EXHIBIT 10.3
COMPUTER SCIENCES CORPORATION
1980 STOCK OPTION PLAN
As amended March 31, 1988
Section 1: PURPOSE OF PLAN
The purpose of this 1980 Stock Option Plan of Computer Sciences Corporation
(the "Plan") is to further the growth and development of Computer Sciences
Corporation and each subsidiary (as the term "subsidiary" is defined in
Section 425(f) of the Internal Revenue Code) of Computer Sciences Corporation
(herein referred to collectively with its subsidiaries as the "Company") by
providing additional incentives to certain employees who have been or will be
given responsibility for the management of the Company's business affairs, by
assisting such employees to become owners of common stock of the Company
through the issuance of options to purchase shares of common stock and thus to
benefit directly from the growth, development and financial success of the
Company.
Section 2: ADMINISTRATION
The Plan shall be administered by a committee of three members (the
"Committee") appointed by the Board of Directors, at least two of whom shall
be members of the Board of Directors, and each of whom shall be a
"disinterested person," as that term is defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended from time to time, or any
equivalent term defined in any law, rule or regulation which may replace Rule
16b-3. The Committee shall hold office at the pleasure of the Board of
Directors. The Committee shall have full authority, in its discretion, to
determine the employees to whom options may be granted and the number of
shares covered by such options. However, the Committee may delegate this
authority to the Executive Committee of the Board of Directors of the Company
with respect to all employees of the Company other than officers and
directors. The Committee is authorized to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to amend or revoke any such rules and to make interpretations of
the Plan and any such rules consistent with the basic purpose of the Plan.
All actions taken and all determinations made by the Committee in good faith
shall be final and binding upon any person interested in the Plan. The
Committee shall cause to be maintained such records as may be necessary to
reflect all options granted under the Plan, the dates of such grants and the
amount of shares covered thereby and may rely upon advice from the Company as
to the commencement or termination of employment of participants.
Section 3: SHARES SUBJECT TO THE PLAN
A total of 600,000 shares of the Company's common stock, $1.00 par value,
shall be available under the Plan, subject to adjustment as provided in
paragraph 4 below. Such shares shall be from either authorized but unissued
shares or issued shares reacquired by the Company. If any option expires or
is canceled without having been fully exercised, the number of shares as to
which such option was not exercised may again be optioned hereunder.
Section 4: ADJUSTMENT OF SHARES
If the outstanding shares of common stock of the Company are changed by any
stock dividend, stock split or combination of shares, the number of shares
then subject to the Plan and the option price and number of shares subject to
outstanding options granted under the Plan shall be proportionately adjusted.
If the outstanding shares of common stock of the Company shall be exchanged
for a different number or class of shares of stock of the Company by reason of
a merger, reorganization, recapitalization or other change in the corporate
stock structure, there shall be substituted for each share of common stock
then subject to the Plan and to outstanding options granted under the Plan,
the number and kind of shares of stock into which each outstanding share of
common stock of the Company shall be so exchanged (except as provided in
paragraph 6(f) below). In the event of any such adjustment, the purchase
price per share for outstanding options granted under the Plan shall be
proportionately adjusted.
Section 5: PARTICIPANTS
All officers and other key employees of the Company shall be eligible to
receive options and thereby become participants in the Plan, except that no
employee who, at the time such option would otherwise be granted, owns stock
possessing more than 5% of the total combined voting power of all classes of
stock of the Company shall be eligible to participate. In granting options,
the Committee may include or exclude previous participants as the Committee
may determine.
Section 6: OPTIONS
(a) Grant of Options.
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Options to purchase shares of the common stock of the Company shall be granted
by the Committee, on behalf of the Company, commencing after approval of
shareholders. The Committee shall, from time to time and within the limits of
the Plan, designate officers and other key employees of the Company to whom
options are to be granted, the date of grant, the number of shares to be
optioned to each, and the option price. As a condition of being granted an
option, an employee of the Company shall execute and deliver to the Company a
Stock Option Agreement with such provisions as to option prices and such other
terms, including methods of withholding or prepaying required taxes, not
inconsistent with the Plan as the Committee may specify.
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(b) Option Price.
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The price of the shares covered by each option granted under the Plan shall be
set by the Committee in its sole discretion at an option price not less than
one hundred percent of the fair market value of such shares on the date such
option is granted.
(c) Commencement of Exercisability.
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Each option shall become exercisable at such time or times as the Committee
shall determine in its sole discretion, subject, however, to the following
limitations: (i) the option shall not be exercisable as to any shares covered
thereby for a period of at least one year from the date the option is granted;
(ii) the option may become exercisable as to not more than 20% of the shares
covered thereby at the expiration of at least one year after the date the
option is granted and may become exercisable as to not more than an additional
20% of the shares covered thereby at the expiration of each of the second,
third, fourth and fifth years after the date the option was granted; and (iii)
the option shall become exercisable as to all shares covered thereby not later
than thirty days prior to the expiration of the tenth year after the date the
option is granted. Notwithstanding the foregoing, but subject to the
provisions of paragraph 7 below, options shall become exercisable in full
pursuant to the provisions of paragraph 6(f) below. In addition, options
granted to an employee who has (i) died; (ii) suffered a permanent disability;
(iii) retired at age 65 or older, or (iv) retired at age 55 or older (but less
than age 65) with more than ten years of continuous employment with the
Company, and whose contributions to the affairs of the Company have been
determined by the Board of Directors of the Company to be outstanding may, at
the discretion of the Board of Directors of the Company, be exercisable
immediately in full.
(d) Termination of Exercisability.
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Upon the first to occur of the following events, each then unexercised option
or part thereof shall expire: (i) ten years from the date such option was
granted with respect to an incentive stock option; (ii) ten years plus thirty
days from the date such option was granted with respect to a non-incentive
stock option; or (iii) the date of termination of employment for any reason
whatsoever. However, in the event of termination of employment by reason of
death or permanent disability, any unexercised option which was exercisable on
the date of termination of employment may, within one year thereafter, be
exercised in full or in part by such holder or, in the case of death, by any
person empowered to do so under the deceased option holder's will or under the
then applicable laws of descent and distribution; provided, however, that if
the option is an incentive stock option and employment was terminated by
reason of death of the holder, the option or part thereof may be exercised
within one year from the date of death of the holder or ten years from the
date such option was granted, whichever occurs earlier.
(e) Exercise of Options.
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Each option shall be exercisable during the lifetime of an option holder, only
by the option holder or a court appointed representative in the event of an
option holder's incapacity. In the event of termination of employment of an
option holder because of death, any option may,
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prior to cancellation or expiration of such option, be exercised in whole or
in part by any person empowered to do so under any deceased option holder's
will or under the then applicable laws of descent and distribution. Any
exercisable option may be exercised in whole or in part; provided, however,
the Company shall not be required to issue fractional shares. Subject to the
foregoing, all or any part of the shares with respect to which the right to
purchase has accrued may be purchased at the time of such accrual or at any
time or times thereafter during the term of the option in addition to other
shares with respect to which the right to purchase has accrued. An option may
be exercised only by delivery to the Secretary or the Corporate Controller of
the Company, in a manner prescribed by the Committee, of a notice in writing
(an "Exercise Notice") stating that such option or a specified part thereof is
exercised. The purchase price on each exercise of an option shall be the
option price times the number of shares with respect to which such option or
part thereof is exercised. Except as hereinafter provided with respect to
option holders who exercise options prior to termination of employment with
the Company, the purchase price shall be paid in cash or by certified or
cashier's check accompanying the Exercise Notice. If the option is exercised
by an option holder prior to termination of employment with the Company, he or
she may elect in the Exercise Notice not to pay the entire purchase price
pursuant to the preceding sentence but instead to pay the purchase price for
shares with respect to which the option is exercised, in whole or in part, by
the surrender to the Company of outstanding whole shares of the Company's
common stock of the same class and of an aggregate value not exceeding the
total purchase price for shares with respect to which the option is exercised,
in which case the excess of such total purchase price over the value of the
whole shares so surrendered shall be paid in cash or by certified or cashier's
check accompanying the Exercise Notice. If such option holder so elects to
surrender whole shares of the Company's common stock in payment of all or any
portion of the purchase price, certificates evidencing common stock so
surrendered, properly endorsed or assigned to the Company, shall accompany the
Exercise Notice. Such stock will be valued for this purpose at a price equal
to the closing price on the-New York Stock Exchange on the date that the
Exercise Notice is delivered. The election to pay the purchase price in whole
or in part by the surrender of outstanding whole shares of the Company's
Common Stock is available to such option holder provided that such Exercise
Notice is delivered on a day on which the New York Stock Exchange is open for
business and that the Company's common stock has not been suspended from
trading at any time during that day. The obligation of the Company to issue
shares upon exercise of an option is subject to the provisions of paragraph 7
below and to compliance with all applicable requirements of law with respect
to the issuance and sale of such shares.
(f) Cancellation of Options.
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In the event of the dissolution or liquidation of the Company (whether or not
as part of a corporate reorganization) or upon a merger, consolidation or
other reorganization in which the Company is not the surviving corporation (a
"Cancellation Event"), then all unexercised options, or portions thereof which
remain outstanding on the date of consummation of the
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Cancellation Event shall be canceled and be of no further force and effect;
provided, however, that upon the approval of the Cancellation Event by the
stockholders of the Company, or the approval of the Cancellation Event by the
Board of Directors of the Company if stockholder approval is not required,
each option will become exercisable as to all of the shares covered thereby,
irrespective of the provisions of paragraph 6(c) above. The holder of each
option shall be given prompt notice of such approval by the stockholders of
the Company or its Board of Directors. To the extent that any option is
exercised after the giving of such notice and prior to the consummation of the
Cancellation Event with respect to shares as to which the option, but for the
provisions of this paragraph, would not otherwise be exercisable (the
"Unexercisable Portion of the Option") then any exercise of the Unexercisable
Portion of the Option under this paragraph 6(f) shall not be effective until
immediately prior to the consummation of the Cancellation Event. After the
giving of such notice and prior to the consummation of the Cancellation Event,
any option holder may also make his exercise of any exercisable portion of his
option contingent on the consummation of the Cancellation Event. If the
parties to the Cancellation Event should terminate it or if either of such
parties is unable to meet the conditions precedent to the consummation of the
Cancellation Event within the time scheduled therefor or any extension thereof
mutually agreed upon by such parties, then any exercise of the Unexercisable
Portion of the Option pursuant to this paragraph 6(f) and any continent
exercise of the exercisable portion of any option pursuant to the preceding
sentence will be of no force and effect. Thereafter, outstanding options will
be exercisable only to the extent permitted under other provisions of this
Plan.
(g) Options Not Transferable.
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No option shall be transferable by the option holder other than by will or the
applicable laws of descent and distribution.
Section 7: CONDITIONS
Until satisfaction of each of the following conditions, options issued under
the Plan shall not become exercisable and the Company shall have no obligation
to issue shares upon exercise of any option at any time when any of the
following conditions are not satisfied:
(a) The PIan has been approved by the affirmative vote of the holders of
a majority of the outstanding shares of common stock of the Company present,
or represented, and entitled to vote at a meeting of stockholders of the
Company at which a quorum was present in person or by proxy;
(b) The completion and continued effectiveness of registration and other
qualification under all applicable federal and state laws, rules and
regulations, including the Securities Act of 1933, of the shares of common
stock issuable upon exercise of options granted under the Plan;
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(c) The shares issuable upon exercise of options granted under the Plan
shall have been (and shall continue to be) admitted to trading upon official
notice of issuance on any stock exchange on which the other shares of the
Company's common stock are listed; and
(d) The option holder has complied with all of the provisions of the
applicable Stock Option Agreement.
Section 8: AMENDMENT OF PLAN
Without the prior approval of stockholders, the Plan may not be amended so as
to (i) increase the number of shares available under the Plan, except in
accordance with the terms of the Plan as set forth in paragraph 4 hereof, (ii)
decrease the option price except in accordance with the terms of the Plan as
set forth in paragraph 4 hereof, and/or (iii) accelerate the initial
commencement of exercisability except in accordance with paragraphs 6(c) and
6(f) hereof. Except for instances where such stockholder approval is
required, the Board of Directors of the Company may amend or discontinue the
Plan at any time. However, no such amendment or discontinuance shall change
or impair any option previously granted without the consent of the option
holder.
Section 9: NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in the Plan or in any Stock Option Agreement hereunder shall confer
upon any employee any right to continue in the employ of the Company or
interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to discharge any employee at any time, with or
without cause.
Section 10: LIMITATION ON GRANT OF OPTIONS AFTER DECEMBER 31, 1980
(a) In the case of any option or options granted under the Plan after
December 3I, I980, the aggregate fair market value (determined as of the time
the option is granted) of the stock for which any employee of the Company may
be granted incentive stock options (as such term is defined in the Economic
Recovery Act of 1981, Section 251 relating to Section 422A of the Internal
Revenue Code of I954, as amended) in any calendar year under all stock option
plans of the Company shall not exceed $100,000 plus any unused limit carryover
to such year. The unused limit carryover may be carried over for three years
and shall apply to any year after 1980. The unused limit carryover shall be
one-half of the amount by which $100,000 exceeds the value at time of grant of
the stock for which incentive stock options were granted in such prior year or
years.
(b) Notwithstanding the foregoing, in the case of any option or options
granted after December 31, 1986, the aggregate fair market value (determined
at the time the option is granted) of the stock with respect to which
incentive stock options are exercisable for the first time by such individual
during
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any calendar year (under all such plans of the Company) shall not exceed
$100,000.
Section 11: DESIGNATION OF OPTIONS
No options granted under the Plan prior to November 14, 1981, shall be
incentive stock options. Options granted under the Plan on or after November
I4, 1981, may be incentive stock options as authorized by the Committee to the
extent permitted by law.