EXHIBIT 10.21
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
Pursuant to this Amended and Restated
Employment Agreement (the "Agreement")
dated February 28, 2005 ("Effective Date"),
Gary S. Ryan ("Executive") and
Digital Fusion, Inc., a Delaware
corporation ("Company"), hereby amend and
restate Executive's Employment Agreement
with Company dated May 5, 2004 ("Old
Agreement") to read in its entirety as
follows:
1. Employment; Term.
(a) Employment. Subject to the terms and conditions set forth herein, the
Company
agrees to employ and
Executive agrees to serve as the
Company's
President
and Chief Operating Officer. During the term of employment,
Executive
shall have such responsibilities, duties and authorities as
commensurate
with presidents of similar size, and additionally, such
responsibilities,
duties and
authorities
as may be assigned to the
Executive by the
Company's Chief
Executive Officer,
provided, that, the
same is not
inconsistent with such position. Executive agrees that he will
use his full
business time to
promote the interests of the Company and its
affiliates and
to fulfill his duties
hereunder. In
addition, the
Company
will elect or
cause the election of
Executive to the Board of Directors of
the Company.
Nothing in this
Agreement shall
however preclude
Executive
from engaging, so long
as, in the reasonable determination of the Company's
Board of
Directors, such
activities do not interfere with the execution of
his duties and
responsibilities
hereunder,
in charitable and community
affairs, from
managing any passive investment made by Executive in publicly
traded
equity securities or other property (provided, that, no such
investment
may exceed 5% of the
equity of any entity,
without the prior
approval of the
Company's Board of
Directors) or from serving, subject to
the prior
approval of the
Company's Board of Directors, as a member of
boards of
directors or as a trustee of any other corporation, association
or entity
(provided, that, no such prior approval shall be required for
any
such boards on
which Executive shall currently serve). For purposes of the
preceding
sentence, any approval of the Company's Board of Directors
required herein
shall not be unreasonably withheld.
(b) Term. Unless sooner terminated pursuant to Section 3, the term of
Executive's
employment
pursuant to this
Agreement shall commence on the
Effective Date
and shall continue thereafter for a period of two years (the
"Term").
Executive
and the Company understand and acknowledge that
Executive's
employment with the
Company constitutes
"at-will" employment.
Subject to the
Company's obligation to provide severance benefits as
specified
herein, Executive and the Company acknowledge that this
employment
relationship may be
terminated at any time, upon written notice
to the other
party, with or without
Cause or Good Reason,
as those terms
are defined
below, at the option of either the Company or Executive.
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2. Compensation. During the employment term
under this Agreement, the Company
shall compensate Executive as follows:
(a) Base Salary. Subject to adjustment
as set forth below, the Company will pay
Executive while
he is employed
hereunder, an
annualized base compensation
of not less than
One Hundred
Seventy-Five Thousand
Dollars
($175,000.00)
per year,
payable in substantially equal bi-monthly installments, or more
frequently in
accordance with
Company's usual payroll policy (the "Base
Salary").
The Company will
review annually
Executive's
performance
and
compensation.
(b) Performance Bonus. Executive shall be entitled to
such bonus compensation
as the
Compensation Committee
deems appropriate.
Such bonus
compensation
shall be
based, in part, on the achievement of performance criteria
established by
the Compensation
Committee, including
criteria relating to
the
profitability of the Company.
(c) Participation in Company Stock Ownership Plan. During the period of
Executive's
employment,
Executive will be entitled to participate in
the
Company's Stock
Option Plan (or such other successor plan), as the Board of
Directors or
Compensation Committee, in its sole discretion, may determine.
Effective as of
the date of this
Agreement, Executive
holds stock options
(the
"Options") to purchase
300,000 shares (the "Shares") of the common
stock of the
Company of the original grant to purchase 450,000 shares of
the common sotck
of the Company, which
Options were granted
to him on May
10, 2004. Executive shall receive an additional stock option grant in
accordance with
Exhibit A attached hereto.
(d) Benefits. Executive will be
eligible to participate in all benefit programs
of the Company
which are in effect for its senior executive personnel and,
to the extent
available to executive
personnel,
its employees
generally
from time to
time.
(e) Vacation. Executive will be entitled each
year to vacation for a period or
periods not
inconsistent
with the normal policy
of Company in effect from
time to time,
but in any event not
less than fifteen
vacation days each
year and to such
holidays as may be
customarily afforded
to its employees
by the Company,
during which periods Executive's compensation shall be paid
in full.
(f) Reimbursement of Expenses.
(i) All reasonable travel and
entertainment expenses incurred by Executive
in the course of fulfilling this Agreement or otherwise
promoting the
Company and its business shall be reimbursed by the Company. Such
reimbursement shall be made to Executive promptly following
submission
to the Company of receipts and other documentation of such expenses
reasonably satisfactory to the Company.
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(ii) In addition
to the expenses
reimbursable pursuant
to paragraph
(i)
above, the Company shall also pay to Executive a monthly
allowance of
$125.00 for telephone expenses.
3. Termination.
(a) Death and Legal Incapacity. Executive's employment hereunder shall
terminate upon
Executive's death or legal incapacity.
(b) Disability. Executive's employment hereunder may be terminated by the
Company in the
event of Executive's Disability. As used in this Agreement,
the term
"Disability" shall
mean the inability or failure of the Executive
to perform the
essential functions of the position for which he has
been
employed by the
Company, for more than
90 consecutive days or
for shorter
periods
aggregating
more than 150 days in
any period
of 12 consecutive
months,
all as determined in good faith by a majority vote of the
disinterested
members of the Company's Board of Directors. Until such
termination
occurs, Executive shall continue to receive his base
salary
Base Salary as
then in effect, provided, however, that such salary shall be
reduced to the
extent of any
short-term disability
benefits provided to
Executive under
a short-term disability plan sponsored by the Company.
(c) For Cause. Executive's employment hereunder may be terminated by the
Company for
cause ("Cause")
upon the occurrence of any of the following
events and in
accordance with the time periods set forth below:
(i) Executive's breach of any material
duty or obligation hereunder, which
breach continues
or renews at any time
after notice and a reasonable
opportunity to desist or otherwise cure has been furnished.
(ii) Executive
is convicted or pleads guilty or nolo contendre to any
felony (other than traffic violation) or any crime
involving fraud,
dishonesty or misappropriation;
(iii)Executive
willfully engages in misconduct that causes material harm
to the Company
(iv) The
Executive willfully
engages in an act that constitutes a conflict
of interest with the Company or a usurpation of a business
opportunity
of the Company, in
either case without the prior written approval of
the Company's Board of Directors.
The determination as to whether any of the foregoing
Causes has
occurred
shall be made in
good faith by the affirmative vote of at least 75% of the
disinterested
members of the
Company's Board of Directors. No event shall
be deemed a
basis for Cause unless Executive is terminated therefore within
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60 days
after such event is known to the
Chairman of the Company or if
Executive is
Chairman, known to the Chairman of any committee of the Board.
(d) For Good Reason. Executive may terminate his
employment hereunder for good
reason ("Good
Reason") if such termination occurs within six months 60 days
after:
(i) The Company assigns to Executive any duties or responsibilities
inconsistent with
Section 1, which assignment is not withdrawn within
20 business
days after Executive's notice to the Company of his
reasonable objection thereto;
(ii) Executive
is relocated
more than 40 miles
from Huntsville,
Alabama
without his prior written consent; or
(iii)The Company
breaches any material
provision of this Agreement and
such breach and the
effects thereof are
not remedied by the
Company
within 20 business days after Executive's notice to the Company of
the
existence of such breach.
(e) Effect of Termination.
(i) If the Company terminates Executive's employment for reasons other
than for Cause, or for Executive's death, legal incapacity or
disability or Disability, or if Executive terminates this Agreement
for Good
Reason, the
obligations
of Executive
under this
Agreement
will terminate
except that the
covenants contained in Section 4(a)
shall continue indefinitely, and the obligations in this section
shall
continue pursuant
to their terms. In such event, for a period of
eighteen (18) months after the date of Executive's termination, the
Company shall pay
Executive, in
accordance with
customary payroll
procedures, Executive's base salary Base Salary as then in effect
and,
in addition, any Performance Bonus that Executive would have earned
in
the year he was
terminated, prorated
as of the date of
termination.
For such eighteen-month period, the Company shall continue
to provide
medical coverage to
Executive under
substantially the same
terms as
were in effect on the date Executive's employment terminated under
this provision.
Additionally, any and all vested options, warrants or
other securities
awarded to Executive pursuant to the Company's Stock
Option Plan
or any other similar plan or other written option
agreement shall,
as of the date of Executive's termination,
immediately vest and
become exercisable and
all such vested options,
warrants or other securities shall remain exercisable by Executive
for
the duration of the period during which the options, warrants or
other
securities would have
remained exercisable
if Executive had remained
employed by the
Company. The amounts
paid to Executive under this
paragraph shall not be
affected in any way by Executive's acceptance
of other employment during the six-month period described
above.
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(ii) Except as
otherwise provided herein, if Executive terminates his
employment for any
reason other than Good Reason or Executive's
employment is terminated for Cause, the obligations of Executive and
the Company
under this
Agreement will terminate except that the
covenants of
Executive contained in Section 4(a) shall continue
indefinitely and the covenants of Executive contained in Section 4(d)
shall continue until the first anniversary of the date of
Executive's
termination. In such
event, Executive shall be entitled to receive
only the compensation
hereunder accrued and
unpaid as of the date of
Executive's termination.
(iii)If
Executive's employment
terminates due to a disability Disability,
as defined in Section 3(b), the obligations of Executive under this
Agreement will
terminated
except that the
covenants in Section 4(a)
shall continue
indefinitely. In such
event, for a period of one year
after the date of
Executive's
termination,
the Company shall pay
Executive, in
accordance
with
customary
payroll
procedures,
Executive's base
salary Base Salary as then in effect, provided,
however, that the
payment of such salary shall be reduced to the
extent of any
long-term disability
benefits provided to Executive
under a long-term
disability
plan sponsored by the Company. The
vesting and
exercise of any and all options, warrants or other
securities awarded to Executive pursuant to the Company's Stock
Option
Plan or any other
similar plan shall be governed by the terms of such
plan, or if awarded pursuant to a written option agreement, then the
terms of such agreement.
(iv) No amount payable to Executive pursuant to this Agreement shall be
subject to mitigation due to Executive's acceptance or availability
of
other employment.
4. Restrictive Covenants;
Non-Competition.
The parties
hereto recognize that Executive's services are special and
unique and that the level of compensation and the provisions herefor for
compensation are partly in consideration of
and conditioned upon Executive's not
competing with the Company.
(a) Except as otherwise permitted hereby, or by the Company's Board of
Directors,
Executive shall treat as confidential and not communicate or
divulge
to any other
person or entity any information related to the
Company or its
affiliates or the business, affairs, prospects, financial
condition
or ownership of the Company or any of its affiliates (the
"Information")
acquired by
Executive from the Company or the Company's
other
employees or agents, except (i) as may be required to comply with
legal
proceedings
(provided,
that, prior to such disclosure in legal
proceedings
Executive notifies the
Company and reasonably
cooperates with
any efforts by the Company to limit the scope of such
disclosure
or to
obtain
confidential treatment thereof by the court or tribunal seeking
such
disclosure) or
(ii) while employed by the Company, as Executive reasonably
believes
necessary in performing his duties. Executive shall use the
Information
only
in connection with the performance of his duties
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hereunder,
and not otherwise for his benefit or the benefit of
any other
person or
entity. For the
purposes of this
Agreement, Information
shall
include,
but not be limited to,
any confidential
information
concerning
clients,
subscribers,
marketing,
business and
operational methods of the
Company or its
affiliates and its and its affiliates' clients, subscribers,
contracts,
financial
or other data, technical data or any other
confidential
or proprietary
information
possessed,
owned or used by
the
Company.
Excluded from
Executive's
obligations of
confidentiality is any
part of such
Information
that: (i) was in the public domain prior
to the
date of
commencement
of Executive's
employment
with the Company or
(ii)
enters the
public domain other
than as a result of
Executive's breach
of
this
coven
