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EXECUTIVE AGREEMENT

Employment Agreement

EXECUTIVE AGREEMENT | Document Parties: The Titan Corporation, You are currently viewing:
This Employment Agreement involves

The Titan Corporation,

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Title: EXECUTIVE AGREEMENT
Governing Law: Delaware     Date: 6/8/2005
Industry: Computer Networks    

EXECUTIVE AGREEMENT, Parties: the titan corporation
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Exhibit 10.1


EXECUTIVE AGREEMENT

        AGREEMENT, dated as of the 2nd day of June, 2005 (this "Agreement"), by and between The Titan Corporation, a Delaware corporation (the "Company"), and Lawrence J. Delaney (the "Executive").

        WHEREAS, the Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein). The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the current Company and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control that ensure that the compensation and benefits expectations of the Executive will be satisfied and that are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

        NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         Section 1.      Certain Definitions.     (a) "Effective Date" means the first date during the Change of Control Period (as defined herein) on which a Change of Control occurs. Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably believed by the Executive that such termination of employment (1) was at the request of a third party that has taken steps reasonably calculated to effect a Change of Control or (2) otherwise arose in connection with or anticipation of a Change of Control, then "Effective Date" means the date immediately prior to the date of such termination of employment. The occurrence of any subsequent Change of Control shall not create a new Effective Date for purposes hereof.

        (b)   "Change of Control Period" means the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however , that, commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof, the "Renewal Date"), the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date.

        (c)   "Affiliated Company" means any company controlled by, controlling or under common control with the Company.

        (d)   "Change of Control" means:

        (1)   The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however , that, for purposes of this Section 1(d), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company or (iv) any acquisition by any corporation pursuant to a transaction that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and 1(d)(3)(C).

        (2)   Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however , that any


 

individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

        (3)   Consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

        (4)   Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

         Section 2.      Employment Period.     The Company hereby agrees to continue the Executive in its employ, subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of the Effective Date (the "Employment Period"). The Employment Period shall terminate earlier upon the Executive's termination of employment for any reason.

         Section 3.      Terms of Employment.     (a)  Position and Duties. ((1) During the Employment Period, (A) the Executive's (x) position (excluding offices, title and reporting requirements), authority, duties and responsibilities shall not be materially and adversely inconsistent with the Executive's position as an executive of the Company immediately prior to the Effective Date, and (y) duties, functions and responsibilities shall be substantially the same in nature as those in effect immediately prior to the Effective Date (except that no promotion or addition of duties or responsibilities consistent with the Executive's position shall be considered to change the Executive's duties, functions or responsibilities in a manner that is adverse to the Executive under this Section a)(1)(A)(y)); and (B) the Executive's services shall be performed at the office where the Executive was employed immediately preceding the Effective Date or at any other location less than 20 miles from such office.

        (2)   A requirement that the Executive comply with any general L-3 Communications Holdings, Inc. ("L-3") group corporate approval policy or other L-3 group-wide corporate

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governance policies applicable to the Executive, and provided to the Executive at the time he is required to so comply, shall not be a breach by the Company of Section 3(a)(1). Also, the fact that the Company shall cease to be a publicly held company or shall become a wholly owned subsidiary of L-3 shall not be a breach by the Company of Section 3(a)(1).

        (3)   During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that, to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company.

        (b)      Annual Compensation.     (1)  Base Salary. During the Employment Period, the Executive shall receive an annual base salary and the highest car allowance then in effect during the Change of Control Period (collectively the "Annual Base Salary") at an annual rate at least equal to 12 times the highest monthly base salary (inclusive of car allowance) paid or payable, including any base salary that has been earned but deferred, to the Executive by the Company and the affiliated companies in respect of the 12-month period immediately preceding the month in which the Effective Date occurs. The Annual Base Salary shall be paid at such intervals as the Company pays executive salaries generally. During the Employment Period, the Annual Base Salary shall be reviewed periodically, with the same regularity and at the same or substantially the same period(s) of time that annual base salaries for executives of L-3 and its subsidiaries are generally reviewed. Any increase in the Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. The Annual Base Salary shall not be reduced after any such increase and the term "Annual Base Salary" shall refer to the Annual Base Salary as so increased.

        (2)      Annual Bonus.     In addition to the Annual Base Salary, the Executive shall be eligible to earn, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash, upon satisfaction of performance criteria established by the Company, in consultation with the Executive and in a manner consistent with past practice, in a target amount equal to 60% of the Annual Base Salary for achievement of target performance levels, plus an additional amount of up to 15% of the Annual Base Salary for achievement above target performance levels. Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

        (c)      Other Compensation and Benefits.     

        (1)      Incentive, Savings and Retirement Plans.     During the Employment Period, the Executive shall be entitled to participate in all cash incentive, equity incentive, savings and retirement plans, practices, policies, and programs applicable generally to other executives of the Company and the affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most

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favorable of those provided by the Company and the Affiliated Companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date.

        (2)      Welfare Benefit Plans.     During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and the Affiliated Companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other executives of the Company and the Affiliated Companies.

        (3)      Expenses.     During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with Company policy.

        (4)      Fringe Benefits.     During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and the Affiliated Companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date.

        (5)      Office and Support Staff.     During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and the Affiliated Companies at any time during the 120-day period immediately preceding the Effective Date.

        (6)      Vacation.     During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and the Affiliated Companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date.

         Section 4.      Termination of Employment.     (a)  Death or Disability. The Executive's employment shall terminate automatically if the Executive dies during the Employment Period. If the Company determines in good faith that the Disability (as defined herein) of the Executive has occurred during the Employment Period (pursuant to the definition of "Disability"), it may give to the Executive written notice in accordance with Section 11(b) of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. "Disability" means the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness that is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.

        (b)      Cause.     The Company may terminate the Executive's employment during the Employment Period for Cause. "Cause" means:

        (1)   the willful and continued failure of the Executive to perform substantially the Executive's duties (as contemplated by Section 3(a)(1)(A)) with the Company or any Affiliated Company (other than any such failure resulting from incapacity due to physical or mental illness or following the Executive's delivery of a Notice of Termination for Good Reason), provided that the Company demonstrates that such failure has a material and injurious effect on the Company and provided, further, that a written demand for substantial performance is first delivered to the Executive by the

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Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that the Executive has not substantially performed the Executive's duties and the resulting material, injurious effect on the Company;

        (2)   (A) the willful engaging by the Executive in gross misconduct or (B) the conviction or plea of nolo contendere of the Executive of a felony (such conviction having been finally adjudicated without further appeal and which final adjudication shall for the avoidance of doubt include any plea bargain approved by a court of applicable jurisdiction) that is materially and demonstrably injurious to the Company; or

        (3)   the willful engaging by the Executive in a transaction in connection with the performance of duties to the Company which transaction is adverse to the interests of the Company and is engaged in for personal profit.

For purposes of this Section 4(b), no act, or failure to act, on the part of the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer of the Company or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

        (c)      Good Reason.     The Executive's employment may be terminated by the Executive for Good Reason or by the Executive voluntarily without Good Reason; provided, however, that any termination for Good Reason may only occur if the Executive provides a Notice of Termination (as defined below) of Good Reason within 180 days after the occurrence of the event giving rise to the claim of Good Reason. "Good Reason" means:

        (1)   the Company's material breach of Section 3(a)(1)(A);

        (2)   any failure by the Company to comply with any of the provisions of Section 3(b), other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive;

        (3)   the Company's requiring the Executive to be based at any office or location other than as provided in Section 3(a)(1)(B);

        (4)   any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

        (5)   any failure by the Company to comply with and satisfy Section 10(c);

         provided, however , that any of the events described in this Section 4(c) shall constitute Good Reason only if the Company fails to cure such event within 10 business days after receipt from Executive of written notice of the event which purports to constitute Good Reason. Notwithstanding the foregoing, upon any indictment of the Executive for any felony that could result in the Executive's termination for Cause, if the Company suspends the Executive's employment hereunder during the period following such indictment and through final adjudication of any such indictment, then , so long as the Company continues to provide the Executive with (x) payment of his annual base salary (in accordance with the normal payroll practices of the Company) as in effect on the effective date of any such suspension, which base salary shall in no event be increased at any time during such suspension, and (y) coverage for himself and his dependents under the group health plan in which the Executive and his dependents par


 
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