**EXHIBIT10.9**

 

**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 Scott D. Chaplin (the “Executive”).

 

**RECITALS**

 

**WHEREAS**, the Company considersthe establishment and maintenance of a sound and vital management to beessential to protecting and enhancing the best interests of the Company and itsstockholders; and

 

**WHEREAS**, the Executive has madeand is expected to make a significant contribution to the profitability,growth, and financial strength of the Company; and

 

**WHEREAS**, it is in the bestinterests of the Company and its stockholders to reinforce and encourage thecontinued attention and dedication of management personnel, including theExecutive, to their assigned duties without distraction and to ensure thecontinued availability to the Company of the Executive in the event of a Changein Control (as defined below);

 

**NOW**, **THEREFORE**,in consideration 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’s willfuland 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’s willfulviolation of Company policies, which conduct is materially injurious to theCompany 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)           anyPerson or Group (each term as defined below) acquires stock of the Companythat, together with stock held by such Person or Group, constitutes more than50% of the total Fair Market Value (as defined below) or total voting power ofthe stock of the Company.  However, ifany Person or Group is considered to own more than 50% of the total Fair MarketValue or total voting power of the stock of the Company, the acquisition ofadditional stock by the same Person or Group is not considered to cause aChange in Control of the Company.  Anincrease in the percentage of stock owned by any Person or Group as a result ofa transaction in which the Company acquires its stock in exchange for propertywill be treated as an acquisition of stock for purposes of thissubsection.  This subsection applies onlywhen there is a transfer 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)           anyPerson or Group acquires (or has acquired during the 12-month period ending onthe date of the most recent acquisition by such Person or Group) ownership ofstock of the Company possessing 30% or more of the total voting power of thestock of the Company;

 

(c)           amajority of members of the Company’s Board is replaced during any 12-monthperiod by Directors whose appointment or election is not endorsed by a majorityof the members of the Company’s Board prior to the date of the appointment orelection; or

 

(d)           anyPerson or Group acquires (or has acquired during the 12-month period ending onthe date of the most recent acquisition by such Person or Group) assets fromthe Company that have a total gross fair market value equal to or more than 40%of the total gross fair market value of all of the assets of the Companyimmediately prior to such acquisition or acquisitions.  For this purpose, gross fair market valuemeans the value of the assets of the Company, or the value of the assets beingdisposed of, determined without regard to any liabilities associated with suchassets.   However, no Change in Controlshall be deemed to occur under this subsection (d) as a result of atransfer to:

 

(i)            A stockholder of the Company (immediately before theasset transfer) in exchange for or with respect to its stock;

 

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

 

(iii)          A Person or Group that owns, directly or indirectly, 50% or more of thetotal value or voting power of all the outstanding stock of the Company; or

 

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

 

For these purposes, the term “Person” shallmean an individual, company, association, joint-stock company, business trustor other similar organization, partnership, limited liability company, jointventure, trust, unincorporated organization or government or agency,instrumentality or political subdivision thereof.  The term “Group” shall have themeaning set forth in Rule13d-5 of theSecurities and Exchange Commission (“SEC”), modified to the extent necessary tocomply with Treasury Regulation Section 1.409A-3(i)(5), or any successorthereto in effect at the time a determination of whether a Change in Controlhas occurred is being made.  If any onePerson, or Persons acting as a Group, is considered to effectively control theCompany as described in subsections (b) or (c) above, the acquisitionof additional control by the same Person or Persons is not considered to causea 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 material diminutionin the Executive’s Base Salary;

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### (b)           a material diminutionin the Executive’s authority, duties or responsibilities;

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### (c)           a material diminutionin the authority, duties or responsibilities of the supervisor to whom theExecutive is required to report, including a requirement that the Executivereport to a corporate officer or employee instead of directly to the Board (ifthe Executive previously reported directly to the Board);

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### (d)           a material diminutionin the budget over which the Executive retains authority;

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### (e)           the Company requiringthe Executive to be based at an office that is both more than 50 miles fromwhere the Executive’s office is located immediately prior to the Change inControl and also more than 50 miles from the Executive’s then-current 

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### principal place of residence, except forrequired travel on the Company’s business to an extent substantially consistentwith the business travel obligations which the Executive undertook on behalf ofthe Company prior to the Change in Control; or

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### (f)            any other action orinaction that constitutes a material breach by the Company of any writtenagreement between the Company and the Executive pursuant to which the Executiveprovides 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 Company enters intoan agreement, the consummation of which would result in the occurrence of aChange in Control;

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

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### (c)           any Person becomes thebeneficial owner, directly or indirectly, of securities of the Companyrepresenting 20% or more of either the then outstanding shares of common stockof the Company or the combined voting power of the Company’s then outstandingsecurities; or

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### (d)           the Board adopts aresolution to the effect that, for purposes of this Agreement, a PotentialChange 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 ofthe occurrence 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.          **Qualifying Terminations**.  If, during the Term of this Agreement andeither within 24 months after a Change in Control or within a Potential Changein Control Period, (1) the Executive’s employment is terminated by theCompany or any successor to the Company for any reason other than Cause, or (2) theExecutive terminates his employment due to Good Reason, then the Executive willbe entitled to receive the severance payments and benefits set forth in Article IVbelow; provided, however, that no severance payments shall be made, orcontinuing benefits provided, under this Agreement, if any of the followingapply:

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

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### (b)           The Executive isterminated 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 Executive declinesto 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.          **Notice of Termination**.  After a Change in Control or Potential Changein Control, any purported termination of the Executive’s employment (other thanby reason of death) shall be communicated by written Notice of Termination fromone party hereto to the other 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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## Terminationfor termination (which, in the case of a termination by the Company other thanfor Cause, shall not be less than 30 days and, in the case of a termination bythe Executive, shall not be less than 30 days nor more than 60 days,respectively, from the date such Notice of Termination is given).

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## 3.3.          **Exclusive Source of Severance Compensation andBenefits**.  If theExecutive becomes entitled to severance compensation and benefits under thisAgreement, he or she shall not be entitled to receive any severancecompensation or benefits under any other employment agreement to which theCompany is a party, or under any severance program or policy of the Company.

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## 3.4.          **Other Terminations**.  This Agreement does not apply to terminationsof employment that occur prior to a Change in Control or after the expirationof 24 months after a Change in Control and also outside of a Potential Changein Control Period.

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# **ARTICLE IV**Severance Benefits

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## 4.1.          **Severance Benefits**.  If, during the term of this Agreement, theExecutive incurs a qualifying termination as described in Section 3.1above, then, subject to the Executive timely executing and delivering theRelease Agreement to the Company (except in the case of payments under (a) below),which Release Agreement has not been revoked in accordance with the termsthereof, the Executive shall be entitled to the following compensation andbenefits, subject to applicable income and employment tax withholding:

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### (a)           Accrued Compensation.  An amount equal to the following amountsearned or accrued through the Termination Date, but not paid as of theTermination Date:  (i) Base Salary, (ii) reimbursementfor reasonable and necessary, properly-receipted expenses incurred by theExecutive on behalf of the Company during the period ending on the TerminationDate, and (iii) accrued but unused vacation pay.

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### (b)           Annual BonusCompensation.  An amount equal to thehighest annual bonus payment paid to the Executive for the prior three yearsmultiplied by a fraction, the numerator of which is the number of days in theone year performance measurement period through the Date of Termination and thedenominator 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’s Base Salary; plus

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#### (ii)           The highest annual bonus payment paid to theExecutive for the prior three years.

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### (d)           Continuation ofWelfare Benefits.  Continuation ofmedical and dental insurance coverage in which the Executive (or hisdependents) was participating as of the 

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### Date of Termination (subject to suchmodifications as shall be established for all employees of the Company) untilthe earliest of:

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#### (i)            the second anniversary of the Date ofTermination;

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#### (ii)           the date the Executive first breaches theRelease Agreement or any restrictive covenant hereunder or in any employment orother agreement with the Company which survives termination of the Executive’semployment; or

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#### (iii)          the date the Executive becomes eligible undera similar welfare benefit plan of a successor employer.

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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)           Outstanding EquityAwards.  Any and all outstandingunvested equity awards held by the Executive as of the Date of Terminationshall automatically vest  and be deemedexercisable and/or vested, as the case may be. Notwithstanding the foregoing, any performance-based equity awards heldby the Executive as of the Date of Termination shall vest and be exercisableand/or paid to the Executive as and to the extent provided in the applicableaward agreement or plan document.  Forthe avoidance of doubt, this Agreement shall be deemed to be an “EmploymentAgreement” as defined under the Company’s equity incentive plan(s) and theapplicable 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 second anniversary of the Date ofTermination;

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#### (ii)           the date the Executive first breaches theRelease Agreement or any restrictive covenant hereunder or in any employment orother agreement with the Company which survives termination of the Executive’semployment; or

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#### (iii)          the date the Executive becomes eligible forsimilar perquisites or other personal benefits of a successor employer.

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## 4.2.          **Payment of 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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## Noreimbursement of expenses under Section 4.1(a) shall be made afterthe last day of the year following the year in which the expense wasincurred.  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.          **Compliance with 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.          **No Mitigation Required**.  The Executive is not required to seek otheremployment or to attempt in any way to reduce any amounts payable to theExecutive by the Company hereunder. Except as set forth in Section 4.1(d) and (f), the amount ofany payment or benefit provided for in this Agreement shall not be reduced byany compensation earned by the Executive as the result of employment by anotheremployer, by retirement benefits, by offset against any amount claimed to beowed by the Executive to the Company,****or otherwise.

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# **ARTICLE V**Parachute Tax Payments

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## 5.1.          **Gross-Up for ParachutePayments**.  If any paymentor distribution by the Company (or any of its affiliates) to or for the benefitof the Executive, whether paid or payable or distributed or distributable underthis Agreement or under any other agreement, policy, plan, program orarrangement, or the lapse or termination of any restriction under anyagreement, policy, plan, program or arrangement (a “Payment”), would be subjectto the excise tax imposed by Section 4999 of the Code by reason of beingconsidered “contingent on a change in ownership or control” of the Companywithin the meaning of Section 280G of the Code, or to any similar taximposed by state or local law, or any interest or penalties with respect tosuch tax 

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## (such tax or taxes, together with any suchinterest and penalties, being hereafter collectively referred to as the “ParachuteTax”), then Executive will be entitled to receive an additional payment orpayments (collectively, a “Gross-Up Payment”). The Gross-Up Payment will be in an amount such that, after payment byExecutive of all taxes (including any interest or penalties imposed withrespect to such taxes), including any Parachute Tax imposed upon the Gross-UpPayment, Executive retains an amount of the Gross-Up Payment equal to theParachute Tax imposed on the Payment. The following provisions shall apply in determining whether a Gross-UpPayment shall apply:

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### (a)           Notwithstanding anyother provision of this Section 5.1, if no Parachute Tax would apply ifthe aggregate Payments were reduced by 10%, then the aggregate Payments shallbe reduced by the amount necessary to avoid application of the Parachute Tax,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 the Company andthe Executive otherwise agree in writing, any determination required under thisArticle V shall be made in writing by nationally recognized independentpublic accountants agreed to by the Company and Executive (the “Accounting Firm”),whose determination shall be conclusive and binding upon Executive and theCompany for all purposes.  For purposesof making the calculations required by this Article V, the Accounting Firmmay make reasonable assumptions and approximations concerning applicable taxesand may rely on reasonable, good faith interpretations concerning theapplication of Sections 280G and 4999 of the Code.  The Company and the Executive shall furnishto the Accounting Firm such information and documents as the Accounting Firmmay reasonably request in order to make a determination hereunder. The Companyshall bear all costs the Accounting Firm may reasonably incur in connectionwith any calculations contemplated hereunder. The Accounting Firm shall be required to provide its determinationwithin 60 days after the date of the Executive’s Date of Termination, and theCompany shall be responsible for any income tax, penalty or interest liabilityincurred as a result of delay by the Accounting Firm.

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### (c)           If the Accounting Firmdetermines that no Parachute Tax is payable by the Executive, it will, at thesame time as it makes such determination, furnish the Company and the Executivea non-reliance opinion that the Executive has a reasonable basis not to reportany Parachute Tax on his federal, state or local income or other taxreturn.  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.          **Adjustment of Gross-Up Payment**.  The federal tax returns filed by theExecutive (and any filing made by a consolidated tax group which includes theCompany) shall be prepared and filed on a basis consistent with thedetermination of the Accounting Firm with respect to the Parachute Tax payableby the Executive.  The Executive shallmake proper payment of the amount of any Parachute Tax based on thedetermination of the Accounting Firm 

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## under Section 5.1,and at the request of the Company, provide to the Company true and correctcopies (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 event shall theExecutive have any such refund obligation if it is determined by the Companythat to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it maybe amended from time to time.

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### (b)           If the Executive haspaid Parachute Tax to the Internal Revenue Service prior to any redeterminationby the Accounting Firm reducing the amount of Gross-up Payment otherwise due,refund by the Executive shall be due only to the extent that a refund of suchamount is received by the Executive from the Internal Revenue Service.

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### (c)           The Executive shallprovide the Company prompt notice of any claim by or other correspondence fromthe Internal Revenue Service relating to the amount of Parachute Tax and willprovide 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.          **Return of Company Property**.  Upon demand by the Company and/or upontermination of his employment with the Company for any reason, the Executiveshall promptly deliver to the Company all property and materials, whetherwritten, descriptive, or maintained in some other form belonging to or relatingto the Company or its business affairs, including correspondence, manuals,notes, notebooks, reports, programs, plans, proposals, financial documents, orany other documents concerning the Company’s customers, suppliers, businessplans, designs, marketing or other business strategies, products or processes,but excluding materials distributed to employees of the Company generally andrelating to the Executive’s rights and obligations as an employee or formeremployee of the Company.  The Executiveshall also return any automobile, computers and peripherals, cellulartelephones, pagers and other physical property or equipment provided by theCompany to the Executive in connection 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**.  In consideration for the severancecompensation and continued benefits provided in Section 4.1(c), (d) and(f) above, and at the option of any potential acquirer at the time of aChange in Control, the Executive agrees to be subject to the Noncompetition Agreement attached hereto as Exhibit Bfor a period of two years following a qualifying termination asdescribed in Section 3.1 above.

 

# **ARTICLE VII**Miscellaneous

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## 7.1.          **Litigation Expenses**.  In the event of any litigation or otherdispute between the Company and the Executive with respect to the subjectmatter of this Agreement, the Executive shall be entitled to recover hisattorney fees and expenses, unless the Executive does not substantially prevailin such matter.

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## 7.2.          **Entire Understanding**.  This Agreement contains the entireunderstanding between the Company and the Executive with respect to the subjectmatter hereof and supersedes any prior severance or change in control agreementand amendment thereto between the Company and the Executive; except that thisAgreement shall not affect or operate to reduce any benefit or compensationinuring to the Executive of a kind elsewhere provided and not expresslyprovided in this Agreement.

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## 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.

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## 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:

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To the Company:

 

Stanley, Inc.

3101 Wilson Boulevard

Arlington, VA  22201

Attention:  President

 

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.          **No Attachment**.  Except as required by law, no right toreceive payments under this Agreement shall be subject to anticipation,commutation, alienation, sale, assignment, encumbrance, charge, pledge, orhypothecation or to execution, attachment, levy, or similar process orassignment by operation of law, or any attempt, voluntary or involuntary, toeffect any such action shall be null, void and of no effect.

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## 7.6.          **Binding Agreement**.  This Agreement shall be binding upon, andshall inure to the benefit of, the Executive and the Company and theirrespective permitted successors and assigns.

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## 7.7.          **Modification and Waiver**.  This Agreement may be modified or amendedonly by an instrument in writing signed by each of the parties.  Except as otherwise provided in Section 2.11,no term or condition of this Agreement shall be deemed to have been waived, norshall there be any estoppel against the enforcement of any provision of thisAgreement, except 

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## by writteninstrument signed by 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.

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## 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.

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## 7.9.          **Governing Law**.  This Agreement and its validity,interpretation, performance, and enforcement shall be governed by the laws ofthe Commonwealth of Virginia, without regard to the choice of law provisionsthereof.

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**INWITNESS WHEREOF**, the Company has caused this Agreement to beexecuted by its officers thereunto duly authorized, and the Executive hassigned this Agreement, all as of the date first above written.

 
|   | **STANLEY, INC.**                                           |
|--------|-------------------------------------------------------------|
|   |                                                        |
|   |                                                        |
|   | /s/  Philip O. Nolan                                        |
|   | By:  Philip O. Nolan                                   |
|   | Its:  Chairman,  President and Chief Executive Officer |
|   |                                                        |
|   |                                                        |
|   | **EXECUTIVE**                                               |
|   |                                                        |
|   |                                                        |
|   | /s/  Scott D. Chaplin                                       |
|   | Scott D. Chaplin                                            |

 

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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**

 

                **THIS NONCOMPETITION AGREEMENT** (this “Agreement”) is dated asof                    ,20    , by and between Stanley, Inc., a Delawarecorporation (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 have entered into aChange in Control Severance Agreement, effective as of June 26, 2008 (the “Changein Control Agreement”); and

 

                **WHEREAS**, the Company and the Executive agree that, inconnection with the execution of the Change in Control Agreement and theExecutive’s continued employment, the Executive will not engage in competitionwith the Company pursuant to the terms and conditions hereof;

 

                **NOW, THEREFORE**, in furtherance of the foregoing and inexchange for good and valuable consideration, the receipt and adequacy of whichis hereby acknowledged, the parties hereto hereby agree as follows:

 

                **1.   Noncompetition**.  (a) If the Executive incurs a qualifyingtermination as described in Section 3.1 of the Change in ControlAgreement, for two years following the qualifying termination, the Executiveshall be prohibited from engaging in Competition (as defined below) with theCompany or any of its subsidiaries.

 

                (b)  The term“Competition” for purposes of this Agreement shall mean the Executive agreesthat for the period described in section 1(a) above, Executive will not,directly or indirectly, privately or as an employee, partner, officer,director, stockholder or agent in any capacity of any other entity: (i) renderany services on the specific contracts, task orders, or other businessarrangements that Executive is or was involved in for the Company, or acquiredknowledge through access to confidential information of the Company, e.g.,pricing, pricing strategies, business pursuits, strategic objectives, and thelike, on behalf of any other person or entity; (ii) actively solicit,divert or take away, or attempt to divert or to take away, the business of anyof the clients, customers or accounts, or prospective clients with identifiedactive new business targets, customers or accounts, of the Company or anyCompany affiliate in which Executive is or was involved or acquired knowledgethrough access to such confidential information; or (iii) directly orindirectly recruit, train, supervise, or assist others to engage in anyactivities described in this paragraph.

 

                **2.  Specific Performance;Waiver of Jury Trial**.  TheExecutive acknowledges that in the event of breach by the Executive of theterms of Section 1 hereof, the Company’s remedies at law may be inadequateand the Company shall be entitled to institute legal proceedings to enforce thespecific performance of this Agreement by the Executive and to enjoin theExecutive from any further violation of Section 1 hereof and to exercisesuch remedies cumulatively or in conjunction with all other rights and remediesprovided 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 otherproceeding is brought for the enforcement of this Agreement, or because of analleged dispute, breach or default in connection with any of the provisions ofthis Agreement, the prevailing party shall be entitled to recover reasonableattorneys’ fees and other costs incurred in that action or proceeding,including any appeal of such action or proceeding, in addition to any otherrelief to which that party may be entitled.

 

                **4.   Survival**.  This Agreement shall survive the terminationof Executive’s employment and the assignment of this Agreement by the Companyto any successor to their respective business.

 

                **5.   Severability**.  Any provision of this Agreement which isdeemed invalid, illegal or unenforceable in any jurisdiction shall, as to thatjurisdiction and subject to this paragraph, be ineffective to the extent ofsuch invalidity, illegality or unenforceability, without affecting in any waythe remaining provisions hereof in such jurisdiction or rendering that anyother provisions of this Agreement invalid, illegal or unenforceable in anyother jurisdiction. If any covenant should be deemed invalid, illegal orunenforceable because its scope is considered excessive, such covenant shall bemodified so that the scope of the covenant is reduced only to the minimumextent necessary to render the modified covenant valid, legal and enforceable.

 

                **6.  Governing Law and Venue**.  This Agreement shall be governed, construed,interpreted and enforced in accordance with the laws of the Commonwealth ofVirginia, without regard to the conflict of laws principles thereof.  Executive expressly consents to personaljurisdiction and venue in the state and federal courts for the county in whichthe Company’s principal place of business is located for any lawsuit filedthere against Executive by the Company arising from or related to thisAgreement.

 

                **7.  Entire Agreement**.  This Agreement contains the entire agreementand understanding between the Company and the Executive with respect to thesubject matter hereof, and supersedes all prior agreements and understandingswith respect to the subject matter hereof, and the parties hereto have made norepresentations, promises, agreements or understandings, written or oral,relating to the subject matter of this Agreement which are not set forthherein. This Agreement shall not be changed unless in writing and signed byboth the Executive and the Company.

 

                **8.  Assignment**.  This Agreement may not be assigned by theExecutive, but may be assigned by the Company to any successor to theirrespective business and will inure to the benefit of and be binding upon anysuch successor.

 

                **9.  Notice**.   Each party hereto must deliver all noticesor other communications required or permitted under this Agreement in writingto the other parties in accordance with the notice provisions set forth in Section 7.4of the Change in Control Agreement.

 

                **10.  Waiver**.  Any waiver or failure to enforce anyprovision of this Agreement on one occasion will not be deemed a waiver of thatprovision or any other provision on any other occasion.

 

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                **11.   Counterparts**.  This Agreement may be executed in severalcounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

                **12.   The Executive’sAcknowledgment**.  TheExecutive acknowledges (a) that he has had the opportunity to consult withindependent 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.

 

                **IN WITNESS WHEREOF**, the parties have executed this Agreementas of the date and year first above written.

 

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

 

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