KEYSTAFF DEFERRAL PLAN OF SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
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KEYSTAFF DEFERRAL PLAN
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
(Effective January 1, 1997)
KEYSTAFF DEFERRAL PLAN
OF
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
- 1.
- Purpose
- 1.1
- The
purpose of this Plan is to provide a means to enhance the Company's capacity to attract and retain outstanding directors and executives in key positions by assisting them in
meeting their future financial security objectives.
- 2.
- Definitions
- 2.1
- Whenever
the following terms are used in this document and the attached Plan Agreement, they shall have the meaning specified below.
- 2.2
- "Deferral Account" shall mean a bookkeeping account established by the Company for each Participant, in which shall be recorded the amounts deferred in accordance with this Plan and the attached Agreement. The Company shall credit to each Participant's Deferral Account an amount equal to the compensation which otherwise would have been paid had the Participant not elected to defer compensation. Such credits shall be made at the time compensation would have been paid to the Participant. The Deferral Account shall also receive quarterly earnings credits in accordance with provisions of Section 5.
- 2.3
- "Anniversary
Date" shall be the last day of a Plan Year.
- 2.4
- "Beneficiary"
shall mean the person or persons, or the estate of a Participant, entitled to receive any benefits under this Plan upon the death of a Participant.
- 2.5
- "Ceiling Excess Earnings" shall mean, for each Pre-1991 Deferral Account, the difference between the Participant's Pre-1991 Deferral Account if interest had been credited at a rate of Moody's plus 5% in each Plan Year and the Participant's actual current Pre-1991 Deferral Account.
Separate Deferral Accounts shall be established to record amounts deferred (and earnings credits thereon) with respect to Plan Years beginning before and after December 31, 1990, to be referred to herein as Pre-1991 Deferral Accounts and Post-1990 Deferral Accounts, respectively. Except as otherwise stated herein, references to Deferral Account(s) shall include both the Pre-1991 and Post-1990 Deferral Account(s).
- 2.6
- "Commitment
Period" shall mean that period of time beginning with the subsequent Plan Year and extending for a number of Plan Years as determined from time to time by the Committee.
- 2.7
- "Covered
Compensation" shall mean a Director's compensation, as a Director of the Company, excluding expenses reimbursed, or an Executive's merit bonus in each Plan Year. The
Committee, in its sole discretion, shall determine what constitutes a merit bonus.
- 2.8
- "Committee"
shall mean the administrative Committee appointed to manage and administer the Plan in accordance with the provisions of this Plan.
- 2.9
- "Company" shall mean SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, its subsidiaries, or any successor.
A separate calculation of Ceiling Excess Earnings shall be made with respect to post-1990 Deferral Account(s) using a rate of Moody's plus 3%.
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- 2.10
- "Director"
shall mean any person not in regular full-time employment of the Company serving on the Board of Directors of Science Applications International Corporation or
any subsidiary or affiliate of Science Applications International Corporation.
- 2.11
- "Early
Retirement Date" shall mean the date that the Participant attains his or her fifty-fifth (55th) birthday.
- 2.12
- "Effective
Date" shall be January 1, 1986.
- 2.13
- "Employer"
shall mean the Company and any subsidiary having one or more employees who are eligible to participate in the Plan and have been selected by the Committee to participate.
Where the context dictates, the term "Employer" as used herein refers to the particular Employer which has entered into a Plan Agreement with a specific Participant.
- 2.14
- "Executive"
shall mean any person in the employment of the Company who is determined by the Committee to be serving in an executive capacity, excluding those persons meeting the
definition set forth in Section 2.10.
- 2.15
- "Master
Plan Document" is this legal instrument containing the provisions of the Plan.
- 2.16
- "Moody's
Seasoned Corporate Bond Rate," sometimes referred to as "Xxxxx'x," is an economic indicator; an arithmetic average of yields of representative bonds: industrials, public
utilities, AAA, AA, A and BAA. For Plan purposes, Moody's Rate shall be determined by the Committee based on financial services or publications selected by the Committee.
- 2.17
- "Normal
Retirement Date" shall mean the date that the Participant attains his or her sixty-fifth (65th) birthday.
- 2.18
- "Participant"
shall mean any Executive or Director who elects to participate in the Keystaff Deferral Plan, signs a Plan Agreement, and is accepted into the Plan.
- 2.19
- "Plan"
shall mean the Keystaff Deferral Plan of the Employer which shall be evidenced by this instrument and by each Plan Agreement.
- 2.20
- "Plan
Agreement" shall mean the written agreement(s) entered into from time to time by and between an Employer and a Participant. A separate Plan Agreement shall be entered into with
respect to the Pre-1991 Deferral Account and Post-1990 Deferral Account of a Participant.
- 2.21
- "Plan
Year" shall begin on February 1 of each year. The Plan Year which commenced January 1, 2000 shall end on January 31, 2001 and thereafter shall be the
period from February 1 to January 31.
- 2.22
- "Retirement"
and "Retire" shall mean severance from employment with the Employer at or after the attainment of (i) age fifty-five (55) and ten
(10) years of Plan participation or (ii) age sixty-five (65). The Committee shall have the sole discretion to determine whether Retirement has occurred in the case of an
Executive who becomes a consulting employee or who continues to be affiliated with the Company as a consultant or under some other status.
- 2.23
- "Termination of Employment" shall mean cessation of regular employment, voluntarily or involuntarily, but excluding Retirement or death, as determined by the Committee in its sole discretion. In the case of a Director, "Termination of Employment" shall mean the Director's ceasing to be a Director of the Company. The Committee shall have the sole discretion to determine (i) whether a change in status (e.g., from employee to consultant, from employee to consulting employee, or from director to employee, consulting employee or consultant) shall be considered a Termination of Employment, (ii) whether a leave of absence shall be
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considered a Termination of Employment, and (iii) when a consultant or consulting employee will be considered to have a Termination of Employment.
- 3.
- Eligibility
- 3.1
- The
Committee will determine which Executives and Directors of the Company are eligible to participate in the Plan.
- 4.
- Deferral
Commitments
- 4.1
- Deferral Elections
- 4.2
- Changes
to Deferral Elections
- 4.2.1
- The
maximum allowable total deferral of Covered Compensation for all Participants under this Plan for any Plan Year will be determined by the Committee. In the event that
Participant deferral elections are estimated to result in this maximum being exceeded, the following method will be used to reduce Participant deferral percentages so that the total estimated deferral
is less than the maximum allowable.
- a)
- All
Executives who have elected to defer more than 50% of Covered Compensation will be reduced, on an equal percentage basis, but not below 50% of Covered Compensation or $5,000,
whichever is greater.
- b)
- If
after implementation of subsection (a) above, the total deferral is still greater than the maximum allowable total deferral, all Executives' percentage deferrals will be
reduced on an equal percentage basis until the maximum allowable total deferral is achieved.
- 4.2.2
- Any
Deferral election by a Participant shall be irrevocable for that Plan Year following the end of such Plan Year's Deferral election period.
- 4.2.3
- The
Committee, in its sole discretion, may elect to terminate the Plan at any time pursuant to Section 9; in such event, deferrals will cease effective as of the termination
date.
- 4.3
- Rollover
of Balances from Current Deferred Compensation Plan
- 4.3.1
- Participants who hold a balance in the Company's current Deferred Compensation Plan may elect to transfer that balance on a bookkeeping basis into this Plan at the beginning of the first Plan Year.
An eligible Executive or Director shall not become a Participant in the Plan unless and until he or she has executed and delivered to the Committee a Deferral election, including any forms or agreements as may be prescribed by the Committee, and the Committee shall have accepted such Deferral election and/or additional forms or agreements. To initially participate in the Plan, the Executive or Director must submit his or her Deferral election, including any forms or agreements prescribed by the Committee, during the applicable Deferral election period established by the Committee. Beginning with the deferral election made in the Plan Year ending January 31, 2004 for deferrals of Covered Compensation during calendar year 2004, the Participant's election shall be carried forward automatically to future Plan Years for which the Participant is eligible to participate unless, during the applicable election period for such future Plan Years, the Participant elects to modify or cancel the prior election under procedures established by the Committee.
Participants may elect to defer up to 100% but not less than 10% of Covered Compensation, in whole percentages, but not less than $1,000 (before reductions, if any, under Section 4.2.1).
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- 5.
- Earnings
on Participants' Accounts
- 5.1
- Base
Earnings on Deferral
- 5.1.1
- Covered
Compensation deferred by a Participant shall be credited to the Participant's Deferral Account as of the date of deferral. Interest in each Plan Year will be credited
quarterly on the average Deferral Account balance for that quarter. The rate of interest applied to the Pre-1991 Deferral Account shall be at a base rate equivalent to an annual rate equal
to Moody's Rate, and the rate applicable to the Post-1990 Deferral Account shall be at a base rate equivalent to an annual rate equal to the Moody's Rate less 1%. In each case, the Moody's
Rate in effect on each Anniversary Date shall be used to determine the applicable rate of interest applied during the subsequent Plan Year.
- 5.2
- Earnings
on Rollover Balances
- 5.2.1
- The
portion of a Participant's Pre-1991 Deferral Account resulting from the transfer of a balance from the Company's current Deferred Compensation Plan will be credited
quarterly with a rate of interest equivalent to 60% of the interest rate announced by Bank of America as its "prime rate" on the previous Anniversary Date for the first four (4) Plan Years.
After the fourth Plan Anniversary Date, this portion of the Pre-1991 Deferral Account will be credited with interest quarterly at an effective annual rate equal to Moody's Rate plus 9%
until the cumulative interest equals that amount of interest which would have been credited assuming that Moody's Rate had been used since Plan inception. At that time, the distinction between
portions of the Pre-1991 Deferral Account from deferrals and from transfers will cease to exist.
- 5.3
- Additional
Earnings
- 5.3.1
- The
Committee may, in its sole discretion, determine whether and in what amount additional earnings shall be allocated to Participants' Deferral Accounts. Additional earnings in any
Plan Year, if any, as determined by the Committee, will be allocated to each Participant's Deferral Account (except as otherwise provided in Section 6.1.3 and except for Deferral Accounts of
Participants who have had a Termination of Employment prior to ten years of participation in the Plan) by the ratio of the Participant's Ceiling Excess Earnings to the sum of all Participants' Ceiling
Excess Earnings as of the end of the Plan Year, with such additional earnings and Ceiling Excess Earnings calculated separately for Pre-1991 and Post-1990 Deferral Accounts.
- 6.
- Payout
of Participants' Accounts
- 6.1
- Hardship
- 6.1.1
- Notwithstanding
the provisions of Sections 6.2 and 6.4 hereof, a Participant shall be entitled to request a hardship distribution of all or any portion of his or her Deferral
Account(s). A Participant or legal representative of the Participant must make a written request for a hardship distribution, stating the reasons such withdrawal is necessary because of a financial
hardship. The Committee, in its sole discretion, shall determine whether or not to grant the hardship distribution of such Participant's Deferral Account(s) and, in so doing, may rely on the
Participant's statements, and a hardship distribution may be approved without further investigation unless the Committee has reason to believe such statements are false.
- 6.2
- Termination
Payouts
- 6.2.1
- A Participant who has a Termination of Employment prior to one year of Plan Participation shall receive an amount equal to his or her Deferral Account, less any
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- 6.2.2
- A
Participant who has a Termination of Employment after one year of Plan Participation but prior to 10 years of Plan participation shall receive payment in a lump sum within
twelve months following Termination of Employment equal to his or her Deferral Account(s) as of the most recent quarterly valuation.
- 6.2.3
- A
Participant who has a Termination of Employment after 10 years of Plan participation shall be subject and entitled to the Normal Payout provisions set forth in
Section 6.4.
- 6.3
- Survivor
Payouts
- 6.3.1
- If
a Participant dies before Normal Payout commences and the Plan Agreement is in effect at the time of death, the Employer shall make a Survivor Payout, as defined in
Section 6.3.2, to the designated Beneficiary.
- 6.3.2
- The
Survivor Payout shall consist of the Participant's Deferral Account(s) at the time of death.
- 6.3.3
- The
Survivor Payout shall be paid in a lump sum to the Beneficiary within twelve months following verification of the Participant's death.
- 6.3.4
- Notwithstanding
subsection 6.3.3 above, a Participant may elect on the Beneficiary form provided by the Committee that the Survivor Payout be made over a 20-,
40-, or 60-quarter period rather than as a lump sum.
- 6.4
- Normal
Payouts
- 6.4.1
- Normal
Payouts shall commence at age sixty-five (65), Retirement or ten (10) years of Plan participation, whichever is the latest to occur.
- 6.4.2
- A
Participant who Retires may request that Normal Payout commence upon such Retirement. The Committee in its sole discretion may grant such request in the event that the Participant
demonstrates financial need and the cash flow of the Company permits such early commencement.
- 6.4.3
- The
Participant shall elect to receive the Normal Payout over a 20-, 40- or 60-quarter period. The first payment will commence within
90 days of the quarter end following Retirement.
- 6.4.4
- If
a Participant does not elect a payout option, the payments shall be over a 20-quarter period.
- 6.4.5
- Normal
Payout shall consist of the Participant's Deferral Account(s) spread equally over the elected payout period. Earnings, and additional earnings, if applicable, as provided in
Subsection 5.3.1, shall continue to be credited to the remaining Deferral Account(s) during the payout period and shall be estimated so that approximately equal payments can be made.
- 6.4.6
- If
a Participant dies during the Normal Payout period, Normal Payout shall continue as scheduled to the Participant's Beneficiary.
- 6.4.7
- The
election provided in Section 6.4.3 shall be made during the initial Commitment Period of Plan participation and shall become irrevocable at the end of such period.
- 6.5
- Payment for Notification of Death
credited earnings. Payment shall be made in a lump sum within twelve months following Termination of Employment.
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- 6.5.1
- If
a Participant dies following either Retirement or Termination of Employment, the Company will pay a $5,000 notification payment of a lump sum to the Participant's Beneficiary
within 90 days of the quarter end following verification of the Participant's death.
- 7.
- Beneficiary
Designation
- 7.1
- Upon
forms provided by the Committee, each Participant shall designate in writing the Beneficiary or Beneficiaries whom such Participant desires to receive the benefits of this Plan,
payable under Sections 6.3, 6.4 and/or 6.5, in the event of such Participant's death.
- 7.2
- A
Participant may from time to time change his or her designated Beneficiary or Beneficiaries without the consent of such Beneficiary or Beneficiaries by filing a new designation in
writing with the Committee.
- 7.3
- If
a married Participant wishes to designate an individual other than his or her spouse as Beneficiary, such designation shall not be effective (i.e., the surviving spouse shall be
treated as the sole Beneficiary) unless consented to in writing by the spouse, which consent shall acknowledge the effect of the designation and be witnessed by a member of the Committee (or an
individual designated by the Committee) or acknowledged before a notary public. Notwithstanding the foregoing, spousal consent shall not be necessary if it is established to the satisfaction of the
Committee that there is no spouse of the Participant or that the required consent cannot be obtained because the spouse cannot be located. The Company may rely upon the designation of Beneficiary or
Beneficiaries last filed by the Participant in accordance with the terms of this Plan.
- 7.4
- If
the designated Beneficiary does not survive the Participant, or if there is no valid Beneficiary designation, amounts payable under the Plan shall be paid to the Participant's
spouse, or if there is no surviving spouse, then to the duly appointed and currently acting personal representative of the Participant's estate. If there is no personal representative of the
Participant's estate duly appointed and acting in that capacity within 60 days after the Participant's death, then all payments due under the Plan shall be payable to the person or persons who
can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder pursuant to the laws of intestate succession or
other statutory provisions in effect at the Participant's death in the state in which the Participant resided.
- 7.5
- In
the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid to that person's then living parent(s) to act as
custodian, or, if no parent of that person is living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers to Minors Act, or similar law, in effect in
the jurisdiction in which the minor resides.
- 8.
- Acceleration
Provisions
- 8.1
- Notwithstanding the provisions of Section 6 hereof, a Participant shall be entitled to request a hardship withdrawal of all or any portion of their Deferral Account or acceleration of payments of their Deferral Account if payments have already commenced under the payout option selected by the Participant. A Participant must make a written request to the Committee for a hardship withdrawal or request for accelerated payment, stating the reasons such withdrawal or acceleration is necessary because of a financial hardship. The Committee, in its sole discretion, shall determine whether or not to grant the Participant's request and, in so doing, may rely on the Participant's statements, and a hardship withdrawal or accelerated payment may be approved without further investigation unless the Committee has reason to believe such statements are false.
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- 8.2
- The
Committee, acting in its sole discretion, may determine to accelerate, in whole or in part, payments of some or all Deferral Account(s) (including Deferral Account(s) as to which
payments have not yet commenced) in the event of a threatened or actual change in control of the Company, or in the event that a change in the legal, accounting, or tax treatment of amounts deferred
under the Plan are altered in a manner which would potentially subject the Company, the Participants, or both, to adverse tax or administrative burdens.
The Participant shall specify from which of their Deferral Account(s) (i.e., Pre-1991 or Post-1990, or both) the hardship withdrawal shall be taken.
- 9.
- Amendment
and Termination of Plan
- 9.1
- The
Company may, at its absolute and sole discretion, amend or terminate the Plan at any time.
- 9.2
- In
the event of Company-initiated Plan termination, Participants' entire Deferral Account(s), including credited interest, will be paid to Participants within twelve months of the
quarter end following Plan termination.
- 10.
- Nature
of Accounts
- 10.1
- All amounts credited to the Deferral Account(s) shall remain the sole property of the Company and shall be usable by it as part of its general funds for any legal purpose whatsoever. The Deferral Account(s) shall exist only as bookkeeping entries for the purpose of facilitating the computation of earnings credits hereunder and such Deferral Account(s) shall not constitute trust funds, escrow accounts, or any other form of asset segregation in favor of anyone other than the Company. No participant shall have any interest in any specific asset of the Company by virtue of this Plan and each Participant's rights under this Plan shall at all times be limited to those of a general unsecured creditor of the Company.
Although sometimes referred to in this Plan as "interest," amounts credited to Deferral Account(s) pursuant to Section 5.1, 5.2 and 5.3 may be treated as compensation for tax and payroll withholding purposes, pursuant to applicable Internal Revenue Code and Treasury regulation requirements.
- 11.
- Limitation
on Rights of Participants
- 11.1
- If
a Participant is an employee of the Company, such employment is not for any specific term and may be terminated by the Participant or Company at any time, for any reason, with or
without cause. Neither this Plan nor any election to defer compensation hereunder shall be held or construed to confer on any person any legal right to be continued as an employee, consultant or
Director of the Company; nor to constitute any promise or commitment by the Company regarding future positions, future work assignments, future compensation or any other term or condition of
employment or affiliation.
- 12.
- Non-Transferability
- 12.1
- No
right to payment under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge and any attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge the same shall be void. No right to payment shall in any manner be liable for, or subject to, the debts, contracts, liabilities or torts of the person entitled
thereto.
- 13.
- Restriction
Against Assignment
- 13.1
- The Participant or Beneficiary shall not have the power to transfer, assign, anticipate, modify, or otherwise encumber in any manner whatsoever any of the payments that will become due
7
pursuant to this Plan, nor shall said payments be subject to attachment, garnishment or execution, or be transferable by operation of law in event of bankruptcy or insolvency.
- 14.
- Binding
Effect
- 14.1
- The
Plan Agreement or Agreements attached hereto, when executed, is/are solely between the Company and the Participant. The Participant and any Beneficiary shall have recourse only
against the Company for its enforcement, and any Plan Agreement shall be binding upon the Beneficiary, heirs, and personal representative of the Participant and upon the successors and assigns of the
Company.
- 15.
- Settlement
of Disputes
- 15.1
- If
any disputes arise with regard to the interpretation of any of the provisions of this Plan or with regard to the amount of any payments due under this Plan and the Agreement, the
Committee shall make any resolution of such disputes which it deems, in its sole discretion, to be in the best interest of the Company and the Participants. Any such determinations made by the
Committee shall be final and binding on all Participants in the Plan.
- 15.2
- The
Committee shall adopt procedures, consistent with Section 503 of the Employee Retirement Income Security Act of 1974, with respect to notice to Participants of claims
denied under the Plan and review of denied claims.
- 16.
- Administration
- 16.1
- The
Plan shall be administered by the Committee, as appointed by the Board of Directors of the Company.
- 17.
- Forfeiture
Any payment due to a Participant hereunder which is not claimed by the Participant, his or her Beneficiary, his or her estate or other person legally entitled thereto within four years after becoming payable shall be forfeited and canceled and shall remain with the Company and no other person shall have any right thereto or interest therein. The Company shall have no duty under this Agreement to give notice to any person other than the Participant or his or her designated Beneficiary that amounts are payable hereunder.
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Exhibit 10(f)
KEYSTAFF DEFERRAL PLAN SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (Effective January 1, 1997)
KEYSTAFF DEFERRAL PLAN OF SCIENCE APPLICATIONS INTERNATIONAL CORPORATION