Exhibit
10.1


 


[LOGO]


Science
Applications International Corporation


An Employee-Owned
Company


 


VIA FEDERAL EXPRESS


 


 


October 3, 2003


 


Mr. Kenneth C. Dahlberg


36
Alexander Street


Alexandria,
Virginia 22314


 


Dear Ken:


 


I am pleased to offer you
a position as Chief  Executive
Officer for Science Applications International Corporation.
(SAIC)(1), reporting directly to the SAIC Board of Directors.  If you accept this position you will also be
nominated to membership on the Board of Directors of Science Applications
International Corporation (SAIC).  Your
primary office location will be in San Diego. 
Your weekly base salary will be $19,230.77, which is equivalent to a
rate of $1,000,000.00
per year.  We would like you to start
work not later than Monday, November 3, 2003.


 


As the senior member of
the SAIC management team, you will be eligible to participate in our annual
incentive compensation plan, which has both a short-term and long-term
component.  Your target short-term
performance bonus for the SAIC fiscal year 2004 (FY04), which ends on January
31, 2004, will be $1,000,000.00, with the potential for up to
$1,500,000.00
for extraordinary performance. 
Short-term bonuses are payable in cash and fully vested SAIC stock. You
will also be eligible for a long-term performance bonus in the form of stock
granted on option, the details of which will be explained in a separate letter.
Your bonus for FY04 will be based on both corporate performance and achievement
of your FY04 objectives (as determined by the SAIC Board), and will be
pro-rated based on the number of months you are employed during FY04.


 


This offer of employment
also includes a cash sign-on bonus(2) of $660,000.00
to offset the forfeiture of your bonus for 2003 from your current
employer, plus significant sign-on incentives and the opportunity to acquire
stock in SAIC.  Specific information on
the stock features of your employment offer will be covered in a separate
letter.


 


SAIC will cover the cost of relocating you and your family from Virginia
to California, with relocation to occur at your earliest convenience.  You will be reimbursed for the actual costs
of relocating your household,
including the cost of temporary living expenses, moving household goods, home
travel to Virginia prior to relocation, real estate acquisition/disposal
expenses and loss protection benefits. 
SAIC will provide you with a one time “gross up” to your base salary to
cover your federal, state and local income and employment tax liability on the
relocation benefits provided by SAIC.(3)


 


If your employment is involuntarily terminated by
SAIC during the first three years of your employment for reasons other than
cause,(4) SAIC will continue your base salary, target short-term bonus and
benefits for the balance of that period. 
At the end of your salary and benefit continuation period, you will be
provided with at least two years of non-paid consulting status during which
time your unvested SAIC options and/or vesting stock will continue to
vest.  The severance benefits described
in this letter will be SAIC’s sole and exclusive obligation to you in the event
you are terminated for reasons other than cause.  In return for these separation benefits, you will be required to
sign a release and a non-compete/non-solicitation agreement.(5)


 












(1)           Subject to Board approval.


(2)           At your request, your cash sign-on
bonus will be paid to you in early January 2004.


(3)           You agree to repay any relocation payments from SAIC,
should you resign your employment within one year of your start date.


(4)           “Cause” shall be defined as (i) a
willful failure to substantially perform your duties, (ii) gross misconduct or,
(iii) conviction of a felony.


(5)           Should you become employed by SAIC it
is understood that you or the Company may terminate this employment relationship
at any time, with or without notice.


 


10260 Campus Point Drive, San Diego, CA 92121-1578
(858) 826-6000


 

















 


As an employee of SAIC,
you will be eligible to receive the fringe benefit package described in the
enclosed documents and offer package CD-ROM. 
In addition, you will be provided with a country club membership, first
class seating for your SAIC business travel, up to $10,000.00 for financial
planning and/or tax preparation within the first two years of your employment
and disability insurance which will replace 70% of your base salary up to age
65.  Please review the CD-ROM, complete
the following forms and return them to SAIC not later than your first day of
work.(6)


 


Education Summary and
Pre-Employment Statement


Mutual Agreement to
Arbitrate Claims


Invention, Copyright and
Confidentially Agreement


Standards of Business
Ethics and Conduct Certification


Employment Eligibility
Certification (I-9) (w/required documents)


 


SAIC has a strong policy
against employee use of illegal drugs and substance abuse.  Your employment is also contingent upon your
successfully passing a medical laboratory screen for illegal drugs.  Details on this screening process will be
provided to you prior to your first day of work.


 


Our commitment to
technical leadership, quality, ethics and employee ownership, combined with our
extraordinary range of technologies, has made SAIC the largest employee-owned
R&D company in the world.  It is our
intention to foster an environment conducive to challenge and opportunity.  In turn, we believe that your capabilities
will significantly enhance our management team and contribute to the future
growth and success of the company.


 


This employment offer is
effective through October 6, 2003. 
Please indicate your acceptance of this offer by signing this letter in
the space provided below and faxing it to me at (858) 826-2407 prior to the
expiration date.  You should also mail
the letter with your signature, to me in the enclosed envelope.


 


We look forward to a
mutually rewarding association.  Should
you have any questions, please call me at


(858) 826-2405.


 


Sincerely,


 


Science Applications
International Corporation


 


 


	
  /s/ B.L. Theule

  	
   

  
	
  B.L. Theule

  
	
  Senior Vice President

  
	
  Human Resources

  



 


 


I accept the terms and
conditions of this employment offer.


 


 


	
  /s/ Kenneth C. Dahlberg

  	
   

  	
  10/11/03

  	
   

  
	
  Kenneth C. Dahlberg

  	
  Date

  



 












(6)           Your employment is contingent upon
these documents being completed, signed and returned to SAIC.


 


2