Exhibit 10.19
EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is made as of this 13th day of May, 2009
(the “Effective Date”) between SRA International, Inc.
(“SRA”), a company with its principal place of business
located in Fairfax, Virginia, and Richard J. Nadeau (the
“Employee”).
WITNESSETH
:
In consideration of the mutual
promises and agreements of the parties hereto and other good and
valuable consideration, the receipt and sufficiency of which is
acknowledged by the parties hereto, it is agreed as
follows:
WHEREAS, SRA is engaged in a highly
competitive business and has expended substantial amounts of money,
time and expertise is developing, maintaining and perfecting its
services to its clients;
WHEREAS, the Employee wishes to be
employed by and provide personal services to SRA, in return for
certain compensation; and
WHEREAS, the parties wish to set
forth in this Agreement the basis and terms of their employment
relationship;
NOW, THEREFORE, the parties hereto
agree as follows:
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1.
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EMPLOYMENT : The
Employee beginning as of June 1, 2009 will be employed as SRA
Chief Financial Officer and an SRA Executive Vice President;
provided that, at any time at the sole discretion of the President
and Chief Executive Officer (the “CEO”) of SRA, the
Employee instead may be employed as managerial lead for an
operating sector of SRA or its affiliates reporting (at the
discretion of the CEO) to the President or to the Chief Operating
Officer (herein referred to as an “Operating Sector
Leader”). In each case, the Employee’s employment will
be subject to a decision by SRA to end his employment at any time.
This employment is strictly at-will, meaning that SRA may terminate
the employment relationship at any time, with or without advance
notice, for any reason or no reason. The at-will nature of this
employment relationship cannot be altered in any way without an
express written agreement signed by both the Employee and the CEO
of SRA. Nothing herein shall in any way limit the right of the CEO
of SRA at his sole discretion from time to time to establish or
modify the SRA operating sectors, and no rights shall be created as
a consequence thereof. This Agreement shall be subject to
fulfillment to the satisfaction of SRA of the following conditions
precedent: (a) successful completion of a background
investigation and continued eligibility for the required security
clearance; (b) execution of a Nonstatutory Stock Option
Agreement and a Restricted Stock Agreement; (c) execution of a
Non-Disclosure, Non-Solicitation and Assignment of Inventions
Agreement and other standard documentation for our new employees;
and (d) approval of the SRA Compensation Committee and of the
SRA Board of Directors.
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2.
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RESPONSIBILITIES AND OBLIGATIONS
: Subject to the terms and conditions herein, the
Employee shall continue to serve in the capacity of Chief Financial
Officer reporting to the CEO (or, as provided in Section 1
above, as an Operating Sector Leader reporting (at the discretion
of the CEO) to the President or to the Chief Operating Officer) and
shall have such duties and responsibilities as the CEO shall from
time to time assign to him. The Employee shall devote his full
time, attention and energies to the business and interests of SRA.
The Employee shall not become involved with any other business
entity, whether as an employee, consultant, director or in any
other capacity, without the prior written consent of the CEO of
SRA. This restriction on outside employment is not intended to
limit Employee’s service (without SRA liability or indemnity)
on the Boards of Directors of schools, community associations, or
other similar nonprofit roles, provided that there is no conflict
between such outside activities and the substance of his work on
behalf of SRA or his commitment to full-time work on behalf of SRA
and provided that Employee notifies the CEO of SRA of his intent to
undertake such outside activities.
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3.
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COMPENSATION AND BENEFITS
: As compensation for the services to be provided
under this Agreement, the Employee shall be paid and provided
certain benefits as follows:
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(a)
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Signing Bonus; Annual Salary;
Bonus : SRA will pay the
Employee a signing bonus of $15,000 no later than June 30,
2009 and will pay the Employee an annual salary of $390,000,
subject to such terms and conditions as the CEO of SRA and the
Compensation Committee of the SRA Board of Directors (the
“Compensation Committee”) may specify. The Employee
first will be eligible for a review of his salary by the CEO of SRA
and the Compensation Committee beginning at six months following
the date hereof. SRA may, in its sole discretion, also pay the
Employee a bonus of up to eighty percent (80%) of such annual
salary, with the amount of the bonus (if any) being determined
based upon the achievement of company and individual goals set by
the CEO of SRA and the Compensation Committee and otherwise subject
to the terms and conditions of the Cash Incentive Plan (which
currently includes, without limitation, payments of seventy percent
(70%) of any awarded bonus during the calendar year of award,
followed by fifteen percent (15%) during each of the
subsequent two years, subject to continued employment), as such
plan may be modified from time to time in the sole discretion of
the Compensation Committee. For FY09, Employee will be eligible for
a pro rata bonus based on period of employment with SRA during such
fiscal year (and otherwise on the foregoing terms and conditions.)
Such signing bonus, salary and bonus shall be payable in accordance
with SRA normal payroll practices, less such deductions and
withholdings as are required by applicable law and any additional
tax withholdings or optional insurance deductible and similar
amounts as are requested by the Employee, and shall be subject to
periodic adjustment in accordance with procedures of the
Compensation Committee and the CEO of SRA. Should the
Employee’s employment with SRA terminate for any reason prior
to the payment of all or any portion of any bonus under this
Subsection, then, except as otherwise expressly
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provided herein, the Employee
will not be eligible to receive payment of such bonus (or any
unpaid portion thereof).
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(b)
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Special
Grant of Restricted Stock and Stock Options : Subject to the SRA Board of Directors’
approval at its next regular meeting (and no later than
October 1, 2009) and the Employee’s continued employment
on the date of grant, the Employee shall receive a grant of 6700
shares of restricted stock and 56,100 stock options (with exercise
price as set by the SRA Board of Directors). The terms and
conditions set forth in the SRA 2002 Stock Incentive Plan and the
Employee’s award agreement (which the Employee agrees to
execute as a condition of the grants), including but not limited to
eligibility, vesting (with vesting to occur in equal annual amounts
over a period of four years from the date of award) and repurchase,
shall govern all aspects of these grants. Any grants described
herein shall be reduced by such deductions and withholdings as are
required by applicable law. Employee will be eligible for any
further annual equity grants by the SRA Board of Directors (in its
sole discretion) beginning following FY10.
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(c)
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Other
Benefits : The Employee
shall be entitled to participate in all employee benefit programs
that other employees at the same level as the Employee are entitled
to participate in, subject to the eligibility requirements and
other provisions of such programs. SRA retains the right at any
time to alter, modify or terminate such benefits in its sole
discretion and without advance notice to the Employee.
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(d)
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Personal and
Holiday Leave : The
Employee shall be entitled to receive personal and holiday leave in
the same amount and under the same conditions as SRA generally
provides to its employees holding positions similar to that of the
Employee (currently expected to be annually twenty-five days of
personal leave and nine holidays); provided that SRA retains the
right at any time to alter, modify or terminate such leave benefits
in its sole discretion and without advance notice to the
Employee.
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(e)
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“Double Trigger” Change in Control
Vesting : If a Change in
Control (as defined below) occurs, the Employee is employed by SRA
(or successor thereto) immediately prior to such Change of Control
and, as a result of such Change in Control, either:
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(i)
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SRA Becomes
Subsidiary and No Employment Offer : SRA (or successor thereto) becomes a
subsidiary of the acquiring entity or an affiliate of the acquiring
entity and the Employee is not offered (or does not otherwise
retain) the position (regardless of actual title) having
substantially all of the material responsibilities of Chief
Financial Officer of the entity that is the ultimate parent of SRA
(or successor thereto) or of an Operating Sector Leader of such
entity, SRA or successor thereof; or
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(ii)
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SRA Does Not Become Subsidiary
and No Employment Offer or Retention : The preceding clause (i) does not apply,
but the Employee is
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not offered (or does not
otherwise retain) the position (regardless of actual title) having
substantially all of the material responsibilities of Chief
Financial Officer or of an Operating Sector Leader of SRA (or its
successor) as of the date of the Change in Control;
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(iii)
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Division
Level or Similar Employment Offer; 80%/20% Vesting
: If in connection with such Change
in Control the Employee nonetheless is offered (or otherwise
retains) the position (regardless of actual title) having
substantially all of the material responsibilities of either
(x) Chief Financial Officer of an entity or division of annual
revenue size equal or greater than that of SRA immediately prior to
the Change in Control or (y) an Operating Sector Leader of a
sector of annual revenue size roughly comparable to or greater than
that of an SRA sector immediately prior to the Change in Control,
then eighty percent (80%) of the unvested nonqualified (or
nonstatutory) stock options and shares of restricted stock held by
the Employee as of the date of such Change in Control shall vest in
full as of the date of the Change in Control, and, provided the
Employee remains employed by SRA or successor thereto as of the
one-year anniversary date of the Change in Control, the remaining
twenty percent (20%) of such unvested nonqualified (or
nonstatutory) stock options and shares of restricted stock held by
the Employee as of the date of such Change in Control shall vest in
full as of such one-year anniversary date of the Change in Control
; or
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(iv)
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No Division
Level or Similar Employment Offer/100% Vesting
: In any case in which
(iii) above is not applicable, all of the nonqualified (or
nonstatutory) stock options and shares of restricted stock held by
the Employee as of the date of a Change in Control shall vest in
full as of the date of the Change in Control.
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(f)
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For the purpose
of this Agreement, “Change in Control” shall mean any
of the following:
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(i)
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New
Significant Shareholder :
Any Person (such term being used herein with the same meaning as
defined in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended to include syndicates or groups)
becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of SRA representing
thirty-five percent (35%) or more of the combined voting power
of then outstanding securities of SRA; provided ,
however , that:
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(A)
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such Person shall not include
(w) SRA or any subsidiary of SRA, (x) a corporation or
other entity owned, directly or indirectly, by the shareholders of
SRA in substantially the same proportions as their
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ownership of SRA, (y) an
employee benefit plan (or related trust) sponsored or maintained by
SRA or any subsidiary of SRA, or (z) Ernst Volgenau, William
Brehm or any “Permitted Transferee” (used herein as
defined in the Amended and Restated Certificate of Incorporation of
SRA International, Inc.) of either Mr. Volgenau or
Mr. Brehm so long as such transferee continues to so qualify
as a Permitted Transferee; and
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(B)
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no crossing of
such 35% threshold shall be a “Change in Control” if it
is caused (x) solely as a result of an acquisition by SRA of
its voting securities or (y) solely as a result of an
acquisition of voting securities of SRA directly from SRA, in
either case until such time thereafter as such Person acquires
additional voting securities other than directly from SRA, and,
after giving effect to such transaction, such Person owns
securities representing 35% or more of the combined voting power of
then outstanding securities of SRA;
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(ii)
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Material
Change in Board of Directors : Individuals who, as of the date hereof,
constitute the Board of Directors of SRA (the “Board”;
such individuals being referred to as the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for
election by SRA shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Securities Exchange Act of
1934 (the “34 Act”) relating to the election of the
directors of SRA) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board; or
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(iii)
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Merger or Asset Sale and
Material Change in Shareholders and Board : A merger, consolidation, reorganization or
share exchange, or sale of all or substantially all of the assets,
of SRA, unless, immediately following such transaction, all of the
following shall apply: (A) all or substantially all of the
beneficial owners of SRA immediately prior to such transaction will
beneficially own in substantially the same proportions, directly or
indirectly, more than 50% of the combined voting power of the then
outstanding voting securities of the corporation or other entity
resulting from such transaction (including, without limitation, a
corporation or other entity which, as a result of such transaction,
owns SRA or all or substantially all of the SRA assets, either
directly or through one or more subsidiaries) (the “Successor
Entity”), (B) no Person (other than Ernst Volgenau,
William Brehm or any Permitted Transferee of either
Mr. Volgenau or Mr. Brehm so long as such transferee
continues to so qualify as a Permitted Transferee) will be the
beneficial owner, directly or
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indirectly, of 35% or more of the
combined voting power of the then outstanding voting securities of
the Successor Entity, and (C) at least a majority of the
members of the board of directors of the Successor Entity will be
Incumbent Directors.
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All terms used
in this Section shall be interpreted in a manner consistent with
the ‘34 Act.
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4.
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TERMINATION : The
Employee’s employment with SRA may be terminated by either
party as set forth below.
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(a)
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Termination
for Cause by SRA : SRA
may immediately terminate the Employee’s employment if any of
the following events of “cause” shall occur, and in
that event shall have no further responsibility to the Employee
other than payment of wages earned prior to the termination of his
employment: (i) a breach by the Employee of any of the terms
and conditions of this Agreement; (ii) any allegation
reasonably deemed by SRA to be credible of, or other circumstances
reasonably believed by SRA to constitute, any of the following: an
act of fraud, embezzlement, misappropriation of assets, dishonesty
or disloyalty by the Employee, Employee’s noncompliance with
any state or federal law, rule or regulation (including, without
limitation, any law relating to protection of civil rights or
against discrimination), a crime or misdemeanor by Employee
(including any involving moral turpitude), Employee’s
negligence or misconduct in performing his duties or obligations,
Employee’s disregard for or breach of any SRA polices or
procedures, an Employee public action or statement that may harm
SRA reputation or SRA relationship with any of its customers,
shareholders or employees, or Employee’s retaliation against
any SRA employee or other person for alleging violation of any laws
or SRA policies or procedures; or (iii) the failure to
maintain the Employee’s eligibility for the government
clearances required to perform his duties.
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(b)
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Termination
Without Cause by SRA :
SRA may terminate the Employee’s employment with SRA for any
reason other than those set forth in the preceding subsection by
providing the Employee with fourteen (14) days notice of
termination.
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(c)
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Voluntary
Termination by the Employee : The Employee may voluntarily terminate this
Agreement upon at least ninety (90) days advance written
notice.
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(d)
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Termination
for Good Reason by Employee : For purposes of this Agreement, the
Employee’s termination of his employment with SRA shall be
deemed to be for “Good Reason” if the Employee shall
show any of the following has occurred:
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(i)
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A clear and
material diminution in both the Employee’s direct reporting
relationship and general managerial authorities as contemplated by
Section 2 of this Agreement; or
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(ii)
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A material
change in the Employee’s principal place of employment such
that the Employee’s commuting distance as of the date of this
Agreement increases by more than fifty (50) miles.
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Employee must
give SRA written notice of any Good Reason termination of
employment. Such notice must be given within thirty (30) days
following his knowledge of the first occurrence of a Good Reason
circumstance set forth above. Such notice must specify which of the
circumstances set forth above the Employee is relying on and the
particular action(s) or inaction(s) giving rise to such
circumstance. The Good Reason termination shall not be effective
if, within ninety (90) days of SRA receipt of such notice, SRA
remedies the circumstance(s) giving rise to the notice, or if the
Employee’s Termination Date does not occur within thirty
(30) days after the end of the ninety (90)-day period provided
to SRA to remedy the circumstances giving rise to the
notice.
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(e)
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Death or
Disability of Employee :
In the event of the Disability of the Employee during his
employment with SRA, SRA shall have the right to terminate his
employment and this Agreement on fourteen (14) days’
advance written notice. “Disability” means a physical
or mental impairment which prevents, or can reasonably be expected
to prevent, the Employee from performing the essential functions of
his position for a total of ninety (90) calendar days, as
determined by SRA.
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In the event of
the Death of the Employee during his employment with SRA, the
Employee’s employment will immediately cease.
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(f)
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Return of
Documents : In the event
of termination of this Agreement for any reason, the Employee
agrees to immediately return to SRA all property, documents or
other written materials and the like which SRA may have furnished
to
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