Document:

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                                                                   EXHIBIT 10.11

                          DYNAMICS RESEARCH CORPORATION
                                60 Frontage Road
                          Andover, Massachusetts 01810
                                 (978) 475-9090

                               September 10, 1999

Mr. James P. Regan
930 Towlston Road
McLean, Virginia 22102

Dear Jim:

         This letter will confirm the agreement between you and Dynamics
Research Corporation (the "Company") concerning your employment:

         1. POSITION AND DUTIES.

                  a. Effective no later than October 1, 1999, you will be
employed by the Company, on a full-time basis, as its President and Chief
Executive Officer. In addition, during your employment, and without further
compensation, you will serve as a member of the Board of Directors of the
Company (the "Board") and will also serve as a director or officer of one or
more of the Affiliates, if so elected or appointed from time to time.

                  b. You agree to perform the duties of your position and such
other duties, consistent with your position, as may reasonably be assigned to
you from time to time. You also agree that, while employed by the Company, you
will devote your full business time and your best efforts, business judgment,
skill and knowledge exclusively to the advancement of the business and interests
of the Company and the Affiliates and to the discharge of your duties and
responsibilities to them.

         2. COMPENSATION AND BENEFITS. During your employment, as compensation
for all services performed by you for the Company and the Affiliates, and
subject to your performance of your duties and obligations to them, the Company
will provide you the following pay and benefits:
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                  a. BASE SALARY. The Company will pay you a base salary at the
rate of Three Hundred Thousand Dollars ($300,000) per year, payable in
accordance with the regular payroll practices of the Company for its executives
and subject to increase from time to time by the Board in its discretion.

                  b. BONUS COMPENSATION. Commencing in calendar year 2000, you
will be eligible to earn a bonus of up to seventy-five percent (75%) of your
base salary for each full calendar year during your employment with the Company,
based on the Company's achievement of objectives which you and the Board shall
mutually determine from time to time. This bonus shall be awarded, if at all,
instead of and not in addition to, any bonus that from time to time may be
available to executives of the Company generally.

                  c. STOCK OPTIONS. On the effective date of this agreement (as
set forth in Section 1.a above), the Company shall grant you an option to
purchase, at their fair market value on the effective date, 250,000 shares of
common stock of the Company. The option shall become exercisable at the rate of
twenty percent (20%) on the date of grant and on each of the first four
anniversaries thereof. Except as otherwise provided in this Section 2.c or in
Section 5.a and c, the option granted you hereunder shall be pursuant to the
terms of the Company's Equity Incentive Plan.

                  d. OTHER BENEFITS.

                  i. During your employment, except as otherwise provided in
         this agreement, you shall be entitled to participate in all employee
         benefit plans made available to executives of the Company generally,
         all as in effect from time to time, including term life insurance in an
         amount equal to your base salary. Your participation will be subject to
         the terms of the applicable plan documents and generally applicable
         Company policies.

                  ii. In addition to the foregoing, during your employment, the
         Company will pay or reimburse the premium cost of up to $600,000 of
         term life insurance coverage maintained by you.

                  iii. During your employment, the Company will provide an
         automobile for your business use and will pay or reimburse expenses of
         that automobile in accordance with Company policy, as in effect from
         time to time.

                  e. RELOCATION AND RELATED EXPENSES. To assist you in your
relocation to the Andover, Massachusetts area, the Company will (i) reimburse
your relocation expenses to the extent provided under the Company's current
relocation policy; and, to the extent not duplicative of reimbursement provided
you under the Company's relocation policy; (ii) compensate you for the
difference, if any, between the price you paid to

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purchase your current residence in McLean, Virginia and the selling price of
that residence, provided that you make reasonable efforts to obtain fair market
value for the residence; and (iii) reimburse your reasonable temporary living
expenses in the Andover, Massachusetts area and commuting expenses between
Massachusetts and Virginia for up to six months or, if less, until you and your
family have permanently relocated to the Andover, Massachusetts area.
Notwithstanding any contrary provision in the Company's relocation policy, you
will be permitted to select the real estate agents for the sale of your Virginia
residence and the purchase of a Massachusetts residence. For the purpose of this
Section 2.e, "living expenses" shall include reasonable costs for lodging,
meals, laundry, groceries, dry cleaning, and telephone calls, but will not
include expenses that normally would be incurred by you if you were not
relocating such as, but not limited to, mileage to and from work, car insurance
and car repairs.

                  f. MEMBERSHIP DUES. During your employment, the Company will
pay or reimburse your annual membership dues for the country club in the
Washington, D.C. area of which you are currently a member and up to twenty-five
thousand ($25,000) of your entrance fees as well as your annual membership dues
for a country club in Massachusetts, to the extent such dues or fees are not
duplicative of reimbursement provided you under the Company's expense
reimbursement policy.

                  g. PAID TIME AWAY. You will be entitled to five weeks of Paid
Time Away per year, to be used for vacation, sickness, unofficial holidays,
special leaves, etc. at such times and intervals as you shall determine, subject
to the reasonable business needs of the Company. In the event of termination of
this agreement for any reason, you shall be entitled to cash compensation for
Paid Time Away not used as of the date of termination, but only to the extent
such Paid Time Away has been accrued during the calendar year of termination.

                  h. BUSINESS EXPENSES. The Company will pay or reimburse you
for all reasonable business expenses incurred or paid by you in the performance
of your duties and responsibilities for the Company, subject to Company policies
as in effect from time to time, to any maximum annual limit and other
restrictions on such expenses set by the Board and to your providing such
reasonable substantiation and documentation as may be specified by the Company
from time to time.

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         3. CONFIDENTIAL INFORMATION AND RESTRICTED ACTIVITIES.

                  a. CONFIDENTIAL INFORMATION. During the course of your
employment with the Company, you will learn of Confidential Information, as
defined below, and you may develop Confidential Information on behalf of the
Company and the Affiliates. You agree that you will never use or disclose to any
Person (except as required by applicable law or for the proper performance of
your duties and responsibilities to the Company and the Affiliates) any
Confidential Information. You understand that this restriction shall continue to
apply after your employment terminates, regardless of the reason for such
termination.

                  b. PROTECTION OF DOCUMENTS. All documents, records and files,
in any media of whatever kind and description, relating to the business, present
or otherwise, of the Company and the Affiliates and any copies ("Documents"),
whether or not prepared by you, shall be the sole and exclusive property of the
Company and the Affiliates. You agree to safeguard all Documents and to
surrender to the Company, at the time your employment terminates or at such
earlier time or times as the Company may specify, all Documents then in your
possession or control.

                  c. NON-COMPETITION. You acknowledge and agree that the
following restrictions on your activities during and after your employment are
necessary to protect the goodwill, Confidential Information and other legitimate
interests of the Company and the Affiliates:

                  i. While you are employed by the Company and during the period
         of one year immediately following termination of your employment (the
         "Non-Competition Period"), you shall not, directly or indirectly,
         whether as owner, partner, investor, consultant, agent, employee,
         co-venturer or otherwise, compete with the Company or be associated
         with any competitor of the Company. The foregoing shall not prevent
         your passive ownership of three percent (3%) or less of the equity
         securities of any publicly-traded company.

                  ii. You agree that during the Non-Competition Period, you will
         not, directly or indirectly, (1) hire or solicit for hiring any
         employee of the Company or any of the Affiliates or any person who has
         been such an employee in the preceding three months or seek to persuade
         any employee of the Company or any of the Affiliates to discontinue
         employment, (2) solicit or encourage any customer of the Company or any
         of the Affiliates or independent contractor providing services to the
         Company or any of the Affiliates to terminate or diminish its
         relationship with them or (3) seek to persuade any customer or
         prospective customer of the Company or any of the Affiliates to conduct
         with anyone else any business or activity that such customer or
         prospective customer conducts or could conduct with the Company or any
         of the Affiliates.

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                  e. ASSIGNMENT OF INTELLECTUAL PROPERTY. You agree to promptly
and fully disclose to the Company all Intellectual Property, as defined below.
You hereby assign and agree to assign to the Company (or as otherwise directed
by the Company) your full right, title and interest to all Intellectual
Property. You further agree to execute any and all applications for domestic and
foreign patents, copyrights and other proprietary rights and do such other acts
(including, among others, the execution and delivery of instruments of further
assurance or confirmation) requested by the Company to assign the Intellectual
Property to the Company and to permit the Company to enforce any patents,
copyrights and other proprietary rights in the Intellectual Property. You agree
that you will not charge the Company for time spent in complying with these
obligations. All copyrightable works that you create shall be considered "work
made for hire."

                  f. You agree that, until the expiration of the Non-Competition
Period, you will provide the Company with such pertinent information concerning
your business activity as the Company may reasonably request in order to
determine your continued compliance with your obligations under this Section 3.
You agree to inform any new or prospective employer of this agreement and of
your obligations under this Section 3.

                  g. In signing this agreement, you give the Company assurance
that you have carefully read and considered all the terms and conditions of this
agreement, including the restraints imposed on you under this Section 3. You
agree without reservation that these restraints are necessary for the reasonable
and proper protection of the Company and the Affiliates; that each and every one
of the restraints is reasonable in respect to subject matter, length of time and
geographic area; and that these restraints will not prevent you from obtaining
other suitable employment during the Non-Competition Period. You further agree
that, were you to breach any of the covenants contained in this Section 3, the
damage to the Company and the Affiliates would be irreparable. You therefore
agree that the Company, in addition to any other remedies available to it, shall
be entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by you of any of those covenants, without having to post bond,
and that you will not take, and you will not permit anyone else to take on your
behalf, any position in a court or any other forum inconsistent with any of your
covenants and agreements herein. You and the Company further agree that, in the
event that any provision of this Section 3 is determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of
activities, that provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law. It is also agreed that each
of the Affiliates shall have the right to enforce all of your obligations to
that Affiliate under this agreement, including without limitation pursuant to
this Section 3.

         4. TERMINATION OF EMPLOYMENT. Your employment under this agreement
shall continue until terminated pursuant to this Section 4.

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                  a. BY THE COMPANY (i) The Company may terminate your
employment other than for Cause at any time upon six months' notice; provided,
however, that the Company may elect to pay you your base salary for some or all
of the six month period in lieu of notice. (ii) The Company may terminate your
employment for Cause upon notice to you setting forth in reasonable detail the
nature of the Cause. Only the following shall constitute Cause for termination:
(1) your willful failure to perform (other than by reason of disability), or
gross negligence in the performance of, your duties and responsibilities to the
Company or any of the Affiliates; (2) your material breach of any provision of
Section 3 of this agreement; or (3) other serious misconduct by you that is
reasonably anticipated to result in material injury to the business, interests
or reputation of the Company or any of the Affiliates; provided, however, that
to the extent that the acts or omissions giving rise to such termination are
capable of being cured by you, you will be afforded 30 days to correct such acts
or omissions specified in the termination notice provided by the Company.

                  b. BY YOU. You may terminate your employment, other than for
Good Reason or for Good Reason, upon six months' notice to the Company. If you
terminate for Good Reason, the notice must set forth in reasonable detail the
nature of such Good Reason. In the event of your termination of your employment
hereunder, the Company may elect to waive some or all of the notice period and,
in that event, shall continue to pay you your base salary and benefits for that
portion of the notice period waived. Only the following shall constitute Good
Reason for termination: (a) the Company's assignment of any duties to you that
are materially inconsistent with your positions, duties, responsibilities or
reporting requirements with the Company, (b) the Company's material reduction of
your responsibilities, authority or status with the Company, (c) the Company's
reduction of your compensation or any benefit provided by this Agreement or (d)
the Company's material breach of its obligations under this Agreement or any
other material agreement between the Company and you; provided, however, that to
the extent that the acts or omissions giving rise to such termination are
capable of being cured by the Company, the Company will be afforded 30 days to
correct such acts or omissions specified in the termination notice provided by
you.

                  c. BY REASON OF DISABILITY. In the event you become disabled
during employment through any illness, injury, accident or condition of either a
physical or psychological nature and, as a result, are unable to perform
substantially all of your duties hereunder, the Company will continue to pay you
your base salary, less the amount of any benefits provided you through a
Company-provided disability plan, and will continue to provide you benefits in
accordance with Section 2.d above for up to six months of disability during any
rolling period of three hundred and sixty-five (365) consecutive calendar days.
If you are unable to return to work after six months of disability, the Company
may terminate your employment, upon notice to you. If any question shall arise
as to whether you are disabled to the extent that you are unable to perform
substantially all of your duties

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hereunder, you shall, at the Company's request, submit to a medical examination
by a physician selected by the mutual agreement of you (or your guardian, if
any) and the Company to determine whether you are so disabled and such
determination shall for the purposes of this agreement be conclusive of the
issue. If such a question arises and you fail to submit to the requested medical
examination, the Company's determination of the issue shall be binding on you.

         5. SEVERANCE PAYMENTS AND OTHER MATTERS RELATED TO TERMINATION.

                  a. In the event of termination of your employment by the
Company other than for Cause in accordance with Section 4.a.i. or by you for
Good Reason in accordance with Section 4.b, and provided that no severance
benefits are payable to you under the change of control agreement between you
and the Company of even date (the "Change of Control Agreement"), the Company
will, notwithstanding that you may have become employed by another employer,
continue to pay you your base salary and continue to provide all of your group
health and life insurance benefits, including the benefit provided by Section
2.d.ii, for a period of twelve months (the "Severance Pay Period"). The Company
will also pay you on the date of termination any base salary and bonus
compensation earned but not paid through the date of termination (including a
pro-rated portion of any earned bonus for the year in which the termination
occurs) and pay for any Paid Time Away accrued but not used to that date. In
addition, all options granted you by the Company shall become exercisable on the
date of termination and shall remain exercisable for one year following the date
of termination.

                  b. Severance payments will be in the form of salary and
benefits continuation, payable in accordance with the normal payroll practices
of the Company and will begin on the Company's next regular payday following the
effective date of termination of your employment or, in the event that the
Company elects to provide you pay in lieu of notice for some or all of the
notice period, on the Company's next regular payday following the period for
which pay is provided in lieu of notice; provided, however, that coverage under
the Company's group health plan will terminate at such time as you and/or your
dependents become eligible for coverage under the health plan of another
employer. Your participation in all other employee benefit plans and programs
other than those specified in Section 5.a will cease as of the date of
termination of your employment, without regard to any continuation of base
salary or other payment to you following termination.

                  c. In the event of termination of your employment by you or by
the Company for Cause, the Company will pay you (i) any base salary earned but
not paid through the date of termination, (ii) bonus for any prior year that was
granted but not paid and bonus for the current year prorated through the date of
termination, and (iii) pay for

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any Paid Time Away accrued but not used to that date, but shall have no further
obligation to you. All unvested options granted you by the Company shall be
forfeited in the event of termination of your employment for Cause.

                  d. Provisions of this agreement shall survive any termination
if so provided in this agreement or if necessary or desirable to accomplish the
purpose of other surviving provisions, including without limitation your
obligations under Section 3 of this agreement. The obligation of the Company to
make payments to you in lieu of notice under Section 4.a or 4 b hereof or
severance payments under Section 5.a is expressly conditioned upon your
continued full performance of your obligations under Section 3 hereof.

         6. DEFINITIONS. For purposes of this agreement, the following
definitions apply:

         "Affiliates" means all persons and entities directly or indirectly
controlling, controlled by or under common control with the Company, where
control may be by management authority, equity interest or otherwise.

         "Confidential Information" means any and all information of the Company
and the Affiliates that is not generally known by others with whom any of them
competes or does business or with whom any of them plans to compete or do
business and any and all information, publicly known in whole or in part or not,
which, if disclosed by the Company or the Affiliates, would assist in
competition against them. Confidential Information includes, without limitation,
information relating to (i) the development, research, testing, marketing and
financial activities of the Company and the Affiliates, (ii) their products and
services, (iii) the costs, sources of supply, financial performance and
strategic plans of the Company and the Affiliates, (iv) the identity and special
needs of the customers and prospective customers of the Company and the
Affiliates and (v) the people and organizations with whom the Company and the
Affiliates have business relationships and those relationships. Confidential
Information also includes any information received by the Company or any of the
Affiliates from any Person with any understanding, express or implied, that it
will not be disclosed and any information designated by the Company or any of
the Affiliates as confidential.

         "Intellectual Property" means any invention, formula, process,
discovery, development, design, innovation or improvement (whether or not
patentable or registrable under copyright statutes) made, conceived, or first
actually reduced to practice by you solely or jointly with others, during your
employment by the Company; provided, however, that, as used in this agreement,
the term "Intellectual Property" shall not apply to any invention that you
develop on your own time, without using the equipment, supplies, facilities or
trade secret information of the Company or any of the Affiliates, unless such
invention relates at

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the time of conception or reduction to practice of the invention (i) to the
business of the Company, (ii) to the business of an Affiliate for whom you have
performed services, (iii) to the actual or demonstrably anticipated research or
development of the Company or any of the Affiliates, provided that, in the case
of an Affiliate, you have, or would reasonably be expected to have, knowledge of
such research or development as a result of your employment or (iv) results from
any work performed by you for the Company or any of the Affiliates.

         "Person" means an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization, other than
the Company or any of the Affiliates.

         7. CONFLICTING AGREEMENTS. You hereby represent and warrant that,
subject to your termination of your current employment, your signing of this
agreement and the performance of your obligations under it will not breach or be
in conflict with any other agreement to which you are a party or are bound and
that you are not now subject to any covenants against competition or similar
covenants or court order that would affect the performance of your obligations
under this agreement. You agree that you will not disclose to or use on behalf
of the Company any proprietary information of a third party without that party's
consent.

         8. WITHHOLDING. All payments made by the Company under this agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.

         9. ARBITRATION. Any controversy or claim arising out of or relating to
this agreement shall be referred to and finally resolved by arbitration in
Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The expenses
of arbitration shall be shared equally. This Section 9 shall not, however, limit
the right of the Company to obtain provisional remedies for violation of Section
3 pending the outcome of arbitration proceedings.

         10. ASSIGNMENT. Neither you nor the Company may make any assignment of
this agreement or any interest in it, by operation of law or otherwise, without
the prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this agreement without your consent in
the event that the Company shall hereafter affect a reorganization, consolidate
with, or merge into any Person or transfer all or substantially all of its
properties or assets to any Person. This agreement shall inure to the benefit of
and be binding upon you and the Company, and each of our respective successors,
executors, administrators, heirs and permitted assigns.

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         11. SEVERABILITY. If any portion or provision of this agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this agreement shall be valid and enforceable to the
fullest extent permitted by law.

         12. MISCELLANEOUS. This agreement sets forth the entire agreement
between you and the Company and replaces all prior and contemporaneous
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of your employment, excluding the Change of Control
Agreement, which shall remain in full force and effect in accordance with its
terms. This agreement may not be modified or amended, and no breach shall be
deemed to be waived, unless agreed to in writing by you and an expressly
authorized representative of the Company. The headings and captions in this
agreement are for convenience only and in no way define or describe the scope or
content of any provision of this agreement. This agreement may be executed in
two or more counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This is a Massachusetts
contract and shall be governed and construed in accordance with the laws of the
Commonwealth of Massachusetts, without regard to the conflict of laws principles
thereof.

         13. NOTICES. Any notices provided for in this agreement shall be in
writing and shall be effective when delivered in person or deposited in the
United States mail, postage prepaid, and addressed to you at your last known
address on the books of the Company or, in the case of the Company, to it at its
principal place of business, attention of Chairman of the Board, or to such
other address as either party may specify by notice to the other actually
received.

         If the foregoing is acceptable to you, please sign the enclosed copy of
this letter in the space provided and return it to me, at which time this letter
and that copy will take effect as a binding agreement between you and the
Company on the basis set forth above.

                                  Sincerely yours,

                                  By: /s/ John S. Anderegg, Jr.
                                      ______________________________

                                  Title: Chairman
                                         ___________________________

Accepted and Agreed:

/s/ James P. Regan
___________________________________

Date: 9/10/99
      _____________________________

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                                                                   EXHIBIT 10.12

                         DYNAMICS RESEARCH CORPORATION

                          CHANGE OF CONTROL AGREEMENT

     AGREEMENT, made this 3rd day of November, 1999 by and between James P.
Regan ("Executive") and Dynamics Research Corporation. (the "Company");

RECITALS:

     1.   The Board of Directors of the Company (the "Board") recognizes that
the possibility of a change in control may exist and that such possibility, and
the uncertainty and questions which it may raise among management personnel, may
result in the departure or distraction of management personnel to the detriment
of the Company and its stockholders;

     2.   The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including Executive, to their duties, to assisting the
Board in assessing proposals with respect to a change in control and to advising
the Board as to the best interests of the Company and its shareholders with
respect to such potential change in control, without distraction and conflict
arising from the possibility of a change in control;

     3.   The Board wishes to induce Executive to remain in the employ of the
Company and to assure him of fair severance should his employment terminate in
specified circumstances following a change of control of the Company.

     NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereto agree as follows:

     1.   If within 24 months following a Change of Control (as defined in
Exhibit A) (the "Post Change of Control Period") Executive's employment with the
Company is terminated (i) by the Company for any reason (other than for "Cause"
or "Disability" (as defined paragraph 4 below) or as a result of Executive's
death), or (ii) Executive terminates such employment for Good Reason (as defined
in paragraph 4 below):

          (1)  The Company will pay to Executive within five business days of
               such termination of employment a lump-sum cash payment in an
               amount equal to the sum of (i) Executive's annual base salary
               ("Base Salary") at the time of termination through the date of
               such termination of employment to the extent not theretofore
               paid, (ii) a prorated portion of Executive's target bonus
               compensation for the fiscal year in which such termination shall
               occur, calculated by multiplying (A) such bonus compensation
               times (B) a fraction, the numerator of which is the number of
               days in the fiscal year through the date of termination of
               employment, and the denominator of which is 365, (iii) if
               Executive has not been paid bonus

<PAGE>

               compensation with respect to the fiscal year prior to the year in
               which such termination occurs and during which Executive was
               employed by the Company (except where prior to the Change of
               Control the Board had determined that no such incentive
               compensation was to be paid to Executive with respect to such
               prior year), Executive's target bonus for such prior fiscal year
               prorated for the period of his employment by the Company if less
               than a full year and (iv) any accrued and unpaid vacation pay
               through the date of termination; and

          (2)  Any stock, stock option or other awards granted to Executive by
               the Company shall immediately vest and, if applicable, become
               exercisable in full, notwithstanding any provision to the
               contrary, and shall remain exercisable, if applicable, until the
               earlier of the fourth anniversary of such termination of
               employment or the latest date on which such grant could have been
               exercised, any restrictions on any restricted stock, deferred
               stock or other awards shall immediately terminate and all such
               awards shall immediately be vested in full, and any certificates
               for any deferred stock shall be delivered to Executive no later
               than five business days following such termination;

          (3)  The Company will pay to Executive within five business days of
               such termination of employment a lump-sum cash payment in an
               amount equal to two times the sum of (A) the amount of
               Executive's Base Salary at the rate in effect immediately prior
               to the date of termination or at the rate in effect immediately
               prior to the Change of Control, whichever is higher, and (B) the
               amount of Executive's target bonus compensation for the fiscal
               year during which the termination of employment occurs or the
               amount of Executive's target bonus compensation in effect
               immediately prior to the Change of Control, whichever is higher.

          (4)  Executive, together with his dependents, will continue following
               such termination of employment to participate fully in the life
               and medical insurance plans maintained or sponsored by the
               Company immediately prior to the Change of Control on the same
               basis they participated prior to the Change in Control until the
               earlier of (i) the second anniversary of such termination or any
               longer period as may be provided by the terms of such plan or
               (ii) the date Executive becomes re-employed with another employer
               and is eligible to receive substantially equivalent life and
               medical benefits under another employer provided plan, provided
               that if the continued participation of Executive and his
               dependents is not possible under the terms of any of such Company
               plans, the Company shall instead either arrange to provide
               Executive and his dependents with substantially equivalent
               benefits or pay to Executive (within five days of the date of
               termination) an amount equal to the full value thereof in cash;
               and

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          (5)  the Company will promptly reimburse Executive for any and all
               legal fees and expenses (including, without limitation,
               stenographer fees and printing costs) incurred by him as a result
               of such termination of employment, including without limitation
               all fees and expenses incurred to enforce the provisions of this
               Agreement or contest or dispute that the termination of his
               employment is for Cause or other than for Good Reason (regardless
               of the outcome thereof).

     Notwithstanding anything herein to the contrary, (i) to the extent that any
payment or benefit provided for herein is required to be paid or vested on any
earlier date under the terms of any plan, agreement or arrangement, such plan,
agreement or arrangement shall control; and (ii) if the Company terminates
Executive's employment for a reason other than Cause prior to the date upon
which the Change of Control occurs, and Executive reasonably demonstrates that
such termination of employment (x) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (y) otherwise
arose in connection with or in anticipation of a Change of Control, then for all
purposes of this Agreement, Executive shall be entitled to the benefits provides
in Section 1 above.

     To avert duplication of benefits, if Executive receives any payment of Base
Salary, incentive compensation or severance other than under this Agreement
("Other Termination Payments") upon the termination of his employment with the
Company, the amount of such payments shall be deducted from the amount paid
under this Agreement and the benefits to be provided hereunder shall be provided
only to the extent additional to the benefits to be provided other than under
this Agreement; provided, however, that neither this paragraph nor the
provisions of any other agreement shall be interpreted to reduce the amount
payable to Executive below the amount that would otherwise have been payable
under this Agreement if such Other Termination Payments had not been made.

     2.   Death, Disability, Cause, Other Than For Good Reason

          (1)  If Executive's employment shall terminate during the Post Change
               of Control Period by reason of Executive's death, this Agreement
               shall terminate without further obligations to Executive's legal
               representatives under this Agreement.

          (2)  If Executive's employment is terminated during the Post Change of
               Control Period by reason of Executive's Disability, in accordance
               with Section 4.c of the employment agreement between the Company
               and the Executive of even date, this Agreement shall terminate
               without further obligations to Executive.

          (3)  If Executive's employment shall be terminated for Cause (as
               defined in Section 4 below) during the Post Change of Control
               Period, this Agreement shall terminate without further
               obligations to Executive other

                                      -3-
<PAGE>

               than the obligation to pay Executive (A) his Base Salary through
               the date of termination and (B) Other Benefits, in each case to
               the extent theretofore unpaid.

          (4)  If Executive voluntarily terminates employment during the Post
               Change of Control Period, excluding a termination for Good
               Reason, this Agreement shall terminate without further
               obligations to Executive.

     3.   "Cause" means only: (a) commission of a felony or gross neglect of
duty by Executive rising to the level of deliberate dereliction, (b) conviction
of a crime involving moral turpitude, or (c) willful failure by Executive in the
performance of his duties to the Company which failure is deliberate on
Executive's part, results in material injury to the Company, and continues for
more than 30 days after written notice given to Executive pursuant to a two-
thirds vote of all of the members of the Board at a meeting called and held for
such purpose (after reasonable notice to Executive) and at which meeting
Executive and his counsel were given an opportunity to be heard, such vote to
set forth in reasonable detail the nature of the failure. For purposes of this
definition of Cause, no act or omission shall be considered to have been
"willful" unless it was not in good faith and Executive had knowledge at the
time that the act or omission was not in the best interest of the Company. Any
act or failure to act based on authority given pursuant to a resolution duly
adopted by the Board or based on the advice of counsel of the Company shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interest of the Company. Cause shall not include willful
failure due to incapacity resulting from physical or mental illness or any
actual or anticipated failure after Notice of Termination for Good Reason.

     4.   Executive shall be deemed to have voluntarily terminated his
employment for Good Reason if Executive leaves the employ of the Company for any
reason following:

          (1)  The assignment to Executive of any duties inconsistent in any
               respect with Executive's position (including status, offices,
               titles and reporting requirements), authority, duties or
               responsibilities immediately prior to the Change of Control; or
               the diminution or adverse alteration in any material adverse
               respect of such position, authority, duties or responsibilities,
               excluding for this purpose an isolated, insubstantial and
               inadvertent action not taken in bad faith and which is remedied
               by the Company promptly after receipt of notice thereof given by
               Executive;

          (2)  Any reduction in Executive's rate of Base Salary for any fiscal
               year to less than 100% of the rate of Base Salary payable for the
               fiscal year immediately preceding the Change of Control or of the
               Base Salary provided for such fiscal year in any agreement
               between Executive and the Company, or reduction in Executive's
               total cash and stock compensation

                                      -4-
<PAGE>

               opportunities, including Base Salary and incentives, for any
               fiscal year to less than 100% of the total cash and stock
               compensation opportunities made available to him immediately
               preceding the Change of Control for the then current fiscal year
               or of the total cash and stock compensation opportunities which
               were to be made available to him for the fiscal year pursuant to
               any agreement between Executive and the Company (for this
               purpose, such opportunities shall be deemed reduced if the
               objective standards by which Executive's incentive compensation
               measured becomes more stringent, the target or maximum amounts of
               such incentive compensation are reduced, or the amount of such
               incentive compensation is reduced on a discretionary basis from
               the amount that would be payable solely by reference to the
               objectives); or

          (3)  Failure of the Company to continue in effect any retirement,
               life, medical, dental, disability accidental death or travel
               insurance plan or other benefit plan or practice, in which
               Executive was participating immediately prior to the Change of
               Control unless the Company provides Executive with a plan or
               plans or practices that provide substantially similar benefits,
               or the taking of any action by the Company that would adversely
               affect Executive's participation in or materially reduce
               Executive's benefits under any of such plans or practices or
               deprive Executive of any material fringe benefit enjoyed by
               Executive immediately prior to the Change of Control other than
               an isolated, insubstantial and inadvertent failure not occurring
               in bad faith and which is remedied by the Company promptly after
               receipt of notice thereof given by Executive; or

          (4)  The Company requires Executive to be based at any office or
               location further than 40 miles from Andover, Massachusetts, or
               the Company requires Executive to travel on Company business to a
               substantially greater extent than required immediately prior to
               the date of the Change of Control; or

          (5)  Any failure by the Company to comply with and satisfy Section 6
               of this Agreement.

     Executive's right to terminate his employment pursuant to this section
shall not be affected by his incapacity due to physical or mental illness.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstances constituting Good Reason hereunder.

     5.   In the case of any dispute under this Agreement, Executive may
initiate binding arbitration in Boston, Massachusetts before the American
Arbitration Association by serving a

                                      -5-
<PAGE>

notice to arbitrate upon the Company or, at Executive's election, institute
judicial proceedings. The Company shall not have the right to initiate binding
arbitration, and agrees that upon the initiation of binding arbitration by
Executive pursuant to this paragraph 5 the Company shall cause to be dismissed
any judicial proceedings it has brought against Executive relating to this
Agreement. The Company authorizes Executive from time to time to retain counsel
of his choice to represent Executive in connection with any and all actions,
proceedings, and/or arbitration, whether by or against the Company or any
director, officer, shareholder, or other person affiliated with the Company,
which may affect Executive's rights under this Agreement. Company agrees to
(i) pay the fees and expenses of such counsel, (ii) to pay the cost of such
arbitration and/or judicial proceeding, and (iii) pay interest to Executive on
all amounts owed to Executive under this Agreement during any period of time
that such amounts are withheld pending arbitration and/or judicial proceedings.
Such interest shall be simple interest at the Prime Rate as published in the
"Money Rates" section of The Wall Street Journal on the effective date of
Executive's notice hereunder, but in no event higher than the maximum rate
permissible under applicable law; provided, however, that the interest rate will
be adjusted to the Prime Rate on each subsequent anniversary (or on the next
subsequent date for which such rate is published).

     In addition, notwithstanding any existing or prior attorney-client
relationship between the Company and counsel retained by Executive, the Company
irrevocably consents to Executive entering into an attorney-client relationship
with such counsel and agrees that a confidential relationship shall exist
between Executive and such counsel.

     6.   If the Company is at any time before or after a Change of Control
merged or consolidated into or with any other corporation or other entity
(whether or not the Company is the surviving entity), or if substantially all of
the assets thereof are transferred to another corporation or other entity, the
provisions of this Agreement will be binding upon and inure to the benefit of
the corporation or other entity resulting from such merger or consolidation or
the acquirer of such assets (the "Successor Entity"), and this paragraph 6 will
apply in the event of any subsequent merger or consolidation or transfer of
assets. The Company will require any such Successor Entity to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such transaction had taken
place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any Successor Entity which assumes and agrees to
perform this Agreement by operation of law or otherwise.

     In the event of any merger, consolidation, or sale of assets described
above, nothing contained in this Agreement will detract from or otherwise limit
Executive's right to or privilege of participation in any stock option or
purchase plan or any bonus, profit sharing, pension, group insurance,
hospitalization, or other incentive or benefit plan or arrangement which may be
or become applicable to executives of the corporation resulting from such merger
or consolidation or the corporation acquiring such assets of the Company.

                                      -6-
<PAGE>

     In the event of any merger, consolidation, or sale of assets described
above, references to the Company in this Agreement shall unless the context
suggests otherwise be deemed to include the entity resulting from such merger or
consolidation or the acquiror of such assets of the Company.

     7.   Any termination by the Company for Cause, or by Executive for Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with the last paragraph of Section 12 of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
that (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing Executive's
or the Company's rights hereunder.

     "Date of Termination" means (i) if Executive's employment is terminated by
the Company for Cause, or by Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if Executive's employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which the
Company notifies Executive of such termination and (iii) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the effective date of the
Disability, as the case may be.

     8.   All payments required to be made by the Company hereunder to Executive
or his dependents, beneficiaries, or estate will be subject to the withholding
of such amounts relating to tax and/or other payroll deductions as may be
required by law.

     In the event that it is determined that any payment or benefit provided by
the Company to or for the benefit of Executive, either under this Agreement or
otherwise, will be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any successor provision(s) ("Section 4999"), the
Company will, prior to the date on which any amount of the excise tax must be
paid or withheld, make an additional lump-sum payment (the "Gross-up Payment")
to Executive in an amount sufficient, after giving effect to all federal, state
and other taxes and charges (including interest and penalties, if any) with
respect to the gross-up payment, to make Executive whole for all taxes
(including withholding taxes) and any associated interest and penalties, imposed
under or as a result of Section 4999.

                                      -7-
<PAGE>

     Determinations under this Section 8 will be made by the accounting firm
employed by the Company unless Executive has reasonable objections to the use of
that firm, in which case the determinations will be made by a comparable firm
chosen by Executive after consultation with the Company (the firm making the
determinations to be referred to as the "Firm").  The determinations of the Firm
will be binding upon the Company and Executive except as the determinations are
established in resolution (including by settlement) of a controversy with the
Internal Revenue Service to have been incorrect.  All fees and expenses of the
Firm will be paid by the Company.

     If the Internal Revenue Service asserts a claim that, if successful, would
require the Company to make a Gross-up Payment or an additional Gross-up
Payment, the Company and Executive will cooperate fully in resolving the
controversy with the Internal Revenue Service.  The Company will make or advance
such Gross-up Payments as are necessary to prevent Executive from having to bear
the cost of payments made to the Internal Revenue Service in the course of, or
as a result of, the controversy.  The Firm will determine the amount of such
Gross-up Payments or advances and will determine after final resolution of the
controversy whether any advances must be returned by Executive to the Company.
The Company will bear all expenses of the controversy and will gross Executive
up for any additional taxes that may be imposed upon Executive as a result of
its payment of such expenses.

     9.   There shall be no requirement on the part of Executive to seek other
employment or otherwise mitigate damages in order to be entitled to the full
amount of any payments and benefits to which Executive is entitled under this
Agreement, and the amount of such payments and benefits shall not be reduced by
any compensation or benefits received by Executive from other employment other
than with respect to certain welfare benefits as provided in the first proviso
to Section 1(d).

     10.  Nothing contained in this Agreement shall be construed as a contract
of employment between Company and Executive, or as a right of Executive to
continue in the employ of Company, or as a limitation of the right of Company to
discharge Executive with or without Cause; provided that Executive shall have
the right to receive upon termination of his employment the payments and
benefits provided in this Agreement and shall not be deemed to have waived any
rights he may have either at law or in equity in respect of such discharge.

     11.  No amendment, change, or modification of this Agreement may be made
except in writing, signed by both parties.

     12.  This Agreement shall terminate on November 3, 2002, provided, however,
that commencing on November 3, 2000 and on each annual anniversary of such date
(each such date hereinafter referred to as a "Renewal Date"), unless previously
terminated, the term of this

                                      -8-
<PAGE>

Agreement shall be automatically extended so as to terminate three years from
such Renewal Date, unless at least sixty days prior to the Renewal Date the
Company shall give notice to Executive that the term of this Agreement shall not
be so extended. This Agreement shall not apply to a Change of Control which
takes place after the termination of this Agreement.

     The provisions of this Agreement shall be binding upon and shall inure to
the benefit of Executive, his executors, administrators, legal representatives
and assigns, and the Company and its successors.

     The validity, interpretation, and effect of this Agreement shall be
governed by the laws of The Commonwealth of Massachusetts, without regard to the
conflict of laws provisions thereof.  Any ambiguities in this Agreement shall be
construed in favor of Executive.

     The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

     The Company shall have no right of set-off or counterclaims, in respect of
any claim, debt, or obligation, against any payments to Executive, his
dependents, beneficiaries, or estate provided for in this Agreement.

     No right or interest to or in any payments shall be assignable by
Executive; provided, however, that this provision shall not preclude him from
designating one or more beneficiaries to receive any amount that may be payable
after his death and shall not preclude the legal representative of his estate
from assigning any right hereunder to the person or persons entitled thereto
under his will or, in the case of intestacy, to the person or persons entitled
thereto under the laws of intestacy applicable to his estate.  The term
"beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount, or if no beneficiary has
been so designated, the legal representative of Executive's estate.

     No right, benefit, or interest hereunder, shall be subject to anticipation,
alienation, sale, assignment, encumbrance, charge, pledge, hypothecation or set-
off in respect of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law.  Any attempt,
voluntary or involuntary, to effect any action specified in the immediately
preceding sentence shall, to the full extent permitted by law, be null, void,
and of no effect.

     All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

                                      -9-
<PAGE>

     If to Executive:    James P. Regan
     ---------------     930 Towlston Road
                         McLean, Virginia  22102

     If to the Company:  Dynamics Research Corporation
     -----------------   60 Frontage Road
                         Andover, MA 01810
                         Attention: Chairman of the Board

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     IN WITNESS WHEREOF, the Company and Executive have each caused this
Agreement to be duly executed and delivered as of the date set forth above.

                              DYNAMICS RESEARCH CORPORATION

                              By: /s/ James P. Regan
                                 ______________________________

                              ________________________________
                                James P. Regan

                                      -10-
<PAGE>

                                   EXHIBIT A

     Change of Control.  For the purposes of this Agreement, a "Change of
     -----------------
Control" shall mean:

          (a)  The acquisition by any person, corporation, partnership, limited
               liability company or other entity (a "Person", which term shall
               include a group within the meaning of section 13(d) of the
               Securities Exchange Act of 1934 (the "Exchange Act")) of ultimate
               beneficial ownership (within the meaning of Rule 13d-3
               promulgated under the Exchange Act), directly or indirectly of
               30% or more of either (i) the then outstanding shares of common
               stock of the Company (the "Outstanding Company Common Stock") or
               (ii) the combined voting power of the then outstanding voting
               securities of the Company entitled to vote generally in the
               election of directors (the "Outstanding Company Voting
               Securities"); provided, however, that for purposes of this
               subsection (a), the following acquisitions shall not constitute a
               Change of Control: (i) any such acquisition directly from the
               Company, except for acquisition of securities upon conversion of
               other securities of the Company (ii) any such acquisition by the
               Company, (iii) any such acquisition by any employee benefit plan
               (or related trust) sponsored or maintained by the Company or any
               corporation controlled by the Company or (iv) any such
               acquisition by any corporation pursuant to a transaction which
               complies with clauses (i), (ii) and (iii) of subsection (c) of
               this Exhibit A; or

          (b)  Individuals who, as of the date hereof, constitute the Board (the
               "Incumbent Board") cease for any reason to constitute at least a
               majority of the Board; provided, however, that any individual
               becoming a director subsequent to the date hereof whose election,
               or nomination for election, by the Company's shareholders, was
               approved by a vote of at least a majority of the directors then
               comprising the Incumbent Board shall be considered as though such
               individual were a member of the Incumbent Board, but excluding,
               for this purpose, any such individual whose initial assumption of
               office occurs as a result of an actual or threatened election
               contest with respect to the election or removal of directors or
               other actual or threatened solicitation of proxies or consents by
               or on behalf of a Person other than the Board; or

          (c)  Consummation of a reorganization, merger or consolidation or sale
               or other disposition of all or substantially all of the assets of
               the Company in one or a series of transactions (a "Business
               Combination"), in each case, unless, following such Business
               Combination, (i) all or substantially all of

                                      -11-
<PAGE>

               the individuals and entities who were the beneficial owners,
               respectively, of the Outstanding Company Common Stock and
               Outstanding Company Voting Securities immediately prior to such
               Business Combination beneficially own, directly or indirectly,
               immediately following such Business Combination more than 50% of,
               respectively, the outstanding shares of common stock and the
               combined voting power of the then outstanding voting securities
               entitled to vote generally in the election of directors, as the
               case may be, of the corporation resulting from such Business
               Combination (including, without limitation, a corporation which
               as a result of such transaction owns the Company or all or
               substantially all of the Company's assets either directly or
               through one or more subsidiaries) in substantially the same
               proportions as their ownership, immediately prior to such
               Business Combination of the Outstanding Company Common Stock and
               outstanding Company Voting Securities, as the case may be,
               (ii) no Person (excluding any corporation resulting from such
               Business Combination or any employee benefit plan (or related
               trust) of the Company or such corporation resulting from such
               Business Combination) ultimately beneficially owns, directly or
               indirectly, 30% or more of, respectively, the then outstanding
               shares of common stock of the corporation resulting from such
               Business Combination or the combined voting power of the then
               outstanding voting securities of such corporation except to the
               extent that such ownership existed prior to the Business
               Combination and (iii) at least a majority of the members of the
               board of directors of the corporation resulting from such
               Business Combination were members of the Incumbent Board at the
               time of the execution of the initial agreement, or of the action
               of the Board, providing for such Business Combination; or

          (d)  Approval by the shareholders of the Company of a complete
               liquidation or dissolution of the Company.

                                      -12-

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