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Non-competition Agreement

NonCompetition Agreement

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 This NonCompetition Agreement involves

ENGILITY HOLDINGS, INC. | East Merger Sub, LLC | Engility Holdings, Inc | New East Holdings, Inc | TASC Parent Corporation, Toucan Merger Corporation I, Toucan Merger Corporation

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Title: NON-COMPETITION AGREEMENT
Date: 8/1/2016
Industry: Conglomerates     Sector: Conglomerates

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Exhibit 10.3

 

EXECUTION VERSION

NON-COMPETITION AGREEMENT

 

This Non-Competiton Agreement (the “Agreement”) is entered into as of June 29, 2016 by and between Engility Holdings, Inc. (the “Company”) and Anthony Smeraglinolo (the “Executive”).

 

WHEREAS, the Executive previously served as the President and Chief Executive Officer of the Company;

 

WHEREAS, Executive participated in the Engility Holdings, Inc. Change in Control Severance Plan (the “CIC Severance Plan”), which provided for certain rights and benefits of the parties upon a termination of employment following a Change in Control of the Company;

 

WHEREAS, for purposes of the CIC Severance Plan, a Change of Control of the Company occurred as a result of the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of October 28, 2014, by and among TASC Parent Corporation, Toucan Merger Corporation I, Toucan Merger Corporation II, the Company, New East Holdings, Inc., and East Merger Sub, LLC;

 

WHEREAS, pursuant to a Separation Agreement and Release of Claims effective February 29, 2016 (the “Separation Agreement”), the Executive separated from employment as the President and Chief Executive Officer of the Company effective March 31, 2016 (the “Separation Date”), and the parties agreed to certain rights and benefits arising under the CIC Severance Plan as a result of such separation;

 

WHEREAS, pursuant to the Separation Agreement, the Executive agreed to be bound by a Confidentiality and Non-Competition Restrictive Covenants agreement (the “Non-Competition Agreement”) provided for under the CIC Severance Plan, which includes a covenant to not compete with the Company for a minimum period of twelve months following the date of the Executive’s separation from employment (the “First Non-Competition Period”);

 

WHEREAS, the Non-Competition Agreement provides that the duration of the covenants thereunder may, at Executive’s discretion, be extended beyond the First Non-Competition Period for a period of up to three years;

 

WHEREAS, the Executive has elected, and the Company has agreed, that certain restrictive covenants under the Non-Competition Agreement shall be extended an additional twelve months (the “Second Non-Competition Period”), in exchange for certain consideration; and

 

WHEREAS, the Company has determined that it is in the Company’s best interests for the Executive to be bound by the non-competition restrictions set forth in this Agreement during the Second Non-Competition Period.

 

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

 


 

 

I. Payment under Separation Agreement

In consideration of the non-competition restrictions set forth in this Agreement during the Second Non-Competition Period, the Executive shall be entitled to the full amount of the severance payments under the Separation Agreement on the basis that the limitations set forth under Section 5(a) of the CIC Severance Plan do not result in a reduction of such payments.

 

II. Noncompetition Agreement

In consideration of the agreement of the Company under Section I of this Agreement, and together with the rights and obligations of the parties under the CIC Severance Plan and the Separation Agreement, the Executive agrees that, during the Second Non-Competition Period, he will not, without the prior written consent of the Company’s Board of Directors Compensation Committee, directly or indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged in or have any financial interest in, any (i) entity which is in Competition with the business of the Company or its subsidiaries or (ii) Competitive Activity.  For purposes of this Agreement: (a) an entity shall be deemed to be in “Competition” with the Company or its subsidiaries if it is principally involved in the purchase, sale or other dealing in any property or the rendering of any service purchased, sold, dealt in or rendered by the Company or its subsidiaries as a part of the business of the Company or its subsidiaries within the same geographic area in which the Company effects such sales or dealings or renders such services at the Relevant Date; and (b) “Competitive Activity” shall mean any business into which the Company or any of its subsidiaries has taken substantial steps to engage, as of the Relevant Date, which would be deemed to be in Competition with the business of the Company or its subsidiaries if such steps had been completed prior to the Relevant Date; and (c) the term “Relevant Date” shall mean March 31, 2016.

 

III. Permitted Service

Notwithstanding anything contained in this Agreement, nothing herein shall (i) prohibit the Executive from serving as an officer, employee or independent consultant of any business unit or subsidiary which would not otherwise be in Competition with the Company or its subsidiaries or a Competitive Activity, but which business unit is a part of, or which subsidiary is controlled by, or under common control with, an entity that would be in competition with the Company or its subsidiaries, so long as the Executive does not engage in any activity which is in Competition with any business of the Company or its subsidiaries or is otherwise a Competitive Activity or (ii) be construed so as to preclude the Executive from investing in any publicly or privately held company, provided the Executive’s beneficial ownership of any class of such company’s securities does not exceed 5% of the outstanding securities of such class.

 

 

IV.

Remedies

In the event the Company determines that the Executive has breached the restrictive covenants contained i


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