Document:

Ex10.5LeidosIncKeyExecutiveStockDeferralPlan

EXHIBIT 10.5

LEIDOS, INC.
KEY EXECUTIVE STOCK DEFERRAL PLAN

TABLE OF CONTENTS
Page
ARTICLE I PURPOSE AND EFFECTIVE DATE    1
ARTICLE II DEFINITIONS    1
2.1.    Account    1
2.2.    Beneficiary    1
2.3.    Board    1
2.4.    Bonus Compensation Plan    1
2.5.    Capital Restructuring Dividend    1
2.6.    Code    1
2.7.    Committee    1
2.8.    Company    2
2.9.    Company Stock    2
2.10.    Deferral    2
2.11.    Deferral Authority    2
2.12.    Deferrable Amount(s)    2
2.13.    Director    2
2.14.    Distribution Date    2
2.15.    Dividend Equivalent    2
2.16.    Employee    2
2.17.    Equity Incentive Plan    2
2.18.    Fair Market Value    2
2.19.    Ordinary Dividend    3
2.20.    Ordinary Dividend Equivalent Amount    3
2.21.    Participant    3
2.22.    Plan    3
2.23.    Plan Year    3
2.24.    Retirement Date    3
2.25.    Separation From Service    3

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2.26.    Share Unit    3
2.27.    Termination of Affiliation    3
2.28.    Trust    4
2.29.    Trustee    4
ARTICLE III PARTICIPATION    4
3.1.    Designation by Deferral Authority    4
3.2.    Deferral Elections    4
3.3.    Amounts Subject to Deferral    5
3.4.    Deferral Election Irrevocable    5
3.5.    Deferrals May be Held in Trust    5
ARTICLE IV TRUST FUND    6
4.1.    Trust Fund Established    6
		
	4.2.
	Company, Board, Deferral Authority, Committee and Trustee Not Responsible for Adequacy of Trust Fund    6

4.3.    Invasion of Trust by Creditors    6
4.4.    Trust Expenses    6
ARTICLE V ACCOUNTS    6
5.1.    Committee to Maintain Accounts    6
5.2.    Additional Accounting Procedures    6
5.3.    Limitation on Benefits    7
5.4.    Vesting of Account Balances    7
5.5.    Ordinary Dividend Equivalents    7
ARTICLE VI RIGHTS IN ACQUIRED STOCK    7
6.1.    Power to Vote Stock Rests With Trustee    7
6.2.    Tender Offers    7
6.3.    Dividends    7
ARTICLE VII DISTRIBUTIONS    8
7.1.    Time of Commencement of Distribution    8
7.2.    Form of Distribution    8
7.3.    Methods of Distribution    8

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7.4.    Beneficiary Designation    10
7.5.    Distribution to Guardian    10
7.6.    Withholding of Taxes    11
7.7.    Distribution of Dividend Equivalents    11
ARTICLE VIII ACCELERATION OF DISTRIBUTION    11
8.1.    Change in Control    11
8.2.    Hardship    12
ARTICLE IX SOURCE OF PAYMENT    12
9.1.    No Direct Interest in Trust Assets    12
ARTICLE X PLAN TERMINATION AND AMENDMENT    13
10.1.    Termination and Amendments    13
ARTICLE XI PLAN ADMINISTRATION    13
11.1.    Committee    13
11.2.    Committee Powers    13
11.3.    Plan Expenses    14
11.4.    Reliance Upon Documents and Opinions    15
11.5.    Requirement of Proof    15
11.6.    Reliance on Committee Memorandum    15
11.7.    Limitation on Liability    15
11.8.    Indemnification    15
ARTICLE XII MISCELLANEOUS PROVISIONS    16
12.1.    Restrictions on Plan Interest    16
12.2.    No Enlargement of Employee Rights    16
12.3.    Rights of Repurchase and First Refusal for the Company    17
12.4.    Mailing of Payments    17
12.5.    Inability to Locate Participant or Beneficiary    17
12.6.    Governing Law    17
12.7.    Illegality of Particular Provision    17
12.8.    Interpretation    17
12.9.    Tax Effects    17

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12.10.    Receipt or Release    18
12.11.    Records    18
12.12.    Arbitration    18
12.13.    Recoupment of Awards    18

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LEIDOS, INC.
KEY EXECUTIVE STOCK DEFERRAL PLAN
ARTICLE I 
PURPOSE AND EFFECTIVE DATE
This Plan is an unfunded, deferred compensation arrangement established by Leidos, Inc. (the “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, and was amended and restated effective January 1, 2005 to comply with Section 409A of the Code and amended and restated effective September 27, 2013.
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, to record the number of Share Units credited as a result of such deferrals, to record the Participant’s Ordinary Dividend Equivalent Amounts and to record the number of Share Units credited as a result of such Ordinary Dividend Equivalent Amounts. 
2.2.    Beneficiary.  The person or persons properly designated by the Participant, in accordance with Section 7.4, to receive the benefits provided herein upon death of the Participant.
2.3.    Board.  The Board of Directors of Leidos, Inc., or its ultimate parent corporation, if any.
2.4.    Bonus Compensation Plan.      The Company’s 1984 Bonus Compensation Plan, and any successor plan, including the Equity Incentive Plan.
2.5.    Capital Restructuring Dividend.  The non-recurring cash dividend paid by the Company in 2006 on shares of Company Stock in connection with the Company’s capital restructuring and the initial public offering of Company Stock.

2.6.    Code.      The Internal Revenue Code of 1986, as amended.
2.7.    Committee.  The committee composed of such members as shall be appointed from time to time by the Board to administer the Plan. 
2.8.    Company.  Leidos, Inc. (or its ultimate parent corporation, if any).  In addition, unless the context indicates otherwise, as used in this Plan the term Company shall also mean and include any direct or indirect subsidiary of the Company which has been approved by the Deferral Authority for participation in this Plan by its Employees.
2.9.    Company Stock.  The common stock of Leidos Holdings, Inc., par value $0.0001 per share, or any other security (including preferred stock) of the Company or the Company’s ultimate parent corporation, if any, designated as Company Stock by the Committee.
2.10.    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.  Deferrals shall be denominated as Share Units.
2.11.    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.
2.12.    Deferrable Amount(s).  The bonus, if any, payable to an Employee or Director, in accordance with Company procedures under the 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.
2.13.    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.
2.14.    Distribution Date.  The date when distributions begin under the Plan, as specified in Section 7.1.
2.15.    Dividend Account.  The portion of a Participant’s Account maintained by the Committee to record the Participant’s Ordinary Dividend Equivalent Amounts.
2.16.    Dividend Equivalent
2.17.    Employee.  A management or highly compensated employee of the Company.

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2.18.    Equity Incentive Plan.  The 2006 Equity Incentive Plan and any successor plan.
2.1.    Fair Market Value.  
(1)    If the Company Stock is being valued in connection with a transaction (such as the crediting of amounts to an Account or a distribution) for which the Committee determines there is a corresponding transaction by the Trust, the net price per share of Company Stock purchased or the net proceeds per share of Company Stock sold in the transaction by the Trust, in each case including all expenses of such transaction by the Trust.  
(2)    If paragraph (1) does not apply, (a) the closing price of the Company Stock on the New York Stock Exchange on the date for which the fair market value is determined, or, if there is no trading of the Company Stock on such date, then the closing price of the Company Stock on the New York Stock Exchange on the next preceding date on which there was trading in such shares; or (b) if the Company Stock is not listed, admitted or quoted, the Committee may designate such other source of data as it deems appropriate for determining such value for purposes of this Plan.
2.2.    Ordinary Dividend.  All cash dividends or other cash distributions, other than the Capital Restructuring Dividend, paid by the Company on shares of Company Stock.
2.3.    Ordinary Dividend Equivalent Amount.  The amount of Ordinary Dividends credited by the Company to a Participant’s Account.  Such amount to be equal to the per share Ordinary Dividend paid by the Company on its Company Stock multiplied by the number of Share Units credited to the Participant’s Account as of the related dividend payment record date.
2.4.    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.
2.5.    Plan.  The Science Applications International Corporation Key Executive Stock Deferral Plan, as set forth herein and as amended from time to time.
2.6.    Plan Year.  January 1 through December 31.
2.7.    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.  Effective January 1, 2005, a Retirement Date shall not occur unless the Employee or Director has had a Separation From Service.
2.8.    Separation From Service.  The death, retirement or termination of the Employee’s employment with the Company, or in the case of a Director, ceasing to perform 

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services for the Company as a member of the Board.  This definition of Separation From Service shall be interpreted and construed in a manner intended to comply with Code Section 409A and the published authorities thereunder.  
2.9.    Share Unit.  The interest of a Participant in a share of Company Stock held in the Participant's Account.  A full Share Unit shall be equivalent to a full share of Company Stock, and a partial Share Unit shall be equivalent to the corresponding fraction of a share of Company Stock.
2.10.    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 including, without limitation, change of status (e.g., part-time, consulting Employee, etc.) or leave of absence.  Notwithstanding the foregoing, a Termination of Affiliation shall not occur unless the Employee or Director has had a Separation From Service.
2.11.    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.
2.12.    Trustee.  Wachovia Bank 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.  The designation of eligibility by the Deferral Authority may be made in such manner as determined by the Deferral Authority, including, without limitation, establishment of criteria such as compensation level or level or authority.
3.2.    Deferral Elections.  

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(a)    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 (to the extent applicable) 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.  Effective for Deferrals on or after January 1, 2005, the last day of the Deferral election period for any Deferrable Amount other than “performance-based compensation” (as defined below) shall be no later than the last day of the calendar year prior to the first calendar year during which the Employee or Director performs services for which such Deferral Amount is earned.  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.  Furthermore, the Committee may, to the extent consistent with satisfying Code Section 409A, permit an Employee or Director to make a Deferral Election within thirty (30) days following the date such Employee or Director first becomes eligible to participate in the Plan, as indicated by the effective date of his status change in the Plan’s records.  Such a Deferral election shall be with respect to compensation earned for services performed after the election.  
(b)    If a Deferrable Amount constitutes “performance-based compensation,” then the Committee may, but need not, delay the last day of the Deferral election period.  The last day of the Deferral election period with respect to any Deferrable Amount which is considered to be performance-based compensation shall be no later than six (6) months before the end of the service period over which such Deferrable Amount is earned.  For this purpose, “performance-based compensation” means compensation where the amount of or entitlement to the compensation is contingent on the satisfaction of pre-established written performance criteria relating to a performance period of at least twelve (12) consecutive months, provided that performance-based compensation does not include any amount that will be paid regardless of performance, or based upon a level of performance that is substantially certain to be met at the 

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time the criteria is established.  Performance-based compensation must also meet any other applicable requirements established under authority issued pursuant to Code Section 409A.  
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.
3.4.    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 May be Held in Trust.  
(a)    With respect to Deferrals before January 1, 2005, 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, prior to any public offering of Company Stock, 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 directions of the Committee and terms of the Trust and the Participant shall be credited with the applicable number of Share Units.
(b)    Effective January 1, 2005, contributions to the Trust with respect to Deferrals shall be made only if the Company, in its sole discretion, determines to make such contributions. Regardless of whether the Company makes contributions to the Trust with respect to Deferrals, the Participant shall be credited with a number of Share Units equal to the Deferral.  If it becomes necessary to determine the value of a full or partial Share Unit prior to any public offering of Company Stock, such value shall be based on the then prevailing Formula Price (as determined under the Company’s Certificate of Incorporation) as of the date the Deferrable Amount would have been paid to the Participant but for the Deferral hereunder.  Following any public offering of Company Stock, such value shall be determined according to the Fair Market Value of the Company Stock as of the date the Deferrable Amount would have been paid to the Participant but for the Deferral hereunder.  However, for Deferrals made by Directors, such value shall be determined according to the Fair Market Value of the Company Stock as of the third business day of the calendar quarter following the calendar quarter in which the Deferrable Amount was earned by the Director.

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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, Board, Deferral Authority, 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 funds held in the Trust to meet and discharge any or all payments and liabilities hereunder.  All Plan benefits will be paid from the Trust assets or by the Company to the extent not paid from Trust assets, and neither the Board, Deferral Authority, Committee nor Trustee shall have any duty or liability to pay such benefits or furnish the Trust with any funds, securities or other assets.  
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 for which the Trust held assets 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 for which the Trust holds assets on a pro rata basis.
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 number of Share Units credited as a result of the Deferrals.
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.

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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 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 Bonus Compensation Plan without regard to deferral under this Plan.  The Share Units 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.
5.5.    Ordinary Dividend Equivalents. As of any date that the Company pays an Ordinary Dividend, each Participant’s Dividend Account shall be credited with an Ordinary Dividend Equivalent Amount.  Such Ordinary Dividend Equivalent Amount shall be credited to each Participant’s  Account in the form of  a number of Share Units (including partial Share Units) determined by dividing the Participant’s  Ordinary Dividend Equivalent Amount (expressed in dollars) by the Fair Market Value of a share of Company Stock as of the crediting date.  Amounts credited to a Participant’s Dividend Account shall be fully vested at all times; provided, however, that amounts credited to a Participant’s Dividend Account with respect to the portion of the Account balance attributable to bonuses of vesting restricted stock units shall vest (or be forfeited) in accordance with the provisions of Section 5.4.
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 stock of the Company.  For purposes of this Section 6.1, in determining how other shareholders voted, the Trustee shall take into account the votes of shareholders with respect to all classes of voting stock, including but not limited to 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.

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6.3.    Dividends.  All Ordinary Dividends on Company Stock held in Trust shall be held by the Trustee and reinvested as directed by the Committee.  The Capital Restructuring Dividend on Company Stock held in Trust shall be immediately disbursed by the Trustee to the Company for immediate distribution by the Company to Participants in accordance with Section 7.7.  No person (including, but not limited to, the Trustee, the Company, the Committee or the Board) shall have the authority or ability to delay the immediate transfer of the Capital Restructuring Dividend from the Trustee to the Company pursuant to this Section 6.3.
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:
(c)    the Participant's Retirement Date; or
(d)    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, except that fractional Share Units shall, as determined according to procedures established by the Committee, be distributed in kind as fractional shares or applied towards satisfying tax withholding obligations with respect to Participants’ distributions.  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 on account of 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:

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(1)    A lump sum payment of the entire Account Balance; or
(2)    A series of annual payments over a five (5) or ten (10) 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 elections for the 2004 and subsequent Plan years, a series of annual payments over a fifteen (15) year period shall be an available option for distributions following the Participant’s Retirement Date.  Each installment shall include one-fifteenth of the number of shares of Company Stock distributable to the Participant.
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 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 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.
Effective January 1, 2005, a Participant’s election of the form of distribution shall be made at the time the Participant first makes a Deferral election.  Such election of form of distribution shall be applicable to all subsequent Deferral elections by the Participant.  
(c)    Change of Distribution Election.  Except as set forth in this Section 7.3(c), a Participant’s election of form of distribution shall be irrevocable.  Each of the forms of distribution set forth in Section 7.3(b) shall be considered a single payment for purposes of Code Section 409A.  Accordingly, Participants shall be allowed to make a new form of distribution election, provided that the following requirements are satisfied:  
(1)    the election does not take effect until at least twelve (12) months after the date the election is made, and the election must be made at least twelve (12) months prior to the date the first payment would be made to the Participant absent the election; 
(2)    the commencement date of the first payment to the Participant shall be five (5) years following the date the payment would have commenced absent the change in the Participant’s election; and
(3)    no Participant may make more than one (1) new form of distribution election.

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Any attempt to change a distribution election that does not satisfy these requirements shall be void.
(d)    Other Distributions.  Distributions other than those specified in subsection (a) or (b) above shall be made as a lump sum within a reasonable period of time following a Participant's Termination of Affiliation.
(e)    Default Distribution.  If the Participant fails to make a valid election as described in subsection (b), the 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 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.
(f)    Notwithstanding the foregoing, if any stock of the Company is publicly traded on an established securities market, the distribution to any Participant who is a “specified employee” under Code Section 409A(a)(1)(B)(i) shall not be made (or commence to be made in the case of installment payments) before the earlier of (i) the date which is six (6) months after such Participant’s Separation From Service or (ii) the date of the Participant’s death.  For any twelve (12) month period commencing April 1 and ending March 31, an Employee is a “specified employee” if the Employee was a “key employee” at any time during the calendar year ending before such April 1.  A key employee is defined in Code Section 416(i) without regard to Code Section 416(i)(5).  
(g)    Notwithstanding Section 7.3(c), pursuant to a transition rule issued by the Internal Revenue Service under Code Section 409A, each Participant who has not had a Separation from Service as of December 31, 2006, shall be permitted to elect among the forms of distribution specified in Section 7.3(b) with respect to distributions made on account of the Participant’s Retirement Date.  The elections under this Section 7.3(g) shall be made pursuant to rules prescribed by the Committee, but shall in no event be made after December 31, 2006.  If a Participant does not make an election under this subsection (g), then the Participant’s previous election among forms of distribution shall continue to apply.
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.  The 

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Committee may rely upon the designation of Beneficiary or Beneficiaries last filed by the Participant in accordance with the terms of this Plan.
(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 therefore 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 shall require, as a condition to the payment of such distribution, that the taxes be withheld from such distribution.  With respect to amounts paid from the Trust, the Trustee shall deliver the withheld amounts to the Company which shall pay over the withheld taxes as required by law. The Committee may, but need not, allow the Participant to make payment to the Company in the form of a check for such withholding taxes, and the Committee may provide in its discretion for other methods of withholding acceptable to the Company.
7.7.    Distribution of Dividend Equivalents.  
(a)    Notwithstanding anything to the contrary in this Article VII, effective January 1, 2006, Dividend Equivalents with respect to the Capital Restructuring Dividend shall be distributed as set forth in this Section 7.7.
(b)    Dividend Equivalents with respect to the Capital Restructuring Dividend shall be distributed by the Company to Participants as soon as administratively feasible upon the Company’s receipt of the Capital Restructuring Dividend from the Trustee in accordance with Section 6.3.  No one (including, but not limited to, the Trustee, the Company, the Board, the 

-12-

Committee or any Participant) shall have the authority or the ability to delay the immediate distribution of Dividend Equivalents or alter the amount of Dividend Equivalents distributed with respect to the Capital Restructuring Dividend.  The distribution of Dividend Equivalents with respect to the Capital Restructuring Dividend to be made to a Participant in accordance with this Section 7.7(b) shall equal the product of (i) the Participant’s Share Units as of the record date for the Capital Restructuring Dividend, times (ii) the per share Capital Restructuring Dividend.  Immediate payment of the Dividend Equivalent upon the payment of the Capital Restructuring Dividend by the Company is intended to satisfy the requirement of Code Section 409A that payment be made as of a specified time or pursuant to a fixed schedule.
(c)    Distributions of Dividend Equivalents with respect to the Capital Restructuring Dividend shall be made in cash without interest and shall be made from the Capital Restructuring Dividend paid to the Trust and transferred to the Company pursuant to Section 6.3.
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 if any person (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than the Company, any subsidiary or employee benefit plan or trust maintained by the Company or subsidiary, during any 12-month period ending on the date of the most recent acquisition by such person, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of the Company’s stock representing thirty-five percent (35%) or more of the voting power of the Company’s then-outstanding stock; provided, however, that a transaction shall not constitute a Change in Control unless it is a “Change in the ownership or effective control” of the Company, or a change “in the ownership of a substantial portion of the assets” of the Company within the meaning of Code Section 409A.  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.  
(h)    Prior to January 1, 2005, 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 

-13-

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. 
(i)    Effective January 1, 2005, a withdrawal under this Section 8.2 shall be permitted only if the Participant incurs an “unforeseeable emergency,” as defined below.  Any such distribution shall be limited to the amount for which distribution is reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, State or local income taxes or penalties reasonably anticipated to result from the distribution).  For purposes of this Section 8.2(b), an “unforeseeable emergency” is a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse or dependent, (ii) the loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home to the extent not otherwise covered by insurance, or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  The determination of whether a Participant has an unforeseeable emergency shall be made in accordance with the authorities published pursuant to Code Section 409A.
ARTICLE IX     
SOURCE OF PAYMENT
9.1.    No Direct Interest in Trust Assets.  All distributions hereunder shall be paid solely from the Trust or from the assets of the Company, as determined by the Company.  The Company shall pay any distributions not paid by 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.  

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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 be paid out when due under the terms of the Plan.  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 prior to a Change in Control, the Committee shall be under no specific duty or obligation in this regard.  Following a Change in Control, no amendment or termination of the Plan shall adversely affect any benefits earned by Participants prior to the amendment or termination.
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.  Notwithstanding the foregoing, after a Change in Control, any findings, adoption or revision of rules or regulations, interpretations, decisions or determinations made by the Committee (including under Section 11.2) shall not be given any deference by a court or arbitrator, and if challenged by a Participant or Beneficiary, shall be reviewed on a de novo basis. 
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;

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(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; 
(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 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; and

-16-

(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.
Prior to a Change in Control, 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, and all discretionary powers conferred upon the Committee shall be absolute.  Following a Change in Control, the actions of the Committee and its exercise of discretionary powers shall be reviewed on a de novo basis if challenged by a Participant or Beneficiary.
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 Authority, 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 Authority, 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 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.

-17-

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.
ARTICLE XII     
MISCELLANEOUS PROVISIONS
12.1.    Restrictions on Plan Interest.
(g)    A Participant's interest in this Plan shall be limited to his or her Account 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.
(h)    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 

-18-

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.
(i)    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.
(j)    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 his or her Account, so that if the Company should become insolvent, the Participant or Beneficiary will have a claim against the Company and Trust assets equal to that of the Company's other general creditors (regardless of whether assets are removed from the Trust by a trustee in bankruptcy).
(k)    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.
(d)    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.
(e)    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.
(f)    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 may 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 

-19-

refusal to the extent applicable, shall be in addition to those applied to Company Stock by the Restated Certificate of Incorporation of Leidos Holdings, Inc., 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 Delaware, excluding its rules governing conflicts of laws.  Without limiting Section 12.9, it is intended that this Plan be administered and interpreted in a manner consistent with the applicable requirements of Code Section 409A, and further that the Plan be interpreted in a manner that satisfies the applicable requirements of Rule 16b-3 promulgated under the Exchange Act, so that elective deferrals will be entitled to the benefits of Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act and will not be subjected to avoidable liability thereunder.  
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 

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all claims against the Committee and the Company, and the Committee may require such Participant or 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.  Any person disputing a decision of the Committee shall submit such dispute to binding arbitration pursuant to the rules of the American Arbitration Association, to be held in Fairfax County, Commonwealth of Virginia.  In any arbitration with respect to a decision or action of the Committee taken before a Change in Control, the losing party in such arbitration proceedings shall bear the costs of arbitration, and each party shall bear its own attorneys' fees.  In any arbitration with respect to a decision or action of the Committee taken after a Change in Control, the Company shall bear the costs of arbitration (other than attorneys’ fees), and the arbitrator may make an award of attorneys’ fees; any such award shall be made according to the then-prevailing standards for judicial awards of attorneys’ fees applicable to civil actions brought under the Employee Retirement Income Security Act of 1974, as amended.
12.13.    Recoupment of Awards. Notwithstanding any other provision herein including, but not limited to, Sections 8, 10.1, 11.1 and 12.1(b), and notwithstanding any other provisions in any Deferral election or other agreement with respect to the Plan, payments made under the Plan and Accounts under the Plan shall be subject to recoupment or reduction by the Company pursuant to the Company’s recoupment policy originally adopted on June 18, 2009 by the Human Resources and Compensation Committee of the Board, as such policy may subsequently be amended (the “Recoupment Policy”).  Although consent to the Recoupment Policy by a Participant is not a prerequisite to the effectiveness of the Recoupment Policy with respect to the Participant, the filing of an election by a Participant with respect to any Deferral under the Plan shall be deemed to constitute consent by the Participant to the terms and conditions of the Recoupment Policy with respect to the Participant’s Deferrals and any and all prior Deferrals under the Plan.  For purposes of clarity, to the extent provided by the Recoupment Policy, a Participant may be required to return certain payments of Plan benefits made to the Participant, and payments that otherwise would have been made to the Participant with respect to the Participant’s Account under the Plan may be reduced or entirely eliminated.  Such actions may be taken pursuant to the Recoupment Policy without regard to whether such payments and the Participant’s Account were otherwise vested. 

-21-Ex10.6_2006_LeidosHoldingsIncEMPLOYEESTOCKPURCHASEPLAN (1)

EXHIBIT 10.6

2006 EMPLOYEE STOCK PURCHASE PLAN 
(Restated* September 27, 2013)
		
	1.
	Establishment of Plan. 

Leidos Holdings, Inc. (the “Company”) proposes to grant options for purchase of the Company’s Class A Preferred Stock or the Company’s Common Stock as determined by the Committee to eligible employees of the Company and its Participating Subsidiaries pursuant to this 2006 Employee Stock Purchase Plan (this “Plan”).  The Company intends this Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code (as may be amended from time to time), although the Company makes no undertaking or representation to maintain such qualification.  In addition, the Plan authorizes the grant of options under a Non-423 Plan Component pursuant to rules, procedures or sub-plans adopted by the Board (or its designate) designed to achieve desired tax or other objectives.  To the extent that the Company grants options to employees of its Affiliates, such grants shall be made under the Non-423 Plan Component.  Any term not expressly defined in this Plan but defined for purposes of Section 423 of the Code shall have the same definition herein. 
		
	2.
	Definitions. 

This Plan uses the following defined terms: 
(a)    “Affiliate” means any entity other than a Subsidiary in which the Company has a controlling interest and which is not a “subsidiary corporation” as defined in Section 424(f) of the Code. 
(b)    “Annual Increase” means the automatic annual increase in the Share Limit described in Section 3. 
(c)    “Board” means the Board of Directors of the Company. 
(d)    “Class A Preferred Stock” means the Class A Preferred Stock of the Company.
(e)    “Code” means the Internal Revenue Code of 1986, as amended. 
(f)    “Committee” means the Compensation Committee of the Board. 
(g)    “Common Stock” means the common stock of the Company, par value $0.0001 per share.
(h)    “Company” means Leidos Holdings, Inc., a Delaware corporation.

*  Reflects a change in the Company’s name and adjustments to share amounts to reflect a one-for-four reverse stock split, both effected on September 27, 2013.

(i)    “employee” has the meaning set forth in Section 4.
(j)    “Employee Stock Purchase Committee” means a committee consisting of one or more management employees of the Company appointed in accordance with Section 5.
(k)    “fair market value” means the value of a Share as determined under Section 10. 
(l)    “First Offering Period” means the period commencing and ending on those dates determined by the Committee. 
(m)    “Maximum Share Amount” means a maximum number of Shares which may be purchased by any employee at any single Purchase Date described in Section 12. 
(n)    “Non-423 Plan Component” means a component of this Plan which does not qualify under Section 423 of the Code. 
(o)    “Notice Period” means the period within two (2) years from the Offering Date relating to the applicable shares or one (1) year from the Purchase Date on which the applicable shares were purchased. 
(p)    “Offering Date” means the first business day of each Offering Period. 
(q)    “Offering Period” means a period of three (3) months except for the First Offering Period as set forth in Section 7 of this Plan.  The duration and timing of Offering Periods may be changed pursuant to Section 7, Section 16 and Section 29 of this Plan, provided that no Offering Period shall exceed a period of twenty-four (24) months. 
(r)    “Parent Corporation” shall have the same meaning as “parent corporation” in Section 424(e) of the Code. 
(s)    “Participating Subsidiaries” means Leidos, Inc. and such Parent Corporations, Subsidiaries or Affiliates that the Board designates from time to time as corporations that shall participate in this Plan. 
(t)    “Plan” means this 2006 Employee Stock Purchase Plan of the Company. 
(u)    “Purchase Date” means the last business day of each Purchase Period. 

2

(v)    “Purchase Period” means a period of three (3) months, except for the first Purchase Period, coincident with an Offering Period.  The duration and timing of Purchase Periods may be changed pursuant to Section 7, Section 16 and Section 29 of this Plan, provided that no Purchase Period shall exceed a period of six (6) months. 
(w)    “Reserves” means the number and type of Shares covered by each option under this Plan which has not yet been exercised and the number and type of Shares which have been authorized for issuance under this Plan, including the Annual Increase, but have not yet been placed under option. 
(x)    “Section 423 Plan” has the meaning set forth in Section 21.
(y)    “Share” means a share of the Class A Preferred Stock or Common Stock, as determined by the Committee. 
(z)    “Share Limit” means the limit on the total number of Shares available for issuance under this Plan described in Section 3. 
(aa)    “Subsidiary” shall have the same meaning as “subsidiary corporation” in Section 424(f) of the Code. 
(bb)    “Value Date” means the date the fair market value of a Share is to be determined. 
		
	3.
	Number of Shares.

The total number of Shares initially available for issuance pursuant to this Plan shall be 2,250,000 (the “Share Limit”), subject to adjustments effected in accordance with Section 16 of this Plan.  Notwithstanding the foregoing and subject to Section 16, the Share Limit shall automatically increase on February 1, 2007 and February 1 of each year thereafter until and including February 1, 2016 (unless the Plan is terminated earlier in accordance with the provisions hereof) by the “Annual Increase” which shall consist of a number of shares equal to the least of (i) 2,250,000, (ii) two percent (2%) of the number of shares of Common Stock of the Company outstanding on the last day of the immediately preceding fiscal year (measured on an converted basis with respect to outstanding shares of Class A Preferred Stock), or (iii) a lesser number determined by the Committee prior to such February 1.  To the extent the Board (or its designate) shall have implemented a Non-423 Plan Component, the Share Limit shall be reduced by the number of shares issued under the Non-423 Plan Component.  Shares issued under this Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares 

3

reacquired in private transactions or open market purchases, but all shares issued under this Plan and the Non-423 Plan Component shall be counted against the Share Limit.  
		
	4.
	Purpose.

The purpose of this Plan is to provide eligible employees of the Company and Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company through payroll deductions, to enhance such employees’ sense of participation in the affairs of the Company and Participating Subsidiaries, and to provide an incentive for continued employment.  For the purposes of this Plan, “employee” shall mean any individual who is an employee of the Company or a Participating Subsidiary.  Whether an individual qualifies as an employee shall be determined by the Committee, in its sole discretion.  The Committee shall be guided by the provisions of Treasury Regulation Section 1.423-2(e) and Section 3401(c) of the Code and the Treasury Regulations thereunder as to employees in the United States, with the intent that the Plan cover all “employees” within the meaning of those provisions other than those who are not eligible to participate in the Plan, provided, however, that any determinations regarding whether an individual is an “employee” shall be prospective only, unless otherwise determined by the Committee.  Unless the Committee makes a contrary determination, the employees of the Company shall, for all purposes of this Plan, be those individuals who are employees of the Company or a Participating Subsidiary for regular payroll purposes or are on a leave of absence for not more than 90 days.  Any inquiries regarding eligibility to participate in the Plan shall be directed to the Committee, whose decision shall be final. 
		
	5.
	Administration. 

This Plan shall be administered by the Committee.  The Committee may delegate certain administrative responsibilities to an Employee Stock Purchase Committee, including (a) prescribing, amending and rescinding rules and regulations relating to the Plan; (b) prescribing forms for carrying out the provisions and purposes of the Plan; (c) interpreting the Plan; and (d) making all other determinations deemed necessary or advisable for the administration of the Plan, including factual determinations.  Subject to the provisions of this Plan, the Committee shall have all authority to (i) determine and change the percentage discount pursuant to Section 10, (ii) determine and change the Offering Periods and Offering Dates pursuant to Section 7, (iii) determine and change the purchase price for shares pursuant to Section 10, (iv) prescribe minimum holding periods for the Shares issued under this Plan, and (v) prescribe, amend and rescind rules and regulations relating to this Plan.  All decisions of the Committee and the Employee Stock Purchase Committee shall be final and binding upon all participants.  Members of the Committee and the Employee Stock Purchase Committee shall receive no compensation for their services in connection with the administration of this Plan, other than standard fees as established from time to time by the Board for services rendered by Board members serving on 

4

Board committees.  All expenses incurred in connection with the administration of this Plan shall be paid by the Company. 
		
	6.
	Eligibility. 

Any employee of the Company or the Participating Subsidiaries is eligible to participate in an Offering Period (as hereinafter defined) under this Plan except the following: 
(a)    employees who are not employed by the Company or a Participating Subsidiary prior to the beginning of such Offering Period or prior to such other time period as specified by the Committee; 
(b)    employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted an option under this Plan with respect to such Offering Period, would own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of issued and outstanding stock of the Company or any of its Participating Subsidiaries; 
(c)    individuals who provide services to the Company or any of its Participating Subsidiaries as independent contractors who are reclassified as common law employees for any reason except for federal income and employment tax purposes; and 
(d)    employees who reside in countries for whom such employees’ participation in the Plan would result in a violation under any corporate or securities laws of such country of residence. 
Individuals who are not employees of the Company or a Participating Subsidiary shall not be eligible to participate in an Offering Period.
		
	7.
	Offering Dates. 

The Offering Periods of this Plan may be up to twenty-four (24) months in duration and may consist of up to eight (8) Purchase Periods of up to six (6) months in duration during which payroll deductions of the participants are accumulated under this Plan.  However, unless and until determined otherwise by the Committee, except for the First Offering Period, each Offering Period shall have a duration of three months and shall commence on April 1, July 1, October 1 or January 1 and each Offering Period shall have only one Purchase Period which shall run simultaneously with the Offering Period.  The First Offering Period shall commence and end on 

5

those dates determined by the Committee.  The Committee shall have the power to change the Offering Dates, the Purchase Dates and the duration of Offering Periods or Purchase Periods without stockholder approval if such change is announced prior to the relevant Offering Period or prior to such other time period as specified by the Committee. 
		
	8.
	Participation in this Plan. 

Eligible employees may become participants in an Offering Period under this Plan on the Offering Date, after satisfying the eligibility requirements, by delivering a subscription agreement to the Company prior to such Offering Date, or such other time period as specified by the Committee.  An eligible employee who does not deliver a subscription agreement to the Company after becoming eligible to participate in an Offering Period shall not participate in that Offering Period or any subsequent Offering Period unless such employee enrolls in this Plan by delivering a subscription agreement with the Company prior to such Offering Period, or such other time period as specified by the Committee.  Once an employee becomes a participant in an Offering Period by filing a subscription agreement, such employee shall automatically participate in the Offering Period commencing immediately following the last day of the prior Offering Period unless the employee withdraws or is deemed to withdraw from this Plan or terminates further participation in the Offering Period as set forth in Section 13 below.  Such participant is not required to file any additional subscription agreement in order to continue participation in this Plan. 
		
	9.
	 Grant of Option on Enrollment. 

Enrollment by an eligible employee in this Plan with respect to an Offering Period shall constitute the grant (as of the Offering Date) by the Company to such employee of an option to purchase on the Purchase Date up to that number of Shares determined by a fraction, the numerator of which is the amount accumulated in such employee’s payroll deduction account during such Purchase Period and the denominator of which is eighty-five percent (85%) (unless such percentage is changed pursuant to Section 10) of the fair market value of a Share on the Purchase Date (but in no event less than the par value of a Share), provided, however, that the number of Shares subject to any option granted pursuant to this Plan shall not exceed the lesser of (x) the maximum number of shares set by the Committee pursuant to Section 12(c) below with respect to the applicable Purchase Date, or (y) the maximum number of shares which may be purchased pursuant to Section 12(b) below with respect to the applicable Purchase Date.  The fair market value of a Share shall be determined as provided in Section 10 below.  Notwithstanding the foregoing, in the event of a change in generally accepted accounting principles which would adversely affect the accounting treatment applicable to any current Offering Period, the Committee may make such changes to the number of Shares purchased at the end of Purchase Period or the purchase price paid as are allowable under generally accepted 

6

accounting principles and as it deems necessary in the sole discretion of the Committee to avoid or minimize adverse accounting consequences. 
		
	10.
	Purchase Price. 

The purchase price per Share at which a Share shall be sold in any Offering Period shall be eighty-five percent (85%) of the fair market value of the Shares on the Purchase Date; provided that the Committee may change the purchase price to be anywhere from eighty-five percent (85%) to one hundred percent (100%) of the fair market value of a Share on the Offering Date or the Purchase Date. 
For purposes of this Plan, “fair market value” of a Share shall be determined as follows: 
(a)    Listed Stock.  If Shares are traded on any established stock exchange or quoted on a national market system, fair market value shall be the closing sales price as quoted on that stock exchange or system for the day before the Value Date as reported in The Wall Street Journal or a similar publication.  If no sales are reported as having occurred on the day before the Value Date, fair market value shall be that closing sales price for the last preceding trading day on which sales of Shares are reported as having occurred.  If no sales are reported as having occurred during the five trading days before the Value Date, fair market value shall be the closing bid for the Shares on the day before the Value Date.  If the Shares of the Company are listed on multiple exchanges or systems, fair market value shall be based on sales or bid prices on the primary exchange or system on which Shares of the Company are traded or quoted. 
(b)    Stock Quoted by Securities Dealer.  If Shares are regularly quoted by a recognized securities dealer but selling prices are not reported on any established stock exchange or quoted on a national market system, fair market value shall be the mean between the high bid and low asked prices on the day before the Value Date.  If no prices are quoted for the day before the Value Date, fair market value shall be the mean between the high bid and low asked prices on the last preceding trading day on which any bid and asked prices were quoted. 
(c)    No Established Market.  If Shares are not traded on any established stock exchange or quoted on a national market system and are not quoted by a recognized securities dealer, the Committee (following guidelines established by the Board) will determine the fair market value of the Shares in good faith. 
(d)    Class A Preferred Stock.  If shares of the Company’s Common Stock are traded on any established stock exchange or quoted on a national market system, the fair market value of shares of the Company’s Class A Preferred Stock shall be equal to the fair market value of the Company’s Common Stock, as of the relevant valuation date, for all purposes under this Plan.

7

		
	11.
	Payment of Purchase Price; Changes in Payroll Deductions; Issuance of Shares. 

(a)    The purchase price of the shares is accumulated by regular payroll deductions made during each Offering Period.  The deductions are made as a percentage of the participant’s compensation in one percent (1%) increments, not less than one percent (1%), nor greater than ten percent (10%), or such lower limit set by the Committee. Compensation shall mean, in the case of employees subject to tax in the United States, all W-2 cash compensation, including, but not limited to, base salary, wages, bonuses, incentive compensation, commissions, overtime, shift premiums, plus draws against commissions, provided, however that compensation shall not include any long term disability or workers’ compensation payments, car allowances, relocation payments, expense reimbursements or payment of dividends on non-vested stock or payments representing dividends on stock units or stock rights and further provided, however, that for purposes of determining a participant’s compensation, any election by such participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the participant did not make such election. In the case of employees not subject to tax in the United States, the Committee shall establish a comparable definition of compensation.  Payroll deductions shall commence on the first payday of the Offering Period and shall continue to the end of the Offering Period unless sooner altered or terminated as provided in this Plan.  If payroll deductions are not permitted in a jurisdiction, participants in that jurisdiction may contribute via check or pursuant to another method approved by the Committee. 
(b)    A participant may increase or decrease the rate of payroll deductions during an Offering Period by filing with the Company a new authorization for payroll deductions, in which case the new rate shall become effective for the next payroll period commencing after the Company’s receipt and processing of the authorization and shall continue for the remainder of the Offering Period unless changed as described below.  Such change in the rate of payroll deductions may be made at any time during an Offering Period.  The Committee shall have the authority to impose restrictions on the number of increases or decreases a participant may make within an Offering Period as set forth in this Subsection (b) or in Section 11(c) below.
(c)    A participant may reduce his or her payroll deduction percentage to zero (0) during an Offering Period by filing with the Company a request for cessation of payroll deductions.  Such reduction shall be effective beginning with the next payroll period after the Company’s receipt of the request and no further payroll deductions shall be made for the duration of the Offering Period unless the rate of payroll deduction is subsequently increased.  Payroll deductions credited to the participant’s account prior to the effective date of the request shall be used to purchase Shares in accordance with Subsection (e) below.  A participant may subsequently increase his or her payroll deductions during the Offering Period as long as he or she has not withdrawn participation in the Offering Period as set forth in Section 13 below.  

8

(d)    All payroll deductions made for a participant are credited to his or her account under this Plan and are deposited with the general funds of the Company.  No interest accrues on the payroll deductions, unless required by local law.  All payroll deductions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions, unless required by local law. 
(e)    On each Purchase Date, for so long as this Plan remains in effect, and provided that the participant has not submitted a signed and completed withdrawal form before that date, which notifies the Company that the participant wishes to withdraw from that Offering Period under this Plan and have all payroll deductions accumulated in the account maintained on behalf of the participant, as of that date returned to the participant, the Company shall apply the funds then in the participant’s account to the purchase of whole and fractional Shares reserved under the option granted to such participant with respect to the Offering Period to the extent that such option is exercisable on the Purchase Date.  The purchase price per share shall be as specified in Section 10 of this Plan.  In the event that this Plan has been oversubscribed, all funds not used to purchase shares on the Purchase Date shall be returned to the participant, without interest.  No Share shall be purchased on a Purchase Date on behalf of any employee whose participation in this Plan has terminated prior to such Purchase Date. 
(f)    As soon as practicable after the Purchase Date, the Company shall issue shares for the participant’s benefit representing the shares purchased upon exercise of his or her option. 
(g)    During a participant’s lifetime, his or her option to purchase shares hereunder is exercisable only by him or her.  The participant shall have no interest or voting rights in shares covered by his or her option until such option has been exercised and shares have been issued to the participant. 
		
	12.
	Limitations on Shares to be Purchased. 

(a)    No participant shall be entitled to purchase stock under this Plan at a rate which, when aggregated with his or her rights to purchase stock under all other employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which the employee participates in this Plan.  The Company shall have the authority to take all necessary action, including but not limited to, suspending the payroll deductions of any participant, in order to ensure compliance with this Section. 
(b)    No participant shall be entitled to purchase more than the Maximum Share Amount on any single Purchase Date.  Prior to the commencement of any Offering Period or prior to such time period as specified by the Committee, the Committee may, in its sole discretion, set a Maximum Share Amount.  The Maximum Share Amount shall be 625 shares.  If 

9

a new Maximum Share Amount is set, then all participants must be notified of such Maximum Share Amount prior to the commencement of the next Offering Period.  The Maximum Share Amount shall continue to apply with respect to all succeeding Purchase Dates and Offering Periods unless revised by the Committee as set forth above. 
(c)    If the number of shares to be purchased on a Purchase Date by all employees participating in this Plan exceeds the number of shares then available for issuance under this Plan, then the Company shall make a pro rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable and as the Committee shall determine to be equitable.  In such event, the Company shall give written notice of such reduction of the number of shares to be purchased under a participant’s option to each participant affected. 
(d)    Any payroll deductions accumulated in a participant’s account which are not used to purchase stock due to the limitations in this Section 12 shall be returned to the participant as soon as practicable after the end of the applicable Purchase Period, without interest unless required by local law. 
		
	13.
	Withdrawal. 

(a)    Each participant may withdraw from an Offering Period under this Plan by signing and delivering to the Company a written notice to that effect on a form provided for such purpose.  Such withdrawal may be elected at any time prior to the end of an Offering Period, or such other time period as specified by the Committee. 
(b)    Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to the withdrawn participant, without interest, and his or her interest in this Plan shall terminate.  In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume his or her participation in this Plan during the same Offering Period, but he or she may participate in any Offering Period under this Plan which commences on a date subsequent to such withdrawal by filing a new authorization for payroll deductions in the same manner as set forth in Section 8 above for initial participation in this Plan. 
(c)    At such times, if any, when there are multiple Purchase Periods within an Offering Period and the purchase price can be based on the fair market value at the beginning of the Offering Period, if the fair market value on the first day of the current Offering Period in which a participant is enrolled is higher than the fair market value on the first day of any subsequent Offering Period, the Company shall automatically enroll such participant in the subsequent Offering Period.  Any funds accumulated in a participant’s account prior to the first day of such subsequent Offering Period shall be applied to the purchase of shares on the Purchase Date immediately prior to the first day of such subsequent Offering Period, if any. 

10

		
	14.
	Termination of Employment. 

Termination of a participant’s employment for any reason, including retirement, death or the failure of a participant to remain an eligible employee of the Company or of a Participating Subsidiary, shall immediately terminate his or her participation in this Plan.  In such event, the payroll deductions credited to the participant’s account shall be returned to him or her or, in the case of his or her death, to his or her legal representative, without interest.  For purposes of this Section 14, an employee shall not be deemed to have terminated employment or failed to remain in the continuous employ of the Company or of a Participating Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the Board, provided, however that such leave is for a period of not more than ninety (90) days or reemployment upon the expiration of such leave is guaranteed by contract or statute. 
		
	15.
	Return of Payroll Deductions. 

In the event a participant’s interest in this Plan is terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is terminated by the Board, the Company shall deliver to the participant all payroll deductions credited to such participant’s account.  No interest shall accrue on the payroll deductions of a participant in this Plan, unless required by local law. 
		
	16.
	Capital Changes. 

Subject to any required action by the stockholders of the Company, the Reserves, as well as the price per Share covered by each option under this Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued and outstanding Shares resulting from a stock split or the payment of a stock dividend (but only on the Shares), any other increase or decrease in the number of issued and outstanding Shares effected without receipt of any consideration by the Company or other change in the corporate structure or capitalization affecting the Company’s present Shares, provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Committee, whose determination shall be final, binding and conclusive.  Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 
In the event of the proposed dissolution or liquidation of the Company, the Offering Period shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee.  The Committee may, in the exercise of its sole discretion in such instances, declare that this Plan shall terminate as of a date fixed by the Committee and 

11

give each participant the right to purchase shares under this Plan prior to such termination.  In the event of (i) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the options under this Plan are assumed, converted or replaced by the successor corporation, which assumption shall be binding on all participants), (ii) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (iii) the sale of all or substantially all of the assets of the Company, or (iv) the acquisition, sale, or transfer of more than fifty percent (50%) of the outstanding shares of the Company by tender offer or similar transaction, the Plan shall continue with regard to Offering Periods that commenced prior to the closing of the proposed transaction and shares shall be purchased based on the fair market value of the surviving corporation’s stock on each Purchase Date, unless otherwise provided by the Committee. 
The Committee may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per Share covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of its outstanding Shares, or in the event of the Company being consolidated with or merged into any other corporation. 
		
	17.
	Nonassignability. 

Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under this Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Sections 25 or 26 below) by the participant.  Any such attempt at assignment, transfer, pledge or other disposition shall be void and without effect. 
		
	18.
	Reports. 

Individual accounts shall be maintained for each participant in this Plan.  Each participant shall receive, as soon as practicable after the end of each Purchase Period, a report of his or her account setting forth the total payroll deductions accumulated, the number of shares purchased, the per share price thereof and the remaining cash balance, if any, carried forward to the next Purchase Period or Offering Period, as the case may be. 
		
	19.
	Notice of Disposition. 

12

Each participant shall notify the Company in writing if the participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if such disposition occurs within the Notice Period.  The Company may, at any time during the Notice Period, place a legend or legends on any certificate representing shares acquired pursuant to this Plan requesting the Company’s transfer agent to notify the Company of any transfer of the shares.  The obligation of the participant to provide such notice shall continue notwithstanding the placement of any such legend on the certificates. 
		
	20.
	No Rights to Continued Employment. 

An employee’s employment with the Company or a Subsidiary is not for any specified term and may be terminated by such employee or by the Company or a Subsidiary at any time, for any reason, with or without cause.  Nothing in this Plan shall confer upon any employee any right to continue in the employ of, or affiliation with, the Company or a Subsidiary nor constitute any promise or commitment by the Company or a Subsidiary regarding future positions, future work assignments, future compensation or any other term or condition of employment or affiliation. 
		
	21.
	Equal Rights and Privileges. 

All eligible employees shall have equal rights and privileges with respect to this Plan so that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any successor provision of the Code and the related regulations (the “Section 423 Plan”), except for differences that may be mandated by local law and that are consistent with Code Section 423(b)(5); provided, however, that participants participating in the Non-423 Plan Component by means of rules, procedures or sub-plans adopted pursuant to Section 22 need not have the same rights and privileges as participants participating in the Section 423 Plan. 
		
	22.
	Additional Provisions to Comply with Local Law. 

The Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable laws of state and local domestic United States and non-United States jurisdictions.  The Committee shall establish such sub-plans by adopting supplements to this Plan containing such additional terms and conditions not otherwise inconsistent with the Plan as the Committee shall deem necessary or desirable.  To the extent inconsistent with the requirements of Code Section 423, such sub-plans and/or supplements shall be considered part of the Non-423 Plan Component, and the options granted thereunder shall not be considered to comply with Code Section 423.  All supplements adopted by the Committee shall be deemed to be part of the Plan and the Company shall not be required to provide copies of any supplement to participants in any jurisdiction that is not the subject of such supplement. 

13

		
	23.
	Notices. 

All notices or other communications by a participant to the Company under or in connection with this Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
		
	24.
	Term; Stockholder Approval. 

After this Plan is adopted by the Board, this Plan shall become effective on the date on which the First Offering Period commences, subject to the effectiveness of the merger of SAIC Merger Sub, Inc. with and into Leidos, Inc. (formerly known as Science Applications International Corporation).  This Plan shall be approved by the stockholders of the Company, in any manner permitted by applicable corporate law, within twelve (12) months before or after the date this Plan is adopted by the Board.  No purchase of shares pursuant to this Plan shall occur prior to such stockholder approval.  This Plan shall continue until the earlier to occur of (a) termination of this Plan by the Board (which termination may be effected by the Board at any time), (b) issuance of all of the Shares available for issuance under this Plan, or (c) ten (10) years from the approval of this Plan by the stockholders. 
		
	25.
	Death of a Non-United States Participant. 

In the event a non-United States participant dies with accumulated payroll deductions having been accumulated to purchase shares at the next Purchase Date, such amounts shall be paid to the estate of the participant. 
		
	26.
	Designation of Beneficiary. 

(a)    A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant’s account under this Plan in the event of such participant’s death subsequent to the end of an Purchase Period but prior to delivery to him of such shares and cash.  In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under this Plan in the event of such participant’s death prior to a Purchase Date. 
(b)    Such designation of beneficiary may be changed by the participant at any time by written notice.  In the event of the death of a participant and in the absence of a beneficiary validly designated under this Plan who is living at the time of such participant’s death, the Company shall deliver such shares or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares or cash to the spouse or to 

14

any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
		
	27.
	Conditions Upon Issuance of Shares; Limitation on Sale of Shares. 

Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or automated quotation system upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
		
	28.
	Applicable Law. 

The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of Delaware. 
		
	29.
	Amendment or Termination. 

The Board may at any time amend or terminate this Plan, except that any such termination cannot affect options previously granted under this Plan, nor may any amendment make any change in an option previously granted which would adversely affect the right of any participant, nor may any amendment be made without approval of the stockholders of the Company obtained in accordance with Section 24 above within twelve (12) months of the adoption of such amendment (or earlier if required by Section 24) if such amendment would: 
(a)    increase the number of shares that may be issued under this Plan; or 
(b)    change the designation of the employees (or class of employees) eligible for participation in this Plan. 
Notwithstanding the foregoing, the Board may make such amendments to the Plan as the Board determines to be advisable, including changes with respect to current Offering Periods or Purchase Periods, if the continuation of the Plan or any Offering Period would result in financial accounting treatment for the Plan that is different from the financial accounting treatment in effect on the date this Plan is adopted by the Board. 

15

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