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EXHIBIT 10(f)
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1995 STOCK OPTION PLAN
1. PURPOSE
Science Applications International Corporation (the "Company") hereby
establishes the Science Applications International Corporation 1995 Stock Option
Plan (the "Plan"). The purpose of the Plan is to advance the interests of the
Company and its stockholders by providing a means by which the Company and its
Subsidiaries can attract and retain qualified key employees, directors and
consultants and provide such personnel with an opportunity to participate in the
increased value of the Company which their effort, initiative and skill have
helped produce.
2. DEFINITIONS
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Class A Common Stock of the Company,
par value $.01.
(d) "Committee" shall mean the Company's Stock Option Committee
responsible for administering the Plan.
(e) "Employee/Optionee" shall mean an Optionee who is an employee of the
Company or any Subsidiary.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Exercise Price" shall mean the price per share at which an Option
may be exercised, as determined by the Committee and as specified in the
Optionee's option agreement.
(h) "Formula Price" shall mean the price per share of Common Stock as
established by the Board from time to time.
(i) "Option" shall mean an option to purchase Common Stock granted
pursuant to the Plan.
(j) "Optionee" shall mean any person who holds an Option pursuant to the
Plan.
(k) "Plan" shall mean this Science Applications International
Corporation 1995 Stock Option Plan, as it may be amended from time to time.
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amended 10/2/96
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(l) "Purchase Price" shall mean at any particular time the Exercise
Price times the number of shares for which an Option is being exercised.
(m) "Subsidiary" as used in the Plan means any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company if
each of the corporations, other than the last corporation in such chain, owns at
least fifty percent (50%) of the total voting power in one of the other
corporations in such chain.
3. ADMINISTRATION
(a) The Committee. The Plan shall be administered by the Committee which
shall consist of not less than two directors appointed by the Board, each of
whom shall satisfy the requirements of Rule 16b-3, as amended, of the Exchange
Act. No member of the Committee shall be liable for any action or determination
in respect thereto, if made in good faith. The Committee may appoint a separate
committee with respect to Optionees who are not subject to Section 16 of the
Exchange Act.
(b) Powers of the Committee. Subject to the provisions of the Plan, the
Committee shall have the authority, in its discretion and on behalf of the
Company:
(i) to grant Options;
(ii) to determine whether the Options granted are intended to be
incentive stock options or non-qualified stock options;
(iii) to determine the Exercise Price per share of Options to be
granted;
(iv) to determine the individuals to whom, and the time or times
at which, Options shall be granted and the number of shares for which an
Option will be exercisable;
(v) to interpret the Plan;
(vi) to prescribe, amend, and rescind rules and regulations
relating to the Plan;
(vii) to determine the terms and provisions of each Option
granted and, with the consent of the Optionee, to modify or amend each
Option;
(viii) to accelerate or defer, with the consent of the Optionee,
the exercise date of any Option;
(ix) with the consent of the Optionee, to reprice, cancel and
regrant, or otherwise adjust the Exercise Price of an Option previously
granted by the Committee; and
(x) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
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(c) Committee Discretion. In exercising its authority, the Committee
shall have the broadest possible discretion and the Committee's determinations
under the Plan made in good faith shall be binding and conclusive on Optionees
and other persons claiming entitlements under the Plan. In no event shall a
Committee determination with respect to a particular Optionee or provision of
the Plan be binding with respect to any other Optionee (even if similarly
situated) nor with respect to any future determinations regarding the same or
other provisions of the Plan.
4. ELIGIBILITY
(a) General. The individuals who shall be eligible to participate in the
Plan and to receive Options hereunder shall be such key employees, directors and
consultants of the Company and its Subsidiaries as the Committee shall from time
to time determine. The Committee may designate one or more directors who are not
eligible for participation in the Plan for a specified period of time. No Option
shall be granted to any person who, at the time the Option is granted, owns
(including stock owned by application of the constructive ownership rules of
Section 425(d) of the Code) stock possessing more than 10% of the total combined
voting power or value of all classes of stock of the Company or any Subsidiary.
(b) Incentive Stock Options. No Option which is designated as an
incentive stock option shall be granted to any person who, at the time the
Option is granted, is not an employee of the Company or a Subsidiary. The
aggregate fair market value (determined as of the time the Option is granted) of
the Common Stock with respect to which Options designated as incentive stock
options are exercisable for the first time by an employee shall not exceed
$100,000 during any calendar year (under all plans of the Company or any
Subsidiary which provide for the granting of an incentive stock option).
5. STOCK SUBJECT TO THE PLAN
Options may be granted permitting the purchase of the aggregate of not
more than 12,000,000 shares of the Company's Common Stock, subject to adjustment
pursuant to Section 10 hereof. These shares may consist either in whole or in
part of shares of the Company's authorized but unissued Common Stock or shares
of the Company's authorized and issued Common Stock reacquired by the Company
and held in its treasury. If an Option granted under this Plan is surrendered,
expires or for any other reason ceases to be exercisable in whole or in part,
the shares which were subject to any such Option but as to which the Option
ceases to be exercisable shall be available for Options to be granted under the
Plan.
6. STOCK OPTIONS
(a) Options. The Options granted pursuant to the Plan may be "incentive
stock options" within the meaning of Section 422 of the Code or non-qualified
stock options. Options designated to be incentive stock options shall be
designated as such in the option agreements evidencing such Options.
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(b) Option Agreements. Options shall be evidenced by written option
agreements between the Optionee and the Company in such form as the Committee
shall from time to time determine. No Option or purported Option shall be a
valid and binding obligation of the Company unless previously granted by the
Committee and evidenced in writing by such an option agreement. If an option
agreement is not executed by the Optionee and returned to the Company within the
time prescribed in the option agreement, the Option evidenced thereby will be
forfeited and the option agreement will be null and void. Appropriate officers
of the Company are hereby authorized to execute and deliver option agreements in
the name of the Company, as directed from time to time by the Committee.
(c) Exercise Price. The Exercise Price at which Options may be granted
under the Plan shall be not less than one hundred percent (100%) of the fair
market value of the Common Stock on the day the Option is granted, but may be
less than the Exercise Price or Prices of previously granted Options, whether in
effect, canceled or expired. As long as the Company's Common Stock is not listed
on any national securities exchange or traded on a regular basis (as determined
by the Company's Board or a Committee of the Board to which the Board has
delegated the authority to make such determination) on the over-the-counter
market, fair market value may be taken as the Formula Price as in effect at the
date of grant.
(d) Date of Grant. The Committee shall, after it approves the granting
of an Option to a participant, cause the participant to be notified of such
action. The date on which the Committee approves the granting of an Option shall
be considered the date on which such Option is granted.
(e) Terms of Exercise. The right to purchase shares covered by any
Option or Options under the Plan shall be exercisable only in accordance with
the terms and conditions of the grant to such Optionee. The Committee may, in
its discretion, provide that such Option or Options may be exercised in whole or
in part, in installments, cumulative or otherwise, for any period or periods of
time specified by the Committee of not more than ten years from the date of the
grant of the Option. Subject to the provisions of Paragraph 9, that portion of
an Option which is exercisable on an installment basis may not be exercised
prior to the expiration of the applicable installment period.
(f) Non-Transferability. An Option granted under the Plan may not be
transferred except by will or the laws of descent and distribution and, during
the lifetime of the Optionee to whom granted, may be exercised only by such
Optionee or his conservator or other legal representative.
(g) Limit on Option Grants. In no event may any single Optionee receive
Option grants for more than 500,000 shares of Common Stock in the aggregate.
7. EXPIRATION AND TERMINATION
(a) Expiration of Option. Each Option and all rights and obligations
thereunder shall, subject to the provisions of Paragraph 9, expire on a date to
be determined by the Committee, such date, however, in no event to be later than
ten (10) years from the date an Option is granted.
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(b) Termination of Employment or Affiliation. Subject to the provisions
of Paragraph 9, that portion of an Option which is exercisable on an installment
basis may not be exercised unless the Optionee shall continue in the employ or
affiliation of the Company or any of its Subsidiaries during the entire period
to which such installment relates. Except as set forth below in Paragraphs 7(c)
through (e) or otherwise set forth in an option agreement, all Options granted
to an Optionee under this Plan shall terminate and no longer be exercisable as
of the date such Optionee ceases to be employed or affiliated with the Company
or any Subsidiary; provided, however, the Committee in its discretion may extend
the period of time that such Optionee may exercise such Optionee's Options, but
in no event may the Committee extend such period of time beyond the expiration
date of the Options or beyond ten (10) years from the date of grant of such
Options.
(c) Termination Due to Retirement or Permanent Total Disability. In the
event an Employee/Optionee's employment with the Company or any Subsidiary shall
terminate as the result of normal retirement, permanent total disability or
early retirement under the terms of a retirement or pension plan maintained by
the Company and in which such Employee/Optionee is a participant, such
Employee/Optionee may, at any time within ninety (90) days after such
termination of employment, exercise such Employee/Optionee's Options to the
extent that the Employee/Optionee was entitled to exercise them on the date of
such termination of employment, unless such Options would expire pursuant to
their terms at an earlier date, in which case such Options shall remain
exercisable only until the earlier expiration date.
(d) Death. If an Optionee dies while in the employ or affiliation of the
Company or of a Subsidiary without having fully exercised such Optionee's
Options, such Options may, within one (1) year of the Optionee's death (or
within such shorter period as may be specified in the Option by the Committee),
be exercised by the beneficiary designated pursuant to Paragraph 8(c), or if
there is no such surviving beneficiary, by the person or persons to whom the
Optionee's rights under the Option shall pass by will or by the applicable laws
of descent and distribution to the extent that such deceased Optionee was
entitled to exercise the Options on the date of death, unless such Options would
expire pursuant to their terms at an earlier date, in which case such Options
shall remain exercisable only until the earlier expiration date.
(e) Leaves of Absence. An Employee/Optionee who is on a leave of absence
pursuant to the terms of the Company's Administrative Policy No. B-11 "Unpaid
Personal Leave of Absence" or any amended or replacement policy thereof, shall
not, during the period of any such absence be deemed, by virtue of such absence
alone, to have terminated such Employee/Optionee's employment with the Company
or any Subsidiary except as the Committee may otherwise expressly provide.
Except as otherwise determined by the Committee, or unless otherwise required by
applicable law, unless such Employee/Optionee is on a Medical Leave (as
hereinafter defined), all rights which such Employee/Optionee would have had to
exercise Options granted hereunder will be suspended during the period of such
leave of absence. Upon such Employee/Optionee's return to the Company or any
Subsidiary, all rights to exercise Options shall be restored to the extent such
Options are exercisable at that time. The Committee in its discretion may permit
the exercise, while on a leave of absence, of Options which would otherwise
expire or may defer the expiration date of such Options, but not beyond ten (10)
years from their date of grant. An Employee/Optionee who is on a Medical Leave
shall have all rights to exercise such Employee/Optionee's Options that such
Employee/Optionee
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would have had if such Employee/Optionee were not on a Medical Leave. For
purposes of this Paragraph 7(e), "Medical Leave" shall be defined as a leave of
absence for medical reasons which shall begin after ninety-one (91) consecutive
calendar days of total disability leave and shall remain in effect until the
earlier of a release by the attending physician for the Employee/Optionee to
return to work or until the termination of employment. In the case of incentive
stock options which would otherwise cease to be incentive stock options during a
leave of absence by virtue of the operation of Treasury Regulations Section
1.421(7)(h)(2), the Committee, in its sole discretion, may permit exercise of
the incentive stock option while on such a leave of absence or may permit
conversion of such incentive stock option to a non-qualified stock option with
otherwise identical terms.
8. EXERCISE OF OPTIONS
(a) The Purchase Price shall be paid in full when the Option is
exercised. The Purchase Price may be paid in whole or in part in (i) cash or
(ii) whole shares of Common Stock of the Company evidenced by negotiable
certificates, valued at the Formula Price in effect on the date of exercise;
provided, however, that unless an exception is granted by the Secretary of this
Corporation, shares of Common Stock of the Company acquired through the exercise
of a stock option must have been owned by the Optionee for at least six months
before such shares of Common Stock may be used to pay the Purchase Price. The
Company or any Subsidiary shall be entitled to deduct from other compensation
payable to each Optionee any sums required by federal, state or local tax law to
be withheld with respect to the exercise of an Option but, in the alternative,
may require the Optionee or other person exercising the Option to pay, or the
Optionee or such other persons may pay, such sums to the employer corporation at
the time of such exercise. The Committee shall have the authority in its
discretion to allow withholding on exercise of an Option to be satisfied by
withholding from the shares to be issued upon the exercise of the Option a
number of shares, valued at the Formula Price in effect on the date of exercise
of the Option, equal in value to the withholding requirement.
(b) An Optionee shall have no rights as a shareholder of the Company
with respect to any shares for which his or her Option is exercisable until the
date of exercise of such Option and the issuance of a stock certificate for such
shares. No adjustment shall be made for dividends, ordinary or extraordinary or
whether in currency, securities or other property, distributions, or other
rights for which the record date is prior to the date such stock certificate is
issued.
(c) Each Optionee may name a beneficiary or beneficiaries (who may be
named contingently or successively) to whom the right to exercise Options
following the Optionee's death (as provided in Paragraph 7(d)) shall pass. Each
designation will revoke any prior designations by the same Optionee, shall be on
a form prescribed by the Committee, and shall be effective only when filed by
the Optionee in writing with the Committee during the lifetime of the Optionee.
In the absence of any such designation, the right to exercise any unexercised
Options following the death of the Optionee shall pass to the person or persons
to whom the Optionee's rights under the Option pass by will or by the applicable
laws of descent and distribution.
9. CHANGE IN CONTROL
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Notwithstanding any provision of Paragraph 7 above to the contrary but
subject to the provisions of Paragraph 4(b) above, any Option granted pursuant
to the Plan shall, in the case of a Change In Control (as hereinafter defined)
of the Company, become fully exercisable as to all shares of Common Stock to
which it relates from and after the date of such Change In Control. For purposes
of this Paragraph 9, the term "Change in Control" shall be deemed to occur upon
any "person" (as defined in Section 13(d) of the Exchange Act), other than the
Company or any Subsidiary or employee benefit plan or trust maintained by the
Company or any Subsidiary, becoming the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than 25% of the
Common Stock of the Company outstanding at such time, without the prior approval
of the Board. If the provisions of this Paragraph 9 are limited by the $100,000
limit of Paragraph 4(b) above, the acceleration of exercisability provided under
this Paragraph 9 shall be first applied to those incentive stock options having
the lowest Exercise Price. Any remaining Options which would have become
exercisable but for the $100,000 limit shall become exercisable on the first
date on which they may become exercisable without exceeding the $100,000 limit.
10. LOANS
The Company may, but shall not be obligated to, provide to any Optionee
a loan or guarantee on behalf of any Optionee a loan to facilitate the exercise
of Options on such terms and conditions as agreed to by the Committee.
11. CAPITAL ADJUSTMENTS
The aggregate number of shares of the Company's Common Stock subject to
this Plan, the maximum number of shares as to which Options may be granted to
any one Optionee hereunder, and the number of shares and the Exercise Price
shall be appropriately adjusted, as determined by the Committee in its
discretion, for any increase or decrease in the number of shares of Common Stock
which the Company has issued resulting from any stock split, stock dividend,
combination of shares or any other change, or any exchange for other securities
or any reclassification, reorganization, redesignation, recapitalization, or
otherwise.
12. NO EMPLOYMENT OBLIGATION
An Employee/Optionee's employment with the Company or a Subsidiary is
not for any specified term and may be terminated by such Employee/Optionee or by
the Company or a Subsidiary at any time, for any reason, with or without cause.
Nothing in this Plan or in any option agreement pursuant to this Plan shall
confer upon any Optionee any right to continue in the employ of, or affiliation
with, the Company or a Subsidiary nor constitute any promise or commitment by
the Company or a Subsidiary regarding future positions, future work assignments,
future compensation or any other term or condition of employment or affiliation.
13. GOVERNMENT AND STOCK EXCHANGE REGULATIONS
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The Company shall not be required to issue any shares upon the exercise
of any Option unless and until the Company has fully complied with any then
applicable requirements by the Securities and Exchange Commission, the
California Corporations Commissioner, or other regulatory agencies having
jurisdiction, and of any exchanges upon which Common Stock of the Company may be
listed.
Upon the exercise of an Option at a time when there is not in effect a
registration statement under the Securities Act of 1933 or a similar statute
(the "Act") relating to the stock issuable upon exercise thereof and available
for delivery a prospectus meeting the requirements of Section 10(a)(3) of said
Act, or if the rules or interpretations of the Securities and Exchange
Commission so require, the stock may be issued only if the holder represents and
warrants in writing to the Company that the shares purchased are being acquired
for investment and not with a view to distribution thereof.
14. AMENDMENT, SUSPENSION OR TERMINATION OF PLAN
The Board or the Operating Committee of the Board may at any time
suspend or terminate the Plan and may amend it from time to time in such
respects as the Board or the Operating Committee may deem advisable in order
that Options granted thereunder shall conform to any change in the law, or in
any other respect which the Board or the Operating Committee may deem to be in
the best interests of the Company; provided, however, that no such amendment
shall, without the approval of a majority of the voting power of the capital
stock of the Company present or represented and entitled to vote at a duly
constituted meeting of the stockholders, (i) increase the maximum number of
shares for which Options may be granted under the Plan, except as specified in
Paragraph 11, (ii) change the provisions of Paragraph 6(c) relating to the
establishment of the Exercise Price other than to change the manner of
determination the fair market value of the Company's Common Stock to conform
with any then applicable provisions of the Code or regulations issued
thereunder, or (iii) permit the granting of Options to members of the Committee.
No Option may be granted during any suspension, or after termination of the
Plan.
15. NO IMPLIED RIGHTS OR OBLIGATIONS
The Company, in establishing and maintaining this Plan as a voluntary
and unilateral undertaking, expressly disavows the creation of any rights in
Optionees or others claiming entitlements under the Plan or any obligations on
the part of the Company, any Subsidiary or the Committee, except as expressly
provided herein.
16. EMPLOYEES BASED OUTSIDE OF THE UNITED STATES
Notwithstanding any provision of the Plan to the contrary, in order to
foster and promote achievement of the purposes of the Plan or to comply with
provisions of laws or regulations in other countries in which the Company and
its subsidiaries operate or have employees, the Committee, in its sole
discretion, shall have the power and authority to (i) determine which employees
employed outside the United States are eligible to participate in the Plan, (ii)
modify the terms and conditions of any Options granted to employees who are
employed outside the United States and (iii) establish
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subplans, modified option exercise procedures and other terms and procedures to
the extent such actions may be necessary or advisable.
17. EFFECTIVE DATE
The effective date of the Plan shall be July 14, 1995.
18. TERMINATION DATE
Unless the Plan shall have been previously terminated by the Board or
the Operating Committee of the Board, the Plan shall terminate on July 31, 1998,
except as to Options theretofore granted and outstanding under the Plan at that
date, and no Option shall be granted after that date.
19. GOVERNING LAW
The Plan and all option agreements shall be construed in accordance with
and governed by the laws of the State of Delaware.
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