EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 1st day of November, 1997, between Condor
Technology Solutions, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇. (the "Executive").
WHEREAS, the parties hereto wish to enter into an employment agreement to
employ the Executive as the Vice President-Finance of the Company and to set
forth certain additional agreements between the Executive and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and representations
contained herein, the parties hereto agree as follows:
1. TERM.
The Company will employ the Executive, and the Executive will serve the Company,
under the terms of this Agreement for an initial term of three (3) years,
commencing on the date hereof. Effective as of the expiration of such initial
three-year term and as of each anniversary date thereof, the term of this
Agreement shall be extended for an additional 12-month period unless, not later
than two months prior to each such respective date, either party shall have
given notice to the other party that the term shall not be so extended.
Notwithstanding the foregoing, the Executive's employment hereunder may be
earlier terminated, as provided in Section 4 hereof. The term of this
Agreement, as in effect from time to time in accordance with the foregoing,
shall be referred to herein as the "Term." The period of time between the
commencement and the termination of the Executive's employment hereunder shall
be referred to herein as the "Employment Period."
2. EMPLOYMENT.
(a) Position and Reporting. The Company hereby employs the Executive for
the Employment Period as Vice President-Finance of the Company on the terms and
conditions set forth in this Agreement.
(b) Authority and Duties. The Executive shall exercise such authority,
perform such executive duties and functions and discharge such responsibilities
as are reasonably associated with the Executive's position, commensurate with
the authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of the Company. Without limiting the generality of
the foregoing, the Executive shall report directly and be responsible to the
President and Chief Executive Officer of the Company . During the Employment
Period, the Executive shall devote his full business time, skill and efforts to
the business of the Company. Notwithstanding the foregoing, the Executive may
(i) make and manage passive personal business investments of his choice (in the
case of publicly-held corporations, not to exceed one percent (1%) of the
outstanding voting stock) and serve in any capacity with any civic, educational
or charitable organization, or any trade association, without seeking or
obtaining approval by the Board of Directors of the Company
(the "Board"), provided such activities and service do not materially interfere
or conflict with the performance of his duties hereunder and (ii) with the
approval of the Board, which shall not be unreasonably withheld, serve on the
boards of directors of other corporations.
3. COMPENSATION AND BENEFITS.
(a) Salary. During the Employment Period, the Company shall pay to the
Executive, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $110,000 per annum, payable
in arrears not less frequently than monthly in accordance with the normal
payroll practices of the Company. Such base salary shall be subject to review
each year for possible increase by the Board, but shall in no event be decreased
from its then-existing level during the Employment Period.
(b) Annual Bonus. During the Employment Period, the Executive shall have
the opportunity to earn an annual bonus in accordance with a Company annual
bonus program to be established by the Board for senior executives of the
Company and its subsidiaries. The payment of any annual bonus under any such
program shall be contingent upon the achievement of certain corporate and/or
individual performance goals established by the Board in its discretion and
shall not exceed an amount equal to the Executive's base salary.
(c) Other Benefits. During the Employment Period, the Executive shall be
entitled to participate in all of the employee benefit plans, programs and
arrangements in effect during the Employment Period that are generally available
to senior executives of the Company, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans, programs and
arrangements. In addition, during the Employment Period, the Executive shall
be entitled to fringe benefits and perquisites comparable to those of other
senior executives of the Company, including, but not limited to, four (4) weeks
of paid vacation per year.
(d) Business Expenses. During the Employment Period, the Company shall
reimburse the Executive for all documented reasonable business expenses
incurred by the Executive in the performance of his duties under this Agreement,
in accordance with the Company's policies.
(e) Indemnification. During the Employment Period and thereafter, the
Company shall indemnify the Executive to the fullest extent permitted by
applicable law, and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of the directors and officers of the Company, with respect to all costs, charges
and expenses, including attorneys' fees, whatsoever incurred or sustained by
the Executive in connection with any action, suit or proceeding (other than any
action, suit or proceeding brought by or in the name of the Company against the
Executive) to which he may be made a party by reason of being or having been a
director, officer or employee of the Company or his serving or having served any
other enterprise as a director, officer or employee at the request of the
Company.
2
4. TERMINATION OF EMPLOYMENT.
(a) Termination for Cause. The Company may terminate the Executive's
employment hereunder for cause. For purposes of this Agreement and subject to
the Executive's opportunity to cure as provided in Section 4 (c) hereof, the
Company shall have "cause" to terminate the Executive's employment hereunder if
such termination shall be the result of:
(i) willful fraud or dishonesty in connection with the Executive's
performance hereunder that results in material harm to the Company;
(ii) the failure by the Executive to substantially perform his duties
hereunder that results in material harm to the Company; or
(iii) the conviction for, or plea of nolo contendere to, a charge
of commission of a felony.
(b) Termination for Good Reason. The Executive shall have the right at
any time to terminate his employment with the Company at any time and for any
good reason. For purposes of this Agreement and subject to the Company's
opportunity to cure as provided in Section 4 ( c) hereof, the Executive shall
have "good reason" to terminate his employment hereunder if such termination
shall be the result of:
(i) a material diminution during the Employment Period in the
Executive's duties or responsibilities as set forth in Section 2 hereof;
(ii) a material breach by the Company of the compensation and
benefits provisions set forth in Section 3 hereof;
(iii) a notice of termination by the Executive under Section 4 (
c) hereof within 12 months following the occurrence of a Change in Control
(as defined in Section 4 (e) hereof); or
(iv) a material breach by the Company of any other term of this
Agreement.
(c) Notice and Opportunity to Cure. Notwithstanding the foregoing, it
shall be a condition precedent to the Company's right to terminate the
Executive's employment for "cause" and the Executive's right to terminate his
employment for "good reason" that (1) the party seeking the termination shall
first have given the other party written notice stating with specificity the
reason for the termination ("breach"); (2) if the Executive is terminated for
"cause," the Company provides the Executive an opportunity to appear before the
Board to answer such grounds for termination; and (3) if such breach is
susceptible of cure or remedy, a period of 30 days from and after the giving of
such notice shall have elapsed without the breaching party having effectively
cured or remedied such breach during such 30-day period, unless such breach
cannot be cured or remedied within 30
3
days, in which case the period for remedy or cure shall be extended for a
reasonable time (not to exceed an additional 30 days), provided the breaching
party has made and continues to make a diligent effort to effect such remedy or
cure.
(d) Termination Upon Death or Permanent and Total Disability. The
Employment Period shall be terminated by the death of the Executive. The
Employment Period may be terminated by the Company if the Executive shall be
rendered incapable of performing his duties to the Company by reason of a
"disability," defined as either (i) any medically determined physical or mental
impairment that can be expected to result in death or that can be expected to
last for a period of six or more consecutive months from the first date of the
Executive's absence, or (ii) due to a total and permanent "disability" that can
be expected to last for a period of six or more consecutive months from the
first date of the Executive's absence, as such term is defined in the Company's
long term disability insurance policy or contract as may be in effect from time
to time for the benefit of employees of the Company (either, a "Disability").
If the Employment Period is terminated by reason of a Disability of the
Executive, the Company shall give 30 days' advance written notice to that effect
to the Executive. If the existence of a Disability hereunder is in dispute, it
shall be resolved by two physicians, one appointed by the Executive and one
appointed by the Company. If the two physicians so selected cannot agree as to
whether or not the Executive has a Disability, the two physicians so selected
shall designate a third physician and a majority of the three physicians so
selected shall determine whether or not the Executive has a Disability.
(e) Definition of Change in Control. A "Change in Control" shall be
deemed to have taken place if:
(i) there shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's capital stock are converted
into cash, securities or other property other than a consolidation or
merger of the Company in which the holders of the Company's voting stock
immediately prior to the consolidation or merger shall, upon consummation
of the consolidation or merger, own at least 50% of the voting stock of the
surviving corporation, or any sale, lease, exchange or other transfer (in
one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the
Company; or
(ii) 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 after the date hereof become the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly,
of securities of the Company representing 35% or more of the voting power
of all then outstanding securities of the Company having the right under
ordinary circumstances to vote in an election of the Board (including,
without limitation, any securities of the Company that any such person has
the right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise, which shall be deemed
beneficially owned by such person); or
4
(iii) individuals who at the date hereof constitute the entire
Board and any new directors whose election by the Board, or whose
nomination for election by the Company's stockholders, shall have been
approved by a vote of at least a majority of the directors then in office
who either were directors at the date hereof or whose election or
nomination for election shall have been so approved (the "Continuing
Directors") shall cease for any reason to constitute a majority of the
members of the Board;
5. CONSEQUENCES OF TERMINATION.
(a) Termination Without Cause or for Good Reason. In the event of
termination of the Executive's employment hereunder by the Company without
"cause" (other than upon death or Disability) or by the Executive for "good
reason" (each as defined in Section 4 hereof), the Executive shall be entitled
to the following severance pay and benefits:
(i) Severance Pay - severance payments in the form of continuation of
the Executive's base salary as in effect immediately prior to such
termination over the longer of: (A) the then-remaining Term hereof; or
(B) 12 months (the "Severance Period").
(ii) Benefits Continuation - continuation for the Severance
Period of coverage under the group medical care, disability and life
insurance benefit plans or arrangements in which the Executive is
participating at the time of termination; provided, however, that the
Company's obligation to provide or cause to be provided such coverages
shall be terminated if the Executive obtains comparable substitute coverage
from another employer at any time during the Severance Period. The
Executive shall be entitled, at the expiration of the Severance Period, to
elect continued medical coverage in accordance with section 4980B of the
Internal Revenue Code of 1986, as amended (or any successor provision
thereto); and
(iii) Stock Options - all options to purchase shares of the
Company's Common Stock held by the Executive immediately prior to
termination of employment shall become immediately vested and exercisable
and, subject to the terms of the Company's 1997 Long-Term Incentive Plan,
shall remain exercisable for the duration of the Severance Period.
(b) Other Terminations. In the event of termination of the Executive's
employment hereunder for any reason other than those specified in Section 5(a)
hereof, the Executive shall not be entitled to any severance pay, benefits
continuation or stock option rights contemplated by the foregoing, except as may
otherwise be provided under the applicable benefit plans or award agreements
relating to the Executive.
(c) Accrued Rights. Notwithstanding the foregoing provisions of this
Section 5, in the event of termination of the Executive's employment hereunder
for any reason, the Executive shall be entitled to payment of any unpaid portion
of his base salary through the effective date of termination, and payment of any
accrued but unpaid rights solely in accordance with the terms of any incentive
bonus, stock option or employee benefit plan or program of the Company.
5
6. CONFIDENTIALITY.
The Executive agrees that he will not at any time during the Term hereof or at
any time thereafter for any reason, in any fashion, form or manner, either
directly or indirectly, divulge, disclose or communicate to any person, firm,
corporation or other business entity, in any manner whatsoever, any confidential
information or trade secrets concerning the business of the Company and its
subsidiaries, including, without limiting the generality of the foregoing, the
techniques, methods or systems of its operation or management, any information
regarding its financial matters, or any other material information concerning
the business of the Company and its subsidiaries, their manner of operation,
their plans or other material data. The provisions of this Section 6 shall not
apply to (i) information that is public knowledge other than as a result of
disclosure by the Executive in breach of this Section 6; (ii) information
disseminated by the Company or any of its subsidiaries to third parties in the
ordinary course of business; (iii) information lawfully received by the
Executive from a third party who, based upon inquiry by the Executive, is not
bound by a confidential relationship to the Company or any of its
subsidiaries;or (iv) information disclosed under a requirement of law or as
directed by applicable legal authority having jurisdiction over the Executive.
7. INVENTIONS.
The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions of
value to the Company and its subsidiaries. The Executive hereby assigns to the
Company all right, title and interest in such contributions and inventions made
or conceived by the Executive alone or jointly with others during the Employment
Period that relate to the business of the Company or any of its subsidiaries.
This assignment shall include (a) the right to file and prosecute patent
applications on such inventions in any and all countries, (b) the patent
applications filed and patents issuing thereon, and (c) the right to obtain
copyright, trademark or trade name protection for any such work product. The
Executive shall promptly and fully disclose all such contributions and
inventions to the Company and assist the Company in obtaining and protecting the
rights therein (including patents thereon) in any and all countries; provided,
however, that said contributions and inventions will be the property of the
Company, whether or not patented or registered for copyright, trademark or trade
name protection, as the case may be. The Executive hereby agrees to execute any
documentation requested by the Company to be so executed if such request is made
in order to carry out the purpose and terms of this paragraph. Inventions
conceived by the Executive that are not related to the business of the Company
or any of its subsidiaries will remain the property of the Executive.
8. NON-COMPETITION.
The Executive agrees that he shall not during the Employment Period and, if
applicable, the Severance Period, without the approval of the Board, directly
or indirectly, alone or as partner, joint venturer, officer, director, employee,
consultant, agent, independent contractor or stockholder (other than as provided
below) of any company or business, engage in any "Competitive Business" within
the United States. For purposes of the foregoing, the term "Competitive
Business" shall mean any
6
business involved in providing information technology solutions, including, but
not limited to, desktop services, software development, systems design and
integration, large scale survey research, recruiting and comprehensive marketing
and sales, which is in direct competition with the Company or any of its
subsidiaries in any community in which the Company or any of its subsidiaries is
doing business. Notwithstanding the foregoing, the Executive shall not be
prohibited during the non-competition period applicable above from acting as a
passive investor where he owns not more than one percent (1%) of the issued and
outstanding capital stock of any publicly-held company. During the period that
the above non-competition restriction applies, the Executive shall not, without
the written consent of the Company, solicit or encourage any employee of the
Company or any current or future subsidiary or affiliate thereof to terminate
his or her employment.
9. BREACH OF RESTRICTIVE COVENANTS.
The parties agree that a breach or violation of Section 6, 7 or 8 hereof will
result in immediate and irreparable injury and harm to the innocent party, which
party shall have, in addition to any and all remedies of law and other
consequences under this Agreement, the right to an injunction, specific
performance or other equitable relief to prevent the violation of the obligation
hereunder.
10. NOTICES.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
(a) If to the Company, to:
CONDOR TECHNOLOGY SOLUTIONS, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to the Executive, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
c/o CONDOR TECHNOLOGY SOLUTIONS, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as a party hereto shall designate to the other party by
like notice, provided that notice of a change of address shall be effective only
upon receipt thereof.
7
11. ARBITRATION: LEGAL FEES.
Except as provided in Section 9 hereof, any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by arbitration
in McLean, Virginia in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in any court having jurisdiction. The Company shall reimburse the Executive for
all reasonable legal fees and costs and other fees and expenses that the
Executive may incur in respect of any dispute or controversy arising against the
Company under or in connection with this Agreement; provided, however, that the
Company shall not reimburse any such fees, costs and expenses if the fact finder
determines that an action brought by the Executive was substantially without
merit or the Executive is otherwise unsuccessful in such an action..
12. WAIVER OF BREACH.
Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either the
Executive or of the Company.
13. NON-ASSIGNMENT: SUCCESSORS.
Neither party hereto may assign his or its rights or delegate his or its duties
under this Agreement without the prior written consent of the other party;
provided, however, that (i) subject to the rights of the Executive under Section
4(b) hereof, this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company upon any sale of all or substantially
all of the Company's assets, or upon any merger, consolidation or reorganization
of the Company with or into any other corporation, all as though such successors
and assigns of the Company and their respective successors and assigns were the
Company; and (ii) this Agreement shall inure to the benefit of and be binding
upon the heirs, assigns or designees of the Executive to the extent of any
payments due to the Executive hereunder. As used in this Agreement, the term
"Company" shall be deemed to refer to any such successor or assign or the
Company referred to in the preceding sentence.
14. WITHHOLDING OF TAXES.
All payments required to be made by the Company to the Executive under this
Agreement shall be subject to the withholding of such amounts, if any, relating
to tax, and other payroll deductions as the Company may reasonably determine it
should withhold pursuant to any applicable law or regulation.
15. SEVERABILITY.
To the extent any provision of this Agreement or portion thereof shall be
invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and shall
continue in full force and effect.
8
16. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.
17. GOVERNING LAW.
This Agreement shall be construed, interpreted and enforced in accordance with
the laws of the State of Virginia.
18. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement by the Company and the Executive
with respect to the subject matter hereof and supersedes any and all prior
agreements or understandings between the Executive and the Company with respect
to the subject matter hereof, whether written or oral. This Agreement may be
amended or modified only by a written instrument executed by the Executive and
the Company.
9
IN WITNESS WHEREOF, the parties have executed this Agreement as of November
1, 1997.
CONDOR TECHNOLOGY SOLUTIONS, INC.
By: /s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman of the Board
THE EXECUTIVE
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
10