Document:

EXHIBIT 4.3

 Exhibit 4.3 
  

NCI, INC. 
  
 INCENTIVE STOCK OPTION AGREEMENT 
  
 This Incentive Stock Option Agreement (“Agreement”) is made and entered into by and between NCI, INC., a Virginia corporation (the “Company”), and the employee of the Company named in
Section 1 (b) (“Optionee”). 
  
 In
consideration of the covenants set forth in this Agreement, the parties agree as follows: 
  

	1.	Option Information 

  

	 	(a)	Date of Grant: 

	 	(b)	Optionee: 

	 	(c)	Number of Shares: 

	 	(d)	Exercise Price: 

  

	2.	Acknowledgments 

  

	 	(a)	Optionee is an employee of the Company. 

  
 (b) The Board of Directors (the “Board” which term shall include an authorized committee of the Board of Directors) and shareholders of
the Company have heretofore adopted the NCI, Inc. 2005 Performance Incentive Plan (the “Plan”), pursuant to which this Option is being granted. 
  
 (c) The Board has authorized the granting to Optionee of a stock option which is intended to be an Incentive Stock Option (“Option”) as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, (the “Code”) to purchase shares of common stock of the Company (“Stock”) upon the terms and conditions hereinafter stated and pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 701 thereunder. 
  
 (d) Except as otherwise provided herein, defined terms shall have those meanings as are provided for in the Plan. 
  

	3.	Shares, Price 

  
 The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, the number of shares of Stock set
forth in Section 1(c) above (the “Shares”) for cash (or other consideration as is authorized under the Plan and acceptable to the Board, in their sole and absolute discretion) at the price per Share set forth in Section 1(d)
above (the “Exercise Price”). 
  

	4.	Term of Option; Continuation of Employment 

  
 This Option shall expire, and all rights hereunder to purchase the Shares shall terminate, ten years from the Date of Grant. This Option shall earlier
terminate subject to Sections 5 ,7 and 8 of this Agreement upon, and as of the date of, the termination of Optionee’s Continuous Service if such termination occurs prior to the end of the ten year period. Nothing contained in this Agreement
shall confer upon Optionee the right to the continuation of his or her employment by the Company or any Related Entity or to interfere with the right of the Company or any Related Entity to terminate such 

 employment or to increase or decrease the compensation of Optionee from the rate in
existence at the date hereof. 
  

	5.	Vesting of Option 

  
 Subject to the provisions of Sections 7 and 8 of this Agreement, this Option shall become 100% vested as of the date this Agreement becomes fully
executed, with the following restrictions: 
  
 (a) Voluntary
termination if Optionee should voluntarily terminate his employment with the Company, or a Related Entity, within 12 months from the date of this Option Agreement, this Option shall terminate automatically and without notice as to all shares
covered by this Option. Should Optionee voluntarily terminate his employment with the Company, or a Related Entity within months 12-24 from the date of this Option Agreement, this Option shall automatically and without notice terminate as to
one-half of the shares covered by this Option. 
  
 (b)
Involuntary Termination if Optionee should be terminated “for cause” as that term is defined by the Plan or by any employment agreement between the Optionee and the Company or a Related Entity, or the Optionee terminates
Continuous Service at any time following an event which would be grounds for termination “for cause,” this Option, shall automatically and without notice terminate as to all Shares covered by this Option not previously exercised.

  

	6.	Exercise 

  
 The shares covered by this Option shall only become exercisable twelve months after date of grant for 50% of the shares and twenty-four months after the
date of grant for the remaining 50% of the shares and upon the occurrence of one of the following events (each individually an “exercise event”) whichever occurs first: (a) the Company undergoes a Change in Control as that term is
defined in the Plan, (b) the company completes an underwritten public offering of the Stock (“IPO”), (c) nine years elapse from the Date of Grant, or (d) the Board of Directors of the Company approves the Optionee’s
exercise of the Option. This Option shall be exercised by delivery to the Company of (a) written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice
of Exercise attached hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of the Shares covered by the notice (or such other consideration as has been approved by the Board of Directors consistent with the Plan) and
(c) if so required, a written investment representation as provided for in Section 13 of this Agreement. This Option shall not be assignable or transferable, except by will or by the laws of descent and distribution, and shall be
exercisable only by Optionee during his or her lifetime. 
  

	7.	Death or Disability of Optionee 

  
 If the Optionee shall terminate from Continuous Service by reason of death or disability (defined for this purpose as a disability qualifying the Optionee
for benefits under the Company’s employer-funded long-term disability plan or if no such plan applies, Section 22(e)(3) of the Code), the vested Options shall terminate on the date which 12 months after the later of (i) the date of
Optionee’s death or termination for disability or (ii) the date of an exercise event as described in Section 6, provided that the Option shall be subject to earlier termination in accordance with this Agreement and the Plan. Until
such termination, the Option may, to the extent that this Option has not previously been exercised by Optionee, be exercised by the Optionee, in the case of disability, or the Optionee’s personal representative or the person entitled to
Optionee’s rights under this Agreement, in the case of death. The right to exercise the Option shall remain subject to Section 6 of the 

  

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Agreement and the Shares received on exercise shall remain subject to the terms and restrictions of this Agreement. 
  

	8.	Retirement of Optionee  

  
 If the Optionee shall retire from Continuous Service on or after normal retirement age (defined under this Agreement as age 65), the vested Options shall
remain outstanding subject to termination as otherwise provided in this Agreement or the Plan, and the Optionee’s right to exercise the Option shall remain subject to the terms of Section 6. 
  

	9.	No Rights as Shareholder 

  
 Optionee shall have no rights as a shareholder with respect to the Shares covered by any installment of this Option until the effective date of issuance
of Shares following exercise of this Option, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificate or certificates are issued except as provided in Section 10 of this
Agreement. 
  

	10.	Adjustments; Corporate Transactions 

  
 In the event of certain changes in the Shares or corporate transactions, this Option is subject to the adjustments and terms provided in Section 4(b)
and (c) of the Plan. 
  

	11.	Modification, Extension and Renewal of Options 

  
 The Board or Committee, as described in the Plan, may modify, extend or renew this Option or accept its surrender (to the extent not yet exercised) and
authorize the granting of a new option in substitution for it (to the extent not yet exercised), subject at all times to the Plan, Code Section 422 and Virginia law. Notwithstanding the foregoing provisions of this Section 11, no
modification shall, without the consent of the Optionee, alter to the Optionee’s detriment or impair any rights of Optionee under this Agreement. 
  

	12.	Investment Intent; Restrictions on Transfer 

  
 (a) Optionee represents and agrees that if Optionee exercises this Option in whole or in part, Optionee will in each case acquire the Shares upon such
exercise for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof, and that upon the exercise of this Option in whole or in part, Optionee (or any person or persons entitled to exercise this
Option under the provisions of Sections 7 of this Agreement) shall furnish to the Company a written statement to such effect, satisfactory to the Company in form and substance. If the Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this Option in whole or in part, the Optionee shall be relieved of the investment representation and agreement and shall not be required to furnish the Company with the written statement.

  
 (b) Unless and until the Shares represented by this Option are
registered under the Securities Act, all certificates representing the Shares and any certificates subsequently issued in substitution therefor and any certificate for any securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially the following form: 
  
 “THESE SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE 
 QUALIFIED UNDER THE SECURITIES
ACT OF 1933 (THE “SECURITIES 

  

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ACT”) OR UNDER APPLICABLE SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS THEREFROM”. 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN INCENTIVE STOCK OPTION
AGREEMENT DATED (            ) BETWEEN THE COMPANY AND THE OPTIONEE WHICH RESTRICTS TRANSFER OF THESE SHARES WHICH ARE THE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN
CONDITIONS.” 
  
 The certificates shall bear such other legend or legends
as the Company and its counsel deem necessary or appropriate. Appropriate stop transfer instructions with respect to the Shares have been placed with the Company’s transfer agent. 
  

	13.	Effects of Certain Exercises and Disposition 

  
 Optionee understands that although the Option is intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, the
Company does not guaranty that the exercise of the Option will qualify for incentive stock option treatment. The Optionee understands that, except in the case of Optionee’s death, the exercise will not be given incentive stock option treatment
if it does not occur within three months following the Optionee’s termination of the employment from the Company or a Subsidiary or within one year if such termination is by reason of a total and permanent disability within the meaning of
Section 22(e)(3) of the Code. 
  
 Optionee understands that
if the exercise is treated as the exercise of an incentive stock option under Section 422 of the Code and if Optionee disposes of shares acquired hereunder within 2 years after the date of this Option or within 1 year after the date of issuance
of such shares to Optionee, (a “Disqualifying Disposition”) the Optionee will be treated for income tax purposes as having received ordinary income at the time of the disposition of an amount generally measured by the difference between
the purchase price and the fair market value of such stock on the date of exercise, (but not in excess of the consideration received at the time of the disposition, if the disposition is a transaction on which a loss if incurred would be
recognized). Any additional gain or loss resulting from a Disqualifying Disposition will be long or short-term capital gain or loss depending on the Optionee’s holding period. The foregoing amount may be measured differently if Optionee at the
time of exercise is subject to the short-swing profit restrictions of Section 16 of the Securities Exchange Act of 1934. Optionee agrees to notify the Company within 10 working days of any such disposition. 
  

	14.	Stand-off Agreement 

  
 Optionee agrees that in connection with any registration of the Company’s securities under the Securities Act, and upon the request of the Company or
any underwriter managing an underwritten offering of the Company’s securities, Optionee shall not sell, short any sale of, loan, grant an option for, or otherwise dispose of any Shares held by Optionee (other than Shares included in the
offering) without the prior written consent of the Company or such managing underwriter, as applicable, for a 

  

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period of at least six months following the effective date of registration of the offering. Additionally, in the event of the occurrence of an IPO, all
employees may be subject to certain black-out periods which restrict the ability to sell shares during those periods in accordance with applicable SEC regulations. 
  

	15.	Restrictions While Stock is Not Registered 

  
 (a) Restricted Shares. Any shares of Stock acquired upon exercise of this Option and (i) all shares of the Company’s capital stock
received as a dividend or other distribution upon such shares, and (ii) all shares of capital stock or other securities of the Company into which shares may be exchanged or to which such shares shall be exchanged, whether through
reorganization, recapitalization, stock split-ups or the like, shall be subject to the provisions of this Section 15 at all times, and only at those times, that the shares of the Company’s Common Stock or the shares into which they are
converted are not registered under the Securities Exchange Act of 1934, as amended, (such times during which the stock is not so registered sometimes hereinafter being referred to as the “Restricted Period”) and are during the Restricted
Period hereinafter referred to as the “Restricted Shares”. 
  
 (b) No Sale or Pledge of Restricted Shares. Except as otherwise provided herein, Optionee agrees and covenants that during the Restricted Period he or she will not sell, pledge or encumber or otherwise transfer or dispose of, and
will not permit to be sold, encumbered, attached or otherwise disposed of or transferred in any manner, either voluntarily or by operation of law (all hereinafter collectively referred to as “transfers”), all or any portion of the
Restricted Shares or any interest therein except in accordance with and subject to the terms of this Section 15. 
  
 (c) Voluntary Transfer Repurchase Option. If Optionee desires to effect a voluntary transfer of any of the Restricted Shares during the Restricted
Period, Optionee shall first give written notice to the Company of such intent to transfer (the “Offer Notice”) specifying (i) the number of the Restricted Shares (the “Offered Shares”) and the date of the proposed transfer
(which shall not be less than fifty (50) days after the giving of the Offer Notice), (ii) the name, address, and principal business of the proposed transferee (the “Transferee”), and (iii) the price and other terms and
conditions of the proposed transfer of the Offered Shares to the Transferee. The Offer Notice by Optionee shall constitute an offer to sell all, but not less than all, of the Offered Shares, at the price and on the terms specified in such Offer
Notice, to the Company and/or its designated purchaser. If the Company desires to accept Optionee’s offer to sell, either for itself or on behalf of its designated purchaser, the Company shall signify such acceptance by written notice to
Optionee within fifty (50) days following the giving of the Option Notice. Failing such acceptance, Optionee’s offer shall lapse on the fifty-first day following the giving of the Option Notice. With such written acceptance, the Company
shall designate a day not later than ten days following the date of giving its notice of acceptance on which the Company or its designated purchaser shall deliver the purchase price of the Offered Shares (in the same form as provided in the Offer
Notice) and Optionee shall deliver to the Company or its designated Purchaser, as applicable, all certificates evidencing the Offered Shares endorsed in blank for transfer or with separate stock power endorsed in blank for transfer. The Offered
Shares so transferred by Optionee to the Transferee shall continue to be subject to all of the terms and conditions of this Section 15 (including without limitation paragraph (e) of this Section 15) and all certificates evidencing the
Offered Shares endorsed in blank for transfer or with separate stock powers endorsed in blank for transfer. The Company may in its sole and absolute discretion, notify the Optionee within fifty-one days following the giving of the Option Notice that
it does not permit the transfer of the Offered Shares to the Transferee pursuant to the terms and conditions set forth in the Offer Notice in which event any such transfer or attempted transfer by the Optionee to the Transferee shall be null and
void. Upon the lapse without acceptance by the Company of Optionee’s offer to sell the Offered Shares, and unless the Company shall provide written notice to the Optionee within fifty-one days following the giving of the Option Notice that it
will not permit the transfer of the Offered Shares to the Transferee 

  

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pursuant to the terms and conditions set forth in the Option Notice, Optionee shall be free to transfer the Offered Shares not purchased by the Company or
the designated purchaser to the Transferee (and no one else), for a price and on terms and conditions which are no more favorable to the Transferee than those set forth in the Offer Notice, for a period of thirty days thereafter, but after such
period the restrictions of this Section 15 shall again apply to the Restricted Shares. Company shall have the right to require, as a condition of such transfer, that the Transferee execute an agreement substantially in the form and content of
the provisions of this Section 16, as well as any voting agreement and/or shareholders agreement required by the Company. 
  
 (d) Involuntary Transfer Repurchase Option. Whenever, during the Restricted Period, Optionee has any notice or knowledge of any attempted, pending,
or consummated involuntary transfer or lien or charge upon any of the Restricted Shares, whether by operation of law or otherwise, Optionee shall give immediate written notice thereof to the Company. Whenever the Company has any other notice or
knowledge of any such attempted, impending, or consummated involuntary transfer, lien, or charge, it shall give written notice thereof to the Optionee. In either case, Optionee agrees to disclose forthwith to the Company all pertinent information in
his possession relating thereto. If during the Restricted Period any of the Restricted Shares are subjected to any such involuntary transfer, lien, or charge, the Company and its designated purchaser shall at all times have the immediate and
continuing option to purchase such of the Restricted Shares upon notice by the Company to Optionee or other record holder at a price and on terms determined according to Section 15(e) below, and any of the Restricted Shares so purchased by the
Company or its designated purchaser shall in every case be free and clear of such transfer, lien, or charge. 
  
 (e) Repurchase Option After Termination of Continuous Service. Anything set forth in this Agreement to the contrary notwithstanding, the Company
shall have the right (but not the obligation) to purchase or designate a purchaser of all, but not less than all, of the Restricted Shares (including, without limitation, any Restricted Shares transferred pursuant to Section 15(i)) during the
Restricted Period and after termination of the Optionee’s Continuous Service for any reason, for the purchase price and on terms specified in Section 15(f) hereof. The Company may exercise its right to purchase or designate a purchaser of
the Restricted Shares at any time (without any time limitation) after the Optionee’s termination of Continuous Service and during the Restricted Period. If the Company chooses to exercise its right to purchase the Restricted Shares hereunder,
the Company shall give its notice of its exercise of this right to Optionee or his or her legal representative specifying in such notice a date not later than ten (10) days following the date of giving such notice on which the Company or its
designated purchaser shall deliver, or be prepared to deliver, the check or promissory note for the purchase price and Optionee or his or her legal representative shall deliver all stock certificates evidencing such Restricted Shares duly endorsed
in blank for transfer or with separate stock powers endorsed in blank for transfer. 
  
 (f) Repurchase Price. For purposes of Sections 15(d) and (e) hereof, the per share purchase price of Restricted Shares shall be an amount equal to the fair market value of such share, determined by the
Board as of any date determined by the Board that is not more than one year prior to the date of the event giving rise to the Company’s right to purchase such Restricted Shares. Notwithstanding the foregoing, if the event that gives rise to the
Company’s right to repurchase the Restricted Shares is the termination of the Optionee’s Continuous Service “for cause”, (the per share purchase price of the Restricted Shares shall be an amount equal to the lesser of
(i) the Fair Market Value of such share (as determined in accordance with the previous sentence), and (ii) the original purchase price per share the Optionee paid for such Restricted Shares. Any determination of Fair Market Value made by
the Board shall be binding and conclusive on all parties unless shown to have been made in an arbitrary and capricious manner. The purchase price shall, at the option of the Company, be payable in cash or in the form of the Company’s promissory
note payable in up to three (3) equal annual installments commencing twelve (12) months after the acquisition by the Company (the “Restricted Share Acquisition Date”) of the Restricted Shares, 

  

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together with interest on the unpaid balance thereof at the rate equal to the prime rate of interest as quoted in the Wall Street Journal on the Restricted
Share Acquisition Date. 
  
 (g) Voting Rights. As a
condition to Optionee’s exercise of any Option pursuant to this Agreement, the Company may in its discretion require that Optionee enter into a voting agreement that grants the Company the voting rights for all shares of Stock acquired pursuant
to the exercise of such Options, until the earlier of (i) ten (10) years from the date of exercise of the Option, or (ii) the end of the Restricted Period, such voting agreement to be in such form as the Company reasonably may
request. 
  
 (h) Acceptance of Restrictions. Acceptance of
the Shares shall constitute the Optionee’s agreement to such restrictions and the legending of his or her certificates with respect to the restrictions. Notwithstanding the restrictions, however, so long as the Optionee is the holder of the
Shares, or any portion of them, he or she shall be entitled to receive all dividends declared on and to vote the Shares and to all other rights of a shareholder with respect to the Shares. 
  
 (i) Permitted Transfers. Notwithstanding any provisions of this
Section 16 to the contrary, the Committee, in its’ sole discretion, may provide the transfer by gift any Shares subject to this Agreement, including for purposes of estate-planning, to the Optionee’s immediate family members (i.e.,
spouse, children, grandchildren, or siblings, and including the participant), to trusts for the benefit of such immediate family members, and to partnerships in which such family members and family trusts are the partners, or for any other purpose
deemed by the Committee to be not inconsistent with the purposes of the Plan, and subject to such terms and conditions as may be specified by the Committee; provided, that the permitted transferee or transferees shall hold the Shares subject to all
the provisions of this Agreement (all references to the Optionee in this Agreement shall in such cases refer to the permitted transferee); and provided further, that notwithstanding any other provisions of this Agreement, a permitted transferee may
not, in turn, make permitted transfers without the written consent of the Optionee and the Company. 
  
 (j) Drag-Along Rights. Notwithstanding any provision of this Agreement to the contrary, if at any time the Board of Directors of the Company
approves a sale of the Company while the Shares are Restricted Shares, Optionee agrees that he or she will consent to and raise no objections against the sale of the Company, and if the sale of the Company is structured as (i) a merger or
consolidation of the Company, or a sale of all or substantially all of the assets of the Company, Optionee will waive any dissenter’s rights, appraisal rights or similar rights in connection with such merger, consolidation or asset sale, or
(ii) a sale of all or substantially all of the Stock of the Company, Optionee agrees to sell all of Optionee’s shares of Stock in the sale of the Company, on the terms and conditions approved by the Board of Directors. Optionee agrees to
take all necessary and desirable actions approved by the Board of Directors in connection with the consummation of the sale of the Company, including giving written consent to the sale of the Company and executing such agreements and such
instruments and completing other actions reasonably necessary to (x) provide customary representations, warranties, indemnities and escrow arrangements relating to such sale of the company and (y) effectuate the allocation and distribution
of the aggregate consideration upon the sale of the Company. 
  
 (k) S Election. Optionee acknowledges that the Company has elected “S” corporation status under the Internal Revenue Code of 1986, as amended (the “Code”). Optionee agrees that he shall execute or cause to be
executed any form or document determined by the Company or its legal counsel to be necessary or appropriate to be executed in order to elect, reinstate, preserve, maintain and maximize the potential benefit of, the Company’s “S”
corporation status. In addition, Optionee hereby agrees and covenants that he will not (i) transfer any shares of Stock to any individual who is not a citizen or resident of the United States or to any entity that would cause the Company to
cease to be eligible for “S” corporation status under the Code, or (ii) perform or do (or neglect to perform or do) any other act which 

  

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would or might have the effect of disqualifying the Company’s “S” corporation status under the Code. Optionee further agrees that the Company,
upon the consent of a majority of the entire Board, may terminate the “S” corporation election. In such event, Optionee agrees that he shall execute or cause to be executed any form or document determined by the Company or its legal
counsel to be necessary or appropriate to be executed in order to terminate the Company’s “S” corporation status. 
  

	16.	Notices  

  
 Any notice required to be given pursuant to this Option or the Plan shall be in writing and shall be deemed to be delivered upon receipt or, in the case
of notices by the Company, 5 days after deposit in the U.S. mail, postage prepaid, addressed to Optionee at the address last provided to the Company by Optionee for his or her employee records. 
  

	17.	Agreement Submit to Plan; Applicable Law 

  
 This Option is made pursuant to the Plan and shall be interpreted to comply with it. A copy of the Plan is available to Optionee, at no charge, at the
principal office of the Company. Any provision of this Option inconsistent with the Plan shall be considered void and replaced with the applicable provision of the Plan. This Option has been granted, executed and delivered in the Commonwealth of
Virginia, and the interpretation and enforcement shall be governed by the laws thereof and subject to the exclusive jurisdiction of the courts therein. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Option. 
  
 NCI, INC. 
  

					
			
	  	 	 Date:
	 	  
	President	 	 	 	 

  
 OPTIONEE 

	
	
	  
	 

 Optionee, by his or her signature hereon represents that the Optionee is unmarried. 

	
	
	  
	 

 By his or her signature, the spouse of Optionee hereby agrees to be bound by the provisions of the foregoing
Incentive Stock Option Agreement. 

	
	
	  
	 

 Spouse of Optionee 
  

 8 

 EXHIBIT A 
  

NCI, Inc. 
  
 OPTION EXERCISE FORM 
  

			
		
	Date:	 	 
	 	 	 

  

			
		
	Attention:	 	 
	 	 	 

  
 The undersigned hereby elects to
exercise the Options issued to him/her by NCI, Inc. (the “Company”) and dated              (the “Options”) and to purchase
             shares of Common stock of the company ( the “Shares”) at an exercise price of             
Dollars ($            ) per share or an aggregate purchase price of              Dollars
($            ) ( the “Exercise Price”. Pursuant to the terms of the Option Agreement the undersigned has delivered the Exercise Price herewith in full in cash or
            . 
  
 Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned. 
  

			
		
	By:	 	 
	 	 	 

  

			
		
	Typed Name:	 	 
	 	 	 

  

			
		
	Address:	 	 
	 	 	 

  

 9EXHIBIT 10.3

 Exhibit 10.3 
  
 TAX INDEMNIFICATION AGREEMENT 
  
 TAX INDEMNIFICATION AGREEMENT, dated as of September 1, 2005 (the “Agreement”), between NCI, Inc., a Delaware corporation (the
“Company”), and the persons listed on the signature page hereto (the “Stockholders”). 
  
 WHEREAS, the execution and delivery by the Company and the Stockholders of this Agreement is a condition to the closing of the Public Offering (as
hereinafter defined); 
  
 WHEREAS, the Company has been an “S
corporation” (as defined in section 1361(a)(1) of the Code (as hereinafter defined)) for federal tax purposes since August 2005 and the Predecessor (as hereinafter defined) was an S corporation for federal tax purposes since November 1989.

  
 WHEREAS, the Company and the Stockholders plan to terminate
the S corporation status of the Company prior to the closing of the Public Offering and, as a result, the Company will be a “C corporation” (as defined in section 1361(a)(2) of the Code) beginning on the Termination Date (as hereinafter
defined); and 
  
 WHEREAS, the Company and the Stockholders wish
to provide for the termination of this Agreement such that it has no effect should the Public Offering not close. 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 
  
 Article I 
  
 1.1 Definitions. 
  
 The following terms as
used herein have the following meanings: 
  
 “Adjustment
Amount” means the net increase in taxable income of a Stockholder or the Company based on a Final Determination and that gives rise to a payment pursuant to Section 3.3 or 3.4 hereof. 
  
 “Affected Stockholder” means the Stockholder whose tax returns are
adjusted in a manner which gives rise to an obligation of the Company (whether directly or as successor to the Predecessor) pursuant to Section 3.3 hereof. 
  
 “Blended Rate” means a percentage that equals the sum of the maximum marginal federal and state individual income tax rates for an individual
residing in the Commonwealth of Virginia (after giving effect to the full deductibility of state income taxes for federal income tax purposes) in effect for the year of the adjustment to a tax return of the Company, the Predecessor 

 or a Stockholder that gives rise to a correlative adjustment to a tax return of a Stockholder, the Predecessor or the
Company, respectively. For example, if an adjustment results in an amount due from a Stockholder hereunder, the year of the Company’s return or the Predecessor’s return, as the case may be, that was adjusted will determine the Blended Rate
to be used in computing the amount due. 
  
 “Closing
Date” means the date on which the Public Offering closes. 
  
 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 “C Short Year” means that portion of the Company’s year beginning on the Termination Date until and including the last day of the S Termination Year. 
  
 “C Taxable Year” means any taxable year (or portion thereof) of the
Company during which the Company is a C corporation, including the C Short Year. 
  
 “Final Determination” means the final resolution of any income tax liability (including all related interest and penalties) for a taxable period. A Final Determination will result from the first to occur of:
(i) the expiration of thirty (30) days after acceptance by the Internal Revenue Service (the “IRS”) of a Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment (the “Waiver”) on
Federal Revenue Form 870 or 870-AD (or any successor comparable form or the expiration of a comparable period with respect to any comparable agreement or form under the laws of any other jurisdiction), unless, within such period, the applicable
taxpayer gives notice of that taxpayer’s intention to attempt to recover all or part of any amount paid pursuant to the Waiver by filing a timely claim for refund; (ii) a decision, judgment, decree or other order by a court of competent
jurisdiction that is not subject to further judicial review (by appeal or otherwise) and has become final; (iii) the execution of a closing agreement under section 7121 of the Code or the acceptance by the IRS or its counsel of an offer in
compromise under section 7122 of the Code or the execution of a comparable agreement under the laws of any other jurisdiction; (iv) the expiration of the time for filing a claim for refund or for instituting suit in respect of a claim for refund
disallowed in whole or part by the IRS or any other relevant taxing authority; (v) any other final disposition of the tax liability for such period by reason of the expiration of the applicable statute of limitations; or (vi) any other event that
the parties hereto agree is a final and irrevocable determination of the liability at issue. 
  
 “Predecessor” means NCI Information Systems, Inc., an Virginia corporation, which became a wholly-owned subsidiary of the Company on September 1, 2005. 
  
 “Public Offering” means the initial offering of shares of the
Company’s Class A Common Stock, $0.01 par value per share, pursuant to the Registration Statement on Form S-1 originally filed by the Company with the Securities and Exchange Commission on July 28, 2005. 
  
 “S Short Year” means that portion of the S Termination Year
beginning on the first day of such taxable year and ending on the day immediately preceding the Termination Date. 
  

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 “S Taxable Year” means any taxable year (or portion thereof) of the Company or the Predecessor,
as applicable, during which the Company, or the Predecessor, as applicable, was an S corporation, including the S Short Year. 
  
 “S Termination Year” means the fiscal year of the Company that includes the Termination Date. 
  
 “Taxing Authority” means the IRS or any comparable state or foreign
taxing authority. 
  
 “Termination Date” means the date
on which the S corporation status of the Company will terminate pursuant to section 1362(d) of the Code. 
  
 Article II 
  
 2.1
Termination of S Corporation Status. 
  
 The Company and the
Stockholders will cause the Company to terminate its S corporation status at least two (2) days prior to the Closing Date. 
  
 2.2 Allocation Election. 
  
 The Company will elect pursuant to section 1362(e)(3) of the Code to allocate the items described in section 1362(e)(2)(A) of the Code under “normal
tax accounting rules,” and the Stockholders will consent to such election and will provide the Company with the statement of consent described in section 1.1362-6(b) of the Treasury Regulations. 
  
 Article III 
  
 3.1 Liability for Taxes Incurred by Stockholders during the S Short Year. 

 
 Each Stockholder will (a) duly include, in his or its federal and state
income tax returns, all items of income, gain, loss, deduction or credit attributable to the S Short Year in a manner consistent with the Form 1120S and the schedules thereto (and the corresponding state income tax forms and schedules) to be filed
by the Company with respect to such period, (b) file such returns no later than the due date (including extensions, if any) for filing such returns, and (c) pay any and all taxes required to be paid for his or its taxable year that includes the S
Short Year. 
  
 3.2 Liability for Taxes Incurred by the Company during the S
Short Year and the C Short Year. 
  
 The Company will (a) be
responsible for and effect the filing of all federal and state income tax returns for the Company with respect to the S Short Year and the C Short Year, (b) accurately prepare and timely file such Company returns, and (c) pay any and all taxes
required to be paid by the Company for the S Short Year and the C Short Year. 
  
 3.3 Company’s Indemnification of Stockholders for Tax Liabilities. 
  
 In the event of an adjustment to one or more tax returns of the Company or of the Predecessor for an S Taxable Year based on a Final Determination that results in a net increase 
  

 3 

 in taxable income of any Stockholder and a corresponding adjustment to one or more tax returns of the Company for a C
Taxable Year based on a Final Determination that results in a net decrease in taxable income of the Company, the Company will pay to the Affected Stockholder an amount equal to the Adjustment Amount multiplied by the Blended Rate; provided, however,
the total amount due under this Section 3.3 will not exceed the amount of refund (or an offset against tax that would otherwise be due and payable) received by the Company that is attributable to the relevant adjustment. The Company will pay the
amount due to the Affected Stockholder within thirty (30) business days after the receipt of notice from the Affected Stockholder that a payment is due by such party to the appropriate Taxing Authority. 
  
 3.4 Stockholders’ Indemnification of the Company for Tax Liabilities. 

 
 (a) In the event of an adjustment of one or more tax returns of the
Company for a C Taxable Year based on a Final Determination which results in a net increase in taxable income of the Company for a C Taxable Year and a corresponding adjustment to one or more tax returns of the Company or of the Predecessor for an S
Taxable Year based on a Final Determination which results in a net decrease in taxable income of the Company or of the Predecessor for the S Taxable Year, each Stockholder agrees to contribute to the capital of the Company his or its share (based
upon the relative amount of Company stock or Predecessor stock, as the case may be, held by the Stockholder during the relevant time period) of an amount equal to the Adjustment Amount multiplied by the Blended Rate; provided, however, the total
amount due under this Section 3.4(a) will not exceed the amount of refund (or an offset against tax that would otherwise be due and payable) received by the Stockholder that is attributable to the relevant adjustment. 
  
 (b) If, based on a Final Determination, the Company or the Predecessor is
deemed to have been a C corporation for federal, state or local income tax purposes during any period in which it reported (or intends to report) its taxable income as an S corporation, each Stockholder, subject to the limitations contained in
Section 3.4(c), will contribute to the capital of the Company his or its share (based upon the relative amount of Company stock or Predecessor stock, as the case may be, held by such Stockholder during the relevant time period) of an amount equal to
the taxes, penalties and interest incurred by the Company as a result of the Company or the Predecessor being deemed to have been a C corporation. 
  
 (c) Notwithstanding the provisions of this Section 3.4, all payments required to be made by a Stockholder to the Company pursuant to Section 3.4(b) will
not exceed the total distributions to pay taxes made to the Stockholder by the Company and/or the Predecessor, as the case may be, during the period beginning on the first day of the first open tax year of the Company and/or the Predecessor, as the
case may be, in which the Company and/or the Predecessor, as the case may be, is deemed to have been a C corporation and ending on the Termination Date. 
  
 (d) Each Stockholder will contribute to the capital of the Company any amounts calculated in accordance with this Section 3.4 within thirty (30) business
days after the first to occur of (i) the receipt of the refund from the appropriate Taxing Authority attributable to such adjustment, and (ii) delivery of a notice from the Company that a payment is due by the Company to the appropriate Taxing
Authority. 
  

 4 

 Article IV 
  

4.1 Contests. 
  
 Whenever a Stockholder or the Company becomes aware of an issue that he or it believes could result in a Final Determination which could reasonably be
expected to give rise to a payment or indemnification obligation under Article III, the Stockholder or the Company (as the case may be) will promptly give notice of the issue to the other parties hereto. The Affected Stockholder(s) and his or its
representatives, at their expense, will be entitled to participate in all conferences and meetings with or proceedings before the IRS or any other Taxing Authority with respect to the issue. The parties will consult and cooperate with each other in
the negotiation and settlement or litigation of any adjustment that may give rise to any payment or indemnification obligation under Article III. All decisions with respect to such negotiation and settlement or litigation will be made by the parties
after full, good faith consultation or pursuant to the dispute resolution provisions of Section 4.2. 
  
 4.2 Dispute Resolution. 
  
 (a) If the parties hereto are, after negotiation in good faith, unable to agree upon the appropriate application of the provisions of this Agreement, the controversy will be settled by an accounting firm of national reputation, other than
the Company’s independent public accountants, chosen by the Company and the Affected Stockholder(s) (the “Accounting Firm”). The decision of the Accounting Firm with respect thereto will be final, and the Company or the Affected
Stockholder(s) will immediately pay any amounts due under this Agreement pursuant to such decision. The applicable expenses of the Accounting Firm will be borne one-half by the Company and one-half by the Affected Stockholder(s) unless the
Accounting Firm specifies otherwise. 
  
 (b) In the event that a
Stockholder or the Company receives notice, whether orally or in writing, of any federal, state, local or foreign tax examination, claim, settlement, proposed adjustment or related matter that may affect in any way the liability of the Stockholder
under this Agreement, he or it will within ten (10) days notify the other parties hereto in writing thereof; provided, however, that any failure to give such notice will not reduce a party’s right to indemnification under this Agreement except
to the extent of actual damage incurred by the other party as a result of such failure. The party who would be required to indemnify ( the “Indemnifying Party”) another party (the “Indemnified Party”) will be entitled in his or
its reasonable discretion and at his or its sole expense to handle, control and compromise or settle the defense of any matter that may give rise to a liability under this Agreement; provided, however, that such Indemnifying Party from time to time
provides assurances reasonably satisfactory to the Indemnified Party that (i) the Indemnifying Party is financially capable of pursuing such defense to its conclusion, and (ii) such defense is actually being pursued in a reasonable manner.

  
 4.3 Cooperation. 
  
 The parties will make available to each other, as reasonably requested, and
to any Taxing Authority all information, records or documents relating to any liability for taxes covered by this Agreement and will preserve such information, records and documents until the expiration of any 
  

 5 

 applicable statute of limitations or extensions thereof. The party requesting such information will reimburse the other
party for all reasonable out-of-pocket costs incurred in producing such information. 
  
 4.4 Costs. 
  
 Except to the extent otherwise
provided herein, each party will bear his or its own costs in connection with this Agreement. 
  
 Article V 
  
 5.1 Counterparts and
Facsimile. 
  
 This Agreement may be executed in several
counterparts, each of which will be deemed to be an original, but all of which counterparts collectively will constitute a single instrument representing the agreement among the parties hereto. Transmission of facsimile copies of an executed
counterpart of a signature page of this Agreement will have the same effect as delivery of the manually executed counterpart of this Agreement. 
  
 5.2 Construction of Terms. 
  
 Nothing herein expressed or implied is intended, or will be construed, to confer upon or give any person, firm or corporation, other than the parties
hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement. 
  
 5.3 Governing Law. 
  
 This Agreement and the legal relations between the parties hereto will be governed by and construed in accordance with the substantive laws of the
Commonwealth of Virginia without regard to any choice of law rules. 
  
 5.4
Amendment and Modification. 
  
 This Agreement may be
amended, modified or supplemented only by a writing executed by all the parties hereto. 
  
 5.5 Assignment. 
  
 Except by operation of law or
in connection with the sale of all or substantially all the assets of a party, this Agreement will not be assignable, in whole or in part, directly or indirectly, by any Stockholder without the written consent of the Company or by the Company
without the written consent of the Stockholders. Any attempt to assign any rights or obligations arising under this Agreement without such consent will be void. The provisions of this Agreement will be binding upon and inure to the benefit of, and
be enforceable by, the parties hereto and their respective successors and permitted assigns. 
  

 6 

 5.6 Interpretation. 
  
 The title, article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties,
and will not in any way affect the meaning or interpretation of this Agreement. 
  
 5.7 Severability. 
  
 In the event that any one
or more of the provisions of this Agreement is held to be illegal, invalid or unenforceable in any respect, the same will not in any respect affect the validity, legality or enforceability of the remainder of this Agreement, and the parties will use
their best efforts to replace such illegal, invalid or unenforceable provision with an enforceable provision approximating, to the extent possible, the original intent of the parties. 
  
 5.8 Entire Agreement. 
  
 This Agreement embodies the entire agreement and understanding of the parties hereto in respect to the subject matter contained herein. There are no
representations, promises, warranties, covenants or undertakings other than those expressly set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 
  
 5.9 Further Assurances. 
  
 Subject to the provisions of this Agreement, the parties will acknowledge such other instruments and documents and take all
other actions that may be reasonably required in order to effectuate the purposes of this Agreement. 
  
 5.10 Waivers. 
  
 No
failure or delay on the part of any party in exercising any power or right under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any such right or power or any abandonment or discontinuance of steps to
enforce such right or power preclude any other or further exercise thereof or the exercise of any other right or power. No waiver of any provision of this Agreement nor consent to any departure by the parties therefrom will in any event be effective
unless it is in writing, and then such waiver or consent will be effective only in the specific instance and for the purpose for which it was given. 
  
 5.11 Set-off. 
  
 All payments to be made by any Stockholder under this Agreement will be made without set-off, counterclaim or withholding, all of which are expressly
waived. 
  
 5.12 Change of Law. 
  
 If, due to any change in applicable law or regulations or the interpretation
thereof by any court or other governing body having jurisdiction subsequent to the date of this Agreement, performance of any provision of this Agreement is impracticable or impossible, the parties will use their best efforts to find an alternative
means to achieve the same or substantially the same results as are contemplated by such provision. 
  

 7 

 5.13 Notices. 
  
 All notices under this Agreement will be validly given if in writing and delivered personally or sent by registered mail, postage prepaid to any
Stockholder at the address set forth below his or its name on the signature page to this Agreement or to the Company at: NCI, Inc., 11730 Plaza America Drive, Reston, Virginia 20190, (703) 707-6900, Attention: Chief Financial Officer, or at such
other address as either party may, from time to time, designate in a written notice given in a like manner. Notice given by mail will be deemed delivered five calendar days after the date mailed. 
  
 5.14 Termination. 
  
 This Agreement will terminate and be void, as if it never had been executed, if the Closing Date does not occur on or before
December 31, 2005. 
  
 [Signature Page
Follows] 
  

 8 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

  

			
	 NCI, INC.

		
	 By:
	 	   /s/ Judith L. Bjornaas

	 Name: Judith L. Bjornaas

	 Title: Chief Financial Officer

	
	 STOCKHOLDERS

	
	     /s/ Charles K. Narang

	 Charles K. Narang, in his individual capacity
 Address: c/o NCI, Inc..
 11730 Plaza America Drive
 Reston, Virginia 20190

	
	 THE SHASHI K. NARANG 2004 GRAT, UNDER
 TRUST AGREEMENT DATED DECEMBER 29,
 2004

	
	     /s/ Jonathan M. Forster

	 By: Jonathan M. Forster
 Title: Trustee

	
	 THE CHANDER K. NARANG 2004 GRAT,
 UNDER TRUST AGREEMENT DATED
 DECEMBER 29, 2004

	
	     /s/ Jonathan M. Forster

	 By: Jonathan M. Forster
 Title: Trustee

  

 9

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