<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 SEPTEMBER 27, 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 [ ]
75,942,224 shares of Common Stock, $1.00 par value, were outstanding on
September 27, 1996.
<PAGE>
COMPUTER SCIENCES CORPORATION
Index to Form 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income,
Second Quarter and Six Months Ended
September 27, 1996 and September 29, 1995........................ 3
Consolidated Condensed Balance Sheets,
September 27, 1996 and March 29, 1996............................ 4
Consolidated Condensed Statements of Cash Flows
Second Quarter and Six Months Ended
September 27, 1996 and September 29, 1995........................ 5
Notes to Consolidated Condensed Financial Statements................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............. 7
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 STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
<CAPTION>
Second Quarter Ended Six Months Ended
------------------------ ------------------------
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $1,355,255 $1,128,648 $2,659,147 $2,211,611
----------- ----------- ----------- -----------
Costs of services 1,073,502 881,692 2,110,710 1,731,417
Selling, general and
administrative 116,306 112,157 232,759 221,190
Depreciation and
amortization 80,902 63,547 152,509 123,735
Interest expense 10,708 9,284 19,022 18,635
Interest income (2,102) (932) (3,565) (2,888)
Non-recurring charge
(note A) 48,929 48,929
----------- ----------- ----------- -----------
Total costs and
expenses 1,328,245 1,065,748 2,560,364 2,092,089
----------- ----------- ----------- -----------
Income before taxes 27,010 62,900 98,783 119,522
Taxes on income 13,004 23,331 39,500 44,012
----------- ----------- ----------- -----------
Net income $ 14,006 $ 39,569 $ 59,283 $ 75,510
=========== =========== =========== ===========
Earnings per common
share (note B) $ 0.18 $ 0.51 $ 0.76 $ 0.99
=========== =========== =========== ===========
</TABLE>
[FN]
See accompanying notes.
3
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
Sept. 27, Mar. 29,
(In thousands) 1996 1996
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 41,854 $ 113,873
Receivables 1,304,288 1,106,857
Prepaid expenses and other current assets 210,080 134,033
------------- -------------
Total current assets 1,556,222 1,354,763
------------- -------------
EXCESS OF COST OF BUSINESSES ACQUIRED
OVER RELATED NET ASSETS, NET 533,366 457,912
OTHER ASSETS 445,884 442,889
PROPERTY AND EQUIPMENT, at cost 1,508,178 1,249,729
Less accumulated depreciation and amortization 673,436 569,670
------------- -------------
Property and equipment, net 834,742 680,059
------------- -------------
Total assets $3,370,214 $2,935,623
============= =============
CURRENT LIABILITIES:
Short-term debt and current
maturities of long-term debt $ 80,674 $ 78,339
Accounts payable 191,984 186,460
Accrued payroll and related costs 253,704 222,620
Other accrued expenses 359,992 262,961
Deferred revenue 156,691 111,075
Income taxes payable 50,453 67,677
------------- -------------
Total current liabilities 1,093,498 929,132
------------- -------------
LONG-TERM DEBT, NET 613,563 426,634
------------- -------------
OTHER LONG-TERM LIABILITIES 155,170 164,597
------------- -------------
STOCKHOLDERS' EQUITY (note C):
Common stock issued, par value $1.00 per share 76,274 75,429
Other stockholders' equity 1,431,709 1,339,831
------------- -------------
Total stockholders' equity 1,507,983 1,415,260
------------- -------------
Total liabilities and stockholders' equity $3,370,214 $2,935,623
============= =============
</TABLE>
[FN]
See accompanying notes.
4
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
Six Months Ended
-----------------------
(In thousands, increase (decrease) Sept. 27, Sept. 29,
in cash and cash equivalents) 1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 59,283 $ 75,510
Adjustments to reconcile net income to net
cash provided by operating activities:
Non-recurring charge, net 35,280
Depreciation and amortization 152,509 123,735
Provision for losses on accounts receivable 6,689 11,293
Changes in assets and liabilities, net of
effects of acquisitions:
Increase in assets (199,264) (128,844)
Increase (decrease) in liabilities 35,274 (67,479)
---------- ----------
Net cash provided by operating activities 89,771 14,215
---------- ----------
Investing activities:
Purchases of property, plant and equipment (147,201) (107,185)
Acquisitions, net of cash acquired (137,690) (29,123)
Outsourcing contracts (36,424) (65,970)
Purchased and internally developed software (24,594) (19,937)
Other investing cash flows (1,296) (2,206)
---------- ----------
Net cash used in investing activities (347,205) (224,421)
---------- ----------
Financing activities:
Borrowing under commercial paper, net 170,491 13,124
(Repayment of) borrowing under lines of credit, net (4,376) 47,673
Principal payments on long-term debt (1,746) (8,510)
Proceeds from stock option transactions 16,410 6,156
Other financing cash flows 4,636 146
---------- ----------
Net cash provided by financing activities 185,415 58,589
---------- ----------
Net decrease in cash and cash equivalents (72,019) (151,617)
Cash and cash equivalents at beginning of year 113,873 207,599
---------- ----------
Cash and cash equivalents at end of period $ 41,854 $ 55,982
========== ==========
</TABLE>
[FN]
See accompanying notes.
5
<PAGE>
COMPUTER SCIENCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
(A) The non-recurring charge represents costs and expenses related to the
August 1 acquisition of The Continuum Company, Inc. The amount of the
charge, net of income tax benefits on the tax deductible portion, is
$35,280,000 or 45 cents per share. The non-recurring charge is
comprised of $11,015,000 for investment banking and other merger
expenses; $13,121,000 related to the write-off of certain capitalized
software, other assets and intangibles; and $24,793,000 related to the
elimination of duplicate data processing facilities, employee severance
costs and contract termination costs.
(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 77,924,000 and 76,600,000 respectively, for the
six months ended September 27, 1996, and September 29, 1995 (see Part II,
Exhibit 11).
(C) No dividends were paid during the periods presented. There were
76,273,766 shares at September 27, 1996 and 75,428,622 shares at March
29, 1996 of $1.00 par value common stock issued with 331,542 and
311,928 shares, respectively, of treasury stock.
(D) Cash payments for interest on indebtedness were $20,027,000 and
$19,591,000, respectively, for the six months ended September 27, 1996,
and September 29, 1995. Cash payments for taxes on income were
$36,654,000 and $39,482,000, respectively, for the six months ended
September 27, 1996, and September 29, 1995.
(E) 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.
(F) Certain reclassifications have been made to reflect the acquisition of
Continuum, which was accounted for as a pooling of interests.
Continuum's expense classifications have been reclassified to conform to
CSC's presentation. Continuum's interest income has been removed from
its revenues to conform to CSC's separate presentation of interest
income. Additionally, Continuum's common stock equivalents have been
converted to CSC shares at the exchange rate of .79 and included in the
average common shares outstanding.
6
<PAGE>
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Second Quarter and First Six Months of Fiscal 1997 versus
Second Quarter and First Six Months of Fiscal 1996
Revenues
The Company derived its revenues from the following market sectors for the
second quarter and first six months, respectively (dollars in millions):
<TABLE>
<CAPTION>
Second Quarter First Six Months
-------------- Pct. ---------------- Pct.
FY97 FY96 Growth FY97 FY96 Growth
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Commercial $ 524 $ 435 20.6% $ 999 $ 843 18.6%
International 439 321 36.6 822 613 34.1
------ ------ ------ ------ ------ ------
Total Commercial 963 756 27.4 1,821 1,456 25.1
U.S. Federal Government 392 373 5.4 838 756 10.9
------ ------ ------ ------ ------ ------
Total $1,355 $1,129 20.1% $2,659 $2,212 20.2%
====== ====== ====== ====== ====== ======
</TABLE>
During the quarter and six months ended September 27, 1996, the Company's
total revenue increased 20.1%, or $226 million, and 20.2%, or $448 million,
respectively, over the same periods last year. Commercial revenue growth
continued to surpass U.S. Federal Government growth, increasing 27.4%, or $207
million over the same quarter last year.
Over one-half of the second quarter commercial growth came from the Company's
international operations. International growth came principally from new
outsourcing business signed last year, from the acquisition earlier this year
of 75% of Datacentralen, a major provider of information technology services
in Denmark, and from growth in revenue from CSC's German consulting
operations.
U.S. commercial revenues grew 20.6% or $89 million during the second quarter
of fiscal 1997. Slightly more than half the growth was provided by
information technology outsourcing, with the remainder coming principally from
the company's acquisition of American Practice Management and growth at CSC
Continuum.
U.S. federal government revenue for the quarter increased 5.4% or $19 million,
principally due to new contract awards. The many new and existing task order
contracts permit the Government discretion in the extent and timing of new
orders.
During the second quarter of fiscal 1997, the Company announced nearly $1
billion in new federal contracts and $390 million in new commercial contracts.
7
<PAGE>
For the first six months, revenue growth for all market sectors reflects the
same overall trends as those described for the second quarter above. As the
Company's commercial sector revenues continued to grow faster than federal,
they comprise a larger percentage of total CSC revenue, as shown by the
following table:
<TABLE>
<CAPTION>
Revenue by Market Sector, Second Quarter First Six Months
as a percentage of total FY97 FY96 FY97 FY96
- ---------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
U.S. Commercial 39% 38% 37% 38%
International 32 28 31 28
------ ------ ------ ------
Total Commercial 71 66 68 66
U.S. Federal Government 29 34 32 34
------ ------ ------ ------
Total Revenue 100% 100% 100% 100%
====== ====== ====== ======
</TABLE>
Costs and Expenses
The Company's recurring costs and expenses as a percentage of revenue are as
follows (dollars in millions):
<TABLE>
<CAPTION>
Dollar Amount Percentage of Revenue
-------------- -------------------------------
First First
Six Months Second Quarter Six Months
-------------- --------------- --------------
FY97 FY96 FY97 FY96 FY97 FY96
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Costs of services $1,074 $ 882 79.21% 78.12% 79.38% 78.29%
Selling, general & admin. 116 112 8.58 9.94 8.75 10.00
Depreciation and amort. 81 64 5.97 5.63 5.73 5.60
Interest expense, net 9 8 0.64 0.74 0.59 0.71
------ ------ ------ ------ ------ ------
Total $1,280 $1,066 94.40% 94.43% 94.45% 94.60%
====== ====== ====== ====== ====== ======
</TABLE>
Compared with the second quarter of fiscal 1996, total costs and expenses
improved slightly as a percentage of revenue for the second quarter and the
first six months ended September 27, 1996. Costs of services as a percentage
of revenue increased principally due to lower utilization and increased use of
subcontractor labor in the Company's European operations, as well as an
increase in costs of services as a percentage of revenues in the Company's
domestic consulting 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 and six months ended last year. The European improvement contributed
to the overall reduction in the selling, general and administrative percentage
from 9.94% during last year's second quarter to 8.58% for the current year's
second quarter.
8
<PAGE>
Non-Recurring Charge
The non-recurring charge represents costs and expenses related to the August 1
acquisition of The Continuum Company, Inc. The amount of the charge, net of
income tax benefits on the tax deductible portion, is $35,280,000 or 45 cents
per share. The non-recurring charge is comprised of $11,015,000 for
investment banking and other merger expenses; $13,121,000 related to the
write-off of certain capitalized software, other assets and intangibles; and
$24,793,000 related to the elimination of duplicate data processing
facilities, employee severance costs and contract termination costs.
Income Before Taxes
Income before taxes and before the non-recurring charge was $75.9 million for
the current quarter, up $13.0 million, or 20.7%, over last year's second
quarter, reflecting the Company's revenue growth. The Company's profit margin
before taxes and the non-recurring charge improved from 5.57% to 5.60% for the
second quarter and from 5.40% to 5.55% for the six months ended September 27,
1996.
Net Income
Net income before the non-recurring charge was $49.3 million for the second
quarter of fiscal 1997, up $9.7 million, or 19.7%, over the same quarter last
year. The effective tax rate was 35.1%, versus 37.1%. The lower current tax
rate is primarily due to the reinstatement of the research and engineering tax
credit in the U.S. and the impact of the Company's August 1, 1996 merger with
Continuum. This year's second quarter earnings per share before the non-
recurring charge of 63 cents increased 23.5% over the 51 cents for last year's
second quarter. On a year to date basis, earnings per share before the non-
recurring charge was $1.21, up 22 cents, or 18.2% over the same period for the
previous fiscal year.
Cash Flows
Cash provided by operating activities was $89.8 million for the six months
ended, compared with $14.2 million during the same period last year. The
increase in operating cash flows is principally due to higher non-cash
expenses for depreciation and amortization, and favorable changes in working
capital.
The Company's cash expenditures for investing activities totaled $347.2
million for the most recent six months versus $224.4 million during the same
period of last year. The increase principally relates to the acquisitions of
Datacentralen and American Practice Management, and higher investments in
computers and related equipment.
Cash provided by financing activities was $185.4 million for the most recent
six months versus $58.6 million for the same period last year.
9
<PAGE>
Financial Condition
During the first six months of fiscal 1997, the Company's capital outlays
included $321.3 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 $113.9 million
to $41.9 million. As a result of the net increase in borrowings, the
Company's debt-to-total capitalization ratio increased to 31.5% at September
27, 1996 versus 26.3% 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>
Part II. Other Information
Item 2. Changes in Securities.
Pursuant to the Rights Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, one Preferred Stock Purchase
Right is attached to each outstanding share of Common Stock. Consequently,
the amendment to the Company's Restated Articles of Incorporation increasing
the number of authorized shares of Common Stock from 75,000,000 to
275,000,000, effective as of August 1, 1996, also had the effect of increasing
the number of authorized Rights from 75,000,000 to 275,000,000 as of that
date.
In order to ensure that an adequate number of shares of the Company's Series A
Junior Participating Preferred Stock are authorized and reserved for issuance
upon exercise of this increased number of Rights, the Board of Directors of
the Company amended and restated the Rights Agreement. Prior to the
amendment, the Rights Agreement provided that: (1) upon the occurrence of
certain events, each Right became exercisable to purchase 1/400 of a share of
Series A Preferred Stock, and (2) each 1/400 of a share of Series A Preferred
Stock had the same dividend and liquidation rights as one share of Common
Stock. As a consequence of the amendment, which became effective August 1,
1996, the Rights Agreement now provides that: (i) upon the occurrence of the
same events, each Right will become exercisable to purchase 1/4000 of a share
of Series A Preferred Stock, and (ii) each 1/4000 of a share of Series A
Preferred Stock has the same dividend and liquidation rights as one share of
Common Stock.
Since each Right will now be exercisable, under certain circumstances, to
purchase 1/4000 of a share of Series A Preferred Stock, the 200,000 authorized
shares of Series A Preferred Stock, each of which is reserved for issuance
upon exercise of the Rights, will now be sufficient to permit the exercise in
full of the 275,000,000 authorized Rights.
The Amended and Restated Rights Agreement is incorporated herein by reference
to the Registrant's Current Report on Form 8-K dated August 1, 1996.
Item 4. Submission of Matters to a Vote of Security-Holders.
a. The Company held its Annual Meeting of Stockholders on July 31, 1996.
b. Proxies for the Annual Meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934; there were no solicitations in
opposition to management's nominees for director as listed in the Proxy
Statement; and all such nominees were elected.
The directors elected were Howard P. Allen, Irving W. Bailey, II, Van B.
Honeycutt, William R. Hoover, Richard C. Lawton, Leon J. Level, F. Warren
McFarlan and James R. Mellor.
11
<PAGE>
With respect to each nominee, the results of the vote were as follows:
<TABLE>
<CAPTION>
Votes
----------------------------
For Withheld
------------ ------------
<S> <C> <C>
Howard P. Allen 48,998,821 177,949
Irving W. Bailey, II 49,023,120 153,650
Van B. Honeycutt 49,022,305 154,465
William R. Hoover 49,022,008 154,762
Richard C. Lawton 49,018,398 158,372
Leon J. Level 49,021,910 154,854
F. Warren McFarlan 49,020,434 156,336
James R. Mellor 49,012,877 163,893
</TABLE>
c. There was submitted to the stockholders a proposal (the "Merger Proposal")
to approve and adopt an Agreement and Plan of Merger dated as of April 28,
1996 (the "Merger Agreement") by and among the Company, Continental
Acquisition, Inc., a wholly owned subsidiary of the Company ("Sub"), and The
Continuum Company, Inc. ("Continuum"), and the issuance of shares of Common
Stock of the Company pursuant thereto.
The Merger Agreement provided for: (i) a merger of Sub with and into Continuum
pursuant to which Continuum would become a wholly owned subsidiary of the
Company; and (ii) the conversion of each outstanding share of common stock,
par value $.10 per share, of Continuum into .79 of a share of Common Stock of
the Company and the right to receive cash in lieu of fractional shares of
Common Stock.
The Merger Proposal was approved by the stockholders. The results of the vote
were as follows: 45,862,556 votes cast for, 309,486 votes cast against and
3,004,728 abstentions, including 2,912,771 broker non-votes.
d. There was submitted to the stockholders a proposal (the "Charter Amendment
Proposal") to approve an amendment to the Company's Restated Articles of
Incorporation increasing the authorized Common Stock from 75,000,000 shares to
275,000,000 shares.
The Charter Amendment Proposal was approved by the stockholders. The results
of the vote were as follows: 45,931,833 votes cast for, 336,544 votes cast
against and 2,908,393 abstentions, including 2,788,847 broker non-votes.
12
<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 Certificate of Amendment of Certificate of Designations of
Series A Junior Participating Preferred Stock, effective
August 1, 1996 (o)
3.5 Bylaws, amended and restated effective July 31, 1996 (n)
10.1 Annual Management Incentive Plan, effective April 2, 1983* (a)
10.2 1978 Stock Option Plan, amended and restated effective
March 31, 1988* (n)
10.3 1980 Stock Option Plan, amended and restated effective
March 31, 1988* (n)
10.4 1984 Stock Option Plan, amended and restated effective
March 31, 1988* (n)
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* (n)
10.9 1995 Stock Incentive Plan* (j)
10.10 Deferred Compensation Plan, amended and restated effective
November 4, 1996*
10.11 Restated Supplemental Executive Retirement Plan, effective
November 4, 1996*
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 $350 million Credit Agreement dated as of September 6, 1995 (j)
10.16 First Amendment to $350 Million Credit Agreement dated
September 23, 1996
10.17 $100 million Credit Agreement dated as of January 3, 1995 (e)
10.18 Amended and Restated Rights Agreement, effective
August 1, 1996 (o)
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>
13
<PAGE>
Notes to Exhibit Index:
*Management contract or compensatory plan or agreement
(a)-(f) 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.
(n) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on August 12, 1996.
(o) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated August 1, 1996
b. Reports on Form 8-K:
There were two Current Reports on Form 8-K filed during the second quarter
of fiscal 1997. In a Form 8-K dated August 1, 1996, the Company reported that
it had acquired The Continuum Company, Inc. in a transaction which would be
accounted for as a pooling of interests. In a Form 8-K dated August 13, 1996,
the Company released unaudited condensed statements of income, without notes,
of the Company, including The Continuum Company, Inc. on a pooled basis, for
each of the quarters in the fiscal year ended March 29, 1996 and for the first
quarter of fiscal year 1997.
14
<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: November 12, 1996 By: /s/ Denis M. Crane
-----------------------------
Denis M. Crane
Vice President and Controller
Chief Accounting Officer
15
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C>
5 Article 5 Financial Data Schedule
10.10 Deferred Compensation Plan, amended and restated effective
November 4, 1996*
10.11 Restated Supplemental Executive Retirement Plan, effective
November 4, 1996*
10.16 First Amendment to $350 Million Credit Agreement dated
September 23, 1996
11 Calculation of Primary and Fully Diluted Earnings Per Share
28 Revenues by Market Sector
16
</TABLE>
EXHIBIT 10.10
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
<PAGE>
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE I - DEFINITIONS .............................................. 1
Section 1.1 - General ............................................ 1
Section 1.2 - Account ............................................ 1
Section 1.3 - Administrator ...................................... 1
Section 1.4 - Board .............................................. 2
Section 1.5 - Change in Control .................................. 2
Section 1.6 - Chief Executive Officer ............................ 2
Section 1.7 - Code ............................................... 2
Section 1.8 - Committee .......................................... 2
Section 1.9 - Company ............................................ 2
Section 1.10- Deferred Compensation .............................. 2
Section 1.11- Election Form ...................................... 3
Section 1.12- Eligible Key Executive ............................. 3
Section 1.13- Employee ........................................... 3
Section 1.14- ERISA .............................................. 3
Section 1.15- Exchange Act ....................................... 3
Section 1.16- Hardship ........................................... 3
Section 1.17- Key Executive ...................................... 4
Section 1.18- Key Executive Plan ................................. 4
Section 1.19- Nonemployee Director ............................... 4
Section 1.20- Nonemployee Director Plan .......................... 4
Section 1.21- Partial First Plan Year ............................ 4
Section 1.22- Participant ........................................ 5
Section 1.23- Plan ............................................... 5
Section 1.24- Plan Year .......................................... 5
Section 1.25- Predecessor Plan ................................... 5
Section 1.26- Retirement ......................................... 5
Section 1.27- Separation from Service ............................ 5
Section 1.28- Qualified Compensation ............................. 5
ARTICLE II - ELIGIBILITY ............................................. 6
Section 2.1 - Requirements for Participation ..................... 6
Section 2.2 - Deferral Election Procedure ........................ 6
Section 2.3 - Content of Election Form ........................... 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE III - PARTICIPANTS' DEFERRALS ................................. 7
Section 3.1 - Deferral of Qualified Compensation .................. 7
Section 3.2 - Deferral for Partial First Plan Year ................ 7
ARTICLE IV - DEFERRED COMPENSATION ACCOUNTS ........................... 7
Section 4.1 - Deferred Compensation Accounts ...................... 7
Section 4.2 - Crediting of Deferred Compensation .................. 7
Section 4.3 - Crediting of Earnings ............................... 8
Section 4.4 - Applicability of Account Values ..................... 8
Section 4.5 - Vesting of Deferred Compensation Accounts ........... 8
Section 4.6 - Assignments, Etc. Prohibited ........................ 8
ARTICLE V - DISTRIBUTIONS OF DEFERRED COMPENSATION ACCOUNTS ........... 8
Section 5.1 - Distributions upon a Key Executive's Retirement and
a Nonemployee Director's Separation from Service .... 8
Section 5.2 - Distributions upon a Key Executive's Pre-Retirement
Separation from Service ............................. 9
Section 5.3 - Distributions upon a Participant's Death ............ 9
Section 5.4 - Optional Distributions .............................. 10
Section 5.5 - Applicable Taxes .................................... 10
ARTICLE VI - WITHDRAWALS FROM DEFERRED COMPENSATION ACCOUNTS .......... 11
Section 6.1 - Hardship Withdrawals from Accounts .................. 11
Section 6.2 - Withdrawals after a Change in Control ............... 11
Section 6.3 - Voluntary Withdrawals ............................... 11
Section 6.4 - Applicable Taxes .................................... 12
ARTICLE VII - ADMINISTRATIVE PROVISIONS ............................... 12
Section 7.1 - Administrator's Duties and Powers ................... 12
Section 7.2 - Limitations Upon Powers ............................. 12
Section 7.3 - Final Effect of Administrator Action ................ 13
Section 7.4 - Committee ........................................... 13
Section 7.5 - Indemnification by the Company; Liability Insurance . 13
Section 7.6 - Recordkeeping ....................................... 13
Section 7.7 - Statement to Participants ........................... 14
Section 7.8 - Inspection of Records ............................... 14
Section 7.9 - Identification of Fiduciaries ....................... 14
Section 7.10- Procedure for Allocation of Fiduciary Responsibilities 14
Section 7.11- Claims Procedure .................................... 14
Section 7.12- Conflicting Claims .................................. 16
Section 7.13- Service of Process .................................. 16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE VIII - MISCELLANEOUS PROVISIONS ............................... 16
Section 8.1 - Termination of the Plan ............................. 16
Section 8.2 - Limitation on Rights of Participants ................ 17
Section 8.3 - Consolidation or Merger; Adoption of Plan by
Other Companies ..................................... 17
Section 8.4 - Errors and Misstatements ............................ 17
Section 8.5 - Payment on Behalf of Minor, Etc. .................... 18
Section 8.6 - Amendment of Plan ................................... 18
Section 8.7 - No Funding .......................................... 18
Section 8.8 - Governing Law ....................................... 18
Section 8.9 - Pronouns and Plurality .............................. 18
Section 8.10- Titles .............................................. 18
Section 8.11- References .......................................... 19
</TABLE>
<PAGE>
COMPUTER SCIENCES CORPORATION
DEFERRED COMPENSATION PLAN
as Amended and Restated Effective November 4, 1996
Computer Sciences Corporation, a Nevada corporation, by resolution of its
Board of Directors dated August 14, 1995, has adopted the Computer Sciences
Corporation Deferred Compensation Plan (the "Plan"), which constitutes a
complete amendment and restatement of the Computer Sciences Corporation
Nonqualified Deferred Compensation Plan (the "Predecessor Plan"), effective as
of September 30, 1995, for the benefit of its Nonemployee Directors, as
defined below, and certain of its Key Executives, as defined below.
The Plan shall constitute two separate plans, one for the benefit of
Nonemployee Directors and one for the benefit of Key Executives. The plan for
Key Executives is a nonqualified deferred compensation plan which is unfunded
and is maintained primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated employees, within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as defined
below. The plan for Nonemployee Directors is not subject to ERISA.
ARTICLE I
DEFINITIONS
Section 1.1 General
- ----------- -------
Whenever the following terms are used in the Plan with the first letter
capitalized, they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.2 Account
- ----------- -------
"Account" of a Participant shall mean the Participant's individual
deferred compensation account established for his or her benefit under Article
IV hereof.
Section 1.3 Administrator
- ----------- -------------
"Administrator" shall mean Computer Sciences Corporation, acting through
its Chief Executive Officer or his or her delegate, except that if Computer
Sciences Corporation appoints a Committee under Section 7.4, the term
"Administrator" shall mean the Committee as to those duties, powers and
responsibilities specifically conferred upon the Committee.
<PAGE>
Section 1.4 Board
- ----------- -----
"Board" shall mean the Board of Directors of Computer Sciences
Corporation. The Board may delegate any power or duty otherwise allocated to
the Administrator to any other person or persons, including a Committee
appointed under Section 7.4.
Section 1.5 Change in Control
- ----------- -----------------
"Change in Control" means, after September 30, 1995, (a) the acquisition
by any person, entity or group (as defined in Section 13(d)3 of the Exchange
Act), as beneficial owner, directly or indirectly, of securities of Computer
Sciences Corporation representing twenty percent (20%) or more of the combined
voting power of the then outstanding securities of Computer Sciences
Corporation, (b) a change during any period of two (2) consecutive years of a
majority of the Board as constituted as of the beginning of such period,
unless the election of each director who was not a director at the beginning
of such period was approved by vote of at least two-thirds of the directors
then in office who were directors at the beginning of such period, (c) a sale
of substantially all of the property and assets of Computer Sciences
Corporation, (d) a merger, consolidation, reorganization or other business
combination to which Computer Sciences Corporation is a party and the
consummation of which results in the outstanding voting securities of Computer
Sciences Corporation being exchanged for or converted into cash, property
and/or securities not issued by Computer Sciences Corporation, or (e) any
other event constituting a change in control of Computer Sciences Corporation
for purposes of Schedule 14A of Regulation 14A under the Exchange Act.
Section 1.6 Chief Executive Officer
- ----------- -----------------------
"Chief Executive Officer" shall mean the Chief Executive Officer of
Computer Sciences Corporation.
Section 1.7 Code
- ----------- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
Section 1.8 Committee
- ----------- ---------
"Committee" shall mean the Committee, if any, appointed in accordance
with Section 7.4.
Section 1.9 Company
- ----------- -------
"Company" shall mean Computer Sciences Corporation and all of its
affiliates, and any entity which is a successor in interest to Computer
Sciences Corporation and which continues the Plan under Section 8.3(a).
2
<PAGE>
Section 1.10 Deferred Compensation
- ------------ ---------------------
"Deferred Compensation" of a Participant shall mean the amounts deferred
by such Participant under Article III of the Plan.
Section 1.11 Election Form
- ------------ -------------
"Election Form" shall mean the form of election provided by the
Administrator to each Eligible Executive and Nonemployee Director pursuant to
Section 3.1.
Section 1.12 Eligible Key Executive
- ------------ ----------------------
"Eligible Key Executive" shall mean any Key Executive who has been
designated as eligible to participate in the Plan with respect to any Plan
Year by the Chief Executive Officer.
Section 1.13 Employee
- ------------ --------
"Employee" shall mean any person who renders services to the Company in
the status of an employee as that term is defined in Code Section 3121(d),
including officers but not including directors who serve solely in that
capacity.
Section 1.14 ERISA
- ------------ -----
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
Section 1.15 Exchange Act
- ------------ ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section 1.16 Hardship
- ------------ --------
(a) "Hardship" of a Participant, shall mean any one or more of the
following:
(i) medical expenses described in Code Section 213(d) incurred by
the Participant, the Participant's spouse, or the Participant's dependents (as
described in Code Section 152) if such expenses can not be paid from any other
source;
(ii) purchase (excluding mortgage payments) of a principal residence
for the Participant;
(iii) payment of tuition for the next 12 months of post-secondary
education for the Participant, the Participant's spouse, or the Participant's
3
<PAGE>
dependents who are claimed as such on the Participant's federal income tax
return;
(iv) the need to prevent the Participant's eviction from the
Participant's primary residence, or foreclosure on the mortgage of the
Participant's primary residence; or
(v) any other financial need which the Internal Revenue Service has
approved as a financial hardship which permits distributions to be made to
participants under the financial hardship provisions of the Company's Matched
Asset Plan.
(b) Notwithstanding subsection(a) above, a financial need shall not
constitute a Hardship unless it is for at least $1,000.00 (or the entire
principal amount of the Participant's Accounts, if less).
(c) Whether a Participant has incurred a Hardship shall be determined by
the Administrator in its discretion on the basis of all relevant facts and
circumstances and in accordance with nondiscriminatory and objective
standards, uniformly interpreted and consistently applied.
Section 1.17 Key Executive
- ------------ -------------
"Key Executive" shall mean any Employee of the Company who is an officer
or other key executive of the Company and who qualifies as a "highly
compensated employee or management employee" within the meaning of Title I of
ERISA.
Section 1.18 Key Executive Plan
- ------------ ------------------
"Key Executive Plan" shall mean the portion of this Plan which is
maintained or the benefit of the Company's Key Executives.
Section 1.19 Nonemployee Director
- ------------ --------------------
"Nonemployee Director" shall mean a member of the Board who is not an
Employee.
Section 1.20 Nonemployee Director Plan
- ------------ -------------------------
"Nonemployee Director Plan" shall mean the portion of this Plan which is
maintained for the benefit of the Company's Nonemployee Directors.
Section 1.21 Partial First Plan Year
- ------------ -----------------------
"Partial First Plan Year" shall mean that portion of the first Plan Year
of the Plan subject to its amendment and restatement effective as of September
30, 1995, which shall begin on September 30, 1995 and end on March 29, 1996.
4
<PAGE>
Section 1.22 Participant
- ------------ -----------
"Participant" shall mean any person who elects to participate in the Plan
as provided in Article II and who defers Qualified Compensation under the
Plan.
Section 1.23 Plan
- ------------ ----
"Plan" shall mean the Computer Sciences Corporation Deferred Compensation
Plan.
Section 1.24 Plan Year
- ------------ ---------
"Plan Year" shall mean the fiscal year of the Company.
Section 1.25 Predecessor Plan
- ------------ ----------------
"Predecessor Plan" shall mean the Computer Sciences Corporation
Nonqualified Deferred Compensation Plan as in effect and maintained by the
Company for the benefit of its Nonemployee Directors prior to the amendment
and restatement of the Plan effective as of September 30, 1995.
Section 1.26 Retirement
- ------------ ----------
"Retirement" shall mean, with respect to a Key Executive, a Separation from
Service of such Key Executive (a) on or after attainment of age sixty-two (62)
or (b) prior to attainment of age sixty-two (62) if the Chief Executive
Officer shall designate such Separation from Service as Retirement for
purposes of the Plan.
Section 1.27 Separation from Service
- ------------ -----------------------
(a) "Separation from Service" of a Key Executive shall mean the
termination of his or her employment with the Company by reason resignation,
discharge, death or Retirement. A leave of absence or sick leave authorized
by the Company in accordance with established policies, a vacation period or a
military leave shall not constitute a Separation from Service; provided,
however, that failure to return to work upon expiration of any leave of
absence, sick leave, military leave or vacation shall be considered a
resignation effective as of the date of expiration of such leave of absence,
sick leave, military leave or vacation.
(b) "Separation from Service" of a Nonemployee Director shall mean the
Nonemployee Director's ceasing to serve as a member of the Board for any
reason.
Section 1.28 Qualified Compensation
- ------------ ----------------------
(a) "Qualified Compensation" of a Key Executive shall mean the Key
Executive's annual bonus which may be payable to the Key Executive under the
Computer Sciences Corporation Annual Incentive Plan or such other bonus or
5
<PAGE>
incentive compensation plan of the Company which may be designated from time
to time by the Administrator.
(b) "Qualified Compensation" of a Nonemployee Director shall mean the
retainer, consulting fees, committee fees and meeting fees which are payable
to the Nonemployee Director by the Company.
ARTICLE II
ELIGIBILITY
Section 2.1 Requirements for Participation
- ----------- ------------------------------
Any Eligible Key Executive and any Nonemployee Director shall be eligible
to be a Participant in the Plan.
Section 2.2 Deferral Election Procedure
- ----------- ---------------------------
For each Plan Year, the Administrator shall provide each Eligible Key
Executive and each Nonemployee Director with an Election Form on which such
person may elect to defer his or her Qualified Compensation under Article III.
Each such person who elects to defer Qualified Compensation under Article III
shall complete and sign the Election Form and return it to the Administrator.
Section 2.3 Content of Election Form
- ----------- ------------------------
Each Participant who elects to defer Qualified Compensation under the
Plan shall set forth on the Election Form specified by the Administrator:
(a) the amount of Qualified Compensation to be deferred under Article
III and the Participant's authorization to the Company to reduce his or her
Qualified Compensation by the amount of the deferred compensation,
(b) the length of time with respect to which the Participant elects to
defer the Deferred Compensation,
(c) the method under which the Participant's Deferred Compensation shall
be payable, and
(d) such other information, acknowledgments or agreements as may be
required by the Administrator.
6
<PAGE>
ARTICLE III
PARTICIPANTS' DEFERRALS
Section 3.1 Deferral of Qualified Compensation
- ----------- ----------------------------------
(a) Each Eligible Key Executive and Nonemployee Director may elect to
defer into his or her Account all or any portion of the Qualified Compensation
which would otherwise be payable to him or her for any Plan Year in which he
or she has not incurred a Separation from Service as of the first day of the
Plan Year in question. Such election shall be made by the Eligible Key
Executive or Nonemployee Director completing and delivering to the
Administrator his or her Election Form for such Plan Year no later than the
last day of the next preceding Plan Year, except (i) with respect to the
Partial First Plan Year, in which case such election shall be made not later
than September 29, 1995, and (ii) with respect to a person who first becomes
an Employee or Nonemployee Director during a Plan Year, which person may make
such election within 30 days after first becoming an Employee or Nonemployee
Director, respectively.
(b) Except as set forth in Sections 6.2 and 6.3 hereof, any such
election made by a Participant to defer Qualified Compensation shall be
irrevocable and shall not be amendable by the Participant.
Section 3.2 Deferral for Partial First Plan Year
- ----------- ------------------------------------
For the Partial First Plan Year, Participants may defer any or all of the
Qualified Compensation which is earned by them after September 29, 1995 and
before March 30, 1996. Deferral elections previously made by Nonemployee
Directors for the 1996 Plan Year shall only remain effective with respect to
Qualified Compensation earned prior to September 30, 1995.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
Section 4.1 Deferred Compensation Accounts
- ----------- ------------------------------
The Administrator shall establish and maintain for each Participant an
Account to which shall be credited the amounts allocated thereto under this
Article IV and from which shall be debited the Participant's distributions and
withdrawals under Articles V and VI.
Section 4.2 Crediting of Deferred Compensation
- ----------- ----------------------------------
Each Participant's Account shall be credited with an amount which is
equal to the amount of the Participant's Qualified Compensation which such
Participant
7
<PAGE>
has elected to defer under Article III at the time such Qualified Compensation
would otherwise have been paid to the Participant.
Section 4.3 Crediting of Earnings
- ----------- ---------------------
Beginning on September 30, 1995 and subject to amendment by the Board,
for each Plan Year earnings shall be credited to each Participant's Account
(including the Accounts of Nonemployee Directors under the Predecessor Plan),
at a rate equal to 120% of the 120-month rolling average interest payable on
10-year United States Treasury Notes as of December 31 of the preceding Plan
Year, compounded annually. Earnings shall be credited on such valuation dates
as the Administrator shall determine.
Section 4.4 Applicability of Account Values
- ----------- -------------------------------
The value of each Participant's Account as determined as of a given date
under this Article, plus any amounts subsequently allocated thereto under this
Article and less any amounts distributed or withdrawn under Articles V or VI
shall remain the value thereof for all purposes of the Plan until the Account
is revalued hereunder.
Section 4.5 Vesting of Deferred Compensation Accounts
- ----------- -----------------------------------------
Subject to the possible reductions provided for in Section 6.2 and 6.3
with respect to certain Participant withdrawals, each Participant's interest
in his or her Account shall be 100% vested and non-forfeitable at all times.
Section 4.6 Assignments, Etc. Prohibited
- ----------- ----------------------------
No part of any Participant's Account shall be liable for the debts,
contracts or engagements of the Participant, or the Participant's
beneficiaries or successors in interest, or be taken in execution by levy,
attachment or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any rights to alienate, anticipate, commute,
pledge, incumber or assign any benefits or payments hereunder in any manner
whatsoever except to designate a beneficiary as provided in Section 5.3.
ARTICLE V
DISTRIBUTIONS OF DEFERRED COMPENSATION ACCOUNTS
Section 5.1 Distributions upon a Key Executive's Retirement and a
- ----------- -----------------------------------------------------
Nonemployee Director's Separation from Service
----------------------------------------------
(a) The Account of a Key Executive who incurs a Separation from Service
upon his or her Retirement, and the Account of a Nonemployee Director who
incurs a Separation from Service, in each case other than on account of death,
shall be
8
<PAGE>
paid to the Participant as specified in any election made by the Participant
pursuant to Section 5.4 hereof. Any remaining balance of the Participant's
Account shall be paid to the Participant, as specified by the Participant in
an election made pursuant to this Section 5.1, in a lump-sum distribution or
in approximately equal annual installments over 5, 10 or 15 years. Payment(s)
shall commence within thirty (30) days following the date of such Separation
from Service.
(b) At the time a Participant first elects to defer Qualified
Compensation under the Plan, he or she shall make an election pursuant to this
Section 5.1. Such election shall remain in effect and shall apply to the
Participant's total Account, as the same may increase or decrease from time to
time. An election pursuant to this Section 5.1 may be superseded by a
subsequent election, which subsequent election shall then apply to the
Participant's total Account, as the same may increase or decrease from time to
time. Notwithstanding the foregoing, no subsequent election pursuant to this
Section 5.1 shall be effective unless it is made at least 13 months prior to
the Participant's Separation from Service.
Section 5.2 Distributions upon a Key Executive's Pre-Retirement Separation
- ----------- --------------------------------------------------------------
from Service
------------
The Account of a Key Executive who incurs a Separation from Service prior
to his or her Retirement and other than on account of his or her death shall
be paid to the Participant in a lump-sum distribution within thirty (30) days
following the date of such Separation from Service, notwithstanding any
election to the contrary made by the Participant pursuant to Section 5.4
hereof.
Section 5.3 Distributions upon a Participant's Death
- ----------- ----------------------------------------
(a) Notwithstanding anything to the contrary in the Plan, the remaining
balance of the Account of a Participant who dies (i) shall be paid to the
persons and entities designated by the Participant as his or her beneficiaries
for such purpose and (ii) shall be paid in the manner set forth in this
Section 5.3. With respect to a Participant who does not incur a Separation
from Service prior to his or her death, such balance shall be paid, as
specified by the Participant in an election made pursuant to this Section 5.3,
in a lump-sum distribution or in approximately equal annual installments over
5, 10 or 15 years. With respect to a Participant who does incur a Separation
from Service prior to his or her death, such balance shall be paid, as
specified by the Participant in an election made pursuant to this Section 5.3,
in a lump-sum distribution or in approximately equal annual installments over
the remaining term of the 5, 10 or 15-year payment period elected pursuant to
Section 5.1 hereof. Payment(s) shall commence within thirty (30) days
following the date of death.
(b) At the time a Participant first elects to defer Qualified
Compensation under the Plan, he or she shall make an election pursuant to this
Section 5.3. Such election shall remain in effect and shall apply to the
Participant's total Account, as the same may increase or decrease from time to
time. An election pursuant to this
9
<PAGE>
Section 5.3 may be superseded by a subsequent election, which subsequent
election shall then apply to the Participant's total Account, as the same may
increase or decrease from time to time. Notwithstanding the foregoing, no
subsequent election pursuant to this Section 5.3 shall be effective unless it
is made at least 13 months prior to the Participant's Separation from Service.
Section 5.4 Optional Distributions
- ----------- ----------------------
(a) At the time a Participant elects to defer Qualified Compensation for
any Plan Year, he or she may also elect, pursuant to this Section 5.4, to
receive a special, lump-sum distribution of any or all of the amount deferred
for such Plan Year on a date specified by the Participant in such election,
which date must be at least 24 months after the date of such election. Any
such special distribution shall be made within five (5) business days after
the date therefor specified by the Participant, unless the Participant shall
have died on or prior to such date, in which case no such special distribution
shall be made.
(b) An election pursuant to this Section 5.4 may be superseded by one
subsequent election; provided, however, that such subsequent election shall
not be effective unless: (i) it is irrevocable; (ii) it is made at least 13
months prior to the Participant's Separation from Service and at least 24
months prior to the date upon which the special distribution will be made; and
(iii) the date of the special distribution specified in the subsequent
election is earlier than the date specified in the initial election.
(c) Notwithstanding the foregoing, an election pursuant to this Section
5.4 with respect to the Partial First Plan Year may be superseded by two
subsequent elections; provided, however, that: (i) the first such subsequent
election shall not be effective unless it is made prior to March 30, 1996 and
at least 13 months prior to the Participant's Separation from Service and at
least 24 months prior to the date upon which the special distribution will be
made; and (ii) the second such subsequent election satisfies all the
requirements set forth in paragraph (b)(i), (ii) and (iii) of this Section
5.4.
Section 5.5 Applicable Taxes
- ----------- ----------------
All distributions under the Plan shall be subject to withholding for all
amounts which the Company is required to withhold under federal, state or
local tax law.
10
<PAGE>
ARTICLE VI
WITHDRAWALS FROM DEFERRED COMPENSATION ACCOUNTS
Section 6.1 Hardship Withdrawals from Accounts
- ----------- ----------------------------------
A Participant may make a withdrawal from the Participant's Account on
account of the Participant's Hardship, subject to all of the following
requirements:
(a) The Participant's withdrawal shall not exceed the amount which is
necessary to satisfy the Hardship;
(b) The denial of the Participant's Hardship withdrawal request would
result in severe financial hardship to the Participant; and
(c) The Participant has not received a Hardship withdrawal within the 12
month period preceding the withdrawal.
Section 6.2 Withdrawals after a Change in Control
- ----------- -------------------------------------
At any time within three years after the occurrence of a Change in
Control, a Key Executive may elect to withdraw all or any part of the Key
Executive's Account by delivering a written election to such effect to the
Administrator, provided, however, that if a Key Executive makes such an
election, (i) the Key Executive shall forfeit, and the Key Executive's Account
shall be debited with, an amount equal to 5% of the amount of the withdrawal
distribution, (ii) the Key Executive's deferral election for the Plan Year in
which the withdrawal distribution occurs shall be terminated with respect to
any Qualified Compensation which has not yet been deferred and (iii) the Key
Executive shall not be permitted to defer Qualified Compensation under the
Plan for the two Plan Years immediately following the Plan Year of the
withdrawal distribution.
Section 6.3 Voluntary Withdrawals
- ----------- ---------------------
At any time, a Participant may elect to withdraw all or any part of the
Participant's Account by delivering a written election to such effect to the
Administrator, provided, however, that if a Participant makes such an
election, (i) the Participant shall forfeit, and the Participant's Account
shall be debited with, an amount equal to 10% of the amount of the withdrawal
distribution, (ii) the Participant's deferral election for the Plan Year in
which the withdrawal distribution occurs shall be terminated with respect to
any Qualified Compensation which has not yet been deferred and (iii) the
Participant shall not be permitted to defer Qualified Compensation under the
Plan for the two Plan Years immediately following the year of the withdrawal
distribution.
11
<PAGE>
Section 6.4 Applicable Taxes
- ----------- ----------------
All withdrawals under the Plan shall be subject to withholding for all
amounts which the Company is required to withhold under federal, state or
local tax law.
ARTICLE VII
ADMINISTRATIVE PROVISIONS
Section 7.1 Administrator's Duties and Powers
- ----------- ---------------------------------
The Administrator shall conduct the general administration of the Plan in
accordance with the Plan and shall have all the necessary power, authority and
discretion to carry out that function. Among its necessary powers and duties
are the following:
(a) To delegate all or part of its function as Administrator to others
and to revoke any such delegation.
(b) To determine questions of eligibility of Participants and their
entitlement to benefits, subject to the provisions of Section 7.11.
(c) To select and engage attorneys, accountants, actuaries, trustees,
appraisers, brokers, consultants, administrators, physicians, or other persons
to render service or advice with regard to any responsibility the
Administrator or the Board has under the Plan, or otherwise, to designate such
persons to carry out fiduciary responsibilities under the Plan, and (together
with the Committee, the Company, the Board and the officers and Employees of
the Company) to rely upon the advice, opinions or valuations of any such
persons, to the extent permitted by law, being fully protected in acting or
relying thereon in good faith.
(d) To interpret the Plan and any relevant facts for purpose of the
administration and application of the Plan, in a manner not inconsistent with
the Plan or applicable law and to amend or revoke any such interpretation.
(e) To conduct claims procedures as provided in Section 7.11.
Section 7.2 Limitations Upon Powers
- ----------- -----------------------
The Plan shall be uniformly and consistently administered, interpreted
and applied with regard to all Participants in similar circumstances. The
Plan shall be administered, interpreted and applied fairly and equitably and
in accordance with the specified purposes of the Plan.
12
<PAGE>
Section 7.3 Final Effect of Administrator Action
- ----------- ------------------------------------
Except as provided in Section 7.11, all actions taken and all
determinations made by the Administrator in good faith shall be final and
binding upon all Participants, the Company and any person interested in the
Plan.
Section 7.4 Committee
- ----------- ---------
(a) The Administrator may, but need not, appoint a Committee consisting
of two or more members to hold office during the pleasure of the
Administrator. The Committee shall have such powers and duties as are
delegated to it by the Administrator. Committee members shall not receive
payment for their services as such.
(b) Appointment of Committee members shall be effective upon filing of
written acceptance of appointment with the Administrator.
(c) A Committee member may resign at any time by delivering written
notice to the Administrator.
(d) Vacancies in the Committee shall be filled by the Administrator.
(e) The Committee shall act by a majority of its members in office;
provided, however, that the Committee may appoint one of its members or a
delegate to act on behalf of the Committee on matters arising in the ordinary
course of administration of the Plan or on specific matters.
Section 7.5 Indemnification by the Company; Liability Insurance
- ----------- ----------------------------------------------------
The Company shall pay or reimburse any of the Company's officers,
directors, Committee members or Employees who are fiduciaries with respect to
the Plan for all expenses incurred by such persons in, and shall indemnify and
hold them harmless from, all claims, liability and costs (including reasonable
attorneys' fees) arising out of the good faith performance of their duties
under the Plan. The Company may obtain and provide for any such person, at
the Company's expense, liability insurance against liabilities imposed on such
person by law.
Section 7.6 Recordkeeping
- ----------- -------------
(a) The Administrator shall maintain suitable records of each
Participant's Account which, among other things, shall show separately
deferrals and the earnings credited thereon, as well as distributions and
withdrawals therefrom and records of its deliberations and decisions.
(b) The Administrator shall appoint a secretary, and at its discretion,
an assistant secretary, to keep the record of proceedings, to transmit its
decisions, instructions, consents or directions to any interested party, to
execute and file, on
13
<PAGE>
behalf of the Administrator, such documents, reports or other matters as may
be necessary or appropriate under ERISA and to perform ministerial acts.
(c) The Administrator shall not be required to maintain any records or
accounts which duplicate any records or accounts maintained by the Company.
Section 7.7 Statement to Participants
- ----------- -------------------------
By March 15 of each year, the Administrator shall furnish to each
Participant a statement setting forth the value of the Participant's Account
as of the preceding December 31 and such other information as the
Administrator shall deem advisable to furnish.
Section 7.8 Inspection of Records
- ----------- ---------------------
Copies of the Plan and records of a Participant's Account shall be open
to inspection by the Participant or the Participant's duly authorized
representatives at the office of the Administrator at any reasonable business
hour.
Section 7.9 Identification of Fiduciaries
- ----------- -----------------------------
The Administrator shall be the named fiduciary of the Plan and, as
permitted or required by law, shall have exclusive authority and discretion to
operate and administer the Plan.
Section 7.10 Procedure for Allocation of Fiduciary Responsibilities
- ------------ ------------------------------------------------------
(a) Fiduciary responsibilities under the Plan are allocated as follows:
(i) The sole duties, responsibilities and powers allocated to the
Board, any Committee and any fiduciary shall be those expressly provided in
the relevant Sections of the Plan.
(ii) All fiduciary duties, responsibilities, and powers not allocated
to the Board, any Committee or any fiduciary, are hereby allocated to the
Administrator, subject to delegation.
(b) Fiduciary duties, responsibilities and powers under the Plan may be
reallocated among fiduciaries by amending the Plan in the manner prescribed in
Section 8.6, followed by the fiduciaries' acceptance of, or operation under,
such amended Plan.
Section 7.11 Claims Procedure
- ------------ ----------------
(a) No distributions under this Plan to a Participant, former
Participant or Participant's beneficiary shall be made except upon a claim
filed in writing with the
14
<PAGE>
Committee, if in existence, or otherwise to a claims official designated by
the Administrator.
(b) If the Committee or claims official wholly or partially denies the
claim, it or he shall, within a reasonable period of time after receipt of the
claim, provide the claimant with written notice of such denial, setting forth,
in a manner calculated to be understood by the claimant:
(i) the specific reason or reasons for such denial;
(ii) specific reference to pertinent Plan provisions on which the
denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
(iv) an explanation of the Plan's claims review procedure.
(c) The Administrator shall provide each claimant with a reasonable
opportunity to appeal a denial of a claim to the Chief Executive Officer or
his or her authorized delegate for a full and fair review. The claimant or
his or her duly authorized representative:
(i) may request a review upon written application to the Chief
Executive Officer or his authorized delegate (which shall be filed with the
Committee or claims official);
(ii) may review pertinent documents; and
(iii) may submit issues and comments in writing.
(d) The Chief Executive Officer or his authorized delegate may establish
such time limits within which a claimant may request review of a denied claim
as are reasonable in relation to the nature of the benefit which is the
subject of the claim and to other attendant circumstances but which shall be
not less than sixty days after receipt by the claimant of written notice of
denial of his or her claim.
(e) The decision by the Chief Executive Officer or his delegate upon
review of a claim shall be made not later than sixty days after receipt by the
chief Executive Officer or his authorized delegate of the request for review,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later
than one hundred twenty days after receipt of such request for review.
(f) The decision on review shall be in writing and shall include
specific reasons for the decision written in a manner calculated to be
understood by the
15
<PAGE>
claimant with specific references to the pertinent Plan provisions on which
the decision is based.
(g) To the extent permitted by law, the decision of the Committee or
claims official, if no appeal is filed, or the decision of the Chief Executive
Officer or his delegate on review, when warranted on the record and reasonably
based on the law and the provisions of the Plan, shall be final and binding on
all parties.
Section 7.12 Conflicting Claims
- ------------ ------------------
If the Administrator is confronted with conflicting claims concerning a
Participant's Account, the Administrator may interplead the claimants in an
action at law, or in an arbitration conducted in accordance with the rules of
the American Arbitration Association, as the Administrator shall elect in its
sole discretion, and in either case, the attorneys' fees, expenses and costs
reasonably incurred by the Administrator in such proceeding shall be paid from
the Participant's Account.
Section 7.13 Service of Process
- ------------ ------------------
The Secretary of Computer Sciences Corporation is hereby designated as
agent of the Plan for the service of legal process.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Termination of the Plan
- ----------- -----------------------
(a) While the Plan is intended as a permanent program, the Board shall
have the right at any time to declare the Plan terminated completely as to the
Company or as to any group, division or other operational unit thereof or as
to any affiliate thereof.
(b) Discharge or layoff of any Employees without such a declaration
shall not result in a termination of the Plan.
(c) In the event of any termination, the Board, in its sole and absolute
discretion may elect to:
(i) maintain Participants' Accounts, payment of which shall be made
in accordance with Articles V and VI; or
(ii) liquidate the portion of the Plan attributable to each
Participant as to whom the Plan is terminated and distribute each such
Participant's Account in a lump sum or pursuant to any method which is at
least as rapid as the distribution method elected by the Participant under
Section 5.4.
16
<PAGE>
Section 8.2 Limitation on Rights of Participants
- ----------- ------------------------------------
The Plan is strictly a voluntary undertaking on the part of the Company
and shall not constitute a contract between the Company and any Employee or
any Nonemployee Director, or consideration for, or an inducement or condition
of, the employment of an Employee or service of a Nonemployee Director.
Nothing contained in the Plan shall give any Employee or Nonemployee Director
the right to be retained in the service of a Company or to interfere with or
restrict the right of the Company, which is hereby expressly reserved, to
discharge or retire any Employee or Nonemployee Director, except as otherwise
provided by a written employment agreement between the Company and the
Employee or Nonemployee Director, at any time without notice and with or
without cause. Inclusion under the Plan will not give any Employee or
Nonemployee Director any right or claim to any benefit hereunder except to the
extent such right has specifically become fixed under the terms of the Plan.
The doctrine of substantial performance shall have no application to
Employees, Nonemployee Directors, Participants or any other persons entitled
to payments under the Plan.
Section 8.3 Consolidation or Merger; Adoption of Plan by Other Companies
- ----------- ------------------------------------------------------------
(a) In the event of the consolidation or merger of the Company with or
into any other entity, or the sale by the Company of substantially all of its
assets, the resulting successor may continue the Plan by adopting it in a
resolution of its Board of Directors. If within 90 days from the effective
date of such consolidation, merger or sale of assets, such successor
corporation does not adopt the Plan, the Plan shall be terminated in
accordance with Section 8.1.
(b) There shall be no merger or consolidation with, or transfer of the
liabilities of the Plan to, any other plan unless each Participant in the Plan
would have, if the combined or successor plans were terminated immediately
after the merger, consolidation, or transfer, an account which is equal to or
greater than his or her corresponding Account under the Plan had the Plan been
terminated immediately before the merger, consolidation or transfer.
Section 8.4 Errors and Misstatements
- ----------- ------------------------
In the event of any misstatement or omission of fact by a Participant to
the Administrator or any clerical error resulting in payment of benefits in an
incorrect amount, the Administrator shall promptly cause the amount of future
payments to be corrected upon discovery of the facts and shall cause the
Company to pay the Participant or any other person entitled to payment under
the Plan any underpayment in cash in a lump sum, or to recoup any overpayment
from future payments to the Participant or any other person entitled to
payment under the Plan in such amounts as the Administrator shall direct, or
to proceed against the Participant or any other person entitled to payment
under the Plan for recovery of any such overpayment.
17
<PAGE>
Section 8.5 Payment on Behalf of Minor, Etc.
- ----------- --------------------------------
In the event any amount becomes payable under the Plan to a minor or a
person who, in the sole judgment of the Administrator, is considered by reason
of physical or mental condition to be unable to give a valid receipt therefor,
the Administrator may direct that such payment be made to any person found by
the Administrator in its sole judgment, to have assumed the care of such minor
or other person. Any payment made pursuant to such determination shall
constitute a full release and discharge of the Company, the Board, the
Administrator, the Committee and their officers, directors and employees.
Section 8.6 Amendment of Plan
- ----------- -----------------
The Plan may be wholly or partially amended by the Board from time to
time, in its sole and absolute discretion, including prospective amendments
which apply to amounts held in a Participant's Account as of the effective
date of such amendment and including retroactive amendments necessary to
conform to the provisions and requirements of ERISA or the Code or regulations
pursuant thereto; provided, however, that no amendment shall decrease the
amount of any Participant's Account as of the effective date of such
amendment.
Section 8.7 No Funding
- ----------- ----------
All benefits payable under the Plan will be paid from the general assets
of the Company and no Participant or beneficiary shall have any claim against
any specific assets of the Company.
Section 8.8 Governing Law
- ----------- -------------
The Plan shall be construed, administered and governed in all respects
under and by the laws of the State of California, except to the extent such
laws may be preempted by ERISA.
Section 8.9 Pronouns and Plurality
- ----------- ----------------------
The masculine pronoun shall include the feminine pronoun, and the
singular the plural where the context so indicates.
Section 8.10 Titles
- ------------ ------
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan.
18
<PAGE>
Section 8.11 References
- ------------ ----------
Unless the context clearly indicates to the contrary, a reference to a
statute, regulation or document shall be construed as referring to any
subsequently enacted, adopted or executed statute, regulation or document.
EXHIBIT 10.11
COMPUTER SCIENCES CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
Purpose
-------
The purpose of this Supplemental Executive Retirement Plan ("Supplemental
Plan") is to provide retirement benefits to designated officers and key
executives of Computer Sciences Corporation (the "Company") in addition to
retirement benefits that may be payable under the Computer Sciences
Corporation Employee Pension Plan, and in addition to any other retirement
plan (other than the social security system to the extent provided herein)
under which benefits may be payable with respect to such person.
It is intended that this Supplemental Plan be a plan "for a select group
of management or highly compensated employees" as set forth in Section 201(2)
of the Employee Retirement Income Security Act of 1974.
Benefits under this Supplemental Plan shall be payable solely from the
general assets of the Company and no Participant or other person shall be
entitled to look to any source for payment of such benefits other than the
general assets of the Company.
ARTICLE II
Effective Date/Restatement Date
-------------------------------
The Supplemental Plan was effective as of September 1, 1985. It is hereby
amended and restated effective November 4, 1996.
ARTICLE III
Participants
------------
No person shall be a Participant in this Supplemental Plan unless (a)
such individual is specifically designated as such in a written instrument
executed by the Chief Executive Officer of the Company (the "Chief Executive
Officer"), and (b) such individual has consented to be governed by the terms
of this Supplemental Plan by execution of a written instrument in form
satisfactory to the Company.
A person shall cease to be a Participant in this Supplemental Plan in the
event of (a) a Plan amendment having such effect, or (b) the occurrence of an
event described in this Supplemental Plan which terminates such participation,
or (c) the Chief Executive Officer notifies such person, in writing, of the
discontinuance of
<PAGE>
such person's participation pursuant to Article XVIII of this Supplemental
Plan. In determining whether any person shall commence or cease to be a
Participant herein, the Chief Executive Officer, acting in such capacity,
shall have complete and unfettered discretion.
ARTICLE IV
Retirement Benefits
-------------------
The amount of retirement benefit payable to each Participant upon
Separation from Service (as defined in paragraph (d) below) shall be as
determined in this Article IV.
(a) A Participant who is entitled to receive a benefit under the
Computer Sciences Corporation Employee Pension Plan ("Pension Plan"), shall be
entitled to receive his Excess Benefit under this Supplemental Plan upon being
fully vested under the Pension Plan. The Excess Benefit is the additional
monthly amount which the Participant would otherwise be entitled to receive
under the Pension Plan as if the Participant had elected the normal form of
life annuity payment option under the Pension Plan except for the limitations
imposed by Sections 401(a)(17) and 415 of the Internal Revenue Code, as
amended. In addition to the benefit described in this paragraph (a), a benefit
as described in paragraph (b) following shall be payable to the Participant.
(b) Each Participant, upon Separation from Service on or after
attainment of age sixty-two (62) (the "Retirement Date"), shall receive an
amount as determined under this paragraph (b) which is payable monthly in the
form of a life annuity. The amount payable shall be equal to one-twelfth
(1/12) of fifty percent (50%) of the Participant's Average Base Salary Rate
(as defined in paragraph (d) below) reduced by the amount determined under
paragraph (c) below and, as applicable, paragraph (e) below.
(c) The amount determined under this paragraph (c) shall generally be
equal to the primary social security benefit paid or payable to the
Participant at the time benefits commence under this Supplemental Plan,
whether or not the Participant is denied social security benefits because of
other income or voluntarily forgoes social security income. However, where a
Participant commences to receive benefits under this Supplemental Plan prior
to the date that he is entitled to commence receiving social security benefits
(currently age sixty-two (62)), his benefits under this Plan shall be reduced,
by the amount of social security benefits it is estimated he would be entitled
to receive monthly. The estimated social security benefit will be calculated
based on the Participant's compensation through his Separation from Service
date as though he were age sixty-two (62) on such date, and in accordance with
social security rules in effect at the time of his Separation from Service.
If the Participant has qualified for a special early separation benefit
pursuant to paragraph (b) of Article V, then a five percent (5%)
2
<PAGE>
annual reduction factor, with proportionate fractional reduction for periods
of fewer than twelve (12) months, shall be applied to the estimated social
security benefit for the period between the date of the Participant's
Separation from Service and the date he is expected to attain age sixty-two
(62). By way of example, if a Participant otherwise entitled to benefits
commencing at age sixty-two (62) retires at age sixty (60) and qualifies for a
special early separation benefit pursuant to paragraph (b) of Article V and
the Participant's social security benefit is assumed to be $8,000 a year at
the projected age of sixty-two (62), then the estimated annual social security
benefit determined under this paragraph (c) will be $7,200, which is the
$8,000 reduced at 5% per year for two years, or 10% .
(d) The term "Base Salary Rate" means the annual salary rate of a
Participant exclusive of overtime, bonus, incentive or any other type of
special compensation. The term "Average Base Salary Rate" means the average of
the highest three (3) of the last five (5) Base Salary Rates of a Participant
which are the Base Salary Rates in effect on his Retirement Date and on the
same day and month for each of the four (4) years (or the period of Continuous
Service if fewer than four (4) years) immediately preceding the Retirement
Date.
Unless otherwise determined in writing with respect to a Participant by
the Chief Executive Officer, the term "Continuous Service" means the period of
service without interruption of a person commencing as of the date of hire of
such person by the Company or an Affiliate and ending on the date of
separation from service for any reason from the Company and all Affiliates
("Separation from Service"). The term "Affiliate" means a corporation or other
entity of which fifty-one percent (51%) or more of the capital stock or
capital or profits interest (in the case of a noncorporate entity) is directly
or indirectly owned by the Company. A medical leave of absence not exceeding
twelve (12) months authorized by a Company written policy or any other leave
of absence authorized by a Company written policy or approved in writing by
the Chief Executive Officer shall not be deemed an interruption in Continuous
Service or a Separation from Service.
In the event the Company acquires a corporation or other entity
("Acquisition"), and any employee of the Acquisition, by written determination
of the Chief Executive Officer of the Company, becomes a Participant in the
Supplemental Plan, such Participant's period of Continuous Service shall
commence no sooner than the date the Acquisition becomes an Affiliate of the
Company unless the Company's Chief Executive Officer otherwise determines and
so confirms in writing.
(e) If upon Separation from Service on or after attaining age sixty-two
(62), or upon the granting of a special early separation benefit pursuant to
paragraph (b) of Article V, a Participant has fewer than twelve (12) years of
Continuous Service, the benefit otherwise payable under this Supplemental Plan
shall be proportionately reduced, except for the benefit payable under
paragraph (a)
3
<PAGE>
of this Article IV which shall not be reduced. By way of example, if a
Participant otherwise entitled to benefits hereunder commencing at age sixty-
two (62) has completed only ten (10) years of Continuous Service upon
attainment of age sixty-two (62), such Participant's benefit shall be 10/12,
or 83.33%, of the benefit otherwise payable hereunder.
Unless expressly determined to the contrary in writing by the Chief
Executive Officer, no period of service completed by a person after attainment
of age sixty-five (65) and no adjustment to any person's Base Salary Rate
which occurs after attainment of age sixty-five (65) shall be taken into
account in computing benefits hereunder.
ARTICLE V
Eligibility for Benefits
------------------------
(a) Participants shall become eligible to commence receiving retirement
benefits under this Supplemental Plan after Separation from Service on or
after attaining age sixty-two (62) and such benefits shall be calculated in
accordance with the provisions of Article IV. Except as otherwise provided in
paragraph (a) of Article IV and in Articles Vll, IX and X, no Participant in
this Supplemental Plan shall have any vested interest in or right to receive a
benefit hereunder until attainment of the age of sixty-two (62). Unless
otherwise determined in writing by the Chief Executive Officer, any
interruption in the Continuous Service of a Participant herein prior to the
attainment of age sixty-two (62) shall terminate the participation in this
Supplemental Plan of such Participant, and no benefit shall be payable to or
with respect to such Participant.
(b) In the sole and unfettered discretion of the Chief Executive
Officer, a Participant whose Separation from Service occurs prior to
attainment of age sixty-two (62) may qualify for a special early separation
benefit, payable monthly as calculated in accordance with the provisions of
Article IV, except as follows:
(i) For purposes of determining the Participant's Base Salary Rate,
the Average Base Salary Rate and the number of years of Continuous Service
completed by the Participant, the Participant's date of Separation from
Service shall apply instead of the date of the Participant's attainment of age
sixty-two (62); and
(ii) For each twelve (12) month period by which the date of
commencement of the Participant's benefit precedes the Participant's sixty-
second (62nd) birthday, the benefit otherwise payable shall be reduced by five
percent (5%), except for the benefit payable under paragraph (a) of Article IV
which shall not be reduced. Proportionate fractional reduction shall be used
for periods of fewer than twelve (12) months.
4
<PAGE>
ARTICLE VI
Form of Benefit Payments
------------------------
(a) Except as provided in Article Vll, benefits payable based on the
calculations in Article IV of this Supplemental Plan shall be paid monthly for
the life-time of the Participant (unless an optional form is selected under
paragraphs (b) or (c) of this Article Vl). Upon the death of the Participant,
benefits shall continue to be paid to the Participant's spouse for the
lifetime of such spouse at the rate of fifty percent (50%) of Participant's
benefit, provided certain conditions are met. The conditions of such Spousal
Benefit are (1) that the spouse shall be married to the Participant as of the
date of the Participant's Separation from Service and (2) the spouse shall be
no more than five years younger than the Participant. In the event the spouse
is more than five years younger than the Participant, the Participant may
elect to receive benefit payments in the form of a joint and survivor option
as described in paragraph (c) following.
(b) Any Participant, who before September 1, 1993 has commenced to
receive benefits and has not made a written election to receive an annuity
pursuant to paragraph (a) preceding or paragraph (c) following, shall be
entitled to one hundred twenty (120) monthly benefit payments in the amount
specified in paragraph (b) of Article IV preceding and a life annuity of the
Excess Benefit as defined in paragraph (a) of Article IV preceding. If a
Participant, who before September 1, 1993, has commenced to receive benefits
and has not made a written election to receive an annuity pursuant to
paragraph (a) preceding or paragraph (c) following, dies after Separation from
Service and before receiving one hundred and twenty (120) monthly benefit
payments, the remainder of the one hundred and twenty (120) monthly benefit
payments shall be made to the Participant's designated beneficiary or, if no
such beneficiary is then living or no such beneficiary can be located, to the
Participant's estate. In the event a Participant has made a written election,
prior to September 1, 1993, to receive an annuity pursuant to paragraph (a)
preceding or paragraph (c) following, no benefit shall be payable under this
paragraph (b), except that any Excess Benefit under the Pension Plan, as
provided in paragraph (a) of Article IV, shall be payable at the rate of fifty
percent (50%) thereof to the Participant's spouse.
(c) In the event that the Participant's spouse is more than five years
younger than Participant, at any time prior to the later of September 1, 1993
or the commencement of benefits under this Supplemental Plan, a Participant
may, in lieu of receiving benefits in the form described in paragraph (a) of
this Article Vl, elect to receive benefit payments under this Supplemental
Plan in the form of a joint and survivor option providing monthly benefits for
the lifetime of the Participant with a stipulated percentage of such amount
continued after the Participant's death to the spouse to whom the Participant
is married as of the date of the Participant's Separation from Service, for
the lifetime of such spouse. The amount of monthly
5
<PAGE>
payments available under this option shall be determined by reference to
factors such as the Participant's life expectancy, the life expectancy of the
Participant's spouse, prior benefits received under the Supplemental Plan, and
the percentage of the Participant's monthly benefit which is continued after
the Participant's death to the Participant's spouse, so that the value of the
joint and survivor option is the actuarial equivalent of the benefits
otherwise payable under paragraph (a) (or paragraph (b) if the Participant has
elected coverage under paragraph (b) preceding) of this Article Vl inclusive
of the Participant and the spousal fifty percent (50%) survivor benefits,
which shall be calculated assuming the Participant's spouse was exactly five
years younger than Participant. In determining the monthly amount payable
under the joint and survivor option with respect to any Participant, the
Company may rely upon such information as it, in its sole discretion, deems
reliable, including but not limited to, the opinion of an enrolled actuary or
annuity purchase rates quoted by an insurance company licensed to conduct an
insurance business in the State of California. The election of a joint and
survivor option is irrevocable after benefit payments have commenced, and the
monthly amount payable during the lifetime of the Participant shall in no
event be adjusted by reason of the death of the Participant's spouse prior to
the death of the Participant, or by reason of the dissolution of the marriage
between the Participant and such spouse, or for any other reason.
ARTICLE VII
Pre-retirement Death Benefits
-----------------------------
In the event of the death of a Participant hereunder during a period of
Continuous Service and participation in this Supplemental Plan, the
beneficiary or the spouse of the Participant shall be entitled to benefits as
provided below in paragraphs (a) and (b):
(a) Participant's spouse shall be entitled to a fifty percent (50%) or
the actuarial equivalent spousal benefit (as determined pursuant to Article
Vl, paragraphs (a) or (c), as applicable), attributable to Participant's
Excess Benefit under the Pension Plan provided the Participant is entitled to
receive a benefit under the Pension Plan.
(b) At the written election of the Participant, either a benefit under
paragraph (i) below or a benefit under paragraph (ii) below shall be paid by
the Company. Such election shall be signed by the Participant and notarized
and, if the Participant is married at the time of election, the election must
also be signed by the Participant's spouse and notarized. The latest election
on file in the Company's records shall be controlling.
(i) A lump sum death benefit shall be payable by the Company to the
Participant's designated beneficiary or, if no such beneficiary is then living
or no such beneficiary can be located, to the Participant's estate.
6
<PAGE>
The amount of such death benefit shall be two (2) times the Participant's Base
Salary Rate in effect on the date of the Participant's death. On the written
request of a beneficiary but subject to the approval in writing of the Chief
Executive Officer, the amount payable under this paragraph (b)(i) may be paid
to a beneficiary in monthly or other installments over a period not exceeding
one hundred and twenty (120) months.
(ii) Participant's spouse shall receive a spousal fifty percent (50%)
or the actuarial equivalent spousal benefit (as determined pursuant to Article
Vl, paragraphs (a) or (c), as applicable), as provided for in paragraph (a)
preceding and in Article IV and Article Vl. In the event a Participant is not
married at the time of Participant's death and the Participant has elected the
fifty percent (50%) spousal benefit, a lump sum death benefit shall be payable
in accordance with paragraph (b)(i) preceding.
No benefits shall be payable under this Article Vll if the Participant's
death occurs as a result of an act of suicide within twenty-five (25) months
after commencement of participation in this Supplemental Plan.
ARTICLE VIII
No Disability Benefits
----------------------
No disability benefit is payable under this Supplemental Plan.
ARTICLE IX
Right to Amend, Modify, Suspend or Terminate Plan
-------------------------------------------------
By action of the Company's Board of Directors, the Company may amend,
modify, suspend or terminate this Supplemental Plan without further liability
to any employee or former employee or any other person. Notwithstanding the
preceding sentence, this Supplemental Plan may not be amended, modified,
suspended or terminated as to a Participant whose Separation from Service has
occurred and who is entitled to receive or has commenced to receive benefits
under this Supplemental Plan, without the express written consent of such
Participant or, if deceased, such Participant's designated beneficiary or, if
no beneficiary is then living or if no beneficiary can be located, such
Participant's legal representative.
If within three (3) years following a Change in Control (as defined in
Article X) this Supplemental Plan is amended, modified, suspended or
terminated as to all Participants or as to any Participant who was a
Participant prior to such Change in Control, such Participant(s) shall become
fully vested in benefits accrued under this Supplemental Plan as of the date
of such amendment, modification,
7
<PAGE>
suspension or termination taking into account Continuous Service to such date
and the Average Base Salary Rate of the Participant(s) as of such date. Upon
any subsequent Separation from Service, such Participant(s) shall be entitled
immediately to receive benefits under Articles IV, V, Vl, Vll and X, as
applicable, as such Articles were in effect on the date of such Change in
Control, without regard to the approval of the Chief Executive Officer or any
other person(s).
ARTICLE X
Change in Control
-----------------
The term "Change in Control" means, after the effective date of this
Supplemental Plan, (a) the acquisition by any person, entity or group (as
defined in Section 13(d)3 of the Securities Exchange Act of 1934, as amended)
as beneficial owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
then outstanding securities of the Company, (b) a change during any period of
two (2) consecutive years of a majority of the Board of Directors as
constituted as of the beginning of such period, unless the election of each
director who was not a director at the beginning of such period was approved
by vote of at least two-thirds of the directors then in office who were
directors at the beginning of such period, (c) a sale of substantially all of
the property and assets of the Company, (d) a merger, consolidation,
reorganization or other business combination to which the Company is a party
and the consummation of which results in the outstanding voting securities of
the Company being exchanged for or converted into cash, property and/or
securities not issued by the Company, or (e) any other event constituting a
change in control of the Company for purposes of Schedule 14A of Regulation
14A under the Securities Exchange Act of 1934.
In the event a Participant who was a Participant as of the date of a
Change in Control either (a) has a voluntary Separation from Service for any
reason (including the death of the Participant) more than twelve (12) full
calendar months after, but within thirty-six (36) full calendar months
following, such Change in Control, or (b) has an involuntary Separation from
Service for any reason within thirty-six full calendar months following such
Change in Control, such Participant shall be entitled to receive immediately
upon such Separation from Service benefits hereunder in accordance with
Articles IV, Vl and Vll, as applicable, without regard to approval by the
Chief Executive Officer or any other person(s). Such benefits shall be
calculated as if, on the date of such Separation from Service, the Participant
(i) had completed a number of years of Continuous Service equal to the greater
of twelve (12) or the actual number of years of his or her Continuous Service,
and (ii) had attained an age equal to the greater of sixty-two (62) or his or
her actual age.
8
<PAGE>
ARTICLE XI
No Assignment
-------------
Benefits under this Supplemental Plan may not be assigned or alienated
and shall not be subject to the claims of any creditor.
ARTICLE XII
Administration
--------------
This Supplemental Plan shall be administered by the Chief Executive
Officer or by such other person or persons to whom the Chief Executive Officer
may delegate functions hereunder. With respect to all matters pertaining to
this Supplemental Plan, the determination of the Chief Executive Officer or
his designated delegate shall be conclusive and binding. The Chief Executive
Officer shall be eligible to participate in this Supplemental Plan in the same
manner as any other employee; provided, however, that the designation of the
Chief Executive Officer as a Participant and any other action provided herein
with respect to the Chief Executive Officer's participation shall be taken by
the Compensation Committee of the Board of Directors of the Company.
ARTICLE XIII
Release
-------
In connection with any benefit or benefit payment under this Supplemental
Plan, or the designation of any beneficiary or any election or other action
taken or to be taken under the Supplemental Plan by any Participant or any
other person, the Company, acting through its Chief Executive Officer or his
delegate, may require such consents or releases as are reasonable under the
circumstances, and further may require any such designation, election or other
action to be in writing and in form reasonably satisfactory to the Chief
Executive Officer or his delegate.
ARTICLE XIV
No Waiver
---------
The failure of the Company, the Chief Executive Officer or any other
person acting on behalf thereof to demand a Participant or other person
claiming rights with respect to a Participant to perform any act which such
person is or may be required to perform hereunder shall not constitute a
waiver of such requirement or a waiver of the right to require such act. The
exercise of or failure to exercise any discretion reserved to the Company, its
Chief Executive Officer or his delegate, to grant or deny any benefit to any
Participant or other person under this Supplemental Plan shall in no way
require the Company, its Chief Executive Officer
9
<PAGE>
or his delegate to similarly exercise or fail to exercise such discretion with
respect to any other Participant.
ARTICLE XV
No Contract
-----------
This Supplemental Plan is strictly a voluntary undertaking on the part of
the Company and shall not be deemed to constitute a contract or part of a
contract between the Company (or an Affiliate) and any employee or other
person, nor shall it be deemed to give any employee the right to be retained
for any specified period of time in the employ of the Company (or an
Affiliate) or to interfere with the right of the Company (or an Affiliate) to
discharge or retire any employee at any time, nor shall this Supplemental Plan
interfere with the right of the Company (or an Affiliate) to establish the
terms and conditions of employment of any employee.
ARTICLE XVI
Indemnification
---------------
The Company shall defend, indemnify and hold harmless the Officers and
Directors of the Company acting in their capacity as such (and not as
Participants herein) from any and all claims, expenses and liabilities arising
out of their actions or failure to act hereunder, excluding fraud or willful
misconduct.
ARTICLE XVII
Claim Review Procedure
----------------------
To the extent required by Section 503 of the Employee Retirement Income
Security Act of 1974, a reasonable claim review procedure shall be established
by the Company.
ARTICLE XVIII
Termination of Benefits and Participation
-----------------------------------------
Prior, but only prior to a Change in Control, the retirement benefits
payable to any Participant under this Supplemental Plan, and the participation
of such Participant in this Supplemental Plan, may be terminated if in the
judgment of the Chief Executive Officer, upon the advice of counsel, such
Participant, directly or indirectly:
(a) breaches any obligation to the Company under any agreement relating
to assignment of inventions, disclosure of information or data, or similar
matters; or
10
<PAGE>
(b) competes with the Company, or renders competitive services (as a
director, officer, employee, consultant or otherwise) to, or owns more than a
5% interest in, any person or entity that competes with the Company; or
(c) solicits, diverts or takes away any person who is an employee of the
Company or advises or induces any employee to terminate his or her employment
with the Company; or
(d) solicits, diverts or takes away any person or entity that is a
customer of the Company, or advises or induces any customer or potential
customer not to do business with the Company; or
(e) discloses to any person or entity other than the Company, or makes
any use of, any information relating to the technology, know-how, products,
business or data of the Company or its subsidiaries, suppliers, licensors or
customers, including but not limited to the names, addresses and special
requirements of the customers of the Company.
EXHIBIT 10.16
FIRST AMENDMENT TO
CREDIT AGREEMENT
FIRST AMENDMENT dated as of September 23 , 1996 (this "Amendment") to
CREDIT AGREEMENT dated as of September 6, 1995 (as amended or otherwise
modified to the date hereof, the "Credit Agreement") among CSC ENTERPRISES, a
Delaware general partnership, COMPUTER SCIENCES CORPORATION, a Delaware
corporation, the financial institutions party thereto (the "Lenders") and
CITICORP USA, INC. as Agent for the Lenders (the "Agent").
PRELIMINARY STATEMENTS. The parties hereto wish to modify the Credit
Agreement in certain respects as hereinafter set forth. Terms defined in the
Credit Agreement are used in this Amendment as defined in the Credit Agreement
and, except as otherwise indicated, all references to Sections refer to the
corresponding Sections of the Credit Agreement.
The parties hereto therefore agree as follows:
SECTION 1. Amendments to Credit Agreement.
------------------------------
Effective as of the Amendment Effective Date (as defined in Section 2
hereof) and subject to the satisfaction of the condition precedent set forth
in Section 2 hereof, the Credit Agreement is hereby amended as follows:
a. The definition of "Daily Margin" in Section 1.01 is deleted and
------------
restated in its entirety as follows:
"Daily Margin" means, for any date of determination, the interest rate
------------
per annum set forth in the table below that corresponds to (i) the Level
applicable to such date of determination and (ii) the Utilization Ratio
applicable to such date of determination:
<TABLE>
<CAPTION>
Daily Margin when Daily Margin when
Utilization Ratio Utilization Ratio
is less than is greater than or
0.50:1.00 equal to 0.50:1.00
----------------- ------------------
<S> <C> <C>
Level 1 0.12% 0.17%
Level 2 0.13% 0.18%
Level 3 0.17% 0.22%
Level 4 0.20% 0.25%
Level 5 0.25% 0.30%
</TABLE>
For purposes of this definition, (a) "Utilization Ratio" means, as of any
-----------------
date of determination, the ratio of (1) the aggregate outstanding principal
amount of all Advances as of such date to (2) the aggregate amount of all
Commitments in effect as of such date (whether used or unused and without
giving effect to any B Reduction), (b) if any change in the Rating established
by S&P or Moody's shall result in a change in the Level, the change in the
Daily Margin shall be effective as of the date on which such rating change is
publicly announced (in the case of a public rating) or is disclosed to the
Corporation (in the case of a private rating), (c) if Ratings are unavailable
from both S&P and Moody's for any reason for any day, then the applicable
Level for such day shall be deemed to be Level 5 (or, if the Majority Lenders
consent in writing, such other Level as may be reasonably determined by the
Majority Lenders from a rating with respect to Long-Term Debt or the
Corporation for such day established by another rating agency reasonably
acceptable to the Majority Lenders) and (d) if a Rating is not available from
S&P or Moody's
<PAGE>
(but not both) for any reason for any day, then the applicable Level shall be
set by reference to the Rating of S&P or Moody's that is available for such
day.
b. Section 2.04 is deleted and restated in its entirety as follows:
SECTION 2.04. Facility Fees.
-------------
The Borrowers jointly and severally agree to pay to the Agent for the
account of each Lender a facility fee on the amount of such Lender's
Commitment (or if no Commitment is in effect, Advances), whether used or
unused and without giving effect to any CP Reduction or B Reduction, from the
date hereof in the case of each Lender and from the effective date specified
in the Assignment and Acceptance pursuant to which it became a Lender in the
case of each other Lender until the Termination Date of such Lender, payable
in arrears on the last day of each March, June, September and December during
the term of such Lender's Commitment, commencing September 30, 1995, and on
the Termination Date of such Lender, in an amount equal to the product of (i)
the average daily amount of such Lender's Commitment (whether used or unused
and without giving effect to any B Reduction or CP Reduction) in effect during
the period for which such payment that is to be made times (ii) the weighted
average rate per annum that is derived from the following rates: (a) a rate of
0.07% per annum with respect to each day during such period that the higher of
the Ratings was Level 1, (b) a rate of 0.09% per annum with respect to each
day during such period that the higher of such Ratings was Level 2, (c) a rate
of 0.10% per annum with respect to each day during such period that the higher
of such Ratings was Level 3, (d) a rate of 0.125% per annum with respect to
each day during such period that the higher of such Ratings was Level 4 and
(e) a rate of 0.15% per annum with respect to each day during such period to
which Level 5 applies. If any change in the Rating shall result in a change
in the Level, the change in the facility fee shall be effective as of the date
on which such rating change is publicly announced (in the case of a public
rating) or is disclosed to the Corporation (in the case of a private rating).
If Ratings are unavailable from both S&P or Moody's for any reason for any
day, then the applicable Level for purposes of calculating the facility fee
for such day shall be deemed to be Level 5 (or, if the Majority Lenders
consent in writing, such other Level as may be reasonably determined by the
Majority Lenders from a rating with respect to Long-Term Debt or the
Corporation for such day established by another rating agency reasonably
acceptable to the Majority Lenders). If no Rating is available from S&P or
Moody's (but not both) for any reason for any day, then the applicable Level
shall be set by reference to the Rating of S&P or Moody's that is available
for such day.
SECTION 2. Condition to Effectiveness.
--------------------------
This Amendment shall be effective as of the date hereof (the "Amendment
Effective Date"), subject to the satisfaction of the condition precedent that
the Agent shall have received counterparts of this Amendment executed by the
Borrowers and each Lender or, as to any Lender, advice satisfactory to the
Agent that such Lender has executed a counterpart of this Amendment.
SECTION 3. Representations and Warranties.
------------------------------
Each Borrower represents and warrants as follows: (a) the execution, delivery
by such Borrower of this Amendment, and the performance by such Borrower of
the Credit Agreement as hereby amended, are within such Borrower's corporate
or partnership powers (as the case may be), have been duly authorized by all
necessary corporate or partnership action (as the case may be) and do not
contravene such Borrower's charter, by-laws or partnership agreement (as the
case may be), any law, regulation or order binding on or affecting such
Borrower or the terms of any indenture, loan or credit agreement or other
agreement or instrument by which such Borrower is bound or to which such
Borrower is a party; (b) no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution or delivery by such Borrower of this Amendment
or the performance by such Borrower of the Credit Agreement as hereby amended;
(d) each of this Amendment and the Credit Agreement as amended hereby
constitutes the legal, valid and binding obligations of such Borrower
enforceable against such Borrower in accordance with its respective terms; (e)
all representations and warranties of such Borrower contained in Article IV of
the Credit Agreement are true and correct, as if repeated and restated in full
herein; and (f) no Event of Default or Potential Event of Default has occurred
and is continuing, or will occur and be continuing after giving effect to this
Amendment.
<PAGE>
SECTION 4. Reference to and Effect on the Credit Agreement.
-----------------------------------------------
On and after the Amendment Effective Date, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Credit Agreement as amended
by this Amendment. Except as specifically amended or waived herein, the
Credit Agreement shall continue to be in full force and effect and is hereby
in all respects ratified and confirmed.
SECTION 5. Execution in Counterparts.
-------------------------
This Amendment may be executed in any number of counterparts and by any
combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same Amendment.
SECTION 6. Governing Law.
-------------
This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
COMPUTER SCIENCES CORPORATION, a Nevada
corporation, as Borrower and as Guarantor
By /s/ Authorized Signatory
-------------------------------
CSC ENTERPRISES, a Delaware general
partnership, as Borrower
By CSC ENTERPRISES, INC.,
its Managing Partner
By /s/ Authorized Signatory
-------------------------------
CITICORP USA, INC.
By /s/ Authorized Signatory
-------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Authorized Signatory
-------------------------------
THE CHASE MANHATTAN BANK, N.A.
By /s/ Authorized Signatory
-------------------------------
<PAGE>
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Authorized Signatory
-------------------------------
BANK BRUSSELS LAMBERT
New York Branch
By /s/ Authorized Signatory
-------------------------------
By /s/ Authorized Signatory
-------------------------------
THE BANK OF NEW YORK
By /s/ Authorized Signatory
-------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Authorized Signatory
-------------------------------
MELLON BANK, N.A.
By /s/ Authorized Signatory
-------------------------------
NATIONAL WESTMINSTER BANK PLC
Los Angeles Overseas Branch
By /s/ Authorized Signatory
-------------------------------
NATIONSBANK OF TEXAS, N.A.
By /s/ Authorized Signatory
-------------------------------
<PAGE>
ABN AMRO BANK N.V.
Los Angeles International Branch
By /s/ Authorized Signatory
-------------------------------
By /s/ Authorized Signatory
-------------------------------
THE BANK OF NOVA SCOTIA
By /s/ Authorized Signatory
-------------------------------
CORESTATES BANK, N.A.
By /s/ Authorized Signatory
-------------------------------
WELLS FARGO BANK
By /s/ Authorized Signatory
-------------------------------
SOCIETE GENERALE
By /s/ Authorized Signatory
-------------------------------
DEUTSCHE BANK
By /s/ Authorized Signatory
-------------------------------
<TABLE>
EXHIBIT 11
COMPUTER SCIENCES CORPORATION
CALCULATION OF EARNINGS PER SHARE
(In thousands except per-share amounts)
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------- ----------------------
Sept. 27, Sept. 29, Sept. 27, Sept. 29
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $14,006 $39,569 $59,283 $75,510
========== ========== ========== ==========
Shares:
Weighted average shares
outstanding 75,748 74,321 75,511 74,176
Common stock
equivalents 2,274 2,537 2,413 2,424
---------- ---------- ---------- ----------
Total for primary and
fully diluted 78,022 76,858 77,924 76,600
========== ========== ========== ==========
Earnings Per Share:
Primary and fully
diluted* $ 0.18 $ 0.51 $ 0.76 $ 0.99
========== ========== ========== ==========
</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> Sep-28-1996
<PERIOD-TYPE> 6-MOS
<CASH> 41,854
<SECURITIES> 0
<RECEIVABLES> 1,329,369
<ALLOWANCES> 25,081
<INVENTORY> 0
<CURRENT-ASSETS> 1,556,222
<PP&E> 1,508,178
<DEPRECIATION> 673,436
<TOTAL-ASSETS> 3,370,214
<CURRENT-LIABILITIES> 1,093,498
<BONDS> 613,563
<COMMON> 76,274
0
0
<OTHER-SE> 1,431,709
<TOTAL-LIABILITY-AND-EQUITY> 3,370,214
<SALES> 0
<TOTAL-REVENUES> 2,659,147
<CGS> 0
<TOTAL-COSTS> 2,098,556
<OTHER-EXPENSES> 152,509
<LOSS-PROVISION> 12,154
<INTEREST-EXPENSE> 15,457
<INCOME-PRETAX> 98,783
<INCOME-TAX> 39,500
<INCOME-CONTINUING> 59,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,283
<EPS-PRIMARY> 0.76
<EPS-DILUTED> 0.76
</TABLE>
<TABLE>
EXHIBIT 28
COMPUTER SCIENCES CORPORATION
REVENUES BY MARKET SECTOR
(In millions)
<CAPTION>
Fiscal Period Ended % of Total
---------------------- ----------------------
Sept. 27, Sept. 29, Sept. 27, Sept. 29,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SECOND QUARTER
Global commercial:
U.S. commercial $ 524.1 $ 434.4 39% 38%
International 439.0 321.3 32 28
--------- --------- --------- ---------
Total 963.1 755.7 71 66
U.S. federal government:
Department of Defense 253.4 223.9 19 20
NASA 75.1 77.5 5 7
Civil agencies 63.7 71.5 5 7
--------- --------- --------- ---------
Total 392.2 372.9 29 34
--------- --------- --------- ---------
Total revenues $1,355.3 $1,128.6 100% 100%
========= ========= ========= =========
SIX MONTHS
Global commercial:
U.S. commercial $ 999.5 $ 843.0 37% 38%
International 821.8 613.0 31 28
--------- --------- --------- ---------
Total 1,821.3 1,456.0 68 66
U.S. federal government:
Department of Defense 550.4 448.5 21 20
NASA 150.6 156.5 6 7
Civil agencies 136.8 150.6 5 7
--------- --------- --------- ---------
Total 837.8 755.6 32 34
--------- --------- --------- ---------
$2,659.1 $2,211.6 100% 100%
Total revenues ========= ========= ========= =========
</TABLE>
</PAGE>
