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UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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FORM 8-K |
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CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
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Date of Report (Date of earliest event reported): December 15, 2015 |
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COMPUTER SCIENCES CORPORATION | |
(Exact name of Registrant as specified in its charter) | |
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Nevada | 1-4850 | 95-2043126 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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3170 Fairview Park Drive | 22042 |
Falls Church, Virginia | (Zip Code) |
(Address of Principal Executive Offices) | |
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Registrant’s telephone number, including area code (703) 876-1000 |
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Not Applicable |
(Former Name or Former Address, if Changed Since Last Report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
CEO Performance Award
On December 15, 2015, Computer Sciences Corporation (the “Corporation”) granted a performance-based retention award (the “Performance Award”) to J. Michael Lawrie, the Corporation’s Chief Executive Officer, with a total grant-date value of $10,000,000. The Performance Award is in the form of 338,869 performance-vested restricted stock units (“PSUs”).
Each PSU will entitle Mr. Lawrie to receive one share of the Corporation’s common stock and any related dividend equivalents, subject to the achievement of certain performance goals. 37.5% of the Performance Award (the “Financial Component”) will vest on December 15, 2018 subject to the Corporation’s achievement of certain earnings-per-share (EPS) goals for its 2018 fiscal year. A threshold of 50% of the Financial Component will vest if the Corporation achieves the EPS goal for its 2018 fiscal year at which 50% of the Corporation’s annual-cycle PSUs granted in May 2016 (as adjusted for the recent spinoff of CSRA Inc. from the Corporation, the “FY16 Cycle PSUs”) pay out (the “FY18 EPS Threshold”). Up to a maximum of 100% of the Financial Component will vest if the Corporation achieves the EPS goal for its 2018 fiscal year at which 100% of the FY16 Cycle PSUs pay out (the “FY18 EPS Target”). No portion of the Financial Component will vest if the Corporation does not achieve at least the FY18 EPS Threshold.
The remaining 62.5% of the Performance Award will vest 50% on or about March 31, 2017, 25% on September 30, 2017 and the remaining 25% on March 31, 2018, subject in each case to the Company’s achievement of 60% of the Corporation’s target EPS goal for its 2017 fiscal year and an assessment by the Corporation’s board of directors (the “Board”) of the Corporation’s organizational health for the period ending March 31, 2017, based on such factors as (but not limited to) management succession, enterprise risk and competitive positioning.
Mr. Lawrie generally must remain employed with the Corporation through each vesting date in order to vest in the applicable portion of the Performance Award, subject to the terms of his employment agreement with the Corporation which provides that in the event of a “Qualifying Termination” or if Mr. Lawrie resigns without “Good Reason” (as defined therein), in each case on or after April 1, 2017, any outstanding PSU awards as to which at least one (1) year in the performance period has lapsed at the time of termination shall remain outstanding and eligible to vest, based on performance as if termination had not occurred.
Other NEO Performance Awards
On December 15, 2015, the Corporation also granted performance-based retention awards to Paul N. Saleh, the Corporation’s Executive Vice President and Chief Financial Officer, and James R. Smith, the Corporation’s Executive Vice President and General Manager, with a total grant date value of $3,500,000 and $2,600,000, respectively. The awards were in the form of 118,604 PSUs for Mr. Saleh and 88,106 PSUs for Mr. Smith.
Each PSU will entitle each of Messrs. Saleh and Smith to receive one share of the Corporation’s common stock and any related dividend equivalents, subject to the achievement of certain performance goals and his continued employment. Each award will vest on December 15, 2018 subject to the Corporation’s achievement for its 2018 fiscal year of the same EPS goals that apply to the Financial Component of Mr. Lawrie’s Performance Award. A threshold of 50% of each award will vest subject to
the Corporation’s achievement of the FY18 EPS Threshold and up to a maximum of 100% of each award will vest subject to the Corporation’s achievement of the FY18 EPS Target.
In addition, Mr. Saleh is eligible for earlier vesting in a portion of his award. Mr. Saleh is eligible to vest in one-third of his award on December 15, 2016 if EPS achievement for fiscal year 2016 equals or exceeds the FY18 EPS Threshold. In addition, one-third of his award may vest on December 15, 2017 if EPS achievement for fiscal year 2017 equals or exceeds the FY18 EPS Threshold (if not achieved for fiscal year 2016) or if EPS performance for fiscal year 2017 equals or exceeds the EPS goal at which 75% of the FY16 Cycle PSUs vest. Any portion of Mr. Saleh’s award that vests early will reduce the amount of his award that may vest on December 15, 2018 based on EPS performance for fiscal year 2018 as described above.
On December 15, 2015, the Board of Directors (the "Board") of Computer Sciences Corporation (the "Company") appointed Mr. Mukesh Aghi and Mr. Herman Bulls as members of the Board. Mr. Aghi will serve on the Company's Compensation and Nominating and Corporate Governance Committees, and Mr. Bulls will serve on the Company's Nominating and Corporate Governance Committee. Messrs. Aghi and Bulls will participate in the Company’s compensation program for non-employee directors. In addition, each has executed the Company’s standard form of non-employee director indemnification agreement. The form of the indemnification agreement was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on February 22, 2010.
Also on December 15, 2015, the Board appointed Mr. J. Michael Lawrie, the CEO, as Chairman of the Board, and the independent directors of the Board elected Mr. Bruce B. Churchill to serve in the newly established Lead Independent Director role.
Effective December 15, 2015, Mr. Rodney F. Chase and Mr. Erik Brynjolfsson each resigned from the Board. Messrs. Chase and Brynjolfsson's resignations are not the result of any disagreement with the policies, practices or procedures of the Company.
A copy of the press release issued on December 15, 2015 announcing the appointments of Messrs. Aghi, Bulls, Lawrie and Churchill is attached hereto as Exhibit 99.1.
Effective as of December 15, 2015 the composition of the Committees of the Company's Board is as follows:
Audit Committee
Brian Patrick MacDonald, Chair
Robert F. Woods
Peter Rutland
J. Michael Lawrie, ex officio
Compensation Committee
Mark Foster, Chair
Sachin Lawande
Mukesh Aghi
J. Michael Lawrie, ex officio
Nominating and Corporate Governance Committee
Bruce B. Churchill, Chair
Herman Bulls
Mukesh Aghi
J. Michael Lawrie, ex officio
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are filed herewith.
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Exhibit No. | Description |
99.1 | Press Release, dated December 15, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.
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| | COMPUTER SCIENCES CORPORATION |
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Dated: December 21, 2015 | By: /s/ Paul N. Saleh |
| | Paul N. Saleh |
| | Executive Vice President and Chief Financial Officer |
Exhibit Index
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Exhibit No. | Description |
99.1 | Press Release, dated December 15, 2015. |
Exhibit 99.1
CSC Board of Directors Appoints Mike Lawrie Chairman and Adds Two New Directors
Mukesh Aghi and Herman E. Bulls join the CSC Board;
Bruce Churchill named Lead Independent Director;
Chairman Rodney Chase and Director Erik Brynjolfsson retire
FALLS CHURCH, Va., Dec. 15, 2015--CSC (NYSE: CSC) today announced the appointment of Mike Lawrie, CSC president and CEO, as chairman of the company’s Board of Directors, along with the appointments of Dr. Mukesh Aghi and Herman E. Bulls as directors. Chairman Rodney F. Chase, who has served as a director since 2001, and Erik Brynjolfsson, who became a director of CSC in 2010, have retired from the company’s Board.
“For well more than a decade, Rodney Chase has served CSC with great commitment and distinction,” Lawrie said. “On behalf of our board, I want to thank both Rodney and Erik for their outstanding service to our company and shareholders. And I want to welcome Mukesh and Herman, both of whom bring proven leadership skills and extensive global business experience, to our board.”
Additional board actions included the appointment of Bruce Churchill in the role of Lead Independent Director, reflecting the company’s commitment to strong corporate governance. Churchill was also appointed Chairman of the Nominating and Corporate Governance Committee.
Additionally, Peter Rutland will serve on the Audit Committee. Aghi will serve on the Compensation Committee and on the Nominating and Corporate Governance Committee. Bulls will serve on the Nominating and Corporate Governance Committee.
Mukesh Aghi
Aghi is president of the U.S.-India Business Council and has more than 27 years of experience across diverse industries. He served as chairman and CEO of Steria India. He has also served as president of IBM India and worked with J.D. Edwards and Ariba, with postings in France, the United Kingdom, Japan, Singapore, India and the United States. Aghi has been associated with Universitas 21 Global, the world's largest consortium of research-led universities and a global leader in providing post-graduate online education.
Aghi holds an advanced Management Diploma from Harvard Business School, an MBA in International Marketing from Andrews University, Michigan, and a Ph.D. in International Relations from Claremont Graduate University in California. He earned a BA in Business Administration from the Middle East College, Beirut, Lebanon.
Herman E. Bulls
Bulls is vice chairman, Americas of JLL, an international financial and professional services firm that specializes in commercial real estate services and investment management. He founded and led the firm’s Public Institutions specialty as chairman and CEO and currently serves as International Director of JLL Global Markets, focusing on client relationships and mergers and acquisitions. He also co-founded and served as president and CEO of Bulls Capital Partners, a commercial mortgage banking firm. Before joining JLL, Bulls completed nearly 12 years of active duty service with the United States Army and retired as a Colonel in the U.S. Army Reserves.
Bulls is a member of the Executive Leadership Council, an organization of senior African American business executives from Fortune 500 companies, and former chairman of the Executive Leadership Foundation. He is former vice chairman of the West Point Association of Graduates board of directors. He earned a BS degree in engineering from the U.S. Military Academy at West Point and a MBA degree in finance from Harvard Business School.
Bulls also serves on the boards of Tyco International and Comfort Systems, USA.
About CSC
CSC (NYSE: CSC) leads clients on their digital transformation journeys. The company provides innovative next-generation technology services and solutions that leverage deep industry expertise, global scale, technology independence and an extensive partner community. CSC serves leading commercial and international public sector organizations throughout the world. CSC is a Fortune 500 company and ranked among the best corporate citizens. For more information, visit us at www.csc.com.
Contacts
Rich Adamonis, Global Media Relations, CSC, 862.228.3481, radamonis@csc.com
Neil DeSilva, Investor Relations, 703.641.3000, neildesilva@csc.com
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