company and the Subsidiaries
as of the dates indicated and the consolidated results of operations
and cash flows of the Company and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may be otherwise stated in the Registration Statement or
the Prospectus, there has not been: (A) any material adverse change in
the properties, assets, operations, business, business prospects or
condition (financial or other), present or prospective, of the Company
and the Material Subsidiaries taken as a whole; (B) any transaction,
that is material to the Company and the Material Subsidiaries taken as
a whole, contemplated or entered into by the Company or any of the
Material Subsidiaries; or (C) any obligation, contingent or otherwise,
directly or indirectly incurred by the Company or any of the Material
Subsidiaries that is material to the Company and the Material
Subsidiaries taken as a whole.
(r) The Company has obtained the agreement of the
shareholders listed on Schedule C not to, directly or indirectly,
offer, sell, contract to sell, make subject to any purchase option or
otherwise dispose of or cause the disposition of any shares of Common
Stock, or any
8
<PAGE>
securities convertible into or exerciseable or exchangeable for Common
Stock prior to the expiration of 180 days from the date of the
effectiveness of the Registration Statement without the prior written
consent of Dillon, Read & Co. Inc., except for transfers to any such
shareholder's spouse, child, grandchild, parent or sibling, or to a
trust for the benefit of such shareholder or any such related person,
so long as such transferee executes a copy of the letter agreement
executed by such shareholder and becomes bound thereby.
(s) Neither the Company nor any of the Material Subsidiaries
has violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions
of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in
any material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of the
Company and the Material Subsidiaries taken as a whole.
(t) The Company and each of the Material Subsidiaries has
such permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits"), including without limitation
under any applicable Environmental Laws, as are necessary to own,
lease and operate its respective properties and to conduct its
business except where the failure to have any such permit, license,
franchise or authorization would not result in any material adverse
effect on the properties, assets, operations, business, business
prospects or condition (financial or otherwise) of the Company and the
Material Subsidiaries taken as a whole; the Company and each of the
Material Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit.
(u) Neither the Company nor any of the Material Subsidiaries,
nor any employee of the Company or any of the Material Subsidiaries,
has made any payment of
9
<PAGE>
funds of the Company or any of the Material Subsidiaries prohibited by
law, and no funds of the Company or any of the Material Subsidiaries
have been set aside to be used for any payment prohibited by law.
(v) The Company and the Subsidiaries have filed all federal
or state income or franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or might be asserted against the Company or
any of the Subsidiaries; all material tax liabilities are adequately
provided for on the books of the Company and the Subsidiaries.
(w) The Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
herein contemplated.
(x) The Company and the Material Subsidiaries have good title
to all properties and assets owned or leased by them, in each case
free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects (except such as are described or
referred to in the Prospectus and the financial statements and the
notes thereto contained therein or such as do not interfere in any
material respect with the use made and proposed to be made of such
property by the Company and the Material Subsidiaries).
(y) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is subject to regulation under such Act.
4. Further Representations and Warranties of the Selling
Shareholders. Each Selling Shareholder, severally and not jointly, further
represents and warrants to each Underwriter that:
(a) Such Selling Shareholder is and at the time of delivery
of the Additional Shares to be sold by such Selling Shareholder will
be the lawful owner of the number of Additional Shares to be sold by
such Selling Shareholder pursuant to this Agreement and, at the time
of delivery thereof, will have valid and marketable title to such
Additional Shares, and upon delivery of and payment for such
Additional Shares the Underwriters will acquire valid and marketable
title to such Additional Shares free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction
on transfer or other defect in
10
<PAGE>
title, assuming each of the Underwriters has purchased the Additional
Shares purchased by it in good faith and without notice of any adverse
claim.
(b) Such Selling Shareholder has and at the time of delivery
of such Additional Shares will have full legal right, power and
capacity, and any approval required by law to sell, assign, transfer
and deliver such Additional Shares in the manner provided in this
Agreement.
(c) The Power of Attorney executed by the Selling
Shareholders (the "Power of Attorney") and the Custody Agreement among
the Selling Shareholders and American Stock Transfer & Trust Company
(the "Custody Agreement") have been duly executed and delivered by
such Selling Shareholder and are legal, valid and binding agreements
of such Selling Shareholder, enforceable in accordance with their
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity.
(d) Such Selling Shareholder has duly and irrevocably
authorized the Attorney-in-Fact (as defined in the Power of Attorney),
on behalf of such Selling Shareholder, to execute and deliver this
Agreement and any other document necessary or desirable in connection
with the transactions contemplated hereby and to deliver the Shares to
be sold by such Selling Shareholder and receive payment therefor
pursuant hereto.
(e) The sale of the Additional Shares by such Selling
Shareholder pursuant hereto is not prompted by any material adverse
information concerning the Company; and all information furnished in
writing by or on behalf of such Selling Shareholder specifically for
use in the Registration Statement and the Prospectus, and any
supplement or amendment thereto, is and will be when the Registration
Statement became effective and at all times subsequent thereto up to
the time of purchase and the additional time of purchase, true and
correct and complete in all material respects and at all such times
did not and will not contain any untrue statement of material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
11
<PAGE>
(f) The consummation of the transactions contemplated hereby
and by the Power of Attorney and by the Custody Agreement and the
fulfillment of the terms hereof and thereof will not constitute a
breach or violation of or default under any trust, indenture,
agreement or other instrument to which any such Selling Shareholder is
a party or by which any such Selling Shareholder is bound.
5. Certain Covenants of the Company. The Company hereby
agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect as long as
required for the distribution of the Shares, provided that the Company
shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state
(except service of process with respect to the offering and sale of
the Shares); promptly to advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to obtain the withdrawal of any order of suspension at the
earliest practicable moment;
(b) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendment or
supplement thereto after the effective date of the Registration
Statement) as the Underwriters reasonably may request for the purposes
contemplated by the Act;
(c) to advise you promptly and if requested by you to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes
effective and (ii) when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act, if required under the Act
(which the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission for
12
<PAGE>
amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus and to file no such amendment or
supplement to which you shall object in writing;
(e) to furnish to you and, upon request to each of the other
Underwriters, for a period of five years from the date of this
Agreement (i) copies of all reports or other communications that the
Company shall send to its shareholders or from time to time shall
publish or publicly disseminate and (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar form as may be designated by the
Commission, and any other document filed by the Company pursuant to
Section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(f) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a
prospectus relating to the Shares is required to be delivered under
the Act that, in the reasonable judgment of the Company, would require
the making of any change in the Prospectus then being used, so that
the Prospectus, as then supplemented, would not include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading and, during
such time, promptly to prepare and furnish, at the Company's expense,
to the Underwriters such amendments or supplements to such Prospectus
as may be necessary to reflect any such change in such quantities as
reasonably requested by the Underwriters, and to furnish to you a copy
of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(g) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which need
not be audited and which will satisfy the provisions of Section 11(a)
of the Act including, at the option of the Company, Rule 158)
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<PAGE>
covering a period of 12 months beginning after the effective date of
the Registration Statement but ending not later than 15 months after
the date of the Registration Statement, as soon as is reasonably
practicable after the termination of such 12-month period;
(h) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(i) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements,
if any, of the Company and the Subsidiaries that have been read by the
Company's independent certified public accountants as stated in their
letter to be furnished pursuant to Section 8(b);
(j) to apply the net proceeds from the sale of the Shares
sold by the Company in the manner set forth under the caption "Use of
Proceeds" in the Registration Statement and the Prospectus;
(k) to use its best efforts to cause the Shares to be
listed on the American Stock Exchange;
(l) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes
effective or is terminated, to pay all expenses, fees and taxes (other
than (x) any transfer taxes and (y) fees and disbursements of your
counsel except as set forth under Section 7 and clauses (iii) and (iv)
below) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus
and any amendment or supplement thereto, and the printing and
furnishing of copies of each thereof to you and to dealers (including
costs of mailing and shipment), (ii) the issuance, sale and delivery
of the Shares, (iii) the word processing or printing of this Agreement
and any dealer agreements, and the reproduction or printing and
furnishing of copies of each thereof to you and to dealers (including
costs of mailing and shipment), (iv) the qualification of the Shares
for offering and sale under state laws as aforesaid (including
reasonable legal fees and filing
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<PAGE>
fees and other disbursements of your counsel) and the printing and
furnishing of copies of any blue sky surveys to you and to dealers,
(v) any listing of the Shares on any securities exchange or
qualification of the Shares for inclusion in the Nasdaq National
Market and any registration thereof under the Exchange Act, (vi) any
filing for review of the public offering of the Shares by the NASD and
(viii) the performance of the Company's and the Selling Shareholders'
other obligations hereunder;
(m) not to sell, contract to sell, grant any option to sell
(except employee stock options pursuant to the Company's existing
employee stock option plans), transfer or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock or permit the registration under the
Act of any shares of Common Stock, except for the registration of the
Shares and the sales to you pursuant to this Agreement for a period
commencing on the date hereof and continuing for 180 days after the
date of effectiveness of the Registration Statement, without the prior
written consent of Dillon, Read & Co. Inc.; provided, however, that
the foregoing will not restrict the issuance by the Company of shares
of Common Stock in a private transaction in connection with the
acquisition by the Company of a business or assets so long as the
recipient of such shares of Common Stock executes a letter
substantially in the form of the letters executed by the shareholders
listed on Schedule C referred to in Section 8(i); and
(n) to refrain from investing the proceeds from the sale of
the Shares in a manner to cause the Company or any of the Subsidiaries
to become an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6. Certain Covenants of the Selling Shareholders. Each
Selling Shareholder agrees with each Underwriter that such Selling Shareholder
will not, directly or indirectly, offer, sell, contract to sell, make subject
to any purchase option or otherwise dispose of or cause the disposition of any
shares of Common Stock, or any securities convertible into or exerciseable or
exchangeable for Common Stock prior to the expiration of 180 days from the date
of the effectiveness of the Registration Statement without the prior written
consent of Dillon, Read & Co. Inc., except for transfers to any such
shareholder's spouse, child, grandchild, parent or sibling, or to a trust for
the benefit
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<PAGE>
of such shareholder or any such related person, so long as such transferee
executes a copy of the letter agreement executed by such shareholder and
becomes bound thereby.
7. Reimbursement of Underwriters' Expenses. If the Firm
Shares or the Additional Shares are not delivered for any reason, other than
the failure of the Underwriters to purchase the Firm Shares or the Additional
Shares as provided herein (unless such failure is permitted under the
provisions of Section 8 or Section 9(b) of this Agreement), the Company will
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Shareholders on the date hereof and at the time of purchase (and the several
obligations of the Underwriters at any additional time of purchase are subject
to the accuracy of the representations and warranties on the part of the
Company and the Selling Shareholders on the date hereof and at the time of
purchase and at such additional time of purchase, as the case may be), the
performance by each of the Company and the Selling Shareholders of its and
their obligations hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase
and at such additional time of purchase, as the case may be, an
opinion of Kane Kessler, P.C., counsel for the Company and the Selling
Shareholders, addressed to the Underwriters and dated the time of
purchase or such additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
satisfactory to Gibson, Dunn & Crutcher LLP, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and
authority (A) to own its properties and conduct its business
as described in the Registration Statement and the Prospectus
and (B) to execute and deliver this Agreement and to issue,
sell and deliver the Firm Shares as herein contemplated;
(ii) each of the Material Subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of
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<PAGE>
the jurisdiction in which such Material Subsidiary is
incorporated, with full corporate power and authority to own
its properties and to conduct its business as described in
the Registration Statement and the Prospectus;
(iii) each of the Company and each of the Material
Subsidiaries is duly qualified or licensed to do business by
and is in good standing as a foreign corporation in each
jurisdiction in which it conducts business or owns property
and in which the failure, individually or in the aggregate,
to be so licensed or qualified could reasonably be expected
to have a material adverse effect on the properties, assets,
operations, business or condition (financial or other) of the
Company and the Material Subsidiaries taken as a whole;
(iv) all of the issued and outstanding shares of
capital stock of each Material Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable and, except as set forth in the Prospectus, are
owned, directly or indirectly, by the Company free and clear
of any pledge, lien, encumbrance, security interest,
preemptive right or other claim, and, to the best of such
counsel's knowledge, there are no rights, warrants, options
or other agreements to acquire or instruments convertible
into or exchangeable for any shares of capital stock or other
equity interest of any Material Subsidiary, except as set
forth in the Prospectus;
(v) this Agreement has been duly authorized,
executed and delivered by the Company;
(vi) (a) the Shares, when delivered to and paid for
by the Underwriters, will be duly authorized, validly issued,
fully paid and nonassessable, and will be free of any pledge,
lien, encumbrance, claim or preemptive right; and (b) the
certificates for the Shares are in due and proper form and
the holders of the Shares will not be subject to personal
liability by reason of being such holders;
(vii) (a) the Company has an authorized
capitalization as set forth under the heading
"Capitalization" in the Registration Statement and the
Prospectus, and (b) the outstanding shares of capital stock
of the Company have been duly
17
<PAGE>
authorized and validly issued and are fully paid,
nonassessable and free of statutory and contractual
preemptive rights;
(viii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus;
(ix) the Registration Statement and the Prospectus
(except as to the financial statements and schedules
contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act;
(x) the Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge,
no stop order proceedings with respect thereto are pending or
threatened under the Act;
(xi) no approval, authorization, consent or order of
or filing with any federal, state, local or foreign
governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance or sale
of the Shares as contemplated hereby other than registration
of the Shares under the Act, clearance of the offering of the
Shares with the NASD, listing the Firm Shares on the AMEX and
any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are
being offered by the Underwriters;
(xii) the execution, delivery and performance of this
Agreement by the Company, the issuance of the Firm Shares,
the sale of the Shares, the application of the net proceeds
thereof as described in the Prospectus and the consummation
by the Company of the transactions contemplated hereby do not
and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which
with notice, lapse of time or both would constitute a breach
of or default under), the charter or bylaws of the Company or
any of the Subsidiaries, or any material provision of any
material license, indenture, lease, mortgage, deed of trust,
bank loan or credit agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is
a party or by which the Company or
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<PAGE>
any of the Subsidiaries or their material properties are
bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of the Subsidiaries;
(xiii) to the best of such counsel's knowledge,
neither the Company nor any of the Material Subsidiaries is
in breach of or in default under (nor has any event occurred
which with notice, lapse of time or both would constitute a
breach of or default under) any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement or any
other agreement or instrument to which the Company or any of
the Material Subsidiaries is a party or by which the Company
or any of the Material Subsidiaries or their properties are
bound or affected or under any law, regulation or rule or any
decree, judgment or order applicable to the Company or any of
the Material Subsidiaries, except for such matters as could
not reasonably be expected, individually or in the aggregate,
to have a material adverse effect on the properties, assets,
operations, business or condition (financial or other) of the
Company and the Material Subsidiaries taken as a whole;
(xiv) to the best of such counsel's knowledge, the
Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or
regulatory authorities ("permits"), including without
limitation under any applicable Environmental Laws, as are
necessary to own, lease and operate its respective properties
and to conduct its business substantially in the manner
described in the Prospectus; to the best of such counsel's
knowledge, after due inquiry, the Company and each of the
Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as
may be set forth in the Prospectus;
(xv) to the best of such counsel's knowledge, all
contracts or documents of a character required
19
<PAGE>
to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed;
(xvi) except as described in the Registration
Statement and the Prospectus, there are no actions, suits or
proceedings of which such counsel has knowledge pending or
threatened against the Company or any of the Subsidiaries, or
any of their respective properties, at law or in equity, or
before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority
or agency that individually or in the aggregate could result
in a judgment, decree or order having a material adverse
effect on the properties, assets, operations, business or
condition (financial or other) of the Company and the
Subsidiaries taken as a whole;
(xvii) to the best of such counsel's knowledge, each
person who has the right, contractual or otherwise, to cause
the Company to register pursuant to the Act any securities of
the Company in consequence of the issue and sale of the
Shares to the Underwriters hereunder either included such
securities in the Registration Statement or duly waived such
right and each person who has the right, contractual or
otherwise, to cause the Company to issue to it any securities
of the Company in consequence of the issue and sale of the
Shares to the Underwriters hereunder has duly waived such
right;
(xviii) the statements in the Registration Statement
and the Prospectus under the captions "Business --
Regulation", "Description of Capital Stock" and "Shares
Eligible For Future Sale", insofar as they are descriptions
of laws, regulations and rules, of legal and governmental
proceedings or of contracts, agreements, leases and other
legal documents, or refer to statements of law or legal
conclusions, have been reviewed by such counsel and are
accurate in all material respects;
(xix) neither the Company nor any of the Subsidiaries
is an "investment company" or a person "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended;
20
<PAGE>
(xx) the sales of securities by the Company
described in Item 15 of the Registration Statement were
exempt from the registration requirements of the Act;
(xxi) the Power of Attorney and the Custody Agreement
have been duly executed and delivered by each of the Selling
Shareholders; the Power of Attorney and the Custody Agreement
are legal, valid and binding agreements of each of the
Selling Shareholders enforceable in accordance with their
respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and
general principles of equity;
(xxii) to the best of such counsel's knowledge, each
of the Selling Shareholders has full legal right and power,
and has obtained any authorization or approval required by
law (other than those imposed by the Act and the securities
or blue sky laws of certain jurisdictions), to sell, assign,
transfer and deliver the Additional Shares to be sold by such
Selling Shareholder in the manner provided in this Agreement;
(xxiii) delivery of certificates for the Additional
Shares to be sold by the Selling Shareholders pursuant hereto
will pass title thereto to the Underwriters severally, free
and clear of any claim, lien, encumbrance, security interest,
community property right, restriction on transfer or other
defect in title assuming that the several Underwriters are
good faith purchasers and without notice of any adverse
claim;
(xxiv) to the best of such counsel's knowledge, the
consummation of the transactions contemplated hereby and by
the Power of Attorney and the Custody Agreement and the
fulfillment of the terms hereof and thereof will not
constitute a breach or violation of or default under any
trust, indenture, agreement or other instrument to which any
of the Selling Shareholders is a party or by which any of the
Selling Shareholders is bound;
(xxv) the Attorney-in-Fact has been duly authorized
by each Selling Shareholder to execute and deliver on behalf
of each Selling Shareholder this Agreement and any other
document necessary or desirable in connection with the
transactions
21
<PAGE>
contemplated hereby and to deliver the Additional Shares to
be sold by the Selling Shareholders and receive payment
therefor pursuant hereto; and
(xxvi)nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement,
and at all times up to and including the time of purchase
contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion
with respect to the financial statements and schedules
included in the Registration Statement or Prospectus).
In rendering the foregoing opinion, Kane Kessler, P.C. may rely upon
the opinions of Ashurst Morris Crisp and Travers Smith Braithwaite as
to matters governed by United Kingdom law.
(b) You shall have received from each of Deloitte & Touche
LLP and KPMG letters dated, respectively, the date of this Agreement
and the time of purchase and additional time of purchase, as the case
may be, and addressed to the Underwriters (with reproduced copies for
each of the Underwriters) in form and substance satisfactory to you.
(c) You shall have received at the time of purchase and at
the additional time of purchase, as the case may be, opinions from
Gibson, Dunn & Crutcher LLP in form and substance satisfactory to you.
(d) No amendment or supplement to the Registration Statement
or the Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which you shall have objected in
writing.
(e) The Registration Statement shall become effective at or
before 5:00 P.M., New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have
been filed
22
<PAGE>
with the Commission pursuant to Rule 424(b) under the Act at or before
5:00 P.M., New York City time, on the second full business day after
the date of this Agreement; provided, however, that the Company, the
Selling Shareholders and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least
50% of the Firm Shares from time to time may agree in writing or by
telephone, confirmed in writing, on a later date.
(f) Prior to the time of purchase or the additional time of
purchase, as the case may be: (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto,
or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(g) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, there has not been: (i) any material adverse change, present or
prospective, in the properties, assets, operations, business, business
prospects or condition (financial or other) of the Company and the
Subsidiaries taken as a whole, other than as described in the
Registration Statement and the Prospectus; (ii) any transaction that
is material to the Company and the Material Subsidiaries taken as a
whole contemplated or entered into by the Company or any of the
Material Subsidiaries, other than as described in the Registration
Statement and the Prospectus; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by the Company or any of
the Material Subsidiaries that is material to the Company and the
Material Subsidiaries taken as a whole, other than as described in the
Registration Statement and the Prospectus.
(h) The Company, at the time of purchase or additional time
of purchase, as the case may be, will
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<PAGE>
deliver to you a certificate of two of its executive officers to the
effect that the representations and warranties of the Company as set
forth in this Agreement are true and correct as of each such date and
the conditions set forth in Section 8(f) and Section 8(g) have been
met.
(i) You shall have received a signed letter, dated the date
of this Agreement, from each of the shareholders listed in Schedule C
to the effect that such persons shall not, directly or indirectly,
offer, sell, contract to sell, make subject to any purchase option or
otherwise dispose of or cause the disposition of any shares of Common
Stock, or any securities convertible into or exerciseable or
exchangeable for Common Stock prior to the expiration of 180 days from
the date of the effectiveness of the Registration Statement without
the prior written consent of Dillon, Read & Co. Inc., except for
transfers to any such shareholder's spouse, child, grandchild, parent
or sibling, or to a trust for the benefit of such shareholder or any
such related person, so long as such transferee executes a copy of the
letter agreement executed by such shareholder and becomes bound
thereby.
(j) The Company and the Selling Shareholders shall have
furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration
Statement or the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you reasonably may
request.
(k) The Company and the Selling Shareholders shall have
performed such of their respective obligations under this Agreement as
are to be performed by the terms hereof at or before the time of
purchase and at or before the additional time of purchase, as the case
may be.
(l) The Firm Shares shall have been approved for listing
on the American Stock Exchange.
(m) The Attorney-in-Fact, at the time of purchase or
additional time of purchase, as the case may be, shall have delivered
to you a certificate to the effect that the Attorney-in-Fact is not
aware that any of the representations and warranties of the Selling
Shareholders as set forth in this Agreement are not true and correct
as of such date.
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<PAGE>
9. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A
under the Act is not used, when you shall have received notification of the
effectiveness of the Registration Statement, or (ii) if Rule 430A under the Act
is used, when the parties hereto have executed and delivered this Agreement.
(b) The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of you or any group
of Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York or American Stock Exchange shall have been suspended or minimum prices
shall have been established on the New York or American Stock Exchange or if a
banking moratorium shall have been declared either by the United States or New
York State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in your
judgment or in the judgment of such group of Underwriters, makes it
impracticable to market the Shares. If you or any group of Underwriters elect
to terminate this Agreement as provided in this Section 9(b), the Company and
each other Underwriter shall be notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to
take up and pay for the Firm Shares to be purchased by it hereunder and if the
number of Firm Shares which all Underwriters so defaulting shall have agreed
but failed to take up and pay for does not exceed 10% of the total number of
Firm Shares, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate principal amount of Firm Shares they are obligated to
purchase pursuant to Section 1) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set
25
<PAGE>
opposite the names of such non-defaulting Underwriters in Schedule A.
(d) If any Underwriter shall default in its obligation to
take up and pay for the Firm Shares to be purchased by it hereunder and if the
number of Firm Shares which all Underwriters so defaulting shall have agreed
but failed to take up and pay for exceeds 10% of the total number of Firm
Shares, and arrangements satisfactory to you and the Company are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter.
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted underwriters selected by
you with the approval of the Company or selected by the Company with your
approval pursuant to Section 9(d)). If a new Underwriter or Underwriters are
substituted for a defaulting Underwriter or Underwriters in accordance with
Section 9(d), the Company or you shall have the right to postpone the time of
purchase for a period not exceeding five business days in order that any
necessary change in the Registration Statement and the Prospectus and other
documents may be effected. The term Underwriter as used in this Agreement shall
refer to and include any Underwriter substituted under this Section 9 with like
effect as if such substituted Underwriter had originally been named in Schedule
A.
(f) If the purchase of the Shares by the Underwriters, as
contemplated by this Agreement, is not consummated for any reason permitted
under this Agreement or if such purchase is not consummated because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 5(l), 7 and 10), and the Underwriters shall be
under no obligation or liability to the Company under this Agreement (except to
the extent provided in Section 10).
10. Indemnity by the Company, the Selling Shareholders and\
the Underwriters.
(a) The Company and the Selling Shareholders, jointly and
severally, agree to indemnify, defend and hold harmless each Underwriter, each
person that controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and each Underwriter's
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<PAGE>
agents, employees, officers and directors and the agents, employees, officers
and directors of any such controlling person (collectively, the "Underwriter
indemnified parties") from and against any and all losses, claims, damages,
judgments, liabilities and expenses (including the fees and expenses of counsel
and other expenses in connection with investigating, defending or settling any
such action or claim) which, jointly or severally, any Underwriter indemnified
party may incur as they are incurred (and regardless of whether such
Underwriter indemnified party is a party to the litigation, if any) arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement relating to the Shares or the
Prospectus or any Preliminary Prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, judgments, liabilities or
expenses arise out of, or are based upon, any such untrue statement or omission
or alleged untrue statement or omission based upon and in conformity with
information with respect to any Underwriter furnished in writing by any
Underwriter through you to the Company expressly for use therein with reference
to such Underwriter; provided, however, that no Selling Shareholder shall be
liable under this Section 10 in an amount exceeding the total price at which
the Shares sold by such Selling Shareholder were offered to the public. This
indemnity agreement will be in addition to any liability the Company or the
Selling Shareholders otherwise may have.
(b) If any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted against
any Underwriter indemnified party, with respect to which indemnity may be
sought against the Company or a Selling Shareholder pursuant to this Section
10, such Underwriter indemnified party shall promptly notify the Company and
each Selling Shareholder in writing, and the Company and the Selling
Shareholders shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Underwriter indemnified party and
payment of all fees and expenses; provided that the omission so to notify the
Company and the Selling Shareholders shall not relieve them from any liability
that they may have to any Underwriter indemnified party unless they are
materially prejudiced thereby. An Underwriter indemnified party shall have the
right to employ separate counsel in any such action or proceeding and to assume
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the employment of such
counsel has been authorized in writing by the Company or the Selling
27
<PAGE>
Shareholders, (ii) the Company and the Selling Shareholders have failed
promptly to assume the defense and employ counsel reasonably satisfactory to
the Underwriter indemnified party or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both the Underwriter
indemnified party and the Company or the Selling Shareholders and such
Underwriter indemnified party shall have reasonably concluded that there may be
one or more legal defenses available to it that are different from or
additional to those available to the Company and the Selling Shareholders (in
which case the Company and the Selling Shareholders shall not have the right to
assume the defense of such action on behalf of such Underwriter indemnified
party), in any of which events such fees and expenses shall be borne by the
Company and the Selling Shareholders and reimbursed as they are incurred. It is
understood, however, that the Company and the Selling Shareholders shall not,
in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for all such Underwriter indemnified parties, which firm shall be designated in
writing by Dillon, Read & Co. Inc., and that all such fees and expenses shall
be reimbursed as they are incurred. The Company and the Selling Shareholders
shall not be liable for any settlement of any such action effected without the
written consent of the Company or the Selling Shareholders (which consent shall
not be unreasonably withheld or delayed), but if settled with the written
consent of the Company or the Selling Shareholders, or if there is a final
judgment with respect thereto, the Company and the Selling Shareholders agree
to indemnify and hold harmless each Underwriter indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person that controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively, the
"Company indemnified parties") and each Selling Shareholder to the same extent
as the foregoing indemnity from the Company and the Selling Shareholders to the
Underwriter indemnified parties, but only with respect to information
concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with respect to such
Underwriter in the Registration Statement, any Preliminary Prospectus or the
Prospectus and set forth in the section of the Registration
28
<PAGE>
Statement, any Preliminary Prospectus and the Prospectus entitled
"Underwriting." In case any action shall be brought against any Company
indemnified party or any Selling Shareholder based on the Registration
Statement, any Preliminary Prospectus or the Prospectus and in respect of which
indemnity may be sought against any Underwriter pursuant to this Section 10(c),
such Underwriter shall have the rights and duties given to the Company and the
Selling Shareholders by Section 10(b) (except that if the Company and the
Selling Shareholders shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, provided that the fees and expenses of such
separate counsel shall be at the expense of such Underwriter), and the Company
indemnified parties and the Selling Shareholders shall have the rights and
duties given to the Underwriter indemnified parties by Section 10(b).
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or any Selling Shareholder, then the
party required to indemnify such indemnified party under this Section 10, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, judgments, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand
from the offering of the Shares, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Selling Shareholders on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue
29
<PAGE>
statement or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company, by the Selling Shareholders or by the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, judgments, liabilities and
expenses referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 10(d) were determined by pro rata allocation or by any other method of
allocation (even if the Underwriters were treated as one entity for such
purpose) that does not take account of the equitable considerations referred to
in this Section 10(d). Notwithstanding the provisions of this Section 10(d), no
Underwriter indemnified party shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by such Underwriter indemnified party and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
indemnified party otherwise has been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to their
respective underwriting commitments and are not joint.
The statements under the caption "Underwriting" in the
Prospectus (to the extent such statements relate to an Underwriter) constitute
the only information furnished to the Company in writing by such Underwriter
expressly for use in the Registration Statement, any Preliminary Prospectus or
the Prospectus.
(e) The indemnity and contribution agreements contained in
this Section 10 and the representations, warranties and covenants of the
Company and the Selling Shareholders contained in this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter indemnified party or by or on behalf of any Company
indemnified party or any Selling Shareholder, and shall survive any termination
of this
30
<PAGE>
Agreement or the issuance and delivery of the Shares. Subject to the provisions
of Section 10(b) and Section 10(c), the Company, each Selling Shareholder and
each Underwriter agree promptly to notify the other of the commencement of any
litigation or proceeding against it in connection with the issuance and sale of
the Shares or in connection with the Registration Statement or the Prospectus.
11. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered
or sent to Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York
10022, Attention: Syndicate Department; if to the Company, shall be sufficient
in all respects if delivered or sent to the Company at the offices of the
Company at 13386 International Parkway, Jacksonville, Florida 32218, Attention:
Warren B. Kanders; and if to the Selling Shareholders, shall be sufficient in
all respects, if delivered or sent to ____________.
12. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
13. Parties in Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company, the
Selling Shareholders, the Underwriter indemnified parties and the Company
indemnified parties, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties.
31
<PAGE>
If the foregoing correctly sets forth the understanding among
the Company, the Selling Shareholders and the Underwriters, please so indicate
in the space provided below for such purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Shareholders and the Underwriters, severally.
Very truly yours,
ARMOR HOLDINGS, INC.
By: __________________________
Name:
Title:
THE SELLING SHAREHOLDERS NAMED
IN SCHEDULE B ATTACHED HERETO
By: __________________________
Attorney-in-fact
Accepted and agreed to as of
the date first above written,
on behalf of themselves,
Equitable Securities Corporation
Stephens Inc.
and the other several
Underwriters named in
Schedule A
DILLON, READ & CO. INC., as
Managing Underwriter
By: __________________________
Name:
Title:
32
<PAGE>
SCHEDULE A
Number of
Underwriter Firm Shares
- ----------- -----------
Dillon, Read & Co. Inc. . . . . . . . . . . .
Equitable Securities Corporation . . . . . .
Stephens Inc. . . . . . . . . . . . . . . .
-----------
Total
===========
33
<PAGE>
SCHEDULE B
Number of
Additional
Name Shares to be Sold
- ---- -----------------
Kanders Florida Holdings Inc. 525,000
Warren B. Kanders
Richmont Capital Partners I, L.P. 75,000
<PAGE>
SCHEDULE C
SHAREHOLDERS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
<PAGE>
NUMBER SHARES
AH0208 ARMOR HOLDINGS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK
THE COMPANY IS AUTHORIZED TO ISSUE 50,000,000 SHARES OF SEE REVERSE FOR
COMMON STOCK PAR VALUE $.01 AND 5,000,000 SHARES OF CERTAIN DEFINITIONS
PREFERRED STOCK PAR VALUE $.01.
THIS CERTIFIES THAT CUSIP 042260 10 9
SPECIMEN
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $.01 EACH OF THE
COMMON STOCK OF
ARMOR HOLDINGS, INC.
(hereinafter called the "Corporation"), transferable on the books of the
Corporation by said owner in person or by his duly authorized attorney, upon
the surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to the
provisions of the Certificate of Incorporation and the By-laws of the
Corporation, as amended (copies of which are on file at the office of the
Transfer Agent of the Corporation), to which reference is hereby expressly
made and to all of which the holder hereof by acceptance of this Certificate
hereby assents.
This Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
ARMOR HOLDINGS, INC.
CORPORATE
SEAL
/s/ Carol J. Burke 1996 /s/
*
SECRETARY DELAWARE PRESIDENT AND
CHIEF EXECUTIVE OFFICER
(C)SECURITY-COLUMBIAN UNITED STATES BANKNOTE COMPANY 1960
COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(NEW YORK, N.Y.)
TRANSFER AGENT
AND REGISTRAR
AUTHORIZED SIGNATURE
<PAGE>
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT --____Custodian ____
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act _____________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For Value Received, ________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
_____________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated __________________
_____________________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
_____________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
<PAGE>
July 22, 1997
Armor Holdings, Inc.
13386 International Parkway
Jacksonville, FL 32218
Gentlemen:
We have acted as counsel for Armor Holdings, Inc., a
Delaware corporation (the "Company") in connection with the Registration
Statement on Form S-1 (No. 333-28879), as amended (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Act") filed by
the Company with the Securities and Exchange Commission. The Registration
Statement relates to the offer and sale of up to a maximum of 4,600,000 shares
of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company, including the underwriters' over-allotment option in an aggregate
amount of up to 600,000 shares of Common Stock, proposed to be sold by the
Company and certain selling stockholders.
We have examined copies of the Certificate of Incorporation,
as amended, and Bylaws of the Company, the Registration Statement, records of
certain of the Company's corporate proceedings as reflected in the Company's
minute books and other records and documents that we have deemed necessary for
purposes of this opinion. We have also examined such other documents, papers,
authorities and statutes as we have deemed necessary to form the basis of the
opinion hereinafter set forth.
In our examination, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies submitted to
us. As to various questions of fact material
<PAGE>
Armor Holdings, Inc.
July 22, 1997
Page 2.
to our opinion, we have relied on statements and certificates of officers and
representatives of the Company and public officials.
Based upon the foregoing and the statements contained
herein, it is our opinion that (i) the Common Stock proposed to be sold by the
Company, when duly sold, issued and paid for pursuant to, and in the manner
contemplated by, the Prospectus included as part of the Registration
Statement, will be validly issued, fully paid and non-assessable and (ii) the
Common Stock proposed to be sold by the selling stockholders in accordance
with the terms of the Prospectus included as part of the Registration
Statement have been validly issued and are fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement and to the reference to us under the heading
"Legal Matters" in the Prospectus which forms a part thereof. In giving this
consent, we do not admit that we are in the category of persons whose consent
is required under Section 7 of the Act or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
We are qualified to practice law in the State of New York
and do not purport to be experts on, or to express any opinion herein
concerning any law, other than the laws of the State of New York and the
General Corporation Law of the State of Delaware.
Very truly yours,
KANE KESSLER, P.C.
By: /s/ Robert L. Lawrence
--------------------------
Robert L. Lawrence
Authorized Signatory
<PAGE>
Dated 16 April 1997
--------
(1) DSL GROUP LIMITED
- and -
(2) ALASTAIR GEORGE ANGUS MORRISON
- and -
(3) ARMOR HOLDINGS, INC.
------------------------------------------
SERVICE AGREEMENT
------------------------------------------
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 0171-638-1111
Fax: 0171-972-7990
<PAGE>
AN AGREEMENT made on 1997
BETWEEN:-
(1) DSL GROUP LIMITED (registered number 3206563) whose registered
office is at Egginton House, 36 Buckingham Gate, London SW1E 6PB
(the "COMPANY");
(2) ALASTAIR GEORGE ANGUS MORRISON of Flat 6, 21 Embankment Gardens,
London SW3 4LW (the "EXECUTIVE"); and
(3) ARMOR HOLDINGS, INC., whose principal place of business is at 13386
International Parkway, Jacksonville, Florida 32218 USA ("AHI").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement the following words and expressions shall have the
following meanings:-
"ACQUISITION AGREEMENT" means the agreement of today's date between,
inter alios, the executive and AHI relating to the sale and purchase
of shares in the Company;
"THE ACT" means Employment Protection (Consolidation) Act 1978;
"BOARD" means the board of directors of the Company from time to time;
"CHAIRMAN" means the Chairman of the Board from time to time;
"EFFECTIVE DATE" means the date of this Agreement;
"GROUP COMPANY" means any company which from time to time is:-
(a) a subsidiary undertaking of the Company;
(b) a holding company of the Company;
(c) a subsidiary undertaking of any such holding company;
or
(d) an associated company being any company in which the
Company or any Group Company has a shareholding of
25% or more or any company which has a shareholding
of 25% or more in the Company or any Group Company;
"subsidiary" and "holding company" have the meanings attributed to
them by section 736 of the Companies Act 1985;
<PAGE>
"PENSION SCHEME" means The DSL Holdings Directors Scheme or such
other pension scheme that may be substituted therefor by the
Company;
"TERM" means the period of the Executive's employment hereunder;
"TERMINATION DATE" means (other than for the purposes of Schedule 2
to this Agreement) the date on which the employment of the Executive
under this Agreement shall terminate for whatever reason, and
derivative expressions shall be construed accordingly.
1.2 Words and phrases which are not defined in this Agreement but which
are defined in the Act, the Companies Act 1985, or the Insolvency
Act 1986 shall be construed as having those meanings.
1.3 References to any statute or any statutory provision shall be
construed as references to the statute or statutory provision as in
force at the date of this Agreement and as subsequently re-enacted
or consolidated and shall include references to any statute or any
statutory provision of which it is a re-enactment or consolidation.
1.4 Unless the context otherwise requires references in this Agreement
to the masculine gender shall, where appropriate, be deemed to
include the feminine and vice versa.
1.5 The Schedules to this Agreement are an integral part of this
Agreement and references to this Agreement include reference
thereto.
2. APPOINTMENT AND TERM
2.1 The Company shall employ the Executive and the Executive shall serve
the Company on the terms set out in this Agreement.
2.2 The Executive's employment under this Agreement shall commence on
the Effective Date and continue (subject to the provisions of this
Agreement) until the third anniversary of the date hereof whereupon
the Executive's employment under this Agreement shall forthwith
terminate unless otherwise agreed in writing between the parties.
2.3 For the purposes,of the Act the Executive's previous employment with
Defence Systems Limited count as part of the Executive's continuous
employment with the Company. The Executive's continuous employment
accordingly began on 1 June 1982.
2.4 The Executive represents to the Company that he is entitled to enter
into this Agreement and to implement and carry out its terms and
that by so doing he shall not be in breach of any obligation
(contractual or otherwise) to any third party which would entitle
that third party to damages or any other remedy at law.
2.5 If in the financial year ending 31 December 1997 the Company does
not achieve 100 per cent of the operating profit forecasted in the
annual budget approved by the Board and
<PAGE>
the board of Directors of AHI for that year the Executive's
employment hereunder shall be deemed to continue (subject to the
provisions of this Agreement) until the second anniversary of the
date hereof whereupon the Executive's employment under this
Agreement shall forthwith terminate unless otherwise agreed in
writing between the parties.
3. DUTIES
3.1 The Executive shall perform the duties and exercise the powers which
from time to time may be assigned to him or vested in him by the
Board and shall devote the whole of his time, ability and attention
to his duties under this Agreement during normal office hours and
such other times as may be reasonably required for the proper
performance of his duties and he shall use his utmost endeavours to
promote the interests of the Company and any Group Company and shall
not knowingly do or willingly permit to be done anything to the
prejudice, loss or injury of the Company or any Group Company and
shall carry out such duties in a competent manner. The Executive
shall not be entitled to any additional remuneration for work
performed outside normal office hours.
3.2 The Board shall be entitled at any time to require the Executive to
perform services not only for the Company but also for any Group
Company including, if so required, acting as a director of any Group
Company.
3.3 The Executive shall at all times keep the Board promptly and fully
informed (in writing if so requested) of his conduct of the business
or affairs of the Company and any Group Company and provide such
explanations of his conduct as the Board may require.
3.4 Notwithstanding the provisions of clause 3.1, the Company may at any
time following the giving of notice by either party to terminate
this Agreement and for such period as it may specify not exceeding
the length of notice given cease to provide work for the Executive
in which event, during such period the other provisions of this
Agreement including those relating to the Executive's remuneration
shall continue to have full force and effect but the Executive shall
not be entitled to access to any premises of the Company or any
Group Company.
3.5 Subject always to clause 4, during the Term the Executive shall not
without the prior written consent of the Board engage in any
activities, public office or other occupation outside his employment
which may detract from the proper and timely performance of his
duties under this Agreement.
3.6 The Executive's principal place of work shall be at the principal
place of business of the Company in the United Kingdom or such other
location in the United Kingdom as may be required by the Company
from time to time and he shall undertake any travel as may be
necessary for the proper performance of his duties as the Board may
from time to time require.
4. CONFLICTS OF INTEREST AND DEALINGS IN SECURITIES
<PAGE>
4.1 During the Term the Executive shall not whether alone or jointly
with or on behalf of any other person, firm or company and whether
as principal, partner, manager, employee, contractor, director,
consultant, investor or otherwise (except as a representative or
nominee of the Company or any Group Company or otherwise with the
prior consent in writing of the Board) be engaged, concerned or
interested in any other business which:-
4.1.1 is wholly or partly in competition with any business
carried on by the Company or any Group Company; or
4.1.2 as regards any goods or services is a supplier to or
customer of the Company or any Group Company, provided that
the Executive may hold (directly or through nominees) by
way of bona fide personal investment any units of any
authorised unit trust and up to five per cent of the issued
shares, debentures or other securities of any class of any
company whose shares are listed on a recognised investment
exchange within the meaning of the Financial Services Act
1986 or dealt in the Alternative Investment Market.
4.2 The Executive acknowledges that he shall not enter into any
transaction which contravenes the insider dealing provisions
contained in Part V of the Criminal Justice Act 1993.
4.3 The Executive undertakes at all times to comply with the share
dealing rules adopted from time to time by the Company.
5. SALARY AND BONUS
5.1 Subject to clause 5.2 the Executive shall receive a fixed annual
salary of (pound)116,424 which shall accrue from day to day and be
payable by equal monthly instalments in arrear on the last working
day of each calendar month or such salary (which may not be lower)
as may be agreed and confirmed to the Executive in writing by the
Board in its sole discretion from time to time.
5.2 For the year ending 31 December 1997 if the Company does not achieve
75 per cent of the operating profit forecasted in the annual budget
approved by the Board and the Board of Directors of AHI, the
Executive shall receive, for the year ended 31 December 1998, a
fixed annual salary of (pound)100,000 PROVIDED THAT if in the year
ending 31 December 1998 the Company achieves 100 per cent of the
operating profit forecasted in the annual budget for
such year then the fixed annual salary of the Executive shall be
increased to (pound)116,424 in respect of the year ending 31
December 1999 plus any further increase which the Board and the
Board of Directors of AHI may approve.
5.3 In addition to the Executive's fixed annual salary, he shall receive
an annual bonus in respect of each financial year of the Company
calculated on the basis and in accordance with the definitions set
out in Schedule 3. The Board reserves the right to amend the terms
of the bonus calculation at any time.
<PAGE>
5.4 The Executive shall not be entitled to any fees in respect of any
directorship of the Company or any Group Company and to give effect
to this clause the Executive shall forthwith pay to the Company or
procure that the Company is paid all such fees received.
5.5 Payment of such salary and such bonuses (if any) to the Executive
shall be made either by the Company or by another company in the
Group and, if by more than one company, in such proportion as the
Board may from time to time think fit.
5.6 In addition there shall be refunded to the Executive such sums as
shall cover all reasonable out of pocket expenses incurred by him on
the Group's business (including hotel expenses and expenses of
subsistence and travelling), which said expenses shall be evidenced
in such manner as the Company may require.
6. CREDIT CARD
If the Company shall make any credit card available to the
Executive, the Executive shall:-
6.1 take good care of such card and forthwith report any loss of such
card to the Board;
6.2 use the card only for the purposes of the Group's business; and
6.3 return the card forthwith to the Company on request.
7. PENSION AND OTHER BENEFITS
7.1 The Executive is eligible for membership of the Pension Scheme
subject to the rules of the Pension Scheme from time to time. The
Company shall contribute to the Pension Scheme at a rate according
to its discretion acting on the advice of the Actuary as defined in
the rules of the Pension Scheme. The Executive's contributions to
the Pension Scheme will be deducted from his salary and paid by the
Company to the trustees of the Pension Scheme subject to any Inland
Revenue limits and in accordance with the rules of the Pension
Scheme. A copy of these rules will be supplied by the Company on
request.
7.2 A contracting-out certificate under the Pension Schemes Act 1993 is
not in force for the Executive's employment.
7.3 During the Term, the Company shall pay in respect of the Executive,
his spouse and dependent children up to the age of 18 years of age
premiums to a private medical insurance scheme in accordance with
the information describing the Company's medical insurance
arrangements which has already been supplied to the Executive.
7.4 During the Term the Executive shall participate at the Company's
expense in such life and personal accident/injury insurance schemes
as the Company shall from time to time maintain for the benefit of
senior executives.
<PAGE>
7.5 Any benefits available under clauses 7.3 and 7.4 above are subject
to the rules of the relevant scheme from time to time in force.
8. HOLIDAYS
8.1 The Executive shall be entitled (in addition to the usual public and
Bank holidays in England and Wales) to 30 days' holiday on full pay
in every calendar year to be taken at such reasonable time or times
as the Board shall approve. Any holiday not so used in a calendar
year may not be carried forward without the approval of the Board.
8.2 For the calendar year in which the Executive's employment commences
the Executive shall be entitled to his annual holiday entitlement
calculated on the basis of 2 days' holiday for each completed
calendar month of service in the then current calendar year. Upon
termination of the Executive's employment the Executive shall either
be entitled to salary in lieu of any outstanding holiday entitlement
(calculated on the basis aforesaid) or be required to repay to the
Company any salary received in respect of holiday taken in excess of
his holiday entitlement such salary to be calculated on the basis of
1/227 of the fixed annual salary payable to the Executive pursuant
to clause 5.1 for each day of outstanding or excess holiday
entitlement as appropriate.
8.3 If this Agreement is terminated under clause 11.4, the Executive
will not be entitled to any payment in lieu of holiday not taken at
the Termination Date.
9. ILLNESS OR ACCIDENT
9.1 The Executive shall from time to time at the request and expense of
the Company submit to medical examinations and tests by a medical
practitioner nominated by the Company, the results of which shall,
subject to the provisions of the Access to Medical Reports Act 1988
(as applicable), be disclosed to the Company.
9.2 If the Executive is absent from his duties as a result of sickness
or injury for a period of seven days or more he will at the request
of the Company produce medical certificates to the Company in
respect of this absence.
9.3 If the Executive shall be absent for up to a maximum of 130 working
days in any rolling period of twelve months owing to accident or
illness so that he is unable properly to perform his duties he shall
continue to be entitled to his full salary excluding any bonus or
commission during any period of absence up to a maximum of 130
working days in any rolling period of 12 months provided that if at
any time during such a period of absence referred to above the
Executive becomes eligible to receive benefits under a permanent
health insurance policy in respect of which the Company or any Group
Company has paid premiums on behalf of the Executive or under any
Social Security legislation the Company shall be entitled to set off
or deduct the amount of any such benefits from the salary payable to
the Executive under this clause. During any such period of absence,
the Company shall be entitled at any time to appoint a further
executive director or employee to perform the Executive's duties and
to exercise his powers.
<PAGE>
9.4 The Company shall pay the Executive all sums payable by way of
statutory sick pay in accordance with the legislation in force at
the time of absence and any remuneration paid shall be deemed to be
inclusive of statutory sick pay.
9.5 If the Executive's absence shall be or appear to be occasioned by
actionable negligence of a third party in respect of which damages
are or may be recoverable, then all sums paid by the Company shall
constitute loans to the Executive, who shall:
9.5.1 forthwith notify the Company of the relevant circumstances
and of any claim, compromise, settlement or judgement made
or awarded in connection therewith;
9.5.2 give to the Company all such particulars of such matters as
the Company may reasonably require; and
9.5.3 if the Executive recovers damages in respect of such
actionable negligence, refund to the Company such sum (not
exceeding the lesser of:
(a) the amount of damages recovered by him (less all
costs and expenses incurred by the Executive in
obtaining such damages) under such compromise
settlement or judgement; and
(b) the sums advances to him in respect of the period of
the incapacity) as the Company may determine.
10. EXPENSES
The Executive shall be entitled to be reimbursed all reasonable
out-of-pocket expenses (including hotel, travelling and
entertainment expenses but excluding any car parking fines or road
traffic offence fines) which he may from time to time be authorised
to incur in the proper performance of his duties, subject to the
production of such receipts or other evidence as the Company may
reasonably require.
11. TERMINATION
11.1 The Company shall at all times be entitled to terminate the
Agreement pursuant to clause 2.2.
11.2 The Company may, at its sole and absolute discretion, terminate the
Executive's employment forthwith at any time by serving a notice
under this clause stating that the Agreement is being determined in
accordance with this clause 11.2 and undertaking to pay to the
Executive within 14 days salary in lieu of any required period of
notice or unexpired part thereof (subject to tax and National
Insurance) together with any accrued holiday entitlement pursuant to
clause 8.2. For the avoidance of doubt, where the Company terminates
the Agreement in accordance with this clause the terms of, inter
alia, clause 12 and Schedule 2 shall remain in full force and
effect.
<PAGE>
11.3 Where the Company terminates this Agreement otherwise than in
accordance with clause 2.2 or 11.2 (subject always to clause 11.4),
any damages to which the Executive may be entitled shall be
calculated in accordance with ordinary common law principles
including those relating to mitigation of loss.
11.4 Notwithstanding the provisions of clauses 11.1 and 11.2, the Company
shall be entitled, by notifying the Executive in writing, to
terminate this Agreement and the Executive's employment forthwith
without any payment by way of compensation, damages or otherwise if
the Executive shall:-
11.4.1 commit any act of serious misconduct;
11.4.2 commit any material or persistent breach of any of the terms
or conditions of this Agreement including any wilful
neglect or refusal to carry out any of his duties or
to comply with any instruction given to him by the Board
Provided that if any such breach of the terms and
conditions of this Agreement, or any such neglect or
refusal, is capable of remedy then this subclause shall
have effect only if written notice of that breach is
served by the Company on the Executive specifying that it
is served under this subclause and the Executive shall have
failed to remedy such a breach within 14 days of the
service of such notice;
11.4.3 have a bankruptcy order made against him or shall compound
with or enter into any voluntary arrangements with his
creditors;
11.4.4 be charged with or convicted of any criminal offence (other
than an offence under the Road Traffic Acts for which a
penalty of imprisonment cannot be imposed);
11.4.5 be disqualified from holding office in the Company or any
other company under the Insolvency Act 1986 or the Company
Directors Disqualification Act 1986 or be disqualified or
disbarred from membership of, or be subject to any serious
disciplinary sanction by, any professional or other body,
which undermines the confidence of the Board in the
Executive's continued employment with the Company;
11.4.6 act in any way which may in the reasonable opinion of the
Board bring the Company or any Group Company into disrepute
or discredit;
11.4.7 in his capacity as a director of the Company resign or be
removed, except where this has been required by the Company
pursuant to clause 11.5.1;
11.4.8 transfer or charge or purport to transfer or charge (other
than as permitted by clause 18) any shares in AHI held by
him without the prior written consent (in the case of
charging, such consent not to be unreasonably withheld) of
the Board of Directors of AHI prior to the third
anniversary of the date hereof; or
11.4.9 take any steps to have the shares of common stock of AHI
issued or to be issued to him registered pursuant to the
Registration Rights Agreement entered into
<PAGE>
between the Executive and Armor Holdings Inc on the date
hereof (other than in exercise of the Piggy Back Rights as
defined and set out therein) without the prior written
consent of the Board of AHI
in which event, for the purposes of this Agreement, the Termination
Date shall be the date of the written notice terminating the
Executive's employment.
11.5 The Executive shall resign from the Board and the boards of any
Group Company of which he is director:-
11.5.1 if at any time during the Term the Executive is prevented
from performing his duties whether through sickness or
because the Company has exercised its rights under clause
3.4 or otherwise howsoever and the Company requires the
Executive to resign; and in any event
11.5.2 on the Termination Date,
and the Executive shall at the time of signing this Agreement
appoint the Company as his attorney by executing a power of attorney
in the form set out in Schedule 1 to do and sign in his name and on
his behalf any things and documents as may be required under the
constitution of each company to make his resignation effective
(including the transfer (without payment) to the Company or as the
Company may direct may qualifying shares provided by it).
11.6 The proper exercise by the Company of its right of termination under
clause 11.4 shall be without prejudice to any other rights or
remedies which the Company or any Group Company may have or be
entitled to exercise against the Executive.
11.7 If the employment of the Executive under this Agreement shall be
terminated for the purpose of reconstruction or amalgamation only
whether by reason of the liquidation of the Company or otherwise and
he shall be offered employment with any concern or undertaking
resulting from this reconstruction or amalgamation on terms and
conditions no less favourable than the terms of this Agreement then
the Executive shall have no claim against the Company in respect of
the termination of his employment hereunder.
11.8 The Executive shall not at any time during any period when he is
required to cease the performance of his duties under clause 3.4 or
after the Termination Date make any public statements in relation to
the Company or any Group Company or any of their officers or
employees. The Executive shall not after the Termination Date
represent himself as being employed by or connected with the Company
or any Group Company.
11.9 All credit, charge and expense cards, motor cars, car keys and all
books, papers, drawings, designs, documents, records and computer
software kept or made by or in the possession or control of the
Executive relating to the businesses of the Company and any Group
Company and all other property of the Company and any Group Company
are and remain the property of the Company or such Group Company and
the Executive shall
<PAGE>
deliver all such items in his possession custody or control at the
Termination Date immediately to the Company.
11.10 If the Executive is entitled to receive any payment in respect of or
attributable to compensation or damages for termination of his
employment hereunder or in lieu of notice such sum shall be payable
in maximum instalments equal to the last monthly fixed salary of the
Executive prior to such termination and the Executive hereby waives
any right to such payment after such termination after he shall have
accepted employment or consultancy with any other person to the
extent that the Executive becomes entitled to receive any
remuneration or any person with whom the Executive is connected
becomes entitled to receive any amount in respect of or referrable
to the provision of services by the Executive to any other person.
11.11 Any right of the Executive to participate in any Option Pool
established by AHI shall be allocated no value in determining any
rights of such Executive to compensation or damages for loss of
office.
12. CONFIDENTIALITY
12.1 The Executive acknowledges that during the Term he shall in the
performance of his duties become aware of trade secrets and other
confidential information relating to the Company, the Group
Companies, their businesses and its or their clients or customers
and their businesses.
12.2 Without prejudice to his general duties at common law in relation to
such trade secrets and other confidential information, the Executive
shall not during the Term or at any time after
the Termination Date disclose or communicate to any person or
persons or make use (other than in the proper performance of his
duties under this Agreement) and shall use his best endeavours to
prevent any disclosure, communication or use by any other person, of
any such trade secrets or confidential information.
12.3 Since the Executive in the course of his employment or by reason of
services rendered for or offices held in any other company may
obtain knowledge of the trade secrets or other confidential
information or such company, the Executive hereby undertakes that he
will at the request and cost of the Company enter into a direct
agreement or undertaking with such other company whereby he will
accept restrictions corresponding to the restrictions herein
contained (or such of them as may be appropriate in the
circumstances) in relation to such products and services and such
area and for such period as such company may reasonably require for
the protection of its legitimate interests.
12.4 The provisions of this clause shall cease to apply to information or
knowledge which comes into the public domain otherwise than by
reason of the default of the Executive.
12.5 For the purposes of clause 12 confidential information shall
include, but not be limited to, all and any information (whether or
not recorded in documentary form or on computer disk or tape) which
relates to:
<PAGE>
12.5.1 the business methods, corporate plans, management systems,
finances, maturing new business opportunities or research
and development projects of the Company;
12.5.2 suppliers, their identities and prices;
12.5.3 customers, their identity, needs and requirements;
12.5.4 marketing or sales of any past, present or future product
or service of the Company including without limitation
sales targets and statistics, market share and pricing
statistics, market surveys and plans, market research
reports, sales techniques, price lists, discount structures
and advertising and promotional material;
12.5.5 trade secrets, technical specifications and other technical
information relating to the businesses of the Company; and
12.5.6 all information material to any dispute or litigation
involving the Company.
13. PROTECTION OF BUSINESS INTERESTS
The Executive shall be bound by the provisions of Schedule 2.
14. DISCIPLINARY AND GRIEVANCE PROCEDURE
14.1 Any disciplinary matters affecting the Executive will be dealt with
by the Chairman. There are no specific disciplinary rules affecting
the Executive. Should the Executive wish to appeal against any
disciplinary decision he should submit his appeal in writing to the
Board whose decision on such appeal shall be final.
14.2 If the Executive wishes to seek redress for any grievance relating
to his employment he should first discuss the matter with the
Chairman. If the matter is not then settled he should submit his
grievance to the Board in writing whose decision on such grievance
shall be final.
14.3 In order to investigate a complaint against the Executive, the
Company reserves the right to suspend the Executive on full pay and
to exclude the Executive from any premises of the Company and any
Group Company for so long as it deems necessary to carry out a
proper investigation and to hold any appropriate disciplinary
hearings.
15. NOTICES
Any notice to be given under this Agreement shall be in writing.
Notices may be served by either party by personal service or by
recorded delivery or by first class post addressed to the other
party or by leaving such notice at (in the case of the Company) its
registered office for the time being and (in the case of the
Executive) his last known address and any notice given shall be
deemed to have been served at the time at which
<PAGE>
the notice was personally served or if sent by recorded delivery at
the time of delivery as recorded or if sent by first class post on
the second working day after posting or in the case of being left as
appropriate at the registered office or last known address, the date
on which it was so left.
16. DEDUCTIONS
For the purposes of the Wages Act 1986 and otherwise the Executive
consents to the deduction from his wages of any sums owing by him to
the Company at any time and he also agrees to make any payment to
the Company of any sums owing by him to the Company upon demand by
the Company at any time. This clause is without prejudice to the
rights of the Company to recover any sums or balance of sums owing
by the Executive to the Company by legal proceedings.
17. GENERAL
17.1 The information in this Agreement constitutes a written statement of
the terms of employment of the Executive In accordance with the
provisions of the Act.
17.2 This Agreement (including its Schedules) constitute the entire and
only legally binding agreement between the parties relating to the
employment of the Executive by the Company or any Group Company and
replaces any previous employment agreements or arrangements.
No variation to this Agreement shall be effective unless made in
writing signed by or on behalf of the parties and expressed to be
such a variation.
17.3 No failure or delay by the Company in exercising any remedy, right,
power or privilege under or in relation to this Agreement shall
operate as a waiver of the same nor shall any single or partial
exercise of any remedy, right, power or privilege preclude any
further exercise of the same or exercise of any other remedy, right,
power or privilege.
17.4 No waiver by the Company of any of the requirements of this
Agreement or of any of its rights under this Agreement shall have
effect unless given in writing and signed by the Board. No waiver of
any particular breach of the provisions of this Agreement shall
operate as a waiver of any repetition of that breach.
17.5 If any provision of this Agreement shall be, or become, void or
unenforceable for any reason within any jurisdiction, this shall
affect neither the validity of that provision within any other
jurisdiction nor any of the remaining provisions of this Agreement.
17.6 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of
England.
17.7 In the event of any claim, dispute or difference arising out of or
in connection with this Agreement the parties hereto irrevocably
agree and submit to the non-exclusive jurisdiction of the Courts of
England.
18. TRANSFER OF SHARES IN AHI
<PAGE>
18.1 The Executive shall be permitted to transfer the shares in AHI held
by him to AHI, or as it may direct, if such transfer is in whole or
part satisfaction of a liability of the Executive under the
Warranties in the Acquisition Agreement.
18.2 AHI agrees to accept the surrender to AHI (or as it directs) of any
shares in AHI which the Executive wishes to surrender in order to
satisfy in whole or part a liability in respect of breach of
Warranty under the Acquisition Agreement and agrees that the
liability of the Executive in respect of such breach shall be
treated as discharged to the extent of the market value on the date
of surrender of the AHI shares surrendered.
18.3 A transfer of shares in AHI by the Executive shall permitted for the
purpose of Clause 11.4.9:
18.3.1 if made within 12 months after the date hereof, only if the
number of such shares transferred by the Executive does not
in aggregate exceed N calculated as follows:
N = (JS - 10)% x E
18.3.2 if made on or after 12 months after but prior to the third
anniversary hereof, only if the number of such shares
transferred by the Executive does not in aggregate exceed N
calculated as follows:
N = (JSWK)% x E
where:
JS = the percentage of the holding of shares in AHI
held by Jonathan Spiller transferred by him (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
JSWK = the percentage of the aggregate of the holdings of
shares in AHI held by Jonathan Spiller and Warren
Kanders in aggregate transferred by them (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
E = the number of shares in AHI held by the Executive
immediately prior to the date of the transfer by the
Executive; or
18.3.3 if made on or after the second but before the third
anniversary of the date hereof and such transfer would not
result in the aggregate nominal value of all transfers of
such shares by the Executive exceeding 25 per cent in
nominal value of his holding of such shares on the date
immediately following the date hereof .
19. GUARANTEE
<PAGE>
19.1 AHI hereby unconditionally guarantees and undertakes to the
Executive that the Company will duly and punctually observe all the
obligations under this Agreement to the extent that if the Company
shall fail for whatever reason to perform such obligations AHI shall
be liable to perform the same in all respects as if AHI were the
party principally bound thereby in place of the Company.
19.2 This Guarantee shall constitute a direct primary and unconditional
liability on AHI and shall not be affected by any time or indulgence
granted to the Company by the Executive or by any act, omission,
deed or matter of whatever description whereby AHI as surety only
would or might have been released PROVIDED THAT AHI shall have the
same rights and defences as against the Executive as are or would be
enjoyed by the Company.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives.
<PAGE>
SCHEDULE 1
POWER OF ATTORNEY
By this Power of Attorney made on 1997, I, ALASTAIR GEORGE ANGUS
MORRISON of Flat 6, 21 Embankment Gardens, London SW3 4LW in accordance with
the terms of the service agreement ("the Service Agreement" of even date
between myself and DSL Group Limited ("the Company") HEREBY APPOINT any
director of Armor Holdings, Inc. ("AHI") to act as my attorney with authority
in my name and on my behalf (so that words and expressions defined in the
Service Agreement shall have the same meanings herein):-
(a) on or after the Termination Date to do any things and sign any
documents as may be required under the constitution of the Company
and each Group Company to make my resignation as a director from
those companies effective;
(b) to sign or execute any and all agreements, instruments, deeds or
other papers and to do all such things in my name as may be
necessary or desirable to implement my obligations in connection
with clause 11.5 of the Agreement;
(c) within 2 days of the Company having requested my resignation
pursuant to clause 11.5.1 to do any thing and sign any documents to
make my resignation as a director from those Companies effective;
(d) on or after the Termination Date to sign or execute any and all
instruments, deeds or other papers and to do all such things in my
name as may be necessary or desirable to implement a transfer of all
my shares in AHI or any subsidiary thereof which I may hold as a
bare nominee; and
(e) to appoint any substitute and to delegate to that substitute all or
any powers conferred by this Power of Attorney.
I declare that this Power of Attorney, having been given by me to secure my
obligations in connection with clause 11.5 of the Service Agreement, shall be
irrevocable in accordance with section 4 of the Powers of Attorney Act 1971.
IN WITNESS whereof this Power of Attorney has been duly executed.
EXECUTED as a DEED and
DELIVERED
in the presence of:-
Witness name:
Address:
Occupation:
<PAGE>
SCHEDULE 2
PROTECTION OF BUSINESS INTERESTS
For the avoidance of doubt, the provisions of this Schedule shall not apply if
this Agreement is terminated by the Company in breach of its terms.
In this Schedule the following words and expressions shall have the
following meanings:-
"Business" the business or businesses of the Company
or any Group Company in or with which the
Executive has been involved or concerned
namely the business of the marketing,
development, design or provision of
security or security related services at
any time during the period of twelve months
prior to the Termination Date;
"directly or indirectly" the Executive acting either alone or jointly
with or on behalf of any other person, firm
or company, whether as principal, partner,
manager, employee, contractor, director,
consultant, investor or otherwise;
"Group Company" AHI, each subsidiary and subsidiary
undertaking thereof (either direct or
indirect) and any other entity in which any \
Group Company holds an interest.
"Key Personnel" any person who is at the Termination Date
or was at any time during the period of
twelve months prior to the Termination Date
employed or engaged as a consultant in the
Business in an executive, senior managerial
or sales capacity and with whom the
Executive has had dealings other than in a
de minimis way during the course of his
employment under this Agreement;
"Prospective Customer" any person firm or company who
has been engaged in negotiations at any
time during the twenty-four months prior to
the Termination Date, with which the
Executive has been personally involved,
with the Company or any Group Company with
a view to purchasing Relevant Services from
the Company or any Group Company;
"Relevant Area" United Kingdom, the African Continent, the
Asian Continent, the Former Yugoslavia, the
Former Soviet Union, the United States of
America and the South American Continent;
"Relevant Customer" any person firm or company who at
any time during the twenty-four months
prior to the Termination Date was a
customer of the Company or any Group
Company, with whom or which the Executive
directly dealt other than in a de minimus
way or for whom or which the Executive was
responsible on behalf of the
<PAGE>
Company or any Group Company at any time
during the said period (or the Term if
shorter);
"Relevant Period" the period of 12 months from the
Termination Date less any period during
which the Executive has not been provided
with work pursuant to clause 3.4 of this
Agreement;
"Relevant Services" any services competitive with
those supplied by any Company or Group
Company at any tine during the twelve
months prior to the Termination Date in the
supply of which the Executive was directly
involved or concerned at any time during
the said period;
"Relevant Supplier" any person firm or company who at any time
during the twelve months prior to the
Termination Date was a supplier of any
goods or services (other than utilities and
goods or services supplied for
administrative purposes) to the Company or
any Group Company and with whom or which
the Executive had personal dealings during
the course of his employment under this
Agreement other than in a de minimus way;
and
"Termination Date" the date on which the employment of the
Executive under this Agreement shall
terminate.
1. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time during the Relevant Period:-
1.1 solicit away from the Company or any Group Company; or
1.2 endeavour to solicit away from the Company or any Group Company; or
1.3 employ or engage; or
1.4 endeavour to employ or engage,
any Key Personnel.
2. The Executive shall not without the prior written consent of the
Board directly or indirectly at any time within the Relevant Period:-
2.1 (a) solicit the custom of; or
(b) deal with,
any Relevant Customer or Prospective Customer in respect of any
Relevant Services; or
2.2 (a) interfere; or
<PAGE>
(b) endeavour to interfere,
with the continuance of supplies to the Company and/or any Group
Company (or the terms relating to those supplies) by any Relevant
Supplier.
3. The Executive shall not without the prior written consent of the
Board directly or indirectly at any time within the Relevant Period
engage or be concerned employed or interested in any business within
the Relevant Area which (a) competes or (b) will at any time during
the period of six months from the Termination Date compete with the
Business provided that the Executive may hold (directly or through
nominees) by way of bona fide personal investment any units of any
authorised unit trust and up to five per cent. of the issued shares,
debentures or securities of any class of any company whose shares are
listed on a recognised investment exchange within the meaning of the
Financial Services Act 1986 or dealt in the Alternative Investment
Market.
4.1 The Executive acknowledges (having taken appropriate legal advice) that
the provisions of this Schedule are fair and reasonable and necessary
to protect the goodwill and interests of the Company and the Group
Companies and shall constitute separate and severable undertakings
given for the benefit of the Company and each Group Company and may be
enforced by the Company on behalf of any of them.
4.2 If any of the restrictions or obligations contained in this Schedule is
held not to be valid on the basis that it exceeds what is reasonable
for the protection of the goodwill and interests of the Company and the
Group Companies but would be valid if part of the wording were deleted
then such restriction or obligation shall apply with such deletions as
may be necessary to make it enforceable.
4.3 The Executive acknowledges and agrees that he shall be obliged to draw
the provisions of this Schedule to the attention of any third party who
may at any time before or after the termination of the Executive's
employment hereunder, offer to engage the Executive in any capacity and
for whom or with whom the Executive intends to work.
<PAGE>
SCHEDULE 3
BONUS
The annual bonus to which the Executive shall be entitled in accordance with
clause 5.3 ("the Bonus") shall be calculated as follows:-
1. The Bonus shall be a sum equal to the fixed annual salary (as
aforesaid) multiplied by the Bonus Factor, but shall in no
circumstances be a negative figure.
2. The Bonus shall not exceed a sum equal to 25 per cent. of the fixed
annual salary of the Executive payable under clause 5.1 in respect of
each completed Financial Year of the Company.
3. The Bonus in respect of the Financial Year of the Company in which the
Executive's employment hereunder commences shall bear the same
proportion to the Bonus as would have been payable had the Executive
been employed throughout the Financial Year as the period from the
commencement of his employment to the end of such Financial Year bears
to the whole of such Financial Year.
4. The Bonus Factor for the purposes of this schedule shall be calculated
in accordance with the following formula:-
0.83 x (P - 90)
----------------
100
Where:
P shall be whichever is the lesser of 120 or is the
percentage of Budgeted Profit actually achieved as
evidenced by the audited accounts for the relevant
Financial Year;
Budgeted Profit means the earnings before interest and tax (taking full
account of exceptional items but taking no account of
extraordinary items) budgeted for by the Company and
approved by the board of AHI for the relevant Financial
Year (or for the period from the date of incorporation
of the Company to 31 December 1996) as evidenced by the
annual budget agreed by the Board and approved by the
board of AHI.
5. CERTIFICATION
The Company shall as soon as possible after the audit of the relevant
accounts for each Financial Year has been completed procure that the
auditors deliver to the Executive a certificate stating the amount of
the gross profits of the Company for that period and the Bonus for that
period.
<PAGE>
6. PAYMENT
6.1 The Bonus in respect of any Financial Year shall be payable to
the Executive within fifteen business days following the date
on which the annual earnings of AHI for the period to which the
Bonus relates shall have been publicly announced.
6.2 If the Executive's employment hereunder shall terminate
(otherwise than by reason of the proper exercise by the Company
of its rights of termination under clause 11 in which case no
further Bonus shall be payable) during the currency of any
Financial Year the Executive shall not be entitled to receive
any Bonus in respect of that Financial Year, unless otherwise
decided by the Board in its absolute discretion.
7. DETERMINATION
The certificate of the auditors stating the amount of the Bonus shall,
in the absence of manifest error, be final and binding and in giving
such certificate the auditors shall act as experts and not as
arbitrators.
8. RELATIONSHIP TO OTHER BENEFITS
The Bonus will be:-
8.1 excluded from pensionable earnings for the purpose of any
relevant occupational pension and life assurance or permanent
health insurance scheme; but
8.2 (subject to the provisions of any relevant scheme) available
for the purpose of making additional voluntary contributions.
9. The Financial Year shall have the meaning ascribed to it in section 232
of the Companies Act 1985.
<PAGE>
SIGNED by )
a Director duly authorised )
for and on behalf of )
DSL GROUP LIMITED )
SIGNED by )
ALASTAIR GEORGE )
ANGUS MORRISON )
for and on behalf of )
)
SIGNED by )
a Director duly authorised )
for and on behalf of )
ARMOR HOLDINGS, INC. )
<PAGE>
Dated 16 April 1997
--------
(1) DSL GROUP LIMITED
- and -
(2) THE HON. RICHARD NICHOLAS BETHELL MBE
- and -
(3) ARMOR HOLDINGS, INC.
------------------------------------------
SERVICE AGREEMENT
------------------------------------------
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 0171-638-1111
Fax: 0171-972-7990
<PAGE>
AN AGREEMENT made on 16 April 1997
BETWEEN:-
(1) DSL GROUP LIMITED (registered number 3206563) whose registered
office is at Egginton House, 36 Buckingham Gate, London SW1E 6PB
(the "COMPANY");
(2) THE HON. RICHARD NICHOLAS BETHELL MBE of 60 Bromfelde Road, London
SW4 6PR (the "EXECUTIVE"); and
(3) ARMOR HOLDINGS, INC., whose principal place of business is at 13386
International Parkway, Jacksonville, Florida 32218 USA ("AHI").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement the following words and expressions shall have the
following meanings:-
"ACQUISITION AGREEMENT" means the agreement of today's date between,
inter alios, the executive and AHI relating to the sale and purchase
of shares in the Company;
"THE ACT" means Employment Protection (Consolidation) Act 1978;
"BOARD" means the board of directors of the Company from time to time;
"CHAIRMAN" means the Chairman of the Board from time to time;
"EFFECTIVE DATE" means the date of this Agreement;
"GROUP COMPANY" means any company which from time to time is:-
(a) a subsidiary undertaking of the Company;
(b) a holding company of the Company;
(c) a subsidiary undertaking of any such holding
company; or
(d) an associated company being any company in which the
Company or any Group Company has a shareholding of
25% or more or any company which has a shareholding
of 25% or more in the Company or any Group Company;
"subsidiary" and "holding company" have the meanings attributed to
them by section 736 of the Companies Act 1985;
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"PENSION SCHEME" means The DSL Group (1995) Pension Scheme or such
other pension scheme that may be substituted therefor by the
Company;
"TERM" means the period of the Executive's employment hereunder;
"TERMINATION DATE" means (other than for the purposes of Schedule 2
to this Agreement) the date on which the employment of the Executive
under this Agreement shall terminate for whatever reason, and
derivative expressions shall be construed accordingly.
1.2 Words and phrases which are not defined in this Agreement but which
are defined in the Act, the Companies Act 1985, or the Insolvency
Act 1986 shall be construed as having those meanings.
1.3 References to any statute or any statutory provision shall be
construed as references to the statute or statutory provision as in
force at the date of this Agreement and as subsequently re-enacted
or consolidated and shall include references to any statute or any
statutory provision of which it is a re-enactment or consolidation.
1.4 Unless the context otherwise requires references in this Agreement
to the masculine gender shall, where appropriate, be deemed to
include the feminine and vice versa.
1.5 The Schedules to this Agreement are an integral part of this
Agreement and references to this Agreement include reference
thereto.
2. APPOINTMENT AND TERM
2.1 The Company shall employ the Executive and the Executive shall serve
the Company on the terms set out in this Agreement.
2.2 The Executive's employment under this Agreement shall commence on
the Effective Date and continue (subject to the provisions of this
Agreement) until the third anniversary of the date hereof whereupon
the Executive's employment under this Agreement shall forthwith
terminate unless otherwise agreed in writing between the parties.
2.3 For the purposes,of the Act the Executive's previous employment with
Defence Systems Limited count as part of the Executive's continuous
employment with the Company. The Executive's continuous employment
accordingly began on 3 June 1991.
2.4 The Executive represents to the Company that he is entitled to enter
into this Agreement and to implement and carry out its terms and
that by so doing he shall not be in breach of any
obligation (contractual or otherwise) to any third party which would
entitle that third party to damages or any other remedy at law.
2.5 If in the financial year ending 31 December 1997 the Company does
not achieve 100 per cent of the operating profit forecasted in the
annual budget approved by the Board and
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the board of Directors of AHI for that year the Executive's
employment hereunder shall be deemed to continue (subject to the
provisions of this Agreement) until the second anniversary of the
date hereof whereupon the Executive's employment under this
Agreement shall forthwith terminate unless otherwise agreed in
writing between the parties.
3. DUTIES
3.1 The Executive shall perform the duties and exercise the powers which
from time to time may be assigned to him or vested in him by the
Board and shall devote the whole of his time, ability and attention
to his duties under this Agreement during normal office hours and
such other times as may be reasonably required for the proper
performance of his duties and he shall use his utmost endeavours to
promote the interests of the Company and any Group Company and shall
not knowingly do or willingly permit to be done anything to the
prejudice, loss or injury of the Company or any Group Company and
shall carry out such duties in a competent manner. The Executive
shall not be entitled to any additional remuneration for work
performed outside normal office hours.
3.2 The Board shall be entitled at any time to require the Executive to
perform services not only for the Company but also for any Group
Company including, if so required, acting as a director of any Group
Company.
3.3 The Executive shall at all times keep the Board promptly and fully
informed (in writing if so requested) of his conduct of the business
or affairs of the Company and any Group Company and provide such
explanations of his conduct as the Board may require.
3.4 Notwithstanding the provisions of clause 3.1, the Company may at any
time following the giving of notice by either party to terminate
this Agreement and for such period as it may specify not exceeding
the length of notice given cease to provide work for the Executive
in which event, during such period the other provisions of this
Agreement including those relating to the Executive's remuneration
shall continue to have full force and effect but the Executive shall
not be entitled to access to any premises of the Company or any
Group Company.
3.5 Subject always to clause 4, during the Term the Executive shall not
without the prior written consent of the Board engage in any
activities, public office or other occupation outside his employment
which may detract from the proper and timely performance of his
duties under this Agreement.
3.6 The Executive's principal place of work shall be at the principal
place of business of the Company in the United Kingdom or such other
location in the United Kingdom as may be required by the Company
from time to time and he shall undertake any travel as may be
necessary for the proper performance of his duties as the Board may
from time to time require.
4. CONFLICTS OF INTEREST AND DEALINGS IN SECURITIES
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4.1 During the Term the Executive shall not whether alone or jointly
with or on behalf of any other person, firm or company and whether
as principal, partner, manager, employee, contractor, director,
consultant, investor or otherwise (except as a representative or
nominee of the Company or any Group Company or otherwise with the
prior consent in writing of the Board) be engaged, concerned or
interested in any other business which:-
4.1.1 is wholly or partly in competition with any business
carried on by the Company or any Group Company; or
4.1.2 as regards any goods or services is a supplier to or
customer of the Company or any Group Company, provided that
the Executive may hold (directly or through nominees) by
way of bona fide personal investment any units of any
authorised unit trust and up to five per cent of the issued
shares, debentures or other securities of any class of any
company whose shares are listed on a recognised investment
exchange within the meaning of the Financial Services Act
1986 or dealt in the Alternative Investment Market.
4.2 The Executive acknowledges that he shall not enter into any
transaction which contravenes the insider dealing provisions
contained in Part V of the Criminal Justice Act 1993.
4.3 The Executive undertakes at all times to comply with the share
dealing rules adopted from time to time by the Company.
5. SALARY AND BONUS
5.1 Subject to clause 5.2 the Executive shall receive a fixed annual
salary of (pound)116,424 which shall accrue from day to day and be
payable by equal monthly instalments in arrear on the last working
day of each calendar month or such salary (which may not be lower)
as may be agreed and confirmed to the Executive in writing by the
Board in its sole discretion from time to time.
5.2 For the year ending 31 December 1997 if the Company does not achieve
75 per cent of the operating profit forecasted in the annual budget
approved by the Board and the Board of Directors of AHI, the
Executive shall receive, for the year ended 31 December 1998, a
fixed annual salary of (pound)100,000 PROVIDED THAT if in the year
ending 31 December 1998 the Company achieves 100 per cent of the
operating profit forecasted in the annual budget for
such year then the fixed annual salary of the Executive shall be
increased to (pound)116,424 in respect of the year ending 31
December 1999 plus any further increase which the Board and the
Board of Directors of AHI may approve.
5.3 In addition to the Executive's fixed annual salary, he shall receive
an annual bonus in respect of each financial year of the Company
calculated on the basis and in accordance with the definitions set
out in Schedule 3. The Board reserves the right to amend the terms
of the bonus calculation at any time.
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5.4 The Executive shall not be entitled to any fees in respect of any
directorship of the Company or any Group Company and to give effect
to this clause the Executive shall forthwith pay to the Company or
procure that the Company is paid all such fees received.
5.5 Payment of such salary and such bonuses (if any) to the Executive
shall be made either by the Company or by another company in the
Group and, if by more than one company, in such proportion as the
Board may from time to time think fit.
5.6 In addition there shall be refunded to the Executive such sums as
shall cover all reasonable out of pocket expenses incurred by him on
the Group's business (including hotel expenses and expenses of
subsistence and travelling), which said expenses shall be evidenced
in such manner as the Company may require.
6. CREDIT CARD
If the Company shall make any credit card available to the
Executive, the Executive shall:-
6.1 take good care of such card and forthwith report any loss of such
card to the Board;
6.2 use the card only for the purposes of the Group's business; and
6.3 return the card forthwith to the Company on request.
7. PENSION AND OTHER BENEFITS
7.1 The Executive is eligible for membership of the Pension Scheme
subject to the rules of the Pension Scheme from time to time. The
Company shall contribute to the Pension Scheme at a rate according
to its discretion acting on the advice of the Actuary as defined in
the rules of the Pension Scheme. The Executive's contributions to
the Pension Scheme will be deducted from his salary and paid by the
Company to the trustees of the Pension Scheme subject to any Inland
Revenue limits and in accordance with the rules of the Pension
Scheme. A copy of these rules will be supplied by the Company on
request.
7.2 A contracting-out certificate under the Pension Schemes Act 1993 is
not in force for the Executive's employment.
7.3 During the Term, the Company shall pay in respect of the Executive,
his spouse and dependent children up to the age of 18 years of age
premiums to a private medical insurance scheme in accordance with
the information describing the Company's medical insurance
arrangements which has already been supplied to the Executive.
7.4 During the Term the Executive shall participate at the Company's
expense in such life and personal accident/injury insurance schemes
as the Company shall from time to time maintain for the benefit of
senior executives.
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7.5 Any benefits available under clauses 7.3 and 7.4 above are subject
to the rules of the relevant scheme from time to time in force.
8. HOLIDAYS
8.1 The Executive shall be entitled (in addition to the usual public and
Bank holidays in England and Wales) to 30 days' holiday on full pay
in every calendar year to be taken at such reasonable time or times
as the Board shall approve. Any holiday not so used in a calendar
year may not be carried forward without the approval of the Board.
8.2 For the calendar year in which the Executive's employment commences
the Executive shall be entitled to his annual holiday entitlement
calculated on the basis of 2 days' holiday for each completed
calendar month of service in the then current calendar year. Upon
termination of the Executive's employment the Executive shall either
be entitled to salary in lieu of any outstanding holiday entitlement
(calculated on the basis aforesaid) or be required to repay to the
Company any salary received in respect of holiday taken in excess of
his holiday entitlement such salary to be calculated on the basis of
1/227 of the fixed annual salary payable to the Executive pursuant
to clause 5.1 for each day of outstanding or excess holiday
entitlement as appropriate.
8.3 If this Agreement is terminated under clause 11.4, the Executive
will not be entitled to any payment in lieu of holiday not taken at
the Termination Date.
9. ILLNESS OR ACCIDENT
9.1 The Executive shall from time to time at the request and expense of
the Company submit to medical examinations and tests by a medical
practitioner nominated by the Company, the results of which shall,
subject to the provisions of the Access to Medical Reports Act 1988
(as applicable), be disclosed to the Company.
9.2 If the Executive is absent from his duties as a result of sickness
or injury for a period of seven days or more he will at the request
of the Company produce medical certificates to the Company in
respect of this absence.
9.3 If the Executive shall be absent for up to a maximum of 130 working
days in any rolling period of twelve months owing to accident or
illness so that he is unable properly to perform his duties he shall
continue to be entitled to his full salary excluding any bonus or
commission during any period of absence up to a maximum of 130
working days in any rolling period of 12 months provided that if at
any time during such a period of absence referred to above the
Executive becomes eligible to receive benefits under a permanent
health insurance policy in respect of which the Company or any Group
Company has paid premiums on behalf of the Executive or under any
Social Security legislation the Company shall be entitled to set off
or deduct the amount of any such benefits from the salary payable to
the Executive under this clause. During any such period of absence,
the Company shall be entitled at any time to appoint a further
executive director or employee to perform the Executive's duties and
to exercise his powers.
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9.4 The Company shall pay the Executive all sums payable by way of
statutory sick pay in accordance with the legislation in force at
the time of absence and any remuneration paid shall be deemed to be
inclusive of statutory sick pay.
9.5 If the Executive's absence shall be or appear to be occasioned by
actionable negligence of a third party in respect of which damages
are or may be recoverable, then all sums paid by the Company shall
constitute loans to the Executive, who shall:
9.5.1 forthwith notify the Company of the relevant circumstances
and of any claim, compromise, settlement or judgement made
or awarded in connection therewith;
9.5.2 give to the Company all such particulars of such matters
as the Company may reasonably require; and
9.5.3 if the Executive recovers damages in respect of such
actionable negligence, refund to the Company such sum (not
exceeding the lesser of:
(a) the amount of damages recovered by him (less all
costs and expenses incurred by the Executive in
obtaining such damages) under such compromise
settlement or judgement; and
(b) the sums advances to him in respect of the period
of the incapacity) as the Company may determine.
10. EXPENSES
The Executive shall be entitled to be reimbursed all reasonable
out-of-pocket expenses (including hotel, travelling and
entertainment expenses but excluding any car parking fines or road
traffic offence fines) which he may from time to time be authorised
to incur in the proper performance of his duties, subject to the
production of such receipts or other evidence as the Company may
reasonably require.
11. TERMINATION
11.1 The Company shall at all times be entitled to terminate the Agreement
pursuant to clause 2.2.
11.2 The Company may, at its sole and absolute discretion, terminate the
Executive's employment forthwith at any time by serving a notice
under this clause stating that the Agreement is being determined in
accordance with this clause 11.2 and undertaking to pay to the
Executive within 14 days salary in lieu of any required period of
notice or unexpired part thereof (subject to tax and National
Insurance) together with any accrued holiday entitlement pursuant to
clause 8.2. For the avoidance of doubt, where the Company terminates
the Agreement in accordance with this clause the terms of, inter
alia, clause 12 and Schedule 2 shall remain in full force and
effect.
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11.3 Where the Company terminates this Agreement otherwise than in
accordance with clause 2.2 or 11.2 (subject always to clause 11.4),
any damages to which the Executive may be entitled shall be
calculated in accordance with ordinary common law principles
including those relating to mitigation of loss.
11.4 Notwithstanding the provisions of clauses 11.1 and 11.2, the Company
shall be entitled, by notifying the Executive in writing, to
terminate this Agreement and the Executive's employment forthwith
without any payment by way of compensation, damages or otherwise if
the Executive shall:-
11.4.1 commit any act of serious misconduct;
11.4.2 commit any material or persistent breach of any of the terms
or conditions of this Agreement including any wilful neglect
or refusal to carry out any of his duties or to comply with
any instruction given to him by the Board Provided that if
any such breach of the terms and conditions of this
Agreement, or any such neglect or refusal, is capable of
remedy then this subclause shall have effect only if
written notice of that breach is served by the Company on
the Executive specifying that it is served under this
subclause and the Executive shall have failed to remedy
such a breach within 14 days of the service of such notice;
11.4.3 have a bankruptcy order made against him or shall compound
with or enter into any voluntary arrangements with his
creditors;
11.4.4 be charged with or convicted of any criminal offence (other
than an offence under the Road Traffic Acts for which a
penalty of imprisonment cannot be imposed);
11.4.5 be disqualified from holding office in the Company or any
other company under the Insolvency Act 1986 or the Company
Directors Disqualification Act 1986 or be disqualified or
disbarred from membership of, or be subject to any serious
disciplinary sanction by, any professional or other body,
which undermines the confidence of the Board in the
Executive's continued employment with the Company;
11.4.6 act in any way which may in the reasonable opinion of the
Board bring the Company or any Group Company into disrepute
or discredit;
11.4.7 in his capacity as a director of the Company resign or be
removed, except where this has been required by the Company
pursuant to clause 11.5.1;
11.4.8 transfer or charge or purport to transfer or charge (other
than as permitted by clause 18) any shares in AHI held by
him without the prior written consent (in the case of
charging, such consent not to be unreasonably withheld) of
the Board of Directors of AHI prior to the third
anniversary of the date hereof; or
11.4.9 take any steps to have the shares of common stock of AHI
issued or to be issued to him registered pursuant to the
Registration Rights Agreement entered into
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between the Executive and Armor Holdings Inc on the date
hereof (other than in exercise of the Piggy Back Rights as
defined and set out therein) without the prior written
consent of the Board of AHI
in which event, for the purposes of this Agreement, the Termination
Date shall be the date of the written notice terminating the
Executive's employment.
11.5 The Executive shall resign from the Board and the boards of any
Group Company of which he is director:-
11.5.1 if at any time during the Term the Executive is prevented
from performing his duties whether through sickness or
because the Company has exercised its rights under clause
3.4 or otherwise howsoever and the Company requires the
Executive to resign; and in any event
11.5.2 on the Termination Date,
and the Executive shall at the time of signing this Agreement
appoint the Company as his attorney by executing a power of attorney
in the form set out in Schedule 1 to do and sign in his name and on
his behalf any things and documents as may be required under the
constitution of each company to make his resignation effective
(including the transfer (without payment) to the Company or as the
Company may direct may qualifying shares provided by it).
11.6 The proper exercise by the Company of its right of termination under
clause 11.4 shall be without prejudice to any other rights or
remedies which the Company or any Group Company may have or be
entitled to exercise against the Executive.
11.7 If the employment of the Executive under this Agreement shall be
terminated for the purpose of reconstruction or amalgamation only
whether by reason of the liquidation of the Company or otherwise and
he shall be offered employment with any concern or undertaking
resulting from this reconstruction or amalgamation on terms and
conditions no less favourable than the terms of this Agreement then
the Executive shall have no claim against the Company in respect of
the termination of his employment hereunder.
11.8 The Executive shall not at any time during any period when he is
required to cease the performance of his duties under clause 3.4 or
after the Termination Date make any public statements in relation to
the Company or any Group Company or any of their officers or
employees. The Executive shall not after the Termination Date
represent himself as being employed by or connected with the Company
or any Group Company.
11.9 All credit, charge and expense cards, motor cars, car keys and all
books, papers, drawings, designs, documents, records and computer
software kept or made by or in the possession or control of the
Executive relating to the businesses of the Company and any Group
Company and all other property of the Company and any Group Company
are and remain the property of the Company or such Group Company and
the Executive shall
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deliver all such items in his possession custody
or control at the Termination Date immediately to the Company.
11.10 If the Executive is entitled to receive any payment in respect of or
attributable to compensation or damages for termination of his
employment hereunder or in lieu of notice such sum shall be payable
in maximum instalments equal to the last monthly fixed salary of the
Executive prior to such termination and the Executive hereby waives
any right to such payment after such termination after he shall have
accepted employment or consultancy with any other person to the
extent that the Executive becomes entitled to receive any
remuneration or any person with whom the Executive is connected
becomes entitled to receive any amount in respect of or referrable
to the provision of services by the Executive to any other person.
11.11 Any right of the Executive to participate in any Option Pool
established by AHI shall be allocated no value in determining any
rights of such Executive to compensation or damages for loss of
office.
12. CONFIDENTIALITY
12.1 The Executive acknowledges that during the Term he shall in the
performance of his duties become aware of trade secrets and other
confidential information relating to the Company, the Group
Companies, their businesses and its or their clients or customers
and their businesses.
12.2 Without prejudice to his general duties at common law in relation to
such trade secrets and other confidential information, the Executive
shall not during the Term or at any time after
the Termination Date disclose or communicate to any person or
persons or make use (other than in the proper performance of his
duties under this Agreement) and shall use his best endeavours to
prevent any disclosure, communication or use by any other person, of
any such trade secrets or confidential information.
12.3 Since the Executive in the course of his employment or by reason of
services rendered for or offices held in any other company may
obtain knowledge of the trade secrets or other confidential
information or such company, the Executive hereby undertakes that he
will at the request and cost of the Company enter into a direct
agreement or undertaking with such other company whereby he will
accept restrictions corresponding to the restrictions herein
contained (or such of them as may be appropriate in the
circumstances) in relation to such products and services and such
area and for such period as such company may reasonably require for
the protection of its legitimate interests.
12.4 The provisions of this clause shall cease to apply to information or
knowledge which comes into the public domain otherwise than by
reason of the default of the Executive.
12.5 For the purposes of clause 12 confidential information shall
include, but not be limited to, all and any information (whether or
not recorded in documentary form or on computer disk or tape) which
relates to:
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12.5.1 the business methods, corporate plans, management systems,
finances, maturing new business opportunities or research
and development projects of the Company;
12.5.2 suppliers, their identities and prices;
12.5.3 customers, their identity, needs and requirements;
12.5.4 marketing or sales of any past, present or future product
or service of the Company including without limitation
sales targets and statistics, market share and pricing
statistics, market surveys and plans, market research
reports, sales techniques, price lists, discount structures
and advertising and promotional material;
12.5.5 trade secrets, technical specifications and other technical
information relating to the businesses of the Company; and
12.5.6 all information material to any dispute or litigation
involving the Company.
13. PROTECTION OF BUSINESS INTERESTS
The Executive shall be bound by the provisions of Schedule 2.
14. DISCIPLINARY AND GRIEVANCE PROCEDURE
14.1 Any disciplinary matters affecting the Executive will be dealt with
by the Chairman. There are no specific disciplinary rules affecting
the Executive. Should the Executive wish to appeal against any
disciplinary decision he should submit his appeal in writing to the
Board whose decision on such appeal shall be final.
14.2 If the Executive wishes to seek redress for any grievance relating
to his employment he should first discuss the matter with the
Chairman. If the matter is not then settled he should submit his
grievance to the Board in writing whose decision on such grievance
shall be final.
14.3 In order to investigate a complaint against the Executive, the
Company reserves the right to suspend the Executive on full pay and
to exclude the Executive from any premises of the Company and any
Group Company for so long as it deems necessary to carry out a
proper investigation and to hold any appropriate disciplinary
hearings.
15. NOTICES
Any notice to be given under this Agreement shall be in writing.
Notices may be served by either party by personal service or by
recorded delivery or by first class post addressed to the other
party or by leaving such notice at (in the case of the Company) its
registered office for the time being and (in the case of the
Executive) his last known address and any notice given shall be
deemed to have been served at the time at which
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the notice was personally served or if sent by recorded delivery at
the time of delivery as recorded or if sent by first class post on
the second working day after posting or in the case of being left as
appropriate at the registered office or last known address, the date
on which it was so left.
16. DEDUCTIONS
For the purposes of the Wages Act 1986 and otherwise the Executive
consents to the deduction from his wages of any sums owing by him to
the Company at any time and he also agrees to make any payment to
the Company of any sums owing by him to the Company upon demand by
the Company at any time. This clause is without prejudice to the
rights of the Company to recover any sums or balance of sums owing
by the Executive to the Company by legal proceedings.
17. GENERAL
17.1 The information in this Agreement constitutes a written statement of
the terms of employment of the Executive In accordance with the
provisions of the Act.
17.2 This Agreement (including its Schedules) constitute the entire and
only legally binding agreement between the parties relating to the
employment of the Executive by the Company or any Group Company and
replaces any previous employment agreements or arrangements.
No variation to this Agreement shall be effective unless made in
writing signed by or on behalf of the parties and expressed to be
such a variation.
17.3 No failure or delay by the Company in exercising any remedy, right,
power or privilege under or in relation to this Agreement shall
operate as a waiver of the same nor shall any single or partial
exercise of any remedy, right, power or privilege preclude any
further exercise of the same or exercise of any other remedy, right,
power or privilege.
17.4 No waiver by the Company of any of the requirements of this
Agreement or of any of its rights under this Agreement shall have
effect unless given in writing and signed by the Board. No waiver of
any particular breach of the provisions of this Agreement shall
operate as a waiver of any repetition of that breach.
17.5 If any provision of this Agreement shall be, or become, void or
unenforceable for any reason within any jurisdiction, this shall
affect neither the validity of that provision within any other
jurisdiction nor any of the remaining provisions of this Agreement.
17.6 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of
England.
17.7 In the event of any claim, dispute or difference arising out of or
in connection with this Agreement the parties hereto irrevocably
agree and submit to the non-exclusive jurisdiction of the Courts of
England.
18. TRANSFER OF SHARES IN AHI
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18.1 The Executive shall be permitted to transfer the shares in AHI held
by him to AHI, or as it may direct, if such transfer is in whole or
part satisfaction of a liability of the Executive under the
Warranties in the Acquisition Agreement.
18.2 AHI agrees to accept the surrender to AHI (or as it directs) of any
shares in AHI which the Executive wishes to surrender in order to
satisfy in whole or part a liability in respect of breach of
Warranty under the Acquisition Agreement and agrees that the
liability of the Executive in respect of such breach shall be
treated as discharged to the extent of the market value on the date
of surrender of the AHI shares surrendered.
18.3 If in the financial year ending 31 December 1997 the Company does
not achieve 100 per cent of the operating profit forecasted in the
annual budget approved by the Board and the board of Directors of
AHI for that year the Executive's employment hereunder shall be
deemed to continue (subject to the provisions of this Agreement)
until the second anniversary of the date hereof whereupon the
Executive's employment under this Agreement shall forthwith
terminate unless otherwise agreed in writing between the parties.
18.4 A transfer of shares in AHI by the Executive shall permitted for the
purpose of Clause 11.4.9:
18.4.1 if made within 12 months after the date hereof, only if the
number of such shares transferred by the Executive does not
in aggregate exceed N calculated as follows:
N = (JS - 10)% x E
18.4.2 if made on or after 12 months after but prior to the third
anniversary hereof, only if the number of such shares
transferred by the Executive does not in aggregate exceed N
calculated as follows:
N = (JSWK)% x E
where:
JS = the percentage of the holding of shares in AHI
held by Jonathan Spiller transferred by him (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
JSWK = the percentage of the aggregate of the holdings of
shares in AHI held by Jonathan Spiller and Warren
Kanders in aggregate transferred by them (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
E = the number of shares in AHI held by the Executive
immediately prior to the date of the transfer by the
Executive; or
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18.4.3 if made on or after the second but before the third
anniversary of the date hereof and such transfer would not
result in the aggregate nominal value of all transfers of
such shares by the Executive exceeding 25 per cent in
nominal value of his holding of such shares on the date
immediately following the date hereof .
19. GUARANTEE
19.1 AHI hereby unconditionally guarantees and undertakes to the
Executive that the Company will duly and punctually observe all the
obligations under this Agreement to the extent that if the Company
shall fail for whatever reason to perform such obligations AHI shall
be liable to perform the same in all respects as if AHI were the
party principally bound thereby in place of the Company.
19.2 This Guarantee shall constitute a direct primary and unconditional
liability on AHI and shall not be affected by any time or indulgence
granted to the Company by the Executive or by any act, omission,
deed or matter of whatever description whereby AHI as surety only
would or might have been released PROVIDED THAT AHI shall have the
same rights and defences as against the Executive as are or would be
enjoyed by the Company.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives.
<PAGE>
SCHEDULE 1
POWER OF ATTORNEY
By this Power of Attorney made on 1997, I, THE HON. RICHARD NICHOLAS
BETHELL MBE of 60 Bromfelde Road, London SW4 6PR in accordance with the terms
of the service agreement ("the Service Agreement" of even date between myself
and DSL Group Limited ("the Company") HEREBY APPOINT any director of Armor
Holdings, Inc. ("AHI") to act as my attorney with authority in my name and on
my behalf (so that words and expressions defined in the Service Agreement
shall have the same meanings herein):-
(a) on or after the Termination Date to do any things and sign any
documents as may be required under the constitution of the Company
and each Group Company to make my resignation as a director from
those companies effective;
(b) to sign or execute any and all agreements, instruments, deeds or
other papers and to do all such things in my name as may be
necessary or desirable to implement my obligations in connection
with clause 11.5 of the Agreement;
(c) within 2 days of the Company having requested my resignation
pursuant to clause 11.5.1 to do any thing and sign any documents to
make my resignation as a director from those Companies effective;
(d) on or after the Termination Date to sign or execute any and all
instruments, deeds or other papers and to do all such things in my
name as may be necessary or desirable to implement a transfer of all
my shares in AHI or any subsidiary thereof which I may hold as a
bare nominee; and
(e) to appoint any substitute and to delegate to that substitute all or
any powers conferred by this Power of Attorney.
I declare that this Power of Attorney, having been given by me to secure my
obligations in connection with clause 11.5 of the Service Agreement, shall be
irrevocable in accordance with section 4 of the Powers of Attorney Act 1971.
IN WITNESS whereof this Power of Attorney has been duly executed.
EXECUTED as a DEED and
DELIVERED
in the presence of:-
Witness name:
Address:
Occupation:
<PAGE>
SCHEDULE 2
PROTECTION OF BUSINESS INTERESTS
For the avoidance of doubt, the provisions of this Schedule shall not apply if
this Agreement is terminated by the Company in breach of its terms.
In this Schedule the following words and expressions shall have the following
meanings:-
"Business" the business or businesses of the Company
or any Group Company in or with which the
Executive has been involved or concerned
namely the business of the marketing,
development, design or provision of
security or security related services at
any time during the period of twelve months
prior to the Termination Date;
"directly or indirectly" the Executive acting either alone or jointly
with or on behalf of any other person, firm
or company, whether as principal, partner,
manager, employee, contractor, director,
consultant, investor or otherwise;
"Group Company" AHI, each subsidiary and subsidiary
undertaking thereof (either direct or
indirect) and any other entity in which any
Group Company holds an interest;
"Key Personnel"
any person who is at the Termination Date
or was at any time during the period of
twelve months prior to the Termination Date
employed or engaged as a consultant in the
Business in an executive, senior
managerial or sales capacity and with whom
the Executive has had dealings other than
in a de minimis way during the course of his
employment under this Agreement;
"Prospective Customer" any person firm or company who
has been engaged in negotiations at any
time during the twenty-four months prior to
the Termination Date, with which the
Executive has been personally involved,
with the Company or any Group Company with
a view to purchasing Relevant Services from
the Company or any Group Company;
"Relevant Area" United Kingdom, the African Continent, the
Asian Continent, the Former Yugoslavia, the
Former Soviet Union, the United States of
America and the South American Continent;
"Relevant Customer" any person firm or company who at
any time during the twenty-four months
prior to the Termination Date was a
customer of the Company or any Group
Company, with whom or which the Executive
directly dealt other than in a de minimus
way or for whom or which the Executive was
responsible on behalf of the
<PAGE>
Company or any Group Company at any time
during the said period (or the Term if
shorter);
"Relevant Period" the period of 12 months from the
Termination Date less any period during
which the Executive has not been provided
with work pursuant to clause 3.4 of this
Agreement;
"Relevant Services" any services competitive with
those supplied by any Company or Group
Company at any tine during the twelve
months prior to the Termination Date in the
supply of which the Executive was directly
involved or concerned at any time during
the said period;
"Relevant Supplier" any person firm or company who at any time
during the twelve months prior to the
Termination Date was a supplier of any
goods or services (other than utilities and
goods or services supplied for
administrative purposes) to the Company or
any Group Company and with whom or which
the Executive had personal dealings during
the course of his employment under this
Agreement other than in a de minimus way;
and
"Termination Date" the date on which the employment of the
Executive under this Agreement shall
terminate.
1. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time during the Relevant Period:-
1.1 solicit away from the Company or any Group Company; or
1.2 endeavour to solicit away from the Company or any Group Company; or
1.3 employ or engage; or
1.4 endeavour to employ or engage,
any Key Personnel.
2. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time within the Relevant Period:-
2.1 (a) solicit the custom of; or
(b) deal with,
any Relevant Customer or Prospective Customer in respect of any Relevant
Services; or
2.2 (a) interfere; or
<PAGE>
(b) endeavour to interfere,
with the continuance of supplies to the Company and/or any Group
Company (or the terms relating to those supplies) by any Relevant
Supplier.
3. The Executive shall not without the prior written consent of the
Board directly or indirectly at any time within the Relevant Period
engage or be concerned employed or interested in any business within
the Relevant Area which (a) competes or (b) will at any time during the
period of six months from the Termination Date compete with the
Business provided that the Executive may hold (directly or through
nominees) by way of bona fide personal investment any units of any
authorised unit trust and up to five per cent. of the issued shares,
debentures or securities of any class of any company whose shares are
listed on a recognised investment exchange within the meaning of the
Financial Services Act 1986 or dealt in the Alternative Investment
Market.
4.1 The Executive acknowledges (having taken appropriate legal advice) that
the provisions of this Schedule are fair and reasonable and necessary
to protect the goodwill and interests of the Company and the Group
Companies and shall constitute separate and severable undertakings
given for the benefit of the Company and each Group Company and may be
enforced by the Company on behalf of any of them.
4.2 If any of the restrictions or obligations contained in this Schedule is
held not to be valid on the basis that it exceeds what is reasonable
for the protection of the goodwill and interests of the Company and the
Group Companies but would be valid if part of the wording were deleted
then such restriction or obligation shall apply with such deletions as
may be necessary to make it enforceable.
4.3 The Executive acknowledges and agrees that he shall be obliged to draw
the provisions of this Schedule to the attention of any third party who
may at any time before or after the termination of the Executive's
employment hereunder, offer to engage the Executive in any capacity and
for whom or with whom the Executive intends to work.
<PAGE>
SCHEDULE 3
BONUS
The annual bonus to which the Executive shall be entitled in accordance with
clause 5.3 ("the Bonus") shall be calculated as follows:-
1. The Bonus shall be a sum equal to the fixed annual salary (as
aforesaid) multiplied by the Bonus Factor, but shall in no
circumstances be a negative figure.
2. The Bonus shall not exceed a sum equal to 25 per cent. of the fixed
annual salary of the Executive payable under clause 5.1 in respect of
each completed Financial Year of the Company.
3. The Bonus in respect of the Financial Year of the Company in which the
Executive's employment hereunder commences shall bear the same
proportion to the Bonus as would have been payable had the Executive
been employed throughout the Financial Year as the period from the
commencement of his employment to the end of such Financial Year bears
to the whole of such Financial Year.
4. The Bonus Factor for the purposes of this schedule shall be calculated
in accordance with the following formula:-
0.83 x (P - 90)
---------------
100
Where:
P shall be whichever is the lesser of 120 or is the
percentage of Budgeted Profit actually achieved as
evidenced by the audited accounts for the relevant
Financial Year;
Budgeted Profit means the earnings before interest and tax (taking
full account of exceptional items but taking no
account of extraordinary items) budgeted for by the
Company and approved by the board of AHI for the
relevant Financial Year (or for the period from the date
of incorporation of the Company to 31 December 1996) as
evidenced by the annual budget agreed by the Board and
approved by the board of AHI.
5. CERTIFICATION
The Company shall as soon as possible after the audit of the relevant
accounts for each Financial Year has been completed procure that the
auditors deliver to the Executive a certificate stating the amount of
the gross profits of the Company for that period and the Bonus for that
period.
<PAGE>
6. PAYMENT
6.1 The Bonus in respect of any Financial Year shall be payable to
the Executive within fifteen business days following the date
on which the annual earnings of AHI for the period to which the
Bonus relates shall have been publicly announced.
6.2 If the Executive's employment hereunder shall terminate
(otherwise than by reason of the proper exercise by the Company
of its rights of termination under clause 11 in which case no
further Bonus shall be payable) during the currency of any
Financial Year the Executive shall not be entitled to receive
any Bonus in respect of that Financial Year, unless otherwise
decided by the Board in its absolute discretion.
7. DETERMINATION
The certificate of the auditors stating the amount of the Bonus shall,
in the absence of manifest error, be final and binding and in giving
such certificate the auditors shall act as experts and not as
arbitrators.
8. RELATIONSHIP TO OTHER BENEFITS
The Bonus will be:-
8.1 excluded from pensionable earnings for the purpose of any
relevant occupational pension and life assurance or permanent
health insurance scheme; but
8.2 (subject to the provisions of any relevant scheme) available
for the purpose of making additional voluntary contributions.
9. The Financial Year shall have the meaning ascribed to it in section 232
of the Companies Act 1985.
<PAGE>
SIGNED by )
a Director duly authorised )
for and on behalf of )
DSL GROUP LIMITED )
SIGNED by )
THE HON. RICHARD )
NICHOLAS BETHELL MBE )
for and on behalf of )
)
SIGNED by )
a Director duly authorised )
for and on behalf of )
ARMOR HOLDINGS, INC. )
<PAGE>
Dated 16 April 1997
---------
(1) DSL GROUP LIMITED
- and -
(2) MARTIN BRAYSHAW
- and -
(3) ARMOR HOLDINGS, INC.
------------------------------------------
SERVICE AGREEMENT
------------------------------------------
ASHURST MORRIS CRISP
Broadwalk House
5 Appold Street
London EC2A 2HA
Tel: 0171-638-1111
Fax: 0171-972-7990
<PAGE>
AN AGREEMENT made on 16 April 1997
BETWEEN:-
(1) DSL GROUP LIMITED (registered number 3206563) whose registered
office is at Egginton House, 36 Buckingham Gate, London SW1E 6PB
(the "COMPANY");
(2) MARTIN BRAYSHAW Redhall, 87 Main Street, Lyddington Street, Near
Uppingham, Rutland LE15 9LS (the "EXECUTIVE"); and
(3) ARMOR HOLDINGS, INC., whose principal place of business is at 13386
International Parkway, Jacksonville, Florida 32218 USA ("AHI").
IT IS AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement the following words and expressions shall have the
following meanings:-
"ACQUISITION AGREEMENT" means the agreement of today's date between,
inter alios, the executive and AHI relating to the sale and purchase
of shares in the Company;
"THE ACT" means Employment Protection (Consolidation) Act 1978;
"BOARD" means the board of directors of the Company from time to time;
"CHAIRMAN" means the Chairman of the Board from time to time;
"EFFECTIVE DATE" means the date of this Agreement;
"GROUP COMPANY" means any company which from time to time is:-
(a) a subsidiary undertaking of the Company;
(b) a holding company of the Company;
(c) a subsidiary undertaking of any such holding
company; or
(d) an associated company being any company in which the
Company or any Group Company has a shareholding of
25% or more or any company which has a shareholding
of 25% or more in the Company or any Group Company;
"subsidiary" and "holding company" have the meanings attributed to
them by section 736 of the Companies Act 1985;
<PAGE>
"PENSION SCHEME" means Sun Life Personal Pension Plan Policy Number
9749056;
"TERM" means the period of the Executive's employment hereunder;
"TERMINATION DATE" means (other than for the purposes of Schedule 2
to this Agreement) the date on which the employment of the Executive
under this Agreement shall terminate for whatever reason, and
derivative expressions shall be construed accordingly.
1.2 Words and phrases which are not defined in this Agreement but which
are defined in the Act, the Companies Act 1985, or the Insolvency
Act 1986 shall be construed as having those meanings.
1.3 References to any statute or any statutory provision shall be
construed as references to the statute or statutory provision as in
force at the date of this Agreement and as subsequently re-enacted
or consolidated and shall include references to any statute or any
statutory provision of which it is a re-enactment or consolidation.
1.4 Unless the context otherwise requires references in this Agreement
to the masculine gender shall, where appropriate, be deemed to
include the feminine and vice versa.
1.5 The Schedules to this Agreement are an integral part of this
Agreement and references to this Agreement include reference
thereto.
2. APPOINTMENT AND TERM
2.1 The Company shall employ the Executive and the Executive shall serve
the Company on the terms set out in this Agreement.
2.2 The Executive's employment under this Agreement shall commence on
the Effective Date and continue (subject to the provisions of this
Agreement) until terminated by either party giving to the other not
less than 12 months' previous notice in writing.
2.3 For the purposes of the Act the Executive's previous consultancy
with Defence Systems Limited count as part of the Executive's
continuous employment with the Company. The Executive's continuous
employment accordingly began on 8 August 1996.
2.4 The Executive represents to the Company that he is entitled to enter
into this Agreement and to implement and carry out its terms and
that by so doing he shall not be in breach of any obligation
(contractual or otherwise) to any third party which would entitle
that third party to damages or any other remedy at law.
3. DUTIES
3.1 The Executive shall perform the duties and exercise the powers which
from time to time may be assigned to him or vested in him by the
Board and shall devote the whole of his time, ability and attention
to his duties under this Agreement during normal office hours
<PAGE>
and such other times as may be reasonably required for the proper
performance of his duties and he shall use his utmost endeavours to
promote the interests of the Company and any Group Company and shall
not knowingly do or willingly permit to be done anything to the
prejudice, loss or injury of the Company or any Group Company and
shall carry out such duties in a competent manner. The Executive
shall not be entitled to any additional remuneration for work
performed outside normal office hours.
3.2 The Board shall be entitled at any time to require the Executive to
perform services not only for the Company but also for any Group
Company including, if so required, acting as a director of any Group
Company.
3.3 The Executive shall at all times keep the Board promptly and fully
informed (in writing if so requested) of his conduct of the business
or affairs of the Company and any Group Company and provide such
explanations of his conduct as the Board may require.
3.4 Notwithstanding the provisions of clause 3.1, the Company may at any
time following the giving of notice by either party to terminate
this Agreement and for such period as it may specify not exceeding
the length of notice given cease to provide work for the Executive
in which event, during such period the other provisions of this
Agreement including those relating to the Executive's remuneration
shall continue to have full force and effect but the Executive shall
not be entitled to access to any premises of the Company or any
Group Company.
3.5 Subject always to clause 4, during the Term the Executive shall not
without the prior written consent of the Board engage in any
activities, public office or other occupation outside his employment
which may detract from the proper and timely performance of his
duties under this Agreement.
3.6 The Executive's principal place of work shall be at the principal
place of business of the Company in the United Kingdom or such other
location in the United Kingdom as may be required by the Company
from time to time and he shall undertake any travel as may be
necessary for the proper performance of his duties as the Board may
from time to time require.
4. CONFLICTS OF INTEREST AND DEALINGS IN SECURITIES
4.1 During the Term the Executive shall not whether alone or jointly
with or on behalf of any other person, firm or company and whether
as principal, partner, manager, employee, contractor, director,
consultant, investor or otherwise (except as a representative or
nominee of the Company or any Group Company or otherwise with the
prior consent in writing of the Board) be engaged, concerned or
interested in any other business which:-
4.1.1 is wholly or partly in competition with any business carried
on by the Company or any Group Company; or
<PAGE>
4.1.2 as regards any goods or services is a supplier to or
customer of the Company or any Group Company, provided that
the Executive may hold (directly or through nominees) by
way of bona fide personal investment any units of any
authorised unit trust and up to five per cent of the issued
shares, debentures or other securities of any class of any
company whose shares are listed on a recognised investment
exchange within the meaning of the Financial Services Act
1986 or dealt in the Alternative Investment Market.
4.2 The Executive acknowledges that he shall not enter into any
transaction which contravenes the insider dealing provisions
contained in Part V of the Criminal Justice Act 1993.
4.3 The Executive undertakes at all times to comply with the share
dealing rules adopted from time to time by the Company.
5. SALARY AND BONUS
5.1 Subject to clause 5.2 the Executive shall receive a fixed annual
salary of (pound)116,424 which shall accrue from day to day and be
payable by equal monthly instalments in arrear on the last working
day of each calendar month or such salary (which may not be lower)
as may be agreed and confirmed to the Executive in writing by the
Board in its sole discretion from time to time.
5.2 For the year ending 31 December 1997 if the Company does not achieve
75 per cent of the operating profit forecasted in the annual budget
approved by the Board and the Board of Directors of AHI, the
Executive shall receive, for the year ended 31 December 1998, a
fixed annual salary of (pound)100,000 PROVIDED THAT if in the year
ending 31 December 1998 the Company achieves 100 per cent of the
operating profit forecasted in the annual budget for such year then
the fixed annual salary of the Executive shall be increased to
(pound)116,424 in respect of the year ending 31 December 1999 plus
any further increase which the Board and the Board of Directors of
AHI may approve.
5.3 In addition to the Executive's fixed annual salary, he shall receive
an annual bonus in respect of each financial year of the Company
calculated on the basis and in accordance with the definitions set
out in Schedule 3. The Board reserves the right to amend the terms
of the bonus calculation at any time.
5.4 The Executive shall not be entitled to any fees in respect of any
directorship of the Company or any Group Company and to give effect
to this clause the Executive shall forthwith pay to the Company or
procure that the Company is paid all such fees received.
5.5 Payment of such salary and such bonuses (if any) to the Executive
shall be made either by the Company or by another company in the
Group and, if by more than one company, in such proportion as the
Board may from time to time think fit.
<PAGE>
5.6 In addition there shall be refunded to the Executive such sums as
shall cover all reasonable out of pocket expenses incurred by him on
the Group's business (including hotel expenses and expenses of
subsistence and travelling), which said expenses shall be evidenced
in such manner as the Company may require.
6. CREDIT CARD
If the Company shall make any credit card available to the
Executive, the Executive shall:-
6.1 take good care of such card and forthwith report any loss of such
card to the Board;
6.2 use the card only for the purposes of the Group's business; and
6.3 return the card forthwith to the Company on request.
7. PENSION AND OTHER BENEFITS
7.1 The Company shall throughout the employment of the Executive
hereunder unless otherwise requested by the Executive contribute to
the Pension Scheme an amount equal to 15 per cent per annum of the
fixed annual salary of the Executive such amount to be payable in
monthly installments.
7.2 During the Term, the Company shall pay in respect of the Executive,
his spouse and dependent children up to the age of 18 years of age
premiums to a private medical insurance scheme in accordance with
the information describing the Company's medical insurance
arrangements which has already been supplied to the Executive.
7.3 During the Term the Executive shall participate at the Company's
expense in such life and personal accident/injury insurance schemes
as the Company shall from time to time maintain for the benefit of
senior executives.
7.4 Any benefits available under clauses 7.2 and 7.3 above are subject
to the rules of the relevant scheme from time to time in force.
8. HOLIDAYS
8.1 The Executive shall be entitled (in addition to the usual public and
Bank holidays in England and Wales) to 30 days' holiday on full pay
in every calendar year to be taken at such reasonable time or times
as the Board shall approve. Any holiday not so used in a calendar
year may not be carried forward without the approval of the Board.
8.2 For the calendar year in which the Executive's employment commences
the Executive shall be entitled to his annual holiday entitlement
calculated on the basis of 2 days' holiday for each completed
calendar month of service in the then current calendar year. Upon
termination of the Executive's employment the Executive shall either
be entitled to salary in lieu of any outstanding holiday entitlement
(calculated on the basis aforesaid)
<PAGE>
or be required to repay to the Company any salary received in respect
of holiday taken in excess of his holiday entitlement such salary to
be calculated on the basis of 1/227 of the fixed annual salary
payable to the Executive pursuant to clause 5.1 for each day of
outstanding or excess holiday entitlement as appropriate.
8.3 If this Agreement is terminated under clause 11.4, the Executive
will not be entitled to any payment in lieu of holiday not taken at
the Termination Date.
9. ILLNESS OR ACCIDENT
9.1 The Executive shall from time to time at the request and expense of
the Company submit to medical examinations and tests by a medical
practitioner nominated by the Company, the results of which shall,
subject to the provisions of the Access to Medical Reports Act 1988
(as applicable), be disclosed to the Company.
9.2 If the Executive is absent from his duties as a result of sickness
or injury for a period of seven days or more he will at the request
of the Company produce medical certificates to the Company in
respect of this absence.
9.3 If the Executive shall be absent for up to a maximum of 130 working
days in any rolling period of twelve months owing to accident or
illness so that he is unable properly to perform his duties he shall
continue to be entitled to his full salary excluding any bonus or
commission during any period of absence up to a maximum of 130
working days in any rolling period of 12 months provided that if at
any time during such a period of absence referred to above the
Executive becomes eligible to receive benefits under a permanent
health insurance policy in respect of which the Company or any Group
Company has paid premiums on behalf of the Executive or under any
Social Security legislation the Company shall be entitled to set off
or deduct the amount of any such benefits from the salary payable to
the Executive under this clause. During any such period of absence,
the Company shall be entitled at any time to appoint a further
executive director or employee to perform the Executive's duties and
to exercise his powers.
9.4 The Company shall pay the Executive all sums payable by way of
statutory sick pay in accordance with the legislation in force at
the time of absence and any remuneration paid shall be deemed to be
inclusive of statutory sick pay.
9.5 If the Executive's absence shall be or appear to be occasioned by
actionable negligence of a third party in respect of which damages
are or may be recoverable, then all sums paid by the Company shall
constitute loans to the Executive, who shall:
9.5.1 forthwith notify the Company of the relevant circumstances
and of any claim, compromise, settlement or judgement made
or awarded in connection therewith;
9.5.2 give to the Company all such particulars of such matters
as the Company may reasonably require; and
<PAGE>
9.5.3 if the Executive recovers damages in respect of such
actionable negligence, refund to the Company such sum (not
exceeding the lesser of:
(a) the amount of damages recovered by him (less all
costs and expenses incurred by the Executive in
obtaining such damages) under such compromise
settlement or judgement; and
(b) the sums advances to him in respect of the period
of the incapacity) as the Company may determine.
10. EXPENSES
The Executive shall be entitled to be reimbursed all reasonable
out-of-pocket expenses (including hotel, travelling and
entertainment expenses but excluding any car parking fines or road
traffic offence fines) which he may from time to time be authorised
to incur in the proper performance of his duties, subject to the
production of such receipts or other evidence as the Company may
reasonably require.
11. TERMINATION
11.1 The Company shall at all times be entitled to terminate the
Agreement pursuant to clause 2.2.
11.2 The Company may, at its sole and absolute discretion, terminate the
Executive's employment forthwith at any time by serving a notice
under this clause stating that the Agreement is being determined in
accordance with this clause 11.2 and undertaking to pay to the
Executive within 14 days salary in lieu of any required period of
notice or unexpired part thereof (subject to tax and National
Insurance) together with any accrued holiday entitlement pursuant to
clause 8.2. For the avoidance of doubt, where the Company terminates
the Agreement in accordance with this clause the terms of, inter
alia, clause 12 and Schedule 2 shall remain in full force and effect.
11.3 Where the Company terminates this Agreement otherwise than in
accordance with clause 2.2 or 11.2 (subject always to clause 11.4),
any damages to which the Executive may be entitled shall be
calculated in accordance with ordinary common law principles
including those relating to mitigation of loss.
11.4 Notwithstanding the provisions of clauses 11.1 and 11.2, the Company
shall be entitled, by notifying the Executive in writing, to
terminate this Agreement and the Executive's employment forthwith
without any payment by way of compensation, damages or otherwise if
the Executive shall:-
11.4.1 commit any act of serious misconduct;
11.4.2 commit any material or persistent breach of any of the terms
or conditions of this Agreement including any wilful neglect
or refusal to carry out any of his duties or to comply with
any instruction given to him by the Board Provided that if
any
<PAGE>
such breach of the terms and conditions of this
Agreement, or any such neglect or refusal, is capable of
remedy then this subclause shall have effect only if
written notice of that breach is served by the Company on
the Executive specifying that it is served under this
subclause and the Executive shall have failed to remedy
such a breach within 14 days of the service of such notice;
11.4.3 have a bankruptcy order made against him or shall compound
with or enter into any voluntary arrangements with his
creditors;
11.4.4 be charged with or convicted of any criminal offence (other
than an offence under the Road Traffic Acts for which a
penalty of imprisonment cannot be imposed);
11.4.5 be disqualified from holding office in the Company or any
other company under the Insolvency Act 1986 or the Company
Directors Disqualification Act 1986 or be disqualified or
disbarred from membership of, or be subject to any serious
disciplinary sanction by, any professional or other body,
which undermines the confidence of the Board in the
Executive's continued employment with the Company;
11.4.6 act in any way which may in the reasonable opinion of the
Board bring the Company or any Group Company into disrepute
or discredit;
11.4.7 in his capacity as a director of the Company resign or be
removed, except where this has been required by the Company
pursuant to clause 11.5.1;
11.4.8 transfer or charge or purport to transfer or charge (other
than as permitted by clause 18) any shares in AHI held by
him without the prior written consent (in the case of
charging, such consent not to be unreasonably withheld) of
the Board of Directors of AHI prior to the third anniversary
of the date hereof; or
11.4.9 take any steps to have the shares of common stock of AHI
issued or to be issued to him registered pursuant to the
Registration Rights Agreement entered into between the
Executive and Armor Holdings Inc on the date hereof (other
than in exercise of the Piggy Back Rights as defined and
set out therein) without the prior written consent of the
Board of AHI
in which event, for the purposes of this Agreement, the Termination
Date shall be the date of the written notice terminating the
Executive's employment.
11.5 The Executive shall resign from the Board and the boards of any
Group Company of which he is director:-
11.5.1 if at any time during the Term the Executive is prevented
from performing his duties whether through sickness or
because the Company has exercised its rights under clause
3.4 or otherwise howsoever and the Company requires the
Executive to resign; and in any event
<PAGE>
11.5.2 on the Termination Date,
and the Executive shall at the time of signing this Agreement
appoint the Company as his attorney by executing a power of attorney
in the form set out in Schedule 1 to do and sign in his name and on
his behalf any things and documents as may be required under the
constitution of each company to make his resignation effective
(including the transfer (without payment) to the Company or as the
Company may direct may qualifying shares provided by it).
11.6 The proper exercise by the Company of its right of termination under
clause 11.4 shall be without prejudice to any other rights or
remedies which the Company or any Group Company may have or be
entitled to exercise against the Executive.
11.7 If the employment of the Executive under this Agreement shall be
terminated for the purpose of reconstruction or amalgamation only
whether by reason of the liquidation of the Company or otherwise and
he shall be offered employment with any concern or undertaking
resulting from this reconstruction or amalgamation on terms and
conditions no less favourable than the terms of this Agreement then
the Executive shall have no claim against the Company in respect of
the termination of his employment hereunder.
11.8 The Executive shall not at any time during any period when he is
required to cease the performance of his duties under clause 3.4 or
after the Termination Date make any public statements in relation to
the Company or any Group Company or any of their officers or
employees. The Executive shall not after the Termination Date
represent himself as being employed by or connected with the Company
or any Group Company.
11.9 All credit, charge and expense cards, motor cars, car keys and all
books, papers, drawings, designs, documents, records and computer
software kept or made by or in the possession or control of the
Executive relating to the businesses of the Company and any Group
Company and all other property of the Company and any Group Company
are and remain the property of the Company or such Group Company and
the Executive shall deliver all such items in his possession custody
or control at the Termination Date immediately to the Company.
11.10 If the Executive is entitled to receive any payment in respect of or
attributable to compensation or damages for termination of his
employment hereunder or in lieu of notice such sum shall be payable
in maximum instalments equal to the last monthly fixed salary of the
Executive prior to such termination and the Executive hereby waives
any right to such payment after such termination after he shall have
accepted employment or consultancy with any other person to the
extent that the Executive becomes entitled to receive any
remuneration or any person with whom the Executive is connected
becomes entitled to receive any amount in respect of or referrable
to the provision of services by the Executive to any other person.
11.11 Any right of the Executive to participate in any Option Pool
established by AHI shall be allocated no value in determining any
rights of such Executive to compensation or damages for loss of
office.
<PAGE>
12. CONFIDENTIALITY
12.1 The Executive acknowledges that during the Term he shall in the
performance of his duties become aware of trade secrets and other
confidential information relating to the Company, the Group
Companies, their businesses and its or their clients or customers
and their businesses.
12.2 Without prejudice to his general duties at common law in relation to
such trade secrets and other confidential information, the Executive
shall not during the Term or at any time after the Termination Date
disclose or communicate to any person or persons or make use (other
than in the proper performance of his duties under this Agreement)
and shall use his best endeavours to prevent any disclosure,
communication or use by any other person, of any such trade secrets
or confidential information.
12.3 Since the Executive in the course of his employment or by reason of
services rendered for or offices held in any other company may
obtain knowledge of the trade secrets or other confidential
information or such company, the Executive hereby undertakes that he
will at the request and cost of the Company enter into a direct
agreement or undertaking with such other company whereby he will
accept restrictions corresponding to the restrictions herein
contained (or such of them as may be appropriate in the
circumstances) in relation to such products and services and such
area and for such period as such company may reasonably require for
the protection of its legitimate interests.
12.4 The provisions of this clause shall cease to apply to information or
knowledge which comes into the public domain otherwise than by
reason of the default of the Executive.
12.5 For the purposes of clause 12 confidential information shall
include, but not be limited to, all and any information (whether or
not recorded in documentary form or on computer disk or tape) which
relates to:
12.5.1 the business methods, corporate plans, management systems,
finances, maturing new business opportunities or research
and development projects of the Company;
12.5.2 suppliers, their identities and prices;
12.5.3 customers, their identity, needs and requirements;
12.5.4 marketing or sales of any past, present or future product
or service of the Company including without limitation
sales targets and statistics, market share and pricing
statistics, market surveys and plans, market research
reports, sales techniques, price lists, discount structures
and advertising and promotional material;
12.5.5 trade secrets, technical specifications and other technical
information relating to the businesses of the Company; and
<PAGE>
12.5.6 all information material to any dispute or litigation
involving the Company.
13. PROTECTION OF BUSINESS INTERESTS
The Executive shall be bound by the provisions of Schedule 2.
14. DISCIPLINARY AND GRIEVANCE PROCEDURE
14.1 Any disciplinary matters affecting the Executive will be dealt with
by the Chairman. There are no specific disciplinary rules affecting
the Executive. Should the Executive wish to appeal against any
disciplinary decision he should submit his appeal in writing to the
Board whose decision on such appeal shall be final.
14.2 If the Executive wishes to seek redress for any grievance relating
to his employment he should first discuss the matter with the
Chairman. If the matter is not then settled he should submit his
grievance to the Board in writing whose decision on such grievance
shall be final.
14.3 In order to investigate a complaint against the Executive, the
Company reserves the right to suspend the Executive on full pay and
to exclude the Executive from any premises of the Company and any
Group Company for so long as it deems necessary to carry out a
proper investigation and to hold any appropriate disciplinary
hearings.
15. NOTICES
Any notice to be given under this Agreement shall be in writing.
Notices may be served by either party by personal service or by
recorded delivery or by first class post addressed to the other
party or by leaving such notice at (in the case of the Company) its
registered office for the time being and (in the case of the
Executive) his last known address and any notice given shall be
deemed to have been served at the time at which the notice was
personally served or if sent by recorded delivery at the time of
delivery as recorded or if sent by first class post on the second
working day after posting or in the case of being left as
appropriate at the registered office or last known address, the date
on which it was so left.
16. DEDUCTIONS
For the purposes of the Wages Act 1986 and otherwise the Executive
consents to the deduction from his wages of any sums owing by him to
the Company at any time and he also agrees to make any payment to
the Company of any sums owing by him to the Company upon demand by
the Company at any time. This clause is without prejudice to the
rights of the Company to recover any sums or balance of sums owing
by the Executive to the Company by legal proceedings.
<PAGE>
17. GENERAL
17.1 The information in this Agreement constitutes a written statement of
the terms of employment of the Executive In accordance with the
provisions of the Act.
17.2 This Agreement (including its Schedules) constitute the entire and
only legally binding agreement between the parties relating to the
employment of the Executive by the Company or any Group Company and
replaces any previous employment agreements or arrangements. No
variation to this Agreement shall be effective unless made in
writing signed by or on behalf of the parties and expressed to be
such a variation.
17.3 No failure or delay by the Company in exercising any remedy, right,
power or privilege under or in relation to this Agreement shall
operate as a waiver of the same nor shall any single or partial
exercise of any remedy, right, power or privilege preclude any
further exercise of the same or exercise of any other remedy, right,
power or privilege.
17.4 No waiver by the Company of any of the requirements of this
Agreement or of any of its rights under this Agreement shall have
effect unless given in writing and signed by the Board. No waiver
of any particular breach of the provisions of this Agreement shall
operate as a waiver of any repetition of that breach.
17.5 If any provision of this Agreement shall be, or become, void or
unenforceable for any reason within any jurisdiction, this shall
affect neither the validity of that provision within any other
jurisdiction nor any of the remaining provisions of this Agreement.
17.6 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of
England.
17.7 In the event of any claim, dispute or difference arising out of or
in connection with this Agreement the parties hereto irrevocably
agree and submit to the non-exclusive jurisdiction of the Courts of
England.
18. TRANSFER OF SHARES IN AHI
18.1 The Executive shall be permitted to transfer the shares in AHI held
by him to AHI, or as it may direct, if such transfer is in whole or
part satisfaction of a liability of the Executive under the
Warranties in the Acquisition Agreement.
18.2 AHI agrees to accept the surrender to AHI (or as it directs) of any
shares in AHI which the Executive wishes to surrender in order to
satisfy in whole or part a liability in respect of breach of
Warranty under the Acquisition Agreement and agrees that the
liability of the Executive in respect of such breach shall be
treated as discharged to the extent of the market value on the date
of surrender of the AHI shares surrendered.
18.3 A transfer of shares in AHI by the Executive shall permitted for the
purpose of Clause 11.4.9:
<PAGE>
18.3.1 if made within 12 months after the date hereof, only if the
number of such shares transferred by the Executive does not
in aggregate exceed N calculated as follows:
N = (JS - 10)% x E
18.3.2 if made on or after 12 months after but prior to the third
anniversary hereof, only if the number of such shares
transferred by the Executive does not in aggregate exceed N
calculated as follows:
N = (JSWK)% x E
where:
JS = the percentage of the holding of shares in AHI
held by Jonathan Spiller transferred by him (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
JSWK = the percentage of the aggregate of the holdings of
shares in AHI held by Jonathan Spiller and Warren
Kanders in aggregate transferred by them (while
remaining employed by AHI) after the date hereof but
prior to the date of the transfer by the Executive;
E = the number of shares in AHI held by the Executive
immediately prior to the date of the transfer by the
Executive; or
18.3.3 if made on or after the second but before the third
anniversary of the date hereof and such transfer would not
result in the aggregate nominal value of all transfers of
such shares by the Executive exceeding 25 per cent in
nominal value of his holding of such shares on the date
immediately following the date hereof .
19. GUARANTEE
19.1 AHI hereby unconditionally guarantees and undertakes to the
Executive that the Company will duly and punctually observe all the
obligations under this Agreement to the extent that if the Company
shall fail for whatever reason to perform such obligations AHI shall
be liable to perform the same in all respects as if AHI were the
party principally bound thereby in place of the Company.
19.2 This Guarantee shall constitute a direct primary and unconditional
liability on AHI and shall not be affected by any time or indulgence
granted to the Company by the Executive or by any act, omission,
deed or matter of whatever description whereby AHI as surety only
would or might have been released PROVIDED THAT AHI shall have the
same rights and defences as against the Executive as are or would be
enjoyed by the Company.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives.
<PAGE>
SCHEDULE 1
POWER OF ATTORNEY
By this Power of Attorney made on 1997, I, MARTIN BRAYSHAW Redhall,
87 Main Street, Lyddington Street, Near Uppingham, Rutland LE15 9LS in
accordance with the terms of the service agreement ("the Service Agreement"
of even date between myself and DSL Group Limited ("the Company") HEREBY
APPOINT any director of Armor Holdings, Inc. ("AHI") to act as my attorney
with authority in my name and on my behalf (so that words and expressions
defined in the Service Agreement shall have the same meanings herein):-
(a) on or after the Termination Date to do any things and sign any
documents as may be required under the constitution of the Company
and each Group Company to make my resignation as a director from
those companies effective;
(b) to sign or execute any and all agreements, instruments, deeds or
other papers and to do all such things in my name as may be
necessary or desirable to implement my obligations in connection
with clause 11.5 of the Agreement;
(c) within 2 days of the Company having requested my resignation
pursuant to clause 11.5.1 to do any thing and sign any documents to
make my resignation as a director from those Companies effective;
(d) on or after the Termination Date to sign or execute any and all
instruments, deeds or other papers and to do all such things in my
name as may be necessary or desirable to implement a transfer of all
my shares in AHI or any subsidiary thereof which I may hold as a
bare nominee; and
(e) to appoint any substitute and to delegate to that substitute all or
any powers conferred by this Power of Attorney.
I declare that this Power of Attorney, having been given by me to secure my
obligations in connection with clause 11.5 of the Service Agreement, shall be
irrevocable in accordance with section 4 of the Powers of Attorney Act 1971.
IN WITNESS whereof this Power of Attorney has been duly executed.
EXECUTED as a DEED and
DELIVERED
in the presence of:-
Witness name:
Address:
Occupation:
<PAGE>
SCHEDULE 2
PROTECTION OF BUSINESS INTERESTS
For the avoidance of doubt, the provisions of this Schedule shall not apply if
this Agreement is terminated by the Company in breach of its terms.
In this Schedule the following words and expressions shall have the following
meanings:-
"Business" the business or businesses of the Company
or any Group Company in or with which the
Executive has been involved or concerned
namely the business of the marketing,
development, design or provision of
security or security related services at
any time during the period of twelve months
prior to the Termination Date;
"directly or indirectly" the Executive acting either alone or
jointly with or on behalf of any other
person, firm or company, whether as
principal, partner, manager, employee,
contractor, director, consultant, investor
or otherwise;
"Group Company" AHI, each subsidiary and subsidiary
undertaking thereof (either direct or
indirect) and any other entity in which any
Group Company holds an interest;
"Key Personnel"
any person who is at the Termination Date
or was at any time during the period of
twelve months prior to the Termination
Date employed or engaged as a consultant
in the Business in an executive, senior
managerial or sales capacity and with
whom the Executive has had dealings other
than in a de minimis way during the course
of his employment under this Agreement;
"Prospective Customer" any person firm or company who
has been engaged in negotiations at any
time during the twenty-four months prior to
the Termination Date, with which the
Executive has been personally involved,
with the Company or any Group Company with
a view to purchasing Relevant Services from
the Company or any Group Company;
"Relevant Area" United Kingdom, the African Continent, the
Asian Continent, the Former Yugoslavia, the
Former Soviet Union, the United States of
America and the South American Continent;
"Relevant Customer" any person firm or company who at
any time during the twenty-four months
prior to the Termination Date was a
customer of the Company or any Group
Company, with whom or which the Executive
directly dealt other than in a de minimus
way or for whom or which the Executive was
responsible on behalf of the
<PAGE>
Company or any Group Company at any time
during the said period (or the Term if
shorter);
"Relevant Period" the period of 12 months from the
Termination Date less any period during
which the Executive has not been provided
with work pursuant to clause 3.4 of this
Agreement;
"Relevant Services" any services competitive with
those supplied by any Company or Group
Company at any tine during the twelve
months prior to the Termination Date in the
supply of which the Executive was directly
involved or concerned at any time during
the said period;
"Relevant Supplier" any person firm or company who at any time
during the twelve months prior to the
Termination Date was a supplier of any
goods or services (other than utilities and
goods or services supplied for
administrative purposes) to the Company or
any Group Company and with whom or which the
Executive had personal dealings during the
course of his employment under this
Agreement other than in a de minimus way;
and
"Termination Date" the date on which the employment of the
Executive under this Agreement shall
terminate.
1. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time during the Relevant Period:-
1.1 solicit away from the Company or any Group Company; or
1.2 endeavour to solicit away from the Company or any Group Company; or
1.3 employ or engage; or
1.4 endeavour to employ or engage,
any Key Personnel.
2. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time within the Relevant Period:-
2.1 (a) solicit the custom of; or
(b) deal with,
any Relevant Customer or Prospective Customer in respect of any
Relevant Services; or
2.2 (a) interfere; or
<PAGE>
(b) endeavour to interfere,
with the continuance of supplies to the Company and/or any Group
Company (or the terms relating to those supplies) by any Relevant
Supplier.
3. The Executive shall not without the prior written consent of the
Board directly or indirectly at any time within the Relevant Period
engage or be concerned employed or interested in any business within
the Relevant Area which (a) competes or (b) will at any time during the
period of six months from the Termination Date compete with the
Business provided that the Executive may hold (directly or through
nominees) by way of bona fide personal investment any units of any
authorised unit trust and up to five per cent. of the issued shares,
debentures or securities of any class of any company whose shares are
listed on a recognised investment exchange within the meaning of the
Financial Services Act 1986 or dealt in the Alternative Investment
Market.
4.1 The Executive acknowledges (having taken appropriate legal advice) that
the provisions of this Schedule are fair and reasonable and necessary
to protect the goodwill and interests of the Company and the Group
Companies and shall constitute separate and severable undertakings
given for the benefit of the Company and each Group Company and may be
enforced by the Company on behalf of any of them.
4.2 If any of the restrictions or obligations contained in this Schedule is
held not to be valid on the basis that it exceeds what is reasonable
for the protection of the goodwill and interests of the Company and the
Group Companies but would be valid if part of the wording were deleted
then such restriction or obligation shall apply with such deletions as
may be necessary to make it enforceable.
4.3 The Executive acknowledges and agrees that he shall be obliged to draw
the provisions of this Schedule to the attention of any third party who
may at any time before or after the termination of the Executive's
employment hereunder, offer to engage the Executive in any capacity and
for whom or with whom the Executive intends to work.
<PAGE>
SCHEDULE 3
BONUS
The annual bonus to which the Executive shall be entitled in accordance with
clause 5.3 ("the Bonus") shall be calculated as follows:-
1. The Bonus shall be a sum equal to the fixed annual salary (as
aforesaid) multiplied by the Bonus Factor, but shall in no
circumstances be a negative figure.
2. The Bonus shall not exceed a sum equal to 25 per cent. of the fixed
annual salary of the Executive payable under clause 5.1 in respect of
each completed Financial Year of the Company.
3. The Bonus in respect of the Financial Year of the Company in which the
Executive's employment hereunder commences shall bear the same
proportion to the Bonus as would have been payable had the Executive
been employed throughout the Financial Year as the period from the
commencement of his employment to the end of such Financial Year bears
to the whole of such Financial Year.
4. The Bonus Factor for the purposes of this schedule shall be calculated
in accordance with the following formula:-
0.83 x (P - 90)
---------------
100
Where:
P shall be whichever is the lesser of 120 or is the
percentage of Budgeted Profit actually achieved as
evidenced by the audited accounts for the relevant
Financial Year;
Budgeted Profit means the earnings before interest and tax (taking full
account of exceptional items but taking no account of
extraordinary items) budgeted for by the Company and
approved by the board of AHI for the relevant Financial
Year (or for the period from the date of incorporation
of the Company to 31 December 1996) as evidenced by the
annual budget agreed by the Board and approved by the
board of AHI.
5. CERTIFICATION
The Company shall as soon as possible after the audit of the relevant
accounts for each Financial Year has been completed procure that the
auditors deliver to the Executive a certificate stating the amount of
the gross profits of the Company for that period and the Bonus for that
period.
<PAGE>
7. PAYMENT
6.1 The Bonus in respect of any Financial Year shall be payable to
the Executive within fifteen business days following the date
on which the annual earnings of AHI for the period to which the
Bonus relates shall have been publicly announced.
6.2 If the Executive's employment hereunder shall terminate
(otherwise than by reason of the proper exercise by the Company
of its rights of termination under clause 11 in which case no
further Bonus shall be payable) during the currency of any
Financial Year the Executive shall not be entitled to receive
any Bonus in respect of that Financial Year, unless otherwise
decided by the Board in its absolute discretion.
7. DETERMINATION
The certificate of the auditors stating the amount of the Bonus shall,
in the absence of manifest error, be final and binding and in giving
such certificate the auditors shall act as experts and not as
arbitrators.
8. RELATIONSHIP TO OTHER BENEFITS
The Bonus will be:-
8.1 excluded from pensionable earnings for the purpose of any
relevant occupational pension and life assurance or permanent
health insurance scheme; but
8.2 (subject to the provisions of any relevant scheme) available
for the purpose of making additional voluntary contributions.
9. The Financial Year shall have the meaning ascribed to it in section 232
of the Companies Act 1985.
<PAGE>
SIGNED by )
a Director duly authorised )
for and on behalf of )
DSL GROUP LIMITED )
SIGNED by )
MARTIN BRAYSHAW )
for and on behalf of )
)
SIGNED by )
a Director duly authorised )
for and on behalf of )
ARMOR HOLDINGS, INC. )
<PAGE>
CONSENT OF KANE KESSLER, P.C.
INCLUDED IN EXHIBIT 5.1
