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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective for all
purposes and in all respects as of the 1st day of April, 2000, by and between
(a) BTG, INC., a Virginia corporation, (hereinafter referred to as "Employer"),
and (b) Xxxx X. Xxxxxxxxxxx, Executive Vice President, Chief Financial and
Administrative Officer (hereinafter referred to as "Employee").
WHEREAS, Employer desires to continue to employ Employee in the capacity
of an Executive Vice President, Chief Financial and Administrative Officer;
WHEREAS, Employee desires to continue to be employed by Employer in the
aforesaid capacity; and
WHEREAS, Employer and Employee desire to enter into this Agreement to set
forth the terms and conditions of Employee's continued employment with Employer
during the term hereof.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. Term. The term of employment under this Agreement (the "Term")
shall be for the period commencing on the effective date hereof and ending on
March 31, 2004.
2. Duties of Employee. Subject to the provisions of this Agreement,
during the Term, Employer shall employ Employee and Employee shall serve
Employer as an Executive Vice President, Chief Financial and Administrative
Officer. During the Term, Employee shall discharge the obligations and
responsibilities normally associated with such office and shall perform such
other duties and responsibilities as the Board of Directors of Employer (the
"Board") shall determine from time to time that are consistent with Employee's
position and the terms of this Agreement.
3. Compensation. Employee will receive an annual base salary of not
less than the salary specified on Exhibit A hereto ("Base Salary"). Base Salary
and merit increases to such Base Salary will be payable at the times and in the
manner consistent with Employer's general policies regarding compensation of
executive employees. In the event that Employee shall be given significant new
or additional responsibilities (without a corresponding decrease in existing
responsibilities) at any time during the Term, Employer and Employee agree to
discuss the amount, if any, of increase in Employee's Base Salary. Employee will
be eligible to receive annual incentive compensation based on incentive target
percentages of base salary comparable to such percentages in effect immediately
prior to the effective date of the Agreement. Nothing in this Section will
guarantee to Employee any specific amount of incentive compensation, or prevent
the Board from establishing new performance goals and compensation targets
applicable to Employee.
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4. Additional Benefits. In addition to the compensation referred to
in Section 3 hereof, Employee shall be entitled to receive such health, medical,
disability, dependent health care, life, retirement and other employee benefits
as Employer generally makes available to its executive officers.
5. Termination
A. Termination Without Cause. Either Employee or Employer may
terminate this Agreement and Employee's employment hereunder at any time without
cause by giving not less than thirty (30) days advanced written notice to the
other party.
B. Termination for Cause. Employer may terminate this
Agreement and Employee's employment hereunder for Cause (as hereinafter defined)
by giving written notice of such termination to Employee. For purposes of this
Agreement, "Cause" shall mean: Employee's willful and gross misconduct which
has, or could reasonably be expected to have, a material adverse effect on the
business, assets, operations, results of operations or financial condition of
Employer. If Employer shall elect to terminate this Agreement and Employee's
employment hereunder for Cause, Employer shall provide written notice thereof to
Employee within sixty (60) days after the occurrence of the event upon which
such right of termination for Cause arises. A termination for Cause pursuant
hereto shall take effect ten days after the delivery of such written notice to
Employee unless Employee shall, during such ten day period, remedy the Cause
specified in such notice; provided however, that such termination shall take
effect immediately upon the giving of such notice if the Board of Directors
specifically determines in good faith that such Cause is unremediable.
C. Death and Disability. This Agreement and Employee's
employment hereunder shall automatically terminate upon the death of Employee,
and also may be terminated by Employer by giving written notice of such
termination to Employee if Employee shall be rendered incapable by illness or
any physical or mental disability from substantially complying with the terms,
conditions and provisions on his part to be observed and performed for a period
in excess of six (6) consecutive months during the Term.
D. Termination for Good Reason. At any time within two (2)
years following a Change in Control (as hereinafter defined), Employee may
terminate this Agreement and Employee's employment hereunder for Good Reason (as
hereinafter defined) by giving written notice of such termination to Employer.
For purposes of this Agreement, "Good Reason" shall mean any of the following:
(a) the Employer changes the authority provided currently to Employee, changes
the duties and responsibilities currently held by Employee, or requests that the
Employee provide services that are not of a similar character to those provided
by the Employee to the Employer immediately prior to the Change in Control; (b)
the Employer has breached any material provision of this Agreement and within 30
days after notice thereof from the Employee, the Employer fails to cure such
breach; or (c) the Employer requires the Employee to relocate his principal
place of employment to any location outside a twenty-five
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mile radius from the location of the Employee's principal place of employment
immediately prior to the date of the Change in Control. If Employee shall elect
to terminate this Agreement and Employee's employment hereunder for Good Reason,
Employee shall provide written notice thereof to Employer within sixty (60) days
after the occurrence of the event upon which such right of termination for Good
Reason arises. A termination for Good Reason pursuant hereto shall take effect
ten days after the delivery of such written notice to Employer unless Employer
shall, during such ten day period, remedy the Good Reason specified in such
notice.
A "Change in Control" for purposes of this Agreement shall
mean (a) the sale of substantially all of Employer's assets to a single
purchaser or group of associated purchasers; (b) the sale, exchange, or other
disposition, in one transaction or a series of related transactions, of the
majority of Employer's outstanding corporate shares; or (c) the merger or
consolidation of Employer with another unrelated company where Employer is not
the surviving entity in such merger or consolidation. As used in this Agreement,
"Employer" shall mean Employer as herein before defined and any successor to its
business and/or assets in a Change in Control transaction.
6. Termination Payments and Benefits.
A. Termination Upon Change in Control. If during the Term
there shall occur a Change in Control (as hereinafter defined), and within two
(2) years after such Change in Control Employer shall terminate Employee without
Cause, or Employee shall terminate employment with Employer for Good Reason
pursuant to Section 5(D) above, then Employer will pay to Employee an amount
equal to 450% of Base Salary. Any amount due pursuant to this Section will be
payable in a lump sum less applicable taxes within 30 days following
termination; provided, however, that the payment of any such amount shall be
conditioned upon Employee's execution of a general release of and waiver of
claims against Employer in form and substance satisfactory to Employer.
B. Other Events of Termination. In the event that Employee's
employment hereunder is terminated by reason of Employee's voluntary resignation
(as provided in Section 5(A)), by Employer for Cause (as provided in Section
5(B)), or Employee's death or disability (as provided in Section 5(C)), all
accrued Base Salary shall be paid to Employee (or, in the event of Employee's
death, to Employee's estate), but no compensation (or other payments) in excess
of such accrued but unpaid Base Salary, shall then be paid or payable to
Employee (or to his estate) under this Agreement.
C. Excise Tax Restoration Payment. In the event that it is
determined that any payment or distribution of any type to or for the benefit of
Employee made by Employer, by any of its affiliates, by any person who acquires
ownership or effective control or ownership of a substantial portion of
Employer's assets (within the meaning of section 280C of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder (the "Code")) or by any
affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the
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terms of an employment agreement or otherwise (the "Total Payments"), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest or penalties, are collectively referred to as the "Excise Tax"),
then Employee shall be entitled to receive an additional payment (an "Excise Tax
Restoration Payment") in an amount that shall fund the payment by the Employee
of any Excise Tax on the Total Payments as well as all income taxes imposed on
the Excise Tax Restoration Payment, any Excise Tax imposed on the Excise Tax
Restoration Payment and any interest or penalties imposed with respect to taxes
on the Excise Tax Restoration or any Excise Tax.
7. Director and Officer Liability. Employer agrees to indemnify
Employee in connection with his serving as an officer of Employer, in a manner
consistent with Employer's Articles of Incorporation, Bylaws and the practices
and policies of Employer in effect from time to time during the Term. In the
event that Employer shall enter into any indemnification agreement with any
officer of Employer or any subsidiary of Employer, Employer shall promptly enter
into an agreement containing similar provisions with respect to indemnification
with Employee.
8. Competition, Confidentiality, Nonsolicitation.
A. Covenant Not to Compete; Nonsolicitation. Employee
covenants and agrees that at all times during the period of his employment with
Employer and ending one (1) year after termination of Employee's employment with
Employer pursuant to which Employee is entitled to a termination payment
pursuant to Section 6(A) of this Agreement, Employee shall not, directly or
indirectly in competition with the business of Employer or its affiliates:
participate in the management of any business enterprise if such enterprise
engages in substantial and direct competition with Employer (i.e. provides
services or product to the same customers as the Employer) and such enterprise's
sales of any product or service competitive with any product or service of
Employer amounted to 25% of such enterprise's net sales for its most recently
completed fiscal year and if Employer's net sales of said product or service
amounted to 25% of Employer's net sales for its most recently completed fiscal
year. Competition will not include (i) the mere ownership of securities in any
enterprise and exercise of rights appurtenant thereto or (ii) participation in
management of any enterprise or business operation thereof other than in
connection with the competitive operation of such enterprise.
B. Confidentiality. The parties hereto acknowledge that
Employer has and will continue to disclose to Employee its confidential or
proprietary information. Employee hereby covenants and agrees that he will not,
without the prior written consent of Employer during the Term or thereafter,
disclose to any person not employed by Employer, or use in connection with
engaging in Competition with employer, any confidential or proprietary
information of Employer. For purposes of this Agreement, the term "confidential
or proprietary information" will include all information of any nature and in
any form that is owned by Employer and that is not publicly available or
generally known to persons engaged in businesses similar
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or related to those of Employer. Confidential information will include, without
limitation, Employer's financial matters, customers, employees, industry
contacts, and all other secrets and all other information of a confidential or
proprietary nature. Confidential information shall not include information that
comes into the possession of Employee following termination from a source not
under a duty to Employer to refrain from disclosing such information. The
foregoing obligations imposed by this Section will cease if such confidential or
proprietary information will have become, through no fault of the Employee,
generally known to the public or Employer is required by law to make disclosure
(after giving Employer notice and an opportunity to contest such requirement).
C. Nonsolicitation. Employee covenants and agrees that at all
times during the period of his employment with Employer and for a period of one
(1) year after termination of Employee's employment, pursuant to Section 6(A),
he will not attempt to influence, persuade or induce, or assist any other person
in so persuading or inducing, any employee of Employer to give up, or to not
commence, employment or a business relationship with Employer or the Employer,
unless Employer agrees in writing.
D. Severability; Injunctive Relief. The covenants contained in
this Section 8 shall be construed as a series of separate and severable
covenants which are identical in terms except for geographic coverage. Employee
and Employer agree that if in any proceeding, the tribunal shall refuse to
enforce fully any covenants contained herein because such covenants cover too
extensive a geographic area or too long a period of time or for any other reason
whatsoever, any such covenant shall be deemed amended to the extent (but only to
the extent) required by law. Each party acknowledges and agrees that the
services to be rendered by Employee to Employer hereunder are of a special and
unique character. Each party shall have the right to injunctive relief, in
addition to all of its other rights and remedies at law or in equity, to enforce
the provisions of this Agreement.
E. The obligations of Employee under this Section 8 shall
survive the termination or expiration of the Employment Term.
9. Proprietary Rights.
A. All right, title, and interest in all copyrightable
material which Employee shall conceive or originate, either individually or
jointly with others, and which arise out of Employee's employment with Employer,
is the property of Employer and is by this Agreement assigned to Employer along
with ownership of any and all copyrights in the copyrightable material. Employee
agrees to execute all papers and perform all other acts necessary to assist
Employer to obtain and register copyrights on such materials in any and all
countries. Works of authorship created by Employee for Employer in performing
his responsibilities under this Agreement shall be considered "works made for
hire" as defined in the U.S. Copyright Act. In addition, Employee hereby assigns
to Employer all proprietary rights including, but not limited to, all patents,
copyrights, trade secrets and trademarks Employee might otherwise have, by
operation of law or otherwise, in all inventions, discoveries, works, ideas,
information, knowledge and data related to Employee's access to confidential
information of Employer.
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B. All know-how and trade secret information conceived or
originated by Employee which arises out of Employee's employment with Employer
shall be the property of Employer, and all rights therein are by this Agreement
assigned to Employer.
C. If Employee is engaged in or associated with the planning
or implementing of any project, program or venture involving Employer and a
third party or parties all rights in such project, program or venture shall
belong to Employer. Except as formally approved by Employer's Board of
Directors, Employee shall not be entitled to any interest in such project,
program or venture or to any commission, finder's fee or other compensation in
connection therewith other than the compensation to be paid to Employee as
provided in this Agreement.
D. Upon termination of his employment with Employer, Employee
shall deliver promptly to Employer all records, manuals, books, blank forms,
documents, letters, memoranda, notes, notebooks, reports, data, tables,
calculations, customer and prospective customer lists, and copies of all of the
foregoing, which are the property of Employer, and all other property, trade
secrets and confidential information of Employer, including, but not limited to,
all documents which in whole or in part contain any trade secrets or
confidential information of Employer, which in any of these cases are in his
possession or under his control.
E. Employee further agrees to execute and deliver any
additional documents, instruments, applications, affidavits or other writings
reasonably necessary to further evidence the assignments described in this
Section 9.
10. Tax Withholding. Payments to Employee of all compensation
contemplated under this Agreement shall be subject to all applicable legal
requirements with respect to the withholding of taxes or other amounts required
by law or regulation.
11. Amendment; Waiver. This Agreement may not be modified, amended or
waived in any manner except by an instrument in writing signed by the parties
hereto. The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a wavier of
any provision of this Agreement, or of any subsequent breach by such party of a
provision of this Agreement.
12. Governing Law. In view of the fact that the principal office of
Employer is located in the Commonwealth of Virginia, it is understood and agreed
that the construction and interpretation of this Agreement shall at all times
and in all respects be governed by the substantive laws of the Commonwealth of
Virginia without regard to its rules regarding conflicts of laws.
13. Submission to Jurisdiction. Employee hereby irrevocably submits to
the exclusive jurisdiction of any Virginia court or Federal court sitting in
Fairfax County, Virginia, in any action or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby, and Employee hereby
irrevocably agrees that all claims in respect of any such action or proceeding
may be heard and determined in any such Virginia or Federal court.
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Employee irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to Employee at its
address specified pursuant to Section 15. Employee irrevocably confirms that
service of process out of such courts in such manner shall be deemed due service
upon him for the purposes of such action or proceeding. Employee and Employer
hereby irrevocably waive (a) any objection such party may have to the laying of
venue of any such action or proceeding in any of such courts, or (b) any claim
that such party may have that any such action or proceeding has been brought in
an inconvenient forum. Employee and Employer irrevocably agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 13 shall affect the right of any party
hereto to serve legal process in any manner permitted by law.
14. Severability. The provisions of this Agreement (including
particularly, but not limited to, the provisions of Section 8 hereof) shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions hereof shall not affect the validity and enforceability of the
other provisions hereof.
15. Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by courier service (with proof of service),
facsimile transmission, hand delivery or certified or registered mail (return
receipt requested and first-class postage prepaid), to his residence in the case
of Employee, and to its principal office in the case of Employer.
16. Entire Agreement. This Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect to the
employment herein referred to, and no representations, promises, agreements or
understandings, written or oral, not contained herein shall be of any force or
effect.
17. Successors; Binding Agreement.
A. Employer will require any successor of Employer in a Change
in Control transaction to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that Employer would be required to
perform it if no such Change in Control transaction had taken place. Failure of
Employer to obtain such assumption and agreement prior to the effectiveness of
any such Change in Control transaction shall be a breach of this Agreement and
shall entitle Employee to compensation from Employer in the same amount and on
the same terms as he would be entitled to hereunder if Employee terminated his
employment for Good Reason pursuant to Section 5(D) above, except that for
purposes of implementing the foregoing, the date on which any such Change in
Control transaction becomes effective shall be deemed the date of termination
hereunder.
B. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, devisees, executors,
administrators, legal representatives, successors and assigns.
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18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original hereof, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement under seal as of the day and year first above written.
BTG, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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EMPLOYEE
/s/ Xxxx X. Xxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxx
Chief Financial and Administrative Officer,
Executive Vice President
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EXHIBIT A
Xxxx X. Xxxxxxxxxxx
Executive Vice President and CFAO
$221,000.00
