**Exhibit 10.30**

 

PEC SOLUTIONS, INC.

 

KEY EXECUTIVE SEVERANCE PLAN

 

I.  Preambleand Statement of Purpose.

 

The purpose of this Plan is to assure PEC Solutions, Inc. (“PEC”) andits subsidiaries (PEC, together with its subsidiaries, the “Corporation”) ofthe continued dedication, loyalty, and service of, and the availability ofobjective advice and counsel from, key employees of the Corporationnotwithstanding the possibility, threat or occurrence of a bid or other actionto take over control of the Corporation.

 

In the event PEC receives any proposals from a third party concerning apossible business combination with PEC, or acquisition of PEC’s equitysecurities, the Board of Directors of PEC (the “Board”) believes that it wouldbe imperative that the Board, the Corporation and its senior management be ableto rely on the Corporation’s key employees to continue in their positions andbe available for advice, if requested, without concern that those individualsmight be distracted by the personal uncertainties and risks created by such aproposal, or be influenced to consider other employment opportunities orprospects because of such uncertainties or risks.

 

Should PEC receive any such proposals, in addition to their regularduties, such key employees, in light of their experience and knowledge gainedwithin that portion of the business in which they are principally engaged, maybe called upon to assist in the assessment of proposals, advise seniormanagement and the Board as to whether such proposals would be in the bestinterest of PEC and its shareholders, and take such other actions as the Boardmight determine to be appropriate.

 

II.  EligibleExecutives.

 

The following individuals are eligible to participate in this Plan: (i)the executives of PEC (Grade Level 11 and above), and (ii) those key employeesof the Corporation who are from time to time designated by the CompensationCommittee of the Board (the “Compensation Committee”) as eligible toparticipate in this Plan.

 

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Each eligible employee shall become a Participant in the Plan upon hisor her execution of a letter agreement in the form, or substantially in theform, of Exhibit A, attached to and incorporated in this Plan (the “LetterAgreement”).  The executed LetterAgreement shall constitute the Participant’s agreement to the terms andconditions of participation in this Plan and shall set forth the amount of theLump Sum Cash Payment under Section 3.2.2, the length of the CoveragePeriod for welfare benefit continuation under Section 3.2.3, and suchother terms and conditions as the Compensation Committee may determineapplicable to the Participant.

 

A Participant who is no longer employed by the Corporation shall ceaseto be a Participant in the Plan, unless the Participant’s employment ceases (i)within six (6) months after the Effective Date (as defined inSection 3.1.3) or (ii) during any period of time when the Board hasknowledge that any third person has taken steps reasonably calculated to effecta Change of Control (as defined in Section 3.1.2) until, in the opinion ofthe Board, the third party has abandoned or terminated its efforts to effect aChange of Control.  Any decision by theBoard that, in its opinion, a third party has or has not taken steps reasonablycalculated to effect a Change of Control, or that, in its opinion, the thirdperson has abandoned or terminated its efforts to effect a Change of Control,shall be conclusive and binding on the Participants.

 

III.  PlanProvisions.

 

3.1                                 Definitions.  The following terms, as used in this Planwith capitalized first letters, shall have the meanings as provided in thisSection 3.1:

 

3.1.1.                     “Cause”.  “Cause” means (i) the Participant’s willfuland continued failure substantially to perform the duties of his or herposition (other than as a result of disability, as defined inSection 72(m)(7) of the Internal Revenue Code of 1986, as amended (the“Code”), or as a result of termination by the Participant for Good Reason)after written notice to the Participant by the Board specifying such failure,provided that such “Cause” shall have been found by a majority vote of theBoard after at least ten (10) days’ written notice to the Participantspecifying the failure on the part of the Participant and after an opportunityfor the Participant to be heard at a meeting of the Board; (ii) any willful actor omission by the Participant constituting dishonesty, fraud or othermalfeasance, and any act or omission by the Participant constituting immoralconduct, which in any such case is injurious to the financial condition orbusiness reputation of the Corporation; or (iii) the Participant’s indictmentof a felony under the laws of

 

 

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the United States or any state thereof or any other jurisdiction inwhich the Corporation conducts business. For purposes of this definition, no act or failure to act shall bedeemed “willful” unless effected by the Participant not in good faith andwithout a reasonable belief that such action or failure to act was in or notopposed to the best interests of the Corporation.

 

3.1.2.                     “Changeof Control”.  “Change of Control”means the occurrence of any of the following:

 

(i)                                     Any“person” (as defined in this Section 3.1.2) is or becomes the “beneficialowner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, asamended (the “Exchange Act”)), directly or indirectly, of securities of PEC(not including in the securities beneficially owned by such person anysecurities acquired directly from PEC other than in connection with PEC’sacquisition of a business) representing more than fifty percent (50%) of thecombined voting power of PEC’s then outstanding securities; or

 

(ii)                                  Asa result of, or in connection with, any cash tender or exchange offer, mergeror other business combination, sale of assets, or contested election, or anycombination of the foregoing transactions, the individuals who were directorsof PEC prior thereto shall cease to constitute a majority of the Board ofDirectors of PEC or any successor thereto.

 

As used in this Section, the term “person” has the meaning ascribedthereto in Section 3(a)(9) of the Exchange Act, as modified and used inSections 13(d)(3) and 14(d)(2) thereof, except that such term shall notinclude (A) the Corporation, (B) any trustee or other fiduciary holdingsecurities under an employee benefit plan of the Corporation, (C) anunderwriter temporarily holding securities pursuant to an offering of suchsecurities, or (D) any corporation owned, directly or indirectly, by thestockholders of PEC in substantially the same proportions as their ownership ofcommon stock of PEC.

 

3.1.3.                     “EffectiveDate”.  “Effective Date” means thedate on which a Change of Control occurs. In the event of a Change of Control occurring within six (6) monthsafter a prior Change of Control, “Effective Date” shall mean the date on whichthe subsequent Change of Control occurs. Notwithstanding anything in this Plan to the contrary, if aParticipant’s employment with the Corporation had terminated prior to the dateon which the Change of Control occurred, and if it is reasonably demonstratedby the Participant to the Board that such termination of employment either wasat the request of a third party who had taken steps reasonably calculated

 

 

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to effect the Change of Control or otherwise arose in connection withor in anticipation of the Change of Control, then, for all purposes of thisPlan, “Effective Date” shall mean, with respect to such Participant only, thedate immediately prior to the date of such termination of employment.

 

3.1.4.                     “GoodReason”.  “Good Reason” means (i)removal from, or failure to be reappointed or reelected to, the Participant’sprincipal positions in existence immediately prior to Change of Control (otherthan as a result of a promotion); (ii) diminution in the Participant’s title,position, duties or responsibilities, or the assignment to the Participant ofduties that are inconsistent, in a material respect, with the scope of dutiesand responsibilities associated with the Participant’s position in existenceimmediately prior to the Change of Control; (iii) reduction in theParticipant’s compensation as in effect immediately preceding the EffectiveDate; (iv) relocation of the Participant’s principal workplace without his orher consent to a location which is more than fifty (50) miles from theParticipant’s principal workplace in existence on the Effective Date; or (v)any failure by PEC to comply with and satisfy the requirements ofSection 3.5.7, provided that the successor shall have received at leastten (10) days’ prior written notice from PEC or the Participant of therequirements of Section 3.5.7.  Forpurposes of clauses (i), (ii) or (iii) of the preceding sentence, an isolated,insubstantial and inadvertent action not taken in bad faith and which isremedied by PEC promptly after receipt of notice thereof given by theParticipant shall be excluded.  Forpurposes of clause (ii), no diminution of title, position, duties orresponsibilities shall be deemed to occur solely because PEC becomes asubsidiary of another corporation or change in the reporting hierarchy incidentthereto.

 

3.2                                 Benefits.

 

3.2.1.                     TriggeringEvent.  In the event theParticipant’s employment with the Corporation is terminated without Cause bythe Corporation, or for Good Reason by the Participant, on or within six (6)months after the Effective Date, PEC shall (in addition to any compensation orbenefits to which the Participant may otherwise be entitled under any otheragreement, plan or arrangement with the Corporation, other than amountsexcluded by Section 3.5.2) make the payments and provide the benefits tothe Participant as specified under Sections 3.2.2 and 3.2.3.  For purposes of this Section 3.2.1, aParticipant’s employment with the Corporation will be deemed to have terminatedon the earlier of the date the Participant’s employment with the Corporationceases or the date that written notice of any such termination is received bythe Participant or by the Corporation, as the case may be, even though theparties may agree in

 

 

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connection therewith that the Participant’s employment with theCorporation will continue for a specified period thereafter.  The failure by the Participant or theCorporation to set forth in any such notice sufficient facts or circumstancesshowing Good Reason or Cause, as the case may be, shall not waive any right ofthe Participant or the Corporation or preclude either party from asserting suchfacts or circumstances in the enforcement of any such right.

 

3.2.2.                     LumpSum Cash Payment.  On or before theParticipant’s last day of employment with the Corporation, PEC shall pay to theParticipant as compensation for services rendered to the Corporation a Lump SumCash Payment (subject to any applicable payroll or other taxes required to bewithheld) in the amount determined in accordance with the Letter Agreement,subject to Section 3.4.

 

3.2.3.                     WelfareBenefit Continuation.  TheParticipant’s (and, where applicable, members of the Participant’s family’s)participation in the group medical, dental, life (including split dollar, ifany) and disability plans maintained by the Corporation shall be continued onsubstantially the same basis as if the Participant were an employee of theCorporation until the end of the Coverage Period as set forth in the LetterAgreement.  In the event that PEC isunable for any reason to provide for the Participant’s (and, where applicable,the Participant’s family’s) continued participation in one or more of suchplans during the Coverage Period, PEC shall pay or provide at its expenseequivalent benefit coverage for the remainder of the Coverage Period.  The Coverage Period shall, to the extentallowed by law, be taken into account as a period of continuation coverage forpurposes of Part 6 of Title I of the Employee Retirement Income Security Act of1974, as amended, and for purposes of any other obligation of the Corporationto provide any continued coverage to the Participant (and, where applicable,members of the Participant’s family) under any group medical, dental, life ordisability plan.  The Corporation shallalso pay to the Participant at least annually an amount which shall besufficient on an after tax basis to compensate the Participant for alladditional taxes incurred by reason of any income realized as a result of thecontinued coverage under this Section, to the extent such taxes result from theParticipant’s status as a non-employee and would not be incurred if Participantwas an employee of the Corporation, on a grossed-up basis, at the highestmarginal income tax rate for individuals.

 

3.2.4.                     AcceleratedVesting of Options.  All optionsgranted to a Participant to purchase common stock of PEC under any plan,program or arrangement maintained by PEC, shall become fully vested andexercisable as of the Effective Date of a Change of Control as defined in

 

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Section 3.1.2(ii), to the extent such options are thenoutstanding.  The preceding sentenceshall not apply with respect to any option if: (i) in connection with theChange of Control, another entity (a) shall have assumed or will assume theobligations of PEC with respect to such option, or (b) shall have issued orwill issue one or more options of equivalent economic value with equivalentvesting conditions to replace such option; and (ii) the assumed or replacementoption as set forth in clause (i), pursuant to its terms, shall vest as of thedate the Participant’s employment with the Corporation is terminated withoutCause by the Corporation, or for Good Reason by the Participant, on or withinsix (6) months after the Effective Date. The Board shall have sole discretion in the determination of whether areplacement option is of equivalent economic value to the replaced option.

 

3.2.5                        Exercisabilityof Options After Termination.  Ifany accounting requirements  withrespect to a Change of Control restrict a Participant’s sale or transfer ofstock subject to an option described in Section 3.2.4 which is not an“incentive stock option” within the meaning of Section 422 of the Code,then the period during which the Participant may exercise such option followinghis or her termination of employment with the Corporation shall be determinedby excluding the period during which the Participant is subject to thatrestriction.

 

3.3                                 Adjustmentof Lump Sum Cash Payment.

 

3.3.1.                     Adjustment. Notwithstanding anything in this Planor any Letter Agreement to the contrary, in the event the Law or AccountingFirm (as defined in Section 3.3.2) shall determine that the Lump Sum CashPayment and any other payment or distribution in the nature of compensation bythe Corporation to or for the benefit of the Participant, whether paid orpayable or distributed or distributable pursuant to the terms of this Plan orotherwise (the Lump Sum Cash Payment, together with such other payments anddistributions, the “Payments”), would cause any portion of such Payments to besubject to the excise tax imposed by Section 4999 (or any successorprovision) of the Code (the “Parachute Payments”), the Participant’s Lump SumCash Payment shall be reduced to an amount (not less than zero) which shall notcause any portion of the Payments to constitute Parachute Payments, providedthat no such reduction shall be made if the Participant’s Payments, after thereduction and after the application of Federal income tax at the highest rateapplicable to individual taxpayers, shall not be greater than the present value(determined in accordance with Section 280G of the Code) of the Paymentsbefore the reduction but after the application of (i) excise tax underSection 4999 of the Code and (ii) Federal income tax at the highest rateapplicable to individual taxpayers.

 

 

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3.3.2.                     Determination.  All determinations required to be made underthis Section 3.3, including the assumptions to be utilized in arriving atsuch determination, shall be made by Piper Rudnick L.L.P. or other nationallyrecognized law or accounting firm (the “Law or Accounting Firm”), which shallprovide detailed supporting calculations both to PEC and the Participant (i)within fifteen (15) business days after the receipt of a notice from theParticipant that he or she may have a Parachute Payment, or (ii) at suchearlier time as may be requested by PEC. The Law or Accounting Firm may employ and rely upon the opinions of actuarialor accounting professionals to the extent it deems necessary or advisable.  In the event that the Law or Accounting Firmdetermines, for any reason, that it is unable to perform such services, ordeclines to do so, PEC shall select another nationally recognized law oraccounting firm to make the determinations required under thisSection (which law or accounting firm shall then be referred to as the Lawor Accounting Firm hereunder). Any Accounting Firm providing services to theCorporation or to any person (within the meaning of 3.1.2., above) with respectto the Change in Control shall not serve as the Accounting Firm under thisSection 3.3. All fees and expenses of the Law or Accounting Firm shall beborne solely by PEC.  Any determinationby the Law or Accounting Firm shall be binding upon PEC and the Participant.

 

3.4                                 Termsand Conditions of Participation

 

3.4.1.                     Conditionsof Participation.  As a condition tobeing covered by the Plan, each Participant, by executing the Letter Agreement,shall acknowledge and agree that (i) except as may otherwise be expresslyprovided under any other executed agreement between the Participant and theCorporation, nothing contained in this Plan (including, but not limited to,using the term “Cause” to determine benefits under this Plan) is intended to changethe fact that the employment of the Participant by the Corporation is “at will”and, prior to the Effective Date, may be terminated by either the Participantor the Corporation at any time, (ii) the Participant shall be bound by, andcomply with, the requirements of Sections 3.5.3 and 3.5.4, and (iii) theParticipant consents to the modifications to the options as provided inSections 3.2.4 and 3.2.5.  Moreover, ifprior to the Effective Date, the Participant’s employment with the Corporationterminates, then the Participant shall have no further rights under this Plan.

 

 

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3.4.2.                     Non-Duplication.  As acondition to being covered by this Plan, and notwithstanding any other prioragreement to the contrary, each Participant, by executing the Letter Agreement,shall agree that, if Participant is eligible to receive salary continuation,severance or similar cash payments from the Corporation under any other plan,program, policy or agreement, then Participant shall be entitled to receive theseverance payable under Section 3.2.2 of this Agreement (the “SeverancePayment”) only if (a) the Severance Payment results in a greater financialbenefit to Participant than the aggregate net present value of the paymentspayable under such other plans, programs, policies and agreements and(b) Participant waives in writing all rights to receive the salarycontinuation, severance or similar cash payments under such other plans,programs, policies and agreements.  Forpurposes of the immediately preceding sentence, the net present value of apayment shall be determined by the Law or Accounting Firm as defined in 3.3.2,above, measured as of the date that the Severance Payment would otherwise bepayable and based upon a discount factor determined to be reasonable by the Lawor Accounting Firm in good faith.  IfParticipant is eligible to continue participation in the welfare benefit plansof the Corporation after termination of employment pursuant to the provisionsof any plan, program, policy or agreement on terms that are different from theterms for continued participation provided under Section 3.2.3 of thisAgreement, Participant shall be entitled to select whether the terms of thisAgreement or the terms of such other plan, program, policy or agreement shallgovern Participant’s continued participation in such welfare benefit plans;provided, however, that no participation in or receipt of benefits under thisPlan or any other plan, program, policy or agreement shall be deemed to waiveor diminish any right that Participant or Participant’s eligible dependents hasunder the Consolidated Omnibus Budget Reconciliation Act of 1985.

 

3.4.3.                     Amendmentand Termination.  The Plan may notbe amended or terminated after the Effective Date.  Prior to the Effective Date, the Board may, in its solediscretion, modify or amend this Plan in any respect, or terminate the Plan(including with respect to individuals then participating in the Plan),provided (i) such action is taken and becomes effective at least one (1) yearprior to the Effective Date and such action is communicated to the Participantsprior to the Effective Date, (ii) the Board, in its sole discretion, determinesthat such actions are necessary, in its opinion, to permit any businesscombination that is authorized by the Board to comply with requirements fortreatment as a pooling of interests transaction for accounting purposes undergenerally accepted accounting principles, if such transaction is intended tomeet, and is conditioned upon compliance with, such requirements, or (iii) suchactions do not reduce the amount or defer the receipt of any payment or benefitprovided under this Plan.

 

 

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3.5                                 General.

 

3.5.1.                     Indemnification.  If litigation or arbitration shall bebrought to enforce or interpret any provision of this Plan which relates toPEC’s obligation to make payments hereunder, then PEC, to the extent permittedby applicable law and PEC’s Charter, shall indemnify the Participant for his orher reasonable attorneys’ fees and disbursements incurred in such proceedings,and shall pay pre-judgment interest on any money judgment obtained by theParticipant calculated at the prime rate of interest published from time totime by The Wall Street Journal (“Prime Rate”) from the date that payment(s) tohim or her should have been made under this Plan.

 

3.5.2.                     PaymentObligations; Overdue Payments.  TheCorporation’s obligations to make the payments and provide the benefits to theParticipant under this Plan shall be absolute and unconditional and shall notbe affected in any way by any circumstances, including, without limitation, anyoffset, counterclaim, recoupment, defense or other right which PEC may haveagainst the Participant or anyone else, provided, however, thatas a condition to payment of amounts under this Plan, the Participant shallexecute a general release and waiver (the “Waiver”), in form and substancereasonably satisfactory to PEC, of all claims relating to the Participant’semployment by the Corporation and the termination of such employment, including,but not limited to, discrimination claims, employment-related tort claims,contract claims and claims under this Plan (other than claims with respect tobenefits under the Corporation’s tax-qualified retirement plans, continuationof coverage or benefits solely as required by Part 6 of Title I of the EmployeeRetirement Income Security Act of 1974, or any obligation of PEC to providefuture performance under Section 3.2.3). All amounts payable by PEC hereunder shall be paid without notice ordemand, except as may be required with respect to the Waiver.  Each and every payment made hereunder by PECshall be final.  The Corporation shallnot seek to recover all or any part of such payment from the Participant orfrom whosoever may be entitled thereto, for any reason whatsoever.  The Participant shall not be obligated toseek other employment in mitigation of the amounts payable or arrangements madeunder any provision of this Plan, and the obtaining of any such other employmentshall in no event effect any reduction of PEC’s obligations to pay the Lump SumCash Payment.  The Participant shall beentitled to receive interest at the Prime Rate on any payments under this Planthat are overdue, provided, however, that no payments shall bedeemed to be overdue until the Participant executes the Waiver and anyrescission period with respect to such Waiver has expired.

 

 

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3.5.3.                     ConfidentialInformation.  The Participant shallat all times hold in a fiduciary capacity for the benefit of the Corporationall secret, confidential or proprietary information, knowledge or data relatingto the Corporation, and its respective businesses, which shall have beenobtained by the Participant during the Participant’s employment by theCorporation and which shall not be or become public knowledge (other than byacts by the Participant or representatives of the Participant in violation ofthis Plan) including, but not limited to, information regarding the technology,proprietary methodologies and products, software, other trade secrets, clients,customers, consultants and agents of the Corporation (the “ConfidentialInformation”).  During the Participant’semployment with the Corporation and after termination of such employment at anytime or for any reason, and regardless of whether any payments are made to theParticipant under this Plan as a result of such termination, the Participantshall not, without the prior written consent of the Corporation or as mayotherwise be required by law or legal process, communicate or divulge anyConfidential Information to any person other than the Corporation and thosedesignated by it or use any Confidential Information except for the benefit ofthe Corporation.  Immediately upontermination of the Participant’s employment with the Corporation at any time orfor any reason, the Participant shall return to the Corporation allConfidential Information, including, but not limited to, any and all copies,reproductions, notes or extracts of Confidential Information. The terms of thisSection shall be in addition to, and not a replacement of, the provisionsof the Corporations’s “Employee Confidentiality and Inventions Agreement”.

 

3.5.4.                     Solicitationof Employees.  During theParticipant’s employment with the Corporation and for a period of twelve (12)months after termination of such employment at any time and for any reason, andregardless of whether any payments are made to the Participant under this Planas a result of such termination, the Participant shall not solicit, participatein or promote the solicitation of any person who was employed by theCorporation at the time of the Participant’s termination of employment with theCorporation to leave the employ of the Corporation, or, on behalf of himself orany other person, hire, employ or engage any such person.  The Participant further agrees that, duringsuch time, if an employee of the Corporation contacts the Participant aboutprospective employment, the Participant will inform such employee that he or shecannot discuss the matter further without informing the Corporation.

 

3.5.5.                     Applicationof Restrictions Respecting Confidential Information and Solicitation ofEmployees.  The requirements andobligations of the Participant under Sections 3.5.3 and 3.5.4 shall be inaddition to, and not a limitation under, any other requirements and obligationsof

 

 

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the Participant, at law or otherwise. The term “person” for purposes of Sections 3.5.3 and 3.5.4 shall includeany individual or entity, including any corporation, trust or partnership.

 

3.5.7.                     Successors.  All right under this Plan are personal tothe Participant and without the prior written consent of PEC shall not beassignable by the Participant otherwise than by will or the laws of descent anddistribution.  This Plan shall inure tothe benefit of and be enforceable by the Participant’s legalrepresentative.  This Plan shall inureto the benefit of and be binding upon PEC and its successors and assigns.  PEC will require any successor (whetherdirect or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business and/or assets of PEC to assume expressly andagree to perform this Plan in the same manner and to the same extent that PECwould be required to perform it if no such event resulting in a successor hadtaken place.

 

3.5.8.                     ControllingLaw; Jurisdiction.  This Plan shallin all respects be governed by, and construed in accordance with, the laws ofthe Commonwealth of Virginia (without regard to the principles of conflicts oflaws).  The Corporation and theParticipants irrevocably consent and submit to the jurisdiction of FairfaxCounty Circuit Court, or in any Federal court sitting in the Commonwealth ofVirginia, for the purposes of any controversy, claim, dispute or action arisingout of or related to this Plan, and hereby waive any defense of an inconvenientforum and any right of jurisdiction on account of the parties’ place ofresidence or domicile.

 

3.5.9.                     Severability.  Any provision in this Plan which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective only to the extent of such prohibition or unenforceabilitywithout invalidating or affecting the remaining provisions hereof, and any suchprohibition or unenforceability in any jurisdiction shall not invalidate orrender unenforceable such provision in any other jurisdiction.

 

Date:  July 23, 2003

 

 

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**EXHIBIT A**

 

KEY EXECUTIVE SEVERANCE PLAN

 

July 23, 2003

 

Dear Chuck:

 

On July 14, 2003, the Compensation Committee of the Board ofDirector of PEC, Inc. approved the enclosed PEC, Inc. Key Executive SeverancePlan (the “Plan”).  You are eligible toparticipate in the Plan and will become a Participant therein upon signing thisletter agreement.  As used in thisletter, each capitalized term, if not defined herein, has the meaning ascribedto it under the Plan.

 

For purposes of Section 3.2.2 of the Plan, the amount of the LumpSum Cash Payment, in the event you become entitled to benefits under the Plan,will be equal to the product of (a) 0.5and (b) the sum of (i) your actual annual rate of base salary as in effectimmediately prior to either the date of your termination of employment with theCorporation or the Effective Date, whichever is higher, and (ii) the average ofyour annual bonus payments under the Corporation’s annual bonus plan for thelast three (3) years ending before either the Effective Date or the date youremployment with the Corporation terminates, whichever is higher.

 

If you will not have been eligible to participate in the annual bonusplan for all three (3) years ending before either the Effective Date or thedate of your termination, your average annual bonus payment (with respect tothe years ending before the Effective Date or the date of termination, asapplicable) shall be determined only for the years with respect to which youshall have been eligible to participate. For purposes of the Plan, your base salary will include (i) your cashallowances reportable as wages in Form W-2, and (ii) the dollar value of anycompensation that would have been paid to you but was deferred or excluded forFederal income tax purposes under a deferred compensation plan, program orarrangement.

 

For purposes of Section 3.2.3, the Coverage Period, in the eventyou become entitled to benefits under the Plan, will begin on the dateimmediately following the termination of your employment with the Corporationand shall end on the date six (6)months thereafter.

 

Please review the provisions of the Plan and its stated purposescarefully, including particularly the terms and conditions stated in Sections3.4 (Terms and Conditions of Participation), 3.5.3 (Confidential Information),and 3.5.4 (Solicitation of Employees), to which you will agree by executingthis letter agreement.  In order to beentitled to the benefits and agree to your obligations provided in the Plan,please execute the enclosed copy of this letter and return it to AlanHarbitter, Secretary of PEC, whereupon the Plan and this letter will become alegally binding agreement between you and PEC.

 

 
|                                              | Very truly yours,   |
|---------------------------------------------------|---------------------|
|                                              |                |
|                                              | PEC SOLUTIONS, INC. |
|                                              |                |
|                                              | By:                 | /s/ David C. Karlgaard |   |
|                                              |                |
| I hereby confirm my agreement with the foregoing: |                |
|                                              |                |
| /s/ Charles E. Owlett                             |                |   |
| Date:  8/19/03                               |                |   |

 

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