EMPLOYMENT AGREEMENT
(▇▇▇▇▇▇▇ ▇▇▇▇)
AGREEMENT, made as of this ______ day of April, 1996, by and between OAO
International Corporation, a Delaware corporation (the "Corporation"), and
▇▇▇▇▇▇▇ ▇▇▇▇ ("Employee").
W I T N E S S E T H :
WHEREAS, the Corporation is engaged in the business of providing a full
range of outsourcing, systems reengineering and systems integration services;
WHEREAS, the Corporation desires to employ Employee as President and Chief
Executive Officer of the Corporation in connection with the conduct of the
business of the Corporation, and Employee desires to accept such employment on
the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. Employment. The Corporation hereby employs Employee as its
President and Chief Executive Officer, and Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth.
2. Term. Unless terminated in accordance with the provisions of
Paragraphs 5 or 6 hereof, the term of employment of Employee under this
Agreement shall commence on the date hereof, and shall continue through December
31, 1997, and shall thereafter continue for successive one year terms unless
terminated at the end of any such term by written notice given by either party
to the other at least 90 days before the end of such term.
3. Office and Duties.
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(a) During the term hereof, Employee shall serve as President
and Chief Executive Officer of the Corporation. Subject to the Bylaws of the
Corporation and the direction of the Board of Directors of the Corporation,
Employee shall perform such duties as are customary for a President and Chief
Executive Officer of businesses in the United States similar in kind and size to
the Corporation, and such other duties as may from time to time be assigned to
him by the Directors of the Corporation.
(b) During the term hereof, Employee shall use his best efforts
to carry out his duties and responsibilities hereunder and devote his entire
working time to the business and affairs of the Corporation and shall not, in
any advisory or other capacity, work for any other individual, firm or
corporation without first having obtained the written consent of the
Corporation; provided, however, that Employee may engage in investment
activities so long as they do not materially interfere with the performance of
his duties hereunder.
(c) During the term hereof, the principal place of employment of
Employee shall be the Corporation's headquarters in Greenbelt, Maryland, or such
other locations as may be selected for the Corporation's facilities, although it
is understood that in connection with his duties under this agreement, Employee
will be required to travel to and perform services at other locations.
(d) Employee represents and warrants to the Corporation that he
is not subject or a party to any employment agreement, non-competition covenant,
non-disclosure agreement or other agreement, covenant, understanding or
restriction which would prohibit Employee from executing this Agreement and
performing fully his duties and responsibilities hereunder, or which would in
any manner, directly or indirectly, limit or affect the duties and
responsibilities which may now or in the future be assigned to Employee by the
Corporation.
(e) Employee agrees to cooperate at the request of the
Corporation in any efforts to obtain "key-man" life insurance on Employee's
life.
4. Compensation. As compensation for the services to be rendered
hereunder by Employee, the Corporation agrees to pay or provide to Employee:
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(a) Salary. A basic salary for such services at the annual rate
of $150,000, payable in equal installments in accordance with the normal payroll
policies of the Corporation. This rate of compensation shall be reviewed by the
Board of Directors at least once per fiscal year and may be increased above
$150,000, but may not be reduced below it during the term hereof.
(b) Bonus. For 6 month period ended March 31, 1996, Employee
shall be entitled to an incentive bonus in a maximum amount of $80,000, which
shall be deemed earned and shall be paid in six equal installments over the
period April 1, 1996 through September 30, 1996. For the 9 month period from
April 1,1996 through December 31, 1996, Employee shall be entitled to an
incentive bonus in a maximum amount of $90,000, subject to the achievement of
certain milestones determined by the Compensation Committee of the Board of
Directors as set forth in Exhibit B-1. For 12 month period ending December 31,
1997, Employee shall be entitled to an incentive bonus in a maximum amount of
$210,000, subject to the achievement of certain milestones determined by the
Compensation Committee of the Board of Directors as set forth in Exhibit B-2.
(c) Benefits. For the term hereof, and thereafter to the extent
provided in Exhibit A, the Corporation shall provide Employee with the benefits
(the "Benefits")specified or referred to in Exhibit A.
5. Death and Disability.
(a) The term of employment of Employee shall terminate forthwith
in the event of the death of Employee, or, at the option of the Corporation, in
the event of physical or mental incapacity or disability which renders him
unable, with reasonable accommodation, to perform the services required of him
under this Agreement ("Disability") for a period of 90 consecutive days or for
one hundred eighty (180) days or more during any period of twelve (12)
consecutive months. Such Disability shall be subject to verification by a
qualified physician if requested by Employee. During any period of Disability
prior to termination, Employee shall continue to be compensated as provided
herein (less any payments due Employee under disability benefit programs paid
for by
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the Corporation including Social Security disability, worker's compensation and
disability or retirement benefits).
(b) In the event of the death of Employee during the term of
employment or in the event of the termination of this Agreement by the
Corporation because of the Disability of Employee, Employee shall be entitled to
receive the compensation specified in Paragraphs 4(a)and 4(b) earned by Employee
through the date of death or termination. The Corporation thereafter shall have
no further obligations under this Agreement except for its obligations to pay
any Benefits as specified in Exhibit A.
6. Termination of Employment.
(a) The Corporation may terminate this Agreement with cause
immediately upon written notice to Employee. "Termination for cause" shall mean
discharge by the Corporation on the following grounds:
(i) Employee's conviction in a court of law of any crime or
offense, which conviction makes him unfit for continuing employment, prevents
him from effective management of the Corporation or materially adversely affects
the reputation or business activities of the Corporation.
(ii) Dishonesty or willful misconduct which materially,
adversely affects the reputation or business activities of the Corporation and
which continues after written notice thereof to Employee, substance abuse for
which Employee fails to undertake and maintain treatment after 15 days after
requested by the Corporation, or misappropriation of funds.
(iii) Employee's continuing material failure or refusal
to perform his duties in accordance with the terms of this Agreement or to carry
out in all material respects the lawful directives of the Board of Directors;
provided that discharge pursuant to this subparagraph (iii) shall constitute
discharge for cause only if Employee has first received written notice from the
Board of Directors of the Corporation stating with specificity the nature of
such failure or refusal and, if requested by Employee within 10 days thereafter,
Employee is afforded a reasonable opportunity to be heard before the Board;
provided further, that if there are no other grounds for termination for cause
and there have been no previous grounds for termination for
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cause during the term of this Agreement, after receipt of such notice Employee
shall have a one-time opportunity to cure or remedy such failure or refusal and
if so cured or remedied termination for cause may not occur as to that
particular failure or refusal.
Upon such termination for cause, Employee shall lose all right, title and
interest in and to all payments required to be made in accordance with the
provisions of this Agreement, and the Corporation shall have no further
obligation to Employee hereunder, except for compensation pursuant to Paragraph
4(a) to which Employee is entitled through the date of termination or any
Benefits that may have accrued.
(b) The Corporation may terminate the Employee without cause at
any time. In the event of termination of Employee without cause, the
Corporation shall pay or provide to Employee (in addition to the salary, bonus,
Benefits and other compensation to which Employee shall be entitled or shall
have earned pursuant to Paragraph 4 hereof through the date of such
termination), (i) the basic salary pursuant to the provisions of Paragraph 4(a)
hereof for the remainder of the then term of this Agreement and such additional
period as the non-competition provisions of Paragraph 7(a) shall be in effect,
payable as provided herein, and (ii) the medical and health insurance coverage
which are part of the Benefits for the remainder of the then term of this
Agreement.
(c) Employee may terminate this Agreement by resignation and
giving the Corporation three (3) months' notice. The Corporation can waive this
notice and agree with Employee to an earlier termination date. Upon termination
by Employee, all obligations of the Corporation, including any obligations as to
Benefits and any bonus payments, and Employee under this Agreement will cease as
of the date of final termination, except Employee's obligations under Paragraphs
7 and 8 will survive.
7. Restrictive Covenants and Confidentiality; Injunctive Relief.
(a) Employee agrees, as a condition to the Corporation agreeing
to employ Employee and to the performance by the Corporation of its obligations
hereunder, particularly its
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obligations under Paragraph 4 hereof, that during the term of this Agreement and
any renewals and extensions hereof and for a period of one (1) year thereafter,
or such lesser term, but not less than 6 months, as the Board of Directors may
determine within 60 days of any such termination, Employee shall not, without
prior written approval of the Board of Directors of the Corporation, directly or
indirectly through any other person, firm or corporation, whether individually
or in conjunction with any other person, or as an employee, agent, consultant,
representative, partner or holder of any interest in any other person, firm,
corporation or other association: (i) solicit, entice or induce any Customer
(as defined below) to become a client, customer, OEM, distributor or reseller of
any other person, firm or corporation with respect to products and/or services
then sold or under development by the Corporation or to cease doing business
with the Corporation, and Employee shall not approach any such person, firm or
corporation for such purpose or authorize or knowingly approve the taking of
such actions by any other person; or (ii) solicit, entice or induce any
person who presently is or at any time during the term hereof shall be an
employee of the Corporation to become employed by any other person, firm or
corporation or to leave their employment with the Corporation, and Employee
shall not approach any such employee for such purpose or authorize or knowingly
approve the taking of such actions by any other person. For purposes of this
Paragraph 7, a Customer means any person or entity which at the time of
determination shall be, or shall have been within two years prior to such time,
a client, customer, OEM, distributor or reseller of the Corporation.
Nothing in the foregoing shall prohibit Employee from investing
in the securities of any corporation having securities listed on a national
securities exchange, provided that such investment does not exceed 5% of any
class of securities of any corporation engaged in business in competition with
the Corporation, and provided that such ownership represents a passive
investment and that neither Employee nor any group of persons including him, in
any way, either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any
part in its business, other than exercising his rights as a shareholder, or
seeks to do any of the foregoing.
(b) Employee acknowledges that during the term of his
employment, he will have access to confidential information of
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the Corporation, including information about "Developments" (as defined in
Paragraph 8 below), business plans, costs, customers, profits, markets, sales,
products, key personnel, pricing policies, operational methods and other
business affairs and methods and other information not available to the public
or in the public domain (hereinafter referred to as "Confidential Information").
In recognition of the foregoing, Employee covenants and agrees that, except as
required by his duties to the Corporation, Employee will keep secret all
Confidential Information of the Corporation and will not, directly or
indirectly, either during the term of his employment hereunder or at any time
thereafter while such Confidential Information remains confidential, disclose or
disseminate to anyone or make use of, for any purpose whatsoever except for the
benefit of the Company in the course of his employment, any Confidential
Information, and upon termination of his employment, Employee will promptly
deliver to the Corporation all tangible materials and objects containing
Confidential Information (including all copies thereof, whether prepared by
Employee or others) which he may possess or have under his control. The term
"Confidential Information" shall not include any information which can be
demonstrated (i) to be generally known in the industry or to the public other
than through breach of Employee's obligations hereunder, (ii) to have been in
Employee's possession prior to his employment with the Corporation and not
assigned to the Corporation, or (iii) to have been disclosed to Employee by an
independent third party not under any obligation of confidentiality.
(c) Employee represents (i) that his experience and capabilities
are such that the restrictions contained herein will not prevent him from
obtaining employment or otherwise earning a living at the same general economic
benefit as reasonably required by him and (ii) that he has, prior to the
execution of this Agreement, reviewed this Agreement thoroughly with his legal
counsel.
(d) Employee acknowledges that the restrictions contained in
this Paragraph 7 are reasonable and necessary to protect the legitimate business
interests of the Corporation and that the Corporation would not have entered
into this Agreement in the absence of such restrictions. By reason of the
foregoing,
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Employee agrees that if he violates any of the provisions of this Paragraph 7,
the Corporation would sustain irreparable harm and, therefore, irrevocably and
unconditionally (i) agrees that in addition to any other remedies which the
Corporation may have under this Agreement or otherwise, all of which remedies
shall be cumulative, the Corporation shall be entitled to apply to any court of
competent jurisdiction for preliminary and permanent injunctive relief and other
equitable relief, (ii) that such relief and any other claim by the Corporation
pursuant hereto may be brought in the United States District Court for the
District of Delaware, or if such court does not have subject matter jurisdiction
or will not accept jurisdiction, in any court of general jurisdiction in
Delaware; (iii) consents to the non-exclusive jurisdiction of any such court in
any such suit, action or proceeding, and (iv) waives any objection which
Employee may have to the laying of venue of any such suit, action or proceeding
in any such court. Employee also irrevocably and unconditionally consents to
the service of any process, pleadings, notices or other papers in a manner
permitted by the notice provisions hereof. In the event that any of the
provisions of this Paragraph 7 hereof should ever be adjudicated to exceed the
time, geographic, product or service, or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable law.
(e) Employee agrees that the Corporation may provide a copy of
this Paragraph 7 to any business or enterprise (i) which the Employee may
directly or indirectly own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing, or control of,
or (ii) with which he may be connected with as an officer, director, employee,
partner, principal, agent, representative, consultant or otherwise, or in
connection with which he may use or permit his name to be used; provided,
however, that this provision shall not apply as to subparagraph (a) or (b) after
expiration of the time periods set forth therein or with respect to any
activities, entities or persons excluded by the terms hereof. Employee will
provide the names and addresses of any of such persons or entities as the
Corporation may from time to time reasonably request.
(f) In the event of any breach or violation of the restriction
contained in subparagraph (a) above, the period therein specified shall ▇▇▇▇▇
during the time of any violation thereof and
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that portion remaining at the time of commencement of any violation shall not
begin to run until such violation has been fully and finally cured.
8. Ownership of Inventions and Ideas. Employee acknowledges that
the Corporation shall be the sole owner of all the results and proceeds of
Employee's service hereunder, including but not limited to, all patents, patent
applications, patent rights, formulas, copyrights, inventions, developments,
discoveries, other improvements, data, documentation, drawings, charts, and
other written, audio and/or visual materials relating to equipment, methods,
products, processes, or programs in connection with or useful to the
Corporation's business (collectively, the "Developments") which Employee, by
himself or in conjunction with any other person, may conceive, make, acquire,
acquire knowledge of, develop or create during the term of Employee's employment
hereunder, free and clear of any claims by Employee (or any successor or
assignee of him) of any kind or character whatsoever other than Employee's right
to compensation hereunder. Employee acknowledges that all copyrightable
Developments shall be considered works made for hire under the Federal Copyright
Act. Employee hereby assigns and transfers his right, title and interest in and
to all such Developments, and agrees that he shall, at the request of the
Corporation, execute or cooperate with the Corporation in any patent
applications, execute such assignments, certificates or other instruments, and
do any and all other acts, as the Board of Directors of the Corporation from
time to time reasonably deems necessary or desirable to evidence, establish,
maintain, perfect, protect, enforce or defend the Corporation's right, title and
interest in or to any such Developments.
9. Survival. The provisions of Paragraphs 7 and 8 shall survive the
termination of this Agreement for any reason whatsoever.
10. Dispute Resolution.
(a) Good-Faith Negotiations. If any dispute arises under this
Agreement that is not settled promptly in the ordinary course of business, the
parties shall seek to resolve any such
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dispute between them, first, by negotiating promptly with each other in good
faith in face-to-face negotiations. If the parties are unable to resolve the
dispute between them within 20 business days (or such period as the parties
shall otherwise agree) through these face-to-face negotiations, then the
controversy or claim shall be settled by arbitration conducted on a confidential
basis, under the U.S. Arbitration Act, if applicable, and the then current
Commercial Arbitration Rules of the American Arbitration Association (the
"Association") strictly in accordance with the terms of this Agreement and the
substantive law of the State of Delaware. The arbitration shall be conducted at
the Association's regional office located closest to Employer's principal place
of business by one arbitrator experienced in employment matters. Judgment upon
the arbitrator's award may be entered and enforced in any court of competent
jurisdiction. Neither party shall institute a proceeding hereunder unless at
least 10 days prior thereto such party shall have given written notice to the
other party of its intent to do so.
(b) Notwithstanding the foregoing, the Employer shall not be
precluded hereby from securing equitable remedies in courts of any jurisdiction,
including, but not limited to, temporary restraining orders and preliminary
injunctions to protect its rights and interests but shall not be sought as a
means to avoid or stay arbitration.
11. Miscellaneous.
(a) Any notice authorized or required to be given or made by or
pursuant to this Agreement shall be made in writing and either personally
delivered or mailed by overnight express mail to the respective address of the
party to receive such notice, which address is the one designated below the name
of such party on the signature page hereof, or to such other address as a party
may specify by notice to the other parties hereto.
(b) This Agreement cancels and supersedes any and all prior
agreements and understandings between or among any or all of the parties hereto
with respect to the employment by or obligations of Employee to any thereof,
including the employment agreement, dated June 5, 1992, between Employee and OAO
Corporation. This Agreement constitutes the entire agreement among the parties
with respect to the matters herein provided, and no
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modification or waiver of any provision hereof shall be effective unless in
writing and signed by the parties hereto.
(c) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable or delegable in
whole or in part by Employee.
(d) Employee agrees that the obligations of the Corporation
hereunder shall be limited to the Corporation only, and Employee agrees that he
shall not bring any claim or suit against any director or shareholder of the
Corporation or any other person other than the Corporation for any breach or
default by the Corporation of its obligations hereunder.
(e) If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect any
other provision or application of this Agreement which can be given effect
without the invalid or unenforceable provision or application and shall not
invalidate or render unenforceable such provision or application in any other
jurisdiction.
(f) No remedy conferred upon any party by this Agreement is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given hereunder
or now or hereafter existing at law or in equity. No delay or omission by any
party in exercising any right, remedy or power hereunder or existing at law or
in equity shall be construed as a waiver thereof, and any such right, remedy or
power may be exercised by the party possessing the same from time to time and as
often as may be deemed expedient or necessary by such party in its sole
discretion.
(g) This Agreement may be executed in several counterparts, each
of which is an original. It shall not be
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necessary in making proof of this Agreement or any counterpart hereof to produce
or account for any of the other counterparts.
(h) In the event of a lawsuit or arbitration by either party to
enforce any provisions of this Agreement, the prevailing party shall be entitled
to recover reasonable costs, expenses and attorney's fees from the other party.
12. Controlling Law. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Delaware.
IN WITNESS WHEREOF, Employee has hereunto set his hand and the Corporation
has caused this instrument to be duly executed as of the day and year first
above written.
Witness: Employee:
_________________________ _________________________
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attest:
OAO International Corporation
_________________________ By:______________________
Secretary Title:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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Exhibit A
Benefits
1. Group Insurance. The Corporation shall provide to Employee and his family
the group life, health, dental and disability insurance coverage that the
Corporation makes available to its most senior executives from time to time.
Unless Employee resigns or is terminated for cause pursuant to Section 6(a) of
this Agreement, such coverage shall be continued by the Corporation at no
expense to Employee for a period of 180 days after the end of the term of
employment. For purposes of this Exhibit A, the term " family" shall mean the
spouse of the Employee and his dependent children who may be insured from time
to time as dependents under such policies of the Corporation.
2. Automobile. Employee shall be entitled to the use of that certain Lexus
automobile currently being used by Employee. Employee shall be responsible for
the payment of all maintenance, repairs, gasoline and other reasonable and
necessary costs incident to the operation of such automobile except for
insurance which will be paid for by the Corporation.
3. Expenses. It is contemplated that, in connection with his employment
hereunder, Employee may be required to incur reasonable business, entertainment
and travel expenses. The Corporation agrees to reimburse Employee in full for
all such reasonable and necessary business, entertainment and travel expenses
incurred or expended by him in connection with the performance of his duties
hereunder; provided Employee submits to the Corporation vouchers or expense
statements satisfactorily evidencing such expenses as may be reasonably required
by the Corporation and such expenses are in accordance with any corporate policy
with respect thereto.
4. Vacation. Employee shall be entitled to a paid vacation (taken
consecutively or in segments) of 4 weeks during each fiscal year, adjusted pro
rata for any partial fiscal year during the term hereof. Such vacation may be
taken at such times as is reasonably consistent with proper performance by
Employee of his duties and responsibilities hereunder.
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5. Other Benefits. Nothing contained herein shall be deemed to limit or
affect the right of Employee to receive additional bonuses or other forms of
additional compensation or to participate in any retirement, disability, profit
sharing, stock option, cash or stock bonus or other plan or arrangement, or in
any other benefits now or hereafter provided by the Corporation for its
employees or executives at the sole discretion of the Board of Directors of the
Corporation.
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