EXHIBIT
10.4


 


STANLEY,
INC.

CHANGE IN CONTROL SEVERANCE AGREEMENT


 


This CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”)
is entered into on June 26, 2008, by and between Stanley, Inc. (the “Company”),
a Delaware corporation, and George H. Wilson (the “Executive”).


 


RECITALS


 


WHEREAS, the Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its stockholders; and


 


WHEREAS, the Executive has made and is expected to make a
significant contribution to the profitability, growth, and financial strength
of the Company; and


 


WHEREAS, it is in the best interests of the Company and its
stockholders to reinforce and encourage the continued attention and dedication
of management personnel, including the Executive, to their assigned duties
without distraction and to ensure the continued availability to the Company of
the Executive in the event of a Change in Control (as defined below);


 


NOW, THEREFORE, in
consideration of the Executive’s continued service to the Company and the
mutual agreements herein contained, and for other good and valuable
consideration, the receipt of which are hereby acknowledged, the Company and
the Executive hereby agree as follows:


 


ARTICLE I

Term of Agreement


 


This Agreement shall commence as of the date set forth
above (the “Effective Date”) and shall be for a term of two years.  Commencing on the second anniversary of the
Effective Date and on each subsequent anniversary thereof, the term of this
Agreement shall automatically be extended for successive one year terms (each a
“Renewal Term”) unless either the Company or the Executive shall have given
written notice to the other at least one year prior to the commencement of a
Renewal Term that the term of this Agreement shall not be so extended;
provided, however, that notwithstanding any such notice by the Company not to
extend, the term of this Agreement shall not expire during a Potential Change
in Control Period (as defined below) or prior to the expiration of 24 months
after the date of a Change in Control that occurs during the term hereof
(including during a Potential Change in Control Period).


 

















 


ARTICLE II

Definitions


 


Whenever used herein, the following terms shall have their
respective meanings set forth below.


 


2.1.                              “Base Salary” means the annual base
salary in effect for the Executive immediately prior to a Change in Control, as
such salary may be increased from time to time during the Term (in which case
such increased amount shall be the Base Salary for purposes hereof), but
without giving effect to any reduction thereto.


 


2.2.                              “Board” means the Board of Directors
of the Company.


 


2.3.                              “Cause” for termination by the
Company of the Executive’s employment means:


 


(a)                                  the Executive’s
conviction of a felony (except for a motor vehicle violation) or entering into
a guilty plea or plea of nolo contendere
with respect to such crime;


 


(b)                                 the Executive’s
willful and continued failure to substantially perform the duties and responsibilities
of the Executive’s position with the Company after a written demand for
substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed such duties or responsibilities;


 


(c)                                  the Executive’s
engaging in fraud or dishonesty relating to Executive’s employment, or other
willful misconduct or gross negligence of the Executive, which conduct is
materially injurious to the Company or its reputation, monetarily or otherwise;
or


 


(d)                                 the Executive’s
willful violation of Company policies, which conduct is materially injurious to
the Company or its reputation, monetarily or otherwise.


 


2.4.                              “Change in Control” means and shall be
deemed to have occurred as of the date of the first to occur of the following
events:


 


(a)                                  any Person or Group (each term as defined
below) acquires stock of the Company that, together with stock held by such
Person or Group, constitutes more than 50% of the total Fair Market Value (as
defined below) or total voting power of the stock of the Company.  However, if any Person or Group is considered
to own more than 50% of the total Fair Market Value or total voting power of
the stock of the Company, the acquisition of additional stock by the same
Person or Group is not considered to cause a Change in Control of the
Company.  An increase in the percentage
of stock owned by any Person or Group as a result of a transaction in which the
Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this subsection.  This subsection applies only when there is a
transfer of stock of the 


 

















 


Company (or issuance of stock of the Company) and stock in the Company
remains outstanding after the transaction;


 


(b)                                 any Person or Group acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Group) ownership of stock of the Company
possessing 30% or more of the total voting power of the stock of the Company;


 


(c)                                  a majority of members of the Company’s
Board is replaced during any 12-month period by Directors whose appointment or
election is not endorsed by a majority of the members of the Company’s Board
prior to the date of the appointment or election; or


 


(d)                                 any Person or Group acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Group) assets from the Company that have a total
gross fair market value equal to or more than 40% of the total gross fair
market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions.  For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.  
However, no Change in Control shall be deemed to occur under this
subsection (d) as a result of a transfer to:


 


(i)                                     A stockholder of the
Company (immediately before the asset transfer) in exchange for or with respect
to its stock;


 


(ii)                                  An entity, 50% or more
of the total value or voting power of which is owned, directly or indirectly,
by the Company;


 


(iii)                               A Person or Group that
owns, directly or indirectly, 50% or more of the total value or voting power of
all the outstanding stock of the Company; or


 


(iv)                              An entity, at least 50%
of the total value or voting power of which is owned, directly or indirectly,
by a person described in clause (iii) above.


 


For  these  purposes,
the  term  “Person”  shall  mean  an  individual,  company,
association,  joint-stock  company,
business  trust  or  other
similar organization, partnership, limited liability company, joint venture,
trust, unincorporated organization or government or agency, instrumentality or
political subdivision thereof.  The term “Group”
shall have the meaning set forth in Rule13d-5
of the Securities and Exchange Commission (“SEC”), modified to the extent
necessary to comply with Treasury Regulation Section 1.409A-3(i)(5), or
any successor thereto in effect at the time a determination of whether a Change
in Control has occurred is being made. 
If any one Person, or Persons acting as a Group, is considered to
effectively control the Company as described in subsections (b) or (c) above,
the acquisition of additional control by the same Person or Persons is not
considered to cause a Change in Control.


 


2.5.                              “Code” means the Internal Revenue
Code of 1986, as amended from time to time.


 





















 


2.6.                              “Company” means Stanley, Inc.
and all of its wholly-owned subsidiaries. 
Except as provided in the following sentences, the term “Company” shall
include (a) Stanley, Inc. or any wholly-owned subsidiary of Stanley, Inc.
which may become employer of the Executive, and (b) any successor to the
business or assets of Stanley, Inc., Stanley Associates, Inc. or any
wholly-owned subsidiary of Stanley, Inc., which employs the Executive and
agrees in writing or by operation of law to be bound by this Agreement.  Notwithstanding the foregoing, in determining
whether a Change in Control has occurred, the term “Company” shall mean Stanley, Inc.
(without regard to whether a successor is bound by this Agreement).  Stanley, Inc. shall be jointly and
severally liable with Stanley Associates, Inc. or any wholly-owned
subsidiary of Stanley, Inc. which may become employer of the Executive for
any amounts that become payable to this Executive under this Agreement.


 


2.7.                              “Date of Termination” has the
meaning set forth in Section 3.2.


 


2.8.                              “Disability” means total and
permanent disability of the Executive as a result of bodily injury, disease or
mental disorder which results in the Executive’s entitlement to long-term
disability benefits under the Company’s long-term disability plan.


 


2.9.                              “Executive” means the individual
named in the first paragraph of this Agreement.


 


2.10.                        “Fair Market Value”. means the
arithmetic mean of the highest and lowest sales prices of the stock as reported
on the consolidated tape for securities listed on the New York Stock Exchange (“NYSE”)
on a particular date.  In the event that
there are no stock transactions on such date, the Fair Market Value shall be
determined by utilization of the above formula as of the immediately preceding
date on which there were stock transactions.


 


2.11.                        “Good Reason” for termination by the
Executive of his employment means the occurrence (without the Executive’s
express written consent) after a Change in Control or during a Potential Change
in Control Period of any one of the following events, unless such event is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:


 


(a)                                  a material
diminution in the Executive’s Base Salary;


 


(b)                                 a material
diminution in the Executive’s authority, duties or responsibilities;


 


(c)                                  a material
diminution in the authority, duties or responsibilities of the supervisor to
whom the Executive is required to report, including a requirement that the
Executive report to a corporate officer or employee instead of directly to the
Board (if the Executive previously reported directly to the Board);


 


(d)                                 a material
diminution in the budget over which the Executive retains authority;


 


(e)                                  the Company
requiring the Executive to be based at an office that is both more than 50
miles from where the Executive’s office is located immediately prior to the
Change in Control and also more than 50 miles from the Executive’s then-current



 





















 


principal place of residence, except for required
travel on the Company’s business to an extent substantially consistent with the
business travel obligations which the Executive undertook on behalf of the
Company prior to the Change in Control; or


 


(f)                                   any other
action or inaction that constitutes a material breach by the Company of any
written agreement between the Company and the Executive pursuant to which the
Executive provides services.


 


In order for the Executive’s termination to be deemed
to be for Good Reason, the Executive must deliver Notice of Termination to the
Company describing the event(s) alleged to constitute Good Reason within
90 days of the occurrence of such event(s). 
Such Notice of Termination shall specify the Executive’s Date of
Termination, which date shall not be earlier than 30 days nor more than 60 days
after the date of the Notice of Termination. 
The Company may fully correct the event(s) constituting Good Reason
within a reasonable period of time (not less than 30 days) specified in the
Notice of Termination, in which case the Executive’s Notice of Termination for
Good Reason shall automatically be withdrawn and of no effect; provided,
however, that no opportunity to correct shall be available for any Good Reason
event which recurs after a prior correction by the Company.  The Executive’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder prior to 90 days after such
action or failure to act.


 


2.12.                       “Notice of Termination” has the
meaning set forth in Section 3.2.


 


2.13.                       “Potential Change in Control” shall
be deemed to have occurred if any of the following events shall have occurred:


 


(a)                                 the Company
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;


 


(b)                                the Company
publicly announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;


 


(c)                                 any Person
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities; or


 


(d)                                the Board
adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.


 


2.14.                       “Potential Change in Control Period”
shall commence upon the occurrence of a Potential Change in Control and shall
lapse upon the occurrence of a Change in Control or, if earlier (a) with
respect to a Potential Change in Control occurring pursuant to Section 2.13(a);
immediately upon the abandonment or termination of the applicable agreement; (b) with
respect to a Potential Change in Control occurring pursuant to Section 2.13(b),
immediately upon a public announcement by the Company that it has abandoned its
intention to take or consider taking actions which, if consummated, would
result in a Change in Control; or (iii) with respect to a Potential Change
in Control occurring pursuant to Section 2.13(c) or (d), upon the one
year 


 





















 


anniversary of the
occurrence of a Potential Change in Control (or, in the case of a Potential
Change in Control occurring pursuant to Section 2.13(d), such earlier date
as may be determined by the Board).  In
addition to the foregoing, any termination of an Executive by the Company at
the request of a third party in contemplation of a Change in Control or
Potential Change in Control shall be deemed to have occurred within a Potential
Change in Control Period.


 


2.15.                        “Release Agreement” means the agreement
required to be signed by the Executive and returned to the Company, as set
forth in Exhibit A hereto, as a condition for receiving certain of
the payments and benefits under this Agreement. 
The form of Release Agreement may be amended by the Company at any time
and from time to time to reflect changes in the law or to reflect such terms of
this Agreement or any other agreement between the parties which survive the
Executive’s termination of employment.


 


2.16.                        “Term” means the period of time
described in Article I (including any extension, continuation or
termination described therein).


 


ARTICLE III

Termination of Employment


 


3.1.                              Qualifying
Terminations.  If, during
the Term of this Agreement and either within 24 months after a Change in
Control or within a Potential Change in Control Period, (1) the Executive’s
employment is terminated by the Company or any successor to the Company for any
reason other than Cause, or (2) the Executive terminates his employment
due to Good Reason, then the Executive will be entitled to receive the
severance payments and benefits set forth in Article IV below; provided,
however, that no severance payments shall be made, or continuing benefits
provided, under this Agreement, if any of the following apply:


 


(a)                                  The Executive
voluntarily resigns or retires from employment other than timely resignation
for Good Reason;


 


(b)                                 The Executive
is terminated for Cause;


 


(c)                                  The Executive’s
employment terminates as a result of death or Disability; or


 


(d)                                 The Executive
declines to sign and return the Release Agreement set forth in Exhibit A
hereto, or revokes such Release Agreement within the time provided therein.


 


3.2.                              Notice
of Termination.  After a
Change in Control or Potential Change in Control, any purported termination of
the Executive’s employment (other than by reason of death) shall be
communicated by written Notice of Termination from one party hereto to the
other party in accordance with Section 7.4.  For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail any facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so
indicated.  The “Date of Termination,”
with respect to any purported termination of the Executive’s employment under
this Agreement shall mean the date specified in the Notice of 


 





















 


Termination for termination
(which, in the case of a termination by the Company other than for Cause, shall
not be less than 30 days and, in the case of a termination by the Executive,
shall not be less than 30 days nor more than 60 days, respectively, from the
date such Notice of Termination is given).


 


3.3.                              Exclusive
Source of Severance Compensation and Benefits.  If the Executive becomes entitled to
severance compensation and benefits under this Agreement, he or she shall not
be entitled to receive any severance compensation or benefits under any other
employment agreement to which the Company is a party, or under any severance
program or policy of the Company.


 


3.4.                              Other
Terminations.  This
Agreement does not apply to terminations of employment that occur prior to a
Change in Control or after the expiration of 24 months after a Change in
Control and also outside of a Potential Change in Control Period.


 


ARTICLE IV

Severance Benefits


 


4.1.                              Severance
Benefits.  If, during
the term of this Agreement, the Executive incurs a qualifying termination as
described in Section 3.1 above, then, subject to the Executive timely
executing and delivering the Release Agreement to the Company (except in the
case of payments under (a) below), which Release Agreement has not been
revoked in accordance with the terms thereof, the Executive shall be entitled
to the following compensation and benefits, subject to applicable income and
employment tax withholding:


 


(a)                                  Accrued
Compensation.  An amount
equal to the following amounts earned or accrued through the Termination Date,
but not paid as of the Termination Date: 
(i) Base Salary, (ii) reimbursement for reasonable and
necessary, properly-receipted expenses incurred by the Executive on behalf of
the Company during the period ending on the Termination Date, and (iii) accrued
but unused vacation pay.


 


(b)                                 Annual Bonus
Compensation.  An amount
equal to the highest annual bonus payment paid to the Executive for the prior
three years multiplied by a fraction, the numerator of which is the number of
days in the one year performance measurement period through the Date of
Termination and the denominator of which is 365.


 


(c)                                  Cash Severance.  An amount equal to two  multiplied
by the sum of the following amounts:


 


(i)                                     The Executive’s
Base Salary; plus


 


(ii)                                  The highest
annual bonus payment paid to the Executive for the prior three years.


 


(d)                                 Continuation of
Welfare Benefits. 
Continuation of medical and dental insurance coverage in which the
Executive (or his dependents) was participating as of the 


 





















 


Date of Termination (subject to such modifications
as shall be established for all employees of the Company) until the earliest
of:


 


(i)                                     the second
anniversary of the Date of Termination;


 


(ii)                                  the date the
Executive first breaches the Release Agreement or any restrictive covenant
hereunder or in any employment or other agreement with the Company which
survives termination of the Executive’s employment; or


 


(iii)                               the date the
Executive becomes eligible under a similar welfare benefit plan of a successor
employer.


 


If such coverage cannot be provided on a tax-advantaged basis under the
Company’s program, the Company will make a supplemental payment to the
Executive such that his after-tax cost of coverage will be no greater than the
cost for such coverage to a similarly-situated employee under the program.  Any increase in premium cost resulting from a
change in the Executive’s coverage election shall be borne by the
Executive.  In order to receive such
continued medical and dental coverage, the Executive must be eligible for and
elect continuation coverage under “COBRA” under the terms of the applicable
programs for the first 18 months of such coverage.


 


(e)                                  Outstanding
Equity Awards.  Any and all
outstanding unvested equity awards held by the Executive as of the Date of
Termination shall automatically vest  and
be deemed exercisable and/or vested, as the case may be.  Notwithstanding the foregoing, any
performance-based equity awards held by the Executive as of the Date of Termination
shall vest and be exercisable and/or paid to the Executive as and to the extent
provided in the applicable award agreement or plan document.  For the avoidance of doubt, this Agreement
shall be deemed to be an “Employment Agreement” as defined under the Company’s
equity incentive plan(s) and the applicable award agreements thereunder.


 


(f)                                    Perquisites.  Continuation of all perquisites and other
personal benefits in effect as of the Date of Termination (subject to such
modifications as shall be established for all employees and/or executives of
the Company) until the earliest of:


 


(i)                                     the second
anniversary of the Date of Termination;


 


(ii)                                  the date the
Executive first breaches the Release Agreement or any restrictive covenant
hereunder or in any employment or other agreement with the Company which
survives termination of the Executive’s employment; or


 


(iii)                               the date the
Executive becomes eligible for similar perquisites or other personal benefits
of a successor employer.


 


4.2.                              Payment
of Severance Compensation.  Except as provided in Section 4.3 below,
the cash payments described in Section 4.1(a) shall be made within
the time provided by law.   


 





















 


No reimbursement of expenses
under Section 4.1(a) shall be made after the last day of the year
following the year in which the expense was incurred.  The payments described in Section 4.1(b) and
(c) shall be made in a lump sum within five business days after the later
of the Date of Termination or the execution and return of the Release Agreement
and expiration of revocation period provided for therein.


 


4.3.                              Compliance
with Code Section 409A.  Each of the payments under Section 4.1(b),
(c), (d) and (f) above are designated as separate payments for
purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F),
the exemption for involuntary terminations under separation pay plans under
Treasury Regulation Section 1.409A-1(b)(9)(iii), and the exemption for
medical expense reimbursements under Treasury Regulation Section 1.409A-1(b)(9)(v)(B).  As a result, (a) any payments that
become vested as a result of the qualifying termination under Section 3.1
that are made on or before the 15th day of the third month of the calendar year
following the calendar year of the Executive’s termination, (b) any
additional payments that are made on or before the last day of the second
calendar year following the year of the Executive’s termination and do not
exceed the lesser of two times Base Salary or two times the limit under Code Section 401(a)(17)
then in effect, and (c) the payment of medical expenses within the applicable
COBRA period, are exempt from the requirements of Code Section 409A.  As Executive is designated as a “specified
employee” within the meaning of Code Section 409A, to the extent that any
deferred compensation payments to be made during the first six month period
following Executive’s termination of employment exceed such exempt amounts, the
payments shall be withheld and the 
amount of the payments withheld will be paid in a lump sum, without
interest, during the seventh month after Executive’s termination.  The Company shall identify in writing
delivered to the Executive any payments it reasonably determines are subject to
delay under this Section 4.3.  In no
event shall the Company have any liability or obligation with respect to taxes
for which the Executive may become liable as a result of the application of
Code Section 409A.


 


4.4.                              No
Mitigation Required.  The
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company hereunder.  Except as set forth in Section 4.1(d) and
(f), the amount of any payment or benefit provided for in this Agreement shall
not be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company,  or
otherwise.


 


ARTICLE V

Parachute Tax Payments


 


5.1.                              Gross-Up for Parachute Payments.  If any payment or distribution by the Company
(or any of its affiliates) to or for the benefit of the Executive, whether paid
or payable or distributed or distributable under this Agreement or under any
other agreement, policy, plan, program or arrangement, or the lapse or
termination of any restriction under any agreement, policy, plan, program or
arrangement (a “Payment”), would be subject to the excise tax imposed by Section 4999
of the Code by reason of being considered “contingent on a change in ownership
or control” of the Company within the meaning of Section 280G of the Code,
or to any similar tax imposed by state or local law, or any interest or
penalties with respect to such tax 


 





















 


(such tax or taxes, together with any such interest and penalties,
being hereafter collectively referred to as the “Parachute Tax”), then Executive
will be entitled to receive an additional payment or payments (collectively, a “Gross-Up
Payment”).  The Gross-Up Payment will be
in an amount such that, after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any
Parachute Tax imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Parachute Tax imposed on the Payment.  The following provisions shall apply in
determining whether a Gross-Up Payment shall apply:


 


(a)                                  Notwithstanding
any other provision of this Section 5.1, if no Parachute Tax would apply
if the aggregate Payments were reduced by 10%, then the aggregate Payments
shall be reduced by the amount necessary to avoid application of the Parachute
Tax, and no Gross-Up Payment will be made. 
Such reduction shall apply to cash Payments in the order that such
Payment would otherwise be made soonest after the Date of Termination, to the
extent necessary to avoid application of the Parachute Tax.


 


(b)                                 Unless the
Company and the Executive otherwise agree in writing, any determination
required under this Article V shall be made in writing by nationally
recognized independent public accountants agreed to by the Company and
Executive (the “Accounting Firm”), whose determination shall be conclusive and
binding upon Executive and the Company for all purposes.  For purposes of making the calculations
required by this Article V, the Accounting Firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code.  The Company
and the Executive shall furnish to the Accounting Firm such information and
documents as the Accounting Firm may reasonably request in order to make a
determination hereunder. The Company shall bear all costs the Accounting Firm
may reasonably incur in connection with any calculations contemplated
hereunder.  The Accounting Firm shall be
required to provide its determination within 60 days after the date of the
Executive’s Date of Termination, and the Company shall be responsible for any
income tax, penalty or interest liability incurred as a result of delay by the
Accounting Firm.


 


(c)                                  If the
Accounting Firm determines that no Parachute Tax is payable by the Executive,
it will, at the same time as it makes such determination, furnish the Company
and the Executive a non-reliance opinion that the Executive has a reasonable
basis not to report any Parachute Tax on his federal, state or local income or
other tax return.  If the Accounting Firm
determines that a Parachute Tax will (or would, but for reduction in the
Payment) be payable by the Executive, it will, at the same time as it makes
such determination, furnish the Company and Executive the detailed basis for
such opinion.  The Company will make the
Gross-Up payment within five business days thereafter.


 


5.2.                              Adjustment
of Gross-Up Payment.  The
federal tax returns filed by the Executive (and any filing made by a
consolidated tax group which includes the Company) shall be prepared and filed
on a basis consistent with the determination of the Accounting Firm with
respect to the Parachute Tax payable by the Executive.  The Executive shall make proper payment of
the amount of any Parachute Tax based on the determination of the Accounting
Firm 


 





















 


under Section 5.1, and
at the request of the Company, provide to the Company true and correct copies
(with any amendments) of his federal income tax return as filed with the
Internal Revenue Service and such other documents reasonably requested by the
Company evidencing such payment, provided that any information unrelated to the
Parachute Tax may be deleted from the copies of the returns and documents
delivered to the Company.  If, after the
Company’s payment to the Executive of the Gross-Up Payment, the Accounting Firm
determines in good faith that the amount of the Gross-Up Payment should be
reduced or increased, or a determination is made by the Internal Revenue Service
that would make the prior Gross-Up Payment amount inaccurate, then, within ten
business days of such determination, the Executive shall pay to the Company the
amount of any such reduction, or the Company shall pay to the Executive the
amount of any such increase.  The
following provisions apply for purposes of this Section 5.2:


 


(a)                                  In no event
shall the Executive have any such refund obligation if it is determined by the
Company that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as
it may be amended from time to time.


 


(b)                                 If the
Executive has paid Parachute Tax to the Internal Revenue Service prior to any
redetermination by the Accounting Firm reducing the amount of Gross-up Payment
otherwise due, refund by the Executive shall be due only to the extent that a
refund of such amount is received by the Executive from the Internal Revenue
Service.


 


(c)                                  The Executive
shall provide the Company prompt notice of any claim by or other correspondence
from the Internal Revenue Service relating to the amount of Parachute Tax and
will provide the Company with a reasonable opportunity to contest any claim for
Parachute Tax.  The Executive will take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation
accepting legal representation with respect to such claim by an attorney
competent in respect of the subject matter and reasonably selected by the
Company; provided, however, that the Company will bear and pay directly all
costs and expenses (including interest and penalties) incurred in connection
with such contest and will indemnify and hold harmless the Executive, on an
after-tax basis, for and against any Parachute Tax or income tax, including
interest and penalties with respect thereto, imposed as a result of such
contest and any such payments.  If the
Company directs Executive to pay the tax claimed, or otherwise fails to contest
the claim as described above, the Company will immediately pay to Executive the
amount of the required deficiency payment, including any Parachute Tax or
income tax, and interest and penalties with respect thereto.  All reimbursements hereunder shall be made as
soon as possible after Executive incurs the expense and presents evidence of
such expense reasonably acceptable to the Company, but in no event later than
the end of the calendar year following the year in which the expense is
incurred.


 


(d)                                 Notwithstanding
anything to the contrary herein, the Executive’s rights under this Article V
shall survive the termination of his employment for any reason and the
termination or expiration of this Agreement for any reason.


 
















 


ARTICLE VI

Executive’s Restrictive Covenants


 


6.1.                              Cooperation.  The Executive shall reasonably cooperate with
and assist the Company and its counsel at any time and in any manner reasonably
required by the Company or its counsel (with due regard for the Executive’s
other commitments if he is not employed by the Company) in connection with any
litigation or other legal process affecting the Company of which the Executive
has knowledge as a result of his employment with the Company (other than any
litigation with respect to this Agreement). 
In the event of such requested cooperation, the Company shall reimburse
the Executive’s reasonable out of pocket expenses.


 


6.2.                              Return
of Company Property.  Upon
demand by the Company and/or upon termination of his employment with the
Company for any reason, the Executive shall promptly deliver to the Company all
property and materials, whether written, descriptive, or maintained in some
other form belonging to or relating to the Company or its business affairs,
including correspondence, manuals, notes, notebooks, reports, programs, plans,
proposals, financial documents, or any other documents concerning the Company’s
customers, suppliers, business plans, designs, marketing or other business
strategies, products or processes, but excluding materials distributed to
employees of the Company generally and relating to the Executive’s rights and
obligations as an employee or former employee of the Company.  The Executive shall also return any
automobile, computers and peripherals, cellular telephones, pagers and other
physical property or equipment provided by the Company to the Executive in
connection with his employment with the Company.


 


6.3.                              Non-Disparagement.  The Executive will not criticize, defame, be
derogatory toward or otherwise disparage the Company (or the Company’s past,
present and future officers, directors, stockholders, attorneys, agents,
representatives, employees or affiliates), or its or their business plans or
actions, to any third party, either orally or in writing; provided, however,
that this provision will not preclude the Executive from giving testimony in
response to a lawful subpoena or preclude any conduct protected under 18 U.S.C.
Section 1514A(a) or any similar state or federal law providing “whistleblower”
protection to the Executive.


 


6.4.                              Non-Competition.  In
consideration for the severance compensation and continued benefits provided in
Section 4.1(c), (d) and (f) above, and at the option of any
potential acquirer at the time of a Change in Control, the Executive agrees to
be subject to the Noncompetition Agreement attached hereto as Exhibit B
for a period of two years following a qualifying termination as described in Section 3.1
above.


 


ARTICLE VII

Miscellaneous


 


7.1.                              Litigation
Expenses.  In the
event of any litigation or other dispute between the Company and the Executive
with respect to the subject matter of this Agreement, the Executive shall be
entitled to recover his attorney fees and expenses, unless the Executive does
not substantially prevail in such matter.


 





















 


7.2.                              Entire
Understanding.  This
Agreement contains the entire understanding between the Company and the
Executive with respect to the subject matter hereof and supersedes any prior
severance or change in control agreement and amendment thereto between the
Company and the Executive; except that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to the Executive of a
kind elsewhere provided and not expressly provided in this Agreement.


 


7.3.                              Severability.  If, for any reason, any one or more of the
provisions or part of a provision contained in this Agreement shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of
a provision of this Agreement not held so invalid, illegal or unenforceable,
and each other provision or part of a provision shall, to the full extent
consistent with law, continue in full force and effect.  If this Agreement is held invalid or cannot
be enforced, then to the full extent permitted by law, any prior agreement
between the Company and the Executive shall be deemed reinstated as if this
Agreement had not been executed.


 


7.4.                              Notices.  All notices, requests, demands and other
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage
prepaid, first class as follows:


 


To the Company:


 


Stanley, Inc.


3101 Wilson Boulevard


Arlington, VA  22201


Attention:  General Counsel


 


To the Executive:


 


The Executive’s address
on file with the Company


 


or to
such other address as either party shall have previously specified in writing
to the other.


 


7.5.                              No
Attachment.  Except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation or to execution, attachment,
levy, or similar process or assignment by operation of law, or any attempt,
voluntary or involuntary, to effect any such action shall be null, void and of
no effect.


 


7.6.                              Binding
Agreement.  This
Agreement shall be binding upon, and shall inure to the benefit of, the
Executive and the Company and their respective permitted successors and
assigns.


 


7.7.                              Modification
and Waiver.  This
Agreement may be modified or amended only by an instrument in writing signed by
each of the parties.  Except as otherwise
provided in Section 2.11, no term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except 


 





















 


by written instrument signed
by the party charged with such waiver or estoppel.  No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and any waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.


 


7.8.                              Headings.  The headings contained in this Agreement are
included solely for convenience and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.


 


7.9.                              Governing
Law.  This Agreement and its
validity, interpretation, performance, and enforcement shall be governed by the
laws of the Commonwealth of Virginia, without regard to the choice of law
provisions thereof.


 


IN
WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its officers thereunto
duly authorized, and the Executive has signed this Agreement, all as of the
date first above written.


 


	
   

  	
  STANLEY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                /s/
  Scott D. Chaplin

  
	
   

  	
  By:

  	
  Scott D. Chaplin

  
	
   

  	
  Its:

  	
  General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                /s/
  George H. Wilson

  
	
   

  	
  George H. Wilson

  



 

















 


EXHIBIT A


 


Date


 


Re: Separation and
Release Agreement


 


Dear :


 


This letter sets forth
certain terms and conditions relative to your separation from your employment
with Stanley, Inc., including its subsidiaries and affiliated companies,
and their respective current and former directors, officers, employees, agents
and assigns (“STANLEY” or the “Company”).


 


Your resignation from
STANLEY’s employ will be effective
                
    ,
        .  After you execute and return this Agreement
to the Company, which you acknowledge may not be executed prior to your last
day of actual work, the Company will provide you with severance payments and
benefits to the extent provided by that certain Change in Control Severance
Agreement between you and the Company dated as of June 26, 2008.


 


In exchange for the
Company providing you with the aforementioned severance payments and benefits,
you hereby waive all claims against the Company and unconditionally and irrevocably
release and discharge the Company from liability for any claims or damages that
you have or may have against it, its current and former directors, officers,
employees, agents and assigns up to the moment this Agreement becomes fully
executed, regardless of whether those claims are known or unknown including,
but not limited to, any claims for wages, severance (except as specifically
provided for herein), bonuses or benefits (except as specifically provided for
herein), or any other claims whatsoever arising during or, in whole or in part,
out of your employment relationship with the Company, or violations of any
federal, state or local fair employment statute, executive order, ordinance,
law or regulation, including Title VII of the Civil Rights Act, the
Rehabilitation Act of 1973, the Americans With Disabilities Act, the Age
Discrimination in Employment Act, as amended by the Older Workers’ Benefit
Protection Act, the Employee Retirement Income Security Act of 1974, as
amended, or any other potentially applicable employment or labor law, or any
other rule of law or common law including, but not limited to those
concerning possible torts, express or implied contract, the implied covenant of
good faith and fair dealing, public policy, or other obligations. Other than
with respect to any rights which cannot be waived by law, including but not
limited to the right to file certain charges with, or participate in, an
investigation conducted by any governmental agency that expressly prohibits
waiver relative to same, you also agree not to initiate any administrative or
legal action against the Company to assert such claims.  Moreover, to the extent any such action is
brought by you or on your behalf by any third party, you agree to waive all
claims to monetary relief or damages of any kind, including attorneys’ fees and
costs. You understand that the fact of this agreement and/or the agreement to
pay or the payment of the consideration described herein does not constitute an
admission by the Company that it has violated any such law or legal obligation.


 


You acknowledge that you
may take up to [21/45] days to consider the terms of this Agreement.  You also acknowledge that you were advised by
STANLEY to discuss the terms of this Agreement with your attorneys prior to
signing this Agreement.  You further
acknowledge that 


 

















 


you are entering into
this Agreement, freely, knowingly, and voluntarily, with a full understanding
of its terms and that you will have seven days to revoke this Agreement after
executing the same by notifying the undersigned in writing during this
seven-day period.  Except as set forth
herein, this constitutes the entire agreement between us regarding the subject
matter hereof.  This Agreement may not be
changed or altered, except by a writing signed by you and the Company.  This Agreement is entered into in the
Commonwealth of Virginia and the laws of the Commonwealth of Virginia will
apply to any dispute concerning it, without regard to its conflicts of law
provisions.  If any clause of this
Agreement should ever be determined to be unenforceable, it is agreed that this
will not affect the enforceability of any other clause or the remainder of this
Agreement.


 


Sincerely,


 


 


	
  STANLEY, INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  
	
  AGREED AND ACCEPTED:

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
						



 


 


On this
           day of
                  ,
20     before me personally came                                 ,
to me known to be the individual described in and who executed the foregoing
Change in Control Severance Agreement, and duly acknowledged to me that he
executed the same.


 


 


Notary Public


 

















 


EXHIBIT B


 


FORM OF
NONCOMPETITION AGREEMENT


 


THIS
NONCOMPETITION AGREEMENT (this “Agreement”) is dated as of
                    ,
20    , by and between Stanley, Inc., a Delaware corporation
(the “Company”), and
                                
(the “Executive”). Capitalized terms used herein but not otherwise defined
herein shall have the meaning ascribed to them in the Change in Control
Agreement (as defined below).


 


WHEREAS, the Company and the Executive have
entered into a Change in Control Severance Agreement, effective as of June 26,
2008 (the “Change in Control Agreement”); and


 


WHEREAS, the Company and the Executive agree
that, in connection with the execution of the Change in Control Agreement and
the Executive’s continued employment, the Executive will not engage in
competition with the Company pursuant to the terms and conditions hereof;


 


NOW,
THEREFORE, in
furtherance of the foregoing and in exchange for good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties hereto
hereby agree as follows:


 


1.   Noncompetition.  (a) If
the Executive incurs a qualifying termination as described in Section 3.1
of the Change in Control Agreement, for two years following the qualifying
termination, the Executive shall be prohibited from engaging in Competition (as
defined below) with the Company or any of its subsidiaries.


 


(b)  The term “Competition”
for purposes of this Agreement shall mean the Executive agrees that for the
period described in section 1(a) above, Executive will not, directly or
indirectly, privately or as an employee, partner, officer, director,
stockholder or agent in any capacity of any other entity: (i) render any
services on the specific contracts, task orders, or other business arrangements
that Executive is or was involved in for the Company, or acquired knowledge
through access to confidential information of the Company, e.g., pricing,
pricing strategies, business pursuits, strategic objectives, and the like, on
behalf of any other person or entity; (ii) actively solicit, divert or
take away, or attempt to divert or to take away, the business of any of the
clients, customers or accounts, or prospective clients with identified active
new business targets, customers or accounts, of the Company or any Company
affiliate in which Executive is or was involved or acquired knowledge through
access to such confidential information; or (iii) directly or indirectly
recruit, train, supervise, or assist others to engage in any activities
described in this paragraph.


 


2.  Specific Performance; Waiver of Jury Trial. 
The Executive acknowledges that in the event of breach by the Executive
of the terms of Section 1 hereof, the Company’s remedies at law may be
inadequate and the Company shall be entitled to institute legal proceedings to
enforce the specific performance of this Agreement by the Executive and to
enjoin the Executive from any further violation of Section 1 hereof and to
exercise such remedies cumulatively or in conjunction with all other rights and
remedies provided by law and not otherwise limited by this Agreement.  The Executive and the Company agree to waive
their rights to a jury trial for any 


 

















 


claim or cause of action
based upon or arising out of this Agreement or any dealings between them
relating to the subject matter of this Agreement.


 


3.  Attorneys Fees. 
If any legal action, arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach or
default in connection with any of the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and
other costs incurred in that action or proceeding, including any appeal of such
action or proceeding, in addition to any other relief to which that party may
be entitled.


 


4.   Survival. 
This Agreement shall survive the termination of Executive’s employment
and the assignment of this Agreement by the Company to any successor to their
respective business.


 


5.   Severability. 
Any provision of this Agreement which is deemed invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction and subject to
this paragraph, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that any other provisions of this Agreement
invalid, illegal or unenforceable in any other jurisdiction. If any covenant should
be deemed invalid, illegal or unenforceable because its scope is considered
excessive, such covenant shall be modified so that the scope of the covenant is
reduced only to the minimum extent necessary to render the modified covenant
valid, legal and enforceable.


 


6.  Governing Law and Venue. 
This Agreement shall be governed, construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Virginia, without regard to the
conflict of laws principles thereof. 
Executive expressly consents to personal jurisdiction and venue in the
state and federal courts for the county in which the Company’s principal place
of business is located for any lawsuit filed there against Executive by the
Company arising from or related to this Agreement.


 


7.  Entire Agreement. 
This Agreement contains the entire agreement and understanding between
the Company and the Executive with respect to the subject matter hereof, and
supersedes all prior agreements and understandings with respect to the subject
matter hereof, and the parties hereto have made no representations, promises,
agreements or understandings, written or oral, relating to the subject matter
of this Agreement which are not set forth herein. This Agreement shall not be
changed unless in writing and signed by both the Executive and the Company.


 


8.  Assignment. 
This Agreement may not be assigned by the Executive, but may be assigned
by the Company to any successor to their respective business and will inure to
the benefit of and be binding upon any such successor.


 


9.  Notice.   Each party
hereto must deliver all notices or other communications required or permitted
under this Agreement in writing to the other parties in accordance with the
notice provisions set forth in Section 7.4 of the Change in Control
Agreement.


 


10.  Waiver.  Any waiver or
failure to enforce any provision of this Agreement on one occasion will not be
deemed a waiver of that provision or any other provision on any other occasion.


 

















 


11.   Counterparts. 
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.


 


12.   The Executive’s Acknowledgment. 
The Executive acknowledges (a) that he has had the opportunity to consult
with independent counsel of his own choice concerning this Agreement, and (b) that
he has read and understands the Agreement, is fully aware of its legal effect,
has not acted in reliance upon any representations or promises made by the
Company other than those contained in writing herein, and has entered into it
freely based on his own judgment.


 


 


IN
WITNESS WHEREOF,
the parties have executed this Agreement as of the date and year first above
written.


 


 


	
   

  	
  STANLEY,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
      Name:

  
	
   

  	
   

  	
      Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE