EXHIBIT IV
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release ("Agreement"), effective
as of the expiration of the Revocation Period described in Section 14 below
(the "Effective Date"), is entered into by and between VSE Corporation ("VSE")
and Xxxxx X. Xxxx ("Xx. Xxxx").
WHEREAS, Xx. Xxxx been employed by VSE as its President and Chief
Operating Officer pursuant to an Employment Agreement made and entered into
as of November 1, 2000 (the "Employment Agreement"), and has served as a
Director of VSE since May 2, 2001; and
WHEREAS, the parties have decided that it is in their mutual best
interests to terminate their relationship; and
WHEREAS, the parties desire to amicably resolve all matters between
them on a full and final basis;
NOW, THEREFORE, in consideration of the promises contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. Resignation: Xx. Xxxx hereby resigns his position as a
Director of VSE effective February 15, 2002, and hereby resigns his employment
with VSE effective April 15, 2002 (the "Resignation Date"). Between the date
he executes this Agreement (the "Execution Date") and the Resignation Date
(the "Severance Period"), Xx. Xxxx will continue to perform the duties
assigned to him by VSE in an acceptable manner according to VSE's standards.
It is understood and agreed that during this period, VSE will expect Xx. Xxxx
to work on only a part-time as needed basis, thereby allowing him reasonable
time to search for other employment. Nevertheless, VSE may at any time during
this period for any reason relieve Xx. Xxxx of his duties, except that VSE
would in such event still be required to provide to Xx. Xxxx salary
continuation through the Resignation Date and the severance benefits set forth
in Section 2 below. On or before the Resignation Date, Xx. Xxxx will return
all property of VSE, and all copies, excerpts or summaries thereof, in his
possession, custody or control. VSE agrees that Mr. Xxxx xxx purchase as of
the Resignation Date the leased computer laptop configuration presently
assigned to him in accordance with VSE's written policies and procedures
governing such matters, subject to the lessor's concurrence.
2. Severance Benefits: During the Severance Period, VSE will
continue to pay Xx. Xxxx at his regular salary rate, less standard deductions,
in accordance with VSE's normal payroll practices. On the next regular payday
following the Resignation Date, VSE shall pay Xx. Xxxx his accrued but unpaid
paid leave through the Resignation Date. In addition, the following severance
benefits will be provided to Xx. Xxxx as indicated below:
a. VSE will engage Xx. Xxxx as a consultant for a period of one
year, commencing effective April 16, 2002, pursuant to a Consulting Agreement
which is attached hereto and incorporated by reference herein as Appendix 1
(the "Consulting Agreement"). The Consulting Agreement will provide for the
payment of an annual retainer fee to Xx. Xxxx in the amount of One Hundred
Seventy Thousand Forty Dollars ($170,040), payable in twelve equal monthly
installments promptly on presentation of an acceptable invoice for consulting
services rendered. In the event the Consulting Agreement is terminated by
either party prior to the completion of the initial one-year term, Xx. Xxxx
shall be entitled to receive a lump sum payment from VSE equal to the
remaining unpaid balance of the annual retainer fee.
b. All of the unvested options to purchase Thirty Thousand
(30,000) shares of VSE common stock granted by VSE to Xx. Xxxx pursuant to the
three Stock Option Agreements for Discretionary Option dated as of November
1, 2000, January 1, 2001, and January 1, 2002 (the "Stock Option Agreements"),
shall become immediately vested as of the Effective Date and exercisable
pursuant to the terms of the Stock Option Agreements.
c. Xx. Xxxx'x Deferred Supplemental Compensation Plan (the "DSC
Plan") account balance attributable to his voluntary contributions is 100%
vested as of the Effective Date, and subject to any adjustments under and
pursuant to the terms of the DSC Plan, shall be paid by VSE to Xx. Xxxx, net
of applicable withholding taxes, within thirty (30) days of the Effective Date
(The DSC Plan provides that for distributions determined as of January 1,
2001, or later, final distribution amounts shall be equal to the participant's
account balance as of the end of the calendar month in which the participant
terminated employment or the end of the calendar month immediately preceding
the date the participant terminated employment, whichever is less.) Xx.
Xxxx'x DSC Plan account balance attributable to VSE contributions is 0% vested
as of the Effective Date.
3. Benefits: VSE will continue to participate in VSE's benefit
plans, policies, and programs in accordance with their terms and conditions
through the Resignation Date. Thereafter, Xx. Xxxx will be permitted to
continue applicable group health and dental coverages at his own expense for up
to 18 months in accordance with the federal COBRA law, provided that VSE will
pay Xx. Xxxx'x COBRA premiums for up to twelve (12) months after the Resignation
Date or the date he obtains other coverage, whichever is sooner. Xx. Xxxx'x
participation in, entitlement to, and accrual of all other benefits from VSE
shall cease as of the Resignation Date, except that Xx. Xxxx shall have such
rights in such benefits as are required by applicable law or regularly and
customarily provided by VSE to resigning employees, including without
limitation rights to the vested contributions he has in VSE's 401(k) plan.
4. Townhouse: VSE will as promptly as possible after the Effective
Date provide thirty (30) day notice to terminate the lease for the townhouse
it leases for Xx. Xxxx'x use while he is in Alexandria. Xx. Xxxx will vacate
the townhouse as soon as possible, prior to the end of the notice period, and
leave the townhouse in the condition required by the lease.
5. Establishment of S Corporation: VSE will reimburse Xx. Xxxx up to
One Thousand Dollars ($1,000.00) for the reasonable and necessary attorneys'
fees and costs he incurs in establishing an s-corporation, through which he
will provide consulting services.
6. References: If VSE receives a request for a reference concerning
Xx. Xxxx, it will, consistent with its standard policy, provide information
on the dates of Xx. Xxxx'x employment with VSE, his title, his duties, and his
salary, and it will not provide any defamatory information concerning Xx.
Xxxx.
7. Mutual General Releases:
a. In consideration for the benefits described in Sections 2
through 6 above, and for other good and valuable consideration, which are of
greater value than to which Xx. Xxxx would normally be entitled upon
resignation, Xx. Xxxx, on behalf of himself, his heirs, executors,
administrators, agents, representatives and assigns, hereby forever releases
VSE and its affiliated entities, and its and their officers, directors,
shareholders, employees, agents, representatives and attorneys, and each of
their predecessors, successors and assigns, from any and all claims, demands,
suits, actions, causes of action, charges, liabilities or damages of any
nature whatsoever, whether known or unknown, based on any act, omission,
conduct, policy, practice, occurrence fact or incident up to and including the
Execution Date ("Claims"), including without limitation Claims relating in any
way to his employment with VSE and the termination thereof. This Release
includes without limitation Claims under the Age Discrimination in Employment
Act, as amended, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Virginia Human Rights Act, the Fairfax County Human
Rights Act, the Uniformed Services Employment and Reemployment Rights Act of
1994, the Vietnam Era Veterans Readjustment Act and other laws relating to
veterans' rights and all other federal, state or local laws; Claims for
breach of the Employment Agreement and any other contract; Claims for wrongful
discharge; Claims for emotional distress, defamation, fraud, misrepresentation
or any other personal injury or tort; Claims for unpaid compensation of any
kind; Claims relating to benefits; Claims for attorneys' fees and costs, and
all other Claims under any other federal, state or local law or cause of
action. Xx. Xxxx further agrees not to assert or file any such Claims in the
future. It is understood and agreed that this Mutual Release does not apply
to Claims for breach of this Agreement.
b. In consideration for the benefits contained herein, and for
other good and valuable consideration, which are of greater value than to
which VSE would normally be entitled, VSE and its affiliated entities, and its
and their officers, directors, shareholders, employees, agents,
representatives and attorneys, and each of their predecessors, successors and
assigns, hereby forever release Xx. Xxxx, his heirs, executors,
administrators, agents, representatives and assigns, from any and all Claims,
including without limitation claims for breach of contract, claims for breach
of fiduciary duties, claims for any torts, claims for attorneys' fees and
costs, and claims under any federal, state, or local law or cause of action
concerning employment which are based on any act, omission, conduct, policy,
practice, or occurrence as of the Execution Date. VSE further agrees not to
assert or file any such Claims in the future. It is understood and agreed
that this Mutual Release does not apply to Claims for breach of this
Agreement.
8. Reinstatement: Xx. Xxxx waives all claims for reinstatement or
employment with VSE and its affiliated entities, and its and their successors
and assigns, and he agrees never to seek such reinstatement or employment in
the future, unless VSE agrees otherwise in writing.
9. Confidentiality: Xx. Xxxx agrees to keep this Agreement, the
existence of this Agreement, and the terms of this Agreement strictly
confidential. He shall not disclose the same to any third party except his
attorneys, accountants and immediate family members (and only on the condition
that they maintain such confidentiality) and except as may be required by law
or as may be necessary to enforce or effectuate the terms of this Agreement.
If VSE discloses this Agreement or any of its terms publicly due to legal
requirements, Mr. Xxxx xxx make such disclosures to the same extent VSE does.
10. Nondisparagement: Xx. Xxxx agrees not to provide any disparaging
information relating to VSE or its past, present or future employees, officers
or directors to any person or entity who is not a party to this Agreement,
except as may be required by law or legal process, or in a proceeding to
enforce the terms of this Agreement.
11. Entire Agreement: This Agreement represents the entire
agreement of the parties, and supersedes all other agreements, discussions or
understandings of the parties, concerning the subject matter hereof. All
other express or implied agreements of the parties not expressly contained or
incorporated by reference herein are terminated and of no further force or
effect. Although the Employment Agreement is hereby terminated, Sections
6(b), (c), (d),(e),(f), (g) and (h) of said Agreement shall survive said
termination and remain in full force and effect pursuant to their terms, and
are incorporated by reference herein. This Agreement may not be modified
in any manner except in a written document signed by both parties.
12. Severability: Should any provision of this Agreement be held to
be invalid or unenforceable by a court of competent jurisdiction, it shall be
deemed severed from the Agreement, and the remaining provisions of the
Agreement shall continue in full force and effect. Moreover, the Court shall
modify the invalid provision to make it enforceable consistent with the
parties' intent to the maximum extent provided by law.
13. Disputes: All disputes over the interpretation or enforcement of
this Agreement, except for disputes under the surviving provisions of the
Employment Agreement, shall be resolved by final and binding arbitration
pursuant to the Commercial Rules of the American Arbitration Association then
in effect. The arbitration shall be held in Washington, D.C. In the event
of any litigation or arbitration to enforce this Agreement, the prevailing
party shall be awarded his or its reasonable attorneys' fees and costs.
14. Consideration: Xx. Xxxx is advised to consult with an attorney
prior to executing this Agreement. He may have a period of up to 21 days to
consider this Agreement, but he may sign it sooner if he knowingly and
voluntarily decides to do so. In addition, should he choose to sign the
Agreement, he shall have a period of seven days to revoke such signature (the
"Revocation Period"). Such revocation must be by written notice received by
VSE at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attention: Xxxxx X.
Xxxxx, within seven days of Xx. Xxxx'x signature of this Agreement. Thus,
this Agreement shall not become effective or enforceable until Xx. Xxxx signs
it and refrains from revoking it until the expiration of the Revocation
Period. If Xx. Xxxx signs this Agreement, he represents that he has had
sufficient time to consider it with an attorney of his choice, and he is
entering into it with full understanding of its meaning and effect.
15. Governing Law: This Agreement shall be construed exclusively in
accordance with the laws of the Commonwealth of Virginia, without regard to
the principles of conflicts of laws therein.
16. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be considered an original and together which
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, intending to be legally bound.
XXXXX X. XXXX VSE CORPORATION
/s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
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Signature Xxxxx X. Xxxxx
Executive Vice President
Date: February 15, 2002 Date: February 15, 2002
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