Exhibit
10.26


 


STANLEY EXECUTIVE
SAVINGS PLAN


 


Stanley, Inc. (the “Company”) hereby establishes the Stanley
Executive Savings Plan (the “Plan”), effective May 6,
2009 (the “Effective Date”) for the purpose of
attracting high quality executives and promoting in them increased efficiency
and an interest in the successful operation of the Company.  The Plan is intended to, and shall be
interpreted to, comply in all respects with Code Section 409A and those
provisions of ERISA applicable to an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of management or highly compensated
employees.


 


ARTICLE I


DEFINITIONS


 


1.1           “Account” or “Accounts”
shall mean the Deferral Accounts and the Company Contribution Accounts established
under this Plan pursuant to Article IV.


 


1.2           “Administrative Committee” shall mean the Fiduciary Committee
appointed pursuant to the Stanley, Inc. Employee Benefits Administration
Charter to administer the Plan, as described herein.


 


1.3           “Affiliate” means any entity that is a member of a “controlled
group” of corporations with the Company under Code Section 414(b) or
a trade or business under common control with the Company under Code Section 414(c);
provided, however, that solely for purposes of determining whether a
Termination of Service has occurred, in applying Code Sections 1563(a)(1), (2) and
(3) for purposes of Code Section 414(b), the language “at least 50
percent” will be used instead of “at least 80 percent” each place it appears,
and in applying Treasury Regulation Section 1.414(c)-2 for purposes of
Code Section 414(c), the language “at least 50 percent” will be used
instead of “at least 80 percent” each place it appears.  In addition, to the extent that the
Administrative Committee determines that legitimate business criteria exist to
use a reduced ownership percentage to determine whether an entity is an
Affiliate for purposes of determining whether a Termination of Service has
occurred, the Administrative Committee may designate an entity that would meet
the definition of “Affiliate” substituting 20 percent in place of 50 percent in
the preceding sentence as an Affiliate. 
Such designation shall be made by April 1, 2009 or, if later, at
the time a 20 percent or more ownership interest in such entity is acquired.


 


1.4           “Base Salary” shall mean a
Participant’s annual base salary, excluding incentive and discretionary
bonuses, commissions, reimbursements and other non-regular remuneration,
received from the Company prior to reduction for any salary deferrals under
benefit plans sponsored by the Company, including but not limited to, plans
established pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).


 


1.5           “Beneficiary” or “Beneficiaries”
shall mean the person, persons or entity designated as such pursuant to Section 7.1.


 


1.6           “Board” shall mean the Board of
Directors of Company.


 

















 


1.7           “Bonus(es)” shall mean amounts
paid to the Participant by the Company annually in the form of discretionary or
incentive compensation or any other bonus designated by the Administrative
Committee before reductions for contributions to or deferrals under any
pension, deferred compensation or benefit plans sponsored by the Company.


 


1.8           “Change in Control” shall have the same meaning as a “Change
of Control” under the Stanley, Inc. 2006 Omnibus Incentive Compensation
Plan, or any successor thereto.


 


1.9           “Code” shall mean the Internal
Revenue Code of 1986, as amended, as interpreted by Treasury regulations and
applicable authorities promulgated thereunder.


 


1.10         “Commissions” shall mean commissions payable to the
Participant for the applicable Plan Year (as determined by the Administrative
Committee) before reductions for contributions to or deferrals under any
pension, deferred compensation or benefit plans sponsored by the Company.


 


1.11         “Company Contributions”
shall mean the contributions made by the Company pursuant to Section 3.2.


 


1.12         “Company Contribution Account”
shall mean the Account maintained for the benefit of the Participant which is credited
with Company Contributions, if any, pursuant to Section 4.2.


 


1.13         “Compensation” shall mean all
amounts eligible for deferral for a particular Plan Year under Section 3.1(a).


 


1.14         “Compensation Committee”
shall mean the Compensation Committee of the Board.


 


1.15         “Crediting Rate”
shall mean the notional gains and losses credited on the Participant’s Account
balance which are based on the Participant’s choice among the investment
alternatives made available by the Administrative Committee pursuant to Section 3.3
of the Plan.


 


1.16         “Deferral Account” shall mean the
Account maintained for each Participant which is credited with Participant
deferrals pursuant to Section 4.1.


 


1.17         “Director” shall mean a member of the Board.


 


1.18         “Disability” shall mean that the
Participant (a) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (b) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Company.  The Administrative Committee
may require that the Participant submit evidence of 


 


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such qualification for disability benefits in order to determine that
the Participant is disabled under this Plan.


 


1.19         “Eligible Executive” shall mean a
highly compensated or management level employee  of
the Company selected by the Compensation Committee to be eligible to
participate in the Plan.  Unless
otherwise determined by the Compensation Committee, an Eligible Executive shall
include those executives with a title of Vice President or above.


 


1.20         “ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended, including Department of
Labor and Treasury regulations and applicable authorities promulgated
thereunder.


 


1.21         “Financial Hardship” shall mean a
severe financial hardship to the Participant resulting from an illness or
accident of the Participant, the Participant’s spouse, or a dependent (as
defined in Code Section 152(a)) of the Participant, loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant (but shall in all events correspond to the meaning of the term “unforseeable emergency”
under Code Section 409A(a)(2)(v)). 
In addition, the need to pay for medical expenses, including
non-refundable deductibles, as well as for the costs of prescription drug
medication, or the need to pay for the funeral expenses of a spouse or a
dependent may also constitute a Financial Hardship.


 


1.22         “Fund” or “Funds” shall
mean one or more of the investment funds selected by the Administrative
Committee pursuant to Section 3.3 of the Plan.


 


1.23         “Hardship Distribution”
shall mean a distribution of benefits or a reduction or cessation of current
deferrals  pursuant to Section 6.5  to a Participant who has suffered a Financial Hardship.


 


1.24         “Initial Election Period” shall
mean the period established by the Administrative Committee for submission of
the Participant Election Forms prior to commencement of participation in the
Plan pursuant to Article II.


 


1.25         “Participant” shall mean any
Eligible Executive who becomes a Participant in this Plan in accordance with Article II.


 


1.26         “Participant Election Forms”
shall mean the election forms established by the Administrative Committee by
which a Participant makes elections with respect to (1) voluntary
deferrals of his/her Compensation, (2) the investment Funds which shall
act as the basis for crediting of investment gain or loss on Account balances,
and (3) the form and timing of distributions from Accounts.  The Participant Election Forms may take the
form of an electronic communication followed by appropriate written
confirmation according to specifications established by the Administrative
Committee.


 


1.27         “Payment Date” shall mean the
date by which a lump sum payment shall be made or the date by which installment
payments shall commence.  The Payment
Date shall be the date that is thirty (30) days following the date of the
occurrence of an event upon which a 


 


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distribution from the Plan is triggered.  In the case of a Scheduled Distribution, the
Payment Date shall be a date during the month for which the Participant has
elected to receive such Scheduled Distribution.


 


1.28         “Plan Year” shall mean the
calendar year except that the first Plan Year shall begin on the Effective Date
and end on the last day of the calendar year in which the Effective Date
occurs.


 


1.29         “Restricted Stock Units” shall mean amounts payable to a
Participant from the Stanley Associates, Inc. Executive Deferred Compensation
and Equity Incentive Plan, the Stanley Inc. 2006 Omnibus Incentive Compensation
Plan or any other applicable Company plan.


 


1.30         “Retirement” shall mean Termination of Service after (a) having
attained age sixty-five (65) or (b) at fifty-five (55) and above with at
least five (5) Years of Service.


 


1.31         “Scheduled Distribution” shall
mean a scheduled distribution date elected by the Participant for distribution
of amounts from a specified Deferral Account, including notional earnings
thereon, as provided under Section 6.4.


 


1.32         “Specified Employee” means a “key employee” as defined for
purposes of Code Section 416(i), without regard to paragraph (5) thereof,
of the Company or any Affiliate, subject to the following modifications.  An employee is a Specified Employee if, as of
the date of determination, he or she is (a) one of the 50 (or, if less,
the greater of three or 10% of all employees) highest-paid officers of the
Company or any Affiliate having annual compensation greater than $135,000 (as adjusted
under Code Section 415(d)); (b) a 5% owner of the Company or any
Affiliate; or (c) a 1% owner of the Company or any Affiliate having annual
compensation of more than $150,000.  If
an individual is a Specified Employee at any time during the twelve month
period ending on December 31 of a Plan Year, he or she shall be treated as
a Specified Employee for the 12-month period beginning on April 1 of the
Plan Year following such December 31. 
For purposes of this Section 1.32, the term “compensation” will be
defined in accordance with Treasury Regulation Section 1.415(c)-2(d)(2);
provided, however, that compensation paid to or on behalf of an individual who
is not a Participant and who is a non-resident alien of the U.S. will not be
taken into account hereunder to the extent that the compensation is not
includable in gross income under the Code and is not effectively connected to
the conduct of a trade or business within the U.S.  Whether an individual is a Specified Employee
will be determined in accordance with the requirements of Code Section 409A.


 


1.33         “Termination of Service” means
the severing of employment with the Company and any Affiliates, voluntarily or
involuntarily, for any reason.  A
Termination of Service will be deemed to have occurred if the facts and
circumstances indicate that the Company and the Participant reasonably
anticipate that no further services will be performed after a certain date or
that the level of bona fide services the Participant will perform for the
Company and its Affiliates after such date (whether as an employee or as an
independent contractor) will permanently decrease to no more than 30% of the
average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the employer if the Participant has been providing
services to the Company and its Affiliates less than 36 months).  A Participant will not be deemed to have 


 


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incurred a Termination of Service while he or she is on military leave,
sick leave, or other bona fide leave of absence (such as temporary employment
by the government) if the period of such leave does not exceed six months or
such longer period as the Participant’s right to reemployment with the Company
is provided either by statute or by contract. 
For this purpose, a leave of absence is bona fide only if there is a
reasonable expectation that the Participant will return to employment at the
conclusion of the leave.  If the period
of leave exceeds six months and the Participant’s right to reemployment is not
provided either by statute or by contract, the Termination of Service will be
deemed to occur on the first date immediately following such six-month period.
Whether an individual has incurred a Termination of Service shall be determined
in accordance with the provisions of Section 409A.


 


1.34         “Years of Service” shall mean the
cumulative consecutive years of service the Participant has provided services
to the Company or any Affiliate.  A
Participant shall be providing services for purposes of accumulating Years of
Service at all times prior to Termination of Service.  Years of Service shall include service prior
to the Effective Date.


 


ARTICLE II


PARTICIPATION


 


2.1           Commencement of
Participation.  An Eligible Executive shall become a
Participant in the Plan by submitting the Participant Election Forms, including
such other documentation and information as the Administrative Committee may
reasonably request, to the Administrative Committee during the Initial Election
Period established by the Administrative Committee prior to the beginning of
the first Plan Year in which the Eligible Executive shall be eligible to
participate in the Plan.  The Administrative
Committee may establish a special Initial Election Period for Eligible
Executives entering the Plan during a Plan Year (if the Eligible Executive is
not already a participant in another plan which is aggregated with this Plan
under Code Section 409A) to allow deferrals, within the first thirty (30)
days of initial eligibility, of Compensation earned for services performed
during the balance of such Plan Year after such election is made.


 


2.2           Cessation of Participation.  An Eligible
Executive shall cease to be a Participant in the Plan if (a) he or she
incurs a Termination of Service for any reason, (b) the Plan is otherwise
amended so that the Eligible Executive ceases to be eligible for participation,
or (c) the Plan is terminated; provided, however, that such individual
shall continue to be a Participant solely with respect to his or her vested
Account balance until such Account balance is distributed from the Plan.  Such cessation of participation shall be
effective upon the date of the change in status described in clause (a) above,
as of the last day of a designated deferral period, in the case of an amendment
described in (b) above, or upon the effective date of termination of the
Plan described in clause (c) above. 
If an Executive ceases (or has ceased) to be a Participant in the Plan
but continues in the employ of the Company or any Affiliate, he or she may
continue to earn Years of Service for purposes of determining the vested
Account balance.


 


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ARTICLE III


CONTRIBUTIONS &
DEFERRAL ELECTIONS


 


3.1           Elections to Defer
Compensation.


 


(a)                                  Form of Elections. 
A Participant may only elect to defer Compensation attributable to
services provided after the time an election is made.  Elections shall take the form of a whole
percentage (less applicable payroll withholding requirements for Social
Security and income taxes and employee benefit plans as determined in the sole
and absolute discretion of the Administrative Committee) of up to:


 


(i)                                     80 % of Base Salary;


 


(ii)                                  100% of Commissions;


 


(iii)                               100% of Bonuses; and


 


(iv)                              100% of Restricted Stock Units.


 


Notwithstanding
the foregoing, the Administrative Committee may further limit the maximum or
the minimum amount of deferrals during any Plan Year, by any Participant or
group of Participants, in its sole discretion. 
The minimum deferral that an active Participant may make during any Plan
Year is $5,000.


 


(b)                                 Timing and Duration of Compensation
Deferral Election.  An Eligible Executive’s initial election to
defer Compensation shall be made during the Initial Election Period established
by the Administrative Committee prior to the effective date of the Participant’s
commencement of participation in the Plan and shall apply only to Compensation
for services performed after such deferral election is processed.  A Participant may increase, decrease,
terminate or recommence a deferral election with respect to Compensation for
any subsequent Plan Year by filing a Participant Election Form during the
enrollment period established by the Administrative Committee prior to the
beginning of such Plan Year, which election shall be effective on the first day
of the next following Plan Year.  In the
absence of an affirmative election by the Participant to the contrary, the
deferral election for the prior Plan Year (including the election of any
distribution options) shall not continue in effect for future Plan Years.  After the beginning of the Plan Year,
deferral elections with respect to Compensation for services performed during
such Plan Year shall be irrevocable.


 


(c)                                  Special Rule for Performance Based
Compensation.  To the extent permitted by the Administrative
Committee, an election to defer Compensation meeting the requirements for “performance-based”
compensation under Treasury Regulation Section 1.409A-1(e) may be
filed with the Administrative Committee as of a date established by the
Administrative Committee which is at least six months prior to the end of the
performance period in which such Compensation is earned, provided that (a) performance
criteria have been established in writing by not later than 90 days after the
commencement of the applicable performance period and the outcome is
substantially uncertain at the time the criteria are established, (b) the
Participant is in employment with the Company continuously from the later of
the beginning of the performance period or the date such performance criteria
are 


 


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set, and (c) the election is made before such performance-based
compensation has become readily ascertainable (i.e.,
is both calculable in amount and substantially certain to be paid).


 


3.2           Company Contributions.  The Company
shall have the discretion to make Company Contributions to the Plan at any time
on behalf of any Participant.  Company
Contributions shall be made in the complete and sole discretion of the
Compensation Committee and no Participant shall have the right to receive any
Company Contribution in any particular Plan Year regardless of whether Company
Contributions are made on behalf of other Participants.


 


3.3           Investment Elections.


 


(a)                                  Participant Direction. At the time of entering the Plan and/or
of making the deferral election under the Plan, the Participant shall
designate, on a Participant Election Form provided by the Administrative
Committee, the investment Funds in which the Participant’s Account or Accounts
shall be deemed to be invested for purposes of determining the amount of
earnings and losses to be credited to each Account.  The Participant may specify that all or any
percentage of his or her Account or Accounts shall be deemed to be invested, in
whole percentage increments, in one or more of the types of investment Funds
selected as alternative investments under the Plan from time to time by the
Administrative Committee pursuant to subsection (b) of this Section 3.3.  A Participant may change the designation made
under this Section at least monthly by filing a revised election on a
Participant Election Form provided by the Administrative Committee.  During payout, the Participant’s Account
shall continue to be credited at the Crediting Rate selected by the Participant
from among the investment alternatives or rates made available by the
Administrative Committee for such purpose until all amounts have been
distributed from the Account.  If a
Participant fails to make an investment election under this Section 3.3,
the Participant shall be deemed to have elected the Money Market type of
investment Fund selected by the Administrative Committee for such purpose.


 


(b)                                 Investment Alternatives. The Administrative Committee shall
select from time to time, in its sole and absolute discretion, investment Funds
and shall communicate each of the alternative types of investment Funds to the
Participant pursuant to subsection (a) of this Section 3.3.  The Crediting Rate of each such investment
fund shall be used to determine the amount of earnings or losses to be credited
to Participant’s Account under Article IV. 
The Participant’s choice among investments shall be solely for purposes
of calculation of the Crediting Rate on his or her Accounts.  The Company shall have no obligation to set
aside or invest amounts as directed by the Participant and, if the Company
elects to invest amounts as directed by the Participant, the Participant shall
have no more right to such investments than any other unsecured general
creditor.


 


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3.4           Distribution Elections.


 


(a)                                  Initial Election. 
At the time of making a deferral election under the Plan, the
Participant shall designate the time and form of distribution of deferrals made
pursuant to such election (together with any earnings credited thereon) from
among the alternatives specified in Article VI.  An election to receive a deferral in a
Scheduled Distribution must specify a distribution date that is no less than
two years after the end of the Plan Year during which the deferral was
made.  If no distribution election is
made for a Plan Year, the Participant shall be deemed to have elected to
receive such deferrals at his or her Retirement.


 


(b)                                 Modification of Election. 
A new distribution election may be made at the time of subsequent
deferral elections with respect to deferrals in Plan Years beginning after the
Initial Election Period.  However, a
distribution election with respect to previously deferred amounts may only be
changed under the terms and conditions specified in Code Section 409A.  Except as expressly provided in Article VI
of the Plan, no acceleration of a distribution is permitted.  A subsequent election that delays payment or
changes the form of payment is permitted if and only if all of the following
requirements are met:


 


(i)                                   the new election does not take effect
until at least twelve (12) months after the date on which the new election is
made;


 


(ii)                                in the case of payments made on account
of Termination of Service (other than by reason of death or Disability) or a
Scheduled Distribution, the new election delays payment for at least five (5) years
from the date that payment would otherwise have been made, absent the new
election; and


 


(iii)                             in the case of payments made according to a Scheduled
Distribution, the new election is made not less than twelve (12) months before
the date on which payment would have been made (or, in the case of installment
payments, the first installment payment would have been made) absent the new
election.


 


For purposes of application of the above change limitations,
installment payments shall be treated as a single payment.  Election changes made pursuant to this Section shall
be made on Participant Election Forms provided by the Administrative Committee,
and in accordance with rules established by the Administrative Committee,
and shall comply with all requirement of Code Section 409A and applicable
authorities.


 


ARTICLE IV


DEFERRAL
ACCOUNTS


 


4.1           Deferral Accounts.  The
Administrative Committee shall establish and maintain one or more Deferral
Account(s) for each Participant under the Plan.  Each Participant’s Deferral Account shall be
further divided into separate subaccounts (“investment fund subaccounts”),
each of which corresponds to the investment Fund(s) elected by the
Participant pursuant to Section 3.3. 
A Participant’s Deferral Account shall be credited as follows:


 


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(a)                                  On or before the fifth (5th) business day after amounts are withheld and deferred
from a Participant’s Compensation, the Administrative Committee shall credit
the investment Fund subaccounts of the Participant’s Deferral Account with an
amount equal to Compensation deferred by the Participant in accordance with the
Participant’s election under Section 3.1; that is, the portion of the
Participant’s deferred Compensation that the Participant has elected to be
deemed to be invested in a certain type of investment Fund shall be credited to
the investment fund subaccount to be invested in that Fund;


 


(b)                                 Each business day, each investment fund
subaccount of a Participant’s Deferral Account shall be credited with earnings
or losses in an amount equal to that determined by multiplying the balance
credited to such investment Fund subaccount as of the prior day plus
contributions credited that day to the investment fund subaccount by the
Crediting Rate for the corresponding Fund as determined by the Company; and


 


(c)                                  In the event that a Participant elects
for a given Plan Year’s deferral of Compensation a Scheduled Distribution, all
amounts attributed to the deferral of Compensation for such Plan Year shall be
accounted for in a manner which allows separate accounting for the deferral of
Compensation and investment gains and losses associated with amounts allocated
to such each separate Scheduled Distribution.


 


4.2           Company Contribution
Account.  The Administrative Committee shall establish
and maintain a Company Contribution Account for each Participant under the
Plan.  Each Participant’s Company
Contribution Account shall be further divided into separate investment fund
subaccounts corresponding to the investment Fund(s) elected by the
Participant pursuant to Section 3.3(a). 
A Participant’s Company Contribution Account shall be credited as
follows:


 


(a)                                  On or before the fifth (5th) business day after a Company Contribution is made,
the Company shall credit the investment fund subaccounts of the Participant’s
Company Contribution Account with an amount equal to the Company Contributions,
if any, made on behalf of that Participant, that is, the proportion of the
Company Contributions, if any, which the Participant has elected to be deemed
to be invested in a certain investment Fund shall be credited to the investment
fund subaccount to be invested in that Fund; and


 


(b)                                 Each business day, each investment fund
subaccount of a Participant’s Company Contribution Account shall be credited
with earnings or losses in an amount equal to that determined by multiplying
the balance credited to such investment fund subaccount as of the prior day
plus contributions credited that day to the investment fund subaccount by the
Crediting Rate for the corresponding Fund as determined by the Company pursuant
to Section 3.3(b).


 


4.3           Trust. 
The
Company shall be responsible for the payment of all benefits under the
Plan.  At its discretion, the Company may
establish one or more grantor trusts for the purpose of providing for payment
of benefits under the Plan.  Such trust
or trusts may be irrevocable, but 


 


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the assets thereof shall be subject to the claims of the Company’s
creditors.  Benefits paid to the
Participant from any such trust or trusts shall be considered paid by the
Company for purposes of meeting the obligations of the Company under the Plan.


 


4.4           Statement of Accounts.  The
Administrative Committee shall provide each Participant with statements at
least annually setting forth the Participant’s Account balance as of the end of
each year.


 


ARTICLE V


VESTING


 


5.1           Vesting of Deferral
Accounts.  The Participant shall be vested 100% at all
times in amounts credited to the Participant’s Deferral Account.


 


5.2           Vesting of Company
Contributions.  A Participant shall become vested in his
or her Company Contributions Account upon completion of three (3) Years of
Service, or upon his or her earlier Termination of Service due to death,
Disability or Retirement.  A Participant
shall also become vested in his or her Company Contributions Account upon a
Change in Control.


 


ARTICLE VI


DISTRIBUTIONS


 


6.1           Retirement Distributions.


 


(a)                                  Timing and Form of Deferral Account
Distributions.  Except as otherwise provided herein, in the
event of a Participant’s Retirement or Disability, the total Account balance in
the Participant’s Deferral Account(s) shall be paid to the Participant in
a single lump sum no later than the Payment Date following the Participant’s
Retirement unless the Participant has made an alternative benefit election on a
timely basis pursuant to Section 3.3 to receive the Retirement benefits in
substantially equal annual installments over a period of up to fifteen (15)
years.


 


(b)                                 Distribution of Company Contribution
Account. In the
event of a Participant’s Termination of Service for any reason, the Participant’s
Company Contribution Account shall be paid to the Participant in a single lump
sum no later than the Payment Date following Termination of Service.


 


(c)                                  Small Benefit Exception. 
If, upon commencement of benefits payable from an Account, the total
Account balance from such Account is less than twenty-five thousand dollars
($25,000), the total Account balance from such Account shall automatically be
paid in the form of a single lump sum distribution no later than the Payment
Date following the Participant’s Retirement or Disability.


 


6.2           Termination Distributions.  In the event
of a Participant’s Termination of Service other than by reason of Retirement,
death or Disability, the total Account balance


 


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credited to the Participant Deferral Account(s) shall be paid in a
single lump sum no later than the Payment Date following his or her Termination
of Service.


 


6.3           Death Benefits.  In the event of
the death of a Participant, the Company shall pay to the Participant’s
Beneficiary a death benefit equal to the total Account balance of such Account
in a single lump sum on the Payment Date following the Participant’s death.


 


6.4           Scheduled Distributions.


 


(a)                                  Scheduled Distribution Election. 
Participants shall be entitled to elect to receive a Scheduled
Distribution from a Deferral Account prior to Termination of Service.  In the case of a Participant who has elected
to receive a Scheduled Distribution, such Participant shall receive the total
Plan Year balance, with respect to the specified deferrals, including earnings
thereon, which have been elected by the Participant to be subject to such
Scheduled Distribution election in accordance with Section 3.3 of the
Plan.  A Participant’s Scheduled
Distribution commencement date with respect to deferrals of Compensation for a
given Plan Year shall be no earlier than two (2) years from the last day
of the Plan Year in which the deferrals are credited to the Participant’s
Account.  The Participant may elect to
receive the Scheduled Distribution in a single lump sum or substantially equal
annual installments over a period of up to five (5) years. A Participant
may delay and change the form of a Scheduled Distribution, provided such
extension complies with the requirements of Section 3.3.


 


(b)                                 Small Benefit Exception. 
If, upon the Payment Date of a Scheduled Distribution that the
Participant had elected to receive in installments, the total Scheduled
Distribution to commence on such Payment Date is less than twenty-five  thousand dollars ($25,000), the Scheduled Distribution
shall be paid in the form of a single lump sum distribution on such Payment
Date.


 


(c)                                  Distributions upon Termination of Service. 
In the event of a Participant’s Termination of Service prior to a Scheduled
Distribution date, such Scheduled Distributions shall be distributed in lump
sum regardless of election.  In the event
the Participant Retires prior to or after commencement of a Scheduled
Distribution, such Scheduled Distributions shall be distributed as they fall
due.  Notwithstanding the foregoing, if a
Participant incurs a Termination of Service during a period in which Scheduled
Distributions are currently being paid in installments, the remaining
installments shall continue to be paid as they would otherwise become due.


 


6.5           Hardship Distribution.  Upon a finding
that the Participant has suffered a Financial Hardship, subject to compliance
with Code Section 409A the Administrative Committee may, at the request of
the Participant, accelerate distribution of benefits or approve reduction or
cessation of current deferrals under the Plan in the amount reasonably
necessary to alleviate such Financial Hardship subject to the following
conditions:


 


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(a)                                  The request to take a Hardship
Distribution shall be made by filing a form provided by and filed with the
Administrative Committee.


 


(b)                                 The amount distributed pursuant to this Section with
respect to a Financial Hardship shall not exceed the amount necessary to
satisfy such Financial Hardship plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such Financial Hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of
the Participant’s assets (to the extent the liquidation of such assets would
not itself cause severe financial hardship).


 


(c)                                  The amount determined by the
Administrative Committee as a Hardship Distribution shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar month in
which the Hardship Distribution is approved by the Administrative Committee.


 


(d)                                 In the event of a Participant’s Financial
Hardship, elective deferrals will be suspended effective with the beginning of
the pay period following the date of the Administrative Committee’s approval of
the request and may not be resumed until the beginning of the Plan Year
following the date of the Administrative Committee’s approval of the Hardship
Distribution.


 


6.6           Specified Employees.  Notwithstanding
any provision in the Plan to the contrary, in the case of a Specified Employee
who has a Termination of Service (other than due to death) while any stock of
the Company or any Affiliate is publicly traded on an established securities
market or otherwise, distribution of the Participant’s Account on account of
such Termination of Service may not be made earlier than six months after the
date of the Termination of Service (or if the Participant dies during such six
month period, earlier than the date of the Participant’s death).  Payment of such Participant’s Account shall
be made in the 7th month following the Participant’s Termination
of Service (or if the Participant dies during such six month period, earlier
than the date of the Participant’s death). 
While distributions are suspended pursuant to this Section 6.6,
such Participant’s Account will be deemed to continue to be adjusted for
investment gains or losses pending distribution as set forth in Sections 4.1(b) and
4.2(b).


 


6.7           Acceleration of Payment
Date.  Notwithstanding the foregoing,  the distribution of benefits hereunder may be
accelerated, with the consent of the Administrative Committee, under the
following circumstances:


 


(a)                                  Compliance with Domestic Relations Order. 
To permit payment to an individual other than the Participant as
necessary to comply with the provisions of a domestic relations order (as
defined in Code Section 414(p)(1)(B));


 


(b)                                 Conflicts of Interest. 
To permit payment as necessary to comply with the provisions of a
Federal government ethics agreement or to avoid violation of an applicable
Federal, state, local or foreign ethics law or conflicts of interest law;


 


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(c)                                  Payment of Employment Taxes. 
To permit payment of federal employment taxes under Code Sections 3101,
3121(a) or 3121(v)(2), or to comply with any federal tax withholding
provisions or corresponding withholding provisions of applicable state, local,
or foreign tax laws as a result of the payment of federal employment taxes, and
to pay the additional income tax at source on wages attributable to the
pyramiding Code Section 3401 wages and taxes; or


 


(d)                                 Tax Event.  Upon a good
faith, reasonable determination by the Administrative Committee, and upon
advice of counsel, that the Plan fails to meet the requirements of Code Section 409A
and regulations thereunder.  Such payment
may not exceed the amount required to be included in income as a result of the
failure to comply with the requirements of Code Section 409A.


 


6.8           Delay of Payments.  A payment
otherwise required to be made under the terms of the Plan may be delayed solely
to the extent necessary under the following circumstances, provided that
payment is made as soon as possible within the first calendar year after the
reason for delay no longer applies:


 


(a)                                  Payments Subject to the Deduction
Limitation.  The Company reasonably anticipates that such
payment would not be deductible under Code Section 162(m);


 


(b)                                 Violation of Law. 
The Administrative Committee reasonably determines that making the
payment will violate Federal securities or other applicable laws; or


 


(c)                                  Other Permitted Event. Upon such other events and conditions
as the Commissioner of Internal Revenue shall prescribe in generally applicable
guidance.


 


ARTICLE VII


PAYEE
DESIGNATIONS AND LIMITATIONS


 


7.1           Beneficiaries.


 


(a)                                  Beneficiary Designation. 
The Participant shall have the right, at any time, to designate any person
or persons as Beneficiary (both primary and contingent) to whom payment under
the Plan shall be made in the event of the Participant’s death.  The Beneficiary designation shall be
effective when it is submitted in writing to and acknowledged by the Administrative
Committee during the Participant’s lifetime on a form prescribed by the
Administrative Committee.


 


(b)                                 Revision of Designation. 
The submission of a new Beneficiary designation shall cancel all prior
Beneficiary designations.  Any finalized
divorce or marriage (other than a common law marriage) of a Participant
subsequent to the date of a Beneficiary designation shall revoke such
designation, unless in the case of divorce the previous spouse was not
designated as Beneficiary and unless in the 


 


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case of marriage the Participant’s new spouse has previously been
designated as Beneficiary.


 


(c)                                  Absence of Valid Designation. 
If a Participant fails to designate a Beneficiary as provided above, or
if the Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if every person designated as
Beneficiary predeceases the Participant or dies prior to complete distribution
of the Participant’s benefits, then the Administrative Committee shall direct
the distribution of such benefits to the Participant’s estate.


 


7.2           Payments to Minors.  In the event
any amount is payable under the Plan to a minor, payment shall not be made to
the minor, but instead be paid (a) to that person’s living parent(s) to
act as custodian, (b) if that person’s parents are then divorced, and one
parent is the sole custodial parent, to such custodial parent, to act as
custodian, or (c) if no parent of that person is then living, to a
custodian selected by the Administrative Committee to hold the funds for the
minor under the Uniform Transfers or Gifts to Minors Act in effect in the
jurisdiction in which the minor resides. 
If no parent is living and the Administrative Committee decides not to
select another custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently acting guardian of the estate for the
minor or, if no guardian of the estate for the minor is duly appointed and
currently acting within sixty (60) days after the date the amount becomes
payable, payment shall be deposited with the court having jurisdiction over the
estate of the minor.


 


7.3           Payments on Behalf of
Persons Under Incapacity.  In the event that any amount becomes payable
under the Plan to a person who, in the sole judgment of the Administrative
Committee, is considered by reason of physical or mental condition to be unable
to give a valid receipt therefore, the Administrative Committee may direct that
such payment be made to any person found by the Administrative Committee, in
its sole judgment, to have assumed the care of such person.  Any payment made pursuant to such
determination shall constitute a full release and discharge of any and all
liability of the Administrative Committee, the Compensation Committee and the
Company under the Plan.


 


7.4           Inability to Locate Payee.  In the event
that the Administrative Committee is unable to locate a Participant or
Beneficiary within two years following the scheduled Payment Date, the amount
allocated to the Participant’s Deferral Account shall be forfeited.  If, after such forfeiture, the Participant or
Beneficiary later claims such benefit, such benefit shall be reinstated without
interest or earnings.


 


ARTICLE VIII


ADMINISTRATION


 


8.1           Administrative Committee.  The Plan shall
be administered by the Administrative Committee, which shall have the exclusive
right and full discretion (i) to appoint agents to act on its behalf, (ii) to
select and establish Funds, (iii) to interpret the Plan, (iv) to
decide any and all matters arising hereunder (including the right to remedy
possible ambiguities, inconsistencies, or admissions), (v) to make, amend
and rescind such rules as it deems necessary for the proper administration
of the Plan and (vi) to make all other determinations and resolve all



 


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questions of fact necessary or advisable for the
administration of the Plan, including determinations regarding eligibility for
benefits payable under the Plan, except where such authority is reserved herein
to the Compensation Committee or the Board. 
All interpretations of the Administrative Committee with respect to any
matter hereunder shall be final, conclusive and binding on all persons affected
thereby.  No member of the Administrative
Committee or the Compensation Committee or agent thereof shall be liable for
any determination, decision, or action made in good faith with respect to the
Plan.  The Company will indemnify and
hold harmless the members of the Administrative Committee and its agents from
and against any and all liabilities, costs, and expenses incurred by such
persons as a result of any act, or omission, in connection with the performance
of such persons’ duties, responsibilities, and obligations under the Plan,
other than such liabilities, costs, and expenses as may result from the bad
faith, willful misconduct, or criminal acts of such persons.  The Administrative Committee may appoint such
person or persons as it deems appropriate to perform all or any of the
functions under the terms of the Plan.


 


8.2           Claims Procedure.  Any
Participant, former Participant or Beneficiary may file a written claim with
the Administrative Committee setting forth the nature of the benefit claimed,
the amount thereof, and the basis for claiming entitlement to such
benefit.  The Administrative Committee
shall determine the validity of the claim and communicate a decision to the
claimant promptly and, in any event, not later than ninety (90) days after the
date of the claim.  The claim may be
deemed by the claimant to have been denied for purposes of further review
described below in the event a decision is not furnished to the claimant within
such ninety (90) day period.  If
additional information is necessary to make a determination on a claim, the
claimant shall be advised of the need for such additional information within
forty-five (45) days after the date of the claim.  The claimant shall have up to one hundred
eighty (180) days to supplement the claim information, and the claimant shall
be advised of the decision on the claim within forty-five (45) days after the
earlier of the date the supplemental information is supplied or the end of the
one hundred eighty (180) day period. 
Every claim for benefits which is denied in whole or in part shall be
denied by written notice setting forth in a manner calculated to be understood
by the claimant (i) the specific reason or reasons for the denial, (ii) specific
reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based, (iii) description
of any additional material or information that is necessary to process the
claim, and (iv) an explanation of the procedure for further reviewing the
denial of the claim and shall include an explanation of the claimant’s right to
submit the claim for binding arbitration  in the
event of an adverse determination on review.


 


8.3           Review Procedures.  Within sixty
(60) days after the receipt of a denial on a claim, a claimant or his/her
authorized representative may file a written request for review of such
denial.  Such review shall be undertaken
by the Compensation Committee and shall be a full and fair review.  The claimant shall have the right to review
all pertinent documents.  The
Compensation Committee shall issue a decision not later than sixty (60) days
after receipt of a request for review from a claimant unless special
circumstances, such as the need to hold a hearing, require a longer period of
time, in which case a decision shall be rendered as soon as possible but not
later than one hundred twenty (120) days after receipt of the claimant’s
request for review.  The decision on
review shall be in writing and shall include specific reasons for the decision
written in a manner calculated to be understood by the claimant with specific
reference 


 


15

















 


to any provisions of the Plan on which the decision is based and shall
include an explanation of the claimant’s right to submit the claim for binding
arbitration in the event of an adverse determination on review.  No legal action or arbitration may be
commenced by a Participant or Beneficiary with respect to a benefit under this
Plan without first exhausting the Plan’s administrative claims procedures, and
any legal action or arbitration with respect to a claim that has been finally
denied must be commenced no later than one year after the date of the Plan’s
final denial of such claim upon appeal.


 


ARTICLE IX


MISCELLANEOUS


 


9.1           Amendment or Termination
of Plan.  The Company may, at any time, direct the
Compensation Committee to amend or terminate the Plan, except that no such
amendment or termination may reduce a Participant’s Account balances.  If the Company terminates the Plan, no
further amounts shall be deferred hereunder, and amounts previously deferred or
contributed to the Plan shall be fully vested and shall be paid in accordance
with the provisions of the Plan as scheduled prior to the Plan termination.


 


9.2           Unsecured General Creditor.  The benefits
paid under the Plan shall be paid from the general funds of the Company, and
the Participant and any Beneficiary or their heirs or successors shall be no
more than unsecured general creditors of the Company with no special or prior
right to any assets of the Company for payment of any obligations
hereunder.  It is the intention of the
Company that this Plan be unfunded for purposes of ERISA and the Code.


 


9.3           Restriction Against
Assignment.  The Company shall pay all amounts payable
hereunder only to the person or persons designated by the Plan and not to any
other person or entity.  No part of a
Participant’s Accounts shall be liable for the debts, contracts, or engagements
of any Participant, Beneficiary, or their successors in interest, nor shall a
Participant’s Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such
person have any right to alienate, anticipate, sell, transfer, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner
whatsoever.  No part of a Participant’s
Accounts shall be subject to any right of offset against or reduction for any
amount payable by the Participant or Beneficiary, whether to the Company or any
other party, under any arrangement other than under the terms of this
Plan.  Notwithstanding the foregoing, the
Company shall comply with the terms of a domestic relations order applicable to
a Participant’s interest in the Plan, provided that such order does not require
the payment of benefits in a manner or amount, or at a time, inconsistent with
the terms of the Plan.  The Company shall
have no liability to any Participant or Beneficiary to the extent that his or
her benefit is reduced in accordance with the terms of a domestic relations
order that the Company applies in good faith.


 


9.4           Withholding. The Participant shall make appropriate arrangements
with the Company for satisfaction of any federal, state or local income tax
withholding requirements, Social Security and other employee tax or other
requirements applicable to the granting, crediting, vesting or payment of
benefits under the Plan.  There shall be
deducted from each payment made under the Plan or any other Compensation
payable to the Participant (or Beneficiary) all taxes which are required to be
withheld by the Company in respect to such 


 


16

















 


payment or this Plan.  The
Company shall have the right to reduce any payment (or other Compensation) by
the amount of cash sufficient to provide the amount of said taxes.


 


9.5           Protective Provisions.  The
Participant shall cooperate with the Company by furnishing any and all
information requested by the Administrative Committee, in order to facilitate
the payment of benefits hereunder, taking such physical examinations as the
Administrative Committee may deem necessary and taking such other actions as
may be requested by the Administrative Committee.  If the Participant refuses to so cooperate,
the Company shall have no further obligation to the Participant under the
Plan.  In the event of the Participant’s
suicide during the first two (2) years in the Plan, or if the Participant
makes any material misstatement of information or non-disclosure of medical
history in an application for insurance required for participation in the Plan,
then no benefits shall be payable to the Participant under the Plan, except
that benefits may be payable in a reduced amount in the sole discretion of the
Administrative Committee.


 


9.6           Receipt or Release.  Any payment
made in good faith to a Participant or the Participant’s Beneficiary shall, to
the extent thereof, be in full satisfaction of all claims against the
Administrative Committee, the Compensation Committee, their members and the
Company.  The Administrative Committee
may require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect.  If requested, such receipt and release shall
be executed by the Participant or Beneficiary no later than 90 days after the
scheduled Payment Date.


 


9.7           Errors in Account
Statements, Deferrals or Distributions.  In the event
an error is made in an Account statement, such error shall be corrected on the
next statement following the date such error is discovered.  In the event of an error in deferral amount,
consistent with and as permitted by any correction procedures established under
Code Section 409A, the error shall be corrected immediately upon discovery
by, in the case of an excess deferral, distribution of the excess amount to the
Participant, or, in the case of an under deferral, reduction of other
compensation payable to the Participant. 
In the event of an error in a distribution, the over or under payment
shall be corrected by payment to or collection from the Participant consistent
with any correction procedures established under Code Section 409A,
immediately upon the discovery of such error. In the event of an overpayment,
the Company may, at its discretion, offset other amounts payable to the
Participant from the Company (including but not limited to salary, bonuses,
expense reimbursements, severance benefits or other employee compensation
benefit arrangements, as allowed by law and subject to compliance with Code Section 409A)
to recoup the amount of such overpayment(s).


 


9.8           Employment Not Guaranteed.  Nothing
contained in the Plan nor any action taken hereunder shall be construed as a
contract of employment or as giving any Participant any right to continue the
provision of services in any capacity whatsoever to the Company.


 


9.9           Successors of the Company. 
The rights
and obligations of the Company under the Plan shall inure to the benefit of,
and shall be binding upon, the successors and assigns of the Company.


 


17

















 


9.10         Notice.  Any notice or
filing required or permitted to be given to the Company or the Participant
under this Agreement shall be sufficient if in writing and hand-delivered, or
sent by registered or certified mail, in the case of the Company, to the
principal office of the Company, directed to the attention of the
Administrative Committee, and in the case of the Participant, to the last known
address of the Participant indicated on the employment records of the
Company.  Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification.  Notices to the Company may be permitted by
electronic communication according to specifications established by the
Administrative Committee.


 


9.11         Headings.  Headings and
subheadings in this Plan are inserted for convenience of reference only and are
not to be considered in the construction of the provisions hereof.


 


9.12         Gender, Singular and
Plural.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, or neuter, as the identity of
the person or persons may require.  As
the context may require, the singular may be read as the plural and the plural
as the singular.


 


9.13         Governing Law.  The Plan is
intended to be an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of “management or highly compensated employees”
within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be
exempt from Parts 2, 3 and 4 of Title I of ERISA.  In the event any provision of, or legal issue
relating to, this Plan is not fully preempted by federal law, such issue or
provision shall be governed by the laws of the Commonwealth of Virginia.


 


IN WITNESS WHEREOF, the Board of Directors of the Company has approved
the adoption of this Plan as of the Effective Date and has caused the Plan to
be executed by its duly authorized representative this 6th day of May, 2009.


 


 


	
   

  	
  Stanley, Inc.

  
	
   

  	
   

  
	
   

  	
  /s/ Scott D. Chaplin

  
	
   

  	
  Name:

  	
  Scott D. Chaplin

  
	
   

  	
  Title:

  	
  General Counsel

  



 


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