<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 September 26, 1997
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 [ ]
77,646,301 shares of Common Stock, $1.00 par value, were outstanding on
September 26, 1997.
<PAGE>
COMPUTER SCIENCES CORPORATION
Index to Form 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income,
Second Quarter and Six Months Ended
September 26, 1997 and September 27, 1996........................ 3
Consolidated Condensed Balance Sheets,
September 26, 1997 and March 28, 1997............................ 4
Consolidated Condensed Statements of Cash Flows,
Six Months Ended September 26, 1997
and September 27, 1996........................................... 5
Notes to Consolidated Condensed Financial Statements................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............. 8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders............ 12
Item 6. Exhibits and Reports on Form 8-K............................... 13
2
<PAGE>
<TABLE>
PART I, ITEM 1. FINANCIAL STATEMENTS
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
<CAPTION>
Second Quarter Ended Six Months Ended
---------------------- ----------------------
(In thousands except Sept. 26, Sept. 27, Sept. 26, Sept. 27,
per-share amounts) 1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $1,578,824 $1,355,255 $3,067,574 $2,659,147
---------- ---------- ---------- ----------
Costs of services 1,231,109 1,073,502 2,402,375 2,110,710
Selling, general and
administrative 148,269 116,306 286,882 232,759
Depreciation and
amortization 95,963 80,902 184,718 152,509
Interest expense 12,430 10,708 23,166 19,022
Interest income (1,300) (2,102) (2,701) (3,565)
Special charges (note A) 48,929 208,393 48,929
---------- ---------- ---------- ----------
Total costs and
expenses 1,486,471 1,328,245 3,102,833 2,560,364
---------- ---------- ---------- ----------
Income before taxes 92,353 27,010 (35,259) 98,783
Taxes on income (note A) 33,800 13,004 (146,400) 39,500
---------- ---------- ---------- ----------
Net income $ 58,553 $ 14,006 $ 111,141 $ 59,283
========== ========== ========== ==========
Earnings per common
share (notes A and B) $ 0.74 $ 0.18 $ 1.41 $ 0.76
========== ========== ========== ==========
</TABLE>
[FN]
See accompanying notes.
3
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
Sept. 26, Mar. 28,
(In thousands) 1997 1997
----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 67,926 $ 110,726
Receivables 1,360,047 1,294,003
Prepaid expenses and other current assets 237,127 207,698
----------- -----------
Total current assets 1,665,100 1,612,427
----------- -----------
EXCESS OF COST OF BUSINESSES ACQUIRED
OVER RELATED NET ASSETS, NET 546,843 561,670
OTHER ASSETS 645,072 518,692
PROPERTY AND EQUIPMENT, at cost 1,828,619 1,668,905
Less accumulated depreciation and amortization 894,042 780,836
----------- -----------
Property and equipment, net 934,577 888,069
----------- -----------
Total assets $3,791,592 $3,580,858
=========== ===========
CURRENT LIABILITIES:
Short-term debt and current
maturities of long-term debt $ 39,417 $ 29,933
Accounts payable 274,960 295,112
Accrued payroll and related costs 268,059 252,902
Other accrued expenses 369,941 311,283
Deferred revenue 84,378 112,888
Income taxes payable 4,936 84,995
----------- -----------
Total current liabilities 1,041,691 1,087,113
----------- -----------
LONG-TERM DEBT, NET 736,954 630,842
----------- -----------
OTHER LONG-TERM LIABILITIES 192,365 193,343
----------- -----------
STOCKHOLDERS' EQUITY (note C):
Common stock issued, par value $1.00 per share 77,989 76,925
Other stockholders' equity 1,742,593 1,592,635
----------- -----------
Total stockholders' equity 1,820,582 1,669,560
----------- -----------
Total liabilities and stockholders' equity $3,791,592 $3,580,858
=========== ===========
</TABLE>
[FN]
See accompanying notes.
4
<PAGE>
<TABLE>
COMPUTER SCIENCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
<CAPTION>
Six Months Ended
----------------------
(In thousands, increase (decrease) in Sept. 26, Sept. 27,
cash and cash equivalents) 1997 1996
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 111,141 $ 59,283
Adjustments to reconcile net income to net
cash provided by operating activities:
Special items, net of income tax effects 6,342 35,280
Depreciation and amortization 184,718 152,509
Provision for losses on accounts receivable 2,555 6,689
Changes in assets and liabilities, net of
effects of acquisitions:
Increase in assets (135,112) (199,264)
(Decrease) increase in liabilities (6,752) 35,274
---------- ----------
Net cash provided by operating activities 162,892 89,771
---------- ----------
Investing activities:
Purchases of property, plant and equipment (164,171) (147,201)
Acquisitions, net of cash acquired (50,349) (137,690)
Outsourcing contracts (105,991) (36,424)
Purchased and internally developed software (33,966) (24,594)
Other investing cash flows (6,128) (1,296)
---------- ----------
Net cash used in investing activities (360,605) (347,205)
---------- ----------
Financing activities:
Borrowings under commercial paper, net 102,843 170,491
Borrowings (repayments) under lines of credit, net 9,426 (4,376)
Principal payments on long-term debt (4,901) (1,746)
Proceeds from stock option transactions 37,431 16,410
Other financing cash flows 10,114 4,636
---------- ----------
Net cash provided by financing activities 154,913 185,415
---------- ----------
Net decrease in cash and cash equivalents (42,800) (72,019)
Cash and cash equivalents at beginning of year 110,726 113,873
---------- ----------
Cash and cash equivalents at end of period $ 67,926 $ 41,854
========== ==========
</TABLE>
[FN]
See accompanying notes.
5
<PAGE>
COMPUTER SCIENCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
(A) CSC recognized a net special credit of $1.7 million, or 2 cents per
share, during the first quarter of fiscal 1998 as a result of
developments at CSC Enterprises, a general partnership of which CSC,
through one of its affiliates, is the managing general partner. This
net credit resulted from a tax benefit of $135 million and an after-tax
special charge of $133.3 million.
During the fiscal quarter ended June 27, 1997, certain partners withdrew
from CSC Enterprises. As a result of these withdrawals, CSC Enterprises
took actions that caused CSC to recognize an increase in the tax basis of
certain assets. As required by SFAS No. 109, this tax basis increase
resulted in a deferred tax asset of $135 million and a corresponding
reduction of CSC's provision for income taxes during the first fiscal
quarter.
In connection with these developments, CSC Enterprises reviewed its
operations, its market opportunities and the carrying value of its
assets. Based on this review, plans were initiated during the first
quarter to eliminate certain offerings and write down assets, primarily
within its telecommunications operations. As a result of these
plans, CSC recognized an after-tax special charge of $133.3 million
during the fiscal quarter ended June 27, 1997. This special charge
included goodwill of $35 million, contract termination costs of $33.8
million, deferred contract costs and other assets of $20.5 million,
telecommunications software and accruals of $22.3 million,
telecommunications property, equipment and intangible assets of
$11.7 million and other costs of $10 million.
CSC recognized a special charge in the second quarter of fiscal 1997
related to the August 1, 1996 acquisition of The Continuum Company, Inc.
The amount of the charge, net of income tax benefits on the tax
deductible portion, was $35.3 million or 45 cents per share. The charge
was comprised of $11 million for investment banking and other merger
expenses; $13.1 million related to the write-off of certain capitalized
software, other assets and intangibles; and $24.8 million related to the
elimination of duplicate data processing facilities, employee severance
costs and contract termination costs.
(B) Primary earnings per common share are based on the weighted average
number of common stock and common stock equivalent shares (dilutive stock
options) outstanding of 78,819,000 and 77,924,000 for the
six months ended September 26, 1997 and September 27, 1996, respectively
(see Part II, Exhibit 11).
6
<PAGE>
(C) No dividends were paid during the periods presented. There were
77,988,748 shares at September 26, 1997 and 76,924,836 shares at March
28, 1997 of $1.00 par value common stock issued with 342,447 and
332,220 shares, respectively, of treasury stock.
(D) Cash payments for interest on indebtedness were $24.3 million and
$20 million for the six months ended September 26, 1997
and September 27, 1996, respectively. Cash payments for taxes on
income were $39.3 million and $36.7 million for the six months ended
September 26, 1997, and September 27, 1996, respectively.
(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) During fiscal 1997, the Financial Accounting Standards Board (FASB)
issued SFAS No. 128, "Earnings per Share." This statement replaces the
presentation of primary earnings per share with basic earnings per share,
and will require dual presentation of basic and diluted earnings per
share on the face of the income statement. For CSC, diluted earnings per
share reflects the potential dilution that could occur if outstanding
options to purchase shares of the Company's common stock were exercised.
As specified in the statement, the Company will apply the statement
beginning with its third quarter of fiscal 1998, and earnings per share
presentations will include restatement of prior period data presented.
Under the provisions of the new standard, basic earnings per share would
be reported as $1.44 and diluted earnings per share would be reported as
$1.41 for the first six months of fiscal 1998.
7
<PAGE>
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Second Quarter and First Six Months of Fiscal 1998 versus
Second Quarter and First Six Months of Fiscal 1997
Revenues
The Company derived its revenues from the following market sectors for the
second quarter and first six months, respectively (dollars in millions):
<TABLE>
<CAPTION>
Second Quarter First Six Months
-------------- Pct. ---------------- Pct.
FY98 FY97 Change FY98 FY97 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
U.S. Commercial $ 680 $ 524 29.7% $1,285 $ 999 28.5%
Europe 409 347 17.7 790 648 21.9
Other International 103 92 12.2 202 174 16.3
------ ------ ------ ------ ------ ------
Total Commercial 1,192 963 23.7 2,277 1,821 25.0
U.S. Federal Government 387 392 (1.2) 791 838 (5.6)
------ ------ ------ ------ ------ ------
Total $1,579 $1,355 16.5% $3,068 $2,659 15.4%
====== ====== ====== ====== ====== ======
</TABLE>
During the second quarter and six months ended September 26, 1997, the
Company's total revenue increased 16.5%, or $224 million, and 15.4% or $409
million, respectively, over the same periods last year. Commercial revenues
grew 23.7%, or $229 million over the same quarter of last year.
U.S. commercial revenues grew 29.7% or $156 million during the second quarter
of fiscal 1998 over the same period last year. Approximately half of the
growth was provided by information technology outsourcing contracts, including
recent contracts with J.P. Morgan and DuPont. The remainder was derived
principally from continued demand for consulting and systems integration
services and growth at CSC Financial Services Group.
European revenues grew $62 million or 17.7% during the second quarter of
fiscal 1998 over the same period last year. Growth came principally from
increased outsourcing business at our UK division, the DuPont contract and
CSC's German SAP consulting practice. For the first half of fiscal 1998,
growth resulted primarily from new outsourcing business and from the
acquisition last year of 75% of Datacentralen, a major provider of information
technology services in Denmark.
The second quarter growth of 12.2% in other international revenues resulted
mainly from expansion of the Company's Australian operations.
U.S. federal government revenue accounted for 24.5% of total revenue for the
quarter compared to 28.9% for the second quarter of 1997. Federal revenue
decreased 1.2% or $5 million, principally due to the completion last year of
several contracts. During the second quarter of fiscal 1998, the Company
announced $310 million in new federal contracts.
8
<PAGE>
As a result of the trends described above, the Company's revenues by market
sector are as follows:
<TABLE>
<CAPTION>
Revenue by Market Sector, Second Quarter First Six Months
as a percentage of total FY98 FY97 FY98 FY97
- ---------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
U.S. Commercial 43% 39% 42% 37%
Europe 26 25 26 24
Other International 7 7 6 7
------ ------ ------ ------
Total Commercial 76 71 74 68
U.S. Federal Government 24 29 26 32
------ ------ ------ ------
Total Revenue 100% 100% 100% 100%
====== ====== ====== ======
</TABLE>
Costs and Expenses
The Company's costs and expenses as a percentage of revenue are as follows
(dollars in millions, before special items):
<TABLE>
<CAPTION>
Dollar Amount Percentage of Revenue
-------------- -------------------------------
First
Second Quarter Second Quarter Six Months
-------------- -------------- --------------
FY98 FY97 FY98 FY97 FY98 FY97
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Costs of services $1,231 $1,074 78.0% 79.2% 78.3% 79.4%
Selling, general & admin. 148 116 9.4 8.6 9.4 8.8
Depreciation and amort. 96 81 6.1 6.0 6.0 5.7
Interest expense, net 11 9 0.7 0.6 0.7 0.6
------ ------ ------ ------ ------ ------
Total $1,486 $1,280 94.2% 94.4% 94.4% 94.5%
====== ====== ====== ====== ====== ======
</TABLE>
Compared with corresponding periods of the prior year, total costs and
expenses improved as a percentage of revenue for the second quarter and first
six months ended September 26, 1997. Cost of services as a percentage of
revenue decreased due to the continued shift in the Company's revenue mix
toward commercial operations, and performance improvements within European
operations and U.S. consulting activities.
Selling, general and administrative costs increased as a percentage of revenue
due to growth in commercial operations relative to U.S. federal business.
This increase was offset in part by improvement in the selling, general and
administrative percentage within the Company's U.S. outsourcing operations.
9
<PAGE>
Special Charges
As previously reported, the results of operations for the first quarter ended
June 27, 1997 included a net special credit of $1.7 million, or 2 cents per
share, resulting from developments at CSC Enterprises, a general partnership
which operates the Company's credit services operations and carries out other
business strategies through acquisition and investment. This net credit
resulted from a tax benefit of $135 million and a special charge of $208.4
($133.3 million after tax), as described below.
During the first quarter ended June 27, 1997, certain partners withdrew from
CSC Enterprises. As a result of these withdrawals, CSC Enterprises took
actions that caused CSC to recognize an increase in the tax basis of certain
assets. As required by SFAS No. 109, this tax basis increase resulted in a
deferred tax asset of $135 million and a corresponding reduction of CSC's
provision for income taxes during that quarter.
In connection with these developments, CSC Enterprises reviewed its
operations, its market opportunities and the carrying value of its assets.
Based on this review, plans were initiated during the first quarter to
eliminate certain offerings and write down assets, primarily within its
telecommunications operations. As a result of these plans, CSC recognized an
after-tax special charge of $133.3 million during the fiscal quarter ended
June 27, 1997. This special charge included goodwill of $35 million, contract
termination costs of $33.8 million, deferred contract costs and other assets
of $20.5 million, telecommunications software and accruals of $22.3 million,
telecommunications property, equipment and intangible assets of
$11.7 million and other costs of $10 million.
The results of operations for last year's second quarter (ended September 27,
1996) included a special charge related to the August 1, 1996 acquisition of
The Continuum Company, Inc. The amount of the charge, net of income tax
benefits on the tax deductible portion, was $35.3 million or 45 cents per
share. The non-recurring charge was comprised of $11 million for investment
banking and other merger expenses; $13.1 million related to the write-off of
certain capitalized software, other assets and intangibles; and $24.8 million
related to the elimination of duplicate data processing facilities, employee
severance costs and contract termination costs.
Income Before Taxes
Income before taxes increased to $92.4 million, up $16.5 million, or 21.6%
compared with the same quarter last year before the prior year's special
charge. The Company's profit margin before taxes and special charges was 5.8%
compared to 5.6% for last year's second quarter and remained the same at 5.6%
for the first six months of fiscal 1998 and 1997.
10
<PAGE>
Net Income
Net income was $58.6 million for the second quarter of fiscal 1998, up $9.3
million, or 18.8% over last year's earnings before the special charge. This
year's second quarter earnings per share of 74 cents increased 17.5% over last
year's second quarter pre-charge earnings per share of 63 cents. After the
charge, last year's second quarter earnings per share were 18 cents. On a
year to date basis, earnings per share before special items were $1.39, up 18
cents, or 14.9% over the same period for the previous fiscal year.
Cash Flows
Cash provided by operating activities was $162.9 million for the six months
ended September 26, 1997, compared with $89.8 million during the same period
last year. Higher earnings, non-cash depreciation and amortization expenses,
and favorable changes in working capital were the primary drivers of the
improvement.
The Company's cash expenditures for investing activities totaled $360.6
million for the most recent six months versus $347.2 million during the same
period of last year. Significant current year activity includes purchases of
outsourcing assets in connection with the DuPont contract.
Cash provided by financing activities was $154.9 million for the most recent
six months versus $185.4 million for the same period last year.
Financial Condition
During the first six months of fiscal 1998, the Company's capital outlays
included $320.5 million of business investments in the form of fixed asset
purchases, acquisitions and new outsourcing contracts. These amounts were
funded from operating cash flows, additional debt and existing cash, which
decreased from $110.7 million to $67.9 million. As a result of the net
increase in borrowings, the Company's debt-to-total capitalization ratio
increased to 29.9% at September 26, 1997 versus 28.4% at fiscal 1997 year end.
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.
New Accounting Pronouncement
During fiscal 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128, "Earnings per Share." This statement replaces the presentation
of primary earnings per share with basic earnings per share, and will require
dual presentation of basic and diluted earnings per share on the face of the
income statement. The Company will apply the statement beginning with its
third quarter of fiscal 1998, as described in Note F of Item 1.
11
<PAGE>
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security-Holders.
a. The Company held its Annual Meeting of Stockholders on August 11, 1997.
b. Proxies for the Annual Meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934; there were no solicitations in
opposition to management's nominees for director as listed in the Proxy
Statement; and all such nominees were elected.
The directors elected were Howard P. Allen, Irving W. Bailey, II, Van B.
Honeycutt, William R. Hoover, Richard C. Lawton, Leon J. Level, Thomas A.
McDonnell, F. Warren McFarlan, James R. Mellor and William P. Rutledge.
With respect to each nominee, the results of the vote were as follows:
<TABLE>
<CAPTION>
Votes
-------------------------------
For Withheld
------------ ------------
<S> <C> <C>
Howard P. Allen 65,243,955 283,815
Irving W. Bailey, II 65,272,238 255,532
Van B. Honeycutt 65,252,345 275,425
William R. Hoover 65,251,698 276,072
Richard C. Lawton 65,252,577 275,193
Leon J. Level 65,253,914 273,856
Thomas A. McDonnell 64,699,973 827,797
F. Warren McFarlan 65,270,493 257,277
James R. Mellor 65,261,326 266,444
William P. Rutledge 65,264,482 263,288
</TABLE>
c. There was submitted to the stockholders a proposal to approve the 1997
Nonemployee Director Stock Incentive Plan, which proposal was approved by the
stockholders. The results of the vote were as follows: 57,148,501 votes cast
for, 7,985,883 votes cast against and 393,386 abstentions. There were no
broker non-votes.
12
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
a. Exhibits
<S> <C> <C>
2.1 Agreement and Plan of Merger dated as of April 28, 1996 by
and among the Registrant, The Continuum Company, Inc. and
Continental Acquisition, Inc. (k)
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 (l)
3.4 Certificate of Amendment of Certificate of Designations of
Series A Junior Participating Preferred Stock, effective
August 1, 1996 (n)
3.5 Bylaws, amended and restated effective November 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* (m)
10.3 1980 Stock Option Plan, amended and restated effective
March 31, 1988* (m)
10.4 1984 Stock Option Plan, amended and restated effective
March 31, 1988* (m)
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* (m)
10.9 Schedule to the 1992 Stock Incentive Plan for United
Kingdom personnel* (p)
10.10 1995 Stock Incentive Plan* (j)
10.11 1997 Nonemployee Director Stock Incentive Plan (q)
10.12 Deferred Compensation Plan, amended and restated effective
November 4, 1996* (o)
10.13 Supplemental Executive Retirement Plan, amended and
restated effective November 4, 1996 (o)
10.14 1990 Nonemployee Director Retirement Plan, amended and
restated effective December 6, 1996 (p)
10.15 Form of Indemnification Agreement for Directors (d)
10.16 Form of Indemnification Agreement for Officers (e)
10.17 Information Technology Services Agreements with General
Dynamics Corporation, dated as of November 4, 1991 (h)
10.18 $350 million Credit Agreement dated as of September 6, 1995 (j)
10.19 First Amendment to $350 Million Credit Agreement dated
September 23, 1996 (o)
10.20 Amended and Restated Rights Agreement, effective
August 1, 1996 (n)
13
<PAGE>
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
28 Revenues by Market Sector
99.1 Annual Report on Form 11-K for the Matched Asset Plan of the
Registrant for the fiscal year ended December 31, 1996 (f)
99.2 Annual Report on Form 11-K for the Hourly Savings Plan of
CSC Outsourcing Inc. for the fiscal year ended
December 31, 1996 (f)
99.3 Annual Report on Form 11-K for the CUTW Hourly Savings Plan
of CSC Outsourcing, Inc. for the fiscal year ended
December 31, 1996 (f)
</TABLE>
14
<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 28, 1997
(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 Registrant's Current
Report on Form 8-K dated April 28, 1996.
(l) Incorporated herein by reference to the Registrant's Proxy
Statement for its July 31, 1996 Annual Meeting of Stockholders
(m) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on August 12, 1996.
(n) Incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated August 1, 1996
(o) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on November 12, 1996.
(p) Incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q filed on February 10, 1997.
(q) Incorporated herein by reference to the Registrant's Proxy
Statement for its August 11, 1997 Annual Meeting of Stockholders.
b. Reports on Form 8-K:
There were no reports on Form 8-K filed during the second quarter of fiscal
1998.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPUTER SCIENCES CORPORATION
Date: November 7, 1997 By: /s/ Denis M. Crane
-----------------------------
Denis M. Crane
Vice President and Controller
Chief Accounting Officer
16
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------- ----------------------
<S> <C>
3.5 Bylaws, amended and restated effective November 3, 1997
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
28 Revenues by Market Sector
</TABLE>
17
EXHIBIT 3.5
BYLAWS
OF
COMPUTER SCIENCES CORPORATION
As amended November 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.
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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
3
<PAGE>
designate 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 nine (9), 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 necessary in order
legally to constitute a meeting, provided a quorum shall be present.
5
<PAGE>
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 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.
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<PAGE>
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
serve 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.
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<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.
8
<PAGE>
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 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,
10
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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 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
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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
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.
12
<PAGE>
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.
13
<TABLE>
EXHIBIT 11
COMPUTER SCIENCES CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(In thousands except per-share amounts)
<CAPTION>
Second Quarter Ended Six Months Ended
-------------------- --------------------
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $58,553 $14,006 $111,141 $59,283
========= ========= ========= =========
Shares:
Weighted average shares
outstanding 77,450 75,748 77,121 75,511
Common stock
equivalents 1,668 2,274 1,698 2,413
--------- --------- --------- ---------
Total for primary and
fully diluted 79,118 78,022 78,819 77,924
========= ========= ========= =========
Earnings Per Share:
Primary and fully
diluted* $ 0.74 $ 0.18 $ 1.41 $ 0.76
========= ========= ========= =========
</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> Apr-03-1998
<PERIOD-START> Mar-29-1997
<PERIOD-END> Sep-26-1997
<PERIOD-TYPE> 6-MOS
<CASH> 67,926
<SECURITIES> 0
<RECEIVABLES> 1,404,830
<ALLOWANCES> 44,783
<INVENTORY> 0
<CURRENT-ASSETS> 1,665,100
<PP&E> 1,828,619
<DEPRECIATION> 894,042
<TOTAL-ASSETS> 3,791,592
<CURRENT-LIABILITIES> 1,041,691
<BONDS> 736,954
<COMMON> 77,989
0
0
<OTHER-SE> 1,742,593
<TOTAL-LIABILITY-AND-EQUITY> 3,791,592
<SALES> 0
<TOTAL-REVENUES> 3,067,574
<CGS> 0
<TOTAL-COSTS> 2,399,042
<OTHER-EXPENSES> 471,600
<LOSS-PROVISION> 3,333
<INTEREST-EXPENSE> 23,166
<INCOME-PRETAX> (35,259)
<INCOME-TAX> (146,400)
<INCOME-CONTINUING> 111,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,141
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.41
</TABLE>
<TABLE>
EXHIBIT 28
COMPUTER SCIENCES CORPORATION
REVENUES BY MARKET SECTOR
(In millions)
<CAPTION>
Fiscal Period Ended % of Total
---------------------- ----------------------
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
SECOND QUARTER
Global commercial:
U.S. commercial $ 679.8 $ 524.1 43% 39%
Europe 408.9 347.4 26 25
International 102.8 91.6 7 7
--------- --------- --------- ---------
Total 1,191.5 963.1 76 71
U.S. federal government:
Department of Defense 253.2 253.4 16 19
NASA 80.7 75.1 5 5
Civil agencies 53.4 63.7 3 5
--------- --------- --------- ---------
Total 387.3 392.2 24 29
--------- --------- --------- ---------
Total revenues $1,578.8 $1,355.3 100% 100%
--------- --------- --------- ---------
SIX MONTHS
Global commercial:
U.S. commercial $1,284.6 $ 999.5 42% 37%
Europe 789.6 647.7 26 24
International 202.5 174.1 6 7
--------- --------- --------- ---------
Total 2,276.7 1,821.3 74 68
U.S. federal government:
Department of Defense 521.0 550.4 17 21
NASA 156.6 150.6 5 6
Civil agencies 113.3 136.8 4 5
--------- --------- --------- ---------
Total 790.9 837.8 26 32
--------- --------- --------- ---------
Total revenues $3,067.6 $2,659.1 100% 100%
========= ========= ========= =========
</TABLE>
</PAGE>
