AMENDMENT TO 1989 INCENTIVE STOCK OPTION PLAN The Nichols Research Corporation 1989 Incentive Stock Option Plan is hereby amended to provide that notwithstanding anything to the contrary, the Plan shall be administered by a committee of not less than two members and that all committee members shall be disinterested directors as that term is defined under Rule 16(b-3) as adopted by the Securities and Exchange Commission. This Amendment shall be effective May 1, 1991. In all other respects, the Plan as previously amended, shall remain in full force and effect according to its terms and conditions. NICHOLS RESEARCH CORPORATION Chris H. Horgen By:_________________________________ Chris H. Horgen Its Chief Executive Officer AMENDMENT NUMBER TWO TO THE NICHOLS RESEARCH CORPORATION 1989 INCENTIVE STOCK OPTION PLAN Pursuant to Section 13 of the Nichols Research Corporation 1989 Incentive Stock Option Plan (the "Plan"), Nichols Research Corporation (the "Company"), hereby amends the Plan as follows: 1. Subject to approval by the shareholders of the Company, effective November 1, 1996, the first, third and last sentences of the first paragraph of Section 2 of the Plan are hereby deleted in their entirety and the following sentences are added at the beginning of the first paragraph of Section 2: The Plan shall be administered by a committee (the "Committee") composed of the entire Board of Directors or a committee of the Board of Directors that is composed solely of two or more Non-Employee Directors. For this purpose, the term "Non-Employee Director" shall mean a person who is a member of the Company's Board of Directors who (a) is not currently an officer or employee of the Company or any parent or subsidiary of the Company, (b) does not directly or indirectly receive compensation for serving as a consultant or in any other non-director capacity from the Company or any parent or subsidiary of the Company that exceeds the dollar amount for which disclosure would be required pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Act of 1933 and the Securities Exchange Act of 1934 ("Regulation S-K"), (c) does not possess an interest in any other transaction with the Company or any parent or subsidiary of the Company for which disclosure would be required pursuant to Item 404(a) of Regulation S-K, and (d) is not engaged in a business relationship with the Company or any parent or subsidiary of the Company which would be disclosable under Item 404(b) of Regulation S-K. In the event the Committee is a committee composed of two or more Non-Employee Directors, the Board of Directors may from time to time remove members from, add members to, and fill vacancies, on the Committee. A member of the Committee shall be eligible to participate in the Plan and receive options under the Plan. 2. Subject to approval by the shareholders of the Company, effective November 1, 1996, the third sentence of Section 3(a) of the Plan is hereby deleted in its entirety. 3. Subject to approval by the shareholders of the Company, effective November 1, 1996, the first sentence of Section 13 of the Plan is hereby deleted in its entirety and the following new sentence is substituted in its place: The Board of Directors, insofar as permitted by law, shall have the right from time to time with respect to any shares at the time not subject to options, to suspend or discontinue the Plan or revise or amend it in any respect whatsoever, except that without approval of the shareholders of the Company, no such revision or amendment shall: (a) increase (except in accordance with Section 6) the maximum number of shares for which options may be granted under the Plan either in the aggregate or to any individual employee, (b) change the provisions relating to the determination of employees to whom options shall be granted, (c) remove the administration of the Plan from the Committee, or (d) decrease the price at which options may be granted. Except as amended above, the Plan shall remain in full force and effect according to its terms and provisions. Done this the 14th day of November, 1996. NICHOLS RESEARCH CORPORATION Chris H. Horgen By:____________________________________ Its Chief Executive Officer