effective on the Notification Date, Employee expressly resigns from all offices, directorshipsand fiduciary positions with the Company or any related entities.     **2. ****PAYMENTS BY ALION**          (a) For the period from the Notification Date through the Separation Date, Employee shallremain on the Company’s payroll at his current annual base salary. If Employee signs and does notrevoke this Agreement, then, subject to the following paragraph, Alion shall make the followingpayments (“Severance Installment Payments”) to Employee:          (i) Within thirty (30) days of the Separation Date, a payment equal to $270,000(“First Severance Installment Payment”), which Employee acknowledges is equal to one halfof Employee’s annual salary and three-fourths of Employee’s actual bonus for the lastcomplete fiscal year prior to the Separation Date; and          (ii) Within six months of payment of the First Severance Installment Payment, apayment equal to $270,000, which Employee acknowledges is equal to one half of Employee’sannual salary and three-fourths of Employee’s actual bonus for the last complete fiscalyear prior to the Separation Date.          Notwithstanding the foregoing, the Company’s obligation to pay Severance Installment Paymentspursuant to this Paragraph 2(a), to the extent not already paid, shall cease immediately and suchpayments will be forfeited if Employee violates any condition described in Paragraph 5, 6, 7 or 8.          (b) (i) In addition to the severance payments set forth above, the Company shall pay toEmployee the amount equal to all amounts due for the following vested and prorated unvested sharesof phantom stock under the Amended and Restated Alion Science and Technology Corporation PhantomStock Plan and the Amended and Restated Alion Science and Technology Corporation Performance Sharesand Retention Phantom Stock Plan (collectively, the “Plans”) and the Phantom Stock Agreements ofEmployee (the “Phantom Stock Payment”):       **Number of**    **Current** **Full****Grant Date** **Shares** **Vesting Date**February 11, 2003 2,500 February 11, 2008November 11, 2003 1,359.62 November 11, 2008February 1, 2005 45,445 February 1, 2008February 1, 2005 30,297 February 1, 2008November 9, 2005 13,931.46 November 9, 2010November 9, 2005 11,145.17 November 9, 2008November 14, 2006 10,238.91 November 14, 2009November 11, 2007 2,496.88 November 11, 2010**Total:** 117,414.04  
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          (ii) The per share value of all of the above phantom stock shall be fixed at $40.05,notwithstanding any valuations of the phantom stock preceding or subsequent to the date of thisAgreement.          (iii) The Company shall pay to Employee the Phantom Stock Payment in accordance with thefollowing schedule: (aa) The amount of $1,000,000 shall be paid no later than December 31, 2008;and (bb) All remaining amounts shall be paid no later than March 14, 2009.          (iv) All Phantom Stock Payments shall be subject to approval by the Company’s CompensationCommittee or Board of Directors no later than May 16, 2008, such approval to be evidenced by awritten certification by the Company’s General Counsel to Employee’s counsel. In the event that theCompany’s Compensation Committee or Board of Directors fails to approve the Phantom Stock Payments,Employee may, at his option, revoke this Agreement. Upon such approval and certification thereof,and subject to the conditions set forth in Section 4(c)(ii) below, this Agreement shall be bindingas of the date of the execution of this Agreement.          (c) In addition to the above payments, the Company shall pay to Employee, contemporaneouslywith the payment set forth in Paragraph 2(a)(i) above, all outstanding and accrued Paid Time Off(“PTO”). In addition, Employee shall be paid amounts currently held on his behalf in the AlionNon-Qualified Deferred Compensation Plan in accordance with the terms of such plan.          (d) Employee shall be permitted to continue the use of the automobile under the Company’scurrent automobile lease for Employee until the Separation Date. On or before close of business onthe Separation Date, Employee shall return the automobile, along with all accessories purchased orreimbursed by the Company, to the Company’s Director of Human Resources. As of one (1) day afterthe Separation Date, any insurance coverage on behalf of Employee with regard to such automobileshall cease at the Company’s discretion.          (e) Except as provided in this Agreement or under the terms of an applicable employee benefitplan, no further payments shall be made to Employee.          (f) The Company shall withhold such tax, payroll and other amounts from payments under thisAgreement as Employee authorizes or the Company reasonably believes to be required by law. Employeeshall be solely responsible for payment of his own taxes, including any taxes arising underInternal Revenue Code Section 409A. The Company has not provided and will not provide tax adviceto Employee.     **3. ****EMPLOYMENT BENEFITS**          (a) Employee agrees and acknowledges that his participation in any 401(k) Plan, short-term andlong-term Disability Plans, or any other benefit plans made available to him as an Alion employee,and his participation in and entitlement to any
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and all other benefits in which he is currentlyenrolled, but which are not specifically addressed in this Agreement, will terminate on theSeparation Date.          (b) Employee’s participation in the Alion medical, dental, vision and other insurance plansshall cease as of the Notification Date; provided that, to the extent that Employee is eligible forand elects to receive medical and/or dental benefits pursuant to the provisions of the ConsolidatedOmnibus Budget Reconciliation Act (“COBRA”) for himself and/or any qualifying beneficiaries, theCompany shall pay on Employee’s behalf, or reimburse Employee for, the amount of the applicableCOBRA that exceeds the amount of premium payable by Employee for the same level of coverageimmediately prior to the effective date of termination. Any such COBRA premium payment by theCompany that constitutes taxable income to Employee shall be grossed up by the Company, assuming anapplicable income tax rate of forty percent (40%). Payments under this paragraph shall cease atthe earlier of (i) the end of the first month in which Employee is no longer eligible for COBRA forany reason (other than death or eligibility for Medicare, provided that COBRA coverage continuesfor any qualified beneficiary), or (ii) Eighteen (18) months after the Notification Date. Employeeshall notify the Company as soon as practicable after he ceases to be eligible for COBRA coveragedue to coverage under the group health plan of another employer.          (c) Except as otherwise provided in this Agreement, Employee waives any right of participationin, or additional benefits under, the employee benefit, fringe benefit and compensation plans ofAlion with respect to any period after the Separation Date.     **4. ****GENERAL RELEASE BY EMPLOYEE**          (a) Employee hereby releases and forever discharges Alion, its subsidiaries, affiliates,insurers, predecessors, successors, and assigns, and the directors, officers, shareholders,employees, representatives and agents of each of the foregoing (collectively “Releasees”) of andfrom the following:          (i) Any and all claims, demands, and liabilities whatsoever of every name and nature(other than those arising directly out of this Agreement), including, without limitation,those with respect to Employee’s employment by Alion, or the terms and conditions ofemployment, benefits or compensation, or termination of his employment, which Employee hasor ever had against Releasees; and          (ii) Without limitation, any and all claims known or unknown as of the date ofexecution of this Agreement for tortious injury, breach of contract, and/or wrongfuldischarge (including, without limitation, any claim for violation of public policy orconstructive discharge), any personal gain with respect to any claim arising under the *qui tam*provisions ofthe False Claims Act, 31 U.S.C. 3730 or any other whistleblower claim, all claims forinfliction of emotional distress, all claims for slander, libel, or defamation ofcharacter, and all claims for reinstatement, back pay, front pay, compensatory or punitive damages,
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severance pay, attorneys’ fees, or costs, as related to Employee’s employment byAlion, or the terms and conditions or termination of his employment, benefits orcompensation, or termination of such employment; and          (iii) Without limitation, any and all claims known or unknown based upon anyallegation of employment discrimination, including, without limitation, discrimination onthe basis of race, color, sex, sexual orientation, age (including any claim pursuant to thefederal Age Discrimination in Employment Act), religion, disability, national origin or anyother classification protected under applicable law.          (b) It is agreed and understood that this release is a GENERAL RELEASE to be construed in thebroadest possible manner consistent with applicable law.          (c) Employee acknowledges and agrees that Employee:          (i) has not filed or pursued any claim released hereby against any Releasee by filinga lawsuit in any local, state or federal court for or on account of anything which hasoccurred up to the present time as a result of Employee’s employment or termination ofemployment, and Employee shall not seek reinstatement or future employment with, or damagesof any nature, severance pay, attorneys’ fees, or costs from any Releasee; and          (ii) has been given the opportunity, if he so desires, to consider this Agreement fortwenty-one (21) days before executing it. Any change made to the Agreement during the21-day period, whether material or not, will not restart the running of the 21-day period.In the event that Employee executes this Agreement within twenty-one (21) days of the dateof its delivery to him, he acknowledges that such decision was entirely voluntary and thathe had the opportunity to consider this Agreement for the entire twenty-one (21) dayperiod. For a period of seven (7) days from the date of the execution of this Agreement,Employee shall retain the right to revoke this Agreement in accordance with 29 U.S.C. § 626by written notice to Alion, c/o Kathy Madaleno, Director of Human Resources, 1750 TysonsBoulevard, Suite 1300, McLean, Virginia 22102. This Agreement shall not become effectiveor enforceable until the expiration of such revocation period; and          (iii) has been and is advised to consult an attorney regarding this Agreement prior toexecuting it and that he has been given sufficient time to do so; and          (iv) has received full and adequate consideration for this General Release; and          (v) fully understands and acknowledges the significance and consequences of thisAgreement and represents by his signature that the terms of this Agreement are fullyunderstood and voluntarily accepted by him. This
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Agreement has been individually negotiated by Employee and is not part of a group exitincentive or other group employment termination program.          (d) Excluded from this General Release are any claims or rights which cannot be waived by law,including the right to challenge the enforceability of this Agreement and the Employee’s right tofile a charge with an administrative agency or participate in any agency investigation where thatagency expressly prohibits such a waiver. However, Employee is waiving his right to recover anymoney or to reinstatement with any Releasee in connection with such a charge or investigation.Employee is also waiving his right to recover money in connection with a charge filed by any otherindividual or by the Equal Employment Opportunity Commission or any other federal, state or localagency.          (e) This General Release becoming and remaining effective shall be a condition precedent toEmployee obtaining any payments or benefits under this Agreement.     **5. ****NONDISCLOSURE OF INFORMATION; RETURN OF PROPERTY**          (a) Employee shall keep secret and confidential and shall not disclose to any third party, inany fashion or for any purpose whatsoever, any information regarding Alion which is (i) notavailable to the general public, and/or (ii) not generally known outside the Company, and (iii) isconsidered proprietary to or a trade secret of the Company, to which he has or will have had accessat any time during the course of his employment by the Company, including, without limitation, anyinformation relating to: the Company’s business or operations; its plans, strategies, prospects orobjectives; its products, technology, processes or specifications; its research and developmentoperations or plans; its customers and customer lists; its manufacturing, distribution, sales,service, support and marketing practices and operations; its financial condition and results ofoperations; its operational strengths and weaknesses; and, its personnel and compensation policiesand procedures.          (b) Employee agrees to return to Alion, on the Notification Date or at such later time asAlion may allow in its sole discretion, (i) all documents, data, material, details and copiesthereof in any form (electronic or hard copy) that are the property of Alion or were created usingAlion resources or during any hours worked for Alion including, without limitation, any datareferred to in the immediately preceding Paragraph; and (ii) all other Alion property including,without limitation, all computer equipment (except as otherwise agreed, but including electronicinformation and/or software on Alion-provided computerequipment to be retained by Employee) and associated passwords, property passes, keys, creditcards, business cards and identification badges.     **6. ****NO DETRIMENTAL COMMUNICATIONS**          Employee agrees that he will not make, disclose or cause to be disclosed any negative,adverse, false or derogatory comments or statements about Releasees
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with regard to any product or service provided by Releasees, about Releasees’ prospects for the future, or about Releasees ingeneral. Alion agrees that no authorized officer of Alion will disclose or cause to be disclosedoutside of Releasees any negative, adverse, false or derogatory comments or statements aboutEmployee. The parties agree that this provision will not be construed so as to bar any person fromproviding full and truthful testimony in response to a summons, court or administrative order orsubpoena, or as otherwise provided by law, or discussion of matters affecting Employee with theCompany’s outside legal and accounting representatives. For the limited purposes of this Paragraphonly, the term “Releasees” shall mean only the directors, chief executive officer and executive andsenior vice presidents of Alion.     **7. ****FUTURE ASSISTANCE**          Alion may seek the assistance and cooperation of Employee in connection with any audit,investigation, litigation or proceeding arising out of matters within the knowledge of Employee andrelated to his position as an employee of Alion, and in any such instance, Employee, uponreasonable notice, shall provide (up to a maximum of 20 hours per month after the Separation Date)such assistance, cooperation or testimony, and Alion shall pay Employee’s reasonable costs andexpenses in connection therewith.     **8. ****NON-COMPETITION; NON-SOLICITATION**          (a) Non-Competition. Employee agrees that, for a period of one and one-half (1.5) years afterthe Notification Date, he will not, directly or indirectly, compete with the Company or itssubsidiaries or affiliates by providing services or by being an officer, director, employee,consultant, agent, advisor, shareholder or owner to or of any other person, partnership,association, corporation, or other entity that is a “Competing Business,” except that he may havean ownership interest of up to two percent (2%) of a Competing Business which is a public company.As used herein, a “Competing Business” is any business whose activities relate to the products orservices of the same or similar type as the products or services which are sold (or, pursuant to anexisting business plan, will be sold) to paying customers of the Company or its subsidiaries oraffiliates, and for which Employee had the responsibility to plan, develop, manage, market, oroversee, or had any such responsibility within Employee’s most recent twenty-four (24) months ofemployment with the Company. Following termination of employment, Employee may request in writingan exception to the foregoing provision from the Company for prospective employment, whichexception will be granted if the Company, in its sole discretion, determines that such prospective employment will not unduly or materially competewith or otherwise interfere with the business of the Company.          (b) Non-Solicitation of Clients and Others. In addition to the foregoing, Employee agreesthat, for a period of one and one-half (1.5) years after the Notification Date, he will not,directly or indirectly, intentionally entice, induce or solicit, or attempt to entice, induce orsolicit, any individual or entity having a current or prospective business relationship with theCompany, whether as a consultant, client, customer or otherwise,
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to terminate or cease such relationship with the Company, or to fail to enter into or renew such relationship with theCompany.          (c) Non-Solicitation of Employees and Others. In addition to the foregoing, Employee agreesthat, for a one and one-half (1.5) years after the Notification Date, Employee shall not, on hisown behalf or on behalf of any other person, partnership, association, corporation, or entity: (i)directly, indirectly, or through a third party hire or cause to be hired; (ii) directly,indirectly, or through a third party solicit; or (iii) in any manner attempt to influence or induceany employee of the Company or its subsidiaries or affiliates to leave the employment of theCompany or its subsidiaries or affiliates, nor shall he use or disclose to any person, partnership,association, corporation, or other entity any information obtained concerning the names andaddresses the Company’s employees. Employee further agrees and acknowledges that the Company hasconfidentiality and non-competition agreements with certain of its employees, and he agrees that hewill not interfere with any such agreements.          (d) Survival; Severability. The parties agree that the above restrictions on competition arecompletely severable and independent agreements supported by good and valuable consideration and,as such, shall survive the termination of this Agreement for whatever reason. The parties furtheragree that any invalidity or unenforceability of any one or more of such restrictions oncompetition shall not render invalid or unenforceable any remaining restrictions on competition.Additionally, should a court of competent jurisdiction determine that the scope of any provision ofthis Paragraph 8 is too broad to be enforced as written, the parties intend that the court reformthe provision to such narrower scope as it determines to be reasonable and enforceable. Employeeacknowledges and agrees that the non-competition and non-solicitation provisions herein areexpressly assignable to any successor of the Company.     **9. ****GOVERNING LAW; SEVERABILITY**          This Agreement is entered into and shall be construed under the laws of the Commonwealth ofVirginia. In the event any provision of this Agreement is determined to any extent to be illegalor unenforceable by a duly authorized court of competent jurisdiction, then the illegal orunenforceable provision shall be severed from this Agreement. In the event of such severance, theremainder of this Agreement shall not be affected thereby, and each remaining provision of this Agreement shall be valid and enforceable to the fullest extentpermitted by law; provided, however, that the parties expressly acknowledge and agree that the fullwaiver and release of all claims by Employee is essential to effectuate the parties’ intent inentering into this Agreement and that, in the event the general release of claims set forth inParagraph 4 is severed, the parties’ remaining obligations under this Agreement shall be deemedwaived (other than obligations arising under Paragraphs 5 and 8), and any consideration or valuedelivered by one party to the other under this Agreement shall constitute a binding obligation bythe recipient to the other; provided, however, that nothing in this Agreement shall constitute awaiver of Employee’s right to receive and/or retain those
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Phantom Stocks (and related Phantom Stock payments) that are vested prior to and including February11, 2008 in accordance with the terms of the Plans.     **10. ****WAIVERS**          The failure of either party to require the performance of any term or obligation of thisAgreement, or the waiver by either party of any breach of this Agreement, shall not prevent anysubsequent enforcement of such term or obligation and shall not be deemed a waiver of anysubsequent breach.     **11. ****AMENDMENTS**          This Agreement may be modified or amended, in whole or in part, only by the mutual agreementof the parties in writing.     **12. ****NO OTHER INDUCEMENTS**          This Agreement sets forth the entire understanding of the parties in connection with thesubject matter hereof. Any and all prior negotiations or discussion, either oral or written, aremerged into this Agreement. Neither of the parties has made any settlement, representation orwarranty in connection herewith (except those expressly set forth in this Agreement) which has beenrelied upon by the other party, or which acted as an inducement for the other party to enter intothis Agreement.     **13. ****PERSONS BOUND BY AGREEMENT**          This Agreement shall be binding upon and inure to the benefit of Employee and Releasees andtheir respective successors.     **14. ****ASSIGNMENT OF INTERESTS**          Employee warrants that he has not assigned, transferred or purported to assign or transfer anyclaim against Releasees.     **15. ****PREVAILING PARTY ENTITLED TO FEES**          In the event that any action or proceeding is initiated to enforce or interpret the provisionsof this Agreement, or to recover for a violation of the Agreement, the prevailing party in any suchaction or proceeding shall be entitled to its costs (including reasonable attorneys’ fees). Nothing in this Paragraph is intendedto, or shall, place any limitation or condition precedent on Employee’s ability to challenge thisAgreement.     **16. ****CONFIDENTIALITY**          Employee agrees to keep confidential, and not to disclose to any person or entity, the termsor conditions of this Agreement, except to his attorney, financial advisors and members of hisimmediate family, provided they agree to keep confidential such terms and conditions. In the eventthat Employee believes he is compelled by law
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to divulge the terms or conditions of thisAgreement, he will notify Alion’s Law Department of the basis for that belief before actuallydivulging the information. Employee hereby confirms that, as of the date of this Agreement, he hasnot disclosed the terms or conditions of this Agreement, except as otherwise provided in thisAgreement. Alion also agrees to keep confidential, and not to disclose, the terms and conditionsof this Agreement outside of Releasees, its attorneys and consultants, unless Company is otherwiserequired to disclose such terms and conditions by operation of law or request by a governmentalagency, or as required by any federal or state securities laws or regulations.     **17. ****CONFLICTS WITH PHANTOM STOCK AGREEMENTS**          The parties agree that to the extent that the provisions of this Agreement conflict with anyof the Phantom Stock Agreements entered into by and between Alion and Employee, the terms of thisAgreement shall prevail and supersede such Phantom Stock Agreements.          **IN WITNESS WHEREOF**, the parties hereby agree to the terms and conditions of this Agreement asset forth above.**EMPLOYEE:**     By: */s/ John M. Hughes* 4/24/2008       JohnM. Hughes  Date**ALION SCIENCE AND TECHNOLOGY CORPORATION:**     By: */s/ Stacy Mendler* 4/25/2008         Date
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