10.15
THIRD AMENDED EMPLOYMENT AGREEMENT
THIS THIRD AMENDED EMPLOYMENT AGREEMENT made this 17th day of November,
1997 by and between QUESTECH, INC., a Virginia corporation (hereinafter referred
to as "the Company"), and XXXXXX X. XXXXXXXXX (hereinafter referred to as "the
Employee").
WITNESSETH:
WHEREAS, the Company and the Employee entered into an Employment on the
23rd day of December, 1991 ("the Agreement") and thereafter certain amendments
thereto;
WHEREAS, the Company and the Employee have determined that further
amendments to the Agreement are now necessary;
WHEREAS, the amendments to the Agreement set forth herein were approved by
the Board of Directors of the Company on November 17, 1997; and
WHEREAS, the Company and the Employee are desirous of setting forth in
writing the Agreement as amended.
NOW, THEREFORE, for and in consideration of the sum of Ten dollars
(S10.00), paid by Employee to the Corporation and other valuable consideration,
receipt of which is hereby acknowledged, and the covenants, conditions, and
promises herein contained, it is hereby agreed as follows:
1. Employment. The Corporation, by resolution duly adopted by its Board of
Directors (hereinafter referred to as "the Board"), a copy of which resolution
is attached hereto as Exhibit A, hereby authorizes the Company to enter into
this amended Agreement by the Chairman of the Board and the Chief Executive
Officer, executing this Agreement and the Employee hereby accepts said
employment upon the terms and conditions hereinafter set forth.
2. Positions and Titles. During the period of the Employee's full-time
employment by the Company, as hereinafter defined in this Agreement, the
Employee shall have the titles and hold the offices of President and Chief
Operating Officer, and shall have the usual authority associated with said
positions and offices as more fully described in the By-Laws of the Company in
effect as of the date of this Agreement.
3. Term. The term of this Agreement shall be for a period of two (2) years
from the date of this Agreement to its second anniversary date. This Agreement
and the term of the Employee's full-time employment by the Company, shall be
renewed annually by appropriate resolution duly adopted by the Board for
successive two (2)-year periods. The Employee agrees to remain in the employ of
the Company, as fully defined in this Agreement, during the period of time of
this Agreement unless terminated or canceled pursuant to paragraphs 11 or 14
herein. The annual renewal of this Agreement by the Board shall be governed by
the following:
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(a) The subject of the annual renewal of this Agreement by the Board
shall be an agenda item for the Board at its regularly-scheduled quarterly
meeting immediately preceding or following the annual anniversary date of this
Agreement, whichever may be closer to the anniversary date.
(b) The annual renewal of this Agreement shall be by the majority
vote of the members of the Board, excluding the Employee's vote.
4. Emplovee Status. During the period of the Employee's full-time
employment by the Company, the Employee shall devote such of his business hours
to the affairs of the Company as may be necessary in order to perform his duties
and responsibilities.
5. Compensation. During the period of the Employee's full-time employment
by the Company, the Company shall pay to the Employee as compensation for his
services hereunder a salary for the office of President and Chief Operating
Officer in the sum of at least One Hundred Thirty-Five Thousand Dollars
($135,000.00), to be reviewed and increased at least annually by appropriate
action of the Board, in such a manner as to insure that the compensation rate is
commensurate with the industry scale for similar positions. In addition to the
salary to be paid the Employee, the Company by appropriate action of the Board
may provide the Employee bonus payments based on the performance of the Employee
and the financial condition of the Company and such other benefits as are
consistent with the Employee's position. In addition, the Employee shall
receive as a fee as a director of the Company not less than $20,000.
6. Vacation and Sick Leave. The Employee shall be entitled to vacations
and sick leave as set forth in the Company's Handbook for Employees in effect as
of the date of this Agreement, with such improvements and additional benefits as
may be incorporated therein from time to time.
7. Expenses. The Company agrees to reimburse the Employee in full for all
reasonable expenses incurred by the Employee in the pursuit of the Company's
business. The Employee shall submit to the Chief Executive Officer of the
Company for his approval appropriate expense reports and vouchers in support of
the expenses incurred on behalf of the Company.
8. Insurance(Hospital, Medical, Dental, and Vision). The Company
acknowledges that the Employee, his current spouse (as of the date of this
Agreement or any amendment thereto) and his dependents currently are
participants in the Company's medical plan and that in addition the Company
currently maintains dental and vision insurance policies for the Employee, his
spouse, and his dependents. With regard to such plans and insurance, the
Company agrees with the Employee as follows:
(a) To the extent possible under the terms of the plan, and if
necessary, through other insurance, the Company shall continue to maintain the
plan and shall be responsible for the respective premium payments throughout the
effectiveness of this Agreement.
(b) The Company shall continue its plan, or purchase insurance
comparable thereto, to reimburse the Employee for all hospital, medical, dental,
and vision expenses not otherwise covered.
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(c) In the event that the Employee has been employed by the Company
for at least twelve (12) years and terminates this Agreement pursuant to
paragraph 14(a), or this Agreement has not been terminated but the term hereof
has expired, the Employee, his current spouse (as of the date of this Agreement
or any amendment thereto), and to the extent allowed by spouse the plan and
insurance, their dependents, shall be provided life-time coverage identical to
the coverage set forth in this paragraph. Such reimbursement of the Employee
shall be determined after deductions for Medicare, Medicare supplements, and any
other health insurance benefit payments.
9. Insurance (Life). The Company shall continue to maintain permanent life
insurance on the Employee in the face amount of $300,000 and agrees to pay full
premiums due on said policies during the effectiveness of this Agreement. The
Employee shall have the sole right to designate the beneficiaries under such
policies of insurance. The Company agrees that it shall:
(a) Pay all premiums on such policies and otherwise maintain them in
full force and effect.
(b) Not borrow on the policies or otherwise encumber them.
(c) Make no attempt or request of the Employee to change the names of
any beneficiaries or the method of the payment of the proceeds to them.
(d) Regularly exhibit to the Employee, if requested, receipts for
premium payments as well as to furnish to the Employee proof that the policies
are in full force and effect with the appropriate beneficiary designations.
10. OuesTech Officers and Managers Deferred Compensation Trust (DEF COM
1). The Company agrees that the Employee shall have the right to participate in
DEF COM I during the period in which he is receiving payments under this
Agreement, and thereafter the Company agrees to allow the Employee to make
annual contributions of the eligible amounts that can be contributed by the
Founders until age 65. The Company further agrees that the Employee shall
receive from DEF COM I upon retirement an amount equal to the highest added
retirement benefit at QuesTech, excluding the present Chairman and Chief
Executive Officer.
11. Termination. This Agreement may be terminated by the Company and the
Employee pursuant to the following:
(a) Employee's Voluntary Termination. The Employee may voluntarily
terminate this Agreement by providing the Company one hundred twenty (120) days'
written notice if such termination is requested during the Employee's full-time
employment. Any compensation to be paid to the Employee by the Company
resulting from termination shall be governed by paragraph 12(a) of this
Agreement.
(b) Involuntary Termination. The Company shall have the right to
involuntarily terminate the Employee with or without cause at any time. If such
termination is without cause, the Company shall pay to the Employee the
compensation governed by paragraph 12(b) herein. In the event the Employee is
terminated by the Company for cause, he shall be entitled to no further
compensation under this Agreement as of the effective date of the termination.
For purposes of this Agreement, "cause" shall be defined as any action taken by
the Employee or any
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action that the Employee fails to take that is determined by a court of
competent jurisdiction to be criminal, fraudulent, or to involve gross
negligence on the part of the Employee, other than an act or failure toact that
the Employee in good faith believed was for the benefit of the Company. The
Company agrees to provide the Employee at least sixty (60) days' written notice
of termination pursuant to this subparagraph.
12. Payment on Termination.
(a) Voluntary Termination. In the event that the Employee voluntarily
terminates this Agreement pursuant to paragraph 11(a) during the period of his
full-time employment, he shall be paid the maximum total compensation that he
would receive under this Agreement for a period of two (2) years from the
effective date of termination, unless upon the Employee's request, a waiver of
the non-compete provision set forth in paragraph 13 is approved by a vote of
two-thirds (2/3) of the Board excluding the Employee. Any payments required to
be made to the Employee due to voluntary termination shall be payable to the
Employee, or upon his death, to his spouse or to his estate, at the Employee's
sole option.
(b) Involuntary Termination. In the event that the Employee is
involuntarily terminated without cause by the Company, pursuant to paragraph
11(b), he shall receive his maximum total compensation pursuant to this
Agreement for a period of two (2) years from the effective date of termination.
Any payments required to be made to the Employee due to involuntary termination
shall be payable to the Employee, or upon his death, to his spouse or to his
estate, at the Employee's sole option.
13. Covenant Against Competition. The Employee acknowledges that he has
been involved in the operation of the Company and its subsidiaries and has
familiarity with the operation of the business of the Company and its
subsidiaries. The Employee further acknowledges that the Company and its
subsidiaries do business throughout the United States. The Employee agrees that
for a period of two (2) years from the effective date of the Employee's
voluntary termination of employment, he will not acquire interest in, other than
an interest in a publicly-traded corporation that is insufficient to influence
such corporation's business or work, or perform any services for any person,
firm, company, corporation, or other entity anywhere in the United States, which
has been, is, or is then potentially a competitor of the Company or its
subsidiaries, or which is engaged primarily in activities similar to the type of
business conducted by the Company or its subsidiaries at the time of
termination, unless the Board approves same by two-thirds (2/3) vote excluding
the vote of the Employee.
14. Death of Employee. In the event of the Employee's death during the
effectiveness of this Agreement, this Agreement shall stand terminated as of the
date of death, except as to the following:
(a) All compensation then being paid to the Employee by the Company
as of the date of death shall continue to be paid to the Employee's surviving
spouse if not survived by his spouse, then his dependents, for a period of five
(5) years after the date of death. In the event that the Employee is not
survived by his spouse or leaves no dependents, no compensation shall be payable
by the Company after the date of death.
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(b) The provisions of paragraph 9(c) shall survive the termination of
this Agreement and shall bind the Company as to their requirements.
(c) The Company shall cooperate and take all necessary steps to
effectuate the payment of the insurance proceeds established in paragraph IO of
this Agreement.
(d) All accrued and unpaid benefits under this Agreement, whatsoever
in nature, shall be payable to the Employee's estate.
15. Assignment of Agreement. In the event that the Company is merged,
reorganized, sold or otherwise comes under new ownership or control, if
allowable under the law, all provisions of this Agreement shall bind the
Company's successor in interest. The Company's successor in interest shall be
required to retain the Employee in the same capacity as employed by the Company.
16. Amendments. This Agreement cannot be changed or terminated orally and
no waiver of compliance with any provision or condition hereof shall be
effective unless evidenced by an instrument in writing duly executed by the
parties hereto sought to be charged by such waiver.
17. Writing. This Agreement sets forth the entire understanding of the
parties with respect to the employment of the Employee by the Company and
supersedes any and all prior agreements, arrangements and understandings
relating to the subject matter hereof. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
18. Waiver. The waiver by the Company or the Employee of any breach of any
provision of this Agreement shall not operate to be construed as a waiver of any
subsequent breach of this Agreement.
19. General Provisions.
(a) This Agreement, the relationship between the parties thereunder
and the settlement of any disputes as referred to below shall in all respects be
governed by the laws of the Commonwealth of Virginia.
(b) Any dispute that may arise either in contract or at law out of or
in connection with the Agreement shall be finally and exclusively settled by
arbitration by three arbitrators, in Virginia, in accordance with the Rules of
the American Arbitration Association. Each party selects one AAA arbitrator and
the two selected arbitrators shall select a third. The parties agree that the
decision of the arbitrator(s) shall be final and binding and that any right of
appeal with respect to any question of law arising in the course of the
arbitration or out of the award shall be excluded.
(c) Should the parties disagree as to the meaning of the provisions
of this Agreement, they shall attempt to negotiate a settlement of their
differences. If, however, the negotiations are unsuccessful, either party may
seek arbitration, in Virginia, by the AAA as defined above, to either settle
disputes arising as to the meaning of the Agreement or to declare the party's
rights or to enforce the Agreement.
20. Captions. The captions for each paragraph are not part of this
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Agreement, but are for identification purposes only.
21. Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the Commonwealth of Virginia.
22. Notices. Any notice, writing, report or other document required or
permitted hereunder shall be in writing and shall be given by pre-paid
registered or certified mail, return receipt requested, addressed as follows:
IF TO THE COMPANY:
QuesTech, Inc.
0000-X Xxxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Chairman and Chief Executive Officer
COPY TO:
Vice President and General Counsel
QuesTech, Inc.
0000-X Xxxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
IF TO THE EMPLOYEE:
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
The date of any such notice and of service thereof shall be deemed to be
the date of dispatch. Either party may change his address or purpose of notice
by giving notice in accordance with the provisions of this paragraph.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the
date and year first above written.
THE COMPANY:
Witnessed by: QUESTECH, INC.
X. X. Xxxxxx By: Xxxxxxx X. Xxxxxxxxx
---------------------------
XXXXXXX X. XXXXXXXXX
Chairman and Chief Executive Officer
THE EMPLOYEE:
Witnessed by:
X. X. Xxxxxx By: Xxxxxx X. Xxxxxxxxx
---------------------------
XXXXXX X. XXXXXXXXX
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