Execution Copy
DEAN J.
DOUGLAS
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”) is dated as of October 4,
2005, by and between LCC International, Inc., a Delaware
corporation (the “ Company ”), and Dean J.
Douglas (the “ Executive ”).
WHEREAS, the Company desires to
employ the Executive as its President and Chief Executive Officer,
and the Executive desires to accept such employment, on the terms
set forth below.
Accordingly, the parties hereto agree
as follows:
1. Term . The Company
hereby employs the Executive, and the Executive hereby accepts such
employment, for an initial term commencing as of the date the
Executive commences providing services to the Company (the “
Service Commencement Date ”) and ending on
December 31, 2007, unless sooner terminated in accordance with
the provisions of Section 4 or Section 5 below (the
period during which the Executive is employed hereunder being
hereinafter referred to as the “ Term ”). The
Term shall be subject to automatic two-year renewals unless either
party notifies the other, in accordance with Section 10.4, of
non-renewal at least 90 days prior to the end of the initial
Term or any subsequent Term. For the purposes of this Agreement,
including but not limited to Section 5 below, non-renewal of
this Agreement by the Company or the Executive is deemed
termination by the Company or the Executive, respectively. This
Agreement shall automatically terminate and be of no effect if the
Executive does not commence providing services to the Company
within 90 days of the date hereof.
2. Duties . The
Executive, in his capacity as President and Chief Executive
Officer, shall faithfully perform for the Company the duties of
said office and shall perform such other duties of an executive,
managerial or administrative nature as shall be specified and
designated from time to time by the board of directors or similar
governing body of the Company (the “ Board ”)
(including the performance of services for, and serving on the
Board of Directors of, any subsidiary or affiliate of the Company
without any additional compensation). The Executive will be based
at the Company’s headquarters, presently located in McLean,
Virginia. The Executive shall devote substantially all of the
Executive’s business time and effort to the performance of
the Executive’s duties hereunder, provided, however, that so
long as such services or activities do not materially and adversely
interfere with the Executive’s duties for the Company, with
the approval of the Board (which approval will not be unreasonably
withheld) the Executive (i) may serve in any capacity with any
civic, educational, or charitable organization and (ii) may
serve on other companies’ boards of directors or advisory
boards provided such companies are not competitors of the Company.
The Executive’s service on the board of directors or advisory
boards of the companies listed on Exhibit A attached
hereto has been approved by the Board. Any compensation received by
the Executive for such services or activities shall not reduce the
amounts of payments that the Executive is entitled to receive under
this Agreement.
The Board may delegate its authority
to take any action under this Agreement to the Compensation
Committee of the Board (the “ Compensation Committee
”).
The Executive shall also serve as a
member of the Board beginning on the Service Commencement Date and
for so long as the Executive is employed by the Company unless
earlier not reelected or removed by the stockholders of the
Company. Upon termination of the Executive’s employment, the
Executive shall immediately tender his resignation from the Board
and any committees thereof on which he is serving at the time of
such termination.
3. Compensation .
3.1 Salary . The Company
shall pay the Executive during the Term a base salary at the rate
of $375,000 per annum (the “ Annual Salary ”),
payable semi-monthly and subject to regular deductions and
withholdings as required by law. The Annual Salary may be increased
annually by an amount as may be approved by the Board or the
Compensation Committee, and, upon such increase, the increased
amount shall thereafter be deemed to be the Annual Salary for
purposes of this Agreement.
3.2 Bonus . Commencing with
the calendar year 2006, the Executive will be entitled to such
bonuses as may be authorized by the Board (the “ Annual
Bonus ”). The Executive’s target bonus amount will
be 100% of the Annual Salary then in effect for each applicable
year. The Executive’s actual Annual Bonus, if any, may be
below, at, or above target based upon the achievement of individual
and objective Company annual performance criteria established by
the Compensation Committee. With respect to calendar year 2005, the
Executive shall be entitled to an aggregate bonus of $175,000, of
which $75,000 shall be paid on the Service Commencement Date (the
“ First 2005 Bonus Installment ”) and $100,000
shall be paid at such time as the Company normally pays annual
bonuses to its executives (the “ Second 2005 Bonus
Installment ”).
3.3 Equity-Based Awards .
Effective as of the date hereof, the Company has granted the
Executive certain restricted stock units and options to purchase
the Company’s Class A common stock, par value $.01 per
share (the “ Class A Stock ”), pursuant to
agreements dated the date hereof between the Company and the
Executive (the “ 2005 Equity Incentive Agreements
”). The Executive may from time to time be awarded such
additional restricted stock units, additional share options or
other equity-based awards as the Board or the Compensation
Committee determines to be appropriate.
3.4 Benefits – In
General . The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability
insurance plans, health programs, pension and profit sharing plans
and similar benefits that may be available to other senior
executives of the Company generally, on the same terms as may be
applicable to such other executives, in each case to the extent
that the Executive is eligible under the terms of such plans or
programs. except to the extent that this Agreement provides the
Executive with more valuable benefits than the Company’s
standard benefits and policies. Effective as of the Service
Commencement Date, the Company and the Executive will enter into
the Company’s Indemnity Agreement attached as
Exhibit B to this Agreement (the “ Indemnity
Agreement ”). During the Term, the Company shall maintain
customary liability insurance for directors and officers and list
the Executive as a covered officer.
3.5 Vacation . During the
Term, the Executive shall be entitled to vacation of four
(4) weeks per year.
3.6 Relocation Expenses . The
Company shall reimburse the Executive for reasonable moving
expenses, including costs of packing, transporting and storing
personal property and temporary housing costs, and reasonable
closing costs, including brokerage and mortgage fees, associated
with the sale of one primary residence and the purchase of one
primary residence (“ Relocation Expenses ”),
provided that the Executive submits such expenses in accordance
with applicable Company policies, provided further that the
Company’s obligations hereunder shall not exceed
$125,000.
3.7 Other Expenses . The
Company shall pay or reimburse the Executive for all ordinary and
reasonable out-of-pocket expenses actually incurred (and, in the
case of reimbursement, paid) by the Executive during the Term in
the performance of the Executive’s services under this
Agreement, provided that the Executive submits such expenses in
accordance with the policies applicable to senior executives of the
Company generally.
4. Termination upon Death or
Disability . If the Executive dies during the Term, the
obligations of the Company to or with respect to the Executive
shall terminate in their entirety except as otherwise provided
under this Section 4. Upon the Disability (as defined below in
this Section 4) of the Executive, the Company shall have the
right, to the extent permitted by law, to terminate the employment
of the Executive upon notice in writing to the Executive and such
termination in and of itself shall not be, nor shall it be deemed
to be, a breach of this Agreement; provided, that, the Company will
have no right to terminate the Executive’s employment if, in
the opinion of a qualified physician reasonably acceptable to the
Company, it is reasonably certain that the Executive will be able
to resume the Executive’s duties on a regular full-time basis
within 90 days of the date the Executive receives notice of
such termination. For purposes of this Section 4, “
Disability ” shall have the meaning assigned to it in
the Company’s long-term disability plan, provided, that in
the event the Executive is not covered by the Company’s
long-term disability plan, “ Disability ” shall
mean the Executive is unable to perform each of the essential
duties of his position by reason of a medically determinable
physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous period
of not less than 12 months.
Upon death of the Executive or upon
termination of the Executive’s employment by virtue of
Disability (i) the Executive (or the Executive’s estate
or beneficiaries, in the case of the death of the Executive) shall
have no right to receive any compensation or benefit under this
Agreement on and after the Effective Date of the Termination (as
defined below in this Section 4) other than Annual Salary
earned and unpaid under this Agreement prior to the Effective Date
of the Termination, any bonus for the prior year not yet paid, and
other benefits, including payment for accrued but unused vacation,
earned and unpaid under this Agreement prior to the Effective Date
of the Termination (and reimbursement under this Agreement for
expenses incurred but not paid prior to the Effective Date of the
Termination) and the right to exercise any options vested as of the
Effective Date of the Termination for a period of one year after
the Effective Date of Termination and (ii) this Agreement
shall otherwise terminate upon the Effective Date of the
Termination and there shall be no further rights with respect to
the Executive hereunder (except as provided in Section 10.13).
For purposes of this Section 4, the “ Effective Date
of the Termination ” shall mean the date of death or the
date on which a written notice of termination by virtue of
Disability is given by the Company or any later date set forth in
such notice of termination.
For the avoidance of doubt, the
Executive acknowledges and agrees that the payments set forth in
this Section 4 constitute the full amount of payment
obligations of the Company for termination of the Executive’s
employment during the Term pursuant to this Section 4.
5. Other Terminations of
Employment .
5.1 Termination for Cause;
Termination of Employment by the Executive Without Good Reason
.
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(a)
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For purposes of this Agreement, “
Cause ” shall mean:
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(i)
(ii)
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the Executive’s commission of any
felony;
the Executive’s commission of an act of fraud or theft;
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(iii) the
continuing failure or habitual neglect by the Executive to perform
the Executive’s duties hereunder;
(iv) any
material violation of a material, published Company policy,
including without limitation, the Company’s Corporate
Standards of Conduct;
(v) any
material violation by the Executive of the Executive’s
covenants contained in Section 6, 7 or 8 below; or
(vi) the
Executive’s material and willful breach of this
Agreement.
Notwithstanding the foregoing, if there exists (without regard
to this sentence) an event or condition that constitutes Cause
under clause (iii), (iv), (v) (only with respect to Section 8
of this Agreement) or (vi) above, the Executive shall have
30 days from the date written notice is given by the Company
of such event or condition to cure such event or condition and, if
the Executive does so, such event or condition shall not constitute
Cause hereunder.
(b) For purposes of this
Agreement, “ Good Reason ” shall mean, unless
otherwise consented to by the Executive:
(i) a
material reduction of the Executive’s authority, duties and
responsibilities, or the assignment to the Executive of duties
materially and adversely inconsistent with the Executive’s
position or positions with the Company and its subsidiaries, or the
removal of the Executive from such position, authority, duties and
responsibilities;
(ii) a
reduction in Annual Salary of the Executive except in connection
with a reduction in compensation generally applicable to senior
management employees of the Company;
(iii) a
requirement by the Company that the Executive’s work location
be moved more than 50 miles from the Company’s principal
place of business in McLean, VA;
(iv) the
Company’s material and willful breach of this Agreement;
or
(v) the
failure of the Company to obtain the assumption of this Agreement
by any successors contemplated in Section 10.8
(a) below.
For purposes of clause (i) above, the Executive’s
position, authority, duties and responsibilities are deemed to be
significantly reduced if (a) the Executive ceases to be the
President and Chief Executive Officer of the Company or, following
a Change in Control, is not employed as President and Chief
Executive Officer of the acquiring company or (b) is not
reelected or is removed from the Board of the Company or, following
a Change in Control, is not elected to the board of directors of
the acquiring company.
Notwithstanding the foregoing, if there exists (without regard
to this sentence) an event or condition that constitutes Good
Reason and the Company has the ability to cure such event or
condition, the Company shall have 30 days from the date on
which the Executive gives the written notice thereof to cure such
event or condition and, if the Company does so, such event or
condition shall not constitute Good Reason hereunder. Further, an
event or condition shall cease to constitute Good Reason one
(1) year after the event or condition first occurs.
(c) The Company may terminate
the Executive’s employment for Cause and such termination in
and of itself shall not be, nor shall it be deemed to be, a breach
of this Agreement. If the Company terminates the Executive for
Cause, (i) the Executive shall have no right to receive any
compensation or benefit under this Agreement on and after the
Effective Date of the Termination (as defined below in this
Section 5.1(c)) other than Annual Salary and other benefits,
including payment for accrued but unused vacation (but excluding
any bonuses), earned and unpaid under this Agreement prior to the
Effective Date of the Termination (and reimbursement under this
Agreement for expenses incurred but not paid prior to the Effective
Date of the Termination), (ii) the provisions of
Section 5.3 shall apply and (iii) this Agreement shall
otherwise terminate upon the Effective Date of the Termination and
the Executive shall have no further rights hereunder (except as
provided in Section 10.13). For purposes of this
Section 5.1(c), the “ Effective Date of the
Termination ” shall mean the date on which a written
notice of termination is given by the Company or any later date set
forth in such notice of termination.
(d) The Executive may terminate
his employment without Good Reason. If the Executive terminates the
Executive’s employment with the Company without Good Reason:
(i) the Executive shall have no right to receive any
compensation or benefit under this Agreement on and after the
Effective Date of the Termination (as defined below in this
Section 5.1(d)) other than Annual Salary and other benefits,
including payment for accrued but unused vacation (but excluding
any bonuses), earned and unpaid under this Agreement prior to the
Effective Date of the Termination (and reimbursement under this
Agreement for expenses incurred but not paid prior to the Effective
Date of the Termination), (ii) the provisions of
Section 5.3 shall apply and (iii) this Agreement shall
otherwise terminate upon the Effective Date of the Termination and
the Executive shall have no further rights hereunder (except as
provided in Section 10.13). For purposes of this Section
5.1(d), the “ Effective Date of the Termination
” shall mean the date on which a written notice of
termination is given by the Executive or any later date set forth
in such notice of termination.
(e) In the event the Executive
elects at any time not to renew this Agreement pursuant to
Section 1 above or the Company elects not to renew this
Agreement pursuant to Section 1 above after the Executive
reaches age 66, (i) the Executive shall have no right to
receive any compensation or benefit under this Agreement on and
after the Effective Date of the Termination (as defined below in
this Section 5.1(e)) other than Annual Salary earned and
unpaid under this Agreement prior to the Effective Date of the
Termination, any bonus for any prior years not yet paid, any bonus
earned with respect to the calendar year in which the Effective
Date of Termination occurred, and other benefits, including payment
for accrued but unused vacation, earned and unpaid under this
Agreement prior to the Effective Date of the Termination (and
reimbursement under this Agreement for expenses incurred but not
paid prior to the Effective Date of the Termination) and
(ii) this Agreement shall otherwise terminate upon the
Effective Date of the Termination and the Executive shall have no
further rights hereunder (except as provided in
Section 10.13). For purposes of this Section 5.1(e), the
“ Effective Date of the Termination ” shall mean
the last day of the calendar year during which the Executive or the
Company, as applicable, gave notice under Section 1.
5.2 Termination Without Cause;
Non-Renewal by the Company Prior to Age 66; Termination for Good
Reason . The Company may terminate the Executive’s
employment at any time without Cause, for any reason or no reason,
and the Executive may terminate the Executive’s employment
with the Company for Good Reason. If the Company or the Executive
terminates the Executive’s employment and such termination is
not described in Section 4 above or Section 5.1 above or
if the Company provides a notice of non-renewal of this Agreement
prior to the Executive’s 66th birthday, (i) the
Executive shall have no right to receive any compensation or
benefit hereunder on and after the Effective Date of the
Termination (as defined below in this Section 5.2) other than
Annual Salary earned and unpaid under this Agreement prior to the
Effective Date of the Termination, any bonus for the prior year not
yet paid, and other benefits, including payment for accrued but
unused vacation, earned and unpaid under this Agreement prior to
the Effective Date of the Terminati
