Exhibit 10.4

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

2013 EQUITY INCENTIVE PLAN

NONSTATUTORY STOCK OPTION AGREEMENT

 

 

BY ACCEPTING THE OPTION DESCRIBED IN THIS AGREEMENT, YOU

VOLUNTARILY AGREE TO ALL OF THE TERMS AND CONDITIONS SET FORTH

IN THIS AGREEMENT AND IN THE PLAN.

 

Science Applications International Corporation, a Delaware corporation (the
“Company”), hereby grants an option (the “Option”) to purchase shares of its
Common Stock, $0.0001 par value per share, (“Stock”), to the participant named
in the Grant Summary (as defined below) (“Optionee”). Certain specific details
of the award of this Option, including Option Shares, Option Price and Grant
Date, may be found in the Grant Summary and are hereby incorporated by reference
into this Agreement. The terms and conditions of the Option are set forth in
this Agreement and in the Company’s 2013 Equity Incentive Plan, as amended (the
“Plan”).

1.         DEFINITIONS. The following terms shall have the meanings as defined
below. Capitalized terms used herein and not defined shall have the meanings
attributed to them in the Plan.

“Administrator” shall have the meaning as defined in the Plan.

“Affiliate” shall mean a “parent” or “subsidiary” (as each is defined in
Section 424 of the Code) of the Company and any other entity that the Board or
Committee designates as an “Affiliate” for purposes of this Plan.

“Cause” shall have the meaning as defined in the Plan.

“Committee” shall have the meaning as defined in the Plan.

“Executive Officer” shall mean an officer of the Company designated as such for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

“Expiration Date” shall have the meaning as defined in Section 3 below.

“Fair Market Value” shall have the meaning as defined in the Plan.

“Grant Date” shall mean the date of the award of this Option as set forth in the
Grant Summary.

“Grant Summary” shall mean the summary of this award as reflected in the
electronic stock plan award administration system maintained by the Company or
its designee that contains a link to this Agreement (which summary information
is set forth in the appropriate records of the Company authorizing such award).

 

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“Option Price” shall mean the exercise price per Option Share applicable to this
Option set forth in the Grant Summary.

“Option Shares” shall mean the number of shares of Stock issuable upon exercise
of the Option as set forth in the Grant Summary.

“Permanent Disability” shall mean the status of disability determined
conclusively by the Committee based upon certification of disability by the
Social Security Administration or upon such other proof as the Committee may
require, effective upon receipt of such certification or other proof by the
Committee.

2.         GRANT OF OPTION; NUMBER OF SHARES; OPTION PRICE. The Company hereby
grants to Optionee an Option to purchase all or any part of the Option Shares at
the Option Price.

3.         TERM OF OPTION. This Option shall terminate upon the earlier to occur
of: (i) seven (7) years from the Grant Date (the “Expiration Date”); or (ii) the
expiration of the applicable period following the occurrence of any of the
events specified in Section 5 hereof. The Company shall have no obligation to
provide Optionee with notice of termination or expiration of this Option.

4.         EXERCISE OF OPTION.

4.1      General Schedule of Vesting and Exercisability. Subject to the terms of
the Plan and this Agreement, this Option shall vest and become exercisable as to
100% of the Option Shares on the third-year anniversary of the Grant Date.
Optionee may purchase all, or from time to time, any part of the maximum number
of Option Shares which are then exercisable. Except as set forth in Section 4.4
below, this Option shall be exercisable only by Optionee.

4.2      General Terms of Exercise. Subject to the terms of the Plan and this
Agreement, the Option shall be exercised pursuant to procedures established by
the Committee, which may include electronic or voice procedures as may be
specified by the Committee and which may include a requirement to acknowledge
this Agreement prior to exercise. Acceptable forms and methods of payment to
exercise the Option may include (i) by cashier’s check, money order or wire
transfer; (ii) by a cashless exercise procedure; or (iii) by tendering shares of
Common Stock of the Company acceptable to the Committee valued at their Fair
Market Value as of the date of exercise.

4.3      Treatment of Death or Permanent Disability. Notwithstanding anything to
the contrary herein, if Optionee is an employee, director or consultant of the
Company or an Affiliate and ceases to be affiliated with the Company or any
Affiliate as a result of Optionee’s death or Permanent Disability, any unvested
portion of this Option shall accelerate and become fully exercisable. Following
Optionee’s death, this Option may be exercised only by the executor or
administrator of the Optionee’s estate or, if there is none, the person entitled
to exercise the Option under Optionee’s will or the laws of descent and
distribution. Following

 

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Optionee’s termination of affiliation as a result of Optionee’s Permanent
Disability, if a guardian or conservator has been appointed to act for Optionee
and been granted this authority as part of that appointment, that guardian or
conservator may exercise this Option on behalf of Optionee.

4.4      Treatment of Leave of Absence. If Optionee is an employee of the
Company or an Affiliate and is on a leave of absence pursuant to the terms of
the Company’s Administrative Policy No. SH-1 “Working Hours and Absences” or
similar policy maintained by an Affiliate, as such policies may be revised from
time to time, Optionee shall not, during the period of such absence be deemed,
by virtue of such absence alone, to have terminated Optionee’s employment.
Optionee shall continue to vest in this Option during any approved medical or
military leave of absence. Medical leave shall include family or medical leaves,
workers’ compensation leave, or pregnancy disability leave. For all other leaves
of absence, this Option will vest only during active employment and shall not
vest during a leave of absence, unless required under local law. However, if
Optionee returns to active employment with the Company or an Affiliate following
such a leave, this Option will be construed to vest as if there had been no
break in active employment. During any leave of absence, Optionee shall have the
right to exercise the vested portion of this Option provided that such exercise
occurs prior to the Expiration Date.

5.         TERMINATION OF OPTION; EVENTS IMPACTING ABILITY TO EXERCISE OPTION.

5.1      Termination of Affiliation. If Optionee is an employee, director or
consultant of the Company or an Affiliate and ceases to be affiliated with the
Company or an Affiliate for any reason other than death, Permanent Disability or
Cause, Optionee may exercise this Option within the ninety (90) day period
following such cessation of affiliation, but only to the extent that this Option
was exercisable at the date of such cessation of affiliation and Optionee’s
rights to exercise the Option have not been suspended as of the date of such
cessation of affiliation. This Option shall terminate on the earlier to occur of
the expiration of such ninety (90) day period or the Expiration Date.

5.2      Termination for Cause. If Optionee is an employee, director or
consultant of the Company or an Affiliate and is terminated for Cause as
determined by the Administrator of the Plan, this Option and all of Optionee’s
rights with respect thereto shall immediately terminate on the date of such
termination.

5.3      Termination for Breach of Obligation. The Company shall have the right
to terminate the unvested portion of this Option at any time if Optionee
violates the terms of his or her inventions, copyright and confidentiality
agreement with the Company or an Affiliate or breaches his or her other
contractual or legal obligations to the Company or an Affiliate, including the
non-solicitation obligations set forth in Section 12 of this Agreement (“Breach
of Obligation”).

5.4      Termination of Unexercised Options. If any portion of the Option is not
exercised by the earlier of: (i) the end of the applicable period specified in
Sections 5.1, 5.2 or 5.3 or (ii) the Expiration Date, any such unexercised
portion and all of Optionee’s rights with respect thereto shall terminate. 

 

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6.         TAX WITHHOLDING. If the Company or any Affiliate is required to
withhold any federal, state, local or other taxes upon the exercise of this
Option, Optionee shall remit an amount sufficient to satisfy any applicable tax
withholding requirement in a form of payment satisfactory to the Administrator
or the Committee, which may include by cashier’s check, money order or wire
transfer or by the Company’s withholding Stock issued upon exercise of this
Option to pay the required withholding. If the Company withholds Stock, the Fair
Market Value of the Stock withheld, as determined as of the date of withholding,
shall not exceed the minimum rates required by law.

7.         RESTRICTIONS UNDER SECURITIES LAW. All shares of Stock covered by
this Agreement are subject to any restrictions which may be imposed under
applicable state and federal securities laws and are subject to obtaining all
necessary consents which may be required by, or any condition which may be
imposed in accordance with, applicable state and federal securities laws or
regulations.

8.         INCORPORATION OF PLAN. The Option granted hereby is granted pursuant
to the Plan, all the terms and conditions of which are hereby made a part hereof
and are incorporated herein by reference. In the event of any inconsistency
between the terms and conditions contained herein and those set forth in the
Plan, the terms and conditions of the Plan shall prevail.

9.         RECOUPMENT OF AWARDS. The Human Resources and Compensation Committee
of the Company’s Board of Directors intends to adopt a recoupment policy (the
“Policy”), that may require members of senior management to return incentive
compensation if there is a material restatement of the financial results upon
which the compensation was originally based. By accepting the Option granted
hereunder, Optionee expressly agrees to be bound by the Policy when adopted
without payment of any additional consideration by Optionee. The Policy will
also provide for recovery of incentive compensation from any employee involved
in fraud or intentional misconduct, whether or not it results in a restatement
of the Company’s financial results. Optionee acknowledges and agrees that the
Policy will be treated as though it had been incorporated into this Agreement ab
initio and that any payments or issuances of Stock with respect to the Option
will be subject to recoupment pursuant to the Policy, including any amendments
to the Policy and any recoupment obligations imposed by the Human Resources and
Compensation Committee or by applicable law or regulation.

10.        EMPLOYMENT AT WILL.

10.1      If Optionee is an employee or consultant of the Company or an
Affiliate, such employment or affiliation is not for any specified term and may
be terminated by employee or by the Company or an Affiliate at any time, for any
reason, with or without cause and with or without notice. Nothing in this
Agreement (including, but not limited to, the right to exercise this Option
pursuant to the schedule set forth in Section 4 herein), the Plan or any
covenant of good faith and fair dealing that may be found implicit in this
Agreement or the Plan shall (i) confer upon Optionee any right to continue in
the employ of, or affiliation with, the Company or an Affiliate, (ii) constitute
any promise or commitment by the Company or an Affiliate regarding the fact or
nature of future positions, future work assignments, future compensation or any
other term or condition of employment or affiliation, (iii) confer any right or
benefit under this Agreement or the Plan unless such right or benefit has
specifically accrued under the terms of this Agreement or Plan or (iv) deprive
the Company of the right to terminate Optionee at will and without regard to any
future vesting opportunity that Optionee may have.

 

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10.2      Optionee acknowledges and agrees that the right to exercise this
Option pursuant to the schedule set forth in Section 4 is earned only by
continuing as an employee or consultant at the will of the Company or as a
director (not through the act of being hired, being granted this Option or any
other Option, award or benefit or acquiring shares hereunder) and that the
Company has the right to reorganize, sell, spin-out or otherwise restructure one
or more of its businesses or Affiliates at any time or from time to time, as it
deems appropriate (a “reorganization”). Optionee acknowledges and agrees that
such a reorganization could result in the termination of Optionee’s relationship
as an employee or consultant to the Company or an Affiliate, or the termination
of Affiliate status of Optionee’s employer and the loss of benefits available to
Optionee under this Agreement, including but not limited to, the termination of
the right to exercise the Options under this Agreement.

11.         COPIES OF PLAN AND OTHER MATERIALS. Optionee acknowledges that
Optionee has received copies of the Plan and the Plan prospectus from the
Company and agrees to receive stockholder information, including copies of any
annual report, proxy statement and periodic report, electronically from the
Company. Optionee acknowledges that copies of the Plan, Plan prospectus, Plan
information and stockholder information are also available upon written or
telephonic request to the Company. Optionee acknowledges that copies of the
Company’s policies referenced in this Agreement, including the Policy when
adopted, are or will be available on ISSAIC, the Company’s intranet, and are or
will be also available upon written or telephonic request to the Company.

12.         NON-SOLICITATION.

12.1    Solicitation of Employees. Optionee agrees that, both while employed by
the Company or an Affiliate and for one year afterward, Optionee will not
solicit or attempt to solicit any employee of the Company or an Affiliate to
leave his or her employment or to violate the terms of any agreement or
understanding that employee may have with the Company or an Affiliate. The
foregoing obligations apply to both the Optionee’s direct and indirect actions,
and apply to actions intended to benefit Optionee or any other person, business
or entity.

12.2    Solicitation of Customers. Optionee agrees that, for one year after
termination of employment with the Company or an Affiliate, Optionee will not
participate in any solicitation of any customer or prospective customer of the
Company or an Affiliate concerning any business that:

 

     a) involves the same programs or projects for that customer in which
Optionee was personally and substantially involved during the 12 months prior to
termination of employment; or

 

     b) has been, at any time during the 12 months prior to termination of
employment, the subject of any bid, offer or proposal activity by the Company or
an Affiliate in respect of that customer or prospective customer, or any
negotiations or discussions about the possible performance of services by the
Company or an Affiliate to that customer or potential customer, in which
Optionee was personally and substantially involved.

 

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In the case of a governmental, regulatory or administrative agency, commission,
department or other governmental authority, the customer or prospective customer
will be determined by reference to the specific program offices or activities
for which the Company or an Affiliate provides (or may reasonably provide) goods
or services.

12.3    Remedies. Optionee acknowledges and agrees that a breach of any of the
promises or agreements contained in this Section 12 will result in immediate,
irreparable and continuing damage to the Company for which there is no adequate
remedy at law, and the Company or an Affiliate will be entitled to injunctive
relief, a decree for specific performance, and other relief as may be proper,
including money damages.

13.         MISCELLANEOUS. This Agreement contains the entire agreement between
the parties with respect to its subject matter, provided, however, that if
Optionee and the Company are parties to an existing written agreement addressing
the subject matter of Section 12, such agreement shall control with respect to
such subject matter until the termination thereof, at which time Section 12
shall control. This Agreement shall be binding upon and shall inure to the
benefit of the respective parties, the successors and assigns of the Company,
and the heirs, legatees, and personal representatives of Optionee. The parties
hereby agree that should any portion of this Agreement be judicially held to be
invalid, unenforceable, or void, such portion shall be construed by limiting and
reducing it, so as to be enforceable to the maximum extent compatible with the
applicable law as is then in effect.

14.         ACKNOWLEDGMENT. Optionee acknowledges that the Option constitutes
full and adequate consideration for Optionee’s obligations under this Agreement,
accepting the Option constitutes an unequivocal acceptance of this Agreement and
any attempted modifications or deletions will have no force or effect upon the
Company’s right to enforce the terms and conditions stated herein.

15.         GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware without reference
to such state’s principles of conflict of laws.

16.         FEDERAL TAXES. The Option is not intended to be treated as an
“incentive stock option,” as such term is defined in Section 422 of the Internal
Revenue Code of 1986, as amended. Optionee should consult his or her personal
tax advisor for more information concerning the tax treatment of the Option.

By accepting the Option, you agree to all of the terms and conditions set forth
above and in the Plan.

 

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