Document:

EX10_1

Exhibit 10.1

EQUITY COMPENSATION AND 
SUPPLEMENTAL PENSION AGREEMENT

THIS AGREEMENT, is made and entered into as of November 2, 2012 (the “Effective Date”) by and between Caterpillar Inc., a Delaware corporation (the “Company”), and Richard P. Lavin (the “Executive”).
WHEREAS, the Company recognizes and appreciates the service provided by the Executive during his 28-year career with the Company, including his leadership, strategic vision and contributions to the growth of the Company’s operations and presence in developing markets, particularly Asia; and 
WHEREAS, the Executive is a Group President of the Company who is subject to Section 16 of the Securities and Exchange Act of 1934; and
WHEREAS, the Company maintains the Caterpillar Inc. 2006 Long-Term Incentive Plan (the “2006 LTIP”); and
WHEREAS, the Company maintains, and the Executive participates in, the Caterpillar Inc. Retirement Income Plan (“RIP”) and the Caterpillar Inc. Supplemental Retirement Plan (the “SERP”); and
WHEREAS, in connection with the Executive’s retirement from the Company effective December 31, 2012 (the “Retirement Date”), and in exchange for the Executive’s execution and non-revocation of a general release of claims in favor of the Company and the Executive agreeing to comply with the ongoing obligations set forth in Article III hereof, the Executive will receive: (1) a grant of a stock option, subject to the terms contained herein; (2) acceleration of vesting of all restricted stock and restricted stock units previously granted to Executive pursuant to the Company’s Chairman’s Award Program under the 2006 LTIP, subject to the terms contained herein; and (3) supplemental pension benefits, subject to the terms contained herein.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
I.
EQUITY COMPENSATION

1.1    Option Grant.  Subject to the condition precedent described in Section 3.1, this Agreement evidences the grant to the Executive on November 5, 2012 (the “Grant Date”), pursuant to the terms of the 2006 LTIP, of a stock option to purchase shares of common stock of the Company (the “Option”), with an aggregate grant date value of $2,000,000 calculated based on the Company’s Black-Scholes option pricing methodology.

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1.2    Option Price.  The purchase price of each share of common stock of the Company subject to the Option shall be the per share closing price of the common stock of the Company on the Grant Date (the “Option Price”).  
1.3    Type of Option.  The grant is not intended to be, and will not be treated as, an incentive stock option as that term is described in Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).
1.4    Term of Option.  Unless the Option terminates earlier pursuant to other provisions of this Agreement, the Option shall expire on the fifth anniversary of the Grant Date.
1.5    Vesting.  Subject to the terms and conditions of this Agreement:
     (a)    Vesting and Exercisability of Option.  The Option shall become vested as of the first day after the Grant Date that the per share closing price of the common stock of the Company is at least $110.09 for twenty consecutive trading days.  In no event, however, shall the Option become exercisable until the later of (1) the date that it becomes vested in accordance with the preceding sentence or (2) the Retirement Date, except as provided in Section 1.6.
(b)    Acceleration of Vesting of Chairman’s Awards.  Subject to the condition precedent described in Section 3.1, all restricted stock and restricted stock units previously granted to Executive pursuant to the Company’s Chairman’s Award Program under the 2006 LTIP that are outstanding and unvested as of the day immediately prior to the Retirement Date shall become vested, to the extent vesting is not otherwise automatic, upon the Retirement Date.  Such restricted stock and restricted stock units shall be subject to the terms, conditions and provisions of the 2006 LTIP and the governing award documents.  
1.6    Executive’s Death.  If Executive dies on or after the Effective Date, to the extent that the Option is not then exercisable, the Option shall immediately become fully vested and shall remain exercisable for the remainder of the term of the Option.  The Executive’s beneficiary or estate may exercise the Option.
1.7    Exercise.  If the Option becomes exercisable under this Agreement, the Option may be exercised by the delivery of a notice of exercise to the Company (or its designated agent(s)), setting forth the number of shares of common stock of the Company to be exercised, accompanied by full payment for such shares.  The Option Price upon exercise of the Option shall be payable to the Company in full either:
		
	(a)
	by tendering cash, or

		
	(b)
	by tendering previously acquired shares of common stock of the Company  having an aggregate Fair Market Value at the time of exercise equal to the Option Price, or

		
	(c)
	by cashless exercise through delivery of irrevocable instructions to a broker to promptly deliver to the Company the amount of proceeds from a sale of shares having a Fair Market Value equal to the Option Price, or

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	(d)
	by directing the Company to withhold a number of shares otherwise issuable upon election having a Fair Market Value equal to the Option Price.

For purposes of this Section 1.7, the term “Fair Market Value” shall have the same meaning given to such defined term under the 2006 LTIP.
1.8    Transferability.  Subject to certain exceptions set forth in the 2006 LTIP, the Option is only exercisable by Executive (or Executive’s beneficiary, estate or representative, as applicable) and may not be assigned, transferred, pledged or hypothecated in any way. The Option is not subject to execution, attachment or similar process. Any attempt at such, contrary to the provisions of the 2006 LTIP, will be null and void and without effect.
1.9    Beneficiary Designation.  The Executive may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under Article I of this Agreement is to be paid in case of his death before he receives any or all of such benefit.  Each such designation shall revoke all prior designations by the Executive, shall be in a form prescribed by the Company, and will be effective only when filed by the Executive in writing with the Company during the Executive’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Executive’s death under this Agreement shall be paid to the Executive’s estate.
1.10    Withholding.  The Company may be required to withhold taxes upon exercise of the Option and in connection therewith, the Company may withhold shares to satisfy any withholding requirements subject to the following: (a) the value of the shares surrendered must equal the withholding requirement and (b) the value of the shares surrendered shall be the Fair Market Value determined as of the exercise date.  For purposes of this Section 1.12, the term “Fair Market Value” shall have the same meaning given to such defined term under the 2006 LTIP.
1.11    Acceptance.  Executive’s acceptance of the Option constitutes acknowledgement and consent to the terms of the Option, as described in this Agreement.
1.12    Effect on Other Benefits.  This Agreement and the Option (and any exercise thereof) is not intended to and shall not impact the coverage of or the amount of any other employee benefit plans in which Executive participates that are sponsored by the Company and any of its subsidiaries or affiliates.
1.13    Administration.  This Agreement and the Option shall at all times be subject to the terms, conditions and provisions of the 2006 LTIP, which are incorporated by reference, and the 2006 LTIP shall be administered in accordance with the terms of, and as provided in, the 2006 LTIP. In the event of conflict between the terms and provisions of this Agreement and the terms, conditions and provisions of the 2006 LTIP, the terms, conditions and provisions of the 2006 LTIP shall control.

II.
SUPPLEMENTAL PENSION BENEFIT
2.1.    Pension Benefit.  Subject to the condition precedent described in Section 3.1, a supplemental pension benefit will be paid to the Executive pursuant to Article II of this Agreement equal to: (a) the amount of pension benefits that would be payable to the Executive under RIP and SERP if the Executive had earned 35 years of service for benefit accrual purposes under RIP and SERP and 

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attained age 65 as of the Retirement Date; minus (b) the amount actually payable to the Executive under RIP and SERP.
2.2    Determination of Supplemental Pension Benefit Upon Separation of Service.  The amount payable pursuant to Section 2.1 upon the Executive’s Separation of Service (defined in Section 2.4(a)(1) below) shall be determined as provided in this Section 2.2.
(a)    Step One.  The Company shall determine the normal form of benefit that would be payable to the Executive pursuant to RIP and SERP assuming the Executive had attained age 65 and had accrued 35 years of service for benefit accrual purposes as of the Retirement Date.  For purposes of this paragraph (a), the benefit shall be determined by applying the provisions of RIP and SERP to the Executive as of the Retirement Date.
(b)    Step Two.  The Company shall determine the normal form of benefit that is payable to the Executive pursuant to RIP and SERP.  For purposes of this paragraph (b), the benefit shall be determined by applying the provisions of RIP and SERP to the Executive as of the Retirement Date.
(c)    Step Three.  The amount determined pursuant to paragraph (b) above shall be subtracted from the amount determined pursuant to paragraph (a) above to determine the amount payable to the Executive pursuant to Article II of this Agreement.  If, and to the extent the benefit is payable in another form of benefit payment as provided in Section 2.3 or Section 2.4(c), the amount determined pursuant to this paragraph (c) shall be converted to the alternate form of benefit payment using reasonable actuarial assumptions and methods determined by the Company.
2.3    Determination of Supplemental Pension Benefit Upon Death.  If the Executive dies on or after the Effective Date but before supplemental pension benefits commence under this Article II, the provisions of Section 2.4(c)(2) will apply.
2.4    Payments.  Any payment of supplemental pension benefits to the Executive pursuant to this Article II shall be administered in accordance with this Section 2.4. 
(a)    Section 409A     Restrictions.  The Executive (or the Executive’s beneficiary in the case of the Executive’s death) shall not be entitled to commence benefits hereunder prior to the first to occur of the following events:
(1)    the Executive’s “Separation From Service” (as determined in accordance with any regulations, rulings or other guidance issued by the Department of the Treasury or the Internal Revenue Service pursuant to Section 409A(a)(2)(A)(i) of the Code), or if the Executive is a “Key Executive” (as defined in Section 416(i) of the Code without regard to Section 416(i)(5)) the date which is six months after the Executive’s Separation From Service;
(2)    the Executive becoming “Disabled” (as defined and determined in accordance with Section 409A(a)(2)(C) of the Code);
(3)    the Executive’s death;
(4)    an Unforeseeable Emergency (as defined and determined in accordance with Section 409A(a)(2)(B)(ii)(I) of the Code); or

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(5)    to the extent provided by the Secretary of the Treasury, a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company.
This Section 2.4(a) restates the restrictions on distributions set forth in Section 409A of the Code and is intended to impose restrictions on distributions pursuant to this Agreement accordingly.  This Section 2.4(a) does not describe the instances in which distributions actually will be made.  Rather, distributions will be made only if and when permitted by both this Section 2.4(a) and another provision of Article II of this Agreement.
(b)    Timing of Payment.  Any benefit determined under Section 2.2 that becomes payable to the Executive following Separation from Service shall be paid as soon as administratively feasible after the date which is six months after the Executive’s Separation From Service, except in the event of the Executive’s death, in which case any benefit payable to the Executive’s beneficiary shall commence as soon as administratively feasible following the Executive’s date of death.
(c)    Form of Payment.
(1)    Distribution Upon Separation From Service.  Subject to Section 3.1, the supplemental pension benefits determined under Section 2.2 shall be distributed to the Executive as follows: 
(i)    Executive Married.  Subject to paragraph 2.1(c)(2) and provided that the Executive was continuously married for the one-year period ending on the date of his Separation From Service, the supplemental pension benefits shall be paid in the normal form of benefit payable under RIP which is a joint and survivor annuity in a reduced monthly benefit for the Executive’s life (as determined in accordance with the applicable actuarial assumptions in effect under RIP) and then, if the Executive’s spouse is still alive, a benefit equal to a specified percentage of the Executive’s monthly benefit is paid to the spouse for the remainder of her life.  If the Executive’s spouse is not alive when the Executive dies, no further payments shall be made.  Notwithstanding the foregoing, in accordance with uniform rules and procedures as may be implemented by the Company, the Executive may, with the written consent of his spouse, elect to waive the joint and survivor annuity of this paragraph and instead elect a single life annuity or any actuarially equivalent form of annuity permitted under RIP.    
(ii)    Executive Unmarried.  Provided that the Executive has not been continuously married for the one-year period ending on the date of his Separation From Service, the supplemental pension benefits shall be paid in the form of a single life annuity for the Executive’s life.  No payments shall be made after the Executive’s death.  Notwithstanding the foregoing, in accordance with uniform rules and procedures as may be implemented by the Company, Executive may elect, in lieu of a single life annuity, to have his benefits paid in any actuarially equivalent form of annuity permitted under RIP.
(iii)    Interest Adjustment.  Pursuant to Section 2.1(b), payments shall commence as soon as administratively feasible after the date that is six months after the Executive’s Separation From Service.  The monthly benefit amounts that would have been payable if not for such six-month delay will be credited with interest at five percent (5%) per annum through the date the first monthly benefit payment is actually made.  Such delayed monthly benefit amounts and 

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interest shall be paid in a single lump sum amount as soon as administratively feasible after the date the first monthly benefit payment is actually made.
(2)    Distribution Upon Death.  If the Executive dies before supplemental pension benefits commence hereunder, and the Executive was continuously married during the one-year period ending on the Executive’s date of death, the Executive’s surviving spouse shall be entitled to a monthly survivor benefit payable during the spouse’s lifetime and terminating with the payment for the month in which such spouse’s death occurs.  The monthly benefit payable to the surviving spouse shall be the portion of the amount determined pursuant to paragraph 1.2 as of the Retirement Date that the surviving spouse would have been entitled to receive pursuant to this Agreement if the Executive had separated from service on the date of his death, commenced benefits in the form of a 50% joint and survivor annuity, and then died immediately thereafter.
2.5    Acceleration of Benefits Prohibited.  Notwithstanding any other provision of this Agreement to the contrary, neither the time nor the schedule of any payment made pursuant to Article II of this Agreement may be accelerated except as specifically provided below or as provided in additional guidance issued by the Department of the Treasury or the Internal Revenue Service.
(a)    The time or schedule of distributions under Article II of this Agreement to an individual other than the Executive may be accelerated as may be necessary to fulfill a Domestic Relations Order.
(b)    The time or schedule of distributions under Article II of this Agreement may be accelerated as may be necessary to comply with a “Certificate of Divestiture” (as defined in Section 1043(b) of the Code).
(c)    The time or schedule of distributions under Article II of this Agreement may be accelerated to pay the Federal Insurance Contributions Act (“FICA”) tax imposed under Sections 3101 and 3121(v)(2) of the Code on compensation deferred under this Agreement (the “FICA Amount”).  In addition, the time or schedule of distributions under Article II of this Agreement may be accelerated to pay the income tax at source on wages imposed under Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes.  Notwithstanding the foregoing, the total payment under this paragraph (c) must not exceed the aggregate of the FICA Amount and the income tax withholding related to such FICA Amount.
2.6    Benefits Unfunded.  At all times, the supplemental pension benefits described in this Article II shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Company for payment of any benefits hereunder.  The right of the Executive (or his designated beneficiary) to receive a payment hereunder shall be an unsecured claim against the general assets of the Company, and neither the Executive nor a designated beneficiary shall have any rights in or against any specific assets of the Company.  All amounts payable pursuant to Article II of this Agreement shall constitute general assets of the Company and may be disposed of by the Company at such time and for such purposes as it may deem appropriate.
2.7    Benefits Not Assignable.  Neither the Executive, nor his designated beneficiary, shall have any power or right to transfer, assign, anticipate, hypothecate or otherwise encumber all or any part of the amounts payable pursuant to Article II of this Agreement, the benefits of which are expressly declared to be unassignable and non-transferable.  Any such attempted assignment or transfer shall 

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be void and shall terminate Article II of this Agreement and the Company shall thereupon have no further liability hereunder.  No amount payable pursuant to Article II of this Agreement shall, prior to actual payment, be subject to seizure by any creditor for the payment of any debt, judgment or other obligation, by a proceeding at law or in equity, not transferable by operation of law in the event of bankruptcy, insolvency or death of the Executive or his designated beneficiary.  Notwithstanding the preceding provisions of this Section 2.7 to the contrary and to the extent permitted by law, the amounts payable pursuant to this Agreement may be assigned or alienated pursuant to a “Domestic Relations Order” (as such term is defined in Section 414(p)(1)(B) of the Code).

III.
CONDITION PRECEDENT; EXECUTIVE’S ONGOING OBLIGATIONS
3.1    Condition Precedent.  Except as provided in Section 1.6 and Section 2.3, the Option, the supplemental pension benefits and the acceleration of vesting provided under this Agreement are expressly conditioned on (a) Executive not resigning his employment with the Company, or being terminated by the Company for “Cause” (as such term is defined in the 2006 LTIP) prior to the Retirement Date, (b) Executive’s termination of his employment with the Company due to his retirement effective as of the Retirement Date, (c) the Executive executing, and not revoking, the Release as provided in Section 3.4, and (d) Executive complying with all requirements of this Agreement, including without limitation Sections 3.2, 3.3, 3.5, 3.6 and 3.7.  For avoidance of doubt, if Executive’s employment is terminated either by the Company for Cause or voluntarily by Executive prior to the Retirement Date, if Executive does not terminate his employment with the Company in accordance with the previous sentence, or if Executive fails to execute or revokes the release, or violates any other provision of this Agreement, the Option and the supplemental pension benefits provided under this Agreement shall be forfeited in their entirety and the acceleration of vesting provided under this Agreement shall not occur.
3.2    Restrictive Covenants.  For 12 months following the Retirement Date, Executive will not, directly or indirectly, without the Company’s prior written consent, do any of the following: 
(a)    Solicit any business competitive with any Company business from any person or entity who: (i) was a Company provider or customer within the 18 months before the Retirement Date and (ii) with whom Executive had contact to further the Company’s business or for whom Executive performed services, or supervised the provision of services for, during Executive’s employment; 
(b)    Hire, employ, recruit or solicit any Company employee or consultant who possesses confidential information of the Company; 
(c)    Induce or influence any Company employee, consultant, customer or provider to terminate his, her or its employment or other relationship with the Company; 
(d)    Engage or participate in, or in any way render services or assistance to, any business that competes, directly or indirectly, with any Company product or service that Executive 

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participated in, engaged in, or had Confidential Information regarding, in any geographic territory over which Executive had responsibilities, during the 18 months before the Retirement Date; 
(e)    Assist anyone in any of the activities listed above. 
If Executive violates the promises in this Section 3.2 or in Section 3.3, 3.5, 3.6 or 3.7, in addition to all other remedies, Executive shall not be entitled to receive any further payments or benefits under this Agreement.  However, Executive’s obligations, releases, and promises in this Agreement shall survive and be continuing.  Executive specifically acknowledges and agrees that that the consideration already provided by this Agreement is sufficient for the continuing obligations, releases and covenants herein. 
3.3    Non-Disparagement.  Executive agrees not to make any negative comment about or otherwise disparage the Company or those associated with it orally or in writing, directly or by implication, to any person, including the Company’s customers or agents.  Executive further agrees not to provide testimony as an expert or paid witness on behalf of a party adverse to the Company.  This Section 3.3 does not prohibit Executive from testifying pursuant to a subpoena or from accepting witness fees accompanying a subpoena, and this Section 3.3 in no way limits Executive’s right to file a charge with or participate in any administrative proceeding conducted by a governmental agency relating to Executive’s employment.
3.4    Release.  Not earlier than the Retirement Date, and not later than twenty-one (21) days after the Retirement Date, Executive shall execute and deliver to the Company the release (the “Release”) in the form attached hereto as Exhibit A.  Executive shall have a period of seven (7) days after executing the Release to revoke the Release by written notice of revocation given to the Company.  Anything else contained herein to the contrary notwithstanding, if Executive either fails to execute and deliver the Release, or revokes the Release, within the time periods described above, the Option and the supplemental pension benefits shall be immediately forfeited and Executive shall have no further rights under this Agreement; however, the remaining provisions of this Agreement, including without limitation Executive’s obligations under Sections 3.2, 3.3, 3.6 and 3.7, shall remain in effect.  If Executive exercises the Option prior to the executing the Release, or during the period of time during which he has the right to revoke the Release, exercise of the Option and delivery of the shares shall be deferred until the Release has been executed and the revocation period has expired, and if Executive either fails to execute, or revokes, the Release, his exercise of the Option shall be null and void and any portion of the Option Price paid shall be promptly refunded to him.  Executive acknowledges that he has been advised by the Company to consult legal counsel with respect to the Release.
3.5    Cooperation and Assistance.  Executive agrees that he will cooperate (a) with the Company in the investigation, prosecution or defense of any potential claims or concerns regarding the business of the Company about which he has relevant knowledge, including by providing truthful information and testimony as reasonably requested by the Company, and (b) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding concerning the Company.  The Company will in turn cooperate and assist Executive with addressing any such matters and will reimburse Executive for any reasonable travel and out-of-pocket expenses that he incurs in providing such cooperation.  Executive further agrees to inform the Company of all 

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subpoenas, correspondence, telephone calls, requests for information, inquiries or other contacts that he may receive from third parties, including governmental agencies, concerning any fact or circumstances known to Executive during his employment with the Company.  Executive agrees to inform the Company within two (2) business days of each such contact.  The Company will in accordance with its applicable bylaws and internal company policies indemnify Executive against any and all claims and losses that may arise as a result of acts or omissions by Executive in the scope of his employment with the Company.
3.6    Acknowledgment of Obligations. Executive acknowledges that during his employment, Executive developed and has been exposed to trade secrets or confidential information regarding the Company, including business strategies, operations, and actual and potential customers and suppliers (“Confidential Information”).  The Company considers such Confidential Information to be valuable and proprietary.  Executive agrees that after any termination or retirement date that he remains bound by the Intellectual Property Agreement that Executive signed during his employment with the Company.  Executive acknowledges that he is under a continuing obligation to keep confidential, not disclose and not use any confidential information except as specifically authorized by the Company.  Executive understands that he will be required to sign an Exit Statement upon any separation from employment that reaffirms these obligations regarding trade secret and confidential information.  Should Executive gain employment at other employers in the future, he understands that the Company has Conflict of Interest guidelines in effect that may impact its purchasing relationships and practices with such possible employers, as stated in the Company’s Purchasing Practices No. 49.  Both Executive and the Company agree that he should contact the Company’s Chief Ethics and Compliance Officer so that the Company may determine whether any such restriction on his future employment exists by operation of this Agreement, or whether any conflict of interest as contemplated by Purchasing Practices No. 49 exists regarding his employment opportunities with such possible employers.  Regarding the obligations of Purchasing Practices No. 49, Executive and the Company agree that the parties will each use their best efforts to assess whether such conflict of interest may be avoided prior to his accepting employment with such other employers.
3.7    Disclosure.  Executive acknowledges that he has reviewed the Company’s Worldwide Code of Business Conduct (the “Worldwide Code”) and understands his obligations to the Company under the Worldwide Code.  Executive agrees that he has been given an adequate opportunity to advise the Company, and that he has fully and truthfully advised the Company, of any facts that he is aware of that constitutes or might constitute a violation of the Worldwide Code, any other Company policies, or any ethical, legal or contractual standards or obligations of the Company.  If Executive learns of such facts in the future, Executive agrees to report them to the Company by contacting the Company’s Office of Business Practices. 

IV.
MISCELLANEOUS PROVISIONS
4.1    References to “Company”. For purposes of Sections 1.6, 2.6, 3.1, 3.2, 3.3, 3.5, 3.6 and 3,7, the term “Company” as used therein shall also include any and all subsidiaries and affiliates of the Company.

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4.2    Successors.  All obligations of the Company under this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation, purchase of all or substantially all of the business and/or assets of the Company or otherwise.
4.3    Compliance with Section 409A of the Code.   It is intended that this Agreement satisfies the terms of Section 409A of the Code and the Treasury Regulations promulgated and other official guidance issued thereunder.  This Agreement shall be interpreted and construed on a basis consistent with such intent.  Notwithstanding anything contained herein to the contrary, the Company reserves the right (including the right to delegate such right) to unilaterally amend this Agreement without Executive’s consent solely in order to maintain an exclusion from the application of, or to maintain compliance with, Section 409A of the Code.  Executive’s execution of this Agreement constitutes acknowledgement and consent to such rights of the Company.
4.4    Compliance with Securities Laws.  The Company will take steps required to achieve compliance with all applicable U.S. federal and state securities laws (and other laws, including registration requirements) and with the rules and practices of the stock exchanges upon which the stock of the Company is listed and the Option is subject to the requirements of such laws and rules.
4.5    Governing Law.  To the extent not preempted by Federal law, this Agreement shall be construed in accordance with and governed by the laws of the State of Illinois without regard to the conflict of law provisions thereof.
4.6    Judicial Modification and Severability.  If any of this Agreement’s provisions is determined to be unenforceable, the Executive and Company both agree that such provision should be modified so that it is enforceable or, if modification is not possible, that it should be severed, and the enforceability of the remaining provisions will not be affected by such modification or severance.
4.7    Amendment.  Except as otherwise provided in Section 4.3, this Agreement may be amended only by written agreement of the Executive and the Company.
4.8    Consulting an Attorney.  Executive understands that the Company has advised him to consult with an attorney prior to signing this Agreement, but that any legal consultation is at Executive’s own expense.  Executive agrees that he has had an adequate opportunity to consult with an attorney, Executive has read and understand this Agreement, and Executive is voluntarily signing this Agreement.
4.9    Confidentiality of Agreement.  Both Executive and the Company will keep this Agreement confidential except as required by law and Executive will not disclose its terms to anyone except his spouse or domestic partner, legal counsel, and financial or tax advisor, provided these individuals agree to be bound by the terms of this confidentiality provision, and as required by law.
4.10    Execution of Agreement by Parties.  Upon execution of this Agreement, the Executive and the Company signify their agreement with the terms and conditions of this Agreement.

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IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on this 2nd day of November, 2012, effective as of the Effective Date.

	
		
	EXECUTIVE

/s/Richard P. Lavin            
Name: Richard P. Lavin         

	CATERPILLAR INC.

/s/James B. Buda               
Name: James B. Buda   
Title:  Executive Vice President, Law and Public Policy

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EXHIBIT A 
RELEASE
		
	1.
	In consideration of the grant to Richard P. Lavin (“Executive”) of a nonqualified stock option (the “Option”) to purchase shares of common stock of Caterpillar Inc., a Delaware corporation (the “Company”), the provision of supplemental pension benefits and the acceleration of certain outstanding equity compensation, all pursuant to an Equity Compensation and Supplemental Pension Agreement (the “Agreement”) dated as of November 2, 2012 Executive hereby waives and releases the following parties (the “Released Parties”) from all claims that the Executive may have, known or unknown, against them: 

(a)    The Company; 
		
	(b)
	The Company’s subsidiary and affiliated companies;

		
	(c)
	The Company’s predecessors; and 

		
	(d)
	All of the above companies’ agents, directors, officers, employees, representatives, fiduciaries, shareholders, successors and assigns.

Executive acknowledges that prior to execution of the Agreement he had no right to receive the Option, the supplemental pension benefits or the acceleration of vesting, and that under the terms of the Agreement his receipt of, and right to exercise the Option, his right to receive supplemental pension benefits and his right to the accelerated vesting are expressly conditioned upon his executing, and not revoking, this Release.
		
	2.
	Executive’s release of claims includes all claims related to his employment with the Company (and all subsidiaries and affiliates of the Company) or the termination of his employment.  For example, Executive’s release includes claims based on: 

		
	•
	Any federal statute, including:  the False Claims Act (including any right to share in any recovery by the United States government); Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1866; the Civil Rights Act of 1874; the Age Discrimination in Employment Act (ADEA); the Equal Pay Act; the Americans with Disabilities Act; the Employee Retirement Income Security Act of 1974; and the National Labor Relations Act; 

		
	•
	Any state statute, including discrimination and whistleblower statutes; 

		
	•
	Any ordinance; 

		
	•
	Any express or implied contract between the Company (and/or any subsidiary or affiliate of the Company) and him; 

		
	•
	Any tort, such as defamation, misrepresentation, infliction of emotional distress, or fraud;  

		
	•
	Negligence; or 

		
	•
	Any other legal theory. 

Executive’s release does not:  (i) affect his right to obtain any vested and nonforfeitable balance in his accounts under any retirement plan; (ii) preclude him from exercising any conversion or continuation coverage rights he may have under the Company’s welfare benefit plans; or (iii) waive his right to file an administrative charge with or participate in an administrative proceeding conducted by any governmental agency concerning his employment, although his release does waive his right to receive any individual remedy, including monetary damages, in connection with any charge.
		
	3.
	Covenant Not to Sue.  Executive acknowledges that he understands that a “covenant not to sue” is a legal term which means Executive agrees not to file a lawsuit in court.  It is different from the general release of claims contained in Sections 1 and 2 above.  Besides waiving and releasing the claims covered by Sections 1 and 2, Executive further agrees never to sue any of the Released Parties in any forum for any reason covered by the release in Sections 1 and 2 above.  Notwithstanding this covenant not to sue, Executive may bring a claim against the Company to enforce the Agreement or, to the extent permitted under the law, to challenge the validity of this Release under the Age Discrimination in Employment Act.  If Executive sues any Released Party in violation of this covenant not to sue, Executive shall be liable to the Released Party for the Released Party’s reasonable attorneys’ fees and other litigation costs incurred in defending against such suit.  

		
	4.
	Execution and Revocation of Release.  Executive must execute this Release, and deliver it to the Company, not earlier than the date on which his employment is terminated and not later than twenty-one (21) days after such date.  Executive may revoke this Release by a written notice of revocation at any time within seven (7) days after executing and delivering it.  The executed Release, and any written notice of revocation, shall be delivered either by personal delivery, or by certified first class mail, with proper postage prepaid (which shall be effective as of the date of mailing), and in either case shall be addressed to the following person: James B. Buda, Esq.; Caterpillar Inc.; Executive Vice President, Law and Public Policy; 100 NE Adams Street, Peoria, IL 61629-7310.

Executive acknowledges that if he either fails to execute and deliver this Release as described above, or revokes this Release, the benefits provided under the Agreement will be forfeited in their entirety and any prior exercise of the Option shall be null 

and void.  Executive acknowledges that he has been given a period of at least twenty-one (21) days to consider whether to execute this Release, has been advised by the Company to consult with legal counsel at his own expense regarding this Release and the Agreement, and is entering into this Release and the Agreement knowingly, voluntarily, and with full knowledge of their significance and has not been coerced, threatened, or intimidated into signing this Release or the Agreement.
* * * SIGNATURE PAGE FOLLOWS * * *

IN WITNESS WHEREOF, this Agreement is executed by the Executive on this 2nd day of November, 2012.

	
			
	 
	 

	 
	 
	 

	 
	 
	/s/Richard P. Lavin

	 
	 
	Richard P. LavinExhibit 10.28

COMPUTER SCIENCES CORPORATION

2011 OMNIBUS INCENTIVE PLAN

INDUCEMENT STOCK OPTION

AWARD AGREEMENT

1.Grant of Award.
This Agreement (“Agreement”) is made and entered into as of August 15, 2012 (the “Grant Date”) by and between Computer Sciences Corporation, a Nevada corporation (the “Company”), and Thomas E. Hogan, a full-time employee of the Company and/or one or more of its subsidiaries (the “Employee”).
This Agreement granting the Employee an award under the Plan (the “Award”) shall be subject to all of the terms and conditions set forth in the Computer Sciences Corporation 2011 Omnibus Incentive Plan (the “Plan”) and this Agreement.  Except as defined in Appendix A, capitalized terms shall have the same meanings ascribed to them under the Plan.
This Award is subject to the data privacy provisions set forth in Appendix B.
The Company hereby grants to the Employee, and the Employee hereby accepts, an option to purchase 250,000 shares of Common Stock (the “Option Shares”) at an exercise price of $____________________ per share (the “Exercise Price”), which option shall expire at 5:00 p.m., California, U.S.A. time, on August 15, 2022 (the “Expiration Date”) (the “Option”).  The Option shall not initially be exercisable to purchase any Option Shares; provided, however, that upon the date indicated below, the Option shall become exercisable to purchase (“vest with respect to”) the number of the Option Shares indicated below across from such date:
Number of Option Shares Vesting            Date
250,000            August 15, 2016
2.    Termination of Employment; Acceleration and Termination of Options.
(a)    Termination of Status as an Employee.
(i)    Termination of Employment for Good Reason or Other than for Cause, Death or Disability prior to August 15, 2016.  If, prior to August 15, 2016, the Employee’s status as an employee of the Company or any of its subsidiaries is terminated (the date of such termination, the “Employment Termination Date”) either (1) by the Company without Cause, or (2) by the Employee for Good Reason, then (A) the Option shall vest with respect to 100,000 Option Shares and shall terminate upon the earlier of the Expiration Date or three months after the Employment Termination Date, and (B) the portion of the Option that has not vested on or prior to the Employment Termination Date shall terminate on such date.

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(ii)    Termination Other than due to Cause, Death or Disability.  If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated at age 62 or older for no reason, or for any reason other than Cause, death or Disability, then subject to Sections 2(a)(iii) and 2(b) hereof, the vested portion of the Option shall terminate upon the earlier of the Expiration Date or the fifth anniversary of the Employment Termination Date.
(iii)    Leave of Absence.  If, prior to the exercise of the Option in full, the Employee takes a leave of absence (including a military leave of absence), the Employee and the Company each reasonably anticipate that the Employee will return to active employment and either (x) the leave of absence is to be for not more than six months or (y) at all times during the leave of absence the Employee has a statutory or contractual right to return to work, then:
(A)    while on leave of absence the Employee shall be treated as if he were an active employee;
(B)    if the Employee’s leave of absence is terminated and the Employee does not return to active employment, the date of the end of the leave of absence shall be treated as the date on which the Employee has a termination of employment; and
(C)    if the Employee’s leave of absence is terminated and the Employee returns to active employment, he shall be treated as if active employment had continued uninterrupted during the leave of absence.
(iv)    Death or Disability.  If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated by reason of the death or Disability of the Employee, then (1) the portion of the Option that has not vested on or prior to the Employment Termination Date shall fully vest on such date and (2) the Option shall terminate upon the earlier of the Expiration Date or the fifth anniversary of the Employment Termination Date.
(v)    Other Termination.  If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated under conditions not elsewhere described in this Section 2(a) or Section 2(c), then (1) the portion of the Option that has not vested on or prior to the Employment Termination Date shall terminate on such date and (2) the remaining vested portion of the Option shall terminate upon the earlier of the Expiration Date or three months after the Employment Termination Date.
(b)    Death Following Termination of Employment.  Notwithstanding anything to the contrary in this Agreement, if the Employee shall die at any time after the termination of his or her status as an employee of the Company or any of its subsidiaries and at a time when the Option is vested and exercisable, then the Option shall remain exercisable until, and shall terminate upon, the earlier of the Expiration Date or the fifth anniversary of the date of such death.

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(c)    Termination for Cause.  If the Employee’s status as an employee of the Company or any of its subsidiaries is terminated for Cause, then both the vested and unvested portion of the Option shall terminate on such date.
(d)    Acceleration of Option.
(i)    The Committee, in its sole discretion, may accelerate the exercisability of the Option at any time and for any reason.
(ii)    Notwithstanding anything to the contrary in this Agreement, upon a Change in Control: (1) the portion of the Option then outstanding that has not vested on or prior thereto shall fully vest and (2) the Option shall remain exercisable until, and shall terminate upon, the earlier of the Expiration Date or, if applicable, the fifth anniversary of the date of the Employee’s death.
(e)    Certain Events Causing Termination of Option.  Notwithstanding anything to the contrary in this Agreement, the Option shall terminate upon the consummation of any of the following events, or, if later, the thirtieth day following the first date upon which such event shall have been approved by both the Board of Directors and the stockholders of the Company, or upon such later date as shall be determined by the Committee:
(i)    the dissolution or liquidation of the Company;
(ii)    a sale of substantially all of the property and assets of the Company, unless the terms of such sale shall provide otherwise; or
(iii)    a reorganization, merger or consolidation of the Company that results in the outstanding securities of any class then subject to the Option being exchanged for or converted into cash, property and/or securities not issued by the Company, unless the terms of such reorganization, merger or consolidation provide otherwise.
3.    Payment of Taxes.  
(a)    If the Company and/or the Employer are obligated to withhold an amount on account of any federal, state or local tax imposed as a result of the exercise of the Option (collectively, “Taxes”), including, without limitation, any federal, state or other income tax, or any F.I.C.A., state disability insurance tax or other employment tax, then, concurrently with such exercise, the Employee shall pay to the Company, by check, the minimum aggregate amount that the Company and the Employer are so obligated to withhold, as such amount shall be determined by the Company (the “Minimum Withholding Liability”); provided, however, that the Employee may instead, on or before the exercise of the Option, irrevocably elect to pay all or any part of the Minimum Withholding Liability by either of the following methods:
(i)    pursuant to the Company’s cashless exercise program; or
(ii)    by instructing the Company to withhold shares of Common Stock otherwise issuable upon such exercise of the Option (such withholding to be valued 

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on the basis of the aggregate Fair Market Value of the withheld shares on the date of such exercise); and
provided that the Company is not then prohibited from purchasing or acquiring such shares of Common Stock, and provided, further, however, that if all of such payment is made by check and/or pursuant to the Company’s cashless exercise program, then the Employee shall be entitled, but not obligated, so to pay an amount that is greater than the Minimum Withholding Liability.
(b)    The Employee acknowledges that neither the Company nor the Employer has made any representation or given any advice to the Employee with respect to Taxes.
4.    Recoupment and Forfeiture.
(a)    Refund of Option Gains; Termination of Options.  If the Employee breaches any of the covenants set forth in Section 4(b)(i), (ii) or (iii) hereof during the Applicable Restrictive Period for such exercise, then:
(i)    Refund of Option Gains.  If the Employee has exercised the Option within the one year period prior to the occurrence of the Employee’s breach of any of the covenants set forth in Section 4(b)(i), (ii) or (iii) hereof, the Employee shall immediately deliver to the Company with respect to such exercise, an amount in cash equal to:
(A)    the aggregate Fair Market Value, determined as of the Option Exercise Date, of the shares of Common Stock issued upon such exercise; minus
(B)    the aggregate exercise price paid, whether in cash or by the delivery or withholding of shares of Common Stock, upon such exercise.
(ii)    Termination of All Options.  All outstanding Options shall be terminated and forfeited.
(b)    Triggering Events.  The events referred to in Section 4(a) hereof are as follows:
(i)    Non-Disclosure and Non-Use of Confidential Information.  The Employee agrees not to disclose, use, copy or duplicate or otherwise permit the use, disclosure, copying or duplication of any Confidential Information (other than in connection with authorized activities conducted in the course of the Employee’s employment at the Company for the benefit of the Company) during the period of including during his/her employment with the Company or at any time thereafter. The Employee agrees to take all reasonable steps and precautions to prevent any unauthorized disclosure, use, copying or duplication of Confidential Information.

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(ii)    Non-Solicitation of the Company’s Employees, Clients, and Prospective Clients.  During the time of the Employee’s employment and for a period of 24 months thereafter, the Employee shall not, without the express, prior written consent of the Company’s General Counsel, engage in any of the conduct described in paragraphs (A) and (B) below, either directly or indirectly, individually or as an employee, agent, contractor, consultant, member, partner, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly held corporation) or in any other capacity for any person, firm, partnership or corporation:
(A)    hire, attempt to hire or assist any other person or entity in hiring or attempting to hire any current employee of the Company or any person who was a Company employee within the 6-month period preceding such hiring or attempted hiring;
(B)    solicit, divert or cause a reduction in the business or patronage of any Client or Prospective Client. 
(iii)    Non-Competition.  During the time of the Employee’s employment and for a period of 12 months thereafter, the Employee shall not, without the express, prior written consent of the Company’s General Counsel, either directly or indirectly, as an employee, agent, contractor, consultant, partner, member, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly traded corporation), wherever the Company is marketing or providing its services or products, participate in any activity as, or for, a Competitor of the Company which is the same or similar to the activities in which the Employee was involved at the Company.
(c)    Waiver of Recoupment.  Notwithstanding the foregoing, the Employee shall be released from (i) all of his or her obligations under Section 4(a) hereof in the event that a Change in Control occurs within three years prior to the Employment Termination Date, and (ii) some or all of his or her obligations under Section 4(a) hereof in the event that the Committee (if the Employee is an executive officer of the Company) or the Company’s Chief Executive Officer (if the Employee is not an executive officer of the Company) shall determine, in their respective sole discretion, that such release is in the best interests of the Company.
(d)    Effect on Other Rights and Remedies.  The rights of the Company set forth in this Section 4 shall not limit or restrict in any manner any rights or remedies which the Company or any of its affiliates may have under law or under any separate employment, confidentiality or other agreement with the Employee or otherwise with respect to the events described in Section 4(b) hereof.
(e)    Reasonableness.  The Employee agrees that the terms and conditions set forth in Section 4 hereof are fair and reasonable and are reasonably required for the protection of the interests of the Company.  If, however, in any judicial proceeding any provision of Section 4 hereof 

5

is found to be so broad as to be unenforceable, the Employee and the Company agree that such provision shall be interpreted to be only so broad as to be enforceable.
(f)    Clawback.  As an additional condition of receiving this Award, the Employee agrees and acknowledges that the Award shall be subject to repayment to the Company in whole or in part in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company.
5.    Adjustments.  In the event that the outstanding securities of the class then subject to the Option are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or the like, or in the event that substantially all of the property and assets of the Company are sold, then, unless such event shall cause the Option to terminate pursuant to Section 2(e) hereof, the Committee shall make appropriate and proportionate adjustments in the number and type of shares or other securities or cash or other property that may thereafter be acquired upon the exercise of the Option; provided, however, that any such adjustments in the Option shall be made without changing the aggregate Exercise Price of the then unexercised portion of the Option.
6.    Exercise.  The Option shall be exercisable during the Employee’s lifetime only by the Employee or by his or her guardian or legal representative, and after the Employee’s death only by the person or entity entitled to do so under the Employee’s last will and testament or applicable intestate law.  The Option may only be exercised by the delivery to the Company of a written notice of such exercise, in the form specified by the Company, which notice shall, among other things, specify the number of Option Shares to be purchased and the aggregate Exercise Price for such shares, together with payment in full of such aggregate Exercise Price by check or pursuant to the Company’s cashless exercise program; provided, however, that payment of such aggregate Exercise Price may instead be made, in whole or in part, by the delivery to the Company of shares of Common Stock (including Option Shares otherwise issuable upon such exercise), which delivery effectively transfers to the Company good and valid title to such shares, free and clear of any pledge, commitment, lien, claim or other encumbrance (such shares to be valued on the basis of the aggregate Fair Market Value thereof on the date of such exercise), provided that the Company is not then prohibited from purchasing or acquiring such shares of Common Stock.
7.    Notices.
Unless the Company notifies the Employee in writing of a different procedure, any notice or other communication to the Company with respect to this Award shall be in writing and shall be:
(a)    by registered or certified United States mail, postage prepaid, to Computer Sciences Corporation, Attn: Corporate Secretary, 3170 Fairview Park Drive, Falls Church, VA 22042; or

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(b)    by hand delivery or otherwise to Computer Sciences Corporation, Attn: Corporate Secretary, 3170 Fairview Park Drive, Falls Church, VA 22042.
Any notices provided for in this Agreement or in the Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the Company to the Employee, five days after deposit in the United States mail, postage prepaid, addressed to the Employee at the address specified at the end of this Agreement or at such other address as the Employee hereafter designates by written notice to the Company.
8.    Stock Exchange Requirements; Applicable Laws.  Notwithstanding anything to the contrary in this Agreement, no Option Shares purchased upon exercise of the Option, and no certificate representing all or any part of such shares, shall be issued or delivered if, in the opinion of counsel to the Company, such issuance or delivery would cause the Company to be in violation of, or to incur liability under, any securities law, or any rule, regulation or procedure of any U.S. national securities exchange upon which any securities of the Company are listed, or any listing agreement with any such securities exchange, or any other requirement of law or of any administrative or regulatory body having jurisdiction over the Company.
9.    Nontransferability.  Neither the Option nor any interest therein may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other than by will or the laws of descent and distribution.
10.    Plan.  The Option is granted pursuant to the Plan, as in effect on the Grant Date, and is subject to all the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that no such amendment shall deprive the Employee, without his or her consent, of the Option or of any of the Employee’s rights under this Agreement.  The interpretation and construction by the Committee of the Plan, this Agreement, the Option and such rules and regulations as may be adopted by the Committee for the purpose of administering the Plan shall be final and binding upon the Employee.  Until the Option shall expire, terminate or be exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its then-current form, to the Employee or any other person or entity then entitled to exercise the Option.
11.    Stockholder Rights.  No person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any Option Shares until the Option shall have been duly exercised to purchase such Option Shares in accordance with the provisions of this Agreement.
12.    Nature of Company Option Grants.  The Employee acknowledges and agrees that:
(a)    the Plan was established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

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(b)    the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive any future Option grants, or any benefits in lieu of Options, even if the Employee has repeatedly received Option grants in the past; 
(c)    all decisions with respect to future grants of Options by the Company will be at the sole discretion of the Company; 
(d)    the Employee’s participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee’s employment relationship at any time with or without Cause;
(e)    the Employee is voluntarily participating in the Plan; 
(f)    in the event that the Employee is not an employee of the Company, the Option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the Option grant will not be interpreted to form an employment contract with the Employer or any Subsidiary of the Company;
(g)    the future value of the underlying Option Shares is unknown and cannot be predicted with certainty; 
(h)    if the underlying Option Shares do not increase in value, the Option will have no value; and
(i)    if the Employee exercises the Option, the value of the Option Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price;
13.    Successors.  The Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, on the one hand, and the Employee and his or her heirs, beneficiaries, legatees and personal representatives, on the other hand.
14.    Entire Agreement; Amendments and Waivers.  The Agreement embodies the entire understanding and agreement of the parties with respect to the subject matter hereof, and no promise, condition, representation or warranty, express or implied, not stated or incorporated by reference herein, shall bind either party hereto.  None of the terms and conditions of the Agreement may be amended, modified, waived or canceled except by a writing, signed by the parties hereto specifying such amendment, modification, waiver or cancellation.  A waiver by either party at any time of compliance with any of the terms and conditions of the Agreement shall not be considered a modification, cancellation or consent to a future waiver of such terms and conditions or of any preceding or succeeding breach thereof, unless expressly so stated.
15.    Governing Law; Consent to Jurisdiction.  The Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, United States of America, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Agreement to the substantive law of another jurisdiction.  Any action, suit or proceeding to enforce the terms and provisions of the Agreement, or to resolve 

8

any dispute or controversy arising under or in any way relating to the Agreement, may be brought in the state courts for the County of Washoe, State of Nevada, United States of America, and the parties hereto hereby consent to the jurisdiction of such courts.  
16.    Language.  If the Employee has received the Agreement or any other document related to the Plan translated into a language other than English, and the translated version is different than the English version, the English version will control.
17.    Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to the Option granted under and participation in the Plan or future Options that may be granted under the Plan by electronic means or to request the Employee’s consent to participate in the Plan by electronic means.  The Employee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
18.    Severability.  Any provision of the Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of the Agreement invalid, illegal or unenforceable in any other jurisdiction.

9

IN WITNESS WHEREOF, the parties hereto have caused this Award Agreement to be duly executed as of the Grant Date.

	
											
	EMPLOYEE
	 
	 
	 
	COMPUTER SCIENCES CORPORATION

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	Thomas E. Hogan
	 
	 
	William L. Deckelman, Jr.
	 

	 
	 
	 
	Vice President and General Counsel
	 

	The Employee acknowledges receipt of the Plan and a Prospectus relating to this award, and further acknowledges that he or she has reviewed this Agreement and the related documents and accepts the provisions thereof.
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

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Appendix A
1.    Definitions.
For purposes of this Agreement:
(a)    “Applicable Restrictive Period” shall mean, with respect to each exercise of an Option, the period set forth in Section 4(b)(i), (ii) or (iii) hereof, respectively.
(b)    “Cause” shall have the meaning given such term in the Computer Sciences Corporation Severance Plan for Senior Management and Key Employees, as Amended and Restated Effective October 28, 2007.
(c)    “Client” means any client with respect to whom the Employee provided services, on behalf of whom the Employee transacted business, or with respect to whom the Employee possessed Confidential Information during the 12-month period preceding each of (i) the date the Employee engages in an act described in Section 4(b)(ii)(B) and (ii) the date of the termination of the Employee’s employment with the Company for any reason.
(d)    “Competitor” means an individual, business or any other entity or enterprise engaged or having publicly announced its intent to engage in business that is substantially similar to the Company’s business. For purposes of this Agreement, the parties specifically agree that: the Company is engaged in the business of providing technology-enabled solutions and services; that the Company’s capabilities include, but are not limited to, system design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting; and that the Company actively solicits business and services clients located throughout the United States and the world.  A non-exhaustive list of the Company’s Competitors includes Accenture, Xerox/ACS, HP/EDS, General Dynamics, IBM, L-3 Communications, Lockheed Martin, Northrop Grumman, Dell/Perot Systems, SAIC, Oracle/Sun Microsystems, Unisys Corporation, Infosys, WiPro, Tata, Cognizant, or any subsidiary or affiliate thereof.
(e)    “Confidential Information” means all Company trade secrets, patents, copyrights, confidential or proprietary business information and data, sales and financial data, pricing information, manufacturing and distribution methods, information relating to the Company’s business plans and strategies including, but not limited to, customers and/or prospects, or lists thereof, marketing plans and procedures, research and development plans, methods of doing business, both technical and non-technical, information relating to the design, architecture, flowcharts, source or object code and documentation of any and all computer software products which the Company has developed, acquired or licensed or is in the process of developing, acquiring or licensing or shall develop, acquire or license in the future, hardware and database technologies or technological information, formulae, designs, process and systems information, intellectual property rights, and any other confidential or proprietary information which relates to the business of the Company or to the business of any client or vendor of the Company or any other party with whom the Company agrees to hold information in confidence, whether patentable, copyrightable or protectable as trade secrets or not.  Confidential Information does not include information which 

11

is (i) already known by the Employee without an obligation of confidentiality, (ii) publicly known or becomes publicly known through no unauthorized act of the Employee, (iii) rightfully received from a third party without an obligation of confidentiality, (iv) disclosed without similar restrictions by the Company to a third party (other than an affiliate or customer of the Company), or (v) approved by the Company, in writing, for disclosure.
(f)    “Employer” shall mean the Employee’s employer.
(g)    “Good Reason” shall have the meaning given such term in the Computer Sciences Corporation Severance Plan for Senior Management and Key Employees, as Amended and Restated Effective October 28, 2007 (the “Severance Plan”); provided that any reference to the term “Change of Control” in the Severance Plan definition of “Good Reason” shall be construed, solely for the purposes of this Agreement, as a reference to the date immediately prior to the Good Reason event.
(h)    “Option Exercise Date” shall mean, with respect to each exercise of an Option, the date upon which such Option is exercised.
(i)    “Prospective Client” means any individual or enterprise who is not a Client but with whom the Company was in active business discussions or negotiations at any time during either (i) the date the Employee engages in an act described in Section 4(b)(ii)(B) or (ii) the 12-month period preceding the termination of the Employee’s employment with the Company for any reason and in each case whose identity became known to the Employee in connection with the Employee’s relationship with or employment by the Company.

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Appendix B
1.    Data Privacy.
(a)    In order to implement, administer, manage and account for the Employee’s participation in the Plan, the Company and/or the Employer may:
(i)    collect and use certain personal data regarding the Employee, including, without limitation, the Employee’s name, home address and telephone number, work address and telephone number, work e-mail address, date of birth, social insurance or other identification number, term of employment, employment status, salary, nationality and tax residence, and any details regarding the terms and conditions, grant, vesting, exercise, cancellation, termination and expiration of all stock options and other stock based incentives granted, awarded or sold to the Employee by the Company (collectively, the “Data”);
(ii)    transfer the Data to any third parties who may be involved in the implementation, administration and/or management of the Plan, which recipients may be located in the Employee’s country or in other countries that may have different data privacy laws and protections than the Employee’s country;
(iii)    transfer the Data to a broker or other third party with whom the Employee has elected to deposit any Option Shares acquired upon exercise of the Option; and
(iv)    retain the Data for only as long as may be necessary in order to implement, administer, manage and account for the Employee’s participation in the Plan.
(b)    The Employee hereby explicitly and unambiguously consents to the collection, use, transfer and retention of the Data, as described in this Agreement, in electronic or other form, for the exclusive purpose of implementing, administering, managing and accounting for the Employee’s participation in the Plan.
(c)    The Employee understands that by contacting his or her local human resources representative, the Employee may:
(i)    view the Data;
(ii)    correct any inaccurate information included within the Data;
(iii)    request additional information regarding the storage and processing of the Data; and
(iv)    request a list with the names and addresses of any potential recipients of the Data.

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(d)    The Employee understands that he or she may refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative.  The Employee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan.  For more information on the consequences of the Employee’s refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative.

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