Exhibit 10.4

EMPLOYMENT AGREEMENT
James C. Reagan

      This EMPLOYMENT AGREEMENT (the “Agreement”) is made effective October 1,
2003 between American Management Systems, Incorporated, a corporation formed
under the laws of the State of Delaware with its principal place of business at
4000 and 4050 Legato Road, Fairfax, VA 22033 (“AMS”), and James C. Reagan,
residing at 2060 Beacon Height Drive, Reston, VA 20191 (the “Employee”).

      WHEREAS, AMS desires to engage the services of the Employee as Executive
Vice President, and the Employee is willing to render such services to AMS in
consideration of the terms and conditions agreed to by the parties; and

      WHEREAS, AMS has approved the employment of the Employee on the terms and
conditions set forth in this Agreement;

      NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, AMS agrees
to employ the Employee, and the Employee agrees to perform services for AMS as
an employee, effective as of October 1, 2003 upon the terms and conditions set
forth herein.

1.   Term.

    The initial term of this Agreement shall end on September 30, 2004, unless
it is terminated earlier as provided herein. Beginning on that date, and on each
anniversary thereafter, unless it is terminated earlier as provided herein or
AMS delivers written notice to the Employee of its intention not to extend the
Agreement at least 90 days before such anniversary date, the term of this
Agreement shall automatically be extended for one additional year. The
restrictive covenants in Sections 10 and 11 hereof shall survive the termination
of this Agreement.

2.   Title and Duties.

    The Employee shall be employed as Executive Vice President of AMS. The
Employee shall perform such services consistent with his position as might be
assigned to him from time to time and are consistent with the bylaws of AMS.

3.   Location.

    The Employee’s place of primary employment shall be within a 25-mile radius
of the location of the offices described above as AMS shall reasonably direct,
or at any other location that may be mutually agreed upon in the future. The
Employee understands that his performance of services for AMS may include
frequent business travel.

 

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4.   Extent of Services.

  a.   General.

    The Employee agrees not to engage in any business activities during the term
of this Agreement except those that are for the benefit of AMS, and to devote
his entire business time, attention, skill and effort to the performance of his
duties under this Agreement. Notwithstanding the foregoing, the Employee may
engage in charitable, professional and civic activities that do not impair the
performance of his duties to AMS, as the same may be changed from time to time,
or otherwise adversely affect AMS’s interest, reputation, business or welfare.
Nothing contained herein shall prevent the Employee from managing his own
personal investments and affairs, including but not limited to investing his
assets in the securities of publicly traded companies; provided, however, that
the Employee’s activities do not constitute a conflict of interest, violate
securities laws, or otherwise interfere with the performance of his duties and
responsibilities as described herein. The Employee agrees to adhere to AMS’s
published policies and procedures affecting directors, officers, employees, and
agents and shall use his best efforts to promote AMS’s interest, reputation,
business and welfare.

  b.   Corporate Opportunities.

    The Employee agrees that he will not take personal advantage of any business
opportunities that arise during his employment with AMS and that might be of
benefit to AMS. All material facts regarding such opportunities must be promptly
reported to the Board for consideration by AMS.

5.   Compensation and Benefits.

  a.   Base Salary.

    The Employee’s initial annualized base salary shall be $275,000. The base
salary shall be payable in accordance with AMS’s standard payroll practices. The
Employee’s annual base salary shall be reviewed no less frequently than
annually; provided, however, that at no time during the term of this Agreement
shall the Employee’s base salary be decreased from the base salary then in
effect except as part of a general program of salary adjustment by AMS
applicable to all similarly-situated employees.

  b.   Incentive Compensation.

  (i)   The Employee shall be eligible for an annual cash bonus having a value
from 0% to 120% of his annual base salary for the relevant year, with a target
percentage of 60% (“Target Bonus”). Such a bonus is dependent on AMS’s, the
Business Group’s, and the Employee’s performance and subject to AMS’s reasonable
discretion. Such annual bonuses shall be paid at the usual times for the payment
of annual bonuses by AMS.

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  (ii)   The Employee shall be eligible to participate in all long term
incentive plans in which other executive vice presidents are eligible to
participate.

  c.   Stock Options.

    As of October 1, 2003, the Employee shall be granted a nonqualified stock
option for 20,000 shares of common stock of AMS at a stock price equal to the
closing market price on October 1, 2003. The options will be granted under the
American Management Systems, Incorporated 2003 Stock Incentive Plan. The options
will vest over three years in increments of 33 and 1/3 percent on each
anniversary of the grant date.

    As of May 13, 2002, the Employee shall was granted a nonqualified stock
option for 25,000 shares of common stock of AMS at a strike price equal to the
closing market price of AMS stock on May 13, 2002. The options were granted
under American Management Systems, Incorporated 1996 Amended Stock Option Plan F
(“Plan F”). The options will vest over four years in increments of twenty-five
percent (25%) on the anniversary of the grant date. In the event of involuntary
termination without Cause, as defined herein, Employee will receive full vesting
of any of these unexercised stock options.

  d.   Other Benefits.

    The Employee shall be entitled to paid compensatory leave and vacation, sick
leave, and holiday pay in accordance with AMS’s policies in effect from time to
time, and eligible to participate pursuant to the terms of the relevant plans in
such life, health, and disability insurance, pension, deferred compensation and
other benefits as AMS extends, as a matter of policy, to its executive vice
presidents.

6.   Termination of Employment.

  a.   In General.

    Except as specifically provided below or elsewhere in this Agreement, the
Employee’s employment may be terminated by either party at any time with or
without Cause. In any event, the Employee’s employment shall terminate
immediately upon his death, in which case his estate or his beneficiaries, as
the case may be, shall be entitled to payment of any portion of his unpaid base
salary to the date of death and reimbursement for all outstanding and
reimbursable business expenses.

    Except as specifically provided below or elsewhere in this Agreement, in the
event that the Employee’s employment is terminated, this Agreement shall
terminate and the Employee shall be entitled only to such rights and payment of
such benefits as might be provided by the terms of any employee benefit plan or
program of AMS, or any other agreement between AMS and the Employee.

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    Except as specifically provided below or elsewhere in this Agreement,
constructive termination of the Employee’s employment by AMS shall be treated
the same as actual termination without Cause for purposes of this Agreement.
Constructive termination shall mean a termination of the Employee’s employment
at his own initiative following the occurrence, without the Employee’s prior
written consent, of one or more of the following events:

  (i)   an involuntary and significant diminution in the nature or scope of the
Employee’s authority or the duties that the Employee performs, unless the
Employee is given new authority or assigned new duties (whichever is applicable)
that are substantially comparable to his previous authority and duties;

  (ii)   a significant reduction in the Employee’s then current base salary, a
significant reduction in his opportunities for earnings under his incentive
compensation plans, or a significant reduction in his employee benefits as a
whole (in each case except as part of a general reduction that applies to other
similarly-situated employees); or

  (iii)   the relocation of the Employee’s office from its location at the time
of the change to a location more than 25 miles away.

    The mere failure of AMS to extend (or notice of its intention not to extend)
the Agreement shall not result in actual or constructive termination; provided,
however, that if AMS fails to extend the Agreement its obligation to provide the
benefits set forth in Section 6 (c), on the terms and conditions set forth in
that section, and without regard to any other section hereof, shall survive the
termination of the Agreement. Under no circumstances shall a termination or
constructive termination be deemed to occur for purposes of Section 6(c) hereof,
if AMS’s obligation to perform this Agreement is assigned or transferred to a
successor employer pursuant to Section 17 hereof or if the Employee otherwise
becomes employed without a significant period of unemployment under
substantially similar terms and conditions by a successor to some or all of the
business of AMS.

  b.   Voluntary Termination.

    The Employee’s voluntary termination of employment shall be effective upon
30 days’ prior written notice to AMS, unless the parties mutually agree to
advance or delay the effective date.

  c.   Termination Without Cause.

    AMS’s termination of the Employee’s employment without Cause (or taking of
any action or actions resulting in Constructive Termination of employment) shall
be effective upon 30 days prior written notice to the Employee, unless the
parties mutually agree to advance or delay the effective date.

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    If the Employee’s employment is terminated without Cause and not on account
of Disability, the Employee shall be entitled to receive from AMS the following
benefits in addition to any other benefits to which he might be entitled:

  (i)   a severance benefit in an amount equal to 100% of the Employee’s annual
base salary in effect immediately preceding such termination, but only if
(1) the Employee executes a release similar to the release attached hereto, (2)
the period for revoking such release has expired, and (3) the Employee has
complied with the requirements of Sections 10 and 11 hereof; and

  (ii)   full vesting of any unexercised stock options with a grant date on or
after October 1, 2003; and

  (iii)   if Employee elects health and dental insurance continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of any AMS
health plans that have been elected by the Employee or his qualified
beneficiaries at the time of employment termination pursuant to Section 4980B of
the Internal Revenue Code of 1986, as amended (the “Code”), AMS will directly
pay for such coverage, less the Employee’s portion of the premium(s) he would
pay if still an active Employee. AMS will pay the above amounts (1) for a
maximum of twelve months, and (2) only as long as the Employee and/or qualified
beneficiaries are eligible for continuation coverage under COBRA (for example,
continuation coverage will terminate if Employee and/or qualified beneficiaries
becomes covered under another employer’s group health plan). Employee is
responsible for electing benefit continuation (COBRA election form) and sending
a timely monthly check to AMS to cover the Employee’s portion of the premium(s).

    AMS shall pay 75% of the severance benefit in paragraph (i) within 30 days
after all of the applicable conditions are satisfied. AMS shall pay the other
25% of the severance benefit with interest (as set forth in paragraph 15) twelve
(12) months after all of the applicable conditions are satisfied, provided that
the Employee complies with the covenants in Sections 10 and 11 hereof throughout
that period. If the Employee does not comply with the requirements of
Sections 10 and 11 hereof at any time during that period, the other 25% of the
severance benefit shall not be paid to the Employee. All severance payments made
to the Employee pursuant to section 6(c) (i) shall be paid subject to all
legally required payroll taxes and deductions; additionally, AMS may withhold
for any sums owed by the Employee to AMS.

    For purposes of this Agreement, “Cause” shall mean: (1) the conviction of
the Employee of, or the entry of a plea of guilty or nolo contendere by the
Employee to any felony, or any misdemeanor involving moral turpitude; (2) fraud,
misappropriation or embezzlement by the Employee; (3) the Employee’s willful
failure, gross negligence or gross misconduct in the performance of his assigned
duties for AMS; (4) the Employee’s breach of a fiduciary duty to AMS; (5) any
act or omission of the Employee not at the express direction of the Board or
other

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    appropriate authority that reflects adversely on the integrity and
reputation for honesty and fair dealing of AMS or has a material detrimental
effect on AMS’s financial condition, position or business; or (6) the breach by
the Employee of any material term of this Agreement. For purposes of this
Agreement, “Disability” shall mean disability as defined in AMS’s existing long
term disability policy at the time of the disabling event.

7.   Effect of Change in Control.

  a.   Additional Benefits.

    If the Employee’s employment is terminated within twelve (12) months
following a Change in Control of AMS, and a severance benefit is payable
pursuant to Section 6(c)(i) hereof, (i) the amount of the severance benefit
shall be increased to 200% of the sum of the Employee’s then current base salary
and target annual bonus, (ii) the 25% hold-back of the severance benefit shall
not apply, and (iii) the Employee shall be entitled to the Gross-up Payment, if
any, described in subsection (c) below.

  b.   Definition of Change in Control.

    A “Change in Control” shall mean the first of the following events to occur:

  (i)   Any person or group (within the meaning of Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the “Act”)), other than AMS or a trustee or
other fiduciary holding securities under an employee benefit plan of AMS or a
corporation owned directly or indirectly by the stockholders of AMS in
substantially the same proportions as their ownership of stock of AMS, becomes
the beneficial owner (within the meaning of Rule 13d-3 under the Act), directly
or indirectly, of securities representing 50% or more of the combined voting
power of AMS’s then-outstanding securities entitled generally to vote for the
election of directors;

  (ii)   AMS’s stockholders approve an agreement to merge or consolidate with
another corporation unless AMS’s stockholders immediately before the merger or
consolidation are to own more than two-thirds (66-2/3%) of the combined voting
power of the resulting entity’s voting securities entitled generally to vote for
the election of directors;

  (iii)   AMS’s stockholders approve an agreement (including, without
limitation, an agreement of liquidation) to sell or otherwise dispose of all or
substantially all of the business or assets of AMS; or

  (iv)   During any period of two (2) consecutive years, individuals who, at the
beginning of the period, constituted the Board cease for any reason to
constitute at least a majority thereof, unless the election or the nomination
for election by AMS’s stockholders of each new director was approved by a vote
of at least two-thirds of the directors then still in office who were directors
at the beginning of the period (either by a specific vote or by

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    approval of the proxy statement of AMS in which such person is named as a
nominee for director, without objection to such nomination).

    However, no Change in Control shall be deemed to have occurred by reason of
(1) any event involving a transaction in which the Employee or a group of
persons or entities with whom or with which the Employee acts in concert,
acquires, directly or indirectly, 50% or more of the combined voting power of
AMS’s then-outstanding voting securities or the business or assets of AMS, or
(2) any event involving or arising out of a proceeding under Title 11 of the
United States Code or the provisions of any future United States bankruptcy law,
an assignment for the benefit of creditors or an insolvency proceeding under
state or local law.

  c.   Effect of Section 280G.

    The benefit provided under this Section 7 or Section 6 hereof, if
applicable, shall be provided without regard to any limitations imposed by
Section 280G or 4999 of the Code.

  (i)   In the event that the Employee becomes entitled to the benefits
(including the acceleration of certain benefits) provided under this Section 7
or Section 6 hereof, if applicable (the “Benefits”), if any of the Benefits will
be subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or
any similar tax that may hereafter be imposed), AMS shall pay to the Employee an
additional amount (the “Gross-up Payment”) such that the net amount retained by
the Employee, after deduction of any Excise Tax on the Total Benefits (as
hereinafter defined) and any federal, state and local income tax and Excise Tax
upon the Gross-up Payment provided for by this subparagraph (i), but before
deduction for any federal, state or local income tax on the Benefits, shall be
equal to the “Total Benefits,” as defined below.

  (ii)   For purposes of determining whether any of the Benefits will be subject
to the Excise Tax and the amount of such Excise Tax:

  (1)   Any other payments or benefits received or to be received by the
Employee in connection with a Change in Control of AMS or the Employee’s
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with AMS, any person whose actions
result in a Change in Control of AMS, or any person affiliated with AMS or such
person) (which, together with the Benefits, shall constitute the “Total
Benefits”) shall be treated as “parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess parachute payments” within the
meaning of Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by AMS’s independent
auditors such other payments or benefits (in whole or in part) will not
constitute parachute payments, or such excess parachute payments (in whole or in
part) represent

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    reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the meaning
of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise
Tax, and such tax counsel shall provide such opinion in writing to the Employee
such that he and his tax advisors can rely on it,

  (2)   The amount of the Total Benefits which shall be treated as subject to
the Excise Tax shall be equal to the lesser of (I) the total amount of the Total
Benefits and (II) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying paragraph (1), above), and

  (3)   The value of any non-cash benefits or any deferred payment or benefit
shall be determined by AMS’s independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code.

  (iii)   For purposes of determining the amount of the Gross-up Payment, the
Employee shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation for the calendar year in which the Gross-up
Payment is to be made and the applicable state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder at the time the Gross-up Payment is made, the
Employee shall repay to AMS at the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-up Payment
attributable to such reduction (plus the portion of the Gross-up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the portion of the Gross-up Payment being repaid by the Employee if
such repayment results in a reduction in Excise Tax and/or a federal and state
and local income tax deduction), plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), AMS shall make an additional gross-up payment in respect of such
excess (plus any interest payable with respect to such excess) at the time that
the amount of such excess is finally determined.

8.   Mitigation and Offset.

    If the Employee’s employment is terminated during the term of this Agreement
without Cause, the Employee shall be under no duty or obligation to seek or
accept other

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    employment, and no payment or benefits of any kind due him under this
Agreement shall be reduced, suspended or in any way offset by any subsequent
employment.

9.   Entitlement to Other Benefits.

    Except as expressly provided herein, this Agreement shall not be construed
as limiting in any way any rights or benefits the Employee, his spouse,
dependents or beneficiaries may have pursuant to any other employee benefits
plans or programs.

10.   Confidentiality and Return of Company Property.

    The Employee acknowledges that all confidential information regarding the
business of AMS and its subsidiaries and affiliates is the exclusive property of
AMS. On or before the date that his employment with AMS terminates, the Employee
shall return to AMS all copies of any material involving such confidential
information to AMS, and the Employee agrees that he will not, directly or
indirectly, divulge or use such information, whether or not such information is
in written or other tangible form. The Employee also shall return to AMS by that
date any other items in his possession, custody or control that are the property
of AMS including, but not limited to, computer, employee manual, passwords,
office equipment, identification card and office keys. The Employee understands
that even after the date that his employment with AMS terminates he will remain
bound by the terms of the American Management Systems, Incorporated
Confidentiality and Intellectual Property Rights Agreement, the AMS Ethical
Business Conduct policy statement, and the restrictive covenants contained in
this Section 10 and Section 11 hereof. This Section is intended to cover
confidential information of AMS that relates to the business of AMS that has not
otherwise been made public and shall not apply to employee responses that may be
required by proper governmental or judicial inquiry. No breach of this Section
shall be deemed to have occurred unless AMS provides written notice to the
Employee of the breach within 90 days after AMS becomes aware of it.

11.   Non-Solicitation.

  a.   Effective on the Separation Date and for a period of 12 months thereafter
(the “Restricted Period”) the Employee will not on his own behalf or on behalf
of another person or entity directly or indirectly solicit for the provision of,
or provide competitive products or services to, any AMS customer for which he
provided products or services on behalf of AMS during the two (2) years prior to
Separation Date, or any prospective customers that AMS was actively soliciting
to become a customer during two (2) years prior to his Separation Date and in
which employee had any direct and material involvement in soliciting or proposal
process. “Competitive Products or Services” means products or services, which
are in whole or in part similar to AMS’s proprietary products or to services
then available from AMS on the Separation Date.

  b.   During the Restricted Period, the Employee shall not directly or
indirectly, on his own behalf or in aid of another person or entity, hire or
engage or solicit for hire or engagement any individual who was an employee of
AMS in the three (3) months prior to the solicitation or hire.

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  c.   The Employee agrees that the above restrictions are reasonable –
including the short length of time and the limitation as to AMS customers and
prospective customers – and do not unreasonably restrict his ability to earn a
living after the Separation Date. The Employee further agrees that these
restrictions protect AMS’s legitimate business interests. The Employee also
agrees that in addition to any other remedies, including an action for damages,
AMS also may seek injunctive relief against Employee for violation of this
Section.

12.   Employee Representation.

    The Employee represents and warrants to AMS that he has disclosed to AMS any
and all obligations of a contractual or other nature to any person, business or
other entity that is inconsistent or in conflict with this Agreement or that
would prevent him from performing his obligations under this Agreement.

13.   Arbitration.

    Any dispute or controversy arising under or in connection with this
Agreement shall, if AMS or the Employee so elects, be settled by arbitration, in
accordance with the Employment Arbitration Rules and procedures of the American
Arbitration Association. Arbitration shall occur before a single arbitrator,
provided, however, that if the parties cannot agree on the selection of such
arbitrator within 30 days after the matter is referred to arbitration, each
party shall select one arbitrator and those arbitrators shall jointly designate
a third arbitrator to comprise a panel of three arbitrators. The decision of the
arbitrator shall be rendered in writing, shall be final, and may be entered as a
judgment in any court in the Commonwealth of Virginia. AMS and the Employee each
irrevocably consent to the jurisdiction of the federal and state courts located
in Virginia for this purpose. The arbitrator shall be authorized to allocate the
costs of arbitration between the parties. Notwithstanding the foregoing, AMS, in
its sole discretion, may bring an action in any court of competent jurisdiction
to seek injunctive relief in order to avoid irreparable harm and such other
relief as AMS shall elect to enforce the Employee’s covenants in Sections 10 and
11 hereof.

14.   Legal Expenses.

    Except as provided in Section 13 hereof, if any dispute or controversy
arises under or in connection with this agreement, AMS shall promptly pay all
the Employee’s legal fees and expenses relating to the dispute or controversy,
including, by way of example rather than limitation, reasonable attorneys’ fees
incurred by the Employee in seeking to obtain or enforce any right or benefit
under this Agreement, provided, however, that this obligation of AMS shall not
apply unless the Employee prevails in whole or in part on the dispute or
controversy. This obligation shall apply irrespective of whether the dispute or
controversy is resolved by arbitration, litigation, or a settlement thereof.

15.   Interest.

    AMS shall pay to the Employee interest at the prime lending rate as
announced from time to time by Citibank, N.A. or its successors or another
substantially similar rate on all or any

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    part of any amount to be paid to the Employee hereunder that is not paid
when due or that is deferred under an express obligation to pay interest.

16.   Indemnification and Litigation Expenses/Costs.

  a.   AMS agrees that if the Employee is made a party, or, is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative, or investigative (a “Proceeding”), by reason of the fact that he
is or was a director, officer or employee of AMS, or is or was serving at the
request of AMS as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Employee’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Employee shall be
indemnified and held harmless by AMS to the fullest extent permitted or
authorized by AMS’s certificate of incorporation and by-laws. To the extent
consistent with the foregoing, this obligation to indemnify the Employee and
hold him harmless shall continue even if he has ceased to be a director,
officer, member, employee or agent of AMS or other such entity described above,
and shall inure to the benefit of the Employee’s heirs, executors and
administrators. AMS shall reimburse the Employee all reasonable costs and
expenses (including legal fees) incurred by him in connection with a Proceeding
within 30 days after receipt by AMS of a written request for such payment. The
Employee is responsible for repayment of any amounts previously paid through AMS
reimbursement process, if it is ultimately determined that the Employee is not
entitled to be indemnified against such costs and expenses.

  b.   The failure of AMS (including its Board, independent legal counsel or
stockholders) to have rendered a formal decision that the Employee is entitled
to indemnification because the Employee has met the applicable standards of
conduct, shall not create a presumption that the Employee has not met the
applicable standards of conduct.

17.   Assignability and Successors.

    This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors, heirs (in the case of the Employee) and
assigns. No rights or obligations may be assigned or transferred by AMS except
that such rights or obligations may be assigned or transferred pursuant to a
merger or consolidation in which AMS is not the continuing entity, or the sale
or liquidation of all or substantially all of the assets of AMS, provided that
the assignee or transferee is the successor to all or substantially all of the
assets of AMS and such assignee or transferee assumes the liabilities,
obligations, and duties of AMS, as contained in this Agreement, either
contractually, or as a matter of law. AMS further agrees, that in the event of a
sale of assets or liquidation as described in the foregoing sentence, it shall
take whatever action it is legally entitled to take in order to cause the
assignee or transferee to expressly assume the liabilities, obligations, and
duties of AMS under this Agreement. No rights or obligations of the Employee
under this Agreement may be assigned or transferred by the Employee other than
his right to receive

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    compensation and benefits, provided such assignment or transfer is otherwise
permitted by law.

18.   Notices.

    All notices required or permitted hereunder shall be in writing and shall be
deemed effective: (a) upon personal delivery; (b) upon deposit with the United
States Postal Service, by registered or certified mail, postage prepaid; or
(c) in the case of delivery by nationally recognized overnight delivery service,
when received, addressed as follows:

    If to AMS to:

    American Management Systems, Incorporated
4050 Legato Road
Fairfax, VA 22033
Attention:   Garry Griffiths, Chief Human Resources Officer

    If to the Employee, to:

    James C. Reagan
2060 Beacon Height Drive
Reston, VA 20191

    or to such other address or addresses as either party shall designate to the
other in writing from time to time by like notice. At AMS’s sole discretion it
may substitute, for any advance notification otherwise required in this
Agreement, continued payment of regular salary and benefits during the otherwise
required advance notification period.

19.   Amendment.

    This agreement may be amended or modified only by a written instrument
executed by both AMS and the Employee.

20.   Captions.

    The captions appearing herein are for convenience of reference only and in
no way define, limit or affect the scope or substance of any section hereof.

21.   Time.

    All reference herein to periods of days are to calendar days, unless
expressly provided otherwise. Where the time period specified herein would end
on a weekend or holiday, the time period shall be deemed to end on the next
business day.

22.   Entire Agreement.

    Except for other agreements specifically referenced herein, this Agreement
constitutes the entire agreement between AMS and the Employee and supersedes all
prior agreements and

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    understandings, whether written or oral relating to the subject matter
hereof. This Agreement renders null and void the Employment Agreement signed by
Employee on April 23, 2002.

23.   Severability.

    In case any provision hereof shall be held by a court or arbitrator with
jurisdiction over AMS or the Employee to be invalid, illegal or otherwise
unenforceable, such provision shall be restated to reflect as nearly as possible
the original intentions of AMS and the Employee in accordance with applicable
law, and the validity, legality and enforceability of the remaining provisions
shall in not way be affected or impaired thereby.

24.   Waiver.

    No delays or omission by AMS or the Employee in exercising any right
hereunder shall operate as a waiver of that or any other right. A waiver or
consent given by AMS or the Employee or any one occasion shall be effective only
in that instance and shall not be construed as a bar or waiver of any right on
any other occasion.

25.   Governing Law.

    This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the Commonwealth of Virginia, without regard to its conflicts
of laws principles.

26.   Withholding.

    AMS may deduct from all benefits provided hereunder any taxes or other
withholdings reasonably determined to be required to be withheld by any
government or government agency. To the extent that AMS does not deduct the full
amount of taxes owed, the Employee is solely responsible for any additional
taxes.

27.   Counterparts.

    This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instruments.

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IN WITNESS WHEREOF, AMS and the Employee have executed this Agreement effective
as of October 1, 2003.

              JAMES C. REAGAN       AMERICAN MANAGEMENT             SYSTEMS,
INCORPORATED               /s/ James C. Reagan

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  By:   /s/ Garry Griffiths

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            Garry Griffiths               Date:   10/28/03   Date:   10/28/03  
 

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