Exhibit 10.21
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement (the "Agreement")
dated February
24, 2006 ("Effective Date"), is made by and between
Digital
Fusion, Inc., a Delaware corporation ("Company"), and Gary S. Ryan
(Executive").
WITNESSETH THAT:
WHEREAS, the Company and Executive has been employed by the Company
as
its President, immediately prior to the Effective Date pursuant to
an employment
agreement dated May 5, 2004 (the "Prior Agreement");
WHEREAS, the Executive and the Company entered into an Amended
and
Restated Employment Agreement dated February 28, 2005 (the
"Effective Date");
and
WHEREAS the parties hereto desire to enter into this Agreement
pertaining to the continued employment of the Executive of the
Company;
NOW, THEREFORE, in consideration of the mutual covenants set
forth
below, it is hereby covenanted and agreed by the Executive and the
Company 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.
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.
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(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.
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 Two Hundred Thousand Dollars
($200,000.00) per
year, payable in s 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
stock of the
Company, which
Options were granted to him on May 10, 2004. Effective February 28,
2006, Executive will receive a grant to purchase 100,000 shares of
the
common stock of the Company. One-third shall vest and be exercisable
by the Executive
immediately and the remainder shall vest at the rate
of one-third
on each of the first
and second
anniversaries
of the
effective date of the grant, pursuant to approval by the
Compensation
Committee as of the Amended and Restated Employment Agreement dated
February 28, 2005.
(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.
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(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.
(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.
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(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 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
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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.
(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.
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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
