Sterling Holdco, Inc.

RESTRICTED STOCK AGREEMENT

 

This RESTRICTED STOCK AGREEMENT, dated as of May 16, 2012 (this “Agreement”), is
entered into by and between Sterling Holdco, Inc., a Delaware corporation (the
“Company”), and William L. Ballhaus (the “Employee”). The meaning of capitalized
terms may be found in Section 7.

 

WHEREAS, pursuant to Section 3(e)(i) of the Employment Agreement, the Employee
is entitled to receive shares of Restricted Stock having a grant date value of
$1 million from the Company, subject to time-based vesting in annual increments
of 20% per year on each of the first five anniversaries of July 25, 2011 (the
“Commencement Date”);

 

WHEREAS, the Board has approved the issuance of 1,000 shares of Restricted Stock
having a Fair Market Value of $1 million to the Employee pursuant to
Section 3(e)(i) of the Employment Agreement; and

 

WHEREAS, the Company and the Employee intend hereby to enter into this Agreement
to evidence such grant of Restricted Stock to the Employee.

 

NOW, THEREFORE, in consideration of the premises and subject to the terms and
conditions set forth herein, the parties hereto agree as follows:

 

Section 1.                Grant of Restricted Stock. Subject to the terms of
this Agreement, the Company hereby evidences and confirms its grant to the
Employee of 1,000 shares of Restricted Stock. If and to the extent that one or
more stock certificates are issued in the Employee’s name representing the
Restricted Stock, such certificates shall be delivered on behalf of the Employee
to the Secretary of the Company, to be held in custody of the Secretary of the
Company.

 

Section 2.                Vesting and Forfeiture.

 

(a)                      Based on Continued Employment. The Restricted Stock
shall vest in five equal installments on July 25th of each of 2012, 2013, 2014,
2015, and 2016 (each, a “Vesting Date”), subject to the terms and conditions of
this Agreement and the Employee’s continued employment with the Company or any
Subsidiary through the applicable Vesting Date.

 

(b)                     Effect of a Change in Control. In the event of a Change
in Control, subject to the Employee’s continued employment with the Company or
any Subsidiary from the Commencement Date to the date of the Change in Control,
any Restricted Stock that is unvested shall automatically become vested upon the
occurrence of the Change in Control.

 

 

 

 

 

(c)                      Discretionary Acceleration. The Board, in its sole
discretion, may accelerate the vesting of all or a portion of the Restricted
Stock at any time and from time to time.

 

(d)                     Effect of Termination of Employment. If the Employee’s
employment with the Company is terminated (i) in a Qualifying Termination or
(ii) by reason of the Employee’s death or Disability, the shares of Restricted
Stock that would vest on the next scheduled Vesting Date if the Employee’s
employment continued until such Vesting Date shall vest as of the date of
termination. Upon termination of the Employee’s employment with the Company and
its Subsidiaries by the Company for Cause or by the Employee without Good
Reason, any unvested Restricted Stock shall be forfeited as of the date of
termination.

 

(e)                      No Other Accelerated Vesting. The vesting provisions
set forth in this Section 2, shall be the exclusive vesting provisions
applicable to the shares of Restricted Stock and shall supersede any other
provisions relating to vesting, unless such other such provision expressly
refers to this Agreement by name and date.

 

Section 3.                Dividend Equivalents.

 

In the event that the Company declares a dividend on a share of Common Stock
following the Commencement Date and prior to the final Vesting Date, there shall
be credited to the account of the Employee in respect of each outstanding share
of Restricted Stock an amount equal to the amount of such dividend. The amount
so credited shall be deferred (without interest, unless the Board determines
otherwise) until the Vesting Date(s) applicable to the related shares of
Restricted Stock and shall be paid if and when the Vesting Date(s) occur or
forfeited upon the forfeiture of the related shares of Restricted Stock. The
Board may, in its discretion, determine, in connection with any such crediting,
whether such crediting will be in cash, additional shares of Restricted Stock or
other notional instrument; provided, that in the absence of any such
determination, such crediting will be in the same form as the dividend.

 

Section 4.                Vesting of Restricted Stock.

 

On each Vesting Date, subject to Section 8(a), the shares of Restricted Stock
that vest on such Vesting Date (the “Vested Shares”) shall cease to be subject
to this Agreement and shall instead be subject to the terms and conditions of
the Management Stockholders Agreement.

 

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Section 5.                Employee’s Representations and Warranties.

 

(a)                      Access to Information, Etc. The Employee represents and
warrants as follows:

 

(i)           the Employee understands the terms and conditions that apply to
the Restricted Stock and the risks associated with the Restricted Stock;

 

(ii)         the Employee has a good understanding of the English language; and

 

(iii)       as of the Commencement Date, the Employee is an officer or employee
of the Company or one of its Subsidiaries.

 

(b)                     No Right to Awards. The Employee acknowledges and agrees
that the grant of any Restricted Stock (i) is being made on an exceptional basis
and is not intended to be renewed or repeated; (ii) is entirely voluntary on the
part of the Company and its Subsidiaries; (iii) should not be construed as
creating any obligation on the part of the Company or any of its Subsidiaries to
offer any Restricted Stock in the future; and (iv) together with Options granted
to the Employee on February 9, 2012, is in full satisfaction of all of the
Company’s obligations to the Employee under Section 3(e) of the Employment
Agreement.

 

(c)                      Investment Intention. The Employee represents and
warrants that the Employee has been awarded the Restricted Stock and any Vested
Shares delivered in respect thereof for his own account for investment and not
on behalf of any other person or with a view to, or for sale in connection with,
any distribution of the Restricted Stock.

 

Section 6.                Restriction on Transfer; Legending.

 

(a)                      The Restricted Stock is not assignable or transferable,
in whole or in part, and it may not, directly or indirectly, be offered,
transferred, sold, pledged, assigned, alienated, hypothecated, or otherwise
disposed of or encumbered (including, but not limited to, by gift, operation of
law, or otherwise). Any purported Transfer in violation of this Section 6 shall
be void ab initio.

 

(b)                     Prior to the applicable Vesting Date, a restrictive
legend shall be placed on any certificates representing the shares of Restricted
Stock that makes clear that the shares are subject to the vesting conditions set
forth in this Agreement and a notation shall be made in the appropriate records
of the Company or any transfer agent indicating that the shares are subject to
such restrictions. Following the Vesting Date, the Vested Shares shall contain
such legends as are contemplated by the Management Stockholders Agreement.

 

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Section 7.                Certain Definitions.

 

“Agreement” means this Restricted Stock Agreement, as amended from time to time
in accordance with the terms hereof.

 

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

 

“Cause” has the meaning given in the Employment Agreement.

 

“Change in Control” means a transaction or series of transactions (other than a
Public Offering):

 

(i)           involving the sale, transfer, or other disposition for cash by the
Providence Entities to one or more persons or entities that are not, immediately
prior to such sale, affiliates of the Company or the Providence Entities, of all
or substantially all of the Common Stock of the Company beneficially owned by
the Providence Entities as of the date of such transaction; or

 

(ii)         involving the sale, transfer, or other disposition for cash of all
or substantially all of the assets of the Company and the Subsidiaries, taken as
a whole, to one or more persons or entities that are not, immediately prior to
such sale, transfer, or other disposition, affiliates of the Company or the
Providence Entities.

 

“Commencement Date” has the meaning given in the recitals to this Agreement.

 

“Common Stock” means the common stock of the Company, par value $0.01 per share.

 

“Company” has the meaning set forth in the preamble to this Agreement; provided
that for purposes of determining the status of Employee’s employment with the
“Company,” such term shall include the Company and its Subsidiaries that employ
the Employee.

 

“Disability” has the meaning given in the Employment Agreement.

 

“Employee” has the meaning given in the preamble to this Agreement; provided
that following such person’s death the “Employee” shall be deemed to include
such person’s beneficiary or estate and following such person’s Disability, the
“Employee” shall be deemed to include such person’s legal representative.

 

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“Employment Agreement” means that certain Employment Agreement, dated as of
July 20, 2011, to which the Employee and the Company are parties.

 

“Fair Market Value” means, if no Public Offering has occurred, the fair market
value of a share of Common Stock shall be equal to the value most recently
established by the Board, adjusted, if deemed necessary or advisable by the
Board, for significant developments occurring since the date such value was
established by the Board. Following a Public Offering, the Fair Market Value, on
any date of determination shall mean the closing price for a share of Common
Stock as reported on a national exchange for or a nationally recognized system
of price quotation for such date or, if there is no such closing price for such
date, for the most recent date with respect to which such closing price is
available. In the event that there are no Common Stock transactions reported on
such exchange or system on such date, Fair Market Value shall mean the closing
price on the immediately preceding date on which Common Stock transactions were
so reported. In all events, the Fair Market Value shall be determined in a
manner consistent with Section 409A of the Internal Revenue Code of 1986, as
amended.

 

“Good Reason” has the meaning given in the Employment Agreement.

 

“Management Stockholders Agreement” means that certain Management Stockholders
Agreement of the Company, dated as of February 9, 2012.

 

“PEP VI” means Providence Equity Partners VI L.P., a Delaware limited
partnership.

 

“PEP VI-A” means Providence Equity Partners VI-A L.P., a Delaware limited
partnership.

 

“Providence Entities” means, collectively, PEP VI, PEP VI-A, Providence Equity
Partners, L.L.C., and any of their affiliates or any other investment fund or
similar fund managed or advised by PEP VI, PEP VI-A, or Providence Equity
Partners, L.L.C.

 

“Public Offering” means a public offering pursuant to an effective registration
statement filed with the Securities and Exchange Commission that covers shares
of Common Stock that, after the closing of such public offering, will be traded
on the New York Stock Exchange, the American Stock Exchange, or the National
Association of Securities Dealers Automated Quotation System or any comparable
non-U.S. exchange or system.

 

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“Qualifying Termination” has the meaning given in the Employment Agreement.

 

“Restricted Stock” means the Common Stock evidenced by (and subject to the terms
and conditions of) this Agreement.

 

“Securities Act” means the United States Securities Act of 1933, as amended, or
any successor statute, and the rules and regulations thereunder that are in
effect at the time, and any reference to a particular section thereof shall
include a reference to the corresponding section, if any, of such successor
statute, and the rules and regulations.

 

“Subsidiary” means any corporation, a majority of whose outstanding voting
securities is owned, directly or indirectly, by the Company.

 

“Transfer” has the meaning given in the Management Stockholders Agreement.

 

“Vested Shares” has the meaning given in Section 4.

 

“Vesting Date” has the meaning given in Section 2(a).

 

Section 8.                Miscellaneous.

 

(a)                      Withholding. Upon vesting of the Restricted Stock on a
Vesting Date, the Employee shall satisfy any applicable tax withholding
obligations arising in connection with such Vesting Date. In order to give
effect to this Section 8(a), the Company shall retain a number of shares of
Restricted Stock that have an aggregate Fair Market Value as of the Vesting Date
equal to the amount of such taxes required to be withheld (and the Employee
shall thereupon be deemed to have satisfied his obligations under this Section
8(a)). The number of shares of Restricted Stock subject to vesting on such
Vesting Date shall thereupon be reduced by the number of shares so retained. The
foregoing method of withholding shall not be applied to the extent that the
Employee elects to satisfy his withholding obligation by delivery of cash to the
Company from other sources. In addition, the foregoing method of withholding
shall not be available if withholding in this manner would violate any financing
instrument of the Company or any of its Subsidiaries.

 

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(b)                     Authorization to Share Personal Data. The Employee
authorizes any affiliate of the Company that employs the Employee or that
otherwise has or lawfully obtains personal data relating to the Employee to
divulge such personal data to the Company if and to the extent appropriate in
connection with this Agreement.

 

(c)                      Voting Proxy. Prior to the vesting thereof, the
Employee hereby irrevocably grants to the Providence Entities the same voting
proxy with respect to the Restricted Stock as would apply pursuant to Section 3
of the Management Stockholders Agreement if the shares of Restricted Stock were
Vested Shares.

 

(d)                     No Right to Continued Employment. Nothing in this
Agreement shall be deemed to confer on the Employee any right to continue in the
employ of the Company or any Subsidiary, or to interfere with or limit in any
way the right of the Company or any Subsidiary to terminate such employment at
any time.

 

(e)                      Notices. All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such delivery, to the Company or the Employee, as
the case may be, at the following addresses or to such other address as the
Company or the Employee, as the case may be, shall specify by notice to the
other:

 

(i)           if to the Company, to it at:

 

Sterling Holdco, Inc.
c/o Providence Equity Partners L.L.C.
50 Kennedy Plaza
18th Floor
Providence, Rhode Island 02903
Fax: +1 (401) 751-1790
Attention: Christopher C. Ragona

 

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with copies to:

 

Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
Fax: +1 (212) 909-6836
Attention: Jonathan F. Lewis

 

and

 

SRA International, Inc.
4300 Fair Lakes Court
Fairfax, Virginia 22033
Fax: +1 (703) 803-1509
Attention: General Counsel

 

(ii)         if to the Employee, to the Employee at his most recent address as
shown on the books and records of the Company or Subsidiary employing the
Employee.

 

All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof.

 

(f)                      Binding Effect; Benefits. This Agreement shall be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and assigns. Nothing in this Agreement, express or
implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or assigns any legal or
equitable right, remedy, or claim under or in respect of any agreement or any
provision contained herein.

 

(g)                     Waiver; Amendment.

 

(i)           Waiver. Any party hereto or beneficiary hereof may by written
notice to the other parties (A) extend the time for the performance of any of
the obligations or other actions of the other parties under this Agreement,
(B) waive compliance with any of the conditions or covenants of the other
parties contained in this Agreement, and (C) waive or modify performance of any
of the obligations of the other parties under this Agreement. Except as provided
in the preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party or
beneficiary, shall be deemed to constitute a waiver by the party or beneficiary
taking such action of compliance with any representations, warranties, covenants
or agreements contained herein. The waiver by any party hereto or beneficiary
hereof of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by a
party or beneficiary to exercise any right or privilege hereunder shall be
deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder
or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise
the same at any subsequent time or times hereunder.

 

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(ii)         Amendment. This Agreement may not be amended, modified, or
supplemented orally, but only by a written instrument executed by the Employee
and the Company.

 

(h)                     Assignability. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or the Employee without the prior written consent of
the other.

 

(i)                       Applicable Law; Interpretation. This Agreement shall
be governed in all respects, including, but not limited to, as to validity,
interpretation and effect, by the internal laws of the State of Delaware,
without reference to principles of conflict of law that would require
application of the law of another jurisdiction.

 

(j)                       Section and Other Headings, Etc. The section and other
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.

 

(k)                     Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

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

 

 

  STERLING HOLDCO, INC.           By: /S/ Christopher Ragona   Name: Chris
Ragona   Title:   Secretary, Vice President and Treasurer                  
EMPLOYEE           /S/ William L. Ballhaus   William L. Ballhaus

 

 

 

 

 

 

[Signature Page to William Ballhaus Restricted Stock Agreement]