EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of May, 1999 (the
"Effective Date"), by and between Computer Sciences Corporation, a Nevada
corporation (the "Company"), and Van B. Honeycutt ("Executive").
W I T N E S S E T H:
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WHEREAS, Executive, since December 28, 1987, has served as an officer of
the Company, most recently as the Company's Chairman of the Board of Directors
("Chairman"), President and Chief Executive Officer; and
WHEREAS, the Company desires to obtain the benefit of continued services by
Executive as Chairman, President and Chief Executive Officer, and Executive
desires to continue to render services to the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the Company's best interest and that of its stockholders to
recognize the substantial contribution that Executive has made and is expected
to continue to make to the Company's business and to retain his services in the
future; and
WHEREAS, Executive and the Company deem it to be in their respective best
interests to enter into an agreement providing for the Company's continued
employment of Executive pursuant to terms herein stated, which terms include
provisions for compensation and benefits to be paid or otherwise provided by the
Company to Executive or his designated beneficiaries;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein, it is hereby agreed as follows:
1. Term of Employment; Duties.
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(a) As used herein, the phrase "Term of Employment" shall mean the
period commencing on the Effective Date and ending on the earliest to occur of
the fourth anniversary of the Effective Date or the date of termination of the
Executive's employment in accordance with any one of Sections 6(a) through 6(e)
below; provided, however, that the Term of Employment shall be automatically
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extended without further action of either party for one additional four-year
period (the "Single Automatic Extension") unless written notice of either
party's intention not to extend has been given to the other party hereto at
least 60 days prior to the expiration of the effective Term of Employment;
provided further that the Term of Employment may be extended after the Single
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Automatic Extension, by action of the Company's Board of Directors approving the
terms and conditions of an offer of any such extension and giving written notice
to Executive of such offer at least 60 days prior to the expiration of the then
effective Term of Employment, followed by Executive's acceptance of such offer
within such time as may be provided by the Board as a condition of such offer.
(b) The Company hereby agrees to employ Executive as its Chairman and
Chief Executive Officer for the Term of Employment, and Executive agrees to
serve in these capacities with the duties and responsibilities customary to such
positions in a company of the size and nature of the Company, to use his best
efforts to protect, encourage and promote the interests of his Company, and to
perform such other duties consistent with the offices held by Executive as may
be reasonably assigned to him from time to time by the Board. During the Term
of Employment, Executive shall report solely and directly to the Board.
(c) Executive shall devote substantially all of his business time and
attention to his duties on the Company's behalf except for sick leave, vacations
and approved leaves of absence; provided, however, that nothing shall preclude
Executive from (i) managing his personal investments and affairs and (ii)
participating in civic and nonprofit activities provided that, in either case,
such activities do not materially interfere with or adversely affect the
performance of his duties under this Agreement and (iii) participating as a
member of the board of directors of such other companies as he may be invited
and elected to serve with the consent of the Board of the Company, which consent
shall not be unreasonably withheld.
2. Compensation.
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(a) Base Salary. The Company agrees to pay to Executive as a minimum
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salary during the Term of Employment the sum of $1,040,000 per year ("Base
Salary") subject to increase as provided herein, payable in twenty-six biweekly
installments in accordance with the normal payroll procedure of the Company.
Such Base Salary shall be subject to annual review by the Board and may be
adjusted at or above such minimum by the Board from time to time.
(b) Annual Incentive Awards. Executive shall participate in the
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Company's Annual Management Incentive Plan, and any successor plan, on terms and
conditions that are appropriate to his positions and responsibilities at the
Company and are no less favorable than those applying to other senior executive
officers of the Company. Any annual incentive paid to Executive shall be in
addition to the Base Salary and to any and all other benefits to which Executive
is entitled as provided in this Agreement. Payment of annual incentive awards
shall be made at the same time that other senior executive officers of the
Company receive their incentive awards.
(c) Long-Term Incentive Programs. Executive shall participate in the
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stock option plans and other long-term incentive compensation plans available to
other senior executive officers of the Company from time to time on terms and
conditions that are appropriate to his positions and responsibilities at the
Company and are no less favorable than those applying to such other senior
executive officers.
3. Employee Benefit Programs. During the Term of Employment, Executive
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shall be entitled to participate in all employee pension and welfare benefit
plans made available to the Company's executive officers, as such plans may be
in effect from time to time and on terms and conditions that are no less
favorable than those applying to other senior executive officers, including,
without limitation, pension, profit sharing, savings and other retirement plans
or programs, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection, travel accident insurance, and any welfare benefit plans for senior
executive officers that may be sponsored by the Company from time to time,
including any retirement or welfare plans that supplement the above-listed types
of plans, whether funded or unfunded. Executive shall, in all events, be
entitled during the Term of Employment to term life insurance which, together
with other life insurance under the Company's term life insurance program, shall
provide face amount coverage which shall be no less than $750,000.
4. Supplemental Pension Benefit.
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Notwithstanding Section 3 hereof, Executive shall be entitled to
participate in the Company's Supplemental Executive Retirement Plan, amended and
restated as of February 27, 1998, or such successor or amended SERP as shall be
adopted from time to time (collectively, the "SERP") on terms and conditions
that are no less favorable than those applying to other senior executive
officers of the Company; provided, that the following additional provisions
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shall apply to Executive's right to benefits under the SERP: (i) Executive's
right to benefits as provided in Article IV(a) and IV(b) of the SERP shall at
all times be fully vested and nonforefeitable regardless of the age at which
Executive's Separation from Service occurs if the cause of his Separation from
Service is either termination by the Company without Cause or termination by the
Executive for Good Reason (both as described in Section 6(d) hereof); (ii)
notwithstanding any provision of the SERP (including any provision of Articles
III, VIII, IX and XV of the SERP) to the contrary, Executive may not be removed
as a participant thereunder at any time and the SERP may not be amended,
modified, suspended or terminated as to Executive without Executive's express
written consent; and (iii) if Executive's Separation from Services occurs prior
to his attaining age sixty-two (62) by reason of Executive's termination of
employment by the Company without Cause or by Executive for Good Reason,
Executive shall be entitled to receive commencing immediately upon such
Separation from Service benefits thereunder in accordance with Section IV(b) and
Articles V, VI and VII, as applicable, without the requirement of any approval
by the Chief Executive Officer or any other persons(s) and such benefits shall
be calculated as if on the date of such Separation from Service, Executive had
attained an age equal to the lesser of sixty-two (62) or his actual age plus
three (3).
5. Perquisites, Vacations and Reimbursement of Expenses. During the Term
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of Employment:
(a) The Company shall furnish Executive with, and Executive shall be
allowed full use of, office facilities, automobiles, secretarial and clerical
assistance and other Company property and services commensurate with his
position and of at least comparable quality, nature and extent to those made
available to other senior executive officers of the Company from time to time;
(b) Executive shall be allowed vacations and leaves of absence with
pay on a basis no less favorable than that applying to other senior executive
officers of the Company; and
(c) The Company shall reimburse Executive for all monies which he has
expended for purposes of the Company's business, such reimbursements to be
effected in accordance with normal Company reimbursement procedures from time to
time in effect. The Company shall also promptly pay all adequately documented
reasonable costs and expenses (including reasonable legal fees) incurred on
Executive's behalf in connection with entering into this Agreement.
(d) The Company shall in all events continue to provide use of the
Company's aircraft at the Company's expense for Executive's business use, it
being recognized that some of Executive's travel by the Company's aircraft may
be required for security purposes and, as such, shall constitute business use of
the aircraft. In addition, the Company shall reimburse Executive for travel
expenses incurred by Executive's spouse in accompanying Executive on Company
business, on an occasional basis.
(e) It is the intention of the Company that Executive shall be kept
whole with respect to reimbursements or other benefits under Section 5(a), (b),
and (d) after taking into account taxes, if any, on such amounts, but, except
with respect to payments to cover the occasional travel of Executive's spouse
accompanying him on business trips, this sentence shall not apply to any such
benefits described in this Section 5 that are for personal rather than business
use.
6. Termination of Employment.
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The rights and obligations of Executive and the Company in the event
of Executive's employment termination following a change of control, as defined
in the Company's Severance Plan for Senior Management and Key Employees, adopted
as of February 2, 1998 and amended February 18, 1998, or amended or successor
plan then in effect (the "Severance Plan") shall be governed exclusively by the
Severance Plan. No further payment or benefit shall be made or granted under
this Agreement in such event.
(a) Termination Due to Death. In the event that Executive's
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employment is terminated due to his death, the Company's payment obligations
under this Agreement shall terminate, except that Executive's estate or his
beneficiaries, as the case may be, shall be entitled to the following:
(1) Base Salary through the end of the month in which death
occurs;
(2) a pro rata annual incentive award for the year in which
Executive's death occurs, based on the maximum award opportunity for such year,
payable in a single installment promptly following Executive's death; and
(3) full vesting of any outstanding long-term incentive awards, stock
options and restricted stock, granted to Executive under any long-term plan or
plans of the Company in which Executive has participated.
(b) Termination due to Disability.
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(1) If, as a result of Executive's incapacity due to physical or
mental illness, accident or other incapacity (as determined by the Board in good
faith, after consideration of such medical opinion and advice as may be
available to the Board from medical doctors selected by Executive or by the
Board or both separately or jointly), Executive shall have been absent from his
duties with the Company on a full-time basis for six consecutive months and,
within 30 days after written Notice of Termination thereafter given by the
Company, Executive shall not have returned to the full-time performance of
Executive's duties, the Company or Executive may terminate Executive's
employment for "Disability."
(2) In the event that Executive's employment is terminated due to
Disability, he shall be entitled to the following benefits:
(i) disability benefits in accordance with the long-term
disability ("LTD") program then in effect for senior executive
officers of the Company;
(ii) a pro rata annual incentive award for the year in which
Executive's termination occurs, based on the maximum award opportunity
for such year, payable in a single installment promptly following
Executive's termination;
(iii) full vesting of any outstanding long-term incentive
awards, stock options and restricted stock, granted to Executive under
any long-term incentive plan or plans of the Company in which
Executive has participated.
(c) Termination by the Company for Cause.
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(1) The Company shall have the right to terminate Executive's
employment at any time for Cause in accordance with this Section 6(c).
(2) For purposes of this Agreement, "Cause" shall mean:
(i) fraud, misappropriation, embezzlement or other act of
material misconduct against the Company or any of its affiliates;
(ii) conviction of a felony involving a crime of moral
turpitude;
(iii) willful and knowing violation of any rules or
regulations of any governmental or regulatory body material to the
business of the Company; or
(iv) substantial and willful failure to render services in
accordance with the terms of this Agreement (other than as a result of
illness, accident, or other physical or mental incapacity), provided
that (A) a demand for performance of services has been delivered to
Executive in writing by or on behalf of the Board of Directors of the
Company at least 60 days prior to termination identifying the manner
in which such Board of Directors believes that Executive has failed to
perform and (B) Executive has thereafter failed to remedy such failure
to perform.
(3) No termination of Executive's employment by the Company for Cause
shall be effective unless the provisions of this Section 6(c)(3) shall have been
complied with. Executive shall be given written notice by the Board of the
intention to terminate him for Cause, such notice (i) to state in detail the
particular circumstances that constitute the grounds on which the proposed
termination for Cause is based and (ii) to be given no later than 60 days after
the Board first learns of such circumstances. Executive shall have 15 days
after receiving such notice in which to cure such grounds, to the extent such
cure is possible. If he fails to cure such grounds, Executive shall then be
entitled to a hearing before the Board. Such hearing shall be held within 20
days of his receiving such notice, provided that he requests such hearing within
15 days of receiving such notice. If, within five days following such hearing,
the Board gives written notice to Executive confirming that, in the judgment of
at least two-thirds of the members of the Board, Cause for terminating his
employment on the basis set forth in the original notice exists, his employment
with the Company shall thereupon be terminated for Cause.
(4) In the event the Company terminates Executive's employment
for Cause, he shall be entitled to the following:
(i) Base Salary through the date of termination;
(ii) all vested stock options shall remain exercisable for at
least 90 days except as otherwise expressly required by the applicable
shareholder-approved stock incentive plan and all unvested stock
options shall be forfeited; and
(iii) all restricted stock as to which restrictions have not
lapsed shall be forfeited, notwithstanding any contrary provisions in
any restricted stock grant.
(d) Termination Without Cause or for Good Reason.
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(1) In the event Executive's employment is terminated by the
Company without Cause or other than due to death or Disability ("Without
Cause"), or in the event Executive terminates his employment for Good Reason,
Executive shall be entitled to receive the following:
(i) Base Salary through the date of termination;
(ii) a lump sum severance payment in an amount equal to the
lesser of three (3) or the number of years (including fractions
thereof) by which the termination precedes Executive's 62nd birthday
times his Base Salary, as in effect immediately prior to the delivery
of notice of termination, plus the lesser of three (3) or the number
of years (including fractions thereof) by which the termination
precedes Executive's 62nd birthday times Executive's average annual
cash incentive compensation bonus over the three most recent fiscal
years preceding the year in which the date of termination occurs for
which such a bonus was paid or deferred or for which the amount of
such a bonus, if any, was determined, payable in a single installment
promptly following Executive's termination;
(iii) a pro rata annual incentive award for the year in
which termination occurs, based on his target award for such year,
payable in a single installment promptly following Executive's
termination;
(iv) continuation of coverage by the benefits provided in
Section 3 above, including, without limitation, all medical and
hospitalization (including dependent coverage), life, accident and
disability protection, maintained for Executive's benefit immediately
prior to the date of Executive's termination, for a period thereafter
equal to the lesser of three (3) years or the number of years
(including fractions thereof) by which the termination precedes
Executive's 62nd birthday (followed by an 18-month period of COBRA
continuation), provided that if Executive is ineligible under the
terms of such benefit plans or programs to be covered, the Company
shall provide Executive with substantially equivalent coverage through
other sources or will provide Executive with a lump sum payment in
such amount that after all taxes on that amount shall be equal to the
cost to Executive of providing himself such benefit coverage, and
(v) full vesting of any outstanding long-term incentive
awards, and, with respect to any stock options and restricted stock
grants, full vesting of any options or shares which would have vested
within the three (3) year period following the date of employment
termination if Executive had continued to be employed during such
period, and, with respect to stock options, extension of the term
during which each option maybe exercised by a period equal to three
years
from the employment termination date, but not beyond the maximum
permitted term of the option.
(2) For purpose of this Agreement, Good Reason shall mean the
occurrence of any of the following subsequent to the date of this Agreement
without Executive's express written consent:
(i) the failure to elect or reelect Executive to the
positions of Chairman and Chief Executive Officer described in Section
1; the removal of him from either such position; or any material
diminution in his duties or responsibilities in such positions (other
than in connection with a termination of Executive's employment in
accordance with Sections 6(a)-(c) above or 6(e) below);
(ii) the assignment to Executive of duties that are
materially inconsistent with, or that materially impair his ability to
perform, the duties customarily assigned to a Chairman and Chief
Executive Officer of a corporation of the size and nature of the
Company; or a change in the reporting structure so that Executive
reports to someone other than the Board or is subject to the direct or
indirect authority or control of a person or entity other than the
Board;
(iii) the Company awards Executive an annual bonus in
respect of any year that is less than 100% of the amount awarded him
in respect of any prior year unless due to reduced performance by the
Company or by Executive, applying reasonably equivalent standards with
respect to both years;
(iv) the Company fails to comply with the provisions hereof
governing compensation and benefits to Executive or otherwise
materially breaches any provision of this Agreement or any other
agreement with Executive and fails to cure the same within 15 days
following receipt of written notification from Executive specifying
such failure to comply or material breach;
(v) conduct by the Company occurs that would cause
Executive to commit fraudulent acts or would expose Executive to
criminal liability;
(vi) the Company's principal office or Executive's own
office as assigned to him by the Company is moved to a location more
than 35 miles from El Segundo, California or Executive's own office as
assigned to him by the Company is moved to a location outside of the
Company's principal office; or
(vii) the Company fails to obtain the assumption in writing
of its obligation to perform this Agreement by any successor to all or
substantially all of the business or assets of the Company within 15
days after the occurrence of the transaction resulting in such
succession.
(3) For purposes of this Agreement, a determination by the Company not
to renew this Agreement for the Single Automatic Extension described in the
first proviso to Section 1(a) shall be deemed a termination Without Cause unless
the Company establishes that such determination was based on a ground or grounds
that would justify a termination for Cause as defined in Section 6(c)(2) hereof,
such determination to be made without regard to Section 6(c)(3) hereof.
(e) Voluntary Termination. Executive shall have the right to
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terminate his employment with the Company at any time. A voluntary termination
shall mean a termination of employment by Executive on his own initiative, other
than a termination due to death or Disability or for Good Reason, and shall have
the same consequences as provided in Section 6(c)(4) for a termination for
Cause.
(f) Other Termination Benefits. In the case of any of the foregoing
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terminations, Executive or his estate shall also be entitled to the following,
to the extent not otherwise payable under this Agreement:
(1) the balance of any incentive awards, including awards due for
performance periods which have been completed, which have been earned but
have not yet been paid;
(2) any amounts due under Sections 2(a), 3, 4 and 5;
(3) a lump sum payment in respect of accrued but unused vacation
days at his Base Salary rate in effect on the date of termination; and
(4) other or additional benefits, if any, in accordance with
applicable plans of the Company.
(g) Base Salary for Severance Benefit Determinations. Anything in
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this Section 6 to the contrary notwithstanding, if, prior to a termination under
this Section 6, the Company has reduced Executive's Base Salary, then Base
Salary for purposes of determining severance benefits shall mean the highest
Base Salary as in effect during the Term of Employment prior to any such
reduction.
7. Indemnification and Insurance.
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(a) In any situation where under applicable law the Company has the
power to indemnify (or advance expenses to) Executive in respect of any
judgments, fines, settlements, loss, cost or expense (including attorneys' fees)
of any nature related to or arising out of Executive's activities as an agent,
employee, officer or director of the Company or in any other capacity on behalf
of or at the request of the Company, the Company agrees that it shall, promptly
on written request, indemnify (and advance expenses to) Executive to the fullest
extent permitted by applicable law, including but not limited to making such
findings and determinations and taking any and all such actions as the Company
may, under applicable law, be permitted to have the discretion to take so as to
effectuate such indemnification or advancement. Such agreement by the Company
shall not be deemed to impair any other obligation of the Company respecting
indemnification of Executive otherwise arising out of this or any other
agreement or promise of the Company or under any statute.
(b) Without limiting the generality of Section 7(a) above but subject
to Section 14 below, including without limitation Section 14(b), the Company
shall pay any and all reasonable fees and expenses incurred by Executive in
seeking to obtain or enforce any rights or benefits provided by this Agreement,
including all reasonable attorneys' and experts' fees and expenses, accountants'
fees and expenses, and court costs (if any) incurred by Executive in pursuing a
claim for payment of compensation or benefits or other right or entitlement
under this Agreement provided that Executive is successful as to at least part
of the disputed claim by reason of litigation, arbitration or settlement.
(c) The Company further agrees to furnish Executive for the remainder
of his life (without reference to whether the Term of Employment continues in
effect) or for six (6) years after the expiration of the Term of Employment,
whichever is later, with Directors' and Officers' liability insurance insuring
Executive against insurable events which occur during the Term of Employment,
such insurance to have policy limits and otherwise to be in substantially the
same form and to contain substantially the same terms, conditions and exceptions
as the liability insurance policies provided for officers and directors of the
Company in force from time to time.
8. No Mitigation; No Offset. In the event of a termination of Executive's
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employment for any reason, Executive shall not be required to seek other
employment or to mitigate any of the Company's obligations under this Agreement,
and no amount payable under Section 6 shall be reduced (i) by any claim the
Company may assert against Executive or (ii) by any compensation or benefits
earned by Executive as a result of employment by another employer, self-
employment or from any other source after such termination of employment with
the Company. Notwithstanding any other provision of this Agreement, any sum or
sums paid under this Agreement shall be reduced and offset by any sums paid to
Executive under the Severance Plan.
9. Designated Beneficiary. In the event of the death of Executive while
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in the employ of the Company, or at any time thereafter during which amounts
remain payable to Executive under Section 6 above, such payments shall
thereafter be made to such person or persons as Executive may specifically
designate (successively or contingently) to receive payments under this
Agreement following Executive's death by filing a written beneficiary
designation with the Company during Executive's lifetime. Such beneficiary
designation shall be
in such form as may be reasonably prescribed by the Company and may be amended
from time to time or may be revoked by Executive pursuant to written instruments
filed with the Company during his lifetime. Beneficiaries by Executive may be
any natural or legal person or persons, including a fiduciary, such as a trustee
of a trust, or the legal representative of an estate. Unless otherwise provided
by the beneficiary designation filed by Executive, if all of the persons so
designated die before Executive on the occurrence of a contingency not
contemplated in such beneficiary designation, or if Executive shall have failed
to provide such beneficiary designation, then the amount payable under this
Agreement shall be paid to Executive's estate.
10. Ethics. During the Term of Employment, Executive shall be subject to
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the Company's Code of Ethics and Standards of Conduct (the "Policies"), which is
attached to this Agreement as Appendix A. If for any reason an arbitrator,
subject to judicial review as provided by law, or a court should determine that
any provision of the Policies is unreasonable in scope or otherwise
unenforceable, such provision shall be deemed modified and fully enforceable as
so modified to the extent the arbitrator and any reviewing court determines what
would be reasonable and enforceable under the circumstances.
11. Inventions
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(a) All inventions, discoveries, developments and improvements
conceived or made by Executive, alone or with others, prior to Executive's
employment by the Company, or during Executive's employment by the Company prior
to the date of this Agreement but which Executive believes that he owns, are
listed and described on Appendix B to this Agreement. To the best of
Executive's knowledge this list is complete (or if no items are so listed,
Executive has nothing to so disclose). Executive understands that his failure
to list any item will require that he demonstrate through clear, tangible and
convincing evidence that he or his assigns own an item
which the Company believes it owns. If it is determined that Executive owns any
unlisted item, and the Company has expended monies to develop it, the Company
shall be entitled to the use of same without royalty payments to Executive or
his assigns.
(b) Executive will promptly and fully inform the Company of all
inventions, discoveries, developments and improvements that he may conceive,
discover, develop or make during his employment, whether made solely or jointly
with others, whether or not patentable, and whether or not such conception,
discovery or making involves the use of the Company's time, facilities,
equipment or personnel (collectively, "Inventions"). Executive acknowledges and
agrees that all such Inventions relating to any work he performs for the Company
or any business in which the Company is or intends to be engaged are "works for
hire" under applicable law and shall belong to the Company. Executive further
agrees to assign, and does hereby assign, to the Company all right, title and
interest in and to any and all such Inventions and agrees to execute all
documents deemed necessary or desirable by the Company in connection therewith,
including patent and/or copyright assignments, and to cooperate both during and
after his employment with the Company, at the Company's expense, in all further
actions deemed necessary or desirable to confirm, register, protect or enforce
the Company's right therein. The Company and Executive acknowledges that the
foregoing assignment does not include any invention unrelated to the Company's
business or research which meets the requirements of Section 2870 of the
California Labor Code, or any successor provision thereto.
12. Confidential Information and Trade Secrets
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(a) Executive acknowledges that the term "Confidential Information" as
used in this Agreement means all items, materials and information (whether or
not reduced to writing and whether or not patentable or copyrightable) which
belong to the Company or which the
Company's suppliers or customers or clients have communicated to the Company in
the course of the Company's business, and which reflect, consist of or refer to:
(1) information technology; methods and processes; designs and
formulations; the content or composition of goods or services; techniques;
business strategies or operations; formulas; compilations of data or reports;
plans; tools or equipment; inventions; know-how; technical disclosures, patent
applications, blueprints or specifications; financial, marketing, sales,
personnel or salary information; forms, legal documents or memoranda; software,
computer programs or databases; any documents prepared by or on behalf of the
Company or Company suppliers, customers or clients;
(2) information compiled, collected or developed by the Company
reflecting the identities of those customers and clients of the Company which
are not generally known outside the Company or whose relationship with the
Company as a customer or client is not generally known outside the Company;
characteristics of any customers or clients of the Company or of customer or
client representatives, including without limitation product or service
preferences or requirements, cost or price information for goods or services
offered or sold, credit terms or credit performance, actual or likely order
cycles, the nature of goods delivered or services performed, or research or
development plans or activities;
(3) information compiled, collected, or developed by the Company
reflecting identities of any suppliers of the Company which are not generally
known outside the Company or whose relationship with the Company as a supplier
is not generally known outside the Company; characteristics of any supplier of
the Company, or supplier representatives, including without limitation cost or
price information for goods or services offered or purchased,
audit terms, the nature of goods delivered or service performed, product or
service quality and reliability, delivery terms, or research or development
plans or activities;
(4) prices, fees, discounts, selling techniques or distribution
methods used by the Company; or
(5) any other confidential or proprietary information obtained
directly or indirectly while employed by the Company.
(b) Executive acknowledges that the term "Trade Secret" as used in
this Agreement means the whole or any portion or phrase of any scientific or
technical or business information, including, but not limited to, any design,
process, procedure or system, formula, improvement, or invention that (i)
derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of the Company's reasonable
efforts to maintain its secrecy. In addition to information belonging to the
Company, information furnished to the Company by other parties can be a Trade
Secret.
(c) The term "Confidential Information" includes information which may
also be a Trade Secret, but does not include anything described above which is
now generally known by parties other than the Company, its affiliates and
employees, or becomes generally known, through no breach of this Section 12 on
the part of Executive.
(d) Executive acknowledges that Confidential Information is and
remains confidential regardless of whether or not any Company report or form or
other document contains any statement regarding confidentiality.
(e) Executive agrees to hold all Confidential Information in
confidence and to not use directly or indirectly, for Executive's own benefit or
the benefit of any other party, corporate or otherwise, or publish or cause to
be published or otherwise disclose to anyone other than the Company or its
designee, any Confidential Information or Trade Secrets except as compelled by
law and except as required to conduct the Company's business.
(f) Executive will, upon demand, and without demand immediately upon
the termination of Executive's employment, surrender to the Company any and all
documents, including without limitation computer memory, reports and forms
containing Confidential Information and any and all other business records,
prototypes and materials which Executive may have created or received from the
Company during Executive's employment, or which pertain to the Company's
business, and all copies thereof, which are in Executive's possession or control
at the time of the demand or the termination of Executive's employment, however
made or obtained.
13. No Solicitation. During Executive's employment, and for a period of
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two years immediately following Executive's employment termination (voluntary or
otherwise), Executive agrees to honor the following representations: (a)
Executive shall not induce, or aid others to induce, any Company employee to
terminate his or her employment or do anything which violates any oral or
written employment agreement he or she may have with the Company, (b) in
recognition of the status of information regarding compensation and other
personnel information of Company employees as Confidential Information,
Executive shall not solicit or aid others to solicit Company employees for, or
offer to them, competitive employment, and (c) Executive agrees not to interfere
with the business of the Company in any manner including, without
limitation, inducing any consultant or independent contractor or customer or
client of the Company to sever or diminish that person's or entity's
relationship with the Company.
14. Arbitration.
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(a) In the event of any dispute between the parties concerning the
validity, interpretation, enforcement or breach of this Agreement or in any way
related to Executive's Employee's employment or any termination of such
employment (including any claims involving any officers, managers, directors,
employees, shareholders or agents of the Company) excepting only any rights the
parties may have to seek injunctive relief, the dispute shall be resolved by
final and binding arbitration administered by JAMS/Endispute in Los Angeles,
California in accordance with the then existing JAMS/Endispute Arbitration Rules
and Procedures for Employment Disputes. Resolution by arbitration, either in
lieu of or after exhausting the procedures of Section 7 of the Severance Plan,
shall be at the election of Executive with respect to any claim to which Section
7 of the Severance Plan shall apply. In the event of such an arbitration
proceeding, the parties shall select a mutually acceptable neutral arbitrator
from among the JAMS/Endispute panel of arbitrators. In the event the parties
cannot agree on an arbitrator, the Administrator of JAMS/Endispute shall appoint
an arbitrator. Neither party nor the arbitrator shall disclose the existence,
content, or results of any arbitration hereunder without the prior written
consent of all parties, except as may be compelled by court order. Except as
provided herein, the Federal Arbitration Act shall govern the interpretation and
enforcement of such arbitration and all proceedings. The arbitrator shall apply
the substantive law (and the law of remedies, if applicable) of the state of
California, or Federal law, or both, as applicable and the arbitrator is without
jurisdiction to apply any different substantive law. The arbitrator shall have
the authority to entertain a motion to dismiss and/or a motion for summary
judgment by any
party and shall apply the standards governing such motions under the Federal
Rules of Civil Procedure. The arbitrator shall render an award and a written,
reasoned opinion in support thereof. Judgment upon the award may be entered in
any court having jurisdiction thereof. The parties intend this arbitration
provision to be valid, enforceable, irrevocable and construed as broadly as
possible. Pending the resolution of any dispute between the parties, the Company
shall continue prompt payment of all amounts due to Executive under this
Agreement and prompt provision of all benefits to which Executive is otherwise
entitled.
(b) Costs of arbitration shall be borne by the Company. Reasonable
attorney fees and costs and the reasonable fees and costs of any experts
incurred by Executive shall be borne and paid by the Company if Executive
prevails on any portion of his claims. Such fees and costs incurred by
Executive shall be paid by the Company in advance of the final disposition of
such claims, as such fees are incurred, upon receipt of an undertaking by
Executive to repay such amounts net of any income taxes paid or payable by
Executive with respect to such amounts, if it is ultimately determined that he
did not prevail on any portion of his claims.
(c) Notwithstanding the foregoing provisions of this Section 14,
Executive and the Company agree that Executive or the Company may seek and
obtain otherwise available injunctive relief in Court for any violation of
obligations concerning confidential information or trade secrets that cannot
adequately be remedied at law or in arbitration.
(d) If the Company terminates Executive's employment hereunder or
Executive terminates his employment alleging that such termination is for Good
Reason, and if there is a dispute as to whether Executive is entitled to receive
any payments and benefits provided under this Agreement, including the severance
and other benefits set forth in Section
6(d)(1), during the period of the dispute the Company shall continue to pay
Executive his Base Salary and continue to provide Executive and his family with
the benefits provided in Section 3, provided, however, that if the dispute is
resolved against Executive, Executive agrees that he will promptly refund to the
Company all payments he receives hereunder which he would not otherwise have
been entitled to receive, plus interest at the rate provided in Section 1274(d)
of the Code, compounded quarterly. If the dispute is resolved in Executive's
favor, promptly after resolution of the dispute the Company shall pay Executive
the sum that was withheld during the period of the dispute plus interest at the
rate provided in Section 1274(d) of the Code compounded quarterly.
15. Notices. For purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, or delivered by
private courier, as follows: if to the Company -- Computer Sciences
Corporation, 2100 East Grand Avenue, El Segundo, California 90245 Attention:
Vice President, General Counsel and Secretary; and if to Executive at the
address specified at the end of this Agreement. Notice may also be given at
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
16. Miscellaneous. This Agreement shall also be subject to the following
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miscellaneous provisions:
(a) The Company represents and warrants to Executive that it has the
authorization, power and right to deliver, execute and fully perform its
obligations under this Agreement in accordance with its terms.
(b) This Agreement and the Severance Plan contain a complete statement
of all the agreements between the parties with respect to Executive's employment
by the Company, supersede all prior and existing negotiations and agreements
between them concerning the subject matter thereof and can only be changed or
modified pursuant to a written instrument duly executed by each of the parties
hereto and stating an intention to change or modify this Agreement or the
Severance Plan, as the case may be. No waiver by either party of any breach by
the other party of any condition or provision contained in this Agreement or the
Severance Plan to be performed by such other party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by Executive or an
authorized officer of the Company, as the case may be.
(c) If any provision of this Agreement or any portion thereof is
declared invalid, illegal or incapable of being enforced by any arbitrator or
court of competent jurisdiction, the remainder of such provisions and all of the
remaining provisions of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California except to the extent governed
by Federal law, and shall be construed according to its fair meaning and not for
or against any party.
(e) All compensation payable hereunder shall be subject to such
withholding taxes as may be required by law.
(f) This Agreement shall be binding upon and inure to the benefit of
the successors and assigns, of the Company. No rights or obligations of the
Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations
may be assigned or transferred pursuant to a merger or consolidation in which
the Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in this Agreement, either contractually or
as a matter of law. The Company further agrees that, in the event of a sale of
assets or liquidation as described in the preceding sentence, it shall take
whatever action it legally can in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder. Except as expressly provided herein, Executive may not sell,
transfer, assign, or pledge any of his rights or obligations pursuant to this
Agreement.
(g) Any rights of Executive hereunder shall be in addition to any
rights Executive may otherwise have under written benefit plans or agreements of
the Company to which he is a party or in which he is a participant, including,
but not limited to, any Company sponsored written employee benefit plans, stock
option plans, grants and agreements. Provisions of this Agreement shall not in
any way abrogate Executive's rights under such other plans and agreements.
(h) The respective rights and obligations of the parties hereunder
shall survive any termination of Executive's employment to the extent necessary
to the intended preservation of such rights and obligations.
(i) The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
(j) This Agreement may be executed in two or more counterparts each of
which shall be legally binding and enforceable.
* * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
VAN B. HONEYCUTT COMPUTER SCIENCES CORPORATION
/s/ Van B. Honeycutt By: /s/ Hayward D. Fisk
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Its: Vice President