As filed with the Securities and Exchange Commission on May 8, 2000
THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
OAO TECHNOLOGY SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1973990
(State of Incorporation) (I.R.S. Employer Identification
No.)
7500 Greenway Center Drive, 16th Floor,
Greenbelt, MD 20770
(Address of principal executive offices, including zip code)
EXECUTIVE AND DIRECTOR
DEFERRED COMPENSATION PLAN
(Full title of the plan)
Dianne R. Sagner, Esq.
OAO Technology Solutions, Inc.
7500 Greenway Center Drive, 16th Floor
Greenbelt, MD 20770
(Name and Address of Agent for Service)
(301) 486-0400
(Telephone Number of Agent for Service)
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================
Title of shares Amount Proposed Proposed Amount of
to be registered to be Maximum maximum registration
registered Offering aggregate fee
Price offering
Per Obligation(2) price (3)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OAO Executive and Director $6,600.00 NA NA $264.00 per
Deferred Compensation million
Obligations (1)
- ------------------------------------------------------------------------------------------------
================================================================================================
</TABLE>
(1) The Deferred Compensation Obligations are unsecured general obligations of
OAO Technology Solutions, Inc. to pay deferred compensation in accordance with
the terms of the OAO Technology Solutions Executive and Director Deferred
Compensation Plan.
(2) In addition, pursuant to Rule 416 (c) under the Securities and Exchange Act
of 1933, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan described
herein.
(3) Pursuant to Rule 457(h), estimated solely for the purpose of calculating the
registration fee.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, as filed by OAO Technology Solutions, Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission"),
are incorporated by reference in this Registration Statement:
1. The Registrant's Annual Report on Form 10-K for the year ended December
31, 1999.
2. The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed by the Registrant on
October 6, 1997 to register such securities under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement but
prior to the filing of a post-effective amendment that indicates that all
securities offered hereby have been sold or that de-registers all 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 each
such document.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also 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 hereof.
Item 4. Description of Securities.
Under the OAO Technology Solutions, Inc., Executive and Director Deferred
Compensation Plan (the "Deferred Compensation Plan"), the Registrant will
provide certain executive employees and all of its Directors (the "Deferred
Compensation Employees") the opportunity to enter into agreements for the
deferral of a specified percentage of their cash compensation. The Plan is
intended to be a "top-hat" plan (i.e., an unfunded deferred compensation plan
maintained for a select group of management or highly-compensated employees)
under sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and an unfunded deferred compensation plan for
independent contractor Directors.
To participate in the Deferred Compensation Plan in a particular year, the
Deferred Compensation Employee must enroll in the Deferred Compensation Plan and
make an election to defer the receipt of amounts not yet payable in the form of
base salary or bonus.
<PAGE>
Ordinarily, a Participant shall make such an election with respect to a coming
twelve (12) month Plan Year during the period beginning on the December 1 and
ending on the December 31 of the prior Plan Year, or during such other period
established by OAO Technology Solutions, Inc. An election to defer all or part
of a bonus may be filed at any time before the date on which the bonus is
otherwise payable. The amount of compensation to be deferred by each
participating employee ("Deferred Compensation Participant") will be determined
in accordance with the Deferred Compensation Plan based on election by the
employee. In addition, OAO Technology Solutions, Inc. may (but is not required
to) credit the participant with an employer contribution, which may be subject
to a vesting schedule.
A committee (the "Deferred Compensation Plan Committee") consisting of the
Board of Directors of the Registrant or such committee as the Board shall
appoint, shall be charged with the general administration of the Deferred
Compensation Plan and the obligations of the Registrant (the "Deferred
Compensation Obligations"). The Deferred Compensation Obligations are not
convertible into another security of the Registrant. The Deferred Compensation
Obligations will not have the benefit of a negative pledge or any other
affirmative or negative covenant on the part of the Registrant. The Registrant
shall establish a trust, which shall be a grantor trust for federal income tax
purposes and which shall not cause the Deferred Compensation Plan to be "funded"
under the Employee Retirement Income Security Act of 1974, to assist the
Registrant in meeting the Deferred Compensation Obligations. The assets of the
trust will be available to satisfy the claims of the Registrant's general
creditors in the event of the Registrant's insolvency.
The Deferred Compensation Obligations will be distributed by the Registrant
in accordance with the terms of the Deferred Compensation Plan. Payment will be
made at the times elected by the participant. In addition, a participant may
elect that payment will be made upon the occurrence of certain events, such as a
change in control. In any event, the participant may withdraw his or her account
balance at any time, subject to a 10% penalty. The amount distributed will be
based on the amounts deferred, as increased or decreased for deemed investment
in mutual funds or other investments designated by the participant from choices
offered by the Company.
A Deferred Compensation Participant's right or the right of any other
person to the Deferred Compensation Obligations cannot be assigned, alienated,
sold, garnished, transferred, pledged or encumbered.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers. Section 145 of the Delaware
General Corporation Law contains detailed provisions on indemnification of
directors and officers against expenses, judgments, fines and amounts paid in
settlement, actually and reasonably incurred in connection with legal
proceedings. Section 102(a)(7) of the Delaware General Corporation Law permits a
provision in the certificate of a corporation organized thereunder eliminating
or limiting, with certain exceptions, the personal liability of a director to
<PAGE>
the corporation or its stockholders for monetary damages for breach of fiduciary
duty. The Registrant's Restated Certificate of Incorporation requires
indemnification of directors and officers and provides for the limitation of the
liability of directors to the fullest extent permitted by Delaware law. The
Registrant's Amended and Restated Bylaws require the Registrant to indemnify any
person who was or is an authorized representative of the Registrant, and who was
or is a party or is threatened to be made a party to any corporate proceeding,
by reason of the fact that such person was or is an authorized representative of
the Registrant, against expenses, judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such third party proceeding if such person acted in good faith and in a manner
such person reasonably believed to be in, or not opposed to, the best interests
of the Registrant and, with respect to any criminal third party proceeding
(including any action or investigation which could or does lead to a criminal
third party proceeding) had no reasonable cause to believe such conduct was
unlawful. The Registrant also shall indemnify any person who was or is an
authorized representative of the Registrant and who was or is a party or is
threatened to be made a party to any corporate proceeding by reason of the fact
that such person was or is an authorized representative of the Registrant,
against expenses actually and reasonably incurred by such person in connection
with the defense or settlement of such corporate action if such person acted in
good faith and in a manner reasonably believed to be in, or not opposed to, the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Registrant unless and only to the extent that the
Delaware Court of Chancery or the court in which such corporate proceeding was
pending shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such authorized
representative is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper. Such
indemnification is mandatory under the Registrant's bylaws as to expenses
actually and reasonably incurred to the extent that an authorized representative
of the Registrant has been successful on the merits or otherwise in defense of
any third party or corporate proceeding or in defense of any claim, issue or
matter therein. The determination of whether an individual is entitled to
indemnification under the Bylaws shall be made by a majority of disinterested
directors, independent legal counsel in a written legal opinion, or the
stockholders. Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Commission, such indemnification is against public policy as
expressed in that Act and is therefore unenforceable.
The Registrant has a directors' and officers' liability insurance policy
that affords directors and officers with insurance coverage for losses arising
from claims based on breaches of duty, negligence, error and other wrongful
acts.
<PAGE>
Item 7. Exemption from Registration Claimed.
None.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration Statement.
4.1 OAO Technology Solutions, Inc., Executive and Director Deferred
Compensation Plan
5.1 Opinion of Counsel
23.1 Consent of Deloitte & Touche LLP
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. 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 is registered) and any
deviation from the low or high end of the estimated maximum 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 20 percent change in the maximum aggregate offering price set
forth in "Calculation of Registration Fee" table in the effective
registration statement.
(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)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed 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.
<PAGE>
(2) 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 shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) 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.
(c) 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 foregoing provisions, or otherwise, the
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 the Registrant of expenses
incurred or paid by a director, officer or controlling person of the 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, the 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 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 Greenbelt, Maryland on May __, 2000.
OAO TECHNOLOGY SOLUTIONS, INC.
By:
-------------------------------------
Gregory A. Pratt
Chief Executive Officer and President
<PAGE>
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 indicated. Each person in so signing, also makes,
constitutes and appoints Gregory A. Pratt, his or her true and lawful
attorneys-in-fact, in his or her name, place, and stead to execute and cause to
be filed with the Securities and Exchange Commission any and all amendments to
this Registration Statement.
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
- -----------------------------
Gregory A. Pratt Chief Executive Officer and President April __, 2000
(Principal Executive Officer and
Director)
- -----------------------------
J. Jeffrey Fox V.P. of Finance and Chief Financial April __, 2000
Officer (Principal Financial and
Accounting Officer)
- -----------------------------
Jerry L. Johnson Chairman of the Board and Director April __, 2000
- -----------------------------
Cecile D. Barker Vice Chairman of the Board and Director April __, 2000
- -----------------------------
Yvonne Brathwaite Burke Director April __, 2000
- -----------------------------
Frank B. Foster, III Director April __, 2000
- -----------------------------
John F. Lehman Director April __, 2000
- -----------------------------
Richard B. Lieb Director April __, 2000
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4.1 OAO Technology Solutions, Inc., Executive and Director Deferred
Compensation Plan
5.1 Opinion of Counsel
23.1 Consent of Deloitte & Touche LLP
<PAGE>
OAO TECHNOLOGY SOLUTIONS, INC.
EXECUTIVE AND DIRECTOR
DEFERRED COMPENSATION PLAN
Effective as of April 15, 2000
<PAGE>
OAO TECHNOLOGY SOLUTIONS, INC.
EXECUTIVE AND DIRECTOR DEFERRED COMPENSATION PLAN
Effective as of April 15, 2000
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
1.1 ACCOUNT...................................................................1
1.2 BENEFICIARY...............................................................1
1.3 CODE......................................................................1
1.4 COMPENSATION..............................................................1
1.5 COMPENSATION DEFERRAL ACCOUNT.............................................1
1.6 COMPENSATION DEFERRALS....................................................1
1.7 DESIGNATION DATE..........................................................1
1.8 DISCRETIONARY EMPLOYER CONTRIBUTION ACCOUNT...............................2
1.9 DISCRETIONARY EMPLOYER CONTRIBUTIONS......................................2
1.10 EFFECTIVE DATE............................................................2
1.11 ELIGIBLE INDIVIDUAL.......................................................2
1.12 EMPLOYER..................................................................2
1.13 ENTRY DATE................................................................2
1.14 PARTICIPANT...............................................................2
1.15 PARTICIPANT ENROLLMENT AND ELECTION FORM..................................2
1.16 PLAN......................................................................2
1.17 PLAN YEAR.................................................................2
1.18 TRUST.....................................................................3
1.19 TRUSTEE...................................................................3
1.20 VALUATION DATE............................................................3
ARTICLE 2 ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS..............................................................3
2.2 RE-EMPLOYMENT.............................................................3
2.3 CHANGE OF EMPLOYMENT CATEGORY.............................................3
ARTICLE 3 CONTRIBUTIONS AND CREDITS
3.1 PARTICIPANT COMPENSATION DEFERRALS........................................3
3.2 COMPENSATION DEFERRAL ACCOUNT.............................................4
3.4 CONTRIBUTIONS TO THE TRUST................................................5
ARTICLE 4 ALLOCATION OF FUNDS
4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS.......................5
<PAGE>
4.2 ACCOUNTING FOR DISTRIBUTIONS..............................................6
4.3 SEPARATE ACCOUNTS.........................................................6
4.4 INTERIM VALUATIONS........................................................6
4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS..............................6
4.6 EXPENSES..................................................................7
4.7 TAXES.....................................................................8
ARTICLE 5 ENTITLEMENT TO BENEFITS
5.1 FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT............................8
5.2 SPECIAL CIRCUMSTANCES DISTRIBUTIONS.......................................8
5.3 PENALTY DISTRIBUTIONS.....................................................9
5.4 APPLICATION TO TRUSTEE....................................................9
ARTICLE 6 DISTRIBUTION OF BENEFITS
6.1 AMOUNT....................................................................9
6.2 METHOD OF PAYMENT........................................................10
6.3 RE-EMPLOYMENT OF PARTICIPANT.............................................10
6.4 DEATH BENEFITS...........................................................10
6.5 WITHHOLDING..............................................................10
ARTICLE 7 BENEFICIARIES; PARTICIPANT DATA
7.1 DESIGNATION OF BENEFICIARIES.............................................11
7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES; INABILITY TO
LOCATE PARTICIPANTS OR BENEFICIARIES.....................................11
ARTICLE 8 ADMINISTRATION
8.1 ADMINISTRATIVE AUTHORITY.................................................12
8.2 UNIFORMITY OF DISCRETIONARY ACTS.........................................12
8.3 LITIGATION...............................................................13
8.4 CLAIMS PROCEDURE.........................................................13
ARTICLE 9 AMENDMENT
9.1 RIGHT TO AMEND...........................................................14
9.2 AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN.....................14
ARTICLE 10 TERMINATION
10.1 EMPLOYER'S RIGHT TO TERMINATE OR SUSPEND PLAN............................14
10.2 AUTOMATIC TERMINATION OF PLAN............................................14
10.3 SUSPENSION OF DEFERRALS..................................................14
10.4 ALLOCATION AND DISTRIBUTION..............................................15
10.5 SUCCESSOR TO EMPLOYER....................................................15
ARTICLE 11 THE TRUST
11.1 ESTABLISHMENT OF TRUST...................................................15
<PAGE>
ARTICLE 12 MISCELLANEOUS
12.1 LIMITATIONS ON LIABILITY OF EMPLOYER.....................................15
12.2 CONSTRUCTION.............................................................16
12.3 SPENDTHRIFT PROVISION....................................................16
<PAGE>
OAO TECHNOLOGY SOLUTIONS
EXECUTIVE AND DIRECTOR DEFERRED COMPENSATION PLAN
Effective as of April 15, 2000
RECITALS
This OAO Technology Solutions, Inc. Executive and Director Deferred
Compensation Plan (the "Plan") is adopted by OAO Technology Solutions, Inc. (the
"Employer") for certain of its executive employees and all of its Directors. The
purpose of the Plan is to offer those employees and Directors an opportunity to
elect to defer the receipt of compensation in order to provide deferred
compensation benefits taxable pursuant to section 451 of the Internal Revenue
Code of 1986, as amended (the "Code"). The Plan is intended to be a "top-hat"
plan (i.e., an unfunded deferred compensation plan maintained for a select group
of management or highly-compensated employees) under sections 201(2), 301(a)(3)
and 401(a)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA")
and an unfunded deferred compensation plan for independent contractor Directors.
Accordingly, the following Plan is adopted.
ARTICLE 1
DEFINITIONS
1.1 ACCOUNT means the balance credited to a Participant's or Beneficiary's
Plan account, including contribution credits and deemed income, gains and losses
(as determined by the Employer, in its discretion) credited thereto. A
Participant's or Beneficiary's Account shall be determined as of the date of
reference.
1.2 BENEFICIARY means any person or person so designated in accordance with
the provisions of Article 7.
1.3 CODE means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.
1.4 COMPENSATION means the total base salary, bonus and/or commissions, or
Director's fees, paid by the Employer to an Eligible Individual with respect to
his or her service for the Employer.
1.5 COMPENSATION DEFERRAL ACCOUNT is defined in Section 3.2.
1.6 COMPENSATION DEFERRALS is defined in Section 3.1.
1.7 DESIGNATION DATE means the date or dates as of which a designation of
deemed investment directions by an individual pursuant to Section 4.5, or any
change in a prior
<PAGE>
designation of deemed investment directions by an individual pursuant to Section
4.5, shall become effective. The Designation Dates in any Plan Year shall be
designated by the Employer.
1.8 DISCRETIONARY EMPLOYER CONTRIBUTION ACCOUNT is defined in Section 3.3.
1.9 DISCRETIONARY EMPLOYER CONTRIBUTIONS is defined in Section 3.3.
1.10 EFFECTIVE DATE means the effective date of the Plan, which shall be
April 15, 2000.
1.11 ELIGIBLE INDIVIDUAL means all Directors of the Employer, and, for any
Plan Year (or applicable portion thereof), a person who is determined by the
Employer, or its designee, to be a member of a select group of management or
highly compensated employees of the Employer, and who is designated by the
Employer, or its designee, to be an Eligible Individual under the Plan. By each
December 31 (or before the Effective Date for the Plan's first Plan Year), the
Employer shall notify those individuals, if any, who will be Eligible
Individuals for the next Plan Year. If the Employer determines that an
individual first becomes an Eligible Individual during a Plan Year, the Employer
shall notify such individual of its determination and of the date during the
Plan Year on which the individual shall first become an Eligible Individual.
1.12 EMPLOYER means OAO Technology Solutions, Inc. and its successors and
assigns unless otherwise herein provided, or any other corporation or business
organization which, with the consent of OAO Technology Solutions, Inc. or its
successors or assigns, assumes the Employer's obligations hereunder, or any
other corporation or business organization which agrees, with the consent of
Technology Solutions, Inc. to become a party to the Plan.
1.13 ENTRY DATE with respect to an individual means the first day of the
pay period following the date on which the individual first becomes an Eligible
Individual.
1.14 PARTICIPANT means any person so designated in accordance with the
provisions of Article 2, including, where appropriate according to the context
of the Plan, any former employee or Director who is or may become (or whose
Beneficiaries may become) eligible to receive a benefit under the Plan.
1.15 PARTICIPANT ENROLLMENT AND ELECTION FORM means the form or forms on
which a Participant elects to defer Compensation hereunder and/or on which the
Participant makes certain other designations as required thereon.
1.16 PLAN means this OAO Technology Solutions, Inc. Executive and Director
Deferred Compensation Plan, as amended from time to time.
1.17 PLAN YEAR means the twelve (12) month period (or for the first Plan
Year, the period beginning April 15, 2000 through December 31, 2000) ending on
the December 31 of each year during which the Plan is in effect.
2
<PAGE>
1.18 TRUST means the Trust established pursuant to Article 11.
1.19 TRUSTEE means the trustee of the Trust established pursuant to Article
11.
1.20 VALUATION DATE means the last day of each Plan Year and any other date
that the Employer, in its sole discretion, designates as a Valuation Date.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 REQUIREMENTS. Every Eligible Individual on the Effective Date shall be
eligible to become a Participant on the Effective Date. Every other Eligible
Individual shall be eligible to become a Participant on the first Entry Date
occurring on or after the date on which he or she becomes an Eligible
Individual. No individual shall become a Participant, however, if he or she is
not an Eligible Individual on the date his or her participation is to begin.
Participation in the Participant Compensation Deferral feature of the Plan
is voluntary. In order to participate in the Participant Compensation Deferral
feature of the Plan, an otherwise Eligible Individual must make written
application in such manner as may be required by Section 3.2 and by the Employer
and must agree to make Compensation Deferrals as provided in Article 3.
2.2 RE-EMPLOYMENT. If a Participant whose employment status (or Director
status) with the Employer is terminated is subsequently re-employed (or
subsequently becomes again a Director), he or she shall become a Participant in
accordance with the provisions of Section 2.1.
2.3 CHANGE OF EMPLOYMENT CATEGORY. During any period in which an executive
Participant remains in the employ of the Employer, but ceases to be an Eligible
Individual, he or she shall not be eligible to make Compensation Deferrals
hereunder.
ARTICLE 3
CONTRIBUTIONS AND CREDITS
3.1 PARTICIPANT COMPENSATION DEFERRALS. In accordance with rules
established by the Employer, a Participant may elect to defer Compensation which
is not yet payable and which would otherwise be paid to the Participant. Amounts
so deferred will be considered a Participant's "Compensation Deferrals".
Ordinarily, a Participant shall make such an election with respect to a coming
twelve (12) month Plan Year during the period beginning on the December 1 and
ending on the December 31 of the prior Plan Year, or during such other period
established by the Employer.
3
<PAGE>
Compensation Deferrals shall be made through regular payroll or Director
fee deductions through an election by the Participant to defer compensation not
yet payable to him or her at the time of the election. The Participant may
reduce his or her regular payroll of Director fees for a particular year by
written notice delivered to the Employer at least thirty (30) days prior to the
beginning of any regular payroll or compensation period, with such reduction
being first effective for Compensation to be earned in that payroll or
compensation period. In the case of bonus payment deferrals, the Participant may
reduce his or her bonus payments due to be paid by the Employer by giving
written notice to the Employer of the bonus payment Compensation Deferral amount
prior to the date the applicable bonus is first due to be paid.
Once made, a Compensation Deferral payroll deduction election shall
continue in force indefinitely, until reduced by the Participant on a subsequent
Participant Enrollment and Election Form provided by the Employer as provided
above or until increased during an annual enrollment period under the Plan. A
bonus payment reduction election, or a reduction thereof pursuant to the
foregoing, shall continue in force only for one bonus payment.
Notwithstanding the preceding, Participant Compensation Deferrals shall not
exceed such maximum percentages as may be established by the Employer in its
discretion and communicated to Participants from time to time. If a
Participant's Compensation Deferrals exceed such maximum percentage(s), the
Employer shall have the right to reduce the percentage(s) of the Participant's
Compensation Deferrals by giving the Participant written notification of such
reduction. In addition, the Employer may require that Participant Compensation
Deferrals be comprised of a minimum percentage which percentage shall be
established by the Employer in its discretion and communicated to Participants
from time to time.
As of the Effective Date, Compensation Deferrals made through regular
payroll deductions by a Participant who is an employee of the Employer shall be
at least 3 percent (3%) and no more than $100,000 per year of the Participant's
Compensation.
Compensation Deferrals shall be deducted by the Employer from the pay or
fees of a deferring Participant and shall be credited to the Compensation
Deferral Account of the deferring Participant.
3.2 COMPENSATION DEFERRAL ACCOUNT. There shall be established and
maintained by the Employer a separate Compensation Deferral Account in the name
of each Participant to which shall be credited or debited: (a) amounts equal to
the Participant's Compensation Deferrals; (b) amounts equal to any deemed
earnings or losses (to the extent realized, based upon deemed fair market value
of the Account's deemed assets, as determined by the Employer, in its
discretion) attributable or allocable thereto; and (c) expenses and/or taxes
charged to that Account.
A Participant shall at all times be 100% vested in amounts credited to his
or her Participant Compensation Deferral Account.
4
<PAGE>
3.3 DISCRETIONARY EMPLOYER CONTRIBUTION CREDITS. There shall be established
and maintained a separate Discretionary Employer Contribution Credit Account in
the name of each Participant. Such Account shall be credited or debited, as
applicable, with (a) amounts equal to the Discretionary Employer's Contributions
credited to that Account, if any; (b) any deemed earnings and losses (to the
extent realized, based upon deemed fair market value of the Account's deemed
assets as determined by the Employer, in its discretion) allocated to that
Account; and (c) expenses charged to that Account.
For purposes of this Section, the Discretionary Employer Contributions
credited to a Participant's Discretionary Employer Contribution Account for a
particular Plan Year shall be an amount (if any) determined by the Employer, in
its discretion.
A Participant's Discretionary Employer Contribution Credit Account shall be
credited or debited, as applicable, as of each Valuation Date, with deemed
earnings or losses, as applicable, and expenses. The amount of deemed earnings
or losses and expenses shall be as determined by the Employer hereunder. The
Employer shall have the discretion to allocate such deemed earnings or losses
and expenses among Participants' Discretionary Employer Contribution Credit
Accounts pursuant to such allocation rules as the Employer deems to be
reasonable and administratively practicable.
A Participant shall become vested in amounts credited to his or her
Discretionary Employer Contribution Account pursuant to such vesting schedule
for such amounts as is prescribed by the Employer, it its discretion.
3.4 CONTRIBUTIONS TO THE TRUST. An amount shall be contributed by the
Employer to the Trust maintained under Section 11.1 equal to the amount(s)
required to be credited to the Participant's Account under Sections 3.1, 3.2 and
3.3. The Employer shall make contributions to the Trust by the deadline for such
contributions if they were being made with respect to the Employer's 401(k)
plan.
ARTICLE 4
ALLOCATION OF FUNDS
4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. Subject to Section
4.5, each Participant shall have the right to direct the Employer as to how
amounts in his or her Plan Account shall be deemed to be invested. Subject to
such limitations as may from time to time be required by law, imposed by the
Employer or the Trustee or contained elsewhere in the Plan, and subject to such
operating rules and procedures as may be imposed from time to time by the
Employer, prior to the date on which a direction will become effective, the
Participant shall have the right to direct the Employer as to how amounts in his
or her Account shall be deemed to be invested.
The Employer shall direct the Trustee to invest the account maintained in
the Trust on behalf of the Participant pursuant to the deemed investment
directions the Employer properly
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has received from the Participant. The value of the Participant's Account shall
be equal to the value of the account maintained under the Trust on behalf of the
Participant. As of each valuation date of the Trust, the Participant's Account
will be credited or debited to reflect the Participant's deemed investments of
the Trust.
The Participant's Plan Account will be credited or debited with the
increase or decrease in the realizable net asset value or credited interest, as
applicable, of the designated deemed investments, as follows. As of each
Valuation Date, an amount equal to the net increase or decrease in realizable
net asset value or credited interest, as applicable (as determined by the
Employer or the Trustee, as applicable), of each deemed investment option within
the Account since the preceding Valuation Date shall be allocated among all
Participants' Accounts deemed to be invested in that investment option in
accordance with the ratio which the portion of the Account of each Participant
which is deemed to be invested within that investment option, determined as
provided herein, bears to the aggregate of all amounts deemed to be invested
within that investment option.
4.2 ACCOUNTING FOR DISTRIBUTIONS. As of the date of any distribution
hereunder, the distribution made hereunder to the Participant or his or her
Beneficiary or Beneficiaries shall be charged to such Participant's Account.
Such amounts shall be charged on a pro rata basis against the investments of the
Trust in which the Participant's Account is deemed to be invested.
4.3 SEPARATE ACCOUNTS. A separate account under the Plan shall be
established and maintained by the Employer to reflect the Account for each
Participant with sub-accounts to show separately the applicable deemed
investments of the Account.
4.4 INTERIM VALUATIONS. If it is determined by the Employer that the value
of a Participant's Account as of any date on which distributions are to be made
differs materially from the value of the Participant's Account on the prior
Valuation Date upon which the distribution is to be based, the Employer, in its
discretion, shall have the right to designate any date in the interim as a
Valuation Date for the purpose of revaluing the Participant's Account so that
the Account will, prior to the distribution, reflect its share of such material
difference in value.
4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS. Subject to such
limitations as may from time to time be required by law, imposed by the Employer
or the Trustee or contained elsewhere in the Plan, and subject to such operating
rules and procedures as may be imposed from time to time by the Employer, prior
to and effective for each Designation Date, each Participant may communicate to
the Employer a direction as to how his or her Plan Accounts should be deemed to
be invested (in any whole dollar amounts or percentage multiples) among such
categories of deemed investments as may be made available by the Employer
hereunder. Such direction may separately designate deemed investments (a) for
that portion of the Participant's Account attributable to amounts that will be
credited to the Participant's Account prior to the Designation Date on which
such direction shall become effective, and (b) for that portion of the
Participant's Account attributable to amounts that will be credited to the
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Participant's Account after the Designation Date on which such direction shall
become effective, and shall be subject to the following rules:
(a) Any initial or subsequent deemed investment direction shall be in
writing, on a form supplied by and filed with the Employer (or made in such
other manner specified by the Employer), and shall be effective as of the
next Designation Date after such filing.
(b) All amounts credited to the Participant's Account shall be deemed
to be invested in accordance with the then effective deemed investment
direction, and as of the effective date of any new deemed investment
direction, all or a portion of the Participant's Account at that date shall
be reallocated among the designated deemed investment funds according to
the percentages specified in the new deemed investment direction unless and
until a subsequent deemed investment direction shall be filed and become
effective. An election concerning deemed investment choices shall continue
indefinitely until changed by the Participant in a manner permitted by the
Employer.
(c) If the Employer receives an initial or revised deemed investment
direction which it deems to be incomplete, unclear or improper, the
Participant's investment direction then in effect shall remain in effect
(or, in the case of a deficiency in an initial deemed investment direction,
the Participant shall be deemed to have filed no deemed investment
direction) until the next Designation Date, unless the Employer provides
for, and permits the application of, corrective action prior thereto.
(d) If the Employer possesses (or is deemed to possess as provided in
(c), above) at any time directions as to the deemed investment of less than
all of a Participant's Account, the Participant shall be deemed to have
directed that the undesignated portion of the Account be deemed to be
invested in a money market, fixed income, or similar fund made available
under the Plan as determined by the Employer in its discretion.
(e) Each Participant hereunder, as a condition to his or her
participation hereunder, agrees to indemnify and hold harmless the Employer
and its agents and representatives from any losses or damages of any kind
relating to the deemed investment of the Participant's Account hereunder.
(f) Each reference in this Section to a Participant shall be deemed to
include, where applicable, a reference to a Beneficiary.
4.6 EXPENSES. Expenses, including Trustee fees, allocable to the
administration or operation of an Account maintained under the Plan shall be
paid by the Employer unless, in the discretion of the Employer, the Employer
elects to charge such expenses, or any portion thereof, against the appropriate
Participant's Account or Participants' Accounts. On the Effective Date, the
first 35 basis points (.35%) of expenses will be charged against the
Participants' Accounts. The Employer shall pay expenses in excess of this amount
in accordance with this Section 4.6.
If an expense, or any portion thereof, is charged against a Participant's
Account, at the discretion of the Employer, such expense, or any portion
thereof, either (a) will reduce the
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contribution to the Trust under Section 3.4 next due to be made by the Employer
in respect of the Account, or (b) will be paid from the Trust to the Employer
out of assets of the Trust corresponding to the Participant's Account hereunder.
4.7 TAXES. Any taxes allocable to an Account (or portion thereof)
maintained under the Plan which are payable prior to the distribution of the
Account (or portion thereof), as determined by the Employer, shall be paid by
the Employer unless, in the discretion of the Employer, the Employer elects to
charge taxes incurred after the date such election is communicated to
Participants against the appropriate Participant's Account or Participants'
Accounts. If a tax amount is charged against a Participant's Account, at the
discretion of the Employer, such expense either (a) will reduce the contribution
to the Trust under Section 3.4 next due to be made by the Employer in respect of
the Account, or (b) will be paid from the Trust to the Employer out of assets of
the Trust corresponding to the Participant's Account.
ARTICLE 5
ENTITLEMENT TO BENEFITS
5.1 FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT. On his or her
Participant Enrollment and Election Form, a Participant may select a fixed
payment date for the payment or commencement of payment of his or her vested
Account, which will be valued and payable according to the provisions of Article
6. Such a fixed payment date may be extended to later dates so long as elections
to so extend are made by the Participant at least six (6) months prior to the
then applicable fixed date. Such a fixed payment date may not be accelerated.
Alternatively, on his or her Participant Enrollment and Election Form, a
Participant may select payment or commencement of payment of his or her vested
Account at his or her termination of employment with the Employer, or at the
earlier of a fixed payment date or his or her termination of employment with the
Employer. In either of these cases, the extension and non-acceleration rules
discussed above shall apply to such fixed payment date and/or termination of
employment date, as applicable.
Any fixed payment date elected by a Participant pursuant to the foregoing
must be no earlier than the January 1 of the third calendar year following the
year in which the election is made.
If a Participant does not select a payment date pursuant to the foregoing,
his or her vested Account shall be distributed or commence to be distributed, as
provided in Article 6, at the termination of his or her employment with the
Employer.
5.2 SPECIAL CIRCUMSTANCES DISTRIBUTIONS. On his or her Form and Timing
of Payment Election Form, a Participant may elect, prior to the occurrence of an
elected "Special Circumstance", to receive (or begin to receive, as applicable)
his or her vested Account upon the occurrence of one or more "Special
Circumstances" as specified on the Form. If such an election is made prior to
the occurrence of the elected Special Circumstance and the elected
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Special Circumstance occurs, the Trustee shall make the appropriate
distribution(s) to the Participant from amounts held by the Trustee in respect
of the Participant's vested Account. For purposes of this Section, the value of
the Participant's vested Account shall be determined as of the date of the
distribution(s).
"Special Circumstances" means: (a) the closing of a sale or other
disposition of shares of OAO Technology Solutions, Inc. such that the
shareholders of OAO Technology Solutions, Inc. immediately before the closing
will not beneficially own, immediately after the sale or other disposition,
shares entitling them to more than 50% of all votes to which all shareholders of
OAO Technology Solutions, Inc. would be entitled in the election of directors;
(b) any change in the membership of the OAO Technology Solutions, Inc. Board if,
immediately after the change, at least 50% of the directors were not members of
the Board for at least one year preceding the change; (c) Safeguard Scientifics,
Inc. reducing its common stock ownership in OAO Technology Solutions, Inc. to
less than 5%; or (d) the reduction in the trading price of OAO Technology
Solutions, Inc. stock to below $2 per share for 20 consecutive trading days.
5.3 PENALTY DISTRIBUTIONS. A Participant may elect, at any time prior to
the date on which a distribution is otherwise due to him or her hereunder, to
receive a lump sum distribution of all or a designated portion of his or her
vested Account, subject to the forfeiture of ten percent of the amount subject
to the election. If such an election is made, the Trustee shall make the
appropriate net lump sum distribution to the Participant from amounts held by
the Trustee in respect of the Participant's vested Account and shall pay to the
Employer the ten percent forfeiture amount. For purposes of this Section, the
value of the Participant's vested Account shall be determined as of the date of
the lump sum distribution.
5.4 APPLICATION TO TRUSTEE. On the date or dates on which a Participant or
Beneficiary is entitled to payment under Sections 5.1 , 5.2 and 5.3, the
Participant or Beneficiary need not make application for payment to the
Employer, but instead may make application for payment directly to the Trustee
who shall pay the Participant or Beneficiary the appropriate amount directly
from the Trust without the consent of the Employer. The Trustee shall report the
amount of each such payment, and any withholding thereon, to the Employer.
ARTICLE 6
DISTRIBUTION OF BENEFITS
6.1 AMOUNT. A Participant (or his or her Beneficiary) shall become entitled
to receive, on or about the date or dates selected by the Participant on his or
her Participant Enrollment and Election Form or, if none, on or about the date
of the Participant's termination of employment with the Employer (as provided in
Article 5), a distribution in an aggregate amount equal to the Participant's
vested Account. Any payment due hereunder from the Trust which is not paid by
the Trust for any reason will be paid by the Employer from its general assets.
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6.2 METHOD OF PAYMENT.
(a) Cash Or In-Kind Payments. Payments under the Plan shall be made in cash
or in-kind, as elected by the Participant, as permitted by the Employer and the
Trustee in their sole and absolute discretion and subject to applicable
restrictions on transfer as may be applicable legally or contractually.
(b) Timing and Manner of Payment. In the case of distributions to a
Participant or his or her Beneficiary by virtue of an entitlement pursuant to
Sections 5.1, an aggregate amount equal to the Participant's vested Account will
be paid by the Trust or the Employer, as provided in Section 6.1, in a lump sum
or in five (5) substantially equal annual installments (adjusted for gains and
losses), as selected by the Participant prior to the date on which amounts are
first payable to the Participant.
If a Participant fails to designate properly the manner of payment of the
Participant's benefit under the Plan, such payment will be in a lump sum.
If the whole or any part of a payment hereunder is to be in installments,
the total to be so paid shall continue to be deemed to be invested pursuant to
Sections 4.1 and 4.5 under such procedures as the Employer may establish, in
which case any deemed income, gain, loss or expense attributable thereto (as
determined by the Trustee, in its discretion) shall be reflected in the
installment payments, in such equitable manner as the Trustee shall determine.
6.3 RE-EMPLOYMENT OF PARTICIPANT. If a Participant who has terminated his
or her employment (or Director status) with the Employer is receiving
installment distributions pursuant to Section 6.2 and is re-employed by (or once
again becomes a Director of) the Employer, the remaining distributions due to
the Participant shall be suspended until such times as the Participant once
again becomes eligible for benefits under Sections 5.1, at which time such
distribution shall commence, subject to the limitations and conditions contained
in this Plan.
6.4 DEATH BENEFITS. If a Participant dies before terminating his or her
employment (or Director status) with the Employer and before the commencement of
payments to the Participant hereunder, the entire value of the Participant's
Account shall be paid, at the time(s) selected by the Participant under Article
5 and in the manner provided in Section 6.2, to the person or persons designated
in accordance with Section 7.1.
Upon the death of a Participant after payments hereunder have begun but
before he or she has received all payments to which he or she is entitled under
the Plan, the remaining benefit payments shall be paid to the person or persons
designated in accordance with Section 7.1 in the manner in which such benefits
were payable to the Participant.
6.5 WITHHOLDING. All distributions under the Plan are subject to any
applicable tax withholding, as determined by the Employer in its discretion.
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ARTICLE 7
BENEFICIARIES; PARTICIPANT DATA
7.1 DESIGNATION OF BENEFICIARIES. Each Participant from time to time may
designate any person or persons (who may be named contingently or successively)
to receive such benefits as may be payable under the Plan upon or after the
Participant's death, and such designation may be changed from time to time by
the Participant by filing a new designation. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Employer, and will be effective only when filed in writing with the Employer
during the Participant's lifetime.
In the absence of a valid Beneficiary designation, or if, at the time any
benefit payment is due to a Beneficiary, there is no living Beneficiary validly
named by the Participant, the Employer shall pay any such benefit payment to the
Participant's spouse, if then living, but otherwise to the Participant's then
living descendants, if any, per stirpes, but, if none, to the Participant's
estate. In determining the existence or identity of anyone entitled to a benefit
payment, the Employer may rely conclusively upon information supplied by the
Participant's personal representative, executor or administrator.
If a question arises as to the existence or identity of anyone entitled to
receive a benefit payment as aforesaid, or if a dispute arises with respect to
any such payment, then, notwithstanding the foregoing, the Employer, in its sole
discretion, may distribute such payment to the Participant's estate without
liability for any tax or other consequences which might flow therefrom, or may
take such other action as the Employer deems to be appropriate.
7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES;
INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES. Any communication, statement
or notice addressed to a Participant or to a Beneficiary at his or her last post
office address as shown on the Employer's records shall be binding on the
Participant or Beneficiary for all purposes of the Plan. The Employer shall not
be obliged to search for any Participant or Beneficiary beyond the sending of a
registered letter to such last known address. If the Employer notifies any
Participant or Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make his
or her location known to the Employer within three (3) years thereafter, then,
except as otherwise required by law, if the location of one or more of the next
of kin of the Participant is known to the Employer, the Employer may direct
distribution of such amount to any one or more or all of such next of kin, and
in such proportions as the Employer determines. If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount payable shall be deemed to be a forfeiture, except that the
dollar amount of the forfeiture, unadjusted for deemed gains or losses in the
interim, shall be paid by the Employer if a claim for the benefit subsequently
is made by the Participant or the Beneficiary to whom it was payable. If a
benefit payable to an unlocated Participant or Beneficiary is subject to escheat
pursuant to applicable state law, the Employer shall not be liable to any person
for any payment made in accordance with such law.
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ARTICLE 8
ADMINISTRATION
8.1 ADMINISTRATIVE AUTHORITY. Except as otherwise specifically provided
herein, the Employer, acting through its Board of Directors or the designee(s)
thereof, shall have the sole responsibility for and the sole control of the
operation and administration of the Plan, and shall have the power and authority
to take all action and to make all decisions and interpretations which may be
necessary or appropriate in order to administer and operate the Plan, including,
without limiting the generality of the foregoing, the power, duty and
responsibility to:
(a) Resolve and determine all disputes or questions arising under the
Plan, and to remedy any ambiguities, inconsistencies or omissions in the
Plan.
(b) Adopt such rules of procedure and regulations as in its opinion
may be necessary for the proper and efficient administration of the Plan
and as are consistent with the Plan.
(c) Implement the Plan in accordance with its terms and the rules and
regulations adopted as above.
(d) Make determinations with respect to the eligibility of any
Eligible Individual as a Participant and make determinations concerning the
crediting of Plan Accounts.
(e) Appoint any persons or firms, or otherwise act to secure
specialized advice or assistance, as it deems necessary or desirable in
connection with the administration and operation of the Plan, and the
Employer shall be entitled to rely conclusively upon, and shall be fully
protected in any action or omission taken by it in good faith reliance
upon, the advice or opinion of such firms or persons. The Employer shall
have the power and authority to delegate from time to time by written
instrument all or any part of its duties, powers or responsibilities under
the Plan, both ministerial and discretionary, as it deems appropriate, to
any person or committee, and in the same manner to revoke any such
delegation of duties, powers or responsibilities. Any action of such person
or committee in the exercise of such delegated duties, powers or
responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Employer. Further, the
Employer may authorize one or more persons to execute any certificate or
document on behalf of the Employer, in which event any person notified by
the Employer of such authorization shall be entitled to accept and
conclusively rely upon any such certificate or document executed by such
person as representing action by the Employer until such notified person
shall have been notified of the revocation of such authority.
8.2 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or
operation of the Plan discretionary actions by the Employer are required or
permitted, such actions shall be consistently and uniformly applied to all
persons similarly situated, and no such action shall be taken which shall
discriminate in favor of any particular person or group of persons.
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8.3 LITIGATION. Except as may be otherwise required by law, in any action
or judicial proceeding affecting the Plan, no Participant or Beneficiary shall
be entitled to any notice or service of process, and any final judgment entered
in such action shall be binding on all persons interested in, or claiming under,
the Plan.
8.4 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan (a
"Claimant") shall present the claim, in writing, to the Employer or the Trustee,
and the Employer or the Trustee shall respond in writing. If the claim is
denied, the written notice of denial shall state, in a manner calculated to be
understood by the Claimant:
(a) The specific reason or reasons for the denial, with specific
references to the Plan provisions on which the denial is based;
(b) A description of any additional material or information necessary
for the Claimant to perfect his or her claim and an explanation of why such
material or information is necessary; and
(c) An explanation of the Plan's claims review procedure.
The written notice denying or granting the Claimant's claim shall be
provided to the Claimant within ninety (90) days after the Employer's or
Trustee's receipt of the claim, unless special circumstances require an
extension of time for processing the claim. If such an extension is required,
written notice of the extension shall be furnished by the Employer or Trustee to
the Claimant within the initial ninety (90) day period and in no event shall
such an extension exceed a period of ninety (90) days from the end of the
initial ninety (90) day period. Any extension notice shall indicate the special
circumstances requiring the extension and the date on which the Employer or
Trustee expects to render a decision on the claim. Any claim not granted or
denied within the period noted above shall be deemed to have been denied.
Any Claimant whose claim is denied, or deemed to have been denied under the
preceding sentence (or such Claimant's authorized representative), may, within
sixty (60) days after the Claimant's receipt of notice of the denial, or after
the date of the deemed denial, request a review of the denial by notice given,
in writing, to the Employer or Trustee. Upon such a request for review, the
claim shall be reviewed by the Employer or Trustee (or its designated
representative) which may, but shall not be required to, grant the Claimant a
hearing. In connection with the review, the Claimant may have representation,
may examine pertinent documents, and may submit issues and comments in writing.
The decision on review normally shall be made within sixty (60) days of the
Employer's receipt of the request for review. If an extension of time is
required due to special circumstances, the Claimant shall be notified, in
writing, by the Employer or Trustee, and the time limit for the decision on
review shall be extended to one hundred twenty (120) days. The decision on
review shall be in writing and shall state, in a manner calculated to be
understood by the Claimant, the specific reasons for the decision and shall
include references to the relevant Plan provisions on which the decision is
based. The written decision on review shall be given to the
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Claimant within the sixty (60) day (or, if applicable, the one hundred twenty
(120) day) time limit discussed above. If the decision on review is not
communicated to the Claimant within the sixty (60) day (or, if applicable, the
one hundred twenty (120) day) period discussed above, the claim shall be deemed
to have been denied upon review. All decisions on review shall be final and
binding with respect to all concerned parties.
ARTICLE 9
AMENDMENT
9.1 RIGHT TO AMEND. The Employer, by written instrument executed by a duly
authorized representative of the Employer, shall have the right to amend the
Plan, at any time and with respect to any provisions hereof, and all parties
hereto or claiming any interest hereunder shall be bound by such amendment;
provided, however, that no such amendment shall deprive a Participant or a
Beneficiary of a right accrued hereunder prior to the date of the amendment.
9.2 AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN. Notwithstanding
the provisions of Section 9.1, the Plan may be amended by the Employer at any
time, retroactively if required, in the opinion of the Employer, in order to
ensure that the Plan is characterized as "top-hat" plan as described under ERISA
sections 201(2), 301(a)(3), and 401(a)(1) and an unfunded deferred compensation
plan for independent contractor Directors, and to conform the Plan to the
provisions and requirements of any applicable law (including ERISA and the
Code). No such amendment shall be considered prejudicial to any interest of a
Participant or a Beneficiary hereunder.
ARTICLE 10
TERMINATION
10.1 EMPLOYER'S RIGHT TO TERMINATE OR SUSPEND PLAN. The Employer reserves
the right to terminate the Plan and/or its obligation to make further credits to
Plan Accounts. The Employer also reserves the right to suspend the operation of
the Plan for a fixed or indeterminate period of time.
10.2 AUTOMATIC TERMINATION OF PLAN. The Plan automatically shall terminate
upon the dissolution of the Employer, or upon its merger into or consolidation
with any other corporation or business organization if there is a failure by the
surviving corporation or business organization to adopt specifically and agree
to continue the Plan.
10.3 SUSPENSION OF DEFERRALS. In the event of a suspension of the Plan, the
Employer shall continue all aspects of the Plan, other than Compensation
Deferrals and Employer Contribution Credits, during the period of the
suspension, in which event payments hereunder will continue to be made during
the period of the suspension in accordance with Articles 5 and 6.
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10.4 ALLOCATION AND DISTRIBUTION. This Section shall become operative on a
complete termination of the Plan. The provisions of this Section also shall
become operative in the event of a partial termination of the Plan, as
determined by the Employer, but only with respect to that portion of the Plan
attributable to the Participants to whom the partial termination is applicable.
Upon the effective date of any such event, notwithstanding any other provisions
of the Plan, no persons who were not theretofore Participants shall be eligible
to become Participants, the value of the interest of all Participants and
Beneficiaries shall be determined and, after deduction of estimated expenses in
liquidating and, if applicable, paying Plan benefits, paid to them as soon as is
practicable after such termination.
10.5 SUCCESSOR TO EMPLOYER. Any corporation or other business organization
which is a successor to the Employer by reason of a consolidation, merger or
purchase of substantially all of the assets of the Employer shall have the right
to become a party to the Plan by adopting the same by resolution of the entity's
board of directors or other appropriate governing body. If, within ninety (90)
days from the effective date of such consolidation, merger or sale of assets,
such new entity does not become a party hereto, as above provided, the Plan
automatically shall be terminated, and the provisions of Section 10.4 shall
become operative.
ARTICLE 11
THE TRUST
11.1 ESTABLISHMENT OF TRUST. The Employer shall establish the Trust with
the Trustee pursuant to such terms and conditions as are set forth in the Trust
agreement to be entered into between the Employer and the Trustee. The Trust is
intended to be treated as a "grantor" trust under the Code and the establishment
of the Trust is not intended to cause the Participant to realize current income
on amounts contributed thereto, and the Trust shall be so interpreted.
ARTICLE 12
MISCELLANEOUS
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12.1 LIMITATIONS ON LIABILITY OF EMPLOYER. Neither the establishment of the
Plan nor any modification thereof, nor the creation of any account under the
Plan, nor the payment of any benefits under the Plan shall be construed as
giving to any Participant or other person any legal or equitable right against
the Employer, or any officer or employer thereof except as provided by law or by
any Plan provision. The Employer does not in any way guarantee any Participant's
Account from loss or depreciation, whether caused by poor investment performance
of a deemed investment or the inability to realize upon an investment due to an
insolvency affecting an investment vehicle or any other reason. In no event
shall the Employer, or any successor, employee, officer, director or stockholder
of the Employer, be liable to any person on account of any claim arising by
reason of the provisions of the Plan or of any instrument or instruments
implementing its provisions, or for the failure of any Participant, Beneficiary
or other person to be entitled to any particular tax consequences with respect
to the Plan, or any credit or distribution hereunder.
12.2 CONSTRUCTION. If any provision of the Plan is held to be illegal or
void, such illegality or invalidity shall not affect the remaining provisions of
the Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if said illegal or invalid provision had never been inserted herein.
For all purposes of the Plan, where the context admits, the singular shall
include the plural, and the plural shall include the singular. Headings of
Articles and Sections herein are inserted only for convenience of reference and
are not to be considered in the construction of the Plan. The laws of the State
of Maryland shall govern, control and determine all questions of law arising
with respect to the Plan and the interpretation and validity of its respective
provisions, except where those laws are preempted by the laws of the United
States. Participation under the Plan will not give any Participant the right to
be retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.
The Plan is intended to be and at all times shall be interpreted and
administered so as to qualify as an unfunded deferred compensation plan, and no
provision of the Plan shall be interpreted so as to give any individual any
right in any assets of the Employer which right is greater than the rights of a
general unsecured creditor of the Employer.
12.3 SPENDTHRIFT PROVISION. No amount payable to a Participant or a
Beneficiary under the Plan will, except as otherwise specifically provided by
law, be subject in any manner to anticipation, alienation, attachment,
garnishment, sale, transfer, assignment (either at law or in equity), levy,
execution, pledge, encumbrance, charge or any other legal or equitable process,
and any attempt to do so will be void; nor will any benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the person entitled thereto. Further, (i) the withholding of taxes from Plan
benefit payments, (ii) the recovery under the Plan of overpayments of benefits
previously made to a Participant or Beneficiary, (iii) if applicable, the
transfer of benefit rights from the Plan to another plan, or (iv) the direct
deposit of benefit payments to an account in a banking institution (if not
actually part of an arrangement constituting an assignment or alienation) shall
not be construed as an assignment or alienation.
16
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In the event that any Participant's or Beneficiary's benefits hereunder are
garnished or attached by order of any court, the Employer or Trustee may bring
an action or a declaratory judgment in a court of competent jurisdiction to
determine the proper recipient of the benefits to be paid under the Plan. During
the pendency of said action, any benefits that become payable shall be held as
credits to the Participant's or Beneficiary's Account or, if the Employer or
Trustee prefers, paid into the court as they become payable, to be distributed
by the court to the recipient as the court deems proper at the close of said
action.
IN WITNESS WHEREOF, the Employer has caused the Plan to be executed and its
seal to be affixed hereto, effective as of April 15, 2000.
ATTEST/WITNESS OAO TECHNOLOGY SOLUTIONS, INC.
By: [SEAL]
- ----------------------------------- ---------------------------------
Print Name: Print Name:
------------------------ -------------------------
Date:
-------------------------------
17
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OAO
Technology Solutions, Inc.
May 5, 2000
OAO Technology Solutions, Inc.
7500 Greenway Center Drive, 16th Floor
Greenbelt, MD 20770
Ladies and Gentlemen:
I am General Counsel of OAO Technology Solutions, Inc. a Delaware
corporation (the "Company"), and am delivering this opinion in connection with
the Registration Statement on Form S-8, with exhibits thereto (the Registration
Statement"), filed by the Company under the Securities Act of 1933, as amended,
and the rules and regulations thereunder (the "Act"), relating to the
registration of deferred compensation obligations (the "Obligations") of the
Company to be offered under the Company's Amended and Restated Executive and
Director Deferred Compensation Plan (the "Plan").
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of the Plan and all other documents relating to the Company,
the Plan and the proposed issuance of the Obligations as I have deemed necessary
or appropriate as a basis for the opinions set forth below. In my examination, I
have assumed the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such latter
documents. As to any facts material to the opinions expressed herein which were
not independently established or verified, I have relied upon statements and
representations of officers and other representatives of the Company and others.
I express no opinion as to any laws other than the General Corporation Law
of the State of Delaware and the Federal laws of the United States of America.
Based upon and subject to the foregoing, I am of the opinion that the
Obligations, when established pursuant to the terms of the Plan, will be valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms and the terms of the Plan, except as enforceability
(i) may be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting creditors' rights generally and (ii) is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
<PAGE>
OAO Technology Solutions, Inc.
Page 2
May 5, 2000
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. Such consent does not constitute a consent under Section
7 of the Act, since I have not certified any part of such Registration Statement
and I do not otherwise come within the categories of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgate thereunder.
This opinion is furnished by me, as General Counsel, in connection with the
filing of the Registration Statement and, except as provided in the immediately
preceding paragraph, is not to be used, circulated, quoted or otherwise referred
to for any other purpose without my express written permission or relied upon by
any other person.
Very truly yours,
Dianne R. Sagner, Esquire
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
OAO Technology Solutions, Inc. on Form S-8 of our report dated February 9, 2000,
appearing in the Annual Report on Form 10-K of OAO Technology Solutions, Inc.
for the year ended December 31, 1999.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
McLean, Virginia
May 5, 2000
