Exhibit 10.4

DYNAMICS RESEARCH CORPORATION SPECIAL SEVERANCE PLAN

Dynamics Research Corporation’s (DRC) Special Severance Plan will, in the event
of a Change of Control, resulting from protect selected and participating senior
executives by providing a generous compensation arrangement should they be
adversely affected by the Change of Control, and help DRC retain qualified
employees and maintain a stable work environment.

SECTION 1: DEFINITIONS

The following terms shall have the meanings set forth below:

 

1.1. Board – The Board of Directors of the Company.

 

1.2. Cause – (a) an Employee’s willful and continued failure to substantially
perform his or her duties, or (b) an Employee’s willful engagement in conduct
that is demonstrably and materially injurious, monetarily or otherwise, to a DRC
Company or a Successor Employer.

 

1.3. Change in Control – Any of the following events:

(1) any one person or entity, or more than one person or entity acting as a
group, acquires ownership of stock of the Company or any majority subsidiary of
the Company for which the Employee is providing services (a “Change of Control
Company”) that, together with stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of the
stock of any such Change of Control Company;

(2) any one person or entity, or more than one person or entity acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person(s) or entity(ies) ownership of
stock of any Change of Control Company possessing at least 30 percent or more of
the total voting power of the stock of such Change of Control Company;

(3) a majority of members of any Change of Control Company’s board of directors
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of such Change of Control
Company’s board of directors before the date of the appointment or election; or

(4) any one person or entity, or more than one person or entity acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person(s) or entity(ies)) assets from any
Change of Control Company that have a total gross fair market value equal to or
more than at least 40 percent of the total gross fair market value of all of the
assets of such Change of Control Company immediately before such acquisition or
acquisitions (where gross fair market value means the value of the assets of the
Change of Control Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets).

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1.4. Company – Dynamics Research Corporation, a Massachusetts corporation, and
its successors.

 

1.5. DRC – Dynamics Research Corporation and all of its Subsidiaries.

 

1.6. Effective Date – December 1, 2013, except that with respect to Employees
who as of such date are covered by a substantially similar plan, the Effective
Date will be immediately following expiration of that plan on December 31, 2013.

 

1.7. Employee – A person whose participation in the Plan has been authorized by
the Board or its designated representative. An Employee shall automatically
cease to be an Employee and a participant in the Plan if and when, prior to a
Change in Control with respect to the Employee, his or her employment with DRC
terminates for any reason.

 

1.8. Employer – The Company group, division, or operating unit to which an
Employee is rendering substantially all of his or her services from time to
time.

 

1.9. ERISA – The Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

 

1.10. Good Reason – Good Reason. For purposes of this Plan, “Good Reason” shall
mean:

(1) A material diminution in the Employee’s Pay;

(2) A change in the geographic location at which the Employee must perform the
majority of services of more than 50 miles or excessive travel substantially in
excess of travel requirements prior to a Change of Control unless consented to
by Employee.

(3) A significant diminution in the duties of Employee from or the assignment of
duties on an ongoing and continuous basis that are inconsistent with Employee’s
duties that are performed immediately prior to the Change of Control (provided
that changes in title, changes due to integrating certain companies, changes to
the business units or personnel reporting to Employee or changes in who Employee
reports to shall not be deemed to constitute a significant diminution in an
Employee’s duties);

For Good Reason to exist, the Employee must provide notice to the Employer of
the existence of any of the foregoing conditions within ninety (90) days of the
initial existence of the condition, and the Employer shall upon such notice
shall have a period of thirty (30) days during which it may remedy the condition
(and upon such remedy Good Reason shall be deemed not to have existed).

 

1.11. Month of Pay – The Employee’s Pay prorated for one month in accordance
with the Employee’s regular payroll procedures.

 

1.12. Pay – The sum of (a) the Employee’s current yearly salary, plus (b) the
greater of the Employee’s most recent annual incentive compensation target award
immediately prior to the Change in Control or the Employees most recent annual
incentive compensation target award immediately prior to the Severance Date.

 

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1.13. Plan – The DRC Special Severance Plan, as set forth herein and as it may
be amended from time to time. All such amendments shall be incorporated herein
by reference as of the date of such amendment.

 

1.14. Plan Administrator – The Compensation Committee of the Board of Directors
of the Company, or such individuals or others as they shall appoint to
administer the Plan.

 

1.15. Salary – The greater of an Employee’s annual base salary rate immediately
prior to the applicable Change in Control or the Employee’s annual base salary
rate immediately prior to the Severance Date. Salary does not include bonuses or
any other remuneration.

 

1.16. Severance – The termination, while the Employee is an Employee, of his or
her employment with the Company and the Successor Employers on or after the
Effective Date and within the period of time after the applicable Change in
Control specified for such Employee as the Coverage Duration Period on Schedule
A, (i) by the Company and the Successor Employers other than for Cause, or
(ii) by the Employee for Good Reason. An Employee shall not be considered to
have incurred a Severance if his or her employment is discontinued by reason of
(a) the Employee’s voluntary termination of employment other than for Good
Reason, (b) the Employee’s death, (c) a physical or mental condition that causes
the Employee to be unable to substantially perform his or her duties including,
without limitation, any condition that entitles the Employee to benefits under
any sick pay or disability income policy or program of a the Company or a
Successor Employer, (e) the Employer’s requiring the Employee to transfer to
another office, facility, or job location fifty (50) miles or less from the
Employee’s then current office, facility, or job location.

 

1.17. Severance Date – The effective date of an Employee’s Severance from
employment with all DRC Companies and Successor Employers.

 

1.18. Severance Pay – Payments made to Employees pursuant to Section 2.1 and
2.2.

 

1.19. Successor Employers – After a Change in Control of an Employer, the
Employer, any company or other entity that has acquired or acquires the
Employer, and all affiliates (as such term is defined in the regulations under
the Securities Act of 1933) of the Employer or of any company or other entity
that has acquired or acquires the Employer. “Successor Employer” means any of
the Successor Employers.

SECTION 2: BENEFITS

 

2.1. Each Employee who incurs a Severance shall be entitled to receive Severance
Pay equal to the number of Months of Pay set forth on Schedule A attached hereto
for such Employee. However, with respect to that portion of Severance Pay
attributable to the Employee’s annual incentive compensation pursuant to
Section 1.12(b), Severance Pay shall not include any amount excess of the annual
amount of such compensation (even if the Employee’s Months of Pay exceeds 12)
and for avoidance of doubt, such annual amount of incentive compensation shall
be prorated for any Employee whose Months of Pay is fewer than 12.

 

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2.2. If the Employee is covered under a health insurance plan of the Company
immediately prior to the Severance Date, then the Employee shall be paid as
additional severance a lump sum equal to the Company’s contribution to the
monthly premium cost of such coverage multiplied by the number of Months of Pay
used in Section 2.1 to compute the amount of Severance Pay.

 

2.3. No Employee shall be eligible to receive Severance Pay or any other
benefits under the Plan unless he or she first executes a valid and legally
binding release in writing, in a form and manner prescribed by the Plan
Administrator, releasing Dynamics Research Corporation, the Successor Employers,
and their employees, officers, and directors from claims and liabilities of any
kind relating to his or her employment.

 

2.4. Severance Pay will be paid to eligible Employees in one lump sum, less
required legal deductions.

 

2.5. If the Company or a Successor Employer are or should become obligated by
law or by contract to pay an Employee severance pay, salary continuance, notice
pay, a termination indemnity, or the like, or if a the Company or a Successor
Employer are or should become obligated by law or by contract to provide advance
notice of separation (“Notice”) to an Employee, then any Severance Pay otherwise
payable under the Plan to the Employee shall be reduced by the amount of any
such severance pay, salary continuance, notice pay, termination indemnity, or
the like, and by the amount of compensation received with respect to any Notice
period (including any Notice period which may be required under the Worker
Adjustment and Retraining Notification Act) during which the Employee is not
required to work.

SECTION 3: CLAIMS OPERATION AND INTERPRETATION

 

3.1. The Plan shall be interpreted, administered, and operated by the Plan
Administrator, who shall have complete authority, in his or her sole discretion,
to determine who is eligible for benefits under the Plan, to interpret the Plan,
to prescribe, amend, interpret and rescind rules and regulations relating to the
Plan, and to make all of the determinations necessary or advisable for the
administration of the Plan.

 

3.2. All questions of any character whatsoever arising in connection with the
interpretation of the Plan or its administration or operation shall be submitted
to and settled and determined by the Plan Administrator in an equitable and fair
manner in accordance with the procedure for claims and appeals described in
Section 3.4. Subject to the provisions of Section 6.4, any such settlement and
determination shall be final and conclusive, and shall bind and may be relied
upon by the Company, each of the Employees, and all other parties in interest.

 

3.3. The Plan Administrator may delegate any of their duties hereunder to such
person or persons as they may designate from time to time.

 

3.4.

An Employee shall file a written claim with the Plan Administrator in order to
receive severance benefits under the Plan. The Plan Administrator shall, within
sixty (60) days after receipt of the written claim, send a written notification
to the Employee as to its disposition. In the event the claim is wholly or
partially denied, the written notification shall (a) state the specific reason
or reasons for the denial, (b) make specific reference to

 

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  pertinent Plan provisions on which the denial is based, (c) provide a
description of any additional material or information necessary for the Employee
to perfect the claim and an explanation of why such material or information is
necessary, and (d) set forth the procedure by which the Employee may appeal the
denial of his or her claim. In the event an Employee wishes to appeal the denial
of his or her claim, he or she may request a review of the denial by making
application in writing to the Plan Administrator within sixty (60) days after
receipt of the denial. The Employee (or his or her duly authorized legal
representative) may, upon written request to the Plan Administrator, review any
documents pertinent to his or her claim, and submit in writing issues and
comments in support of his or her position. Within sixty (60) days after receipt
of a written appeal (unless special circumstances, such as the need to hold a
hearing, require an extension of time, but in no event more than one hundred
twenty (120) days after such receipt) the Plan Administrator shall notify the
Employee of the final decision. The final decision shall be in writing and shall
include specific reasons for the decision, written in a manner calculated to be
understood by the claimant, and specific references to the pertinent Plan
provisions on which the decision is based. In the event the Employee wishes to
appeal from the Plan Administrator’s decision, the Employee may submit the claim
to final and binding arbitration, in accordance with Section 6.4, by giving
written notice to the Plan Administrator within sixty (60) days after receipt of
the Plan Administrators decision. No arbitration for benefits under the Plan may
be commenced unless and until the Employee has submitted a written claim for
benefits, has been notified that the claim has been denied, has filed a written
request for review of the denied claim, and has been notified in writing that
the denial of the claim has been affirmed, all in accordance with the claims
procedure described above.

SECTION 4: PLAN MODIFICATION OR TERMINATION

 

4.1. The Plan shall terminate December 31, 2015, if no Change of Control has
occurred by that date. Notwithstanding the foregoing, in the event there has
been a Change in Control of an Employer prior to the termination of the Plan,
the Plan shall terminate with respect to each Employee of such Employer at the
end of the period following such Change in Control set forth on Schedule A with
respect to such Employee (the “Coverage Duration Period”).

 

4.2. The Plan may be amended by the Board at any time; provided, however, that
except as otherwise provided in Section 5.2, until the expiration date or
termination date of the Plan, no amendment may be made which would be adverse to
the eligibility or level of benefits in Section 2 for any Employee or, after a
Change in Control, similarly adverse to the benefits of any Employee or to the
interests of a DRC Company.

SECTION 5: GOVERNMENT LAWS AND REGULATIONS

 

5.1. The Plan, as a “severance pay arrangement” within the meaning of
Section 3(2) (B) (i) of ERISA, is intended to be excepted from the definitions
of “employee pension benefit plan” and “pension plan” in Section 3(2) of ERISA,
and is intended to meet the descriptive requirements of a plan constituting a
“severance pay plan” within the meaning of regulations published by the
Secretary of Labor at Title 29, Code of Federal Regulations,
Section 2510.3-2(b).

 

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5.2. The Plan and the rights of Employees to Severance Pay under the Plan shall
be subject to all applicable governmental laws and regulations. Notwithstanding
any other provision of the Plan to the contrary, the Board may in its discretion
make such changes in the Plan as may be required to conform the Plan to all
applicable governmental laws and regulations.

 

5.3. The provisions of this Plan are intended not to result in the imposition of
additional tax or interest under Section 409A of the Internal Revenue Code of
1986, as amended, and such provisions shall be interpreted and administered in
accordance with such intent. Without limiting the foregoing, this Plan shall not
be amended or terminated in a manner so as to result in the imposition of such
tax or interest, any reference to “termination of employment” or similar term
shall mean an event that constitutes a “separation from service” or “involuntary
separation from service” (as the case may be) within the meaning of
Section 409A, any reimbursement of expenses shall occur no later than the end of
the calendar year following the calendar year in which the expense is incurred
(or such earlier date as applies under the Company’s business expense
reimbursement policy), each payment or installment shall be treated as a
separate payment (in order to maximize the application of payments during the
“short term deferral period” under Section 409A), and if at separation from
service the Employee is considered a Specified Employee within the meaning of
said Section 409A, then any payments hereunder that are nonqualified deferred
compensation within the meaning of said Section 409A that are to be made upon
separation from service shall not commence earlier than six (6) months after the
date of such separation from service, and any such amounts that would otherwise
be paid to the Employee within the first six months following the separation
from service shall be accumulated and paid to the Employee in a lump sum six
months and one day following the separation from service (or if the Employee
dies during such six-month period, as soon as practical following the date of
death). The foregoing notwithstanding, the Company shall not be liable to any
person for the tax consequences of any failure to comply with the requirements
of Section 409A.

To the extent that severance payments or benefits pursuant to this Plan are
conditioned upon the execution and delivery by Employee of a release of claims,
Employee shall forfeit all rights to such payments and benefits unless such
release is signed, delivered and effective within sixty (60) days following the
date of Employee’s separation from service within the meaning of Section 409A.
If such release is so signed, delivered and effective, then such payments or
benefits shall be made or commence upon the business day next following the date
the release is effective; provided, however, that if such sixty (60)/ period
would end in the calendar year following the date of Employee’s separation from
service, then such payments or benefits shall be made or commence upon the later
of the date the release is effective and the first business day of such
following calendar year.

SECTION 6: GENERAL PROVISIONS

 

6.1. Nothing in the Plan shall be deemed to give any Employee the right to be
retained in the employ of any company or to interfere with the right of any
company to discharge an Employee at any time and for any lawful reason, with or
without notice or cause. In addition, nothing in the Plan shall restrict an
Employees right to terminate his or her employment at any time.

 

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6.2. Except as otherwise provided herein or by law, no right or interest of an
Employee under the Plan shall be assignable or transferable, in whole or in
part, either directly or by operation of law or otherwise, including without
limitation by execution, levy, garnishment, attachment, pledge, or any other
manner, no attempted assignment or transfer thereof shall be effective; and no
right or interest of an Employee under the plan shall be liable for, or subject
to, any obligation or liability of an Employee. When a payment is due under the
Plan to an Employee and the Employee is unable to care for his or her affairs,
payment may be made directly to his or her legal guardian or personal
representative.

 

6.3. The Company may, at any time and from time to time, without any Employee’s
consent, assign its interest in the Plan with respect to one or more Employees
to a DRC Company which shall assume all of the Company’s obligations hereunder
with respect to such Employees and, upon such assignment, the assignee shall be
substituted for the Company for all purposes under the Plan with respect to such
Employees. Any such assignment and assumption shall constitute a novation and
assignee(s) shall be substituted automatically for the Company with respect to
such Employees. Any such assignee shall have the same rights as the assignor to
further assign the Plan. In connection with any Change in Control of an
Employer, the Company may, assign its interest in the Plan with respect to any
or all affected Employees to any entity or entities that, upon the Change in
Control, will qualify as a Successor Employer, provided that such assignee
assumes all of the Company’s obligations hereunder with respect to such
Employees. Any such assignment to one or more Successor Employers shall not
prevent the transaction that results in the business of the Employer being
conducted by an entity that is not a DRC Company from constituting a Change in
Control.

 

6.4. Any dispute or controversy arising out of or relating to the Plan (or to
benefits which may be provided under the Plan), as well as any dispute or
controversy arising out of or relating to the termination of an Employee’s
employment with any Employer, including any claims based on federal, state or
local laws (including employment discrimination or wrongful dismissal laws),
shall be settled exclusively by final and binding arbitration, conducted before
a neutral arbitrator with expertise in employment law, including ERNA, in
accordance with the Voluntary Labor Association Rules of the American
Arbitration Association. In reaching a decision, the arbitrator shall interpret,
apply and be bound by the Plan and by applicable law. The arbitrator shall apply
the same ‘standard of review in disputes relating to the Plan or to Plan
benefits as a court of competent jurisdiction would apply under ERISA. The
arbitrator shall have no authority to add to, detract from, or modify the Plan
or any law in any respect. The arbitrator may grant any remedy or relief that
may be necessary to make the injured party whole, provided that in no event may
the arbitrator grant any remedy or relief that a court of competent jurisdiction
could not grant, nor any relief greater than that sought by the injured party.
Judgment may be entered on the arbitrator’s award in any court of competent
jurisdiction.

 

6.5. The Plan is unfunded. Except as provided in Section 6.3, the liability for
Severance Pay and the other obligations under the Plan are solely the
responsibility of the Company. Severance Pay shall be payable from the Company’s
general assets, and no other company shall have any responsibility or liability
under the Plan. However, the Company’s liabilities under the Plan shall be
discharged to the extent of any payment received by the Employee from any other
company made for that purpose and on the Company’s behalf or for its benefit.

 

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6.6. If any provision of the Plan shall be held void or unenforceable, the
remainder of the Plan shall remain in full force and effect, and the Plan shall
be construed as if such void or unenforceable provision were omitted; provided
that in interpreting this Plan the arbitrator shall replace such void or
unenforceable provision with an effective and legally permissible provision, the
effect of which shall be identical to, or as close as reasonably possible to,
the effect of the original provision.

 

6.7. As used in this Plan, any reference to the masculine, feminine, or neuter
gender shall include all genders, the plural shall include the singular, and the
singular shall include the plural.

 

DYNAMICS RESEARCH CORPORATION By:  

 /s/ James P. Regan

  James P. Regan   Chairman, President and Chief Executive Officer Date:
December 20, 2013

 

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Helen Tsingos

   Twelve (12) months    Eighteen (18) months

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Jen Connell

   Nine (9) months    Eighteen (18) months

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Dave Keleher

   Eighteen (18) months    Twenty-four (24) months

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Paul Strasser

   Twelve (12) months    Twenty-four (24) months

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Steve Wentzell

   Twelve (12) months    Twenty-four (24) months

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Schedule A

 

Employee

  

Months of Severance Pay

  

Coverage Duration Period

Dave Kistler

   Nine (9) months    Twenty-four (24) months