EXHIBIT 99.3
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT
(this “ Agreement ”) is dated as of February 1
2007, by and between SM&A, through its Project Planning
division, (the “Company”), and Richard Bowe (the
“ Employee ”).
WHEREAS , pursuant to the transactions contemplated by
that certain Stock Purchase Agreement dated as of January 19, 2007
(referred to herein as the “SPA”) by and among
SM&A, a Delaware corporation, Project Planning, Incorporated, a
Massachusetts corporation, and Richard Bowe, it is currently
contemplated that SM&A will acquire all of the outstanding
shares of stock of Project Planning, Incorporated;
WHEREAS , the Company wishes to employ the Employee and
the Employee wishes to work for the Company on the terms and
conditions set forth herein; and
WHEREAS , it is agreed by the parties hereto that this
Agreement shall only be effective upon the condition that the
transactions contemplated by the SPA close and become final in
accordance with the SPA and applicable law.
NOW, THEREFORE
, it is hereby agreed as
follows:
§1.
EMPLOYMENT . The Company hereby employs the
Employee, and the Employee hereby accepts employment, upon the
terms and subject to the conditions hereinafter set
forth.
§2.
DUTIES . The Employee shall be employed as the
President of the Project Planning and Scheduling division, and
shall have such responsibilities and duties consistent with such
position, and as are assigned to him from time to time by the
Senior Vice President of Program Services and the Board of
Directors of SM&A (“Board”). The Employee
agrees to devote his full time and best efforts to the performance
of his duties to the Company. The foregoing shall not be
construed to prohibit the Employee from engaging in activities
relating to serving on civic and charitable boards or committees,
and managing his personal investments, provided that such
activities do not interfere or conflict with the performance by the
Employee of his duties, responsibilities, or authorities
hereunder.
§3.
TERM . The Employee’s term of employment
hereunder shall commence on the date of the Closing as defined in
the SPA (the “ Commencement Date ”) and shall
continue until the second year anniversary of the Commencement Date
(“Term”), unless earlier terminated pursuant to §6
hereof.
§4.
COMPENSATION AND BENEFITS . In consideration
for the Employee’s services hereunder, the Company shall
compensate the Employee as follows:
(a)
Base Salary . The Company shall pay the
Employee an annual base salary of Two Hundred Thousand Dollars and
No Cents ($200,000) (the “ Base Salary
”), with potential for annual increases based on performance,
in the sole discretion of the Company,
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less applicable withholdings under
state and federal law, and in accordance with the Company’s
payroll practices. The Base Salary shall be reviewed (but not
decreased) annually by the Company’s Senior Vice President of
Program Services and approved by the Company’s Chief
Financial Officer.
(b)
Incentive Compensation . The Employee shall be
eligible to receive up to One Hundred Thousand Dollars and No Cents
($100,000) annually in incentive compensation based upon several
factors including, the financial performance of the Project
Planning and Scheduling division, the diversification of its client
base, the documentation and sales of the “Project Scorecard
Manager”, employee recruitment, employee retention, and other
mutually agreeable financial and non-financial goals, and shall be
determined in a manner consistent with other executives of SM&A
holding the title of Senior Vice President or higher.
(c)
Stock Options . In return for the
Employee’s covenants set forth in §7(b), the Employee
shall be eligible to receive a potential award of options to
acquire the Company’s common stock, with up to 15,000 options
to be available for grant for each of the next three years.
The options, if awarded, shall be granted within 30 days prior to
or after the Employee’s first, second and third anniversary
of the Commencement Date, and vest in accordance with the normal
four year schedule from the date of grant applicable to other
SM&A senior executives. The Employee’s eligibility
to receive the options shall be based on several factors,
including, the financial performance of the Project Planning and
Scheduling division, the diversification of its client base, the
documentation and sales of the “Project Scorecard
Manager”, employee recruitment, employee retention, and other
mutually agreeable financial and non-financial goals, and shall be
granted pursuant to SM&A’s Second Amended and Restated
Equity Incentive Plan. Any options not vested at the time of
termination of the Employee’s employment, whether initiated
by the Employee or the Company, shall be forfeited. The
Company’s Compensation Committee agrees to reserve 45,000
options for issuance to the Employee, subject to meeting the
performance criteria, until the awards are finally
determined.
(d)
Personal Time Off (PTO) and Holidays .
The Employee shall
be provided the same paid PTO and holiday benefits provided to
other similarly situated employees, but not less than thirty (30)
days of PTO. The amount, eligibility, and extent of this
benefit shall be governed by the applicable benefit plan or
program. Any PTO shall be taken at the reasonable and mutual
convenience of the Company and the Employee. Any accrued and
unused PTO will be paid out to the Employee upon
termination.
(e)
Benefits . The Employee shall be eligible to
participate in the same benefit programs offered to other similarly
situated employees, and in effect from time to time. The amount,
eligibility, and extent of the benefits shall be governed by the
applicable benefit plan or program.
§5.
EXPENSES . The Company shall reimburse the
Employee for all reasonable business expenses of types authorized
by the Company and reasonably and necessarily incurred by the
Employee in the performance of his duties, responsibilities, and
authorities hereunder. Reasonable business expenses include
cell phones with data plans, laptop computer and home-office
internet access. The Employee shall comply with such budget
limitations and approval and reporting requirements with respect to
expenses as the Company may establish from time to time, as
applicable to similarly situated employees.
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§6.
TERMINATION . The Employee’s employment
hereunder shall commence on the Commencement Date and continue
until the earlier of (i) the expiration of the Term or (ii) the
occurrence of any of the following:
(a)
Death or Disability . The Employee’s
employment shall terminate upon the death of the Employee during
the Term or at the option of the Company and subject to applicable
law, in the event of the Employee’s disability, upon thirty
(30) days’ written notice. The Employee shall be deemed
disabled if an independent medical doctor (selected by the
Company’s health insurer) certifies that the Employee has for
ninety (90) consecutive days or one hundred twenty (120)
non-consecutive days in any twelve (12) month period been disabled
in a manner which has rendered him unable to perform the essential
functions of his job duties with or without reasonable
accommodation. The Employee will cooperate in submitting to a
medical examination for the purpose of certifying disability under
this §6(a) if requested by the Board.
(b)
For Cause . The Company may terminate the
Employee’s employment for “Cause” immediately
upon written notice by the Company to the Employee. For
purposes of this Agreement, “ Cause ” shall
mean:
(i)
the Employee has committed any act of fraud, embezzlement,
misappropriation or theft in the course of the Employee’s
employment with the Company;
(ii)
the Employee has been convicted by a court of competent
jurisdiction of, or pleaded guilty or nolo contendere to any felony
or any crime involving moral turpitude; or
(iii)
the Employee has (A) performed his duties in a grossly negligent
manner or has willfully disregarded his job duties and
responsibilities under this Agreement, as determined by the Senior
Vice President of Program Services or the Board; (B) failed to
follow the reasonable written instructions of the Senior Vice
President of Program Services or the Board, or (C) breached any
material provision of this Agreement; provided that ,
such failure or breach, if susceptible to cure, is not cured within
fifteen (15) days following receipt of written notice from the
Company.
(c)
Termination without Cause . The Company and
the Employee may terminate the Employee’s employment without
cause at any time.
(d)
Termination for Good Reason . The Employee may
terminate the Employee’s employment for “Good
Reason” immediately (subject to the cure periods below). For
purposes of this Agreement, “ Good Reason ”
shall mean:
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(i)
any failure by the Company to pay any base salary or other
compensation or benefits owed to the Employee when due, if such
failure is not cured within fifteen (15) days following receipt of
written notice from the Employee;
(ii)
any material
reduction by the Company of any base salary or other compensation
or benefits paid to the Employee, if such reduction is not cured
within fifteen (15) days following receipt of written notice from
the Employee;
(iii)
the assignment to
the Employee, without his consent, of a change in title or duties
inconsistent with the Employee’s position, in each case so as
to constitute a material diminution of status with the Company, if
such is not cured within fifteen (15) days following receipt of
written notice from the Employee;
(iv)
any relocation of
the Employee’s primary office thirty (30) miles or more from
the current location, if such is not cured within fifteen (15) days
following receipt of written notice from the Employee;
or
(v)
any material breach of this Agreement by the Company, if such
breach is not cured within fifteen (15) days following receipt of
written notice from the Employee.
(e)
Rights and Remedies on Termination .
Upon the termination of this
Agreement in accordance with §6(a)-6(d), or if the Employee
resigns for any reason, the Employee shall be entitled to receive
only that compensation accrued but unpaid through the
Employee’s termination date as required under applicable
law. The Employee will not be entitled to receive any
severance, bonus or other payments, provided however, that the
Employee shall still retain those rights and benefits as set forth
in the SPA. Termination of this Agreement or the
Employee’s employment for any reason, whether initiated by
the Employee or the Company, shall not affect the Employee’s
continuing obligations under §7 herein, and the Employee shall
continue to be bound by those obligations.
§7.
CONFIDENTIAL INFORMATION,
NON-COMPETE, NON DISPARAGEMENT, INVENTIONS
ASSIGNMENT .
(a)
Confidentiality . The Employee recognizes and
acknowledges that he has acquired and will acquire confidential,
proprietary and trade secret information concerning the Company,
and its divisions, subsidiaries and affiliates, including, without
limitation, the identities, contact information, purchasing
patterns, contracts and terms of contracts of customers, merchants,
vendors or suppliers and agents, pricing policies, methods of
operation, proprietary computer programs, sales, profit, cost and
other financial information, market information, business
strategies, employee information, technical processes, information
processing standards and practices, customer service and service
quality standards, trade secrets and other confidential information
about customers, merchants, vendors and suppliers (hereinafter
called “ Confidential Information
”). The Employee shall not, during or after the Term,
use or disclose any Confidential Information to any person, firm,
corporation, association, or any other entity for any reason or
purpose whatsoever, directly or indirectly, except as may
be
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required
