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As filed with the Securities and Exchange Commission on June 7, 1996.
Registration No. 33-36443
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________
ELECTRONIC DATA SYSTEMS CORPORATION\1\
(Exact name of Registrant as specified in its charter)
Delaware 75-2548221
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5400 Legacy Drive, Plano, Texas 75024-3199
(Address of principal executive offices) (Zip code)
EDS DEFERRED COMPENSATION PLAN
(Full title of the plan)
Joseph M. Grant
Chief Financial Officer
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024-3199
(Name and address of agent for service)
(214) 604-6000
(Telephone number, including area code, of agent for service)
___________
Copies to:
D. Gilbert Friedlander
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024-3199
(214) 604-6000
___________
- ---------------
/1/ This Post-Effective Amendment is being filed by Electronic Data Systems
Corporation as successor issuer to General Motors Corporation pursuant to Rule
414 promulgated under the Securities Act of 1933, as amended.
================================================================================
<PAGE>
General
This Post-Effective Amendment No. 1 (the "Post-Effective Amendment No. 1")
to the Registration Statement on Form S-8 (Commission File No. 33-36443) (the
"Registration Statement") of General Motors Corporation, a Delaware corporation
("General Motors"), is filed pursuant to Rule 414 promulgated under the
Securities Act of 1933, as amended (the "Act"), by Electronic Data Systems
Corporation, a Delaware corporation (formerly, Electronic Data Systems Holding
Corporation) ("EDS"). In connection with the Split-Off (as defined below), EDS
hereby adopts this Registration Statement as its own for all purposes of the Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). After
giving effect to the filing of this Post-Effective Amendment No. 1, the GM Class
E Common Stock (as defined below) will cease to exist and General Motors will no
longer be the issuer of the securities covered by this Registration Statement or
be the registrant hereunder.
As originally filed with the Securities and Exchange Commission (the
"Commission"), the Registration Statement registered 4,000,000 shares of Class E
Common Stock, par value $0.10 per share ("GM Class E Common Stock"), of General
Motors and an indeterminate amount of interests to be offered or sold pursuant
to the employee benefit plan described herein. Such number of shares was
adjusted as a result of a two-for-one stock split in the form of a 100% stock
dividend to holders of record on February 14, 1992. As a result of the
foregoing transaction, the shares covered by the Registration Statement
immediately prior to the filing of this Post-Effective Amendment No. 1 are
8,000,000 shares of GM Class E common stock. After giving effect to the filing
of this Post-Effective Amendment No. 1, the securities covered by this
Registration Statement will be 8,000,000 shares of common stock, par value $0.01
per share, of EDS (the "EDS Common Stock") and an indeterminate amount of
interests to be offered or sold pursuant to the Plan (as defined below).
After giving effect to the filing of this Post-Effective Amendment No. 1,
the plan to which the Registration Statement relates will be the EDS Deferred
Compensation Plan, as amended and restated (the "Plan"). The Plan will become
effective in accordance with its terms upon the consummation of the Split-Off.
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Description of the Split-Off
On March 31, 1996, the Board of Directors of General Motors approved the
split-off (the "Split-Off") of its wholly owned subsidiary, EDS, to the holders
of GM Class E Common Stock in a transaction that is tax-free for United States
federal income tax purposes. The Split-Off will be accomplished pursuant to the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of April 19,
1996, between General Motors and GM Mergeco Corporation, an indirect wholly
owned subsidiary of EDS ("Mergeco"), whereby (i) Mergeco will merge with and
into GM, with GM being the surviving corporation, (ii) each outstanding share of
GM Class E Common Stock will be converted into one share of EDS Common Stock and
(iii) the provisions of the Certificate of Incorporation of General Motors
relating to the GM Class E Common Stock will be deleted. As a result of the
Split-Off, EDS will become an independent, publicly held company.
The Split-Off and related transactions are described in the joint
Solicitation Statement/Prospectus (the "Solicitation Statement/Prospectus") of
General Motors and EDS, dated April 23, 1996, relating to the solicitation of
written consent of the stockholders of GM for the approval of the Split-Off and
the shares of EDS Common Stock offered in connection with such transaction.
-ii-
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Note: The document(s) containing the information concerning the Plan
required by Item 1 of Form S-8 and the statement of availability of registrant
information, Plan information and other information required by Item 2 of Form
S-8 will be sent or given to employees as specified by Rule 428. In accordance
with Rule 428 and the requirements of Part I of Form S-8, such documents are not
being filed with the Commission either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424. EDS shall
maintain a file of such documents in accordance with the provisions of Rule 428.
Upon request, EDS shall furnish to the Commission or its staff a copy or copies
of any or all of the documents included in such file.
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PART II
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed by EDS with the Commission are
incorporated herein by reference:
1. EDS' Current Report on Form 8-K, dated as of April 23, 1996, as filed
with the Commission on May 21, 1996;
2. EDS' Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, as filed with the Commission on May 29, 1996; and
3. The description of EDS Common Stock contained in the joint Solicitation
Statement/Prospectus, of EDS and General Motors Corporation, dated as of April
23, 1996, which is included in the Registration Statement on Form S-4 of EDS
(Commission File No. 333-2543).
All documents filed by EDS with the Commission pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement that indicates that all securities offered hereby
have been sold or that deregisters all securities then remaining unsold, shall
be deemed to be incorporated in this Registration Statement by reference and to
be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement, in an amendment
hereto or in a document incorporated by reference herein shall be deemed
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein, in any subsequently filed supplement to this
Registration Statement or any document that is also incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
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Item 5. Interests of Named Experts and Counsel.
D. Gilbert Friedlander, General Counsel of EDS, who is passing on the
validity of the EDS Common Stock offered hereby owns shares of EDS Common Stock.
Item 6. Indemnification of Directors and Officers.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation of EDS (the "Certificate"), the Amended and
Restated Bylaws of EDS (the "Bylaws"), the Delaware General Corporation Law (the
"DGCL"), the Indemnification Agreements (as defined herein) and the Separation
Agreement (as defined herein). This description is intended as a summary only
and is qualified in its entirety by reference to the Certificate, the Bylaws,
the DGCL, the Indemnification Agreements and the Separation Agreement.
Delaware General Corporation Law
Section 145(a) of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
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or suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall deem
proper.
Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
145(a) and (b), or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 145(d) of the DGCL provides that any indemnification under Section
145(a) and (b) (unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Section 145(a) and
(b). Such determination shall be made (1) by a majority vote of the directors
who were not parties to such action, suit or proceeding, even though less than a
quorum, or (2) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (3) by the stockholders.
Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in Section 145.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
Section 145(f) of the DGCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall
not be deemed
II-3
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exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 145(g) of the DGCL provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his capacity as such, whether or not the corporation
would have the power to indemnify him against such liability under Section 145.
Certificate
Article Seventh of the Certificate provides that no director of EDS shall
be personally liable to EDS or any of its stockholders for monetary damages for
breach of fiduciary duty as a director involving any act or omission of any such
director; provided, however, that such Article Seventh does not eliminate or
limit the liability of a director (1) for any breach of such director's duty of
loyalty to EDS or its stockholders, (2) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (3) under
Section 174 of the DGCL (which relates to certain unlawful dividend payments or
stock purchases or redemptions), as the same exists or may hereafter be amended,
supplemented or replaced, or (4) for a transaction from which the director
derived an improper personal benefit. If the DGCL is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of EDS, in addition to the limitation on personal
liability described above, shall be limited to the fullest extent permitted by
the DGCL, as so amended. Furthermore, any repeal or modification of Article
Seventh of the Certificate by the stockholders of EDS shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director of EDS existing at the time of such repeal or modification.
Bylaws
Article VI of the Bylaws of EDS provides that each person who at any time
shall serve or shall have served as a director, officer, employee or agent of
EDS, or any person who, while a director, officer, employee or agent of EDS, is
or was serving at the written request of EDS (in accordance with written
procedures adopted from time to
II-4
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time by the Board of Directors of EDS) as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, shall be
entitled to (a) indemnification and (b) the advancement of expenses incurred by
such person from EDS as, and to the fullest extent, permitted by Section 145 of
the DGCL or any successor statutory provision, as from time to time amended.
Indemnification Agreements
EDS has entered into Indemnification Agreements (the "Indemnification
Agreements") with its directors, nominees for director and certain of its
officers (the "Indemnitees"). Under the terms of the Indemnification
Agreements, EDS has generally agreed to indemnify, and advance expenses to, each
Indemnitee to the fullest extent permitted by applicable law on the date of such
agreements and to such greater extent as applicable law may thereafter permit.
In addition, the Indemnification Agreements contain specific provisions pursuant
to which EDS has agreed to indemnify each Indemnitee (i) if such person is, by
reason of his or her status as a director, nominee for director, officer, agent
or fiduciary of EDS or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise with which such person was
serving at the request of EDS (any such status being hereinafter referred to as
a "Corporate Status"), made or threatened to be made a party to any threatened,
pending or completed action, suit, arbitration, alternative dispute resolution
mechanism, investigation or other proceeding (each, a "Proceeding"), other than
a Proceeding by or in the right of EDS, (ii) if such person is, by reason of his
or her Corporate Status, made or threatened to be made a party to any Proceeding
brought by or in the right of EDS to procure a judgment in its favor, except
that no indemnification shall be made in respect of any claim, issue or matter
in such Proceeding as to which such Indemnitee shall have been adjudged to be
liable to EDS if applicable law prohibits such indemnification (unless and only
to the extent that a court shall otherwise determine), (iii) against expenses
actually and reasonably incurred by such person on his or her behalf in
connection with any Proceeding to which such Indemnitee was or is a party by
reason of his or her Corporate Status and in which such Indemnitee is
successful, on the merits or otherwise, and (iv) against expenses actually and
reasonably incurred by such person or on his or her behalf in connection with a
Proceeding to the extent that such Indemnitee is, by reason of his or her
Corporate Status, a witness or otherwise participates in any Proceeding at a
time when such person is not a party in the Proceeding and (v) against expenses
actually and reasonably incurred by such person in any judicial adjudication of
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or any award in arbitration to enforce his or her rights under the
Indemnification Agreements.
Furthermore, under the terms of the Indemnification Agreements, EDS has
agreed to pay all reasonable expenses incurred by or on behalf of an Indemnitee
in connection with any Proceeding, whether brought by or in the right of EDS or
otherwise, in advance of any determination with respect to entitlement to
indemnification and within 15 days after the receipt by EDS of a written request
from such Indemnitee for such payment. In the Indemnification Agreements, each
Indemnitee has agreed that he or she will reimburse and repay EDS for any
expenses so advanced to the extent that it shall ultimately be determined that
he or she is not entitled to be indemnified by EDS against such expenses.
The Indemnification Agreements also include provisions that specify the
procedures and presumptions which are to be employed to determine whether an
Indemnitee is entitled to indemnification thereunder. In some cases, the nature
of the procedures specified in the Indemnification Agreements varies depending
on whether there has occurred a "Change in Control" (as defined in the
Indemnification Agreements) of EDS.
Separation Agreement
Pursuant to the Separation Agreement by and between General Motors and EDS,
General Motors has agreed to indemnify the members of the EDS Team (as defined
below), the officers and employees of EDS providing assistance to the EDS Team,
and the directors of EDS who granted any approval or authorization for EDS in
connection with the Split-Off, in each case, in their capacity as such, against
losses arising from the Split-Off in accordance with the Bylaws of General
Motors, to the same extent as if such person were a director or officer of
General Motors; provided that such indemnification does not apply to losses
relating to (i) the Certificate, the Bylaws or the Rights Agreement, dated March
12, 1996, by and between EDS and The Bank of New York, as Rights Agent, (ii) EDS
employee and director compensation and indemnification arrangements or (iii) EDS
plans, proposals, intentions or policies applicable after the Split-Off,
including EDS' dividend policy. In addition, the Separation Agreement requires
General Motors to indemnify, in accordance with the Bylaws of General Motors, to
the same extent as if such person were a director or officer of General Motors,
each EDS non-employee board nominee against losses arising from the expression
of any views prior to the Split-Off at the request of General Motors or the
Board of Directors of General Motors with respect to EDS' proposed
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charter, bylaws, stockholders rights plan or employee benefit plans. EDS will
reimburse General Motors for all amounts paid to or on behalf of such persons
pursuant to such indemnification. The "EDS Team" is a team consisting of three
executive officers of EDS who were charged with negotiating the terms of the
Split-Off from the perspective of the holders of the GM Class E Common Stock.
Insurance
EDS has obtained and intends to maintain in effect directors' and officers'
liability insurance policies providing customary coverage for its directors and
officers against losses resulting from wrongful acts committed by them in their
capacities as directors and officers of EDS.
Item 7. Exemptions from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4(a) Specimen of certificate of Common Stock, par value $.01 per share, of
EDS (filed as Exhibit 5 to the Registration Statement on Form 8-A and
incorporated herein by reference)
4(b) EDS Deferred Compensation Plan, as amended and restated
4(c) Rights Agreement, dated as of March 12, 1996, by and between EDS and
the Bank of New York, as Rights Agent (filed as Exhibit 4(c) to the
Registration Statement on Form S-4 and incorporated herein by
reference)
5(a) Opinion of D. Gilbert Friedlander
5(b) Internal Revenue Service Determination Letter dated as of July 18,
1995
23(a) Consent of KPMG Peat Marwick LLP
23(b) Consent of D. Gilbert Friedlander (included in Exhibit 5)
24 Power of Attorney (included on page II-11)
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EDS hereby undertakes that it will submit or has submitted in a timely
manner the Plan and any amendment thereto to the Internal Revenue Service for
purposes of obtaining a determination letter that the Plan is qualified under
Section 401 of the Internal Revenue Code of 1986, as amended, and has made or
will make all changes required by the Internal Revenue Service in order to
qualify the Plan.
Item 9. Undertakings.
(a) EDS hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof), which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by EDS pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) EDS hereby undertakes that, for purposes of determining any liability
under the Act, each filing of EDS' annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of EDS pursuant to the
foregoing provisions, or otherwise, EDS has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Act and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by EDS of
expenses incurred or paid by a director, officer or controlling person of EDS in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, EDS will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
The Registrant
Pursuant to the requirements of the Act of 1933, the registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing a Registration Statement on Form S-8 and has duly caused this Post
Effective Amendment No. 1 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Plano, State of Texas, on this 6th
day of June, 1996.
ELECTRONIC DATA SYSTEMS CORPORATION
By:/s/ Lester M. Alberthal, Jr.
---------------------------------------------
Lester M. Alberthal, Jr.
Chairman of the Board, President and Chief
Executive Officer
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Electronic Data Systems Corporation, a Delaware corporation, which
is filing a post-effective amendment to a Registration Statement on Form S-8
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933, hereby constitutes and appoints Lester M. Alberthal,
Jr., Joseph M. Grant, Gary J. Fernandes, John R. Castle, Jr., and Paul J.
Chiapparone, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, and in any and all capacities, to sign such post effective
amendment and any or all additional amendments to the Registration Statement and
all other documents in connection therewith to be filed with the Commission, it
being understood that said attorneys-in-fact and agents, and each of them, shall
have full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, and that each of the
undersigned hereby ratifies and confirms all that said attorneys-in-fact as
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment No. 1 has been signed by the following persons in
the capacities indicated on June 6, 1996.
Signature Title
/s/ Lester M. Alberthal, Jr. Chairman of the Board, President and
- ---------------------------- Chief Executive Officer
Lester M. Alberthal, Jr. (Principal Executive Officer)
/s/ Joseph M. Grant Senior Vice President, Chief Financial
- ------------------- Officer and Director
Joseph M. Grant (Principal Financial Officer)
/s/ Gary J. Fernandes Senior Vice President and Director
- ---------------------
Gary J. Fernandes
/s/ John R. Castle, Jr. Senior Vice President and Director
- -----------------------
John R. Castle, Jr.
/s/ Paul J. Chiapparone Senior Vice President and Director
- -----------------------
Paul J. Chiapparone
/s/ H. Paulett Eberhart Vice President and Controller
- ----------------------- (Principal Accounting Officer)
H. Paulett Eberhart
<PAGE>
SIGNATURES
The Plan
Pursuant to the requirements of the Securities Act of 1933, the
Administration Committee which administers the Plan has duly caused this Post-
Effective Amendment No. 1 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Plano, State of Texas, on this 6th
day of June, 1996.
EDS DEFERRED COMPENSATION PLAN
By: /s/ Lester M. Alberthal, Jr.
---------------------------------------------
Lester M. Alberthal, Jr.
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 has been signed by the following persons in their
capacities as members of the Administration Committee of the EDS Deferred
Compensation Plan on this 6th day of June, 1996.
----
Signature Title
/s/ G. Stuart Reeves Chairman
- ----------------------------------
G. Stuart Reeves
/s/ John W. Wroten, Jr. Vice Chairman
- ----------------------------------
John W. Wroten, Jr.
/s/ John A. Bateman Member
- ----------------------------------
John A. Bateman
/s/ H. Paulett Eberhart Member
- ----------------------------------
H. Paulett Eberhart
/s/ D. Gilbert Friedlander Member
- ----------------------------------
D. Gilbert Friedlander
<PAGE>
/s/ Ulrich Hansen Member
- ----------------------------------
Ulrich Hansen
/s/ William B. Moore Member
- ----------------------------------
William B. Moore
/s/ James C. Risser Member
- ----------------------------------
James C. Risser
/s/ Jay R. Salem Member
- ----------------------------------
Jay R. Salem
<PAGE>
EXHIBIT 4(b)
AMENDED AND RESTATED
EDS DEFERRED COMPENSATION PLAN
(Third Amended and Restated Document - June 7, 1996)
<PAGE>
Table of Contents
ARTICLE 1
INTRODUCTION
1.1 Creation......................................................... 1
1.2 Amendment and Restatement........................................ 1
1.3 Purpose.......................................................... 1
ARTICLE 2
DEFINITIONS
2.1 Definitions...................................................... 2
2.2 Construction..................................................... 10
ARTICLE 3
ELIGIBILITY PARTICIPATION AND
BENEFICIARY DESIGNATION
3.1 Eligibility Period............................................... 10
3.2 Participation.................................................... 10
ARTICLE 4
CONTRIBUTIONS
4.1 Contributions.................................................... 10
4.2 Elective Contributions........................................... 10
4.3 Recharacterization of Elective Contributions..................... 11
4.4 Actual Deferral Percentage Test.................................. 12
4.5 Payment of Employer Contributions to Trustee..................... 13
4.6 Rollover Contribution............................................ 13
4.7 Transferred Assets............................................... 13
4.8 Reverting of Contribution Made by Mistake of Fact................ 13
4.9 Reverting of Non-Deductible Contribution......................... 13
4.10 Limitation on Reversions........................................ 13
4.11 No Contributions by Participants................................ 13
ARTICLE 5
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
5.1 Individual Account............................................... 14
5.2 Allocation of Elective Contribution Account...................... 14
5.3 Allocation of Adjustment......................................... 14
5.4 Allocation Procedures............................................ 14
5.5 Maximum Additions................................................ 14
5.6 Correction For Excessive Annual Additions........................ 15
5.7 Limitation For Multiple Plan Participants........................ 15
ARTICLE 6
DISTRIBUTIONS
6.1 Normal Retirement................................................ 16
6.2 Early Retirement................................................. 16
6.3 Death............................................................ 16
6.4 Disability....................................................... 16
6.5 Participant's Death Prior to Commencement of Distribution -
the "Five-Year Rule" and Exceptions Thereto...................... 16
6.6 Life Expectancy Determination.................................... 16
6.7 Termination of Employment........................................ 16
<PAGE>
6.8 Distribution of Benefits......................................... 17
6.9 Maximum Option Payable........................................... 18
6.10 Benefits to Minors and Incompetents............................. 18
6.11 Age 70 1/2...................................................... 18
6.12 Special Rule Regarding Certain Distributions From
GM Class E Stock Fund........................................... 26
6.13 No Reduction of Benefits........................................ 19
6.14 Required Notifications.......................................... 19
ARTICLE 7
WITHDRAWALS AND LOANS
7.1 Withdrawals and Loans Generally.................................. 20
7.2 Special Hardship Withdrawal...................................... 20
7.3 In-Service Withdrawal............................................ 21
7.4 Loans............................................................ 21
7.5 Discretionary Withdrawal......................................... 22
ARTICLE 8
FUNDING
8.1 Trustee.......................................................... 33
8.2 Direction of Investments......................................... 24
8.3 Change in Direction.............................................. 24
ARTICLE 9
FIDUCIARIES
9.1 General......................................................... 25
9.2 Appointment of the Administration Committee..................... 25
9.3 Appointment of the Investment Committee......................... 25
9.4 Compensation and Expenses....................................... 25
9.5 Secretary and Administrative Personnel of the Committees........ 26
9.6 Duties and Authority of Administrative Personnel................ 26
9.7 Action by the Administration or Investment Committee............ 37
9.8 Duties and Authority of the Administration Committee............ 27
9.9 Claims Procedure and Other Rules and Treasury Regulations
of the Plan Administrator....................................... 27
9.10 Named Fiduciaries and Allocation of Responsibility.............. 28
9.11 Action by Fiduciaries........................................... 28
9.12 Employment of Advisers.......................................... 29
9.13 Bond............................................................ 29
9.14 Indemnity....................................................... 29
9.15 Missing Persons................................................. 29
9.16 Voting Employer Stock........................................... 29
ARTICLE 10
AMENDMENT AND TERMINATION
10.1 Amendment of Plan............................................... 31
10.2 Termination of Plan............................................. 31
ARTICLE 11
PROVISIONS RELATIVE TO EMPLOYERS INCLUDED IN PLAN
11.1 Method of Participation......................................... 31
11.2 Withdrawal...................................................... 31
<PAGE>
ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 Top-Heavy Provisions............................................ 32
12.2 Compensation Limitation......................................... 32
12.3 Minimum Allocations............................................. 32
ARTICLE 13
QUALIFIED DOMESTIC RELATIONS ORDERS
13.1 Determination of Qualified Domestic Relations Orders............ 33
13.2 Accounting and Allocations...................................... 33
13.3 Distribution.................................................... 33
ARTICLE 14
MISCELLANEOUS
14.1 Governing Law................................................... 33
14.2 Administration Expenses......................................... 33
14.3 Participant's Rights; Acquittance............................... 33
14.4 Spendthrift Clause.............................................. 34
14.5 Merger, Consolidation or Transfer............................... 34
14.6 Counterparts.................................................... 34
<PAGE>
AMENDED AND RESTATED
EDS DEFERRED COMPENSATION PLAN
(Third Amendment and Restatement effective June 7, 1996)
THIS amended and restated employee benefit plan is adopted on this
day of , 1996, by Electronic Data Systems
- ------------------- -----------------
Corporation, a company organized pursuant to the laws of the State of Delaware,
with its principal office in Plano, Collin County, Texas.
ARTICLE 1
INTRODUCTION
------------
1.1 Creation. By authorization of its Board of Directors
--------
("Board"), the Company adopted the EDS DEFERRED COMPENSATION PLAN AND TRUST
("Plan"), effective July 1, 1983, which is a qualified profit-sharing plan with
provisions pursuant to Section 401(k) of the Internal Revenue Code of 1954. The
Plan shall be administered under the supervision of the Benefits and
Compensation Committee for the sole benefit of the Employee Participants and
their Beneficiaries, and no part of the Trust shall ever revert to the Company
or any Employer, except as hereinafter provided in Article 4 (Contributions).
1.2 Amendment and Restatement. The initial Plan document was first
-------------------------
amended and restated effective July 1, 1984. In accordance with the intentions
of the Plan and in order to secure and maintain the initial qualification of the
Plan and Trust in compliance with the applicable provisions of the Internal
Revenue Code of 1986, as amended ("Code"), it was determined that the Plan
should again be completely amended and restated pursuant to the Code and the
applicable provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended by the Tax Equity and Fiscal Responsibility Act of 1984
("TEFRA"), the Tax Reform Act of 1984 ("TRA"), the Retirement Equity Act of 1984
("REA"), the Tax Reform Act of 1986 ("TRA 1986"), the Omnibus Budget
Reconciliation Act of 1986 ("OBRA"), the Omnibus Budget Reconciliation Act of
1987 ("OBRA '87") and other applicable laws the Treasury Regulation's
promulgated thereunder ("Regulations"); and the technical corrections thereto,
to which the Plan intends to comply. The Plan was subsequently amended by the
First Amendment to the second Amended and Restated EDS Deferred Compensation
Plan dated November 10, 1995, by the Second Amendment to the second Amended and
Restated EDS Deferred Compensation Plan dated April 1, 1996 and by this, the
third Amended and Restated EDS Deferred Compensation Plan. This amendment and
restatement of the Plan is adopted as a complete amendment of the Plan as
initially created and qualified without a lapse in coverage, time or effect as a
qualified Plan.
1.3 Purpose. The purpose of Employers with a retirement savings
-------
program through which they may elect to defer a portion of their salary which
their Employer will contribute to the Trust pursuant to the provisions herein.
Further, the Company intends to provide the Employees with an additional
incentive and retirement security by providing a uniform and nondiscriminatory
plan through which contributions may be accumulated and distributed to
Participants or their Beneficiaries in the case of the disability, death,
attainment of age fifty-nine and one-half (59-1/2), or retirement of a
Participant, as hereinafter provided. Subject to the powers reserved herein to
amend and terminate the Plan, the Plan has been adopted by the Company with the
intention of creating a permanent and continuing plan for the exclusive benefit
of the Employees and their Beneficiaries.
<PAGE>
ARTICLE 2
DEFINITIONS
-----------
2.1 Definitions. The following words shall, when used herein, have
-----------
the following meanings unless the context indicates otherwise:
(1) Account Manager means a Fiduciary appointed by the
---------------
Investment Committee pursuant to Section 9.3 (Appointment of the
Investment Committee) to manage any or all assets of the Plan not
otherwise managed by Investment Managers.
(2) Adjustment means as of the Valuation Date, the gains and
----------
income minus the losses and the expenses actually incurred and paid from
the Trust.
(3) Administration Committee means the Benefits Administration
------------------------
Committee. The Benefits Administration Committee means the committee
---------------------------------
consisting of one or more members, each of whom shall be an Employee or
a director of the Company, appointed by the Compensation and Benefits
Committee pursuant to Section 9.2 (Appointment of the Administration
Committee) and vested with the authority to carry out such other duties
as allocated to it in the Plan and Trust Agreement or otherwise by the
Compensation and Benefits Committee.
(4) Affiliate means an organization which is not an Employer
---------
for purposes of this Plan, but which is a member of the same controlled
group of organizations as the Employer as determined pursuant to Code
Sections 414(b), (c) and (m).
(5) Aggregation Group means two or more plans of any
-----------------
Controlled Group Member aggregated pursuant to the aggregation rules of
Code Section 416 in order to determine whether such plans, as a group,
are Top-Heavy Plans. The Aggregation Group must include any Qualified
Plan sponsored by a Controlled Group Member in which a Key Employee also
participates as of the Determination Date or any of the four (4)
preceding Plan Years. Additionally, the Aggregation Group must include
any other Qualified Plan of a Controlled Group Member which covers a Key
Employee and any other Qualified Plan which enables any Qualified Plan
covering a Key Employee to meet the qualification requirements pursuant
to the coverage and anti-discrimination rules set forth in Code Sections
401(a)(4) and 410(b).
(6) Alternate Payee shall have the same meaning as set forth
---------------
in Code Section 414(p)(8).
(7) Annual Addition shall mean, for any Limitation Year, as
---------------
such term is defined in Treasury Regulation Section 1.415-2, the amount
allocated to a Participant's Individual Account which is attributable to
contributions paid by an Employer to the Trustee and any forfeitures for
a particular Plan Year. For purposes of applying the Code Section 415
limitations, Annual Additions shall not include Rollover Contributions,
but shall include the following:
(a) employer contributions, including Elective Contributions;
(b) employee contributions;
(c) forfeitures;
(d) amounts allocated after March 31, 1984, to an individual
account as defined in Code Section 415(l)(1), which is part of a
defined benefit plan maintained by the Employer; and,
(e) amounts derived from contributions which were paid or
accrued after December 31, 1985, which are attributable to post-
retirement medical benefits allocated to a separate account of a
Key Employee pursuant to a welfare benefit fund as defined in Code
Section 419(e).
2
<PAGE>
(8) Annuity Starting Date shall mean the first day of the first
---------------------
period for which an amount is paid as an annuity or any other form.
(9) Beneficiary (also Designated Beneficiary) shall mean such
-----------------------------------------
person, or a trust created for the benefit of such a person, or the
Participant's estate, whoever or whichever is entitled to receive
benefits hereunder in the event of the Participant's death prior to the
complete distribution of the balance credited to such Participant's
Individual Account.
(10) Benefit Dollars shall mean any amounts which are paid to
---------------
an employee through a cash or deferred arrangement maintained by the
Company pursuant to Code Section 125 reduced through a salary election
pursuant to Code Section 125 which are returned to the Employee in the
form of taxable income and reportable on such Employee's Form W-2.
(11) Code Section 415 Compensation shall mean, for purposes of
-----------------------------
Code Section 415 limitations, the compensation actually paid or
includable in gross income of any Participant during any Limitation Year
---------------
as such term is defined in Treasury Regulations Section 1.415-2. Code
Section 415 Compensation shall include:
(a) Elective Contributions made by an Employer to a Plan
including a cash or deferred arrangement pursuant to Code Section
401(k); and
(b) Amounts received pursuant to a cafeteria plan described in
Code Section 125.
(12) Company shall mean Electronic Data Systems Corporation, a
corporation established under the laws of the State of Delaware, its
successors and assigns.
(13) Compensation shall, for any Plan Year, mean the total
------------
earnings prior to withholding, as reported on Internal Revenue Service
Form W-2, paid to any Employee by an Employer, including income
attributable to the 1984 Electronic Data Systems Corporation Stock
Incentive Plan. For Plan Years beginning before January 1, 1994, a
Participant's Compensation shall be limited to the Participant's first
$200,000.00, as adjusted from time to time pursuant to Code Section
401(a)(17) and the Regulations thereunder, against which Elective
Contributions shall be applied. For Plan Years beginning on or after
January 1, 1994, a Participant's Compensation shall be limited to the
first $150,000.00, as adjusted from time to time pursuant to Code
Section 401(a)(17) and the Regulations thereunder. As determined in
accordance with the applicable rules of Code Section 414(9)(6) except
the term "family" shall only include the Participant's spouse and all
lineal descendants of the Participant who have not attained age 19 by
the Plan Year end and who are employed by a Controlled Group Member, and
for purposes of determining Compensation hereunder, all Elective
Contributions made to any Qualified Plan maintained by an Employer or
Controlled Group Member on behalf of such Participant shall be applied.
However, Compensation shall exclude the following:
(a) Amounts reduced through a cafeteria plan described in Code
Section 125:
(b) extraordinary expenses such as moving expenses, overseas
living allowances, imputed value of group life insurance or such
other similar amounts, and any benefits provided through a Welfare
Benefit Fund; and,
(c) Benefit Dollars shall be excluded for purposes of
determining Participant's Compensation.
(14) Compensation and Benefits Committee shall mean the
-----------------------------------
subcommittee of the Board of Directors of the Company authorized to
carry out such duties as determined by the Board of Directors and set
forth in the Plan and Trust Agreement.
3
<PAGE>
(15) Computation Period shall mean any twelve-consecutive-month
------------------
period commencing or ending on the dates specified herein.
(16) Controlled Group Member shall mean any entity related to
-----------------------
the Company pursuant to Code Sections 414(b), 414(c) or 414(m) and the
Regulations thereunder.
(17) Determination Date is defined in Section 4.4(d) (Highly
------------------
Compensated Employee).
(18) Early Retirement Date shall mean, the first day of any
---------------------
month prior to a Participant's Normal Retirement Date, provided that
such Participant is at least fifty-five (55), is fully vested in the
Electronic Data Systems Corporation Retirement Plan, and the sum of his
aggregate Years of Service and age equal at least seventy (70) and such
Participant has elected to retire from the employment of an Employer or
any Controlled Group Member.
(19) Effective Date of the Plan is July 1, 1983.
---------------
(20) Election Date shall mean the date an Employee elects to
-------------
participate in the Plan in accordance with Section 3.2 (Participation).
(21) Elective Contribution shall mean any amounts contributed
---------------------
on behalf of a Participant by an Employer on account of a Participant's
Salary Reduction Agreement made pursuant to Section 4.2 (Elective
Contributions).
(22) Elective Contribution Account shall mean the portion of a
-----------------------------
Participant's Individual Account consisting of the Elective Contribution
allocated to such Participant pursuant to Section 5.2 (Allocation of
Elective Contribution Account), together with Adjustments allocated
thereto.
(23) Employee means a person including officers, employed by an
--------
Employer and on the payroll of an Employer, who does not participate in
any defined contribution plan as defined in ERISA Section 3(34). Any
leased employee who is not covered by a money purchase pension plan with
a non-integrated employer contribution rate equal to at least ten
percent (10%) of compensation, immediate participation, and with full
and immediate vesting shall not be eligible to participate in the Plan
unless and until the leased employee actually becomes employed on the
payroll of an Employer and otherwise meets the eligibility criteria of
Article II hereof.
(a) The term "Employee" shall include any Ex-Patriate assigned
to any Foreign Subsidiary Company and who, while assigned to such
Foreign Subsidiary Company is not eligible to participate in any
plan maintained by such Foreign Subsidiary Company on behalf of
its employees into which the Foreign Subsidiary Company
contributes amounts.
(b) The term "Employee" shall not include the following:
(1) nonresident aliens who are not subject to United States
federal income taxation on Compensation;
(2) resident aliens who are not subject to United States
federal income taxation on Compensation;
(3) a third country national, which is any Employee who
----------------------
performs services in a country other than the country of
such Employee's residency except if such employee is an Ex-
Patriate;
(4) any person hired by a Foreign Subsidiary Company;
(5) any person eligible to participate in the EDS-Puerto Rico
Savings Plan.
4
<PAGE>
(c) For purposes of this subparagraph, the term "leased
employee" means any person who is not employed by an Employer but
who provides services of the type historically performed by an
Employer on a substantially full-time basis for at least a twelve-
consecutive month period.
(24) Employer means, collectively or individually, as the
--------
context may indicate, the Company and any other organization which has
satisfied all requirements as a signatory to the Plan and Trust
Agreement pursuant to Article 11 (Provisions Relative to Employers
Included in the Plan).
(25) Employer Stock means the common stock, par value $0.01 per
--------------
share, of Electronic Data Systems Corporation and any other security
which is a Qualifying Employer Security, as such term as defined in Code
Section 4975(e)(8), of Electronic Data Systems Corporation.
(26) Employment Year means any twelve (12) consecutive month
---------------
period beginning on an Employee's employment anniversary date.
(27) Ex-Patriate means any Employee of the Company who, as a
-----------
requirement of a temporary assignment, is located at the site of a
Foreign Subsidiary Company and who has completed the necessary
documentation as may be required of Ex-Patriates by the Company.
(28) Fiduciary means the Company, any Employer, the Trustee, the
---------
Compensation and Benefits Committee, the Investment Committee, the
Administration Committee, Participants to the extent provided herein,
and any individual, corporation or other entity which assumes
responsibilities of the aforementioned in respect to the management or
operation of the Plan or the investment or disposition of any assets
held in the Trust.
(29) Foreign Subsidiary Company means a foreign entity in which
--------------------------
the Company has a direct or indirect ownership interest.
(30) Hardship is defined in Section 7.2 (Special Hardship
--------
Withdrawal).
(31) Hour of Service shall be determined and credited in the
---------------
manner set forth in Department of Labor Regulations Sections 2530.200-
2(b) and (c) and any law of the United States or any rule or regulation
issued under any law. The provisions of this subsection shall be
construed so as to resolve any ambiguities in favor of crediting an
Employee with Hours of Service. Except as otherwise provided by any law
or regulation cited in this subsection, an Hour of Service shall mean:
(a) each hour for which an Employee is compensated, or entitled
to compensation, for the performance of duties for the Employer
during the applicable Employment Year;
(b) each hour for which disputed compensation, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer, provided, however, that the same Hours of Service shall
not be credited under any other subsection herein, and that
crediting of Hours of Service for compensation awarded or agreed
to with respect to periods described in subsection 2.1(31)(c)(iii)
shall be subject to the limitation set forth in such subsection;
and,
(c) each hour for which an Employee is compensated, or entitled
to compensation, by the Employer for a period of time when no
duties were performed for the Employer by the Employee for reason
of vacation, holiday, illness, incapacity, disability, layoff,
jury duty, military duty, or leave of absence. For purposes of
this subsection:
(i) no more than five hundred and one (501) Hours of Service
are required to be credited to an Employee during any single
continuous period during which no duties are performed
whether or not such continuous period occurs during one
Employment Year;
5
<PAGE>
(ii) Hours of Service are not required to be credited to the
Employee for which such Employee is directly or indirectly
compensated, or entitled to compensation, on account of a
period during which no duties are performed, if such payment
is made or due pursuant to a plan maintained solely for the
purpose of complying with applicable workers' compensation
or unemployment compensation or disability insurance laws;
(iii) Hours of Service are not required to be credited to the
Employee for a payment which wholly reimburses an Employee
for medical or medically related expenses incurred by the
Employee; and
(iv) The Employer or an Affiliate shall determine Hours of
Service by substituting forty-five (45) Hours of Service for
each week in which the Employee would otherwise have been
credited with one (1) Hour of Service.
(32) Individual Account means the detailed record kept of the
------------------
items and amounts credited or charged to each Participant in accordance
with the terms hereof. Such Individual Account includes, as applicable,
an Elective Contribution Account, a Voluntary Contribution Account, a
Non-Elective Contribution Account, a Matching Contribution Account, and
a Rollover Account.
(33) Investment Committee means the committee appointed by
--------------------
the Compensation and Benefits Committee pursuant to Section 9.3
(Appointment of the Investment Committee) and vested with the
responsibilities to establish and develop the investment and funding
policies of the Plan and to manage directly or indirectly all
investments of the assets of the Plan.
(34) Investment Fund means an Investment Fund as described in
---------------
Article 8 (Funding).
(35) Investment Manager shall mean any Fiduciary as defined in
------------------
ERISA Section 3(38) appointed by the Investment Committee pursuant to
Section 9.3 (Appointment of the Investment Committee).
(36) Joint and 50% Survivor Annuity is defined in Section
------------------------------
6.8(b)(i) (Joint and Survivor Annuity).
(37) Key Employee as determined pursuant to Code Section 416(i)
------------
and the Regulations thereunder, is any person who is at any time during
the Plan Year, or any one of the four preceding Plan Years was:
(a) an officer of the Employer or Affiliate, whose Code Section
415 Compensation is more than fifty percent (50%) of the amount
set out in Code Section 415(b)(1)(A) for any such Plan Year;
(b) one of the ten (10) Employees having Code Section 415
Compensation from the Employer of more than the limitation set
forth in Code Section 415(c)(1)(A) and owning or considered owning
within the meaning of Code Section 318, the largest interests in
the Company;
(c) a five percent (5%) owner of the Employer or Affiliate; or,
(d) a one percent (1%) owner of the Employer or Affiliate
having a Code Section 415 Compensation of more than $150,000.00.
(38) Matching Contribution shall have the same meaning as set
----------------------
forth in Code Section 401(m)(4)(A) and generally means any amounts
rolled-over or transferred to the Plan on behalf of an Employee who had
such amounts contributed by an employer on account of such Employee's
elective deferral and made when such Employee participated in a
Qualified Plan maintained by an employer other than an Employer.
6
<PAGE>
(39) Matching Contribution Account shall mean the portion
-----------------------------
of a Participant's Individual Account attributable to Matching
Contributions which were rolled-over or transferred into the Plan in
accordance with the provisions of Section 4.6 (Rollover Contribution).
(40) Named Fiduciaries are defined and designated in Section
-----------------
9.10 (Named Fiduciaries and Allocation of Responsibilities).
(41) Non-Elective Contribution shall have the same meaning
-------------------------
as set forth in Treasury Regulations Section 1.401(k)-1(g)(10) and
generally shall mean any amounts, other than Matching Contributions,
contributed on behalf of an employee by an employer while such employee
was a participant in a Qualified Plan maintained by an employer other
than an Employer, and which such employee could not have elected to
receive in the form of cash or other taxable benefit.
(42) Non-Elective Contribution Account shall mean the
---------------------------------
portion of a Participant's Individual Account attributable to Non-
Elective Contributions which were rolled-over or transferred into the
Plan in accordance with the provisions of Section 4.6 (Rollover
Contribution).
(43) Non-Key Employee shall mean any Employee who is not a
----------------
Key Employee as that term is defined herein or otherwise defined in Code
Section 416(i) or the Treasury Regulations thereunder.
(44) Normal Retirement Age of a Participant is the date on
---------------------
which such Participant attains sixty-five (65) years of age.
(45) Normal Retirement Date shall mean the first day of the
----------------------
month coincident with or first following the date on which a Participant
attains Normal Retirement Age and has elected to retire.
(46) One-Year Break in Service shall mean an Employment Year
-------------------------
during which a Participant is not credited with more than five hundred
(500) Hours of Service.
(47) Participant refers to any Employee who has met the
-----------
qualification requirements to participate in the Plan pursuant to the
provisions of Article 3 (Eligibility and Participation). Any person who
at one time was a Participant in the Plan and has since severed
employment with an Employer, or no longer has amounts contributed to the
Plan but who has a balance in his Individual Account shall also be
considered to be a Participant. Unless otherwise indicated herein, an
Alternate Payee and Beneficiary shall be considered to be a Participant.
(48) A Permitted Absence occurs when such Participant's
-------------------
absence from work is either:
(a) by reason of the pregnancy of such Participant,
(b) by reason of the birth of a child of such
Participant,
(c) by reason of the placement of a child in connection
with the adoption of a child by such Participant, or
(d) for purposes of caring for such child immediately
following the birth or placement by adoption.
(e) For purposes of this Section, a Participant who
is absent from work for reason of a Permitted Absence is
to be considered to have completed either the number of
hours that normally would have been credited if such
absence has not occurred or, eight (8) Hours of Service
for each normal work day during the absence. In no event
shall more than five hundred and one (501) Hours of
Service be treated as completed pursuant to this Section.
7
<PAGE>
(f) If such crediting is necessary to prevent a Break in
Service for the Computation Period in which the Permitted
Absence began, then such Hours of Service to be credited
pursuant to this Section shall be credited to a Computation
Period commencing on the date which the Permitted Absence
begins. In all other instances the crediting of Hours of Service
pursuant to this Section shall apply to the Computation Period
immediately following the Computation Period in which the
Permitted Absence begins.
(g) Any Participant who is absent from work for more than
twelve (12) consecutive months because of a Permitted Absence,
then that Computation Period commencing on the first anniversary
of the first date of such Permitted Absence shall be treated as
neither a period of service nor as a period of absence.
(49) Permanent and Total Disability shall mean the inability
------------------------------
of a Participant to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long-continued and indefinite
duration. Whether a Participant experiences a Permanent and Total
Disability shall be determined by the Plan Administrator, in its sole
discretion, and shall be (a) based upon an independent opinion
considered acceptable to the Plan Administrator, (b) made in a uniform
manner pursuant to the policies established by the Plan Administrator,
and (c) shall be final and conclusive.
(50) Permissive Aggregation Group means two or more plans
----------------------------
of a single Employer aggregated pursuant to the aggregation rules of
Code Section 416 whereby the group of such plans include at least one
plan which is not required to be aggregated but satisfies the
qualification requirements pursuant to the coverage and anti-
discrimination rules set forth in the Code.
(51) Plan refers to the EDS Deferred Compensation Plan as
----
amended and restated and set forth in and given effect to by this
instrument and all amendments hereto.
(52) Plan Administrator shall mean the Plan's Administration
------------------
Committee as duly appointed and authorized herein to perform those
actions and duties in the administration of the Plan.
(53) Plan Year shall mean the consecutive twelve-month
---------
period beginning on January 1.
(54) Preretirement Survivor Annuity is defined in Section
------------------------------
6.8(b)(i).
(55) QDRO Account shall mean the account established by the
------------
Plan Administrator for the benefit of an Alternate Payee pursuant to a
Qualified Domestic Relations Order.
(56) Qualified Consent means an irrevocable written consent
-----------------
of the spouse of a Participant which acknowledges the effect of the
consent and is witnessed by a Plan representative or notary public in
accordance with the then established policies of the Plan Administrator.
However, any requirement for Qualified Consent may be deemed waived by
the Plan Administrator when the Plan Administrator establishes to its
satisfaction that there is not a spouse of the Participant; or the
spouse of the Participant cannot be located. Any consent obtained hereby
shall be effective only with respect to the signing spouse. A consent
that permits designations by the Participant without any requirement or
further consent by such spouse must acknowledge that the spouse has the
right to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior waiver
may be made by a Participant without the consent of the spouse at any
time before the commencement of benefits. The number of revocations
shall not be limited. No qualified consent shall be valid unless the
Participant has received notice as provided in Section 6.14.
(57) Qualified Domestic Relations Order shall mean a
----------------------------------
domestic relations order which meets the requirements of Code Section
414(p).
8
<PAGE>
(58) Qualified Plan shall mean any employee benefit plan
--------------
which satisfies the provisions of Code Section 401(a).
(59) Required Beginning Date shall mean the April 1 first
-----------------------
following the calendar year in which a Participant attains age seventy
and one-half (70-1/2).
(60) Rollover Account shall mean the portion of a
----------------
Participant's Individual Account consisting of contributions made
pursuant to Section 4.6 (Rollover Contributions) by such Participant to
the Plan, together with any Adjustments allocated thereto.
(61) Rollover Contribution shall mean an amount contributed
---------------------
pursuant to Section 4.6 (Rollover Contributions) by a Participant of the
Plan to establish, or add to, a Rollover Account and subject to the
requirements set forth herein.
(62) Salary Reduction Agreement shall mean an election made
--------------------------
by a Participant in accordance with Section 4.2(a) (Salary Reduction
Election) by which the Participant agrees that the Employer will reduce
the Participant's Compensation during such eligible pay period by a
designated percentage and contribute that designated percentage to the
Plan on behalf of the Participant.
(63) Taxable Wage Base means, with respect to any Plan Year,
-----------------
the maximum amount of earnings which may be considered wages under Code
Section 3121(a)(1) in effect at the beginning of such year.
(64) Top-Heavy Plan generally means, for any Plan Year any
--------------
plan under which, as of any determination date, the present value of the
sum of the Individual Account balances under the plan for key Employees
exceeds sixty percent (60%) of the sum of all Individual Account
balances for all Employees.
(65) Top-Paid Group is defined in Section 4.4(c).
--------------
(66) Trust shall mean, as of a particular date, the total of
-----
the contributions made in accordance with the Plan, increased by the net
income thereon and decreased by the benefits paid under the Plan, losses
incurred, and expenses of administering the Plan held by the Trustee
pursuant to the terms of the Trust Agreement.
(67) Trust Agreement means the agreement entered into
---------------
between the Company or an Employer and the Trustee pursuant to Section
8.1 (Trustee).
(68) Trustee shall mean such individual or financial
-------
institution, or a combination, as shall be designated by the Trust
Agreement to hold in trust any assets of the Plan for purposes of
providing benefits under the Plan, and shall include any successor
Trustee to the Trustee initially designated thereunder. The Trustee
shall be a named fiduciary.
(69) Valuation Date shall mean each day on which the New
--------------
York Stock Exchange is trading or as otherwise determined by the
Trustee, on which the Trust shall be valued at fair market value. In no
event shall a Valuation Date occur less frequently than once in a
consecutive twelve (12) month period.
(70) Voluntary Contribution shall mean voluntary after-tax
----------------------
contributions made by a Participant in a Qualified Plan.
(71) Voluntary Contribution Account shall mean the portion
------------------------------
of a Participant's Individual Account attributable to Voluntary
Contributions together with the Adjustments attributable thereto.
9
<PAGE>
(72) Year of Service shall mean a Computation Period,
---------------
commencing on the first day a person becomes employed or reemployed by
an Employer, during which such Employee has not less than one thousand
(1,000) Hours of Service.
2.2 Construction. The headings and subheadings in the Plan are
------------
provided for convenience of reference only and shall not affect the construction
or interpretation of the provisions. In any necessary construction of a plan
provision, the masculine gender may include the feminine or neuter, and the
singular may include the plural, and vice versa.
ARTICLE 3
ELIGIBILITY PARTICIPATION AND
-----------------------------
BENEFICIARY DESIGNATION
-----------------------
3.1 Eligibility Period. Each Employee shall automatically be
------------------
eligible to participate in the Plan upon commencing the first Hour of Service
with an Employer.
3.2 Participation. Each eligible Employee of an Employer shall be
-------------
given written notice by the Employer of the requirements of eligibility and
shall become a Participant by notifying the Plan Administrator in accordance
with the then established policies of the Plan Administrator and agreeing to
accept and be bound by all the terms and conditions of the Plan. As of any
Participant's Election Date, such Participant shall remain a Participant for so
long as there exists a remaining balance in such Participant's Individual
Account.
3.3 Beneficiary Designation. At any time, and in accordance with
-----------------------
the policies then established by the Plan Administrator, each Participant may
designate the Beneficiary or Beneficiaries to receive such Participant's death
benefit and shall have the restricted right to revoke any such designation. Each
such designation or revocation shall be evidenced by written instrument filed
with the Plan Administrator, signed by the Participant and either at least one
representative of the Plan as witness to the Participant's signature, or
properly notarized. Any designation of a Beneficiary other than the
Participant's spouse shall be void and without effect unless such designation
includes a Qualified Consent. Any revocation of a designation of a Participant's
spouse as Beneficiary is void without a proper Spousal Consent. If no such
designation is on file with the Plan Administrator, at the time of the
Participant's death or if, for any reason, the Plan Administrator determines
that no such designation is in effect, then the Participant's spouse shall be
deemed the Beneficiary. If, at the time of death, the Participant is not married
then the children of such Participant shall be deemed Beneficiaries and shall be
paid the benefit share-and-share alike. If at the time of death the Participant
has no spouse or children, then the estate of such Participant shall be
conclusively deemed to be the Beneficiary designated to receive such
Participant's death benefit. If a Participant has designated the Participant's
spouse as a Beneficiary, and as of the time of the occurrence of a distributable
event, the Participant is no longer married to such designated Beneficiary, and
has not properly designated another as Beneficiary in lieu of the Participant's
ex-spouse, then such designated Beneficiary shall be paid benefits in accordance
with the Beneficiary designation and the terms of the Plan.
ARTICLE 4
CONTRIBUTIONS
-------------
4.1 Contributions. Contributions as provided for in this Article
-------------
shall be paid to the Trustee. All contributions by the Employer shall be
irrevocable, except as herein provided, and may be used only for the exclusive
benefit of the Participants and their Beneficiaries.
4.2 Elective Contributions. Subject to the limitations set forth
----------------------
herein, a Participant may elect to have Elective Contributions contributed to
the Plan on his behalf as follows:
10
<PAGE>
(a) Salary Reduction Election. Each Participant, in
-------------------------
accordance with the policies then established, shall enter into a Salary
Reduction Agreement with the Plan Administrator as to his election for
salary reduction. The designated percentage by which a Participant may
reduce his salary pursuant to an election may be any whole percentage
between one percent (1%) and twenty percent (20%) of the Compensation
otherwise payable to the Participant during the pay period. Such
election shall be effective no sooner than the pay period first
occurring after the acceptance of such Salary Reduction Agreement by the
Employer in accordance with the procedures then established by the Plan
Administrator.
(b) Revocation or Change of Election. Each Participant,
--------------------------------
by notice to the Plan Administrator in accordance with the procedures
then established by the Plan Administrator and communicated to
Participants, may prospectively elect to reduce or increase a salary
reduction agreement made in accordance with this Section 4.2 (Elective
Contributions). Not more than four (4) such elections may be made during
any Plan Year. If Elective Contributions are ceased hereunder, a
Participant may reinstate Elective Contributions by entering into a new
Salary Reduction Agreement in accordance with this Section.
Notwithstanding anything to the contrary, a Participant may always
revoke any Salary Reduction Election.
(c) Payment of Elective Contributions to the Trust. Amounts
----------------------------------------------
contributed pursuant to a Salary Reduction Agreement shall be delivered
by the Employer to the Trustee as soon as practicable but not less
frequently than once every calendar quarter. Contributions shall be
credited to the Participant's Elective Contribution Account pursuant to
Section 5.2 (Allocation of Elective Contribution Account) and shall not
be subject to withdrawal except as specifically provided herein.
(d) Limitation on Elective Contributions. For any Plan
------------------------------------
Year, no Participant shall make Elective Contributions in excess of
Seven Thousand Dollars ($7,000) or such other amount as may from time to
time be provided in accordance with Code Section 401(a)(30) or the
Treasury Regulations thereunder. If, during a Plan Year, contributions
made into a Participant's Individual Account exceed the limitation then
in effect, then the Plan Administrator shall make a corrective
distribution in accordance with the requirements of Treas. Reg. Section
1.401(k)-1(f)(4). The Plan Administrator shall return the excess
deferrals for Plan Years 1992 and 1993 together with the income earned
on such amount including the income earned thereon for the period
between the end of the Plan Year and the date the Trustee receives
directions from the Plan Administrator to distribute such excess
deferral to the Participant. For Plan Years beginning after December 31,
1993, the Plan Administrator shall return the excess Elective
Contributions together with income earned thereon through the end of
each Plan Year, but shall not return any income earned thereon between
the end of the Plan Year and the date the Trustee receives directions
from the Plan Administrator to distribute such excess deferral to the
Participant.
4.3 Recharacterization of Elective Contributions. Upon receipt of
--------------------------------------------
all Salary Reduction Agreements the Plan Administrator shall check the deferral
percentages against the Actual Deferral Percentage Tests set forth in Section
4.4 (Actual Deferral Percentage Test). In the event that neither the 1.25 Test
or the 2.0 Test is met, the Plan Administrator will adjust downward to modify
the future salary reductions with respect to the Highly Compensated Employees.
If any discrimination is still present, the Plan Administrator shall, to the
extent permitted by law, pay such amounts credited to the affected Participant's
Elective Contribution Account together with interest, directly to such
Participant. Failure to correct excess contributions by the close of the plan
year following the plan year for which they were made will cause the Plan to
fail to satisfy the requirements of Code Section 401(k)(3) for the Plan Year
during which the excess contributions were made and for all subsequent years
during which they were not corrected. The Employer will be liable for a 10%
excise tax on the amount of excess contributions unless they are corrected
within 2 1/2 months after the last day of the Plan Year for which they were
made.
(a) Correction for Highly Compensated Employee.
------------------------------------------
Notwithstanding any to the contrary, the amount of excess contributions
for a Highly Compensated Employee will be determined in accordance with
the provisions of this Section. The actual deferral ratio of the Highly
Compensated Employee with the highest actual deferral ratio is reduced
to the extent necessary to satisfy the actual deferral percentage test
determined in accordance with Section 4.4 or cause such ratio to equal
the actual deferral ratio of the Highly Compensated Employee with the
next highest ratio. This process is repeated until the actual deferral
percentage test set forth
11
<PAGE>
in Section 4.4 is satisfied. The amount of excess contributions for a
Highly Compensated Employee is then equal to the total of elective and
other contributions for a Highly Compensated Employee is then equal to
the total of elective and other contributions taken into account for the
actual deferral percentage test minus the product of the Participant's
reduced deferral ratio as determined above and the Participant's Code
Section 415 Compensation.
(b) Correction for Highly Compensated Employee Per Family
-----------------------------------------------------
Aggregation Rules. In the case of a Highly Compensated Employee whose
-----------------
actual deferral ratio is determined under the family aggregation rules
of Code Section 414(q)(6), the determination of the amount of excess
contributions shall be made by combining the elective contributions and
compensation for all family members which include the highly compensated
employee's spouse and all lineal descendants, their spouses and lineal
descendants and ascendants. The actual deferral rate is reduced in
accordance with the leveling method described in Treasury Regulations
Section 1.401(k)-1(f)(2) and the excess contributions are allocated
among the family members in proportion to the contributions of each
family member that have been combined.
4.4 Actual Deferral Percentage Test. At least once every Plan Year,
-------------------------------
or more frequently as otherwise determined by the Plan Administrator, all
Employees shall be divided by definition into either the Highly Compensated
Employee group or the Non-Highly Compensated group. Only one of the following
tests need be satisfied for there not to be a recharacterization of Elective
Contributions in accordance with Section 4.3 (Recharacterization of Elective
Contributions). All rules of application with reference to both tests shall be
governed by Code Section 401(k) and any rules or regulations issued pursuant
thereto.
(a) 1.25 Test. This test is met when the actual deferral
---------
percentage for the Highly Compensated Employee group is not more than
the actual deferral percentage of the Non-Highly Compensated Employee
group multiplied by 1.25.
(b) 2.0 Test. This test is met when the excess of the
--------
actual deferral percentage for the Highly Compensated Employee group
over the actual deferral percentage for the Non-Highly Compensated
Employee group is not more than two percentage points (2%) or such
lesser amount determined pursuant to the Treasury Regulations to prevent
the multiple use of this alternative limitation with respect to any
Highly Compensated Employee. Additionally, the actual deferral
percentage for the Highly Compensated Employee group shall not exceed
the product of the actual deferral percentage for the Non-Highly
Compensated Employee group multiplied by two (2).
(c) Non-Highly Compensated Employee shall mean for purposes
-------------------------------
of this Section, any Employee who is not a Highly Compensated Employee.
(d) Highly Compensated Employee as determined pursuant to
---------------------------
Code Section 414(q) and the Treasury Regulations thereunder, shall mean
for purposes of this Section, any Employee of any Employer required to
be aggregated pursuant to the aggregation rules of Code Sections 414(b),
414(c), 414(m) or 414(o), who, as of the last day of the preceding Plan
Year ("Determination Date"):
(i) was at any time a 5-percent owner;
(ii) received Code Section 415 Compensation in excess of
$75,000;
(iii) received Code Section 415 Compensation in excess of
$50,000 and is an Employee who is one of the top twenty percent
(20%) of Employees when ranked on the basis of Code Section 415
Compensation paid during such determination year (the "Top-Paid
Group"); or
(iv) was at any time an officer and received Code Section
415 Compensation greater than fifty percent (50%) of the amount
in effect pursuant to Code Section 415(b)(1)(A).
12
<PAGE>
(A) For purposes of this subsection, no more than 50
Employees or, if lesser, the greater of three (3)
Employees or ten percent (10%) of the Employees, shall
be treated as officers; and
(B) If for any determination year, an officer of the
Employer is not described in this subsection, then the
highest paid officer of the Employer for the
determination year shall automatically be considered a
Highly Compensated Employee.
4.5 Payment of Employer Contributions to Trustee. Each Employer
--------------------------------------------
shall pay to the Trustee the Elective Contributions for each payroll period as
soon as administratively practicable thereafter, but in no event later than the
time prescribed by law, including only extensions of time for the filing of its
federal income tax return for such Plan Year.
4.6 Rollover Contribution. Subject to the approval of the Plan
---------------------
Administrator, an Employee may contribute a rollover amount to the Trust which
is a distribution as defined in Code Section 402 or which is a rollover
contribution described in Code Section 408(d)(3). The Plan may accept a
rollover of any amounts distributed on behalf of a Participant, from a
Qualified Plan or a plan established pursuant to Code Section 403(a) to this
Plan. Such rollover amount shall be credited to the Participant's Individual
Account as of the Valuation Date next following receipt by the Trustee.
Notwithstanding anything to the contrary herein, the Plan Administrator may
instruct the Trustee to return any amounts transferred or contributed to the
Plan in accordance with the Section which, after transferred or contributed
into the Plan are determined to be made in contravention of any qualification
provisions of the Code or of the intent of the Plan.
4.7 Transferred Assets. As a condition to accepting a direct
------------------
transfer of Participant's benefits held in a plan qualified under Code Section
401(a), as of July 1, 1991, the Plan Administrator shall require that all
amounts, or portions thereof, which shall comprise such transferred assets, be
properly identified by the Employee or transferring plan's trustee or plan
administrator as either Matching Contributions, Non-Elective Contributions,
Voluntary Contributions or Elective Contributions, or earnings therefrom. It is
specifically prohibited to reduce or eliminate any benefit protected under Code
Section 411(d)(6) which would otherwise be reduced or eliminated as the result
of a merger of a Qualified Plan with the Plan, the transfer of assets from a
Qualified Plan to the Plan or any other event having the effect of amending a
Qualified Plan or Plans in order to transfer plan benefits. The Plan hereby
incorporates by reference the provisions of any Qualified Plan which is merged
into, or from which assets are transferred to, the Plan, which are controlling
with respect to any benefit protected under Code Section 411(d)(6) and necessary
to prevent the reduction or elimination of any such protected benefit.
4.8 Reverting of Contribution Made by Mistake of Fact. If any
-------------------------------------------------
contribution is made by an Employer to the Plan by mistake of fact, including
but not limited to, an arithmetical error in calculating the amounts that were
to be contributed to the Plan, such portions of the contribution as were made by
such mistake of fact may, at the election of the Employer, together with any
earnings or losses thereon, revert and be repaid to the Employer within one (1)
year after such amounts were contributed to the Plan.
4.9 Reverting of Non-Deductible Contribution. If a contribution is
----------------------------------------
made by an Employer to the Plan which is not wholly deductible under Code
Section 404, then, to the extent the deduction is disallowed, such non-
deductible amounts together with any earnings or losses thereon, at the election
of an Employer, shall be returned to the respective Participants within one year
after the contribution is made into the Trust.
4.10 Limitation on Reversions. Except as provided herein, the
------------------------
principal and income of the Trust shall in no event be paid to or revert to the
Employer or be used for any purpose other than the exclusive benefit of the
Participants and their Beneficiaries.
4.11 No Contributions by Participants. There are no contributions
--------------------------------
required of, or permitted by, Participants, except for Rollover Contributions
which shall be subject to the requirement hereinafter set forth. The benefits
under the Plan, as presently in effect, will be completely provided by an
Employer's contributions as set forth in this Article.
13
<PAGE>
ARTICLE 5
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
----------------------------------
5.1 Individual Account. The Trustee shall establish and maintain an
------------------
Individual Account in the name of each Participant to which the Trustee shall
credit all amounts allocated to each Participant pursuant to the provisions of
Article 4 (Contributions) and the following Sections of this Article. The
Trustee shall also maintain records to indicate the amount of each Individual
Account that is invested in each Investment Fund. Each Participant shall, at
all times, be one hundred percent (100%) vested in all amounts credited to each
Participant's Individual Account and such vested amounts shall at all times be
nonforfeitable. If at any time the Board in its discretion and pursuant to
Section 10.1 (Amendment of Plan), shall amend the Plan to include a vesting
schedule, then any Employee who as a Participant on the effective date of such
amendment shall not have a less-favorable vesting schedule apply to the portion
of the Participant's individual account in which the Participant has a vested
interest.
5.2 Allocation of Elective Contribution Account. The Plan
-------------------------------------------
Administrator shall furnish the Trustee with written instructions in accordance
with Section 4.2 (Elective Contributions) permitting the Trustee to allocate
properly all contributions to the Plan to the separate accounts of Participants.
In crediting amounts to Participant's separate accounts, the Trustee shall be
under no duty to make any inquiry or investigation with respect thereto.
5.3 Allocation of Adjustment. The Adjustment of the Trust shall be
------------------------
determined by the Trustee as of each Valuation Date and allocated in accordance
herewith. Any Adjustment shall be deemed conclusive.
(a) The dividends, capital gains distributions, and other
earnings and losses incurred on any share or unit of a Vanguard Fund or
on any other Plan investment that is specifically credited or earmarked
to a Participant's separate account under the Plan shall be allocated to
such separate account and immediately reinvested, to the extent
practicable, in additional shares or units of such Vanguard fund or
other earmarked Plan investment.
(b) The assets of the Plan shall be valued at their current
fair market value as of each Valuation Date, and the earnings or losses
of the Plan since the immediately preceding Valuation Date shall be
allocated to the separate accounts of all Participants and former
Participants under the Plan in the ratio that the fair market value of
each such account as of the immediately preceding Valuation date,
reduced by any distributions or withdrawals therefrom since the
preceding Valuation date, bears to the total fair market value of all
separate accounts as of the immediately preceding Valuation Date,
reduced by any distributions or withdrawals therefrom since such
preceding Valuation Date.
5.4 Allocation Procedures. The Trustee shall establish accounting
---------------------
procedures for the purpose of making the allocations, valuations and
Adjustments to any account comprising any Participant's Individual Account.
Should the Plan Administrator determine that the strict application of its
accounting procedures will not result in an equitable and nondiscriminatory
allocation among the Participant's Individual Accounts, then it may modify its
procedures for the purpose of achieving an equitable and non-discriminatory
allocation in accordance with the general concepts of the Plan and its
provisions.
5.5 Maximum Additions. Despite anything herein to the contrary,
-----------------
the total Annual Additions made to the Individual Account of a Participant for
any Limitation Year shall not exceed the maximum amount stated herein. If a
Participant is covered by one or more defined contribution plans maintained by
the Employer, the maximum Annual Additions as noted above shall be decreased as
determined necessary by the Employer, prior to a reduction in such other Defined
Contribution Plans, to insure that all such plans will remain qualified under
the Code. The maximum Annual Addition made to the Individual Account of a
Participant for a Limitation Year, when combined with any similar Annual
Additions credited the Participant for the same period from another qualified
defined contribution plan maintained by the Employer, shall not exceed the
lesser of either;
14
<PAGE>
(a) $30,000 or such other amount as may be set from time to
time in accordance with the Code or the regulations thereunder, or;
(b) twenty-five percent (25%) of the Participant's total
non-deferred Compensation received from the Employer for such Limitation
Year.
5.6 Correction For Excessive Annual Additions. If as of the
-----------------------------------------
Valuation Date coinciding with the last day of a Limitation Year corrective
adjustments in the Annual Addition to any Individual Account are required
pursuant to Section 5.7 (Maximum Additions) then the Plan Administrator shall,
in accordance with Treasury Regulation Section 1.415-6(b)(6)(iv), reduce the
Participant's Elective Contribution Account by the amount required to insure
compliance with Section 5.7 (Maximum Additions). Reductions in a Participant's
Individual Account shall include contributions and earnings and shall be
returned to the Participant.
5.7 Limitation For Multiple Plan Participants. If a Participant
-----------------------------------------
participates in both a defined contribution plan and in a defined benefit plan
maintained by the Employer, then the sum of the Defined Contribution Plan
Fraction, and the Defined Benefit Fraction with respect to such Participant for
any Limitation Year may not exceed 1.00. However, should this sum exceed 1.00,
the benefit under the defined benefit plan maintained by the Company, if any,
shall first be reduced to ensure that such sum shall not exceed 1.00 pursuant
to transitional rules provided by law. If reducing the benefit under any
defined benefit plan maintained by a Controlled Group Member in which the
Participant participates shall be reduced to ensure that the sum shall not
exceed 1.00. If after reducing such benefit under such defined benefit plans
does not reduce the sum to 1.00 or less, then the benefit under any defined
benefit plan maintained by the Company does not reduce the sum to 1.00 or less,
then the benefit under any defined benefit plan maintained by or a Controlled
Group Member in which the Participant participates shall be reduced to ensure
that the sum shall not exceed 1.00. If after reducing such benefit under such
defined benefit plans does not reduce the sum to 1.00 or less, then the benefit
under the Plan shall be reduced to ensure that such sum shall not exceed 1.00
pursuant to the transitional rules provided by law. At the election of the
Plan Administrator, any applicable transitional rules provided by law may be
used in computing the overall limitation. For purposes of this Section the
following definitions apply:
(a) Defined Benefit Plan Fraction shall mean the fraction
-----------------------------
where the numerator is equal to the projected Annual Benefit (as defined
in Revenue Regulations Section 1.415-7(b)(3)) to the Individual Accounts
as determined as of the following amounts:
(i) the product of 1.25 multiplied by the dollar limitation as
established in Code Section 415(b)(1)(A), or
(ii) the product of 1.4 multiplied by the dollar limitation as
established in Code Section 415(b)(1)(B).
(b) Defined Contribution Plan Fraction shall mean the
----------------------------------
fraction where the numerator is equal to the sum of the Annual Additions
to the Participant's Individual Account determined as of the last day of
such Plan Year; and the denominator is equal to the sum of the lesser of
the following amounts determined as of the last day of such Plan Year
and for each prior Year of Service with the Employer:
(i) the product of 1.25 multiplied by the dollar limitation set
out in Code Section 415(c)(1)(A) for the Plan Year; or,
(ii) the product of 1.4 multiplied by the dollar limitation
which may be taken into account under Code Section 415(c)(1)(B).
15
<PAGE>
ARTICLE 6
DISTRIBUTIONS
-------------
6.1 Normal Retirement. The balance of a Participant's Individual
-----------------
Account shall become payable upon the Normal Retirement Date. The Plan
Administrator shall direct the Trustee to distribute to the Participant such
amount in accordance with Section 6.8(b).
6.2 Early Retirement. A Participant may retire from the employment
----------------
of the Employer on or after the Early Retirement Date. Upon the retirement of a
Participant in accordance with the provisions of this Section, the balance of
such Individual Account shall become payable and the Plan Administrator shall
thereupon direct the Trustee to distribute to such Participant such amount in
accordance with Section 6.8 hereof.
6.3 Death. At the time of the death of a Participant prior to the
-----
commencement of the distribution of such Participant's Individual Account the
balance of such Participant's Individual Account shall become payable as a
death benefit and shall be paid in accordance with Section 6.8.
6.4 Disability. Upon the occurrence of the Permanent and Total
----------
Disability of a Participant, a Participant may elect to have the balance of such
Participant's Individual Account become payable, and upon the Participant's
proper election, the Plan Administrator shall direct the Trustee to distribute
to such Participant such amount in accordance with Section 6.8 (Distribution of
Benefits). Whether a Participant experiences a Permanent and Total Disability
shall be determined by the Plan Administrator, in its sole discretion and
pursuant to the policy established by the Plan Administrator and in effect on
the date that such disability occurred.
6.5 Participant's Death Prior to Commencement of Distribution - the
---------------------------------------------------------------
"Five-Year Rule" and Exceptions Thereto. If a Participant dies before the
- ---------------------------------------
distribution of the balance of the vested interest in such Participant's
Individual Account has begun in accordance with the provisions herein, the
entire balance of such Participant's Account will be distributed within five
(5) years after the date of such Participant's death. This Section is subject
to the following exceptions:
(a) Payable Over Life of Beneficiary. The Five-Year Rule
--------------------------------
does not apply if a portion of the Participant's Individual Account is
payable to a Designated Beneficiary for life, or over a period not
extending beyond the Designated Beneficiary's life expectancy, and the
payments commence within one (1) year of the Participant's death. All
distributions made pursuant to this subsection must also satisfy the
minimum distribution rules applicable to before-death distributions.
(b) Special Rule for Surviving Spouse. The Five-Year Rule
---------------------------------
does not apply when the Beneficiary is the surviving spouse of the
Participant. In such event, distribution may be made to such surviving
spouse either (i) in payments over the period of such surviving spouse's
life or, (ii) over a period not extending beyond the life expectancy of
such surviving spouse, provided that payments begin no later than the
Required Beginning Date. In the event that such surviving spouse dies
before the payments are required to commence, then the Five-Year Rule
must be applied as if such surviving spouse were the Participant. The
remaining balance in such Participant's Individual Account need not be
distributed within five (5) years of the death of such Participant's
surviving spouse as long as the payments commence within one (1) year of
the date of death of the Participant and are payable to the surviving
spouse's Designated Beneficiary for life or over a period not extending
beyond the life expectancy of such surviving spouse's beneficiary.
6.6 Life Expectancy Determination. For purposes of distribution of
-----------------------------
benefits herein, the life expectancy of a Participant and the Participant's
spouse shall not be redetermined more than once in a twelve-month period and
shall then be determined in accordance with Code Section 401(a)(9) and the
Treasury Regulations thereunder.
6.7 Termination of Employment. If a Participant either voluntarily
-------------------------
or involuntarily terminates employment with the Employer for any reason other
than death, Permanent and Total Disability, or retirement, then the benefit
payable to such Participant shall equal the balance of his Individual Account as
of the date of such termination
16
<PAGE>
of employment together with any Adjustments made to such Participant's
Individual Account through the Valuation Date upon distribution. In the event a
Participant who has terminated his employment with an Employer is reemployed as
an Employee prior to receiving a distribution of the balance of the Individual
Account, such Employee shall then not be entitled to a distribution pursuant to
this Section.
6.8 Distribution of Benefits. The Trustee shall only make
------------------------
distributions from the Trust pursuant to the Plan Administrator's instructions.
Such distributions shall only be made to Participants or to an authorized
personal representative of such Participant or such Participant's estate and
shall be made in accordance with the terms and conditions of the Code, the
Treasury Regulations thereunder, as follows:
(a) Application for Benefits. In order to receive a
------------------------
benefit pursuant to the terms of the Plan, a Participant or authorized
personal representative, must make a written application as required by
the Plan Administrator. The Plan Administrator may require information
which in its discretion is considered pertinent to any question of
eligibility and the amount of any benefit.
(b) Method of Payment. Any married Participant who has not
-----------------
made a proper election hereunder shall have benefits distributed in the
method provided in subsection 6.8(b)(i) (Joint and 50% Survivor Annuity)
or, if the participant is single or the Participant and the
Participant's spouse have not been married to each other throughout the
one year period ending on the date benefits are to begin under this
Section, then such Participant's benefits shall be distributed in the
method provided in subsection 6.8(b)(iv) (Life Annuity). A Participant
shall have the right to make election with the necessary Qualified
Consent to the Plan Administrator in accordance with the procedures then
established by the Plan Administrator to have benefits paid under the
option set forth in subsection 6.8(b)(ii) (Lump Sum) or 6.8(b)(iii)
(Periodic Installments). With a Qualified consent, a Participant may
revoke such election at any time prior to the commencement of
distribution of benefits in accordance with the procedures then
established by the Plan Administrator.
(i) Joint and 50% Survivor Annuity. Benefits payable in
------------------------------
accordance herewith shall be distributed pursuant to an annuity
contract purchased by the Trustee which is an annuity for the
life of the Participant with a survivor annuity for the life of
the Participant's spouse or Designated Beneficiary which is not
less than fifty percent (50%) of the amount of the annuity
payable during the joint lives of the Participant and the
Participant's spouse ("Joint and 50% Survivor Annuity") or if
------------------------------
such Participant should die prior to the commencement of the
payment of benefits from the Plan, then benefits payable in
accordance herewith shall be distributed pursuant to an annuity
contract purchased by the Trustee, which is an annuity for the
life of the Participant's surviving spouse ("Preretirement
-------------
Survivor Annuity"). Any benefit payable in accordance with this
----------------
subsection shall always be and remain subject to the provisions
of Code Sections 401(a)(11) and 417.
(ii) Lump Sum. Benefit payments made in this method shall be
--------
made in a lump sum.
(iii) Periodic Installments. A Participant can elect to receive
---------------------
benefits paid in equal periodic payments determined based upon
the value of such Participant's Individual Account as of the
Valuation Date first occurring on or after the date entitling
such Participant to a distribution, together with earnings,
payable over the lesser of (a) a period not to exceed ten (10)
years; or (b) a period not to exceed the Participant's life
expectancy as determined at the time payment of benefits are to
commence.
(iv) Life Annuity. Benefits payable in accordance herewith shall
------------
be distributed pursuant to an annuity contract purchased by the
Trustee which is an annuity for the life of the Participant.
Such annuity shall not provide any survivor option. Any benefit
payable in accordance with this subsection shall always be and
remain subject to the provisions of Code Sections 401(a)(11) and
417.
(c) Automatic Distribution. Notwithstanding anything to the
----------------------
contrary herein, any Participant with an Individual Account which has
never exceeded $3,500.00 as of the Valuation Date first occurring on or
17
<PAGE>
after the first date on which the Participant is entitled to a
distribution shall, regardless as to whether there is a Qualified
Consent, and as soon as administratively practicable, automatically
receive the balance of such Participant's Individual Account paid in the
form of a Lump Sum as set forth in subsection 6.8(b)(ii) (Lump Sum).
(d) Payment of Benefits. Payment of benefits to eligible
-------------------
Participants shall begin at the time and in the manner as properly
elected by the Participant in accordance with the provisions then
established by the Plan Administrator. Any Participant who does not
submit an application for the payment of benefits in accordance with
Section 6.1 shall be deemed to have postponed the distribution of
benefits until Required Beginning Date. Each Participant must begin to
receive benefits no later than the Required Beginning Date, and must be
eligible to receive benefits not later than the 60th day after the Plan
Year and coincident with or next succeeding the latest of:
(i) the date on which the Participant attains age sixty-five
(65); or
(ii) the 10th anniversary of the date on which the Participant
commenced participation in the Plan; or
(iii) the date on which the Participant's employment with the
Employer is severed.
(e) Time of Payment. Any amounts distributable in accordance
---------------
with this Article shall be paid to the distributee by the Trustee as
soon as administratively practicable on the Valuation Date on or first
occurring after the Trustee receives authorized distribution directions
from the Plan Administrator, but in no event later than one hundred and
twenty (120) days after such distribution has been approved by the Plan
Administrator for payment, unless otherwise communicated to the
distributee in writing.
(f) Direct Rollover. Any Participant entitled to a distribution
---------------
from the Plan may, in accordance with the procedures then established by
the Plan Administrator, elect to have such payment made directly to an
individual retirement account or qualified employee benefit plan or as
otherwise provided in Code Section 401(a)(31) and the Treasury
Regulations thereunder.
6.9 Maximum Option Payable. In the event a Participant has a
----------------------
benefit paid under subsection 6.8(b)(i) (Joint and 50% Survivor Annuity) and the
Beneficiary is not the spouse of the Participant, the option elected shall be
restricted so that the present value of the payments expected to be made to the
Beneficiary is not more than fifty percent (50%) of the present value of the
total payment expected to be made to the Participant.
6.10 Benefits to Minors and Incompetents. If any person entitled to
-----------------------------------
receive payment under the Plan shall be a minor, or found to be incompetent,
the Plan Administrator may distribute such benefits as follows:
(a) Distribution to Minors. Distributions to minors shall be
----------------------
paid to either parent of such minor, or to any person who shall be
legally qualified and shall be acting as guardian of the person or the
property of such minor; or, to such person who shall hold such funds in
trust for such minor in every case such persons must, before any amounts
are so distributed, have advised the Plan Administrator in writing that
such amounts will be used exclusively for the benefit of such minor.
(b) Distributions to Incompetents. Distributions to a person
-----------------------------
entitled to receive a benefit from the Plan who is physically or
mentally incapable of personally receiving and giving a valid receipt
for any payment due may be made to the legal guardian or other legally
qualified person entitled to receive payment on such incompetent
person's behalf.
6.11 Age 70 1/2. The entire vested interest of any Participant's
----------
Individual Account shall be distributed as follows:
(a) not later than the Required Beginning Date; or,
18
<PAGE>
(b) commencing not later than the Required Beginning Date,
as determined herein, the entire amount credited to a Participant's
Individual Account must be paid out or payments made over the life of
such Participant, the joint lives of the Participant and a Beneficiary,
or for a term not extending beyond the life expectancy of the
Participant and a Beneficiary.
6.12 Special Rule Regarding Certain Distributions From EDS Stock
-----------------------------------------------------------
Fund. If the balance of a Participant's Individual Account, becomes payable and
- ----
any portion thereof is then invested in the EDS Stock Fund, then such
Participant may elect to receive a distribution in whole shares or units of
Employer Stock of all or part of the Individual Account allocated to the EDS
Stock Fund. Any balance in the Participant's Individual Account inclusive of the
value of any fractional share or unit of Employer Stock will be distributed in
cash.
6.13 No Reduction of Benefits. It is specifically prohibited to
------------------------
reduce or eliminate any benefit protected under Code Section 411(d)(6) which
would otherwise be reduced or eliminated as the result of a merger of a
Qualified Plan with the Plan, the transfer of assets from a Qualified Plan to
the Plan or any other event having the effect of amending a Qualified Plan in
order to transfer plan benefits. The Plan hereby incorporates by reference the
provisions of any Qualified Plan which is merged into, or from which assets are
transferred to, the Plan, which are controlling with respect to any benefit
protected under Code Section 411(d)(6) and necessary to prevent the reduction or
elimination of any such protected benefit.
6.14 Required Notifications.
----------------------
(a) Waiver of Joint and 50% Survivor Annuity In the case
----------------------------------------
of a Joint and Survivor Annuity, the Plan Administrator shall, no less than
thirty (30) days and no more than ninety (90) days prior to the Annuity Starting
Date, provide each Participant with a written explanation of:
(i) the terms and conditions of a Joint and Survivor
Annuity;
(ii) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity form of benefit
(iii) the rights of a Participant's spouse; and
(iv) the right to make and the effect of, a revocation of a
previous election to waive the Joint and Survivor Annuity.
(b) Waiver of Preretirement Survivor Annuity. In the case
----------------------------------------
of a Preretirement Survivor Annuity, the Plan Administrator shall
provide each Participant within the Applicable period for such
Participant a written explanation of the Preretirement Survivor Annuity
in such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 6.14(a).
(c) Waiver Period. The applicable period for a Participant
-------------
is whichever of the following periods ends last:
(i) the period beginning with the first day of the Plan
year in which the Participant attains 32 years of age and ending
with the last day of the Plan Year preceding the Plan Year in
which the Participant attains 35 years of age;
(ii) a reasonable period ending after the individual becomes
a Participant;
(iii) a reasonable period ending after Section 6.14 (Required
Notification) ceases to apply to the Participant;
19
<PAGE>
(iv) notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from service
in the case of a Participant who separates from service before
attaining 35 years of age.
ARTICLE 7
WITHDRAWALS AND LOANS
---------------------
7.1 Withdrawals and Loans Generally. Subject to the terms and
-------------------------------
conditions set forth below, a Participant may withdraw or borrow from such
Participant's interest in the Plan upon the application to the Plan
Administrator and in accordance herewith.
7.2 Special Hardship Withdrawal. If, in accordance with the
---------------------------
following provisions, the Plan Administrator determines that a Hardship exists
and that the Participant is so entitled to a Hardship distribution, then,
subject to the following, a Hardship distribution may be distributed to the
Participant at any time which is administratively practicable.
(a) Hardship Defined. For purposes of this Section,
----------------
Hardship is defined as an immediate and heavy financial need which
cannot be satisfied by any other financial resources available to the
Participant. Only the following needs of a Participant shall qualify as
a Hardship:
(i) medical expenses incurred or required to obtain
treatment on behalf of the Participant, the Participant's
spouse, or any dependents of the Participant as defined by Code
Section 152, as necessary for such persons to obtain medical
care described in Code Section 213(d);
(ii) purchase, but not mortgage payments, of a principal
residence for the Participant limited to the difference between
purchase price and mortgage loan amount;
(iii) payment of tuition and related educational fees for
post-secondary education, room and board for the current or next
twelve months to be for the Participant, the Participant's
spouse or dependents of the Participant as defined in Code
Section 152; or,
(iv) prevent eviction or mortgage foreclosure of the
Participant with respect to his principal residence.
(b) Application for Hardship Provision. At any time when
----------------------------------
an Employee seeks a distribution of the, or any portion of the, vested
interest in such Participant's Individual Account, then such Participant
shall deliver a written request to the Plan Administrator, stating
thereon the nature of the Hardship, the estimated amount of funds needed
to alleviate the Hardship, and documentation sufficient to substantiate
the Hardship, and the date when such funds are needed. The Plan
Administrator shall determine whether or not a Hardship exists as to the
Participant, and the amount of the Participant's vested interest,
including all income allocated thereto, in his Elective Contribution
Account together with any amounts which as of December 31, 1988, were
credited to such Participant's Non-Elective Contributions Account,
Matching Contributions Account, and Rollover Account, which shall be
distributed to the Participant to alleviate the Hardship. Within thirty
(30) days of the Plan Administrator's receipt of a Participant's written
request for a Hardship distribution, the Plan Administrator shall notify
the Participant as to whether or not a Hardship was found to exist and
as to the amount of the Participant's vested interest which shall be
distributed to the Participant. No distribution shall be made if a
Qualified Consent has not been obtained and delivered to the Plan
Administrator.
(c) Requisites for Hardship Withdrawal. No distribution
----------------------------------
will be made to any Participant for reason of Hardship unless:
20
<PAGE>
(i) the amount to be distributed pursuant to Section 7.2
(Special Hardship Withdrawal) does not exceed the amount
necessary to alleviate the Participant's necessary and immediate
financial need;
(ii) the Participant has obtained all distributions, other
than Hardship distributions, and all non-taxable loans currently
available under all plans sponsored by the Employer in which he
is eligible to participate;
(iii) the Participant has represented that all other
financial resources available to the Participant have been
exhausted and that the Participant does not have any other
financial resource to alleviate the Hardship;
(iv) any Participant who receives a Hardship distribution
from the Plan shall be prohibited from making Elective
Contributions under the Plan and must agree not to make elective
contributions to any other plan maintained by an Employer until
the first day of the Plan Year coincident with or first
occurring after twelve (12) consecutive months from the date of
the Hardship distribution; and
(v) the Plan and any other Qualified Plan maintained by
the Employer must limit the Participant's Elective Contributions
for the taxable year first occurring after the date of the
Hardship Distribution to the applicable limit as then in effect
pursuant to Code Section 402(g) for such taxable year, less the
Participant's total Elective Contributions for the taxable year
in which the Hardship Distribution occurred.
7.3 In-Service Withdrawal. Any Participant who has attained age
---------------------
fifty-nine and one-half (59-1/2) and is an Employee may request withdrawal of
all or a portion of the balance of his Individual Account save and except any
and all amounts thereof attributable to Voluntary Contributions, Matching
Contributions or Non-Elective Contributions. Payment of such amount may be in
any form provided for pursuant to Section 6.8.
7.4 Loans. Loans shall be made available only to Participants who
-----
are Employees on a reasonable and equivalent basis. The application and the
resulting loan must comply with the procedures then established by the Plan
Administrator and meet the terms and conditions specified in the following
provisions:
(a) Each application for a Plan loan must include a
Qualified Consent submitted to the Plan Administrator within ninety (90)
days before the date the loan is secured by any or all of the balance
credited to Participant's individual account.
(b) The amount of any such loan made pursuant to this
Section shall be limited to fifty percent (50%) of the amount the
Participant would be entitled to from his Individual Account as of the
date of the making of such loan reduced by any outstanding loan balances
as of the date of such loan application.
(c) Effective July 1, 1991, no more than two (2) Plan loans
may be granted in any Plan Year.
(d) No loan shall be granted for less than the amount
established from time to time by the Plan Administrator and
communicated to the Participants.
(e) The maximum amount of a loan when added to the
outstanding balance of all other loans made to the Participant from a
Qualified Plan sponsored by the Employer, shall not exceed the lesser of
(i) fifty thousand dollars ($50,000) reduced by the excess of the
highest outstanding Plan loan balance during the twelve-consecutive
month period prior to the day before the new loan is made; or (ii) fifty
percent (50%) of the balance of such Participant's Individual Account.
(f) Loan proceeds shall be proportionately obtained from
each Investment Fund in which the Participant has a balance on the day
proceeds are paid.
21
<PAGE>
(g) Any loan made pursuant to this Section must be repaid
within a period not to exceed five (5) years.
(h) Interest on any loan hereunder shall be based on a
reasonable rate of interest to be determined by the Plan Administrator
at the time the loan is made, which amount shall not exceed the maximum
rate allowable under applicable state law.
(i) Any such loan shall be evidenced by a promissory note
and such note shall be held by the Trustee as an asset of the Trust
allocated specifically to the Individual Account of the Participant to
whom the loan is granted. Any loan shall be collateralized with the
Participant's Individual Account to the extent the balance of such
Account equals the outstanding balance on the loan.
(j) The method of timing for repayment of any loan
hereunder shall be determined at the time any such loan is made.
Repayment of any loan shall normally be by payroll deduction. In the
event a Participant terminates his employment prior to the time the loan
is repaid in full, the balance of such loan shall be accelerated and
then becomes immediately due and payable.
(k) For purposes of this Section, Participants who take a
leave of absence before their loan is paid-in-full must continue to
elect to repay the loan in accordance with the terms of the governing
promissory note in any manner or method deemed acceptable by the Plan
Administrator.
(l) Any Participant with an outstanding loan who, in order
to avoid foreclosure on such loan, may request to the Plan Administrator
that the original payment schedule of the promissory note governing such
loan be amended. Such Participant must enter into an amendment of the
original promissory note, provided that such amendment shall not extend
the repayment of principal and interest beyond the maturity date of the
original promissory note or require equal installment payments less
frequently than quarterly. A loan shall be deemed to be in default as of
the last day of any Plan Year if as of the October 15 of such Plan Year
a Participant is in arrears on the loan's repayments, and if agreed to
by the Plan Administrator, such Participant was subsequently provided
with an opportunity to cure such delinquency but has failed to so cure
on or before the December 15 of the same Plan Year.
(m) All repayments representing interest shall be
considered as investment income of the Trust applicable to the
Participant and credited to such Investment Funds in the same proportion
as such Participant's contributions are allocated pursuant to the
Participant's directions.
(n) All payments by a Participant representing principal
shall be credited against the outstanding balance of the loan and
debited to any Investment Fund as may be chosen by the Participant with
respect to his Individual Account.
(o) In granting or refusing any request for a loan
hereunder, the Plan Administrator shall apply uniform standards
consistently and indiscriminately.
(p) Effective July 1, 1991, no more than four (4) loans may
be outstanding in accordance with this Section during any Plan Year.
(q) The Plan Administrator shall charge each Participant
who makes a loan pursuant to this Section a fee in such reasonable
amount as then determined by the Plan Administrator and communicated to
Participants.
7.5 Discretionary Withdrawal. Any Participant whose Individual
------------------------
Account is comprised of a QDRO Account or a Voluntary Contribution Account may,
at any time and in accordance with the policies and procedures then established
by the Plan Administrator, request a distribution of all, or a portion of, the
amounts credited to such QDRO Account and Voluntary Account. The Trustee shall
distribute such amounts as of the Valuation Date on or first occurring after
receiving the distribution authorization from the Plan Administrator.
22
<PAGE>
ARTICLE 8
FUNDING
-------
8.1 Trustee. The Company will enter into a Trust Agreement with the
-------
Trustee whereunder the Trustee will receive, invest and administer as a trust
fund all contributions made to the Plan in accordance with such Trust
Agreement. Such Trust Agreement is incorporated by reference as a part of the
Plan, and the rights of all persons hereunder are subject to the terms of the
Trust Agreement. The Trust Agreement specifically provides, among other
things, for the investment and reinvestment of the Trust and the income
thereof, the management of the Trust, the responsibilities and immunities of
the Trustee, removal of the Trustee and appointment of a successor, accounting
by the Trustee and the disbursement of the Trust. The Trustee will establish
and maintain the following ten (10) investment Funds for the purposes of the
investment elections stipulated in Sections 8.2 (Direction of Investment) and
8.3 (Change in Direction) hereof.
(a) Income Fund is a fixed income fund to be invested and
-----------
reinvested primarily in group annuity contracts issued by insurance
companies licensed to do business in the State of Texas and bank
investment contracts issued by banks licensed to do business in the
State of Texas and other investments which may be carried at book value.
(i) Restrictions on Changes. Effective May 1, 1991, every
Participant shall be prohibited from electing any change in
direction of existing contributions which will result in the
transfer of any assets out of the Income Fund directly into the
Vanguard Money Market Reserves - Prime Portfolio Fund. A
Participant who desires to transfer assets from the Income Fund
into the Vanguard Money Market Reserves - Prime Portfolio Fund,
must first transfer such assets into the GME Fund, the Vanguard
Wellington Fund, the Vanguard Quantitative Portfolios Fund, the
Vanguard U.S. Growth Portfolio, or the Vanguard International
Growth Portfolio, and such transferred assets must remain
therein for not less than ninety (90) days before having such
assets transferred into Vanguard Money Market Reserves - Prime
Portfolio Fund. Participants are limited to transferring assets
out of the Fixed Deposit Fund and into Vanguard Money Market
Reserves - Prime Portfolio Fund to a maximum of four (4) times
during any single Plan Year.
(ii) Executive Life Insurance Company. Effective April 1,
--------------------------------
1991, any portion of a Participant's account balance invested in
the Income Fund 2 which is comprised of amounts invested in the
group annuity contract issued by the Executive Life Insurance
Company shall not be available for distribution or withdrawal,
nor shall any future contributions participate in such group
annuity contract.
(b) EDS Stock Fund shall be invested in Employer Stock, and
--------------
it is specifically provided that up to ninety-nine percent (99%) of the
assets of the EDS Stock Fund may be invested in Employer Stock unless
the Trustee or the independent fiduciary if appointed and then acting
determine that the acquisition or holding of Employer Stock would
possibly result in the imposition of an excise tax under the Code or
result in a violation of Sections 406 or 407 of ERISA. If such a
determination is made or the Trustee or Independent Fiduciary if
appointed and then acting, determines that a sale of any or all of the
Employer Stock is in the best interest of the Plan Participants, the
Trustee or such independent fiduciary may sell any or all of the
Employer Stock in the Trust. Any proceeds received by the Trustee upon
the disposition of Employer Stock will Individual Accounts be
immediately invested in the Vanguard Money Market Reserves - Prime
Portfolio then existing, or established on behalf of, the respective
Participants whose Individual Account included in Employer Stock in the
EDS Stock Fund.
(c) MCorp Stock Fund, which was effective as of December
----------------
30, 1988, is a fund invested in the common stock of MCorp. Amounts
invested in the MCorp Stock Fund consist solely of amounts transferred
to the Plan from the MCorp Stock Fund of the MTech Plan. No further
investments may be made in the
23
<PAGE>
MCorp Stock Fund including transfers from any other Investment Fund of
the Plan. In addition, amounts held in the MCorp Stock Fund are not
available for withdrawals, transfers or loans, and are only available
for in-kind distributions as otherwise provided under the Plan.
(d) Vanguard Money Market Reserves -Prime Portfolio
-----------------------------------------------
effective May 1, 1991, is a fund invested in high quality money market
instruments which mature in one year or less. These include negotiable
certificates of deposit, bankers' acceptances, commercial paper, and
other short-term corporate obligations.
(e) Vanguard Wellington Fund effective May 1, 1991, is a
------------------------
fund invested in bonds and common stocks of domestic companies.
(f) Vanguard Quantitative Portfolios effective May 1, 1991,
--------------------------------
contains a diversified portfolio of stock that in the aggregate, have
characteristics similar to the Standard & Poor's 500 Composite Stock
Price Index.
(g) Vanguard U.S. Growth Portfolio effective May 1, 1991,
------------------------------
is a fund invested in the common stock of companies in the United States
of America.
(h) Vanguard International Growth Portfolio effective May
---------------------------------------
1, 1991, is a fund invested in securities of companies located outside
of the United States of America.
(i) Vanguard Bond Index - Total Bond Market Portfolio
-------------------------------------------------
effective March 28, 1995, is a fund invested in government, corporate
and mortgage backed securities with characteristics similar to the
Lehman Brothers Aggregate Bond Index, a widely recognized measure of the
aggregate United States of America bond market.
(j) Vanguard Explorer Fund effective March 28, 1995, is a
----------------------
fund invested in common stocks of small and emerging growth companies.
8.2 Direction of Investments. This Plan intends to comply with
------------------------
ERISA Section 404(c) and provides each Participant with the absolute and
unrestricted right to direct the investment of the entire amount allocated to
their Individual Accounts into or among any available investment funds.
Investment fund elections and changes in the allocation of contributions shall
be made in accordance with the policies and procedures then established by the
Plan Administrator and communicated to Participants who are Employees. The Plan
Administrator shall, as soon as practicable, forward appropriate directions to
change an allocation of Contribution received from a Participant to the Trustee
for execution, and the Trustee shall carry out such directions as expeditiously
as practicable. In the absence of a notification by a Participant to the Plan
Administrator concerning the direction of contributions, the Plan Administrator
shall assume the Participant elected that the total amount of contributions
being allocated to such Participant's Individual Account be invested in the
Vanguard Money Market Reserves Prime Portfolio.
8.3 Change in Direction. Any Participant shall change investment
-------------------
option elections concerning the investment of either existing Individual Account
balances or future contributions into investment funds as follows:
(a) Future Contributions. Effective May 1, 1991, each
--------------------
Participant shall have the right to request to the Plan Administrator to
change his investment option election concerning the investment fund in
which his future Elective Contributions or Rollover Contributions are to
be invested in accordance with this Section 8.2 (Direction of
Investments). Such changes in investment options shall be made, and
shall be effective, in accordance with the then governing policies and
provisions established by the Plan Administrator and communicated in
writing to the Participants who are Employees.
(b) Individual Account Balances. Effective July 1, 1991,
---------------------------
each Participant shall have the right to request to the Plan
Administrator to change his investment option election concerning the
investment fund in which his Individual Account balances are to be
liquidated and reinvested in accordance with a different investment mix
as directed by the Participant and in accordance with Section 8.2
(Direction of Investments).
24
<PAGE>
Such changes shall be made, and shall be effective, in accordance with
the then governing policies and procedures established by the Plan
Administrator and communicated in writing to the Participants.
ARTICLE 9
FIDUCIARIES
-----------
9.1 General. Each Fiduciary who is allocated specific duties or
-------
responsibilities under the Plan or Trust Agreement or any Fiduciary who assumes
such a position with the Plan shall discharge his duties solely in the interest
of the Participants and their Beneficiaries and for the exclusive purpose of
providing such benefits as stipulated herein to such Participants and their
Beneficiaries, and defraying expenses of administering the Plan. Each
Fiduciary in carrying out such duties and responsibilities shall act with the
care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in exercising such authority or duties.
9.2 Appointment of the Administration Committee. The administration
-------------------------------------------
of the Plan will be in the charge of the Administration Committee consisting of
more than one (1) member, each of whom shall be an Employee or director of the
Company and each of whom shall be appointed by the Compensation and Benefits
Committee. The Administration Committee is the named Plan Administrator
hereunder. Each member of the Administration Committee shall serve until such
member's successor shall be appointed. A member may serve for more than one (1)
term. The Compensation and Benefits Committee shall appoint one (1) of the
Administration Committee members as Chairperson and one (1) member as Vice-
Chairperson, may remove a member of the Administration Committee with or without
cause, and may appoint a secretary or such other officers as it deems necessary
and appropriate, and it may fill vacancies in the Administration Committee,
however caused. A member of the Administration Committee may resign by delivery
of such member's written resignation to the Compensation and Benefits Committee
and other members of the Administration Committee, and such resignation shall be
effective at the earlier of its acceptance by the Administration Committee or
upon the appointment of a successor.
9.3 Appointment of the Investment Committee. The Compensation and
---------------------------------------
Benefits Committee shall appoint an Investment Committee consisting of more than
one (1) member, each of whom shall be an Employee or director of the Company.
Each member of the Investment Committee shall serve until such member's
successor shall be appointed. A member may serve for more than one (1) term. The
Compensation and Benefits Committee shall appoint one (1) of the Investment
Committee members as Chairman and one (1) other member as Vice-Chairman, may
remove a member of the Investment Committee with or without cause, may appoint a
secretary or such other officers as it deems necessary and appropriate, and it
may fill vacancies in the Investment Committee, however caused. A member of the
Investment Committee may resign by delivery of such member's written resignation
to the Compensation and Benefits Committee and other members of the Investment
Committee, and such resignation shall be effective upon the appointment of a
successor. The Investment Committee shall establish a formal, written investment
and funding policy and shall have the discretionary authority to manage,
directly or indirectly, all investment of Plan assets. The Investment Committee
shall have the authority to appoint an Investment Manager or Managers to manage,
acquire and to dispose of any or all of the assets of the Plan. Further, the
Investment Committee shall have the authority to appoint one or more Account
Managers to oversee and direct the Trustee as to the investment of assets of the
Plan not managed by Investment Managers. The Investment Committee will appoint
the Trustee in accordance with the provisions hereof. The Investment Committee
will identify appropriate investment objectives, and will, subject to the right
of each Participant to direct the investment of amounts allocated to his
Individual Account, as implemented by the Plan Administrator, determine the
proper apportionment of Plan assets among the various investment vehicles, and
include said items in the investment policy of the Plan. The Investment
Committee will monitor and compare to others, or cause to be monitored and
compared to others, the investments and investment performance of the Trustee,
Investment Managers, and Account Managers, and shall make such reports and give
such recommendations to the Compensation and Benefits Committee as it may
request from time to time with respect thereto.
9.4 Compensation and Expenses. The members of the Investment and
-------------------------
Administration Committees shall serve without compensation for their services,
but their reasonable and necessary expenses may be paid by the Trustee,
25
<PAGE>
to the extent that they are not paid by an Employer. When, in its discretion,
the Administration Committee, the Investment Committee or any Employer deems it
advisable, it shall be authorized to have the records of the Administration
Committee, the Investment Committee and the Trustee audited by an independent
auditor, and reasonable and necessary expenses thereby incurred shall be paid as
provided in Section 14.2 (Administration Expenses) hereof.
9.5 Secretary and Administrative Personnel of the Committees. The
--------------------------------------------------------
Administration and Investment Committees may appoint a Secretary who may, but
need not, be a member of such Committees, and such Committees may employ agents
and such professional, clerical and other administrative personnel as may
reasonably be required for the purpose of fulfilling their duties hereunder.
Such administrative personnel shall carry out the duties and responsibilities
assigned to them by the appropriate Committee, as applicable. Expenses
necessarily incurred for such purpose shall be paid as provided in Section 14.2
(Administration Expenses) hereof.
9.6 Duties and Authority of Administrative Personnel.
------------------------------------------------
Administrative personnel appointed pursuant to Section 9.5 (Secretary and
Administrative Personnel of the Committees) hereof shall be responsible for such
matters as the Administration Committee or the Investment Committee, as
applicable, shall delegate to them by written instrument, including, but not
limited to, communication to Employees at the direction of the Administration
Committee, reports to the Administration Committee involving questions of
eligibility or earnings, assisting Participants and Beneficiaries in the
completion of forms prescribed by the Administration Committee, and maintenance
of records concerning former Participants and Beneficiaries. No administrative
personnel may make any decision as to Plan policy, interpretations, practices or
procedures unless the authority to make such decision has been delegated to them
in writing by the Administration Committee or the Investment Committee, as
applicable, and they accept their fiduciary responsibilities in accordance with
the provisions of this Section. All administrative personnel shall, except as
provided in the next preceding sentence, perform their allocated function within
the policies, interpretations, rules, practices and procedures established by
the Administration Committee or the Investment Committee, as applicable.
Administrative personnel shall coordinate matters related to the Plan with the
appropriate department of each Employer as the Administration Committee or the
Investment Committee, as applicable, directs.
9.7 Action by the Administration Committee or Investment Committee:
--------------------------------------------------------------
(a) A majority Committee shall constitute a quorum for the
transaction of business, and shall have full power to act hereunder.
Action by the Administration Committee or Investment Committee shall be
official if approved by a vote of a majority of the members present at
any official meeting. Except as otherwise required by an applicable plan
or the law. The Administration Committee or Investment Committee may,
without a meeting, authorize or approve any action by written resolution
or instrument signed by a majority of all of the members. Any written
resolution or instrument signed by the majority of all members of the
Administration Committee or Investment Committee shall have the same
force and effect as a formal resolution adopted in open meeting. Any
written memorandum or other writing signed by a member of the
Administration Committee or Investment Committee or such other person
duly authorized to act with respect to the subject matter of the writing
shall have full force and effect as if it were a formal resolution
signed by a majority of the committee members.
(b) A member of the Administration Committee or Investment
Committee may not vote or decide upon any matter relating solely to such
member or vote in any case in which such member's individual right or
claim to any benefit under the Plan is particularly involved. If, in any
case in which a committee member is so disqualified to act, the
remaining members then present cannot, by majority vote, act or decide,
the Administration Committee or Investment Committee will request that
the Compensation and Benefits Committee appoint a temporary substitute
member to exercise all the powers of the disqualified member concerning
the matter in which such member is disqualified.
(c) The Administration Committee or Investment Committee
shall maintain minutes of its meetings and written records of its
actions. Members may participate and hold a meeting of the
Administration Committee or Investment Committee by means of conference
telephone or similar communications equipment
26
<PAGE>
by means of which all persons participating in the meeting can hear each
other. Participation in such a meeting constitutes presence in person at
such meetings.
(d) The Administration Committee or Investment Committee
shall meet as scheduled by the appropriate chairperson but not less
frequently than once annually.
(e) The Administration Committee or Investment Committee
may, at its discretion, invite independent consultants, advisors, their
agents, members of management, or other persons as the Administration
Committee or Investment Committee shall deem necessary or appropriate.
(f) The chairperson of the Administration Committee or
Investment Committee will periodically report the committee's findings
and conclusions to the Compensation and Benefits Committee.
(g) Members of the Administration Committee or the
Investment Committee appointed by the Board of Directors shall continue
to serve in such capacity until such time as such member's successor is
appointed and qualified by the Compensation and Benefits Committee.
9.8 Duties and Authority of the Administration Committee. The
----------------------------------------------------
Administration Committee is authorized to take such action as may be necessary
to carry out the provisions and purposes of the Plan and shall have the
authority to control and manage the operation and administration of the Plan.
In order to effectuate the purposes of the Plan, the Administration Committee
shall have the power to construe and interpret the Plan, to supply any
omissions therein, to reconcile and correct any errors or inconsistencies, to
decide any questions in the administration and application of the Plan, and to
make equitable adjustments for any mistakes or errors made in the
administration of the Plan; and all such actions or determinations made by the
Administration Committee, and the application of rules and regulations to a
particular case or issue by the Administration Committee, in good faith, shall
be final, binding and conclusive on all persons ever interested hereunder,
subject, however, to review by the Compensation and Benefits Committee. The
Administration Committee shall exercise such authority and responsibility as it
deems appropriate to comply with the provisions of federal law and governmental
regulations issued thereunder and to carry out any other duties delegated to
the Administration Committee in writing by the Compensation and Benefits
Committee. The Administration Committee shall establish a written procedure to
determine the qualified status of any domestic relations orders submitted to it
for review and qualifications as a Qualified Domestic Relations Order pursuant
to Code Section 414(p) and ERISA Section 206. To comply with every order so
determined to be Qualified Domestic Relations Order, the Administration
Committee shall establish and maintain records reflecting the interest or
interests of any person or persons for whose benefit amounts are held hereunder
pursuant to a Qualified Domestic Relations Order. The Administration Committee
shall be the designated agent for service of legal process.
9.9 Claims Procedure and Other Rules and Treasury Regulations of
------------------------------------------------------------
the Plan Administrator. The Administration Committee shall from time to time
- ----------------------
revise, rules and regulations for Plan, including the authority to establish,
maintain, and communicate to the Employees a reasonable claims procedure, in
accordance with law. Such claims procedure shall provide the manner in which
written claims for benefits shall be made, written notice of disposition of a
claim shall be made, and written application for appeal of the denial of a claim
shall be made. Failure of a Participant to file a claim will not result in a
forfeiture of any interest in the Participant's Individual Account.
(a) In the event a claim is denied, the reasons for the
denial will be specifically set forth in writing, pertinent provisions
of the Plan will be cited, and explanation as to how the claimant can
perfect the claim will be provided, where appropriate, and an
explanation of the claim review procedure will be provided. Any
Participant, Beneficiary, Alternate Payee or personal representative
whose claim for benefits has been denied shall be entitled to appeal
such denial of his claim on a form supplied by the Plan Administrator,
and in addition may request a hearing. In connection with his appeal,
such person may review pertinent documents. Such form, together with a
written statement of the claimant's position, shall be filed with the
Plan Administrator no later than ninety (90) days after receipt of the
written notice denying the claim.
27
<PAGE>
(b) The Plan Administrator will, if a hearing is requested,
schedule an opportunity for a full and fair hearing of the issues within
sixty (60) days after receipt of such request. Its decision will be made
within thirty (30) days after such hearing and will be communicated in
writing to the claimant. If no hearing is requested, the Plan
Administrator will, within sixty (60) days after receipt of such
request, review such appeal and communicate its decision to the claimant
in writing. If no hearing is requested for an appeal, then the Plan
Administrator may extend its deadline to communicate its decision of an
appeal of up to sixty (60) days due to special circumstances, provided
the delay and the special circumstances are communicated to the claimant
within the initial sixty (60) day response period.
9.10 Named Fiduciaries and Allocation of Responsibility. ERISA
--------------------------------------------------
requires that certain persons, who are deemed to be "fiduciaries", as defined in
Section 3(21)(A) of ERISA, be designated as "Named Fiduciaries" in the Plan. The
Board, the Company, the Employer, the Trustee, the Plan Committee, the
Investment Committee, and the Administration Committee are hereby designated
Named Fiduciaries. A Participant shall be Named Fiduciary to the extent such
Participant directs the investment of any portion of Individual Account and as
otherwise provided in the Plan and as set forth in, and limited by, the Trust
Agreement. Each Named Fiduciary shall have only the powers, duties and
responsibilities specifically allocated to such Fiduciary pursuant to the terms
of this Plan. The Board shall not have any power or fiduciary responsibility
hereunder other than the power to name the persons who shall comprise the Plan
Committee and continuing the allocation of fiduciary responsibilities to those
persons. Each Named Fiduciary may, by written instrument, allocate some or all
of such Name Fiduciary's responsibilities to another fiduciary or designate
another person to carry out some or all of such Named Fiduciary's fiduciary
responsibilities. The Investment Committee, the Administration Committee, and
each other Fiduciary to whom responsibilities are allocated by a Named Fiduciary
will be furnished a copy of the Plan and their acceptance of such responsibility
will be made by agreeing in writing to act in the capacity designated. No Named
Fiduciary shall be liable for an act or omission of any person who is allocated
a fiduciary responsibility or who is designated to carry out such responsibility
in carrying out a fiduciary responsibility except to the extent that the Named
Fiduciary did not act in accordance with the standard contained in subsection
9.11(b) hereof with respect to the allocation, designation or continuation
thereof, or implementation or establishment of the allocation or designation
procedures. Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
9.11 Action by Fiduciaries.
---------------------
(a) Any action herein permitted or required to be taken by
an Employer shall be by resolution of its board of directors or by
written instrument signed by a person or group of persons who has been
authorized by resolution of such board of directors as having authority
to take such action. Any action herein permitted or required to be taken
by the Investment Committee or Administration Committee shall be in the
manner specified in Section 9.07 (Action by the Administration or
Investment Committee) hereof.
(b) Each Fiduciary with respect to the Plan shall perform
all of such Fiduciary's duties and responsibilities and exercise such
Fiduciary's power hereunder with the due care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent man
acting in like capacity and fully familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims,
and no Fiduciary shall be liable for any act or failure to act on such
Fiduciary's part which conforms to that standard, unless such Fiduciary
knowingly participates in or knowingly undertakes to conceal an act or
omission of another Fiduciary, with the knowledge that such act or
omission is a breach of fiduciary responsibility, or knowing of a breach
of fiduciary responsibility, such Fiduciary fails to make reasonable
efforts under the circumstances to remedy the breach, or failing to
carry out such Fiduciary's specific responsibilities, in accordance with
such standard, such Fiduciary has enabled another Fiduciary to commit a
breach.
(c) Each Fiduciary shall furnish or cause to be furnished
to each other Fiduciary all information needed for the proper
performance of such Fiduciary's duties. Each Fiduciary warrants that any
directions given, information furnished or action taken by such
Fiduciary shall be in accordance with the provisions of the Plan or the
Trust Agreement, as the case may be, authorizing or providing for such
direction, information or action.
28
<PAGE>
(d) Although the Investment Committee shall have an
overall responsibility to diversify the investments of the Plan so as to
minimize the risk of large losses, unless under the circumstances it is
clearly prudent not to do so, the diversification requirement and the
prudence requirement, to the extent that it requires diversification,
shall not be violated by the acquisition or holding of qualifying
Employer securities or qualifying Employer real property as defined in
Section 406(d) of ERISA.
9.12 Employment of Advisers. A Named Fiduciary may appoint such
----------------------
accountants, counsel, and any other advisers as such Named Fiduciary deems
necessary or desirable in connection with the administration and operation of
the Plan. A Named Fiduciary shall be entitled to rely, in accordance with the
standard contained in subsection 9.11(b) hereof, upon, and shall not be liable
for any act or failure to act on such Named Fiduciary's part in such reliance
or in reliance, in accordance with such standard, on any opinion or reports,
which shall be furnished to such Named Fiduciary by any such accountant with
respect to accounting matters, counsel with respect to legal matters, or
investment advisers with respect to investment matters.
9.13 Bond. It shall be the responsibility of the Plan
----
Administrator to obtain the appropriate Fiduciary bonds as required by federal
law or regulation. Except as required by the Company or by state or federal
statute, irrespective of this provision, no bond or other security shall be
required of any Fiduciary.
9.14 Indemnity. The Company shall indemnify each member of the
---------
Board, the Plan Committee, the Investment Committee, and the Administration
Committee, each Account Manager and each individual who is an employee of the
Company and who is allocated fiduciary responsibility hereunder, against any and
all claims, loss, damages, expenses, including counsel fees to the extent
approved by the Board or otherwise provided by law, and liability, including any
amounts paid in settlement, with the approval of such Board, arising from any
action or failure to act, except when the same is judicially determined to be
due to the fraud, recklessness, or willful or intentional misconduct of such
member.
9.15 Missing Persons. The Plan Administrator shall make a reasonable
---------------
effort to locate all persons entitled to benefits under the Plan. The Trustee
shall send a certified letter to all such persons at their last known address
advising them of their interest or benefits under the Plan. Any such amounts
shall be held by the Trustee for a period of at least one (1) additional year
for a total of at least two (2) years from the time the benefits first become
payable. If no distributee can be found, then any unclaimed benefits may be
used to defray administrative and operational expenses of the Plan. Should any
person otherwise entitled to a benefit which was subject to this section make a
claim for such forfeited benefit which is approved by the Plan Administrator,
such benefit shall be reinstated in such manner as the Plan Administrator
determines to be equitable and in accordance with law.
9.16 Voting Employer Stock. In the event Employer Stock allocated
---------------------
to a Participant's Individual Account is a security which is required to be
registered under Section 12 of the Securities Exchange Act of 1934 or one that
would be required to be registered except for an exemption from registration
provided by Section 12(g)(2)(H) of said 1934 Act, then each Participant shall be
permitted to direct the voting of the Employer Stock allocated to his Individual
Account. Each Participant who has Employer Stock allocated to his Individual
Account is hereby designated a Named Fiduciary for the purpose of exercising the
rights and responsibilities relating to Employer Stock under this Section 9.16.
(a) In the event the Employer Stock does not meet the
requirements of the above paragraph, Participants shall nonetheless
direct the voting of such allocated Employer Stock if, after acquiring
such Employer Stock, more than ten percent (10%) of the total assets of
the Plan are in Employer Stock. However, the pass through of voting on
such non-registration type securities shall be limited to voting only on
those issues which, by law or charter, must be decided by more than a
majority vote of outstanding common shares voted.
(b) Any shares of Employer Stock in which the Participant
does not have the right to direct the voting or for which the
Participant does not direct the voting shall be voted by the Trustee or
an independent Fiduciary, if appointed and then acting, as set forth
herein.
29
<PAGE>
(c) The Plan Administrator shall furnish to each
Participant who has directed the investment of all or any portion of his
Individual Account to Investment Fund 3, notice of the date and purpose
of each meeting of the stockholders of the Company or of General Motors
Corporation, as applicable, at which such Participant is entitled, in
accordance with the provisions of this Section, to vote Employer Stock
allocated to his Individual Account. The Trustee of Independent
Fiduciary, as applicable, shall request from each such Participant
instructions as to the voting at that meeting or, if applicable,
instructions as to the tendering, of applicable Employer Stock credited
to the Participant's Individual Account. Following notice to the Trustee
or Independent Fiduciary affected, the Plan Administrator may require
that the voting instructions be returned from the Participants directly
to the Trustee, Independent Fiduciary or an agent of either party. If
the Participant furnishes such instructions to the appropriate party, as
provided above, within the time specified in the notification, the
Trustee shall vote or tender such Employer Stock in accordance with the
Participant's instructions, as provided to the Trustee directly or by
the Independent Fiduciary or agent.
(d) All applicable Employer Stock credited to the
Individual Accounts of Participants with respect to which the Trustee
does not receive voting instructions as specified above, and all
unallocated applicable held by the Trustee, shall be voted by the
Trustee proportionately in the same manner as it votes Employer Stock
with respect to which it has received Participants' voting instructions,
unless an Independent Fiduciary has been appointed for such purpose, in
which case the Trustee shall vote all such undirected and unallocated
Employer Stock as directed by the Independent Fiduciary.
(e) The Plan Administrator shall furnish to each
Participant who has applicable Employer Stock credited to his Individual
Account notice of any tender offer for, or a request or invitation for
tenders of Employer Stock made to the Trustee with respect to which the
Participant is entitled, in accordance with the provisions of this
Section, to vote such applicable Employer Stock, or any other matter
requiring action of the shareholders of the Company or of General Motors
Corporation, as applicable, with respect to which the Participant is
entitled, in accordance with the provisions of this Section, to vote
Employer Stock.
(f) The Plan Administrator shall request from each such
Participant instructions as to the tendering of applicable Employer
Stock credited to the Participant's Individual Account, and for this
purpose the Plan Administrator shall provide Participants with a
reasonable period of time in which to consider any such tender offer
for, or request or invitation for tenders of, applicable Employer Stock
made to the Trustee, or any other matter requiring action of the
shareholders of the Company or of General Motors Corporation, as
applicable. The Trustee shall tender such Employer Stock as to which
Trustee has received instructions to tender from Participants within the
time required by the terms of any such offer.
(g) Employer Stock credited to the Individual Accounts of
Participants with respect to which the Trustee has not received
instructions shall not be tendered. As to all applicable unallocated
Employer Stock held by the Trustee, the Trustee shall tender such shares
in its own discretion or as directed by the Independent Fiduciary if one
has been appointed for such purpose.
(h) The Plan Administrator shall provide the Trustee with
written information regarding proxy voting, tender offers and any other
applicable corporate action, and in carrying out its responsibilities
under this provision, the Trustee may conclusively rely upon information
furnished to it in writing by the Plan Administrator, including, but not
limited to, the names and current addresses of Participants, the number
of shares of Employer Stock credited to the Individual Accounts of
Participants, and the number of shares of Employer Stock held by the
Trustee that have not yet been allocated. Applicable Employer Stock
shall be that Employer Stock entitled to vote at a particular meeting of
the stockholders of the Company or of General Motors Corporation, as
applicable, or with respect to which a request or invitation to tender
or notice of any other matter requiring action of the shareholders of
the Company or of General Motors Corporation, as applicable, has been
received.
(i) Notwithstanding any of the foregoing provisions of this
Section, no provision hereof shall prevent the Trustee from taking any
action relating to its duties and authority under this Section, if the
Trustee
30
<PAGE>
determines in its sole discretion that such action is necessary in order
for the Trustee to fulfill its fiduciary responsibilities hereunder.
ARTICLE 10
AMENDMENT AND TERMINATION
-------------------------
10.1 Amendment of Plan. The Company shall have the right at any
-----------------
time by action of the Board to modify, alter or amend the Plan in whole or in
part; provided, however, that the duties, power and liability of the Trustee
hereunder shall not be increased without its written consent; and provided,
further, that the amount which at the time of any such modification, alteration
or amendment shall appear as a credit in the Individual Account of any
Participant in the Plan, shall not be adversely affected thereby; and provided,
further, that no such amendment shall have the effect of revesting in the
Employer any part of the principal or income of the Trust.
10.2 Termination of Plan. The Company expects to continue the Plan
-------------------
indefinitely, but continuance is not assumed as a contractual obligation. The
Company and each Employer reserves the right at any time by action of its board
of directors to terminate the Plan as applicable to itself.
(a) If an Employer terminates or partially terminates the
Plan or discontinues its Contributions at any time, each Participant
affected thereby shall then be vested for the balance in his Individual
Account.
(b) In the event of termination of the Plan by an Employer,
the Plan Administrator shall value the Trust as of the date of
termination. That portion of the Trust applicable to any Employer for
which the Plan has not been terminated shall be unaffected. The
Individual Accounts affected by the termination, as determined by the
Plan Administrator, shall continue to be administered as a part of the
Trust or distributed to such Participants, Beneficiaries or Alternate
Payees, pursuant to Section 6.9 (Distribution of Benefits).
ARTICLE 11
PROVISIONS RELATIVE TO EMPLOYERS INCLUDED IN PLAN
-------------------------------------------------
11.1 Method of Participation. Any employer, whether foreign or
-----------------------
domestic, which is a member of the Controlled Group, with the approval of the
Board, by the taking of the appropriate action by its board of directors, may
become an Employer by adopting the Plan. Any Employer which becomes a party to
the Plan shall thereafter promptly deliver to the Trustee a certified copy of
the resolutions or other documents evidencing its adoption of the Plan and Trust
and also a written instrument showing the Board's approval of such corporation's
becoming a party to the Plan. The Plan shall be maintained as a single Plan for
all participating Employers.
11.2 Withdrawal. Any Employers participating in the Plan may
----------
withdraw from the Plan at any time by giving six (6) months advance notice in
writing of its intention to withdraw to the Board and the Plan Administrator. A
shorter notice period may be allowable if agreed to by the Board. The procedure
for withdrawal by a participating Employer is set forth as follows:
(a) Upon receipt of notice of any such withdrawal, the Plan
Administrator shall determine and certify to the Trustee the equitable
shares of such withdrawing Employer in the Trust, as applicable.
(b) The Trustee shall thereupon set aside from the Trust
then held by it such securities and other property as it shall, in its
sole discretion, deem to be equal in value to such equitable share. If
the Plan is to be terminated with respect to such Employer, the amount
set aside shall be dealt with in accordance with the provisions of
Section 10.2 (Termination of Plan). If the Plan is not to be terminated
with respect to such Employer, the Trustee shall turn over such amount
to such trustee as may be designated by such withdrawing Employer, and
such securities and other property shall thereafter be held and invested
as a separate trust of the
31
<PAGE>
Employer which has so withdrawn, and shall be used and applied according
to the terms of a new agreement and declaration of trust between the
Employer so withdrawing and the trustee so designated.
(c) Neither the segregation of the Trust assets upon the
withdrawal of an Employer, nor the execution of a new agreement and
declaration of trust pursuant to any of the provisions of this Section
shall operate to permit any part of the corpus or income of the Trust to
be used for or diverted to purposes other than for the exclusive benefit
of Participants, and their Beneficiaries.
ARTICLE 12
TOP-HEAVY PROVISIONS
--------------------
12.1 Top-Heavy Provisions. Regardless of any contrary Plan
--------------------
provisions, if this Plan, when combined with all other plans, requires
aggregation pursuant to Code Section 416(b) and is deemed to be Top-Heavy as of
the last day of any preceding Plan Year ("Determination Date"), then the
------------------
following conditions shall become operative with respect to such Plan Year and
all future Plan Years.
12.2 Compensation Limitation. In the event the definition of Code
-----------------------
Section 415 Compensation as defined in Section 2.1(12) (Code Section 415
Compensation) is allowed to be greater than $200,000, such Code Section 415
Compensation shall be limited to $200,000 or such greater amount as shall be
determined by the Secretary of the Treasury pursuant to Code Section 416(d).
12.3 Minimum Allocations. In the event that the aggregate of all
-------------------
Elective Contributions to all Non-Key Employees allocated to their Individual
Account do not exceed three percent (3%) of Compensation, then the following
rules shall apply:
(a) The Employer shall contribute to the Plan out of
current or accumulated profits an amount necessary to provide a minimum
contribution of at least three percent (3%) of Compensation to such Non-
Key Employees (reduced as permitted by Code Section 416 or the Treasury
Regulations promulgated thereunder), made for such Non-Key Employees and
by contributions and forfeitures, if any, allocated to such Non-Key
Employees in any other defined contribution plan included with this Plan
in an aggregation group. In no event, however, shall the allocation of
Elective Contributions to Non-Key Employees be greater than the
allocation of Elective Contributions to the Individual Account for any
Key Employee. Any special contribution or reallocation as herein
provided shall be made to the Elective Account on the basis of the ratio
that the non-Key Employee's Compensation bears to the total Compensation
of all Non-Key Employees.
(b) In the event the Employer shall also maintain a defined
benefit plan and such defined benefit plan provides the minimum accrued
benefit determined pursuant to Code Section 416(c)(1), then the
adjustment provided in Section 12.3(a) above shall not be required.
(c) If Section 12.3(a) or (b) is applicable, then the
multiplier of 1.25 in Sections 5.9(a)(i) and 5.9(b)(i) shall be reduced
to 1.0 unless:
(i) all plans required to be aggregated and any other plans
which may be permissively aggregated pursuant to Code Section
416(g) are ninety percent (90%) or less Top-Heavy, and
(ii) the minimum accrued benefit referenced in Code Section
416 (c)(1) is modified by Code Section 416(h)(2)(A)(ii)(I) or
the minimum contribution is increased from three percent (3%) to
four percent (4%).
(d) With respect to the operation of these Top-Heavy
provisions, there shall be no requirement that the entire defined
benefit minimum benefit and the defined contribution minimum
contribution be provided. To the extent that there shall be a defined
benefit accrued benefit, it shall be controlling. To the
32
<PAGE>
extent that there shall be an Employer Contribution to a Defined
Contribution Plan, then there shall be a determination as to whether the
defined contribution is comparable to the difference between the defined
benefit minimum benefit and the minimum defined benefit accrued benefit
required pursuant to Code Section 416. In the event that the defined
contribution amount shall not be comparable, then the difference shall
be provided in the Defined Benefit Plan unless the next sentence shall
apply. Notwithstanding the above, if there shall be a contribution to
the Defined Contribution Plan of at least five percent (5%) of
compensation to Non-Key Employees, it shall be conclusively presumed
that the minimum benefit requirements of Top-Heavy Plans have been met.
(e) For purposes of determining whether a defined benefit
plan is Top-Heavy, calculations shall be based upon actuarial
assumptions stipulated in such Plan for this purpose. If no such
assumptions are provided, the calculation shall be based upon the 1984
Unisex Pension Mortality Tables at five percent (5%) interest with such
determination being made on the Valuation Date which occurs within the
Plan Year.
(f) For purposes of determining minimum contributions to a
Defined Contribution Plan and minimum accrued benefits to a Defined
Benefit Plan, compensation shall have the same meaning as it is used in
Code Section 415.
ARTICLE 13
QUALIFIED DOMESTIC RELATIONS ORDERS
-----------------------------------
13.1 Determination of Qualified Domestic Relations Orders. The Plan
----------------------------------------------------
Administrator shall establish a written procedure to determine the qualified
status of domestic relations orders and to comply with orders so determined to
be Qualified Domestic Relations Orders.
13.2 Accounting and Allocations. Upon receipt of a Qualified
--------------------------
Domestic Relations Order the Plan Administrator shall establish a separate
account which shall be the QDRO Account. Such account shall be invested in
Investment Fund 2 and shall share in Adjustments pursuant to Section 5.4
(Allocation of Adjustment) hereof in the same manner as Participant's Individual
Accounts.
13.3 Distribution. An Alternate Payee for whose account the QDRO
------------
Account is maintained shall be treated as a Beneficiary for all purposes under
the Plan and shall have no right to make withdrawals or loans from the Plan.
Notwithstanding any provision of Article 6 (Distributions) distribution shall be
made in accordance with the terms of the Qualified Domestic Relations Order.
ARTICLE 14
MISCELLANEOUS
-------------
14.1 Governing Law. The Plan shall be construed, regulated and
-------------
administered according to the laws of the State of Texas except in those areas
preempted by the laws of the United States of America.
14.2 Administration Expenses. The expenses of administering the
-----------------------
Trust and the Plan may be paid either by the Employer or from the Trust.
However, the Plan Administrator, in its sole discretion, may assess a reasonable
administration fee against those participants who have separated for reasons
other than retirement, death, Permanent and Total Disability, or transfer to
another Controlled Group Member, or Executive Life Balances.
14.3 Participant's Rights; Acquittance. No Participant in the Plan
---------------------------------
shall acquire any right to be retained in the Employer's employ by virtue of the
Plan, nor, upon his dismissal, or upon his voluntary termination of employment,
shall he have any right or interest in and to the Trust other than as
specifically provided herein. The Employer shall not be liable for the payment
of any benefit provided for herein; all benefits hereunder shall be payable only
from the Trust.
33
<PAGE>
14.4 Spendthrift Clause. To the extent permitted by law, none of the
------------------
benefits, payments, proceeds, or distributions under this Plan shall be subject
to the claim of any creditor of the Participant or Former Participant, or to
the claim of any creditor of any Beneficiary hereunder, or to any legal process
by any creditor of such Participant or of any such Beneficiary. Except for a
Qualified Domestic Relations Order a Participant shall not have any right to
alienate, commute, anticipate, or assign any of the benefits, payments,
proceeds or distributions under this Plan.
14.5 Merger, Consolidation or Transfer. In the event of the merger
---------------------------------
or consolidation of the Plan with another plan or transfer of assets or
liabilities from the Plan to another Qualified Plan, each Participant shall not,
as a result of such event, be entitled on the day following such merger,
consolidation or transfer under the termination of Plan provisions to a lesser
benefit than the benefit he was entitled to on the date prior to the merger,
consolidation or transfer if the Plan had then terminated.
14.6 Counterparts. The Plan and the Trust Agreement may be executed
------------
in any number of counterparts, each of which shall constitute but one and the
same instrument and may be sufficiently evidenced by any one counterpart.
ADOPTION OF THE PLAN
--------------------
Despite anything to the contrary herein, this Plan is created and
maintained under the condition that it is approved and qualified by the Service
under Section 401(a) of the Code and that the Trust hereunder is exempt under
Section 501(a) of the Internal Revenue Code, or under any comparable sections
of any future legislation which amends, supplements or supersedes such sections.
As evidence of its adoption of the Plan, Electronic Data Systems
Corporation has caused this instrument to be signed by its officers thereunder
duly authorized, and its corporate seal to be affixed hereto this _____________
________ day of ______________________, 1996.
ELECTRONIC DATA SYSTEMS CORPORATION
By:___________________________________
Title:________________________________
Date:_________________________________
34
<PAGE>
EXHIBIT 5(a)
June 7, 1996
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, TX 75024
Gentlemen:
As General Counsel of Electronic Data Systems Corporation ("EDS"), I
am familiar with the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-8 (Commission File No. 33-36443) being filed by EDS pursuant
to Rule 414 promulgated under the Securities Act of 1933, as amended (the
"Act"), with the Securities and Exchange Commission, relating to up to 8,000,000
shares (the "Shares") of common stock, par value $0.01 per share, of EDS of
which 769,704 Shares (the "Available Shares") are currently available for
issuance by EDS from time to time to the trustees of the Amended and Restated
EDS Deferred Compensation Plan (the "Plan") pursuant to the provisions of the
Plan.
In connection with the foregoing matters, I have examined originals,
or copies certified or otherwise identified to me, of corporate records of EDS
and other documents, records and instruments as a basis for this opinion.
Based on the foregoing, I am of the opinion that upon issuance and
sale of the Available Shares by EDS to the Plan trustee from time to time
pursuant to the provisions of the Plan for a consideration at least equal to the
par value of such Available Shares, the Available Shares will be validly issued,
fully paid and nonassessable.
The foregoing opinion is limited to the General Corporation Law of the
State of Delaware, and I express no opinion as to the laws of any other
jurisdiction.
I hereby consent to the filing of this opinion as Exhibit 5(a) to the
above-mentioned Post-Effective Amendment No. 1. In giving such consent, I do
not thereby admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours,
/s/ D. Gilbert Friedlander
--------------------------
D. Gilbert Friedlander
Vice President, Secretary and
General Counsel
<PAGE>
EXHIBIT 5(b)
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P. O. BOX 2508
CINCINNATI, OH 45201
Employer Identification Number:
Date: July 18, 1995 75-1093604
File Folder Number:
310041422
ELECTRONIC DATA SYSTEMS Person to Contact:
CORPORATION CATHERINE WAITE
5400 LEGACY DRIVE, H3-2C-84 Contact Telephone Number:
PLANO, TX 74024 (513) 684-3079
Plan Name:
EDS DEFERRED COMPENSATION PLAN
Plan Number: 010
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based
safe harbor described in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise specified
in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
<PAGE>
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
/s/ C. Ashley Bullard
---------------------
C. Ashley Bullard
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
<PAGE>
This determiantion is conditioned upon your adoption of the proposed
restated plan as submitted with your or your representative's letter dated June
27, 1995. The proposed plan should be adopted on or before the date prescribed
by the regulations under code section 401(b).
<PAGE>
EXHIBIT 23(A)
Independent Auditors' Consent
-----------------------------
The Board of Directors
Electronic Data Systems Corporation:
We consent to the incorporation by reference in the Post-Effective Amendment
No. 1 to the Registration Statement on Form S-8 (Commission No. 33-36443) of
Electronic Data Systems Corporation of our reports dated January 24, 1996, with
respect to the consolidated balance sheets of Electronic Data Systems
Corporation and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income and cash flows for each of the years in the
three-year period ended December 31, 1995, and the related consolidated
financial statement schedule, which reports appear in the Form 8-K of Electronic
Data Systems Corporation dated as of April 23, 1996.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Dallas, Texas
June 6, 1996
