UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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SCHEDULE 14A
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LEIDOS2018
leidos 2022 PROXY STATEMENT Notice of Annual Meeting
of StockholdersShareholders Making the world safer, healthier, and more efficient. April 29, 2022
Proxy Statement
Friday, May 11, 2018 at 9:00 a.m., ET
Leidos Holdings, Inc.
11951 Freedom Drive
Reston, Virginia 20190
About Leidos Leidos is a FORTUNE 500® technology, engineering, and science company that provides services and solutions in the defense, intelligence, civil and health markets, both domestically and internationally. We bring domain-specific capabilities and innovations to customers in each of these markets by leveraging five technical core competencies: digital modernization, cyber operations, mission software systems, integrated systems and mission operations. Applying our technically-advanced solutions to help solve our customers’ most difficult problems has enabled us to build strong relationships with key customers. Our customers include the U.S. Department of Defense, the U.S. Intelligence Community, the U.S. Department of Homeland Security, the Federal Aviation Administration, the Department of Veterans Affairs and many other U.S. civilian, state and local government agencies, foreign government agencies and commercial businesses. With a focus on delivering mission-critical solutions, Leidos generated 87% of revenues for the fiscal year ended December 31, 2021 (“fiscal 2021”) from U.S. government contracts. HEALTH We are a leading provider of healthcare solutions for federal and commercial customers. We deliver secure, whole health solutions across ever-changing sites of care to improve patient outcomes and system efficiencies. CIVIL We are helping to modernize infrastructure, systems, and security by offering transformative information technology, expert logistics, and proven inspection technologies for government and highly regulated commercial customers. DEFENSE We provide global customers with an innovative portfolio of secure, seamless systems, solutions, and services for multi-domain dominance and informed decision-making in every environment. KEY STATISTICS Headquarters: 43,000 +/- Reston, Virginia employees worldwide MARKETS WORKFORCE CIVIL 49% 20%+ $ Employees are 3.2B 2021 Have Clearance a Military Veterans $13.7B DEFENSE $ REVENUE 8.0B Operation MVP is HEALTH 22% our company-wide $ initiative to hire, train, 2.5B Have Advanced and support returning Degrees veterans.
Dear Fellow Shareholders, Each year, I am thankful for the opportunity to reflect on our accomplishments and extend my gratitude to you, our shareholders. 2021 brought another wave of challenges, along with rewarding outcomes as we worked to make the world safer, healthier, and more efficient. Throughout the ongoing pandemic, Leidos maintained its reputation as a trusted, global provider of technology, science, and engineering solutions to government and highly regulated commercial customers. The diversity of our portfolio served us well and was vital to our resilience, preparation, and success. Our growth continued last year, including through our acquisition of the 1901 Group, a leading provider of managed IT services and cloud solutions to private and public markets. Additionally, Leidos also completed the acquisition of Gibbs and Cox, the largest independent naval architecture and marine engineering firm in the United States. The company covers the entire spectrum of today’s maritime industry, from concept development to production and in-service support. Our business development team secured opportunities with NASA, the U.S. Air Force, the Defense Information Systems Agency (DISA), the Department of Energy, the United Kingdom Home Office, and the Australian Ministry of Defence. In addition, Leidos received a substantial contract to support the Federal Aviation Administration (FAA)’s NextGen program including En Route Automation Modernization. Our team also secured major health contracts, including a contract providing counseling and outreach services at 100+ U.S. military installations in support of the DoD’s Military Family Life Counseling Program and another providing health readiness support services supporting the Defense Health Agency Reserve Health Readiness Program. These are just a few examples of our collaborative business achievements – we continue to work diligently to support our customers and their important missions. Leidos achieved FY21 revenue of $13.737 billion, a 12% increase from the prior year. In November of last year, Leidos announced Next Level Leidos, the company’s environmental, social, and governance (ESG) goals. Next Level Leidos introduces new sustainability focus areas and metrics to positively impact both people and the planet. This new approach builds on Leidos’ mission and focuses on making meaningful progress in three key areas: health and well-being, diversity and inclusion, and environmental stewardship. Next Level Leidos ultimately represents our commitment to being a responsible and engaged corporate citizen. We remain dedicated to building a future where our people and technology contribute to a more sustainable world. As a company, we continued our journey to create a more inclusive and diverse culture, forming an Enterprise Inclusion Council to help identify and champion innovative actions that create a more inclusive work environment. We are pleased to report that our efforts did not go unnoticed, as we were named to Forbes’ list of America’s Best Employers for Diversity. Thanks to the support and trust of our shareholder community, Leidos continues to grow and succeed, building on our momentum to execute in 2022. Now at 43,000 employees and growing, our sense of purpose and commitment to stakeholders enables us to connect more deeply with our customers while addressing the great challenges of our time with agility. I’m incredibly proud of our performance and remain focused on the year ahead as we continue to deliver value for you. Roger Krone Chairman and Chief Executive Officer
Notice of Annual Meeting of Stockholders
Friday, | Leidos Holdings, Inc. | |
9:00 a.m. |
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This proxy statement is being furnished to the stockholders of Leidos Holdings, Inc. in connection with the solicitation of proxies by our Board of Directors for use at our annual meeting of stockholders to be held exclusively via live webcast at www.virtualshareholdermeeting.com/LDOS2022, on Friday, April 29, 2022, at 9:00 a.m. ET and at any and all adjournments, postponements or continuations of the meeting. This proxy statement and the proxy and voting instruction card are first being sent or made available to our stockholders on or about March 16, 2022.
2022 Virtual Stockholder Meeting:
Due to the continued public health impact of the COVID-19 pandemic and advisories issued by government authorities limiting public gatherings, and to support the health and well-being of our stockholders and employees, we will hold our annual meeting in a virtual-only format via the Internet. You will be able to attend the annual meeting online. We are committed to ensuring that stockholders will be afforded the opportunity to vote and ask questions, similar to an in-person meeting. We encourage you to access the meeting prior to the start time. If you experience technical difficulties during the check-in process or during the meeting, please call the technical support number that will be posted at www.virtualshareholdermeeting.com/LDOS2022.
To be admitted to the annual meeting and access the stockholder list, go to www.virtualshareholdermeeting.com/LDOS2022 and enter the control number found on your proxy card, voting instruction form or notice you previously received. You may ask questions or vote during the annual meeting by following the instructions available on the meeting website during the meeting. If you are not eligible to participate in the meeting as a stockholder or you do not have your control number, you may listen to a webcast of the meeting by visiting www.virtualshareholdermeeting.com/LDOS2022 and logging on as a guest. Guests will not be able to ask questions or vote at the meeting.
Items of Business:
1. | Elect twelve directors; |
2. | Approve, by |
3. | Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December |
Stockholders will also transact such other business as may properly come before the meeting or any adjournments, postponements or continuations of the meeting.
Record Date: March 12, 20189, 2022
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Annual Report: | The Leidos |
YOUR VOTE IS IMPORTANT!You may vote your shares in advance of the meeting via the Internet, by telephone, by mail, or by attending and voting online at the annual meeting of stockholders. Please refer to the section “How do I vote my shares?” in the proxy statement for detailed voting instructions. If you vote via the Internet, by telephone or plan to vote online at the annual meeting of stockholders, you do not need to mail in a proxy card.
REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
By Order of the Board of Directors, | ||||||||
Benjamin A. Winter | ||||||||
Corporate Secretary | ||||||||
March 16, 2022 |
This summary highlights selected information provided in more detail throughout this proxy statement. This summary does not contain all the information you should consider before voting. Please read the complete proxy statement and our annual report carefully before casting your vote.
Meeting Information
u | Date and Time: April 29, 2022, 9 a.m. ET |
u | Virtual Meeting: www.virtualshareholdermeeting.com/LDOS2022 |
u | Record Date: March 9, 2022 |
How to Vote
VIA THE INTERNET (BEFORE THE MEETING) Go to www.proxyvote.com or scan the QR code on your proxy and voting instruction card with a | BY MAIL
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VIA THE INTERNET (AT THE MEETING) To vote at the meeting, visit www.virtualshareholdermeeting.com/LDOS2022. | BY TELEPHONE Call1-800-690-6903. |
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Voting Items and Recommendations
Proposal | Board Recommendation | Additional Information | ||
Election of Directors | See pages 1 through 7 for more information on our nominees | |||
Advisory Vote on Executive Compensation | FOR | See page 23 for details
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| FOR | See page 51 for details |
Corporate Governance Highlights
Leidos recognizes the importance of strong corporate governance to address the interests of our stockholders, employees, customers, supplier partners and other stakeholders. We believe that strong corporate governance is critical to achieving our mission and long-term stockholder value. The following table highlights certain of our corporate governance practices and policies:
u | Independent Lead Director with robust and well-defined responsibilities |
u | Executive session during every Board meeting led by the Independent Lead Director without management present |
u | No supermajority stockholder voting requirements in our charter or bylaws |
u | Proxy access right for stockholders |
u | Annual election of all directors |
u | Majority voting with resignation policy for directors in uncontested elections |
u | Annual Board and Committee evaluations, periodic, third-party facilitated evaluations |
u | Risk oversight by Board and Committees |
u | Independent directors focus on executive succession planning |
u | Independent Committee chairs |
u | Annual advisory vote on executive compensation |
u | Meaningful stock ownership requirements for directors and executives |
u | Robust board refreshment process, including a focus on skills, diversity and ethics |
u | Annual review of Committee charters and Corporate Governance Guidelines |
2022 Proxy Statement | i
Summary InformationBoard Composition Overview
Each year, the Corporate Governance and Ethics Committee reviews the composition of the Board to assess the qualifications and areas of expertise needed in directors to enhance the Board’s exercise of its duties. In evaluating potential nominees, the Committee and the Board consider each individual in the context of the Board as a whole, with the objective of recommending to stockholders a slate of individual director nominees that can best continue to oversee the success of our business and advance stockholders’ interests.
In addition, the Corporate Governance and Ethics Committee will consider candidates with a diversity of race, ethnicity and/or gender, and will ensure that such candidates are included in each pool from which Board nominees are chosen. For additional information regarding our director nominees and our criteria for Board membership, see “Nominees for Election to the Board of Directors” on page 1 and “Criteria for Board Membership” on page 9.
This summary highlights
Board Skills and Experience
Our directors collaboratively contribute significant experience in areas that are relevant for appropriate oversight of our business and strategy. For additional information contained elsewhere in this proxy statement. It does not contain all information that you should consider, and you should readregarding our director nominees’ experience, see “Nominees for Election to the entire proxy statement carefully before voting.Board of Directors” on page 1.
Annual Meeting of Stockholders
u | Senior Leadership Experience |
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Meeting Agenda and Voting Recommendations
Innovation and Technology Expertise |
| u | ||||
Board Nominees
The following table provides summary information about each director nominee. Each director nominee is elected annually by a majority of votes cast.
Nominee | Age | Director Since | Principal Occupation | |||
Gregory R. Dahlberg | 66 | 2016 | Former Senior Vice President, Washington Operations, Lockheed Martin Corporation; 26th Under Secretary of the Army | |||
David G. Fubini | 64 | 2013 | Director Emeritus of McKinsey & Company, Inc.; Senior Lecturer, Harvard Business School | |||
Miriam E. John | 69 | 2007 | Former Vice President of Sandia National Laboratories; Member, Defense Science Board | |||
Frank Kendall III | 69 | 2017 | Former Under Secretary of Defense for Acquisition, Technology and Logistics | |||
Harry M.J. Kraemer, Jr. | 63 | 1997 | Executive Partner, Madison Dearborn Partners, LLC; Professor, Kellogg School of Management at Northwestern University | |||
Roger A. Krone
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61
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2014
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Chief Executive Officer and Chair of the Board
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Gary S. May
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53
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2015
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Chancellor of the University of California at Davis
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Surya N. Mohapatra | 68 | 2016 | Former Chairman, President and Chief Executive Officer, Quest Diagnostic Incorporated | |||
Lawrence C. Nussdorf
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71
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2010
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Chairman and Chief Executive Officer, Clark Enterprises, Inc.
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Robert S. Shapard
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62
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2013
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Chief Executive Officer, Oncor Electric Delivery Company LLC
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Susan M. Stalnecker | 65 | 2016 | Former Vice President, Corporate Productivity and Hospitality, E.I. du Pont de Nemours & Co. | |||
Noel B. Williams
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63
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2013
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Former President of HCA Information Technology & Services, Inc.
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Summary Information
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u | Government and |
Executive Compensation Highlights Pay for performance by tying a substantial majority of an executive’s compensation to the achievement of Require our executives to own a significant amount of our stock; Avoid incentives that encourage unnecessary or excessive risk-taking; and Compete effectively for talented executives who will contribute to our long-term success. ii | 2022 Proxy Statement The following table summarizes certain highlights of our executive compensation practices and policies: What We Do What We Don’t Do For additional information regarding our compensation programs and decisions for the fiscal year ended December 31, 2021, or fiscal 2021, see “Compensation Discussion and Analysis” on page 24. Environmental, Social and Governance (“ESG”) Highlights We believe that Leidos’ environmental, social and governance efforts are deeply tied to our mission of making the world safer, healthier and more efficient. In 2021, Leidos took significant steps to further advance its sustainability goals by launching the “Next Level Leidos” initiative, which establishes the Company’s ESG goals for 2030. In establishing Next Level Leidos, we partnered with key stakeholders, conducted an assessment and developed a new approach to our ESG initiatives. Our strategy is focused on further cultivating inclusion, advancing environmental sustainability and promoting healthier lives for our employees and communities. For additional information regarding the Board’s role in oversight of our ESG programs and initiatives, see “Environmental, Social and Governance (“ESG”) Oversight “ beginning on page 12. Awards and Recognition In 2021, our ESG practices continue to be recognized by a wide range of organizations and publications: 2022 Proxy Statement | iii LEIDOS HOLDINGS, INC. Proxy Statement Stockholder Recommendations and Nominations of Director Candidates Communications with the Board of Directors and Investor Relations Potential Payments Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm Proposal 1 — Election of Directors At the annual meeting, stockholders will vote on the election of twelve directors Recommendation of the Board of Directors The Board of Directors unanimously recommends a vote FOR each nominee. Majority Voting Standard in Uncontested Director Elections We have adopted majority voting procedures for the election of directors in uncontested elections. In an uncontested election, nominees must receive more “for” than “against” votes to be elected. Abstentions are not counted as votes cast. As provided in our bylaws, a “contested election” is one in which the number of nominees exceeds the number of directors to be elected. The election of directors at the If an incumbent director receives more “against” than “for” votes, Shares of common stock represented by properly executed, timely received and unrevoked proxies will be voted as instructed in the proxy. In the absence of specific instructions, the shares represented by properly executed, timely received and unrevoked proxies will be voted “for” each nominee. If any of the nominees listed below Nominees for Election to the Board of Directors Set forth below is a brief biography of each nominee for election as a director and a Proposal 1 — Election of Directors GREGORY R. DAHLBERG Director Since 2016 Age: Leidos Committees: Mr. Dahlberg has Mr. Dahlberg’s DAVID G. FUBINI Director Since 2013 Age: Leidos Committees: Human Resources & Compensation Corporate Governance & Ethics Current Public Bain Capital Specialty Finance, Inc. Mr. Fubini is a Senior Lecturer at Harvard Business School and a Director Emeritus at McKinsey & Company, a global management consulting company. Previously, he was a Senior Director of McKinsey, where he worked for over 33 years. He was McKinsey’s Managing Director of the Boston Office, the past leader of the North American Organization Practice and the founder and leader of the Firm’s Worldwide Merger Integration Practice. Mr. Fubini’s expertise in architecting and executing organizational transformations, his extensive involvement in a wide array of corporate transactions and his executive management experience at McKinsey offer valuable insights to our Board. Proposal 1 — Election of Directors MIRIAM E. JOHN Director Since 2007 Age: Leidos Committees: Technology & Information Security (Chair) Dr. John retired from Sandia National Laboratories, a science and engineering laboratory, after serving Dr. John is a highly respected scientist, speaker and consultant on both technical and leadership Director Since Age: Leidos Committees: Mr. Kovarik Mr. Kovarik’s broad experience Proposal 1 — Election of Directors HARRY M.J. KRAEMER, JR. Director Since 1997 Age: Leidos Committees: Audit Current Public Company Directorships Dentsply Sirona Inc. Former Directorships During Past 5 Years Mr. Kraemer has been an executive partner of Madison Dearborn Partners, LLC, a private equity investment firm, since April 2005, and has served as a professor at the Kellogg School of Management at Northwestern University since January 2005. Mr. Kraemer previously served as the Chairman of Baxter International, Inc., a healthcare products, systems and services company, from 2000 until 2004, as Chief Executive Officer of Baxter from 1999 until 2004, and as President of Baxter from 1997 until 2004. Mr. Kraemer also served as the Senior Vice President and Chief Financial Officer of Baxter from 1993 to 1997. Mr. Kraemer brings comprehensive executive management experience to our Board as a former Chairman, Chief Executive Officer and Chief Financial Officer of a major global corporation. His investment and health expertise, background in commercial and international business, qualification as an “audit committee financial expert” as defined by SEC rules, and thought leadership as a distinguished educator at a leading business school provide valuable contributions to our Board. ROGER A. KRONE Chair of the Board and Chief Executive Officer Director Since 2014 Age: Leidos Committees: Current Public Company Directorships Lear Corporation Former Directorships During Past 5 Years BorgWarner Inc. Mr. Krone’sin-depth knowledge of our industry gained by decades of experience in a variety of roles at leading companies Proposal 1 — Election of Directors GARY S. MAY Director Since 2015 Age: Leidos Committees: Human Resources & Compensation Dr. May has served as the 7th Chancellor of the University of California at Davis since August 2017. He previously served as the Dean of the College of Engineering at the Georgia Institute of Technology from Dr. May is a distinguished researcher in the field of computer-aided manufacturing of integrated circuits (IC). He has authored over 200 articles and technical presentations in the area of IC computer-aided manufacturing and has been honored with numerous awards and distinctions for his work. As an accomplished engineer with leadership experience at a prominent academic institution and expertise in areas relevant to our business, including technology and cybersecurity, Dr. May provides special insight and perspectives that the Board views as important to us as a leading science and technology company. SURYA N. MOHAPATRA Director Since 2016 Age: Leidos Committees: Human Resources & Compensation Current Public Company Directorships Xylem Inc. Dr. Mohapatra has held senior leadership positions in the health care industry for more than 30 years, most recently as the Chairman, President and Chief Executive Officer of Quest Diagnostics Incorporated, a leading provider of diagnostic testing, information and services where he had been a senior executive since 1999. Dr. Mohapatra is a past Proposal 1 — Election of Directors Director Since Age: Leidos Committees: Technology & Information Security Current Public Company Directorships Zanite Acquisition Corp. Mr. Shanahan ROBERT S. SHAPARD Lead Director Director Since 2013 Age: Leidos Committees: Audit & Finance Current Public Company Directorships NACCO Industries, Inc. Mr. Shapard As an experienced executive in the energy industry, Mr. Shapard brings to our Board a unique perspective on issues that are important to our business. In addition, his previous experience as a Chief Financial Officer provides expertise critical to his role as Proposal 1 — Election of Directors SUSAN M. STALNECKER Director Since 2016 Age: Leidos Committees: Audit & Finance Current Public Company Directorships Bioventus Inc. The Macquarie Optimum Funds Ms. Stalnecker was employed by E.I. du Pont de Nemours & Co. Ms. Stalnecker brings to our Board diverse business experience, including financial acumen important to our Board’s Audit & Finance NOEL B. WILLIAMS Director Since 2013 Age: Leidos Human Resources & Compensation (Chair) Ms. Williams is the retired President of HCA Information Technology & Services, Inc., a Ms. Williams brings to our Board extensive leadership experience in healthcare information Corporate Governance Guidelines Our Board recognizes the importance of strong corporate governance All of our employees, including our executive officers, are required to comply with our Code of Conduct, which describes our standards for protecting company and customer assets, fostering a safe and healthy work environment, dealing fairly with customers and others, conducting international business properly, reporting misconduct and protecting employees from retaliation. This code forms the foundation of our corporate policies and procedures designed to promote ethical behavior in all aspects of our business. Our directors These documents are available on our website at www.leidos.com by clicking on the links entitled “Investors” followed by “Corporate Governance.” We intend to post on our website any material changes to or waivers from our Code of Conduct and Code of Business Conduct of the Board of Directors. The Board annually determines the independence of each of our directors and nominees in accordance with the Corporate Governance Guidelines. These guidelines provide that “independent” directors All members of the Audit and Finance, Human Resources and Compensation and Each year, our directors are obligated to complete a questionnaire 8 | 2022 Proxy Statement Corporate Governance The Board has also determined that our former director Frank Kendall III was independent under those standards during the period in 2021 that he served on the Board. Mr. Kendall resigned from the Board effective July 27, 2021, following his confirmation to serve as the United States Secretary of the Air Force. To fulfill its responsibility to identify and recommend to the full Board nominees for election as directors, the expertise needed in directors to further enhance the Expertise and involvement in areas relevant to our business such as defense, intelligence, science, healthcare, technology, finance, government or commercial and international business; Interpersonal skills, substantial personal accomplishments and diversity as to race, gender identity, age, race, ethnic background, sexual orientation, culture and experience; Commitment to business ethics, professional reputation, independence and understanding of the responsibilities of a director and the governance processes of a public company; Demonstrated leadership, with the ability to exercise sound judgment informed by a diversity of experience and perspectives; and Benefits from the continuing service of qualified incumbent directors in promoting stability and continuity, contributing to the Board’s ability to work together as a collective body and giving Limitations on Other Board Service The annually. The Board expects a high level of commitment from its members and will review a candidate’s other commitments and service on other boards to ensure that the candidate has sufficient time to devote to us. The Corporate Governance and Ethics Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Committee regularly assesses the Board’s current and projected strengths and needs by, among other things, reviewing the Board’s current profile, the criteria for board membership described in this proxy under the caption “Corporate Governance—Criteria for Board Membership” and our current and future needs. When vacancies on the Board are anticipated or otherwise arise, the Committee prepares a target candidate profile and develops an initial list of director candidates identified by the current members of the Board, business contacts, community leaders and members of management. The Committee will consider candidates with a diversity of race, ethnicity and/or gender and will ensure that such candidates are included in each pool from which Board nominees are chosen. The Committee may also retain a professional search firm to assist in developing a list of qualified candidates. The Corporate Governance and Ethics Committee would also consider any stockholder recommendations for director nominees that are 2022 Proxy Statement | 9 Corporate Governance properly received. The Committee screens and evaluates the resulting slate of director candidates to identify those individuals who best fit the target candidate profile and Board membership criteria and provides the Board with its recommendations. The Board then considers the recommendations and votes on whether to nominate the director candidate for election by the stockholders at the annual meeting or appoint the director candidate to fill a vacancy on the Board. Each nominee is a current Board member who was elected by stockholders at the 2021 annual stockholder meeting, except for Mr. Shanahan, who was appointed to the Stockholder Recommendations and Nominations of Director Candidates The Corporate Governance and Ethics Committee considers stockholder recommendations for candidates for the Board of Directors using the same criteria described above under “Corporate Governance — Criteria for Board Membership.” The name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate’s willingness to serve if elected, and a description of any ownership of shares of our common stock must be sent to: Leidos Holdings, Inc., Office of the Corporate Secretary, 1750 Presidents Street, Reston, Virginia 20190. Any stockholder may also nominate a person for election as a director by complying with the procedures set forth in our bylaws. Retirement Age and Board Refreshment The Board recognizes the importance of periodic board refreshment and maintaining an appropriate balance of tenure, experience, and perspectives on the Board. The Board values the contributions of both newer perspectives as well as directors who have developed extensive experience and insight into the Company during their service on the Board. Accordingly, the Board has established a retirement age for independent directors of 75 and has not granted any exemptions or waivers to this policy. The Board believes that the evaluation and nomination processes will ensure that the Company has a properly constituted and functioning Board and considers at least annually upcoming retirements, the average tenure and overall mix of individual director tenures of the Board, the overall mix of the diverse skills, knowledge, experience, and perspectives of directors, each individual director’s performance and contributions to the work of the Board and its Annual Board and Committee Evaluation Process The Board believes that establishing and maintaining a robust evaluation process is essential to maintaining Board effectiveness and best corporate governance practices. Accordingly, the Corporate Governance and Ethics Committee annually evaluates the performance of the Board and its committees. This process is supported by written questionnaires used to facilitate the assessments, which are reviewed annually to reflect areas of focus as the Committee determines appropriate, and include topics such as: u Board’s Performance u Duties and Responsibilities u Board Composition, Skills, and Diversity u Processes and Resources u Board and Committee Meetings and Structure u Areas of Focus u Management Relations u Culture u Risk Oversight by Board and Committees For fiscal 2021, the evaluation included utilizing a The Board is currently led by Roger A. Krone as Chair and 10 | 2022 Proxy Statement Corporate Governance determine the most qualified and appropriate individual to serve as Chair of the Board, whether that person is an independent director or the Chief Executive Officer. We believe that our Board leadership structure provides for an effective governance framework and allows us to benefit from Mr. Krone’s talent, knowledge, and leadership as Chief Executive Officer to efficiently lead our Board. We also maintain strong independent and effective oversight of our business through our Independent Lead Director, independent Board committee chairs, experienced and committed directors and frequent executive sessions without management in attendance. Our Board believes that these factors, taken together, provide for objective, independent Board leadership, effective engagement with and oversight of management, and a voice that is independent from management and accountable to stockholders and other stakeholders. The Board selects the Chair annually and may decide to separate or combine the roles of Chair of the Board and Chief Executive Officer, if appropriate, at any time in the future. In cases where the Board determines it is in the best interests of our stockholders to combine the positions of Chair and Chief Executive Officer, the Reviewing and approving meeting agendas and the annual schedule of meetings; Providing input to the Chair on the quantity, quality and timeliness of information provided to the Board; Calling and chairing all meetings of the independent directors and apprising the Chair of the issues considered, as appropriate; Presiding, in the Chair’s absence, at Board meetings and the annual meeting of stockholders; Helping the Chair facilitate full and candid Board discussions, ensuring all directors express their views on key Board matters and assisting the Board in achieving a consensus; Being authorized to attend all committee meetings, as appropriate; Serving as the liaison between the independent directors and the Chair and Chief Executive Officer; Being available for consultation and direct communication with significant stockholders and other Collaborating with the Human Resources and Compensation Committee on the annual performance evaluation of the Chief Executive Officer; Collaborating with the On behalf of the independent directors, retaining such counsel or other advisors as they deem appropriate in the conduct of their duties and responsibilities; and Performing such other duties as the Board may determine from time to time. Our Board is committed to strong corporate governance and believes that Board independence and oversight of management are effectively maintained through the Board’s current composition, committee structure and the Director Orientation and Continuing Education Our directors are expected to keep current on issues affecting Leidos and our industry and on developments with respect to their general responsibilities as directors. In addition, the Board encourages directors to participate annually in continuing director education programs, and the Company reimburses directors for their expenses associated with this participation. Continuing director education is also provided during Board meetings and other Board discussions and as stand-alone information sessions outside of meetings. We also conduct orientation programs to familiarize new directors with our businesses, strategies, and policies and assist new directors in developing Leidos and industry knowledge to optimize their service on the Board. Directors have access to additional orientation and educational opportunities upon acceptance of new or additional responsibilities on the Board and in committees. 2022 Proxy Statement | 11 Corporate Governance The Board’s Role in Corporate Oversight Risk Oversight As part of its oversight function, the Board and its committees monitor risk as part of their regular deliberations throughout the year. When granting authority to management, approving strategies, making decisions and receiving management reports, the Board considers, among other things, the risks facing the The Audit and Finance Committee evaluates the Company’s guidelines and policies regarding risk assessment and risk management, including risks related to internal control over financial reporting, the Company’s major financial risk exposures, including financial, capital investment and insurance risks, and the steps management has taken to monitor and control such exposures. The Human Resources and Compensation Committee evaluates risks potentially arising from the company’s human resources and compensation policies and practices. The Corporate Governance and Ethics Committee oversees risks associated with governance and other ESG risks, including unethical conduct and political, social, environmental and reputational risks. The Technology and Information Security Committee assists the Board in overseeing the company’s risk posture as it relates to technology development and application activities and information security and related exposures. The Cybersecurity and Related Risks Information security is critical to maintaining the trust of our customers and business partners, and we are committed to mitigating risks and protecting our data and systems. As a government contractor and a provider of information technology services, we are entrusted with highly sensitive information, and we are continuously exposed to unauthorized attempts to compromise this information through cyberattacks, the risk of insider threats and other information security risks. Management provides our Board and the Technology and Information Security Committee with regular updates about our cybersecurity and related risk exposures, our policies and procedures to mitigate such exposures and the status of projects to strengthen our information security infrastructure and defend against and respond to threats at least quarterly. In addition, we require our employees to take annual training on information security, including cybersecurity and global data privacy requirements and compliance measures. We also conduct periodic internal and third-party assessments to test our cybersecurity controls, perform cyber simulations and annual tabletop exercises, and continually evaluate our privacy notices, policies and procedures regarding our handling and control of personal data and the systems we have in place to help protect us from cybersecurity or personal data breaches. Leidos has rigorous controls in place to monitor personal and confidential information distributed electronically by its employees. Environmental, Social and Governance (“ESG”) Oversight Our Board and the Corporate Governance and Ethics Committee regularly review with management ESG issues that may significantly impact our business operations, reputation or relations with employees, customers, supplier partners, stockholders and other stakeholders, at least quarterly. The Board and the Committee are also responsible for reviewing practices and policies in the areas of corporate responsibility, including environmental safety, protection, risk, and other environmental issues that affect the business, operations, performance, business continuity planning, and public image or reputation. The Corporate Governance and Ethics Committee also reviews and recommends policies and procedures to maintain a business environment committed to high standards of ethics, integrity and legal compliance. 12 | 2022 Proxy Statement Corporate Governance Our Board and the Human Resources and Compensation Committee regularly review with management our diversity and inclusion initiatives, including recruitment, training and development efforts, as well as employee benefits and resources, and discusses metrics relating to such initiatives at least quarterly. In 2021, the world faced unprecedented challenges, including the evolving COVID-19 pandemic, racial and social injustice and numerous natural disasters, among others. Leidos is guided by a conviction to do what is right every day, especially during challenging times. While navigating these challenges, we prioritize the health and mental well-being of our global workforce, delivering critical environmental and sustainability-driven support to customers, and creating an inclusive environment where employees are respected, valued and heard. We expect our management and employees to share a common understanding of our commitment and, accordingly, have established teams within the enterprise to address our ESG goals. We provide additional details regarding those teams in the sections below. Transparency and Accountability The Board believes that transparency and accountability are a critical part of our ESG strategy. Leidos publishes reports annually in accordance with the latest GRI™ Sustainability Reporting Standards and strives for continuous improvement, alignment with industry best practices and leadership in corporate sustainability and responsibility. As a result, the Company periodically re-evaluates and updates its sustainability and corporate responsibility programs and how it shares progress with stakeholders. In 2019, Leidos produced its first Sustainability Accounting Standards Board (“SASB”) Disclosure Supplement. In 2021, Leidos released its 12th Annual Report covering the calendar year 2020, integrating its GRI™ Index and SASB Standards into one document to provide a comprehensive view of corporate performance in this area. In 2021, Leidos partnered with outside experts to conduct a formal ESG assessment, including a stakeholder engagement initiative. This engagement, alongside an analysis of internal and external trends and aligned with business priorities, helped us develop our “Next Level Leidos” ESG Goals. The goals will form the basis of the Company’s Sustainability Management Plan and drive progress in priority areas. In 2022, for the first time, Leidos published its annual EEO-1 report, which includes information regarding its workforce diversity. We provide additional information regarding our ESG goals on our corporate website at https://www.leidos.com/company/responsibility-and-sustainability/esg-goals. The reports mentioned above, or any other information from our website, are not part of, or incorporated by reference into this proxy statement. Some of the statements and reports contain cautionary statements regarding forward-looking information that should be carefully considered. Our statements and reports about our objectives may include statistics or metrics that are estimates, make assumptions based on developing standards that may change, and provide aspirational goals that are not intended to be promises or guarantees. The statements and reports may also change at any time and we undertake no obligation to update them, except as required by law. Environmental Matters We believe environmental stewardship is a key element of corporate responsibility and contributes to the environmental well-being of our communities. We aim to contribute to our high-performance culture by creating a greener company that is consistent with our corporate values to be a good environmental steward in the communities where we live and work. We are also committed to operating a sustainable business that protects the health and safety of our employees, our communities, our customers and the environment. Through our philanthropic efforts, we strive to create a sustainable future, including working side-by-side with community organizations providing critically important services and opportunities to those most in need. We have established a management-level Sustainability Working Group (“SWG”), comprised of senior leaders from across the Company, including customer-facing sustainability experts. The SWG is actively engaged in overseeing ESG programs and strengthening ESG practices to support responsible and sustainable growth. The SWG conducts biannual reviews of internal climate-related risk register in accordance with best practices. The SWG also conducts scenario analysis into the Leidos climate-related risk assessment process, conducting a risk review alongside members of the Company’s enterprise risk management team. Climate-related operational opportunities are reviewed biannually and managed by the SWG in parallel with outside experts. Climate-related business opportunities are generally managed by the business lines at least at the business group-level and are reviewed quarterly. 2022 Proxy Statement | 13 Corporate Governance Operating sustainably also underpins the Leidos mission and helps optimize the Company’s performance. In 2021, Leidos continued to take action to protect the environment, both through the work we do for our customers and the steps taken to reduce our own impacts. In 2010, Leidos pledged to reduce greenhouse gas (“GHG”) emissions by 25% by 2020. As of 2020, Leidos had achieved an absolute reduction of 58% in scope 1 and 2 GHG emissions below 2010 levels, exceeding the legacy target. In 2017, Leidos began measuring scope 3 GHG emissions from employee commuting and business travel to more thoroughly understand our environmental impacts and to identify opportunities to reduce our indirect GHG emissions. Additionally: In 2021, Leidos was recognized by the global environmental non-profit Carbon Disclosure Project (“CDP”) for its corporate sustainability and emissions management efforts. Leidos has provided disclosures through CDP since 2015. With more than 45 years of environment, energy and critical infrastructure experience, one of every four Fortune 500® companies is a valued Leidos client. Leidos currently provides $1.2 billion of support to clients across environmental and energy markets, including nine federal agencies and all five U.S. military branches. During the height of the COVID-19 pandemic, Leidos opened its new LEED-certified Global Headquarters in Reston, Virginia and continued planning for a LEED Silver facility in San Diego, CA. In addition to operating and occupying sustainable facilities, the Company responsibly decommissioned existing buildings by recycling or donating e-Waste, furniture, and supplies. Throughout the pandemic, Leidos coordinated 51 projects that diverted more than 285.2 tons of surplus from landfills and donated more than 233,000 pounds of furniture and supplies to multiple charities from our Reston and Gaithersburg locations. Social Issues and our Communities Leidos is committed to actively supporting the communities where our employees live and work through philanthropic efforts, volunteerism, sustainable operations and advancement of equality. We strive to create a sustainable future that includes working side-by-side with community organizations providing critical services and opportunities to those most in need. Our employees are empowered to uphold our values, creating a culture that makes Leidos unique. Below are examples of how Leidos has supported the communities where employees live and work: Leidos made more than $6.5 million in charitable donations and our employees contributed approximately 24,000 volunteer hours to a wide variety of company-sponsored causes including STEM education, basic needs and wellness, ethics, leadership and support to military and intelligence personnel and their families. We donated over $300,000 to the U.S. Centers for Disease Control and Prevention Foundation in support of their “All of Us Crush COVID” campaign and partnered with the Equal Justice Initiative, donating $250,000 to support in-school programming to help educate youth on combating racial injustice. Leidos awarded over $1.8 billion in contracts to small businesses through our Leidos Small Business Program (“LSBP”). LSBP is a proactive program designed to drive the use of specific vendors and suppliers, including minority-owned, women-owned, veteran owned, service disabled veteran owned, historically underutilized businesses and Small Business Administration-defined small business. Mental Health and Well-Being In 2020, we introduced our flagship social purpose campaign: Mission for the Mind: Advancing Mental Health Solutions. Leidos is committed to prioritizing the mental health of employees, their families and the broader communities where the Company operates. The program focuses on: Anti-opioids and substance use disorder prevention; Anxiety, depression and COVID-19-related impacts; and Suicide prevent efforts, especially related to veterans and the emerging vulnerable population of healthcare workers. COVID-19 In response to the evolving COVID-19 crisis, we shifted our business practices, by transitioning to remote work for most employees and prioritizing health and safety. Additionally, we migrated our customers to working remotely, helping to keep their workforce safe and secure and their operations running smoothly in the midst of a global pandemic. Through the end 14 | 2022 Proxy Statement Corporate Governance of 2021, the Leidos Relief Foundation had distributed more than $2.7 million to hundreds of employees impacted by COVID-19, and our new Pandemic Sick Leave policy provided a safety net for employees suffering from the disease or caring for family members with symptoms. Diversity and Inclusion At Leidos, we believe that a focus on inclusion and diversity improves team performance, supports innovative business strategies and drives positive results by advancing our workforce, cultivating an inclusive workplace and advancing our reputation in the marketplace. Our commitment to inclusion and diversity is reflected in the way we engage our people, our customers and our external partnerships through our innovative programs, sponsorships and engagement. “Inclusion” is Leidos’ sixth core value alongside integrity, innovation, agility, collaboration and commitment. We are committed to a culture that fosters a sense of belonging, welcomes all perspectives and contributions and provides equitable access to opportunities and resources for everyone. Inclusion and integrity are intrinsically linked by the responsibility to respect yourself and others. We maintain the Leidos Enterprise Inclusion Council, which is championed by our director Dr. Gary S. May, in partnership with our Office of Inclusion and Diversity. The council includes employees from across the enterprise nominated by their executive leaders for their passion for advancing diversity and equity in the workplace. This group helps identify and champion innovative actions that create a more inclusive work environment. The council supports initiatives to build a culture that embraces differences in all aspects of diversity, including age, gender, race, ethnicity, sexual orientation, religion, and physical ability. The council’s mission is to promote diversity of thought and perspectives, support initiatives that further advance an inclusive culture and collaborate to address emerging challenges, propose new initiatives and share inclusion best practices across Leidos. We launched several initiatives to enhance a culture of inclusion at Leidos, including: The Office of Inclusion & Diversity launched a “Courageous Conversations” overview, providing a roadmap for managers to begin an honest and open dialogue on race and social injustice with their teams. The team also published a Courageous Conversations on Race Manager’s Guide. Organizations across the enterprise hosted formal, open and honest dialogues on race, inequality and inequity and unconscious bias. We joined the Action for Diversity & Inclusion™ Pledge, a group of more than 1,200 companies committed to advancing diversity and inclusion in the workplace, making it the largest CEO-driven business commitment of its kind within the workplace in the U.S. We made Inclusive Acumen training mandatory for all employees. We also introduced mandatory Inclusive Leader training. We expanded our external Diversity Awards Program and launched two new Employee Resource Groups, the Asian Pacific Islander Nations and A4 - Allies and Action for Accessibility and Abilities. We expanded our Strategic Diversity Outreach to include additional external partnerships with minority-serving institutions, diversity conferences and organizations, and community groups. The program goals include recruiting and retaining talent from underrepresented groups, giving back to underserved communities, and exposing students from underrepresented groups to STEM opportunities. During fiscal Corporate Governance The Board has delegated certain duties to committees, which assist the Board in carrying out its responsibilities. There are four standing committees of the Board. Each independent director serves on at least two committees. The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2021 are described below. The Board has adopted charters for each of the Audit and Finance Committee, the Corporate Governance and Ethics Committee, the Human Resources and Compensation Committee, and the Technology and Information Security Committee. The charters of these committees are available on our website at www.leidos.com by clicking on the links entitled “Investor Relations,” “Corporate Governance” and then “Board Committees.” You may also obtain printed copies of these charters by writing to our Corporate Secretary at the Company’s headquarters. From time to time, the Board may also establish ad hoc committees to address particular matters. For example, in November 2021, our Board established a special committee of independent directors to oversee an internal investigation, with the assistance of external legal counsel, related to certain conduct that may have violated the Company’s Code of Conduct and potentially applicable laws, including the U.S. Foreign Corrupt Practices Act. This special committee is comprised of Messrs. Kovarik and Shapard (chair) and Ms. Williams, and held seven meetings in 2021. Listed below are the members of each of the four standing committees as of the date of this proxy statement: Audit & Finance Human Resources & Gregory R. Dahlberg David G. Fubini Miriam E. John Robert C. Kovarik, Jr. Harry M. J. Kraemer, Jr. Roger A. Krone Gary S. May Surya N. Mohapatra Patrick M. Shanahan(1) Robert S. Shapard Susan M. Stalnecker Noel B. Williams (1) Mr. Shanahan was appointed to the Board of Directors on Committee Chair Audit Committee Financial Expert 16 | 2022 Proxy Statement Corporate Governance Following are descriptions of the primary areas of responsibility for each of the four standing committees: Appoints and Pre-approves audit and Reviews Reviews adequacy of Reviews and updates the internal audit plan; Reviews any significant risks and exposures and steps taken to minimize risks; Reviews quarterly and annual financial statements prior to public release; Reviews critical accounting policies Reviews periodically legal matters that may Reviews and makes any necessary recommendations to the Board and management concerning: capital structure, including the issuance of equity and debt securities and the incurrence of indebtedness; payment of dividends, stock splits and stock repurchases; financial projections, plans and strategies; general financial planning, cash flow and working capital management, capital budgeting and expenditures; tax planning and compliance; mergers, acquisitions and strategic transactions; and investor relations programs and policies. Evaluates, identifies and Reviews the composition and procedures of Makes recommendations regarding the size, composition and charters of Reviews and Develops a set of corporate governance principles; Recommends an independent director to serve as non-executive Chair of the Board or as Independent Lead Director; Reviews policies and Reviews our approach to corporate responsibility and public policy, including legislative and regulatory trends and ESG issues that may affect our business operations, reputation or relations Develops and oversees an annual self-evaluation process of the Board and its committees. 2022 Proxy Statement | 17 Corporate Governance Determines CEO compensation and approves compensation of our other executive officers; Exercises all rights, authority and functions under our stock, retirement and other compensation plans; Approvesnon-employee director compensation; Reviews and approves Reviews compensation risk; and Periodically reviews our human resources strategy, policies and programs. Role of Independent Consultant The Human Resources and Compensation Committee has retained Frederic W. Cook & Co. (“FW Cook”), as its independent compensation consultant to assist the Committee in evaluating executive compensation programs and in setting executive officer compensation. The consultant serves the Committee in an advisory role only and does not decide or approve any compensation actions. The consultant reports directly to the Committee and does not perform any services for management. The consultant’s duties include the following: Reviewing our total compensation philosophy, compensation peer group, and target competitive positioning for reasonableness and appropriateness; Reviewing our overall executive compensation program and advising the Committee on evolving best practices; Providing independent analyses and recommendations to the Committee on executive officers’ compensation and new programs that management submits to the Committee for approval; and Reviewing the Compensation Discussion and Analysis for our Proxy Statement. The consultant interacts directly with members of management only on matters under the Committee’s oversight and with the knowledge and permission of the Committee. The Committee has assessed the independence of Reviews our approach to the integration of technology and Assesses trends or potential disruptions, including emerging technologies, that may influence our strategy with respect to technology and Assists the Reviews 18 | Corporate Governance Director Compensation Additional Information Cash Retainer u $125,000 Equity Retainer u Approximately $160,000; – $110,000 in restricted stock units – $50,000 in stock options u Vesting on the earlier of one year from the date of grant or on the date of the next annual meeting of stockholders following the date of grant u If a non-employee director retires due to our mandatory retirement policy, equity awards continue to vest as scheduled and options remain exercisable for the remainder of the option term Lead Independent Director Fee u $35,000 Committee Chair Fees u Audit Committee: $25,000 u All Other Committees: $15,000 Deferral Plans Stock Ownership Guidelines and Policies The Board believes that its members should acquire and hold shares of our stock in an amount that is meaningful and appropriate. To encourage directors to have a material investment in our stock, the Board has adopted stock ownership guidelines that call for directors to hold shares of our stock earned from their service on our Board until attaining stock ownership with a value of at least five times the amount of Name(1) Fees earned or paid in cash ($) (2) Stock awards ($) (3) Option awards ($) (4) Total ($) �� Gregory R. Dahlberg David G. Fubini Miriam E. John John P. Jumper Frank Kendall III Harry M.J. Kraemer, Jr. Gary S. May Surya N. Mohapatra Lawrence C. Nussdorf Robert S. Shapard Susan M. Stalnecker Noel B. Williams Corporate Governance The following table sets forth information regarding the compensation paid to our directors for service in fiscal 2021: Name (1) Fees earned or paid in cash ($) (2) Stock awards ($) (3) Option awards ($) (4) Total ($) Gregory R. Dahlberg David G. Fubini Miriam E. John Frank Kendall III(5) Robert C. Kovarik, Jr. Harry M. J. Kraemer, Jr. Gary S. May Surya N. Mohapatra Robert S. Shapard Susan M. Stalnecker Noel B. Williams Roger A. Krone, our Chief Executive Officer, is not included in this table because he did not receive additional compensation for his services as a director. Amounts in this column represent the aggregate dollar amount of all fees earned or paid in cash for services as a director for annual retainer fees, independent lead director fees, and committee and/or chair Amounts in this column reflect the grant date fair value of awards granted in 2021 computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). For more information regarding our application of FASB ASC Topic 718, including the assumptions used in the calculations of these amounts, see Note At the end of fiscal Name Unvested stock units (#) Gregory R. Dahlberg David G. Fubini Miriam E. John Frank Kendall III Robert C. Kovarik, Jr. Harry Gary S. May Surya N. Mohapatra Robert S. Shapard Susan M. Stalnecker Noel B. Williams 20 | Corporate Governance At the end of fiscal 2021, our non-employee directors held vested options to purchase the following number of shares of our common stock: Name Aggregate shares subject to outstanding options (#) Gregory R. Dahlberg David G. Fubini Miriam E. John Frank Kendall III Robert C. Kovarik, Jr. Harry Gary S. May Surya N. Mohapatra Robert S. Shapard Susan M. Stalnecker Noel B. Williams Mr. Kendall resigned from the Board effective July 27, 2021, following his confirmation to serve as the United States Secretary of the Air Force. The Board has adopted written policies and procedures for the review and approval of transactions between us and certain “related parties,” which are generally considered to be our directors and executive officers, nominees for director, holders of five percent or more of our outstanding capital stock and members of their immediate families. The Board has delegated to the In determining whether to approve or ratify a related party transaction, the We engage in transactions and have relationships with many entities, including educational, charitable and professional organizations, in the ordinary course of our business. Some of our directors, executive officers or their immediate family members may be directors, officers, partners, employees or stockholders of these entities. We carry out transactions with these firms on customary terms. Gerard A. Fasano is Leidos’ Group President for our Defense Group. Mr. Fasano’s brother, Matthew Fasano, is a program manager at Leidos and received compensation of approximately $218,000 in Corporate Governance M. Victoria Schmanske is Leidos’ Executive Vice President of Corporate Operations. Ms. Schmanske’s brother-in-law, Paul Schmanske, is a senior database administrator at Leidos and received compensation of approximately $154,000 in 2021, including annual salary and incentive awards commensurate with his qualifications, responsibilities and other employees holding similar positions. This relationship was approved by the Audit and Finance Committee. We maintain an ongoing dialogue with our stockholders about our business strategy, market positioning, financial performance, corporate governance, human capital management, diversity and inclusion, and environmental and social goals. Throughout the year, members of our Investor Relations team and our business leaders have engaged with many of our top stockholders to seek their input and feedback, remain well-informed regarding their perspectives, and help increase their understanding of our business. Management also routinely engages with investors at conferences and other forums. This outreach complements our Investor Relations team’s numerous touchpoints with stockholders each year. Depending on the circumstance, our lead director or another independent director may also engage in these conversations with stockholders. In addition, our Board receives reporting on a quarterly basis related to feedback from investors, as well as stockholder voting results. Communications with the Board of Directors and Investor Relations Stockholders and other Leidos Holdings, Inc. Office of the Corporate Secretary Reston, Virginia 20190 Each communication should specify the intended recipient(s). The Office of the Corporate Secretary will initially process the communications, summarize lengthy or repetitive communications and forward them to the applicable member(s) of the Board as appropriate. Communications may also be referred to other departments within the Company for action and resolution. The Company will refrain from forwarding to the Board any communication that it determines to be primarily commercial in nature, mass mailings, resumes or job inquiries, any communication that relates to an improper or irrelevant topic, or that requests general information about the Company. To reach out to our Investor Relations department, please send us an e-mail at ir@leidos.com. Please continue to share your thoughts or concerns with us. 22 | Proposal 2 — Advisory Vote on Executive Compensation We are providing our stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC. We urge stockholders to read our Compensation Discussion and Analysis (“CD&A”), which describes in detail how we seek to closely align the interests of our named executive officers with the interests of our stockholders. As described in the CD&A, our compensation programs are designed to: Pay for performance by tying a substantial majority of an executive’s compensation to the achievement of financial and other performance measures that the Board believes promote the creation of long-term stockholder value and position the company for long-term success; Target total direct compensation at approximately the median among companies with which we compete for executive talent; Enable us to recover, or “clawback,” incentive compensation if there is any material restatement of our financial results or if an executive is involved in misconduct; Require our executives to own a significant amount of our stock; Avoid incentives that encourage unnecessary or excessive risk-taking; and Compete effectively for talented executives who will contribute to our long-term success. The Human Resources and Compensation Committee of the Board believes that these programs and policies are effective in implementing our pay for performance philosophy and achieving its goals. This advisory stockholder vote, commonly known as RESOLVED, that the stockholders approve, on The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in the CD&A and Executive Compensation sections of this proxy statement in accordance with the compensation disclosure rules of the SEC. The vote is advisory, which means that the vote is not binding on the The affirmative vote of a majority of the shares present or represented either in person or by proxy and entitled to vote is required to approve this proposal. Shares of common stock represented by properly executed, timely received and unrevoked proxies will be voted as instructed. In the absence of specific instructions, properly executed, timely received and unrevoked proxies will be voted “FOR” the proposal. Recommendation of the Board of Directors The Board of Directors unanimously recommends a vote FOR the approval of the compensation of our named executive officers, as disclosed in this proxy Compensation Discussion & Analysis This Compensation Discussion and Analysis, or CD&A, and the tables and narrative that follow provide important information about our executive compensation programs for the prior fiscal year. In this proxy statement, the term “named executive officers” refers to the following executive Roger A. Krone—Chairman and Chief Executive Officer Christopher R. Cage—Executive Vice President and Chief Financial Officer(1) James C. Reagan—former Executive Vice President Gerard A. Fasano—President, Jerald S. Howe, Jr.—Executive Vice President M. Victoria Schmanske—Executive Vice President, Mr. Cage was appointed as Chief Financial Officer effective July 5, 2021. Mr. Reagan served in the Chief Financial Officer role until July 4, 2021. As part of his anticipated retirement, Mr. Reagan continued serving as a consulting employee in an advisory capacity from July 5, 2021, through the end of 2021. Ms. Schmanske served as President, Intelligence Group until July 12, 2021, when she was appointed as Chief Corporate Operations Officer. Ms. Schmanske’s compensation was not modified as a result of her transition to Chief Corporate Operations Officer. In this CD&A, the “Committee” refers to the Human Resources and Compensation Committee of the Board of Directors, which is responsible for overseeing the compensation programs for all of our executives. Our executive compensation programs are designed to align the interests of senior management with stockholders by tying a significant portion of their potential compensation to the achievement of challenging financial performance 24 | Compensation Discussion & Analysis The following Pay Element Description and Purpose Time Period Metrics u Fixed cash compensation recognizing individual performance, time in role, scope of responsibility, leadership skills and experience. u Pay aligned to experience and job scope, generally targeted to median of applicable market data u Reviewed annually and adjusted when appropriate. u Variable cash compensation based on performance against annually established targets and individual u Financial (80%) - Adjusted Operating Income (40%) u Designed to reward executives for annual performance on key operational and financial measures, as well as individual performance. u Personal (20%) Personal Long-Term Equity Incentive Performance Shares Awards (“PSAs”) (50%) u Distributed in u Return (50%) u Revenue (50%) Performance Restricted Stock Units (30%) u u Stock Options (20%) u Rewards longer-term stock price u Stock 2022 Proxy Statement | 25 Compensation Discussion & Analysis Pay Composition We believe that executive pay should be largely variable, equity-based, and tied to pre-set performance goals, and this is demonstrated in our pay mix and design. Limited fixed compensation. Base salary is the only component of “fixed” compensation for our named executive officers and represents a significantly smaller portion of executive pay than “variable” compensation—representing a range between 10% for our Chief Executive Officer and 28% for the other named executive officers (except for Mr. Reagan, whose fixed compensation was set at 50% as a result of his anticipated retirement). Predominantly equity-based pay. The majority of executive pay takes the form of long-term equity incentives—a mix of performance shares, PRSUs, and stock options-ranging from 50% to 75% of target total direct compensation (except for Mr. Reagan, who did not receive equity awards during fiscal 2021 as a result of his anticipated retirement). This reflects our belief that equity should comprise the largest component of executive pay. Focus on pre-set financial performance goals and stock price appreciation. The vast majority of the annual cash incentive—80% of the target opportunity—is tied to pre-set quantifiable goals. Similarly, 80% of the target opportunity for long-term incentives are tied to preset goals: 50% in the form of three-year performance share program awards, and 30% in the form of PRSUs. The remaining 20% of the target opportunity for long-term incentives is in the form of stock options, which will not yield value unless the stock price increases from the grant date. The chart below depicts each principal element of target compensation as a percentage of total direct compensation for each of our named executive officers for 2021. Percentages shown for Mr. Cage and Mr. Reagan reflect (a) Mr. Cage’s target compensation as Controller until July 4, 2021, and Chief Financial Officer beginning July 5, 2021, and (b) Mr. Reagan’s compensation as Chief Financial Officer until July 4, 2021, and as a consulting employee beginning July 5, 2021. Business Performance Highlights for 2021 Relating to Pay Our business performance in 2021 was strong, meeting or exceeding our expectations and resulting in above-target payouts for our named executive officers under our annual cash incentive program. Despite the ongoing impacts of COVID-19 and an extended continuing resolution, we achieved industry-leading levels of organic growth and expanded profitability. In addition, we enhanced our market presence during the year with strategic acquisitions and investments that added important technical capabilities. We achieved total backlog of $34,455 million, or 103% of our target for the year, giving us a strong foundation for growth. Adjusted operating income reached $1,409 million, or 102% of target. We also achieved 132% of our free cash flow target, reflecting strong performance across all our operational segments. We provide additional information regarding the metrics used in our compensation program in “Annual Cash Incentive Awards for Fiscal 2021” on page 27. 26 | 2022 Proxy Statement Compensation Discussion & Analysis Compensation Decisions for Fiscal 2021 Base Salary The Committee reviews executive officers’ base salaries annually or at the time of promotion or a substantial change in responsibilities based on the criteria described above. For fiscal 2021, the Committee considered its independent consultant’s analysis of salary levels for comparable positions in the compensation peer group based on proxy and survey data. Individual base salary amounts also reflect the Committee’s judgment with respect to each executive officer’s level of responsibility, individual performance, experience and other factors, including internal equity considerations, the individual’s historical compensation and any retention concerns. At the beginning of 2021 the Committee approved increases in the base salaries for all of our named executive officers in order to bring them closer to the market median of our compensation peer group. 2020 Salary 2021 Salary(2) % Increase $ Increase Roger A. Krone $1,200,000 $1,234,000 3% $34,000 Christopher R. Cage(1) $360,000 $550,000 53% $190,000 James C. Reagan(3) $660,000 $660,000 $— Gerard A. Fasano $560,000 $590,000 5% $30,000 Jerald S. Howe, Jr. $610,000 $634,400 4% $24,400 M. Victoria Schmanske $540,000 $570,000 6% $30,000 Mr. Cage’s base salary was increased in March 2021 from $360,000 to $380,000. In July 2021, Mr. Cage’s base salary was increased from $380,000 to $550,000 as a result of his promotion to Chief Financial Officer. Annual salary increases become effective in March of each year. Accordingly, amounts shown may differ from the annual salary information included in the “Summary Compensation Table” on page 39. Reflects the base salary approved for Mr. Reagan at the beginning of 2021 for his role as Chief Financial Officer. Annual Cash Incentive Awards for Fiscal 2021 We provided annual cash incentive awards to executives for performance during fiscal 2021 based on the achievement of pre-established financial and personal performance goals and other relevant factors. 2022 Proxy Statement | 27 Compensation Discussion & Analysis Performance Measures and Weightings. Our annual cash incentive plan for fiscal 2021 was designed to incentivize and reward both company financial performance and individual contributions to enterprise goals. The intended purpose and relative weightings of the performance goals are shown below: ($ in millions) 2020 Results 2021 Target % Change Total Backlog $31,912 $33,512 5.01% Adjusted Operating Income $1,247 $1,377 10.43% Free Cash Flow $1,151 $700 (39.18)% Personal Goals.We believe that individual contributions towards other enterprise goals are responsible for the achievement of our financial goals over time. Accordingly, non-formulaic personal goals represent 20% of the target opportunity under our annual cash incentive program, in order to encourage individual efforts in an array of areas that we believe will ultimately lead to improved financial performance for the company. Award Payout Ranges.Payout opportunities for our named executive officers for fiscal 2021 ranged from 80% to 150% of base salary rates. Potential for each financial goal ranged from 60% at threshold performance (paid only when at least 80% of the objective is achieved) to 150% at maximum performance (paid when 125% or more of the objective is achieved), with the payout for performance between these levels interpolated on a straight-line basis. In addition, failure to achieve threshold performance of at least 70% of our annual adjusted operating income goal for the fiscal year would result in no payout for the financial goals portion of the annual cash incentive. 28 | 2022 Proxy Statement Compensation Discussion & Analysis Annual Incentive Payout Determination for Fiscal 2021 Financial Achievement Levels.The Committee established the performance targets for our annual cash incentive program at the beginning of the fiscal year. For our named executive officers, the targeted enterprise financial performance and actual performance for fiscal 2021 were: ($ in millions) Target Actual Achievement Level Total Backlog $33,512 $34,455 103% Adjusted Operating Income (1) $1,377 $1,409 102% Free Cash Flow $700 $927 132% Weighted Financial Performance Achievement Level: 109% Adjusted operating income is not a measure of financial performance under generally accepted accounting principles (“GAAP”) in the United States. We believe that adjusted operating income provides useful information to management and stockholders as it provides another measure of the company’s profitability after adjusting for the impact of discrete events. A reconciliation of adjusted operating income to the most comparable GAAP measure is set forth below: ($ in millions) GAAP Operating Income $1,152 Amortization of Acquired Intangibles 226 Acquisition, Integration and Restructuring Costs 27 Asset Impairment Charges 4 Adjusted Operating Income $1,409 Personal Performance Results.In analyzing personal performance results, the Committee reviewed each individual’s level of achievement and also considered input from the Chief Executive Officer—or the independent directors with respect to the Chief Executive Officer’s performance. Any circumstance considered relevant by Committee members—or by the independent directors, or in the case of named executive officers other than the CEO, by the CEO—can be a factor in the determination, including the degree of success, the difficulty of achieving personal performance goals and their leadership behavior. Total Executive Payouts.The chart below provides the target annual cash incentive amounts established for each named executive officer by the Committee, at the beginning of the year, as well as their actual payout amounts determined by the Committee at the end of the year. Because we surpassed the adjusted operating income goal threshold of 70% of target by achieving 102%, the Committee approved the payout of awards under the annual incentive plan. Actual payout amounts for fiscal 2021 ranged between 111% and 129% of target. Information on all of the annual cash incentive payouts for fiscal 2021 is provided below: Target Payout from Payout from Total Payout Roger A. Krone $1,851,000 $1,690,038 $444,240 $2,134,278 Christopher R. Cage (1) $368,020 $380,222 $95,056 $475,278 James C. Reagan (1) $333,630 $304,614 $80,070 $384,685 Gerard A. Fasano $531,000 $493,830 $132,750 $626,580 Jerald S. Howe, Jr. $507,520 $463,387 $126,880 $590,267 M. Victoria Schmanske $513,000 $454,585 $113,646 $568,231 2022 Proxy Statement | 29 Compensation Discussion & Analysis Target compensation shown for Mr. Cage and Mr. Reagan reflect (a) Mr. Cage’s target cash incentive as Controller until July 4, 2021, and as Chief Financial Officer beginning July 5, 2021, and (b) Mr. Reagan’s target cash incentive as Chief Financial Officer until July 4, 2021, and as a consulting employee beginning July 5, 2021. Actual total payout amount shown for Mr. Cage is based on his base salary as the Chief Financial Officer pro-rated for time spent in each of the Controller and Chief Financial Officer roles. Long-Term Incentive Award Grants in 2021 Long-term incentive awards are granted to motivate future performance, create long-term alignment with stockholders, and for retention purposes. For fiscal 2021, each named executive officer received a mix of long-term incentive awards comprised of PSAs (50%), PRSUs (30%) and stock options (20%) (except for Mr. Reagan). The grant date fair value of each award was determined based on market data and consideration of each executive officer’s level of experience, position and responsibilities. We do not generally consider an executive officer’s current stock holdings or outstanding awards in making annual grants. Performance Share Awards. For all of our named executive officers, 50% of the targeted total value of long-term incentive awards granted was in the form of three-year PSAs. Shares are issued under those awards at the end of the three-year performance period (from fiscal 2021 through fiscal 2023 for awards granted in fiscal 2021) only to the extent that the company achieves two specific three-year financial performance goals: 50% of the award is tied to the achievement of relative total stockholder return goals, a measurement of growth in stockholder value; and 50% of the award is tied to achievement of revenue goals. Performance for each of these goals is measured on a cumulative basis over the total performance period rather than annually for each year of the performance period. PSAs strengthen the alignment between the compensation of our named executive officers and Company’s performance by linking the ultimate payout to pre-established absolute and relative performance goals. Performance Restricted Stock Units. PRSUs comprise 30% of the targeted total value of long-term incentive awards granted to our named executive officers. PRSUs vest 25% each year on the anniversary of the grant date, but are forfeited if we fail to achieve a pre-established performance goal for the first year. The performance goal for fiscal 2021 was adjusted earnings per share of at least $3.16. The Committee determined that this goal was met and therefore the PRSUs granted in fiscal 2021 will be eligible to vest over four years (with such time-vesting to have begun on the date that the PRSU was granted). Stock Options. The final 20% of targeted total long-term incentive award value granted to our named executive officers is in stock options.Stock options are an effective means of linking rewards to the creation of stockholder value over a longer term. We believe that stock options motivate our executives to build stockholder value because they may realize value only if our stock appreciates during the option term. The options vest 25% each year on the anniversary of the grant date and expire on the seventh anniversary of the grant date. Promotion Awards. In August 2021, Mr. Cage received an award of PRSUs valued at approximately $227,425, PSAs valued at approximately $358,119 and stock options valued at approximately $151,618, all granted in connection with Mr. Cage’s promotion to Chief Financial Officer. The awards vest on the same terms as other PRSUs, PSAs and stock options granted to Mr. Cage in 2021. 30 | 2022 Proxy Statement Compensation Discussion & Analysis Total 2021 Equity Grant Values.The following table sets forth the target value and corresponding number of shares for the long-term incentive awards granted to our named executive officers in 2021. Details about these grants can be found in the “Grants of Plan-Based Awards” table in the “Executive Compensation” section of this proxy statement. Performance Shares Performance RSUs Stock Options Target Value Target Target Units Granted Target Value Options Granted Total 2021 Roger A. Krone $ 4,750,900 53,333 $ 2,850,540 32,000 $ 1,900,360 94,971 $9,501,800 Christopher R. Cage $550,000 5,942 $330,000 3,565 $220,000 11,141 $1,100,000 James C. Reagan $— — $— — $— — $— Gerard A. Fasano $590,000 6,624 $354,000 3,974 $236,000 11,795 $1,180,000 Jerald S. Howe, Jr. $555,100 6,232 $333,060 3,739 $222,040 11,097 $1,110,200 M. Victoria Schmanske $570,000 6,399 $342,000 3,840 $228,000 11,395 $1,140,000 Performance Equity Vesting in 2021 Determination of Performance Shares Earned for the 2019—2021 Performance Period. In December 2018, the Committee established the long-term performance goals for the performance share program measuring the three-year performance period covering fiscal years 2019 through 2021. The vesting and payout for these performance shares was contingent on the achievement of a relative total shareholder return metric (weighted 50%) and a revenue goal (weighted 50%), with all metrics measuring cumulative results over the three-year performance period. At its February 2022 meeting, the Committee approved a payout score of 104.63% for the 2019 through 2021 performance period. The tables below show the relative total shareholder return and revenue goals at target, and the actual results for the three-year performance period: Payout Level Total Stockholder Return TSR Relative to Results (1) % Achieved No Payout: Threshold Pay: Target Pay: Maximum Pay: Payout Level Achievement of Revenue Goals Results (2) % Achieved No Payout: 0% Below 50% of Three-Year Revenue Target $16.915B Threshold Pay: 50% 50% of Three-Year Revenue Target $16.915B Target Pay: 100% 100% of Three-Year Revenue Target $33.830B $ 34.439B 102% Maximum Pay: 150% 150% of Three-Year Revenue Target $50.745B Our relative TSR score reflects the aggregate change in the 20-day average closing price of our stock compared to the median of our compensation peer group, as measured at the beginning and end of the three-year performance period, taking into account the value returned to stockholders in the form of dividends, assumed to be reinvested on the distribution date on a pre-tax basis. Our total stockholder return during the three-year period from 2019 to 2021 was 67.49%, compared to 60.04% for the median of our compensation peer group, resulting in a payout factor of 107.45%. Revenue reported in publicly filed financial statements. 2022 Proxy Statement | 31 Compensation Discussion & Analysis Consulting Employee Agreement As part of his anticipated retirement from the Company and upon stepping down from his Chief Financial Officer role, Mr. Reagan began serving in an advisory capacity after his retirement on July 4, 2021, through the end of 2021. In connection with his advisory role, the Company entered into a Consulting Employee Agreement with Mr. Reagan, dated May 3, 2021, and effective July 5, 2021. Pursuant to the Consulting Employee Agreement, Mr. Reagan was eligible to receive $317.31 per hour in consideration for consulting services, with working hours not to exceed 1,860 hours in any 12-month period. In addition, the Consulting Employee Agreement provided certain benefits to Mr. Reagan, including continued eligibility for medical insurance and continued participation in the Leidos Retirement Plan. Other Benefits In addition to the elements of direct compensation described above, we also provide our executive officers with Health and Our executive officers are Retirement and Financial Advisory Benefits Our executive officers are entitled Deferred Compensation Plans To provide other tax-deferred means to save for retirement, we maintain certain deferred compensation plans that allow our named executive officers and other eligible participants to elect to defer all or a portion of any cash or certain equity incentive awards granted to them under our cash incentive or stock plans. In addition, we maintain a deferred compensation plan that allows our named executive officers and other eligible participants to elect to defer a portion of their In determining the amounts of direct compensation (base salary, annual and long-term incentives) to be awarded to our executive officers, we considered the executive officer’s management, individual performance as measured against performance goals and criteria, and competitive market data for our compensation peer group as well as third-party survey data for the general industry and the technology industry. The Committee reviews and approves the amounts of direct compensation to be provided to our executive officers for each fiscal year. Executive officers do not propose their own compensation. 32 | 2022 Proxy Statement Compensation Discussion & Analysis At the beginning of each fiscal year, the Committee reviews and approves: The amount of base salary and target incentive opportunities to be provided for the upcoming year; The payout range for the annual cash incentive awards that may be earned for the year and the performance goals and criteria upon which the amounts of the awards will be determined; The payout range for The mix and amount of In approving payout ranges for our incentive programs, we determine the levels of performance that must be achieved in order to receive a threshold, target and maximum payout At the beginning of 2020 Salary 2021 Salary(2) % Increase $ Increase Roger A. Krone $1,200,000 $1,234,000 3% $34,000 Christopher R. Cage(1) $360,000 $550,000 53% $190,000 James C. Reagan(3) $660,000 $660,000 $— Gerard A. Fasano $560,000 $590,000 5% $30,000 Jerald S. Howe, Jr. $610,000 $634,400 4% $24,400 M. Victoria Schmanske $540,000 $570,000 6% $30,000 Mr. Cage’s base salary was increased in March 2021 from $360,000 to $380,000. In July 2021, Mr. Cage’s base salary was increased from $380,000 to $550,000 as a result of his promotion to Chief Financial Officer. Annual salary increases become effective in March of each year. Accordingly, amounts shown may differ from the annual salary information included in the “Summary Compensation Table” on page 39. Reflects the base salary approved for Mr. Reagan at the beginning of 2021 for his role as Chief Financial Officer. Annual Cash Incentive Awards for Fiscal 2021 We provided annual cash incentive awards to executives for performance during fiscal 2021 based on the achievement of pre-established financial and 2022 Proxy Statement | 27 Compensation Discussion & Analysis Performance Measures and Weightings. Our annual cash incentive plan for fiscal 2021 was designed to incentivize and reward both company financial performance and individual contributions to enterprise goals. The intended purpose and relative weightings of Financial Performance Targets.Because our financial results are considered the most important factors in setting pay and are objectively measurable, we weight these metrics most heavily; financial goals represent 80% of the target opportunity under our annual cash incentive program. To the extent that performance for a financial metric is less than 80% of target (threshold performance) no bonus amount would be paid with respect to that metric. Maximum payout (150% of target) for each component is provided for performance at or above 125% of target. The Committee generally seeks to set financial performance goals for the annual cash incentive program ($ in millions) 2020 Results 2021 Target % Change Total Backlog $31,912 $33,512 5.01% Adjusted Operating Income $1,247 $1,377 10.43% Free Cash Flow $1,151 $700 (39.18)% Personal Goals.We believe that individual contributions towards other enterprise goals are Award Payout Ranges.Payout opportunities for our named executive officers for fiscal 2021 ranged from 80% to 150% of base salary rates. Potential for each financial goal ranged from 60% at threshold performance (paid only when at least 80% of the objective is achieved) to 150% at maximum performance (paid when 125% or more of the objective is achieved), with the payout for performance between these levels interpolated on a straight-line basis. In addition, failure to achieve threshold performance of at least 70% of our annual adjusted operating 28 | 2022 Proxy Statement Compensation Discussion & Analysis Annual Incentive Payout Determination for Fiscal 2021 Financial Achievement Levels.The Committee established the performance targets for our annual cash incentive program at the beginning of the fiscal ($ in millions) Target Actual Achievement Level Total Backlog $33,512 $34,455 103% Adjusted Operating Income (1) $1,377 $1,409 102% Free Cash Flow $700 $927 132% Weighted Financial Performance Achievement Level: 109% Adjusted operating income is not a measure of financial performance under generally accepted accounting principles (“GAAP”) in the United States. We believe that adjusted operating income provides useful information to management and stockholders as it provides another measure of the company’s profitability after adjusting for the impact of discrete events. A reconciliation of adjusted operating income to the most comparable GAAP measure is set forth below: ($ in millions) GAAP Operating Income $1,152 Amortization of Acquired Intangibles 226 Acquisition, Integration and Restructuring Costs 27 Asset Impairment Charges 4 Adjusted Operating Income $1,409 Personal Performance Results.In analyzing personal performance results, the Committee Total Executive Payouts.The chart below provides the Target Payout from Payout from Total Payout Roger A. Krone $1,851,000 $1,690,038 $444,240 $2,134,278 Christopher R. Cage (1) $368,020 $380,222 $95,056 $475,278 James C. Reagan (1) $333,630 $304,614 $80,070 $384,685 Gerard A. Fasano $531,000 $493,830 $132,750 $626,580 Jerald S. Howe, Jr. $507,520 $463,387 $126,880 $590,267 M. Victoria Schmanske $513,000 $454,585 $113,646 $568,231 Compensation Discussion & Analysis Target compensation shown for Mr. Cage and Mr. Reagan reflect (a) Mr. Cage’s target cash incentive as Controller until July 4, 2021, and as Chief Financial Officer beginning July 5, 2021, and (b) Mr. Reagan’s target cash incentive as Chief Financial Officer until July 4, 2021, and as a consulting employee beginning July 5, 2021. Actual total payout amount shown for Mr. Cage is based on his base salary as the Chief Financial Officer pro-rated for time spent in each of the Controller and Chief Financial Officer roles. Long-Term Incentive Award Grants in 2021 Long-term incentive awards are granted to motivate future performance, create long-term alignment with stockholders, and for retention purposes. For fiscal 2021, each named executive officer received a mix of Performance Share Awards. For all of our named executive officers, 50% of the 50% of the 50% of the Performance for each of these goals is measured on a cumulative basis over the total performance period rather than annually for each year of the performance period. PSAs strengthen the alignment between the compensation of our named executive officers and Company’s performance by linking the ultimate payout to pre-established absolute and relative performance goals. Performance Restricted Stock Units. PRSUs comprise 30% of the targeted total value of long-term incentive awards granted to our named executive officers. PRSUs vest 25% each year on the anniversary of the grant date, but are forfeited if we fail to achieve a pre-established performance goal for the first year. The performance goal for fiscal 2021 was adjusted earnings per share of at least $3.16. The Committee determined that this goal was met and therefore the PRSUs granted in fiscal 2021 will be eligible to vest over four years (with such time-vesting to have begun on the date that the PRSU was granted). Stock Options. The final 20% of targeted total long-term incentive award value granted to our named executive officers is in stock options.Stock options are an effective means of linking rewards to the creation of stockholder value over a longer term. We believe that stock options motivate our executives to build stockholder value because they may realize value only if our stock appreciates during the option term. The options vest 25% each year on the anniversary of the grant date and expire on the seventh anniversary of the grant date. Promotion Awards. In August 2021, Mr. Cage received an award of PRSUs valued at approximately $227,425, PSAs valued at approximately $358,119 and stock options valued at approximately $151,618, all granted in connection with Mr. Cage’s promotion to Chief Financial Officer. The awards vest on the same terms as other PRSUs, PSAs and stock options granted to Mr. Cage in 2021. 30 | Compensation Discussion & Analysis Total 2021 Equity Grant Values. The Performance Shares Performance RSUs Stock Options Target Value Target Target Units Granted Target Value Options Granted Total 2021 Roger A. Krone $ 4,750,900 53,333 $ 2,850,540 32,000 $ 1,900,360 94,971 $9,501,800 Christopher R. Cage $550,000 5,942 $330,000 3,565 $220,000 11,141 $1,100,000 James C. Reagan $— — $— — $— — $— Gerard A. Fasano $590,000 6,624 $354,000 3,974 $236,000 11,795 $1,180,000 Jerald S. Howe, Jr. $555,100 6,232 $333,060 3,739 $222,040 11,097 $1,110,200 M. Victoria Schmanske $570,000 6,399 $342,000 3,840 $228,000 11,395 $1,140,000 Performance Equity Vesting in 2021 Determination of Performance Shares Earned for the 2019—2021 Performance Period. In December 2018, the Committee established the long-term performance goals for the performance share program measuring the three-year performance period covering fiscal years 2019 through 2021. The vesting and payout for these performance shares was contingent on the achievement of a relative total shareholder return metric (weighted 50%) and a revenue goal (weighted 50%), with all metrics measuring cumulative results over the three-year performance period. At its February 2022 meeting, the Committee approved a payout score of 104.63% for the 2019 through 2021 performance period. The tables Payout Level Total Stockholder Return TSR Relative to Results (1) % Achieved No Payout: Threshold Pay: Target Pay: Maximum Pay: Payout Level Achievement of Revenue Goals Results (2) % Achieved No Payout: 0% Below 50% of Three-Year Revenue Target $16.915B Threshold Pay: 50% 50% of Three-Year Revenue Target $16.915B Target Pay: 100% 100% of Three-Year Revenue Target $33.830B $ 34.439B 102% Maximum Pay: 150% 150% of Three-Year Revenue Target $50.745B Our relative TSR score reflects the aggregate change in the 20-day average closing price of our stock compared to the median of our compensation peer group, as measured at the beginning and end of the three-year performance period, taking into account the value returned to stockholders in the form of dividends, assumed to be reinvested on the distribution date on a pre-tax basis. Our total stockholder return during the three-year period from 2019 to 2021 was 67.49%, compared to 60.04% for the median of our compensation peer group, resulting in a payout factor of 107.45%. Revenue reported in publicly filed financial statements. 2022 Proxy Statement | 31 Compensation Discussion & Analysis Consulting Employee Agreement As part of his anticipated retirement from the Company and upon stepping down from his Chief Financial Officer role, Mr. Reagan began serving in an advisory capacity after his retirement on July 4, 2021, through the end of 2021. In connection with his advisory role, the Company entered into a Consulting Employee Agreement with Mr. Reagan, dated May 3, 2021, and effective July 5, 2021. Pursuant to the Consulting Employee Agreement, Mr. Reagan was eligible to receive $317.31 per hour in consideration for consulting services, with working hours not to exceed 1,860 hours in any 12-month period. In addition, the Consulting Employee Agreement provided certain benefits to Mr. Reagan, including continued eligibility for medical insurance and continued participation in the Leidos Retirement Plan. Other Benefits In addition to the elements of direct compensation described above, we also provide our executive officers with the following benefits: Health and Welfare Benefits Our executive officers are entitled to participate in all health and welfare plans that we generally offer to all of our eligible employees, which provide medical, dental, health, group term life insurance and disability benefits. Beginning in 2020, the Committee approved a program that extends to our executive officers the ability to participate in a comprehensive voluntary annual health screening program. We believe that these health and welfare benefits are reasonable in scope and amount and are of the kind typically offered by other companies against which we compete for executive talent. For 2021, Ms. Schmanske waived participation in the medical coverage plan and health screening program and Mr. Fasano waived participation in the health screening program. Retirement and Financial Advisory Benefits Our executive officers are entitled to participate in the same tax-qualified defined contribution retirement plan that is generally available to all of our eligible employees, subject to certain limits on the amounts that each participant may contribute each year. We make matching contributions to eligible participants’ retirement plan accounts based on a percentage of their “eligible compensation” under applicable rules. We believe that this retirement program assists our executives in saving for their retirement in a tax-effective manner. We also provide financial advisory services to our executive officers. Mr. Reagan was not eligible to receive financial advisory benefits upon his departure from the Chief Financial Officer role. Ms. Schmanske and Mr. Fasano waived participation in the financial advisory services program. Deferred Compensation Plans To provide other tax-deferred means to save for retirement, we maintain certain deferred compensation plans that allow our named executive officers and other eligible participants to elect to defer all or a portion of any cash or certain equity incentive awards granted to them under our cash incentive or stock plans. In addition, we maintain a deferred compensation plan that allows our named executive officers and other eligible participants to elect to defer a portion of their eligible salary. The deferred balances under the How We Determine Direct Compensation In determining the amounts of direct compensation (base salary, annual and long-term incentives) to be awarded to our executive officers, we considered the Company’s overall performance, the performance of operating units under the executive officer’s management, individual performance as measured against performance goals and criteria, and competitive market data for our compensation peer group as well as third-party survey data for the general industry and the technology industry. The Committee reviews and approves the amounts of direct compensation to be provided to our executive officers for each fiscal year. Executive officers do not propose their own compensation. 32 | 2022 Proxy Statement Compensation At the beginning of each fiscal year, the Committee reviews and approves: The amount of base salary and target incentive opportunities to be provided for the upcoming year; The payout range for the annual cash incentive awards that may be earned for the year and the performance goals and criteria upon which the amounts of the awards will be determined; The payout range for PSAs that may be earned for the performance period beginning in that fiscal year and the performance goals and criteria upon which the amounts of the PSAs and PRSU awards for the relevant performance period will be determined; and The mix and amount of long-term incentive awards (including PSAs, PRSUs and stock options) to be granted to our executive officers. In approving payout ranges for Base Salary The Committee reviews executive officers’ base salaries annually or at the time of promotion or a substantial change in responsibilities based on the criteria described above. At the beginning of 2020 Salary 2021 Salary(2) % Increase $ Increase Roger A. Krone $1,200,000 $1,234,000 3% $34,000 Christopher R. Cage(1) $360,000 $550,000 53% $190,000 James C. Reagan(3) $660,000 $660,000 $— Gerard A. Fasano $560,000 $590,000 5% $30,000 Jerald S. Howe, Jr. $610,000 $634,400 4% $24,400 M. Victoria Schmanske $540,000 $570,000 6% $30,000 Mr. Cage’s base salary was increased in March 2021 from $360,000 to $380,000. In July 2021, Mr. Cage’s base salary was increased from $380,000 to $550,000 as a result of his promotion to Chief Financial Officer. Annual salary increases become effective in March of each year. Accordingly, amounts shown may differ from the annual salary information included in the “Summary Compensation Table” on page 39. Reflects the base salary approved for Mr. Reagan at the beginning of 2021 for his role as Chief Financial Officer. Annual Cash Incentive Awards for Fiscal 2021 We provided annual cash incentive awards to executives for performance during fiscal 2021 based on the achievement of Compensation Discussion & Analysis 2016 Salary 2017 Salary % Increase $ Increase Roger A. Krone James C. Reagan Timothy J. Reardon Jonathan W. Scholl Angela L. Heise Performance Measures and Weightings. Our annual cash incentive plan for fiscal Financial ($ in millions) 2020 Results 2021 Target % Change Total Backlog $31,912 $33,512 5.01% Adjusted Operating Income $1,247 $1,377 10.43% Free Cash Flow $1,151 $700 (39.18)% Personal Goals.We believe that individual contributions towards other enterprise goals are responsible for the achievement of our financial goals Award Payout Ranges.Payout opportunities for our named executive officers for fiscal 2021 ranged from 80% to 150% of base salary rates. Potential for each financial goal ranged from 60% at threshold performance (paid only when at least 80% of the objective is achieved) to 150% at maximum performance (paid when 125% or more of the objective is achieved), with the payout for performance between these levels interpolated on a straight-line basis. In addition, failure to achieve threshold performance of at least 70% of our annual adjusted operating income goal for the fiscal year would result in no payout for the financial goals portion of the annual cash incentive. Compensation Discussion & Analysis Financial ($ in millions) Target Actual Achievement Level Total Backlog $33,512 $34,455 103% Adjusted Operating Income (1) $1,377 $1,409 102% Free Cash Flow $700 $927 132% Weighted Financial Performance Achievement Level: 109% Adjusted ($ in millions) GAAP Operating Income $ Amortization of Acquired Intangibles 226 Acquisition, Integration and Restructuring 27 4 Adjusted Operating Income $ Target Payout from Payout from Total Payout Roger A. Krone $1,851,000 $1,690,038 $444,240 $2,134,278 Christopher R. Cage (1) $368,020 $380,222 $95,056 $475,278 James C. Reagan (1) $333,630 $304,614 $80,070 $384,685 Gerard A. Fasano $531,000 $493,830 $132,750 $626,580 Jerald S. Howe, Jr. $507,520 $463,387 $126,880 $590,267 M. Victoria Schmanske $513,000 $454,585 $113,646 $568,231 Compensation Discussion & Analysis Target Payout from Payout from Total Payout Roger A. Krone James C. Reagan Timothy J. Reardon Jonathan W. Scholl Angela L. Heise Target compensation shown for Mr. Cage and Mr. Reagan reflect (a) Mr. Cage’s target cash incentive as Controller until July 4, 2021, and as Chief Financial Officer beginning July 5, 2021, and (b) Mr. Reagan’s target cash incentive as Chief Financial Officer until July 4, 2021, and as a consulting employee beginning July 5, 2021. Actual total payout amount shown for Mr. Cage is based on his base salary as the Chief Financial Officer pro-rated for time spent in each of the Controller and Chief Financial Officer roles. Long-Term Incentive Performance Share Awards. For all of our 50% of the award is tied to the achievement of relative total stockholder return goals, a measurement of growth in stockholder value; and 50% of the award is tied to achievement of revenue goals. Performance for Target Value Target Shares Roger A. Krone James C. Reagan Timothy J. Reardon Jonathan W. Scholl Angela L. Heise Payout Level Achievement of Adjusted Operating Income Goals(1) Results % Achieved No Payout: Threshold Pay: Target Pay: Maximum Pay: Payout Level Total Stockholder Return Relative to Peer Group Median Results (1) % Achieved No Payout: Threshold Pay: Target Pay: Maximum Pay: Performance Restricted Stock Units. PRSUs comprise 30% of the targeted total value of long-term incentive awards granted to our named executive officers. PRSUs stock options. Promotion Awards. In August 2021, Mr. Cage received an award of PRSUs valued at approximately $227,425, PSAs valued at approximately $358,119 and stock options valued at approximately $151,618, all granted in connection with Mr. Cage’s promotion to Chief Financial Officer. The 30 | 2022 Proxy Statement Compensation Discussion & Analysis Total 2021 Equity Grant Values.The following table sets forth the target value and corresponding number of Performance Shares Performance RSUs Stock Options Target Value Target Target Units Granted Target Value Options Granted Total 2021 Roger A. Krone $ 4,750,900 53,333 $ 2,850,540 32,000 $ 1,900,360 94,971 $9,501,800 Christopher R. Cage $550,000 5,942 $330,000 3,565 $220,000 11,141 $1,100,000 James C. Reagan $— — $— — $— — $— Gerard A. Fasano $590,000 6,624 $354,000 3,974 $236,000 11,795 $1,180,000 Jerald S. Howe, Jr. $555,100 6,232 $333,060 3,739 $222,040 11,097 $1,110,200 M. Victoria Schmanske $570,000 6,399 $342,000 3,840 $228,000 11,395 $1,140,000 Performance Equity Vesting in 2021 Determination of Performance Shares Earned for the 2019—2021 Performance Period. In December 2018, the Committee At its February Payout Level Total Stockholder Return TSR Relative to Results (1) % Achieved No Payout: Threshold Pay: Target Pay: Maximum Pay: Payout Level Achievement of Revenue Goals Results (2) % Achieved No Payout: 0% Below 50% of Three-Year Revenue Target $16.915B Threshold Pay: 50% 50% of Three-Year Revenue Target $16.915B Target Pay: 100% 100% of Three-Year Revenue Target $33.830B $ 34.439B 102% Maximum Pay: 150% 150% of Three-Year Revenue Target $50.745B Our relative TSR score reflects the aggregate change in the 20-day average closing price of our stock compared to the median of our compensation peer group, as measured at the beginning and end of the three-year performance period, taking into account the value returned to stockholders in the form of dividends, assumed to be reinvested on the distribution date on a pre-tax basis. Our total stockholder return during the three-year period from 2019 to 2021 was 67.49%, compared to 60.04% for the median of our compensation peer group, resulting in a payout factor of 107.45%. Revenue reported in publicly filed financial statements. 2022 Proxy Statement | 31 Compensation Discussion & Analysis Consulting Employee Agreement As part of his anticipated retirement from the Company and upon stepping down from his Chief Financial Officer role, Mr. Reagan began serving in an advisory capacity after his retirement on July 4, 2021, through the end of 2021. In connection with his advisory role, the Company entered into a Consulting Employee Agreement with Mr. Reagan, dated May 3, 2021, and effective July 5, 2021. Pursuant to the Consulting Employee Agreement, Mr. Reagan was eligible to receive $317.31 per hour in consideration for consulting services, with working hours not to exceed 1,860 hours in any 12-month period. In addition, the Consulting Employee Agreement provided certain benefits to Mr. Reagan, including continued eligibility for medical insurance and continued participation in the Leidos Retirement Plan. Other Benefits In addition to the elements of direct compensation described above, we also provide our executive officers with the following benefits: Health and Welfare Benefits Our executive officers are entitled to participate in all health and welfare plans that we generally offer to all of our eligible employees, which provide medical, dental, health, group term life insurance and disability benefits. Beginning in 2020, the Committee approved a program that extends to our executive officers the ability to participate in a comprehensive voluntary annual health screening program. We believe that these health and welfare benefits are reasonable in scope and amount and are of the kind typically offered by other companies against which we compete for executive talent. For 2021, Ms. Schmanske waived participation in the medical coverage plan and health screening program and Mr. Fasano waived participation in the health screening program. Retirement and Financial Advisory Benefits Our executive officers are entitled to participate in the same tax-qualifieddefined contribution retirement plan that is generally available to all of our eligible Deferred Compensation Plans To provide othertax-deferred means to save for retirement, we maintain certain deferred compensation plans that allow our named executive officers and other eligible participants to elect to defer all or a portion of any cash or certain equity incentive awards granted to them under our cash incentive or stock plans. In addition, we maintain a deferred compensation plan that allows our named executive officers and other eligible participants to elect to defer a portion of their eligible salary. The In determining the amounts of direct compensation (base salary, annual and Compensation Discussion & Analysis At the beginning of each fiscal year, the Committee reviews and approves: The amount of base salary and target incentive opportunities to be provided for the upcoming year; The payout range for the annual cash incentive awards that may be earned for the year and the performance goals and criteria upon which the amounts of the awards will be determined; The payout range for PSAs that may be earned for the performance period beginning in that fiscal year and the performance goals and criteria upon which the amounts of the PSAs and PRSU awards for the relevant performance period will be determined; and The mix and amount of long-term incentive awards (including PSAs, PRSUs and stock options) to be granted to our executive officers. In approving payout ranges for our incentive programs, we determine the levels of performance that must be achieved in order to receive a threshold, target and maximum payout amount for each goal. Upon completion of each fiscal year, the Committee approves the payment, if any, of cash incentive awards and the number of performance shares, if any, that are earned based upon the achievement of the predetermined performance goals and criteria for the performance cycles just completed. Company and Operational Sector Performance Our overall enterprise performance (or a combination of company enterprise and business group performance for executive officers with operational responsibilities) determines the payout for 80% of the target amount of any annual cash incentive awards and for 100% of any PSAs and PRSUs. Payout amounts are principally determined based upon the Company’s or group’s achievement of financial and operating objectives set at the beginning of the fiscal year, but the Committee retains the discretion to reduce the payouts when appropriate. The maximum score for performance on any of the financial metrics for the cash incentive awards and the performance share program awards is 150%. The earnings per share metric for the PRSUs is a hurdle that, when met, results only in continued vesting of the PRSUs; results for this metric do not result in an adjustment to the amount of the PRSUs. Individual Performance Individual performance is a factor in setting base salaries, and individual leadership behaviors and the achievement of personal goals determine 20% of the target amount of any annual cash incentive award to be paid upon completion of the fiscal year for all of our named executive officers. In determining base salaries, the Committee reviews a performance assessment for each of our executive officers, as well as compensation recommendations provided by the Chief Executive Officer for the other named executive officers. The Committee also considers market data and information provided by its independent compensation consultant. In addition, in determining annual incentive amounts, the Committee considers whether the executive officer has achieved predetermined personal goals applicable to their organization, and the way in which those personal goals were achieved, as demonstrated through leadership behaviors. Personal performance goals and leadership behaviors relate to ethics and integrity, maintaining a top-tier workplace environment, collaboration, customer satisfaction and retention, business development in strategic areas and other financial and operating goals as appropriate. For purposes of the 2021 annual cash incentive, personal performance is scored on a range from 0% to 150% with a threshold of 50%. Performance below threshold with respect to personal goals would result in no payout (0%) related to the portion of the cash incentive based on personal performance. Performance of between 50% and 150% with respect to these goals for 2021 would result in a payout that is interpolated linearly between the 50% and 150% payout opportunity. Performance above the 150% level would not result in any additional payout. Assessing Chief Executive Officer Performance In determining compensation for our Chief Executive Officer, the Committee meets in executive session and evaluates his performance based on his achievement of performance objectives that were established and agreed upon at the beginning of the fiscal year. Input is received from the independent directors. The Committee also considers the Chief Executive 2022 Proxy Statement | 33 Compensation Discussion & Analysis Officer’s general leadership contributions towards the Company’s performance, including financial and operating results, development and achievement of strategic objectives, progress in building capability among the senior management team and leadership in corporate governance, environmental sustainability and social issues of importance to our stockholders, customers and employees. The Committee also considers market data and information provided by the Committee’s independent compensation consultant. The Committee determines the Chief Executive Officer’s compensation and then reviews his evaluation and compensation with the Board’s independent directors. The Independent Lead Director and the Chair of the Committee then present the Committee’s evaluation and compensation determination to the Chief Executive Officer. Comparable Market Compensation The Committee compares the amount of direct compensation that we provide to our executive officers to that provided by companies with whom we compete for executive talent in similar roles and with similar responsibilities. To assist with this effort, the Committee’s independent compensation consultant, FW Cook, conducts an annual review and benchmarking analysis of each element of target total direct compensation (including salary, cash and equity incentives) provided to our executive officers. In October 2020, FW Cook compared the target compensation provided to members of senior management against that provided by other publicly traded engineering, information technology, consulting and defense companies, which we refer to as our “compensation peer group,” as well as third-party survey data for the general industry and the technology industry. Compensation peer group companies are chosen for having a similar industry focus as ours and for competing with us for talent as well as business and stockholder investment. Furthermore, the compensation peer group is initially structured so that no company within the group has annual revenues smaller than 40% or greater than 250% of ours and a market capitalization within a reasonable range. Our compensation peer group is periodically reviewed and updated to ensure that the companies in our compensation peer group are strong business and talent competitors and are comparable in size. In July 2020, the Committee consulted with FW Cook and reviewed the compensation peer group to be used for setting fiscal 2021 target compensation. Collins Aerospace and Raytheon were removed from the prior year compensation peer group due to their acquisitions by United Technologies. L3 Technologies was removed from the prior year compensation peer group due to its acquisition by Harris. There were no other adjustments from the compensation peer group from the prior year. At the time the compensation peer group for fiscal 2021 was approved, the Company’s was at the 46th percentile for revenue and the 63rd percentile for market capitalization as compared to the new compensation peer group. Our Fiscal 2021 Compensation Peer Group u AECOM u Cognizant Technology Solutions u Northrop Grumman Corporation u Booz Allen Hamilton u Fluor Corporation u SAIC u CACI International u Huntington Ingalls Industries u Textron u Cerner Corporation u Jacobs Engineering Group u CGI u L3Harris Technologies The Committee considers market data and analysis when evaluating appropriate levels of target total direct compensation. To be competitive in the market for our executive-level talent, we generally: Target overall compensation for our executive officers at the market median, although the actual cash paid and equity incentive awards earned will vary based on actual financial and individual performance and may therefore generate compensation that is higher or lower than the market median; and Award higher levels of compensation, when appropriate, in recognition of the importance or uniqueness of the role of an executive officer or to address retention concerns. 34 | 2022 Proxy Statement Compensation Discussion & Analysis Other Policies and Considerations Stockholder Advisory Vote At our last annual stockholders’ meeting in April 2021, we held a non-binding stockholder advisory vote on the compensation of our named executive officers, commonly referred to as a say-on-pay vote. Our stockholders overwhelmingly approved the compensation of our named executive officers, with approximately 96% of stockholder votes cast in favor of our say-on-pay resolution. As we evaluated our compensation practices during fiscal 2021, we considered the support our stockholders expressed for our pay for performance compensation philosophy and that influenced our decision not to make any significant changes to our executive compensation programs this year. We continued to emphasize short- and long-term incentive compensation, targeted at competitive market median levels, with a substantial majority of total compensation based on the achievement of financial performance goals designed to deliver value for our stockholders. At our 2017 annual meeting of stockholders, our stockholders expressed a preference for an annual non-binding advisory vote on executive compensation, in accordance with our Board’s recommendation. Consistent with our stockholders’ preference in this regard, we expect to continue holding an advisory stockholder vote on the compensation of our named executive officers each year. The next vote on the frequency of the advisory vote is expected to occur at the 2023 annual stockholder meeting. Assessment of Risks in During fiscal Short-term incentive measures that are balanced among different financial measures, with targets that are intended to be achievable upon realistic levels of performance; Significant weighting towards long-term incentive compensation that promotes long-term decision-making and discourages short-term risk-taking; Maximum payouts that are capped at levels that do not reward excessive risk-taking; Goals that are based on company and group performance measures, which mitigates excessive risk-taking within any particular business unit; Leadership behaviors, such as ethics and integrity, that are specifically addressed in our short-term incentive programs; Our compensation recoupment policy that allows us to recover compensation based on financial results that are subsequently restated or if fraud or intentional misconduct is involved; and Our stock ownership guidelines that encourage a long-term perspective. Equity Award Grant Practices The Committee is responsible for the administration of our equity incentive programs pursuant to our 2017 Omnibus Incentive Plan in which our named executive officers participate. The Committee set the equity award fiscal 2022 Proxy Statement | 35 Compensation Discussion & Analysis quarterly dates on which any additional equity incentive awards could be made to eligible executive officers or other employees in connection with a new hire, a promotion, for retention or otherwise. The Committee approves all equity awards made to our directors and executive officers. The exercise price of any option grant is determined by reference to the fair market value of the shares on the grant date, which Stock Ownership Guidelines We Ownership Requirement CEO Other NEOs Because they must hold allafter-tax shares acquired under our equity incentive programs until they meet this ownership requirement, which we expect will take several years, we do not have specific time-based holding periods following the exercise of stock options or vesting of other equity awards. Shares counted towards ownership include shares owned outright, shares an executive officer has deferred pursuant to our nonqualified deferred compensation plans, shares (or share equivalents) an executive officer holds in our 401(k) plan, and unvested performance restricted stock units (once their performance hurdle has been met). Unvested performance share awards and unexercised stock options are not counted towards ownership levels. In Policy on Hedging and Short-Term or Speculative Transactions We have Compensation Recoupment Policy Under our compensation recoupment policy, the Committee may require members of senior management including our NEOs to return incentive compensation if there is a material restatement of the financial results upon which the incentive compensation was originally based. Our recoupment policy The policy also provides for recovery of incentive compensation from any employee involved in fraud or intentional misconduct, whether or not it results in a restatement of our financial results. In such a situation, the Committee would exercise its business judgment to determine what action it believes is appropriate under the circumstances. 36 | 2022 Proxy Statement Compensation Discussion & Analysis We may seek to recover the applicable amount of compensation from incentive compensation paid or awarded after the adoption of the policy, from future payments of incentive compensation, cancellation of outstanding equity awards and reduction in or cancellation of future equity awards. In cases of fraud or misconduct, we may also seek recovery from incentive compensation paid or awarded prior to the adoption of the policy. Post-Employment Benefits We do not maintain a defined benefit or other supplemental retirement plan that would entitle our executive officers to receive company-funded payments if they leave the company. Upon certain terminations of employment, including death, disability, retirement or a change in control, our named executive officers may be eligible for continued vesting of equity awards on the normal schedule or accelerated vesting in full or on apro-rata basis, depending on the nature of event and the type of award. The purpose of these provisions is to Potential Change in Control and Severance Benefits We have adopted a severance plan that would provide our executive officers with payments and benefits if their employment is involuntarily terminated by the company or is terminated following Our named executive officers, other than Mr. Krone, We have described the change in control and other termination benefits offered to Mr. Krone and our other named executive officers in the section entitled “Executive Compensation—Potential Tax Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code, as amended by the 2022 Proxy Statement | 37 Compensation Discussion & Analysis We do not expect the disallowance of a deduction for compensation paid to our named executive officers in excess of $1 million as Human Resources and Compensation Committee Report The Human Resources and Compensation Committee has reviewed and discussed with our management the CD&A included in this Proxy Statement. Based upon this review and discussion, the Committee recommended to the Board that the CD&A be included in this Proxy Statement. Gregory R. Dahlberg David G. Fubini Robert C. Kovarik, Jr. Gary S. May Surya N. Mohapatra The following table sets forth information regarding compensation earned by our named executive officers for service to us during fiscal Stock awards($)(3) Option awards($)(3) Non-equity incentive compen- sation($)(4) All other compen- sation($)(5)(6) Roger A. Krone Chief Executive Officer James C. Reagan Executive Vice President, Chief Financial Officer Timothy J. Reardon Group President, Defense and Intelligence Jonathan Scholl Group President, Health Angela L. Heise Group President, Civil Vincent A. Maffeo Former Executive Vice President, General Counsel Michael E. Leiter Former Executive Vice President Roger A. Krone Chief Executive Officer 2020 1,238,076 — 7,222,112 1,632,572 2,197,296 29,568 12,319,624 2019 1,179,327 — 5,871,934 1,425,814 2,178,923 15,273 10,671,271 Christopher R. Cage 2021 457,885 — 858,516 220,033 475,278 29,500 2,041,211 Executive Vice President, Chief Financial Officer James C. Reagan 2021 454,982 (2) — — — 384,685 28,021 867,688 Former Exec. Vice Pres., 2020 680,770 — 1,542,184 348,607 792,476 25,992 3,390,029 Chief Financial Officer 2019 646,538 — 1,342,212 325,902 791,603 4,569 3,110,824 Gerard A. Fasano 2021 584,231 — 941,718 236,018 626,580 18,742 2,407,289 Group President, Defense 2020 577,770 — 951,659 215,122 607,441 64,646 2,416,638 2019 525,865 — 880,847 213,881 508,738 64,358 2,193,689 Jerald S. Howe, Jr. 2021 629,708 — 886,004 222,051 590,267 32,621 2,360,651 Executive Vice President, 2020 628,847 — 907,100 205,023 585,952 24,566 2,351,488 General Counsel 2019 597,884 — 866,184 210,308 579,087 15,367 2,268,830 M. Victoria Schmanske 2021 564,231 — 909,819 228,014 568,231 14,500 2,284,795 Executive Vice President, Chief Corporate Operations Officer Compensation is provided only for fiscal years for which an individual qualified as a named executive This includes $97,137 paid to Mr. Reagan related to his accrued unused comprehensive leave These columns reflect the grant date fair value of each award granted in the stated fiscal years computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). The awards shown in the “Stock awards” column in the above table include restricted stock units and performance share For more information regarding our application of FASB ASC Topic 718, including the assumptions used in the calculation of these amounts, please refer to Note 17 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on February 15, 2022. Amounts shown in this column represent the actual amounts paid to the named executive officers under our cash incentive award programs for the stated fiscal years. The threshold, target and maximum payouts are shown in the “Grants of Amounts shown in this column for fiscal Leidos-sponsored events. Executive Compensation The following table sets forth information regarding the cash and equity incentive awards made to our named executive officers in fiscal All other options(3) All other units (#) Exercise awards(4) Grant date awards(5) ($) Target ($) Mr. Krone Mr. Reagan Mr. Reardon Mr. Scholl Ms. Heise Mr. Maffeo Mr. Leiter Mr. Krone Mr. Cage Mr. Reagan Mr. Fasano Mr. Howe Ms. Schmanske As described in our CD&A, cash incentive awards paid to our named executive officers for performance during fiscal The PRSUs in these columns represent restricted stock units which are subject to a performance goal (which, the Committee determined, was met in fiscal 2021) and the following vesting requirement: 25% of the Amounts in this column represent the number of shares of our common stock underlying options issued in fiscal Executive Compensation The Amounts represent the grant date fair value determined in accordance with FASB ASC Topic 718. For PRSUs and PSAs, the amount in this column is based on the probable outcome of the performance conditions, excluding the effect of any estimated forfeitures. These amounts do not reflect the value that may actually be realized by the recipient and do not reflect changes in our stock price after the date of grant. Executive Compensation Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding outstanding options, restricted stock units, performance restricted stock units and performance share awards issued pursuant to our 2017 Omnibus Incentive Plan and our 2006 Equity Incentive Plan that were held by our named executive officers at the end of fiscal Option Awards(1) Stock Awards Name Grant date Number of securities underlying unexercised options (exercisable)(#) Number of securities underlying unexercised options (unexercisable)(#) Option exercise price($) Option expiration date Grant date Number of shares of stock or units that have not vested(#)(2) Market value of shares of stock or units that have not vested($)(3) Equity incentive plan awards; number of unearned shares, units, or other rights that have not vested(#)(4) Equity incentive plan awards; market or payout value of unearned shares, units or other rights that have not vested($)(3) Mr. Krone Mr. Reagan Mr. Reardon Mr. Scholl Ms. Heise Mr. Maffeo Mr. Leiter Option Awards(1) Stock Awards Name Grant date Number of securities underlying unexercised options (exercisable)(#) Number of securities underlying unexercised options (unexercisable)(#) Option exercise price ($) Option expiration date Grant date Number of shares of stock or units that have not vested (#)(2) Market value of shares of stock or units that have not Equity incentive plan awards; number of unearned shares, units, or other rights that have not vested (#)(4) Equity incentive plan awards; market or payout value of unearned shares, units or other rights that have not vested($)(3) Mr. Krone Mr. Cage Mr. Reagan Mr. Fasano Mr. Howe Ms. Schmanske 42 | 2022 Proxy Statement Executive Compensation Information in these columns relates to options to purchase shares of common stock held by our named executive officers at the end of fiscal anniversaries of the grant date, except for Information in this column Based on Amounts in this column represent the target shares for performance share awards granted in Option Exercises and Stock Vested The following table sets forth information regarding shares of common stock acquired by our named executive officers during fiscal Number of shares acquired on exercise (#) Value realized on exercises ($)(1) Number of shares acquired on vesting(#)(2) Value realized on vesting ($)(1) Mr. Krone Mr. Reagan Mr. Reardon Mr. Scholl Ms. Heise Mr. Maffeo Mr. Leiter Number of shares acquired on exercise (#) Value realized on exercises ($)(1) Number of shares acquired on vesting(#)(2) Value realized on vesting ($)(3) Mr. Krone Mr. Cage Mr. Reagan Mr. Fasano Mr. Howe Ms. Schmanske Based on the closing price of our common stock on the day before the date of Includes accrued dividends and includes stock units deferred into our Key Executive Stock Deferral Plan that vested during fiscal Based on the closing price of our common stock on the day before the date of vesting. Includes accrued dividends. Nonqualified Deferred Compensation We provided benefits to our named executive officers during fiscal The Leidos Keystaff Deferral Plan allows eligible participants to elect to defer all or a portion of salary and any cash bonus granted to them under our cash incentive plan. We make no contributions to participants’ accounts under the Keystaff Deferral Plan. Participants can direct their deferrals into investment options similar to those available in the Leidos Retirement Plan The Leidos Key Executive Stock Deferral Plan allows eligible participants to elect to defer all or a portion of their cash or certain equity incentive awards granted to them under our cash incentive or stock incentive plans. Participant deferrals 2022 Proxy Statement | 43 Executive Compensation other forms are converted to stock units of our common stock. Participant accounts are credited with additional units corresponding to their outstanding account balance for each company dividend payable. We make no contributions to participants’ accounts under the Key Executive Stock Deferral Plan. Distributions under the Key Executive Stock Deferral Plan are then made to participants in shares of common stock corresponding to the number of vested stock units held for the participant. Vested deferred balances under this plan will be paid upon the elected specified date, retirement or separation from service. The Leidos 401(k) Excess Deferral Plan (Excess Plan) is apre-tax savings plan that, through December 31, 2016, allowed eligible participants to defer up to 20% of their eligible compensation after meeting the annual IRS contribution limit for the Leidos Retirement Plan. Bonuses were not eligible for deferral to the Excess Plan. The investment options in the Excess Plan are similar to those in the Leidos Retirement Plan but do not include the Leidos Stock Funds. Vested deferred balances under this plan will generally be paid following separation from service. The Leidos Deferred Compensation Plan for Former IS&GS Employees (Deferred Compensation Plan)is apre-tax savings plan that The following table sets forth information regarding deferrals under and aggregate earnings and withdrawals in fiscal Name Plan Executive contributions ($)(1) Registrant Aggregate earnings ($)(2) Aggregate withdrawals/ distributions ($) Aggregate balance at fiscal year- end ($)(3) Mr. Krone Keystaff Deferral Plan Excess Plan Mr. Reagan Keystaff Deferral Plan Key Executive Stock Deferral Plan Excess Plan Mr. Reardon Deferred Compensation Plan Mr. Scholl Not Applicable Ms. Heise Deferred Compensation Plan Mr. Maffeo Keystaff Deferral Plan Key Executive Stock Deferral Plan Excess Plan Mr. Leiter Not Applicable Executive contributions ($)(1) Aggregate earnings ($)(2) Aggregate withdrawals/ distributions ($) Aggregate balance at fiscal year- Mr. Krone Keystaff Deferral Plan Key Executive Stock Deferral Plan Excess Plan Mr. Cage Keystaff Deferral Plan Key Executive Stock Deferral Plan Excess Plan Mr. Reagan Keystaff Deferral Plan Key Executive Stock Deferral Plan Excess Plan Mr. Fasano Deferred Compensation Plan Mr. Howe Keystaff Deferral Plan Key Executive Stock Deferral Plan Ms. Schmanske Deferred Compensation Plan Amounts in this column represent the value of cash or stock awards deferred during fiscal With respect to the Keystaff Deferral Plan, Excess Plan and Deferred Compensation Plan, Amounts in this column represent the value of the holder’s accounts at the end of fiscal Executive Compensation stock held by the named executive officer based on Potential Payments Roger A. Krone, Chief Executive Officer Mr. Krone’s employment agreement Involuntary Termination/ Good Reason Without Change in Control With Change in Control Executive Payments and Benefits upon Termination or Change in Control Voluntary For Cause Without IS&GS Transaction(2) New Death Disability Compensation: Severance (Salary and Bonus)(4) Pro-rata Bonus(5) Long-term Incentives Performance Restricted Stock/Restricted Stock Units(6) Stock Options(7) Performance Share Awards(8) Benefits & Perquisites: Life Insurance, Healthcare(9) Outplacement Services(10) Applicable Scaleback(11) Mr. Cage, Mr. Reagan, Mr. All of our named executive officers, other than Mr. Krone, are covered by the Leidos Holdings, Inc. Executive Severance Plan, effective The Severance Plan provides for the following in the event of a qualifying termination without Cause in the absence of a Change in Control or CIC: A cash lump sum severance benefit of 1.0 times base salary plus a pro rata bonus based on actual performance; A cash lump sum severance benefit equal to the premium cost of COBRA continuation of medical, dental and vision benefits for 12 months; and 6 months of outplacement services. The Severance Plan is designed to provide enhanced severance benefits to executive officers in certain cases where their employment is terminated involuntarily not for cause, with a separate set of benefits for an involuntary termination not for cause or resignation for good reason that occurs within three months prior to or within 24 months following a CIC, with benefits in such circumstances to be: A cash lump sum severance benefit of 1.5 times the sum of (i) base salary and (ii) target bonus; Pro-rata annual bonus for the year of termination based on target performance; A cash lump sum severance benefit equal to the premium cost of COBRA continuation of medical, dental and vision benefits for 18 months; and 12 months of outplacement services. Benefits under this plan in connection with a CIC are “double trigger” and Executive Compensation Following a CIC, our executive officers would also vest in certain of their outstanding equity awards, if the CIC meets the definition in our Equity and Deferred Compensation Roger A. Krone Severance and Pro-rata Bonus(3) Restricted Stock Units(4) Stock Options(5) Performance Share Awards(6) Benefits & Perquisites(7) Applicable Scaleback(8) Total(9) Christopher R. Cage Severance and Pro-rata Bonus(3) Restricted Stock Units(4) Stock Options(5) Performance Share Awards(6) Benefits & Perquisites(7) Applicable Scaleback(8) Total(9) Gerard A. Fasano Severance and Pro-rata Bonus(3) Restricted Stock Units(4) Stock Options(5) Performance Share Awards(6) Benefits & Perquisites(7) Applicable Scaleback(8) Total(9) Executive Compensation Executive Payments and Benefits upon Termination or Change in Control IS&GS Transaction(2) Compensation: Severance (Salary and Bonus)(4) Pro-rata Bonus(5) Long-term Incentives: Performance Restricted Stock/Restricted Stock Units(6) Stock Options(7) Performance Share Awards(8) Benefits & Perquisites: Life Insurance, Healthcare(9) Outplacement Services(10) Applicable Scaleback(11) Total(12) Jerald S. Howe, Jr. Severance and Pro-rata Bonus(3) Restricted Stock Units(4) Stock Options(5) Performance Share Awards(6) Benefits & Perquisites(7) Applicable Scaleback(8) Total(9) M. Victoria Schmanske Severance and Pro-rata Bonus(3) Restricted Stock Units(4) Stock Options(5) Performance Share Awards(6) Benefits & Perquisites(7) Applicable Scaleback(8) Total(9) Amounts in this column represent the benefits Amounts in this column represent the benefits Amounts For a termination not in connection with a CIC, the value reflects a portion of the named executive officer’s RSUs (granted beginning in March Executive Compensation For a termination without a For a termination without a CIC and for disability, the values represent Amounts in this row reflect the total of (a) lump sum cash payments in lieu of providing benefits to the executives, and (b) cost estimates for providing outplacement benefits following a qualifying termination Executive Payments and Benefits upon Termination or Change in Control Compensation: Severance (Salary and Bonus)(3) Pro-rata Bonus(4) Long-term Incentives: Performance Restricted Stock and Restricted Stock Units(5) Stock Options(6) Performance Share Awards(7) Benefits & Perquisites: Healthcare(8) Outplacement Services(9) Applicable Scaleback(10) Total(11) CIC. Amounts in this row represent the gross amount of benefits to be received Executive Payments and Benefits upon Termination or Change in Control IS&GS Transaction(2) Compensation: Severance (Salary and Bonus)(4) Pro-rata Bonus(5) Long-term Incentives Performance Restricted Stock and Restricted Stock Units(6) Stock Options(7) Performance Share Awards(8) Benefits & Perquisites: Life Insurance, Healthcare(9) Outplacement Services(10) Applicable Scaleback(11) Total(12) Executive Payments and Benefits upon Termination or Change in Control New Change in Control(2) Compensation: Severance (Salary and Bonus)(3) Pro-rata Bonus(4) Long-term Incentives: Performance Restricted Stock and Restricted Stock Units(5) Stock Options(6) Performance Share Awards(7) Benefits & Perquisites: Healthcare(8) Outplacement Services(9) Applicable Scaleback(10) Total(11) Treatment of Equity Awards With respect to outstanding equity awards, our executive officers are generally treated in the same way as all other employee award recipients if their employment is terminated due to death, disability, retirement, involuntary without cause departure, or voluntary departure. In the case of death or disability, restricted stock units and options will vest immediately and options will remain exercisable for the remaining term of the option. Under our continued vesting program, employees who retire, including our executive officers, may continue holding and vesting in their stock options if they have held such options for at least 12 months prior to retirement and they retire (i) after age 59 1/2 with at least In the case of an involuntary termination without cause, all restricted stock units and stock options granted in 2017 or later will vest on a pro-rata basis provided the award has been held for a minimum of six months. In the case of a performance share award, individuals will receive a pro-rata number of shares after the end of the applicable three-year performance period, based on actual company performance over the full period, provided the award has been held for a minimum of 6 months. 48 | 2022 Proxy Statement Executive Compensation In any other case, if the employment of an equity award recipient, including an executive officer, is terminated for any reason, all of that recipient’s unvested restricted stock units, options and performance share awards are forfeited. Vested options remain exercisable for 90 days or until the option expiration date, if earlier. In accordance with the requirements of Section 953(b) of the Dodd-Frank Act and Item 402(u) of RegulationS-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for The median of the annual total compensation of all our employees (except our Chief Executive Officer) was The annual total compensation of our Chief Executive The ratio of these two amounts was SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and apply various assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. Methodology for Identifying Our “Median Employee” Employee Population To identify the median of the annual total compensation of all of our employees (other than our Chief Executive Officer), we first identified our total employee population from which we determined our “median employee.” We selected December 31, 2021, which is within the last three months of fiscal 2021, as the date upon which we would identify the “median employee.” We determined that, as of December Adjustments to Our Employee Population As permitted by the Pay Ratio Rule, we adjusted our total employee population (as described above) for purposes of identifying our “median employee” by excluding approximately After To identify our “median employee” from our total adjusted employee population, we compared the annualized salary of our employees as reflected in our human resources system of record. We identified our “median employee” using this compensation measure, which was consistently applied to all our employees included in the calculation. After identifying the median employee, that employee’s compensation was restated based on the Summary Compensation Table elements. Using the methodologies described above, we determined that our “median employee” was a full-time, salaried employee located in the United States with base wages for the 12-month period ending December 31, 2021, in the amount of $95,935. 2022 Proxy Statement | 49 Executive Compensation Determination of Annual Total Compensation of Our “Median Employee” and Our CEO Once we identified our “median employee”, we then calculated such employee’s annual total compensation for Our CEO’s annual total compensation for Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm The Audit and Finance Committee of the Board of Directors has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December Stockholders are not required to ratify the appointment of Deloitte The affirmative vote of the holders of a majority of the voting power of common stock, present or represented and entitled to vote at the annual meeting is required to approve the proposal. Abstentions have the effect of a vote against Recommendation of the Board of Directors The Board of Directors recommends stockholders vote FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December Audit and Finance Committee Report The Audit and Finance Committee assists the Board in its oversight of: (i) the integrity of the company’s financial statements, including the financial reporting process, system of internal control over financial reporting and audit process; (ii) the company’s compliance with legal and regulatory requirements; (iii) the independent registered public accounting firm’s qualifications and independence; (iv) the performance of the company’s internal audit function and independent registered public accounting firm; and (v) financial reporting risk assessment and mitigation. The Audit and Finance Committee’s job is one of oversight and it recognizes that management is responsible for the preparation and certification of the company’s financial statements and the company’s internal controls over financial reporting and that the independent registered public accounting firm is responsible for auditing those financial The Audit and Finance Committee recognizes that financial management, including the internal audit staff, and the independent registered public accounting firm, have more time, knowledge, and detailed information on the company than do Audit and Finance Committee members. Consequently, in carrying out its oversight responsibilities, the Audit and Finance Committee is not providing any expert or special assurance as to the company’s financial statements or any professional certification as to the independent registered public accounting firm’s work. The Audit and Finance Committee recognizes the importance of maintaining the independence of Leidos’ independent auditor, both in fact and appearance. The Committee also engages in an annual evaluation of the independent registered public accounting firm. It considers, along with company management and internal auditors, (i) the audit firm’s independence and objectivity, (ii) the capability and experience of the firm’s proposed audit team members, (iii) the audit firm’s audit quality indicators, (iv) the advantages and possible disadvantages of the audit firm’s tenure as our independent auditors, (v) the appropriateness of the audit firm’s fees for audit and non-audit services, (vi) the audit firm’s capability and expertise in our industry and in auditing companies with broad and complex operations, (vii) the audit firm’s performance and proposed approach to auditing the company’s financial statements and the company’s internal controls over financial reporting, and (viii) the size and reputation of the audit firm. After assessing the qualifications, performance, and independence of Deloitte, the Audit and Finance Committee has approved the engagement of Deloitte as our independent registered public accounting firm for the fiscal year ending December 30, 2022. Deloitte has been the company’s independent registered public accounting firm since fiscal 2000. Deloitte rotates its lead audit engagement partner at least every five years. The Audit and Finance Committee interviews proposed candidates and selects the lead audit engagement partner. In 2021, the committee approved a new lead audit engagement partner beginning with the fiscal year 2022 audit. The duties and responsibilities of the Audit and Finance Committee have been set forth in a written charter since 1975. A copy of the current Audit and Finance Committee charter is available on the company’s website at www.leidos.com by clicking on the links entitled “Investors,” “Corporate Governance” and then “Board Committees.” Each member of the Audit and Finance Committee meets the independence and financial literacy requirements of the SEC and the NYSE. In addition, all of the Committee members qualify as audit committee financial experts under SEC rules. In the course of fulfilling its responsibilities, the Audit and Finance Committee has: Met with the internal auditor and the independent registered public accounting firm to discuss any matters that the internal auditor, the independent registered public accounting firm or the Committee believed should be discussed privately without members of management present; Met with management of the Reviewed and discussed with management and Deloitte, Discussed with Deloitte Received the written disclosures and the letter from Deloitte required by applicable requirements of the 52 | 2022 Proxy Statement Audit Matters Based on the reviews and discussions summarized in this Report and subject to the limitations on our role and responsibilities referred to above and contained in the Audit and Finance Committee charter, the Audit and Finance Committee recommended to the Board of Directors that the Robert S. Shapard Susan M. Stalnecker Independent Registered Public Accounting Firm The Audit and Finance Committee of the Board of Directors has appointed Deloitte Aggregate fees billed for the Audit fees(1) Audit-related fees(2) Tax fees(3) All other fees(4) Total fees Audit fees include professional services rendered for the audit of the annual consolidated financial statements (including services incurred with rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) and review of quarterly consolidated financial statements. Audit fees also include services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements, including statutory audits. Audit-related fees Tax fees include a variety of permissible tax services related to preparation and/or review of statutory tax filings within U.S., foreign and state jurisdictions, general tax advisory services (including research and discussions related to tax compliance matters), tax planning and assistance with transfer pricing documentation and dispositions. All other fees relate to the purchase of accounting-related research Pre-Approval Policies and Procedures The Audit and Finance Committee has considered whether the above services provided by the Deloitte Entities are compatible with maintaining the independence of the Deloitte Entities. The Audit and Finance Committee has the responsibility topre-approve all audit andnon-audit services to be performed by the independent registered public accounting firm in advance. Further, the Chair of the Audit and Finance Committee has the authority topre-approve audit andnon-audit services, as necessary, between regular meetings of the Audit and Finance Committee, provided that any such services sopre-approved shall be disclosed to the full Audit and Finance Committee at its next scheduled meeting. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934 and the rules of the SEC require our directors and executive officers to file reports of their ownership and changes in ownership of common stock with the SEC. Our personnel generally prepare and file these reports for our directors and officers on the basis of information obtained from each director and officer and pursuant to a power of attorney. Due to administrative error, one Form 4 for Mr. Reagan was filed 14 days late. Based upon a review of filings with the SEC and/or written representations that no other reports were required, we believe that all of our directors and executive officers and, to our knowledge, beneficial owners of more than 10% of our common stock otherwise complied during fiscal 2021 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934. Stock Ownership of Certain Beneficial Owners The following table provides information regarding the beneficial ownership of each person known by us to beneficially own more than five percent of Leidos common stock. The percentage of beneficial ownership is based on 136,088,461 shares of our common stock outstanding as of February 28, 2022. Name and address of beneficial owner Amount and nature of Percent of class The Vanguard Group 100 Vanguard 10.91% BlackRock, Inc. 55 East 52nd Street, New York, NY 10.84% Based on a Schedule 13G/A (Amendment No. 9) filed with the SEC on February Based on a Schedule 13G/A (Amendment No. 9) filed with the SEC on Based on a Schedule Other Information Stock Ownership of Directors and Officers The following table sets forth, as of Common stock Stock units(1) Option shares and RSUs(2) Total shares beneficially owned Directors Gregory R. Dahlberg David G. Fubini Miriam E. John John P. Jumper Frank Kendall III Robert C. Kovarik, Jr. Harry M. J. Kraemer, Jr. Gary S. May Surya N. Mohapatra Lawrence C. Nussdorf Patrick M. Shanahan Robert S. Shapard Susan M. Stalnecker Noel B. Williams Named Executive Officers Roger A. Krone Christopher R. Cage James C. Reagan Timothy J. Reardon Jonathan W. Scholl Angela L. Heise Vincent A. Maffeo Michael E. Leiter Gerard A. Fasano Jerald S. Howe, Jr. M. Victoria Schmanske All directors and executive officers as a group (22 persons) Represents vested stock units attributable to the individual or the group in the Key Executive Stock Deferral Plan or Management Stock Compensation Plan. Shares held in these plans are voted by the trustee in the same proportion as all other stockholders collectively vote their shares of common stock. Shares subject to options exercisable or restricted stock units subject to vesting, both within 60 days following Other Information Stockholder Proposals for the Any stockholder proposals pursuant to Rule 14a-8intended to be presented at the Our proxy access bylaws permit a stockholder or group of stockholders (up to 20) who have owned at least three percent of common stock for at least three years to submit director nominees for inclusion in our Proxy Statement if the nominating stockholder(s) satisfies the requirements specified in the bylaws. To be timely, the notice must be delivered to the Corporate Secretary not later than the close of business on the In addition, Sections 2.07 and 3.03 of our bylaws provides that, in order for a stockholder to propose any matter (including nominations for directors) for consideration at the annual meeting (other than by inclusion in the Proxy Statement), such stockholder must give timely notice to our Corporate Secretary of Such stockholder’s notice must include certain information about the stockholder and the underlying beneficial owner, if any, including Who is entitled to vote at the annual meeting? Only stockholders of record of our common stock as of the close of business on our record date of March 9, 2022 are entitled to notice of, and to vote at, the annual meeting. As of March 9, 2022, there were 136,341,967 shares of common stock outstanding and entitled to vote. We have no other class of capital stock outstanding. A list of stockholders entitled to vote at the meeting will be available electronically on the virtual meeting website during the meeting for those attending the meeting, and for inspection at 1750 Presidents Street, Reston, Virginia for 10 days prior to the meeting. Please contact the Office of the Corporate Secretary at (571) 526-6000 if you wish to inspect the list of stockholders prior to the 2022 annual meeting. Can I attend the annual meeting? Due to the continued public health impact of the COVID-19 pandemic and advisories issued by government authorities limiting public gatherings, and to support the health and well-being of our stockholders and employees, we will hold our annual meeting in a virtual-only format via the internet. The virtual-only format facilitates stockholder attendance and participation by enabling participation from any location and at no cost. You will not be able to attend the annual meeting in person. To participate in the virtual meeting, you will need the control number included on your Notice, proxy card or voting instruction form. The meeting webcast will begin promptly at 9:00 a.m., ET. We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:00 a.m., ET, and you should allow ample time for the check-in procedures. If you experience technical difficulties during the check-in process or during the meeting please call 1-844-986-0822 (U.S.) or 303-562-9302 (International) for assistance. We are committed to ensuring that stockholders will be afforded the opportunity to vote and ask questions, similar to an in-person meeting. The proxy materials, rules of conduct and stockholder list will be made available on the meeting website. You will be able to attend the meeting online, vote your shares electronically and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/LDOS2022. We will answer as many questions as time permits. However, we reserve the right to exclude questions that are not pertinent to meeting matters or that are otherwise inappropriate under the meeting’s rule of conduct. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. What constitutes a quorum? The presence, either virtually in person or by proxy, of the holders of a majority of the total voting power of the shares of common stock outstanding as of March 9, 2022 is necessary to constitute a quorum and to conduct business at the annual meeting. Abstentions and broker “non-votes” will be counted as present for purposes of determining the presence of a quorum. What is a broker “non-vote”? A broker “non-vote” occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that matter and has not received voting instructions from the beneficial owner. In tabulating the voting results for a particular proposal, broker “non-votes” are not counted as a vote on that proposal. Broker “non-votes” will not have an effect on the outcome of any matter being voted on at the meeting, assuming a quorum is present. Unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the annual meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy or provide voting instructions to your broker so your vote can be counted. 2022 Proxy Statement | 57 Frequently Asked Questions How many votes am I entitled to? Each holder of common stock will be entitled to one vote per share, in person or by proxy, for each share of stock held in such stockholder’s name as of March 9, 2022, on any matter submitted to a vote of stockholders at the annual meeting. There were 136,341,967 shares of our common stock outstanding on March 9, 2022. Is cumulative voting permitted for the election of directors? No, the Company’s Certificate of Incorporation was amended in 2020 to eliminate cumulative voting in the election of directors. How do I vote my shares? Shares of common stock represented by a properly executed and timely proxy will, unless it has previously been revoked, be voted in accordance with its instructions. In the absence of specific instructions, the shares represented by a properly executed and timely proxy will be voted in accordance with the Board’s recommendations as follows: No other business is expected to come before the annual meeting; however, should any other matter properly come before the annual meeting, the proxy holders intend to vote such shares in accordance with their best judgment on such matter. There are four different ways to vote your shares: By Internet (prior to the meeting): Go to www.proxyvote.com or scan the QR code on your proxy and voting instruction card with a smart phone. By Internet (at the meeting): You may vote online by following the instructions at www.virtualshareholdermeeting.com/ LDOS2022. Have your Notice, proxy card or voting instruction form available when you access the virtual meeting web page. By Telephone: Call 1-800-690-6903. By Mail: If you received your proxy materials via the U.S. mail, you may complete, sign and return the accompanying proxy and voting instruction card in the postage-paid envelope provided. Submitting a proxy will not prevent you from attending the annual meeting and voting in person. Any proxy may be revoked at any time prior to exercise by delivering a written revocation or a new proxy bearing a later date to our mailing agent, Broadridge, as described below or by attending the annual meeting and voting in person. The mailing address of our mailing agent is Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Simply attending the annual meeting will not revoke a proxy. What are the voting deadlines? For shares not held in the Leidos, Inc. Retirement Plan (the “Leidos Retirement Plan”), the deadline for submitting a proxy using the internet or the telephone is 11:59 p.m. ET on April 28, 2022. For shares held in the Leidos Retirement Plan, the deadline for submitting voting instructions using any of the allowed methods is 11:59 p.m. ET on April 26, 2022. How are the shares held by the Leidos Retirement Plan voted? Each participant in the Leidos Retirement Plan has the right to instruct Vanguard Fiduciary Trust Company, as trustee of the Leidos Retirement Plan (the “Trustee”), on a confidential basis, how to vote such participant’s proportionate interests in all shares of common stock held in the Leidos Retirement Plan. The Trustee will vote all shares held in the Leidos Retirement Plan for which no voting instructions are received in the same proportion as the shares for which voting instructions have been received. 58 | 2022 Proxy Statement Frequently Asked Questions The Trustee’s duties with respect to voting the common stock in the Leidos Retirement Plan are governed by the fiduciary provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The fiduciary provisions of ERISA may require, in certain limited circumstances, that the Trustee override the votes of participants with respect to the common stock held by the Trustee and to determine, in the Trustee’s best judgment, how to vote the shares. How are the shares held by the Stock Plans voted? Under the terms of our Management Stock Compensation Plan and Key Executive Stock Deferral Plan, Matrix Trust Company, as trustee of these stock plans, has the power to vote the shares of common stock held in these stock plans. Matrix will vote all such shares in the same proportion that our other stockholders collectively vote their shares of common stock. If you are a participant in these stock plans, you do not have the right to instruct Matrix on how to vote your proportionate interests in the shares of common stock held in these stock plans. What is the difference between a “stockholder of record” and a “beneficial” holder? These terms describe how your shares are held. If your shares are registered directly with Computershare, our transfer agent, then you are a “stockholder of record” of these shares. If your shares are held in an account at a broker, bank, trust or other similar organization, then you are a “beneficial” holder of these shares. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. Who is soliciting these proxies? We are soliciting these proxies and the cost of the solicitation will be borne by us, including the charges and expenses of persons holding shares in their name as nominee incurred in connection with forwarding proxy materials to the beneficial owners of such shares. In addition to the use of the mail, proxies may be solicited by our officers, directors and employees in person, virtual communication channels, by telephone or by email. Such individuals will not be additionally compensated for such solicitation but may be reimbursed for reasonable out-of-pocket expenses incurred in connection with such solicitation. What is “householding” and how does it affect me? We have adopted a procedure approved by the Securities and Exchange Commission, or SEC, called “householding.” Under this procedure, we send only one proxy statement and one annual report to eligible stockholders who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is designed to reduce our printing and postage costs. Stockholders who participate in householding will continue to receive separate proxy and voting instruction cards. We do not use householding for any other stockholder mailings. If you are a registered stockholder residing at an address with other registered stockholders and wish to receive a separate copy of the proxy statement or annual report, or if you do not wish to participate in householding and prefer to receive separate copies of these documents in the future, please contact our mailing agent, Broadridge, either by calling toll-free at 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. If you own shares through a bank, broker, or other nominee, you should contact the nominee concerning householding procedures. We will promptly deliver a separate copy of the proxy statement or annual report to you upon request. If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy statement or annual report and you wish to receive a single copy of each of these documents for your household, please contact our mailing agent, Broadridge, at the telephone number or address indicated above. 2022 Proxy Statement | 59 Frequently Asked Questions Where can I find the voting results of the annual meeting? We intend to announce preliminary voting results at the annual meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days of the annual meeting. May I obtain a copy of the 2021 Annual Report on Form We will provide without charge to any stockholder, upon written or oral request, a copy of our Holdings, Inc., On or about March Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholders Meeting To Be Held on April 29, 2022. The proxy statement and annual report are available at www.proxyvote.com. Information and reports on our website to which we refer in this proxy statement will not be deemed a part of, or otherwise incorporated by reference into, this proxy statement. 60 | 2022 Proxy Statement Corporate Headquarters Leidos Holdings, Inc. 1750 Presidents Street Reston, VA 20190 571-526-6000 www.leidos.com Stock Listing Leidos Holdings, Inc. common stock is traded on the New York Stock Exchange (NYSE) under the trading symbol LDOS. Transfer Agent and Registrar Computershare 480 Washington Boulevard Jersey City, NJ 07310 855-894-5367 (US) 201-680-6961 (International) Hearing impaired (TTY): (800) 952-9245 www.computershare.com/leidos Independent Registered Public Accounting Firm Deloitte & Touche LLP 7900 Tysons One Place McLean, VA 22102 Annual Report on Form 10-K Copies of our 2021 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission can be accessed via our website at ir.leidos.com. Copies can also be obtained by contacting our Investor Relations team. Certifications The most recent certifications by our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits to the Form 10-K. We have also filed with the NYSE the most recent Annual CEO Certification in accordance with the NYSE’s listing standards. Investor Relations Questions from stockholders, analysts, and others can be directed to: Stuart Sr. Vice Davis President, Investor Relations Executive Leidos Holdings, Inc. 1750 Presidents Street Reston, VA 20190 571-526-6000 ir ir@leidos .leidos.com .com FSC www.fsc.org MIX Paper from responsible souces C132107 ©2021 Leidos, Inc. All Rights Reserved. Leidos and the Leidos logo are trademarks of Leidos, Inc. in the United States and/or other countries. Executive Leadership Team Leidos A Kaleidoscope of Innovation END ATTN: STOCK PROGRAMS 1750 PRESIDENTS STREET RESTON, VA 20190 VOTE Before BY The INTERNET Meeting—Go to www.proxyvote.com or scan the barcode above Have Use the your internet proxy and to transmit voting instruction your proxy card and/or in hand voting when instructions you access and the for web electronic site and delivery follow the of information instructions . to side obtain of this your card records for information and to create regarding an electronic specific voting proxy deadlines and voting . instruction form. Please see the reverse that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC If you would like DELIVERY to reduce OF the FUTURE costs incurred PROXY by MATERIALS Leidos in mailing proxy materials, you can consent to receiving all for future electronic proxy delivery, statements, please proxy follow cards the and instructions annual reports above electronically VOTE Use any VOTE Mark, BY sign MAIL You VOTE may CONFIRMATION June 29, 2022. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D70994-P66675-K32279 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY AND VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED DETACH AND RETURN THIS PORTION ONLY VOTE ON DIRECTORS—The Board of Directors recommends vote FOR each of the nominees listed below. 1. Nominees: 1a. Gregory R. Dahlberg 1b. David G. Fubini 1c. Miriam E. John 1d. Robert C. Kovarik, Jr. 1e. Harry M. J. Kraemer, Jr. 1f. Roger A. Krone 1g. Gary S. May 1h. Surya N. Mohapatra 1i. Patrick M. Shanahan 1j. Robert S. Shapard 1k. Susan M. Stalnecker 1l. Noel B. Williams VOTE ON PROPOSAL 2—The Board of Directors recommends a vote FOR proposal 2. 2. Approve, by an advisory vote, executive compensation. VOTE ON PROPOSAL 3—The Board of Directors recommends a vote FOR proposal 3. 3. The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 30, 2022. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please complete, date, sign and mail promptly in the enclosed envelope which requires no postage. Please sign EXACTLY as name or names appear(s) hereon. When signing as attorney, trustee, administrator or guardian, please give your full title. If a trust requires the signature of more than one trustee, all required trustees must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer executor,. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date ] Annual Meeting: You can view the Leidos Annual Report on Form 10-K and the proxy materials for the Internet at www.proxyvote.com D70995-P66675-K32279 Proxy and Voting Instruction Card for the Annual Meeting of Stockholders—April 29, 2022 This Proxy and Voting Instruction Card are Solicited on Behalf of the Board of Directors www.virtualshareholdermeeting.com/LDOS2022 The undersigned hereby appoints Jerald S. Howe, Jr. and Benjamin A. Winter, and each of them, with full power of substitution, as proxies to represent the undersigned and to vote all of the shares of common stock the undersigned is entitled to vote at the Annual Meeting of Stockholders of Leidos Holdings, Inc. (the “Company”) to be held virtually at www.virtualshareholdermeeting.com/LDOS2022, on Friday, April 29, 2022, at 9:00 a.m. (local time), and at any adjournment, postponement or continuation thereof (including, if applicable, on any matter which the Board of Directors did not know would be presented at the Annual Meeting by a reasonable time before the proxy solicitation was made or for the election of a person to the Board of Directors if any nominee named in Proposal 1 becomes unavailable to serve) (the “2022 Annual Meeting of Stockholders”), as indicated on the reverse side. For stockholders who are participants in the Leidos, Inc. Retirement Plan (the “Leidos Retirement Plan”), the undersigned also hereby instructs the Trustee, Vanguard Fiduciary Trust Company, and any successor, to vote all of the shares of common stock held for the undersigned’s account in the Leidos Retirement Plan at the 2022 Annual Meeting of Stockholders, as indicated on the reverse side. The shares of common stock to which this proxy and voting instruction card relates will be voted as directed. If this proxy and voting instruction card is properly signed and returned but no instructions are indicated with respect to a particular item, (A) the shares represented by this proxy and voting instruction card which the undersigned is entitled to vote will be voted (i) FOR each of the nominees standing for election as a director, (ii) FOR Proposal 2 and (iii) FOR Proposal 3, and in the discretion of the proxy holders on any other matters properly coming before the meeting and any adjournment, postponement or continuation thereof and (B) the shares represented by the proxy and voting instruction card held for the undersigned’s account in the Leidos Retirement Plan will be voted in the same proportion as the shares held in the Leidos Retirement Plan for which voting instructions have been received are voted. The proxy and voting instruction card, if properly executed and delivered in a timely manner, will revoke all prior proxies and voting instruction cards executed and delivered by the undersigned. For shares not held in the Leidos Retirement Plan, the deadline for submitting a proxy using the Internet or the telephone is 11:59 p.m. Eastern Time on April 28, 2022. For shares held in the Leidos Retirement Plan, the deadline for submitting voting instructions using any of the allowed methods is 11:59 p.m. Eastern Time on April 26, 2022. Please complete, sign, date and return the Proxy and Voting Instruction Card promptly using the enclosed envelope. (Continued and to be signed on reverse side.)u Environment: Our environmental services, coupled with our internal stewardship and GHG emission reduction efforts, are creating a healthier world.Risk Management Experience u Ethics and Compliance:Our strong employee ethical conduct is a cornerstone of our culture and how we operate as a company.uPeople: Our development and training programs are creating a strong workforce focused on solving the world’s most daunting challenges.u Suppliers and Small Business: Our thousands of suppliers and small businesses are crucial to our success as well as economic growth and prosperity.u Independent Directors 12 of 13 u Lead DirectorLawrence C. Nussdorf u Mandatory Retirement Age75 Director Electionsu Annual Board Electionsu Directors Elected by a Majority of Votes CastBoard Meetings in Last Fiscal Yearu Full Board Meetings7 u Independent Director Only Sessions6 Board Committee Meetings in Last Fiscal Yearu Audit7 u Classified Business Oversight2 u Ethics & Corporate Responsibility3 u Finance4 uHuman Resources & Compensation6 u Innovation & Technology3 u Nominating & Corporate Governance4 Evaluating and Improving Board Performanceu Annual Board and Committee Assessmentsu Annual Review of Independence of Boardu Board Orientation/Education ProgramsAligning Director and Stockholder Interestsu Director and Executive Stock Ownership Guidelinesu Annual Equity Grant toNon-Employee DirectorsGovernance Policies and Practices(available at www.leidos.com)u Corporate Governance Guidelinesu Code of Business Conduct of the Board of Directorsu Code of Conduct for Employeesu Charters for Board Committeesu Chair of the Board Position Descriptionu Independent Lead Director Position DescriptionCapital Management Expertise Compensation PhilosophyWe seek to closely align the interests of our executives with the interests of our stockholders. Our compensation programs seek to closely align the interests of our named executive officers with the interests of our stockholders. To achieve this goal, our programs are designed to:u payspecificfinancial and other performance measures;measures that the Board believes promote the creation of long-term stockholder value and position the company for long-term success;u provide the same types of benefits for executives as other employees, with no special or supplemental pension, health or death benefits for executives;u targetTarget total direct compensation at approximately the median among companies with which we compete for executive talent;u u enableEnable us to recover, or “clawback,” incentive compensation if there is any material restatement of our financial results or if an executive is involved in misconduct;u requireu avoidu competeu Use predominantly equity-based pay u Use rigorous goal setting aligned with pre-established targets u Use “clawback” provisions to promote accountability u Use balanced performance metrics that consider absolute and relative performance u Conduct annual compensation review and risk assessment u Use meaningful equity ownership guidelines u Retain an independent compensation consultant u No excessive perquisites u No “golden parachutes” u No “single-trigger” severance benefits or accelerated vesting of equity upon a change in control u No multiyear guaranteed incentive awards for senior executives u No excise tax “gross-ups” upon a change in control u No discounting, reloading or repricing of stock options without stockholder approval u Best Places to Work for LGBTQ Equality from the Human Rights Campaign (100% rating) u World’s Most Ethical CompaniesHonoree from Ethisphere (four consecutive years) u Gold Medallion from the U.S. Labor Department HIRE Vets program u Best of the Best on U.S. Veteran Magazine’s Top Veteran-Friendly Companies u Best Places to Work for Disability Inclusion from the Disability Equality Index (100% score) u Leading Disability Employer Seal from the National Organization on Disability u Silver Award from Military Friendly Employers u #3 on Military Friendly’s Supplier Diversity Program ($5 billion & over) u #5 on Fortune’s World’s Most Admired Companies (IT services) u #18 on Career Communication Group’s Top Supporters of HBCU Engineering Schools u #34 on Military Times’ Best for Vets Employers u #34 on Careers & The Disabled Magazine’s Top 50 Employers u #82 on Forbes’ World’s Top Female-Friendly Companies u #90 on Forbes’ America’s Best Employers for Veterans Information About Voting Rights and Solicitation of ProxiesProxy Summary 14i 511 551 51 128 128 128 128 1299 9 10 10 10 131011 1412 1415 1416 1517 18 21 22 22 23 23 23 24 394038 4039 4240 4442 4543 4543 uponUpon Termination or a Change in Control 4745 5748 5749 595151 51 6052 6052 6153 615353 625454 6254 636455 6456 655760 LEIDOS HOLDINGS, INC.11951 Freedom DriveReston, Virginia 20190ANNUAL MEETING OF STOCKHOLDERSTo Be Held May 11, 2018PROXY STATEMENTThis proxy statement is being furnished to the stockholders of Leidos Holdings, Inc., a Delaware corporation, in connection with the solicitation of proxies by our Board of Directors for use at our annual meeting of stockholders to be held at the company’s office at 11951 Freedom Drive, Reston, Virginia, on Friday, May 11, 2018, at 9:00 a.m. ET. and at any and all adjournments, postponements or continuations of the meeting. This proxy statement and the proxy and voting instruction card are first being sent or made available to our stockholders on or about March 27, 2018.Information About Voting Rights and Solicitation of ProxiesWho is entitled to vote at the annual meeting?Only stockholders of record of our common stock as of the close of business on our record date of March 12, 2018 are entitled to notice of, and to vote at, the annual meeting. As of March 12, 2018, there were 151,653,989 shares of common stock outstanding.We have no other class of capital stock outstanding. A list of stockholders entitled to vote at the meeting will be available for inspection at 11951 Freedom Drive, Reston, Virginia for at least 10 days prior to the meeting and will also be available for inspection at the meeting.Do I need an admission ticket to attend the annual meeting?Yes. If you attend the meeting, you will be asked to present an admission ticket or proof of ownership and valid photo identification. Your admission ticket is:uAttached to your proxy and voting instruction card if you received your proxy materials in the mail;uCan be printed from the online voting site; oruA letter or a recent account statement showing your ownership of our common stock as of the record date, if you hold shares through a bank or a broker.What constitutes a quorum?The presence, either in person or by proxy, of the holders of a majority of the total voting power of the shares of common stock outstanding as of March 12, 2018 is necessary to constitute a quorum and to conductbusiness at the annual meeting. Abstentions and broker“non-votes” will be counted as present for purposes of determining the presence of a quorum.2018 Proxy Statement | 1Information About Voting Rights and Solicitation of ProxiesWhat is a broker“non-vote”?A broker“non-vote” occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that matter and has not received voting instructions from the beneficial owner. In tabulating the voting results for a particular proposal, broker“non-votes” are not considered entitled to vote on that proposal. Broker“non-votes” will not have an effect on the outcome of anymatter being voted on at the meeting, assuming a quorum is present.Unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the annual meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy or provide voting instructions to your broker so your vote can be counted.How many votes am I entitled to?Each holder of common stock will be entitled to one vote per share, in person or by proxy, for each share of stock held in such stockholder’s name as of March 12, 2018,on any matter submitted to a vote of stockholders at the annual meeting unless a stockholder elects to cumulate votes for the election of directors as described below.Is cumulative voting permitted for the election of directors?In the election of directors, you may cumulate your vote. This means that you may allocate among the director nominees, as you see fit, the total number of votes equal to the director positions to be filled multiplied by the number of shares you hold. You may not cumulate your votes against a nominee and cumulative voting applies only to the election of directors.If you are a stockholder of record and choose to cumulate your votes, you will need to notify ourCorporate Secretary in writing prior to the Annual Meeting or, if you vote in person at the annual meeting, notify the chair of the meeting prior to the commencement of voting at the annual meeting. You may not submit your proxy or voting instructions over the Internet or by telephone if you wish to distribute your votes unevenly among two or more nominees. If you hold shares beneficially through a broker, trustee or other nominee and wish to cumulate votes, you should contact your broker, trustee or nominee.How do I vote my shares?Shares of common stock represented by a properly executed and timely proxy will, unless it has previously been revoked, be voted in accordance with its instructions. In the absence of specific instructions, the shares represented by a properly executed and timely proxy will be voted in accordance with the Board’s recommendations as follows:uFOR all of the company’s nominees to the Board;uFOR the approval, on anon-binding, advisory basis, of the compensation of our named executive officers;uFOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 28, 2018.No other business is expected to come before the annual meeting; however, should any other matter properlycome before the annual meeting, the proxy holders intend to vote such shares in accordance with their best judgment on such matter.There are four different ways to vote your shares:By Internet: Go to www.proxyvote.com or scan the QR code on your proxy and voting instruction card with a smart phone.By Telephone: Call1-800-690-6903.By Mail: If you received your proxy materials via the U.S. mail, you may complete, sign and return the accompanying proxy and voting instruction card in the postage-paid envelope provided.In Person: Attend the meeting at the company’s office at 11951 Freedom Drive, Reston, Virginia 20190, and vote in person if you are a stockholder of record or if you have obtained a valid proxy from the stockholder of record.2 | 2018 Proxy StatementInformation About Voting Rights and Solicitation of ProxiesSubmitting a proxy will not prevent you from attending the annual meeting and voting in person. Any proxy may be revoked at any time prior to exercise by delivering a written revocation or a new proxy bearing a later date to our mailing agent, Broadridge, as described below or byattending the annual meeting and voting in person. The mailing address of our mailing agent is Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Attendance at the annual meeting will not, however, in and of itself, revoke a proxy.What are the voting deadlines?For shares not held in the Leidos, Inc. Retirement Plan (the “Leidos Retirement Plan”), the deadline for submitting a proxy using the Internet or the telephone is 11:59 p.m. ET on May 10, 2018. For shares held in theLeidos Retirement Plan, the deadline for submitting voting instructions using any of the allowed methods is 11:59 p.m. ET on May 8, 2018.How are the shares held by the Leidos Retirement Plan voted?Each participant in the Leidos Retirement Plan has the right to instruct Vanguard Fiduciary Trust Company, as trustee of the Leidos Retirement Plan (the “Trustee”), on a confidential basis, how to vote his or her proportionate interests in all shares of common stock held in the Leidos Retirement Plan. The Trustee will vote all shares held in the Leidos Retirement Plan for which no voting instructions are received in the same proportion as the shares for which voting instructions have been received.The Trustee’s duties with respect to voting the common stock in the Leidos Retirement Plan are governed by the fiduciary provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The fiduciary provisions of ERISA may require, in certain limited circumstances, that the Trustee override the votes of participants with respect to the common stock held by the Trustee and to determine, in the Trustee’s best judgment, how to vote the shares.How are the shares held by the Stock Plans voted?Under the terms of our Management Stock Compensation Plan and Key Executive Stock Deferral Plan, Matrix Trust Company, as trustee of these stock plans, has the power to vote the shares of common stock held in these stock plans. Matrix will vote all such shares in the same proportion that our other stockholderscollectively vote their shares of common stock. If you are a participant in these stock plans, you do not have the right to instruct Matrix on how to vote your proportionate interests in the shares of common stock held in these stock plans.What is the difference between a “stockholder of record” and a “beneficial” holder?These terms describe how your shares are held. If your shares are registered directly with Computershare, our transfer agent, then you are a “stockholder of record” of these shares. If your shares are held in an account at a broker, bank, trust or other similar organization, then you are a “beneficial” holder of these shares. The organization holding your account is considered thestockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account. If you wish to vote in person at the annual meeting, you must obtain a valid proxy from the organization holding the shares.Who is soliciting these proxies?We are soliciting these proxies and the cost of the solicitation will be borne by us, including the charges and expenses of persons holding shares in their name as nominee incurred in connection with forwarding proxy materials to the beneficial owners of such shares. In addition to the use of the mail, proxies may be solicitedby our officers, directors and employees in person, by telephone or by email.Such individuals will not be additionally compensated for such solicitation but may be reimbursed for reasonableout-of-pocket expenses incurred in connection with such solicitation.2018 Proxy Statement | 3Information About Voting Rights and Solicitation of ProxiesWhat is “householding” and how does it affect me?We have adopted a procedure approved by the Securities and Exchange Commission, or SEC, called “householding.” Under this procedure, we send only one proxy statement and one annual report to eligible stockholders who share a single address, unless we have received instructions to the contrary from any stockholder at that address. This practice is designed to reduce our printing and postage costs. Stockholders who participate in householding will continue to receive separate proxy and voting instruction cards. We do not use householding for any other stockholder mailings.If you are a registered stockholder residing at an address with other registered stockholders and wish to receive a separate copy of the proxy statement or annual report, or if you do not wish to participate in householding and prefer to receive separate copies of these documents inthe future, please contact our mailing agent, Broadridge, either by calling toll-free at1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. If you own shares through a bank, broker, or other nominee, you should contact the nominee concerning householding procedures. We will promptly deliver a separate copy of the proxy statement or annual report to you upon request.If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy statement or annual report and you wish to receive a single copy of each of these documents for your household, please contact our mailing agent, Broadridge, at the telephone number or address indicated above.Where can I find the voting results of the annual meeting?We intend to announce preliminary voting results at the annual meeting and publish final results in a CurrentReport on Form8-K to be filed with the SEC within four business days of the annual meetingInternet Availability of Proxy MaterialsAs permitted by the rules of the SEC, we are using the Internet as a means of furnishing proxy materials to our stockholders. We believe this method will make the proxy distribution process more efficient, lower costs and help in conserving natural resources.On or about March 27, 2018, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and annual report. The Notice of Internet Availability of Proxy Materials also instructs you on how to access your proxy and voting instruction card to be able to vote through the Internet or by telephone. Other stockholders, in accordance with their prior requests, and employees with regular access to email have received email notification of how to access our proxy materials and vote via the Internet or by telephone or have been mailed paper copies of our proxy materials and a proxy and voting instruction card.The proxy statement and annual report are available at www.proxyvote.com.4 | 2018 Proxy Statement are to be elected to serve forone-year terms to hold such positionpositions until their successors are elected and qualified unless any such director resigns or is removed prior to the end of such term. All nominees have been nominated by the Board of Directors (the “Board”) based on the recommendation of the Nominating and Corporate Governance Committee. To the best knowledge of the Board, all of the nominees are able and willing to serve.Ethics Committee. Each nominee has consented to be named in this proxy statement and to serve if elected.20182022 annual meeting is an uncontested election.uncontested.he or shethen such director is expected to tender his or her resignationoffer to resign, effective upon the Board’s acceptance, in accordance with our Corporate Governance Guidelines. The NominatingCorporate Governance and Corporate GovernanceEthics Committee will consider the offer oftendered resignation and recommend to the Board the action to be taken. The Board will promptlyconsider the Committee’s recommendation and disclose its decision as to whether to accept or reject the tendered resignation in a press release, Current Report on Form8-K or some other public announcement.becomesbecome unable to stand for election at the annual meeting, the proxy holders intend to vote for any person designated by the Board to replace the nominee unable to serve.Recommendation ofserve, or the Board of DirectorsThe Board of Directors unanimously recommends a vote FOR each nominee.may reduce its size. brief discussion of the specific experience, qualifications, attributes or skills that led to the Board’s conclusion that the nominee should serve as a director of our company. The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending to stockholders a group of nominees with complementary skills and a diverse mix of backgrounds, perspectives and expertise beneficial to the broad business diversity of our company. Our board membership criteria and director nomination process are described in the “Corporate Governance” section of this proxy statement.20182022 Proxy Statement | 51 6670Classified Business OversightAudit & FinanceEthicsHuman Resources & Corporate ResponsibilityFinanceCompensation over 35nearly 40 years of experience at the senior levels of governmentin federal budgeting, congressional legislation, executive management and military affairs with congressional committees, federal agencies, and private industry. Most recently, he served asAs Lockheed Martin Corporation’s Senior Vice President for Washington Operations between 2009 and 2015, at Lockheed Martin Corporation, an aerospace, defense, securityhe was responsible for devising and technology company.implementing advocacy, marketing, and legislative strategies for the corporation’s largest programs and for directing the Corporation’s liaison activities with Congress, the White House, federal departments, industry associations, state governments and foreign embassies. Mr. Dahlberg also served for over 20 years as a senior House Appropriations Committee staff member, including seven years as Minority Staff Director of the House Appropriations Defense Subcommittee with jurisdiction over programs of the Department of Defense and intelligence agencies. Mr. Dahlberg also was confirmed as the 26th Under Secretary of the Army, in 2000serving as the principal advisor to the Secretary of the Army on all matters related to management and served asoperation of the United States Army, including programming and budgeting, weapons systems, manpower, personnel, reserve affairs, installations and logistics. He was appointed Acting Secretary of the Army in early 2001. Mr. Dahlberg previously served in various senior staff positions at the House Appropriations Committee for over 20 years, including eight years as the Minority Staff Director of the House Defense Appropriations Subcommittee with jurisdiction over funding of Department of Defense and intelligence agency programs. He also assisted in conceptualizing and authoring the landmark Budget Enforcement Act of 1990. Mr. Dahlberg is currently President of Dahlberg Strategic, LLC, a Washington, DC-based aerospace and defense sector consulting firm.extensiveexecutive management background as an executive in government and industry and his expertise in the defense industry with detailed knowledge of our customer basefederal budgeting and governmental decision making and budgeting practices provides ourcongressional affairs provide the Board with experience that is directlyhighly relevant and valuable to our business as a government contractor. 6468Finance Directorships:Company DirectorshipsFormer Directorships During Past 5 Years: Compuware Corporation62 | 20182022 Proxy Statement 6973Classified Business OversightHuman Resources & Compensation (Chair)Innovation & TechnologyNominating & Corporate Governance & Ethics fromsince 1982 to 2006 in a number of managerial and technical roles, most recently of which was as Vice President of Sandia’s California Division. Dr. John ishas been a long-time member of the Department of Defense’s Defense Science Board and Vice Chairman of its Threat Reduction Advisory Committee.Board. She was elected to the American Association for the Advancement of Science Committee on Science and Public Policy and is the past chair of the National Academies’ Naval Studies Board.Board and a member of its Intelligence Community Studies Board and has served on the Board on Chemical Sciences and Technology and the Board on Army Science and Technology. She also serves on the boards of a number of federally funded national security laboratories, including MIT Lincoln Lab.Lab and Lawrence Livermore National Laboratory. She is a Senior Fellow and past Chair of the California Council on Science and Technology. She has also been elected a National Associate of the National Academies and is the recipient of the Department of Defense’s prestigious Eugene G. Fubini Award and the Navy’s Superior Public Service Award and the Department of Defense’s Eugene G. Fubini Award for her significant and sustained contributions in an advisory capacity to the Department.contributions.topics andtopics. She brings to our Board her diverse experience managing multi-disciplinary science and engineering organizations supporting national security, energy and defense. Our Board believes that Dr. John’s scientific background and leadership experience enable her to provide critical perspectives on technical, cybersecurity, national security and organizational issues important to our business. FRANK KENDALL IIIROBERT C. KOVARIK, JR.201720186972Classified Business OversightAudit & Finance (Chair)InnovationHuman Resources & TechnologyNominating & Corporate GovernanceCompensation Kendallhas held various leadership positions at companies and globally recognized accounting and consulting firms. Mr. Kovarik served on the CareFirst, Inc. Board of Trustees from 2014 to 2021, as the Chair of its Investment and Finance Committee and as a member of its Audit and Compliance Committee. He also served as a member of the Alliance Bankshares Corporation Board of Directors from 2011 to 2012, where he served as its Audit Committee Chair. Mr. Kovarik served as a partner at Ernst & Young LLP from 2002 to 2008, and was part of the E&Y National Professional Practice group from 2005 to 2008, serving as a practice director for the Mid-Atlantic Area. From 2002 to 2005, Mr. Kovarik was an engagement partner for a wide range of corporate clients operating in both the government services and commercial markets. Prior to Ernst & Young, Mr. Kovarik was with Arthur Andersen, LLP for over 40 years25 years. At Andersen he held a variety of leadership positions and served as engagement partner for many large public and private companies with operations in the United States and around the world. Mr. Kovarik has served as an adjunct professor at both the University of Maryland and the University of Virginia.in engineering, management, defense acquisition, and national security affairs in private industry,advising government and the military. From 2012 to 2017, Mr. Kendall served as the Under Secretary of Defense for Acquisition, Technology and Logistics. He has been a consultant to defense industry firms,non-profit research organizations, and the Department of Defense in the areas of strategic planning, engineering management, and technology assessment. Mr. Kendall was Vice President of Engineering for Raytheon Company. He was also a Managing Partner at Renaissance Strategic Advisors, a Virginia-based aerospace and defense sector consulting firm.Our Board believes that Mr. Kendall’s vast experience in government and the defense industry, his knowledge of military affairscommercial clients, and his technical, businessfinancial and strategic planning background provideaccounting expertise, are important to our Board with unique insights into key areas of our businessin fulfilling its oversight responsibilities. Mr. Kovarik is an “audit committee financial expert,” as a provider of services and solutions to U.S. government customers, as well as international governments and broader commercial markets.defined by SEC rules.20182022 Proxy Statement | 73 6367(Chair)& FinanceFinanceCorporate Governance & Ethics VWR InternationalOption Care Health, Inc.CatamaranVWR Corporation 6165Classified Business OversightEthicsTechnology & Corporate ResponsibilityInformation Security Roger A.Mr. Krone has served as our Chief Executive Officer since July 2014 and as the Chair of the Board since March 2015. Prior to his appointment as our Chief Executive Officer, Mr. Krone served as President of Network and Space Systems for The Boeing Company since 2006. Mr. Krone previously held various senior program management and finance positions at Boeing, McDonnell Douglas Corp. and General Dynamics. Mr. Krone is also a certified public accountant (inactive).provideprovides valuable insights and leadership for our Board. In addition, our Board believes that the Chief Executive Officer should serve on the Board to help communicate the Board’s priorities to management and management’s perspective to the Board.84 | 20182022 Proxy Statement 5357Ethics & Corporate ResponsibilityInnovationTechnology & Technology (Chair)Information Security June 2011 through Julyto 2017. Prior to this, Dr. May served as the Chair of the School of Electrical and Computer Engineering from 2005 to 2011 and was the executive assistant to Georgia Tech President G. Wayne Clough from 2002 to 2005. Dr. May was a National Science Foundation graduate fellow and an AT&T Bell Laboratories graduate fellow and has worked as a member of the technical staff at AT&T Bell Laboratories. He is a former member of the National Advisory Board of the National Society of Black Engineers. 6872InnovationTechnology & TechnologyNominating & Corporate GovernanceInformation Security Boardboard member of the ITT Corporation and is currently a member of the board of Xylem Inc., a leading global water technology and transport company. He is also a Trustee of The Rockefeller University and an Executive in Residence at the Columbia Business School.Our Board believes that Dr. Mohapatra’s extensive executive leadership experience in the health care industry, andhis service on other major public company boards providesand experience in technology and cybersecurity provide valuable perspectives to our Board.20182022 Proxy Statement | 95 LAWRENCE C. NUSSDORFLead DirectorPATRICK M. SHANAHAN20102022 (new nominee)7159AuditFinanceNominating & Corporate Governance (Chair)& Ethics Former During Past 5 YearsPepcoSpirit AeroSystems Holdings, Inc. Nussdorf is Chairman and Chief Executive Officer Clark Enterprises, Inc., a privately held company with extensive interests in real estate, private equity and traditional investments. He previously served as the 33rd Deputy Secretary of Defense. He served as Acting Secretary of Defense from January 1, 2019 to June 23, 2019. Mr. Shanahan helped lead the development of several key Department of Defense policies and strategies. Mr. Shanahan also championed several digital and technological advancements for the Department, including modernization in cybersecurity, artificial intelligence, cloud computing and command, control and communication. In June 2018, Mr. Shanahan established the Joint Artificial Intelligence Center and published the Department’s Artificial intelligence Strategy. Mr. Shanahan was previously at The Boeing Company, where he served for over 30 years in various senior roles, including as Senior Vice President, and Chief Operating OfficerSupply Chain & Operations, Senior Vice President of Clark Enterprises from 1998 to 2015 and asCommercial Airplane Programs, Vice President and TreasurerGeneral Manager of Clark Construction Group, LLC from 1977 through 2015.the 787 Dreamliner, Vice President and General Manager of Boeing Missile Defense Systems and Vice President and General Manager of Boeing Rotorcraft Systems.TrainedMr. Shanahan’s extensive experience as an attorneya senior leader in government, strategic planning background, extensive and CPA, Mr. Nussdorf has been at the forefrontin-depth knowledge of strategicour industry, deep operational experience in aerospace and long-term planningdefense, significant public company board experience and has vast experience managingbroad expertise in cybersecurity, information technology, artificial intelligence, cyber operations and finance for multiple businesses. Ourglobal security issues provide our Board believes that this experience,with unique insights into key areas of our business as a provider of services and solutions to U.S. government customers, as well as Mr. Nussdorf’s public company board leadership experience, adds valuable perspectives to our Board. He is an “audit committee financial expert” as defined in SEC rules.international governments and broader commercial markets. 6266FinanceCorporate Governance & Ethics (Chair) has servedcurrently serves as Chief Executive OfficerChairman of the board of directors of Oncor Electric Delivery Company LLC, a transmission and distribution electric utility, since April 2007. Hewhere he also served as Chairman of the BoardChief Executive Officer from April 2007 to 2015.until March 2018. He previously served as a strategic advisor to Oncor, helping to implement and execute growth and development strategies. Between March and October 2005, he served as Chief Financial Officer of Tenet Healthcare Corporation, one of the largestfor-profit hospital groups in the United States, and was Executive Vice President and Chief Financial Officer of Exelon Corporation, a large electricity generator and utility operator, from 2002 to February 2005. Before joining Exelon, heMr. Shapard was Executive Vice President and Chief Financial Officer of Ultramar Diamond Shamrock, a North American refining and marketing company, since 2000.company. Previously, from 1998 to 2000, Mr. Shapard was CEO and managing director of TXU Australia Pty. Ltd., a subsidiary of the former TXU Corp., which owned and operated electric generation, wholesale trading, retail, and electric and gas regulated utility businesses.Chair ofa member on our Board’s Audit & Finance Committee and as a member of the Audit Committee. He is an “audit committee financial expert”expert,” as defined by SEC rules.rules.106 | 20182022 Proxy Statement 6569FinanceTechnology & Information Security , a science and engineering company, (currently DuPont de Nemours, Inc.) from 1977 to 2016, serving in numerous senior roles during her tenure, including 10ten years as Vice President and Treasurer and most recently as Vice President, Corporate Productivity and Hospitality. Ms. Stalnecker previously served on the board of directors of PPL Corporation, a public holding company of PPL Electric Utilities Corporation, from December 2001 to January 2009, and on the board of trustees of Duke University from 2003 to 2015. She currently serves on the board of directors of Bioventus Inc., where she is also the chair of the Audit and audit committee at Duke University Health System, Inc. She alsoRisk Committee. In addition, Ms. Stalnecker serves on the board of directors of The Macquarie Optimum Funds, where she is the chair of the Audit Committee, and on the board of directors of the Duke University Health System, Inc., where she is chair of the Audit and Compliance Committee. She is also a Senior Adviser to the Boston Consulting Group, specializing in restructuring, finance transactions, activism and executive coaching.and Audit Committees.Committee. She is an “audit committee financial expert”expert,” as defined by SEC rules.rules. 6367Committees:CommitteesEthicsCorporate Governance & Corporate Responsibility (Chair)Ethics wholly ownedwholly-owned subsidiary of Nashville-based HCA (HospitalHospital Corporation of America).America. Ms. Williams has over 35 years of experience in healthcare IT. She spent 30 years in HCA’s Information Service Department in a variety of positions. Ms. Williams has previously served on the boards of Franklin Road Academy, the United Way of Middle Tennessee, The Nashville Alliance for Public Education, the National Alliance for Health Information Technology (NAHIT), The HCA Foundation and the American Hospital Association Working Group for Health IT Standards. Ms. Williams is an Emeritusemeritus member of the Vanderbilt University School of Engineering Committee of Visitors and a member of the Leadership Nashville class of 2010. She also served as an adjunct professor in the Owen School of Management of Vanderbilt University for several years.technology andtechnology. She provides insights and perspectives that our Board views as important to us as a provider of information technology services and solutions.20182022 Proxy Statement | 117 as a means of addressingto address the various needsinterests of our stockholders, employees, customers, supplier partners and other stakeholders. As a result, our Board has adopted Corporate Governance Guidelines which, together with our certificate of incorporation, bylaws, committee charters and other key governance practices and policies, provide the framework for our corporate governance. Our Corporate Governance Guidelines cover a wide range of subjects, including criteria for determining the independence and qualification of our directors. These guidelines are available on our website at www.leidos.com by clicking on the links entitled “Investors” followed by “Corporate Governance.” TheIn addition, the Board recognizes that observing good corporate governance practices is an ongoing responsibility. The NominatingCorporate Governance and Corporate GovernanceEthics Committee regularly reviews corporate governance developments and recommends revisions to these Corporate Governance Guidelines and other corporate governance documents as necessary to promote our and our stockholders’ best interests and to help ensure that we complysupport our compliance with all applicable laws, regulations and stock exchange requirements.also are required to comply with our Code of Business Conduct of the Board of Directors, intended to describewhich describes areas of ethical risk, provideprovides guidance to directors and helphelps foster a culture of honesty and accountability. This code addresses areas of professional conduct relating to service on our Board, including conflicts of interest, protection of confidential information, fair dealing and compliance with all applicable laws and regulations. are those who are independent of management and free from any relationship that, in the judgment of the Board, would interfere with their exercise of independent judgment. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization with which we have a relationship). The Board has established independence standards set forth in the Corporate Governance Guidelines that include all elements of independence required by the listing standards of the New York Stock Exchange, or NYSE.NominatingCorporate Governance and Corporate GovernanceEthics Committees must be independent directors as defined by the Corporate Governance Guidelines. Members of the Audit and Finance Committee and the Human Resources and Compensation Committee must also satisfy a separate independence requirement pursuant to the Securities Exchange Act of 1934requirements, which requiresrequire that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our subsidiaries other than their directors’ compensation or be an affiliated person of ours or any of our subsidiaries.whichthat requires them to disclose any transactions with us in which the director or any member of his or hersuch director’s immediate family might have a direct or potential conflict of interest. We also conduct internal diligence on our businesses related to transactions, relationships or arrangements between Leidos and our directors. Based on its review of an analysis of the responses,this information, the Board determined that all directorsMr. Dahlberg, Mr. Fubini, Dr. John, Mr. Kovarik, Mr. Kraemer, Dr. May, Dr. Mohapatra, Mr. Shanahan, Mr. Shapard, Ms. Stalnecker and Ms. Williams are independent under its guidelines and free from any relationship that would interfere with the exercise of their independent judgment, except for Roger A.judgment. Mr. Krone was not deemed independent because of his role as our Chief Executive Officer.NominatingCorporate Governance and Corporate GovernanceEthics Committee reviews the composition of the Board to determineassess the qualifications and areas of12 | 2018 Proxy StatementCorporate GovernancecompositionBoard’s exercise of the Board.its duties. In evaluating potential nominees, the Committee and the Board consider each individual in the context of the Board as a whole, with the objective of recommending to stockholders a slate of individual director nominees that can best continue the success of our business and advance stockholders’ interests. In evaluating the suitability of individual nominees, the NominatingCorporate Governance and Corporate GovernanceEthics Committee and the Board consider many factors, including: u expertise u interpersonal u commitment u demonstrated u benefitsthe companyLeidos the benefit of experience and insight that its directors have accumulated during their tenure. Nominating and Corporate Governance and Ethics Committee reviews the director selection process annually and the Committee and the Board assess its effectiveness through an annual written evaluation process. In addition, the Nominating and Corporate Governance Committee has been directed by the Board to observe the following principles contained in our Corporate Governance Guidelines:ua majority of directors must meet the independence criteria established by the Board;ubased upon the desired number of 7 to 14 directors, no more than three directors may be an employee of ours;uonly a full-time employee who serves as either the Chief Executive Officer or one of his or her direct reports will be considered as a candidate for an employee director position; anduno director nominee may be a consultant to us.In addition,non-employeeThe Committee has adopted policies so that the independent directors may not serve on the boards of directors of more than fourthree other publicly-traded companies. Employee directors may not serve on the board of more than one other public company and any board membership of employee directors must be approved in advance by the Chief Executive Officer, the Chair of the Board or the Independent Lead Director, as appropriate. We expect our directors to advise the Chair of the Corporate Governance and Ethics Committee and the Chair of the Board before accepting a membership on other boards of directors, accepting membership on any audit committee or other significant committee assignment (such as a lead or presiding director role) on any other board of directors, or establishing or materially changing other significant relationships with businesses, institutions, governmental units or regulatory entities that may result in significant time commitments or a change in the director’s relationship to the Company. Moreover, directors are expected to act ethically at all times and adhere to our Code of Business Conduct of the Board.Board of Directors.In additionDirector Nomination ProcessBoard’s annual self-evaluation processBoard in February 2022 and was recommended to assess the effectivenessCorporate Governance and Ethics Committee by a third-party director search firm.Committees,committees, along with other factors the Board will periodically engage an independent third partydeems appropriate as part of board succession planning and the nomination of directors.comprehensive assessmentthird-party facilitator to undertake an in-depth study of the Board’sits own effectiveness to continuously improve governance and support the company’sCompany’s performance. The evaluation process sought direct feedback from each director and senior members of management, and the results were reported to and discussed with the Board. The report includes an assessment of the Board’s strengths and areas of opportunities, including a discussion regarding the Board’s composition, structure and oversight duties.Lawrence C. NussdorfChief Executive Officer and Robert S. Shapard as independentIndependent Lead Director. Our Board believes that it is in the best interests of stockholders for the Board to have the flexibility toNominatingCorporate Governance and Corporate GovernanceEthics Committee nominates an independent director to serve as “Lead“Independent Lead Director,” who then must be approved by at least a majority of the independent directors.TheOur Lead Director has specifically delineatedis empowered with, and exercises robust, well-defined duties, which include: u reviewing u providing u calling u presiding,2018 Proxy Statement | 13Corporate Governance u helping u being u serving u beinginterested parties,key stakeholders, if requested; u collaborating u collaboratingNominatingCorporate Governance and Corporate GovernanceEthics Committee on the performance and structure of the Board and its committees, including the performance of individual directors; u on u performingposition ofindependent Lead Director. Currently, 12 of our 13 directors are “independent” as defined by the NYSE rules and our Corporate Governance Guidelines.Director position. The Board’s Audit and Finance, Human Resources and Compensation Nominating and Corporate Governance and Innovation and TechnologyEthics Committees are each comprised entirely of independent directors.company.Company. The Board also oversees risk in particular areas through its committee structure. structure:u u u u Auditcommittees coordinate among each other as necessary to support optimal oversight of risks; each Committee evaluates the company’s guidelines and policies regarding risk assessment and risk management, including risks related to internal control over financial reporting, the company’s major financial risk exposures, data security risk exposures and the steps management has taken to monitor and control such exposures. The Human Resources and Compensation Committee evaluates risks potentially arising from the company’s human resources and compensation policies and practices. The Finance Committee oversees financial, capital investment and insurance risks. The Ethics and Corporate Responsibility Committee oversees risks associated with unethical conduct and political, social, environmental and reputational risks. The Classified Business Oversight Committee oversees risk reviewreports its activities applicable to the company’s classified business activitiesBoard and receives reports fromfacilitates discussions among directors. Company management on particular classified projects involving significant performance, financial or reputational risks. The company also utilizesmaintains an internal Enterprise Risk Management Committee, comprised of the Chief Executive Officer and senior managementexecutives that, among other things, establishes the overall corporate risk strategy and ensures thatreviews policies, systems, processes and training are established to identifywith the goal of identifying and addressaddressing appropriate risk matters within the company. This management committee reports regularly to the Audit and Finance Committee and annually to the full Board on its activities and findings, highlighting the key risks we face and management’s actions for managingto address those risks.u u u u u u u u u u u u u u u u u u u 2017,2021, the Board held seven meetings of the entire Board. The independent directors met six times during the year, either in executive session of regular board meetings or in separate meetings. Mr. Nussdorf,Shapard, the independentIndependent Lead Director, presides at all executive sessions of our independent directors as provided by our Corporate Governance Guidelines. During fiscal 2017,2021, no director attended fewer than 75% of the aggregate of the meetings of the Board and committees of the Board on which they served. In addition, all directors attended the 2017 annual meeting of stockholders. It is our policy to encourage all directors to attend our annual meeting.The Board has the following principal standing committees: Audit, Classified Business Oversight, Ethicsmeeting, and Corporate Responsibility, Finance, Human Resources and Compensation, Innovation and Technology and Nominating and Corporate Governance. The chartersall of these committees are available in print to any stockholder who requests them and are also available on our website at www.leidos.com by clicking on the links entitled “Investors,” “Corporate Governance” and then “Board Committees.”then-serving directors attended our 2021 annual meeting.14 | 2018 Proxy StatementCorporate GovernanceListed below are the members of each of the seven standing committees as of the date of this proxy statement: Audit ClassifiedBusiness Oversight Ethics &Corporate Responsibility Finance HumanResources & Compensation Innovation & TechnologyNominating &Corporate Governance Gregory R. Dahlberg David G. Fubini Miriam E. John John P. Jumper Frank Kendall III Harry M.J. Kraemer, Jr. Roger A. Krone Gary S. May Surya N. Mohapatra Lawrence C. Nussdorf Robert S. Shapard Susan M. Stalnecker Noel B. Williams Committee Chair Audit Committee Financial ExpertFollowing are descriptions of the primary areas of responsibility for each of the seven standing committees: Audit CommitteeNumber of Meetings in Last Fiscal Year: 7uAppoints and evaluates independent auditor and approves fees;uPre-approves audit and permittednon-audit services;uReviews any audit problems;uReviews adequacy of internal controls over financial reporting and disclosure controls and procedures;uReviews and updates the internal audit plan;uReviews any significant risks and exposures and steps taken to minimize risks;uReviews quarterly and annual financial statements prior to public release;uReviews critical accounting policies or changes in accounting policies; anduReviews periodically legal matters that may impact the financial statements. Classified Business Oversight CommitteeNumber of Meetings in Last Fiscal Year: 2uReviews policies, processes, procedures, training and risk review activities applicable to our classified business activities;20182022 Proxy Statement | 15
Compensation uCorporate
Governance & Ethics Reviews reports from managementTechnology &
Information Securityparticular classified projects involving significant performance, financial or reputational risks; andFebruary 11, 2022, effective February 16, 2022.u Reviews other classified business issues that the Board or management would like the Committee to review. EthicsAudit & Corporate ResponsibilityFinance Committee Number of Meetings in Last Fiscal Year: 35 u Oversees ethical responsibilities of employeesconsultants under our policiesevaluates independent auditor and procedures;pre-approves fees; u Reviews policiesprocedures addressing the resolution of conflicts;permitted non-audit services; u procedures for the receipt, retention and treatment of complaints regarding violations of our policies related to ethical conduct and legal compliance;any audit problems; u Monitors the effectivenessour ethics, complianceinternal controls over financial reporting and training programsdisclosure controls and related administrative policies; andprocedures; u u u u and practicesor changes in the areas of corporate responsibility including such political, social and environmental issuesaccounting policies;u affect our business operations, performance, public image or reputation.significantly impact the financial statements; andu – – – – – – – FinanceCorporate Governance & Ethics Committee Number of Meetings in Last Fiscal Year: 4 u Reviewsmakes any necessary recommendations to the Board and management concerning:recommends director nominees; –u capital structure, issuanceequity and debt securities and the incurrence of indebtedness;Board; –u paymentdividends and stock repurchases;the Board’s committees; –u financial projectionsguidance;develops long-range plans for CEO and management succession; –u general financial planning, cash flow and working capital management, capital budgeting and expenditures; –u tax planning and compliance; –u mergers, acquisitionsstrategic transactions;practices regarding ethical responsibilities and monitors the effectiveness of our ethics, compliance and training programs; –u investorprogramswith employees, customers, stockholders and policies.other constituents; andu Human Resources & Compensation Committee Number of Meetings in Last Fiscal Year: 64 u u u u anthe annual report on executive compensation for inclusion in our proxy statement; u u u reviewing u reviewing16 | 2018 Proxy StatementCorporate Governance u providing u reviewingFrederic W.FW Cook & Co. pursuant to applicable SEC and NYSE listing rules and concluded that the firm’s work for the Committee does not raise any conflict of interest.Compensation Committee Interlocks and Insider ParticipationNone of the members of our Human Resources and Compensation Committee has, at any time, been an officer or employee of ours. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Human Resources and Compensation Committee. InnovationTechnology & Technology CommitteeNumber of Meetings in Last Fiscal Year: 3uReviews technology capabilities and provides guidance on our technology and innovation strategy;uAssesses our technical workforce and its suitability for meeting our needs;uReviews and advises on our research and development expenditure plans;uAssists the Board in overseeing investments in science and technology;uAssesses science and technology trends and how we could take advantage of emerging technologies; anduReviews the effectiveness of our internal research and development program as a driver of innovation and entrepreneurship. Nominating & Corporate GovernanceInformation Security Committee Number of Meetings in Last Fiscal Year: 4 u Evaluates, identifiesrecommends director nominees;innovation; u Reviews the compositionprocedures of the Board;innovation; u Makes recommendations regardingsize, compositionBoard in overseeing risks relating to technology development, information security and chartersthe effectiveness of the Board’s committees;our processes to identify, monitor and mitigate these risks; and u and develops long-range plans for CEO and management succession;issues related to our security of enterprise-wide information technology-related risks.uDevelops a set of corporate governance principles;uRecommends an independent director to serve asnon-executive Chair of the Board or as Lead Director; anduDevelops and oversees an annual self-evaluation process of the Board and its committees.Director Nominations ProcessThe Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Committee regularly assesses the Board’s current and projected strengths and needs by, among other things, reviewing the Board’s current profile, the criteria for board membership described in this proxy statement beginning on page 12 and our current and future needs.When vacancies on the Board are anticipated or otherwise arise, the Committee prepares a target candidate profile and develops an initial list of director candidates identified by the current members of the Board, business contacts, community leaders and members of management. The Committee may also retain a professional search firm to assist it in developing a list of qualified candidates. The Nominating and Corporate Governance Committee would also consider any stockholder recommendations for director nominees that are properly received. The Committee then screens and evaluates the resulting slate of director candidates to identify those individuals who best fit the target candidate profile and Board membership criteria and provides the Board with its recommendations. The Board then considers the recommendations and votes on whether to nominate the director candidate for election by the stockholders at the annual meeting or to appoint the director candidate to fill a vacancy on the Board.2018 Proxy Statement | 17Corporate GovernanceStockholder NominationsAny stockholder may nominate a person for election as a director by complying with the procedures set forth in our bylaws.Under Section 3.03 of our bylaws, in order for a stockholder to nominate a person for election as a director without inclusion in our Proxy Statement, such stockholder must give timely notice to our Corporate Secretary prior to the meeting at which directors are to be elected. To be timely, notice must be delivered to the Corporate Secretary not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. If the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, however, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the 90th day prior to such annual meeting or the 10th day following the day on which we first publicly announce the date of such annual meeting, whichever occurs later.In April 2016, our board adopted a proxy access bylaw. Under Section 3.03(c) of our bylaws, a stockholder or group of stockholders (up to 20) who have owned at least three percent of common stock for at least three years can submit director nominees, limited to the greater of (a) two or (b) 20% of the board, for inclusion in our proxy statement, if the nominating stockholder(s) satisfies the requirements specified in the bylaws. To be timely, the notice must be delivered to the Corporate Secretary not later than the close of business on the 120th day, nor earlier than the close of business on the 150th day, prior to the first anniversary of the date that the proxy statement for the annual meeting was sent to stockholders. In the event, however, that the annual meeting is not scheduled to be held within a period that begins 30 days before the first anniversary date of the preceding year’s annual meeting of stockholders and ends 30 days after the first anniversary date of the preceding year’s annual meeting of stockholders, then the notice of nomination must be provided by the later of the close of business on the date that is 180 days prior to the annual meeting or the tenth day following the date such annual meeting is first publicly announced or disclosed.In each case, such stockholder’s notice must include certain information as provided in our bylaws about the nominee, the stockholder and the underlying beneficial owner, if any, including his or her name, age, address, occupation, shares, information about derivatives, hedges, short positions, understandings or agreements regarding the economic and voting interests of the nominee, the stockholder and related persons with respect to our stock, if any, and such other information as would be required to be disclosed in a proxy statement soliciting proxies for the election of the proposed nominee. In addition, the notice must contain certain information about the stockholder proposing to nominate that person. We may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of such proposed nominee to serve as a director. A stockholder’s notice must be updated, if necessary so that the information submitted is true and correct as of the record date for determining stockholders entitled to receive notice of the meeting.Mandatory Retirement PolicyThe Board has adopted a mandatory retirement age of 75 fornon-employee directors and 65 for employee directors. It is the general policy of the Nominating and Corporate Governance Committee not to nominate candidates forre-election at any annual stockholder meeting to be held after he or she has attained the applicable retirement age.The Board usesWe use a combination of cash and stock-based incentives to attract and retain qualified candidates to serve as directors. In determining director compensation, the Board considerswe consider the significant amount of time required of our directors in fulfilling their duties, as well as the skill and expertise of our directors. FW Cook provides competitive compensation data and director compensation program recommendations to the Human Resources and Compensation Committee for review to assist in determining its recommendation. The competitive compensation data includes information regarding the compensation (cash, equity and other benefits) of the non-employee directors within our compensation peer group. The Human Resources and Compensation Committee periodically reviews director compensation with the assistance of independent compensation consultantsconsiders this information and recommends to the Board the form and amount of compensation to be provided. The director compensation described below represents the total compensation received by our directors for their service as directors for both Leidos Holdings, Inc. and Leidos, Inc. Annual retainer amounts are prorated based on time served on the Board or in a committee chair role during the year. We also reimburse our directors20182022 Proxy Statement The following is a summary of the compensation that we provide to ournon-employee directors:Cash CompensationOur directors receive a cash retainer for their service on the Board. For fiscal 2017 our directors were paid an annual retainer of $70,000, except that, Mr. Kendall, who joined the Board in June 2017, was paid apro-rata portion of the annual retainer in the amount of $35,000. The Chairs of the Audit Committee and the Human Resources and Compensation Committee were paid an additional annual retainer of $20,000 and $15,000, respectively. The chair of each other committee of the Board was paid an additional annual retainer of $10,000. The independent Lead Director also receives an additional annual retainer of $25,000. In addition to the cash retainers,non-employee directors also received $2,000 for each meeting of the Board and committee they attended. We also reimburse our directors for expenses incurred while attending meetings or otherwise performing services as a director. We do not pay separate meeting fees. Our employee director does not receive additional compensation for service as a director.Equity CompensationDirectors receive annual equity awards under our equity incentive plan. For fiscal 2017, eachThe following is a summary of our annual compensation program for our non-employeedirectors, received equity awards valued at approximately $150,000, of whichtwo-thirds wasas paid for service in the form of restricted stock units andone-third was in the form of stock options. These equity awards vest on the earlier of one year from the date of grant or on the date of the next annual meeting of stockholders following the date of grant. If a director retires due to our mandatory retirement policy, the director’s equity awards continue to vest as scheduled and options remain exercisable for the remainder of the option term.2021: Pay Element TheNon-employee directors are eligible to defer all or any portion of their cash retainers or fees or certain equity compensation into our Keystaff Deferral Plan or Key Executive Stock Deferral Plan, or both. These plans are described in further detail under the caption “Executive Compensation—Nonqualified Deferred Compensation” below.thetheir annual cash retainer. All of our directors currently meetcontinue to observe this holding requirement. In addition to these ownership guidelines, our directors are also subject to policies that prohibit certain short-term or speculative transactions in our securities that we believe carry a greater risk of liability for insider trading violations or may create an appearance of impropriety. Our policy requires directors to obtain preclearance from our General Counsel for all transactions in our securities.The following table sets forth information regarding the compensation paid In 2021, no directors were granted an exception to our directors for service in fiscal 2017.these requirements. $98,000 $100,025 $49,508 $247,533 $100,000 $100,025 $49,508 $249,533 $127,000 $100,025 $49,508 $276,533 $117,000 $100,025 $49,508 $266,533 $51,000 $100,008 $49,678 $200,686 $127,000 $100,025 $49,508 $276,533 $119,250 $100,025 $49,508 $268,783 $104,000 $100,025 $49,508 $253,533 $157,000 $100,025 $49,508 $306,533 $123,000 $100,025 $49,508 $272,533 $104,000 $100,025 $49,508 $253,533 $117,000 $100,025 $49,508 $266,533 20182022 Proxy Statement | 19 125,000 110,030 50,018 285,048 125,000 110,030 50,018 285,048 140,000 110,030 50,018 300,048 93,750 110,030 50,018 253,798 150,000 110,030 50,018 310,048 125,000 110,030 50,018 285,048 125,000 110,030 50,018 285,048 125,000 110,030 50,018 285,048 175,000 110,030 50,018 335,048 125,000 110,030 50,018 285,048 140,000 110,030 50,018 300,048 (1) (2) fees and meeting fees. TheNon-employee directors are eligible to defer such cash fees into our Keystaff Deferral Plan and Key Executive Stock Deferral Plan. Dr. John, Mr. Kendall and Mr. Kraemer elected to defer all of their fees earned in fiscal 20172021 into our Keystaff Deferral Plan. Dr. John elected to defer all of her fees earned in fiscal 2021 into our Key Executive Stock Deferral Plan.(3) 1517 of Notes to Consolidated Financial Statements included in our Annual Report on Form10-K as filed with the SEC on February 23, 2018. For fiscal 2017, each of our15, 2022. non-employeeNon-employee directors received restricted stock units with a grant date fair value of approximately $100,000. The directors are eligible to defer such awards into our Key Executive Stock Deferral Plan. Dr. John, Mr. Kendall and Mr. Kraemer elected to defer all of their restricted stock units earnedgranted in fiscal 20172021 into our Key Executive Stock Deferral Plan.2017,2021, the followingnon-employee directors held the following number of unvested stock units, including unvested stock units in our Key Executive Stock Deferral Plan: 1,8981,059 1,8981,059 1,898 John P. Jumper1,8981,059 — 1,771 1,059 M.J.M. J. Kraemer, Jr. 1,8981,059 1,8981,059 1,898 Lawrence C. Nussdorf1,8981,059 1,8981,059 1,8981,059 1,8981,059 (4)Amounts in this column reflect the grant date fair value computed in accordance with FASB ASC Topic 718. Option awards granted to directors in fiscal 2017 vest on the earlier of one year from the date of grant or on the date of the next annual meeting of stockholders following the date of grant.20182022 Proxy Statement During fiscal 2017, ournon-employee directors were each issued options to purchase shares of our common stock, with a grant date fair value of approximately $50,000. At the end of fiscal 2017, ournon-employee directors held vested and unvested options to purchase the following number of shares of our common stock:(4) 9,98117,396 42,33327,919 56,316 John P. Jumper*68,31027,919 — 4,669 7,224 M.J.M. J. Kraemer, Jr. 56,31627,919 24,13431,549 9,981 Lawrence C. Nussdorf51,32617,396 42,33327,919 9,98117,396 42,33327,919 * Some of the stock options held by Mr. Jumper were earned in his capacity as our Chief Executive Officer.(5) EthicsAudit and Corporate ResponsibilityFinance Committee the authority to review and approve the material terms of any proposed related party transaction. If a proposed related party transaction involves anon-employee director or nominee for election as a director and may be material to a consideration of that person’s independence, the matter is also considered by the Chair of the Board and the Chair of the NominatingAudit and Corporate GovernanceFinance Committee.EthicsAudit and Corporate ResponsibilityFinance Committee considers, among other factors it deems appropriate, the potential benefits to us, the impact on a director’s or nominee’s independence or an executive officer’s relationship with or service to us, whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction. In deciding to approve a transaction, the Committee may, in its sole discretion, impose such conditions as it deems appropriate on us or the related party.party or us. Any transactions involving the compensation of executive officers, however, are to be reviewed and approved by the Human Resources and Compensation Committee. If a related party transaction will be ongoing, the EthicsAudit and Corporate ResponsibilityFinance Committee may establish guidelines to be followed in our ongoing dealings with the related party. Thereafter, the EthicsAudit and Corporate ResponsibilityFinance Committee will review and assess ongoing relationships with the related party on at least an annual basis to determine whether they are in compliancecomply with the Committee’s guidelines and that the related party transaction remains appropriate. There were no transactions during fiscal 2017which any related party had a direct or indirect material interest.2021, including annual salary and incentive awards commensurate with his qualifications, responsibilities and other employees holding similar positions. This relationship was approved by the Audit and Finance Committee.20182022 Proxy Statement | 21 interested partieskey stakeholders may communicate with the Board of Directors, the independent directors as a group or any of the independent directors, including Committee Chairs and the Independent Lead Director, by using the following address:11951 Freedom Drive1750 Presidents Street20182022 Proxy Statement u pay u provide the same types of benefits for executives as other employees, with no special or supplemental pension, health or death benefits for executives;utarget u enable u require u avoid u compete“Say-on-Pay, “Say-on-Pay,” gives you, as a stockholder, the opportunity to advise whether or not you approve of our executive compensation program and policies by voting on the following resolution:ana non-binding, advisory basis, the compensation of the named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the CD&A, compensation tables and any related material.narrative discussion contained in the “Executive Compensation” section.company,Company, our Board or the Human Resources and Compensation Committee of the Board. Our Board values the opinions of our stockholders. To the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, the Human Resources and Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.BrokerAbstentions will have the effect of a vote against the proposal and broker non-votes are not entitled to vote on this proposal and will not be counted in evaluating the results of the vote. This advisory vote on executive compensation isnon-binding on the Board.statementstatement..20182022 Proxy Statement | 23 officers during fiscal 2017:officers: u u James C. Reagan— u Timothy J. Reardon—Defense & Intelligence Groupand Chief Financial Officer(2) u Jonathan W. Scholl—HealthDefense Group u Angela L. Heise—Civil Groupand General Counsel u Vincent A. Maffeo—Former and General CounselChief Corporate Operations Officer(3)(1) uMichael E. Leiter— Former President, Defense GroupFor purposes of this CD&A, the narrative as well as the tables, charts and other graphics below focus on the “active” named executive officers as of the end of the fiscal year. The tabular disclosures (e.g. the Summary Compensation Table) following this CD&A provide data on all of our named executive officers – current and former. The benefits provided to Mr. Leiter upon termination under his Severance Protection Agreement with us, and to Mr. Maffeo upon his retirement, are discussed in the tables and narrative following this CD&A, in the section entitled “Potential Payments upon Termination or a Change in Control.”(2) (3) Executive SummaryCompensation Programs and Our Pay for Performance Philosophy The tabular disclosures following this CD&A provide data on all of our named executive officers.goals. Our programs are executed according to our pay for performance philosophy, by establishing and paying for achievement ofpre-established performance targets that measure revenue,goals, which include adjusted operating income, total backlog, free cash flow, revenue and days working capital–as well as relative total stockholdershareholder return. A small portion is also contingent on personal and leadership goals. We believe these factors contribute to a top-tier workplace environment, improve our efficiency and effectiveness, help us to win key business opportunities and ultimately drive long-term value for stockholders.20182022 Proxy Statement We designed our annual incentive program to be based 80% on results measured against objective financial targets and 20% on personal performance goals and leadership behaviors. While financial performance is the most significant factor, other factors—such as leadership behaviors based on ethics, integrity, and collaboration—also impact the payout for our annual cash incentive program through the personal performance score. We believe these factors contribute toPay at atop-tier workplace environment, improve our efficiency and effectiveness, help us to win key business opportunities, and ultimately drive long-term value for stockholders. A substantial majority of total target compensation awarded to our named executive officers is in the form of variable, performance-based incentive compensation, with only a small portion of the total potential compensation provided in the form of “fixed” compensation in the form of base salary, as shown below for our most recent fiscal year:The pay mix charts above are solely based on target compensation. Target compensation consists of the annual rate of base salary and the short-term and long-term incentive targets approved by the Committee in February 2017. More information about the different elements that comprise our variable incentive compensation programs, the performance measures that we use to motivate our executives and the compensation mix for each of our active named executive officers is provided in the following pages.2018 Proxy Statement | 25Compensation Discussion & AnalysisBusiness Performance and Compensation Highlights for Fiscal 2017Our performance in 2017 met or exceeded our expectations in several respects, with many operational successes resulting in overall strong financial results. We continued to integrate our businesses following a major acquisition in 2016, and our employees stayed focused on delivering services for our customers while becoming leaner and more agile as an organization and improving our profitability. As specifically measured by our annual cash incentive award metrics for fiscal 2017, however, our results were mixed. While our adjusted operating income results significantly exceeded our target, reflecting strong execution across our businesses and diligent efforts in driving cost synergies, our backlog was slightly below our target, and we underperformed against our stretch days working capital goals. During fiscal 2017, we achieved 113% of our adjusted operating income target, 96% of our backlog target, and 75% of our days working capital target at the enterprise level:Business Performance: EnterpriseTarget vs. ActualWe believe that our performance on these metrics—which resulted in the payment of cash incentives slightly below target for each of our active named executive officers, except for Mr. Scholl, who was paid slightly above target—demonstrates the alignment of pay and performance in our executive compensation programs. Pay for performance alignment is also reflected in other specific compensation decisions described in this CD&A, including:uAll of our fiscal 2017 long-term incentives were performance based, with each of our named executive officers receiving 50% of their long-term incentives in the form of three-year performance share program awards, 30% in the form of performance restricted stock units (PRSUs), and 20% in the form of stock options.uThe vesting and payout levels for our performance share awards are based on achievement of a relative total stockholder return metric (weighted 50%) and an adjusted operating income goal (weighted 50%), with both metrics measuring cumulative results over a three-year performance period.uThe PRSUs granted in 2017 will vest over four years (25% on each anniversary of grant date) but are subject to forfeiture in totality if we fail to meet our revenue goal for the first year.26 | 2018 Proxy StatementCompensation Discussion & AnalysisCompensation GovernanceOther aspects of our compensation program are intended to further align our executives’ interests with stockholders. Below is a list of our current compensation practices to help support this alignment: Checklist of Compensation PracticesWhat We DoWhat We Don’t Do☑Award significant majority of pay as performance-based and not guaranteed☒No special or supplemental pension, health or death benefits for executives☑Mitigate undue risk in compensation programs by performing annual risk assessments☒No excise taxgross-ups☑Condition acceleration of equity on “double-trigger” change in control provisions in award agreements☒No contracts with multi-year guaranteed salary increases ornon-performance bonus arrangements☑Prohibit pledging, hedging and short sales of company stock by executive officers and directors☒No executive perks☑Provide change in control severance protection in line with best practices☒No discounting, reloading, orre-pricing stock options without stockholder approval☑Clawback policy to recover both cash and equity incentives in case of a financial restatement or misconduct☑Require executives to hold a percentage of equity (net-of-taxes)Stockholder Advisory VoteAt our last annual stockholders’ meeting in May 2017, we held a stockholder advisory vote on the compensation of our named executive officers, commonly referred to as asay-on-pay vote. Our stockholders overwhelmingly approved the compensation of our named executive officers, with approximately 95% of stockholder votes cast in favor of oursay-on-pay resolution. As we evaluated our compensation practices during fiscal 2017, we considered the support our stockholders expressed for our pay for performance compensation philosophy and that influenced our decision not to make any significant changes to our executive compensation programs this year. We continued to emphasize short- and long-term incentive compensation, targeted at competitive market median levels, with a substantial majority of total compensation based on the achievement of financial performance goals designed to deliver value for our stockholders.At our 2017 annual meeting of stockholders, our stockholders expressed a preference for an annual advisory vote on executive compensation, in accordance with our Board’s recommendation. Accordingly, we expect to continue holding an advisory stockholder vote on the compensation of our named executive officers each year.Elements and Objectives of Our Compensation Program Glanceprincipal elements of compensation are provided under our executive compensation program to our named executive officers:Base Salary. Consistent with our philosophy of tying pay to performance, our executives receive a minority portion of their overall compensation in the form of base salary. In order to effectively attract and retain talented executives, we provide a fixed base salary to our executive officers that is competitive with peer company data based on their respective levels of responsibility, expertise, skills, knowledge and experience.2018 Proxy Statement | 27Compensation Discussion & AnalysisVariable Incentive Compensation. We use a combination of cash and equity incentive awards to drive and reward performance in key areas over different time frames. Our annual cash incentive awards were designed to measure performance againstpre-determined goals established for the fiscal year in order to encourage and to reward contributions to our annual financial, operating and strategic objectives. We provided long-term equity incentive awards to our executive officers to motivate them to stay with us and build stockholder value through their future performance, and we do not generally consider an executive officer’s current stock holdings or outstanding equity awards in making annual grants. The following charttable summarizes the elements of our executive compensation program and the relevant performance measures and time frames supporting our base and variable incentive compensation elements for fiscal 2017:2021: Base PaySalary 1 YearCurrent pay Short-Term Annual
Cash Incentive performance; payable in cash.performance. 1 Year1-year performance period (each goal = maximum score of 150%)
- Total Backlog (25%(40%)Days Working Capital (15%- Free Cash Flow (20%) Achievements -ScoreAchievements—Adjustment factor of 0% to 200%150% applied based on individualevaluation of leadership behaviorsvalues such as ethics and achievement ofintegrity, personal goalsdevelopment and engagement the form of shares of Leidosour common stock based onand designed to encourage and reward longer-term growth, profitability and stock price appreciation by tying share payouts to the achievement of key financial resultsgoals. 3 Years3-year performance period Adjusted Operating Income (50%)
Relative Total Stockholder(PRSUs)(“PRSUs”) DesignedDistributed in shares of our common stock and designed to drive sustainable performance that delivers long-term value to stockholders while directly aligning interests of executives and directly ties the interest to those stockholders; distributed in the form of shares of Leidos common stockenhances executive retention. 4 Years4-year ratable annual vesting subject to performance hurdle One-year Revenue Goal (100%)Adjusted earnings per share hurdle must be met forwith respect to the first year for Unitsunits to be eligible for vesting appreciationappreciation. 7 Years4-year ratable annual vesting with a 7-year term Priceprice appreciation (100%)u u u (1) —% (1) (2) (3) Other Benefits.Financial Performance Targets.Because our financial results are considered the most important factors in setting pay and are objectively measurable, we weight these metrics most heavily; financial goals represent 80% of the target opportunity under our annual cash incentive program. To the extent that performance for a financial metric is less than 80% of target (threshold performance) no bonus amount would be paid with respect to that metric. Maximum payout (150% of target) for each component is provided for performance at or above 125% of target. The Committee generally seeks to set financial performance goals for the annual cash incentive program at levels that reflect improvement over the prior year’s results. For 2021, the Committee established and approved goals that generally targeted improvement over 2020 results. The free cash flow target was temporarily adjusted to reflect the one-time impacts of (a) the deferral of employment tax deposits and payments under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), (b) the proceeds from a judgment in the VirnetX legal matter, and (c) certain changes in customer billing and advance payments. Targets originally approved for 2021 did not include 1901 Group and Gibbs & Cox acquisitions. The target for total backlog was subsequently adjusted to account for 1901 Group and all targets were adjusted for the Gibbs & Cox acquisition. The target adjustments applied to the NEOs and other employees eligible to participate in the Company’s cash incentive plan. (1)
Financial Score
Personal Score (1) u u
Shares
Value
Equity Value
Compensation Peer Group Median 0% Less than 50 percentage points below compensation peer group 50% 50 percentage points below compensation peer group 100% At compensation peer group median 7.45% above compensation
peer group median
107% 150% 50 percentage points above compensation peer group (1) (2) benefits generally available to our other employees, such as participation in our health, benefitthe following benefits:retirement programs. Welfare Benefitsalso entitled to certainparticipate in all health and welfare plans that we generally offer to all of our eligible employees, which provide medical, dental, health, group term life insurance and disability benefits. Beginning in 2020, the Committee approved a program that extends to our executive officers the ability to participate in a comprehensive voluntary annual health screening program. We believe that these health and welfare benefits (describedare reasonable in scope and amount and are of the kind typically offered by other companies against which we compete for executive talent. For 2021, Ms. Schmanske waived participation in the sectionmedical coverage plan and health screening program and Mr. Fasano waived participation in the health screening program.“Potential Changeto participate in Controlthe same tax-qualified defined contribution retirement plan that is generally available to all of our eligible employees, subject to certain limits on the amounts that each participant may contribute each year. We make matching contributions to eligible participants’ retirement plan accounts based on a percentage of their “eligible compensation” under applicable rules. We believe that this retirement program assists our executives in saving for their retirement in a tax-effective manner. We also provide financial advisory services to our executive officers. Mr. Reagan was not eligible to receive financial advisory benefits upon his departure from the Chief Financial Officer role. Ms. Schmanske and Severance Benefits”Mr. Fasano waived participation in the financial advisory services program.) ifemployment is terminated following a changeeligible salary. The deferred balances under the plans are fully vested and will be paid upon retirement or termination or are held in control.specified date accounts, which pay out in the year specified by the participant, including years prior to termination. These plans are described in more detail under “Nonqualified Deferred Compensation.”Considerations in DeterminingHow We Determine Direct Compensationcompany’sCompany’s overall performance, the performance of operating units under the28 | 2018 Proxy StatementCompensation Discussion & Analysis u the u the u theperformance share awardsPSAs that may be earned for the performance period beginning in that fiscal year and the performance goals and criteria upon which the amounts of the PSAs and PRSU awards for the relevant performance period will be determined; and u theequitylong-term incentive awards (including performance share awards, performance restricted stock unitsPSAs, PRSUs and stock options) to be granted to our executive officers.amount.amount for each goal. Upon completion of each fiscal year, the Committee approves the payment, if any, of cash incentive awards and the number of performance shares, if any, that are earned based upon the achievement of the predetermined performance goals and criteria for the performance cyclecycles just completed.Company and Operational Sector PerformanceBase SalaryOur overall enterpriseThe Committee reviews executive officers’ base salaries annually or at the time of promotion or a substantial change in responsibilities based on the criteria described above. For fiscal 2021, the Committee considered its independent consultant’s analysis of salary levels for comparable positions in the compensation peer group based on proxy and survey data. Individual base salary amounts also reflect the Committee’s judgment with respect to each executive officer’s level of responsibility, individual performance, (or a combinationexperience and other factors, including internal equity considerations, the individual’s historical compensation and any retention concerns.company enterprise and business group performance2021 the Committee approved increases in the base salaries for all of our named executive officers with operational responsibilities) determines 80%in order to bring them closer to the market median of the amount of anyour compensation peer group. —% (1) (2) (3) 100%personal performance goals and other relevant factors.anythe performance sharegoals are shown below:awards and PRSUs earned duringat levels that reflect improvement over the prior fiscal year. Amountsyear’s results. For 2021, the Committee established and approved goals that generally targeted improvement over 2020 results. The free cash flow target was temporarily adjusted to reflect the one-time impacts of (a) the deferral of employment tax deposits and payments under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), (b) the proceeds from a judgment in the VirnetX legal matter, and (c) certain changes in customer billing and advance payments. Targets originally approved for 2021 did not include 1901 Group and Gibbs & Cox acquisitions. The target for total backlog was subsequently adjusted to account for 1901 Group and all targets were adjusted for the Gibbs & Cox acquisition. The target adjustments applied to the NEOs and other employees eligible to participate in the Company’s cash incentive plan. principally determined based uponresponsible for the company’s or group’s achievement of our financial andgoals over time. Accordingly, non-formulaic personal goals represent 20% of the target opportunity under our annual cash incentive program, in order to encourage individual efforts in an array of areas that we believe will ultimately lead to improved financial performance for the company.objectives setincome goal for the fiscal year would result in no payout for the financial goals portion of the annual cash incentive.year, butyear. For our named executive officers, the targeted enterprise financial performance and actual performance for fiscal 2021 were: (1) retainsreviewed each individual’s level of achievement and also considered input from the discretion to reduceChief Executive Officer—or the payouts when appropriate.Individual PerformanceThe maximum score for performance on any of the financial metrics for the cash incentive awards and the performance share program awards is 150%. The revenue metric for the PRSUs is a hurdle that, when met, results only in continued vesting of the PRSUs; results for this metric do not result in an adjustmentindependent directors with respect to the amountChief Executive Officer’s performance. Any circumstance considered relevant by Committee members—or by the independent directors, or in the case of named executive officers other than the PRSUs. Individual performance isCEO, by the CEO—can be a factor in setting base salaries,the determination, including the degree of success, the difficulty of achieving personal performance goals and individualtheir leadership behaviors andbehavior.achievement of personal goals determine 20% of the target amount of any annual cash incentive award to be paid upon completionamounts established for each named executive officer by the Committee, at the beginning of the fiscal year, for all of our named executive officers. In determining base salaries, the Committee reviews a performance assessment for each of our executive officers, as well as compensation recommendations providedtheir actual payout amounts determined by the Chief Executive Officer forCommittee at the other named executive officers.Theend of the year. Because we surpassed the adjusted operating income goal threshold of 70% of target by achieving 102%, the Committee also considers market data and information provided by its independent compensation consultant. In addition, in determiningapproved the payout of awards under the annual incentive plan. Actual payout amounts the Committee considers whether the executive officer has achieved predetermined personal goals applicable to his or her organization,for fiscal 2021 ranged between 111% and the way in which those personal goals were achieved, as demonstrated through leadership behaviors.Personal performance goals and leadership behaviors relate to ethics and integrity, maintaining atop-tier workplace environment, collaboration, customer satisfaction and retention, business development in strategic areas and other leadership, financial and operating goals as appropriate. Personal performance is scored129% of target. Information on a range from 0% to 200% with a threshold of 50%. Performance below threshold with respect to personal goals would result in no payout (0%) related to the portionall of the annual cash incentive based on personal performance.payouts for fiscal 2021 is provided below:Assessing Chief Executive Officer PerformanceIn determining compensation for our Chief Executive Officer, the Committee meets in executive session and evaluates his performance based on his achievement of performance objectives that were established and agreed upon at the beginning
Financial Score
Personal Score 20182022 Proxy Statement | 29 (1) the fiscal year. Formal input is received from the independent directorslong-term incentive awards comprised of PSAs (50%), PRSUs (30%) and senior management.stock options (20%) (except for Mr. Reagan). The Committee also considers the Chief Executive Officer’s general leadership contributions towards the company’s performance, including financial and operating results, development and achievementgrant date fair value of strategic objectives, progress in building capability among the senior management team and corporate governance leadership, as well aseach award was determined based on market data and information provided by the Committee’s independent compensation consultant. The Committee determines the Chief Executive Officer’s compensationconsideration of each executive officer’s level of experience, position and then reviews his evaluation and compensation with the Board’s independent directors. The Lead Director and the Chairresponsibilities. We do not generally consider an executive officer’s current stock holdings or outstanding awards in making annual grants.Committee then presenttargeted total value of long-term incentive awards granted was in the Committee’s evaluation and compensation determinationform of three-year PSAs. Shares are issued under those awards at the end of the three-year performance period (from fiscal 2021 through fiscal 2023 for awards granted in fiscal 2021) only to the Chief Executive Officer.Comparable Market CompensationThe Committee compares the amount of direct compensationextent that we provide to our executive officers to that provided by companies with whom we compete for executive talent in similar roles and with similar responsibilities. To assist with this effort, the Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. ( “FW Cook”), conducts an annual review and benchmarking analysis of each element of target total direct compensation (including salary and cash and equity incentives) provided to our executive officers. In December 2016, FW Cook compared the target compensation provided to members of senior management against that provided by other publicly traded engineering, information technology, consulting and defense companies, which we refer to as our “compensation peer group,” as well as third-party survey data for general industry and the technology industry.Peer group companies are chosen for having a similar industry focus as ours and for competing with us for talent as well as business and stockholder investment. Furthermore, the compensation peer group is initially structured so that no company within the group has annual revenues smaller than 40% or greater than 250% of ours, or a market capitalization smaller than 20% or greater than 500% of ours.Our compensation peer group is periodically reviewed and updated to ensure the companies in our peer group are strong business and talent competitors and are comparable in size. In September 2016, the Committee consulted with FW Cook and reviewed the compensation peer group to be used for setting fiscal 2017 target compensation. The Committee removed Chicago Bridge & Iron, Motorola Solutions, ManTech International, Teradata and Tetra Tech from the peer group and added Booz Allen Hamilton, Cognizant Technology, CSRA, Northrop Grumman and Raytheon, as these companies are considered strong business and talent competitors. At the time the peer group for fiscal 2017 was approved, the company was at the 65th percentile for revenue and the 31st percentile for market capitalization as compared to the new peer group.Our Fiscal 2017 Compensation Peer Groupachieves two specific three-year financial performance goals:u AECOM Technologyu Computer Sciencesu Northrop Grummanu Booz Allen Hamiltonu CSRAu Orbital ATKu CACI Internationalu Harrisu Raytheonu Cerneru Jacobs Engineeringu Rockwell Collinsu CGI Groupu L-3 Communicationsu SAICu Cognizant TechnologyThe Committee considers market data and analysis when evaluating appropriate levels of target total direct compensation. To be competitive in the market for our executive-level talent, we generally will: u target overall compensation for our executive officers atmarket median, althoughaward is tied to the actual cash paidachievement of relative total stockholder return goals, a measurement of growth in stockholder value; and equity incentive awards earned will vary based on actual financial and individual performance and may therefore generate compensation that is higher or lower than the market median; and u award higher levels of compensation, when appropriate, in recognitionimportance or uniquenessaward is tied to achievement of the role of an executive officer or to address retention concerns.revenue goals.20182022 Proxy Statement Compensation Mixchart below depicts each principal element of target compensation as a percentage of total direct compensation for each of our active named executive officers for fiscal 2017. Total direct compensation is comprised of the approved annual rate of base salary andfollowing table sets forth the target annual cashvalue and corresponding number of shares for the long-term incentive for fiscal 2017. It also reflects the grant date fair value of long-term equity grants consisting of stock options, PRSUs, and performance sharesawards granted in fiscal 2017.As indicated above, base salary, which is the only component of “fixed” compensation for our named executive officers, represents a significantly smaller portion of total direct compensation than “variable” or performance-based compensation—representing a range between 13% (for our Chief Executive Officer) and 30%. The allocation of a meaningful portion of compensation to annual cash incentive awards—with target levels ranging from 20% to 24% of total direct compensation—demonstrates our belief that a significant portion of total direct compensation should reflect the actual achievement of predetermined annual company and individual goals. The allocation of a majority of compensation to long-term equity incentives, represented by a mix of performance shares, PRSUs, and stock options—ranging from 46% to 67% of target total direct compensation—reflects our philosophy that the most substantial portion of total compensation should be delivered in the form of equity awards. We do this because we believe that a combination of equity award types, with the ultimate value delivered dependent on attainingpre-established goals or increases in stock price, aligns the interests of our executives with those of our stockholders.The various amounts of compensation provided to our named executive officers for fiscal 2017 are includedin 2021. Details about these grants can be found in the “Grants of Plan-Based Awards” table in the “Executive Compensation” section of this proxy statement.
Shares
Value
Equity Value in thisbelow show the relative total shareholder return and revenue goals at target, and the actual results for the three-year performance period:
Compensation Peer Group Median 0% Less than 50 percentage points below compensation peer group 50% 50 percentage points below compensation peer group 100% At compensation peer group median 7.45% above compensation
peer group median
107% 150% 50 percentage points above compensation peer group (1) (2) caption “Executiveplans are fully vested and will be paid upon retirement or termination or are held in specified date accounts, which pay out in the year specified by the participant, including years prior to termination. These plans are described in more detail under “Nonqualified Deferred Compensation.”DecisionsDiscussion & Analysisu u u u Fiscal 2017our incentive programs, we determine the levels of performance that must be achieved in order to receive a threshold, target and maximum payout amount for each goal. Upon completion of each fiscal year, the Committee approves the payment, if any, of cash incentive awards and the number of performance shares, if any, that are earned based upon the achievement of the predetermined performance goals and criteria for the performance cycles just completed.In approving the base salaries for our named executive officers and other executive officers for For fiscal 2017,2021, the Committee considered its independent consultant’s analysis of paysalary levels for comparable positions in the compensation peer group based on proxy and survey data. Individual base salary amounts also reflect the Committee’s judgment with respect to each executive officer’s level of responsibility, individual performance, experience and other factors, including internal equity considerations, the individual’s historical compensation and any retention concerns.fiscal 2017,2021 the Committee approved increases in the base salaries for fourall of our five active named executive officers in order to bring them closer to the market median. The sizemedian of our company significantlycompensation peer group. —% (1) (2) (3) our acquisition of the Information Systemspre-established financial and Global Solutions business from Lockheed Martin Corporation inpersonal performance goals and other relevant factors.20182022 Proxy Statement | 3127 August 2016 (the “IS&GS Transaction”). The Committee subsequently approved adjustments to our compensation peer group in view of this major change in our company and other industry consolidation involving other companies in the group. As a result, market median based salaries for our reconstituted compensation peer group were higher than previously and base salaries for our active named executive officers were adjusted as follows: $1,000,000 $1,100,000 10 % $100,000 $565,000 $585,000 4 % $20,000 $470,000 $515,000 10 % $45,000 $535,000 $535,000 — — $375,000 $410,000 9 % $35,000 Annual Cash Incentive Awards for Fiscal 2017We provided annual cash incentive awards to executives for performance during fiscal 2017 based on the achievement ofpre-established financial and personal performance goals and other relevant factors. In the first quarter of fiscal 2017, the Committee approved the threshold, target and maximum bonus amounts for each of our active named executive officers at the time, as well as the performance goals, relative weightings and criteria upon which awards would be determined. Following the end of theone-year performance period, the Committee approved the payment of cash incentive awards based upon performance achieved against thepre-established goals and other factors. The Committee did not exercise its discretion to adjust payouts from the formulaically calculated amounts based onpre-established goals.20172021 was designed to incentivize and reward both company financial performance and individual contributions to enterprise goals. The intended purpose and relative weightings of the performance goals are shown below:Goals.Performance Targets.Because our financial results are considered the most important factors in setting pay and are objectively measurable, we weight these metrics most heavily and theyheavily; financial goals represent 80% of the target payouts.opportunity under our annual cash incentive program. To the extent that performance for a financial metric is less than 80% of target (threshold performance) no bonus amount would be paid with respect to that metric. PotentialMaximum payout (150% of target) for each component is provided for performance at or above 125% of target. The Committee generally seeks to set financial performance goals for the annual cash incentive program at levels that reflect improvement over the prior year’s results. For 2021, the Committee established and approved goals that generally targeted improvement over 2020 results. The free cash flow target was temporarily adjusted to reflect the one-time impacts of (a) the deferral of employment tax deposits and payments under the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), (b) the proceeds from a judgment in the VirnetX legal matter, and (c) certain changes in customer billing and advance payments. Targets originally approved for 2021 did not include 1901 Group and Gibbs & Cox acquisitions. The target for total backlog was subsequently adjusted to account for 1901 Group and all targets were adjusted for the Gibbs & Cox acquisition. The target adjustments applied to the NEOs and other employees eligible to participate in the Company’s cash incentive plan. rangesover time. Accordingly, non-formulaic personal goals represent 20% of the target opportunity under our annual cash incentive program, in order to encourage individual efforts in an array of areas that we believe will ultimately lead to improved financial performance for the company.3228 | 20182022 Proxy Statement Personal Goals. We believe that individual contributions towards other enterprise goals are responsibleAnnual Incentive Payout Determination for the achievement of our financial goals over time. Suchnon-formulaic goals represent 20% of any potential payout to encourage individual efforts in an array of management and leadership areas that we believe will ultimately lead to improved financial performance for the company.Fiscal 2021 Performance Targets and Achievement Levels.The Committee established the performance targets for our annual cash incentive program at the beginning of the fiscal year. For our activenamed executive officers, the targeted enterprise financial performance and actual performance for fiscal 20172021 were:(in millions)TargetActualAchievement LevelAdjusted Operating Income(1)$879 million$993 million113.0%Total Backlog$18,190 million$17,476 million 96.0%Average Days Working Capital(2)26 days32 days 75.0%Weighted Financial Performance Achievement Level: 94.5% (1) Operating Incomeoperating income is not a measure of financial performance under generally accepted accounting principles (“GAAP”) in the United States. We believe that Adjusted Operating Incomeadjusted operating income provides useful information to management and stockholders as it provides another measure of the company’s profitability after adjusting for the impact of discrete events. A reconciliation of Adjusted Operation Incomeadjusted operating income to the most comparable GAAP measure is set forth below: (in 559 1,152 Acquisition and Integration Costs$ 102 $ 281 ExpensesCosts $ 37 Amortization of Equity Method InvestmentsAsset Impairment Charges $ 14 993 1,409 (2)Average Days Working Capital measures the efficiency of our use of capital. A score below target is a positive result.Determination of Annual Cash Incentive Awards.Personal Performance Results.Target payout amounts for our active named executive officers for fiscal 2017 ranged between 80% and 145% of base salary rates. Actual payout amounts for fiscal 2017 ranged between 79% and 143% of base salary rates.In evaluating the financial performance for fiscal 2017, the Committee reviewed actual performance results against targeted performance levels. In analyzing personal performance results, the Committee reviewed each individual’s level of achievement and also considered input from the Chief Executive Officer—or the independent directors with respect to the Chief Executive Officer’s compensation.performance. Any circumstance considered relevant by Committee members—or by the independent directors, or in the case of named executive officers other than the CEO, by the CEO—can be a factor in the determination, including the degree of success, the difficulty of achieving personal performance goals and his or hertheir leadership behavior.FollowingTotal Executive Payouts.The chart below provides the target annual cash incentive amounts established for each named executive officer by the Committee, at the beginning of the year, as well as their actual payout amounts determined by the Committee at the end of the year. Because we surpassed the adjusted operating income goal threshold of 70% of target by achieving 102%, the Committee approved the payout of awards under the annual incentive plan. Actual payout amounts for fiscal year, based2021 ranged between 111% and 129% of target. Information on the Committee’s reviewall of the financial results, personal performance, and other relevant factors, the Committee determined the amount of compensation payable under our annual cash incentive programspayouts for each of our active named executive officers.fiscal 2021 is provided below:
Financial Score
Personal Score 20182022 Proxy Statement | 3329 The chart below provides the target annual cash incentive amounts established for each active named executive officer by the Committee, as well as their actual payout amounts. Because we surpassed the adjusted operating income goal threshold of 70% of target by achieving 113%, the Committee approved the payout of awards under the annual incentive plan. Information on all of the annual cash incentive payouts for fiscal 2017 is provided below:
Financial Score
Personal Score $1,600,000 $1,205,820 $366,850 $1,572,670 $555,750 $420,147 $122,265 $542,412 $412,000 $298,329 $86,520 $384,849 $428,000 $338,171 $94,160 $432,331 $328,000 $250,074 $72,160 $322,234 (1) AwardsAward Grants in 2021Annual equityLong-term incentive awards are granted primarily to motivate future performance, create long-term alignment with stockholders, and for retention purposes. For fiscal 2017,2021, each active named executive officer received a mix of equitylong-term incentive awards comprised of performance sharesPSAs (50%), PRSUs (30%) and stock options (20%) and performance restricted stock units (30%)(except for Mr. Reagan). The grant amounts for the named executive officers weredate fair value of each award was determined based on market data and consideration of each executive officer’s level of experience, position and responsibilities. We do not generally consider an executive officer’s current stock holdings or outstanding awards in making annual grants.active named executive officers, 50% of the targeted total value of equitylong-term incentive awards granted was in the form of three-year performance share awards.PSAs. Shares will beare issued under those awards at the end of the three-year performance period from(from fiscal 20172021 through fiscal 20192023 for awards granted in fiscal 2021) only to the extent that the company achieves two specific three-year financial performance goals as measured over such three-year period.goals:Consistent with our prior fiscal year’s awards,u u fiscal 2017, the Committee set twoeach of these goals for the performance shares: 50% of the shares granted will vest based on the achievement of adjusted operating income goals, and 50% of the shares granted will vest based on the achievement of relative total stockholder return goals. Performance will beis measured on a cumulative basis over the total performance period rather than annually for each year of the performance period.We use adjusted operating income as a financial goal because it directly aligns with our growth strategy and we believe it is strongly correlated with potential stockholder value. We use total stockholder return because we believe that this metric is also closely aligned with, and a clear measurement of, growth in stockholder value.34 | 2018 Proxy StatementCompensation Discussion & AnalysisThe target number of shares for PSAs strengthen the fiscal 2017 performance shares was determined by dividingalignment between the target value approved by the Committee by $53.54, the closing sales pricecompensation of our common stock on the NYSE on March 2, 2017, the trading day before the grant date of March 3, 2017. The following table sets forth the target number of shares and corresponding target value for performance share awards granted for fiscal 2017, with the three-year performance period ending on December 27, 2019. Details about payout at threshold and maximum performance can be found in the table following this CD&A entitled “Grants of Plan-Based Awards.” $2,750,000 51,364 $658,125 12,293 $515,000 9,619 $400,000 7,472 $410,000 7,658 Determination of Performance Shares Earned for the 2015—2017 Performance Period. In December 2014, the Committee established the long-term performance goals for the performance share program measuring the35-month period beginning in February 2015 (the performance period was truncated by one month due to our transition to a calendar fiscal year in 2015). The vesting and payout for these performance shares was contingent on the achievement of a relative total stockholder return metric (weighted 50%) and an adjusted operating income goal (weighted 50%), with both metrics measuring cumulative results over the35-month performance period.At its February 2018 meeting, the Committee approved a payout score of 133% for the 2015 through 2017 performance period. The tables below show the modified adjusted operating income goal at target and the actual results for the35-month performance period, as well as the relative total stockholder return goals and results: Below 50% of35-Month Operating Income Plan Target: <$845 $1,959 116% 50% 50% of35-Month Operating Income Plan Target: $845 100% 35-Month Operating Income Plan Target: $1,689 150% 150%35-Month Operating Income Plan Target: $2,534 (1)As contemplated by our performance share award program when it was adopted by the Committee, our adjusted operating income goals were proportionately adjusted upward to account for the IS&GS Transaction. Less than 50 percentage points below peer group 60.93% 150% 50% 50 percentage points below peer group 100% At peer group median 150% 50 percentage points above peer group (1)Our relative TSR score reflects the aggregate change in the20-day average closing price of our stock compared to the median of our peer group, each as measured at the beginning and end of the three-year performance period plus the value returned to stockholders in the form of dividends, assumed to be reinvested on the distribution date on apre-tax basis. Our total stockholder return during the three-year period from 2015 to 2017 was 113.65%, compared to 52.72% for the median of our peer group, for a difference of 60.93% resulting in a payout factor of the maximum of 150%.2018 Proxy Statement | 35Compensation Discussion & AnalysisPRSUs/Restricted Stock Units. Equity awards that vest contingent upon the achievement ofpre-established financial goals help to ensure that a significant portion of an executive’s total annual compensation is aligned with our performance and stockholder interests. Certain of our active named executive officers wereand Company’s performance by linking the ultimate payout to pre-established absolute and relative performance goals. that vest 25% each year on the anniversary of the grant date, but are forfeited if we fail to achieve apre-established performance goal for the first year. The performance goal for fiscal 20172021 was $8.0 billion in revenue. Thisadjusted earnings per share of at least $3.16. The Committee determined that this goal was met and therefore the PRSUs granted in fiscal 2021 will be eligible to vest over four years.years (with such time-vesting to have begun on the date that the PRSU was granted).In addition to the regular annual equity awards in 2017, the CommitteeStock Options. The final 20% of targeted total long-term incentive award value granted to our Chief Executive Officer, Mr. Krone, an additional,one-time award of PRSUs with a grant date fair value of $750,000named executive officers is in recognition of his contributions toward the successful acquisition of the Information Systems and Global Solutions business from Lockheed Martin in 2016. This special grant of PRSUs had the same revenue goal as the annual PRSUs described above but vests 100% on the third anniversary of the grant date.Stock Options.Stock options are an effective means of linking rewards to the creation of stockholder value over a longer term. We believe that stock options motivate our executives to build stockholder value because they may realize value only if our stock appreciates overduring the option term. The options vest 25% each year on the anniversary of the grant date and expire on the seventh anniversary of the grant date.number of option sharesawards vest on the same terms as other PRSUs, PSAs and stock options granted on March 3, 2017 was determined by dividingto Mr. Cage in 2021.options approved byshares for the long-term incentive awards granted to our named executive officers in 2021. Details about these grants can be found in the “Grants of Plan-Based Awards” table in the “Executive Compensation” section of this proxy statement.
Shares
Value
Equity Value by $10.86,established the Black-Scholes-Merton option value determined aslong-term performance goals for the performance share program measuring the three-year performance period covering fiscal years 2019 through 2021. The vesting and payout for these performance shares was contingent on the achievement of a relative total shareholder return metric (weighted 50%) and a revenue goal (weighted 50%), with all metrics measuring cumulative results over the three-year performance period.15, 2017.2022 meeting, the Committee approved a payout score of 104.63% for the 2019 through 2021 performance period. The tables below show the relative total shareholder return and revenue goals at target, and the actual results for the three-year performance period:
Compensation Peer Group Median 0% Less than 50 percentage points below compensation peer group 50% 50 percentage points below compensation peer group 100% At compensation peer group median 7.45% above compensation
peer group median
107% 150% 50 percentage points above compensation peer group (1) (2) employees.employees, subject to certain limits on the amounts that each participant may contribute each year. We make matching contributions to eligible participants’ retirement plan accounts based on a percentage of their “eligible compensation” under applicable rules. We believe that this retirement program permitsassists our executives to savein saving for their retirement in atax-effective manner. We also provide financial advisory services to our executive officers. Mr. Reagan was not eligible to receive financial advisory benefits upon his departure from the Chief Financial Officer role. Ms. Schmanske and Mr. Fasano waived participation in the financial advisory services program.majority of current vested deferred balances under the plans are fully vested and will be paid upon retirement or termination. Beginning on January 1, 2017, all participantstermination or are held in these plans were able to defer to specified date accounts, which pay out in the year specified by the participant, including years prior to termination. These plans are described in more detail under “Nonqualified Deferred Compensation.”PerquisitesHow We Determine Direct CompensationPersonal BenefitsWe generally do not provide perquisites and personal benefitslong-term incentives) to be awarded to our executive officers, that arewe considered the Company’s overall performance, the performance of operating units under the executive officer’s management, individual performance as measured against performance goals and criteria, and competitive market data for our compensation peer group as well as third-party survey data for the general industry and the technology industry. The Committee reviews and approves the amounts of direct compensation to be provided to our executive officers for each fiscal year. Executive officers do not otherwise available to other employees.propose their own compensation.3632 | 20182022 Proxy Statementu u u u u u ourOur Compensation Programs2017,2021, management undertook a risk assessment of our compensation programs, which FW Cook, the Committee’s independent compensation consultant, reviewed. In conducting the assessment, we reviewed our pay practices and incentive programs to identify any potential risks inherent in our compensation programs. We also reviewed the risks facing the company and evaluated whether our compensation practices and programs could be expected to increase or help mitigate these risks. The finding of the assessment, with which the Committee concurred, was that our compensation programs are effectively designed to help mitigate excessive risk-taking that could harm our value or inadvertently reward poor judgment by our executives or other employees. The factors considered in reaching this conclusion include: u short-term u significant u maximum u goals u leadership u our u our20172021 grant dates for new and existing employees, including executive officers, in December 2016.October 2020. These grant dates were selected to occur after the dates when we anticipate releasing our annual and quarterly financial results. We generally grant equity incentive awards to our executive officers and all other eligible employees on an annual basis shortly after we announce our financial results for the recently completed fiscal year. In addition to these annual grants, the Committee set threeour incentive plan definesthe 2017 Omnibus Incentive Plan define as the closing sales price of our common stock on the NYSE on the previous trading day. and Policiesencouragerequire our employeesexecutive officers to own significant amounts of our stock so that they are motivated to maximize our long-term performance and stock value. In 2021, the Committee increased the stock ownership guidelines applicable to the CEO from at least five times his base salary to six times his base salary to further align his interests with those of our stockholders. Under our established stock ownership guidelines, our named executive officers are required to accumulate and maintain stock holdings in an amount of our stock with a value at least equal to five times their base salary. the following amounts:6X of annual cash salary 5X of annual cash salary addition2021, no executive officers were granted an exception to theseour stock ownership guidelines, werequirement. also established policies forapplicable to all designated insiders under our Insider Trading Policy, including all of our directors and executive officers, that prohibit certain short-term or speculative transactions in our securities. We believe that these prohibited transactions carry a greater risk of liability for insider trading violations and may create an appearance of impropriety. For example, withWith respect to our securities, our directors, executive officers and other designated insiders are not permitted to engageprohibited from engaging in any short sales or any trading in puts, calls or other derivatives on an exchange or other organized market. They are also prohibited from engaging in hedging or other monetization transactions such as cashless collars, forward contracts, equity swaps or similar transactions involving our securities, and from holding company securities in a margin account or pledging securities as collateral for a loan. In addition, our executive officers are required to obtainpre-clearance from our General Counsel preclearance for all transactions in our securities.2018 Proxy Statement | 37Compensation Discussion & Analysisincludesapplies to all incentive compensation, including both cash and equity forms of incentive compensation.equity. If the Committee determines that recovery is appropriate, the company will seek repayment of the difference between the incentive compensation paid and the incentive compensation that would have been paid, if any, based on the restated financial results.protect previously earned or granted awards by making them available followingrecognize the executive’s service through the specified event.event, and, in the case of acceleration, the executive’s loss of an opportunity to continue serving the company through the vesting period. Because these termination provisions are contained in our standard award agreements for all recipients and relate to previously granted or earned awards, we do not consider these potential termination benefits as a separate item in compensation decisions for our named executive officers. Our long-term incentive plans do not provide for additional benefits or taxgross-ups. For more information about potential post-employment benefits, see “Executive Compensation—Potential Payments Upon Termination or a Change in Control.”anthe acquisition of our company. These severance benefits are further described in this Proxy Statement under “Executive Compensation—Potential Payments Upon Termination or a Change in Control.”Control”. We believe that our severance plan provides an important benefit to us by helping alleviate any concern that the executive officers might have when contemplating a potential change in control of our company and permitting them to focus their attention on our business. In addition, we believe that this plan is an important recruiting and retention tool, as many of the companies with which we compete for talent have similar arrangements in place for their senior management. areemployees-at-will and as such do not have any employment agreements with us. Mr. Krone’s employment agreement provides that if his employment is terminated by us for reasons other than cause or by Mr. Krone for good reason, he would receive an amount equal to one timestime the sum of his base salary and target bonus. Such payment will be subject to Mr. Krone’s agreement to release us from any claims. However, if such termination is within three months prior to a change in control or within 24 months after a change in control, Mr. Krone would receive an amount equal to a maximum of two and one half times the sum of his base salary and target bonus. In addition, Mr. Krone would be entitled to receivebonus and payment for certain benefits, outplacement services and vesting of all or a portion of his initial equity awards, depending on whether the termination occurs during a change in control period. The Committee approved these severance benefits after considering the potential costs, as an inducement for Mr. Krone to join the company.38 | 2018 Proxy StatementCompensation Discussion & AnalysisPaymentPayments Upon Termination or a Change in Control” in the tables following this CD&A.recently enacted Tax Cuts and Jobs Act of 2017, generally limits the deductibility of certain compensation in excess of $1,000,000$1 million paid in any one year to the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated named executive officers. Prior to the amendment, qualified performance-based compensation was not subject to this deduction limit if certain requirements were met. Under the Tax Cuts and Jobs Act of 2017, the performance-based exception has been repealed with respect to federal income taxes.repealed. The new rules generally apply to taxable years beginning after December 31, 2017, but do not apply to compensation provided pursuant to a written binding contract in effect on November 2, 2017 that is not modified in any material respect after that date. We are continuing to assessdate Under the impactAmerican Rescue Plan Act signed into law on March 11, 2021, the applicability of Section 162(m), will be expanded to also include the Company’s next five highest paid employees for tax years beginning on or after January 1, 2027.amended, ona result of these changes to Section 162(m) to significantly alter our compensation programs.While we will continue to monitor our compensation programs in light of Section 162(m), the The Committee considers it important to retain the flexibility to design compensation programs that are in the best long-term interests of our company and our stockholders. As a result, the Committee may conclude that paying compensation at levels that are not deductible under Section 162(m) is nevertheless in the best interests of our company and our stockholders.Miriam E. JohnNoel B. Williams (Chair)Noel B. Williams201838 | 2022 Proxy Statement | 39 20172021 and, if applicable, the12-month period ended December 30, 2016, the11-month period ended January 1, 2016,fiscal 2020 and the12-month period ended January 30, 2015:fiscal 2019: Name and principal position Fiscal year
ended(1) Salary($)(2) Bonus($)
plan Total($) 12/29/2017 1,076,923 — 5,373,959 1,183,067 1,572,670 15,090 9,221,709 12/30/2016 988,462 — 4,243,439 995,298 1,638,000 19,698 7,884,897 1/1/2016 876,923 — 3,478,358 699,493 1,468,720 12,637 6,536,131 1/30/2015 493,269 1,860,822 2,732,044 396,498 — 57,792 5,540,425 12/29/2017 580,385 — 1,106,646 283,135 542,412 13,442 2,526,020 12/30/2016 561,538 200,000 960,096 254,121 625,964 7,204 2,608,923 1/1/2016 253,846 150,000 1,169,586 278,308 347,079 5,300 2,204,119 12/29/2017 495,577 — 865,948 221,558 384,849 29,485 1,997,417 12/30/2016 162,240 — 1,304,649 251,645 570,200 11,091 2,299,825 12/29/2017 535,000 — 672,633 172,081 432,331 69,114 1,881,159 12/29/2017 394,712 — 689,398 176,391 322,234 18,779 1,601,514 12/29/2017 380,647 — 756,630 193,596 — 2,035,408 3,366,281 12/30/2016 575,000 — 900,254 190,591 534,250 14,496 2,214,591 1/1/2016 530,769 — 857,329 157,385 537,488 7,954 2,090,925 1/30/2015 574,723 — 374,986 152,162 414,401 13,276 1,529,548 12/29/2017 118,643 — — — — 3,212,811 3,331,454 12/30/2016 525,000 175,000 720,072 190,591 420,000 13,752 2,044,415 1/1/2016 484,615 — 669,005 157,385 380,000 12,421 1,703,426 Name and principal position Year(1) Salary($) Bonus($) Stock
awards($)(3) Option
awards($)(4) Non-equity
incentive
plan
compen-
sation($)(5) All other
compen-
sation($)(6) Total($) 2021 1,227,462 — 7,582,531 1,900,370 2,134,278 31,366 12,876,007 (1) officer.officer in accordance with SEC rules.(2) Amounts in this column include a compensationpayout in 2017 for Mr. Maffeo in the amount of $48,916 and for Mr. Leiter in the amount of $68,162. Mr. Maffeo’s and Mr. Leiter’s employment with us ended in July 2017 and January 2017, respectively, and therefore the amount in the “Salary” column reflects a partial year of service in fiscal 2017.time balance.(3) awards, both of which are subject to performance conditions.awards. Values for all performance share awards are computed based upon the probable outcome of the performance conditions as of the grant date of the award. Assuming the highest level of the performance conditions is achieved, the value of the fiscal 20172021 performance shares in the “Stock Awards”awards” column would be as follows: Mr. Krone, $5,745,605;$9,948,516; Mr. Reagan, $1,462,513;Cage, $1,122,751; Mr. Reardon, $1,144,406;Fasano, $1,235,576; Mr. Scholl, $888,940;Howe, $1,162,471; and Ms. Heise, $911,089 and Mr. Maffeo, $999,943. Because Mr. Leiter’s employment with the company ended in January 2017, no stock awards were granted to him.Schmanske, $1,193,694. The awards shown in the “Options“Option awards” column are not subject to performance conditions.For more information regarding our application of FASB ASC Topic 718, including the assumptions used in the calculation of these amounts, please refer to Note 15 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form10-K filed with the SEC on February 23, 2018.(4) (5) Plan BasedPlan-Based Awards” table under the column headed “Estimated future payouts undernon-equity incentive plan awards.”40 | 2018 Proxy StatementExecutive Compensation(5)(6)2017 primarily2021 represent company contributions that we made on behalf of the named executive officers under the Leidos Retirement Plan as follows: Mr. Krone, $13,377,$14,500; Mr. Cage, $14,500; Mr. Reagan, $13,432,$9,900; Mr. Scholl, $5,300,Fasano $14,500; Mr. Maffeo, $13,135Howe, $14,500; and Ms. Schmanske, $14,500. The column also includes the value of executive financial planning and annual health screenings for Mr. Krone, Mr. Cage, Mr. Reagan, and Mr. Leiter, $9,080. Amounts listedHowe. The Company may also make available unused tickets from sponsorship agreements for Mr. Reardon, $29,485,personal use. Tickets are included in sponsorship agreements and Ms. Heise, $18,779typically result in this column for fiscal 2017 represents company contributions that we made on their behalf intono incremental costs to the Leidos, Inc. Retirement Plan for Former IS&GS Employees and Leidos, Inc. Deferred Compensation Plan for Former IS&GS Employees.Company. In addition, for fiscal 2017,2021, there were no incremental costs associated with the amounts include, for Mr. Maffeo $2,022,273 paid in August 2017 and for Mr. Leiter, $3,203,731 paid in March 2017, each amount paid pursuantNEO’s personal use of tickets to severance agreements.(6)Amounts shown in this column for Mr. Scholl includes $63,814 for a gross up for taxes on imputed income relating to relocation benefits.20182022 Proxy Statement | 4139 20172021 pursuant to our 2006 Equity2017 Omnibus Incentive Plan, including any portion of such awards deferred into our Key Executive Stock Deferral Plan and Keystaff Deferral Plan. Estimated future payouts under
non-equity incentive plan
awards(1) Estimated future payouts
under equity incentive plan
awards(2)
option
awards;
number of
securities
underlying
(#)
stock
awards;
number of
shares of
stock or
or base
price of
option
($/share)
fair value of
stock and
option Name Award
type Grant
date Threshold
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Cash 2/16/2017 925,100 1,595,000 2,552,000 — — — — — — — Options 3/3/2017 — — — — — — 101,290 — 53.54 1,183,067 PRSU 3/3/2017 — — — — 14,009 — — — — 750,042 PRSU 3/3/2017 — — — — 30,819 — — — — 1,650,049 PSA 3/3/2017 — — — 25,682 51,364 77,046 — — — 2,973,868 Cash 2/16/2017 322,335 555,750 889,200 — — — — — — — Options 3/3/2017 — — — — — — 24,241 — 53.54 283,135 PRSU 3/3/2017 — — — — 7,376 — — — — 394,911 PSA 3/3/2017 — — — 6,146 12,293 18,439 — — — 711,735 Cash 2/16/2017 238,960 412,000 659,200 — — — — — — — Options 3/3/2017 — — — — — — 18,969 — 53.54 221,558 PRSU 3/3/2017 — — — — 5,772 — — — — 309,033 PSA 3/3/2017 — — — 4,809 9,619 14,428 — — — 556,916 Cash 2/16/2017 248,240 428,000 684,800 — — — — — — — Options 3/3/2017 — — — — — — 14,733 — 53.54 172,081 PRSU 3/3/2017 — — — — 4,483 — — — — 240,020 PSA 3/3/2017 — — — 3,736 7,472 11,208 — — — 432,613 Cash 2/16/2017 190,240 328,000 524,800 — — — — — — — Options 3/3/2017 — — — — — — 15,102 — 53.54 176,391 PRSU 3/3/2017 — — — — 4,595 — — — — 246,016 PSA 3/3/2017 — — — 3,829 7,658 11,487 — — — 443,382 Options 3/3/2017 — — — — — — 16,575 — 53.54 193,596 PRSU 3/3/2017 — — — — 5,043 — — — — 270,002 PSA 3/3/2017 — — — 4,202 8,405 12,607 — — — 486,627 — — — — — — — — — — — — Name Award
type Grant
date Estimated future payouts under
non-equity incentive plan
awards(1) Estimated future payouts
under equity incentive plan
awards(2) All other
option
awards;
number of
securities
underlying
options(3)
(#) All other
stock
awards;
number of
shares of
stock or
units
(#) Exercise
or base
price of
option
awards(4)
($/share) Grant date
fair value of
stock and
option
awards(5)
($) Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Cash 2/18/2021 1,073,580 1,851,000 2,776,500 — — — — — — — Options 3/5/2021 — — — — — — 94,971 — 89.08 1,900,370 PRSU 3/5/2021 — — — — 32,000 — — — — 2,850,560 PSA 3/5/2021 — — — 26,667 53,333 80,000 — — — 4,731,971 Cash 2/18/2021 213,452 368,020 552,030 — — — — — — — Options 3/5/2021 — — — — — — 3,419 — 89.08 68,414 PRSU 3/5/2021 — — — — 1,152 — — — — 102,620 PSA 3/5/2021 — — — 960 1,920 2,880 — — — 170,352 Options 8/6/2021 — — — — — — 7,722 — 94.25 151,618 PRSU 8/6/2021 — — — — 2,413 — — — — 227,425 PSA 8/6/2021 — — — 2,011 4,022 6,033 — — — 358,119 Cash 2/18/2021 193,505 333,630 500,445 — — — — — — — Options 3/5/2021 — — — — — — — — — — PRSU 3/5/2021 — — — — — — — — — — PSA 3/5/2021 — — — — — — — — — — Cash 2/18/2021 307,980 531,000 796,500 — — — — — — — Options 3/5/2021 — — — — — — 11,795 — 89.08 236,018 PRSU 3/5/2021 — — — — 3,974 — — — — 354,004 PSA 3/5/2021 — — — 3,312 6,624 9,936 — — — 587,714 Cash 2/18/2021 294,362 507,520 761,280 — — — — — — — Options 3/5/2021 — — — — — — 11,097 — 89.08 222,051 PRSU 3/5/2021 — — — — 3,739 — — — — 333,070 PSA 3/5/2021 — — — 3,116 6,232 9,348 — — — 552,934 Cash 2/18/2021 297,540 513,000 769,500 — — — — — — — Options 3/5/2021 — — — — — — 11,395 — 89.08 228,014 PRSU 3/5/2021 — — — — 3,840 — — — — 342,067 PSA 3/5/2021 — — — 3,200 6,399 9,599 — — — 567,752 (1) 20172021, were based on achievement ofpre-established goals. The actual payouts for the fiscal 20172021 performance period are provided in the “Summary Compensation Table” in the column headed“Non-equity incentive plan compensation.” Targets shown for Mr. Cage and Mr. Reagan reflect (a) Mr. Cage’s target cash incentive as Controller until July 4, 2021, and as Chief Financial Officer beginning July 5, 2021, and (2) Mr. Reagan’s target cash incentive as Chief Financial Officer until July 4, 2021, and consulting employee beginning July 5, 2021.(2) PRSUs vestaward vests on the first, second, third and fourth anniversaries of grant date, except for the 14,009 PRSUs granted to Mr. Krone on March 3, 2017, 100% of which vest on the third anniversary of the grant date. The PSAs in these columns represent the threshold, target and maximum number of shares issuable under three yearthree-year performance share awards, subject to the Human Resources and Compensation Committee’s discretion to decrease the number of shares that are ultimately issued at the end of the three year performance period. The grant date fair value of these awards is provided in the “Summary Compensation Table” in the column headed “Stock awards.”(3) 2017.2021. All options vest 25% on the first, second, third and fourth anniversaries of grant date.4240 | 20182022 Proxy Statement (4) 2006 Equity2017 Omnibus Incentive Plan defines “fair market value” as the closing sales price of our common stock on the NYSE on the trading day before the grant date, which isand requires the exercise price.price of options issued under the plan to be at least equal to the fair market value.(5) 20182022 Proxy Statement | 4341 2017,2021, including awards previously deferred under our Key Executive Stock Deferral Plan. 7/14/2014 68,201 22,734 27.34 7/13/2021 7/14/2014 4,020 259,571 — — 4/10/2015 69,391 69,393 31.55 4/9/2022 4/10/2015 12,884 831,920 — — 3/4/2016 35,292 105,879 33.82 3/3/2023 4/10/2015 — — 42,946 2,773,023 3/3/2017 — 101,290 53.54 3/2/2024 3/4/2016 23,110 1,492,213 — — — — — — — 3/4/2016 — — 51,355 3,315,992 — — — — — 3/3/2017 — — 14,009 904,561 — — — — — 3/3/2017 — — 30,819 1,989,983 — — — — — 3/3/2017 — — 51,364 3,316,573 9/11/2015 28,702 28,705 31.26 9/10/2022 9/11/2015 4,966 320,655 — — 3/4/2016 9,010 27,034 33.82 3/3/2023 9/11/2015 — — 16,549 1,068,569 3/3/2017 — 24,241 53.54 3/2/2024 3/4/2016 5,902 381,092 — — — — — — — 3/4/2016 — — 13,112 846,642 — — — — — 3/3/2017 — — 7,376 476,268 — — — — — 3/3/2017 — — 12,293 793,759 8/26/2016 — 23,785 39.70 8/25/2023 8/16/2016 33,808 2,182,983 — — 3/3/2017 — 18,969 53.54 3/2/2024 8/26/2016 6,298 406,662 — — — — — — — 3/3/2017 — — 5,772 372,698 — — — — — 3/3/2017 — — 9,619 621,099 9/11/2015 — 35,777 31.26 9/10/2022 9/11/2015 — — 5,911 381,673 3/4/2016 — 18,024 33.82 3/3/2023 3/4/2016 3,934 254,018 — — 3/3/2017 — 14,733 53.54 3/2/2024 3/4/2016 — — 8,742 564,471 — — — — — 3/3/2017 — — 4,483 289,467 — — — — — 3/3/2017 — — 7,472 482,467 8/26/2016 — 23,785 39.70 8/25/2023 8/16/2016 12,174 786,075 — — 3/3/2017 — 15,102 53.54 3/2/2024 8/26/2016 6,298 406,662 — — — — — — — 3/3/2017 — — 4,595 296,699 — — — — — 3/3/2017 — — 7,658 494,477 3/30/2012 72,298 — 25.10 3/29/2019 4/4/2014 1,528 98,663 — — 4/5/2013 65,068 — 25.74 4/4/2020 4/10/2015 2,899 187,188 — — 4/4/2014 24,786 8,263 27.23 4/3/2021 4/10/2015 — — 8,147 526,052 4/10/2015 15,612 15,614 31.55 4/9/2022 3/4/2016 4,426 285,787 — — 3/4/2016 6,757 20,276 33.82 3/3/2023 3/4/2016 — — 5,053 326,272 3/3/2017 — 16,575 53.54 3/2/2024 3/3/2017 — — 5,043 325,627 — — — — — 3/3/2017 — — 1,517 97,953 — — — — — 4/10/2015 — — 6,549 422,869 — — — — — 3/4/2016 — — 3,468 223,929
vested ($)(3) 4/10/2015 138,784 — 31.55 4/9/2022 3/2/2018 7,646 679,729 — — 3/4/2016 141,171 — 33.82 3/3/2023 3/8/2019 16,820 1,495,298 — — 3/3/2017 101,290 — 53.54 3/2/2024 3/8/2019 — — 56,063 4,984,001 3/2/2018 69,345 23,116 63.76 3/1/2025 3/6/2020 17,012 1,512,367 — — 3/8/2019 61,457 61,458 62.43 3/7/2026 3/6/2020 — — 39,510 3,512,439 3/6/2020 20,813 62,439 107.57 3/5/2027 3/5/2021 — — 32,000 2,844,800 3/5/2021 — 94,971 89.08 3/4/2028 3/5/2021 — — 53,333 4,741,304 4/10/2015 6,056 — 31.55 4/9/2022 3/2/2018 200 17,780 — — 3/4/2016 4,266 — 33.82 3/3/2023 3/8/2019 456 40,538 — — 3/3/2017 2,774 — 53.54 3/2/2024 3/8/2019 — — 1,520 135,128 3/2/2018 1,814 605 63.76 3/1/2025 8/9/2019 1,192 105,969 — — 3/8/2019 1,666 1,667 62.43 3/7/2026 3/6/2020 678 60,274 — — 3/6/2020 793 2,380 107.57 3/5/2027 3/6/2020 — — 1,506 133,883 3/5/2021 — 3,419 89.08 3/4/2028 3/5/2021 — — 1,152 102,413 8/6/2021 — 7,722 94.25 8/5/2028 3/5/2021 — — 1,920 170,688 — — — — — 8/6/2021 — — 2,413 214,516 — — — — — 8/6/2021 — — 4,022 357,556 3/2/2018 — 4,921 63.76 3/1/2025 3/2/2018 1,561 138,773 — — 3/8/2019 — 14,048 62.43 3/7/2026 3/8/2019 3,687 327,774 — — 3/6/2020 4,444 13,333 107.57 3/5/2027 3/8/2019 — — 12,815 1,139,254 — — — — — 3/6/2020 3,642 323,774 — — — — — — — 3/6/2020 — — 8,437 750,049 3/2/2018 — 2,534 63.76 3/1/2025 3/2/2018 839 74,587 — — 3/8/2019 — 9,219 62.43 3/7/2026 3/8/2019 2,523 224,295 — — 3/6/2020 2,742 8,228 107.57 3/5/2027 3/8/2019 — — 8,410 747,649 3/5/2021 — 11,795 89.08 3/4/2028 3/6/2020 2,343 208,293 — — — — — — — 3/6/2020 — — 5,206 462,813 — — — — — 3/5/2021 — — 3,974 353,289 — — — — — 3/5/2021 — — 6,624 588,874 8/11/2017 6,862 — 56.47 8/10/2024 3/2/2018 970 86,233 — — 3/2/2018 9,201 3,068 63.76 3/1/2025 3/8/2019 2,373 210,960 — — 3/8/2019 9,065 9,065 62.43 3/7/2026 3/8/2019 — — 8,270 735,203 3/6/2020 2,613 7,842 107.57 3/5/2027 3/6/2020 2,136 189,890 — — 3/5/2021 — 11,097 89.08 3/4/2028 3/6/2020 — — 4,962 441,122 — — — — — 3/5/2021 — — 3,739 332,397 — — — — — 3/5/2021 — — 6,232 554,025 8/26/2016 11,893 — 39.70 8/25/2023 3/2/2018 249 22,136 — — 3/3/2017 3,898 — 53.54 3/2/2024 3/8/2019 2,403 213,627 — — 3/2/2018 2,259 753 63.76 3/1/2025 3/8/2019 — — 8,009 712,000 3/8/2019 8,780 8,780 62.43 3/7/2026 3/6/2020 2,259 200,825 — — 3/6/2020 2,644 7,934 107.57 3/5/2027 3/6/2020 — — 5,020 446,278 3/5/2021 — 11,395 89.08 3/4/2028 3/5/2021 — — 3,840 341,376 — — — — — 3/5/2021 — — 6,399 568,871 (1) 2017.2021. Options granted prior to 2014 vested according to the following schedule: 20% of the options vest on the first, second and third anniversaries of the grant date, with the remaining 40% vesting on the fourth anniversary of the grant date. Options granted in 2014 and thereafter vest 25% on the first, second, third and fourth44 | 2018 Proxy StatementExecutive CompensationtheMs. Schmanske’s award of 11,893 options granted to Mr. Reardon and Ms. Heise inon August 26, 2016, which vest 100%vested in full on the third anniversary of the grant date.(2) includesrelates to restricted stock units held by our named executive officers at the end of fiscal 2017,2021, including restricted stock units subject to a performance conditionconditions which hashave been met. RestrictedPerformance restricted stock units vest 25% on the first, second, third and fourth anniversaries of the grant date, in each case if the applicable performance condition is met, except for restricted stock units granted to Mr. Krone on March 3, 2017 in the amount of 14,009, which vest 100% on the third anniversary of the grant date, and restricted stock units granted to Mr. Reardon and Ms. Heise on August 16, 2016, which vest on January 28, 2019, and on August 28, 2016, which vest 100% on the third year anniversary of the grant date. Performance share awards vest 100% at the end of the three year fiscal performance cycle to the extent earned based on achievement of the applicable performance conditions, subject to the Compensation Committee’s discretion to decrease the number of shares that are ultimately issued at the end of the three year performance period.met.(3) $64.57,$88.90, the closing sales price of our common stock on the NYSE on December 29, 2017.31, 2021.(4) 2015, 20162019, 2020 and 2017,2021 and the target shares for the three year performance period related to adjusted operating income and total stockholder return, and the performance restricted stock units granted in fiscal 2017.2021. Performance share awards fully vest at the end of the three-year fiscal performance period based on achievement of the applicable performance conditions, subject to the Committee’s negative discretion.20172021 upon the exercise of stock options and the vesting of restricted stock awards or restricted stock units, and restricted stock units issued as dividend equivalents, including awards deferred into our Key Executive Stock Deferral Plan. Option Awards Stock Awards Name — — 52,515 2,724,372 — — 4,448 247,302 — — — — — — 1,311 70,388 — — — — 12,419 272,437 23,168 1,190,560 21,337 405,941 — — Option Awards Stock Awards Name 90,935 6,119,344 87,423 9,082,236 — — 2,396 248,979 146,502 8,248,592 17,151 1,721,161 20,102 848,667 10,296 1,067,607 — — 11,671 1,209,480 — — 4,407 442,404 (1) exercise or vesting.exercise.(2) 2017.2021. Any stock awards that vested in the current year and were deferred by our named executive officers are reflected in the table under the caption “Nonqualified Deferred Compensation” below.Compensation.”(3) 20172021 under the following nonqualified deferred compensation plans, which are summarized below:ratherother than the Leidos Stock Funds. Distributions under the Keystaff Deferral Plan are then made to participants in cash. Deferred balances under this plan will be paid upon the elected specified date, retirement or separation from service.2018 Proxy Statement | 45Executive Compensationcorrespondinallowsallowed eligible participants to defer salary and receive certain company contributions. Salary deferrals in this plan dodid not start until after an eligible participant has met the annual IRS contribution limit for the Leidos Retirement Plan for Former IS&GS Employees. Bonuses arewere not eligible for deferral to this plan. The investment options in the Deferred Compensation Plan are similar to those in the Leidos Retirement Plan but do not include the Leidos Stock Funds. Deferred balances under this plan will generally be paid following separation from service.20172021 through our nonqualified deferred compensation plans in which our named executive officers participate:
contributions ($) 310,315 — 47,791 — 358,106 — — 27,668 — 125,757 116,077 — 57,374 — 421,210 437,371 — 278,080 — 1,205,205 — — 119,300 — 16,402 82,923 19,142 13,595 — 156,136 — — — — — — 6,623 58 — 6,681 396,680 — 13,508 — 1,479,832 190,516 — 463,362 — 1,809,260 — — 154,151 — 575,852 — — — — — Name Plan Registrant
Contributions ($)
end ($)(3) 909,227 — 642,353 — 4,589,202 1,326,124 — (1,645,546 ) — 11,532,305 — — 14,384 — 196,379 — — 46,665 — 406,678 — — (331,215 ) — 2,003,674 — — 9,581 — 62,710 594,357 — 367,816 — 3,637,741 1,448,425 — (1,194,352 ) (555,122 ) 7,799,516 — — 15,028 — 168,393 — — 4,466 — 43,715 193,364 — 226,875 — 1,310,078 309,538 — (67,690 ) — 755,242 — — 349 — 3,908 (1) 2017.2021. These amounts are also included as compensation in the applicable column in the “Summary Compensation Table” for prior years. The following amounts shown were included in the Option Exercises and Stock Vested and were deferred into the Key Executive Stock Deferral Plan: Mr. Krone $1,326,124, Mr. Reagan $1,448,425 and Mr. Howe $309,538.(2) for Former IS&GS Employees, amounts in this column represent aggregate returns on the diverse investment options available to eligible participants based on individual participant investment elections. With respect to the Key Executive Stock Deferral Plan, amounts in this column represent the aggregate increases or decreases in the value of stock units corresponding to shares of our common stock during fiscal 2017.2021. The market value of the shares is based upon $64.57,$88.90, the closing sales price of our common stock on the NYSE on December 29, 2017.31, 2021.(3) 2017.2021. With respect to the Key Executive Stock Deferral Plan, the amounts represent the value of stock units corresponding to shares of common4644 | 20182022 Proxy Statement $64.57$88.90 per share, the closing sales price of our common stock on the NYSE on December 29, 2017.31, 2021. All amounts in this column were reported as compensation in the “Summary Compensation Table” for prior years. Our named executive officers held the following number of stock units at the end of fiscal 20172021 in the Key Executive Stock Deferral Plan: (a) Mr. Reagan, 18,665 andKrone, 129,722 (b) Mr. Maffeo, 28,020.Cage, 22,539 (c) Mr. Reagan, 87,734 and (d) Mr. Howe, 8,495.uponUpon Termination or a Change in Controlwould provideprovides severance benefits to him if his employment is terminated by us for reasons other than for cause, or by Mr. Krone for good reason. However, if such termination is within three months prior to or within 24 months after a change in control of the company (the “change in control period”), Mr. Krone would receive a higher level of benefits. In addition, Mr. Krone would be entitled to receive certain benefits and outplacement services in the event of a qualifying termination under his employment agreement. Severance benefits under this agreement in connection with a change in control, or CIC, are “double trigger” and any payments under this agreement are subject to the recipient’s execution of a general release in favor of the company and its affiliates, as well as compliance with a perpetual confidentiality obligation, a nondisparagement obligation, a covenant not to compete and a covenant not to solicit our customers or employees for 12 months following termination of employment. Finally, pursuant to the terms of the equity awards Mr. Krone received under the Leidos 2006 Equity Incentive Plan and 2017 Omnibus Incentive Plan (“Equity Plan”Plans”), and the special provisions in his employment agreement applicable to Mr. Krone’s July 2014 grants upon hire, if Mr. Krone is terminated by us for reasons other than for cause, by him for good reason, or by reason of his death or disability, he would be entitled to accelerated vesting, orpro-rated vesting, of his long-term incentive awards, depending on whether the termination is during a change in control period. The chart below provides the amounts that Mr. Krone would be entitled to under these various termination scenarios. With respect to the “With Change in Control” scenarios, because the IS&GS Transaction was considered a change in control (“CIC”) with respect to Mr. Krone’s employment agreement, but was not a CIC as defined in the Equity Plan or our Deferred Compensation programs, we have provided amounts under two hypothetical scenarios below. The first, in the column entitled “IS&GS Transaction,” provides amounts under Mr. Krone’s agreement only. The second, in the column entitled “New Change in Control,” assumes a change in control scenario where the definition of CIC in both the Equity and Deferred Compensation Plans has been triggered as well as the definition in Mr. Krone’s agreement.Post-employment Payments — Mr. Krone
Termination
Cause/ for
Good
Reason(1)
Change in
Control(3) — — $2,700,000 $6,750,000 $6,750,000 — — — — 1,539,366 1,539,366 1,539,366 1,539,366 1,539,366 — — 990,963 990,963 6,182,201 6,182,201 6,182,201 — — 1,076,691 1,076,691 7,511,191 7,511,191 7,511,191 — — 9,083,999 9,083,999 8,971,504 8,971,504 9,083,999 — — 13,940 122,134 122,134 — — — — 15,000 15,000 15,000 — — — — — — — — — Total(12) — — $15,419,959 $19,578,153 $31,091,396 $24,204,262 $24,316,757 (1)Amounts in this column represent the benefits Mr. Krone would be entitled to receive in the event he experiences a hypothetical qualifying termination that does not constitute a CIC under the terms of his employment agreement or the Leidos Equity and Deferred Compensation Plans. However, since the IS&GS Transaction constituted a CIC under the2018 Proxy Statement | 47Executive Compensationterms of Mr. Krone’s agreement, until August 16, 2018, if Mr. Krone experiences a qualifying termination that is not in connection with CIC of Leidos, Mr. Krone will be entitled to receive the enhanced compensation and benefits reflected for the “IS&GS Transaction” and not the benefits detailed in this column.(2)Since the IS&GS Transaction constituted a CIC for purposes of Mr. Krone’s employment agreement but not for purposes of the Leidos Equity and Deferred Compensation Plans, the benefits reflected in this column represent the compensation and benefits Mr. Krone would be entitled to receive on a qualifying termination until August 16, 2018.(3)Amounts in this column represent the benefits Mr. Krone would be entitled to in the event a new transaction had occurred on December 29, 2017 that constituted a CIC under the terms of his employment agreement and the Leidos Equity and Deferred Compensation Plans.(4)Amounts in this row represent single lump sum payments equal to (a) one times (in the event of termination without a CIC) and(b) two-and-one-half times (in the event of termination in connection with a CIC) the sum of Mr. Krone’s year end salary and bonus at target.(5)Reflects Mr. Krone’s bonus based on actual performance for the period ended December 29, 2017.(6)For a termination without a CIC and upon a qualifying termination occurring within 24 months following the IS&GS Transaction, the values represent the accelerated vesting of Mr. Krone’s July 2014 RSUs, granted upon his commencement of employment and apro-rated amount of his March 2017 RSUs, based on the number of days elapsed between the grant date and December 29, 2017, including accrued cash dividends as of December 29, 2017. For a termination in connection with a new CIC, or death or disability, the amounts represent the value of accelerated vesting of shares of all RSUs, including accrued dividends as of December 29, 2017 pursuant the 2006 Equity Incentive Plan. For more information regarding the number of shares of unvested stock units held by Mr. Krone, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(7)For a termination without a CIC and upon a qualifying termination occurring within 24 months following the IS&GS Transaction, the values represent the accelerated vesting of Mr. Krone’s unvested options to purchase shares of common stock granted in July 2014 upon his commencement of employment, plus apro-rata portion of stock options granted in 2017 based on the number of days elapsed between the grant date and December 29, 2017. For a termination with a CIC, or upon death or disability, the amounts represent the value of accelerated vesting of all unvested options held by Mr. Krone at the end of the year issued pursuant to the 2006 Equity Incentive Plan. For more information regarding the number of shares and exercise prices underlying unvested options held, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(8)Amounts represent the value of Mr. Krone’s April 2015 performance share grant earned based on actual performance, and apro-rata amount of his 2016 and 2017 performance share awards, including accrued cash dividends as of December 29, 2017. In thenon-CIC termination, IS&GS CIC, and disability scenarios, the 2016 and 2017 grants assumes performance at 115.52% and 110.05% of target levels respectively. In the CIC and death scenarios, the 2016 and 2017 grants assume target payout levels.(9)In event of Mr. Krone’s termination without a CIC, he would be entitled to a lump sum payment equal to the product of 12 times his monthly COBRA premiums for health, dental and vision coverage. Upon a termination in connection with a CIC, he would be entitled to a lump sum payment in lieu of continued life, disability, medical, dental and vision coverage for 30 months.(10)Represents the estimated value of outplacement counseling services to be provided for 12 months following termination.(11)Estimates the severance benefits to be reduced to avoid excise taxes which may be payable pursuant to Section 280G of the Internal Revenue Code.(12)Amounts in this row represent the gross amount of benefits to be received by Mr. Krone. In addition he would receive any unused comprehensive leave time he had accrued.Reardon,Fasano, Mr. SchollHowe, and Ms. HeiseSchmanskeJanuary 1, 2017July 25, 2019 (the “Severance Plan”). In addition, Mr. Reaganu u u u u u u Mr. Scholl continueany payments under this plan are subject to be covered under the individual severance protection agreement or “SPA” eachrecipient’s execution of them entered into witha general release in favor of the company and its affiliates, as well as compliance with respecta perpetual confidentiality obligation, a nondisparagement obligation, a covenant not to anycompete and a covenant not to solicit our customers or employees for (i) 12 months following termination of employment in the case of a qualifying termination of employment in the absence of a CIC and (ii) 18 months following termination of employment in the case of a qualifying termination of employment in connection with a CIC.482022 Proxy Statement | 2018 Proxy Statement45 involuntary termination of employment without cause occurring within the 24 month period following the IS&GS Transaction. This change in control period expires on August 16, 2018.The SPA was designed to be renewed annually for successiveone-year terms by the Committee, unless either the Committee or the executive officer decided not to renew the term. In September 2016, the Committee decided not to renew the SPA, and in December 2016 it established the Severance Plan effective January 1, 2017. The Severance Plan replaces the individual SPAs we had entered into with Mr. Reagan and Mr. Scholl previously and would provide severance benefits in the case of a change of control occurring after January 1, 2017 (a “new” change in control).Key differences between the SPAs and the Severance Plan are summarized below:uA decrease in the amount of the cash lump sum severance benefit calculation from 2.5 times base salary plus target bonus to 1.5 times base salary plus target bonus; anduThe medical benefit is the cash value of premiums for 18 months, rather than actual continued coverage in Leidos plans at company expense for 30 months.The Severance Plan also covers Mr. Reardon and Ms. Heise as well as Mr. Reagan and Mr. Scholl. Mr. Reardon and Ms. Heise were previously eligible for severance benefits under the Leidos Innovations Corporation Executive Severance Plan. Mr. Reardon and Ms. Heise became eligible for benefits under the Severance Plan on August 16, 2017, after the expiration of theone-year extension of coverage period specified by the employee matters agreement entered into in connection with the IS&GS Transaction. The Severance Plan is designed to provide severance benefits to executive officers in certain cases where they terminate involuntarily from employment not for cause, with a separate set of benefits where the qualifying termination occurs within three months prior to or within 24 months following a CIC.Plans.Plans and subject to the recipient’s execution of a general release in favor of the company and its affiliates, as well as compliance with a covenant not to compete and a covenant not to solicit employees or customers for 12 months after termination of employment. Finally, pursuant to the terms of the equity awards they received under the Equity Plan, if they terminated employment involuntarily not for cause, or by reason of their death or disability, they would be entitled to accelerated vesting, orpro-rated vesting, of certain long-term incentive awards. The charts below provide the amounts that these named executive officers would be entitled to under various termination scenarios. With respect to the “With Change in Control” scenarios, because the IS&GS Transaction occurred while Mr. Reagan and Mr. Scholl were each covered by an SPA and the IS&GS Transaction was considered a CIC under the SPA, but was not a CIC as defined in the Equity or Deferred Compensation Plans, we have provided benefits under two hypothetical scenarios below. The first, in the column entitled “IS&GS Transaction,” provides amounts for Mr. Reagan and Mr. Scholl under the SPA only. The second, in the column entitled “New Change in Control”, shows the amounts that all four executive officers would receive under a scenario where the definition of CIC in the Severance Plan effective January 1, 2017 is met, as well as the definition in both the Equity and Deferred Compensation Plans. Involuntary Termination/Good Reason Retirement Without
Cause or for Good
Reason ($)(1) Change in
Control ($)(2) Death ($) Disability ($) 2,134,278 5,219,278 9,846,778 2,134,278 2,134,278 6,733,555 6,733,555 6,733,555 6,733,555 6,733,555 2,207,930 2,207,930 2,207,930 2,207,930 2,207,930 8,861,953 8,861,953 13,891,281 13,650,194 8,861,953 — 34,488 226,831 — — N/A N/A — N/A N/A 19,937,716 23,057,204 32,906,375 24,725,957 19,937,716 — 1,025,278 2,200,000 475,278 475,278 — 159,577 553,744 553,744 553,744 — 30,775 59,335 59,335 59,335 — 274,928 819,734 813,197 375,600 — 28,869 47,054 — — N/A N/A (33,518 ) N/A N/A — 1,519,427 3,646,349 1,901,554 1,463,957 — 1,216,580 2,212,500 626,580 626,580 — 295,011 887,284 887,284 887,284 — 152,914 307,732 307,732 307,732 — 1,257,135 1,893,457 1,857,291 1,257,135 — 36,459 58,439 — — N/A N/A — N/A N/A — 2,958,099 5,359,412 3,678,887 3,078,731 201846 | 2022 Proxy Statement | 49 Post-employment Payments — Mr. Reagan Involuntary Termination/ Good Reason Without Change in Control With Change in Control Voluntary
Termination For Cause Without
Cause/ for
Good
Reason(1) New Change
in Control (3) Death Disability — — $585,000 $2,851,875 $2,851,875 — — — — 536,365 555,750 555,750 555,750 555,750 — — 98,146 98,146 1,362,447 1,362,447 1,362,447 55,095 55,095 2,054,815 2,054,815 2,054,815 — — 2,899,447 2,899,447 2,872,523 2,872,523 2,899,447 — — 13,940 117,464 117,464 — — — — 7,500 15,000 15,000 — — — — — — — — — — — $4,195,493 $6,592,777 $9,829,874 $6,845,535 $6,872,459 Involuntary Termination/Good Reason Retirement Without
Cause or for Good
Reason ($)(1) Change in
Control ($)(2) Death ($) Disability ($) 590,267 1,224,667 2,220,400 590,267 590,267 845,491 845,491 845,491 845,491 845,491 317,080 317,080 317,080 317,080 317,080 1,220,836 1,220,836 1,822,075 1,786,511 1,220,836 — 14,909 26,114 — — N/A N/A — N/A N/A 2,973,674 3,622,983 5,231,160 3,539,349 2,973,674 — 1,138,231 2,137,500 568,231 568,231 — 239,533 800,714 800,714 800,714 — 110,868 251,337 251,337 251,337 — 1,202,811 1,817,078 1,782,640 1,202,811 — 14,665 25,747 — — N/A N/A (110,928 ) N/A N/A — 2,706,108 4,921,448 3,402,922 2,823,093 (1) Mr. Reaganthe named executive officers would be entitled to receive in the event he experiencesof a hypothetical qualifying termination that does not constitute a CIC under the terms of Leidos Executive Severance Plan or the Leidos Equity and Deferred Compensation Plans. However, since the IS&GS Transaction constituted a CIC under the terms of Mr. Reagan’s SPA, until August 16, 2018, if Mr. Reagan experiences a qualifying termination that is not in connection with CIC of Leidos, Mr. Reagan will be entitled to receive the enhanced compensation and benefits reflected for the “IS&GS Transaction” and not the benefits detailed in this column.(2)Since the IS&GS Transaction constituted a CIC for purposes of Mr. Reagan’s SPA, but not for purposesunder the terms of the Leidos Equity and Deferred Compensation Plans, in addition to the benefits reflected in this column represent the compensation and benefitsunder an employment agreement (for Mr. Reagan would be entitled to receive under the terms of a qualifying termination under his SPA until August 16, 2018.Krone) or Leidos Executive Severance Plan (for named executive officers other than Mr. Krone).(3)(2)Mr. Reaganthe named executive officers would be entitled to receive in the event of a newhypothetical qualifying termination following a transaction hadthat occurred on December 29, 201731, 2021, that constituted a CIC under the terms of the Leidos Equity and Deferred Compensation Plans, in addition to the benefits under his SPA.an employment agreement (for Mr. Krone) or Leidos Executive Severance Plan (for named executive officers other than Mr. Krone).(4)(3)shownin this row represent cash payments for (a) lump sum severance and (b) pro-rated annual bonuses for the year of termination. Severance amounts for Mr. Krone are equal to one time (in the event of termination Without Cause, or for Good Reason, both notwithout a CIC), and 2.5 times (in the event of termination in connection with a CIC,CIC), the sum of Mr. Krone’s year end salary and bonus at target. Severance amounts for other executives reflect a single lump sum payment equal to one year of annual base salary. Amounts in the CIC scenarios representsalary (for termination without a single lump sum payment equal totwo-and-one-halfCIC), and 1.5 times the sum of Mr. Reagan’s (a) year endannual base salary and (b) target bonus. This amount ofbonus (for termination in connection with a CIC). Mr. Krone’s pro-rated annual bonus would be payable based on actual performance for the bonus calculated under subsection (b) is referred to asperiod ended December 31, 2021, in all scenarios. For the “Bonus Amount.”(5)Amounts shownother executives, for the termination without a CIC, reflect Mr. Reagan’sand death and disability scenarios, the bonus would be based on actual performance through December 29, 2017. In all other scenarios, the amounts reflect apro-rata portion of the Bonus Amount to which Mr. Reagan would be entitled to based on31, 2021, and the number of days that elapsed during the performance period ended December 29, 2017.31, 2021. In the CIC scenario, the bonus amount is based on target performance results.(6)(4)2017 award2018), pro-rated based on the number of days elapsed between the grant date and December 29, 2017.31, 2021, including accrued cash dividends as of December 31, 2021. For terminations in connection with a new change in control and theCIC, death, and disability, scenarios, amounts represent the value of accelerated vesting of shares of all RSUs, including accrued dividends as of December 29, 2017,31, 2021, pursuant to the 2006Leidos Equity Incentive Plan.and Deferred Compensation Plans. The retirement and non-termination scenarios for Messrs. Krone and Howe, assume their respective terminations would each qualify as a special retirement and amounts include the awards that would continue to vest. For more information regarding the number of shares of unvested stock unitsRSUs held by Mr. Reagan,the executive officers, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”502022 Proxy Statement | 2018 Proxy Statement47 (7)(5)changeCIC, reflects pro-rated amounts of stock options granted beginning in control, the value reflects a portion of the March 2017 awardpro-rated2018 that would vest based on the number of days elapsed between the grant date and December 29, 2017.31, 2021. The retirement and non-termination scenarios for Messrs. Krone and Howe assume their respective terminations would each qualify as a special retirement and amounts include the awards that would continue to vest after departure. For a termination in connection with a change in control,CIC, or upon death andor disability, amounts representrepresents the value of accelerated vesting of all unvested options held by Mr. Reaganthe named executive officer at the end of the year issued pursuant to the 2006Leidos Equity Incentive Plan.Plans. For more information regarding the number of shares and exercise prices underlying unvested options held see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(8)(6)Amountsthe value of Mr. Reagan’s September 2015 performance share grant earned based on actual performance and apro-rata amount of his 2016 and 2017 performance share awards, including accrued cash dividends, based on actual performance as of December 29, 2017. In the31, 2021. Since Messrs. Krone and Howe qualify for special retirement, each would be entitled to associated non-CICpro-rated termination, IS&GS CIC and disability scenarios, the 2016 and 2017 grants assume performance at 115.52% and 110.05% of target levels respectively.vesting (including accrued dividends) that would apply as a result. In the CIC and death scenarios, awards reflect full vesting, including accrued cash dividends, as of December 31, 2021; assumes target performance results for death and also in the 2016event of a CIC for the 2020 and 2017 grants assume target payout levels.2021 awards; the 2019 awards are assumed paid based on actual performance results as of December 31, 2021, in the event of a CIC.(9)(7)Amountwithout Cause orof employment. Benefit lump sums for Good Reason,all named executive officers other than Mr. Krone are equal to 12 months of COBRA premiums for medical, dental and vision coverage for terminations not in connection with a CIC, reflects the estimated valueand 18 months of COBRA benefits to be receivedpremiums for terminations in connection with a CIC. Mr. Krone’s amounts reflect 12 months following termination. Other amounts represent the estimated value of life insurance, disability,COBRA premiums for medical, dental and vision and hospitalization benefits to be received for 30 monthscoverage following termination.(10)Represents the estimated value of outplacement counseling services to be provided for 6 months followinga termination if not in connection with a CIC. If termination isCIC and lump sum payments in lieu of continued life, disability, medical, dental and vision coverage for 30 months for terminations in connection with a CIC, Mr. Reagan is entitled toCIC. Amounts also include estimates for providing outplacement counseling services for 12 months following termination.(11)Estimates the severance protection benefits to be reduced to avoid excise taxes which may be payable pursuant to Section 280Gtermination of the Internal Revenue Code.(12)Amountsemployment in this row represent the gross amount of benefits to be received, without reflecting any federal and/or state income taxes or golden parachute excise taxes payableconnection with respect to such amounts. In addition to the amounts set forth in the row, Mr. Reagan would also be entitled to be paid for any unused comprehensive leave time he had accrued.Post-employment Payments—Mr. Reardon Involuntary Termination/ Good Reason Without Change in Control With Change in Control Voluntary
Termination For Cause Without
Cause/for Good
Reason(1) New Change
in Control(2) Death Disability — — $515,000 $1,390,500 — — — — 379,419 412,000 379,419 379,419 — — 2,340,724 3,060,879 3,060,879 3,060,879 — — 43,116 800,761 800,761 800,761 — — 230,793 209,726 209,726 230,793 — — 21,774 33,750 — — — — 7,500 15,000 — — — — — — — — — — $3,538,326 $5,922,616 $4,450,785 $4,471,852 2018 Proxy Statement | 51Executive Compensation(1)Amounts in this column represent the benefits Mr. Reardon would be entitled to in the event of a qualifying termination on December 29, 2017 under the Leidos Executive Severance Plan and the Leidos Equity and Deferred Compensation Plans.(2)Amounts in this column represent the benefits Mr. Reardon would be entitled to in the event a new transaction had occurred on December 29, 2017 that constituted a CIC underor, except for Mr. Krone, for 6 months if the terms of the Leidos Equity and Deferred Compensation Plans and the Leidos Executive Severance Plan.(3)Amount shown for termination without Cause or for Good Reason,is not in connection with a CIC reflects a lump sum severance payment equal to one year of annual base salary. For a termination in connection with a CIC, the value reflects 1.5 times the sum of annual base salary and target bonus.(4)Amounts shown for termination without a CIC and death and disability reflect apro-rated bonus based on actual performance through December 29, 2017 and the number of days that elapsed during the performance period ended December 29, 2017. In the CIC scenario, the amount is based on target performance results.(5)For termination not in connection with a CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the grant date and December 29, 2017. It also includes Mr. Reardon’s RSUs granted on August 16, 2016 which continue to vest upon an involuntary termination absent a CIC. For terminations in connection with a new CIC, death and disability, amounts represent the value of accelerated vesting of shares of all RSUs, including accrued dividends as of December 29, 2017 pursuant the 2006 Equity Incentive Plan. For more information regarding the number of shares of unvested stock units held by Mr. Reardon, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(6)For termination not in connection with a CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the grant date and December 29, 2017. For terminations with a CIC, death and disability, amounts represent the value of accelerated vesting of all unvested options held by Ms. Reardon at the end of the year issued pursuant to the 2006 Equity Incentive Equity Incentive Plan. For more information regarding the number of shares and exercise prices underlying unvested options held see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(7)Amounts represent apro-rata amount of Mr. Reardon’s 2017 performance share awards, including accrued dividends as of December 29, 2017. In thenon-CIC termination and disability scenarios, the value assumes performance at 110.05% of target levels. In the CIC and death scenarios, the values assume target payout levels.(8) Amounts reflect the estimated value of COBRA benefits to be received for 12 months following termination without Cause or for Good Reason not in connection with a CIC and, in connection with a CIC, for 18 months.(9)Represents the estimated value of outplacement counseling services to be provided for 6 months following termination if not in connection with a CIC. If termination is in connection with a CIC, Mr. Reardon is entitled to outplacement counseling services for 12 months following termination.(10)Estimates the Executive Severance Plan benefits to be reduced to avoid the payment of excess parachute payments pursuant to Section 280G of the Internal Revenue Code.(11)(9)without reflecting any federal and/or state income taxes or golden parachute excise taxes payable with respect to such amounts.by the named executive officer. In addition, to the amounts set forth in the row, Mr. Reardonnamed executive officers would also be entitled to be paid for any unused comprehensive leave time he had accrued.52 | 2018 Proxy StatementExecutive CompensationPost-employment Payments — Mr. Scholl Involuntary Termination/ Good Reason Without Change in Control With Change in Control Voluntary
Termination For Cause Without
Cause/ for
Good
Reason(1) New Change
in Control(3) Death Disability — — $535,000 $2,407,500 $2,407,500 — — — — 432,096 428,000 428,000 428,000 428,000 — — 59,663 59,663 610,261 610,261 610,261 — — 33,487 33,487 1,908,427 1,908,427 1,908,427 — — 1,361,087 1,361,087 1,344,723 1,344,723 1,361,087 — — 20,608 124,248 124,248 — — — — 7,500 15,000 15,000 — — — — — — — — — — — $2,449,441 $4,428,985 $6,838,159 $4,291,411 $4,307,775 (1)Amounts in this column represent the benefits Mr. Scholl would be entitled to receive in the event he experiences a hypothetical qualifying termination that does not constitute a CIC under the terms of the Leidos Executive Severance Plan or the Leidos Equity and Deferred Compensation Plans. However, since the IS&GS Transaction constituted a CIC under the terms of Mr. Scholl’s severance protection agreement, until August 16, 2018, if Mr. Scholl experiences a qualifying termination that is not in connection with CIC of Leidos, Mr. Scholl will be entitled to receive the enhanced compensation and benefits reflected for the IS&GS Transaction and not the benefits detailed in this column.(2)Since the IS&GS Transaction constituted a CIC for purposes of his SPA but not for purposes of the Leidos Equity and Deferred Compensation Plans, the benefits reflected in this column represent the compensation and benefits Mr. Scholl would be entitled to receive on a qualifying termination under the SPA until August 16, 2018.(3)Amounts in this column represent the benefits Mr. Scholl would be entitled to in the event a new transaction had occurred on December 29, 2017 that constituted a CIC under the terms of the Leidos Equity and Deferred Compensation Plans, in addition to the benefits under his SPA.(4)Amounts shown for termination without Cause or for Good Reason, not in connection with a CIC reflect a single lump sum payment equal to one year of annual base salary. Amounts in the CIC scenarios represent a single lump sum payment equal totwo-and-one-half times the sum of Mr. Scholl’s (a) year end salary and (b) target bonus. This amount of the bonus calculated under subsection (b) is referred to as the “Bonus Amount.”(5)Amounts shown for termination without a CIC reflect Mr. Scholl’s bonus based on actual performance through December 29, 2017. In all other scenarios the amounts reflect a pro rata portion of the Bonus Amount to which Mr. Scholl would be entitled to based on the number of days that elapsed during the period ended December 29, 2017.(6)For termination not in connection with a CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the grant date and December 29, 2017. For terminations in connection with a new CIC, and the death and disability scenarios amounts represent the value of accelerated vesting of shares of all RSUs, including accrued dividends as of December 29, 2017 pursuant the 2006 Equity Incentive Plan. For more information regarding the number of shares of unvested stock units held by Mr. Scholl, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”2018 Proxy Statement | 53Executive Compensation(7)For termination without CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the time period and December 29, 2017. For termination with a CIC, death and disability, the amount represents the value of accelerated vesting of all unvested options held by Mr. Scholl at the end of the year issued pursuant to the 2006 Equity Incentive Plan. For more information regarding the number of shares and exercise prices underlying unvested options held see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(8)Amounts represent the value of Mr. Scholl’s September 2015 performance share grant earned based on actual performance and apro-rata amount of his 2016 and 2017 performance share awards, including accrued cash dividends as of December 29, 2017. In thenon-CIC termination, IS&GS CIC and disability, scenarios the 2016 and 2017 grants assume performance at 115.52% and 110.05% of target levels respectively. In the CIC and death scenarios, the 2016 and 2017 grants assume target payout levels.(9)Amount for termination without Cause or for Good Reason not in connection with a CIC reflects the estimated value of COBRA benefits to be received for 12 months following termination. Other amounts represent the estimated value of life insurance, disability, medical, dental, vision and hospitalization benefits to be received for 30 months following termination.(10)Represents the estimated value of outplacement counseling services to be provided for 6 months following termination if not in connection with a CIC. If termination is in connection with a CIC, Mr. Scholl is entitled to outplacement counseling services for 12 months following termination.(11)Estimates the severance protection benefits to be reduced to avoid excise taxes which may be payable pursuant to Section 280G of the Internal Revenue Code.(12)Amounts in this row represent the gross amount of benefits to be received, without reflecting any federal and/or state income taxes or golden parachute excise taxes payable with respect to such amounts. In addition to the amounts set forth in the row, Mr. Scholl would also be entitled to be paid for any unused comprehensive leave time he had accrued.Post-employment Payments — Ms. Heise Involuntary Termination/ Good Reason Without Change in Control With Change in Control Voluntary
Termination For Cause Without
Cause/for
Good
Reason(1) Death Disability — — $410,000 $1,107,000 — — — — 319,190 328,000 319,190 319,190 — — 876,356 1,535,072 1,535,072 1,535,072 — — 34,325 758,108 758,108 758,108 183,742 166,970 166,970 183,742 — — 22,220 34,441 — — — — 7,500 15,000 — — — — — — — — — — $1,853,333 $3,944,591 $2,779,340 $2,796,112 54 | 2018 Proxy StatementExecutive Compensation(1)Amounts in this column represent the benefits Ms. Heise would be entitled to in the event of a qualifying termination on December 29, 2017 under the Leidos Executive Severance Plan and the Leidos Equity and Deferred Compensation Plans.(2)Amounts in this column represent the benefits Ms. Heise would be entitled to in the event a new transaction had occurred on December 29, 2017 that constituted a CIC under the terms of the Leidos Equity and Deferred Compensation Plans and the Leidos Executive Severance Plan.(3)Amount shown for termination without Cause or for Good Reason, not in connection with a CIC reflects a lump sum severance payment equal to one year of annual base salary. For a termination in connection with a CIC, the value reflects 1.5 times the sum of annual base salary and target bonus.(4)Amounts shown for terminations without a CIC and death and disability reflect apro-rated bonus based on actual performance through December 29, 2017 and the number of days that elapsed during the performance period ended December 29, 2017. In the CIC scenario, the amount is based on target performance results.(5)For termination not in connection with a CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the grant date and December 29, 2017. It also includes Ms. Heise’s RSUs granted on August 16, 2016 which continue to vest upon an involuntary termination absent a CIC. For terminations in connection with a new CIC, death and disability, amounts represent the value of accelerated vesting of shares of all RSUs, including accrued dividends as of December 29, 2017 pursuant the 2006 Equity Incentive Plan. For more information regarding the number of shares of unvested stock units held by Ms. Heise, see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(6)For termination not in connection with a CIC, the value reflects a portion of the March 2017 awardpro-rated based on the number of days elapsed between the grant date and December 29, 2017. For terminations with a CIC, death and disability, amounts represent the value of accelerated vesting of all unvested options held by Ms. Heise at the end of the year issued pursuant to the 2006 Equity Incentive Plan. For more information regarding the number of shares and exercise prices underlying unvested options held see the table under the caption “Outstanding Equity Awards at FiscalYear-End.”(7)Amounts represent apro-rata amount of Ms. Heise’s 2017 performance share awards, including accrued dividends as of December 29, 2017. In thenon-CIC termination and disability scenarios, the value assumes performance at 110.05% of target levels. In the CIC and death scenarios, the values assume target payout levels.(8)Amounts reflect the estimated value of COBRA benefits to be received for 12 months following termination without Cause or for Good Reason, not in connection with a CIC and, in connection with a CIC, for 18 months.(9)Represents the estimated value of outplacement counseling services to be provided for 6 months following termination if not in connection with a CIC. If termination is in connection with a CIC, Ms. Heise is entitled to outplacement counseling services for 12 months following termination.(10)Estimates the Executive Severance Plan benefits to be reduced to avoid the payment of excess parachute payments pursuant to Section 280G of the Internal Revenue Code.(11)Amounts in this row represent the gross amount of benefits to be received, without reflecting any federal and/or state income taxes or golden parachute excise taxes payable with respect to such amounts. In addition to the amounts set forth in the row, Ms. Heise would also be entitled to be paid for any unused comprehensive leave time she had accrued.Mr. MaffeoOn July 15, 2017, Vincent Maffeo retired from the company. Under the Retirement Agreement entered into between Mr. Maffeo and the company, he received a lump sum cash severance payment as well as payments intended to restore or replace benefits that would have been paid to Mr. Maffeo if he had completed the fiscal year in our employment, such as life insurance, healthcare premiums, and annual cash bonus.2018 Proxy Statement | 55Executive CompensationIn addition to the value of equity continuing to vest under the Special Retirement provisions of his awards, Mr. Maffeo received a lump sum cash payment in partial consideration of his compliance with certain restrictive covenants between him and the company. ComponentAmount Severance (Lump Sum)$691,423(1) Life Insurance, Healthcare (Lump Sum)63,000(1) Cash Payment in Lieu of 2017 Bonus535,000(1) Additional Payments in Partial consideration of Executive’s Compliance with Restrictive Covenants (Lump Sum)732,850(1) Restricted Stock Units1,050,314(2) Stock Options1,630,406(2) Performance Share Awards1,464,577(2) Total$6,167,570(3)(1)These payments were made pursuant to our Retirement Agreement with Mr. Maffeo dated June 5, 2017.(2)Mr. Maffeo qualified for Special Retirement treatment under the terms of our 2006 Equity Incentive Plan. As a result, all of Mr. Maffeo’s outstanding RSUs and stock options that were unvested at the time of his termination will continue to vest according to their original vesting schedule. Mr. Maffeo will also be entitled to receive apro-rata number of his 2015, 2016 and 2017 performance share awards after the end of each applicable three-year performance period. The 2015 grant reflects amounts earned based on actual performance while 2016 and 2017 grants assumes performance at 115.52% and 110.05% of target, respectively.(3)In addition, Mr. Maffeo received unused comprehensive leave time he had accrued at the time of his termination.Mr. LeiterOn January 20, 2017, Michael Leiter terminated from the company. Because his termination occurred within the24-month period following the IS&GS Transaction and within the change in control period, he received the following severance benefits under the SPA entered into between Mr. Leiter and the company, as well as an additional severance payment of $300,000 outside of the SPA, in consideration of the value of Mr. Leiter’s agreement not to compete with us. ComponentAmount Severance Lump Sum (calculated as 2.5 x Salary and Target Bonus)$2,362,500(1) Prorated Fiscal Year 2017 Bonus24,231(1) Fiscal Year 2016 Annual Bonus (at Target)420,000(1) Life Insurance, Healthcare (Lump Sum)97,000(1) Outplacement Services15,000(1) Additional Severance300,000(2)Total$3,218,731(3)(1)These payments were made pursuant to the Severance Protection Agreement between Mr. Leiter and the company.(2)Mr. Leiter received additional consideration for the value of his agreement not to compete with us.(3)In addition, Mr. Leiter received unused comprehensive leave time he had accrued at the time of his termination.56 | 2018 Proxy StatementExecutive CompensationuponUpon TerminationUnderFor our performance share award program, target shares earned will be paid out promptly upon death or ondeath. In the case of disability for all performance share awards, individuals will receive apro-rata basis atnumber of shares after the end of the applicable three-year performance period, in case of disability.based on actual company performance over the full period.ten10 years of service or (ii) after age 59 1/2 when age at termination plus years of service equals at least 70. Our executive officers who retire after reaching the applicable mandatory retirement age, however, will be allowed to continue to vest in such options without regard to the 12 month holding requirement. When an individual becomes eligible for continued vesting, , restricted stock units will continue to vest in accordance with the original vesting schedule. Individuals meeting these qualifications who hold performance share awards will receive apro-rata number of shares after the end of the applicable three-year performance period, based on actual company performance over the full period. We have the right to terminate continued vesting if an individual violates confidentiality,non-solicitation, non-compete, or similar obligations to us.2017:2021:u the$99,416;$95,935;u theofficerOfficer was $9,221,709;$12,876,007; andu the93134 to 1. We believe that this ratio is a reasonable estimate calculated in a manner consistent with the requirements of the Pay Ratio Rule.29, 2017,31, 2021, our employee population consisted of 31,30442,757 individuals (of which approximately 93% were located in the United States, including certain employees on temporary international assignment, and 7% were located in jurisdictions outside the United States). Our employee population consisted of our global workforce of full-time, part-time, and temporary employees.employees, as described in more detail below.1,1761,661 of our employees located in certain jurisdictions outside of the United States given the relatively small number of employees in those jurisdictions and the estimated costs of obtaining their compensation information, as follows: 1,1021,329 employees from the United Kingdom;Kingdom, 70 employees from Singapore, 52 employees from South Korea, 41 employees from India, 38 employees from China, 27 employees from Saudi Arabia, 20 employees from Israel, 16 employees from Japan, 14 employees from Canada, 14 employees from the United Arab Emirates, 11 employees from Ireland, 10 employees from Bahrain, 8 employees from Hong Kong, 5 employees from Israel; 2Qatar, 4 employees from Singapore,Turkey, 1 employee from South Korea, 40Brazil, and 1 employee from Belgium. For each jurisdiction where we excluded employees, from Canada and 26we excluded all employees from Saudi Arabia. in that jurisdiction.thesetaking into account the above-described adjustments to our employee population as permitted by the Pay Ratio Rule, our total adjusted employee population for purposes of determining our “median employee” consisted of approximately 30,12841,096 individuals.2018 Proxy Statement | 57Determining Our Median EmployeeExecutive Compensation20172021 using the same methodology we used for purposes of determining the annual total compensation of our named executive officers for 20172021 (as set forth in the Summary Compensation Table in this Proxy Statement).20172021 for purposes of the Pay Ratio Rule is equal to the amount reported in the “Total” column in the Summary Compensation Table.5850 | 20182022 Proxy Statement 28, 2018.30, 2022. During the fiscal year ended December 29, 2017,31, 2021, Deloitte & Touche LLP served as our independent registered public accounting firm and also provided certain tax and other audit-related services as set forth under the caption “Audit Matters” below. Representatives of Deloitte & Touche LLP will be at the annual meeting to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so.& Touche LLP as our independent registered public accounting firm. However, we are submitting the appointment for ratification as a matter of good corporate practice. If stockholders fail to ratify the appointment, the Audit and Finance Committee will consider whether or not to retain Deloitte & Touche LLP.Deloitte. Even if the appointment is ratified, the Audit and Finance Committee may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in our stockholders’ best interests. the proposal, and broker“non-votes” have no effect on the outcome of the proposal. Shares of common stock represented by properly executed, timely received and unrevoked proxies will be voted in accordance with the instructions indicated thereon. In the absence of specific instructions, properly executed, timely received and unrevoked proxies will be voted “FOR” the proposal.28, 2018.30, 2022.20182022 Proxy Statement | 5951 statements.statements and the company’s internal controls over financial reporting. u met u metcompanyCompany to discuss any matters management or the Committee believed should be discussed privately without the internal auditor or the independent registered public accounting firm present; u reviewed& Touche LLP, the company’sCompany independent registered public accounting firm, the audited consolidated financial statements for the fiscal year ended December 29, 2017;31, 2021; u discussed & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB)(“PCAOB”) Standards and Rule2-07 of RegulationS-X (Communications with Audit Committees);the SEC; and u receivedapplicable PCAOB Standard (Communicationregarding Deloitte’s communications with the Audit Committees Concerning Independence).and Finance Committee concerning independence, and has discussed with Deloitte its independence.company’sCompany’s audited consolidated financial statements referred to above be included in the company’sCompany’s Annual Report on Form10-K for the fiscal year ended December 29, 201731, 2021, for filing with the SEC.Harry M.J. Kraemer,Robert C. Kovarik, Jr. (Chair)John P. JumperGregory R. DahlbergLawrence C. NussdorfHarry M. J. Kraemer, Jr.60 | 2018 Proxy StatementAudit Matters & Touche LLP as the independent registered public accounting firm to audit our financial statements for the fiscal year ending December 28, 2018.30, 2022. Stockholders are being asked to ratify the appointment of Deloitte & Touche LLP at the annual meeting.20172021 and 20162020 fiscal yearyears by our independent registered public accounting firm, Deloitte, & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited and their respective affiliates (collectively, the “Deloitte Entities”), were as follows: 2021 2020 2017 2016 $7,919,800 $5,957,900 $6,749,000 $6,805,000 — $268,500 $— $111,000 $122,800 $106,800 $490,300 $416,900 $6,600 $7,500 $141,300 $5,700 $8,049,200 $6,340,700 $7,380,600 $7,338,600 (1) (2) Audit relatedfor fiscal 2016 include professional services performed with respectrendered to the FormS-4 registration statementissue comfort letters in connection with the acquisition of the IS&GS Business.bond offerings.(3) (4) software.software and agreed upon procedures.All ofThe Committee or the Audit, Audit-Related, Tax and All Other Fees set forth above wereCommittee chair pre-approved by oneall of these means.Deloitte’s 2021 fees and services.20182022 Proxy Statement | 6153
beneficial ownership Blvd.,Boulevard, Malvern, PA 19355 12,889,12614,851,389 shares(1) 8.51%1002210055 12,699,21514,752,815 shares(2) 8.40%FMR LLCJP Morgan Chase & Co.245 Summer Street, Boston, MA 02210383 Madison Avenue, New York, NY 10179 11,024,6599,793,895 shares(3) 7.29% Vanguard Fiduciary Trust Company 500 Admiral Nelson Boulevard, Malvern, PA 193558,608,339 shares(4)7.20% 5.69%(1) Information shown is based on information reported by the filer9, 201810, 2022, in which The Vanguard Group, an investment adviser filing on behalf of itself and two wholly ownedvarious subsidiaries, reported that it has sole voting power over 105,9810 shares, shared voting power over 35,417207,002 shares, sole dispositive power over 12,752,03114,309,433 shares and shared dispositive power over 137,095541,956 shares.(2) Information shown is based on information reported by the filerJanuary 25, 2018February 9, 2022, in which BlackRock, Inc., a holding company filing on behalf of itself and various subsidiaries, reported that it has sole voting power over 11,782,59113,628,304 shares, andshared voting power over 0 shares, sole dispositive power over 12,699,21514,752,815 shares and shared dispositive power over 0 shares.(3) Information shown is based on information reported by the filer13G13G/A (Amendment No. 2) filed with the SEC on February 13, 2018January 12, 2022, in which FMR LLC,JP Morgan Chase & Co., a holding company filing on behalf of itself and various subsidiaries, and affiliates and other companies, reported that it has sole voting power over 465,9248,918,559 shares, andshared voting power over 33,197 shares, sole dispositive power over 11,024,6599,751,071 shares(4)According to a Schedule 13G/A filed with the SEC by Vanguard on February 13, 2018, these shares are held by Vanguard Fiduciary Trust Company as trustee of the Leidos Retirement Plan and as of December 31, 2017, all such shares have been allocated to plan participants. Subject to ERISA, Vanguard votes these shares as directed by the plan participants. Accordingly, Vanguard has shared voting and dispositive power with respect to theseover 41,052 shares. Shares held by Vanguard are also included in the amounts held by individuals and the group set forth in the table below.6254 | 20182022 Proxy Statement March 12, 2018,February 28, 2022, the beneficial ownership of our common stock by our directors and the named executive officers, and all of our directors and executive officers as a group. None of these individuals beneficially owns more than one percent of our common stock. As a group, our directors and executive officers beneficially own approximately 1.12%1.66% of our common stock. The percentage of beneficial ownership is based on 136,088,461 shares of our common stock outstanding as of February 28, 2022. Unless otherwise indicated, each individual has sole investment power and sole voting power with respect to the shares beneficially owned by such person, except for such power that may be shared with a spouse. No shares have been pledged. Beneficial Owner Common
stock Stock
units(1) Option
shares and
RSUs(2) Total shares
beneficially
owned 2,519 — 11,879 14,398 8,450 — 20,578 29,028 9,904 — 44,231 54,135 22,655 — 20,578 43,233 7,412 64,539 53,224 125,175 20,783 74,881 31,101 126,765 180,687 7,070 70,208 257,965 — — 6,440 6,440 3,863 — 10,406 14,269 60,760 105,027 53,224 219,011 81,758 118,545 31,101 231,404 4,782 — 26,032 30,814 7,613 — 31,101 38,714 9,419 — 11,879 21,298 15,350 — 20,578 35,928 28,072 — 53,224 81,296 — — — — 13,904 — 44,231 58,135 35,077 — 31,101 66,178 — — 11,879 11,879 8,450 — 20,578 29,028 9,904 — 44,231 54,135 37,664 — 31,101 68,765 143,175 1,121 274,637 418,933 306,045 188,438 660,474 1,154,957 9,000 22,539 15,340 46,879 14,320 33,217 52,784 100,320 1,682 95,815 25,268 122,765 1,008 — 4,742 5,750 19,688 — 51,472 71,160 802 — 3,775 4,577 72,464 37,041 214,469 323,974 — — — — 55,525 — 19,450 74,975 15,842 8,495 44,412 68,749 24,856 — 43,273 68,129 538,211 263,218 906,375 1,707,804 727,121 418,103 1,126,296 2,272,120 (1) (2) March 12, 2018.February 28, 2022.20182022 Proxy Statement | 6355 Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Securities Exchange Act of 1934 and the rules of the SEC require our directors and executive officers to file reports of their ownership and changes in ownership of common stock with the SEC. Our personnel generally prepare and file these reports on the basis of information obtained from each director and officer and pursuant to a power of attorney. Due to an administrative error, one Form 4 for Mr. Krone was filed one day late. Based upon a review of filings with the SEC and/or written representations that no other reports were required, we believe that all of our directors and executive officers and, to our knowledge, beneficial owners of more than 10% of our common stock otherwise complied during fiscal 2017 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934.20192023 Annual Meeting20192023 annual meeting of stockholders must be received by us no later than November 30, 201816, 2022, in order to be considered for inclusion in our Proxy Statement and form of proxy relating to that meeting.120th120th day, nor earlier than the close of business on the 150th150th day, prior to the first anniversary of the date that the proxy statement for the annual meeting was sent to stockholders. In the event, however, that the annual meeting is not scheduled to be held within a period that begins 30 days before the first anniversary date of the preceding year’s annual meeting of stockholders and ends 30 days after the first anniversary date of the preceding year’s annual meeting of stockholders, then the notice of nomination must be provided by the later of the close of business on the date that is 180 days prior to the annual meeting or the tenth day following the date such annual meeting is first publicly announced or disclosed. Therefore, in connection with the 20192023 annual meeting of stockholders, notice must be delivered to the Corporate Secretary between October 3117, 2022 and November 30, 2018.16, 2022.his or hersuch stockholder’s intention to bring such business before the meeting. To be timely, notice must be delivered to the Corporate Secretary not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. In the event, however, that the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by us, whichever occurs later. Therefore, in connection with the 20192023 annual meeting of stockholders, notice must be delivered to the Corporate Secretary between December 30, 2022 and January 11, 2019 and February 10, 2019.29, 2023.his or hersuch person’s name, age, address, occupation, shares, rights to acquire shares, information about derivatives, hedges, short positions, understandings or agreements regarding the economic and voting interests of the stockholder and related persons with respect to our stock, if any, and such other information as would be required to be disclosed in a proxy statement soliciting proxies for the election of the proposed nominee. A stockholder’s notice must be updated, if necessary, so that the information submitted is true and correct as of the record date for determining stockholders entitled to receive notice of the meeting.6456 | 20182022 Proxy Statement Other InformationFrequently Asked Questionsu FOR all of the company’s nominees to the Board; u FOR the approval, on a non-binding, advisory basis, of the compensation of our named executive officers; u FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 30, 2022; 10-K10-K?Annual Reportannual report without exhibits. Requests should be directed to Leidos11951 Freedom Drive,1750 Presidents Street, Reston, Virginia 20190, Attention: Corporate Secretary or by calling1-571-526-6000.By OrderInternet Availability of the Board of DirectorsProxy MaterialsDaniel J. AntalAs permitted by the rules of the SEC, we are using the internet as a means of furnishing proxy materials to our stockholders. We believe this method will make the proxy distribution process more efficient, lower costs and help in conserving natural resources.Corporate Secretary27, 2018201816, 2022, we mailed to our stockholders a Notice of Internet Availability of Proxy Statement | 65 ATTN: STOCK PROGRAMS 11955 FREEDOM DRIVE M/S:FS2-15-1 RESTON, VA 20190VOTE BY INTERNET -www.proxyvote.com or scan the barcode aboveUse theMaterials containing instructions on how to access our proxy materials, including our proxy statement and annual report. The Notice of Internet Availability of Proxy Materials also instructs you on how to transmit your proxy and/or voting instructions and for electronic delivery of information. Haveaccess your proxy and voting instruction card to be able to vote through the internet or by telephone. Other stockholders, in accordance with their prior requests, and employees with regular access to email have received email notification of how to access our proxy materials and vote via the internet or by telephone or have been mailed paper copies of our proxy materials and a proxy and voting instruction card.side of this card forDuring You may The attend Meeting the meeting—Go to www via the. virtualshareholdermeeting internet and vote during the meeting .com/LDOS2022 . Have the information regarding specific voting deadlines.DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using via the Internete-internet mail or the and, wheninternet when. prompted, To sign up indicate that you agree to receive or access stockholder communicationsproxy materials electronically in future years.BY PHONE - 1-800-690-6903touch-toneBY touch PHONE -tone — 1 telephone to-800-690-to 6903 transmit your proxy and/or voting instructions. Have your proxy and voting instruction for information card regarding in hand when specific you voting call and deadlines then follow . the instructions. Please see the reverse side of this card for information regarding specific voting deadlines.Mark, sign and date your proxy and voting instruction card and return it in the postage-paid envelope we have provided or return it to Leidos, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.You may confirm that your instructions were received and included in the final tabulation to be issued at using the the Annual information Meeting that on May 11, 2018April is printed 29, 2022 in the via the box ProxyVote marked by Confirmation the arrow link at www.proxyvote.com by using the information that is printed in the box marked by the arrow. Vote Confirmation is available 24 hours after your vote is received beginningbeginningï§XXXX April 26, 2018,XXXX 16, 2022, XXXX with XXXX the final vote tabulation remaining available through July 11, 2018.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:E42873-P05744 KEEP THIS PORTION FOR YOUR RECORDS— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —DETACH AND RETURN THIS PORTION ONLYVOTE ON DIRECTORS - The Board of Directors recommends a vote FOR each of the nominees listed below.1.Nominees: For Against Abstain1a.Gregory R. Dahlberg ☐ ☐☐1b.David G. Fubini ☐ ☐☐1c.Miriam E. John ☐ ☐☐1d.Frank Kendall III ☐ ☐☐1e.Harry M.J. Kraemer, Jr. ☐ ☐☐1f.Roger A. Krone ☐ ☐☐1g.Gary S. May ☐ ☐☐1h.Surya N. Mohapatra ☐ ☐☐1i.Lawrence C. Nussdorf ☐ ☐☐1j.Robert S. Shapard ☐ ☐☐1k.Susan M. Stalnecker ☐ ☐☐1l.Noel B. Williams ☐ ☐☐VOTE ON PROPOSAL 2 - The Board of Directors recommends a vote FOR proposal 2. For Against Abstain2.Approve, by an advisory vote, executive compensation. ☐ ☐☐VOTE ON PROPOSAL 3 - The Board of Directors recommends a vote FOR proposal 3. For Against Abstain3.The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 28, 2018. ☐ ☐☐Please complete, date, sign and mail promptly in the enclosed envelope which requires no postage.Please sign EXACTLY as name or names appear(s) hereon. When signing as attorney, executor, trustee, administrator or guardian, please give your full title. If a trust requires the signature of more than one trustee, all required trustees must sign.Signature [PLEASE SIGN WITHIN BOX] DateSignature (Joint Owners) Date*ADMISSION TICKET*Please bring this top halfImportant Notice Regarding the Availability of your proxy card, along with a government issued photo I.D.in order to gain admission toProxy Materials for the meeting.annual meetingAnnual Meeting on the— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —E42874-P05754 Proxy and Voting Instruction Card for the Annual Meeting of Stockholders - May 11, 2018This Proxy and Voting Instruction Card is Solicited on Behalf of the Board of DirectorsThe undersigned hereby appoints Jerald S. Howe, Jr. and Daniel J. Antal, and each of them, with full power of substitution, as proxies to represent the undersigned and to vote all of the shares of common stock the undersigned is entitled to vote at the Annual Meeting of Stockholders of Leidos Holdings, Inc. (the “Company”) to be held at the Company’s office, 11951 Freedom Drive, Reston, Virginia 20190, on Friday, May 11, 2018, at 9:00 a.m. (local time), and at any adjournment, postponement or continuation thereof (the “2018 Annual Meeting of Stockholders”), as indicated on the reverse side.For stockholders who are participants in the Leidos, Inc. Retirement Plan (the “Leidos Retirement Plan”), the undersigned also hereby instructs the Trustee, Vanguard Fiduciary Trust Company, and any successor, to vote all of the shares of common stock held for the undersigned’s account in the Leidos Retirement Plan at the 2018 Annual Meeting of Stockholders, as indicated on the reverse side.The shares of common stock to which this proxy and voting instruction card relates will be voted as directed.If this proxy and voting instruction card is properly signed and returned but no instructions are indicated with respect to a particular item, (A) the shares represented by this proxy and voting instruction card which the undersigned is entitled to vote will be voted (i) FOR each of the nominees standing for election as a director, (ii) FOR Proposal 2, (iii) FOR Proposal 3 and (iv) in the discretion of the proxy holders, on any other matters properly coming before the meeting and any adjournment, postponement or continuation thereof and (B) the shares represented by this proxy and voting instruction card held for the undersigned’s account in the Leidos Retirement Plan will be voted in the same proportion as the shares held in the Leidos Retirement Plan for which voting instructions have been received are voted. This proxy and voting instruction card, if properly executed and delivered in a timely manner, will revoke all prior proxies and voting instruction cards executed and delivered by the undersigned.For shares not held in the Leidos Retirement Plan, the deadline for submitting a proxy using the Internet or the telephone is 11:59 p.m. Eastern time on May 10, 2018. For shares held in the Leidos Retirement Plan, the deadline for submitting voting instructions using any of the allowed methods is 11:59 p.m. Eastern time on May 8, 2018.Please complete, sign, date and return the Proxy and Voting Instruction Card promptly using the enclosed envelope.(Continued and to be signed on reverse side.)