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Item 9A. Controls and Procedures

2021-03-05 compared with 2020-03-09 · 58 added, 49 removed, 86 unchanged (55% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2020, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting

4 unchanged sentences

This opinion appears in the Report of Independent Registered Public Accounting Firm set forth below.

As is consistent with interpretive guidance provided by the SEC's staff, management has elected to exclude 1st Choice Aerospace, acquired in January 2019, from its assessment and conclusion of the effectiveness of the Company's internal control over financial reporting as of December 31, 2019.

The assets and revenues of 1st Choice Aerospace constituted 4.3% and 8.4% of the Company's consolidated total assets and total revenues as of and for the year ended December 31, 2019, respectively.

Change in Internal Controls

6 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2019, and our report dated March 9, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting (“Management’s Report”).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2020, and our report dated March 5, 2021 expressed an unqualified opinion on those financial statements.

Basis for opinio n

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

5 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of 1 st Choice Aerospace, Inc., a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constituting 4.3 and 8.4 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2019.

As indicated in Management’s Report, 1 st Choice Aerospace, Inc.

was acquired during 2019.

Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of 1 st Choice Aerospace, Inc.

Definition and limitations of internal control over financial reporting

15 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Except for the "Equity Compensation Plan Information" disclosed in Item 5(e) above, the information called on by this Item 12 will be set forth in our Proxy Statement, which information is incorporated herein by reference.

Except for the "Equity Compensation Plan Information" disclosed in Item 5 above, the information called on by this Item 12 will be set forth in our Proxy Statement, which information is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

6 unchanged sentences

Supplemental Financial Statement Schedules

All schedules have been omitted because they are not applicable, not required, or the information has been otherwise supplied in the financial statements or notes to the financial statements.

The following financial statement schedule is included herein:

Sc hedule II - Valuation and Qualifying Accounts

All other schedules have been omitted because they are not applicable, not required, or the information has been otherwise supplied in the financial statements or notes to the financial statements.

See "Exhibit Index" hereinafter contained and incorporated by reference.

Form 10-K Summary

VSE Corporation and Subsidiaries

Schedule II - Valuation and Qualifying Accounts

Balance at Beginning of Year Additions Charged to Statement of Income Accounts Other (1)

Deductions Balance at End of Year

(in thousands)

Allowance for credit losses on accounts receivable

Year ended December 31, 2020 396 1,767 (2) — 670 1,493

Year ended December 31, 2019 79 244 148 75 396

Valuation allowance for deferred tax assets

Year ended December 31, 2020 1,165 6,761 (3) — — 7,926

Year ended December 31, 2019 107 1,165 — 107 1,165

(1) Represents opening allowance balance related to acquisition made during the period indicated.

(2) Increase in 2020 primarily due to allowances booked as a result of the financial impact from the COVID-19 pandemic.

(3) Increase in 2020 primarily due to full valuation allowance established against capital loss DTA in connection with the Prime Turbines stock sale and full valuation allowance against foreign tax loss DTA.

EXHIBIT INDEX

1 unchanged sentence

Per Item 601 of

Regulation S-K

Description of Exhibit

Regulation S-K Description of Exhibit Exhibit No.

In this Form 10-K

Certificate of incorporation and by-laws Restated Certificate of Incorporation of VSE Corporation dated as of February 6, 1996 (Exhibit 3.2 to Form 10-K405 dated March 25, 1996)

By-Laws of VSE Corporation as amended through December 17, 2008 (Exhibit 3.1 to Form 8-K dated December 17, 2008)

3.1 Restated Certificate of Incorporation of VSE Corporation dated as of March 4, 1996 (filed herewith)

3.2 C ertificate of Amendment of the Restated Certificate of Incorporation of VSE Corporation dated as of May 2 , 2006 (Exhibit 3.

1 to Form 10- Q dated August 1,2006)

3.3 By-Laws of VSE Corporation as amended through July 31, 2013 (Exhibit 3.1 to Form 8-K dated August 23, 2013)

4.1 Specimen Stock Certificate as of May 19, 1983 (Exhibit 4 to Registration Statement No.

2-83255 dated April 22, 1983 on Form S-2)

2-83255 dated April 22, 1983 on Form S-2) * + P

4.2 Description of VSE Corporation Securities Registered Pursuant to Section 12 of the Securities Act of 1934 (filed herewith)

Material contracts

10.1 Employment Agreement dated as of July 1, 2004, by and between VSE Corporation and Thomas R.

2 unchanged sentences

Kiernan (Exhibit 10.3 to Form 10-K dated March 3, 2009)

Amended and Restated Employment Agreement dated as of December 6, 2013 by and between VSE Corporation and Maurice A.

Gauthier (Exhibit 10.3 to Form 10-Q dated April 29, 2016) ;

Amendment Agreement dated as of December 14, 2016 by and between VSE Corporation and Maurice A.

Gauthier (Exhibit 10.1 to Form 8-K dated December 16, 2016 ;

and an Amendment Agreement dated as of March 1, 2019 by and between VSE Corporation and Maurice A.

Gauthier (Exhibit 10.3 to Form 10-K dated March 6, 2019)

10.3 Employment Agreement dated as of March 15, 2019, by and between VSE Corporation and John A.

1 unchanged sentence

10.4 Executive Employment Agreement dated as of September 24, 2019, by and between VSE Corporation and Robert Moore (Exhibit 10.1 to Form 8-K dated September 27, 2019)

10.5 Executive Employment Agreement dated as of September 21, 2020 by and between VSE Corporation and Benjamin Thomas (Exhibit 10.1 to Form 8-K dated September 23, 2020)

10.6 Executive Employment Agreement dated as of October 14, 2020 by and between VSE Corporation and Stephen D.

Griffin (Exhibit 10.1 to Form 8-K dated October 16, 2020)

10.7 Fourth Amended and Restated Business Loan and Security Agreement dated January 5, 2018 among VSE Corporation and its wholly owned subsidiaries, Citizens Bank N.A.

2 unchanged sentences

and a syndicate of nine other banks (Exhibit 10.1 to Form 8-K dated December 2, 2019)

10.9 Second Amendment to Fourth Amended and Restated Business Loan and Security Agreement dated June 29, 2020 among VSE Corporation and its wholly owned subsidiaries, Citizens Bank N.A.

and certain other banks (Exhibit 10.1 to Form 10-Q dated July 31, 2020.)

10.10 Lease Agreement by and between Metropark 7 LLC and VSE Corporation (Exhibit 10.2 to Form 8-K dated November 4, 2009)

10.11 VSE Corporation Deferred Supplemental Compensation Plan effective January 1, 1994 as amended by the Board through March 9, 2004 (Exhibit 10.2 to Form 10-Q dated April 28, 2004)

VSE Corporation 2004 Non-Employee Directors Stock Plan (Appendix B to Registrant's definitive proxy statement for the Annual Meeting of Stockholders held on May 6, 2014)

21.1 Subsidiaries of the Registrant

6 unchanged sentences

99.1 Audit Committee Charter (as adopted by the Board Of Directors of VSE Corporation on March 9, 2004)(Appendix A to Registrant's definitive proxy statement for the Annual Meeting of Stockholders held on May 3, 2004)

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

104 The cover page from VSE Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 has been formatted in Inline XBRL.

* Document has been filed as indicated and is incorporated by reference herein.

3 unchanged sentences

VSE CORPORATION

March 9, 2020

March 5, 2021 By:

Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of Registrant and in the capacities and on the dates indicated.

Director, Chief Executive

March 9, 2020

Officer and President

/s/ Thomas R.

Executive Vice President

March 9, 2020

and Chief Financial Officer

(Principal Accounting Officer)

Chairman/Director

March 9, 2020

Name Title Date

Cuomo Director, Chief Executive March 5, 2021

Cuomo Officer and President

(Principal Executive Officer)

/s/ Stephen D.

Griffin Senior Vice President March 5, 2021

Griffin and Chief Financial Officer

(Principal Financial Officer

and Principal Accounting Officer)

Eberhart Chairman/Director March 5, 2021

/s/ Calvin S.

March 9, 2020

Koonce Director March 5, 2021

Lafond Director March 5, 2021

/s/ Bonnie K.

March 9, 2020

Wachtel Director March 5, 2021

Stultz Director March 5, 2021

Potter Director March 5, 2021

Ferguson III Director March 5, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures