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EXHIBIT 10.17
SM&A CORPORATION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
, 2000, by and between SM&A CORPORATION, a California corporation
("SM&A"), and XXXXXX X. XXXXX ("Employee"), with reference to the following:
A. SM&A desires to employ Employee on the terms and conditions set forth
herein;
B. Employee desires to perform services for SM&A as an employee of SM&A
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration for the promises and obligations set
forth below, SM&A and Employee agree as follows:
1. Employment and Term.
1.1 SM&A agrees to employ, and Employee agrees to be employed by SM&A,
on the terms and conditions described below (the "Employment").
1.2 This Agreement shall be effective as of February 1, 2000 (the
"Effective Date") and shall, unless sooner terminated pursuant to the terms set
forth below, terminate on January 31, 2003.
2. Duties.
2.1 Employee agrees that during the Employment, Employee shall devote
his full-time efforts to his duties as an employee of SM&A, now or in the future
assigned to Employee by SM&A. From and after the date of this Agreement,
Employee shall serve as Chief Executive Officer and Chairman of the Board of
SM&A. The parties further acknowledge that the Employee is ultimately
responsible to the Board of Directors of SM&A. Employee agrees to continue to
serve without additional compensation, if, from time to time he is elected or
appointed thereto, in one or more offices as a Director or member of any
committee of the Board of Directors of SM&A or of any direct or indirect
subsidiary of SM&A.
3. Compensation.
3.1 As consideration for said performance and duties of adherence to the
covenants in this Agreement, Employee shall be entitled to the compensation set
forth on Exhibit A attached hereto and incorporated herein by this reference
(the "Compensation").
3.2 Employee understands and acknowledges that, except as otherwise set
forth in this Agreement, the Compensation will constitute the full and exclusive
consideration to be received by Employee for all services performed by Employee
in connection with SM&A's employment of Employee, and for the performance of all
his promises and obligations under this Agreement.
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3.3 Aside from the Compensation, SM&A may adopt, or continue in force,
benefit plans for the benefit of its employees or certain of its employees which
may include, but not be limited to, group life insurance, medical insurance,
etc. SM&A may terminate any or all such plans at any time and may choose not to
adopt any additional or replacement plans. Employee's rights under any benefit
plans now in force or later adopted by SM&A shall be governed solely by the
terms of such plans; provided, however, that in no event shall Employee's rights
under any such benefit plans be less than those of any other executive officer
SM&A.
4. Duty to Devote Full Time and Avoid Conflict of Interest. Employee agrees
that during the Employment he shall devote his full-time efforts to his duties
as an employee of SM&A. Employee further agrees that during the Employment he
shall not, directly or indirectly, engage or participate in any activities which
are in conflict with the best interests of SM&A.
5. Compliance with Rules and Regulations. Employee agrees to comply with
SM&A's rules, regulations and practices, including but not limited to those
rules concerning vacation and sick leave, as they may from time to time be
adopted or modified, so long as they are uniformly applied to all employees.
6. Non-competition and Non-solicitation by Employee.
6.1 Employee agrees that, during the Employment, Employee will not
engage in any activity competitive with or adverse to SM&A's business or
welfare, whether alone, as a partner, or as an officer, director, employee or
shareholder of any other corporation and shall not otherwise undertake planning
for or the organization of any business activity competitive with SM&A's
business or combine or conspire with other employees or representatives of SM&A
for the purpose of organizing any such competitive business activity. This
prohibition shall not include ownership of less than five percent (5%) of the
outstanding stock by Employee in a publicly traded corporation.
6.2 For a period of two (2) years following the termination of the
Employment, Employee shall not induce, solicit or influence or attempt to
induce, solicit or influence any person who is engaged as an employee or
otherwise by SM&A or any client of SM&A, to terminate his or her employment or
other engagement with SM&A.
7. Trade Secrets of SM&A. Employee acknowledges and understands that during
the Employment, Employee will have access to and will utilize and review
information which constitutes valuable, important and confidential trade
secrets, as that term is interpreted under the Uniform Trade Secrets Act
(California Civil Code Section 3426 et seq.) and/or confidential and proprietary
material and information of or relating to the business of SM&A necessary for
the successful conduct of SM&A's business. This information includes, but is not
limited to: (a) listings of and data regarding the Clients (past and current);
(b) information regarding potential customers and clients; (c) data relating to
the identity of the Clients of SM&A; (d) information regarding bidding, billing
and pricing practices; (e) information regarding the nature and type of services
rendered to the Clients; (f) other methodologies, computer programs, databases,
processes, compilations of information, results of proposals, job notes, reports
and records, and (g) information regarding the nature and type of software
products sold to or under development with Clients of SM&A (all of which
information is sometimes referred to in this Agreement as
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the "Secrets"). The foregoing notwithstanding, Secrets shall not include
information or data which is (i) in the public domain, (ii) generally known in
the information technology staffing services industry, (iii) already known to
Employee as of the date he began his employment with SM&A, or (iv) rightfully
disclosed to Employee outside of the scope of his employment with SM&A by a
third party not under a duty of confidentiality to SM&A. Employee understands
further that the Secrets have been and will be accumulated, by Employee and
other personnel at SM&A at considerable expense to SM&A (including but not
limited to compensation paid to SM&A personnel dealing with the Secrets and the
Clients), and that SM&A has and will continue to expend its resources in order
to maintain actively and vigorously the confidentiality of the Secrets, as such
information is extremely valuable to SM&A, and well worth the expense of
enforcement and preservation of such confidentiality. Accordingly, Employee
agrees as follows:
(a) All of the Secrets shall be safeguarded and treated as
confidential by Employee.
(b) Any and all data, notes, letters, computer programs, email
records, reports, telephone records and all other written documentation
relating to the business of SM&A (including but not limited to the
Secrets) that may be collected, compiled, written, reviewed or conceived
by Employee, whether set forth in tangible media or intangible, from or
by reason of services performed by Employee for SM&A shall become the
absolute property of SM&A, and Employee shall not assert or establish a
claim for any statutory or common law right or any other possessory or
proprietary right with respect to any of the above. The foregoing
notwithstanding, upon the termination of the Employment, Employee may
(i) at his own expense, make and retain copies of records pertaining to
investment banking contacts (including analysts and mergers and
acquisitions), commercial banking contacts, independent public
accounting contacts, legal contacts or other contacts in the investment
community (buy-side and sell-side) to the extent that such records do
not constitute trade secrets of SM&A and (ii) retain closing binders for
financings and acquisitions previously furnished to him; provided,
however, that Employee shall ensure that SM&A retains a copy of all such
records and closing binders; and provided further, that Employee shall
be obligated to maintain the information contained in any closing binder
retained by him as confidential to the extent that such information
constitutes Secrets.
(c) Employee shall hold the Secrets in strictest confidence and
shall not (i) disclose any Secrets to any person, corporation, firm, or
other entity, either during the Employment or afterward, or (ii) use any
Secrets in Employee's subsequent business or employment, without the
prior express written authorization of SM&A; provided, however, that
Employee may disclose Secrets to the extent required to do so by a
subpoena lawfully issued in a judicial proceeding or arbitration.
(d) Employee shall not otherwise commit any act which shall
compromise the confidentiality of any Secrets, including but not limited
to making a copy of such property (whether electronic, paper or
otherwise) without the prior express written authorization of SM&A,
except as permitted by Section 7(b) above.
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8. Confidential Information of Clients. All ideas, concepts, information
and written material disclosed to Employee by SM&A, or acquired from any of the
Clients, and all financial, accounting, statistical, personnel, and business
data and plans of the Clients, are and shall remain the sole and exclusive
property and proprietary information of SM&A, or said Client, and are disclosed
in confidence by SM&A or permitted to be acquired from the Clients in reliance
on Employee's agreement to maintain them in confidence and not to use or
disclose them to any other person except in furtherance of SM&A's business.
9. Return of Information. At the time of the termination of the Employment,
except as permitted by Section 7(b) above, Employee agrees to deliver promptly
to SM&A all notes, books, electronic data (regardless of storage media),
correspondence and other written or graphical records (including all copies
thereof) in Employee's possession or under Employee's control relating to any
business, work, the Clients or any other aspect of SM&A, whether or not
containing any Secrets, including but not limited to each original and all
copies of all or any part thereof.
10. Cooperation. Employee agrees that, both during the Employment and
afterward, he will sign all papers, give evidence and testimony and, at SM&A's
expense, perform all acts which, in SM&A's opinion, are necessary, proper or
expedient to carry out and fulfill the purposes and intents of this Agreement.
11. Remedies; Injunctive Relief. In the event of a breach or threatened
breach by Employee of any of the provisions of this Agreement, Employee agrees
that SM&A, in addition to and not in limitation of any other rights, remedies,
or damages available to SM&A at law or in equity, shall be entitled to a
preliminary and a permanent injunction in order to prevent or restrain any such
breach by Employee or by Employee's partners, agents, representatives, servants,
employers, employees, and/or any and all persons directly or indirectly acting
for or with Employee.
12. Termination of Employment.
12.1 The Employment may be terminated by SM&A at any time with "Cause"
(as defined below). Except as otherwise agreed in writing or as otherwise
provided by this Agreement as due and payable (or as required by law), upon
termination of the Employment by SM&A with Cause, SM&A shall have no further
obligation to Employee under this Agreement by way of compensation or otherwise,
but Employee's duties under Sections 6 through 10, inclusive, shall continue
after said termination of Employment. Notwithstanding the foregoing, to the
extent the grounds for any proposed termination with Cause are capable of being
cured or remedied by Employee, SM&A shall not terminate Employee with Cause
unless the representative of the Board of Directors of SM&A has first counseled
Employee as to how he could effect such cure or remedy and Employee is given at
least thirty (30) days to do so. A determination of whether Employee has
satisfactorily effected such cure or remedy shall be promptly made by a majority
of the disinterested (i.e., not the Employee) directors of the Board of
Directors at the end of the period provided to Employee for such cure or remedy
and such determination shall be final.
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12.2 The Employment may be terminated at any time (i) by SM&A without
Cause (as defined below) by giving Employee thirty (30) days' advance written
notice of such termination or (ii) by Employee for Good Reason (as defined
below) by giving SM&A thirty (30) days' advance written notice of such
termination. In the event that SM&A terminates the Employment without Cause, or
Employee terminates the Employment for Good Reason, SM&A shall (i) pay to
Employee the base salary of the Compensation, (ii) provide the same health and
life insurance benefits, and (iii) pay the lease payments with respect to the
automobile lease described in Exhibit A attached hereto, in each case until the
earlier to occur of (A) the last day of the term of this Agreement specified in
Section 1.2 above, (B) the expiration of twelve (12) calendar months after the
effective date of such termination of the Employment, (C) the date upon which
Employee becomes employed on a full-time basis (including but not limited to
self-employment, but only if Employee holds himself out to the public as being a
self-employed consultant or other businessman), or (D) the date upon which
Employee violates any of Sections 6 through 10, inclusive. In addition, SM&A
shall pay Employee the pro-rated Incentive Bonus described in Exhibit A attached
hereto to which Employee was entitled during the Employment (which proration
shall be based on a fraction, the numerator of which is the number of calendar
days during the fiscal year during which Employee was employed prior to the
effective date of the termination of the Employment and the denominator of which
is 365). If SM&A's medical and/or life insurance plans do not allow Employee's
continued participation in such plan or plans during the period described above,
then SM&A shall pay to Employee, in monthly installments, from the date on which
Employee's participation in such medical and/or life insurance, as applicable,
is prohibited for the remainder of the time period described in the second
sentence of this Section 12.2, the monthly premium or premiums which had been
payable by SM&A with respect to Employee for such discontinued medical and/or
life insurance, as applicable.
12.3 Employee may terminate the Employment without Good Reason at any
time by giving SM&A thirty (30) days' advance written notice of such
termination. Upon Employee's termination of the Employment without Good Reason,
SM&A shall have no further obligation to Employee under this Agreement by way of
compensation or otherwise (except for the obligation to pay the Compensation to
which Employee may be entitled at the time of such termination), but Employee's
duties under Sections 6 through 10, inclusive, shall continue after said
termination of the Employment.
12.4 The Employment will terminate immediately upon Employee's death. In
such event, SM&A shall (i) pay to Employee's estate the base salary and family
health benefits components of the Compensation until the earlier to occur of (A)
the last day of the term of this Agreement specified in Section 1.2 above or (B)
the expiration of twelve (12) calendar months after the effective date of such
termination. In addition, SM&A shall pay to Employee's estate the pro-rated
Incentive Bonus described in Exhibit A attached hereto to which Employee was
entitled during the Employment (which proration shall be based on a fraction,
the numerator of which is the number of calendar days during the fiscal year
during which Employee was employed prior to his death and the denominator of
which is 365). Except for the payments expressly provided in this Section 12.4,
SM&A shall have no further obligation to Employee's estate under this Agreement
by way of compensation or otherwise.
12.5 SM&A may terminate the Employment at any time if Employee becomes
Disabled (as defined below) by giving Employee thirty (30) days' advance written
notice of such
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termination. In the event that SM&A terminates the Employment because Employee
has become Disabled, SM&A shall (i) pay to Employee the base salary of the
Compensation and (ii) provide the same health and life insurance benefits, in
each case until the earlier to occur of (A) the last day of the term of this
Agreement specified in Section 1.2 above, (B) the expiration of twelve (12)
calendar months after the effective date of such termination of the Employment,
(C) the date upon which Employee becomes employed on a full-time basis
(including but not limited to self-employment, but only if Employee holds
himself out to the public as being a self-employed consultant or other
businessman), or (D) the date upon which Employee violates any of Sections 6
through 10, inclusive. In addition, SM&A shall pay Employee the pro-rated
Incentive Bonus described in Exhibit A attached hereto to which Employee was
entitled during the Employment (which proration shall be based on a fraction,
the numerator of which is the number of calendar days during the fiscal year
during which Employee was employed prior to the effective date of the
termination of the Employment and the denominator of which is 365). If SM&A's
medical and/or life insurance plans do not allow Employee's continued
participation in such plan or plans during the period described above, then SM&A
shall pay to Employee, in monthly installments, from the date on which
Employee's participation in such medical and/or life insurance, as applicable,
is prohibited for the remainder of the time period described in the second
sentence of this Section 12.5, the monthly premium or premiums which had been
payable by SM&A with respect to Employee for such discontinued medical and/or
life insurance, as applicable.
12.6 As used in this Agreement, the following terms shall have the
meanings indicated:
(a) "Cause" shall mean an action or actions by Employee during
the Employment (including but not limited to inactions) which constitute
either (i) gross insubordination, gross negligence, unethical or
criminal behavior constituting a felony under federal or state law and
which involves moral turpitude, or a breach of fiduciary duty of
Employee as an officer and/or director of SM&A, or (ii) a violation of
any of Sections 4 through 10, inclusive.
(b) "Disabled" shall mean Employee's ability to perform his
duties under this Agreement is impaired, due to sickness, physical or
mental impairment or injury, by more than twenty-five (25%) for a period
of six (6) consecutive months or for nine (9) months in any consecutive
twelve (12) month period. In the event Employee disputes SM&A's
determination that he is Disabled, Employee shall give written notice of
such dispute to SM&A during the thirty (30) day notice period prior to
the proposed effective date of such termination, and Employee and SM&A
shall thereupon each select, within thirty (30) days of such notice from
Employee, a physician to evaluate whether Employee is Disabled. Such
physicians shall complete their evaluation and report to the Board of
Directors within thirty (30) days. If such physicians do not agree as to
whether Employee is Disabled, they shall promptly select a third
physician to further evaluate Employee, whose conclusion on such matter
shall be rendered within ten (10) days of his or her selection and shall
be final and binding on Employee and SM&A.
(c) "Good Reason" shall mean any of the following:
(i) (A) the assignment to Employee of duties inconsistent
with Employee's current position, duties, or responsibilities
which is sufficient to
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constitute a diminution of status with SM&A, (B) a material
change in Employee's titles or offices or diminution of reporting
relationships (such that Employee is reporting to Company
personnel other than the Board of Directors) adverse to Employee,
or (C) any removal of Employee from or any failure to reelect
Employee to any of his positions as a senior officer of SM&A,
except, in any such case, with Employee's consent or in
connection with the termination of his employment for disability,
retirement (at age 70), death or resignation (other than
resignation for Good Reason), provided, however, that Good Reason
shall not include the assignment to Employee of any duties or
responsibilities of one or more management positions within his
competence to the extent that any such position is not filled at
any time and it is necessary to perform the duties and
responsibilities of such position pending the hiring of a person
to hold such position, provided that any such assignment does not
exceed six (6) months, and provided that SM&A is actively seeking
to fill such position during the period of such assignment;
(ii) a purported reduction by SM&A in the Compensation in
effect on the date hereof or as the same may be increased from
time to time during the term of this Agreement or any failure by
SM&A to reimburse Employee or provide the benefits set forth in
Exhibit A;
(iii) any material failure by SM&A to continue in effect
any significant and material benefit plan or arrangement
(including, without limitation, SM&A's incentive bonus plan,
profit sharing plan, stock option plans, medical insurance plans,
disability insurance plans, life insurance plans or vacation pay
plans, with such generally applicable amendments thereto as may
be approved from time to time in good faith by SM&A's Board of
Directors) in which Employee is participating or other plans
providing Employee with substantially similar benefits
(collectively, the "Benefit Plans"), or any action by SM&A which
would materially and adversely affect Employee's participation in
or materially reduce Employee's benefits under any Benefit Plan;
(iv) a relocation of the office to which Employee is
required to report to a location outside of a twenty-five (25)
mile radius of the then existing SM&A corporate headquarters, or
a requirement that Employee relocate his residence from Irvine,
California;
(v) any failure by SM&A to obtain the assumption of this
Agreement by any successor or assign of SM&A, if such successor
or assigns asserts the position that it is not bound by the
provisions hereof,
(vi) any failure by SM&A to comply with any material
provision of this Agreement; or
(vii) a failure to provide support services, staff, office
space and accouterments necessary to perform any duties assigned
to Employee or a material reduction in the level of support
services and staff, office space or
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accouterments made available to Employee, unless such reduction
is generally effective for all other officers of equal rank or
junior to Employee; provided, however, that no such action shall
be considered to constitute Good Reason unless and until Employee
has given SM&A written notice of, and thirty (30) days'
opportunity to cure or remedy the specific action which Employee
alleges would constitute Good Reason if not so cured or remedied
and SM&A has failed to effect such cure or remedy.
12.7 The rights and remedies provided in this Section 12 shall
constitute the exclusive rights and remedies available to Employee relating to
or arising from the termination of the Employment, including claims for breach
of contract; provided, however, that Employee shall be entitled to pursue any
and all available legal remedies based on any claim that such termination
constituted a violation of applicable federal or state law.
12.8 No policies or procedures of SM&A or benefits provided by SM&A,
whether oral or written, express or implied, formal or informal, are intended,
nor shall they be construed to limit the right or ability of SM&A or Employee to
terminate the Employment as set forth above. Except as otherwise agreed in
writing or as otherwise provided by this Agreement, upon termination of the
Employment, neither SM&A nor Employee shall have any further obligation to each
other by way of compensation or otherwise.
12.9 SM&A will require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of SM&A, by agreement in form
and substance reasonably satisfactory to Employee, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner
and to the same extent that SM&A would be required to perform this Agreement if
no such succession or assignment had taken place. In any such event, the term
"SM&A" as used in this Agreement shall mean any such successor or assign which
executes and delivers the agreement provided for in the immediately preceding
sentence or which otherwise becomes bound by the terms and provisions of this
Agreement by operation of law.
12.10 Employee shall make a reasonable good faith effort to find new
employment during any period during which payments are paid to Employee
following Employee's termination of employment with SM&A. Except as expressly
provided herein, no payment or benefit provided for under this Agreement shall
be reduced by any compensation earned by Employee as the result of employment by
another employer after the date of termination with SM&A. Except as expressly
provided herein, the provisions of this Agreement, and any payment or benefit
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish Employee's existing rights, or rights which would accrue solely
as a result of the passage of time, under any SM&A benefit plan, employment
agreement or other contract, plan or arrangement. Except as required in
connection with the determinations contemplated by Section 12.6, the amount of
any payment provided under this Agreement shall not be reduced by reason of any
present value calculation.
13. Change of Control of SM&A. Notwithstanding anything to the contrary in
any Stock Option Agreement or Incentive Stock Option Agreement previously
entered into by SM&A and Employee, upon the occurrence of a "change of control"
during the Employment, any and all
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stock options granted to Employee under SM&A's stock option plans shall, whether
or not the Employment is terminated as a result of such change of control,
become immediately vested and exercisable for a period not to exceed the lesser
of (a) two (2) years, or (b) the date on which such stock options would
otherwise have terminated (other than by reason of the termination of the
Employment). The term "change of control" shall mean (i) any merger or
consolidation where SM&A is not the continuing or surviving corporation or
pursuant to which all or substantially all of the shares of SM&A's Common Stock
are converted into cash, other property or securities of another corporation,
other than, in either case, a merger or consolidation in which the shares of
SM&A's Common Stock outstanding immediately prior to such merger or
consolidation represent or are converted into securities representing more than
50% of the voting power of the surviving corporation in such merger or
consolidation or the parent of such corporation, (ii) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of SM&A, (iii) the approval by the
shareholders of SM&A of any plan or proposal for the liquidation or dissolution
of SM&A, (iv) any " person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of 35% or more of SM&A's outstanding Common Stock after the date hereof,
(v) during any period of two consecutive years, individuals who, at the
beginning of such period constitute the entire Board of Directors, together with
persons whose nomination was approved by a vote of at least two thirds of such
directors (or directors so approved) shall cease for any reason to constitute a
majority of the members of the Board of Directors, or (vi) there shall be any
change of control of a nature which would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange
Act or any successor regulation of substantially similar import, regardless of
whether SM&A is subject to such reporting requirement at such time.
14. Miscellaneous Provisions.
14.1 In the event that any of the provisions of this Agreement shall be
held to be invalid or unenforceable, then all other provisions shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included in this Agreement. In the event that
any provision relating to the time period of any restriction imposed by this
Agreement shall be declared by a court of competent jurisdiction to exceed the
maximum time period which such court deems reasonable and enforceable, then the
time period of restriction deemed reasonable and enforceable by the court shall
become and shall thereafter be the maximum time period.
14.2 This Agreement shall be binding upon the heirs, executors,
administrators, and successors-in-interest of the parties hereto.
14.3 This Agreement shall be construed and enforced according to the
laws of the State of California, excluding its choice of law rules.
14.4 This Agreement supersedes all previous correspondence, promises,
representations, and agreements, if any, either written or oral, between SM&A
and Employee. No provision of this Agreement may be modified except by a writing
signed by both SM&A and Employee.
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14.5 All notices, demands, requests, consents, approvals or other
communications (collectively "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be personally served or deposited in the United States mail,
registered or certified, return receipt requested, postage prepaid, addressed as
set forth below, or such other address as such party shall have specified most
recently by written notice. Notices shall be deemed given on the date of service
if personally served. Notices mailed as provided herein shall be deemed given on
the third business day following the date so mailed:
To SM&A: SM&A Corporation
0000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Chairman, Compensation Committee
Board of Directors
with a copy to: Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
To Employee: Xxxxxx X. Xxxxx
0 Xxxxxx
Xxxxxx, XX 00000
with a copy to:
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Attention:
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14.6 Should any party institute any action or proceeding to enforce this
Agreement or any provision hereof, or for damages by reason of any alleged
breach of this Agreement or of any provision hereof, or for a declaration of
rights hereunder, the prevailing party in any such action or proceeding shall be
entitled to receive from the other party all costs and expenses, including
reasonable attorneys', accountants' and experts' fees, incurred by the
prevailing party in connection with such action or proceeding.
15. Acknowledgment by Employee. Employee has carefully read and considered
the provisions of this Agreement and agrees that all of the above-stated
restrictions, obligations and promises are fair and reasonable and reasonably
required for the protection of the interests of SM&A. Employee further
acknowledges that the goodwill and value of SM&A is enhanced by these provisions
and that said enhancement is desired by Employee. Finally, Employee indicates
his acceptance of this Agreement by signing and returning the enclosed copy of
this Agreement where indicated below.
16. Counsel. The parties hereto have requested that counsel to the Company,
Xxxxx & Xxxxxx, LLP, prepare this Agreement and acknowledge that in so doing
that such counsel is
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acting on behalf of the Company. Xxxxx acknowledges that Xxxxx & Xxxxxx, LLP has
previously served as and continues to serve as counsel to the Company in other
matters.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
SM&A CORPORATION
By: /s/ J. XXXXXXXXXXX XXXXX
------------------------------------
J. Xxxxxxxxxxx Xxxxx
Chairman, Compensation Committee
of the Board of Directors
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EXHIBIT A
COMPENSATION OF XXXXXX X. XXXXX
The following summarizes the compensation to which Employee shall be
entitled under the foregoing terms of this Employment Agreement.
1. BASE SALARY Effective February 1, 2000, Employee's base annual
salary shall be $600,000 per year, paid in at
bi-weekly installments. In no event, and under no
circumstances, shall Employee's annual salary be
reduced below the most recent annual salary. For
example, in no event can Employee's base annual
salary ever be reduced below $600,000.
2. LEAVE CREDIT During the Employment, and in addition to the
company observed and posted holidays of 10 per
year, Employee shall accrue paid leave at a rate
of 25 days per annum; provided, however, that
any such leave time, if not used, will be subject
to SM&A's limitations on carrying forward unused
leave time; and, provided further, that Employee
shall use his best efforts to coordinate with the
President and COO of SM&A the dates upon which
Employee shall use his aforesaid vacation so as to
minimize the negative impact upon SM&A occasioned
by Employee's absence.
3. CELLULAR
PHONE: SM&A shall reimburse Employee for the periodic
cost of a cellular telephone including but not
limited to phone equipment rental.
4. OTHER
BENEFITS: Employee shall be entitled to participate in and
receive benefits under all profit-sharing plans,
pension plans, group medical plans and other
benefit plans for the payment of additional
compensation or benefits to employees of SM&A
which SM&A at any time maintains for executive
employees.
5. AUTOMOBILE
LEASE: In lieu of an automobile allowance, SM&A shall
lease an automobile of Employee's choice. In
addition, the reasonable cost of annual insurance,
fuel, maintenance, cleaning and repairs shall
be borne by SM&A.
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6. BUSINESS
EXPENDITURES: Employee may be authorized to incur reasonable
expenses for promoting and conducting the business
of SM&A, including but not limited to expenditures
for entertainment and travel. SM&A shall reimburse
Employee monthly for all such approved business
expenses upon presentation of reasonable
documentation establishing the amount, date, place
and essential character of the expenditures.
7. INCENTIVE
BONUS: Employee's incentive bonus for each fiscal year
shall provide for a maximum bonus of up to
$400,000 of his base salary for such year and
shall be subject to such terms and conditions as
shall be determined in good faith by the Board of
Directors, with the recommendation of and in
consultation with the Compensation Committee of
the Board of Directors. The incentive bonus may be
based on financially oriented components or upon
Employee's individual accomplishments or both. The
incentive bonus earned for a fiscal year of SM&A
shall be paid not later than three (3) business
days following the review and approval by the
Board of Directors of SM&A of the final financial
statement results of the audit for said fiscal
year by SM&A's independent auditors.
Employee may draw up to $70,000 through quarterly
payments, a gross amount equal to $17,500 as a
non-guaranteed advance against the Incentive
Bonus.
8. INDEMNI
FICATION: SM&A has entered into a directors and officers
Indemnification Agreement with Employee, under
which SM&A is required to indemnify Employee
against personal liability for acts of SM&A, to
the extent such indemnification is permitted by
law.
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