ex10-1.htm


    
      

    

    Exhibit 10.1

     

    
      EMPLOYMENT
AGREEMENT

       

      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 Charles S. Cox ("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.

       

      
        	
                1.

              	
                Purpose

              


      

       

      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.

       

      
        	
                2.

              	
                Employment

              


      

       

      Company
hereby employs you, and you accept employment with Company on the terms and
conditions set forth in this Agreement.

       

      
        	
                3.

              	
                Duties

              


      

       

      You shall
serve as Senior Vice President of the Company and President of its wholly-owned
subsidiary, VIAP, Inc.  Under the direction
of  Jeffrey  Wagonhurst, 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.

       

      
        	
                4.

              	
                Compensation

              


      

       

      Your
compensation for the services performed under this Agreement shall consist of a
Base Salary and Incentive Compensation, if any, as described below:

       

      
        	
                 
      

              	
                4.1.

              	
                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.

              


      

       

      
        	
                 
      

              	
                4.2.

              	
                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").

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

          Page
2 of 15

        

      

       

      
        	
                 
      

              	
                4.3.

              	
                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.

              


      

       

      
        	
                5.

              	
                Benefits

              


      

       

      
        	
                 
      

              	
                5.1.

              	
                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.

              


      

       

      
        	
                 
      

              	
                5.2.

              	
                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.

              


      

       

      
        	
                 
      

              	
                5.3.

              	
                Personal
      Leave: You shall be entitled to take five (5) weeks of paid
      personal leave annually.

              


      

       

      
        	
                 
      

              	
                5.4.

              	
                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).

              


      

       

      
        	
                6.

              	
                Term

              


      

       

      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.

       

      
        	
                7.

              	
                Termination
      by Company

              


      

       

      
        	
                 
      

              	
                7.1.

              	
                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.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

          Page
3 of 15

        

      

       

      
        	
                 
      

              	
                7.2.

              	
                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.

              


      

       

      
        	
                8.

              	
                Termination
      by You

              


      

       

      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.

       

      
        	
                9.

              	
                Your
      Agreement on Change in Control

              


      

       

      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.

       

      
        	
                10.

              	
                Events
      That Trigger Severance Benefits

              


      

       

      
        
          	 	
                  10.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  10.2.

                	
                  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.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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4 of 15

        

      

       

      
        
          	 	
                  10.3.

                	
                  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.

                


        

      

       

      
        	
                11.

              	
                Events
      That Do Not Trigger Severance
Benefits

              


      

       

      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.

       

      
        	
                12.

              	
                Termination
      Procedures

              


      

       

      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.

       

      
        	
                13.

              	
                Severance
      Benefits

              


      

       

      
        
          	 	
                  13.1.

                	
                  In
      General: If you become entitled to Severance Benefits under this
      Agreement, you will receive all of the Severance Benefits described in
      this Section.

                


        

      

       

      
        
          	 	
                  13.2.

                	
                  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).

                


        

      

       

      
        
          	 	
                  13.3.

                	
                  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.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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5 of 15

        

      

       

      
        
          	 	
                  13.4.

                	
                  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.

                


        

      

       

      
        
          	 	
                  13.5.

                	
                  Group
      Benefit s
Continuation:

                


        

      

       

      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).

      
         

        
          
            	 	
                    13.6.

                  	
                    Officer
      Benefits:

                  


          

        

         

        
                 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.

           

        

        
          
            	 	
                    13.7.

                  	
                    Medical
      Benefits:

                  


          

        

      

              

                           
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.

       

      
        	
                14.

              	
                Time
      for Payment

              


      

       

      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)).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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                15.

              	
                Payment
      Explanation

              


      

       

      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.

       

      
        	
                16.

              	
                Relation
      to Other Severance Programs

              


      

       

      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.

       

      
        	
                17.

              	
                Potential
      Limitations

              


      

       

      
        
          	 	
                  17.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  17.2.

                	
                  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).

                


        

      

       

      
        	
                18.

              	
                Disability

              


      

       

      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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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                19.

              	
                Effect
      of Reemployment

              


      

       

      Your
Severance Benefits will not be reduced by any other compensation you earn or
could have earned from another source.

       

      
        	
                20.

              	
                Successors

              


      

       

      
        
          	 	
                  20.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  20.2.

                	
                  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.

                


        

      

       

      
        	
                21.

              	
                Governing
      Law

              


      

       

      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.

       

      
        	
                22.

              	
                Claims
      (ERISA requirement)

              


      

       

      
        
          	 	
                  22.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  22.2.

                	
                  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.

                


        

      

       

      
        
          	 	
                  22.3.

                	
                  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.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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                  22.4.

                	
                  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.

                


        

      

       

      
        
          	 	
                  22.5.

                	
                  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.

                


        

      

       

      
        
          	 	
                  22.6.

                	
                  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.

                


        

      

       

      
        	
                23.

              	
                Survival

              


      

       

      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.

       

      
        	
                24.

              	
                Non-Competition
      and Non-Solicitation

              


      

       

      
        
          	 	
                  24.1.

                	
                  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.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

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                  24.2.

                	
                  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.

                


        

      

       

      
        
          	 	
                  24.3.

                	
                  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.

                


        

      

       

      
        	
                25.

              	
                Confidentiality
      and Non-Disclosure

              


      

       

      
        
          	 	
                  25.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  25.2.

                	
                  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.

                


        

      

       

      
        
          	 	
                  25.3.

                	
                  Binding
      Effect: The provisions of Section 25 shall survive the termination
      of this Agreement and your employment for any
  reason.

                


        

      

       

      
        	
                26.

              	
                Results
      and Proceeds

              


      

       

      
        
          	 	
                  26.1.

                	
                  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.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          Employment
Agreement

          Page 10
of 15

        

      

       

      
        
          	 	
                  26.2.

                	
                  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.

                


        

      

       

      
        	
                27.

              	
                Amendments

              


      

       

      This
Agreement may be modified only by a written agreement executed by you and an
authorized officer of the Company.

       

      
        	
                28.

              	
                Validity

              


      

       

      The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.

       

      
        	
                29.

              	
                Counterparts

              


      

       

      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.

       

      
        	
                30.

              	
                Giving
      Notice

              


      

       

      
        
          	 	
                  30.1.

                	
                  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.

                


        

      

       

      
        
          	 	
                  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/ Theodore
      M. Prociv	 
	 	 	Theodore
      M. Prociv	 
	 	 	President
      and CEO	 
	 	 	 	 
	 	 	 	 
	 	 	/s/
      Charles S. Cox