Document:

ex10-19

 

EXHIBIT 10.19

EMPLOYMENT AGREEMENT WITH

ALFRED T. MOCKETT

     This EMPLOYMENT AGREEMENT (“the Agreement”) is made effective December 1,
2001, except as specifically provided herein, 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 Alfred T. Mockett, residing at 201 Falcon Ridge
Road, Great Falls, Virginia 22066 (“Mockett”).

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

     WHEREAS, the Board of Directors of AMS (“the Board”) has approved the
employment of Mockett 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 Mockett, and Mockett agrees to perform services for AMS as an
employee, commencing on December 1, 2001, upon the terms and conditions set
forth herein.

	1.	 	Term.
	 
	 	 	The initial term of this Agreement shall end on the third anniversary of
the date on which Mockett commences performing services for AMS under
this Agreement, 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
Mockett of its intention not to extend the Agreement on or before the
immediately preceding 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.
	 
	 	 	Mockett shall be employed as Chief Executive Officer of AMS and shall
have such duties, responsibilities, and authorities that are consistent
with his position as Chief Executive Officer. In addition, Mockett shall
serve as a director of the Company and Chairman of the Board of Directors
of AMS (the “Board”). Mockett shall also perform such services
consistent with his position as might be assigned to him from time to
time

 

 

	 	 	by the Board and are consistent with the bylaws of AMS. In performing
these services, Mockett shall report solely to the Board.
	 
	3.	 	Location.
	 
	 	 	Mockett’s place of employment shall be AMS’s offices described above, or
at such other location within a 25 mile radius of the location of the
offices described above as the Board shall reasonably direct, or at any
other location that may be mutually agreed upon in the future.
	 
	4.	 	Extent of Services.
	 
	 	 	Mockett shall devote substantially all of his business time, attention,
skill and effort to the performance of his duties under this Agreement
other than absences due to illness. Notwithstanding the foregoing,
Mockett may engage in charitable, professional and civic activities that
do not materially impair the performance of his duties to AMS. In
addition, Mockett may serve on the Board of Directors of other companies
unless the Chairman of the Audit Committee of the Board and the Chairman
of the Compensation Committee of the Board objects, it being agreed that
his current service on the boards listed on Schedule A attached hereto
will not violate this Agreement. Nothing contained in this Agreement
shall prevent Mockett 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
Mockett’s activities do not constitute a conflict of interest or violate
securities laws or materially impair the performance of his duties to
AMS. Mockett 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.
	 
	5.	 	Compensation and Benefits.

	 	 	a.	Base Salary.
	 
	 	 	 	Mockett’s annual base salary for fiscal year 2001 shall be $800,000
(“Base Salary”). The Base Salary shall be payable in accordance
with AMS’s standard payroll practices. Mockett’s annual Base
Salary shall be reviewed no less frequently than annually for
increases in the discretion of the AMS Compensation Committee,
taking into account the compensation level for chief executive
officers at companies comparable to AMS; provided, however, that at
no time during the term of this Agreement shall Mockett’s base
salary be decreased from the Base Salary then in effect without
Mockett’s prior written consent. If Mockett’s Base Salary is
increased during the term of this Agreement, then such increased
Base Salary shall be the Base Salary for all purposes under this
Agreement.

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	 		b.	Incentive Compensation.

			
	 	(i)	Mockett shall be entitled to a cash bonus for
fiscal year 2001 equal to 70% of his annual Base Salary for
2001 for the portion of the year remaining after he commences
performing services for AMS under this Agreement. In fiscal
year 2002 and later years, Mockett shall be eligible for an
annual bonus having a value of from 0% to 200% of his annual
Base Salary, depending on performance, with a target
percentage of 70% (“Target Annual Bonus”). Such annual
bonuses shall be paid at the usual times for the payment of
annual bonuses by AMS.
	 
	 	(ii)	Mockett shall be entitled to participate in a
long term incentive compensation plan for fiscal year 2001 and
subsequent years. Each year’s plan shall have a potential
value, depending on performance over the applicable
performance period, of approximately 150% of his target annual
cash compensation (i.e., his annual Base Salary plus his
Target Annual Bonus). For fiscal year 2001, the plan shall
consist of a nonqualified stock option with respect to 100,000
shares of common stock of AMS plus the opportunity to receive
up to $1,000,000 in cash. The option shall (1) be granted as
of December 1, 2001, or if later when Mockett first becomes an
employee of AMS, (2) be granted, to the extent possible, under
the American Management Systems, Incorporated 1996 Amended
Stock Option Plan F (“Plan F”), (3) be fully vested on the
date of grant, have a term of 10 years, and remain exercisable
for at least six months after Mockett’s termination of
employment, and (4) have an exercise price per share equal to
the fair market value of one share of AMS’s common stock on
the date of grant, determined consistent with the provisions
of Plan F. The $1,000,000 (the “Signing Bonus”) shall be paid
in installments as follows: $880,000 on December 31, 2001,
and the remaining $120,000 on December 31, 2002, whether or
not employed on those dates. In fiscal year 2002 and later
years, awards shall be made under a long term incentive
compensation plan, a draft of which is to be submitted to the
Compensation Committee within nine months of the date that
Mockett commences performing services for AMS under this
Agreement. Under the plan, which shall cover Mockett and
other senior executives of AMS, performance award cycles shall
commence annually and the amount of the awards shall be based
at least in part on the overall performance of AMS during the
applicable performance period.

	 		c.	Hiring Grants.

			
	 	(i)	As of December 1, 2001, or if later when Mockett
first becomes an employee of AMS, Mockett shall be granted the
right, in the form of deferred stock units, to receive 177,000
shares of common stock of AMS that are subject to vesting and
other restrictions. The stock grant shall be

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	 	 	made, to the extent possible, under the American Management
Systems Restricted Stock and Stock Bonus Plan, and, in any
event, the award of the stock shall have terms substantially
similar to the terms of Discretionary Awards (within the
meaning of that plan) made under that plan, but in no event
inconsistent with the terms of this Agreement. The deferred
stock units shall vest in 25% increments on the first,
second, third and fourth anniversaries of the date that
Mockett commences performing services for AMS under this
Agreement.

			
	 	(ii)	Mockett shall be granted a nonqualified stock
option for 417,000 shares of common stock of AMS. The option
shall (1) be granted as of December 1, 2001, or if later when
Mockett first becomes an employee of AMS, (2) be granted, to
the extent possible, under Plan F, and in any event shall have
terms substantially similar to the terms of nonqualified stock
options granted under Plan F, but in no event inconsistent
with the terms of this Agreement, (3) vest and become
exercisable in 25% increments on the third, fifth, seventh,
and eighth anniversaries of December 1, 2001 (or if later the
date that Mr. Mockett first becomes an employee of the
Corporation), and remain exercisable for at least six months
after Mockett’s termination of employment for any reason, and
(4) have an exercise price per share equal to $15.30. AMS
shall file the appropriate registration statement such that
the shares of common stock subject to the award shall be
freely transferable upon exercise.

	 	 	 	The deferred stock units and stock option granted pursuant to
paragraphs (i) and (ii) above shall vest upon the termination of
this Agreement as a result of AMS’s failure or refusal to extend
the term of the Agreement pursuant to Section 1 hereof.
	 
	 		d.	Other Benefits.

			
	 	(i)	Mockett shall be entitled to paid compensatory
leave, sick leave, and holiday pay in accordance with AMS’s
policies in effect from time to time, and to participate in
such life, health, and disability insurance, pension, deferred
compensation and incentive compensation plans, stock options
and awards, performance bonuses and other benefits as AMS
extends, as a matter of policy, to its executive employees,
and annual leave (vacation) that, together with any available
compensatory leave, totals at least four weeks per year and is
available at the beginning of the year (even if it is not yet
fully accrued at that time). At no time during the term of
this Agreement shall Mockett’s participation in, or benefits
received under, such plans or programs be reduced without the
written consent of Mockett except as part of a general
reduction that applies to substantially all employees who are
vice presidents and above. In addition to the foregoing,
subject to Mockett’s provision of evidence of insurability

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	 	 	reasonably acceptable to AMS, AMS shall purchase term life
insurance for his benefit with a death benefit equal to four
(4) times his Base Salary plus Target Annual Bonus, or the
maximum amount of such insurance that is reasonably
available, if less.

			
	 	(ii)	On the date that Mockett’s employment terminates
for any reason, regardless of his actual age he shall be
treated as satisfying the requirements under the AMS Retiree
Medical Program that he must be at least age 55 and that his
age plus years of AMS service must equal at least 65;
provided, however, that if the employee is precluded from
participating in said plan as described, for any reason, he
shall be provided with the after-tax economic equivalent of
the benefits he would have received under the Program. The
economic equivalent of the benefits he would have received
under the Program shall be the lowest cost that would be
incurred by Mockett in obtaining health insurance coverage for
himself and his eligible dependents that will provide benefits
comparable to the benefits offered under the AMS Retiree
Medical Program, as AMS shall modify the Program from time to
time, less any required contributions under the Program.
	 
	 	(iii)	During the employment period, AMS shall furnish
Mockett with office space, stenographic and secretarial
assistance, and such other facilities and services appropriate
to his position and no less favorable than provided to other
senior executive officers of AMS.

	 		e.	Reimbursement of Business Expenses.
	 
	 	 	 	AMS shall promptly reimburse Mockett for all reasonable travel,
entertainment and other expenses incurred or paid by Mockett in
connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon
presentation by Mockett of such supporting information and
documentation as AMS may reasonably request in accordance with
company policy.

	6.	 	Termination of Employment.

	 		a.	Termination Due to Death.
	 
	 	 	 	Mockett’s employment and this Agreement shall terminate immediately
upon his death. If Mockett’s employment is terminated due to his
death, his estate or his beneficiaries, as the case may be, shall
be entitled to:

			
	 	(i)	payment of any unpaid portion of his Base Salary
and vacation pay through the effective date of such
termination, a lump sum payment equal to any unpaid
installments of the Signing Bonus, and a pro-rated annual
bonus for the year in which Mockett’s termination of
employment occurs

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	 	 	in an amount at least equal to (A) the greater of his Target
Annual Bonus or the annual bonus paid in the last year prior
to his termination, multiplied by (B) a fraction, the
numerator of which is the number of days in the year through
the date of termination and the denominator of which is 365,
plus any accrued but unpaid portion of his annual bonus for
the previous year (together the “Annual Bonus Amounts”);

			
	 	(ii)	reimbursement for any outstanding reasonable
business expense he has incurred in performing his duties
under this Agreement;
	 
	 	(iii)	full vesting of any unexercised stock options
and any restricted stock, and the right to exercise the
options for at least 12 months after Mockett’s termination of
employment, and a pro-rata portion (based on days of
employment during the relevant performance period) of the
reasonably expected payout under each long term incentive
compensation plan for 2002 and later years in effect at the
time of such termination of employment (the “Pro-Rated
Long-Term Incentive Compensation Payment”);
	 
	 	(iv)	the right to elect continuation coverage of
insurance benefits to the extent required by law, and payment
of amounts equal (before reduction for taxes) to any premiums
for health insurance continuation coverage under any AMS
health plans that is elected by Mockett’s beneficiaries
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”), at a time or times mutually
agreed to by the parties, but for a period not to exceed 12
months; and
	 
	 	(v)	any pension survivor benefits that may become due
pursuant to any employee benefit plan or program of AMS; and
	 
	 	(vi)	payment of any accrued but unpaid benefits, and
any other rights, as required by the terms of any employee
benefit plan or program of AMS, this Agreement, or any other
agreement between AMS and Mockett.

	 		b.	Termination Due to Disability.
	 
	 	 	 	AMS may terminate Mockett’s employment at any time if Mockett
becomes disabled, upon written notice by AMS to Mockett. For this
purpose, Mockett shall be considered disabled if, as a result of
his incapacity due to physical or mental illness, he shall have
been unable regularly to perform substantially all of his duties
hereunder for an entire period of six consecutive months. If
Mockett’s employment is terminated due to his disability, he shall
be entitled to:

			
	 	(i)	payment of any unpaid portion of his Base Salary
and vacation pay through the effective date of such
termination, a lump sum payment equal

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	 	 	to any unpaid installments of the Signing Bonus, and the
Annual Bonus Amounts;

			
	 	(ii)	reimbursement for any outstanding reasonable
business expense he has incurred in performing his duties
under this Agreement;
	 
	 	(iii)	full vesting of any unexercised stock options
and any restricted stock, and the right to exercise the
options for at least 12 months after Mockett’s termination of
employment, and the Pro-Rated Long-Term Incentive Compensation
Payment;
	 
	 	(iv) 	the right to elect continuation coverage of
insurance benefits to the extent required by law, and payment
of amounts equal (before reduction for taxes) to any premiums
for health insurance continuation coverage under any AMS
health plans that is elected by Mockett or his beneficiaries
pursuant to Section 4980B of the Code, at a time or times
mutually agreed to by the parties, but for a period not to
exceed 12 months and only so long as Mockett is not eligible
for coverage under a health plan of another employer (whether
or not he elects to receive coverage under that plan); and
	 
	 	(v) 	payment of any accrued but unpaid benefits, and
any other rights, as required by the terms of any employee
benefit plan or program of AMS, this Agreement, or any other
agreement between AMS and Mockett.

	 	 	 	In addition, as soon as possible after the execution of this
Agreement, subject to Mockett’s provision of evidence of
insurability reasonably acceptable to AMS, AMS shall make available
to Mockett during the term of this Agreement disability insurance
that is supplemental to the disability insurance provided under its
existing group long term disability policy and under which benefits
are not payable unless Mockett is disabled as defined in the
existing policy, and that will be sufficient to ensure that the
benefits otherwise payable to Mockett under the terms of the
existing policy, together with benefits payable under the
supplemental policy and any compensation or benefits from other
sources that are taken into account in determining the amount of
benefits payable under the existing policy, are at least 60% of his
Base Salary plus Target Annual Bonus at the time he became
disabled, or the maximum amount of such insurance that is
reasonably available, if less, and continue for as long as he
remains disabled, up to age 65.
	 
	 		c.	Termination for Cause.
	 
	 	 	 	AMS may terminate Mockett’s employment at any time for Cause,
provided that it gives written notice of termination to Mockett as
set forth below. If Mockett’s employment is terminated for Cause,
as defined below, he shall be entitled to:

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	 	(i) 	payment of any unpaid portion of his Base Salary,
bonus and vacation pay through the effective date of such
termination, and a lump sum payment equal to any unpaid
installments of the Signing Bonus;
	 
	 	(ii) 	reimbursement for any outstanding reasonable
business expense he has incurred in performing his duties
under this Agreement;
	 
	 	(iii) 	the right to elect continuation coverage of
insurance benefits to the extent required by law; and
	 
	 	(iv) 	payment of any accrued but unpaid benefits, and
any other rights, as required by the terms of any employee
benefit plan or program of AMS, this Agreement, or any other
agreement between AMS and Mockett.

	 	 	 	For purposes of this Agreement, “Cause” shall mean: (1) the
conviction of Mockett of, or the entry of a plea of guilty or nolo
contendere by Mockett to, any felony; (2) fraud, misappropriation
or embezzlement by Mockett against AMS, Mockett’s willful failure,
gross negligence or gross misconduct in the performance of his
assigned duties for AMS, or Mockett’s breach of a fiduciary duty to
AMS, in each case which results or reasonably could be expected to
result in (and within 120 days after the termination does result
in) material and demonstrable harm to AMS; or (3) the breach by
Mockett of any material term of this Agreement. Cause shall be
deemed not to exist if the circumstances that otherwise would
constitute Cause are cured, if curable, within 30 days of the date
that the Board provides written notice to Mockett of such
circumstances.
	 
	 	 	 	If AMS exercises its right to terminate Mockett for Cause, AMS
shall: (1) give Mockett written notice of termination at least
twenty (20) days before the date of such termination specifying in
detail the conduct constituting such Cause; and (2) deliver to
Mockett a copy of a resolution duly adopted by 60% of the entire
membership of the Board, after reasonable notice to Mockett and an
opportunity for Mockett to be heard in person by members of the
Board (not less than 5 business days), finding that Mockett has
engaged in such conduct. This determination shall not prevent
Mockett from challenging in any arbitration or court of competent
jurisdiction the Board’s determination that Cause exists or that he
has failed to cure any act (or failure to act) that purportedly
formed the basis for the Board’s determination.
	 
	 		d.	Termination Without Cause or Constructive Termination Without
Cause.
	 
	 	 	 	AMS may terminate Mockett’s employment at any time without Cause,
provided that it gives written notice of termination at least 30
days before the date of such termination. If Mockett’s employment
is terminated without Cause, or if there is a constructive
termination without Cause, as defined below, Mockett shall be
entitled to receive from AMS the following:

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	 	(i) 	payment of any unpaid portion of his Base Salary
and vacation pay through the effective date of such
termination, a lump sum payment equal to any unpaid
installments of the Signing Bonus, and the Annual Bonus
Amounts;
	 
	 	(ii) 	reimbursement for any outstanding reasonable
business expense he has incurred in performing his duties
under this Agreement;
	 
	 	(iii) 	full vesting of any unexercised stock options
and any restricted stock, and the right to exercise the
options for at least six months after Mockett’s termination of
employment, and the Pro-Rated Long-Term Incentive Compensation
Payment;
	 
	 	(iv) 	payment of any accrued but unpaid benefits, and
any other rights, as required by the terms of any employee
benefit plan or program of AMS, this Agreement, or any other
agreement between AMS and Mockett;
	 
	 	(v) 	the right to elect continuation coverage of
insurance benefits to the extent required by law, and payment
of amounts equal (before reduction for taxes) to any premiums
for health insurance continuation coverage under any AMS
health plans that is elected by Mockett or his beneficiaries
pursuant to Section 4980B of the Code, at a time or times
mutually agreed to by the parties, but only so long as Mockett
is not eligible for coverage under a health plan of another
employer (whether or not he elects to receive coverage under
that plan); and
	 
	 	(vi) 	a severance benefit in an amount equal to 200% of
the sum of Mockett’s annual Base Salary in effect immediately
preceding such termination (without taking into account
impermissible reductions to his Base Salary) and the average
of the annual bonuses (annualized in the case of the annual
bonus for 2001) paid to Mockett in the three-year or shorter
period of employment immediately preceding such termination
(such average not to be less than his Target Annual Bonus
immediately preceding such termination), but only if (1)
Mockett executes a release substantially identical to the
release attached hereto, (2) the period for revoking such
release has expired, and (3) Mockett has materially complied
with the requirements of Sections 10 and 11 hereof through the
end of the period for revoking such release.

	 	 	 	AMS shall pay to Mockett 75% of the severance benefit in paragraph
(vii) within 30 days after the date that all of the applicable
conditions are satisfied. The other 25% of the severance benefit
shall be placed in an interest-bearing escrow account (or held
pursuant to a similar arrangement that provides for the crediting
of interest) for 12 months after such date. The amount credited to
the account shall be paid to him within 30 days after the end of
the period unless Mockett does not

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	 	 	 	comply in all material respects with the covenants in Sections 10
and 11 hereof throughout that period. If Mockett does not comply
in all material respects with the requirements of Sections 10 and
11 hereof throughout that period, the amount credited to the
account shall be paid to AMS. In addition, if it is finally
determined by a court or conceded in a settlement or other binding
agreement with the Internal Revenue Service that any such escrowed
amounts are taxable to Mockett, AMS shall pay Mockett an amount
equal to such taxes plus any additional amount necessary to make
Mockett whole after the imposition of taxes on both amounts. All
severance benefits paid to Mockett shall be paid subject to all
legally required payroll deductions and withholdings for sums owed
by Mockett to AMS.
	 
	 	 	 	For purposes of this Agreement, constructive termination without
Cause shall mean a termination of Mockett at his own initiative
following the occurrence, without Mockett’s prior written consent,
of one or more of the following events not on account of Cause:

			
	 	(1) 	(A) a diminution in the nature or scope of
Mockett’s authority or responsibilities (including, without
limitation, reporting responsibilities) or the duties that
Mockett performs, or (B) an adverse change in Mockett’s titles
or offices (including, without limitation, membership on the
Board) with AMS and/or his failure to be appointed or elected
(or re-elected) as Chief Executive Officer of AMS and Chairman
of the Board;
	 
	 	(2) 	a reduction in Mockett’s then current Base Salary
or Annual Target Bonus, or a reduction in the potential value
of his long-term incentive compensation plans described in
Section 5.b.(ii) hereof, or the termination or reduction in
aggregate value of the employee benefits and perquisites
enjoyed by him, other than benefits specifically provided in
this Agreement (in each case, other than in the case of his
Base Salary or Annual Target Bonus, except as part of a
general reduction that applies to substantially all
participants in the same plan or arrangement who are vice
presidents and above);
	 
	 	(3) 	the relocation of Mockett’s office or AMS’s
principal executive offices from its present location to a
location more than 25 miles from Fairfax, Virginia, without
his prior written consent;
	 
	 	(4) 	the failure of AMS to obtain an assumption in
writing of its obligation to perform this Agreement by any
successor to all or substantially all of the assets of AMS,
unless the successor agrees to enter into a substantially
similar agreement with Mockett effective as of the date of the
merger, consolidation, sale or similar transaction;

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	 	(5) 	any other breach of a material provision of this Agreement by
AMS; or
	 
	 	(6) 	termination for any reason during the period
beginning 366 days and ending 396 days following of a Change
of Control of AMS; provided that the term of this Agreement
may not expire before the 397th day following the Change of
Control.

	 	 	 	Mockett’s continued employment shall not constitute consent to, or
a waiver of rights with respect to, any event or condition
constituting constructive termination. Under no circumstances
shall the mere failure of AMS to extend (or notice of its intention
not to extend) the Agreement result in a constructive termination
without Cause. Mockett must give written notice of a constructive
termination without Cause to AMS at least 30 days before the
effective date of such termination, and give AMS the opportunity to
cure, if curable, the circumstances that otherwise would provide
grounds for constructive termination without Cause within such
30-day period.
	 
	 		e.	Voluntary Termination.
	 
	 	 	 	If Mockett voluntarily terminates his employment on his own
initiative for reasons other than his death, disability, or
constructive termination without Cause, he shall be entitled to:

			
	 	(i) 	payment of any unpaid portion of his Base Salary
and vacation pay through the effective date of such
termination, a lump sum payment equal to any unpaid
installments of the Signing Bonus, and the Annual Bonus
Amounts;
	 
	 	(ii) 	reimbursement for any outstanding reasonable
business expense he has incurred in performing his duties
under this Agreement;
	 
	 	(iii) 	the right to elect continuation coverage of
insurance benefits to the extent required by law; and
	 
	 	(iv) 	payment of any accrued but unpaid benefits, and
any other rights, as required by the terms of any employee
benefit plan or program of AMS, this Agreement, or any other
agreement between AMS and Mockett.

	 	 	 	A voluntary termination under this paragraph shall be effective
upon 30 days’ prior written notice to AMS unless the parties
mutually agree to extend the effective date.

	7.	 	Mitigation and Offset.
	 
	 	 	If Mockett’s employment is terminated during the term of this Agreement
pursuant to the provisions of Section 6.d hereof, Mockett shall be under
no duty or obligation to seek or

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	 	 	accept other 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. The obligation of AMS to make the payments
provided for in this Agreement shall not be affected by any circumstance
including, by way of example rather than limitation, any set-off,
counterclaim, recoupment, defense, or other right that AMS may assert, or
due to any other employment or source of income obtained by Mockett.
	 
	8.		Additional Change of Control Benefits.

	 		a.	Additional Benefits. In the event of a Change of Control of
AMS, in addition to any other benefits otherwise provided to
Mockett:

			
	 	(i) 	Mockett shall be entitled to full vesting of any
unexercised stock options and any restricted stock.

			
	 	(ii) 	The severance benefit payable pursuant to Section
6.d.(vi) hereof shall be paid within five days rather than 30
days after the date that all of the applicable conditions are
satisfied.

			
	 	(iii) 	If Mockett’s termination of employment occurs
during the two-year period beginning on the date of the Change
of Control, and a severance benefit is payable pursuant to
Section 6.d.(vi) hereof (other than on account of a
termination described in clause (6) of the definition of
constructive termination without Cause) the severance benefit
percentage in Section 6.d.(vi) shall be increased from 200% to
300%, and the 25% hold-back of severance benefits in Section
6.d (flush language) hereof shall not apply.

	 		b.	Definition of Change of Control. “Change of 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 30% 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

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	 	 	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 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 of Control shall be deemed to have occurred by
reason of any event involving a transaction in which Mockett or a
group of persons or entities with whom or with which Mockett 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.

	 		c.	Effect of Section 280G. The benefit provided under this
Section 8 or Section 6 hereof, if applicable, shall be provided
without regard to any limitations imposed by Section 280G or 4999 of
the Code.

			
	 	(v) 	In the event that Mockett becomes entitled to the
benefits (including the acceleration of certain benefits)
provided under this Section 8 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 Mockett an additional amount (the
“Gross-up Payment”) such that the net amount retained by
Mockett, 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 (1), but before deduction
for any federal, state or local income tax on the Benefits,
shall be equal to the “Total Benefits,” as defined below.

				
	 	(vi) 	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 Mockett in connection with
a change of control of AMS or Mockett’s termination of
employment (whether pursuant to the

Page 13 of Agreement

 

 

				
	 	 	 	terms of this Agreement or any other plan, arrangement
or agreement with AMS, any person whose actions result
in a change of 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 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 Mockett 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.
	 
	 	(vii) 	For purposes of determining the amount of the
Gross-up Payment, Mockett 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, Mockett 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 Mockett if such repayment
results in a

Page 14 of Agreement

 

 

			
	 	 	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.

	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 Mockett, his
spouse, dependents or beneficiaries may have pursuant to any other
employee benefits plans or programs.
	 
	10.	 	Confidentiality.
	 
	 	 	Mockett 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, Mockett shall return to AMS all copies of any material
involving such confidential information to AMS, and Mockett 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.
Mockett also shall return to AMS by that date any other items in his
possession, custody or control that are the property of AMS. Mockett
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 Sections 10 and 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 or in any dispute with the Company. No
breach of this Section shall be deemed to have occurred unless AMS
provides written notice to Mockett of the breach within 90 days after AMS
becomes aware of it and Mockett has failed to cure such breach, if
curable, within 30 days of such notice.
	 
	11.	 	Non-Solicitation.
	 
	 	 	Effective on the date that his employment with AMS terminates and for a
period of 12 months thereafter, Mockett shall not directly (a) employ or
solicit for employment, or assist in any way in solicitation for
employment, any person employed by AMS or any entities 30% or more owned
by AMS (“Subsidiaries”) then or at any time within the preceding 12
months; or (b) solicit, or assist in any way in the solicitation of
business

Page 15 of Agreement

 

 

	 	 	from any of AMS’s or its Subsidiaries’ clients or prospective clients,
either for Mockett’s own benefit or the benefit of anyone other than AMS,
unless the business being solicited is not competitive with the services
or products provided by AMS or its affiliates. Clause (b) shall not
apply unless the business being solicited is in a line of business in
which AMS was already engaged or already had under active consideration
while Mockett was employed by AMS or is a natural extension of such a
line business with a client that was an existing client of AMS during
that time. An entity shall not be considered a prospective client for
this purpose unless AMS has taken significant steps to specifically
identify the entity as a prospective client and/or obtain the entity as a
client, and there is a reasonable possibility that such entity will
become a client of AMS. The 12-month period for compliance with this
covenant shall be reduced to six months if AMS terminates Mockett’s
employment by failing or refusing to extend the term of the Agreement
pursuant to Section 1 hereof and does not pay him a severance benefit
calculated in the same way and subject to the same conditions as the
severance benefit in Section 6.d.(vi) hereof but substituting 100% for
200% therein.
	 
	12.	 	Representations.
	 
	 	 	Mockett represents and warrants to AMS that he is not now under any
obligation 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. AMS represents to Mockett that it is not prevented from
entering into, or performing this Agreement by the terms of any law,
order, rule or regulation, its by-laws or declaration of trust, or any
agreement to which it is a party, other than which would not have a
material adverse effect on AMS’s ability to enter into or perform this
Agreement.
	 
	13.	 	Arbitration.
	 
	 	 	Any dispute or controversy arising under or in connection with this
Agreement shall, if AMS or Mockett so elects, be settled by arbitration,
in accordance with the Employment Dispute Resolution 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 Mockett 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 Mockett’s covenants in Sections 10 and 11 hereof.

Page 16 of Agreement

 

 

	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 Mockett’s legal fees and expenses, including, by way of example
rather than limitation, reasonable attorneys’ fees incurred by Mockett in
seeking to obtain or enforce any right or benefit under this Agreement,
provided, however, that this obligation of AMS shall not apply unless
Mockett prevails in whole or in part. This obligation shall apply
irrespective of whether the dispute or controversy is resolved by
arbitration, litigation, or a settlement thereof. In addition, AMS shall
pay to Mockett interest at the prime lending rate as announced from time
to time by Citibank, N.A. on all or any part of any amount to be paid to
Mockett under this Agreement that is not paid when due. Promptly
following the commencement date of Mockett’s employment, AMS shall pay
directly to Mockett’s attorneys (and financial advisors, if applicable)
the reasonable legal fees and disbursements not in excess of $30,000
incurred in the preparation and negotiation of this Agreement and other
related documents.
	 
	15.	 	Indemnification.

	 		a.	AMS agrees that if Mockett is made a party, or, is threatened
to be made a party, to any action, suit or proceeding, including,
without limitation, any formal or informal investigation (whether
internal or external), whether civil, criminal, administrative, or
investigative (a “Proceeding”), by reason of the fact that he is or
was a director, officer or employee or 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 Mockett’s
alleged action in an official capacity while serving as a director,
officer, member, employee or agent, Mockett shall be indemnified and
held harmless by AMS to the fullest extent permitted under Delaware
law. To the extent consistent with the foregoing, this obligation
to indemnify Mockett 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 Mockett’s heirs, executors and administrators. AMS shall
advance to Mockett all reasonable costs and expenses incurred by him
in connection with a Proceeding within 20 days after receipt by AMS
of a written request for such advance. Such request shall include
an undertaking by Mockett to repay the amount of such advance if it
shall ultimately be determined that Mockett is not entitled to be
indemnified against such costs and expenses.

Page 17 of Agreement

 

 

	 		b.	Neither the failure of AMS (including its Board, independent
legal counsel or stockholders) to have made a determination before
such Proceeding concerning payment of amounts claimed by Mockett
under the subparagraph above that indemnification of Mockett is
proper because he has met the applicable standards of conduct, nor a
determination by AMS (including its Board, independent legal counsel
or stockholders) that Mockett has not met such applicable standards
of conduct, shall create a presumption that Mockett has not met the
applicable standards of conduct.

	16.	 	Assignability and Binding Nature.
	 
	 	 	This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (in the case of Mockett)
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. Notwithstanding any such assignment, AMS shall not be
relieved from liability under this Agreement. No rights or obligations
of Mockett under this Agreement may be assigned or transferred by Mockett
other than his right to receive compensation and benefits, provided such
assignment or transfer is otherwise permitted by law.
	 
	17.	 	Notices.
	 
	 	 	All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective: (1) upon personal delivery; (2)
upon deposit with the United States Postal Service, by registered or
certified mail, postage prepaid; or (3) 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: Chairman, Compensation Committee of the Board of Directors.

Page 18 of Agreement

 

 

	 	 	With a copy (which shall not constitute notice) to:
	 
	 	 	Shaw Pittman LLP
	 	 	2300 N Street, N.W.
	 	 	Washington, DC 20037
	 	 	Attention: Barbara M. Rossotti, Esq.
	 
	 	 	If to Mockett, to:
	 
	 	 	Alfred T. Mockett
	 	 	201 Falcon Ridge Road
	 	 	Great Falls, Virginia 22066
	 
	 	 	With a copy to:
	 
	 	 	Akin, Gump, Strauss, Hauer & Feld, L.L.P.
	 	 	1333 New Hampshire Avenue, N.W.
	 	 	Washington, DC 20036
	 	 	Attention: Bruce S. Mendelsohn, Esq.
	 
	 	 	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.
	 
	18.	 	Amendment.
	 
	 	 	This agreement may be amended or modified only by a written instrument
executed by both AMS and Mockett.
	 
	19.	 	Pronouns.
	 
	 	 	Whenever the context might require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and
the singular forms of nouns and pronouns shall include the plural, and
vice versa.
	 
	20.	 	Captions.
	 
	 	 	The captions appearing in this Agreement 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 in this Agreement to periods of days are to calendar days,
unless expressly provided otherwise. Where the time period specified in
this Agreement would end on a weekend or holiday, the time period shall
be deemed to end on the next business day.

Page 19 of Agreement

 

 

	22.	 	Entire Agreement.
	 
	 	 	Except for other agreements specifically referenced herein, this
Agreement constitutes the entire agreement between AMS and Mockett and
supersedes all prior agreements and understandings, whether written or
oral relating to the subject matter hereof.
	 
	23.	 	Severability.
	 
	 	 	In case any provision hereof shall be held by a court or arbitrator with
jurisdiction over AMS or Mockett to be invalid, illegal or otherwise
unenforceable, such provision shall be restated to reflect as nearly as
possible the original intentions of AMS and Mockett in accordance with
applicable law, and the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
	 
	24.	 	Waiver.
	 
	 	 	No delays or omission by AMS or Mockett in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by AMS or Mockett on 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 make any appropriate arrangements to deduct from all benefits
provided under this Agreement any taxes reasonably determined to be
required to be withheld by any government or government agency. Mockett
shall bear all taxes on benefits provided under this Agreement to the
extent that no taxes are withheld, irrespective of whether withholding is
required.

Page 20 of Agreement

 

 

	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.

* * * *

IN WITNESS WHEREOF, AMS and Mockett have executed this Agreement effective as
of December 1, 2001, except as specifically provided herein.

	 	 	 	 	 
	ALFRED T. MOCKETT	 	 	 	AMERICAN MANAGEMENT

SYSTEMS, INCORPORATED
	 
	/s/Alfred T. Mockett

	 	By:	 	/s/Daniel J. Altobello

	 
	
Date:  December 1, 2001

	 	
Date:
	 	December 1, 2001

Page 21 of Agreement

 

 

GENERAL RELEASE AND COVENANT NOT TO SUE

     In consideration of the receipt of specified benefits under my Employment
Agreement (the “Agreement”) with American Management Systems, Incorporated
(“AMS”), which Agreement hereby is incorporated by reference in this general
release and covenant not to sue (the “Release”), I, [employee], on behalf of
myself, and on behalf of my heirs, successors and assigns, hereby release
unconditionally AMS, all of its past, present and future subsidiaries,
affiliates, directors, officers, employees; and all of its and their respective
heirs, successors, and assigns from any and all claims, demands, actions, and
liabilities that I otherwise might have asserted arising out of my employment
or other association with AMS, including the termination of that employment or
association; and covenant not to sue AMS, any of its past, present and future
subsidiaries, affiliates, directors, officers, employees, agents, and
representatives; or any of its or their respective heirs, successors, and
assigns based, in whole or in part, on any claims relating to the employment
agreement I entered into with AMS effective December 1, 2001 (“Employment
Agreement”), and any claims arising under any and all federal, state or local
laws prohibiting discrimination in employment on the basis of age that relate
to my employment or other association with AMS or the termination of that
employment or association with AMS.

     The foregoing release and covenant do not apply to (1) any claims that
arise after the date on which I sign this Release, (2) my rights under this
Release, (3) any rights that I might have to benefits under the American
Management Systems, Inc. 401(k) Plan, the American Management Systems, Inc.
Simplified Employee Pension Plan, or any successor to either, (4) any rights
that I might have to benefits under any other employee benefit plan or
arrangement, to the extent those benefits are subject to sections 203 and 204
of the Employee Retirement Income Security Act of 1974, as amended, or (5) any
rights that I might have to benefits or other compensation under any other
employee benefit plan or arrangement, to the extent those benefits or
compensation were accrued and vested before my termination of employment under
the terms of the plan or arrangement as in effect at that time. Those rights,
and only those rights, survive unaffected by this Release.

     I understand that as a consequence of my signing this Release I am giving
up, with respect to my AMS employment and the termination of that employment,
any and all rights I otherwise might have under the Age Discrimination in
Employment Act of 1967, as amended and the Older Workers Benefit Protection Act
of 1990 and any and all other federal, state or municipal laws prohibiting
discrimination in employment on the basis of age.

     I acknowledge and agree that (1) the consideration described in the
Agreement constitutes consideration in addition to the regular severance and
other benefits I would be entitled to receive from AMS upon leaving its
employment, (2) I was and am hereby advised by AMS to consult with an attorney
before signing this Release, (3) I was given a period of at least 21 days
within which to consider whether to sign this Release, and (4) I was and am
hereby advised by AMS of my statutory right to revoke this Release within seven
(7) days of my signing this Release and advised that the Release will not
become effective or enforceable until the revocation period has expired.

 

 

     I warrant and represent that my decision to enter into this Release was
(1) entirely voluntary on my part; (2) not made in reliance on any inducement,
promise or representation, whether express or implied, other than the
inducements, representations and promises expressly set forth in the Agreement;
and (3) not influenced by any threats or other coercive activities to induce
acceptance of this Release.

     I further warrant and represent that I fully understand and appreciate the
consequences of my signing this Release.

* * * *

     IN WITNESS WHEREOF, I hereby acknowledge receipt of consideration and
execute the foregoing Release this                  day of                                ,
                                .

  

  

     [employee]

     Witnessed by                                                                                                           on this                           day

of                                          ,                      .

  

     WITNESS

Page 2 of Agreement

 

 

SCHEDULE A

	 	 	Advisory Board of the ETF Group
	 
	 	 	Board of Transplant Americaex10-20

 

EXHIBIT 10.20

AMENDMENT TO EMPLOYMENT AGREEMENT

WITH WILLIAM M. PURDY

     This AMENDMENT (“the Amendment”) is made effective December 1, 2001, by
and 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 William M. Purdy,
residing at 2804 North Harrison Street, Arlington, VA 22207 (the “Employee”).

     WHEREAS, the Employee is employed by AMS as an executive vice president
pursuant to an employment agreement dated February 5, 2001 (the “Employment
Agreement”);

     WHEREAS, the Board of Directors of AMS (the “Board”) appointed the
Employee to serve as the President and Interim Chief Executive Officer (“CEO”)
of AMS until such time as AMS appointed a new CEO;

     WHEREAS, on September 16, 2001, the Board approved the appointment of a
new CEO effective December 1, 2001;

     WHEREAS, the parties desire to amend the Employment Agreement in a manner
that is consistent with the resolutions adopted by the Board of Directors of
AMS on September 16, 2001, in connection with the appointment of a new CEO; and

     WHEREAS, Section 17 of the Employment Agreement provides that the
agreement may be amended or modified by a written instrument executed by both
AMS and the Employee;

     NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Amendment, the sufficiency of which the parties
acknowledge, it is agreed as follows:

     1.     Section 1 of the Employment Agreement shall be and hereby is revised
effective December 1, 2001, by extending the initial term of the Employment
Agreement through December 31, 2004.

     2.     The text of Section 2 of the Employment Agreement shall be and hereby
is revised effective December 1, 2001, to read as follows:

		
	 	The Employee shall be employed as President and Chief Operating Officer
of AMS, to hold office in each position until the Board designates
another person to hold such position. The Employee shall perform such
services consistent with each position as might be assigned to him from
time to time and are consistent with the bylaws of AMS.

 

 

		
	 	In performing these services, the Employee shall report to the CEO of AMS
and shall have such responsibilities and authority as are commensurate
with such positions and as may be prescribed by the CEO, the Board and
the by-laws of AMS.

		
	 	AMS and the Employee shall mutually agree on an acceptable executive role
for the Employee within 180 days after the Employer’s appointment of
Alfred T. Mockett as its new CEO. If AMS and the Employee fail to do so,
after attempting to do so in good faith, such failure shall be treated as
a constructive termination within the meaning of Section 6.d. hereof.

     3.     Subsection a of Section 5 of the Employment Agreement shall be and
hereby is revised effective January 1, 2002, by increasing the Employee’s base
salary to $600,000.

     4.     The text of subsection b of Section 5 of the Employment Agreement shall
be and hereby is revised effective December 1, 2001, to read as follows:

	 		(i)	In fiscal year 2002 and later years, the Employee
shall be eligible for an annual cash bonus having a value of
from 0% to 150% of his annual base salary for the relevant
year, depending on performance, with a target percentage of
60% (“Target Annual Bonus”). Such annual bonuses shall be
paid at the usual times for the payment of annual bonuses by
AMS. If the Employee’s employment terminates other than for
Cause (as defined in Section 5.c) or because of a voluntary
termination (as defined in Section 5.e) , his estate or his
beneficiaries, as the case may be, shall be entitled to a
pro-rated annual bonus for the year in which the termination
occurs in an amount at least equal to (A) the greater of his
Target Annual Bonus or the annual bonus paid in the last year
prior to his termination, multiplied by (B) a fraction, the
numerator of which is the number of days in the year through
the date of termination and the denominator of which is 365,
plus any accrued but unpaid portion of his annual bonus for
the previous year.
	 
	 	 	(ii)	The Employee shall be entitled to participate in
a long term incentive compensation plan for fiscal year 2002
and subsequent years. Each year’s plan shall have a potential
value, depending on performance over the applicable
performance period, of approximately 125% of his target annual
cash compensation (i.e., his annual base salary plus his
Target Annual Bonus). Awards shall be made under a long term
incentive compensation plan, a draft of which is to be
submitted to the Compensation Committee within nine months of
the date that the Employee commences performing services for
AMS under this Agreement. Under the plan, which shall cover
the Employee and other senior executives of AMS, performance
award cycles shall commence annually and the amount of the
awards shall be based at least in part on the overall
performance of AMS during the applicable performance period.

- 2 -

 

     5.     Paragraph (iv) of subsection d of Section 6 of the Employment Agreement
shall be and hereby is revised effective December 1, 2001, to read as follows:

	 	 	(iv)	full vesting of any unexercised stock options and
any restricted stock;

     6.     Paragraph (vii) of subsection d of Section 6 of the Employment
Agreement shall be and hereby is revised effective December 1, 2001, to read as
follows:

	 	 	(vii)	a severance benefit in an amount equal to 200%
of the Employee’s annual base salary in effect immediately
preceding such termination, but only if (1) the Employee
executes a release substantially identical 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 9 and 10 hereof.

     7.     Section 16 of the Employment Agreement shall be and hereby is revised
effective December 1, 2001, by adding the following sentence at the end
thereof: “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.”

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

	 	 	 
	Dated: December 1, 2001

	 	
/s/William M. Purdy

William M. Purdy
	 
	 
	 	 	
AMERICAN MANAGEMENT SYSTEMS,

INCORPORATED
	 
	Dated: December 1, 2001

	 	
/s/Alfred T. Mockett

Alfred T. Mocket

- 3 -

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