EX-10.4 7 d371552dex104.htm EX-10.4 STOCK OPTION AWARD AGREEMENT
Exhibit 10.4
DXC TECHNOLOGY COMPANY
2017 OMNIBUS INCENTIVE PLAN
STOCK OPTION
AWARD AGREEMENT
This Agreement (“Agreement”) is made and entered into as of [GRANT DATE] (the “Grant Date”) by and between DXC Technology Company, a Nevada corporation (the “Company”), and [EMPLOYEE], a full-time employee of the Company and/or one or more of its subsidiaries (the “Employee”).
This Agreement granting the Employee an award under the Plan (the “Award”) shall be subject to all of the terms and conditions set forth in the DXC Technology Company 2017 Omnibus Incentive Plan (the “Plan”) and this Agreement. Except as defined in Appendix A, capitalized terms shall have the same meanings ascribed to them under the Plan.
This Award is subject to the data privacy provisions set forth in Appendix B.
The Company hereby grants to the Employee, and the Employee hereby accepts, an option to purchase [# GRANTED] shares of Common Stock (the “Option Shares”) at an exercise price of [$XXXXX XXXXX] per share (the “Exercise Price”), which option shall expire at 5:00 p.m., Eastern U.S.A. time, on [EXPIRATION DATE] (the “Expiration Date”) (the “Option”). The Option shall not initially be exercisable to purchase any Option Shares; provided, however, that upon each of the dates indicated below, the Option shall become exercisable to purchase (“vest with respect to”) the number of the Option Shares indicated below across from such date:
Number of Option Shares Vesting | Date | |||
1/3 of the Options Granted | 1st Anniversary of the Grant Date | |||
1/3 of the Options Granted | 2nd Anniversary of the Grant Date | |||
1/3 of the Options Granted | 3rd Anniversary of the Grant Date |
2. Termination of Employment; Acceleration and Termination of Options.
(a) Termination of Status as an Employee.
(i) Termination at Age 62 or Older Other than due to Cause, Death or Disability.
(A) If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated at age 62 or older for no reason, or for any reason other than Cause, death or Disability, then:
(1) if the Employee shall have been (or for any other purpose shall have been treated as if he or she had been) a continuous employee of the Company or its subsidiaries for at least 10 years immediately prior to the date of termination of employment status (the “Employment Termination Date”), then
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(a) the portion of the Option that has not vested on or prior to such date shall fully vest immediately prior to such date, and (b) subject to Section 2(b) hereof, the Option shall terminate upon the earlier of the Expiration Date or the third anniversary of the Employment Termination Date; and
(2) if the Employee shall not have been (and shall not for any other purpose have been treated as if he or she had been) a continuous employee of the Company or its subsidiaries for at least 10 years immediately prior to the Employment Termination Date, then, subject to Sections 2(a)(ii) and 2(b) hereof (a) the portion of the Option that has not vested on or prior to such date shall terminate on such date, and (b) the remaining vested portion of the Option shall terminate upon the earlier of the Expiration Date or the third anniversary of the Employment Termination Date.
(B) For purposes of subsection (A) above, an Employee’s years of service shall include any continuous service with HPE prior to the Spinoff or with CSC prior to the CSC Merger.
(ii) Leave of Absence. If, prior to the exercise of the Option in full, the Employee is granted a leave of absence (including a military leave of absence), the Employee and the Company each reasonably anticipate that the Employee will return to active employment and either (x) the leave of absence is to be for not more than six months or (y) at all times during the leave of absence the Employee has a statutory or contractual right to return to work, then:
(A) while on leave of absence the Employee shall be treated as if he were an active employee;
(B) if the Employee’s leave of absence is terminated and the Employee does not timely return to active employment, the date of the end of the leave of absence shall be treated as the date on which the Employee has a termination of employment; and
(C) if the Employee’s leave of absence is terminated and the Employee timely returns to active employment, he shall be treated as if active employment had continued uninterrupted during the leave of absence.
(iii) Death or Disability. If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated by reason of the death or Disability of the Employee, then (1) the portion of the Option that has not vested on or prior to the Employment Termination Date shall fully vest on such date and (2) the Option shall terminate upon the earlier of the Expiration Date or the fifth anniversary of the Employment Termination Date.
(iv) Other Termination at Age 61 or Younger. If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated at age 61 or younger for no reason, or for any reason other than Cause, death, Disability, or approved leave of absence, then (1) the portion of the Option that has not vested on or prior to the Employment Termination Date shall terminate on such date and (2) the remaining vested portion of the Option shall terminate upon the earlier of the Expiration Date or three months after the Employment Termination Date.
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(i) The Committee, in its sole discretion, may accelerate the exercisability of the Option at any time and for any reason.
(ii) Notwithstanding anything to the contrary in this Agreement, upon a Change in Control any portion of the Option then outstanding shall, subject to Section 18 of the Plan, continue to vest based on Employee’s continued employment with the Company (including any successor to the Company resulting from the Change in Control) and its subsidiaries in accordance with the vesting schedule set forth in Section 1 of this Agreement. The Option shall remain subject to all other terms and conditions of this Agreement, provided, however, that if, on or within two (2) years after the date of the Change in Control and prior to when the Option has vested in full, the Employee’s status as an employee of the Company (including any successor to the Company in such Change in Control) or any of its subsidiaries is terminated by the Company or any of its subsidiaries without Cause, or as a result of the Employee’s death or Disability or pursuant to Section 2(a)(i)(A)(1) above, then any unvested portion of the Option shall automatically vest in full as of the Employment Termination Date and the Option shall remain exercisable until, and shall terminate upon, the earlier of the Expiration Date or, if applicable, the fifth anniversary of the date of the Employee’s death.
(i) the dissolution or liquidation of the Company;
(ii) a sale of substantially all of the property and assets of the Company, unless the terms of such sale shall provide otherwise; or
(iii) a reorganization, merger or consolidation of the Company that results in the outstanding securities of any class then subject to the Option being exchanged for or converted into cash, property and/or securities not issued by the Company, unless the terms of such reorganization, merger or consolidation provide otherwise.
(a) If the Company and/or the Employer are obligated to withhold an amount on account of any federal, state or local tax imposed as a result of the exercise of the Option (collectively, “Taxes”), including, without limitation, any federal, state or other income tax, or any F.I.C.A., state disability insurance tax or other employment tax, then, concurrently with such exercise, the Employee shall pay to the Company, by check, the aggregate amount that the Company and the Employer are so obligated to withhold, as such amount shall be determined by the Company (the “Withholding Liability”); provided, however, that the Employee may instead,
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on or before the exercise of the Option, irrevocably elect to pay all or any part of the Withholding Liability by either of the following methods:
(i) pursuant to the Company’s cashless exercise program; or
(ii) by instructing the Company to withhold shares of Common Stock otherwise issuable upon such exercise of the Option (such withholding to be valued on the basis of the aggregate Fair Market Value of the withheld shares on the date of such exercise); and
provided that the Company is not then prohibited from purchasing or acquiring such shares of Common Stock, and provided, further, however, that if all of such payment is made by check and/or pursuant to the Company’s cashless exercise program, then the Employee shall be entitled, but not obligated, so to pay an amount that is greater than the Withholding Liability.
(b) The Employee acknowledges that neither the Company nor the Employer has made any representation or given any advice to the Employee with respect to Taxes.
(A) the aggregate Fair Market Value, determined as of the Option Exercise Date, of the shares of Common Stock issued upon such exercise; minus
(B) the aggregate exercise price paid, whether in cash or by the delivery or withholding of shares of Common Stock, upon such exercise.
(ii) Termination of All Options. All outstanding Options shall be terminated and forfeited.
(b) Triggering Events. The events referred to in Section 4(a) hereof are as follows:
(ii) Non-Solicitation of the Company’s Employees, Clients, and Prospective Clients. During the time of the Employee’s employment and for a period of 24 months thereafter, the Employee shall not, without the express, prior written consent of the Company’s General Counsel, engage in any of the conduct
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described in paragraphs (A) and (B) below, either directly or indirectly, individually or as an employee, agent, contractor, consultant, member, partner, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly held corporation) or in any other capacity for any person, firm, partnership or corporation:
(A) hire, attempt to hire or assist any other person or entity in hiring or attempting to hire any current employee of the Company or any person who was a Company employee within the 6-month period preceding such hiring or attempted hiring;
(B) solicit, divert or cause a reduction in the business or patronage of any Client or Prospective Client.
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that substantially all of the property and assets of the Company are sold, then, unless such event shall cause the Option to terminate pursuant to Section 2(e) hereof, the Committee shall make appropriate and proportionate adjustments in the number and type of shares or other securities or cash or other property that may thereafter be acquired upon the exercise of the Option; provided, however, that any such adjustments in the Option shall be made without changing the aggregate Exercise Price of the then unexercised portion of the Option.
(a) by registered or certified United States mail, postage prepaid, to DXC Technology Company, Attn: Corporate Secretary, 0000 Xxxxxx Xxxx, Xxxxxx, XX 00000; or
(b) by hand delivery or otherwise to DXC Technology Company, Attn: Corporate Secretary, 0000 Xxxxxx Xxxx, Xxxxxx, XX 00000.
Any notices provided for in this Agreement or in the Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the Company to the Employee, five days after deposit in the United States mail, postage prepaid, addressed to the Employee at the address specified at the end of this Agreement or at such other address as the Employee hereafter designates by written notice to the Company.
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12. Nature of Company Option Grants. The Employee acknowledges and agrees that:
(a) the Plan was established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;
(b) the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive any future Option grants, or any benefits in lieu of Options, even if the Employee has repeatedly received Option grants in the past;
(c) all decisions with respect to future grants of Options by the Company will be at the sole discretion of the Company;
(d) the Employee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee’s employment relationship at any time with or without Cause;
(e) the Employee is voluntarily participating in the Plan;
(f) in the event that the Employee is not an employee of the Company, the Option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the Option grant will not be interpreted to form an employment contract with the Employer or any Subsidiary of the Company;
(g) the future value of the underlying Option Shares is unknown and cannot be predicted with certainty;
(h) if the underlying Option Shares do not increase in value, the Option will have no value; and
(i) if the Employee exercises the Option, the value of the Option Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price;
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15. Governing Law; Consent to Jurisdiction. The Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, United States of America, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Agreement to the substantive law of another jurisdiction. Any action, suit or proceeding to enforce the terms and provisions of the Agreement, or to resolve any dispute or controversy arising under or in any way relating to the Agreement, may be brought in the state courts for the State of Nevada, United States of America, and the parties hereto hereby consent to the jurisdiction of such courts.
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EMPLOYEE | DXC TECHNOLOGY COMPANY | |||
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[Employee Name] | Name: | |||
Title: | ||||
The Employee acknowledges receipt of the Plan and a Prospectus relating to this award, and further acknowledges that he or she has reviewed this Agreement and the related documents and accepts the provisions thereof. | ||||
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[Employee Name] | ||||
ACCEPTANCE DATE |
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Appendix A
For purposes of this Agreement:
(a) “Applicable Restrictive Period” shall mean, with respect to each exercise of an Option, the period set forth in Section 4(b)(i), (ii) or (iii) hereof, respectively.
(b) “Cause” shall mean: (A) fraud, misappropriation, embezzlement or other act of material misconduct against the Company or any of its affiliates; (B) conviction of a felony involving a crime of moral turpitude; (C) willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of the Company; or (D) substantial and willful failure to render services in accordance with the terms of his or her employment (other than as a result of illness, accident or other physical or mental incapacity), provided that (X) a demand for performance of services has been delivered to the Employee in writing by the Employee’s supervisor at least 60 days prior to termination identifying the manner in which such supervisor believes that the Employee has failed to perform and (Y) the Employee has thereafter failed to remedy such failure to perform.
(c) “Client” means any client with respect to whom the Employee provided services, on behalf of whom the Employee transacted business, or with respect to whom the Employee possessed Confidential Information during the 12-month period preceding each of (i) the date the Employee engages in an act described in Section 4(b)(ii)(B) and (ii) the date of the termination of the Employee’s employment with the Company for any reason.
(d) “Competitor” means an individual, business or any other entity or enterprise engaged or having publicly announced its intent to engage in business that is substantially similar to the Company’s business. For purposes of this Agreement, the parties specifically agree that: the Company is engaged in the business of providing technology-enabled solutions and services; that the Company’s capabilities include, but are not limited to, system design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting; and that the Company actively solicits business and services clients located throughout the United States and the world. A non-exhaustive list of the Company’s Competitors includes Accenture, Automatic Data Processing (ADP), Inc., Cisco Systems, Inc., Cognizant Technology Solutions Corp., Hewlett Packard Enterprise Company, Intel Corp., International Business Machines (IBM) Corp., Oracle Corp., Texas Instruments, Inc., VMWare, Inc., Western Digital Corp., Xerox Corp., or any subsidiary or affiliate thereof.
(e) “Confidential Information” means all Company trade secrets, patents, copyrights, confidential or proprietary business information and data, sales and financial data, pricing information, manufacturing and distribution methods, information relating to the Company’s business plans and strategies including, but not limited to, customers and/or prospects, or lists thereof, marketing plans and procedures, research and development plans, methods of doing business, both technical and non-technical, information relating to the design, architecture, flowcharts, source or object code and documentation of any and all computer software products which the Company has developed, acquired or licensed or is in the process of developing, acquiring or licensing or shall develop, acquire or license in the future, hardware and database technologies or technological information, formulae, designs, process and systems information, intellectual property rights, and any other confidential or proprietary information which relates to the business of the Company or to the business of any client or vendor of the Company or any other party with whom the Company agrees to hold
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information in confidence, whether patentable, copyrightable or protectable as trade secrets or not. Confidential Information does not include information which is (i) already known by the Employee without an obligation of confidentiality, (ii) publicly known or becomes publicly known through no unauthorized act of the Employee, (iii) rightfully received from a third party without an obligation of confidentiality, (iv) disclosed without similar restrictions by the Company to a third party (other than an affiliate or customer of the Company), or (v) approved by the Company, in writing, for disclosure.
(f) “Employer” shall mean the Employee’s employer.
(g) “Option Exercise Date” shall mean, with respect to each exercise of an Option, the date upon which such Option is exercised.
(h) “Prospective Client” means any individual or enterprise who is not a Client but with whom the Company was in active business discussions or negotiations at any time during either (i) the date the Employee engages in an act described in Section 4(b)(ii)(B) or (ii) the 12-month period preceding the termination of the Employee’s employment with the Company for any reason and in each case whose identity became known to the Employee in connection with the Employee’s relationship with or employment by the Company.
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Appendix B
1. Data Privacy.
(a) In order to implement, administer, manage and account for the Employee’s participation in the Plan, the Company and/or the Employer may:
(i) collect and use certain personal data regarding the Employee, including, without limitation, the Employee’s name, home address and telephone number, work address and telephone number, work e-mail address, date of birth, social insurance or other identification number, term of employment, employment status, salary, nationality and tax residence, and any details regarding the terms and conditions, grant, vesting, exercise, cancellation, termination and expiration of all stock options and other stock based incentives granted, awarded or sold to the Employee by the Company (collectively, the “Data”);
(ii) transfer the Data to any third parties who may be involved in the implementation, administration and/or management of the Plan, which recipients may be located in the Employee’s country or in other countries that may have different data privacy laws and protections than the Employee’s country;
(iii) transfer the Data to a broker or other third party with whom the Employee has elected to deposit any Option Shares acquired upon exercise of the Option; and
(iv) retain the Data for only as long as may be necessary in order to implement, administer, manage and account for the Employee’s participation in the Plan.
(b) The Employee hereby explicitly and unambiguously consents to the collection, use, transfer and retention of the Data, as described in this Agreement, in electronic or other form, for the exclusive purpose of implementing, administering, managing and accounting for the Employee’s participation in the Plan.
(c) The Employee understands that by contacting his or her local human resources representative, the Employee may:
(i) | view the Data; |
(ii) | correct any inaccurate information included within the Data; |
(iii) | request additional information regarding the storage and processing of the Data; and |
(iv) | request a list with the names and addresses of any potential recipients of the Data. |
(d) The Employee understands that he or she may refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. The Employee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan. For more information on the consequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative.
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