<PAGE>
As filed with the Securities and Exchange Commission on December 9, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
USCS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-1727009
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2969 Prospect Park Drive
Rancho Cordova, CA 95670-6148
(916) 636-4500
(Address and telephone number
of principal executive offices)
USCS INTERNATIONAL, INC.
401(k) RETIREMENT PLAN
(Full Title of the Plan)
_____________________
MARY G. JORDAN, ESQ.
Vice President, General Counsel and Secretary
USCS International, Inc.
2969 Prospect Park Drive
Rancho Cordova, CA 95670-6184
(916) 636-4500
(Name, address and telephone number,
of agent for service)
______________________
Copies to:
GILLES S. ATTIA, ESQ.
Graham & James, LLP
400 Capitol Mall
Suite 2400
Sacramento, CA 95814-4411
(916)558-6700
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered (1) Registered Per Share Price Fee
- --------------------------------------------------------------------------------
Common
Stock, no
par value 500,000 shares (2) $18.75 (3) $9,375,000 (4) $2,765.63
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the 401(k) plan described herein.
(2) The amount of Common Stock registered hereby is an estimate of the sales
that will be made to participants for the next three years.
(3) The average of the high and low prices of the Registrant's Common Stock as
reported by the Nasdaq National Market for December 5, 1997.
(4) The aggregate offering price is calculated solely for the purpose of
determining the registration fee pursuant to Rule 457(h)(1) under the
Securities Act of 1933, as amended.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
have been or will be sent or given to participant employees as specified by Rule
428(b)(1) promulgated under the Securities Act of 1933 (the "Act"). These
document(s) and the documents incorporated by reference into this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(1) the Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) the Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997; and
(3) the Registrant's Current Report on Form 8-K dated August 20, 1997.
(4) the description of the Common Stock set forth in the Registrant's
Registration Statement on Form 8-A registering the Registrant's Common
Stock pursuant to Section 12(g) of the Securities Exchange Act of
1934, filed June 18, 1996.
All other documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain attorneys of Graham & James LLP, counsel to the Registrant, own an
aggregate of 5,595 shares of the Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the 1933 Act.
The Registrant's Second Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation") and Bylaws provide for expanded
indemnification of directors and officers of the Registrant and limit the
liability of directors of the Registrant. The Bylaws provide that the
Registrant shall indemnify each person who is or was an officer or director of
the Registrant, or was serving as an officer, director, employee or agent of any
other corporation, partnership, joint venture, trust or other enterprise at the
request of the Registrant, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Registrant, which approval shall not be unreasonably withheld)
actually and reasonably incurred by him or her in connection with any action,
suit or proceeding if he or she acted in good faith and in a manner he or she
believed to be in or not opposed to the best interests of the Registrant, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Such right to indemnification includes
the right to advancement of expenses incurred by such person prior to final
disposition of the proceeding, provided, that such person shall provide the
Registrant with an undertaking to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision that such person is not
entitled to be indemnified for such expenses. The Bylaws also provide that the
Registrant shall 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
right of the Registrant to procure a judgment in its favor by reason of the fact
that he or she is or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other business enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit, if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the interests of
the Registrant, except that no indemnification shall be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Registrant unless and only to the extent that the Delaware Court
of Chancery or such other court shall deem proper. No person shall be
indemnified by the Registrant for any expenses or amounts paid in settlement
with respect to any action to recover short-swing profits under Section 16(b) of
the Securities Exchange Act of 1934. The Certificate of Incorporation provides
that if the Delaware General Corporation Law is amended to further eliminate or
limit the personal liability of directors, then the liability of a director of
the Registrant shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended. The Registrant has also
entered into agreements to indemnify its officers and directors in addition to
the indemnification provided by the Registrant's Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE>
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by reference into
this Registration Statement pursuant to Item 601 of Regulation S-K:
Exhibit
No. Description
- --------- ---------------------------
4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant dated April 10, 1996.*
4.2 Shareholder Rights Agreement dated December 30, 1988 among the
Registrant, Westar Capital and Enterprise Partners.*
4.3 Stockholder Rights Plan between the Registrant and Chase/Mellon
Stockholder Services, LLC.*
4.4 Certificate of Designation of Rights, Preferences and Privileges of
Series A Preferred Stock.*
4.5 Bylaws of the Registrant. *
5.1 Opinion of Graham & James LLP as to the legality of the securities being
registered.*
23.1 Consent of Graham & James LLP (incorporated by reference to Exhibit 5.1
hereof).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see page II-6).
99.1 401(k) Retirement Plan.
_____________________
* Incorporated by reference to Registrant's Registration Statement on Form
S-1, Registration No. 333-3842, filed pursuant to Section 5 of the Securities
Act of 1933, as amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes 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
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement.
<PAGE>
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(b) The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, 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 to be the initial bona fide offering.
(c) The undersigned Registrant hereby undertakes 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.
(d) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the Delaware Corporation Law, the First
Amended and Restated Certificate of Incorporation of the registrant, the Bylaws
of Registrant and the indemnification agreements described above in Item 6,
Registrant has been advised that in the opinion of the Securities and Exchange
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 Registrant of expenses
incurred or paid by a director, officer or controlling person of Registrant 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, Registrant 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 of 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rancho Cordova, County of Sacramento, State of
California, on the 3rd day of December, 1997.
USCS INTERNATIONAL, INC.
/ James C. Castle/
-------------------
By: James C. Castle
Its: Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints James C. Castle and Douglas L.
Shurtleff, and each of them, his true and lawful attorneys-in-fact and agents,
each with full power of substitution, each with power to act alone, to sign and
execute on behalf of the undersigned any amendment or amendments to this
Registration Statement and to perform any acts necessary in order to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, and each of the undersigned does hereby
ratify and confirm all that said attorneys-in-fact and agents, or their or his
substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Dated: December 3, 1997 / James C. Castle /
-------------------
James C. Castle
Chief Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer)
Dated: December 3, 1997 / George L. Argyros, Sr./
-------------------------
George L. Argyros, Sr.
Director
Dated: December 3, 1997 / George M. Crandell, Jr./
--------------------------
George M. Crandell, Jr.
Director
Dated: December 3, 1997 / Charles D. Martin/
--------------------
Charles D. Martin
Director
Dated: December 3, 1997 / Michael F. Mcgrail/
---------------------
Michael F. McGrail
Director
Dated: December 3, 1997 / Larry W. Wangberg/
--------------------
Larry W. Wangberg
Director
<PAGE>
Dated: December 3, 1997 / Douglas L. Shurtleff/
-----------------------
Douglas L. Shurtleff
Senior Vice-President of Finance
and Chief Financial Officer
(Principal Financial Officer)
Dated: December 3, 1997 / Zaida A. Klein/
-----------------
Zaida A. Klein
Chief Accounting Officer and Controller
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Trustee
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on December 5, 1997.
USCS International, Inc.
401(k) Savings Plan and Trust Agreement
CG Trust Company, as Trustee
/ Maria A. Hagen /
------------------------------------
By: Maria A. Hagen
---------------------------------
Its: Vice President & Trust Officer
--------------------------------
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- --------- ---------------------------
4.1 Second Amended and Restated Certificate of Incorporation of the
Registrant dated April 10, 1996.*
4.2 Shareholder Rights Agreement dated December 30, 1988 among the
Registrant, Westar Capital and Enterprise Partners.*
4.3 Stockholder Rights Plan between the Registrant and Chase/Mellon
Stockholder Services, LLC.*
4.4 Certificate of Designation of Rights, Preferences and Privileges of
Series A Preferred Stock.*
4.5 Bylaws of the Registrant. *
5.1 Opinion of Graham & James LLP as to the legality of the securities being
registered.*
23.1 Consent of Graham & James LLP (incorporated by reference to Exhibit 5.1
hereof).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see page II-6).
99.1 401(k) Plan and Trust Agreement.
- ---------------------
* Incorporated by reference to Registrant's Registration Statement on Form
S-1, Registration No. 333-3842, filed pursuant to Section 5 of the Securities
Act of 1933, as amended.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 14, 1997, appearing on
page 21 of USCS International, Inc.'s Annual report on Form 10-K.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Sacramento, California
December 8, 1997
<PAGE>
Exhibit 99.1
USCS INTERNATIONAL, INC.
401 (k) RETIREMENT PLAN
AS AMENDED AND RESTATED AS OF JANUARY 1, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
SECTION PAGE
- ------- ----
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 ELIGIBILITY, ENROLLMENT AND PARTICIPATION 9
2.1 ELIGIBILITY 9
2.2 ENROLLMENT AND PARTICIPATION 10
2.3 WAIVER OF PARTICIPATION 11
ARTICLE 3 CONTRIBUTIONS 12
3.1 401(k) SAVINGS CONTRIBUTIONS 12
3.2 MATCHING CONTRIBUTIONS 14
3.3 PROFIT SHARING CONTRIBUTIONS 16
3.4 FAIL-SAFE CONTRIBUTIONS 17
3.5 ROLLOVER CONTRIBUTIONS 18
3.6 PAYMENT OF EXPENSES 18
3.7 ALLOCATION OF FORFEITURES 19
3.8 CREDITING OF CONTRIBUTIONS 19
3.9 PROFITS NOT REQUIRED 19
ARTICLE 4 LIMITATIONS ON ALLOCATIONS; NONDISCRIMINATION TESTING 20
4.1 LIMITATION ON ANNUAL ADDITIONS 20
4.2 NONDISCRIMINATION 21
ARTICLE 5 VESTING 22
5.1 VESTED INTEREST IN 401(k) SAVINGS CONTRIBUTIONS 22
5.2 VESTED INTEREST IN MATCHING CONTRIBUTIONS 22
5.3 VESTED INTEREST IN PROFIT SHARING CONTRIBUTIONS: FORFEITURES 22
5.4 FORFEITURES OF NON-VESTED PROFIT SHARING
CONTRIBUTIONS 27
5.5 VESTED INTEREST IN ROLLOVER CONTRIBUTIONS 29
5.6 VESTED INTEREST IN FAIL-SAFE CONTRIBUTIONS 29
ARTICLE 6 INVESTMENT OF TRUST ASSETS 29
6.1 PARTICIPANT'S ACCOUNT AND VALUATION 29
<PAGE>
6.2 INVESTMENT OF CONTRIBUTIONS 29
6.3 TRANSFERS BETWEEN INVESTMENT FUNDS 30
ARTICLE 7 DESIGNATION OF BENEFICIARY 31
7.1 SPOUSE AS BENEFICIARY 31
7.2 CHANGE OF BENEFICIARY 32
7.3 EFFECT OF NOT DESIGNATING BENEFICIARY: DEATH OF BENEFICIARY 32
ARTICLE 8 LOANS 32
8.1 LOANS TO PARTICIPANTS 32
8.2 LOAN TERMS AND CONDITIONS 33
8.3 LOAN PROCEDURES 33
ARTICLE 9 DISTRIBUTION OF BENEFITS 34
9.1 DISTRIBUTIONS IN GENERAL 34
9.2 TIMING OF DISTRIBUTION 34
9.3 FORM OF DISTRIBUTION 34
9.4 DEFERRAL ELECTION 34
9.5 PAYMENT OF BENEFITS 35
9.6 COMMENCEMENT OF DISTRIBUTIONS FOR PARTICIPANTS
AGED 70-1/2 36
9.7 DISTRIBUTION ON TERMINATION OF EMPLOYMENT 36
9.8 DISTRIBUTION ON NORMAL RETIREMENT 36
9.9 DISTRIBUTION ON LATE RETIREMENT 37
9.10 DISTRIBUTION ON DISABILITY RETIREMENT 37
9.11 DEATH DISTRIBUTION 37
9.12 ALTERNATE PAYEE SPECIAL DISTRIBUTION 37
9.13 DIRECT ROLLOVER ELECTION 37
ARTICLE 10 IN-SERVICE WITHDRAWALS 38
10.1 WITHDRAWAL OF MATCHING CONTRIBUTIONS, PROFIT SHARING
CONTRIBUTIONS OR FAIL-SAFE CONTRIBUTIONS NOT
ALLOWED 38
10.2 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS FOR SERIOUS
FINANCIAL HARDSHIP 38
10.3 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF 401(k)
SAVINGS CONTRIBUTIONS 39
10.4 NOTIFICATION 41
10.5 TAXES AND PENALTIES ARE RESPONSIBILITY OF PARTICIPANT 41
<PAGE>
10.6 NO REPAYMENT ALLOWED 41
10.7 WITHDRAWAL AFTER AGE 59-1/2 41
10.8 WITHDRAWAL AFTER ATTAINMENT OF NORMAL RETIREMENT
AGE 42
ARTICLE 11 FIDUCIARY DUTIES AND RESPONSIBILITIES 42
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT 42
11.2 SERVICE IN MULTIPLE CAPACITIES 42
11.3 LIMITATIONS ON FIDUCIARY LIABILITY 43
ARTICLE 12 THE ADMINISTRATOR 43
12.1 DESIGNATION OF ADMINISTRATOR 43
12.2 DUTIES AND AUTHORITY 44
12.3 EXPENSES AND COMPENSATION 45
12.4 INFORMATION FROM EMPLOYER 45
12.5 ADMINISTRATIVE COMMITTEE: MULTIPLE SIGNATURES 45
12.6 RESIGNATION AND REMOVAL: APPOINTMENT OF SUCCESSOR 46
12.7 INVESTMENT MANAGER 46
12.8 DELEGATION OF DUTIES 46
ARTICLE 13 BENEFITS CLAIM PROCEDURE 47
13.1 FILING A CLAIM FOR BENEFITS 47
13.2 DENIAL OF CLAIM 47
13.3 REMEDIES AVAILABLE FOR DENIAL OF CLAIM 48
13.4 LIMITATION OF RIGHTS 49
13.5 MERGERS OR TRANSFERS 49
ARTICLE 14 AMENDMENT OR TERMINATION OF THE PLAN 50
14.1 AMENDMENT OF THE PLAN 50
14.2 CONDITIONS OF AMENDMENT 51
14.3 TERMINATION OF THE PLAN 51
14.4 FULL VESTING 51
14.5 DISTRIBUTIONS UPON PLAN TERMINATION 52
14.6 APPLICATION OF FORFEITURES 52
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE 53
14.8 SUBSEQUENT UNFAVORABLE DETERMINATION 53
<PAGE>
ARTICLE 15 SUBSTITUTION OF PLANS 54
15.1 SUBSTITUTION OF PLANS 54
15.2 TRANSFER OF ASSETS 54
ARTICLE 16 MISCELLANEOUS 55
16.1 NON-REVERSION 55
16.2 REFERENCE TO THE CODE AND ERISA 55
16.3 GOVERNING LAW 55
16.4 COMPLIANCE WITH THE CODE AND ERISA 55
16.5 NON-ALIENATION: QUALIFIED DOMESTIC RELATIONS ORDERS 56
16.6 CONTRIBUTION RECAPTURE 56
16.7 "TOP HEAVY" CONTINGENCY PROVISIONS 57
ARTICLE 17 TRUST AGREEMENT 59
17.1 CREATION AND ACCEPTANCE OF TRUST 59
17.2 TRUSTEE CAPACITY; CO-TRUSTEES 59
17.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE 60
17.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE 61
17.5 TRUSTEE ENTITLED TO CONSULTATION 61
17.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE 61
17.7 EVIDENCE OF TRUSTEE ACTION 64
17.8 INVESTMENT POLICY 65
<PAGE>
USCS INTERNATIONAL, INC.
401(k) RETIREMENT PLAN
NATURE OF THE PLAN
The purpose of this Plan is to provide Participants with an opportunity to
accumulate capital for their future economic security. The Plan is for the
exclusive benefit of Participants and their Beneficiaries.
The Plan is a defined contribution plan; the Plan is a profit sharing plan
under Section 401(a) of the Internal Revenue Code of 1988, as amended (the
"Code") that includes a "cash or deferred arrangement" under Section 401(k) of
the Code; and the Plan is an employee pension benefit plan under ERISA The Plan
consists of three portions:
(a) The first portion is the "401(k) Savings" portion.
(b) The second portion is the "Matching" portion.
(c) The third portion is the "Profit Sharing" portion.
In addition to contributions for the above portions of the Plan, the Plan
allows Rollover Contributions and Fail-Safe Contributions (as hereinafter
defined). The Plan does not allow after-tax contributions by Participants.
ARTICLE 1
DEFINITIONS
In the text of the Plan, where a provision is intended to apply to the
entire Plan, the term "Plan" is used. Where a provision is intended to apply to
one portion of the Plan, but not to
<PAGE>
others, the term "401(k) Savings portion", "Matching portion or "Profit Sharing
portion", as the case may be, is used.
In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to include
the other, the term "he," "his" and "him" shall refer to a Participant, and the
capitalized terms shall have the following meanings:
1.1 Accrued Benefit ................. the value on
any applicable date of the Participant's Account.
1.2 Active Participant .............. any Participant
who (a) performs duties as an Employee for the
Employer, and (b) is not an Inactive Participant.
1.3 Affiliate ....................... any corporation
which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of
the Code) of which USCS International, Inc. is also a
member or any trade or business (whether or not
incorporated) which is under common control with USCS
International, Inc. (within the meaning of Section
414(c) of the Code).
1.4 Annual Additions ................ defined in
Paragraph 5.1.
1.5 Beneficiary ..................... the person or
persons entitled to receive any benefit under the
Plan in the event of a Participant's death. See
Article 7.
1.6 Board of Directors .............. the Board of
Directors of USCS International, Inc.
<PAGE>
1.7 Code ............................the Internal Revenue
Code of 1986, as amended.
1.8 Company Stock ................... Shares of Common
Stock, par value $.05 per share, issued by the
Company.
1.9 Compensation .................... total wages and
other compensation paid to an Employee by his
Employer during the Plan Year and reportable on the
Employee's Wage and Tax Statement (W-2), but
excluding bonuses, taxable perquisites, relocation
assistance payments, and payments made to or on
behalf of an Employee to reimburse him for additional
costs and expenses associated with working outside
the United States, plus the amount of any elective
deferral contributions made in accordance with Code
sections 125, 129, 402(a)(8) or 402(h) of the Code
and excluding any amount in excess of $160,000 (as
adjusted after 1997 for increases in the cost of
living pursuant to Code section 401(a)(17)(B). If
any Plan Year is shorter than 12-consecutive months,
the $160,000 limit discussed above shall be reduced
to bear the same ratio to $160,000 as the number of
days in the short Plan Year bears to 365.
1.10 Disability or Disabled .......... a condition that
entitles an Employee to receive primary Social
Security benefits as a disabled employee under the
Social Security Act.
1.11 Disability Retirement Date ...... the first day
of the month after the Plan Administrator (a) has
been notified in writing that a Participant's
incapacity is a Disability and (b) has been provided
with proof of entitlement to receive primary Social
Security benefits as a disabled employee.
1.12 Employee ........................ any common-law
employee of the Employer. A
<PAGE>
leased employee, as described in Section 414(n) of
the Code, is not an Employee for purposes of this
Plan.
1.13 Employer ........................ USCS
International, Inc., CableData, Inc., International
Billing Services, Inc. and any other Affiliate which,
with the approval of the Board of Directors, has
adopted this Plan.
1.14 Entry Date ...................... The later of(i)
the first day of the month following the date the
Employee commences Service or (ii) the date the
Employee attains age 21.
1.15 ERISA ............................the Employee
Retirement Income Security Act of 1974 (PL 93-406) as
it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and
such regulations affect this Plan and Trust.
1.16 ESOP ............................the Employee Stock
Ownership Plan
1.17 Fail-Safe Contribution .......... discretionary
non-elective contributions made by the Employer which
are designated as Qualified Nonelective
Contributions, are immediately vested and
nonforfeitable at all times and satisfy the Code
section 401(k) withdrawal restrictions; see Paragraph
3.4.
1.18 Fiduciary ....................... any, or all, of
the following, as applicable: (a) Any Person who
exercises any discretionary authority or control
respecting the management of the Plan, the Trust, or
its assets; or (b) Any Person who renders investment
advice for a fee or other compensation, direct or
indirect, respecting any monies or other property of
the Plan or the Trust or has authority or
responsibility to do so; or (c) Any Person who has
discretionary authority or responsibility in
<PAGE>
the administration of the Plan or the Trust; or
(d) Any Person who has been designated by a Named
Fiduciary pursuant to authority granted by the Plan,
who acts to carry out a fiduciary responsibility,
subject to any exceptions granted directly or
indirectly by ERISA.
1.19 Forfeiture ...................... the amount,
if any, by which the value of a Participant's Account
exceeds his Vested Interest following such
Participant's Termination of Employment, and at the
time specified in Section 9.1.
1.20 401(k) Savings Contributions .... contributions
made by the Employer pursuant to a Salary Deferral
Agreement entered into between the Employer and the
Participant and which are intended to be part of a
cash or deferred arrangement pursuant to Section
401(k) of the Code.
1.21 Highly Compensated Employee...... an Employee who
(1) was a 5% owner at any time during the Plan Year
or the preceding Plan Year, or (2) has Statutory
Compensation in excess of $80,000 in the preceding
Plan Year and, if so elected by the Company, was in
the top-paid 20% of Employees for such preceding Plan
Year. The $80,000 amount shall be adjusted after
1997 for increases in the cost of living pursuant to
Section 414(q)(1) of the Code.
1.22 Inactive Participant ............ any Participant
who does not currently meet the requirements to be an
Active Participant due to a suspension of the
performance of duties for the Employer.
1.23 Late Retirement Date ............ the first day
of the month coinciding with or next following the
date a Participant is separated from
<PAGE>
Service with the Employer after his Normal Retirement
Age, for any reason other than death.
1.24 Matching Contributions .......... contributions
made by the Employer to the Plan on behalf of a
Participant on account of 401(k) Savings
Contributions, if any, as set forth in Paragraph 3.2.
1.25 Nondiscrimination Tests ......... the tests set
forth in Sections 401(k) and 401(m) of the Code and
regulations thereunder, as the same may be amended or
augmented from time to time.
1.26 Non-elective Contributions ...... contributions
made by the Employer (other than Matching
Contributions) that the Participant may not elect to
have paid in cash or other benefits instead of being
contributed to the Plan.
1.27 Normal Retirement Age ........... Age 59 1/2 with
at least five Years of Service. In no event,
however, shall an Employee's Normal Retirement Age be
later than his 65th birthday.
1.28 Normal Retirement Date .......... the first day
of the month coinciding with or next following the
date a Participant attains his Normal Retirement Age.
1.29 Participant ..................... any Employee of
the Employer, who is or becomes eligible to
participate and enrolls under this Plan in accordance
with its provisions; the term "Participant" shall
include both an Active Participant and an Inactive
Participant.
1.30 Participant's Account ........... the sum of the
following sub-accounts held on behalf of each
Participant: (a) 401(k) Savings Contributions, if any
and earnings thereon,
<PAGE>
(b) Matching Contributions, if any, and earnings
thereon, (c) Profit Sharing Contributions, if any,
and earnings thereon, (d) Rollover Contributions, if
any, and earnings thereon, (e) Fail-Safe
Contributions, if any, and earnings thereon, and (f)
Diversification transfers made in accordance with
Section 3.10 of the Plan, if any, and earnings
thereon.
1.31 Person .......................... any natural person,
partnership, corporation, trust or estate.
1.32 Plan ............................ this 401(k)
Retirement Plan, the terms of which are set forth
herein and as the same may be amended from time to
time.
1.33 Plan Administrator or Administrator or Administrative
Committee ...the terms Plan Administrator,
Administrator, and Administrative Committee are used
interchangeably throughout the Plan and Trust and
shall mean that person or persons designated by the
Employer pursuant to Section 12.1 of the Plan, or, in
the absence of such designation, the Employer.
1.34 Plan Year ....................... the
12-month period commencing on January 1 and ending on
the following December 31 except that the first Plan
Year shall begin on July 1, 1991 and end on
December 31, 1991.
1.35 Profit Sharing Contributions .... see Paragraph
3.3.
1.36 Qualified Matching Contributions.. Matching
Contributions which are designated as Qualified
Matching Contributions, and are immediately vested
and nonforfeitable at all
<PAGE>
times and satisfy the Code section 401(k) withdrawal
restrictions.
1.37 Rollover Contributions .......... payments made
to the Trust in accordance with Section 3.5.
1.38 Salary Deferral Agreement ....... an agreement
between a Participant and the Employer to defer some
of the Participant's Compensation for the purpose of
making 401(k) Savings Contributions to the Plan.
1.39 Serious Financial Hardship ...... the occurrence
of an immediate and heavy financial need of the
Participant, as set forth in Paragraphs 10.2 and 10.3
1.40 Service ..................................
employment with the Employer or with any Affiliate.
1.41 Statutory Compensation .......... The total
remuneration paid to an Employee by an Employer or an
Affiliate during the Plan Year for personal services
rendered, plus the amount of any 401(k) Savings
Contributions made by an Employee for the Plan Year
under the Plan and any amounts he elects to have
withheld for the Plan Year under a "cafeteria plan"
described in Section 125 of the Code and excluding
employer contributions to a plan of deferred
compensation, amounts realized in connection with
stock options and amounts which receive special tax
benefits. For the 1997 Plan Year only, "Statutory
Compensation" shall mean the total remuneration paid
to an Employee by an Employer or an Affiliate during
the Plan Year for personal services rendered,
excluding employer contributions to a plan of
deferred compensation, amounts realized in connection
with stock options and amounts which receive special
tax benefits and for purposes of the
<PAGE>
definition of "Highly Compensated Employee,"
"Statutory Compensation" shall include any 401(k)
Savings Contributions made by an Employee for the
Plan Year under the Plan and any amount he elects to
have withheld for the Plan Year under a "cafeteria
plan" described in Section 125 of the Code.
1.42 Statutory Dollar Amount ......... for any Plan
Year, $30,000, as may be increased pursuant to
Section 415(c)(1)(A) of the Code.
1.43 Termination of Employment ....... the severance
of the employer-employee relationship between an
Employee and all Affiliates. The transfer by an
Employee from one Affiliate to another shall not be
deemed a Termination of Employment.
1.44 Trust ...........................the trust formed by
the trust agreement entered into by the Employer and
the Trustee, which trust agreement forms a part of,
and implements the provisions of this Plan.
1.45 Trustee .........................one or more persons
collectively appointed and acting under the trust
agreement, and any successor thereto.
1.46 USCS International, Inc. ........ USCS
International, Inc., a Delaware Corporation, and any
successor by merger, acquisition, consolidation or
otherwise that assumes the obligations of USCS
International, Inc. under the Plan.
1.47 Vested Interest .................on any date, the
nonforfeitable right to an immediate or deferred
benefit.
ARTICLE 2
<PAGE>
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2.1 ELIGIBILITY.
(a) EMPLOYEES EMPLOYED AS OF JULY 1, 1991. Except as provided in
subparagraphs (d) and (e) below, each Employee who is employed by the Employer
as of July 1, 1991, shall be eligible to become a Participant.
(b) EMPLOYEES EMPLOYED AFTER JULY 1, 1991. Except as provided in
subparagraphs (d) and (e) below, each Employee who becomes employed by the
Employer after July 1, 1991, shall be eligible to become a Participant as of the
next Entry Date after both of the following requirements are met:
(1) he has attained the age of 21 and
(2) he has either
(i) completed three (3) consecutive months of Service or
(ii) completed one (1) year of Service (in
which he is credited with at least 1000 hours of Service).
EFFECTIVE JANUARY 1, 1995, except as provided in subparagraphs (d),
(e) and (g) below, (i) each Employee who is employed by the Employer as of
January 1, 1995 shall be eligible to become a Participant as of January 1, 1995,
provided he has attained the age of 21, and (ii) each Employee who becomes
employed by the Employer after January 1, 1995 shall be eligible to become a
Participant as of the next Entry Date after he has attained the age of 21.
(c) REEMPLOYED PARTICIPANTS. Except as provided in subparagraph (e)
below, a former Participant who is reemployed by the Employer shall become a
Participant as of the date of his reemployment.
(d) EMPLOYEES SUBJECT TO COLLECTIVE BARGAINING AGREEMENT AND EMPLOYEES OF
<PAGE>
FOREIGN AFFILIATES. An Employee whose terms of Service are covered by a
collective bargaining agreement shall not be eligible to participate in the Plan
unless the terms of such agreement specifically provide for participation in the
Plan. An Employee who is a nonresident alien and who receives no earned income
from an Employer which constitutes income from sources within the United States
shall not be eligible to participate in the Plan.
(e) LEASED EMPLOYEES NOT ELIGIBLE. A leased employee (as described in
Section 414(n) of the Code) shall not be eligible to participate in the Plan
(but shall be counted for purposes of Nondiscrimination Testing).
(f) TEMPORARY EMPLOYEES NOT ELIGIBLE. A temporary Employee whose period
of Service is less than one year shall not be eligible to participate in the
Plan.
(g) SPECIAL ELIGIBILITY FOR A PORTION OF PROFIT SHARING CONTRIBUTIONS.
Eligibility for participation under the first sentence of Section 3.3 shall be
solely that the Employee is employed by the Employer as of the last day of the
Plan Year.
2.2 ENROLLMENT AND PARTICIPATION.
Each Participant will be eligible for the "fixed" Profit Sharing
Contribution in accordance with Section 3.3 on the date he commences Service.
Each Participant will become eligible for the "variable" Profit Sharing
Contribution in accordance with Section 3.3, and will be eligible to make 401(k)
Savings Contributions in accordance with Section 3.1, as of the next Entry Date
after he has become a Participant.
2.3 WAIVER OF PARTICIPATION.
Notwithstanding any provision of the Plan to the contrary, any Employee, in
accordance with the rules of the Plan, may decline to become a Participant or
cease to be an Active Participant by filing a written waiver of participation
with the Administrator in the manner it prescribes. Such waiver must be filed
prior to the date such Employee is eligible to become a Participant, or in the
case of an Active Participant, in the last
<PAGE>
month of the Plan Year immediately preceding the Plan Year for which he wishes
to cease being an Active Participant.
Any Employee who files such a waiver shall not become a Participant, or if
an Active Participant, shall elect to cease to be such as of the first day of
the succeeding Plan Year; and such employee shall not receive any additional
compensation or other sums by reason of his waiver of participation.
Any such waiver may be rescinded by an Employee effective as practicable
after such filing.
<PAGE>
ARTICLE 3
CONTRIBUTIONS
3.1 401(k) SAVINGS CONTRIBUTIONS.
Each Active Participant may enter into a written Salary Deferral Agreement
with the Employer in an amount equal to not less than 1% nor more than 12% of
his Compensation in whole percentages for the Contribution Period. As used
herein, the term "Contribution Period" means the period of time during which
salary deferral is authorized under a Salary Deferral Agreement. In
consideration of such agreement, the Employer will make a contribution for each
Contribution Period on behalf of the Participant in an amount equal to the total
amount by which the Participant's Compensation from the Employer was deferred
during the Contribution Period pursuant to the Salary Deferral Agreement then in
effect. 401(k) Savings Contributions shall be paid by the Employer to the Trust
as soon as practicable after such amounts have been withheld, but in no event
later than the 15th business day of the month following the month in which such
amounts were withheld.
Salary Deferral Agreements shall be governed by the following provisions:
(a) Amounts contributed pursuant to a Salary Deferral Agreement shall be
100% vested and nonforfeitable at all times.
(b) Amounts contributed during a calendar year pursuant to a Salary
Deferral Agreement shall not exceed $9,500 multiplied by the applicable cost of
living adjustment factor prescribed under Code Section 402(g)(5).
In the event that amounts contributed during a calendar year pursuant to a
Salary Deferral Agreement or other cash or deferred arrangements described in
Section 401(k) or 403(b) of the Code exceed the limit specified above, then the
excess amount
<PAGE>
plus earnings thereon shall be distributed to the Participant by the April 15
following the calendar year in which such amount was contributed, provided that
the Participant notifies the Plan Administrator no later than 30 days in advance
of his intent to withdraw such excess deferral.
(c) Amounts contributed pursuant to a Salary Deferral Agreement, which are
not in excess of the limit described in Subsection (b) above, shall be subject
to the Limitations on Allocations in accordance with Article 4.
401(k) Savings Contributions which are in excess of the limit described in
Subsection (b) shall also be subject to the Article 4 limitations if such
amounts plus earnings thereon are not distributed by the April 15 following the
calendar year in which the amounts were contributed.
(d) A Salary Deferral Agreement may be changed by a Participant at any
time or times during the Plan Year by filing written notice thereof with the
Administrator. Such notice shall be effective, and the Salary Deferral
Agreement shall be changed on the beginning of the pay period immediately
following the date specified in such notice, which date must be at least 7 days
after such notice is filed.
(e) If the Employer determines that the percentage election made by Highly
Compensated Employees may violate Section 401(k) of the Code, the Employer may
require a reduction on a prospective basis of the amount deferred by the Highly
Compensated Employees to assure compliance with the Code.
(f) If the Employer changes or suspends its Salary Deferral Agreements as
described in Subsection (e) above, then the affected Participants shall continue
to participate in the Plan. When the situation that resulted in the change or
suspension of the Salary Deferral Agreements as described in Subsection (e)
above ceases to exist, the Employer shall reinstate the Salary Deferral
Agreements to the fullest extent possible for all affected Participants in a
nondiscriminatory manner.
<PAGE>
(g) 401(k) Savings Contributions shall be subject to relevant
Nondiscrimination Tests described in Section 401 (k)(3) of the Code and Section
1.401(k)-1(b) of the Treasury regulations thereunder.
(h) A Participant who is absent from employment on account of an unpaid
authorized leave of absence or military leave shall have his Salary Deferral
Agreement suspended during such unpaid leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the Employer to him
ceases, and shall remain in effect until payment of Compensation is resumed.
Notwithstanding any provisions of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.
3.2 MATCHING CONTRIBUTIONS.
The Employer shall make a Matching Contribution in an amount equal to $.50
for each $1.00 by which a Participant defers his Compensation pursuant to a
Salary Deferral Agreement up to a maximum of 6% of his Compensation, subject to
the Limitations on Allocations specified in Article 4. Matching Contributions
shall be made only for such Participants who are Active Participants as of the
last day of the Plan Year. The amount of the Matching Contribution shall be
determined on a pay-period-by-pay-period basis. The Matching Contribution shall
be paid to the Trust on an annual basis (or more frequently, if the Employer so
elects). The Employer's obligation to make a Matching Contribution shall be
reduced by the amount of any Forfeitures for the Plan Year. Matching
Contributions shall be subject to the relevant Nondiscrimination Tests described
in Section 401(m)(2) of the Code and Section 1.401(m)-1(b) of the regulations
thereunder and Section 401(m)(9) of the Code and Section 1.401(m)-2 of the
regulations thereunder. The Employer may designate at the time of contribution
that all or a portion of such Matching Contributions be treated as
<PAGE>
Qualified Matching Contributions.
Such Matching Contribution shall be allocated as of the last day of the
Plan Year for which such contribution is made to each Participant who is an
Active Participant as of that day.
Notwithstanding the above provision, an allocation will be made on behalf
of a Participant who dies, terminates employment after reaching age 65, or
becomes Disabled during the Plan Year.
The Matching Contribution described in this Paragraph 3.2 for any plan year
shall be paid to the Trust as soon as practical on or after the last day of such
plan year as determined by the USCS International, Inc. Board of Directors, but
in any event not later than the date which is prescribed by law for filing the
employers federal income tax return, including any extension thereof.
3.3 PROFIT SHARING CONTRIBUTIONS.
The Employer shall make a "fixed" contribution under the Plan for each Plan
Year in an amount equal to 3% of the Compensation of all Participants who are
Active Participants as of the last day of the Plan Year.
The Employer shall also make a "variable" contribution under the Plan for
each Plan Year after 1995 in an amount equal to 10% of the Employer's Pre-Tax
Income for such Plan Year (subject to a maximum limit of 5% of the aggregate
payroll of all Employees), less the total of any bonuses paid in December of
such Plan Year to Employees as a part of the Employer's "Profit Sharing
Program." Such "variable" Profit Sharing Contributions shall be allocated as of
the last day of the Plan Year for which such contributions are made to each
Participant who is an Active Participant as of the last day of the Plan Year.
The "variable" contributions shall be allocated to each such Participant, in an
amount not to exceed 5% of his Compensation, in the proportion that the
Compensation paid to each Participant during the Plan Year bears to the
<PAGE>
Compensation paid to all such Participants, subject to the Limitation on
Allocations specified in Article 4.
For purposes of the "fixed" contribution only, Compensation shall include
any taxable perquisites and all bonuses. For purposes of the "variable"
contribution only, Compensation shall include any taxable perquisites, all
bonuses and an additional amount equal to the 401(k) Savings Contributions made
for that Plan Year.
The Employer may designate at the time of contribution that all or a
portion of such Profit Sharing Contributions be treated as a Qualified
Non-Elective Contribution.
Any "variable" Profit Sharing Contribution allocated based on the
additional amount equal to the 401(k) Savings Contributions made for that Plan
Year shall be treated as Matching Contributions for purposes of the relevant
Non-Discrimination Tests described in Section 3.2 of the Plan.
The Profit Sharing Contributions for any Plan Year shall be paid to the
Trust as soon as possible on or after the last day of such Plan Year after the
Employer's audited financial results are known and the contribution amounts have
been determined, but in any event not later than the date which is prescribed by
law for filing the Employer's federal income tax returns, including any
extensions thereof.
3.4 FAIL-SAFE CONTRIBUTIONS.
The Employer reserves the right to make a discretionary Non-Elective
Contribution to the Plan for any Plan Year, if the Employer determines that such
a contribution is necessary to ensure that either of the relevant
Nondiscrimination Tests will be satisfied for that Plan Year. Such amount shall
be designated by the Employer at the time of contribution as a Qualified
Non-Elective Contribution and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are considered
under the
<PAGE>
Actual Deferral Percentage Test or the Actual Contribution Percentage Test.
This contribution shall be allocated to the Participant's Account of each such
Participant in an amount equal to a fixed percentage which shall be equal to the
minimum fixed percentage necessary to be contributed by the Employer on behalf
of each eligible non-Highly Compensated Employee who is a Participant so that
the Actual Deferral Percentage Test or the Actual Contribution Percentage Test
is satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall be
paid to the Trust at the end of the Plan Year, or as soon as practicable on or
after the last day of such Plan Year, but in no event later than the date which
is prescribed by law for filing the Employer's federal income tax return
including any extensions thereof.
3.5 ROLLOVER CONTRIBUTIONS.
Without regard to the Limitation on Allocations imposed under Article 4,
subject to such terms and conditions as may be established from time to time by
the Administrator, a Participant may make a Rollover Contribution to the Trust
by delivering such contribution to the Trustee, together with a written
certification, satisfactory to the Administrator, that the contribution
qualifies as a Rollover Contribution under Section 402(c)(4) or 408(d)(3) of the
Code. Such Employee's Rollover Contributions shall be allocated to his Rollover
Contributions subaccount and may be invested in any fund authorized under the
provisions of this Plan. No Rollover Contribution shall be accepted from the
ESOP.
3.6 PAYMENT OF EXPENSES.
The Employer may contribute to the Plan the amount necessary to pay any
applicable expense charges and administration charges. In lieu of the Employer
contributing the amount necessary to pay such charges, these expenses may be
paid from Plan assets.
3.7 ALLOCATION OF FORFEITURES.
<PAGE>
Forfeitures for the Plan Year shall be considered as part of Matching
Contributions for that Plan Year. If such Forfeitures exceed the amount of
Matching Contributions required for that Plan Year, such Forfeitures shall be
treated as Profit Sharing Contributions made by the Employer for that Plan Year.
3.8 CREDITING OF CONTRIBUTIONS.
Contributions shall be credited to the Participant Account of each
Participant for whom such contributions are made in accordance with the
provisions of Article 6.
3.9 PROFITS NOT REQUIRED.
Contributions to this Plan shall not be precluded
because the Employer does not have net profits.
Notwithstanding the existence of net profits, the
Employer may determine in its sole discretion that
it will make no Profit Sharing Contributions in
excess of the minimum required by the first
sentence of the first paragraph of Section 3.3 or
Fail-Safe Contributions for such Plan Year.
Contributions to this Plan shall not be made if
such contributions may not be allocated by reason
of the limitation described in Paragraph 4.1 or if
such contributions are not deductible under
Section 404(a) of the Code.
3.10 TRANSFERS FROM ESOP.
If all or a portion of a Participant's interest under the ESOP is
transferred to the Plan in accordance with Sections 12(e), 13(b) or 13(c) of the
ESOP, such transferred amounts shall be credited to a Participant's
"Diversification subaccount" under the Plan.
<PAGE>
The portion (if any) of a Participant's interest under the ESOP that is
transferred in shares of Company Stock shall initially be a part of the Company
Stock Fund (as described in Section 6.4) and thereafter, such amounts may be
invested in any manner authorized under the provisions of this Plan.
ARTICLE 4
LIMITATIONS ON ALLOCATIONS; NONDISCRIMINATION TESTING
4.1 LIMITATION ON ANNUAL ADDITIONS.
The Annual Additions for each Plan Year with respect to any Participant may
not exceed the lesser of:
(a) 25% of his Statutory Compensation; or
(b) the Statutory Dollar Amount.
For this purpose, "Annual Additions" shall be the total of the 401(k)
Savings Contributions, Matching Contributions, and Profit Sharing Contributions
allocated to the Account of a Participant for the Plan Year, plus Employer ESOP
contributions and forfeitures allocated to the ESOP Account of the Participant,
except as provided in Section 16(f)(1) of the ESOP.
If the aggregate amount that would be allocated to the Accounts of a
Participant in the absence of this limitation would exceed the amount set forth
in this limitation, the allocation to his Accounts under the ESOP shall be
reduced prior to reducing the allocations to him under this Plan. If, after
such reduction, the aggregate amount that would be allocated still exceeds the
amount set forth in this limitation, the amounts to be allocated to the
Participant's Accounts shall be reduced in the following order: first, the
amount of "fixed" Profit Sharing Contributions for the Plan Year shall be
reduced
<PAGE>
and reallocated to the Accounts of remaining Participants; next, the amount
of "variable" Profit Sharing Contributions shall be reduced and reallocated
to the Accounts of remaining Participants; next, the amount of Matching
Contributions for the Plan Year shall be reduced and reallocated to the
Accounts of remaining Participants; next, the amount of Qualified
Non-Elective Contributions for the Plan Year shall be reduced and reallocated
to the Accounts of remaining Participants; and, finally, the amount of 401(k)
Savings Contributions for the Plan Year shall be returned to the Participant,
together with the income thereon.
4.2 NONDISCRIMINATION.
The Plan shall not discriminate in favor of Highly Compensated Employees as
to coverage, contributions or benefits and the Plan shall be subject to and pass
the relevant Nondiscrimination Tests set forth in the Code, as the same may be
amended from time to time. For this purpose, the Administrator may direct the
Trustee to distribute a portion of the 401(k) Savings Contribution and/or the
Matching Contribution of a Highly Compensated Employee to such employee
(together with any income attributable thereto no later than December 31 of the
following Plan Year, determined by reducing the 401(k) Savings and/or Matching
Contributions in order of the actual dollar amount of such 401(k) Savings and/or
Matching Contributions beginning with the highest of such dollar amounts.
ARTICLE 5
VESTING
5.1 VESTED INTEREST IN 401(k) SAVINGS CONTRIBUTIONS.
A Participant's interest in 401(k) Savings Contributions in his Account
shall be
<PAGE>
100% vested and nonforfeitable at all times.
5.2 VESTED INTEREST IN MATCHING CONTRIBUTIONS.
A Participant's interest in Matching Contributions in his Account shall be
100% vested and nonforfeitable at all times.
5.3 VESTED INTEREST IN PROFIT SHARING CONTRIBUTIONS: FORFEITURES.
A Participant's interest in Profit Sharing Contributions in his Account
shall vest and become nonforfeitable as follows:
(a) A Participant's interest in Profit Sharing Contributions shall be 100%
vested and nonforfeitable without regard to his credited Service if he (i) is
employed by the Employer or an Affiliate on or after his 65th birthday; (ii)
incurs a Disability while employed by the Employer or an Affiliate; or (iii)
dies while employed by the Employer or an Affiliate.
(b) Except as otherwise provided under Subsection (a) above, a
Participant's interest in Profit Sharing Contributions shall become vested and
nonforfeitable in accordance with the following schedule:
Nonforfeitable
Vesting
Years of Service Percentage
---------------- ---------------
Less than 3 years 0%
3 but less than 4 years 30%
4 but less than 5 years 60%
5 or more years 100%
(c) For purposes of determining vesting percentage, the following
definitions shall apply:
(1) A "Year of Service" shall mean a calendar year during which an
Employee has completed at least 1,000 Hours of Service; all Years of Service
with the
<PAGE>
Employer shall be taken into account except those calendar years in which a
Participant did not complete at least 1,000 Hours of Service. For vesting
purposes, all Years of Service with the Employer shall be taken into account
(including Years of Service prior to the establishment of this Plan).
(2) For purposes of determining the "Hours of Service" to be credited
to an Employee under the Plan, the following rules shall apply:
Hours of Service shall include each hour of Service for which an
Employee is paid (or entitled to payment) for the performance of duties; each
hour of service for which an Employee is paid or entitled to payment) for a
period during which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or paid
leave of absence; and each additional hour of Service for which back pay is
either awarded or agreed to (irrespective of mitigation of damages); provided,
however, that not more than 501 Hours of Service shall be credited for a single
continuous period during which an Employee does not perform any duties.
The crediting of Hours of Service shall be determined in accordance
with the rules set forth in paragraphs (b) and (c) of Section 2530.200b-2 of the
regulation: prescribed by the U.S. Department of Labor which rules shall be
consistently applied with respect to all Employees within the same job
classification. Each hour of Service for which an Employee is paid (or entitled
to payment) for the performance of duties, however, shall be credited to the
calendar year in which the bi-weekly payroll period ends (and not the calendar
year in which the duties were performed).
Hours of Service shall not be credited to an Employee for a period
during which no duties are performed if payment is made or due under a plan
maintained solely for the purpose of complying with applicable worker's
compensation, unemployment compensation or disability insurance laws, and Hours
of Service shall
<PAGE>
not be credited on account of any payment made or due an Employee solely in
reimbursement of medical or medically a related expenses.
An Employee compensated on an hourly basis shall be credited for each
Hour of Service as described above. A salaried Employee shall be credited with
90 Hours of Service for each bi-weekly payroll period in which he completes at
least one Hour of Service.
(3) A one-year Break in Service shall occur in a Plan Year in which
an Employee is not credited with more than 500 Hours of Service as a result of
his termination of Service. A five-consecutive-year Break in Service shall be
five consecutive one-year Breaks in Service.
For purposes of determining whether a Break in Service has occurred, if an
Employee begins a maternity/paternity absence described in Section
411(a)(6)(E)(i) of the Code after December 31, 1984, the computation of his
Hours of Service shall include the Hours of Service that would have been
credited if he had not been so absent (or eight Hours of Service for each normal
work day of such absence if the actual Hours of Service cannot be determined).
An Employee shall be credited for such Hours of Service (up to a maximum of 501
Hours of Service) in the Plan Year in which such absence begins (if such
crediting will prevent him from incurring a Break in Service in such Plan Year)
or in the next following Plan Year.
In addition, a Break in Service will not be deemed to have occurred as a
result of the following:
(1) service in the armed forces of the United States or any of its
allies during a period of declared national emergency, in the time of war or in
the compulsory military service of the United States, for a period commencing
with the commencement of such service and extending for the time during which
his employment rights are guaranteed by applicable Federal law following his
discharge or severance from such
<PAGE>
service; or
(2) leaves of absence granted by an Employer in writing and in a
nondiscriminatory manner for any purpose for a period commencing with the
commencement of such leave and ending with its expiration date or any extensions
thereof.
(d) If a former Employee is reemployed after a one-year Break in Service,
the following special rules shall apply in determining his Credited Service:
(1) New Accounts will be established to reflect his interest in the
Plan attributable to Service after the Break in Service.
(2) If he did not incur a one-year Break in Service prior to January
1, 1985, and is reemployed prior to the occurrence of a five -consecutive year
Break in Service, Credited Service after the Break in Service will increase his
vested interest in his Accounts (including any restored Accounts) attributable
to his Service prior to the Break in Service. If he is reemployed after the
occurrence of a five-consecutive-year Break in Service, Credited Service after
the Break in Service will not increase his vested interest in his Accounts
attributable to Service prior to the Break in Service.
(3) After he completes one Plan Year of Credited Service following
reemployment, his Credited Service with respect to his new Accounts will include
his Credited Service accumulated prior to the Break in Service.
(4) Notwithstanding paragraph (3), in the case of an Employee who
incurred a one- year Break in Service prior to January 1, 1985, and who had not
attained a vested interest under the Plan, Service prior to the Break in Service
shall not be included in determining his Credited Service if the number of
consecutive Break in Service years as of December 31, 1984, equaled or exceeded
the Credited Service accumulated prior to the Break in Service.
(5) The above notwithstanding, in the case of an Employee who did
<PAGE>
not incur a one-year Break in Service prior to January 1, 1985 (or who incurred
a one-year Break in Service prior to January 1, 1985, but the number of
consecutive Break in Service years as of December 31, 1984, was less than the
number of years of Credited Service accumulated prior to the Break in Service),
who is reemployed after a five consecutive-year Break in Service and who has not
attained a vested interest under the Plan, Service prior to the Break in Service
shall not be included in determining his Credited Service.
5.4 FORFEITURES OF NON-VESTED PROFIT SHARING CONTRIBUTIONS.
(a) If at the time of his Termination of Employment the Participant is not
100% vested and does not take a distribution from the portion of his Vested
Interest that is attributable to Employer contributions, the non-vested portion
of his Participant's Account shall be placed in a separate account and will
become a Forfeiture upon the date such terminated Participant incurs five
consecutive one-year Breaks in Service. If such a terminated Participant is
rehired by the Employer and re-enrolls in the Plan before incurring five
consecutive one-year Breaks in Service, the non-vested portion shall be restored
to his Participant's Account and shall not become a Forfeiture.
(b) If at the time of his Termination of Employment the Participant is not
100% vested and does take a distribution from the portion of his Vested Interest
that is attributable to Employer contributions, or if the Participant is 0%
vested, the non-vested portion of his Participant's Account shall be placed in a
separate account and will become a Forfeiture upon the date such terminated
Participant incurs a one-year Break in Service.
(c) RESTORATION OF FORFEITURE. If a terminated Participant, whose
separate account became a Forfeiture in accordance with Paragraph (b) is later
rehired by the Employer and re-enrolls in the Plan before incurring five
consecutive one-year Breaks in Service, then the amount of the Forfeiture shall
be restored from the forfeiture
<PAGE>
reallocation pool if the Participant repays the distribution that was made at
his Termination of Employment. Such repayment must be made before the
Participant has incurred five consecutive one- year Breaks in Service following
the date he received the distribution or five years after the Participant is
re-employed by the Employer, whichever date is earlier.
(d) Until the time a reemployed Participant repays the distribution made
at his Termination of Employment in accordance with the preceding terms of this
Section, or if the Participant does not repay such distribution, the
Participant's vested or nonforfeitable portion of the separate account
established in accordance with this Section shall, at any relevant time, be
equal to an amount ("X") determined by the following formula:
X = P {AB + (R x D)} - (R x D)
For the purposes of applying this formula: P = The Participant's Vesting
Percentage at the relevant time; AB = The account balance at the relevant time;
R = The ratio of the account balance at the relevant time to the account balance
after the distribution; D = The amount of the distribution.
(e) A Participant shall have no further interest in or any rights to any
portion of his Participant's Account that becomes a Forfeiture due to his
Termination of Employment once the Participant incurs five consecutive one-year
Breaks in Service.
(f) In the event that a former Participant is rehired by the Employer and
the Employer is required by the provisions of this Plan to restore the amount of
a separate account that had been created upon such Participant's prior
Termination of Employment and later forfeited, Forfeitures, if any, will first
be used to restore such
<PAGE>
separate account to its value as of such Participant's prior Termination of
Employment date. In the event that the available Forfeitures are not sufficient
to make such restoration, the Employer will make an additional contribution
sufficient to make such restoration.
5.5 VESTED INTEREST IN ROLLOVER CONTRIBUTIONS.
A Participant's interest in Rollover Contributions in his Account shall be
100% vested and nonforfeitable at all times.
5.6 VESTED INTEREST IN FAIL-SAFE CONTRIBUTIONS.
A Participant's interest in Failsafe Contributions in his Account shall be
100% vested and nonforfeitable at all times.
ARTICLE 6
INVESTMENT OF TRUST ASSETS
6.1 PARTICIPANT'S ACCOUNT AND VALUATION.
A Participant's Account shall be maintained on behalf of each Participant
until such account is distributed in accordance with the terms of this Plan. At
least once per year, as of the last day of the Plan Year, each Participant's
Account shall be adjusted for any earnings, gains, losses, contributions, and
expenses attributable to such Plan Year, in order to obtain a new valuation of
the Participant's Account.
6.2 INVESTMENT OF CONTRIBUTIONS.
Each Participant shall have the exclusive authority to direct the
investment of contributions made to his Participant's Account among the
investment funds designated by the Employer. The Participant shall elect, by
written notice to the Plan Administrator or by such other means as the Plan
Administrator shall designate, to have a specified
<PAGE>
percentage invested in one or more investment fund(s), as long as the designated
percentage for each fund is a whole number, and the sum of the percentages
allocated is equal to 100%. Each Participant shall bear sole responsibility for
the investment of his Account and the Administrator shall not have any
responsibility or liability for any losses that may occur in connection
therewith.
In the event that a Participant does not direct the investment of Profit
Sharing portion, the Administrator will automatically invest such Profit Sharing
Contributions in the Long Term Guaranteed fund until such time as the
Participant makes an investment election.
In the event that Matching Contributions, Profit Sharing Contributions or
Fail-Safe Contributions are made to the Plan and allocated to Participants'
Accounts in the form of Company Stock, such amounts shall initially be invested
in the "Company Stock Fund" (as described in Section 6.4) and thereafter, such
amounts may be invested in any manner authorized under the provisions of this
Plan.
6.3 TRANSFERS BETWEEN INVESTMENT FUNDS.
The Participant may change the designated percentages to be invested in
each particular investment fund at any time or times during a Plan Year, subject
to the rules of the investment funds in which the Participant's Account is
invested or is to be invested.
The Plan Administrator shall provide each Participant with a form or other
means by which the Participant may use to select among the investment funds
designated by the Employer.
6.4 COMPANY STOCK FUND.
Effective as of January 1, 1998, one of the investment funds available to
Participants shall be a "Company Stock Fund." If a Participant directs that all
or a portion of the contributions made to his Account be invested in the Company
Stock
<PAGE>
Fund, then such amounts will be invested in Company Stock. The Trustee may
acquire shares of Company Stock through open-market purchases or from the
Company, and any purchase of Company Stock from the Company shall be made only
at a price not less favorable to the Plan than the offering price for Company
Stock as established by the current NASDAQ bid and asked prices.
ARTICLE 7
DESIGNATION OF BENEFICIARY
7.1 SPOUSE AS BENEFICIARY.
The Participant's spouse is the designated Beneficiary of 100% of the
Participant's Vested Interest; provided, however, that each Participant shall
have the right to designate another Beneficiary(ies) in lieu of his spouse,
provided his spouse consents in writing to such designation. The spouse's
consent must be in writing, must acknowledge the financial effect of the
designation of the Beneficiary and must be witnessed by a notary public. If the
spouses consent specifically acknowledges a nonspouse Beneficiary designated by
the Participant and does not grant the Participant the right to make future
changes to this designation without spousal consent, then the Participant may
not subsequently designate another nonspouse Beneficiary without the further
written consent of the spouse. Alternatively, the spouse's consent may
expressly allow the Participant to change his designation of a nonspouse
Beneficiary without additional spousal consent. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because there is no
spouse or the spouse cannot be located, a waiver will be deemed to be effected.
Any consent necessary under this
<PAGE>
provision will be valid only with respect to the spouse who signs the consent,
or in the event of a deemed waiver, the designated spouse. Additionally, 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.
7.2 CHANGE OF BENEFICIARY.
The Participant may change any and all Beneficiaries at any time, subject
to the requirement of Paragraph 7.1 regarding the written consent of the spouse.
7.3 EFFECT OF NOT DESIGNATING BENEFICIARY: DEATH OF BENEFICIARY.
If no designated Beneficiary survives the Participant, the Participant's
entire Vested Interest shall be distributed to the Participant's spouse, if
living and reasonably able to be located, otherwise the Participant's entire
Vested Interest shall be paid to the executor or administrator of the
Participant's estate.
ARTICLE 8
LOANS
8.1 LOANS TO PARTICIPANTS.
The Plan Administrator may make a bona fide loan to a Participant, in the
amount which, when added to the outstanding balance of all other loans to the
Participant from all qualified plans of the Employer, does not exceed the lesser
of $50,000 reduced by the excess of the Participant's highest outstanding loan
balance during the 12 months preceding the date on which the loan is made over
the outstanding loan balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account.
8.2 LOAN TERMS AND CONDITIONS.
<PAGE>
The loan shall be made under such terms, security interest, and conditions
as the Plan Administrator deems appropriate; provided, however, that all loans
granted hereunder: (a) are available to all Participants and Beneficiaries, who
are parties-in-interest pursuant to Section 3(14) of ERISA, on a reasonably
equivalent basis; (b) are not made available to Highly Compensated Employees on
a basis greater than the basis made available to other employees; (c) bear a
reasonable rate of interest; (d) are adequately secured; and (e) are made in
accordance with and subject to all of the provisions of this Article. Loan
repayments may be suspended under this Plan as permitted under Section 414(u) of
the Code.
8.3 LOAN PROCEDURES.
The Plan Administrator shall establish a written set of procedures, set
forth in the summary plan description, by which all loans will be administered.
Such rules, which are incorporated herein by reference, will include, but not be
limited to, the following: (a) the person or persons authorized to administer
the loan program, identified by name or position; (b) the loan application
procedure; (c) the basis for approving or denying loans; (d) any limits on the
types of loans permitted; (e) the procedure for determining a "reasonable"
interest rate; (f) acceptable collateral; (g) default conditions; and (h) steps
which will be taken to preserve Plan assets in the event of a default.
ARTICLE 9
DISTRIBUTION OF BENEFITS
9.1 DISTRIBUTIONS IN GENERAL.
All distributions hereunder shall be made as of the date specified, in
accordance with the requirements of Article 10.
<PAGE>
9.2 TIMING OF DISTRIBUTION.
The rules and procedures for electing the timing effective for each
Participant or Beneficiary shall be formulated and administered by the Plan
Administrator in a consistent manner for all Participants in similar
circumstances. If the Administrator elects for a Plan Year, distributions to
Participants may commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the regulations under the Code is given; provided that
no such distribution to a Participant shall be made unless (1) the Participant
is informed that he has the right for a period of at least 30 days after
receiving the notice to consider whether or not to consent to a distribution (or
a particular distribution option), and (2) the Participant affirmatively elects
to receive a distribution after receiving the notice.
9.3 FORM OF DISTRIBUTION.
The distribution shall be made in the form of a lump sum in cash.
9.4 DEFERRAL ELECTION.
The Participant may make a written election prior to the receipt of the
payment and prior to incurring a one- year Break in Service to defer such
payment for a specified period of time ending no later than the Participant's
Normal Retirement Date. If such election to defer is made and payment is not
made prior to the Participant's one year Break in Service, all benefits shall be
deferred to the Participant's Normal Retirement Date, unless an earlier
distribution is elected.
If the Participant's Vested Interest exceeds $5,000 ($3,500 for
distributions made prior to 1998) and distribution is to occur before he attains
age 62, the Participant must consent to the distribution before it may be made.
Notwithstanding the foregoing paragraphs, if the Participant's Vested
Interest is $3,500 or less, the distribution shall be made upon Termination of
Employment.
9.5 PAYMENT OF BENEFITS.
<PAGE>
The payment of benefits under this Plan to the Participant shall be made
not later than the 60th day after the close of the Plan Year in which the later
of (a) or (b), below, occurs:
(a) The date on which the Participant attains his Normal Retirement Age;
or
(b) The date on which the Participant terminates his Service (including
Termination of Employment, death or Disability) with the Employer; provided,
however, that in no event shall distribution of that portion of a Participant's
Account attributable to 401(k) Savings Contributions, Matching Contributions or
Fail Safe Contributions be made prior to the earliest of the Participant's
Retirement, death, Disability or Termination of Employment, unless such
distribution is made on account of (i) the Employer's sale of its interest in a
subsidiary and the Participant continues employment with the subsidiary; or
(ii) the Employer's sale of substantially all assets used in its trade or
business and the Participant continues employment with the employer acquiring
such assets; or (iii) the termination of the Plan, as provided in Article 14,
without the establishment of a successor plan pursuant to Code Section
401(k)(10)(A)(i) and the regulations thereunder within the period ending 12
months after distribution of all assets from the Plan.
9.6 COMMENCEMENT OF DISTRIBUTIONS FOR PARTICIPANTS AGED 70-1/2.
Notwithstanding the provisions of the preceding Payment of Benefits
Section, distribution to a Participant who either (1) has terminated Service or
(2) is a "5% owner" (as defined in Section 416(i)(1)(B)(i) of the Code) must be
made no later than the first day of April following the calendar year in which
he attains age 70-1/2 and must be made in accordance with the regulations under
Section 401(a)(9) of the Code, including Section 1.401(a)(9)-2. Distributions
must be made to any other Participant who attains age 70 1/2 prior to January 1,
1999, only to the extent required under Sections 401(a)(9)
<PAGE>
and 411(d)(6) of the Code and the regulations thereunder.
9.7 DISTRIBUTION ON TERMINATION OF EMPLOYMENT.
Following a Participant's Termination of Employment, he shall be entitled
to receive a distribution of his entire Vested Interest.
9.8 DISTRIBUTION ON NORMAL RETIREMENT.
A Participant who attains his Normal Retirement Age shall have a Vesting
Percentage of 100%. If a Participant retires from the active Service of the
Employer on his Normal Retirement Date, he shall receive a distribution of the
entire value of his Participant's Account following his Normal Retirement Date.
9.9 DISTRIBUTION ON LATE RETIREMENT.
A Participant may continue in the Service of the Employer after his Normal
Retirement Age, and in such event he shall retire on his Late Retirement Date.
Such Participant shall continue as a Participant under this Plan until such Late
Retirement Date. The Participant shall have a Vesting Percentage of 100% and
shall receive a distribution of the entire value of his Participant's Account
following his Late Retirement Date.
9.10 DISTRIBUTION ON DISABILITY RETIREMENT.
A Participant who retires from the Service of the Employer on account of
Disability shall have a Vesting Percentage of 100% and shall receive a
distribution of the entire value of his Participant's Account following his
Disability Retirement Date.
9.11 DEATH DISTRIBUTION.
If a Participant dies prior to his commencement of benefits, his entire
interest will be distributed no later than five years after such Participant's
death.
9.12 ALTERNATE PAYEE SPECIAL DISTRIBUTION.
Distributions may be made to an alternate payee pursuant to a "qualified
domestic relations order" as defined in ERISA at any time after the Participant
reaches
<PAGE>
age 50 without regard to the employment status of the Participant. Any such
distribution must be in a lump sum.
9.13 DIRECT ROLLOVER ELECTION.
If a distribution of a Participant's Vested Interest occurs after December
31, 1992, and is neither one or a series of annual installments over a period of
ten years (or more) nor the minimum amount required to be distributed pursuant
to Section 9.6, the Administrator shall notify the Participant (or any spouse or
former spouse who is his alternate payee under a "qualified domestic relations
order" (as defined in Section 414(p) of the Code)) of his right to elect to have
the distribution paid directly to an individual retirement account or annuity, a
qualified defined contribution plan or a qualified annuity plan. If such
distribution is to be made to the Participant's surviving spouse, the
Administrator shall notify the surviving spouse of his right to elect to have
the distribution paid directly to an individual retirement account or annuity.
Any election under this Section 9.13 shall be made and effected in accordance
with such rules and procedures as may be established from time to time by the
Administrator in order to comply with Section 401(a)(31) of the Code.
ARTICLE 10
IN-SERVICE WITHDRAWALS
10.1 WITHDRAWAL OF MATCHING CONTRIBUTIONS, PROFIT SHARING CONTRIBUTIONS OR
FAIL-SAFE CONTRIBUTIONS NOT ALLOWED.
Withdrawals of Matching Contributions, Profit Sharing Contributions, or
Fail-Safe Contributions prior to the attainment of age 59 1/2 are not allowed
under this Plan.
10.2 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS FOR SERIOUS FINANCIAL
<PAGE>
HARDSHIP.
In the event a Participant suffers a Serious Financial Hardship, such
Participant may withdraw a portion of his Participant Account attributable to
his Rollover Contributions to meet such need, provided such withdrawal cannot
exceed the amount required to meet the immediate financial need created by the
Serious Financial Hardship. Such Serious Financial Hardship must be shown by
positive evidence submitted to the Plan Administrator that the hardship is of
sufficient magnitude to impair the Participant's financial security.
Withdrawals shall be determined in a consistent and nondiscriminatory manner,
and shall not affect the Participant's right under the Plan to make additional
withdrawals or to continue to be a Participant.
10.3 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF 401(k) SAVINGS CONTRIBUTIONS.
In the event a Participant suffers a Serious Financial Hardship, such
Participant may withdraw a portion of his Participant's Account attributable to
401(k) Savings Contributions (but not any income attributable thereto), provided
the withdrawal satisfies the following conditions:
(a) DETERMINATION OF FINANCIAL NEED. A determination shall be made that
the Participant has an immediate and heavy financial need if the hardship is
caused by one or more of the following: (i) medical expenses described in
Section 213(d) of the Code previously incurred by the Participant, the
Participant's spouse, or any of the Participant's dependents (as defined in
Section 152 of the Code) or the distribution is necessary for these persons to
obtain such medical care; (ii) payment of tuition and related educational fees
for the next twelve (12) months of post-secondary education for the Participant,
his spouse, his children or dependents; (iii) costs directly related to the
purchase of a principal residence for the Participant (excluding mortgage
payments); or (iv) the need to prevent eviction of the Participant from or the
foreclosure
<PAGE>
on the mortgage of the principal residence of the Participant.
(b) WITHDRAWAL NECESSARY TO MEET NEED. To the extent the amount of the
withdrawal requested does not exceed the amount required to relieve the
Participant's financial need, and such need cannot be satisfied from some other
resources that are reasonably available, a withdrawal will be considered
necessary to satisfy an immediate and heavy financial need of the Participant if
one of the following conditions are met: either (1) the Participant must
represent to the Plan Administrator in writing that the need cannot be met by
insurance, reasonable liquidation of assets (not itself creating hardship),
cessation of 401(k) Savings Contributions, other distributions or loans from
plans (including this Plan) maintained by the Employer or any other employer, or
borrowing from commercial sources on reasonable commercial terms, or (2) the
Participant must have obtained all withdrawals, other than for Serious Financial
Hardship, and all nontaxable loans currently available under all plans
maintained by the Employer; the Participant will be suspended from making 401(k)
Saving Contributions to the Plan and any other plan maintained by the Employer
for 12 months following receipt of the Serious Financial Hardship withdrawal;
and, in the taxable year immediately following the taxable year of the Serious
Financial Hardship withdrawal, the Participant will be precluded from making any
401(k) Savings Contributions in excess of the maximum allowable elective
deferral amount described in Section 402(g) of the Code reduced by the amount of
the Participant's 401(k) Savings Contributions for the taxable year of the
Serious Financial Hardship withdrawal. The amount necessary to relieve the
financial need may include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution.
10.4 NOTIFICATION.
The Participant shall notify the Administrator in writing of his election
to make a withdrawal under the provisions of this Article 10. Such election
shall be effective as of
<PAGE>
the date specified in such notice, which date must be at least fifteen days
after such notice is received by the Administrator. Payment of the withdrawal
shall be subject to satisfaction of all of the conditions of withdrawal and the
timing of such payment shall be set by the Administrator.
10.5 TAXES AND PENALTIES ARE RESPONSIBILITY OF PARTICIPANT.
In the event that any taxes or penalties are assessed by the IRS, or any
state or local taxing authority by reason of the withdrawal, the Participant
shall be solely responsible for the same.
10.6 NO REPAYMENT ALLOWED.
Hardship withdrawals under this Article may not be repaid by a Participant
into his Participant's Account.
10.7 WITHDRAWAL AFTER AGE 59-1/2.
A Participant who has attained age 59-1/2, may elect to withdraw from his
Participant's Account, once each Plan Year, an amount which is equal to any
whole percentage (not exceeding 100%) of the balance in his Participant's
Accounts attributable to: 401(k) Savings Contributions, Matching Contributions,
Rollover Contributions and Fail-Safe Contributions (including total earnings
thereon).
10.8 WITHDRAWAL AFTER ATTAINMENT OF NORMAL RETIREMENT AGE.
A Participant who has attained his Normal Retirement Age (and continues in
Service) may elect to withdraw once each Plan Year an amount equal to any whole
percentage (not exceeding 100%) of the balance in his Participant's Account. A
Participant who make an election under this Section 10.8 shall continue to
participate in the Plan.
ARTICLE 11
FIDUCIARY DUTIES AND RESPONSIBILITIES
<PAGE>
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT.
Each fiduciary of the Plan shall discharge his duties hereunder solely in
the interest of the Participants and their Beneficiaries and for the exclusive
purpose of providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan. Each fiduciary shall
act with the care, skill, prudence and diligence under the circumstances that a
prudent man acting in a like capacity and familiar with such matters would use
in conducting an enterprise of like character and with like aims, in accordance
with the documents and instruments governing this Plan, insofar as such
documents and instruments are consistent with this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES.
Any person or group of persons may serve in more than one Fiduciary
capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY.
Nothing in this Plan shall be construed to prevent any Fiduciary from
receiving any benefit to which he may be entitled as a Participant or
Beneficiary in this Plan, so long as the benefit is computed and paid on a basis
which is consistent with the terms of this Plan as applied to all other
Participants and Beneficiaries. Nor shall this Plan be interpreted to prevent
any Fiduciary from receiving any reasonable compensation for services rendered,
or for the reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan; except that no Person so serving who
already receives full-time pay from an Employer shall receive compensation from
this Plan, except for reimbursement of expenses properly and actually incurred.
<PAGE>
ARTICLE 12
THE ADMINISTRATOR
12.1 DESIGNATION OF ADMINISTRATOR.
The Employer shall designate a person or persons to serve as Administrator
under the Plan and such person or persons shall act in accordance with the terms
of the Plan. In the absence of such designation by the Employer, the Employer
shall be deemed to be the Administrator.
12.2 DUTIES AND AUTHORITY.
The Administrator shall administer the Plan in a nondiscriminatory manner
for the exclusive benefit of Participants and their Beneficiaries. The
Administrator shall perform all such duties as are necessary to operate,
administer, and manage the Plan in accordance with the terms thereof, including
but not limited to the following:
(a) To determine all questions relating to a Participant's coverage under
the Plan;
(b) To maintain all necessary records for the administration of the Plan;
(c) To compute and authorize the payment of benefits to eligible
Participants and Beneficiaries;
(d) To interpret and construe the provisions of the Plan and to make rules
and guidelines which are not inconsistent with the terms thereof: and
(e) To advise or assist Participants regarding any rights, benefits, or
elections available under the Plan.
The Administrator shall take all such actions as are necessary to operate,
administer, and manage the Plan as a retirement program which is at all times in
full compliance with any law or regulation affecting this Plan.
<PAGE>
The Administrator may allocate certain specified duties of Plan
administration to an individual or group of individuals who, with respect to
such duties, shall have all reasonable powers necessary or appropriate to
accomplish them.
12.3 EXPENSES AND COMPENSATION.
All expenses of administration may be paid out of Plan assets unless paid
by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability
of the Plan. However, the Employer may reimburse the Plan for any
administration expense incurred. Nothing shall prevent the Administrator from
receiving reasonable compensation for services rendered in administering this
Plan, unless the Administrator already receives full-time pay from any Employer
adopting the Plan.
12.4 INFORMATION FROM EMPLOYER:
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to this Plan as the Administrator may require.
12.5 ADMINISTRATIVE COMMITTEE: MULTIPLE SIGNATURES.
In the event that more than one person has been duly nominated to serve on
the Administrative Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more persons may be accepted by an
interested party as conclusive evidence that the Administrative Committee has
duly authorized the action therein set forth and as representing the will of and
binding upon the whole Administrative Committee. No person receiving such
documents or written instructions and acting in good faith and reliance thereon
shall be obliged to ascertain the validity of such action under the terms of
this Plan. The Administrative Committee shall act by a
<PAGE>
majority of its members at the time in office and such action may be taken
either by a vote at a meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL: APPOINTMENT OF SUCCESSOR.
The Administrator, or any member of the Administrative Committee, may
resign at any time by delivering to the Employer a written notice of
resignation, to take effect at a date specified therein, which shall not be less
than 30 days after the delivery thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or removal of
the Administrator, shall promptly designate a successor Administrator who must
signify acceptance of this position in writing. In the event no successor is
appointed, the Board of Directors of the Employer will function as the
Administrative Committee until a new Administrator has been appointed and has
accepted such appointment.
12.7 INVESTMENT MANAGER.
The Administrator may appoint, in writing, an Investment Manager or
Managers to whom is delegated the authority to manage, acquire, invest or
dispose of all or any part of the Plan assets. With regard to the assets
entrusted to his care, the Investment Manager shall provide written instructions
and directions to the Employer, who shall in turn be entitled to rely upon such
written direction. This appointment and delegation shall be evidenced by a
signed written agreement.
12.8 DELEGATION OF DUTIES.
The Administrator shall have the power, to the extent permitted by law, to
delegate the performance of such Fiduciary and non-Fiduciary duties,
responsibilities and functions as the Administrator shall deem advisable for the
proper management and administration of the Plan in the best interests of the
Participants and their Beneficiaries.
<PAGE>
ARTICLE 13
BENEFITS CLAIM PROCEDURE
13.1 FILING A CLAIM FOR BENEFITS.
A Participant or Beneficiary or the Employer acting in his behalf, shall
notify the Administrator of a claim of benefits under the Plan. Such request
shall be in writing to the Administrator and shall set forth the basis of such
claim and shall authorize the Administrator to conduct such examinations as may
be necessary to determine the validity of the claim and to take such steps as
may be necessary to facilitate the payment of any benefits to which the
Participant or Beneficiary may be entitled under the terms of the Plan.
A decision by the Administrator shall be made promptly and not later than
90 days after the Administrator's receipt of the claim of benefits under the
Plan, unless special circumstances require an extension of the time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than 180 days after the initial receipt of the claim of benefits.
13.2 DENIAL OF CLAIM.
Whenever a claim for benefits by any Participant or Beneficiary has been
denied by a Plan Administrator, a written notice, prepared in a manner
calculated to be understood by the Participant, must be provided, setting forth
(1) the specific reasons for the denial; (2) the specific reference to pertinent
Plan provisions on which the denial is based; (3) a description of any
additional information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (4) an
explanation of the Plan's claim review procedure.
13.3 REMEDIES AVAILABLE FOR DENIAL OF CLAIM.
<PAGE>
Upon receipt of notice of denial of a claim, a Participant or Beneficiary
may (1) request a review by a named Fiduciary, other than the Administrator,
upon written application to the Plan; (2) review pertinent Plan documents; and
(3) submit issues and comments in writing to a named Fiduciary. A Participant
or Beneficiary shall have 60 days after receipt by the claimant of written
notification of a denial of a claim to request a review of a denied claim.
A decision by a named Fiduciary shall be made promptly and not later than
80 days after the named Fiduciary's receipt of a request for review, unless
special circumstances require an extension of the time for processing, in which
case a decision shall be rendered as soon as possible, but not later then 120
days after receipt of a request for review. The decision shall be written in a
manner calculated to be understood by the claimant, with specified references to
the pertinent Plan provisions on which the decision is based.
A Participant or Beneficiary shall be entitled, either in his own name or
in conjunction with any other interested parties, to bring such actions in law
or equity or to undertake such administrative actions or to seek such relief as
may be necessary or appropriate to compel the disclosure of any required
information, to enforce or protect his rights, to recover present benefits due
to him or to clarify his rights to future benefits under the Plan.
13.4 LIMITATION OF RIGHTS.
Participation hereunder shall not grant any Participant the right to be
retained in the Service of the Employer or any other rights or interest in the
Plan other than those specifically herein set forth.
13.5 MERGERS OR TRANSFERS.
In the case of any merger or consolidation with or transfer of assets or
liabilities of the Plan to any other qualified plan, the following conditions
must be met:
<PAGE>
(a) The sum of the account balances in each plan shall equal the fair
market value (determined as of the date of the merger or transfer as if the
plans had then terminated) of the entire plan assets.
(b) The assets of each plan shall be combined to form the assets of the
plan as merged (or transferred).
(c) Immediately after the merger (or transfer), each Participant in the
plan merged (or transferred) shall have an account balance equal to the sum of
the account balances the Participant had in the plans immediately prior to the
merger (or transfer).
(d) Immediately after the merger (or transfer), each Participant in the
plan merged (or transferred) shall be entitled to the same optional benefit form
as he was entitled to immediately prior to the merger (or transfer).
In the case of any merger or consolidation with or transfer of assets or
liabilities to any defined benefit plan, one of the plans before such merger,
consolidation, or transfer shall be converted into the other type of plan and
either the rules described above, applicable to the merger of two defined
contribution plans, or the rules applicable to the merger of two defined benefit
plans, as appropriate, shall be applied.
ARTICLE 14
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF THE PLAN.
USCS International, Inc. shall have the right from time to time to modify
or amend, in whole or in part, any or all provisions of the Plan by adoption of
a resolution by the Board of Directors. Notwithstanding the above, any
amendment of the Plan that is not reasonably anticipated to result in a
significant additional cost to the Employers,
<PAGE>
or which is necessary to ensure compliance with applicable provisions of the
Code and ERISA, may be adopted by the Director of Benefits Administration of
USCS International, Inc., by a written instrument. Upon any such modification
or amendment, the Administrator and all Employers shall be furnished a copy
thereof.
No amendment shall deprive any Participant or Beneficiary of any Vested
Interest hereunder. Furthermore, no amendment to the Plan shall have the effect
of decreasing a Participant's Vested Interest determined without regard to such
amendment as of the later of the date such amendment is adapted or the date it
becomes effective.
Any participant having not less than three Years of Service shall be
permitted to elect, in writing, to have his Vesting Percentage computed under
the Plan without regard to such amendment. Such written election by a
Participant shall be made to the Administrator. The period during which the
election must be made by the Participant shall begin no later than after the
latest of the following dates: (a) the date which is 60 days after the day the
amendment is adopted; or (b) the date which is 60 days after the day the
amendment becomes effective; or (c) the date which is 60 days after the day the
Participant is issued written notice of the amendment by the Employer or
Administrator.
No amendment to the Plan shall decrease a Participant's Account balance or
eliminate an optional form of distribution.
14.2 CONDITIONS OF AMENDMENT.
The Employer shall not make any amendment which would cause the Plan to
lose its status as a qualified plan within the meaning of Section 401(a) of the
Code.
14.3 TERMINATION OF THE PLAN.
The Employer intends to continue the Plan indefinitely for the benefit of
its Employees, but reserves the right to terminate the Plan at any time by
resolution of its
<PAGE>
Board of Directors. Upon such termination, the liability of the Employer to
make contributions hereunder shall terminate.
14.4 FULL VESTING.
Upon the termination of the entire Plan, or upon full or partial
termination of the Profit Sharing portion of the Plan, or upon complete
discontinuance of all Employer contributions, the rights of all affected
Participants in and to the amounts credited to each such Participant's Account
shall be 100% vested and nonforfeitable.
14.5 DISTRIBUTIONS UPON PLAN TERMINATION.
If this Plan is terminated and the Employer does not maintain or establish
another defined contribution plan, pursuant to Code Section 401(k)(10)(A)(i),
each Participant shall receive a total distribution, in the form of a lump-sum
distribution as defined in Code Section 401(k)(10)(b)(ii), of his Participant's
Account in accordance with the terms and conditions of Article S.
However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above paragraph,
or if the Plan is only partially terminated, each Participant shall receive a
total distribution of his Participant's Account, excluding any amounts
attributable to 401(k) Savings Contributions and contributions made by the
Employer designated as Fail-Safe Contributions in accordance with the terms and
conditions of Article 9. In such a situation, any amounts in a Participant's
Account attributable to 401(k) Savings Contributions and contributions made by
the Employer designated as Fail-Safe Contributions may be distributed only upon
the occurrence of an event described in Article 9.
No Participant consent will be required for a distribution where no
successor plan exists. However, if the Employer does maintain a successor plan,
Participant consent is required for a distribution exceeding $3,500. The
Participant's Account will be
<PAGE>
transferred to such successor plan if the required consents are not received.
14.6 APPLICATION OF FORFEITURES.
Upon the termination of the Plan, any Forfeitures which have not been
allocated as of such termination shall be allocated and credited in the manner
described in Paragraph 3.7.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE.
Notwithstanding any other provisions of this Plan, the Employer's adoption
of this Plan is subject to the condition precedent that the Employer's Plan
shall be approved and qualified by the Internal Revenue Service as meeting the
requirements of Section 401(a) of the Internal Revenue Code. In the event the
Plan initially fails to qualify and the Internal Revenue Service issues a final
ruling that the Employer's Plan fails to so qualify as of the Effective Date,
all liability of the Employer to make further contributions hereunder shall
cease. The Plan Administrator and any other named Fiduciary shall be notified
immediately by the Employer, in writing, of such failure to qualify. Upon such
notification, (i) amounts attributable to 401(k) Savings Contributions, Matching
Contributions, and Profit Sharing Contributions shall be returned in cash to the
Employer which shall pay such amounts (less applicable taxes and withholding) as
compensation to the Participant; (ii) amounts attributable to Fail-Safe
Contributions shall be returned to the Employer and the Participant shall have
no rights thereto or therein; and (iii) amounts attributable to Rollover
Contributions shall be returned directly to the Participants.
14.8 SUBSEQUENT UNFAVORABLE DETERMINATION.
If the Employer is notified subsequent to initial favorable qualification
that the Plan is no longer qualified within the meaning of Section 401(a) of the
Internal Revenue Code, and if the Employer shall fail within a reasonable time
to make any necessary changes in order that the Plan shall so qualify, the
Participant's Accounts shall be fully
<PAGE>
vested and nonforfeitable and shall be disposed of as if the Plan had
terminated.
ARTICLE 15
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS.
Subject to the provisions of Paragraph 13.5, the Employer may substitute an
individually designed plan or master or prototype plan for this Plan without
terminating this Plan as embodied herein and this shall be deemed to constitute
an amendment and restatement in its entirety of this Plan as heretofore adopted
by the Employer; provided, however, that the Plan as restated meets the
requirements of Section 401(a) of the Internal Revenue Code and ERISA.
15.2 TRANSFER OF ASSETS.
Upon 90 days written notification from the Employer (unless the Trustee
shall accept a shorter period of notification) that a different plan meeting the
requirements set forth in Paragraph 15.1 above has been executed and entered
into by the Administrator and the Employer, and after the Trustee has been
furnished the Employer's certification in writing that the Employer intends to
continue the Plan as a qualified Plan under Section 401(a) of the Internal
Revenue Code and ERISA, the Trustee shall transfer the value of all
Participants' Accounts to the Employer or such person or persons as may be
entitled to receive the same. The Trustee may rely fully on the representations
or directions of the Employer with respect to any such transfer and shall be
fully protected and discharged with respect to any such transfer made in
accordance with such representations, instructions or directions.
<PAGE>
ARTICLE 16
MISCELLANEOUS
16.1 NON-REVERSION.
This Plan has been established by the Employer for the exclusive benefit of
the Participants and their Beneficiaries. Except as otherwise provided in
Paragraphs 14.7 and 16.6, under no circumstances shall any funds contributed
hereunder, at any time, revert to or be used by the Employer; nor shall any such
funds or assets of any kind be used other than for the benefit of the
Participants or their Beneficiaries except as provided in a "qualified domestic
order", as defined in Code Section 414(p) and ERISA (29 USC 1056(d)).
16.2 REFERENCE TO THE CODE AND ERISA.
Any reference to any Section of the Internal Revenue Code, ERISA or to any
other statute or law shall be deemed to include any successor law of similar
import.
16.3 GOVERNING LAW.
The Plan shall be governed and construed in accordance with the laws of the
State of California to the extent that such laws have not been preempted and
superseded by ERISA.
16.4 COMPLIANCE WITH THE CODE AND ERISA.
This Plan is intended to comply with all requirements for qualification
under the Internal Revenue Code and ERISA, and if any provision hereof is
subject to more than one interpretation or any term used herein is subject to
more than one construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being so
qualified. If any provision of the Plan is held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions,
<PAGE>
and this Plan shall be construed and enforced as if such provision had not been
included.
16.5 NON-ALIENATION: QUALIFIED DOMESTIC RELATIONS ORDERS.
It is a condition of the Plan, and all rights of each Participant shall be
subject thereto, that no right or interest of any Participant in the plan shall
be assignable or transferable in whole or in part, either directly or by
operation of law or otherwise, including, but without limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no
right or interest of any Participant in the Plan shall be liable far or subject
to any obligation or liability of such Participant; except that the
Participant's Account may be segregated and distributed pursuant to a "qualified
domestic relations order" within the meaning of Internal Revenue Code Section
414(p) and ERISA 29 USC 1056(d). The Plan Administrator shall establish
procedures for determining if an order is a "qualified domestic relations order"
within the meaning of Code Section 414(p) and ERISA Section 1056(d) (29 USC
1056(d)).
16.6 CONTRIBUTION RECAPTURE.
Notwithstanding any other provisions of this Plan, (1) in the case of a
contribution which is made by an Employer by a mistake of fact, Paragraph 16.1
shall not prohibit the return of such contribution to the Employer within one
year after the payment of the contribution, and (2) if a contribution is
conditioned upon the deductibility of the contribution under Section 404 of the
Code, then, to the extent the deduction is disallowed, Paragraph 16.1 shall not
prohibit the return to the Employer of such contribution (to the extent
disallowed) within one year after the disallowance of the deduction. The amount
which may be returned to the Employer is the excess of (1) the amount
contributed over (2) the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction. Earnings
attributable to the excess contribution may not be returned to the Employer, but
losses
<PAGE>
attributable thereto must reduce the amount to be so returned. Furthermore, if
the withdrawal of the amount attributable to the mistaken contribution would
cause the balance of the individual account of any Participant to be reduced to
less than the balance which would have been in the account had the mistaken
amount not been contributed, then the amount to be returned to the Employer
would have to be limited so as to avoid such reduction.
16.7 "TOP HEAVY" CONTINGENCY PROVISIONS.
(a) The provisions of this Paragraph 16.7 are included in the Plan
pursuant to Section 401(a)(10)(B)(ii) of the Code and shall become applicable
only if the Plan becomes a "top-heavy plan" under Section 416(g) of the Code for
any Plan Year.
(b) The determination as to whether the Plan becomes "top-heavy" for any
Plan Year shall be made as of the last day of the immediately preceding Plan
Year by considering the Plan together with the ESOP. The Plan (and the ESOP)
shall be "top-heavy" only if the total of the account balances under the Plan
and the ESOP for 'key employees" as of the determination date exceeds 60% of the
total of the account balances for all Participants. For such purposes, account
balances shall be computed and adjusted pursuant to Section 416(g) of the Code.
"Key employees" shall be certain Participants (who are officers or shareholders
of the Employer) and Beneficiaries described in Section 416(i)(1) or (5) of the
Code.
(c) For any Plan Year in which the Plan is "top-heavy", each Participant
who is an Employee on the last day of the Plan Year (and who is not a "key
employee") shall receive a minimum allocation of Employer contributions which is
equal to the lesser of:
(1) 3% of his Statutory Compensation; or
(2) the same percentage of his Statutory Compensation as the
allocation to "key employees" for whom the percentage is the highest for that
Plan Year. For this purpose, the allocation to the "key employee" shall include
any ESOP
<PAGE>
contributions, any 401(k) Savings Contributions, Matching Contributions, and any
Profit Sharing Contributions, but shall not include any Rollover Contributions.
(d) For any Plan Year in which the Plan is "top-heavy," Statutory
Compensation of each Employee for purposes of the Plan shall not take into
account any amount in excess of $160,000, as adjusted for increases in the cost
of living pursuant to Section 401(a)(17)(B) of the Code.
(e) As of the first day of any Plan Year in which the Plan has become
"top-heavy," the vesting schedule in Paragraph 5.3 shall be amended (with
respect to any Employee who is credited with at least one Hour of Service after
the Plan has become "top-heavy") to read as follows:
Nonforfeitable
Vesting
Years of Service Percentage
---------------- --------------
Less than 2 years 0%
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 or more years 100%
If the Plan ceases to be "top-heavy," the vesting schedule of Participant's
Account of a Participant who, at that time, has less than three Years of Service
shall thereafter be determined under the vesting schedule in Article 5 instead
of the vesting schedule set forth above, except that his nonforfeitable
percentage shall not be reduced below the nonforfeitable percentage that he had
at the time the Plan ceased to be "top-heavy". If the Plan ceases to be
"top-heavy", the vesting schedule of a Participant who, at that time, has three
or more Years of Service shall continue to be determined under the vesting
schedule in this Paragraph 16.7(e) rather than Paragraph 5.3
<PAGE>
ARTICLE 17
TRUST AGREEMENT
17.1 CREATION AND ACCEPTANCE OF TRUST.
The Trustee, by joining in the execution of the Plan and trust agreement,
accepts the Trust hereby created and agrees to act in accordance with the
express terms and conditions herein stated.
17.2 TRUSTEE CAPACITY; CO-TRUSTEES.
The Trustee may be a bank, trust company or other corporation possessing
trust powers under applicable state or federal law or one or more individuals or
any combination thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate specific
responsibilities, obligations or duties among themselves. An original copy of
such written agreement is to be delivered to the Administrator.
17.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
Any Trustee may resign at any time by delivering to the Administrator a
written notice of resignation, to take effect at a date specified therein, which
shall not be less than 30 days after the delivery thereof, unless such notice
shall be waived.
The Trustee may be removed with or without cause by the Board of Directors
by delivery of a written notice of removal, to take effect at a date specified
therein, which shall not be less than 30 days after delivery thereof, unless
such notice shall be waived.
In the case of the resignation or removal of a Trustee, the Trustee shall
have the right to a settlement of its account, which may be made, at the option
of the Trustee,
<PAGE>
either (1) by judicial settlement in an action instituted by the Trustee in a
court of competent jurisdiction, or (2) by written agreement of settlement
between the Trustee and the Administrator.
Upon such settlement, all right, title and interest of such Trustee in the
assets of the Trust and all rights and privileges under this Agreement therefore
vested in such Trustee shall vest in the successor Trustee, and thereupon all
future liability of such Trustee shall terminate; provided, however, that the
Trustee shall execute, acknowledge and deliver all documents and written
instruments which are necessary to transfer and convey the right, title and
interest in the Trust assets, and all rights and privileges to the successor
Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee, whose
appointment is subject to acceptance of this Trust in writing and shall notify
in writing the Administrator of such successor Trustee.
17.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE.
The Trustee shall deduct from and charge against the Trust fund any taxes
paid by it which may be imposed upon the Trust fund or the income thereof or
which the Trustee is required to pay with respect to the interest of any person
therein.
The Trustee shall be paid such reasonable compensation as shall from time
to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust fund unless paid or advanced by the Employer.
17.5 TRUSTEE ENTITLED TO CONSULTATION.
<PAGE>
The Trustee shall be entitled to advice of counsel, which may be counsel
for the Plan or the Employer, in any case in which the Trustee shall deem such
advice necessary. With the exception of those powers and duties specifically
allocated to the Trustee by the express terms of this Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan or Trust and
the Trustee may request, and is entitled to receive guidance and written
direction from the Administrator on any point requiring construction or
interpretation of the Plan documents.
17.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE.
The Trustee shall have the following rights, powers, and duties:
(a) The Trustee shall be responsible for the safekeeping and administering
of the assets of this Plan and Trust in accordance with the provisions of this
Agreement and any amendments thereto. The duties of the Trustee under this
Agreement shall be determined solely by the express provisions of this Agreement
and no further duties or responsibility shall be implied. Subject to the terms
of this Plan and Trust, the Trustee shall be fully protected and shall incur no
liability in acting in reliance upon the written instructions or directions of
the Administrator or any other named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for the
orderly and efficient performance of its duties hereunder, including but not
limited to those specified in this section. The Trustee may appoint one or more
administrative agents or contract for the performance of such administrative and
service functions as it may deem necessary for the effective implementation and
operation of the Plan and Trust.
(c) The Trustee shall have the power to collect and receive any and all
monies and other property due hereunder and to give full discharge and
acquaintance therefor; to settle, compromise or submit to arbitration any
claims, debits or damages due or owing to or from the Trust; to commence or
defend its suits or legal proceedings wherever, in its judgment, any interest of
the Trust requires it; and to represent the
<PAGE>
Trust in all suits or legal proceedings in any court of law or equity or before
any other body or tribunal. It shall have the power generally to do all acts,
whether or not expressly authorized, which the Trustee in the exercise of its
Fiduciary responsibility may deem necessary or desirable for the protection of
the Trust and the assets thereof.
(d) The Trustee may temporarily hold cash balances and shall be entitled
to deposit any such funds received in a bank account or bank accounts in the
name of the Trust in any Bank or Banks selected by the Trustee, including the
banking department of the Trustee, pending disposition of such funds in
accordance with the Trust. Any such deposit may be made with or without
interest.
(e) The Trustee shall deal with any assets of this Trust held or received
under this Plan only in accordance with the written directions from the
Administrator. The Trustee shall be under no duty to determine any facts or the
propriety of any action taken or omitted by it in good faith pursuant to
instructions from the Administrator.
(f) If the whole or any part of the Trust shall become liable for the
payment of any estate, inheritance, income or other tax which the Trustee shall
be required to pay, the Trustee shall have full power and authority to pay such
tax out of any monies or other property in its hands for the account of the
person whose interest hereunder is so liable. Prior to making any payment, the
Trustee may require such releases or other documents from any lawful taxing
authority as it shall deem necessary. The Trustee shall not be liable for any
nonpayment of tax when it distributes an interest hereunder on instructions from
the Administrator.
(g) The Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Administrator shall have the right to
examine at any time during the Trustee's regular business hours. Following the
close of the fiscal year of the Trust, or as soon as practical thereafter, the
Trustee shall furnish the Administrator with a statement of account. This
account shall set forth all receipts,
<PAGE>
disbursements and other transactions effected by the Trustee during said year.
The Administrator shall promptly notify the Trustee in writing of its
approval or disapproval of the account. The Administrator's failure to
disapprove the account within 60 days after receipt shall be considered an
approval. The approval by the Administrator shall be binding as to all matters
embraced in any statement to the same extent as if the account of the Trustee
had been settled by judgment or decree of a court of competent jurisdiction
under which the Trustee, Administrator, Employer and all persons having or
claiming any interest in the Trust were parties; provided, however, that the
Trustee may have its account judicially settled if it so desires.
(h) If, at any time, there shall be a dispute as to the person to whom
payment or delivery of monies or property should be made by the Trustee, or
regarding any action to be taken by the Trustee, the Trustee may postpone such
payment, delivery or action, retaining the funds or property involved in a court
of competent jurisdiction or the Trustee shall have been indemnified to its
satisfaction or until it has received written direction from the Administrator.
(i) Anything in this instrument to the contrary notwithstanding, it shall
be understood that the Trustee shall have no duty or responsibility with respect
to the determination of matters pertaining to the eligibility of any Employee to
become or remain a Participant hereunder, all such responsibilities being vested
in the Administrator. The Trustee shall have no duty to collect any
contribution from the Employer and shall not be concerned with the amount of any
contribution nor the application of the contribution formula.
17.7 EVIDENCE OF TRUSTEE ACTION.
In the event that the Trustee is comprised of two or more Trustees, then
those Trustees may designate one such Trustee to transmit all decisions of the
Trustee and to sign all necessary notices and other reports on behalf of the
Trustee. All notices and
<PAGE>
other reports bearing the signature of the individual Trustee so designated
shall be deemed to bear the signatures of all the individual Trustees and all
parties dealing with the Trustees are entitled to rely on any such notices and
other reports as authentic and as representing the action of the Trustee.
17.8 INVESTMENT POLICY.
This Plan has been established far the sole purpose of providing benefits
to the Participants and their Beneficiaries. In determining its investments
hereunder, the Trustee shall take account of the advice provided by the
Administrator as to funding policy and the short and long range needs of the
Plan based on the evident and probable requirements of the Plan as to the time
benefits shall be payable and the requirements therefor.
<PAGE>
IN WITNESS WHEREOF, the Employer and the Trustee have hereunto affixed
their signature to this U.S. Computer Services 401(k) Retirement Plan.
USCS INTERNATIONAL, INC.
By_____________________________
