EXECUTION VERSION


 


Sterling Holdco, Inc.



NONQUALIFIED STOCK OPTION AGREEMENT


 


This NONQUALIFIED STOCK OPTION AGREEMENT (the
“Agreement”), dated as of February 9, 2012, is entered into by and between Sterling Holdco, Inc.,
a Delaware corporation (the “Company”), and «First_Name» «Last_Name» (the “Participant”),
pursuant to the Sterling Holdco, Inc. Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”).
Capitalized terms that are not defined herein shall have the meanings given to such terms in the Plan.


 


WHEREAS, the Company desires to grant options
to purchase shares of its common stock, par value $0.01 per share (the “Common Stock”) to certain key employees
and nonemployee directors of the Company;


 


WHEREAS, the Company has adopted the Plan
in order to effect such grants; and


 


WHEREAS, the Participant is a key employee
or nonemployee director as contemplated by the Plan, and the Committee has determined that it is in the interest of the Company
to grant these options to the Participant.


 


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


 


1.           Confirmation
of Grant, Option Price.


 


(a)         Confirmation
of Grant. The Company hereby evidences and confirms the grant to the Participant, effective as of the date hereof (the “Grant
Date”), of:


 


(i)         options
to purchase from the Company «Time» shares of Common Stock, which shall become exercisable, if at all, as provided
in Section 2(a) (the “Service Options”); and


 


(ii)         options
to purchase from the Company «Performance» shares of Common Stock, which shall become exercisable, if at all,
as provided in Section 2(b) (the “Performance Options”).


 


(b)         Option
Price. The Options shall have an option price of $1,000 per share (the “Option Price”), which is
the Fair Market Value per share of the Common Stock on the Grant Date.


 



    	 



    	 



    

 


(c)         Options
Subject to Plan. The Options granted pursuant to this Agreement are subject in all respects to the Plan, all of the terms of
which are made a part of and incorporated into this Agreement. By signing this Agreement, the Participant acknowledges that he
or she has been provided a copy of the Plan and has had the opportunity to review such Plan.


 


(d)         Character
of Options. The Options granted hereunder are not intended to be “incentive stock options” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).


 


2.           Exercisability.


 


(a)         Service
Options. The Service Options shall become exercisable in five equal installments on each of the first five anniversaries of
July 20, 2011, subject to the Participant’s continuous employment or service with the Company or a Subsidiary from the
Grant Date to such anniversary.


 


(b)         Performance
Options.


 


(i)         Vesting.
The Performance Options shall become exercisable, if at all, based on the Providence Entities’ return on their investment
as follows: (i) if the Aggregate Proceeds, when converted into a return per share of Common Stock, are equal to $2,500 per
share (the “Aggregate Floor Value”), 50% of the Performance Options shall become exercisable; and (ii)
if the Aggregate Proceeds, when converted into a return per share of Common Stock, are equal to or greater than $3,000 per share
(the “Aggregate Maximum Value”), 100% of the Performance Options shall become exercisable. The determination
of whether any Performance Options shall have become exercisable shall be made as of the occurrence of an Exit Event and shall
include all cash sales proceeds for, or cash dividends or other distributions on, the Common Stock received by the Providence Entities
prior to and in connection with the Exit Event.


 


(ii)         Termination
of Options. In the event that any portion of the Performance Options do not become exercisable pursuant to this Section 2(b)
upon the occurrence of an Exit Event, such portion of such Performance Options shall automatically be cancelled without payment
therefor.


 


(c)         No
Other Accelerated Vesting. The vesting and exercisability provisions set forth in this Section 2 or in Section 5,
or expressly set forth in the Plan, shall be the exclusive vesting and exercisability provisions applicable to the Options and
shall supersede any other provisions relating to vesting and exercisability, unless such other such provision expressly refers
to the Plan by name and this Agreement by name and date.


 



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(d)          Definitions.
For purposes of this Agreement the following terms shall have the meanings set forth below:


 


(i)           The
“Aggregate Proceeds” means the actual net cash proceeds received by the Providence Entities for the Common Stock
(whether pursuant to a merger or consolidation, a sale of capital stock or all or substantially all of its assets, extraordinary
dividend, or otherwise) beneficially owned by the Providence Entities. The conversion of the Aggregate Proceeds into a return per
share of Common Stock shall be determined by the Committee. In the event that the Providence Entities hold shares of Common Stock
purchased at more than one price, the return per share of Common Stock shall be calculated by reference to a weighted average.


 


(ii)          An
“Exit Event” means a transaction or series of transactions (other than a Public Offering):


 


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


 


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


 


(d)          Normal
Expiration Date. Unless the Options earlier terminate in accordance with Sections 2, 4, or 5, the Options shall terminate
on the tenth anniversary of the Grant Date (the “Normal Expiration Date”). Once Options have become exercisable
pursuant to this Section 2, such Options may be exercised, subject to the provisions hereof, at any time and from time to
time until the Normal Expiration Date.


 


(e)         Calculations.
All calculations required or contemplated by this Section 2 shall be made in the sole determination of the Committee in
good faith and shall be final and binding on the Company and the Participant.


 


(f)         Board
Discretion. Notwithstanding the foregoing, the Board may accelerate the exercisability of any Option, all Options, or any class
of Options at any time and from time to time.


 



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3.           Method
of Exercise and Payment.


 


All or part of the exercisable Options may
be exercised by the Participant upon (a) the Participant’s written notice to the Company of exercise; (b)
the Participant’s payment of the Option Price in full at the time of exercise (i) in cash or cash equivalents, (ii)
following a Public Offering, in unencumbered shares of Common Stock owned by the Participant that have been owned by the Participant
for at least such period as is required by applicable accounting standards to avoid a charge to earnings and that have an aggregate
Fair Market Value on the date of exercise equal to such aggregate Option Price, (iii) in a combination of cash and such
unencumbered shares of Common Stock, or (iv) in accordance with such procedures or in such other form as the Committee
shall from time to time determine; and (c) if such Options are exercised prior to a Public Offering, the Participant’s
execution of the Management Stockholders Agreement in order to become a party to such agreements with respect to the shares of
Common Stock issuable upon the exercise of such Options. Notwithstanding clauses (a) and (b) in the preceding sentence,
in the event of the termination of the Participant’s employment prior to a Public Offering (I) by the Company or
a Subsidiary without Cause (including a termination by the Participant that is treated as a termination without Cause if so provided
in an employment agreement to which the Participant is a party), (II) by reason of the Participant’s death, or (III)
by reason of the Participant’s Disability, then in lieu of being required to exercise the Options and pay the Option exercise
price in full at the time of exercise as aforesaid, the Participant may direct the Company to cancel all or a portion of the Options
(to the extent then exercisable), and, in consideration of such cancellation, the Company shall (A) retain (i.e., not issue)
a number of shares of Common Stock (the “Unissued Option Shares”) that have an aggregate Fair Market Value
as of the date of cancellation equal to (x) the aggregate Option exercise price of the portion of the Options so cancelled
and (y) related withholding taxes (and the Participant shall thereupon be deemed to have satisfied his or her obligations
under Section 6), and (B) issue to the Participant a number of shares of Common Stock equal to the portion of the
Options so cancelled minus the number of Unissued Option Shares; provided, however, that the exercise of the Options
in this manner shall not be permitted if such manner of exercise would violate any financing instrument of the Company or any
of its Subsidiaries. As soon as practicable after receipt of a written exercise notice and payment in full of the exercise price
of any exercisable Options and, if applicable, receipt of evidence of the Participant’s execution of the Management Stockholders
Agreement in accordance with this Section 3, but subject to Section 6 below, the Company shall deliver to the Participant
a certificate or certificates representing the shares of Common Stock acquired upon the exercise thereof, registered in the name
of the Participant; provided that if the Company in its sole discretion shall determine that under applicable securities
laws any certificates issued under this Section 3 must bear a legend restricting the transfer of such Common Stock, such
certificates shall bear the appropriate legend.


 



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4.            Termination
of Employment or Service.


 


(a)          Termination
of Employment or Service Due to Death or Disability. Unless otherwise determined by the Committee, in the event that the Participant’s
employment or service with the Company or any Subsidiary terminates by reason of the Participant’s death or Disability (each
a “Special Termination”), then all Options held by the Participant that are exercisable as of the date of such
Special Termination may be exercised by the Participant or the Participant’s beneficiary as designated in accordance with
Section 9.2 of the Plan, or if no such beneficiary is named, by the Participant’s estate, at any time prior to 12 months
following the Participant’s termination of employment or the Normal Expiration Date of the Options, whichever period is
shorter (unless earlier terminated pursuant to Section 5). Upon a Special Termination, any Options that are not then exercisable
shall terminate and be cancelled immediately upon such termination of employment.


 


(b)         Termination
for Cause. Unless otherwise determined by the Committee, in the event that the Participant’s employment or service with
the Company or any Subsidiary is terminated for Cause, all Options held by the Participant, whether or not then exercisable, shall
terminate and be cancelled immediately upon such termination of employment or service.


 


(c)          Other
Termination of Employment or Service. Unless otherwise determined by the Committee, in the event that the Participant’s
employment or service with the Company or any Subsidiary terminates for any reason other than (i) a Special Termination
or (ii) for Cause, then any Options held by the Participant that are exercisable at the date of the Participant’s
termination of employment or service shall be exercisable at any time up until the 60th day following the Participant’s
termination of employment or service or the Normal Expiration Date of the Options, whichever period is shorter (unless earlier
terminated pursuant to Section 5). Any Options held by the Participant that are not then exercisable shall terminate and
be cancelled immediately upon such termination of employment or service.


 


(d)         Committee
Discretion. Notwithstanding anything else contained herein to the contrary, the Committee may at any time extend the post-termination
exercise period of all or any portion of the Options up to and including, but not beyond, the Normal Expiration Date of such Options.


 


5.           Change
in Control.


 


(a)          Accelerated
Vesting and Payment. Unless consented to by the Participant, in the event of a Change in Control, (i) each
outstanding Service Option (regardless of whether such Service Options are at such time otherwise exercisable), and
(ii) each outstanding Performance Option exercisable pursuant to Section 2(b) shall be cancelled in exchange for
a payment in cash of an amount equal to the excess, if any, of the Change in Control Price over the Option Price. All other
Options shall be automatically cancelled for no consideration.


 



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(b)          Limitation
on Benefits. Notwithstanding anything contained in this Option agreement or the Plan to the contrary, (i) to the extent
that any of the payments and benefits provided for under the Plan, this Agreement, or any other agreement or arrangement between
the Company and the Participant (collectively, the “Payments”) would constitute a “parachute payment”
within the meaning of Section 280G of the Code, the amount of such Payments shall be reduced to the amount that would result
in no portion of the Payments being subject to the excise tax imposed pursuant to Section 4999 of the Code; and (ii)
if and to the extent any Payments in respect of the Service Options would, absent application of this clause (ii), be an
“excess parachute payment” within the meaning of Section 280G of the Code (and the regulations promulgated thereunder),
such Service Options shall not accelerate in the event of a Change in Control (notwithstanding Section 5(a)), and shall be
honored, assumed, or new rights substituted therefor by the new employer in such Change in Control. If Payments that would otherwise
be reduced or eliminated, as the case may be, pursuant to the immediately preceding sentences would not be so reduced or eliminated,
as the case may be, if the shareholder approval requirements of Section 280G(b)(5) of the Code are capable of being satisfied,
the Company shall use its reasonable best efforts to cause such Payments to be submitted for such approval prior to the Change
in Control giving rise to such Payments.


 


6.          Tax
Withholding.


 


Subject to Section 3, whenever Common
Stock is to be issued pursuant to the exercise of an Option or any cash payment is to be made hereunder, the Company or any Subsidiary
shall have the power to withhold, or require the Participant to remit to the Company or such Subsidiary, an amount in cash sufficient
to satisfy the statutory minimum federal, state, and local withholding tax requirements relating to such transaction.


 


7.          Nontransferability
of Awards.


 


No Options granted hereby may be sold, transferred,
pledged, assigned, encumbered, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution
or, on such terms and conditions as the Committee shall establish, to a Permitted Transferee. All rights with respect to Options
granted to the Participant hereunder shall be exercisable during his or her lifetime only by such Participant or, if permitted
by the Committee, a Permitted Transferee. Following the Participant’s death, all rights with respect to Options that were
exercisable at the time of the Participant’s death and have not terminated shall be exercised by his or her designated beneficiary,
his or her estate or, if permitted by the Committee, a Permitted Transferee.


 



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8.          No
Rights as Stockholder.


 


Except as otherwise required by law, the Participant
shall not have any rights as a stockholder with respect to any shares of Common Stock covered by the Options granted hereby until
such time as the shares of Common Stock issuable upon exercise of such Options have been so issued. Notwithstanding anything else
contained herein to the contrary, the exercise of any portion of the Options conveyed hereby is expressly conditioned upon the
Participant becoming a party to the Management Stockholders Agreement with respect to any shares of Common Stock to be acquired
upon such exercise.


 


9.          Restrictions
on Sale Upon Public Offering.


 


Except as otherwise provided in the Registration
Rights Agreement, the Participant agrees that, in the event that the Company files a registration statement under the Act with
respect to a public offering of any shares of its capital stock, the Participant will not effect any sale or distribution of any
shares of the Common Stock, including but not limited to, pursuant to Rule 144 under the Act, within seven days prior to
and 180 days (or such shorter period as the managing underwriter for any underwritten offering may agree) after the effective
date of the registration statement relating to such registration (the “Trigger Date”), except as part of such
registration or unless, in the case of a sale or distribution not involving a public offering, the transferee agrees in writing
to be subject to this Section 9; provided that with respect to any shelf registration statement on Form S-3,
the Trigger Date shall be the pricing of any offering made under such registration statement and the Participant agrees to execute
a customary holdback agreement with the underwriters for any such public offering.


 


10.          Restrictive
Covenants and Remedies for Breach.


 


(a)          Restrictive
Covenants. In consideration of the receipt of the Options granted pursuant to this Agreement, the Participant agrees
to be bound by the covenants set forth below:


 


(i)          Confidentiality.
The Participant agrees that during the Participant’s employment with the Company or its Subsidiaries, and thereafter, the
Participant shall not disclose confidential or proprietary information, or trade secrets, related to any business of the Company
or its Subsidiaries including without limitation, and whether or not such information is specifically designated as confidential
or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets, suppliers,
and customers; financial information; information concerning the development of new products and services; and technical and non-technical
data related to software programs, design, specifications, compilations, inventions, improvements, patent applications, studies,
research, methods, devices, prototypes, processes, procedures, and techniques. The Participant’s obligations under this
Section 10(a)(i) are indefinite in term.


 



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(ii)         Return
of Company Property. The Participant acknowledges that all tangible items containing any confidential or proprietary information
or trade secrets, including without limitation memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes,
notes, documents, drawings, specifications, software, media, and other materials, including any copies thereof (including electronically
recorded copies), are the exclusive property of the Company and its Subsidiaries, and the Participant shall deliver to the Company
all such material in the Participant’s possession or control upon the Company’s request and in any event upon the termination
of the Participant’s employment with the Company or its Subsidiaries. The Participant shall also return any keys, equipment,
identification or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of the Participant’s
employment or the Company’s request.


 


(iii)         Noncompetition.
The Participant agrees that during the Participant’s employment with the Company or its Subsidiaries, and for the one-year
period following the date on which the Participant’s employment with the Company or its Subsidiaries terminates for any reason,
the Participant shall not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity
investment), provide services to, be employed by, or be connected in any manner with, any person or entity engaged in any business
that is competitive with (I) the line of business or businesses of the Company or its Subsidiaries in which the Participant
was employed during the Participant’s employment (including any prospective business to be developed or acquired that was
proposed at the date of termination), or (II) any other business of the Company or its Subsidiaries with respect to which
the Participant had substantial exposure during such employment. For avoidance of doubt, if the Participant is a senior officer
of the Company, the restriction contained herein shall relate to the Company and all of its Subsidiaries.


 


(iv)         Nonsolicitation.
The Participant agrees that during the Participant’s employment with the Company or its Subsidiaries, and for the one-year
period thereafter, the Participant shall not, directly or indirectly, on the Participant’s own behalf or on behalf of another:
(I) solicit, recruit, aid, or induce any employee of the Company or its Subsidiaries to leave his or her employment with
the Company or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated
with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying
or hiring any such employee; (II) solicit, aid, or induce any customer of the Company or its Subsidiaries to purchase
goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other person
or entity in identifying or soliciting any such customer; or (III) otherwise interfere with the relationship of the Company
or any of its Subsidiaries with any of its employees, customers, agents, representatives, or suppliers.


 



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(b)           Remedies.


 


(i)            Generally.
The Company and the Participant agree that the provisions of this Section 10 do not impose an undue hardship on the Participant
and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries;
that the nature of the Participant’s responsibilities with the Company under this Agreement provide and/or will provide
the Participant with access to confidential or proprietary information or trade secrets that are valuable and confidential to
the Company and its Subsidiaries; that the Company would not grant Options to the Participant if the Participant did not agree
to the provisions of this Section 10; that the provisions of this Section 10 are reasonable in terms of length of time
and scope; and that adequate consideration supports the provisions of this Section 10. In the event that a court determines
that any provision of this Section 10 is unreasonably broad or extensive, the Participant agrees that such court should narrow
such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed. The Company reserves all
rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable
relief, and compensatory damages for any breach of the Participant’s obligations under this Section 10.


 


(ii)           Forfeiture
of Options. Without limiting the generality of the remedies available to the Company pursuant to Section 10(b)(i), if
the Participant, except with the prior written consent of the Company, materially breaches the restrictive covenants contained
in this Section 10, the Participant shall: (I) forfeit any then-outstanding Options (whether vested or unvested);
(II) forfeit any shares of Common Stock acquired on exercise of the Options and then-owned by the Participant; and
(III) pay to the Company in cash any net after-tax gain the Participant realized in cash in connection with the exercise
of the Options (and/or sale of Common Stock underlying the Options). These rights of forfeiture and recoupment are in addition
to any other remedies the Company may have against the Participant for the Participant’s breach of the restrictive covenants
contained in this Section 10.





 


(iii)         Cumulative
Obligations. The Participant’s obligations under this Section 10 shall be cumulative (but not duplicative, nor
operate to extend the length of any such obligations) of any similar obligations the Participant has under the Plan or any other
agreement with the Company or any of its Subsidiaries.


 



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11.           Miscellaneous.


 


(a)           Notices.
All notices, requests, demands, letters, waivers, and other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered personally, (ii) mailed,
certified or registered mail with postage prepaid, (iii) sent by next-day or overnight mail or delivery, or (iv) sent
by fax, as follows:


 


		(i)	If to the Company, to:



 


Sterling Holdco, Inc.

c/o Providence Equity Partners L.L.C. 


50 Kennedy Plaza

18th Floor

Providence, Rhode Island 02903





Fax: +1 (401) 751-1790


Attention: Christopher C. Ragona



 


with copies to:


 


Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Fax: +1 (212) 909-6836

Attention: Jonathan F. Lewis


 


and


 


SRA International, Inc. 


4300 Fair Lakes Court

Fairfax, Virginia 22033

Fax: +1 (703) 803-1509

Attention: General Counsel


 


(ii)          If
to the Participant, to the Participant’s last known home address, or to such other person or address as any party shall specify
by notice in writing to the Company. All such notices, requests, demands, letters, waivers, and other communications shall be deemed
to have been received (w) if by personal delivery, on the day after such delivery, (x) if by certified
or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, or (z) if by fax, on the day delivered, provided that such delivery is confirmed.


 






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


 


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


 


(d)         Applicable
Law. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware, regardless of the
law that might be applied under principles of conflict of laws.


 


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


 


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


 


[Signature Page Follows]


 



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


 


	 	STERLING HOLDCO, INC.
	 	 
	 	By:	
    
	 	 	Name: William L. Ballhaus
	 	 	Title: Chief Executive Officer
	 	 
	 	PARTICIPANT
	 	 
	 	 
	 	«First_Name» «Last_Name»