**EXHIBIT10.4**

 

**STANLEY,INC.CHANGE IN CONTROL SEVERANCE AGREEMENT**

 

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

 

**RECITALS**

 

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

 

**WHEREAS**, the Executive has made and is expected to make asignificant contribution to the profitability, growth, and financial strengthof the Company; and

 

**WHEREAS**, it is in the best interests of the Company and itsstockholders to reinforce and encourage the continued attention and dedicationof management personnel, including the Executive, to their assigned dutieswithout distraction and to ensure the continued availability to the Company ofthe Executive in the event of a Change in Control (as defined below);

 

**NOW**, **THEREFORE**, inconsideration of the Executive’s continued service to the Company and themutual agreements herein contained, and for other good and valuableconsideration, the receipt of which are hereby acknowledged, the Company andthe Executive hereby agree as follows:

 

# **ARTICLE I**Term of Agreement

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

 

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# **ARTICLE II**Definitions

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

 

## 2.1.                              “**Base Salary**” means the annual basesalary in effect for the Executive immediately prior to a Change in Control, assuch salary may be increased from time to time during the Term (in which casesuch increased amount shall be the Base Salary for purposes hereof), butwithout giving effect to any reduction thereto.

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## 2.2.                              “**Board**” means the Board of Directorsof the Company.

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

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### (a)                                  the Executive’sconviction of a felony (except for a motor vehicle violation) or entering intoa guilty plea or plea of *nolo contendere*with respect to such crime;

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

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### (c)                                  the Executive’sengaging in fraud or dishonesty relating to Executive’s employment, or otherwillful misconduct or gross negligence of the Executive, which conduct ismaterially injurious to the Company or its reputation, monetarily or otherwise;or

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### (d)                                 the Executive’swillful violation of Company policies, which conduct is materially injurious tothe Company or its reputation, monetarily or otherwise.

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## 2.4.                              “**Change in Control**” means and shall bedeemed to have occurred as of the date of the first to occur of the followingevents:

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

 

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

 

(b)                                 any Person or Group acquires (or hasacquired during the 12-month period ending on the date of the most recentacquisition by such Person or Group) ownership of stock of the Companypossessing 30% or more of the total voting power of the stock of the Company;

 

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

 

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

 

(i)                                     A stockholder of theCompany (immediately before the asset transfer) in exchange for or with respectto its stock;

 

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

 

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

 

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

 

Forthesepurposes,theterm“Person”shallmeananindividual,company,association,joint-stockcompany,businesstrustorothersimilar organization, partnership, limited liability company, joint venture,trust, unincorporated organization or government or agency, instrumentality orpolitical subdivision thereof.  The term “Group”shall have the meaning set forth in Rule13d-5of the Securities and Exchange Commission (“SEC”), modified to the extentnecessary to comply with Treasury Regulation Section 1.409A-3(i)(5), orany successor thereto in effect at the time a determination of whether a Changein Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered toeffectively control the Company as described in subsections (b) or (c) above,the acquisition of additional control by the same Person or Persons is notconsidered to cause a Change in Control.

 

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

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

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## 2.7.                              “**Date of Termination**” has themeaning set forth in Section 3.2.

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## 2.8.                              “**Disability**” means total andpermanent disability of the Executive as a result of bodily injury, disease ormental disorder which results in the Executive’s entitlement to long-termdisability benefits under the Company’s long-term disability plan.

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## 2.9.                              “**Executive**” means the individualnamed in the first paragraph of this Agreement.

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## 2.10.                        “**Fair Market Value**”. means thearithmetic mean of the highest and lowest sales prices of the stock as reportedon the consolidated tape for securities listed on the New York Stock Exchange (“NYSE”)on a particular date.  In the event thatthere are no stock transactions on such date, the Fair Market Value shall bedetermined by utilization of the above formula as of the immediately precedingdate on which there were stock transactions.

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

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### (a)                                  a materialdiminution in the Executive’s Base Salary;

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### (b)                                 a materialdiminution in the Executive’s authority, duties or responsibilities;

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### (c)                                  a materialdiminution in the authority, duties or responsibilities of the supervisor towhom the Executive is required to report, including a requirement that theExecutive report to a corporate officer or employee instead of directly to theBoard (if the Executive previously reported directly to the Board);

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### (d)                                 a materialdiminution in the budget over which the Executive retains authority;

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

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

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### (f)                                   any otheraction or inaction that constitutes a material breach by the Company of anywritten agreement between the Company and the Executive pursuant to which theExecutive provides services.

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In order for the Executive’s termination to be deemedto be for Good Reason, the Executive must deliver Notice of Termination to theCompany describing the event(s) alleged to constitute Good Reason within90 days of the occurrence of such event(s). Such Notice of Termination shall specify the Executive’s Date ofTermination, which date shall not be earlier than 30 days nor more than 60 daysafter the date of the Notice of Termination. The Company may fully correct the event(s) constituting Good Reasonwithin a reasonable period of time (not less than 30 days) specified in theNotice of Termination, in which case the Executive’s Notice of Termination forGood Reason shall automatically be withdrawn and of no effect; provided,however, that no opportunity to correct shall be available for any Good Reasonevent which recurs after a prior correction by the Company.  The Executive’s continued employment shall notconstitute consent to, or a waiver of rights with respect to, any act orfailure to act constituting Good Reason hereunder prior to 90 days after suchaction or failure to act.

 

## 2.12.                       “**Notice of Termination**” has themeaning set forth in Section 3.2.

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

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### (a)                                 the Companyenters into an agreement, the consummation of which would result in theoccurrence of a Change in Control;

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### (b)                                the Companypublicly announces an intention to take or to consider taking actions which, ifconsummated, would constitute a Change in Control;

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### (c)                                 any Personbecomes the beneficial owner, directly or indirectly, of securities of theCompany representing 20% or more of either the then outstanding shares ofcommon stock of the Company or the combined voting power of the Company’s thenoutstanding securities; or

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### (d)                                the Boardadopts a resolution to the effect that, for purposes of this Agreement, aPotential Change in Control has occurred.

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## 2.14.                       “**Potential Change in Control Period**”shall commence upon the occurrence of a Potential Change in Control and shalllapse upon the occurrence of a Change in Control or, if earlier (a) withrespect to a Potential Change in Control occurring pursuant to Section 2.13(a);immediately upon the abandonment or termination of the applicable agreement; (b) withrespect to a Potential Change in Control occurring pursuant to Section 2.13(b),immediately upon a public announcement by the Company that it has abandoned itsintention to take or consider taking actions which, if consummated, wouldresult in a Change in Control; or (iii) with respect to a Potential Changein Control occurring pursuant to Section 2.13(c) or (d), upon the oneyear 

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## anniversary of theoccurrence of a Potential Change in Control (or, in the case of a PotentialChange in Control occurring pursuant to Section 2.13(d), such earlier dateas may be determined by the Board).  Inaddition to the foregoing, any termination of an Executive by the Company atthe request of a third party in contemplation of a Change in Control orPotential Change in Control shall be deemed to have occurred within a PotentialChange in Control Period.

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

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## 2.16.                        “**Term**” means the period of timedescribed in Article I (including any extension, continuation ortermination described therein).

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# **ARTICLE III**Termination of Employment

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

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### (a)                                  The Executivevoluntarily resigns or retires from employment other than timely resignationfor Good Reason;

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### (b)                                 The Executiveis terminated for Cause;

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### (c)                                  The Executive’semployment terminates as a result of death or Disability; or

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### (d)                                 The Executivedeclines to sign and return the Release Agreement set forth in Exhibit Ahereto, or revokes such Release Agreement within the time provided therein.

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## 3.2.                              **Noticeof Termination**.  After aChange in Control or Potential Change in Control, any purported termination ofthe Executive’s employment (other than by reason of death) shall becommunicated by written Notice of Termination from one party hereto to theother party in accordance with Section 7.4.  For purposes of this Agreement, a “Notice ofTermination” shall mean a written notice which shall indicate the specifictermination provision in this Agreement relied upon and shall set forth inreasonable detail any facts and circumstances claimed to provide a basis fortermination of the Executive’s employment under the provision soindicated.  The “Date of Termination,”with respect to any purported termination of the Executive’s employment underthis Agreement shall mean the date specified in the Notice of 

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

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## 3.3.                              **ExclusiveSource of Severance Compensation and Benefits**.  If the Executive becomes entitled toseverance compensation and benefits under this Agreement, he or she shall notbe entitled to receive any severance compensation or benefits under any otheremployment agreement to which the Company is a party, or under any severanceprogram or policy of the Company.

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## 3.4.                              **OtherTerminations**.  ThisAgreement does not apply to terminations of employment that occur prior to aChange in Control or after the expiration of 24 months after a Change inControl and also outside of a Potential Change in Control Period.

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# **ARTICLE IV**Severance Benefits

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## 4.1.                              **SeveranceBenefits**.  If, duringthe term of this Agreement, the Executive incurs a qualifying termination asdescribed in Section 3.1 above, then, subject to the Executive timelyexecuting and delivering the Release Agreement to the Company (except in thecase of payments under (a) below), which Release Agreement has not beenrevoked in accordance with the terms thereof, the Executive shall be entitledto the following compensation and benefits, subject to applicable income andemployment tax withholding:

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

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### (b)                                 Annual BonusCompensation.  An amountequal to the highest annual bonus payment paid to the Executive for the priorthree years multiplied by a fraction, the numerator of which is the number ofdays in the one year performance measurement period through the Date ofTermination and the denominator of which is 365.

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### (c)                                  Cash Severance.  An amount equal to two****multipliedby the sum of the following amounts:

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#### (i)                                     The Executive’sBase Salary; plus

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#### (ii)                                  The highestannual bonus payment paid to the Executive for the prior three years.

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

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### Date of Termination (subject to such modificationsas shall be established for all employees of the Company) until the earliestof:

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#### (i)                                     the secondanniversary of the Date of Termination;

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#### (ii)                                  the date theExecutive first breaches the Release Agreement or any restrictive covenanthereunder or in any employment or other agreement with the Company whichsurvives termination of the Executive’s employment; or

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#### (iii)                               the date theExecutive becomes eligible under a similar welfare benefit plan of a successoremployer.

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

 

### (e)                                  OutstandingEquity Awards.  Any and alloutstanding unvested equity awards held by the Executive as of the Date ofTermination shall automatically vest  andbe deemed exercisable and/or vested, as the case may be.  Notwithstanding the foregoing, anyperformance-based equity awards held by the Executive as of the Date of Terminationshall vest and be exercisable and/or paid to the Executive as and to the extentprovided in the applicable award agreement or plan document.  For the avoidance of doubt, this Agreementshall be deemed to be an “Employment Agreement” as defined under the Company’sequity incentive plan(s) and the applicable award agreements thereunder.

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### (f)                                    Perquisites.  Continuation of all perquisites and otherpersonal benefits in effect as of the Date of Termination (subject to suchmodifications as shall be established for all employees and/or executives ofthe Company) until the earliest of:

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#### (i)                                     the secondanniversary of the Date of Termination;

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#### (ii)                                  the date theExecutive first breaches the Release Agreement or any restrictive covenanthereunder or in any employment or other agreement with the Company whichsurvives termination of the Executive’s employment; or

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#### (iii)                               the date theExecutive becomes eligible for similar perquisites or other personal benefitsof a successor employer.

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## 4.2.                              **Paymentof Severance Compensation**.  Except as provided in Section 4.3 below,the cash payments described in Section 4.1(a) shall be made withinthe time provided by law.   

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

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## 4.3.                              **Compliancewith Code Section 409A**.  Each of the payments under Section 4.1(b),(c), (d) and (f) above are designated as separate payments forpurposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F),the exemption for involuntary terminations under separation pay plans underTreasury Regulation Section 1.409A-1(b)(9)(iii), and the exemption formedical expense reimbursements under Treasury Regulation Section 1.409A-1(b)(9)(v)(B).  As a result, (a) any payments thatbecome vested as a result of the qualifying termination under Section 3.1that are made on or before the 15th day of the third month of the calendar yearfollowing the calendar year of the Executive’s termination, (b) anyadditional payments that are made on or before the last day of the secondcalendar year following the year of the Executive’s termination and do notexceed the lesser of two times Base Salary or two times the limit under Code Section 401(a)(17)then in effect, and (c) the payment of medical expenses within the applicableCOBRA period, are exempt from the requirements of Code Section 409A.  As Executive is designated as a “specifiedemployee” within the meaning of Code Section 409A, to the extent that anydeferred compensation payments to be made during the first six month periodfollowing Executive’s termination of employment exceed such exempt amounts, thepayments shall be withheld and the amount of the payments withheld will be paid in a lump sum, withoutinterest, during the seventh month after Executive’s termination.  The Company shall identify in writingdelivered to the Executive any payments it reasonably determines are subject todelay under this Section 4.3.  In noevent shall the Company have any liability or obligation with respect to taxesfor which the Executive may become liable as a result of the application ofCode Section 409A.

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## 4.4.                              **NoMitigation Required**.  TheExecutive is not required to seek other employment or to attempt in any way toreduce any amounts payable to the Executive by the Company hereunder.  Except as set forth in Section 4.1(d) and(f), the amount of any payment or benefit provided for in this Agreement shallnot be reduced by any compensation earned by the Executive as the result ofemployment by another employer, by retirement benefits, by offset against anyamount claimed to be owed by the Executive to the Company,****orotherwise.

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# **ARTICLE V**Parachute Tax Payments

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

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

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

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### (b)                                 Unless theCompany and the Executive otherwise agree in writing, any determinationrequired under this Article V shall be made in writing by nationallyrecognized independent public accountants agreed to by the Company andExecutive (the “Accounting Firm”), whose determination shall be conclusive andbinding upon Executive and the Company for all purposes.  For purposes of making the calculationsrequired by this Article V, the Accounting Firm may make reasonableassumptions and approximations concerning applicable taxes and may rely onreasonable, good faith interpretations concerning the application of Sections280G and 4999 of the Code.  The Companyand the Executive shall furnish to the Accounting Firm such information anddocuments as the Accounting Firm may reasonably request in order to make adetermination hereunder. The Company shall bear all costs the Accounting Firmmay reasonably incur in connection with any calculations contemplatedhereunder.  The Accounting Firm shall berequired to provide its determination within 60 days after the date of theExecutive’s Date of Termination, and the Company shall be responsible for anyincome tax, penalty or interest liability incurred as a result of delay by theAccounting Firm.

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

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## 5.2.                              **Adjustmentof Gross-Up Payment**.  Thefederal tax returns filed by the Executive (and any filing made by aconsolidated tax group which includes the Company) shall be prepared and filedon a basis consistent with the determination of the Accounting Firm withrespect to the Parachute Tax payable by the Executive.  The Executive shall make proper payment ofthe amount of any Parachute Tax based on the determination of the AccountingFirm 

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## under Section 5.1, andat the request of the Company, provide to the Company true and correct copies(with any amendments) of his federal income tax return as filed with theInternal Revenue Service and such other documents reasonably requested by theCompany evidencing such payment, provided that any information unrelated to theParachute Tax may be deleted from the copies of the returns and documentsdelivered to the Company.  If, after theCompany’s payment to the Executive of the Gross-Up Payment, the Accounting Firmdetermines in good faith that the amount of the Gross-Up Payment should bereduced or increased, or a determination is made by the Internal Revenue Servicethat would make the prior Gross-Up Payment amount inaccurate, then, within tenbusiness days of such determination, the Executive shall pay to the Company theamount of any such reduction, or the Company shall pay to the Executive theamount of any such increase.  Thefollowing provisions apply for purposes of this Section 5.2:

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

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### (b)                                 If theExecutive has paid Parachute Tax to the Internal Revenue Service prior to anyredetermination by the Accounting Firm reducing the amount of Gross-up Paymentotherwise due, refund by the Executive shall be due only to the extent that arefund of such amount is received by the Executive from the Internal RevenueService.

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### (c)                                  The Executiveshall provide the Company prompt notice of any claim by or other correspondencefrom the Internal Revenue Service relating to the amount of Parachute Tax andwill provide the Company with a reasonable opportunity to contest any claim forParachute Tax.  The Executive will takesuch action in connection with contesting such claim as the Company shallreasonably request in writing from time to time, including without limitationaccepting legal representation with respect to such claim by an attorneycompetent in respect of the subject matter and reasonably selected by theCompany; provided, however, that the Company will bear and pay directly allcosts and expenses (including interest and penalties) incurred in connectionwith such contest and will indemnify and hold harmless the Executive, on anafter-tax basis, for and against any Parachute Tax or income tax, includinginterest and penalties with respect thereto, imposed as a result of suchcontest and any such payments.  If theCompany directs Executive to pay the tax claimed, or otherwise fails to contestthe claim as described above, the Company will immediately pay to Executive theamount of the required deficiency payment, including any Parachute Tax orincome tax, and interest and penalties with respect thereto.  All reimbursements hereunder shall be made assoon as possible after Executive incurs the expense and presents evidence ofsuch expense reasonably acceptable to the Company, but in no event later thanthe end of the calendar year following the year in which the expense isincurred.

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### (d)                                 Notwithstandinganything to the contrary herein, the Executive’s rights under this Article Vshall survive the termination of his employment for any reason and thetermination or expiration of this Agreement for any reason.

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# **ARTICLE VI**Executive’s Restrictive Covenants

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

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## 6.2.                              **Returnof Company Property**.  Upondemand by the Company and/or upon termination of his employment with theCompany for any reason, the Executive shall promptly deliver to the Company allproperty and materials, whether written, descriptive, or maintained in someother form belonging to or relating to the Company or its business affairs,including correspondence, manuals, notes, notebooks, reports, programs, plans,proposals, financial documents, or any other documents concerning the Company’scustomers, suppliers, business plans, designs, marketing or other businessstrategies, products or processes, but excluding materials distributed toemployees of the Company generally and relating to the Executive’s rights andobligations as an employee or former employee of the Company.  The Executive shall also return anyautomobile, computers and peripherals, cellular telephones, pagers and otherphysical property or equipment provided by the Company to the Executive inconnection with his employment with the Company.

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

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

 

# **ARTICLE VII**Miscellaneous

# ** **

## 7.1.                              **LitigationExpenses**.  In theevent of any litigation or other dispute between the Company and the Executivewith respect to the subject matter of this Agreement, the Executive shall beentitled to recover his attorney fees and expenses, unless the Executive doesnot substantially prevail in such matter.

##  

## 

##  

## 7.2.                              **EntireUnderstanding**.  ThisAgreement contains the entire understanding between the Company and theExecutive with respect to the subject matter hereof and supersedes any priorseverance or change in control agreement and amendment thereto between theCompany and the Executive; except that this Agreement shall not affect oroperate to reduce any benefit or compensation inuring to the Executive of akind elsewhere provided and not expressly provided in this Agreement.

##  

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

##  

## 7.4.                              **Notices**.  All notices, requests, demands and othercommunications required or permitted hereunder shall be given in writing andshall be deemed to have been duly given if delivered or mailed, postageprepaid, first class as follows:

##  

To the Company:

 

Stanley, Inc.

3101 Wilson Boulevard

Arlington, VA  22201

Attention:  General Counsel

 

To the Executive:

 

The Executive’s addresson file with the Company

 

or tosuch other address as either party shall have previously specified in writingto the other.

 

## 7.5.                              **NoAttachment**.  Except asrequired by law, no right to receive payments under this Agreement shall besubject to anticipation, commutation, alienation, sale, assignment,encumbrance, charge, pledge, or hypothecation or to execution, attachment,levy, or similar process or assignment by operation of law, or any attempt,voluntary or involuntary, to effect any such action shall be null, void and ofno effect.

##  

## 7.6.                              **BindingAgreement**.  ThisAgreement shall be binding upon, and shall inure to the benefit of, theExecutive and the Company and their respective permitted successors andassigns.

##  

## 7.7.                              **Modificationand Waiver**.  ThisAgreement may be modified or amended only by an instrument in writing signed byeach of the parties.  Except as otherwiseprovided in Section 2.11, no term or condition of this Agreement shall bedeemed to have been waived, nor shall there be any estoppel against theenforcement of any provision of this Agreement, except 

##  

## 

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## by written instrument signedby the party charged with such waiver or estoppel.  No such written waiver shall be deemed acontinuing waiver unless specifically stated therein, and any waiver shalloperate only as to the specific term or condition waived and shall notconstitute a waiver of such term or condition for the future or as to any actother than that specifically waived.

##  

## 7.8.                              **Headings**.  The headings contained in this Agreement areincluded solely for convenience and shall not in any way affect the meaning orinterpretation of any of the provisions of this Agreement.

##  

## 7.9.                              **GoverningLaw**.  This Agreement and itsvalidity, interpretation, performance, and enforcement shall be governed by thelaws of the Commonwealth of Virginia, without regard to the choice of lawprovisions thereof.

##  

**INWITNESS WHEREOF**,the Company has caused this Agreement to be executed by its officers thereuntoduly authorized, and the Executive has signed this Agreement, all as of thedate first above written.

 
|   | **STANLEY, INC.**                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------|
|   |                                                                                                      |
|   |                                                                                                      |
|   |               /s/  Scott D. Chaplin |
|   | By:                                                                                                       | Scott D. Chaplin |
|   | Its:                                                                                                      | General Counsel |
|   |                                                                                                      |
|   |                                                                                                      |
|   | **EXECUTIVE**                                                                                             |
|   |                                                                                                      |
|   |                                                                                                      |
|   |               /s/  George H. Wilson |
|   | George H. Wilson                                                                                          |

 

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** **

**EXHIBIT A**

** **

Date

 

Re: Separation andRelease Agreement

 

Dear :

 

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

 

Your resignation fromSTANLEY’s employ will be effective                    ,        .  After you execute and return this Agreementto the Company, which you acknowledge may not be executed prior to your lastday of actual work, the Company will provide you with severance payments andbenefits to the extent provided by that certain Change in Control SeveranceAgreement between you and the Company dated as of June 26, 2008.

 

In exchange for theCompany providing you with the aforementioned severance payments and benefits,you hereby waive all claims against the Company and unconditionally and irrevocablyrelease and discharge the Company from liability for any claims or damages thatyou have or may have against it, its current and former directors, officers,employees, agents and assigns up to the moment this Agreement becomes fullyexecuted, regardless of whether those claims are known or unknown including,but not limited to, any claims for wages, severance (except as specificallyprovided for herein), bonuses or benefits (except as specifically provided forherein), or any other claims whatsoever arising during or, in whole or in part,out of your employment relationship with the Company, or violations of anyfederal, state or local fair employment statute, executive order, ordinance,law or regulation, including Title VII of the Civil Rights Act, theRehabilitation Act of 1973, the Americans With Disabilities Act, the AgeDiscrimination in Employment Act, as amended by the Older Workers’ BenefitProtection Act, the Employee Retirement Income Security Act of 1974, asamended, or any other potentially applicable employment or labor law, or anyother rule of law or common law including, but not limited to thoseconcerning possible torts, express or implied contract, the implied covenant ofgood faith and fair dealing, public policy, or other obligations. Other thanwith respect to any rights which cannot be waived by law, including but notlimited to the right to file certain charges with, or participate in, aninvestigation conducted by any governmental agency that expressly prohibitswaiver relative to same, you also agree not to initiate any administrative orlegal action against the Company to assert such claims.  Moreover, to the extent any such action isbrought by you or on your behalf by any third party, you agree to waive allclaims to monetary relief or damages of any kind, including attorneys’ fees andcosts. You understand that the fact of this agreement and/or the agreement topay or the payment of the consideration described herein does not constitute anadmission by the Company that it has violated any such law or legal obligation.

 

You acknowledge that youmay take up to [21/45] days to consider the terms of this Agreement.  You also acknowledge that you were advised bySTANLEY to discuss the terms of this Agreement with your attorneys prior tosigning this Agreement.  You furtheracknowledge that 

 

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you are entering intothis Agreement, freely, knowingly, and voluntarily, with a full understandingof its terms and that you will have seven days to revoke this Agreement afterexecuting the same by notifying the undersigned in writing during thisseven-day period.  Except as set forthherein, this constitutes the entire agreement between us regarding the subjectmatter hereof.  This Agreement may not bechanged or altered, except by a writing signed by you and the Company.  This Agreement is entered into in theCommonwealth of Virginia and the laws of the Commonwealth of Virginia willapply to any dispute concerning it, without regard to its conflicts of lawprovisions.  If any clause of thisAgreement should ever be determined to be unenforceable, it is agreed that thiswill not affect the enforceability of any other clause or the remainder of thisAgreement.

 

Sincerely,

 

 
| STANLEY, INC.        |
|----------------------|
|                 |
| By:                  |   |   |
|                 |
| Title:               |   |   |
|                 |
| Date:                |   |   |
|                 |
|                 |
| AGREED AND ACCEPTED: |
|                 |
|                 |
|                 |   |
|                 |   |
| Date:                |   |   |
|                      |  |  |  |  |  |

 

 

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

 

 

Notary Public

 

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**EXHIBIT B**

 

**FORM OFNONCOMPETITION AGREEMENT**

 

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

 

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

 

**WHEREAS**, the Company and the Executive agreethat, in connection with the execution of the Change in Control Agreement andthe Executive’s continued employment, the Executive will not engage incompetition with the Company pursuant to the terms and conditions hereof;

 

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

 

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

 

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

 

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

 

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claim or cause of actionbased upon or arising out of this Agreement or any dealings between themrelating to the subject matter of this Agreement.

 

**3.  Attorneys Fees**. If any legal action, arbitration or other proceeding is brought for theenforcement of this Agreement, or because of an alleged dispute, breach ordefault in connection with any of the provisions of this Agreement, theprevailing party shall be entitled to recover reasonable attorneys’ fees andother costs incurred in that action or proceeding, including any appeal of suchaction or proceeding, in addition to any other relief to which that party maybe entitled.

 

**4.   Survival**. This Agreement shall survive the termination of Executive’s employmentand the assignment of this Agreement by the Company to any successor to theirrespective business.

 

**5.   Severability**. Any provision of this Agreement which is deemed invalid, illegal orunenforceable in any jurisdiction shall, as to that jurisdiction and subject tothis paragraph, be ineffective to the extent of such invalidity, illegality orunenforceability, without affecting in any way the remaining provisions hereofin such jurisdiction or rendering that any other provisions of this Agreementinvalid, illegal or unenforceable in any other jurisdiction. If any covenant shouldbe deemed invalid, illegal or unenforceable because its scope is consideredexcessive, such covenant shall be modified so that the scope of the covenant isreduced only to the minimum extent necessary to render the modified covenantvalid, legal and enforceable.

 

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

 

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

 

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

 

**9.  Notice**.   Each partyhereto must deliver all notices or other communications required or permittedunder this Agreement in writing to the other parties in accordance with thenotice provisions set forth in Section 7.4 of the Change in ControlAgreement.

 

**10.  Waiver**.  Any waiver orfailure to enforce any provision of this Agreement on one occasion will not bedeemed a waiver of that provision or any other provision on any other occasion.

 

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

 

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

 

 

**INWITNESS WHEREOF**,the parties have executed this Agreement as of the date and year first abovewritten.

 

 
|   | **STANLEY,  INC.** |
|--------|--------------------|
|   |               |
|   |               |
|   | By:                |   |
|   |               |     Name: |
|   |               |     Title: |
|   |               |
|   |               |
|   | **EXECUTIVE**      |
|   | ** **         |
|   | ** **         |
|   | ** **         |

 

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