Exhibit 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is hereby entered into
effective as of November 1, 2001, between DynCorp, a Delaware corporation (the
"Company") and Xxxx X. Xxxxxxxx ("Executive").
In consideration of the mutual benefits derived from this Agreement
and of the agreements, covenants and provisions hereof, the parties hereto agree
as follows:
1. Employment
1.1. Position. During the Term (as hereinafter defined) of this Agreement,
and subject to the terms and conditions set forth herein, the Company
agrees to employ Executive as its President and Chief Executive
Officer reporting only to the Board of Directors of the Company.
1.2. Election to Office. During the Term of this Agreement, the Company
shall use its best efforts to sustain and continue Executive's
position and designation as President and Chief Executive Officer. In
addition, the Company will use its best efforts to cause the Executive
to continue to be nominated as a member of the Company's Board of
Directors.
1.3. Fulfillment of Duties. As long as the Company sustains and continues
Executive's position and designation as President and Chief Executive
Officer of the Company, Executive shall (i) devote his full-time
efforts during normal business hours to the performance of his
services hereunder, except during vacation periods and periods of
illness or incapacity, except that nothing in this Agreement shall
preclude Executive from devoting reasonable periods required for
serving as a director, or member of a committee of, or holding other
positions, in any organization involving no conflict of interest with
the interests of the Company and (ii) perform his services hereunder
faithfully, diligently and to the best of his skill and ability.
1.4. Location. During the Term of this Agreement, Executive will perform
his duties and services at the Company's Reston Virginia headquarters
or such location(s) as he shall deem appropriate, except that
Executive agrees to make such business trips to the Company's
principal executive offices and to other locations as may be
reasonable and necessary in the performance of his services hereunder.
2. Compensation And Benefits
2.1. Salary. In consideration of and as compensation for the services
agreed to be performed by Executive hereunder, the Company agrees to
pay Executive during the Term of this Agreement a base salary (the
"Base Salary") of not less than $475,000 per year, less standard
deductions and withholdings, payable bi- monthly in accordance with
the Company's regular payroll practices. The Company will review
Executive's Base Salary
and other compensation (including bonuses and incentive compensation)
from time to time during the Term of this Agreement and, at the
recommendation of the Compensation Committee of the Board of Directors
of the Company (the "Committee"), may increase his Base Salary or
other compensation (including incentive compensation) from time to
time, provided that Executive shall receive in March of each calendar
year during which this Agreement is in effect an annual Base Salary
increase equal to at least the average percentage salary escalation
used by the Company as an assumption in preparation of its most recent
corporate annual budget. Any increase in Base Salary or other
compensation (including incentive compensation) shall in no way limit
or reduce any other obligation of the Company hereunder and, once
established at an increased rate, Executive's Base Salary hereunder
shall not be reduced.
2.2. Incentive Compensation. During the Term of this Agreement, in
addition to the Base Salary provided in Section 2.1 above, Executive
shall be eligible to receive additional incentive compensation in an
amount not to exceed amounts prescribed in the Company's Executive
Incentive Compensation Plan ("EIP") using a target incentive
percentage of no less than 60% ("Incentive Compensation"); provided,
however, that so long as Executive has satisfied his equity ownership
requirements under the Company's Equity Target Ownership Policy in
effect as of the date hereof, no portion of his Incentive Compensation
shall be paid in shares of the Company unless the Executive requests
the delivery of such shares. The Executive shall also be entitled to
the benefits of any modifications or amendments to such Plan adopted
after the effective date hereof that enhance benefits payable under
the Plan.
2.3. Other Benefits. Executive will be entitled to the Benefits listed on
Exhibit A, and any other benefits adopted after the effective date of
this Agreement for the benefit of executives of the Company in
compensation Bands 3 or 2; provided that no additional benefits shall
in any way limit or detract from the benefits described on Exhibit A.
3. Term
3.1. Term. The term of employment under this Agreement means the period
commencing on November 1, 2001 and expiring at midnight on October 31,
2004; provided, that this Agreement will automatically renew for
additional periods of one (1) year each commencing on November 1 of
each successive year following the initial Term unless written notice
of intent not to renew is delivered by the Company to the Executive at
least 90 days prior to the effective date of any renewal hereof. The
term of this Agreement shall continue through the Term of employment
and through the period of consulting described in Section 4.3.1
hereof.
3.2. Termination Of Employment
3.2.1. Termination By the Company. Executive's employment with the Company
may be terminated under the following conditions:
3.2.1.1. Death or Disability. Executive's employment with the
Company shall terminate effective upon the date of
Executive's death or "Complete Disability" (as defined in
Section 5.1).
3.2.1.2. For Cause. The Company may terminate Executive's
employment under this Agreement for "Cause" (as defined in
Section 5.2) by delivery of written notice to Executive
specifying the Cause or Causes relied upon for such
termination. Any notice of termination given pursuant to
this Section 3.2.1.2 shall effect termination as of the
future date specified in such notice or, in the event no
such date is specified, on the last day of the month in
which such notice is delivered or deemed delivered as
provided in Section 10.3 below.
3.2.1.3. Without Cause. The Company may terminate Executive's
employment under this Agreement at any time and for any
reason by delivery of ninety (90) days written notice of
such termination to Executive. Any notice of termination
given pursuant to this Section 3.2.1.3 shall take effect
as of the end of such 90-day period.
3.2.2. Termination By Executive for Good Cause. Executive may
terminate Executive's employment with the Company for Good Cause
as defined below upon thirty (30) days written notice to the
Company.
3.2.3. Termination by Mutual Agreement of the Parties. Executive's
employment pursuant to this Agreement may be terminated at any
time upon a mutual agreement in writing of the Parties. Any such
termination of employment shall have the consequences specified
in such agreement.
4. Compensation Upon Termination.
4.1. Death or Complete Disability. If Executive's employment shall be
terminated by death or Complete Disability, Executive (or his heirs or
legal representative) shall be entitled to Executive's Base Salary and
accrued and unused vacation earned through the 30th day following the
date of termination, subject to standard deductions and withholdings.
In addition, upon Executive's (or his heirs or legal representative)
furnishing to the Company an executed waiver and release of claims (a
form of which is attached hereto as Exhibit B, which will be revised
for signature by Executive's heirs or legal representative if
applicable), Executive (or his heirs or legal representative) shall be
entitled to:
4.1.1. a pro rated portion of his Incentive Compensation that would be
payable to the Executive based on projected Company performance
through the termination date, less standard deductions and
withholdings;
4.1.2. exercise any options to purchase stock (common or otherwise) in
the Company granted to Executive pursuant to any plan, agreement
or otherwise, or any equivalent or similar rights which
appreciate or tend to appreciate as the value of the
Company's stock appreciates, such options and rights to be in
accordance with the terms of any applicable plan or agreement;
provided, however, that the Executive or his estate or legal
representative shall have a period of 90 days following the date
of termination within which to exercise or satisfy all such
options or rights; and
4.1.3. in the event Executive (or his heirs or legal representative)
elects continued coverage under COBRA, reimbursement to the
Executive (or his heirs or legal representative) for the same
portion of Executive's COBRA health insurance premium that it
paid during Executive's employment until the last day of
Executive's COBRA health insurance benefits.
4.2. Termination for Cause or Resignation or Retirement by Executive. If
Executive's employment shall be terminated by the Company for Cause or
if Executive resigns (other than for Good Cause) or elects Retirement,
the Company shall pay Executive's accrued Base Salary and accrued and
unused vacation benefits earned through the 30th day following the
date of termination at the rate in effect at the time of the notice of
termination to Executive or Executive's notice of resignation or
Retirement to the Company. In addition, in the event of the
Executive's Retirement only, upon Executive's (or his heirs or legal
representative') furnishing to the Company an executed waiver and
release of claims (a form of which is attached hereto as Exhibit B,
which will be revised for signature by Executive's heirs or legal
representative if applicable), Executive (or his heirs or legal
representative) shall be entitled to:
4.2.1. a pro rated portion of his Incentive Compensation that would be
payable to the Executive based on projected Company performance
through the termination date, less standard deductions and
withholdings;
4.2.2. exercise any options to purchase stock (common or otherwise) in
the Company granted to Executive pursuant to any plan, agreement
or otherwise, or any equivalent or similar rights which
appreciate or tend to appreciate as the value of the Company's
stock appreciates, such options and rights to be in accordance
with the terms of any applicable plan or agreement; provided,
however, that the Executive or his estate or legal representative
shall have a period of 90 days following the date of termination
within which to exercise or satisfy all such options or rights;
and
4.2.3. such protections as are afforded under COBRA.
4.3. Termination Without Cause. If the Company terminates Executive's
employment without Cause (except under any circumstance in which
Section 4.1 is applicable to Executive, in which case this Section 4.3
shall not apply), or if the Executive terminates this Agreement for
Good Cause, Executive shall be entitled to Executive's Base Salary and
a pro rated portion of his Incentive Compensation that would be
payable to the Executive based on projected Company performance
through the 30th day following the termination date, less standard
deductions and withholdings, and accrued and unused vacation earned
through the date of termination, subject to standard deductions and
withholdings. In addition, upon Executive's furnishing to the Company
an executed
copy of the waiver and release of claims (a form of which is attached
hereto as Exhibit B), Executive shall be entitled to:
4.3.1. five (5) semi annual payments, the first of which shall be made
within 5 days of the termination of the Executive's employment
with the Company, and thereafter at the end of each of the next 4
successive 6-month periods, in the amount of $75,000 each
(increased by 4% per annum for each 12-month or period or portion
thereof that transpires between the effective date of this
Agreement and the date such initial payment is made), without
withholding or deduction; provided that such payments shall be in
consideration of the Executive providing consulting services to
the Company as an independent contractor for no more than 30
months for up to 150 hours per six month period, such services to
be consistent with the Executive's past service with the Company,
as requested by the President of the Company; provided further,
however, that in the event of the death or Complete Disability of
the Executive at any time during the period of such payments, the
Executive or his estate or legal representative shall be entitled
to receive within 10 days of death or Complete Disability, an
amount equal to 50% of the balance of such payments remaining to
be paid;
4.3.2. exercise any options to purchase stock (common or otherwise) in
the Company granted to Executive pursuant to any plan or
otherwise, or any equivalent or similar rights which appreciate
or tend to appreciate as the value of the Company's stock
appreciates, such options and rights to be in accordance with the
terms of any applicable plan or agreement; provided, however,
that the Executive or his estate or legal representative shall
have a period of 90 days following the date of termination within
which to exercise or satisfy all such options or rights; and
4.3.3. in the event Executive elects continued coverage under COBRA,
reimbursement to the Executive for the same portion of
Executive's COBRA health insurance premium that it paid during
Executive's employment up until the earlier of either (i) the
last day of Executive's COBRA health insurance benefits or, ii)
the date on which Executive becomes covered under any other group
health plan (as an employee or otherwise).
4.3.4. Continuation of such other group life, accident and long and
short-term disability benefits as are in effect as of the
termination date for a period of 36-months following termination.
5. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
5.1. Complete Disability. "Complete Disability" shall mean the inability
of Executive to perform Executive's duties under this Agreement
because Executive has become permanently disabled within the meaning
of any policy of disability income insurance covering employees of the
Company then in force. In the event the Company has no
policy of disability income insurance covering employees of the
Company in force when Executive becomes disabled, the term "Complete
Disability" shall mean the inability of Executive to perform
Executive's duties under this Agreement by reason of any incapacity,
physical or mental, which the Board, based upon medical advice or an
opinion provided by a licensed physician acceptable to the Board,
determines to have incapacitated Executive from satisfactorily
performing all of Executive's usual services for the Company for a
period of at least one hundred twenty (120) days during any twelve
(12) month period (whether or not consecutive). Based upon such
medical advice or opinion, the determination of the Board shall be
final and binding and the date such determination is made shall be the
date of such Complete Disability for purposes of this Agreement.
5.2. For Cause. "For Cause" shall mean:
5.2.1. the willful and continued failure by Executive to substantially
perform his duties with the Company in good faith (other than any
such failure resulting from his incapacity due to physical or
mental illness, injury or disability), after a demand for
substantial performance is delivered to him by the Board of
Directors of the Company which identifies, in reasonable detail,
the manner in which the Board of Directors believes that
Executive has not substantially performed his duties in good
faith;
5.2.2. the willful engaging by Executive in conduct which causes
material harm to the Company, monetarily or otherwise; or
5.2.3. Executive's conviction of a felony arising from conduct during
the Term of this Agreement.
5.2.4. For purposes of this Subsection 5.2 no act, or failure to act, on
Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best
interest of the Company or its shareholders. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated
for Cause unless and until there shall have been delivered to him
a copy of a resolution duly adopted by the affirmative vote of
two-thirds (2/3) of the directors then occupying a seat on the
Board of Directors at a meeting of the Board of Directors called
and held for such purpose (after ten days notice to him and an
opportunity for him, together with his counsel, to appear before
the Board of Directors), finding that Executive was guilty of
conduct described in Sections 5.2.1, 5.2.2, and 5.2.3 , and
setting forth, in reasonable detail, the basis for such finding.
5.3. Change of Control. "Change of Control" shall mean: (i) a sale or
other disposition of all or substantially all of the assets of the
Company; (ii) a merger or consolidation in which the Company is not
the surviving entity and in which the shareholders of the Company
immediately prior to such consolidation or merger own less than fifty
percent (50%) of the surviving entity's voting power immediately after
the transaction; (iii) a reverse
merger in which the Company is the surviving entity but the shares
of the Company's Common Stock outstanding immediately preceding
the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, and in
which the shareholders of the Company immediately prior to such
merger own less than fifty percent (50%) of the Company's voting power
immediately after the transaction; (iv) any other capital
reorganization in which more than fifty percent (50%) of the shares
of the Company entitled to vote are exchanged; or (v) during any
period of two consecutive years (not including periods prior to the
effective date of this Agreement), individuals who at the beginning of
such period constitute the board and any new directors whose election
by the board or nomination for election by the stockholders was
approved by at least 2/3rds of the members of the board, cease for any
reason to constitute a majority thereof.
5.4. Good Cause. "Good Cause" shall mean any of the following actions
taken by the Company or any subsidiary that employs the Executive: a
breach of this Agreement, assignment of the Executive to duties that
are inconsistent with his status as a senior executive or which
represent a diminution of his status in the Company, a reduction in
Executive's Base Salary, except in connection with an across-the-board
salary reduction for all executives, a failure by the Company to pay
any of Executive's compensation in accordance with Company policy, a
reduction in or elimination of any of the benefits described on
Exhibit A or otherwise granted to Executive, the relocation of the
Executive to a location more than 40 miles from Reston Virginia
without Executive's consent, change of Executive's title, a failure to
comply with the obligations of the Company under Section 1.2 hereof,
or the failure of a successor to the Company to confirm in writing
within 5 days of its succession its obligation to assume and perform
all obligations of this Agreement.
5.5. Annual Base Compensation. "Annual Base Compensation" shall mean the
total of the Executive's most recent annual salary, target incentive
under the Company's Executive Incentive Plan, and the annualized
amount of all other fringe benefits provided to the Executive with the
exception of stock options and other stock-based incentive awards.
5.6. Retirement. "Retirement" shall mean the voluntary retirement of the
Executive from the Company (a) at or after age 62 or (b) at any time
after the combination of the Executive's age and service with the
company or any predecessor or subsidiary equals or exceeds 75 years.
6. Change of Control
6.1. In the event a Change of Control occurs, and (a) the Company
terminates Executive's employment without Cause pursuant to Section
3.2.1.3 hereof, or (b) the Executive terminates his employment for
Good Cause pursuant to Section 3.2.2 within three (3) months prior to
or within three years following, the effective date of a Change of
Control of the Company, then Executive, in addition to all other
amounts payable hereunder, will be entitled to a lump sum payment
equivalent to the Executive's Annual Base Compensation in effect at
the time of the Change of Control, less standard deductions
and withholdings (the "Change of Control Benefit Package"). No payment
under 6.1 b above shall be made until the transaction causing a Change
of Control has occurred.
6.2. In the event that the Change of Control Benefit Package or any part
thereof provided for in this Agreement, or any amount otherwise
payable to the Executive under this Agreement or otherwise, constitute
"parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and will be
subject to the excise tax imposed by Section 4999 of the Code, then
Executive shall receive (i) a payment from the Company sufficient to
pay such excise tax, and (ii) an additional payment from the Company
sufficient to pay the income, employment, excise and any other taxes
arising from the payments made by the Company to or for the benefit of
Executive pursuant to Section 6.1 above and this Section 6.2 so that
Executive shall be fully reimbursed for any excise tax and any taxes
associated with the payments to reimburse Executive for such excise
tax. Unless the Company and Executive otherwise agree in writing, the
determination of Executive's excise tax liability and the amount
required to be paid under this Section 6.2 shall be made in writing by
a nationally recognized accounting firm satisfactory to both parties
(the "Accountants"). In the event that the excise tax incurred by
Executive is determined by the Internal Revenue Service to be greater
or lesser than the amount so determined by the Accountants, the
Company and Executive agree to promptly make such additional payment,
including interest and any tax penalties, to the other party as the
Accountants reasonably determine is appropriate to ensure that the net
economic effect to Executive under this Section 6.2, on an after-tax
basis, is as if the Code Section 4999 excise tax did not apply to
Executive. For purposes of making the calculations required by this
Section 6.2 the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on
interpretations of the Code for which there is a "substantial
authority" tax reporting position. The Company and Executive shall
furnish to the Accountants such information and documents the
Accountants may reasonably request in order to make a determination
under this Section 6.2. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 6.2.
6.3. Upon the occurrence of a Change of Control, all unvested options or
other stock based incentives that have been awarded to the Executive
shall become immediately vested so that all such options and
incentives shall become fully vested under the terms of the plans
under which they were issued.
7. Non-Competition And Confidentiality
7.1. Non-Competition. During Executive's employment by the Company
hereunder and during the period during for which Executive is
receiving consulting payments from the Company pursuant to Section
4.3.1 herein:
7.1.1. Executive will not directly compete with the business of the
Company or any of its subsidiaries or any non-controlled
affiliate against which it is precluded from competing (the
"Company or its Affiliates") so as to cause the Company or its
Affiliates to lose material revenue from any client contract or
pending client proposal which is in existence on the date of
termination of Executive's employment. For purposes of this
Section 7.1.1, "material revenue" shall be deemed to mean revenue
that is more than .1% of the revenue of the entity against which
improper competition is alleged.
7.1.2. Executive will not directly or indirectly employ or solicit for
employment any person whom he knows to be a supervisory or
management employee of the Company or its Affiliates without the
written consent of the employer.
7.2. In consideration of the covenant described in Section 7.1, the Company
agrees to pay the Executive the amount of $1,120,000 (increased by 4%
per annum for each 12-month period or portion thereof that transpires
between the effective date of this Agreement and the date of
termination), which shall be payable in full within 5 days of the
delivery of the Release described in Section 4.3 hereof. In the event
of a breach of such covenant by the Executive, damages, if any
recoverable by the Company, shall be limited to an amount equal to the
amount of the above covenant payment times a fraction the numerator of
which shall be the number of months remaining to be performed under
the Consulting Agreement described in Section 4.3.1 hereof at the time
of the breach, and the denominator of which shall be 30.
8. Confidential Information.
8.1. Executive agrees that as a condition of employment and the consulting
arrangement described in Section 4.3.1, he will execute and abide by
the Company's Proprietary Information & Inventions Agreement, attached
hereto as Exhibit C.
9. Remedies
9.1. Injunctive Relief. Executive acknowledges and agrees that the
covenants and obligations contained in Sections 7.1 and 8 relate to
special, unique and extraordinary matters and that a violation of any
of the terms of such sections will cause the Company irreparable
injury for which adequate remedy at law is not available. Therefore,
Executive agrees that the Company shall be entitled to an injunction,
restraining order, or other equitable relief from any court of
competent jurisdiction, restraining Executive from committing any
violation of the covenants and obligations set forth in Sections 7.1
and 8 hereof.
9.2. Remedies Cumulative. The Company's rights and remedies under Section
7.1 hereof are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
9.3. Any and all disputes arising under this Agreement or concerning its
formation, implementation or interpretation, or rights hereunder,
shall be resolved through binding arbitration under the rules of the
American Arbitration Association ("AAA"). Such arbitration shall be
conducted in Washington, D.C., or at such other location as the
parties shall mutually approve. The single arbitrator shall be
selected by the parties from the AAA's list of approved arbitrators;
provided that if no arbitrator is selected within 15 days from the
date arbitration is first requested hereunder, the AAA shall appoint
the arbitrator. No arbitrator shall have had any prior connection or
dealing of any nature with either of the parties. Subject to the
obligation of the Company under paragraph 12 of Exhibit A hereto, the
parties shall each bear their own expenses and the Company shall pay
the entire cost of the arbitrator and any AAA costs. The decision of
the arbitrator shall be final and binding on the parties hereto, and
shall not be subject to review or appeal before any court or tribunal;
provided, that the award of the arbitrator shall be enforceable in any
court of competent jurisdiction.
10. Miscellaneous
10.1. Indemnification. The Company agrees at all times during the term
of this Agreement and the consulting period described in Section 4.3.1
hereof, and thereafter, to indemnify, defend and hold the Executive,
his heirs, estate and legal representatives harmless from, any and all
claims, liabilities, demands, allegations, causes of action, or other
threats, related to or in any way arising out of, the services
provided by the Executive under this Agreement or at the request of
the Company; provided, however, that this indemnification shall not
apply to acts or omissions that are the result of conduct that would
preclude the Executive from receiving indemnification under Section
145 of the Delaware Corporation Laws Annotated in effect as of the
date hereof, subject to such future changes as may be beneficial to
the Executive. Upon receipt of notice of the assertion of any such
claim, liability, demand, allegation, cause of action or other threat,
the Company shall pay the Executive the cost of his defense by a
counsel acceptable to Executive, and shall be responsible for the full
payment of any judgement including damages or penalties, including
punitive damages or penalties, that may be assessed or payable as a
result of a settlement to which the Company and the Executive consent,
including the deductible portion of any loss covered by Director and
Officer Liability Insurance. Nothing herein shall limit the rights of
the Executive to the protections afforded by the Company's Directors
and Officers Liability Insurance described in Exhibit A hereto.
10.2. Compliance with Company Policies. During the term of this Agreement,
the Executive shall at all times comply with all applicable Company
policies and procedures, including the Company's Standards of Business
Ethics and Conduct.
10.3. Notices. Any written notice, required or permitted under this
Agreement, shall be deemed sufficiently given if either hand delivered
or if sent by fax or overnight courier. Written notices must be
delivered to the receiving party at his or its address on the
signature page of this Agreement. The parties may change the address
at which written notices are to be received in accordance with this
section.
10.4. Assignment. Executive may not assign, transfer, or delegate his rights
or obligations hereunder and any attempt to do so shall be void. This
Agreement shall be binding upon and shall inure to the benefit of the
Company and its successors and assigns and the term
Company as used herein shall include such successors and assigns
to the extent applicable. In the event any successor to the Company
fails to honor the terms of this Agreement, Executive shall be
entitled to all benefits described in Sections 4.3, 6 and 7 hereof
subject to Executive's compliance with all the obligations applicable
to him under such Sections.
10.5. Entire Agreement. This Agreement, including Exhibits A, B & C,
contains the entire agreement of the parties with respect to the
subject matter hereof, and all other prior agreements, written or
oral, including that certain Change of Control Agreement dated June 1,
1995, are hereby superceded and are of no further force or effect;
provided, however, that any and all prior agreements concerning the
granting of stock options, or other forms of stock compensation under
the Company's Long Term Incentive Stock Plan, all agreements
pertaining to the Company's Supplemental Executive Retirement Plan,
and all other agreements concerning past or present pension,
retirement, savings, insurance or other agreements related to the
benefits described on Exhibit A hereto, shall continue in full force
and effect in accordance with their terms. This Agreement may be
modified or amended only by a written agreement that is signed by the
Company and Executive. No waiver of any section or provision of this
Agreement will be valid unless such waiver is in writing and signed by
the party against whom enforcement of the waiver is sought. The
waiver by the Company of any section or provision of this Agreement
shall not apply to any subsequent breach of this Agreement. Captions
to the various sections in this Agreement are for the convenience of
the parties only and shall not affect the meaning or interpretation of
this Agreement. This Agreement may be executed in several counter-
parts, each of which shall be deemed an original, but together they
shall constitute one and the same instrument.
10.6. Severability. The provisions of this Agreement shall be deemed
severable, and if any part of any provision is held illegal, void, or
invalid under applicable law such provision may be changed to the
extent reasonably necessary to make the provision, as so changed,
legal, valid and binding. If any provision of this Agreement is held
illegal, void, or invalid in its entirety, the remaining provisions of
this Agreement shall not in any way be affected or impaired but shall
remain binding in accordance with their terms.
10.7. Continuing Obligations. Sections 8, 9, and 10 of this Agreement shall
continue and survive the termination of this Agreement.
10.8. Applicable Law. This Agreement and the rights and obligations of the
Company and Executive thereunder shall be governed by and construed
and enforced under the laws of the Commonwealth of Virginia applicable
to agreements made and to be performed entirely within such State,
without regard to Virginia's conflict of laws rules.
[Signature Page Follows]
In Witness Whereof, the parties have executed this Agreement
effective as of the date first above written.
DynCorp
By: __/S/ Xxxxx X. Reichardt______________
Xxxxx X. Xxxxxxxxx
Senior Vice President
Executive
By: __/S/ Xxxx X. Lombardi_______________
Xxxx X. Xxxxxxxx
EXHIBIT A
Benefits for Executive's Employment Agreement
1. Group Term and Life Insurance no less favorable to the Executive than
that offered by the Company as of the Effective Date.
2. Specialty insurance (such as kidnap and xxxxxx and company travel
insurance) under which Executive was covered proceeding the Term of the
Agreement.
3. Standard medical plan options no less favorable to the Executive than
that offered by the Company as of the Effective Date.
4. Vacation in accordance with the Company's Personal Time Off Policy.
5. Standard Company holidays plus two floating holidays.
6. Standard short and long term disability insurance no less favorable to
the Executive than that offered by the Company to the Executive as of
the Effective Date.
7. Executive Incentive Compensation plan with terms no less favorable to
the Executive than the Plan in effect as of the Effective Date.
8. Director & Officer Liability Insurance as maintained by the Company for
the protection of the members of its Board of Directors.
9. Annual physical examination (to the extent no reimbursed by group
health coverage.)
10. Thrift savings (401(k), Employee Stock Purchase and salary deferral
(KESOP) Plan) with terms no less favorable to the Executive than the
present Savings and Retirement Plan and KEYSOP.
11. The Supplemental Executive Retirement Plan, as amended effective June
1, 2001.
12. Up to $100,000 in attorneys fees in the event of a dispute under the
Agreement; provided that such amount will be subject to reimbursement
to the Company in the event the Company prevails in any dispute with
the Executive.
13. Eligibility for participation in company sponsored stock option and
incentive plans, on such terms are made available to Band 3 personnel.
14. Access to the DynCorp Internal Stock Market for so long as the
Executive owns shares of common stock of the Company or options
therefor, and so long as the Company sponsors such Market.
EXHIBIT B
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in
Section 4 of the Employment Agreement dated November 1, 2001, to which this form
is attached, I, Xxxx X. Xxxxxxxx, hereby furnish DynCorp (the "Company"), with
the following release and waiver ("Release and Waiver").
I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns affiliates and
benefit plans, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising at any time prior
to and including my employment termination date with respect to any claims
relating to my employment and the termination of my employment, including but
not limited to, claims pursuant to any federal, state or local law relating to
employment, including, but not limited to, discrimination claims under Virginia
law, and the Federal Age Discrimination in Employment Act of 1967, as amended
("ADEA"), or claims for wrongful termination, breach of the covenant of good
faith, contract claims, tort claims, and wage or benefit claims, including but
not limited to, claims for salary, bonuses, commissions, stock, stock options,
vacation pay, fringe benefits, severance pay or any form of compensation;
provided, however, that this release does not extend to and will not release the
Company from any of its obligations under the Employment Contract, or Exhibits
A, C and D thereof.
I acknowledge that, among other rights, I am waiving and releasing
any rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an Executive of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted
herein does not relate to claims which may arise after this Release and Waiver
is executed; (b) I have the right to consult with an attorney prior to executing
this Release and Waiver (although I may choose voluntarily not to do so); and if
I am over 40 years of age upon execution of this Release and Waiver: (c) I have
twenty-one (21) days from the date of termination of my employment with the
Company in which to consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier); (d) I have seven (7)
days following the execution of this Release and Waiver to revoke my consent to
this Release and Waiver; and (e) this Release and Waiver shall not be effective
until the seven (7) day revocation period has expired.
EXHIBIT C
DynCorp
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by DynCorp
(the "Company"), the compensation and benefits provided to me in the Employment
Agreement to which this Proprietary Information and Inventions Agreement is
attached, and the compensation hereafter paid to me as a consultant to the
Company, I, Xxxx X. Xxxxxxxx, hereby agree as follows:
1. Nondisclosure
1.1 Recognition of Company's Rights; Nondisclosure. At
all times during my employment and thereafter, I will hold in strictest
confidence and will not disclose, use, lecture upon or publish any of the
Company's Proprietary Information (defined below), except as such disclosure,
use or publication may be required in connection with my work for the Company,
or unless an officer of the Company expressly authorizes such in writing. I will
obtain Company's written approval before publishing or submitting for
publication any material (written, verbal, or otherwise) that relates to my work
at Company and incorporates any Proprietary Information. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information and
recognize that all Proprietary Information shall be the sole property of the
Company and its assigns.
1.2 Proprietary Information. The term "Proprietary
Information" shall mean any and all confidential and/or proprietary knowledge,
data or information of the Company that is not generally known to the public or
publicly disclosed by the Company. By way of illustration but not limitation,
"Proprietary Information" includes (a) trade secrets, inventions, mask works,
ideas, processes, formulas, source and object codes, data, programs, other works
of authorship, know-how, improvements, discoveries, developments, designs and
techniques (hereinafter collectively referred to as "Inventions"); and (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry, which
is not gained as result of a breach of this Agreement, and my own, skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.
1.3 Third Party Information. I understand, in addition,
that the Company has received and in the future will receive from third parties
confidential or proprietary information ("Third Party Information") subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the
term of my employment and thereafter, I will hold Third Party Information in the
strictest confidence in accordance with the terms and conditions of disclosure
to the Company, and will not disclose to anyone (other than Company personnel
who need to know such information in connection with their work for the Company)
or use, except in connection with my work for the Company, Third Party
Information unless expressly authorized by an officer of the Company in writing.
1.4 No Improper Use of Information of Prior Employers and
Others. During my employment by the Company I will not improperly use or
disclose any confidential information or trade secrets, if any, of any former
employer or any other person to whom I have an obligation of confidentiality,
and I will not bring onto the premises of the Company any unpublished documents
or any property belonging to any former employer or any other person to whom I
have an obligation of confidentiality unless consented to in writing by that
former employer or person. I will use in the performance of my duties only
information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.
2. Assignment of Inventions.
2.1 Proprietary Rights. The term "Proprietary Rights"
shall mean all trade secret, patent, copyright, mask work and other intellectual
property rights throughout the world.
2.2 Prior Inventions. Inventions, if any, patented or
unpatented, which I made prior to the commencement of my employment with the
Company are excluded from the scope of this Agreement. To preclude any possible
uncertainty, I have set forth on Exhibit C-2 (Previous Inventions) attached
hereto a complete list of all Inventions that I have, alone or jointly with
others, conceived, developed or reduced to practice or caused to be conceived,
developed or reduced to practice prior to the commencement of my employment with
the Company, that I consider to be my property or the property of third parties
and that I wish to have excluded from the scope of this Agreement (collectively
referred to as "Prior Inventions"). If disclosure of any such Prior Invention
would cause me to violate any prior confidentiality agreement, I understand that
I am not to list such Prior Inventions in Exhibit C-2 but am only to disclose a
cursory name for each such invention, a listing of the party(ies) to whom it
belongs and the fact that full disclosure as to such inventions has not been
made for that reason. A space is provided on Exhibit C-2 for such purpose. If no
such disclosure is attached, I represent that there are no Prior Inventions.
2.3 Assignment of Inventions. Subject to Sections 2.4
and 2.6, I hereby assign and agree to assign in the future (when any such
Inventions or Proprietary Rights are first reduced to practice or first fixed in
a tangible medium, as applicable) to the Company all my right, title and
interest in and to any and all Inventions (and all Proprietary Rights with
respect thereto) whether or not patentable or registrable under copyright or
similar statutes, made or conceived or reduced to practice or learned by me,
either alone or jointly with others, during the period of my employment with the
Company (but not during any period of consultancy thereafter). Inventions
assigned to the Company, or to a third party as directed by the Company pursuant
to this Section 2, are hereinafter referred to as "Company Inventions".
2.4 Obligation to Keep Company Informed. During the
period of my employment and for six (6) months after termination of my
employment with the Company, I will promptly disclose to the Company fully and
in writing all Inventions authored, conceived or reduced to practice by me,
either alone or jointly with others, during the period of my employment. In
addition, I will promptly disclose to the Company in confidence all patent
applications filed by me or on my behalf within a year after termination of
employment.
2.5 Government or Third Party. I also agree to assign all
my right, title and interest in and to any particular Company Invention to a
third party, including without limitation the United States, as directed by the
Company.
2.6 Works for Hire. I acknowledge that all original works
of authorship which are made by me (solely or jointly with others) within the
scope of my employment and which are protectable by copyright are "works made
for hire", pursuant to United States Copyright Act (17 U.S.C., Section 101).
2.7 Enforcement of Proprietary Rights. I will assist the
Company in every proper way to obtain, and from time to time enforce, United
States and foreign Proprietary Rights relating to Company Inventions in any and
all countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.
3. Records. I agree to keep and maintain adequate and current
records (in the form of notes, sketches, drawings and in any other form that may
be required by the Company) of all Proprietary Information developed by me and
all Inventions made by me during the period of my employment at the Company,
which records shall be available to and remain the sole property of the Company
at all times.
4. Additional Activities. I agree further that for the period of my
employment by the Company and for one (l) year after the date of termination of
my employment by the Company I will not induce any management or supervisory
employee of the Company to leave the employ of the Company. 5. No Conflicting
Obligation. I represent that my performance of all the terms of this Agreement
and as an Executive of the Company does not and will not breach any agreement to
keep in confidence information acquired by me in confidence or in trust prior to
my employment by the Company. I have not entered into, and I agree I will not
enter into, any agreement either written or oral in conflict herewith.
6. Return of Company Documents. When I leave the employ of the
Company, I will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices,
formulas, and documents, together with all copies thereof, and any other
material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any
property situated on the Company's premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company's termination statement.
7. Legal and Equitable Remedies. Because my services are personal
and unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any
other rights and remedies that the Company may have for a breach of this
Agreement, provided that such enforcement shall be in accordance with the
procedures set forth in Section 10.1 below
8. Notices. Any notices required or permitted hereunder shall be
given to the appropriate party at the address specified below or at such other
address as the Party shall specify in writing. Such notice shall be deemed given
upon personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.
9. Notification of New Employer. In the event that I leave the
employ of the Company, I hereby consent to the notification of my new employer
of my rights and obligations under this Agreement.
10. General Provisions.
10.1 Governing Law; Consent to Personal Jurisdiction.
This Agreement will be governed by and construed according to the laws of the
Commonwealth of Virginia, as such laws are applied to agreements entered into
and to be performed entirely within Virginia between Virginia residents. I
hereby expressly consent to the personal jurisdiction of the state and federal
courts located in Alexandria or Fairfax County, Virginia for any lawsuit filed
there against me by Company arising from or related to this Agreement.
10.2 Severability. In case any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.
10.3 Successors and Assigns. This Agreement will be
binding upon my heirs or legal representative, executors, administrators and
other legal representatives and will be for the benefit of the Company, its
successors, and its assigns.
10.4 Survival. The provisions of this Agreement shall
survive the termination of my employment and the assignment of this Agreement by
the Company to any successor in interest or other assignee.
10.5 Waiver. No waiver by the Company of any breach of
this Agreement shall be a waiver of any preceding or succeeding breach. No
waiver by the Company of any right under this Agreement shall be construed as a
waiver of any other right. The Company shall not be required to give notice to
enforce strict adherence to all terms of this Agreement.
10.6 Entire Agreement. The obligations pursuant to
Sections 1 and 2 of this Agreement shall apply to any time during which I was
previously employed, or am in the future employed, by the Company as a
consultant if no other agreement governs nondisclosure and assignment of
inventions during such period. This Agreement is the final, complete and
exclusive agreement of the Parties with respect to the subject matter hereof and
supersedes and merges all prior discussions between us and is the governing
document to the extent this Agreement conflicts with the Employment Agreement to
which it is attached as Exhibit C. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the Party to be charged. Any subsequent change
or changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.
This Agreement shall be effective as of November 1, 2001.
I have read this Agreement carefully and understand its terms. I
have nothing to disclose on Exhibit C-1 to this Agreement.
By: __/S/ Xxxx X. Lombardi___________
Xxxx X. Xxxxxxxx
Accepted and Agreed To:
DynCorp
By: __/S/ Xxxxx X. Reichardt_________
Xxxxx X. Xxxxxxxxx
Vice President and General Counsel
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