Leidos 401(k) match, vesting and fees

Participant’s elective deferrals and rollover contributions together with associated earnings vest immediately. Company contributions vest 25% for each of the first two calendar years during which the participant works at least 850 hours and become fully vested after the participant completes three years of vesting service, as defined by the Plan. In addition, participants become fully vested in Company contributions while employed with the Company upon reaching age 59-1/2, permanent disability, or death. Upon termination of employment with the Company, participants forfeit any portion of Company contributions that have not yet vested when they take a full distribution or after five consecutive one-year breaks in service. Forfeitures may be applied to future Company matching 401(k) contributions, to provide reinstatement due to military leave, to increase profit sharing contributions, or to pay Plan expenses. During the year ended December 31, 2024, the Company applied forfeited non-vested amounts of approximately $3,852,000 primarily toward Company matching 401(k) contributions. As of December 31, 2024, and December 31, 2023, forfeited non-vested accounts available for application by the Company totaled approximately $744,000 and $745,000, respectively.

As defined by the Plan, participants may contribute up to 100% of their eligible compensation on a pre-tax basis unless designated as Roth deferrals and/or as traditional after-tax contributions, subject to statutory limitations.

Participants may borrow up to 50% of their vested account balance, up to a maximum of $50,000. Loan repayment periods may not exceed 60 months except for loans used to acquire a principal residence, in which case the repayment period may not exceed 30 years. The loans are secured by the vested account balance in the participant’s account and bear interest at a rate commensurate with local prevailing rates as determined monthly by the Plan administrator. The loans are recorded at amortized cost, which is the remaining unpaid principal balance plus any accrued but unpaid interest. Principal and interest are collected ratably through payroll deductions or through direct payments from terminated employees who have loans. Delinquent loans are reclassified as distributions based upon the terms of the Plan. As of December 31, 2024, and December 31, 2023, outstanding loans bear interest at rates ranging from 4.25% to 9.50% for both periods, and have maturities from January 2025 through November 2054 as of December 31, 2024, and January 2024 through October 2053, as of December 31, 2023.