Document:

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                                                                    Exhibit 10.3

                          SERVICE AMERICA CORPORATION

                           DEFERRED COMPENSATION PLAN

                        Effective as of February 9, 1999
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                             ARTICLE - INTRODUCTION

1.1      Name of Plan.

         Service America Corporation (the "Company") hereby adopts the Service
         America Corporation Deferred Compensation Plan (the "Plan").

1.2      Purposes of Plan.

         The purposes of the Plan are in provide certain eligible employees of
         the Company the opportunity to defer elements of their compensation
         which might not otherwise be deferrable under other Company plans,
         including the Service America Corporation Retirement and Savings Plan
         (the "Savings Plan") and to receive the benefit of additions to their
         deferral comparable to those obtainable under the Savings Plan In the
         absence of certain restrictions and limitations in the Internal Revenue
         Code.

1.3      "Top Hat" Pension Benefit Plan.

         The Plan is an "employee pension benefit plan" within the meaning of
         ERISA. However, the Plan is unfunded and maintained for a select group
         of management or highly compensated employees and, therefore, it is
         intended that the Plan will be exempt from Parts 2, 3 and 4 of Title 1
         of ERISA. The Plan is not intended to qualify under Code section
         401(a).

1.4      Funding.

         The Plan is unfunded. All benefits will be paid from the general assets
         of the Company.

1.5      Effective Date.

         The Plan is effective as of February 9, 1999.

1.6      Administration.

         The Plan shall be administered by the Committee.

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                     ARTICLE - DEFINITIONS AND CONSTRUCTION

2.1      Definitions.

         For purposes of the Plan, the following words and phrases shall have
         the respective meanings set forth below, unless their context clearly
         requires a different meaning:

         (a)      "Account" means the bookkeeping account maintained by the
                  Company on behalf of each Participant pursuant to Article VI
                  that is credited with Base Salary Deferrals, Bonus Deferrals
                  and Matching Contributions made by the Company on behalf of
                  each Participant pursuant to Article IV, and the earnings and
                  losses on such amounts as determined in accordance with
                  Article V. As of any Valuation Date, a Participant's benefit
                  under the Plan shall be equal to the amount credited to his
                  Account as of such date.

         (b)      "Base Salary" means the base rate of cash compensation paid by
                  the Company to or for the benefit of a Participant for
                  services rendered or labor performed while a Participant,
                  including base pay a Participant could have received in cash
                  in lieu of (A) deferrals pursuant to Section 4.1 and (B)
                  contributions made on his behalf to any qualified plan
                  maintained by the Company or to any cafeteria plan under
                  Section 125 of the Code maintained by the Company.

         (c)      "Base Salary Deferral" means the amount of a Participant's
                  Base Salary which the Participant elects to have withheld on a
                  pre-tax basis from his Base Salary and credited to his Account
                  pursuant to Section 4.1.

         (d)      "Beneficiary" means the person or persons designated by the
                  Participant in accordance with Section 7.4.

         (e)      "Bonus Compensation" means the amount awarded to a Participant
                  for a Plan Year under any bonus plan maintained by the
                  Company.

         (f)      "Bonus Deferral" means the amount of a Participant's Bonus
                  Compensation which the Participant elects to have withheld on
                  a pre-tax basis from his Bonus Compensation and credited to
                  his account pursuant to Section 4.1

         (g)      "Change in Control" means the happening of any of the
                  following events;

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                                                                               3

                  (i)      An acquisition by an individual, entity or group
                           (within the meaning of Section 13(d)(3) or 14(d)(2)
                           of the Securities Exchange Act of 1934, as amended
                           (the "Exchange Act") (a "Person") of beneficial
                           ownership (within the meaning of Rule 13d-3
                           promulgated under the Exchange Act) of 20% or more of
                           either (1) the then outstanding shares of common
                           stock (the "Outstanding Common Stock") of the
                           Company, Volume Services America, Inc., the company's
                           immediate parent, or Volume Services America
                           Holdings, Inc., the company's ultimate parent
                           (collectively "The Affiliated Companies") or (2) the
                           combined voting power of the then outstanding voting
                           securities entitled to vote generally in the election
                           of directors (the "Outstanding Voting Securities of
                           any of The Affiliated Companies"): provided, however,
                           that the following acquisitions shall not constitute
                           a Change of Control:

                           (A) any acquisition directly from any of The
                           Affiliated Companies (excluding an acquisition by
                           virtue of the exercise of a conversion privilege),
                           (B) any acquisition by any of The Affiliated
                           Companies, (C) any acquisition by any employee
                           benefit plan (or related trust) sponsored or
                           maintained by any of The Affiliated Companies or (D)
                           any acquisition of any of The Affiliated Companies by
                           any corporation pursuant to a reorganization, merger
                           or consolidation, if, following such reorganization,
                           merger or consolidation, the conditions described in
                           clauses (1), (2) and (3) of subsection (iii) of this
                           Section 2.1 (e) are satisfied; or

                  (ii)     Individuals who, as of the date hereof, constitute
                           the Board (the "Incumbent Board") cease for any
                           reason to continue at least a majority of the Board;
                           provided, however, that any individual becoming a
                           director subsequent to the date hereof whose election
                           or nomination for election by any of The Affiliated
                           Companies' shareholders, was approved, by a vote of
                           at least a majority of the directors then comprising
                           the Incumbent Board shall be considered as though
                           such individual were a member of the Incumbent Board
                           but excluding, for this purpose, any such individual
                           whose initial assumption of office occurs as a result
                           of either an actual or threatened election contest
                           (as such terms are used in Rule 14a-11 of Regulation
                           14A promulgated under the Exchange Act) or other
                           actual or threatened solicitation of proxies or
                           consents by or on behalf of a Person other than the
                           Board; or

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                  (iii)    Approval by the shareholders of any of The Affiliated
                           Companies of a reorganization, merger or
                           consolidation, in each case, unless, following such
                           reorganization, merger or consolidation, (1) all or
                           substantially all of the individuals and entities who
                           were beneficial owners, respectively, of the
                           Outstanding Common Stock and Outstanding Voting
                           Securities immediately prior to such reorganization,
                           merger or consolidation beneficially own, directly or
                           indirectly, more than 50% of, respectively, the then
                           outstanding shares of common stock and the combined
                           voting power of the then outstanding voting
                           securities entitled to vote generally in the election
                           of directors, as the case may be, of the corporation
                           resulting from such reorganization, merger or
                           consolidation of the outstanding Common Stock and
                           Outstanding Voting Securities, as the case may be,
                           (2) no Person, excluding any of The Affiliated
                           Companies and any employee benefit plan (or related
                           trust) thereof, or of the corporation resulting from
                           such reorganization, merger or consolidation and any
                           Person beneficially owning immediately prior to such
                           reorganization, merger or consolidation, directly or
                           indirectly, 20% or more of the Outstanding Common
                           Stock or Outstanding Voting Securities, as the case
                           may be, beneficially owns, directly or indirectly,
                           20% or more of respectively, the then outstanding
                           shares of common stock of the corporation resulting
                           from such reorganization, merger or consolidation or
                           the combined voting power of the then outstanding
                           voting securities of such corporation and (3) at
                           least a majority of the members of the board of
                           directors of the corporation resulting from such
                           reorganization, merger or consolidation were members
                           of the Incumbent Board at the time of the execution
                           of the initial agreement providing for such
                           reorganization, merger of consolidation; or

                  (iv)     The approval by the shareholders of any of The
                           Affiliated Companies of (1) a complete liquidation or
                           dissolution of any of The Affiliated Companies or (2)
                           the sale or other disposition of all or substantially
                           all of the assets of any of The Affiliated Companies,
                           excluding however, such a sale or other disposition
                           to a corporation, with respect to which following
                           such sale or other disposition, (A) more than 60% of,
                           respectively, the outstanding shares of common stock
                           of such corporation and the combined voting power of
                           the outstanding voting securities of such corporation
                           entitled to vote generally in the election of
                           directors will be beneficially owned, directly or
                           indirectly, by all or substantially all of the
                           individuals and entities who were the

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                           beneficial owners, respectively, of the Outstanding
                           Common Stock and Outstanding Voting Securities
                           immediately prior to such sale or other disposition
                           in substantially the same proportions as their
                           ownership, immediately prior to such sale or other
                           disposition, of the Outstanding Common Stock and
                           Outstanding Voting Securities, as the case may be,
                           (B) no Person, other than any of The Affiliated
                           Companies and any employee benefit plan (or related
                           trust) thereof, or of such corporation and any Person
                           beneficially owning, immediately prior to such sale
                           or other disposition, 20% or more of the Outstanding
                           Common Stock or Outstanding Voting Securities, as the
                           case may be, then beneficially owns, directly or
                           indirectly, 20% or more of, respectively, the then
                           outstanding shares of common stock of such
                           corporation and the combined voting power of the then
                           outstanding voting securities of such corporation
                           entitled to vote generally in the election of
                           directors and (C) individuals who were members of the
                           Incumbent Board will constitute at least a majority
                           of the members of the board of directors of such
                           corporation.

         (h)      "Change in Financial Condition" means the date of
                  determination by the Committee that the Company's financial
                  condition has materially deteriorated or means the date the
                  Company is informed that its bank line of credit has been
                  canceled.

         (i)      "Code" means the Internal Revenue Code of 1986, as amended.

         (j)      "Committee" means the administrative committee appointed by
                  the Board of Directors (or the Compensation Committee thereof
                  if such Committee is established and in existence) to
                  administer the Plan in accordance with Article VIII.

         (k)      "Company" means Service America Corporation and any successor
                  thereto.

         (l)      [Reserved]

         (m)      "Deferral Period" means the period of time for which a
                  Participant elects to defer receipt of the Base Salary
                  Deferrals, Bonus Deferrals and Matching Contributions credited
                  to such Participant's Account and shall be either the
                  Retirement Date, a period of years to a Specific Future Year
                  as specified in Section 5.2 or upon a Change in Control.
                  Deferral Periods shall be measured on the basis of Plan Years,
                  beginning with the Plan Year

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                  that commences immediately following the Plan Year for which
                  the applicable Base Salary Deferrals, Bonus Deferrals and/or
                  Matching Contributions are credited to the Participant's
                  Account.

         (n)      "Deferred Compensation Agreement" means the written agreement
                  (regardless of how they may be titled) as prescribed by the
                  Committee and entered into between the Company and a
                  Participant pursuant to which the Participant elects the
                  amount of his Base Salary and/or his Bonus Compensation to be
                  deferred into the Plan, and the form of payment for such
                  amounts, the Deferral Period and the deemed investment.

         (o)      "Directors" means the Board of Directors of the Company.

         (p)      "Effective Date" means February 9, 1999.

         (q)      "Employee" means any common-law employee of the Company.

         (r)      "ERISA" means the Employee Retirement Income Security Act of
                  1974, as amended.

         (s)      "Matching Contribution" means the amount, as determined by the
                  Company on an annual basis, credited by the Company to the
                  Account of each Participant based on such Participant's Base
                  Salary Deferrals.

         (t)      "Participant" means each Employee who has been selected for
                  participation in the Plan and who has become a Participant
                  pursuant to Article III.

         (u)      "Plan" means the Service America Corporation Deferred
                  Compensation Plan, as amended from time to time.

         (v)      "Plan Year" means the twelve consecutive month period
                  commencing January 1 of each year ending on December 31.

         (w)      "Retirement Date" means the date the Participant is eligible
                  for and retires under any qualified retirement plan maintained
                  by the Company.

         (x)      "Savings Plan" means the Service America Corporation
                  Retirement and Savings Plan.

         (y)      "Specific Future Year" means a calendar year in the future
                  voluntarily elected by a participant to begin distribution of
                  Base Salary Deferrals,

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                  Bonus Deferrals and Matching Contributions, limited only by
                  the minimum and maximum Deferral Periods.

         (z)      "Valuation Date" means the last business day of each calendar
                  month and each special valuation date designated by the
                  Committee.

2.2      Number and Gender.

         Wherever appropriate herein, words used in the singular shall be
         considered to include the plural and words used in the plural shall be
         considered to include the singular. The masculine gender, where
         appearing in the Plan, shall be deemed to include the feminine gender.

2.3      Headings.

         The headings of Articles and Sections herein are included solely for
         convenience, and if there is any conflict between such headings and the
         text of the Plan, the text shall control.

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                     ARTICLE - PARTICIPATION AND ELIGIBILITY

3.1      Participation.

         Participants in the Plan are those employees who are a select group of
         highly compensated or management Employees of the Company and selected
         by the Committee, in its sole discretion, as Participants. The
         Committee shall notify each Participant of his selection as a
         Participant. Subject to the provisions of Section 3.3, a Participant
         shall remain eligible to continue participation in the Plan for each
         Plan Year following his initial year of participation in the Plan.

3.2      Commencement of Participation.

         An Employee shall become a Participant effective as of the date the
         Committee determines, which date shall be on or after the date his
         Deferred Compensation Agreement becomes effective.

3.3      Cessation of Active Participation.

         Notwithstanding any provision herein to the contrary, an individual who
         has become a Participant in the Plan shall cease to be a Participant
         hereunder effective as of any date designated by the Committee. Any
         such Committee action shall be communicated to such Participant prior
         to the effective date of such action.

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                  ARTICLE - DEFERRALS & MATCHING CONTRIBUTIONS

4.1      Deferrals by Participants.

         Before the first day of each Plan Year (or the remaining portion
         thereof for an Employee who commences participation in the Plan other
         than on the first day of a Plan Year), a Participant may file with the
         Committee a Deferred Compensation Agreement pursuant to which such
         Participant elects to make Base Salary Deferrals and/or Bonus
         Deferrals. Any such Participant election shall be subject to any
         maximum or minimum percentage or dollar amount limitations and to any
         other rules prescribed by the Committee in its sole discretion. Base
         Salary Deferrals will be credited to the Account of each Participant as
         of the last day of each calendar month, provided that such Participant
         is an Employee on the last day of such calendar month. A Participant
         whose employment terminates during the calendar month shall be paid the
         amount of his Bass Salary Deferrals for such month in cash. Bonus
         Compensation Deferrals will be credited to the account of each
         Participant as of the last day of the month in which such Bonus
         Compensation otherwise would have been paid to the Participant in cash
         provided the Participant is an Employee on the last day of such month.
         A Participant whose employment terminates during the calendar month in
         which his bonus compensation would have been paid to him in cash will
         be paid his bonus deferral in cash.

4.2      Effective Date of Deferred Compensation Agreement.

         A Participant's initial Deferred Compensation Agreement shall be
         effective as of the first payroll period after the date the Participant
         commences participation in the Plan. Each subsequent Deferred
         Compensation Agreement shall become effective on the first day of the
         Plan Year to which it relates. If a Participant fails to complete a
         Deferred Compensation Agreement on or before the date the Participant
         commences participation in the Plan or the first day of any Plan Year,
         the Participant shall be deemed to have elected not to make Base Salary
         Deferrals and/or Bonus Compensation Deferrals for such Plan Year (or
         remaining portion thereof if the Participant enters the Plan other than
         on the first day of a Plan Year).

4.3      Modification or Revocation of Election by Participant.

         A Participant may not change the amount of his Base Salary or Bonus
         Deferrals during a Plan Year. However, a Participant may discontinue a
         Base Salary Deferral election at any time, by filing on such forms and
         subject to such limitations and restrictions as the committee may
         prescribe in its discretion, a revised Deferred Compensation Agreement
         with the Committee. If approved by

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                                                                              10

         the Committee, revocation shall take effect as of the first payroll
         period next following his filing. If a Participant discontinues a Base
         Salary Deferral election during a Plan Year, he will not be permitted
         to elect to make Base Salary Deferrals again until the next Plan Year.
         A Participant may discontinue his Bonus Compensation Deferral only if
         approved by the Committee following a showing of Financial Hardship.
         Under no circumstances may a Participant's Deferred Compensation
         Agreement be amended, modified or revoked retroactively.

4.4      Matching Contributions.

         The Committee, in its sole discretion may provide for a Company Match
         Contribution on any portion of the amount deferred. Included in the
         Committee's discretion is the ability to name specific individuals to
         whom a match applies and the amount and timing of that match.

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                     ARTICLE - VESTING, DEFERRAL PERIODS AND
                                EARNINGS ELECTION

5.1      Vesting.

         A Participant shall be 100% vested in his Account, including Matching
         Contributions, at all times.

5.2      Deferral Periods.

         A Deferral Period shall, at the Participant's election, be until (i)
         Retirement Date, or (ii) a Specific Future Year and upon (iii) a Change
         in Control or Change in Financial Condition. In the case of an election
         to defer until a Specific Future Year, the Deferral Period must be for
         any period of at least three (3) years or more, but may not end later
         than the year in which the Participant attains age 70, unless a
         Participant is over age 55 as of the date such Deferred Compensation
         Agreement is made with respect to such amount in which case the
         Deferral Period need only be for one (1) calendar tax year. A
         Participant must specify on the Deferred Compensation Agreement the
         Deferral Period for the Base Salary Deferrals, Bonus Compensation
         Deferrals and Matching Contributions to be made to the Plan for the
         Plan Year (or the remaining portion thereof for a Participant who
         enters the Plan other that on the first day of a Plan Year) to which
         the Deferred Compensation Agreement relates, subject to certain rules
         as determined by the Committee from time to time. In the event a
         Participant does not elect a Deferral Period for any such Base Salary
         Deferrals and Matching Contributions for a Plan Year, such Participant
         shall be deemed to have elected a Deferral Period of three (3) years.

5.3      Earnings Elections.

         Amounts credited to a Participants' Account shall be credited with
         earnings and losses based on hypothetical investment directions made by
         the Participant, in accordance with investment deferral crediting
         options and procedures adopted by the Committee from time to time. The
         Company specifically retains the right in its sole discretion to change
         the investment deferral crediting options and procedures. Any amounts
         credited to a Participant's Account with respect to which a Participant
         does not provide investment direction shall be credited with earnings
         in an amount determined by the Committee in its sole discretion. A
         Participant's Account shall be adjusted as of each Valuation Date to
         reflect investment gains and losses.

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                               ARTICLE - ACCOUNTS

6.1      Establishment of Bookkeeping Accounts.

         A separate bookkeeping account shall be maintained for each
         Participant. Such account shall be credited with the Base Salary
         Deferrals and/or Bonus Compensation Deferrals made by the Participant
         pursuant to Section 4.1, and Matching Contributions made by the Company
         pursuant to Section 4.4 and credited (or charged, as the case may be)
         with the hypothetical investment results determined pursuant to Section
         5.3.

6.2      Subaccounts.

         Within each Participant's bookkeeping account, separate subaccounts
         shall be maintained to the extent necessary for the administration of
         the Plan. For example, it may be necessary to maintain separate
         subaccounts where the Participant has specified different Deferral
         Periods, methods of payment or investment directions with respect to
         his Base Salary Deferrals, Bonus Compensation Deferrals and Matching
         Contributions for different Plan Years.

6.3      Hypothetical Nature of Accounts.

         The account established under this Article VI shall be hypothetical in
         nature and shall be maintained for bookkeeping purposes only so that
         earnings and losses on the Base Salary Deferrals, Bonus Compensation
         Deferrals and Matching Contributions made to the Plan can be credited
         (or charged, as the case may be). Neither the Plan nor any of the
         accounts (or subaccounts) established hereunder shall hold any actual
         funds or assets. The right of any person to receive one or more
         payments under the Plan shall be an unsecured claim against the general
         assets of the Company. Any liability of the Company to any Participant,
         former Participant or Beneficiary with respect to a right to payment
         shall be based solely upon contractual obligations created by the Plan.
         Neither the Company, the Directors, nor any other person shall be
         deemed to be a trustee of any amounts to be paid under the Plan.
         Nothing contained in the Plan, and no action taken pursuant to its
         provisions, shall create or be construed to create a trust of any kind,
         or a fiduciary relationship, between the Company and a Participant or
         any other Person.

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                          ARTICLE - PAYMENT OF ACCOUNT

7.1      Timing of Distribution of Benefits.

         Distribution of Base Salary Deferrals, Bonus Compensation Deferrals and
         Matching Contributions to a Participant shall be made as soon as
         practicable following the date the Deferral Period for such amounts
         ends. If the Participant elects to receive a distribution in the event
         of a Change in Control or Change in Financial Condition, distribution
         shall be made within 45 days of the Change in Control or Change in
         Financial Condition. Notwithstanding the foregoing, the Participant's
         entire Account shall be distributed to him (or his Beneficiary in the
         event of his death) in five (5) annual installments if the account
         balance is $200,000 or greater following the earlier to occur of the
         following: (i) the Participant's death; (ii) the Participant's
         permanent disability (as defined in the Company's long-term disability
         program); or (iii) the Participant's termination of employment. If the
         Participant's account balance is less than $200,000, the account
         balance for subsections 7.1(i), (ii) or (iii) will be paid as a lump
         sum. This distribution may be accelerated, including a lump sum, based
         upon a showing of severe financial hardship in accordance with Section
         7.6 by the Participant or his beneficiary.

7.2      Adjustment for Investment Gains and Losses Upon a Distribution.

         Upon a distribution pursuant to this Article VII, the balance of a
         Participant's Account shall be determined as of the Valuation Date
         immediately preceding We date of the distribution to be made and shall
         be adjusted for investment gains and losses which have accrued to the
         date of distribution but which have not been credited to his Account.

7.3      Form of Payment or Payments.

         Base Salary Deferrals, Bonus Compensation Deferrals and Matching
         Contributions shall be distributed in accordance with the form of
         payment elected by the Participant on the Deferred Compensation
         Agreement to which such amounts relate. The form of payment with
         respect to amounts and the earnings credited thereon may be in any of
         the following forms:

         (a)      A lump sum; or

         (b)      Installment payments for a period not to exceed fifteen years.

         Installment payments shall be paid annually on the first business day
         of January of each Plan Year or quarterly on the first business day of
         each calendar quarter as

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                                                                              14

         elected by the Participant. Each installment payment shall be
         determined by multiplying the amounts to be distributed by a fraction,
         the numerator of which is one and the denominator of which is the
         number of remaining installment payments to be mode to Participant.
         Anything contained herein to the contrary notwithstanding, total
         distribution of a Participant's Account must be made by the date such
         Participant attains age 85. In the tax year prior to the year in which
         a distribution of a Participant's Account is scheduled to begin
         distribution (but no less than 60 days prior to the distribution date
         in all events), a Participant may request a change in form of payment
         which may be approved or disapproved by the Committee in its sole
         discretion.

7.4      Designation of Beneficiaries.

         Each Participant shall have the right to designate the beneficiary or
         beneficiaries to receive payment of his benefit in the event of his
         death. A beneficiary designation shall be made by executing the
         beneficiary designation form prescribed by the Committee and filing the
         same with the Committee. Any such designation may be changed at any
         time by execution of a new designation in accordance with this Section.
         If no such designation is on file with the Committee at the time of the
         death of the Participant or such designation is not effective for any
         reason as determined by the Committee, then the designated beneficiary
         or beneficiaries to receive such benefit shall be the Participant's
         surviving spouse, if any, or if none, the Participant's executor or
         administrator, or his heirs at law if there is no administration of
         such Participant's estate.

7.5      Unclaimed Benefits.

         In the case of a benefit payable on behalf of such Participant, if the
         committee is unable to locate the Participant or beneficiary to whom
         such benefit is payable, such benefit may be forfeited to the Company,
         upon the Committee's determination. Notwithstanding the foregoing, if
         subsequent to any such forfeiture the Participant or beneficiary to
         whom such benefit is payable makes a valid claim for such benefit, such
         forfeited benefit shall be paid by the Company or restored to the Plan
         by the Company.

7.6      Hardship Withdrawals.

         A Participant may apply in writing to the Committee for, and the
         Committee may permit, a hardship withdrawal of all or any part of a
         Participant's Account. If the Committee, in its sole discretion,
         determines that the Participant has incurred a severe financial
         hardship resulting from a sudden and unexpected illness or accident of
         the Participant or of a dependent (as defined in section 152(a) of the

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                                                                              15

         Code) of the Participant, loss of the Participant's property due to
         casualty, or other similar extraordinary and unforeseeable
         circumstances arising as a result of events beyond the control of the
         Participant, as determined by the Committee, in its sole and absolute
         discretion. The amount that may be withdrawn shall be limited to the
         amount reasonably necessary to relieve the hardship or financial
         emergency upon which the request is based, plus the federal and state
         taxes due on the withdrawal, as determined by the Committee. The
         Committee may require a Participant who requests a hardship withdrawal
         to submit such evidence as the Committee, in its sole discretion, deems
         necessary or appropriate to substantiate the circumstances upon which
         the request is based.

7.       Other Withdrawals.

         At any time, a Participant may request that 90% of all (or a designated
         portion of) his account balance may be paid to him. The Committee in
         its sole discretion may approve or disapprove such a request. If it
         approves the request and a Participant receives a payment under this
         Section, he shall (1) permanently forfeit the remaining 10% of the
         entire account balance (or designated portion of it) and this amount
         shall not be paid to, or in respect of, the Participant; and (2) the
         Participant shall lose the right to participate in the Plan for 1 full
         Plan Year after receiving a distribution under this Section.

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                                                                              16

                            ARTICLE - ADMINISTRATION

8.1      Committee.

         The Plan shall be administered by a Committee appointed by the Board of
         Directors (or the Compensation Committee thereof if such Committee is
         established and in existence). The Committee shall be responsible for
         the general operation and administration of the Plan and for carrying
         out the provisions thereof. The Committee may delegate to others
         certain aspects of the management and operational responsibilities of
         the Plan including the employment of advisors and the delegation of
         ministerial duties to qualified individuals, provided that such
         delegation is in writing.

8.2      General Powers of Administration.

         The Committee shall have all powers necessary or appropriate to enable
         it to carry out its administrative duties. Not in limitation, but in
         application of the foregoing, the Committee shall have the duty and
         power to interpret the Plan and determine all questions that may arise
         hereunder as to the status and rights of Employees, Participants and
         Beneficiaries. The Committee may exercise their powers hereby granted
         in its sole and absolute discretion. No member of the committee shall
         be personally liable for any actions taken by the Committee unless the
         member's action involves willful misconduct.

8.3      Costs of Administration.

         The costs of administering the Plan shall be borne by the Company
         unless and until the Participant receives written notice of the
         imposition of such administrative costs, with such costs to begin with
         the next Plan Year and none may be assessed retroactively for prior
         Plan Years. Such costs shall be charged against the Participant's
         Account and shall be uniform for all Plan Participants. Such costs
         shall not exceed the standard rates for similarly designed nonqualified
         plans under administration by high quality third party administrators
         at the time such costs are initially imposed and thereafter.

8.4      Indemnification of Committee.

         The Company shall indemnify the members of the Committee against any
         and all claims, losses, damages, expenses, including attorney's fees,
         incurred by them, and any liability, including any amounts paid in
         settlement with their approval, arising from their action or failure to
         act, except when the same is judicially determined to be attributable
         to their gross negligence or wilful misconduct.

<PAGE>

                                                                              17

                      ARTICLE - DETERMINATION OF BENEFITS,
                       CLAIMS PROCEDURE AND ADMINISTRATION

9.1      Claims.

         A person who believes that he is being denied a benefit to which he is
         entitled under the Plan (hereinafter referred to as "Claimant") may
         file a written request for such benefit with the Committee, setting
         forth his claim. The request must be addressed to the Committee at the
         Company at its then principal place of business.

9.2      Claim Decision.

         Upon receipt of a claim, the Company shall advise the Claimant that a
         reply will be forthcoming within ninety (90) days and shall, in fact,
         deliver such reply within such period. The Company may, however, extend
         the reply period for an additional ninety (90) days for reasonable
         cause.

         If the claim is denied in whole or in part, the Committee shall adopt a
         written opinion, using language calculated to be understood by the
         Claimant, setting forth:

         (1)      The specific reason or reasons for such denial;

         (2)      The specific reference to pertinent provisions of the Plan on
                  which such denial is based;

         (3)      A description of any additional material or information
                  necessary for the Claimant to perfect his claim and an
                  explanation why such material or such information is
                  necessary;

         (4)      Appropriate information as to the steps to be taken if the
                  Claimant wishes to submit the claim for review; and

         (5)      The time limits for requesting a review under Section 9.3 and
                  for review under Section 9.4 hereof.

9.3      Request for Review.

         Within sixty (60) days after the receipt by the Claimant of the written
         opinion described above, the Claimant may request in writing that the
         Company review the determination of the Committee. Such request must be
         addressed to the Secretary of the Company, at its then principal place
         of business. The Claimant or his duly authorized representative may,
         but need not, review the pertinent

<PAGE>

                                                                              18

         documents and submit issues and comments in writing for consideration
         by the Company. If the Claimant does not request a review of the
         Corporation's determination by the Secretary of the Company within such
         sixty (60) day period he shall be barred and estopped from challenging
         the Company's determination.

9.4      Review of Decision.

         Within sixty (60) days after the Secretary's receipt of a request for
         review, such secretary will review the Company's determination. After
         considering all materials presented by the Claimant, the Secretary will
         render a written opinion, written in a manner calculated to be
         understood by the Claimant setting forth the specific reasons for the
         decision and containing specific references to the pertinent provisions
         of this Agreement on which the decision is based. If special
         circumstances require that the sixty (60) day time period be extended,
         the Secretary will so notify the Claimant and will render the decision
         as soon as possible, but no later than one hundred twenty (120) days
         after receipt of the request for review.

<PAGE>

                                                                              19

                             ARTICLE - MISCELLANEOUS

10.1     Not Contract of Employment.

         The adoption and maintenance of the Plan shall not be deemed to be a
         contract between the Company and any person or to be consideration for
         the employment of any person. Nothing herein contained shall be deemed
         to give any person the right to be retained in the employ of the
         Company or to restrict the right of the Company to discharge any person
         at any time nor shall the Plan be deemed to give the Company the right
         to require any person to remain in the employ of the Company or to
         restrict any person's right to terminate his employment at any time.

10.2     Non-Assignability of Benefits.

         No Participant, Beneficiary or distributee of benefits under the Plan
         shall have any power or right to transfer, assign, anticipate,
         hypothecate or otherwise encumber any part or all of the amounts
         payable hereunder, which are expressly declared to be unassignable and
         non-transferable. Any such attempted assignment or transfer shall be
         void. Except as provided by applicable law, no amount payable hereunder
         shall, prior to actual payment thereof, be subject to seizure by any
         creditor of any such Participant, Beneficiary or other distributee for
         the payment of any debt judgment or other obligation, by a proceeding
         at law or in equity, nor transferable by operation of law in the event
         of the bankruptcy, insolvency or death of such Participant, Beneficiary
         or other distributee hereunder.

10.3     Withholding.

         All deferrals and payments provided for hereunder shall be subject to
         applicable withholding and other deductions as shall be required of the
         Company under any applicable local, state or federal law.

10.4     Amendment and Termination.

         The Board of Directors (or the Compensation Committee thereof if such
         Committee is established and in existence) may from time to time, in
         its discretion, amend, in whole or in part, any or all of the
         provisions of the Plan; provided, however, that no amendment may be
         made that would impair the rights of a Participant with respect to
         amounts already allocated to his Account. The Board of Directors (or
         the Compensation Committee thereof if such Committee is established and
         in existence) may terminate the Plan at any time. In the event that the
         Plan is terminated, the balance in a Participant's Account shall be
         paid to such

<PAGE>

                                                                              20

         Participant or his Beneficiary in a single cash lump sum in full
         satisfaction of all such Participant's or Beneficiary's benefits
         hereunder. Any such amendment to or termination of the Plan shall be in
         writing and signed by a member of the Board of Directors (or the
         Compensation Committee thereof if such Committee is established and in
         existence).

10.5     No Trust Created.

         Nothing contained in this Agreement, and no action taken pursuant to
         its provisions by either party hereto, shall create, nor be construed
         to create, a trust of any kind or a fiduciary relationship between the
         Company and the Participant, his beneficiary, or any other person.

10.6     Unsecured General Creditor Status of Employee.

         The payments to Participant, his Beneficiary or any other distributee
         hereunder shall be made from assets which shall continue, for all
         purposes, to be a part of the general, unrestricted assets of the
         Company; no person shall have nor acquire any interest in any such
         assets by virtue of the provisions of this Agreement. The Company's
         obligation hereunder shall be an unfunded and unsecured promise to pay
         money in the future. To the extent that the Participant, Beneficiary or
         other distributee acquires a right to receive payments from the Company
         under the provisions hereof, such right shall be no greater than the
         right of any unsecured general creditor of the Company; no such persons
         shall have nor require any legal or equitable right, interest or claim
         in or to any property or assets of the Company.

         In the event that, in its discretion, the Company purchases an
         insurance policy or policies insuring the life of the Employees (or any
         other property) to allow the Company to recover the cost of providing
         the benefit, in whole, or in part, hereunder, neither the Participant,
         Beneficiary or other distributee shall have nor acquire any rights
         whatsoever therein or in the proceeds therefrom. The Company shall be
         the sole owner and beneficiary of any such policy or policies and, as
         such, shall possess and, may exercise all incidents of ownership
         therein. No such policy, policies or other property shall be held in
         any trust for a Participant, Beneficiary or other distributee or held
         as collateral security for any obligation of the Company hereunder. An
         Employee's participation in the underwriting or other steps necessary
         to acquire such policy or policies may be required by the Company and,
         if required. shall not be a suggestion of any beneficial interest in
         such policy or policies to a Participant.

<PAGE>

                                                                              21

10.7     Severability.

         If any provision of this Plan shall be held illegal or invalid for any
         reason, said illegality or invalidity shall not affect the remaining
         provisions hereof; instead, each provision shall be fully severable and
         the Plan shall be construed and enforced as if said illegal or invalid
         provision had never been included herein.

10.8     Governing Laws.

         All provisions of the Plan shall be construed in accordance with the
         laws of South Carolina except to the extent preempted by federal law.

10.9     Binding Effect.

         This Plan shall be binding on each Participant and his heirs and legal
         representatives and on the Company and its successors and assigns.

10.10    Entire Agreement.

         This document and any amendments contain all the terms and provisions
         of the Plan and shall constitute the entire Plan, any other alleged
         terms or provisions being of no effect.

         IN WITNESS WHEREOF, the Company has caused this Plan to be properly
executed on the 9th day of February, 1999.

                                      SERVICE AMERICA CORPORATION

                                           /s/ Robert Paoletti
                                      By: ______________________________________
                                      Its: Corporate Vice President & Controller

(Corporate Seal)

Attested to:

/s/ Janet L. Steinmayer
__________________________________
Secretary<PAGE>

                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT

                  Employment Agreement (this "Agreement"), dated as of August
24, 1998, by and between VSI Acquisition II Corporation, a Delaware corporation
(the "Company"), and John T. Dee (the "Executive").

                  The Company and the Executive wish to provide for the terms of
his employment as a senior executive of the Company.

                  It is therefore agreed as follows:

                  1. Term. The employment of the Executive under this Agreement
shall commence as of August 24, 1998 (the "Effective Date") and shall continue
through the fifth anniversary of the Effective Date (the "Term"), subject to
earlier termination as provided for in Section 4.

                  2.       Duties; Place of Employment.

                  (a) During the Term, the Executive shall serve as Chief
Executive Officer of the Company, in which capacity he shall devote all of his
business time, effort and energies to the business of the Company. In addition,
during the Term, the Executive shall be nominated and, when elected, serve as a
member and Chairman of the Board of Directors of the Company (the "Board"). The
Executive shall have such authority and responsibility, and shall serve in such
capacities with the Company's majority-owned subsidiaries and affiliates, as are
consistent with the duties of a senior executive as may from time to time be
assigned to him by the Board.

                  (b) The principal place of employment of the Executive shall
be within 25 miles of Stamford, Connecticut and shall not be changed without the
Executive's prior written consent; provided, however, the Executive may be
required to travel to South Carolina on a regular basis.

                  3.       Compensation and Benefits.

                  (a) Base Salary. During the Term, the Company shall pay the
Executive an annual salary of $465,000, payable in accordance with the Company's
salary payment policies governing senior executives.

                  (b) Bonuses. In the sole discretion of the Board, the
Executive also shall receive such bonus compensation, if any, determined by the
Board, and shall be entitled to participate in any executive bonus plan that the
Board shall establish for the senior executives of the Company.

                  (c) Expense Reimbursement. The Company shall reimburse the
Executive for ordinary and necessary business expenses incurred by him in the
performance of his duties as an employee of the Company in accordance with the
Company's policies governing reimbursement

                                        1

<PAGE>

of expenses of senior executives; provided that the Executive accounts to the
Company for such expenses in the manner customarily prescribed by the Company
for its senior executives.

                  (d)      Benefit Plans, Fringe Benefits and Vacation.

                           (i) During the Term, the Executive shall be entitled
         to the coverage or benefits under any and all employee benefit plans
         maintained by the Company (including, without limitation, medical
         insurance, life insurance, split dollar life insurance, long-term
         disability insurance and pension plans, if any) to the extent
         permissible under the terms of the plans and to all fringe benefits for
         which his status and level of employment qualify him in accordance with
         the Company's benefits policies governing senior executives.

                           (ii) The Executive shall be entitled to paid
         vacations (taken consecutively or in segments), in accordance with the
         Company standard vacation policies governing senior executives, but in
         no event less than four weeks each calendar year during the Term. Such
         vacations shall be taken at times consistent with the effective
         discharge of the Executive's duties.

                           (iii) It is recognized that the services of the
         Executive hereunder will require the use of a suitable automobile and
         the Company agrees to supply and maintain the same at its expense in
         accordance with the Company's policies with respect thereto for senior
         executives. The Executive shall be entitled to continue the use of his
         current business automobile or to be provided with at least an
         equivalent new vehicle at such intervals as apply to other senior
         executives of the Company.

                           (iv) The Executive shall be reimbursed for up to
         $10,000 for the fees and expenses related to membership in two clubs
         designated by the Executive and such other organizations consistent
         with the Company's policies pertaining thereto governing senior
         executives.

                  4.       Termination.

                  (a) Death and Disability. The Executive's employment under
this Agreement shall terminate upon his death. The Company may terminate the
Executive's employment under this Agreement by written notice to the Executive
or his representative if the Executive has a Disability. For purposes of this
agreement, the Executive shall be deemed to have a "Disability" if, for physical
or mental reasons, the Executive is unable to perform the essential functions of
the Executive's duties hereunder in accordance with this Agreement, for 120
consecutive days, or 180 days during any twelve month period, as determined in
accordance herewith. The Disability of the Executive shall be determined by a
medical doctor selected by agreement of the Company and the Executive and upon
the request of either party by notice to the other. If the Company and the
Executive cannot agree on the selection of a medical doctor, each of them will
select a medical doctor and the two medical doctors will select a third medical
doctor who shall determine whether the Executive has a Disability. The
determination of such medical doctor shall be binding on both parties. The
Executive shall submit to a reasonable number of examinations by the medical
doctor making the determination of Disability. If the Executive is

                                        2

<PAGE>

not legally competent, the Executive's legal guardian or duly authorized
attorney-in-fact shall act in the Executive's stead for the purposes of
submitting the Executive to the examinations and for all other purposes
hereunder.

                  (b) Termination by the Company for Cause. The Company may
terminate the Executive's employment under this Agreement for Cause by written
notice to the Executive. "Cause" shall mean termination by action of at least a
majority of the members of the Board (excluding the Executive) upon (i) the
Executive's breach of Section 6 of this Agreement; (ii) the Executive's material
breach of any other provision of this Agreement; (iii) the Executive's willful
failure to adhere to any written Company policy if the Executive has been given
written notice and a reasonable opportunity to comply with such policy or cure
his failure to comply; (iv) serious wilful misconduct by the Executive in
connection with his employment; or (v) the commission of a felony or the
equivalent thereof or a misdemeanor including moral turpitude. Such action shall
take place at a meeting duly called and held upon at least 15 days' prior
written notice to the Executive specifying the particulars of the action or
inaction alleged to constitute "Cause" (and at which meeting the Executive and
his counsel were entitled to be present and given reasonable opportunity to be
heard). Action or inaction by that Executive shall not be considered "willful"
unless done or omitted by him intentionally and not in good faith and without
his reasonable belief that his action or inaction was in the best interests of
the Company, and shall not include failure to act by reason of total or partial
incapacity due to physical or mental illness.

                  (c) Termination by the Company Without Cause. The Company may
terminate the Executive's employment under this Agreement at any time by written
notice to the Executive, whether or not in accordance with Section 4(a) or 4(b).

                  (d) Termination by the Executive for Good Reason. The
Executive may terminate his employment under this Agreement for "Good Reason" by
written notice to the Company within a reasonable period following the event
giving rise to such Good Reason; provided, however, that the Company shall have
the right to cure the action that constitutes "Good Reason" within five business
days of the date of such notice. For purposes of this Agreement, "Good Reason"
shall mean: (i) the Company's material breach of this Agreement; (ii) the
assignment of the Executive, without his consent, to a position,
responsibilities or duties of a materially lesser status or degree of
responsibility than his position, responsibilities or duties at the Effective
Date; provided, that the Executive has agreed to relinquish the title of Chief
Executive Officer of the Company on January 1, 2001; (iii) the Company's breach
of Section 3(b); or (iv) the failure to elect the Executive to serve as a member
and Chairman of the Board.

                  5.       Consequences of Termination.

                  (a) Cause or Absence of Good Reason. If the Executive's
employment under this Agreement is terminated (i) by the Company pursuant to
Section 4(b) or (ii) by the Executive other than pursuant to Section 4(d), the
Executive shall not thereafter be entitled to receive any salary, bonus or other
payments or benefits under this Agreement, other than the payments

                                        3

<PAGE>

pursuant to Section 3(a) of salary earned, accrued vacation and the
reimbursement pursuant to Section 3(c) of expenses incurred, in each case,
through the date of termination.

                  (b) Death or Disability. If the Executive's employment under
this Agreement is terminated pursuant to Section 4(a) due to his death or
Disability, the Executive shall not thereafter be entitled to receive any
salary, bonus or other payments or benefits under this Agreement, other than the
following: (a) payments pursuant to Section 3(a) of salary earned, accrued
vacation and the reimbursement pursuant to Section 3(c) of expenses incurred, in
each case, through the date of termination and (b) an amount equal to the
Executive's one year's base salary at the annual rate in effect on the date of
his death or Disability. In addition, if the Executive's employment is
terminated due to his death, the Company shall continue to provide, for a period
of one year from the date of the Executive's death, the Executive's spouse and
minor children with medical, hospitalization and dental insurance comparable to
that provided by the Company prior to such termination.

                  (c) Other Terminations. If the Executive's employment under
this Agreement is terminated (i) by the Company pursuant to Section 4(c) or (ii)
by the Executive pursuant to Section 4(d), the Executive shall not thereafter be
entitled to receive any salary, bonus or other payments or benefits under this
Agreement, other than the following: (a) payments pursuant to Section 3(a) of
salary for the balance of the Term at the annual rate in effect immediately
prior to such termination; (b) reimbursement pursuant to Section 3(c) of
expenses incurred through the date of termination; (c) benefits pursuant to
Section 3(d)(i) for the earlier of the balance of the Term and the date the
Executive receives comparable coverage from a subsequent employer to the extent
permissible under the terms of the plans providing such benefits; (d) accrued
vacation; and (e) assignment of title to any life insurance policy covering the
life of the Executive after which time the Executive shall be fully responsible
for all costs of such policy due and payable after the Term (and provided that,
in the event such policy is a "split dollar" policy or otherwise evidences an
ownership interest by the Company, the Company shall be entitled to recover its
interest therein before any such assignment is effective).

                  (d) Mitigation. The Executive shall have no duty or obligation
to seek or accept other employment under this Agreement and shall not be
required to mitigate the amount of any cash payments or benefits provided for by
this Agreement by seeking or accepting employment.

                  6.       Certain Restrictions.

                  (a) Confidentiality. The Executive acknowledges that he has
acquired and will acquire information respecting the business and affairs of the
Company, its subsidiaries and affiliates that is non-public, confidential and/or
proprietary in nature ("Confidential Information"). Accordingly, the Executive
shall keep confidential and not disclose to any person or use (except as
required in the conduct of the business of the Company in the ordinary course
and consistent with past practice) all such Confidential Information, except as
required by law (provided prior written notice thereof is given by the Executive
to the Company) or with the Company's written consent, unless such information
is known generally to the public or the trade (through sources other than the
Executive's unauthorized disclosure). Upon termination of his

                                        4

<PAGE>

employment for any reason, the Executive shall deliver to the Company all
Confidential Information (in any form, including, but not limited to, electronic
media) in his possession or subject to his control that belongs to the Company.

                  (b)      Competitive Activity.

                           (i) During the period of his employment hereunder and
         for two years thereafter, Executive agrees that, without the prior
         written consent of the Company, (A) he will not, directly or
         indirectly, either as principal, manager, agent, consultant, officer,
         stockholder, partner, investor, lender or employee or in any other
         capacity, carry on, be engaged in or have any financial interest in,
         any business which is in competition with the business of the Company
         or any of its affiliates and (B) he shall not, on his own behalf or on
         behalf of any person, firm or company, directly or indirectly, solicit
         or offer employment to any person who has been employed by the Company
         or any of its affiliates at any time during the 12 months immediately
         preceding such solicitation.

                           (ii) For purposes of this Section 6(b), a business
         shall be deemed to be in competition with the Company and its
         affiliates if it is involved in the sale or provision of dining
         services or vending services at stadiums, ballparks, convention
         centers, concert halls, theaters, seaports, golf courses, arenas, race
         tracks, parks, bandstands, or other recreational venues.

                           (iii) Executive and the Company agree that this
         covenant not to compete is a reasonable covenant under the
         circumstances, and further agree that if in the opinion of any court of
         competent jurisdiction such restraint is not reasonable in any respect,
         such court shall have the right, power and authority to excise or
         modify such provision or provisions of this covenant as to the court
         shall appear not reasonable and to enforce the remainder of the
         covenant contained in this Section 6(b) would irreparably injure the
         Company. Accordingly, Executive agrees that the Company may, in
         addition to pursuing any other remedies it may have in law or in
         equity, cease making any payments otherwise required by this Agreement
         and obtain an injunction against Executive from any court having
         jurisdiction over the matter restraining any further violation of this
         Agreement by Executive.

                           (iv) Nothing in this Section 6(b) shall prohibit the
         Executive from acquiring or holding not more than five percent (5%) of
         any class of publicly traded securities of any business.

                  7.       Miscellaneous.

                  (a) Notices. Any notice or other communication made or given
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, sent by nationally recognized
overnight courier service or mailed by registered mail, return receipt
requested, to a party at his or its address set forth below or at such other
address as a party may specify by notice to the other in accordance herewith:

                                        5

<PAGE>

                           To the Executive:

                           John T. Dee
                           99 Cross Country Trail
                           Stamford, Connecticut 06903

                           To the Company:

                           VSI Acquisition II Corporation
                           201 East Broad Street
                           Spartenburg, SC 29306
                           Attention: General Counsel

Notices on behalf of a party may be signed and sent by an attorney for that
party.

                  (b) Entire Agreement; Amendment. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and is
intended (with the documents referred to herein) as a complete and exclusive
statement of the terms of the agreement between the parties with respect thereto
and cannot be changed or terminated orally.

                  (c) Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing.

                  (d) Indemnification. The Executive shall be entitled to be
indemnified for acting as an officer and director in accordance with the
Company's Certificate of Incorporation and By-Laws. The Company agrees
specifically that it shall maintain provisions in its Certificate of
Incorporation and By-laws relating to exculpation or indemnification of officers
and directors thereof (unless required by law) such that the Executive shall
continue to be entitled to such exculpation and indemnification as was in effect
immediately prior to the date hereof under the Certificate of Incorporation and
By-Laws of Service America Corporation (or any equally favorable arrangement) to
the fullest extent permitted under the laws of the applicable jurisdiction of
incorporation. The Company also shall maintain directors and officers liability
insurance coverage for the Executive which coverage shall be on terms and in
amounts at least as favorable to such Executive as they were under insurance
maintained by Service America Corporation immediately prior to the date herein.

                  (e) Assignment. Except as otherwise provided in this
paragraph, this Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective heirs, representatives, successors and
permitted assigns.

                  (f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered an original, but all of
which together shall constitute the same instrument.

                                        6

<PAGE>

                  (g) Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.

                  (h) Governing Law. This Agreement shall, in accordance with
Section 51 1401 of the General Obligation Law of the State of New York, be
governed by the laws of the State of New York, without regard to any conflicts
of laws principles thereof that would call for the application of the laws of
any other jurisdiction.

                  (i) Arbitration. Any and all disputes or controversies arising
out of or relating to this Agreement, other than claims brought pursuant to
Section 6, shall be resolved by arbitration at the American Arbitration
Association (the "AAA") at its New York City offices before a panel of three
arbitrators under the then existing rules of the AAA. The parties agree that in
any such arbitration, the arbitrators shall not have the power to reform or
modify this Agreement in any way and to that extent their powers are so limited.
The determination of the arbitrators shall be final and binding on the parties
and judgment on it may be entered in any court of competent jurisdiction. The
prevailing party in arbitration in connection with the enforcement of this
Agreement shall be entitled to recover from the other party all reasonable
out-of-pocket costs and disbursements and any and all charges that may be made
in the cost of the arbitration and the fees of the arbitrator or any other
enforcement thereof.

                  (j) Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE A
JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.

                                        7

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

                                    VSI ACQUISITION II CORPORATION

                                    By: /s/ David Blitzer
                                        -----------------------------
                                        Name:  David Blitzer
                                        Title: Director

                                        ____________________________
                                               John T. Dee

                                        9

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.

                                    VSI ACQUISITION II CORPORATION

                                    By:__________________________
                                       Name:
                                       Title:

                                       /s/ John T. Dee
                                       --------------------------
                                             John T. Dee

                                       10

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