Exhibit 10.4


 


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION


 


KEY EXECUTIVE STOCK DEFERRAL PLAN


 


(Effective January 4, 1996)


 





















 


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.


 


2





















 


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.


 


3





















 


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.


 


4





















 


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.


 


5





















 


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


 


6





















 


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.


 


7





















 


(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


 


8





















 


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


 


10





















 


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


 


11





















 


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.


 


12





















 


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.


 


13





















 


(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


 


14





















 


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.


 


15