exv10w78



 







Exhibit 10.78




June 6, 2006




Mr. Scott A. Fry

6099 Arrington Drive

Fairfax Station, VA 22039




Re:   Addendum to Offer Letter



Dear Scott:



This letter constitutes an addendum to a letter, dated December 16, 2003, to you from Alion Science
and Technology Corporation (“Alion” or the “Company”) which constituted our original offer of
employment (the “Offer Letter”). This letter provides to you additional benefits in consideration
for your continued service to the Company. This letter replaces and supersedes in its entirety the
letter to you dated March 7, 2006.




     1. Benefits.


In addition to the benefits set forth in your Offer Letter, you will continue to be eligible to
receive a company-leased automobile under our Auto Lease Policy. This is equivalent to a maximum of
approximately $1,000 a month. You will also receive 24 personal days off (“PTO”) per year in
addition to the current ten paid holidays. You are also eligible to receive other executive benefits under current Alion policies for:





	 	•	 	Tax Preparation Subsidy
	 
	 	•	 	Physical Fitness Membership Subsidy
	 
	 	•	 	Annual Health Physical Subsidy




All other Alion Core and Optional Employee Benefits remain the same. In addition, you and the
Company agree to the following additional terms, with any reference to you to mean “Employee”:




     2. Severance. A. If, from the date of this letter until and including December 20,
2007, the Company terminates Employee’s employment without Cause (as defined below), the Company
shall make a lump-sum severance payment to Employee equal to one year of Employee’s annual base
salary as of the Termination Date



 









 





Mr. Scott A. Fry

June 6, 2006

Page 2



as defined in Section 4 below. There will be no further rights
to any further compensation. In the event that Employee is terminated for Cause, Employee will not
be entitled to any severance or other benefits upon termination other than those accrued benefits
provided to employees pursuant to existing Company policies.




          B. For purposes of this letter, “Cause” is defined as the occurrence of one of the following:
(i) Employee’s material violation of Company policy or any violation of the Company’s Code of
Ethics, Conduct and Responsibility; (ii) any act, failure to act, series of acts or failures to
act, or course of conduct on Employee’s part constituting reckless, willful, or criminal misconduct
in the performance of your duties; (iii) any failure to perform, or gross negligence or
incompetence in the performance of, Employee’s duties; or (iv) Employee’s commission of a crime
involving conversion, misappropriation, larceny, theft, fraud, dishonesty, embezzlement, moral
turpitude or any other felony, regardless of whether such crime involves the Company.




     3. Change of Control Benefits. In the event of a Change of Control, as defined in
Section 5 below, if Employee meets the Eligibility Requirements set forth in Section 4 below, the
Company’s successor or assign shall pay Employee, in lieu of any severance benefits described
above, a lump sum amount equal to the amount of Employee’s annual base salary as of the Termination
Date (the “Change of Control Benefits”). There will be no further rights to any further
compensation or benefits.



     4. Eligibility for Change of Control Benefits. If Employee terminates employment (for
reasons other than set forth in Section 4D below) with any successor or assign (or any of their
respective affiliates) of the Company at any time during the twenty four (24) month period
beginning on the effective date of a Change in Control (the “Protection Period”), he shall be
entitled to the Change of Control Benefits. If during the Protection Period, Employee terminates
his employment for Good Reason (as defined below) by delivering to the successor or assign of the
Company (or its respective affiliate), as applicable, each no later than thirty (30) days after
learning of the occurrence of an event constituting Good Reason: (i) a Preliminary Notice of Good
Reason (as defined below); and (ii) a Notice of Termination (as defined below), Employee shall
have the right, in his sole and reasonable discretion, to receive the Change of Control Benefits.
For purposes of this letter, the following terms shall have their respective meanings:



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




 









 








Mr. Scott A. Fry

June 6, 2006

Page 3



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




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




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




          D. Notwithstanding any other provision under this Agreement, Employee shall not be entitled to
receive Change of Control Benefits in the event that: Company’s successor or assign (or any of its
respective affiliates) terminates Employee’s employment for Cause (as defined below); (ii) Employee
dies (in which case the Company shall pay to Employee’s heir or personal representatives, as the
case may be, six (6) monthly payments, each equal to one-twelfth (1/12) of Employee’s then-current
salary, commencing with the first calendar month after termination); (iii) Employee is determined
to be totally and permanently disabled (in which case the Company shall
pay to Employee six (6) monthly payments, each equal to one-twelfth (1/12) of Employee’s
then-current salary less any payments under the Company’s long term disability insurance plan that
Employee receives or is entitled to receive in each such month, commencing with the first calendar
month after termination); (iv) the Company’s successor or assign (or any of its respective
affiliates) terminates Employee’s employment without cause (in which case the Company shall make a
lump-sum severance payment to Employee equal to one year of Annual Base Salary as of the Date of
Termination); or (v) Employee resigns other than for Good Reason (in which case the


 









 









Mr. Scott A. Fry

June 6, 2006

Page 4



Company shall
have no further obligations to Employee under this Agreement, including without limitation payment
of future compensation or benefits). In any such event, Employee, in addition to any benefits
payable in accordance with this Agreement, shall be entitled only to his salary and benefits
accrued or earned and vested under other plans, programs, policies, practices and coverage of the
Company’s successor or assign (or any of its respective affiliates).”




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



     6. Other Provisions. All other provisions set forth in the Offer Letter shall remain
the same.


By our mutual signatures below, you and the Company agree to the terms of this letter.



We look forward to your continued success with Alion. If you have any questions, please call me at
(703-269-3487).



Yours very truly,




	 	 	 	 	 
	/s/ Stacy Mendler
	 	 	 	 
	 	 	 	 	 
	Stacy Mendler

	 	 	 	 
	Executive Vice President
	 	 	 	 





I accept this letter and agree to the above terms.




	 	 	 	 	 
	/s/ Scott Fry

	 	 	 	6/6/06
	 
	Signature

	 	 	 	Date