EXHIBIT 10.4
RETENTION AGREEMENT
This Agreement is made this 17th day of February, 2004, by and between
Sensytech, Inc., a Delaware corporation (the "Company"), and S. Xxxx Xxxxxxxx,
(the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change of Control (as defined below) exists and that
the threat or the occurrence of a Change of Control can result in significant
distraction of the Company's key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has determined that it is essential, and in the best
interest of the Company and its stockholders, for the Company to retain the
services of the Executive in the event of a threat, or the occurrence, of a
Change of Control and to ensure the Executive's continued dedication and efforts
in such event without undue concern for the Executive's personal financial and
employment security; and
WHEREAS, in order to induce the Executive to remain in the employ of the
Company in the event of a threat, or the occurrence, of a Change of Control, the
Company desires to enter into this Agreement with the Executive to provide the
Executive with certain benefits in the event of a Change of Control.
NOW, THEREFORE, the parties hereto, in consideration of the respective
agreements of the parties contained herein and intending to be legally bound,
agree as follows:
1. Term of Agreement. This Agreement shall commence as of February 17th,
2004 (the "Effective Date"), and shall continue in effect until January 1, 2005
(the "Term"); provided, however, that on January 1, 2005, and on each January 1
thereafter, the Term shall automatically be extended for one (1) year unless
either the Executive or the Company shall have given written notice to the other
at least ninety (90) days prior thereto that the Term shall not be so extended;
provided, further, however, that following the occurrence of a Change of
Control, the Term shall not expire prior to the expiration of at least
twenty-four (24) months after such event.
2. Payments. (a) If, during the Term, the Executive's employment with the
Company or its Affiliates shall be terminated within twenty-four (24) months
following a Change of Control, the Executive shall be entitled to the following
compensation and benefits:
i. within 60 days of the termination of his employment, he shall be paid an
amount equal to two (2) years of his base salary at the date of the Change of
Control; and
ii. for the next eighteen (18) months, the Company shall, at its expense,
continue on behalf of the Executive and his dependents and beneficiaries, the
life insurance, disability, medical, dental and hospitalization coverage and
benefits provided to the Executive immediately prior to the Change of Control.
The Company's obligation hereunder with respect to this subparagraph ii shall be
reduced to the extent that the Executive obtains coverage and benefits pursuant
to a subsequent employer's benefit plans, provided that the aggregate coverage
and
benefits of the combined benefit plans is no less favorable to the Executive
than the coverage and benefits required to be provided hereunder. In the event
such coverage and benefits may not be continued (or where such continuation
would adversely affect the tax status of the benefit plan pursuant to which the
coverage and benefits are provided) under applicable law or regulations, the
Company shall pay to the Executive the cash equivalent in lieu of such coverage
and benefits.
iii. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
and no such payment shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent employment except as
provided in subparagraph ii above.
(b) If the Executive is still employed by the Company twenty-four (24)
months after a Change in Control, he shall be paid on that date an amount equal
to two (2) years of his base salary at the date of the Change of Control.
3. Fees and Expenses. The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Executive as they become due as a result of the Executive seeking to obtain or
enforce any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Company under which the Executive is or may be
entitled to receive benefits.
4. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing, shall be
signed by the Executive, if to the Company, or by a duly authorized officer of
the Company, if to the Executive, and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage paid, addressed to the respective addresses given by each party to the
other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
5. Nature of Rights. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any Affiliate of
the Company and for which the Executive may qualify, nor shall anything herein
limit or reduce such rights or benefits the Executive may have under any other
agreements with the Company or any Affiliate of the Company. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any Affiliate of the Company shall be
payable in accordance with such plan or program.
6. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Company may have against the Executive or others. Notwithstanding the
foregoing, the Company need not make the payments provided for in this Agreement
if the
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Executive is terminated as a result of (a) conviction of a felony; (b) a
material violation of the Company's Code of Conduct; (c) a criminal conviction
involving a violation of the federal securities laws; (d) a judgment by a court
of competent jurisdiction in a case brought by the Securities and Exchange
Commission involving a violation of the federal securities laws; or (e) actions
by the Executive which demonstrate moral turpitude on his part.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or of an
obligation to comply with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party which are not
expressly set forth in this Agreement.
8. Successors: Binding Agreement.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns. The Company shall require its
successors and assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that it would be required to perform
this Agreement if no such succession or assignment had taken place.
(b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. The
Agreement shall inure to the benefit of and by enforceable by the Executive and
his heirs, executors and legal representatives.
9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Virginia.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto,
with respect to the subject matter hereof.
12. Definitions.
(a) Affiliate. For purposes of this Agreement, "Affiliate" means, with
respect to any person, any entity, directly or indirectly, controlled by,
controlling or under common control with such person.
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(b) "Beneficial Owner," "Beneficially Owned," and "Beneficially Owning"
shall have the same meanings as under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended.
(b) Change of Control. "Change of Control" shall mean any of the
following:
(i) the acquisition by any person of Beneficial Ownership of voting
securities of the Company, which when added to the voting securities of the
Company then Beneficially Owned by such person, would result in such person
Beneficially Owning 33% or more of the combined voting power of the Company's
then outstanding voting securities; provided, however, that for purposes of this
paragraph a person shall not be deemed to have an acquisition of voting
securities if such person: (A) acquires voting securities as a result of a stock
split, stock dividend or other corporate restructuring in which all stockholders
of the class of such voting securities are treated the same on a pro rata basis;
(B) acquires the voting securities directly from the Company; (C) is the
Company or any corporation or other person of which a majority of its voting
power or its equity securities or equity interest is owned directly or
indirectly by the Company (a "Controlled Entity"); or (D) acquires voting
securities in connection with a "Non.control Transaction" (as defined in
paragraph (c) below); or
(ii) the individuals who, as of the Effective Date, are members of the
Board (the "Incumbent Board") cease for any reason to constitute at least
two-thirds of the Board; provided, however, that if either the election of any
new director or the nomination for election of any new director by the Company's
stockholders was approved by a vote of at least two-thirds of the Incumbent
Board prior to such election or nomination, such new director shall be
considered as a member of the Incumbent Board; provided further, however, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under
the 0000 Xxx) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board (a "Proxy Contest"), including
by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(iii) approval, as required by the Delaware General Corporation Law, by
the stockholders of the Company of:
(A) a merger, consolidation or reorganization involving the
Company (a "Business Combination"), unless
(1) the stockholders of the Company immediately before the
Business Combination own, directly or indirectly, immediately following the
Business Combination at least a majority of the combined voting power of the
outstanding voting securities of the corporation resulting from the Business
Combination (the "Surviving Corporation") in substantially the same proportion
as their ownership of the voting securities of the Company immediately before
the Business Combination, and
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(2) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for the Business
Combination constitute at least a majority of the Board of Directors of the
Surviving Corporation, and
(3) no person (other than the Company or any Controlled
Entity, a trustee or other fiduciary holding securities under one or more
employee benefit plans or arrangements (or any trust forming a part thereof)
maintained by the Company, the Surviving Corporation or any Controlled Entity,
or any person who immediately prior to the Business Combination had Beneficial
Ownership of 33% or more of the then outstanding voting securities) has
Beneficial Ownership of 33% or more of the combined voting power of the
Surviving Corporation's then outstanding voting securities (a Business
Combination satisfying the conditions of clauses (1), (2) and (3) of this
subparagraph (A) shall be referred to as a "Non-control Transaction");
(B) a complete liquidation or dissolution of the Company; or
(C) the sale or other disposition of all or substantially all
of the assets of the Company (other than a transfer to a Controlled Entity).
Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because 33% or more of the outstanding voting securities of the
Company is Beneficially Owned by (x) a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Company or any Controlled Entity
or (y) any corporation which, immediately prior to its acquisition of such
interest, is owned, directly or indirectly, by the stockholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by one of its duly authorized officers, and the Executive has
personally executed this Agreement, all as of the date first written above.
SENSYTECH, INC. S. XXXX XXXXXXXX
By: /s/ S. XXXX XXXXXXXX /s/ S. XXXX XXXXXXXX
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Title: CEO
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