RETIREMENT AGREEMENT
EXHIBIT
10.1
This
Retirement Agreement (this “Agreement”) is made and entered into as of the 21st
day of May, 2007, by and between Computer Sciences Corporation (the “Company”),
and Van X. Xxxxxxxxx (“Executive”).
WHEREAS,
Executive and the Company are parties to that certain Employment Agreement,
dated as of May 1, 1999, as amended (the “Employment Agreement”);
and
WHEREAS,
Executive and the Company mutually desire, neither party being under any
compulsion or obligation to enter into this Agreement, to provide for
Executive’s retirement from service with Company on the terms and conditions set
forth herein;
NOW,
THEREFORE, in consideration of the mutual promises and agreements herein, it
is
hereby agreed as follows:
1. Retirement.
Effective as of May 21, 2007, Executive hereby resigns from his position as
Chief Executive Officer of the Company and from all of his positions as a
director, officer or employee with any of the Company’s subsidiaries and
affiliates; provided, however, that Executive shall continue to serve in his
current position as an employee of the Company and as a member and Chairman
of
the Company’s Board of Directors (the “Board”) until July 30, 2007 (the
“Retirement Date”). Effective as of July 30, 2007, Executive hereby resigns from
his position as an employee of the Company and as a member and Chairman of
the
Board.
2. Consulting
Term.
Commencing July 31, 2007 and continuing until July 30, 2008 (the “Consulting
Term”), Executive shall serve as a consultant to the Company and render those
services reasonably
requested by the Company’s Chief Executive Officer or the Board on an as-needed
basis.
3. Final
Wages; Vacation Pay; Expense Reimbursement.
In
connection with Executive’s retirement from employment with the Company, the
Company shall provide Executive with the following:
(a) a
lump
sum cash payment in an amount equal to any salary earned, but unpaid, through
and including the Retirement Date, payable as soon as practicable following
the
Retirement Date;
(b) a
lump
sum cash payment in an amount equal to the annual bonus earned by Executive
under the FY2007 Annual Management Incentive Plan 1 (determined in accordance
with the terms of such plan), payable at the time annual bonuses are paid under
the plan to other Company executives;
(c) a
lump
sum cash payment in an amount equal to the value of Executive’s accrued and
unused vacation time and other paid time off as of the Retirement Date, payable
as soon as practicable following the Retirement Date;
(d) all
accrued, vested and unpaid benefits under any of the following: the Computer
Sciences Corporation Supplemental Executive Retirement Plan (the “SERP”), the
Computer Sciences Corporation Deferred Compensation Plan, the Computer Sciences
Corporation Employee Pension Plan and any other tax-qualified retirement plan
in
which Executive participates, payable, in each case, in accordance with the
applicable terms and conditions of such plans; and
(e) reimbursement
for any properly incurred business expenses pursuant to the Company’s expense
reimbursement policy.
4. Separation
Benefits.
(a)
Pursuant to the terms and conditions of the Employment Agreement, the Company
has agreed to provide Executive with the following separation benefits, in
each
case, so long as Executive executes this Agreement and does not exercise his
right to revoke this Agreement pursuant to the terms of Section 15
hereof:
(i) A
lump
sum cash payment in the amount of $11,161,256, payable on January 31,
2008.
(ii) Continued
coverage under the Company’s life insurance plan, or substantially equivalent
coverage through other sources, until December
3,
2009,
with the full after-tax cost of such coverage to be borne by the
Company.
(iii) Continued
coverage under the Company’s medical plans (including participation by
Executive’s covered dependents) until December 3, 2009, with the full after-tax
cost of such coverage to be borne by the Company.
(b) In
addition, the Company has agreed to provide Executive with the following
additional separation benefits, in each case, so long as Executive executes
this
Agreement and does not exercise his right to revoke this Agreement pursuant
to
the terms of Section 15 hereof:
(i) Continuation
of the security services currently provided to Executive until December 3,
2009,
with the full after-tax cost of such services to be borne by the
Company.
(ii) Use
of
office space and continued information technology support, secretarial support,
and telephone service until December 3, 2009.
5. Treatment
Of Equity Awards.
Pursuant to the terms and conditions governing Executive’s outstanding stock
option, restricted stock and restricted stock unit awards (collectively, the
“Equity Awards”), effective immediately prior to Executive’s resignation from
employment with the Company, Executive shall become immediately and fully vested
with respect to all of the Equity Awards. In addition, pursuant to the terms
and
conditions governing Executive’s outstanding stock options, and subject to his
continued compliance with such terms and conditions, each of Executive’s
outstanding stock options shall remain exercisable until the earlier of the
option’s stated expiration date or July 30, 2012.
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6. Compensation
During Consulting Term.
During
the Consulting Term, as
full
compensation for any consulting services provided by Executive to the Company,
Executive shall be paid a consulting fee, payable in accordance with the
Company’s regular payroll schedule, at a rate of $500,000 per year. In addition,
the
Company shall reimburse Executive for any costs or expenses reasonably incurred
in connection with the services provided by Executive to the Company during
the
Consulting Term.
7. No
Other Compensation.
Executive agrees and acknowledges that he is and will not be entitled to any
compensation and/or benefits from the Company in respect of his services as
an
employee and/or consultant, or the termination thereof, other than those items
specifically provided for under Sections 3-6 of this Agreement.
8. Cooperation.
Executive shall provide Executive’s reasonable cooperation in connection with
any action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment with the Company;
provided that the
Company reimburses Executive for any costs or expenses reasonably incurred
in
connection with such cooperation.
The
Company agrees to continue to assist Executive with the filing of any reports
required under Section 16(a) of the Securities Exchange Act of 1934, as amended.
The Company further agrees to provide Executive access to documents he might
reasonably need in connection with his involvement in any litigation or
investigation arising out of events occurring during his employment with the
Company.
9. Directors’
and Officers’ Liability Insurance.
For a
period of six years following the Retirement Date, the Company shall provide
Executive with continued coverage under the Company’s Directors’ and Officers’
liability insurance policy. The Company agrees that nothing herein shall limit
any right Executive may have to indemnification from the Company.
10. Confidential
Information and Trade Secrets.
(a) Executive
acknowledges that the term “Confidential Information” as used in this Agreement
means all items, materials and information (whether or not reduced to writing
and whether or not patentable or copyrightable) which belong to the Company
or
which the Company’s suppliers or customers or clients have communicated to the
Company in the course of the Company’s business, and which reflect, consist of
or refer to:
(i) information
technology; methods and processes; designs and formulations; the content or
composition of goods or services; techniques; business strategies or operations;
formulas; compilations of data or reports; plans; tools or equipment;
inventions; know-how; technical disclosures, patent applications, blueprints
or
specifications; financial, marketing, sales, personnel or salary information;
forms, legal documents or memoranda; software, computer programs or databases;
any documents prepared by or on behalf of the Company or Company suppliers,
customers or clients;
(ii) information
compiled, collected or developed by the Company reflecting the identities of
those customers and clients of the Company which are not generally known outside
the Company or whose relationship with the Company as a customer or client
is
not generally known outside the Company; characteristics of any customers or
clients of the Company or of customer or client representatives, including
without limitation product or service preferences or requirements, cost or
price
information for goods or services offered or sold, credit terms or credit
performance, actual or likely order cycles, the nature of goods delivered or
services performed, or research or development plans or activities;
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(iii) information
compiled, collected, or developed by the Company reflecting identities of any
suppliers of the Company which are not generally known outside the Company
or
whose relationship with the Company as a supplier is not generally known outside
the Company; characteristics of any supplier of the Company, or supplier
representatives, including without limitation cost or price information for
goods or services offered or purchased, audit terms, the nature of goods
delivered or service performed, product or service quality and reliability,
delivery terms, or research or development plans or activities;
(iv) prices,
fees, discounts, selling techniques or distribution methods used by the Company;
or
(v) any
other
confidential or proprietary information obtained directly or indirectly while
employed by or serving as a consultant to the Company.
(b) Executive
acknowledges that the term “Trade Secret” as used in this Agreement means the
whole or any portion or phrase of any scientific or technical or business
information, including, but not limited to, any design, process, procedure
or
system, formula, improvement, or invention that (i) derives independent
economic value, actual or potential, from not being generally known to the
public or to other persons who can obtain economic value from its disclosure
or
use, and (ii) is the subject of the Company’s reasonable efforts to
maintain its secrecy. In addition to information belonging to the Company,
information furnished to the Company by other parties can be a Trade
Secret.
(c) The
term
“Confidential Information” includes information which may also be a Trade
Secret, but does not include anything described above which is now generally
known by parties other than the Company, its affiliates and employees, or
becomes generally known, through no breach of this Section 9 on the part of
Executive.
(d) Executive
acknowledges that Confidential Information is and remains confidential
regardless of whether or not any Company report or form or other document
contains any statement regarding confidentiality.
(e) Executive
agrees to hold all Confidential Information in confidence and to not use
directly or indirectly, for Executive’s own benefit or the benefit of any other
party, corporate or otherwise, or publish or cause to be published or otherwise
disclose to anyone other than the Company or its designee, any Confidential
Information or Trade Secrets except as compelled by law.
(f) On
the
Retirement Date, Executive will surrender to the Company any and all documents,
including without limitation computer memory, reports and forms containing
Confidential Information and any and all other business records, prototypes
and
materials which Executive may have created or received from the Company during
Executive’s employment, or which pertain to the Company’s business, and all
copies thereof, which are in Executive’s possession or control at the time of
the demand or the termination of Executive’s employment, however made or
obtained, except to the extent such materials are reasonably necessary for
Executive’s performance of the consulting services during the Consulting Term
(in which case all such materials will be surrendered to the Company on the
date
the Consulting Term ends). Notwithstanding anything in this Section 10(f) to
the
contrary, Executive shall be entitled to retain his Company-provided computer;
provided that the Company verifies the removal from the computer of all
Confidential Information and other items described in this Section
10(f).
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11. No
Solicitation.
For a
period of two years immediately following the Retirement Date, Executive agrees
to honor the following representations: (a) Executive shall not induce, or
aid others to induce, any Company employee to terminate his or her employment
or
do anything which violates any oral or written employment agreement he or she
may have with the Company, (b) in recognition of the status of information
regarding compensation and other personnel information of Company employees
as
Confidential Information, Executive shall not solicit or aid others to solicit
Company employees for, or offer to them, competitive employment, and
(c) Executive agrees not to interfere with the business of the Company in
any manner including, without limitation, inducing any consultant or independent
contractor or customer or client of the Company to sever or diminish that
person’s or entity’s relationship with the Company.
12. Mediation;
Arbitration.
(a) 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
Executive’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 parties hereto agree to first attempt to resolve such
dispute through mediation; provided, however, that before any such mediation
regarding a breach of this Agreement, the complaining party shall give the
other
party notice of such alleged breach and a reasonable opportunity to cure. In
the
event that any such dispute cannot be resolved through mediation, 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. In
the
event of such 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 California
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 to Executive under this Agreement and prompt
provision of all benefits to which Executive is otherwise entitled.
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(b) Costs
of
arbitration shall be borne by the Company. Reasonable attorney fees and costs
and the reasonable fees and costs of any experts incurred by Executive shall
be
borne and paid by the Company if Executive prevails on any portion of his
claims. Such fees and costs incurred by Executive 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 Executive to repay such amounts net of any
income taxes paid or payable by Executive with respect to such amounts, if
it is
ultimately determined that he did not prevail on any portion of his claims.
(c) Notwithstanding
the foregoing provisions of this Section 12, Executive and the Company agree
that Executive 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.
13. Acknowledgment
Of Consideration.
Executive acknowledges the receipt of significant retirement benefits set forth
herein as consideration for entering into this Agreement.
14. General
Release Of Claims.
(a) Executive
hereby irrevocably, fully and finally releases the Company, its parent,
subsidiaries, affiliates, directors, officers, agents and employees
(“Releasees”) from all causes of action, claims, suits, demands or other
obligations or liabilities, whether known or unknown, suspected or unsuspected,
that Executive ever had or now has as of the time that Executive signs this
Agreement which relate to his hiring, his employment with the Company, the
termination of his employment with the Company and claims asserted in
shareholder derivative actions or shareholder class actions against the Company
and its officers and Board, to the extent those derivative or class actions
relate to the period during which Executive was employed by the Company. The
claims released include, but are not limited to, any claims arising from or
related to Executive’s employment with the Company, such as claims arising under
(as amended) Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of
1991, the Age Discrimination in Employment Act of 1974, the Americans with
Disabilities Act, the Equal Pay Act, the Fair Labor Standards Act, the
California Fair Employment and Housing Act, the California Labor Code, the
Employee Retirement Income and Security Act of 1974 (except for any vested
right
Executive has to benefits under an ERISA plan), the state and federal Worker
Adjustment and Retraining Notification Act, and the California Business and
Professions Code; any other local, state, federal, or foreign law governing
employment; and the common law of contract and tort. In no event, however,
shall
any claims, causes of action, suits, demands or other obligations or liabilities
be released pursuant to the foregoing if and to the extent they relate to:
(i) any
amounts or benefits to which Executive is or becomes entitled to pursuant to
the
provisions of this Agreement;
6
(ii) claims
for workers’ compensation benefits under any of the Company’s workers’
compensation insurance policies or funds;
(iii) claims
related to Executive’s COBRA rights; and
(iv) claims
for indemnification to which Executive is or may become entitled.
(b) Executive
represents and warrants that he has not filed any claim, charge or complaint
against any of the Releasees.
(c) Executive
acknowledges that the payments provided in this Agreement constitute adequate
consideration for the release set forth in this Section 14.
(d) Executive
intends that this release of claims cover all claims, whether or not known
to
Executive. Executive further recognizes the risk that, subsequent to the
execution of this Agreement, Executive may incur loss, damage or injury which
Executive attributes to the claims encompassed by this release. Executive
expressly assumes this risk by signing this Agreement and voluntarily and
specifically waives any rights conferred by California Civil Code section 1542
which provides as follows:
A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his or her favor which if known by him or her must have materially
affected his or her settlement with the debtor.
(e) Executive
represents and warrants that there has been no assignment or other transfer
of
any interest in any claim by Executive that is covered by this release.
15. Review
Of Agreement; Revocation Of Acceptance.
Executive has been given at least 21 days in which to review and consider this
Agreement, although Executive is free to accept this Agreement anytime within
that 21-day period. Executive is advised to consult with an attorney about
the
Agreement. If Executive accepts this Agreement, Executive will have an
additional 7 days from the date that Executive signs this Agreement to revoke
that acceptance, which Executive may effect by means of a written notice sent
to
the General Counsel of the Company at the Company’s corporate headquarters. If
this 7-day period expires without a timely revocation, this Agreement will
become final and effective on the eighth day following the date of Executive’s
signature, which eighth day will be the “Effective Date” of this
Agreement.
16. No
Admission Of Liability.
Nothing
in this Agreement will constitute or be construed in any way as an admission
of
any liability or wrongdoing whatsoever by the Company or Executive.
17. Integrated
Agreement.
This
Agreement is intended by the parties to be a complete and final expression
of
their rights and duties respecting the subject matter of this Agreement and
supersedes all prior agreements, written or oral, between them as to such
subject matter, including the Employment Agreement.
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18. Taxes
And Other Withholdings.
Notwithstanding any other provision of this Agreement, the Company may withhold
from amounts payable hereunder all federal, state, local and foreign taxes
and
other amounts that are required to be withheld by applicable laws or
regulations, and the withholding of any amount shall be treated as payment
thereof for purposes of determining whether Executive has been paid amounts
to
which he is entitled.
19. Waiver.
No
party
to this Agreement, by mere lapse of time, without giving notice or taking other
action hereunder, shall be deemed to have waived any breach by any other party
of any of the provisions of this Agreement. Further, the waiver by a party
of a
particular breach of this Agreement by another party shall neither be construed
as, nor constitute, a continuing waiver of such breach or of other breaches
of
the same or any other provision of this Agreement.
20. Severability.
If for
any reason a court of competent jurisdiction or arbitrator finds any provision
of this Agreement to be unenforceable, the provision shall be deemed amended
as
necessary to conform to applicable laws or regulations, or if it cannot be
so
amended without materially altering the intention of the parties, the remainder
of the Agreement shall continue in full force and effect as if the offending
provision were not contained therein.
21. Notices.
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, or delivered by private courier, 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 Executive 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.
22. Agreement
Voluntarily Entered Into.
The
parties to this Agreement represent and acknowledge that his/its decision to
enter into this Agreement has been made voluntarily, knowingly, on the advice
of
counsel, and without coercion of any kind.
23. Counterparts.
This
Agreement may be executed in counterparts (including executed counterparts
delivered and exchanged by facsimile transmission) each of which shall be deemed
an original and all of which when taken together shall constitute one and the
same instrument.
24. Amendments.
This
Agreement may be amended or modified from time to time only by a written
instrument signed by all of the parties hereto.
25. Governing
Law.
This
Agreement is governed by and shall be construed in accordance with the laws
of
the State of California, without it giving effect to its conflict or choice
of
law principles.
26. Binding
Effect.
This
Agreement is binding on and inures to the benefit of the parties hereto and
to
their respective heirs, legal representatives, successors and permitted
assigns.
8
27. Breach.
The
parties hereto agree that neither party shall be permitted to rely on an
immaterial breach of this Agreement to avoid such party’s obligations
hereunder.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
day and year first above written.
|
VAN
X. XXXXXXXXX
|
COMPUTER
SCIENCES CORPORATION
|
|
/s/
Van X.
Xxxxxxxxx
|
By: /s/
Xxxxxxx X.
Xxxx
Its:
Vice President
|
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