EXHIBIT V
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of November 1, 2000,
by and between VSE Corporation, a Delaware corporation ("Employer"), and ▇▇▇▇▇
▇. ▇▇▇▇ ("Employee");
WHEREAS, Employer desires to retain the services of Employee as its
president and chief operating officer; and
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; and
WHEREAS, in the current business climate of takeovers and acquisitions,
Employee may be concerned about the continuation of his employment and his
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
November 1, 2000, and shall continue until December 31, 2003, except as
otherwise provided in Section 7. If the term of Employee's employment hereunder
shall have continued until December 31, 2003, 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
Employer 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 as Employer's president and chief
operating officer, and the Board shall reappoint Employee as Employer's
president and chief operating officer, and Employee shall perform the duties of
this position, as assigned to him by the chairman. Employer agrees that Employee
will be assigned only duties of the type, nature and dignity normally assigned
to the president and chief operating officer of 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 he had on the date hereof, and he
shall report to the chairman and chief executive officer.
(b) Full-Time Basis
During the Term, Employee shall devote, on a full-time basis, his services,
skills and abilities to his 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 $170,040 per annum, payable in installments in accordance with Employer's
policy governing salary payments to senior officers generally ("Base Salary").
Effective January 1 of every year during the Term, Employee's compensation,
including Base Salary, will be subject to the Board's review, provided that, the
Base Salary shall not be less than $170,040 per annum.
(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 by the
Board or its Compensation Committee ("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) Plan, and any stock grant, 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 by
the Board. These fringe benefits and perquisites shall include holidays, group
health insurance, short-term and long-term disability insurance, and life
insurance, vehicle allowances, and supplemental executive health care benefits.
Also, during the Term, Employee shall be entitled to 20 days paid leave per
annum and to be reimbursed for the costs of physical examinations up to $1,000
per annum.
5. Expenses and Other Perquisites. Employer shall reimburse Employee for
all reasonable and proper business expenses incurred by him during the Term in
the performance of his duties hereunder, in accordance with Employer's customary
practices for senior officers, and provided such business expenses are
reasonably documented. Also, during the Term, Employer shall continue to
provide Employee with an office and suitable office fixtures, telephone
services, and secretarial assistance of a nature appropriate to Employee's
position and status.
6. Exclusive Services, Confidential Information, Business Opportunities
and Non-Solicitation.
(a) Exclusive Services
(i) During the Term, Employee shall at all times devote his 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 Board's written
consent 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 Board's prior
written consent, 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 his 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 governmental 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 him as a consequence of or through his 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 circumstances 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 he 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 termination, 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 his
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 he 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 contrary to Employer 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 Chairman or 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 Chairman or 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 Chairman or 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 Spplemental 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 one (1) times the total amount of Employee's Base Salary payable
hereunder, based upon the amount in effect as of the effective Termination
Date. In such event, 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 for the first 18
months after the Termination Date or longer if permitted under Employer's
policies and procedures; (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 Supplemental 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 his 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 his
Base Salary then in effect for one full year following the date of death or
disability.
(c) By Employee
(i) Employee may, in his 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 standard medical
and hospitalization benefits in accordance with Employer's policy.
(ii) If, during the Term, a Change of Control (as defined below) occurs,
Employee may, in his sole discretion, terminate the Term upon 30 days' 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 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 to (a)
payment on or prior to the Termination Date of 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;
(b) continue the medical and hospitalization benefits in accordance with
Employer's policy and to payment of all compensation and other benefits that
shall have accrued as of the Termination Date, as described in Section 7(a)(ii)
(l); 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.
(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 exchange for stock of such
other corporation), Employer's shareholders 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.
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, telex, 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 Chief Executive Officer, c/o VSE
Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ 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
/s/ ▇. ▇. ▇▇▇▇▇▇
By: ________________________________
▇. ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
Date: November 9, 2000
▇▇▇▇▇ ▇. ▇▇▇▇
an individual
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
By: ________________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Date: November 9, 2000