Exhibit 10.4

 

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

 

KEY EXECUTIVE STOCK DEFERRAL PLAN

 

(Effective January 4, 1996)

 

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TABLE OF CONTENTS

 

ARTICLE

 

 

 

 

I

PURPOSE AND EFFECTIVE DATE

 

 

 

 

II

DEFINITIONS

 

 

 

 

 

2.1.

Account

 

 

2.2.

Beneficiary

 

 

2.3.

Board

 

 

2.4.

Committee

 

 

2.5.

Company

 

 

2.6.

Company Stock

 

 

2.7.

Deferral

 

 

2.8.

Deferral Authority

 

 

2.9.

Deferrable Amount(s)

 

 

2.10.

Director

 

 

2.11.

Distribution Date

 

 

2.12.

Employee

 

 

2.13.

Participant

 

 

2.14.

Plan

 

 

2.15.

Plan Year

 

 

2.16.

Retirement Date

 

 

2.17.

Share Unit

 

 

2.18

Termination of Affiliation

 

 

2.19.

Trust

 

 

2.20.

Trustee

 

 

 

 

 

III

PARTICIPATION

 

 

 

 

 

 

3.1.

Designation by Deferral Authority

 

 

3.2.

Deferral Elections

 

 

3.3.

Amounts Subject to Deferral

 

 

3.4.

Deferral Election Irrevocable

 

 

3.5.

Deferrals to be Held in Trust

 

 

 

 

 

IV

TRUST FUND

 

 

 

 

 

 

4.1.

Trust Fund Established

 

 

4.2.

Company, Committee and Trustee Not Responsible for Adequacy of Trust Fund

 

 

4.3.

Invasion of Trust by Creditors

 

 

4.4.

Trust Expenses

 

 

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V

ACCOUNTS

 

 

 

 

 

 

5.1.

Committee to Maintain Accounts

 

 

5.2.

Additional Accounting Procedures

 

 

5.3

Limitation on Benefits

 

 

5.4

Vesting of Account Balances

 

 

 

 

 

VI

RIGHTS IN ACQUIRED STOCK

 

 

 

 

 

 

6.1

Power To Vote Stock Rests With Trustee

 

 

6.2

Tender Offers

 

 

6.3

Dividends

 

 

 

 

 

VII

DISTRIBUTIONS

 

 

 

 

 

 

7.1.

Time of Commencement of Distribution

 

 

7.2.

Form of Distribution

 

 

7.3.

Method of Distribution

 

 

7.4.

Beneficiary Designation

 

 

7.5.

Distribution to Guardian

 

 

7.6.

Withholding of Taxes

 

 

 

 

 

VIII

ACCELERATION OF DISTRIBUTION

 

 

 

 

 

 

8.1.

Change in Control

 

 

8.2.

Hardship

 

 

 

 

 

IX

SOURCE OF PAYMENT

 

 

 

 

 

 

9.1.

No Direct Interest in Trust Assets

 

 

 

 

 

X

PLAN TERMINATION AND AMENDMENT

 

 

 

 

 

 

10.1.

Termination and Amendments

 

 

 

 

 

XI

PLAN ADMINISTRATION

 

 

 

 

 

 

11.1.

Committee

 

 

11.2.

Committee Powers

 

 

11.3.

Plan Expenses

 

 

11.4.

Reliance Upon Documents and Opinions

 

 

11.5.

Requirement of Proof

 

 

11.6.

Reliance on Committee Memorandum

 

 

11.7.

Limitation on Liability

 

 

11.8.

Indemnification

 

 

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XII

MISCELLANEOUS PROVISIONS

 

 

 

 

 

 

12.1.

Restrictions on Plan Interest

 

 

12.2.

No Enlargement of Employee Rights

 

 

12.3

Rights of Repurchase and First Refusal for the Company

 

 

12.4.

Mailing of Payments

 

 

12.5.

Inability to Locate Participant or Beneficiary

 

 

12.6.

Governing Law

 

 

12.7.

Illegality of Particular Provision

 

 

12.8.

Interpretation

 

 

12.9.

Tax Effects

 

 

12.10.

Receipt or Release

 

 

12.11

Records

 

 

12.12

Arbitration

 

 

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
KEY EXECUTIVE STOCK DEFERRAL PLAN

 

ARTICLE I

 

PURPOSE AND EFFECTIVE DATE

 

This Plan is an unfunded, deferred compensation arrangement established by
Science Applications International Corporation (“Company”) to provide selected
Employees and Directors with a method of supplementing their retirement income
by deferring a portion of their compensation and to make an indirect investment
in Company Stock through a “rabbi trust” vehicle.  The Plan is effective as of
January 4, 1996.

 

ARTICLE II

 

DEFINITIONS

 

Whenever the following terms are used in the Plan they shall have the meaning
specified below, unless the context indicates clearly to the contrary.

 

2.1.                              Account.  The Account maintained for
bookkeeping purposes by the Committee with respect to each Participant to
evidence the Participant’s Deferrals of Deferrable Amounts hereunder and to
record the number of Share Units credited as a result of such Deferrals.

 

2.2.                              Beneficiary.  The person or persons properly
designated by the Participant, in accordance with Section 7.3, to receive the
benefits provided herein upon death of the Participant.

 

2.3.                              Board.  The Board of Directors of Science
Applications International Corporation.

 

2.4.                              Committee.  The committee composed of such
members as shall be appointed from time to time by the Board to administer the
Plan.

 

2.5.                              Company.  Science Applications International
Corporation, a Delaware corporation, and any subsidiary thereof which has been
approved by the Deferral Authority for participation in this Plan by its
Employees.

 

2.6.                              Company Stock.  The Class A Common Stock of
Science Applications International Corporation.

 

2.7.                              Deferral.  The amount of Deferrable Amounts a
Participant has deferred in accordance with Section 3.2 or which is designated
as a Deferral under this Plan in connection with an Employee’s offer letter for
employment with the Company.

 

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2.8.                              Deferral Authority.  The individual or group
of individuals appointed by the Board to determine which Employees are eligible
to make Deferrals and to participate in the Plan.

 

2.9.                              Deferrable Amount(s).  The bonus, if any,
payable to an Employee or Director, in accordance with Company procedures under
the Company’s 1984 Bonus Compensation Plan, Directors’ fees or other payments as
determined by the Committee.  In no way does the adoption or operation of this
Plan obligate the Company to pay any bonus or continue any compensation program.

 

2.10                           Director.  A member of the Board, other than a
Director Emeritus, or a member of the Board of Directors of any subsidiary or
affiliate thereof which has been approved by the Deferral Authority for
participation in this Plan by its Employees or Directors.

 

2.11.                        Distribution Date.  The date when distributions
begin under the Plan, as specified in Section 7.1.

 

2.12.                        Employee.  A management or highly compensated
employee of the Company.

 

2.13.                        Participant.  An Employee or Director designated by
the Deferral Authority for participation in the Plan who timely files an
election to participate and makes or receives Deferrals hereunder.

 

2.14.                        Plan.  The Science Applications International
Corporation Key Executive Stock Deferral Plan, as set forth herein and as
amended from time to time.

 

2.15.                        Plan Year.  January 1 through December 31.

 

2.16.                        Retirement Date.  The date of an Employee’s
termination of employment from the Company or a Director’s ceasing to be an
active Director as determined by the Committee, on or after attaining age
59-1/2.

 

2.17.                        Share Unit.  The interest of a Participant in a
share of Company Stock held in the Participant’s Account in the Trust.

 

2.18.                        Termination of Affiliation.  Any termination of
employment with the Company by an Employee, as determined by the Committee,
whether by reason of death, disability, voluntary resignation, layoff, discharge
or otherwise, prior to attaining age 59-1/2 and, in the case of a Director,
ceasing to be an active Director prior to attaining age 59-1/2.  The Committee
shall have the discretion to establish rules and make determinations as to what
constitutes a Termination of Affiliation includes, without limitation, change of
status (e.g., part-time, consulting Employee, etc.) or leave of absence.

 

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2.19.                        Trust.  The Science Applications International
Corporation Key Executive Stock Deferral Trust established by the Company to
hold assets used by the Company to provide for benefits to Participants and
Beneficiaries under the Plan.

 

2.20.                        Trustee.  State Street Bank and Trust Company or
such successor trustee as shall be appointed pursuant to the Trust instrument.

 

ARTICLE III

 

PARTICIPATION

 

3.1.                              Designation by Deferral Authority.  The
Deferral Authority in its sole discretion shall designate those Employees or
Directors who are to be eligible to participate in the Plan with respect to
Deferrals for a particular Plan Year or with respect to a particular Deferrable
Amount or Amounts.  Designating an individual as eligible to participate in the
Plan for a particular Plan Year or with respect to a particular Deferrable
Amount shall not require the Deferral Authority to designate such individual for
any subsequent Plan Year or with respect to any subsequent Deferrable Amounts.

 

3.2.                              Deferral Elections.  An eligible Employee or
Director shall not become a Participant in the Plan unless and until he or she
has executed and delivered to the Committee a Deferral election, including any
forms or agreements as may be prescribed by the Committee, and the Committee
shall have accepted such Deferral election and/or additional forms or
agreements.  Participation in the Plan and any elections made by a Participant,
including Deferral elections and elections as to form of distribution under
Article VII, is conditioned on the Participant executing an agreement with the
Company, in a manner prescribed by the Committee, relating to the Company’s
right of repurchase of Company Stock and such other matters as the Committee
shall prescribe.  To initially participate in the Plan, the Employee or Director
must submit his or her Deferral election, including any forms or agreements
prescribed by the Committee, during the applicable Deferral election period
established by the Committee.  Beginning with the Deferral election made in the
2003 Plan Year for Deferrable Amounts received during calendar year 2004, the
Participant’s election shall be carried forward automatically to future Plan
Years for which the Participant is eligible to participate unless, during the
applicable Deferral election period for such future Plan Years, the Participant
elects to modify or cancel the prior election under procedures established by
the Committee.  In addition to amounts deferred pursuant to a Deferral election,
additional Deferrals may be credited to a Participant’s Account pursuant to the
terms of an offer letter with an Employee made at the time of commencement of
employment with the Company, as determined and approved by the Deferral
Authority in its sole discretion.

 

3.3.                              Amounts Subject to Deferral.  The total
Deferrals elected for a particular Plan Year may be in an amount up to a
specified percentage of Deferrable Amounts, such maximum percentage to be up to
one hundred percent (100%) as determined by the Deferral Authority.

 

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3.4.                              Deferral Election Irrevocable.  Any Deferral
election by a Participant for a particular Plan Year shall be irrevocable for
that Plan Year following the end of such Plan Year’s Deferral election period.

 

3.5.                              Deferrals to be Held in Trust.  Within a
reasonable period of time following the date on which a Deferrable Amount would
have been paid to a Participant but for the Deferral hereunder, the Company
shall contribute, to the Trust, Company Stock or money in an amount sufficient
to purchase shares of Company Stock equal in value (based on the then prevailing
Formula Price as determined under the Company’s Certificate of Incorporation) to
the Deferral.  The Trustee shall apply such contribution toward the purchase of
Company Stock in accordance with the directions of the Committee and the terms
of the Trust and the Participant shall be credited with the applicable number of
Share Units.

 

ARTICLE IV

 

TRUST FUND

 

4.1.                              Trust Fund Established.  The Company has
established the Trust pursuant to a trust agreement under which the Trustee will
hold and administer in trust all assets deposited with the Trustee in accordance
with the terms of this Plan.  The Board shall have the authority to select and
remove the Trustee to act under the Trust agreement, and to enter into new or
amended trust agreements as it deems advisable.

 

4.2.                              Company, Committee and Trustee Not Responsible
for Adequacy of Trust Fund.  Neither the Company, Board, Deferral Authority,
Committee nor Trustee shall be liable or responsible for the adequacy of the
Trust Fund to meet and discharge any or all payments and liabilities hereunder. 
All Plan benefits will be paid only from the Trust assets, and neither the
Company, Board, Deferral Authority, Committee nor Trustee shall have any duty or
liability to furnish the Trust with any funds, securities or other assets except
as expressly provided in Section 3.6 hereof.

 

4.3.                              Invasion of Trust by Creditors.  If assets of
the Trust should be reduced due to action of the Company’s creditors, as
provided in the Trust document, the Committee shall reduce each Account on a pro
rata basis to reflect such reduction in Trust assets, and the Company shall have
no obligation to replace such lost assets.

 

4.4.                              Trust Expenses.  Expenses of the Trust which
are not paid by the Company shall be applied to reduce each Account on a
pro rata basis.

 

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ARTICLE V

 

ACCOUNTS

 

5.1.                              Committee to Maintain Accounts.  The Committee
shall open and maintain a separate Account for each Participant to record the
Deferrals made by the Participant and the assets held in the Trust with respect
to such Participant as well as to allocate Trust expenses.

 

5.2.                              Additional Accounting Procedures.  The
Committee shall establish and may amend from time to time additional accounting
procedures for the purpose of making allocations, distributions, valuations and
adjustments to Accounts, and to allocate Trust earnings expenses and losses to
such accounts.  A Participant or Beneficiary shall have no contractual or other
right to have a particular accounting procedure or convention apply, or continue
to apply, and the Committee shall be free to alter any such procedure or
convention without notice or obligation to any Participant or Beneficiary.

 

5.3.                              Limitation on Benefits.  Benefits payable to a
Participant or Beneficiary under the Plan shall be limited to the vested Account
balance credited to such Participant or Beneficiary.

 

5.4.                              Vesting of Account Balances.  A Participant’s
Account balance shall be one hundred percent (100%) vested except with respect
to the portion of the Account balance attributable to vesting bonuses awarded
under the Company’s 1984 Bonus Compensation Plan.  Such portion of a
Participant’s Account balance shall become vested (and the nonvested portion
forfeited) at the time or times the bonus would have become vested (and the
nonvested portion forfeited) under the 1984 Bonus Compensation Plan and the
related form of award agreement in effect at the time the vesting bonus is
awarded, without regard to deferral under this Plan.  The shares of Company
Stock represented by such forfeited portion shall be returned to the Company or
reallocated in accordance with the Committee’s directions and the terms of the
Trust.

 

ARTICLE VI

 

RIGHTS IN ACQUIRED STOCK

 

6.1.                              Power to Vote Stock Rests With Trustee.  The
power to vote any stock held by the Trustee shall rest solely with the Trustee,
who shall vote such stock in the same proportion that the other shareholders
vote their shares of Company Stock.  For purposes of this Section 6.1, Company
Stock shall include both Class A and Class B Common Stock.

 

6.2.                              Tender Offers.  In the case of a tender offer
for the Company Stock, the Trustee shall tender the shares of Company Stock held
by the Trust only if more than fifty percent (50%) of the shares of Company
Stock held outside the Trust are tendered by the shareholders.

 

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6.3.                              Dividends.  All dividends on Company Stock
held in Trust shall be held by the Trustee and reinvested as directed by the
Committee.  The Committee shall allocate such dividends among the Accounts
pro rata to the shares allocated to each Account.

 

ARTICLE VII

 

DISTRIBUTIONS

 

7.1.                              Time of Commencement of Distribution.  Subject
to the acceleration provisions of Article VIII, the balance credited to a
Participant’s Account shall be distributed, or commence to be distributed, to
the Participant on the first to occur of the following events:

 

(a)                                  the Participant’s Retirement Date; or

 

(b)                                 the date of the Participant’s Termination of
Affiliation with the Company.

 

7.2.                              Form of Distribution.

 

Each distribution shall be made in the form of Company Stock unless the
Committee determines, in its sole discretion, that distribution of Company Stock
is impossible or creates adverse impact on the Company, in which case the
Committee may determine to make the distribution in cash.  A Participant shall
have no right to request a cash distribution.

 

7.3                                 Methods of Distribution.

 

(a)                                  Lump Sum on Death.  If a Participant dies
having an Account balance (regardless of whether distributions have begun under
the Plan), the remaining balance in the Participant’s Account shall be paid in
the form of a lump sum to the Beneficiary or Beneficiaries designated in
accordance with Section 7.4, or as otherwise provided in Sections 7.4 and 7.5,
within a reasonable period following the date when the Committee receives notice
of the Participant’s death.

 

(b)                                 Election for Retirement Distributions. 
Subject to the acceleration provisions in Article VIII, distributions made
following a Participant’s Retirement Date shall be made to the Participant in
accordance with a valid election made by the Participant under this
subsection (b).  The Participant may elect in a manner prescribed by the
Committee to have his or her Account paid in one of the following forms:

 

(1)                                  A lump sum payment of the entire vested
Account Balance; or

 

(2)                                  A series of annual payments over a five or
ten year period.  Each installment shall include one-fifth or one-tenth, as
applicable, of the number of shares of Company Stock distributable to the
Participant. Effective for new Participants making Deferral

 

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elections for the 2004 and subsequent Plan Years, a series of annual payments
over a fifteen year period shall be an available option for Retirement
distributions.  Each installment shall include one-fifteenth of the number of
shares of Company Stock distributable to the Participant.

 

Each election shall be made on forms specified by the Committee and shall be
irrevocable when made.  In the event Participant elects a lump sum payment as
described in Section 7.3(b)(1) and Participant has an Account balance
attributable to vesting bonuses under the Company’s 1984 Bonus Compensation Plan
that will continue vesting after such lump sum payment, additional distributions
shall be made within a reasonable period of time following each date Share Units
vest.  In the event Participant elects a series of annual payments as described
in Section 7.3(b)(2) and Participant has an Account balance attributable to
vesting bonuses under the Company’s 1984 Bonus Compensation Plan that will
continue vesting after any annual distribution of Participant’s Account balance
occurs, any Share Units that vest after a distribution will be added to the
Account balance and distributed ratably over the remaining series of annual
payments.

 

(c)                                  Other Distributions.  Distributions other
than those specified in (a) or (b) above shall be made as a lump sum within a
reasonable period of time following a Participant’s Termination of Affiliation.

 

(d)                                 Default Distribution.  If the Participant
fails to make a valid election as described in subsection (b), the vested
portion of Participant’s Account shall be distributed in full as a lump sum
payment within a reasonable period of time following the Distribution Date.  If
Participant has an Account balance attributable to vesting bonuses under the
Company’s 1984 Bonus Compensation Plan that will continue vesting after such
lump sum payment is made, additional distributions shall be made within a
reasonable period of time following each date Share Units vest.

 

7.4.                              Beneficiary Designation.

 

(a)                                  Upon forms provided by the Committee, each
Participant shall designate in writing the Beneficiary or Beneficiaries whom
such Participant desires to receive the benefits of this Plan, if any, payable
in the event of such Participant’s death.  A Participant may from time to time
change his or her designated Beneficiary or Beneficiaries without the consent of
such Beneficiary or Beneficiaries by filing a new designation in writing with
the Committee; provided, however, that if a married Participant wishes to
designate an individual other than his or her spouse as Beneficiary, such
designation shall not be effective unless consented to in writing by the
spouse.  Notwithstanding the foregoing, spousal consent shall not be necessary
if it is established to the satisfaction of the Committee that there is no
spouse of the Participant or that the required consent cannot be obtained
because the spouse cannot be located or is legally incompetent.  The Company may
rely upon the designation of Beneficiary or Beneficiaries last filed by the
Participant in accordance with the terms of this Plan.

 

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(b)                                 If the designated Beneficiary does not
survive the Participant, or if there is no valid Beneficiary designation,
amounts payable under the Plan shall be paid to the Participant’s spouse, or if
there is no surviving spouse, then to the duly appointed and currently acting
personal representative of the Participant’s estate.  If there is no personal
representative of the Participant’s estate duly appointed and acting in that
capacity within sixty (60) days after the Participant’s death, then all payments
due under the Plan shall be payable to the person or persons who can verify by
affidavit or court order to the satisfaction of the Committee that they are
legally entitled to receive the benefits specified hereunder pursuant to the
laws of intestate succession or other legal provision in effect at the
Participant’s death in the jurisdiction having authority over disposition of the
Participant’s estate.

 

7.5.                              Distribution to Guardian.  If the Committee
shall find that any person to whom any payment is payable under this Plan is
unable to care for his or her affairs because of illness or accident, or is a
minor, a payment due (unless a prior claim therefor shall have been made by a
duly appointed guardian or other legal representative) may be paid to the
spouse, a child, a parent, or a brother or sister, or to any custodian,
conservator or other fiduciary responsible for the management and control of
such person’s financial affairs in such manner and proportions as the Committee
may determine.  Any such payment shall, to the extent thereof, discharge of the
liabilities of the Company to the Participant or Beneficiary under this Plan.

 

7.6.                              Withholding of Taxes.  To the extent any
distribution is subject to withholding taxes, the Committee may require, as a
condition to the payment of such distribution, that the Participant or
Beneficiary who is eligible for the distribution:

 

(a)                                  make payment to the Company in the form of
a check for such withholding taxes; or

 

(b)                                 consent to the withholding of taxes from
such distribution by the Trustee, in which case the withheld amounts shall be
delivered to the Company which shall pay over the withheld taxes as required by
law.

 

The Committee may offer either or both of these options to the Participant or
Beneficiary in the Committee’s sole discretion.

 

ARTICLE VIII

 

ACCELERATION OF DISTRIBUTION

 

8.1.                              Change in Control.  All Accounts shall be
immediately distributed to the Participants to whom such Accounts belong, upon
the occurrence of a Change in Control (as hereinafter defined) of the Company. 
A Change in Control shall be deemed to occur upon any “person” (as defined in
Section 3(a)(9) of the United States Securities Exchange Act of 1934 (the “34
Act”)), other than the Company, any subsidiary or any employee benefit plan or
trust maintained by the Company or subsidiary becoming the beneficial owner (as
defined in Rule

 

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13d-3 under the 34 Act), directly or indirectly, of more than 25% of the Company
Stock outstanding at such time, without the prior approval of the Board.  For
purposes of the foregoing, a subsidiary is any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations, other
than the last corporation in such chain, owns at least fifty percent (50%) of
the total voting power in one of the other corporations in such chain.

 

8.2.                              Hardship.  Notwithstanding the provisions of
Section 7.1 and 7.3 hereof, a Participant shall be entitled to request a
hardship distribution of all or any portion of his or her Account.  A
Participant or legal representative of the Participant must make a written
request for a hardship distribution, stating the reasons such withdrawal is
necessary because of a financial hardship.  The Committee, in its sole
discretion, shall determine whether or not to grant the hardship distribution of
such Participant’s Account and, in so doing, may rely on the Participant’s
statements, and a hardship distribution may be approved without further
investigation unless the Committee has reason to believe such statements are
false.

 

ARTICLE IX

 

SOURCE OF PAYMENT

 

9.1.                              No Direct Interest in Trust Assets.  All
distributions hereunder shall be paid solely from the Trust.  No special or
separate funds shall be established and no other segregation of assets shall be
made to assure the payment of benefits hereunder.  A Participant shall have no
right, title, or interest whatever in or to any investments which the Company
may make through the Trust to meet its obligations hereunder.  Nothing contained
in this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create any kind of a fiduciary relationship between the Company and
a Participant or any other person.

 

ARTICLE X

 

PLAN TERMINATION AND AMENDMENT

 

10.1.                        Termination and Amendments.  The Plan shall
continue until all amounts credited to the Participants’ Accounts have been
distributed in accordance with the terms of the Plan.  Notwithstanding the
foregoing sentence, the Company retains the right to amend or terminate the Plan
for any reason, including but not limited to adverse changes in tax laws or the
bankruptcy, receivership or dissolution of the Company.  In the event of a Plan
termination, benefits will either be paid out when due under the terms of the
Plan or as soon as possible as determined by the Committee in its sole
discretion.  To the extent feasible, the Committee shall use its best efforts to
avoid adversely affecting the rights of any existing Participants in the Plan,
but the Committee shall be under no specific duty or obligation in this regard.

 

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ARTICLE XI

 

PLAN ADMINISTRATION

 

11.1.                        Committee.  The Plan shall be administered by the
Committee.  Subject to the provisions of the Plan and the authority granted to
the Deferral Authority, the Committee shall have exclusive power to determine
the manner and time of Deferrals and payment of benefits to the extent herein
provided and to exercise any other discretionary powers granted to the Committee
pursuant to the Plan.  The decisions or determinations by the Committee shall be
final and binding upon all parties, including shareholders, Participants,
Beneficiaries and other Employees.  The Committee shall have the authority to
interpret the Plan, to make factual findings and determinations, to adopt and
revise rules and regulations relating to the Plan and to make any other
determinations which it believes necessary or advisable for the administration
of the Plan.  The Committee’s discretion shall be as broad and unfettered as
permitted by law.

 

11.2.                        Committee Powers.  The Committee shall have all
powers necessary to supervise the administration of the Plan and control its
operations.  In addition to any powers and authority conferred on the Committee
elsewhere in the Plan or by law, the Committee shall have, by way of
illustration and not by way of limitation, the following powers and authority;

 

(a)                                  To designate agents to carry out
responsibilities relating to the Plan;

 

(b)                                 To employ such legal, actuarial, medical,
accounting, clerical and other assistance as it may deem appropriate in carrying
out the provisions of this Plan;

 

(c)                                  To administer, interpret, construe and
apply this Plan and to decide all questions which may arise or which may be
raised under this Plan by any Employee, Participant, Beneficiary or other person
whatsoever, including but not limited to all questions relating to eligibility
to participate in the Plan, and the amount of benefits to which any Participant
may be entitled;

 

(d)                                 To establish rules and procedures from time
to time for the conduct of its business and for the administration and
effectuation of its responsibilities under the Plan; and

 

(e)                                  To establish claims procedures, and to make
forms available for filing of such claims, and to provide the name of the person
or persons with whom such claims should be filed.  The Committee shall establish
procedures for action upon claims initially made and the communication of a
decision to the claimant promptly and, in any event, not later than sixty (60)
days after the date of the claim; the claim may be deemed by the claimant to
have been denied for purposes of further review described below in the event a
decision is not furnished to the claimant within such sixty (60) day period. 
Every claim for benefits which is denied shall be denied by written notice
setting forth in a manner calculated to be understood by the claimant (1) the
specific reason or reasons for the denial, (2) specific reference to any
provisions of this Plan on which denial is based, (3) description of any
additional material or information necessary for the claimant to perfect his
claim with an explanation of why such material or information is

 

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necessary, and (4) an explanation of the procedure for further reviewing the
denial of the claim under the Plan.  The Committee shall establish a procedure
for review of claim denials, such review to be undertaken by the Committee.  The
review given after denial of any claim shall be a full and fair review with the
claimant or his duly authorized representative having one hundred eighty (180)
days after receipt of denial of his claim to request such review, having the
right to review all pertinent documents and the right to submit issues and
comments in writing.  The Committee shall establish a procedure for issuance of
a decision by the Committee not later than sixty (60) days after receipt of a
request for review from a claimant unless special circumstances, such as the
need to hold a hearing, require a longer period of time, in which case a
decision shall be rendered as soon as possible but not later than one hundred
twenty (120) days after receipt of the claimant’s request for review.  The
decision on review shall be in writing and shall include specific reasons for
the decision written in a manner calculated to be understood by the claimant
with specific reference to any provisions of this Plan on which the decision is
based.

 

(f)                                    To perform or cause to be performed such
further acts as it may deem to be necessary, appropriate, or convenient in the
efficient administration of the Plan.

 

Any action taken in good faith by the Committee in the exercise of authority
conferred upon it by this Plan shall be conclusive and binding upon the
Participants and their beneficiaries.  All discretionary powers conferred upon
the Committee shall be absolute.

 

11.3.                        Plan Expenses.  Members of the Committee shall
serve as such without compensation from the Plan, but may receive compensation
from the Company for so serving.  All Plan administration expenses shall be
borne by the Company or the Trust as determined by the Committee in its sole
discretion.

 

11.4.                        Reliance Upon Documents and Opinions.  The members
of the Committee, the Deferral Committee, the Board, and the Company shall be
entitled to rely upon any tables, valuations, computations, estimates,
certificates, opinions and reports furnished by any consultant, or firm or
corporation which employs one or more consultants or advisors.  The Committee
may, but is not required to, rely upon all records of the Company with respect
to any matter or thing whatsoever, and may likewise treat such records as
conclusive with respect to all Employees, Participants, Beneficiaries and any
other persons whomsoever, except as otherwise provided by law.

 

11.5.                        Requirement of Proof.  The Committee, the Deferral
Committee, the Board, or the Company may require satisfactory proof of any
matter under this Plan from or with respect to any Employee, director,
consultant, Participant or Beneficiary, and no such person shall acquire any
rights or be entitled to receive any benefits under this Plan until such proof
shall be furnished as so required.

 

11.6.                        Reliance on Committee Memorandum.  Any person
dealing with the Committee may rely on and shall be fully protected in relying
on a certificate or memorandum in writing signed by any Committee member so
authorized, or by a quorum of the members of the

 

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Committee, as constituted as of the date of such certificate or memorandum, as
evidence of any action taken or resolution adopted by the Committee.

 

11.7.                        Limitation on Liability.  No employee or director
of the Company shall be subject to any liability by reason of or arising from
his or her participation in the establishment or administration or operation of
the Plan unless he or she acts fraudulently or in bad faith.

 

11.8.                        Indemnification.

 

(a)                                  To the extent permitted by law, the Company
shall indemnify each member of the Deferral Authority, the Committee, and any
other employee or director of the Company who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed
proceeding, whether civil, criminal, administrative, or investigative, by reason
of his or her conduct in the performance in connection with the establishment or
administration of the Plan or any amendment or termination of the Plan.

 

(b)                                 This indemnification shall apply against
expenses including, without limitation, attorneys fees and any expenses of
establishing a right to indemnification hereunder, judgments, fines, settlements
and other amounts actually and reasonably incurred in connection with such
proceeding, except in relation to matters as to which he or she has acted
fraudulently or in bad faith in the performance of such duties.

 

(c)                                  The termination of any proceeding by
judgment, order, settlement, conviction, upon a plea of nolo contendere or its
equivalent shall not, in and of itself, create a presumption that the person
acted fraudulently or in bad faith in the performance of his or her duties.

 

(d)                                 Expenses incurred in defending any such
proceeding may be advanced by the Company prior to the final disposition of such
proceeding, upon receipt of an undertaking by or on behalf of the recipient to
repay such amount, unless it shall be determined ultimately that the recipient
is entitled to be indemnified as authorized in this Section 11.8.

 

(e)  The right of indemnification set forth in this Section 11.8 shall be in
addition to any other right to which any Committee member or other person may be
entitled as a matter of law, by corporate bylaws or otherwise.

 

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ARTICLE XII

 

MISCELLANEOUS PROVISIONS

 

12.1.                        Restrictions on Plan Interest.

 

(a)                                  A Participant’s interest in this Plan shall
be limited to his or her Account in the Trust and he or she shall have no other
interest in any assets of the Company nor any right as against the Company,
Deferral Authority or Committee for payment of benefits under this Plan.

 

(b)                                 None of the benefits, payments, proceeds,
claims or rights hereunder of any Participant or Beneficiary shall be subject to
any claim of any creditor of such Participant or Beneficiary and in particular
the same shall not be subject to attachment, garnishment, or other legal process
by any creditor of such Participant or Beneficiary.

 

(c)                                  A Participant or Beneficiary shall not have
any right to alienate, anticipate, commute, pledge, encumber, or assign any of
the benefits or payments or proceeds which he or she may expect to receive,
contingently or otherwise, under the Plan.

 

(d)                                 A Participant’s and Beneficiary’s interest
in this Plan and his or her Account in the Trust are subject to the claims of
the Company’s creditors as provided in the Trust.  Each Participant and
Beneficiary shall, however, be considered a general creditor of the Company with
respect to the assets held in his or her Account in the Trust, so that if the
Company should become insolvent, the Participant or Beneficiary will have a
claim against the Trust assets equal to that of the Company’s other general
creditors (regardless of whether such assets are removed from the trust by a
trustee in bankruptcy).

 

(e)                                  Whenever a provision of this Plan restricts
or limits a Participant or a Participant’s Account, benefit or distribution,
such limitation shall also apply to a Beneficiary unless otherwise specified.

 

12.2.                        No Enlargement of Employee Rights.

 

(a)                                  This Plan is strictly a voluntary
undertaking on the part of the Company and shall not be deemed to constitute a
contract between the Company and any Employee or Director, or be consideration
for, or an inducement to, or a condition of, the employment of any Employee or
affiliation of any Director.

 

(b)                                 The employment of any Employee is not for
any specified term and may be terminated by any Employee or by the Company at
any time, for any reason, with or without cause.  Nothing contained in the Plan
shall be deemed to give any Employee the right to be retained in the employ of
the Company, to constitute any promise or commitment by the Company regarding
future positions, future work assignments, future compensation or any other term
or condition of employment or to interfere with the right of the Company to
discharge or retire any Employee at any time.

 

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(c)                                  No person shall have any right to any
benefits under this Plan, except to the extent expressly provided herein.

 

12.3.                        Rights of Repurchase and First Refusal for the
Company.  Any Company Stock distributed from the Plan shall be subject to a
right of repurchase and right of first refusal by the Company, as well as any
conditions, limitations or restrictions contained in an agreement specified in
Section 3.2.  The terms and conditions of the right of repurchase and right of
first refusal shall be in addition to those applied to Company Stock by the
Restated Certificate of Incorporation of Science Applications International
Corporation, as amended.

 

12.4.                        Mailing of Payments.  All payments under the Plan
shall be delivered in person or mailed to the last address of the Participant
(or, in the case of the death of the Participant to that of any other person
entitled to such payments under the terms of the Plan).  Each Participant shall
be responsible for furnishing the Committee with his or her correct current
address and the correct current name and address of his or her Beneficiary.

 

12.5.                        Inability to Locate Participant or Beneficiary.  In
the event that the Committee is unable to locate a Participant or Beneficiary to
whom benefits are payable hereunder after mailing a notice to the Participant’s
or Beneficiary’s last known address, and such inability lasts for a period of
three (3) years, then any remaining benefits payable hereunder shall be
forfeited to the Company and no Participant or Beneficiary shall have any right
to further benefits from the Plan, even if subsequently located.

 

12.6.                        Governing Law.  All legal questions pertaining to
the Plan shall be determined in accordance with the laws of California,
excluding its rules governing conflicts of laws.

 

12.7.                        Illegality of Particular Provision.  If any
particular provision of this Plan shall be found to be illegal or unenforceable,
such provision shall not affect the other provisions thereof, but the Plan shall
be construed in all respect as if such invalid provision were omitted.

 

12.8.                        Interpretation.  Section headings are for
convenient reference only and shall not be deemed to be part of the substance of
this instrument or in any way to enlarge or limit the contents of any article or
section.

 

12.9.                        Tax Effects.  The Company makes no representations
or warranties as to the tax consequences to a Participant or to a Participant’s
Beneficiary from Deferrals hereunder or the subsequent receipt of any benefits
as a result thereof.  Each Participant must rely solely on his or her own tax
advisor with respect to the tax consequences arising from the Deferrals or the
receipt of benefits hereunder, or from any other related transaction.

 

12.10.                  Receipt or Release.  Any payment to any Participant or
Beneficiary in accordance with the provisions of this Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Committee and the
Company, and the Committee may require such Participant or

 

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Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

 

12.11.                  Records.  The records of the Company with respect to the
Plan shall be conclusive on all Participants, Beneficiaries, and all other
persons whomsoever.

 

12.12.                  Arbitration.  The Committee’s written decision on review
of a denial of benefits, shall be final, conclusive and binding on all
Participants, Beneficiaries and Employees of the Company.  Notwithstanding the
foregoing, any person disputing such a written decision shall submit such
dispute to binding Arbitration pursuant to the rules of the American Arbitration
Association, to be held in San Diego County.  The losing party in such
arbitration proceedings shall bear the costs of arbitration, and each party
shall bear its own attorneys’ fees.

 

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