8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 28, 2005

ALION SCIENCE AND TECHNOLOGY CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	333-89756	54-2061691
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10 West 35th Street
Chicago, IL 60616
(312) 567-4000 1750 Tysons Boulevard
Suite 1300
McLean, VA 22102
(703) 918-4480

(Address, including Zip Code and Telephone Number, including
Area Code, of Principal Executive Offices)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On November 28, 2005, the Chief Executive Officer of Alion Science and Technology Corporation (the “Company”) executed the Alion Science and Technology Corporation Board of Directors Phantom Stock Plan (the “Director Phantom Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

The Director Phantom Plan provides for annual grants of phantom stock units to outside directors of the Company. Grants are automatically made as of the first meeting of the board of directors of the Company each fiscal year. New directors appointed in the middle of the year are also eligible for awards. Unless and until the Compensation Committee of the Company’s board of directors determines otherwise, the amount of each annual award is the number of phantom stock units determined by dividing $35,000 by the fair market value of one share of Company common stock. Awards normally vest over three years, or upon the death or disability of the Director or a change in control of the Company. Awards continue to vest if the Director fails to be reelected at the conclusion of his or her term. The Director Phantom Plan has a 10 year term. Subject to adjustments for corporate transactions, the shares of Company common stock that may be used for reference purposes under this plan will not exceed 2,000,000, reduced by any shares of Company common stock used for reference purposes with respect to awards issued under the Alion Science and Technology Corporation Phantom Stock Plan and the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan.

A copy of the Director Phantom Plan is attached to this current report on Form 8-K as Exhibit 10.57 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Director Phantom Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Director Phantom Plan.

On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Science and Technology Corporation Phantom Stock Plan (the “Restated Original Phantom Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

Pursuant to the Restated Original Phantom Plan, the plan was amended to comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code. Other changes to this plan include (a) an increase in the cap on the number of shares of phantom stock issuable under the plan up to 2,000,000 (minus shares of phantom stock issued under the Director Phantom Plan and the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan), and (b) the addition of a one-time participant election to receive a cash-out out of shares of phantom stock as they vest with respect to awards that vest after December 31, 2004.

A copy of the Restated Original Phantom Plan is attached to this current report on Form 8-K as Exhibit 10.58 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated Original Phantom Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated Original Phantom Plan.

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On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan (the “Restated Performance Phantom Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

Pursuant to the Restated Performance Phantom Plan, the plan was amended to comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code. Other changes to this plan include (a) an increase in the cap on the number of shares of phantom stock issuable under the plan up to 2,000,000 (minus shares of phantom stock issued under the Company phantom stock plans described above), and (b) the addition of a one-time participant election to receive a cash-out out of shares of phantom stock as they vest.

A copy of the Restated Performance Phantom Plan is attached to this current report on Form 8-K as Exhibit 10.59 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated Performance Phantom Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated Performance Phantom Plan.

On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Science and Technology Corporation 2002 Stock Appreciation Rights Plan (the “Restated 2002 SAR Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

Pursuant to the Restated 2002 SAR Plan, the plan was amended to comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code. Other changes to this plan include (a) the addition of a one-time participant election to receive a cash-out out of SARs as they vest with respect to awards that vest after December 31, 2004, and (b) a provision providing for full vesting of awards upon death or disability of the participant or change in control of the Company.

A copy of the Restated 2002 SAR Plan is attached to this current report on Form 8-K as Exhibit 10.60 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated 2002 SAR Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated 2002 SAR Plan.

On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan (the “Restated 2004 SAR Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

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Pursuant to the Restated 2004 SAR Plan, the plan was amended to comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code. Other changes to this plan include (a) an increase in the amount of SARs available for award from 10% of Company shares outstanding on a fully diluted basis to 12% of Company shares outstanding on a fully diluted basis, (b) the addition of a one-time participant election to receive a cash-out of SARs as they vest, (c) a provision providing for full vesting of outstanding awards upon the death or disability of the participant, and (d) a change in the terms of payment of new SAR awards upon a change of control of the Company.

A copy of the Restated 2004 SAR Plan is attached to this current report on Form 8-K as Exhibit 10.61 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated 2004 SAR Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated 2004 SAR Plan.

On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Executive Deferred Compensation Plan (the “Restated Executive Deferred Comp Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

Pursuant to the Restated Executive Deferred Comp Plan, among other changes, the plan was amended to comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code.

A copy of the Restated Executive Deferred Comp Plan is attached to this current report on Form 8-K as Exhibit 10.62 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated Executive Deferred Comp Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated Executive Deferred Comp Plan.

On November 28, 2005, the Chief Executive Officer of the Company executed the amended and restated Alion Director Deferred Compensation Plan (the “Restated Director Deferred Comp Plan”), which was approved at a meeting of the Company’s board of directors held on November 8, 2005.

Pursuant to the Restated Director Deferred Comp Plan, among other changes, the plan was amended to (a) comply with the new proposed regulations issued under Section 409A of the Internal Revenue Code, and (b) provide for the deferral of the proceeds of shares of phantom stock issued under the Director Phantom Plan.

A copy of the Restated Director Deferred Comp Plan is attached to this current report on Form 8-K as Exhibit 10.63 and is incorporated by reference as though it were fully set forth herein. The foregoing summary description of the Restated Director Deferred Comp Plan is not intended to be complete, and is qualified in its entirety by the complete text of the Restated Director Deferred Comp Plan.

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Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit No.		Description
	10.57	Alion Science and Technology Corporation Board of Directors Phantom Stock Plan
	10.58	Amended and Restated Alion Science and Technology Corporation Phantom Stock Plan
	10.59	Amended and Restated Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan
	10.60	Amended and Restated Alion Science and Technology Corporation 2002 Stock Appreciation Rights Plan
	10.61	Amended and Restated Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan
	10.62	Amended and Restated Alion Science and Technology Corporation Executive Deferred Compensation Plan
	10.63	Amended and Restated Alion Science and Technology Corporation Director Deferred Compensation Plan

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 2, 2005

ALION SCIENCE AND TECHNOLOGY CORPORATION
By:	/s/ John M. Hughes
	Name:	John M. Hughes
	Title:	Chief Financial Officer

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EX-10.57

Exhibit 10.57

ALION SCIENCE AND TECHNOLOGY CORPORATION

BOARD OF DIRECTORS PHANTOM STOCK PLAN

     The Alion Science and Technology Corporation Phantom Stock Plan (the “Plan”) is hereby established by Alion Science and Technology Corporation, a Delaware corporation (the “Company”), effective as of October 1, 2005.

ARTICLE I

PURPOSE

     The purpose of the Plan is to benefit and advance the interests of the Company by attracting and retaining directors, by rewarding them for their contributions to the financial success of the Company and thereby motivating them to continue to make such contributions in the future, through the granting of phantom shares of common stock of the Company.

ARTICLE II

DEFINITIONS

     For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

     2.1. “Administrative Committee” shall mean the Compensation Committee of the Board, or such person or persons as the Compensation Committee shall designate, unless the Board resolves to act itself as the Administrative Committee.

     2.2. “Award” means a grant of Phantom Stock under this Plan.

     2.3. “Board” means the Board of Directors of the Company.

     2.4. “Cause” means that the Participant has (a) abandoned his position as a Director; (b) engaged in willful misconduct deleterious to the interests of the Company, including but not limited to engaging in or assisting a competing business enterprise without the consent of the Board, making public statements disparaging of the Company or its personnel or customers, other than truthful statements made in connection with a legal proceeding or governmental investigation, or disclosing trade secrets or other confidential information of the Company in an unauthorized manner; (c) been convicted of a felony crime; or (d) been indicted for a felony crime relating to the Participant’s business conduct or morals, if the Board determines that the Participant’s continuing service as a Director is deleterious to the interests of the Company. Whether a Participant’s Termination of Service is the result of Cause shall be determined by the Board in its sole discretion.

     2.5. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market

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Value or total voting power of the stock of the Company. However, if any Person or Group is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of the Company. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company;

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

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

     (1) A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock;

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has

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occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Corporation as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.6. “Code” means the Internal Revenue Code of 1986, as amended and any successor Code, and related rules, regulations and interpretations.

     2.7. “Common Stock” means the voting common stock, $0.01 par value per share, of the Company, subject to adjustments pursuant to the Plan.

     2.8. “Company” means Alion Science and Technology Corporation, a Delaware corporation.

     2.9. “Director” means a member of the Board of Directors of the Company who is not also an employee of the Company on the Grant Date.

     2.10. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) has been determined to be totally disabled by the Social Security Administration.

     2.11. “Effective Date” means October 1, 2005.

     2.12. “Fair Market Value” on any given date means the value of one share of Common Stock as determined by the Administrative Committee in its sole discretion, based upon the most recent valuation of the Common Stock made by an independent appraisal that meets the requirements of Code Section 401(a)(28)(C) and the regulations thereunder as of a date that is no more than 12 months before the relevant transaction to which the valuation is applied.

     2.13. “Grant Date” means the effective date on which an Award is made to a Participant as set forth in the applicable Phantom Stock Agreement.

     2.14. “Participant” means a member of the Board of the Company to whom an Award is granted under this Plan.

     2.15. “Phantom Stock Agreement” means the agreement between the Company and the Participant pursuant to which the Company makes an Award hereunder. Each Phantom Stock Agreement shall incorporate the terms of this Plan and shall contain such further terms and conditions consistent with the provisions of the Plan as may be established by the Administrative Committee.

     2.16. “Phantom Stock” means a unit granted to a Participant that entitles the Participant to receive a payment in cash equal to the Fair Market Value of a share of Common Stock as of the Surrender Date.

     2.17. “Plan” means the Alion Science and Technology Corporation Phantom Stock Plan, as amended from time to time.

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     2.18. “Plan Year” means the fiscal year of the Company.

     2.19. “Surrender Date” means the date as of which a Participant surrenders Phantom Stock shares pursuant to Section 7.1 below.

     2.20. “Termination of Service” means termination of the Participant’s status as a Director of the Company, or (b) if later, in the case of a Director who also is then an employee of the Company, cessation of performance of services for the Company. Whether a Participant who is also an employee of the Company incurs a termination of employment with the Company will be determined in accordance with the terms of the Alion Executive Deferred Compensation Plan, as amended and restated to comply with Code Section 409A.

     2.21. “Valuation Date” means a date as of which the Fair Market Value of Common Stock of the Company is determined.

     2.22. “Year of Vesting Service” means a complete year of the Participant’s service as a Director, beginning with the Grant Date of the applicable Award and each anniversary of such date after the Grant Date.

ARTICLE III

ADMINISTRATION

     3.1. General. The Plan shall be administered by the Administrative Committee. The Administrative Committee shall have the full and final authority, in its discretion, to interpret conclusively the provisions of the Plan; to adopt such rules for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan.

     3.2. Procedure. The Administrative Committee shall meet at such times and places and upon such notice as it may determine. A majority of the members of the Administrative Committee shall constitute a quorum. Any acts by the Administrative Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote. Additionally, any acts reduced to writing and approved in writing by all of the members of the Administrative Committee hereunder shall be valid acts of the Administrative Committee. Members of the Administrative Committee who are either eligible for Awards or have been granted Awards may vote on any matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan, except that no such member shall act upon the granting of an Award to himself or herself but may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of an Award to him or her. Notwithstanding the foregoing, a member of the Committee will not be deemed as acting upon the granting of an Award to himself or herself under the preceding sentence if the matter under consideration applies equally to all Participants.

     3.3. Duties. The Administrative Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrative Committee deems necessary or advisable, all within the Administrative

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Committee’s sole and absolute discretion. The Administrative Committee shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to:

     (a) construe the Plan and any Award under the Plan;

     (b) select the time or times at which Awards shall be granted;

     (c) determine the number of shares of Common Stock to be covered by or used for reference purposes for any Award;

     (d) determine and modify from time to time the terms and conditions, including restrictions, of any Award and to approve the form of Phantom Stock Agreements;

     (e) accelerate or otherwise change the time in which an Award may be vested, and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, except that the date of payment of an Award may not be accelerated in a manner inconsistent with Code Section 409A; or

     (f) prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws.

     3.4. Limited Liability. To the maximum extent permitted by law, no member of the Board or Administrative Committee hereunder shall be liable for any action taken or decision made in good faith relating to the Plan or any Award.

     3.5. Effect of Administrative Committee’s Decision. All actions taken and decisions and determinations made by the Administrative Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrative Committee’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any Participants in the Plan and any employee, officer or Director of the Company, and their respective successors in interest.

ARTICLE IV

PARTICIPATION

     Each individual who is a Director and who is not also an employee of the Company as of a Grant Date is eligible to participate in the Plan while he or she is a member of the Board of Directors.

ARTICLE V

GRANT OF PHANTOM STOCK

     5.1. Shares Subject to the Plan. Subject to adjustments as provided in Article X, the shares of Common Stock that may be used for reference purposes with respect to Awards

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granted under this Plan shall not exceed 2,000,000 shares of Common Stock, reduced by any shares of Common Stock used for reference purposes with respect to awards issued under the Alion Science and Technology Corporation Phantom Stock Plan and the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan (whether or not such awards have expired, terminated unexercised, or become unexercisable, or have been forfeited or otherwise terminated, surrendered or cancelled). No actual shares of Common Stock are reserved hereunder. References to shares of Common Stock are for accounting and valuation purposes only, and not to grant any voting or other rights associated with ownership of Common Stock.

     5.2. Grant of Awards. Except as otherwise provided in Section 5.4, an Award shall be made to each eligible Director as of the date of the first general Board of Directors meeting of each Plan Year within the term of this Plan (each, a “Grant Date”). In addition, each individual who becomes a Director during a Plan Year within the term of this Plan after the first general meeting of the Board for such Plan Year shall be eligible for an Award effective as of the date he or she becomes a Director (also a “Grant Date”). The Compensation Committee of the Board of Directors shall have discretion to determine the amount of Phantom Stock to be awarded for any Plan Year; provided, however, that, except as otherwise provided in Section 5.4, each Director as of the date of the first general meeting of the Board during the Plan Year to which the Award relates shall receive the same level of Award. Unless and until the Compensation Committee determines otherwise, the number of units of Phantom Stock which shall be awarded to a Director for a Plan Year shall be the number determined by dividing thirty-five thousand dollars ($35,000) by the Fair Market Value (determined as of the Valuation Date corresponding with or immediately preceding such Grant Date) of a share of Common Stock on the Grant Date, rounded to the next highest round number; provided, however, that an Award made to an individual who becomes a Director after the first general Board of Directors meeting for the applicable Plan Year shall be prorated to reflect the number of full and partial calendar months remaining in such Plan Year from the date of the Director’s election. A Participant who incurs a Termination of Service or is not a Director for any reason as of the close of business on the Grant Date shall not be eligible for an Award.

     5.3. Phantom Stock Agreement. The grant of an Award shall be evidenced by a Phantom Stock Agreement in a form approved by the Administrative Committee, between the Company and the Participant. Each such Phantom Stock Agreement shall set forth its Grant Date, the number of shares of Phantom Stock awarded, and the vesting provisions. Each such Phantom Stock Agreement shall be subject to the express terms and conditions of this Plan, and shall be subject to such other terms and conditions that, in the reasonable judgment of the Administrative Committee, are appropriate and not inconsistent with this Plan.

     5.4. Disqualified Persons. Notwithstanding the foregoing, no grant of Phantom Stock may be made to any “Disqualified Person” (within the meaning of Sections 409(p)(4) and 4979A of the Code, as added by the Economic Growth and Tax Relief Reconciliation Act of 2001) for any period during which the Company maintains the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan or any other employee stock ownership plan (“ESOP”) as described in and qualified under Sections 4975(e)(7) and 401(a) of the Code, respectively. Any grant of Phantom Stock made in violation of this provision shall be null and void ab initio. In addition, no grant of Phantom Stock may be made to any eligible individual if and to the extent that such grant would cause such individual to become a Disqualified Person.

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ARTICLE VI

RIGHT TO PAYMENT

     6.1. Vesting. A Participant shall have no right to receive payment for any share of Phantom Stock upon the applicable Surrender Date, as described below, unless and until such Phantom Stock Award has become vested. Unless otherwise determined by the Administrative Committee in a Participant’s Phantom Stock Agreement, Awards shall vest in accordance with the following schedule:

Service from the Grant Date	Amount Vested
One Year of Vesting Service		33	%
Two Years of Vesting Service		66	%
Three Years of Vesting Service		100	%

     6.2. Termination and Forfeiture of Awards. If a Participant incurs a Termination of Service on or before becoming 100% vested in an Award, he or she shall forfeit any unvested portion of the Award, except as provided below:

     (a) Death or Disability. If the Participant’s Termination of Service is due to death or Disability, any outstanding Awards at the time of such Termination of Service shall immediately become 100% vested.

     (b) Change in Control. If the Participant incurs a Termination of Service for any reason on or after a Change in Control, any Awards granted prior to such Change in Control that are outstanding at the time of such Termination of Service shall immediately become 100% vested.

     (c) Failure to be Reelected. If the Participant fails to be reelected as a Director for any reason other than Cause, such Director shall continue to vest in accordance with the following schedule, without regard to such Termination of Service.

     (d) Disqualified Persons. If Participant is or becomes a Disqualified Person as described in Section 5.4 above, then the full amount of any then outstanding Award that has not yet vested shall be forfeited; and no amount of an Award shall become vested, if, as a result of such vesting, the Participant would become a Disqualified Person.

ARTICLE VII

PAYMENT OF PHANTOM STOCK BENEFITS

     7.1. Surrender Date. The Administrative Committee may, in its discretion, permit a Participant to elect whether the Surrender Date with respect to an Award shall occur (a) with respect to any portion of an Award which has become vested under Section 6.1, the date on

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which such portion of the Award becomes vested; or (b) the date on which the entire amount of the Award becomes 100% vested or, if earlier, upon the Participant’s Termination of Service. Notwithstanding the foregoing or any contrary election by the Participant, if a Participant incurs a Termination of Service but continues to vest under Section 6.2(c), the Surrender Date of any portion of a then-outstanding Award that has vested prior to the Participant’s Termination of Service shall be the date of such Termination of Service, and the Surrender Date of any portion of the Award that becomes vested after the Participant’s Termination of Service shall be the date on which such portion of the Award becomes vested. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee prior to the Award Grant Date; provided, however, that an election by a Participant who first becomes a Director on the Grant Date shall be made within 30 days of the Grant Date. If the Administrative Committee does not permit an election under this provision, or if a Participant fails to make a timely election to the contrary hereunder, the Participant shall be deemed to have elected the Surrender Date described in clause (b) above (except as provided above with respect to Section 6.2(c)). Notwithstanding the foregoing, the Surrender Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Board, upon advice of counsel, that the Plan or an Award fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     7.2. Amount of Payment. A Participant shall be entitled to a cash payment upon surrender of an Award equal to the number of vested units of Phantom Stock subject to surrender, multiplied by the Fair Market Value as of the Valuation Date coincident with or immediately preceding the Surrender Date; provided, however, that, in the case of an Award outstanding on the date of a Change in Control, the Fair Market Value of such Phantom Stock units shall be determined based upon the Fair Market Value of Common Stock as of the Valuation Date coincident with or immediately preceding the Surrender Date, or the Valuation Date coincident with or immediately preceding the date of the Change in Control, whichever produces the higher Fair Market Value.

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     7.3. Time of Payment. Except as provided in Section 7.4, the Company shall make payment of the amount receivable upon the exercise of an Award by the delivery of cash in a lump sum as soon as practicable after the Surrender Date, but in any event within 2^1/2 months after the end of the Plan Year in which the Surrender Date occurs. Notwithstanding the foregoing, payment under this Section 7.3 may be delayed (without imputation of earnings, interest or other gains or losses after the Surrender Date) solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Unforeseeable Administrative or Financial Cause. The Compensation Committee reasonably determines that (1) it is administratively impracticable to make payment by the end of the applicable 2^1/2 month period or that making such payment will jeopardize the solvency of the Company, and (2) such impracticability or insolvency was unforeseeable as of the Grant Date.

     (b) Payments Subject to Section 162(m). The Company reasonably anticipates that its deduction with respect to such payment would otherwise be limited or eliminated by application of Code Section 162(m).

     (c) Payments that Would Violate Loan Covenant or Similar Contractual Requirement. The Company reasonably anticipates that making the payment will violate a term of a loan agreement to which the Company is a party, including any ESOP loan agreement, or other similar contract to which the Company is a party, and such violation will cause material harm to the Company.

     (d) Payments that Would Violate Law. The Company reasonably determines that payment would violate Federal securities laws or other applicable law.

     7.4. Election to Defer Payments. If a Participant has elected, or is deemed to have elected, as the Surrender Date of an Award under Section 7.1 the date on which the entire amount of the Award becomes 100% vested, then the Participant may elect to have the amount of payment for such Award that would otherwise be made upon the Surrender Date deferred into the Alion Director Deferred Compensation Plan (the “Deferred Compensation Plan”), provided that he or she has not incurred a Termination of Service and is then (or is then eligible to become) a participant in the Deferred Compensation Plan. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee at least one year prior to the Surrender Date. Such election shall become effective upon the Surrender Date and shall specify a time for payment and method of distribution available under the Deferred Compensation Plan, provided that such election may not provide for a time of distribution (other than as a result of Termination of Service, death or Disability) earlier than five years after the Surrender Date.

     7.5. Discharge. Any payment made by the Company in good faith in accordance with the provisions of this Plan and a Participant’s Phantom Stock Agreement shall fully discharge the Company from all further obligations with respect to such payment and the Phantom Stock Agreement.

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     7.6. Compliance with Code Section 409A. No payment shall be made in violation of Section 409A or any other applicable provisions of the Code and the rules and regulations thereunder.

     7.7. Withholding. The Company shall have the right to deduct from all amounts paid pursuant to the Plan any Federal, State or local income tax, social security contribution or other payroll taxes required by law, whether domestic or foreign, to be withheld with respect to such payments. The Company shall also have the right to deduct FICA contributions required at vesting.

ARTICLE VIII

AMENDMENT AND TERMINATION

     8.1. Amendment. The Board may amend the Plan at any time and from time to time, provided that (a) no amendment shall deprive any person of any rights granted under the Plan before the effective date of such amendment without such person’s consent; and (b) amendments may be subject to shareholder approval to the extent needed to comply with applicable law. Notwithstanding the foregoing, the Board may unilaterally amend the Plan or any outstanding Award as necessary to cause the Plan or such Award to comply with Code Section 409A.

     8.2. Termination. The Board reserves the right to terminate the Plan in whole or in part at any time, without the consent of any person granted any rights under the Plan. Termination of the Plan shall not affect the Administrative Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of payment of any Award except as permitted by the Administrative Committee and consistent with the requirements of Code Section 409A.

ARTICLE IX

TERM

     The Plan shall be effective October 1, 2005, subject to approval of the Plan by the Board. Unless sooner terminated by action of the Board, the Plan will terminate on September 30, 2015, but Awards granted before this termination date will continue to be effective in accordance with their terms and conditions.

ARTICLE X

TRANSACTIONS

     10.1. Adjustment of Number and Price of Shares. Any other provision of the Plan notwithstanding, if through, or as a result of, any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares of Common Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of

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Common Stock or other securities, the Administrative Committee shall make an appropriate or proportionate adjustment in the Awards as it deems appropriate, in its sole discretion. The adjustment by the Administrative Committee shall be final, binding and conclusive.

     10.2. Adjustments Due to Special Circumstances. The Administrative Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrative Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     10.3. Compliance with Code Section 409A. Notwithstanding the foregoing, the Administrative Committee shall not make an adjustment under this Article X which results in a violation of Code Section 409A.

ARTICLE XI

MISCELLANEOUS PROVISIONS

     11.1. No Guarantee of Employment. Neither the Plan nor any Award granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company or to continue as a Director.

     11.2. No Rights as a Shareholder. A Participant shall not have any rights as a shareholder with respect to any shares of Phantom Stock.

     11.3. Indemnification of Board and Plan Administrative Committee. No member of the Board or the Administrative Committee, nor any officer or employee of the Company acting on behalf of the Board or the Administrative Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Administrative Committee and each and any officer or Employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation.

     11.4. Effect of the Plan. Neither the adoption of this Plan nor any action of the Board or the Administrative Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by a Phantom Stock Agreement, or any amendment thereto, duly authorized by the Administrative Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

     11.5. Non-Assignability. Phantom Stock granted to a Participant may not be transferred or assigned other than by will or by the laws of descent and distribution. If the Participant attempts to alienate, assign, pledge, hypothecate, or otherwise dispose of his Phantom Stock or any right thereunder, except as provided for in this Plan or the Phantom Stock Agreement, or in the event of any levy, attachment, execution, or similar process upon the right

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or interest conferred by this Plan or the Phantom Stock Agreement, the Administrative Committee may terminate the Participant’s Phantom Stock Award by notice to him or her, and it shall thereupon become null and void.

     11.6. Restrictive Legends. The Company may at any time place legends referencing any restrictions described in the Phantom Stock Agreement and any applicable federal or state securities law restrictions on all Awards.

     11.7. Company Charter and Bylaws. This Plan is subject to the charter and by-laws of the Company, as they may be amended from time to time.

     11.8. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company; however, in the event of commencement of a voluntary or involuntary case of bankruptcy against or by the Company, all vested and unvested Awards made hereunder shall be canceled and void.

     11.9. Governing Law. All questions arising with respect to this Plan and any Phantom Stock Agreement executed hereunder shall be determined by reference to the laws of the State of Delaware in effect at the time of their adoption and execution, respectively, without implementing its laws regarding choice of law.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of November 9, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Company on that date.

		Alion Science and Technology Corporation
		By:	/s/ Bahman Atefi
			Chief Executive Officer
Attest:	/s/ Jim Fontana
Secretary

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EX-10.58

Exhibit 10.58

ALION SCIENCE AND TECHNOLOGY CORPORATION
PHANTOM STOCK PLAN

     The Alion Science and Technology Corporation Phantom Stock Plan (the “Plan”) was established by Alion Science and Technology Corporation, a Delaware corporation (the “Company”), effective as of February 11, 2003. This amendment and restatement of the Plan is effective as of November 9, 2005; provided, however, that any provisions of the Plan required to bring the Plan into compliance with Code Section 409A shall be effective as of January 1, 2005; and provided, further, that no provision shall apply to an Award earned and vested on or prior to December 31, 2004, to the extent that such provision constitutes a material modification of such Award for purposes of Code Section 409A.

ARTICLE I
PURPOSE

     The purpose of the Plan is to attract and retain key management employees of the Company and to provide such persons with a proprietary interest in the Company through the granting of phantom shares of common stock of the Company.

ARTICLE II
DEFINITIONS

     For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

     2.1. “Administrative Committee” means the Compensation Committee of the Board, or such person or persons as the Compensation Committee shall designate, unless the Board resolves to act itself as the Administrative Committee.

     2.2. “Affiliate” means any entity, whether now or hereafter existing, which at the time of reference, controls, is controlled by, or is under common control with, Alion (including, but not limited to, joint ventures, limited liability companies, and partnerships).

     2.3. “Award” means a grant of Phantom Stock under this Plan.

     2.4. “Board” means the Board of Directors of the Company.

     2.5. “Cause” or “Just Cause” shall have the same meaning as defined in the relevant Participant’s Employment Agreement.

     2.6. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market Value or total voting power of the stock of the Company. However, if any Person or

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Group is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of the Company. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company;

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

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

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

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Corporation as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

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     2.7. “Code” means the Internal Revenue Code of 1986, as amended and any successor Code, and related rules, regulations and interpretations.

     2.8. “Common Stock” means the voting common stock, $0.01 par value per share, of the Company, subject to adjustments pursuant to the Plan.

     2.9. “Company” means Alion Science and Technology Corporation, a Delaware corporation.

     2.10. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company; or (c) has been determined to be totally disabled by the Social Security Administration..

     2.11. “Employee” shall mean any person who is employed by the Company, is on the Company’s payroll, and whose wages are subject to withholding under the Federal Insurance Contributions Act, codified in Code Section 3121 or would be subject to such withholding if paid in the US.

     2.12. “Employer” shall mean the Company and any Affiliate that, with the consent of the Company, elects to participate in the Plan and any successor entity that adopts the Plan. If any such entity withdraws, is excluded from participation in the Plan or terminates its participation in the Plan, such entity shall thereupon cease to be an Employer.

     2.13. “Employment Agreement” shall mean the employment contract specifying the terms of Participant’s employment with Employer.

     2.14. “Exercise Date” shall mean the date as of which a Participant surrenders Phantom Stock shares vested on or prior to December 31, 2004.

     2.15. “Fair Market Value” on any given date means the value of one share of Common Stock as determined by the Administrative Committee in its sole discretion, based upon the most recent valuation of the Common Stock made by an independent appraisal that meets the requirements of Code Section 401(a)(28)(C) and the regulations thereunder as of a date that is no more than 12 months before the relevant transaction to which the valuation is applied.

     2.16. “Grant Date” means the effective date on which an Award is made to a Participant as set forth in the applicable Phantom Stock Agreement.

     2.17. “Participant” shall mean an Employee of the Company who has an Employment Agreement to whom an Award is granted under this Plan.

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     2.18. “Phantom Stock Agreement” means the agreement between the Company and the Participant pursuant to which the Company authorizes an Award hereunder. Each Phantom Stock Agreement entered into between the Company and a Participant with respect to an Award granted under the Plan shall incorporate the terms of this Plan and shall contain such terms and conditions, consistent with the provisions of the Plan, as may be established by the Administrative Committee. Provisions in any Phantom Stock Agreement relating to matters such as noncompetition, nonsolicitation and protection of intellectual property are hereby deemed to be consistent with the Plan.

     2.19. “Phantom Stock” means a unit granted to a Participant that entitles the Participant to receive a payment in cash equal to the Fair Market Value of a share of Common Stock on the date the Phantom Stock vests.

     2.20. “Plan” means the Alion Science and Technology Corporation Phantom Stock Plan, as amended from time to time.

     2.21. “Surrender Date” means the date as of which a Participant surrenders Phantom Stock shares pursuant to Section 7.1 below.

     2.22. “Termination of Employment” means cessation of performance of services for the Company. For purposes of maintaining a Participant’s continuous status as an Employee and accrual of rights under any Award granted pursuant to the Plan, transfer of an Employee among Alion and any of its Affiliates shall not be considered a Termination of Employment with the Company. A Participant will not be deemed to have incurred a Termination of Employment while he or she is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with the Company or an Affiliate is provided either by statute or by contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or by contract, the Termination of Employment will be deemed to occur on the first date immediately following such six-month period. For the avoidance of doubt, and by way of example only, if a Participant works for a wholly-owned subsidiary of the Company, then a sale of the subsidiary by the Company would be regarded as a Termination of Employment of such Participant for purposes of this Plan, notwithstanding the Participant’s continued employment with that former subsidiary. Whether an Employee of the Company incurs a termination of employment with the Company will be determined in accordance with the requirements of Code Section 409A.

     2.23. “Valuation Date” shall mean a date as of which the Fair Market Value of Common Stock of the Company is determined.

ARTICLE III
ADMINISTRATION

     3.1. General. The Plan shall be administered by the Administrative Committee. The Administrative Committee shall have the full and final authority, in its discretion, to interpret conclusively the provisions of the Plan; to adopt such rules for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan.

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     3.2. Procedure. The Administrative Committee shall meet at such times and places and upon such notice as it may determine. A majority of the members of the Board or committee serving as Administrative Committee hereunder shall constitute a quorum. Any acts by the Administrative Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote. Additionally, any acts reduced to writing or approved in writing by all of the members of the Board or committee serving as Administrative Committee hereunder shall be valid acts of the Administrative Committee. Members of the Board or committee who are either eligible for Awards or have been granted Awards may vote on any matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan, except that no such member shall act upon the granting of an Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of an Award to him or her.

     3.3. Duties. The Administrative Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrative Committee deems necessary or advisable, all within the Administrative Committee’s sole and absolute discretion. The Administrative Committee shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to:

     (a) construe the Plan and any Award under the Plan;

     (b) select the Employees of the Company to whom Awards may be granted and the time or times at which Awards shall be granted;

     (c) determine the number of shares of Common Stock to be covered by or used for reference purposes for any Award;

     (d) determine and modify from time to time the terms and conditions, including restrictions, of any Award and to approve the form of Phantom Stock Agreements;

     (e) impose limitations on Awards, including limitations on transfer provisions;

     (f) modify, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards; or

     (g) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws.

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     3.4. Limited Liability. To the maximum extent permitted by law, no member of the Board or committee serving as Administrative Committee hereunder shall be liable for any action taken or decision made in good faith relating to the Plan or any Award.

     3.5. Effect of Administrative Committee’s Decision. All actions taken and decisions and determinations made by the Administrative Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrative Committee’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any Participants in the Plan and any other employee of the Company, and their respective successors in interest.

ARTICLE IV
PARTICIPATION

     Individual Participants in the Plan shall be selected by the Administrative Committee in its sole discretion from key executive Employees of the Company. Awards may be granted by the Administrative Committee at any time and from time to time to new Participants, or to existing Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Plan Administrative Committee shall determine. Except as required by this Plan, Awards granted at different times need not contain similar provisions.

ARTICLE V
GRANT OF PHANTOM STOCK

     5.1. Shares Subject to the Plan. Subject to adjustments as provided in Article X, the shares of Common Stock that may be used for reference purposes with respect to Awards granted under this Plan shall not exceed 2,000,000 shares of Common Stock, reduced by any shares of Common Stock used for reference purposes with respect to awards issued under the Alion Science and Technology Corporation Board of Directors Phantom Stock Plan and the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan (whether or not such awards have expired, terminated unexercised, or become unexercisable, or have been forfeited or otherwise terminated, surrendered or cancelled). No actual shares of Common Stock are reserved hereunder. References to shares of Common Stock are for accounting and valuation purposes only, and not to grant any voting or other rights associated with ownership of Common Stock.

     5.2. Grant of Award. Subject to Section 5.3 and other applicable provisions of the Plan, the Administrative Committee may at any time and from time to time grant Awards of Phantom Stock to eligible Participants, as it deems appropriate. The grant of an Award shall be authorized by the Administrative Committee and shall be evidenced by a Phantom Stock Agreement in a form approved by the Administrative Committee, between the Company and the Participant. Each such Phantom Stock Agreement shall set forth its Grant Date, the number of shares of Phantom Stock awarded, and the vesting provisions. Each such Phantom Stock Agreement shall be subject to the express terms and conditions of this Plan, and shall be subject to such other terms and conditions that, in the reasonable judgment of the Administrative Committee, are appropriate and not inconsistent with this Plan.

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     5.3. Disqualified Persons. Notwithstanding the foregoing, no grant of Phantom Stock may be made to any “Disqualified Person” (within the meaning of Sections 409(p)(4) and 4979A of the Code, as added by the Economic Growth and Tax Relief Reconciliation Act of 2001) for any period during which the Company maintains the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan or any other employee stock ownership plan as described in and qualified under Section 4975(e)(7) and 401(a) of the Code, respectively. Any grant of Phantom Stock made in violation of this provision shall be null and void ab initio. In addition, no grant of Phantom Stock may be made to any eligible individual if and to the extent that such grant would cause such individual to become a Disqualified Person.

ARTICLE VI
RIGHT TO PAYMENT

     6.1. Vesting. A Participant shall have no right to exercise or receive payment for any share of Phantom Stock until it is vested, as described below.

     (a) For Awards granted on or before November 10, 2003, unless otherwise determined by the Administrative Committee in a Participant’s Phantom Stock Agreement, Awards shall vest in accordance with the following schedule:

Anniversary from Grant Date	Vested Amount
3rd		50	%
4th		25	%
5th		25	%

     (b) For Awards granted on or after November 11, 2003, unless otherwise determined by the Administrative Committee in a Participant’s Phantom Stock Agreement, Awards shall vest in accordance with the following schedule:

Anniversary from Grant Date	Vested Amount
1st		20	%
2nd		20	%
3rd		20	%
4th		20	%
5th		20	%

     6.2. Termination and Forfeiture of Awards. If a Participant incurs a Termination of Employment on or before becoming 100% vested in an Award, he or she shall forfeit any unvested portion of the Award, except as provided below:

     (a) Voluntary Termination of Employment. If a Participant voluntarily terminates employment with the Company, then such Participant shall forfeit all rights to all unvested Awards, unless such termination is for Good Reason, as defined in the Participant’s Employment Agreement (but for this purpose only, without regard to

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whether the occurrence of one of the events is during the Protected Period, as defined by the Employment Agreement). If a Participant voluntarily terminates employment with the Company for Good Reason, then such Participant shall immediately vest in a prorated portion of his or her unvested Awards issued prior to November 9, 2005, based on a ratio the numerator of which is the number of months from the Grant Date through the end of the month of such termination and the denominator of which is sixty (60). For Awards made on or after November 9, 2005, if a Participant voluntarily terminates employment with the Company for Good Reason, then such Participant shall immediately vest in a prorated portion of his or her outstanding Awards equal to the greater of the amount vested under Section 6.1(b) and the amount determined based on a ratio the numerator of which is the number of months from the Grant Date through the end of the month of such termination and the denominator of which is sixty (60),

     (b) Involuntary Termination of Employment Without Cause. If a Participant is involuntarily terminated from employment with the Company for any reason other than for Cause or Just Cause, then he or she shall immediately vest in a prorated portion of his or her unvested Awards issued prior to November 9, 2005, based on a ratio the numerator of which is the number of months from the Grant Date through the end of the month of such termination and the denominator of which is sixty (60). For Awards made on or after November 9, 2005, if a Participant is involuntarily terminated from employment with the Company for any reason other than for Cause or Just Cause, then such Participant shall immediately vest in a prorated portion of his or her outstanding Awards equal to the greater of the amount vested under Section 6.1(b) and the amount determined based on a ratio the numerator of which is the number of months from the Grant Date through the end of the month of such termination and the denominator of which is sixty (60).

     (c) Death or Disability. If the Participant’s Termination of Employment is due to death or Disability, any outstanding Awards at the time of such Termination of Employment shall immediately become 100% vested.

     (d) Change in Control. If the Participant incurs a Termination of Employment for any reason on or after a Change in Control, any Awards granted prior to such Change in Control that are outstanding at the time of such Termination of Employment shall immediately become 100% vested.

     (e) Disqualified Persons. If Participant is or becomes a Disqualified Person as described in Section 5.3 above, then the full amount of any then outstanding Award that has not yet vested shall be forfeited; and no amount of an Award shall become vested, if, as a result of such vesting, the Participant would become a Disqualified Person.

ARTICLE VII
PAYMENT OF PHANTOM STOCK BENEFITS

     7.1. Exercise of Awards Vested on or before December 31, 2004. A Participant may elect to exercise any shares of Phantom Stock granted and vested on or before December 31, 2004, by filing a written election to exercise with the Administrative Committee at least six

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(6) months in advance of the Exercise Date and at least three (3) months in advance of the Valuation Date that will apply to such Exercise Date; provided, however, that the Phantom Stock that becomes vested on November 12, 2004 may be exercised as of November 12, 2004, based upon an election by the Participant filed no later than August 2, 2004. Notwithstanding the foregoing, the Exercise Date of vested shares of Phantom Stock shall not be earlier than the date the Phantom Stock becomes vested nor later than the earliest of (1) the date of the occurrence of a termination event described in Section 6.2 or any other Termination of Employment of the Participant; (2) the date of a Change in Control; or (3) the fifth (5^th) anniversary of the Grant Date of the Phantom Stock. An election to exercise Phantom Stock shall be made in such form and at such time as the Administrative Committee deems acceptable.

     7.2. Payment of Awards Granted before November 9, 2005, and Vesting on or after January 1, 2005. A Participant granted Phantom Stock under this Plan before November 9, 2005, but not vesting until on or after January 1, 2005, shall be entitled to a cash payment on the Surrender Date, which shall be the earlier of (i) the date on which the Participant becomes fully vested in the Award, or (ii) the date of the Participant’s Termination of Employment. Notwithstanding the foregoing, (a) the Surrender Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the circumstances set forth in Section 7.3(a) through (d); and (b) a Participant may elect, in accordance with Internal Revenue Service Notice 2005-1, Q-20(a), to receive payment of any Awards granted before November 9, 2005, and vesting on or after January 1, 2005, calendar year 2005 or, if later, the taxable year in which the amounts are earned and vested. Any such election shall be made in a form acceptable to the Administrative Committee and filed with the Administrative Committee no later than December 31, 2005.

     7.3. Payment of Awards Granted on or after November 9, 2005. The Administrative Committee may, in its discretion, permit a Participant to elect whether the Surrender Date with respect to an Award granted on or after November 9, 2005 shall occur (a) with respect to any portion of an Award which has become vested under Section 6.1(b), the date on which such portion of the Award becomes vested; or (b) the date on which the entire amount of the Award becomes 100% vested or, if earlier, upon the Participant’s Termination of Employment. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee prior to the Award Grant Date; provided, however, that in the case of a new Participant, such election shall be made within 30 days after the Participant becomes eligible to participate in the Plan. If the Administrative Committee does not permit an election under this provision, or if a Participant fails to make a timely election to the contrary hereunder, the Participant shall be deemed to have elected the Surrender Date described in clause (b) above. Notwithstanding the foregoing, the Surrender Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

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     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Company, upon advice of counsel, that the Plan or an Award fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     7.4. Amount and Timing of Payment. A Participant shall be entitled to a cash payment upon exercise or surrender (as applicable) of an Award equal to the number of vested units of Phantom Stock subject to surrender, multiplied by the Fair Market Value as of the Valuation Date coincident with or immediately preceding the Surrender Date; provided, however, that, in the case of an Award outstanding on the date of a Change in Control, the Fair Market Value of such Phantom Stock units shall be determined based upon the Fair Market Value of Common Stock as of the Valuation Date coincident with or immediately preceding the Surrender Date, or the Valuation Date coincident with or immediately preceding the date of the Change in Control, whichever produces the higher Fair Market Value.

     7.5. Time of Payment. Except as provided in Section 7.6, the Company shall make payment of the amount receivable upon the exercise of an Award by the delivery of cash in a lump sum within sixty days after the Exercise Date of an Award described in Section 7.1, or as soon as practicable after the Surrender Date of an Award described in Section 7.2 or 7.3, as applicable, but in any event within 2¹/2 months after the end of the Plan Year in which the Surrender Date occurs. Notwithstanding the foregoing, payment under this Section 7.5 may be delayed (without imputation of earnings, interest or other gains or losses after the Surrender Date) solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Unforeseeable Administrative or Financial Cause. The Compensation Committee reasonably determines that (1) it is administratively impracticable to make payment by the end of the applicable 2¹/2 month period or that making such payment will jeopardize the solvency of the Company, and (2) such impracticability or insolvency was unforeseeable as of the Grant Date.

     (b) Payments Subject to Section 162(m). The Company reasonably anticipates that its deduction with respect to such payment would otherwise be limited or eliminated by application of Code Section 162(m).

     (c) Payments that Would Violate Loan Covenant or Similar Contractual Requirement. The Company reasonably anticipates that making the payment will violate a term of a loan agreement to which the Company is a party, including any ESOP loan agreement, or other similar contract to which the Company is a party, and such violation will cause material harm to the Company.

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     (d) Payments that Would Violate Law. The Company reasonably determines that payment would violate Federal securities laws or other applicable law.

     7.6. Election to Defer Benefits. If a Participant has elected as the Exercise Date for Phantom Stock granted and vested on or before December 31, 2004, the fifth (5^th) anniversary of the Grant Date of such Phantom Stock, and the Participant is also a participant in the Alion Science and Technology Corporation Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), he or she may elect, at least 180 days prior to such Exercise Date, to defer receipt of all or a portion of the Plan benefit through a contribution to the Deferred Compensation Plan equal to the amount that would otherwise have been payable under Section 7.2. If a Participant has elected, or is deemed to have elected, as the Surrender Date of an Award under Section 7.2 or 7.3 the date on which the entire amount of the Award becomes 100% vested, then the Participant may elect to have the amount of payment for such Award that would otherwise be made upon the Surrender Date deferred into the Deferred Compensation Plan, provided that he or she has not incurred a Termination of Employment and is then (or is then eligible to become) a participant in the Deferred Compensation Plan. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee at least one year prior to the Surrender Date. Such election shall become effective upon the Surrender Date and shall specify a time for payment and method of distribution available under the Deferred Compensation Plan, provided that such election may not provide for a time of distribution (other than as a result of Termination of Employment, death or Disability) earlier than five years after the Surrender Date.

     7.7. Discharge. Any payment made by the Company in good faith in accordance with the provisions of this Plan and a Participant’s Phantom Stock Agreement shall fully discharge the Company from all further obligations with respect to such payment and the Phantom Stock Agreement.

     7.8. Compliance with Code Section 409A. No payment shall be made in violation of Section 409A or any other applicable provisions of the Code and the rules and regulations thereunder.

     7.9. Withholding. The Company shall have the right to deduct from all amounts paid pursuant to the Plan any Federal, State or local income tax, social security contribution or other payroll taxes required by law, whether domestic or foreign, to be withheld with respect to such payments. The Company shall also have the right to deduct FICA contributions required at vesting.

ARTICLE VIII
AMENDMENT AND TERMINATION

     8.1. Amendment. The Board may amend the Plan at any time and from time to time, provided that (a) no amendment shall deprive any person of any rights granted under the Plan before the effective date of such amendment without such person’s consent; and (b) amendments

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may be subject to shareholder approval to the extent needed to comply with applicable law. Notwithstanding the foregoing, the Board may unilaterally amend the Plan or any outstanding Award subject to Section 409A as necessary to cause the Plan or such Award to comply with Code Section 409A.

     8.2. Termination. The Board reserves the right to terminate the Plan in whole or in part at any time, without the consent of any person granted any rights under the Plan. Termination of the Plan shall not affect the Administrative Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of payment of any Award except as permitted by the Administrative Committee and consistent with the requirements of Code Section 409A.

ARTICLE IX
TERM

     The Plan shall be effective from the date that this Plan is approved by the Board. Unless sooner terminated by action of the Board, the Plan will terminate on February 11, 2013, but Awards granted before this termination date will continue to be effective in accordance with their terms and conditions.

ARTICLE X
TRANSACTIONS

     10.1. Adjustment of Number and Price of Shares. Any other provision of the Plan notwithstanding, if through, or as a result of, any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares of Common Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, the Administrative Committee shall make an appropriate or proportionate adjustment in the Awards as it deems appropriate, in its sole discretion. The adjustment by the Administrative Committee shall be final, binding and conclusive.

     10.2. Adjustments Due to Special Circumstances. The Administrative Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrative Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     10.3. Compliance with Code Section 409A. Notwithstanding the foregoing, the Administrative Committee shall not make an adjustment under this Article X which results in a violation of Code Section 409A.

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ARTICLE XI
MISCELLANEOUS PROVISIONS

     11.1. No Guarantee of Employment. Neither the Plan nor any Award granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Company or give any person any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to discharge to the same extent as if this Plan had never been adopted. Nothing in this Plan shall prevent, interfere with or limit in any way the right of the Company to terminate a Participant’s employment at any time, whether or not such termination would result in: (a) the failure of any Award to vest; (b) the forfeiture of any unvested or vested portion of any Award under the Plan; and/or (c) any other adverse effect on the Participant’s interests under the Plan.

     11.2. No Rights as a Shareholder. A Participant shall not have any rights as a shareholder with respect to any shares of Phantom Stock.

     11.3. Indemnification of Board and Plan Administrative Committee. No member of the Board or the Administrative Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Administrative Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Administrative Committee and each and any officer or Employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation.

     11.4. Effect of the Plan. Neither the adoption of this Plan nor any action of the Board or the Administrative Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by a Phantom Stock Agreement, or any amendment thereto, duly authorized by the Administrative Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

     11.5. Non-Assignability. Phantom Stock granted to a Participant may not be transferred or assigned other than by will or by the laws of descent and distribution. If the Participant attempts to alienate, assign, pledge, hypothecate, or otherwise dispose of his Phantom Stock or any right thereunder, except as provided for in this Plan or the Phantom Stock Agreement, or in the event of any levy, attachment, execution, or similar process upon the right or interest conferred by this Plan or the Phantom Stock Agreement, the Administrative Committee may terminate the Participant’s Phantom Stock by notice to him, and it shall thereupon become null and void.

     11.6. Restrictive Legends. The Company may at any time place legends referencing any restrictions described in the Phantom Stock Agreement and any applicable federal or state securities law restrictions on all Awards.

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     11.7. Company Charter and Bylaws. This Plan is subject to the charter and by-laws of the Company, as they may be amended from time to time.

     11.8. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company; however, in the event of commencement of a voluntary or involuntary case of bankruptcy against or by the Company, all vested and unvested Awards made hereunder shall be canceled and void.

     11.9. Governing Law. All questions arising with respect to this Plan and any Phantom Stock Agreement executed hereunder shall be determined by reference to the laws of the State of Delaware in effect at the time of their adoption and execution, respectively, without implementing its laws regarding choice of law.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of November 9, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Company on that date.

     Alion Science and Technology Corporation

By:	/s/ Bahman Atefi
	Chief Executive Officer

Attest:	/s/ Jim Fontana
Secretary

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EX-10.59

Exhibit 10.59

ALION SCIENCE AND TECHNOLOGY CORPORATION
PERFORMANCE SHARES AND RETENTION PHANTOM STOCK PLAN

     The Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan (the “Plan”) is hereby established by Alion Science and Technology Corporation, a Delaware corporation (the “Company”), effective as of January 24, 2005. This amendment and restatement of the Plan is effective as of November 9, 2005; provided, however, that any provisions of the Plan required to bring the Plan into compliance with Code Section 409A shall be effective as of January 24, 2005.

ARTICLE I
PURPOSE

     The purpose of the Plan is to attract and retain key management employees of the Company and to provide such persons with a proprietary interest in the Company and an incentive to increase shareholder value through the granting of phantom shares of common stock of the Company, based on the appreciation of the per share price of Alion Common Stock over a given period of time.

ARTICLE II
DEFINITIONS

     For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:

     2.1. “Administrative Committee” means the Compensation Committee of the Board, or such person or persons as the Compensation Committee shall designate, unless the Board resolves to act itself as the Administrative Committee.

     2.2. “Affiliate” means any entity, whether now or hereafter existing, which at the time of reference, controls, is controlled by, or is under common control with, Alion (including, but not limited to, subsidiaries, joint ventures, limited liability companies, and partnerships).

     2.3. “Award” means a grant of the opportunity to receive Performance Share Phantom Stock or Retention Phantom Stock under this Plan.

     2.4. “Board” means the Board of Directors of the Company.

     2.5. “Cause” or “Just Cause” shall have the same meaning as defined in the relevant Participant’s Employment Agreement.

     2.6. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market

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Value or total voting power of the stock of the Company. However, if any Person or Group is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of the Company. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company;

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

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

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

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any

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successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Corporation as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.7. “Code” means the Internal Revenue Code of 1986, as amended and any successor Code, and related rules, regulations and interpretations.

     2.8. “Common Stock” means the voting common stock, $0.01 par value per share, of the Company, subject to adjustments pursuant to the Plan.

     2.9. “Company” means Alion Science and Technology Corporation, a Delaware corporation.

     2.10. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company; or (c) has been determined to be totally disabled by the Social Security Administration.

     2.11. “Employee” shall mean any person who is employed by the Company, is on the Company’s payroll, and whose wages are subject to withholding under the Federal Insurance Contributions Act, codified in Code Section 3121.

     2.12. “Employer” shall mean the Company and any successor entity that adopts the Plan.

     2.13. “Employment Agreement” shall mean the employment contract specifying the terms of Participant’s employment with Employer.

     2.14. “Fair Market Value” on any given date means the value of one share of Common Stock as determined by the Administrative Committee in its sole discretion, based upon the most recent valuation of the Common Stock made by an independent appraisal that meets the requirements of Code Section 401(a)(28)(C) and the regulations thereunder as of a date that is no more than 12 months before the relevant transaction to which the valuation is applied.

     2.15. “Grant Date” means the effective date on which an Award is made to a Participant as set forth in the applicable Phantom Stock Agreement.

     2.16. “Participant” shall mean an Employee of the Company who has an Employment Agreement to whom an Award is granted under this Plan.

     2.17. “Payment Date” means the date established in Section 6.2 of the Plan.

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     2.18. “Performance Share Phantom Stock Agreement” or “Retention Phantom Stock Agreement” (collectively referred to as “Phantom Stock Agreement”) means the agreement between the Company and the Participant pursuant to which the Company authorizes an Award hereunder. Each Phantom Stock Agreement entered into between the Company and a Participant with respect to an Award granted under the Plan shall incorporate the terms of this Plan and shall contain such terms and conditions, consistent with the provisions of the Plan, as may be established by the Administrative Committee. Provisions in any Phantom Stock Agreement relating to matters such as non-competition, non-solicitation and protection of intellectual property are hereby deemed to be consistent with the Plan.

     2.19. “Performance Share Phantom Stock” or “Retention Phantom Stock” (collectively referred to as “Phantom Stock”) means a unit granted to a Participant that entitles the Participant to receive a payment in cash equal to the Fair Market Value of a share of Common Stock on the date the respective grants of Phantom Stock pay out.

     2.20. “Plan” means the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan, as amended from time to time.

     2.21. “Target Performance Share Award” means the nominal shares awarded to a participant on a Grant Date pursuant to a Performance Share Phantom Stock Agreement, which shares are subject to vesting upon the achievement of a predetermined Fair Market Value price per share of Alion Common Stock. Failure to achieve the minimum threshold price shall result in the vesting of no Performance Share Phantom Stock under the Plan. Achievement of a Fair Market Value per share equal to the predetermined target price per share shall result in the vesting of shares of Performance Share Phantom Stock equal to the number of shares awarded pursuant to the Target Performance Share Award. Achievement of a Fair Market Value per share in excess of the predetermined target price per share shall result in the vesting of shares of Performance Share Phantom Stock in excess of the number of shares awarded pursuant to the Target Performance Share Award up to the maximum percentage specified in the underlying Performance Share Phantom Stock Agreement.

     2.22. “Termination of Employment” means cessation of performance of services for the Company. For purposes of maintaining a Participant’s continuous status as an Employee and accrual of rights under any Award granted pursuant to the Plan, transfer of an Employee among Alion and any of its Affiliates shall not be considered a Termination of Employment with the Company. A Participant will not be deemed to have incurred a Termination of Employment while he or she is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with the Company or an Affiliate is provided either by statute or by contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or by contract, the Termination of Employment will be deemed to occur on the first date immediately following such six-month period. For the avoidance of doubt, and by way of example only, if a Participant works for a wholly-owned subsidiary of the Company, then a sale of the subsidiary by the Company would be regarded as a Termination of Employment of such Participant for purposes of this Plan, notwithstanding the Participant’s continued employment with that former subsidiary. Whether an Employee of the Company incurs a termination of employment with the Company will be determined in accordance with the requirements of Code Section 409A.

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     2.23. “Valuation Date” shall mean a date as of which the Fair Market Value of Common Stock of the Company is determined.

ARTICLE III
ADMINISTRATION

     3.1. General. The Plan shall be administered by the Administrative Committee. The Administrative Committee shall have the full and final authority, in its discretion, to interpret conclusively the provisions of the Plan; to adopt such rules for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan.

     3.2. Procedure. The Administrative Committee shall meet at such times and places and upon such notice as it may determine. A majority of the members of the Board or committee serving as Administrative Committee hereunder shall constitute a quorum. Any acts by the Administrative Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote. Additionally, any acts reduced to writing or approved in writing by all of the members of the Board or committee serving as Administrative Committee hereunder shall be valid acts of the Administrative Committee. Members of the Board or committee who are either eligible for Awards or have been granted Awards may vote on any matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan, except that no such member shall act upon the granting of an Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of an Award to him or her.

     3.3. Duties. The Administrative Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrative Committee deems necessary or advisable, all within the Administrative Committee’s sole and absolute discretion. The Administrative Committee shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to:

     (a) construe the Plan and any Award under the Plan;

     (b) select the Employees of the Company to whom Awards may be granted and the time or times at which Awards shall be granted;

     (c) determine the number of shares of Common Stock to be covered by or used for reference purposes for any Award;

     (d) determine and modify from time to time the terms and conditions, including restrictions, of any Award and to approve the form of Phantom Stock Agreements;

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     (e) impose limitations on Awards, including limitations on transfer provisions;

     (f) modify, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards subject to restrictions or limitations of the Code; or

     (g) prescribe, amend and rescind rules and regulations relating to the Plan.

     3.4. Limited Liability. To the maximum extent permitted by law, no member of the Board or committee serving as Administrative Committee hereunder shall be liable for any action taken or decision made in good faith relating to the Plan or any Award.

     3.5. Effect of Administrative Committee’s Decision. All actions taken and decisions and determinations made by the Administrative Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrative Committee’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any Participants in the Plan and any other employee of the Company, and their respective successors in interest.

ARTICLE IV
PARTICIPATION

     Individual Participants in the Plan shall be selected by the Administrative Committee in its sole discretion from key executive Employees of the Company. Awards may be granted by the Administrative Committee at any time and from time to time to new Participants, or to existing Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Plan Administrative Committee shall determine. Except as required by this Plan, Awards granted at different times need not contain similar provisions.

ARTICLE V
GRANT OF PHANTOM STOCK

     5.1. Shares Subject to the Plan. Subject to adjustments as provided in Article X, the shares of Common Stock that may be used for reference purposes with respect to Awards granted under this Plan shall not exceed 2,000,000 shares of Common Stock, reduced by any shares of Common Stock used for reference purposes with respect to awards issued under the Alion Science and Technology Corporation Board of Directors Phantom Stock Plan and the Alion Science and Technology Corporation Phantom Stock Plan (whether or not such awards have expired, terminated unexercised, or become unexercisable, or have been forfeited or otherwise terminated, surrendered or cancelled). No actual shares of Common Stock are reserved hereunder. References to shares of Common Stock are for accounting and valuation purposes only, and not to grant any voting or other rights associated with ownership of Common Stock.

     5.2. Grant of Award. Subject to Section 5.3 and other applicable provisions of the Plan, the Administrative Committee may at any time and from time to time grant Awards of Phantom Stock to eligible Participants, as it deems appropriate. The grant of an Award shall be

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authorized by the Administrative Committee and shall be evidenced by a Performance Share Phantom Stock Agreement or a Retention Phantom Stock Agreement in a form approved by the Administrative Committee, between the Company and the Participant. Each Phantom Stock Agreement shall set forth its Grant Date, the number of shares of Retention Phantom Stock awarded or the formula for determining the amount of Performance Share Phantom Stock payment based on a Target Performance Share Award (meaning the nominal shares awarded to a Participant on a Grant Date pursuant to a Performance Share Phantom Stock Agreement), which shares are subject to vesting upon the achievement of a predetermined Fair Market Value price per share of Alion Common Stock. Failure to achieve the minimum threshold price shall result in the vesting of no Performance Share Phantom Stock under the Plan. Achievement of a Fair Market Value per share equal to the predetermined target price per share shall result in the vesting of Performance Share Phantom Stock equal to the number of shares awarded pursuant to the Target Performance Share Award. Achievement of a Fair Market Value per share in excess of the predetermined target price per share shall result in the vesting of Performance Share Phantom Stock in excess of the number of shares awarded pursuant to the Target Performance Share Award up to the maximum percentage specified in the underlying Performance Share Phantom Stock Agreement. Each such Phantom Stock Agreement shall be subject to the express terms and conditions of this Plan, and shall be subject to such other terms and conditions that, in the reasonable judgment of the Administrative Committee, are appropriate and not inconsistent with this Plan.

     5.3. Disqualified Persons. Notwithstanding the foregoing, no grant of Phantom Stock may be made to any “Disqualified Person” (within the meaning of Sections 409(p)(4) and 4979A of the Code) for any period during which the Company maintains the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan or any other employee stock ownership plan as described in and qualified under Section 4975(e)(7) and 401(a) of the Code, respectively. Any grant of Phantom Stock made in violation of this provision shall be null and void ab initio. In addition, no grant of Phantom Stock may be made to any eligible individual if and to the extent that such grant would cause such individual to become a Disqualified Person.

ARTICLE VI
RIGHT TO PAYMENT

     6.1. Vesting.

     (a) For grants of Performance Share Phantom Stock awarded November 9, 2004, and thereafter, a Participant shall have no right to any share of Performance Share Phantom Stock until it is vested, except in the event of the Participant’s death, Disability, or Involuntary Termination of Employment Without Cause, or a Change in Control as set forth in the Performance Shares Phantom Stock Agreement at the Grant Date. Vesting shall occur at the third anniversary of the Grant Date. At vesting, a predetermined Target Performance Share Award, stated in the Performance Shares Phantom Stock Agreement at Grant Date, combined with the Fair Market Value of Common Stock in effect on the date of vesting, shall be used in the calculation of the actual number of shares of Performance Shares Phantom Stock that will be vested for all Participants.

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     (b) For grants of Retention Phantom Stock awarded November 9, 2004, and thereafter, a Participant shall have no right to any share of Retention Phantom Stock until it is vested, except in the event of the Participant’s death, Disability, or Involuntary Termination of Employment Without Cause, or a Change in Control as set forth in the Retention Phantom Stock Agreement at Grant Date. Vesting shall occur in accordance with the applicable provisions expressed in the individual Retention Phantom Stock Agreements.

     6.2. Payment Date and Vesting Events.

     (a) Payment Date. The Payment Date is the date certain specified in the Performance Share Phantom Stock Agreement or Retention Phantom Stock Agreement executed by the Company and the Participant as of the Grant Date, for the conversion of Performance Share Phantom Stock and/or Retention Phantom Stock into an amount certain in cash. The Payment Date shall not be earlier than the date on which the Participant becomes 100% vested in the Performance Share Phantom Stock or Retention Phantom Stock covered by the respective Phantom Stock Agreement, except as provided below with respect to the Participant’s death, Disability, Termination of Employment or Change in Control. Nothing in this Plan shall be construed to require an identical Payment Date for any grants of Performance Share Phantom Stock or Retention Phantom Stock as of a particular date.

     (b) Termination of Employment. Except as set forth in the respective Phantom Stock Agreement, a Participant who has a Termination of Employment for any reason other than an Involuntary Termination Without Cause (as defined in the Phantom Stock Agreement) shall forfeit his or her rights to all unvested Awards. If a Participant suffers an Involuntary Termination Without Cause, (i) the Participant’s Award under a Phantom Stock Agreement shall vest as and to the extent specified in the Phantom Stock Agreement, and (ii) the Participant shall be paid such amounts as and to the extent specified in the Phantom Stock Agreement. Except as otherwise provided in the applicable Phantom Stock Agreement, the Payment Date shall be the date of the Participant’s Termination of Employment.

     (c) Death. If a Participant dies prior to terminating employment with the Company, (i) the Participant’s Award under a Phantom Stock Agreement shall vest as and to the extent specified in the Phantom Stock Agreement, and (ii) the Participant’s beneficiary shall be paid such amounts as and to the extent specified in the Phantom Stock Grant Agreement. Except as otherwise provided in the applicable Phantom Stock Agreement, the Payment Date shall be the date of the Participant’s date of death.

     (d) Disability. If a Participant incurs a Termination of Employment due to Disability, (i) the Participant’s Award under a Phantom Stock Agreement shall vest as and to the extent specified in the Phantom Stock Agreement, and (ii) the Participant shall be paid such amounts as and to the extent specified in the respective Phantom Stock Grant Agreements. Except as otherwise provided in the applicable Phantom Stock Agreement, the Payment Date shall be the date of the Participant’s Termination of Employment due to Disability.

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     (e) Change in Control. Upon a Change in Control, (i) each Participant’s Award under a Phantom Stock Agreement shall immediately vest as and to the extent specified in the Phantom Stock Agreement, and (ii) the Participant shall be paid such amounts as and to the extent specified in the appropriate Phantom Stock Grant Agreement. Except as otherwise provided in the applicable Phantom Stock Agreement, the Payment Date shall be the date of the Change in Control.

     (f) Disqualified Persons. If Participant is or becomes a Disqualified Person as described in Section 5.3 above, then the full amount of any then outstanding Award that has not yet vested shall be forfeited; and no amount of an Award shall become vested, if, as a result of such vesting, the Participant would become a Disqualified Person.

     6.3. Acceleration of Payment Date. Notwithstanding the foregoing, the Payment Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Company, upon advice of counsel, that the Plan or an Award fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

ARTICLE VII
PAYMENT OF PHANTOM STOCK BENEFITS

     7.1. Amount and Timing of Payment.

     (a) Retention Phantom Stock. Except as otherwise set forth in a Participant’s Phantom Stock Agreements, for grants of Retention Phantom Stock, a Participant shall be entitled to a cash payment on the Payment Date, equal to the number of vested shares of Retention Phantom Stock multiplied by the Fair Market Value as of the Valuation Date coincident with or immediately preceding the Payment Date; provided, however, that in the case of payment due to a Change in Control, the Fair Market Value as of the date of the Change in Control or the immediately preceding Valuation Date, whichever is higher,

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shall be used. Except as provided below in this Article VII, the Company shall make payment on a Payment Date by the delivery to the Participant of cash in a lump sum sixty (60) days after the Payment Date, less any applicable withholdings required by the Code or other similar regulations.

     (b) Performance Share Phantom Stock. Except as otherwise set forth in a Participant’s Phantom Stock Agreements, for grants of Performance Share Phantom Stock, a Participant shall be entitled to a cash payment on a Payment Date, equal to the amount generated by the calculation of the vested Target Performance Share Award contained in individual Performance Share Phantom Stock Agreements; provided, however, that in the case of payment due to a Change in Control, the Fair Market Value as of the date of the Change in Control or the immediately preceding Valuation Date, whichever is higher, shall be used. Except as provided below in this Article VII, the Company shall make payment on a Payment Date by the delivery to the Participant of cash in a lump sum sixty (60) days after the Payment Date, less any applicable withholdings required by the Code or other similar regulations.

     (c) Election Under Notice 2005-1. In lieu of payment of an Award under Section 7.1(a) or (b) above, a Participant granted Phantom Stock under this Plan before November 9, 2005, may elect, in accordance with Internal Revenue Service Notice 2005-1, Q-20(a), to receive payment of any such Awards in calendar year 2005 or, if later, in the taxable year in which amounts under the Award become earned and vested. Any such election shall be made in a form acceptable to the Administrative Committee and filed with the Administrative Committee no later than December 31, 2005.

     (d) Compliance with Code Section 409A. No payment shall be made in violation of Section 409A or any other applicable provisions of the Code and the rules and regulations thereunder.

     7.2. Delay of Payments. A payment required to be made within sixty (60) days after an applicable Payment Date shall in any event be made within 2¹/2 months after the end of the Plan Year in which the Payment Date occurs, except that payment may be delayed (without imputation of earnings, interest or other gains or losses after the Payment Date) solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Unforeseeable Administrative or Financial Cause. The Compensation Committee reasonably determines that (1) it is administratively impracticable to make payment by the end of the applicable 2¹/2 month period or that making such payment will jeopardize the solvency of the Company, and (2) such impracticability or insolvency was unforeseeable as of the Grant Date.

     (b) Payments Subject to Section 162(m). The Company reasonably anticipates that its deduction with respect to such payment would otherwise be limited or eliminated by application of Code Section 162(m).

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     (c) Payments that Would Violate Loan Covenant or Similar Contractual Requirement. The Company reasonably anticipates that making the payment will violate a term of a loan agreement to which the Company is a party, including any ESOP loan agreement, or other similar contract to which the Company is a party, and such violation will cause material harm to the Company.

     (d) Payments that Would Violate Law. The Company reasonably determines that payment would violate Federal securities laws or other applicable law.

     7.3. Election to Defer Benefits. A Participant hereunder who is also a participant in, or eligible to become a participant in, the Alion Science and Technology Corporation Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), may elect to defer receipt of all or a portion of the Plan benefit otherwise payable through a contribution to the Deferred Compensation Plan equal to the amount that would otherwise have been payable on the applicable Payment Date under Section 7.1. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee at least one year prior to the Payment Date. Such election shall become effective upon the applicable Payment Date and shall specify a time for payment and method of distribution available under the Deferred Compensation Plan, provided that such election may not provide for a time of distribution (other than as a result of Termination of Employment, death or Disability) earlier than five years after the Payment Date. Notwithstanding the above, this Section 7.3 shall not apply to amounts payable under Section 7.1(c).

     7.4. Discharge. Any payment made by the Company in good faith in accordance with the provisions of this Plan and a Participant’s Phantom Stock Agreement shall fully discharge the Company from all further obligations with respect to such payment and such Phantom Stock Agreement.

     7.5. Withholding. The Company shall have the right to deduct from all amounts paid pursuant to the Plan any Federal, State or local income tax, social security contribution or other payroll taxes required by law, whether domestic or foreign, to be withheld with respect to such payments. The Company shall also have the right to deduct FICA contributions required at vesting from normal salary and wages or other cash compensation to be paid to the Participant

ARTICLE VIII
AMENDMENT AND TERMINATION

     8.1. Amendment. The Board may amend the Plan at any time and from time to time, provided that (a) no amendment shall deprive any person of any rights granted under the Plan before the effective date of such amendment without such person’s consent; and (b) amendments may be subject to shareholder approval to the extent needed to comply with applicable law. Notwithstanding the foregoing, the Board may unilaterally amend the Plan or any outstanding Award subject to Section 409A as necessary to cause the Plan or such Award to comply with Code Section 409A.

     8.2. Termination. The Board reserves the right to terminate the Plan in whole or in part at any time, without the consent of any person granted any rights under the Plan.

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Termination of the Plan shall not affect the Administrative Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of payment of any Award except as permitted by the Administrative Committee and consistent with the requirements of Code Section 409A.

ARTICLE IX
TERM

     The Plan shall be effective from the date that this Plan is approved by the Board. Unless sooner terminated by action of the Board, the Plan will terminate on November 9, 2014, but Awards granted before this termination date will continue to be effective in accordance with their terms and conditions.

ARTICLE X
TRANSACTIONS

     10.1. Adjustment of Number and Price of Shares. Any other provision of the Plan notwithstanding, if through, or as a result of, any merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares of Common Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock or other securities, the Administrative Committee shall make an appropriate or proportionate adjustment in the Awards as it deems appropriate, in its sole discretion. The adjustment by the Administrative Committee shall be final, binding and conclusive.

     10.2. Adjustments Due to Special Circumstances. The Administrative Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrative Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     10.3. Compliance with Code Section 409A. Notwithstanding the foregoing, the Administrative Committee shall not make an adjustment under this Article X which results in a violation of Code Section 409A.

ARTICLE XI
MISCELLANEOUS PROVISIONS

     11.1. No Guarantee of Employment. Neither the Plan nor any Award granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Company or give any person any right to any payment

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whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to discharge to the same extent as if this Plan had never been adopted. Nothing in this Plan shall prevent, interfere with or limit in any way the right of the Company to terminate a Participant’s employment at any time, whether or not such termination would result in: (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award under the Plan; and/or (iii) any other adverse effect on the Participant’s interests under the Plan.

     11.2. No Rights as a Shareholder. A Participant shall not have any rights as a shareholder with respect to any shares of Phantom Stock.

     11.3. Indemnification of Board and Plan Administrative Committee. No member of the Board or the Administrative Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Administrative Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Administrative Committee and each and any officer or Employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation.

     11.4. Effect of the Plan. Neither the adoption of this Plan nor any action of the Board or the Administrative Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by a Phantom Stock Agreement, or any amendment thereto, duly authorized by the Administrative Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

     11.5. Non-Assignability. Phantom Stock granted to a Participant may not be transferred or assigned other than by will or by the laws of descent and distribution. If the Participant attempts to alienate, assign, pledge, hypothecate, or otherwise dispose of his Phantom Stock or any right thereunder, except as provided for in this Plan or the Phantom Stock Agreement, or in the event of any levy, attachment, execution, or similar process upon the right or interest conferred by this Plan or the Phantom Stock Agreement, the Administrative Committee shall terminate the Participant’s Phantom Stock by notice to him, and it shall thereupon become null and void.

     11.6. Restrictive Legends. The Company may at any time place legends referencing any restrictions described in the Phantom Stock Agreement and any applicable federal or state securities law restrictions on all Awards.

     11.7. Company Charter and Bylaws. This Plan is subject to the charter and by-laws of the Company, as they may be amended from time to time.

     11.8. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company; however, in the event of commencement of a voluntary or involuntary case of bankruptcy against or by the Company, all vested and unvested Awards made hereunder shall be canceled and void.

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     11.9. Governing Law. All questions arising with respect to this Plan and any Phantom Stock Agreement executed hereunder shall be determined by reference to the laws of the State of Delaware in effect at the time of their adoption and execution, respectively, without implementing its laws regarding choice of law.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of November 9, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Company on that date.

Alion Science and Technology Corporation

By: /s/ Bahman Atefi   Chief Executive Officer

Attest:	/s/ Jim Fontana
Secretary

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EX-10.60

Exhibit 10.60

ALION SCIENCE AND TECHNOLOGY CORPORATION
2002 STOCK APPRECIATION RIGHTS PLAN

ARTICLE I
General

     1.1. Plan Name. The name of the plan is the Alion Science and Technology Corporation 2002 Stock Appreciation Rights Plan (the “Plan”).

     1.2. Purpose. The purpose of the Plan is to attract, retain and reward persons providing services to Alion Science and Technology Corporation (“Alion”), its Affiliates and any successor corporation(s) thereto (collectively, the “Corporation”) and to motivate such persons to contribute to the growth and future success of the Corporation.

     1.3. Effective Date; Term. The Plan is effective as of the date on which Alion acquires a substantial portion of the assets of IIT Research Institute. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth (10^th) anniversary of the effective date of the Plan; provided, however, that on and after October 3, 2004, no further Awards shall be granted under the Plan. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. This amendment and restatement of the Plan is effective as of January 1, 2005; provided, however, that no provision shall apply to an Award earned and vested on or prior to December 31, 2004, to the extent that such provision constitutes a material modification of such Award for purposes of Code Section 409A.

     1.4. Shares Subject to the Plan.

     (a) Subject to adjustments as provided in Article VI, the shares of Stock that may be used for reference purposes with respect to SAR Awards granted under the Plan shall not exceed ten percent (10%) of the shares of Stock outstanding on a fully diluted basis (assuming the exercise of any outstanding options, warrants and rights including, without limitation, SARs, and assuming the conversion into Stock of any outstanding securities convertible into Stock) from time to time. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled without the delivery of consideration, the shares of Stock that are used for reference purposes for such Award shall thereafter be available for further Awards under the Plan.

     (b) No actual shares of Stock are reserved hereunder. References to shares of Stock are for accounting and valuation purposes only, and not to grant any voting or other rights associated with ownership of Stock.

ARTICLE II
DEFINITIONS

For purposes of the Plan, the following terms shall be defined as set forth below.

     2.1. “Administrative Committee” means the Compensation Committee of the Board, or such person or persons as the Compensation Committee shall designate, unless the Board resolves to act itself as the Administrative Committee.

     2.2. “Affiliate” means any entity, whether now or hereafter existing, which at the time of reference, controls, is controlled by, or is under common control with, Alion (including, but not limited to, joint ventures, limited liability companies, and partnerships).

     2.3. “Award” means any SARs granted pursuant to the Plan.

     2.4. “Board” means the Board of Directors of Alion.

     2.5. “Cause” means, for purposes of this Plan:

     (a) With respect to an individual who is party to a written agreement with the Corporation which contains a definition of “cause” or “for cause” or words of similar import for purposes of termination of employment thereunder by the Corporation, “cause” or “for cause” as defined in such agreement.

     (b) In all other cases (i) the Participant’s intentional, persistent failure, dereliction, or refusal to perform such duties as are reasonably assigned to him or her by the officers or directors of the Corporation; (ii) the Participant’s fraud, dishonesty or other deliberate injury to the Corporation in the performance of his or her duties on behalf of, or for, the Corporation; (iii) the Participant’s conviction of a crime which constitutes a felony involving moral turpitude, fraud or deceit regardless of whether such crime involves the Corporation; (iv) the willful commission by the Participant of a criminal or other act that causes substantial economic damage to the Corporation or substantial injury to the business reputation of the Corporation; (v) the Participant’s material breach of his or her employment or engagement agreement, if any; or (vi) the Participant’s breach of any material provision of the Participant’s Grant Agreement representing an Award. For purposes of the Plan, no act, or failure to act, on the part of any person shall be considered “willful” unless done or omitted to be done by the person other than in good faith and without reasonable belief that the person’s action or omission was in the best interest of the Corporation.

     2.6. “CEO” means the Chief Executive Officer of Alion.

     2.7. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Alion that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market Value

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or total voting power of the stock of Alion. However, if any Person or Group is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of Alion, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of Alion. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which Alion acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of Alion (or issuance of stock of Alion) and stock in Alion remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of Alion possessing 35% or more of the total voting power of the stock of Alion;

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

     (d) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) assets from Alion that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of Alion immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of Alion, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. However, no Change in Control shall be deemed to occur under this subsection (d) as a result of a transfer to:

     (i) A shareholder of Alion (immediately before the asset transfer) in exchange for or with respect to its stock;

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has

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occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Corporation as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.8. “Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

     2.9. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Corporation; or (c) has been determined to be totally disabled by the Social Security Administration..

     2.10. “Fair Market Value” on any given date means the value of one share of Stock as determined by the Administrative Committee in its sole discretion, based upon the most recent valuation of the Stock made by an independent appraisal that meets the requirements of Code Section 401(a)(28)(C) and the regulations thereunder as of a date that is no more than 12 months before the relevant transaction to which the valuation is applied.

     2.11. “Grant Agreement” means the agreement between the Corporation and the Participant pursuant to which the Corporation authorizes an Award hereunder. Each Grant Agreement entered into between the Corporation and a Participant with respect to an Award granted under the Plan shall incorporate the terms of this Plan and shall contain such terms and conditions, consistent with the provisions of the Plan, as may be established by the Administrative Committee. Provisions in any Grant Agreement relating to matters such as noncompetition, nonsolicitation and protection of intellectual property are hereby deemed to be consistent with the Plan.

     2.12. “Grant Date” means the date on which the Administrative Committee formally acts to grant an Award to a Participant or such other date as the Administrative Committee shall so designate at the time of taking such formal action.

     2.13. “Participant” means any director, officer, employee or consultant of the Corporation to whom any Award is granted pursuant to the Plan.

     2.14. “Payment Date” means the date established for exercise or payment of Awards in Section 5.3 or 5.5 of the Plan, as applicable.

     2.15. “SAR” means a stock appreciation right, as awarded under Article V.

     2.16. “Stock” means the voting common stock, $0.01 par value per share, of Alion, subject to adjustments pursuant to the Plan.

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     2.17. “Termination of Employment” means cessation of performance of services for the Corporation. For purposes of maintaining a Participant’s continuous status as an Employee and accrual of rights under any Award granted pursuant to the Plan, transfer of an Employee among Alion and any of its Affiliates shall not be considered a Termination of Employment with the Corporation. A Participant will not be deemed to have incurred a Termination of Employment while he or she is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with the Corporation or an Affiliate is provided either by statute or by contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or by contract, the Termination of Employment will be deemed to occur on the first date immediately following such six-month period. For the avoidance of doubt, and by way of example only, if a Participant works for a wholly-owned subsidiary of the Corporation, then a sale of the subsidiary by the Corporation would be regarded as a Termination of Employment of such Participant for purposes of this Plan, notwithstanding the Participant’s continued employment with that former subsidiary. Whether an Employee of the Corporation incurs a termination of employment with the Corporation will be determined in accordance with the requirements of Code Section 409A.

     2.18. “Vesting Period” means that period of time during which the Award is subject to a risk of forfeiture. Subject to the forfeiture provisions of Section 5.5 below, Awards shall vest at a rate of twenty percent (20%) per year on the annual anniversary of the Grant Date; provided, however that any Award which is given to a member of the Board of Directors will vest annually on a pro-rata basis over the term or remainder of any term which such director is serving from the date of Award.

ARTICLE III
ADMINISTRATION

     3.1. General. The Plan shall be administered by the Administrative Committee. The Administrative Committee shall have the full and final authority, in its discretion, to interpret conclusively the provisions of the Plan; to adopt such rules for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan.

     3.2. Procedure. The Administrative Committee shall meet at such times and places and upon such notice as it may determine. A majority of the members of the Board or committee serving as Administrative Committee hereunder shall constitute a quorum. Any acts by the Administrative Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote. Additionally, any acts reduced to writing or approved in writing by all of the members of the Board or committee serving as Administrative Committee hereunder shall be valid acts of the Administrative Committee. Members of the Board or committee who are either eligible for Awards or have been granted Awards may vote on any matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan, except that no such member shall act upon the granting of an Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of an Award to him or her.

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     3.3. Duties. The Administrative Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrative Committee deems necessary or advisable, all within the Administrative Committee’s sole and absolute discretion. The Administrative Committee shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to:

     (a) construe the Plan and any Award under the Plan;

     (b) select the directors, officers, employees and consultants of the Corporation to whom Awards may be granted and the time or times at which Awards shall be granted;

     (c) determine the number of shares of Stock to be covered by or used for reference purposes for any Award;

     (d) determine and modify from time to time the terms and conditions, including restrictions, of any Award and to approve the form of Grant Agreements;

     (e) impose limitations on Awards, including limitations on transfer provisions; and

     (f) modify, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards.

     3.4. Delegation of Authority. The Administrative Committee hereby delegates to the CEO the authority to exercise the duties set forth in section 3.3(b), and the amount(s) of any such Awards made in accordance with such duties, for all officers, employees and consultants of the Corporation, except for Awards made to executive officers of the Corporation. The CEO shall exercise this authority in accordance with this Plan, including without limitation sections 1.4, 5.1 and 5.4. The CEO shall provide the Administrative Committee with a detailed written report of all such Awards made under this delegated authority on a quarterly basis. With respect to executive officers of the Corporation, the Administrative Committee hereby delegates to the CEO the authority to nominate persons to receive Awards, which nomination shall be subject to the approval of the Administrative Committee. The Administrative Committee may revoke or amend the terms of this delegation at any time, but such revocation shall not invalidate prior actions of the CEO that were consistent with the terms of the Plan. All Awards are subject to the approval of the Administrative Committee.

     3.5. Limited Liability. To the maximum extent permitted by law, no member of the Board or committee serving as Administrative Committee hereunder shall be liable for any action taken or decision made in good faith relating to the Plan or any Award.

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     3.6. Indemnification. To the maximum extent permitted by law and by the Corporation’s charter and by-laws, the members of the Board or committee serving as Administrative Committee hereunder shall be indemnified by the Corporation in respect of all their activities under the Plan.

     3.7. Effect of Administrative Committee’s Decision. All actions taken and decisions and determinations made by the Administrative Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrative Committee’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Corporation, its stockholders, any Participants in the Plan and any other employee of the Corporation, and their respective successors in interest.

ARTICLE IV
ELIGIBILITY AND PARTICIPATION

     4.1. Eligibility. Directors, officers, employees and consultants of, or to, as the case may be, the Corporation who, in the opinion of the Administrative Committee, are responsible for the continued growth and development and future success of the business shall be eligible to participate in the Plan.

     4.2. Participation. An eligible individual shall become a Participant hereunder when he or she is granted an Award hereunder, as evidenced by a Grant Agreement executed by the Corporation and the Participant.

ARTICLE V
STOCK APPRECIATION RIGHTS

     5.1. Award of SARs. Subject to the other applicable provisions of the Plan, the Administrative Committee may at any time and from time to time grant SARs to eligible Participants, as it determines; provided, however, that on and after October 3, 2004, no further Awards shall be granted under the Plan. Notwithstanding the foregoing to the contrary, no grant of SARs may be made to any “Disqualified Person” (within the meaning of Sections 409(p)(4) and 4979A of the Code, as added by the Economic Growth and Tax Relief Reconciliation Act of 2001) for any period during which the Corporation maintains an employee stock ownership plan, and this rule shall apply in years prior to the effective date of Sections 409(p)(4) and 4979A of the Code. Any grant of SARs made in violation of this provision shall be null and void ab initio. In addition, no grant of SARs may be made to any eligible individual if and to the extent that such grant would cause such individual to become a Disqualified Person. SARs shall be evidenced by Grant Agreements, executed by the Corporation and the Participant, stating the number of SARs and the terms and conditions of such SARs, in such form as the Administrative Committee may from time to time determine. The Participant shall have none of the rights of a stockholder with respect to any shares of Stock represented by a SAR.

     5.2. Amount of Payment of SARs. A SAR shall entitle the Participant to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate

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value equal to the product of (a) the excess of (i) the Fair Market Value on the exercise or other Payment Date of one share of Stock over (ii) the base price per share specified in the Grant Agreement (which shall be the Fair Market Value of one share of Stock on the Grant Date of the SAR), times (b) the number of shares specified by the SAR, or portion thereof, which is exercised. Subject to the Vesting Period and other applicable provisions of the Plan and the Grant Agreement, a SAR that was earned and vested on or before December 31, 2004 may be exercised in whole or in part at the Participant’s discretion.

     5.3. Exercise of SARs.

     (a) Grandfathered SARs. A Participant may exercise all or any vested portion of an Award in which he or she has become vested on or before December 31, 2004 (referred to as a “Grandfathered” SAR or Award), by giving sixty (60) days prior written notice to the Administrative Committee. The exercise notice must state the number of shares specified in the Grant Agreement which are desired to be exercised. Once an Award is fully vested, such written notice must be given within sixty (60) days after the fifth anniversary of the Award, or the Award will be forfeited in its entirety and become automatically void.

     (i) The notice required by Section 5.3(a) shall not be required in the event of the death or disability (as defined in the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan) of the Participant before an Award is fully vested. In such case, such Awards shall be considered exercised.

     (ii) Except as further provided below, a Participant who terminates employment with the Company for any reason other than death or disability must exercise all vested Awards within sixty (60) days after the effective date of termination, under the procedures outlined in Section 5.3(a) above, or forfeit their rights to all vested Awards.

     (iii) Subject to section 5.3(c), payment by the Corporation of the amount receivable upon any exercise of a Grandfathered SAR shall be made by the delivery of cash in a lump sum following the next semi-annual valuation of Alion Stock for purposes of the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan (“Semi-annual ESOP Valuation”) after the date of exercise. Notwithstanding any other provision in this Section 5.3, the Corporation may make payments earlier in a nondiscriminatory manner.

     (iv) The Administrator has the discretion to delay payment of a Grandfathered Award for a period not to exceed five (5) years. If the payment is delayed beyond ninety (90) days following the Semi-annual ESOP Valuation, interest shall accrue from the date of such valuation. The interest shall be calculated at the prime rate as announced in the Wall Street Journal on the date of exercise. In making this determination, the Administrator will examine the available cash and anticipated cash needs of the Corporation.

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     (b) Non-Grandfathered SARs. A Participant shall receive payment for an Award vesting on or after January 1, 2005 (referred to as a “Non-Grandfathered” SAR or Award), as a cash payment as of the Payment Date, which shall be the date on which the Participant becomes fully vested in the original grant, or, if earlier, the date set forth in Section 5.5 below. Except as provided below, the Corporation shall make payment on a Payment Date by the delivery to the participant of cash in a lump sum sixty (60) days after the Payment Date. Notwithstanding the foregoing or any other provision of this Plan, a Participant granted Non-Grandfathered SARs under this Plan may elect, in accordance with Internal Revenue Service Notice 2005-1, Q-20(a), to receive payment of any such Awards in calendar year 2005 or, if later, in the taxable year in which amounts under the Award become earned and vested. Any such election shall be made in a form acceptable to the Administrative Committee and filed with the Administrative Committee no later than December 31, 2005.

     (c) Withholding. All federal, state and local taxes, as well as other appropriate items, will be withheld from payment.

     5.4. Disqualified Persons. If Participant is or becomes a Disqualified Person as described in Section 5.1 above, then the full amount of any then outstanding Award that has not yet vested shall be forfeited; and no amount of an Award shall become vested, if, as a result of such vesting, the Participant would become a Disqualified Person.

     5.5. Termination and Forfeiture of Non-Grandfathered Awards.

     (a) Termination of Employment. Except as further provided below, a Participant who has a Termination of Employment for any reason other than death or Disability shall forfeit his or her rights to all unvested Awards. The Payment Date shall be the date of Termination of Employment.

     (b) Death or Disability. If a Participant incurs a Termination of Employment due to death or Disability, the Participant shall become fully vested in any outstanding Non-Grandfathered Awards, and the Payment Date shall be the date of the Participant’s Termination of Employment due to death or Disability.

     (c) Change in Control. In the event of a Change in Control, each Participant shall become fully vested in any outstanding Non-Grandfathered Awards, and the Payment Date shall be the date of the Change in Control.

     (d) Termination for Cause. If a Participant has a Termination of Employment for Cause, such Participant shall forfeit his or her rights to all unvested Non-Grandfathered Awards and all unexercised vested Awards.

     5.6. Nontransferability. No Award shall be transferable by a Participant except by will or by the laws of descent and distribution or pursuant to a gift of any vested Awards to such

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Participant’s spouse, parents, children and grandchildren, whether directly or indirectly or by means of a trust, partnership, or otherwise. Any transfer or purported transfer in violation of this paragraph shall be void and of no effect. All Awards shall be exercisable during the Participant’s lifetime only by the Participant or by the guardian or legal representative of the Participant, it being understood that references to the Participant include the guardian and legal representative of the Participant and any person to whom an Award is transferred by will, by gift, or by the laws of descent and distribution. If a Participant transfers an Award pursuant to a gift to the Participant’s spouse, parents, children or grandchildren, then such transferee(s) may not exercise such Awards until after the expiration of sixty (60) days following the effective date of transfer.

     5.7. Acceleration of Payment Date. Notwithstanding the foregoing, the Payment Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Corporation, upon advice of counsel, that the Plan or an Award fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     5.8. Delay of Payments. A payment required to be made within sixty (60) days after an applicable Payment Date shall in any event be made within 2¹/2 months after the end of the Plan Year in which the Payment Date occurs, except that payment may be delayed (without imputation of earnings, interest or other gains or losses after the Payment Date) solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Unforeseeable Administrative or Financial Cause. The Corporation reasonably determines that (1) it is administratively impracticable to make payment by the end of the applicable 2¹/2 month period or that making such payment will jeopardize the solvency of the Corporation, and (2) such impracticability or insolvency was unforeseeable as of the Grant Date;

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     (b) Payments Subject to Section 162(m). The Corporation reasonably anticipates that its deduction with respect to such payment would otherwise be limited or eliminated by application of Code Section 162(m);

     (c) Payments that Would Violate Loan Covenant or Similar Contractual Requirement. The Corporation reasonably anticipates that making the payment will violate a term of a loan agreement to which the Corporation is a party, including any ESOP loan agreement, or other similar contract to which the Corporation is a party, and such violation will cause material harm to the Corporation; or

     (d) Payments that Would Violate Law. The Corporation reasonably determines that payment would violate Federal securities laws or other applicable law.

     5.9. Compliance with Code Section 409A. No payment shall be made in violation of Section 409A or any other applicable provisions of the Code and the rules and regulations thereunder.

ARTICLE VI
TRANSACTIONS

     6.1. Adjustment of Number and Price of Shares. Any other provision of the Plan notwithstanding, if through, or as a result of, any merger, consolidation, sale of all or substantially all of the assets of Alion, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of Alion, or additional shares or new or different shares or other securities of Alion or other non-cash assets are distributed with respect to such shares of Stock or other securities, the Administrative Committee shall make an appropriate or proportionate adjustment in the Awards as it deems appropriate, in its sole discretion. The adjustment by the Administrative Committee shall be final, binding and conclusive.

     6.2. Adjustments Due to Special Circumstances. The Administrative Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Corporation, or the financial statements of the Corporation, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrative Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     6.3. Dissolution and Liquidation. In the case of any portion of an Award that was earned and vested on or before December 31, 2004, in the event of any proposed dissolution or liquidation of Alion (other than pursuant to a plan of merger or reorganization), the Corporation shall give each Participant written notice at least sixty (60) days prior to the effective date of such event, that the event is to occur. Upon receipt of this notice: (a) each Participant shall have the right to exercise his or her vested Awards, in whole or in part, at any time up to five (5) days prior to the effective date of such liquidation and dissolution; and (b) the Administrative

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Committee may, in lieu of such exercise, make arrangements with the Participants for the payment of appropriate consideration to them for the cancellation and surrender of any vested Award that is so canceled or surrendered at any time up to ten (10) days prior to the effective date of such liquidation and dissolution. Any Award not so exercised, canceled, or surrendered shall terminate on the last day for exercise prior to the effective date of dissolution or liquidation.

     6.4. Compliance with Code Section 409A. Notwithstanding the foregoing, the Administrative Committee shall not make an adjustment under this Article VI which results in a violation of Code Section 409A.

ARTICLE VII
AMENDMENT AND TERMINATION

     7.1. Amendment. The Board may amend the Plan at any time and from time to time, provided that (a) no amendment shall deprive any person of any rights granted under the Plan before the effective date of such amendment without such person’s consent; and (b) amendments may be subject to shareholder approval to the extent needed to comply with applicable law. Notwithstanding the foregoing, the Board may unilaterally amend the Plan or any outstanding Award subject to Section 409A as necessary to cause the Plan or such Award to comply with Code Section 409A.

     7.2. Termination. The Board reserves the right to terminate the Plan in whole or in part at any time, without the consent of any person granted any rights under the Plan. Termination of the Plan shall not affect the Administrative Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of payment of any Award except as permitted by the Administrative Committee and consistent with the requirements of Code Section 409A.

ARTICLE VIII
MISCELLANEOUS

     8.1. Restrictive Legends. The Corporation may at any time place legends referencing any restrictions described in the Grant Agreement and any applicable federal or state securities law restrictions on all Awards.

     8.2. Compliance with Governmental Regulations. Notwithstanding any provision of the Plan or the terms of any Grant Agreement entered into pursuant to the Plan, Alion shall not be required to issue any securities hereunder prior to registration of the offer or sale securities subject to the Plan under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, if such registration shall be necessary, or before compliance by the Alion or any Participant with any other provisions of either of those acts or of regulations or rulings of the Securities and Exchange Commission thereunder, or before compliance with other federal and state laws and regulations and rulings thereunder, including the rules any applicable securities exchange or quotation system. Alion shall use its best efforts to effect such registrations and to comply with such laws, regulations and rulings forthwith upon advice by its counsel that any such registration or compliance is necessary.

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     8.3. Corporation Charter and Bylaws. This Plan is subject to the charter and by-laws of Alion, as they may be amended from time to time.

     8.4. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from the Corporation pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Corporation; however, in the event of commencement of a voluntary or involuntary case of bankruptcy against or by Alion, all vested and unvested Awards made hereunder shall be canceled and void.

     8.5. No Guarantee of Employment. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Corporation or give any person any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to discharge to the same extent as if this Plan had never been adopted. Nothing in this Plan shall prevent, interfere with or limit in any way the right of the Corporation to terminate a Participant’s employment at any time, whether or not such termination would result in: (a) the failure of any Award to vest; (b) the forfeiture of any unvested or vested portion of any Award under the Plan; and/or (c) any other adverse effect on the Participant’s interests under the Plan.

     8.6. No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Corporation from adopting or continuing in effect other compensation arrangements (whether such arrangements be generally applicable or applicable only in specific cases) as the Administrative Committee, in its discretion determines desirable, including without limitation the granting of stock options, stock awards, stock appreciation rights or phantom stock units otherwise than under the Plan; provided that income recognized by a Participant in payment of a SAR shall be excluded from the calculation of benefits under any pension, profit-sharing, ESOP or any other benefit plan maintained by the Corporation unless such benefit plan provides otherwise, making specific reference to SARs.

     8.7. Governing Law. The provisions of this Plan shall be governed by, construed and administered in accordance with applicable federal law; provided, however, that to the extent not in conflict with federal law, this Plan shall be governed by, construed and administered under the laws of Delaware, other than its laws respecting choice of law.

     8.8. Severability. If any provision of the Plan shall be held invalid, the remainder of this Plan shall not be affected thereby and the remainder of the Plan shall continue in force.

     8.9. Identity. If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount of time of such payment, the Administrative Committee shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrative Committee shall also

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be entitled to pay such sum into court in accordance with the appropriate rules of law. Any expenses incurred by the Corporation or the Administrative Committee incident to such proceeding or litigation shall be charged against the account of the affected Participant.

     8.10. Incompetence. If the Administrative Committee determines that any person to whom a benefit is payable under the Plan is incompetent by reason of a physical or mental disability, the Administrative Committee shall have the power to cause the payments becoming due to such person to be made to another person for his or her benefit without the responsibility of the Administrative Committee or the Corporation to see to the application of such payments. Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Administrative Committee and the Corporation.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of November 9, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Corporation on that date.

/s/ Bahman Atefi  

Chief Executive Officer 

Date Approved by the Board: November 8, 2005

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EX-10.61

Exhibit 10.61

ALION SCIENCE AND TECHNOLOGY CORPORATION

2004 STOCK APPRECIATION RIGHTS PLAN

ARTICLE I

GENERAL

     1.1. Plan Name. The name of the plan is the Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan (the “Plan”).

     1.2. Purpose. The purpose of the Plan is to attract, retain and reward persons providing services to Alion Science and Technology Corporation (“Alion”), its Affiliates and any successor corporation(s) thereto (collectively, the “Corporation”) and to motivate such persons to contribute to the growth and future success of the Corporation.

     1.3. Effective Date; Term. The Plan is effective as of November 9, 2004. No Award shall be granted under the Plan after the close of business on the day immediately preceding the eighth (8^th) anniversary of the effective date of the Plan. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. This amendment and restatement of the Plan is effective as of November 9, 2005; provided, however, that any provisions of the Plan required to bring the Plan into compliance with Code Section 409A shall be effective as of November 9, 2004; provided further, that the Administrative Committee may, in its discretion, apply provisions of this Plan effective on November 9, 2005, to previously issued Awards hereunder.

     1.4. Shares Subject to the Plan.

     (a) Subject to adjustments as provided in Article VI, the shares of Stock that may be used for reference purposes with respect to SAR Awards granted under the Plan shall not exceed twelve percent (12%) of the shares of Stock outstanding on a fully diluted basis (assuming the exercise of any outstanding options, warrants and rights including, without limitation, SARs, and assuming the conversion into Stock of any outstanding securities convertible into Stock) from time to time. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled without the delivery of consideration, the shares of Stock that are used for reference purposes for such Award shall thereafter be available for further Awards under the Plan.

     (b) No actual shares of Stock are reserved hereunder. References to shares of Stock are for accounting and valuation purposes only, and not to grant any voting or other rights associated with ownership of Stock.

ARTICLE II

DEFINITIONS

     For purposes of the Plan, the following terms shall be defined as set forth below.

     2.1. “Administrative Committee” means the Compensation Committee of the Board, or such person or persons as the Compensation Committee shall designate, unless the Board resolves to act itself as the Administrative Committee.

     2.2. “Affiliate” means any entity, whether now or hereafter existing, which at the time of reference, controls, is controlled by, or is under common control with, Alion (including, but not limited to, joint ventures, limited liability companies, and partnerships).

     2.3. “Award” means any SARs granted pursuant to the Plan.

     2.4. “Board” means the Board of Directors of Alion.

     2.5. “Cause” means, for purposes of this Plan:

     (a) With respect to an individual who is party to a written agreement with the Corporation which contains a definition of “cause” or “for cause” or words of similar import for purposes of termination of employment thereunder by the Corporation, “cause” or “for cause” as defined in such agreement.

     (b) In all other cases (i) the Participant’s intentional, persistent failure, dereliction, or refusal to perform such duties as are reasonably assigned to him or her by the officers or directors of the Corporation; (ii) the Participant’s fraud, dishonesty or other deliberate injury to the Corporation in the performance of his or her duties on behalf of, or for, the Corporation; (iii) the Participant’s conviction of a crime which constitutes a felony involving moral turpitude, fraud or deceit regardless of whether such crime involves the Corporation; (iv) the willful commission by the Participant of a criminal or other act that causes substantial economic damage to the Corporation or substantial injury to the business reputation of the Corporation; (v) the Participant’s material breach of his or her employment or engagement agreement, if any; or (vi) the Participant’s breach of any material provision of the Participant’s Grant Agreement representing an Award. For purposes of the Plan, no act, or failure to act, on the part of any person shall be considered “willful” unless done or omitted to be done by the person other than in good faith and without reasonable belief that the person’s action or omission was in the best interest of the Corporation.

     2.6. “CEO” means the Chief Executive Officer of Alion.

     2.7. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Alion that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market Value or total voting power of the stock of Alion. However, if any Person or Group is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of Alion, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of Alion. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which Alion acquires its

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stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of Alion (or issuance of stock of Alion) and stock in Alion remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of Alion possessing 35% or more of the total voting power of the stock of Alion;

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

     (d) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) assets from Alion that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of Alion immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of Alion, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. However, no Change in Control shall be deemed to occur under this subsection (d) as a result of a transfer to:

     (i) A shareholder of Alion (immediately before the asset transfer) in exchange for or with respect to its stock;

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Corporation as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.8. “Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

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     2.9. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Corporation; or (c) has been determined to be totally disabled by the Social Security Administration..

     2.10. “Fair Market Value” on any given date means the value of one share of Stock as determined by the Administrative Committee in its sole discretion, based upon the most recent valuation of the Stock made by an independent appraisal that meets the requirements of Code Section 401(a)(28)(C) and the regulations thereunder as of a date that is no more than 12 months before the relevant transaction to which the valuation is applied.

     2.11. “Grant Agreement” means the agreement between the Corporation and the Participant pursuant to which the Corporation authorizes an Award hereunder. Each Grant Agreement entered into between the Corporation and a Participant with respect to an Award granted under the Plan shall incorporate the terms of this Plan and shall contain such terms and conditions, consistent with the provisions of the Plan, as may be established by the Administrative Committee. Provisions in any Grant Agreement relating to matters such as noncompetition, nonsolicitation and protection of intellectual property are hereby deemed to be consistent with the Plan.

     2.12. “Grant Date” means the date on which the Administrative Committee formally acts to grant an Award to a Participant or such other date as the Administrative Committee shall so designate at the time of taking such formal action.

     2.13. “Participant” means any director, officer, employee or consultant of the Corporation to whom any Award is granted pursuant to the Plan.

     2.14. “Payment Date” means the first anniversary of the date a Participant’s Award becomes 100% vested, or such other date as the Administrative Committee shall designate with respect to a vested amount in the Participant’s Grant Agreement, or, if earlier, the date set forth in Section 5.6 of the Plan.

     2.15. “SAR” means a stock appreciation right, as awarded under Article V.

     2.16. “Stock” means the voting common stock, $0.01 par value per share, of Alion, subject to adjustments pursuant to the Plan.

     2.17. “Termination of Employment” means cessation of performance of services for the Corporation. For purposes of maintaining a Participant’s continuous status as an Employee and accrual of rights under any Award granted pursuant to the Plan, transfer of an Employee among Alion and any of its Affiliates shall not be considered a Termination of Employment with the Corporation. A Participant will not be deemed to have incurred a Termination of Employment

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while he or she is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with the Corporation or an Affiliate is provided either by statute or by contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or by contract, the Termination of Employment will be deemed to occur on the first date immediately following such six-month period. For the avoidance of doubt, and by way of example only, if a Participant works for a wholly-owned subsidiary of the Corporation, then a sale of the subsidiary by the Corporation would be regarded as a Termination of Employment of such Participant for purposes of this Plan, notwithstanding the Participant’s continued employment with that former subsidiary. Whether an Employee of the Corporation incurs a termination of employment with the Corporation will be determined in accordance with the requirements of Code Section 409A.

     2.18. “Vesting Period” means that period of time during which the Award is subject to a risk of forfeiture. Subject to the forfeiture provisions of Section 5.6 below, Awards shall vest at a rate of twenty percent (25%) per year on the annual anniversary of the Grant Date. Any Award which is given to a member of the Board of Directors will vest annually on a pro-rata basis over the term or remainder of any term which such director is serving from the date of Award.

ARTICLE III

ADMINISTRATION

     3.1. General. The Plan shall be administered by the Administrative Committee. The Administrative Committee shall have the full and final authority, in its discretion, to interpret conclusively the provisions of the Plan; to adopt such rules for carrying out the Plan as it may deem advisable; to decide all questions of fact arising in the application of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan.

     3.2. Procedure. The Administrative Committee shall meet at such times and places and upon such notice as it may determine. A majority of the members of the Board or committee serving as Administrative Committee hereunder shall constitute a quorum. Any acts by the Administrative Committee may be taken at any meeting at which a quorum is present and shall be by majority vote of those members entitled to vote. Additionally, any acts reduced to writing or approved in writing by all of the members of the Board or committee serving as Administrative Committee hereunder shall be valid acts of the Administrative Committee. Members of the Board or committee who are either eligible for Awards or have been granted Awards may vote on any matters affecting the administration of the Plan or the grant of Awards pursuant to the Plan, except that no such member shall act upon the granting of an Award to himself or herself, but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of an Award to him or her.

     3.3. Duties. The Administrative Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrative Committee deems necessary or advisable, all within the Administrative

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Committee’s sole and absolute discretion. The Administrative Committee shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to:

     (a) construe the Plan and any Award under the Plan;

     (b) select the directors, officers, employees and consultants of the Corporation to whom Awards may be granted and the time or times at which Awards shall be granted;

     (c) determine the number of shares of Stock to be covered by or used for reference purposes for any Award;

     (d) determine and modify from time to time the terms and conditions, including restrictions, of any Award and to approve the form of Grant Agreements;

     (e) impose limitations on Awards, including limitations on transfer provisions; and

     (f) modify, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards.

     3.4. Delegation of Authority. The Administrative Committee hereby delegates to the CEO the authority to exercise the duties set forth in section 3.3(b), and the amount(s) of any such Awards made in accordance with such duties, for all officers, employees and consultants of the Corporation, except for Awards made to executive officers of the Corporation. The CEO shall exercise this authority in accordance with this Plan, including without limitation sections 1.4, 5.1 and 5.5. The CEO shall provide the Administrative Committee with a detailed written report of all such Awards made under this delegated authority on a quarterly basis. With respect to executive officers of the Corporation, the Administrative Committee hereby delegates to the CEO the authority to nominate persons to receive Awards, which nomination shall be subject to the approval of the Administrative Committee. The Administrative Committee may revoke or amend the terms of this delegation at any time, but such revocation shall not invalidate prior actions of the CEO that were consistent with the terms of the Plan. All Awards are subject to the approval of the Administrative Committee.

     3.5. Limited Liability. To the maximum extent permitted by law, no member of the Board or committee serving as Administrative Committee hereunder shall be liable for any action taken or decision made in good faith relating to the Plan or any Award.

     3.6. Indemnification. To the maximum extent permitted by law and by the Corporation’s charter and by-laws, the members of the Board or committee serving as Administrative Committee hereunder shall be indemnified by the Corporation in respect of all their activities under the Plan.

     3.7. Effect of Administrative Committee’s Decision. All actions taken and decisions and determinations made by the Administrative Committee on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrative Committee’s

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sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Corporation, its stockholders, any Participants in the Plan and any other employee of the Corporation, and their respective successors in interest.

ARTICLE IV

ELIGIBILITY AND PARTICIPATION

     4.1. Eligibility. Directors, officers, employees and consultants of, or to, as the case may be, the Corporation who, in the opinion of the Administrative Committee, are responsible for the continued growth and development and future success of the business shall be eligible to participate in the Plan.

     4.2. Participation. An eligible individual shall become a Participant hereunder when he or she is granted an Award hereunder, as evidenced by a Grant Agreement executed by the Corporation and the Participant.

ARTICLE V

STOCK APPRECIATION RIGHTS

     5.1. Award of SARs. Subject to the other applicable provisions of the Plan, the Administrative Committee may at any time and from time to time grant SARs to eligible Participants, as it determines. Notwithstanding the foregoing to the contrary, no grant of SARs may be made to any “Disqualified Person” (within the meaning of Sections 409(p)(4) and 4979A of the Code) for any period during which the Corporation maintains an employee stock ownership plan. Any grant of SARs made in violation of this provision shall be null and void ab initio. In addition, no grant of SARs may be made to any eligible individual if and to the extent that such grant would cause such individual to become a Disqualified Person. SARs shall be evidenced by Grant Agreements, executed by the Corporation and the Participant, stating the number of SARs and the terms and conditions of such SARs, in such form as the Administrative Committee may from time to time determine. The Participant shall have none of the rights of a stockholder with respect to any shares of Stock represented by a SAR.

     5.2. Amount of Payment Upon Maturation of SARs. Except as set forth in an applicable Grant Agreement with respect to a Change of Control, a SAR shall entitle the Participant to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (1) the excess of (i) the Fair Market Value on the Payment Date of one share of Stock over (ii) the base price per share specified in the Grant Agreement (which shall be the Fair Market Value of one share of Stock on the Grant Date), times (2) the number of shares underlying the SAR. Notwithstanding the foregoing, in the event of a Change in Control, Fair Market Value under (1)(i) of the preceding sentence shall be equal to the share price of one share of Alion Common Stock based on the transaction price of the Change in Control transaction, or the most recently determined per share Fair Market Value, whichever is greater.

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     5.3. Payment of SARs. A Participant will receive payment for all of a vested Award by the delivery of cash in a lump sum sixty (60) days following the Payment Date. All federal, state and local taxes, as well as other appropriate items, will be withheld from payments. Notwithstanding the foregoing, to the extent permitted by the Administrative Committee, in lieu of payment of an Award under the preceding sentence, a Participant granted an Award under this Plan before November 9, 2005, may elect, in accordance with Internal Revenue Service Notice 2005-1, Q-20(a), to receive payment of any such Award in calendar year 2005 or, if later, in the taxable year in which amounts under the Award become earned and vested. Any such election shall be made in a form acceptable to the Administrative Committee and filed with the Administrative Committee no later than December 31, 2005.

     5.4. Election to Defer Benefits. A Participant who is (or is eligible to become) a participant in the Alion Science and Technology Corporation Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) may elect to defer the amount of benefit that would otherwise be payable with respect to an Award that is 100% vested upon a Payment Date into the Deferred Compensation Plan. Any such election shall be made in a writing acceptable to the Administrative Committee and filed with the Administrative Committee at least one year prior to the Payment Date. Such election shall become effective upon the Payment Date and shall specify a time for payment and method of distribution available under the Deferred Compensation Plan, provided that such election may not provide for a time of distribution (other than as a result of Termination of Employment, death or Disability) earlier than five years after the Payment Date. Notwithstanding the above, this Section 5.4 shall not apply to amounts payable under the second sentence of Section 5.3.

     5.5. Disqualified Persons. If Participant is or becomes a Disqualified Person as described in Section 5.1 above, then the full amount of any then outstanding Award that has not yet vested shall be forfeited; and no amount of an Award shall become vested, if, as a result of such vesting, the Participant would become a Disqualified Person.

     5.6. Termination and Forfeiture of Awards.

     (a) Termination of Employment. Except as further provided below, a Participant who has a Termination of Employment for any reason other than death or Disability shall forfeit his or her rights to all unvested Awards. The Payment Date of any then outstanding vested Awards shall be the date of Termination of Employment.

     (b) Death or Disability. If a Participant incurs a Termination of Employment due to death or Disability, the Participant shall become fully vested in any outstanding Awards, and the Payment Date shall be the date of the Participant’s Termination of Employment due to death or Disability.

     (c) Change in Control. In the event of a Change in Control, if and to the extent provided in the applicable Grant Agreement, a Participant shall become fully vested in any outstanding Awards under the Grant Agreement, and the Payment Date shall be the date of the Change in Control.

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     (d) Termination for Cause. If a Participant has a Termination of Employment for Cause, such Participant shall forfeit his or her rights to all unvested Awards and all unexercised vested Awards.

     5.7. Nontransferability. No Award shall be transferable by a Participant except by will or by the laws of descent and distribution or pursuant to a gift of any vested Awards to such Participant’s spouse, parents, children and grandchildren, whether directly or indirectly or by means of a trust, partnership, or otherwise. Any transfer or purported transfer in violation of this paragraph shall be void and of no effect. All Awards shall be paid in accordance with the provisions of section 5.3(b).

     5.8. Acceleration of Payment Date. Notwithstanding the foregoing, the Payment Date of a vested Award may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Corporation, upon advice of counsel, that the Plan or an Award fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     5.9. Delay of Payments. A payment required to be made within sixty (60) days after an applicable Payment Date shall in any event be made within 2¹/2 months after the end of the Plan Year in which the Payment Date occurs, except that payment may be delayed (without imputation of earnings, interest or other gains or losses after the Payment Date) solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Unforeseeable Administrative or Financial Cause. The Corporation reasonably determines that (1) it is administratively impracticable to make payment by the end of the applicable 2¹/2 month period or that making such payment will jeopardize the solvency of the Corporation, and (2) such impracticability or insolvency was unforeseeable as of the Grant Date;

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     (b) Payments Subject to Section 162(m). The Corporation reasonably anticipates that its deduction with respect to such payment would otherwise be limited or eliminated by application of Code Section 162(m);

     (c) Payments that Would Violate Loan Covenant or Similar Contractual Requirement. The Corporation reasonably anticipates that making the payment will violate a term of a loan agreement to which the Corporation is a party, including any ESOP loan agreement, or other similar contract to which the Corporation is a party, and such violation will cause material harm to the Corporation; or

     (d) Payments that Would Violate Law. The Corporation reasonably determines that payment would violate Federal securities laws or other applicable law.

     5.10. Compliance with Code Section 409A. No payment shall be made in violation of Section 409A or any other applicable provisions of the Code and the rules and regulations thereunder.

ARTICLE VI

TRANSACTIONS

     6.1. Adjustment of Number and Price of Shares. Any other provision of the Plan notwithstanding, if through, or as a result of, any merger, consolidation, sale of all or substantially all of the assets of Alion, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of Alion, or additional shares or new or different shares or other securities of Alion or other non-cash assets are distributed with respect to such shares of Stock or other securities, the Administrative Committee shall make an appropriate or proportionate adjustment in the Awards as it deems appropriate, in its sole discretion. The adjustment by the Administrative Committee shall be final, binding and conclusive.

     6.2. Adjustments Due to Special Circumstances. The Administrative Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Corporation, or the financial statements of the Corporation, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrative Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

     6.3. Compliance with Code Section 409A. Notwithstanding the foregoing, the Administrative Committee shall not make an adjustment under this Article VI which results in a violation of Code Section 409A.

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ARTICLE VII

AMENDMENT AND TERMINATION

     7.1. Amendment. The Board may amend the Plan at any time and from time to time, provided that (a) no amendment shall deprive any person of any rights granted under the Plan before the effective date of such amendment without such person’s consent; and (b) amendments may be subject to shareholder approval to the extent needed to comply with applicable law. Notwithstanding the foregoing, the Board may unilaterally amend the Plan or any outstanding Award subject to Section 409A as necessary to cause the Plan or such Award to comply with Code Section 409A.

     7.2. Termination. The Board reserves the right to terminate the Plan in whole or in part at any time, without the consent of any person granted any rights under the Plan. Termination of the Plan shall not affect the Administrative Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of payment of any Award except as permitted by the Administrative Committee and consistent with the requirements of Code Section 409A.

ARTICLE VIII

MISCELLANEOUS

     8.1. Restrictive Legends. The Corporation may at any time place legends referencing any restrictions described in the Grant Agreement and any applicable federal or state securities law restrictions on all Awards.

     8.2. Compliance with Governmental Regulations. Notwithstanding any provision of the Plan or the terms of any Grant Agreement entered into pursuant to the Plan, Alion shall not be required to issue any securities hereunder prior to registration of the offer or sale securities subject to the Plan under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, if such registration shall be necessary, or before compliance by the Alion or any Participant with any other provisions of either of those acts or of regulations or rulings of the Securities and Exchange Commission thereunder, or before compliance with other federal and state laws and regulations and rulings thereunder, including the rules any applicable securities exchange or quotation system. Alion shall use its best efforts to effect such registrations and to comply with such laws, regulations and rulings forthwith upon advice by its counsel that any such registration or compliance is necessary.

     8.3. Corporation Charter and Bylaws. This Plan is subject to the charter and by-laws of Alion, as they may be amended from time to time.

     8.4. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from the Corporation pursuant to an Award, such

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right shall be no greater than the right of any unsecured general creditor of the Corporation; however, in the event of commencement of a voluntary or involuntary case of bankruptcy against or by Alion, all vested and unvested Awards made hereunder shall be canceled and void.

     8.5. No Guarantee of Employment. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Corporation or give any person any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to discharge to the same extent as if this Plan had never been adopted. Nothing in this Plan shall prevent, interfere with or limit in any way the right of the Corporation to terminate a Participant’s employment at any time, whether or not such termination would result in: (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award under the Plan; and/or (iii) any other adverse effect on the Participant’s interests under the Plan.

     8.6. No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Corporation from adopting or continuing in effect other compensation arrangements (whether such arrangements be generally applicable or applicable only in specific cases) as the Administrative Committee, in its discretion determines desirable, including without limitation the granting of stock options, stock awards, stock appreciation rights or phantom stock units otherwise than under the Plan; provided that income recognized by a Participant in payment of a SAR shall be excluded from the calculation of benefits under any pension, profit-sharing, ESOP or any other benefit plan maintained by the Corporation unless such benefit plan provides otherwise, making specific reference to SARs.

     8.7. Governing Law. The provisions of this Plan shall be governed by, construed and administered in accordance with applicable federal law; provided, however, that to the extent not in conflict with federal law, this Plan shall be governed by, construed and administered under the laws of Delaware, other than its laws respecting choice of law.

     8.8. Severability. If any provision of the Plan shall be held invalid, the remainder of this Plan shall not be affected thereby and the remainder of the Plan shall continue in force.

     8.9. Identity. If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount of time of such payment, the Administrative Committee shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrative Committee shall also be entitled to pay such sum into court in accordance with the appropriate rules of law. Any expenses incurred by the Corporation or the Administrative Committee incident to such proceeding or litigation shall be charged against the account of the affected Participant.

     8.10. Incompetence. If the Administrative Committee determines that any person to whom a benefit is payable under the Plan is incompetent by reason of a physical or mental disability, the Administrative Committee shall have the power to cause the payments becoming due to such person to be made to another person for his or her benefit without the responsibility of the Administrative Committee or the Corporation to see to the application of such payments.

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Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Administrative Committee and the Corporation.

     IN WITNESS WHEREOF, the undersigned, being the Chief Executive Officer of Alion, certifies that the foregoing Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan was duly adopted by the Board of Directors of Alion.

/s/ Bahman Atefi  

Chief Executive Officer 

Date Approved by the Board: November 8, 2005

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EX-10.62

Exhibit 10.62

ALION EXECUTIVE DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005

ARTICLE I
PURPOSE

     The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development and future business success of Alion Science and Technology Corporation, a Delaware corporation. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE II
DEFINITIONS

     For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

     2.1. “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Employer equal to the Deferral Account balance. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

     2.2. “Affiliate” shall mean (a) a corporation that is a member of a controlled group of corporations (as determined pursuant to Section 414(b) of the Code) which includes the Company and (b) a trade or business (whether or not incorporated) which is under common control (as determined pursuant to Section 414(c) of the Code) of the Company, (c) any organization (whether or not incorporated) that is a member of an affiliated service group (as determined pursuant to Section 414(m) of the Code) that includes an Employer, a corporation described in clause (a) of this section or a trade or business described in clause (b) of this section, or (d) any other entity that is required to be aggregated with the Employer pursuant to regulations promulgated under Section 414(o) of the Code.

     2.3. “Annual Base Salary” shall mean the annual cash compensation relating to services performed during any Plan Year, whether or not paid in such Plan Year or included on the Federal Income Tax Form W-2 for such Plan Year, excluding bonuses, SAR Payments, Phantom Stock Payments, income related to the exercise of stock options, overtime, fringe benefits, relocation expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Annual Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3),

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402(h), or 403(b) pursuant to plans established by the Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee.

     2.4. “Annual Bonus” shall mean any compensation relating to services performed during any Plan Year, whether or not paid in such Plan Year or included on the Federal Income Tax Form W-2, payable to a Participant as an Employee under the Employer’s bonus plans that are based on performance goals, where the amount of, or entitlement to, the compensation is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered preestablished if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established.

     2.5. “Annual Deferral Amount” shall mean that portion of a Participant’s Annual Base Salary, Annual Bonus, SAR Payment and Phantom Stock Payment that a Participant elects to have, and is deferred, in accordance with Article IV, for any one Plan Year. In the event of a Participant’s Disability (if deferrals cease in accordance with Section 8.1), death or a Termination of Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

     2.6. “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article IX, that are entitled to receive benefits under this Plan upon the death of a Participant.

     2.7. “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

     2.8. “Board” shall mean the Board of Directors of the Company.

     2.9. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any Person or Group is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of the Company. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

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     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company;

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

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

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

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Company as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.10. “Claimant” shall have the meaning set forth in Section 14.1.

     2.11. “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

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     2.12. “Committee” shall mean the committee described in Article XII.

     2.13. “Company” shall mean Alion Science and Technology Corporation, a Delaware corporation and any successor to such corporation that adopts the Plan.

     2.14. “Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If the Company determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Company would not be deductible by the Company solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Company to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Company may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 4.5 below. The amounts so deferred and amounts credited/debited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Company in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Company during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.

     2.15. “Deferral Account” shall mean (a) the sum of all of a Participant’s Subaccounts, plus (b) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account. The Deferral Account, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

     2.16. “Disability” means that the Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; (b) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company; or (c) has been determined to be totally disabled by the Social Security Administration..

     2.17. “Disability Benefit” shall mean the benefit set forth in Article VIII.

     2.18. “Elected Distribution Date” shall mean the beginning date for distribution with respect to amounts credited to the Participant’s Subaccount pursuant to Section 5.1.

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     2.19. “Election Form” shall mean the form established by the Committee that a Participant completes, signs and returns to the Committee to make his or her deferral election under the Plan.

     2.20. “Employee” shall mean an individual whose relationship with an Employer is, under common law, that of an employee.

     2.21. “Employer” shall mean the Company and any Affiliate that, with the consent of the Company, elects to participate in the Plan and any successor entity that adopts the Plan pursuant to Section 16.11. If any such entity withdraws, is excluded from participation in the Plan or terminates its participation in the Plan, such entity shall thereupon cease to be an Employer.

     2.22. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

     2.23. “Hardship” shall mean an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or the spouse or a dependent of the Participant (as defined in Code Section 152(a)), (b) a loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (c) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee. In addition, the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication, or the need to pay for the funeral expenses of a spouse or a dependent may also constitute a Hardship event. The Committee shall determine whether the circumstances presented by the Participant constitute an unanticipated emergency. Such circumstances and the Committee’s determination will depend on the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the extent liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of his elective deferrals under this Plan or a similar deferred compensation plan for the remainder of the Plan Year.

     2.24. “Participant” shall mean (a) any Employee who is selected by the Committee to participate in the Plan, (b) who elects to participate in the Plan, (c) who signs an Election Form, (d) whose signed Election Form is accepted by the Committee, (e) who commences participation in the Plan, and (f) whose participation has not terminated.

     2.25. “Phantom Stock Award” shall mean an award granted to an Employee pursuant to the terms of the Alion Science and Technology Corporation Phantom Stock Plan or the Alion Science and Technology Corporation Performance Shares and Retention Phantom Stock Plan (collectively, the “Phantom Stock Plans”).

     2.26. “Phantom Stock Payment” shall mean an amount paid to an Employee upon vesting of a Phantom Stock Award.

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     2.27. “Plan” shall mean the Alion Science and Technology Corporation Executive Deferred Compensation Plan, which shall be evidenced by this instrument, as may be amended from time to time.

     2.28. “Plan Year” shall mean the twelve-month period commencing each January 1 and ending on December 31.

     2.29. “SAR” shall mean an award granted to an Employee pursuant to the terms of the Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan.

     2.30. “SAR Payment” shall mean an amount paid to an Employee upon his exercise or payment of an SAR.

     2.31. “Subaccount” shall mean the separate subaccounts under the Deferral Account that are established and maintained for each Participant. Such subaccounts shall reflect (a) the amount deferred pursuant to the Participant’s Election Form for each deferral election; (b) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Subaccount, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Subaccount. In the event that two or more Subaccounts reflect amounts deferred that are to be paid at the same time, all such Subaccounts shall be aggregated into a single Subaccount.

     2.32. “Termination of Employment” shall mean the severing of employment with all Employers, voluntarily or involuntarily, for any reason other than Disability. A Participant will not be deemed to have incurred a Termination of Employment while he or she is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with an Employer is provided either by statute or by contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or by contract, the Termination of Employment will be deemed to occur on the first date immediately following such six-month period. For the avoidance of doubt, and by way of example only, if a Participant works for a wholly-owned subsidiary of the Company, then a sale of the subsidiary by the Company would be regarded as a Termination of Employment of such Participant for purposes of this Plan, notwithstanding the Participant’s continued employment with that former subsidiary. Whether an Employee incurs a termination of employment with the Company will be determined in accordance with the requirements of Code Section 409A.

     2.33. “Termination Benefit” shall mean an amount equal to the Participant’s Account Balance if a Participant experiences a Termination of Employment.

     2.34. “Trust” shall mean one or more trusts established with respect to the Plan between the Company and the trustee named therein, as amended from time to time.

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ARTICLE III
SELECTION, ENROLLMENT AND ELIGIBILITY

     3.1. Selection by Committee. Participation in the Plan shall be limited to Employees providing services to the Employer at the level of Vice President (Corporate or Operation Management) or above and any other individuals as determined by the Committee, in its sole discretion, from a select group of management and highly compensated Employees of the Employer. From that group, the Committee shall select, in its sole discretion, Employees to participate in the Plan.

     3.2. Enrollment Requirements. As a condition to participation, each selected Employee shall complete, execute and return to the Committee an Election Form. The Committee shall establish from time to time such enrollment requirements as it determines in its sole discretion are necessary.

     3.3. Eligibility; Commencement of Participation. Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period, that Employee shall commence participation in the Plan on the first day of the month following the month in which the Employee completes all enrollment requirements.

     3.4. Termination of Participation and/or Deferrals. If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (a) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes to the extent permitted under Code Section 409A and (b) prevent the Participant from making future deferral elections.

ARTICLE IV
DEFERRAL ELECTIONS/CREDITING/TAXES

     4.1. Deferrals. For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Annual Base Salary, Annual Bonus, SAR Payments and/or Phantom Stock Payments in the following percentages.

Deferral	Minimum Amount
Annual Base Salary	0% to 50%, in 1% increments
Annual Bonus	0% to 100%, in 1% increments
SAR Payments	0% or 100%
Phantom Stock Payments	0% or 100%

     If no election is made, the amount deferred shall be zero.

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     4.2. Election to Defer; Effect of Election Form.

     (a) Annual Election Forms. A Participant’s Election Form shall be effective only for the Plan Year that will be listed on the Election Form. The Committee shall maintain an open enrollment period preceding each Plan Year in order to allow Participants to submit Election Forms.

     (b) Timing of Election to Defer Annual Base Salary and Annual Bonus. To be effective for any Plan Year, an Election Form to defer a percentage of Annual Base Salary must be received by the Committee prior to January 1 of the Plan Year to which these payments relate. To be effective for any Plan Year, an Election Form to defer a percentage of Annual Bonus must be received by the Committee prior to April 30 of the Plan Year to which these payments relate. However, if an individual first becomes eligible to participate in the Plan on or after the Effective Date and on a date other than January 1, the individual may submit an Election Form to defer a percentage of Annual Base Salary for the remainder of the Plan Year in which he or she becomes a Participant if the Election Form is submitted within thirty (30) days after becoming eligible to participate in the Plan; provided, however, that the Election Form shall apply only to compensation not yet earned; and provided further that the individual is not then a participant in any other non-qualified defined contribution deferred compensation plan maintained by an Employer. If an Employee first becomes eligible to participate in the Plan on a date after September 30 of any calendar year, then the Employee shall not be entitled to elect to defer any portion of his or her Annual Base Salary for this short Plan Year.

     (c) Timing of Election to Defer SAR Payment and Phantom Stock Payment. A Participant may elect to defer receipt of all of any SAR or Phantom Stock Award, as provided in the Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan or the applicable Phantom Stock Plan. A Participant’s election must be made at least 12 months prior to the date that the applicable SAR or Phantom Stock Award would otherwise be paid under the terms of such Plan. Such deferrals shall be considered “Redeferrals” under Section 409A of the Code, and, as such, shall be made for a minimum of five years.

     4.3. Withholding of Annual Deferral Amounts. For each Plan Year, the Annual Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Annual Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Annual Base Salary. The Annual Bonus, SAR Payment and Phantom Stock Payment portions of the Annual Deferral Amount shall be withheld at the time the Annual Bonus, SAR Payments and/or Phantom Stock Payments are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

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     4.4. Investment of Trust Assets. The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement.

     4.5. Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

     (a) Election of Measurement Funds for Deferral Account. A Participant, in connection with his or her initial deferral election in accordance with Section 4.2 above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 4.5(c) below) to be used to determine the additional amounts to be credited to his or her Deferral Account when the Participant commences participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan, unless changed in accordance with the next sentence. Commencing with the business day that follows the Participant’s commencement of participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan, the Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to reallocate among the available Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Deferral Account, or to change the portion of his or her Deferral Account allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply as soon as administratively possible and shall continue thereafter for each subsequent business day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence.

     (b) Proportionate Allocation. In making any deferral election under the Plan, the Participant shall specify on the Election Form, in increments of one percentage point (1%), the percentage of his or her Deferral Account to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Deferral Account).

     (c) Measurement Funds. The Participant may elect one or more measurement funds (the “Measurement Funds”) for the purpose of crediting additional amounts to his or her Deferral Account. The Committee shall, in its sole discretion, select, discontinue, substitute or add a Measurement Fund at any time.

     (d) Crediting or Debiting Method. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on the performance of the Measurement Funds themselves.

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Each Participant’s Account balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant for the Deferral Account, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the selected or required Measurement Fund(s) in the percentages applicable to such business day, as of the close of business on the business day, at the closing price on such date; (ii) the portion of the Annual Deferral Amount that was actually deferred as of the business day were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, as soon as administratively possible after the day on which such amounts are actually deferred from the Participant’s Annual Salary through reductions in his or her payroll; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the percentages applicable to such business day, as soon as administratively possible.

     (e) No Actual Investment. Notwithstanding any other provision of this Plan to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Employer or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Employer or the Trust; the Participant shall at all times remain an unsecured creditor of the Employer.

     4.6. FICA and Other Taxes. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Annual Base Salary, Annual Bonus, SAR Payment and Phantom Stock Payment that is not being deferred, in a manner determined by the Employer, the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the Committee may reduce the Deferral Account in order to comply with this Section 4.6.

     4.7. Distributions. The Employer, or the trustee of the Trust, shall withhold from any distributions made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer, or the trustee of the Trust, in connection with such distributions, in amounts and in a manner to be determined in the sole discretion of the Employer and the trustee of the Trust.

ARTICLE V
DISTRIBUTIONS

     5.1. Elected Distribution Date. Each Participant shall make an irrevocable election as to the Elected Distribution Date with respect to each amount deferred. This election shall be made

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on the Election Form(s) for each Plan Year and shall apply solely to the applicable Subaccount for the deferral election specified on the Election Form(s). The Election Form shall allow each Participant to elect from among the following Elected Distribution Dates: (a) the date immediately following the date that falls upon the fifth, sixth, seventh, eighth, ninth or tenth anniversary of the final day of the Plan Year; or (b) the date of the Participant’s Termination of Employment.

     5.2. Method of Distribution. Each Participant shall make an irrevocable election as to the method of distribution with respect to each amount deferred. This election shall be made on the Election Form(s) for each Plan Year and shall apply solely to the applicable Subaccount for the deferral election specified on the Election Form(s). Each Election Form shall allow each Participant to elect from among the following methods of distribution: (a) a lump sum payment of the Participant’s entire Subaccount balance, to be paid, subject to the Deduction Limitation, within thirty (30) days of the Elected Distribution Date or Participant’s Termination of Employment; or (b) a series of ten (10) substantially equal installment payments. Such installment payments, which shall be subject to the Deduction Limitation, shall be paid in accordance with Section 4.3.

     5.3. Installment Payments. The first annual installment shall be paid within thirty (30) days of the Elected Distribution Date or the date of the Participant’s Termination of Employment, whichever occurs first. Subsequent annual installments shall be paid within 30 days of the end of each 12-month anniversary of the Elected Distribution Date or the date of the Participant’s Termination of Employment, whichever is applicable. The amount of the first payment shall be a fraction of the total applicable Subaccount, the numerator of which is 1 and the denominator of which is 10. The amount of each subsequent payment shall be a fraction of the total balance of the applicable Subaccount, the numerator of which is 1 and the denominator of which is the total number of installments remaining.

     5.4. Acceleration of Payment Date. Notwithstanding the foregoing, the distribution of benefits hereunder may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Committee, upon advice of counsel, that the Plan fails to meet the requirements of Code Section 409A

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and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     5.5. Delay of Payments. A payment otherwise required to be made under the terms of the Plan may be delayed solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Administrative or Financial Cause: The Committee reasonably determines that it is administratively impracticable to make payment by the time set forth above or that making such payment will jeopardize the solvency of the Employer;

     (b) Delay in Calculation: Calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Company; or

     (c) Payments Subject to the Deduction Limitation: The Company reasonably anticipates that such payment would otherwise violate the Deduction Limitation. In such event, payment shall be made within the same calendar year as the originally scheduled payment date or, if later, the 15th day of the third calendar month following the date specified.

ARTICLE VI
HARDSHIP

     6.1. Withdrawal Payout/Suspensions for Hardship. If the Participant experiences a Hardship, and distributions have not yet commenced under Article V, the Participant may petition the Committee to (a) cancel any deferrals of Director’s Fees required to be made by a Participant and/or (b) receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Hardship, which amount may include amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. The determinations of the amount reasonably necessary to satisfy the Hardship will take into account any additional compensation that becomes available to the Participant as a result of cancellation of a deferral election. If, subject to the sole discretion of the Committee, the petition for a suspension and/or payout is approved, suspension shall take effect upon the date of approval and any payout shall be made within sixty (60) days of the date of approval. The payment of any amount under this Section 6.1 shall not be subject to the Deduction Limitation. Any suspension of deferrals pursuant to this Section 6.1 shall continue for the remainder of the Plan Year in which the suspension is approved.

ARTICLE VII
TERMINATION OF EMPLOYMENT PRIOR TO ELECTED DISTRIBUTION DATE

     7.1. Termination Benefit. Subject to the Deduction Limitation, if a Participant’s Termination of Employment occurs prior to the applicable Elected Distribution Date(s), other than due to the Participant’s death or Disability, the Participant shall receive a Termination Benefit, payable pursuant to the terms of Article V.

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     7.2. Death Prior to Completion of Termination Benefit. If a Participant dies after Termination of Employment but before the Termination Benefit is paid, the Participant’s unpaid Termination Benefit shall be paid as soon as administratively practicable to the Participant’s Beneficiary in the same amount as that benefit would have been paid to the Participant had the Participant survived.

     7.3. Death Prior to Termination of Employment. If a Participant dies before Termination of Employment, the Termination Benefit shall be paid as soon as administratively practicable to the Participant’s Beneficiary in the same amount as that benefit would have been paid to the Participant had the Participant survived.

ARTICLE VIII
DISABILITY WAIVER AND BENEFIT

     8.1. Continued Eligibility; Disability Benefit. A Participant suffering a Disability may elect, at such time and in such form as the Committee shall deem acceptable in accordance with Code Section 409A, to (a) have his or her Termination Benefit under the Plan paid in accordance with the provisions of Article V, without regard to the Participant’s Termination of Employment due to Termination, or (b) to be paid his or her Termination Benefit under the Plan in accordance with the provisions of Article VII due to his Termination of Employment due to Disability.

ARTICLE IX
BENEFICIARY DESIGNATION

     9.1. Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.

     9.2. Beneficiary Designation and Change of Beneficiary. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

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     9.3. Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.

     9.4. No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her estate.

     9.5. Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.

     9.6. Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Employer and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s participation in the Plan shall terminate upon such full payment of benefits.

ARTICLE X
LEAVE OF ABSENCE

     10.1. Paid Leave of Absence. If a Participant is authorized by the Employer for any reason to take a paid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 4.2, provided that the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with an Employer is provided either by statute or by contract.

     10.2. Unpaid Leave of Absence. If a Participant is authorized by the Employer for any reason to take an unpaid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer, provided that the period of such leave does not exceed six months or such longer period as the Participant’s right to reemployment with an Employer is provided either by statute or by contract. During such leave, the Participant shall be excused from making deferrals until the earlier of the date the leave of absence expires or the Participant returns to a paid employment status. Upon such expiration or return, deferrals shall resume for the remaining portion of the Plan Year in which the expiration or return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld.

ARTICLE XI
TERMINATION, AMENDMENT OR MODIFICATION

     11.1. Termination. Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to

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discontinue its sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of its participating Employees, by action of its Board of Directors. Upon the termination of the Plan, the affected Participants shall terminate their participation in the Plan and their Account Balances, determined as if they had experienced a Termination of Employment on the date of Plan termination, shall be paid to the Participants as follows: Prior to a Change in Control, if the Plan is terminated with respect to all of its Participants, the Company shall pay such benefits as soon as administratively practicable. After a Change in Control, the Account Balances of all participants shall be fully vested and the Company shall be required to pay such benefits in a lump sum within five (5) business days of such Change in Control. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of any payment except as permitted by the Committee consistent with the requirements of Code Section 409A.

     11.2. Amendment. The Company may, at any time, amend or modify the Plan in whole or in part with respect to that Employer by the action of its Board of Directors; provided, however, that: (a) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s vested Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification, and (b) no amendment or modification of this Section 11.2 or Section 12.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification. Notwithstanding the foregoing, the Board of Directors may unilaterally amend the Plan as necessary to cause the Plan to comply with Code Section 409A.

     11.3. Effect of Payment. The full payment of the applicable benefit under Articles V, VI or VII of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant’s participation in the Plan shall terminate.

ARTICLE XII
ADMINISTRATION

     12.1. Committee Duties. Except as otherwise provided in this Article XII, this Plan shall be administered by a Committee that shall consist of members appointed by the Board of Directors. Members of the Committee may be Participants in this Plan. The Committee shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (b) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Employer.

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     12.2. Administration Upon Change In Control. For purposes of this Plan, the Committee shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the trustee of the Trust and approved by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”). The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (a) pay all reasonable administrative expenses and fees of the Administrator; (b) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (c) supply full and timely information to the Administrator on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Disability, death or Termination of Employment of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the trustee of the Trust only with the approval of the Ex-CEO. Upon and after a Change in Control, the Administrator may not be terminated by the Company.

     12.3. Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

     12.4. Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

     12.5. Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee, and any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator.

     12.6. Employer Information. To enable the Committee and/or Administrator to perform its functions, the Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.

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ARTICLE XIII
OTHER BENEFITS AND AGREEMENTS

     13.1. Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

ARTICLE XIV
CLAIMS PROCEDURES

     14.1. Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

     14.2. Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

     (a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

     (b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

     (c) the specific reason(s) for the denial of the claim, or any part of it;

     (d) specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

     (e) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

     (f) an explanation of the claim review procedure set forth in Section 14.3 below.

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     14.3. Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

     (a) may review pertinent documents;

     (b) may submit written comments or other documents; and/or

     (c) may request a hearing, which the Committee, in its sole discretion, may grant.

     14.4. Decision on Review. The Committee shall render its decision on review promptly, and not later than sixty (60) days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

     (a) specific reasons for the decision;

     (b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

     (c) such other matters as the Committee deems relevant.

     14.5. Legal Action. A Claimant’s compliance with the foregoing provisions of this Article XIV is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

ARTICLE XV
TRUST

     15.1. Establishment of the Trust. The Company shall establish the Trust, and shall at least annually transfer over to the Trust such assets as the Company determines, in its sole discretion, are necessary to provide, on a present value basis, for its respective future liabilities created with respect to the Annual Deferral Amounts for Participants for all periods prior to the transfer, as well as any debits and credits to the Participants’ Account Balances for all periods prior to the transfer, taking into consideration the value of the assets in the trust at the time of the transfer.

     15.2. Interrelationship of the Plan and the Trust. The provisions of the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Company to the assets transferred to the Trust. The Company shall at all times remain liable to carry out its obligations under the Plan.

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     15.3. Distributions From the Trust. The Company’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under this Plan.

ARTICLE XVI
MISCELLANEOUS

     16.1. Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

     16.2. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under this Plan, any and all of the Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. The Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

     16.3. Employer’s Liability. The Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.

     16.4. Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

     16.5. Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Employer and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Employer, either as an Employee or a director, or to interfere with the right of the Employer to discipline or discharge the Participant at any time.

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     16.6. Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

     16.7. Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

     16.8. Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

     16.9. Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the Commonwealth of Virginia.

     16.10. Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Alion Science and Technology Corporation
Attention: Stacy Mendler
1750 Tysons Boulevard, Suite 1300
McLean, VA 22102

     Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

     Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

     16.11. Successors. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

     16.12. Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

     16.13. Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such

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benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

     16.14. Court Order. The Committee is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

     16.15. Distribution in the Event of Taxation. If, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee before a Change in Control, or the trustee of the Trust after a Change in Control, for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld to the extent consistent with Section 409A (and, after a Change in Control, shall be granted to the extent consistent with Section 409A), the Company shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed a Participant’s unpaid Account Balance under the Plan). If the petition is granted, the tax liability distribution shall be made within 90 days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Plan.

     16.16. Trust. If the Trust terminates and benefits are distributed from the Trust to a Participant, the Participant’s benefits under this Plan shall be reduced to the extent of such distributions.

     16.17. Legal Fees To Enforce Rights After Change in Control. The Company is aware that upon the occurrence of a Change in Control, the Board (which might then be composed of new members) or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company irrevocably authorizes such Participant to retain counsel of his or her choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

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     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of January 1, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Company on that date.

Alion Science and Technology Corporation
By:	/s/ Bahman Atefi
	Chief Executive Officer

Attest:	/s/ Jim Fontana
Secretary

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EX-10.63

Exhibit 10.63

ALION DIRECTOR DEFERRED COMPENSATION PLAN

AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005

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ALION DIRECTOR DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005

ARTICLE I
PURPOSE

     The purpose of this Plan is to permit non-employee Members of the Board of Alion Science and Technology Corporation, a Delaware corporation, to defer receipt of Director’s Fees (as defined herein). This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE II
DEFINITIONS

     For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

     2.1. “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Employer equal to the Deferral Account balance. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

     2.2. “Affiliate” shall mean (a) a corporation that is a member of a controlled group of corporations (as determined pursuant to Section 414(b) of the Code) which includes the Company and (b) a trade or business (whether or not incorporated) which is under common control (as determined pursuant to Section 414(c) of the Code) of the Company, (c) any organization (whether or not incorporated) that is a member of an affiliated service group (as determined pursuant to Section 414(m) of the Code) that includes an Employer, a corporation described in clause (a) of this section or a trade or business described in clause (b) of this section, or (d) any other entity that is required to be aggregated with the Employer pursuant to regulations promulgated under Section 414(o) of the Code.

     2.3. “Annual Deferral Amount” shall mean that portion of a Participant’s Annual Director’s Fees and SAR or Phantom Stock Payment that a Participant elects to have, and is deferred, in accordance with Article IV, for any one Plan Year.

     2.4. “Annual Director’s Fees” means any compensation, whether for Board meetings or as retainer fees or otherwise, earned by a Member for services rendered as a Member during a particular Plan Year in which he or she has elected to be a Participant.

     2.5. “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article VIII, that are entitled to receive benefits under this Plan upon the death of a Participant.

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     2.6. “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

     2.7. “Board” shall mean the Board of Directors of the Company.

     2.8. “Change in Control” shall mean and shall be deemed to have occurred as of the date of the first to occur of the following events:

     (a) any Person or Group acquires stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any Person or Group is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Group is not considered to cause a Change in Control of the Company. An increase in the percentage of stock owned by any Person or Group as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction;

     (b) any Person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Group) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company;

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

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

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

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

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

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

     For these purposes, the term “Person” shall mean an individual, corporation, association, joint-stock company, business trust or other similar organization, partnership, limited liability company, joint venture, trust, unincorporated organization or government or agency, instrumentality or political subdivision thereof. The term “Group” shall have the meaning set forth in Rule13d-5 of the Securities Exchange Commission (“SEC”), modified to the extent necessary to comply with Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B), or any successor thereto in effect at the time a determination of whether a Change in Control has occurred is being made. If any one Person, or Persons acting as a Group, is considered to effectively control the Company as described in subsections (b) or (c) above, the acquisition of additional control by the same Person or Persons is not considered to cause a Change in Control.

     2.9. “Claimant” shall have the meaning set forth in Section 12.1.

     2.10. “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

     2.11. “Committee” shall mean the committee described in Article X.

     2.12. “Company” shall mean Alion Science and Technology Corporation, a Delaware corporation and any successor to such corporation that adopts the Plan.

     2.13. “Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If the Company determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Company would not be deductible by the Company solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Company to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Company may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 4.4 below. The amounts so deferred and amounts credited/debited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Company in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Company during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.

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     2.14. “Deferral Account” shall mean (a) the sum of all of a Participant’s Subaccounts, plus (b) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account. The Deferral Account, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

     2.15. “Elected Distribution Date” shall mean the beginning date for distribution with respect to amounts credited to the Participant’s Subaccount pursuant to Section 5.1.

     2.16. “Election Form” shall mean the form established by the Committee that a Participant completes, signs and returns to the Committee to make his or her deferral election under the Plan.

     2.17. “Employer” shall mean the Company and any Affiliate that, with the consent of the Company, elects to participate in the Plan and any successor entity that adopts the Plan. If any such entity withdraws, is excluded from participation in the Plan or terminates its participation in the Plan, such entity shall thereupon cease to be an Employer.

     2.18. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

     2.19. “Hardship” shall mean an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or the spouse or a dependent of the Participant (as defined in Code Section 152(a)), (b) a loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (c) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee. In addition, the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication, or the need to pay for the funeral expenses of a spouse or a dependent may also constitute a Hardship event. The Committee shall determine whether the circumstances presented by the Participant constitute an unanticipated emergency. Such circumstances and the Committee’s determination will depend on the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the extent liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of his elective deferrals under this Plan or a similar deferred compensation plan for the remainder of the Plan Year.

     2.20. “Member” means, for any Plan Year, any individual who is determined by the Committee to be a member of the Employer’s Board.

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     2.21. “Participant” shall mean (a) any Member who is selected by the Committee to participate in the Plan, (b) who elects to participate in the Plan, (c) who signs an Election Form, (d) whose signed Election Form is accepted by the Committee, (e) who commences participation in the Plan, and (f) whose participation has not terminated.

     2.22. “Phantom Stock Payment” means an amount paid to a Member upon the surrender of a Phantom Stock Award under the Alion Science and Technology Board of Directors Phantom Stock Plan.

     2.23. “Plan” shall mean the Alion Science and Technology Corporation Director Deferred Compensation Plan, which shall be evidenced by this instrument, as may be amended from time to time.

     2.24. “Plan Year” shall mean the twelve-month period commencing each October 1 and ending on September 30; provided, however, that for periods after December 31, 2005, the Plan Year shall mean the calendar year.

     2.25. “SAR” shall mean an award granted to a Member pursuant to the terms of the Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan.

     2.26. “SAR Payment” shall mean an amount paid to a Member upon his exercise or payment of an SAR.

     2.27. “Subaccount” shall mean the separate subaccounts under the Deferral Account that are established and maintained for each Participant. Such subaccounts shall reflect (a) the amount deferred pursuant to the Participant’s Election Form for each deferral election; (b) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Subaccount, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Subaccount. In the event that two or more Subaccounts reflect amounts deferred that are to be paid at the same time, all such Subaccounts shall be aggregated into a single Subaccount.

     2.28. “Termination of Directorship” shall mean the severing of directorship with all Employers, voluntarily or involuntarily, for any reason. If at the time of a Participant’s Termination of Directorship, the Participant is an employee of an Employer, to the extent required by Code Section 409A and regulations thereunder, the Participant shall be deemed not to have incurred a Termination of Directorship prior to the date that he or she terminates employment with all Employers.

     2.29. “Termination Benefit” shall mean an amount equal to the Participant’s Account Balance if a Participant experiences a Termination of Directorship.

     2.30. “Trust” shall mean one or more trusts established, effective as of January 1, 2003 between the Company and the trustee named therein, as amended from time to time.

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ARTICLE III
SELECTION, ENROLLMENT AND ELIGIBILITY

     3.1. Enrollment Requirements. As a condition to participation, each selected Member shall complete, execute and return to the Committee an Election Form. The Committee shall establish from time to time such enrollment requirements as it determines in its sole discretion are necessary.

     3.2. Eligibility; Commencement of Participation. Provided a Member selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period, that Member shall commence participation in the Plan on the first day of the month following the month in which the Member completes all enrollment requirements.

     3.3. Termination of Participation and/or Deferrals. If the Committee determines in good faith that a Participant no longer qualifies as a Member, the Committee shall have the right, in its sole discretion, to (a) terminate any deferral election the Participant has made for the remainder of the Plan Year in which the Participant’s membership status changes, to the extent permitted under Code Section 409A, and (b) prevent the Participant from making future deferral elections.

ARTICLE IV
DEFERRAL ELECTIONS/CREDITING/TAXES

     4.1. Deferrals.

     (a) Annual Director’s Fees and SAR Payments. For each Plan Year, a Participant may elect to defer, as his or her Annual Director’s Fees and/or SAR or Phantom Stock Payments in the following percentages.

Deferral	Minimum Amount
Annual Director’s Fees	0% to 100%, in 1% increments
SAR or Phantom Stock Payments	0% or 100%

     (b) If no election is made, the amount deferred shall be zero.

     4.2. Election to Defer; Effect of Election Form.

     (a) Annual Election Forms. A Participant’s Election Form shall be effective only for the Plan Year that will be listed on the Election Form. The Committee shall maintain an open enrollment period preceding each Plan Year in order to allow Participants to submit Election Forms.

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     (b) Timing of Election to Defer Annual Director’s Fees. To be effective for any Plan Year, an Election Form to defer a percentage of Annual Director’s Fees must be received by the Committee prior to the first day of the Plan Year to which these payments relate; provided, however, that no deferral shall be permitted for the Plan Year commencing October 1, 2005 and ending December 31, 2005. However, if an individual first becomes eligible to participate in the Plan as a result of his or her election to the Board of Directors on a date after the first day of a Plan Year, the individual may submit an Election Form to defer a percentage of Annual Director’s Fees for the remainder of the Plan Year in which he or she first becomes a Participant if the Election Form is submitted within thirty (30) days after becoming eligible to participate in the Plan; provided, however, that the Election Form shall apply only to compensation not yet earned.

     (c) SAR and Phantom Stock Awards. A Participant may elect to defer receipt of all of any SAR or Phantom Stock Award, as provided in the Alion Science and Technology Corporation 2004 Stock Appreciation Rights Plan or the Alion Science and Technology Corporation Board of Directors Phantom Stock Plan, as applicable. A Participant’s election must be made at least twelve months prior to the date that the applicable SAR or Phantom Stock Award would otherwise be paid under the terms of the respective plan. Such deferrals shall be considered “Redeferrals” under Section 409A of the Code, and, as such, shall be made for a minimum of five years.

     4.3. Withholding of Annual Deferral Amounts. For each Plan Year, the Annual Director’s Fees and SAR or Phantom Stock Payment portions of the Annual Deferral Amount shall be withheld at the time the Annual Director’s Fees and/or SAR or Phantom Stock Payments are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

     4.4. Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

     (a) Election of Measurement Funds for Deferral Account. A Participant, in connection with his or her initial deferral election in accordance with Section 4.2 above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 4.4(c) below) to be used to determine the additional amounts to be credited to his or her Deferral Account when the Participant commences participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan, unless changed in accordance with the next sentence. Commencing with the business day that follows the Participant’s commencement of participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan, the Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to reallocate among the

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available Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Deferral Account, or to change the portion of his or her Deferral Account allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply as soon as administratively possible and shall continue thereafter for each subsequent business day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence.

     (b) Proportionate Allocation. In making any deferral election under the Plan, the Participant shall specify on the Election Form, in increments of one percentage point (1%), the percentage of his or her Deferral Account to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Deferral Account).

     (c) Measurement Funds. The Participant may elect one or more measurement funds (the “Measurement Funds”) for the purpose of crediting additional amounts to his or her Deferral Account. The Committee shall, in its sole discretion, select, discontinue, substitute or add a Measurement Fund at any time.

     (d) Crediting or Debiting Method. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on the performance of the Measurement Funds themselves. Each Participant’s Account balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant for the Deferral Account, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the selected or required Measurement Fund(s) in the percentages applicable to such business day, as of the close of business on the business day, at the closing price on such date; (ii) the portion of the Annual Deferral Amount that was actually deferred as of the business day were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, as soon as administratively possible after the day on which such amounts are actually deferred from the Participant’s Director’s Fees; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the percentages applicable to such business day, as soon as administratively possible.

     (e) No Actual Investment. Notwithstanding any other provision of this Plan to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Employer or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Employer or the Trust; the Participant shall at all times remain an unsecured creditor of the Employer.

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ARTICLE V
DISTRIBUTIONS

     5.1. Elected Distribution Date. Each Participant shall make an irrevocable election as to the Elected Distribution Date with respect to each amount deferred. This election shall be made on the Election Form(s) for each Plan Year and shall apply solely to the applicable Subaccount for the deferral election specified on the Election Form(s). The Election Form shall allow each Participant to elect from among the following Elected Distribution Dates: (a) the date immediately following the date that falls upon the fifth, sixth, seventh, eighth, ninth or tenth anniversary of the final day of the Plan Year; or (b) the date of the Participant’s Termination of Directorship.

     5.2. Method of Distribution. Each Participant shall make an irrevocable election as to the method of distribution with respect to each amount deferred. This election shall be made on the Election Form(s) for each Plan Year and shall apply solely to the applicable Subaccount for the deferral election specified on the Election Form(s). Each Election Form shall allow each Participant to elect from among the following methods of distribution: (a) a lump sum payment of the Participant’s entire Subaccount balance, to be paid, subject to the Deduction Limitation, within thirty (30) days of the Elected Distribution Date or Participant’s Termination of Directorship; or (b) a series of ten (10) substantially equal annual installment payments. Such installment payments, which shall be subject to the Deduction Limitation, shall be paid in accordance with Section 5.3.

     5.3. Installment Payments. The first annual installment shall be paid within thirty (30) days of the Elected Distribution Date or the date of the Participant’s Termination of Directorship, whichever occurs first. Subsequent annual installments shall be paid within thirty (30) days of the end of each 12-month anniversary of the Elected Distribution Date or the date of the Participant’s Termination of Directorship, whichever is applicable. The amount of the first payment shall be a fraction of the total applicable Subaccount, the numerator of which is 1 and the denominator of which is 10. The amount of each subsequent payment shall be a fraction of the total balance of the applicable Subaccount, the numerator of which is 1 and the denominator of which is the total number of installments remaining.

     5.4. Withholding. The Employer shall withhold payroll and other taxes required by Federal, state and/or local tax authorities from all distributions.

     5.5. Acceleration of Payment Date. Notwithstanding the foregoing, the distribution of benefits hereunder may be accelerated, with the consent of the Administrative Committee, under the following circumstances:

     (a) Compliance with Domestic Relations Order: To permit payment to an individual other than the Participant as necessary to comply with the provisions of a domestic relations order (as defined in Code Section 414(p)(1)(B));

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     (b) Conflicts of Interest: To permit payment as necessary to comply with the provisions of a certificate of divestiture (as defined in Code Section 1043(b)(2));

     (c) Payment of Employment Taxes: To permit payment of federal employment taxes under Code Sections 3101, 3121(a) or 3121(v)(2), or to comply with any federal tax withholding provisions or corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of federal employment taxes, and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes; or

     (d) Tax Event: Upon a good faith, reasonable determination by the Committee, upon advice of counsel, that the Plan fails to meet the requirements of Code Section 409A and regulations thereunder. Such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A.

     5.6. Delay of Payments. A payment otherwise required to be made under the terms of the Plan may be delayed solely to the extent necessary under the following circumstances, provided that payment is made as soon as possible after the reason for delay no longer applies:

     (a) Administrative or Financial Cause. The Committee reasonably determines that it is administratively impracticable to make payment by the time set forth above or that making such payment will jeopardize the solvency of the Employer;

     (b) Delay in Calculation. Calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Company; or

     (c) Payments Subject to the Deduction Limitation. The Company reasonably anticipates that such payment would otherwise violate the Deduction Limitation. In such event, payment shall be made within the same calendar year as the originally scheduled payment date or, if later, the 15th day of the third calendar month following the date specified.

ARTICLE VI
HARDSHIP

     6.1. Withdrawal Payout/Suspensions for Hardship. If the Participant experiences a Hardship, and distributions have not yet commenced under Article V, the Participant may petition the Committee to (a) cancel any deferrals of Director’s Fees required to be made by a Participant and/or (b) receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Hardship, which amount may include amounts necessary to pay any Federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution. The determinations of the amount reasonably necessary to satisfy the Hardship will take into account any additional compensation that becomes available ot the Participant as a result of cancellation of a deferral election. If, subject to the sole discretion

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of the Committee, the petition for a suspension and/or payout is approved, suspension shall take effect upon the date of approval and any payout shall be made within 60 days of the date of approval. The payment of any amount under this Section 6.1 shall not be subject to the Deduction Limitation. Any suspension of deferrals pursuant to this Section 6.1 shall continue for the remainder of the Plan Year in which the suspension is approved.

ARTICLE VII
TERMINATION OF DIRECTORSHIP PRIOR TO ELECTED DISTRIBUTION DATE

     7.1. Termination Benefit. Subject to the Deduction Limitation, if a Participant’s Termination of Directorship occurs prior to the applicable Elected Distribution Date(s) or the Participant’s death, the Participant shall receive a Termination Benefit, payable pursuant to the terms of Article V.

     7.2. Death Prior to Completion of Termination Benefit. If a Participant dies after Termination of Directorship but before the Termination Benefit is paid, the Participant’s unpaid Termination Benefit shall be paid as soon as administratively practicable to the Participant’s Beneficiary in the same amount as that benefit would have been paid to the Participant had the Participant survived.

     7.3. Death Prior to Termination of Directorship. If a Participant dies before Termination of Directorship, the Termination Benefit shall be paid as soon as administratively practicable to the Participant’s Beneficiary in the same amount as that benefit would have been paid to the Participant had the Participant survived.

ARTICLE VIII
BENEFICIARY DESIGNATION

     8.1. Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the beneficiary designation under any other plan of an Employer in which the Participant participates.

     8.2. Beneficiary Designation and Change of Beneficiary. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

     8.3. Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.

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     8.4. No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her estate.

     8.5. Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.

     8.6. Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Employer and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s participation in the Plan shall terminate upon such full payment of benefits.

ARTICLE IX
TERMINATION, AMENDMENT OR MODIFICATION

     9.1. Termination. Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to discontinue its sponsorship of the Plan and/or to terminate the Plan at any time with respect to any or all of its participating Members, by action of its Board of Directors. Upon the termination of the Plan, the affected Participants shall terminate their participation in the Plan and their Account Balances, determined as if they had experienced a Termination of Directorship on the date of Plan termination, shall be paid to the Participants as follows: Prior to a Change in Control, if the Plan is terminated with respect to all of its Participants, the Company shall pay such benefits as soon as administratively practicable. After a Change in Control, the Account Balances of all participants shall be fully vested and the Company shall be required to pay such benefits in a lump sum within five (5) business days of such Change in Control. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination. Notwithstanding the foregoing, termination of the Plan shall not result in the acceleration of any payment except as permitted by the Committee consistent with the requirements of Code Section 409A.

     9.2. Amendment. The Company may, at any time, amend or modify the Plan in whole or in part with respect to that Employer by the action of its Board of Directors; provided, however, that: (a) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s vested Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Directorship as of the effective date of the amendment or modification, and (b) no amendment or modification of this Section 9.2 or Section 10.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification. Notwithstanding the foregoing, the Board of Directors may unilaterally amend the Plan as necessary to cause the Plan to comply with Code Section 409A.

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     9.3. Effect of Payment. The full payment of the applicable benefit under Articles V, VI or VII of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant’s participation in the Plan shall terminate.

ARTICLE X
ADMINISTRATION

     10.1. Committee Duties. Except as otherwise provided in this Article X, this Plan shall be administered by a Committee that shall consist of members appointed by the Board of Directors. Members of the Committee may be Participants in this Plan. The Committee shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (b) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Employer.

     10.2. Administration Upon Change In Control. For purposes of this Plan, the Committee shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the trustee of the Trust and approved by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”). The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (a) pay all reasonable administrative expenses and fees of the Administrator; (b) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (c) supply full and timely information to the Administrator on all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the death or Termination of Directorship of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the trustee of the Trust only with the approval of the Ex-CEO. Upon and after a Change in Control, the Administrator may not be terminated by the Company.

     10.3. Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

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     10.4. Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

     10.5. Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee, and any Member to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Member or the Administrator.

     10.6. Employer Information. To enable the Committee and/or Administrator to perform its functions, the Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the death or Termination of Directorship of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require.

ARTICLE XI
OTHER BENEFITS AND AGREEMENTS

     11.1. Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

ARTICLE XII
CLAIMS PROCEDURES

     12.1. Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

     12.2. Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

     (a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

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     (b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

     (c) the specific reason(s) for the denial of the claim, or any part of it;

     (d) specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

     (e) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

     (f) an explanation of the claim review procedure set forth in Section 12.3 below.

     12.3. Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

     (a) may review pertinent documents;

     (b) may submit written comments or other documents; and/or

     (c) may request a hearing, which the Committee, in its sole discretion, may grant.

     12.4. Decision on Review. The Committee shall render its decision on review promptly, and not later than sixty (60) days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within one hundred twenty (120) days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

     (a) specific reasons for the decision;

     (b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

     (c) such other matters as the Committee deems relevant.

     12.5. Legal Action. A Claimant’s compliance with the foregoing provisions of this Article XII is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

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ARTICLE XIII
TRUST

     13.1. Establishment of the Trust. The Company shall establish the Trust, and shall at least annually transfer over to the Trust such assets as the Company determines, in its sole discretion, are necessary to provide, on a present value basis, for its respective future liabilities created with respect to the Annual Deferral Amounts for Participants for all periods prior to the transfer, as well as any debits and credits to the Participants’ Account Balances for all periods prior to the transfer, taking into consideration the value of the assets in the trust at the time of the transfer.

     13.2. Interrelationship of the Plan and the Trust. The provisions of the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Company to the assets transferred to the Trust. The Company shall at all times remain liable to carry out its obligations under the Plan.

     13.3. Investment of Trust Assets. The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement.

     13.4. Distributions From the Trust. The Company’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust. Any such distribution shall reduce the Company’s obligations under this Plan.

ARTICLE XIV
MISCELLANEOUS

     14.1. Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

     14.2. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under this Plan, any and all of the Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. The Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

     14.3. Employer’s Liability. The Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan.

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     14.4. Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

     14.5. Continued Board Service. Nothing in this Plan shall be construed as conferring any right upon any Participant to continuance as a member of the Board.

     14.6. Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

     14.7. Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

     14.8. Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

     14.9. Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the Commonwealth of Virginia.

     14.10. Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Alion Science and Technology Corporation
Attention: Stacy Mendler
1750 Tysons Boulevard, Suite 1300
McLean, VA 22102

     Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

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     Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

     14.11. Successors. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

     14.12. Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

     14.13. Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

     14.14. Court Order. The Committee is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

     14.15. Distribution in the Event of Taxation. If, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee before a Change in Control, or the trustee of the Trust after a Change in Control, for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld to the extent consistent with Section 409A (and, after a Change in Control, shall be granted to the extent consistent with Section 409A), the Company shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed a Participant’s unpaid Account Balance under the Plan). If the petition is granted, the tax liability distribution shall be made within 90 days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Plan.

     14.16. Trust. If the Trust terminates and benefits are distributed from the Trust to a Participant, the Participant’s benefits under this Plan shall be reduced to the extent of such distributions.

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     14.17. Legal Fees To Enforce Rights After Change in Control. The Company is aware that upon the occurrence of a Change in Control, the Board (which might then be composed of new members) or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company irrevocably authorizes such Participant to retain counsel of his or her choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of January 1, 2005, and certifies that the foregoing Plan was duly adopted by the Board of the Company on that date.

Alion Science and Technology Corporation
By:	/s/ Bahman Atefi
	Chief Executive Officer

Attest:	/s/ Jim Fontana
Secretary

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