<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1995
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
(Full title of the Plan)
CERIDIAN CORPORATION
8100 34th Avenue South
Minneapolis, MN 55425
(Name and address of principal executive
office of the issuer of the securities held
pursuant to the Plan)
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Ceridian Corporation
Savings and Investment Plan
Index to Financial Statements, Schedules, and Exhibits
Financial Statements Page Number
Independent Auditors' Report 2
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1995 3
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the Year Ended
December 31, 1995 4
Notes to Financial Statements -
December 31, 1995 5-9
Supplemental Schedules
Schedule 1 - Item 27a - Schedule of Assets Held
for Investment Purposes 10
Schedule 2 - Item 27d - Reportable Transactions 11
Signature 12
Exhibits
Exhibit Index 13
Exhibit 23 - Consent of Independent Auditors 14
Exhibit 99 - Ceridian Corporation Savings and
Investment Plan
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<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and
the Retirement Committee of
Ceridian Corporation:
We have audited the accompanying statement of net assets available for
benefits with fund information of the Ceridian Corporation Savings and
Investment Plan (the "Plan") as of December 31, 1995, and the related
statement of changes in net assets available for benefits with fund
information for the year ended December 31, 1995. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits as of
December 31, 1995, and the changes in net assets available for benefits for
the year ended December 31, 1995, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are
presented for purposes of complying with the Department of Labor's rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 and are not a required part of the basic
financial statements. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available
for benefits is presented for purposes of additional analysis rather than
to present the net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/KPMG Peat Marwick
KPMG Peat Marwick
Minneapolis, Minnesota
May 17, 1996
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<TABLE>
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1995
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ceridian New Int'l Capital Prime New Equity Small-Cap
Stock Horizons Stock Apprec. Reserve Income Balanced Income Value Loan Total
Investments
Ceridian Corporation
Common Stock $ 1,483 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 1,483
T. Rowe Price Funds -- 2,891 1,079 733 2,961 696 739 2,898 661 -- 12,658
Loans Receivable
from Participants -- -- -- -- -- -- -- -- -- 272 272
Total Investments 1,483 2,891 1,079 733 2,961 696 739 2,898 661 272 14,413
Cash
21 -- -- -- -- -- -- -- -- -- 21
Employer Contributions
Receivable 162 220 117 77 306 38 81 206 93 -- 1,300
Net Assets Available
for Benefits $ 1,666 $ 3,111 $ 1,196 $ 810 $ 3,267 $ 734 $ 820 $ 3,104 $ 754 $ 272 $15,734
See accompanying notes to financial statements.
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</TABLE>
<PAGE>
<TABLE> CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended December 31, 1995
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ceridian New Int'l Capital Prime New Equity Small-Cap
Stock Horizons Stock Apprec. Reserve Income Balanced Income Value Loan Total
Participant Contributions $ 583 $ 691 $ 420 $ 280 $ 1,544 $ 152 $ 258 $ 686 $ 326 $ -- $ 4,940
Employer Contributions 237 296 167 106 515 57 110 289 124 -- 1,901
Net Change in Fair Value
Including Realized
Gain (Loss)
454 445 88 14 -- 43 55 353 41 -- 1,493
Investment Income
Dividends -- 300 32 56 111 38 25 144 29 -- 735
Interest
-- -- -- -- -- -- -- -- -- 12 12
Total Additions 1,274 1,732 707 456 2,170 290 448 1,472 520 12 9,081
Withdrawals by
Participants 70 30 50 15 118 16 26 85 10 4 424
Net Increase (Decrease)
prior to Transfers 1,204 1,702 657 441 2,052 274 422 1,387 510 8 8,657
Net Transfers from Other
Plans 420 1,077 493 185 2,530 462 177 1,484 65 184 7,077
Interfund Transfers 42 332 46 184 (1,315) (2) 221 233 179 80 --
Increase (Decrease) in
Net Assets Available
for Benefits 1,666 3,111 1,196 810 3,267 734 820 3,104 754 272 15,734
Net Assets Available for
Benefits:
Beginning of Year -- -- -- -- -- -- -- -- -- -- --
End of Year $ 1,666 $ 3,111 $ 1,196 $ 810 $ 3,267 $ 734 $ 820 $ 3,104 $ 754 $ 272 $ 15,734
See accompanying notes to financial statements.
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</TABLE>
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CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1995
(1) Summary of Significant Accounting Policies
Basis of Presentation and Use of Estimates
(a)
The accompanying financial statements have been prepared on the
accrual basis of accounting. The preparation of financial
statements in conformity with generally accepted accounting
principles requires the plan administrator to make estimates
and assumptions that affect the reported amounts of net assets
available for benefits and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported changes in net assets available for benefits during
the reporting period. Actual results could differ from those
estimates.
Custodian of Investments
(b)
Under the terms of a trust agreement between T. Rowe Price
Trust Company (the "Trustee") and Ceridian Corporation (the
"Company"), the Trustee holds, manages, and invests
contributions to the Ceridian Corporation Savings and
Investment Plan (the "Plan") and income therefrom in funds
selected by the Company's Retirement Committee to the extent
directed by participants in the Plan. The Trustee carries its
own banker's blanket bond in excess of $50,000,000 insuring
against losses caused, among other things, by dishonesty of
employees, burglary, robbery, misplacement, forgery and
counterfeit money.
(c) Investments
Investments are stated at their approximate fair market value.
Investments in the Company's common stock are valued at prices
published in the New York Stock Exchange Composite Transaction
listing. Investments in mutual funds are valued using daily net
asset value calculations performed by the funds and published
by the National Association of Securities Dealers. Loans
receivable from participants are valued at principal amount
plus accrued interest which approximates fair value. Net
realized gains or losses are recognized by the Plan upon the
sale of its investments or portions thereof on the basis of
average cost to each investment program. Purchases and sales
of securities are recorded on a trade date basis.
Costs and Expenses
(d)
All costs and expenses of administering the Plan are paid by
the Company and adopting affiliates.
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<PAGE>
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1995
(2) Description of the Plan
The Plan is a defined contribution plan, qualified under Section
401(a) of the Internal Revenue Code, which includes provisions under
Section 401(k) allowing eligible participants to direct the employer
to contribute a portion of the employee's compensation to the plan
on a pre-tax basis through payroll deductions. The Plan was
initiated on January 1, 1995 for the benefit of Company employees
who are U.S. citizens or resident aliens paid under the U.S.
domestic payroll system but are not participants in any qualified
defined benefit plan maintained by the Company. The terms of the
Plan are intended to be similar to the terms of the Ceridian
Corporation Personal Investment Plan, except that the Plan provides
for a higher level of Company matching contributions in lieu of
participation in a defined benefit plan. Eligible employees who
were participants in the Ceridian Corporation Personal Investment
Plan became participants in this Plan at its initiation. Further
information on the transfer of the accounts of those employees is
included in the accompanying note entitled Net Transfers from
``
Other Plans. The Plan is administered by the Company's Retirement
''
Committee, which is appointed by the Chief Executive Officer of the
Company. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
(3) Participant Accounts and Vesting
The Trustee maintains an account for each participant, including
participant directed allocations to each investment fund. Each
participant's account is credited with the participant's
contributions and allocations of any Company contributions and Plan
earnings, less loans and withdrawals, based on the direction of the
participant. Participants are immediately vested in their pretax
contributions and Company basic matching contributions, plus actual
earnings thereon. A participant whose employment terminated before
his or her normal retirement date (age 65) for reasons other than
death or disability will acquire a vested interest in performance
matching contributions by the Company in accordance with the
following schedule:
Vested
Years of Employment Interest
Less than 2 years 0%
2 years 40%
3 years 60%
4 years 80%
5 or more years 100%
Any forfeitures of unvested interests will be used to reduce future
performance matching contributions.
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CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1995
(4) Contributions
Participants may direct the Company to contribute to the Plan on
their behalf through payroll deduction from 2% to 17% of their
compensation in any pay period, subject to certain limitations.
During 1995, the Plan limited payroll deduction contributions on
behalf of highly compensated participants to 8% of their
compensation in any pay period. No participant may make salary
deferral contributions to the Plan from pay in excess of $150,000.
The Internal Revenue Code limited the total pre-tax contributions of
any participant during the 1995 Plan year to $9,240. In addition,
for 1995, the Company made basic monthly matching contributions
totalling $601,000 and declared a year-end performance matching
contribution of $1,300,000. The basic monthly matching
contributions were determined on the basis of 25% of the participant
directed pre-tax contributions, up to a maximum of 6% of
compensation in each pay period and required the satisfaction of no
performance criteria. The year-end performance matching
contribution resulted from the achievement of certain Company
economic performance criteria and amounted to 50% of the participant
directed pre-tax contributions for each pay period during 1995, up
to a maximum of 6% of compensation in each pay period, for
participants who were employees on December 31, 1995.
(5) Withdrawals
Participants, who are still employed by the Company, may only
withdraw from their account for "financial hardship," as defined by
federal regulations, for total disability, or if the participant is
59 1/2 years old. Withdrawals are also permitted pursuant to a
qualified domestic relations order or in the event of termination of
employment, retirement or death.
(6) Loans
Participants may borrow up to 50 percent of their before-tax account
balance. Any loan must be in a multiple of $100, be at least
$1,000, and not be more than $50,000 less the amount of the highest
loan balance outstanding during the 12-month period that ends the
day before the loan is made. Participants may not have more than
two short-term (maturity of five years or less) loans and one long-
term (maturity over five and not to exceed ten years) loan
outstanding. The interest rate is set by the Plan administrator and
is based on the prime interest rates charged by major national
banks. Each loan is approved by the Plan administrator or a
delegate, and the Plan Trustee maintains a loan receivable account
for any participant with an outstanding loan.
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<PAGE>
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1995
(7) Description of Investment Programs
The participant may direct contributions, in multiples of one
percent, to any or all of the funds:
Ceridian Stock Fund - Funds are invested in common stock of
(a)
Ceridian Corporation. Funds representing fractional shares
remain in cash or short-term accounts.
(b) New Horizons Fund - This is a T. Rowe Price mutual fund which
primarily invests in common stock of emerging growth companies
to seek long-term growth of capital.
International Stock Fund - This is a T. Rowe Price mutual fund
(c)
which invests in stocks and bonds of established non-U.S.
issuers for long-term growth of capital and income.
Capital Appreciation Fund - This is a T. Rowe Price mutual fund
(d)
which invests primarily in common stocks and related securities
to maximize capital appreciation.
Prime Reserve Fund - This is a T. Rowe Price money market
(e)
mutual fund.
New Income Fund - This is a T. Rowe Price mutual fund which
(f)
invests in investment-grade corporate and government debt
securities to provide the highest level of income over time,
consistent with preservation of capital.
(g) Balanced Fund - This is a T. Rowe Price mutual fund which
invests in a diversified portfolio of common stocks and bonds
to provide current income, capital appreciation, and
preservation of capital.
(h) Equity Income Fund - This is a T. Rowe Price mutual fund which
invests primarily in dividend paying common stocks to provide
growth of share value and high dividend income.
(I) Small-Cap Value Fund - This is a T. Rowe Price mutual fund
which seeks long-term growth of capital by investing in common
stock of small U.S. companies which appear to be undervalued.
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<PAGE>
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1995
(8) Number of Participants
The number of participants in each investment program as of
December 31, 1995 is as follows:
1995
Ceridian Stock Fund 516
New Horizons Fund 601
International Stock Fund 440
Capital Appreciation Fund 314
Prime Reserve Fund 837
New Income Fund 190
Balanced Fund 307
Equity Income Fund 591
Small-Cap Value Fund 369
The total number of participants in the Plan is less than the sum of
the number of participants shown above because many were
participating in more than one of the funds.
(9) Income Tax Status
The Plan administrator will submit a request for a determination
letter regarding the Plan's tax qualification and believes that the
Plan qualifies under the provisions of Section 401(a) of the
Internal Revenue Code, and that the trust established thereunder is
thereby exempt from federal income taxes under Section 501(a) of the
Code. Contributions to the Plan will not be included in the
participant's taxable income for federal and, in most states, state
income tax purposes until distributed or withdrawn. Each
participant's portion of earnings from the investments made with
contributions under the Plan, generally are not taxable until
distributed or withdrawn.
(10) Party-in-interest
T. Rowe Price Trust Company, as Trustee, is a party-in-interest with
respect to the Plan. In the opinion of the Trustee, transactions
between the Plan and the Trustee are exempt from being considered as
prohibited transactions under ERISA section 408(b).
(11) Net Transfers from Other Plans
Net transfers from other plans of $7,077,000 are due principally to
the transfer of $5,363,000 representing the accounts of participants
in the Ceridian Corporation Personal Investment Plan who did not
meet the criteria to continue in that plan, as reported in the
accompanying note entitled ``
Description of the Plan." In addition,
the accounts of participants in the defined contribution 401(k) plan
of the Company's User Technology subsidiary were added to the Plan
on April 30, 1995 in an amount of $1,505,000.
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<PAGE>
Schedule 1
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Item 27a - Schedule of Assets Held
for Investment Purposes
December 31, 1995
(Dollars in thousands)
Shares or Fair Market
Description Face Value Cost Value
Ceridian Stock Fund
Ceridian Corporation* Common Stock 35,942 $ 1,151 $ 1,483
T. Rowe Price Mutual Funds**
New Horizons Fund 141,023 2,466 2,891
International Stock Fund 88,241 1,010 1,079
Capital Appreciation Fund 53,640 723 733
Prime Reserve Fund 2,960,400 2,961 2,961
New Income Fund 74,988 655 696
Balanced Fund 55,932 690 739
Equity Income Fund 144,835 2,563 2,898
Small-Cap Value Fund 39,998 624 661
Loan Fund
Loans Receivable from Participants --- 272 272
(Range of interest rates 5.8%
to 10.0%)
$ 13,115 $ 14,413
*Represents party-in-interest.
**The Plan invests in T. Rowe Price mutual funds through T. Rowe Price
Trust Company, which is a party-in-interest.
See Independent Auditors' Report
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<PAGE>
Schedule 2
CERIDIAN CORPORATION SAVINGS AND INVESTMENT PLAN
Item 27d - Reportable Transactions
Series of Transactions in the Same Security Exceeding 5% of Plan Assets
at the Beginning of the Plan Year
Year Ended December 31, 1995
Identity of Party Total Total
Involved/ Dollar Value Dollar Value Net Gain
Description of Asset of Purchases of Sales or (Loss)
Ceridian Stock Fund* $ 1,363,024 $ 320,957 $ 106,215
T. Rowe Price
International Stock
Fund* 1,124,079 130,533 13,890
T. Rowe Price
New Horizons Fund* 2,561,338 121,465 23,247
T. Rowe Price
New Income Fund* 876,450 224,325 2,594
T. Rowe Price
Prime Reserve Fund* 4,247,519 1,304,177 --
T. Rowe Price
Small-Cap Value Fund* 642,589 20,669 1,651
T. Rowe Price
Balanced Fund* 761,377 74,834 3,517
T. Rowe Price
Equity Income Fund* 2,683,242 132,988 10,879
T. Rowe Price
Capital Appreciation
Fund* 754,360 35,159 2,724
*Since these transactions are with T. Rowe Price Trust Company, the Plan's
trustee, they are with a party-in-interest.
See Independent Auditors' Report
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CERIDIAN CORPORATION
SAVINGS AND INVESTMENT PLAN
Date: June 24, 1996
By: /s/John A. Haveman
John A. Haveman
Secretary for and Member of the
Ceridian Corporation Retirement
Committee
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EXHIBIT INDEX
Exhibit Description Code
23 Consent of Independent Auditors E
99 Ceridian Corporation Savings and
Investment Plan E
Legend: (E) Electronic Filing
(IBR) Incorporated by reference from previous filing
- 13 -
<PAGE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and
the Retirement Committee
Ceridian Corporation:
We consent to incorporation by reference in the registration statement
(No. 33-56325) on Form S-8 of Ceridian Corporation of our report dated
May 17, 1996, relating to the statements of net assets available for
benefits with fund information of the Ceridian Corporation Savings and
Investment Plan as of December 31, 1995, and the related statement of
changes in net assets available for benefits with fund information and
related supplemental schedules for the year ended December 1995 which
31,
report appears elsewhere in this December 31, 1995 annual report on Form
11-K of the Ceridian Corporation Savings and Investment Plan.
/s/KPMG Peat Marwick
KPMG Peat Marwick
Minneapolis, Minnesota
June 24, 1996
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<PAGE>
June 5, 1996
CERIDIAN CORPORATION
SAVINGS AND INVESTMENT PLAN
Working Copy
Incorporating First, Second and Third Declarations of Amendment
<PAGE>
CERIDIAN CORPORATION
SAVINGS AND INVESTMENT PLAN
Table of Contents
Page
ARTICLE I Description and Purpose........................ 1
1.1 Plan Name...................................... 1
1.2 Plan Description............................... 1
1.3 Plan Purposes.................................. 1
ARTICLE II Eligibility.................................... 2
2.1 Eligibility Requirements....................... 2
2.2 Transfer Among Participating Employers......... 2
2.3 Multiple Employment............................ 2
2.4 Reentry........................................ 2
2.5 Condition of Participation..................... 2
2.6 Termination of Participation................... 2
ARTICLE III Contributions.................................. 3
3.1 Pre-Tax Contributions.......................... 3
3.2 Matching Contributions......................... 4
3.3 Rollovers and Transfers........................ 5
3.4 Corrective Contributions....................... 6
ARTICLE IV Accounts and Valuation......................... 7
4.1 Establishment of Accounts...................... 7
4.2 Valuation and Account Adjustment............... 7
4.3 Allocations Do Not Create Rights............... 8
ARTICLE V Participant Investment Direction............... 9
5.1 Establishment of Investment Funds.............. 9
5.2 Contribution Investment Directions............. 9
5.3 Transfer Among Investment Funds................ 9
5.4 Company Stock Fund Rules....................... 10
5.5 Investment Direction Responsibility Resides
With Participants.............................. 11
5.6 Beneficiaries and Alternate Payees............. 11
ARTICLE VI Withdrawals During Employment and Loans........ 13
6.1 Hardship Withdrawals........................... 13
6.2 Withdrawals from Accounts After Age 59-1/2 or
Disability..................................... 14
6.3 Withdrawals from After-Tax Rollover Account.... 14
6.4 Rules for Withdrawals.......................... 14
i
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Page
6.5 Plan Loans..................................... 15
ARTICLE VII Vesting and Forfeitures........................ 19
7.1 Vesting........................................ 19
7.2 Forfeiture Upon Distribution................... 19
7.3 Other Forfeitures.............................. 20
7.4 Reallocation of Forfeitures.................... 20
ARTICLE VIII Distributions After Termination................ 21
8.1 Time of Distribution........................... 21
8.2 Form of Distribution........................... 22
8.3 Beneficiary Designation........................ 22
8.4 Assignment, Alienation of Benefits............. 23
8.5 Payment in Event of Incapacity................. 23
8.6 Payment Satisfies Claims....................... 23
8.7 Disposition if Distributee Cannot be Located... 23
8.8 Transfers to Other Plans or Individual
Retirement Arrangements........................ 24
ARTICLE IX Contribution Limitations....................... 25
9.1 Pre-Tax Contribution Dollar Limitation......... 25
9.2 Actual Deferral Percentage Limitations......... 25
9.3 Actual Contribution Percentage Limitations..... 27
9.4 Multiple Use Limitation........................ 29
9.5 Earnings on Excess Contributions............... 31
9.6 Aggregate Defined Contribution Limitations..... 31
9.7 Aggregate Defined Contribution/Defined
Benefit Limitations............................ 32
9.8 Administrator's Discretion..................... 33
ARTICLE X Amendment and Termination...................... 34
10.1 Adoption by Affiliated Organizations........... 34
10.2 Authority to Amend and Procedure............... 34
10.3 Authority to Terminate and Procedure........... 34
10.4 Vesting Upon Termination, Partial Termination
or Discontinuance of Contributions............. 35
10.5 Distribution Following Termination, Partial
Termination or Discontinuance of
Contributions.................................. 35
ARTICLE XI Definitions, Construction and Interpretations.. 36
11.1 Account........................................ 36
11.2 Active Participant............................. 36
11.3 Administrator.................................. 36
11.4 Affiliated Organization........................ 36
11.5 Basic Matching Account......................... 36
11.6 Basic Matching Contributions................... 36
ii
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Page
11.7 Beneficiary.....................................36
11.8 Board.......................................... 37
11.9 Break in Service............................... 37
11.10 Code........................................... 37
11.11 Committee...................................... 37
11.12 Company........................................ 37
11.13 Company Stock.................................. 37
11.14 Consent of Spouse.............................. 37
11.15 Disabled....................................... 38
11.16 Effective Date................................. 38
11.17 Eligible Earnings.............................. 38
11.18 Employee....................................... 38
11.19 Fund........................................... 38
11.20 Governing Law.................................. 39
11.21 Headings....................................... 39
11.22 Highly Compensated Employee.................... 39
11.23 Hour of Service................................ 40
11.24 Matching Contributions......................... 40
11.25 Normal Retirement Date......................... 40
11.26 Number and Gender.............................. 40
11.27 Participant.................................... 41
11.28 Participating Employer......................... 41
11.29 Performance-Based Matching Account............. 41
11.30 Performance-Based Matching Contributions....... 41
11.31 Plan........................................... 41
11.32 Plan Rule...................................... 41
11.33 Plan Year...................................... 41
11.34 Pre-Tax Account................................ 41
11.35 Pre-Tax Contributions.......................... 41
11.36 Qualified Employee............................. 41
11.37 Reporting Person............................... 42
11.38 Rollover Account............................... 42
11.39 Section 415 Wages.............................. 42
11.40 Termination of Employment...................... 42
11.41 Testing Wages.................................. 43
11.42 Treasury Regulations........................... 44
11.43 Trust.......................................... 44
11.44 Trustee........................................ 44
11.45 Vesting Service................................ 44
ARTICLE XII Administration of Plan......................... 46
12.1 Named Fiduciary................................ 46
12.2 Retirement Committee........................... 46
12.3 Operation of Committee......................... 46
12.4 Duties of Administrator........................ 47
12.5 Adoption of Rules.............................. 47
12.6 Discretionary Actions.......................... 47
12.7 Compensation................................... 48
iii
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Page
12.8 Professional Assistance........................ 48
12.9 Payment of Administrative Costs................ 48
12.10 Indemnification................................ 48
12.11 Benefit Claim Procedure........................ 48
12.12 Correction of Errors........................... 49
ARTICLE XIII Miscellaneous.................................. 50
13.1 Merger, Consolidation, Transfer of Assets...... 50
13.2 Limited Reversion of Fund...................... 50
13.3 Top-Heavy Provisions........................... 50
13.4 No Employment Rights Created................... 54
13.5 Special Provisions............................. 54
Exhibit A.....................................................A-1
Exhibit B.....................................................B-1
Exhibit C.....................................................C-1
Exhibit D.....................................................D-1
Exhibit E.....................................................E-1
Exhibit F.....................................................F-1
iv
<PAGE>
CERIDIAN CORPORATION
SAVINGS AND INVESTMENT PLAN
Description and Purpose
1 Plan Name. The name of the Plan is the "Ceridian
Corporation Savings and Investment Plan."
2 Plan Description. The Plan is a profit sharing plan
providing for Pre-Tax Contributions pursuant to a qualified cash
or deferred arrangement and discretionary Matching Contributions
by Participating Employers. The Plan is intended to qualify
under Code section 401(a) and to satisfy the requirements of Code
sections 401(k) and 401(m). Notwithstanding the designation of
the Plan as a profit sharing plan, a Participating Employer may
make contributions to the Plan even though it has no current or
accumulated earnings and profits.
3 Plan Purposes. The purposes of the Plan are to promote
effort and cooperation on the part of Active Participants; to
provide a measure of economic security to Active Participants by
accumulating contributions for distribution upon retirement, as a
supplement to other resources then available; and to permit
Active Participants to share in the profits and growth of their
Participating Employers.
v
<PAGE>
Eligibility
1 Eligibility Requirements. (A) Except as provided in
Subsection (B), an Employee is eligible to participate in the
Plan as of the day on which he or she first completes an Hour of
Service as a Qualified Employee.
(A) In connection with an acquisition, the
Administrator may specify an entry date that is later than the
date specified in Subsection (A) but such date may not be
later than the first anniversary of the acquisition date and
the later entry date must be applicable to all Employees who
became such in connection with the acquisition.
2 Transfer Among Participating Employers. An Active
Participant who transfers from one Participating Employer to
another Participating Employer as a Qualified Employee will
participate in the Plan for the Plan Year during which the
transfer occurs on the basis of his or her separate Eligible
Earnings for the Plan Year from each such Participating Employer.
3 Multiple Employment. An Active Participant who is
simultaneously employed as a Qualified Employee with more than
one Participating Employer will participate in the Plan as a
Qualified Employee of all such Participating Employers on the
basis of his or her separate Eligible Earnings from each such
Participating Employer.
4 Reentry. An Active Participant who ceases to be a Qualified
Employee will be eligible to resume active participation in the
Plan as of the date on which he or she first completes an Hour of
Service as a Qualified Employee following the cessation.
5 Condition of Participation. Each Qualified Employee, as a
condition of participation, is bound by all of the terms and
conditions of the Plan and must furnish to the Administrator such
pertinent information and execute such instruments as the
Administrator may require.
6 Termination of Participation. A Participant will cease to
be such as of the later of the date on which
(a) he or she ceases to be a Qualified Employee, or
(b) all benefits, if any, to which he or she is entitled
under the Plan have been distributed.
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III
Contributions
1 Pre-Tax Contributions. (A) Subject to the limitations of
Article IX, for each Plan Year, the Participating Employer of
each Active Participant will make Pre-Tax Contributions to the
Trust on behalf of the Participant in the amount by which the
Participant's Eligible Earnings have been reduced in accordance
with this section. Pre-Tax Contributions will be paid to the
Trustee as soon as administratively practicable after the date on
which the Participant would have received the Eligible Earnings
but for the Participant's election pursuant to this section.
(A) Except as provided in Subsection (C), an Active
Participant's Eligible Earnings will be reduced in accordance
with the following rules:
(1) An Active Participant may elect to reduce his or her
Eligible Earnings by any one percent increment from two
percent to a maximum percentage of Eligible Earnings
specified in Plan Rules, and the percentage so elected will
automatically apply to the Participant's Eligible Earnings
as adjusted from time to time. Plan Rules may specify a
maximum percentage of Eligible Earnings for Active
Participants who are Highly Compensated Employees that is
less than the maximum percentage specified for Active
Participants who are not Highly Compensated Employees.
(2) In conjunction with an Active Participant's entering or
reentering the Plan pursuant to Article II, reduction of his
or her Eligible Earnings will begin as of the first payroll
period that starts at least 30 days (or such shorter period
as Plan Rules may allow) after the Administrator receives
the Active Participant's complete and accurate written
election on a form provided by the Administrator. If,
however, the election is not received until after a date
determined pursuant to Plan Rules, it will not be effective
and Eligible Earnings reductions will begin in accordance
with clause (3).
(3) If an Active Participant does not elect to reduce his
or her Eligible Earnings in conjunction with his or her
entry or reentry into the Plan in accordance with clause
(2), he or she may thereafter elect to have such reductions
begin as of the first payroll period that starts on or after
the first day of the month that follows by at least 30 days
(or such shorter period as Plan Rules may allow) the date on
which the Administrator receives a complete and accurate
written election on a form provided by the Administrator.
(4) No Pre-Tax Contributions will be made on behalf of a
Participant with respect to a period during which he or she
is not an Active Participant. Only Eligible Earnings
payable after an Active Participant's complete and accurate
written election on a form provided by the Administrator has
been properly filed will be reduced pursuant to the
election.
(5) An Active Participant may change the percentage rate
at which his or her Eligible Earnings will be reduced as of
the first payroll period that starts on or after the first
day of the month that follows by at least 30 days (or such
shorter period as Plan Rules may allow) the date on which
the Administrator receives a complete and accurate written
notice of such change on a form provided by the
Administrator.
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(6) An Active Participant may suspend reductions to his or
her Eligible Earnings as of the first payroll period that
starts on or after the first day of the month that follows
by at least 30 days (or such shorter period as Plan Rules
may allow) the date on which the Administrator receives a
complete and accurate written notice of such suspension.
Eligible Earnings reductions for any Active Participant who
makes a hardship withdrawal pursuant to Section 6.1 will be
automatically suspended for the 12-month period beginning on
the date of the withdrawal distribution.
(7) An Active Participant whose Eligible Earnings
reductions have ceased by reason of automatic or voluntary
suspension may, after the end of the suspension period,
resume Eligible Earnings reductions in accordance with
clause (3).
(B) Eligible Earnings reductions will be made in accordance
with Plan Rules. If any election or notice submitted by an
Active Participant to the Administrator is not processed on a
timely basis or if, for any reason, an Active Participant's
Eligible Earnings are not reduced in accordance with his or her
election, no retroactive adjustments of the Participant's
reductions to Eligible Earnings will be made to take into account
the effect of any such delay or failure. Plan Rules may,
however, permit a Participant to reduce his or her Eligible
Earnings payable during any remaining portion of the Plan Year
during which such delay or failure occurred at more than the
otherwise applicable percentage to adjust for the effect of such
delay or failure so long as the total reductions for the Plan
Year do not exceed the applicable maximum percentage or
limitations of Article IX.
2 Matching Contributions. (A) (1) Subject to Subsection (D)
and the limitations of Article IX, the Participating
Employer of an Active Participant who satisfies the
eligibility condition described in Subsection (B) for a
given month will make a Basic Matching Contribution to the
Trust on behalf of the Participant in an amount, if any,
equal to a specified percentage of a specified portion of
the Participant's Pre-Tax Contributions for each payroll
period during the month, such percentage and portion with
respect to all months during a Plan Year to be specified by
the Participating Employer.
(1) Subject to Subsection (D) and the limitations of
Article IX, the Participating Employer of an Active
Participant who satisfies the eligibility condition
described in Subsection (B) for a Plan Year will make a
Performance-Based Matching Contribution to the Trust on
behalf of the Participant in an amount, if any, equal to a
specified percentage of a specified portion of the
Participant's Pre-Tax Contributions for each payroll period
during the Plan Year, such percentage and portion to be
specified by the Participating Employer.
(B) To be eligible to share in a Basic Matching
Contribution for a given month or a Performance-Based Matching
Contribution for a given Plan Year, an Active Participant must
have either been
(1) actively employed with an Affiliated Organization on
the last day of the month or Plan Year, as the case may be,
or
(2) on a leave of absence on the last day of the month or
Plan Year, as the case may be, due to:
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(a) military or jury service which is required by
applicable law to be treated as an authorized leave, or
any other absence required by applicable law or
contractual undertaking to be treated as an authorized
leave;
(b) a leave of absence authorized for medical reasons,
public service, social service or educational purposes,
which is granted under rules applied uniformly to all
Employees;
(c) any other leave of absence authorized by an
Affiliated Organization, which is granted under rules
applied uniformly to all Employees;
(d) a layoff, but only to the extent it does not
exceed six months' duration; or
(e) a leave of absence not exceeding 12 months'
duration granted under the terms of an Affiliated
Organization's Time Off Without Pay Program.
(C) A Participating Employer's Basic Matching Contributions
pursuant to Subsection (A)(1) will be paid to the Trustee as soon
as administratively practicable after the end of the month to
which the contributions relate. A Participating Employer's Basic
Matching Contributions pursuant to Section 3.4 and Performance-
Based Matching Contributions will be paid to the Trustee on such
date or dates during or following the Plan Year as the
Participating Employer may elect but in no case more than 12
months after the end of the Plan Year.
(D) No Matching Contribution will be made with respect to
any portion of a Participant's Pre-Tax Contributions that is
returned to the Participant pursuant to Article IX; provided,
that for this purpose, unmatched Pre-Tax Contributions will be
deemed to be returned to the Participant first. If the
Administrator determines that any Matching Contributions that
have been added to a Participant's Account should not have been
added by reason of this subsection, the contributions will be
subtracted from the Account as soon as administratively
practicable after the determination and will be applied to
satisfy the Matching Contribution obligations of the
Participating Employer who made the excess Matching Contributions
for the Plan Year in which the excess contributions were made.
If, because of the passage of time, the excess cannot be applied
to satisfy the Participating Employer's Matching Contribution
obligations for the Plan Year in which the excess contributions
were made, the excess will, subject to the limitations of
Article IX, be allocated in the discretion of the Administrator
(1) among the Basic or Performance-Based Matching Accounts,
as determined by the Administrator, of all Participants who
made Pre-Tax Contributions for the Plan Year in question as
if it were an additional Matching Contribution for the Plan
Year, or
(2) as a corrective contribution pursuant to Section 3.4.
3 Rollovers and Transfers. (A) An Active Participant may,
with the prior consent of the Administrator, contribute to the
Trust, within 60 days of receipt,
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(1) the balance of an individual retirement account to
which the only contributions have been one or more "eligible
rollover distributions," within the meaning of Code section
402(c)(4), from a plan qualified under Code section 401(a),
or
(2) an eligible rollover distribution from such a qualified
plan.
(B) With the prior consent of the Administrator, the
accounts under another plan qualified under Code section
401(a) of an Active Participant may be transferred directly to
the Trust. Other than in connection with an acquisition, such
a transfer will not be permitted if, as a result of the
transfer, the Plan would be required to provide any option
with respect to the form or time of distribution or any other
right, benefit or feature not available under the Plan prior
to the transfer.
(C) Other than in connection with an acquisition, any
contribution or transfer to the Trust pursuant to Subsection
(A) or (B) must be made in cash and will be added to the
Active Participant's appropriate Rollover Account.
(D) If an Active Participant's accounts under the Ceridian
Corporation Personal Investment Plan are transferred directly
to the Plan, the transfer will be made in kind and will be
added to the Account that corresponds with the transferred
account except that the balance of his or her performance-
based matching account under the Personal Investment Plan will
be transferred to his or her Basic Matching Account if he or
she has completed less than five years of Vesting Service at
the time of the transfer.
4 Corrective Contributions. For any Plan Year, a
Participating Employer may contribute to the Basic Matching
Accounts of Active Participants who are not Highly Compensated
Employees, or any group of such Active Participants, such amounts
as it deems advisable to assist the Plan in satisfying the
requirements of Sections 9.2, 9.3 and 9.4, or any other
requirement under the Code or Treasury Regulations, for the Plan
Year. Subject to the limitations of Sections 9.6 and 9.7, such
contributions will be allocated among the Basic Matching Accounts
of such Active Participants in proportion to their Eligible
Earnings, in proportion to the Pre-Tax Contributions made on
their behalf or in equal shares as the Participating Employer
directs at the time such contribution is made.
6
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IV
Accounts and Valuation
1 Establishment of Accounts. For each Participant, the
following Accounts will be established and maintained:
(a) A Pre-Tax Account, to which there will be added the
amount of Pre-Tax Contributions made on the Participant's
behalf;
(b) A Basic Matching Account, to which there will be added
the amount of Basic Matching Contributions made on the
Participant's behalf;
(c) A Performance-Based Matching Account, to which there
will be added the amount of Performance-Based Matching
Contributions made on the Participant's behalf; and
(d) One or more Rollover Accounts to which there will be
added the amount of any rollover contribution or trust-to-
trust transfer made by or on the Participant's behalf
pursuant to Section 3.3 as follows:
(2) An After-Tax Rollover Account to evidence amounts
transferred directly from another qualified plan
pursuant to Section 3.3(B) which represent after-tax
contributions by the Participant to such other
qualified plan and earnings thereon,
(3) A Cash or Deferred Rollover Account to evidence
amounts transferred directly from another qualified
plan pursuant to Section 3.3(B) which represent
elective deferrals to such plan made pursuant to a
qualified cash or deferred arrangement and earnings
thereon,
(4) A General Rollover Account to evidence amounts
rolled over pursuant to Section 3.3(A) or transferred
directly from another qualified plan pursuant to
Section 3.3(B) which are not required to be separately
accounted for as set forth in clause (1) or (2).
One or more additional accounts may be established for any
Participant or group of similarly situated Participants in
connection with the merger of another plan into the Plan, in
which case provisions of the Plan applicable solely to such
accounts will be set forth on an exhibit to the Plan in
accordance with Section 13.5.
2 Valuation and Account Adjustment. (A) Subject to
Subsection (B), Participant's Accounts will be separately
adjusted on a daily basis in a uniform and equitable manner to
reflect income, expense, gains and losses of the Fund and
contributions, withdrawals, loans, loan repayments, satisfactions
of unpaid indebtedness in accordance with Section 6.5(C)(4),
forfeitures and distributions.
(A) The portion of Participant's Accounts invested in
Company Stock or publicly traded mutual investment funds will be
accounted for in a uniform and equitable manner on the basis of
the number of full and fractional Company Stock or mutual fund
shares credited to the Accounts. Cash dividends attributable to
7
<PAGE>
such Company Stock or mutual fund shares will be added to
Participants' Accounts on the date of payment of such dividends
and will be reinvested in Participants' Accounts by the Trustee,
to the extent practicable, in full and fractional Company Stock
or the mutual fund shares, as the case may be, as soon as
administratively practicable after the day on which the dividends
are received by the Trustee. Stock dividends attributable to
Company Stock will be added to Participants' Accounts in
accordance with the number of full and fractional shares of
Company Stock held in each Participant's Account on the date of
the payment of such dividends.
(3) Allocations Do Not Create Rights. The fact that amounts are
added to the Accounts of a Participant does not vest in the
Participant any right, title or interest in or to any portion of
the Fund except at the time or times and upon the terms and
conditions expressly set forth in the Plan. Notwithstanding any
addition to an Account, the issuance of any statement or the
distribution of all or any portion of an Account balance, the
Administrator may cause the Account to be adjusted to the extent
necessary to correct any error in the Account, whether caused by
misapplication of any provision of the Plan or otherwise, and may
recover from any distributee the amount of any excess
distribution. Any such adjustment will be made within a
reasonable time after the error is discovered.
8
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V
Participant Investment Direction
Establishment of Investment Funds. (A) In order to allow
each Participant to determine the manner in which his or her
Accounts will be invested, the Trustee will maintain, within the
Trust, three or more separate investment funds of such nature and
possessing such characteristics as the Committee may specify from
time to time. Each Participant's Accounts will be invested in
the investment funds in the proportions directed by the
Participant in accordance with Sections 5.2 and 5.3. The
Committee may, from time to time, direct the Trustee to establish
additional investment funds or to terminate any existing
investment fund.
(A) Notwithstanding any other provisions of the Plan to the
contrary, the Committee may direct the Trustee to suspend
investment activity in any or all investment funds, or impose
special rules or restrictions of uniform application, for a
period determined by the Committee to be necessary in connection
with
(1) the establishment or termination of any investment
fund,
(2) the receipt by the Trustee from, or transfer by the
Trustee to, another trust of account balances pursuant to
Section 3.3 or 8.8 in connection with an acquisition or
divestiture or otherwise,
(3) a change of Trustee or investment manager, or
(4) such other circumstances determined by the Committee as
making such suspension or special rules or restrictions
necessary or appropriate.
2 Contribution Investment Directions. (A) In conjunction
with a Participant's enrollment in the Plan, contributions,
rollovers and transfers to his or her Accounts will initially be
invested in one investment fund designated by Plan Rules.
(A) On and after a date specified by Plan Rules following a
Participant's enrollment in the Plan, the Participant may direct
a change in the manner in which future contributions, rollovers
and transfers added to his or her Accounts will be invested among
the investment funds maintained pursuant to Section 5.1. A
direction must be made in accordance with and is subject to Plan
Rules and will be effective on or as soon as administratively
practicable after the next regular pay day which follows by at
least ten days (or such shorter period as Plan Rules may allow)
the date on which the Trustee receives the direction.
(B) Plan Rules will include procedures pursuant to which
Participants are provided with the opportunity to obtain written
confirmation of investment directions made pursuant to this
section.
3 Transfer Among Investment Funds. (A) A Participant may
direct the transfer of his or her Accounts among the investment
funds maintained pursuant to Section 5.1. A direction must be
made in accordance with and is subject to Plan Rules. Plan Rules
will include procedures pursuant to which Participants are
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<PAGE>
provided with an opportunity to obtain written confirmation of
investment directions made pursuant to this section.
(A) A transfer pursuant to Subsection (A) will be made and
effective on or as soon as administratively practicable after:
(1) the close of business on the day of receipt by the
Trustee of the transfer direction if the direction is
received prior to 1:00 p.m. Eastern Time; or
(2) the close of business on the next business day
following receipt by the Trustee of the transfer direction
if the direction is received at or after 1:00 p.m. Eastern
Time.
(B) Except with regard to transfers from the Company Stock
Fund described in Section 5.4, a transfer made pursuant to
Subsection (A) will be based upon the value of the Participant's
Accounts as of the close of business on the day on which the
transfer is effective. Transfers from the Company Stock Fund
will be based on the value as determined by the actual trading
price; provided, that if no trade is required to effect the
transfer, the value will be determined on the basis of the
closing price of Company Stock on the business day following
receipt of the transfer direction by the Trustee as reported in
the New York Stock Exchange Composite Transactions listing
contained in The Wall Street Journal.
(C) Plan Rules may impose uniform limitations and
restrictions applicable to transfers into and out of specific
investment funds.
4 Company Stock Fund Rules. (A) The Trustee will establish
as one of the investment funds under Section 5.1, a fund,
designated as the Company Stock Fund, which may be invested
entirely and will be invested primarily in Company Stock.
(A) Each Participant having an interest in the Company
Stock Fund will be afforded the opportunity to direct the manner
in which shares of Company Stock credited to his or her Accounts
will be voted in connection with all stockholder actions of the
Company. In the event of a public tender or exchange offer for
shares of such common stock, each Participant will be entitled to
direct whether or not the shares of Company Stock credited to his
or her Accounts will be tendered for sale or exchange in
connection with such offer. Voting and tender decisions will be
effected in accordance with the following rules.
(1) The Administrator will, prior to each meeting of the
stockholders of the Company, cause to be furnished to each
such Participant a copy of the proxy solicitation materials,
together with a form requesting confidential directions on
how the shares of Company Stock credited to his or her
Accounts will be voted on each matter to be brought before
such meeting. The Administrator will use his or her best
efforts to ensure that each such Participant receives such
information as will be distributed to stockholders of the
Company in connection with any public tender or exchange
offer for shares of Company Stock and that each receives a
form on which confidential directions may be provided to the
Trustee.
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<PAGE>
(2) The Trustee will hold all directions received from
Participants pursuant to this section in strict confidence
and will not disclose any such direction to any person
unless the Trustee determines such disclosure is required to
comply with applicable law.
(3) The Trustee will vote the number of full and fractional
shares credited to each Participant's Accounts as directed
by the Participant if the direction is received in time for
the direction to be processed. In the case of a public
tender or exchange offer, the Trustee will tender the shares
credited to the Participant's Accounts if so directed by the
Participant, and will not tender shares credited to the
Accounts of a Participant who either directs that such
shares not be tendered or does not furnish a timely
direction to the Trustee.
(4) The Trustee will vote any Company Stock that has not
been credited to any Participant's Account and any Company
Stock with respect to which it does not receive timely
directions so that the proportion of such stock voted in any
particular manner on any matter is the same as the
proportion of the stock with respect to which the Trustee
has received timely directions which is so voted. The
Trustee will tender for sale or exchange in a public tender
or exchange offer the same proportion of any shares not
credited to an Account as it tenders of shares credited to
the Accounts of Participants.
(B) Notwithstanding any other provision of the Plan to the
contrary, in no event will shares of Company Stock be allocated
or otherwise credited to the Accounts of a Participant who is a
Reporting Person if such allocation would cause the aggregate
fair market value of Company Stock held in the Trust with respect
to all Participants who are Reporting Persons to equal or exceed
20 percent of the market value of all securities with a readily
ascertainable market value held in the Trust, as determined as of
the last day of the preceding Plan Year. To the extent the
foregoing limitation would otherwise be exceeded, each such
Reporting Person's interest in the Company Stock Fund will be
reduced in a pro rata basis among all such Reporting Persons'
levels of investment in the Company Stock Fund.
(C) Notwithstanding any other provision of the Plan to the
contrary, a Participant who is a Reporting Person may not
transfer amounts either into or out of the Company Stock Fund
more than once during any 30-day period.
5 Investment Direction Responsibility Resides With
Participants. Neither any Affiliated Organization, the
Administrator, the Committee nor the Trustee has any authority,
discretion, responsibility or liability with respect to a
Participant's selection of the investment funds in which his or
her Accounts will be invested, the entire authority, discretion
and responsibility for, and any results attributable to, the
selection being that of the Participant.
6 Beneficiaries and Alternate Payees. Solely for purposes of
this article, the term "Participant" includes the Beneficiary of
a deceased Participant and an alternate payee under a qualified
domestic relations order within the meaning of Code section
414(p) unless otherwise provided in such order, but only after
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(1) the Administrator has determined the identity of the
Beneficiary and the amount of the Account balance to which
he or she is entitled in the case of a Beneficiary of a
deceased Participant, or
(2) the Administrator has, in accordance with Plan Rules,
made a final determination that the order is a qualified
domestic relations order and all rights to contest such
determination in a court of competent jurisdiction within
the time prescribed by Plan Rules have expired or been
exhausted in the case of an alternate payee.
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VI
Withdrawals During Employment and Loans
1 Hardship Withdrawals. (A) Subject to the provisions of
Section 6.4, a Participant who is an Employee may make hardship
withdrawals from his or her Pre-Tax Account, Cash or Deferred
Rollover Account and General Rollover Account in accordance with
this section. The amount of any such withdrawal may not exceed
the sum of (1) the portion of the balance of his or her Pre-Tax
Account consisting of Pre-Tax Contributions or, in the case of a
Participant described in Section 3.3(D), the balance of his or
her pre-tax account (formerly called the "participant directed
account") under the Ceridian Corporation Personal Investment Plan
as of December 31, 1988, increased by the amount of pre-tax
contributions (formerly called "participant directed
contributions") made on the Participant's behalf pursuant to the
Personal Investment Plan for plan years after December 31, 1988
and Pre-Tax Contributions made on the Participant's behalf and
reduced by the amount of any such contributions distributed to
the Participant after December 31, 1988 plus (2) the portion of
the balance of his or her Cash or Deferred Rollover Account
consisting of elective deferrals made on behalf of the
Participant to the plan from which the Account was transferred
(or the portion of such balance not in excess of the
'distributable amount,' as defined in Treasury Regulations,
specified on an exhibit to the Plan) plus (3) the balance of his
or her General Rollover Account. Such withdrawal will be made
only if the Administrator determines that the distribution is
made on account of an immediate and heavy financial need of the
Participant and is necessary to satisfy such financial need.
(A) The existence of an immediate and heavy financial need
will be made by the Administrator on the basis of all relevant
facts and circumstances. A distribution will be deemed to be
made on account of an immediate and heavy financial need,
however, if it is determined by the Administrator to be on
account of:
(1) expenses for medical care, described in Code section
213(d), incurred or to be incurred by the Participant, the
Participant's spouse or the Participant's dependent (as
described in Code section 152);
(2) costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the
Participant;
(3) payment of tuition, related educational fees and room
and board expenses for the next year of post-secondary
education for the Participant or his or her spouse, child or
other dependent; or
(4) payments necessary to prevent the eviction of the
Participant from his or her principal residence or
foreclosure of the mortgage on the Participant's principal
residence.
(B) A distribution will be deemed to be necessary to
satisfy the immediate and heavy financial need of the Participant
only if the Administrator determines that each of the following
requirements is satisfied.
(1) The distribution is not in excess of the sum of the
amount of the immediate and heavy financial need of the
Participant plus, if elected by the Participant, the
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estimated amount of any federal, state and local income
account of the distribution as determined by the
Administrator in accordance with Plan Rules.
(2) The Participant has received all withdrawals and has
taken all nontaxable loans available under the Plan and any
other qualified plan maintained by an Affiliated
Organization.
(3) All Pre-Tax Contributions under the Plan and all
elective deferrals and after-tax employee contributions on
behalf of or by the Participant under any other qualified or
nonqualified deferred compensation plan maintained by an
Affiliated Organization are, to the extent required by
Treasury Regulations, suspended for a period of 12 months
following the date of the distribution.
(4) For the Participant's taxable year following the
taxable year during which he or she received the
distribution, the amount of elective deferrals that may be
made on the Participant's behalf under any qualified plan
maintained by an Affiliated Organization, including Pre-Tax
Contributions pursuant to the Plan, are reduced by the
amount of such elective deferrals made on the Participant's
behalf for the taxable year during which he or she received
the distribution.
(C) The Administrator's determination of the existence of a
Participant's financial hardship and the amount that may be
withdrawn to satisfy the need created by such hardship will be
made in accordance with Treasury Regulations, and is final and
binding on the Participant. The Administrator may require the
Participant to make representations and certifications concerning
his or her entitlement to a withdrawal pursuant to this section
and may rely on such representations and certifications unless
the Administrator has actual knowledge to the contrary. The
Administrator is not obligated to supervise or otherwise verify
that amounts withdrawn are applied in the manner specified in the
Participant's withdrawal application.
(D) Each withdrawal pursuant to this section will be
charged against the Participant's Accounts in the following
order: Pre-Tax Account; Cash or Deferred Rollover Account; and
General Rollover Account.
2 Withdrawals from Accounts After Age 59-1/2 or Disability.
Subject to the provisions of Section 6.4, a Participant who is an
Employee and has attained age 59-1/2 or has become Disabled may
withdraw all or any portion of his or her Account balances.
3 Withdrawals from After-Tax Rollover Account. Subject to the
provisions of Section 6.4, a Participant who is an Employee may
withdraw all or any portion of the balance of his or her After-
Tax Rollover Account.
4 Rules for Withdrawals. (A) A withdrawal distribution will
be made only upon the Administrator's receipt from the
Participant of a complete and accurate written application on a
form provided by the Administrator.
(A) The Participant's withdrawal application must specify
the investment fund or funds from which the withdrawal is to be
made and, in the case of a withdrawal pursuant to Section 6.2,
such withdrawal will be made on a pro rata basis among the
Participant's Accounts invested in that fund or funds.
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(B) All withdrawal distributions will be made as soon as
administratively practicable after the Administrator's
determination that a Participant is entitled to receive the
withdrawal distribution based on the balance of the Account from
which the withdrawal distribution is made that is not
attributable to Company Stock (1) as of the close of business on
the day the Administrator notifies the Trustee of the withdrawal
if the notice is received by the Trustee prior to 1:00 p.m.
Eastern Time or (2) as of the close of business on the next
business day after the Administrator notifies the Trustee of the
withdrawal if the notice is received by the Trustee at or after
1:00 p.m. Eastern Time and based on the balance of the Account
from which the distribution is made that is attributable to
Company Stock determined in the case of a cash withdrawal
distribution based on the actual trading price or if no trade is
required to effect the distribution, based on the closing price
of Company Stock on the business day following the Trustee's
receipt of notice of withdrawal from the Administrator as
reported in the New York Stock Exchange Composite Transactions
listing contained in The Wall Street Journal.
(C) Amounts withdrawn from the Participant's Accounts which
were invested in the Company Stock Fund will be paid in cash or
in full shares of Company Stock, at the election of the
Participant; provided, that withdrawal distributions pursuant to
Section 6.1 will be paid only in the form of cash. All other
withdrawal distributions will be made in the form of cash.
(D) No withdrawal may be made from the portion of a
Participant's Accounts attributable to a note evidencing a Plan
loan.
(E) The provisions of Section 8.8(A) apply to any
withdrawal distribution that constitutes an "eligible rollover
distribution" within the meaning of Code section 402(c)(4).
5 Plan Loans. (A) Each Participant or Beneficiary of a
deceased Participant who is an Employee or is otherwise a 'party
in interest' with respect to the Plan within the meaning of the
Employee Retirement Income Security Act of 1974, as amended, is
entitled to borrow funds from his or her Pre-Tax and Rollover
Accounts, by application to the Administrator on a form provided
by the Administrator, subject, however, to the succeeding
provisions of this section.
(1) The amount of the loan may not cause the aggregate
amount of outstanding loans to the borrower to exceed
the lesser of:
(a) $50,000, reduced by the excess, if any, of
(i) the highest outstanding balance, during the
12-month period ending on the day before the loan
is made, of all loans to the borrower pursuant to
the Plan and all other qualified plans maintained
by an Affiliated Organization over (ii) the
outstanding balance of such loans on the date of
the loan; and
(b) 50 percent of the aggregate balance of the
borrower's Pre-Tax and Rollover Accounts as of the
close of business on the day next preceding the
date of the loan.
(2) No individual loan will be made in an amount less
than $1000 and each loan must be in a multiple of $100.
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(3) No borrower may have outstanding at any time more
than two loans with a maturity of five years or less
and one loan with a maturity of more than five years.
(4) A borrower may not submit more than one application
for a loan during any 30-day period.
(5) No loan will be made to a Beneficiary prior to the
Administrator's determination of the identity of and
amount distributable to the Beneficiary.
(6) Each loan will be charged against the borrower's
Accounts in the following order: Pre-Tax Account; Cash
or Deferred Rollover Account; General Rollover Account;
and After-Tax Rollover Account. No loan will be
charged against any Account until the funds available
for loans in any prior Account in such order have been
exhausted. Loan proceeds will be obtained from the
investment fund or funds in which the borrower's
Accounts are invested as specified by the borrower."
(B) Each loan will bear interest on the unpaid principal
balance at the rate specified by the Administrator. The
Administrator will specify a reasonable rate of interest to be
effective with respect to loans made during the six-month periods
beginning each January 1 and July 1. Interest will accrue from
the date on which the first payment is due.
(C) The borrower must execute a promissory note and
security agreement provided by the Administrator, which:
(1) create in the Trust a valid first lien against one-half
of the borrower's entire right, title and interest in and to
that portion of his or her Accounts equal to the initial
amount of the loan plus accrued and unpaid interest thereon;
(2) provide for a maturity date not to exceed five years
from the date of the note or not to exceed ten years from
the date of the note if the Administrator determines, at the
time of the loan, that the proceeds of such loan are to be
used by the borrower to acquire a house, apartment,
condominium or mobile home which is used, or is intended to
be used within a reasonable time after the loan is made, as
the borrower's principal residence;
(3) provide for payments of principal and interest in equal
installments of such frequency, not less frequently than
quarterly, in such minimum amounts and for such maximum
period as prescribed by Plan Rules;
(4) provide that upon (a) default in payment or otherwise,
(b) termination of a Participant's employment or the
occurrence of any other event permitting or requiring
distribution and (c) a borrower becoming employed with the
purchaser of all or a portion of an Affiliated
Organization's trade or business, the unpaid indebtedness
will be accelerated and satisfied from any distribution then
due and from the balance of the borrower's Accounts that
could then be distributed, and that the date on which
repayment of any remaining part of such unpaid indebtedness
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is due will be extended, and interest will continue to
accrue, until the earliest date on which the borrower or his
or her Beneficiary could receive a distribution, on which
date the unpaid indebtedness will be satisfied in full and
the Account will be reduced by the amount of the unpaid
indebtedness immediately prior to the satisfaction.
(D) For purposes of this section, a default will be deemed
to occur if part or all of any payment of principal or interest
is not paid on or before 90 days after the most recent payment,
provided, however, that if the borrower is an Employee who is on
approved unpaid leave of absence or layoff status on the date a
default would otherwise occur, default will not occur until the
earliest of the following:
(1) the thirtieth day following the earlier to occur of the
first anniversary of the commencement of the leave of
absence or layoff, or the borrower's return to active
employment; provided that a default will not occur if, on or
before such day, the total amount of principal payments
previously due and all accrued interest are repaid;
(2) the thirtieth day after the earlier to occur of the
first anniversary of the commencement of the leave of
absence or layoff, or the termination of the approved leave
or layoff, if the borrower does not return to active
employment with an Affiliated Organization; or
(3) the maturity date of the borrower's promissory note.
(E) In addition to the documents described in Subsection
(C), each borrower who is an Employee must execute an appropriate
document under which any Affiliated Organization is authorized to
deduct from the borrower's pay the amount of payments due under
the terms of any such loan, and each borrower must provide such
other documents as may from time to time be required by Plan
Rules.
(F) Before making any loan, the Administrator will deliver
to the borrower a clear statement of the charges involved in the
proposed loan transaction, which statement will include the
dollar amount of the loan, the annual rate of the finance charge
and the aggregate amount of the finance charge to the date of
maturity.
(G) Each loan is a loan by the Trust Fund, but for trust
accounting purposes the loan will be deemed made from the
borrower's own Accounts, and the note executed by the borrower
will be deemed to be an asset of such Accounts. Upon making a
loan, the borrower's Account or Accounts will be reduced by an
amount equal to the principal balance of the loan, effective as
of the date of the loan, and a Loan Account will be established
for the borrower with an initial balance equal to the principal
amount of such loan. All such Loan Accounts will be excluded for
purposes of determining and allocating the net earnings (or
losses) of the Trust pursuant to Section 4.2. A borrower's
repayments of principal and payments of interest will be credited
to the Accounts from which the loan proceeds were obtained in
reverse of the order in which the loan was taken from the
Accounts until the amount borrowed from each such Account has
been fully replaced by principal repayments. On the close of
business next following the Trustee's receipt of such a payment,
the Loan Account of each borrower will be reduced by the amount
of the principal payment credited to such borrower's Accounts on
such date. Repayments of loan principal and payments of interest
will be invested among the investment funds in accordance with
the borrower's most recent investment directions with respect to
new contributions under the Plan, but if no contributions are
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currently being made to the borrower's Accounts and the borrower
does not file a new investment direction, such repayments will be
invested in an investment fund designated by the Administrator.
(H) The Administrator will establish a means pursuant to
which a borrower may make loan repayments by payroll deduction or
other periodic payments. Loans, including any accrued interest,
may be repaid in whole or in part without penalty at any time
after the first anniversary of the date the loan was made.
(I) Plan Rules may establish such other terms and
conditions as may be necessary or desirable for the
administration of loans under this section.
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VII
Vesting and Forfeitures
1 Vesting. (A) Each Participant will always have a fully
vested, nonforfeitable interest in his or her Pre-Tax Account,
Basic Matching Account and Rollover Account.
(A) A Participant will acquire a fully vested
nonforfeitable interest in his or her Performance-Based Matching
Account upon attaining his or her Normal Retirement Date while
employed with an Affiliated Organization.
(B) A Participant will acquire a fully vested
nonforfeitable interest in his or her Performance-Based Matching
Account if he or she dies or becomes Disabled while employed with
an Affiliated Organization.
(C) A Participant whose employment terminates prior to his
or her Normal Retirement Date other than by reason of death or
becoming Disabled will acquire a vested nonforfeitable interest
in his or her Performance-Based Matching Account to the extent
provided in the following schedule:
Years of Vesting Service Vested Interest
Less than Two Years 0%
Two Years 40%
Three Years 60%
Four Years 80%
Five or More Years 100%
2 Forfeiture Upon Distribution (A) If the entire vested
balance of a Participant's Accounts is distributed not later than
the last day of the second Plan Year following the Plan Year
during which his or her employment terminates, and if the amount
distributed was not more than $3500 or the distribution was made
with the Participant's consent, the nonvested portion of the
Participant's Performance-Based Matching Account will, at the
time of the distribution, be forfeited. A Participant who has no
vested interest in his or her Performance-Based Matching Account
at termination of employment will be deemed to have received
distribution of the entire vested balance in such Account upon
such termination.
(A) If a Participant described in Subsection (A)(i)
received a distribution of less than the entire balance of his or
her Accounts, (ii) resumes employment as a Qualified Employee and
(iii) repays to the Trustee the full amount distributed before
the earlier of (a) five years following the date of his or her
reemployment as a Qualified Employee or (b) the date on which he
or she incurs a Break in Service of five full years following the
distribution, then, the Participating Employer with whom he or
she was last employed will restore the amount forfeited to the
Participant's Performance-Based Matching Account, unadjusted for
any change in Fund value occurring since the distribution. The
restoration will be made from forfeitures that arise for the Plan
Year for which the restoration is to be made. To the extent such
forfeitures are insufficient for such purpose, the Participating
Employer will contribute the amount required to restore the
Account. A Participant described in the last sentence of
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Subsection (A) who is reemployed prior to experiencing a Break in
Service of at least five full years will be deemed to have repaid
his or her deemed distribution upon his or her reemployment as a
Qualified Employee.
3 Other Forfeitures. (A) Except as provided in Section 7.2,
the nonvested portion of a Participant's Performance-Based
Matching Account will continue to be held in a separate
subaccount of such Account until the Participant incurs a Break
in Service of five full years, at which time the subaccount
balance will be forfeited. If the Participant resumes employment
with an Affiliated Organization before the subaccount balance is
forfeited, the subaccount balance will be included in the
Participant's Performance-Based Matching Account balance.
(A) A Participant's vested interest in his or her
Performance-Based Matching Account balance following a resumption
of employment in accordance with the last sentence of Subsection
(A) at any given time will not be less than the amount "X"
determined by the formula: X = P(AB + (R x D)) - (R x D), where
P is the Participant's vested percentage at the time of
determination; AB is the Account balance at the time of
determination; D is the amount of the distribution; and R is the
ratio of the Account balance at the time of determination, to the
Account balance immediately following the distribution.
4 Reallocation of Forfeitures. All forfeitures occurring
under this article in a Plan Year will be allocated as of the
last day of such Plan Year as follows:
(1) Such forfeitures will first be applied to restore the
accounts of Participants as provided in Section 7.2(B); and
(2) Any remaining forfeitures will be applied toward the
Matching Contribution obligations of the Participating
Employer with whom the Participant in question was last
employed.
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VIII
Distributions After Termination
1 Time of Distribution. (A) Following a Participant's
termination of employment or earlier attainment of age 70-1/2,
the Trustee will distribute to the Participant or, if the
Participant has died, to his or her Beneficiary, the vested
balance of the Participant's Accounts. The amount of such
distribution will be equal to the aggregate vested balance of the
Participant's Accounts as of the close of business on the day
following the day on which the Trustee has received instruction
from the Administrator that all information necessary for
processing the distribution has been received and approved.
Subject to the remaining subsections of this section and Sections
8.2 and 8.8, distributions will be made in accordance with the
following provisions.
(1) If the aggregate vested balance of the Participant's
Accounts at the time of the distribution is not more than
$3500, distribution to the Participant will be made as soon
as administratively practicable following the Participant's
termination of employment or, if the Participant's
employment has not terminated, following the date on which
the Participant attains age 70-1/2. This clause will not
apply, however, if the Participant's Account balance
exceeded $3500 at the time of any previous distribution to
the Participant.
(2) Except as provided in clause (1), distribution to the
Participant of his or her vested Account balances will be
made on or as soon as administratively practicable following
such date as the Participant specifies by written notice to
the Administrator, which date will not be later than the
date specified under Subsection (B).
(3) Any distribution to the Participant's Beneficiary will
be made as soon as administratively practicable following
the Administrator's receipt of notice of the Participant's
death.
(B) Distribution of each Participant's vested Account
balance will be made in full not later than the earlier of -
(1) the sixtieth day following the close of the Plan Year
during which there occurs the later of -
(a) the date the Participant terminates employment,
(b) the Participant's Normal Retirement Date; or
(2) the April 1 of the calendar year following the calendar
year during which the Participant attains age 70-1/2.
(C) Any contribution allocated to the Account of a
Participant who has attained age 70-1/2 will be distributed not
later than the last day of the Plan Year following the Plan Year
for which such allocation was made.
(D) Notwithstanding any other provision of the Plan to the
contrary, distributions will be made in accordance with Treasury
Regulations issued under Code section 401(a)(9), including
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Treasury Regulation section 1.401(a)(9)-2, and any provisions of
the Plan reflecting Code section 401(a)(9) take precedence over
any distribution options that are inconsistent with Code section
401(a)(9).
2 Form of Distribution. (A) Any distribution under the Plan
will be made in the form of a single lump sum payment.
(A) Distributions will be made in the form of cash;
provided, that to the extent that the Account to be distributed
is invested in the Company Stock Fund immediately prior to the
distribution, at the election of the Participant or Beneficiary,
as the case may be, the number of whole shares of Company Stock
credited to the Account will be distributed in kind.
3 Beneficiary Designation. (A) (1) Each Participant may
designate, upon forms furnished by the Administrator, one or
more individuals to be primary Beneficiaries or alternative
Beneficiaries for all or a specified fractional part of his
or her aggregate Accounts and may change or revoke any such
designation from time to time. No such designation, change
or revocation is effective unless executed by the
Participant and received by the Administrator during the
Participant's lifetime. Except as provided in Subsection
(B), no such change or revocation requires the consent of
any person.
(1) If a Participant
(a) fails to designate a Beneficiary, or
(b) revokes a Beneficiary designation without naming
another Beneficiary, or
(c) designates one or more Beneficiaries none of whom
survives the Participant,
for all or any portion of the Accounts, such Accounts or
portion will be distributed to the first class of the
following classes of automatic Beneficiaries that includes a
member surviving the Participant:
Participant's spouse;
Participant's issue, per stirpes and not per capita;
Participant's parents;
Participant's brothers and sisters;
Representative of Participant's estate.
(2) When used in this section and, unless the designation
otherwise specifies, when used in a Beneficiary designation,
the term "per stirpes" means in equal shares among living
children and the issue (taken collectively) of each deceased
child, with such issue taking by right of representation;
"children" means issue of the first generation; and "issue"
means all persons who are descended from the person referred
to, either by legitimate birth or legal adoption. The
automatic Beneficiaries specified above and, unless the
designation otherwise specifies, the Beneficiaries
designated by the Participant, become fixed as of the
Participant's death so that, if a Beneficiary survives the
Participant but dies before the receipt of the payment due
such Beneficiary, the payment will be made to the
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representative of such Beneficiary's estate. Any
designation of a Beneficiary by name that is accompanied by
a description of relationship or only by statement of
relationship to the Participant is effective only to
designate the individual or individuals standing in such
relationship to the Participant at the Participant's death.
(B) Notwithstanding Subsection (A), no designation of a
Beneficiary other than the Participant's spouse is effective
unless such spouse consents to the designation. Any such consent
is effective only with respect to the Beneficiary or class of
Beneficiaries so designated and only with respect to the spouse
who so consented.
4 Assignment, Alienation of Benefits. (A) Except as required
under a qualified domestic relations order or by the terms of any
loan from the Trust, no benefit under the Plan may in any manner
be anticipated, alienated, sold, transferred, assigned, pledged,
encumbered or charged, and any attempt to do so is void; and no
such benefit will in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of the person
entitled to such benefit.
(A) To the extent provided in a qualified domestic
relations order, distribution of benefits assigned to an
alternate payee by such order may be distributed to the alternate
payee in the form of a lump sum prior to the Participant's
earliest retirement age. The terms "qualified domestic relations
order," "alternate payee" and "earliest retirement age" have the
meanings given in Code section 414(p).
5 Payment in Event of Incapacity. If any person entitled to
receive any payment under the Plan is physically, mentally, or
legally incapable of receiving or acknowledging receipt of the
payment, and no legal representative has been appointed for such
person, the Administrator in his or her discretion may (but is
not required to) cause any sum otherwise payable to such person
to be paid to any one or more as may be chosen by the
Administrator from the following: the Beneficiaries, if any,
designated by such person, the institution maintaining such
person, a custodian for such person under the Uniform Transfers
to Minors Act of any state or such person's spouse, children,
parents or other relatives by blood or marriage. Any payment so
made constitutes a complete discharge of all liability under the
Plan with respect to any such payment.
6 Payment Satisfies Claims. Any payment to or for the benefit
of any Participant, legal representative or Beneficiary in
accordance with the provisions of the Plan will, to the extent of
such payment, be in full satisfaction of all claims against the
Trustee, the Committee, the Administrator and the Participating
Employer, any of whom may require the payee to execute a
receipted release as a condition precedent to such payment.
7 Disposition if Distributee Cannot be Located. If the
Administrator is unable to locate a Participant or Beneficiary to
whom a distribution is due, the Participant's Accounts will
continue to be held in the Fund and invested in accordance with
Plan Rules until such time as the Administrator has located the
Participant or Beneficiary or the Participant or Beneficiary
makes a proper claim for the benefit, as the case may be;
provided, that, any Accounts not claimed within the period
prescribed by applicable escheat laws will be paid to such
governmental authorities, in such manner, as is specified in such
laws.
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8 Transfers to Other Plans or Individual Retirement
Arrangements. (A) To the extent a distribution pursuant to the
Plan is an "eligible rollover distribution" within the meaning of
Code section 402(c)(4), the Committee will, if so instructed by
the distributee in accordance with Plan Rules, direct the Trustee
to make the distribution to an 'eligible retirement plan' within
the meaning of Code section 402(c)(8). The foregoing provisions
will not apply with respect to any portion of an eligible
rollover distribution that consists of an offset amount with
respect to a Plan loan. Not more than 90 days and not less than
30 days before any eligible rollover distribution, the Committee
will provide the distributee with a notice that satisfies the
requirements of Code section 402(f). A distributee may waive the
30-day advance notice requirement in a manner specified in Plan
Rules.
(A) The Committee may, in conjunction with (1) the sale of
an Affiliated Organization or the sale by an Affiliated
Organization of all or a portion of a business operation of the
Affiliated Organization, direct the Trustee to transfer the
balance of any or all of the Accounts of each Participant who is
employed with the purchaser of such business operation or an
affiliate, to the trustee of a plan sponsored by such purchaser
or affiliate or (2) a Participant who has ceased to be a
Qualified Employee becoming a participant in a plan sponsored by
an Affiliated Organization, direct the Trustee to transfer the
balance of any or all of the Participant's Accounts to the
Trustee of the Affiliated Organization's plan; provided, in
either case, that
(a) such other plan is qualified under Code section 401(a),
(b) such other plan satisfies the withdrawal requirements
set forth in Code section 401(k) with respect to such
transferred Accounts to which such requirements are
applicable under the Plan, and
(c) such trustee is willing to accept such transfer.
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IX
Contribution Limitations
1 Pre-Tax Contribution Dollar Limitation. The aggregate
amount of Pre-Tax Contributions and other "elective deferrals"
(within the meaning of Code section 402(g)(3)) under any other
qualified plan maintained by an Affiliated Organization with
respect to a Participant for any taxable year of the Participant
may not exceed $7000 (automatically adjusted for increases in the
cost of living in accordance with Treasury Regulations). The
limitation for any Participant who received a hardship
distribution under Section 6.1 will, for the year following the
year in which such distribution was made, be reduced as provided
in Section 6.1(C)(4). If the foregoing limitation is exceeded
for any taxable year of the Participant, the Participant will be
deemed to have notified the Administrator of such excess and the
amount of Pre-Tax Contributions in excess of such limitation,
increased by Fund earnings or decreased by Fund losses
attributable to the excess, determined in accordance with Section
9.5, will be distributed to the Participant. Such distribution
may be made at any time after the excess contributions are
received but not later than April 15 of the taxable year
following the taxable year to which such limitation relates. The
amount distributed to a Participant who has made elective
deferrals for the taxable year other than pursuant to Section 3.1
will, to the extent of such other elective deferrals, be
determined in accordance with written allocation instructions
received by the Administrator from the Participant not later than
March 1 of the taxable year following the taxable year with
respect to which the Pre-Tax Contributions were made.
2 Actual Deferral Percentage Limitations. (A) Notwithstanding
Section 3.1, for any Plan Year, Pre-Tax Contributions may be made
on behalf of Active Participants who are Highly Compensated
Employees only if the requirements of Code section 401(k)(3), as
set forth in Subsection (B), are satisfied. To the extent deemed
necessary by the Administrator in order to comply with such
requirements, the Administrator may, in accordance with Plan
Rules, prospectively decrease the rate at which a Participant's
Eligible Earnings will be reduced.
(A) (1) The requirements of Code section 401(k)(3) will be
satisfied for any Plan Year if, for that Plan Year, the Plan
satisfies the requirements of Code section 410(b)(1) with
respect to "eligible employees" and either of the following
tests.
(a) The "actual deferral percentage" for eligible
employees who are Highly Compensated Employees is not
more than the product of the actual deferral percentage
for all other eligible employees, multiplied by one and
one-quarter.
(b) The excess of the actual deferral percentage for
eligible employees who are Highly Compensated Employees
over the actual deferral percentage for all other
eligible employees is not more than two percentage
points and the actual deferral percentage for eligible
employees who are Highly Compensated Employees is not
more than the product of the actual deferral percentage
of all other eligible employees, multiplied by two.
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(2) For purposes of this section,
(a) "eligible employee" means an Active Participant
who is eligible to have Pre-Tax Contributions made on
his or her behalf for the Plan Year in question or
would be so eligible but for a suspension imposed under
Section 6.1(C)(3); and
(b) "actual deferral percentage," with respect to
either of the two groups of eligible employees
referenced above, is the average of the ratios,
calculated separately for each eligible employee in the
particular group, of the amount of Pre-Tax
Contributions made on behalf of the eligible employee
for that Plan Year, to the eligible Employee's Testing
Wages for the Plan Year or the portion of the Plan Year
during which he or she was an eligible employee, as
specified in Plan Rules. In computing the actual
deferral percentage, the following rules apply.
(i) If aggregation of Pre-Tax Contributions and
Testing Wages is required under Sections 11.22(C)
and 11.41(C), the actual deferral percentage of
the Highly Compensated Employee to whom the
aggregate amounts are attributed is the actual
deferral percentage determined for the group of
all eligible family members, treating such group
as a single eligible employee.
(ii) If any eligible Employee is required to be
aggregated with more than one family group under
Section 11.22(C), all the groups with which the
eligible employee is aggregated will be treated as
a single family group.
(iii) Any Pre-Tax Contributions made on behalf of
an eligible employee who is not a Highly
Compensated Employee that are in excess of the
limitation of Section 9.1 will be excluded.
(iv) Any Pre-Tax Contributions made on behalf of
an eligible employee that are distributed to the
eligible employee pursuant to Section 9.6(C) or
9.7(D) will be excluded.
(v) Except as otherwise provided in Treasury
Regulations, Pre-Tax Contributions taken into
account in determining the actual contribution
percentage under Section 9.3(B)(2) will be
excluded.
(vi) To the extent determined by the
Administrator, all or any portion of the Basic
Matching Contribution for the Plan Year on behalf
of all or any similarly situated group of eligible
employees will be included.
(vii) Elective contributions under any other plan
that is aggregated with this Plan to satisfy the
requirements of Code section 410(b) will be
included.
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(viii) To the extent required by Treasury
Regulations, elective contributions made under any
other qualified cash or deferred arrangement of
any Affiliated Organization on behalf of any
eligible employee who is a Highly Compensated
Employee will be included.
(B) If, for any Plan Year, the requirements of Subsection
(B) are not satisfied, the Administrator will determine the
amount by which Pre-Tax Contributions made on behalf of each
eligible employee who is a Highly Compensated Employee for the
Plan Year exceeds the permissible amount as determined under
Subsection (B). The determination will be made by successively
decreasing the rate of Eligible Earnings reductions for Highly
Compensated Employees who, during the Plan Year, had the greatest
percentage of Eligible Earnings reductions, to the next, lower
percentage, then again decreasing the percentage of such Highly
Compensated Employees Eligible Earnings reductions, together with
the percentage of Eligible Earnings reductions of such Highly
Compensated Employees who were already at such lower percentage,
to the next lower percentage, and continuing such procedure for
as many percentage decreases as the Administrator deems
necessary. The Administrator may, in his or her discretion, make
such reductions in any amount, in lieu of one percent increments.
(C) At such time as the Administrator specifies following
the last day of the Plan Year for which the determination
described in Subsection (C) is made, but in no case later than
the last day of the following Plan Year, the excess will be
corrected by taking either or both of the following steps.
(1) The amount of excess Pre-Tax Contributions so
determined, increased by Fund earnings or decreased by Fund
losses attributable to such excess as determined under
Section 9.5, will be distributed to each such Highly
Compensated Employee. The amount to be returned pursuant to
the foregoing sentence with respect to any Plan Year will be
reduced by the portion of the amount, if any, distributed
pursuant to Section 9.1 that is attributable to Pre-Tax
Contributions that relate to such Plan Year, determined by
assuming that Pre-Tax Contributions in excess of the
limitation described in Section 9.1 for a given taxable year
are the first contributions made for a Plan Year falling
within such taxable year.
(2) The Participating Employer will make an additional
contribution for the Plan Year pursuant to Section 3.4.
(D) Any excess amount determined under Subsection (C) for a
Highly Compensated Employee whose actual deferral percentage is
determined under Subsection (B)(2)(b)(i) will be allocated among
all persons whose contributions are aggregated to determine such
percentage in proportion to the amount of Pre-Tax Contributions
made on behalf of each with respect to the Plan Year.
(E) To the extent required or permitted by Treasury
Regulations, the Administrator will or may, as the case may be,
apply the limitations described in this section separately to
each group of eligible employees who are included in a unit of
employees covered by a collective bargaining agreement and those
who are not included or are included in a different unit.
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3 Actual Contribution Percentage Limitations. (A)
Notwithstanding Section 3.2, for any Plan Year, Matching
Contributions may be made on behalf of Participants who are
Highly Compensated Employees with respect to that Plan Year only
to the extent that either of the following tests is satisfied.
(1) The "actual contribution percentage" for "eligible
employees" who are Highly Compensated Employees is not more
than the product of the actual contribution percentage for
all other eligible employees, multiplied by one and one-
quarter.
(2) The excess of the actual contribution percentage for
eligible employees who are Highly Compensated Employees
over the actual contribution percentage for all other
eligible employees is not more than two percentage points
and the actual contribution percentage for eligible
employees who are Highly Compensated Employees is not more
than the product of the actual contribution percentage for
all other eligible Employees, multiplied by two.
(B) For purposes of this section,
(1) "eligible employee" means an Active Participant who is
eligible to have Matching Contributions made on his or her
behalf for the Plan Year in question or would have been so
eligible had he or she elected to make Pre-Tax Contributions
for such Plan Year, and
(2) the "actual contribution percentage" with respect to
either of the two groups of eligible employees referenced
above, is the average of the ratios, calculated separately
for each eligible employee in the particular group, of the
aggregate amount of Matching Contributions made on behalf of
the eligible employee for the Plan Year, to the eligible
employee's Testing Wages for the Plan Year or the portion of
the Plan Year during which he or she was an eligible
employee, as specified in Plan Rules. In computing the
actual contribution percentage, the following rules apply.
(a) If aggregation of Matching Contributions and
Testing Wages is required under Sections 11.22(C) and
11.41(C), the actual contribution percentage of the
Highly Compensated Employee to whom the aggregate
amounts are attributed is the actual contribution
percentage determined for the group of all eligible
family members, treating such group as a single
eligible employee.
(b) If any eligible employee is required to be
aggregated with more than one family group under
Section 11.22(C), all the groups with which the
eligible employee is aggregated will be treated as a
single family group.
(c) Except as otherwise provided in Treasury
Regulations, Basic Matching Contributions taken into
account in determining the actual deferral percentage
under Section 9.2(B)(2)(b) will be excluded.
(d) Matching Contributions taken into account for
purposes of the minimum contribution required pursuant
to Section 13.3(A) will be excluded.
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<PAGE>
(e) To the extent determined by the Administrator, all
or any portion of the Pre-Tax Contributions for the
Plan Year on behalf of eligible employees will be
included.
(f) Matching contributions (within the meaning of Code
section 401(m)(4)(A)) and after-tax contributions made
under any other plan that is aggregated with this Plan
to satisfy the requirements of Code section 410(b) will
be included.
(g) To the extent required by Treasury Regulations,
matching contributions (within the meaning of Code
section 401(m)(4)(A)) and after-tax contributions made
under any other qualified plan of any Affiliated
Organization on behalf of or by any eligible employee
who is a Highly Compensated Employee will be included.
(C) If, for any Plan Year, the requirements of Subsection
(A) are not satisfied, the Administrator will determine the
amount by which Matching Contributions made on behalf of each
eligible employee who is a Highly Compensated Employee for the
Plan Year exceeds the permissible amount as determined under
Subsection (A), such determination being made in accordance with
the procedure described in Section 9.2(C).
(D) At such time as the Administrator specifies following
the last day of the Plan Year for which the determination
described in Subsection (C) is made, but in no case later than
the last day of the following Plan Year, the excess will be
corrected by taking either or both of the following steps.
(1) The amount of excess Matching Contributions so
determined with respect to each Highly Compensated Employee,
increased by Fund earnings or decreased by Fund losses
attributable to such excess as determined under Section 9.5,
will be distributed to such Highly Compensated Employee
first from his or her Basic Matching Account and then from
his or her Performance-Based Matching Account; provided,
that to the extent any excess Performance-Based Matching
Contributions would not be fully vested if retained in the
Plan, such excess will be forfeited rather than distributed
and any such forfeitures will be applied as provided in
Section 3.2(D).
(2) The Participating Employer will make an additional
contribution for the Plan Year pursuant to Section 3.4.
(E) Any excess amount determined under Subsection (C) for a
Highly Compensated Employee whose actual contribution percentage
is determined under Subsection (B)(2)(a) will be allocated among
all persons whose contributions are aggregated to determine such
percentage in proportion to the amount of Matching Contributions
made on behalf of each with respect to the Plan Year.
(F) To the extent provided in Treasury Regulations, the
limitations described in this section do not apply to any group
of eligible employees who are included in a unit of employees
covered by a collective bargaining agreement.
4 Multiple Use Limitation. (A) This section applies for any
Plan Year for which the sum of the actual deferral percentage, as
determined under Section 9.2(B)(2)(b), for eligible employees who
are Highly Compensated Employees plus the actual contribution
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<PAGE>
percentage, as determined under Section 9.3(B)(2), for eligible
employees who are Highly Compensated Employees, exceeds the
"aggregate limit." For purposes of this subsection, the
aggregate limit is the greater of:
(1) The sum of:
(a) the product of one and one-quarter, multiplied by
the greater of:
(i) the actual deferral percentage, as determined
under Section 9.2(B)(2)(b), for the Plan Year for
eligible employees who are not Highly Compensated
Employees, or
(ii) the actual contribution percentage, as
determined under Section 9.3(B)(2), for the Plan
Year for eligible employees who are not Highly
Compensated Employees;
plus
(b) the sum of two percentage points plus the lesser
of the actual deferral percentage determined under item
(i) of clause (a) above or the actual contribution
percentage determined under item (ii) of clause (a)
above, with such sum in no case exceeding twice the
lesser of such actual deferral percentage or actual
contribution percentage;
(2) or
The sum of:
(a) the product of one and one-quarter, multiplied by
the lesser of:
(i) the actual deferral percentage, as determined
under Section 9.2(B)(2)(b), for the Plan Year for
eligible employees who are not Highly Compensated
Employees, or
(ii) the actual contribution percentage, as
determined under Section 9.3(B)(2), for the Plan
Year for eligible employees who are not Highly
Compensated Employees;
plus
(b) the sum of two percentage points plus the greater
of the actual deferral percentage determined under item
(i) of clause (a) above or the actual contribution
percentage determined under item (ii) of clause (a)
above, with such sum in no case exceeding twice the
lesser of such actual deferral percentage or actual
contribution percentage.
(B) If, for any Plan Year, the calculations under
Subsection (A) require that this section be applied, the
Administrator will determine the amount by which Matching
Contributions made on behalf of each Highly Compensated Employee
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<PAGE>
for the Plan Year causes the excess amount determined under
Subsection (A), such determination being made in accordance with
the provisions of Section 9.3(C). At such time as the
Administrator specifies following the last day of the Plan Year
for which such determination is made, but in no case later than
the last day of the following Plan Year, the excess will be
corrected by taking any one or more of the steps described in
Sections 9.2(D) and 9.3(C).
(C) To the extent provided in Treasury Regulations, the
limitations described in this section do not apply to any group
of eligible employees who are included in a unit of employees
covered by a collective bargaining agreement.
5 Earnings on Excess Contributions. The amount of Fund
earnings or losses with respect to the excess amount of
contributions distributed to a Highly Compensated Employee
pursuant to the foregoing provisions of this article is an amount
equal to the product of the total earnings or losses for the
Participant's Account to which the excess contributions were
added for the Plan Year, multiplied by a fraction, the numerator
of which is the excess amount of contributions made on the
Participant's behalf to the Account for the Plan Year, and the
denominator of which is the closing balance of the Account for
the Plan Year, decreased by the amount of earnings added to the
Account, or increased by the amount of losses subtracted from the
Account, for the Plan Year.
6 Aggregate Defined Contribution Limitations. (A)
Notwithstanding any contrary provisions of this Plan, there will
not be allocated to any Participant's Accounts for a Plan Year
any amount that would cause the aggregate "annual additions" with
respect to the Participant for the Plan Year to exceed the lesser
of (1) $30,000 (or, if greater, one-fourth of the dollar
limitation in effect under Code section 415(b)(1)(A) for the
calendar year during which the Plan Year in question begins) and
(2) 25 percent of the Participant's Section 415 Wages for the
Plan Year.
(A) For purposes of Subsection (A), the "annual additions"
with respect to a Participant for a Plan Year are the sum of -
(1) the aggregate amount of Pre-Tax and Matching
Contributions allocated to the Participant's Accounts for
the Plan Year (including any such contributions that are
distributed pursuant to Section 9.2, 9.3 or 9.4, but
excluding any Pre-Tax Contributions in excess of the
limitation described in Section 9.1 that are distributed to
the Participant by the April 15 following the Plan Year to
which the contributions relate) and employer contributions,
employee contributions and forfeitures allocated to the
Participant's accounts under any other qualified defined
contribution plan maintained by any Affiliated Organization
for the Plan Year; plus
(2) the amount, if any, attributable to post-retirement
medical benefits that is allocated to a separate account for
the Participant as a "key employee" (as defined in Section
13.3(C)), to the extent required under Code section
419A(d)(1).
(B)(1) If the Administrator, in his or her discretion,
determines that the limitation under Subsection (A) would
otherwise be exceeded for a Plan Year, to the extent
necessary to prevent such excess from occurring the amount
of a Participant's Eligible Earnings reductions and Pre-Tax
Contributions will be prospectively reduced.
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<PAGE>
(1) If a further reduction of contributions is required,
the Matching Contributions that would otherwise be allocated
to the Participant's Account will be reduced and the
aggregate amount of Matching Contributions for the Plan Year
will be reduced by the same amount.
(2) If, in spite of such reductions and as a result of
reasonable error in estimating the amount of the
Participant's Eligible Earnings, Pre-Tax Contributions,
other elective deferrals within the meaning of Code
section 402(g)(3) or Section 415 Wages for the Plan Year,
the limitation would otherwise be exceeded, then, to the
extent required to prevent such excess, the amount of Pre-
Tax Contributions made for the Participant will be
distributed to the Participant and any Matching
Contributions attributable to the amount so distributed,
together with earnings on such contributions, will be
forfeited and applied as provided in Section 3.2(D).
7 Aggregate Defined Contribution/Defined Benefit Limitations.
(A) Notwithstanding any contrary provisions of the Plan, in no
event will the amount of a Participant's annual additions under
the Plan exceed an amount that would cause the decimal equivalent
of the sum of the "defined benefit fraction" plus the "defined
contribution fraction" to exceed one.
(B) The "defined benefit fraction" is a fraction, the
numerator of which is the Participant's aggregate projected
annual benefit under all qualified defined benefit pension plans
maintained by any Affiliated Organization (determined as of the
end of the Plan Year), and the denominator of which is the lesser
of:
(1) 125 percent of the maximum dollar benefit limitation in
effect under Code section 415(b)(1)(A) for the calendar year
during which the Plan Year in question begins under such
defined benefit pension plans; and
(2) 140 percent of the average Section 415 Wages of the
Participant during the three consecutive Plan Years during
which he or she was a participant in any such defined
benefit pension plan which produce the highest average.
(C) The "defined contribution fraction" is a fraction, the
numerator of which is the sum of the annual additions to the
Participant's accounts for the Plan Year under this Plan and any
other qualified defined contribution plans maintained by any
Affiliated Organization, determined in the manner described in
Section 9.6, and the denominator of which is the aggregate of the
lesser of:
(1) 125 percent of the maximum annual addition dollar
limitation in effect under Code section 415(c)(1)(A) for the
calendar year during which the Plan Year in question begins
under such defined contributions plans; and
(2) 140 percent of 25 percent of the Participant's Section
415 Wages for the Plan Year,
applied for all years during which the Participant was employed
with an Affiliated Organization, without regard to whether there
was a defined contribution plan in effect during all such years.
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<PAGE>
(D) If the annual additions that would otherwise be made
with respect to a Participant for a Plan Year would cause the
limitation of Subsection (A) to be exceeded, the Participant's
benefit under one or more defined benefit pension plans
maintained by an Affiliated Organization will, to the extent
provided in such plans, be reduced to the extent necessary to
prevent such excess from occurring, and, if a sufficient
reduction cannot be made under such plans, the provisions of
Section 9.6(C) will be applied to reduce the amount of the annual
additions to the Participant's Accounts under this Plan for such
Plan Year to the extent necessary to prevent such excess.
8 Administrator's Discretion. Notwithstanding the foregoing
provisions of this article, the Administrator may, in his or her
discretion, apply the provisions of Sections 9.1 through 9.7 in
any manner permitted by Treasury Regulations that will cause the
Plan to satisfy the limitations of the Code incorporated in such
sections, and the Administrator's good faith application of
Treasury Regulations is binding on all Participants and
Beneficiaries.
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<PAGE>
X
Amendment and Termination
1 Adoption by Affiliated Organizations. Any Affiliated
Organization may adopt this Plan and become a Participating
Employer with the prior approval of the Administrator by
furnishing to the Administrator a certified copy of a resolution
of its Board adopting the Plan. Any adoption of the Plan by an
Affiliated Organization, however, must either be approved by the
Company's Board in advance or ratified by such Board prior to the
end of the fiscal year of such Affiliated Organization in which
it adopts the Plan.
2 Authority to Amend and Procedure. (A) The Company reserves
the right to amend the Plan at any time, to any extent that it
may deem advisable. Each amendment will be stated in a written
instrument approved in advance or ratified by the Company's Board
and executed in the name of the Company by its duly authorized
officers. On and after the effective date of the amendment, all
interested parties will be bound by the amendment; provided,
first, that no amendment will increase the duties or liabilities
of the Trustee without its written consent; and, second, that no
amendment will have any retroactive effect so as to deprive any
Participant, or any Beneficiary of a deceased Participant, of any
benefit already accrued or vested or of any option with respect
to the form of such benefit that is protected by Code Section
411(d)(6), except that any amendment that is required to conform
the Plan with Treasury Regulations so as to qualify the Trust for
income tax exemption may be made retroactively to the Effective
Date of the Plan or to any later date.
(A) If the schedule for determining the extent to which
benefits under the Plan are vested is changed, whether by
amendment or on account of the Plan's becoming or ceasing to be a
top-heavy plan, each Participant with at least three years of
service may elect to have his or her vested benefits determined
without regard to such change by giving written notice of such
election to the Administrator within the period beginning on the
date such change was adopted (or the Plan's top heavy status
changed) and ending 60 days after the latest of (a) the date such
change is adopted, (b) the date such change becomes effective or
(c) the date the Participant is issued notice of such change by
the Administrator or the Trustee. Except as otherwise provided
in an amendment permitted by Treasury Regulations, if an optional
form of benefit payment protected under Code section 411(d)(6) is
eliminated, each Participant may elect to have that portion of
the value of his or her Accounts that was accrued as of the date
of such elimination, distributed in the optional form of benefit
payment that was eliminated.
(B) The provisions of the Plan in effect at the termination
of a Participant's employment will, except as specifically
otherwise provided by a subsequent amendment, continue to apply
to such Participant.
3 Authority to Terminate and Procedure. The Company expects
to continue the Plan indefinitely but reserves the right to
terminate the Plan in its entirety at any time. Each
Participating Employer expects to continue its participation in
the Plan indefinitely but reserves the right to cease its
participation in the Plan at any time. The Plan will terminate
in its entirety or with respect to a particular Participating
Employer as of the date specified by the Company or such
Participating Employer, as the case may be, to the Trustee in a
written instrument adopted and executed in the manner of an
amendment.
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<PAGE>
4 Vesting Upon Termination, Partial Termination or
Discontinuance of Contributions. Upon termination of the Plan or
upon the complete discontinuance of contributions by all
Participating Employers, to the extent required by Code section
411(d)(3) and Treasury Regulations thereunder, the Accounts of
each affected Participant will, to the extent funded, vest in
full. Upon a partial termination of the Plan, the Accounts of
each Participant as to whom the Plan has been partially
terminated will, to the extent funded, vest in full.
5 Distribution Following Termination, Partial Termination or
Discontinuance of Contributions. After termination or partial
termination of the Plan or the complete discontinuance of
contributions under the Plan, the Trustee will continue to hold
and distribute the Fund at the times and in the manner provided
by Section 8.1 as if such event had not occurred or, if the
Administrator so directs in accordance with Treasury Regulations,
will distribute to each Participant or Beneficiary of any
deceased Participant the entire balance of his or her Accounts.
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<PAGE>
XI
Definitions, Construction and Interpretations
The definitions and the rules of construction and interpretations
set forth in this article will be applied in construing this
instrument unless the context otherwise indicates.
1 Account. An "Account" with respect to a Participant is any
or all of the accounts maintained on his or her behalf pursuant
to Section 4.1, as the context requires.
2 Active Participant. An "Active Participant" is a
Participant who is a Qualified Employee.
3 Administrator. The "Administrator" of the Plan is the
Company's Vice President Human Resource Services, or in the event
such position is substantially changed or eliminated, the
Employee performing the duties of such position.
4 Affiliated Organization. An "Affiliated Organization" is -
(a) for purposes of applying the limitations set forth at
Sections 9.6 and 9.7 of the Plan, any member of a controlled
group of corporations (within the meaning of Code section
1563(a) without regard to Code sections 1563(a)(4) and
1563(e)(C)) that includes the Company or any trade or
business (whether or not incorporated) that, together with
the Company, is under common control (within the meaning of
Code section 414(c)), the determination of any such
corporation or trade or business being made under Code
section 1563(a) by substituting the phrase "more than 50
percent" for the phrase "at least 80 percent" wherever it
appears in such Code section, and
(b) for all other purposes, any corporation that is a
member of a controlled group of corporations (within the
meaning of Code section 1563(a) without regard to Code
sections 1563(a)(4) and 1563(e)(3)(C)) that includes the
Company, any trade or business (whether or not incorporated)
that, together with the Company, is under common control
(within the meaning of Code section 414(c)), any member of
an "affiliated service group" (within the meaning of Code
section 414(m)) of which the Company is a member or any
other organization that, together with the Company, is
treated as a single employer pursuant to Code section 414(o)
and Treasury Regulations thereunder.
5 Basic Matching Account. The "Basic Matching Account" is the
account established pursuant to clause (b) of Section 4.1 to
evidence Basic Matching Contributions made on behalf of a
Participant.
6 Basic Matching Contributions. "Basic Matching
Contributions" means contributions made by a Participating
Employer on behalf of Active Participants pursuant to Section
3.2(A)(1) or 3.4.
7 Beneficiary. A "Beneficiary" is a person designated or
otherwise determined under the provisions of Section 8.3 as the
distributee of benefits payable after the death of a Participant.
A person designated or otherwise determined to be a Beneficiary
under the terms of the Plan has no interest in or rights under
the Plan until the Participant in question has died. A
Beneficiary will cease to be such on the day on which all
benefits to which he, she or it is entitled under the Plan have
been distributed.
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<PAGE>
8 Board. The "Board" is the board of directors or equivalent
governing body of the Affiliated Organization in question. When
the Plan provides for an action to be taken by the Board, the
action may be taken by any committee or individual authorized to
take such action pursuant to a proper delegation by the board of
directors or equivalent governing body of the Affiliated
Organization in question.
9 Break in Service. A "Break in Service" with respect to an
Employee is the period commencing on the Employee's "employment
severance date," as defined at Section 11.45(A)(2), and ending on
the Employee's "reemployment commencement date," as defined at
Section 11.45(A)(3); provided, that if an Employee becomes absent
on account of (a) the Employee's pregnancy, (b) the birth of the
Employee's child, (c) the placement of a child with the Employee
on account of the Employee's adoption of the child or (d) the
Employee's caring for a child immediately following the child's
birth or placement with the Employee, and the Employee furnishes
to the Administrator, upon request, such information as the
Administrator requires to determine the reasons for the
Employee's absence or continued absence, then solely for the
purpose of determining whether the Employee has incurred a Break
in Service pursuant to this section, the Employee's employment
severance date will be the first anniversary of the date on which
the employment severance date would otherwise occur for the
purpose of determining the Employee's Vesting Service pursuant to
Section 11.45(A)(2).
10 Code. The "Code" is the Internal Revenue Code of 1986, as
amended. Any reference to a specific provision of the Code
includes a reference to such provision as it may be amended from
time to time and to any successor provision.
11 Committee. The "Committee" is the Retirement Committee
constituted under Article XII.
12 Company. The "Company" is Ceridian Corporation or any
successor thereto.
13 Company Stock. "Company Stock" means common stock issued by
the Company.
14 Consent of Spouse. Whenever the consent of a Participant's
spouse is required with respect to any act of the Participant,
such consent will be deemed to have been obtained only if:
(a) the Participant's spouse executes a written consent to
such act, which consent acknowledges the effect of such act
and is witnessed by a notary public; or
(b) the Administrator determines that no such consent can
be obtained because the Participant has no spouse, because
the Participant's spouse cannot be located, or because of
such other circumstances as may, under Treasury Regulations,
justify the lack of such consent.
Any such consent by the Participant's spouse or such
determination by the Administrator that such spouse's consent is
not required is effective only with respect to the particular
spouse of the Participant who so consented or with respect to
whom such determination was made. Any such consent by the
Participant's spouse to an act of the Participant under the Plan
is irrevocable with respect to that act.
15 Disabled. A Participant will be considered to be "Disabled"
only if
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(a) in the case of a Participant who is participating in
the Company's long-term disability plan, he or she is
receiving disability benefits under such plan, or
(b) in the case of any other Participant, he or she is
certified as being disabled by the Social Security
Administration and is receiving disability benefits under
the disability provisions of the Social Security Act.
16 Effective Date. The "Effective Date" of the Plan is
January 1, 1995.
17 Eligible Earnings. (A) The "Eligible Earnings" of a
Participant from his or her Participating Employer for any period
is the amount reportable by the Participating Employer for
federal income tax purposes as wages paid to the Participant for
such period, increased by the amount of Eligible Earnings
reductions experienced by the Participant pursuant to the Plan
and any cafeteria plan maintained by the Participating Employer
pursuant to Code section 125 for that period, to the extent such
reductions are not otherwise included for that period, and
decreased by any amount received by the Participant during the
period as deferred income from a previous period, expatriation
premium, tuition aid reimbursement, relocation allowance,
restricted stock plan awards, any such amount attributable to the
exercise of an option under a stock option plan maintained by a
Participating Employer, any amounts representing imputed income
on account of benefits pursuant to the Code, any amounts
representing severance payments under the Participating
Employer's severance policy and any other amounts of an unusual
or nonrecurring nature, as specified in Plan Rules.
(A) Notwithstanding Subsection (A), in no event will a
Participant's Eligible Earnings be taken into account to the
extent it exceeds $150,000 (or such dollar amount, adjusted to
reflect increases in the cost of living, as in effect under Code
section 401(a)(17) for the calendar year during which the Plan
Year in question begins).
(B) In the case of a Participant who is a Highly
Compensated Employee described in clause (1) of Section 11.22(A),
or of a Highly Compensated Employee described in clause (2) or
(3) of Section 11.22(A) whose "compensation" (as defined in
Section 11.22(B)(2)) for a Plan Year is not less than the
compensation of at least ten other Highly Compensated Employees,
the limitation set forth in Subsection (B) will be applied to the
Participant, the Participant's spouse and the Participant's
lineal descendants who have not attained age 19 prior to the end
of the Plan Year as if they were a single Participant.
18 Employee. An "Employee" is any individual who performs
services for an Affiliated Organization as a common-law employee
of the Affiliated Organization.
19 Fund. The "Fund" is the total of all of the assets of every
kind and nature, both principal and income, held in the Trust at
any particular time or, if the context so requires, one or more
of the investment funds described in Section 5.1.
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20 Governing Law. To the extent that state law is not
preempted by provisions of the Employee Retirement Income
Security Act of 1974, as amended, or any other laws of the United
States, the Plan will be administered, construed, and enforced
according to the internal, substantive laws of the State of
Minnesota, without regard to its conflict of law rules of the
State of Minnesota or any other jurisdiction.
21 Headings. The headings of articles and sections are
included solely for convenience. In the event of a conflict
between the headings and the text of the Plan, the text controls.
22 Highly Compensated Employee. (A) A "Highly Compensated
Employee" for any Plan Year is any employee who -
(1) at any time during such Plan Year or the preceding Plan
Year, owns or owned (or is considered as owning or having
owned within the meaning of Code section 318) more than five
percent of the outstanding stock of an Affiliated
Organization or stock possessing more than five percent of
the total combined voting power of all outstanding stock of
an Affiliated Organization, or
(2) during the Plan Year preceding such Plan Year -
(a) received compensation in excess of $75,000 (or
such dollar amount, adjusted to reflect increases in
the cost of living, as in effect under Code section
414(q)(1)(B) for the calendar year during which the
Plan Year in question begins), or
(b) received compensation in excess of $50,000 (or
such dollar amount, adjusted to reflect increases in
the cost of living, as in effect under Code section
414(q)(1)(C) for the calendar year during which the
Plan Year in question begins) and whose compensation
exceeded the compensation of at least 80 percent of all
employees, excluding, for purposes of determining the
number of employees in such group but not for purposes
of determining the specific employees comprising the
group, all employees who (i) have completed less than
six months of service with the Affiliated
Organizations, (ii) normally work fewer than 17-1/2
hours per week for the Affiliated Organizations, (iii)
normally work for the Affiliated Organizations during
not more than six months during any calendar year or
(iv) have not attained age 21, or
(c) was at any time an officer of an Affiliated
Organization (an administrative executive in regular
and continued service with the Affiliated Organization)
and received compensation in excess of 50 percent of
the amount in effect under Code section 415(b)(1)(A)
for the calendar year during which the Plan Year in
question begins, but in no case will there be taken
into account more than the lesser of (i) 50 employees
or (ii) the greater of three employees or ten percent
of the aggregate number of employees, excluding, for
purposes of determining the number of such officers,
any employees that are excluded pursuant to clause (b);
or, if no officer received compensation in excess of
such amount, the officer with the highest compensation
for the Plan Year, or
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<PAGE>
(3) during such Plan Year, is described in items (a), (b)
or (c) of clause (2) and received compensation in an amount
that is not less than the amount of compensation received by
at least 100 other employees.
(B) For purposes of this section,
(1) an "employee" is any individual who is not described in
Section 11.36(B)(2) and who, during the Plan Year for which
the determination is being made, performs services for an
Affiliated Organization as -
(a) a common law employee,
(b) an employee pursuant to Code section 401(c)(1), or
(c) a leased employee who is treated as an employee of
an Affiliated Organization pursuant to Code section
414(n)(2) or 414(o)(2), and
(2) "compensation" for any period means an employee's
Section 415 Wages for the period increased by the amount of
any reductions to the employee's compensation for the period
in connection with an election by the employee made pursuant
to a Plan maintained under Code section 125 or 401(k).
(C) For purposes of applying Sections 9.2, 9.3 and 9.4, any
employee who is the spouse, a lineal ascendant or descendant or
the spouse of a lineal ascendant or descendant of a Highly
Compensated Employee described in clause (1) of Subsection (A),
or of a Highly Compensated Employee described in clause (2) or
(3) of Subsection (A) whose compensation for the Plan Year is not
less than the compensation of at least ten other Highly
Compensated Employees, will not be considered a separate employee
and any Eligible Earnings with respect to such employee, and any
contributions allocated to the employee's Accounts under this
Plan if the employee is a Participant, will be deemed to have
been paid to, or allocated to the Accounts of, such Highly
Compensated Employee.
23 Hour of Service. The term "Hour of Service" with respect to
an Employee is each hour for which the Employee is paid, or
entitled to payment, for the performance of duties for an
Affiliated Organization.
24 Matching Contributions "Matching Contributions" means
contributions made by a Participating Employer on behalf of
Active Participants pursuant to Section 3.2 or 3.4.
25 Normal Retirement Date. The "Normal Retirement Date" of a
Participant is the date on which he or she attains age 65.
26 Number and Gender. Wherever appropriate, the singular
number may be read as the plural, the plural may be read as the
singular, and the masculine gender may be read as the feminine
gender.
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27 Participant. A "Participant" is a current or former
Qualified Employee who has satisfied the eligibility requirements
of Article II, following his or her initial hire or rehire, as
the case may be, and who has not ceased to be a Participant
pursuant to Section 2.6.
28 Participating Employer. A "Participating Employer" is the
Company and any other Affiliated Organization that has adopted
the Plan, or all of them collectively, as the context requires,
and their respective successors. An Affiliated Organization will
cease to be a Participating Employer upon a termination of the
Plan as to its Employees or upon its ceasing to be an Affiliated
Organization.
29 Performance-Based Matching Account. The "Performance-Based
Matching Account" is the account established pursuant to clause
(c) of Section 4.1 to evidence Performance-Based Matching
Contributions made on behalf of a Participant.
30 Performance-Based Matching Contributions. "Performance-
Based Matching Contributions" means contributions made by a
Participating Employer on behalf of Active Participants pursuant
to Section 3.2(A)(2).
31 Plan. The "Plan" is that set forth in this instrument as it
may be amended from time to time.
32 Plan Rule. A "Plan Rule" is a rule, policy, practice or
procedure adopted by the Administrator or the Committee. Each
Plan Rule will be uniform and nondiscriminatory with respect to
similarly situated persons.
33 Plan Year. A "Plan Year" is a calendar year.
34 Pre-Tax Account. The "Pre-Tax Account" is the account
established pursuant to clause (a) of Section 4.1 to evidence
Pre-Tax Contributions made on behalf of a Participant.
35 Pre-Tax Contributions. "Pre-Tax Contributions" mean
contributions made by a Participating Employer on behalf of
Active Participants pursuant to Section 3.1.
36 Qualified Employee. (A) Except as provided in Subsection
(B), a "Qualified Employee" is an Employee who -
(1) is classified by a Participating Employer as a common-
law employee of the Participating Employer,
(2) is paid under a domestic payroll,
(3) performs services for the Participating Employer
primarily within the United States or on a temporary foreign
assignment, and
(4) is not a participant in any qualified defined benefit
pension plan maintained by an Affiliated Organization.
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(B) An Employee who would otherwise be a Qualified Employee
is not a Qualified Employee if he or she -
(1) resides in the United States but is not a United States
citizen, unless he or she is classified as an immigrant
alien;
(2) is a nonresident alien who receives no earned income
(within the meaning of Code section 911(d)(2)) from a
Participating Employer that constitutes income from sources
within the United States (within the meaning of Code section
861(a)(3));
(3) is covered by a collective bargaining agreement, for
whom retirement benefits were the subject of good faith
bargaining between such person's representative and a
Participating Employer, and is not, as a result of such
bargaining, specifically covered by this Plan; or
(4) is eligible, or would be eligible but for his or her
failure to satisfy any applicable minimum age, minimum
service or similar requirement, to participate in any other
qualified defined contribution plan maintained by an
Affiliated Organization."
Reporting Person. A "Reporting Person" is any Participant
or Beneficiary who is subject to the reporting requirements of
section 16 of the Securities Exchange Act of 1934 with respect to
the securities of the Company or its affiliates.
38 Rollover Account. The "Rollover Account" is the account
established pursuant to clause (d) of Section 4.1 to evidence the
amounts, if any, rolled over from an individual retirement
arrangement or another qualified plan, or transferred directly
from another qualified plan with respect to an Active Participant
pursuant to Section 3.3.
39 Section 415 Wages. (A) An individual's "Section 415 Wages"
for any period is the sum of all remuneration received by the
individual during such period from all Affiliated Organizations
that constitutes "compensation" within the meaning of Code
section 415(c)(3) and Treasury Regulations thereunder.
(A) The Administrator may, for any Plan Year, determine the
items of remuneration that, in accordance with Treasury
Regulations, will be included in Section 415 Wages for the Plan
Year; provided that for each purpose under this Plan, the
Administrator's determination will be uniform throughout any Plan
Year.
(B) Section 415 Wages will not include the amount by which
an individual's remuneration is reduced in connection with an
election by the individual made pursuant to a plan maintained by
an Affiliated Organization under Code section 125 or 401(k).
40 Termination of Employment. (A) For purposes of determining
entitlement to a distribution under this Plan, a Participant will
be deemed to have terminated employment only if he or she has
completely severed his or her employment relationship with all
Affiliated Organizations or become Disabled. Neither transfer of
employment among Affiliated Organizations nor absence from active
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service by reason of disability leave, other than in connection
with his or her becoming Disabled, or any other leave of absence
will constitute a termination of employment.
(A) A Participant will be deemed to have terminated
employment in conjunction with the disposition of all or any
portion of the business operation of an Affiliated Organization
which is a disposition of a subsidiary or of substantially all of
the assets used in a trade or business of an Affiliated
Organization within the meaning of Code section 401(k)(10)(A)
with respect to which the requirements of Code section
401(k)(10)(B) and (C) and Treasury Regulations thereunder are
satisfied.
(B) A Participant who, in conjunction with the disposition
of all or any portion of a business operation of an Affiliated
Organization which is not described in Subsection (B), transfers
employment to the acquiror of such business operation or to any
affiliate of such acquiror will not be considered to have
terminated employment. If a Participant is deemed to have
continued employment by reason of the preceding sentence, such
sentence will continue to apply to such Participant in the event
of any subsequent transfer of employment in conjunction with the
disposition of all or any portion of a business operation of the
initial acquiror or any subsequent acquirors which is not a
disposition of a subsidiary of such acquiror or of substantially
all of the assets used in a trade or business of such acquiror
within the meaning of Code section 401(k)(10)(A) with respect to
which the requirements of Code section 401(k)(10)(B) and (C) and
Treasury Regulations thereunder are satisfied. Except in
conjunction with such a disposition of a subsidiary or
substantially all of the assets used in a trade or business of
the seller, such a Participant will be considered to have
terminated employment only when he or she has severed the
employment relationship with all such acquirors and their
affiliates.
41 Testing Wages. (A) An individual's "Testing Wages" for any
period is his or her Section 415 Wages for such period increased
by compensation reductions for such period in connection with an
election by the individual made pursuant to a plan maintained by
an Affiliated Organization under Code section 125 or 401(k).
(A) Notwithstanding Subsection (A), in no event will a
Participant's Testing Wages for any Plan Year be taken into
account to the extent it exceeds $150,000 (or such dollar amount,
adjusted to reflect increases in the cost of living, as in effect
under Code section 401(a)(17) for the calendar year during which
the Plan Year in question begins).
(B) In the case of a Participant who is a Highly
Compensated Employee described in clause (1) of Section 11.22(A),
or of a Highly Compensated Employee described in clause (2) or
(3) of Section 11.22(A) whose "compensation" (as defined in
Section 11.22(B)(2)) for a Plan Year is not less than the
compensation of at least ten other Highly Compensated Employees,
the limitation set forth in Subsection (B) will be applied to the
Participant, the Participant's spouse and the Participant's
lineal descendants who have not attained age 19 prior to the end
of the Plan Year in question as if they were a single
Participant.
(C) The Administrator may, in his or her discretion, for
any Plan Year, adopt any alternative definition of Testing Wages
that complies with Code section 414(s) and Treasury Regulations
thereunder; provided, that for each purpose under this Plan, the
definition so adopted will be uniform throughout any Plan Year.
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42 Treasury Regulations "Treasury Regulations" mean
regulations, rulings, notices and other promulgations issued
under the authority of the Secretary of the Treasury that apply
to, or may be relied upon in the administration of, this Plan.
43 Trust. The "Trust" is the trust or trusts created by the
Company to implement benefits under the Plan.
44 Trustee. The "Trustee" is the corporation and/or individual
or individuals who from time to time is or are the duly appointed
and acting trustee or trustees of the Trust.
45 Vesting Service. (A) An Employee's "Vesting Service" means
the sum of the lengths of the periods of the Employee's service
with a Participating Employer or with an Affiliated Organization
from and after the date on which it became an Affiliated
Organization, commencing as of the Employee's employment
commencement date or reemployment commencement date, as the case
may be, and ending with the Employee's next employment severance
date, as determined in accordance with the following rules:
(1) an Employee's "employment commencement date" is the
date on which he or she first performs an Hour of Service;
(2) for purposes of this section only, an Employee's
"employment severance date" is the earlier to occur of:
(a) the date on which the Employee terminates
employment with all Affiliated Organizations because he
or she quits, retires, is discharged or dies; or
(b) the first anniversary of the first date of a
period during which the Employee remains absent from
service (with or without pay) with all Affiliated
Organizations for any reason other than a quit,
retirement, discharge or death following the employment
commencement date or reemployment commencement date, as
the case may be;
(3) an Employee's "reemployment commencement date" is the
first date, following a period of severance from employment
which is not required to be taken into account under either
item (4) or (5), on which the Employee performs an Hour of
Service;
(4) if the Employee's employment is severed by reason of a
quit, discharge or retirement and he or she subsequently
performs an Hour of Service within 12 months following the
employment severance date, the period of such severance will
be taken into account;
(5) if the Employee quits, is discharged or retires during
an absence from service of 12 months or less for any reason
other than a quit, discharge, retirement or death and the
Employee subsequently performs an Hour of Service within 12
months following the date on which such absence commenced,
the period of such severance will be taken into account.
(B) To the extent provided in Subsection (A), service by a
person who is a "leased employee" of an Affiliated Organization
or of a "related person" (within the meaning of Code sections
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414(n)(2) and 144(a)(3), respectively) or service by a person
with any other organization that is required to be taken into
account pursuant to Code section 414(o) and Treasury Regulations
thereunder will be deemed to be Vesting Service for purposes of
the Plan if such person becomes a Participant.
(C) Notwithstanding the foregoing provisions of this
section, service completed by an Employee with an Affiliated
Organization prior to the date on which it became an Affiliated
Organization (or with another entity prior to the acquisition of
such entity's business or assets by an Affiliated Organization)
will be taken into account for purposes of this section only if
and to the extent provided in any agreement pursuant to which it
became an Affiliated Organization (or such other business or
assets were acquired) or as provided by resolution of the
Company's Board.
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XII
Administration of Plan
1 Named Fiduciary. The Company is the "named fiduciary" of
the Plan for purposes of the Employee Retirement Income Security
Act of 1974, as amended.
2 Retirement Committee. The Chief Executive Officer of the
Company will appoint a Retirement Committee composed of not fewer
than three members who will serve at the pleasure of the Chief
Executive Officer. The Chief Executive Officer will provide to
each member of the Retirement Committee a copy of a written
charter outlining the responsibilities of the Committee. Each
member will file his or her written acceptance of appointment
with the Chief Executive Officer. A Retirement Committee member
may resign by delivering his or her written resignation to the
Chief Executive Officer, and any Retirement Committee member may
be removed, with or without cause, by the Chief Executive Officer
upon delivery of written notice of such removal to the removed
member. Any such resignation or removal will be effective upon
delivery of the written resignation or notice of removal, as the
case may be, or upon any later date specified therein. Vacancies
created by any such resignation or removal will be filled by
appointment by the Chief Executive Officer; provided, that,
subject to there being at least three persons serving as
Retirement Committee members at all times, the Chief Executive
Officer need not fill any vacancy so created.
3 Operation of Committee. The Committee will perform its
duties hereunder in accordance with the following procedures -
(a) The Chief Executive Officer of the Company will
designate one member of the Committee to act as its chair,
and the member so designated will preside over the
Committee's meetings.
(b) The Committee will elect a secretary who may, but need
not, be a member of the Committee. The secretary will keep
minutes of the Committee's meetings and perform such other
duties as may be specified from time to time by the
Committee.
(c) The Committee may appoint such subcommittees with such
duties and powers as it may specify, and it may delegate
administrative powers to one or more of its members or to
such other person or entity as it may designate.
(d) The Committee will meet at such times and places and
upon such notice as its members may determine from time to
time. A majority of the current membership of the Committee
will constitute a quorum for the transaction of business,
and all acts of the Committee at any meeting will require,
for their validity, the affirmative vote of a majority of
the current membership of the Committee.
(e) The Committee may adopt bylaws for the conduct of its
business, provided such bylaws are not inconsistent with the
provisions of this article.
(f) No member of the Committee may vote with respect to a
decision of the Committee relating solely to his or her own
participation or benefit under the Plan.
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4 Duties of Administrator. The following administrative
duties will be performed by the Administrator or his or her
designate on behalf of the Company:
(a) The determination of initial and continuing eligibility
of Employees to participate in the Plan and enrollment of
Participants in the Plan;
(b) The determination of Participants' entitlement to, and
the amount of, their individual allocable share of
Participating Employer contributions under the Plan;
(c) The processing of Participant's Eligible Earnings
reductions and investment direction elections;
(d) The processing of Participants' Beneficiary
designations;
(e) The processing of Participants' withdrawal applications
and, where required, the determination of the existence and
extent of a financial hardship on which a Participant's
withdrawal application is based;
(f) The review of claims made pursuant to the Plan's
benefit claim procedure;
(g) The computation of the amount of each Participant's
Account balances and the vested portion of such balances;
(h) The authorization of disbursements from the Fund in the
form of withdrawals and distributions;
(i) The administration of loans made pursuant to the loan
provisions of the Plan;
(j) The duties expressly assigned to the Administrator
pursuant to the Plan; and
(k) Such other duties as the Committee may delegate to the
Administrator from time to time.
The Administrator is authorized to delegate such of his or her
duties as the Administrator may specify in writing to such other
person or entity as the Administrator may designate, including a
committee established for the specific purpose of performing such
a delegated duty.
5 Adoption of Rules. The Committee and the Administrator have
the discretionary power and authority to make such Plan Rules as
the Committee or Administrator deem necessary or appropriate to
perform their respective duties in connection with the
administration of the Plan and to modify or rescind any such Plan
Rules. Plan Rules will be uniform and nondiscriminatory with
respect to similarly situated persons.
6 Discretionary Actions. To the extent applicable to their
respective administrative duties, the Committee and the
Administrator have discretionary power and authority to make all
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determinations necessary or appropriate for the administration of
the Plan and to construe, interpret, apply and enforce the Plan
and Plan Rules and decide any and all matters arising thereunder,
including the discretionary power and authority to remedy
possible ambiguities, inconsistencies, omissions or erroneous
Account balances. In the exercise of their discretionary powers,
the Committee and Administrator will treat all persons similarly
situated in a uniform matter.
7 Compensation. Neither Committee members nor the
Administrator will receive compensation from the Plan or Trust
for their services as such, but they are entitled to
reimbursement for all sums reasonably and necessarily expended by
them in the performance of their duties.
8 Professional Assistance. The Committee and the
Administrator may retain such accounting, record keeping, legal
and clerical services as they reasonably deem to be required in
the administration of the Plan, and may pay reasonable
compensation for such services. The Committee and Administrator
are entitled to rely conclusively on all tables, valuations,
certificates, opinions and reports furnished to them by such
persons and on all information, elections and designations
furnished to them by Participants and Participating Employers.
9 Payment of Administrative Costs. Reimbursements under
Section 12.7, compensation under Section 12.8 and all other costs
of establishing and administering the Plan may be paid by the
Trustee from the Fund, upon statements issued by the Committee or
Administrator, but to the extent not so paid, will be paid by the
Participating Employers.
10 Indemnification. The Participating Employers jointly and
severally agree to indemnify the Committee members, the
Administrator and each director, officer and Employee against any
and all liabilities, losses, costs and reasonable expenses
(including legal fees) of every kind and nature that may be
imposed on, incurred by or asserted against such person at any
time by reason of such person's services in connection with the
Plan, but only if such person did not act dishonestly or in bad
faith or in willful violation of the law or regulations under
which such liability, loss, cost or expense arises. The
Participating Employers have the right, but not the obligation,
to select counsel and control the defense and settlement of any
action for which a person may be entitled to indemnification
under this section, unless they are determined to be due to gross
negligence or intentional misconduct.
11 Benefit Claim Procedure. If a request for a benefit by a
Participant or Beneficiary of a deceased Participant is denied in
whole or in part, not later than 30 days after receipt of notice
of the denial, the Participant or Beneficiary, as the case may
be, may file with the Administrator a written claim objecting to
the denial. Not later than 90 days after receipt of such claim,
the Administrator will render a written decision on the claim to
the claimant. If the claim is denied in whole or in part, such
decision will include: the reasons for the denial; a reference
to the Plan provision that is the basis for the denial; a
description of any additional material or information necessary
for the claimant to perfect the claim; an explanation as to why
such information or material is necessary; and an explanation of
the Plan's claim procedure. Not later than 60 days after
receiving the Administrator's written decision, the claimant may
file with the Administrator a written request for review of the
Administrator's decision, and the claimant or the representative
may thereafter review Plan documents that relate to the claim and
submit written comments to the Administrator. Not later than 60
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days after receiving such request, the Administrator will afford
the claimant or the representative an opportunity to present the
claim in person to the Administrator. Not later than 60 days
after such presentation or, if there is no such presentation, not
later than 60 days after the Administrator's receipt of the
request for review, the Administrator will render a written
decision on the claim, which decision will include the specific
reasons for the decision, including references to specific Plan
provisions where appropriate. The 90- and 60-day periods during
which the Administrator must respond to the claimant may be
extended by up to an additional 90 or 60 days, respectively, if
special circumstances beyond the Administrator's control so
require and if notice of such extension is given to the claimant.
12 Correction of Errors. If the Committee determines that, by
reason of administrative error or other cause attributable to a
Participating Employer, the Account of any Participant has
incurred a loss, the Committee may enter into an agreement with
such Participating Employer under which the Account is fully
restored and may, upon such restoration, release the
Participating Employer from further responsibility.
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XIII
Miscellaneous
1 Merger, Consolidation, Transfer of Assets. If this Plan is
merged or consolidated with, or its assets or liabilities are
transferred to, any other plan, each Participant will be entitled
to receive a benefit immediately after such merger, consolidation
or transfer (if such other plan were then terminated) that is
equal to or greater than the benefit he or she would have been
entitled to receive immediately before such merger, consolidation
or transfer (if this Plan had then terminated).
2 Limited Reversion of Fund. (A) Except as provided in
Subsection (B), no corpus or income of the Trust will at any time
revert to a Participating Employer or be used other than for the
exclusive benefit of eligible Employees and their Beneficiaries
by paying benefits and, if applicable, administrative expenses of
the Plan.
(A) Notwithstanding any contrary provision in the Plan,
(1) All contributions made by a Participating Employer to
the Trustee prior to the initial determination of the
Internal Revenue Service as to qualification of the Plan
under Code section 401(a) and the tax exempt status of the
Trust under Code section 501(a) will be repaid by the
Trustee to such Participating Employer, upon the
Participating Employer's written request, if the Internal
Revenue Service rules that the Plan, as adopted by that
Participating Employer, is not qualified or the Trust is not
tax exempt; provided, that the Participating Employer
requests such determination within a reasonable time after
adoption of the Plan and the repayment by the Trustee to
such Participating Employer is made within one year after
the date of denial of qualification of the Plan; and
(2) To the extent a contribution is made by a Participating
Employer by a mistake of fact or a deduction is disallowed a
Participating Employer under Code section 404, the Trustee
will repay the contribution to such Participating Employer
upon the Participating Employer's written request; provided,
that such repayment is made within one year after the
mistaken payment is made or the deduction is disallowed, as
the case may be. Each contribution to the Plan by a
Participating Employer is expressly conditioned on such
contribution being fully deductible by the Participating
Employer under Code section 404.
3 Top-Heavy Provisions. (A)(1) Notwithstanding the provisions
of Sections 3.1 and 3.2, no contributions will be made and
allocated on behalf of any "key employee" for any Plan Year
during which the Plan is a top-heavy plan, unless the amount
of contributions (excluding Pre-Tax Contributions) made and
allocated for such Plan Year on behalf of each Participant
who is not a key employee and who is employed with an
Affiliated Organization on the last day of the Plan Year,
expressed as a percentage of the Participant's Testing Wages
for the Plan Year, is at least equal to the lesser of
(a) three percent, or
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(b) the largest percentage of such Testing Wages at
which contributions (including Pre-Tax Contributions)
are made and allocated on behalf of any key employee
for such Plan Year.
(2)If, in addition to this Plan, an Affiliated Organization
maintains another qualified defined contribution plan or
qualified defined benefit pension plan during a Plan Year,
the provisions of clause (1) will be applied for such Plan
Year -
(a) by taking into account the employer contributions
(other than elective deferrals for a non-key employee)
on behalf of the Participant under all such defined
contribution plans;
(b) without regard to any Participant who is not a key
employee and whose accrued benefit, expressed as a
single life annuity, under such defined benefit pension
plan for such Plan Year is not less than the product of
-
(i) the Participant's average Testing Wages for
the period of consecutive years (not exceeding
five) when the Participant had the highest
aggregate Testing Wages, disregarding years in
which the Participant fails to complete a minimum
period of service as specified in Treasury
Regulations, multiplied by
(ii) the lesser of (A) two percent per year of
service, disregarding years of service beginning
after the close of the last Plan Year in which
such defined benefit plan was a top heavy plan, or
(B) 20 percent.
(B) For purposes of Subsection (A),
(1) (a) The Plan will be a "top-heavy plan" for a
particular Plan Year if, as of the last day of the
initial Plan Year or, with respect to any other Plan
Year, as of the last day of the preceding Plan Year,
the aggregate of the Account balances of key employees
is greater than 60 percent of the aggregate of the
Account balances of all Participants.
(a) For purposes of calculating the aggregate Account
balances for both key employees and employees who are
not key employees:
(i) Any distributions made within the five-
year period preceding the Plan Year for which the
determination is being made, other than a
distribution transferred or rolled over to a plan
maintained by an Affiliated Organization, will be
included;
(ii) Amounts transferred or rolled over from
a plan not maintained by an Affiliated
Organization at the initiation of the Participant
will not be included;
(iii) The Account balances of any key employee
and any employee who is not a key employee who has
not performed an Hour of Service at any time
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during the five-year period ending on the date as
of which the determination is being made will not
be included; and
(iv) The terms "key employee" and "employee"
include the Beneficiaries of such persons who have
died.
(2) (a) Notwithstanding the provisions of clause (1), this
Plan will not be a top-heavy plan if it is part of
either a "required aggregation group" or a "permissive
aggregation group" and such aggregation group is not
top-heavy. An aggregation group will be top-heavy if
the sum of the present value of accrued benefits and
account balances of key employees is more than 60
percent of the sum of the present value of accrued
benefits and account balances for all Participants,
such accrued benefits and account balances being
calculated in each case in the same manner as set forth
in clause (1).
(a) Each plan in a required aggregation group will be
top-heavy if the group is top-heavy. No plan in a
required aggregation group will be top-heavy if the
group is not top-heavy.
(b) If a permissive aggregation group is top-heavy,
only those plans that are part of an underlying top-
heavy, required aggregation group will be top-heavy. No
plan in a permissive aggregation group will be top-
heavy if the group is not top-heavy.
(3) The "required aggregation group" of consists of (i)
each plan of an Affiliated Organization in which a key
employee participates, and (ii) each other plan of an
Affiliated Organization that enables a plan in which a key
employee participates to meet the nondiscrimination
requirements of Code sections 401(a)(4) and 410.
(4) A "permissive aggregation group" consists of those
plans that are required to be aggregated and one or more
plans (providing comparable benefits or contributions) that
are not required to be aggregated, which, when taken
together, satisfy the requirements of Code sections
401(a)(4) and 410.
(5) For purposes of applying clauses (2), (3) and (4) of
this Subsection (B), any qualified defined contribution plan
maintained by an Affiliated Organization at any time within
the five-year period preceding the Plan Year for which the
determination being made which, as of the date of such
determination, has been formally terminated, has ceased
crediting service for benefit accruals and vesting and has
been or is distributing all plan assets to participants or
their beneficiaries, will be taken into account to the
extent required or permitted under such clauses and under
Code section 416.
(C) A "key employee" is any person who is or was employed
with an Affiliated Organization and who, at any time during the
Plan Year in question or any of the preceding four Plan Years is
or was:
(1) An officer of the Affiliated Organization (an
administrative executive in regular and continued service
with the Affiliated Organization) whose compensation for
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such Plan Year exceeds 50 percent of the amount in effect
under Code section 415(b)(1)(A) for such Plan Year, but in
no case will there be taken into account more than the
lesser of (a) 50 persons, or (b) the greater of (i) three
persons or (ii) ten percent of the number of the Affiliated
Organization's employees, excluding for purposes of
determining the number of such officers, any employees that
are excluded pursuant to Section 11.22(A)(2)(b);
(2) The owner of an interest in the Affiliated
Organization, including business entities that are required
to be aggregated under Code section 414(b), (c) or (m), that
is not less than the interest owned by at least 10 other
persons employed with the Affiliated Organization; provided,
that, such owner will not be a key employee solely by reason
of such ownership for a Plan Year if he or she does not own
more than one-half of one percent of the value of the
outstanding interests of the Affiliated Organization or if
the amount of his or her compensation for such Plan Year is
less than the amount in effect under Code section
415(c)(1)(A) for such Plan Year;
(3) The owner of more than five percent of the Affiliated
Organization's outstanding stock or more than five percent
of the total combined voting power of the Affiliated
Organization's stock; or
(4) The owner of more than one percent of the Affiliated
Organization's outstanding stock or more than one percent of
the total combined voting power of the Affiliated
Organization's stock, whose compensation for such Plan Year
exceeds $150,000.
For purposes of this Subsection (C), the term "compensation" has
the same meaning as in Section 11.22(B)(2) and ownership of an
Affiliated Organization's stock will be determined in accordance
with Code section 318; provided, that subparagraph 318(a)(2)(C)
will be applied by substituting the phrase "5 percent" for the
phrase "50 percent" wherever it appears in such Code section.
(D) If an Affiliated Organization maintains a qualified
defined contribution plan and a qualified defined benefit pension
plan, the limitation on combined contributions and accrued
benefits will be adjusted by substituting "100 percent" for "125
percent" in the definitions of the defined benefit fraction and
the defined contribution fraction in Section 9.7; provided,
first, that this Subsection (D) will be applied prospectively
only to prohibit additional contributions allocated, and
forfeitures reallocated, to and defined benefit accruals for, a
Participant and will not reduce any allocations or reallocations
made to, or benefits accrued for, such Participant prior to the
Plan Year for which it first becomes effective; and, second, that
if the Plan would not be a top heavy plan if "90 percent" were
substituted for "60 percent" in Subsection (B)(1)(a), this
Subsection (D) will not apply if -
(1) the aggregate employer contribution (other than
elective deferrals for a non-key employee) under all such
qualified defined contribution plans on behalf of each
Participant who is not a key employee and who is employed
with an Affiliated Organization on the last day of the Plan
Year is not less than seven and one-half percent of his or
her Testing Wages for the Plan Year, or
(2) the accrued benefit for each Participant under the
qualified defined benefit pension plan is not less than the
benefit described in Subsection (A)(2)(b), applied by
substituting "3 percent" for "2 percent" in item (A) of
clause (ii) and "30 percent" for "20 percent" in item (B) of
clause (ii).
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4 No Employment Rights Created. The establishment of the Plan
neither gives any Employee a right to continuing employment nor
limits the right of an Affiliated Organization to discharge the
Employee or otherwise deal with the Employee without regard to
the effect such action might have on his or her initial or
continued participation in the Plan.
5 Special Provisions Special provisions of the Plan
applicable only to certain Participants will be set forth on an
exhibit to the Plan. In the event of a conflict between the
terms of the exhibit and the terms of the Plan, the exhibit
controls.
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EXHIBIT A
Special Rules Applicable to Certain Former Participants
In the User Technology Services, Inc.
Profit Sharing and Cash or Deferred Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the User Technology Services, Inc.
Profit Sharing Cash or Deferred Plan (the "User Technology Plan")
were transferred to the Trust in connection with the merger of
the User Technology Plan with and into the Plan (the "Merger").
For purposes of this exhibit, such a Participant is referred to
as a "User Technology Participant."
XIV Accounts. For each User Technology Participant, the
following Accounts will be established and maintained:
(a) A User Technology Pre-Tax Account to evidence the
balance of his or her pre-tax contribution account, if any, under
the User Technology Plan transferred to the Trust in connection
with the Merger;
(b) A User Technology Employer Contribution Account to
evidence the balance of his or her employer contribution
account, if any, under the User Technology Plan transferred
to the Trust in connection with the Merger; and
(c) A User Technology Rollover Account to evidence the
balance of his or her rollover contribution account, if any,
under the User Technology Plan transferred to the Trust in
connection with the Merger.
Such Accounts are sometimes collectively referred to in this
exhibit as "User Technology Accounts."
XV In-Service Withdrawals. (A) A User Technology Participant
who is an Employee may make hardship withdrawals from the portion
of his or her User Technology Pre-Tax Account consisting of pre-
tax contributions in accordance with the provisions of Section
6.1 of the Plan.
(A) A User Technology Participant who is an Employee may
make withdrawals from his or her User Technology Pre-Tax
Account, and his or her User Technology Employer Contribution
Account if it is 100% vested, in accordance with the
provisions of Section 6.2 of the Plan.
(B) A User Technology Participant who is an Employee may
withdraw all or any portion of the balance of his or her User
Technology Rollover Account.
(C) All withdrawals from User Technology Accounts pursuant
to this section are subject to the provisions of Section 6.4
of the Plan except that notwithstanding Section 6.4(D),
distributions may be made in kind if elected by the
Participant and if such distribution is otherwise permissible.
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In addition, no withdrawal may be made from any User
Technology Account unless, during the 90-day period ending on
the date of the withdrawal, the User Technology Participant's
spouse consents to the withdrawal.
XVI Loans. A User Technology Participant may borrow funds from
his or her User Technology Pre-Tax Account and User Technology
Rollover Account in accordance with Section 6.5 of the Plan. No
loan will be made to a User Technology Participant from a User
Technology Pre-Tax or Rollover Account unless, during the 90-day
period ending on the date of the loan, the User Technology
Participant's spouse consents to the loan.
XVII Vesting and Forfeitures.
XVII 1 Vesting. (A) Each User Technology Participant at
all times has a fully vested nonforfeitable interest in his or
her User Technology Pre-Tax Account and User Technology Rollover
Account.
(A) A User Technology Participant will acquire a fully
vested nonforfeitable interest in his or her User Technology
Employer Contribution Account upon attaining his or her Normal
Retirement Date while he or she is an Employee.
(B) A User Technology Participant will acquire a fully
vested nonforfeitable interest in his or her User Technology
Employer Contribution Account if he or she dies or becomes
Disabled while he or she is an Employee.
(C) A User Technology Participant whose employment
terminates prior to his or her Normal Retirement Date other
than by reason of death or becoming Disabled will acquire a
vested nonforfeitable interest in his or her User Technology
Employer Contribution Account to the extent provided in the
following schedule:
Vested
Years of Service Interest
Less Than Two Years 0%
Two Years 20%
Three Years 40%
Four Years 60%
Five Years 80%
Six or More Years 100%
A User Technology Participant's "Years of Service" are the number
of years of service he or she had completed as of October 31,
1994 under the User Technology Plan and the number of 12-month
periods beginning on November 1, 1994 and each anniversary
thereof during which the User Technology Participant completes at
least 1000 Hours of Service.
XVII 2 Forfeiture Upon Distribution. (A) If the
entire vested balance of a User Technology Participant's User
Technology Accounts is distributed not later than the last day of
the second Plan Year following the Plan Year during which his or
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her employment terminates, and if the amount of such distribution
was not more than $3500 or the distribution was made with the
Participant's consent, the nonvested portion of the Participant's
User Technology Employer Contribution Account will, at the time
of such distribution, be forfeited. A Participant who has no
vested interest in his or her User Technology Employer
Contribution Account when his or her employment terminates will
be deemed to have received distribution of the entire vested
balance in such Account upon such termination.
(A) If a User Technology Participant described in paragraph
(A)(1) received a distribution of less than the entire balance
of his or her User Technology Accounts, (2) resumes employment
as a Qualified Employee and (3) repays to the Trustee the full
amount distributed before the earlier of (a) five years
following the date of reemployment as a Qualified Employee or
(b) the date on which he or she incurs five consecutive One-
Year Breaks in Service following the distribution, the amount
of any forfeitures pursuant to paragraph (A) will be restored
to the Participant's User Technology Employer Contribution
Account, unadjusted for any change in Fund value occurring
after the distribution. The restoration will be made from
forfeitures that arise for the Plan Year for which the
restoration is to be made. To the extent such forfeitures are
insufficient for such purpose, the Participating Employer with
whom the User Technology Participant was last employed as a
Qualified Employee will contribute the amount required to
restore the Account. A Participant described in the last
sentence of paragraph (A) who is reemployed prior to incurring
five consecutive One Year Breaks in Service following the
distribution will be deemed to have repaid his or her deemed
distribution upon his or her reemployment as a Qualified
Employee.
(B) The provisions of this section apply, without
limitation, to a participant in the User Technology Plan who
terminated employment with User Technology Services, Inc. with
less than a fully vested interest in his employer contribution
account under the User Technology Plan and received a
distribution of the vested balance of his or her employer
contribution account before the Merger and not later than the
last day of the second User Technology Plan plan year
following the User Technology Plan plan year during which he
or she terminated employment.
XVII 3 Other Forfeitures. (A) Except as provided in
Section 4.2 of this exhibit, the nonvested portion of a
Participant's User Technology Employer Contribution Account will
continue to be held in a subaccount until the Participant incurs
five consecutive One-Year Breaks in Service, at which time the
subaccount balance will be forfeited. If the Participant resumes
employment with an Affiliated Organization prior to incurring
five consecutive One-Year Breaks in Service, the subaccount will
be disregarded and its balance will be included in the
Participant's User Technology Employer Contribution Account
balance.
(A) A Participant's vested interest in his or her User
Technology Employer Contribution Account balance following a
resumption of employment in accordance with the last sentence
of paragraph (A) at any given time will not be less than the
amount "X" determined by the formula: X = P(AB + (R x D)) - (R
x D), where P is the Participant's vested percentage at the
time of determination; AB is the User Technology Account
balance at the time of determination; D is the amount of the
distribution; and R is the ratio of the User Technology
Account balance at the time of determination, to the balance
immediately following the distribution.
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XVII 4 Reallocation of Forfeitures. All forfeitures in a
Plan Year will be allocated as of the last day of the Plan Year
as follows:
(a) The forfeitures will first be applied to restore the
User Technology Employer Contribution Accounts of
Participants as provided in Section 4.2(B) of this exhibit;
and
(b) Any remaining forfeitures will be applied toward the
Matching Contribution obligations of the Participating
Employer with whom the User Technology Participant in
question was last employed.
XVII 5 One-Year Break in Service. A User Technology
Participant will incur a "One-Year Break in Service" if the User
Technology Participant fails to complete more than 500 Hours of
Service during a Plan Year; provided, that, only for purposes of
determining whether a User Technology Participant has incurred
such a One-Year Break in Service, in addition to Hours of Service
credited under Section 4.6 of this exhibit, there will be taken
into account the number of Hours of Service that otherwise would
have been credited to the User Technology Participant, or, if the
number of such Hours of Service that otherwise would be credited
to the User Technology Participant cannot be determined, eight
Hours of Service for each day on which the User Technology
Participant would have otherwise performed services for an
Affiliated Organization, during an authorized leave of absence,
while still employed with the Affiliated Organization, due to -
(a) the User Technology Participant's pregnancy,
(b) the birth of the User Technology Participant's child,
(c) the placement of a child with the User Technology
Participant in connection with the adoption of such child by
the User Technology Participant, or
(d) the User Technology Participant's caring for such child
for a period beginning immediately following such birth or
placement;
provided, first, that the total number of such additional Hours
of Service taken into account by reason of any such absence will
not exceed 501; second, that, if the User Technology Participant
would be prevented from incurring a One-Year Break in Service for
the Plan Year in which such absence commenced solely because the
additional Hours of Service are so credited, such Hours of
Service will be credited only to such Plan Year or, if a One-Year
Break in Service for such Plan Year would not be so prevented,
such additional Hours of Service will be credited to the Plan
Year following the Plan Year during which such absence commenced;
and third, that, notwithstanding the foregoing, no such
additional Hours of Service will be credited unless the Employee
furnishes to the Administrator, on a timely basis, such
information as the Administrator reasonably requires in order to
establish the number of days during which the User Technology
Participant was absent for one of the reasons set forth at items
(a) through (d) above. In addition, a User Technology
Participant will be credited with Hours of Service for the
purpose of determining whether he or she has incurred a One-Year
Break in Service to the extent required by the Family and Medical
Leave Act of 1993.
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XVII 6 Hour of Service. (A) Subject to the remaining
subsections of this section, for purposes of this exhibit the
term "Hour of Service," with respect to a User Technology
Participant includes and is limited to -
(1) each hour for which the User Technology Participant is
paid, or entitled to payment, for the performance of duties
for an Affiliated Organization;
(2) each hour for which the User Technology Participant is
paid, or entitled to payment, by an Affiliated Organization
for an authorized absence, such as holiday, personal days
off, sick leave, short-term disability, funeral leave, jury
duty and reserve United States Armed Forces duty;
(3) Each hour that the User Technology Participant was
absent without pay due to:
(a) military or jury service which is required by
applicable law to be treated as an authorized leave, or
any other absence required by applicable law or
contractual undertaking to be treated as an authorized
leave;
(b) a leave of absence authorized for medical reasons,
public service, social service or educational purposes,
which leaves shall be granted under rules applied
uniformly to all Employees;
(c) any other leave of absence authorized by an
Affiliated Organization, all of which leaves of absence
are defined as "personal leaves" and which leaves will
be granted under rules applied uniformly to all
Employees;
(d) a layoff, but only to the extent it does not
exceed six months' duration;
(e) a leave of absence granted under the terms of an
Affiliated Organization's Time Off Without Pay Program,
but only to the extent it does not exceed 12 months'
duration;
in which case the number of hours for which a User
Technology Participant receives credit will be equal to that
number of Hours of Service per day which he or she would
normally have been scheduled to complete during such
absence, or eight hours per day, whichever is less; and
(4) each hour for which backpay, irrespective of mitigation
of damages, is either awarded or agreed to by an Affiliated
Organization; provided, that Hours of Service taken into
account under clause (1), (2) or (3) will not also be taken
into account under this clause (4).
(B) For purposes of applying clauses (1) and (4) of
paragraph (A), hours for which a User Technology Participant
is entitled to overtime premium pay will be taken into account
only to the extent the User Technology Participant actually
performs services or to which a backpay award pertains and
will not include any hours attributable to the premium pay
itself.
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(C) For purposes of applying clause (2) of paragraph (A),
the User Technology Participant will be credited with Hours of
Service during such absence at the same rate at which he or
she was credited under clause (1) of paragraph (A) immediately
prior to the commencement of such absence.
(D) For purposes of determining the number of Hours of
Service completed by a User Technology Participant during a
particular period of time -
(1) a User Technology Participant who is not subject to the
overtime provisions of the Fair Labor Standards Act of 1938,
as from time to time amended, will be credited with ten
Hours of Service for each day during which he or she
completes at least one Hour of Service;
(2) each other User Technology Participant will be credited
with the number of Hours of Service that he or she completes
during such period.
(E) Notwithstanding the foregoing provisions of this
section, the number of Hours of Service that a User Technology
Participant completes (1) while, although not employed with an
Affiliated Organization, he or she is considered to be a
"leased employee" of an Affiliated Organization or of a
"related person" (within the meaning of Code sections
414(n)(2) and 144(a)(3), respectively) or (2) with any other
organization to the extent such Hours of Service are required
to be taken into account pursuant to Treasury Regulations
under Code section 414(o), in each case determined in the
manner specified in paragraphs (A) through (D), will also be
taken into account.
Time and Form of Distribution. (A) Following a User
Technology Participant's termination of employment or earlier
attainment of age 70-1/2, the Trustee will distribute to the User
Technology Participant or, if the User Technology Participant has
died, to his or her Beneficiary, the aggregate vested balance of
the Participant's User Technology Accounts. Subject to the
remaining paragraphs of this section and Section 8.8 of the Plan,
distribution of a User Technology Participant's User Technology
Accounts will be made in accordance with the following provisions
(1) If the aggregate vested balance of the User
Technology Participant's User Technology and other Accounts
at the time of the distribution is not more than $3500,
distribution to the User Technology Participant of the
vested balance of his or her User Technology Accounts, or
distribution of such vested User Technology Account balances
to the User Technology Participant's Beneficiary in the case
of his or her death, will be made in accordance with Section
8.1(A) of the Plan. This clause will not apply, however, if
the aggregate vested balance of the User Technology
Participant's User Technology and other Accounts exceeded
$3500 at the time of any previous distribution to the
Participant.
(2) If clause (1) does not apply and the aggregate
vested balance of the User Technology Participant's User
Technology Accounts at the time of the distribution is not
more than $3500, distribution will be made in accordance
with Section 8.1(B) of the Plan.
(3) If clauses (1) and (2) do not apply, distribution
to the User Technology Participant will be made in the form
determined pursuant to paragraph (C). The distribution will
be made or commence as soon as administratively practicable
after the Administrator's receipt from the User Technology
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Participant of a complete and accurate written distribution
request on a form provided by the Administrator; provided,
that the distribution must be made or commence not later
than the date specified in Section 8.1 (B)(1) of the Plan
unless the User Technology Participant elects to defer the
distribution in the manner described in paragraph (B).
(4) Subject to clause (1) above and paragraph (C)(3),
any distribution to the User Technology Participant's
Beneficiary will be made in the form elected by the
Beneficiary pursuant to paragraph (E). The distribution
will be made or commence as soon as administratively
practicable after the Administrator's receipt from the
Beneficiary of a complete and accurate written distribution
request on a form provided by the Administrator and in no
case later than the latest date required pursuant to
paragraph (E).
(5) All distributions will be made by delivery of an
annuity contract or in the case of lump sum or installment
payments, by delivery of a check drawn on the Trust or
assets in which the Participant's User Technology Accounts
are invested at the time of the distribution if otherwise
permissible.
(6) The value of a User Technology Participant's User
Technology Accounts will be determined in accordance with
Section 8.1 of the Plan.
(7) Any annuity contract distributed pursuant to this
section will be a single premium, nonparticipating,
nontransferable, noncancellable, nonsurrenderable immediate
annuity contract that complies with all applicable
requirements of the Plan. Distribution of any annuity
contract pursuant to the provisions of this exhibit
satisfies in full any claims that the User Technology
Participant or his or her spouse or Beneficiary may have
under the Plan, and neither any Affiliated Organization, the
Trustee nor the Administrator is responsible to any extent
with respect to any payments to which the User Technology
Participant or his or her spouse or Beneficiary may be
entitled under such annuity contract.
(B) Subject to the provisions of the other paragraphs of
this section, a Participant described in paragraph (A)(3) may
elect to defer commencement of the distribution of his or her
User Technology Accounts by providing the Administrator a
written, signed statement indicating in which of the available
forms the benefit will be paid and specifying the date on
which the payment is to be made or commence, provided such
date may not be later than April 1 of the calendar year
following the calendar year in which the Participant attains
age 70-1/2. Such deferral election must be provided not later
than the thirtieth day (or such later date as Plan Rules may
allow) after the close of the Plan Year during which there
occurs the later of the User Technology Participant's
termination of employment or Normal Retirement Date. Plan
Rules may permit a User Technology Participant to modify any
such election in any manner determined by the Administrator to
be consistent with Code section 401(a)(14) and Treasury
Regulations thereunder and the other provisions of this
section.
(C) (1) Unless a User Technology Participant described in
paragraph (A)(3) otherwise elects in accordance with the
provisions of clause (2), the Trustee will, with the vested
balance of the Participant's User Technology Accounts,
purchase and distribute to the Participant an annuity
contract that provides for payments for the life of the User
Technology Participant if the User Technology Participant is
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not married on his or her "annuity starting date," within
the meaning of Code section 417(f)(2), or, if the User
Technology Participant is then married, for payments for the
life of the Participant, with 50 percent, 75 percent or 100
percent of the amount of such payments, as specified by the
Participant on a form provided by the Administrator,
continuing after the Participant's death for the life of
such spouse; provided, first, that each qualified joint and
survivor option payable under such annuity contract will be
actuarially equivalent to each other option based upon
reasonable actuarial assumptions specified in the contract;
and, second, that if a Participant does not otherwise elect,
the benefit payable under the annuity contract with respect
to a married Participant will be payments for his or her
life with 50 percent of the amount of such payments
continuing thereafter for the life of such spouse.
(1) A User Technology Participant whose benefit would
otherwise be paid in the form of an annuity contract
described in clause (1) may elect to instead receive a lump
sum payment, installment payments or an annuity contract
providing for payments in another form. The User Technology
Participant's election must be in writing, in form
prescribed by the Administrator; must be made within the 90-
day period ending on the User Technology Participant's
annuity starting date; may be revoked and a new election
made any number of times during the election period; and
will not be effective unless the Participant's spouse
consents to the election.
(2) If a User Technology Participant dies prior to his
or her annuity starting date and is married on the date of
his or her death, the Administrator will, with the vested
balance of the User Technology Participant's User Technology
Accounts, purchase and distribute to the User Technology
Participant's surviving spouse a nontransferable annuity
contract that provides payments to the surviving spouse for
life, commencing at such time not later than the date on
which the User Technology Participant would have attained
age 70-1/2 as such spouse elects; provided, that this
clause (3) will not apply if -
(a) the User Technology Participant's spouse
elects, in a written, signed statement delivered to the
Administrator prior to the purchase of the annuity
contract, to receive the balance of the User Technology
Participant's User Technology Accounts in a lump sum
payment, installment payments or a period-certain
annuity contract in accordance with the provisions of
paragraph (E), or
(b) the User Technology Participant elected, by a
signed written statement delivered to the Administrator
within the period commencing on the first day of the
Plan Year in which he or she attained age 35 and ending
on the date of his or her death, to waive the
provisions of this clause (3), and the User Technology
Participant's spouse consented to such election;
provided that a User Technology Participant may, at any
time and any number of times, by signed written notice
delivered to the Administrator during the User
Technology Participant's lifetime, revoke any election
made under this clause (b), and may make a new election
following any such revocation.
(3) The provisions of this paragraph (C) apply
notwithstanding and supersede any designation by a married
User Technology Participant of any primary Beneficiary other
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than his or her spouse which designation is not made either
in conjunction with an election pursuant to clause (2) or
(3)(b) of this paragraph (C), as the case may be, or
thereafter with the spouse's consent.
(D) (1) If a User Technology Participant described in
paragraph (A)(3) elects pursuant to paragraph (C)(2) to
receive his or her distribution in the form of installment
payments, such installments will be substantially equal in
amount and will be made on a monthly, quarterly, semi-annual
or annual basis, for a period certain not extending beyond
either the Participant's life expectancy or the life
expectancy of the Participant and his or her Beneficiary.
(1) If a User Technology Participant described in
paragraph (A)(3) elects pursuant to paragraph (C)(2) to
receive his or her distribution in the form of an annuity
contract providing for payments in a form other than that
described in paragraph (C)(1), the Trustee will, with the
vested balance of the User Technology Participant's User
Technology Accounts purchase and distribute to the User
Technology Participant an annuity contract pursuant to which
payments are made over a period not exceeding (a) the period
over which installment payments could be made or (b) the
life of the User Technology Participant or the lives of the
Participant and his or her Beneficiary.
(2) If the Participant's Beneficiary is not his or her
spouse, the period over which payments pursuant to clause
(1) or (2) are to be made will be determined by reference to
the applicable factor set forth in Treasury Regulation
section 1.401(a)(9)-2. Prior to April 1 of the calendar
year following the calendar year during which he or she
attains age 70-1/2, a User Technology Participant who has
elected a form of payments based on his or her life
expectancy or the joint life expectancies of the User
Technology Participant and his or her spouse may elect, in
writing to the Administrator, whether the life expectancies
for the Participant or the Participant and his or her
spouse, as the case may be, are to be recalculated on an
annual basis for purposes of determining the amount of each
such payment. Any such election will become irrevocable as
of April 1 of the calendar year following the calendar year
during which the User Technology Participant attains age 70
1/2. If no such election is made, the life expectancies of
the User Technology Participant or the User Technology
Participant and his or her spouse, as the case may be, will
not be recalculated.
(E) Subject to paragraphs (A)(1) and (C), if a User
Technology Participant dies before receiving the full amount
of his or her vested User Technology Account balances, the
remaining vested amount will be distributed to the User
Technology Participant's Beneficiary at such time or times and
in such manner as the Beneficiary elects, subject, however to
the following rules:
(1) If the User Technology Participant dies after
April 1 of the calendar year following the calendar year
during which he or she attains age 70-1/2, distribution will
be made to the Beneficiary at a rate that would result in
the benefit being distributed at least as rapidly as if
distribution were made at the same rate as was in effect
immediately prior to the Participant's death;
(2) If the User Technology Participant dies before
April 1 of the calendar year following the calendar year
during which he or she attains age 70-1/2, distribution
will, at the Beneficiary's election, be made -
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(a) in a lump sum payment no later than
December 31 of the calendar year which contains the
fifth anniversary of the date of the User Technology
Participant's death,
(b) in installments, commencing no later than
December 31 of the calendar year immediately following
the calendar year in which the User Technology
Participant died (unless the Beneficiary is the User
Technology Participant's spouse, in which case payments
must begin no later than such date specified above or
December 31 of the calendar year in which the User
Technology Participant would have attained age 70-1/2
if he or she had lived), and being paid over a period
not exceeding the Beneficiary's remaining life
expectancy, (as determined on the basis of the
Beneficiary's age as of the date on which payments are
required to commence under this clause (2) and, if the
Beneficiary is the Participant's surviving spouse, as
redetermined on an annual basis if so elected by such
surviving spouse) or any shorter period as the
Beneficiary may thereafter elect in accordance with
Plan Rules, or
(c) in the form of an annuity contract pursuant
to which payments are made over a period certain not
exceeding the period over which installment payments
could have been made.
A Beneficiary's election with respect to the time and manner
in which any amount remaining at the User Technology
Participant's death will be distributed must be made no
later than the earlier of the dates set forth in clause 2(a)
and (b) above, and is irrevocable following such date. If
the Beneficiary fails to make an election under clause (2),
distribution will be made in the manner set forth at clause
(2)(a). If the User Technology Participant's spouse is the
Beneficiary and dies after the User Technology Participant's
death but before distributions to such spouse have
commenced, the foregoing rules will be applied as if the
surviving spouse were the User Technology Participant,
including the substitution of the surviving spouse's date of
death for the User Technology Participant's date of death;
provided, that the alternative commencement date in clause
(2)(b) relating to the date on which the Participant would
have attained age 70-1/2 had he or she lived will not be
available.
(F) Notwithstanding any other provision of this exhibit to
the contrary, distributions (including payments made under an
annuity contract) will be made in accordance with regulations
issued under Code section 401(a)(9), including Treasury
Regulation section 1.401(a)(9)-2, and any provisions of the
Plan reflecting Code section 401(a)(9) takes precedence over
any distribution options in this exhibit that are inconsistent
with Code section 401(a)(9).
XIX Prior Actions. Elections, designations, waivers, consents
and similar actions made pursuant to the User Technology Plan
prior to the Merger and in effect as of the date of the Merger
will remain in effect for purposes of the Plan until revoked or
withdrawn or otherwise made void pursuant to the terms of the
Plan.
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EXHIBIT B
Special Rules Applicable to Certain Former Participants
In the Paragon Imaging, Inc.
Retirement Savings Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the Paragon Imaging, Inc. Retirement
Savings Plan (the Paragon Plan") were transferred to the Trust in
connection with the merger of the Paragon Plan with and into the
Plan (the "Merger"). For purposes of this exhibit, such a
Participant is referred to as a "Paragon Participant."
XX Accounts. For each Paragon Participant, the following
Accounts will be established and maintained:
(a) A Paragon Pre-Tax Account to evidence the balance of
his or her elective account, if any, under the Paragon Plan
transferred to the Trust in connection with the Merger;
(b) A Paragon Employer Contribution Account to evidence the
balance of his or her employer contribution account, if any,
under the Paragon Plan transferred to the Trust in connection
with the Merger; and
(c) A Paragon Rollover Account to evidence the balance of
his or her rollover contribution account, if any, under the
Paragon Plan transferred to the Trust in connection with the
Merger.
Such Accounts are sometimes collectively referred to in this
exhibit as "Paragon Accounts."
XXI In-Service Withdrawals. (A) A Paragon Participant who is an
Employee may make hardship withdrawals from the portion of his or
her Paragon Pre-Tax Account consisting of pre-tax contributions
in accordance with the provisions of Section 6.1 of the Plan.
(A) A Paragon Participant who is an Employee may make
withdrawals from his or her Paragon Pre-Tax Account, and his or
her Paragon Employer Contribution Account if it is 100% vested,
in accordance with the provisions of Section 6.2 of the Plan.
(B) A Paragon Participant who is an Employee may withdraw
all or any portion of the balance of his or her Paragon Rollover
Account.
(C) All withdrawals from Paragon Accounts pursuant to this
section are subject to the provisions of Section 6.4 of the Plan
except that notwithstanding Section 6.4(D), distributions may be
made in kind if elected by the Participant and if such
distribution is otherwise permissible. In addition, no
withdrawal may be made from any Paragon Account unless, during
the 90-day period ending on the date of the withdrawal, the
Paragon Participant's spouse consents to the withdrawal.
XXII Loans. A Paragon Participant may borrow funds from his or
her Paragon Pre-Tax Account and Paragon Rollover Account in
accordance with Section 6.5 of the Plan. No loan will be made to
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a Paragon Participant from a Paragon Pre-Tax or Rollover Account
unless, during the 90-day period ending on the date of the loan,
the Paragon Participant's spouse consents to the loan.
XXIII Vesting and Forfeitures.
XXIII 1 Vesting. (A) Each Paragon Participant at all
times has a fully vested nonforfeitable interest in his or her
Paragon Pre-Tax Account and Paragon Rollover Account.
(A) A Paragon Participant will acquire a fully vested
nonforfeitable interest in his or her Paragon Employer
Contribution Account upon attaining his or her Normal Retirement
Date while he or she is an Employee.
(B) A Paragon Participant will acquire a fully vested
nonforfeitable interest in his or her Paragon Employer
Contribution Account if he or she dies or becomes Disabled while
he or she is an Employee.
(C) A Paragon Participant whose employment terminates prior
to his or her Normal Retirement Date other than by reason of
death or becoming Disabled will acquire a vested nonforfeitable
interest in his or her Paragon Employer Contribution Account to
the extent provided in the following schedule:
Vested
Years of Service Interest
Less Than Two Years 0%
Two Years 20%
Three Years 40%
Four Years 60%
Five Years 80%
Six or More Years 100%
A Paragon Participant's "Years of Service" are the number of
years of service he or she had completed as of December 31, 1994
under the Paragon Plan and the number of Plan Years beginning on
or after January 1, 1995 during which the Paragon Participant
completes at least 1000 Hours of Service.
XXIII 2 Forfeiture Upon Distribution. (A) If the entire
vested balance of a Paragon Participant's Paragon Accounts is
distributed not later than the last day of the second Plan Year
following the Plan Year during which his or her employment
terminates, and if the amount of such distribution was not more
than $3500 or the distribution was made with the Participant's
consent, the nonvested portion of the Participant's Paragon
Employer Contribution Account will, at the time of such
distribution, be forfeited. A Participant who has no vested
interest in his or her Paragon Employer Contribution Account when
his or her employment terminates will be deemed to have received
distribution of the entire vested balance in such Account upon
such termination.
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(A) If a Paragon Participant described in paragraph (A)(1)
received a distribution of less than the entire balance of his or
her Paragon Accounts, (2) resumes employment as a Qualified
Employee and (3) repays to the Trustee the full amount
distributed before the earlier of (a) five years following the
date of reemployment as a Qualified Employee or (b) the date on
which he or she incurs five consecutive One-Year Breaks in
Service following the distribution, the amount of any forfeitures
pursuant to paragraph (A) will be restored to the Participant's
Paragon Employer Contribution Account, unadjusted for any change
in Fund value occurring after the distribution. The restoration
will be made from forfeitures that arise for the Plan Year for
which the restoration is to be made. To the extent such
forfeitures are insufficient for such purpose, the Participating
Employer with whom the Paragon Participant was last employed as a
Qualified Employee will contribute the amount required to restore
the Account. A Participant described in the last sentence of
paragraph (A) who is reemployed prior to incurring five
consecutive One Year Breaks in Service following the distribution
will be deemed to have repaid his or her deemed distribution upon
his or her reemployment as a Qualified Employee.
(B) The provisions of this section apply, without
limitation, to a participant in the Paragon Plan who terminated
employment with Paragon Services, Inc. with less than a fully
vested interest in his employer contribution account under the
Paragon Plan and received a distribution of the vested balance of
his or her employer contribution account before the Merger and
not later than the last day of the second Paragon Plan plan year
following the Paragon Plan plan year during which he or she
terminated employment.
XXIII 3 Other Forfeitures. (A) Except as provided in
Section 4.2 of this exhibit, the nonvested portion of a
Participant's Paragon Employer Contribution Account will continue
to be held in a subaccount until the Participant incurs five
consecutive One-Year Breaks in Service, at which time the
subaccount balance will be forfeited. If the Participant resumes
employment with an Affiliated Organization prior to incurring
five consecutive One-Year Breaks in Service, the subaccount will
be disregarded and its balance will be included in the
Participant's Paragon Employer Contribution Account balance.
(A) A Participant's vested interest in his or her Paragon
Employer Contribution Account balance following a resumption of
employment in accordance with the last sentence of paragraph (A)
at any given time will not be less than the amount "X" determined
by the formula: X = P(AB + (R x D)) - (R x D), where P is the
Participant's vested percentage at the time of determination; AB
is the Paragon Account balance at the time of determination; D is
the amount of the distribution; and R is the ratio of the Paragon
Account balance at the time of determination, to the balance
immediately following the distribution.
XXIII 4 Reallocation of Forfeitures. All forfeitures in a
Plan Year will be allocated as of the last day of the Plan Year
as follows:
(a) The forfeitures will first be applied to restore the
Paragon Employer Contribution Accounts of Participants as
provided in Section 4.2(B) of this exhibit; and
(b) Any remaining forfeitures will be applied toward the
Matching Contribution obligations of the Participating Employer
with whom the Paragon Participant in question was last employed.
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XXIII 5 One-Year Break in Service. A Paragon Participant
will incur a "One-Year Break in Service" if the Paragon
Participant fails to complete more than 500 Hours of Service
during a Plan Year; provided, that, only for purposes of
determining whether a Paragon Participant has incurred such a
One-Year Break in Service, in addition to Hours of Service
credited under Section 4.6 of this exhibit, there will be taken
into account the number of Hours of Service that otherwise would
have been credited to the Paragon Participant, or, if the number
of such Hours of Service that otherwise would be credited to the
Paragon Participant cannot be determined, eight Hours of Service
for each day on which the Paragon Participant would have
otherwise performed services for an Affiliated Organization,
during an authorized leave of absence, while still employed with
the Affiliated Organization, due to -
(a) the Paragon Participant's pregnancy,
(b) the birth of the Paragon Participant's child,
(c) the placement of a child with the Paragon Participant
in connection with the adoption of such child by the Paragon
Participant, or
(d) the Paragon Participant's caring for such child for a
period beginning immediately following such birth or placement;
provided, first, that the total number of such additional Hours
of Service taken into account by reason of any such absence will
not exceed 501; second, that, if the Paragon Participant would be
prevented from incurring a One-Year Break in Service for the Plan
Year in which such absence commenced solely because the
additional Hours of Service are so credited, such Hours of
Service will be credited only to such Plan Year or, if a One-Year
Break in Service for such Plan Year would not be so prevented,
such additional Hours of Service will be credited to the Plan
Year following the Plan Year during which such absence commenced;
and third, that, notwithstanding the foregoing, no such
additional Hours of Service will be credited unless the Employee
furnishes to the Administrator, on a timely basis, such
information as the Administrator reasonably requires in order to
establish the number of days during which the Paragon Participant
was absent for one of the reasons set forth at items (a) through
(d) above. In addition, a Paragon Participant will be credited
with Hours of Service for the purpose of determining whether he
or she has incurred a One-Year Break in Service to the extent
required by the Family and Medical Leave Act of 1993.
XXIII 6 Hour of Service. (A) Subject to the remaining
subsections of this section, for purposes of this exhibit the
term "Hour of Service," with respect to a Paragon Participant
includes and is limited to -
(1) each hour for which the Paragon Participant is paid, or
entitled to payment, for the performance of duties for an
Affiliated Organization;
(2) each hour for which the Paragon Participant is paid, or
entitled to payment, by an Affiliated Organization for an
authorized absence, such as holiday, personal days off, sick
leave, short-term disability, funeral leave, jury duty and
reserve United States Armed Forces duty;
(3) Each hour that the Paragon Participant was absent
without pay due to:
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(a) military or jury service which is required by
applicable law to be treated as an authorized leave, or
any other absence required by applicable law or
contractual undertaking to be treated as an authorized
leave;
(b) a leave of absence authorized for medical reasons,
public service, social service or educational purposes,
which leaves shall be granted under rules applied
uniformly to all Employees;
(c) any other leave of absence authorized by an
Affiliated Organization, all of which leaves of absence
are defined as "personal leaves" and which leaves will
be granted under rules applied uniformly to all
Employees;
(d) a layoff, but only to the extent it does not
exceed six months' duration;
(e) a leave of absence granted under the terms of an
Affiliated Organization's Time Off Without Pay Program,
but only to the extent it does not exceed 12 months'
duration;
in which case the number of hours for which a Paragon
Participant receives credit will be equal to that number of
Hours of Service per day which he or she would normally have
been scheduled to complete during such absence, or eight
hours per day, whichever is less; and
(4) each hour for which backpay, irrespective of mitigation
of damages, is either awarded or agreed to by an Affiliated
Organization; provided, that Hours of Service taken into
account under clause (1), (2) or (3) will not also be taken
into account under this clause (4).
(B) For purposes of applying clauses (1) and (4) of
paragraph (A), hours for which a Paragon Participant is entitled
to overtime premium pay will be taken into account only to the
extent the Paragon Participant actually performs services or to
which a backpay award pertains and will not include any hours
attributable to the premium pay itself.
(C) For purposes of applying clause (2) of paragraph (A),
the Paragon Participant will be credited with Hours of Service
during such absence at the same rate at which he or she was
credited under clause (1) of paragraph (A) immediately prior to
the commencement of such absence.
(D) For purposes of determining the number of Hours of
Service completed by a Paragon Participant during a particular
period of time -
(1) a Paragon Participant who is not subject to the
overtime provisions of the Fair Labor Standards Act of 1938,
as from time to time amended, will be credited with ten
Hours of Service for each day during which he or she
completes at least one Hour of Service;
(2) each other Paragon Participant will be credited with
the number of Hours of Service that he or she completes
during such period.
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(E) Notwithstanding the foregoing provisions of this
section, the number of Hours of Service that a Paragon
Participant completes (1) while, although not employed with an
Affiliated Organization, he or she is considered to be a "leased
employee" of an Affiliated Organization or of a "related person"
(within the meaning of Code sections 414(n)(2) and 144(a)(3),
respectively) or (2) with any other organization to the extent
such Hours of Service are required to be taken into account
pursuant to Treasury Regulations under Code section 414(o), in
each case determined in the manner specified in paragraphs (A)
through (D), will also be taken into account.
Time and Form of Distribution. (A) Following a Paragon
Participant's termination of employment or earlier attainment of
age 70-1/2, the Trustee will distribute to the Paragon
Participant or, if the Paragon Participant has died, to his or
her Beneficiary, the aggregate vested balance of the
Participant's Paragon Accounts. Subject to the remaining
paragraphs of this section and Section 8.8 of the Plan,
distribution of a Paragon Participant's Paragon Accounts will be
made in accordance with the following provisions
(1) If the aggregate vested balance of the Paragon
Participant's Paragon and other Accounts at the time of the
distribution is not more than $3500, distribution to the
Paragon Participant of the vested balance of his or her
Paragon Accounts, or distribution of such vested Paragon
Account balances to the Paragon Participant's Beneficiary in
the case of his or her death, will be made in accordance
with Section 8.1(A) of the Plan. This clause will not
apply, however, if the aggregate vested balance of the
Paragon Participant's Paragon and other Accounts exceeded
$3500 at the time of any previous distribution to the
Participant.
(2) If clause (1) does not apply and the aggregate
vested balance of the Paragon Participant's Paragon Accounts
at the time of the distribution is not more than $3500,
distribution will be made in accordance with Section 8.1(B)
of the Plan.
(3) If clauses (1) and (2) do not apply,
distribution to the Paragon Participant will be made in the
form determined pursuant to paragraph (C). The distribution
will be made or commence as soon as administratively
practicable after the Administrator's receipt from the
Paragon Participant of a complete and accurate written
distribution request on a form provided by the
Administrator; provided, that the distribution must be made
or commence not later than the date specified in Section 8.1
(B)(1) of the Plan unless the Paragon Participant elects to
defer the distribution in the manner described in paragraph
(B).
(4) Subject to clause (1) above and paragraph (C)(3),
any distribution to the Paragon Participant's Beneficiary
will be made in the form elected by the Beneficiary pursuant
to paragraph (E). The distribution will be made or commence
as soon as administratively practicable after the
Administrator's receipt from the Beneficiary of a complete
and accurate written distribution request on a form provided
by the Administrator and in no case later than the latest
date required pursuant to paragraph (E).
(5) All distributions will be made by delivery of an
annuity contract or in the case of lump sum or installment
payments, by delivery of a check drawn on the Trust or
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assets in which the Participant's Paragon Accounts are
invested at the time of the distribution if otherwise
permissible.
(6) The value of a Paragon Participant's Paragon
Accounts will be determined in accordance with Section 8.1
of the Plan.
(7) Any annuity contract distributed pursuant to
this section will be a single premium, nonparticipating,
nontransferable, noncancellable, nonsurrenderable immediate
annuity contract that complies with all applicable
requirements of the Plan. Distribution of any annuity
contract pursuant to the provisions of this exhibit
satisfies in full any claims that the Paragon Participant or
his or her spouse or Beneficiary may have under the Plan,
and neither any Affiliated Organization, the Trustee nor the
Administrator is responsible to any extent with respect to
any payments to which the Paragon Participant or his or her
spouse or Beneficiary may be entitled under such annuity
contract.
(B) Subject to the provisions of the other paragraphs of
this section, a Participant described in paragraph (A)(3) may
elect to defer commencement of the distribution of his or her
Paragon Accounts by providing the Administrator a written, signed
statement indicating in which of the available forms the benefit
will be paid and specifying the date on which the payment is to
be made or commence, provided such date may not be later than
April 1 of the calendar year following the calendar year in which
the Participant attains age 70-1/2. Such deferral election must
be provided not later than the thirtieth day (or such later date
as Plan Rules may allow) after the close of the Plan Year during
which there occurs the later of the Paragon Participant's
termination of employment or Normal Retirement Date. Plan Rules
may permit a Paragon Participant to modify any such election in
any manner determined by the Administrator to be consistent with
Code section 401(a)(14) and Treasury Regulations thereunder and
the other provisions of this section.
(C) (1) Unless a Paragon Participant described in
paragraph (A)(3) otherwise elects in accordance with the
provisions of clause (2), the Trustee will, with the vested
balance of the Participant's Paragon Accounts, purchase and
distribute to the Participant an annuity contract that
provides for payments for the life of the Paragon
Participant if the Paragon Participant is not married on his
or her "annuity starting date," within the meaning of Code
section 417(f)(2), or, if the Paragon Participant is then
married, for payments for the life of the Participant, with
50 percent, 75 percent or 100 percent of the amount of such
payments, as specified by the Participant on a form provided
by the Administrator, continuing after the Participant's
death for the life of such spouse; provided, first, that
each qualified joint and survivor option payable under such
annuity contract will be actuarially equivalent to each
other option based upon reasonable actuarial assumptions
specified in the contract; and, second, that if a
Participant does not otherwise elect, the benefit payable
under the annuity contract with respect to a married
Participant will be payments for his or her life with 50
percent of the amount of such payments continuing thereafter
for the life of such spouse.
(1) A Paragon Participant whose benefit would
otherwise be paid in the form of an annuity contract
described in clause (1) may elect to instead receive a lump
sum payment, installment payments or an annuity contract
providing for payments in another form. The Paragon
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Participant's election must be in writing, in form
prescribed by the Administrator; must be made within the 90-
day period ending on the Paragon Participant's annuity
starting date; may be revoked and a new election made any
number of times during the election period; and will not be
effective unless the Participant's spouse consents to the
election.
(2) If a Paragon Participant dies prior to his or her
annuity starting date and is married on the date of his or
her death, the Administrator will, with the vested balance
of the Paragon Participant's Paragon Accounts, purchase and
distribute to the Paragon Participant's surviving spouse a
nontransferable annuity contract that provides payments to
the surviving spouse for life, commencing at such time not
later than the date on which the Paragon Participant would
have attained age 70-1/2 as such spouse elects; provided,
that this clause (3) will not apply if -
(a) the Paragon Participant's spouse elects, in a
written, signed statement delivered to the
Administrator prior to the purchase of the annuity
contract, to receive the balance of the Paragon
Participant's Paragon Accounts in a lump sum payment,
installment payments or a period-certain annuity
contract in accordance with the provisions of paragraph
(E), or
(b) the Paragon Participant elected, by a signed
written statement delivered to the Administrator within
the period commencing on the first day of the Plan Year
in which he or she attained age 35 and ending on the
date of his or her death, to waive the provisions of
this clause (3), and the Paragon Participant's spouse
consented to such election; provided that a Paragon
Participant may, at any time and any number of times,
by signed written notice delivered to the Administrator
during the Paragon Participant's lifetime, revoke any
election made under this clause (b), and may make a new
election following any such revocation.
(3) The provisions of this paragraph (C) apply
notwithstanding and supersede any designation by a married
Paragon Participant of any primary Beneficiary other than
his or her spouse which designation is not made either in
conjunction with an election pursuant to clause (2) or
(3)(b) of this paragraph (C), as the case may be, or
thereafter with the spouse's consent.
(D) (1) If a Paragon Participant described in paragraph
(A)(3) elects pursuant to paragraph (C)(2) to receive his or
her distribution in the form of installment payments, such
installments will be substantially equal in amount and will
be made on a monthly, quarterly, semi-annual or annual
basis, for a period certain not extending beyond either the
Participant's life expectancy or the life expectancy of the
Participant and his or her Beneficiary.
(1) If a Paragon Participant described in paragraph
(A)(3) elects pursuant to paragraph (C)(2) to receive his or
her distribution in the form of an annuity contract
providing for payments in a form other than that described
in paragraph (C)(1), the Trustee will, with the vested
balance of the Paragon Participant's Paragon Accounts
purchase and distribute to the Paragon Participant an
annuity contract pursuant to which payments are made over a
period not exceeding (a) the period over which installment
payments could be made or (b) the life of the Paragon
Participant or the lives of the Participant and his or her
Beneficiary.
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(2) If the Participant's Beneficiary is not his or her
spouse, the period over which payments pursuant to clause
(1) or (2) are to be made will be determined by reference to
the applicable factor set forth in Treasury Regulation
section 1.401(a)(9)-2. Prior to April 1 of the calendar
year following the calendar year during which he or she
attains age 70-1/2, a Paragon Participant who has elected a
form of payments based on his or her life expectancy or the
joint life expectancies of the Paragon Participant and his
or her spouse may elect, in writing to the Administrator,
whether the life expectancies for the Participant or the
Participant and his or her spouse, as the case may be, are
to be recalculated on an annual basis for purposes of
determining the amount of each such payment. Any such
election will become irrevocable as of April 1 of the
calendar year following the calendar year during which the
Paragon Participant attains age 70 1/2. If no such election
is made, the life expectancies of the Paragon Participant or
the Paragon Participant and his or her spouse, as the case
may be, will not be recalculated.
(E) Subject to paragraphs (A)(1) and (C), if a Paragon
Participant dies before receiving the full amount of his or her
vested Paragon Account balances, the remaining vested amount will
be distributed to the Paragon Participant's Beneficiary at such
time or times and in such manner as the Beneficiary elects,
subject, however to the following rules:
(1) If the Paragon Participant dies after April 1 of
the calendar year following the calendar year during which
he or she attains age 70-1/2, distribution will be made to
the Beneficiary at a rate that would result in the benefit
being distributed at least as rapidly as if distribution
were made at the same rate as was in effect immediately
prior to the Participant's death;
(2) If the Paragon Participant dies before April 1 of
the calendar year following the calendar year during which
he or she attains age 70-1/2, distribution will, at the
Beneficiary's election, be made -
(a) in a lump sum payment no later than
December 31 of the calendar year which contains the
fifth anniversary of the date of the Paragon
Participant's death,
(b) in installments, commencing no later than
December 31 of the calendar year immediately following
the calendar year in which the Paragon Participant died
(unless the Beneficiary is the Paragon Participant's
spouse, in which case payments must begin no later than
such date specified above or December 31 of the
calendar year in which the Paragon Participant would
have attained age 70-1/2 if he or she had lived), and
being paid over a period not exceeding the
Beneficiary's remaining life expectancy, (as determined
on the basis of the Beneficiary's age as of the date on
which payments are required to commence under this
clause (2) and, if the Beneficiary is the Participant's
surviving spouse, as redetermined on an annual basis if
so elected by such surviving spouse) or any shorter
period as the Beneficiary may thereafter elect in
accordance with Plan Rules, or
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(c) in the form of an annuity contract pursuant
to which payments are made over a period certain not
exceeding the period over which installment payments
could have been made.
A Beneficiary's election with respect to the time and manner
in which any amount remaining at the Paragon Participant's
death will be distributed must be made no later than the
earlier of the dates set forth in clause 2(a) and (b) above,
and is irrevocable following such date. If the Beneficiary
fails to make an election under clause (2), distribution
will be made in the manner set forth at clause (2)(a). If
the Paragon Participant's spouse is the Beneficiary and dies
after the Paragon Participant's death but before
distributions to such spouse have commenced, the foregoing
rules will be applied as if the surviving spouse were the
Paragon Participant, including the substitution of the
surviving spouse's date of death for the Paragon
Participant's date of death; provided, that the alternative
commencement date in clause (2)(b) relating to the date on
which the Participant would have attained age 70-1/2 had he
or she lived will not be available.
(F) Notwithstanding any other provision of this
exhibit to the contrary, distributions (including payments made
under an annuity contract) will be made in accordance with
regulations issued under Code section 401(a)(9), including
Treasury Regulation section 1.401(a)(9)-2, and any provisions of
the Plan reflecting Code section 401(a)(9) takes precedence over
any distribution options in this exhibit that are inconsistent
with Code section 401(a)(9).
XXV Prior Actions. Elections, designations, waivers, consents
and similar actions made pursuant to the Paragon Plan prior to
the Merger and in effect as of the date of the Merger will remain
in effect for purposes of the Plan until revoked or withdrawn or
otherwise made void pursuant to the terms of the Plan.
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EXHIBIT C
Special Rules Applicable to Certain Former Participants
in the Resumix, Inc. 401(k) Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the Resumix, Inc. New 401(k) Plan
(the "Resumix Plan") were transferred to the Trust in connection
with the merger of the Resumix Plan with and into the Plan
effective as of December 31, 1995 (the "Merger"). For purposes
of this exhibit, such a Participant is referred to as a "Resumix
Participant."
XXVI Accounts. The balance of a Resumix Participant's accounts
under the Resumix Plan will be transferred to Accounts under the
Plan as follows:
(a) The balance of the Resumix Participant's "employee pre-
tax account" under the Resumix Plan, if any, will be transferred
to his or her Pre-Tax Account; and
(b) The balance of the Resumix Participant's "rollover
account" under the Resumix Plan, if any, will be transferred to
his or her General Rollover Account.
XXVII Loans. Any loan outstanding under the Resumix Plan at the
time of the Merger will remain outstanding under the Plan in
accordance with the terms of such loan.
XXVIII Prior Actions. Elections, designations, waivers, consents
and similar accounts made pursuant to the Resumix Plan prior to
the Merger and in effect as of the date of the Merger will remain
in effect for purposes of the Plan until revoked or withdrawn or
otherwise made void pursuant to the terms of the Plan.
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EXHIBIT D
Special Rules Applicable to Certain Former Participants
in the MiniData 401(k) Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the MiniData 401(k) Plan (the
"MiniData Plan") were transferred to the Trust in connection with
the merger of the MiniData Plan with and into the Plan effective
as of May 31, 1996 (the "Merger"). For purposes of this exhibit,
such a Participant is referred to as a "MiniData Participant."
XXIX Accounts. For each MiniData Participant, the following
Accounts will be established and maintained:
(a) A MiniData Pre-Tax Account to evidence the balance of
his or her elective account, if any, under the MiniData Plan
transferred to the Trust in connection with the Merger;
(b) A MiniData Employer Contribution Account to evidence
the balance of his or her account attributable to matching or
discretionary employer contributions, if any, under the MiniData
Plan transferred to the Trust in connection with the Merger; and
(c) A MiniData Rollover Account to evidence the balance of
his or her rollover account, if any, under the MiniData Plan
transferred to the Trust in connection with the Merger.
Such Accounts are sometimes collectively referred to in this
exhibit as "MiniData Accounts."
XXX In-Service Withdrawals. (A) A MiniData Participant who is
an Employee may make hardship withdrawals in accordance with the
provisions of Section 6.1 of the Plan from the portion of his or
her MiniData Pre-Tax Account consisting of the balance of his or
her elective account under the MiniData Plan as of December 31,
1988, increased by the amount of elective contributions made on
the Participant's behalf pursuant to the MiniData Plan for plan
years after December 31, 1988 and reduced by the amount of any
such contributions distributed after December 31, 1988.
(A) A MiniData Participant who is an Employee may make
withdrawals from his or her MiniData Pre-Tax Account, and the
vested portion of his or her MiniData Employer Contribution
Account, in accordance with the provisions of Section 6.2 of the
Plan.
(B) A MiniData Participant who is an Employee may withdraw
all or any portion of the balance of his or her MiniData Rollover
Account.
(C) All withdrawals from MiniData Accounts pursuant to this
section are subject to the provisions of Section 6.4 of the Plan.
If a MiniData Participant who does not have a fully vested
interest in his or her MiniData Employer Contribution Account
makes a withdrawal from such Account, his or her vested interest
in the Account will thereafter be determined in accordance with
Section 7.3(B) of the Plan.
XXXI Loans. A MiniData Participant may borrow funds from his or
her MiniData Pre-Tax Account and MiniData Rollover Account in
accordance with Section 6.5 of the Plan. Any loan outstanding
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under the MiniData Plan at the time of the Merger will remain
outstanding under the Plan in accordance with the terms of such
loan.
XXXII Vesting and Forfeitures.
XXXII 1 Vesting. (A) Each MiniData Participant at all
times has a fully vested nonforfeitable interest in his or her
MiniData Pre-Tax Account and MiniData Rollover Account.
(A) A MiniData Participant will acquire a fully vested
nonforfeitable interest in his or her MiniData Employer
Contribution Account upon attaining his or her Normal Retirement
Date while he or she is an Employee.
(B) A MiniData Participant will acquire a fully vested
nonforfeitable interest in his or her MiniData Employer
Contribution Account if he or she dies or becomes Disabled while
he or she is an Employee.
(C) A MiniData Participant whose employment terminates
on or after the date of the Merger but before his or her Normal
Retirement Date other than by reason of death or becoming
Disabled will acquire a vested nonforfeitable interest in his or
her MiniData Employer Contribution Account to the extent provided
in the following schedule:
Vested
Years of Service Interest
Less Than Two Years 0%
Two Years 40%
Three Years 60%
Four Years 80%
Five or More Years 100%
A MiniData Participant's "Years of Service" are the number of
years of service he or she had completed as of December 31, 1995
under the MiniData Plan and his or her years of Vesting Service
under the Plan after December 31, 1995.
(D) In no case will a MiniData Participant's vested
interest in his or her MiniData Employer Contribution Account be
less than his or her vested interest immediately prior to the
Merger in the portion of his MiniData Plan account attributable
to matching and discretionary employer contributions.
XXXII 2 Forfeitures.
(A) If a MiniData Participant terminates employment on
or after the date of the Merger with less than a fully vested
interest in his or her MiniData Employer Contribution Account
balance, the provisions of Sections 7.2, 7.3 and 7.4 of the Plan
will apply to such Account.
(B) If a MiniData Participant terminated employment before
the date of the Merger with less than a fully vested interest in
the portion of his or her MiniData Account attributable to
matching and discretionary employer contributions and such
nonvested portion was not forfeited before the date of the
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Merger, the provisions of Section 7.2, 7.3 and 7.4 of the Plan
will apply to his or her MiniData Employer Contribution Account.
(C) If a former participant in the MiniData Plan who
terminated employment before the date of the Merger with less
than a fully vested interest in the balance of his or her account
attributable to matching or discretionary employer contributions
under the MiniData Plan becomes a Qualified Employee before
experiencing a Break in Service of five full years, the forfeited
portion of such account will be restored in accordance with
Section 7.2(B) of the Plan. The restoration will be made to the
MiniData Participant's MiniData Employer Contribution Account and
his or her vested interest in such MiniData Employer Contribution
Account will be determined in accordance with Section 4.1 of this
exhibit subject to appropriate adjustment in accordance with
Section 7.3(B) of the Plan.
XXXIII Time and Form of Distribution. (A) Following a
MiniData Participant's termination of employment or earlier
attainment of age 70-1/2, the Trustee will distribute to the
MiniData Participant or, if the MiniData Participant has died, to
his or her Beneficiary, the aggregate vested balance of the
Participant's MiniData Accounts. Subject to the remaining
subsections of this section and Section 8.8 of the Plan,
distribution of a MiniData Participant's MiniData Accounts will
be made in accordance with the following provisions
(1) If the aggregate vested balance of the MiniData
Participant's MiniData and other Accounts at the time of the
distribution is not more than $3500, distribution to the
MiniData Participant of the vested balance of his or her
MiniData Accounts, or distribution of such vested MiniData
Account balances to the MiniData Participant's Beneficiary
in the case of his or her death, will be made in accordance
with Section 8.1(A)(1) of the Plan. This clause will not
apply, however, if the aggregate vested balance of the
MiniData Participant's MiniData and other Accounts exceeded
$3500 at the time of any previous distribution to the
Participant.
(2) If clause (1) does not apply and the aggregate
vested balance of the MiniData Participant's MiniData
Accounts at the time of the distribution is not more than
$3500, distribution will be made in accordance with Section
8.1(A)(1) of the Plan.
(3) If clauses (1) and (2) do not apply, distribution
to the MiniData Participant will be made in the form of a
lump sum or installment payments as elected by the MiniData
Participant on a form provided by the Administrator. The
distribution will be made or commence as soon as
administratively practicable after the Administrator's
receipt from the MiniData Participant of a complete and
accurate written distribution request on a form provided by
the Administrator; provided, that the distribution must be
made or commence not later than the date specified in
Section 8.1 (B) of the Plan.
(4) Subject to clause (1) above, any distribution to
the MiniData Participant's Beneficiary will be made in the
form elected by the Beneficiary pursuant to Subsection (C).
The distribution will be made or commence as soon as
administratively practicable after the Administrator's
receipt from the Beneficiary of a complete and accurate
written distribution request on a form provided by the
Administrator and in no case later than the latest date
required pursuant to Subsection (C).
(5) All distributions will be made by delivery of a
check drawn on the Trust.
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(6) The value of a MiniData Participant's MiniData
Accounts will be determined in accordance with Section 8.1
of the Plan.
(B) (1) If a MiniData Participant described in Subsection
(A)(3) elects to receive his or her distribution in the form
of installment payments, such installments will be
substantially equal in amount and will be made on a monthly,
quarterly, semi-annual or annual basis for a period certain
not extending beyond either the Participant's life
expectancy or the life expectancy of the Participant and his
or her Beneficiary calculated in either case based on the
attained age of the Participant or Participant and
Beneficiary, as the case may be, in the calendar year during
which the distribution begins in accordance with Table V or
VI of Treasury Regulation section 1.72-9, as the case may
be, with no subsequent recalculation.
(1) If the Participant's Beneficiary is not his or her
spouse, the period over which payments pursuant to clause
(1) are to be made will be determined by reference to the
applicable factor set forth in Treasury Regulation section
1.401(a)(9)-2.
(C) Subject to Subsection (A)(1), if a MiniData Participant
dies before receiving the full amount of his or her vested
MiniData Account balances, the remaining vested amount will be
distributed to the MiniData Participant's Beneficiary in a lump
sum or installment payments, as elected by the Beneficiary,
subject, however to the following rules:
(1) If the MiniData Participant dies after April 1 of
the calendar year following the calendar year during which
he or she attains age 70-1/2, distribution will be made to
the Beneficiary at a rate that would result in the benefit
being distributed at least as rapidly as if distribution
were made at the same rate as was in effect immediately
prior to the Participant's death or over a period of five
years from the date of the Participant's death, whichever is
shorter;
(2) If the MiniData Participant dies before April 1 of
the calendar year following the calendar year during which
he or she attains age 70-1/2, distribution will, at the
Beneficiary's election, be made -
(a) in a lump sum payment no later than
December 31 of the calendar year which contains the
fifth anniversary of the date of the MiniData
Participant's death, or
(b) in installments, commencing no later than
December 31 of the calendar year immediately following
the calendar year in which the MiniData Participant
died and being paid over a period not exceeding the
Beneficiary's remaining life expectancy, (as determined
on the basis of the Beneficiary's age as of the date on
which payments are required to commence under this
clause (2)) or five years, whichever is shorter.
(D) Notwithstanding any other provision of this
exhibit to the contrary, distributions will be made in
accordance with regulations issued under Code section
401(a)(9), including Treasury Regulation section 1.401(a)(9)-
2, and any provisions of the Plan reflecting Code section
401(a)(9) takes precedence over any distribution options in
this exhibit that are inconsistent with Code section
401(a)(9).
XXXIV Prior Actions. Elections, designations, waivers,
consents and similar actions made pursuant to the MiniData Plan
prior to the Merger and in effect as of the date of the Merger
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will remain in effect for purposes of the Plan until revoked or
withdrawn or otherwise made void pursuant to the terms of the
Plan.
D-5
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EXHIBIT E
Special Rules Applicable to Certain Former Participants
in the Tesseract Corporation 401(k) Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the Tesseract Corporation 401(k)
Plan (the "Tesseract Plan") were transferred to the Trust in
connection with the merger of the Tesseract Plan with and into
the Plan effective as of February 29, 1996 (the "Merger"). For
purposes of this exhibit, such a Participant is referred to as a
"Tesseract Participant."
XXXV Accounts. The balance of a Tesseract Participant's accounts
under the Tesseract Plan will be transferred to Accounts under
the Plan as follows:
(a) The balance of the Tesseract Participant's "employee
deferral account" under the Tesseract Plan, if any, will be
transferred to his or her Pre-Tax Account;
(b) The balance of the Tesseract Participant's "employer
matching contributions account" under the Tesseract Plan, if any,
will be transferred to a Tesseract Matching Account established
and maintained on his or her behalf; and
(c) The balance of the Tesseract Participant's "rollover
contributions account" under the Tesseract Plan, if any, will be
transferred to his or her General Rollover Account.
XXXVINo In-Service Withdrawals. A Tesseract Participant is not
eligible to receive distributions from his or her Tesseract
Matching Account while he or she is an Employee.
XXXVII No Loans. A Tesseract Participant is not eligible to
borrow from his or her Tesseract Matching Account.
XXXVIII Vesting and Forfeitures.
XXXVIII 1 Vesting. (A) A Tesseract Participant will
acquire a fully vested nonforfeitable interest in his or her
Tesseract Matching Account upon attaining his or her Normal
Retirement Date while he or she is an Employee.
(A) A Tesseract Participant will acquire a fully
vested nonforfeitable interest in his or her Tesseract
Matching Account if he or she dies or becomes Disabled while
he or she is an Employee.
(B) A Tesseract Participant whose employment
terminates prior to his or her Normal Retirement Date other
than by reason of death or becoming Disabled will acquire a
vested nonforfeitable interest in his or her Tesseract
Matching Account to the extent provided the following
schedule:
Vested
Years of Service Interest
Less Than One Year 0%
One Year 25%
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Two Years 50%
Three Years 75%
Four or More Years 100%
A Tesseract Participant's "Years of Service" are the number of
years of service he or she had completed as of December 31, 1995
under the Tesseract Plan and his or her years of Vesting Service
under the Plan after December 31, 1995.
(C) In no case will a Tesseract Participant's vested
interest in his or her Tesseract Matching Account be less than
his or her vested interest immediately prior to the Merger in his
or her employer matching contributions account under the
Tesseract Plan.
XXXVIII 2 Forfeitures.
(A) If a Tesseract Participant terminates employment on or
after the date of the Merger with less than a fully vested
interest in his or her Tesseract Matching Account balance, the
provisions of Sections 7.2, 7.3 and 7.4 of the Plan will apply to
such Account.
(B) If a former participant in the Tesseract Plan who
terminated employment before the date of the Merger with less
than a fully vested interest in his or her employer matching
contributions account under the Tesseract Plan becomes a
Qualified Employee before experiencing a Break in Service of five
full years, there will be restored to the Tesseract Participant's
Tesseract Matching Account an amount equal to the amount that
would have been the balance in such Account if the forfeiture had
not occurred and the Account had remained invested in the
investment funds in which the Tesseract Plan account was invested
immediately prior to the forfeiture (or the most comparable fund,
as determined by the Administrator, if the original fund has been
eliminated). The restoration will be made from forfeitures that
arise for the Plan Year for which the restoration is made. To
the extent such forfeitures are insufficient for such purpose,
the Participating Employer will contribute the amount required to
restore the Account. The Tesseract Participant's vested interest
in such Tesseract Matching Account will be determined in
accordance with Section 4.1 of this exhibit subject to
appropriate adjustment in accordance with Section 7.3(B) of the
Plan.
XXXIX Prior Actions. Elections, designations, waivers, consents
and similar actions made pursuant to the Tesseract Plan prior to
the Merger and in effect as of the date of the Merger will remain
in effect for purposes of the Plan until revoked, withdrawn or
otherwise made void pursuant to the terms of the Plan.
E-2
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EXHIBIT F
Special Rules Applicable to Certain Former Participants
in the Systems Tax Services, Inc.
Employee Savings and Retirement Plan
This exhibit sets forth special rules applicable to Participants
whose account balances under the Systems Tax Services, Inc.
Employee Savings and Retirement Plan (the "STS Plan") were
transferred to the Trust in connection with the merger of the STS
Plan with and into the Plan effective as of December 31, 1995
(the "Merger"). For purposes of this exhibit, such a Participant
is referred to as an "STS Participant."
XL Accounts. For each STS Participant, the following Accounts will be
established and maintained:
(a) An STS Pre-Tax Account to evidence the balance of his or her
deferral contributions account, if any, under the STS Plan transferred to
the Trust in connection with the Merger;
(b) An STS Employer Contribution Account to evidence the balance of
his or her matching contributions account and employer contributions
account, if any, under the STS Plan transferred to the Trust in
connection with the Merger; and
(c) An STS Rollover Account to evidence the balance of his or her
rollover contribution account, if any, under the STS Plan transferred to
the Trust in connection with the Merger.
Such Accounts are sometimes collectively referred to in this exhibit as
"STS Accounts."
XLI In-Service Withdrawals. (A) An STS Participant who is an Employee
may make hardship withdrawals in accordance with the provisions of
Section 6.1 of the Plan from the portion of his or her STS Pre-Tax
Account consisting of deferral contributions to his or her deferral
contributions account under the STS Plan.
(A) An STS Participant who is an Employee may make withdrawals
from his or her STS Pre-Tax Account, and his or her STS Employer
Contribution Account if it is 100 percent vested at the time of the
withdrawal, in accordance with the provisions of Section 6.2 of the Plan.
(B) An STS Participant who is an Employee may withdraw all or
any portion of the balance of his or her STS Rollover Account.
(C) All withdrawals from STS Accounts pursuant to this section
are subject to the provisions of Section 6.4 of the Plan except that
notwithstanding Section 6.4(D), distributions may be made in kind if
elected by the Participant and if such distribution is otherwise
permissible. In addition, no withdrawal may be made from any STS Account
unless, during the 90-day period ending on the date of the withdrawal,
the STS Participant's spouse consents to the withdrawal.
XLII Loans. An STS Participant may borrow funds from his or her STS Pre-
Tax Account and STS Rollover Account in accordance with Section 6.5 of
the Plan. No loan will be made to an STS Participant from an STS Pre-Tax
Account or STS Rollover Account unless, during the 90-day period ending
on the date of the loan, the STS Participant's spouse consents to the
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loan. Any loan outstanding under the STS Plan at the time of the Merger
will remain outstanding under the Plan in accordance with the terms of
such loan.
XLIII Vesting and Forfeitures.
XLIII 1 Vesting. (A) Each STS Participant at all times has a
fully vested nonforfeitable interest in his or her STS Pre-Tax Account
and STS Rollover Account.
(A) An STS Participant will acquire a fully vested nonforfeitable
interest in his or her STS Employer Contribution Account upon attaining
his or her Normal Retirement Date while he or she is an Employee.
(B) An STS Participant will acquire a fully vested
nonforfeitable interest in his or her STS Employer Contribution Account
if he or she dies or becomes Disabled while he or she is an Employee.
(C) An STS Participant whose employment terminates on or after
the date of the Merger but before his or her Normal Retirement Date other
than by reason of death or becoming Disabled will acquire a vested
nonforfeitable interest in his or her STS Employer Contribution Account
to the extent provided in the following schedule:
Vested
Years of Service Interest
Less Than One Year 0%
One Year 20%
Two Years 40%
Three Years 60%
Four Years 80%
Five or More Years 100%
An STS Participant's "Years of Service" are the number of years of
service he or she had completed as of December 31, 1995 under the STS
Plan and his or her years of Vesting Service under the Plan after
December 31, 1995.
(D) In no case will an STS Participant's vested interest in his or
her STS Employer Contribution Account be less than his or her vested
interest immediately prior to the Merger in his or her matching
contributions account and employer contributions account under the STS
Plan.
XLIII 2 Forfeitures.
(A) If an STS Participant terminates employment on or after the
date of the Merger with less than a fully vested interest in his or her
STS Employer Contribution Account balance, the provisions of
Sections 7.2, 7.3 and 7.4 of the Plan will apply to such Account.
(B) If an STS Participant terminated employment before
the date of the Merger with less than a fully vested interest in his or
her matching contributions account and employer contributions account
under the STS Plan and the nonvested portion of such accounts was not
forfeited before the date of the Merger, the provisions of Section 7.2,
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<PAGE>
7.3 and 7.4 of the Plan will apply to his or her STS Employer
Contribution Account.
(C) If a former participant in the STS Plan who terminated
employment before the date of the Merger with less than a fully vested
interest in the balance of his or her matching contributions account and
employer contributions account under the STS Plan becomes a Qualified
Employee before experiencing a Break in Service of five full years, the
forfeited portion of such accounts will be restored in accordance with
Section 7.2(B) of the Plan. The restoration will be made to the STS
Participant's STS Employer Contribution Account and his or her vested
interest in such STS Employer Contribution Account will be determined in
accordance with Section 4.1 of this exhibit subject to appropriate
adjustment in accordance with Section 7.3(B) of the Plan.
XLIV Time and Form of Distribution. (A) Following an STS Participant's
termination of employment or earlier attainment of age 70-1/2, the
Trustee will distribute to the STS Participant or, if the STS Participant
has died, to his or her Beneficiary, the aggregate vested balance of the
Participant's STS Accounts. Subject to the remaining subsections of this
section and Section 8.8 of the Plan, distribution of an STS Participant's
STS Accounts will be made in accordance with the following provisions
(1) If the aggregate vested balance of the STS Participant's
STS and other Accounts at the time of the distribution is not more
than $3500, distribution to the STS Participant of the vested
balance of his or her STS Accounts, or distribution of such vested
STS Account balances to the STS Participant's Beneficiary in the
case of his or her death, will be made in accordance with Section
8.1(A)(1) of the Plan. This clause will not apply, however, if the
aggregate vested balance of the STS Participant's STS and other
Accounts exceeded $3500 at the time of any previous distribution to
the Participant.
(2) If clause (1) does not apply and the aggregate vested
balance of the STS Participant's STS Accounts at the time of the
distribution is not more than $3500, distribution will be made in
accordance with Section 8.1(A)(1) of the Plan.
(3) If clauses (1) and (2) do not apply, distribution to the
STS Participant will be made in the form determined pursuant to
Subsection (C). The distribution will be made or commence as soon
as administratively practicable after the Administrator's receipt
from the STS Participant of a complete and accurate written
distribution request on a form provided by the Administrator;
provided, that the distribution must be made or commence not later
than the date specified in Section 8.1 (B) of the Plan unless the
STS Participant elects to defer the distribution in the manner
described in Subsection (B).
(4) Subject to clause (1) above and Subsection (C)(3), any
distribution to the STS Participant's Beneficiary will be made in
the form elected by the Beneficiary pursuant to Subsection (E). The
distribution will be made or commence as soon as administratively
practicable after the Administrator's receipt from the Beneficiary
of a complete and accurate written distribution request on a form
provided by the Administrator and in no case later than the latest
date required pursuant to Subsection (E).
(5) All distributions will be made by delivery of an annuity
contract or in the case of lump sum or installment payments, by
delivery of a check drawn on the Trust.
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(6) The value of an STS Participant's STS Accounts will be
determined in accordance with Section 8.1 of the Plan.
(7) Any annuity contract distributed pursuant to this section
will be a single premium, nonparticipating, nontransferable,
noncancellable, nonsurrenderable immediate annuity contract that
complies with all applicable requirements of the Plan. Distribution
of any annuity contract pursuant to the provisions of this exhibit
satisfies in full any claims that the STS Participant or his or her
spouse or Beneficiary may have under the Plan, and neither any
Affiliated Organization, the Trustee nor the Administrator is
responsible to any extent with respect to any payments to which the
STS Participant or his or her spouse or Beneficiary may be entitled
under such annuity contract.
(B) Subject to the provisions of the other subsections of this
section, a Participant described in Subsection (A)(3) may elect to defer
commencement of the distribution of his or her STS Accounts by providing
the Administrator a written, signed statement indicating in which of the
available forms the benefit will be paid and specifying the date on which
the payment is to be made or commence, provided such date may not be
later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2. Such deferral election must be
provided not later than the thirtieth day (or such later date as Plan
Rules may allow) after the close of the Plan Year during which there
occurs the later of the STS Participant's termination of employment or
Normal Retirement Date. Plan Rules may permit an STS Participant to
modify any such election in any manner determined by the Administrator to
be consistent with Code section 401(a)(14) and Treasury Regulations
thereunder and the other provisions of this section.
(C) (1) Unless an STS Participant described in Subsection (A)(3)
otherwise elects in accordance with the provisions of clause (2),
the Trustee will, with the vested balance of the Participant's STS
Accounts, purchase and distribute to the Participant an annuity
contract that provides for payments for the life of the STS
Participant if the STS Participant is not married on his or her
"annuity starting date," within the meaning of Code section
417(f)(2), or, if the STS Participant is then married, for payments
for the life of the Participant, with 50 percent of the amount of
such payments continuing after the Participant's death for the life
of such spouse.
(1) An STS Participant whose benefit would otherwise be paid
in the form of an annuity contract described in clause (1) may elect
to instead receive a lump sum payment, installment payments, a
combination of a lump sum payment and installment payments or an
annuity contract providing for payments in another form. The STS
Participant's election must be in writing, in form prescribed by the
Administrator; must be made within the 90-day period ending on the
STS Participant's annuity starting date; may be revoked and a new
election made any number of times during the election period; and
will not be effective unless the Participant's spouse consents to
the election.
(2) If an STS Participant dies prior to his or her annuity
starting date and is married on the date of his or her death, the
Administrator will, with the vested balance of the STS Participant's
STS Accounts, purchase and distribute to the STS Participant's
surviving spouse a nontransferable annuity contract that provides
payments to the surviving spouse for life, commencing at such time
not later than the date on which the STS Participant would have
attained age 70-1/2 as such spouse elects; provided, that this
clause (3) will not apply if -
F-4
<PAGE>
(a) the STS Participant's spouse elects, in a written,
signed statement delivered to the Administrator prior to the
purchase of the annuity contract, to receive the balance of the
STS Participant's STS Accounts in a lump sum payment,
installment payments or a period-certain annuity contract in
accordance with the provisions of Subsection (E), or
(b) the STS Participant elected, by a signed written
statement delivered to the Administrator within the period
commencing on the first day of the Plan Year in which he or she
attained age 35 and ending on the date of his or her death, to
waive the provisions of this clause (3), and the STS
Participant's spouse consented to such election; provided that
an STS Participant may, at any time and any number of times, by
signed written notice delivered to the Administrator during the
STS Participant's lifetime, revoke any election made under this
clause (b), and may make a new election following any such
revocation.
(3) The provisions of this Subsection (C) apply
notwithstanding and supersede any designation by a married STS
Participant of any primary Beneficiary other than his or her spouse
which designation is not made either in conjunction with an election
pursuant to clause (2) or (3)(b) of this Subsection (C), as the case
may be, or thereafter with the spouse's consent.
(D) (1) If an STS Participant described in Subsection (A)(3) elects
pursuant to Subsection (C)(2) to receive his or her distribution in
the form of installment payments, such installments will be
substantially equal in amount and will be made on a monthly,
quarterly, semi-annual or annual basis, for a period certain not
extending beyond either the Participant's life expectancy or the
life expectancy of the Participant and his or her Beneficiary
calculated in either case based on the attained age of the
Participant or Participant and Beneficiary, as the case may be, in
the calendar year during which the distribution begins in accordance
with Table V or VI of Treasury Regulation section 1.72-9, as the
case may be, with no subsequent recalculation and, if the
Participant's Beneficiary is not his or her spouse, in accordance
with the appropriate factor set forth in Treasury Regulation section
1.401(a)(9)-2, if applicable. A Participant with respect to whom
installment payments have commenced may elect to accelerate such
payments. Such election must be made on a form provided by the
Administrator.
(1) If an STS Participant described in Subsection (A)(3)
elects pursuant to Subsection (C)(2) to receive his or her
distribution in the form of an annuity contract providing for
payments in a form other than that described in Subsection (C)(1),
the Trustee will, with the vested balance of the STS Participant's
STS Accounts purchase and distribute to the STS Participant an
annuity contract pursuant to which payments are made over a period
not exceeding the period over which installment payments could be
made.
(E) Subject to Subsections (A)(1) and (C), if an STS Participant
dies before receiving the full amount of his or her vested STS Account
balances, the remaining vested amount will be distributed to the STS
Participant's Beneficiary at such time or times and in such manner as the
Beneficiary elects, subject, however to the following rules:
(1) If the STS Participant dies after April 1 of the calendar
year following the calendar year during which he or she attains age
70-1/2, distribution will be made to the Beneficiary at a rate that
would result in the benefit being distributed at least as rapidly as
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if distribution were made at the same rate as was in effect
immediately prior to the Participant's death;
(2) If the STS Participant dies before April 1 of the calendar
year following the calendar year during which he or she attains age
70-1/2, distribution will, at the Beneficiary's election, be made -
(a) in a lump sum payment no later than December 31 of
the calendar year which contains the fifth anniversary of the
date of the STS Participant's death,
(b) in installments, commencing no later than December 31
of the calendar year immediately following the calendar year in
which the STS Participant died (unless the Beneficiary is the
STS Participant's spouse, in which case payments must begin no
later than such date specified above or December 31 of the
calendar year in which the STS Participant would have attained
age 70-1/2 if he or she had lived), and being paid over a
period not exceeding the Beneficiary's remaining life
expectancy, (as determined on the basis of the Beneficiary's
age as of the date on which payments are required to commence
under this clause (2)) or any shorter period as the Beneficiary
may thereafter elect in accordance with Plan Rules, or
(c) in the form of an annuity contract pursuant to which
payments are made over a period certain not exceeding the
period over which installment payments could have been made.
A Beneficiary's election with respect to the time and manner in
which any amount remaining at the STS Participant's death will be
distributed must be made no later than the earlier of the dates set
forth in clause 2(a) and (b) above, and is irrevocable following
such date. If the Beneficiary fails to make an election under
clause (2), distribution will be made in the manner set forth at
clause (2)(a). If the STS Participant's spouse is the Beneficiary
and dies after the STS Participant's death but before distributions
to such spouse have commenced, the foregoing rules will be applied
as if the surviving spouse were the STS Participant, including the
substitution of the surviving spouse's date of death for the STS
Participant's date of death; provided, that the alternative
commencement date in clause (2)(b) relating to the date on which the
Participant would have attained age 70-1/2 had he or she lived will
not be available.
(F) Notwithstanding any other provision of this exhibit to the
contrary, distributions (including payments made under an annuity
contract) will be made in accordance with regulations issued under Code
section 401(a)(9), including Treasury Regulation section 1.401(a)(9)-2,
and any provisions of the Plan reflecting Code section 401(a)(9) takes
precedence over any distribution options in this exhibit that are
inconsistent with Code section 401(a)(9).
XLV Prior Actions. Elections, designations, waivers, consents and
similar actions made pursuant to the STS Plan prior to the Merger and in
effect as of the date of the Merger will remain in effect for purposes of
the Plan until revoked or withdrawn or otherwise made void pursuant to
the terms of the Plan.
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