-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q+OwhMko6pU0W+B6L2Y2Z0VpQeeXEPs21dDWOoBitG6UNvquusky1XPHR5lNL3lW 4Ts48ahivX/dSENmilcfxg== 0001092306-05-000312.txt : 20050611 0001092306-05-000312.hdr.sgml : 20050611 20050603154527 ACCESSION NUMBER: 0001092306-05-000312 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050524 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050603 DATE AS OF CHANGE: 20050603 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DHB INDUSTRIES INC CENTRAL INDEX KEY: 0000899166 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 113129361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13112 FILM NUMBER: 05877635 BUSINESS ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 BUSINESS PHONE: 5169971155 MAIL ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 FORMER COMPANY: FORMER CONFORMED NAME: DHB CAPITAL GROUP INC /DE/ DATE OF NAME CHANGE: 19960518 8-K 1 form8k052405.txt FORM 8-K DATED 05-24-05 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): MAY 24, 2005 DHB INDUSTRIES, INC. (Exact name of registrant as specified in its charter) DELAWARE 001-13112 11-3129361 (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) 400 POST AVENUE, SUITE 303 11590 WESTBURY, NEW YORK (Address of principal executive offices) (Zip Code) (516) 997-1155 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name or former address, if changed since last report.) 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)) SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT On June 2, 2005, the Company entered into an employment agreement with Marc Dien. Pursuant to the employment agreement Mr. Dien will serve as the Company's Senior Vice President - Mergers and Acquisitions. The employment agreement is effective June 2, 2005, and continues through June 2, 2010, unless terminated earlier by the parties under the terms of the agreement. The employment agreement provides for the payment to Mr. Dien of a base annual salary of $250,000. Mr. Dien is also eligible to receive a discretionary bonus based upon his contributions to the Company and the Company's financial performance. Furthermore, Mr. Dien is granted warrants to purchase shares of common stock of the Company pursuant to a separate warrant agreement. Mr. Dien's employment is "at will" and may be terminated at any time, with or without cause. Upon termination of employment, Mr. Dien shall: 1) be paid all accrued but unpaid base annual salary, 2) be paid all earned but unpaid other compensation (i.e. cash incentive compensation, vacation) earned through the date of termination, and 3) retain all rights with respect to vested equity-based awards as provided under the circumstances under the applicable grant or award agreement. If an Event of a Change in Control occurs, as defined in the employment agreements, during the term of the agreement, Mr. Dien shall be entitled to the following benefits: (i) the immediate vesting of all outstanding warrants and/or options to purchase shares of the Company's common stock and any such outstanding warrants and/or options held by Mr. Dien shall remain exercisable through the end of the stated term thereof, (ii) a cash lump sum payment equal to four (4) months base salary payable at Mr. Dien's then current rate, and (iii) medical benefits, as provided for under the employment agreements, for a period of four (4) months commencing with the date of consummation of the Event of a Change in Control. The full text of the employment agreement is included as Exhibit 10.8 to this report and is incorporated herein by reference. In connection with the above-referenced employment agreement, the Company entered into a warrant agreement dated June 2, 2005 with Mr. Dien. Pursuant to such warrant agreement, Mr. Dien is entitled to purchase from Company at any time from the date of the warrant agreement through and including June 2, 2010 up to a total of 600,000 shares of the Company's common stock, $.001 par value (each share, a "Warrant Share") at an exercise price of $7.69 per Warrant Share. 100,000 Warrant Shares shall vest on September 2, 2005, 100,000 Warrant Shares shall vest on the first anniversary date of the warrant agreement and 100,000 Warrant Shares shall vest on each anniversary date of the warrant agreement until all Warrant Shares are vested provided that Mr. Dien is employed by the Company on such anniversary date. The full text of the warrant agreement is included as Exhibits 10.9 and is incorporated herein by reference. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Not Applicable (b) Not Applicable (c) The following Exhibits are filed as part of this Current Report on Form 8-K: EXHIBIT DESCRIPTION 10.8 Employment Agreement dated as of June 2, 2005, between DHB Industries, Inc. and Marc Dien. 10.9 Warrant Agreement dated as of June 2, 2005, between DHB Industries, Inc. and Marc Dien. 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. Date: June 3, 2005 DHB INDUSTRIES, INC. By: /s/ DAWN M. SCHLEGEL --------------------------------------------- Name: Dawn M. Schlegel Title: Chief Financial Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 10.8 Employment Agreement dated as of June 2, 2005, between DHB Industries, Inc. and Marc Dien. 10.9 Warrant Agreement dated as of June 2, 2005, between DHB Industries, Inc. and Marc Dien. EX-10.8 2 ex10-8.txt EMPLOYMENT AGREEMENT EXHIBIT 10.8 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement") made as of the 2nd day of June, 2005 by and between Marc Dien ("Executive") and DHB Industries, Inc., a Delaware corporation (the "Company"). NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and sufficiency of which is acknowledged, the parties agree: 1. TERM. The Company agrees to employ, directly or through one of its subsidiaries, Executive, and Executive agrees to be employed by the Company, directly or indirectly, subject to the terms and conditions of this Agreement, for the period commencing on June 2, 2005 (the "Effective Date") and terminating on the fifth anniversary of the Effective Date (the "Employment Period"), unless earlier terminated as provided in Section 5. 2. EMPLOYMENT DUTIES. 2.1 During the Employment Period, Executive shall be employed in the business of the Company and its subsidiaries. Executive shall serve with the title of Senior Vice President - Mergers and Acquistions. Executive shall devote substantially all of his working time and efforts to the performance of duties under this Agreement. 2.2 In performing duties hereunder, Executive shall be available for reasonable travel, as the needs of the business require. Executive shall be based in Las Vegas, Nevada. 2.3 Executive shall entitled to hire such additional personnel as Executive deems appropriate and necessary in order to assist him in performing his duties hereunder, subject to the prior approval of he Chief Executive Officer of the Company. 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 ("Base Salary") in an amount not less than $250,000. 3.2 BONUSES. After the close of each fiscal year during the Employment Period, the Company shall review the performance 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, or any compensation committee thereof, in its discretion, determines that Executive's contribution to the Company warrants such additional payment and the Company's anticipated financial performance during the present period permits such payment. Bonuses shall be paid as a lump sum not later than sixty (60) days after the end of the Company's preceding fiscal year, provided Executive remains employed and has not given written notice of termination at the time such payment is due. 3.3 VACATIONS. Executive shall be entitled to two (2) weeks of paid vacation per calendar year, provided, however, that commencing after the first anniversary of this Agreement Executive shall be entitled to three (3) weeks paid vacation. Unused vacation shall not be carried over to any subsequent year. 3.5 STOCK WARRANT. To induce Executive to enter into this Agreement, Executive shall be granted a warrant to purchase shares of the Company's common stock by the Company, pursuant to a separate warrant agreement, dated the date hereof, between the Company and Executive, in the form attached as SCHEDULE 3.5. 3.6 OTHER BENEFITS. The Company shall provide to Executive such other benefits, including the right to participate in medical and other benefit plans, as are made generally available to executives of the Company from time to time. 4. EXPENSES/INDEMNIFICATION. 4.1 EXPENSES. The Company shall reimburse Executive for the reasonable business expenses incurred by Executive in the course of performing her duties for the Company, upon submission of invoices, vouchers or other appropriate documentation, as may be required in accordance with the policies in effect from time to time for executive employees of the Company, which policies have been provided to Executive. 4.2 INDEMNITY. To the fullest extent permitted by law, the Company shall indemnify Executive with respect to any actions commenced against Executive in his capacity as an officer, director, employee, agent or fiduciary or former officer, director, employee, agent or fiduciary of the Company, or any Subsidiary of the Company 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 fees and expenses incurred in defending such actions, after receipt of an itemized 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 that Executive 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 any other right to indemnification or exoneration to which Executive is entitled at law, or under the governing charter documents of the Company. The Company agrees to use its best efforts to maintain officers' and directors' liability insurance, including coverage for Executive. 5. TERMINATION; CHANGE OF CONTROL. 5.1 AT-WILL EMPLOYMENT. Executive's employment hereunder is "at will" and may be terminated at any time, with or without cause, at the option of the Company, subject only to the obligations under the Section 5.2 below. Additionally, this Agreement may be terminated by Executive by delivering written notice to the Company in the manner specified below. Upon any termination hereunder, the Employment Period shall expire. 5.2 RIGHTS UPON TERMINATION; PAYMENT OF BENEFITS EARNED THROUGH DATE OF TERMINATION. Upon any termination of Executive's employment during the Employment Period, Executive shall in all events be paid all accrued 2 but unpaid Base Salary and all earned but unpaid compensation (vacation) earned through his Date of Termination (as defined below). Executive shall also retain all such rights with respect to vested equity-based awards as are provided under the circumstances under the applicable grant or award agreement, and shall be entitled to all other benefits which are provided under the circumstances in accordance with the provisions of the Company's generally applicable employee benefit plans, practices and policies and Executive shall have no further entitlements with respect thereto. 5.3 NOTICE OF TERMINATION. Notice of termination of this Agreement or of any termination of Executive's employment (other than by reason of death) shall be communicated by written notice (a "Notice of Termination") from one party to the other in accordance with this Section 5 and Section 6. "Date of Termination," with respect to any termination of Executive's employment during the Employment Period, shall mean the effective date of termination specified in the Notice of Termination. 5.4 CHANGE OF CONTROL. If an Event of a Change in Control (as defined below) occurs during the Employment Period, Executive shall be entitled to the following benefits: (i) the immediate vesting of all outstanding warrants and/or options to purchase shares of the Company's common stock and any such outstanding warrants and/or options held by Executive shall remain exercisable through the end of the stated term thereof, (ii) a cash lump sum payment equal to four (4) months base salary payable at Executive's then current rate, and (iii) medical benefits provided under Section 3.6 for a period of four (4) months commencing with the date of consummation of the Event of a Change in Control. For purposes of this Agreement, an "Event of a Change in Control" shall mean (a) the sale, whether by way of merger, consolidation, or other disposition, of all or substantially all of the business and/or assets of the Company, (b) the sale by the then stockholders of the Company in a single transaction or in a series of related transactions of at least 50% of the outstanding voting shares of the Company; (c) an exchange by the then stockholders of the Company of their shares in a transaction that qualifies as a reorganization within the meaning of the Internal Revenue Code of 1986, as amended; or (d) the liquidation or dissolution of the Company, except that a liquidation or reorganization effected in a bankruptcy case by or against the Company under Title 11 of the United States Code, as well as any transactions carried out by or for the Company in connection with such bankruptcy liquidation or reorganization, shall not be an Event of a Change in Control. 6. NOTICE. Any notice required or permitted hereunder shall be in writing and 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, if to the Company at 400 Post Avenue, Suite 303, Westbury, New York 11590, and if to Executive at the address set forth in the Company's records (or to such other address as may be provided by notice). Notice shall be effective three (3) days after it is delivered to any courier, or immediately if delivered in hand. 7. MISCELLANEOUS. This Agreement and its schedules constitute 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 be assigned by 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 or indirect, 3 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 Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform 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. 8. AMENDMENT. This Agreement may be amended, modified or supplemented by the mutual consent of the 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 party shall 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. 9. SEVERABILITY. The provisions of this Agreement are severable. The invalidity of any provision shall not affect the validity of any other provision, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 10. RESOLUTION OF DISPUTES; ENFORCEMENT. Any controversy or claim seeking equitable relief pursuant to this Agreement or any Schedule to this Agreement, all controversies and claims arising under or in connection with this Agreement or relating to the interpretation, breach or enforcement hereof and all other disputes between the parties in connection with the employment of the Executive shall be heard in the courts of the State of New York ("Court") which shall have exclusive jurisdiction of any and all such disputes and which shall apply the law specified in Section 15 below. Each party shall pay the cost of his or its own legal fees and expenses incurred in connection with any such litigation. No party to any such litigation shall be liable to the other for multiple, punitive, exemplary or consequential damages. All parties consent to the jurisdiction of the Court, and agree INTER ALIA that service may be had pursuant to the provisions of any "long-arm statute" so-called applicable to proceedings pending within such Court. 11. SURVIVORSHIP. The provisions of Section 10 of this Agreement shall survive Executive's termination of employment. Other provisions of this Agreement shall survive any termination of Executive's employment to the extent necessary to the intended preservation of each party's respective rights and obligations. 12. BOARD ACTION. Where an action called for under this Agreement is required to be taken by the Board of Directors, such action shall be taken by the vote of not less than a majority of the members then in office and authorized to vote on the matter. 13. 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. 4 14. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature. 15. GOVERNING LAW. This Agreement shall be construed and regulated in all respects under the internal laws of the State of New York, without regard to principles of conflict of laws. 19. CAPTIONS. All captions are provided for convenience, do not form a part of this Agreement, and are not admissible for purposes of construction. 5 IN WITNESS WHEREOF, this Agreement is entered into as of the date and year first above written. DHB INDUSTRIES INC. By:/s/ JEROME KRANTZ ---------------------------------------- Name: Jerome Krantz Its: Compensation Committee Chairman /s/ MARC DIEN ---------------------------------------- Marc Dien 6 EX-10.9 3 ex10-9.txt WARRANT AGREEMENT DATED JUNE 2, 2005 EXHIBIT 10.9 NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. DHB INDUSTRIES INC. WARRANT Warrant No. 1075 Date of Original Issuance: June 2, 2005 DHB Industries, Inc., a Delaware corporation (the "Company"), hereby agrees that, for value received, Marc Dien or his assigns (the "Holder"), is entitled to purchase from the Company at any time and from time to time from and after the date hereof and through and including June 2, 2010 (the "Expiration Date"), and subject to the following terms and conditions, up to a total of 600,000 shares, 100,000 shares of which shall vest on September 2, 2005, 100,000 shares of which shall vest on the first anniversary date hereof and 100,000 shares of which shall vest on each subsequent anniversary date hereof provided the Holder is employed by the Company on such anniversary date (as adjusted from time to time as provided in Section 8) of common stock, $0.001 par value per share (the "Common Stock"), of the Company (each such share, a "Warrant Share" and all such shares, the "Warrant Shares") at an exercise price (as adjusted from time to time as provided in Section 8, the "Exercise Price") of $7.69 per Warrant Share: 1. REGISTRATION OF WARRANT. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may treat the registered Holder as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 2. REGISTRATION OF TRANSFERS. The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed by the Holder, to the Company at its address specified herein. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a "New Warrant"), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant. 3. EXERCISE AND DURATION. Subject to the provisions of Section 5, this Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the date hereof to and including the Expiration Date. At 6:30 p.m., New York City time on the Expiration Date, the portion of this Warrant available for exercise and not exercised prior thereto shall be and become void and of no value, provided, that if the closing sales price of the Common Stock on the Expiration Date is greater than 102% of the Exercise Price on the Expiration Date, then this Warrant shall be deemed to have been exercised in full (to the extent not previously exercised) on a "cashless exercise" basis at 6:30 P.M. New York City time on the Expiration Date. The Company may not call or redeem all or any portion of this Warrant without the prior written consent of the Holder. 4. DELIVERY OF WARRANT SHARES (a) Upon delivery of the Form of Election to Purchase attached hereto to the Company at its address for notice set forth in Section 12 and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than five Trading Days (a "Trading Day" shall be a day on which the American Stock Exchnage is open for business) after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise. The Company shall, upon request of the Holder, if available, to the Company and if the Company's transfer agent can deliver Warrant Shares electronically through the Depositor Trust Corporation, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. A "DATE OF EXERCISE" means the date on which the Holder shall have delivered to the Company (i) the Form of Election to Purchase attached hereto, appropriately completed and duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased. (b) If by the fifth Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 4(a), then the Holder will have the right to rescind such exercise by written notice to the Company given prior to the delivery of the subject Warrant Shares. 2 (c) If by the fifth Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a "Buy-In") (if any), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of the Common Stock at the time of the obligation giving rise to such purchase obligation and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with a market price on the date of exercise totaled $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice setting forth in reasonable detail (and with appropriate supporting documentation) the calculation of the amounts payable to the Holder in respect of the Buy-In. (d) The Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any other provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person or entity of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 5. CHARGES, TAXES AND EXPENSES. Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 6. REPLACEMENT OF WARRANT. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution 3 for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (and, in the case of mutilation, the receipt by the Holder of the mutilated Warrant) and customary and reasonable indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. 7. RESERVATION OF WARRANT SHARES. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant. The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, are duly and validly authorized, issued and fully paid and nonassessable. 8. CERTAIN ADJUSTMENTS. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8. (a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. (b) PRO RATA DISTRIBUTIONS. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, "Distributed Property"), then, upon any exercise of this Warrant thereafter, the Company shall also issue to the exercising Holder the Distributed Property that such Holder would have been entitled to receive in respect of the Warrant Shares for which such had the Holder been the record holder of such Warrant Shares immediately prior to the record date for such distribution. (c) FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding: (i) the Company effects any merger or consolidation of the Company into another person or entity, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person or entity) is completed pursuant to which holders of Common 4 Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the "Alternate Consideration"). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction, subject to limitation based upon full prior utilization of any maximum amount applicable to any components(s) of the Alternate Consideration. Any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions provided that the covenant set forth in Section 8 relating to the reservation of Common Stock shall be replaced with a covenant to the effect that sufficient Alternate Consideration shall be reserved for issuance upon exercise of the Warrant and evidencing the Holder's right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is affected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (c) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. (d) NUMBER OF WARRANT SHARES. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a), (b) or (d) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. (e) CALCULATIONS. All calculations under this Section 8 shall be made to the nearest cent or share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock. (f) NOTICE OF ADJUSTMENTS. Upon the occurrence of each adjustment pursuant to this Section 8, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing 5 the transactions giving rise to such adjustments and showing in reasonable detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company's transfer agent. (g) NOTICE OF CORPORATE EVENTS. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 10 calendar days prior to the applicable record or effective date on which a person or entity would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 9. PAYMENT OF EXERCISE PRICE. The Holder shall pay the Exercise Price in one of the following manners: (a) CASH EXERCISE. The Holder may deliver immediately available funds or a certified check; or (b) CASHLESS EXERCISE. The Holder may surrender this Warrant to the Company together with a notice of cashless exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows X = Y [(A-B)/A] Where: X = the number of Warrant Shares to be issued to the Holder. Y = the number of Warrant Shares with respect to which this Warrant is being exercised. A = the average of the closing bid prices of the Common Stock for the five Trading Days immediately prior to (but not including) the Date of Exercise. B = the Exercise Price (as adjusted). For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was issued. 6 10. LIMITATIONS ON EXERCISE. (a) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates (as defined under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an Election to Purchase hereunder will constitute a representation by the Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full number of Warrant Shares issuable in respect of such Election to Purchase does not violate the restrictions contained in this paragraph. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a merger, sale or other business combination or reclassification involving the Company as contemplated herein. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than 61 days' prior written notice to the Company. Other Holders shall be unaffected by any such waiver. (b) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an Election to Purchase hereunder will constitute a representation by the Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full number of Warrant Shares issuable in respect of such Election to Purchase does not violate the restrictions contained in this paragraph. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a merger, sale or other business combination or reclassification involving the Company as contemplated herein. (c) Notwithstanding paragraphs (a) and (b) of this Section 10, in the event that the Company shall determine that any Election to Purchase received hereunder would violate any limitation contained in paragraphs (a) and (b) of 7 this Section 10 (and, in the case of paragraph (a), such paragraph has not been waived by the subject Holder in accordance with the last sentence of such paragraph), the Company shall promptly notify the subject Holder thereof, and the Company shall not be obligated to issue Warrant Shares in an amount such as would cause any such limitation to be exceeded; and such Election to Purchase shall be deemed void AB INITIO to the extent of such excess Warrant Shares. 11. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares, which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing bid price of one Warrant Share as reported on the AMEX National Market (or other exchange or trading medium on which Warrant Shares are than listed or quoted) on the Date of Exercise. 12. NOTICES. Any and all notices or other communications or deliveries hereunder (including without limitation any Election to Purchase) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent for next Trading Day delivery by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Company, to 400 Post Ave, Suite 303, Westbury, NY 11590, Facsimile No: (516) 997-1144, Attn: Chief Financial Officer, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section. 13. WARRANT AGENT. The Company shall serve as warrant agent under this Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrants agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register. 14. MISCELLANEOUS. (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any person or entity other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their respective successors and assigns. 8 (b) Prior to the exercise of this Warrant as provided herein, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Warrant Shares or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to the stockholders at any meeting thereof, or to give or withhold consent to any corporate action or to receive notice of meetings, or to receive dividend or subscription rights. (c) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. (d) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. (e) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 9 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above. DHB INDUSTRIES INC. By: ___________________ Name: David Brooks Title: Chairman WITNESS By: ___________________ Name:Dawn Schlegel Title: Secretary 10 FORM OF ELECTION TO PURCHASE To by DHB Industries, Inc.: The undersigned is the Holder of Warrant No. 1075 (the "Warrant") issued by DHB Industries Inc., a Delaware corporation (the "Company"). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant. 1. The Warrant is currently exercisable to purchase a total of ______ Warrant Shares. 2. The undersigned Holder hereby exercises its rights with respect to _____ Warrant Shares pursuant to the Warrant ("Exercised Share Number"). 3. The Holder intends that payment of the Exercise Price shall be made as (check one): ____ "Cash Exercise" ____ "Cashless Exercise" (a) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $________ to the Company in accordance with the terms of the Warrant (equal to the Exercised Share Number multiplied by the Exercise Price of $7.69 per Warrant Share). (b) If the Holder has elected a Cashless Exercise, the average of the closing bid prices for the five Trading Days immediately prior to (but not including) the Date of Exercise equals: $ _____. 4. Number of shares of Common Stock to be issued to the Holder equals $7.69 (equal to Exercised Share Number if using Cash Exercise, or based on Cashless Exercise Formula per Section 9(b) of the Warrant). By its delivery of this Form of Election To Purchase, the Holder represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 11 of the Warrant to which this notice relates. The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of Marc Dien. Please print Dated: ______________ Name of Holder _____________________ Address ________________________________________________________________ Name_____________________ Title _______________ Social Security or Tax ID: Number____________________ Signature:__________________________________ 11 -----END PRIVACY-ENHANCED MESSAGE-----