Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of March 10, 2004,
by and between VSE Corporation, a Delaware corporation ("Employer"), and Thomas
G. Dacus ("Employee");
WHEREAS, Employee currently is employed by Employer as Director of the
Federal Group,
WHEREAS, Employee has rendered many years of good and valuable service to
the Employer and has contributed greatly to Employer' s growth and success;
WHEREAS, Employer wishes to induce Employee to relocate to the Washington,
DC area and 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 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
the date hereof and shall continue until December 31, 2006-, except
as otherwise provided in Section 7. If the term of Employee's
employment hereunder shall have continued until December 31, 2006,
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 or the Employer, 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 Director
of the Federal Group. Employer agrees that Employee will be
assigned only duties of the type, nature and dignity normally
assigned to the Group Directors 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 president
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 his current annual rate,
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 review.
(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 60 days after the end of the fiscal year 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 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 30 days paid
leave per annum and to accrue unused leave from year to year 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) During the period of his employment and for a one (1)
year period commencing with the effective date of the
termination of Employee's employment with the Company
for any reason and under any circumstances, Employee
shall not, without the prior written consent of the
Company, alone or with others, whether as an owner,
stockholder, partner, lender, investor, employee,
consultant, contractor, subcontractor or in any other
capacity, directly or indirectly: (a) engage, within a
fifty (50) mile radius of any office of the Company, in
any business activity that is competitive with the
business of the Company or otherwise in conflict with or
contrary to the interests of the Company, including
without limitation, the business of performing
engineering and management services for the United
States Government, and services within the tele-
communications technologies industries, all as such
businesses and services are more particularly described
in the then most recent "VSE Corporation Annual Report",
(b) solicit any person or entity who then is or was at
any time during Employee's employment, a customer of the
Company (including without limitation any person or
entity who was at any time during Employee's employment
solicited to be a customer of the Company where Employee
was directly or indirectly involved in such
solicitation) to cease doing business as to curtail
business with the Company, or (c) solicit any person who
then is or was in the preceding six (6) months an
employee or independent contractor of the Company to end
his or her relationship with the Company or to work for
any other person or entity as an employee or independent
contractor.
(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 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 President 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 President/CEO
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
President/CEO 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
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 one (1) times the total
amount of Employee's Annual 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. It is understood and
agreed that the expiration or non-renewal of the Term by
Employer shall not be considered a termination without
Cause for the purposes of this Agreement.
(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, it
being understood that such termination would not be
considered a termination without Cause pursuant to
Section 7(a)(ii) above. 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, and such termination
shall not be considered a termination without Cause
pursuant to Section 7(a)(ii) above. However, 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 one (1)
times the total amount of Employee's Annual 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
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,
2550 Huntington Avenue, Alexandria, Virginia 22303-1499 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: March 10, 2004 By: /s/ D. M. Ervine
______________________________
D. M. Ervine
Chairman and Chief Executive
Officer
Date: March 10, 2004 By: /s/ T. G. Dacus
______________________________
T. G. Dacus