exv10w109



 





Exhibit 10.109




CHANGE OF CONTROL

SEVERANCE AGREEMENT




42









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	1.

	 	Purpose
	 	 	45	 
	2.

	 	Your Agreement
	 	 	45	 
	3.

	 	Events That Trigger Severance Benefits
	 	 	45	 
	a.

	 	Termination After a Change in Control
	 	 	45	 
	b.

	 	Termination After a Potential Change in Control
	 	 	45	 
	c.

	 	Successor Fails to Assume This Agreement
	 	 	45	 
	4.

	 	Events That Do Not Trigger Severance Benefits
	 	 	45	 
	5.

	 	Termination Procedures
	 	 	46	 
	6.

	 	Severance Benefits
	 	 	46	 
	a.

	 	In General
	 	 	46	 
	b.

	 	Lump-Sum Payment in Lieu of Future Compensation
	 	 	46	 
	c.

	 	Incentive Compensation and Options
	 	 	46	 
	d.

	 	Group Insurance Benefit Continuation
	 	 	46	 
	7.

	 	Time for Payment
	 	 	47	 
	8.

	 	Payment Explanation
	 	 	47	 
	9.

	 	Relation to Other Severance Programs
	 	 	47	 
	10.

	 	Potential Limitations
	 	 	47	 
	a.

	 	Golden Parachute Limitation
	 	 	47	 
	b.

	 	Section 162(m) Limitation
	 	 	48	 
	11.

	 	Disability
	 	 	48	 
	12.

	 	Effect of Reemployment
	 	 	48	 
	13.

	 	Successors
	 	 	48	 
	a.

	 	Assumption Required
	 	 	48	 
	b.

	 	Heirs and Assigns
	 	 	48	 
	14.

	 	Amendments
	 	 	48	 
	15.

	 	Governing Law
	 	 	49	 
	16.

	 	Claims [ERISA requirement]
	 	 	49	 
	a.

	 	When Required; Attorneys’ Fees
	 	 	49	 
	b.

	 	Initial Claim
	 	 	49	 
	c.

	 	Claim Decision
	 	 	49	 
	d.

	 	Appeal of Denied Claims
	 	 	49	 
	e.

	 	Appeal Decision
	 	 	50	 
	f.

	 	Procedures
	 	 	50	 
	17.

	 	Limitation on Employee Rights
	 	 	50	 
	18.

	 	Validity
	 	 	50	 
	19.

	 	Counterparts
	 	 	50	 
	20.

	 	Giving Notice
	 	 	50	 
	a.

	 	To the Company
	 	 	50	 
	b.

	 	To You
	 	 	50	 
	21.

	 	Definitions
	 	 	50	 
	a.

	 	Agreement
	 	 	50	 
	b.

	 	Beneficial Owner
	 	 	50	 
	c.

	 	Board
	 	 	51	 
	d.

	 	Cause
	 	 	51	 







43









 






	 	 	 	 	 	 	 
	e.

	 	Change in Control
	 	 	51	 
	(1)

	 	Acquisition of Controlling Interest
	 	 	51	 
	(2)

	 	Change in Board Control
	 	 	51	 
	(3)

	 	Merger Approved
	 	 	51	 
	(4)

	 	Sale of Assets
	 	 	51	 
	(5)

	 	Liquidation or Dissolution
	 	 	52	 
	(6)

	 	Private Transaction
	 	 	52	 
	f.

	 	Code
	 	 	52	 
	g.

	 	Company
	 	 	52	 
	h.

	 	Disability
	 	 	52	 
	i.

	 	Exchange Act
	 	 	52	 
	j.

	 	Good Reason
	 	 	52	 
	(1)

	 	Demotion
	 	 	52	 
	(2)

	 	Pay Cut
	 	 	52	 
	(3)

	 	Relocation
	 	 	52	 
	(4)

	 	Breach of Promise
	 	 	53	 
	(5)

	 	Discontinuance of Compensation Plan Participation
	 	 	53	 
	(6)

	 	Discontinuance of Benefits
	 	 	53	 
	(7)

	 	Improper Termination
	 	 	53	 
	(8)

	 	Notice of Prospective Action
	 	 	53	 
	k.

	 	Incentive Compensation
	 	 	53	 
	l.

	 	Management Action
	 	 	54	 
	m.

	 	Person
	 	 	54	 
	n.

	 	Potential Change in Control
	 	 	54	 
	(1)

	 	Agreement Signed
	 	 	54	 
	(2)

	 	Notice of Intent to Seek Change in Control
	 	 	54	 
	(3)

	 	Board Declaration
	 	 	54	 
	o.

	 	Severance Benefits
	 	 	54	 
	p.

	 	Term of this Agreement
	 	 	54	 
	(1)

	 	Expiration
	 	 	54	 
	(2)

	 	Change in Control
	 	 	54	 







44









 






CHANGE OF CONTROL

SEVERANCE AGREEMENT




This Agreement between Lawrence W. Sinnott (“you”) and VERSAR, INC.(“Company”)
has been entered into as of March 1, 2004. This Agreement promises you
severance benefits if, following a Change of Control, you are terminated
without Cause or resign for Good Reason during the Term of this Agreement.
Capitalized terms are defined in the last section of this Agreement.





	1.	 	Purpose






The Company considers a sound and vital management team to be essential.
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 Board 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.	 	Your Agreement






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 65 or because you become unable to work
due to serious illness or injury.




	3.	 	Events That Trigger Severance Benefits






	 	a.	 	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.
	 
	 	b.	 	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.
	 
	 	c.	 	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 13(a).






	4.	 	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 on account of Disability or
because you resign without Good



45









 






Reason, retire, or die. Except as provided in Section 3(c), 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.




	5.	 	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.




	6.	 	Severance Benefits






	 	a.	 	In General






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




	 	b.	 	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 2 times
your annual 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 3(b)hereof).




	 	c.	 	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.




	 	d.	 	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 24th
calendar month



46









 






beginning thereafter, the Company shall provide, at no cost to you
or your spouse or dependents, the life, disability, accident, and
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.




	7.	 	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)).




	8.	 	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 10, 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.




	9.	 	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.




	10.	 	Potential Limitations






	 	a.	 	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



47









 






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.




	 	b.	 	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).




	11.	 	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 on account of your
Disability.




	12.	 	Effect of Reemployment






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




	13.	 	Successors






	 	a.	 	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.




	 	b.	 	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.




	14.	 	Amendments




48









 












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




	15.	 	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.




	16.	 	Claims [ERISA requirement]






	 	a.	 	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.




	 	b.	 	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.




	 	c.	 	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.




	 	d.	 	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 five 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



49









 






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.




	 	e.	 	Appeal Decision






The decision by the appeals official will be made within 60 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 ten 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.




	 	f.	 	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.




	17.	 	Limitation on Employee Rights






This Agreement does not give you the right to be retained in the service
of the Company.




	18.	 	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.




	19.	 	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.




	20.	 	Giving Notice






	 	a.	 	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.




	 	b.	 	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.




	21.	 	Definitions






	 	a.	 	Agreement






“Agreement” means this contract, as amended.




	 	b.	 	Beneficial Owner






“Beneficial Owner” has the meaning set “forth in Rule 13d-3 under
the Exchange Act.



50









 






	 	c.	 	Board






“Board” means the Board of Directors of the Company.




	 	d.	 	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.






	 	e.	 	Change in Control






“Change in Control” means the first of the following to occur after
the date of this Agreement:




	 	(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.



51









 






	 	(5)	 	Liquidation or Dissolution






A complete liquidation or dissolution of the Company.




	 	(6)	 	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




	 	f.	 	Code






“Code” means the Internal Revenue Code of 1986, as amended.




	 	g.	 	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.




	 	h.	 	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.




	 	i.	 	Exchange Act






“Exchange Act” means the Securities Exchange Act of 1934, as
amended.




	 	j.	 	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-



52









 






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.




	 	(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.




	 	k.	 	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 the Company for its executive officers and
other key employees.



53









 






	 	l.	 	Management Action






“Management Action” means any event, circumstance, or transaction
occurring during the six-month period following a Potential Change
in Control that results from the action of a Management Group.




	 	m.	 	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.




	 	n.	 	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.




	 	o.	 	Severance Benefits






“Severance Benefits” means your benefits under Section 6 of this
Agreement.




	 	p.	 	Term of this Agreement






“Term of this Agreement” means the period that commences on the
date of this Agreement and ends on the earlier of:




	 	(1)	 	Expiration






February 28, 2006; 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. After a Change in Control occurs, the
end of the Term of this Agreement shall solely be determined
under this Section 21 (p)(2).



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IN WITNESS WHEREOF, the parties have executed this Agreement as if the date set
forth above.




	 	 	 
	Date   6/9/04

	 	By: Versar, Inc.
	 
	 	 
	

	 	/S/ Theodore M. Prociv
	

	 	
 
	

	 	President and CEO
	 
	 	 
	Date   6/9/04

	 	/S/ Lawrence W. Sinnott
	

	 	
 
	

	 	Lawrence W. Sinnott







Company notices to you shall be addressed as follows (or in any other manner
you notify the Company to use):























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