ALION DIRECTOR DEFERRED COMPENSATION PLAN

Exhibit 10.63

ALION DIRECTOR DEFERRED COMPENSATION PLAN

AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 2005

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.

     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;

     (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.

     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.

     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.

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.

     (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.

     (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

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 percentage