{"id":38564,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/change-in-control-agreement-dyncorp-and-robert-b-alleger.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"change-in-control-agreement-dyncorp-and-robert-b-alleger","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/change-in-control-agreement-dyncorp-and-robert-b-alleger.html","title":{"rendered":"Change in Control Agreement &#8211; DynCorp and Robert B. Alleger"},"content":{"rendered":"<pre>April 16, 1998\n\nRobert B. Alleger\n\nDear Bob:\n\n         DynCorp (the 'Company') considers it essential to the best interests of\nits  stockholders  to  foster  the  continuous   employment  of  key  management\npersonnel. In this connection,  the Company recognizes that, as is the case with\nmany businesses,  the possibility of a Change in Control may occur and that such\npossibility  and  the  uncertainty  and  questions  which  it  may  raise  among\nmanagement,  may  result  in the  departure  or  distraction  of key  management\npersonnel to the detriment of the Company and its stockholders.\n\n         The Board of Directors (the 'Board') of the Company has determined that\nappropriate  steps  should be taken to reinforce  and  encourage  the  continued\nattention and dedication of members of the Company's key  management,  including\nyourself,   to  their  assigned  duties  without  distraction  in  the  face  of\npotentially disturbing circumstances arising from the possibility of a Change in\nControl of the Company.\n\n         In order to induce  you to remain in the employ of the  Company  and in\nconsideration  of your  agreement  set forth in  Subsection  2(ii)  hereof,  the\nCompany  agrees that you shall receive the severance  benefits set forth in this\nletter agreement  ('Agreement') in the event your employment with the Company is\nterminated  subsequent  to a 'Change in Control of the  Company'  (as defined in\nSection 2 hereof) under the circumstances described below.\n\n         1. Term of Agreement.  This Agreement shall commence on the date hereof\nand shall  continue in effect  through the earlier of December  31,  1998,  such\nlater  termination  date as hereafter  provided,  or such date on which you may,\nprior to the occurrence of a Change in Control as hereafter  defined,  retire or\notherwise  terminate your employment with the Company for any reason;  provided,\nhowever,  that commencing on January 1, 1999 and each January 1 thereafter,  the\nterm of this Agreement shall  automatically  be extended for one additional year\nunless,  not later than  September 30 of the preceding  year,  the Company shall\nhave given  notice  that it does not wish to extend  this  Agreement;  provided,\nfurther,  if a Change in Control of the Company shall have  occurred  during the\noriginal or extended term of this  Agreement,  this Agreement  shall continue in\neffect for a period of  thirty-six  (36)  months  beyond the month in which such\nChange in Control occurred; provided further, however, that this Agreement shall\nnot extend beyond the Company's mandatory  retirement age, unless such mandatory\nretirement age is waived by the Board.\n\n         2. Change in Control.  Except as provided in Section  5(i), no benefits\nshall be payable  hereunder  unless there shall have been a Change in Control of\nthe Company, as set forth below.\n\n                  (i) For  purposes of this  Agreement,  a 'Change in Control of\nthe Company'  shall be deemed to have occurred if (A) any 'person' (as such term\nis used in Sections 13(d) and 14(d) of the  Securities  Exchange Act of 1934, as\namended  (the   'Exchange   Act')),   other  than  Capricorn   Investors,   L.P.\n('Capricorn')  or a  trustee  or other  fiduciary  holding  securities  under an\nemployee  benefit  plan of the  Company or its  subsidiaries,  is or becomes the\n'beneficial  owner' (as defined in Rule 13d-3 under the Exchange Act),  directly\nor indirectly,  of securities of the Company  representing  more than 35% of the\ncombined  voting power of the  Company's  then  outstanding  securities;  or (B)\nduring any period of two  consecutive  years (not  including any period prior to\nthe  execution  of this  Agreement),  individuals  who at the  beginning of such\nperiod  constitute  the  Board  and  any new  director  (other  than a  director\ndesignated  by a person who has entered  into an  agreement  with the Company to\neffect a transaction  described in clauses (A) or (C) of this Subsection)  whose\nelection by the Board or nomination  for election by the Company's  stockholders\nwas approved by a vote of at least  two-thirds (2\/3) of the directors then still\nin office who either  were  directors  at the  beginning  of the period or whose\nelection or nomination  for election was  previously so approved,  cease for any\nreason to constitute a majority thereof;  or (C) the shareholders of the Company\napprove a merger or  consolidation  of the Company  with any other  corporation,\nother than a merger or consolidation which would result in the voting securities\nof the Company  outstanding  immediately  prior thereto  continuing to represent\n(either by remaining outstanding or by being converted into voting securities of\nthe  surviving  entity) at least 80% of the combined  voting power of the voting\nsecurities of the Company or such surviving entity outstanding immediately after\nsuch merger or consolidation,  or the shareholders of the Company approve a plan\nof  complete  liquidation  of the  Company  or an  agreement  for  the  sale  or\ndisposition by the Company of all or substantially all the Company's assets.\n\n                  (ii) For purposes of this  Agreement,  a 'potential  Change in\nControl of the  Company'  shall be deemed to have  occurred  if (A) the  Company\nenters  into an  agreement,  the  consummation  of  which  would  result  in the\noccurrence of a Change in Control of the Company;  (B) any person (including the\nCompany)  publicly  announces an intention to take or to consider taking actions\nwhich, if consummated,  would constitute a Change in Control of the Company; (C)\nany  person,  other  than  Capricorn  or a trustee  or other  fiduciary  holding\nsecurities  under an employee  benefit plan of the Company or its  subsidiaries,\nwho is or becomes the beneficial owner, directly or indirectly, of securities of\nthe  Company  representing  9.5% or more of the  combined  voting  power  of the\nCompany's then outstanding  securities (other than through Common Stock Warrants\noutstanding as of the date hereof),  increases his beneficial  ownership of such\nsecurities by 5% or more over the percentage so owned by such person on the date\nhereof; or (D) the Board adopts a resolution to the effect that, for purposes of\nthis Agreement,  a potential Change in Control of the Company has occurred.  You\nagree that, subject to the terms and conditions of this Agreement,  in the event\nof a potential  Change in Control of the Company,  you will remain in the employ\nof the Company  until the  earliest of (i) a date which is six (6) months  after\nthe  occurrence  of such  potential  Change in Control of the Company,  (ii) the\ntermination by you of your  employment by reason of Disability or Retirement (at\nthe Company's mandatory retirement age), as defined in Subsection 3(i), or (iii)\nthe occurrence of a Change in Control of the Company.\n\n                  (iii)  Notwithstanding   anything  in  the  foregoing  to  the\ncontrary,  no Change in Control of the Company  shall be deemed to have occurred\nfor purposes of this  Agreement by virtue of any  transaction  which  results in\nyou,  or  a  group  of  persons  which  includes  you,  acquiring,  directly  or\nindirectly,  more than 35% of the combined  voting power of the  Company's  then\noutstanding securities.\n\n                  (iv) Effective upon the occurrence of a Change of Control, all\nunvested  options and rights  granted to you under any stock option,  restricted\nstock or other stock-based  benefit plan (excluding the Employee Stock Ownership\nand Savings and Retirement  Plans) shall  immediately vest  notwithstanding  the\nabsence from such plan(s) of language that would trigger such vesting as of such\ndate,  and you shall be entitled  thereafter  to exercise  with  respect to such\npreviously  unvested  options or shares all  rights  described  in such plans as\nbeing applicable to fully vested options or shares.\n\n         3.  Termination  Following  Change  in  Control.  If any of the  events\ndescribed  in  Subsection  2(i) hereof  constituting  a Change in Control of the\nCompany shall have occurred,  you shall be entitled to the benefits  provided in\nSubsection  4(iii) hereof upon the  subsequent  termination  of your  employment\nduring the term of this Agreement unless such termination is (A) because of your\ndeath,  Disability  or  Retirement  (B) by the Company for Cause,  or (C) by you\nother than for Good Reason.\n\n                  (i) Disability; Retirement. If, as a result of your incapacity\ndue to physical or mental illness, you shall have been absent from the full-time\nperformance of your duties with the Company for six (6) consecutive  months, and\nwithin thirty (30) days after written  notice of  termination is given you shall\nnot have returned to the full-time  performance of your duties,  your employment\nmay be terminated  for  'Disability'.  Termination by the Company or you of your\nemployment  based on 'Retirement'  shall mean termination in accordance with the\nCompany's retirement policy, including early or mandatory retirement,  generally\napplicable  to its  salaried  employees  or in  accordance  with any  retirement\narrangement established with your consent with respect to you.\n\n                  (ii) Cause.  Termination by the Company of your employment for\n'Cause' shall mean termination upon (A) the willful and continued failure by you\nto  substantially  perform  your duties  with the  Company  (other than any such\nfailure resulting from your incapacity due to physical or mental illness, or any\nsuch actual or anticipated failure after the issuance of a Notice of Termination\nby you for Good  Reason,  as such  terms are  defined in  Subsections  3(iv) and\n3(iii),  respectively)  after a written  demand for  substantial  performance is\ndelivered to you by the Board, which demand  specifically  identifies the manner\nin which the  Board  believes  that you have not  substantially  performed  your\nduties,  or (B) the willful engaging by you in conduct which is demonstrably and\nmaterially  injurious to the Company,  monetarily or otherwise.  For purposes of\nthis  Subsection,  no act,  or  failure  to act,  on your  part  shall be deemed\n'willful'  unless  done,  or  omitted  to be done,  by you not in good faith and\nwithout  reasonable belief that your action or omission was in the best interest\nof the Company.  Notwithstanding the foregoing,  you shall not be deemed to have\nbeen  terminated  for Cause unless and until there shall have been  delivered to\nyou a copy of a resolution duly adopted by the affirmative vote of not less than\nthree-quarters  (3\/4) of the entire  membership of the Board at a meeting of the\nBoard called and held for such purpose  (after  reasonable  notice to you and an\nopportunity for you, together with your counsel,  to be heard before the Board),\nfinding that, in the good faith opinion of the Board, you were guilty of conduct\nset forth above in clauses (A) or (B) of the first  sentence of this  Subsection\nand specifying the particulars thereof in detail.\n\n                  (iii) Good  Reason.  You shall be entitled to  terminate  your\nemployment for Good Reason. For purposes of this Agreement,  'Good Reason' shall\nmean,  without your express written  consent,  the occurrence  after a Change in\nControl of the Company of any of the following circumstances unless, in the case\nof paragraphs (A), (E), (F), (G) or (H), such  circumstances are fully corrected\nprior to the Date of  Termination  specified  in the Notice of  Termination,  as\ndefined in Subsections 3(v) and 3(iv), respectively, given in respect thereof:\n\n                           (A) the assignment to you of any duties  inconsistent\n         with your  status as a senior  executive  officer  of the  Company or a\n         substantial  adverse  alteration  in  the  nature  or  status  of  your\n         responsibilities  from those in effect  immediately prior to the Change\n         in Control of the Company;\n\n                           (B) a  reduction  by the  Company in your annual base\n         salary as in effect on the date hereof or as the same may be  increased\n         from  time  to  time  except  for  across-the-board  salary  reductions\n         similarly affecting all senior executives of the Company and all senior\n         executives of any person in control of the Company;\n\n                           (C)  the   relocation  of  the  Company's   Aerospace\n         Operations Division's principal executive offices to a location outside\n         a radius of 30 miles from Fort  Worth,  Texas (or,  if  different,  the\n         metropolitan  area in which such offices are located  immediately prior\n         to the Change in Control of the Company) or the Company's requiring you\n         to be based  anywhere  other than the  Division's  principal  executive\n         offices  except for  required  travel on the  Company's  business to an\n         extent  substantially  consistent  with your  present  business  travel\n         obligations;\n\n                           (D) the failure by the Company, without your consent,\n         to pay to you any portion of your current  compensation except pursuant\n         to an  across-the-board  compensation  deferral similarly affecting all\n         senior  executives  of the  Company  and all senior  executives  of any\n         person in control of the  Company,  or to pay to you any  portion of an\n         installment of deferred  compensation  under any deferred  compensation\n         program  of the  Company,  within  seven  (7)  days  of the  date  such\n         compensation is due;\n\n                           (E) the  failure by the Company to continue in effect\n         any compensation plan in which you participate immediately prior to the\n         Change in  Control  of the  Company  which is  material  to your  total\n         compensation, including but not limited to the Executive Incentive Plan\n         ('EIP'),  the Employee Stock Ownership Plan ('ESOP'),  the Supplemental\n         Executive Retirement Plan ('SERP'), the DynCorp 1995 Stock Option Plan,\n         and\/or any  substitute  plans  adopted prior to the Change in Control (\n         'Compensation-Type  Benefit  Plans'),  unless an equitable  arrangement\n         (embodied in an ongoing  substitute or alternative  plan) has been made\n         with respect to such Compensation-Type Benefit Plans, or the failure by\n         the  Company  to  continue  your  participation  therein  (or  in  such\n         substitute  or  alternative  plan)  on  a  basis  not  materially  less\n         favorable  in the  aggregate,  both in terms of the amount of  benefits\n         provided  and  the  level  of  your  participation  relative  to  other\n         participants, as existed at the time of the Change in Control;\n\n                           (F) the failure by the Company to continue to provide\n         you with benefits  substantially  similar to those enjoyed by you under\n         any of the  Company's  pension,  life  insurance,  medical,  health and\n         accident,  or disability  plans in which you were  participating at the\n         time of the Change in Control of the Company;  the taking of any action\n         by the Company which would directly or indirectly materially reduce any\n         of such benefits or deprive you of any material  fringe benefit enjoyed\n         by you at the time of the  Change in  Control  of the  Company;  or the\n         failure by the Company to provide you with the number of paid  vacation\n         days to which you are entitled  under the terms of your  employment  by\n         the Company;\n\n                           (G)  the   failure   of  the   Company  to  obtain  a\n         satisfactory  agreement  from any  successor  to  assume  and  agree to\n         perform this Agreement, as contemplated in Section 5 hereof; or\n\n                           (H) any  purported  termination  of  your  employment\n         which is not effected  pursuant to a Notice of  Termination  satisfying\n         the  requirements  of Subsection  (iv) below (and, if  applicable,  the\n         requirements of Subsection (ii) above); for purposes of this Agreement,\n         no such purported termination shall be effective.\n\nYour right to terminate your employment pursuant to this Subsection shall not be\naffected by your  incapacity due to physical or mental  illness.  Your continued\nemployment  shall not constitute  consent to, or a waiver of rights with respect\nto, any circumstance constituting Good Reason hereunder.\n\n                  (iv) Notice of Termination.  Any purported termination of your\nemployment by the Company or by you shall be  communicated  by written Notice of\nTermination to the other party hereto in accordance  with Section 6 hereof.  For\npurposes of this Agreement,  a 'Notice of Termination' shall mean a notice which\nshall indicate the specific termination  provision in this Agreement relied upon\nand shall set forth in reasonable detail the facts and circumstances  claimed to\nprovide a basis for  termination  of your  employment  under  the  provision  so\nindicated.\n\n                  (v) Date of Termination, Etc. 'Date of Termination' shall mean\n(A) if your  employment is  terminated  for  Disability,  thirty (30) days after\nNotice of Termination is given (provided that you shall not have returned to the\nfull-time  performance  of your duties during such thirty (30) day period),  and\n(B) if your employment is terminated  pursuant to Subsection (ii) or (iii) above\nor for any other  reason  (other than  Disability),  the date  specified  in the\nNotice  of  Termination  (which,  in  the  case  of a  termination  pursuant  to\nSubsection  (ii) above shall not be less than thirty (30) days,  and in the case\nof a  termination  pursuant  to  Subsection  (iii)  above shall not be less than\nfifteen  (15) nor more than sixty (60)  days,  respectively,  from the date such\nNotice of Termination is given); provided that if within fifteen (15) days after\nany  Notice  of  Termination  is  given,  or,  if  later,  prior  to the Date of\nTermination (as determined without regard to this proviso),  the party receiving\nsuch  Notice of  Termination  notifies  the other  party  that a dispute  exists\nconcerning the termination,  the Date of Termination  shall be the date on which\nthe dispute is finally  determined,  either by mutual  written  agreement of the\nparties, by a binding arbitration award, or by a final judgment, order or decree\nof a court of competent jurisdiction (which is not appealable or with respect to\nwhich  the  time  for  appeal  therefrom  has  expired  and no  appeal  has been\nperfected); provided further that the Date of Termination shall be extended by a\nnotice  of  dispute  only if such  notice  is given in good  faith and the party\ngiving such notice  pursues  the  resolution  of such  dispute  with  reasonable\ndiligence.\n\n         4.  Compensation  Upon  Termination or During  Disability.  Following a\nChange  in  Control  of  the  Company,  as  defined  by  Subsection  2(i),  upon\ntermination  of your  employment or during a period of  disability  you shall be\nentitled to the following benefits:\n\n                  (i) During any period that you fail to perform your  full-time\nduties  with the  Company as a result of  incapacity  due to  physical or mental\nillness,  you shall  continue to receive the benefits  provided by the Company's\ninsurance,  disability and other  compensation  plans then in effect during such\nperiod,  until your  employment is  terminated  pursuant to Section 3(i) hereof.\nThereafter,  or in the event your employment  shall be terminated by the Company\nor by you for  Retirement  or by reason of your death,  your  benefits  shall be\ndetermined  under the Company's  retirement,  insurance  and other  compensation\nprograms then in effect in accordance with the terms of such programs.\n\n                  (ii) If your employment shall be terminated by the Company for\nCause or by you other than for Good Reason, Disability, death or Retirement, the\nCompany  shall pay you your full base salary  through  the 30th day  immediately\nfollowing the time Notice of  Termination  is given at the rate in effect at the\ntime Notice of  Termination  is given,  plus all other  amounts to which you are\nentitled  under any  compensation  plan of the Company at the time such payments\nare due (including  vacation at the rate of at least 4 weeks per year),  and the\nCompany shall have no further obligations to you under this Agreement.\n\n                  (iii) If your  employment  by the Company  shall be terminated\n(a) by the Company other than for Cause,  Retirement or Disability or (b) by you\nfor Good Reason, then you shall be entitled to the benefits provided below:\n\n                           (A) The  Company  shall pay you your full base salary\n         through  the  30th  day  immediately   following  the  time  Notice  of\n         Termination  is given  at the rate in  effect  at the  time  Notice  of\n         Termination is given,  plus all other amounts to which you are entitled\n         under any compensation  plan of the Company,  at the time such payments\n         are due, except as otherwise provided below.\n\n                           (B) In lieu of any further salary payments to you for\n         periods subsequent to the Date of Termination, the Company shall pay as\n         severance pay to you a lump sum severance  payment  (together  with the\n         payments  provided in paragraphs  (C) and (D),  below,  the  'Severance\n         Payments')  equal to 2.99 times the sum of (x) your  annual base salary\n         in  effect  immediately  prior to the  occurrence  of the  circumstance\n         giving rise to the Notice of Termination  given in respect  thereof and\n         (y) the average annual amount paid to you pursuant to the Benefit Plans\n         in the three  years  preceding  that in which  the Date of  Termination\n         occurs;  provided,  however,  that in the event the Date of Termination\n         occurs within 3 years from the date of your  employment by the Company,\n         such average  annual  amount shall equal the sum of (i) the  annualized\n         value of grants to you under the current  Stock Option Plan,  the ESOP,\n         and the SERP, plus (ii) an amount  representing the annual EIP to which\n         you would have been entitled  under the  Company's EIP ('Annual  EIP').\n         For  purposes  of this  Agreement,  your Annual EIP shall be (i) if you\n         have been  employed by the Company as of Date of  Termination  for less\n         than one  year,  your  target  annual  incentive  under the EIP for the\n         calendar year in which such Date of Termination  occurs multiplied by a\n         fraction the numerator of which shall be actual  year-to-date after tax\n         earnings of the Company, and the denominator of which shall be budgeted\n         year-to-date  after tax earnings of the Company  (provided,  that in no\n         event shall such EIP amount exceed the target  amount),  or (ii) if you\n         have been  employed  by the Company as of the Date of  Termination  for\n         more than one year,  the  average of any annual EIP  payments  actually\n         made to you during such 3 year period.\n\n                           (C)  Notwithstanding  any  provision of the Executive\n         Incentive  Plan the Company shall pay to you a lump sum amount equal to\n         the sum of (x) any incentive  compensation  which has been allocated or\n         awarded to you for a fiscal year or other  measuring  period  preceding\n         the Date of  Termination  but has not yet been paid, and (y) a pro rata\n         portion  to the  Date of  Termination  of the  aggregate  value  of all\n         contingent  incentive  compensation  awards to you for all  uncompleted\n         periods under such plans.\n\n                           (D) In lieu of shares of common  stock of the Company\n         ('Company  Shares')  issuable  upon  exercise of  outstanding  options,\n         ('Options'),  if any,  granted to you under the Company's  Stock Option\n         Plans (which  Options  shall be canceled upon the making of the payment\n         referred  to below),  you shall  receive an amount in cash equal to the\n         excess of the fair market value of the shares  covered by such options,\n         over the exercise  price for such shares,  such 'fair market  value' to\n         equal the most recent transaction or 'minority' value determined by the\n         ESOP  financial  advisor,  or, if such  shares are traded on a national\n         stock  exchange,  the  closing  price as of the trade date  immediately\n         preceding the Date of Termination.\n\n                           (E) In the event that any payment or benefit received\n         or to be received by you in connection  with a Change in Control of the\n         Company or the termination of your employment  (whether pursuant to the\n         terms of this  Agreement  or any other plan,  arrangement  or agreement\n         with the  Company,  any  person  whose  actions  result  in a Change in\n         Control  or any person  affiliated  with the  Company  or such  person)\n         (collectively with the Severance Payments,  'Total Payments') would not\n         be  deductible  (in whole or part) as a result of  Section  280G of the\n         Code by the Company,  an affiliate or other person  making such payment\n         or providing  such  benefit,  the Severance  Payments  shall be reduced\n         until no  portion  of the  Total  Payments  is not  deductible,  or the\n         Severance Payments are reduced to zero. For purposes of this limitation\n         (i) no portion of the Total  Payments the receipt or enjoyment of which\n         you  shall  have  effectively  waived in  writing  prior to the date of\n         payment of the Severance Payments shall be taken into account,  (ii) no\n         portion of the Total  Payments shall be taken into account which in the\n         opinion of tax counsel selected by the Company's  independent  auditors\n         and  acceptable  to you does not  constitute a of  'parachute  payment'\n         within  the  meaning  of  Section  280G(b)(2)  of the  Code,  (iii) the\n         Severance  Payments  shall be reduced  only to the extent  necessary so\n         that the Total Payments (other than those referred to in clauses (i) or\n         (ii)) in their entirety constitute reasonable compensation for services\n         actually rendered within the meaning of Section  280G(b)(4) of the Code\n         or are  otherwise not subject to  disallowance  as  deductions,  in the\n         opinion of the tax  counsel  referred to in clause  (ii);  and (iv) the\n         value of any  non-cash  benefit  or any  deferred  payment  or  benefit\n         included in the Total  Payments  shall be  determined  by the Company's\n         independent  auditors in  accordance  with the  principles  of Sections\n         280G(d)(3) and (4) of the Code.\n\n                           (F) The payments  provided for in paragraphs  (B) (C)\n         and (D),  above,  shall be made not later than the tenth  business  day\n         following  the  Date of  Termination,  provided,  however,  that if the\n         amounts of such payments, and the limitation on such payments set forth\n         in paragraph (E), above, cannot be finally determined on or before such\n         day,  the  Company  shall  pay to  you on  such  day  an  estimate,  as\n         determined in good faith by the Company,  of the minimum amount of such\n         payments and shall pay the  remainder of such payments  (together  with\n         interest at the rate provided in Section  1274(b)(2)(B) of the Code) as\n         soon as the amount thereof can be determined but in no event later than\n         the thirtieth day after the Date of Termination.  In the event that the\n         amount  of the  estimated  payments  exceeds  the  amount  subsequently\n         determined to have been due, such excess shall constitute a loan by the\n         Company to you,  payable on the fifth day after  demand by the  Company\n         (together  with interest at the rate provided in Section  1274(b)(2)(B)\n         of the Code).\n\n                           (G) The Company also shall pay to you all  reasonable\n         legal fees and  expenses  incurred  by you in good faith as a result of\n         such  termination  (including  all  such  fees  and  expenses,  if any,\n         incurred in contesting or disputing any such  termination or in seeking\n         to obtain or enforce any right or benefit provided by this Agreement or\n         in  connection   with  any  tax  audit  or  proceeding  to  the  extent\n         attributable  to the  application  of  Section  4999 of the Code to any\n         payment or benefit  provided  hereunder)  except to the extent that the\n         payment  of such fees and  expenses  would  not be, or would  cause any\n         other portion of the Total Payments not to be,  deductible by reason of\n         Section 280G of the Code.  Such payments  shall be made at the later of\n         the times  specified  in paragraph  (E) above,  or within five (5) days\n         after your request for payment  accompanied  with such evidence of fees\n         and expenses incurred as the Company reasonably may require.\n\n                  (iv) If your employment shall be terminated (A) by the Company\nother than for Cause,  Retirement  or  Disability or (B) by you for Good Reason,\nthen for a  thirty-six  (36) month period  after such  termination,  the Company\nshall  arrange  to  provide  you with  life,  disability,  accident  and  health\ninsurance  benefits  substantially  similar  to those  which  you are  receiving\nimmediately prior to the Notice of Termination; provided, however that you shall\nnot be  entitled  to any  benefits  under  this  Section  4(iv)  while you are a\nfull-time employee of any other company.\n\n                  (v) If your employment  shall be terminated (A) by the Company\nother than for Cause,  Retirement  or  Disability or (B) by you for Good Reason,\nthen in addition to the retirement  benefits to which you are entitled under the\nESOP and Supplemental  Execution Retirement Plan or any successor plans thereto,\nthe  Company  shall pay you in cash at the time and in the  manner  provided  in\nparagraph  (F) of  Subsection  4(iii),  a lump sum  equal to the  present  value\ndiscounted at 5% of the excess of (x) the payments which you would have received\nunder the  terms of the  ESOP,  Supplemental  Executive  Retirement  Plan or any\nsuccessor  plan,  (assuming the  immediate  sale back to the Company of all ESOP\nShares  distributed  to  you),  but  without  regard  to  any  amendment  to the\naforementioned  Plans made  subsequent to a Change in Control of the Company and\non or prior to the Date of Termination, which amendment adversely affects in any\nmanner the computation of retirement benefits thereunder),  determined as if you\nwere fully vested thereunder and had accumulated (after the Date of Termination)\nthirty-six (36) additional  months of service  thereunder at your highest annual\nrate of  compensation  during the twelve (12) months  immediately  preceding the\nDate of  Termination  (but in no event  shall you be deemed to have  accumulated\nadditional months of service after your sixty-fifth  (65th) birthday),  over (y)\nthe payments you are entitled to under the  aforementioned  Plans as of the Date\nof Termination\n\n                  (vi) Except as expressly  provided in Section 4(iv), you shall\nnot be  required  to mitigate  the amount of any  payment  provided  for in this\nSection 4 by seeking other employment or otherwise,  nor shall the amount of any\npayment or benefit provided for in this Section 4 be reduced by any compensation\nearned by you as the result of  employment  by another  employer,  by retirement\nbenefits, by offset against any amount claimed to be owed by you to the Company,\nor otherwise.\n\n                  (vii) In  addition to all other  amounts  payable to you under\nthis  Section 4, you shall be entitled to receive  all  benefits  payable to you\nunder the ESOP and any other plan or agreement relating to retirement benefits.\n\n         5.  Successors;  Binding  Agreement.  (i) The Company  will require any\nsuccessor  (whether direct or indirect,  by purchase,  merger,  consolidation or\notherwise)  to all or  substantially  all of the business  and\/or  assets of the\nCompany to  expressly  assume and agree to perform  this  Agreement  in the same\nmanner and to the same extent  that the Company  would be required to perform it\nif no such  succession  had taken  place.  Failure of the Company to obtain such\nassumption and agreement prior to the effectiveness of any such succession shall\nbe a breach of this  Agreement  and shall entitle you to  compensation  from the\nCompany in the same  amount and on the same  terms as you would be  entitled  to\nhereunder if you terminate your employment for Good Reason following a Change in\nControl of the Company,  except that for purposes of implementing the foregoing,\nthe date on which any such succession becomes effective shall be deemed the Date\nof Termination.  As used in this Agreement,  'Company' shall mean the Company as\nherein  before  defined  and any  successor  to its  business  and\/or  assets as\naforesaid  which  assumes and agrees to perform  this  Agreement by operation of\nlaw, or otherwise.\n\n                  (ii) This  Agreement  shall  insure to the  benefit  of and be\nenforceable   by   your   personal   or   legal   representatives,    executors,\nadministrators,  successors, heirs, distributees,  devisees and legatees. Unless\notherwise  provided  herein,  if you should die while any amount  would still be\npayable to you hereunder,  all such amounts shall be paid in accordance with the\nterms of this Agreement to your devisee,  legatee or other designee or, if there\nis no such designee, to your estate.\n\n         6.  Notice.  For the purpose of this  Agreement,  notices and all other\ncommunications  provided for in the  Agreement  shall be in writing and shall be\ndeemed  to have been  duly  given  when  delivered  or  mailed by United  States\nregistered mail,  return receipt  requested,  postage prepaid,  addressed to the\nrespective  addresses  set forth on the first page of this  Agreement,  provided\nthat all  notice  to the  Company  shall be  directed  to the  attention  of the\nPresident with a copy to the Secretary of the Company,  or to such other address\nas  either  party  may have  furnished  to the other in  writing  in  accordance\nherewith,  except that notice of change of address shall be effective  only upon\nreceipt.\n\n         7.  Miscellaneous.  No  provision  of this  Agreement  may be modified,\nwaived or discharged unless such waiver,  modification or discharge is agreed to\nin  writing  and  signed by you and the  President  of the  Company No waiver by\neither  party  hereto at any time of any breach by the other party hereto of, or\ncompliance with, any condition or provision of this Agreement to be performed by\nsuch other party shall be deemed a waiver of similar or dissimilar provisions or\nconditions  at the same or at any prior or  subsequent  time.  No  agreements or\nrepresentations,  oral or  otherwise,  express or implied,  with  respect to the\nsubject matter hereof have been made by either party which are not expressly set\nforth  in  this  Agreement.  The  validity,  interpretation,   construction  and\nperformance  of this  Agreement  shall be  governed  by the laws of the State of\nDelaware  without  regard to  conflict  of law  provisions.  All  references  to\nsections  of the  Exchange  Act or the Code shall be deemed also to refer to any\nsuccessor provisions to such sections. Any payments provided for hereunder shall\nbe paid net of any applicable withholding required under federal, state or local\nlaw. The obligations of the Company under Section 4 shall survive the expiration\nof the term of this Agreement.\n\n         8.  Validity.  The invalidity or  unenforceability  of any provision of\nthis  Agreement  shall not affect the  validity or  enforceability  of any other\nprovision of this Agreement, which shall remain in full force and effect.\n\n         9.   Counterparts.   This   Agreement   may  be   executed  in  several\ncounterparts,  each of which shall be deemed to be an original  but all of which\ntogether will constitute one and the same instrument.\n\n         10.  Arbitration.  Any  dispute  or  controversy  arising  under  or in\nconnection  with this Agreement  shall be settled  exclusively by arbitration in\nWashington,  DC in  accordance  with  the  rules  of  the  American  Arbitration\nAssociation then in effect. Judgment may be entered on the arbitrator's award in\nany court having jurisdiction;  provided, however, that you shall be entitled to\nseek specific performance of your right to be paid until the Date of Termination\nduring the pendency of any dispute or controversy arising under or in connection\nwith this Agreement.\n\n         If this letter sets forth our agreement on the subject  matter  hereof,\nkindly  sign and return to the Company the  enclosed  copy of this letter  which\nwill then constitute our agreement on this subject.\n\nSincerely,\nDynCorp\n\n\/s\/  Paul V. Lombardi\nPaul V. Lombardi\nPresident and Chief Executive Officer\n\nAgreed to this 6th day of May, 1998\n\nBy:  \/s\/ Robert B. 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