EMPLOYMENT AGREEMENT
Exhibit 10.1
This
Employment Agreement (this "Agreement") is made and entered into this 3rd day of
January 2009, by and between Versar, Inc., a Delaware corporation ("Company"),
its successors and assigns, and Xxxxxxx X. Xxx ("you" or
"your"). This Agreement promises you an employment relationship and
certain severance benefits during the Term of this
Agreement. Capitalized terms are defined in the last section of the
Agreement.
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1.
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Purpose
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The
Company considers a sound and vital management team to be
essential. The Company desires to assure itself of your services,
which you are willing to provide. Further, management personnel who
become concerned about the possibility that the Company may undergo a Change in
Control may terminate employment or become distracted. Accordingly,
the Company has determined that appropriate steps should be taken to minimize
the distraction executives may suffer from the possibility of a Change in
Control. One step is to enter into this Agreement with
you.
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2.
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Employment
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Company
hereby employs you, and you accept employment with Company on the terms and
conditions set forth in this Agreement.
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3.
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Duties
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You shall
serve as Senior Vice President of the Company and President of its wholly-owned
subsidiary, VIAP, Inc. Under the direction
of Xxxxxxx Xxxxxxxxxx, Senior Vice President of the
Program Management Group, you shall perform all assigned duties reasonably
required of an employee in such positions, shall personally, diligently, and
faithfully perform these duties to the best of your ability, on a full-time and
exclusive basis.
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4.
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Compensation
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Your
compensation for the services performed under this Agreement shall consist of a
Base Salary and Incentive Compensation, if any, as described below:
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4.1.
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Base
Salary: You shall receive the base salary approved by Company's
Compensation committee of the Board of Directors, payable in regular
bi-weekly installments (the "Base Salary"). Your initial base
salary is $390,000. The Base Salary will be reviewed annually by the
Compensation Committee in accordance with standard salary review
procedures in effect from time to time for Management officers of
Company. In no event shall the Base Salary be less than the
Base Salary being paid to you on the date of this Agreement, unless you
agree to a reduction. In the event that your
employment with Company is terminated as provided in this Agreement, the
Base Salary shall be deemed your then current Base Salary or $390,000,
whichever is greater.
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4.2.
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Incentive
Compensation: In addition to the Base Salary, you shall be eligible
to earn incentive compensation in the form of cash or securities under
bonus and incentive programs as may be in effect from time to time for
management officers of Company generally ("Incentive
Compensation").
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4.3.
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Withholding:
You agree and acknowledge that Company will withhold from your
compensation all taxes and other amounts, which Company is required by law
to withhold, including without limitation (i) federal income taxes, (ii)
state income taxes, (iii) county, city or other local income taxes, and
(iv) social security taxes.
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5.
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Benefits
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5.1.
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Generally:
You shall be entitled to receive any and all benefits made available to
executive officers of Company generally, including the Executive Medical
Plan and such other benefits as the Board of Directors in its discretion
may make available to you from time to
time.
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5.2.
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Insurance:
You shall be eligible to participate in all medical, hospitalization,
dental, life, disability and other insurance plans as are in effect from
time to time for executive officers of Company
generally.
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5.3.
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Personal
Leave: You shall be entitled to take five (5) weeks of paid
personal leave annually.
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5.4.
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Reimbursement
for Reasonable Business Expenses: Company shall reimburse you for
customary and reasonable expenses incurred in performing your duties
pursuant to this Agreement, in accordance with Company's then current
reimbursement policy (including appropriate itemization and substantiation
of expenses incurred).
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6.
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Term
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Subject
to early termination of this Agreement in accordance with Section 7 or 8 below,
the term of your employment hereunder shall commence as of January 3, 2009, and
shall continue for a period of one (1) year. You agree and
acknowledge that Company has no obligation to renew this Agreement or to
continue your employment after the one-year term.
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7.
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Termination
by Company
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7.1.
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Termination
with Cause: Company shall be entitled to terminate your employment
and services immediately upon written notice to you, except in the case of
death, specifying the date of termination in the event that: (i) you fail
to carry out assigned duties after being given prior warning and an
opportunity to remedy the failure; or (ii) you breach any material term of
this Agreement; (iii) you engage in fraud, dishonesty, willful misconduct,
gross negligence or breach of fiduciary duty (including without limitation
any failure to disclose a conflict of interest), in the performance of
your duties hereunder; (iv) you are convicted of a felony or crime
involving moral turpitude; (v) you suffer a permanent and total disability
which for at least six months prevents your performance of your duties
hereunder if such permanent disability is covered by Workers Compensation
or long term disability insurance, or both; or (vi) if you die. For eight
weeks following Company's termination of this Agreement with cause
pursuant to this Section 7.1, Company shall continue to pay your Base
Salary in effect as of the date of termination and make available the
benefits set forth in Section 5. All other obligations of
Company hereunder shall cease as of the date of
termination.
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7.2.
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Termination
Without Cause: Company shall be entitled to terminate your
employment and services without cause upon, not less than sixty (60) days,
prior written notice to you specifying the date of
termination. If Company terminates your employment without
cause, at any time during the one-year term, Company shall give you a lump
sum payment equivalent of one year’s Base Salary, any Incentive
Compensation to which you would have been entitled as of the date of
termination, any deferred compensation, any accrued personal leave and
will continue to make available the benefits set forth in Section 5 for
twelve (12) months. All other obligations of Company hereunder
shall cease as of the date of termination. Notwithstanding the
foregoing, during the eighteen months immediately following Company's
termination of this Agreement without cause, you shall be entitled to the
vesting of any and all stock options issued by Company pursuant to its
Incentive Stock Option Plan in accordance with the vesting schedule in
your grant of options, and vesting of any and all other options, warrants,
or shares, and you shall have the right to exercise such options or
warrants, or purchase such shares under the same terms and conditions
applicable to you prior to
termination.
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8.
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Termination
by You
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You may
terminate your employment and services at any time and for any reason by giving
Company at least thirty (30) days' prior written notice specifying the date of
termination. If you terminate the Agreement in accordance with this
Section 8.1, then from the date of your notice to the date of termination
(provided that during this notice period, Company does not terminate you for
cause under Section 7.1 above), Company shall continue to pay you the Base
Salary in effect as of the date of termination, and any Incentive Compensation
to which you would have been entitled as of the date of termination, any
deferred compensation, any accrued personal leave and continue to make available
the benefits set forth in Section 5 until the date of termination. All other
obligations of Company hereunder shall cease as of the date of
termination.
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9.
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Your
Agreement on Change in Control
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If one or
more Potential Changes in Control occur during the Term of this Agreement, you
agree not to resign for at least six full calendar months after a Potential
Change in Control occurs, except as follows: (a) you may resign after a Change
in Control occurs; (b) you may resign if you are given Good Reason to do so; and
(c) you may terminate employment on account of retirement on or after age 65 or
because you become unable to work due to serious illness or injury.
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10.
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Events
That Trigger Severance Benefits
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10.1.
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Termination
After a Change in Control: You will receive Severance Benefits
under this Agreement if, during the Term of this Agreement and after a
Change in Control has occurred, your employment is terminated by the
Company without Cause (other than on account of your Disability or death)
or you resign for Good
Reason.
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10.2.
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Termination
After a Potential Change in Control: You also will receive
Severance Benefits under this Agreement if, during the Term of this
Agreement and after a Potential Change in Control has occurred but before
a Change in Control actually occurs, your employment is terminated by the
Company without Cause or you resign for Good Reason, but only if either:
(i) you are terminated at the direction of a Person who has entered into
an agreement with the Company that will result in a Change in Control; or
(ii) the event constituting Good Reason occurs at the direction of such
Person.
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10.3.
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Successor
Fails to Assume This Agreement: You also will receive Severance
Benefits under this Agreement if, during the Term of this
Agreement, a successor to the Company fails to assume this Agreement, as
provided in Section 20.1.
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11.
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Events
That Do Not Trigger Severance
Benefits
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You will
not be entitled to Severance Benefits if your employment ends because you are
terminated for Cause or because of Disability
or because you
resign without Good Reason, retire, or die. Except
as provided in Section 10.3, you will not be entitled to Severance Benefits
while you remain protected by this Agreement and remain employed by the Company,
its affiliates, or their
successors.
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12.
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Termination
Procedures
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If you
are terminated by the Company after a Change in Control and during the Term of
this Agreement, the Company shall provide you with 30 days' advance written
notice of your termination, unless you are being terminated for
Cause. The notice will indicate why you are being terminated and,
will set forth in reasonable detail, the facts and circumstances claimed to
provide a basis for your termination. If you are being terminated for
Cause, your notice of termination will include a copy of a resolution duly
adopted by the affirmative vote of not less than 51 % of the entire membership
of the Board (at a meeting of the Board called and held for the purpose of
considering your termination (after reasonable notice to you and an opportunity
for you and your counsel to be heard before the Board)) finding that, in the
good faith opinion of the Board, Cause for your termination exists and
specifying the basis for that opinion in detail. If you are purportedly
terminated without the notice required by this Section, your termination shall
not be effective.
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13.
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Severance
Benefits
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13.1.
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In
General: If you become entitled to Severance Benefits under this
Agreement, you will receive all of the Severance Benefits described in
this Section.
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13.2.
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Lump-Sum
Payment in Lieu of Future Compensation: In lieu of any further cash
compensation for periods after your employment ends, you will be paid a
cash lump sum equal to two times your Base Salary in effect when your
employment ends or,
if higher, in effect immediately before the Change in Control,
Potential Change in Control or Good Reason event for which you terminate
employment. In addition, and without duplication, you will be
paid a cash lump sum equal to 2 times the higher of the amounts paid to
you (if any) under any existing bonus or incentive plans in the calendar
year preceding the calendar year in which your employment ends or in the
calendar year preceding the calendar year in which the Change in Control
occurred (or in which the Potential Change in Control occurred, if
benefits are payable under Section 10.2
hereof).
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13.3.
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Incentive
Compensation and Options: The Company will pay you a cash lump sum
equal to any unpaid Incentive Compensation (that is not otherwise paid to
you) that you have been allocated or awarded under any existing bonus or
incentive plans for measuring periods
completed before you became entitled to Severance Benefits under this
Agreement. All unvested options to purchase Company common
stock will immediately vest and remain exercisable for the longest
period of time permitted under the applicable stock option plan. All
unvested restricted stock awards awarded to you will immediately
vest.
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13.4.
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Group
Insurance Benefit Continuation: During the period that begins when
you become entitled to Severance Benefits under this Agreement and ends on
the last day of the 18th calendar month beginning thereafter, the Company
shall provide, at no cost to you or your spouse or dependents, health and
dental insurance benefits (or substantially similar benefits) it was
providing to you and your spouse and dependents immediately before you
became entitled to Severance Benefits under this Agreement (or immediately
before a benefit reduction that constitutes Good Reason, if you terminate
employment for that Good Reason). These benefits shall be treated as
satisfying the Company's COBRA obligations. After benefit
continuation under this subsection ends, you and your spouse and
dependents will be entitled to any remaining COBRA
rights.
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13.5.
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Group
Benefit s
Continuation:
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During
the period that begins when you become entitled to Severance Benefits under this
Agreement and ends on the last day of the 24th
calendar month beginning thereafter, The Company shall provide, at no cost to
you or your spouse or dependents, the life, disability and accident benefits (or
substantially similar benefits) it was providing to you and your spouse or
dependents before you became entitled to Severance Benefits under this Agreement
(or immediately before a benefit reduction that constitutes Good Reason, if you
terminate employment for that Good Reason).
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13.6.
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Officer
Benefits:
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In
lieu of the medical and tax accounting benefits available to Versar Officers,
you will be entitled to a lump sum payment of
$16,000.00.
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13.7.
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Medical
Benefits:
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Versar provides certain medical benefits to retired CEO’s and Vice Presidents.
If you become entitled to Severance Benefits under this Agreement, then you are
deemed to have retired and the Company shall provide, at no cost to you,
continued medical benefits it was providing you and your spouse and dependents
immediately before you became entitled to Severance Benefits under this
Agreement.
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14.
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Time
for Payment
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You will
be paid your cash Severance Benefits within five days after you become entitled
to Severance Benefits under this Agreement (e.g., within five days following
your termination of employment). If the amount you are due cannot be
finally determined within that period, you will receive the minimum amount to
which you are clearly entitled, as estimated in good faith by the
Company. The Company will pay the balance you are due (together with
interest at the rate provided in Internal Revenue Code Section 1274(b) (2) (B))
as soon as the amount can be determined, but in no event later than 30 days
after you terminate employment. If your estimated payment exceeds the
amount you are due, the excess will be a loan to you, which you must repay to
the Company within five business days after demand by the Company (together with
interest at the rate provided in Code Section 1274(b)(2)(B)).
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15.
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Payment
Explanation
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When
payments are made to you, the Company will provide you with a written statement
explaining how your payments were calculated and the basis for the
calculations. This statement will include any opinions or other
advice the Company has received from auditors or consultants as to the
calculation of your benefits. If your benefit is affected by the
golden parachute limitation in Section 17, the Company will provide you with
calculations relating to that limitation and any supporting materials you
reasonably need to permit you to evaluate those calculations.
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16.
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Relation
to Other Severance Programs
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Your
Severance Benefits under this Agreement are in lieu of any severance or similar
benefits that may be payable to you under any other employment agreement or
other arrangement; to the extent any such benefits are paid to you, they shall
be applied to reduce the amount due under this Agreement. This
Agreement constitutes the entire agreement between you and the Company and its
affiliates with respect to such benefits.
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17.
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Potential
Limitations
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17.1.
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Golden
Parachute Limitation: Your aggregate payments and benefits under
this Agreement and all other contracts, arrangements, or programs shall
not exceed the maximum amount that may be paid without triggering golden
parachute penalties under Section 280G and related provisions of the
Internal Revenue Code, as determined in good faith by the Company's
independent auditors. The preceding sentence shall not apply to
the extent the shareholder approval requirements of Code Section 280G (b)
(5) are satisfied. If your benefits must be reduced to avoid
triggering such penalties, your benefits will be reduced in the priority
order you designate or, if you fail promptly to designate an order, in the
priority order designated by the Company. If an amount in
excess of the limit set forth in this Section is paid to you, you must
repay the excess amount to the Company on demand, with interest at the
rate provided in Code Section 1274(b)(2)(B). You and the
Company agree to cooperate with each other reasonably in connection with
any administrative or judicial proceedings concerning the existence or
amount of golden parachute penalties on payments or benefits you
receive.
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17.2.
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Section
162(m) Limitation: To the extent payments or benefits under this
Agreement would not be deductible under Code Section 162(m) if made or
provided when otherwise due under this Agreement, they shall be made or
provided later, immediately after Section 162(m) ceases to preclude their
deduction, with interest thereon at the rate provided in Code Section
1274(b)(2)(B).
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18.
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Disability
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Following
a Change in Control, while you are absent from work as a result of physical or
mental illness, the Company will continue to pay you your full salary and
provide you all other compensation and benefits payable to you under the
Company's compensation or benefit plans, programs, or
arrangements. These payments will stop if and when your employment is
terminated by the Company for Disability or at the end of the Term of this
Agreement, whichever is earlier. Severance Benefits under this
Agreement are not payable if you are terminated because of your
Disability.
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19.
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Effect
of Reemployment
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Your
Severance Benefits will not be reduced by any other compensation you earn or
could have earned from another source.
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20.
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Successors
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20.1.
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Assumption
Required: In addition to obligations imposed by law on a successor
to the Company, during the Term of this Agreement the Company will require
any successor to all or substantially all of the business or assets of the
Company expressly to assume and to agree to perform this Agreement in the
same manner and to the same extent that the Company was required to
perform. If the Company fails to obtain such an assumption and
agreement before the effective date of a succession, you will be entitled
to Severance Benefits as if you were terminated by the Company without
Cause on the effective date of that
succession.
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20.2.
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Heirs
and Assigns: This Agreement will inure to the benefit of, and be
enforceable by, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and
legatees. If you die while any amount is still payable to you
under this Agreement, that amount will be paid to the executor, personal
representative, or administrator of your
estate.
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21.
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Governing
Law
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This
Agreement creates a "top hat" employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, and it shall be interpreted,
administered, and enforced in accordance with that law; the Company is the "plan
administrator.” To the extent that state law is applicable, the
statutes and common law of the State of Virginia (excluding its choice of laws
statutes or common law) shall apply.
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22.
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Claims
(ERISA requirement)
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22.1.
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When
Required Attorneys' Fees: You do not need to present a formal claim
to receive benefits payable under this Agreement. However, if
you believe that your rights under this Agreement are being violated, you
must file a formal claim with the Company in accordance with the
procedures set forth in this Section. The Company will pay your
reasonable attorneys' fees and related costs in enforcing your rights
under this Agreement.
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22.2.
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Initial
Claim: Your claim must be presented to the Company in
writing. Within 30 days after receiving the claim, a claims
official appointed by the Company will consider your claim and issue his
or her determination thereon in writing. With your consent, the
initial claim determination period can be extended further. If
you can establish that the claims official failed to respond to your claim
in a timely manner, you may treat the claim as having been denied by the
claims official.
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22.3.
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Claim
Decision: If your claim is granted, the benefits or relief you are
seeking will be provided. If your claim is wholly or partially
denied, the claims official shall, within three days, provide you with
written notice of the denial, setting forth, in a manner calculated to be
understood by you: (i) the specific reason or reasons for the denial; (ii)
specific references to the provisions on which the denial is based; (iii)
a description of any additional material or information necessary for you
to perfect your claim, together with an explanation of why the material or
information is necessary; and (iv) an explanation of the procedures for
appealing denied claims. If you establish that the claims official has
failed to respond to your claim in a timely manner, you may treat the
claim as having been denied by the claims
official.
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22.4.
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Appeal
of Denied Claims: You may appeal the claims official's denial of
your claim in writing to an appeals official designated by the Company
(which may be a person, committee, or other entity) for a full and fair
appeal. You must appeal a denied claim within fifteen days
after your receipt of written notice denying your claim, or within 60 days
after such written notice was due, if the written notice was not
sent. In connection with the appeals proceeding, you (or your
duly authorized representative) may review pertinent documents and may
submit issues and comments in writing. You may only present
evidence and theories during the appeal that you presented during the
initial claims stage, except for information the claims official requested
you to provide to perfect the claim. You will irrevocably waive
any theories you do not in good faith pursue through the appeal stage,
such as by failing to file a timely appeal
request.
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22.5.
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Appeal
Decision: The decision by the appeals official will be made within
10 days after your appeal request, unless special circumstances require an
extension of time, in which case the decision will be rendered as soon as
possible, but not later than fifteen days after your appeal request,
unless you agree to a greater extension of that deadline. The
appeal decision will be in writing, set forth in a manner calculated to be
understood by you; it will include specific reasons for the decision, as
well as specific references to the pertinent provisions of this Agreement
on which the decision is based. If you do not receive the
appeal decision by the date it is due, you may deem your appeal to have
been denied.
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22.6.
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Procedures:
The Company will adopt procedures by which initial claims and appeals will
be considered and resolved; different procedures may be established for
different claims. All procedures will be designed to afford you
full and fair consideration of your
claim.
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23.
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Survival
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This
Agreement shall survive any Changes in Control, change in management of Company,
and any merger, consolidation, reorganization, sale of assets or sale of stock
of Company.
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24.
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Non-Competition
and Non-Solicitation
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24.1.
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Prohibition:
You acknowledge that Company's business and employee relationships are
maintained at great expense and effort. You further acknowledge
that, by virtue of your employment under this Agreement, you will have an
extensive and unique opportunity to establish and maintain valuable
contacts with Company's customers and employees and the opportunity both
during and after employment to unfairly compete with Company, its
subsidiaries and affiliates. Therefore, you agree that during
the term of your employment with Company and for a period of the balance
of the term of this Agreement or twelve (12) months following termination
of such employment, whichever is greater, you shall not compete with the
business of Company, its subsidiaries or affiliates. For the
purpose of this Agreement, activities among others which shall be deemed
competitive include: (i) encouraging any customers of Company, its
subsidiaries or affiliates to become a customer of you or of any other
person except through normal competitive bidding; or (ii) encouraging any
employee of Company, its subsidiaries or affiliates to become your
employee or employee of any other
person.
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Employment
Agreement
Page
9 of 15
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24.2.
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Remedies
for Breach: You acknowledge that the damage to Company, its
subsidiaries and affiliates resulting from a breach of this Section 24 may
cause irreparable injury. Therefore, in the event of any such
breach, Company, its subsidiaries and affiliates shall be entitled to seek
such remedies as are available at law or equity to restrain and enjoin you
from continuing to violate the provisions of this Section
24.
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24.3.
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Binding
Effect: In the event that any part of this Section 24 shall be
deemed by a court of competent jurisdiction to be in violation of
applicable law for any reason whatsoever, than such part shall not be
deemed to be void, but shall be deemed to be modified so as to be valid
and enforceable, and the remaining provisions of this Section 24 or of
this Agreement shall not be affected. The provisions of Section
24 shall survive the termination of your employment for any
reason.
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25.
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Confidentiality
and Non-Disclosure
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25.1.
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Prohibition:
You understand and acknowledge that the success of Company's business is
dependent upon the secrecy and non-disclosure of many confidential plans,
procedures and methods. Therefore, you agree that you will not
directly or indirectly disclose to any person or use for your own purpose
any confidential information, records, data, formulae, specifications,
customer lists, ideas, inventions, plans concerning business or product
development, business procedures, contract proposals or such proprietary
information or other trade secrets of Company, its subsidiaries or
affiliates ("Confidential Information") provided such information is
marked as such or you have reason to know it is confidential. Upon
termination of this Agreement and employment hereunder, you agree to
promptly deliver to Company all papers, records, files, other documents
and Confidential Information belonging to Company, its subsidiaries and
affiliates and to not retain any copies
thereof.
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25.2.
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Remedies
for Breach: You acknowledge that the damage to Company, its
subsidiaries and affiliates resulting from a breach of this Section 25 may
cause irreparable injury. Therefore, in the event of any such
breach, Company, its subsidiaries and affiliates shall be entitled to seek
such remedies as are available at law or equity to restrain and enjoin you
from continuing to violate the provisions of this Section
25.
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25.3.
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Binding
Effect: The provisions of Section 25 shall survive the termination
of this Agreement and your employment for any
reason.
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26.
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Results
and Proceeds
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26.1.
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Ownership:
As your employer, Company shall own all rights in and to the results and
proceeds connected with or arising out of, directly or indirectly, your
services hereunder. You hereby assign to Company all right,
title and interest in and to all intellectual property, discoveries and
trade secrets which you may solely or jointly conceive, design, develop,
create or suggest or cause to be conceived, designed or developed or
created during the term of your employment by Company, which relate to
your employment or Company's business. For purposes of this
Agreement, the term "intellectual property" shall include, without
limitation, any ideas, concepts, literary material, designs, drawings,
illustrations, photographs, patentable ideas and musical
compositions. To the extent that any such intellectual property
may be protected pursuant to applicable copyright law, you acknowledge
that such property is a work for hire within the meaning of such
law.
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Employment
Agreement
Page 10
of 15
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26.2.
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Further
Assurances: You hereby agree to execute any documents necessary to
evidence Company's proprietary interest in any intellectual property,
discovery or trade secrets referred to Section 26.1 above. In
the event Company is unable, for any reason whatsoever, to secure your
signature to any lawful and necessary document required to apply for
protection of, or enforce any rights with respect to, any copyrights,
trademark, patent or other proprietary rights, you hereby irrevocably
designate and appoint Company, and its duly authorized officers and
agents, as your agent and attorney-in-fact, whose power is coupled with an
interest, to act for and in your behalf and stead, to execute such
documents and to do all other lawful acts to protect Company's interest in
any such copyright, trademark, patent or other proprietary right with the
same legal force and effect as if executed by
you.
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27.
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Amendments
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This
Agreement may be modified only by a written agreement executed by you and an
authorized officer of the Company.
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28.
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Validity
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The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
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29.
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Counterparts
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This
Agreement may be executed in several counterparts, each of which will be deemed
an original, but all of which will constitute one and the same
instrument.
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30.
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Giving
Notice
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30.1.
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To
the Company: All communications from you to the Company relating to
this Agreement must be sent to the Company to its principal business
office in Springfield, Virginia, in writing, by registered or certified
mail, or delivered
personally.
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30.2.
|
To
You: All communications from the Company to you relating to this
Agreement must be sent to you in writing, by registered or certified mail,
or delivered personally, addressed as indicated at the end of this
Agreement.
|
|
31.
|
Conformity with the
Immigration Reform
and Control Act of 1986
|
Upon
request, you agree to furnish Company with all documentation needed to satisfy
the requirements of the Immigration Reform and Control Act of 1986.
Employment
Agreement
Page 11
of 15
|
32.
|
Waiver
|
The
failure of either party to insist, in any one or more instances, upon
performance of the terms or conditions of this Agreement shall not be construed
as a waiver or a relinquishment of any right granted hereunder or of the future
performance of any term or condition.
|
33.
|
Resignation
from Offices
|
Upon
termination of your employment, you shall be deemed to have resigned as an
officer and director of Company, its subsidiaries and affiliates, if then so
acting, as of the date of such termination.
|
34.
|
Benefit
|
This
Agreement shall be binding upon and inure to the benefit of and shall be
enforceable by and against Company, its successors and assigns and you, your
heirs, beneficiaries and legal representatives. This Agreement may be
assigned by Company but may not be assigned by you.
|
35.
|
Success
Bonus
|
The
Company’s Board of Director’s may, from time to time, direct you to identify and
proceed with a transaction to secure a sustainable future for the Company for
example, a financial partner, buyer, merger or acquisition
candidate. If so directed by the Board of Directors and you are
successful in completing such a transaction, the Company will pay you a success
fee to be negotiated based on the size of the transaction and other industry
standards.
|
36.
|
Definitions
|
|
|
(a)
|
Agreement
|
"Agreement"
means this contract, as amended.
|
|
(b)
|
Base Salary
|
"Base
Salary" means the gross amount of money paid you annually as your basic
compensation. This amount is paid in regular bi-weekly
installments.
|
|
(c)
|
Beneficial
Owner
|
"Beneficial
Owner" has the meaning set forth in Rule 13d-3 under the Exchange
Act.
|
|
(d)
|
Board
|
"Board"
means the Board of Directors of the Company.
|
|
(e)
|
Cause
|
"Cause"
means any of the following:
|
|
(1)
|
you
fail to carry out assigned duties after being given prior warning and an
opportunity to remedy the failure,
|
|
|
(2)
|
you
breach any material term of any employment
agreement with the Company,
|
|
|
(3)
|
you
engage in fraud, dishonesty, willful misconduct, gross negligence, or
breach of fiduciary duty (including without limitation any failure to
disclose a conflict of interest)in the performance of your duties for the
Company, or
|
|
|
(4)
|
you
are convicted of a felony or crime involving moral
turpitude.
|
|
|
(f)
|
Change in
Control
|
"Change
in Control" means the first of the following to occur after the date of this
Agreement:
Employment
Agreement
Page
12 of 15
|
|
(1)
|
Acquisition of Controlling
Interest: Any
Person becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of
the Company's then outstanding securities. In applying the
preceding sentence, securities acquired directly from the Company or its
affiliates, with the company's approval by or for the Person, shall not be
taken into account.
|
|
|
(2)
|
Change in Board Control:
During the term of this Agreement, individuals who constituted the
Board as of the date of this Agreement (or their approved replacements, as
defined in the next sentence) cease for any reason to constitute a
majority of the Board. A new director shall be considered an
"approved replacement" director if his or her election (or nomination for
election) was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the
period or were themselves approved replacement
directors.
|
|
|
(3)
|
Merger Approved: The
shareholders of the Company approve a merger or consolidation of the
Company with any other corporation unless: (a) the voting securities of
the Company outstanding immediately before the merger or consolidation
would continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 75% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; and (b) no Person acquires more than 25% of the combined
voting power of the Company's then outstanding
securities.
|
|
|
(4)
|
Sale of Assets: The
shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
|
|
|
(5)
|
Liquidation or
Dissolution: A complete liquidation or dissolution of
the Company
|
|
|
(6)
|
Going Private
Transaction: Any transaction or series of transactions
not covered in paragraphs (1) through (5) above the result of which is the
suspension of the Company’s duty to file reports under the Exchange Act as
a result of the remaining number of holders of the Company’s common stock
following such transaction or
series.
|
|
|
(g)
|
Code
|
"Code"
means the Internal Revenue Code of 1986, as amended.
|
|
(h)
|
Confidential
Information
|
"Confidential
Information" means any and all Company proprietary, trade secret or other
information identified in Section 25, whether written, electronic or
oral.
|
|
(i)
|
Company
|
"Company"
means Versar, Inc. and any successor to its business or assets that (by
operation of law, or otherwise) assumes and agrees to perform this
Agreement. However, for purposes of determining whether a Change in
Control has occurred in connection with such a succession, the successor shall
not be considered to be the Company.
Employment
Agreement
Page 13
of 15
|
|
(j)
|
Disability
|
"Disability"
means that, due to physical or mental illness: (i) you have been absent from the
full-time performance of your duties with the Company for substantially all of a
period of six consecutive months; (ii) the Company has notified you that it
intends to terminate you on account of Disability; and (iii) you do not resume
the full-time performance of your duties within 30 days after receiving notice
of your intended termination on account of Disability.
|
|
(k)
|
Exchange
Act
|
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
|
|
(l)
|
Good
Reason
|
"Good
Reason" means the occurrence of any of the following without
your express written consent:
|
|
(1)
|
Demotion: Your duties
and responsibilities are substantially and adversely altered from those in
effect immediately before the Change in Control (or, with respect to
Section 3(b), the Potential Change in Control), other than merely as a
result of the Company ceasing to be a public company, a change in your
title, or your transfer to an
affiliate.
|
|
|
(2)
|
Pay Cut: Your annual
Base Salary is reduced.
|
|
|
(3)
|
Relocation: Your
principal office is transferred to another location, which increases your
one-way commute to work by more than 50 miles, based on your residence
when the transfer was announced or, if you consent to the transfer, the
Company fails to pay (or reimburse you) for all reasonable moving expenses
you incur in changing your principal residence in connection with the
relocation and to indemnify you against any loss you may realize when you
sell your principal residence in connection with the relocation in an
arm's-length sale for adequate consideration. For purposes of the
preceding sentence, your "loss" will be the difference between the actual
sales price of your residence and the higher of: (a) your aggregate
investment in the residence; or (b) the fair market value of the
residence, as determined by a real estate appraiser designated by you and
satisfactory to the Company.
|
|
|
(4)
|
Breach of Promise: The
Company fails to pay you any present or deferred compensation within seven
days after it is due.
|
|
|
(5)
|
Discontinuance of Compensation
Plan Participation: The Company fails to continue, or continue your
participation in, any compensation plan in which you participated
immediately before the Change in Control (or, with respect to Section
3(b), the Potential Change in Control) that is material to your total
compensation, unless an equitable substitute arrangement has been adopted
or made available on a basis not materially less favorable to you than the
plan in effect immediately before the Change in Control (or the Potential
Change in Control, if applicable), both as to the benefits you receive and
your level of participation relative to other
participants.
|
|
|
(6)
|
Discontinuance of Benefits:
The Company stops providing you with benefits that, in the
aggregate, are substantially as valuable to you as those you enjoyed
immediately before the Change in Control (or, with respect to Section
3(b), the Potential Change in Control) under the Company’s pension,
savings, deferred compensation, life insurance, medical, health,
disability, accident, vacation, and fringe benefit plans, programs, and
arrangements.
|
Employment
Agreement
Page 14
of 15
|
|
(7)
|
Improper Termination:
You are purportedly terminated, other than pursuant to a notice of
termination satisfying the requirements of Section
5.
|
|
|
(8)
|
Notice of Prospective Action:
You are officially notified or it is officially announced that the
Company will take any of the actions listed above during the Term of this
Agreement.
|
However,
an event that is or would constitute Good Reason shall cease to be Good Reason
if: (a) you do not terminate employment within 180 days after the event occurs; (b) the Company
reverses the action or cures the default that constitutes Good Reason before you
terminate employment; or (c) you were a primary instigator of the Good Reason
event and the circumstances make it inappropriate for you to receive benefits
under this Agreement (e.g., you agree temporarily to relinquish your position on
the occurrence of a merger transaction you negotiate). If you have Good Reason
to terminate employment, you may do so even if you are on a leave of absence due
to physical or mental illness or any other reason.
|
(m)
|
Incentive
Compensation
|
"Incentive
Compensation" means the amount of cash and/or securities paid to you under all
bonus, incentive or other programs for performance adopted by Company for its
executive officers or other key employees.
|
|
(n)
|
Person
|
"Person"
has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Section 13( d) of that Act, and shall include a "group," as defined in
Rule 13d-5 promulgated thereunder. However, a Person shall not
include: (i) the Company or any of its subsidiaries; (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries; (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
|
|
(o)
|
Potential Change in
Control
|
"Potential
Change in Control" means that any of the following has occurred during the term
of this Agreement, [excluding any event that is Management Action]:
|
|
(1)
|
Agreement Signed: The
Company enters into an agreement that will result in a Change in
Control.
|
|
|
(2)
|
Notice of Intent to Seek
Change in Control: The Company or
any Person publicly announces an intention to take or to consider taking
actions that will result in a Change in
Control.
|
|
|
(3)
|
Board Declaration: With
respect to this Agreement, the Board adopts a resolution declaring that a
Potential Change in Control has
occurred.
|
|
|
(p)
|
Severance
Benefits
|
"Severance
Benefits" means your benefits under Section 13 of this Agreement.
Employment
Agreement
Page 15
of 15
|
|
(q)
|
Term of this
Agreement
|
"Term of
this Agreement" means the period that commences on January 3, 2009 and ends on
the earlier of:
|
|
(1)
|
Expiration: January 2,
2011; or
|
|
|
(2)
|
Change in Control: The last day
of the 24th calendar month beginning after the calendar month in which a
Change in Control occurred during the Term of this
Agreement.
|
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
above written.
|
|
|
/s/ Xxxxxxxx X. Xxxxxx | |
| Xxxxxxxx X. Xxxxxx | |||
| President and CEO | |||
| /s/ Xxxxxxx X. Xxx |
