Document:

ex10-41

 

EXHIBIT 10.41

 

EMPLOYMENT AGREEMENT

between

TeleCommunication Systems, Inc.

and

Richard A. Young

(Employee Name)

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective as February 1, 2001 (the
“Effective Date”), between the individual signing as “Employee” at the end of
this Agreement (hereinafter referred to as “Employee”), and TeleCommunication
Systems, Inc. (hereinafter referred to as “Company”);

WHEREAS, Company desires to employ Employee, or to continue Employee’s
employment, and Employee desires to be employed by Company on the terms and
conditions hereinafter set forth;

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

		
	 	1. Employment. The Company agrees to employ Employee for the position of Executive Vice President & Chief
Operating Officer.  Employee shall perform such duties as the management of the Company may from time to time
assign to him hereunder, including (without limitation) responsibility for the day-to-day activities in the
Company including goal setting, performance monitoring, program management, personnel and fiscal management,
strategic planning and quality control of all functions.

		
	 	2. Duties and Responsibilities. Employee agrees to devote his or her full
time and attention and his or her best efforts to performing his or her duties
hereunder. While employed by the Company, Employee will not, without the
Company’s prior written consent, engage in any other business activity, other
than investment of Employee’s personal funds on a passive basis and without
lending assistance directly to any competitor. Attachment A hereto is a
complete list of Employee’s current other business activities to which the
Company consents. In the event the Employee wishes to change the approved
activities, then the Employee shall submit the requested change in writing to
the Company. Any changes consented to by the Company shall be documented as a
revised Attachment A and will become incorporated into the Agreement by
reference. In no event shall Employee pursue outside business or personal
interests that interfere with his or her full-time responsibilities or entail
any use of the Company’s resources.

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3.     Compensation and Benefits.

	 	 	 	 	 
		 	
3.1
	 	Base Salary. During Employee’s employment under this Agreement,
Company shall pay or cause to be paid to Employee a base salary at an
annual rate of not less than $240,636, payable in cash in equal
periodic installments not less frequent than the periodic installments
in effect for salaries of Company employees of the same level as
Employee (the “Base Salary”). The Base Salary shall be subject to
increases pursuant to reviews by the Board of Directors, where
applicable, or a committee appointed by the Board of Directors, at
such times as salary reviews are conducted generally for Company
employees of the same level as Employee, but in no event less frequent
than annually.
	 
	 	 	
3.2
	 	Incentive Compensation. During Employee’s employment under this
Agreement, Company shall cause Employee to be eligible to participate
in each bonus or incentive compensation plan, program or policy
maintained by Company from time to time, in whole or in part, for
employees of his level (“Bonus Plan”). Employee’s target and maximum
compensation under, and his performance goals and other terms of
participation in, each Bonus Plan shall be determined by Company or by
such person or administrative body as provided in the Bonus Plan. Said
incentive compensation is not guaranteed and is contingent upon
Employee and Company achieving deliverables or goals agreed upon. Said
incentive compensation shall not be considered “earned” by Employee
until Company has allocated payment to be made to Employee for any
performance period.
	 
	 	 	
3.3
	 	Incentive Stock Compensation. During Employee’s employment under
this Agreement, Company shall cause Employee to be eligible to
participate in an incentive stock plan as may be maintained by Company
from time to time, in whole or in part, for employees of his level.
Employee’s awards under such plan shall be determined by the
administrator of the plan, the vesting for which shall be accelerated
in the event of a Change in Control as defined herein. The specific
terms and conditions of these options shall be set out in a stock
option agreement between Employee and Company.
	 
	 	 	 	 	The grant of stock options shall not be construed to constitute or to
be evidence of a commitment or guarantee to renew this Agreement or to
employ or retain Employee for any period of time inconsistent with
Sections 4 and 5 of this Agreement.
	 
	 	 	
3.4
	 	Benefits. During his employment under this Agreement, Employee
shall be entitled to: (i) participation in such employee retirement and
welfare benefit plans, programs, policies and arrangements as
maintained by Company from time to time, in whole or in part, for
employees of his level, including but not limited to Company’s employee
stock ownership plan, and its health, disability, life insurance and
sickness and accident insurance plans; and

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	 	 	 	 	(ii) paid vacation,
holidays, leave of absence, leave for illness, funeral leave
        and temporary disability leave in accordance with the policies of
Company; and (iii) perquisites as from time to time provided by
Company to employees of his level.
	 
		 	
3.4
	 	Expenses. During Employee’s employment under this Agreement,
Company shall reimburse Employee for ordinary and reasonable
out-of-pocket expenses incurred by him in the performance of his duties
hereunder, provided that Employee shall account to Company for such
expenses in accordance with the employee business expense policies and
practices of Company.
	 
	 	 	
3.5
	 	Effect of Termination. Upon termination of employment for any
reason, Employee shall no longer be entitled to participation in any
Benefits programs, including the period when severance is payable under
the Agreement.

4.     Term of Employment. The term of Employee’s employment (the “Term”) shall
commence on the effective date of this Agreement and continue through January
31, 2002 for the initial term, unless sooner terminated as provided herein.
Upon expiration of the initial term, the term of Employee’s employment shall
automatically renew on February 1st for successive 12-month renewal periods,
unless and until terminated as provided herein.

5.     Termination of Employment.

	 	 	 	 	 
		 	
5.1
	 	Dismissal without Good Cause and Resignation for Good Reason.

	 	 	 	 	 	 	 
		 	
	 	5.1.1
	 	Dismissal without Good Cause. Company may terminate
Employee’s employment under this Agreement without Good Cause (as
defined in Section 5.1.4) at any time by giving notice thereof to
Employee at least 30 days before the effective date of such
termination. Upon such termination, Employee shall be entitled to
such compensation as provided in Section 5.1.3.
	 
	 	 	 	 	5.1.2
	 	Resignation for Good Reason. Employee may terminate his
employment under this Agreement for Good Reason (as defined in
Section 5.1.5) at any time by written notice thereof to Company at
least 30 days before the effective date of such termination. Such
notice shall specify in reasonable detail the Good Reason based
upon which Employee intends to terminate his employment. Upon such
termination, Employee shall be entitled to such compensation as
provided in Section 5.1.3.
	 
	 	 	 	 	5.1.3
	 	Severance Pay upon Dismissal without Good Cause or
Resignation for Good Reason. If Employee’s employment under this
Agreement is terminated by Company without Good Cause or by
Employee for Good Reason, Employee shall be entitled to the sum of
the following, payable

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	 	 	 	 	 	 	in equal periodic installments the same as
        Base Salary was received during the term of Employee’s employment as provided in Section
3.1 herein:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(i)
	 	Base Salary, at the rate in effect immediately
before the date of termination, for the greater of (A) the
period from the day after his last day of employment
hereunder through the last day of the Term of this Agreement,
or (B) six months; and
	 
	 	 	 	 	 	 	(ii)
	 	The amount “earned” by Employee under the
annual Bonus Plan if at the time of termination Company has
allocated payment to be made to Employee under the terms of
the Bonus Plan for any performance period. Employee will not
be eligible to receive payment under the Bonus Plan for any
performance period if he is terminated prior to a decision by
Company as to the payment due to Employee, if any, under the
terms of the Bonus Plan. If no such decision by Company is
made or necessary, Employee will not be eligible to receive
any payments under the Bonus Plan if he is not employed at
the time bonus payments are made to employees.

	 	 	 	 	 	 	 
		 	

	 	5.1.4
	 	Definition of “Good Cause.”  “Good Cause” means:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(A)
	 	Employee’s willful gross misconduct, willful
gross neglect, willful malfeasance or gross negligence in
carrying out his duties hereunder, or willful breach of this
Agreement (other than an inadvertent and nonrecurring breach
cured and corrected by Employee within 30 days after notice
thereof by Company). Under this provision, “willful breach”
shall include, but not be limited to, insubordination,
serious dereliction of fiduciary obligation, chronic abuse by
Employee of alcohol or narcotics, a violation of any material
Company rule, regulation or policy, or a serious violation of
any law governing the workplace. It is provided further
that, no act or failure to act shall be considered “willful”
if Employee reasonably believed in good faith that such act
or failure to act was in, or not opposed to, the best
interest of Company and its affiliates;
	 
	 	 	 	 	 	 	(B)
	 	Any act or conduct of dishonesty to Company by
Employee involving fraud and embezzlement; or
	 
	 	 	 	 	 	 	(C)
	 	Employee’s conviction, including a plea of
guilty or nolo contendere, of a felony involving theft or
moral turpitude, other than a felony predicated on Employee’s
vicarious liability (for purposes of this Agreement,
“vicarious liability” means Employee’s liability based on
acts of Company for which Employee is charged solely as a
result of his offices with Company and in which he was not
directly involved or did not have prior knowledge of such
acts)

	 	 	 	 	 	 	 
		 	

	 	5.1.5
	 	Definition of “Good Reason.” “Good Reason” means any of
the

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	 	 	 	 	 	 	following if not cured and corrected by Company within 30 days
after notice thereof by Employee to Company under Section 5.1.2:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(A)
	 	Any change in Employee’s title or position that
constitutes a material diminution in authority as compared to
the authority of his title or position as of the Effective
Date, or any substantial diminution in Employee’s duties and
responsibilities (other than a change due to Employee’s
Disability), provided that no diminution of title, position,
duties or responsibilities shall be deemed to occur solely
because Company becomes a subsidiary of another corporation
or because there has been a change in the reporting hierarchy
incident thereto involving Employee;
	 
	 	 	 	 	 	 	(B)
	 	Any requirement by Company that Employee
involuntarily physically relocate from Employee’s current
work location to another work location more than 75 miles
away; or
	 
	 	 	 	 	 	 	(C)
	 	Any material breach by Company of its
obligations under this Agreement.

	 	 	 	 	 
		 	
5.2
	 	Dismissal for Good Cause, Resignation without Good Reason and
Termination upon Death or Disability.

	 	 	 	 	 	 	 
		 	

	 	5.2.1
	 	Dismissal for Good Cause. Company may terminate
Employee’s employment under this Agreement for Good Cause by (i)
giving notice thereof to Employee specifying in reasonable detail
the Good Cause based upon which Company intends to terminate his
employment; (ii) if Good Cause exists under 5.1.4(A) only, after at
least 30 days after such notice, providing Employee an opportunity
to be heard at a meeting with the CEO and the Board of Directors;
and (iii) thereafter, effectuating such termination by a majority
vote of the Board of Directors. For Good Cause terminations under
Sections 5.1.4(B) & (C), Company may terminate Employee’s
employment immediately under this Agreement upon notice thereof to
Employee. The effect of such termination is provided in Section
5.2.4.
	 
	 	 	 	 	5.2.2
	 	Resignation without Good Reason. Employee may terminate
his employment hereunder at any time without Good Reason by notice
thereof to Company at least 30 days before the effective date of
such termination. The effect of such termination is provided in
Section 5.2.4.
	 
	 	 	 	 	5.2.3
	 	Termination upon Death or Disability. This Agreement
shall terminate automatically upon Employee’s death. If Company
determines in good faith that Employee has a Disability as defined
in this Section, Company may terminate his employment under this
Agreement by notifying Employee thereof at least 30 days before the
effective date of termination. For purposes of this Agreement,
“Disability” means any medically determinable physical or mental
impairment which can be

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	 	 	 	 	 	 	expected to result in death or which has
lasted or can be expected to
                last for a continuous period of not less than six months and which
renders Employee unable to perform his material duties under this
Agreement. If there is any dispute between the parties as to
Employee’s Disability, Company shall select or approve a physician
whose determination as to Employee’s Disability shall bind the
parties hereto. The effect of a termination due to Employee’s
death or Disability is provided in Section 5.2.4.
	 
	 	 	 	 	5.2.4
	 	Effect of Dismissal for Good Cause, Resignation without
Good Reason, or Termination upon Death or Disability. If
Employee’s employment under this Agreement is terminated by Company
for Good Cause, by Employee without Good Reason, or due to
Employee’s death or Disability as provided in this Agreement, all
obligations of Company under this Agreement shall terminate, except
as provided in Section 5.6.

	 	 	 	 	 
		 	
5.3
	 	Termination by Mutual Consent. Company and Employee may terminate
Employee’s employment under this Agreement at any time and for any
reason upon the mutual consent of both parties, effective as of such
date as agreed upon by the parties. Upon such termination, except as
provided in Section 5.6 or as agreed to by the parties in connection
with their mutual consent to terminate Employee’s employment, all
obligations of Company hereunder shall terminate.
	 
	 	 	
5.4
	 	Termination after a Change in Control.

	 	 	 	 	 	 	 
		 	

	 	5.4.1
	 	Termination Events Triggering Compensation. Company shall
pay or cause to be paid to Employee such compensation as provided
in Section 5.4.2, if his employment under this Agreement is
terminated by Company without Good Cause or by Employee for Good
Reason within 12 months after a Change in Control (as defined in
Section 5.4.3)
	 
	 	 	 	 	5.4.2
	 	Compensation upon Termination. If Employee’s employment
hereunder is terminated as provided in Section 5.4.1, Company shall
pay or cause to be paid to Employee the following in a cash lump
sum within 30 days after the date of termination, one times the
annual Base Salary at the greater of (A) the rate in effect
immediately before the date of termination or (B) the rate in
effect immediately before the Change in Control.
	 
	 	 	 	 	5.4.3
	 	Definition of “Change in Control.” A “Change in Control”
means:

	 	 	 	 	 	 	 	 	 
		 	 	 	

	 	(i)
	 	A sale of all or substantially all of the
assets of Company;
	 
	 	 	 	 	 	 	(ii)	 	An acquisition by any “person” or “group” of
persons (within the meaning of such terms as used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), other than Company, its
subsidiaries, any employee benefit

Page 6 of 16

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	plan of Company, or an
underwriter temporarily holding securities pursuant to an offering of such securities) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the total voting power
represented by Company’s outstanding voting securities;
	 
	 	 	 	 	 	 	(iii)	 	A dissolution or liquidation of Company; or
	 
	 	 	 	 	 	 	(iv)	 	Any merger, consolidation or reorganization
involving Company immediately after which either (A) a
majority of the directors of the surviving entity is not
comprised of persons who were directors of Company
immediately prior to such transaction or (B) persons who hold
more than a majority of the total voting power represented by
outstanding voting securities of the surviving entity are not
persons who held outstanding voting securities of Company
immediately prior to such transaction.

	 	 	 	 	 
		 	
5.5
	 	Duplication of Severance Pay. Employee is entitled to receive the
payment under both Section 5.1 and Section 5.4. Employee hereby
irrevocably waives the right to receive benefits under any severance or
similar plan or policy of Company if Employee is entitled to receive a
payment under Section 5.1 and/or 5.4, provided that if the value of
such benefits exceeds the amount payable to such Employee under Section
5.1 and/or 5.4, Employee may elect to receive such benefits in lieu of
the payment under Section 5.1 and/or 5.4.
	 
	 	 	
5.6
	 	Payment of Base Salary upon Termination. Upon a termination of
Employee’s employment under this Agreement for any reason, Company
shall pay or cause to be paid to Employee the increment of Base Salary
earned but unpaid in the payroll period immediately preceding the date
of termination, payable in cash on or before the day on which Employee
would have been paid such amount if his employment hereunder had not
been terminated, but in no event later than the date as required by
law.
	 
	 	 	
5.7
	 	No Duty to Mitigate. Employee shall not be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to Employee under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not Employee obtains other
employment.

6.     Ownership of Work Product.

	 	 	 	 	 
		 	
6.1
	 	The Company shall own all Work Product (as defined below). To the
extent permitted by law, All Work Product shall be considered work made
for hire by Employee and owned by the Company.
	 
	 	 	
6.2
	 	If any of the Work Product may not, by operation of law, be
considered work made for hire by Employee for the Company (or if
ownership of all right, title

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	 	 	 	 	and interest of the intellectual property
rights therein shall not otherwise vest exclusively in the Company), Employee agrees to assign, and upon
creation thereof automatically assigns, without further consideration,
the ownership of all Trade Secrets (as defined below), U.S. and
international copyrights, patentable inventions, and other intellectual
property rights therein to the Company, its successors and assigns.
	 
	 	 	
6.3
	 	The Company, it successors and assigns, shall have the right to
obtain and hold in its or their own name copyrights, registrations, and
any other protection available in the foregoing.
	 
	 	 	
6.4
	 	Employee agrees to perform upon the reasonable request of the
Company, during or after Employee’s employment, such further acts as
may be necessary or desirable to transfer, perfect and defend the
Company’s ownership of the Work Product. When requested, Employee will

	 	 	 	 	 	 	 
		 	

	 	(i)
	 	Execute, acknowledge and deliver any requested affidavits
and documents of assignment and conveyance;
	 
	 	 	 	 	(ii)
	 	Obtain and aid in the enforcement of copyrights (and, if
applicable, patents) with respect to the Work Product in any
countries;
	 
	 	 	 	 	(iii)
	 	Provide testimony in connection with any proceeding
affecting the right, title or interest of the Company in any Work
Product; and
	 
	 	 	 	 	(iv)
	 	Perform any other acts deemed necessary or desirable to
carry out the purposes of this Agreement.

	 	 	 	 	 
	 	 	 	 	The Company shall reimburse all reasonable out-of-pocket expenses
incurred by Employee at the Company’s request in connection with the
foregoing, including (unless Employee is otherwise being compensated at
the time) a reasonable per diem or hourly fee for services rendered
following termination of Employee’s employment.
	 
		 	
6.5
	 	For purposes hereof, “Work Product” shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international
copyrights, patentable inventions, discoveries and improvements, and
other intellectual property rights, in any programming, documentation,
technology or other work product that relates to the business and
interests of the Company and that Employee conceives, develops, or
delivers to the Company at any time during the term of Employee’s
employment. “Work Product” shall also include all intellectual
property rights in any programming, documentation, technology or other
work 

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	 	 	 	 	product that is now contained in any of the products or systems
(including development and support systems) of the Company to the extent Employee
conceived, developed or delivered such Work Product to the Company prior
to the date of this Agreement while Employee was engaged as an
independent contractor or employee of the Company. Employee hereby
irrevocably relinquishes for the benefit of the Company and its assigns
any moral rights in the Work Product recognized by applicable law.

7.     Restrictive Covenants.

	 	 	 	 	 
		 	
7.1
	 	Competition. During the Term of this Agreement and, if
Employee’s employment under this Agreement is terminated by Company
or by Employee for any reason, the greater of (I) any period of time
in which Employee continues to receive compensation of any kind from
Company and continuing for a period of six (6) months after said
payment(s) cease, or (ii) one year after the Term of this Agreement,
employee shall not: (i) own, manage, operate, join, control or
participate in the ownership, management, operation or control of a
Competitor (as defined in Section 7.5); (ii) become a director,
officer, employee, consultant or lender of, or be compensated by, a
Competitor; or (iii) solicit any client of Company on behalf of or
for the benefit of a Competitor. Notwithstanding the foregoing,
Employee may own up to 1% of a publicly-traded Competitor.
	 
	 	 	
7.2
	 	Confidential Information. Employee shall at all times hold
in a fiduciary capacity for the benefit of Company all secret,
confidential or proprietary information, knowledge or data relating
to Company, and all of its businesses, which shall have been
obtained by Employee during his employment by Company and which
shall not be or become public knowledge (other than by acts by
Employee or his representatives in violation of this Agreement)
including, but not limited to, information regarding clients and
agents of Company (“Confidential Information”). During Employee’s
employment with Company under this Agreement and after the
termination of such employment, Employee shall not, without the
prior written consent of Company, communicate or divulge any
Confidential Information to any Person other than Company and those
designated by it or use any Confidential Information except for the
benefit of Company, provided that Employee may make disclosures to
comply with the law or legal process. Immediately upon termination
of Employee’s employment with Company at any time and for any
reason, Employee shall return to Company all Confidential
Information, including, but not limited to, any and all copies,
reproductions, notes or extracts of Confidential Information.
	 
	 	 	
7.3
	 	Solicitation of Employees. During the Term of this Agreement
and, if Employee’s employment under this Agreement is terminated by
Company or by Employee for any reason, for the greater of (I) any
period of time in 

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	 	 	 	 	which Employee continues to receive compensation
of any kind from Company and continuing for a period of six (6) months after said
payment(s) cease, or (ii) one year after the Term of this
Agreement, Employee shall not: (i) solicit, participate in or
promote the solicitation of any person who was employed by Company
at any time during the three-month period prior to Employee’s
termination of employment under this Agreement to leave the employ
of Company; or (ii) on behalf of himself or any other Person, hire,
employ or engage any such person. Employee further agrees that,
during such time, if an employee of Company contacts Employee about
prospective employment, Employee will inform such employee that he
cannot discuss the matter further without informing Company.
	 
	 	 	
7.4
	 	Remedies for Breach. Employee agrees that damages in the
event of any breach of Sections 7.1 through 7.3 by Employee would be
difficult to ascertain. Employee therefore agrees that,
notwithstanding anything in this Agreement to the contrary,
including but not limited to the provisions of Section 14, Company,
in addition to and without limiting any other remedy or right it may
have, shall have the right to an injunction or other equitable
relief in any court of competent jurisdiction, enjoining any such
breach. Employee hereby waives any and all defenses he may have on
the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. Employee also
agrees that a bond shall not be required by Employer in obtaining an
injunction. The existence of this right shall not preclude any
other rights and remedies at law or in equity that Company may have.
The provisions of Section 7 shall survive termination of this
Agreement. The existence of a claim or cause of action of any kind
by Employee against Company shall not constitute a defense to the
enforcement by Company of the rights provided in this Section 7 and
shall not be a defense to any injunction proceeding.
	 
	 	 	
7.5
	 	Definitions.

	 	 	 	 	 	 	 
		 	

	 	7.5.1
	 	“Competitor.” For purposes of Section 7, “Competitor” means any Person which sells goods or provides
services which are directly competitive with those sold or
provided by a business that (i) is being conducted by Company
at the relevant time and (ii) was being conducted by Company
at any time during the Term of this Agreement.
	 
	 	 	 	 	7.5.2
	 	“Company.” For purposes of Section 7, “Company”
means TeleCommunication Systems, Inc., and its subsidiaries
and affiliates.
	 
	 	 	 	 	7.5.3
	 	“Person.” For purposes of Section 7, “Person”
means any individual or entity, including but not limited to
any corporation, trust, sole proprietorship, joint venture or
partnership.

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7.6
	 	Survival of Section 7. Employee agrees that the
non-competition agreements, nondisclosure agreements and
non-employment agreements in this Section 7 each constitute separate
agreements independently supported by good and adequate
consideration and, notwithstanding anything in this Agreement to the
contrary, shall be severable from the other provisions of, and shall
survive, this Agreement.

	 	 	 
	8.	 	
Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if
sent by registered or certified mail to Employee at the last address he
has filed in writing with Company or, in the case of Company, to Company’s
principal employee offices.

9.     Taxes.

	 	 	 	 	 
		 	
9.1
	 	Withholding Taxes. Company shall have the right, to the
extent permitted by law, to withhold from any payment of any kind
due to Employee under this Agreement to satisfy the tax withholding
obligations of Company under applicable law.
	 
	 	 	
9.2
	 	Adjustment relating to Tax on Excess Parachute Payments.

	 	 	 	 	 
		 	

	 	9.2.1. Adjustment. Notwithstanding anything in this Agreement to
the contrary, in the event the Company’s Law or Accounting Firm (as
defined in Section 9.2.2) determines that any portion of the cash
compensation payable under this Agreement (such portion of
compensation, the “Agreement Payment”), and the portions, if any,
of other payments or distributions in the nature of compensation by
Company to or for the benefit of Employee (including, but not
limited to, the value of the acceleration in vesting or
exercisability of stock options) whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement (the Agreement Payment, together with such portions of
other payments and distributions, the “Payments”), would cause any
portion of the Payments to be subject to the excise tax imposed by
section 4999, or any successor provision, of the Internal Revenue
Code of 1986, as amended (the “Code”) (the portion subject to
excise tax, the “Parachute Payment”), the Agreement Payment shall
be reduced to an amount not less than zero which shall not cause
any portion of the Payments to constitute a Parachute Payment,
provided that no such reduction shall be made if the Payments,
after the reduction and after the application of Federal income tax
at the highest rate applicable to individual taxpayers, would not
be greater than the present value (determined in accordance with
section 280G, or any successor provision, of the Code) of the
Payments before the reduction but after the application of (i)
excise tax under section 4999 of the Code and (ii) Federal income
tax at the highest rate applicable to individual taxpayers.
	 
	 	 	 	 	9.2.2 Determination. All determinations required to be made under
this Section 9.2, including the assumptions to be utilized in
arriving at such

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	 	 	 	 	determination, shall be made by such nationally recognized law firm
(including Piper Marbury Rudnick & Wolfe L.L.P.) or accounting firm
(including Ernst & Young LP) as selected by Company (the “Law or
Accounting Firm”), which shall provide detailed supporting
calculations to both Company and Employee (i) within 15 business
days after receipt by Company of a notice from Employee that he may
have a Parachute Payment, or (ii) at such earlier time as may be
requested by Company. The Law or Accounting Firm may employ and
rely upon the opinions of actuarial or accounting professionals to
the extent it deems necessary or advisable. In the event that the
Law or Accounting Firm determines, for any reason, that it is
unable to perform such services, or declines to do so, Company
shall select another nationally recognized law or accounting firm
to make the determinations required under this Section (which law
or accounting firm shall then be referred to as the Law or
Accounting Firm hereunder). All fees and expenses of the Law or
Accounting Firm shall be borne solely by Company. Any
determination by the Law or Accounting Firm shall be binding upon
Company and Employee.

	 	 	 
	10.	 	
Successors and Assigns. The rights, duties and obligations of a party
hereunder may not be assigned, delegated or assumed without the prior
written consent of the other party, provided that Company may assign this
Agreement to any subsidiary thereof, without Employee’s consent, and such
assignment shall not constitute, a termination of his employment
hereunder. Nothing herein shall cause a termination of this Agreement
upon the acquisition, reorganization, or merger of Company. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors or permitted assigns.
Nothing herein shall be construed to confer upon any person not a party
hereto any right, remedy or claim under or by reason of this Agreement.
	 
	11.	 	
Entire Agreement. This Agreement constitutes the entire understanding of
Employee and Company with respect to the subject matter hereof and
supersedes and voids any and all prior agreements or understandings,
written or oral, regarding the subject matter hereof.
	 
	12.	 	
Amendment and Waiver. This Agreement may not be changed, modified or
discharged orally, but only by an instrument in writing signed by the
parties. No waiver of any term or condition of this Agreement shall be
effective unless agreed to in writing between the parties.
	 
	13.	 	
Governing Law and Severability. This Agreement shall be governed by the
laws of the State of Maryland (without giving effect to choice of law
principles or rules thereof that would cause the application of the laws
of any jurisdiction other than the State of Maryland) and the invalidity
or unenforceability of any provisions hereof shall in no way affect the
validity or enforceability of any other provision. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating or affecting the
remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction

Page 12 of 16

 

	 	 	 
	 	 	
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
	 
	14.	 	
Arbitration. DISPUTES REGARDING EMPLOYEE’S EMPLOYMENT WITH COMPANY,
INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN COMPANY AND EMPLOYEE, BUT
EXCLUDING ANY DISPUTES REGARDING EMPLOYEE’S COMPLIANCE WITH SECTION 7,
SHALL BE SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING
ARBITRATION CONDUCTED BY JAMS/ENDISPUTE, INC.’S ARBITRATION RULES
APPLICABLE TO EMPLOYMENT DISPUTES, AND THE PARTIES AGREE TO BE BOUND BY
THE FINAL AWARD OF THE ARBITRATOR IN ANY SUCH PROCEEDING. THE ARBITRATOR
SHALL APPLY THE LAWS OF THE STATE OF MARYLAND WITH RESPECT TO THE
INTERPRETATION OR ENFORCEMENT OF ANY MATTER RELATING TO THIS AGREEMENT; IN
ALL OTHER CASES THE ARBITRATOR SHALL APPLY THE LAWS OF THE STATE SPECIFIED
IN COMPANY’S ALTERNATIVE DISPUTE RESOLUTION POLICY AS IN EFFECT FROM TIME
TO TIME (IF ANY). ARBITRATION SHALL BE HELD IN BALTIMORE, MARYLAND, OR
SUCH OTHER PLACE AS THE PARTIES MAY MUTUALLY AGREE, AND SHALL BE CONDUCTED
ONLY BY A FORMER JUDGE. JUDGMENT UPON THE AWARD BY THE ARBITRATOR MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

[Signatures appear on following page]

Page 13 of 16

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement

as of the date first above written.

	 	 	 
	WITNESS/ATTEST	 	
TELECOMMUNICATION SYSTEMS, INC.
	 
	/s/ BRUCE A WHITE	 	
By: /s/ MAURICE B. TOSE
	 	 	
Title: President and Chief Executive Officer
	 
	 	 	
EMPLOYEE
	 
	 /s/ BRUCE A. WHITE	 	
/s/ RICHARD A. YOUNG
	 	 	
Richard A. Young

Page 14 of 16

 

ATTACHMENT A TO EMPLOYMENT AGREEMENT

Employee:Richard A. Young

Agreement dated: February 1, 2001

In accordance with paragraph 2 of the Employment Agreement, the Company hereby
consents to the following other business activities:

[describe]

 

 

 

 

	 	 	 
	WITNESS/ATTEST	 	
TELECOMMUNICATION SYSTEMS, INC.
	 
	/s/ BRUCE A WHITE	 	
By: /s/ MAURICE B. TOSE
	 	 	
Title: President and Chief Executive Officer
	 
	 	 	
EMPLOYEE
	 
	 /s/ BRUCE A. WHITE	 	
/s/ RICHARD A. YOUNG
	 	 	
Richard A. Young

Page 15 of 16ex10-42

 

EXHIBIT 10.42

 

EMPLOYMENT AGREEMENT

between

TeleCommunication Systems, Inc.

and

Thomas M. Brandt, Jr.

(Employee Name)

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective as February 1, 2001 (the
“Effective Date”), between the individual signing as “Employee” at the end of
this Agreement (hereinafter referred to as “Employee”), and TeleCommunication
Systems, Inc. (hereinafter referred to as “Company”);

WHEREAS, Company desires to employ Employee, or to continue Employee’s
employment, and Employee desires to be employed by Company on the terms and
conditions hereinafter set forth;

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

		
	 	1. Employment. 
The Company agrees to employ Employee for the position of Senior Vice President & Chief Financial Officer.
Employee shall perform such duties as the management of the Company may from time to time assign to him
hereunder, including (without limitation) responsibility for the Company's financial management, reporting,
controls, accounting, and investor relations.

		
	 	2. Duties and Responsibilities. Employee agrees to devote his or her full
time and attention and his or her best efforts to performing his or her duties
hereunder. While employed by the Company, Employee will not, without the
Company’s prior written consent, engage in any other business activity, other
than investment of Employee’s personal funds on a passive basis and without
lending assistance directly to any competitor. Attachment A hereto is a
complete list of Employee’s current other business activities to which the
Company consents. In the event the Employee wishes to change the approved
activities, then the Employee shall submit the requested change in writing to
the Company. Any changes consented to by the Company shall be documented as a
revised Attachment A and will become incorporated into the Agreement by
reference. In no event shall Employee pursue outside business or personal
interests that interfere with his or her full-time responsibilities or entail
any use of the Company’s resources.

Page 1 of 15

 

3.     Compensation and Benefits.

	 	 	 	 	 
		 	
3.1
	 	Base Salary. During Employee’s employment under this Agreement,
Company shall pay or cause to be paid to Employee a base salary at an
annual rate of not less than $188,216, payable in cash in equal
periodic installments not less frequent than the periodic installments
in effect for salaries of Company employees of the same level as
Employee (the “Base Salary”). The Base Salary shall be subject to
increases pursuant to reviews by the Board of Directors, where
applicable, or a committee appointed by the Board of Directors, at
such times as salary reviews are conducted generally for Company
employees of the same level as Employee, but in no event less frequent
than annually.
	 
	 	 	
3.2
	 	Incentive Compensation. During Employee’s employment under this
Agreement, Company shall cause Employee to be eligible to participate
in each bonus or incentive compensation plan, program or policy
maintained by Company from time to time, in whole or in part, for
employees of his level (“Bonus Plan”). Employee’s target and maximum
compensation under, and his performance goals and other terms of
participation in, each Bonus Plan shall be determined by Company or by
such person or administrative body as provided in the Bonus Plan. Said
incentive compensation is not guaranteed and is contingent upon
Employee and Company achieving deliverables or goals agreed upon. Said
incentive compensation shall not be considered “earned” by Employee
until Company has allocated payment to be made to Employee for any
performance period.
	 
	 	 	
3.3
	 	Incentive Stock Compensation. During Employee’s employment under
this Agreement, Company shall cause Employee to be eligible to
participate in an incentive stock plan as may be maintained by Company
from time to time, in whole or in part, for employees of his level.
Employee’s awards under such plan shall be determined by the
administrator of the plan, the vesting for which shall be accelerated
in the event of a Change in Control as defined herein. The specific
terms and conditions of these options shall be set out in a stock
option agreement between Employee and Company.
	 
	 	 	 	 	The grant of stock options shall not be construed to constitute or to
be evidence of a commitment or guarantee to renew this Agreement or to
employ or retain Employee for any period of time inconsistent with
Sections 4 and 5 of this Agreement.
	 
	 	 	
3.4
	 	Benefits. During his employment under this Agreement, Employee
shall be entitled to: (i) participation in such employee retirement and
welfare benefit plans, programs, policies and arrangements as
maintained by Company from time to time, in whole or in part, for
employees of his level, including but not limited to Company’s employee
stock ownership plan, and its health, disability, life insurance and
sickness and accident insurance plans; and (ii) paid vacation,
holidays, leave of absence, leave for illness, funeral leave

Page 2 of 15

 

	 	 	 	 	 
	 	 	 	 	and temporary disability leave in accordance with the policies of
Company; and (iii) perquisites as from time to time provided by
Company to employees of his level.
	 
		 	
3.4
	 	Expenses. During Employee’s employment under this Agreement,
Company shall reimburse Employee for ordinary and reasonable
out-of-pocket expenses incurred by him in the performance of his duties
hereunder, provided that Employee shall account to Company for such
expenses in accordance with the employee business expense policies and
practices of Company.
	 
	 	 	
3.5
	 	Effect of Termination. Upon termination of employment for any
reason, Employee shall no longer be entitled to participation in any
Benefits programs, including the period when severance is payable under
the Agreement.

4.     Term of Employment. The term of Employee’s employment (the “Term”) shall
commence on the effective date of this Agreement and continue through January
31, 2002 for the initial term, unless sooner terminated as provided herein.
Upon expiration of the initial term, the term of Employee’s employment shall
automatically renew on February 1st for successive 12-month renewal periods,
unless and until terminated as provided herein.

5.     Termination of Employment.

	 	 	 	 	 
		 	
5.1
	 	Dismissal without Good Cause and Resignation for Good Reason.

	 	 	 	 	 	 	 
		 	
	 	5.1.1
	 	Dismissal without Good Cause. Company may terminate
Employee’s employment under this Agreement without Good Cause (as
defined in Section 5.1.4) at any time by giving notice thereof to
Employee at least 30 days before the effective date of such
termination. Upon such termination, Employee shall be entitled to
such compensation as provided in Section 5.1.3.
	 
	 	 	 	 	5.1.2
	 	Resignation for Good Reason. Employee may terminate his
employment under this Agreement for Good Reason (as defined in
Section 5.1.5) at any time by written notice thereof to Company at
least 30 days before the effective date of such termination. Such
notice shall specify in reasonable detail the Good Reason based
upon which Employee intends to terminate his employment. Upon such
termination, Employee shall be entitled to such compensation as
provided in Section 5.1.3.
	 
	 	 	 	 	5.1.3
	 	Severance Pay upon Dismissal without Good Cause or
Resignation for Good Reason. If Employee’s employment under this
Agreement is terminated by Company without Good Cause or by
Employee for Good Reason, Employee shall be entitled to the sum of
the following, payable in equal periodic installments the same as
Base Salary was received

Page 3 of 15

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	during the term of Employee’s employment as provided in Section
3.1 herein:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(i)
	 	Base Salary, at the rate in effect immediately
before the date of termination, for the greater of (A) the
period from the day after his last day of employment
hereunder through the last day of the Term of this Agreement,
or (B) six months; and
	 
	 	 	 	 	 	 	(ii)
	 	The amount “earned” by Employee under the
annual Bonus Plan if at the time of termination Company has
allocated payment to be made to Employee under the terms of
the Bonus Plan for any performance period. Employee will not
be eligible to receive payment under the Bonus Plan for any
performance period if he is terminated prior to a decision by
Company as to the payment due to Employee, if any, under the
terms of the Bonus Plan. If no such decision by Company is
made or necessary, Employee will not be eligible to receive
any payments under the Bonus Plan if he is not employed at
the time bonus payments are made to employees.

	 	 	 	 	 	 	 
		 	

	 	5.1.4
	 	Definition of “Good Cause.” “Good Cause” means:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(A)
	 	Employee’s willful gross misconduct, willful
gross neglect, willful malfeasance or gross negligence in
carrying out his duties hereunder, or willful breach of this
Agreement (other than an inadvertent and nonrecurring breach
cured and corrected by Employee within 30 days after notice
thereof by Company). Under this provision, “willful breach”
shall include, but not be limited to, insubordination,
serious dereliction of fiduciary obligation, chronic abuse by
Employee of alcohol or narcotics, a violation of any material
Company rule, regulation or policy, or a serious violation of
any law governing the workplace. It is provided further
that, no act or failure to act shall be considered “willful”
if Employee reasonably believed in good faith that such act
or failure to act was in, or not opposed to, the best
interest of Company and its affiliates;
	 
	 	 	 	 	 	 	(B)
	 	Any act or conduct of dishonesty to Company by
Employee involving fraud and embezzlement; or
	 
	 	 	 	 	 	 	(C)
	 	Employee’s conviction, including a plea of
guilty or nolo contendere, of a felony involving theft or
moral turpitude, other than a felony predicated on Employee’s
vicarious liability (for purposes of this Agreement,
“vicarious liability” means Employee’s liability based on
acts of Company for which Employee is charged solely as a
result of his offices with Company and in which he was not
directly involved or did not have prior knowledge of such
acts)

	 	 	 	 	 	 	 
		 	

	 	5.1.5
	 	Definition of “Good Reason.” “Good Reason” means any of
the following if not cured and corrected by Company within 30 days
after

Page 4 of 15

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	notice thereof by Employee to Company under Section 5.1.2:

	 	 	 	 	 	 	 	 	 
		 	

	 	
	 	(A)
	 	Any change in Employee’s title or position that
constitutes a material diminution in authority as compared to
the authority of his title or position as of the Effective
Date, or any substantial diminution in Employee’s duties and
responsibilities (other than a change due to Employee’s
Disability), provided that no diminution of title, position,
duties or responsibilities shall be deemed to occur solely
because Company becomes a subsidiary of another corporation
or because there has been a change in the reporting hierarchy
incident thereto involving Employee;
	 
	 	 	 	 	 	 	(B)
	 	Any requirement by Company that Employee
involuntarily physically relocate from Employee’s current
work location to another work location more than 75 miles
away; or
	 
	 	 	 	 	 	 	(C)
	 	Any material breach by Company of its
obligations under this Agreement.

	 	 	 	 	 
		 	
5.2
	 	Dismissal for Good Cause, Resignation without Good Reason and
Termination upon Death or Disability.

	 	 	 	 	 	 	 
		 	

	 	5.2.1
	 	Dismissal for Good Cause. Company may terminate
Employee’s employment under this Agreement for Good Cause by (i)
giving notice thereof to Employee specifying in reasonable detail
the Good Cause based upon which Company intends to terminate his
employment; (ii) if Good Cause exists under 5.1.4(A) only, after at
least 30 days after such notice, providing Employee an opportunity
to be heard at a meeting with the CEO and the Board of Directors;
and (iii) thereafter, effectuating such termination by a majority
vote of the Board of Directors. For Good Cause terminations under
Sections 5.1.4(B) & (C), Company may terminate Employee’s
employment immediately under this Agreement upon notice thereof to
Employee. The effect of such termination is provided in Section
5.2.4.
	 
	 	 	 	 	5.2.2
	 	Resignation without Good Reason. Employee may terminate
his employment hereunder at any time without Good Reason by notice
thereof to Company at least 30 days before the effective date of
such termination. The effect of such termination is provided in
Section 5.2.4.
	 
	 	 	 	 	5.2.3
	 	Termination upon Death or Disability. This Agreement
shall terminate automatically upon Employee’s death. If Company
determines in good faith that Employee has a Disability as defined
in this Section, Company may terminate his employment under this
Agreement by notifying Employee thereof at least 30 days before the
effective date of termination. For purposes of this Agreement,
“Disability” means any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to

Page 5 of 15

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	last for a continuous period of not less than six months and which
renders Employee unable to perform his material duties under this
Agreement. If there is any dispute between the parties as to
Employee’s Disability, Company shall select or approve a physician
whose determination as to Employee’s Disability shall bind the
parties hereto. The effect of a termination due to Employee’s
death or Disability is provided in Section 5.2.4.
	 
	 	 	 	 	5.2.4
	 	Effect of Dismissal for Good Cause, Resignation without
Good Reason, or Termination upon Death or Disability. If
Employee’s employment under this Agreement is terminated by Company
for Good Cause, by Employee without Good Reason, or due to
Employee’s death or Disability as provided in this Agreement, all
obligations of Company under this Agreement shall terminate, except
as provided in Section 5.6.

	 	 	 	 	 
		 	
5.3
	 	Termination by Mutual Consent. Company and Employee may terminate
Employee’s employment under this Agreement at any time and for any
reason upon the mutual consent of both parties, effective as of such
date as agreed upon by the parties. Upon such termination, except as
provided in Section 5.6 or as agreed to by the parties in connection
with their mutual consent to terminate Employee’s employment, all
obligations of Company hereunder shall terminate.
	 
	 	 	
5.4
	 	Termination after a Change in Control.

	 	 	 	 	 	 	 
		 	

	 	5.4.1
	 	Termination Events Triggering Compensation. Company shall
pay or cause to be paid to Employee such compensation as provided
in Section 5.4.2, if his employment under this Agreement is
terminated by Company without Good Cause or by Employee for Good
Reason within 12 months after a Change in Control (as defined in
Section 5.4.3)
	 
	 	 	 	 	5.4.2
	 	Compensation upon Termination. If Employee’s employment
hereunder is terminated as provided in Section 5.4.1, Company shall
pay or cause to be paid to Employee the following in a cash lump
sum within 30 days after the date of termination, one times the
annual Base Salary at the greater of (A) the rate in effect
immediately before the date of termination or (B) the rate in
effect immediately before the Change in Control.
	 
	 	 	 	 	5.4.3
	 	Definition of “Change in Control.” A “Change in Control”
means:

	 	 	 	 	 	 	 	 	 
		 	 	 	

	 	(i)
	 	A sale of all or substantially all of the
assets of Company;
	 
	 	 	 	 	 	 	(ii)	 	An acquisition by any “person” or “group” of
persons (within the meaning of such terms as used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), other than Company, its
subsidiaries, any employee benefit plan of Company, or an
underwriter temporarily holding securities

Page 6 of 15

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	pursuant to an offering of such securities) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the total voting power
represented by Company’s outstanding voting securities;
	 
	 	 	 	 	 	 	(iii)	 	A dissolution or liquidation of Company; or
	 
	 	 	 	 	 	 	(iv)	 	Any merger, consolidation or reorganization
involving Company immediately after which either (A) a
majority of the directors of the surviving entity is not
comprised of persons who were directors of Company
immediately prior to such transaction or (B) persons who hold
more than a majority of the total voting power represented by
outstanding voting securities of the surviving entity are not
persons who held outstanding voting securities of Company
immediately prior to such transaction.

	 	 	 	 	 
		 	
5.5
	 	Duplication of Severance Pay. Employee is entitled to receive the
payment under both Section 5.1 and Section 5.4. Employee hereby
irrevocably waives the right to receive benefits under any severance or
similar plan or policy of Company if Employee is entitled to receive a
payment under Section 5.1 and/or 5.4, provided that if the value of
such benefits exceeds the amount payable to such Employee under Section
5.1 and/or 5.4, Employee may elect to receive such benefits in lieu of
the payment under Section 5.1 and/or 5.4.
	 
	 	 	
5.6
	 	Payment of Base Salary upon Termination. Upon a termination of
Employee’s employment under this Agreement for any reason, Company
shall pay or cause to be paid to Employee the increment of Base Salary
earned but unpaid in the payroll period immediately preceding the date
of termination, payable in cash on or before the day on which Employee
would have been paid such amount if his employment hereunder had not
been terminated, but in no event later than the date as required by
law.
	 
	 	 	
5.7
	 	No Duty to Mitigate. Employee shall not be obligated to seek other
employment or take any other action by way of mitigation of the amounts
payable to Employee under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not Employee obtains other
employment.

6.     Ownership of Work Product.

	 	 	 	 	 
		 	
6.1
	 	The Company shall own all Work Product (as defined below). To the
extent permitted by law, All Work Product shall be considered work made
for hire by Employee and owned by the Company.
	 
	 	 	
6.2
	 	If any of the Work Product may not, by operation of law, be
considered work made for hire by Employee for the Company (or if
ownership of all right, title and interest of the intellectual property
rights therein shall not otherwise vest

Page 7 of 15

 

	 	 	 	 	 
	 	 	 	 	exclusively in the Company), Employee agrees to assign, and upon
creation thereof automatically assigns, without further consideration,
the ownership of all Trade Secrets (as defined below), U.S. and
international copyrights, patentable inventions, and other intellectual
property rights therein to the Company, its successors and assigns.
	 
	 	 	
6.3
	 	The Company, it successors and assigns, shall have the right to
obtain and hold in its or their own name copyrights, registrations, and
any other protection available in the foregoing.
	 
	 	 	
6.4
	 	Employee agrees to perform upon the reasonable request of the
Company, during or after Employee’s employment, such further acts as
may be necessary or desirable to transfer, perfect and defend the
Company’s ownership of the Work Product. When requested, Employee will

	 	 	 	 	 	 	 
		 	

	 	(i)
	 	Execute, acknowledge and deliver any requested affidavits
and documents of assignment and conveyance;
	 
	 	 	 	 	(ii)
	 	Obtain and aid in the enforcement of copyrights (and, if
applicable, patents) with respect to the Work Product in any
countries;
	 
	 	 	 	 	(iii)
	 	Provide testimony in connection with any proceeding
affecting the right, title or interest of the Company in any Work
Product; and
	 
	 	 	 	 	(iv)
	 	Perform any other acts deemed necessary or desirable to
carry out the purposes of this Agreement.

	 	 	 	 	 
	 	 	 	 	The Company shall reimburse all reasonable out-of-pocket expenses
incurred by Employee at the Company’s request in connection with the
foregoing, including (unless Employee is otherwise being compensated at
the time) a reasonable per diem or hourly fee for services rendered
following termination of Employee’s employment.
	 
		 	
6.5
	 	For purposes hereof, “Work Product” shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international
copyrights, patentable inventions, discoveries and improvements, and
other intellectual property rights, in any programming, documentation,
technology or other work product that relates to the business and
interests of the Company and that Employee conceives, develops, or
delivers to the Company at any time during the term of Employee’s
employment. “Work Product” shall also include all intellectual
property rights in any programming, documentation, technology or other
work product that is now contained in any of the products or systems
(including

Page 8 of 15

 

	 	 	 	 	 
	 	 	 	 	development and support systems) of the Company to the extent Employee
conceived, developed or delivered such Work Product to the Company prior
to the date of this Agreement while Employee was engaged as an
independent contractor or employee of the Company. Employee hereby
irrevocably relinquishes for the benefit of the Company and its assigns
any moral rights in the Work Product recognized by applicable law.

7.     Restrictive Covenants.

	 	 	 	 	 
		 	
7.1
	 	Competition. During the Term of this Agreement and, if
Employee’s employment under this Agreement is terminated by Company
or by Employee for any reason, the greater of (I) any period of time
in which Employee continues to receive compensation of any kind from
Company and continuing for a period of six (6) months after said
payment(s) cease, or (ii) one year after the Term of this Agreement,
employee shall not: (i) own, manage, operate, join, control or
participate in the ownership, management, operation or control of a
Competitor (as defined in Section 7.5); (ii) become a director,
officer, employee, consultant or lender of, or be compensated by, a
Competitor; or (iii) solicit any client of Company on behalf of or
for the benefit of a Competitor. Notwithstanding the foregoing,
Employee may own up to 1% of a publicly-traded Competitor.
	 
	 	 	
7.2
	 	Confidential Information. Employee shall at all times hold
in a fiduciary capacity for the benefit of Company all secret,
confidential or proprietary information, knowledge or data relating
to Company, and all of its businesses, which shall have been
obtained by Employee during his employment by Company and which
shall not be or become public knowledge (other than by acts by
Employee or his representatives in violation of this Agreement)
including, but not limited to, information regarding clients and
agents of Company (“Confidential Information”). During Employee’s
employment with Company under this Agreement and after the
termination of such employment, Employee shall not, without the
prior written consent of Company, communicate or divulge any
Confidential Information to any Person other than Company and those
designated by it or use any Confidential Information except for the
benefit of Company, provided that Employee may make disclosures to
comply with the law or legal process. Immediately upon termination
of Employee’s employment with Company at any time and for any
reason, Employee shall return to Company all Confidential
Information, including, but not limited to, any and all copies,
reproductions, notes or extracts of Confidential Information.
	 
	 	 	
7.3
	 	Solicitation of Employees. During the Term of this Agreement
and, if Employee’s employment under this Agreement is terminated by
Company or by Employee for any reason, for the greater of (I) any
period of time in which Employee continues to receive compensation
of any kind from

Page 9 of 15

 

	 	 	 	 	 
	 	 	 	 	Company and continuing for a period of six (6) months after said
payment(s) cease, or (ii) one year after the Term of this
Agreement, Employee shall not: (i) solicit, participate in or
promote the solicitation of any person who was employed by Company
at any time during the three-month period prior to Employee’s
termination of employment under this Agreement to leave the employ
of Company; or (ii) on behalf of himself or any other Person, hire,
employ or engage any such person. Employee further agrees that,
during such time, if an employee of Company contacts Employee about
prospective employment, Employee will inform such employee that he
cannot discuss the matter further without informing Company.
	 
	 	 	
7.4
	 	Remedies for Breach. Employee agrees that damages in the
event of any breach of Sections 7.1 through 7.3 by Employee would be
difficult to ascertain. Employee therefore agrees that,
notwithstanding anything in this Agreement to the contrary,
including but not limited to the provisions of Section 14, Company,
in addition to and without limiting any other remedy or right it may
have, shall have the right to an injunction or other equitable
relief in any court of competent jurisdiction, enjoining any such
breach. Employee hereby waives any and all defenses he may have on
the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. Employee also
agrees that a bond shall not be required by Employer in obtaining an
injunction. The existence of this right shall not preclude any
other rights and remedies at law or in equity that Company may have.
The provisions of Section 7 shall survive termination of this
Agreement. The existence of a claim or cause of action of any kind
by Employee against Company shall not constitute a defense to the
enforcement by Company of the rights provided in this Section 7 and
shall not be a defense to any injunction proceeding.
	 
	 	 	
7.5
	 	Definitions.

	 	 	 	 	 	 	 
		 	

	 	7.5.1
	 	“Competitor.” For purposes of Section 7, “Competitor” means any Person which sells goods or provides
services which are directly competitive with those sold or
provided by a business that (i) is being conducted by Company
at the relevant time and (ii) was being conducted by Company
at any time during the Term of this Agreement.
	 
	 	 	 	 	7.5.2
	 	“Company.” For purposes of Section 7, “Company”
means TeleCommunication Systems, Inc., and its subsidiaries
and affiliates.
	 
	 	 	 	 	7.5.3
	 	“Person.” For purposes of Section 7, “Person”
means any individual or entity, including but not limited to
any corporation, trust, sole proprietorship, joint venture or
partnership.

Page 10 of 15

 

	 	 	 	 	 
		 	
7.6
	 	Survival of Section 7. Employee agrees that the
non-competition agreements, nondisclosure agreements and
non-employment agreements in this Section 7 each constitute separate
agreements independently supported by good and adequate
consideration and, notwithstanding anything in this Agreement to the
contrary, shall be severable from the other provisions of, and shall
survive, this Agreement.

	 	 	 
	8.	 	
Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if
sent by registered or certified mail to Employee at the last address he
has filed in writing with Company or, in the case of Company, to Company’s
principal employee offices.

9.     Taxes.

	 	 	 	 	 
		 	
9.1
	 	Withholding Taxes. Company shall have the right, to the
extent permitted by law, to withhold from any payment of any kind
due to Employee under this Agreement to satisfy the tax withholding
obligations of Company under applicable law.
	 
	 	 	
9.2
	 	Adjustment relating to Tax on Excess Parachute Payments.

	 	 	 	 	 
		 	

	 	9.2.1. Adjustment. Notwithstanding anything in this Agreement to
the contrary, in the event the Company’s Law or Accounting Firm (as
defined in Section 9.2.2) determines that any portion of the cash
compensation payable under this Agreement (such portion of
compensation, the “Agreement Payment”), and the portions, if any,
of other payments or distributions in the nature of compensation by
Company to or for the benefit of Employee (including, but not
limited to, the value of the acceleration in vesting or
exercisability of stock options) whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement (the Agreement Payment, together with such portions of
other payments and distributions, the “Payments”), would cause any
portion of the Payments to be subject to the excise tax imposed by
section 4999, or any successor provision, of the Internal Revenue
Code of 1986, as amended (the “Code”) (the portion subject to
excise tax, the “Parachute Payment”), the Agreement Payment shall
be reduced to an amount not less than zero which shall not cause
any portion of the Payments to constitute a Parachute Payment,
provided that no such reduction shall be made if the Payments,
after the reduction and after the application of Federal income tax
at the highest rate applicable to individual taxpayers, would not
be greater than the present value (determined in accordance with
section 280G, or any successor provision, of the Code) of the
Payments before the reduction but after the application of (i)
excise tax under section 4999 of the Code and (ii) Federal income
tax at the highest rate applicable to individual taxpayers.
	 
	 	 	 	 	9.2.2 Determination. All determinations required to be made under
this Section 9.2, including the assumptions to be utilized in
arriving at such

Page 11 of 15

 

	 	 	 	 	 
	 	 	 	 	determination, shall be made by such nationally recognized law firm
(including Piper Marbury Rudnick & Wolfe L.L.P.) or accounting firm
(including Ernst & Young LP) as selected by Company (the “Law or
Accounting Firm”), which shall provide detailed supporting
calculations to both Company and Employee (i) within 15 business
days after receipt by Company of a notice from Employee that he may
have a Parachute Payment, or (ii) at such earlier time as may be
requested by Company. The Law or Accounting Firm may employ and
rely upon the opinions of actuarial or accounting professionals to
the extent it deems necessary or advisable. In the event that the
Law or Accounting Firm determines, for any reason, that it is
unable to perform such services, or declines to do so, Company
shall select another nationally recognized law or accounting firm
to make the determinations required under this Section (which law
or accounting firm shall then be referred to as the Law or
Accounting Firm hereunder). All fees and expenses of the Law or
Accounting Firm shall be borne solely by Company. Any
determination by the Law or Accounting Firm shall be binding upon
Company and Employee.

	 	 	 
	10.	 	
Successors and Assigns. The rights, duties and obligations of a party
hereunder may not be assigned, delegated or assumed without the prior
written consent of the other party, provided that Company may assign this
Agreement to any subsidiary thereof, without Employee’s consent, and such
assignment shall not constitute, a termination of his employment
hereunder. Nothing herein shall cause a termination of this Agreement
upon the acquisition, reorganization, or merger of Company. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors or permitted assigns.
Nothing herein shall be construed to confer upon any person not a party
hereto any right, remedy or claim under or by reason of this Agreement.
	 
	11.	 	
Entire Agreement. This Agreement constitutes the entire understanding of
Employee and Company with respect to the subject matter hereof and
supersedes and voids any and all prior agreements or understandings,
written or oral, regarding the subject matter hereof.
	 
	12.	 	
Amendment and Waiver. This Agreement may not be changed, modified or
discharged orally, but only by an instrument in writing signed by the
parties. No waiver of any term or condition of this Agreement shall be
effective unless agreed to in writing between the parties.
	 
	13.	 	
Governing Law and Severability. This Agreement shall be governed by the
laws of the State of Maryland (without giving effect to choice of law
principles or rules thereof that would cause the application of the laws
of any jurisdiction other than the State of Maryland) and the invalidity
or unenforceability of any provisions hereof shall in no way affect the
validity or enforceability of any other provision. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating or affecting the
remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction

Page 12 of 15

 

	 	 	 
	 	 	
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
	 
	14.	 	
Arbitration. DISPUTES REGARDING EMPLOYEE’S EMPLOYMENT WITH COMPANY,
INCLUDING, WITHOUT LIMITATION, ANY DISPUTE UNDER THIS AGREEMENT WHICH
CANNOT BE RESOLVED BY NEGOTIATIONS BETWEEN COMPANY AND EMPLOYEE, BUT
EXCLUDING ANY DISPUTES REGARDING EMPLOYEE’S COMPLIANCE WITH SECTION 7,
SHALL BE SUBMITTED TO, AND SOLELY DETERMINED BY, FINAL AND BINDING
ARBITRATION CONDUCTED BY JAMS/ENDISPUTE, INC.’S ARBITRATION RULES
APPLICABLE TO EMPLOYMENT DISPUTES, AND THE PARTIES AGREE TO BE BOUND BY
THE FINAL AWARD OF THE ARBITRATOR IN ANY SUCH PROCEEDING. THE ARBITRATOR
SHALL APPLY THE LAWS OF THE STATE OF MARYLAND WITH RESPECT TO THE
INTERPRETATION OR ENFORCEMENT OF ANY MATTER RELATING TO THIS AGREEMENT; IN
ALL OTHER CASES THE ARBITRATOR SHALL APPLY THE LAWS OF THE STATE SPECIFIED
IN COMPANY’S ALTERNATIVE DISPUTE RESOLUTION POLICY AS IN EFFECT FROM TIME
TO TIME (IF ANY). ARBITRATION SHALL BE HELD IN BALTIMORE, MARYLAND, OR
SUCH OTHER PLACE AS THE PARTIES MAY MUTUALLY AGREE, AND SHALL BE CONDUCTED
ONLY BY A FORMER JUDGE. JUDGMENT UPON THE AWARD BY THE ARBITRATOR MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

[Signatures appear on following page]

Page 13 of 15

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement

as of the date first above written.

	 	 	 
	WITNESS/ATTEST	 	
TELECOMMUNICATION SYSTEMS, INC.
	 
	/s/ BRUCE A. WHITE	 	
By: /s/ MAURICE B. TOSE
	 	 	
Title: President and Chief Executive Officer
	 
	 	 	
EMPLOYEE
	 
	 /s/ BRUCE A. WHITE	 	
/s/ THOMAS M. BRANDT, JR.
	 	 	
Thomas M. Brandt, Jr.

Page 14 of 15

 

ATTACHMENT A TO EMPLOYMENT AGREEMENT

Employee:Thomas M. Brandt, Jr.

Agreement dated: February 1, 2001

In accordance with paragraph 2 of the Employment Agreement, the Company hereby
consents to the following other business activities:

	 	 	 
	 	Board of Directors service with:
	 	 	Opptelcom, Inc.

Antenna Research Associates, Inc.

AmericasBank Corp.

 

 

 

 

	 	 	 
	WITNESS/ATTEST	 	
TELECOMMUNICATION SYSTEMS, INC.
	 
	/s/ BRUCE A. WHITE	 	
By: /s/ MAURICE B. TOSE
	 	 	
Title: President and Chief Executive Officer
	 
	 	 	
EMPLOYEE
	 
	 /s/ BRUCE A. WHITE	 	
/s/ THOMAS M. BRANDT, JR.
	 	 	
Thomas M. Brandt, Jr.

Page 15 of 15

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