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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT | Document Parties: DYNCORP INTERNATIONAL INC. You are currently viewing:
This Employment Agreement involves

DYNCORP INTERNATIONAL INC.

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Title: EMPLOYMENT AGREEMENT
Governing Law: New York     Date: 5/13/2008
Industry: Misc. Transportation     Law Firm: Schulte Roth     Sector: Transportation

EMPLOYMENT AGREEMENT, Parties: dyncorp international inc.
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Exhibit 10.1
Execution Copy
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is hereby entered into effective as of May 19, 2008, between DynCorp International LLC, a Delaware limited liability company (the “Company”), and William L. Ballhaus (“Executive”).
In consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Employment.
1.1. Title and Duties. During the Term (as hereinafter defined) of this Agreement, and subject to the terms and conditions set forth herein, the Company agrees to employ Executive as its President and Chief Executive Officer reporting directly to the Chairman of the Board of Directors of DynCorp International Inc. (the “Board”), the Company’s parent company. The Executive shall have such authority and responsibilities as are customarily performed by chief executive officers of businesses similar to those of the Company or as may be specified from time to time by the Board.
1.2. Election to Office. During the Term of this Agreement, the Company shall use its reasonable efforts to cause the Executive to be nominated as a member of the Board.
1.3. Fulfillment of Duties. During the Term of this Agreement, Executive shall (i) devote his full business time and best efforts to the performance of his services hereunder, excluding vacation periods and periods of illness or incapacity, and (ii) perform his services hereunder faithfully, diligently and to the best of his skill and ability.
1.4. Location. During the Term of this Agreement, Executive will perform his duties and services in the greater Washington, D.C. metropolitan area and Executive agrees to make such business trips to the Company’s other locations as may be reasonable and necessary in the performance of his services hereunder.
2. Compensation and Benefits.
2.1. Salary. In consideration of and as compensation for the services agreed to be performed by Executive hereunder, the Company agrees to pay Executive during the Term of this Agreement a base annual salary (the “Base Salary”) of not less than $650,000 per year, less standard deductions and withholdings, payable bi- monthly in accordance with the Company’s regular payroll practices. The Company will review Executive’s Base Salary and other compensation from time to time during the Term of this Agreement and, at the recommendation of the Compensation Committee (the “Committee”) of the Board, may increase his Base Salary or other compensation from time to time. Any increase in Base Salary or other compensation shall in no way limit or reduce any other obligation of the Company hereunder and, once established at an increased rate, Executive’s Base Salary hereunder shall not be reduced, except in connection with an across the board salary reduction for all executives.

 

 


 
2.2. Incentive Compensation. During the Term of this Agreement, the Executive shall be eligible to receive an annual bonus (“Bonus”) pursuant to the terms of the DynCorp International LLC Executive Incentive Plan (the “Executive Incentive Plan”) or any successor plan. The Executive’s target bonus shall be 100% of his Base Salary (“Target Bonus”), with the actual amount of each Bonus being determined by the Board or the Committee in accordance with the terms of the Executive Incentive Plan. The Bonus shall be paid no later than June 15th of the year following the year in which such compensation is awarded. Notwithstanding the foregoing, the Executive’s Bonus for the fiscal year 2009 shall be no less than $625,000 (the “Guaranteed Bonus”) provided he continues to be employed by the Company at the time of the Bonus payout.
2.3. Signing Bonus. The Executive shall receive a one-time signing bonus (“Signing Bonus”) in the amount of $350,000 payable on September 30, 2008, provided the Executive continues to be employed by the Company on September 30, 2008.
2.4. Equity. During the Term of this Agreement, the Executive shall be eligible to participate in the DynCorp International 2007 Omnibus Incentive Plan (“OIP”) or any successor plan. The Executive shall receive a grant of 100,000 restricted stock units (“RSUs”), subject to the terms and conditions of the OIP. Fifty percent (50%) of the RSUs shall vest with respect to one-third of the award on the first anniversary of the Commencement Date (as defined in Section 3.1) and with respect to an additional one-third on each of the next two anniversaries of the Commencement Date thereafter, subject to the Executive’s continued employment with the Company. The remaining fifty percent (50%) of the RSUs shall be earned at the end of fiscal year 2009 upon the achievement of performance goals established by the Committee for the fiscal year 2009, and if earned, shall vest with respect to one-third of the award on the first anniversary of the Commencement Date and with respect to an additional one-third on each of the next two anniversaries of the Commencement Date thereafter, subject to the Executive’s continued employment with the Company. If the performance goals are not achieved, the Executive shall forfeit his rights in such RSUs. It is the intent of the Company to provide the Executive with annual grants during the Term that are at least equivalent in value to the 100,000 RSUs referred to above; provided, however, that any future grants will be subject to the achievement of performance goals established by the Board or the Committee and the grant of any awards shall be determined by the Board or the Committee in its sole discretion; further provided, that nothing contained in this Section 2.4 shall create any obligation on the part of the Company to make any such future grants to the Executive.

 

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In the event of a Change in Control (as defined below), any outstanding and unvested RSUs (other than RSUs that have not been earned or vested because performance conditions have not been achieved) shall fully and immediately vest. “Change in Control” shall mean (x) the acquisition by any person or group of persons (as defined in Section 13(d) of the Securities Exchange Act of 1934), other than by The Veritas Capital Fund II, L.P., or any affiliates thereof of 51% or more of either (i) the then outstanding common shares of DynCorp International Inc. or (ii) the combined voting power of the outstanding voting securities of DynCorp International Inc. entitled to vote generally in the election of the Board, whether by acquisition, consolidation, merger or otherwise; (y) individuals who, as of the Commencement Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a director of DynCorp International Inc. subsequent to the Commencement Date whose election, or nomination for election by DynCorp International Inc. stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board or any committee of the Board, shall be deemed a member of the Incumbent Board; or (z) the sale of all or substantially all of the assets of the Company.
2.5. Other Benefits. During the Term of this Agreement, Executive shall be entitled to participate in all of the applicable employee benefit plans, programs and/or arrangements of the Company which may be available to the other senior executives of the Company on the same terms as such other executives.
3. Term.
3.1. Term. The Term of employment under this Agreement means the period that commenced on May 19, 2008 (the “Commencement Date”) and expiring at midnight on May 18, 2011; provided, that this Agreement will automatically renew for additional periods of one (1) year each commencing on May 19 of each successive year following the initial Term unless written notice of intent not to renew is delivered by the Company or the Executive to the other party at least 90 days prior to the effective date of any renewal hereof.
3.2. Termination of Employment
Executive’s employment with the Company may be terminated under the following conditions:
3.2.1. Retirement, Resignation without Good Cause, Death or Disability . Executive’s employment with the Company shall terminate effective upon the date of Executive’s Retirement from the Company (as defined in Section 5.4), resignation from the Company without Good Cause, death or “Complete Disability” (as defined in Section 5.1).

 

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3.2.2. For Cause . The Company may terminate Executive’s employment under this Agreement for Cause (as defined in Section 5.2) by delivery of written notice to Executive specifying the Cause or Causes relied upon for such termination. Any notice of termination given pursuant to this Section 3.2.2 shall effect termination as of the date specified in such notice or, in the event no such date is specified, on the last day of the month in which such notice is delivered or deemed delivered as provided in Section 8.4 below.
3.2.3. Without Cause . The Company may terminate Executive’s employment under this Agreement at any time and for any reason by delivery of written notice of such termination to Executive. Any notice of termination given pursuant to this Section 3.2.3 shall take effect as of the date specified in such written notice.
3.2.4 Termination due to the Expiration of the Term. Executive’s employment with the Company shall terminate effective upon the last day of the Term, to the extent that either the Executive or the Company elects not to renew the Term pursuant to Section 3.1.
3.2.5. Termination by Executive for Good Cause . Executive may terminate Executive’s employment with the Company for Good Cause (as defined in Section 5.3) upon thirty (30) days written notice to the Company.
3.2.6. Termination by Mutual Agreement of the Parties . Executive’s employment pursuant to this Agreement may be terminated at any time upon the mutual written agreement of the parties. Any such termination of employment shall have the consequences specified in such mutual agreement.
3.2.7. Board/Committee Resignation . Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s affiliates.

 

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4. Compensation upon Termination .
4.1. Retirement, Death or Complete Disability . If Executive’s employment is terminated by his Retirement, death or Complete Disability, the Company shall pay to the Executive (or his heirs or legal representative), within 30 days following termination of employment, Executive’s accrued but unpaid Base Salary to the day of termination and any employee benefits that the Executive is entitled to receive pursuant to the employee benefit plans of the Company and its subsidiaries in accordance with the terms of such employee benefit plans. In addition, upon Executive’s (or his heirs or legal representative) furnishing to the Company an executed waiver and release of claims (a form of which is attached hereto as Exhibit A, which will be revised for signature by Executive’s heirs or legal representative if applicable), which is not revoked, the Company shall pay to the Executive (or his heirs or legal representative), within 30 days following termination of employment, a pro rated portion of Executive’s Bonus that would be payable to the Executive based on projected Company performance through the termination date, less standard deductions and withholdings.
4.2. Termination for Cause by the Company, Resignation by Executive, or Nonrenewal of the Term . If Executive’s employment is terminated by the Company for Cause, if Executive resigns other than for Good Cause, or either the Executive or the Company elects not to renew the Term pursuant to Section 3.1, the Company shall pay, within 30 days following termination of employment, Executive’s accrued but unpaid Base Salary to the day of termination and any employee benefits that the Executive is entitled to receive pursuant to the employee benefit plans of the Company and its subsidiaries in accordance with the terms of such employee benefit plans. In addition, if the Term expires and the Executive’s employment terminates at the election of the Company pursuant to Section 3.1, the Executive shall receive the following:
4.2.1. A payment equivalent to the sum of: (x) the Executive’s Base Salary plus (y) the average of (A) the Bonus earned by the Executive for the fiscal year prior to the year of such termination and (B) the Executive’s Target Bonus, payable in two equal installments. The first payment shall be made on the first payroll date that is six (6) months following the Executive’s termination of employment due to the expiration of the Term at the election of the Company pursuant Section 3.1 and the second payment shall be made on the first payroll date that is twelve (12) months following such termination.
4.2.2. A payment equal to the Executive’s Bonus, if any, that would have been paid during the 90 days following such termination of employment if the Executive’s employment had continued during such 90 days, payable when such Bonus is paid to other executives of the Company.
4.2.3. Full vesting of any RSUs that would have vested during the 90 days following such termination of employment if the Executive’s employment had continued during such 90 days.

 

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4.3. Termination without Cause by the Company or Termination by the Executive for Good Cause . If the Company terminates Executive’s employment without Cause (except under any circumstance in which Section 4.1 is applicable to Executive, in which case this Section 4.3 shall not apply), or if the Executive terminates this Agreement for Good Cause, the Company shall pay to the Executive, within 30 days following termination of employment, (x) Executive’s accrued but unpaid Base Salary to the day of termination and any employee benefits that the Executive is entitled to receive pursuant to the employee benefit plans of the Company and its subsidiaries in accordance with the terms of such employee benefit plans and (y) a pro rated portion of his Bonus that would be payable to the Executive based on projected Company performance through the termination date, less standard deductions and withholdings. In addition, upon Executive’s furnishing to the Company an executed copy of the waiver and release of claims (a form of which is attached hereto as Exhibit A), which is not revoked, Executive (or his heirs or legal representative) shall be entitled to a payment equivalent to two times (x) the Executive’s Base Salary plus (y) the average of (A) the Bonus earned by the Executive for the fiscal year prior to the year of such termination and (B) the Executive’s Target Bonus, or if such termination occurs during fiscal year 2009, the Executive’s Guaranteed Bonus, payable in two equal installments. The first payment shall be made on the first payroll date that is twelve (12) months following such termination, and the second payment shall be made on the first payroll date that is twenty-four (24) months following such termination.
5. Definitions . For purposes of this Agreement, the following terms shall have the following meanings:
5.1 Complete Disability . “Complete Disability” shall mean the inability of Executive to perform Executive’s duties under this Agreement because Executive has become permanently disabled within the meaning of any policy of disability income insurance covering e

 
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