EXHIBIT 10.5
1980 STOCK OPTION PLAN
OF
COMPUTER SCIENCES CORPORATION
1. PURPOSE. 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.
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.
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 cancelled without having been fully exercised, the
number of shares as to which such option was not exercised may again be optioned
hereunder.
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.
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.
6. OPTIONS.
(a) GRANT OF OPTIONS. 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.
(b) OPTION PRICE. 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. 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 died or suffered a permanent disability and whose
contributions to the affairs of the Company have been determined by the Board of
Directors of the Company to have been outstanding may, at the discretion of the
Board of Directors of the Company, become exercisable in full.
(d) TERMINATION OF EXERCISABILITY. 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; or (ii) 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.
(e) EXERCISE OF OPTIONS. Each option shall be exercisable during the
lifetime of an option holder, only by the option holder or a court-appointed
representative. 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 of a notice in writing stating that such option or part thereof
is exercised and payment of the option price in full in cash or by certified or
cashier's check for the shares with respect to which such option or part is
thereby exercised. The obligation of the Company to issue shares upon exercise
of an option is also 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. 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 Cancellation
Event shall be cancelled 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 contingent 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. No option shall be transferable by the option
holder other than by will or the applicable laws of descent and distribution.
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 o~ the following conditions are not satisfied:
(a) The Plan 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;
(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.
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.
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.