Exhibit 10.3


 


SCIENCE
APPLICATIONS INTERNATIONAL CORPORATION


 


1999 STOCK INCENTIVE PLAN


COVER SHEET TO


NON-QUALIFIED STOCK OPTION
AGREEMENT AND CONFIRMATION


 




	
  Name

  	
  Account Number:

  	
   

  
	
  Address

  	
  Option Number:

  	
   

  
	
  Address

  	
  Option Shares:

  	
   

  
	
   

  	
  Option Price:

  	
   

  
	
   

  	
  Grant Date:

  	
   

  
	
   

  	
  Expiration Date:

  	
   

  






 


Science Applications International Corporation, a Delaware corporation
(the “Company”), hereby grants an Option to purchase shares of its Class A
Common Stock, $.01 par value per share (“Stock”) to the undersigned
(“Optionee”).  This grant is specifically
conditioned upon the Optionee executing and returning this Cover Sheet to the
Stock Programs Department of the Company within 120 days from the Grant
Date.  The terms and conditions of the
Option are set forth in this Cover Sheet, in the attached Agreement and in the
Company’s 1999 Stock Incentive Plan (the “Plan”).


 


BY
SIGNING THIS COVER SHEET, YOU VOLUNTARILY AGREE TO ALL OF THE TERMS


AND
CONDITIONS SET FORTH IN THE ATTACHED AGREEMENT AND IN THE PLAN, A


COPY OF
WHICH IS ALSO ATTACHED.


 


THIS
COVER SHEET MUST BE SIGNED AND RETURNED WITHIN 120 DAYS OR THE


OPTION
WILL BE FORFEITED AND THE AGREEMENT WILL BE NULL AND VOID.


 


PLEASE SIGN AND RETURN THIS COPY TO THE STOCK PROGRAMS DEPARTMENT.  A COPY WILL BE RETURNED TO YOU UPON RECEIPT OF
THIS COVER SHEET.


 


 


	
  Optionee 

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  	
  (Date)

  
					



 





















 


SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION


 


1999 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT AND CONFIRMATION


 


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.


 


“Affiliate” shall mean:  (i) any Subsidiary; and (ii) any other entity
in which the Company has an equity interest or significant business
relationship and which has been designated as an “Affiliate” by the Committee
for purposes of the Plan.


 


“Article Fourth” shall mean Article Fourth of the
Company’s Restated Certificate of Incorporation, as amended.


 


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


 


“Cover Sheet” shall mean the cover sheet to this Agreement,
which is the first page of this Agreement.


 


“Executive Officer” shall mean an executive officer of the
Company named pursuant to Section 16 of the Exchange Act of 1934, as amended.


 


“Exercise Price” shall mean the option price per Option Share
set forth on the Cover Sheet.


 


“Medical
Leave” shall mean a leave of absence for medical reasons which shall
begin after ninety-one (91) consecutive calendar days of total disability leave
and shall remain in effect until the earlier of a release by the attending
physician for Optionee to return to work or until the termination of
employment.


 


“Normal Retirement” shall mean a retirement
or an early retirement under the terms of a retirement or pension plan
maintained by the Company or an Affiliate and in which Optionee is a
participant.


 


“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.


 


“Plan” shall mean the Company’s 1999 Stock
Incentive Plan.


 


“Option Shares” shall mean the number of
shares of Stock set forth on the Cover Sheet.


 


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“Special Retirement” shall mean any of the following:  (i) when Optionee retires after reaching age
591⁄2 and has at least ten (10) years of service with the Company or an Affiliate;
(ii) any time after age 591⁄2 when Optionee’s age plus years of service with the
Company or an Affiliate equals at least 70; or (iii) if Optionee is a director of
the Company or an Executive Officer at retirement, when Optionee retires after
reaching the applicable mandatory retirement age, regardless of years of
service with the Company.


 


“Stock” shall mean the Class A common stock of the Company.


 


“Subsidiary”
means any company during
any period in which it is a “subsidiary corporation” as that term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, or any
successor thereto, with respect to the Company.


 


“Years of Service” shall be construed in accordance with the
use of such term in the Company’s Administrative Policy SH-2, as such policy
may be revised from time to time.


 


2.               GRANT OF OPTION; NUMBER OF SHARES; EXERCISE PRICE.  Subject to Optionee executing and
returning the Cover Sheet of this Agreement to the Company’s Stock Programs
Department within 120 days from the Grant Date, the Company hereby grants to
Optionee an Option to purchase all or any part of the Option Shares at the Exercise
Price.  In the event Optionee fails to
execute and return the Cover Sheet as provided above, the Option will be forfeited
and this Agreement shall be null and void.


 


3.               TERM OF OPTION.  This
Option shall terminate upon the earlier to occur of:  (i) five (5) years from the Grant 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 Exercisability.  Subject to the terms of the Plan and this
Agreement, the right to exercise this Option shall vest in accordance with the
following schedule:


 


a)              The
Option may not be exercised in whole or in part at any time prior to the first
year anniversary of the Grant Date.


 


b)             The
Option may be exercised as to 20% of the Option Shares after the first-year
anniversary of the Grant Date.


 


c)              The
Option may be exercised as to an additional 20% of the Option Shares after the
second-year anniversary of the Grant Date.


 


d)             The
Option may be exercised as to an additional 20% of the Option Shares after the
third-year anniversary of the Grant Date.


 


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e)              The
Option may be exercised as to an additional 40% of the Option Shares after the
fourth-year anniversary of the Grant Date.


 


The
rights to exercise the Option, as specified in the preceding schedule, shall be
cumulative.  Optionee may purchase all,
or from time to time, any part of the maximum number of Option Shares which are
then exercisable, but in no case may Optionee exercise the Option in regard to
any fraction of a share.  Except as set
forth in Section 5.2 below, this Option shall be exercisable only by
Optionee.


 


4.2                     Treatment of Special Retirement.  In the event of a Special Retirement of
an Optionee who is a director of the Company or an Executive Officer, the right
to exercise this Option shall continue to vest in accordance with the schedule set
forth above.  In the event of a Special
Retirement of an Optionee who is not a director of the Company or an Executive
Officer, the right to exercise this Option shall continue to vest in accordance
with the schedule set forth above, but only if Optionee has held this
Option at least twelve (12) months prior to the date of such Special Retirement.  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 breaches his or her other contractual or legal obligations to the
Company.


 


4.3                     Treatment of Death or Permanent Disability.  Notwithstanding anything to the contrary
herein, any unvested portion of this Option shall accelerate and become fully
exercisable upon the death or Permanent Disability of Optionee during the term
of this Option, whether such death or Permanent Disability occurs following a Special
Retirement or while Optionee is affiliated with the Company or any of its Affiliates.


 


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 “Unpaid
Leave” 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.  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.


 


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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 for any reason other than death, Normal Retirement,
Special Retirement, Permanent Disability or Change in Affiliate Status (as
described in Section 5.5), Optionee may exercise this Option within the
thirty (30) 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 thirty (30) day period or the expiration of
this Option.


 


5.2                     Death.  If
Optionee is an employee, director or consultant of the Company or an Affiliate
and ceases to be affiliated as a result of Optionee’s death, or if Optionee’s
death occurs following a Special Retirement, any unvested portion of this
Option shall accelerate and become fully exercisable.  This Option may be exercised within the one
(1) year period following such death, and then only by the beneficiary
designated by Optionee or by the person or persons to whom Optionee’s rights
under this Option shall pass by Optionee’s will or by the laws of descent and
distribution.  This Option shall
terminate on the earlier to occur of the expiration of such one (1) year period
or the expiration of this Option.


 


5.3                     Normal Retirement.  If
Optionee is an employee, director or consultant of the Company or an Affiliate
and ceases to be affiliated as a result of Optionee’s Normal Retirement, 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.  This Option shall terminate on the earlier to
occur of the expiration of such ninety (90) day period or the expiration of
this Option.


 


5.4                     Permanent Disability.  If
Optionee is an employee, director or consultant of the Company or an Affiliate
and ceases to be affiliated as a result of Optionee’s Permanent Disability or
if Optionee’s Permanent Disability occurs following a Special Retirement, any
unvested portion of this Option shall accelerate and become fully
exercisable.  Optionee may exercise this
Option within the ninety (90) day period following 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 of this Option.


 


5.5                     Change in Affiliate Status.  If
Optionee is an employee, director or consultant of an Affiliate and such entity
ceases to be an Affiliate as defined in the Plan, whether by action of the
Committee or otherwise, Optionee may exercise this Option within the thirty
(30) day period following the mailing of notice of such change in Affiliate
status to Optionee at Optionee’s address of record with the Company’s Stock
Programs Department, but only to the extent that this Option was exercisable at
the date of such


 


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determination.  This Option shall terminate on the earlier to
occur of the expiration of such thirty (30) day period or the expiration of
this Option.


 


5.6                     Breach of Obligation During
Special Retirement.  If
the Company terminates the unvested portion of this Option during a Special Retirement
as a result of Optionee’s violation of the terms of his or her inventions,
copyright and confidentiality agreement with the Company or Optionee’s breach
of his or her other contractual or legal obligations to the Company, Optionee
may exercise this Option within the thirty (30) day period following such
termination, but only to the extent that this Option was exercisable at the
date of such termination.  This Option
shall terminate on the earlier to occur of the expiration of such thirty (30)
day period or the expiration of this Option.


 


5.7                     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 Section 5.1, 5.2, 5.3, 5.4, 5.5 or 5.6; or
(ii) the expiration of this Option, any such unexercised portion and all of
Optionee’s rights with respect thereto shall terminate.  In no event shall this Option or any portion
thereof be exercisable beyond the five (5) year term stated in Section 3.


 


6.               TAX WITHHOLDING.  If
the Company is required to withhold any federal, state, local or other taxes
upon the exercise of this Option and the Optionee has not provided cash or a
check to the Company in an amount sufficient to meet this obligation at the
time of exercise, Optionee agrees that the Company has the right to repurchase
a sufficient number of shares of Stock issued upon exercise of this Option at
the then current Formula Price (as defined in the Plan) to meet the withholding
obligation based on the minimum rates required by law.


 


7.               RIGHTS, RESTRICTIONS AND LIMITATIONS.


 


7.1                     Article Fourth.  All Option Shares are subject to the rights,
restrictions and limitations set forth in Article Fourth.


 


7.2                     Company Right
of Repurchase.


 


a)              Repurchase
Right. 
In addition to the rights, restrictions and
limitations set forth in Article Fourth or in any Company repurchase
deferral program, the Company shall have the right to repurchase those Option
Shares that are acquired by Optionee upon exercise of this Option:  (i) after the date that is one hundred eighty
(180) days prior to the date of termination of Optionee’s affiliation with the
Company or an Affiliate as an employee, director or consultant, including any
exercises after termination; and (ii) during a Special Retirement.  The Company’s right to repurchase such Option
Shares shall begin on the one hundred eightieth (180th) day after
each exercise date (“Exercise Date”) that Optionee acquires such Option
Shares.  The Company shall exercise its
right to repurchase within two hundred forty (240) days after an Exercise Date,
by mailing written notice to Optionee’s address of record with the Company’s Stock
Programs Department.  The Company may
exercise its


 


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repurchase right on one or
multiple occasions with respect to all or any portion of the Option Shares.


 


b)             Payment.  If the Company elects to
repurchase Option Shares as described above in Section 7.2(a), the
repurchase price shall be the Formula Price per share in effect on the date that
is one hundred eighty (180) days after an Exercise Date.  The Company shall, in the event it exercises
its right to repurchase such Option Shares, pay for such Option Shares in cash,
by Company check or via electronic transfer within two hundred seventy (270)
days after the Exercise Date.


 


8.               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.


 


9.               INVESTMENT.  Optionee
agrees that any and all shares of Stock purchased upon the exercise of this
Option shall be acquired for investment and not for distribution.


 


10.         CAPITAL ADJUSTMENT.  The
Exercise Price and the number of Option Shares shall be appropriately adjusted
for any increase or decrease in the number of shares of Stock which the Company
has issued and outstanding resulting from any stock split, stock dividend,
combination of shares or any other similar change, or any exchange for other
securities or any reclassification, reorganization, redesignation,
recapitalization or otherwise.


 


11.         INCORPORATION OF STOCK OPTION PLAN; DEFINED TERMS.  The Option granted hereby is
granted pursuant to the Company’s 1999 Stock Incentive 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.


 


12.         EMPLOYMENT AT WILL; NO OBLIGATION TO CONTINUE AFFILIATE STATUS.


 


12.1               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


 


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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.


 


12.2               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.  Optionee further acknowledges and agrees that
this Agreement, the Plan, the transactions contemplated hereunder and the
vesting schedule set forth herein or any covenant of good faith and fair
dealing that may be found implicit in any of them do not constitute an express
or implied promise of continued engagement as an employee or consultant for the
term of the Option, for any period, or at all, and shall not interfere in any
way with Optionee’s right or the Company’s right to terminate Optionee’s
relationship as an employee or consultant at any time, with or without cause
and with or without notice.


 


13.         MISCELLANEOUS.  This
Agreement contains the entire agreement between the parties with respect to its
subject matter.  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.  Optionee
acknowledges that signing the Cover Sheet of this Agreement 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.


 


14.         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.


 


By
signing the Cover Sheet of this Agreement, you agree to all of the terms and
conditions set forth above and in the Plan.


 


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