Exhibit 10.16
January 5, 2009
Mr. Stephen Hughes
3021 North Dickerson Street
Arlington, VA 22207
Dear Steve:
This letter sets forth our agreement
with respect to the terms and conditions of your retirement from
employment with SRA International, Inc. (the
“Company”).
1. Retirement . You will
retire from employment with the Company as of June 30, 2009,
subject to paragraph 4(b) hereof (your “Retirement
Date”). You agree to continue to serve as the Company’s
Chief Financial Officer (“CFO”) until the earlier of
(a) the Company’s appointment of a new CFO,
(b) February 28, 2009 or (c) such date as may be
designated by the Company’s Board of Directors (the
“Board”) or Chief Executive Officer
(“CEO”), at which time you will resign from your
position as CFO.
2. Transition .
(a) For the period beginning on the
date of your resignation as CFO and ending on your Retirement Date
(the “Transition Period”), you will continue to be
employed by the Company in a non-officer capacity and will assist
with respect to the transition to a new CFO and will have such
other duties and responsibilities as the Board or CEO may assign
(during the Transition Period, you may work from a remote location
to the extent practicable and, subject to the prior written consent
of the Company, may work on outside personal business engagements
that do not interfere with your duties to the Company).
(b) During the Transition Period,
you will continue to be paid your current base salary ($365,000
annually) in accordance with the Company’s normal payroll
practices and will continue to be entitled to participate in the
Company’s 401(k) plan, medical and life insurance and other
employee benefit plans, subject to the terms of those plans. You
will also continue to vest in your outstanding options to purchase
Company common stock (“Options”) and restricted stock
(“Restricted Stock”) under the Company’s 2002
Stock Incentive Plan (“Stock Incentive Plan”), subject
to the terms of such plan and the applicable award
agreements.
3. Payments and Benefits Upon
Retirement . Subject to paragraphs 4(c) and 6(b) of this
letter, you will be entitled to the payments and benefits set forth
in this paragraph 3, in full satisfaction of all of the
Company’s obligations to you in connection with your
retirement and termination of employment with the
Company.
(a) Not later than fifteen business
days after your Retirement Date, the Company will pay to you a lump
sum amount equal to the sum of the following:
(i) an amount equal to one times
your current annual base salary;
(ii) an amount equal to $116,505,
equaling any then unpaid portion of the bonuses that you have
earned under the Company’s annual cash incentive plan
(“Cash Incentive Plan”) for the Company’s fiscal
years ending June 30, 2006, 2007 and 2008;
(iii) a cash amount equal to the
value your accrued and unused annual leave and pre-1984 sick leave
as of your Retirement Date;
(iv) $12,000, in lieu of executive
outplacement assistance;
(v) $29,810, representing the
estimated cost (as agreed upon by the parties hereto and based on
your current level of coverage and current insurance rates) of
COBRA premiums for a period of 18 months; and
(vi) $500,000.
(b) You will be entitled to receive
a bonus under the Cash Incentive Plan for the Company’s
fiscal year ending June 30, 2009. Your target bonus amount is
$438,000. The actual bonus will be in an amount determined assuming
a 1.0 individual performance score and using the Company’s
actual performance score for such fiscal year. If payable, this
bonus shall be paid as a lump sum at the same time that other
employees of the Company who are entitled to a bonus under the Cash
Incentive Plan receive the first installment of such bonus (but, in
your case, in no event later than December 31,
2009).
(c) For purposes of the Nonstatutory
Stock Option Agreements evidencing your Options, your separation
from service with the Company on the Retirement Date will
constitute a separation from service by reason of retirement, and
your Options (to the extent vested and outstanding as of your
Retirement Date) shall remain exercisable to the extent provided
under the provisions of such agreements.
(d) Your account under the 2005
Deferred Compensation Plan for Key Employees of SRA International,
Inc. (“Deferred Compensation Plan”) will be paid in
accordance with the terms of such plan.
(e) At your election, you may
convert your coverage under the Company’s group life
insurance plan into an individual term policy following your
Retirement Date in accordance with the insurer’s rules and
procedures.
(f) Following your Retirement Date,
you will be entitled to elect COBRA continuation coverage on the
same basis as other terminating employees.
-2-
4. Other Terms and Conditions
.
(a) On and after the Retirement
Date, you will cease to be covered by any of the Company’s
employee benefit and incentive compensation plans, except to the
extent provided in paragraphs 3(b), 3(c), 3(d) and 3(f) above. Any
unvested Options and Restricted Stock that you hold on your
Retirement Date will be forfeited and terminate effective as of
immediately following your Retirement Date.
(b) Notwithstanding anything to the
contrary herein, the Company may terminate your employment at any
time with cause. For purposes of this letter, “cause”
shall have the same meaning as under the Nonstatutory Stock Option
Agreements evidencing your Options.
(c) Notwithstanding anything to the
contrary herein, if the Company terminates your employment for
cause or if you voluntarily terminate employment with the Company
for any reason prior to your Retirement Date, you will not be
entitled to any of the payments or benefits provided under
paragraphs 2 and 3 of this letter.
5. Exclusivity of Payments .
You acknowledge and agree that this letter sets forth the
Company’s sole obligations on account of your retirement and
termination with the Company and, except as may be required by law,
neither you nor any other person is entitled to any other payment
or benefit of any kind whatsoever from, or in respect of, the
Company, any of its affiliates, or any of the Company’s, or
any of its affiliates’, employee benefit or compensation
plans, programs, policies or arrangements of any kind in connection
with your employment with, and retirement from, the Company and its
affiliates.
6. Release of Claims
.
(a) By executing this letter, you
hereby irrevocably and unconditionally release, acquit, and forever
discharge the Company and each of its predecessors, successors,
assigns, agents, directors, trustees, officers, employees,
representatives, attorneys, divisions, subsidiaries, and affiliates
(and agents, directors, officers, employees, representatives, and
attorneys of such parent companies, divisions, subsidiaries, and
affiliates), (hereinafter “Released Parties”) from any
and all claims, rights, demands, actions, liabilities, obligations,
causes of action of any and all kinds, nature and character
whatsoever, known or unknown, arising at any time before the date
that you sign this letter, whether based on: any employee welfare
benefit or pension plan governed by the Employee Retirement Income
Security Act (“ERISA”), as amended; the Civil Rights
Act of 1964, as amended; the Age Discrimination in Employment Act
of 1967 (“ADEA”), as amended; the Older Worker Benefit
Protection Act, as amended; the Americans With Disabilities Act
(“ADA”), as amended; the Fair Labor Standards Act, as
amended; any other comparable federal, state, or local laws
regarding employment discrimination; any negligent or intentional
tort; any contract (implied, oral, or written); or any other theory
of recovery under federal, state, or local law, and whether for
compensatory or punitive damages, or other equitable relief,
including, but not limited to, any and all claims which you may now
have or may have had, arising from or in any way whatsoever
connected with your prior employment or contacts with the Company
or the Released Parties whatsoever. You specifically agree that
this paragraph 6 extends to claims which you do not know or
suspect
-3-
to exist in your favor and which, if
you did know to exist, would have materially affected the
provisions of this letter. You will not cause or encourage any
future legal proceedings to be maintained or instituted against any
of the Released Parties, and will not participate in any manner in
any legal proceedings against any of the Released Parties, with
respect to any claims released under this paragraph 6, except as
required by law. You agree that you will not accept any remedy or
recovery arising from any charge filed or proceedings or
investigation conducted by the EEOC or by any state or local human
rights or employment rights enforcement agency relating to any of
the matters released herein. You further represent that as of the
date that you sign this letter, you are not suffering from a
work-related injury and that you have not failed to report a
work-related injury to the Company.
(b) Notwithstanding anything to the
contrary herein, you agree that, as a condition to your entitlement
to any payment or benefit under paragraph 3 hereof, the following
requirements must be satisfied: (i) within five days after
your Retirement Date, you deliver to the Company a signed copy of
the release attached hereto as Attachment A
(“Release”), and (ii) you do not revoke such
Release prior to the expiration of the revocation period specified
therein.
7. Nondisclosure of Company
Information .
(a) For purposes of this letter,
“Proprietary Information” means any and all
confidential or proprietary information or trade secrets of the
Company, including, but not limited to, third party information
provided to the Company on a confidential basis, and any
confidential or proprietary information of the Company pertaining
to:
(i) product and services sales or
marketing information such as technical, management, or cost
proposals; bid or proposal information and strategies; capture
plans; indirect cost structure rates; product or services plans,
specifications, and associated software; price lists; current or
potential client information including names, addresses,
identifying information, special needs, purchasing practices,
relationship history, contracts and sales agreements; and
competitive analyses including future market and product
direction;
(ii) corporate information such as
strategic business plans; operating and financial plans; business
plans; financial reports; cost accounting reports; indirect
budgets, proposal budgets; DCAA budget submissions; contract
analysis summaries; revenue recognition reports; telephone lists;
other employees’ salaries data; administrative policies and
procedures; employee rosters; organization charts; and all company
policies and procedures;
(iii) technical information
including software code and documentation; data mining algorithms
and techniques; patterns, thresholds and values; and all forms of
research and development, including but not limited to information
related to abandoned or failed technologies or products;
and
(iv) all information which is not
generally known to the public or within the industry or trade in
which the Company competes and that gives the Company any advantage
over its competitors, and all physical embodiments of that
information in any tangible form, whether written or
machine-readable in nature.
-4-
Proprietary Information does not
include any of your prior inventions, products, patents or
copyrights or academic information generated by you using only
non-Company data. In addition, Proprietary Information does not
include information which (A) is or becomes generally
available to the public other than as a result of a disclosure by
you, (B) was within your possession (as proven by you) prior
to its being furnished to you by or on behalf of the Company,
provided that the source of such information was not bound by a
c
