Document:

exv10w27

Exhibit 10.27

AMENDMENT TO EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement (the “Amendment”) is made and entered into as
of March 1, 2011, by and between Atlantic Diving Supply, Inc., a Virginia corporation (the
“Company”), and Bruce Dressel (the “Executive”) for the purpose of amending the
Employment Agreement dated as of August 1, 2008, by and between the Company and the Executive (as
amended, the “Employment Agreement”).

     WHEREAS, as of the date hereof, the Company and the Executive have entered into the letter
agreement attached as Exhibit A hereto (the “Transaction Bonus Agreement”) pursuant
to which the Executive may be entitled to receive certain bonus payments following the Company’s
consummation of a High Yield Deal (as defined in the Transaction Bonus Agreement);

     WHEREAS, in connection with the adoption of the Transaction Bonus Agreement, the parties
hereto desire to modify certain terms of the Employment Agreement as hereinafter provided; and

     WHEREAS, pursuant to Section 17 of the Employment Agreement, the Employment Agreement may be
amended in whole or in part in writing in a form substantially similar to the form thereof.

     NOW, THEREFORE, in consideration of the foregoing recitals, and in consideration of the mutual
promises and covenants set forth below and in the Transaction Bonus Agreement, the Company and the
Executive hereby agree as follows:

     1. Defined Terms. Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Employment Agreement.

     2. Amendment to Section 5. Section 5 of the Employment Agreement is hereby amended
and restated in its entirety as follows:

	 	“5. 	 	Sale of the Company. If during the Term (i) any person or
persons or entity or entities (other than family members or family trusts) who
do not presently own stock in the Company acquire ownership of fifty one
percent (51%) or more of the Company’s stock or (ii) such persons or entities
acquire fifty one percent (51%) or more of the total gross fair market value of
the Company’s assets (collectively, the “Sale of the Company”) for a
purchase price not less than one hundred million dollars ($100,000,000.00) net
cash or property actually received by the stock owners in the case of a stock
sale or by the Company the case of an asset sale, then the Company shall pay
the Executive a bonus (a “Sale Bonus”) in an amount equal to the excess
of (x) one half of one percent (0.5%) of the purchase price over (y) any
amounts paid or payable to the Executive pursuant to the terms of the
Transaction Bonus Agreement. Subject to Section 14, the Sale Bonus shall be
paid within thirty (30) days of the closing of the sale of the stock or assets
and the disbursement of the

 

	 	 	 	purchase price in full. Upon the Sale of the Company, the Term shall be
extended for a period of two years from the date of sale and the Executive
shall be entitled to receive no less than the same benefits, salary and
bonus opportunity he received immediately prior to the sale for the
remainder of the Term. For purposes of this Section 5, “Company”
shall mean ADS Tactical, Inc. and/or Atlantic Diving Supply, Inc.”

     3. Amendment to Section 7(D). Section 7(D) of the Employment Agreement is hereby
amended and restated in its entirety as follows:

	 	“(D)	 	 Termination Without Cause or With Good Reason after the Sale of the
Company. If the Executive’s employment shall be terminated by the Company
without Cause or by the Executive for Good Reason during the period beginning
on the date of the Sale of the Company and ending on the two-year anniversary
of such date, then the Executive shall be entitled to receive, in addition to
the Accrued Amounts, a cash amount (the “Severance Payment”) equal to
two hundred percent (200%) of the sum of the Executive’s base compensation and
annual bonus for the year preceding the year in which the date of termination
occurs. Subject to Section 14, the Severance Payment shall be paid in equal
installments, and in accordance with the Company’s regular payroll practices,
during the twenty-four (24) month period immediately following the date of
termination; provided, however, that, notwithstanding the
foregoing, no portion of the Severance Payment shall be paid pursuant to this
Section 7(D) following the date that the Executive first violates any of the
provisions set forth in Section 8 of this Agreement.”

     4. Amendment to Section 14. Section 14 of the Employment Agreement is hereby amended
and restated in its entirety as follows:

	 	“14. 	 	Section 409A.
	 
	 	(A)	 	General. The parties hereto acknowledge and agree that, to the
extent applicable, this Agreement shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A of the Code and
the Department of Treasury Regulations and other interpretive guidance issued
thereunder (“Section 409A”). Notwithstanding any provision of this
Agreement to the contrary, in the event that the Company determines that any
amounts payable hereunder will be immediately taxable to the Executive under
Section 409A, the Company reserves the right (without any obligation to do so
or to indemnify the Executive for failure to do so) to (i) adopt such
amendments to this Agreement and appropriate policies and procedures, including
amendments and policies with retroactive effect, that the Company determines to
be necessary or appropriate to preserve the intended tax treatment of the
benefits provided by this Agreement, to preserve the economic benefits of this
Agreement

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	 	 	 	and to avoid less favorable accounting or tax consequences for the Company
and/or (ii) take such other actions as the Company determines to be
necessary or appropriate to exempt the amounts payable hereunder from
Section 409A or to comply with the requirements of Section 409A and thereby
avoid the application of penalty taxes thereunder. No provision of this
Agreement shall be interpreted or construed to transfer any liability for
failure to comply with the requirements of Section 409A from the Executive
or any other individual to the Company or any of its affiliates, employees
or agents.
	 
	 	(B)	 	Separation from Service under Section 409A. Notwithstanding
any provision to the contrary in this Agreement:
	 
	 		 	(i) no amount shall be payable pursuant to Section 7(D) unless the
termination of the Executive’s employment constitutes a “separation from
service” within the meaning of Section 1.409A-1(h) of the Department of
Treasury Regulations;
	 
	 		 	(ii) if the Executive is deemed at the time of his separation from service
to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the
Code, to the extent delayed commencement of any portion of the termination
benefits to which the Executive is entitled under this Agreement (after
taking into account all exclusions applicable to such termination benefits
under Section 409A) is required in order to avoid a prohibited distribution
under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s
termination benefits shall not be provided to the Executive prior to the
earlier of (x) the expiration of the six-month period measured from the date
of the Executive’s separation from service with the Company or (y) the date
of the Executive’s death. Upon the earlier of such dates, all payments
deferred pursuant to this Section 14(B)(ii) shall be paid in a lump sum to
the Executive, and any remaining payments due under this Agreement shall be
paid as otherwise provided herein;
	 
	 		 	(iii) the determination of whether the Executive is a “specified employee”
for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his
separation from service shall be made by the Company in accordance with the
terms of Section 409A of the Code and applicable guidance thereunder
(including without limitation Section 1.409A-1(i) of the Department of
Treasury Regulations and any successor provision thereto);
	 
	 		 	(iv) for purposes of Section 409A, the Executive’s right to receive
installment payments pursuant to Section 7(D) shall be treated as a right to
receive a series of separate and distinct payments; and

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	 		 	(v) to the extent that any reimbursement of expenses or in-kind benefits
constitutes “deferred compensation” under Section 409A, such reimbursement
or benefit shall be provided no later than December 31 of the year following
the year in which the expense was incurred. The amount of expenses
reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year. The amount of any in-kind benefits
provided in one year shall not affect the amount of in-kind benefits
provided in any other year.”

     5. Section References. Unless otherwise indicated, all references in this Amendment
to designated “Sections” are references to designated Sections of the Employment Agreement.

     6. Continuing Effectiveness of Employment Agreement. Except as modified by the
foregoing, the terms and conditions of the Employment Agreement shall remain unaffected and shall
continue in full force and effect after the date hereof.

     7. Form of Amendment. The Company and the Executive acknowledge and agree that this
Amendment is made pursuant to, and in accordance with the terms of, Section 17 of the Employment
Agreement.

     8. Counterparts. This Amendment may be executed in one or more counterparts and all
counterparts taken together shall be deemed to constitute one and the same instrument.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year
first above written.

	 	 	 	 	 

	 

	 	ATLANTIC DIVING SUPPLY, INC.	 	 
	 
	 	 	 	 
	 

	 	/s/ Luke Hillier

By:
	 	 
	 

	 	Its:	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	/s/  James Bruce Dressel 

Bruce Dressel
	 	 

 

EXHIBIT A

Transaction Bonus Agreement

(see attached)exv10w28

Exhibit
10.28

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

     This Second Amendment to Employment Agreement (the “Amendment”) is made and entered
into as of May 1, 2011, by and between Atlantic Diving Supply, Inc., a Virginia corporation
(the “Company”), and Bruce Dressel (the “Executive”) for the purpose of amending
the Employment Agreement dated as of August 1, 2008, and amended as of March 1, 2011, by and
between the Company and the Executive (as amended, the “Employment Agreement”).

     WHEREAS, prior to the date hereof, the Company has begun a process which, upon its
consummation, would result in the initial public offering of the Company’s common stock (the
“IPO”);

     WHEREAS, in connection with the IPO, the Company intends to adopt a new incentive award plan
and, subject to the Executive’s continued employment with the Company through the consummation of
the IPO, the Company intends to grant certain equity awards to the senior executives of the
Company, including the Executive, effective upon the consummation of the IPO (the “Equity
Awards”);

     WHEREAS, pursuant to the terms and conditions of the Employment Agreement, the Executive is
entitled to receive a Sale Bonus (as defined in the Employment Agreement) upon a Sale of the
Company (as defined in the Employment Agreement);

     WHEREAS, the parties acknowledge and agree that the IPO will not constitute a Sale of the
Company under the terms of the Employment Agreement and no Sale Bonus will be payable in connection
with the IPO;

     WHEREAS, in consideration for the grant of the Equity Awards, and as a condition precedent to
the effectiveness of any Equity Awards granted to the Executive, the parties have agreed that the
Sale Bonus provisions in the Employment Agreement will cease to apply upon and following the
consummation of the IPO;

     WHEREAS, the parties hereto desire to modify certain terms of the Employment Agreement as
hereinafter provided; and

     WHEREAS, pursuant to Section 17 of the Employment Agreement, the Employment Agreement may be
amended in whole or in part in writing in a form substantially similar to the form thereof.

     NOW, THEREFORE, in consideration of the foregoing recitals, and in consideration of the mutual
promises and covenants set forth below, the Company and the Executive hereby agree as follows:

     1. Defined Terms. Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Employment Agreement.

 

 

     2. Amendment to Section 5. Section 5 of the Employment Agreement is hereby amended
and restated in its entirety as follows:

	 	“5.	 	Sale of the Company. If during the Term and prior to the first
date upon which the Company’s common stock is listed (or approved for listing)
on any securities exchange or designated (or approved for designation) upon
notice of issuance as a national market security on an interdealer quotation
system (i) any person or persons or entity or entities (other than family
members or family trusts) who do not presently own stock in the Company acquire
ownership of fifty one percent (51%) or more of the Company’s stock or (ii)
such persons or entities acquire fifty one percent (51%) or more of the total
gross fair market value of the Company’s assets (collectively, the “Sale of
the Company”) for a purchase price not less than one hundred million
dollars ($100,000,000.00) net cash or property actually received by the stock
owners in the case of a stock sale or by the Company the case of an asset sale,
then the Company shall pay the Executive a bonus (a “Sale Bonus”) in an
amount equal to the excess of (x) one half of one percent (0.5%) of the
purchase price over (y) any amounts paid or payable to the Executive pursuant
to the terms of the Transaction Bonus Agreement. Subject to Section 14, the
Sale Bonus shall be paid within thirty (30) days of the closing of the sale of
the stock or assets and the disbursement of the purchase price in full. Upon
the Sale of the Company, the Term shall be extended for a period of two years
from the date of sale and the Executive shall be entitled to receive no less
than the same benefits, salary and bonus opportunity he received immediately
prior to the sale for the remainder of the Term. For purposes of this Section
5, “Company” shall mean ADS Tactical, Inc. and/or Atlantic Diving
Supply, Inc.”

     3. Section References. Unless otherwise indicated, all references in this Amendment
to designated “Sections” are references to designated Sections of the Employment Agreement.

     4. Continuing Effectiveness of Employment Agreement. Except as modified by the
foregoing, the terms and conditions of the Employment Agreement (including any previous amendments
thereto), shall remain unaffected and shall continue in full force and effect after the date
hereof.

     5. Form of Amendment. The Company and the Executive acknowledge and agree that this
Amendment is made pursuant to, and in accordance with the terms of, Section 17 of the Employment
Agreement.

     6. Counterparts. This Amendment may be executed in one or more counterparts and all
counterparts taken together shall be deemed to constitute one and the same instrument.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year
first above written.

	 	 	 	 	 
	 	ATLANTIC DIVING SUPPLY, INC.

 	 
	 	/s/
Luke M. Hillier	 
	 	By:  	Luke M. Hillier	 
	 	Its: 	CEO	 
	 
	 
	 	EXECUTIVE

 	 
	 	/s/
James B. Dressel	 
	 	Bruce Dressel

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