exv10w52






EXHIBIT 10.52




SETTLEMENT AGREEMENT AND GENERAL RELEASE




     This Settlement Agreement and General Release (“Agreement”) is entered into by and between
John M. Hughes (“Hughes”) and Alion Science and Technology Corporation (“Alion” or the “Company”)
as of the latest date of execution by the parties to this Agreement. This Agreement supersedes any
prior employment agreements or arrangements Hughes may have entered into with Alion or its
subsidiaries, affiliates, successors, assigns or predecessors in interest, including without
limitation the Employment Agreement between Hughes and Alion dated June 28, 2007 (the “Employment
Agreement”), the Separation Agreement and General Release dated April 25, 2008 (the “Separation
Agreement”) (except those provisions as set forth in Paragraph 5 below), and any and all phantom
stock or other incentive compensation agreements between Hughes and the Company; provided, however,
that the Employee Intellectual Property Agreement between Hughes and Alion, dated December 16,
2002, shall remain in full force and effect.



     WHEREAS, Hughes terminated employment with Alion effective August 15, 2008, and the parties
entered into the Separation Agreement with respect to such termination; and



     WHEREAS, the Company has completed an investigation of certain issues arising from Hughes’
conduct of his employment with the Company; and



     WHEREAS, the parties now desire to finally resolve and settle any outstanding claims the
parties may have in respect of Hughes’ employment and termination thereof:



     NOW, THEREFORE, in consideration of the mutual covenants, agreements and representations
contained herein, the adequacy of which is hereby acknowledged, the parties hereto expressly and
intentionally bind themselves as follows:



     1. PAYMENTS BY ALION



     If Hughes signs and does not revoke this Agreement, in exchange for the promises and covenants
herein, Alion shall pay or cause to be paid to or for the benefit of Hughes, Three Million Dollars
($3,000,000.00) by the following payments:



     (a) Five Hundred Thousand Dollars ($500,000.00), payable within fifteen (15) days of the date
the Agreement becomes effective in accordance with its terms;



     (b) Five Hundred Thousand Dollars ($500,000.00), payable on December 31, 2008; and



     (c) Five Hundred Thousand Dollars ($500,000.00) payable by the end of each of the following
four calendar quarters thereafter until the total amount of Three Million Dollars ($3,000,000.00)
has been paid.



     Hughes expressly acknowledges and agrees that these payments by Alion are in exchange for
resolution of all issues arising from or relating to Hughes’ employment with Alion and the



 









 







termination of such employment, and any and all issues which could have been or were raised by
him in connection with the foregoing. Hughes further expressly acknowledges and agrees that these
payments by Alion are in lieu of any payments to which Hughes would otherwise be entitled to under
the terms of the Employment Agreement, the Separation Agreement and any phantom stock or other
incentive or other compensation agreements between Hughes and the Company.



     In addition to the above payments, Hughes expressly acknowledges and agrees that he received
from the Company all outstanding and accrued Paid Time Off (“PTO”), as well as all proceeds
previously held on his behalf in the Alion Non-Qualified Deferred Compensation Plan in accordance
with the terms of such plan. Hughes further acknowledges and agrees that, except as provided in
this Agreement or under the terms of an applicable qualified retirement or welfare employee benefit
plan, no further payments shall be made to him, including any severance, phantom stock or other
payments described in the Separation Agreement or Employment Agreement.



     The parties agree that, under current federal tax law, the settlement payments hereunder shall
be reported on IRS Form W-2 and federal income tax shall be withheld at the applicable withholding
rate. The Company shall withhold such further federal, state or local tax, payroll and other
amounts from payments under this Agreement as the Company reasonably believes to be required by
law. Hughes shall be solely responsible for payment of his own taxes, including any taxes arising
under Internal Revenue Code Section 409A. The Company has not provided and will not provide tax
advice to Hughes.



     2. EMPLOYMENT BENEFITS



     (a) Hughes agrees and acknowledges that his participation in any 401(k) Plan, short-term and
long-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 currently
enrolled, but which are not specifically addressed in this Agreement, terminated on August 15,
2008.



     (b) To the extent that Hughes is eligible for and elects to receive medical and/or dental
benefits pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
for himself and/or any qualifying beneficiaries, the Company shall pay on Hughes’ behalf, or
reimburse Hughes for, the amount of the applicable COBRA that exceeds the amount of premium payable
by Hughes for the same level of coverage immediately prior to the effective date of termination.
Any such COBRA premium payment by the Company that constitutes taxable income to Hughes shall be
grossed up by the Company, assuming an applicable income tax rate of forty percent (40%). Payments
under this paragraph shall cease at the earlier of (i) the end of the first month in which Hughes
is no longer eligible for COBRA for any reason (other than death or eligibility for Medicare,
provided that COBRA coverage continues for any qualified beneficiary), or (ii) Eighteen (18) months
after the Notification Date. Hughes shall notify the Company as soon as practicable after he
ceases to be eligible for COBRA coverage due to coverage under the group health plan of another
employer.



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     3. GENERAL RELEASE BY HUGHES



     (a) Hughes 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 and
from the following:



     (i) Any and all claims, demands, damages, liabilities, obligations, debts, and agreements
whatsoever of every name and nature (other than those arising directly out of this Agreement),
including, without limitation, those with respect to Hughes’ employment by Alion, or the terms and
conditions of employment, benefits or compensation including, without limitation, any and all plans
in which Hughes participated, including Alion’s phantom stock plan, or termination of his
employment, which Hughes has or ever had against Releasees; and



     (ii) Without limitation, any and all claims known or unknown as of the date of execution of
this Agreement for tortious injury, breach of contract, and/or wrongful discharge (including,
without limitation, any claim for violation of public policy or constructive discharge), any
personal gain with respect to any claim arising under the qui tam provisions of the False Claims
Act, 31 U.S.C. 3730 or any other whistleblower claim, all claims for infliction of emotional
distress, all claims for slander, libel, or defamation of character, and all claims for
reinstatement, back pay, front pay, compensatory or punitive damages, severance pay, attorneys’
fees, or costs, as related to Hughes’ employment by Alion, or the terms and conditions or
termination of his employment, benefits or compensation, or termination of such employment; and



     (iii) Without limitation, any and all claims known or unknown based upon any allegation of
employment discrimination, including, without limitation, discrimination on the basis of race,
color, sex, sexual orientation, age (including any claim pursuant to the federal Age Discrimination
in Employment Act), religion, disability, national origin or any other classification protected
under applicable law.



     (b) It is agreed and understood that this release is a GENERAL RELEASE to be construed in the
broadest possible manner consistent with applicable law.



     (c) Hughes acknowledges and agrees that Hughes:



     (i) has not filed or pursued any claim released hereby against any Releasee by filing a
lawsuit in any local, state or federal court for or on account of anything which has occurred up to
the present time as a result of Hughes’ employment or termination of employment, and Hughes shall
not seek reinstatement or future employment with, or damages of 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 for
twenty-one (21) days before executing it. Any change made to the Agreement during the 21-day
period, whether material or not, will not restart the running of the 21-day period. In the event
that Hughes executes this Agreement within twenty-one (21) days of the date of its delivery to



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him, he acknowledges that such decision was entirely voluntary and that he 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, Hughes shall retain the right to revoke this
Agreement in accordance with 29 U.S.C. § 626 by written notice to Alion, c/o Kathy Madaleno,
Director of Human Resources, 1750 Tysons Boulevard, Suite 1300, McLean, Virginia 22102. This
Agreement shall not become effective or enforceable until the expiration of such revocation period;
and



     (iii) has been and is advised to consult an attorney regarding this Agreement prior to
executing it and that he has been given sufficient time to do so; and



     (iv) has received full and adequate consideration for this General Release; and



     (v) fully understands and acknowledges the significance and consequences of this Agreement and
represents by his signature that the terms of this Agreement are fully understood and voluntarily
accepted by him. This Agreement has been individually negotiated by Hughes and is not part of a
group exit incentive or other group employment termination program.



     (d) Excluded from this General Release are any claims or rights which cannot be waived by law,
including the right to challenge the enforceability of this Agreement and Hughes’ right to file a
charge with an administrative agency or participate in any agency investigation where that agency
expressly prohibits such a waiver. However, Hughes is waiving his right to recover any money or to
reinstatement with any Releasee in connection with such a charge or investigation. Hughes is also
waiving his right to recover money in connection with a charge filed by any other individual or by
the Equal Employment Opportunity Commission or any other federal, state or local agency.



     (e) This General Release becoming and remaining effective shall be a condition precedent to
Hughes obtaining any payments or benefits under this Agreement, and shall be a condition precedent
to the General Release by Alion in Paragraph 4 becoming effective.



     4. GENERAL RELEASE BY ALION



     (a) Alion hereby releases and forever discharges Hughes and his successors and assigns
(collectively “Hughes Releasees”) of and from 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 Hughes’ employment by Alion, which Alion has or ever had against Hughes Releasees; and



     (ii) Without limitation, any and all claims known or unknown as of the date of execution of
this Agreement for tortious injury, breach of contract, all claims for slander, libel, or
defamation of character, and all claims for punitive damages, attorneys’ fees, or costs, as related
to Hughes’ employment by Alion.



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     (b) It is agreed and understood that this release is a GENERAL RELEASE to be construed in the
broadest possible manner consistent with applicable law.



     (c) Alion acknowledges and agrees that it:



     (i) has not filed or pursued any claim released hereby against any Hughes Releasee by filing a
lawsuit in any local, state or federal court for or on account of anything which has occurred up to
the present time as a result of Hughes’ employment; and



     (ii) has been and is advised to consult an attorney regarding this Agreement prior to
executing it and that he has been given sufficient time to do so; and



     (iii) has received full and adequate consideration for this General Release; and



     (iv) fully understands and acknowledges the significance and consequences of this Agreement.



     5. SURVIVAL OF PROVISIONS OF SEPARATION AGREEMENT



     Paragraphs 4 (General Release by Employee), 5 (Nondisclosure of Information; Return of
Property), 6 (No Detrimental Communications), 7 (Future Assistance) and 8 (Non-Competition;
Non-Solicitation) of the Separation Agreement shall continue in full force and effect. Paragraphs
9 through 16 of the Separation Agreement shall continue in full force and effect to the extent they
relate to enforcement of Paragraphs 5, 6, 7, 8 or 9 (other than the last clause of the last
sentence of Paragraph 9) of the Separation Agreement.



     6. GOVERNING LAW; SEVERABILITY



     This Agreement is entered into and shall be construed under the laws of the Commonwealth of
Virginia. In the event any provision of this Agreement is determined to any extent to be illegal
or unenforceable by a duly authorized court of competent jurisdiction, then the illegal or
unenforceable provision shall be severed from this Agreement. In the event of such severance, the
remainder of this Agreement shall not be affected thereby, and each remaining provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.



     7. WAIVERS



     The failure of either party to require the performance of any term or obligation of this
Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation and shall not be deemed a waiver of any
subsequent breach.



     8. AMENDMENTS



     This Agreement may be modified or amended, in whole or in part, only by the mutual agreement
of the parties in writing.



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     9. NO OTHER INDUCEMENTS



     This Agreement sets forth the entire understanding of the parties in connection with the
subject matter hereof. Any and all prior negotiations or discussion, either oral or written, are
merged into this Agreement. Neither of the parties has made any settlement, representation or
warranty in connection herewith (except those expressly set forth in this Agreement) which has been
relied upon by the other party, or which acted as an inducement for the other party to enter into
this Agreement.



     10. PERSONS BOUND BY AGREEMENT



     This Agreement shall be binding upon and inure to the benefit of Hughes and the Releasees and
the Hughes Releasees and their respective successors.



     11. ASSIGNMENT OF INTERESTS



     Hughes warrants that he has not assigned, transferred or purported to assign or transfer any
claim against the Releasees.



     12. PREVAILING PARTY ENTITLED TO FEES



     In the event that any action or proceeding is initiated to enforce or interpret the provisions
of this Agreement, or to recover for a violation of the Agreement, the prevailing party in any such
action or proceeding shall be entitled to its costs (including reasonable attorneys’ fees and
disbursements).



     13. CONFIDENTIALITY



     Hughes agrees to keep confidential, and not to disclose to any person or entity, the terms or
conditions of this Agreement, except to his attorney, financial advisors and members of his
immediate family, provided they agree to keep confidential such terms and conditions. In the event
that Hughes believes he is compelled by law to divulge the terms or conditions of this Agreement,
he will notify Alion’s Law Department of the basis for that belief before actually divulging the
information. Hughes hereby confirms that, as of the date of this Agreement, he has not disclosed
the terms or conditions of this Agreement, except as otherwise provided in this Agreement. Alion
also agrees to keep confidential, and not to disclose, the terms and conditions of this Agreement
outside of Releasees, its attorneys and consultants, unless Company is otherwise required to
disclose such terms and conditions by operation of law or request by a governmental agency, or as
required by any federal or state securities laws or regulations.



     IN WITNESS WHEREOF, the parties hereby agree to the terms and conditions of this Agreement as
set forth above.



   EMPLOYEE:




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John M. Hughes
	 	 
	 	Date: October 23, 2008
	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	John M. Hughes	 	 	 	 	 	 






ALION SCIENCE AND TECHNOLOGY CORPORATION:




	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ James C. Fontana
 

James C. Fontana
	 	 
	 	Date: October 24, 2008
	 	 
	 

	 	Senior VP and General Counsel	 	 	 	 	 	 









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