<PAGE>
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
QUARTER ENDED JUNE 28, 1996
Commission File No. 1-4850
COMPUTER SCIENCES CORPORATION
Incorporated in the State of Nevada
Employer Identification No. 95-2043126
2100 East Grand Avenue
El Segundo, California 90245
Telephone (310) 615-0311
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
56,219,835 shares of Common Stock, $1.00 par value, were outstanding on
June 28, 1996.
<PAGE>
COMPUTER SCIENCES CORPORATION
Index to Form 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets,
June 28, 1996 and March 29, 1996.............................. 3
Consolidated Condensed Statements of Income,
First quarter ended June 28, 1996 and
June 30, 1995................................................. 4
Consolidated Condensed Statements of Cash Flows,
First quarter ended June 28, 1996 and June 30, 1995........... 5
Notes to Consolidated Condensed Financial Statements............. 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................... 12
2
<PAGE>
<TABLE>
PART I, ITEM 1. FINANCIAL STATEMENTS
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
June 28, Mar. 29,
1996 1996
($ in thousands) (unaudited)
_____________ _____________
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,876 $ 104,867
Receivables 1,061,440 943,355
Prepaid expenses and other current assets 90,043 96,032
_____________ _____________
Total current assets 1,170,359 1,144,254
_____________ _____________
PROPERTY AND EQUIPMENT, at cost 1,261,059 1,147,448
Less accumulated depreciation and amortization 558,658 506,646
_____________ _____________
Property and equipment, net 702,401 640,802
_____________ _____________
EXCESS OF COST OF BUSINESSES ACQUIRED
OVER RELATED NET ASSETS, NET 435,789 420,775
OTHER ASSETS 395,057 389,959
_____________ _____________
Total assets $2,703,606 $2,595,790
============= =============
CURRENT LIABILITIES:
Short-term debt and current
maturities of long-term debt $ 68,845 $ 70,308
Accounts payable 150,895 151,361
Accrued payroll and related costs 221,196 196,221
Other accrued expenses 238,950 255,792
Advance contract payments 35,726 34,580
Income taxes payable 62,926 52,181
_____________ _____________
Total current liabilities 778,538 760,443
_____________ _____________
LONG-TERM DEBT, NET 437,724 405,471
_____________ _____________
OTHER LONG-TERM LIABILITIES 136,394 124,182
_____________ _____________
STOCKHOLDERS' EQUITY (Note A):
Common stock issued, par value $1.00 per share 56,544 56,342
Other stockholders' equity 1,294,406 1,249,352
_____________ _____________
Total stockholders' equity 1,350,950 1,305,694
_____________ _____________
Total liabilities and stockholders' equity $2,703,606 $2,595,790
============= =============
<FN>
See accompanying notes. 3
</TABLE>
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited)
($ in thousands except earnings per share)
<CAPTION>
First Quarter Ended
____________________________
June 28, June 30,
1996 1995
____________ ____________
<S> <C> <C>
Revenues $1,165,072 $966,783
____________ ____________
Costs of services 943,500 774,381
Selling, general and
administrative 94,728 85,893
Depreciation and
amortization 66,165 54,588
Interest expense 7,491 8,663
Interest income (1,360) (1,559)
____________ ____________
Total costs and
expenses 1,110,524 921,966
____________ ____________
Income before taxes 54,548 44,817
Taxes on income 21,300 17,100
____________ ____________
Net income $ 33,248 $ 27,717
============ ============
Earnings per common
share (Note B) $ 0.58 $ 0.49
============ ============
<FN>
See accompanying notes.
4
</TABLE>
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
First Quarter Ended
________________________
June 28, June 30,
($ in thousands) 1996 1995
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 33,248 $ 27,717
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 66,165 54,588
Provision for losses on accounts receivable 2,658 6,412
Changes in assets and liabilities, net of
effects of acquisitions:
Increase in assets (78,353) (99,960)
Decrease in liabilities (17,193) (47,519)
__________ __________
Net cash provided by (used in) operating activities 6,525 (58,762)
__________ __________
Investing activities:
Purchases of property, plant and equipment (60,218) (41,641)
Acquisitions, net of cash acquired (55,366) (22,377)
Outsourcing contracts (21,108)
Purchased and internally developed software (12,859) (3,933)
Other investing cash flows 2,415 (6,291)
__________ __________
Net cash used in investing activities (126,028) (95,350)
__________ __________
Financing activities:
Borrowing under (repayment of) commercial paper, net 27,009 (1,338)
(Repayment of) borrowing under lines of credit, net (3,297) 25,524
Principal payments on long-term debt (126) (715)
Proceeds from stock option transactions 5,753 3,493
Other financing cash flows 4,173 (923)
__________ __________
Net cash provided by financing activities 33,512 26,041
__________ __________
Net decrease in cash and cash equivalents (85,991) (128,071)
Cash and cash equivalents at beginning of year 104,867 155,310
__________ __________
Cash and cash equivalents at end of period $ 18,876 $ 27,239
========== ==========
<FN>
See accompanying notes.
5
</TABLE>
<PAGE>
COMPUTER SCIENCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
($ in thousands except per share amounts)
(A) No dividends were paid during the periods presented. There were
56,544,055 shares at June 28, 1996 and 56,341,855 shares at March
29, 1996 of $1.00 par value common stock issued with 324,220 and
311,928 shares, respectively, of treasury stock.
(B) Primary earnings per common share are based on the weighted average
number of common stock and common stock equivalent shares (dilutive stock
options) outstanding of 57,695,000 and 56,829,000 respectively, for the
three months ended June 28, 1996, and June 30, 1995 (see Part II,
Exhibit 11).
(C) Cash payments for interest on indebtedness were $10,539 and $12,084,
respectively, for the three months ended June 28, 1996, and June 30,
1995. Cash payments for taxes on income were $8,584 and $12,637,
respectively, for the three months ended June 28, 1996, and June
30, 1995.
(D) The financial information reported, which is not necessarily indicative
of the results for a full year, is unaudited but includes all adjustments
which the Company considers necessary for a fair presentation. All such
adjustments are normal recurring adjustments.
(E) On April 28, 1996, the Company entered into an Agreement and Plan of
Merger with The Continuum Company, Inc. ("Continuum") and Continental
Acquisition, Inc., a subsidiary of the Company ("Sub"), pursuant to which
Sub was merged with and into Continuum and Continuum became a wholly
owned subsidiary of the Company, effective August 1, 1996. Each
outstanding share of common stock of Continuum was converted into 0.79 of
a share of the Company's common stock. Continuum is a consulting and
computer services firm serving the needs of the global financial services
industry for computer software and services.
The merger will be accounted for as a pooling of interests. The
following unaudited pro forma data summarizes the combined operating
results of the Company and Continuum as if the merger had occurred at the
beginning of the periods presented (dollars in millions except per-share
amounts).
6
<PAGE>
<TABLE>
<CAPTION>
Unaudited Pro Forma First Quarter
---------------------------------
June 28, June 30,
1996 1995
------------- ----------
<S> <C> <C>
Revenue $1,303.9 $1,083.0
Net income 45.3 35.9
Earnings per common share* $ .58 $ .47
</TABLE>
[FN]
*The pro forma earnings per common share are based on the sum of the
historical average common shares outstanding, as reported by CSC, and the
historical average common shares outstanding for Continuum (adjusted to
reflect common stock equivalents) converted to CSC shares at the exchange
ratio of 0.79.
7
<PAGE>
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter of Fiscal 1997 versus
First Quarter of Fiscal 1996
Revenues
The Company derived its revenues from the following market sectors for the
first quarter (dollars in millions):
<TABLE>
<CAPTION>
First Quarter
---------------- Pct.
FY97 FY96 Growth
------- ------- ------
<S> <C> <C> <C>
U.S. Commercial $ 407 $345 17.8%
International 312 239 30.9
------- ------- ------
Total Commercial 719 584 23.2
U.S. Federal Government 446 383 16.5
------- ------- ------
Total $1,165 $967 20.5%
======= ======= ======
</TABLE>
During the quarter ended June 28, 1996, the Company's total revenue increased
20.5%, or $198 million, over the same period last year. Commercial revenue
continued to lead the growth, increasing 23.2%, or $135 million.
Over one-half of the commercial growth came from the Company's international
operations. International growth was primarily attributable to new
outsourcing contracts signed throughout the past year, including Anglian
Water, Guinness PLC and the National Health Service in Scotland, and the
acquisition of Datacentralen AG during June, 1996.
U.S. commercial revenues grew $62 million or 17.8%. Approximately one-half of
the growth was provided by new outsourcing business, including recent
contracts with James River Corporation and Southern New England Telephone
Company. U.S. consulting revenue also contributed to the growth, reflecting
demand across the Company's range of IT and management consulting services.
U.S. federal government revenue for the quarter increased $63 million, or
16.5%, principally from increased task order contract activity with the
Department of Defense and last year's award to provide IT services to the Air
Force Arnold Engineering Development Center. The many new and existing task
order contracts permit the Government discretion in the extent and timing of
new orders.
During the first quarter of fiscal 1997, the Company announced a $2 billion
contract with J.P. Morgan won by a CSC-led consortium (the Pinnacle Alliance).
The contract became effective July 16.
8
<PAGE>
As the Company's commercial sector revenues continue to grow faster than
federal, they comprised a larger percentage of total CSC revenue, as shown by
the following table:
<TABLE>
<CAPTION>
Revenue by Market Sector, First Quarter
as a percentage of total FY97 FY96
- ---------------------------- ------- -------
<S> <C> <C>
U.S. Commercial 35% 36%
International 27 24
------- -------
Total Commercial 62 60
U.S. Federal Government 38 40
------- -------
Total Revenue 100% 100%
======= =======
</TABLE>
Costs and Expenses
The Company's costs and expenses as a percentage of revenue are as follows
(dollars in millions):
<TABLE>
<CAPTION>
Percentage of
Dollar Amount Revenue
---------------- --------------
First Quarter First Quarter
FY97 FY96 FY97 FY96
------- ------- ------ ------
<S> <C> <C> <C> <C>
Costs of services $ 944 $774 80.98% 80.10%
Selling, general & admin. 95 86 8.13 8.88
Depreciation and amort. 66 55 5.68 5.65
Interest expense, net 6 7 0.53 0.73
------- ------- ------ ------
Total $1,111 $922 95.32% 95.36%
======= ======= ====== ======
</TABLE>
Compared with the first quarter of fiscal 1996, total costs and expenses
improved slightly as a percentage of revenue for the first quarter of fiscal
1997. Costs of services improved nominally in the U.S., offset by lower
utilization and increased use of subcontractor labor in the Company's European
operations. Although the European costs of services increased as a percentage
of revenue, the European operations improved their selling, general and
administrative cost percentage as compared to the same quarter last year. The
European improvement contributed to the overall reduction in the selling,
general and administrative percentage from 8.88% during last year's first
quarter to 8.13% for the current year's first quarter.
9
<PAGE>
Income Before Taxes
Income before taxes for the quarter was $54.5 million, up $9.7 million, or
21.7%, over last year's first quarter, reflecting the Company's revenue
growth. The Company's pre-tax profit margin improved from 4.64% to 4.68% for
the two respective quarters.
Net Income
Net income was $33.2 million for the first quarter of fiscal 1997, up $5.5
million, or 20.0%, over the same quarter last year. The effective tax rate
was 39.0%, versus 38.2%. The higher current tax rate is primarily due to
lower utilization of foreign tax credits and the suspension of the research
and engineering tax credit in the U.S. This year's first quarter earnings per
share of 58 cents increased 18.4% over the 49 cents for last year's first
quarter.
Cash Flows
Cash provided by operating activities was $6.5 million for the first quarter
of fiscal 1997, compared with cash used of $58.8 million during the same
period last year. The increase in operating cash flows is principally due to
favorable changes in working capital and higher non-cash expenses for
depreciation and amortization.
The Company's cash expenditures for investing activities totaled $126.0
million for the current period versus $95.4 million during the first quarter
of last year. The increase principally relates to the acquisition of
Datacentralen during the current quarter.
Cash provided by financing activities was $33.5 million for the three months
versus $26.0 million for the same period last year.
Financial Condition
During the first three months of fiscal 1997, the Company's capital outlays
included $115.6 million of business investments in the form of fixed asset
purchases and acquisitions. These amounts were funded from operating cash
flows, additional debt and existing cash, which decreased from $104.9 million
to $18.9 million. As a result of the net increase in borrowings, the
Company's debt-to-total capitalization ratio increased slightly to 27.3% at
June 28, 1996 versus 26.7% at March 29, 1996.
It is management's opinion that the Company will be able to meet its liquidity
and cash needs for the foreseeable future through the combination of cash
flows from operating activities, unused borrowing capacity and other financing
activities, including the issuance of debt and/or equity securities.
10
<PAGE>
Recent Developments
On April 28, 1996, the Company entered into an Agreement and Plan of Merger
with The Continuum Company, Inc. ("Continuum") and Continental Acquisition,
Inc., a subsidiary of the Company ("Sub") pursuant to which Sub was merged
with and into Continuum and Continuum became a wholly owned subsidiary of CSC,
effective August 1, 1996. Each outstanding share of common stock of Continuum
was converted into 0.79 of a share of CSC common stock. Continuum is a
consulting and computer services firm serving the needs of the global
financial services industry for computer software and services.
11
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
a. Exhibits
<S> <C> <C>
2.1 Agreement and Plan of Merger dated as of April 28, 1996 by
and among the Registrant, The Continuum Company, Inc. and
Continental Acquisition, Inc. (l)
3.1 Restated Articles of Incorporation, effective
October 31, 1988 (c)
3.2 Amendment to Restated Articles of Incorporation, effective
August 10, 1992 (i)
3.3 Amendment to Restated Articles of Incorporation, effective
July 31, 1996 (m)
3.4 Bylaws, amended and restated effective July 31, 1996
10.1 Annual Management Incentive Plan, effective April 2, 1983* (a)
10.2 1978 Stock Option Plan, amended and restated effective
March 31, 1988*
10.3 1980 Stock Option Plan, amended and restated effective
March 31, 1988*
10.4 1984 Stock Option Plan, amended and restated effective
March 31, 1988*
10.5 1987 Stock Incentive Plan* (b)
10.6 Schedule to the 1987 Stock Incentive Plan for United
Kingdom personnel* (b)
10.7 1990 Stock Incentive Plan* (g)
10.8 1992 Stock Incentive Plan, amended and restated effective
August 9, 1993*
10.9 1995 Stock Incentive Plan* (j)
10.10 Deferred Compensation Plan, amended and restated effective
February 9, 1996* (f)
10.11 Restated Supplemental Executive Retirement Plan, effective
August 14, 1995* (j)
10.12 Form of Indemnification Agreement for Directors (d)
10.13 Form of Indemnification Agreement for Officers (e)
10.14 Information Technology Services Agreements with General
Dynamics Corporation, dated as of November 4, 1991 (h)
10.15 $100 million Credit Agreement dated as of September 15, 1994 (e)
10.16 $150 million Credit Agreement dated as of September 15, 1994 (e)
10.17 $350 million Credit Agreement dated as of September 6, 1995 (j)
10.18 $100 million Credit Agreement dated as of January 3, 1995 (e)
10.19 Amended and Restated Rights Agreement, effective
October 30, 1995 (j)
11 Calculation of Primary and Fully Diluted Earnings Per Share
27 Article 5 Financial Data Schedule
28 Revenues by Market Sector
99.1 Annual Report on Form 11-K for the Matched Asset Plan of
the Registrant (f)
99.2 Annual Report on Form 11-K for the Hourly Savings Plan of
CSC Outsourcing Inc. (f)
99.3 Annual Report on Form 11-K for the Employee Savings Plan of
CSC Credit Services, Inc. (to be filed at a later date)
99.4 Annual Report on Form 11-K for the CUTW Hourly Savings Plan
of CSC Outsourcing, Inc. (k)
</TABLE>
12
<PAGE>
Notes to Exhibit Index:
*Management contract or compensatory plan or agreement
(a)-(i) These exhibits are incorporated herein by reference to the
Company's Annual Report on Form 10-K, as amended, for the fiscal
years ended on the respective dates indicated below:
(a) March 30, 1984 (d) April 3, 1992
(b) April 1, 1988 (e) March 31, 1995
(c) March 31, 1989 (f) March 29, 1996
(g) Incorporated herein by reference to the Registrant's Registration
Statement on Form S-8 filed on August 15, 1990.
(h) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated November 4, 1991.
(i) Incorporated herein by reference to the Registrant's Proxy
Statement for its August 10, 1992 Annual Meeting of Stockholders.
(j) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on November 13, 1995.
(k) Incorporated herein by reference to the Annual Report on Form 11-K
for the CSC Outsourcing, Inc. CUTW Hourly Savings Plan filed on
February 6, 1996.
(l) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated April 28, 1996.
(m) Incorporated herein by reference to the Registrant's Proxy
Statement for its July 31, 1996 Annual Meeting of Stockholders.
Reports on Form 8-K
There was one report on Form 8-K filed during the first quarter of fiscal
1997. On May 2, 1996, the Registrant filed a Current Report on Form 8-K
dated April 28, 1996 reporting that the Registrant had entered into an
Agreement and Plan of Merger dated as of April 28, 1996 by and among the
Registrant, Continental Acquisition, Inc., a wholly owned subsidiary of
the Registrant, and The Continuum Company, Inc.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPUTER SCIENCES CORPORATION
Date: August 9, 1996 By: /s/ Denis M. Crane
-----------------------------
Denis M. Crane
Vice President and Controller
Chief Accounting Officer
14
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit Page
- ------- ---------------------- ----
<S> <C> <C>
2.1 Agreement and Plan of Merger dated as of April 28, 1996 by
and among the Registrant, The Continuum Company, Inc. and
Continental Acquisition, Inc. (l)
3.1 Restated Articles of Incorporation, effective
October 31, 1988 (c)
3.2 Amendment to Restated Articles of Incorporation, effective
August 10, 1992 (i)
3.3 Amendment to Restated Articles of Incorporation, effective
July 31, 1996 (m)
3.4 Bylaws, amended and restated effective July 31, 1996
10.1 Annual Management Incentive Plan, effective April 2, 1983* (a)
10.2 1978 Stock Option Plan, amended and restated effective
March 31, 1988*
10.3 1980 Stock Option Plan, amended and restated effective
March 31, 1988*
10.4 1984 Stock Option Plan, amended and restated effective
March 31, 1988*
10.5 1987 Stock Incentive Plan* (b)
10.6 Schedule to the 1987 Stock Incentive Plan for United
Kingdom personnel* (b)
10.7 1990 Stock Incentive Plan* (g)
10.8 1992 Stock Incentive Plan, amended and restated effective
August 9, 1993*
10.9 1995 Stock Incentive Plan* (j)
10.10 Deferred Compensation Plan, amended and restated effective
February 9, 1996* (f)
10.11 Restated Supplemental Executive Retirement Plan, effective
August 14, 1995* (j)
10.12 Form of Indemnification Agreement for Directors (d)
10.13 Form of Indemnification Agreement for Officers (e)
10.14 Information Technology Services Agreements with General
Dynamics Corporation, dated as of November 4, 1991 (h)
10.15 $100 million Credit Agreement dated as of September 15, 1994 (e)
10.16 $150 million Credit Agreement dated as of September 15, 1994 (e)
10.17 $350 million Credit Agreement dated as of September 6, 1995 (j)
10.18 $100 million Credit Agreement dated as of January 3, 1995 (e)
10.19 Amended and Restated Rights Agreement, effective
October 30, 1995 (j)
11 Calculation of Primary and Fully Diluted Earnings Per Share
28 Revenues by Market Sector
27 Article 5 Financial Data Schedule
99.1 Annual Report on Form 11-K for the Matched Asset Plan of
the Registrant (f)
99.2 Annual Report on Form 11-K for the Hourly Savings Plan of
CSC Outsourcing Inc. (f)
99.3 Annual Report on Form 11-K for the Employee Savings Plan of
CSC Credit Services, Inc. (to be filed at a later date)
99.4 Annual Report on Form 11-K for the CUTW Hourly Savings Plan
of CSC Outsourcing, Inc. (k)
</TABLE>
15
<PAGE>
Notes to Exhibit Index:
*Management contract or compensatory plan or agreement
(a)-(i) These exhibits are incorporated herein by reference to the
Company's Annual Report on Form 10-K, as amended, for the fiscal
years ended on the respective dates indicated below:
(a) March 30, 1984 (d) April 3, 1992
(b) April 1, 1988 (e) March 31, 1995
(c) March 31, 1989 (f) March 29, 1996
(g) Incorporated herein by reference to the Registrant's Registration
Statement on Form S-8 filed on August 15, 1990.
(h) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated November 4, 1991.
(i) Incorporated herein by reference to the Registrant's Proxy
Statement for its August 10, 1992 Annual Meeting of Stockholders.
(j) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on November 13, 1995.
(k) Incorporated herein by reference to the Annual Report on Form 11-K
for the CSC Outsourcing, Inc. CUTW Hourly Savings Plan filed on
February 6, 1996.
(l) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated April 28, 1996.
(m) Incorporated herein by reference to the Registrant's Proxy
Statement for its July 31, 1996 Annual Meeting of Stockholders.
16
EXHIBIT 3.4
BYLAWS
OF
COMPUTER SCIENCES CORPORATION
As amended July 31, 1996
<PAGE>
BYLAWS
OF
COMPUTER SCIENCES CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office.
----------------
The principal office of the corporation in the State of Nevada shall be in the
City of Reno, County of Washoe.
Section 2. Other Offices.
-------------
The corporation may also have offices in such other places, both within and
without the State of Nevada, as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Annual Meetings.
------------------------
Annual meetings of the stockholders shall be held at the office of the
corporation in the City of El Segundo, State of California or at such other
place, within or without the State of California, as shall be designated by
the Board of Directors.
Section 2. Date of Annual Meetings; Election of Directors.
----------------------------------------------
Annual meetings of the stockholders shall be held on the second Monday in
August, if not a legal holiday, and if a legal holiday, then on the next
secular day following at 2:00 p.m., or at such other time and date as the
Board of Directors shall determine. At such annual meeting, the stockholders
of the corporation shall elect a Board of Directors and transact such other
business as may properly be brought before the meeting.
Section 3. Special Meetings.
----------------
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute or by the Articles of Incorporation, may be
called by the Chairman of the Board, the Board of Directors, or by the
president and shall be called by the president or secretary at the request in
writing of a majority of the Board of Directors or at the request in writing
of stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purposes of the proposed meeting and shall be directed to the
Chairman of the Board, the president, the vice president, or the secretary by
anyone entitled to call a special meeting of stockholders.
Section 4. Notices of Meetings.
-------------------
Notices of meetings of the stockholders shall be in writing and signed by the
president, a vice president, the
<PAGE>
secretary, an assistant secretary, or by such other person or persons as the
directors shall designate. Such notice shall state the purpose or purposes
for which the meeting is called and the time when, and the place where, it is
to be held. A copy of such notice shall be either delivered personally or
shall be mailed, postage prepaid, to each stockholder of record entitled to
vote at such meeting not less than ten (10) nor more than sixty (60) days
before such meeting. If mailed, it shall be directed to the stockholder at
his address as it appears upon the records of the corporation and upon such
mailing of any such notice, the service thereof shall be complete, and the
time of the notice shall begin to run from the date upon which such notice is
deposited in the mail for transmission to such stockholder. If no such
address appears on the books of the corporation and a stockholder has given no
address for the purpose of notice, then notice shall be deemed to have been
given to such stockholder if it is published at least once in a newspaper of
general circulation in the county in which the principal executive office of
the corporation is located. An affidavit of the mailing or publication of any
such notice shall be prima facie evidence of the giving of such notice.
Personal delivery of any such notice to any officer of a corporation or
association, or to any member of a partnership shall constitute delivery of
such notice to such corporation, association or partnership. If any notice
addressed to the stockholder at the address of such stockholder appearing on
the books of the corporation is returned to the corporation by the United
States Postal Service marked to indicate that it is unable to deliver the
notice to the stockholder at such address, all future notices shall be deemed
to have been duly given to such stockholder, without further mailing, if the
same shall be available for the stockholder upon written demand of the
stockholder at the principal executive office of the corporation for a period
of one year from the date of the giving of the notice to all other
stockholders.
Section 5. Quorum.
------
The holders of a majority of the stock issued and outstanding and entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business,
except as otherwise provided by the statutes of Nevada or by the Articles of
Incorporation. Regardless of whether or not a quorum is present or
represented at any annual or special meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
in person or represented by proxy, provided that when any stockholders'
meeting is adjourned for more than forty-five (45) days, or if after
adjournment a new record date is fixed for the adjourned meeting, notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. At such adjourned meeting at which a quorum shall be
present or represented by proxy, any business may be transacted which might
have been transacted at the meeting as originally noticed.
2
<PAGE>
Section 6. Vote Required.
-------------
When a quorum is present or represented at any meeting, the holders of a
majority of the stock present in person or represented by proxy and voting
shall decide any question brought before such meeting, unless the question is
one upon which, by express provision of the statutes of Nevada or of the
Articles of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
Section 7. Cumulative Voting.
-----------------
Except as otherwise provided in the Articles of Incorporation, every
stockholder of record of the corporation shall be entitled at each meeting of
the stockholders to one vote for each share of stock standing in his name on
the books of the corporation. At all elections of directors of this
corporation, each holder of shares of capital stock possessing voting power
shall be entitled to as many votes as shall equal the number of his shares of
stock multiplied by the number of directors to be elected, and he may cast all
of such votes for a single director or may distribute them among the number to
be voted for or any two or more of them, as he may see fit. The stockholders
of this corporation and any proxyholders for such stockholders are entitled to
exercise the right to cumulative voting at any meeting held for the election
of directors if: (a) not less than forty-eight (48) hours before the time
fixed for holding such meeting, if notice of the meeting has been given at
least ten (10) days prior to the date of the meeting, and otherwise not less
than twenty-four (24) hours before such time, a stockholder of this
corporation has given notice in writing to the president or secretary of the
corporation that he desires that the voting at such election of directors
shall be cumulative; and (b) at such meeting, prior to the commencement of
voting for the election of directors, an announcement of the giving of such
notice has been made by the chairman or the secretary of the meeting or by or
on behalf of the stockholder giving such notice. Notice to stockholders of
the requirements of the preceding sentence shall be contained in the notice
calling such meeting or in the proxy material accompanying such notice.
Section 8. Conduct of Meetings.
-------------------
Subject to the requirements of the statutes of Nevada, and the express
provisions of the Articles of Incorporation and these Bylaws, all annual and
special meetings of stockholders shall be conducted in accordance with such
rules and procedures as the Board of Directors may determine and, as to
matters not governed by such rules and procedures, as the chairman of such
meeting shall determine. The chairman of any annual or special meeting of
stockholders shall be designated by the Board of Directors and, in the absence
of any such designation, shall be the president of the corporation.
Section 9. Proxies.
-------
At any meeting of the stockholders, any stockholder may be represented and
vote by a proxy or proxies appointed by an instrument in writing. In the
event that such instrument in writing shall designate
3
<PAGE>
two or more persons to act as proxies, a majority of such persons present at
the meeting, or, if only one shall be present, then that one shall have and
may exercise all of the powers conferred by such written instrument upon all
of the persons so designated unless the instrument shall otherwise provide.
No such proxy shall be valid after the expiration of six (6) months from the
date of its execution, unless coupled with an interest, or unless the person
executing it specifies therein the length of time for which it is to continue
in force, which in no case shall exceed seven (7) years from the date of its
execution. Subject to the above, any proxy duly executed is not revoked and
continues in full force and effect until (i) an instrument revoking it or duly
executed proxy bearing a later date is filed with the secretary of the
corporation or, (ii) the person executing the proxy attends such meeting and
votes the shares subject to the proxy, or (iii) written notice of the death or
incapacity of the maker of such proxy is received by the corporation before
the vote pursuant thereto is counted.
Section 10. Action by Written Consent.
-------------------------
Any action, except election of directors, which may be taken by a vote of the
stockholders at a meeting, may be taken without a meeting and without notice
if authorized by the written consent of stockholders holding at least three-
fourths of the voting power.
Section 11. Inspectors of Election.
----------------------
In advance of any meeting of stockholders, the Board of Directors may appoint
inspectors of election to act at such meeting and any adjournment thereof. If
inspectors of election are not so appointed, or if any persons so appointed
fail to appear or refuse to act, then, unless other persons are appointed by
the Board of Directors prior to the meeting, the chairman of any such meeting
may, and on the request of any stockholder or a stockholder proxy shall,
appoint inspectors of election (or persons to replace those who fail to appear
or refuse to act) at the meeting. The number of inspectors shall not exceed
three.
The duties of such inspectors shall include: (a) determining the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, and the authenticity, validity and effect
of proxies; (b) receiving votes, ballots or consents; (c) hearing and
determining all challenges and questions in any way arising in connection with
the right to vote; (d) counting and tabulating all votes or consents and
determining the result; and (e) taking such other action as may be proper to
conduct the election or vote with fairness to all stockholders. In the
determination of the validity and effect of proxies, the dates contained on
the forms of proxy shall presumptively determine the order of execution of the
proxies, regardless of the postmark dates on the envelopes in which they are
mailed. The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical.
If there are three inspectors of election, the decision, act or certificate of
a majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima
facie evidence of the facts stated therein.
4
<PAGE>
ARTICLE III
DIRECTORS
Section 1. Number of Directors.
-------------------
The exact number of directors which shall constitute the whole Board shall be
eight (8), all of whom shall be at least 18 years of age. The authorized
number of directors may from time to time be increased to not more than
fifteen (15) or decreased to not less than three (3) by resolution of the
directors of the corporation amending this section of the Bylaws. The
directors shall be elected at the annual meeting of the stockholders, but if
for any reason the directors are not elected at the annual meeting of the
stockholders, they may be elected at any special meeting of the stockholders
which is called and held for that purpose. Except as provided in Section 2 of
this Article III, each director elected shall hold office until his successor
is elected and qualified. Directors need not be stockholders.
Section 2. Vacancies.
---------
Vacancies, including those caused by (i) the death, removal, or resignation of
directors, (ii) the failure of stockholders to elect directors at any annual
meeting, and (iii) an increase in the number of directors, may be filled by a
majority of the remaining directors though less than a quorum. When one or
more directors shall give notice of his or their resignation to the Board,
effective at a future date, the acceptance of such resignation shall not be
necessary to make it effective. The Board shall have power to fill such
vacancy or vacancies to take effect when such resignation or resignations
shall become effective, each director so appointed to hold office during the
remainder of the term of office of the resigning director or directors. The
Board of Directors may remove any director for cause. Any director may be
removed from office by the vote or written consent of stockholders of the
corporation representing not less than two-thirds (2/3) of its issued and
outstanding capital stock entitled to voting power. The provisions in the
preceding sentence notwithstanding, no director of this corporation shall be
removed from office under the provisions of this section except upon the vote
or written consent of stockholders owning sufficient shares to have prevented
his election to office in the first instance.
Section 3. Authority.
---------
The business of the corporation shall be managed and all corporate powers
shall be exercised by or under the direction of the Board of Directors.
Section 4. Meetings.
--------
The Board of Directors of the corporation may hold meetings, both regular and
special, at such place, either within or without the State of Nevada, which
has been designated by resolution of the Board of Directors. In the absence
of such designation, meetings shall be held at the office of the corporation
in the City of El Segundo, State of California.
Section 5. First Meeting.
-------------
The first meeting of the newly elected Board of Directors shall be held
immediately following the annual meeting of the stockholders and no notice of
such meeting to the newly elected directors shall be
5
<PAGE>
necessary in order legally to constitute a meeting, provided a quorum shall be
present.
Section 6. Regular Meetings.
----------------
Regular meetings of the Board of Directors may be held without notice at such
time and place as shall from time to time be determined by the Board.
Section 7. Special Meetings.
----------------
Special meetings of the Board of Directors may be called by the Chairman of
the Board, or the president and shall be called by the president or secretary
at the written request of two directors. Notice of the time and place of
special meetings shall be given within 30 days to each director (a) personally
or by telephone or telegraph, in each case at least three (3) days prior to
the holding of the meeting, or (b) by mail, charges prepaid, addressed to him
at his address as it is shown upon the records of the corporation or, if it is
not so shown on such records and is not readily ascertainable, at the place at
which the meetings of the directors are regularly held, at least three (3)
days prior to the holding of the meeting. Notice by mail shall be deemed to
have been given at the time a written notice is deposited in the United States
mails, postage prepaid. Any other written notice shall be deemed to have been
given at the time it is personally delivered to the recipient or is delivered
to a common carrier for transmission, or actually transmitted by the person
giving the notice by electronic means, to the recipient. Oral notice shall be
deemed to have been given at the time it is communicated, in person or by
telephone or wireless, to the recipient or to a person at the office of the
recipient who the person giving the notice has reason to believe will promptly
communicate it to the recipient. Any notice, waiver of notice or consent to
holding a meeting shall state the time, date and place of the meeting but need
not specify the purpose of the meeting.
Section 8. Quorum.
------
Presence in person of a majority of the Board of Directors, at a meeting duly
assembled, shall be necessary to constitute a quorum for the transaction of
business and the act of a majority of the directors present and voting at any
meeting, at which a quorum is then present, shall be the act of the Board of
Directors, except as may be otherwise specifically provided by the statutes of
Nevada or by the Articles of Incorporation. A meeting at which a quorum is
initially present shall not continue to transact business in the absence of a
quorum.
Section 9. Action by Written Consent.
-------------------------
Unless otherwise restricted by the Articles of Incorporation or by these
Bylaws, any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if a written consent thereto
is signed by all members of the Board. Such written consent shall be filed
with the minutes of proceedings of the Board of Directors.
Section 10. Telephonic Meetings.
-------------------
Unless otherwise restricted by the Articles of Incorporation or these Bylaws,
members of the Board of Directors or of
6
<PAGE>
any committee designated by the Board of Directors may participate in a
meeting of the Board or committee by means of a conference telephone network
or a similar communications method by which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to the
preceding sentence constitutes presence in person at such meeting.
Section 11. Adjournment.
-----------
A majority of the directors present at any meeting, whether or not a quorum is
present, may adjourn any directors' meeting to another time, date and place.
If any meeting is adjourned for more than twenty-four (24) hours, notice of
any adjournment to another time, date and place shall be given, prior to the
time of the adjourned meeting, to the directors who were not present at the
time of adjournment. If any meeting is adjourned for less than twenty-four
(24) hours, notice of any adjournment shall be given to absent directors,
prior to the time of the adjourned meeting, unless the time, date and place is
fixed at the meeting adjourned.
Section 12. Committees.
----------
The Board of Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees of the Board of Directors. Such
committee or committees shall have such name or names, shall have such duties
and shall exercise such powers as may be determined from time to time by the
Board of Directors.
Section 13. Committee Minutes.
-----------------
The committees shall keep regular minutes of their proceedings and report the
same to the Board of Directors.
Section 14. Compensation of Directors.
-------------------------
The directors shall receive such compensation for their services as directors,
and such additional compensation for their services as members of any
committees of the Board of Directors, as may be authorized by the Board of
Directors.
Section 15. Mandatory Retirement of Directors.
---------------------------------
Notwithstanding anything to the contrary in these Bylaws, a director shall not
serve beyond and shall automatically retire at the close of the meeting of the
Board of Directors held during the first month after December, 1992 in which
such director shall be age 72 or older. If no meeting of the Board of
Directors is held during such month, the director shall automatically retire
as of the last day of such month.
ARTICLE IV
OFFICERS
Section 1. Principal Officers.
------------------
The officers of the corporation shall be elected by the Board of Directors and
shall be a president, a secretary and a treasurer. A resident agent for the
corporation in the State of Nevada shall be designated by the Board of
Directors. Any person may hold two or more offices.
7
<PAGE>
Section 2. Other Officers.
--------------
The Board of Directors may also elect one or more vice presidents, assistant
secretaries and assistant treasurers, and such other officers and agents, as
it shall deem necessary.
Section 3. Qualification and Removal.
-------------------------
The officers of the corporation mentioned in Section 1 of this Article IV
shall hold office until their successors are elected and qualify. Any such
officer and any other officer elected by the Board of Directors may be removed
at any time by the affirmative vote of a majority of the Board of Directors.
Section 4. Resignation.
-----------
Any officer may resign at any time by giving written notice to the
corporation, without prejudice, however, to the rights, if any, of the
corporation under any contract to which such officer is a party. Any such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 5. Powers and Duties; Execution of Contracts.
-----------------------------------------
Officers of this corporation shall have such powers and duties as may be
determined by the Board of Directors. Unless otherwise specified by the Board
of Directors, the president shall be the chief executive officer of the
corporation. Contracts and other instruments in the normal course of business
may be executed on behalf of the corporation by the president or any vice
president of the corporation, or any other person authorized by resolution of
the Board of Directors.
ARTICLE V
STOCK AND STOCKHOLDERS
Section 1. Issuance.
--------
Every stockholder shall be issued a certificate representing the number of
shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one series of
any class, the certificate shall contain a statement setting forth the office
or agency of the corporation from which stockholders may obtain a copy of a
statement or summary of the designations, preferences and relative or other
special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights. The corporation
shall furnish to its stockholders, upon request and without charge, a copy of
such statement or summary.
Section 2. Facsimile Signatures.
--------------------
Whenever any certificate is countersigned or otherwise authenticated by a
transfer agent or transfer clerk, and by a registrar, then a facsimile of the
signatures of the officers of the corporation may be printed or lithographed
upon such certificate in lieu of the actual signatures. In case any officer
or officers who shall have signed, or whose facsimile signature or signatures
shall have been used on, any such certificate or certificates shall cease to
be such officer or officers of the corporation, before such certificates shall
8
<PAGE>
have been delivered by the corporation, such certificates may nevertheless be
issued as though the person or persons who signed such certificates, had not
ceased to be an officer of the corporation.
Section 3. Lost Certificates.
-----------------
The Board of Directors may direct a new stock certificate to be issued in
place of any certificate alleged to have been lost or destroyed, and may
require the making of an affidavit of that fact by the person claiming the
stock certificate to be lost or destroyed. When authorizing such issue of a
new certificate, the Board of Directors may, in its discretion and as a
condition precedent, require the owner of the lost or destroyed certificate to
give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
Section 4. Transfer of Stock.
-----------------
Upon surrender to the corporation or the transfer agent of the corporation of
a certificate for shares duly endorsed for transfer, it shall be the duty of
the corporation to issue a new certificate, cancel the old certificate and
record the transaction upon its books.
Section 5. Record Date.
-----------
The directors may fix a date not more than sixty (60) days prior to the
holding of any meeting as the date as of which stockholders entitled to notice
of and to vote at such meeting shall be determined; and only stockholders of
record on such day shall be entitled to notice or to vote at such meeting. If
no record date is fixed by the Board of Directors (a) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the sixtieth (60th) day preceding the day on which the
meeting is held; (b) the record date for determining stockholders entitled to
give consent to corporate action in writing without a meeting, when no prior
action by the Board has been taken, shall be the day on which the first
written consent is given; and (c) the record date for determining stockholders
for any other purpose shall be the day on which the Board of Directors adopts
the resolution relating thereto, or the sixtieth (60th) day prior to the date
of such action, whichever is later. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting unless the Board of Directors fixes a new
record date for the adjourned meeting, but the Board of Directors shall fix a
new record date if the meeting is adjourned for more than forty-five (45) days
from the date set for the original meeting.
Section 6. Registered Stock.
----------------
The corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to
vote as such owner and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the statutes of Nevada.
9
<PAGE>
Section 7. Dividends.
---------
In the event a dividend is declared, the stock transfer books will not be
closed but a record date will be fixed by the Board of Directors and only
shareholders of record on that date shall be entitled to the dividend.
ARTICLE VI
INDEMNIFICATION
Section 1. Indemnity of Directors, Officers and Agents.
-------------------------------------------
The corporation shall indemnify any director or officer and may, as authorized
by the Board of Directors, indemnify any other employee or agent of the
corporation who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
Section 2. Derivative Actions.
------------------
The corporation shall indemnify any director or officer and may, as authorized
by the Board of Directors, indemnify any other employee or agent of the
corporation who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, but no indemnification shall be made in respect of any claim,
issue or matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action or suit
10
<PAGE>
was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
Section 3. Successful Defense.
------------------
To the extent that a director or officer and, as authorized by the Board of
Directors, any other employee or agent of the corporation has been successful
on the merits or otherwise in defense of any action or proceeding mentioned in
this Article VI or in defense of any claim issue or matter therein, he shall
be indemnified by the corporation against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with such defense.
Section 4. Determination of Entitlement to Indemnity.
-----------------------------------------
Any indemnification under this Article VI, unless ordered by a court, shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in this Article VI. Such determination shall be made (a) by
the stockholders; (b) by the Board of Directors by majority vote of a quorum
consisting of directors who were not parties to such act, suit or proceeding;
(c) if such a quorum of disinterested directors so orders, by independent
legal counsel in a written opinion; or (d) if such a quorum of disinterested
directors cannot be obtained, by independent legal counsel in a written
opinion.
Section 5. Advancement of Expenses.
-----------------------
Expenses incurred in defending a civil or criminal action, suit or proceeding
may be paid by the corporation in advance of the final disposition of such
action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the corporation as
authorized in this section.
Section 6. Persons Entitled to Indemnity.
-----------------------------
The indemnification provided by this Article VI: (a) does not exclude any
rights to which a person seeking indemnification may be entitled under any
statute of the State of Nevada, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office; and
(b) shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 7. Purchase of Insurance.
---------------------
The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted
11
<PAGE>
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Exercise of Rights.
------------------
All rights incident to any and all shares of another corporation or
corporations standing in the name of this corporation may be exercised by such
officer, agent or proxyholder as the Board of Directors may designate. In the
absence of such designation, such rights may be exercised by the Chairman of
the Board or the president of this corporation, or by any other person
authorized to do so by the Chairman of the Board or the president of this
corporation. Except as provided below, shares of this corporation owned by
any subsidiary of this corporation shall not be entitled to vote on any
matter. Shares of this corporation held by this corporation in a fiduciary
capacity and shares of this corporation held in a fiduciary capacity by any
subsidiary of this corporation, shall not be entitled to vote on any matter,
except to the extent that the settler or beneficial owner possesses and
exercises a right to vote or to give this corporation or such subsidiary
binding instructions as to how to vote such shares.
Solely for purposes of Section 1 of this Article VII, a "subsidiary" of this
corporation shall mean a corporation, shares of which possessing more than
fifty percent (50%) of the power to vote for the election of directors at the
time determination of such voting power is made, are owned directly, or
indirectly through one or more subsidiaries, by this corporation.
Section 2. Interpretation.
--------------
Unless the context of a Section of these Bylaws otherwise requires, the terms
used in these Bylaws shall have the meanings provided in, and these Bylaws
shall be construed in accordance with the Nevada statutes relating to private
corporations, as found in Chapter 78 of the Nevada Revised Statutes or any
subsequent statute.
ARTICLE VIII
AMENDMENTS
Section 1. Stockholder Amendments.
----------------------
Bylaws may be adopted, amended or repealed by the affirmative vote or written
consent of a majority of the outstanding voting shares of this corporation,
except as otherwise provided by the statutes of Nevada, the Articles of
Incorporation or elsewhere in these Bylaws.
Section 2. Amendments by Board of Directors.
--------------------------------
Subject to the right of stockholders as provided in Section 1 of this Article
VIII, Bylaws may be adopted, amended or repealed by the Board of Directors.
12
EXHIBIT 10.2
COMPUTER SCIENCES CORPORATION
1978 STOCK OPTION PLAN
As amended March 31, 1988
Section 1: PURPOSE OF PLAN
The purpose of this 1978 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.
Section 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.
<PAGE>
Section 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 canceled without having been fully exercised, the number of shares as to
which such option was not exercised may again be optioned hereunder.
Section 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, (i) the number of shares
then subject to the Plan, (ii) the option price and the number of shares which
may be subject to options granted at option prices of $ 1.00 per share under
paragraph 6 (b) and (iii) 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.
Section 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.
Section 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. 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
2
<PAGE>
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; provided, however that options for up to 200,000 shares may
be granted by the Committee at option prices of $1.00 per share.
(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 not less than one year from the date the option was
granted; (ii) the option shall become exercisable as to not more than 20% of
the shares covered thereby not less than one year after the date the option
was granted and shall become exercisable as to not more than an additional 20%
of the shares covered thereby on 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 ten days prior to
the expiration of the tenth year after the date the option was 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 (i)
died; (ii) suffered a permanent disability; (iii) retired at age 65 or older,
or (iv) retired at age 55 or older (but less than age 65) with more than ten
years of continuous employment with the Company, and whose contributions to
the affairs of the Company have been determined by the Board of Directors of
the Company to be outstanding may, at the discretion of the Board of Directors
of the Company, be exercisable immediately 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 plus thirty days 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, 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 in the event of an
option holder's incapacity. In the event of termination of employment of an
option holder because of death, any option may, prior to cancellation or
expiration of such option, be exercised in whole or in part by
3
<PAGE>
any person empowered to do so under any deceased option holder's will or under
the then applicable laws of recent and distribution. 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, in a manner prescribed by the Committee, of a notice in writing (an
"Exercise Notice") stating that such option or a specified part thereof is
exercised. The purchase price on each exercise of an option shall be the
option price times the number of shares with respect to which such option or
part thereof is exercised. Except as hereinafter provided with respect to
option holders who exercise options prior to termination of employment with
the Company, the purchase price shall be paid in cash or by certified or
cashier's check accompanying the Exercise Notice. If the option is exercised
by an option holder prior to termination of employment with the Company, he or
she may elect in the Exercise Notice not to pay the entire purchase price
pursuant to the preceding sentence but instead to pay the purchase price for
shares with respect to which the option is exercised, in whole or in part, by
the surrender to the Company of outstanding whole shares of the Company's
common stock of the same class and of an aggregate value not exceeding the
total purchase price for shares with respect to which the option is exercised,
in which case the excess of such total purchase price over the value of the
whole shares so surrendered shall be paid in cash or by certified or cashier's
check accompanying the Exercise Notice. If such option holder so elects to
surrender whole shares of the Company's common stock in payment of all or any
portion of the purchase price, certificates evidencing common stock so
surrendered, properly endorsed or assigned to the Company, shall accompany the
Exercise Notice. Such stock will be valued for this purpose at a price equal
to the closing price on the New York Stock Exchange on the date that the
Exercise-Notice is delivered. The election to pay the purchase price in whole
or in part by the surrender of outstanding whole shares of the Company's
Common Stock is available to such option holder provided that such Exercise
Notice is delivered on a day on which the New York Stock Exchange is open for
business and that the Company's common stock has not been suspended from
trading at any time during that day. The obligation of the Company to issue
shares upon exercise of an option is 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 a 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 canceled and be of
no further force and effect; provided,
4
<PAGE>
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 continent 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.
Section 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 of the
following conditions are not satisfied:
(a) The Plan has been approve-d 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
5
<PAGE>
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.
Section 8: AMENDMENT OF PLAN
Without the prior approval of stockholders, paragraph 3 may not be amended so
as to increase the number of shares available under the Plan and paragraphs
6(b) and 6(c) may not be amended so as to decrease the option price or
accelerate the commencement of exercisability. 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.
Section 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.
EXHIBIT 10.3
COMPUTER SCIENCES CORPORATION
1980 STOCK OPTION PLAN
As amended March 31, 1988
Section 1: PURPOSE OF PLAN
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.
Section 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.
<PAGE>
Section 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 canceled without having been fully exercised, the number of shares as to
which such option was not exercised may again be optioned hereunder.
Section 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.
Section 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.
Section 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.
2
<PAGE>
(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 (i) died; (ii) suffered a permanent disability;
(iii) retired at age 65 or older, or (iv) retired at age 55 or older (but less
than age 65) with more than ten years of continuous employment with the
Company, and whose contributions to the affairs of the Company have been
determined by the Board of Directors of the Company to be outstanding may, at
the discretion of the Board of Directors of the Company, be exercisable
immediately 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 with respect to an incentive stock option; (ii) ten years plus thirty
days from the date such option was granted with respect to a non-incentive
stock option; or (iii) 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; provided, however, that if
the option is an incentive stock option and employment was terminated by
reason of death of the holder, the option or part thereof may be exercised
within one year from the date of death of the holder or ten years from the
date such option was granted, whichever occurs earlier.
(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 in the event of an
option holder's incapacity. In the event of termination of employment of an
option holder because of death, any option may,
3
<PAGE>
prior to cancellation or expiration of such option, be exercised in whole or
in part by any person empowered to do so under any deceased option holder's
will or under the then applicable laws of descent and distribution. 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, in a manner prescribed by the Committee, of a notice in writing
(an "Exercise Notice") stating that such option or a specified part thereof is
exercised. The purchase price on each exercise of an option shall be the
option price times the number of shares with respect to which such option or
part thereof is exercised. Except as hereinafter provided with respect to
option holders who exercise options prior to termination of employment with
the Company, the purchase price shall be paid in cash or by certified or
cashier's check accompanying the Exercise Notice. If the option is exercised
by an option holder prior to termination of employment with the Company, he or
she may elect in the Exercise Notice not to pay the entire purchase price
pursuant to the preceding sentence but instead to pay the purchase price for
shares with respect to which the option is exercised, in whole or in part, by
the surrender to the Company of outstanding whole shares of the Company's
common stock of the same class and of an aggregate value not exceeding the
total purchase price for shares with respect to which the option is exercised,
in which case the excess of such total purchase price over the value of the
whole shares so surrendered shall be paid in cash or by certified or cashier's
check accompanying the Exercise Notice. If such option holder so elects to
surrender whole shares of the Company's common stock in payment of all or any
portion of the purchase price, certificates evidencing common stock so
surrendered, properly endorsed or assigned to the Company, shall accompany the
Exercise Notice. Such stock will be valued for this purpose at a price equal
to the closing price on the-New York Stock Exchange on the date that the
Exercise Notice is delivered. The election to pay the purchase price in whole
or in part by the surrender of outstanding whole shares of the Company's
Common Stock is available to such option holder provided that such Exercise
Notice is delivered on a day on which the New York Stock Exchange is open for
business and that the Company's common stock has not been suspended from
trading at any time during that day. The obligation of the Company to issue
shares upon exercise of an option is 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
4
<PAGE>
Cancellation Event shall be canceled 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 continent
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.
Section 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 of the
following conditions are not satisfied:
(a) The PIan 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;
5
<PAGE>
(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.
Section 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.
Section 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.
Section 10: LIMITATION ON GRANT OF OPTIONS AFTER DECEMBER 31, 1980
(a) In the case of any option or options granted under the Plan after
December 3I, I980, the aggregate fair market value (determined as of the time
the option is granted) of the stock for which any employee of the Company may
be granted incentive stock options (as such term is defined in the Economic
Recovery Act of 1981, Section 251 relating to Section 422A of the Internal
Revenue Code of I954, as amended) in any calendar year under all stock option
plans of the Company shall not exceed $100,000 plus any unused limit carryover
to such year. The unused limit carryover may be carried over for three years
and shall apply to any year after 1980. The unused limit carryover shall be
one-half of the amount by which $100,000 exceeds the value at time of grant of
the stock for which incentive stock options were granted in such prior year or
years.
(b) Notwithstanding the foregoing, in the case of any option or options
granted after December 31, 1986, the aggregate fair market value (determined
at the time the option is granted) of the stock with respect to which
incentive stock options are exercisable for the first time by such individual
during
6
<PAGE>
any calendar year (under all such plans of the Company) shall not exceed
$100,000.
Section 11: DESIGNATION OF OPTIONS
No options granted under the Plan prior to November 14, 1981, shall be
incentive stock options. Options granted under the Plan on or after November
I4, 1981, may be incentive stock options as authorized by the Committee to the
extent permitted by law.
EXHIBIT 10.4
COMPUTER SCIENCES CORPORATION
1984 STOCK OPTION PLAN
As amended March 31, 1988
Section 1: PURPOSE OF PLAN
The purpose of this 1984 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.
Section 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 of the Company, 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 of the Company. 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.
<PAGE>
Section 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 canceled without having been fully exercised, the number of shares as to
which such option was not exercised may again be optioned hereunder, provided,
however, that in no event may incentive stock options (as defined in paragraph
6(c) below) be granted after ten years from the date the Plan is adopted by
the Board of Directors of the Company or the date this Plan is approved by the
shareholders, whichever occurs earlier.
Section 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(h) below). In the event of any such adjustment, the purchase
price per share for outstanding options granted under the Plan shall be
proportionately adjusted. Any such adjustments in outstanding options shall
be made without changing the aggregate exercise price applicable to the
unexercised portions of such options.
Section 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.
Section 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
2
<PAGE>
employees of the Company to whom options are to be granted, the date of grant,
the type of option, 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 for 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, provided, however, that options for up to 100,000
shares may be granted by the Committee at option prices of $1.00 per share.
(c) Designation of Options.
----------------------
Options granted under the Plan may be incentive stock options (as such term is
defined in Section 422A of the internal Revenue Code of 1954, as amended) or
non-incentive stock options, as designated at the time of grant by the
Committee. Any option granted under the Plan at an option price equal to or
greater than the fair market value of the shares of stock on the date the
option is granted shall be an incentive stock option to the extent permitted
by law, unless otherwise designated by the Committee.
(d) Limitation on Grant of Incentive Stock Options.
----------------------------------------------
The aggregate- fair market value (determined as of the date the option is
granted) of the shares of stock for which any employee of the Company may be
granted incentive stock options in any calendar year under all stock option
plans of the Company shall not exceed $100,000.00 plus any unused limit
carryover to such year. The unused limit carryover may be carried over for
three years and shall apply to any year after 1980. The unused limit
carryover shall be one-half of the amount by which $100,000.00 exceeds the
value on the date of grant of the shares of stock for which incentive stock
options were granted in such prior year or years.
Notwithstanding the foregoing, in the case of any option or options granted
after December 31, 1986, the aggregate fair market value (determined at the
time the option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time by such individual during any
calendar year (under all such plans of the Company) shall not exceed
$100,000.00.
(e) 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
3
<PAGE>
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 the expiration of the applicable time period
set forth in paragraph 6(f) below. 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(h) below. In addition, options
granted to an employee who has (i) died; (ii) suffered a permanent and total
disability, (iii) retired at age 65 or older, or (iv) retired at age 55 or
older (but less than age 65) with more than ten years of continuous employment
with the Company, and whose contributions to the affairs of the Company have
been determined by the Board of Directors of the Company to be outstanding
may, at the discretion of the Board of Directors of the Company, be
exercisable immediately in full. As used in this Plan, a permanent and total
disability shall mean than an option holder is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than
twelve months. An option holder shall not be considered to be permanently and
totally disabled unless he or she furnishes proof of existence thereof to the
satisfaction of the Board of Directors of the Company in such form and manner,
and at such times, that the Board of Directors of the Company may require.
The decision of the Board of Directors of the Company as to a condition or
non-condition of permanent and total disability shall be final and binding on
the Company and the option holder.
(f) 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 with respect to an incentive stock option; (ii) ten years plus thirty
days from the date such option was granted with respect to a non-incentive
stock option; or (iii) the date of termination of employment for any reason
whatsoever. However, in the event of termination of employment by reason of
death or permanent and total disability, any unexercised option which was
exercisable on the date of termination of employment may, within one year
thereafter, to the extent the option was exercisable upon termination of
employment, 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; provided,
however, that if the option is an incentive stock option and employment was
terminated by reason of death of the holder, the option or part thereof may be
exercised within one year from the date of death of the holder or ten years
from the date such option was granted, whichever occurs earlier.
(g) 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 in the event of an
option holder's incapacity. In the event of termination of employment of an
option holder because of death, any option may, prior to cancellation or
expiration of such option, be exercised in whole or in part by
4
<PAGE>
any person empowered to do so under any deceased option holder's will or under
the then applicable laws of descent and distribution. 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, in a
manner prescribed by the Committee, of a notice in writing (an "Exercise
Notice") stating that such option or a specified part thereof is exercised.
The purchase price on each exercise of an option shall be the option price
times the number of shares with respect to which such option or part thereof
is exercised. Except as hereinafter provided with respect to option holders
who exercise options prior to termination of employment with the Company, the
purchase price shall be paid in cash or by good and sufficient check
accompanying the Exercise Notice. If the option is exercised by an option
holder prior to termination of employment with the Company, he or she may
elect in the Exercise Notice to pay the purchase price for shares with respect
to which the option is exercised (i) by cash or good and sufficient check, or
(ii) by the surrender to the Company of outstanding whole shares of the
Company's common stock of the same class, or (iii) a combination of (i) and
(ii), having an aggregate value of not less than the total purchase price for
shares with respect to which the option is exercised. If such option holder
so elects to surrender whole shares of the Company's common stock in payment
of all or any portion of the purchase price, certificates evidencing common
stock so surrendered, properly endorsed or assigned to the Company, shall
accompany the Exercise Notice. Such stock will be valued for this purpose at
a price equal to the closing price on the New York Stock Exchange on the date
that the Exercise Notice is delivered. The election to pay the purchase price
in whole or in part by the surrender of outstanding whole shares of the
Company's common stock is available to such option holder provided that such
Exercise Notice is delivered on a day on which the New York Stock Exchange is
open for business and that the Company's common stock has not been suspended
from trading at any time during that day. The obligation of the Company to
issue shares upon exercise of an option is 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.
(h) 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 canceled and be of no further force and effect, provided, however, that
upon the approval of the Cancellation Event by the shareholders of the
Company, or the approval of the Cancellation Event by the Board of Directors
of the Company if shareholder approval is not required, each option will
become
5
<PAGE>
exercisable as to all of the shares covered thereby, irrespective of the
provisions of paragraph 6(e) above. The holder of each option shall be given
prompt notice of such approval by the shareholders 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(h) 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(h) 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.
(i) Options Not Transferable.
------------------------
No option shall be transferable by the option holder other than by will or the
applicable laws of descent and distribution.
Section 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 of 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 shareholders 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 I933, 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
6
<PAGE>
(d) The option holder has complied with all of the provisions of the
applicable Stock Option Agreement.
Section 8: AMENDMENT OF PLAN
Without the prior approval of shareholders, 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(e) and
6(h) hereof. Except for instances where such shareholder 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.
Section 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.
7
EXHIBIT 10.8
COMPUTER SCIENCES CORPORATION
1992 STOCK INCENTIVE PLAN
As amended August 9, 1993
Section 1: PURPOSE OF PLAN
The purpose of this 1992 Stock Incentive Plan ("Plan") of Computer
Sciences Corporation, a Nevada corporation (the "Company"), is to enable the
Company and its subsidiaries to attract, retain and motivate their employees
by providing for or increasing the proprietary interests of such employees in
the Company.
Section 2: PERSONS ELIGIBLE UNDER PLAN
Any person, including any director of the Company, who is an employee of
the Company or any of its subsidiaries (an "Employee") shall be eligible to be
considered for the grant of Awards (as hereinafter defined) hereunder.
Section 3: AWARDS
(a) The Committee (as hereinafter defined), on behalf of the Company, is
authorized under this Plan to enter into any type of arrangement with an
Employee that is not inconsistent with the provisions of this Plan and that by
its terms, involves or might involve the issuance of (i) shares of common
stock, par value $1.00 per share, of the Company ("Common Shares"), or (ii) a
Derivative Security (as such term is defined in Rule 16a-1 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such
Rule may be amended from time to time) with an exercise or conversion
privilege at a price related to the Common Shares or with a value derived from
the value of the Common Shares. The entering into of any such arrangement is
referred to herein as the "grant" of an "Award."
(b) Awards are not restricted to any specified form or structure and may
include, but are not limited to, sales, bonuses and other transfers of stock,
restricted stock, stock options, reload stock options, stock purchase
warrants, other rights to acquire stock, securities convertible into or
redeemable for stock, stock appreciation rights, limited stock appreciation
rights, phantom stock, dividend equivalents, performance units or performance
shares, and an Award may consist of one such security or benefit, or two or
more of them in tandem or in the alternative.
(c) Common Shares may be issued pursuant to an Award for any lawful
consideration as determined by the Committee, including, without limitation,
services rendered by the recipient of such Award.
<PAGE>
(d) Subject to the provisions of this Plan, the Committee, in its sole
and absolute discretion, shall determine all of the terms and conditions of
each Award granted hereunder, which terms and conditions may include, among
other things:
(i) any provision necessary for such Award to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code (an "Incentive
Stock Option");
(ii) a provision permitting the recipient of such Award (including any
recipient who is a director or officer of the Company) to pay the purchase
price of the Common Shares or other property issuable pursuant to such Award,
and/or to pay such recipient's tax withholding obligation with respect to such
issuance, in whole or in part, by delivering previously owned shares of
capital stock of the Company (including "pyramiding") or other property,
and/or by reducing the amount of Common Shares or other property otherwise
issuable pursuant to such Award; or
(iii) a provision conditioning or accelerating the receipt of benefits
pursuant to such Award, either automatically or in the discretion of the
Committee, upon the occurrence of specified events, including, without
limitation, a change of control of the Company, an acquisition of a specified
percentage of the voting power of the Company, the dissolution or liquidation
of the Company, a sale of substantially all of the property and assets of the
Company or an event of the type described in Section 7 hereof.
Section 4: STOCK SUBJECT TO PLAN
(a) The aggregate number of Common Shares that may be issued pursuant to
all Incentive Stock Options granted under this Plan shall not exceed
1,000,000, subject to adjustment as provided in Section 7 hereof.
(b) At any time, the aggregate number of Common Shares issued and
issuable pursuant to all Awards (including all Incentive Stock Options)
granted under this Plan shall not exceed 1,000,000, subject to adjustment as
provided in Section 7 hereof.
(c) For purposes of Section 4(b) hereof, the aggregate number of Common
Shares issued and issuable pursuant to Awards granted under this Plan shall at
any time be deemed to be equal to the sum of the following:
(i) the number of Common Shares which were issued prior to such time
pursuant to Awards granted under this Plan, other than Common Shares which
were subsequently reacquired by the Company pursuant to the terms and
conditions of such Awards and with respect to which the holder thereof
received no benefits of ownership such as dividends; plus
2
<PAGE>
(ii) the number of Common Shares which were otherwise issuable prior
to such time pursuant to Awards granted under this Plan but which were
withheld by the Company as payment of the purchase price of the Common Shares
issued pursuant to such Awards or as payment of the recipient's tax
withholding obligation with respect to such issuance; plus
(iii) the maximum number of Common Shares which are or may be issuable
at or after such time pursuant to Awards granted under this Plan.
Section 5: DURATION OF PLAN
Awards may not be granted under this Plan after June 15, 2002. Although
Common Shares may be issued after June 15, 2002 pursuant to Awards that were
duly granted prior to such date, no Common Shares may be issued under this
Plan after June 15, 2012.
Section 6: ADMINISTRATION OF PLAN
(a) This Plan shall be administered by a committee of the Board of
Directors (the "Committee") consisting of two or more directors, each of whom
is a Disinterested Person (as such term is defined in Rule 16b-3 promulgated
under the Exchange Act, as such Rule may be amended from time to time).
(b) Subject to the provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of this Plan, including, without limitation, the
following:
(i) adopt, amend and rescind rules and regulations relating to this
Plan;
(ii) determine which persons meet the requirements of Section 2 hereof
for eligibility under this Plan and to which of such eligible persons, if any,
Awards shall be granted hereunder;
(iii) grant Awards to eligible persons and determine the terms and
conditions thereof, including the number of Common Shares issuable pursuant
thereto;
(iv) determine whether, and the extent to which adjustments are
required pursuant to Section 7 hereof; and
(v) interpret and construe this Plan and the terms and conditions of
any Award granted hereunder.
3
<PAGE>
Section 7: ADJUSTMENTS
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property and/or
a different number or kind of securities, or if cash, property and/or
securities are distributed in respect of such outstanding securities, in
either case as a result of a reorganization, merger, consolidation,
recapitalization, restructuring, reclassification, dividend (other than a
regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split or the like, or if substantially all of the property and assets of
the Company are sold, then, unless the terms of such transaction shall provide
otherwise:
(a) the Committee shall make appropriate and proportionate adjustments in
the number and type of shares or other securities or cash or other property
that may be acquired pursuant to Awards theretofore granted under this Plan;
and
(b) the Committee shall make appropriate and proportionate adjustments in
the maximum number and type of shares or other securities that may be issued
pursuant to Awards thereafter granted under this Plan.
Section 8: AMENDMENT AND TERMINATION OF PLAN
The Board of Directors may amend or terminate this Plan at any time and in any
manner, subject to the following:
(a) the recipient of any Award shall not be deprived of such Award or any
of his or her rights thereunder or with respect thereto without his or her
consent as a result of any such amendment or termination; and
(b) if any rule, regulation or procedure of any national securities
exchange upon which any securities of the Company are listed, or any listing
agreement with any such securities exchange, requires that any such amendment
be approved by the shareholders of the Company, then such amendment shall not
be effective unless and until it is approved by the affirmative vote of the
holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting of the shareholders of the
Company.
Section 9: TRANSITIONAL PROVISIONS
(a) Any Award granted under this Plan to an Employee who is then subject
to Section 16 of the Exchange Act shall be subject to the following
limitations:
(i) If Common Shares will or may in the future be issued pursuant to
such Award for any consideration other than services rendered
4
<PAGE>
by such Employee, the amount of such consideration shall either (A) be equal
to the par value of such shares or (B) be equal to or greater than 50% of the
Fair Market Value (as hereinafter defined) of such shares on the date of grant
of such Award. The "Fair Market Value" of a Common Share on any day shall be
equal to the last sale price, regular way, of a Common Share on such day, or
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the principal national securities exchange on which the
Common Shares are listed or admitted to trading.
(ii) If such Award is an option or similar right (including a stock
appreciation right), then such Award (A) shall not be transferable other than
by will or the laws of descent and distribution and (B) shall be exercisable
during such Employee's lifetime only by such Employee or by his or her
guardian or legal representative.
(b) Notwithstanding Section 6(a) hereof, the Committee shall consist of
three or more directors of the Company, each of whom is both (i) a
Disinterested Person (as such term is defined in Rule 16b-3 promulgated under
the Exchange Act and in effect on April 30, 1991) and (ii) a Disinterested
Person (as such term is defined in Rule 16b-3, as amended effective May 1,
1991, and as such Rule may be further amended from time to time).
(c) This Section 9 shall be effective until, but only until, September 1,
1994 or such earlier date as shall be specified by the Board of Directors.
Section 10: EFFECTIVE DATE OF PLAN
This Plan shall be effective as of June 15, 1992, the date upon which it
was approved by the Board of Directors; provided, however, that no Common
Shares may be issued under this Plan until it has been approved by the
affirmative votes of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote at a meeting of the
shareholders of the Company.
5
<TABLE>
EXHIBIT 11
COMPUTER SCIENCES CORPORATION
CALCULATION OF EARNINGS PER SHARE
(In thousands except earnings per share)
<CAPTION>
First Quarter Ended
______________________
June 28, June 30,
1996 1995
__________ __________
<S> <C> <C>
Net income $33,248 $27,717
========== ==========
Shares:
Weighted average shares
outstanding 56,111 55,302
Common stock
equivalents 1,584 1,527
__________ __________
Total for primary and
fully diluted 57,695 56,829
========== ==========
Earnings Per Share:
Primary and fully
diluted* $ 0.58 $ 0.49
========== ==========
</TABLE>
[FN]
* The fully diluted calculation is submitted in accordance with Regulation
S-K item 601 (b) (11) although not required by footnote 2 to paragraph 14
of APB Opinion No. 15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> Mar-29-1996
<PERIOD-START> Mar-30-1996
<PERIOD-END> Jun-28-1996
<PERIOD-TYPE> 3-MOS
<CASH> 18,876
<SECURITIES> 0
<RECEIVABLES> 1,102,462
<ALLOWANCES> 41,022
<INVENTORY> 0
<CURRENT-ASSETS> 1,164,705
<PP&E> 1,261,059
<DEPRECIATION> 558,658
<TOTAL-ASSETS> 2,697,953
<CURRENT-LIABILITIES> 772,885
<BONDS> 437,724
<COMMON> 56,544
0
0
<OTHER-SE> 1,294,406
<TOTAL-LIABILITY-AND-EQUITY> 2,697,953
<SALES> 0
<TOTAL-REVENUES> 1,165,072
<CGS> 0
<TOTAL-COSTS> 943,125
<OTHER-EXPENSES> 66,165
<LOSS-PROVISION> 375
<INTEREST-EXPENSE> 6,131
<INCOME-PRETAX> 54,548
<INCOME-TAX> 21,300
<INCOME-CONTINUING> 33,248
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,248
<EPS-PRIMARY> 0.58
<EPS-DILUTED> 0.58
</TABLE>
<TABLE>
EXHIBIT 28
COMPUTER SCIENCES CORPORATION
REVENUES BY MARKET SECTOR
($ in millions)
<CAPTION>
Fiscal Period Ended % of Total
__________________________ __________________
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
___________ ___________ ________ ________
<S> <C> <C> <C> <C>
FIRST QUARTER
- -------------
U.S. Commercial 407.0 345.5 35 36
International Commercial 312.4 238.6 27 24
___________ ___________ ________ ________
Global Commercial 719.4 584.1 62 60
___________ ___________ ________ ________
Dept. of Defense $ 297.0 $224.6 25% 24%
NASA 75.6 79.0 7 8
Civil agencies 73.1 79.1 6 8
___________ ___________ ________ ________
U.S. Federal Government 445.7 382.7 38 40
___________ ___________ ________ ________
Total revenues $1,165.1 $966.8 100% 100%
=========== =========== ======== ========
</TABLE>
</PAGE>
