February 27, 1998
▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
The ▇▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
This letter agreement between The ▇▇▇▇▇▇▇▇▇
Corporation ("▇▇▇▇▇▇▇▇▇") and you, relates to
severance and change of control payments.
Severance Payments. In exchange for your
continued services as an executive of ▇▇▇▇▇▇▇▇▇ or
its successors, and subject to your having been,
on the date of termination, an employee of
▇▇▇▇▇▇▇▇▇ or its successors, for at least five
years (and for purposes of determining duration of
service, service for ▇▇▇▇▇▇▇▇▇ and its successors
shall be aggregated) and an officer of ▇▇▇▇▇▇▇▇▇
or its successors, for at least three years (and
for purposes of determining duration of service as
an officer, service as an officer for ▇▇▇▇▇▇▇▇▇
and its successors shall be aggregated), ▇▇▇▇▇▇▇▇▇
for itself and its successors hereby agrees that
if your employment shall be terminated either by
▇▇▇▇▇▇▇▇▇ or its successors for any reason other
than cause, or by you for Good Reason, you or your
estate shall be entitled to receive from ▇▇▇▇▇▇▇▇▇
or its successors as severance, an amount equal to
the sum of: (i) two times your then current
annual base salary, plus (ii) an amount in lieu of
incentive bonus, irrespective of whether such
incentive bonus would or could have been earned,
equal to your then current annual base salary,
which amount, i.e., the sum of (i) and (ii) above,
shall be payable in a lump sum within ten days
after the effective date of termination of your
employment. In addition to the foregoing, you
will be entitled to the immediate vesting of all
stock options which you hold in the shares of
▇▇▇▇▇▇▇▇▇ or its successor.
Change of Control Payments. In addition, and
notwithstanding whether the conditions for
severance pay have been met, if a "Change of
Control" (as defined in the attached Exhibit A) of
▇▇▇▇▇▇▇▇▇ occurs while you are still an employee
of ▇▇▇▇▇▇▇▇▇, you shall be entitled to receive
from ▇▇▇▇▇▇▇▇▇ or its successors an amount equal
to the sum of: (i) two times
your then current annual base salary, plus (ii) an
amount in lieu of incentive bonus, irrespective of
whether such incentive bonus would or could have
been earned, equal to your then current annual
base salary, which amount, i.e., the sum of (i)
and (ii) above, shall be payable: (a) one-half in
a lump sum on the date of Change of Control (the
"First Change Payment") and, (b) as long as your
employment continues, one-half over a one year
period in four quarterly installments, commencing
three months after the date of Change of Control
(the "Second Change Payments"). During said one
year period, if your employment shall be
terminated either by ▇▇▇▇▇▇▇▇▇ (or its successors)
for any reason other than cause, or by you for
Good Reason, you shall be entitled to receive
immediately: (i) the First Change Payment (if not
already paid), (ii) any Second Change Payments
not yet paid, and (iii) the full severance
payment, if you qualify for such severance payment
by dint of duration of service, as referred to in
the preceding paragraph of this letter.
Termination by ▇▇▇▇▇▇▇▇▇ of your employment (other
than for cause) within one hundred and eighty days
prior to a Change of Control shall be deemed to
have been a termination in contemplation of such
Change of Control, entitling you to the First
Change Payment hereunder.
Enforcement. If you are the prevailing party
in a suit or proceeding against ▇▇▇▇▇▇▇▇▇, or its
successors, to enforce or defend your rights under
this agreement, you shall be entitled to recover
from ▇▇▇▇▇▇▇▇▇, or its successors, your reasonable
attorneys' fees and other costs and expenses in
connection with such suit or proceeding.
Definition of Good Reason: "Good Reason" (as
used in the preceding paragraph) includes any
action by ▇▇▇▇▇▇▇▇▇ (or its successors) which (i)
results in a reduction in your compensation,
position, authority, duties or responsibilities
whether or not your senior management
opportunities are substantially lessened, or (ii)
results in your primary place of employment being
relocated more than 35 miles from the current
Dulles Airport location, or (iii) would be deemed
a constructive termination under applicable law.
Supplementary Executive Retirement Plan. You
shall be entitled to participate in ▇▇▇▇▇▇▇▇▇'▇
Supplementary Executive Retirement Plan (the
"SERP"). Notwithstanding the provisions of the
SERP, for purposes of determining years of service
with ▇▇▇▇▇▇▇▇▇, or its successors, you shall be
credited with two years of service for each of the
first ten years you remain an active employee of
▇▇▇▇▇▇▇▇▇ or its successors, but the foregoing
shall not affect vesting requirements which shall
remain in accordance with the SERP.
Payments Pursuant to Base Salary or Incentive
Compensation During Term of Employment. No sum
payable to you upon a Change of Control shall
limit or affect your entitlement to base salary or
incentive compensation for all periods during
which you are employed by ▇▇▇▇▇▇▇▇▇ or its
successors.
Limitation on Payments Pursuant to IRC
280G. In no event shall any amounts payable
pursuant to this letter agreement which are deemed
to constitute "parachute payments" (as defined in
Section 280G of the Internal Revenue Code, as
amended by the Tax Reform Act of 1986, and as
thereafter amended (the "Code")), when added to
any other payments which are deemed to constitute
"parachute payments" as defined in the Code,
exceed 2.99 times your "base amount" (as defined
in the Code).
Please acknowledge your agreement with the
terms of this letter agreement by signing the
attached copy and returning same to The ▇▇▇▇▇▇▇▇▇
Corporation (Attention, ▇▇▇▇ ▇▇▇▇). This letter
agreement shall be effective as of the date of
your acceptance.
Very truly yours,
THE ▇▇▇▇▇▇▇▇▇ CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board,
Chief Executive Officer
and President
ACCEPTED AND AGREED
▇▇▇▇ ▇. ▇▇▇▇▇
EXHIBIT A
"Change of Control" means the occurrence of any of
the following events:
(i) Any "Person", other than one or more
"Permitted Holders", is or becomes the "Beneficial
Owner", directly or indirectly, of more than 20%
of the total voting power (the "Vote") of the
"Voting Stock" of the Company, and the Permitted
Holders "beneficially own", directly or
indirectly, in the aggregate a lesser percentage
of the Vote of all the Voting Stock of the Company
than such other Person; provided, however, such
other Person shall be deemed to beneficially own
all Voting Stock of a corporation held by any
other corporation (the "Parent Corporation"), if
such other Person "beneficially owns", directly or
indirectly, more than 20% of the Vote of the
Voting Stock of such Parent Corporation, and the
Permitted Holders "beneficially own", directly or
indirectly, in the aggregate a lesser percentage
of the Vote of the Voting Stock of such Parent
Corporation;
(ii) During any period of two consecutive
years, individuals who at the beginning of any
such period constituted the Board of Directors of
the Company (together with any new directors whose
election by such Board or whose nomination for
election by the shareholders of the Company was
approved by a vote of a majority of the directors
of the Company then still in office who were
either directors at the beginning of such period
or whose election or nomination for election was
previously so approved) cease for any reason to
constitute a majority of the Board of Directors of
the Company then in office;
(iii) The Company consolidates with or
merges with or into another Person, pursuant to a
transaction (a) in which the outstanding Voting
Stock of the Company is changed into or exchanged
for cash, securities or other property (other than
any such transaction where the outstanding Voting
Stock of the Company is changed into or exchanged
for Voting Stock of the surviving corporation),
and (b) in which the holders of the Vote of the
Voting Stock of the Company immediately prior to
such transaction own, directly or indirectly, less
than a majority of the Vote of the Voting Stock of
the surviving Person immediately after such
transaction, and (c) by which an event described
in Section (i) shall have occurred; or
(iv) The Company is liquidated or dissolved,
or all or substantially all of its directly or
indirectly held assets are sold or otherwise
conveyed to a third party other than one or more
Permitted Holders.
"Beneficial Owner" has the meaning set forth
in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to be the
Beneficial owner of all shares that any such
person has the right to acquire, whether such
right is exercisable immediately or only after the
passage of time; and the terms "beneficial
ownership" and "beneficially owns" have meaning
correlative to the foregoing;
"Permitted Holders" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and his "associates" (as defined in Rule 12b-2
under the Exchange Act) or any other person
directly or indirectly controlled by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
"Person" shall be as defined in Section 13(d)
and 14(d) of the Exchange Act.
"Voting Stock" means, with respect to a
corporation, (i) all classes of capital stock then
outstanding of such corporation entitled to vote
in elections of directors, and (ii) any security
which may, at the option of the holder, be
converted into or exchanged for Voting Stock.
