Retention Letter Agreement
Exhibit 10.6
April 13, 2011
Xxxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
XxXxxx, XX 00000
0000 Xxxxxxxxx Xxxxx
XxXxxx, XX 00000
Dear Xxxxx,
The purpose of this letter agreement (this “Letter Agreement”) is to inform you that in
recognition of your contributions to the current and future value of Vangent Holding LLC and its
subsidiaries (collectively, the “Vangent Companies”), including, but not limited to, Vangent
Holding Corp. and Vangent, Inc., Vangent, Inc. will provide you with an enhanced retention benefit
under certain terminations of employment (as described below). You are one of a select number of
individuals receiving this benefit, and it is critical that you keep this Letter Agreement
confidential and not discuss it with any of your colleagues.
1. Enhanced Retention. In the event that your employment with the Vangent Companies
is terminated by them without Cause, or you resign from such employment for Good Reason, within the
twelve (12) month period following the closing date of any
“change in control”1,
Vangent, Inc. shall pay you, provided that you execute and deliver, within thirty (30) days
following the date of such termination or resignation (the “Separation Date”), to Vangent, Inc. a
valid release agreement substantially in the form attached as Exhibit A hereto (the “Release
Agreement”) and you have not revoked such Release Agreement within such 30-day period, (i)
continued payments of your annual base salary for a period of twelve (12) months following such
termination or resignation,
| 1 | For purposes of this Letter Agreement, the term “change
in control” means (i) any consolidation or merger of Vangent Holding Corp. or
Vangent, Inc. with or into any other entity or any other corporate
reorganization of Vangent Holding Corp. or Vangent, Inc., other than any such
transaction immediately following which the stockholders of Vangent Holding
Corp. or Vangent, Inc. immediately prior to such consolidation, merger or
reorganization are the beneficial owners (as such term is defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) of at least fifty percent (50%) in the aggregate of the total
voting power of all classes of capital stock of the resulting, surviving or
reorganized entity then outstanding and normally entitled to vote on the
election of directors; (ii) any transaction, or series of related transactions,
to which Vangent Holding Corp. or Vangent, Inc. is a party in which capital
stock of Vangent Holding Corp. or Vangent, Inc. constituting in excess of fifty
percent (50%) of the total voting power of all classes of capital stock of such
entity then outstanding and normally entitled to vote on the election of
directors is issued or sold to any “person” or “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) (excluding the Vangent Companies); or
(iii) the sale of all or substantially all of the assets of Vangent Holding
Corp. or Vangent, Inc. to any “person” or “group” (excluding the Vangent
Companies). |
0000 X. Xxxxxxx Xxxxx, Xxxxx 0000 • Xxxxxxxxx, XX • 22203 • 000-000-0000
• xxx.xxxxxxx.xxx
beginning
on the first payroll date that occurs forty-five (45) calendar days following the Separation Date, payable in accordance with Vangent,
Inc.’s regular payroll policy and (ii) an amount equal to the pro rata portion of your bonus under
the Vangent, Inc. Incentive Compensation Plan that would have been payable based on Vangent, Inc.’s
projected performance as of the Separation Date through the remainder of the calendar year, payable
on the first payroll date that occurs forty-five (45) calendar days following the Separation Date.
In the event of such termination or resignation, group health insurance coverage (including dental
and vision insurance benefits) shall continue through the end of the month following your last day
of employment, and, effective with the end of coverage, you will be eligible for continued medical
coverage (including dental and vision insurance benefits) under COBRA for a period of eighteen
months. In the event of such termination or resignation, if you elect medical coverage under
COBRA, Vangent, Inc. will pay, beginning forty-five days following the Separation Date, provided
that you execute and deliver to Vangent, Inc., within thirty (30) days following the Separation
Date, the Release Agreement and you have not revoked such Release Agreement within such 30-day
period, the standard employer’s portion of the premium (76%), in which case you will pay the
remaining portion (24%) of the premium. You will make premium payments for COBRA directly to the
COBRA administrator. Information about COBRA benefits and costs will be mailed from our COBRA
Administrator to your address on record within two weeks of your Separation Date. Payments that
would otherwise have been owed to you prior to the 45th day after the Separation Date shall be made
to you on the 45th day after the Separation Date.
For purposes of this Letter Agreement, (A) “Cause” means the occurrence of any of the
following: (i) the willful engagement by you in conduct that causes material harm to any of the
Vangent Companies, whether such harm is monetary or otherwise; (ii) your conviction or indictment
for a felony; (iii) your willful malfeasance or willful misconduct in connection with your duties
which is not cured, if curable, within thirty (30) days of your receipt of written notice; (iv)
your failure to comply with a material provision of any of the Vangent Companies’ policies or
procedures which is not cured, if curable, within thirty (30) days of your receipt of written
notice; or (v) your breach of any covenant set forth in Section 2 of this Letter Agreement which is
not cured, if curable, within thirty (30) days of your receipt of written notice; and (B) “Good
Reason” means the occurrence of any of the following (i) relocation of your primary place of
employment (defined as where you work at least an average of three days per week in the course of a
calendar year) more than 35 miles from your primary place of employment at the time of execution of
this Letter Agreement without your consent, (ii) any reduction in your current base salary or
target incentive compensation, unless such reduction is part of an across-the-board reduction of
senior management salaries, or (iii) a material diminution or change in your job duties or
responsibilities as they existed at the time of execution of this Letter Agreement, provided, that,
the Vangent Companies shall have thirty (30) days after receipt of notice from you in writing
specifying the deficiency that would result in Good Reason to cure such deficiency.
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2. Non-Compete & Non-Solicitation Restrictions.
(a) In consideration for the benefits provided herein, during your employment with any of the
Vangent Companies and for a period of twelve (12) months following the termination of your
employment with the Vangent Companies by them without Cause or your resignation from employment
with the Vangent Companies for Good Reason (such period of employment and the twelve-month period
immediately thereafter, the “Noncompetition Period”), you shall not directly or indirectly provide
the same services as you provide to any of the Vangent Companies or otherwise assist any person or
entity which engages or proposes to engage in (x) the government services business that is
competing for contracts either held by or actively being bid on by the Vangent Companies, at the
time of your termination of employment or resignation, provided, however, that the foregoing
restriction shall not apply if your employment is terminated for any reason (including, but not
limited to, your resignation) twelve (12) months following the closing date of any change in
control.
(b) In consideration for the benefits provided herein, you agree that, during the
Noncompetition Period, you shall not induce, attempt to induce, solicit or attempt to solicit (x)
any party who is a customer of any of the Vangent Companies as of the Separation Date, who was a
customer of any of the Vangent Companies at any time during the twelve (12) month period
immediately prior to the date on which your employment terminates, or who is a prospective customer
who has been identified and targeted by any of the Vangent Companies as of the Separation Date, to
terminate, reduce or alter negatively its relationship with such Vangent Companies, or in any
manner interfere with any agreement or contract between any of the Vangent Companies and such
party, for the purpose of marketing, selling or providing to any such party either (i) any services
or products offered by or available from any of the Vangent Companies as of the Separation Date or
(ii) any services or products which any of the Vangent Companies has plans to offer or make
available and has taken actions in furtherance of offering or making available and of which you
have knowledge, as of the Separation Date, or (y) any supplier to any Vangent Company to terminate,
reduce or alter negatively its relationship with any such Vangent Company or in any manner
interfere with any agreement or contract between any such Vangent Company and such supplier;
provided, however, that the term “customer” with respect to any agency, branch or instrumentality
of the United States Government, or with respect to any agency, branch or instrumentality of a
state or local government, is intended to cover the specific program offices or activities which
any of the Vangent Companies pursue or performs work for within such agency, branch or
instrumentality of the United States Government, or such state or local government, and not the
agency, branch or instrumentality as a whole. Notwithstanding anything contained herein to the
contrary, the foregoing restriction shall not apply if your employment is terminated for any reason
(including, but not limited to, your resignation) after the expiration of twelve (12) months
following the closing date of any change in control.
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(c) In consideration for the benefits provided herein, you agree that, during the
Noncompetition Period, you shall not (x) directly or indirectly, personally or through
others, encourage, induce, attempt to induce, solicit or attempt to solicit (on your own
behalf or on behalf of any other person) any Specified Employee, or any consultant to any Vangent
Company engaged in connection with the operations of the Company with a direct interaction with the
Company’s client and customers, to leave his or her employment with, or engagement by, the Vangent
Companies, or (y) hire a Specified Employee, or engage such consultant, provided, however, that the
foregoing restriction shall not apply in the event that the termination of your employment with any
of the Vangent Companies occurs subsequent to the twelve (12) month period following the closing
date of any change of control. For purposes of this Section 2, “Specified Employee” shall mean
any individual who is or was an employee of any of the Vangent Companies as of your date of
termination or during the 180-day period ending on your date of termination.
3. At-Will Employment. Nothing in this Letter Agreement should be construed as a
promise of employment for any particular time period. You are and remain an employee at will.
4. Confidentiality. You agree that the existence and provisions of this Letter
Agreement, and the details and/or existence of any potential transaction involving the Vangent
Companies, will be held in strictest confidence by you and will not be publicized or disclosed in
any manner whatsoever at any time prior to any change in control; provided however, that: (a) you
may disclose this Letter Agreement to your spouse, provided that you obtain assurances from him/her
that he/she will keep the provisions of this Letter Agreement in strictest confidence and will not
publicize or disclose its provisions in any manner whatsoever; (b) you may disclose this Letter
Agreement in confidence to your attorneys, accountants, auditors, tax preparers, and financial
advisors, if necessary; and (c) you may disclose this Letter Agreement insofar as such disclosure
may be necessary to enforce its terms or as otherwise required by law. If you breach the
obligations contained in this paragraph, you shall not be entitled to any monies or benefits that
would otherwise be payable to you pursuant to this Letter Agreement. Moreover, you shall be
required to immediately repay to Vangent, Inc. any monies or benefits that were previously paid to
you pursuant to this Letter Agreement.
5. Entire Agreement. This Letter Agreement contains the entire agreement between you
and Vangent, Inc. with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
6. Waiver and Amendments. This Letter Agreement may be amended, modified, superseded,
or canceled, and the terms and conditions hereof may be waived, only by a written instrument signed
by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or privilege hereunder.
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7. Compliance with Law. This Letter Agreement is intended to comply with the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and
other guidance of general applicability that are issued thereunder (collectively, “Section 409A”).
To the extent that any provision in this Letter Agreement is ambiguous as to its compliance with
Section 409A, the provision shall be read in such a manner so that all payments hereunder shall
comply with Section 409A.
8. Remedies. You hereby acknowledge and agree that your breach or threatened breach
of any of the restrictions set forth in Section 2 or 4 will result in irreparable and continuing
damage to the Vangent Companies for which there may be no adequate remedy at law and that the
Vangent Companies shall be entitled to seek equitable relief, including specific performance and
injunctive relief, as remedies for any such breach or threatened or attempted breach, without
requiring the posting of a bond. You hereby consent to the grant of an injunction (temporary or
otherwise) against you or the entry of any other court order against you prohibiting and enjoining
you from violating, or directing you to comply with any provision of Section 2 or 4, if such is
issued by a court of competent jurisdiction. You also agree that such remedies shall be in
addition to any and all remedies, including damages, available to the Vangent Companies for such
breaches or threatened breaches.
9. Severability. If any provision of this Letter Agreement is invalid or
unenforceable, the balance of this Letter Agreement shall remain in effect. You acknowledge that
the restrictive covenants contained in Section 2 is a condition of this Letter Agreement and are
reasonable and valid in temporal scope and in all other respects.
10. Governing Law and Venue. This Letter Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia without regard to conflicts of laws
principles thereof. The parties agree irrevocably to submit to the exclusive jurisdiction of the
federal courts or, if no federal jurisdiction exists, the state courts, located in the Commonwealth
of Virginia, for the purposes of any suit, action or other proceeding brought by any party arising
out of any breach of any of the provisions of this Letter Agreement and hereby waive, and agree not
to assert by way of motion, as a defense or otherwise, in any such suit, action, or proceeding, any
claim that it is not personally subject to the jurisdiction of the above-named courts, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action
or proceeding is improper, or that the provisions of this Letter Agreement may not be enforced in
or by such courts.
11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS, HIS OR HER
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER
AGREEMENT OR ANY DEALINGS BETWEEN OR AMONG ANY OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER
OF THIS LETTER AGREEMENT.
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12. Assignability by the Vangent Companies and the Employee. This Letter Agreement,
and the rights and obligations hereunder, may not be assigned by any Vangent Company without your
prior written consent and may not be assigned by you without the prior written consent of Vangent;
provided, however, that any Vangent Company may assign its rights and/or obligations described
herein to the successor or assignee of all or a substantial portion of its business.
13. Withholding. All payments by the Company described in this Letter Agreement will
be reduced by all taxes and other amounts that the Company is required to withhold under applicable
law.
14. Counterparts. This Letter Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same instrument.
This Letter Agreement or any counterpart hereto may be executed and delivered by facsimile copy,
which shall be deemed to be an original.
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Please acknowledge your understanding of and agreement to the provisions of this Letter Agreement
by signing, dating and returning a copy of this letter to me within seven (7) days of the date of
this Letter Agreement.
| Very truly yours, VANGENT, INC. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxx Xxxxxx | ||||
| President & CEO | ||||
AGREED TO AND ACCEPTED AS OF
THE DATE FIRST SET FORTH ABOVE:
THE DATE FIRST SET FORTH ABOVE:
EMPLOYEE:
/s/ Xxxxx X. Xxxxx
|
DATE: April 19, 2011
Exhibit A
Release Agreement
In consideration of the payments and other benefits set forth in the Retention Letter Agreement
dated
(the “Retention
Agreement”), to which this form is attached, I,
[ ], hereby furnish
Vangent Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).
I hereby release, and forever discharge the Company, The Veritas Capital Fund III, L.P. and each of
their officers, directors, agents, employees, stockholders, equityholders, successors, assigns,
affiliates and benefit plans, all of their past and present officers, directors, agents, and
insurers, in all capacities, including individually (all of which organizations and persons are
hereinafter collectively identified as the “Company Parties”), from any and all claims, demands,
actions, indemnities, liabilities, or obligations of whatever kind and nature, which I may have
had, may now have, or may hereafter claim to have through the date this Release and Waiver is
executed, whether known or unknown, contingent or otherwise, at law or in equity, including,
without limitation, with respect to any claims relating to my employment and the termination of my
employment, all compensation and benefits relating to my employment (including but not limited to,
claims for salary, bonuses, commissions, stock, stock options, vacation pay, fringe benefits,
severance pay or any form of compensation); any claim of discrimination based on my race, color,
religion, sex, national origin, or disability, if any; any claim that the Company Parties have
violated any federal, state or local statute, regulation, or ordinance, including, without
limitation, the Age discrimination in Employment Act, 29 U.S.C. § 621 et seq., Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 1981, the Employee Retirement Income Security Act of 1974,
the Family and Medical Leave Act; the Americans with Disabilities Act, 42 U.S.C. 12101 et seq., and
any claim that the Company Parties have wrongfully terminated my employment or breached any oral,
written, express, or implied employment agreement; any claim that the Company Parties have
intentionally or negligently inflicted emotional distress, mental anguish or humiliation on me; any
claim of the breach of any implied covenant of good faith and fair dealing; any claim of damages,
monetary or other personal relief, and/or attorney’s fees in any administrative and/or judicial
proceeding initiated by me, by any third party on my behalf, or by any governmental authority prior
to or following my execution of this Release and Waiver; any claim of libel, slander and/or
defamation of character; any retaliation, “whistleblower,” or public policy claim; and any other
claim of whatever kind not specifically identified in this Release and Waiver; provided, however,
that this release does not extend to and will not release the Company from any of its obligations
under the Retention Agreement.
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, at my expense, prior to executing this Release and Waiver (although I may
choose voluntarily not to do so); (c) I have twenty-one (21) days in which to consider this Release
and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I am
entitled to revoke my consent to this Release and Waiver within seven (7) days following the
execution of this Release by delivering written revocation notice to Vangent, Inc. 0000 X. Xxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxxx, XX. 22203 Attention: Chairman of the Board of Directors and (e) this
Release and Waiver shall not be effective until the seven (7) day revocation period has expired. If
I timely revoke this Release and Waiver after signing it, this Release and Wavier will become null
and void and the Company will have no obligation to provide me any of the consideration given for
this Release and Waiver.
Name:
