**Exhibit10.29**

PEC SOLUTIONS,INC.

 

KEY EXECUTIVESEVERANCE PLAN

 

 

I.  Preamble and Statement of Purpose.

 

The purpose of this Plan is to assure PEC Solutions,Inc. (“PEC”) and its subsidiaries (PEC, together with its subsidiaries, the“Corporation”) of the continued dedication, loyalty, and service of, and theavailability of objective advice and counsel from, key employees of theCorporation notwithstanding the possibility, threat or occurrence of a bid orother action to take over control of the Corporation.

 

In the event PEC receives any proposals from a thirdparty concerning a possible business combination with PEC, or acquisition ofPEC’s equity securities, the Board of Directors of PEC (the “Board”) believesthat it would be imperative that the Board, the Corporation and its seniormanagement be able to rely on the Corporation’s key employees to continue intheir positions and be available for advice, if requested, without concern thatthose individuals might be distracted by the personal uncertainties and riskscreated by such a proposal, or be influenced to consider other employmentopportunities or prospects because of such uncertainties or risks.

 

Should PEC receive any such proposals, in addition totheir regular duties, such key employees, in light of their experience andknowledge gained within that portion of the business in which they areprincipally engaged, may be called upon to assist in the assessment ofproposals, advise senior management and the Board as to whether such proposalswould be in the best interest of PEC and its shareholders, and take such otheractions as the Board might determine to be appropriate.

 

II.  Eligible Executives.

 

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

 

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Each eligible employee shall become a Participant inthe Plan upon his or her execution of a letter agreement in the form, orsubstantially in the form, of Exhibit A, attached to and incorporated in thisPlan (the “Letter Agreement”).  Theexecuted Letter Agreement shall constitute the Participant’s agreement to theterms and conditions of participation in this Plan and shall set forth theamount of the Lump Sum Cash Payment under Section 3.2.2, the length of theCoverage Period 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 theCorporation shall cease to be a Participant in the Plan, unless theParticipant’s employment ceases (i) within six (6) months after the EffectiveDate (as defined in Section 3.1.3) or (ii) during any period of time when theBoard has knowledge that any third person has taken steps reasonably calculatedto effect a Change of Control (as defined in Section 3.1.2) until, in theopinion of the Board, the third party has abandoned or terminated its effortsto effect a Change of Control.  Anydecision by the Board that, in its opinion, a third party has or has not takensteps reasonably calculated to effect a Change of Control, or that, in itsopinion, the third person has abandoned or terminated its efforts to effect aChange of Control, shall be conclusive and binding on the Participants.

 

III.  Plan Provisions.

 

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 willful and continued failuresubstantially to perform the duties of his or her position (other than as aresult of disability, as defined in Section 72(m)(7) of the Internal RevenueCode of 1986, as amended (the “Code”), or as a result of termination by theParticipant for Good Reason) after written notice to the Participant by theBoard specifying such failure, provided that such “Cause” shall have been foundby a majority vote of the Board after at least ten (10) days’ written notice tothe Participant specifying the failure on the part of the Participant and afteran opportunity for the Participant to be heard at a meeting of the Board; (ii)any willful act or omission by the Participant constituting dishonesty, fraudor other malfeasance, and any act or omission by the Participant constitutingimmoral conduct, which in any such case is injurious to the financial conditionor business reputation of the Corporation; or (iii) the Participant’sindictment of a felony under the laws of

 

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the United States or anystate thereof or any other jurisdiction in which the Corporation conductsbusiness.  For purposes of thisdefinition, no act or failure to act shall be deemed “willful” unless effectedby the Participant not in good faith and without a reasonable belief that suchaction or failure to act was in or not opposed to the best interests of theCorporation.

 

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 themeaning ascribed thereto in Section 3(a)(9) of the Exchange Act, asmodified and used in Sections 13(d)(3) and 14(d)(2) thereof, except thatsuch term shall not include (A) the Corporation, (B) any trustee or otherfiduciary holding securities under an employee benefit plan of the Corporation,(C) an underwriter temporarily holding securities pursuant to an offering ofsuch securities, 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 theChange of Control or otherwise arose in connection with or in anticipation ofthe Change of Control, then, for all purposes of this Plan, “Effective Date”shall mean, with respect to such Participant only, the date immediately priorto the date of such termination of employment.

 

3.1.4.       “Good Reason”.  “Good Reason” means (i) removal from, orfailure to be reappointed or reelected to, the Participant’s principalpositions in existence immediately prior to Change of Control (other than as aresult of a promotion); (ii) diminution in the Participant’s title, position,duties or responsibilities, or the assignment to the Participant of duties thatare inconsistent, in a material respect, with the scope of duties andresponsibilities 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 of Section3.5.7, provided that the successor shall have received at least ten (10) days’prior written notice from PEC or the Participant of the requirements of Section3.5.7.  For purposes of clauses (i),(ii) or (iii) of the preceding sentence, an isolated, insubstantial andinadvertent action not taken in bad faith and which is remedied by PEC promptlyafter receipt of notice thereof given by the Participant shall beexcluded.  For purposes of clause (ii),no diminution of title, position, duties or responsibilities shall be deemed tooccur solely because PEC becomes a subsidiary of another corporation or changein the reporting hierarchy incident thereto.

 

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 therewiththat the Participant’s employment with the Corporation will continue for aspecified period thereafter.  Thefailure by the Participant or the Corporation to set forth in any such noticesufficient facts or circumstances showing Good Reason or Cause, as the case maybe, shall not waive any right of the Participant or the Corporation or precludeeither party from asserting such facts or circumstances in the enforcement ofany 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 then outstanding.  The preceding sentence shall not apply with respect to any optionif: (i) in connection with the Change of Control, another entity (a) shall haveassumed or will assume the obligations of PEC with respect to such option, or(b) shall have issued or will issue one or more options of equivalent economicvalue with equivalent vesting conditions to replace such option; and (ii) theassumed or replacement option as set forth in clause (i), pursuant to itsterms, shall vest as of the date the Participant’s employment with theCorporation is terminated without Cause by the Corporation, or for Good Reasonby the Participant, on or within six (6) months after the Effective Date.  The Board shall have sole discretion in thedetermination of whether a replacement option is of equivalent economic valueto 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, thenthe period during which the Participant may exercise such option following hisor her termination of employment with the Corporation shall be determined byexcluding the period during which the Participant is subject to thatrestriction.

 

3.3           Adjustment of Lump Sum CashPayment.

 

3.3.1.       Adjustment.  Notwithstanding anything in this Plan or anyLetter Agreement to the contrary, in the event the Law or Accounting Firm (asdefined in Section 3.3.2) shall determine that the Lump Sum Cash Payment andany other payment or distribution in the nature of compensation by theCorporation to or for the benefit of the Participant, whether paid or payableor distributed or distributable pursuant to the terms of this Plan or otherwise(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 successor provision)of the Code (the “Parachute Payments”), the Participant’s Lump Sum Cash Paymentshall be reduced to an amount (not less than zero) which shall not cause anyportion of the Payments to constitute Parachute Payments, provided that no suchreduction shall be made if the Participant’s Payments, after the reduction andafter the application of Federal income tax at the highest rate applicable toindividual taxpayers, shall not be greater than the present value (determinedin accordance with Section 280G of the Code) of the Payments before thereduction but after the application of (i) excise tax under Section 4999 of theCode and (ii) Federal income tax at the highest rate applicable to individualtaxpayers.

 

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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 at suchdetermination, 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 ofactuarial or accounting professionals to the extent it deems necessary oradvisable.  In the event that the Law orAccounting Firm determines, for any reason, that it is unable to perform suchservices, or declines to do so, PEC shall select another nationally recognizedlaw or accounting firm to make the determinations required under this Section(which law or accounting firm shall then be referred to as the Law orAccounting 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 be bornesolely by PEC.  Any determination by theLaw or Accounting Firm shall be binding upon PEC and the Participant.

 

3.4           Terms andConditions 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 tochange the fact that the employment of the Participant by the Corporation is“at will” and, prior to the Effective Date, may be terminated by either theParticipant or the Corporation at any time, (ii) the Participant shall be boundby, and comply with, the requirements of Sections 3.5.3 and 3.5.4, and (iii)the Participant 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 tortclaims, contract claims and claims under this Plan (other than claims withrespect to benefits under the Corporation’s tax-qualified retirement plans,continuation of coverage or benefits solely as required by Part 6 of Title I ofthe Employee Retirement Income Security Act of 1974, or any obligation of PECto provide future performance under Section 3.2.3).  All amounts payable by PEC hereunder shall be paid without noticeor demand, 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 any ConfidentialInformation to any person other than the Corporation and those designated by itor use any Confidential Information except for the benefit of theCorporation.  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 provisions ofthe 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 orshe cannot 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 include any individual orentity, 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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**EXHIBITA**

 

KEY EXECUTIVE SEVERANCEPLAN

 

July 23, 2003

 

Dear John:

 

On July 14, 2003,the Compensation Committee of the Board of Director of PEC, Inc. approved theenclosed PEC, Inc. Key Executive Severance Plan (the “Plan”).  You are eligible to participate in the Planand will become a Participant therein upon signing this letter agreement.  As used in this letter, each capitalizedterm, if not defined herein, has the meaning ascribed to it under the Plan.

 

For purposes ofSection 3.2.2 of the Plan, the amount of the Lump Sum Cash Payment, in theevent you become entitled to benefits under the Plan, will be equal to theproduct of (a) 0.5 and (b) thesum of (i) your actual annual rate of base salary as in effect immediatelyprior to either the date of your termination of employment with the Corporationor the Effective Date, whichever is higher, and (ii) the average of your annualbonus payments under the Corporation’s annual bonus plan for the last three (3)years ending before either the Effective Date or the date your employment withthe Corporation terminates, whichever is higher.

 

If you will nothave been eligible to participate in the annual bonus plan for all three (3)years ending before either the Effective Date or the date of your termination,your average annual bonus payment (with respect to the years ending before theEffective Date or the date of termination, as applicable) shall be determinedonly for the years with respect to which you shall have been eligible toparticipate.  For purposes of the Plan,your base salary will include (i) your cash allowances reportable as wages inForm W-2, and (ii) the dollar value of any compensation that would have beenpaid to you but was deferred or excluded for Federal income tax purposes undera deferred compensation plan, program or arrangement.

 

For purposes ofSection 3.2.3, the Coverage Period, in the event you become entitled tobenefits under the Plan, will begin on the date immediately following thetermination of your employment with the Corporation and shall end on the date six (6) months thereafter.

 

Please review theprovisions of the Plan and its stated purposes carefully, including particularlythe terms and conditions stated in Sections 3.4 (Terms and Conditions ofParticipation), 3.5.3 (Confidential Information), and 3.5.4 (Solicitation ofEmployees), to which you will agree by executing this letter agreement.  In order to be entitled to the benefits andagree

 

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to your obligationsprovided in the Plan, please execute the enclosed copy of this letter andreturn it to Alan Harbitter, Secretary of PEC, whereupon the Plan and thisletter will become a legally 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/ John T. Forbus             |   |   |   |   |   |   |                |                   |
| Date:  7/30/03            |   |   |   |   |   |   |                |                   |
|                                |        |        |        |        |        |        |                     |                        |  |

 

 

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