VSE CORPORATION
2550 Huntington Avenue, Alexandria, Virginia 22303-1499
Notice of 1995
Annual Meeting of
Stockholders and
Proxy Statement
To Our Stockholders:
You are cordially invited to attend the annual meeting of
stockholders of VSE Corporation to be held on Saturday, May 6, 1995,
commencing at 10:00 a.m., Washington, D.C. time, at the Value
Engineering Building, 2550 Huntington Avenue, Alexandria, Virginia
22303-1499. The matters expected to be considered at the annual
meeting are described in the accompanying notice of meeting and proxy
statement.
In addition, at the meeting we will review the activities of the
company during the past year and its current activities. Stockholders
will have an opportunity to ask questions. I hope you will be able to
join us.
To ensure that your VSE common stock is voted at the meeting,
please promptly sign and date the enclosed proxy card and return it in
the enclosed envelope. Your vote is important.
Very truly yours,
VSE CORPORATION
D. M. Ervine
D. M. Ervine
Chairman of the Board
of Directors
April 7, 1995
VSE CORPORATION
2550 Huntington Avenue, Alexandria, Virginia 22303-1499
Notice of Annual Meeting of Stockholders
to be Held ON May 6, 1995
To the Stockholders of VSE Corporation:
Notice is hereby given that the annual meeting of stockholders of
VSE Corporation, a Delaware corporation ("VSE"), will be held on
Saturday, May 6, 1995, commencing at 10:00 a.m., Washington, D.C.
time, at the Value Engineering Building, 2550 Huntington Avenue,
Alexandria, Virginia 22303-1499, for the following purposes:
1. To elect nine directors to serve until the next annual
meeting of stockholders and until their successors are
duly elected and qualified.
2. To ratify the appointment of Arthur Andersen LLP as
VSE's independent certified public accountants for the
year ending December 31, 1995.
3. To transact such other business as may properly come
before the meeting or at any adjournment thereof.
Only record holders of VSE common stock as of the close of business
on March 22, 1995, will be entitled to notice of, and to vote at, the
annual meeting or at any adjournments thereof. The list of
stockholders entitled to vote at the meeting or at any adjourments
thereof will be open to the examination of any stockholder during the
10 days prior to the meeting at VSE's offices located at 2550
Huntington Avenue, Alexandria, Virginia 22303-1499, during ordinary
business hours.
The VSE Corporation 1994 Annual Report to Stockholders, which
contains consolidated financial statements and other information of
interest to stockholders, accompanies this proxy material.
Whether or not you expect to attend the meeting, please promptly
complete, sign, date and return the enclosed proxy. To return your
proxy you may use the self-addressed envelope, which requires no
postage if mailed within the United States of America. If you attend
the meeting, you may, if you wish, withdraw your proxy and vote your
shares personally.
By Order of the Board of Directors,
C. S. Weber
C. S. Weber
Secretary
Dated: April 7, 1995
VSE CORPORATION
PROXY STATEMENT
Annual Meeting of Stockholders
to be held on May 6, 1995
INTRODUCTION
General
This proxy statement is being furnished to the stockholders of VSE
Corporation, a Delaware corporation ("VSE"), in connection with the
solicitation of proxies by the board of directors of VSE (the "Board")
for use at VSE's annual meeting of stockholders to be held on
Saturday, May 6, 1995, commencing at 10:00 a.m., Washington, D.C.
time, at the Value Engineering Building, 2550 Huntington Avenue,
Alexandria, Virginia 22303-1499, and at any adjournments thereof (the
"Meeting") for the purposes specified in the accompanying notice of
meeting.
The mailing address of VSE's principal executive offices is 2550
Huntington Avenue, Alexandria, Virginia 22303-1499. VSE's telephone
number is (703) 960-4600. This proxy statement and the accompanying
notice and form of proxy are first being provided to the holders of
VSE common stock, par value $.05 per share (the "stockholders"), on or
about April 7, 1995.
The close of business on March 22, 1995, is the record date for the
determination of stockholders entitled to notice of, and to vote at,
the Meeting. Holders of a majority of the outstanding VSE common
stock, par value $.05 per share (the "Stock"), as of March 22, 1995,
must be present at the Meeting, either in person or represented by
proxy, to constitute a quorum for the transaction of business. As of
the close of business on March 22, 1995, there were 863,167 shares of
Stock outstanding and approximately 360 stockholders of record. Each
stockholder is entitled to one vote for each share of Stock held of
record as of the close of business on March 22, 1995, on all matters
which may be submitted to the stockholders at the Meeting.
Voting and Revocation of Proxies
All Stock represented by valid proxies will be voted at the Meeting
in accordance with the directions on the proxies. If no direction is
indicated on a proxy, the Stock represented thereby will be voted for
(a) the election as VSE directors of the nine nominees listed below
under "ELECTION OF DIRECTORS" and (b) the ratification of the
appointment of Arthur Andersen LLP as VSE's independent certified
public accountants for the year ending December 31, 1995, all as
discussed below.
Votes cast by proxy or in person at the Meeting will be tabulated
by the inspectors of election appointed for the Meeting. The
inspectors of election will treat abstentions as Stock that is present
and entitled to vote for purposes of determining the presence of a
quorum, but as unvoted for purposes of determining the approval of any
matter submitted to stockholders for a vote. If a broker indicates on
a proxy that such broker does not have discretionary authority as to
certain Stock to vote on a particular matter, such shares will not be
considered as present and entitled to vote with respect to such
matter.
As of the date of this proxy statement, the Board does not intend
to present, and has not been informed that any other person intends to
present, any matter for action at the Meeting other than those
specifically referred to herein. If, however, any other matters are
properly presented to the Meeting for action, the proxy holders will
vote the proxies, which confer authority on such holders to vote on
such matters, in accordance with their best judgment. The persons
named as attorneys-in-fact in the proxies are VSE officers.
A stockholder returning a proxy to VSE may revoke it at any time
before it is exercised by granting a later proxy with respect to the
same Stock or by communicating such revocation in writing to VSE's
secretary. In addition, any stockholder who has executed a proxy but
attends the Meeting may cancel a previously given proxy by voting in
person whether or not the proxy has been revoked in writing.
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information on beneficial
ownership of Stock, as of March 22, 1995, (a) by each person known by
VSE to beneficially own more than 5% of the then outstanding Stock,
(b) by each VSE director, (c) by each of the named VSE executive
officers, and (d) by all VSE directors and executive officers as a
group. The voting and investment powers of the Stock listed below are
held solely by the reported owner unless otherwise indicated.
<CAPTION>
Amount of Beneficial Percent of
Name of Beneficial Owner Ownership (Shares) Outstanding Stock
<S> <C> <C>
VSE Corporation
ESOP/401(k) Plan 345,309 (1) 40.0%
E. Barrineau 2,492 *
B. S. Bartholomew 5,954 *
Sarah Clements 0 0
D. M. Ervine 11,756 1.4%
E. V. Karl 1,481 *
C. S. Koonce 155,552 (2) 18.0%
J. M. Knowlton 5,593 *
J. M. Marchello 1,500 *
R. B. McFarland 3,685 *
D. M. Osnos 0 0
J. D. Ross 0 0
B. K. Wachtel 11,700 (3) 1.4%
C. S. Weber 19,298 (4) 2.2%
H. P. Weinberg 4,080 *
All directors and executive
officers as a group (5) 282,241 32.7%
<FN>
* Represents less than 1% of outstanding stock.
(1) These shares are held in trust for the benefit of the
participants of the Plan. Two VSE officers serve as trustees of the
Plan. The participants of the Plan have voting power over 286,159
shares allocated to their respective ESOP accounts, while the two Plan
trustees (M. A. Robin and C. S. Weber) share voting and investment
power over the remaining 59,150 shares. The mailing address for the
Plan is 2550 Huntington Avenue, Alexandria, Virginia 22303-1499.
(2) Mr. Koonce's mailing address is 6550 Rock Spring Drive, Suite
600, Bethesda, Maryland 20817. Children of Mr. Koonce are the
beneficial owners of an additional 29,800 shares. Mr. Koonce
disclaims beneficial ownership of the shares owned by his children.
(3) Includes 400 shares held by Wachtel & Co. Inc.
(4) Excludes 59,150 shares beneficially owned or controlled as a
trustee of the ESOP/401(k) Plan.
(5) The group, including the two trustees of the ESOP/401(k) Plan,
consists of 15 persons. The 279,304 shares beneficially owned include
59,150 shares beneficially owned or controlled by the two trustees of
the ESOP/401(k) Plan.
</FN>
</TABLE>
Item No. 1
Election of Directors
Nominees
At the Meeting, stockholders will elect, by a plurality of the
votes cast, nine VSE directors, who will constitute the entire Board.
Each nominee listed below is currently serving as a VSE director and
was elected by the stockholders at the last annual meeting of
stockholders, except for Jimmy D. Ross, who was appointed as a VSE
director by the Board in July 1994. Each nominee elected as a
director will serve until the next annual meeting of stockholders and
until his or her successor is elected and qualified. If any nominee
should become unable to serve for any reason, the proxies will be
voted for such substitute nominee as shall be designated by the Board.
<TABLE>
The nine nominees for election as VSE directors and certain
information regarding them are as follows:
<CAPTION>
Director
Name and Principal Occupation Age since
<S> <C> <C>
Harold P. Weinberg 69 1961
VSE officer from 1963 until retirement in 1991.
David M. Osnos 63 1968
Senior partner of Arent Fox Kintner Plotkin &
Kahn, attorneys-at-law (for more than the past
five years); also a director of EastGroup
Properties and Washington Real Estate
Investment Trust.
Sarah Clements 84 1987
Private consultant and formerly Deputy for
Material Acquisition Management in the Office
of the Assistant Secretary of the Army (RDA)
(1975 to 1981). Before retiring in 1981, she
served for 35 years in the Federal Aviation
Administration and the Department of the Army.
Donald M. Ervine 58 1987
VSE Chairman of the Board and Chief Executive
Officer since 1992, VSE President and Chief
Operating Officer from 1988 to 1992, and prior
thereto, senior program manager, vice
president, senior vice president, and executive
vice president since 1983.
Richard B. McFarland 61 1988
VSE President and Chief Operating Officer since
February 1993 and a private consultant to VSE
from 1988 to 1993; formerly executive director
of the Navy Ships Parts Control Center (1982 to
1988). Before retiring in 1988, he served for
25 years in the Department of the Navy.
Joseph M. Marchello 61 1990
Professor at Old Dominion University in
Norfolk, Virginia, chemical engineering;
Chancellor of the University of Missouri-Rolla
from 1976 to 1985 and President of Old Dominion
University from 1985 to 1988.
<CAPTION>
Director
Name and Principal Occupation Age since
Bonnie K. Wachtel 39 1991
Vice President and General Counsel, Wachtel &
Co. Inc., Brokers and Underwriters (for more
than the past five years). Also a director of
Integral Systems, Inc., SSE Telecom, Inc.,
Information Analysis, Inc., and Data
Measurement Corporation.
Calvin S. Koonce 57 1992
President, Koonce Securities, Inc., a
securities broker/dealer firm (for more than
the past five years). Also a director of
Exotech Inc.
Jimmy D. Ross 58 1994
General, U. S. Army (Ret.). Since retiring in
1994 after 36 years of military service,
General Ross has served as Senior Vice
President, Biomedical Services, for the
American Red Cross.
</TABLE>
Committees of the Board
The audit committee of the Board met three times during 1994. The
committee consists of Mr. Marchello, Chairman, Mrs. Clements, Mr.
Ross, and Mr. Weinberg. The audit committee is primarily concerned
with the effectiveness of VSE accounting policies and practices,
financial reporting, and internal controls. The committee recommends
to the Board the firm to be appointed as VSE's independent certified
public accountants, subject to ratification by the stockholders, and
reviews the scope of the annual examination of VSE's books and
records. The committee also reviews the audit findings and
recommendations of the independent public accountants, considers the
organization and work of VSE's internal audit function, and monitors
the extent to which the findings and recommendations of these groups
have been implemented.
The compensation committee of the Board met two times during 1994.
The compensation committee consists of Mr. Koonce, Chairman, Mrs.
Clements, Mr. Marchello, Mr. Osnos, Mr. Ross, and Mr. Weinberg. The
committee is primarily concerned with corporate compensation policies,
including incentive compensation, the compensation of the chief
executive officer, and the compensation of certain other executive
officers and employees.
The nominating committee of the Board met one time during 1994.
The committee consists of Mr. Osnos, Chairman, Ms. Wachtel and Mr.
Weinberg. The committee is primarily concerned with making
recommendations to the Board with respect to nominees to be proposed
for election as directors. Stockholders of VSE may recommend persons
to be nominated for election as directors of VSE at the Meeting. To
be considered, such recommendation must be submitted in accordance
with VSE's by-laws and must be received in writing by the secretary of
VSE no later than ninety (90) days before the date in the current year
which corresponds to the date on which the Meeting was held during the
immediate prior year.
The planning committee of the Board met two times during 1994. The
committee consists of Mr. McFarland, Chairman, Mrs. Clements, Mr.
Koonce, Mr. Marchello, and Ms. Wachtel. The committee is primarily
concerned with reviews and recommendations to the Board with respect
to business development and capitalization.
VSE's chairman and chief executive officer (Mr. Ervine) is an ex
officio member of all standing committees of the Board, including the
audit, compensation, nominating and planning committees. Mr. Ervine
does not participate in meetings or discussions of the compensation
committee concerned with establishing his salary or bonus.
Board Meetings and Director Compensation
During 1994 the Board held six regular meetings. No director
attended fewer than 75% of the aggregate of (a) the total number of
Board meetings held (during the period during which he or she has been
a director) and (b) the total number of meetings held by all
committees of the Board on which he or she served.
Directors of VSE, excluding those who are also VSE officers,
receive an annual retainer of $10,000 plus $600 per meeting for each
regular Board meeting or committee attended, not to exceed an
aggregate of $17,200 in retainer and meeting fees for the year.
Directors who are also VSE officers (Mr. Ervine and Mr. McFarland) are
compensated at a rate equal to one-half of the rate of non-employee
directors, not to exceed an aggregate of $8,600 for the year.
Pursuant to a consulting agreement between Ms. Clements and VSE,
Ms. Clements agreed to provide technical and management consulting
services to VSE. VSE agreed to pay consulting fees at the rate of $60
per hour and to reimburse certain related out-of-pocket expenses.
Pursuant to a consulting agreement between JMM Corporation ("JMM"),
which is wholly owned by Mr. Marchello, and VSE, JMM agreed to provide
technical and management consulting services to VSE. VSE agreed to
pay consulting fees at the rate of $150 per hour for up to the first
20 hours of consulting services rendered in any one month and at the
rate of $50 per hour for each hour in excess of 20 hours in any month,
and to reimburse certain related out-of-pocket expenses.
Pursuant to a consulting agreement between Mr. Ross and VSE, Mr.
Ross agreed to provide technical and management consulting services to
VSE. VSE agreed to pay consulting fees at the rate of $100 per hour,
not to exceed $50,000 per year.
Pursuant to a consulting agreement between Mr. Weinberg and VSE,
Mr. Weinberg agreed to provide technical and management consulting
services to VSE. VSE agreed to pay consulting fees at the rate of $60
per hour and to reimburse certain related out-of-pocket expenses.
For services rendered to VSE during 1994, Ms. Clements, Mr.
Marchello, Mr. Ross, and Mr. Weinberg received consulting fees and
reimbursements for certain related out-of-pocket expenses in the
aggregate amounts of approximately $25,000, $8,000, $3,000 and
$32,000, respectively (either under the above-discussed agreements or
under predecessor agreements with substantially similar terms).
While VSE has not yet determined whether to extend or replace the
above-discussed consulting agreements with Ms. Clements, Mr.
Marchello, Mr. Ross, and Mr. Weinberg, VSE expects that such
agreements would be extended or that substantially similar agreements
would be entered into with the named directors. VSE believes that the
fees payable under the consulting agreements are no more than would be
paid for similar services to non-affiliated parties.
Certain Relationships and Related Transactions
There is no family relationship between any director or executive
officer of VSE and any other director or executive officer of VSE.
The law firm of Arent Fox Kintner Plotkin & Kahn, of which Mr.
Osnos is a senior partner, has represented and is expected to continue
to represent VSE on various legal matters.
See "Board Meetings and Director Compensation" above for a
description of certain consulting agreements between VSE and directors
Mrs. Clements, Mr. Marchello, Mr. Ross, and Mr. Weinberg.
VSE and the trustees of its employee benefit plans effect certain
of their transactions in VSE stock and employee benefit plan
investments, respectively, through Wachtel & Co., Inc., of which Ms.
Wachtel is a director, officer and shareholder, and through Koonce
Securities, Inc., which is wholly owned by Mr. Koonce.
Item No. 2
Appointment of Independent Certified Public Accountants
The Board on the recommendation of its Audit Committee has
appointed the firm of Arthur Andersen LLP to be VSE's independent
certified public accountants for the year ending December 31, 1994,
and recommends to stockholders that they vote for ratification of that
appointment. Although not required to do so, the Board has determined
that it would be desirable to request approval of this appointment by
stockholders. The notification of the appointment of VSE's
independent certified public accountants will require the affirmative
vote by the holders of a majority of the outstanding Stock present in
person or represented by proxy at the Meeting. If such approval is
not received, the Board will reconsider the appointment.
In 1994 Arthur Andersen LLP's services included an examination of
VSE's consolidated financial statements, the financial statements of
certain subsidiaries and benefit plans, and tax consulting.
A representative of Arthur Andersen LLP is expected to attend the
Meeting, will have an opportunity to make a statement, if he or she
desires to do so, and will be available to respond to appropriate
questions.
Compensation Committee Report
In December 1992 the Board established a standing compensation
committee to (a) review corporate compensation policies, including
incentive compensation, (b) set the compensation of the chief
executive officer, and (c) review the compensation of certain other
executive officers and employees. Prior to 1992 the Board did not
have a separate compensation committee or committee of similar
function.
Compensation Philosophy
VSE's overall compensation philosophy is based on aligning
employee compensation with industry standards and with financial
performance objectives established by the board of directors. Under
the supervision of the committee, VSE has established compensation
policies which are designed to (a) attract and retain qualified
executive and corporate officers and (b) link total executive
compensation to specific corporate goals and to the specific
individual goals appropriate for each executive and corporate officer.
The key elements of VSE executive compensation are base salary
and an annual performance bonus. The corporation does not have a
long-term incentive plan. The committee intends to review alternative
proposals relating to long-term incentive plans at a future date and
may recommend the adoption of a plan at an appropriate time.
Base Salary
The base salaries for executive officers and other corporate
officers are based primarily on comparability to the range of
compensation paid by companies of similar size and industry, based on
commercially available wage and salary surveys. Size is determined
primarily by reference to annual revenues and number of employees.
VSE's industry group is engineering and technical services (SIC Code
8711). National and geographic differences in compensation are
considered based on the executive's primary area of operations and
responsibility. The company targets a salary range generally between
the 25th and the 50th percentile indicated by such surveys.
During 1993 the committee approved a compensation plan whereby
salary ranges and ceilings were set for each of six specified
executive and corporate officer pay grades. The intent of this policy
was to enhance corporate competitiveness by (a) freezing base salaries
within a fixed salary range and (b) emphasizing the compensation
incentive provided by the performance bonus program.
Performance Bonus
Consistent with the emphasis placed on competitiveness by holding
salary increases in check, the committee approved a performance bonus
plan in 1993 based on achieving competitive corporate and business
unit goals. This plan provides for the payment of a performance bonus
not to exceed thirty percent (30%) of base salary on meeting certain
specified performance criteria. VSE's previous bonus plan provided
for a bonus range of approximately five to fifteen percent (5 to 15%)
of base salary.
The performance criteria or factors used to administer the
incentive bonus program are established with the executive officer or
manager at the beginning of each year. The performance factors are
weighted approximately as follows: 20% on achieving corporate revenue
and profit targets, 20% on achieving business unit revenue and profit
targets, 15% on achieving budgeted efficiency ratios or cost reduction
targets within a business unit, and 45% on achieving specified
performance objectives within the business unit, such as proposals
submitted and won, new business development, and total quality
management.
Except for the 20% weighting factor assigned for corporate
revenue and profit goals, the factors and weightings used to measure
the performance of an individual executive or corporate officer depend
on the conditions and corporate objectives with respect to the
business unit or administrative function in which the executive or
corporate officer works.
All Other Compensation
The executive and corporate officers of VSE are entitled to
participate in all of the company's fringe benefit programs, including
the VSE ESOP/401(k) plan, which is an IRS qualified plan available to
all eligible employees. Amounts contributed to the VSE ESOP/401(k) on
behalf of the named executive officers are included in the "Summary
Compensation Table."
During 1994 the Board adopted a non-qualified Deferred
Supplemental Compensation Plan (the "DSC Plan") for all officers of
the corporation to replace the former deferred compensation plan (the
"DCU Plan"). The DSC Plan provides, at the discretion of the Board,
for an annual bonus pool not to exceed twelve percent of consolidated
net income for the year. The annual bonus pool is allocated to the
participant accounts of corporate officers in proportion to the ratio
of the officer's performance bonus for the year (see "Performance
Bonus" above) to total officer performance bonuses for the year.
Pursuant to the DSC Plan, a bonus pool of approximately $125,000 was
authorized for 1994 for allocation to 26 participant officer accounts.
Benefits under the DSC Plan and predecessor DCU Plan are payable to
the participant on retirement or resignation, subject to a vesting
schedule, non-competition agreement, and other plan provisions, or in
the event of a change of control of the corporation. Amounts
contributed to the DSC Plan during 1994 and to the DCU Plan during
1993 and 1992 on behalf of the named executive officers are included
in the Summary Compensation Table.
Chief Executive Officer Compensation
During 1994 and 1993 VSE's chairman and chief executive officer
("CEO") was compensated in a manner consistent with the foregoing.
The compensation committee recommended a base salary of approximately
$200,000 per annum for the CEO based on the salaries paid for CEO's at
similarly situated companies. See "Base Salary" discussion.
The CEO's performance bonus for 1994 and 1993 was determined by
the committee on the basis of five factors of approximately equal
weight: revenue growth, return on equity, return on sales, leadership,
and long-term shareholder goals. The first three factors are measured
based on interim consolidated financial statements or management
reports which are subject to adjustment based on annual audited
financial statements. The last two factors are subjective measures
evaluated by the committee in executive session. Based on its
evaluation, the committee recommended a performance bonus equal to 29%
and 23% of the CEO's base salary for 1994 and 1993, respectively. The
increase in the recommended performance bonus for 1994 as compared to
1993 was based primarily on the CEO's performance in retaining key
customers and revenues and in increasing proposal backlog and bidding
opportunities, notwithstanding a decline in Department of Defense
spending. See "Performance Bonus" discussion.
During 1992 VSE's former CEO and founder retired, and VSE's
president was appointed as the new CEO effective as of October 31,
1992. The Board took no action with respect to adjusting the
compensation of the new CEO during 1992, and accordingly, the
compensation reported for the CEO in the "Summary Compensation Table"
for 1992 is the compensation previously established for the president.
The salary and bonus of the president in 1992 were set by the former
CEO primarily on the basis of comparable survey information and on the
CEO's evaluation of the president's performance and contribution.
COMPENSATION COMMITTEE:
Calvin S. Koonce (Chair)
Sally Clements
Joseph M. Marchello
David M. Osnos
Jimmy D. Ross
Harold P. Weinberg
Compensation Committee Interlocks and Insider Participation
The compensation committee has five members (Mr. Koonce, Mrs.
Clements, Mr. Marchello, Mr. Osnos, Mr. Ross, and Mr. Weinberg),
including four directors (Mrs. Clements, Mr. Marchello, Mr. Ross, and
Mr. Weinberg) who provide consulting services to VSE. See "Board
Meetings and Director Compensation" above.
Mr. Koonce is a major stockholder of VSE. See "Security
Ownership of Certain Beneficial Owners and Management." The trustees
of VSE's employee benefit plans effect certain of their transactions
through Koonce Securities, Inc., which is wholly owned by Mr. Koonce.
Mr. Osnos is a senior partner of the law firm of Arent Fox
Kintner Plotkin & Kahn, which firm has represented and is expected to
continue to represent VSE on various legal matters. See "Certain
Relationships and Related Transactions."
Mr. Weinberg was a senior vice president of VSE until he retired
in 1991.
VSE's chairman and chief executive officer (Mr. Ervine) is an ex
officio member of all standing committees of the Board, including the
compensation committee. Mr. Ervine does not participate in meetings
or discussions of the compensation committee concerned with
establishing his salary or bonus.
<TABLE>
Summary Compensation Table
The following table reports the compensation paid for the past
three years for each of the five most highly compensated VSE executive
officers, including the chief executive officer.
<CAPTION>
Name and Principal Annual Compensation All Other
Position Year Salary Bonus Compensation (3)
<S> <C> <C> <C> <C>
Donald M. Ervine 1994 $203,700 $59,100 $35,600
Chairman of the Board and 1993 203,700 47,700 48,400
Chief Executive Officer 1992 159,700 16,000 30,400
Richard B. McFarland 1994 $146,500 $49,400 $30,200
President and Chief 1993 139,500 37,000 21,900
Operating Officer (ap-
pointed in February 1993)
Byron S. Bartholomew 1994 $139,400 $15,600 $11,900
Executive Vice President 1993 139,400 16,500 24,200
1992 135,700 12,200 13,300
Edwin Barrineau 1994 $115,000 $13,600 $ 7,500
Senior Vice President 1993 115,000 13,900 71,000 (4)
1992 111,300 11,100 11,900
Craig S. Weber 1994 $108,200 $13,100 $11,700
Senior Vice President, 1993 108,200 14,400 18,500
Chief Financial Officer, 1992 108,200 8,700 10,400
Secretary and Treasurer
<FN>
(1) The column "Other Annual Compensation" has been omitted because
the amounts paid by VSE, if any, aggregate less than the minimum
disclosure levels.
(2) The column "Long-Term Compensation" has been omitted because VSE
has no long-term compensation plans.
(3) The column headed "All Other Compensation" includes contributions
made to two "defined contribution" employee benefit plans (a) the VSE
ESOP, which is generally available to all VSE employees, and (b) DSC
Plan or its predecessor. See "Compensation Committee Report." This
column also includes (c) director and committee meeting fees paid to
named executive officers. See "Board Meetings and Director
Compensation." The component amounts for 1994 for named executive
officers in the order listed above were approximately as follows (a)
$4,717, $3,919, $3,648, $2,628, and $2,675; (b) $22,302, $17,705,
$5,586, $4,883, and $4,709; and (c) $8,600, $8,600, $2,650, $0 and
$4,300.
(4) Includes cash payment of approximately $49,000 in lieu of
vacation.
</FN>
</TABLE>
Performance Graph
Set forth below is a line graph comparing the cumulative total
return of VSE Stock with (a) a performance index for the broad market
in which VSE Stock is traded and (b) a published industry index. VSE
Stock is traded on the Nasdaq Stock Market, and VSE's 4-digit industry
SIC Code is 8711, Engineering Services. Accordingly, the performance
graph compares the cumulative total return for VSE Stock with (a) an
index for the Nasdaq Stock Market (U. S. companies) ("Nasdaq Index")
and (b) a published industry index for SIC Code 8711 ("Industry
Index").
Total Return to Shareholders*
[insert graph]
* Total return assumes reinvestment of dividends and assumes $100
invested on January 1, 1989, in Nasdaq Stock Market, SIC 8711 -
Engineering Services, and VSE Stock.
Performance Graph Table
VSE Corporation 100 97 76 122 159 197
SIC Code Index 100 96 117 97 92 65
Nasdaq Index 100 81 104 105 126 132
Stockholder Proposals
Proposals of stockholders intended to be presented at VSE's 1996
annual meeting of stockholders must be received by VSE's secretary at
its principal executive offices, 2550 Huntington Avenue, Alexandria,
Virginia 22303-1499, by no later than the close of business on
December 7, 1995, to be considered for inclusion in VSE's proxy
material relating to such meeting.
Other Matters
VSE will bear the costs of the solicitation of proxies for use at
the Meeting. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone and telegram by directors,
officers and employees of VSE. Arrangements will also be made with
brokerage houses and other custodians, nominees and fiduciaries who
are record holders of Stock for the forwarding of solicitation
material to the beneficial owners of the shares. VSE will, on the
request of record holders, pay their reasonable expenses for
completing the mailing of such materials to the beneficial owners.
By Order of the Board of Directors,
C. S. Weber
C. S. Weber, Secretary
April 7, 1995
