**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 prorated annual base salary (“Salary ContinuationPayments”).          (b) In addition to the Salary Continuation Payments, the Company shall pay to Employee theamount equal to $13,145.00 representing all amounts due for the vested and prorated unvested sharesof Stock Appreciation Rights (“SAR”) under the Company’s SAR Plan.          (c) If Employee signs and does not revoke this Agreement, then, subject to the followingparagraph and Paragraph 2(g) below, Alion shall make the following payments (“Severance InstallmentPayments”) to Employee: (i) The amount of $160,000.000 representing the amount equal to hislast paid annual bonus (the “Bonus Amount”), payable on or before December 15,2008;  (ii) The amount of $1,883,991.00, representing an additional amountof severance (“Severance Payments”), payable as follows: (aa) $500,000.00 by the end of each of the calendarquarters commencing on March 14, 2009 until the amount of $1,500,000.00has been paid; and  (bb) $383,991.00 by December 31, 2009. (iii) all outstanding and accrued Paid Time Off (“PTO”) payablewithin thirty (30) days after the Notification Date.          (d) Notwithstanding the foregoing, the Company’s obligation to pay the Salary ContinuationPayments, Bonus Amount and/or Severance Payments, to the extent not already paid, shall ceaseimmediately and such payments will be forfeited if Employee violates any condition set forth inParagraph 5, 6 7 or 8.          (e) 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.          (f) Except as provided in this Agreement or under the terms of an applicable employee benefitplan, no further payments shall be made to Employee.          (g) The Company shall withhold such tax, payroll and other amounts from payments under thisAgreement as Employee authorizes or the Company reasonably believes to
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be required by law. Employee shall be solely responsible for payment of his own taxes,including any taxes arising under Internal Revenue Code Section 409A. The Company has not providedand will not provide tax advice to 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 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. Any such COBRA premium payment by the Company thatconstitutes taxable income to Employee shall be grossed up by the Company, assuming an applicableincome tax rate of forty percent (40%). Payments under this paragraph shall cease at the earlierof (i) the end of the first month in which Employee is no longer eligible for COBRA for any reason(other than death or eligibility for Medicare, provided that COBRA coverage continues for anyqualified beneficiary), or (ii) Eighteen (18) months after the Notification Date. Employee shallnotify the Company as soon as practicable after he ceases to be eligible for COBRA coverage due tocoverage 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 AND FORFEITURE 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
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wrongful discharge (including, without limitation, any claim for violation of publicpolicy or constructive discharge), any personal gain with respect to any claim arising underthe *qui tam*provisions of the False Claims Act, 31 U.S.C. 3730 or any other whistleblowerclaim, all claims for infliction of emotional distress, all claims for slander, libel, ordefamation of character, and all claims for reinstatement, back pay, front pay, compensatoryor punitive damages, severance pay, attorneys’ fees, or costs, as related to Employee’semployment by Alion, or the terms and conditions or termination of his employment, benefitsor compensation, or termination of such employment; and          (iii) Without limitation, any and all claims known or unknown based upon any allegationof employment discrimination, including, without limitation, discrimination on the basis ofrace, color, sex, sexual orientation, age (including any claim pursuant to the federal AgeDiscrimination in Employment Act), religion, disability, national origin or any otherclassification protected under applicable law; and          (iv) Without limitation, any and all claims known or unknown based upon, arising out ofor in any way relating to the phantom stock grant agreements by and between Employee andCompany (collectively the “Phantom Stock Agreements”).          (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 filing alawsuit 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) day period.For a period of seven (7) days from the date of the execution of this Agreement, Employeeshall retain the right to revoke this Agreement in accordance with 29 U.S.C. § 626 bywritten notice to Alion, c/o Kathy Madaleno, Director of Human Resources, 1750 TysonsBoulevard, Suite 1300, McLean, Virginia 22102. This Agreement shall not become effective orenforceable 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
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          (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 Agreement has been individually negotiatedby Employee and is not part of a group exit incentive or other group employment terminationprogram.          (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.          (f) Employee hereby expressly waives, disclaims and forfeits all amounts payable to him at anytime (whether currently owed to him or not) pursuant to the terms of the Phantom Stock Agreements.     **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, cellular phones, personal digital assistances orsimilar devices, fax machines and other equipment (except as otherwise agreed, but includingelectronic information and/or software on Alion-provided computer equipment to
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be retained by Employee) and associated passwords, property passes, keys, credit cards,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 with regard to any product orservice 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 shall providesuch 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 year after theNotification 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.          (b) Non-Solicitation of Clients and Others. In addition to the foregoing, Employeeagrees that, for a period of one year after the Separation Date, he will not, directly orindirectly, intentionally entice, induce or solicit, or attempt to entice, induce or solicit, anyindividual or entity having a current or prospective business relationship with the Company,whether as a consultant, client, customer or otherwise, to terminate or cease such relationshipwith the Company, or to fail to enter into or renew such relationship with the Company.
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          (c) Non-Solicitation of Employees and Others. In addition to the foregoing, Employeeagrees that, for a one year after the Separation Date, Employee shall not, on his own behalf or onbehalf 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, orthrough a third party solicit; or (iii) in any manner attempt to influence or induce any employeeof the Company or its subsidiaries or affiliates to leave the employment of the Company or itssubsidiaries or affiliates, nor shall he use or disclose to any person, partnership, association,corporation, or other entity any information obtained concerning the names and addresses theCompany’s employees. Employee further agrees and acknowledges that the Company has confidentialityand non-competition agreements with certain of its employees, and he agrees that he will notinterfere with any such agreements.          (d) Survival; Severability. The parties agree that the above restrictions oncompetition are completely severable and independent agreements supported by good and valuableconsideration and, as such, shall survive the termination of this Agreement for whatever reason.The parties further agree that any invalidity or unenforceability of any one or more of suchrestrictions on competition shall not render invalid or unenforceable any remaining restrictions oncompetition. Additionally, should a court of competent jurisdiction determine that the scope of anyprovision of this Paragraph 8 is too broad to be enforced as written, the parties intend that thecourt reform the provision to such narrower scope as it determines to be reasonable andenforceable. Employee acknowledges and agrees that the non-competition and non-solicitationprovisions herein are expressly 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 thisAgreement shall be valid and enforceable to the fullest extent permitted by law; provided, however,that the parties expressly acknowledge and agree that the full waiver and release of all claims byEmployee is essential to effectuate the parties’ intent in entering into this Agreement and that,in the event the general release of claims set forth in Paragraph 4 is severed, the parties’remaining obligations under this Agreement shall be deemed waived (other than obligations arisingunder Paragraphs 5 and 8), and any consideration or value delivered by one party to the other underthis Agreement shall constitute a binding obligation by the recipient to the other.     **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
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any subsequent 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 intended to, or shall, place any limitation or condition precedent onEmployee’s ability to challenge this Agreement.     **16. ****CONFIDENTIALITY**          Employee agrees to keep confidential the existence of this Agreement, as well as all of itsterms and conditions, and not to disclose to any person or entity the existence, terms orconditions of this Agreement, except to his attorney, financial advisors and members of hisimmediate family, provided they agree to keep confidential such existence, terms and conditions.In the event that Employee believes he is compelled by law to divulge the existence, terms orconditions of this Agreement, he will notify Alion’s Law Department of the basis for that beliefbefore actually divulging the information. Employee hereby confirms that, as of the date of this
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Agreement, he has not disclosed the existence, terms or conditions of this Agreement, exceptas otherwise provided in this Agreement. Alion also agrees to keep confidential the existence ofthis Agreement and not to disclose its terms and conditions outside of Releasees, its attorneys andconsultants, unless Alion is otherwise required to disclose such terms and conditions by operationof law or request by a governmental agency, or as required by any federal or state securities lawsor regulations.          **IN WITNESS WHEREOF**, the parties hereby agree to the terms and conditions of this Agreement asset forth above.**EMPLOYEE:**       By: /s/ Leroy R. Goff, III   Date: October 23, 2008   Leroy R. Goff, III           **ALION SCIENCE AND TECHNOLOGY CORPORATION:**           By: /s/ Katherine Madaleno   Date: October 23, 2008   Katherine Madaleno      Senior VP    
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