Exhibit
10.16


 


PEC SOLUTIONS,
INC.


 


KEY EXECUTIVE
SEVERANCE 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 the availability of
objective advice and counsel from, key employees of the Corporation
notwithstanding the possibility, threat or occurrence of a bid or other action
to take over control of the Corporation.


 


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


 


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


 


II.  Eligible Executives.


 


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


 





















 


Each eligible employee shall become a Participant in
the Plan upon his or her execution of a letter agreement in the form, or
substantially in the form, of Exhibit A, attached to and incorporated in this
Plan (the “Letter Agreement”).  The
executed Letter Agreement shall constitute the Participant’s agreement to the
terms and conditions of participation in this Plan and shall set forth the
amount of the Lump Sum Cash Payment under Section 3.2.2, the length of the
Coverage Period for welfare benefit continuation under Section 3.2.3, and such
other terms and conditions as the Compensation Committee may determine
applicable to the Participant.


 


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


 


III.  Plan Provisions.


 


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


 


3.1.1.                     “Cause”.  “Cause” means (i) the Participant’s willful
and continued failure substantially to perform the duties of his or her
position (other than as a result of disability, as defined in Section 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 the Board after at least ten (10)
days’ written notice to the Participant specifying the failure on the part of
the Participant and after an opportunity for the Participant to be heard at a
meeting of the Board; (ii) any willful act or omission by the Participant
constituting dishonesty, fraud or other malfeasance, and any act or omission by
the Participant constituting immoral conduct, which in any such case is
injurious to the financial condition or business reputation of the Corporation;
or (iii) the Participant’s indictment of a felony under the laws of the United
States or any state thereof or any other jurisdiction in which the Corporation
conducts


 


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business.  For purposes of this definition, no act or
failure to act shall be deemed “willful” unless effected by the Participant not
in good faith and without a reasonable belief that such action or failure to
act was in or not opposed to the best interests of the Corporation.


 


3.1.2.                     “Change
of 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 “beneficial owner”
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), directly or indirectly, of securities of PEC (not
including in the securities beneficially owned by such person any securities
acquired directly from PEC other than in connection with PEC’s acquisition of a
business) representing more than fifty percent (50%) of the combined voting
power of PEC’s then outstanding securities; or


 


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


 


As used in this Section, the term “person” has the
meaning ascribed thereto in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d)(3) and 14(d)(2) thereof, except that
such term shall not include (A) the Corporation, (B) any trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation,
(C) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) any corporation owned, directly or indirectly, by the
stockholders of PEC in substantially the same proportions as their ownership of
common stock of PEC.


 


3.1.3.                     “Effective
Date”.  “Effective Date” means the
date on which a Change of Control occurs. 
In the event of a Change of Control occurring within six (6) months after
a prior Change of Control, “Effective Date” shall mean the date on which the
subsequent Change of Control occurs. 
Notwithstanding anything in this Plan to the contrary, if a Participant’s
employment with the Corporation had terminated prior to the date on which the
Change of Control occurred, and if it is reasonably demonstrated by the
Participant to the Board that such termination of employment either was at the
request of a third party who had taken steps reasonably calculated to effect
the Change of Control or otherwise arose in connection with or in anticipation
of the


 


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Change of Control,
then, for all purposes of this Plan, “Effective Date” shall mean, with respect
to such Participant only, the date immediately prior to the date of such
termination of employment.


 


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


 


3.2                                 Benefits.


 


3.2.1.                     Triggering
Event.  In the event the Participant’s
employment with the Corporation is terminated without Cause by the 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 or benefits to which
the Participant may otherwise be entitled under any other agreement, plan or
arrangement with the Corporation, other than amounts excluded by
Section 3.5.2) make the payments and provide the benefits to the
Participant as specified under Sections 3.2.2 and 3.2.3.  For purposes of this Section 3.2.1, a Participant’s
employment with the Corporation will be deemed to have terminated on the
earlier of the date the Participant’s employment with the Corporation ceases or
the date that written notice of any such termination is received by the
Participant or by the Corporation, as the case may be, even though the parties
may agree in connection therewith that the Participant’s employment with the
Corporation will continue for a


 


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specified period
thereafter.  The failure by the
Participant or the Corporation to set forth in any such notice sufficient facts
or circumstances showing Good Reason or Cause, as the case may be, shall not
waive any right of the Participant or the Corporation or preclude either party
from asserting such facts or circumstances in the enforcement of any such
right.


 


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


 


3.2.3.                     Welfare
Benefit Continuation.  The
Participant’s (and, where applicable, members of the Participant’s family’s)
participation in the group medical, dental, life (including split dollar, if
any) and disability plans maintained by the Corporation shall be continued on
substantially the same basis as if the Participant were an employee of the
Corporation until the end of the Coverage Period as set forth in the Letter
Agreement.  In the event that PEC is
unable for any reason to provide for the Participant’s (and, where applicable,
the Participant’s family’s) continued participation in one or more of such
plans during the Coverage Period, PEC shall pay or provide at its expense
equivalent benefit coverage for the remainder of the Coverage Period.  The Coverage Period shall, to the extent
allowed by law, be taken into account as a period of continuation coverage for
purposes of Part 6 of Title I of the Employee Retirement Income Security Act of
1974, as amended, and for purposes of any other obligation of the Corporation
to provide any continued coverage to the Participant (and, where applicable,
members of the Participant’s family) under any group medical, dental, life or
disability plan.  The Corporation shall
also pay to the Participant at least annually an amount which shall be
sufficient on an after tax basis to compensate the Participant for all
additional taxes incurred by reason of any income realized as a result of the
continued coverage under this Section, to the extent such taxes result from the
Participant’s status as a non-employee and would not be incurred if Participant
was an employee of the Corporation, on a grossed-up basis, at the highest
marginal income tax rate for individuals.


 


3.2.4.                     Accelerated
Vesting of Options.  All options
granted to a Participant to purchase common stock of PEC under any plan,
program or arrangement maintained by PEC, shall become fully vested and
exercisable as of the Effective Date of a Change of Control as defined in
Section 3.1.2(ii), to the extent such options are then outstanding.  The preceding sentence shall


 


5





















 


not apply with
respect to any option if: (i) in connection with the Change of Control, another
entity (a) shall have assumed 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 economic value with equivalent vesting conditions to
replace such option; and (ii) the assumed or replacement option as set forth in
clause (i), pursuant to its terms, shall vest as of the date the Participant’s
employment with the Corporation is terminated without Cause by the Corporation,
or for Good Reason by the Participant, on or within six (6) months after the
Effective Date.  The Board shall have
sole discretion in the determination of whether a replacement option is of
equivalent economic value to the replaced option.


 


3.2.5                        Exercisability
of Options After Termination.  If any
accounting requirements with respect to a Change of Control restrict a
Participant’s sale or transfer of stock 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 following his or her termination of employment with the
Corporation shall be determined by excluding the period during which the
Participant is subject to that restriction.


 


3.3                                 Adjustment
of Lump Sum Cash Payment.


 


3.3.1.                     Adjustment.  Notwithstanding anything in this Plan or any
Letter Agreement to the contrary, in the event the Law or Accounting Firm (as
defined in Section 3.3.2) shall determine that the Lump Sum Cash Payment and
any other payment or distribution in the nature of compensation by the
Corporation to or for the benefit of the Participant, whether paid or payable
or distributed or distributable pursuant to the terms of this Plan or otherwise
(the Lump Sum Cash Payment, together with such other payments and
distributions, the “Payments”), would cause any portion of such Payments to be
subject to the excise tax imposed by Section 4999 (or any successor provision)
of the Code (the “Parachute Payments”), the Participant’s Lump Sum Cash Payment
shall be reduced to an amount (not less than zero) which shall not cause any
portion of the Payments to constitute Parachute Payments, provided that no such
reduction shall be made if the Participant’s Payments, after the reduction and
after the application of Federal income tax at the highest rate applicable to
individual taxpayers, shall not be greater than the present value (determined
in accordance with Section 280G of the Code) of the Payments before the
reduction but after the application of (i) excise tax under Section 4999 of the
Code and (ii) Federal income tax at the highest rate applicable to individual taxpayers.


 


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


 


3.4                                 Terms
and Conditions of Participation


 


3.4.1.                     Conditions
of Participation.  As a condition to
being covered by the Plan, each Participant, by executing the Letter Agreement,
shall acknowledge and agree that (i) except as may otherwise be expressly provided
under any other executed agreement between the Participant and the Corporation,
nothing contained in this Plan (including, but not limited to, using the term “Cause”
to determine benefits under this Plan) is intended to change 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 the Participant or the Corporation
at any time, (ii) the Participant shall be bound by, 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 in Sections 3.2.4 and 3.2.5.  Moreover, if prior to the Effective Date, the
Participant’s employment with the Corporation terminates, then the Participant
shall have no further rights under this Plan.


 


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3.4.2.                     Non-Duplication.  As a condition to being covered by this Plan,
and notwithstanding any other prior agreement 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 the severance payable
under Section 3.2.2 of this Agreement (the “Severance Payment”) only if (a) the
Severance Payment results in a greater financial benefit to Participant than
the aggregate net present value of the payments payable under such other plans,
programs, policies and agreements and (b) Participant waives in writing all
rights to receive the salary continuation, severance or similar cash payments
under such other plans, programs, policies and agreements.  For purposes of the immediately preceeding
sentence, the net present value of a payment 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 be payable and based upon a discount factor
determined to be reasonable by the Law or Accounting Firm in good faith.  If Participant is eligible to continue
participation in the welfare benefit plans of the Corporation after termination
of employment pursuant to the provisions of any plan, program, policy or
agreement on terms that are different from the terms for continued
participation provided under Section 3.2.3 of this Agreement, Participant shall
be entitled to select whether the terms of this Agreement or the terms of such
other plan, program, policy or agreement shall govern Participant’s continued
participation in such welfare benefit plans; provided, however, that no
participation in or receipt of benefits under this Plan or any other plan,
program, policy or agreement shall be deemed to waive or diminish any right
that Participant or Participant’s eligible dependents has under the
Consolidated Omnibus Budget Reconciliation Act of 1985.


 


3.4.3.                     Amendment
and Termination.  The Plan may not be
amended or terminated after the Effective Date. 
Prior to the Effective Date, the Board may, in its sole discretion,
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) year prior to the
Effective Date and such action is communicated to the Participants prior to the
Effective Date, (ii) the Board, in its sole discretion, determines that such
actions are necessary, in its opinion, to permit any business combination that is
authorized by the Board to comply with requirements for treatment as a pooling
of interests transaction for accounting purposes under generally accepted
accounting principles, if such transaction is intended to meet, and is
conditioned upon compliance with, such requirements, or (iii) such actions do
not reduce the amount or defer the receipt of any payment or benefit provided
under this Plan.


 


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3.5                                 General.


 


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


 


3.5.2.                     Payment
Obligations; Overdue Payments.  The
Corporation’s obligations to make the payments and provide the benefits to the
Participant under this Plan shall be absolute and unconditional and shall not
be affected in any way by any circumstances, including, without limitation, any
offset, counterclaim, recoupment, defense or other right which PEC may have
against the Participant or anyone else, provided, however, that
as a condition to payment of amounts under this Plan, the Participant shall
execute a general release and waiver (the “Waiver”), in form and substance
reasonably satisfactory to PEC, of all claims relating to the Participant’s
employment 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 to benefits under the Corporation’s tax-qualified retirement plans,
continuation of coverage or benefits solely as required by Part 6 of Title I of
the Employee Retirement Income Security Act of 1974, or any obligation of PEC
to provide future performance under Section 3.2.3).  All amounts payable by PEC hereunder shall be
paid without notice or demand, except as may be required with respect to the
Waiver.  Each and every payment made
hereunder by PEC shall be final.  The
Corporation shall not seek to recover all or any part of such payment from the
Participant or from whosoever may be entitled thereto, for any reason
whatsoever.  The Participant shall not be
obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provision of this Plan, and the obtaining of any
such other employment shall in no event effect any reduction of PEC’s
obligations to pay the Lump Sum Cash Payment. 
The Participant shall be entitled to receive interest at the Prime Rate
on any payments under this Plan that are overdue, provided, however,
that no payments shall be deemed to be overdue until the Participant executes
the Waiver and any rescission period with respect to such Waiver has expired.


 


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3.5.3.                     Confidential
Information.  The Participant shall
at all times hold in a fiduciary capacity for the benefit of the Corporation
all secret, confidential or proprietary information, knowledge or data relating
to the Corporation, and its respective businesses, which shall have been obtained
by the Participant during the Participant’s employment by the Corporation and
which shall not be or become public knowledge (other than by acts by the
Participant or representatives of the Participant in violation of this 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 “Confidential
Information”).  During the Participant’s
employment with the Corporation and after termination of such employment at any
time or for any reason, and regardless of whether any payments are made to the
Participant under this Plan as a result of such termination, the Participant
shall not, without the prior written consent of the Corporation or as may
otherwise be required by law or legal process, communicate or divulge any
Confidential Information to any person other than the Corporation and those
designated by it or use any Confidential Information except for the benefit of
the Corporation.  Immediately upon
termination of the Participant’s employment with the Corporation at any time or
for any reason, the Participant shall return to the Corporation all
Confidential Information, including, but not limited to, any and all copies,
reproductions, notes or extracts of Confidential Information.  The terms of this Section shall be in
addition to, and not a replacement of, the provisions of the Corporation’s “Employee
Confidentiality and Inventions Agreement”.


 


3.5.4.                     Solicitation
of Employees.  During the Participant’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, and regardless
of whether any payments are made to the Participant under this Plan as a result
of such termination, the Participant shall not solicit, participate in or
promote the solicitation of any person who was employed by the Corporation at
the time of the Participant’s termination of employment with the Corporation to
leave the employ of the Corporation, or, on behalf of himself or any other
person, hire, employ or engage any such person. 
The Participant further agrees that, during such time, if an employee of
the Corporation contacts the Participant about prospective employment, the
Participant will inform such employee that he or she cannot discuss the matter
further without informing the Corporation.


 


3.5.5.                     Application
of Restrictions Respecting Confidential Information and Solicitation of
Employees.  The requirements and
obligations of the Participant under Sections 3.5.3 and 3.5.4 shall be in
addition to, and not a limitation under, any other requirements and obligations
of


 


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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 or
entity, including any corporation, trust or partnership.


 


3.5.7.                     Successors.  All right under this Plan are personal to the
Participant and without the prior written consent of PEC shall not be
assignable by the Participant otherwise than by will or the laws of descent and
distribution.  This Plan shall inure to
the benefit of and be enforceable by the Participant’s legal
representative.  This Plan shall inure to
the benefit of and be binding upon PEC and its successors and assigns.  PEC will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of PEC to assume expressly and
agree to perform this Plan in the same manner and to the same extent that PEC
would be required to perform it if no such event resulting in a successor had
taken place.


 


3.5.8.                     Controlling
Law; Jurisdiction.  This Plan shall
in all respects be governed by, and construed in accordance with, the laws of
the Commonwealth of Virginia (without regard to the principles of conflicts of
laws).  The Corporation and the
Participants irrevocably consent and submit to the jurisdiction of the Fairfax
County Circuit Court, or in any Federal court sitting in the Commonwealth of
Virginia, for the purposes of any controversy, claim, dispute or action arising
out of or related to this Plan, and hereby waive any defense of an inconvenient
forum and any right of jurisdiction on account of the parties’ place of
residence or domicile.


 


3.5.9.                     Severability.  Any provision in this Plan which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


 


Date:  July 14, 2003


 


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EXHIBIT A


 


KEY EXECUTIVE
SEVERANCE PLAN


 


March 29, 2005


 


 


Robert L. Veschi


 


 


Dear Bob:


 


 


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


 


For purposes of Section 3.2.2 of the Plan, the amount
of the Lump Sum Cash Payment, in the event you become entitled to benefits
under the Plan, will be equal to the product of (a) 0.5 and (b) the sum of (i)
your actual annual rate of base salary as in effect immediately prior to either
the date of your termination of employment with the Corporation or the
Effective Date, whichever is higher, and (ii) the average of your annual bonus
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 with the
Corporation terminates, whichever is higher.


 


If you will not have 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 the Effective Date or the date
of termination, as applicable) shall be determined only for the years with
respect to which you shall have been eligible to participate.  For purposes of the Plan, your base salary
will include (i) your cash allowances reportable as wages in Form W-2, and (ii)
the dollar value of any compensation that would have been paid to you but was
deferred or excluded for Federal income tax purposes under a deferred
compensation plan, program or arrangement.


 


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


 


Please review the provisions of the Plan and its
stated purposes carefully, including particularly the terms and conditions
stated in Sections 3.4 (Terms and Conditions of Participation), 3.5.3
(Confidential Information), and 3.5.4 (Solicitation of Employees), to which


 





















 


you will agree by
executing this letter agreement.  In
order to be entitled to the benefits and agree to your obligations provided in
the Plan, please execute the enclosed copy of this letter and return it to
Peter Fish, General Counsel of PEC, whereupon the Plan and this letter 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/ ROBERT L. VESCHI

  	
   

  
	
   

  
	
  Date: April 4,
  2005