AMERICAN MANAGEMENT SYSTEMS INC
EXHIBIT 10.3
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<DESCRIPTION>EXHIBIT 10.3
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<P align="right"><FONT size="2">Exhibit&nbsp;10.3
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<P><FONT size="2">October&nbsp;16, 2002
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<P><FONT size="2">William M. Purdy<BR>
2804 North Harrison Street<BR>
Arlington, VA 22207
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<P><FONT size="2">Dear Bill,
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<P><FONT size="2">This letter serves to confirm the terms and conditions associated with your
pending retirement from AMS.
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<P><FONT size="2">Your current employment arrangements will continue through your last day of
work which will be Friday, December&nbsp;27, 2002.
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<P><FONT size="2">Beginning January 2003, you will receive payments of $25,000 per month, payable
on the 15th of each month, and subject to applicable withholdings, for a period
of 12&nbsp;months; thereafter, subject to review between us. This will take the
form of an unfunded, unsecured promise to pay on the part of the Company. This
payment will be made to your estate in the event of your death. Your COBRA
rights and rights under the AMS Retiree Health Plan will be explained in a
separate letter. In addition, you will receive an on target bonus payment on
December&nbsp;30, 2002 of $360,000.
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<P><FONT size="2">The payments are in consideration of your agreement to provide consulting
services to the CEO and the Board, not to exceed 100&nbsp;days per year following
retirement. Appropriate office space and administrative support will be made
available to you during the period of your consulting services. We will also
reimburse against receipts for reasonable expenses incurred on behalf of the
Company.
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<P><FONT size="2">You may use the title of Director Emeritus, should you so choose. The use of
this title does not carry Executive Authority, nor confer any decision-making
authority on behalf of AMS.
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<P><FONT size="2">In addition, you agree to resign from the Board of Directors of AMS effective
December&nbsp;9, 2002.
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<P><FONT size="2">This agreement shall be binding on AMS and you and upon their respective heirs,
representatives, successors and assigns. If a person or entity will become a
successor to substantially all of the assets of AMS as a result of a
transaction of any kind, and AMS does not obtain an assumption in writing of
its obligations under this agreement from the successor, all remaining payments
will be paid to you immediately before the transaction occurs. AMS also will
make you whole for any golden parachute excise tax due as a result of the
accelerated payment.
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<P><FONT size="2">Bill, your years of loyal and dedicated service to the Company are very much
appreciated. I particularly appreciate your assistance to me during this past
year. Continue access to your knowledge, guidance and advice is vital to our
success as we transition to a new management team and a new AMS and return AMS
to a growth path.
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<P><FONT size="2">I am very pleased with these arrangements and wish you well in your retirement.
Please indicate your acceptance of the foregoing by signing the acceptance
copy of this letter and returning it to my attention.
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<P><FONT size="2">Yours sincerely,
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<P><FONT size="2">/s/ Alfred T. Mockett
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<P><FONT size="2">Alfred T. Mockett<BR>
Chairman and Chief Executive Officer
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        <TD valign="top" nowrap><FONT size="2">Accepted this day,</FONT></TD>
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10/16/02
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        <TD align="left" valign="top"><FONT size="2">/s/ William M. Purdy</FONT></TD>
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