As Filed with the Securities and Exchange Commission on April 9, 1999
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
UNIGRAPHICS SOLUTIONS INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 75-2728894
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
13736 Riverport Drive
Maryland Heights, Missouri 63043-4826
(Address, including zip code, of Registrant's
principal executive offices)
UNIGRAPHICS SOLUTIONS INC. 401(k) PLAN
(Full Title of the Plan)
John J. Mazzola
President and Chief Executive Officer
Unigraphics Solutions Inc.
13736 Riverport Drive
Maryland Heights, Missouri 63043-4826
(314) 344-5900
(Name, address and telephone number,
including area code, of agent for service)
--------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price (1) Registration Fee
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
- -------------------------- ---------------------- ----------------------- ----------------------- -----------------------
Class A Common Stock, 200,000 shares $15.40625 $3,081,250 $857
par value $0.01 per
share (2)
-------------------------- ---------------------- ----------------------- ----------------------- -----------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee, and
based upon the average of the high and low prices of the Common Stock as
reported on the New York Stock Exchange on April 7, 1999 in accordance with
Rules 457(c) and 457(h) of the Securities Act of 1933, as amended.
(2) Pursuant to Rule 416(c) under the Securities Act, this registration
statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the employee benefit plan described herein.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Unigraphics Solutions Inc. (the "Company" or the "Registrant")
hereby incorporates by reference into this Registration Statement the following
documents:
(a) The Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
(b) The description of the Class A Common Stock as
contained in the Company's Registration Statement on
Form 8-A dated May 21, 1998, which incorporates by
reference the section entitled "Description of
Capital Stock" contained in the Prospectus filed as
part of the Company's Registration Statement on Form
S-1 (File No. 333-48261).
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereunder have been sold or which deregisters 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 such documents.
Any statement contained in this Registration Statement, in an
amendment hereto or 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 herein by reference modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
J. Randall Walti, General Counsel of the Company, has rendered
an opinion as to the legality of the Class A Common Stock being registered
hereby. Mr. Walti owns 1,150 shares of Class A Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") provides that a Delaware corporation may indemnify
directors and officers and certain other individuals against expenses (including
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<PAGE>
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by any such person in connection with any threatened,
pending or completed action, suit or proceeding (other than an action by or in
the right of the corporation) in which such person is involved because such
person is a director or officer of the corporation, if such person acted in good
faith and in a manner that such person reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that such
person's conduct was unlawful. No indemnification shall be made to an officer or
director or other qualified individual if such person shall have been adjudged
to be liable to the corporation unless such person acted in good faith and in a
manner that such person reasonably believed to be in or not opposed to the best
interest of the corporation and only to the extent the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought,
determined that despite the adjudication of liability such person is fairly and
reasonably entitled to such indemnification. If such person is successful on the
merits or otherwise in defense of any action, Section 145 of the DGCL provides
that such person shall be indemnified against expenses including attorneys' fees
actually and reasonably incurred by that person in connection therewith. Section
102(b)(7) of the DGCL provides that the liability of a director may not be
limited or eliminated for the breach of such director's duty of loyalty to the
corporation or its stockholders, for such director's intentional acts or
omissions not in good faith, for such director's concurrence in or vote for an
unlawful payment of a dividend or unlawful stock purchase or redemption or for
any improper personal benefit derived by the director from any transaction.
The Company's Certificate of Incorporation provides that a
director shall not be personally liable for monetary damages to the Company or
its stockholders for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for paying a
dividend or approving a stock repurchase in violation of Section 174 of the
DGCL, or (iv) for any transaction from which the director derived an improper
personal benefit. Any amendment or repeal of such provision shall not adversely
affect any right or protection of a director existing under such provision for
any act or omission occurring prior to such amendment or repeal.
The Company's Bylaws provide that the Company will indemnify
any person who was or is a party (or is threatened to be made a party) to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she
is or was or has agreed to serve at the request of the Company as a director or
officer of the Company, or is or was serving or has agreed to serve at the
request of the Company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity. The Company's
Bylaws further provide that the Company may indemnify any person who was or is a
party (or is threatened to be made a party) to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was or has agreed to
become an employee or agent of the Company, or is or was serving or has agreed
to serve at the request of the Company as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, or by reason
of any action alleged to have been taken or omitted in such capacity.
The indemnification referred to in the preceding paragraph
will be from and against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
indemnitee or on his or her behalf in connection with such action, suit or
proceeding and any appeal therefrom. However, such indemnification will only be
provided if the indemnitee acted in good faith and in a manner he or she
II-3
<PAGE>
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action, suit or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Notwithstanding the preceding
two sentences, in the case of an action or suit by or in the right of the
Company to procure a judgment in its favor (a) the indemnification referred to
in this paragraph will be limited to expenses (including attorneys' fees)
actually and reasonably incurred by such person in the defense or settlement of
such action or suit, and (b) no indemnification will be made in respect of any
claim, issue or matter as to which such person will have been adjudged to be
liable to the Company unless, and only to the extent that, the Delaware Court of
Chancery (or the court in which such action or suit was brought) determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery (or such other
court) deems proper. To the extent that a director, officer, employee or agent
of the Company has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above or in defense of any claim, issue
or matter therein, he or she will be indemnified against expenses (including
attorneys' fees) actually and reasonable incurred by him or her in connection
therewith. Expenses incurred by a director or officer in defending a civil or
criminal action, suit or proceeding will be paid by the Company in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it will ultimately be determined that he or she is not entitled to be
indemnified by the Company. Such expenses incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
The indemnification described in the preceding two paragraphs
will not be deemed exclusive of any other rights to which those indemnified may
be entitled under any Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in another capacity while holding such office, will continue as to a
person who has ceased to be a director, officer, employee or agent and will
inure to the benefit of the heirs, executors and administrators of such a
person.
The Company will maintain insurance on behalf of any person
who is or was or has agreed to serve at the request of the Company as a director
or officer of the Company, or is or was serving at the request of the Company as
a director or officer of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against, and incurred by, him
or her or on his or her behalf in any such capacity, or arising out of his or
her status as such, whether or not the Company would have the power to indemnify
him or her against such liability under the provisions of the Bylaws; provided,
however, such insurance must be available on acceptable terms, which
determination shall be made by a vote of a majority of the Board of Directors.
The Company has entered into Indemnification Agreements (the
"Indemnification Agreements") with its directors and certain of its officers
II-4
<PAGE>
(the "Indemnitees"). Under the terms of the Indemnification Agreements, the
Company has generally agreed to indemnify, and advance expenses to, each
Indemnitee to the fullest extent permitted by applicable law on the date of such
agreements and to such greater extent as applicable law may thereafter permit.
In addition, the Indemnification Agreements contain specific provisions pursuant
to which the Company has agreed to indemnify each Indemnitee (i) if such person
is, by reason of his or her status as a director, nominee for director, officer,
agent or fiduciary of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise with which such
person was serving at the request of the Company (any such status being
hereinafter referred to as a "Corporate Status"), made or threatened to be made
a party to any threatened, pending or completed action, suit, arbitration,
alternative dispute resolution mechanism, investigation or other proceeding
(each, a "Proceeding"), other than a Proceeding by or in the right of the
Company, (ii) if such person is, by reason of his or her Corporate Status, made
or threatened to be made a party to any Proceeding brought by or in the right of
the Company to procure a judgment in its favor, except that no indemnification
shall be made in respect of any claim, issue or matter in such Proceeding as to
which such Indemnitee shall have been adjudged to be liable to the Company if
applicable law prohibits such indemnification (unless and only to the extent
that a court shall otherwise determine), (iii) against expenses actually and
reasonably incurred by such person or on his or her behalf in connection with
any Proceeding to which such Indemnitee was or is a party by reason of his or
her Corporate Status and in which such Indemnitee is successful, on the merits
or otherwise, (iv) against expenses actually and reasonably incurred by such
person or on his or her behalf in connection with a Proceeding to the extent
that such Indemnitee is, by reason of his or her Corporate Status, a witness or
otherwise participates in any Proceeding at a time when such person is not a
party in the Proceeding and (v) against expenses actually and reasonably
incurred by such person in any judicial adjudication of or any award in
arbitration to enforce his or her rights under the Indemnification Agreements.
Furthermore, under the terms of the Indemnification
Agreements, the Company has agreed to pay all reasonable expenses incurred by or
on behalf of an Indemnitee in connection with any Proceeding, whether brought by
or in the right of the Company or otherwise, in advance of any determination
with respect to entitlement to indemnification and within 15 days after the
receipt by the Company of a written request from such Indemnitee for such
payment. In each of the Indemnification Agreements, the Indemnitee has agreed
that he or she will reimburse and repay the Company for any expenses so advanced
to the extent that it shall ultimately be determined that he or she is not
entitled to be indemnified by the Company against such expenses. The
Indemnification Agreements also include provisions that specify the procedures
and presumptions which are to be employed to determine whether an Indemnitee is
entitled to indemnification thereunder. In some cases, the nature of the
procedures specified in the Indemnification Agreements varies depending on
whether there has occurred a "Change in Control" (as defined in the
Indemnification Agreements) of the Company.
II-5
<PAGE>
The above discussion of the Company's Certificate of
Incorporation and Bylaws, the Indemnification Agreements and Sections 102(b)(7)
and 145 of the DGCL is not intended to be exhaustive and is respectively
qualified in its entirety by such documents and statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Reference is made to the Exhibit Index filed herewith.
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 hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
this Registration Statement.
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant with the Commission
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(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.
II-6
<PAGE>
(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 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.
II-7
<PAGE>
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933,
the undersigned 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 Maryland Heights, State of Missouri on
March 31, 1999.
UNIGRAPHICS SOLUTIONS INC.
By: /s/ John Mazzola
----------------------------------------
John J. Mazzola
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed on March 31, 1999 by the following
persons in the capacities indicated.
Signature Title Date
/s/ Jeffrey M. Heller Chairman of the Board of Director March 31, 1999
- ----------------------------
Jeffrey M. Heller
/s/ Gary B. Moore Vice Chairman of the Board of March 31, 1999
- ---------------------------- Director
Gary B. Moore
/s/ John Mazzola President, Chief Executive Officer March 31, 1999
- ---------------------------- and Director (Principal Executive
John J. Mazzola Officer)
/s/ Douglas E. Barnett Vice President and Chief Financial March 31, 1999
- ---------------------------- Officer and Secretary (Principal
Douglas E. Barnett Financial and Accounting Officer)
/s/ John A. Adams Director March 31, 1999
- ----------------------------
John A. Adams
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<PAGE>
/s/ J. Davis Hamlin Director March 31, 1999
- ----------------------------
J. Davis Hamlin
/s/ Leo J. Thomas Director March 31, 1999
- ----------------------------
Leo J. Thomas
/s/ William P. Weber Director March 31, 1999
- ----------------------------
William P. Weber
The Plan
Pursuant to the requirements of the Securities Act of 1933,
the Unigraphics Solutions Inc. 401(k) Plan has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Maryland Heights, State of Missouri, on March 31,
1999.
Unigraphics Solutions Inc. 401(k) Plan
By: /s/ John Mazzola
-------------------------------------
John J. Mazzola
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below on March 31, 1999 by the
following persons as members of the Compensation Committee of the Board of
Directors of the Registrant, the Committee thereunto duly appointed with full
power and authority to construe, interpret and administer the Plan in the
capacities and on the dates indicated.
Signatures Title Date
/s/ William P. Weber Director March 31, 1999
- ------------------------------
William P. Weber
/s/ Leo J. Thomas Director March 31, 1999
- ------------------------------
Leo J. Thomas
II-9
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- -------- -------------------------
4.1 Unigraphics Solutions Inc. 401(k) Plan.
5.1 Opinion of Randy Walti, General Counsel of Unigraphics Solutions Inc.
23.1 Consent of KPMG LLP.
23.2 Consent of J. Randall Walti, General Counsel (included in Exhibit 5.1)
The Registrant hereby undertakes that it will submit or has
submitted in a timely manner the Plan and any amendment thereto to the Internal
Revenue Service for purposes of obtaining a determination letter that the Plan
is qualified under Section 401 of the Internal Revenue Code of 1986, as amended,
and has made or will make all changes required by the Internal Revenue Service
in order to qualify the Plan.
II-10
UNIGRAPHICS SOLUTIONS INC. 401(K) PLAN
WHEREAS, prior to April 1, 1999, employees of Unigraphics
Solutions Inc. ("Company") were eligible to participate in the EDS 401(k)
Plan; and
WHEREAS, the Company desires to adopt the Unigraphics Solutions
Inc. 401(k) Plan ("Plan"), effective April 1, 1999, for the benefit of its
eligible employees; and
WHEREAS, as of April 1, 1999, employees of the Company who are
eligible to participate in the Plan will not be eligible to continue to
participate in the EDS 401(k) Plan; and
WHEREAS, on April 1, 1999, the EDS 401(k) Plan shall transfer to the
Plan the assets of the EDS 401(k) Plan which are attributable to the account
balances of individuals who are employees of the Company on April 1, 1999;
NOW, THEREFORE, the Plan is adopted effective April 1, 1999 to read
as follows:
<PAGE>
UNIGRAPHICS SOLUTIONS INC. 401(K) PLAN
TABLE OF CONTENTS
PAGE
SECTION 1 - NAME OF PLAN.....................................................1
SECTION 2 -DEFINITIONS.......................................................2
2.1. Annuity Starting Date................................................2
2.2. Automatic Survivor Benefit...........................................2
2.3. Board................................................................2
2.4. Break In Service.....................................................2
2.5. Code.................................................................2
2.6. Committee............................................................2
2.7. Company..............................................................2
2.8. Compensation.........................................................2
2.9. Controlled Group.....................................................3
2.10. Days Of Service.....................................................3
2.11. Disability Retirement Date..........................................3
2.12. Distribution Notice Period..........................................3
2.13. EDS Stock...........................................................4
2.14. EDS Stock Fund......................................................4
2.15. Employee............................................................4
2.16. Employer............................................................4
2.17. Employer Stock......................................................4
2.18. Five Percent Owner..................................................4
2.19. Highly Compensated Employee.........................................5
2.20. Hours Of Employment.................................................5
2.21. Non-Highly Compensated Employee.....................................5
2.22. Normal Retirement Date..............................................5
2.23. Participant.........................................................5
2.24. Plan Administrator..................................................5
2.25. Plan Year...........................................................6
2.26. Qualified Plan......................................................6
2.27. Service Period......................................................6
2.28. Severance Date......................................................6
2.29. Severance Period....................................................6
2.30. Trustee.............................................................6
2.31. Unigraphics Solutions Inc. Stock Fund...............................6
2.32. Valuation Date......................................................7
2.33. Year of Service.....................................................7
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SECTION 3 - ELIGIBILITY......................................................8
3.1. New Participants.....................................................8
3.2. Former Participants..................................................8
3.3. Cessation Of Participation...........................................8
SECTION 4 - CONTRIBUTIONS....................................................9
4.1. Basic Payroll Reduction Contributions................................9
4.2. Additional Payroll Reduction Contributions...........................9
4.3. Maximum Payroll Reduction Contribution...............................9
4.4. Employer Matching Contributions......................................9
4.5. Reserved............................................................10
4.6. Elections...........................................................10
4.7. Changes In And Suspension Of Payroll Reductions.....................10
4.8. Tax Deductions......................................................10
4.9. Rollover Contributions And Transfers................................11
4.10. Loans..............................................................11
4.11. Hardship Withdrawals...............................................13
4.12. Other Withdrawals..................................................15
4.13. Application for Withdrawal.........................................15
4.14. Order Of Investment Liquidation....................................15
4.15. Vesting After Withdrawals..........................................15
4.16. Spousal Consent....................................................16
SECTION 5 - DISTRIBUTIONS OF EXCESS AMOUNTS.................................17
5.1. Distribution Of Excess Elective Deferrals...........................17
5.2. Limitations On And Distributions Of Pre-Tax Contributions For Highly
Compensated Employees.................................................17
5.3. Limitations On And Distributions Of Matching Contributions For Highly
Compensated Employees.................................................18
5.4. Limitations On Multiple Use Of Alternative Limitation...............18
5.5. Special Definitions.................................................18
SECTION 6 - ALLOCATION......................................................20
6.1. Establishment Of Accounts...........................................20
6.2. Direction of Investments............................................20
6.3. Transfers Between Investment Funds..................................20
6.4. Allocation Of Earnings Or Losses....................................20
SECTION 7 - DISTRIBUTIONS AT RETIREMENT.....................................21
7.1. Normal Retirement Distributions.....................................21
7.2. Required Minimum Distributions......................................21
7.3. Required Beginning Date.............................................21
SECTION 8 - DISTRIBUTIONS AT DISABILITY.....................................22
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<PAGE>
8.1. Distributions Upon Disability.......................................22
8.2. Determination Of Disability.........................................22
SECTION 9 - DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)............23
9.1. Distributions Upon Termination Of Employment........................23
9.2. Determination Of Vested Portion.....................................23
9.3. Forfeitures.........................................................23
SECTION 10 - PAYMENT OF BENEFITS............................................25
10.1. Timing Of Distributions............................................25
10.2. Form Of Distribution...............................................26
10.3. Spousal Consent To An Optional Form Of Benefit Or Beneficiary......28
10.4. Distribution Notice................................................28
SECTION 11 - DISTRIBUTIONS AT DEATH.........................................30
11.1. Distributions Upon Death...........................................30
11.2. Distribution To Spouse.............................................30
11.3. Designation Of Beneficiary.........................................30
11.4. Beneficiary Not Designated.........................................30
11.5. Spousal Consent to Designation of Alternate Beneficiary and Election
of an Optional Method of Distribution..............................30
SECTION 12 - LEAVES OF ABSENCE AND TRANSFERS................................32
12.1. Military Leave Of Absence..........................................32
12.2. Maternity Or Paternity Absence.....................................33
12.3. Family And Medical Leave Act.......................................33
12.4. Other Leaves Of Absence............................................34
12.5. Disability Leave of Absence........................................34
12.6. Transfers..........................................................35
12.7. Acquisition Of Assets..............................................36
SECTION 13 - TRUSTEE........................................................37
SECTION 14 - ADMINISTRATION.................................................38
14.1. Appointment Of Committee...........................................38
14.2. Construction.......................................................38
14.3. Decisions And Delegation...........................................38
14.4. Meetings...........................................................38
14.5. Duties Of The Committee............................................38
14.6. Records Of The Committee...........................................39
14.7. Expenses...........................................................39
SECTION 15 - CLAIM PROCEDURE................................................40
15.1. Claim..............................................................40
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15.2. Claim Decision.....................................................40
15.3. Request For Review.................................................40
15.4. Review On Appeal...................................................41
SECTION 16 - AMENDMENT AND TERMINATION......................................42
16.1. Amendment..........................................................42
16.2. Termination; Discontinuance Of Contributions.......................42
SECTION 17 - MISCELLANEOUS..................................................43
17.1. Participants' Rights...............................................43
17.2. Spendthrift Clause.................................................43
17.3. Delegation Of Authority By Employer................................43
17.4. Distributions To Minors............................................43
17.5. Gender, Number And Headings........................................43
17.6. Separability Of Provisions.........................................44
17.7. Diversion Of Assets................................................44
17.8. Service Of Process.................................................44
17.9. Merger.............................................................44
17.10. Benefit Limitation................................................44
17.11. Commencement Of Benefits..........................................46
17.12. Qualified Domestic Relations Order................................46
17.13. Written Explanation Of Rollover Treatment.........................48
17.14. Leased Employees..................................................49
17.15. Special Distribution Option.......................................49
17.16. Limitations On Special Distribution Option........................50
17.17. Contribution On Behalf Of Controlled Group Member.................50
17.18. Construction Of Plan..............................................50
SECTION 18 - TOP-HEAVY DEFINITIONS..........................................51
18.1. Accrued Benefits...................................................51
18.2. Beneficiaries......................................................51
18.3. Determination Date.................................................51
18.4. Former Key Employee................................................51
18.5. Key Employee.......................................................51
18.6. Non-Key Employee...................................................51
18.7. Permissive Aggregation Group.......................................52
18.8. Required Aggregation Group.........................................52
18.9. Super Top-Heavy Group..............................................52
18.10. Top-Heavy Compensation............................................52
18.11. Top-Heavy Group...................................................53
SECTION 19 - TOP-HEAVY RULES................................................54
19.1. Special Top-Heavy Rules............................................54
19.2. Adjustments In Section 415 Limits..................................54
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UNIGRAPHICS SOLUTIONS INC. 401(K) PLAN
SECTION 1 - NAME OF PLAN
This Plan shall be known as the "Unigraphics Solutions Inc. 401(k)
Plan." The Plan will be considered a profit sharing plan even though
contributions are not dependent on profits.
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SECTION 2 -DEFINITIONS
2.1. Annuity Starting Date
"Annuity Starting Date" means the first day for which a benefit is
paid as an annuity. In the case of a distribution in a form of benefit other
than an annuity, the Annuity Starting Date shall be the Valuation Date as of
which the distribution is made. A Participant's Annuity Starting Date must be no
less than 30 and no more than 90 days after the date the Participant receives
the notice described in Section 10.4.
2.2. Automatic Survivor Benefit.
"Automatic Survivor Benefit," in the case of a married Participant,
means a joint and survivor annuity payable to the Participant and his or her
spouse with the amount of the annuity of the surviving spouse to be 50% of the
amount of the annuity paid to the Participant. The term "Automatic Survivor
Benefit," in the case of a non-married Participant, means an annuity payable to
the Participant for the Participant's life. Determination of marital status and
who is the Participant's spouse is determined at the Annuity Starting Date.
2.3. Board.
"Board" means the board of directors of the Company.
2.4. Break In Service.
"Break in Service" means any twelve consecutive month Severance
Period.
2.5. Code.
"Code" means the Internal Revenue Code of 1986, as amended.
2.6. Committee.
"Committee" means the Committee appointed pursuant to Section 14.1.
2.7. Company.
"Company" means Unigraphics Solutions Inc.
2.8. Compensation.
"Compensation" means the gross amount of wages, as shown on Form W-2
provided by the Employer, received during the Plan Year by an Employee after he
or she becomes a Participant for services rendered with respect to the Employer.
Such amount shall include salary reduction amounts contributed through a
Qualified Plan which meets the requirements of Section 401(k) of the Code or a
cafeteria plan which meets the requirements of Section 125 of the Code.
Compensation shall exclude:
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(a) extraordinary items such as moving expenses, overseas living
allowances, and the imputed value of group life insurance or such similar
amounts; and
(b) any benefits provided through a welfare benefit fund.
The Compensation of each Participant taken into account under the
Plan for any Plan Year shall not exceed $160,000 (as adjusted in accordance with
Section 415(d) of the Code).
2.9. Controlled Group.
"Controlled Group" means the Company and all other entities required
to be aggregated with the Company under Sections 414(b), (c), or (m) of the Code
or regulations issued pursuant to Section 414(o) of the Code. For purposes of
Section 17.10, in determining which entities shall be aggregated under Section
414(b) or (c) of the Code, the modifications made by Section 415(h) of the Code
shall be applied.
2.10. Days Of Service.
"Days of Service" means the total number of days in a person's
Service Periods, whether or not such periods were completed consecutively. Days
of Service shall also include the number of days in all Severance Periods, if
any, in which:
(a) The Employee severs from service by reason of quit, discharge or
retirement and immediately prior to such quit, discharge or retirement was
not absent from service if the Employee performs an Hour of Employment
within twelve months of the date of such severance; or
(b) Notwithstanding (a) above, the Employee severs from service by
reason of quit, discharge or retirement during an absence from service of
twelve months or less for any reason other than a quit, discharge,
retirement or death if the Employee performs an Hour of Employment within
twelve months of the date on which the Employee was first absent from
service.
2.11. Disability Retirement Date.
"Disability Retirement Date" means the date on which a Participant
is determined by the Committee to be permanently and totally disabled in
accordance with Section 8.2 and has terminated his or her employment.
2.12. Distribution Notice Period.
"Distribution Notice Period" means the period beginning not more
than 90 days and ending not less than 30 days before the Valuation Date as of
which distribution is made.
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2.13. EDS Stock.
"EDS Stock" means the common stock, par value $0.01 per share, of
EDS and any other security of EDS which is a Qualifying Employer Security, as
defined in Section 4975(e)(8) of the Code.
2.14. EDS Stock Fund.
"EDS Stock Fund" means an investment fund made available under the
Plan solely for the purpose of permitting a Participant to retain his or her
investment as of March 31, 1999, in the EDS Stock Fund under the EDS 401(k)
Plan. Up to 100% of the assets of such fund may be held in EDS Stock. A
Participant will be allowed to transfer amounts out of the EDS Stock Fund, but
will not be allowed to transfer amounts into such fund.
2.15. Employee.
"Employee" means any person classified as an employee by the Employer other
than an individual who is:
(a) a resident or nonresident alien who is not subject to
United States federal income taxation on Compensation;
(b) a citizen of a foreign country who is employed by the
Employer within the United States, except if such Employee is an
expatriate;
(c) a leased employee or a person who performs services for
the Employer pursuant to an arrangement wherein the individual is
designated by the Employer as a consultant or independent contractor; or
(d) an individual (i) whose job position is classified by the
Employer as temporary, co-op, part-time working fewer than 15 hours per
week, or intern and (ii) who has not completed 1,000 Hours of Employment
within his or her first twelve months of employment or during a Plan Year.
2.16. Employer.
"Employer" means the Company or any other member of the Controlled
Group which has, with the consent of the Board, adopted the Plan.
2.17. Employer Stock.
"Employer Stock" means the common stock of Unigraphics Solutions
Inc.
2.18. Five Percent Owner.
"Five Percent Owner" means any person who owns (or is considered as
owning within the meaning of Section 318 of the Code) more than five percent of
the outstanding stock of any corporation in the Controlled Group or stock
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possessing more than five percent of the total combined voting power of all
stock of any corporation in the Controlled Group or who owns more than five
percent of the capital or profits interest of any unincorporated entity in the
Controlled Group.
2.19. Highly Compensated Employee.
Highly Compensated Employee means any Participant who (i) was a
Five-Percent Owner at any time during either the determination year or the
look-back year; or (ii) received compensation within the meaning of Code Section
415(c)(3) from the Employer in excess of $80,000 (as adjusted pursuant to Code
Section 415(d)) during the look-back year and, if the Employer so elects for the
look-back year, was in the top-paid group of Employees for such look-back year.
For purposes of this Section, the determination year shall be the
Plan Year, and the look-back year shall be the 12 month period immediately
preceding the determination year. The determination of who is a Highly
Compensated Employee, including the determination of the number and identity of
Employees in the top-paid group and the compensation that is considered, will be
made in accordance with Code Section 414(q) and the regulations thereunder.
2.20. Hours Of Employment.
"Hours of Employment" means an hour for which a person is directly
or indirectly paid, or entitled to payment, by the Employer for the performance
of duties.
2.21. Non-Highly Compensated Employee.
Non-Highly Compensated Employee means any Employee who is not a
Highly Compensated Employee but who is eligible to participate in the Plan.
2.22. Normal Retirement Date.
"Normal Retirement Date" means the date on which a Participant
terminates his or her employment with the Employer (except by death or permanent
and total disability as defined in Section 8.2) provided such date is on or
after such Participant's attainment of age 65.
2.23. Participant.
"Participant" means an Employee who has satisfied the eligibility
requirements of Section 3 and who has not become a former Participant under
Section 3.3.
2.24. Plan Administrator.
"Plan Administrator" means the Committee.
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2.25. Plan Year.
"Plan Year" means the period commencing on April 1, 1999 and ending
on December 31, 1999. Thereafter, Plan Year means the 12-month period commencing
on January 1 and ending on December 31.
2.26. Qualified Plan.
"Qualified Plan" means any plan qualified under Section 401 of the
Code. For purposes of Sections 18 and 19 only, the term "Qualified Plan" also
means a simplified employee pension described in Section 408(k) of the Code.
2.27. Service Period.
"Service Period" means the period of time commencing on the date on
which a person first performs an Hour of Employment with the Employer and ending
on the person's Severance Date.
2.28. Severance Date.
"Severance Date" means the date on which the earliest of the
following occurs:
(a) A person employed by the Employer quits, retires, is
discharged or dies or
(b) The first anniversary of the first date of a period in
which the person is not credited with Days of Service and remains absent
from service with the Employer (with or without pay) for any reason other
than quit, retirement, discharge or death.
2.29. Severance Period.
"Severance Period" means the period of time commencing the day after
a person's Severance Date and ending on the day before the person performs an
Hour of Employment.
2.30. Trustee.
"Trustee" means the insurer or trustee or any successor trustee
appointed pursuant to Section 13 hereof.
2.31. Unigraphics Solutions Inc. Stock Fund.
"Unigraphics Solutions Inc. Stock Fund" means an investment fund
made available under the Plan in accordance with Section 6.2.1. Up to 100%
of the assets of such fund may be invested in Employer Stock.
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2.32. Valuation Date.
"Valuation Date" means each business day.
2.33. Year of Service.
"Year of Service" means one Year of Service for each 365 Days of
Service (whether or not consecutive) accrued by a person. No more than one Year
of Service may be earned in any Plan Year for any purpose under the Plan.
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SECTION 3 - ELIGIBILITY
3.1. New Participants.
Each Employee shall become a Participant hereunder as of the later
of his or her date of hire and April 1, 1999.
3.2. Former Participants.
A former Participant who is reemployed by the Employer shall become
a Participant on the date he or she is reemployed as an Employee.
3.3. Cessation Of Participation.
A person shall cease to be a Participant and shall become a former
Participant when he or she
(a) has ceased to be employed by the Employer, and
(b) has no undistributed account balances under the Plan.
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SECTION 4 - CONTRIBUTIONS
4.1. Basic Payroll Reduction Contributions.
A Participant may elect to have up to 6% of his or her Compensation
contributed by the Employer to the Plan on a pre-tax basis through payroll
reductions. Each Participant shall elect on forms provided by the Committee in
increments of 1% the percentage of his or her Compensation under this Section to
be credited to his or her Before-Tax Contribution Account.
4.2. Additional Payroll Reduction Contributions.
A Participant who has elected to have 6% of his or her Compensation
contributed by the Employer to the Plan under Section 4.1 may elect to have up
to an additional 14% of his or her Compensation contributed by the Employer to
the Plan on a pre-tax basis through payroll reductions. Each Participant shall
elect on forms provided by the Committee in increments of 1% the percentage of
his or her Compensation under this Section to be credited to his or her
Before-Tax Contribution Account.
4.3. Maximum Payroll Reduction Contribution.
The maximum amount which may be contributed to the Plan by a
Participant on a pre-tax basis under Sections 4.1 and 4.2 and any other
Qualified Plan maintained by the Employer in any calendar year is limited to
$10,000 (or such higher amount prescribed by applicable law). If a Participant's
pre-tax contributions reach this maximum, the Committee shall stop the
Participant's payroll reduction contributions for the remainder of the calendar
year.
4.4. Employer Matching Contributions.
The Employer will contribute to the Plan an amount equal to 25% of
the amount by which each Participant elects to have his or her Compensation
reduced under Section 4.1. Any such contributions shall be paid to the Trustee
as soon as practicable following the end of each pay period. At the end of each
Plan Year, the Administrator shall contribute an amount, if any, under this
Section 4.4 equal to:
(a) An amount equal to the maximum matching contribution the
Participant could have received under this Section 4.4 had his or her
pre-tax contributions been contributed ratably from the beginning of the
calendar year through the end of such calendar year, minus
(b) The amount of matching contributions previously made on behalf
of the Participant from the beginning of the calendar year through the end
of such calendar year.
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4.5. Reserved.
4.6. Elections.
Each election by a Participant under Sections 4.1 and 4.2 shall be
effective until suspended or amended. Each election shall be effective only when
made in accordance with the rules and procedures established by the Committee.
4.7. Changes In And Suspension Of Payroll Reductions.
4.7.1. Changes In Payroll Reductions.
Each Participant's payroll reduction percentages under
Sections 4.1 and 4.2 shall continue in effect until the Participant shall
change such percentages. A Participant may at any time in his or her
discretion change such percentages in accordance with the rules and
procedures established by the Committee.
4.7.2. Suspension Of Payroll Reductions.
A Participant may at any time suspend his or her contributions
in accordance with the rules and procedures established by the Committee.
4.8. Tax Deductions.
All Employer contributions are made conditioned upon their
deductibility for Federal income tax purposes under Section 404 of the Code.
Amounts contributed by an Employer shall be returned to the Employer from the
Plan by the Trustee under the following circumstances:
(a) If a contribution was made by an Employer by a mistake of fact,
the excess of the amount of such contribution over the amount that would
have been contributed had there been no mistake of fact shall be returned
to the Employer within one year after the payment of the contribution; and
(b) If an Employer makes a contribution which is not deductible
under Section 404 of the Code, such contribution (but only to the extent
disallowed) shall be returned to the Employer within one year after the
disallowance of the deduction.
Earnings attributable to the contribution shall not be returned to
the Employer, but losses attributable to such excess contribution shall be
deducted from the amount to be returned. In the event (a) or (b) above apply,
the Employer will distribute any salary reduction amounts returned to the
Employer (less any losses) to the Employees who elected to reduce their salary
by such amounts.
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4.9. Rollover Contributions And Transfers.
The Committee may direct the Trustee to accept from or on behalf of
an Employee any cash or other assets the receipt of which would constitute a
rollover contribution as defined in Section 408(d)(3)(A)(ii) of the Code or an
eligible rollover contribution as defined in Section 402(c)(4) of the Code which
is excludable from income under Section 402(c)(1) of the Code. The Committee may
also direct the Trustee to accept from the trustee of another Qualified Plan a
direct transfer of cash or other assets which does not constitute an eligible
rollover contribution. Any contributions under this Section shall be segregated
in a separate account and shall be fully vested at all times. Unless accepted on
a Valuation Date, the assets of such account will be segregated from the other
assets of the Plan until the Valuation Date next following the date they are
accepted, and thereafter will share in the allocation of earnings and losses
under Section 6.4. Such amounts shall not be considered as a contribution by a
Participant for purposes of Sections 4.1 or 17.10.
4.10. Loans.
The Committee, as administrator of the loan program, shall make
loans available to Participants who are employed with the Employer on the date
the loan is made (and subject to the terms of this Section 4.10, to an
interested party as defined in Section 3(14) of the Employee Retirement Income
Security Act of 1974, even if such interested party is no longer an Employee)
pursuant to a uniform and non-discriminatory policy. Notwithstanding anything in
this Section 4.10 to the contrary, amounts in a Participant's Matching
Contribution Account of which the Participant may not direct the investment
pursuant to Section 6.2 are not available for a loan under this Section 4.11.
Notwithstanding the above, loans shall not be made available to highly
compensated employees (as defined in section 414(q) of the Code) in an amount
greater than the amount made available to other employees. All loans shall
comply with the following terms and conditions.
4.10.1. Loan Applications.
A Participant may apply to the Committee for a loan in
accordance with the rules and procedures established by the Committee and
subject to the spousal consent requirements set forth in Section 4.16.
4.10.2. Criteria For Approval.
The Committee shall determine whether a Participant qualifies
for a loan, applying such criteria as a commercial lender of funds would
apply in like circumstances with respect to the Participant and his or her
general ability to repay the loan. To assist the Committee in making this
determination the Participant shall be required to provide such supporting
information deemed necessary by the Committee.
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4.10.3. Loan Amount Limits.
No loan shall be made if immediately after the loan the unpaid
balance of all loans by this Plan and all other plans maintained by the
Controlled Group to the Participant would exceed the lesser of
(a) $50,000, or
(b) 50% of the vested portion of the Participant's accounts
under this Plan.
Notwithstanding the foregoing, the $50,000 limitation in (1)
above shall be reduced by the highest outstanding loan balance for the
one-year period ending on the day before a new loan is made minus the
outstanding balance of existing loans to the Participant on the date of
the new loan.
4.10.4. Number of Loans Permitted.
The number of loans available to a Participant shall be
limited to (a) four (4) outstanding loans under the Plan as of each day
during the Plan Year and (b) two (2) new loans issued in each Plan Year.
4.10.5. Repayment Period.
A fixed period for repayment of the loan not in excess of five
years shall be specified in the loan agreement; provided, that if the loan
is used to acquire any dwelling unit which within a reasonable time is
used as a principal residence of the Participant, the specified repayment
period may be longer than five years.
4.10.6. Manner And Timing Of Repayments.
Loans will be repaid (principal and interest) through
substantially equal payroll deductions; provided, that a Participant may
at any time prepay the entire amount due on the loan in one lump sum. Upon
a Participant's termination of employment, the entire loan balance shall
become due and payable immediately and shall be set off against any
distribution due to the Participant.
4.10.7. Security.
Each loan shall be secured by assignment of the Participant's
accounts in the Plan and by the Participant's collateral promissory note
for the amount of the loan, including interest thereon, payable to the
order of the Trustee. However, in no event shall more than 50% of a
Participant's vested interest in the Plan (determined immediately after
origination of the loan) be used as security for the loan.
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4.10.8. Interest.
Each loan shall bear a reasonable rate of interest
commensurate with the prevailing interest rate charged on similar
commercial loans under like circumstances by persons in the business of
lending money.
4.10.9. Minimum Loan.
The minimum amount of any loan shall be $500.00.
4.10.10. Order Of Investment Liquidation.
A Participant's loan amount shall be made by liquidating the
Participant's investments in the order determined by the Employer.
4.10.11. Loan Fees.
The Trustee shall deduct a processing fee in the amount of
$25.00 from loan proceeds before paying such amount to a Participant.
4.10.12. Loans Limited To Employees.
Except as otherwise provided in this Section 4.10, no loan
shall be made to any Participant who has terminated employment with the
Employer.
4.10.13. Default.
Generally, a default shall occur upon the failure of a
Participant to timely remit payments under the loan when due. In such
event, the Trustee shall take such reasonable actions which a prudent
fiduciary in like circumstances would take to protect and preserve Plan
assets, including foreclosing on any collateral and commencing such other
legal action for collection which the Trustee deems necessary and
advisable. However, the Trustee shall not be required to commence such
actions immediately upon a default. Instead, the Trustee may grant the
Participant reasonable rights to cure any default, provided such actions
would constitute a prudent and reasonable course of conduct for a
professional lender in like circumstances. In addition, if no risk of loss
of principal or income would result to the Plan, the Trustee may choose,
in its discretion, to defer enforcement proceedings. If the qualified
status of the Plan is not jeopardized, the Trustee and the Committee may
treat a loan that has been defaulted upon and not cured within a
reasonable period of time as a deemed distribution from the Plan.
4.11. Hardship Withdrawals.
A Participant in the employment of the Employer may withdraw as of
any date up to an amount equal to his or her pre-tax contributions to the Plan
(but not the earnings thereon), the Participant's Rollover Account, and the
vested portion of his or her Matching Contribution Account (but not the amounts
invested in the EDS Stock Fund which are subject to Section 6.2.2) if the
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Participant demonstrates a substantial hardship to the Committee and, if the
Participant is married, obtains his or her spouse's consent in accordance with
Section 4.16. The Committee will grant a distribution on account of hardship
only if the distribution is made on account of an immediate and heavy financial
need of the Participant and is necessary to satisfy such financial need.
4.11.1. Determination of Immediate and Heavy Financial Need.
A distribution will be deemed to be made on account of an
immediate and heavy financial need of the Participant only if the
distribution is on account of:
(a) expenses for medical care 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 necessary for these persons to obtain medical
care described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(c) the payment of tuition and related educational fees
(excluding expenses for room and board) for the next 12 months of
post-secondary education for the Participant, the Participant's
spouse, or the Participant's children or dependents (as defined in
Section 152 of the Code); or
(d) payments necessary to prevent the eviction of the
Participant from his or her principal residence or foreclosure on
the mortgage of the Participant's principal residence.
4.11.2. Amount Necessary To Satisfy Financial Need.
A distribution will be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if the following
requirements are satisfied:
(a) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant (which may
include any amounts necessary to pay any federal, state or local
income tax or penalties reasonably anticipated to result from the
distribution); and
(b) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the
Controlled Group.
In addition a Participant who receives a hardship withdrawal
will be unable to make pre-tax contributions to the Plan or any other
qualified or nonqualified plan of deferred compensation maintained by the
Controlled Group, including stock option and stock purchase plans and a
cash or deferred arrangement that is part of a cafeteria plan within the
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meaning of Section 125 of the Code (but not the cafeteria plan itself),
for a period of twelve months after the Valuation Date as of which the
hardship distribution is made. Moreover, the maximum amount of a
Participant's pre-tax contributions to the Plan or any other plan
maintained by the Controlled Group for the calendar year following the
calendar year of the hardship withdrawal may not exceed $10,000 (or such
higher amount prescribed by applicable law) reduced by the amount of such
Participant's pre-tax contributions for the calendar year of the hardship
withdrawal.
4.12. Other Withdrawals.
If a Participant is in the employment of the Employer, has reached
age 59 1/2, he or she may, as of any date, upon written request, withdraw all
or any part of his or her vested account balances (except the portion of such
Participant's Matching Contribution Account invested in the EDS Stock Fund which
is subject to Section 6.2.2).
4.13. Application for Withdrawal.
An application for a withdrawal must be received by the Committee in
accordance with the rules and procedures established by the Committee.
4.14. Order Of Investment Liquidation.
The Employer shall establish rules for determining the portion of
each fund in which the Participant's accounts are invested which shall be
liquidated to provide the proceeds for any withdrawal to the Participant.
4.15. Vesting After Withdrawals.
If a withdrawal under Section 4.11 or 4.12 is made by a Participant
whose Matching Contribution Account was not 100% vested at the time of such
withdrawal, then the Employer shall separately record the portion of his or her
Matching Contribution Account which was not vested at the time of the
withdrawal, and the vested amount of such portion from time to time shall equal
an amount ("X") determined by the following formula:
X = P(AB + (R X D)) - (R X D)
For purposes of applying such formula: "P" is the vested percentage at the
relevant time; "AB" is the account balance at the relevant time; "D" is the
amount previously withdrawn by the Participant; and "R" is the ratio of the
account balance at the relevant time to the account balance after the
withdrawal. If a person who has received a withdrawal hereunder is subsequently
entitled to an allocation of Employer contributions, the Employer shall
separately record such contributions and vesting with respect to such
contributions shall be in accordance with Section 9.2.
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4.16. Spousal Consent.
Within the 90-day period before any loan to or withdrawal by a
Participant, the spouse of the Participant must consent in writing to the
withdrawal or to the use of the Participant's accounts as security for the
loan. The spouse's consent must acknowledge the effect of the loan or
withdrawal and must be witnessed by a notary public or plan
representative. In the case of a loan, no consent need be obtained if the
total of the Participant's accounts subject to the security is not in
excess of $5,000. In the event the Participant has no spouse or the
Participant's spouse cannot be located, no consent is necessary for a loan
or a withdrawal. In the event the Participant has no spouse or the
Participant's spouse cannot be located, the Participant must certify a
statement to that effect on a form provided by the Committee in order for
his or her loan application or withdrawal request to be effective.
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SECTION 5 - DISTRIBUTIONS OF EXCESS AMOUNTS
5.1. Distribution Of Excess Elective Deferrals.
If a Participant's elective deferrals for any calendar year exceed
$10,000 (or such higher amount prescribed by applicable law), then the
Participant may file an election form prescribed by the Committee with the
Employer designating in writing the amount of such excess elective deferrals to
be distributed from this Plan. Any such election form must be filed with the
Employer no later than the first March 1 following the close of such calendar
year in order for the Employer to act on it. If such an election form is timely
filed, the Trustee shall distribute to the Participant the amount of such excess
elective deferrals which the Participant has allocated to this Plan together
with any income or less any loss allocable to such amount on or before the first
April 15 following the close of such calendar year. In the case of a Highly
Compensated Employee, any matching contributions which were contributed on
account of the elective deferrals being distributed will be forfeited, even if
such matching contributions are vested. For purposes of the preceding, the
income or loss allocable to such excess amount will be determined under such
reasonable method as the Committee shall establish, provided the method does not
discriminate in favor of Highly Compensated Employees, is used consistently for
all Participants and for all corrective distributions under the Plan for the
Plan Year, and is used by the Plan for allocating income to Participants'
accounts.
5.2. Limitations On And Distributions Of Pre-Tax Contributions For Highly
Compensated Employees.
The Committee is authorized to reduce to the extent necessary the
maximum contributions under Sections 4.1 and 4.2 for Highly Compensated
Employees prior to the close of the Plan Year if the Committee reasonably
believes that the reduction is necessary to prevent the Plan from failing Code
Section 401(k)(3). Such adjustments shall be made in accordance with rules
prescribed by the Employer.
If the Plan fails to satisfy Code Section 401(k)(3), the Plan shall
correct the failure within 12 months after the last day of such Plan Year under
any method or combination of methods allowed under Code Section 401(k)(8) or
Treasury Regulation Section 1.401(k)-1(f), taking into account any adjustments
necessary due to changes to Code Section 401(k)(8)(C) that are not reflected in
the regulations. For purposes of this Section 5.2, the actual deferral
percentage of Non-Highly Compensated Employees shall be determined as of the
Plan Year preceding the Plan Year for which the Plan must satisfy one of the
tests in Code Section 401(k)(3), unless the Employer elects to determine such
actual deferral percentage as of the Plan Year for which the Plan must satisfy
one of the tests in Code Section 401(k)(3). Any such election shall not be
changed except as provided by the Secretary of the Treasury. In the case of the
first Plan Year for which the Plan must satisfy one of the tests in Code Section
401(k)(3), the actual deferral percentage for Non-Highly Compensated Employees
as of the Plan Year preceding such first Plan Year shall be deemed to be 3%,
unless the Employer elects to determine such actual deferral percentage for
Non-Highly Compensated Employees as of such first Plan Year.
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5.3. Limitations On And Distributions Of Matching Contributions For Highly
Compensated Employees.
The Committee is authorized to reduce to the extent necessary the
maximum amount of matching contributions under Section 4.4 contributed on behalf
of any Highly Compensated Employee prior to the close of the Plan Year if the
Committee reasonably believes that such adjustment is necessary to prevent the
Plan from failing Code Section 401(m)(2). Such reduction shall be made in
accordance with rules prescribed by the Employer.
If the Plan fails to satisfy Code Section 401(m)(2), the Plan shall
correct the failure within 12 months after the last day of such Plan Year under
any method or combination of methods allowed under Treasury Regulation
1.401(m)-1(e), taking into account any adjustments necessary due to changes to
Code Section 401(m)(6)(c) that are not reflected in the regulations. For
purposes of this Section 5.3, the actual contribution percentage of Non-Highly
Compensated Employees shall be determined as of the Plan Year preceding the Plan
Year for which the Plan must satisfy one of the tests in Code Section 401(m)(2),
unless the Employer elects to determine such actual contribution percentage as
of the Plan Year for which the Plan must satisfy one of the tests in Code
Section 401(m)(2). Any such election shall not be changed except as provided by
the Secretary of the Treasury. In the case of the first Plan Year for which the
Plan must satisfy one of the tests in Code Section 401(m)(2), the actual
contribution percentage for Non-Highly Compensated Employees as of the Plan Year
preceding such first Plan Year shall be deemed to be 3%, unless the Employer
elects to determine such actual contribution percentage for Non-Highly
Compensated Employees as of such first Plan Year.
5.4. Limitations On Multiple Use Of Alternative Limitation.
5.4.1. Determination Of Multiple Use.
The Committee will determine whether or not multiple use of
the alternative limitation has occurred. Such determination will be made
in accordance with Section 401(m)(9) of the Code.
5.4.2. Correction Of Multiple Use.
If a multiple use of the alternative limitation occurs, the
Committee shall correct such multiple use by reducing the actual
contribution percentages of Highly Compensated Employees in the manner set
forth in Section 5.3 so that there is no multiple use of the alternative
limitation.
5.5. Special Definitions.
All terms used in this Section 5 shall have the meaning given such
terms in Code Sections 401(k) and 401(m) and the regulations thereunder.
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<PAGE>
5.5.1. Plan Restructuring.
The Plan may be disaggregated under Section 1.410(b)-6(b)(3)
and Section 1.410(b)-7(c)(3) of the Treasury Regulations for any Plan Year
in order to pass the actual contribution percentage and actual deferral
percentages tests set forth in this Section.
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SECTION 6 - ALLOCATION
6.1. Establishment Of Accounts.
The Committee shall establish and maintain for each Participant a
Before-Tax Contribution Account, a Matching Contribution Account, and a Rollover
Account. All amounts by which an Employee elects to have his or her salary
reduced under Sections 4.1 and 4.2 shall be credited to his or her Before-Tax
Contribution Account, and all Employer contributions under Section 4.4 shall be
credited to his or her Matching Contribution Account. All direct transfer and
rollover amounts received on behalf of a Participant under Section 4.9 shall be
credited to his or her Rollover Account; provided that, amounts transferred from
the EDS 401(k) Plan held in a Participant's Elective Contribution Account and
Employer Matching Contribution Account under such plan shall be allocated to a
Participant's Before-Tax Contribution Account and Matching Contribution Account,
respectively.
6.2. Direction of Investments.
6.2.1. Participant's Selection of Investment Fund.
Subject to Sections 6.2.2, each Participant shall designate in
1% increments the percentages of contributions under Section 4 for such
Plan Year allocable to his or her accounts which are to be invested in
such investment funds as are made available by the Company. Such a
designation shall be made in accordance with the rules and procedures
established by the Plan Administrator. Any such designation shall continue
in effect unless changed in the same manner by the Participant.
6.2.2. EDS Stock Fund.
Notwithstanding any other provision of the Plan to the
contrary, amounts transferred to the Plan to a Participant's Matching
Contribution Account from the EDS 401(k) Plan which are allocated to the
EDS Stock Fund shall not be subject to Participant direction under Section
6.2.1 until the second anniversary of the date such amounts were
contributed by EDS to such Participant's EDS Stock Fund under the EDS
401(k) Plan.
6.3. Transfers Between Investment Funds.
Subject to Sections 2.14 and 6.2.2, as of any date, a Participant
may, in accordance with the rules and procedures established by the Committee,
elect to transfer all or any portion of his or her accounts in an investment
fund to any other investment fund. Such transfers shall be subject to such
reasonable requirements as may be established by the Trustee or recordkeeper.
6.4. Allocation Of Earnings Or Losses.
All appreciation or depreciation in the fair market value of the
investment funds shall be allocated to accounts based on account balances on a
daily basis.
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SECTION 7 - DISTRIBUTIONS AT RETIREMENT
7.1. Normal Retirement Distributions.
Upon a Participant's Normal Retirement Date, the Participant's
accounts shall become fully vested (if not already fully vested) and shall be
distributed to him or her in accordance with Section 10.1.2.
7.2. Required Minimum Distributions.
Notwithstanding anything to the contrary contained in the Plan, the
entire interest of a Participant will be distributed in accordance with Section
401(a)(9) of the Code and the regulations thereunder beginning no later than the
Participant's Required Beginning Date as determined under Section 7.3 below.
7.3. Required Beginning Date.
The Required Beginning Date of a Participant shall be:
(a) in the case of a Participant who is not a Five Percent Owner
with respect to the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2, the April 1 following the calendar year
in which occurs the later of the date the Participant attains age 70 1/2
and the date on which the Participant terminates employment; or
(b) in the case of a Participant who is a Five Percent Owner with
respect to the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2, the April 1 following the calendar year
in which the Participant attains age 70 1/2.
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<PAGE>
SECTION 8 - DISTRIBUTIONS AT DISABILITY
8.1. Distributions Upon Disability.
If a Participant becomes permanently and totally disabled while in
the employment of the Employer, his or her accounts shall become fully vested
(if not already fully vested), and shall be distributed to him or her in
accordance with Section 10.1.
8.1.1. Deemed Termination.
A Participant who is permanently and totally disabled as
described in Section 8.2 while in the employment of the Employer shall be
deemed to have terminated such employment on the date the Committee
determines that he or she is permanently and totally disabled.
8.2. Determination Of Disability.
A Participant shall be considered permanently and totally disabled
only if he or she is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or to be of long-continued and
indefinite duration. Whether a Participant is permanently and totally
disabled shall be determined by the Committee, in its sole discretion,
based upon an independent opinion considered acceptable to the Committee.
Such determinations shall be made in a uniform manner pursuant to the
policies established by the Committee and shall be final and conclusive.
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<PAGE>
SECTION 9 - DISTRIBUTIONS AT TERMINATION OF EMPLOYMENT (VESTING)
9.1. Distributions Upon Termination Of Employment.
A Participant whose employment with the Employer is terminated prior
to the earliest of his or her death, Disability Retirement Date or Normal
Retirement Date shall receive the vested portion of his or her accounts in
accordance with Section 10.1.1.
9.2. Determination Of Vested Portion.
(a) A Participant's Rollover Account and Before-Tax Contribution
Account shall be 100% vested and nonforfeitable at all times.
(b) The portion of a Participant's Matching Contribution Account
which shall be vested and nonforfeitable shall be determined in accordance
with the following schedule:
<TABLE>
<CAPTION>
<S> <C> <C>
Years of Service Percentage of Account Vested
---------------- ----------------------------
1 0%
2 40%
3 60%
4 80%
5 100%
</TABLE>
(c) Notwithstanding any provision herein to the contrary, a
Participant's accounts shall be 100% vested and nonforfeitable upon such
Participant's Normal Retirement Date.
9.3. Forfeitures.
The nonvested portion of the Matching Contribution Account of a
Participant whose employment with the Employer is terminated prior to the
earliest of his or her death, Disability Retirement Date, or Normal Retirement
Date shall be forfeited immediately when such Participant has both terminated
employment and received a distribution of his or her entire vested account
balances or when such Participant incurs five consecutive one-year Breaks in
Service, whichever first occurs. The nonvested amounts shall be placed in a
separate account until forfeited and shall be credited with an allocation of
earnings and losses pursuant to Section 6.4. If the Participant is not employed
again by the Employer on the date a forfeiture occurs under this Section, any
forfeited amounts plus earnings and losses thereon shall be used to reduce
future Employer contributions. Following such forfeiture, the Participant shall
be 100% vested in the balance, if any, of his or her accounts. If a Participant
terminates employment with no vested interest in his or her Matching
Contribution Account, such Participant shall be treated as receiving a
distribution of the vested portion of his or her Matching Contribution Account
23
<PAGE>
on the last day of the Plan Year in which his or her termination occurs,
provided he or she is not employed by the Employer on such date.
If a person who has incurred a forfeiture hereunder is reemployed by
the Employer during a Plan Year before he or she has incurred five consecutive
Breaks in Service, such individual's previously forfeited amounts shall be
restored. Restoration will first be made out of any unallocated forfeitures and,
if such forfeitures are insufficient to restore such person's account balance,
restoration shall be made through an Employer contribution.
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<PAGE>
SECTION 10 - PAYMENT OF BENEFITS
10. Payment Of Benefits.
10.1. Timing Of Distributions.
10.1.1. Termination Before Normal Retirement Date.
If a Participant's employment is terminated prior to his or
her Normal Retirement Date for any reason other than his or her death, and
if the Participant's vested accounts exceed $5,000, the Participant shall
receive the notice described in Section 10.4 as well as benefit election
forms during the Distribution Notice Period coinciding with or next
following the date he or she terminates employment. If the Participant
properly completes his or her benefit election forms and returns them in
accordance with the rules and procedures established by the Employer,
distribution of his or her vested accounts will commence in the form
elected by the Participant. If a Participant fails to properly complete
and timely return his or her election forms when he or she is first
eligible to receive a distribution, distribution of his or her accounts
will commence in the form of an Automatic Survivor Benefit on his or her
Required Beginning Date, which shall be his or her Annuity Starting Date.
Notwithstanding the preceding, the Participant may notify the Employer at
any time after his or her termination of employment but prior to his or
her Required Beginning Date that he or she wants to receive the notice
described in Section 10.4. The Committee shall distribute such notice and
benefit election forms during the first Distribution Notice Period
following such request.
10.1.2. Distributions To Participants Terminating Employment On Or
After Normal Retirement Date.
If a Participant's employment is terminated on or after his or
her Normal Retirement Date but before his or her Required Beginning Date
for any reason other than his or her death, and if the Participant's
accounts exceed $5,000 as of his or her termination date, the Participant
shall receive the notice described in Section 10.4 as well as benefit
election forms during the Distribution Notice Period coinciding with or
next following the date he or she terminates employment. If the
Participant properly completes his or her benefit election forms and
returns them in accordance with the rules and procedures established by
the Employer, the Participant's benefits will commence in the form elected
by the Participant. If the Participant fails to properly complete and
return his or her benefit election forms when he or she is first eligible
to receive a distribution, distribution of his or her accounts will be
made in the form of an Automatic Survivor Benefit commencing on his or her
Required Beginning Date.
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<PAGE>
10.1.3. Distributions To Participants Remaining Employed At
Required Beginning Date.
If a Participant remains employed by the Employer until the
Distribution Notice Period immediately preceding the Valuation Date
coinciding with or immediately preceding his or her Required Beginning
Date, the Participant shall receive the notice described in Section 10.4
as well as benefit election forms during such Distribution Notice Period.
If the Participant completes his or her benefit election forms and returns
them before the Valuation Date immediately following such Distribution
Notice Period, the Participant's benefits will commence in the form
elected by the Participant as of such Valuation Date. If the Participant
fails to properly complete and return his or her benefit election forms on
or before the Valuation Date immediately following such Distribution
Notice Period, distribution of his or her accounts will be made in the
form of an Automatic Survivor Benefit commencing on his or her Required
Beginning Date.
10.2. Form Of Distribution.
10.2.1. Automatic Survivor Benefit.
In the case of a Participant whose employment with the
Employer is terminated for a reason other than his or her death, unless
such Participant has elected to the contrary in accordance with Sections
10.1 and 10.3 before his or her Annuity Starting Date, the Participant
shall be deemed to have elected an Automatic Survivor Benefit, and the
Committee shall direct the Trustee to apply the Participant's vested
accounts to purchase an Automatic Survivor Benefit from a legal reserve
life insurance company which uses unisex actuarial tables with such
Automatic Survivor Benefit commencing as of the Participant's Annuity
Starting Date. The Participant's accounts shall be closed after the
purchase of such Automatic Survivor Benefit and the benefits to such
Participant or his or her spouse shall be solely the benefits provided
under the Automatic Survivor Benefit.
10.2.2. Optional Methods Of Distribution.
In lieu of the distribution of his or her accounts in the form
of an Automatic Survivor Benefit, a Participant may elect, in accordance
with Sections 10.2.3, 10.2.4 and 10.2.5 below, on a form furnished by the
Committee for that purpose, to have his or her accounts distributed in one
of the following forms:
(a) a lump sum.
(b) in the case of a married Participant, an annuity contract
payable for the Participant's life issued by a legal reserve life
insurance company which uses unisex actuarial tables to calculate
the cost of annuities.
(c) payments over a period of time not to exceed the joint
life expectancy of the Participant and his or her surviving spouse,
if any, or designated beneficiary. In the event that a Participant
26
<PAGE>
who elects this optional form of benefit dies before the entire
amount in his or her accounts have been distributed, distribution
will continue to be made to such Participant's surviving spouse, if
any, or designated beneficiary, unless such Participant's surviving
spouse or beneficiary elects to receive such remaining amounts in a
lump sum.
If the Participant is married and wishes to elect an optional
form of benefit under this Section, he or she must secure the consent of
his or her spouse as provided in Section 10.3.
10.2.3. Timely Election.
An option set forth in 10.2.2 above must be elected on a form
furnished by the Committee for that purpose within the 90 day period
ending on the Annuity Starting Date, but not before the Participant
receives the notice described in Section 10.4.
10.2.4. Effective Date Of Option.
An option selected under 10.2.2 above shall become effective
on the Annuity Starting Date.
10.2.5. Change Or Revocation.
An election made under this Section may not be validly changed
or revoked except as follows:
(a) Any election made by the Participant may be changed or
revoked without limitation if the Participant files with the
Employer a written request before the Annuity Starting Date as of
which benefits are to commence. A married Participant who wishes to
change his or her form of benefit to a benefit other than the
Automatic Survivor Benefit must secure the consent of his or her
spouse as provided in Section 10.3.
(b) If the Participant dies before the date an option becomes
effective, any election made under Section 10.2 shall be considered
void.
10.2.6. Small Benefits.
Notwithstanding the foregoing, if a Participant terminates
employment prior to his or her Required Beginning Date, and if the
Participant's vested accounts are less than or equal to $5,000 as of the
date he or she terminates employment, his or her accounts shall be
distributed in a lump sum as soon as practicable following the Valuation
Date coinciding with or next following his or her termination of
employment.
27
<PAGE>
10.2.7. Valuation Of Accounts.
Any distribution under this Plan shall be based on the value
of the Participant's accounts on the Valuation Date which coincides with
or immediately precedes the date as of which distribution commences.
10.2.8. Special Distribution Form.
Upon distribution of benefits under this Section 10, any
portion of a Participant's accounts invested in the EDS Stock Fund or the
Unigraphics Solutions Inc. Stock Fund may, at the Participant's election,
be distributed in whole shares of EDS Stock or Employer Stock, as
applicable. Fractional shares shall be distributed in cash.
10.3. Spousal Consent To An Optional Form Of Benefit Or Beneficiary.
The spouse of a Participant may consent to the designation of a
beneficiary other than the spouse or to a change in the designation of a
beneficiary other than the spouse or to the election of an optional form of
benefit. The designation of a beneficiary other than the spouse or a change in
the designation of a beneficiary other than the spouse or election of an
optional form of benefit by a married Participant will be effective only if the
spouse of the Participant consents to such designation or election in writing.
Consent to an optional benefit form must be provided within the 90 day period
ending on the Participant's Annuity Starting Date. The spouse's consent must:
(a) designate a form of benefits which may not be changed
without further spousal consent;
(b) be irrevocable and acknowledge the effect of such designation or
election; and
(c) be witnessed by a Plan representative or a notary public.
Any such consent must be filed with the Employer in order to be
effective. No consent need be obtained in the event the Participant has no
spouse or the Participant's spouse cannot be located. In this event, the
Participant must certify on a form provided by the Committee that he or she has
no spouse or that his or her spouse cannot be located in order for his or her
beneficiary designation or election of an optional form of benefit to be
effective.
10.4. Distribution Notice.
During the Distribution Notice Periods specified in Section 10.1,
the Committee shall give to the Participant a written notification in
nontechnical terms of:
(a) the material features and the relative values of the
optional forms of benefits under the Plan,
28
<PAGE>
(b) the terms and conditions of the Automatic Survivor Benefit and
the financial effect upon the Participant's benefit in terms of dollars
per benefit payment,
(c) the Participant's right to make, and the effect of, an election
out of the Automatic Survivor Benefit,
(d) in the case of a married Participant, the rights of the
Participant's spouse with respect to any such election,
(e) the right of the Participant to make, and the effect of, a
revocation of any such election before the commencement of benefits, and
(f) the right, if any, of the Participant to defer receipt of a
distribution.
29
<PAGE>
SECTION 11 - DISTRIBUTIONS AT DEATH
11.1. Distributions Upon Death.
Upon the death of a Participant while in the employment of the
Employer, the Participant's accounts shall become fully vested (if not already
fully vested) and shall be distributed in a lump sum to his or her spouse or
beneficiaries in accordance with Sections 11.2, 11.3 and 11.4 . Upon the death
of a Participant after termination of his or her employment with the Employer,
the vested portion of the Participant's remaining account balances shall be
distributed in a lump sum to his or her spouse or beneficiaries in accordance
with Sections 11.2, 11.3 and 11.4 . Any distribution hereunder shall be based on
the value of the Participant's accounts as of the date such distribution is
made.
11.2. Distribution To Spouse.
Upon the death of a Participant, the entire balance of his or her
accounts shall be distributed to his or her surviving spouse, if any, unless the
surviving spouse has consented in the manner required under Section 11.5 to a
designated beneficiary and one or more designated beneficiaries survives the
Participant.
11.3. Designation Of Beneficiary.
Each Participant shall have the right to name and change primary and
contingent beneficiaries under the Plan in accordance with the rules and
procedures established by the Committee. If upon the death of the Participant,
the Participant has no surviving spouse or the Participant's surviving spouse
has consented to the designation of a beneficiary in the manner required under
Section 11.5, the vested balance of his or her accounts shall be divided among
the primary or contingent beneficiaries designated by such Participant who
survive the Participant.
11.4. Beneficiary Not Designated.
In the event the Participant has no surviving spouse and has either
failed to designate a beneficiary or no designated beneficiary survives him or
her, the amounts otherwise payable to a beneficiary under the provisions of this
Section shall be paid to the children of such Participant in equal shares. If
the Participant has no children, the amounts otherwise payable to a beneficiary
under the provisions of this Section shall be paid to the Participant's executor
or administrator.
11.5. Spousal Consent to Designation of Alternate Beneficiary and Election
of an Optional Method of Distribution.
The spouse of the Participant must consent to the designation of an
alternate beneficiary or to the election of an optional form of benefit in
accordance with this Section in order for such designation to be effective.
The spousal consent must be in writing and:
30
<PAGE>
(a) must designate a beneficiary which may not be changed
without spousal consent,
(b) must be irrevocable and acknowledge the effect of such
designation as being a waiver of the spouse's right to the death benefit
described in Section 11 and
(c) must be witnessed by a Plan representative or notary public.
Any such consent must be filed with the Committee in order to be
effective. No consent need be obtained in the event the Participant has no
spouse or the Participant's spouse cannot be located. In this event, the
Participant must certify on a form provided by the Committee for that purpose
that he or she has no spouse or that his or her spouse cannot be located in
order for his or her designation of an alternate beneficiary to be effective.
31
<PAGE>
SECTION 12 - LEAVES OF ABSENCE AND TRANSFERS
12.1. Military Leave Of Absence.
So long as The Uniformed Services Employment and Reemployment Rights
Act of 1994 ("USERRA") or any similar law shall remain in force, providing for
reemployment rights for all persons in military service, as therein defined, an
Employee who leaves the employment of the Employer for military service in the
Armed Forces of the United States, as defined in such Act from time to time in
force, shall, for all purposes of this Plan, be considered as having been in the
employment of the Employer, with the time of his or her service in the military
credited to his or her Service; provided that upon such Employee being
discharged from the military service of the United States he or she applies for
re-employment with the Employer and takes all other necessary action to be
entitled to, and to be otherwise eligible for, reemployment rights, as provided
by USERRA, or any similar law from time to time in force.
12.1.1. Payroll Reduction Contributions.
Any Employee who is reemployed while entitled to veterans'
reemployment rights under USERRA and who has either (i) suspended his or
her contributions during military service, or (ii) made less than the
maximum amount of contributions permitted by Sections 4.1 and 4.2 during
his or her period of military service, shall be permitted to make the
contributions described in Sections 4.1 and 4.2 to the Plan with respect
to the period of his or her military service during the period which
begins on the Employee's date of reemployment with the Employer and ends
upon the earlier of:
(a) the period equal to three times the Employee's period
of military service; and
(b) five years.
The maximum amount of contributions which the Employee can
make during this period shall be the maximum amount of contributions that
he or she would have been permitted to make to the Plan during the period
of military service if the individual had continued to be employed by the
Employer during such period and received Compensation during such period
equal to the Compensation the Employee would have received during the
period of military service had the Employee worked for the Employer during
such period. If the Compensation the Employee would have received during
the period was not reasonably certain, the Employee's average Compensation
from the Employer during the 12 month period immediately preceding the
period of military service shall be deemed to be such Compensation.
12.1.2. Matching Contributions.
If the Employer makes a contribution under Section 4.4 during
a period when an Employee was on military leave of absence and if the
Employee later returns to employment and makes the contributions described
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<PAGE>
in Section 4.1 for this period, the Employer shall make such matching
contributions on behalf of the Employee as would have been made had the
Employee's contributions actually been made during the period of his or
her military service.
12.1.3. Treatment Of Contributions.
Contributions under this Section will be taken into account
for purposes of the limitations of Sections 402(g) or 415 in the year to
which the contributions relate, not the year in which the contributions
are made. In addition, such contributions will not cause the Plan to be
treated as failing to meet the requirements of Code Sections 401(a)(4),
401(a)(26), 401(k)(3), 401(m), 410(b) or 416.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u).
Loan repayments will be suspended under this Plan during a period of
qualified military service as permitted under Code Section 414(u)(4).
12.2. Maternity Or Paternity Absence.
In the case of any Employee who is absent from work
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual,
(c) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement,
the Employee shall be credited with Days of Service following the date such
absence begins until the first anniversary of such date solely for purposes of
determining whether a Break in Service has occurred. In order to receive credit
under this Section, an Employee must furnish to the Employer information
establishing (i) that the absence from work is for one of the reasons described
in this Section and (ii) the number of days for which the Employee was absent.
12.3. Family And Medical Leave Act.
Solely for purposes of determining whether a Break in Service has
occurred, an Employee shall be credited with the number of Days of Service
during a leave of absence taken pursuant to the Family and Medical Leave Act of
1993.
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<PAGE>
12.4. Other Leaves Of Absence.
An Employee on an Employer-approved leave of absence not described
in Section 12.1 above shall for all purposes of this Plan be considered as
having continued in the employment of the Employer for the period of such leave,
provided that the Employee returns to the active employment of the Employer
before or at the expiration of such leave. Such approved leaves of absence shall
be given on a uniform, non-discriminatory basis in similar fact situations.
Notwithstanding any other provision of the Plan, a Participant who
is on an Employer-approved leave of absence will share in the allocation of
Employer contributions under Sections 4.4 for the Plan Year in which such leave
of absence begins but will not share in such allocation for any subsequent Plan
Year ending before the Participant's return from such leave of absence.
12.5. Disability Leave of Absence.
An Employee who is absent from employment with the Employer and who
is receiving benefits under a long term disability plan maintained by the
Employer will be credited with Days of Service during such absence until the
earlier of the date as of which (i) the Employee is fully vested in his or her
Matching Contribution Account, or (ii) the Employee's attainment of Normal
Retirement Age.
Notwithstanding any other provision of the Plan to the contrary, a
Participant who is on a Disability Leave of Absence will share in the allocation
of Employer contributions under Sections 4.4 for the Plan Year in which such
leave begins but will not share in such allocation for any subsequent Plan Year
ending before the Participant's return from such leave.
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<PAGE>
12.6. Transfers.
In the event that:
(a) a Participant is transferred to employment with a member of
the Controlled Group in a status as a non-Employee; or
(b) a person is transferred from employment with a member of the
Controlled Group in a status as a non-Employee to employment with the
Employer under circumstances making such person an Employee; or
(c) a person was employed by a member of the Controlled Group in a
status as a non-Employee, terminated his or her employment and was
subsequently employed by the Employer as an Employee; or
(d) a Participant was employed by the Employer as an Employee,
terminated his or her employment and was subsequently employed by a member
of the Controlled Group in a status as a non-Employee;
then the following provisions of this Subsection shall apply:
(a) transfer to employment with a member of the Controlled Group as
a non-Employee shall not be considered termination of employment with the
Employer, and such transferred person shall continue to be entitled to the
benefits provided in the Plan, as modified by this Section;
(b) employment with a member of the Controlled Group by a
non-Employee will be deemed to be employment by the Employer, but only
with respect to employment during any period that such member of the
Controlled Group is required to be aggregated with the Company pursuant to
Code Sections 414(b), (c) or (m);
(c) amounts earned from a member of the Controlled Group by a
non-Employee shall not constitute Compensation hereunder;
(d) termination of employment with a member of the Controlled Group
which has not adopted the Plan by a person entitled to benefits under this
Plan (other than to transfer to employment with another member of the
Controlled Group) shall be considered as termination of employment with
the Employer;
(e) all other terms and provisions of this Plan shall fully apply to
such person and to any benefits to which he or she may be entitled
hereunder.
Notwithstanding anything in this Plan to the contrary, a Participant
who is no longer employed by a member of the Controlled Group which includes the
Company as a member shall be considered a terminated Employee.
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<PAGE>
12.7. Acquisition Of Assets.
If the Employer acquires the assets (through purchase, merger or
otherwise) of any other entity and hires persons who had been employed by such
entity, the division or other subgroup in which such persons are employed shall
be excluded from the groups included in the definition of "Employee" unless the
Employer communicates to such division or subgroup that such division or
subgroup is accruing benefits under the Plan.
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SECTION 13 - TRUSTEE
The Company shall select a Trustee or insurance company to hold and
administer the assets of the Plan and shall enter into a trust agreement or
insurance contract with such Trustee or insurance company. The Company may
change the Trustee or insurance company from time to time subject to the terms
of the trust agreement or insurance contract.
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SECTION 14 - ADMINISTRATION
14.1. Appointment Of Committee.
The Board shall appoint a Committee of one (1) or more persons who
shall serve without remuneration at the pleasure of the Board. Upon death,
resignation, removal or inability of a member of the Committee to continue, the
Board shall appoint a successor. The Committee shall appoint its own Chairman
and Secretary. If, at any time, the Board has not appointed a Committee, or
there is no Committee, then the Company shall have all of the duties,
responsibilities, powers and authorities given to the Committee.
14.2. Construction.
The Committee shall have the discretionary authority to construe,
interpret and administer all provisions of the Plan and to determine a
Participant's eligibility for benefits on a uniform, non-discriminatory basis in
similar fact situations. Any decision of a majority of the then members of the
Committee shall govern.
14.3. Decisions And Delegation.
A decision of the Committee may be made by a written document signed
by a majority of the members of the Committee or by majority vote at a meeting
of the Committee. The Secretary of the Committee shall keep all records of
meetings and of any action by the Committee and any and all other records
desired by the Committee. The Committee may appoint such agents, who need not be
members of the Committee, as it may deem necessary for the effective exercise of
its duties, and may, to the extent not inconsistent herewith, delegate to such
agents any powers and duties, both ministerial and discretionary, as the
Committee may deem expedient or appropriate.
No member of the Committee shall make any decision or take any
action covering exclusively his or her own benefits under the Plan. All such
matters shall be decided by a majority of the remaining members of the Committee
or, in the event of inability to obtain a majority, by the Board.
14.4. Meetings.
The Committee shall hold meetings upon such notice, at such place or
places and at such times as the Committee may determine. Meetings may be called
by the Chairman or any member of the Committee. A majority of the Committee
shall constitute a quorum for the transaction of business.
14.5. Duties Of The Committee.
The Committee shall, as part of its general duty to supervise and
administer the Plan, direct the Trustee specifically in regard to:
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(a) distribution payments, including the names of the payees, the
amounts to be paid and the time or times when payments shall be made;
(b) any other payments which the Trustee is not authorized to make
without direction in writing by the Committee;
(c) the purchase of annuity contracts, giving the names of the
persons for whose benefit they shall be purchased and the purchase price;
and
(d) preparation of an annual report for the Company, as of the end
of each Plan Year, in such form as the Company may require.
14.6. Records Of The Committee.
All acts and determinations of the Committee shall be duly recorded
by the Secretary thereof (or under his or her supervision), and all such
records, together with such other documents as may be necessary for the proper
administration of the Plan, shall be preserved in the custody of such Secretary.
Such records and documents shall at all times be open for inspection and copying
by any person designated by the Board.
14.7. Expenses.
Any expense incurred by the Committee or the Trustee with respect to
employment of agents, attorneys or other persons, including expenses incurred in
maintaining the qualified status of the Plan and the exempt status of the
related trust shall be paid from the assets of such trust unless paid by the
Employer.
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SECTION 15 - CLAIM PROCEDURE
15.1. Claim.
A Participant or beneficiary or other person who believes that he or
she is being denied a benefit to which he or she is entitled (hereinafter
referred to as "Claimant") may file a written request for such benefit with the
Committee, setting forth his or her claim. The request must be addressed to:
Committee, Unigraphics Solutions Inc. 401(k) Plan, Unigraphics Solutions Inc.,
13736 Riverport Drive, Maryland Heights, Missouri 63043.
15.2. Claim Decision.
Upon receipt of a claim, the Committee shall advise the Claimant
that a reply will be forthcoming within 90 days and shall in fact deliver such
reply in writing within such period. The Committee may, however, extend the
reply period for an additional 90 days for reasonable cause. If the claim is
denied in whole or in part, the Committee will render a written opinion using
language calculated to be understood by the Claimant setting forth:
(a) the specific reason or reasons for the denial;
(b) specific references to pertinent Plan provisions on which the
denial is based;
(c) a description of any additional material or information
necessary for the Claimant to perfect the claim and an explanation why
such material or such information is necessary;
(d) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review; and
(e) the time limits for requesting a review under Section 15.3 and a
review under Section 15.4.
15.3. Request For Review.
Within 60 days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Committee
reconsider its determination. Such request must be addressed to: Committee,
Unigraphics Solutions Inc. 401(k) Plan, Unigraphics Solutions Inc., 13736
Riverport Drive, Maryland Heights, Missouri 63043. The Claimant or his or her
duly authorized representative may, but need not, review the pertinent documents
and submit issues and comments in writing for consideration by the Committee. If
the Claimant does not request a review of the Committee's determination within
such 60-day period, he or she shall be barred and estopped from challenging its
determination.
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15.4. Review On Appeal.
Within 60 days after the Committee's receipt of a request for
review, it will review its determination. After considering all materials
presented by the Claimant, the Committee will render a written opinion, written
in a manner calculated to be understood by the Claimant, setting forth the
specific reasons for the decision and containing specific references to the
pertinent Plan provisions on which the decision is based. If special
circumstances require that the 60-day time period be extended, the Committee
will so notify the Claimant and will render the decision as soon as possible but
not later than 120 days after receipt of the request for review. The Committee
shall possess and exercise discretionary authority to make determinations as to
a Participant's eligibility for benefits and to construe the terms of the Plan.
Any decision of a majority of the members of the Committee shall govern. The
decision of the Committee shall be final and non-reviewable unless found to be
arbitrary and capricious by a court of competent review. Such decision will be
binding upon the Employer and the Claimant.
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SECTION 16 - AMENDMENT AND TERMINATION
16.1. Amendment.
The Company shall have the right, by a resolution adopted by action
of the Board or anyone to whom corporate authority to amend the Plan has been
delegated by the Board, at any time and from time to time to amend, in whole or
in part, any or all of the provisions of the Plan. No such amendment, however,
shall authorize or permit any part of the assets of the Plan (other than such
part as is required to pay taxes and administration expenses of the Plan) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their beneficiaries; no such amendment shall cause any reduction
in the amount credited to any Participant's account or cause or permit any
portion of the assets of the Plan to revert to or become the property of the
Employer; provided, however, that if a favorable determination letter shall not
be received upon the initial submission to the Internal Revenue Service that the
Plan as herein set forth or as amended meets the requirements of Sections
401(a), 401(k) and 501(a) of the Code, the Company may, at its option, amend the
Plan in any manner which will result in a favorable determination letter being
issued by the Internal Revenue Service or the Company may withdraw all
contributions made by it and the Plan shall then terminate with the same effect
as if it had never been adopted.
16.2 Termination; Discontinuance Of Contributions.
The Company shall have the right at any time to terminate this Plan.
Upon termination, partial termination, or complete discontinuance of
contributions, all Participants' accounts (or, in the case of a partial
termination, the accounts of all affected Participants) shall become fully
vested, and shall not thereafter be subject to forfeiture.
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SECTION 17 - MISCELLANEOUS
17.1. Participants' Rights.
Neither the establishment of the Plan hereby created, nor any
modification thereof, nor the creation of any fund or account, nor the payment
of any benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the Employer, any officer or Employee
thereof, the Trustee or the Board except as herein provided. Under no
circumstances shall the terms of employment of any Participant be modified or in
any way affected hereby.
17.2. Spendthrift Clause.
Except as provided in Section 4.10, no benefit or beneficial
interest provided under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, either
voluntary or involuntary, and any attempt to so alienate, anticipate, sell,
transfer, assign, pledge, encumber or charge the same shall be null and void. No
such benefit or beneficial interest shall be liable for or subject to the debts,
contracts, liabilities, engagements, or torts of any person to whom such
benefits or funds are or may be payable.
Notwithstanding the above, a Participant's benefit will be offset
against any amount he or she is ordered or required to pay to the Plan pursuant
to an order or requirement which arises under a judgment of conviction for a
crime involving the Plan, under a civil judgment entered by a court in an action
involving a fiduciary breach, or pursuant to a settlement agreement between the
Participant and the Department of Labor or the Pension Benefit Guaranty
Corporation. Any such offset shall be made pursuant to Section 206(d) of ERISA.
17.3. Delegation Of Authority By Employer.
Whenever the Employer, under the terms of this Plan, is permitted or
required to do or perform any act, it shall be done and performed by any officer
duly authorized by the Board of Directors of the Employer.
17.4. Distributions To Minors.
In the event that any portion of the Plan becomes distributable to a
minor or other person under legal disability (as determined by the laws of the
jurisdiction in which he or she then resides), the Committee shall direct that
such distribution be made to the legal representative of such minor or other
person.
17.5. Gender, Number And Headings.
Whenever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender in all
cases where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply. Headings of Sections and
Subsections are inserted for convenience of reference, constitute no part of the
Plan and are not to be considered in the construction of the Plan.
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17.6. Separability Of Provisions.
If any provision of this Plan shall be for any reason invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect.
17.7. Diversion Of Assets.
No part of the assets of the Plan shall be used for, or diverted to,
purposes other than the exclusive benefit of Participants or their
beneficiaries. Except as provided in Section 4.8 and Section 16.1, the Employer
shall have no beneficial interest in the assets of the Plan and no part of the
assets of the Plan shall revert or be repaid to the Employer, directly or
indirectly.
17.8. Service Of Process.
The Vice President of Human Resources shall constitute the Plan's
agent for service of process.
17.9. Merger.
In the event of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each Participant shall (as if the Plan
had then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he or
she would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated).
17.10. Benefit Limitation.
(a) Notwithstanding any other provision hereof, and except as
provided in Section 12.1, the amounts allocated to a Participant during
the Limitation Year under the Plan and allocated to the Participant under
any other defined contribution plan to which the Company or any other
member of the Controlled Group has contributed shall be proportionately
reduced, to the extent necessary, so that the Annual Addition does not
exceed the least of:
(1) $30,000; or
(2) 25% of the Participant's remuneration from the Company or
any member of the Controlled Group during the Limitation Year; or
(3) such other limits set forth in Section 415 of the
Code.
The amount set forth in subparagraph (1) above shall automatically be adjusted
to reflect adjustments made by applicable law. Remuneration for purposes of this
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Section means remuneration as defined in Treasury Regulation Section 1.415-2(d)
and shall also include the deferrals described in Code Section 415(c)(3)(D).
(b) For purposes of this Section, Limitation Year means the 12 month
period commencing on January 1 and ending on December 31.
(c) Prior to January 1, 2000, the amounts allocated to a Participant
during the Limitation Year under this Plan, and allocated to such
Participant under any other defined contribution plan to which the Company
or any member of the Controlled Group has contributed and which has the
same Limitation Year as the Plan, shall be proportionately reduced to the
extent necessary, so that the sum of the defined benefit plan fraction and
the defined contribution plan fraction does not exceed the limits set
forth in Section 415(e) of the Code.
(d) If as a result of the allocation of forfeitures, a reasonable
error in estimating a Participant's remuneration, a reasonable error in
determining the amount of elective deferrals (within the meaning of
Section 402(g)(3) of the Code) that may be made with respect to a
Participant under the limits of Section 415 of the Code or other limited
facts and circumstances, the Annual Additions under the Plan for a
particular Participant exceed the limitations in this Section, the excess
amounts will not be deemed Annual Additions for the Limitation Year and
will be treated as follows:
(1) First, the portion of the excess attributable to amounts
by which a Participant elected to have his or her salary reduced
under Sections 4.1 and 4.2 (together with any income or less any
loss allocable to such amounts) shall be returned to such
Participant to the extent that the return would reduce the excess
amount in the Participant's accounts, such amount to be returned on
or before the April 15 following the close of such Limitation Year.
(2) Second, any Employer contributions under Section 4.4 which
are attributable to the contributions returned in (1) above shall be
held in a suspense account and used to reduce Employer contributions
otherwise due under Section 4.
(3) Third, to the extent required to reduce the excess amount,
other Employer contributions under Section 4 shall be held in a
suspense account and used to reduce Employer contributions otherwise
due under Section 4.
(e) For purposes of this Section, Annual Additions means the sum for
the Limitation Year of Employer contributions, Employee contributions
(determined without regard to any rollover contributions as defined in
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3) of the Code and
without regard to Employee contributions to a simplified employee pension
plan which are excludable from gross income under Section 408(k)(6) of the
Code) and forfeitures.
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17.11. Commencement Of Benefits.
(a) Notwithstanding any other Section of the Plan, the payment of
benefits under the Plan to the Participant will begin not later than the
60th day after the close of the Plan Year in which the last of the
following occurs:
(1) the date on which the Participant attains age 65; or
(2) the 10th anniversary of the date on which the Participant
commenced participation in the Plan; or
(3) the Participant's termination of employment with the
Employer.
(b) Notwithstanding Subsection (a) or any other provision of the
Plan, if the amount of payment cannot be ascertained, or if it is not
possible to make payment because the Committee cannot locate the
Participant after making reasonable efforts to do so, a retroactive
payment may be made no later than 60 days after the earliest date on which
the amount of such payment can be ascertained or the date on which the
Participant is located, whichever is applicable.
(c) If the Committee is unable to locate any person entitled to
receive distribution from an account hereunder, such account shall be
forfeited and used to reduce Employer contributions on the date two years
after
(1) the date the Committee sends by certified mail a notice
concerning the benefits to such person at his or her last known
address or
(2) the Committee determines that there is no last known
address.
If an account is forfeited under this Section and a person
otherwise entitled to the account subsequently files a claim with the
Committee during any Plan Year, before any allocations for such Plan Year
are made under Sections 4.4, the account will be restored to the amount
which was forfeited without regard to any earnings or losses that would
have been allocated. Such restoration shall first be taken out of
forfeitures which have not been allocated and if such forfeitures are
insufficient to restore such person's account balance, restoration shall
be made by an Employer contribution to the Plan.
17.12. Qualified Domestic Relations Order.
Notwithstanding anything in the Plan to the contrary, benefits may
be distributed in accordance with the terms of a Qualified Domestic Relations
Order ("QDRO"). For this purpose a QDRO is any Domestic Relations Order
determined by the Employer to be a Qualified Domestic Relations Order within the
meaning of Section 414(p) of the Code pursuant to this Section.
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(a) A Domestic Relations Order means a judgment, decree, or order
(including the approval of a property settlement agreement) which
(1) relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse,
child or other dependent of a Participant,
(2) is made pursuant to a state domestic relations law, and
(3) creates or recognizes the existence of an Alternate
Payee's right, or assigns to the Alternate Payee the right, to
receive all or a portion of the benefits of the Participant under
the Plan.
An "Alternate Payee" includes any spouse, former spouse,
child, or other dependent of a Participant who is designated by the
Domestic Relations Order as having a right to receive all or a portion of
the benefits payable under the Plan with respect to the concerned
Participant.
(b) To be a QDRO, the Domestic Relations Order must meet the
specifications set forth in Section 414(p) of the Code and must clearly
specify the following:
(1) Name and last known mailing address of the Participant.
(2) Name and last known mailing address of each Alternate
Payee covered by the Domestic Relations Order.
(3) The amount or the percentage of the Participant's benefit
to be paid to each Alternate Payee, or the manner in which such
amount or percentage is to be determined.
(4) The number of payments or period to which the Domestic
Relations Order applies.
(5) Each plan to which the Domestic Relations Order applies.
(c) The status of any Domestic Relations Order as a QDRO shall be
determined under the following procedures:
(1) Promptly upon receiving a Domestic Relations Order,
the Employer will
(A) refer the Domestic Relations Order to legal counsel
for the Plan to render an opinion within 90 days (or such
earlier period as shall be provided by applicable law) whether
the Domestic Relations Order is a QDRO, and
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(B) notify the affected Participant and any Alternate
Payee of the receipt by the Plan of the Domestic Relations
Order and of this procedure.
(2) Promptly upon receiving the determination made by the
Plan's legal counsel of the status of the Domestic Relations Order,
the affected Participant and each Alternate Payee (or any
representative designated by an Alternate Payee by written notice to
the Employer) shall be furnished a copy of such determination. The
notice of determination shall state
(A) whether the Plan's legal counsel has determined that
the Domestic Relations Order is a QDRO, and
(B) once such legal counsel determines whether the
Domestic Relations Order constitutes a QDRO, that the Employer
will commence any payments currently due under the Plan to the
person or persons entitled thereto after the expiration of a
period of 60 days commencing on the date of the mailing of the
notice unless prior thereto the Employer receives notice of
the institution of legal proceedings disputing the
determination. The Employer shall, as soon as practical after
such 60 day period, ascertain the dollar amount currently
payable to each payee pursuant to the Plan and the QDRO, and
any such amounts shall be disbursed by the Plan.
(3) If there is a dispute on the status of a Domestic
Relations Order as a QDRO, there shall be a delay in making
payments. The Employer shall direct that the amounts otherwise
payable be held in a separate account within the Plan. If within 18
months thereafter, the Domestic Relations Order is determined not to
be a valid QDRO, or the status of the Domestic Relations Order has
not been finally determined, the segregated or escrow amounts
(including interest thereon) shall be paid to the person or persons
who would have been entitled to such amounts if there had been no
Domestic Relations Order. Any determination thereafter that the
Domestic Relations Order is a QDRO shall be applied prospectively
only.
(d) If a Domestic Relations Order requires payment to an Alternate
Payee in an immediate lump sum, the order shall not lose its status as a
Qualified Domestic Relations Order merely because of the immediate lump
sum provision.
17.13. Written Explanation Of Rollover Treatment.
The Employer shall, when making an eligible rollover distribution,
provide a written explanation to the recipient of such distribution of his or
her right to roll over such distribution to an eligible retirement plan and, if
applicable, his or her right to the special five or ten-year averaging and
capital gains tax treatment in the Code. Such written explanation will be
provided to the recipient in accordance with rules prescribed by the Internal
Revenue Service.
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17.14. Leased Employees.
Any person who is a leased employee (within the meaning of Section
414(n) of the Code) of any member of the Controlled Group shall be treated for
all purposes of the Plan as if he or she were employed by a member of the
Controlled Group which has not adopted the Plan.
17.15. Special Distribution Option.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's (as hereinafter defined) election under this
Section, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution (as
hereinafter defined) paid directly to an Eligible Retirement Plan (as
hereinafter defined) specified by the Distributee in a Direct Rollover.
(a) An Eligible Rollover Distribution is any distribution of all or
any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include:
(1) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives
(or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period of
ten years or more;
(2) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code;
(3) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities); and
(4) the portion of any distribution attributed to elective
deferrals that is a Hardship Withdrawal made pursuant to Section
4.11.
(b) An Eligible Retirement Plan is
(1) an individual retirement account described in Section
408(a) of the Code,
(2) an individual retirement annuity described in Section
408(b) of the Code,
(3) an annuity plan described in Section 403(a) of the Code,
or
(4) a qualified trust described in Section 401(a) of the Code
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to a
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surviving spouse, an Eligible Retirement Plan is only an individual
retirement account or individual retirement annuity.
(c) A Distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
Alternate Payee under a Qualified Domestic Relations Order, as defined in
Section 414(p) of the Code, are Distributees with regard to the interest
of the spouse or former spouse.
(d) A Direct Rollover payment is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
17.16. Limitations On Special Distribution Option.
(a) Notwithstanding the provisions of the immediately preceding
Section entitled Special Distribution Option, the amount which may be paid
directly to the trustee of another eligible retirement plan under such
Section shall be no less than the lesser of $500 or the total amount of
the Eligible Rollover Distribution which would otherwise be includible in
the Participant's taxable income; and no amount shall be so paid unless
the amount of such distributions in any calendar year which are otherwise
eligible for such payment are reasonably expected to total $200 or more.
(b) The Employer shall provide notice of the special distribution
option described in the preceding Section to the Participant in accordance
with rules prescribed by the Internal Revenue Service.
17.17. Contribution On Behalf Of Controlled Group Member.
If a member of the Controlled Group contributes to the Plan and the
contribution is accepted by the Plan with the consent of the Employer, the
Controlled Group member will be deemed to have adopted the Plan with the consent
of the Employer with respect to the category of employees on behalf of whom the
contribution was made.
17.18. Construction Of Plan.
Except as provided in ERISA, this Plan shall be construed according
to the laws of the State of Missouri, and all provisions of the Plan shall be
administered according to the laws of such state.
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SECTION 18 - TOP-HEAVY DEFINITIONS
18.1. Accrued Benefits.
"Accrued Benefits" means "the present value of accrued benefits" as
that phrase is defined under regulations issued under Section 416 of the Code.
For purposes of Sections 18 and 19 hereof, the Accrued Benefits of any
Participant (other than a Key Employee) shall be determined under the single
accrual rate used by all Qualified Plans of the Employer which are defined
benefit plans, or if there is no single accrual rate, Accrued Benefits shall be
determined as accruing no more rapidly than the slowest rate permitted under
Section 411(b)(1)(C) of the Code.
18.2. Beneficiaries.
"Beneficiaries" means the person or persons to whom the share of a
deceased Participant's accounts are payable.
18.3. Determination Date.
"Determination Date" means for a Plan Year the last day of the
preceding Plan Year; provided, however, that in the case of the Plan Year of the
Plan beginning April 1, 1999, the Determination Date shall be December 31, 1999.
18.4. Former Key Employee.
"Former Key Employee" means any person presently or formerly
employed by the Controlled Group (and the Beneficiaries of such person) who
during the Plan Year is not classified as a Key Employee but who was classified
as a Key Employee in a previous Plan Year; provided, however, that a person who
has not performed any services for the Controlled Group at any time during the
five year period ending on the Determination Date (and the Beneficiaries of any
such person) shall not be considered a Former Key Employee.
18.5. Key Employee.
"Key Employee" means any person presently or formerly employed by
the Controlled Group (and the Beneficiaries of such person) who is a "key
employee" as that term is defined in Section 416(i) of the Code and the
regulations thereunder; provided, however, that a person who has not performed
any services for the Controlled Group at any time during the five year period
ending on the Determination Date (and the Beneficiaries of any such person)
shall not be considered a Key Employee. For purposes of determining whether a
person is a Key Employee, the definition of Top Heavy Compensation shall be
applied.
18.6. Non-Key Employee.
"Non-Key Employee" means any person presently or formerly employed
by the Controlled Group (and the Beneficiaries of such person) who is not a Key
Employee or a Former Key Employee; provided, however, that a person who has not
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performed any services for the Controlled Group at any time during the five year
period ending on the Determination Date (and the Beneficiaries of any such
person) shall not be considered a Non-Key Employee.
18.7. Permissive Aggregation Group.
"Permissive Aggregation Group" means each Qualified Plan of the
Controlled Group in the Required Aggregation Group plus each other Qualified
Plan which is not part of the Required Aggregation Group but which satisfies the
requirements of Sections 401(a)(4) and 410 of the Code when considered together
with the Required Aggregation Group.
18.8. Required Aggregation Group.
"Required Aggregation Group" means each Qualified Plan (including
any terminated Qualified Plan) of the Controlled Group in which a Key Employee
participates during the Plan Year containing the Determination Date or any of
the four preceding Plan Years and each other Qualified Plan (including any
terminated Qualified Plan) of the Controlled Group which during this period
enables any Qualified Plan (including any terminated Qualified Plan) in which a
Key Employee participates to meet the requirements of Section 401(a)(4) or 410
of the Code.
18.9. Super Top-Heavy Group.
"Super Top-Heavy Group" means, for a Plan Year, the Required
Aggregation Group if, and only if, the sum of the Accrued Benefits (valued as of
the Determination Date for such Plan Year) under all Qualified Plans (including
any terminated Qualified Plans) in the Required Aggregation Group for Key
Employees exceeds 90% of the sum of the Accrued Benefits (valued as of such
Determination Date) under all Qualified Plans (including any terminated
Qualified Plans) in the Required Aggregation Group for all Key Employees and
Non-Key Employees; provided, however, that the Required Aggregation Group will
not be a Super Top-Heavy Group for a Plan Year if the sum of the Accrued
Benefits (valued as of the Determination Date for such Plan Year) under all
Qualified Plans (including any terminated Qualified Plans) in the Required
Aggregation Group for Key Employees does not exceed 90% of the sum of the
Accrued Benefits (valued as of such Determination Date) under all Qualified
Plans in the Permissive Aggregation Group for all Key Employees and Non-Key
Employees. If the Qualified Plans in the Required or Permissive Aggregation
Group have different Determination Dates, the Accrued Benefits under each such
Plan shall be calculated separately, and the Accrued Benefits as of
Determination Dates for such Plans that fall within the same calendar year shall
be aggregated.
18.10. Top-Heavy Compensation.
"Top-Heavy Compensation" means compensation within the meaning of
Section 415 of the Code.
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18.11. Top-Heavy Group.
"Top-Heavy Group" means, for a Plan Year, the Required Aggregation
Group if, and only if, the sum of the Accrued Benefits (valued as of the
Determination Date for such Plan Year) under all Qualified Plans (including any
terminated Qualified Plans) in the Required Aggregation Group for Key Employees
exceeds 60% of the sum of the Accrued Benefits (valued as of such Determination
Date) under all Qualified Plans (including any terminated Qualified Plans) in
the Required Aggregation Group for all Key Employees and Non-Key Employees;
provided, however, that the Required Aggregation Group will not be a Top-Heavy
Group for a Plan Year if the sum of the Accrued Benefits (valued as of the
Determination Date for such Plan Year) under all Qualified Plans (including any
terminated Qualified Plans) in the Required Aggregation Group for Key Employees
does not exceed 60% of the sum of the Accrued Benefits (valued as of such
Determination Date) under all Qualified Plans in the Permissive Aggregation
Group for all Key Employees and Non-Key Employees. If the Qualified Plans in the
Required or Permissive Aggregation Group have different Determination Dates, the
Accrued Benefits under each such Plan shall be calculated separately, and the
Accrued Benefits as of Determination Dates for such Plans that fall within the
same calendar year shall be aggregated.
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SECTION 19 - TOP-HEAVY RULES
19.1 Special Top-Heavy Rules.
If for any Plan Year the Plan is part of a Top-Heavy Group, then,
effective as of the first day of such Plan Year the following provision shall
apply to Participants who accrue an Hour of Employment on or after the first day
of such Plan Year:
A new Section 6.5 is added as follows:
6.5 Minimum Allocation if Plan is Part of Top-Heavy Group.
Notwithstanding the foregoing, for each Plan Year in which the
Plan is part of a Top-Heavy Group, the sum of the Employer contributions
and forfeitures allocated under the Plan to the account of each Non-Key
Employee who is both a Participant and Employee on the last day of such
Plan Year shall be at least equal to the lesser of three percent of such
Non-Key Employee's Top-Heavy Compensation for such Plan Year or the
largest percentage of Top-Heavy Compensation allocated to the account of
any Key Employee; provided, however, that if for any Plan Year a Non-Key
Employee is a Participant in both this Plan and one or more defined
contribution plans, the Employer need not provide the minimum allocation
described in the preceding sentence for such Non-Key Employee if the
Employer satisfies the minimum allocation requirement of Section
416(c)(2)(B) of the Code for the Non-Key Employee in such other defined
contribution plans. Amounts which a Non-Key Employee or Key Employee
elects to contribute on a pre-tax basis to a Qualified Plan which meets
the requirements of Section 401(k) of the Code shall be considered an
Employer contribution for purposes of Section 18.11; provided, however,
that such pre-tax contributions made by Non-Key Employees may not be taken
into account in determining the minimum allocation provided under this
Section 6.5. In addition, matching contributions made on behalf of Non-Key
Employees may not be taken into account in determining the minimum
allocation provided under this Section 6.5.
19.2. Adjustments In Section 415 Limits.
If for any Plan Year the Plan is part of a Super Top-Heavy Group, or
the Plan is part of a Top-Heavy Group and fails to provide an allocation of
Employer contributions and forfeitures on behalf of each Non-Key Employee who is
both a Participant and Employee on the last day of such Plan Year equal to at
least the lesser of four percent of each such Non-Key Employee's Top-Heavy
Compensation or the largest percentage of Top-Heavy Compensation allocated on
behalf of any Key Employee for the Plan Year, effective as of the first day of
such Plan Year the adjustments to the limits in Section 17.10 set forth in
Section 416(h) of the Code shall be applied.
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IN WITNESS WHEREOF, the Company has caused this Plan to be executed
by one of its duly authorized officers this 31st day of March, 1999.
UNIGRAPHICS SOLUTIONS INC.
By /s/ John Mazzola
---------------------------------------
President and Chief Executive Officer
55
EXHIBIT 5.1
[UNIGRAPHICS SOLUTIONS INC. LETTERHEAD]
April 7, 1999
Unigraphics Solutions Inc.
13736 Riverport Drive
Maryland Heights, Missouri 63043
Gentlemen:
As General Counsel of Unigraphics Solutions Inc., a Delaware
corporation ("the Company"), I am familiar with the Registration Statement on
Form S-8 being filed by the Company pursuant to the Securities Act of 1933, as
amended (the "Act"), with the Securities and Exchange Commission, relating to
200,000 shares (the "Shares") of Class A Common Stock, par value $.01 per share,
of the Company that may be sold pursuant to the Unigraphics Solutions Inc.
401(k) Plan (the "Plan").
I have examined originals or copies, certified or otherwise, identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as I deemed necessary for the purposes of the
opinion expressed herein. I have assumed (i) the genuineness of all signatures
on all documents examined by me, (ii) the authenticity of all documents
submitted to me as originals, (iii) the conformity to authentic originals of all
documents submitted to me as certified or photostatic copies, and (iv) the due
authorization, execution and delivery of all documents.
Based on the foregoing, I am of the opinion that the Shares, when sold
in accordance with the terms of the Plan, will be legally issued, fully paid and
nonassessable.
The foregoing opinion is limited to the General Corporation Law of the
State of Delaware, and I express no opinion as to the laws of any other
jurisdiction. I do not assume any duty to update this opinion with respect to
changes of law or fact occurring after the date hereof.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
above-mentioned Registration Statement. In giving such consent, I do not thereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ J. Randall Walti
--------------------------
J. Randall Walti
General Counsel
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
Unigraphics Solutions Inc.:
We consent to incorporation by reference in the registration statement on Form
S-8 of Unigraphics Solutions Inc. of our report dated February 9, 1999, relating
to the consolidated balance sheets of Unigraphics Solutions Inc. and
subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity/net investment, and cash flows
for each of the years in the three-year period ended December 31, 1998, and the
related schedule, which report appears in the December 31, 1998 Annual Report on
Form 10-K of Unigraphics Solutions Inc.
/s/ KPMG LLP
--------------------------
St. Louis, Missouri
April 7, 1999
