EXHIBIT 10.13
COMPUTER SCIENCES CORPORATION
SEVERANCE PLAN FOR SENIOR MANAGEMENT
AND KEY EMPLOYEES
This Severance Plan (the "Plan") shall become effective with respect to
any particular Designated Employee (as defined below) as of the date a Senior
Management and Key Employee Severance Agreement, incorporating all or any
portion of the terms hereof, is executed between such Designated Employee and
Computer Sciences Corporation (the "Company").
1. Purpose
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The principal purposes of the Plan are to (i) provide an incentive to the
Designated Employees to remain in the employ of the Company, notwithstanding
any uncertainty and job insecurity which may be created by an actual or
prospective Change of Control, (ii) encourage the Designated Employee's full
attention and dedication to the Company currently and in the event of any
actual or prospective Change of Control, and (iii) provide an incentive for
the Designated Employees to be objective concerning any potential Change of
Control and to fully support any Change of Control transaction approved by the
Board of Directors.
2. Definitions
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Certain terms not otherwise defined in this Plan shall have the meanings
set forth in this Section 2.
(a) Compensation. "Compensation" shall mean the sum of:
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(i) the Designated Employee's annual base salary as in effect
immediately prior to the date the Notice of Termination provided for in
Section 3(c) of the Plan is given or in effect immediately prior to the date
of the Change of Control, whichever is greater, and
(ii) the average annual cash "short-term incentive compensation
bonus," as defined below, for the Designated Employee, whether pursuant to a
then existing plan of the Company or otherwise, (x) over the three most recent
fiscal years preceding the year in which the Date of Termination occurs for
which a "short-term incentive compensation bonus" was paid or deferred or for
which the amount of "short-term incentive compensation bonus," if any, was
finally determined; or (y) for a Designated Employee employed by the Company
for less than the three fiscal years to which reference is made in (i), over
the most recent complete fiscal year or years prior to the Date of Termination
during which such Designated Employee was employed and for which a "short-term
incentive compensation bonus" was paid or for which the amount of "short-term
incentive compensation bonus," if any, was finally determined; or (z) for a
Designated Employee employed by the Company for less than a single complete
fiscal year prior to the year in which the Date of Termination occurs, the
average annual cash "short-term incentive compensation bonus" shall be based
on the target annual bonus for the fiscal year during which the Date of
Termination occurs.
(b) Short-Term Incentive Compensation Bonus.
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For purposes of this Plan, a "short-term incentive compensation bonus" shall
mean a lump sum cash amount or other form of payment including payment in
kind, whether contingent or fixed, determined on an annual basis under the
Company's Annual Management Incentive Plan dated April 2, 1983 or such
successor plan or plans as shall be in effect for the whole or partial fiscal
year or years applicable under Section 2(a) of this Plan.
(c) Change of Control.
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The term "Change of Control" shall have the same meaning as provided in the
SERP (as defined in Section 4, below) as such definition may be amended or
modified from time to time; provided, however, that such amendment or
modification shall only be effective for purposes of this Plan if made prior
to the Change of Control to which such amended or modified definition is
sought to be applied.
(d) Designated Employees.
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"Designated Employees" shall refer to those employees of the Company and its
subsidiaries who are parties to agreements with the Company, substantially in
the form of Exhibit A attached hereto (with such changes as may be approved by
the Board of Directors or the Compensation Committee or other duly authorized
committee thereof), incorporating terms and provisions of this Plan. Each
such agreement shall indicate whether the particular Designated Employee is in
one or more of Group A, Group B or Group C or such other Group as may
hereafter be duly defined by amendment of this Plan.
(e) Good Reason.
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A Designated Employee's termination of employment with the Company shall be
deemed for "Good Reason" if it occurs within six months of any of the
following without the Designated Employee's express written consent:
(i) A substantial change in the nature, or diminution in the
status, of the Designated Employee's duties or position from those in effect
immediately prior to the Change of Control;
(ii) A reduction by the Company in the Designated Employee's
annual base salary as in effect on the date of a Change of Control or as in
effect thereafter if such compensation has been increased and such increase
was approved prior to the Change of Control;
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(iii) A reduction by the Company in the overall value of benefits
provided to the Designated Employee, as in effect on the date of a Change of
Control or as in effect thereafter if such benefits have been increased and
such increase was approved prior to the Change of Control. As used herein,
"benefits" shall include all profit sharing, retirement, pension, health,
medical, dental, disability, insurance, automobile, and similar benefits;
(iv) A failure to continue in effect any stock option or other
equity-based or non-equity based incentive compensation plan in effect
immediately prior to the Change of Control, or a reduction in the Designated
Employee's participation in any such plan, unless the Designated Employee is
afforded the opportunity to participate in an alternative incentive
compensation plan of reasonably equivalent value;
(v) A failure to provide the Designated Employee the same number
of paid vacation days per year available to him or her prior to the Change of
Control, or any material reduction or the elimination of any material benefit
or perquisite enjoyed by the Designated Employee immediately prior to the
Change of Control;
(vi) Relocation of the Designated Employee's principal place of
employment to any place more than 35 miles from the Designated Employee's
previous principal place of employment;
(vii) Any material breach by the Company of any provision of the
Plan or of any agreement entered into pursuant to the Plan or any stock option
or restricted stock agreement;
(viii) Conduct by the Company, against the Designated Employee's
volition, that would cause the Designated Employee to commit fraudulent acts
or would expose the Designated Employee to criminal liability; or
(ix) Any failure by the Company to obtain the assumption of the
Plan or any agreement entered into pursuant to the Plan by any successor or
assign of the Company;
provided that for purposes of clauses (ii) through (v) above, "Good Reason"
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shall not exist (A) if the aggregate value of all salary, benefits, incentive
compensation arrangements, perquisites and other compensation is reasonably
equivalent to the aggregate value of salary, benefits, incentive compensation
arrangements, perquisites and other compensation as in effect immediately
prior to the Change of Control, or as in effect thereafter if the aggregate
value of such items has been increased and such increase was approved prior to
the Change of Control, or (B) if the reduction in aggregate value is due to
reduced performance by the Company, the business unit of the Company for which
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the Designated Employee is responsible, or the Designated Employee, in each
case applying standards reasonably equivalent to those utilized by the Company
prior to the Change of Control.
(f) Cause. For purposes of this Plan and any agreements entered into
pursuant to the Plan only, Cause shall mean:
(i) fraud, misappropriation, embezzlement or other act of
material misconduct against the Company or any of its affiliates;
(ii) conviction of a felony involving a crime of moral turpitude;
(iii) willful and knowing violation of any rules or regulations of
any governmental or regulatory body material to the business of the Company;
or
(iv) substantial and willful failure to render services in
accordance with the terms of this Agreement (other than as a result of
illness, accident or other physical or mental incapacity), provided that (A) a
demand for performance of services has been delivered to the Designated
Employee in writing by or on behalf of the Board of Directors of the Company
at least 60 days prior to termination identifying the manner in which such
Board of Directors believes that the Designated Employee has failed to perform
and (B) the Designated Employee has thereafter failed to remedy such failure
to perform.
3. Termination Following Change of Control
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(a) Termination of Employment.
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In the event the Designated Employee, following the date of a Change of
Control, either (1) has a voluntary employment termination for Good Reason
within twenty-four (24) full calendar months following such Change of Control,
or (2) has a voluntary termination of employment with or without Good Reason
more than twelve (12) full calendar months after, but within thirteen (13)
full calendar months following, such Change of Control, or (3) has an
involuntary employment termination for any reason other than for Cause within
thirty-six full calendar months following such Change of Control, such
Designated Employee shall be entitled to receive immediately upon such
employment termination such payments and benefits hereunder as such
Designated Employee shall be entitled to receive upon such employment
termination in accordance with Sections 2(d) and 5 of this Plan.
Notwithstanding any other provision of this Plan, no payments shall be made
under or measured by this Plan in the event that the Designated Employee's
employment is terminated by his Disability or by his death or for Cause.
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(b) Disability.
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If, as a result of the Designated Employee's incapacity due to physical or
mental illness, accident or other incapacity (as determined by the Board in
good faith, after consideration of such medical opinion and advice as may be
available to the Board from medical doctors selected by the Designated
Employee or by the Board or both separately or jointly), the Designated
Employee shall have been absent from his duties with the Company on a full-
time basis for six consecutive months and, within 30 days after written Notice
of Termination thereafter given by the Company, the Designated Employee shall
not have returned to the full-time performance of the Designated Employee's
duties, the Company may terminate the Designated Employee's employment for
"Disability".
(c) Notice of Termination.
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Any purported termination of the Designated Employee's employment by the
Company or the Designated Employee hereunder shall be communicated by a Notice
of Termination to the other party in accordance with the terms of the
agreement entered into pursuant to the Plan. For purposes of the Plan and any
agreement entered into pursuant hereto, a "Notice of Termination" shall mean a
written notice which shall indicate those specific termination provisions in
the Plan applicable to the termination and which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for application
of the provisions so indicated.
(d) Date of Termination.
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"Date of Termination" shall mean (i) if the Designated Employee is terminated
by the Company for Disability, thirty (30) days after Notice of Termination is
given to the Designated Employee (provided that the Designated Employee shall
not have returned to the performance of the Designated Employee's duties on a
full-time basis during such thirty (30) day period) or (ii) if the Designated
Employee's employment is terminated by the Company for any other reason or by
the Designated Employee, the date on which a Notice of Termination is given.
4. Funding of SERP Obligations Upon Change Of Control
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Upon the occurrence of a Change of Control, the Company shall fund that
portion, if any, of the obligations of the Company to the Designated Employee,
under any supplemental executive retirement plan ("SERP") that may then cover
the Designated Employee, that is not then irrevocably funded by establishing
and irrevocably funding a trust for the benefit of the Designated Employee.
Such trust shall be a grantor trust described in Internal Revenue Code Section
671. The trust shall provide for distribution of amounts to Designated
Employee in order to pay taxes, if any, that become due prior to payment of
supplemental pension benefit amounts pursuant to the trust. The amount of
such fund shall equal the then present value of the supplemental pension
obligation due as determined by a nationally recognized firm qualified to
provide actuarial services which has not rendered services to the Company
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during the two years preceding such determination. The actuary shall be
selected by the Company, subject to approval by the Designated Employee (which
approval shall not unreasonably be withheld), and paid by the Company. The
establishment and funding of such trust shall not affect the obligation of the
Company to provide supplemental pension payments under the terms of the
applicable SERP.
5. Severance Compensation upon Termination of Employment
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If the Designated Employee's employment with the Company shall be
terminated following a Change of Control as set forth in Section 3 of the
Plan, then the Company shall pay and provide as follows to such Designated
Employee:
(a) For a Designated Employee in Groups A or B, upon voluntary
termination for Good Reason within twenty-four (24) full calendar months
following such Change of Control, or upon involuntary employment termination
for any reason other than for Cause within thirty-six (36) full calendar
months following such Change of Control:
(i) Pay to the Designated Employee as severance pay in a lump
sum, in cash, on or before the tenth business day following the Date of
Termination, an amount equal to the multiple specified on Exhibit B and made
applicable to such Designated Employee by this Plan and such Designated
Employee's agreement hereunder, multiplied by the Designated Employee's
Compensation; and
(ii) Provide the Designated Employee, for the number of years
calculated for such Designated Employee pursuant to Section 5(a)(i) of this
Plan (or such shorter period as the Designated Employee may elect) with
disability, health, life and accidental death and dismemberment benefits
substantially similar to those benefits which the Designated Employee is
receiving immediately prior to the Change of Control or, if greater,
immediately prior to the Notice of Termination (followed by the period of
COBRA continuation if COBRA benefits are elected by the Designated Employee at
such Designated Employee's expense). Benefits otherwise receivable by the
Designated Employee pursuant to this Section 5(a)(ii)) shall be reduced to the
extent comparable benefits are actually received by the Designated Employee
during such period as the result of his or her employment with another person.
(b) For a Designated Employee in Group C:
A Designated Employee in Group C shall receive severance pay under
Section 5(a)(i) and the benefits under Section 5(a)(ii) as shown on Exhibit B
in the circumstance of voluntary termination with or without Good Reason more
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than twelve (12) full calendar months after, but within thirteen (13) full
calendar months following, such Change of Control, as such Designated
Employee's exclusive entitlement to payment and benefits in such circumstance
under this Plan.
6. Certain Further Payments By the Company
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(a) Tax Reimbursement Payment.
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In the event that any amount or benefit that may be paid, distributed or
otherwise provided to the Designated Employee by the Company or any
affiliated company, whether pursuant to this Plan or otherwise (collectively,
the "Covered Payments"), is or may become subject to the tax imposed under
Section 4999 of the Code (the "Excise Tax") or any similar tax that may
hereafter be imposed, the Company shall either pay to the Designated Employee
or irrevocably contribute for the benefit of the Designated Employee to a
trust conforming with the requirements of Section 4 above (and may be part of
that trust) established by the Company prior to the Change of Control giving
rise to the Excise Tax, at the time specified in Section 6(e) below, the Tax
Reimbursement Payment (as defined below). The Tax Reimbursement Payment is
defined as an amount, which when reduced by any Excise Tax on the Covered
Payments and any Federal, state and local income taxes, employment and excise
taxes (including the Excise Tax) on the Tax Reimbursement Payment (but without
reduction for any Federal, state or local income or employment taxes on such
Covered Payments), shall be equal to the product of any deductions disallowed
for Federal, state or local income tax purposes because of the inclusion of
the Tax Reimbursement Payment in Designated Employee's adjusted gross income
and the highest applicable marginal rate of Federal, state and local income
taxation, respectively, for the calendar year in which the Tax Reimbursement
Payment is to be made.
(b) Determining Excise Tax.
----------------------
For purposes of determining whether any of the Covered Payments shall be
subject to the Excise Tax and the amount of such Excise Tax:
(i) such Covered Payments shall be treated as "parachute
payments" within the meaning of Section 280G of the Code, and all "parachute
payments" in excess of the "base amount" (as defined under Section 280G(b)(3)
of the Code) shall be treated as subject to the Excise Tax, unless, and except
to the extent that, in the opinion of the "Accountants" (as defined below),
such Covered Payments (in whole or in part) either do not constitute
"parachute payments" or represent reasonable compensation for services
actually rendered (within the meaning of Section 280G(b)(4) of the Code) in
excess of the "base amount," or such "parachute payments" are otherwise not
subject to such Excise Tax, and
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(ii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the
principles of Section 280G of the Code.
For the purposes of this Section 6 the "Accountants" shall mean the Company's
independent certified public accountants serving immediately prior to the
Change of Control. In the event that such Accountants decline to serve as the
Accountants for purposes of this Section 6 or are serving as accountant or
auditor for the individual, entity or group effecting the Change of Control,
the Designated Employee shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accountants hereunder). All
fees and expenses of the Accountants in connection with matters relating to
this Section 6 shall be paid by the Company.
(c) Applicable Tax Rates and Deductions.
-----------------------------------
For purposes of determining the amount of the Tax Reimbursement Payment, the
Designated Employee shall be deemed:
(i) to pay Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year in which the
Tax Reimbursement Payment is to be made; and
(ii) to pay any applicable state and local income taxes at the
highest applicable marginal rate of taxation for the calendar year in which
the Tax Reimbursement Payment is to be made, net of the maximum reduction in
Federal income taxes which could be obtained from the deduction of such state
or local taxes if paid in such year (determined without regard to limitations
on deductions based upon the amount of the Designated Employee's adjusted
gross income.)
(d) Subsequent Events.
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(i) In the event that the Excise Tax is subsequently determined
by the Accountants to be less than the amount taken into account hereunder in
calculating the Tax Reimbursement Payment made, the Designated Employee shall
repay to the Company, at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such prior Tax Reimbursement
Payment that has been paid to the Designated Employee or to Federal, state or
local tax authorities on the Designated Employee's behalf and that would not
have been paid if such Excise Tax had been applied in initially calculating
such Tax Reimbursement Payment, plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding
the foregoing, in the event any portion of the Tax Reimbursement Payment to be
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refunded to the Company has been paid to any Federal, state or local tax
authority, repayment thereof shall not be required until actual refund or
credit of such portion has been made to the Designated Employee, and interest
payable to the Company shall not exceed interest received or credited to the
Designated Employee by such tax authority for the period it held such portion.
(ii) In the event that the Excise Tax is later determined by the
Accountants to exceed the amount taken into account hereunder at the time the
Tax Reimbursement Payment is made (including, but not limited to, by reason of
any payment the existence or amount of which cannot be determined at the time
of the Tax Reimbursement Payment), the Company shall make an additional Tax
Reimbursement Payment in respect of such excess which Tax Reimbursement
Payment shall include any interest or penalty (any such payment in respect of
interest or penalty to be subject to the gross-up principles set forth in this
Section 6) payable with respect to such excess, at the time that the amount of
such excess is finally determined. For purposes of this Section 6(d)(ii), if
a final determination as to the Excise Tax applicable to a Covered Payment is
made by the Internal Revenue Service, or a court with jurisdiction, such
determination shall be deemed to be determined by the Accountants.
(iii) In the event it is later determined by the Accountants that
Designated Employee owes additional Federal, state or local income or
employment taxes with respect to any Tax Reimbursement Payment, the Company
shall promptly pay him the difference between (A) the Tax Reimbursement
Payment determined based on the Federal, state and local income and employment
taxes due in respect of the Tax Reimbursement Payment as so determined by the
Accountants and (B) the Tax Reimbursement Payment that had been previously
paid to him or for his benefit. For purposes of this Section 6(d)(iii),
determination by the Accountants shall include a final determination by the
Internal Revenue Service, a state or local government or tax agency or a court
with jurisdiction.
(e) Date of Payment.
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The portion of the Tax Reimbursement Payment attributable to a Covered Payment
shall be paid to the Designated Employee or remitted to the appropriate tax
authority or irrevocably contributed for the benefit of the Designated
Employee to a trust as described in Section 4 above within ten (10) business
days following the payment, distribution or other provision of the Covered
Payment. If the amount of such Tax Reimbursement Payment (or portion thereof)
cannot be finally determined on or before the date on which payment,
distribution or provision is due, the Company shall either pay to the
Designated Employee or contribute for the benefit of the Designated Employee
to the trust described in the preceding sentence, an amount estimated in good
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faith by the Accountants to be the minimum amount of such Tax Reimbursement
Payment and shall pay the remainder of such Tax Reimbursement Payment (which
Tax Reimbursement Payment shall include interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined, but in no event later than forty-five (45) calendar days after
payment, distribution or other provision of the related Covered Payment. In
the event that the amount of the estimated Tax Reimbursement Payment exceeds
the amount subsequently determined to have been due, such excess shall be
repaid or refunded pursuant to the provisions of Section 6(d)(i) above.
(f) The establishment and funding of the trust described in Section 4
above shall not affect the obligations of the Company to provide the benefits
subject to this Section 6.
7. Dispute Resolution; Claims Procedure; Arbitration
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(a) Claims Procedure.
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(i) Benefits will be provided to each Designated Employee as
specified in this Plan. If a Designated Employee believes that he has not
been provided with benefits due under the Plan, then the Designated Employee
may file a request for review under this procedure with the Company's Vice
President of Human Resources or Chief Financial Officer, as the Designated
Employee may elect, within ninety (90) days after the date he should have
received such benefits. Alternatively, such Designated Employee may elect the
arbitration procedure in Section 7(b) of this Plan. If such Designated
Employee elects to proceed under this Section 7(a) and files such a request
for a benefit under the Plan with the Company's Vice President of Human
Resources or Chief Financial Officer and that claim is denied, in whole or in
part, then within thirty (30) calendar days after making that request, the
Company's Officer with whom the Designated Employee shall have filed a request
for review under this Section 7(a)(i) shall notify the Designated Employee of
the specific reasons for the denial with specific references to pertinent Plan
provisions on which the denial is based. At that time the Designated Employee
will be advised of his right to appeal that determination and given a
description of any additional material or information necessary for the
Designated Employee to perfect an appeal, an explanation of why such material
or information is necessary, and an explanation of the Plan's review and
appeal procedure.
(ii) A Designated Employee may appeal from a determination or
denial under Section 7(a)(1) by submitting to the Plan Appeal Committee within
sixty-five (65) calendar days after receiving the notice of determination or
denial a written statement:
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(x) requesting a review by the Plan Appeal Committee of the
claim;
(y) setting forth all of the grounds upon which the request
for review is based and any facts in support thereof; and
(z) setting forth any issues or comments which the Designated
Employee deems relevant to the claim.
(iii) The Plan Appeal Committee shall be the Board of Directors of
the Company or its Compensation Committee or any other duly authorized
committee thereof, or any committee appointed by any such committee.
(iv) The Plan Appeal Committee shall act upon the appeal within
ninety (90) days or one hundred eighty (180) days in unusual circumstances, if
the Plan Appeal Committee in its reasonable discretion finds that such unusual
circumstances exist, after the later of its receipt of the appeal or its
receipt of all additional materials reasonably requested by the Plan Appeal
Committee. The Plan Appeal Committee shall review the claim and all written
materials submitted by the Designated Employee, and may require him to submit,
within ten (10) days of its written notice, such additional facts, documents,
or other evidence as the Plan Appeal Committee in its sole discretion deems
necessary or advisable in making such a review. On the basis of its review,
the Plan Appeal Committee shall make an independent good faith determination
with respect to the Designated Employee's claim.
(v) If the Plan Appeal Committee denies a claim in whole or in
part, the Committee shall give the Designated Employee written notice of its
decision setting forth the specific reasons for the denial and specific
references to the pertinent Plan provisions on which its decision was based.
The Designated Employee may then either pursue his claim in a judicial forum
or invoke the arbitration provisions of Section 7(b) of this Plan.
(b) Arbitration
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(i) In the event of any dispute between the parties concerning
the validity, interpretation, enforcement or breach of this Agreement or in
any way related to the Designated Employee's employment or any termination of
such employment (including any claims involving any officers, managers,
directors, employees, shareholders or agents of the Company) excepting only
any rights the parties may have to seek injunctive relief, the dispute shall
be resolved by final and binding arbitration administered by JAMS/Endispute in
Los Angeles, California in accordance with the then existing JAMS/Endispute
Arbitration Rules and Procedures for Employment Disputes. Resolution by
arbitration, either in lieu of or after exhausting the procedures of Section
7(a) of this Plan, shall be at the election of the Designated Employee with
respect to any claim to which Section 7(a) shall apply. In the event of such
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an arbitration proceeding, the parties shall select a mutually acceptable
neutral arbitrator from among the JAMS/Endispute panel of arbitrators. In the
event the parties cannot agree on an arbitrator, the Administrator of
JAMS/Endispute shall appoint an arbitrator. Neither party nor the arbitrator
shall disclose the existence, content, or results of any arbitration hereunder
without the prior written consent of all parties, except as may be compelled
by court order. Except as provided herein, the Federal Arbitration Act shall
govern the interpretation and enforcement of such arbitration and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or Federal law, or both,
as applicable and the arbitrator is without jurisdiction to apply any
different substantive law. The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any
party and shall apply the standards governing such motions under the Federal
Rules of Civil Procedure. The arbitrator shall render an award and a written,
reasoned opinion in support thereof. Judgment upon the award may be entered
in any court having jurisdiction thereof. The parties intend this arbitration
provision to be valid, enforceable, irrevocable and construed as broadly as
possible. Pending the resolution of any dispute between the parties, the
Company shall continue prompt payment of all amounts due the Designated
Employee under this Agreement and prompt provision of all benefits to which
the Designated Employee is otherwise entitled.
(ii) Costs of arbitration, including reasonable attorney fees and
costs and the reasonable fees and costs of any experts incurred by the
Designated Employee, shall be borne and paid by the Company if the Designated
Employee prevails on any portion of his claims. Such fees and costs shall be
paid by the Company in advance of the final disposition of such claims, as
such fees are incurred, upon receipt of an undertaking by the Designated
Employee to repay such amounts if it is ultimately determined that he did not
prevail on any portion of his claims. Not later than the occurrence of a
Change of Control, the Company shall deposit not less than $5 million in a
grantor trust, as described in Internal Revenue Code Section 671, which shall
provide for distribution of amounts to Designated Employees in fulfillment of
the Company's obligations to pay their fees and costs as provided in the
preceding sentence. The funding of such trust shall be maintained at not less
than $5 million by further deposits by the Company as such payments of fees
and costs are made by the trustee or trustees of the trust. The arbitrator
shall make such interim awards respecting the funding of the trust and payment
of the fees and costs as shall be necessary and appropriate to assure the
prompt, regular interim payment of fees and costs as provided in this Section
7(b)(ii). Judgments upon any such interim awards may be entered in any court
having jurisdiction thereof. Such trust by its terms shall be irrevocable but
shall terminate upon the later of (x) the expiration of three years following
a Change of Control or (y) the disposition of all then pending claims under
the Plan by final arbitration award and final judgment, all time for appeals
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having expired, in any judicial proceedings respecting any such claims.
Immediately after termination of the trust, any funds remaining in the trust
and accumulated interest thereon shall revert to the Company.
(iii) Notwithstanding the foregoing provisions of this Section 7,
the Designated Employee and the Company agree that the Designated Employee or
the Company may seek and obtain otherwise available injunctive relief in Court
for any violation of obligations concerning confidential information or trade
secrets that cannot adequately be remedied at law or in arbitration.
8. Mitigation of Damages; Effect of Plan
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(a) The Designated Employee shall not be required to mitigate damages or
the amount of any payment provided for under the Plan by seeking other
employment or otherwise, nor shall the amount of any payment provided for
under the Plan, including without limitation Section 5 of the Plan, be reduced
by any compensation earned by the Designated Employee as a result of
employment by another employer or by retirement benefits after the Date of
Termination, or otherwise except as expressly provided herein.
(b) Except as provided in Section 10, the provisions of the Plan, and
any payment provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish the Designated Employee's existing rights, or
rights which would accrue solely as a result of the passage of time, under any
benefit plan, employment agreement or other contract, plan or arrangement.
9. Term; Amendments; No Effect On Employment Prior To Change Of Control
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(a) The Plan shall have an initial term of two years, which shall be
automatically extended by one year beginning on the first anniversary of the
date of adoption of the Plan and on each anniversary thereafter. The Plan
with respect to all Designated Employees or any particular Designated Employee
may be terminated or amended by the Board of Directors of the Company or by
its Compensation Committee or any other duly authorized Committee thereof;
provided that a termination or any amendment that reduces the benefits to the
Designated Employee provided hereunder or otherwise adversely affects the
rights of the Designated Employee, without the Designated Employee's prior
written consent: (i) may only be approved after the completion of the initial
two year term and prior to a Change of Control, and (ii) may not be effected
prior to the provision of' 24 months' advance notice thereof to the Designated
Employee. Termination or amendment of the Plan shall not affect any
obligation of the Company under the Plan which has accrued and is unpaid as of
the effective date of the termination or amendment. Notwithstanding the
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foregoing, the Company may change the definition of "Change of Control" as
provided in Section 2(c), above, subject to the limitations therein stated.
(b) Nothing in the Plan or any agreement entered into pursuant to the
Plan shall confer upon the Designated Employee any right to continue in the
employ of the Company prior to (or, subject to the terms of the Plan,
following) a Change of Control of the Company or shall interfere with or
restrict in any way the rights of the Company, which are hereby expressly
reserved except as may otherwise be provided under any other written agreement
between the Designated Employee and the Company,, to discharge the Designated
Employee at any time prior to (or, subject to the terms of the Plan,
following) the date of a Change of Control of the Company for any reason
whatsoever, with or without cause. The Designated Employee and the Company
acknowledge that, except as may otherwise be provided under any other written
agreement between the Designated Employee and the Company, the employment of
the Designated Employee by the Company is "at will," and if, prior to a Change
Of Control, the Designated Employee's employment with the Company terminates
for any reason or for no reason, then the Designated Employee shall have no
further rights under this Plan.
(c) The Company may withhold from any amounts payable under this Plan
such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(d) The Designated Employee's or the Company's failure to insist upon
strict compliance with any provision hereof or the failure to assert any right
the Designated Employee or the Company may have hereunder, including, without
limitation, the right of the Designated Employee to terminate employment for
Good Reason, as defined herein, shall not be deemed to be a waiver of such
provision or right or any other provision or right under this Plan.
10. Effect Of Other Agreements
--------------------------
Notwithstanding anything to the contrary provided in the Plan, (i) any
amounts payable to a Designated Employee pursuant to Section 5(a) of the Plan
shall be reduced by any amounts actually paid to such Designated Employee
following a termination of employment either pursuant to applicable law or
under any contract between the Designated Employee and the Company, in either
case that provides for or requires the payment of compensation or severance
benefits following a termination of employment and (ii) any benefits that may
be provided to a Designated Employee for three years or other period following
a termination of employment pursuant to Section 5(a)(ii) of the Plan shall be
reduced to the extent that substantially identical benefits are actually
received by the Designated Employee during such three year or other period
14
under an existing severance agreement or requirement. It is expressly
understood, however, that no amounts payable hereunder shall be reduced by
amounts payable under the Company's pension or deferred compensation plans or
the SERP (as defined in Section 4, above) or by amounts payable as accrued
vacation or because of the acceleration of the benefits under the Company's
stock option and restricted stock plans.
15
EXHIBIT A
COMPUTER SCIENCES CORPORATION
SENIOR MANAGEMENT AND KEY EMPLOYEE
SEVERANCE AGREEMENT
This SENIOR MANAGEMENT AND KEY EMPLOYEE SEVERANCE AGREEMENT (this
"Agreement"), dated as of _______________ is made and entered into by and.
between Computer Sciences Corporation, a Nevada corporation (the "Company"),
and _____________________ (the "Executive").
R E C I T A L S
- - - - - - - -
This Agreement is being entered into in accordance with the Severance
Plan attached hereto as Annex 1 (the "Plan") in order to set forth the
specific severance compensation which the Company agrees that it will pay to
the Executive if the Executive employment with the Company terminates under
certain circumstances described in the Plan.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, in consideration of the continued service of the
Executive as an employee of the Company, the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. Agreement to Provide Plan Benefits.
----------------------------------
The Plan (as it may hereafter be amended or modified in accordance with the
terms thereof) is hereby incorporated into this Agreement in full and made a
part hereof as though set forth in full in this Agreement. The Executive is
hereby designated a member of Group(s) ___________ under the Plan and shall be
entitled to all of the rights and benefits applicable to employees of the
Company in such Group(s) under the Plan. The Company agrees to be bound by
the Plan and to provide to the Executive all of the benefits provided to
employees of the Company who are members of Group(s) __________ under the Plan
subject to the terms and conditions of the Plan. Terms not otherwise defined
in this Agreement shall have the meanings set forth in the Plan.
2. Heirs and Successors.
--------------------
(a) Successors of the Company.
-------------------------
The Company will require any successor or assign (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession transaction shall be a breach of this
Agreement and shall entitle the Executive to terminate his or her employment
with the Company within six months thereafter for Good Reason and to receive
the benefits provided under the Plan in the event of termination for Good
Reason following a Change of Control. As used in this Agreement, "Company"
shall mean the Company as defined above and any successor or assign to its
business and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 2 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(b) Heirs of the Executive.
----------------------
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Executive
should die after the conditions to payment of benefits set forth in Section 5
of the Plan have been met and any amounts are still payable to him hereunder,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's beneficiary,
successor, devisee, legatee or other designee or, if there be no such
designee, to the Executive's estate. Until a contrary designation is made to
the Company, the Executive hereby designates as his beneficiary under this
Agreement the person whose name appears below his signature on page 3 of this
Agreement.
3. Notice.
------
For purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, as follows: if to the Company -- Computer
Sciences Corporation, 0000 Xxxx Xxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President, General Counsel and Secretary; and if to the
Designated Employee at the address specified at the end of this Agreement.
Notice may also be given at such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.
4. Miscellaneous.
-------------
No provisions of this Agreement or the Plan may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Designated Employee and the Company, except as provided
in Section 9(a) of the Plan. No waiver by any party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
5. Validity.
--------
The invalidity or unenforceability of any provisions of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
2
6. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute
one and the same instrument.
7. Gender.
------
In this Agreement (unless the context requires otherwise), use of' any
masculine term shall include the feminine.
8. Rescission.
----------
The Company agrees that this Agreement and the right to receive payments
pursuant to the Plan and this Agreement may be rescinded at any time by the
Executive giving written notice to such effect to the Company in accordance
with Section 3 above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPUTER SCIENCES
CORPORATION EXECUTIVE
By:_________________________ ____________________________
(Signature)
____________________________
(Name)
____________________________
____________________________
(Address for Notice)
____________________________
(Designated Beneficiary)
____________________________
____________________________
(Address for Beneficiary)
3
EXHIBIT B
Group
-----
A B C
--- --- ---
Multiple of compensation
under Sections 3 and 5(a)(i) 3 2 3
SPECIAL EXHIBIT TO
COMPUTER SCIENCES CORPORATION SEVERANCE PLAN FOR
SENIOR MANAGEMENT AND KEY EMPLOYEES
February 2, 1998
The following executives are Designated Employees under the Computer Sciences
Corporation Severance Plan For Senior Management and Key Employees, with
reference to the Groups identified at Exhibit B and in the text of the Plan:
Groups A and C:
--------------
Van X. Xxxxxxxxx Chairman, President and Chief Executive Officer
Group B:
-------
Xxxxxx X. Xxxxxx Vice President
Xxxxxx X. Xxxxxx Vice President and President, Systems Group
Xxxxxx X. Xxxx President, Integrated Business Services
Xxxxxxx X. Xxxx Vice President, General Counsel and Secretary
J. Xxxxxxx Xxxx Chief Executive Officer, CSC Index
Xxxx X. Level Vice President, Chief Financial Officer and
Treasurer
Xxxxxx X. Xxxxxxxxxx Vice President and President, European Group
Xxxxxx X. Xxxxxxx Xx. Vice President and President, Financial
Services Group
C. Xxxxx Xxxxxxx Vice President, Corporate and Marketing
Communications
Xxxxxx X. Xxxxxxxx President, Technology Management Group
Xxxxx X. Xxxxxxx President, Consulting Group
Xxxxxx X. Xxxxxxx III President, Healthcare Group
Xxxx X. Xxxxxx Vice President, Finance and Administration,
Technology Management Group
Xxxx X. Xxxxxx Vice President, Corporate Development
X. Xxxxxxx Weeks Vice President, Office of the Chairman,
President and Chief Executive Officer
Xxxxxx Xxxxxxxx Vice President and President, Chemical, Oil
and Gas Group
