10.14
SIXTH AMENDED EMPLOYMENT AGREEMENT
THIS SIXTH AMENDED EMPLOYMENT AGREEMENT made this 24th day of November,
1997, by and between QUESTECH, Inc., a Virginia corporation (hereinafter
referred to as the "Company"), and Vincent L. Salvatori (hereinafter referred
to as the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Employee entered into an Employment
Agreement on the 20th day of December 1979, as amended on December 16, 1983,
December 23, 1986, June 13, 1991, December 23, 1991 and November 15, 1995
(collectively the "Agreement");
WHEREAS, the Company and the Employee have determined that further
amendments to the Agreement are now required;
WHEREAS, the current Amendments to the Agreement were approved by the
Board of Directors of the Company on November 17, 1997;
WHEREAS, the Company and the Employee are desirous of setting forth in
writing the Agreement as amended.
NOW, THEREFORE, for and in consideration of the sum of Ten dollars
($10.00), paid by Employee to the Corporation and other valuable
consideration, receipt of which is
hereby acknowledged and the convenants, conditions and promises herein
contained, it is hereby agreed as follows:
1. Employment. By Resolution duly adopted by its Board of Directors
(hereinafter referred to as ("the Board"), a copy of the Board's
resolution attached hereto as Exhibit A, the Vice Chairman of the
Board or the President and Chief operating Officer, was authorized to
enter into this amended Agreement by executing this Agreement.
Accordingly, the Company hereby agrees to employ the Employee and the
Employee hereby accepts said employment upon the terms and conditions
hereinafter set forth.
2. Positions and Titles. During the period of the Employee's full-time
employment by the Company, as hereinafter defined in this Agreement,
the Employee shall have the titles and hold the offices of Chairman of
the Board and Chief Executive Officer, and shall have the usual
authority associated with said positions as more fully described in
the By-laws of the Company in effect as of the date of this Agreement,
In addition, the Company and the Employee further agree as follows:
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(a) The Employee may hold other offices and have other titles from
time to time as determined by the Board, but shall have no less
authority, positions and titles granted the Employee by the
Company pursuant to this paragraph.
(b) If the Employee elects part-time employment in accordance with
this Agreement, during the period of the Employeets part-time
employment by the Company, as hereinafter defined in this
Agreement:
(i) The Employee acknowledges the Board's right to request that
the Employee resign from the position of Chief Executive Officer;
and
(ii) The Employee shall continue to have the title of Chairman
of the Board and shall have the usual authority associated with
that position and perform such other duties as may be mutually
agreed upon from time to time between the Employee and the
Company.
(c) The Employee's Agreement to resign the office of Chief Executive
Officer upon his being employed by the Company having located a
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satisfactory replacement or the position of Chief Executive
Officer, and absent same, the Employee shall retain the office
and title until such replacement is located by the Company, but
in no event longer than nine (9) months from the date the
Employee elects part-time employment.
3. Term. The term of this Agreement shall be for a period of three (3)
years from the date of this Agreement. This Agreement, so long as it
governs Employee's full-time employment by the Company, shall be
renewed annually by appropriate resolutions duly adopted by the Board
for successive three (3) year periods. The Employee agrees to remain
in the employ of the Company, whether it be on a full-time or
part-time basis, as more fully defined in this Agreement, during the
period of time of this Agreement unless terminated or canceled
pursuant to paragraph 15 or 18 herein. The period of time of this
Agreement shall be the sum of the period of full-time employment
hereunder and of part-time employment unless there is an event of (i)
termination pursuant to paragraph 15 herein, (ii) cancellation
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pursuant to paragraph 18 hereof, or (iii) death of the Employee, and
shall be referred to as "the effectiveness of this Agreement". The
annual renewal of this Agreement by the Board shall be governed by the
following:
(a) The subject of the annual renewal of this Agreement by the Board
shall be an Agenda item for the Board at its regularly scheduled
quarterly meeting immediately preceding or following the
anniversary date of this Agreement, whichever may be closer to
the anniversary date.
(b) The annual renewal of this Agreement shall be by the majority
vote of the members of the Board, excluding the Employee's vote.
4. Full-Time Employment Status. During the period of the Employee's
full-time employment by the Company, the Employee shall devote such of
his business hours to the affairs of the Company as may be necessary
in order to perform his duties and responsibilities.
5. Part-Time Employment Status. During the effectiveness of this
Agreement, and upon the Employee having completed at least twelve (12)
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years of service for the Company and being at least fifty-two (52)
years of age, the Employee shall have the right to elect part-time
employment status and to be so employed by the Company for a period of
up to ten (10) years. Such right shall also be granted the Employee
in the event this Agreement and/or extension thereof are not renewed
at any time. Part-time employment, for purposes of this Agreement,
shall be defined as the Employee devoting, at his option, a minimum of
thirty-three percent (33%) and a maximum of fifty percent (50%) of his
business hours to the affairs of the Company based on two thousand and
eighty (2,080) hours annually. The employee's right to part-time
employment status and to be so employed by the Company shall be
governed by the following:
(a) The Employee shall provide the Company at least ninety (90) days
written notice of the intention to convert his employment status from
full-time to part-time. The notice may be Provided by the Employee at
any time after he has met the conditions precedent to part-time
employment or at least ninety (90) days prior to the date the Employee
fulfills the
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latest condition precedent to part-time employment status.
(b) The time at which such election is to be effective may be
shortened or waived in its entirety or extended up to an
additional six (6) months after the ninety (90) day period by a
vote of two-thirds (2/3) of the Board, excluding the Employee's
vote.
6. Compensation. The Company shall pay to the Employee as compensation
for his services hereunder the amount set forth in this paragraph,
subject to the further provisions of this paragraph:
(a) During Full-Time Employment. During the period of the Employee's
full-time employment by the Company, he shall be paid a salary
for the office of Chief Executive Officer in the sum of at least
One Hundred Forty-five Thousand Dollars ($145,000.00), to be
reviewed and increased at least annually by appropriate action of
the Board, in such a manner as to insure that the compensation
rate is commensurate with the industry scale for similar
positions. In addition to the
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salary to be paid the Employee, the Company by appropriate action
of the Board may provide the Employee bonus payments based on the
performance of the Employee and the financial condition of the
Company and such other benefits consistent with the Employee's
position. In addition, the Employee shall be entitled to receive
an annual fee as Chairman of the Board of not less than $40,000
as well as a fee as a director of the Company of not less than
$20,000.
In the event the Employee is not an officer or director of the
Company, he shall no longer be paid fees as Chairman or as a
director, but his base salary for all purposes in the Agreement
shall be no less than $205,000 or his total compensation,
including such fees, immediately prior to this time he no longer
is an officer and/or director of the Company, if higher.
(b) During Part-Time Employment. During the period of the Employee's
part-time employment by the Company, the Employee's salary shall
be governed by the parameters of hours set
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forth in paragraph 5 of this Agreement. The compensation shall
be further premised on the actual hours worked as stated on the
Employee's time card and submitted to the President of the
Company for his counter-signature. Said part-time compensation
shall be determined as follows:
(i) If the Employee is age fifty-five (55) or older at the time
of his conversion to part-time employment, he shall receive
compensation based on his hourly rate of pay which shall equal
the annual rate of compensation (including the fees referred to
above) received by the Employee at the date of Employee's
conversion to part-time employment, divided by two-thousand and
eighty (2,080) without further deduction.
(ii) If the Employee is between the ages of fifty-two (52) and
fifty-five (55) (but has not reached his fifty-fifth (55th)
birthday) at the time of his conversion to part-time employment,
he shall receive compensation based on his hourly rate of pay as
first determined in subparagraph (i)
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above (hereinafter referred to as the "Normal Hourly Rate") and
then adjusted downward as follows:
(aa) The normal hourly rate shall be reduced by
fifteen percent (15%) if the Employeers conversion to
part-time employment occurs at the age of fifty-two (52) but
before his fifty-third (53rd) birthday.
(bb) The normal hourly rate shall be reduced by ten
percent (10%) if Employee's conversion to part-time
employment occurs at the age of fifty-three (53) but before
the fifty-fourth(54th) birthday.
(cc) The normal hourly rate shall be reduced by five
percent (5%) if Employee's conversion to part-time
employment occur at the age of fifty-four (54) but before
his fifty-fifth (55th) birthday.
(iii) The Employee's hourly rate as determined by paragraph
6(b)(i) and (ii) shall be increased on each anniversary date
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of this agreement by the increase in the Consumer Price Index of
the prior twelve-month period.
(iv) The Employee shall receive such other compensation and
benefits which are granted pursuant to subparagraph (a) of this
paragraph or associated with other positions he holds in the
Company.
7. Vacation and Sick Leave. The Employee shall be entitled to vacations
and sick leave as set forth in the Company's Handbook for Employees in
effect as of the date of this Agreement, with such improvements and
additional benefits as may be incorporated therein from time to time.
Vacation time may be accrued on a pro-rata basis for part-time work
equal to one-third (1/3) to one-half (1/2) of the normal full-time
accrual, depending on the extent of part-time employment status.
S. Expenses. The Company agrees to reimburse the Employee in full for all
reasonable expenses incurred by the Employee in the pursuit of the
Company's business, whether the Employee is employed on a full-time or
part-time basis. The Employee shall submit to the President of the
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Company for his counter-signature appropriate expense reports and
vouchers in support of-the expenses incurred on behalf of the Company.
9. Insurance (Hospital, Medical, Dental and Vision). The Company
acknowledges that the Employee and his dependents, including his
current spouse (as of the date of this Agreement or any amendment
thereto), have been and are currently participants in the Company's
medical plan and that in addition the Company has maintained and
currently maintains dental and vision insurance policies for the
Employee, his current spouse, and his dependents.
With regard to such plans and insurance, the Company agrees with the
Employee as follows:
(a) To the extent possible under the terms of the plan, and if
necessary, through other insurance, the Company shall continue to
maintain the plan and shall be responsible for the respective
premium payments throughout the effectiveness of this Agreement,
(b) Or, if the Company shall not continue its plan, it shall purchase
insurance comparable thereto, to reimburse the Employee for all
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hospital, medical, dental and vision expenses not otherwise
covered.
(c) In the event the Employee has been employed by the Company for at
least twelve (12) years and terminates this Agreement pursuant to
paragraph 15(a), or this Agreement has not been terminated but
the term hereof has expired, the employee, his current spouse as
of the date of this Agreement or any amendment thereto, and to
the extent allowed by the plans and insurance, their dependents,
shall be provided life-time coverage identical with the coverage
set forth in subparagraphs (a) and (b). Such reimbursement of
the Employee shall be determined after deductions for Medicare,
Medicare supplements, and any other health insurance benefit
payments.
10. Insurance (Life). The Company shall continue to maintain permanent
life insurance (Policy #lA2248622-0 or its substitute) on the Employee
in the face amount of not less than $300,000 and agrees to pay full
premiums due on said policies during the effectiveness of this
Agreement. The
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Employee shall have the sole right to designate the beneficiaries
under such policies of insurance. The Company agrees that it shall:
(a) Pay all premiums on such policies and otherwise maintain them in
full force and effect.
(b) Not borrow on the policies or otherwise encumber them.
(c) Make no attempt or request on the Employee to change the names of
any beneficiaries or the method of the payment of the proceeds to
them.
(d) Regularly exhibit to the Employee, if requested, receipts for
premium payments as well as to furnish the Employee with proof
that the policies are in full force and effect with the
appropriate beneficiary designations.
11. Insurances.
(a) Executive Benefit Plan. The Company and Employee acknowledge
that they have entered into an Agreement setting forth an
Executive Benefit Plan dated March 9, 1984, as amended ("the
Executive Benefit Plan"). In
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connection therewith, the parties agree that this Agreement shall
not in any manner modify, alter or change the terms and
conditions of the Executive Benefit Plan.
It is further agreed that:
(i) The Employee's benefits shall not be reduced on account
of paragraph seven (7) of the Executive Benefit Plan.
(ii) All other provisions of the Executive Benefit Plan as
amended, shall remain in full force and effect.
(iii) The Employee shall be provided an annual report on the
status of the Executive Benefit Plan and his account
therein.
(iv) The Company will fully fund the financing of the
Executive Benefit Plan by January 30, 1990, and
transfer ownership of such funding vehicles to a trust
to be established by mutual consent between the Company
and the Employee.
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(b) Group Term. The Employee shall have the right to continue to
receive the group term benefit for the $100,000 group life
insurance and continue to purchase the optional $100,000
additional policy, currently costing $12.00 per pay period during
the effectiveness of this Agreement.
12. QuesTech Officers and Managers Deferred Compensation Trust (DEF COM
I). The Company agrees that the Employee shall have the right to
participate in DEFCOM I during the period he is receiving any payments
under this Agreement, and thereafter the Company agrees to allow the
Employee to make annual contributions of the eligible amounts which
can be contributed by the Founders until age 65. The Company further
agrees that the Employee shall receive from DEF COMI upon retirement
at least the highest annual payment per year of any other participant
in the Plan. The Company agrees that the Employee may continue to
serve as a Trustee of the DEF COM I Compensation Trust. The Employee
shall be provided all reports and documents available to any other
trustee or person.
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13. QuesTech Variable Deferral Plan ("the Deferral Plan"). The Company
agrees that the Employee shall continue to have the right to
participate in the Deferral Plan until the age of 65. The Company
further agrees that the Employee may continue to serve as a trustee of
the Deferral Plan Trust. The Company further agrees that:
(a) The Employee shall participate at the level chosen by him until
age 65.
(b) At termination of the Plan the Employee shall participate in any
surplus distribution in accordance with his pro-rata share of the
total pool amount.
(c) The Employee shall be provided all reports and documents
available to any other trustee.
14. Disability. The Company acknowledges that it currently maintains
disability insurance policies to compensate the Employee in the event
of his disability. Notwithstanding any obligations on the Company to
maintain disability insurance policies or the availability of same to
the Company, the Company and Employee agrees as follows:
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(a) In the event of the Employee's disability, the Employee shall be
entitled to the compensation specified in this Agreement, less
any payments made under the Company's disability insurance
policies, for the remainder of the Employeers employment term, be
it full-time or part-time, and for so long as the Employee
remains under the disability.
(b) "Disability" as used in this paragraph shall be defined by the
definition set forth in the then existing disability insurance
policies of the Company.
(c) In the event the Company does not have in full force and effect
any disability insurance policies at the time of the Employee's
disability, "disability" shall be defined as sickness, physical
or mental, or other incapacity, or other reason causing the
Employee to be unable to reasonably perform his services with
respect to the company's business as those performed immediately
prior to such disability.
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15. Termination. This Agreement may be terminated by the Company and the
Employee pursuant to the following:
(a) Employee's Voluntary Termination. The Employee may voluntarily
terminate this Agreement by providing the Company one hundred
twenty (120) days written notice if such termination is requested
during the Employee's full-time employment and sixty (60) days
written notice if during part-time employment. Any compensation
to be paid to the Employee by the Company resulting from
termination shall be governed by paragraph 16 of this Agreement.
(b) Involuntary Termination. The Company shall have the right to
involuntarily terminate the Employee with or without cause at any
time. If such termination is without cause, the Company shall
pay to the Employee the compensation as set forth in paragraph
16(b) herein. In the event the Employee is terminated by the
Company for cause, he shall be entitled to no further
compensation under this Agreement as of the effective date of
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the termination. For purposes of this Agreement, "cause" shall
be defined as any action taken by the Employee or any action
which the Employee fails to take which is determined by a court
of competent jurisdiction to be criminal, fraudulent or to
involve gross negligence on the part of the Employee, other than
an act or failure to act which the Employee in good faith
believed was for the benefit of the Company. The Company agrees
to provide the Employee at least sixty (60) days written notice
of termination pursuant to this subparagraph.
16. Payment on Termination.
(a) Voluntary Termination. In the event the Employee voluntarily
terminates this Agreement pursuant to paragraph (15)(a) hereof or
exercises his right to elect part-time employment status pursuant
to paragraph 5 hereof during the period of his full-time
employment, he shall be paid the maximum total compensation he
would receive under this Agreement for a period of five (5) years
from the effective date of termination or
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change of employment status, unless upon the Employee's request,
a waiver of the non-compete provision set forth in paragraph 17
is approved by a vote of two-thirds (2/3) of the Board excluding
the Employee. Any payments required to be made to the Employee
due to voluntary termination shall be payable to the Employee, or
upon his death, to his spouse or to his estate, at the Employee's
sole option.
(b) Involuntary Termination. In the event the Employee is
involuntarily terminated without cause by the Company, pursuant
to paragraph 15 (b), he shall receive his full maximum total
compensation pursuant to this Agreement, including part-time
employment, for a period of five (5) years from the effective
date of termination. Any payments required to be made to the
Employee due to involuntary termination shall be payable to the
Employee, or upon his death, to his spouse or to his estate, at
the Employee's sole option.
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(c) In the event that the Company is taken over by a hostile board or
the Employee is involuntarily terminated without cause by the
Company, the Company shall post a letter of credit or a note
subordinated only to the prime lender, in the amount of the total
compensation to be paid the Employee under paragraphs 10,11,12
and 16(b), such note or letter of credit to be reduced dollar for
dollar as compensation is paid out to the Employee under
paragraph 16(b), or as premiums are paid to insurers on his
behalf. In the event this paragraph is invoked, and the Employee
receives a subordinated note, sales of assets by the Company
greater than One-Hundred Thousand ($100,000) dollars will require
the approval of the Employee. A hostile board is one, which
involuntarily removes the employee from his position as Chairman
of the Board, and/or CEO or which changes the duties of either
position without the concurrence of the Employee.
17. Covenant Against Competition. The Employee acknowledges that he has
been involved in the
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operation of the Company and its subsidiaries and has familiarity
with.the operation of the business of the Company and its
subsidiaries. The Employee further acknowledges that the Company and
its subsidiaries do business throughout the United States. The
Employee agrees that during the effectiveness of this Agreement and
for a period of three (3) years from the effective date of the
Employee's voluntary or involuntary termination of employment, he will
not acquire interest in, other than an interest in a publicly traded
corporation which is insufficient to influence such corporation's
business or work, or perform any services for any person, firm,
company, corporation, or other entity anywhere in the United States,
which has been, is, or is then potentially a competitor the Company or
its subsidiaries, or which is engaged primarily in activities similar
to the type of business conducted by the Company or its subsidiaries
at the time of termination, unless the Board approves same by
two-thirds (2/3) vote excluding the vote of the Employee.
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18. Death of Employee. In the event of the Employee's death during the
effectiveness of this Agreement, this Agreement shall stand terminated
as of the date of death, except as to the following:
(a) All compensation then being paid to the Employee by the Company
as of the date of death shall continue to be paid to the
Employee's surviving spouse or if not survived by his spouse,
then his dependents, for a period of five (5) years after the
date of death. In the event the Employee is not survived by his
spouse or leaves no dependents, no compensation shall be payable
by the Company after the date of death.
(b) The provisions of paragraph 9(c) shall survive the termination of
this Agreement and shall bind the Company as to their
requirements.
(c) The Company shall cooperate and take all necessary steps to
effectuate the payment of the insurance proceeds established in
paragraph 10 of this Agreement.
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(d) All accrued and unpaid benefits under this Agreement, whatsoever
in nature, shall be payable to the Employee's estate.
19. Assignment of Agreement. In the event that the Company is merged,
reorganized, sold or otherwise comes under new ownership or control,
if allowable under the law, all provisions of this Agreement shall
bind the Company's successor in interest. The Company's successor in
interest shall be required to retain the employee in the same capacity
as employed by the Company.
20. Amendments. This Agreement cannot be changed or terminated orally
and no waiver of compliance with any provision or condition hereof
shall be effective unless evidenced by an instrument in writing duly
executed by the parties hereto sought to be charged by such waiver.
21. Writing. This Agreement sets forth the entire understanding of the
parties with respect to the employment of the Employee by the Company
and supersedes any and all prior agreements, arrangements and
understandings relating to the subject matter hereof. This-Agreement
shall be binding upon and inure to the benefit of the
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parties and their respective successors and assigns.
22. Waiver. The waiver by the Company or the Employee of any breach of any
provision of this Agreement shall not be construed as a waiver of any
subsequent breach of this Agreement.
23. General Provisions.
(a) Should the parties disagree as to the meaning of the provisions
of this Agreement, they shall attempt to negotiate a settlement
of their differences. If, however, the negotiations are
unsuccessful, either party may seek aid of a court competent
jurisdiction in the Commonwealth of Virginia, to either settle
disputes arising as to the meaning or intent of this Agreement or
to declare the parties' rights or to enforce this Agreement. In
that event, the court shall deny attorney's fees and costs to the
party not substantially prevailing and award the same to the
party who substantially prevails.
(b) In the event that any term, provision, or paragraph of this
Agreement is declared
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illegal, void or unenforceable, the same shall not affect or
impair the other terms, provisions, or paragraphs of this
Agreement. Convenants contained in this Agreement shall be
independent. The doctrine of severability shall be applied. The
parties do not intend by this statement to imply the illegality,
voidness or unenforceability of any of the terms, provisions or
paragraphs of this Agreement.
24. Captions. The captions for each paragraph are not part of this
Agreement, but are for identification purposes only.
25. Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the Commonwealth of Virginia.
26. Notices. Any notice, writing, report or other document required or
permitted hereunder shall be in writing and shall be given by pre-paid
registered or certified mail, return receipt requested, addressed as
follows:
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27.
IF TO THE COMPANY:
QuesTech, Inc.
7600W Leesburg Pike
Falls Church, VA 22043
Attention: President and Chief Operating Officer
COPY TO:
Michael Rivera, Esq.
Vice President and General Counsel
7600-W Leesburg Pike
Falls Church, VA 22043
IF TO THE EMPLOYEE:
Vincent L. Salvatori
2652 Green Briar Lane
Annapolis, MD 21401
The date of any such notice and of service thereof
shall be deemed to be the date of dispatch. Either party
may change his address or purpose of notice by giving in
accordance with the provisions of this paragraph.
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IN WITNESS WHEREOF, the parties hereto have hereunto
set their hands the date and year first above written.
THE COMPANY:
Witnessed by: QUESTECH, INC.
M. P. Rivera By: Gerald F. Mayefskie
- --------------------- ------------------------------
GERALD F. MAYEFSKIE
President and Chief Operating
Officer
THE EMPLOYEE:
Witnessed by: VINCENT L. SALVATORI
M. P. Rivera Vincent L. Salvatori
- --------------------- ------------------------------
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