EXHIBIT 10.10
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
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ARTICLE I - DEFINITIONS .............................................. 1
Section 1.1 - General ............................................ 1
Section 1.2 - Account ............................................ 1
Section 1.3 - Administrator ...................................... 1
Section 1.4 - Board .............................................. 2
Section 1.5 - Change in Control .................................. 2
Section 1.6 - Chief Executive Officer ............................ 2
Section 1.7 - Code ............................................... 2
Section 1.8 - Committee .......................................... 2
Section 1.9 - Company ............................................ 2
Section 1.10- Deferred Compensation .............................. 2
Section 1.11- Election Form ...................................... 3
Section 1.12- Eligible Key Executive ............................. 3
Section 1.13- Employee ........................................... 3
Section 1.14- ERISA .............................................. 3
Section 1.15- Exchange Act ....................................... 3
Section 1.16- Hardship ........................................... 3
Section 1.17- Key Executive ...................................... 4
Section 1.18- Key Executive Plan ................................. 4
Section 1.19- Nonemployee Director ............................... 4
Section 1.20- Nonemployee Director Plan .......................... 4
Section 1.21- Partial First Plan Year ............................ 4
Section 1.22- Participant ........................................ 5
Section 1.23- Plan ............................................... 5
Section 1.24- Plan Year .......................................... 5
Section 1.25- Predecessor Plan ................................... 5
Section 1.26- Retirement ......................................... 5
Section 1.27- Separation from Service ............................ 5
Section 1.28- Qualified Compensation ............................. 5
ARTICLE II - ELIGIBILITY ............................................. 6
Section 2.1 - Requirements for Participation ..................... 6
Section 2.2 - Deferral Election Procedure ........................ 6
Section 2.3 - Content of Election Form ........................... 6
ARTICLE III - PARTICIPANTS' DEFERRALS ................................. 7
Section 3.1 - Deferral of Qualified Compensation .................. 7
Section 3.2 - Deferral for Partial First Plan Year ................ 7
ARTICLE IV - DEFERRED COMPENSATION ACCOUNTS ........................... 7
Section 4.1 - Deferred Compensation Accounts ...................... 7
Section 4.2 - Crediting of Deferred Compensation .................. 7
Section 4.3 - Crediting of Earnings ............................... 8
Section 4.4 - Applicability of Account Values ..................... 8
Section 4.5 - Vesting of Deferred Compensation Accounts ........... 8
Section 4.6 - Assignments, Etc. Prohibited ........................ 8
ARTICLE V - DISTRIBUTIONS OF DEFERRED COMPENSATION ACCOUNTS ........... 8
Section 5.1 - Distributions upon a Key Executive's Retirement and
a Nonemployee Director's Separation from Service .... 8
Section 5.2 - Distributions upon a Key Executive's Pre-Retirement
Separation from Service ............................. 9
Section 5.3 - Distributions upon a Participant's Death ............ 9
Section 5.4 - Optional Distributions .............................. 10
Section 5.5 - Applicable Taxes .................................... 10
ARTICLE VI - WITHDRAWALS FROM DEFERRED COMPENSATION ACCOUNTS .......... 11
Section 6.1 - Hardship Withdrawals from Accounts .................. 11
Section 6.2 - Withdrawals after a Change in Control ............... 11
Section 6.3 - Voluntary Withdrawals ............................... 11
Section 6.4 - Applicable Taxes .................................... 12
ARTICLE VII - ADMINISTRATIVE PROVISIONS ............................... 12
Section 7.1 - Administrator's Duties and Powers ................... 12
Section 7.2 - Limitations Upon Powers ............................. 12
Section 7.3 - Final Effect of Administrator Action ................ 13
Section 7.4 - Committee ........................................... 13
Section 7.5 - Indemnification by the Company; Liability Insurance . 13
Section 7.6 - Recordkeeping ....................................... 13
Section 7.7 - Statement to Participants ........................... 14
Section 7.8 - Inspection of Records ............................... 14
Section 7.9 - Identification of Fiduciaries ....................... 14
Section 7.10- Procedure for Allocation of Fiduciary Responsibilities 14
Section 7.11- Claims Procedure .................................... 14
Section 7.12- Conflicting Claims .................................. 16
Section 7.13- Service of Process .................................. 16
ARTICLE VIII - MISCELLANEOUS PROVISIONS ............................... 16
Section 8.1 - Termination of the Plan ............................. 16
Section 8.2 - Limitation on Rights of Participants ................ 17
Section 8.3 - Consolidation or Merger; Adoption of Plan by
Other Companies ..................................... 17
Section 8.4 - Errors and Misstatements ............................ 17
Section 8.5 - Payment on Behalf of Minor, Etc. .................... 18
Section 8.6 - Amendment of Plan ................................... 18
Section 8.7 - No Funding .......................................... 18
Section 8.8 - Governing Law ....................................... 18
Section 8.9 - Pronouns and Plurality .............................. 18
Section 8.10- Titles .............................................. 18
Section 8.11- References .......................................... 19
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
as Amended and Restated Effective November 4, 1996
Computer Sciences Corporation, a Nevada corporation, by resolution of its
Board of Directors dated August 14, 1995, has adopted the Computer Sciences
Corporation Deferred Compensation Plan (the "Plan"), which constitutes a
complete amendment and restatement of the Computer Sciences Corporation
Nonqualified Deferred Compensation Plan (the "Predecessor Plan"), effective as
of September 30, 1995, for the benefit of its Nonemployee Directors, as
defined below, and certain of its Key Executives, as defined below.
The Plan shall constitute two separate plans, one for the benefit of
Nonemployee Directors and one for the benefit of Key Executives. The plan for
Key Executives is a nonqualified deferred compensation plan which is unfunded
and is maintained primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees, within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as defined
below. The plan for Nonemployee Directors is not subject to ERISA.
ARTICLE I
DEFINITIONS
Section 1.1 General
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Whenever the following terms are used in the Plan with the first letter
capitalized, they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.2 Account
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"Account" of a Participant shall mean the Participant's individual
deferred compensation account established for his or her benefit under Article
IV hereof.
Section 1.3 Administrator
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"Administrator" shall mean Computer Sciences Corporation, acting through
its Chief Executive Officer or his or her delegate, except that if Computer
Sciences Corporation appoints a Committee under Section 7.4, the term
"Administrator" shall mean the Committee as to those duties, powers and
responsibilities specifically conferred upon the Committee.
Section 1.4 Board
- ----------- -----
"Board" shall mean the Board of Directors of Computer Sciences
Corporation. The Board may delegate any power or duty otherwise allocated to
the Administrator to any other person or persons, including a Committee
appointed under Section 7.4.
Section 1.5 Change in Control
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"Change in Control" means, after September 30, 1995, (a) the acquisition
by any person, entity or group (as defined in Section 13(d)3 of the Exchange
Act), as beneficial owner, directly or indirectly, of securities of Computer
Sciences Corporation representing twenty percent (20%) or more of the combined
voting power of the then outstanding securities of Computer Sciences
Corporation, (b) a change during any period of two (2) consecutive years of a
majority of the Board as constituted as of the beginning of such period,
unless the election of each director who was not a director at the beginning
of such period was approved by vote of at least two-thirds of the directors
then in office who were directors at the beginning of such period, (c) a sale
of substantially all of the property and assets of Computer Sciences
Corporation, (d) a merger, consolidation, reorganization or other business
combination to which Computer Sciences Corporation is a party and the
consummation of which results in the outstanding voting securities of Computer
Sciences Corporation being exchanged for or converted into cash, property
and/or securities not issued by Computer Sciences Corporation, or (e) any
other event constituting a change in control of Computer Sciences Corporation
for purposes of Schedule 14A of Regulation 14A under the Exchange Act.
Section 1.6 Chief Executive Officer
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"Chief Executive Officer" shall mean the Chief Executive Officer of
Computer Sciences Corporation.
Section 1.7 Code
- ----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
Section 1.8 Committee
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"Committee" shall mean the Committee, if any, appointed in accordance
with Section 7.4.
Section 1.9 Company
- ----------- -------
"Company" shall mean Computer Sciences Corporation and all of its
affiliates, and any entity which is a successor in interest to Computer
Sciences Corporation and which continues the Plan under Section 8.3(a).
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Section 1.10 Deferred Compensation
- ------------ ---------------------
"Deferred Compensation" of a Participant shall mean the amounts deferred
by such Participant under Article III of the Plan.
Section 1.11 Election Form
- ------------ -------------
"Election Form" shall mean the form of election provided by the
Administrator to each Eligible Executive and Nonemployee Director pursuant to
Section 3.1.
Section 1.12 Eligible Key Executive
- ------------ ----------------------
"Eligible Key Executive" shall mean any Key Executive who has been
designated as eligible to participate in the Plan with respect to any Plan
Year by the Chief Executive Officer.
Section 1.13 Employee
- ------------ --------
"Employee" shall mean any person who renders services to the Company in
the status of an employee as that term is defined in Code Section 3121(d),
including officers but not including directors who serve solely in that
capacity.
Section 1.14 ERISA
- ------------ -----
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
Section 1.15 Exchange Act
- ------------ ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.16 Hardship
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(a) "Hardship" of a Participant, shall mean any one or more of the
following:
(i) medical expenses described in Code Section 213(d) incurred by
the Participant, the Participant's spouse, or the Participant's dependents (as
described in Code Section 152) if such expenses can not be paid from any other
source;
(ii) purchase (excluding mortgage payments) of a principal residence
for the Participant;
(iii) payment of tuition for the next 12 months of post-secondary
education for the Participant, the Participant's spouse, or the Participant's
3
dependents who are claimed as such on the Participant's federal income tax
return;
(iv) the need to prevent the Participant's eviction from the
Participant's primary residence, or foreclosure on the mortgage of the
Participant's primary residence; or
(v) any other financial need which the Internal Revenue Service has
approved as a financial hardship which permits distributions to be made to
participants under the financial hardship provisions of the Company's Matched
Asset Plan.
(b) Notwithstanding subsection(a) above, a financial need shall not
constitute a Hardship unless it is for at least $1,000.00 (or the entire
principal amount of the Participant's Accounts, if less).
(c) Whether a Participant has incurred a Hardship shall be determined by
the Administrator in its discretion on the basis of all relevant facts and
circumstances and in accordance with nondiscriminatory and objective
standards, uniformly interpreted and consistently applied.
Section 1.17 Key Executive
- ------------ -------------
"Key Executive" shall mean any Employee of the Company who is an officer
or other key executive of the Company and who qualifies as a "highly
compensated employee or management employee" within the meaning of Title I of
ERISA.
Section 1.18 Key Executive Plan
- ------------ ------------------
"Key Executive Plan" shall mean the portion of this Plan which is
maintained or the benefit of the Company's Key Executives.
Section 1.19 Nonemployee Director
- ------------ --------------------
"Nonemployee Director" shall mean a member of the Board who is not an
Employee.
Section 1.20 Nonemployee Director Plan
- ------------ -------------------------
"Nonemployee Director Plan" shall mean the portion of this Plan which is
maintained for the benefit of the Company's Nonemployee Directors.
Section 1.21 Partial First Plan Year
- ------------ -----------------------
"Partial First Plan Year" shall mean that portion of the first Plan Year
of the Plan subject to its amendment and restatement effective as of September
30, 1995, which shall begin on September 30, 1995 and end on March 29, 1996.
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Section 1.22 Participant
- ------------ -----------
"Participant" shall mean any person who elects to participate in the Plan
as provided in Article II and who defers Qualified Compensation under the
Plan.
Section 1.23 Plan
- ------------ ----
"Plan" shall mean the Computer Sciences Corporation Deferred Compensation
Plan.
Section 1.24 Plan Year
- ------------ ---------
"Plan Year" shall mean the fiscal year of the Company.
Section 1.25 Predecessor Plan
- ------------ ----------------
"Predecessor Plan" shall mean the Computer Sciences Corporation
Nonqualified Deferred Compensation Plan as in effect and maintained by the
Company for the benefit of its Nonemployee Directors prior to the amendment
and restatement of the Plan effective as of September 30, 1995.
Section 1.26 Retirement
- ------------ ----------
"Retirement" shall mean, with respect to a Key Executive, a Separation from
Service of such Key Executive (a) on or after attainment of age sixty-two (62)
or (b) prior to attainment of age sixty-two (62) if the Chief Executive
Officer shall designate such Separation from Service as Retirement for
purposes of the Plan.
Section 1.27 Separation from Service
- ------------ -----------------------
(a) "Separation from Service" of a Key Executive shall mean the
termination of his or her employment with the Company by reason resignation,
discharge, death or Retirement. A leave of absence or sick leave authorized
by the Company in accordance with established policies, a vacation period or a
military leave shall not constitute a Separation from Service; provided,
however, that failure to return to work upon expiration of any leave of
absence, sick leave, military leave or vacation shall be considered a
resignation effective as of the date of expiration of such leave of absence,
sick leave, military leave or vacation.
(b) "Separation from Service" of a Nonemployee Director shall mean the
Nonemployee Director's ceasing to serve as a member of the Board for any
reason.
Section 1.28 Qualified Compensation
- ------------ ----------------------
(a) "Qualified Compensation" of a Key Executive shall mean the Key
Executive's annual bonus which may be payable to the Key Executive under the
Computer Sciences Corporation Annual Incentive Plan or such other bonus or
5
incentive compensation plan of the Company which may be designated from time
to time by the Administrator.
(b) "Qualified Compensation" of a Nonemployee Director shall mean the
retainer, consulting fees, committee fees and meeting fees which are payable
to the Nonemployee Director by the Company.
ARTICLE II
ELIGIBILITY
Section 2.1 Requirements for Participation
- ----------- ------------------------------
Any Eligible Key Executive and any Nonemployee Director shall be eligible
to be a Participant in the Plan.
Section 2.2 Deferral Election Procedure
- ----------- ---------------------------
For each Plan Year, the Administrator shall provide each Eligible Key
Executive and each Nonemployee Director with an Election Form on which such
person may elect to defer his or her Qualified Compensation under Article III.
Each such person who elects to defer Qualified Compensation under Article III
shall complete and sign the Election Form and return it to the Administrator.
Section 2.3 Content of Election Form
- ----------- ------------------------
Each Participant who elects to defer Qualified Compensation under the
Plan shall set forth on the Election Form specified by the Administrator:
(a) the amount of Qualified Compensation to be deferred under Article
III and the Participant's authorization to the Company to reduce his or her
Qualified Compensation by the amount of the deferred compensation,
(b) the length of time with respect to which the Participant elects to
defer the Deferred Compensation,
(c) the method under which the Participant's Deferred Compensation shall
be payable, and
(d) such other information, acknowledgments or agreements as may be
required by the Administrator.
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ARTICLE III
PARTICIPANTS' DEFERRALS
Section 3.1 Deferral of Qualified Compensation
- ----------- ----------------------------------
(a) Each Eligible Key Executive and Nonemployee Director may elect to
defer into his or her Account all or any portion of the Qualified Compensation
which would otherwise be payable to him or her for any Plan Year in which he
or she has not incurred a Separation from Service as of the first day of the
Plan Year in question. Such election shall be made by the Eligible Key
Executive or Nonemployee Director completing and delivering to the
Administrator his or her Election Form for such Plan Year no later than the
last day of the next preceding Plan Year, except (i) with respect to the
Partial First Plan Year, in which case such election shall be made not later
than September 29, 1995, and (ii) with respect to a person who first becomes
an Employee or Nonemployee Director during a Plan Year, which person may make
such election within 30 days after first becoming an Employee or Nonemployee
Director, respectively.
(b) Except as set forth in Sections 6.2 and 6.3 hereof, any such
election made by a Participant to defer Qualified Compensation shall be
irrevocable and shall not be amendable by the Participant.
Section 3.2 Deferral for Partial First Plan Year
- ----------- ------------------------------------
For the Partial First Plan Year, Participants may defer any or all of the
Qualified Compensation which is earned by them after September 29, 1995 and
before March 30, 1996. Deferral elections previously made by Nonemployee
Directors for the 1996 Plan Year shall only remain effective with respect to
Qualified Compensation earned prior to September 30, 1995.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
Section 4.1 Deferred Compensation Accounts
- ----------- ------------------------------
The Administrator shall establish and maintain for each Participant an
Account to which shall be credited the amounts allocated thereto under this
Article IV and from which shall be debited the Participant's distributions and
withdrawals under Articles V and VI.
Section 4.2 Crediting of Deferred Compensation
- ----------- ----------------------------------
Each Participant's Account shall be credited with an amount which is
equal to the amount of the Participant's Qualified Compensation which such
Participant
7
has elected to defer under Article III at the time such Qualified Compensation
would otherwise have been paid to the Participant.
Section 4.3 Crediting of Earnings
- ----------- ---------------------
Beginning on September 30, 1995 and subject to amendment by the Board,
for each Plan Year earnings shall be credited to each Participant's Account
(including the Accounts of Nonemployee Directors under the Predecessor Plan),
at a rate equal to 120% of the 120-month rolling average interest payable on
10-year United States Treasury Notes as of December 31 of the preceding Plan
Year, compounded annually. Earnings shall be credited on such valuation dates
as the Administrator shall determine.
Section 4.4 Applicability of Account Values
- ----------- -------------------------------
The value of each Participant's Account as determined as of a given date
under this Article, plus any amounts subsequently allocated thereto under this
Article and less any amounts distributed or withdrawn under Articles V or VI
shall remain the value thereof for all purposes of the Plan until the Account
is revalued hereunder.
Section 4.5 Vesting of Deferred Compensation Accounts
- ----------- -----------------------------------------
Subject to the possible reductions provided for in Section 6.2 and 6.3
with respect to certain Participant withdrawals, each Participant's interest
in his or her Account shall be 100% vested and non-forfeitable at all times.
Section 4.6 Assignments, Etc. Prohibited
- ----------- ----------------------------
No part of any Participant's Account shall be liable for the debts,
contracts or engagements of the Participant, or the Participant's
beneficiaries or successors in interest, or be taken in execution by levy,
attachment or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any rights to alienate, anticipate, commute,
pledge, incumber or assign any benefits or payments hereunder in any manner
whatsoever except to designate a beneficiary as provided in Section 5.3.
ARTICLE V
DISTRIBUTIONS OF DEFERRED COMPENSATION ACCOUNTS
Section 5.1 Distributions upon a Key Executive's Retirement and a
- ----------- -----------------------------------------------------
Nonemployee Director's Separation from Service
----------------------------------------------
(a) The Account of a Key Executive who incurs a Separation from Service
upon his or her Retirement, and the Account of a Nonemployee Director who
incurs a Separation from Service, in each case other than on account of death,
shall be
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paid to the Participant as specified in any election made by the Participant
pursuant to Section 5.4 hereof. Any remaining balance of the Participant's
Account shall be paid to the Participant, as specified by the Participant in
an election made pursuant to this Section 5.1, in a lump-sum distribution or
in approximately equal annual installments over 5, 10 or 15 years. Payment(s)
shall commence within thirty (30) days following the date of such Separation
from Service.
(b) At the time a Participant first elects to defer Qualified
Compensation under the Plan, he or she shall make an election pursuant to this
Section 5.1. Such election shall remain in effect and shall apply to the
Participant's total Account, as the same may increase or decrease from time to
time. An election pursuant to this Section 5.1 may be superseded by a
subsequent election, which subsequent election shall then apply to the
Participant's total Account, as the same may increase or decrease from time to
time. Notwithstanding the foregoing, no subsequent election pursuant to this
Section 5.1 shall be effective unless it is made at least 13 months prior to
the Participant's Separation from Service.
Section 5.2 Distributions upon a Key Executive's Pre-Retirement Separation
- ----------- --------------------------------------------------------------
from Service
------------
The Account of a Key Executive who incurs a Separation from Service prior
to his or her Retirement and other than on account of his or her death shall
be paid to the Participant in a lump-sum distribution within thirty (30) days
following the date of such Separation from Service, notwithstanding any
election to the contrary made by the Participant pursuant to Section 5.4
hereof.
Section 5.3 Distributions upon a Participant's Death
- ----------- ----------------------------------------
(a) Notwithstanding anything to the contrary in the Plan, the remaining
balance of the Account of a Participant who dies (i) shall be paid to the
persons and entities designated by the Participant as his or her beneficiaries
for such purpose and (ii) shall be paid in the manner set forth in this
Section 5.3. With respect to a Participant who does not incur a Separation
from Service prior to his or her death, such balance shall be paid, as
specified by the Participant in an election made pursuant to this Section 5.3,
in a lump-sum distribution or in approximately equal annual installments over
5, 10 or 15 years. With respect to a Participant who does incur a Separation
from Service prior to his or her death, such balance shall be paid, as
specified by the Participant in an election made pursuant to this Section 5.3,
in a lump-sum distribution or in approximately equal annual installments over
the remaining term of the 5, 10 or 15-year payment period elected pursuant to
Section 5.1 hereof. Payment(s) shall commence within thirty (30) days
following the date of death.
(b) At the time a Participant first elects to defer Qualified
Compensation under the Plan, he or she shall make an election pursuant to this
Section 5.3. Such election shall remain in effect and shall apply to the
Participant's total Account, as the same may increase or decrease from time to
time. An election pursuant to this
9
Section 5.3 may be superseded by a subsequent election, which subsequent
election shall then apply to the Participant's total Account, as the same may
increase or decrease from time to time. Notwithstanding the foregoing, no
subsequent election pursuant to this Section 5.3 shall be effective unless it
is made at least 13 months prior to the Participant's Separation from Service.
Section 5.4 Optional Distributions
- ----------- ----------------------
(a) At the time a Participant elects to defer Qualified Compensation for
any Plan Year, he or she may also elect, pursuant to this Section 5.4, to
receive a special, lump-sum distribution of any or all of the amount deferred
for such Plan Year on a date specified by the Participant in such election,
which date must be at least 24 months after the date of such election. Any
such special distribution shall be made within five (5) business days after
the date therefor specified by the Participant, unless the Participant shall
have died on or prior to such date, in which case no such special distribution
shall be made.
(b) An election pursuant to this Section 5.4 may be superseded by one
subsequent election; provided, however, that such subsequent election shall
not be effective unless: (i) it is irrevocable; (ii) it is made at least 13
months prior to the Participant's Separation from Service and at least 24
months prior to the date upon which the special distribution will be made; and
(iii) the date of the special distribution specified in the subsequent
election is earlier than the date specified in the initial election.
(c) Notwithstanding the foregoing, an election pursuant to this Section
5.4 with respect to the Partial First Plan Year may be superseded by two
subsequent elections; provided, however, that: (i) the first such subsequent
election shall not be effective unless it is made prior to March 30, 1996 and
at least 13 months prior to the Participant's Separation from Service and at
least 24 months prior to the date upon which the special distribution will be
made; and (ii) the second such subsequent election satisfies all the
requirements set forth in paragraph (b)(i), (ii) and (iii) of this Section
5.4.
Section 5.5 Applicable Taxes
- ----------- ----------------
All distributions under the Plan shall be subject to withholding for all
amounts which the Company is required to withhold under federal, state or
local tax law.
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ARTICLE VI
WITHDRAWALS FROM DEFERRED COMPENSATION ACCOUNTS
Section 6.1 Hardship Withdrawals from Accounts
- ----------- ----------------------------------
A Participant may make a withdrawal from the Participant's Account on
account of the Participant's Hardship, subject to all of the following
requirements:
(a) The Participant's withdrawal shall not exceed the amount which is
necessary to satisfy the Hardship;
(b) The denial of the Participant's Hardship withdrawal request would
result in severe financial hardship to the Participant; and
(c) The Participant has not received a Hardship withdrawal within the 12
month period preceding the withdrawal.
Section 6.2 Withdrawals after a Change in Control
- ----------- -------------------------------------
At any time within three years after the occurrence of a Change in
Control, a Key Executive may elect to withdraw all or any part of the Key
Executive's Account by delivering a written election to such effect to the
Administrator, provided, however, that if a Key Executive makes such an
election, (i) the Key Executive shall forfeit, and the Key Executive's Account
shall be debited with, an amount equal to 5% of the amount of the withdrawal
distribution, (ii) the Key Executive's deferral election for the Plan Year in
which the withdrawal distribution occurs shall be terminated with respect to
any Qualified Compensation which has not yet been deferred and (iii) the Key
Executive shall not be permitted to defer Qualified Compensation under the
Plan for the two Plan Years immediately following the Plan Year of the
withdrawal distribution.
Section 6.3 Voluntary Withdrawals
- ----------- ---------------------
At any time, a Participant may elect to withdraw all or any part of the
Participant's Account by delivering a written election to such effect to the
Administrator, provided, however, that if a Participant makes such an
election, (i) the Participant shall forfeit, and the Participant's Account
shall be debited with, an amount equal to 10% of the amount of the withdrawal
distribution, (ii) the Participant's deferral election for the Plan Year in
which the withdrawal distribution occurs shall be terminated with respect to
any Qualified Compensation which has not yet been deferred and (iii) the
Participant shall not be permitted to defer Qualified Compensation under the
Plan for the two Plan Years immediately following the year of the withdrawal
distribution.
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Section 6.4 Applicable Taxes
- ----------- ----------------
All withdrawals under the Plan shall be subject to withholding for all
amounts which the Company is required to withhold under federal, state or
local tax law.
ARTICLE VII
ADMINISTRATIVE PROVISIONS
Section 7.1 Administrator's Duties and Powers
- ----------- ---------------------------------
The Administrator shall conduct the general administration of the Plan in
accordance with the Plan and shall have all the necessary power, authority and
discretion to carry out that function. Among its necessary powers and duties
are the following:
(a) To delegate all or part of its function as Administrator to others
and to revoke any such delegation.
(b) To determine questions of eligibility of Participants and their
entitlement to benefits, subject to the provisions of Section 7.11.
(c) To select and engage attorneys, accountants, actuaries, trustees,
appraisers, brokers, consultants, administrators, physicians, or other persons
to render service or advice with regard to any responsibility the
Administrator or the Board has under the Plan, or otherwise, to designate such
persons to carry out fiduciary responsibilities under the Plan, and (together
with the Committee, the Company, the Board and the officers and Employees of
the Company) to rely upon the advice, opinions or valuations of any such
persons, to the extent permitted by law, being fully protected in acting or
relying thereon in good faith.
(d) To interpret the Plan and any relevant facts for purpose of the
administration and application of the Plan, in a manner not inconsistent with
the Plan or applicable law and to amend or revoke any such interpretation.
(e) To conduct claims procedures as provided in Section 7.11.
Section 7.2 Limitations Upon Powers
- ----------- -----------------------
The Plan shall be uniformly and consistently administered, interpreted
and applied with regard to all Participants in similar circumstances. The
Plan shall be administered, interpreted and applied fairly and equitably and
in accordance with the specified purposes of the Plan.
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Section 7.3 Final Effect of Administrator Action
- ----------- ------------------------------------
Except as provided in Section 7.11, all actions taken and all
determinations made by the Administrator in good faith shall be final and
binding upon all Participants, the Company and any person interested in the
Plan.
Section 7.4 Committee
- ----------- ---------
(a) The Administrator may, but need not, appoint a Committee consisting
of two or more members to hold office during the pleasure of the
Administrator. The Committee shall have such powers and duties as are
delegated to it by the Administrator. Committee members shall not receive
payment for their services as such.
(b) Appointment of Committee members shall be effective upon filing of
written acceptance of appointment with the Administrator.
(c) A Committee member may resign at any time by delivering written
notice to the Administrator.
(d) Vacancies in the Committee shall be filled by the Administrator.
(e) The Committee shall act by a majority of its members in office;
provided, however, that the Committee may appoint one of its members or a
delegate to act on behalf of the Committee on matters arising in the ordinary
course of administration of the Plan or on specific matters.
Section 7.5 Indemnification by the Company; Liability Insurance
- ----------- ----------------------------------------------------
The Company shall pay or reimburse any of the Company's officers,
directors, Committee members or Employees who are fiduciaries with respect to
the Plan for all expenses incurred by such persons in, and shall indemnify and
hold them harmless from, all claims, liability and costs (including reasonable
attorneys' fees) arising out of the good faith performance of their duties
under the Plan. The Company may obtain and provide for any such person, at
the Company's expense, liability insurance against liabilities imposed on such
person by law.
Section 7.6 Recordkeeping
- ----------- -------------
(a) The Administrator shall maintain suitable records of each
Participant's Account which, among other things, shall show separately
deferrals and the earnings credited thereon, as well as distributions and
withdrawals therefrom and records of its deliberations and decisions.
(b) The Administrator shall appoint a secretary, and at its discretion,
an assistant secretary, to keep the record of proceedings, to transmit its
decisions, instructions, consents or directions to any interested party, to
execute and file, on
13
behalf of the Administrator, such documents, reports or other matters as may
be necessary or appropriate under ERISA and to perform ministerial acts.
(c) The Administrator shall not be required to maintain any records or
accounts which duplicate any records or accounts maintained by the Company.
Section 7.7 Statement to Participants
- ----------- -------------------------
By March 15 of each year, the Administrator shall furnish to each
Participant a statement setting forth the value of the Participant's Account
as of the preceding December 31 and such other information as the
Administrator shall deem advisable to furnish.
Section 7.8 Inspection of Records
- ----------- ---------------------
Copies of the Plan and records of a Participant's Account shall be open
to inspection by the Participant or the Participant's duly authorized
representatives at the office of the Administrator at any reasonable business
hour.
Section 7.9 Identification of Fiduciaries
- ----------- -----------------------------
The Administrator shall be the named fiduciary of the Plan and, as
permitted or required by law, shall have exclusive authority and discretion to
operate and administer the Plan.
Section 7.10 Procedure for Allocation of Fiduciary Responsibilities
- ------------ ------------------------------------------------------
(a) Fiduciary responsibilities under the Plan are allocated as follows:
(i) The sole duties, responsibilities and powers allocated to the
Board, any Committee and any fiduciary shall be those expressly provided in
the relevant Sections of the Plan.
(ii) All fiduciary duties, responsibilities, and powers not allocated
to the Board, any Committee or any fiduciary, are hereby allocated to the
Administrator, subject to delegation.
(b) Fiduciary duties, responsibilities and powers under the Plan may be
reallocated among fiduciaries by amending the Plan in the manner prescribed in
Section 8.6, followed by the fiduciaries' acceptance of, or operation under,
such amended Plan.
Section 7.11 Claims Procedure
- ------------ ----------------
(a) No distributions under this Plan to a Participant, former
Participant or Participant's beneficiary shall be made except upon a claim
filed in writing with the
14
Committee, if in existence, or otherwise to a claims official designated by
the Administrator.
(b) If the Committee or claims official wholly or partially denies the
claim, it or he shall, within a reasonable period of time after receipt of the
claim, provide the claimant with written notice of such denial, setting forth,
in a manner calculated to be understood by the claimant:
(i) the specific reason or reasons for such denial;
(ii) specific reference to pertinent Plan provisions on which the
denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(iv) an explanation of the Plan's claims review procedure.
(c) The Administrator shall provide each claimant with a reasonable
opportunity to appeal a denial of a claim to the Chief Executive Officer or
his or her authorized delegate for a full and fair review. The claimant or
his or her duly authorized representative:
(i) may request a review upon written application to the Chief
Executive Officer or his authorized delegate (which shall be filed with the
Committee or claims official);
(ii) may review pertinent documents; and
(iii) may submit issues and comments in writing.
(d) The Chief Executive Officer or his authorized delegate may establish
such time limits within which a claimant may request review of a denied claim
as are reasonable in relation to the nature of the benefit which is the
subject of the claim and to other attendant circumstances but which shall be
not less than sixty days after receipt by the claimant of written notice of
denial of his or her claim.
(e) The decision by the Chief Executive Officer or his delegate upon
review of a claim shall be made not later than sixty days after receipt by the
chief Executive Officer or his authorized delegate of the request for review,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later
than one hundred twenty days after receipt of such request for review.
(f) The decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated to be
understood by the
15
claimant with specific references to the pertinent Plan provisions on which
the decision is based.
(g) To the extent permitted by law, the decision of the Committee or
claims official, if no appeal is filed, or the decision of the Chief Executive
Officer or his delegate on review, when warranted on the record and reasonably
based on the law and the provisions of the Plan, shall be final and binding on
all parties.
Section 7.12 Conflicting Claims
- ------------ ------------------
If the Administrator is confronted with conflicting claims concerning a
Participant's Account, the Administrator may interplead the claimants in an
action at law, or in an arbitration conducted in accordance with the rules of
the American Arbitration Association, as the Administrator shall elect in its
sole discretion, and in either case, the attorneys' fees, expenses and costs
reasonably incurred by the Administrator in such proceeding shall be paid from
the Participant's Account.
Section 7.13 Service of Process
- ------------ ------------------
The Secretary of Computer Sciences Corporation is hereby designated as
agent of the Plan for the service of legal process.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Termination of the Plan
- ----------- -----------------------
(a) While the Plan is intended as a permanent program, the Board shall
have the right at any time to declare the Plan terminated completely as to the
Company or as to any group, division or other operational unit thereof or as
to any affiliate thereof.
(b) Discharge or layoff of any Employees without such a declaration
shall not result in a termination of the Plan.
(c) In the event of any termination, the Board, in its sole and absolute
discretion may elect to:
(i) maintain Participants' Accounts, payment of which shall be made
in accordance with Articles V and VI; or
(ii) liquidate the portion of the Plan attributable to each
Participant as to whom the Plan is terminated and distribute each such
Participant's Account in a lump sum or pursuant to any method which is at
least as rapid as the distribution method elected by the Participant under
Section 5.4.
16
Section 8.2 Limitation on Rights of Participants
- ----------- ------------------------------------
The Plan is strictly a voluntary undertaking on the part of the Company
and shall not constitute a contract between the Company and any Employee or
any Nonemployee Director, or consideration for, or an inducement or condition
of, the employment of an Employee or service of a Nonemployee Director.
Nothing contained in the Plan shall give any Employee or Nonemployee Director
the right to be retained in the service of a Company or to interfere with or
restrict the right of the Company, which is hereby expressly reserved, to
discharge or retire any Employee or Nonemployee Director, except as otherwise
provided by a written employment agreement between the Company and the
Employee or Nonemployee Director, at any time without notice and with or
without cause. Inclusion under the Plan will not give any Employee or
Nonemployee Director any right or claim to any benefit hereunder except to the
extent such right has specifically become fixed under the terms of the Plan.
The doctrine of substantial performance shall have no application to
Employees, Nonemployee Directors, Participants or any other persons entitled
to payments under the Plan.
Section 8.3 Consolidation or Merger; Adoption of Plan by Other Companies
- ----------- ------------------------------------------------------------
(a) In the event of the consolidation or merger of the Company with or
into any other entity, or the sale by the Company of substantially all of its
assets, the resulting successor may continue the Plan by adopting it in a
resolution of its Board of Directors. If within 90 days from the effective
date of such consolidation, merger or sale of assets, such successor
corporation does not adopt the Plan, the Plan shall be terminated in
accordance with Section 8.1.
(b) There shall be no merger or consolidation with, or transfer of the
liabilities of the Plan to, any other plan unless each Participant in the Plan
would have, if the combined or successor plans were terminated immediately
after the merger, consolidation, or transfer, an account which is equal to or
greater than his or her corresponding Account under the Plan had the Plan been
terminated immediately before the merger, consolidation or transfer.
Section 8.4 Errors and Misstatements
- ----------- ------------------------
In the event of any misstatement or omission of fact by a Participant to
the Administrator or any clerical error resulting in payment of benefits in an
incorrect amount, the Administrator shall promptly cause the amount of future
payments to be corrected upon discovery of the facts and shall cause the
Company to pay the Participant or any other person entitled to payment under
the Plan any underpayment in cash in a lump sum, or to recoup any overpayment
from future payments to the Participant or any other person entitled to
payment under the Plan in such amounts as the Administrator shall direct, or
to proceed against the Participant or any other person entitled to payment
under the Plan for recovery of any such overpayment.
17
Section 8.5 Payment on Behalf of Minor, Etc.
- ----------- --------------------------------
In the event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Administrator, is considered by reason
of physical or mental condition to be unable to give a valid receipt therefor,
the Administrator may direct that such payment be made to any person found by
the Administrator in its sole judgment, to have assumed the care of such minor
or other person. Any payment made pursuant to such determination shall
constitute a full release and discharge of the Company, the Board, the
Administrator, the Committee and their officers, directors and employees.
Section 8.6 Amendment of Plan
- ----------- -----------------
The Plan may be wholly or partially amended by the Board from time to
time, in its sole and absolute discretion, including prospective amendments
which apply to amounts held in a Participant's Account as of the effective
date of such amendment and including retroactive amendments necessary to
conform to the provisions and requirements of ERISA or the Code or regulations
pursuant thereto; provided, however, that no amendment shall decrease the
amount of any Participant's Account as of the effective date of such
amendment.
Section 8.7 No Funding
- ----------- ----------
All benefits payable under the Plan will be paid from the general assets
of the Company and no Participant or beneficiary shall have any claim against
any specific assets of the Company.
Section 8.8 Governing Law
- ----------- -------------
The Plan shall be construed, administered and governed in all respects
under and by the laws of the State of California, except to the extent such
laws may be preempted by ERISA.
Section 8.9 Pronouns and Plurality
- ----------- ----------------------
The masculine pronoun shall include the feminine pronoun, and the
singular the plural where the context so indicates.
Section 8.10 Titles
- ------------ ------
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
18
Section 8.11 References
- ------------ ----------
Unless the context clearly indicates to the contrary, a reference to a
statute, regulation or document shall be construed as referring to any
subsequently enacted, adopted or executed statute, regulation or document.