EXHIBIT 10.11
COMPUTER SCIENCES CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
Purpose
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The purpose of this Supplemental Executive Retirement Plan ("Supplemental
Plan") is to provide retirement benefits to designated officers and key
executives of Computer Sciences Corporation (the "Company") in addition to
retirement benefits that may be payable under the Computer Sciences
Corporation Employee Pension Plan, and in addition to any other retirement
plan (other than the social security system to the extent provided herein)
under which benefits may be payable with respect to such person.
It is intended that this Supplemental Plan be a plan "for a select group
of management or highly compensated employees" as set forth in Section 201(2)
of the Employee Retirement Income Security Act of 1974.
Benefits under this Supplemental Plan shall be payable solely from the
general assets of the Company and no Participant or other person shall be
entitled to look to any source for payment of such benefits other than the
general assets of the Company.
ARTICLE II
Effective Date/Restatement Date
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The Supplemental Plan was effective as of September 1, 1985. It is hereby
amended and restated effective November 4, 1996.
ARTICLE III
Participants
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No person shall be a Participant in this Supplemental Plan unless (a)
such individual is specifically designated as such in a written instrument
executed by the Chief Executive Officer of the Company (the "Chief Executive
Officer"), and (b) such individual has consented to be governed by the terms
of this Supplemental Plan by execution of a written instrument in form
satisfactory to the Company.
A person shall cease to be a Participant in this Supplemental Plan in the
event of (a) a Plan amendment having such effect, or (b) the occurrence of an
event described in this Supplemental Plan which terminates such participation,
or (c) the Chief Executive Officer notifies such person, in writing, of the
discontinuance of
such person's participation pursuant to Article XVIII of this Supplemental
Plan. In determining whether any person shall commence or cease to be a
Participant herein, the Chief Executive Officer, acting in such capacity,
shall have complete and unfettered discretion.
ARTICLE IV
Retirement Benefits
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The amount of retirement benefit payable to each Participant upon
Separation from Service (as defined in paragraph (d) below) shall be as
determined in this Article IV.
(a) A Participant who is entitled to receive a benefit under the
Computer Sciences Corporation Employee Pension Plan ("Pension Plan"), shall be
entitled to receive his Excess Benefit under this Supplemental Plan upon being
fully vested under the Pension Plan. The Excess Benefit is the additional
monthly amount which the Participant would otherwise be entitled to receive
under the Pension Plan as if the Participant had elected the normal form of
life annuity payment option under the Pension Plan except for the limitations
imposed by Sections 401(a)(17) and 415 of the Internal Revenue Code, as
amended. In addition to the benefit described in this paragraph (a), a benefit
as described in paragraph (b) following shall be payable to the Participant.
(b) Each Participant, upon Separation from Service on or after
attainment of age sixty-two (62) (the "Retirement Date"), shall receive an
amount as determined under this paragraph (b) which is payable monthly in the
form of a life annuity. The amount payable shall be equal to one-twelfth
(1/12) of fifty percent (50%) of the Participant's Average Base Salary Rate
(as defined in paragraph (d) below) reduced by the amount determined under
paragraph (c) below and, as applicable, paragraph (e) below.
(c) The amount determined under this paragraph (c) shall generally be
equal to the primary social security benefit paid or payable to the
Participant at the time benefits commence under this Supplemental Plan,
whether or not the Participant is denied social security benefits because of
other income or voluntarily forgoes social security income. However, where a
Participant commences to receive benefits under this Supplemental Plan prior
to the date that he is entitled to commence receiving social security benefits
(currently age sixty-two (62)), his benefits under this Plan shall be reduced,
by the amount of social security benefits it is estimated he would be entitled
to receive monthly. The estimated social security benefit will be calculated
based on the Participant's compensation through his Separation from Service
date as though he were age sixty-two (62) on such date, and in accordance with
social security rules in effect at the time of his Separation from Service.
If the Participant has qualified for a special early separation benefit
pursuant to paragraph (b) of Article V, then a five percent (5%)
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annual reduction factor, with proportionate fractional reduction for periods
of fewer than twelve (12) months, shall be applied to the estimated social
security benefit for the period between the date of the Participant's
Separation from Service and the date he is expected to attain age sixty-two
(62). By way of example, if a Participant otherwise entitled to benefits
commencing at age sixty-two (62) retires at age sixty (60) and qualifies for a
special early separation benefit pursuant to paragraph (b) of Article V and
the Participant's social security benefit is assumed to be $8,000 a year at
the projected age of sixty-two (62), then the estimated annual social security
benefit determined under this paragraph (c) will be $7,200, which is the
$8,000 reduced at 5% per year for two years, or 10% .
(d) The term "Base Salary Rate" means the annual salary rate of a
Participant exclusive of overtime, bonus, incentive or any other type of
special compensation. The term "Average Base Salary Rate" means the average of
the highest three (3) of the last five (5) Base Salary Rates of a Participant
which are the Base Salary Rates in effect on his Retirement Date and on the
same day and month for each of the four (4) years (or the period of Continuous
Service if fewer than four (4) years) immediately preceding the Retirement
Date.
Unless otherwise determined in writing with respect to a Participant by
the Chief Executive Officer, the term "Continuous Service" means the period of
service without interruption of a person commencing as of the date of hire of
such person by the Company or an Affiliate and ending on the date of
separation from service for any reason from the Company and all Affiliates
("Separation from Service"). The term "Affiliate" means a corporation or other
entity of which fifty-one percent (51%) or more of the capital stock or
capital or profits interest (in the case of a noncorporate entity) is directly
or indirectly owned by the Company. A medical leave of absence not exceeding
twelve (12) months authorized by a Company written policy or any other leave
of absence authorized by a Company written policy or approved in writing by
the Chief Executive Officer shall not be deemed an interruption in Continuous
Service or a Separation from Service.
In the event the Company acquires a corporation or other entity
("Acquisition"), and any employee of the Acquisition, by written determination
of the Chief Executive Officer of the Company, becomes a Participant in the
Supplemental Plan, such Participant's period of Continuous Service shall
commence no sooner than the date the Acquisition becomes an Affiliate of the
Company unless the Company's Chief Executive Officer otherwise determines and
so confirms in writing.
(e) If upon Separation from Service on or after attaining age sixty-two
(62), or upon the granting of a special early separation benefit pursuant to
paragraph (b) of Article V, a Participant has fewer than twelve (12) years of
Continuous Service, the benefit otherwise payable under this Supplemental Plan
shall be proportionately reduced, except for the benefit payable under
paragraph (a)
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of this Article IV which shall not be reduced. By way of example, if a
Participant otherwise entitled to benefits hereunder commencing at age sixty-
two (62) has completed only ten (10) years of Continuous Service upon
attainment of age sixty-two (62), such Participant's benefit shall be 10/12,
or 83.33%, of the benefit otherwise payable hereunder.
Unless expressly determined to the contrary in writing by the Chief
Executive Officer, no period of service completed by a person after attainment
of age sixty-five (65) and no adjustment to any person's Base Salary Rate
which occurs after attainment of age sixty-five (65) shall be taken into
account in computing benefits hereunder.
ARTICLE V
Eligibility for Benefits
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(a) Participants shall become eligible to commence receiving retirement
benefits under this Supplemental Plan after Separation from Service on or
after attaining age sixty-two (62) and such benefits shall be calculated in
accordance with the provisions of Article IV. Except as otherwise provided in
paragraph (a) of Article IV and in Articles Vll, IX and X, no Participant in
this Supplemental Plan shall have any vested interest in or right to receive a
benefit hereunder until attainment of the age of sixty-two (62). Unless
otherwise determined in writing by the Chief Executive Officer, any
interruption in the Continuous Service of a Participant herein prior to the
attainment of age sixty-two (62) shall terminate the participation in this
Supplemental Plan of such Participant, and no benefit shall be payable to or
with respect to such Participant.
(b) In the sole and unfettered discretion of the Chief Executive
Officer, a Participant whose Separation from Service occurs prior to
attainment of age sixty-two (62) may qualify for a special early separation
benefit, payable monthly as calculated in accordance with the provisions of
Article IV, except as follows:
(i) For purposes of determining the Participant's Base Salary Rate,
the Average Base Salary Rate and the number of years of Continuous Service
completed by the Participant, the Participant's date of Separation from
Service shall apply instead of the date of the Participant's attainment of age
sixty-two (62); and
(ii) For each twelve (12) month period by which the date of
commencement of the Participant's benefit precedes the Participant's sixty-
second (62nd) birthday, the benefit otherwise payable shall be reduced by five
percent (5%), except for the benefit payable under paragraph (a) of Article IV
which shall not be reduced. Proportionate fractional reduction shall be used
for periods of fewer than twelve (12) months.
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ARTICLE VI
Form of Benefit Payments
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(a) Except as provided in Article Vll, benefits payable based on the
calculations in Article IV of this Supplemental Plan shall be paid monthly for
the life-time of the Participant (unless an optional form is selected under
paragraphs (b) or (c) of this Article Vl). Upon the death of the Participant,
benefits shall continue to be paid to the Participant's spouse for the
lifetime of such spouse at the rate of fifty percent (50%) of Participant's
benefit, provided certain conditions are met. The conditions of such Spousal
Benefit are (1) that the spouse shall be married to the Participant as of the
date of the Participant's Separation from Service and (2) the spouse shall be
no more than five years younger than the Participant. In the event the spouse
is more than five years younger than the Participant, the Participant may
elect to receive benefit payments in the form of a joint and survivor option
as described in paragraph (c) following.
(b) Any Participant, who before September 1, 1993 has commenced to
receive benefits and has not made a written election to receive an annuity
pursuant to paragraph (a) preceding or paragraph (c) following, shall be
entitled to one hundred twenty (120) monthly benefit payments in the amount
specified in paragraph (b) of Article IV preceding and a life annuity of the
Excess Benefit as defined in paragraph (a) of Article IV preceding. If a
Participant, who before September 1, 1993, has commenced to receive benefits
and has not made a written election to receive an annuity pursuant to
paragraph (a) preceding or paragraph (c) following, dies after Separation from
Service and before receiving one hundred and twenty (120) monthly benefit
payments, the remainder of the one hundred and twenty (120) monthly benefit
payments shall be made to the Participant's designated beneficiary or, if no
such beneficiary is then living or no such beneficiary can be located, to the
Participant's estate. In the event a Participant has made a written election,
prior to September 1, 1993, to receive an annuity pursuant to paragraph (a)
preceding or paragraph (c) following, no benefit shall be payable under this
paragraph (b), except that any Excess Benefit under the Pension Plan, as
provided in paragraph (a) of Article IV, shall be payable at the rate of fifty
percent (50%) thereof to the Participant's spouse.
(c) In the event that the Participant's spouse is more than five years
younger than Participant, at any time prior to the later of September 1, 1993
or the commencement of benefits under this Supplemental Plan, a Participant
may, in lieu of receiving benefits in the form described in paragraph (a) of
this Article Vl, elect to receive benefit payments under this Supplemental
Plan in the form of a joint and survivor option providing monthly benefits for
the lifetime of the Participant with a stipulated percentage of such amount
continued after the Participant's death to the spouse to whom the Participant
is married as of the date of the Participant's Separation from Service, for
the lifetime of such spouse. The amount of monthly
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payments available under this option shall be determined by reference to
factors such as the Participant's life expectancy, the life expectancy of the
Participant's spouse, prior benefits received under the Supplemental Plan, and
the percentage of the Participant's monthly benefit which is continued after
the Participant's death to the Participant's spouse, so that the value of the
joint and survivor option is the actuarial equivalent of the benefits
otherwise payable under paragraph (a) (or paragraph (b) if the Participant has
elected coverage under paragraph (b) preceding) of this Article Vl inclusive
of the Participant and the spousal fifty percent (50%) survivor benefits,
which shall be calculated assuming the Participant's spouse was exactly five
years younger than Participant. In determining the monthly amount payable
under the joint and survivor option with respect to any Participant, the
Company may rely upon such information as it, in its sole discretion, deems
reliable, including but not limited to, the opinion of an enrolled actuary or
annuity purchase rates quoted by an insurance company licensed to conduct an
insurance business in the State of California. The election of a joint and
survivor option is irrevocable after benefit payments have commenced, and the
monthly amount payable during the lifetime of the Participant shall in no
event be adjusted by reason of the death of the Participant's spouse prior to
the death of the Participant, or by reason of the dissolution of the marriage
between the Participant and such spouse, or for any other reason.
ARTICLE VII
Pre-retirement Death Benefits
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In the event of the death of a Participant hereunder during a period of
Continuous Service and participation in this Supplemental Plan, the
beneficiary or the spouse of the Participant shall be entitled to benefits as
provided below in paragraphs (a) and (b):
(a) Participant's spouse shall be entitled to a fifty percent (50%) or
the actuarial equivalent spousal benefit (as determined pursuant to Article
Vl, paragraphs (a) or (c), as applicable), attributable to Participant's
Excess Benefit under the Pension Plan provided the Participant is entitled to
receive a benefit under the Pension Plan.
(b) At the written election of the Participant, either a benefit under
paragraph (i) below or a benefit under paragraph (ii) below shall be paid by
the Company. Such election shall be signed by the Participant and notarized
and, if the Participant is married at the time of election, the election must
also be signed by the Participant's spouse and notarized. The latest election
on file in the Company's records shall be controlling.
(i) A lump sum death benefit shall be payable by the Company to the
Participant's designated beneficiary or, if no such beneficiary is then living
or no such beneficiary can be located, to the Participant's estate.
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The amount of such death benefit shall be two (2) times the Participant's Base
Salary Rate in effect on the date of the Participant's death. On the written
request of a beneficiary but subject to the approval in writing of the Chief
Executive Officer, the amount payable under this paragraph (b)(i) may be paid
to a beneficiary in monthly or other installments over a period not exceeding
one hundred and twenty (120) months.
(ii) Participant's spouse shall receive a spousal fifty percent (50%)
or the actuarial equivalent spousal benefit (as determined pursuant to Article
Vl, paragraphs (a) or (c), as applicable), as provided for in paragraph (a)
preceding and in Article IV and Article Vl. In the event a Participant is not
married at the time of Participant's death and the Participant has elected the
fifty percent (50%) spousal benefit, a lump sum death benefit shall be payable
in accordance with paragraph (b)(i) preceding.
No benefits shall be payable under this Article Vll if the Participant's
death occurs as a result of an act of suicide within twenty-five (25) months
after commencement of participation in this Supplemental Plan.
ARTICLE VIII
No Disability Benefits
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No disability benefit is payable under this Supplemental Plan.
ARTICLE IX
Right to Amend, Modify, Suspend or Terminate Plan
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By action of the Company's Board of Directors, the Company may amend,
modify, suspend or terminate this Supplemental Plan without further liability
to any employee or former employee or any other person. Notwithstanding the
preceding sentence, this Supplemental Plan may not be amended, modified,
suspended or terminated as to a Participant whose Separation from Service has
occurred and who is entitled to receive or has commenced to receive benefits
under this Supplemental Plan, without the express written consent of such
Participant or, if deceased, such Participant's designated beneficiary or, if
no beneficiary is then living or if no beneficiary can be located, such
Participant's legal representative.
If within three (3) years following a Change in Control (as defined in
Article X) this Supplemental Plan is amended, modified, suspended or
terminated as to all Participants or as to any Participant who was a
Participant prior to such Change in Control, such Participant(s) shall become
fully vested in benefits accrued under this Supplemental Plan as of the date
of such amendment, modification,
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suspension or termination taking into account Continuous Service to such date
and the Average Base Salary Rate of the Participant(s) as of such date. Upon
any subsequent Separation from Service, such Participant(s) shall be entitled
immediately to receive benefits under Articles IV, V, Vl, Vll and X, as
applicable, as such Articles were in effect on the date of such Change in
Control, without regard to the approval of the Chief Executive Officer or any
other person(s).
ARTICLE X
Change in Control
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The term "Change in Control" means, after the effective date of this
Supplemental Plan, (a) the acquisition by any person, entity or group (as
defined in Section 13(d)3 of the Securities Exchange Act of 1934, as amended)
as beneficial owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
then outstanding securities of the Company, (b) a change during any period of
two (2) consecutive years of a majority of the Board of Directors 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 the Company, (d) a merger, consolidation,
reorganization or other business combination to which the Company is a party
and the consummation of which results in the outstanding voting securities of
the Company being exchanged for or converted into cash, property and/or
securities not issued by the Company, or (e) any other event constituting a
change in control of the Company for purposes of Schedule 14A of Regulation
14A under the Securities Exchange Act of 1934.
In the event a Participant who was a Participant as of the date of a
Change in Control either (a) has a voluntary Separation from Service for any
reason (including the death of the Participant) more than twelve (12) full
calendar months after, but within thirty-six (36) full calendar months
following, such Change in Control, or (b) has an involuntary Separation from
Service for any reason within thirty-six full calendar months following such
Change in Control, such Participant shall be entitled to receive immediately
upon such Separation from Service benefits hereunder in accordance with
Articles IV, Vl and Vll, as applicable, without regard to approval by the
Chief Executive Officer or any other person(s). Such benefits shall be
calculated as if, on the date of such Separation from Service, the Participant
(i) had completed a number of years of Continuous Service equal to the greater
of twelve (12) or the actual number of years of his or her Continuous Service,
and (ii) had attained an age equal to the greater of sixty-two (62) or his or
her actual age.
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ARTICLE XI
No Assignment
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Benefits under this Supplemental Plan may not be assigned or alienated
and shall not be subject to the claims of any creditor.
ARTICLE XII
Administration
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This Supplemental Plan shall be administered by the Chief Executive
Officer or by such other person or persons to whom the Chief Executive Officer
may delegate functions hereunder. With respect to all matters pertaining to
this Supplemental Plan, the determination of the Chief Executive Officer or
his designated delegate shall be conclusive and binding. The Chief Executive
Officer shall be eligible to participate in this Supplemental Plan in the same
manner as any other employee; provided, however, that the designation of the
Chief Executive Officer as a Participant and any other action provided herein
with respect to the Chief Executive Officer's participation shall be taken by
the Compensation Committee of the Board of Directors of the Company.
ARTICLE XIII
Release
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In connection with any benefit or benefit payment under this Supplemental
Plan, or the designation of any beneficiary or any election or other action
taken or to be taken under the Supplemental Plan by any Participant or any
other person, the Company, acting through its Chief Executive Officer or his
delegate, may require such consents or releases as are reasonable under the
circumstances, and further may require any such designation, election or other
action to be in writing and in form reasonably satisfactory to the Chief
Executive Officer or his delegate.
ARTICLE XIV
No Waiver
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The failure of the Company, the Chief Executive Officer or any other
person acting on behalf thereof to demand a Participant or other person
claiming rights with respect to a Participant to perform any act which such
person is or may be required to perform hereunder shall not constitute a
waiver of such requirement or a waiver of the right to require such act. The
exercise of or failure to exercise any discretion reserved to the Company, its
Chief Executive Officer or his delegate, to grant or deny any benefit to any
Participant or other person under this Supplemental Plan shall in no way
require the Company, its Chief Executive Officer
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or his delegate to similarly exercise or fail to exercise such discretion with
respect to any other Participant.
ARTICLE XV
No Contract
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This Supplemental Plan is strictly a voluntary undertaking on the part of
the Company and shall not be deemed to constitute a contract or part of a
contract between the Company (or an Affiliate) and any employee or other
person, nor shall it be deemed to give any employee the right to be retained
for any specified period of time in the employ of the Company (or an
Affiliate) or to interfere with the right of the Company (or an Affiliate) to
discharge or retire any employee at any time, nor shall this Supplemental Plan
interfere with the right of the Company (or an Affiliate) to establish the
terms and conditions of employment of any employee.
ARTICLE XVI
Indemnification
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The Company shall defend, indemnify and hold harmless the Officers and
Directors of the Company acting in their capacity as such (and not as
Participants herein) from any and all claims, expenses and liabilities arising
out of their actions or failure to act hereunder, excluding fraud or willful
misconduct.
ARTICLE XVII
Claim Review Procedure
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To the extent required by Section 503 of the Employee Retirement Income
Security Act of 1974, a reasonable claim review procedure shall be established
by the Company.
ARTICLE XVIII
Termination of Benefits and Participation
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Prior, but only prior to a Change in Control, the retirement benefits
payable to any Participant under this Supplemental Plan, and the participation
of such Participant in this Supplemental Plan, may be terminated if in the
judgment of the Chief Executive Officer, upon the advice of counsel, such
Participant, directly or indirectly:
(a) breaches any obligation to the Company under any agreement relating
to assignment of inventions, disclosure of information or data, or similar
matters; or
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(b) competes with the Company, or renders competitive services (as a
director, officer, employee, consultant or otherwise) to, or owns more than a
5% interest in, any person or entity that competes with the Company; or
(c) solicits, diverts or takes away any person who is an employee of the
Company or advises or induces any employee to terminate his or her employment
with the Company; or
(d) solicits, diverts or takes away any person or entity that is a
customer of the Company, or advises or induces any customer or potential
customer not to do business with the Company; or
(e) discloses to any person or entity other than the Company, or makes
any use of, any information relating to the technology, know-how, products,
business or data of the Company or its subsidiaries, suppliers, licensors or
customers, including but not limited to the names, addresses and special
requirements of the customers of the Company.