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                                                                   EXHIBIT 10.21

                                                   Executive: __________________

              DYNAMICS RESEARCH CORPORATION SPECIAL SEVERANCE PLAN

                           AS AMENDED ON MAY 14, 2003

Dynamics Research Corporation's (DRC) Special Severance Plan will, in the event
of a Change of Control, protect selected and participating senior executives by
providing a generous compensation arrangement should they be adversely affected
by the Change of Control, and help DRC retain qualified employees and maintain a
stable work environment.

SECTION 1: DEFINITIONS

The following terms shall have the meanings set forth below:

1.1.     Board - The Board of Directors of the Company.

1.2.     Cause - (a) an Employee's willful and continued failure to
         substantially perform his or her duties, or (b) an Employee's willful
         engagement in conduct that is demonstrably and materially injurious,
         monetarily or otherwise, to a DRC Company or a Successor Employer.

1.3.     Change in Control - With respect to an Employee, the consummation of
         any transaction after the Effective Date, that results in the business
         of the Employer being conducted by an entity that is not a DRC Company.
         A Change in Control may be deemed to have occurred with respect to a
         single Employee or a group of Employees under the Plan without
         occurring with respect to other Employees under the Plan.
         Notwithstanding the foregoing, a Change in Control shall not be deemed
         to have occurred as a result of or in connection with (y) the
         distribution, whether by dividend or otherwise, of shares of the
         capital stock of DRC to its stockholders in substantially the same
         proportion as the shares are owned by its stockholders, or (z) the sale
         of all or any shares of capital stock of a DRC Company (i) pursuant to
         a registration statement filed with and declared effective by the
         Securities and Exchange Commission, or (ii) to any employees or
         employee benefit plan, or pursuant to any employee stock ownership or
         stock option plan or other fringe benefit plan, program, or practice
         sponsored, maintained, or administered by any company that immediately,
         prior to such sale was a DRC Company.

1.4.     Company - Dynamics Research Corporation, a Massachusetts corporation,
         and its successors.

1.5.     DRC - Dynamics Research Corporation and all of its Subsidiaries.

         1.6. Effective Date - January 1, 2001.

1.7.     Employee - a person whose participation in the Plan has been authorized
         by the Board or its designated representative and who has executed a
         participation agreement containing such terms, conditions, and
         limitations as may be prescribed and amended by the Board from time to
         time. An Employee shall automatically cease to be an Employee and a
         participant in the Plan if and when, prior to a Change in Control with
         respect to the Employee, his or her employment with DRC terminates for
         any reason.

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                                                   Executive: __________________

1.8.     Employer - The Company group, division, or operating unit to which an
         Employee is rendering substantially all of his or her services from
         time to time.

1.9.     ERISA - The Employee Retirement Income Security Act of 1974, as it
         maybe amended from time to time.

1.10.    Good Reason - Without an Employee's express written consent, the
         occurrence on or after a Change in Control of any of the following
         circumstances, unless such circumstances are corrected fully prior to
         the Severance Date:

         (a) a reduction in the Employee's Pay; or

         (b) the Employer's requiring the Employee to transfer to another
             office, facility, or job location more than fifty (50) miles from
             the Employee's then current office, facility, or job location.

1.11.    Month of Pay - The Employee's Pay prorated for one month in accordance
         with the Employee's regular payroll procedures.

1.12.    Pay - The sum of (a) the Employee's current yearly salary, plus (b) the
         greater of the Employee's most recent annual incentive compensation
         target award immediately prior to the Change in Control or the
         Employees most recent annual incentive compensation target award
         immediately prior to the Severance Date.

1.13.    Plan - The DRC Special Severance Plan, as set forth herein and as it
         may be amended from time to time. All such amendments shall be
         incorporated herein by reference as of the date of such amendment.

1.14.    Plan Administrator - The Compensation Committee of the Board of
         Directors of the Company, or such individuals or others as they shall
         appoint to administer the Plan.

1.15.    Salary - The greater of an Employee's annual base salary rate
         immediately prior to the applicable Change in Control or the Employee's
         annual base salary rate immediately prior to the Severance Date. Salary
         does not include bonuses or any other remuneration.

1.16.    Severance - The termination, while the Employee is an Employee, of his
         or her employment with the Company and the Successor Employers on or
         after the Effective Date and on or within two years after the first
         applicable Change in Control of the Employer, (i) by the Company and
         the Successor Employers other than for Cause, or (ii) by the Employee
         for Good Reason. An Employee shall not be considered to have incurred a
         Severance if his or her employment is discontinued by reason of (a) the
         Employee's voluntary termination of employment other than for Good
         Reason, (b) the Employee's mandatory retirement as permitted by
         applicable law, (c) the Employee's death, (d) a physical or mental
         condition that causes the Employee to be unable to substantially
         perform his or her duties including, without limitation, any condition
         that entitles the Employee to benefits under any sick pay or disability
         income policy or program of a the Company or a Successor Employer, (e)
         the Employer's requiring the Employee to transfer to another office,
         facility, or job location fifty (50) miles or less from the Employee's
         then current office, facility, or job location.

1.17.    Severance Date - The effective date of an Employee's Severance from
         employment with all DRC Companies and Successor Employers.

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                                                   Executive: __________________

1.18.    Severance Pay - Payments made to Employees pursuant to Section 2.1.

1.19.    Successor Employers - After a Change in Control of an Employer, the
         Employer, any company or other entity that has acquired or acquires the
         Employer, and all affiliates (as such term is defined in the
         regulations under the Securities Act of 1933) of the Employer or of any
         company or other entity that has acquired or acquires the Employer.
         "Successor Employer" means any of the Successor Employers.

SECTION 2: BENEFITS

2.1.     Each Employee who incurs a Severance shall be entitled to receive
         Severance Pay equal to the number of Months of Pay, determined as
         follows:

<TABLE>
<CAPTION>
           Salary                     Months of Pay
           ------                     -------------
<S>                                   <C>
Less than $110,000                          6

More than $110,000 and less
than or equal to $160,000                   9

More than $160,000 and less
than or equal to $210,000                  12

More than $210,000                         18
</TABLE>

2.2.     Each Salary parameter figure set forth in 2.1 shall automatically
         increase by 5% on each anniversary of the Effective Date, provided,
         however that no such increase shall ever cause or result in an Employee
         receiving a lesser Months of Pay benefit, except for other
         disqualifying conditions provided for herein, then the Employee was
         previously entitled before the automatic increase.

2.3.     No Employee shall be eligible to receive Severance Pay or any other
         benefits under the Plan unless he or she first executes a valid and
         legally binding release in writing, in a form and manner prescribed by
         the Plan Administrator, releasing Dynamics Research Corporation, the
         Successor Employers, and their employees, officers, and directors from
         claims and liabilities of any kind relating to his or her employment.

2.4.     Severance Pay will be paid to eligible Employees in one lump sum, less
         required legal deductions. Severance Pay will be paid after the
         Severance Date on the first pay day which is more than seven (7) days
         following the Employee's execution of a valid and legally binding
         release in accordance with the provisions of Section 2.3.

2.5.     If the Company or a Successor Employer are or should become obligated
         by law or by contract to pay an Employee severance pay, salary
         continuance, notice pay, a termination indemnity, or the like, or if a
         the Company or a Successor Employer are or should become obligated by
         law or by contract to provide advance notice of separation ("Notice")
         to an Employee, then any Severance Pay otherwise payable under the Plan
         to the Employee shall be reduced by the amount of any such severance
         pay, salary continuance, notice pay, termination indemnity, or the
         like, and by the amount of compensation received with respect to any
         Notice period (including any Notice

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                                                   Executive: __________________

         period which may be required under the Worker Adjustment and Retraining
         Notification Act) during which the Employee is not required to work.

2.6.     For the period after the Severance Date equal to the Months of Pay used
         in Section 2.1 to compute the amount of Severance Pay, the Company
         shall arrange to provide the Employee with life and health insurance
         benefits substantially similar to those that the Employee was receiving
         immediately prior to the Severance Date, but, except as otherwise
         required by law, coverage under those benefits shall not continue after
         the Employee becomes an employee of another employer and covered under
         another group health or group life plan, respectively.

SECTION 3: CLAIMS OPERATION AND INTERPRETATION

3.1.     The Plan shall be interpreted, administered, and operated by the Plan
         Administrator, who shall have complete authority, in his or her sole
         discretion, to determine who is eligible for benefits under the Plan,
         to interpret the Plan, to prescribe, amend, interpret and rescind rules
         and regulations relating to the Plan, and to make all of the
         determinations necessary or advisable for the administration of the
         Plan.

3.2.     All questions of any character whatsoever arising in connection with
         the interpretation of the Plan or its administration or operation shall
         be submitted to and settled and determined by the Plan Administrator in
         an equitable and fair manner in accordance with the procedure for
         claims and appeals described in Section 3.4. Subject to the provisions
         of Section 6.4, any such settlement and determination shall be final
         and conclusive, and shall bind and may be relied upon by the Company,
         each of the Employees, and all other parties in interest.

3.3.     The Plan Administrator may delegate any of their duties hereunder to
         such person or persons as they may designate from time to time.

3.4.     An Employee shall file a written claim with the Plan Administrator in
         order to receive severance benefits under the Plan. The Plan
         Administrator shall, within sixty (60) days after receipt of the
         written claim, send a written notification to the Employee as to its
         disposition. In the event the claim is wholly or partially denied, the
         written notification shall (a) state the specific reason or reasons for
         the denial, (b) make specific reference to pertinent Plan provisions on
         which the denial is based, (c) provide a description of any additional
         material or information necessary for the Employee to perfect the claim
         and an explanation of why such material or information is necessary,
         and (d) set forth the procedure by which the Employee may appeal the
         denial of his or her claim. In the event an Employee wishes to appeal
         the denial of his or her claim, he or she may request a review of the
         denial by making application in writing to the Plan Administrator
         within sixty (60) days after receipt of the denial. The Employee (or
         his or her duly authorized legal representative) may, upon written
         request to the Plan Administrator, review any documents pertinent to
         his or her claim, and submit in writing issues and comments in support
         of his or her position. Within sixty (60) days after receipt of a
         written appeal (unless special circumstances, such as the need to hold
         a hearing, require an extension of time, but in no event more than one
         hundred twenty (120) days after such receipt) the Plan Administrator
         shall notify the Employee of the final decision. The final decision
         shall be in writing and shall include specific reasons for the
         decision, written in a manner calculated to be understood by the
         claimant, and specific references to the pertinent Plan provisions on
         which the decision is based. In the event the Employee wishes to appeal
         from the Plan Administrator's decision, the Employee may submit the
         claim to final and binding arbitration, in accordance with Section 6.4,
         by giving written notice to

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                                                   Executive: __________________

         the Plan Administrator within sixty (60) days after receipt of the Plan
         Administrators decision. No arbitration for benefits under the Plan may
         be commenced unless and until the Employee has submitted a written
         claim for benefits, has been notified that the claim has been denied,
         has filed a written request for review of the denied claim, and has
         been notified in writing that the denial of the claim has been
         affirmed, all in accordance with the claims procedure described above.

SECTION 4: PLAN MODIFICATION OR TERMINATION

4.1.     The Plan shall terminate upon the earliest of (a) the sixth anniversary
         of the Effective Date, or (b) the date on which more than 50% of the
         shares of capital stock of the Company are distributed, whether by
         dividend or otherwise, to their stockholders, or (c) the date on which
         more than 50% of the shares of capital stock of the Company or any
         parent company of the Company are sold by a DRC Company (i) pursuant to
         a registration statement filed with and declared effective by the
         Securities and Exchange Commission, or (ii) to any employees or
         employee benefit plan, or pursuant to any employee stock ownership or
         stock option plan or other fringe benefit plan, program or practice
         sponsored, maintained or administered by a the Company, or any
         affiliate (as such term is defined in the regulations under the
         Securities Act of 1933) of the Company. Notwithstanding the foregoing,
         in the event there has been a Change in Control of an Employer prior to
         the termination of the Plan, the Plan shall terminate with respect to
         the Employees of such Employer upon the second anniversary of the
         Change in Control.

4.2.     The Plan may be amended by the Board at any time; provided, however,
         that except as otherwise provided in Section 5.2, until the expiration
         date or termination date of the Plan, no amendment may be made which
         would be adverse to the eligibility or level of benefits in Section 2
         for any Employee or, after a Change in Control, similarly adverse to
         the benefits of any Employee or to the interests of a DRC Company.

SECTION 5: GOVERNMENT LAWS AND REGULATIONS

5.1.     The Plan, as a "severance pay arrangement" within the meaning of
         Section 3(2) (B) (i) of ERISA, is intended to be excepted from the
         definitions of "employee pension benefit plan" and "pension plan" in
         Section 3(2) of ERISA, and is intended to meet the descriptive
         requirements of a plan constituting a "severance pay plan" within the
         meaning of regulations published by the Secretary of Labor at Title 29,
         Code of Federal Regulations, Section 2510.3-2(b).

5.2.     The Plan and the rights of Employees to Severance Pay under the Plan
         shall be subject to all applicable governmental laws and regulations.
         Notwithstanding any other provision of the Plan to the contrary, the
         Board may in its discretion make such changes in the Plan as may be
         required to conform the Plan to all applicable governmental laws and
         regulations.

SECTION 6: GENERAL PROVISIONS

6.1.     Nothing in the Plan shall be deemed to give any Employee the right to
         be retained in the employ of any company or to interfere with the right
         of any company to discharge an Employee at any time and For any lawful
         reason, with or without notice or cause. I n addition, nothing in the
         Plan shall restrict an Employees right to terminate his or her
         employment at any time.

6.2.     Except as otherwise provided herein or by law, no right or interest of
         an Employee under the Plan shall be assignable or transferable, in
         whole or in part, either directly or by operation of law

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                                                   Executive: __________________

         or otherwise, including without limitation by execution, levy,
         garnishment, attachment, pledge, or any other manner, no attempted
         assignment or transfer thereof shall be effective; and no right or
         interest of an Employee under the plan shall be liable for, or subject
         to, any obligation or liability of an Employee. When a payment is due
         under the Plan to an Employee and the Employee is unable to care for
         his or her affairs, payment may be made directly to his or her legal
         guardian or personal representative.

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                                                   Executive: __________________

6.3.     The Company may, at any time and from time to time, without any
         Employee's consent, assign its interest in the Plan with respect to one
         or more Employees to a DRC Company which shall assume all of the
         Company's obligations hereunder with respect to such Employees and,
         upon such assignment, the assignee shall be substituted for the Company
         for all purposes under the Plan with respect to such Employees. Any
         such assignment and assumption shall constitute a novation and
         assignee(s) shall be substituted automatically for the Company with
         respect to such Employees. Any such assignee shall have the same rights
         as the assignor to further assign the Plan. In connection with any
         Change in Control of an Employer, the Company may, assign its interest
         in the Plan with respect to any or all affected Employees to any entity
         or entities that, upon the Change in Control, will qualify as a
         Successor Employer, provided that such assignee assumes all of the
         Company's obligations hereunder with respect to such Employees. Any
         such assignment to one or more Successor Employers shall not prevent
         the transaction that results in the business of the Employer being
         conducted by an entity that is not a DRC Company from constituting a
         Change in Control.

6.4.     Any dispute or controversy arising out of or relating to the Plan (or
         to benefits which may be provided under the Plan), as well as any
         dispute or controversy arising out of or relating to the termination of
         an Employee's employment with any Employer, including any claims based
         on federal, state or local laws (including employment discrimination or
         wrongful dismissal laws), shall be settled exclusively by final and
         binding arbitration, conducted before a neutral arbitrator with
         expertise in employment law, including ERISA, in accordance with the
         Voluntary Labor Association Rules of the American Arbitration
         Association. In reaching a decision, the arbitrator shall interpret,
         apply and be bound by the Plan and by applicable law. The arbitrator
         shall apply the same standard of review in disputes relating to the
         Plan or to Plan benefits as a court of competent jurisdiction would
         apply under ERISA. The arbitrator shall have no authority to add to,
         detract from, or modify the Plan or any law in any respect. The
         arbitrator may grant any remedy or relief that may be necessary to make
         the injured party whole, provided that in no event may the arbitrator
         grant any remedy or relief that a court of competent jurisdiction could
         not grant, nor any relief greater than that sought by the injured
         party. Judgment may be entered on the arbitrator's award in any court
         of competent jurisdiction.

6.5.     The Plan is unfunded. Except as provided in Section 6.3, the liability
         for Severance Pay and the other obligations under the Plan are solely
         the responsibility of the Company. Severance Pay shall be payable from
         the Company's general assets, and no other company shall have any
         responsibility or liability under the Plan. However, the Company's
         liabilities under the Plan shall be discharged to the extent of any
         payment received by the Employee from any other company made for that
         purpose and on the Company's behalf or for its benefit.

6.6.     If any provision of the Plan shall be held void or unenforceable, the
         remainder of the Plan shall remain in full force and effect, and the
         Plan shall be construed as if such void or unenforceable provision were
         omitted; provided that in interpreting this Plan the arbitrator shall
         replace such void or unenforceable provision with an effective and
         legally permissible provision, the effect of which shall be identical
         to, or as close as reasonably possible to, the effect of the original
         provision.

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                                                   Executive: __________________

6.7.     As used in this Plan, any reference to the masculine, feminine, or
         neuter gender shall include all genders, the plural shall include the
         singular, and the singular shall include the plural.

IN WITNESS WHEREOF, the Company has caused the Plan to be adopted this
thirty-first day of October, 2000.

                             DYNAMICS RESEARCH CORPORATION

                             ___________________________          __________
                             James P. Regan                       Date
                             Chairman, President and CEO

Acknowledged and agreed:

By: _________________________
         Participant

Date: _______________________

                                        8<PAGE>
                                                                   Exhibit 10.22

                         DYNAMICS RESEARCH CORPORATION
                              2003 INCENTIVE PLAN

1. ADMINISTRATION

     Subject to the express provisions of the Plan, the Administrator has the
authority to interpret the Plan; determine eligibility for and grant Awards;
determine, modify or waive the terms and conditions of any Award; prescribe
forms, rules and procedures (which it may modify or waive); and otherwise do all
things necessary to implement the Plan. Once an Award has been communicated in
writing to a Participant, the Administrator may not, without the Participant's
consent, alter the terms of the Award so as to affect adversely the
Participant's rights under the Award, unless the Administrator expressly
reserved the right to do so in writing at the time of such communication. In the
case of any Award intended to be eligible for the performance-based compensation
exception under Section 162(m), the Administrator shall exercise its discretion
consistent with qualifying the Award for such exception.

2. LIMITS ON AWARD UNDER THE PLAN

     a.   Number of Shares. A maximum of 400,000 shares of Stock may be
delivered in satisfaction of Awards under the Plan. For purposes of the
preceding sentence, shares that have been forfeited in accordance with the
terms of the applicable Award and shares held back in satisfaction of the
exercise price or tax withholding requirements from shares that would otherwise
have been delivered pursuant to an Award shall not be considered to have been
delivered under the Plan. Also, the number of shares of Stock delivered under
an Award shall be determined net of any previously acquired Shares tendered by
the Participant in payment of the exercise price or of withholding taxes.

     b.   Type of Shares. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the
Company and held in treasury. No fractional shares of Stock will be delivered
under the Plan.

     c.   Option and SAR Limits. The maximum number of shares of Stock for
which Stock Options may be granted to any person in any calendar year, the
maximum number of shares of Stock subject to SARs granted to any person in any
calendar year and the aggregate maximum number of shares of Stock subject to
other Awards that may be delivered (or the value of which may be paid) to any
person in any calendar year under the Plan shall each be 265,000. For purposes
of the preceding sentence, the repricing of a Stock Option or SAR shall be
treated as a new grant to the extent required under Section 162(m). Subject to
these limitations, each person eligible to participate in the Plan shall be
eligible in any year to receive Awards covering up to the full number of shares
of Stock then available for Awards under the Plan.

     d.   Other Award Limits. No more than $1,000,000 may be paid to any
individual with respect to any Cash Performance Award (other than an Award
expressed in terms of shares of Stock or units representing Stock, which shall
instead be subject to the limit set forth in Section 2.c. above). In applying
the dollar limitation of the preceding sentence: (A) multiple Cash Performance
Awards to the same individual that are determined by reference to performance
periods of one year or less ending

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          with or within the same fiscal year of the Company shall be subject in
          the aggregate to one limit of such amount, and (B) multiple Cash
          Performance Awards to the same individual that are determined by
          reference to one or more multi-year performance periods ending in the
          same fiscal year of the Company shall be subject in the aggregate to a
          separate limit of such amount.

3. ELIGIBILITY AND PARTICIPATION

     The Administrator will select Participants from among those key Employees,
directors and other individuals or entities providing services to the Company
or its Affiliates who, in the opinion of the Administrator, are in a position
to make a significant contribution to the success of the Company and its
Affiliates. Eligibility for ISOs is further limited to those individuals whose
employment status would qualify them for the tax treatment described in
Sections 421 and 422 of the Code.

4. RULES APPLICABLE TO AWARDS

     a. All Awards

          (1) Terms of Awards. The Administrator shall determine the terms of
          all Awards subject to the limitations provided herein.

          (2) Performance Criteria. Where rights under an Award depend in
          whole or in part on satisfaction of Performance Criteria, actions by
          the Company that have an effect, however material, on such Performance
          Criteria or on the likelihood that they will be satisfied will not be
          deemed an amendment or alteration of the Award.

          (3) Alternative Settlement. The Company may at any time extinguish
          rights under an Award in exchange for payment in cash, Stock (subject
          to the limitations of Section 2) or other property on such terms as
          the Administrator determines, provided the holder of the Award
          consents to such exchange.

          (4) Transferability Of Awards. Except as the Administrator otherwise
          expressly provides, Awards may not be transferred other than by will
          or by the laws of descent and distribution and during a Participant's
          lifetime an Award requiring exercise may be exercised only by the
          Participant (or in the event of the Participant's incapacity, the
          person or persons legally appointed to act on the Participant's
          behalf).

          (5) Vesting. Without limiting the generality of Section 1, the
          Administrator may determine the time or times at which an Award will
          vest (i.e., become free of forfeiture restrictions) or become
          exercisable and the terms on which an Award requiring exercise will
          remain exercisable. Unless the Administrator expressly provides
          otherwise:

               (A) immediately upon the cessation of the Participant's
               employment or other service relationship with the Company and its
               Affiliates, all Awards (other than Stock Options and SARs) held
               by the Participant (or by a permitted transferee under Section
               4.a.(4)) immediately prior to such cessation of employment or
               other service will be forfeited if not then vested and, where
               exercisability is relevant, will cease to be exercisable;

               (B) all Stock Options and SARs held by a Participant (or by a
               permitted transferee under Section 4.a.(4)) immediately prior to
               the Participant's death, to the extent then exercisable, will
               remain exercisable for the lesser of (i) the one-year period
               ending with the first anniversary of the Participant's death or
               (ii) the period ending on the latest date on which such Stock
               Option or SAR could have been exercised without regard to this
               Section 4.a.(5), and shall thereupon terminate;

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     (C)  except as provided in (D) below, all Stock Options and SARs held by a
     Participant (or by a permitted transferee under Section 4.a.(4))
     immediately prior to the cessation of the Participant's employment or other
     service relationship for reasons other than death, to the extent then
     exercisable, will remain exercisable for the lessor of (i) a period of
     three months or (ii) the period ending on the latest date on which such
     Stock Option or SAR could have been exercised without regard to this
     Section 4.a.(5), and shall thereupon terminate; and

     (D)  all Stock Options and SARs held by the Participant (or by a permitted
     transferee of the Participant under Section 4.a.(4)) whose cessation of
     employment or other service relationship is determined by the Administrator
     in its sole discretion to result from reasons which cast such discredit on
     the Participant so as to justify immediate termination of the Award shall
     immediately terminate upon such cessation.

     (E)  unless the Administrator expressly provides otherwise, a Participant's
     "employment or other service relationship with the Company and its
     Affiliates" will be deemed to have ceased, in the case of an employee
     Participant, upon termination of the Participant's employment with the
     Company and its Affiliates (whether or not the Participant continues in the
     service of the Company or its Affiliates in some capacity other than that
     of an employee of the Company or its Affiliates), and in the case of any
     other Participant, when the service relationship in respect of which the
     Award was granted terminates (whether or not the Participant continues in
     the service of the Company or its Affiliates in some other capacity).

(6)  Taxes. The Administrator will make such provision for the withholding of
taxes as it deems necessary. The Administrator may, but need not, hold back
shares of Stock from an Award or permit a Participant to tender previously
owned shares of Stock in satisfaction of tax withholding requirements. In no
event shall Stock be tendered or held back by the Company in excess of the
minimum amount required to be withheld for Federal, state, and local taxes.

(7)  Dividend Equivalents. The Administrator may provide for the payment of
amounts in lieu of cash dividends or other cash distributions with respect to
Stock subject to an Award if and in such manner as it deems appropriate.

(8)  Rights Limited. Nothing in the Plan shall be construed as giving any
person the right to continued employment or service with the Company or its
Affiliates, or any rights as a shareholder except as to shares of Stock
actually issued under the Plan. The loss of existing or potential profit in
Awards will not constitute an element of damages in the event of termination of
employment or service for any reason, even if the termination is in violation
of an obligation of the Company or Affiliate to the Participant.

(9)  Section 162(m). The Administrator in its discretion may grant Performance
Awards that are intended to qualify for the performance-based compensation
exception under Section 162(m) and Performance Awards that are not intended to
so qualify. In the case of an Award intended to be eligible for the
performance-based compensation exception under Section 162(m), the Plan and such
Award shall be construed to the maximum extent permitted by law in a manner
consistent with qualifying the Award for such exception. In the case of a
Performance Award intended to qualify as performance-based for the purposes of
Section 162(m), the Administrator shall pre-establish in writing one or more
specific Performance Criteria no later than 90 days after the commencement of
the period of service to which the performance relates (or at such earlier time
as is required to qualify the Award as performance-based under Section 162(m)).
Prior to payment of any Performance Award intended to

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        qualify as performance-based under Section 162(m), the Administrator
        shall certify whether the Performance Criteria have been attained, and
        such determination shall be final and conclusive. If the Performance
        Criteria with respect to any such Award are not attained, no other Award
        shall be provided in substitution of the Performance Award. The
        provisions of this Section 4.a.(9) shall be construed in a manner that
        is consistent with the regulations under Section 162(m).

     b. Awards Requiring Exercise

        (1) Time And Manner Of Exercise. Unless the Administrator expressly
        provides otherwise, (a) an Award requiring exercise by the holder will
        not be deemed to have been exercised until the Administrator receives a
        written notice of exercise (in form acceptable to the Administrator)
        signed by the appropriate person and accompanied by any payment required
        under the Award; and (b) if the Award is exercised by any person other
        than the Participant, the Administrator may require satisfactory
        evidence that the person exercising the Award has the right to do so.

        (2) Exercise Price. The Administrator shall determine the exercise price
        of each Stock Option; provided, that each Stock Option intended to
        qualify for the performance-based exception under Section 162(m) of the
        Code and each ISO must have an exercise price that is not less than the
        fair market value of the Stock subject to the Stock Option determined as
        of the date of grant. An ISO granted to an Employee described in Section
        422(b)(5) of the Code must have an exercise price that is not less than
        110% of such fair market value and must by its terms provide it is not
        exercisable after the expiration of five years from its date of grant.

        (3) Payment Of Exercise Price, If Any. Where the exercise of an Award is
        to be accompanied by payment, the Administrator may determine the
        required or permitted forms of payment, subject to the following: (a)
        all payments will be by cash or check acceptable to the Administrator,
        or, if so permitted by the Administrator (with the consent of the
        optionee of an ISO if permitted after the grant), (i) through the
        delivery of shares of Stock which have been outstanding for at least six
        months (unless the Administrator approves a shorter period) and which
        have a fair market value equal to the exercise price, (ii) by delivery
        of a promissory note of the person exercising the Award to the Company,
        payable on such terms as are specified by the Administrator, (iii) by
        delivery of an unconditional and irrevocable undertaking by a broker to
        deliver promptly to the Company sufficient funds to pay the exercise
        price, or (iv) by any combination of the foregoing permissible forms of
        payment; and (b) where shares of Stock issued under an Award are part of
        an original issue of shares, the Award shall require an exercise price
        equal to at least the par value of such shares.

     c. Awards Not Requiring Exercise

        Awards of Restricted Stock and Unrestricted Stock may be made in return
        for either (i) services determined by the Administrator to have a value
        not less than the par value of the Awarded shares of Stock, or (ii) cash
        or other property having a value not less than the par value of the
        Awarded shares of Stock plus such additional amounts (if any) as the
        Administrator may determine payable in such combination and type of
        cash, other property (of any kind) or services as the Administrator may
        determine.

                                       4
<PAGE>
5.   EFFECT OF CERTAIN TRANSACTIONS

     a.   Mergers, etc.

          Immediately prior to a Covered Transaction (other than an Excluded
          Transaction in which the outstanding Awards have been assumed or
          substituted for as provided below), all outstanding Awards shall vest
          and, if relevant, become exercisable, all Performance Criteria and
          other conditions to any Award shall be deemed satisfied, and all
          deferrals measured by reference to or payable in shares of Stock shall
          be accelerated. Upon consummation of a Covered Transaction, all
          Awards then outstanding and requiring exercise or delivery shall
          terminate unless assumed by an acquiring or surviving entity or its
          affiliate as provided below.

          In the event of a Covered Transaction, the Administrator may provide
          for substitute or replacement Awards from, or the assumption of
          Awards by, the acquiring or surviving entity or its affiliates on
          such terms as the Administrator determines.

     b.   Changes In And Distributions With Respect To The Stock

          (1)  Basic Adjustment Provisions. In the event of a stock dividend,
          stock split or combination of shares, recapitalization or other change
          in the Company's capital structure, the Administrator will make
          appropriate adjustments to the maximum number of shares that may be
          delivered under the Plan under Section 2.a. and to the maximum share
          limits described in Section 2.c., and will also make appropriate
          adjustments to the number and kind of shares of stock or securities
          subject to Awards then outstanding or subsequently granted, any
          exercise prices relating to Awards and any other provision of Awards
          affected by such change.

          (2)  Certain Other Adjustments. The Administrator may also make
          adjustments of the type described in paragraph (1) above to take into
          account distributions to common stockholders other than those
          provided for in Section 5.a. and 5.b.(1), or any other event, if the
          Administrator determines that adjustments are appropriate to avoid
          distortion in the operation of the Plan and to preserve the value of
          Awards made hereunder; provided, that no such adjustment shall be
          made to the maximum share limits described in Section 2.c. or 2.d.,
          or otherwise to an Award intended to be eligible for the
          performance-based exception under Section 162(m), except to the
          extent consistent with that exception, nor shall any change be made
          to ISOs except to the extent consistent with their continued
          qualification under Section 422 of the Code.

          (3)  Continuing Application of Plan Terms. References in the Plan to
          shares of Stock shall be construed to include any stock or securities
          resulting from an adjustment pursuant to Section 5.b.(1) or 5.b.(2)
          above.

6.   LEGAL CONDITIONS ON DELIVERY OF STOCK

     The Company will not be obligated to deliver any shares of Stock pursuant
to the Plan or to remove any restriction from shares of Stock previously
delivered under the Plan until the Company's counsel has approved all legal
matters in connection with the issuance and delivery of such shares; if the
outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and all conditions of the Award have been satisfied or waived. If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to exercise of the Award, such
representations or

                                       5
<PAGE>
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act. The Company may require that certificates evidencing
Stock issued under the Plan bear an appropriate legend reflecting any
restriction on transfer applicable to such Stock.

7.   AMENDMENT AND TERMINATION

     Subject to the second and third sentences of Section 1, the Administrator
may at any time or times amend the Plan or any outstanding Award for any purpose
which may at the time be permitted by law, or may at any time terminate the Plan
as to any further grants of Awards; provided, that (except to the extent
expressly required or permitted by the Plan) no such amendment will, without the
approval of the stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to continue to qualify
under Section 422 of the Code and for Awards to be eligible for the
performance-based exception under Section 162(m).

8.   NON-LIMITATION OF THE COMPANY'S RIGHTS

     The existence of the Plan or the grant of any Award shall not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.

9.   GOVERNING LAW

     The Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.

10.  DEFINED TERMS

     The following terms, when used in the Plan, shall have the meanings and be
subject to the provisions set forth below:

"Administrator": The Committee. With respect to ministerial tasks deemed
appropriate by the Committee, the term "Administrator" shall also include such
persons (including Employees) to whom the Committee shall have delegated such
tasks.

"Affiliate": Any corporation or other entity owning, directly or indirectly,
50% or more of the outstanding Stock of the Company, or in which the Company or
any such corporation or other entity owns, directly or indirectly, 50% of the
outstanding capital stock (determined by aggregate voting rights) or other
voting interests.

"Award": Any or a combination of the following:

     (i)       Stock Options.
     (ii)      SARs.
     (iii)     Restricted Stock.
     (iv)      Unrestricted Stock.
     (v)       Deferred Stock.
     (vi)      Cash Performance Awards.
     (viii)    Grants of cash, or loans, made in connection with other Awards in
               order to help defray in whole or in part the economic cost
               (including tax cost) of the Award to the Participant.

"Board": The Board of Directors of the Company.

                                       6
<PAGE>
"Cash Performance Award": A Performance Award payable in cash. The right of the
Company under Section 4.a.(3) to extinguish an Award in exchange for cash or
the exercise by the Company of such right shall not make an Award otherwise not
payable in cash a Cash Performance Award.

"Code": The U.S. Internal Revenue Code of 1986 as from time to time amended and
in effect, or any successor statute as from time to time in effect.

"Committee": The Compensation Committee of the Board. In the case of Awards
granted to officers of the Company, the Committee shall be comprised solely of
two or more outside directors within the meaning of Section 162(m).

"Company": Dynamics Research Corporation.

"Covered Transaction": Any of (i) a consolidation or merger in which the
Company is not the surviving corporation or which results in any individual,
entity or "group" (within the meaning of section 13(d) of the Securities
Exchange Act of 1934) acquiring the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) directly or indirectly of more
than 50% of either the then outstanding shares of common stock of the Company
or the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors, (ii) a sale or
transfer of all or substantially all the Company's assets, or (iii) a
dissolution or liquidation of the Company.

"Deferred Stock": A promise to deliver Stock or other securities in the future
on specified terms.

"Employee": Any person who is employed by the Company or an Affiliate.

"Excluded Transaction": A Covered Transaction in which (i) the shares of common
stock of the Company or the voting securities of the Company entitled to vote
generally in the election of directors are acquired directly from the Company;
or (ii) the shares of common stock of the Company or the voting securities of
the Company entitled to vote generally in the election of directors are
acquired by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or
(iii) (a) the beneficial owners of the outstanding shares of common stock of
the Company, and of the securities of the Company entitled to vote generally in
the election of directors, immediately prior to such transaction beneficially
own, directly or indirectly, in substantially the same proportions immediately
following such transaction more than 50% of the outstanding shares of common
stock and of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
corporation (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) resulting from
such transaction excluding such ownership as existed prior to the transaction
and (b) at least a majority of the members of the board of directors of the
corporation resulting from such transaction were members of the board of
directors at the time of the execution of the initial agreement, or of the
action of the Board, authorizing such transaction.

"ISO": A Stock Option intended to be an "incentive stock option" within the
meaning of Section 422 of the Code.

"Participant": An Employee, director or other person providing services to the
Company or its Affiliates who is granted an Award under the Plan.

                                       7
<PAGE>
"Performance Award": An Award subject to Performance Criteria.

"Performance Criteria": Specified criteria the satisfaction of which is a
condition for the exercisability, vesting or full enjoyment of an Award. For
purposes of Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion shall mean an objectively determinable measure of performance relating
to any of the following (determined either on a consolidated basis or, as the
context permits, on a divisional, subsidiary, line of business, project,
contract or geographical basis or in combinations thereof): (i) sales; revenues;
assets; liabilities; costs; expenses; earnings before or after deduction for all
or any portion of interest, taxes, depreciation, amortization or other items,
whether or not on a continuing operations or an aggregate or per share basis;
return on equity, investment, capital or assets; one or more operating ratios;
borrowing levels, leverage ratios or credit rating; market share; capital
expenditures; cash flow; working capital requirements; stock price; stockholder
return; sales, contribution or gross margin, of particular products or services;
particular operating or financial ratios; customer acquisition, expansion and
retention; or any combination of the foregoing; or (ii) acquisitions and
divestitures (in whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations; recapitalizations,
restructurings, financings (issuance of debt or equity) and refinancings;
transactions that would constitute a change of control; or any combination of
the foregoing. A Performance Criterion measure and targets with respect thereto
determined by the Administrator need not be based upon an increase, a positive
or improved result or avoidance of loss.

"Plan": The Dynamics Research Corporation 2003 Incentive Plan as from time to
time amended and in effect.

"Restricted Stock": An Award of Stock subject to restrictions requiring that
such Stock be redelivered to the Company if specified conditions are not
satisfied.

"Section 162(m)": Section 162(m) of the Code.

"SARs": Rights entitling the holder upon exercise to receive cash or Stock, as
the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by
which the Stock has appreciated in value since the date of the Award.

"Stock": Common Stock of the Company, par value $.10 per share.

"Stock Options": Options entitling the recipient to acquire shares of Stock upon
payment of the exercise price.

"Unrestricted Stock": An Award of Stock not subject to any restrictions under
the Plan.

                                       8

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