exv10w31



 






EXHIBIT 10.31




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made this 2nd day of
February, 2004, by and between Alion Science and Technology Corporation, a
Delaware corporation (the “Company”) and James C. Fontana (the “Employee”).



     WHEREAS, the Company and Employee desire to enter into this Agreement as
of the date hereof and no other agreement concerning employment,except as
provided in the Employee’s Offer of Employment, dated January 15, 2004 (the
“Offer Letter”), attached hereto and incorporated herein by reference.



     NOW THEREFORE, in consideration of the foregoing recitals and mutual
promises and conditions set forth herein, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Employee agree as follows:



     1. Employment. Upon the terms and subject to the conditions contained
herein, the Company hereby employs the Employee as Senior Vice President, and
General Counsel and Secretary, at will and terminable by either party at any
time for any reason, with or without prior notice, subject to the terms and
provisions of this Agreement.



     3. Compensation. The Employee’s salary (“Annual Base Salary”)and benefits
shall be as set forth in the Offer Letterinitial base salary during the term of
this Agreement shall be Two Hundred and Twenty Five Thousand Dollars and No/100
Cents ($225,000.00) per annum (“Annual Base Salary”). Commencing with the
Company’s first performance review cycle after the effective date of
employment, the Employee shall participate in the Company’s annual performance
review process, at which time the Company may at its sole discretion increase
annual base salary as deemed appropriate by the Company, which shall become the
new Annual Base Salary when effective.



     4. Term. Unless terminated or extended in accordance with the provisions
hereof, the term of this agreement shall commence on the Effective Date and end
the second anniversary of the Effective Date (“Term”).



     Nondisclosure of Proprietary Company Information. During the term of this
Agreement and for a period of two (2) years thereafter, Employee agrees: (a) to
treat all Company Proprietary Information in a secret and confidential manner,
take all reasonable steps to maintain such secrecy, and comply with all
applicable procedures established by the Company with respect to maintaining
the secrecy and confidentiality of Company Proprietary Information; (b) to use
Company Proprietary Information only as



 









 





necessary and proper in the performance of Employee’s duties as an
employee of the Company; and (c) except as required in this Section, to not
directly or indirectly, without the written consent of the Company, reproduce,
copy, disseminate, publish, disclose, provide or otherwise make available to
any person, firm, corporation, agency or other entity, any Company Proprietary
Information. Under no circumstances shall Employee use, directly or
indirectly, any such Company Proprietary Information for his or her personal
gain or profit.



     5. Change of Control Benefits.



          A. In the event of a Change of Control, as defined herein below, if the
Employee meets the Eligibility Requirements set forth in section 6 below, the
Company’s successor or assign shall pay Employee, in lieu of severance
benefits, a lump sum amount equal to the amount of Employee’s Annual Base
Salary as of the date of the Change of Control.



          B. In addition to the salary benefits provided in Section 5A, Employee
shall have continued eligibility to participate, for a period of one (1) year
from the Termination Date as defined herein (the “Post Termination Period”) ,in
the Company’s successor’s or assigns’ insured welfare benefit plans and
policies (including, without limitation, health, dental, vision, disability and
term life insurance benefits) at the same level of employee cost and at the
same level of coverage provided to Employee as of the Termination Date, it
being understood that the Company’s successor or assign has and reserves the
right to amend, modify or replace such plans or policies to provide
substantially similar insured coverage during the Post Termination Period. For
purposes of the Company’s successor or assigns welfare benefit plans and
policies subject to the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”), Employee’s “qualifying event” for COBRA purposes shall be
the Termination Date.(The salary and other benefits specified in Sections 5A
and B hereof are collectively referred to as the “Severance Benefits”).
Employee shall enjoy continued entitlement to such other accrued or earned and
vested benefits provided under the Company’s successor’s or assign’s plans,
programs, policies and practices as of the Termination Date.C. Notwithstanding
any other provision under this Agreement, Employee shall not be entitled to
receive the Severance Benefits in the event that: (i) the Company’s successor
or assign (or any of its respective affiliates) terminates Employee’s
employment for Cause (as defined in Section 5D below); (ii) Employee dies (in
which case the terms of Section 5E below shall apply); (iii) Employee is
determined to be totally and permanently disabled (in which case the terms of
Section 5E shall apply); or (iv) Employee resigns other than for Good Reason.
In any such event, Employee, in addition to any benefits payable in accordance
with this Agreement, shall be entitled only to his salary and benefits accrued
or earned and vested under other plans, programs, policies, practices and
coverages of the Company’s successor or assign (or any of its respective
affiliates).



 









 





          D. For purposes of this Agreement, “Cause” is defined as the occurrence of
one of the following: (i) the Employee’s breach of any material provision of
this Agreement; (ii) any act, failure to act, series of acts or failures to
act, or course of conduct of Employee constituting reckless, willful, or
criminal misconduct in the performance of duties specified in this Agreement;
(iii) any failure to perform, or gross negligence or incompetence in the
performance of, the duties specified in this Agreement; or (iv) the Employee’s
commission of a crime involving conversion, misappropriation, larceny, theft,
fraud, dishonesty, embezzlement, moral turpitude or any other felony,
regardless of whether such crime involves the Company. Following an initial
determination by the President that Cause exists, the President shall provide
Employee with written notice of the details of the alleged Cause and
opportunity to a hearing before the Chairman of the Board of Directors to
contest the validity of the initial determination. The President, with the
concurrence of the Chairman of the Board of Directors, shall thereafter make a
final determination as to whether Cause exists.



          E. In the event of Employee’s death or total disability (as defined in the
Company’s long term disability insurance plan) at any time the Employee is
entitled to benefits under this Section 5, the Company shall pay to Employee’s
heir or personal representatives, as the case may be, six (6) monthly payments,
each equal to one-twelfth (1/12) of Employee’s then-current salary, commencing
with the first calendar month after termination. In the event of the
Employee’s total disability at any time the Employee is entitled to benefits
under this Section 5, the Company shall pay to Employee six (6) monthly
payments, each equal to one-twelfth (1/12) of Employee’s then-current salary
less any payments under the Company’s long term disability insurance plan that
Employee receives or is entitled to receive in each such month, commencing with
the first calendar month after termination.




	 	6.	 	Eligibility for Change of Control Benefits. If Employee
terminates employment with any successor or assign (or any of their
respective affiliates) of the Company at any time during the twenty
four (24) month period beginning on the effective date of a Change
in Control (the “Protection Period”), he shall be entitled to the
Change of Control Benefits described in Section 5. If during the
Protection Period, Employee terminates his employment for Good
Reason (as defined below) by delivering to the successor or assign
of the Company (or its respective affiliate), as applicable, each no
later than thirty (30) days after learning of the occurrence of an
event constituting Good Reason: (i) a Preliminary Notice of Good
Reason (as defined below); and (ii) a Notice of Termination (as
defined below); Employee shall have the right, in his sole and
reasonable discretion, to receive Change of Control Benefits. For
purposes of this Agreement, the following terms shall have the
respective meanings:





          A. “Good Reason” shall only result upon the occurrence, without Employee’s
prior written consent, of one or more of the following events, as determined by
Employee in good faith, during the Protection Period: (i) Employee’s authority
or responsibility has materially diminished as compared to



 









 





Employee’s authority and responsibility in effect immediately prior to a
Change in Control; (ii) Employee has been assigned permanent duties
inconsistent with his position, responsibility and status with the Company
immediately prior to the Protection Period; (iii) there has been an adverse
change in Employee’s title or office as in effect immediately prior to the
Protection Period; (iv) Employee’s base pay or incentive compensation has been
reduced; or (v) Employee’s principal work location is more than ten (10) miles
away from the principal work location as immediately prior to the Protection
Period; provided, however, that “Good Reason” shall not include (x) acts not
taken in bad faith that are cured by the Company’s successor or assign in all
respects, including without limitation restoration of all back pay and
incentive compensation through the Termination Date, not later than thirty (30)
days from the date of receipt by the successor or assign of the Company (or its
respective affiliate), as applicable, of a written notice from Employee
identifying in reasonable detail the act or acts constituting “Good Reason” in
a “Preliminary Notice of Good Reason”, or (y) acts for which Employee does not
provide a Preliminary Notice of Good Reason within thirty (30) days of learning
of the occurrence of the event constituting Good Reason.



          B. “Notice of Termination” shall mean a notice that indicates in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment.



          C. “Termination Date” shall mean the date specified in the Notice of
Termination for termination of Employee’s employment under this Agreement.



     7. Change in Control. For the purposes of this Agreement, a “Change of
Control” shall mean and shall be effective upon the closing date of: (i) the
dissolution or liquidation of the Company; (ii) the merger or consolidation of
the Company with any other corporation, foundation, association or other entity
which results in the Company’s shareholders owning less than 51% of the
resulting merged or consolidated entity; (iii) the amendment of the Company’s
corporate documents to grant a party other than the Company’s Employee Stock
Ownership Plan, the right to designate, elect or remove a majority of the
Company’s voting directors; or (iv) the transfer to another corporation,
foundation, association or other entity in a sale, lease, exchange or other
similar transfer (in a single transaction or in a series of related
transactions) of all or substantially all of the assets of the Company.



     8. Indemnification. The Company shall indemnify, defend, hold and save
Employee, his heirs, administrators or executors harmless from any and all
actions and causes of actions, claims, demands, liabilities, losses, costs,
damages or expenses of whatsoever kind of nature, including judgments, interest
and attorney’s fees, that Employee, his heirs, administrators or executors may
sustain or incur subsequent to the date of this Agreement or become subject to
by reason of any claim or claims, resulting from Employee’s execution of the
terms and conditions of this Agreement, except for Employee’s fraudulent or
criminal acts or omissions or gross negligence except as prohibited by
applicable law.



 









 





     9. Miscellaneous.



          A. Any notices required by this Agreement shall: (i) be delivered by
messenger or made in writing and mailed by certified mail, return receipt
requested, with adequate postage prepaid; (ii) be deemed given when so
delivered or mailed; and (iii) in the case of the Company, be delivered or
mailed to its office at 1750 Tysons Boulevard, Suite 1300, McLean, Virginia
22102-4213, Attn: Chief Executive Officer, or in the case of the Employee, be
mailed to the last home address that the Employee has given to the Company.



          B. The obligations and duties of the Employee under this Agreement are
personal and not assignable. This Agreement shall be binding upon and inure to
the benefit of, the parties, their successors, assigns, personal
representatives, distributes, heirs, and legatees.If any term or provision of
this Agreement is held to be illegal or invalid, such illegality or invalidity
shall not affect the remaining terms or provisions hereof, and each such
remaining term and provision of this Agreement shall be enforced to the fullest
extent permitted by law.



          C. If any dispute arises under this Agreement, such dispute shall be
referred to a panel of three (3) arbitrators for resolution. The
three-arbitrator panel shall be selected as follows: the Company will
designate one arbitrator, the Employee will designate one arbitrator, and the
two designees will mutually select the third. The American Arbitration
Association’s Voluntary Labor Arbitration Rules shall govern procedures for the
arbitration, unless the three arbitrators unanimously agree to adopt a
different rule or rules. The arbitration shall occur in the the City of
McLean, Virginia. Notwithstanding the foregoing, and specifically in the event
of a dispute over the Employee’s termination by the Company, Employee may, at
his or her option, elect to have a court rather than an arbitrator resolve the
dispute.



          D This Agreement may be altered, amended or modified only by written
agreement signed by both the Employee and the Company. No oral modification of
this Agreement, or of any part of this Agreement including this paragraph,
shall have any force or effect. No waiver by either of such parties of their
rights under this Agreement shall be deemed to constitute a waiver with respect
to any subsequent occurrences or transactions hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.



          E. In any action or claim brought by either party against the other under
or pursuant to this Agreement, the substantially prevailing party shall be
entitled to an award of all actual attorney’s fees, costs and expenses incurred
by the substantially prevailing party.



          F. This Agreement contains the entire understanding between the parties
and supersedes any prior written or oral agreement(s) between the Company and
Employee relating to the



 









 





subject matter contained herein. This Agreement shall not be modified or
waived except by written instrument signed by the parties.



          G. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Virginia.



ALION SCIENCE AND TECHNOLOGY CORPORATION




	 	 	 	 	 	 	 
	By:
	/s/	Katherine C. Madaleno	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	Katherine C. Madaleno	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Corporate Vice President	 	 	 	 
	

	 	Director Human Resources	 	 	 	 
	 
	 	 	 	 	 	 
	EMPLOYEE
	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	/s/	James Fontana	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	James Fontana	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	Senior Vice President, General Counsel	 	 	 	 
	

	 	and Corporate Secretary