<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 27, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission File No. 1-4850
COMPUTER SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 95-2043126
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2100 East Grand Avenue
El Segundo, California 90245
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (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 [ ]
76,491,064 shares of Common Stock, $1.00 par value, were outstanding on
December 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,
Third Quarter and Nine Months Ended
December 27, 1996 and December 29, 1995.......................... 3
Consolidated Condensed Balance Sheets,
December 27, 1996 and March 29, 1996............................. 4
Consolidated Condensed Statements of Cash Flows
Nine Months Ended December 27, 1996 and December 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............................... 11
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> Third Quarter Ended Nine Months
Ended
------------------------ ------------------------
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
1996 1995 1996 1995
- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $1,421,638 $1,236,674 $4,080,785 $3,448,285
----------- ----------- ----------- -----------
Costs of services 1,112,815 956,840 3,223,525 2,688,257
Selling, general and
administrative 122,593 129,817 355,352 351,007
Depreciation and
amortization 89,229 69,296 241,738 193,031
Interest expense 11,937 9,957 30,959 28,592
Interest income (2,626) (1,341) (6,191) (4,229)
Non-recurring charges
(note A) 26,000 48,929 26,000
----------- ----------- ----------- -----------
Total costs and
expenses 1,333,948 1,190,569 3,894,312 3,282,658
----------- ----------- ----------- -----------
Income before taxes 87,690 46,105 186,473 165,627
Taxes on income 30,300 26,384 69,800 70,396
----------- ----------- ----------- -----------
Net income $ 57,390 $ 19,721 $ 116,673 $ 95,231
=========== =========== =========== ===========
Earnings per common
share (note B) $ 0.73 $ 0.25 $ 1.49 $ 1.24
=========== =========== =========== ===========
</TABLE>
[FN]
See accompanying notes.
3
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
Dec. 27, Mar. 29,
(In thousands) 1996 1996
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 91,873 $ 113,873
Receivables 1,356,138 1,106,857
Prepaid expenses and other current assets 177,739 134,033
------------- -------------
Total current assets 1,625,750 1,354,763
------------- -------------
EXCESS OF COST OF BUSINESSES ACQUIRED
OVER RELATED NET ASSETS, NET 530,531 457,912
OTHER ASSETS 472,625 442,889
PROPERTY AND EQUIPMENT, at cost 1,614,072 1,249,729
Less accumulated depreciation and amortization 739,348 569,670
------------- -------------
Property and equipment, net 874,724 680,059
------------- -------------
Total assets $3,503,630 $2,935,623
============= =============
CURRENT LIABILITIES:
Short-term debt and current
maturities of long-term debt $ 67,445 $ 78,339
Accounts payable 219,335 186,460
Accrued payroll and related costs 255,788 222,620
Other accrued expenses 350,121 262,961
Deferred revenue 134,225 111,075
Income taxes payable 62,408 67,677
------------- -------------
Total current liabilities 1,089,322 929,132
------------- -------------
LONG-TERM DEBT, NET 637,444 426,634
------------- -------------
OTHER LONG-TERM LIABILITIES 166,981 164,597
------------- -------------
STOCKHOLDERS' EQUITY (note C):
Common stock issued, par value $1.00 per share 76,823 75,429
Other stockholders' equity 1,533,060 1,339,831
------------- -------------
Total stockholders' equity 1,609,883 1,415,260
------------- -------------
Total liabilities and stockholders' equity $3,503,630 $2,935,623
============= =============
</TABLE>
[FN]
See accompanying notes.
4
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
Nine Months Ended
-----------------------
(In thousands, increase (decrease) in Dec. 27, Dec. 29,
cash and cash equivalents) 1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 116,673 $ 95,231
Adjustments to reconcile net income to net
cash provided by operating activities:
Non-recurring charges, net of tax 13,574 26,000
Depreciation and amortization 241,738 194,159
Provision for losses on accounts receivable 13,281 15,059
Changes in assets and liabilities, net of
effects of acquisitions:
Increase in assets (232,419) (219,598)
Increase in liabilities 94,810 15,288
---------- ----------
Net cash provided by operating activities 247,657 126,139
---------- ----------
Investing activities:
Purchases of property, plant and equipment (238,872) (181,558)
Acquisitions, net of cash acquired (127,799) (65,987)
Outsourcing contracts (50,871) (98,514)
Purchased and internally developed software (63,880) (30,149)
Other investing cash flows (4,383) 1,026
---------- ----------
Net cash used in investing activities (485,805) (375,182)
---------- ----------
Financing activities:
Borrowing under commercial paper, net 54,094 (723)
(Repayment of) borrowing under lines of credit, net (18,175) 105,506
Principal payments on long-term debt (26,941) (17,360)
Proceeds from term debt issuance 150,000
Proceeds from stock option transactions 43,420 14,609
Other financing cash flows 13,750 5,511
---------- ----------
Net cash provided by financing activities 216,148 107,543
---------- ----------
Net decrease in cash and cash equivalents (22,000) (141,500)
Cash and cash equivalents at beginning of year 113,873 207,599
---------- ----------
Cash and cash equivalents at end of period $ 91,873 $ 66,099
========== ==========
</TABLE>
[FN]
See accompanying notes.
5
<PAGE>
COMPUTER SCIENCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
(A) The fiscal 1997 non-recurring charge of $48,929,000 represents costs and
expenses related to the August 1 acquisition of The Continuum Company,
Inc. ("Continuum"). 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 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. At December 27,
1996, $17,724,000 of the $24,793,000 amount is reflected in accrued
expenses.
The fiscal 1996 charge of $26,000,000 relates to Continuum's December
1995 acquisition of SOCS Holding ("SOCS"), a Paris-based software and
services company. The acquisition was accounted for using the purchase
method of accounting. $26,000,000 of the purchase price was assigned to
purchased research and development and was expensed with no income tax
benefit.
(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 78,114,000 and 76,819,000 respectively, for the
nine months ended December 27, 1996, and December 29, 1995 (see Part II,
Exhibit 11).
(C) No dividends were paid during the periods presented. There were
76,823,116 shares at December 27, 1996 and 75,428,622 shares at March
29, 1996 of $1.00 par value common stock issued with 332,052 and
311,928 shares, respectively, of treasury stock.
(D) Cash payments for interest on indebtedness were $30,005,000 and
$30,966,000 respectively, for the nine months ended December 27, 1996 and
December 29, 1995. Cash payments for taxes on income were $42,454,000
and $43,392,000 respectively, for the nine months ended December 27,
1996, and December 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 and prior period financial
statements have been restated to reflect the August 1, 1996 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
Third Quarter and Nine Months of Fiscal 1997 versus
Third Quarter and Nine Months of Fiscal 1996
Revenues
The Company derived its revenues from the following market sectors for the
third quarter and nine months, respectively (dollars in millions):
<TABLE>
<CAPTION>
Third Quarter Nine Months
-------------- Pct. ---------------- Pct.
FY97 FY96 Growth FY97 FY96 Growth
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Commercial $ 540 $ 458 17.8% $1,539 $1,301 18.3%
International 490 366 34.0 1,312 979 34.0
------ ------ ------ ------ ------ ------
Total Commercial 1,030 824 25.0 2,851 2,280 25.0
U.S. Federal Government 392 413 (5.1) 1,230 1,168 5.2
------ ------ ------ ------ ------ ------
Total $1,422 $1,237 15.0% $4,081 $3,448 18.3%
====== ====== ====== ====== ====== ======
</TABLE>
During the quarter and nine months ended December 27, 1996, the Company's
total revenue increased 15.0%, or $185 million, and 18.3%, or $633 million,
respectively, over the same periods last year. Commercial revenue growth
continued to surpass U.S. Federal Government growth, increasing 25.0%, or $206
million and 25.0%, or $571 million, over the same quarter and nine months of
last year.
Over one-half of the third 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 new business within CSC Continuum's international
operations .
U.S. commercial revenues grew 17.8% or $82 million during the third quarter of
fiscal 1997. Slightly less than half the growth was provided by information
technology outsourcing contracts, including the Pinnacle Alliance with J.P.
Morgan. The remainder is derived principally from continued demand for
consulting and systems integration services, the acquisition of American
Practice Management and growth at CSC Continuum.
U.S. federal government revenue for the quarter decreased 5.1% or $21 million,
principally due to the completion of existing contracts and the timing and
volume of task order contracts.
During the third quarter of fiscal 1997, the Company announced $435 million in
new federal contracts and $5.5 billion in new commercial business, including
an estimated $3.2 billion in projected revenues from agreements signed with
DuPont.
7
<PAGE>
For the first nine months, revenue growth for all market sectors reflects the
same overall trends as those described for the third 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, Third Quarter Nine Months
as a percentage of total FY97 FY96 FY97 FY96
- ---------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
U.S. Commercial 38% 37% 38% 38%
International 34 30 32 28
------ ------ ------ ------
Total Commercial 72 67 70 66
U.S. Federal Government 28 33 30 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
-------------- -------------------------------
Third Quarter Third Quarter Nine Months
-------------- --------------- --------------
FY97 FY96 FY97 FY96 FY97 FY96
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Costs of services $1,113 $ 957 78.3% 77.4% 79.0% 78.0%
Selling, general & admin. 123 130 8.6 10.5 8.7 10.2
Depreciation and amort. 89 69 6.3 5.6 5.9 5.6
Interest expense, net 9 9 0.6 0.7 0.6 0.7
------ ------ ------ ------ ------ ------
Total $1,334 $1,165 93.8% 94.2% 94.2% 94.5%
====== ====== ====== ====== ====== ======
</TABLE>
Compared with the third quarter of fiscal 1996, total costs and expenses
improved as a percentage of revenue for the third quarter and the nine months
ended December 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. Costs of services
also increased as a percentage of revenues in the Company's domestic
consulting operations, principally at its telecommunications business unit.
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 nine months ended last
year. The European improvement contributed to the overall reduction in the
selling, general and administrative percentage from 10.5% during last year's
third quarter to 8.6% for the current year's third quarter.
8
<PAGE>
Non-Recurring Charges
The fiscal 1997 non-recurring charge represents costs and expenses related to
the August 1 acquisition of Continuum. 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 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.
The fiscal 1996 charge of $26,000,000 relates to Continuum's December 1995
acquisition of SOCS, a Paris-based software and services company. The
acquisition was accounted for using the purchase method of accounting.
$26,000,000 of the purchase price was assigned to purchased research and
development and was expensed.
Income Before Taxes
Reflecting the Company's revenue growth, income before taxes increased to
$87.7 million, up $15.6 million, or 21.6%, compared with the same quarter last
year, before last year's charge for purchased research and development. The
Company's profit margin before non-recurring charges improved from 5.8% to
6.2% for the third quarter and from 5.6% to 5.8% for the nine months ended
December 27, 1996.
Net Income
Earnings before the non-recurring charges were $57.4 million for the third
quarter of fiscal 1997, up $11.7 million, or 25.5%, over the same quarter last
year. The effective tax rate was 34.6%, versus 36.6%, before last year's non-
recurring charge. The lower current tax rate is primarily due to tax
synergies achieved through the Company's August 1, 1996 merger with Continuum
and to the reinstatement of the research and engineering tax credit in the
U.S. This year's third quarter earnings per share of 73 cents increased 23.7%
over the 59 cents for last year's third quarter before the write-off of
purchased research and development. On a year to date basis, earnings per
share before the non-recurring charges was $1.94, up 36 cents, or 22.8% over
the comparable result for the same period last year.
Cash Flows
Cash provided by operating activities was $247.7 million for the nine months,
compared with $126.1 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,
principally accounts payable, accrued income taxes and other current
liabilities.
9
<PAGE>
The Company's cash expenditures for investing activities totaled $485.8
million for the most recent nine months versus $375.2 million during the same
period of last year. The increase principally relates to the acquisitions of
Datacentralen and American Practice Management, higher investments in
computers and related equipment and higher levels of purchased and internally
developed software.
Cash provided by financing activities was $216.1 million for the most recent
nine months versus $107.5 million for the same period last year. Current year
financing activities include a November 1996 offering of $150 million of five-
year 6.5% guaranteed notes. The proceeds were used to pay down a portion of
the Company's outstanding commercial paper.
Financial Condition
During the first nine months of fiscal 1997, the Company's capital outlays
included $417.5 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 $91.9 million. As a result of the net increase in borrowings, the
Company's debt-to-total capitalization ratio increased to 30.5% at December
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, cash balances, unused borrowing capacity and
other financing activities, including the issuance of debt and/or equity
securities.
10
<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 February 3, 1997
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 Schedule to the 1992 Stock Incentive Plan for United
Kingdom personnel*
10.10 1995 Stock Incentive Plan* (j)
10.11 Deferred Compensation Plan, amended and restated effective
November 4, 1996* (p)
10.12 Supplemental Executive Retirement Plan, amended and
restated effective November 4, 1996* (p)
10.13 1990 Nonemployee Director Retirement Plan, amended and
restated effective December 6, 1996*
10.14 Form of Indemnification Agreement for Directors (d)
10.15 Form of Indemnification Agreement for Officers (e)
10.16 Information Technology Services Agreements with General
Dynamics Corporation, dated as of November 4, 1991 (h)
10.17 $350 million Credit Agreement dated as of September 6, 1995 (j)
10.18 First Amendment to $350 Million Credit Agreement dated
September 23, 1996 (p)
10.19 Amended and Restated Rights Agreement, effective
August 1, 1996 (o)
11
<PAGE>
11 Calculation of Primary and Fully Diluted Earnings Per Share
27 Article 5 Financial Data Schedule
28 Revenues by Market Sector
99.1 Annual Report on Form 11-K for the Matched Asset Plan of
the Registrant (f)
99.2 Annual Report on Form 11-K for the Hourly Savings Plan of
CSC Outsourcing Inc. (f)
99.3 Annual Report on Form 11-K for the Employee Savings Plan of
CSC Credit Services, Inc. (to be filed at a later date)
99.4 Annual Report on Form 11-K for the CUTW Hourly Savings Plan
of CSC Outsourcing, Inc. (k)
</TABLE>
12
<PAGE>
Notes to Exhibit Index:
*Management contract or compensatory plan or agreement
(a)-(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
(p) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on November 12, 1996.
b. Reports on Form 8-K:
There were three reports on Form 8-K filed during the third quarter of fiscal
1997. On October 29, 1996, the Registrant filed a Current Report on Form 8-K
dated such date to which was attached a press release reporting its results of
operations for the fiscal quarter ended September 27, 1996. On October 31,
1996, the Registrant filed a Current Report on Form 8-K dated such date
restating certain previously reported financial statements and information as
a consequence of its acquisition of The Continuum Company, Inc. on August 1,
1996, which was accounted for as a pooling of interests. On November 13,
1996, the Registrant filed a Current Report on Form 8-K dated such date
reporting that its affiliate, CSC Enterprises, had completed a Rule 144A
offering of $150,000,000 of its 6.50% Guaranteed Notes due November 15, 2001.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPUTER SCIENCES CORPORATION
Date: February 10, 1997 By: /s/ Denis M. Crane
-----------------------------
Denis M. Crane
Vice President and Controller
Chief Accounting Officer
14
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C>
3.5 Bylaws, amended and restated effective February 3, 1997
10.9 Schedule to the 1992 Stock Incentive Plan for United Kingdom
personnel
10.13 1990 Nonemployee Director Retirement Plan, amended and restated
effective December 6, 1996
11 Calculation of Primary and Fully Diluted Earnings Per Share
27 Article 5 Financial Data Schedule
28 Revenues by Market Sector
</TABLE>
15
EXHIBIT 3.5
BYLAWS
OF
COMPUTER SCIENCES CORPORATION
As amended February 3, 1997
<PAGE>
BYLAWS
OF
COMPUTER SCIENCES CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office.
----------------
The principal office of the corporation in the State of Nevada shall be in the
City of Reno, County of Washoe.
Section 2. Other Offices.
-------------
The corporation may also have offices in such other places, both within and
without the State of Nevada, as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Annual Meetings.
------------------------
Annual meetings of the stockholders shall be held at the office of the
corporation in the City of El Segundo, State of California or at such other
place, within or without the State of California, as shall be designated by
the Board of Directors.
Section 2. Date of Annual Meetings; Election of Directors.
----------------------------------------------
Annual meetings of the stockholders shall be held on the second Monday in
August, if not a legal holiday, and if a legal holiday, then on the next
secular day following at 2:00 p.m., or at such other time and date as the
Board of Directors shall determine. At such annual meeting, the stockholders
of the corporation shall elect a Board of Directors and transact such other
business as may properly be brought before the meeting.
Section 3. Special Meetings.
----------------
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute or by the Articles of Incorporation, may be
called by the Chairman of the Board, the Board of Directors, or by the
president and shall be called by the president or secretary at the request in
writing of a majority of the Board of Directors or at the request in writing
of stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purposes of the proposed meeting and shall be directed to the
Chairman of the Board, the president, the vice president, or the secretary by
anyone entitled to call a special meeting of stockholders.
Section 4. Notices of Meetings.
-------------------
Notices of meetings of the stockholders shall be in writing and signed by the
president, a vice president, the
<PAGE>
secretary, an assistant secretary, or by such other person or persons as the
directors shall designate. Such notice shall state the purpose or purposes
for which the meeting is called and the time when, and the place where, it is
to be held. A copy of such notice shall be either delivered personally or
shall be mailed, postage prepaid, to each stockholder of record entitled to
vote at such meeting not less than ten (10) nor more than sixty (60) days
before such meeting. If mailed, it shall be directed to the stockholder at
his address as it appears upon the records of the corporation and upon such
mailing of any such notice, the service thereof shall be complete, and the
time of the notice shall begin to run from the date upon which such notice is
deposited in the mail for transmission to such stockholder. If no such
address appears on the books of the corporation and a stockholder has given no
address for the purpose of notice, then notice shall be deemed to have been
given to such stockholder if it is published at least once in a newspaper of
general circulation in the county in which the principal executive office of
the corporation is located. An affidavit of the mailing or publication of any
such notice shall be prima facie evidence of the giving of such notice.
Personal delivery of any such notice to any officer of a corporation or
association, or to any member of a partnership shall constitute delivery of
such notice to such corporation, association or partnership. If any notice
addressed to the stockholder at the address of such stockholder appearing on
the books of the corporation is returned to the corporation by the United
States Postal Service marked to indicate that it is unable to deliver the
notice to the stockholder at such address, all future notices shall be deemed
to have been duly given to such stockholder, without further mailing, if the
same shall be available for the stockholder upon written demand of the
stockholder at the principal executive office of the corporation for a period
of one year from the date of the giving of the notice to all other
stockholders.
Section 5. Quorum.
------
The holders of a majority of the stock issued and outstanding and entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business,
except as otherwise provided by the statutes of Nevada or by the Articles of
Incorporation. Regardless of whether or not a quorum is present or
represented at any annual or special meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
in person or represented by proxy, provided that when any stockholders'
meeting is adjourned for more than forty-five (45) days, or if after
adjournment a new record date is fixed for the adjourned meeting, notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. At such adjourned meeting at which a quorum shall be
present or represented by proxy, any business may be transacted which might
have been transacted at the meeting as originally noticed.
2
<PAGE>
Section 6. Vote Required.
-------------
When a quorum is present or represented at any meeting, the holders of a
majority of the stock present in person or represented by proxy and voting
shall decide any question brought before such meeting, unless the question is
one upon which, by express provision of the statutes of Nevada or of the
Articles of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
Section 7. Cumulative Voting.
-----------------
Except as otherwise provided in the Articles of Incorporation, every
stockholder of record of the corporation shall be entitled at each meeting of
the stockholders to one vote for each share of stock standing in his name on
the books of the corporation. At all elections of directors of this
corporation, each holder of shares of capital stock possessing voting power
shall be entitled to as many votes as shall equal the number of his shares of
stock multiplied by the number of directors to be elected, and he may cast all
of such votes for a single director or may distribute them among the number to
be voted for or any two or more of them, as he may see fit. The stockholders
of this corporation and any proxyholders for such stockholders are entitled to
exercise the right to cumulative voting at any meeting held for the election
of directors if: (a) not less than forty-eight (48) hours before the time
fixed for holding such meeting, if notice of the meeting has been given at
least ten (10) days prior to the date of the meeting, and otherwise not less
than twenty-four (24) hours before such time, a stockholder of this
corporation has given notice in writing to the president or secretary of the
corporation that he desires that the voting at such election of directors
shall be cumulative; and (b) at such meeting, prior to the commencement of
voting for the election of directors, an announcement of the giving of such
notice has been made by the chairman or the secretary of the meeting or by or
on behalf of the stockholder giving such notice. Notice to stockholders of
the requirements of the preceding sentence shall be contained in the notice
calling such meeting or in the proxy material accompanying such notice.
Section 8. Conduct of Meetings.
-------------------
Subject to the requirements of the statutes of Nevada, and the express
provisions of the Articles of Incorporation and these Bylaws, all annual and
special meetings of stockholders shall be conducted in accordance with such
rules and procedures as the Board of Directors may determine and, as to
matters not governed by such rules and procedures, as the chairman of such
meeting shall determine. The chairman of any annual or special meeting of
stockholders shall be designated by the Board of Directors and, in the absence
of any such designation, shall be the president of the corporation.
Section 9. Proxies.
-------
At any meeting of the stockholders, any stockholder may be represented and
vote by a proxy or proxies appointed by an instrument in writing. In the
event that such instrument in writing shall designate
3
<PAGE>
two or more persons to act as proxies, a majority of such persons present at
the meeting, or, if only one shall be present, then that one shall have and
may exercise all of the powers conferred by such written instrument upon all
of the persons so designated unless the instrument shall otherwise provide.
No such proxy shall be valid after the expiration of six (6) months from the
date of its execution, unless coupled with an interest, or unless the person
executing it specifies therein the length of time for which it is to continue
in force, which in no case shall exceed seven (7) years from the date of its
execution. Subject to the above, any proxy duly executed is not revoked and
continues in full force and effect until (i) an instrument revoking it or duly
executed proxy bearing a later date is filed with the secretary of the
corporation or, (ii) the person executing the proxy attends such meeting and
votes the shares subject to the proxy, or (iii) written notice of the death or
incapacity of the maker of such proxy is received by the corporation before
the vote pursuant thereto is counted.
Section 10. Action by Written Consent.
-------------------------
Any action, except election of directors, which may be taken by a vote of the
stockholders at a meeting, may be taken without a meeting and without notice
if authorized by the written consent of stockholders holding at least three-
fourths of the voting power.
Section 11. Inspectors of Election.
----------------------
In advance of any meeting of stockholders, the Board of Directors may appoint
inspectors of election to act at such meeting and any adjournment thereof. If
inspectors of election are not so appointed, or if any persons so appointed
fail to appear or refuse to act, then, unless other persons are appointed by
the Board of Directors prior to the meeting, the chairman of any such meeting
may, and on the request of any stockholder or a stockholder proxy shall,
appoint inspectors of election (or persons to replace those who fail to appear
or refuse to act) at the meeting. The number of inspectors shall not exceed
three.
The duties of such inspectors shall include: (a) determining the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, and the authenticity, validity and effect
of proxies; (b) receiving votes, ballots or consents; (c) hearing and
determining all challenges and questions in any way arising in connection with
the right to vote; (d) counting and tabulating all votes or consents and
determining the result; and (e) taking such other action as may be proper to
conduct the election or vote with fairness to all stockholders. In the
determination of the validity and effect of proxies, the dates contained on
the forms of proxy shall presumptively determine the order of execution of the
proxies, regardless of the postmark dates on the envelopes in which they are
mailed. The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical.
If there are three inspectors of election, the decision, act or certificate of
a majority is effective in all respects as the decision, act or certificate of
all. Any report or certificate made by the inspectors of election is prima
facie evidence of the facts stated therein.
4
<PAGE>
ARTICLE III
DIRECTORS
Section 1. Number of Directors.
-------------------
The exact number of directors which shall constitute the whole Board shall be
ten (10), all of whom shall be at least 18 years of age. The authorized
number of directors may from time to time be increased to not more than
fifteen (15) or decreased to not less than three (3) by resolution of the
directors of the corporation amending this section of the Bylaws. The
directors shall be elected at the annual meeting of the stockholders, but if
for any reason the directors are not elected at the annual meeting of the
stockholders, they may be elected at any special meeting of the stockholders
which is called and held for that purpose. Except as provided in Section 2 of
this Article III, each director elected shall hold office until his successor
is elected and qualified. Directors need not be stockholders.
Section 2. Vacancies.
---------
Vacancies, including those caused by (i) the death, removal, or resignation of
directors, (ii) the failure of stockholders to elect directors at any annual
meeting, and (iii) an increase in the number of directors, may be filled by a
majority of the remaining directors though less than a quorum. When one or
more directors shall give notice of his or their resignation to the Board,
effective at a future date, the acceptance of such resignation shall not be
necessary to make it effective. The Board shall have power to fill such
vacancy or vacancies to take effect when such resignation or resignations
shall become effective, each director so appointed to hold office during the
remainder of the term of office of the resigning director or directors. The
Board of Directors may remove any director for cause. Any director may be
removed from office by the vote or written consent of stockholders of the
corporation representing not less than two-thirds (2/3) of its issued and
outstanding capital stock entitled to voting power. The provisions in the
preceding sentence notwithstanding, no director of this corporation shall be
removed from office under the provisions of this section except upon the vote
or written consent of stockholders owning sufficient shares to have prevented
his election to office in the first instance.
Section 3. Authority.
---------
The business of the corporation shall be managed and all corporate powers
shall be exercised by or under the direction of the Board of Directors.
Section 4. Meetings.
--------
The Board of Directors of the corporation may hold meetings, both regular and
special, at such place, either within or without the State of Nevada, which
has been designated by resolution of the Board of Directors. In the absence
of such designation, meetings shall be held at the office of the corporation
in the City of El Segundo, State of California.
Section 5. First Meeting.
-------------
The first meeting of the newly elected Board of Directors shall be held
immediately following the annual meeting of the stockholders and no notice of
such meeting to the newly elected directors shall be
5
<PAGE>
necessary in order legally to constitute a meeting, provided a quorum shall be
present.
Section 6. Regular Meetings.
----------------
Regular meetings of the Board of Directors may be held without notice at such
time and place as shall from time to time be determined by the Board.
Section 7. Special Meetings.
----------------
Special meetings of the Board of Directors may be called by the Chairman of
the Board, or the president and shall be called by the president or secretary
at the written request of two directors. Notice of the time and place of
special meetings shall be given within 30 days to each director (a) personally
or by telephone or telegraph, in each case at least three (3) days prior to
the holding of the meeting, or (b) by mail, charges prepaid, addressed to him
at his address as it is shown upon the records of the corporation or, if it is
not so shown on such records and is not readily ascertainable, at the place at
which the meetings of the directors are regularly held, at least three (3)
days prior to the holding of the meeting. Notice by mail shall be deemed to
have been given at the time a written notice is deposited in the United States
mails, postage prepaid. Any other written notice shall be deemed to have been
given at the time it is personally delivered to the recipient or is delivered
to a common carrier for transmission, or actually transmitted by the person
giving the notice by electronic means, to the recipient. Oral notice shall be
deemed to have been given at the time it is communicated, in person or by
telephone or wireless, to the recipient or to a person at the office of the
recipient who the person giving the notice has reason to believe will promptly
communicate it to the recipient. Any notice, waiver of notice or consent to
holding a meeting shall state the time, date and place of the meeting but need
not specify the purpose of the meeting.
Section 8. Quorum.
------
Presence in person of a majority of the Board of Directors, at a meeting duly
assembled, shall be necessary to constitute a quorum for the transaction of
business and the act of a majority of the directors present and voting at any
meeting, at which a quorum is then present, shall be the act of the Board of
Directors, except as may be otherwise specifically provided by the statutes of
Nevada or by the Articles of Incorporation. A meeting at which a quorum is
initially present shall not continue to transact business in the absence of a
quorum.
Section 9. Action by Written Consent.
-------------------------
Unless otherwise restricted by the Articles of Incorporation or by these
Bylaws, any action required or permitted to be taken at any meeting of the
Board of Directors may be taken without a meeting if a written consent thereto
is signed by all members of the Board. Such written consent shall be filed
with the minutes of proceedings of the Board of Directors.
Section 10. Telephonic Meetings.
-------------------
Unless otherwise restricted by the Articles of Incorporation or these Bylaws,
members of the Board of Directors or of
6
<PAGE>
any committee designated by the Board of Directors may participate in a
meeting of the Board or committee by means of a conference telephone network
or a similar communications method by which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to the
preceding sentence constitutes presence in person at such meeting.
Section 11. Adjournment.
-----------
A majority of the directors present at any meeting, whether or not a quorum is
present, may adjourn any directors' meeting to another time, date and place.
If any meeting is adjourned for more than twenty-four (24) hours, notice of
any adjournment to another time, date and place shall be given, prior to the
time of the adjourned meeting, to the directors who were not present at the
time of adjournment. If any meeting is adjourned for less than twenty-four
(24) hours, notice of any adjournment shall be given to absent directors,
prior to the time of the adjourned meeting, unless the time, date and place is
fixed at the meeting adjourned.
Section 12. Committees.
----------
The Board of Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees of the Board of Directors. Such
committee or committees shall have such name or names, shall have such duties
and shall exercise such powers as may be determined from time to time by the
Board of Directors.
Section 13. Committee Minutes.
-----------------
The committees shall keep regular minutes of their proceedings and report the
same to the Board of Directors.
Section 14. Compensation of Directors.
-------------------------
The directors shall receive such compensation for their services as directors,
and such additional compensation for their services as members of any
committees of the Board of Directors, as may be authorized by the Board of
Directors.
Section 15. Mandatory Retirement of Directors.
---------------------------------
Notwithstanding anything to the contrary in these Bylaws, a director shall not
serve beyond, and shall automatically retire at, the close of the first
meeting of the Board of Directors held during the month in which such director
shall become age 70; provided, however, that any person who was a director on
December 6, 1996 and who was age 65 or older on such date may service until,
but shall automatically retire at, the close of the first meeting of the Board
of Directors held during the month in which such director shall become age 72.
If no meeting of the Board of Directors is held during such month, the
director shall automatically retire as of the last day of such month.
ARTICLE IV
OFFICERS
Section 1. Principal Officers.
------------------
The officers of the corporation shall be elected by the Board of Directors and
shall be a president, a secretary and a treasurer. A resident agent for the
corporation in the State of Nevada shall be designated by the Board of
Directors. Any person may hold two or more offices.
7
<PAGE>
Section 2. Other Officers.
--------------
The Board of Directors may also elect one or more vice presidents, assistant
secretaries and assistant treasurers, and such other officers and agents, as
it shall deem necessary.
Section 3. Qualification and Removal.
-------------------------
The officers of the corporation mentioned in Section 1 of this Article IV
shall hold office until their successors are elected and qualify. Any such
officer and any other officer elected by the Board of Directors may be removed
at any time by the affirmative vote of a majority of the Board of Directors.
Section 4. Resignation.
-----------
Any officer may resign at any time by giving written notice to the
corporation, without prejudice, however, to the rights, if any, of the
corporation under any contract to which such officer is a party. Any such
resignation shall take effect at the date of the receipt of such notice or at
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 5. Powers and Duties; Execution of Contracts.
-----------------------------------------
Officers of this corporation shall have such powers and duties as may be
determined by the Board of Directors. Unless otherwise specified by the Board
of Directors, the president shall be the chief executive officer of the
corporation. Contracts and other instruments in the normal course of business
may be executed on behalf of the corporation by the president or any vice
president of the corporation, or any other person authorized by resolution of
the Board of Directors.
ARTICLE V
STOCK AND STOCKHOLDERS
Section 1. Issuance.
--------
Every stockholder shall be issued a certificate representing the number of
shares owned by him in the corporation. If the corporation shall be
authorized to issue more than one class of stock or more than one series of
any class, the certificate shall contain a statement setting forth the office
or agency of the corporation from which stockholders may obtain a copy of a
statement or summary of the designations, preferences and relative or other
special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights. The corporation
shall furnish to its stockholders, upon request and without charge, a copy of
such statement or summary.
Section 2. Facsimile Signatures.
--------------------
Whenever any certificate is countersigned or otherwise authenticated by a
transfer agent or transfer clerk, and by a registrar, then a facsimile of the
signatures of the officers of the corporation may be printed or lithographed
upon such certificate in lieu of the actual signatures. In case any officer
or officers who shall have signed, or whose facsimile signature or signatures
shall have been used on, any such certificate or certificates shall cease to
be such officer or officers of the corporation, before such certificates shall
8
<PAGE>
have been delivered by the corporation, such certificates may nevertheless be
issued as though the person or persons who signed such certificates, had not
ceased to be an officer of the corporation.
Section 3. Lost Certificates.
-----------------
The Board of Directors may direct a new stock certificate to be issued in
place of any certificate alleged to have been lost or destroyed, and may
require the making of an affidavit of that fact by the person claiming the
stock certificate to be lost or destroyed. When authorizing such issue of a
new certificate, the Board of Directors may, in its discretion and as a
condition precedent, require the owner of the lost or destroyed certificate to
give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
Section 4. Transfer of Stock.
-----------------
Upon surrender to the corporation or the transfer agent of the corporation of
a certificate for shares duly endorsed for transfer, it shall be the duty of
the corporation to issue a new certificate, cancel the old certificate and
record the transaction upon its books.
Section 5. Record Date.
-----------
The directors may fix a date not more than sixty (60) days prior to the
holding of any meeting as the date as of which stockholders entitled to notice
of and to vote at such meeting shall be determined; and only stockholders of
record on such day shall be entitled to notice or to vote at such meeting. If
no record date is fixed by the Board of Directors (a) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be the sixtieth (60th) day preceding the day on which the
meeting is held; (b) the record date for determining stockholders entitled to
give consent to corporate action in writing without a meeting, when no prior
action by the Board has been taken, shall be the day on which the first
written consent is given; and (c) the record date for determining stockholders
for any other purpose shall be the day on which the Board of Directors adopts
the resolution relating thereto, or the sixtieth (60th) day prior to the date
of such action, whichever is later. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting unless the Board of Directors fixes a new
record date for the adjourned meeting, but the Board of Directors shall fix a
new record date if the meeting is adjourned for more than forty-five (45) days
from the date set for the original meeting.
Section 6. Registered Stock.
----------------
The corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to
vote as such owner and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the statutes of Nevada.
9
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Section 7. Dividends.
---------
In the event a dividend is declared, the stock transfer books will not be
closed but a record date will be fixed by the Board of Directors and only
shareholders of record on that date shall be entitled to the dividend.
ARTICLE VI
INDEMNIFICATION
Section 1. Indemnity of Directors, Officers and Agents.
-------------------------------------------
The corporation shall indemnify any director or officer and may, as authorized
by the Board of Directors, indemnify any other employee or agent of the
corporation who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
Section 2. Derivative Actions.
------------------
The corporation shall indemnify any director or officer and may, as authorized
by the Board of Directors, indemnify any other employee or agent of the
corporation who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, but no indemnification shall be made in respect of any claim,
issue or matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action or suit
10
<PAGE>
was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper.
Section 3. Successful Defense.
------------------
To the extent that a director or officer and, as authorized by the Board of
Directors, any other employee or agent of the corporation has been successful
on the merits or otherwise in defense of any action or proceeding mentioned in
this Article VI or in defense of any claim issue or matter therein, he shall
be indemnified by the corporation against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with such defense.
Section 4. Determination of Entitlement to Indemnity.
-----------------------------------------
Any indemnification under this Article VI, unless ordered by a court, shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in this Article VI. Such determination shall be made (a) by
the stockholders; (b) by the Board of Directors by majority vote of a quorum
consisting of directors who were not parties to such act, suit or proceeding;
(c) if such a quorum of disinterested directors so orders, by independent
legal counsel in a written opinion; or (d) if such a quorum of disinterested
directors cannot be obtained, by independent legal counsel in a written
opinion.
Section 5. Advancement of Expenses.
-----------------------
Expenses incurred in defending a civil or criminal action, suit or proceeding
may be paid by the corporation in advance of the final disposition of such
action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the corporation as
authorized in this section.
Section 6. Persons Entitled to Indemnity.
-----------------------------
The indemnification provided by this Article VI: (a) does not exclude any
rights to which a person seeking indemnification may be entitled under any
statute of the State of Nevada, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office; and
(b) shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 7. Purchase of Insurance.
---------------------
The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted
11
<PAGE>
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Exercise of Rights.
------------------
All rights incident to any and all shares of another corporation or
corporations standing in the name of this corporation may be exercised by such
officer, agent or proxyholder as the Board of Directors may designate. In the
absence of such designation, such rights may be exercised by the Chairman of
the Board or the president of this corporation, or by any other person
authorized to do so by the Chairman of the Board or the president of this
corporation. Except as provided below, shares of this corporation owned by
any subsidiary of this corporation shall not be entitled to vote on any
matter. Shares of this corporation held by this corporation in a fiduciary
capacity and shares of this corporation held in a fiduciary capacity by any
subsidiary of this corporation, shall not be entitled to vote on any matter,
except to the extent that the settler or beneficial owner possesses and
exercises a right to vote or to give this corporation or such subsidiary
binding instructions as to how to vote such shares.
Solely for purposes of Section 1 of this Article VII, a "subsidiary" of this
corporation shall mean a corporation, shares of which possessing more than
fifty percent (50%) of the power to vote for the election of directors at the
time determination of such voting power is made, are owned directly, or
indirectly through one or more subsidiaries, by this corporation.
Section 2. Interpretation.
--------------
Unless the context of a Section of these Bylaws otherwise requires, the terms
used in these Bylaws shall have the meanings provided in, and these Bylaws
shall be construed in accordance with the Nevada statutes relating to private
corporations, as found in Chapter 78 of the Nevada Revised Statutes or any
subsequent statute.
ARTICLE VIII
AMENDMENTS
Section 1. Stockholder Amendments.
----------------------
Bylaws may be adopted, amended or repealed by the affirmative vote or written
consent of a majority of the outstanding voting shares of this corporation,
except as otherwise provided by the statutes of Nevada, the Articles of
Incorporation or elsewhere in these Bylaws.
Section 2. Amendments by Board of Directors.
--------------------------------
Subject to the right of stockholders as provided in Section 1 of this Article
VIII, Bylaws may be adopted, amended or repealed by the Board of Directors.
12
EXHIBIT 10.9
COMPUTER SCIENCES CORPORATION
SCHEDULE TO 1992 STOCK INCENTIVE PLAN
<PAGE>
COMPUTER SCIENCES CORPORATION
SCHEDULE TO 1992 STOCK INCENTIVE PLAN
RULES OF THE COMPUTER SCIENCES CORPORATION
EMPLOYEE SHARE OPTION PLAN
Preamble
- --------
This Schedule is solely for the benefit of employees of the Company and of any
corporation under the Control of the Company who reside in the United Kingdom.
The terms and conditions of the Schedule are established to be a Plan capable
of approval as an "approved share option scheme" under Schedule 9 to the
Income & Corporation Taxes Act of 1988.
1. DEFINITIONS
-----------
In this Schedule the following words and expressions shall have the following
meanings:
"Adoption Date" the date on which the Board adopted these Rules
"Approval Date" the date on which the Plan is approved by the Board
of the Inland Revenue under Schedule 9
"Associated Company" has the same meaning as in Section 416
"Board" the board of directors of the Company or, except in
Rule 10.4, a duly constituted committee thereof
"Company" Computer Sciences Corporation, a Nevada corporation
(or, in respect of any "new rights" within the
meaning of Rule 7.4, the "acquiring company" within
the meaning of Rule 7.4)
"Control" has the same meaning as in Section 840
"Date of Grant" the date in which an option is, was or is to be
granted under the Plan
"Dealing Day" a day on which the Stock Exchange is open for, and
transacts business in, shares
"Eligible Employee" (a) any employee (other than a director) of any
Participating Company who at the relevant time:
(i) is required to devote to his duties not
less than 20 hours per week (excluding
meal breaks; and
(ii) is not precluded by paragraph 8 of
Schedule 9 (material interest in a close
company) from participating in the Plan;
and
2
<PAGE>
(iii) does not own stock possessing more than
5% of the total combined voting power of
all classes of stock in the Company; or
(b) any director of any Participating Company who is
required to devote to his duties not less than 25
hours per week (excluding meal breaks; and
(i) is not precluded by paragraph 8 of
Schedule 9 (material interest in a close
company) from participating in the Plan;
and
(ii) does not own stock possessing more than
5% of the total combined voting power of
all classes of stock in the Company
"Governing Plan" the company's 1992 Stock Incentive Plan under which
the rules operate as a schedule thereto
"Market Value" if the Shares are at the time listed on the Stock
Exchange, then on any day the reported closing price
of a Share as such price is officially reported, on
that day or the last preceding Dealing Day;
if the Shares are at the time not listed on the Stock
Exchange, then on any day the market value of a share
determined in accordance with the provisions of Part
VIII of the Taxation of Capital Gains Act 1992 and
agreed prior to that day for the purposes of the Plan
with the Inland Revenue Shares Valuation Division
"Option" a right to subscribe for Shares granted (or to be
granted) in accordance with the Rules of this Plan
"Option Holder" an individual to whom an Option has been granted or
his personal representatives
"Participating Company" the Company and any other corporation of, which the
Company has Control and which is for the time being
nominated by the Board to be a participating company
"Plan" the employee share option plan constituted and
governed by these Rules as from time to time amended
"Relevant Emoluments" the meaning which the term bears in paragraph 28(2)
of Schedule 9 by virtue of sub-paragraph 4 of that
paragraph
"Rules" this schedule to the Governing Plan
3
<PAGE>
"Share" an ordinary share of common stock of $1.00 par value
in the capital of the Company which satisfies the
conditions specified in paragraph 10 to 14 inclusive
of Schedule 9 (or, in respect of any New Option
within the meaning of Rule 7.4, a share in the
capital of the Acquiring Company within the meaning
of Rule 7.4, which satisfies the said conditions)
"Stock Exchange" the New York Stock Exchange
"Subscription Price" the price at which each Share subject to an Option
may be acquired on the exercise of that Option being,
subject to Rule 8, the higher of:
(i) the nominal (par) value of a Share and
(ii) the Market Value of a Share on the day the
Option was issued pursuant to Rule 2
"Subsisting Option" an Option which has neither lapsed nor been exercised
"TA 1988" the Income and Corporation Taxes Act 1988
"Year of Assessment" a year beginning on any 6 April and ending on the
following 5 April
References to legislation are references to United Kingdom statutes and
include such enactments modified, extended or re-enacted and where an Act is
not otherwise specified refers to TA 1988.
2. GRANT OF OPTIONS
----------------
At any time, but in any case not earlier than the later of the Adoption Date
or the Approval Date nor later than June 15, 2002 the Board may select at its
discretion (without being bound by selections made in prior years) one or more
Eligible Employees whom the Board determines to have a direct and significant
impact on the performance of the Company, and may following such selection
invite them to apply for the grant of an Option to acquire Shares in the
Company. Each invitation to apply shall specify:
(i) the date (being neither earlier than 7 nor later than 14 days after the
issue of the invitation) by which an application must be made;
(ii) the maximum number of Shares over which that individual may on that
occasion apply for an Option, being determined at the absolute
discretion of the Board save that it shall not be so large that the
grant of such Option over that number of Shares would cause the limits
specified in Rule 5.2 to be exceeded;
(iii) the Subscription Price at which Shares may be acquired on the exercise
of the Option; and
4
<PAGE>
(iv) such other conditions to be met before an Option may be exercised
relating to growth in corporate sales, profit, return on capital,
return on stockholders' funds or similar published and objective
measures of corporate performance.
Each invitation shall be accompanied by an application form in such form, not
inconsistent with these Rules, as the Board may determine.
3. APPLICATION FOR OPTIONS
-----------------------
3.1 Not later than the date specified in the invitation each Eligible
Employee to whom an invitation has been issued in accordance with Rule 2
above may apply to the Board, using the application form supplied, for
an Option over a number of Shares not exceeding the number specified in
the invitation.
3.2 Unless the Option is to be granted under seal, a consideration not
exceeding pound sterling 1 shall be paid by the Eligible Employee.
4. GRANT OF OPTION
---------------
4.1 Not later than the twenty-first day following the issue of invitations
the Board may grant to each applicant who is still an Eligible Employee
an Option over the number of Shares specified in his application.
4.2 As soon as possible after Options have been granted the Board shall
issue an option certificate in respect of each Option in such form, not
inconsistent with these Rules, as the Board may determine.
4.3 No Option may be transferred, assigned or charged and any purported
transfer, assignment or charge shall cause the Option to lapse
forthwith. Each option certificate shall carry a statement to this
effect.
5. LIMITATION ON GRANTS
--------------------
5.1 No Option shall be granted pursuant to Rule 2 above if such grant would
result in the aggregate of
(i) the number of Shares over which Subsisting Options over unissued
Shares have been granted under these Rules; and
(ii) the number of Shares which have been issued on the exercise of
Options granted under these Rules; and
(iii) the number of Shares which have otherwise been issued pursuant to
the Governing Plan during the period since 1 5 June 1992
exceeding 1,000,000 Shares (or such other higher figure as may be
approved by the Company's stockholders from time to time for the
purposes of the Governing Plan).
5
<PAGE>
5.2 No Option shall be granted to an Eligible Employee if immediately
following such grant he would hold Subsisting Options over Shares with
an aggregate Subscription Price exceeding the greater of
(i) pound sterling 100,000; or
(ii) four times the amount of the Eligible Employee's Relevant
Emoluments for the current or preceding Year of Assessment
(whichever of those years gives the greater amount) or, if there
were not Relevant Emoluments for the preceding Year of
Assessment, four times the amount of the Relevant Emoluments for
the period of twelve months beginning with the first day during
the current Year of Assessment in respect of which there are
Relevant Emoluments.
For the purposes of this Rule 5.2, Options shall include all Options
granted under this Plan and all options granted under any other plan
approved under Schedule 9 and established by the Company or any
Associated Company thereof.
6. EXERCISE OF OPTIONS
-------------------
6.1 (a) subject to Rule 9 below and to Rule 2 (iv), any Subsisting Option
may be exercised in whole or in part at such time or times,
during such period, and for such number of Shares as shall be
determined by the Board and set out in the option certificate.
(b) in the event of the death of an Option holder, his personal
representatives may (if so provided in the option certificate and
subject to rule 6.2) exercise any Subsisting Option to the extent
provided in the option certificate within a period not exceeding
twelve months from the death of the Option holder.
(c) in the event of the Option holder ceasing to be an employee of
any Participating Company by reason of injury, disability,
redundancy or retirement or, at the discretion of the Board, for
any other reason the Option holder may (if so provided in the
option certificate and subject to Rule 6.2) exercise any
Subsisting Option to the extent provided in the option
certificate within a period not exceeding thirty-six (or in the
case of redundancy, three) months from the date of cessation.
(d) in the event of the Option holder ceasing to be an employee of
any Participating Company by reason of dismissal for fault, or
for any reason not covered by the relevant option certificate,
any Subsisting Option shall thereupon lapse.
6.2 An Option shall lapse on the earliest of the following events:
(i) any date specified in the option certificate.
(ii) the tenth anniversary of the Date of Grant.
(iii) the first anniversary of the Option holder's death.
6
<PAGE>
(iv) unless the option certificate specifies a shorter period, thirty-
six months following the Option holder ceasing to be an employee
of any Participating Company (except in the case of redundancy
when the period shall be reduced to three months) other than by
reason of his death.
(v) on completion of the dissolution, liquidation, reorganization,
merger or consolidation of the Company pursuant to Rule 7 (unless
an option swap under Rule 7.3 is in operation.
7. RECONSTRUCTIONS AND TAKEOVERS
-----------------------------
7.1 If any person obtains control of the Company as a result of making:
(i) a general offer to acquire the whole of the issued share capital
of the Company which is made on a condition such that if it is
satisfied the person making the offer will have Control of the
Company; or
(ii) a general offer to acquire all the shares in the Company which
are of the same class as the Shares
then any Subsisting Option may subject to Rule 7.4 below be exercised
within six months of the time when the person making the offer has
obtained Control of the Company and any condition subject to which the
offer is made has been satisfied.
7.2 If under section 425 of the Companies Act 1985 the Court sanctions a
compromise or arrangement proposed for the purposes of or in connection
with a scheme for the reconstruction of the Company or its amalgamation
with any other company or companies, any Subsisting Option may, subject
to Rule 7.4 below, be exercised within six months of the Court
sanctioning the compromise or arrangement.
7.3 If any person becomes bound or entitled to acquire shares in the Company
under sections 428 to 430 of the said Act of 1985 any Subsisting Option
may, subject to Rule 7.4 below, be exercised at any time when that
person remains so bound or entitled.
7.4 If as result of the events specified in Rules 7.1 or 7.2 a company has
obtained Control of the Company, or if a company has become bound or
entitled as mentioned in Rule 7.3, the Option Holder may, by agreement
with that other company (the "Acquiring Company"), within the
appropriate period, release such Subsisting Option (the "Old Option")
for an option (the "New Option") which satisfies the conditions that it:
(i) is over shares in the Acquiring Company or some other company
falling within paragraph (b) or paragraph (c) of paragraph 10,
Schedule 9, which satisfy the conditions specified in paragraphs
10 to 14 inclusive of Schedule 9;
(ii) is a right to acquire such number of such shares as has on
acquisition for the New Option an aggregate market value equal to
the aggregate Market Value of the shares subject to the Old
Option on its release;
(iii) has a subscription price per share such that the aggregate price
payable on the complete exercise equals the aggregate price which
would have been payable on complete exercise of the Old Option;
and
7
<PAGE>
(iv) is otherwise identical in terms to the Old Option.
The New Option shall, for all other purposes of this Plan, be treated as
having been acquired at the same time as the Old Option.
Where any New Options are granted pursuant to this clause 7.4, Rules
4.3, 6, 7, 8, 9, 10.1 and 10.3 to 10.6 shall, in relation to the New
Options, be construed as if references to the Company and to the Shares
were references to the Acquiring Company, or as the case may be, to the
other company to whose shares the New Options relate, and to the shares
in that other company, but references to Participating Company shall
continue to be construed as if references to the Company were references
to Computer Sciences Corporation.
7.5 If the Company passes a resolution for voluntary winding up, any
Subsisting Option may be exercised within six months of the passing of
the Resolution.
7.6 For the purposes of this Rule 7 other than Rule 7.4 a person shall be
deemed to have obtained Control of a Company if he and others acting in
concern with him have together obtained Control of it.
7.7 The exercise of an Option pursuant to the preceding provisions of this
Rule 7 shall be subject to the provisions of Rule 9 below.
7.8 Where in accordance with Rule 7.4 Subsisting Options are released and
New Options granted the New Options shall not be exercisable in
accordance with Rule 7.1, 7.2 and 7.3 above by virtue of the event by
reason of which the New Options were granted.
8. VARIATION OF SHARE CAPITAL
--------------------------
In the event of any capitalization or rights issue or any consolidation,
sub-division or reduction of capital by the Company, the aggregate
number of Shares issuable under the Plan, the number of Shares subject
to any Option and the Subscription Price for each of those Shares shall
be adjusted in such appropriate and proportional manner as the Board
confirms to be fair and reasonable provided that;
(i) the aggregate amount payable on the exercise of an Option in full
is not increased; and
(ii) no adjustment shall be made without the prior approval of the
Board of Inland Revenue; and
(iii) following the adjustment the Shares continue to satisfy the
conditions specified in paragraphs 10 to 14 inclusive of
Schedule 9.
[(iv) the Subscription Price for a share is not reduced below its
nominal value].
9. MANNER OF EXERCISE OF OPTIONS
-----------------------------
9.1 No Option may be exercised by an individual at any time when he is
precluded by paragraph 8 of Schedule 9 from participating in the Plan
(material interest in a close company).
8
<PAGE>
9.2 No Option may be exercised at any time when the Shares which may be
thereby acquired are not Shares as defined in Rule 1.1.
9.3 An Option shall be exercised by the Option Holder, or in the case of an
Option exercisable in accordance with Rule 6.1(b) by his personal
representatives, giving notice to the Company in writing of the number
Shares in respect of which he wishes to exercise the Option accompanied
by the appropriate payment in full and the relevant option certificate
and shall be effective on the date of its receipt by the Company.
9.4 Shares shall be allotted and issued pursuant to a notice of exercise
within 30 days of the date of exercise and a definite share certificate
issued to the Option holder in respect thereof. Save for any rights
determined by reference to a date preceding the date of allotment, such
Shares where issued shall rank pari passu with the other shares of the
same class in issue at the date of allotment.
9.5 When an Option is exercised only in part, the balance shall remain
exercisable on the same terms as originally applied to the whole Option
and, a new option certificate shall be issued accordingly by the Company
as soon as possible after the partial exercise. No fractional Shares
may be issued pursuant to the exercise of an Option.
10 ADMINISTRATION AND AMENDMENT
----------------------------
10.1 The Plan shall be administered by the Board whose decision on all
disputes shall be final.
10.2 The Board may from time to time amend these Rules provided that:
(i) no amendment may detrimentally affect an Option holder as regards
an Option granted prior to the amendment being made;
(ii) no amendment may be made which would change the class of persons
eligible to receive Options, or materially increase the benefits
accruing to Option holders or increase the limit specified in
Rule 5.1 or change Rule 10.4 without the prior approval of the
Company's stockholders in general meeting; and
(iii) no amendment shall have effect until approved by the Board of
Inland Revenue as not being contrary to Schedule 9.
10.3 The cost of establishing and operating the Plan shall be borne by the
Participating Companies in such proportions as the Board shall
determine.
10.4 The Board may establish a committee consisting of not less than three
disinterested persons (who are not and have not within the preceding
twelve months been themselves eligible to receive grants of Options
under the Plan or any other plan of the Company), unless applicable
securities laws otherwise permit, and to whom any or all of its powers
in relation to the Plan may be delegated. The Board may at any time
dissolve the Committee, after its constitution or direct the manner in
which it shall act.
9
<PAGE>
10.5 Any notice or other communication under or in connection with the Plan
may be given by the Company either personally or by post and to the
Company either personally or by post to an authorized representative;
items set by post shall be prepaid and shall be deemed to have been
received 72 hours after posting.
10.6 The Company shall at all times keep available sufficient authorized and
unissued shares to satisfy the exercise to the full extent still
possible of all Options which have neither lapsed or been fully
exercised, taking account of any other obligations of the company to
issue unissued shares.
10.7 The Board may at any time terminate the Plan but the provisions of the
Plan shall remain in force for Subsisting Options.
10.8 Nothing in these Rules or in any document pursuant hereto shall confer
on any Eligible Employee any rights not expressed herein, in particular
any right to remain in the employ of the Company.
10.9 Except insofar as this Plan shall be construed as a Schedule to the
Governing Plan the Governing Plan shall not apply to the Plan.
10
EXHIBIT 10.13
COMPUTER SCIENCES CORPORATION
1990 NONEMPLOYEE DIRECTOR RETIREMENT PLAN
As amended December 6, 1996
Section 1: PURPOSE OF PLAN
The purpose of this 1990 Nonemployee Director Retirement Plan ("Plan") of
Computer Sciences Corporation, a Nevada corporation (the "Company"), is to
enable the Company to attract and retain nonemployee directors of the highest
quality by furnishing certain retirement benefits to such persons.
Section 2: PARTICIPATION
Each person who satisfies all of the following conditions (a "Participant")
shall participate in this Plan:
(a) such person has served as a director of the Company after the effective
date of this Plan and prior to December 6, 1996;
(b) such person has served as a director of the Company for at least five
years; and
(c) such person is not, and has never been, an employee of the Company.
Section 3: BENEFITS
(a) Each month during a Participant's Benefit Period (as hereinafter
defined), the Company shall pay to such Participant an amount equal to one-
twelfth of his or her Annual Retirement Benefit (as hereinafter defined).
(b) The "Annual Retirement Benefit," with respect to any Participant, shall
mean the sum of: (i) an amount equal to the annualized base retainer for
service as a director of the Company, excluding any retainer for service as a
member of a committee of the Board of Directors, in effect as of the last date
upon which such Participant served as a director of the Company; plus (ii) an
amount equal to the fee for attending a regularly scheduled meeting of the
full Board of Directors in effect as of such date, multiplied by the number of
regularly scheduled meetings of the full Board of Directors held during the
calendar year ending on such date.
(c) The "Benefit Period," with respect to any Participant, shall mean that
period of time commencing on the later of (i) the date upon which such
Participant shall cease to be a director of the Company for any reason
whatsoever, or (ii) the date upon which such Participant shall attain age 65,
<PAGE>
and continuing for that number of years equal to the number of complete years
such Participant served as a director of the Company; provided, however, that
if such Participant shall have served as a director of the Company for at
least 10 years, then the Benefit Period shall continue for 10 years or until
such later date upon which such Participant shall die.
(d) In the event that a Participant shall die while a director of the
Company or prior to the expiration of his or her Benefit Period, the balance
of the benefits payable to such Participant pursuant to this Section 3 shall
instead be payable to the person or entity designated in writing by such
Participant for such purpose (the "Designated Beneficiary").
(e) Notwithstanding the foregoing, the benefits otherwise payable with
respect to a Participant pursuant to this Section 3 shall be denied or
discontinued if a majority of the disinterested directors of the Company shall
determine that:
(i) such Participant has willfully failed to perform his or her duties
as a director of the Company (other than any such failure resulting from such
Participant's incapacity due to physical or mental illness);
(ii) such Participant has failed to make himself or herself available to
the Board of Directors, and to provide such advice and counsel as may be
reasonably requested by the Board of Directors, after such Participant has
ceased to be a director of the Company; or
(iii) such Participant or, after the death of such Participant, the
Designated Beneficiary of such Participant, has willfully engaged in conduct
that is in competition with the business of the Company or is materially
injurious to the Company, monetarily or otherwise.
For purposes of this Section 3(e), an act or failure to act shall be
considered willful if not in good faith and with the reasonable belief that
such act or failure to act was in the best interests of the Company.
Section 4: SOURCE OF PAYMENTS
All benefits payable under this Plan shall be paid in cash from the general
funds of the Company, and no trust account, escrow, fiduciary relationship or
other security arrangement shall be established to assure payment. No
Participant shall have any right, title or interest in or to any investment
that the Company may make in anticipation of the potential payment obligations
hereunder. Nothing contained in this Plan and no action taken pursuant hereto
shall create or be construed to create a trust of any kind or a fiduciary
relationship between the Company and any Participant or any other person or
entity. To the extent that any person or entity acquires a right to receive
2
<PAGE>
benefits from the Company under this Plan, such right shall be no greater
than, nor different from, the right of any unsecured general creditor of the
Company.
Section 5: ADMINISTRATION OF PLAN
This Plan shall be administered by the Chief Executive Officer of the Company,
or such other officer of the Company as shall be designated by the Board of
Directors (the "Administrator"). Subject to the provisions of this Plan, the
Administrator shall be authorized and empowered to do all things necessary or
desirable in connection with the administration of this Plan, including,
without limitation, the following:
(a) adopt, amend and rescind rules and regulations relating to this Plan;
(b) determine which directors of the Company meet the requirements of
Section 2 hereof for participation in this Plan; and
(c) interpret and construe the terms and provisions of this Plan.
All such rules, regulations, determinations, interpretations and other actions
of the Administrator shall be final and binding upon all persons and entities
interested in this Plan.
Section 6: EFFECTIVE DATE AND DURATION OF PLAN
This Plan is effective as of December 10, 1990, the date upon which it was
adopted by the Board of Directors. This Plan shall continue in effect until
terminated by the Board of Directors pursuant to Section 7 hereof.
Section 7: AMENDMENT AND TERMINATION OF PLAN
The Board of Directors may amend or terminate this Plan at any time and in any
manner; provided however, that no such amendment or termination shall reduce
retroactively the benefits to which any Participant would have been entitled
under this Plan in the event that he or she had ceased to be a director of the
Company on the day immediately preceding the date of such amendment or
termination.
Section 8: NOTICES
Any notice, request, demand and other communication hereunder shall be in
writing and shall be delivered by hand or sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
3
<PAGE>
If to the Company: Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Attention: Chief Executive Officer
If to a Participant or To the most recent address of such
Designated Beneficiary: person or entity as shown in the
Company's records
Such notice shall be deemed given as of the date of delivery or, if delivery
is made by mail, as of the date shown on the postmark on the receipt for
registration or certification.
Section 9: GOVERNING LAW
This Plan shall be governed by and construed in accordance with the laws of
the State of Nevada.
4
<TABLE>
EXHIBIT 11
COMPUTER SCIENCES CORPORATION
CALCULATION OF EARNINGS PER SHARE
(In thousands except per-share amounts)
<CAPTION>
Third Quarter Ended Nine Months Ended
---------------------- ----------------------
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $57,390 $19,721 $116,673 $95,231
========== ========== ========== ==========
Shares:
Weighted average shares
outstanding 76,224 75,614 75,749 74,509
Common stock
equivalents 2,270 2,094 2,365 2,310
---------- ---------- ---------- ----------
Total for primary and
fully diluted 78,494 77,708 78,114 76,819
========== ========== ========== ==========
Earnings Per Share:
Primary and fully
diluted* $ 0.73 $ 0.25 $ 1.49 $ 1.24
========== ========== ========== ==========
</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-28-1997
<PERIOD-START> Mar-30-1996
<PERIOD-END> Dec-27-1996
<PERIOD-TYPE> 9-MOS
<CASH> 91,873
<SECURITIES> 0
<RECEIVABLES> 1,401,756
<ALLOWANCES> 45,618
<INVENTORY> 0
<CURRENT-ASSETS> 1,625,750
<PP&E> 1,614,072
<DEPRECIATION> 739,348
<TOTAL-ASSETS> 3,503,630
<CURRENT-LIABILITIES> 1,089,322
<BONDS> 637,444
<COMMON> 76,823
0
0
<OTHER-SE> 1,533,060
<TOTAL-LIABILITY-AND-EQUITY> 3,503,630
<SALES> 0
<TOTAL-REVENUES> 4,080,785
<CGS> 0
<TOTAL-COSTS> 3,210,244
<OTHER-EXPENSES> 241,738
<LOSS-PROVISION> 13,281
<INTEREST-EXPENSE> 24,768
<INCOME-PRETAX> 186,473
<INCOME-TAX> 69,800
<INCOME-CONTINUING> 116,673
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 116,673
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.49
</TABLE>
<TABLE>
EXHIBIT 28
COMPUTER SCIENCES CORPORATION
REVENUES BY MARKET SECTOR
(In millions)
<CAPTION>
Fiscal Period Ended % of Total
---------------------- ----------------------
Dec. 27, Dec. 29, Dec. 27, Dec. 29,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
THIRD QUARTER
Global commercial:
U.S. commercial $ 539.7 $ 458.3 38% 37%
International 490.3 365.9 34 30
--------- --------- --------- ---------
Total 1,030.0 824.2 72 67
U.S. federal government:
Department of Defense 256.2 252.4 18 20
NASA 72.7 77.6 5 6
Civil agencies 62.7 82.5 5 7
--------- --------- --------- ---------
Total 391.6 412.5 28 33
--------- --------- --------- ---------
Total revenues $1,421.6 $1,236.7 100% 100%
========= ========= ========= =========
NINE MONTHS
Global commercial:
U.S. commercial $1,539.2 $1,301.3 38% 38%
International 1,312.1 978.9 32 28
--------- --------- --------- ---------
Total 2,851.3 2,280.2 70 66
U.S. federal government:
Department of Defense 806.6 700.9 20 20
NASA 223.4 234.1 5 7
Civil agencies 199.5 233.1 5 7
--------- --------- --------- ---------
Total 1,229.5 1,168.1 30 34
--------- --------- --------- ---------
Total revenues $4,080.8 $3,448.3 100% 100%
========= ========= ========= =========
</TABLE>
</PAGE>
