Science Applications International Corporation Equity and Incentive Compensation Offer Letter to Matthew J. Desch

Summary

This letter from Science Applications International Corporation (SAIC) to Matthew J. Desch outlines an offer of employment that includes awards of vesting Class A Common Stock, stock options, and eligibility for incentive compensation. The agreement details the number of shares, vesting conditions, exercise prices, and participation in stock purchase opportunities, all subject to approval by SAIC's Board committees. Mr. Desch must sign and return related agreements within specified timeframes to receive the awards. The offer also includes information on deferral options and relevant plan documents.

EX-10.(R) 8 a2131959zex-10_r.htm EX-10(R)
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Exhibit 10(r)


[LETTERHEAD OF SCIENCE APPLICATIONS INTERNATIONAL CORPORATION]

VIA FEDERAL EXPRESS

June 13, 2002

Mr. Matthew J. Desch
17194 Preston Road, #102
Dallas, Texas ###-###-####

Dear Matt:

        Should you accept the offer of employment with SAIC, a recommendation will be submitted to the Bonus Compensation Committee of the Board of Directors requesting that you be awarded 30,250 shares of SAIC's vesting Class A Common Stock.1 The award of vesting stock would be on the terms set forth in the sample Stock Restriction Agreement. When the recommendation is approved, the appropriate number of shares will be credited to your account. A Stock Restriction Agreement for the vesting shares will be forwarded to you as soon as practicable after your date of hire. This Agreement will need to be signed and returned within 120 days from the award date or the award of vesting shares will be forfeited. The value of your award may vary depending upon the Formula Price of the stock in effect when the stock is issued. Currently, the Formula Price is $33.06 per share and is scheduled to be re-evaluated on July 12, 2002. The calculation of the Formula Price is described in the enclosed Prospectus. Except for applicable state and Federal taxes, this stock will be awarded at no cost to you.


1
This award may be deferred in the SAIC Key Executive Non-Qualified Deferred Compensation Plan. In order to defer your vesting stock you must complete the enclosed deferral forms and return them to Bernie Theule before your first day of work.

        A recommendation will also be submitted to the Stock Option Committee of the Board of Directors requesting that you be granted a vesting option to purchase up to 100,000 shares of SAIC's Class A Common Stock. The exercise price of such option will be the Formula Price in effect on the quarterly trade date immediately following your date of hire. The option would be on the terms set forth in the sample Stock Option Agreement and pursuant to the 1999 Stock Incentive Plan, copies of which are enclosed. When the recommendation is approved, an option agreement will be forwarded to you.

        You will also be eligible to participate in the incentive compensation plan referred to in your employment offer letter. The long-term component of your annual incentive compensation will consist of a combination of vesting stock and stock granted on option.2 Your target annual long-term bonus will be $3,300,000.00 of stock granted on option.3


2
Recommended option share grants are subject to approval by the Stock Option Committee of the Board of Directors.

3
The number of vesting shares and/or option shares granted at target will equal $3,300,000.00 divided by the Formula Price when the option and/or vesting shares are granted.

        In addition, a recommendation will be submitted to the Operating Committee of the Board of Directors requesting that you be given the opportunity to subscribe to purchase up to 10,000 shares of SAIC's Class A Common Stock in the Limited Market and, contingent upon such purchase, to receive a vesting option for up to 10,000 shares of SAIC's Class A Common Stock (one option for every share you purchase). When the recommendation is approved, a formal offer will be forwarded to you along with information on how to acquire the shares approximately three weeks prior to the trade date. This


opportunity to subscribe to purchase SAIC Class A Common Stock would be limited to the four trade dates immediately following your date of hire. The acquisition price of the stock and the exercise price of the option will be the Formula Price in effect when you purchase the stock. The option would be on the terms set forth in the sample Stock Option Agreement and would be granted pursuant to the 1999 Stock Incentive Plan, which are enclosed.

        SAIC Class A Common Stock is subject to certain restrictions described in the accompanying Article Fourth of SAIC's Certificate of Incorporation and any offering will be based upon the enclosed Prospectus. If you have any questions regarding the acquisition of SAIC's securities, please contact SAIC's Stock Programs Department at (800)  ###-###-#### in San Diego, California.

Very truly yours,

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

/s/  NANCY A. WALKER      
Nancy A. Walker
Paralegal

 

 

BT

Encl:
Article Fourth, SAIC Prospectus, sample Stock Restriction Agreement, sample Stock Option Agreement, 1999 Stock Incentive Plan
Key Executive Stock Deferral Plan (six parts)



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Exhibit 10(r)
[LETTERHEAD OF SCIENCE APPLICATIONS INTERNATIONAL CORPORATION]