Employment Agreement (2004)Full Document 

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     THIS EMPLOYMENT AGREEMENT is made and entered into as of July
1, 2004, by and between VSE Corporation, a Delaware corporation
("Employer"), and Thomas R. Loftus ("Employee");

     WHEREAS, Employee currently is employed by Employer as Senior
Vice President and Chief Financial Officer,

     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 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
               Chief Financial Officer or in a comparable or
               higher management position. Employer agrees that
               Employee will be assigned only duties of the type,
               nature and dignity normally assigned to Senior Vice
               Presidents 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, or to such other officer as the Employer
               shall designate, or as the Bylaws of the Employer
               shall otherwise require.

          (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, or on such other annual
               date as shall be determined by the Employer,
               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

          (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 officers pursuant to
          policies established from time to time by the Board.
          These fringe benefits and perquisites may include
          holidays, paid vacation, group health insurance, short-term
          and long-term disability insurance, and life insurance.

     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

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