**Exhibit 10.7**

EMPLOYMENT AGREEMENT 

This EMPLOYMENT AGREEMENT(including any amendments hereto as are in effect from time to time, this “Agreement”) is made as of the 21st day of June, 2007 by and betweenJames Anderson (“Executive”) and DHB Industries, Inc., a Delaware corporation (alone or together with all divisions, subsidiaries and groups, the “Company”). 

In consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and sufficiency of whichis acknowledged, the parties agree as follows: 

1. Agreement to Employ. The company hereby agrees to employ the Executive, andExecutive hereby agrees to be employed by the Company, pursuant to the terms and conditions set forth in this Agreement. Executive represents and agrees that (i) he is entering into this Agreement voluntarily and that his employment hereunderand compliance with the terms and conditions hereof will not conflict with or result in a breach by him of any agreement to which he is a party or by which he may be bound, (ii) he has not violated, and in connection with his employment by theCompany will not violate, any non-solicitation or similar covenant to which he is or may be bound, and (iii) in connection with his employment by the Company, he will not use any confidential or proprietary information he may have obtained inconnection with his employment by any previous employer. 

2. Term. TheCompany agrees to employ Executive, and Executive agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for the period commencing on the 21st day of June, 2007 (the “Effective Date”) and terminating on the third anniversary of the Effective Date, unless earlier terminated as provided in Section 7, provided that such initial term shall beextended automatically for successive one-year periods unless the company shall have provided notice to the Executive not less than 30 days prior to the expiration of the initial term or any such extension term of its intention not to extend theEmployment Period, as defined below. The period during which the Executive is employed pursuant to this Agreement shall be referred to herein as the “Employment Period.” 

3. Employment Duties. 

2.1 Title and Duties. During the Employment Period, Executive shall be employed in the business of the Company. Executive shall serve as Chief Financial Officer (CFO) of DHB Industries, Inc. and may also assume similar positions orother positions with subsidiaries and affiliates of DHB Industries, Inc. Executive shall devote substantially all of his working time and efforts to the performance of his duties under this Agreement, provided that Executive may also (i) serveon corporate or civic boards or committees, (ii) deliver lectures or presentations to professional and similar organizations and/or participate in continuing education activities, and (iii) manage his or his family’s personalinvestments, in each case so long as such activities do not substantially interfere with the performance of Executive’s responsibilities under this Agreement and do not conflict with any company rule or policy or present a conflict of interestwith the Company. Executive’s duties and responsibilities shall include those customarily assigned to the CFO of a public company and such other duties and responsibilities, including coordination of finance and accounting staff, as areconsistent with Executive’s title(s) and as the Chief Executive Officer may specify from time to time. 

2.2 Location/Travel. In performing his duties hereunder, Executive shall beavailable for reasonable travel, as the needs of the business of the Company may require. It is expected that Executive shall be based and shall perform his duties primarily at the Company’s Pompano Beach, Florida facility. 

2.3 Reporting. In carrying out his duties hereunder, Executive shall report to the Chief Executive Officer. 

3. Compensation/Benefits. In consideration of Executive’s services hereunder, the Company shall provide Executive the following: 

3.1 Base Salary. During the Employment Period, the Executive shall receive an annual rate of base salary not less than $325,000,which the Company shall pay at semi-monthly intervals, or otherwise at such intervals (not less frequently than monthly) as are used generally for the Company’s senior executives. The base salary shall be reviewed annually by the Company(through its Board or any Compensation Committee thereof) not later than June 30 of each calendar year after 2007 and may be increased (but not decreased) by such amount as the Company in its sole discretion shall determine. 

3.2 Bonuses. Commencing at the close of each fiscal year of the Company during the Employment Period, the Company shall review theperformance of the Company and of Executive during the prior fiscal year, and the Company may provide Executive with additional compensation as a bonus if the Board of Directors, or any Compensation Committee thereof, in its sole discretion,determines. 

3.3 Equity-Based Compensation. The Chief Executive Officer will recommend to the Compensation Committeeof the Board of Directors of the Company that the Employee be granted warrants or options to purchase 400,000 shares of common stock of the Company, pursuant to a separate award agreement in the form provided by the Company. Such grants are in thesole discretion of the Compensation Committee, are subject to availability under the Company’s applicable equity plan and will have a strike price not less than the closing price of the Company’s common stock on the date of grant.

3.4 Vacation. Executive shall be entitled to three (3) weeks of paid vacation for the first calendar year ofthis agreement and four (4) weeks during subsequent calendar years, provided that not more than 10 days accrued and unused vacation may be carried over into any subsequent year. 

3.5 Expenses. Executive shall be entitled to reimbursement of reasonable business expenses incurred in carrying out his duties forthe Company, provided that such expenses are evidenced by appropriate documentation and submitted in accordance with Company policies and procedures. 

3.6 Other Benefits. The Company shall provide to Executive such other benefits, including the right to participate in medical, savings, deferred compensation and other benefit plans and arrangements as are madegenerally available to other senior executives of the Company from time to time. 

 

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4. Indemnification. 

4.1 Indemnity. To the fullest extent permitted by law, the Company shall indemnify Executive with respect to any actions commencedagainst Executive in his capacity as an officer, director, executive, agent or fiduciary or former officer, director, executive, agent or fiduciary of the Company, or any affiliate thereof, for which Executive may render service in such capacity,whether by or on behalf of the Company, its shareholders or third parties, and the Company shall advance to Executive on a timely basis an amount equal to the reasonable fees and expenses incurred in defending such actions, after receipt of anitemized request for such advance, and an undertaking from Executive to repay the amount of such advance, with interest at a reasonable rate from the date of the request, as determined by the Company, if it shall ultimately be determined thatExecutive is not entitled (as a matter of law or by judicial determination) to be indemnified against such expenses. This indemnity shall survive any termination of employment under this Agreement and is in addition to and not in limitation of anyother right to indemnification or exoneration to which Executive is entitled at law, or under the governing organizational documents and/or policies of the Company. The Company agrees to use its best efforts to secure and maintain officers’ anddirectors’ liability insurance, including coverage for Executive. 

5. Covenants and Confidential Information. 

5.1 Restrictive Covenants. Executive acknowledges the Company’s reliance on and expectation of Executive’s continuedcommitment to performance of his duties and responsibilities during the Employment Period. In light of such reliance and expectation on the part of the Company, during the applicable period hereafter specified in Section 5.3, Executive shallnot, directly or indirectly, do or suffer either of the following: 

(a)(1) own, manage, control or participate in theownership, management or control of, or be employed or engaged by or otherwise affiliated or associated as an Executive, agent, representative, consultant, independent contractor or otherwise with, any other corporation, partnership, proprietorship,firm, association or other business entity engaged in the business of, or otherwise engage in the business of, manufacturing, selling or distributing body armor or body armor related products, and other products manufactured, sold or distributed bythe Company from time to time, within the United States in direct or indirect competition with the Company or any of its affiliates; 

(2) solicit any business or contracts from any customers of the Company or its affiliates, any past customers of the Company or its affiliates, or any prospective customers of the Company or its affiliates (i.e.,potential customers from which the Company or its affiliates has solicited business at any time during the twelve (12) month period preceding the expiration or termination of the Employment Period), except as necessitated by Executive’sposition with the Company and then only in furtherance of the business interests of the Company or its affiliates; 

(3)induce or attempt to induce any such customer to alter its business relationship with the Company or its affiliates except as necessitated by Executive’s position with the Company and then only in furtherance of the business interests of theCompany or its affiliates; 

 

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(4) solicit or induce or attempt to solicit or induce any executive or employee of theCompany or its affiliates to leave the employ of the Company or any of its affiliates for any reason whatsoever or hire any person who was an executive or employee of the Company or its affiliates within the twelve (12) month period prior tosuch hiring; or 

(5) directly or indirectly, engage in any conduct or make any statement, whether in commercial ornoncommercial speech, disparaging or criticizing in any way the Company or any of its affiliates, or any products or services offered by any of them, nor shall Executive engage in any other conduct or make any other statement that could bereasonably expected to impair the goodwill of any of the Company or any if its affiliates, the reputation of any products or services of the Company or any of its affiliates or the marketing of such products or services. 

(b) disclose, divulge, discuss, copy or otherwise use or suffer to be used in any manner, other than in accordance with Executive’sduties hereunder (and in a manner not in violation or conflict with applicable laws and regulations), any confidential or proprietary information relating to the Company’s or any of its affiliates’ businesses, prospects, finances,operations, pricing, products, research and development or properties or other trade secrets of the Company or any of its affiliates, it being acknowledged and agreed by Executive that all such information regarding the business of the Company orany of its affiliates compiled or obtained by, or furnished to, Executive while Executive shall have been employed by or associated with the Company is confidential and/or proprietary information and the Company’s exclusive property; provided,however, that the foregoing restrictions shall not apply to the extent that such information: (A) is clearly obtainable in the public domain; (B) becomes obtainable in the public domain, other than by reason of the breach by Executive ofthe terms hereof or breach by another person barred by a duty of confidentiality to the Company; or (C) is required to be disclosed by rule of law or by order of a court or governmental body or agency. 

5.2 Litigation; Cooperation. If this Agreement is terminated by the Company other than for Cause or by the Executive for GoodReason (as defined herein), the Executive agrees that, for up to 12 months following the date of termination, he will provide to the Company and its affiliates truthful and complete cooperation including, but not limited to, the Executive’sappearance at interviews and depositions at reasonable times in all regulatory or litigation matters and proceedings relating to the Company and its affiliates, and to provide to the Company’s legal counsel, upon request, all documents andmaterials in his possession or under his control relating to such matters and proceedings, all at no additional compensation to the Executive, provided that the company shall reimburse promptly the Executive for all reasonable expenses, includingattorney’s fees and other expenses, as well as pay to the Executive any amount of salary forfeited and including with respect to vacation time consumed by him during any time spent by Executive in connection with the foregoing. 

5.3 Applicable Periods. The applicable periods shall be: 

(a) so long as Executive is an Executive of the Company; and 

(b) for a period of twelve (12) months after termination of employment or the expiration of the Employment Period. 

 

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5.4 Injunctive Relief. Executive agrees and understands that the remedy at law forany breach by his of this Section 5 will be inadequate and that the damages flowing from such breach are not readily susceptible to being measured in monetary terms. Accordingly, it is acknowledged that the Company shall be entitled toimmediate injunctive relief and may obtain a temporary order restraining any threatened or further breach. Nothing in this Section 5 shall be deemed to limit the Company’s remedies at law or in equity for any breach by Executive of any ofthe provisions of this Section 5 which may be pursued or availed of by the Company. 

5.5 Acknowledgment byExecutive. Executive has carefully considered the nature and extent of the restrictions upon his and the rights and remedies conferred upon the Company under this Section 5, and hereby acknowledges and agrees that the same are reasonable intime and territory, do not stifle the inherent skill and experience of Executive, would not operate as a bar to Executive’s sole means of support, are fully required to protect the legitimate interests of the Company, and do not confer abenefit upon the Company disproportionate to the detriment of Executive. 

6. Proprietary Rights. 

6.1 Copyrights. At all times during the Employment Period, all right, title and interest in all copyrightable material whichExecutive shall conceive or originate, either individually or jointly with others, and which arise out of the performance of this Agreement, will be the property of the Company and are by this Agreement assigned to the Company along with ownershipof any and all copyrights in the copyrightable material. At all times during the Employment Period, Executive agrees to execute all papers and perform all other acts necessary to assist the Company to obtain and register copyrights on such materialsin any and all countries, and the Company agrees to pay expenses associated with such copyright registration. Works of authorship created by Executive for the Company in performing his responsibilities under this Agreement shall be considered“works made for hire” as defined in the U.S. Copyright Act. In addition, Executive hereby assignees to the Company all proprietary rights, including but not limited to, all patents, copyrights, trade secrets and trademarks Executive mightotherwise have, by operation of law or otherwise, in all inventions, discoveries, works, ideas, information, knowledge and data related to Executive’s access to confidential information of the Company during the Employment Period. 

6.2 Know-How and Trade Secret. All know-how and trade secret information conceived or originated by Executive which arises outof the performance of his obligations or responsibilities under this Agreement during the Employment Period or otherwise shall be the property of the Company, and all rights therein are by this Agreement assigned to the Company. 

6.3 Joint Ventures, etc. If, during the Employment Period, Executive is engaged in or associated with the planning or implementingof any project, program or venture involving the Company and a third party or parties, all rights in such project, program or venture shall belong to the Company. Except as formally approved by the Board of Directors of the Parent, Executive shallnot be entitled to any interest in such project, program or venture or to any commission, finder’s fee or other compensation in connection therewith other than the compensation to be paid to Executive as provided in this Agreement. 

 

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6.4 Return of Materials. Upon termination of the Employment Period, Executiveshall deliver promptly to the Company all records, manuals, books, documents, letters, memoranda, notes, notebooks, reports, data, tables, calculations, customer and prospective customer lists, and copies of all of the foregoing, which are theproperty of the Company, and all other property, trade secrets and confidential information of the Company, including, but not limited to, all documents which in whole or in part contain any trade secrets or confidential information of the Company,which in any of these cases are in his possession or under his control. 

7. Termination.

7.1 Death or Disability. This Agreement shall terminate automatically upon the Executive’s death or upon a determination bythe Board of Directors to terminate the Executive’s employment as a result of his disability during the Employment Period. For purposes of this Agreement, “disability” shall mean a physical or mental disability that prevents or can bereasonably expected to prevent the performance by the Executive of his duties hereunder for a continuous period of 90 days or longer in any 12-month period. Determination of disability shall be supported by the report of an independent physicianreasonably acceptable to the Company and Executive (or his representative), taking into account competent medical evidence, and otherwise shall be in accordance with the Americans with Disabilities Act and other applicable laws. 

7.2 Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period for Cause orwithout Cause. For purposes of this Agreement, “Cause” shall mean the Executive’s (i) engaging in fraudulent or dishonest conduct (as determined by a finding, order, judgment or decree in any court or administrative agency ofcompetent jurisdiction, in any action or proceeding whether civil, criminal, administrative or investigative) that the Board reasonably determines has or would have a material adverse impact on Company, its affiliates or their respective businesses;(ii) conviction of, or entering a plea of nolo contendere to, a felony criminal offense or comparable level of crime in any jurisdiction that uses a different nomenclature; (iii) willful refusal to perform his material employment-relatedduties or responsibilities or intentionally engaging in any activity that is in material conflict with or is materially adverse to the business interests of the Company, its affiliates or their respective businesses; (iv) gross negligence inthe performance of his material employment-related duties or responsibilities; (v) with respect to any actions, lawsuits, investigations, inquiries or similar proceedings (“Actions”) against or relating to the Company by anygovernmental, regulatory or self-regulatory agency or entity, or any Board approved Actions relating to the Company, Executive’s failure or refusal to cooperate with the Company or, at the Company’s request, with any governmental,regulatory or self-regulatory agency or entity, in providing information with respect to any act or omission in his capacity as an officer, director, executive, agent or fiduciary of the Company, or any affiliate thereof for which Executive hasrendered service in such capacity; or (vi) breach of any material provision of this Agreement (in the case of (iii), (iv), (v) and (vi) above, that is not cured by the Executive within 30 days following receipt by the Executive ofnotice from the Company setting forth in reasonable detail the circumstances giving rise to such Cause). A termination for Cause shall include a determination by the Board no later than 45 days following the termination of the Employment Period thatcircumstances existed during the Employment Period that would have justified a termination for Cause. A termination of the Executive by the Company shall not be a termination for Cause for purposes of this Agreement unless the determination to soterminate 

 

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the Executive’s employment is made by a resolution of the Board (excluding the Executive) following a meeting convened upon not less than 10 days noticeto the Executive and at which the Executive and his legal counsel, if any, shall have had a reasonable opportunity to be heard by the Board. 

7.3 Termination by the Executive. The Executive may terminate his employment with or without Good Reason. For purposes of this Agreement “Good Reason” means, without Executive’s written consent:(i) a material diminution of Executive’s duties and responsibilities, or the assignment of responsibilities that are materially inconsistent with his position and responsibilities hereunder; (ii) a reduction of the Executive’sbase salary, annual bonus or long-term compensation opportunity (it being understood that a reduction of the dollar amount of the Executive’s annual bonus from year to year solely as a result of achievement or failure to achieve targetperformance objectives shall not constitute a reduction in Executive’s bonus opportunity) or of the benefits made available to Executive as described herein; (iii) requiring Executive’s primary place of business to be located otherthan in south Florida (Broward, Dade or Palm Beach counties) or in the vicinity of Executive’s home residence address; (iv) a material breach by the Company of any other provision of this Agreement, in each case that is not cured by theCompany within 30 days after its receipt from the Executive of written notice setting forth in reasonable detail the circumstances giving rise to such Good Reason. 

7.4 Termination Procedures. Any termination of the Executive’s employment by the Company or by the Executive shall becommunicated to the other party by a notice of termination given in accordance with this Agreement. For purposes of this Agreement, a “notice of termination” means a written notice which (i) indicates the specific terminationprovision in this Agreement relied upon; (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination under such provision; (iii) subject to this paragraph,specifies the date of termination (as defined below). For purposes of this Agreement, “date of termination” means (a) if the Executive’s employment is terminated other than for Cause or by reason of death or disability, 90 daysfollowing the receipt of the notice of termination, and (b) if the Executive’s employment is terminated for Cause or by reason of death or disability, the date of death or the date of the Board’s determination of Cause or ofExecutive’s disability, in accordance with this Agreement, provided that the Company may elect to pay the Executive (at the rate of his base salary then in effect) in lieu of part or all of such notice period preceding the date of termination.

7.5 Effect of Termination. Effective as of any date of termination or, if earlier, as of any date specified by theCompany at or following the delivery of a notice of termination, the Executive shall resign, in writing, from all Board memberships and all other positions held by him with the Company and its affiliates. 

7.6 Obligations of the Company upon Termination. (a) *General*. If, during the Employment Period, the Executive’semployment terminates for any reason, the Executive (or his estate, beneficiary or legal representative) shall be entitled to receive (i) any earned or accrued but unpaid base salary through the date of termination (including with respect toaccrued and unused vacation time), (ii) in the case of any termination other than by the company for Cause, any accrued but unpaid annual bonus with respect to any fiscal year ending prior to the 

 

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date of termination, and (iii) all amounts payable and benefits accrued under any otherwise applicable plan, policy, program or practice of the Company(other than relating to severance) in which Executive was a participant during his employment with the Company in accordance with the terms thereof (including, without limitation, amounts deferred under deferred compensation and similar plans, ifany). 

(b) *Other than for Cause, Death or Disability; Good Reason*. If, during the Employment Period, the Companyterminates the Executive’s employment, other than for Cause, death or disability, or if the Executive terminates his employment for Good Reason, the Company shall, subject to Executive’s continued full performance of his obligations setforth in Section 5 hereof, in addition to the amounts payable under paragraph (a) above, pay to the Executive (or his estate, beneficiary or legal representative) in twelve equal monthly installments commencing on the first day of themonth following the date of termination, the sum of (x) the Executive’s annual base salary then in effect, plus (y) the greater of the Executive’s target bonus, if any, for the fiscal year in which the date of termination occursand the average amount of annual bonuses paid to Executive for the two fiscal years preceding the year in which the date of termination occurs. In addition, the Executive and the Executive’s eligible spouse, dependents and beneficiaries willcontinue to be eligible to participate in the company’s health, medical, disability, life and other insurance plans (subject to Executive’s making required contributions to such plans) for a period of twelve months following the date oftermination (or the Company will provide equivalent benefits for such period), provided that all such continuing benefits shall cease upon the date on which Executive becomes eligible to receive comparable benefits from a subsequent employer.

8. Notice. Any notice required or permitted hereunder shall be in writingand shall be deemed sufficient when given by hand or by nationally recognized overnight courier or by express, registered or certified mail, postage prepaid, return receipt requested, and addressed, (i) if to the Company, to DHB Industries,Inc., 2102 S.W. 2nd Street, Pompano Beach, FL 33069 Attn: Chief Executive Officer, with a copy delivered to the same address, Attn: General Counsel, and(ii) if to Executive, to him at the address set forth in the initial paragraph hereof (or to such other addresses as may be provided by either party by notice). Notice shall be effective two (2) days after it is delivered by any overnightcourier, upon receipt if delivered by mail, or immediately if delivered by hand. 

9. Miscellaneous. This Agreementconstitutes the entire agreement between the parties concerning the subjects hereof and supersedes any and all prior agreements, term sheets or understandings. This Agreement may not be assigned by Executive, and may not be assigned by the Companyexcept in connection with a sale of substantially all of the assets or stock of the Company and shall be binding upon, and inure to the benefit of, the Company’s successors and assigns. The Company will require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Companywould be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as defined herein and any successor to its business and/or assets as aforesaid which assumes and agrees toperform this Agreement by operation of law, or otherwise. Headings herein are for convenience of reference only and shall not define, limit or interpret the contents hereof. 

 

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10. Amendment. This Agreement may be amended, modified or supplemented by the mutual consent ofthe parties in writing, but no oral amendment, modification or supplement shall be effective. No waiver by either party of any breach by the other party of any condition or provision contained in this Agreement to be performed by such other partyshall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by Executive or an authorized officer of the Company, as the case may be. 

11. Severability. The provisions of this Agreement are severable. The invalidity of any provision shall not affect the validity of any otherprovision, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 

12. Resolutionof Disputes; Enforcement. Any controversy or claim seeking equitable relief pursuant to this Agreement, all controversies and claims arising under or in connection with this Agreement or relating to the interpretation, breach or enforcementhereof and all other disputes between the parties in connection with the employment of the Executive shall be referred for arbitration to be held in Miami, Florida (or such other location as the Company and Executive shall agree) to a neutralarbitrator selected by Executive and the Company, and this shall be the sole and exclusive manner in which to resolve such controversy or claim hereunder (other than for injunctive relief that may be required by either party) The arbitration shallbe conducted in accordance with the Employment Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) in effect at the time of the arbitration. If the parties are not able to agree upon a neutralarbitrator, then an arbitrator shall be selected in accordance with the rules and procedures of the AAA. Each party hereto shall bear its own costs and expenses in connection with any proceeding hereunder, provided that the arbitrator shall beentitled to award to the prevailing party reimbursement of its reasonable legal costs and expenses (including with respect to the arbitrator and the AAA). 

13. Survivorship. The provisions of Sections 4, 5 and 6 of this Agreement shall survive Executive’s termination of employment. Other provisions of this Agreement shall survive any termination ofExecutive’s employment to the extent necessary to the intended preservation of each party’s respective rights and obligations. 

14. Withholding. All amounts required to be paid by the Company shall be subject to reduction in order to comply with applicable federal, state and local tax withholding requirements. 

15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of whichtogether shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature. 

16.Definition of Terms. The term “affiliate,” when used in this Agreement with respect to any person, means any other person that, directly or indirectly, controls, is controlled by or is under common control with the firstperson. The term “person,” when used in this Agreement, means any natural person or entity with legal status. 

 

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17. Governing Law. This Agreement shall be construed and regulated in all respects under theinternal laws of the State of Florida, without regard to principles of conflict of laws of such state. 

18. Effect on PriorAgreements. This Agreement supersedes all prior agreements of a similar nature between the Company and the Executive (other than existing coverage of the Executive for employee plans and benefits), whether oral or written, and upon execution anddelivery hereof by both parties, none of such prior agreements shall have any further force or effect. 

19. Captions. All captionsare provided for convenience, do not form a part of this Agreement, and are not admissible for purposes of construction. 

IN WITNESSWHEREOF, this Agreement is entered into as of the date first written above. 

 
DHB INDUSTRIES INC.By:   Larry Ellis President/CEO   James Anderson
 

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