Option Exercise Methods

An option exercise requires payment for the following costs:

• Option Cost (Options Exercised multiplied by Option Price)
• Tax Withholding due on the difference between the option price and the stock price or "Gain" on the date of exercise.
• Transaction Fee
• Brokerage Fee (applies to cashless hold method)

Exercise Methods

• 1. Cashless Hold for Option Cost, Taxes and Fee
• 2. Stock Swap for Option Cost, Cash for Taxes and Fee
• 3. Stock Swap for Option Cost, Stock Withheld for Taxes and Cash for Fee (Full Stock Swap)
• 4. Cash for Option Cost and Fee, Stock Withheld for Taxes
• 5. Cash for Option Cost, Taxes and Fee
• Working Example of an Option Exercise Using All Methods

1. Cashless Hold for Option Cost, Taxes and Fee

   If you choose this exercise method, shares will be sold to cover the option cost and the transaction fee. Shares will also be withheld to cover taxes. The number of shares of SAIC, Inc. common stock equivalent to the net share gain will be issued to your BNY Mellon Equity Holdings common stock account upon finalization of the transaction. This method is an attractive choice to many optionees who do not wish to send cash for their option exercise. It is also often used by those do not have enough shares to utilize the stock swap method to exercise their options. The cashless hold exercise method nets virtually the same number of shares as the stock swap method. No payment or documents are required to be sent to BNY Mellon for the cashless hold method; however, you must still submit your option exercise request to BNY Mellon online or by telephone.

   Critical time constraints you should be aware of if you choose to use the cashless hold option exercise method:

   • An option exercise using the cashless hold method can be submitted between the hours of 12:01 a.m. and 4 p.m. ET, Monday through Friday, and anytime Saturday or Sunday. In the case of an early closing of the New York Stock Exchange, this window will be reduced from 12:01 a.m. until that day's market closing time.
   • If your option expires on a business day, you must submit your exercise online or by telephone no later than 4 p.m. ET on the expiration date.
   • If your option expires on a weekend, you must submit your exercise online or by telephone no later than 4 p.m. ET on the Friday prior to that weekend.
   • Since the cashless hold exercise is not processed until the following business day after submission, an option cannot be exercised timely on its expiration date using the cashless hold method.

2. Stock Swap for Option Cost, Cash for Taxes and Fee

   A stock swap allows you to pay the exercise price of an option primarily by using stock that you already own instead of paying all cash. If you choose this exercise method, you are required to send payment for any residual amount the stock swap does not cover, the tax withholdings and transaction fee. The number of option shares that you exercise less the number of shares swapped would be issued to your account.

   Shares Must Be Directly Owned

   In general, to determine if you can do a stock swap, you need to first determine whether you directly own enough shares of SAIC, Inc. common stock to swap. The only shares that can be swapped are shares of SAIC, Inc. common stock that are registered in your name only in your Equity Holdings account at BNY Mellon, in your ESPP account at BNY Mellon or at another brokerage firm. Shares or share equivalents that you might hold in the retirement plans or in a deferred compensation plan are not eligible to be swapped.

   In addition, these shares must not have any restrictions on your ability to deliver or transfer them to the company. Therefore, if any shares of stock have been pledged as collateral for a loan, these shares would not be eligible to be swapped as the pledge to the bank would prevent delivery of these shares to the company.

   If your stock is held in an account that is not in your name such as a trust, you will need to transfer enough shares to your individual account prior to your option exercise in order to be able to use these shares for a stock swap. To transfer SAIC, Inc. common stock held at BNY Mellon, use the stock transfer form. Please allow enough time for this transfer to occur before you submit an option exercise. Transfers will add a number of business days to the time required to exercise an option.

   In all cases optionees are urged to be mindful of expiration dates of their options as these dates will not be extended. If you submit your option exercise online, within the application you must attest to your stock ownership by reading the attestation and checking the "I attest" box.

   If you submit your option exercise by telephone via a customer service representative or the Interactive Voice Response System, you must download, print, complete and submit the paper version of the Attestation Form. If you choose to exercise more than one option at the same time using the stock swap method and have submitted your exercise transactions by telephone, only one Attestation Form needs to be submitted.

   The attestation documents your certification that you own the shares being used in a stock swap (including that they are registered in your name only).

   If you have questions about whether or not your shares are eligible for a stock swap, you may contact Stock Programs at 800-785-7764.

3. Stock Swap for Option Cost, Stock Withheld for Taxes and Cash for Fee (Full Stock Swap)

   A stock swap allows you to pay the exercise price of an option primarily by using stock that you already own instead of paying all cash. See details above regarding stock swaps. If you choose to do a full stock swap, instead of paying cash to cover the tax withholding associated with the exercise of your options, BNY Mellon will withhold the number of the new option shares necessary to pay tax withholding. You are required to send payment for any residual amount the stock swap does not cover and the transaction fee. The number of option shares that you exercise less the number of shares swapped and the number of shares withheld for tax would be issued to your account.

4. Cash for Option Cost and Fee, Stock Withheld for Taxes

   If you choose this exercise method, you are required to send payment for the option cost and the transaction fee. Under this method, instead of paying cash to cover the tax withholding associated with the exercise of your options, BNY Mellon will withhold the number of the new option shares necessary to pay the tax withholding. The number of option shares that you exercise less the number of shares withheld for tax would be issued to your account.

5. Cash for Option Cost, Taxes and Fee

   If you choose this exercise method, you are required to send payment for the option cost, the tax withholdings and the transaction fee. The full number of option shares that you exercise would be issued to your account.

Working Example of an Option Exercise Using All Methods

For example, an employee exercises 1,000 options with the following conditions:

• Option Price: $18.70
• Fair Market Value of SAIC, Inc. common stock at time of exercise: $21

The table below illustrates the results of the option exercise using each of the five exercise methods:

¹ Assuming 42.75 percent tax rate.
² Excess cash from shares used to cover tax.
³ Total excess cash from shares used to cover option cost, fees and tax added to Federal tax.
⁴ Cashless hold method only.
* Cash components for the exercise