Agreement by and between MTC Technologies, Inc. and David S. Gutridge



 Exhibit 10.1 
 AGREEMENT 
 THIS AGREEMENT (the “Agreement”), effective as of
January 16, 2007, is entered into between MTC Technologies Inc. on behalf of itself, its officers, directors, shareholders, employees and agents (in their individual and representative capacities), and its parent, affiliated, successor,
subsidiaries and other related companies, and each of them jointly and severally (herein singularly and collectively called the “Company”), and David S. Gutridge on behalf of himself and his heirs, executors, guardians, administrators,
successors and assigns, and each of them jointly and severally (herein singularly and collectively called “Employee”). (Collectively, the Company and Employee are referred to hereafter as the “Parties”) 
 WHEREAS, Employee has served the Company in various capacities for several years, including as Chief Financial Officer and Chief Executive
Officer, and has expressed his desire to retire from employment with the Company; 
 WHEREAS, the Company desires to retain Employee
in order to utilize his significant experience in the business matters of the Company and Employee desires to provide such services to the Company; 
 NOW, THEREFORE, in consideration of the above and for other good and valuable consideration as described herein, the Parties agree as follows: 
  

	1.	Employment. 

 The Company hereby employs the
Employee, and the Employee agrees to serve, as a Consulting Advisor from January 16, 2007 through January 15, 2009. The period of January 16, 2007 through January 15, 2009 shall be referred to as the “Term.” During the
Term, Employee will render such services to the Company, as the Company may request of Employee on an on-call basis from time to time, at a time and place of Employee’s choosing. The Employee shall perform such duties consistent with the
Employee’s position as may be assigned to him from time to time by the Chairman of the Board of the Company. Employee will, with reasonable notice, but at no personal cost or expense to Employee, during or after the term of this Agreement,
furnish information as may be in his possession and cooperate with the Company, as may reasonably be requested, in connection with any claims or legal actions in which the Company or any of its parent, subsidiaries or affiliates are or may become a
party. 
  

	2.	Payments and Benefits. 

  

	 	A.	In consideration of Employee agreeing to extend his services as provided herein and for the other covenants made by Employee in this Agreement, including without limitation the
covenants made in Section 7, the Company shall compensate Employee at an annual rate of $250,000, payable in 27 equal payments of $10,416.67 starting on January 31, 2007 and thereafter on or before the 15th and the last day of each calendar month, through March 15, 2008. On or before March 15, 2008, the Company shall make a final payment of
$218,749.91 (the “Final Payment”). If at any time prior to the end of the Term the Agreement is terminated pursuant to Section 3(a) or 3(b), Employee shall be obligated to return to the Company the pro rata portion of the Final
Payment which has yet to be earned from the date of such termination through the end of the Term. All payments shall be 








 subject to all applicable withholdings and pursuant to the Company’s regular payroll schedule. Not
withstanding the above, in the event of a “Change in Control”, as defined in the Company’s 2002 Equity and Performance Incentive Plan, all remaining payments under this section 2A shall be accelerated and immediately paid to Employee
on or before the date of such Change in Control. 
  

	 	B.	Employee is entitled to benefits under the Company’s welfare benefit plans, including his right to participate in the Company’s 401(k) savings plan in which he may
participate on the same basis as any other employee of the Company. Notwithstanding the terms of any such stock option grant, Employee further agrees that his right to exercise any stock option or other option to acquire Common Stock of the Company
pursuant to the Company’s 2002 Equity and Performance Incentive Plan shall expire: 

  

	 	1.	with respect to any options which are “in the money” as of the date hereof, on December 31, 2007; and 

  

	 	2.	with respect to all other options, on September 15, 2008. 

  

	 	C.	Notwithstanding Section 2.B above, Employee shall be entitled to participate in and receive any bonus or other annual incentive amounts paid by the Company with respect to
calendar year 2006 as determined by the Compensation Committee of the Board of Directors of the Company in its sole discretion. 

  

	 	D.	The Company shall pay or reimburse Employee for all reasonable expenses incurred by Employee in connection with the performance of his duties and obligations under this Agreement,
subject to presentation of reasonable substantiation and/or vouchers, and otherwise in accordance with Employee’s past practice and such procedures as the Company may from time to time establish for expense reimbursement applicable to similarly
situated employees of the Company. 

  

	3.	Termination. The Employee’s employment by the Company: (a) may be terminated by the Company for cause (as defined below) at any time; and (b) may be
terminated by the Employee, without cause at any time upon thirty (30) days’ prior written notice delivered by the Employee to the Company. “Cause” means that the Employee shall have: 

  

	 	i.	been convicted of a criminal violation involving, in each case, fraud, embezzlement or theft in connection with the Employee’s duties or in the course of the Employee’s
employment with the Company; 

  

	 	ii.	committed intentional wrongful damage to property of the Company; or 

  

	 	iii.	committed intentional wrongful disclosure of secret processes or confidential information of the Company; 

 and any such act shall have been demonstrably and materially harmful to the Company. 
  

	4.	Good Behavior. Employee agrees to make no criticism or negative statements about Company, its management, its methods of operation, its role as corporate or community
citizen, or its treatment of Employee and agrees not to encourage or aid any person or entity in the pursuit of any claim or cause of action against Company, except as otherwise permitted by law. 








 Company agrees to make no criticism or negative statements about Employee, including his methods of
operation or his role as corporate or community citizen, and agrees not to encourage or aid any person or entity in the pursuit of any claim or cause of action against Employee, except as otherwise permitted by law. 
  

	5.	Release and Covenant Not to Sue. Employee agrees to release and discharge the Company and its officers, directors, shareholders, employees and agents (in their
individual and representative capacities), and its parent, affiliated, predecessor, successor, subsidiary and other related companies (collectively “Released Parties”) from any and all claims, known or unknown, for anything which has
occurred up to the date this Agreement is signed by the Employee, under any legal theory including claims arising under contract, tort or common law, and all claims asserting wrongful discharge, breach of contract, emotional distress, attorneys fees
or punitive damages. This Release applies to any claims arising out of the employment relationship as of the date Employee executes this Agreement. Employee further agrees that, to the fullest extent of the law, not to make any attempt to collect
any damages whatsoever from the Released Parties for any violation of any federal, state, or local statute, rule, or ordinance, or under any common law theory sounding in tort, contract, or otherwise for acts which occurred prior to signing this
agreement. This release specifically encompasses, but is not limited to, claims brought under the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Rehabilitation Act of 1973, the Civil Rights Act of 1964 (and the 1991
Amendments thereto), any claim arising under Title 42 of the United States Code, the Immigration Reform Control Act, the Employee Retirement Income Security Act of 1974, the Older Workers’ Benefits Protection Act, the Family and Medical Leave
Act, the Fair Labor Standards Act, the National Labor Relations Act, Chapter 4112 of the Ohio Revised Code, and any other federal, state, or local legislation, all as originally enacted and amended. Employee acknowledges that he might, in the
future, discover claims or facts in addition to or different from those which he now knows or believes to exist with respect to the subject matters of this Agreement and which, if known or suspected at the time of executing this Agreement, may have
materially affected this settlement. Nevertheless, Employee hereby waives any right, claim, or cause of action that might arise as a result of such different or additional claims or facts. The Parties understand, intend and agree that upon payment
of the sums referred to in Paragraph 2 hereof, Employee will have received complete satisfaction of any and all claims, whether known, suspected, or unknown, that he may have or has had against the Company as of the date of this Agreement,
including, but not limited to, claims related in any way to the Employee’s employment or the end of that employment by the Company. Employee hereby waives any and all relief not explicitly provided for herein. Notwithstanding the above, nothing
herein is to be construed as preventing Employee from seeking enforcement of Employee’s rights and the Company’s obligations under this Agreement. 

  

	6.	Protection of Trade Secrets and Confidentiality. The Company recognizes and Employee acknowledges that Employee possesses certain business and financial information
about its operations, information about new or envisioned products or services, product research, product specifications, records, plans, prices, costs, customer lists, concepts and ideas, and that the Company is the owner of proprietary rights in
certain systems, methods, processes, procedures, technical and non-technical information, research and other things which constitute valuable trade secrets of the Company. Employee acknowledges that the Company has a legitimate interest in
protecting such confidential and proprietary information in order to maintain and enhance a competitive edge within its industry. Accordingly, Employee agrees that he will not use or remove, duplicate or disclose, directly or indirectly, to any
persons or entities outside the Company any information, property, that constitute trade secrets, which have not been publicly 








 disclosed. In the event that Employee is requested or required in a judicial, administrative or
governmental proceeding to disclose any information that is the subject matter of this Paragraph 6, Employee will provide the Company with prompt written notice of such request and all related proceedings so that the Company may seek an appropriate
protective order or remedy or, as soon as practicable, waive Employee’s compliance with the provisions of this Paragraph 6. 
  

	7.	Covenant Not to Compete/Nonsolicitation. Employee expressly agrees that, during the Term of this Agreement and for a period of two years after the termination of this
Agreement, Employee shall not, directly or indirectly, without the prior written consent of the Company, whether as an individual, partner, joint venturer, employee, agent, salesperson, consultant, officer, independent contractor, or owner of any
entity, or in any other capacity, alone or in association with, on behalf of, or for the benefit of, any entity or other person: 

  

	 	a.	make any statements or perform any acts intended to advance the interest of any competitor of the Business of the Company (as defined below) in any manner that injures the Business
of the Company; 

  

	 	b.	directly or indirectly own or hold an equity interest in, or be employed by or receive compensation from, any party engaged in the same or similar business as, or enter into or
engage in, any business that competes with the Company, the Business of the Company or part of the Business of the Company; provided, however, that this provision does not prohibit the passive ownership of less than 5% equity interest in a publicly
traded company; 

  

	 	c.	canvass, solicit, or accept any business that is Business of the Company; 

  

	 	d.	divert, entice or otherwise take away any customers, business, patronage or orders of the Company, or attempt to do so, including directly or indirectly requesting or advising any
past, present or future customers (a future customer being defined as an active sales prospect of the Company during the Term) to withdraw, curtail, or cancel their business relation with the Company, or any of its affiliates relating to the
Business of the Company; 

  

	 	e.	induce or attempt to induce any employee of the Company or of any of its affiliates, to terminate his or her services with the Company or any of its affiliates, as applicable, or to
discuss with any employee of the Company the development or operation of any business intended to compete with the Business of the Company, provided that nothing shall prohibit Employee from making employment solicitations aimed at the general
public, or from hiring any person who responds to any such solicitation; or 

  

	 	f.	promote or assist, financially or otherwise, any person, firm, association, partnership, corporation or other entity engaged in any business that competes with the Company or part
of the Business of the Company. 

 Employee acknowledges and agrees that the remedy at law available to the Company for breach
of any of his obligations under this Section 7 would be inadequate. Employee therefore agrees that, in addition to any other rights or remedies that the Company may have at law or in equity, temporary and permanent injunctive relief may be
granted in any proceeding which may be brought to enforce any provision contained in this Section 7, without the necessity of proof of actual damage. “Business of the Company” shall mean the business of the Company during the Term of
this Agreement as described in its Annual Report on Form 10-K as filed with the Securities and Exchange Commission in April, 2007. 








	8.	Applicable Law. This Agreement shall be governed by the laws of the State of Ohio, unless federal law preempts those laws and any action brought by any party
hereunder may be instituted and maintained only in the appropriate court having jurisdiction over Montgomery County, Ohio. 

  

	9.	Nonwaiver. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent
breach of the same or any other provision of this Agreement. 

  

	10.	Severability. Should any provision of this Agreement, or the application thereof, be held invalid or unenforceable by a court of competent jurisdiction, the remainder
of this Agreement, at the option of the Company shall continue to be valid and enforceable to the fullest extent permitted by law or equity. Except for a termination provided for in Section 3(a) or 3(b), under no circumstances the Company may
not elect to invalidate the payment obligations set out in Section 2. 

  

	11.	Effect on Other Agreements. Except as otherwise provided herein, this Agreement represents the complete agreement between the Parties and supersedes any prior
written or oral agreement, express or implied, between Employee and the Company and/or any other party as to the employment and compensation of Employee and the subject matter herein, including without limitation, the Severance Agreement dated
November 1, 2005 between Employee and the Company, which the parties agree shall terminate and be of no further force or effect as of the effective date of this Agreement. However, Employee remains bound by any prior agreement protecting the
company’s trade secrets. 

  

	12.	Employee Representations. 

 The Employee:

  

	 	a.	Has been advised to consult an attorney before signing this Agreement; 

  

	 	b.	Understands the terms of this Agreement; 

  

	 	c.	May take up to 45 days to sign this Agreement; 

  

	 	d.	May revoke acceptance within 7 days of signing this Agreement. To be effective, the revocation must be delivered to the company’s Human Resources Director within the revocation
period. 

 TO EVIDENCE THEIR AGREEMENT, the parties have executed this document as of the date last written below.

  

							
	MTC Technologies Inc.	 		 	David S. Gutridge
				
	By:	 	 /s/ Rajesh Soin
	 		 	 /s/ David S. Gutridge

			
	January 4, 2007	 		 	January 4, 2007
	Date	 		 	Date