Exhibit 10.78
June 6, 2006
Mr. Scott A. Fry
6099 Arrington Drive
Fairfax Station, VA 22039
Re:   Addendum to Offer Letter
Dear Scott:
This letter constitutes an addendum to a letter, dated December 16, 2003, to you
from Alion Science and Technology Corporation (“Alion” or the “Company”) which
constituted our original offer of employment (the “Offer Letter”). This letter
provides to you additional benefits in consideration for your continued service
to the Company. This letter replaces and supersedes in its entirety the letter
to you dated March 7, 2006.
     1. Benefits.
In addition to the benefits set forth in your Offer Letter, you will continue to
be eligible to receive a company-leased automobile under our Auto Lease Policy.
This is equivalent to a maximum of approximately $1,000 a month. You will also
receive 24 personal days off (“PTO”) per year in addition to the current ten
paid holidays. You are also eligible to receive other executive benefits under
current Alion policies for:

  •   Tax Preparation Subsidy     •   Physical Fitness Membership Subsidy     •
  Annual Health Physical Subsidy

All other Alion Core and Optional Employee Benefits remain the same. In
addition, you and the Company agree to the following additional terms, with any
reference to you to mean “Employee”:
     2. Severance. A. If, from the date of this letter until and including
December 20, 2007, the Company terminates Employee’s employment without Cause
(as defined below), the Company shall make a lump-sum severance payment to
Employee equal to one year of Employee’s annual base salary as of the
Termination Date

 

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Mr. Scott A. Fry
June 6, 2006
Page 2
as defined in Section 4 below. There will be no further rights to any further
compensation. In the event that Employee is terminated for Cause, Employee will
not be entitled to any severance or other benefits upon termination other than
those accrued benefits provided to employees pursuant to existing Company
policies.
          B. For purposes of this letter, “Cause” is defined as the occurrence
of one of the following: (i) Employee’s material violation of Company policy or
any violation of the Company’s Code of Ethics, Conduct and Responsibility;
(ii) any act, failure to act, series of acts or failures to act, or course of
conduct on Employee’s part constituting reckless, willful, or criminal
misconduct in the performance of your duties; (iii) any failure to perform, or
gross negligence or incompetence in the performance of, Employee’s duties; or
(iv) Employee’s commission of a crime involving conversion, misappropriation,
larceny, theft, fraud, dishonesty, embezzlement, moral turpitude or any other
felony, regardless of whether such crime involves the Company.
     3. Change of Control Benefits. In the event of a Change of Control, as
defined in Section 5 below, if Employee meets the Eligibility Requirements set
forth in Section 4 below, the Company’s successor or assign shall pay Employee,
in lieu of any severance benefits described above, a lump sum amount equal to
the amount of Employee’s annual base salary as of the Termination Date (the
“Change of Control Benefits”). There will be no further rights to any further
compensation or benefits.
     4. Eligibility for Change of Control Benefits. If Employee terminates
employment (for reasons other than set forth in Section 4D below) with any
successor or assign (or any of their respective affiliates) of the Company at
any time during the twenty four (24) month period beginning on the effective
date of a Change in Control (the “Protection Period”), he shall be entitled to
the Change of Control Benefits. If during the Protection Period, Employee
terminates his employment for Good Reason (as defined below) by delivering to
the successor or assign of the Company (or its respective affiliate), as
applicable, each no later than thirty (30) days after learning of the occurrence
of an event constituting Good Reason: (i) a Preliminary Notice of Good Reason
(as defined below); and (ii) a Notice of Termination (as defined below),
Employee shall have the right, in his sole and reasonable discretion, to receive
the Change of Control Benefits. For purposes of this letter, the following terms
shall have their respective meanings:
          A. “Good Reason” shall result only upon the occurrence, without
Employee’s prior written consent, of one or more of the following events, as
determined by Employee in good faith, during the Protection Period:
(i) Employee’s

 

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Mr. Scott A. Fry
June 6, 2006
Page 3
authority or responsibility has materially diminished as compared to Employee’s
authority and responsibility in effect immediately prior to a Change in Control;
(ii) Employee has been assigned permanent duties inconsistent with his position,
responsibility and status with the Company immediately prior to the Protection
Period; (iii) there has been an adverse change in Employee’s title or office as
in effect immediately prior to the Protection Period; (iv) Employee’s base pay
or incentive compensation has been reduced; or (v) Employee’s principal work
location is more than ten (10) miles away from the principal work location as
immediately prior to the Protection Period; provided, however, that “Good
Reason” shall not include (x) acts not taken in bad faith that are cured by the
Company’s successor or assign in all respects, including without limitation
restoration of all back pay and incentive compensation through the Termination
Date, not later than thirty (30) days from the date of receipt by the successor
or assign of the Company (or its respective affiliate), as applicable, of a
written notice from Employee identifying in reasonable detail the act or acts
constituting “Good Reason” in a “Preliminary Notice of Good Reason”, or (y) acts
for which Employee does not provide a Preliminary Notice of Good Reason within
thirty (30) days of learning of the occurrence of the event constituting Good
Reason.
          B. “Notice of Termination” shall mean a notice that indicates in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment.
          C. “Termination Date” shall mean the date specified in the Notice of
Termination for termination of Employee’s employment under this Agreement.
          D. Notwithstanding any other provision under this Agreement, Employee
shall not be entitled to receive Change of Control Benefits in the event that:
Company’s successor or assign (or any of its respective affiliates) terminates
Employee’s employment for Cause (as defined below); (ii) Employee dies (in which
case the Company shall pay to Employee’s heir or personal representatives, as
the case may be, six (6) monthly payments, each equal to one-twelfth (1/12) of
Employee’s then-current salary, commencing with the first calendar month after
termination); (iii) Employee is determined to be totally and permanently
disabled (in which case the Company shall pay to Employee six (6) monthly
payments, each equal to one-twelfth (1/12) of Employee’s then-current salary
less any payments under the Company’s long term disability insurance plan that
Employee receives or is entitled to receive in each such month, commencing with
the first calendar month after termination); (iv) the Company’s successor or
assign (or any of its respective affiliates) terminates Employee’s employment
without cause (in which case the Company shall make a lump-sum severance payment
to Employee equal to one year of Annual Base Salary as of the Date of
Termination); or (v) Employee resigns other than for Good Reason (in which case
the

 

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Mr. Scott A. Fry
June 6, 2006
Page 4
Company shall have no further obligations to Employee under this Agreement,
including without limitation payment of future compensation or benefits). In any
such event, Employee, in addition to any benefits payable in accordance with
this Agreement, shall be entitled only to his salary and benefits accrued or
earned and vested under other plans, programs, policies, practices and coverage
of the Company’s successor or assign (or any of its respective affiliates).”
     5. Change in Control. For the purposes of this letter, a “Change of
Control” shall mean and shall be effective upon the closing date of: (i) the
dissolution or liquidation of the Company; (ii) the merger or consolidation of
the Company with any other corporation, foundation, association or other entity;
(iii) the amendment of the Company’s corporate documents to grant a party other
than the Company’s Employee Stock Ownership Plan, the right to designate, elect
or remove a majority of the Company’s voting directors; or (iv) the transfer to
another corporation, foundation, association or other entity in a sale, lease,
exchange or other similar transfer (in a single transaction or in a series of
related transactions) of all or substantially all of the assets of the Company.
     6. Other Provisions. All other provisions set forth in the Offer Letter
shall remain the same.
By our mutual signatures below, you and the Company agree to the terms of this
letter.
We look forward to your continued success with Alion. If you have any questions,
please call me at (703-269-3487).
Yours very truly,

         
/s/ Stacy Mendler
                 
Stacy Mendler
       
Executive Vice President
       

I accept this letter and agree to the above terms.

         
/s/ Scott Fry
      6/6/06  
Signature
      Date