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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
AGREEMENT dated as of May 29, 1998 between SPACE APPLICATIONS
CORPORATION ("Employer") and XXXXX X. XXXXXXX ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer has been acquired in a reverse triangular merger
transaction by Xxxxxx Xxxxx & Associates, Inc. ("SM&A");
WHEREAS, Employee was the Chief Executive Officer and a major
shareholder of Employer immediately prior to such acquisition;
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. Employment.
The Employer hereby employs Employee, and Employee hereby agrees to
serve, as Executive Transition Advisor or in such other comparable executive
position as shall be assigned to Employee by Employer's Board of Directors, for
the period hereinafter defined. Employee agrees to perform services related to
the transition consistent with such office concerning the Acquisition and as
shall from time to time be assigned to Employee by Employer's Board of Directors
relating to such transition and, in the absence of such assignment, such
services customary to such office as are necessary to the operations of
Employer. The employment hereunder is not contemplated to be full time, but on
an as needed basis to assist with the transition of Employer within the SM&A
organization.
2. Term of Employment.
The employment hereunder shall be for the period (the "Term of
Employment") which shall commence on the date hereof and shall end on the first
anniversary of the date set forth above, unless earlier terminated (a) upon
death of Employee, (b) at the option of Employer, upon 20 days' prior written
notice to Employee, in the event of the inability of Employee to perform his
duties hereunder, whether by reason of injury (physical or mental), illness or
otherwise, incapacitating Employee for a continuous period exceeding 180 days of
(c) upon the discharge of Employee by the Board of Directors of Employer for
"cause" as defined herein. For purposes of this Agreement, an event or
occurrence constituting "cause" shall mean:
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(i) Employee's willful failure or refusal after notice
thereof, to perform specific directives of the Board of Directors of
Employer, when such directives are consistent with the scope and nature
of Employee's duties and responsibilities as set forth in Section 1
hereof;
(ii) Dishonesty of Employee materially and adversely
affecting Employer;
(iii) Drunkenness or use of drugs which interferes with the
performance of Employee's duties and responsibilities under this
Agreement, continuing after warning;
(iv) Employee's conviction of a felony or of any crime
involving moral turpitude, fraud or misrepresentation;
(v) Any gross or willful conduct of Employee resulting in
substantial loss of Employer, substantial damage to Employer's
reputation or theft or defalcation from Employer;
(vi) Gross incompetence on the part of Employee in the
performance of the duties and responsibilities under this Agreement; and
(vii) Any material breach (not covered by any of the clauses
(i) through (vi)) of any of the provisions of this Agreement if such
breach is not cured within 10 days after written notice thereof to
Employee by Employer or, if not curable within 10 days, if Employee has
taken material steps to cure within such 10 day period and such cure
occurs within 30 days of such breach.
In addition, upon the expiration of the Term of Employment, Employer
shall have the option, in its sole and absolute discretion, to retain Employee
as a consultant to Employee for an additional one year period, on terms and
conditions to be agreed upon by the parties at such time. Employee has no duty
or obligation to mitigate damages and no sums earned by Employee from other
employment shall offset the obligation of Employer hereunder.
3. Compensation.
(a) Base Salary. As compensation for services hereunder and in
consideration of his agreement not to compete as set forth in Section 4, during
the Term of Employment Employer shall pay Employee an annual salary of $150,000
which shall be payable in appropriate installments to conform with the regular
payroll dates for salaried personnel of Employer.
(b) Other Benefits. The fringe benefits, perquisites, and other benefits
of employment enjoyed by Employee during the year prior to the execution of this
Agreement will continue during the Term of Employment.
(c) Payment Upon Early Termination. In the event of early termination of
employment for any reason specified in Section 2(a), (b) or (c) hereof, Employer
shall no longer be obligated to make any salary payments of any kind whatsoever
to Employee or Employee's
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estate. However, any salary payments earned but not yet made shall be made by
Employer to Employee or Employee's estate. Upon and after termination of
employment for whatever reason specified in Section 2 hereof, Employee shall be
entitled to such benefits other than salary payments to which Employee has
become entitled under the terms of any plan or program referred to in this
Section 3.
4. Covenant Not to Compete; Intellectual Property; Confidentiality.
(a) Covenant Not to Compete. During the Term of Employment and for one
year thereafter, Employee will not, within any jurisdiction in which Employer or
any of its affiliates is duly qualified to do business, or within any marketing
area in which Employer or any of its affiliates is doing business, directly or
indirectly own, manage, operate, control, be employed by or participate in the
ownership, management, operation or control of, or be connected in any manner
with, any business in the area of "competitive procurements", such being the
business currently conducted by Space Applications Corporation as of the date of
this Agreement. For these purposes, Employee's ownership of securities of public
company not in excess of 1% of any class of such securities shall not be
considered to be competition with Employer.
For a period of twelve (12) months after termination of Employee's
employment with Employer, Employee agrees to refrain from interfering with the
employment relationship between Employer and its other employees by soliciting
any of such individuals to participate in independent business ventures and
agrees to refrain from soliciting business from any client or prospective client
of Employer for Employee's benefit or for any entity in which Employee has an
interest or is employed.
It is the desire and intent of the parties that the provisions of this
Section 4(a) shall be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If any particular provisions or portion of this Section 4(a) shall be
adjudicated to be invalid or unenforceable, this Section 4(a) shall be deemed
amended to delete therefrom such provision or portion adjudicated to be invalid
or unenforceable, such amendment to apply only with respect to the operation of
this Section 4(a) in the particular jurisdiction in which such adjudication is
made.
(b) Intellectual Property. During the Term of Employment, Employee will
disclose to Employer all ideas, inventions and business plans developed by
Employee during such period which relate directly or indirectly to the business
of Employer or affiliates, including without limitation any process, operation,
product or improvement which may be patentable or copyrightable. Employee agrees
that such will be the property of Employer and that Employee will at Employer's
request and cost do whatever is necessary to secure the rights thereto by
patent, copyright or otherwise to Employer.
(c) Confidentiality. Employee agrees that Employee will not divulge to
anyone (other than Employer or any persons employed or designated by Employer)
any knowledge or information of any type whatsoever of a confidential nature
relating to the business of Employer or any of its subsidiaries or affiliates,
including without limitation all types of trade secrets (unless readily
ascertainable from public or published information or trade sources). Employee
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further agrees not to disclose, publish or make use of any such knowledge or
information of a confidential nature without the prior written consent of
Employer unless required by law.
5. Reimbursement of Expenses.
Employee shall be entitled to be reimbursed for reasonable travel and
other expenses incurred in connection with Employee's services to Employer
pursuant to and during the term of this Agreement upon a basis consistent with
the policies of the Company, including, without limitation, commute expenses to
the Newport Beach offices of Employer's parent, Xxxxxx Xxxxx & Associates, Inc.
from Employee's residence within Southern California.
6. Breach By Employee.
Both parties recognize that the services to be rendered under this
Agreement by Employee are special, unique and extraordinary in character, and
that in the event of the breach by Employee of the terms and conditions of this
Agreement to be performed by Employee, or in the event Employee performs
services for any person, firm, corporation or other entity engaged in a
competing line of business with Employer, the Employer shall be entitled, if it
so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement, or to enforce the specific performance thereof by Employee, or
to enjoin Employee from performing services for any such other person, firm,
corporation or other entity. No breach by or termination of Employee hereunder
shall affect Employee's rights under any agreement respecting the merger
referred to in the introduction to this Agreement.
7. Assignment.
This Agreement is a personal contract and, except as specifically set
forth herein, the rights and interests of Employee herein may not be sold,
transferred, assigned, pledged or hypothecated. The rights and obligations of
Employer hereunder shall be binding upon and run in favor of the successors and
assigns of Employer provided that Employer not assign this Agreement without
Employee's written consent. In the event of any attempted assignment or transfer
of rights hereunder by Employee contrary to the provisions hereof, Employer
shall have no further liability for payments hereunder.
8. Governing Law; Captions.
This Agreement contains the entire agreement between the parties and
shall be governed by the law of the State of California. It may not be changed
orally, but only by agreement in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought, and
consented to in writing by each of the parties hereto. Section headings are for
convenience of reference only and shall not be considered a part of this
Agreement.
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9. Prior Employment Agreements.
This Agreement supersedes and terminates all prior agreements between
the parties relating to the subject matter herein addressed including that
certain Employment Agreement by and between Employer and Employee dated
_________ which, as of the date hereof, is of no further force or effect.
10. Notices.
Any notice or other communication required or permitted hereunder shall
be sufficiently given if delivered in person or sent by telex, telecopy or by
registered or certified mail, postage prepaid, in the case of Employee,
addressed as follows:
Xxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxxxxxxx, Xxxxx & Xxxxxx, LLP
0000 Xxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
and,
in the case of Employer, addressed to it as follows:
Space Applications Corporation
c/o Xxxxxx Xxxxx & Associates, Inc.,
0000 XxxXxxxxx Xxxxxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Operating Officer
with a copy to:
Xxxxx & Xxxxxx
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
or such other address or number as shall be furnished in writing by either party
to the other, and such notice or communication shall be deemed to have been
given as of the date so delivered, sent by telecopier, telex or mailed.
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IN WITNESS WHEREOF, Employer has by its appropriate officer signed this
Agreement and Employee has signed this Agreement, on and as of the day and year
first above written.
EMPLOYER: SPACE APPLICATIONS CORPORATION,
a California corporation
By: /s/ XXXXXXX X. XXXXXXXX
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Its: President
EMPLOYEE: /s/ XXXXX X. XXXXXXX
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XXXXX X. XXXXXXX
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