UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 11, 2005
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ENGINEERED SUPPORT SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Charter)
MISSOURI 0-13880 43-1313242
(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
201 Evans Lane, St. Louis, Missouri 63121
(Address of principal executive officer) (Zip Code)
Registrant's telephone number including area code: (314) 553-4000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
As previously reported on the current report on Form 8-K
filed on April 14, 2005, and as discussed in Item 5.02
below, Engineered Support Systems, Inc. (the "Company")
issued a press release on April 11, 2005 announcing that,
effective April 30, 2005, Michael F. Shanahan Sr. would
begin to serve in the capacity of non-executive Chairman
of the Board of Directors, a change from his then-current
position as executive Chairman of the Board of Directors,
and that, effective April 11, 2005, Daniel A. Rodrigues
was promoted to President and Chief Operating Officer of
the Company.
The Company has finalized the terms of a consulting
agreement, effective as of May 1, 2005, in connection with
the appointment of Mr. Shanahan to the position of
non-executive Chairman of the Board of Directors, and has
finalized the terms of an employment agreement, effective
as of April 11, 2005, with Mr. Rodrigues in connection
with his appointment to the position of President and
Chief Operating Officer of the Company. A description of
the consulting agreement and the employment agreement of
Messrs. Shanahan and Rodrigues, respectively, is set forth
in Item 5.02 below and a copy of each agreement is
attached hereto as Exhibit 10.1 and Exhibit 10.2,
respectively. The information set forth in Item 5.02
hereof, and the agreements filed as Exhibit 10.1 and
Exhibit 10.2 are incorporated herein by this reference.
This Form 8-K/A amends the current report on Form 8-K
filed on April 14, 2005, to include the material terms of
the consulting agreement and the employment agreement of
Messrs. Shanahan and Rodrigues, respectively.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
As previously reported on the current report on Form 8-K
filed on April 14, 2005, on April 11, 2005, the Company
announced that, effective April 30, 2005, Michael F.
Shanahan Sr. will serve in the capacity of non-executive
Chairman of the Board of Directors, a change from his
then-current position as executive Chairman of the Board
of Directors, and that, effective April 11, 2005, Daniel
A. Rodrigues had been promoted to President and Chief
Operating Officer of the Company.
The Company has entered into a consulting agreement,
effective May 1, 2005, by and between the Company and Mr.
Shanahan (the "Consulting Agreement"), in connection with
the appointment of Mr. Shanahan to the position of
non-executive Chairman of the Board of Directors, and has
entered into an employment agreement, effective April 11,
2005, by and between the Company and Mr. Rodrigues (the
"Employment Agreement"), in connection with Mr. Rodrigues'
appointment to the position of President and Chief
Operating Officer of the Company.
Consulting Agreement
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Pursuant to the terms of the Consulting Agreement, during
the term of the Consulting Agreement Mr. Shanahan will
provide consulting and advisory services pertaining to the
business and operations of the Company and will serve as
the non-executive Chairman of the Board of Directors of
the Company.
The initial term of the Consulting Agreement commenced May
1, 2005, and continues through April 30, 2006 (the
"Initial Term"). Thereafter, the Consulting Agreement
automatically renews for an additional one year period
through April 30, 2007 (the "Second Term"), unless
terminated by Consultant upon written notice at least 30
days prior to the expiration of the Initial Term.
Thereafter, the Consulting Agreement automatically renews
for successive one-year periods unless terminated by
either party upon written notice at least 30 days prior to
the expiration of any renewal term.
The Consulting Agreement may be terminated at any time by
Mr. Shanahan upon not less than 30 days' written notice,
or by the Company at any time with or without cause. In
the event that the Consulting Agreement is terminated by
the Company without cause, Mr. Shanahan would be entitled
to receive all compensation and benefits through the later
of the expiration of the Second Term or the renewal term
in effect at the time of termination, and such other
consideration as is expressly provided for in the
Consulting Agreement.
Mr. Shanahan's consulting fee under the Consulting
Agreement is $62,500 per month. The Consulting Agreement
also provides for payments in the amount of $52,500 per
month for 24 consecutive months to Mr. Shanahan's
designated beneficiary in the event Mr. Shanahan's death
occurs during the period that the Consulting Agreement is
in effect, as well as payments in the amount of $52,500
per month for a period not to exceed 60 consecutive months
in the event Mr. Shanahan becomes disabled during the
period that the Consulting Agreement is in effect.
Additionally, the Consulting Agreement provides that, upon
a termination by Mr. Shanahan by written notice, or upon a
termination by the Company without cause, or in the event
that either party determines not to renew the Consulting
Agreement for any reason, the Company will pay Mr.
Shanahan $52,500 per month for 24 months, effective as of
the date of termination of the Consulting Agreement. The
provisions defined within this paragraph are consistent
with the terms in Mr. Shanahan's prior Employment
Agreement.
In addition to the consulting fee, Mr. Shanahan is
entitled to: (i) reimbursement of reasonable and necessary
expenses incurred in the interest of the business of the
Company; (ii) a car allowance of not less than $1,800 per
month; (iii) participate in the Company's medical and
dental insurance programs along with his spouse for the
duration of his life and the life of his spouse; and (iv)
participate in the Company's life insurance, accidental
death and disability income benefit programs on the same
basis as executives of the Company who are entitled to
participate in the same.
The Consulting Agreement also contains non-compete and
non-diversion covenants that extend for so long as the
Consulting Agreement is in effect and during such period
after any termination that Mr. Shanahan is receiving
compensation from the Company pursuant to the Consulting
Agreement.
The description of the Consulting Agreement is qualified
in its entirety by reference to the complete agreement
that is attached as Exhibit 10.1 hereto and is
incorporated herein by reference.
Employment Agreement
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Pursuant to the terms of the Employment Agreement, Mr.
Rodrigues will serve as President and Chief Operating
Officer of the Company.
The initial term of the Employment Agreement commenced
April 11, 2005, and continues through April 10, 2008 (the
"Initial Term"). Thereafter, the Employment Agreement
automatically renews for successive one-year periods,
unless terminated by either party upon written notice at
least 30 days prior to the expiration of the initial term
or any renewal term.
Mr. Rodrigues' base salary under the Employment Agreement
is payable at a rate of $350,000 per year for the period
of April 11, 2005 through April 10, 2006. Additionally,
Mr. Rodrigues is entitled to earn an annual cash bonus in
an amount determined by the Company's Compensation
Committee. Mr. Rodrigues' target bonus for the fiscal year
ending October 31, 2005 is an amount equal to 60% of his
base salary. In addition to the cash bonus, for the
Company's fiscal year ending October 31, 2005, Mr.
Rodrigues is entitled to an award of 142,500 options with
a strike price equal to the closing price of the Company's
stock on June 6, 2005.
In addition to the salary and bonus compensation described
above, Mr. Rodrigues is entitled to: (i) reimbursement of
reasonable and necessary expenses; (ii) a car allowance as
determined by the Company's Board of Directors; (iii)
payment of monthly dues and charges for country club and
other membership privileges as approved by the Board of
Directors; and (iv) participation in the Company's
medical, life insurance, accidental death, disability
income, profit sharing trust and 401(k) programs and other
employee benefits on the same basis as other employees of
the Company.
The Employment Agreement provides for severance and
benefit participation in the event of a termination of the
Employment Agreement without cause. Upon such termination
without cause, Mr. Rodrigues is entitled to his full
monthly base salary at such level in effect as of the date
of his termination for a period of 12 months.
Additionally, during such 12-month period, Mr. Rodrigues
(and his eligible family members) shall be entitled to
continue to participate in and receive certain standard
employee benefits.
The Employment Agreement also provides that, in the event
of a change of control of the Company, Mr. Rodrigues is
entitled to a lump sum cash payment in an amount equal to
2.99 times his average annual compensation for the prior
five fiscal years, or the average of the full fiscal years
and annualized partial years of employment if less than
five years.
The Employment Agreement also contains non-compete and
non-diversion covenants that extend for the term of
employment and for a period of two years after termination
of employment.
The description of the Employment Agreement is qualified
in its entirety by reference to the complete agreement
that is attached as Exhibit 10.2 hereto and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) The following exhibit is filed as part of this report:
Exhibit Number Description
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10.1 Consulting Agreement dated May 1, 2005 by
and between Engineered Support Systems,
Inc. and Michael F. Shanahan, Sr.
10.2 Employment Agreement dated April 11,
2005 by and between Engineered Support
Systems, Inc. and Daniel A. Rodrigues.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ENGINEERED SUPPORT SYSTEMS, INC.
Date: May 6, 2005 BY: /s/ Gary C. Gerhardt
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Gary C. Gerhardt
Vice Chairman and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Number Description
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10.1 Consulting Agreement dated May 1, 2005 by and
between Engineered Support Systems, Inc. and
Michael F. Shanahan, Sr.
10.2 Employment Agreement dated April 11, 2005 by
and between Engineered Support Systems, Inc. and
Daniel A. Rodrigues.