EXHIBIT VIII
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of
December 10, 1997, by and between VSE Corporation, a
Delaware corporation ("Employer"), and Xxxxx X. Xxxxxxxx
("Employee");
WHEREAS, Employee currently is employed by Employer as a
senior corporate officer;
WHEREAS, Employee has rendered good and valuable service
to the Employer and has contributed greatly to Employer's
growth and success;
WHEREAS, Employer wishes to induce Employee to remain in
Employer's employ to prevent the significant loss which
Employer would incur if Employee were to leave and to enter
the employment of a competitor;
WHEREAS, in the current business climate of takeovers and
acquisitions, Employee may be concerned about the continuation
of employment and status and responsibilities if a Change in
Control (as defined below) occurs, and Employer is concerned
that Employee may be approached by others with employment
opportunities;
WHEREAS, Employer desires to ensure that, if a Change in
Control appears possible, Employee will be in a secure
position from which to objectively engage in any potential
deliberations or negotiations respecting such Change in
Control without fear of any direct or implied threat to
employment, status and responsibilities; and
WHEREAS, Employee desires to have the foregoing
assurances;
NOW, THEREFORE, in consideration of the mutual promises
contained herein, and for other good and valuable
consideration, the adequacy of which is hereby acknowledged,
Employer and Employee, each intending to be legally bound,
agree as follows:
1. Term. The term of Employee's employment hereunder
shall commence on the date hereof and shall continue
until January 1, 1999, except as otherwise provided
in Section 7. If the term of Employee's employment
hereunder shall have continued until January 1, 1999,
thereafter, such term of Employee's employment
hereunder shall be deemed to be renewed
automatically, on the same terms and conditions
contained herein, for successive periods of one year
each, unless and until Employee, at least 90 days
prior to the expiration of the original term or any
such extended term, shall give written notice to the
other of intent not to renew the term of Employee s
employment hereunder. All references herein to the
Term refer to the original term of Employee s
employment hereunder and all extensions thereof.
2. Duties
(a) Offices
During the Term, Employee shall serve in
Employee's current or comparable capacity, and
the Board shall renominate Employee, and
Employee shall perform duties as assigned.
Employer agrees that Employee will be assigned
only duties of the type, nature and dignity
normally assigned to someone in a comparable
position at a corporation of the size, stature
and nature of Employer. During the Term,
Employee shall have, at a minimum, the same
perquisites of office as on the date hereof, and
shall report directly to the Employer's Chief
Operating Officer.
(b) Full-Time Basis
During the Term, Employee shall devote, on a
full-time basis, Employee's services, skills and
abilities to employment hereunder, excepting
periods of vacation, illness or Disability (as
defined below), and excepting any pursuits which
do not materially interfere with duties
hereunder or present a conflict of interest with
the interests of Employer or of any subsidiary
thereof ("Subsidiary").
3. Compensation
(a) Salary
During the Term, as compensation for services
rendered by Employee hereunder, Employer shall
pay to Employee a base salary at the rate of not
less than Employee's current rate per annum,
payable in installments in accordance with
Employer's policy governing salary payments to
senior officers generally ("Base Salary"). In
February of every year during the Term,
Employee's compensation, including Base Salary,
will be subject to review, provided that, the
Base Salary shall not be less than the current
rate.
(b) Performance Bonus
Except as otherwise provided in Section 7, in
addition to the Base Salary, Employee shall be
eligible for an annual performance bonus as
determined in accordance with Company policy
("Performance Bonus"). Any Performance Bonus
payable pursuant to this Section 3(b) shall be
paid within 30 days after the end of the fiscal
period to which such Performance Bonus relates.
(c) Other Compensation Plans or Arrangements
During the Term, Employee shall also be eligible
to participate in all other currently existing
or subsequently implemented compensation or
benefit plans or arrangements available
generally to other officers or senior officers
of Employer, including Employer's Deferred
Supplemental Compensation Plan, ESOP/401(k),
and any stock option, stock purchase or similar
stock plans or arrangements.
(d) Tax Withholdings
Employer shall withhold from Employee s
compensation hereunder and pay over to the
appropriate governmental agencies all payroll
taxes, including income, social security, and
unemployment compensation taxes, required by the
federal, state and local governments with
jurisdiction over Employer.
4. Benefits. During the Term, Employee shall be
entitled to such comparable fringe benefits and
perquisites as may be provided to any or all of
Employer's senior officers pursuant to policies
established from time to time. These fringe benefits
and perquisites shall include holidays, group health
insurance, disability insurance, and life insurance.
5. Expenses and Other Perquisites. Employer shall
reimburse Employee for all reasonable and proper
business expenses incurred in the performance during
the Term of duties hereunder, in accordance with
Employer's customary practices for senior officers,
and provided such business expenses are reasonably
documented.
6. Exclusive Services, Confidential Information,
Business Opportunities and Non-Solicitation
(a) Exclusive Services
(i) During the Term, Employee shall at all
times devote full-time attention,
energies, efforts and skills to
Employer's business and shall not,
directly or indirectly, engage in any
other business activity, whether or not
for profit, gain or other pecuniary
advantages, without the written consent
of the Chief Executive Officer or Chief
Operating Officer, provided that such
prior consent shall not be required with
respect to (1) business interests that
neither compete with Employer or any
Subsidiaries nor interfere with
Employee's duties and obligations
hereunder, and (2) Employee's charitable,
eleemosynary, philanthropic or
professional association activities.
(ii) During the Term, Employee shall not,
without the prior written consent of the
Chief Executive Officer or Chief
Operating Officer, directly or
indirectly, either as an officer,
director, employee, agent, advisor,
consultant, principal, stockholder,
partner, owner or in any other capacity,
on Employee's own behalf or otherwise, in
any way engage in, represent, be
connected with or have a financial
interest in, any business which is, or to
Employee's knowledge, is about to become,
engaged in the business of providing
engineering, management, energy or
environmental services to the United
States Government or any department,
agency, or instrumentality thereof or any
state or local govern-mental agency or to
any person, corporation or other entity
(collectively a Person") with which
Employer or any Subsidiary is currently
or has previously done business or any
subsequent line of business developed by
Employee or any Subsidiary during the
Term. Notwithstanding the foregoing,
Employee shall be permitted to own
passive investments in publicly held
companies provided that such investments
do not exceed five percent of any such
company's outstanding equity.
(b) Confidential Information
During the Term and for the first 24
consecutive months after the termination of
the Term, Employee shall not disclose or use,
directly or indirectly, any Confidential
Information (as defined below). For the
purposes of this Agreement, Confidential
Information shall mean all information
disclosed to Employee, or known by Emplyee as
a consequence of or through employment with
Employer or any Subsidiary, where such
information is not generally known in the
trade or industry or was regarded or treated
as confidential by Employer or any Subsidiary,
and where such information refers or relates
in any manner whatsoever to the business
activities, processes, services or products of
Employer or its Subsidiaries. Confidential
Information shall include business and
development plans (whether contemplated,
initiated or completed), information with
respect to the development of technical and
management services, business contacts,
methods of operation, results of analysis,
business forecasts, financial data, costs,
revenues, and similar information. Upon
termination of Term, Employee shall
immediately return to Employer all of property
of Employer or any Subsidiary and Confidential
Information which is in tangible form, and all
copies thereof.
(c) Business Opportunities
(i) During the Term, Employee shall promptly
disclose to Employer each business
opportunity of a type which, based upon
its prospects and relationship to the
existing businesses of Employer or any
Subsidiary, Employer or any Subsidiary
might reasonably consider pursuing. Upon
termination of the Term, regardless of
the circum-stances thereof, Employer
shall have the exclusive right to
participate in or undertake any such
opportunity on its own behalf without any
involvement of Employee.
(ii) During the Term, Employee shall refrain
from engaging in any activity, practice
or act which conflicts with, or has the
potential to conflict with, the interests
of Employer or its Subsidiaries, and
shall avoid any acts or omissions which
are disloyal to, or competitive with
Employer or its Subsidiaries.
(d) Non-Solicitation of Employees
During the Term and for the first 24
consecutive months after termination of the
Term, Employee shall not, except in the course
of duties hereunder, directly or indirectly,
induce or attempt to induce or otherwise
counsel, advise, ask or encourage any person
to leave the employ of Employer or any
Subsidiary, or solicit or offer employment to
any person who was employed by Employer or any
Subsidiary at any time during the twelve-month
period preceding the solicitation or offer.
(e) Covenant Not To Compete
(i) If Employee voluntarily terminates the
Term, or if Employer terminates the Term
for Cause (as defined below), Employee
shall not, during the first 24
consecutive months following such
termina-tion, engage in competition with
Employer or any Subsidiary, or solicit,
from any person or entity who purchased
any then existing product or service from
Employer or any Subsidiary during
employment hereunder, the purchase of any
then existing product or service in
competition with then existing products
or services of Employer or any
Subsidiary.
(ii) For purposes of this Agreement, Employee
shall be deemed to engage in competition
with Employer if Employee shall directly
or indirectly, either individually or as
a stockholder, director, officer,
partner, consultant, owner, employee,
agent, or in any other capacity, consult
with or otherwise assist any person or
entity engaged in providing technical and
management services to any person or
entity which Employer or any Subsidiary,
during the Term, has developed or is
working to develop. Notwithstanding
anything herein to the contrary, if
Employer is in material breach of this
Agreement, the provisions of this
Section 6 shall not apply.
(f) Employee Acknowledgment
Employee hereby agrees and acknowledges that
the restrictions imposed upon by the
provisions of this Section 6 are fair and
reasonable considering the nature of
Employer's business, and are reasonably
required for Employer's protection.
(g) Invalidity
If a court of competent jurisdiction or an
arbitrator shall declare any provision or
restriction contained in this Section 6 as
unenforceable or void, the provisions of this
Section 6 shall remain in full force and
effect to the extent not so declared to be
unenforceable or void, and the court may
modify the invalid provision to make it
enforceable to the maximum extent permitted by
law.
(h) Specific Performance
Employee agrees that if Employee breaches any
of the provisions of this Section 6, the
remedies available at law to Employer would be
inadequate and in lieu thereof, or in addition
thereto, Employer shall be entitled to
appropriate equitable remedies, including
specific performance and injunctive relief.
Employee agrees not to enter into any
agreement, either written or oral, which may
conflict with this Agreement, and Employee
authorizes Employer to make known the terms of
Sections 6 and 7 hereof to any Person,
including future employers of Employee.
7. Termination
(a) By Employer
(i) Termination for Cause
Employer may for Cause (as defined below)
terminate the Term at any time by written
notice to Employee. For purposes of this
Agreement, the term Cause shall mean
any one or more of the following: (1)
conduct by Employee which is materially
illegal or fraudulent or a material
breach of Company policy; (2) the breach
or violation by Employee of any of the
material provisions of this Agreement,
provided that Employee must first be
given notice by the Board of the alleged
breach or violation and 30 days to cure
said alleged breach or violation; (3)
Employee's use of illegal drugs or abuse
of alcohol or authorized drugs which
impairs Employee's ability to perform
duties hereunder, provided that Employee
must be given notice by the Board of such
impairment and 60 days to cure the
impairment; (4) Employee's knowing and
willful neglect of duties or negligence
in the performance of duties which
materially affects Employer's or any
Subsidiary's business, provided that
Employee must first be given notice by
the Board of such alleged neglect or
negligence and 30 days to cure said
alleged neglect or negligence. If a
termination occurs pursuant to clause (1)
above, the date on which the Term is
terminated (the "Termination Date") shall
be the date Employee receives notice of
termination and, if a termination occurs
pursuant to clauses (2), (3) or (4)
above, the Termination Date shall be the
date on which the specified cure period
expires. In any event, as of the
Termination Date (in the absence of
satisfying the alleged breach or
violation within the applicable cure
period), Employee shall be relieved of
all duties hereunder and Employee shall
not be entitled to the accrual or
provision of any compensation or benefit,
after the Termination Date but Employee
shall be entitled to the provision of all
compensation and other benefits that
shall have accrued as of the Termination
Date, including Base Salary, Performance
Bonuses, paid leave benefits, Deferred
Compensation Units, Deferred Supplemental
Compensation to the extent permitted by
the plans, and reimbursement of incurred
business expenses.
(ii) Termination Without Cause
Employer may, in its sole discretion,
without Cause, terminate the Term at any
time by providing Employee with (a) 60
days prior notice thereof and (b) on or
prior to the Termination Date, a lump sum
severance compensation payment equal to
the total amount of Employee's Base
Salary payable for one (1) year
hereunder, based upon the amount in
effect as of the effective Termination
Date. If Employee has less than five
years of service with the Employer as of
the Termination Date, the lump sum
severance compensation payment shall
equal 6 months pay rather than one year
of pay. Employee shall not be entitled
to the accrual or provision of any other
compensation or benefit after the
Termination Date other than (a) the
medical and hospitalization benefits
after the Termination Date, in accordance
with COBRA or other Company policy if
covered by a Company-sponsored plan, (b)
the provision of all compensation and
other benefits that shall have accrued as
of the Termination Date, including Base
Salary, Performance Bonus, paid leave
benefits, Deferred Compensation Units,
Deferred Supple-mental Compensation and
reimbursements of incurred expenses; and
(c) all stock options or similar rights
to acquire capital stock granted by
Employer to Employee shall automatically
become vested and exercisable in whole or
in part.
(b) Death or Disability
The Term shall be terminated immediately and
automatically upon Employee's death or
Disability. The term Disability shall mean
Employee's inability to perform all of the
essential functions of Employee's position
hereunder for a period of 26 consecutive weeks
or for an aggregate of 150 work days during
any 12-month period by reason of illness,
accident or any other physical or mental
incapacity, as may be permitted by applicable
law. Employee's capability to continue
performance of Employee's duties hereunder
shall be determined by a panel composed of two
independent medical doctors appointed by the
Board and one appointed by the Employee or
designated representative. If the panel is
unable to reach a decision the matter will be
referred to arbitration in accordance with
Section 8. In the event of Employee's death or
Disability for any period of six consecutive
months, Employee (or designated beneficiary)
will be paid Base Salary then in effect for
one full year following the date of death or
disability (6 months pay rather than one year
of pay if Employee has less than five years of
service with Employer as of the final day
worked).
(c) By Employee
(i) Employee may, in Employee's sole
discretion, without cause, terminate the
Term at any time upon 60 days written
notice to Employer. If Employee exercises
such termination right, Employer may, at
its option, at any time after receiving
such notice from Employee, relieve
Employee of all duties and terminate the
Term at any time prior to the expiration
of said notice period. If the Term is
terminated by Employee or Employer
pursuant to this Section 7(c)(i),
Employee shall not be entitled to any
further Base Salary or the accrual or
provision of any compensation or benefits
after the Termination Date, except
medical and hospitalization benefits to
the extent permitted by COBRA or other
Company policy.
(ii) If, during the Term, a Change of Control
(as defined below) occurs, Employee may,
in Employee's sole discretion, terminate
the Term upon 30 days notice of
Employer. If Employee exercises such
termination right, Employer may, at its
option, at any time after receiving such
notice from Employee, relieve Employee of
all duties hereunder and terminate the
Term at any time prior to the expiration
of said notice period. If this Agreement
is terminated by Employee or Employer
pursuant to this Section 7(c)(ii),
Employee shall be entitled:
(a) to receive on or prior to the
Termination Date a lump sum
severance compensation payment equal
to two (2) times the total amount of
Employee's Base Salary payable
hereunder, based on the amount in
effect as of the Termination Date.
If Employee has less than five years
of service with the Employer as of
the date of Employee's notice to
Employer, the lump sum severance
compensation payment shall be equal
to one (1) times the total amount of
the Employee's Base Salary rather
than two (2) times the total amount;
(b) the medical and hospitalization
benefits and all compensation and
other benefits that shall have
accrued as of the Termination Date,
as described in Section 7(a)(ii)(1);
and
(c) to the automatic vesting and
exercisability in whole or in part
of all stock options or similar
rights to acquire capital stock
granted by Employer to Employee;
provided that Employee shall not be
entitled, after the Termination Date
to the accrual or provision of any
other compensation payable
hereunder, including the Performance
Bonus, but shall be permitted to
continue medical and hospitalization
benefits to the extent permitted by
COBRA or other Company policy.
(d) Change of Control
For purposes of this Section 7, a Change of
Control shall be deemed to have occurred upon
the happening of any of the following events:
(i) any person, including a group, as
such terms as defined in Sections 13(d)
and 14(d) of the Securities Exchange Act
of 1934, as amended, and the rules
promulgated thereunder (collectively the
Exchange Act"), other than a trustee or
other fiduciary holding voting securities
of Employer ("Voting Securities") under
any Employer-sponsored benefit plan,
becomes the beneficial owner, as defined
under the Exchange Act, directly or
indirectly, whether by purchase or
acquisition or agreement to act in
concert or otherwise, of 30% or more of
the outstanding Voting Securities;
(ii) a cash tender or exchange offer is
completed for such amount of Voting
Securities which, together with the
Voting Securities then beneficially
owned, directly or indirectly, by the
offeror (and affiliates thereof)
constitutes 40% or more of the
outstanding Voting Securities;
(iii) except in the case of a merger or
consolidation in which (a) Employer is
the surviving corporation and (b) the
holders of Voting Securities immediately
prior to such merger or consolidation
beneficially own, directly or indirectly,
more than 50% of the outstanding Voting
Securities immediately after such merger
or consolidation (there being excluded
from the number of Voting Securities held
by such holders, but not from the
outstanding Voting Securities, any Voting
Securities received by affiliates of the
other constituent corporation(s) in the
merger or consolidation in ex-change for
stock of such other corporation),
Employer's share-holders approve an
agreement to merge, consolidate,
liquidate, or sell all or substantially
all of Employer's assets; or
(iv) two or more directors are elected to the
Board without having previously been
nominated and approved by the members of
the Board incumbent on the day
immediately preceding such election. For
purposes of this Section 7, affiliate
of a person or another entity shall mean
a person or other entity that directly or
indirectly controls, is controlled by, or
is under common control with the person
or other entity specified.
(e) No Duty to Mitigate
If Employee is entitled to the compensation
and other benefits provided under Sections
7(a)(ii) or (c)(ii), Employee shall have no
obligation to seek employment to mitigate
damages hereunder.
(f) Other Policies
This Agreement supersedes and replaces
applicable provisions of General Policy
Memorandum (GPM) No. 31 and GPM 31-1
concerning Executive Severance Program for
Corporate Officers.
8. Arbitration. Whenever a dispute arises between the
parties concerning this Agreement or any of the
obligations hereunder, or Employee's employment
generally, Employer and Employee shall use their
best efforts to resolve the dispute by mutual
agreement. If any dispute cannot be resolved by
Employer and Employee, it shall be submitted to
arbitration to the exclusion of all other avenues
of relief and adjudicated pursuant to the American
Arbitration Association's Rules for Employment
Dispute Resolution then in effect. The decision of
the arbitrator must be in writing and shall be
final and binding on the parties, and judgment may
be entered on the arbitrator's award in any court
having jurisdiction thereof. The arbitrator s
authority in granting relief to Employee shall be
limited to an award of compensation, benefits and
unreimbursed expenses as described in Sections 3,
4, and 5 above, and to the release of Employee from
the provisions of Section 6 and the arbitrator
shall have no authority to award other types of
damages or relief to Employee, including
consequential or punitive damages. The arbitrator
shall also have no authority to award consequential
or punitive damages to Employer for violations of
this Agreement by Employee. The expenses of the
arbitration shall be borne by the losing party to
the arbitration and the prevailing party shall be
entitled to recover from the losing party all of
its own costs and attorneys fees with respect to
the arbitration. Nothing in this Section 8 shall be
construed to derogate Employer's rights to seek
legal and equitable relief in a court of competent
jurisdiction as contemplated by Section 6(h).
9. Non-Waiver. It is understood and agreed that one
party's failure at any time to require the
performance by the other party of any of the terms,
provisions, covenants or conditions hereof shall in
no way affect the first party's right thereafter to
enforce the same, nor shall the waiver by either
party of the breach of any term, provision,
covenant or condition hereof be taken or held to be
a waiver of any succeeding breach.
10. Severability. If any provision of this Agreement
conflicts with the law under which this Agreement
is to be construed, or if any such provision is
held invalid or unenforceable by a court of
competent jurisdiction or any arbitrator, such
provision shall be deleted from this Agreement and
the Agreement shall be construed to give full
effect to the remaining provision thereof.
11. Survivability. Unless otherwise provided herein,
upon termination of the Term, the provisions of
Sections 6(b), (d) and (e) shall nevertheless
remain in full force and effect.
12. Governing Law. This Agreement shall be
interpreted, construed and governed according to
the laws of the Commonwealth of Virginia, without
regard to the conflict of law provisions thereof.
13. Construction. The paragraph headings and captions
contained in this Agreement are for convenience
only and shall not be construed to define, limit or
affect the scope or meaning of the provisions
hereof. All references herein to Sections shall be
deemed to refer to Sections of this Agreement.
14. Entire Agreement. This Agreement contains and
represents the entire agreement of Employer and
Employee and supersedes all prior agreements,
representations or understandings, oral or written,
express or implied with respect to the subject
matter hereof. This Agreement may not be modified
or amended in any way unless in a writing signed by
each of Employer and Employee. No representation,
promise or inducement has been made by either
Employer or Employee that is not embodied in this
Agreement, and neither Employer nor Employee shall
be bound by or liable for any alleged
representation, promise or inducement not
specifically set forth herein.
15. Assignability. Neither this Agreement nor any
rights or obligations of Employer or Employee
hereunder may be assigned by Employer or Employee
without the other party's prior written consent.
Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of Employer
and Employee and their heirs, successors and
assigns.
16. Notices. All notices required or permitted
hereunder shall be in writing and shall be deemed
properly given if delivered personally or sent by
certified or registered mail, postage prepaid,
return receipt requested, or sent by telegram,
telelex, telecopy or similar form of
telecommunication, and shall be deemed to have been
given when received. Any such notice or
communication shall be addressed: (a) if to
Employer, to President, 0000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000-0000 or (b) if to
Employee, to the last known home address on file
with Employer, or to such other address as Employer
or Employee shall have furnished to the other in
writing.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement, to be effective as of the day and year first
above written.
VSE CORPORATION
a Delaware corporation
Date: December 10, 1997 By: /s/ X. X. XxXxxxxxx
______________________
X. X. XxXxxxxxx
President and
Chief Operating Officer
Date: December 10, 1997 /s/ X. X. Xxxxxxxx
_______________________
X. X. Xxxxxxxx
Employee
