Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is hereby entered into effective as
of July 17, 2006, between DynCorp International LLC, a Delaware limited
liability company (the "Company"), and Herbert J. Lanese ("Executive").
In consideration of the mutual promises and covenants contained herein, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT.
1.1. POSITION. During the Term (as hereinafter defined) of this Agreement, and
subject to the terms and conditions set forth herein, the Company agrees to
employ Executive as its President and Chief Executive Officer reporting to the
Chairman of the Board of Directors (the "Board") of DynCorp International Inc.,
the Company's parent company.
1.2. ELECTION TO OFFICE. During the Term of this Agreement, the Company shall
use its reasonable best efforts to cause the Executive to continue to be
nominated as a member of the Board.
1.3. FULFILLMENT OF DUTIES. During the Term of this Agreement, Executive shall
(i) devote his full business time and best efforts to the performance of his
services hereunder, excluding vacation periods and periods of illness or
incapacity, and (ii) perform his services hereunder faithfully, diligently and
to the best of his skill and ability.
1.4. LOCATION. During the Term of this Agreement, Executive will perform his
duties and services in the greater Washington, D.C. metropolitan area and
Executive agrees to make such business trips to the Company's other locations as
may be reasonable and necessary in the performance of his services hereunder.
2. COMPENSATION AND BENEFITS.
2.1. SALARY. In consideration of and as compensation for the services agreed to
be performed by Executive hereunder, the Company agrees to pay Executive during
the Term of this Agreement a base annual salary (the "Base Salary") of not less
than $800,000 per year, less standard deductions and withholdings, payable bi-
monthly in accordance with the Company's regular payroll practices. The Company
will review Executive's Base Salary and other compensation (including bonuses
and incentive compensation) from time to time during the Term of this Agreement
and, at the recommendation of the Compensation Committee (the "Committee") of
the Board, may increase his Base Salary or
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other compensation (including incentive compensation) from time to time. Any
increase in Base Salary or other compensation (including incentive compensation)
shall in no way limit or reduce any other obligation of the Company hereunder
and, once established at an increased rate, Executive's Base Salary hereunder
shall not be reduced.
2.2. INCENTIVE COMPENSATION. During the Term of this Agreement, in addition to
the Base Salary provided in Section 2.1 above, Executive shall be eligible to
receive additional incentive compensation of up to $1,000,000 per year based on
the achievement of performance targets established by the Committee ("Incentive
Compensation").
2.3. OTHER BENEFITS. During the Term of this Agreement, Executive shall be
entitled to participate in all of the applicable employee benefit plans,
programs and/or arrangements of the Company which may be available to the other
senior executives of the Company on the same terms as such other executives.
2.4. RELOCATION. The Company will reimburse Executive for costs and expenses
related to his relocation to the Washington, D.C. area.
2.5. EQUITY. Executive will be entitled to a 1.6% Class B Percentage Interest in
the Company's indirect parent, DIV Holding LLC, with a four year vesting
including the accelerated vesting of the first traunch, and otherwise pursuant
to and in accordance with the Amended and Restated Limited Liability Company
Operating Agreement of DIV Holding LLC, dated as of November 22, 2005, among The
Veritas Capital Fund II, L.P. and the other persons listed as Class A Members
and Class B Members named therein, as amended.
3. TERM.
3.1. TERM. The term of employment under this Agreement means the period that
commenced on July 17, 2006 and expiring at midnight on July 17, 2010; provided,
that this Agreement will automatically renew for additional periods of one (1)
year each commencing on July 17 of each successive year following the initial
Term unless written notice of intent not to renew is delivered by the Company or
the Executive to the other party at least 90 days prior to the effective date of
any renewal hereof.
3.2. TERMINATION OF EMPLOYMENT
Executive's employment with the Company may be terminated under the following
conditions:
3.2.1. RETIREMENT, DEATH OR DISABILITY. Executive's employment with the
Company shall terminate effective upon the date of Executive's
Retirement from the Company (as defined in Section 5.5), resignation
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from the Company, death or "Complete Disability" (as defined in Section
5.1).
3.2.2. FOR CAUSE. The Company may terminate Executive's employment
under this Agreement for Cause (as defined in Section 5.2) by delivery
of written notice to Executive specifying the Cause or Causes relied
upon for such termination. Any notice of termination given pursuant to
this Section 3.2.2 shall effect termination as of the date specified in
such notice or, in the event no such date is specified, on the last day
of the month in which such notice is delivered or deemed delivered as
provided in Section 7.3 below.
3.2.3. WITHOUT CAUSE. The Company may terminate Executive's employment
under this Agreement at any time and for any reason by delivery of
written notice of such termination to Executive. Any notice of
termination given pursuant to this Section 3.2.3 shall take effect as
of the date specified in such written notice.
3.2.2. TERMINATION BY EXECUTIVE FOR GOOD CAUSE. Executive may terminate
Executive's employment with the Company for Good Cause (as defined in
Section 5.3) upon thirty (30) days written notice to the Company.
3.2.3. TERMINATION BY MUTUAL AGREEMENT OF THE PARTIES. Executive's
employment pursuant to this Agreement may be terminated at any time
upon the mutual written agreement of the parties. Any such termination
of employment shall have the consequences specified in such mutual
agreement.
3.2.4. BOARD/COMMITTEE RESIGNATION. Upon termination of Executive's
employment for any reason, Executive agrees to resign, as of the date
of such termination and to the extent applicable, from the Board (and
any committees thereof) and the Board of Directors (and any committees
thereof) of any of the Company's affiliates.
4. COMPENSATION UPON TERMINATION.
4.1. RETIREMENT, DEATH OR COMPLETE DISABILITY. If Executive's employment is
terminated by his Retirement, death or Complete Disability, Executive (or his
heirs or legal representative) shall be entitled to Executive's Base Salary and
accrued and unused vacation earned through the date of termination, subject to
standard deductions and withholdings. In addition, upon Executive's (or his
heirs or legal representative) furnishing to the Company an executed waiver and
release of claims (a form of which is attached hereto as Exhibit A, which will
be revised for signature by Executive's heirs or legal representative if
applicable), Executive (or his heirs or legal representative) shall be entitled
to:
4.1.1. a pro rated portion of his Incentive Compensation that would be
payable to the Executive based on projected Company performance through
the termination date, less standard deductions and withholdings; and
4.1.2. exercise any vested options to purchase stock (common or
otherwise) in the Company granted to Executive pursuant to any plan,
agreement or otherwise, or any equivalent or similar vested rights
which appreciate or tend to appreciate as the value of the Company's
stock appreciates, such options and rights to be in accordance with the
terms of any applicable plan or agreement, it being understood that the
provisions of this Section 4.1.2 shall have no applicability to the
rights of Executive as a Class B Member of DIV Holding LLC and nothing
contained in this Agreement shall operate to change, amend or vary any
of the terms of the Amended and Restated Limited Liability Company
Operating Agreement of DIV Holding LLC, as amended from time to time;
provided, however, that Executive or his estate or legal representative
shall have a period of 90 days following the date of termination within
which to exercise or satisfy all such options or rights.
4.2. TERMINATION FOR CAUSE BY THE COMPANY OR RESIGNATION BY EXECUTIVE. If
Executive's employment is terminated by the Company for Cause or if Executive
resigns (other than for Good Cause), the Company shall pay Executive's accrued
Base Salary and accrued and unused vacation benefits earned through the date of
termination at the rate in effect at the time of the notice of termination to
Executive or Executive's notice of resignation to the Company.
4.3. TERMINATION WITHOUT CAUSE BY THE COMPANY OR TERMINATION BY THE EXECUTIVE
FOR GOOD CAUSE. If the Company terminates Executive's employment without Cause
(except under any circumstance in which Section 4.1 is applicable to Executive,
in which case this Section 4.3 shall not apply), or if the Executive terminates
this Agreement for Good Cause, Executive shall be entitled to Executive's Base
Salary and a pro rated portion of his Incentive Compensation that would be
payable to the Executive based on projected Company performance through the
termination date, less standard deductions and withholdings, and accrued and
unused vacation earned through the date of termination, subject to standard
deductions and withholdings. In addition, upon Executive's furnishing to the
Company an executed copy of the waiver and release of claims (a form of which is
attached hereto as Exhibit A), Executive (or his heirs or legal representative)
shall be entitled to:
4.3.1. a payment equivalent to 2.0 times the Executive's Annual Base
Compensation in effect at the time of Termination, less standard
deductions and withholdings, payable in two equal lump sum payments the
first payment on the first payroll date that is six months following
such
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termination, and the second payment on the first payroll date that
is twelve months following such termination, in accordance with the
Company's regular payroll practices;
4.3.2. exercise any vested options to purchase stock (common or
otherwise) in the Company granted to Executive pursuant to any plan,
agreement or otherwise, or any equivalent or similar vested rights
which appreciate or tend to appreciate as the value of the Company's
stock appreciates, such options and rights to be in accordance with the
terms of any applicable plan or agreement, it being understood that the
provisions of this Section 4.3.2 shall have no applicability to the
rights of Executive as a Class B Member of DIV Holding LLC and nothing
contained in this Agreement shall operate to change, amend or vary any
of the terms of the Amended and Restated Limited Liability Company
Operating Agreement of DIV Holding LLC, as amended from time to time;
provided, however, that Executive or his estate or legal representative
shall have a period of 90 days following the date of termination within
which to exercise or satisfy all such options or rights; and
4.3.3. elect reimbursement to the Executive (or his heirs or legal
representatives) for the same portion of Executive's COBRA health
insurance premium that it paid during Executive's employment up until
the earlier of either (i) the last day of Executive's COBRA health
insurance benefits or, ii) the date on which Executive becomes covered
under any other group health plan (as an employee or otherwise).
5. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
5.1. COMPLETE DISABILITY. "Complete Disability" shall mean the inability of
Executive to perform Executive's duties under this Agreement because Executive
has become permanently disabled within the meaning of any policy of disability
income insurance covering employees of the Company then in force. In the event
the Company has no policy of disability income insurance covering employees of
the Company in force when Executive becomes disabled, the term "Complete
Disability" shall mean the inability of Executive to perform Executive's duties
under this Agreement by reason of any incapacity, physical or mental, which the
Board, based upon medical advice or an opinion provided by a licensed physician
acceptable to the Board, determines to have incapacitated Executive from
satisfactorily performing all of Executive's usual services for the Company for
a period of at least one hundred twenty (120) days during any twelve (12) month
period (whether or not consecutive). Based upon such medical advice or opinion,
the determination of the Board shall be final and binding and the date such
determination is made shall be the date of such Complete Disability for purposes
of this Agreement.
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5.2. FOR CAUSE. For "Cause" shall mean:
5.2.1. the willful and continued failure by Executive to substantially
perform his duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental illness, injury
or disability), after a written demand for substantial performance is
delivered to him by the Board that identifies, in reasonable detail,
the manner in which the Board believes that Executive has not
substantially performed his duties in good faith;
5.2.2. the willful engaging by Executive in conduct that causes
material harm to the Company, monetarily or otherwise;
5.2.3. Executive's conviction of a felony arising from conduct during
the Term of this Agreement;
5.2.4. Executive's willful malfeasance or willful misconduct in
connection with Executive's duties hereunder; or
5.2.5. For purposes of this Subsection 5.2 no act, or failure to act,
on Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without reasonable
belief that his action or omission was in the best interest of the
Company or its shareholders.
5.3. GOOD CAUSE. "Good Cause" shall mean any of the following actions taken by
the Company or any subsidiary that employs the Executive: assignment of the
Executive to duties that are materially inconsistent with his status as a senior
executive or which represent a substantial diminution of his duties or
responsibilities in the Company, a reduction in Executive's Base Salary, except
in connection with an across-the-board salary reduction for all executives, a
failure by the Company to pay any of Executive's compensation in accordance with
Company policy, change of Executive's title, a failure to comply with the
obligations of the Company under Sections 1.1 and 1.2 hereof, or the failure of
a successor to the Company to confirm in writing within 5 business days of its
succession its obligation to assume and perform all obligations of this
Agreement, PROVIDED that any such events described in this Section 5.3 shall
constitute Good Cause only if the Company fails to cure such event within 30
days after receipt from Executive of written notice of the event which
constitutes Good Cause.
5.4. ANNUAL BASE COMPENSATION. "Annual Base Compensation" shall mean the total
of the Executive's most recent annual salary and target incentive under the
Company's Executive Incentive Plan.
5.5. RETIREMENT. "Retirement" shall mean the voluntary retirement of the
Executive from the Company (a) at or after age 62 or (b) at any time after the
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combination of the Executive's age and service with the company or any
predecessor or subsidiary equals or exceeds 75 years.
6. NON-SOLICITATION AND CONFIDENTIALITY.
6.1. NON-SOLICITATION. Executive hereby covenants and agrees that during the
Term of this Agreement and for a period of one year following the termination of
this Agreement, he will not directly or through a third party employ or solicit
for employment any employees of the Company or any persons who were employees of
the Company at any time during the twelve-month period immediately prior to any
such solicitation or proposed solicitation or employment.
6.2. CONFIDENTIALITY. Except as required by law or an order of a court or
governmental agency with jurisdiction, the Executive shall not, during the
period he is employed by the Company and for a period of one year thereafter,
disclose Confidential Information (as defined below) to any person or entity for
any reason or purpose whatsoever. Executive shall take all reasonable steps to
safeguard the Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft. All such Confidential Information shall
remain the exclusive property of the Company.
6.3 CONFIDENTIAL INFORMATION. For purposes of this Agreement and specifically
Section 6.2 above, "Confidential Information" shall mean non-public information
concerning the Company's business or operations, plans, strategies, prospects or
objectives; its sales, services, support and marketing plans, practices and
operations; the prices, costs and details of its services or prospective
services; the financial condition and results of its operations; information
received from third parties under confidential conditions; the Company's
personnel and compensation policies; and means of gaining access to the
Company's computer data systems and related information. "Confidential
Information" shall not include general knowledge based on Executive's experience
in the industry, information generally known in the industry, or information
that is or becomes generally available to the public other than as a result of
disclosure by the Executive.
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7. MISCELLANEOUS.
7.1. INDEMNIFICATION. The Company agrees at all times during the term of this
Agreement and thereafter, to indemnify, defend and hold the Executive, his
heirs, estate and legal representatives harmless from, any and all claims,
liabilities, demands, allegations, causes of action, or other threats, related
to or in any way arising out of, the services provided by the Executive under
this Agreement or at the request of the Company; provided, however, that this
indemnification shall not apply to acts or omissions that are the result of
conduct that would preclude the Executive from receiving indemnification under
Section 145 of the Delaware General Corporation Law in effect from time to time.
Upon receipt of notice of the assertion of any such claim, liability, demand,
allegation, cause of action or other threat, the Company shall pay the Executive
the cost of his defense by a counsel mutually acceptable to the Company and
Executive, and shall be responsible for the full payment of any judgment
including damages or penalties, including punitive damages or penalties, that
may be assessed or payable as a result of a settlement to which the Company and
the Executive consent, including the deductible portion of any loss covered by
Director and Officer Liability Insurance. Nothing herein shall limit the rights
of the Executive to the protections afforded by the Company's Directors and
Officers Liability Insurance as in effect from time to time.
7.2. COMPLIANCE WITH COMPANY POLICIES. During the term of this Agreement, the
Executive shall at all times comply with all applicable Company policies and
procedures, including the Company's Standards of Business Conduct.
7.3. NOTICES. Any written notice, required or permitted under this Agreement,
shall be deemed sufficiently given if either hand delivered or if sent by fax or
overnight courier. Written notices must be delivered to the receiving party at
his or its address on the signature page of this Agreement. The parties may
change the address at which written notices are to be received in accordance
with this section.
7.4. ASSIGNMENT. Executive may not assign, transfer, or delegate his rights or
obligations hereunder and any attempt to do so shall be void. This Agreement
shall be binding upon and shall inure to the benefit of the Company and its
successors and assigns and the term "Company" as used herein shall include such
successors and assigns to the extent applicable.
7.5. ENTIRE AGREEMENT. This Agreement, including Exhibit A contains the entire
agreement of the parties with respect to the subject matter hereof, and all
other prior agreements, written or oral, are hereby superseded and are of no
further force or effect. This Agreement may be modified or amended only by a
written agreement that is signed by the Company and Executive. No waiver of any
section or provision of this Agreement will be valid unless such waiver is in
writing and signed by the party against whom enforcement of the waiver is
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sought. The waiver by the Company of any section or provision of this Agreement
shall not apply to any subsequent breach of this Agreement. Captions to the
various sections in this Agreement are for the convenience of the parties only
and shall not affect the meaning or interpretation of this Agreement. This
Agreement may be executed in several counter-parts, each of which shall be
deemed an original, but together they shall constitute one and the same
instrument.
7.6. SEVERABILITY. The provisions of this Agreement shall be deemed severable,
and if any part of any provision is held illegal, void, or invalid under
applicable law such provision may be changed to the extent reasonably necessary
to make the provision, as so changed, legal, valid and binding. If any provision
of this Agreement is held illegal, void, or invalid in its entirety, the
remaining provisions of this Agreement shall not in any way be affected or
impaired but shall remain binding in accordance with their terms.
7.7 WITHHOLDING TAXES. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
7.8. APPLICABLE LAW. This Agreement and the rights and obligations of the
Company and Executive thereunder shall be governed by and construed and enforced
under the laws of the State of New York without regard to New York's conflict of
laws rules.
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In Witness Whereof, the parties have executed this Agreement effective
as of the date first above written.
DynCorp International LLC
By: /s/ Robert B. McKeon
------------------
Robert B. McKeon
DynCorp International
Attn: Chairman, Board of Directors
8445 Freeport Pkwy
Irving, Texas 75063
with a copy to: Schulte Roth & Zabel LLP
Attn: Benjamin M. Polk, Esq.
919 Third Avenue
New York, NY 10022
Executive
By: /s/ Herbert J. Lanese
-----------------
Herbert J. Lanese
at: DynCorp International
8445 Freeport Pkwy
Irving, Texas 75063
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EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in the Employment
Agreement dated April __, 2006, to which this form is attached, I, Herbert J.
Lanese, hereby furnish DynCorp International Inc. (the "COMPANY"), with the
following release and waiver ("RELEASE AND WAIVER").
I hereby release, and forever discharge the Company, its officers, directors,
agents, employees, stockholders, successors, assigns affiliates and benefit
plans, all of their past and present officers, directors, agents, and insurers,
in all capacities, including individually (all of which organizations and
persons are hereinafter collectively identified as the "COMPANY PARTIES"), from
any and all claims, demands, actions, indemnities, liabilities, or obligations
of whatever kind and nature, which I may have had, may now have, or may
hereafter claim to have through the date this Release and Waiver is executed,
whether known or unknown, contingent or otherwise, at law or in equity,
including, without limitation, any claim arising at any time prior to and
including my employment termination date with respect to any claims relating to
my employment and the termination of my employment, all compensation and
benefits relating to my employment (including but not limited to, claims for
salary, bonuses, commissions, stock, stock options, vacation pay, fringe
benefits, severance pay or any form of compensation); any claim of
discrimination based on my race, color, religion, sex, national origin, or
disability, if any; any claim that the Company Parties have violated any
federal, state or local statute, regulation, or ordinance with respect to my
employment or the cessation thereof, including, without limitation, Title VII of
the Civil Rights Act of 1964, 42 U.S.C. ss. 1981, the Employee Retirement Income
Security Act of 1974 and the Family and Medical Leave Act; any claim that the
Company Parties have wrongfully terminated my employment or breached any oral,
written, express, or implied employment agreement; any claim that the Company
Parties have intentionally or negligently inflicted emotional distress, mental
anguish or humiliation on me; any claim of the breach of any implied covenant of
good faith and fair dealing; any claim of damages, monetary or other personal
relief, and/or attorney's fees in any administrative and/or judicial proceeding
initiated by me, by any third party on my behalf, or by any governmental
authority prior to or following my execution of this Release and Waiver; any
claim of libel, slander and/or defamation of character; any retaliation,
"whistleblower," or public policy claim; and any other claim of whatever kind
not specifically identified in this Release and Waiver; provided, however, that
this release does not extend to and will not release the Company from any of its
obligations under the Employment Contract.
I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value to which I was already entitled as an Executive of the
Company. I further acknowledge that I have been advised, as required by the
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Older Workers Benefit Protection Act, that: (a) the Release and Waiver granted
herein does not relate to claims which may arise after this Release and Waiver
is executed; (b) I have the right to consult with an attorney, at my expense,
prior to executing this Release and Waiver (although I may choose voluntarily
not to do so); (c) I have twenty-one (21) days from the date of termination of
my employment with the Company in which to consider this Release and Waiver
(although I may choose voluntarily to execute this Release and Waiver earlier);
(d) I am entitled to revoke my consent to this Release and Waiver within seven
(7) days following the execution of this Release by delivering written
revocation notice to ___________ at [Address] and (e) this Release and Waiver
shall not be effective until the seven (7) day revocation period has expired. If
I timely revoke this Release and Waiver after signing it, this Release and
Wavier will become null and void and the Company will have no obligation to
provide me any of the consideration given for this Release and Waiver.
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