As filed with the Securities and Exchange Commission on December 5, 1995
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------------
COMPUTER HORIZONS CORP.
and
COMPUTER HORIZONS CORP.
EMPLOYEE'S SAVINGS PLAN
-----------------------------------------------------
(Exact name of registrants as specified in its charter)
New York 13-2638902
- ---------------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
49 Old Bloomfield Avenue 07046
Mountain Lakes, New Jersey ------------------
- ---------------------------------------- (Zip Code)
(Address of Principal Executive Offices)
COMPUTER HORIZONS CORP.
EMPLOYEE'S SAVINGS PLAN
-----------------------------------------------------
(Full title of the plan)
Mr. John J. Cassese
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
-----------------------------------------------------
(Name and address of agent for service)
(201) 402-7400
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copies to:
Robert A. Cantone, Esq.
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
(212) 969-3000
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered (3) registered (1) offering price per share aggregate offering price (2) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 250,000 $32.8125 $8,205,125 $2,828.66
====================================================================================================================================
(1) Represents the maximum of number of shares of Common Stock that may be
acquired by the Trustee under the Computer Horizons Corp. Employee's
Savings Plan during the remainder of 1995 and subsequent years until a new
registration statement becomes effective.
(2) Estimated solely for purposes of calculating the registration fee and
computed in accordance with Securities Act Rule 457(c) using the average of
the high and low prices of the Common Stock reported on the National Market
System of the National Association of Securities Dealers, Inc. Automated
Quotation System on November 28, 1995.
(3) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
Registration Statement also registers an indeterminate amount of plan
interests to be offered pursuant to the Computer Horizons Corp. Employee's
Savings Plan.
====================================================================================================================================
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
The Section 10(a) prospectus for the Computer Horizons Corp. Employee's
Savings Plan (the "Plan") is not being filed with the Securities and Exchange
Commission as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation Of Documents By Reference.
The documents listed below are hereby incorporated into this
Registration Statement:
1. Computer Horizon Corp.'s (the "Company") Annual Report on Form 10-K
for the year ended December 31, 1994;
2 The Company's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1995;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 28, 1995;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 27, 1995; and
5. The description of the Company's Common Stock, par value $.10 (the
"Common Stock"), and Series A Preferred Stock Purchase Rights contained in the
Company's Current Report on Form 8-K, as amended, dated November 27, 1995.
All documents subsequently filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which registers
all securities offered hereby then remaining unsold, are deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation") provides, as permitted by Section 402(b) of the
New York Business Corporation Law (the "BCL") that no director shall be
personally liable to the Company or any shareholder for damages for any breach
of duty as a director, provided that the Certificate of Incorporation does not
eliminate or limit the liability of any director if a judgment or other final
adjudication adverse to him establishes that (i) his acts or omissions were in
bad faith or involved intentional misconduct or a knowing violation of law, (ii)
he personally gained in fact a financial profit or other advantage to which he
was not legally entitled or (iii) his acts violated Section 719 of the BCL.
The Certificate of Incorporation also provides, in accordance with
Section 722 of the BCL, that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, (1) is or was a director or officer of the
Company or (2) is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans (whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent), shall be
indemnified and held harmless by the Company to the fullest extent authorized or
permitted by applicable law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgements, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) actually and
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his heirs,
executors and administrators, provided, however, that, except for actions
brought to enforce such indemnification rights, the Company shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The right to
indemnification conferred in the Certificate of Incorporation is a contract
right and includes the rights to be paid by the Company the expenses incurred in
defending any such proceeding in advance of its final disposition, provided,
however, that, if the BCL requires, the payment of such expenses incurred by a
director or officer in his capacity as such (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service with respect to an employee benefit plan)
in advance of the final disposition of a proceeding, shall be made only upon
delivery to the Company of an undertaking by or on behalf of such director or
officer to repay all amounts so advanced as to which it shall ultimately be
determined that such director or officer is not entitled to be indemnified.
The Certificate of Incorporation further provides, in accordance with
the BCL, that the indemnification rights provided therein are not exclusive of
any other rights that any person may have, and that the Company may, subject to
certain restrictions imposed by the BCL, maintain insurance to protect itself
and its officers and directors against expenses, liabilities and losses, whether
or not the Company would be permitted to indemnify such person against such
expenses, liabilities and losses under the BCL.
The Company currently has a $5,000,000 directors' and officers'
liability insurance policy.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
<PAGE>
ITEM 8. EXHIBITS.
The following instruments and documents are included as exhibits to
this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Description Incorporated by Reference to:
- ------------- -------------------------------------------------------- ---------------------------------------------------
<S> <C> <C>
4.1 Rights Agreement dated as of July 6, 1989 Exhibit 1 to the Company's Registration
between the Company and Chemical Bank, as Statement on Form 8-A dated July 7, 1989.
Rights Agent ("Rights Agreement") which
includes the form of Rights Certificate as Exhibit B.
4.2 Amendment No. 1 dated as of February 13, Exhibit 1 to the Company's Amendment
1990 to Rights Agreement. No. 1 on Form 8 dated February 13, 1990
to the Company's Registration Statement
on Form 8-A.
4.3 Amendment No. 2 dated as of August 10, 1994 Exhibit 4(c) to the Company's Annual
to Rights Agreement. Report on Form 10-K for the year ended
December 31, 1994.
4.4 Computer Horizons Corp. Employee's Savings
Plan and Amendment Number One.
4.5 Computer Horizons Corp. Employee's Savings
Plan Trust Agreement as Amended and
Restated Effective January 1, 1996.
5.1 Opinion of Proskauer Rose Goetz &
Mendelsohn LLP.
5.2 Internal Revenue Service determination letter
with respect to the Plan.1
23.1 Consent of Proskauer Rose Goetz &
Mendelsohn LLP. (included in their opinion
filed as Exhibit 5).
23.2 Consent of Grant Thornton LLP.
24 Power of Attorney (included on the Signature
Pages to this Registration Statement).
</TABLE>
- ---------------------
(1) The Registrants undertake to submit the Plan as amended by Amendment Number
One to the Internal Revenue Service (the "IRS") in a timely manner and to
make all changes required by the IRS in order to qualify the Plan as so
amended.
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrants hereby undertake:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registra-tion statement (or the most recent
post-effective amendment thereof) which individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) (ss. 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) to include any material information with respect to the plan
of distribution not previously dis-closed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs 1(i) and 1(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrants pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of an
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993, the
Computer Horizons Corp. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mountain Lakes, State of New Jersey, on November
30, 1995.
COMPUTER HORIZONS CORP.
By: /s/ JOHN J. CASSESE
-----------------------------------
John J. Cassese
Chairman of the Board and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints John J. Cassese and Bernhard
Hubert, and either of them, his attorney-in-fact, with full power of
substitution, for him in all capacities, to execute any amendments (including
post-effective amendments) to this Registration Statement and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or either of them, or their substitutes, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on November 30, 1995.
/s/ JOHN J. CASSESE Chairman of the Board and President
------------------------- (Principal Executive Officer)
John J. Cassese
/s/ BERNHARD HUBERT Executive Vice President,
------------------------- Chief Financial Officer and Director
Bernhard Hubert (Principal Financial Officer)
/s/ MICHAEL J. SHEA Chief Accounting Officer and Controller
------------------------- (Principal Accounting Officer)
Michael J. Shea
/s/ THOMAS J. BERRY Director
-------------------------
Thomas J. Berry
/s/ ROCCO MARANO Director
-------------------------
Rocco Marano
/s/ WILFRED R. PLUGGE Director
-------------------------
Wilfred R. Plugge
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
Computer Horizons Corp., as the Plan Administrator of the Computer Horizons
Corp. Employee's Savings Plan, has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Mountain Lakes, State of New Jersey, on November 30, 1995.
COMPUTER HORIZONS CORP.
EMPLOYEE'S SAVINGS PLAN
By Computer Horizon Corp.
By /s/ JOHN J. CASSESE
-----------------------------------
John J. Cassese
Chairman of the Board and President
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit
Number Description Incorporated by Reference to:
- ------------- -------------------------------------------------------- ---------------------------------------------------
<S> <C> <C>
4.1 Rights Agreement dated as of July 6, 1989 Exhibit 1 to the Company's Registration
between the Company and Chemical Bank, as Statement on Form 8-A dated July 7,
Rights Agent ("Rights Agreement") which 1989.
includes the form of Rights Certificate as
Exhibit B.
4.2 Amendment No. 1 dated as of February 13, Exhibit 1 to the Company's Amendment
1990 to Rights Agreement. No. 1 on Form 8 dated February 13, 1990
to the Company's Registration Statement
on Form 8-A.
4.3 Amendment No. 2 dated as of August 10, Exhibit 4(c) to the Company's Annual
1994 to Rights Agreement. Report on Form 10-K for the year ended
December 31, 1994.
4.4 The Computer Horizons Corp. Employee's
Savings Plan and Amendment Number One.
4.5 Computer Horizons Corp. Employee's Savings
Plan Trust Agreement as Amended and
Restated Effective January 1, 1996.
5.1 Opinion of Proskauer Rose Goetz &
Mendelsohn LLP.
5.2 Internal Revenue Service Determination letter
with report to the Plan.
23.1 Consent of Proskauer Rose Goetz &
Mendelsohn LLP. (included in their opinion
filed as Exhibit 5.1).
23.2 Consent of Grant Thornton LLP.
24 Power of Attorney (included on the Signature
Pages to this Registration Statement).
</TABLE>
EXHIBIT 4.4
COMPUTER HORIZONS CORP.
EMPLOYEE'S SAVINGS PLAN
Effective April 1, 1983
Amended and Restated January 1, 1994
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS
(a) "ACCOUNT"
(b) "ADMINISTRATIVE COMMITTEE" or "COMMITTEE"
(c) "ADMINISTRATOR" or "PLAN ADMINISTRATOR"
(d) "ANNUAL ADDITIONS"
(e) "BOARD OF DIRECTORS"
(f) "BREAK IN SERVICE"
(g) "CODE"
(h) "COMPANY"
(i) "COMPENSATION"
(j) "DISABILITY"
(k) "EFFECTIVE DATE"
(l) "EMPLOYEE"
(m) "ENTRY DATE"
(n) "ERISA"
(o) "FAMILY MEMBER"
(p) "FIDUCIARY"
(q) "FUND"
(r) "HIGHLY COMPENSATED EMPLOYEE"
(s) "HOUR OF SERVICE"
(t) "INVESTMENT CATEGORY"
(u) "INVESTMENT MANAGER"
(v) "LIMITATION YEAR"
(w) "MEMBER"
(x) "NORMAL RETIREMENT DATE"
(y) "PARTICIPATING COMPANY"
(z) "PLAN"
(aa) "PLAN YEAR"
(bb) "RELATED ENTITY
(cc) "TRUST AGREEMENT"
(dd) "TRUSTEE"
(ee) "VALUATION DATE"
(ff) "YEAR OF SERVICE"
<PAGE>
2. ADMINISTRATION OF THE PLAN
(a) ERISA REPORTING AND DISCLOSURE BY ADMINISTRATOR
(b) COMMITTEE
(c) MULTIPLE CAPACITIES
(d) COMMITTEE POWERS
(e) ALLOCATION OF FIDUCIARY RESPONSIBILITY
(f) CLAIMS
(g) FIDUCIARY COMPENSATION
(h) PLAN EXPENSES
(i) FIDUCIARY INSURANCE
(j) INDEMNIFICATION
3. PARTICIPATION IN THE PLAN
(a) INITIAL ELIGIBILITY
(b) INELIGIBLE EMPLOYEES
(c) MEASURING SERVICE
(d) COMMENCEMENT OF PARTICIPATION
(e) TERMINATION AND REQUALIFICATION
(f) TERMINATION OF MEMBERSHIP
4. CONTRIBUTIONS
(a) SALARY DEFERRAL CONTRIBUTIONS
(b) SALARY DEFERRAL CONTRIBUTION LIMITATIONS
(c) SALARY DEFERRAL ACCOUNT
(d) COMPLIANCE WITH SALARY DEFERRAL DISCRIMINATION TEST
(e) PARTICIPATING COMPANY CONTRIBUTIONS
(f) EMPLOYER CONTRIBUTION ACCOUNT
(g) COMPLIANCE WITH PARTICIPATING COMPANY MATCHING
CONTRIBUTIONS DISCRIMINATION TESTS
(h) ROLLOVERS
(i) ROLLOVER ACCOUNT
(j) "FAILSAFE" CONTRIBUTIONS
(k) PAYROLL TAXES
5. MAXIMUM CONTRIBUTIONS AND BENEFITS
(a) DEFINED CONTRIBUTION LIMITATION
(b) COMBINED LIMITATION
(c) COMBINED LIMITATION COMPUTATION
(d) DEFINITION OF "COMPENSATION" FOR CODE LIMITATIONS
6. ADMINISTRATION OF FUNDS
(a) INVESTMENT CONTROL
(b) MEMBER ELECTIONS
(c) NO MEMBER ELECTION
(d) FACILITATION
(e) VALUATIONS
(f) PROVISIONS OPTIONAL
(g) ALLOCATION OF GAIN OR LOSS
(h) BOOKKEEPING
<PAGE>
7. BENEFICIARIES AND DEATH BENEFITS
(a) DESIGNATION OF BENEFICIARY
(b) BENEFICIARY PRIORITY LIST
8. BENEFITS FOR MEMBERS
(a) RETIREMENT BENEFIT
(b) DEATH BENEFIT
(c) DISABILITY BENEFIT
(d) TERMINATION OF EMPLOYMENT BENEFIT
(e) RECOGNITION OF FORFEITURES
9. DISTRIBUTION OF BENEFITS
(a) COMMENCEMENT
(b) BENEFIT FORMS
(c) DEFERRED PAYMENTS AND INSTALLMENTS
(d) ANNUITY PURCHASE
(e) REQUIRED BENEFIT FORM
(f) LUMP SUM DISTRIBUTIONS
(g) WITHHOLDING
10. IN-SERVICE DISTRIBUTIONS
(a) AGE 59-1/2
(b) HARDSHIP
(c) NEED
(d) SATISFACTION OF NEED
(e) LIMITATIONS
(f) AT ANY TIME
(g) SPOUSAL CONSENT
11. LOANS
(a) COMMITTEE DISCRETION
(b) MINIMUM REQUIREMENTS
(c) ACCOUNTING
(d) SPOUSAL CONSENT
12. TITLE TO ASSETS
13. AMENDMENT AND TERMINATION
(a) AMENDMENT
(b) TERMINATION
(c) CONDUCT ON TERMINATION
<PAGE>
14. LIMITATION OF RIGHTS
(a) ALIENATION
(b) QUALIFIED DOMESTIC RELATIONS ORDER EXCEPTION
(c) EMPLOYMENT
15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
16. PARTICIPATION BY RELATED ENTITIES
(a) COMMENCEMENT
(b) TERMINATION
(c) SINGLE PLAN
(d) DELEGATION OF AUTHORITY
(e) DISPOSITION OF ASSETS OR SUBSIDIARY
(f) FORM OF DISTRIBUTIONS
17. TOP-HEAVY REQUIREMENTS
(a) GENERAL RULE
(b) DEFINITIONS
(c) COMBINED BENEFIT LIMITATION
(d) VESTING
(e) MINIMUM CONTRIBUTION
18. MISCELLANEOUS
(a) INCAPACITY
(b) REVERSIONS
(c) EMPLOYEE DATA
(d) LAW GOVERNING
(e) PRONOUNS
(f) INTERPRETATION
APPENDIX A - TRA '86 COMPLIANCE EFFECTIVE DATES
<PAGE>
COMPUTER HORIZONS CORP,
EMPLOYEE'S SAVINGS PLAN
Computer Horizons Corp., a corporation with principal offices
in the State of New Jersey, established the Computer Horizons Corp. Employee's
Savings Plan to provide benefits to those of its Employees and the Employees of
its affiliates who were eligible to participate as provided therein effective
April 1, 1983. The Plan was amended and restated effective January 1, 1990 to
comply with the Tax Reform Act of 1986 and subsequent legislation.
Computer Horizons Corp. hereby again amends and completely
restates the Plan effective January 1, 1994, to incorporate additional
provisions of the Tax Reform Act of 1986, subsequent legislation and extensive
Internal Revenue Service Regulations. The amended and restated Plan is effective
subject to receipt of an Internal Revenue Service determination that the Plan as
amended and restated meets all applicable requirements of Section 401(g) of the
Code (as defined in subsection l(a)), that employer contributions thereto remain
deductible under Section 404 of the Code and that the fund maintained with
respect thereto is tax exempt under Section 501(a) of the Code.
<PAGE>
1. DEFINITIONS
(a) "ACCOUNT" shall mean on any date of determination the
value of a Member's share of the Fund.
(i) "SALARY DEFERRAL ACCOUNT" shall mean the portion
of the Member's Account derived from Participating Company
contributions under subsection 4(a)
(ii) "ROLLOVER ACCOUNT" shall mean the portion of the
Member's Account derived from amounts transferred to the Fund under
subsection 4(h).
(iii) "EMPLOYER CONTRIBUTION ACCOUNT" shall mean the
portion of the Member's Account derived from Participating Company
contributions under subsection 4(e).
(b) "ADMINISTRATIVE COMMITTEE" or "COMMITTEE" shall mean the
individual or group of individuals designated pursuant to subsection 2(b) to
control and manage the operation and administration of the Plan to the extent
set forth herein.
(c) "ADMINISTRATOR" or "PLAN ADMINISTRATOR" shall mean the
Company.
(d) "ANNUAL ADDITIONS" shall mean the sum for any Limitation
Year of (i) employer contributions, (ii) employee contributions, (iii)
forfeitures and (iv) amounts described in Sections 415(l)(1) and 419A(d)(2) of
the Code, which are allocated to the account of a Member under the terms of a
plan subject to Section 415 of the Code. "Annual Additions" shall include excess
contributions as defined in Section 401(k)(8)(B) of the Code, excess aggregate
contributions as defined in Section 401(m)(6)(B) of the Code and excess
deferrals as described in Section 402(g) of the Code, regardless of whether such
amounts are distributed or forfeited. "Annual Additions" shall not include
contributions made under subsection 4(h).
(e) "BOARD OF DIRECTORS" shall mean the Board of Directors of
the Company.
(f) "BREAK IN SERVICE" shall mean a consecutive twelve-month
computation period specified in the Plan in which an Employee is credited with
not more than 500 Hours of Service.
(g) "CODE" shall mean the Internal Revenue Code of 1986, and
the same as may be amended from time to time.
(h) "COMPANY" shall mean Computer Horizons Corp., a
corporation with principal offices in the State of New Jersey.
(i) "COMPENSATION" shall mean the total cash remuneration for
services paid to an Employee by a Participating Company in a Plan Year,
excluding bonuses, living allowances and travel allowances, plus any amounts
allocated to an Employee's Salary Deferral Account in accordance with his
election authorizing that amounts be withheld from his remuneration and be
credited thereto and any contribution to a plan under Section 125 of the Code.
In addition to other limitations which may be set forth in the Plan and
notwithstanding any other contrary provision of the Plan, compensation taken
into account under the Plan shall not exceed $200,000, adjusted for changes in
the cost of living after the 1989 Plan Year as provided in Section 415(d) of the
Code. In determining the compensation of an Employee for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Employee and any lineal descendants of the Employee who have not attained age 19
before the close of the year.
In addition to other applicable limitations set forth
in the Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the "OBRA '93 annual compensation limit." The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Internal Revenue Code. The cost
of living adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined ("determination
period") beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Section 401(a)(17) of the
Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If Compensation for any prior determination period is
taken into account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
(j) "DISABILITY" shall mean a medically determinable physical
or mental impairment of a permanent nature which prevents a Member from
performing his customary employment duties without endangering his health.
(k) "EFFECTIVE DATE" of this amendment and restatement shall
mean January 1, 1994. The original Effective Date of this Plan shall mean April
1, 1983. The Plan was previously amended and restated effective January 1, 1990.
(l) "EMPLOYEE" shall mean each and every person employed by a
Participating Company or a Related Entity. The term "Employee" shall also
include a person who is a "leased employee" with respect to the Company or
Related Entity. No person who is a "leased employee" shall be eligible to
participate in this Plan. "Leased employee" shall mean any person who is not an
Employee but who provides services to the Company or Related Entity if:
(i) such services are provided pursuant to an
agreement between the Company or Related Entity and any
leasing organization;
(ii) such person has performed services for the
Company or Related Entity (or for the Company or Related
Entity and any related person within the meaning of Section
414(n)(6) of the (Code) on a substantially full-time basis for
a period of at least one (1) year; and
(iii) the services are of a type historically
performed by employees in the business field of the Company or
Related Entity.
A "leased employee" shall be treated as an Employee
of the Company or Related Entity; however, contributions or benefits provided by
the leasing organization which are attributable to services performed for the
Company or Related Entity shall be treated as provided by the Company or Related
Entity. A "leased employee" shall not be treated as an Employee if such "leased
employee" is covered by a money purchase pension plan of the leasing
organization, and the number of leased employees does not constitute more than
twenty percent (20%) of the Company or Related Entity's Non-Highly Compensated
work force as defined by Section 414(n)(5)(C) of the Code. The money purchase
pension plan of the leasing organization must provide benefits equal to or
greater than: (1) a non-integrated employer contribution rate of at least ten
percent (10%) of compensation, (2) immediate participation, and (3) full and
immediate vesting.
(m) "ENTRY DATE" shall mean the first day of each Plan Year
and the first day of each month during the Plan Year; however, any member who
does not elect to participate on his initial Entry Date, thereafter, Entry Date
shall mean approximately January 1st, April 1st and October 1st of each Plan
Year.
(n) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, and the same as may be amended from time to time.
(o) "FAMILY MEMBER" as defined in Code Section 414(q)(6)(B)
shall mean the spouse, lineal ascendants and descendants and the spouses of such
lineal ascendants or descendants, of either a 5% owner of the Employer as
defined in Section 416(i) of the Code, or one of the top ten paid Employees of
the Employer.
(p) "FIDUCIARY" shall mean a person who, with respect to the
Plan, (i) exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority or control with
respect to management or disposition of the Plan's assets, (ii) renders
investment advice for a fee or other compensation, direct or indirect, with
respect to any monies or other property of the Plan, or has any authority or
responsibility to do so, or (iii) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
(q) "FUND" shall mean the assets of the Plan. All Investment
Categories shall be part of the Fund.
(r) "HIGHLY COMPENSATED EMPLOYEE" includes Highly Compensated
active Employees and Highly Compensated former Employees.
A Highly Compensated active Employee includes any Employee who
performs service for the Employer during the determination year and who, during
the look-back year:
(i) received Compensation from the Employer in excess
of $99,000 (as adjusted pursuant to Section 415(d) of the
Code);
(ii) received Compensation from the Employer in
excess of $66,000 (as adjusted pursuant to Section 415(d) of
the Code) and was a member of the top-paid group for such
year; or
(iii) was an officer of the Employer and received
Compensation during such year that is greater than 50 percent
of the dollar limitation in effect under Section 415(b)(1)(A)
of the Code.
The term Highly Compensated Employee also includes:
(iv) Employees who are both described in the
preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the Employee is
one of the 100 Employees who received the most Compensation
from the Employer during the determination year; and
(v) Employees who are 5 percent owners at any time
during the look- back year or determination year.
If no officer has satisfied the Compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the twelve-month period immediately preceding
the determination year. The Company may elect, however, to make the look-back
year calculation for a determination year on the basis of the calendar year
ending with or within the applicable determination year as provided for in
applicable Regulations. Such election shall apply to all plans of the Company.
A Highly Compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a Highly Compensated active Employee for either the
separation year or any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a Family Member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most Highly
Compensated Employees ranked on the basis of Compensation paid by the Employer
during such year, then the Family Member and the 5 percent owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the Family Member
and 5 percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the Family
Member and 5 percent owner or top-ten Highly Compensated Employee.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will be made in accordance
with Section 414(q) of the Code and the regulations thereunder.
(s) "HOUR OF SERVICE"
(i) GENERAL RULE. "HOUR OF SERVICE" shall mean each hour (A)
for which an Employee is directly or indirectly paid, or entitled to
payment, by a Participating Company or a Related Entity for the
performance of duties or (B) for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by a
Participating Company or a Related Entity. These hours shall be
credited to the Employee for the period or periods in which the duties
were performed or to which the award or agreement pertains irrespective
of when payment is made. The same hours shall not be credited under
both (A) and (B) above.
(ii) PAID ABSENCES. An Employee shall also be credited with
one Hour of Service for each hour for which the Employee is directly or
indirectly paid, or entitled to payment, by a Participating Company or
a Related Entity on account of a period during which no duties are
performed due to vacation, holiday, illness, incapacity, disability,
layoff, jury duty or authorized leave of absence for a period not
exceeding one year for any reason in accordance with a uniform policy
established by the Committee; provided, however, not more than 501
Hours of Service shall be credited to an Employee under this sentence
on account of any single, continuous period during which the Employee
performs no duties and provided, further, that no credit shall be given
if payment (A) is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws or (B) is made
solely to reimburse an Employee for medical or medically related
expenses incurred by the Employee.
(iii) MATERNITY/PATERNITY. An Employee shall also be credited
with one Hour of Service for each hour that otherwise would normally
have been credited to the Employee but during which such Employee is
absent from work for any period (A) by reason of the Employee's
pregnancy, (B) by reason of the birth of the Employee's child, (C) by
reason of the placement of a child with such Employee in connection
with an adoption of such child by the Employee or (D) for purposes of
caring for a child for a period beginning immediately following birth
or placement, provided that an Employee shall be credited with no more
than 501 Hours of Service on account of any single continuous period of
absence by reason of any such pregnancy, birth or placement and
provided further that Hours of Service credited to an individual on
account of such a period of absence shall be credited only for the
Break in Service computation period in which such absence begins if an
Employee would otherwise fail to be credited with 501 or more Hours of
Service in such period or, in any other case, in the immediately
following computation period.
(iv) MILITARY. An Employee shall also be credited with one
Hour of Service for each hour during which the Employee is absent on
active duty in the military service of the United States under leave of
absence granted by a Participating Company or a Related Entity or when
required by law, provided he returns to employment with a Participating
Company or a Related Entity within 90 days after his release from
active duty or within such longer period during which his right to
reemployment is protected by law.
(v) MISCELLANEOUS. For purposes of this subsection, the
regulations issued by the Secretary of Labor at 29 CFR 2530.200b - 2(b)
and (c) are incorporated by reference. Nothing herein shall be
construed as denying an Employee credit for an "Hour of Service" if
credit is required by separate federal law.
(vi) EQUIVALENCIES. If, for Plan purposes, an Employee's
records are kept on other than an hourly basis as described above, the
Committee, according to uniform rules applicable to a class of
Employees may apply the following equivalencies for purposes of
crediting Hours of Service:
Credit Granted to Individual
Based Upon Which if Individual Earns One or More
Records Are Maintained Hours of Service During Period
- ------------------------ ----------------------------------
Shift Actual hours for full shift
Day 10 Hours of Service
Week 45 Hours of Service
Bi-Weekly Payroll Period 90 Hours of Service
Semi-Monthly Payroll Period 95 Hours of Service
Months of Employment 190 Hours of Service
(t) "INVESTMENT CATEGORY" shall mean any separate investment
fund which is made available under the terms of the Plan.
(u) "INVESTMENT MANAGER" shall mean any Fiduciary who:
(i) has the power to manage, acquire, or dispose of
any asset of the Plan:
(ii) is:
(A) registered as an investment adviser under the
Investment Advisers Act of 1940;
(B) a bank, as defined in that Act; or
(C) an insurance company qualified to perform
services described in subsection l(u)(i) above under the laws
of more than one state; and
(iii) has acknowledged in writing that he is a
Fiduciary with respect to the Plan.
(v) "LIMITATION YEAR" shall mean the consecutive twelve-month
period commencing on January I and ending on December 31.
(w) "MEMBER" shall mean each and every Employee of a
Participating Company who satisfies the requirements for participation under
Section 3 hereof or who has an Account held under the Plan.
(x) "NORMAL RETIREMENT DATE" shall mean the date on which a
Member attains age 65.
(y) "PARTICIPATING COMPANY" shall mean any Related Entity with
respect to the Company which adopts this Plan pursuant to Section 16. The term
shall also include the Company, unless the context otherwise requires.
(z) "PLAN" shall mean Computer Horizons Corp. Employee's
Savings Plan as set forth herein as of the Effective Date and the same as may be
amended from time to time.
(aa) "PLAN YEAR" shall mean the consecutive twelve-month
period commencing on January 1 and ending on December 31.
(bb) "RELATED ENTITY" shall mean (i) all corporations which
are members with a Participating Company in a controlled group of corporations
within the meaning of Section 1563(a) of the Code, determined without regard to
Sections 1563(a)(4) and (e)(3)(c) of the Code, (ii) all trades or businesses
(whether or not incorporated) which are under common control with a
Participating Company as determined by regulations promulgated under Section
414(c) of the Code, (iii) all trades or businesses which are members of an
affiliated service group with a Participating Company within the meaning of
Section 414(m) of the Code and (iv) any other entity required to be aggregated
with a Participating Company in accordance with regulations under Section 414(o)
of the Code; provided, however, for purposes of Section 5, the definition shall
be modified to substitute the phrase "more than 50%" for the phrase "at least
80%" each place it appears in Section 1563(a)(1) of the Code. Furthermore, for
purposes of crediting Hours of Service for eligibility to participate and
vesting, Service performed as a leased employee, within the meaning of Section
414(n) of the Code, of a Participating Company or a Related Entity shall be
treated as Service performed for a Participating Company or a Related Entity. An
entity is a Related Entity only during those periods in which it is included in
a category described in this subsection.
(cc) "TRUST AGREEMENT" shall mean the agreement between the
Company and the Trustee under which the Fund is held.
(dd) "TRUSTEE" shall mean such person, persons or corporate
fiduciary designated pursuant to subsection 6(a) to manage and control the Fund
pursuant to the terms of the Plan and the Trust Agreement.
(ee) "VALUATION DATE" shall mean the last business day of the
Plan Year and the last business day of the third, sixth and ninth months in the
Plan Year. If the Fund or any Investment Category is invested in a manner which
permits daily valuation of the portion of a Member's Account held therein
without incremental cost or the Committee otherwise directs, then the date of
liquidation of a Member's investment therein for distribution or reinvestment
shall also be a "Valuation Date".
(ff) "YEAR OF SERVICE" shall mean a consecutive twelve-month
computation period specified in the Plan in which an Employee is credited with
at least 1,000 Hours of Service, including such periods prior to the Effective
Date.
<PAGE>
2. ADMINISTRATION OF THE PLAN
(a) ERISA REPORTING AND DISCLOSURE BY ADMINISTRATOR. The
Administrator shall file all reports and distribute to Members and beneficiaries
reports and other information required under ERISA and the Code.
(b) COMMITTEE. The Company, through its Board of Directors,
shall designate an Administrative Committee which shall have the authority to
control and manage the operation and administration of the Plan. If the
Committee consists of more than two members, it shall act by majority vote. The
Committee may (i) delegate all or a portion of the responsibilities of
controlling and managing the operation and administration of the Plan to one or
more persons and (ii) appoint agents, investment advisers, counsel, or other
representatives to render advice with regard to any of its responsibilities
under the Plan. The Board of Directors may remove, with or without cause, the
Committee or any Committee member. The Committee may remove, with or without
cause, any delegate or adviser designated by it.
(c) MULTIPLE CAPACITIES. Any person may serve in more than one
fiduciary capacity (including service both as Trustee and Committee member).
(d) COMMITTEE POWERS. The responsibility to control and manage
the operation and administration of the Plan shall include, but shall not be
limited to, the performance of the following acts:
(i) the filing of all reports required of the Plan,
other than those which are the responsibility of the
Administrator;
(ii) the distribution to Members and beneficiaries of
all reports and other information required of the Plan, other
than reports and information required to be distributed by the
Administrator;
(iii) the keeping of complete records of the
administration of the Plan;
(iv) the promulgation of rules and regulations for
the administration of the Plan consistent with the terms and
provisions of the Plan; and
(v) the interpretation of the Plan including the
determination of any questions of fact arising under the Plan
and the making of all decisions required by the Plan. The
Committee's interpretation of the Plan and any actions and
decisions taken in good faith by the Committee based on its
interpretation shall be final and conclusive. The Committee
may correct any defect, or supply any omission, or reconcile
any inconsistency in the Plan in such manner and to such
extent as shall be expedient to carry the Plan into effect and
shall be the sole judge of such expediency.
(e) ALLOCATION OF FIDUCIARY RESPONSIBILITY. The Board of
Directors, the Administrator, the Committee, the Trustee and the Investment
Manager (if any) possess certain specified powers, duties, responsibilities and
obligations under the Plan and the Trust Agreement. It is intended under this
Plan and the Trust Agreement that each be responsible solely for the proper
exercise of its own functions and that each not be responsible for any act or
failure to act of another, unless otherwise responsible as a breach of its
fiduciary duty or for breach of duty by another Fiduciary under ERISA's rules of
co-fiduciary responsibility. In general:
(i) the Board of Directors, by resolution at their
meetings or by written consent or by any other process
permitted under relevant State law, is responsible for
appointing and removing the Committee and the Trustee and for
amending or terminating the Plan and the Trust Agreement;
(ii) the Committee is responsible for administering
the Plan, for adopting such rules and regulations as in the
opinion of the Committee are necessary or advisable to
implement and administer the Plan and to transact its
business, and for providing a procedure for carrying out a
funding policy and method consistent with the objectives of
the Plan and the requirements of Title I of ERISA and the
Code;
(iii) the Administrator is responsible for
discharging the statutory duties of a plan administrator under
ERISA and the Code;
(iv) the Trustee and the Investment Manager are
responsible for the management and control of the respective
portions of the Fund over which they have control to the
extent provided in the Trust Agreement; and
(v) the Fiduciary appointing an Investment Manager is
responsible for the appointment and retention of the
Investment Manager.
(f) CLAIMS. If, pursuant to the rules, regulations or other
interpretations of the Plan, the Committee denies the claim of a Member or
beneficiary for benefits under the Plan, the Committee shall provide written
notice, within 90 days after receipt of the claim, setting forth in a manner
calculated to be understood by the claimant:
(i) the specific reasons for such denial;
(ii) the specific reference to the Plan provisions on
which the denial is based;
(iii) a description of any additional material or
information necessary to perfect the claim and an explanation
of why such material or information is needed; and
(iv) an explanation of the Plan's claim review
procedure and the time limitations of this subsection
applicable thereto.
A Member or beneficiary whose claim for benefits has been denied may request
review by the Committee of the denied claim by notifying the Committee in
writing within 60 days after receipt of the notification of claim denial. As
part of said review procedure, the claimant or his authorized representative may
review pertinent documents and submit issues and comments to the Committee in
writing. The Committee shall render its decision to the claimant in writing in a
manner calculated to be understood by the claimant not later than 60 days after
receipt of the request for review, unless special circumstances require an
extension of time, in which case decision shall be rendered as soon after the
sixty-day period as possible, but not later than 120 days after receipt of the
request for review. The decision on review shall state the specific reasons
therefore and the specific Plan references on which it is based.
(g) FIDUCIARY COMPENSATION. A Committee member, delegate, or
adviser who already receives full-time pay from the Company or a Related Entity
shall serve without compensation for his services as such, but he shall be
reimbursed pursuant to subsection 2(h) for any reasonable expenses incurred by
him in the administration of the Plan. A Committee member, delegate, or adviser
who is not already receiving full-time pay from the Company may be paid such
reasonable compensation as shall be agreed upon.
(h) PLAN EXPENSES. All expenses of administration of the Plan
may be paid by the Company. If the Company does not pay such expenses, then they
shall be paid out of the Fund.
(i) FIDUCIARY INSURANCE. If the Committee so directs, the Plan
shall purchase insurance to cover the Plan from liability or loss occurring by
reason of the act or omission of a Fiduciary provided such insurance permits
recourse by the insurer against the Fiduciary in the case of a breach of duty by
such Fiduciary.
(j) INDEMNIFICATION. The Company shall indemnify and hold
harmless to the maximum extent permitted by its by-laws each Fiduciary who is an
Employee or who is an officer or director of any Participating Company or any
Related Entity from any claim, damage, loss or expense, including litigation
expenses and attorneys' fees, resulting from such person's service as a
Fiduciary of the Plan provided the claim, damage, loss or expense does not
result from the Fiduciary's gross negligence or intentional misconduct.
<PAGE>
3. PARTICIPATION IN THE PLAN
(a) INITIAL ELIGIBILITY. Each and every Employee of a
Participating Company eligible to participate in this Plan on December 31, 1993
shall continue to be eligible to participate in this Plan as amended and
restated effective January 1, 1994. Each and every other Employee of a
Participating Company not excluded under subsection 3(b) shall be eligible and
shall qualify to participate in the Plan on the Entry Date next following
completion by such Employee of one (1) Year of Service, provided he is then
employed by a Participating Company.
(b) INELIGIBLE EMPLOYEES
(i) COLLECTIVE BARGAINING AGREEMENT. No Employee
whose terms and conditions of employment are determined by a collective
bargaining agreement between employee representatives and a Participating
Company shall be eligible or qualify for participation unless such collective
bargaining agreement provides to the contrary, in which case such Employee shall
be eligible or shall qualify for participation upon compliance with such
provisions for eligibility or participation as such agreement shall provide;
except that no Employee who has selected, or in the future selects, a union
shall become ineligible during the period between his selection of the union and
the execution of the first collective bargaining agreement which covers him.
(ii) ASSOCIATE PROFESSIONAL EMPLOYEES. No Employee
who is classified as an Associate Professional Employee and who has, by written
agreement, elected to receive a higher salary in lieu of participation in all
benefits, except those mandated by law, shall be eligible or qualify for
participation under this Plan.
(iii) CERTAIN RELATED ENTITIES. No Employee of a
Related Entity which is not a Participating Company shall be eligible or qualify
for participation.
(c) MEASURING SERVICE. For purposes of measuring service to
satisfy the eligibility provisions of subsection 3(a), the Year of Service
computation period shall begin with the date on which the Employee first is
credited with an Hour of Service and with each subsequent anniversary thereof;
provided, however, if an Employee suffers Breaks in Service with respect to five
consecutive computation periods prior to satisfying the length of service
requirement of subsection 3(a), such Employee shall not be credited with
pre-Break in Service Years of Service and the eligibility computation period
with respect to such Employee shall commence thereafter on the date on which the
Employee first again is credited with an Hour of Service and with each
subsequent anniversary thereof.
(d) COMMENCEMENT OF PARTICIPATION. An employee who satisfies
all the requirements for eligibility under subsection 3(a) and who is not
excluded under subsection 3(b) shall become a Member on the Entry Date following
his timely election authorizing amounts be withheld from his Compensation and be
credited to his Salary Deferral Account.
(e) TERMINATION AND REQUALIFICATION. An Employee who has
satisfied the service requirement of subsection 3(a) applicable to him and who
subsequently becomes ineligible for any reason shall requalify for participation
on the date on which he is next credited with an Hour of Service in an eligible
job classification.
(f) TERMINATION OF MEMBERSHIP. An Employee who becomes a
Member shall remain a Member as long as he has an Account held under the Plan.
<PAGE>
4. CONTRIBUTIONS
(a) SALARY DEFERRAL CONTRIBUTIONS. Each Employee who becomes
eligible to participate may elect that his Participating Company contribute on
his behalf any whole percentage of his Compensation, as he shall elect, subject
to the following rules:
(i) AMOUNT. The amount of contribution which may be
specified shall be determined by the Committee and may be changed from time to
time, but for the first Plan Year and for each subsequent Plan Year prior to the
beginning of which the Committee does not announce a different maximum or
minimum, a Member may specify any amount equal to any whole percentage of his
Compensation, not to exceed 15% thereof and not less than 3% thereof.
(ii) CHANGE. A Member may change the specified
percentage from time to time by making a revised election; the frequency with
which such changes are allowed shall be specified in rules established by the
Committee, which rules shall permit a change no less often than annually.
(iii) SUSPENSION. A Member may suspend his election
at any time.
(iv) SALARY REDUCTION. A Member's pay for a Plan
Year shall be reduced by the amount of the contribution that he elects for such
Plan Year.
(v) ELECTION. All elections shall be made at the
time, in the manner, and subject to the conditions specified by the Committee,
which shall prescribe uniform and nondiscriminatory rules for such elections.
The Participating Companies shall pay over to the Fund all contributions made
under this subsection with respect to a Plan Year no later than the earlier of
90 days after the date such contributions are deferred or 30 days after the last
day of such Plan Year. Contributions made by Participating Companies under this
subsection shall be allocated to the Salary Deferral Accounts of the Members
from whose Compensation the contributions were withheld in an amount equal to
the amount withheld. Such contributions shall be deemed to be employer
contributions made on behalf of Members to a qualified cash or deferred
arrangement (within the meaning of Section 401(k)(2) of the Code).
(b) SALARY DEFERRAL CONTRIBUTION LIMITATIONS. Contributions
under subsection 4(a) shall be limited as provided below.
(i) EXCLUSION LIMIT. The maximum amount of
contribution which any Member may make in any calendar year under subsection
4(a) is $9,240 (or such increased annual amount resulting from a cost of living
adjustment pursuant to Sections 402(g)(5) and 415(d)(1) of the Code), reduced by
the amount of elective deferrals by such Member under all other plans, contracts
or arrangements of any Participating Company or Related Entity. If the
contribution under subsection 4(a) for a Member for any calendar year exceeds
$9,240 (or such increased annual amount resulting from an adjustment described
above) the Committee shall direct the Trustee to distribute the excess amount
(plus any income and minus any loss allocable thereto, as calculated in
accordance with subsection 4(d)(iv)) to the Member not later than April 15th
following the close of such calendar year. If (A) a Member participates in
another plan which includes a qualified cash or deferred arrangement, (B) such
Member contributes in the aggregate more than the exclusion limit under
subsection 4(a) of this Plan and the corresponding provisions of the other plan
and (C) the Member notifies the Committee not later than March 1st following the
close of such calendar year of the portion of the excess the Member has
allocated to this Plan, then the Committee shall direct the Trustee to
distribute to the Member not later than April 15th following the close of such
calendar year the excess amount (plus any income and minus any loss allocable to
such amount) which the Member allocated to this Plan.
(ii) DISCRIMINATION TEST LIMITS. The Committee may
limit the maximum amount of contribution for Members who are Highly Compensated
Employees (within the meaning of Section 414(q) of the Code) to the extent it
determines that such limitation is necessary to keep the Plan in compliance with
Section 401(a)(4) or Section 401(k)(3) of the Code. Any limitation shall be
effective for all payroll periods following the announcement of the limitation.
(iii) DISTRIBUTION LIMITATIONS. Amounts
attributable to elective contributions may not be distributed earlier than upon
one of the following events:
(A) The Employee's retirement, death,
disability or separation from service;
(B) The termination of the Plan without
establishment of a successor plan;
(C) The Employee's attainment of age 59 1/2
or the Employee's hardship pursuant to Plan Section 10;
(D) The sale or other disposition by a
corporation to an unrelated corporation which does not
maintain the Plan of substantially all of the assets used in a
trade or business, but only with respect to Employees who
continue employment with the acquiring corporation; and
(E) The sale or other disposition by a
corporation of its interest in a subsidiary to an unrelated
entity which does not maintain the Plan, but only with respect
to Employees who continue employment with the subsidiary.
(c) SALARY DEFERRAL ACCOUNT. The salary deferral contributions
allocated to a Member, as adjusted for investment gain or loss and income or
expense, constitute such Member's Salary Deferral Account. A Member shall at all
times have a nonforfeitable interest in the Salary Deferral Account portion of
his Account.
(d) COMPLIANCE WITH SALARY DEFERRAL DISCRIMINATION TEST.
(i) RULE. In no event shall the "average actual
deferral percentage" (as defined below) for Members who are Highly Compensated
Employees (as defined in Section 414(q) of the Code) for any Plan Year bear a
relationship to the "average actual deferral percentage" for Members who are not
Highly Compensated Employees which does not satisfy either subsection 4(d)(i)(A)
or (B) below.
(A) The requirement shall be satisfied for a
Plan Year if the "average actual deferral percentage" for the
group of Members who are Highly Compensated Employees that are
eligible to make contributions under subsection 4(a) for any
portion of the Plan Year is not more than the "average actual
deferral percentage" of all others who are eligible to make
contributions under subsection 4(a) for any portion of the
Plan Year multiplied by 1.25.
(B) The requirement shall be satisfied for a
Plan Year if (1) the excess of the "average actual deferral
percentage" for the Members who are Highly Compensated
Employees for the Plan Year that are eligible to make
contributions under subsection 4(a) for any portion of the
Plan Year over the "average actual deferral percentage" of all
others who are eligible to make contributions for any portion
of the Plan Year is not more than two percentage points and
(2) the "average actual deferral percentage" for Members who
are Highly Compensated Employees is not more than the "average
actual deferral percentage" of all others eligible to make
contributions under subsection 4(a) for any portion of the
Plan Year multiplied by two.
(ii) SPECIAL DEFINITION OF MEMBER. For purposes of
this subsection 4(d), the term "Member" shall mean each Employee eligible to
make contributions under subsection 4(a) at any time during a Plan Year. Such
Members include:
(A) an Employee who would be a Member but
for the failure to make required contributions;
(B) an Employee whose right to make elective
contributions has been suspended because of an election (other
than certain one-time elections) not to participate, a
distribution, or a loan; and
(C) an Employee who cannot make an elective
contribution because of the Section 415 Limitations.
In the case of an eligible Employee who makes no
elective contributions, the deferral ratio that is to be included in determining
the "actual deferral percentage" is zero.
(iii) REFUND. If the relationship of the "actual
deferral percentage" does not satisfy subsection 4(d)(i) for any Plan Year, then
the Committee shall direct the Trustee to distribute the "excess contribution"
(as defined below) for such Plan Year (plus any income and minus any loss
allocable thereto as calculated in accordance with subsection 4(d)(iv)) by the
last day of the following Plan Year to the Highly Compensated Employees on the
basis of the respective portions of the "excess contribution" attributable to
each, as determined under this subsection. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be imposed on the
Company or Related Entity maintaining the Plan with respect to such amounts. The
"excess contribution" for any Plan Year is the excess of the aggregate amount of
Participating Company contributions paid over to the Fund pursuant to subsection
4(a) on behalf of Highly Compensated Employees for such Plan Year over the
maximum amount of such contributions permitted for Highly Compensated Employees
under subsection 4(d)(i). The portion of the "excess contribution" attributable
to a Highly Compensated Employee is determined by reducing contributions made on
behalf of Highly Compensated Employees in order of "actual deferral percentages"
for each such employee, beginning with the highest of such percentages, until
the "excess contribution" is eliminated. "Excess contributions" shall be
allocated to Members who are subject to the family aggregation rules of Section
414(q)(6) of the Code by allocating the excess contributions for the family
group among the Family Members in proportion to the elective contribution of
each Family Member that is combined to determine the actual deferral ratio
pursuant to 1.401(k)-1(f)(5)(ii) of the Code. Any refund made in accordance with
this subsection to a Member shall be drawn from his Salary Deferral Account.
The amount of "excess contributions" to be
distributed shall be reduced by excess deferrals previously distributed pursuant
to subsection 4(b)(i) for the taxable year ending in the same Plan Year.
Furthermore, excess deferrals to be distributed for a taxable year pursuant to
subsection 4(b)(i) will be reduced by "excess contributions" previously
distributed pursuant to this subsection 4(d)(iii) hereof for the Plan Year
beginning in such taxable year.
(iv) ALLOCATION OF INCOME. Excess deferrals and
"excess contributions" shall be adjusted for any income or loss up to the date
of distribution. The income or loss is the sum of: (A) income or loss allocable
to the Member's Salary Deferral Account for the taxable year multiplied by a
fraction, the numerator of which is such Member's excess deferrals and "excess
contributions" for the year and the denominator of which is the Member's Salary
Deferral Account balance; and (B) ten percent of the amount determined under (A)
multiplied by the number of whole calendar months between the end of the
Member's taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
(v) ADDITIONAL DEFINITIONS. The "average actual
deferral percentage" for a specific group of Members for a Plan Year shall be
the average of the "actual deferral percentage" for each Member in the group for
such Plan Year. The "actual deferral percentage" for a particular Member for a
Plan Year shall be the ratio of the amount of Participating Company
contributions paid over to the Fund pursuant to subsection 4(a) for such Member
to the Member's "compensation" for such Plan Year excluding the Member's
compensations prior to satisfying the eligibility requirements of Section 3. For
this purpose, compensation means compensation for service performed for a
Participating Company which is currently includable in gross income or which is
excludable from gross income pursuant to an election under a qualified cash or
deferred arrangement under Section 401(k) of the Code or a cafeteria plan under
Section 125 of the Code. In no event shall such "compensation" exceed the
limitations of Code Section 401(a)(17), as indexed.
(vi) CONTRIBUTIONS CONSIDERED. A Member's salary
deferral contributions will be taken into account under the actual deferral
percentage test of this subsection 4(d) pursuant to Section 401(k)(3)(A) of the
Code for a Plan Year only if it satisfies subsections 4(d)(vi)(A) and (B) below:
(A) The salary deferral contributions relate
to compensation that either would have been received by the
Employee in the Plan Year (but for the deferral election) or
are attributable to services performed by the Employee in the
Plan Year and would have been received by the Employee within
2 1/2 months after the close of the Plan Year (but for the
deferral election);
(B) The salary deferral contributions are
allocated to the Employee as of a date within the Plan Year
for which subsection 4(d)(i) applies. For this purpose, salary
deferral contributions are considered allocated as of a date
within a Plan Year if the allocation is not contingent on
participation or performance of services after such date and
the salary deferral contribution is actually paid to the trust
no later than 12 months after the Plan Year to which the
contribution relates. Notwithstanding the foregoing, salary
deferral contributions that are distributed to a Member
pursuant to Section 5 hereof shall be disregarded for purposes
of determining a Member's average actual deferral percentage
for the year in which the excess annual addition arose.
(vii) AGGREGATION OF PLANS. In the event that this
Plan satisfies the requirements of Section 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of Section 401(k), 401(a)(4) or 410(b) of the Code only if
aggregated with this Plan, then subsection 4(d)(i) shall be applied by
determining the "contribution percentages" of Members as if all such plans were
a single plan. Plans permissively aggregated pursuant to this subsection must
have the same Plan Year. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under Code Section 401(k) and
corresponding regulations.
(viii) AGGREGATION OF CONTRIBUTIONS. The
"contribution percentage" for any member who is a Highly Compensated Employee
for the Plan Year and who is eligible to have salary deferral contributions
allocated to his account under two or more plans described in Section 401(a) of
the Code that are maintained by a Participating Company or Related Entity shall
be determined as if the total of such Member contributions were made under this
Plan and each other plan. For purposes of this subsection, the contributions
considered are those taken into account for each plan with a Plan Year ending
with or within the same calendar year.
(ix) SPECIAL RULE. For purposes of determining the
"actual deferral percentage" of a Member who is a Highly Compensated Employee,
the contributions allocable to such Member and "compensation" of such Member
shall include the contributions allocable to Family Members and "compensation"
of Family Members. Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate employees in determining "the average actual
deferral percentage" both for Members who are not Highly Compensated Employees
and for Members who are Highly Compensated Employees. For the purpose of this
subsection, a Family Member shall mean an individual described in Section
414(q)(6)(B) of the Code.
(e) PARTICIPATING COMPANY CONTRIBUTIONS. The Participating
Companies shall contribute to the Fund 25% of the first 4% of Salary Deferral
contributed with respect to a Member under subsection 4(a) or such uniform
percentage of the amount contributed with respect to a Member under subsection
4(a) as the Company, in its absolute discretion, shall determine. The
Participating Companies shall pay over to the Trustee all contributions under
this subsection no later than the due date, including extensions, for filing the
Participating Companies' federal income tax returns for the taxable year
coincident with or within which the Plan Year with respect to which such
contributions are to be made ended. Such contributions shall be allocated to the
Employer Contribution Accounts of the Members with respect to whom they are
made.
(f) EMPLOYER CONTRIBUTION ACCOUNT. The allocations made to a
Member under subsection 4(e) as adjusted for investment gain or loss and income
or expense, constitute the Member's Employer Contribution Account. A Member
shall have a nonforfeitable interest in the Employer Contribution Account
portion of his Account to the extent provided under Section 8.
(g) COMPLIANCE WITH PARTICIPATING COMPANY MATCHING
CONTRIBUTIONS DISCRIMINATION TESTS.
(i)RULE. In no event shall the "average contribution
percentage" (as defined below) for Members who are Highly Compensated Employees
(as defined in Section 414(q) of the Code) for any Plan Year bear a relationship
to the "average contribution percentage" for Members who are not Highly
Compensated Employees which does not satisfy either subsection 4(g)(i)(A) or (B)
below.
(A) The requirement shall be satisfied for a
Plan Year if the "average contribution percentage" for the
group of Members who are Highly Compensated Employees that are
eligible to make contributions under subsection 4(a) for any
portion of the Plan Year is not more than the "average
contribution percentage" of all others who are eligible to
make contributions under subsection 4(a) for any portion of
the Plan Year multiplied by 1.25.
(B) The requirement shall be satisfied for a
Plan Year if (1) the excess of the "average contribution
percentage" for the Members who are Highly Compensated
Employees for the Plan Year that are eligible to make
contributions under subsection 4(a) for any portion of the
Plan Year over the "average contribution percentage" of all
others who are eligible to make contributions for any portion
of the Plan Year is not more than two percentage points and
(2) the "average contribution percentage" for Members who are
Highly Compensated Employees is not more than the "average
contribution percentage" of all others eligible to make
contributions under subsection 4(a) for any portion of the
Plan Year multiplied by two.
(ii) REFUND. If the relationship of the "average
contribution percentages" does not satisfy subsection 4(g)(i) for any Plan Year,
then the Committee shall direct the Trustee to distribute the "excess aggregate
contribution" (as defined below) for such Plan Year (plus any income and minus
any loss allocable thereto including the period between the end of the Plan Year
and the date of distribution or forfeiture) by the last day of the following
Plan Year to the Highly Compensated Employees on the basis of the respective
portions of the "excess aggregate contribution" attributable to each, as
determined under this subsection. If such "excess aggregate contributions" are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be imposed on the
employer maintaining the Plan with respect to those amounts. The "excess
aggregate contribution" for any Plan Year is the excess of the aggregate amount
of Participating Company contributions allocated on a matching basis pursuant to
subsection 4(e) on behalf of Highly Compensated Employees for such Plan Year
over the maximum amount of such contributions which could be allocated to Highly
Compensated Employees under subsection 4(g). The portion of the "excess
aggregate contribution" attributable to a Highly Compensated Employee is
determined by reducing Participating Company contributions allocated to Highly
Compensated Employees in order of "contribution percentages" for each such
employee, beginning with the highest of such percentages, until the "excess
aggregate contribution" is eliminated. "Excess aggregate contributions" shall be
allocated to Members who are subject to the family aggregation rules of Section
414(q)(6) of the Code by allocating the excess contributions for the family
group among the Family Members in proportion to the elective contribution of
each Family Member that is combined to determine the actual deferral ratio
pursuant to 1.401(k)-1(f)(5)(ii) of the Code. Any refund made to a Member in
accordance with this subsection shall be drawn from his Employer Contribution
Account. Notwithstanding the foregoing, if a Member does not have a 100%
nonforfeitable right to his Employer Contribution Account under subsection
8(d)(ii), the forfeitable portion of any amount withdrawn from his Employer
Contribution Account shall be forfeited and the vested portion shall be
distributed to the Member.
"Excess aggregate contributions" shall be adjusted
for any income or loss up to the date of distribution. The income or loss
allocable to "excess aggregate contributions" is the sum of: (1) income or loss
allocable to the Member's account balance attributable to employer contributions
pursuant to subsection 4(e) for the Plan Year multiplied by a fraction, the
numerator of which is such Member's "excess aggregate contributions" for the
year and the denominator of which is the Member's account balance attributable
to employer contributions pursuant to subsection 4(e); and (2) ten percent of
the amount determined under (1) multiplied by the number of whole calendar
months between the end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the 15th of such month.
(iii) ALLOCATION OF FORFEITURES. Any amounts
forfeited by Highly Compensated Employees under this subsection shall be applied
to first decrease Participating Company contributions to be made pursuant to
subsection 4(e), and then to increase discretionary Participating Company
contributions. Notwithstanding the foregoing, no forfeiture arising under this
subsection shall be allocated to the Account of any Highly Compensated Employee.
(iv) ADDITIONAL DEFINITIONS. For purposes of this
subsection 4(g), the term "Member" shall mean each Employee eligible to make
contributions under subsection 4(a) at any time during a Plan Year. Such Members
include:
(A) an Employee who would be a Member but
for the failure to make required contributions;
(B) an Employee whose right to receive
matching contributions has been suspended because of an
election (other than certain one-time elections) not to
participate; and
(C) an Employee who cannot receive a
matching contribution because Section 415(c)(1) or Section
415(e) of the Code prevents the Employee from receiving
additional annual additions.
In the case of an eligible Employee who receives no
matching contributions, the contribution ratio that is to be included in
determining the ACP is zero.
The "average contribution percentage" for a specific
group of Members for a Plan Year shall be the average of the "contribution
percentage" for each Member in the group for such Plan Year. The "contribution
percentage" for a particular Member shall be the ratio of the amount of
Participating Company contributions allocated to a Member pursuant to subsection
4(e) for a Plan Year and paid over to the Fund no later than the end of the
12-month period beginning on the day after the close of the Plan Year to the
Member's "compensation" for such Plan Year. For this purpose, "compensation"
means compensation for service performed for a Participating Company which is
currently includable in gross income or which is excludable from gross income
pursuant to an election under a qualified cash or deferred arrangement under
Section 401(k) of the Code or a cafeteria plan under Section 125 of the Code,
excluding any amounts earned prior to satisfying the eligibility requirements of
subsection 3(a). In no event shall such "compensation" exceed the limitations of
Code Section 401(a)(17), as indexed.
(v) AGGREGATION OF CONTRIBUTIONS. The "contribution
percentage" for any Member who is a Highly Compensated Employee for the Plan
Year and who is eligible to make after tax contributions to any plan subject to
Section 415 of the Code maintained by a Participating Company or a Related
Entity or to have Participating Company matching contributions within the
meaning of Section 401(m)(4)(A) of the Code allocated to his account under two
or more plans described in Section 401(a) of the Code that are maintained by a
Participating Company or a Related Entity shall be determined as if the total of
such Member contributions and Participating Company contributions was made under
this Plan and each other plan.
(vi) AGGREGATION OF PLANS. In the event that this
Plan satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of Section 410(b) of the Code only if aggregated with
this Plan, then subsection 4(g)(i) shall be applied by determining the
"contribution percentages" of Members as if all such plans were a single plan.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under Code Section 401(m) and corresponding
regulations.
(vii) SPECIAL RULE. For purposes of determining the
"contribution percentage" of a Member who is a Highly Compensated Employee, the
contribution allocable to such Member pursuant to subsection 4(e) and
"compensation" of such Member shall include the contributions allocable to
Family Members pursuant to subsection 4(e) and "compensation" of Family Members.
Family Members, with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the "contribution percentage"
both for Members who are not Highly Compensated Employees and for Members who
are Highly Compensated Employees.
(viii) MULTIPLE USE. If either the "actual deferral
percentage" or "actual contribution percentage" of the Highly Compensated
Employees exceeds 1.25 multiplied by the "actual deferral percentage" and
"actual contribution percentage" of the Non-highly Compensated Employees, then
the Plan shall test for multiple use. Such test shall occur when the sum of the
"actual deferral percentage" and "actual contribution percentage" pursuant to
subsections 4(d) and 4(g), respectively, of the Highly Compensated Employees
exceeds the "aggregate limit"; in such circumstances the "actual contribution
percentage" of the Highly Compensated Employees will be reduced (beginning with
such Highly Compensated Employee whose "actual contribution percentage" is the
highest) so that the "aggregate limit" is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Account is reduced shall be treated
as an "excess aggregate contribution". The "actual deferral percentage" and
"actual contribution percentage" of the Highly Compensated Employees are
determined after any corrections required to meet the "actual deferral
percentage" and "actual contribution percentage" tests.
For purposes of this subsection 4(g)(viii) "aggregate
limit" shall mean the sum of (i) 125 percent of the greater of the "actual
deferral percentage" of the Non-highly Compensated Employees for the Plan Year
or the "actual contribution percentage" of Non-highly Compensated Employees
under the plan subject to Code Section 401(m) for the Plan Year beginning with
or within the Plan Year of the cash or deferred arrangement and (ii) the lesser
of 200% or two plus the lesser of such "actual deferral percentage" or "actual
contribution percentage". "Lesser" is substituted for "greater" in "(i)", above,
and "greater" is substituted for "lesser after "two plus the" in "(ii)" if it
would result in a larger "aggregate limit".
(h) ROLLOVERS. Subject to uniform rules, any Employee as
defined in subsection l(l) may, subject to the Committee's approval, transfer to
the Plan all or a portion of an eligible rollover distribution from an eligible
retirement plan. Such rollover contributions, if approved, shall be credited to
the Employee's Rollover Account.
The terms "eligible rollover distribution" and
"eligible retirement plan" shall have the meanings described in 9(b)(iii) of the
Plan, except that, for purposes of this subsection 4(h), an individual
retirement account described in Section 408(a) of the Code which holds an
eligible rollover distribution made to a surviving spouse shall not be
considered an eligible retirement plan.
The Committee shall develop such procedures, and may
require such information from an Employee desiring to make such a transfer, as
it deems necessary or desirable to determine that the proposed transfer will
meet the requirements of this Section.
Any Employee who has not met the eligibility
requirements of subsection 3(a) but who has made Rollover Contributions into the
Plan shall be considered a Participant for purposes of Sections 6, 7, 8, 10, 11,
13, 14, 15 and 18 of the Plan.
Notwithstanding anything herein to the contrary, this
Plan shall not accept any direct or indirect transfer (in a transfer after
December 31, 1984) from a defined benefit plan, money purchase plan (including a
target benefit plan), stock bonus or profit sharing plan which would otherwise
have provided for a life annuity form of payment to the Participant.
(i) ROLLOVER ACCOUNT. Any contribution under subsection 4(h),
as adjusted for investment gain or loss and income or expense, shall constitute
the Member's Rollover Account. A Member shall at all times have a nonforfeitable
interest in the Rollover Account portion of his Account.
(j) "FAILSAFE" CONTRIBUTIONS. The Participating Companies may
make a special contribution to be allocated among all Employees who were
eligible to participate in the Plan during the Plan Year and who are not Highly
Compensated Employees within the meaning of Section 401(k)(5) of the Code in
proportion to their Compensation. The amount of the contribution shall not
exceed the amount, determined by the Committee, necessary to satisfy the
discrimination standards of Section 401(k)(3) of the Code. Any such contribution
shall be treated as an addition to the Member's Salary Deferral Account and
shall be subject to the vesting and distribution provisions of the Plan
pertaining to elective contributions and the conditions described in Regulation
1.401(k) - 1(b)(5) of the Code.
(k) PAYROLL TAXES. The Participating Companies shall withhold
from the Compensation of the Members and remit to the appropriate government
agencies such payroll taxes and income tax withholding as the Company determines
is or may be necessary under applicable statutes or ordinances and the
regulations and rulings thereunder.
<PAGE>
5. MAXIMUM CONTRIBUTIONS AND BENEFITS
(a) DEFINED CONTRIBUTION LIMITATION. In the event that the
amount allocable to a Member from contributions to the Fund in respect of any
Plan Year would cause the Annual Additions allocated to any Member under this
Plan plus the Annual Additions allocated to such Member under any other plan
maintained by a Participating Company or a Related Entity to exceed for any
Limitation Year the lesser of (i) $30,000 (or, if greater, one-fourth of the
dollar limitation in effect under subsection 415(b)(1)(A) of the Code for such
Limitation Year) or (ii) 25% of such Member's compensation (as defined in
subsection 5(d)) for such Limitation Year, then such amount allocable to such
Member shall be reduced by the amount of such excess to determine the actual
amount of the contribution allocable to such Member in respect of such Plan
Year. If excess Annual Additions arise as a result of a reasonable error in
determining the amount of elective deferrals that a Member may make pursuant to
subsection 4(a) in any Limitation Year, then such excess may be distributed to
the Member. Otherwise, the excess amount allocable to a Member's Account shall
be held in a suspense account and shall be used to reduce contributions
allocable to the Member for the next Limitation Year (and succeeding Limitation
Years as necessary) provided, however, that the Member is covered by the Plan as
of the end of the Limitation Year. If the Member is not covered by the Plan as
of the end of the Limitation Year, then the excess amount shall be held
unallocated in a suspense account and shall be allocated among all Employees
eligible to make contributions under subsection 4(a) for such Limitation Year as
an equal percentage of their Compensation for such Limitation Year. Except as
provided above, no excess amount may be distributed to a Member or former
Member.
If a short limitation year is created because of an
amendment changing the Limitation Year to a different consecutive 12-month
period, the defined contribution dollar limitation will be prorated based on the
number of months in the short Limitation Year.
(b) COMBINED LIMITATION. In addition to the limitation of
subsection 5(a), if a Participating Company or a Related Entity maintains or
maintained a defined benefit plan and the amount allocable to a Member with
respect to any Plan Year would cause the aggregate amount allocated to any
Member under all defined contribution plans maintained by all Participating
Companies or Related Entities to exceed the maximum allocation as determined in
subsection 5(c), then such amount allocable to such Member shall be reduced by
the amount of such excess to determine the actual amount of the contribution
allocable to such Member for such Plan Year. The excess amount with respect to
any Member shall be held in accordance with subsection 5(a). Notwithstanding the
foregoing, to the extent administratively feasible, the combined limitation
shall be applied to the Member's benefit payable from the defined benefit plan
prior to reduction of the Member's Annual Additions under this Plan.
(c) COMBINED LIMITATION COMPUTATION.
(i) MAXIMUM ALLOCATION. The maximum allocation is
the amount of Annual Additions which may be allocated to a Member's benefit
without permitting the sum of the defined benefit plan fraction (as hereinafter
defined) and the defined contribution plan fraction (as hereinafter defined) to
exceed 1.0 for any Limitation Year. The defined benefit plan fraction applicable
to a Member for any Limitation Year is a fraction, the numerator of which is the
projected annual benefit of the Member under the plan determined as of the close
of the Limitation Year and the denominator of which is the lesser of (1) the
product of 1.25 multiplied by the maximum then permitted dollar amount of
straight life annuity payable under the defined benefit plan maximum benefit
provisions of the Code as a benefit commencing at the Member's social security
retirement age or (2) the product of 1.4 multiplied by the maximum permitted
amount of straight life annuity, based on the Member's compensation, payable
under the defined benefit plan maximum benefit provisions of the Code as a
benefit commencing at the Member's social security retirement age. For purposes
of this subsection 5(c), a Member's projected annual benefit is equal to the
annual benefit, expressed in the form of a straight life annuity, to which the
Member would be entitled under the terms of the defined benefit plan based on
the assumptions that (1) the Member will continue employment until reaching his
social security retirement age (or current age, if later) at a rate of
compensation equal to that for the Limitation Year under consideration and (2)
all other relevant factors used to determine benefits under the plan for the
Limitation Year under consideration will remain constant for future Limitation
Years. The defined contribution plan fraction applicable to a Member for any
Limitation Year is a fraction, the numerator of which is the sum of the Annual
Additions for all Limitation Years allocated to the Member as of the close of
the Limitation Year and the denominator of which is the sum of the lesser,
separately determined for each Limitation Year of the Member's employment with a
Participating Company or Related Entity, of (1) the product of 1.25 multiplied
by the maximum dollar amount of Annual Additions which could have been allocated
to the Member under the Code for such Limitation Year or (2) the product of 1.4
multiplied by the maximum amount, based on the Member's compensation, of Annual
Additions which could have been allocated to the Member for such Limitation
Year.
(ii) TRANSITIONAL RULE. Notwithstanding the above,
if the Employee was a Member as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit plans
maintained by the Participating Companies which were in existence on May 6,
1986, the denominator of the defined benefit fraction used in computing the
combined limitation pursuant to 5(c)(i) hereof will not be less than 125 percent
of the sum of the annual benefits under such plans which the Member had accrued
as of the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
Furthermore, in computing the defined contribution
plan fraction pursuant to 5(c)(i) hereof, if the Employee was a Member as of the
end of the first day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by the Participating
Companies which were in existence on May 6, 1986, the numerator of the defined
contribution fraction will be adjusted if the sum of this fraction and the
defined benefit fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the excess of
the sum of the fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed as of the
end of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made after May
5, 1986, but using the Section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987.
(d) DEFINITION OF "COMPENSATION" FOR CODE
LIMITATIONS. For purposes of the limitations on the allocation of Annual
Additions to a Member and maximum benefits under a defined benefit plan as
provided for in this Section 5, "compensation" for a Limitation Year shall mean
the sum of (i) amounts paid by a Participating Company or a Related Entity to
the Member with respect to personal services rendered by the Member, (ii) earned
income of a self-employed person with respect to a Participating Company or a
Related Entity, (iii) amounts received by the Member (A) through accident or
health insurance or under an accident or health plan maintained or contributed
to by a Participating Company or a Related Entity and which are includable in
the gross income of the Member, (B) through a plan contributed to by a
Participating Company or a Related Entity providing payments in lieu of wages on
account of a Member's permanent and total disability, or (C) as a moving expense
allowance paid by a Participating Company or a Related Entity and which are not
deductible by the Member for federal income tax purposes; (iv) the value of a
non-statutory stock option granted by a Participating Company or a Related
Entity to the Member to the extent included in the Member's gross income for the
taxable year in which it was granted; and (v) the value of property transferred
by a Participating Company or a Related Entity to the Member which is includable
in the Member's gross income due to an election by the Member under Section
83(b) of the Code. Compensation shall not include (i) contributions made by a
Participating Company or Related Entity to a deferred compensation plan which,
without regard to Section 415 of the Code, are not includable in the Member's
gross income for the taxable year in which contributed; (ii) Participating
Company or Related Entity contributions made on behalf of a Member to a
simplified employee pension plan to the extent they are deductible by the Member
under Section 219(b)(7) of the Code; (iii) distributions from a deferred
compensation plan (except from an unfunded non-qualified plan when includable in
gross income); (iv) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by a Member either becomes
freely transferable or is no longer subject to a substantial risk of forfeiture;
(v) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified or incentive stock option; and (vi) other amounts
which receive special tax benefits, such as premiums for group term life
insurance (to the extent excludable from gross income) or Participating Company
or Related Entity contributions towards the purchase of an annuity contract
described in Section 403(b) of the Code.
<PAGE>
6. ADMINISTRATION OF FUNDS
(a) INVESTMENT CONTROL. The management and control of the
assets of the Plan shall be vested in the Trustee designated from time to time
by the Company through its Board of Directors; provided, however, the Company,
through its Board of Directors, or the Trustee, may appoint one or more
Investment Managers to manage, acquire or dispose of any assets of the Plan and
the Committee may instruct the Trustee to establish Investment Categories for
selection by the Members in accordance with the Plan, in which case the
Committee may at any time add to or delete from the Investment Categories.
(b) MEMBER ELECTIONS. If Investment Categories are
established, then in accordance with uniform rules of general application
established by the Committee, each Member shall have the right to designate the
Investment Category or Categories in which the Trustee is to invest the
subaccounts which constitute such Member's Account. Such rules may permit each
Member to specify separate investment for any or all of his subaccounts or
require that all of a Member's subaccounts be invested in a uniform manner. With
respect to new contributions, a Member may elect to have amounts allocated among
the Investment Categories in multiples of 1% of the amount of such
contributions. A Member may elect to transfer amounts between any of the
Investment Categories. Such elections shall be made at such time, in such
manner, and in such form as the Committee may prescribe through uniform and
nondiscriminatory rules. The minimum amount transferable out of any one
Investment Category shall be 1% of the value of the Member's Account, or, if
less, the entire amount invested under such option. Any designation or change in
designation of Investment Category shall ultimately be verified in writing to
the Committee. The Committee shall provide written confirmation of the enacted
change to the Member. Any confirmation so provided shall be considered verified
by the Member unless the Member notifies the Committee otherwise within ninety
(90) days after he receives such confirmation. Unless the Committee provides
otherwise, such change in designation shall be effective as soon as
administratively feasible in accordance with rules established by the Committee.
Any election of Investment Category by any Member shall, on its effective date,
cancel any prior election. The Committee may limit the right of a Member (i) to
increase or decrease his contributions to a particular Investment Category, (ii)
to transfer amounts to or from a particular Investment Category or (iii) to
transfer amounts between particular Investment Categories, if it determines that
any such limitation is necessary or desirable to establish or maintain an
Investment Category. In accordance with subsection 2(d), the Committee may
promulgate separate accounting and administrative rules to facilitate the
establishment or maintenance of an Investment Category.
(c) NO MEMBER ELECTION. If Investment Categories are made
available and a Member does not make a written election of Investment Category,
then the Committee shall direct the Trustee to invest the Account of such Member
in the Investment Category which, in the opinion of the Committee, best protects
principal.
(d) FACILITATION. Notwithstanding any instruction from any
Member for investment of funds in an Investment Category as provided for herein,
the Trustee shall have the right to hold uninvested or invested in a short term
investment fund any amounts intended for investment or reinvestment until such
time as investment may be made in accordance with the Plan and the Trust
Agreement.
(e) VALUATIONS. The Fund and each Investment Category shall be
valued by the Trustee at fair market value as of each Valuation Date.
(f) PROVISIONS OPTIONAL. Nothing herein shall require the
Committee to establish Investment Categories. If no Investment Categories are
established, the Fund shall be administered as a unit.
(g) ALLOCATION OF GAIN OR LOSS. Any increase or decrease in
the market value of each Investment Category of the Fund since the preceding
Valuation Date and all income earned, expenses incurred and realized profits and
losses, shall be determined in accordance with accounting methods uniformly and
consistently applied and shall be added to or deducted from the Account of each
Member based on the amount of a Member's Account in such Investment Category at
the prior Valuation Date in accordance with non-discriminatory procedures and
rules adopted by the Committee. Before reallocation, the Accounts of the Members
shall be reduced by any payments made therefrom in the period. At the
Committee's discretion uniformly applied, administrative expenses directly
connected or associated with a particular Member's Account may be charged to the
Account. Notwithstanding the foregoing, allocation shall not be required to the
extent the Fund, or any Investment Category thereof, is administered in a manner
which permits separate valuation of each Member's interest therein without
separate incremental cost to the Plan or the Committee otherwise provides for
separate valuation.
(h) BOOKKEEPING. The Committee shall direct that separate
bookkeeping accounts be maintained to reflect each Member's Salary Deferral
Account, Rollover Account and Employer Contribution Account.
<PAGE>
7. BENEFICIARIES AND DEATH BENEFITS
(a) DESIGNATION OF BENEFICIARY. Each Member shall have the
right to designate one or more beneficiaries and contingent beneficiaries to
receive any benefit to which such Member may be entitled hereunder in the event
of the death of the Member prior to the distribution of such benefit by filing a
written designation with the Committee on the form prescribed by the Committee.
Such Member may thereafter designate a different beneficiary at any time by
filing a new written designation with the Committee. Notwithstanding the
foregoing, if a married Member designates a beneficiary other than his spouse,
such designation or subsequent changes shall not be valid unless the spouse
consented in writing witnessed by a notary public or a member of the Committee
in a manner prescribed by the Committee. A spouse's consent given in accordance
with the Committee's rules shall be irrevocable by the spouse with respect to
the beneficiary then designated by the Member unless the Member makes a new
beneficiary designation. Any written designation shall become effective only
upon its receipt by the Committee. If the beneficiary designated pursuant to
this subsection should die on or before the commencement of distribution of
benefits and the Member fails to make a new designation, then his beneficiary
shall be determined pursuant to subsection 7(b).
(b) BENEFICIARY PRIORITY LIST. If (i) a Member omits or fails
to designate a beneficiary, (ii) no designated beneficiary survives the Member
or (iii) the Committee determines that the Member's beneficiary designation is
invalid for any reason, then the death benefits shall be paid to the Member's
surviving spouse, or if the Member is not survived by his spouse, then to the
Member's estate.
<PAGE>
8. BENEFITS FOR MEMBERS.
The following are the only post employment benefits provided
by the Plan:
(a) RETIREMENT BENEFIT
(i) VALUATION. Each Member shall be entitled to a
retirement benefit equal to 100% of the Member's Account as of the Valuation
Date coincident with or next following his retirement on or after his or Normal
Retirement Date.
(ii) LATE RETIREMENT. A Member who continues
employment beyond his Normal Retirement Date shall continue to participate in
the Plan. His Account shall become nonforfeitable upon his attaining his Normal
Retirement Date.
(b) DEATH BENEFIT
(i) VALUATION. In the event of the in-service death
of a Member before actual retirement or termination, 100% of the Member's
Account on the Valuation Date coincident with or next following his death shall
constitute his death benefit and shall be distributed pursuant to Sections 7 and
9 (A) to his designated beneficiary or (B) if no designation of beneficiary is
then in effect, to the beneficiary determined pursuant to subsection 7(b).
(ii) SURVIVOR BENEFITS. In the event of the
post-employment death of a retired or terminated Member before distribution of
his vested Account balance has been made to him, his Account shall constitute a
death benefit and shall be distributed (A) to his designated beneficiary or (B)
if no designation of beneficiary is then in effect, to the beneficiary
determined pursuant to subsection 7(b).
(c) DISABILITY BENEFIT. In the event a Member suffers a
Disability before actual retirement, 100% of the Members Account on the
Valuation Date coincident with or next following his Disability shall constitute
his Disability benefit, provided said Member severs from service with a
Participating Company due to his Disability.
(d) TERMINATION OF EMPLOYMENT BENEFIT
(i) VALUATION. In the event a Member terminates
employment with all Participating Companies and all Related Entities other than
by reason of retirement on or after his Normal Retirement Date, Disability or
in-service death, the Member shall be entitled to receive a benefit equal to
100% of his Salary Deferral Account and Rollover Account and the nonforfeitable
portion (as determined under the vesting schedule at subsection 8(d)(ii)) of his
Employer Contribution Account on the Valuation Date coincident with or last
preceding distribution.
<PAGE>
(ii) VESTING SCHEDULE. The nonforfeitable portion
of a Member's Employer Contribution Account is as follows:
<TABLE>
<CAPTION>
NONFORFEITABLE
YEARS OF SERVICE PERCENTAGE
----------------------------- --------------
<S> <C> <C>
Less than 3 years 0%
3 years but less than 4 years 25%
4 years but less than 5 years 50%
5 years or more 100%
</TABLE>
(iii) COMPUTATION PERIOD, For purposes of
subsection 8(d), the computation period for determining a Year of Service or a
Break in Service shall be the 12-month period beginning on the date a Member
first completes an Hour of Service and each anniversary thereof.
(iv) CREDITING SERVICE. For purposes of subsection
8(d), a Member shall receive credit for all Years of Service, including Years of
Service prior to the Effective Date, except as follows:
(A) If a Member has a Break in Service in
five consecutive computation periods, then Years of Service after such
consecutive Breaks in Service shall not be taken into account for purposes of
determining the nonforfeitable percentage of the Member's Employer Contribution
Account which accrued prior thereto.
(B) If a Member who has no nonforfeitable
rights has a Break in Service for the greater of (1) five or more consecutive
computation periods or (2) the accumulated Service of the Member prior to the
Break in Service, then Years of Service prior to such consecutive Breaks in
Service shall not be taken into account for the purpose of determining the
nonforfeitable percentage of the Member's Employer Contribution Account which
accrues thereafter.
(C) CASHOUTS. If distribution is made to a
Member on account of termination of employment prior to the date on which the
Member has a Break in Service for five consecutive computation periods and the
Member returns to employment covered by the Plan, the Member's Account shall
subsequently be determined without regard to the portion thereof derived from
predistribution employment provided the Member (1) received distribution of the
entire present value of the nonforfeitable portion of his Account at the time of
distribution, (2) the amount of the distribution did not exceed $3,500 or the
Member (with spousal consent, if applicable) voluntarily elected to receive the
distribution, and (3) the Member upon return to employment covered by the Plan
does not repay the full amount of the distribution before the earlier of
suffering five consecutive one year Breaks in Service, or at the close of the
first period of five consecutive one year Breaks in Service commencing after the
withdrawal. If timely repayment is made, the Member's Account shall equal the
sum of the repayment and the forfeitable portion of the Member's Account on the
date of distribution, unadjusted by gains or losses subsequent to the
distribution. Restoration required due to Fund losses shall be made, to the
extent necessary, first from forfeitures in the Plan Year of repayment and
second from Participating Company contributions.
(v) CHANGE IN VESTING SCHEDULE. If the
Plan's vesting schedule is amended, or the Plan is amended in any way that
directly or indirectly affects the computation of the Member's nonforfeitable
percentage or if the Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Member with at least 3 Years of Service with
the Participating Company may elect, within a reasonable period after the
adoption of the amendment or change, to have the nonforfeitable percentage
computed under the Plan without regard to such amendment or change. For Members
who do not have at least 1 Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by substituting "5
Years of Service" for "3 Years of Service" where such language appears.
The period during which the election may be
made shall commence with the date the amendment is adopted or deemed to be made
and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after amendment becomes effective; or
(iii) 60 days after Member is issued written notice
of the amendment by the Participating Company.
(e) RECOGNITION OF FORFEITURES. The nonvested portion of the
Employer Contribution Account of a Member (i) who separates from service with no
vested interest in his Employer Contribution Account or (ii) who receives a
distribution prior to suffering his fifth consecutive Break in Service shall be
forfeited on the date of (i) separation or (ii) distribution, as the case may
be, subject to the right to restoration. The nonvested portion of the Employer
Contribution Account of any other Member shall be forfeited on the last day of
the Plan Year in which the Member suffers his fifth consecutive Break in
Service. Forfeitures shall first be applied to restore a Member's Accounts as
required by subsection 8(d)(iv). Any remaining forfeitures shall serve to offset
the Plan's administrative expenses.
<PAGE>
9. DISTRIBUTION OF BENEFITS
(a) COMMENCEMENT. The payment of benefits shall commence as
soon after the Valuation Date following the Member's termination of employment
as is administratively feasible, except as provided below.
(i) TERMINATION OF EMPLOYMENT BENEFITS. If the
nonforfeitable portion of the Member's Account exceeds or ever exceeded $3,500
and is not "immediately distributable", (1) distributions of benefits payable
under subsection 8(d) shall not commence unless the Member consents to such
distribution in writing and (2) if a Member is married to his then "spouse" on
the "annuity starting date", then distribution shall be subject to the consent
requirements afforded such Member's "spouse" pursuant to subsection 9(e). The
Committee shall notify the Member of his right to defer said distribution,
subject to the limitations of subsections 9(a)(ii) below. Such an election to
defer receipt of a benefit shall be accompanied by a notice, provided by the
Committee, of the general description of the material features, and an
explanation of the relative values, of the optional forms of benefit available
under a Plan in a manner that would satisfy the notice requirements of Section
417(a)(3) of the Code. Said notice must be provided no less than 30 days and no
more than 90 days prior to the "annuity starting date".
If a distribution is one to which Sections 401
(a)(11) and 417 of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(A) the Committee clearly informs the Member
that the Member has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a
particular distribution option), and
(B) the Member, after receiving the notice,
affirmatively elects a distribution.
If the Member does not consent to distribution, his
Account shall be retained in the Fund until such later date as the Member
requests distribution. If the Member does not request distribution prior to his
Normal Retirement Date or death, distribution shall commence as soon after the
Valuation Date next following the first to occur of the Member's Normal
Retirement Date or death (provided the Committee receives notice of the Member's
death), as is administratively feasible.
(ii) DEFERRAL LIMITATION. In no event other than
with the written consent of the Member shall the payment of benefits commence
later than the sixtieth day after the close of the Plan Year in which the latest
of the following occurs:
(A) the Member's Normal Retirement Date;
(B) the Member's separation from service; or
(C) the tenth anniversary of the year in which the
Member commenced participation in the Plan.
Provided, however, distribution of benefits must
commence on or before the April 1st of the calendar year following the calendar
year in which the Member attains age 70 1/2.
(iii) DEATH BENEFIT DEFERRAL LIMITATION. The
payment of death benefits under the Plan shall commence as soon after the
Valuation Date following the Member's death as is administratively feasible or
as the Member's beneficiary elects, subject to the limitation of subsection
9(b).
(b) BENEFIT FORMS.
(i) RETIREMENT AND TERMINATION BENEFITS. All
distributions required under this subsection shall be determined and made in
accordance with the proposed regulations under Section 401(a)(9), including the
minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
the proposed regulations. Vested benefits shall be distributed as the Member
shall elect, subject to subsection 9(e), in accordance with uniform rules
established by the Committee, from the alternatives below:
(A) a straight life annuity for the Member's life;
(B) a "qualified joint and survivor annuity" with
the Member's "spouse" as contingent annuitant under which the
amount payable to the Member's spouse is 50% of the amount
payable during the joint lives of the Member and his spouse;
(C) approximately equal monthly, quarterly,
semi-annual or annual installments over any period of time not
exceeding the Member's then life expectancy. If there is any
remaining balance in the Member's Account upon his death, such
balance shall be payable as a death benefit in accordance with
Sections 7 and 9 hereof;
(D) such other form of annuity as the Committee
makes available under uniform rules applicable to all Members,
or,
(E) a lump sum payment.
For purposes of this subsection, life expectancy
shall be determined by the Committee in accordance with applicable regulations
under the Code. The method so adopted by the Committee shall be uniformly
applied to all Members. If the Member's beneficiary is not the Member's spouse,
the Member must elect a method of distribution under which the present value of
the payments to be paid to the Member over his projected life span is more than
50% of the present value of the payments to be paid to both the Member and his
beneficiary.
(ii) DEATH BENEFITS. Death benefits shall be
distributed in one lump sum or in installments over a period not extending
beyond five years of the Member's date of death unless payment of benefits
commenced under a form of annuity or installment payment before the Member's
death, in which case benefits shall be paid at least as rapidly as under the
method of distribution in effect on the Member's death; provided however;
(A) if any portion of the Member's Account
is payable to or for the benefit of a designated beneficiary,
such portion may be distributed over a period of time not
exceeding the life expectancy of such designated beneficiary,
provided distribution begins not later than one year after the
date of the Member's death or such later date as applicable
regulations under the Code may permit; or
(B) if the designated beneficiary referred
to in subsection 9(b)(ii)(A) is the Member's surviving
"spouse", (1) such spouse may elect to have distribution of
the Account balance commence within the 90 day period
following the Member's date of death (2) the date on which the
distribution is required to begin shall not be earlier than
the date on which the Member would have attained age 70 1/2,
(3) the benefit amount will be used to purchase a straight
life annuity for the spouse's life unless the spouse elects
another form of settlement permitted under the Plan and (4) if
the surviving spouse should die before distribution to such
spouse begins, this subsection 9(b)(ii) shall apply as if the
surviving spouse were the Member.
(iii) IRC 401(a)(31) COMPLIANCE.
(A) GENERAL RULE. This subsection applies to
distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
subsection, a distributes may elect, at the time and in the
manner prescribed by the Committee, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributes in a direct
rollover.
(B) DEFINITIONS.
(1) ELIGIBLE ROLLOVER DISTRIBUTION. An
eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributees
except that an eligible rollover distribution does not
include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) ELIGIBLE RETIREMENT PLAN. An eligible
retirement plan is an individual retirement account described
in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity
plan described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) DISTRIBUTEE. A distributee includes an
Employee or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined
in Section 414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.
(4) DIRECT ROLLOVER. A direct rollover is a
payment by the Plan to the eligible retirement plan specified
by the distributee.
(c) DEFERRED PAYMENTS AND INSTALLMENTS. A Member's Account
shall continue to be adjusted under subsection 6(g) through the Valuation date
coincident with or last preceding distribution.
The Committee, according to a uniform rule, may direct the
Trustee to segregate all or a portion of the benefit amount into a separate
investment account designed to protect principal and yield a reasonable
investment return consistent with the preservation of principal and the
obligation to make installment payments.
(d) ANNUITY PURCHASE. If benefits are to be paid in a form of
annuity under subsection 9(b)(i)(A), (B), (C) or (D), the Committee shall direct
the Trustee to apply the Member's vested Account balance to purchase an
appropriate nontransferable annuity contract and to deliver it to the Member.
(e) REQUIRED BENEFIT FORM.
(i) MARRIED MEMBER. If a Member is married on the
"annuity starting date" and his nonforfeitable Account balance exceeds or ever
exceeded $3,500, benefits will be distributed in the form described under
subsection 9(b)(i)(B) unless the Member, with the written consent of his
"spouse" witnessed by a notary public or a member of the Committee in a manner
prescribed by the Committee, elects an alternate form of settlement or alternate
beneficiary pursuant to Section 7 of the Plan. The Committee shall furnish to
such Member and such spouse a written notification of the availability of the
election hereunder at least 30 days but no more than 90 days before the Member's
"annuity starting date". The notification shall explain the terms and conditions
of the joint and survivor annuity described in subsection 9(b)(i)(B), the rights
of the spouse, the effect of electing not to take such annuity, and the right to
revoke a previous election to waive such annuity. The Member (and his spouse)
must complete the election on or before the "annuity starting date". The Member
may revoke an election not to take the joint and survivor annuity described in
subsection 9(b)(i)(B) or choose again to take such annuity at any time and any
number of times within the applicable election period. If a Member requests
additional information within 60 days after receipt of the notification of
election, the minimum election period shall be extended an additional 60 days
following his receipt of such additional information.
(ii) SINGLE MEMBER. If a Member is not married on
the date on which benefits are to commence and his nonforfeitable Account
balance exceeds or ever exceeded $3,500, benefits will be distributed in the
form described under subsection 9(b)(i)(A) unless the Member elects an alternate
form of settlement.
(iii) MEMBERS WITH ACCOUNTS UNDER $3,500. If a
Member's vested Account balance does not exceed (nor ever exceeded) $3,500,
benefits will be paid in a lump sum in accordance with subsection 9(b)(i)(E).
(iv) DEFINITIONS. The following definitions shall
apply to this Section 9 hereof:
(A) "Annuity starting date" shall mean the
first day of the first period for which an amount is paid as
an annuity or any other form.
(B) "Immediately distributable benefit"
shall mean the vested Account balance which could be
distributed to a Member (or surviving spouse) before said
Member attains (or would have attained if not deceased) the
later of Normal Retirement Age or age 62.
(C) "Qualified joint and survivor annuity"
shall mean an annuity described in subsection 9(b)(i)(B) for
the life of the Member with a survivor annuity for the life of
the spouse which is 50 percent of the amount of the annuity
which is payable during the joint lives of the Member and the
spouse and which is the amount of benefit which can be
purchased with the Member's vested account balance.
(D) "Spouse" (surviving spouse) shall mean
the spouse or surviving spouse of the Member, provided that a
former spouse will not be treated as the spouse or surviving
spouse if the Member re-marries within 1 year of the annuity
starting date, and remains married for the 1 year period
ending on the date of death. (f) LUMP SUM DISTRIBUTIONS.
Benefits distributed in one lump sum shall be adjusted under
subsection 6(g) through the Valuation Date coincident with or
last preceding distribution.
(g) WITHHOLDING. All distributions under the plan are subject
to federal, state and local withholding as required by applicable law as in
effect from time to time.
<PAGE>
10. IN-SERVICE DISTRIBUTIONS
(a) AGE 59-1/2. A Member who has attained age 59-1/2 shall
have the right to withdraw all or a portion of his vested Account balance as of
the Valuation Date next following the Member's timely delivery of request for
withdrawal to the Committee.
(b) HARDSHIP. A Member shall have the right to request an
in-service distribution from his vested Account balance for purposes of
hardship. A distribution is on account of hardship only if the distribution both
(i) is made on account of an immediate and heavy financial need of the Member
and (ii) is necessary to satisfy such financial need.
(c) NEED. A distribution shall be deemed to be made on account
of an immediate and heavy financial need of the Member if the distribution is on
account of (i) medical expenses described in Section 213(d) of the Code incurred
or necessary to obtain medical care by the Member, the Member's spouse or any
dependent of the Member (as defined in Section 152 of the Code); (ii) purchase
(excluding mortgage payments) of a principal residence for the Member; (iii)
payment of tuition for the next 12 months of post-secondary education for the
Member, the Member's spouse, child or any dependent of the Member (as defined in
Section 152 of the Code); or (iv) the need to prevent the eviction of the Member
from his principal residence or foreclosure on the mortgage of the Member's
principal residence. Further, the Committee, according to uniform rules, may
find that an immediate and heavy financial need exists in other circumstances
where it concludes that the elimination of the need is necessary to preserve the
health or well-being of the Member, his spouse or a dependent of the Member as
defined in Section 152 of the Code.
(d) SATISFACTION OF NEED. A distribution will be deemed to be
necessary to satisfy an immediate and heavy financial need of a Member only if
all of the requirements or conditions set forth below are satisfied or agreed to
by the Member, as appropriate.
(i) The distribution is not in excess of the
amount of the immediate and heavy financial need of the Member,
including, if requested, any amounts necessary to pay the income and
excise taxes arising on account of the distribution.
(ii) The Member has obtained all distributions,
other than hardship distributions, and all non-taxable loans currently
available under all plans subject to Section 415 of the Code maintained
by the Company and any Related Entity.
(iii) The Member's elective contributions under this
Plan and each other plan subject to Section 415 of the Code maintained
by the Company or a Related Entity in which the Member participates are
suspended for twelve full calendar months after receipt of the
distribution.
(iv) The Member does not make elective
contributions under this Plan or any other plan maintained by the
Company or a Related Entity for the year immediately following the
taxable year of the hardship distribution in excess of the applicable
limit under Section 402(g) of the Code for such next taxable year
reduced by the amount of the Member's elective contributions for the
taxable year of the hardship distribution.
(e) LIMITATIONS. Distributions from a Member's Salary Deferral
Account made on account of hardship shall be limited to the sum of (i) the
Member's elective contributions under the plan and (ii) income allocable to such
contributions credited to the Member's account as of December 31, 1988. Any
distribution must be for a minimum of $500 or, if less, the maximum distribution
allowed pursuant to this subsection. Distributions shall be subject to the
withholding requirements of subsection 9(g).
(f) AT ANY TIME. A Member shall have the right to withdraw all
or a portion of his Rollover Account as of any Valuation Date following the
Member's timely delivery of request for withdrawal to the Committee.
(g) SPOUSAL CONSENT. If a Member wishing to withdraw a portion
of his Accounts pursuant to this Section is married, any withdrawal hereunder
shall be subject to the rights of consent afforded to the Member's spouse.
<PAGE>
11. LOANS
(a) COMMITTEE DISCRETION. The Committee, in its discretion,
shall have the right to direct that a bona fide loan be made from a Member's
vested Account balance to any Member who requests the same. For purposes of this
Section 11, the term "Member" shall also include beneficiaries and terminated
employees with deferred vested account balances who are "parties in interest" as
defined in Section 3 of ERISA. All such loans shall be subject to the
requirements of this Section and such other rules which the Committee shall from
time to time prescribe. Eligibility for and the rules with respect to loans
shall be uniformly applied to all Members. Nothing in this Section shall require
the Committee to make loans available to Members.
(b) MINIMUM REQUIREMENTS. To the extent the Committee
authorizes loans to Members, such loans shall be subject to the following rules:
(i) PRINCIPAL AMOUNT. The principal amount of the
loan to a Member shall be subject to a minimum of one thousand dollars and may
not exceed, when added to the outstanding balance of all other loans to the
Member from the Plan, the lesser of (A) $50,000, reduced by the excess of the
highest outstanding balance of loans to the Member from the Plan during the
one-year period ending on the day before the date on which such loan was made
over the outstanding balance of loans to the Member from the Plan on the date on
which such loan is so made or (B) 50% of the Member's nonforfeitable Account on
the Valuation Date last preceding the date on which the loan is made.
(ii) MAXIMUM TERM. Generally, the term of the loan
may not exceed five years. However, if the Member demonstrates that the purpose
of a loan is to acquire a principal residence for the Member, then the maximum
term shall be fifteen years.
(iii) INTEREST RATE. The interest rate shall be
determined by the Committee from time to time at a rate equivalent to that
charged by major financial institutions in the community for comparable loans at
the time the loan is made.
(iv) REPAYMENT. The loan shall be repaid over its
term in level installment payments made at least quarterly. If the Member is an
active employee, the payments shall correspond to the Member's payroll period.
As a condition precedent to approval of the loan, the Member shall be required
to authorize payroll withholding in the amount of each installment.
(v) COLLATERAL. The loan shall be secured by the
Member's Account to the extent of the principal amount of the loan plus accrued
interest. No more than 50% of the Member's vested Account balance may be used to
secure a loan. The Committee, according to a uniform rule, may require a Member
to post additional collateral to secure a loan.
(vi) DISTRIBUTION OF ACCOUNT. If the
nonforfeitable portion of a Member's Account is to be distributed prior to the
Member's payment of all principal and accrued interest due on any loan to such
Member, the distribution shall include as an offset the amount of unpaid
principal and interest due on the loan.
(vii) NOTES. All loans shall be evidenced by a
note containing such terms and conditions as the Committee shall require.
(viii) MULTIPLE LOANS. A Member shall be permitted
only one outstanding loan at any time.
(c) ACCOUNTING. The principal amount of any loan shall be
treated as a separate earmarked investment of the borrowing Member. All payments
of principal and interest with respect to such loan shall be credited to a
separate account for the borrowing Member until redeposited into the Fund in
accordance with the Member's election.
(d) SPOUSAL CONSENT. If the Member is married, any loan made
pursuant to this Section where the vested Account of the Member is used to
secure such loan shall require the written consent of the Member's spouse. Such
written consent must be obtained within the ninety (90) day period prior to the
date the loan is made.
<PAGE>
12. TITLE TO ASSETS
No person or entity shall have any legal or equitable right or
interest in the contributions made by any Participating Company, or otherwise
received into the Fund, or in any assets of the Fund, except as expressly
provided in the Plan.
<PAGE>
13. AMENDMENT AND TERMINATION
(a) AMENDMENT. In accordance with the provisions of subsection
2(e)(i) hereof, the provisions of this Plan may be amended by the Company from
time to time and at any time in whole or in part, provided that no amendment
shall be effective unless the Plan as so amended shall be for the exclusive
benefit of the Members and their beneficiaries. No amendment to the Plan shall
be effective to the extent that it has the effect of decreasing a Member's
Account balance or eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment. Furthermore, if the
vesting schedule of the Plan is amended, in the case of an Employee who is a
Member as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Account balance will not be less than his
percentage computed under the plan without regard to such amendment.
(b) TERMINATION. While it is the Company's intention to
continue the Plan in operation indefinitely, the right is, nevertheless,
expressly reserved to terminate the Plan in whole or in part or discontinue
contributions in the event of unforeseen conditions. Any such termination,
partial termination or discontinuance of contributions shall be effected only
upon condition that such action is taken as shall render it impossible for any
part of the corpus of the Fund or the income therefrom to be used for, or
diverted to, purposes other than the exclusive benefit of the Members and their
beneficiaries.
(c) CONDUCT ON TERMINATION. If the Plan is to be terminated at
any time without establishment of a successor plan, the Company shall give
written notice to the Trustee which shall thereupon revalue the assets of the
Fund and the accounts of the Members as of the date of termination, partial
termination or discontinuance of contributions and, after discharging and
satisfying any obligations of the Plan, shall allocate all unallocated assets to
the Accounts of the Members at the date of termination, partial termination or
discontinuance of contributions as provided for in Section 6. Upon termination,
partial termination or discontinuance of contributions the Accounts of Members
affected thereby shall be nonforfeitable. The Committee, in its sole discretion,
shall instruct the Trustee either (i) to pay over to each affected Member his
Account or (ii) to continue to control and manage the Fund for the benefit of
the Members to whom distributions will be made in later periods at the time
provided in Section 8 and in the manner provided in Section 9. For purposes of
this paragraph, "successor plan" shall be as defined in Code Section 1.401(k) -
1(d)(3).
<PAGE>
14. LIMITATION OF RIGHTS
(a) ALIENATION. None of the payments, benefits or rights of
any Member shall be subject to any claim of any creditor of such Member and, in
particular, to the fullest extent permitted by law, shall be free from
attachment, garnishment, trustee's process, or any other legal or equitable
process available to any creditor of such Member. No Member shall have the right
to alienate, anticipate, commute, pledge, encumber or assign any of the benefits
or payments which he may expect to receive, contingently or otherwise, under
this Plan, except the right to designate a beneficiary or beneficiaries as
hereinabove provided. For purposes of this subsection, neither a loan made to a
Member nor the pledging of the Member's Account as security therefor, both
pursuant to Section 11, shall be treated as an assignment or alienation unless
such loan is subject to the tax imposed by Section 4975 of the Code.
(b) QUALIFIED DOMESTIC RELATIONS ORDER EXCEPTION. Subsection
14(a) shall not apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Member under a qualified domestic
relations order within the meaning of Section 414(p) of the Code.
In the case of any payment before a Member has
separated from service, such an order may require that payment of benefits be
made to an Alternate Payee prior to the date on which the Member is entitled to
a distribution under the Plan, regardless of whether the Member has attained the
earliest retirement age under Section 414(p)(4) of the Code. However, if the
present value of the amount awarded to the Alternate Payee by the qualified
domestic relations order is greater than three thousand five hundred dollars
($3,500), the Alternate Payee must consent in writing before an immediate
distribution may be made.
Payment made pursuant to this subsection may be made
to the Alternate Payee:
(i) as if the Member had retired on the date on
which payments are to begin, based on the Account balances actually
credited, and not considering any Participating Company subsidy for
early retirement, and
(ii) in any form in which such benefits may be paid
under the Plan to the Member (other than in the form of a joint and
survivor annuity with respect to the Alternate Payee and such Payee's
subsequent spouse).
For purposes of this subsection, "Alternate Payee"
shall mean the spouse, former spouse, child or other dependent of a Member who
is recognized by a Qualified Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under the Plan with respect
to a Member.
(c) EMPLOYMENT. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the
payment of any benefit shall be construed as giving any Member or Employee, or
any person whomsoever, any legal or equitable right against any Participating
Company, the Trustee or the Committee, unless such right shall be specifically
provided for in the Trust Agreement or the Plan or conferred by affirmative
action of the Committee or the Company in accordance with the terms and
provisions of the Plan or as giving any Member or Employee the right to be
retained in the employ of any Participating Company. All Members and other
Employees shall remain subject to discharge to the same extent as if the Plan
had never been adopted.
<PAGE>
15. MERGERS, CONSOLIDATIONS OR TRANSFERS OF PLAN ASSETS
In the case of any Plan merger or Plan consolidation with, or
transfer of assets or liabilities of the Plan to, any other qualified retirement
plan, each Member in the Plan must be entitled to receive a benefit immediately
after the merger, consolidation, or transfer (if the Plan were then to
terminate) which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had been terminated).
<PAGE>
16. PARTICIPATION BY RELATED ENTITIES
(a) COMMENCEMENT. Any entity which is a Related Entity with
respect to the Company may, with the permission of the Board of Directors, elect
to adopt this Plan and the accompanying Trust Agreement.
(b) TERMINATION. The Company may, by action of the Board of
Directors, determine at any time that any such Participating Company shall
withdraw and establish a separate plan and fund. The withdrawal shall be
effected by a duly executed instrument delivered to the Trustee instructing it
to segregate the assets of the Fund allocable to the Employees of such
Participating Company and pay them over to the separate fund.
(c) SINGLE PLAN. The Plan shall at all times be administered
and interpreted as a single plan for the benefit of the Employees of all
Participating Companies.
(d) DELEGATION OF AUTHORITY. Each Participating Company, by
adopting the Plan, acknowledges that the Company has all the rights and duties
thereof under the Plan and the Trust Agreement, including the right to amend the
same.
(e) DISPOSITION OF ASSETS OR SUBSIDIARY. Distributions may be
made in connection with the Company's disposition of assets or a subsidiary to
those Members who continue in employment with the purchaser of the assets or
with the subsidiary, provided that the purchaser or the subsidiary does not
maintain the Plan after the disposition.
(f) FORM OF DISTRIBUTIONS. All distributions made pursuant to
this Section 16 shall be lump sum distributions as defined in Code Section
402(d)(4), without regard to subparagraphs (A)(i) through (iv), (B), and (F) of
said Code Section.
<PAGE>
17. TOP-HEAVY REQUIREMENTS
(a) GENERAL RULE. For any Plan Year in which the Plan is a
top-heavy plan or included in a top-heavy group as determined under this
Section, the special requirements of this Section shall apply. The Plan shall be
a top-heavy plan (if it is not included in an "aggregation group") or a plan
included in a top-heavy group (if it is included in an "aggregation group") with
respect to any Plan Year if the sum as of the "determination date" of the
"cumulative accounts" of "key employees" for the Plan Year exceeds 60% of a
similar sum determined for all "employees", excluding "employees" who were "key
employees" in prior Plan Years only.
(b) DEFINITIONS. For purposes of this Section, the following
definitions shall apply to be interpreted in accordance with the provisions of
Section 416 of the Code and the regulations thereunder.
(i) "AGGREGATION GROUP" shall mean the plans of
each Participating Company or a Related Entity included below:
(A) each such plan in which a "key employee"
is a participant;
(B) each other such plan which enables any
plan in subsection (A) above to meet the requirements of
Section 401(a)(4) or 410 of the Code;
(C) each other plan not required to be
included in the "aggregation group" which the Company elects
to include in the "aggregation group" in accordance with the
"permissive aggregation group" rules of the Code if such group
would continue to meet the requirements of Sections 401(a)(4)
and 410 of the Code with such plan being taken into account;
and
(D) each terminated plan of the Company that
was maintained within the last five (5) years ending on the
"determination date".
(ii) "CUMULATIVE ACCOUNT" for any "employee" shall
mean the sum of the amount of his accounts under this Plan plus all defined
contribution plans included in the "aggregation group" (if any) as of the most
recent valuation date for each such plan within a twelve-month period ending on
the "determination date", increased by any contributions due after such
valuation date and before the "determination date" plus the present value of his
accrued benefit under all defined benefit pension plans included in the
"aggregation group" (if any) as of the "determination date". For a defined
benefit plan, the present value of the accrued benefit as of any particular
determination date shall be the amount determined under (A) the method, if any,
that uniformly applies for accrual purposes under all plans maintained by the
Participating Companies and all Related Entities, or (B) if there is no such
method, as if such benefit accrued not more rapidly than under the slowest
accrual rate permitted under the fractional accrual rule of Section 411(b)(1)(C)
of the Code, as of the most recent valuation date for the defined benefit plan,
under actuarial equivalent factors specified therein, which is within a
twelve-month period ending on the determination date. For this purpose, the
valuation date shall be the date for computing plan costs for purposes of
determining the minimum funding requirement under Section 412 of the Code.
"Cumulative accounts" of "employees" who have not performed an Hour of Service
for any Participating Company or Related Entity for the five-year period ending
on the "determination date" shall be disregarded. An "employee's" "cumulative
account" shall be increased by the aggregate distributions during the five-year
period ending on the "determination date" made with respect to him under any
plan in the "aggregation group". Rollovers and direct plan-to-plan transfers to
this Plan or to a plan in the "aggregation group" shall be included in the
"employee's" "cumulative account" unless the transfer is initiated by the
"employee" and made from a plan maintained by an employer which is not a
Participating Company or Related Entity.
(iii) "DETERMINATION DATE" shall mean with respect
to any Plan Year the last day of the preceding Plan Year; however, for the first
Plan Year the term shall mean the last day of such Plan Year.
(iv) "EMPLOYEE" shall mean any person (including a
beneficiary thereof) who has or had an Account held under this Plan or a plan in
the "aggregation group" including this Plan at any time during the Plan Year or
any of the four preceding Plan Years. Any "employee" other than a "key-employee"
described in subsection 17(b)(v) shall be considered a "non-key employee" for
purposes of this Section 17.
(v) "KEY EMPLOYEE" shall mean any "employee" or
former "employee" (including a beneficiary thereof) who is, at any time during
the Plan Year, or was, during any one of the four preceding Plan Years any one
or more of the following:
(A) an officer of a Participating Company or
a Related Entity whose annual compensation (as defined in
subsection 17(b)(vi)) exceeds 50% of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code, unless 50 other
such officers (or, if lesser, a number of such officers equal
to the greater of three or 10% of the "employees") have higher
annual compensation;
(B) one of the ten persons employed by a
Participating Company or Related Entity having annual
compensation (as defined below) greater than the limitation in
effect under Section 415(c)(1)(A) of the Code, and owning (or
considered as owning within the meaning of Section 318 of the
Code) more than 1/2% interest as well as one of the largest
interests in all Participating Companies or Related Entities.
For purposes of this subsection (B), if two "employees" have
the same interest, the one with the greater compensation shall
be treated as owning the larger interest;
(C) any person owning (or considered as
owning within the meaning of Section 318 of the Code) more
than 5% of the outstanding stock of a Participating Company or
a Related Entity or stock possessing more than 5% of the total
combined voting power of such stock;
(D) a person who would be described in
subsection (C) above if 1% were substituted for 5% each place
the same appears in subsection (C) above, and who has annual
compensation of more than $150,000.
For purposes of determining ownership under this
subsection, Section 318(a)(2)(C) of the Code shall be applied by substituting 5%
for 50%.
(vi) "COMPENSATION" For purposes of this Section
17, "compensation" shall mean compensation as defined in Section 415(c)(3) of
the Code, but including amounts contributed by the employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross income under
Section 125, Section 402(a)(8), Section 402(h) or Section 403(b) of the Code.
(c) COMBINED BENEFIT LIMITATION. For purposes of the
calculation of the combined limitation of subsection 5(c), "1.0" shall be
substituted for "1.25" each place the same appears in that subsection if either
(i) the "cumulative accounts" of "key employees" exceeds 90% of the aggregate
for all "employees" or (ii) the Participating Companies' contribution allocated
to Members who are not "key employees" does not at least equal 4% of
compensation (as defined in subsection 5(d)) or the minimum defined benefit
under a defined benefit plan does not meet the requirement of Section
416(h)(2)(A)(ii) of the Code.
(d) VESTING. The schedule set forth below shall be substituted
for the schedule contained in subsection 8(d)(ii) to the extent it provides for
more rapid vesting.
<TABLE>
<CAPTION>
NONFORFEITABLE
YEARS OF SERVICE PERCENTAGE
----------------------------- --------------
<S> <C> <C>
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
</TABLE>
The schedule above shall apply to all benefits
accrued as of the date the schedule becomes effective and all benefits accrued
for Plan Years thereafter to which this Section applies. If the Plan ceases to
be top-heavy, no benefit which became nonforfeitable under the schedule above
shall become forfeitable. For Members with three Years of Service or more, the
schedule shall continue to apply to future accruals to the extent it provides
for more rapid vesting.
(e) MINIMUM CONTRIBUTION. Minimum Participating Company
contributions and forfeitures for a Member who is not a "key employee" shall be
required in an amount equal to the lesser of 3% of compensation (as defined in
subsection 17(b)(vi) herein) or the highest percentage of Participating Company
contributions and forfeitures expressed as a percentage of the first $200,000
(or an increased amount permitted under a cost of living adjustment),
contributed for any "key employee" under Section 4. (Effective for Plan Years
beginning after December 31, 1993, the $200,000 limitation shall be reduced to
$150,000 or any indexed amount pursuant to Code Section 401(a)(17).) If the
highest rate allocated to a "key employee" for a year in which the plan is top
heavy is less than 3%, amounts attributable to a salary reduction shall be
included in determining contributions made on behalf of "key employees." For
purposes of this subsection, employer social security contributions shall be
disregarded. Each "non-key employee" of a Participating Company who has not
separated from service at the end of the Plan Year and who has satisfied the
eligibility requirements of subsection 3(a) shall receive any minimum
contribution provided under this Section 17 without regard to (i) whether he is
credited with 1,000 Hours of Service in the Plan Year (ii) earnings level for
the Plan Year or (iii) whether he elects to make contributions under subsection
4(a). If an "employee" participates in both a defined benefit plan and a defined
contribution plan, the minimum benefit shall be provided under the defined
benefit plan. If an "employee" participates in another defined contribution
plan, the minimum benefit shall be provided under the other defined contribution
plan.
<PAGE>
18. MISCELLANEOUS
(a) INCAPACITY. If the Committee determines that a person
entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Committee may make payments to such person for his benefit, or apply the
payments for the benefit of such person in such manner as the Committee
considers advisable. Any payment of a benefit in accordance with the provisions
of this subsection shall be a complete discharge of any liability to make such
payment.
(b) REVERSIONS. In no event, except as provided herein, shall
the Trustee return to a Participating Company any amount contributed by it to
the Plan.
(i) MISTAKE OF FACT. In the case of a contribution
made by a good faith mistake of fact, the Trustee shall return the erroneous
portion of the contribution, without increase for investment earnings, but with
decrease for investment losses, if any, within one year after payment of the
contribution to the Fund.
(ii) DEDUCTIBILITY. To the extent deduction of any
contribution determined by the Company in good faith to be deductible is
disallowed, the Trustee, at the option of the Company, shall return that portion
of the contribution, without increase for investment earnings but with decrease
for investment losses, if any, for which deduction has been disallowed within
one year after the disallowance of the deduction.
(iii) INITIAL QUALIFICATION. In the event there is
a determination that the Plan does not initially satisfy all applicable
requirements of Section 401 of the Code, all contributions made by a
Participating Company incident to that initial qualification shall be returned
to the Participating Company by the Trustee within one year after the date on
which the initial qualification is denied, but only if the Company submitted an
application for such initial determination by the due date of the Company's
income tax return for the taxable year in which the Plan was adopted, or such
later date as the Secretary may prescribe.
(iv) LIMITATION. No return of contribution shall
be made under this subsection which adversely affects the Plan's qualified
status under regulations, rulings or other published positions of the Internal
Revenue Service or reduces a Member's Account below the amount it would have
been had such contribution not been made.
This subsection shall not preclude refunds made in
accordance with subsections 4(b)(i), 4(d)(iii) and 4(g)(ii).
(c) EMPLOYEE DATA. The Committee or the Trustee may require
that each Employee provide such data as it deems necessary upon his becoming a
Member in the Plan. Each Employee, upon becoming a Member, shall be deemed to
have approved of and to have acquiesced in each and every provision of the Plan
for himself, his personal representatives, distributees, legatees, assigns, and
beneficiaries.
(d) LAW GOVERNING. This Plan shall be construed, administered
and applied in a manner consistent with the laws of the State of New Jersey.
(e) PRONOUNS. The use of the masculine pronoun shall be
extended to include the feminine gender wherever appropriate.
(f) INTERPRETATION. The Plan is a profit sharing plan
including a qualified, tax exempt trust under Sections 401(a) and 501(a) of the
Code and a qualified cash or deferred arrangement under Section 401(k)(2) of the
Code. The Plan shall be interpreted in a manner consistent with its satisfaction
of all requirements of the Code applicable to such a plan.
<PAGE>
IN WITNESS WHEREOF, and as evidence of the adoption of this
Plan by the Company, it has caused the same to be signed by its officers
thereunto duly authorized, and its corporate seal to be affixed thereto, this
_____ day of _____________________ 1994.
Attest: COMPUTER HORIZONS CORP.
By
Secretary Name:
Title:
[Corporate Seal]
<PAGE>
APPENDIX A - TRA '86 COMPLIANCE EFFECTIVE DATES
The following Plan provisions have the Effective Dates listed below in
compliance with Sections 401 and 403(a) of the Internal Revenue Code, as amended
by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986,
the Omnibus Budget Reconciliation Act of 1987, the Technical and Miscellaneous
Revenue Act of 1988, the Omnibus Budget Reconciliation Act of 1989, the Omnibus
Budget Reconciliation Act of 1993 and pertaining to the status of any related
trusts under Section 501(a):
<TABLE>
<CAPTION>
PLAN SECTION PROVISION EFFECTIVE DATE
- ------------ --------- --------------
<S> <C> <C>
1(i) Inclusion of 401(k) contributions First day of 1987 Plan Year
in definition of "compensation"
for all Plan Sections
1(i) Compensation limited to First day of 1989 Plan Year
$200,000 for benefit accrual and and first day of 1994 Plan
contribution allocation (with Year, respectively
COLA adjustments); Compensation
limited to $150,000 (with COLA
adjustments)
1(l) Definition of "leased employee" January 1, 1987
and its inclusion in the definition
of "Employee"
1(o) Aggregation of Family Members First day of 1987 Plan Year
with Highly Compensated
Employees
1(r) Definition of "Highly First day of 1987 Plan Year
Compensated Employee"
3(a) 1 year maximum waiting period First day of 1989 Plan Year
for eligibility to make 401(k)
contributions
4(b) Elective deferral limit (with January 1, 1987
COLA adjustments) and rules for
processing refunds
4(d) 401(k) discrimination testing, First day of 1987 Plan Year
rules for determining and
refunding excess contributions,
et al
4(g)(i)-(vii) 401(m) discrimination testing, First day of 1987 Plan Year
rules for determining and
refunding excess aggregate
contributions, et al
<PAGE>
<CAPTION>
PLAN SECTION PROVISION EFFECTIVE DATE
- ------------ --------- --------------
<S> <C> <C>
4(g)(viii) Multiple use discrimination test All Plan Years beginning after
(as modified by Revenue December 31, 1988 or such
Procedure 89-65) later date provided in 1.401(m)-1(g)
5 Definition of "Annual Additions" First day of 1987 Plan Year
9(a)(ii) Date of commencement for January 1, 1989
Required Minimum Distribution
10 Rules for hardship distributions First day of 1989 Plan Year
11 Rules for qualified plan loans First day of 1989 Plan Year
11(b)(iv) Loan repayment provisions Loans made, renewed,
renegotiated, modified or
extended on or after January
1, 1987
17(b)(ii) Fractional accrual rule for First day of 1987 Plan Year
determination of Top Heavy
status
</TABLE>
Exhibit 4.5
COMPUTER HORIZONS CORP. EMPLOYEE'S SAVINGS PLAN
TRUST AGREEMENT
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 Trust
1.2 Trustee
ARTICLE 2
ESTABLISHMENT OF THE TRUST
2.1 Trust
2.2 Effective Date
ARTICLE 3
PAYMENTS TO THE TRUST FUND
3.1 Receipt of Payments
ARTICLE 4
POWERS AND DUTIES OF THE TRUSTEE
4.1 General
4.2 Fiduciary Standards
4.3 Delegation of Responsibilities
4.4 Investment Manager
4.5 Compensation and Expenses
4.6 Successor Trustee
4.7 Limitation of Duties
ARTICLE 5
INVESTMENT POWERS
5.1 General
5.2 Voting and Other Rights
5.3 ERISA Section 404(c)
ARTICLE 6
ACCOUNTS AND RECORDS
6.1 Individual Accounts
6.2 Reports
6.3 Valuation
ARTICLE 7
PAYMENTS FROM THE TRUST FUND
7.1 Payments Generally
ARTICLE 8
SPENDTHRIFT PROVISIONS
8.1 No Assignment
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification
ARTICLE 10
RESIGNATION OR REMOVAL OF TRUSTEE
10.1 Notice, Transfer of Assets, Release of Liability
ARTICLE 11
AMENDMENT AND TERMINATION OF THE TRUST
11.1 Amendment
11.2 Termination
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit
12.2 Invalidity of Certain Provisions
12.3 Multiple Trustees
12.4 Conflict with Plan
12.5 Gender
12.6 Mailing Notices
12.7 Submitting Notices
12.8 Governing Law
<PAGE>
COMPUTER HORIZONS CORP. EMPLOYEE'S SAVINGS PLAN
TRUST AGREEMENT
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1996
WHEREAS, Computer Horizons Corp., a corporation organized under the
laws of the State of New York, and certain of its affiliates (the "Company"),
established the Computer Horizons Corp. Employee's Savings Plan (the "Plan") for
certain of its eligible employees, effective April 1, 1983;
WHEREAS, the Plan is designed to be a profit sharing plan within the
meaning of Section 401(a)(27) of the Internal Revenue Code of 1986, as amended
(the "Code"), is intended to qualify under Section 401(a) of the Code;
WHEREAS, the Company established a trust that is intended to be exempt
from federal income taxation under Section 501(a) of the Code (the "Trust"),
effective April 1, 1983;
WHEREAS, John J. Cassese and Bernhard D. Hubert accepted appointment as
Trustee (individually and collectively, the "Trustee") of the Trust, effective
as of April 1, 1983;
WHEREAS, effective January 1, 1996, the Plan is intended to constitute
an "eligible individual account plan" within the meaning of Section 407(d)(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
permitted under Section 408(e) of ERISA to acquire or sell "qualifying employer
securities" of the Company, within the meaning of Section 407(d)(5) of ERISA
("Employer Securities");
WHEREAS, the Company desires to amend and restate the Trust;
NOW, THEREFORE, the Company and the Trustee hereby agree as follows,
effective January 1, 1996:
<PAGE>
ARTICLE 1
DEFINITIONS
Unless the context of this Trust Agreement clearly indicates otherwise, the
terms defined in Article 1 of the Plan, of which this Trust Agreement forms a
part, shall, when used herein, have the same meaning as in the Plan. The
following words and phrases shall have the meaning set forth below, unless a
different meaning is plainly required by the context:
1.1 Trust. The Computer Horizons Corp. Employee's Savings Plan-Trust,
as originally established effective April 1, 1983, as amended and restated
herein and as it may be amended from time to time.
1.2 Trustee. John J. Cassese and Bernhard D. Hubert and/or any
successor trustee that may be appointed by the Board of Directors.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
2.1 Trust. The Company hereby establishes this Trust for the benefit of
Members and their beneficiaries under the Plan, consisting of such contributions
as shall be received by the Trustee from the Company in accordance with the
provisions of the Plan. The Trustee shall receive such contributions in Trust
and shall hold and administer the same as a single trust fund, shall invest and
reinvest the same and the income therefrom, without distinction between
principal and income, and shall pay over and distribute the net income therefrom
and the principal thereof in accordance with the provisions of this Trust
Agreement.
2.2 Effective Date. This Trust Agreement is effective as of January 1,
1996.
ARTICLE 3
PAYMENTS TO THE TRUST FUND
3.1 Receipt of Payments. The Company shall from time to time remit
contributions under the Plan to the Trustee. Such contributions, together with
any income thereon, shall be held in trust on behalf of Members and their
beneficiaries. The Trustee shall be accountable to the Company, but shall have
no right or duty to enforce collection of any contribution from the Company.
ARTICLE 4
POWERS AND DUTIES OF THE TRUSTEE
4.1 General. The Trustee shall hold the funds and assets received under
the Plan subject to the terms and purposes of the Plan and this Trust. The
Trustee shall be responsible only for such funds and assets as shall actually be
received by it as Trustee hereunder.
4.2 Fiduciary Standards. The Trustee shall discharge its duties with
respect to the Trust and the Plan solely in the interest of the Members and
their beneficiaries, and according to the following requirements:
(a) For the exclusive purpose of providing benefits to Members
and their beneficiaries, and defraying reasonable expenses of administering the
Plan and this Trust;
(b) With the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims;
(c) By diversifying the investments of this Trust to minimize
the risk of large losses, unless under the circumstances, it is clearly not
prudent to do so; provided, however, that up to one-hundred (100) percent of the
Trust assets may be invested in Employer Securities; and
(d) In accordance with the terms of the Plan and Trust insofar
as they are consistent with Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
4.3 Delegation of Responsibilities.
(a) The Trustee may delegate, by instrument in writing, any of
the powers or functions of the Trustee hereunder other than the investment,
management or control of the Trust assets, including (without limitation):
(1) Maintaining and accounting for this Trust and Accounts
under the Plan;
(2) Distribution of benefits as directed by the Plan
Administrator; and
(3) Preparation of the annual report on the status of the
Trust.
The agent so appointed may act as agent for the Trustee, without investment
responsibility, for fees to be mutually agreed upon by the Company and the agent
and paid in the same manner as Trustee's fees. The Trustee shall not be
responsible for any act or omission of the agent arising from any such
delegation, except to the extent provided in Article 9.
4.4 Investment Manager. The Trustee may, in its sole discretion,
appoint one or more Investment Managers, as defined in Section 3(38) of ERISA.
During the term of such appointment, the Investment Manager, subject to the
right of the Trustee to establish general investment guidelines and
restrictions, shall have the sole responsibility for the investment and
reinvestment of that portion of the Trust Fund subject to its investment
management. The Trustee shall maintain a separate account within the Trust for
the assets of the Trust subject to investment management. The Trustee may
terminate its appointment of an Investment Manager at any time. The appointment
and specific responsibilities of the Investment Manager shall be evidenced by a
written agreement between the Trustee and the Investment Manager, a copy of
which shall be filed with the Trustee.
4.5 Compensation and Expenses. Except with respect to a Trustee who is
an Employee of the Company, the Trustee shall receive each year as compensation
for its services hereunder, such amount as it and the Company agree to be
reasonable and provided that the payment of compensation is not a prohibited
transaction under ERISA or the Code. If the Trustee is an Employee of the
Company, the Trustee shall not receive any compensation for its services
hereunder. In addition, the Trustee shall be entitled to reimbursement for all
reasonable expenses incurred by it in the performance of its duties hereunder,
including reasonable fees for legal services rendered to the Trustee (whether in
connection with any litigation or otherwise) and all other proper charges and
disbursements. Such compensation, if any, and expenses shall be a charge upon
this Trust and shall be withdrawn from this Trust, unless the amount of any such
compensation and expenses shall be separately paid by the Company. Furthermore,
unless separately paid by the Company, all other reasonable expenses of
administering the Plan shall also be a charge upon this Trust and shall be
withdrawn from this Trust.
4.6 Successor Trustee. The appointment of an additional or successor
Trustee shall become effective upon acceptance in writing of such appointment by
the additional or successor Trustee. The additional or successor Trustee may be
either a corporate Trustee or an individual Trustee and shall have no liability
for anything done or omitted to be done prior to the effective date of his
appointment as Trustee. Every successor or co-Trustee appointed to and accepting
a trusteeship hereunder shall have all the rights, title, powers, duties,
exemptions and limitations of the original Trustee.
4.7 Limitation of Duties. The Company, any of its officers, directors,
or employees, and the Plan Administrator shall not have any duties or
obligations with respect to this Trust, except those expressly set forth herein
and in the Plan.
ARTICLE 5
INVESTMENT POWERS
5.1 General.
(a) Except as otherwise specifically required in this Article
5, the Trustee shall have the following powers and authority in the
administration of this Trust:
(1) To purchase, receive or subscribe to any
securities or other property, including, without limitation, "qualifying
employer securities," as defined in Section 407(d)(5) of ERISA, and to retain in
trust such securities or other property including life insurance.
(2) To sell for cash or on credit, to grant options,
convert, redeem exchange for other securities or other property, or otherwise to
dispose of any securities or other property at any time held by it.
(3) To settle, compromise or submit to arbitration
any claims, debts, or damages, due or owing to or for this Trust, to commence or
defend suits or legal proceedings in any court of law or before any other body
or tribunal.
(4) To exercise any conversion privilege or
subscription right available in connection with any securities or other property
at any time held by it; to oppose or to consent to the reorganization,
consolidation, merger, or readjustment of the finances of any corporation,
company or association, or to the sale, mortgage, pledge or lease of the
property of any corporation, company or association any of the securities of
which may at any time be held by them and to do any act with reference thereto,
including the exercise of options, the making of agreements or subscriptions and
the payment or expenses, assessments or subscriptions, which may be deemed
necessary or advisable in connection therewith, and to hold and retain any
securities or other property which it may so require.
(5) To exercise, personally or by general or by
limited power of attorney, any right, including the right to vote, appurtenant
to any securities or other property held by it at any time.
(6) To borrow money from any lender in such amounts
and upon such terms and conditions as shall be deemed advisable or proper to
carry out the purpose of this Trust and to pledge any securities or other
property for the repayment of any such loan.
(7) To manage, administer, operate, lease for any
number of years (regardless of any restrictions on leases made by fiduciaries),
develop, improve, repair, alter, demolish, mortgage, pledge, grant options with
respect to or otherwise deal with any real property or interest therein at any
time held by it, and to hold any such real property in its own name or in the
name of a nominee, with or without the addition of words indicating that such
property is held in a fiduciary capacity, all upon such terms and conditions as
may be deemed advisable.
(8) To renew, extend or participate in the renewal or
extension of any mortgage, upon such terms as may be deemed advisable, and to
agree to a reduction in the rate of interest on any mortgage or any guarantee
pertaining thereto in any manner and to any extent that may be deemed advisable
for the protection of this Trust Fund or the preservation of the value of the
investment; to waive any default whether in the performance of any covenant or
condition of any mortgage or in the performance of any guarantee, or to enforce
any such default in such manner and to such extent as may be deemed advisable;
to exercise and enforce any and all rights of foreclosure, to bid in property at
foreclosure, to take a deed in lieu of foreclosure with or without paying a
consideration therefor and in connection therewith to release the obligation on
the bond secured by such mortgage or guarantee.
(9) To keep portions of the Trust Fund in cash or
cash balances pending investment or to meet anticipated payout from the Trust
Fund.
(10) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation.
(11) To register any securities held hereunder in the
Trustee's own name or in the name of a nominee with or without the addition of
words indicating that such securities are held in a fiduciary capacity and to
hold any securities in bearer form.
(12) To form corporations and to create trusts to
hold title to any securities or other property, all upon such terms and
conditions as may be deemed advisable.
(13) To the extent set forth in the Plan, to operate
the Plan in a manner consistent with Section 404(c) of ERISA.
(14) To make, execute and deliver, as Trustee, any
and all deeds, leases, mortgages, conveyances, waivers, releases or other
instruments in writing necessary or desirable for the accomplishment of any of
the foregoing powers.
(15) Generally to do all acts, whether or not
expressly authorized, which the Trustee may deem necessary or desirable for the
protection of the Trust Fund.
(b) Notwithstanding anything herein to the contrary, in no
event shall the Trustee engage in any transaction that would be prohibited under
ERISA.
5.2 Voting and Other Rights. Notwithstanding anything herein to the
contrary, the Trustee shall follow the voting and tendering instructions
provided in Section 18 of the Plan, provided that any such action or inaction
shall not be contrary to ERISA.
5.3 ERISA Section 404(c). The Company intends that the Plan and Trust
conform to Section 404(c) of ERISA and Department of Labor Regulations Section
2550.404c-1 and that the Plan and Trust be operated and administered in
accordance with such provisions. With respect to any investment election or
other direction by a Member (or, in the event of the Member's death, the
Member's beneficiary), none of the Trustee, the Administrator, the Committee or
the Company shall be under any duty to question any such direction of a Member
or beneficiary. The Trustee shall comply as promptly as is practicable with the
directions given by a Member or by a beneficiary in accordance with the terms of
the Plan. None of the Trustee, the Administrator, the Committee or the Company
shall be responsible or liable for any loss or expense which may arise from or
result from compliance with any directions from the Member (or, in the event of
the Member's death, the Member's beneficiary).
ARTICLE 6
ACCOUNTS AND RECORDS
6.1 Individual Accounts. The Trustee shall keep full accounts of all
receipts and disbursements. Each Member's Account in the Plan shall be kept on
an individual basis. The Trustee's records with respect to the assets under this
Trust shall be open to inspection during reasonable business hours.
6.2 Reports.
(a) The Trustee shall render a written report to the Board of
Directors as soon as practicable, but not more than ninety (90) days, after the
end of each Plan Year. The report shall contain a complete accounting showing
the total assets in this Trust as of the Valuation Date and the fair market
value placed on each asset as of that date, as well as a statement of purchases,
sales and any investment charges and all income, expenses, and disbursements
since the last such report. Such report shall be in such form and contain such
other information concerning the Plan and the administration thereof as shall be
required in writing by the Company or by regulations of the Secretary of Labor
or the Secretary of Treasury.
(b) The approval of the Board of Directors or the lack of
written objection within ninety (90) days after submission of any report or
accounting by the Trustee shall be a complete release and discharge of the
Trustee as to the Company, provided that such report or accounting does not
contain any statement that is a result of a breach of any fiduciary duty by the
Trustee or it does not omit or conceal such breach.
6.3 Valuation. The Fund and each Investment Category shall be valued by
the Trustee at Fair Market Value as of each Valuation Date, with appropriate
allocations and adjustments for any items of income, expenses, gains and losses,
forfeitures and all other transactions for the period following the preceding
Valuation Date. The net income thus arrived at, exclusive of forfeitures (and
net income thereon), shall be allocated on a basis of Account balances and in a
fair and nondiscriminatory manner which shall reflect the interests of the
Members during such period in the Investment Categories and in the Fund. In
addition, the Account of each Member shall bear any fees of the Trustee or
Investment Category charged with regard to maintaining his or her Account that
are not paid by the Company. The interest of each Member in the Company Stock
Fund shall be expressed as whole or fractional shares of the Investment Category
as of a Valuation Date and shall be determined by using share accounting. The
interest of each Member in each Investment Category (other than the Company
Stock Fund) shall be expressed in accordance with the valuation methods and
practices of the entity maintaining the Investment Category.
ARTICLE 7
PAYMENTS FROM THE TRUST FUND
7.1 Payments Generally. The Trustee shall make payments out of the
assets of this Trust to such person, in such manner and in such amounts as
directed in writing by the Plan Administrator.
ARTICLE 8
SPENDTHRIFT PROVISIONS
8.1 No Assignment. Except to the extent required or permitted by the
Plan or by applicable law, the interest of Members and beneficiaries in this
Trust and in the net earnings and profits thereof may not be assigned or used as
collateral for a loan and shall not be subject to garnishment, attachment, levy
or execution of any kind for the debts or defaults of the Trustee or of any
person, natural or legal, having an interest in this Trust.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification. The Company, to the fullest extent permitted by
law and the Certificate of Incorporation and By-laws of the Company and, to the
extent not covered by insurance, shall indemnify and hold each Trustee harmless
from and against any liability, cost, loss, or other expense (including, but not
limited to, the payment of attorneys' fees, judgments, fines, excise taxes or
penalties and amounts paid or to be paid in settlement of a litigation or other
proceeding) that the Trustee may incur or incurred in connection with this Trust
or the Plan, unless such liability, cost, loss or other expense arises from such
Trustee's fraud or gross negligence. The Company recognizes that a burden of
litigation may be imposed upon the Trustee as a result of some act or
transaction for which it has no responsibility or over which it has no control
under this Trust. Therefore, to the fullest extent permitted by law, the Company
agrees to indemnify and hold harmless and, if requested, defend each Trustee
from any expenses (including counsel fees) incurred by the Trustee in
prosecuting or defending against any litigation or other proceeding, unless it
is ultimately determined that the Trustee committed fraud or has been grossly
negligent. Such right of indemnification shall also include the right to be paid
by the Company for expenses incurred or reasonably interpreted to be incurred in
defending any such suit, action or proceeding in advance of its disposition;
provided, however, that the payment of expenses in advance of the settlement to
such disposition of a suit, action or proceeding, shall be made only upon
delivery to the Company of an undertaking by or on behalf of such Trustee to
repay all amounts so advanced if it is ultimately determined that such Trustee
committed fraud or has been grossly negligent.
ARTICLE 10
RESIGNATION OR REMOVAL OF TRUSTEE
10.1 Notice, Transfer of Assets, Release of Liability. The Trustee may
resign at any time upon sixty (60) days notice in writing to the Company, and
may be removed by the Company at any time upon sixty (60) days notice in writing
to the Trustee. Upon such resignation or removal, the Company shall appoint a
successor Trustee. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and pay over to
such successor Trustee the assets of the Trust and all records pertaining
thereto, provided that any successor Trustee shall agree not to dispose of any
such records without the Trustee's consent. The successor Trustee shall be
entitled to rely on all accounts, records, and other documents received by it
from the Trustee, and shall not incur any liability whatsoever for such
reliance. Upon the assignment, transfer, and payment over of the assets of the
Trust, and obtaining a receipt thereof from the successor Trustee, the Trustee
shall be released and discharged from any and all claims, demands, duties, and
obligations arising out of this Trust Agreement and its management of this
Trust, excepting only claims based upon the Trustee's fraud or gross negligence.
The successor Trustee shall hold the assets paid over to it under terms similar
to those of this Trust Agreement.
ARTICLE 11
AMENDMENT AND TERMINATION OF THE TRUST
11.1 Amendment. The Company, by action of its Board of Directors (or a
duly authorized committee thereof) in accordance with its by-laws, may at any
time amend, in whole or in part, any or all of the provisions of this Trust
Agreement provided that no such amendment may affect the rights, duties, or
responsibilities of the Trustee without its consent and, provided further, that
no such amendment may permit any part of the corpus or income of the Trust Fund
to be used for or diverted to purposes other than for the exclusive benefit of
the Members under the Plan and their beneficiaries prior to the satisfaction of
all liabilities to such persons.
11.2 Termination. The Company, by action of its Board of Directors for
a duly authorized committee thereof in accordance with its by-laws, may
terminate the Trust created by this Trust Agreement at any time by giving notice
in writing to the Trustee, which notice shall state the date on which the
termination shall be effective. Upon termination of the Trust, the Trustee shall
proceed to liquidate, in accordance with the provisions of this Trust Agreement
and the Plan, the assets of the Trust. Until the assets of the Trust have been
fully liquidated, the Trust and all of the provisions of this Trust Agreement
shall remain in full force and effect, but only for the purpose of accomplishing
the liquidation.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit. This Trust is created for the exclusive purpose
of providing benefits to the Members in the Plan and their beneficiaries and
defraying reasonable expenses of administering this Trust and the Plan and shall
be interpreted in a manner consistent with its being an employees' trust, as
defined in section 401(a) of the Code. Therefore, under no circumstances, except
as provided in this Section 12.1 shall any funds contributed to this Trust, any
assets of this Trust, or income of this Trust ever revert to or be used for or
diverted to purposes other than for the exclusive benefit of Members or their
beneficiaries. In the case of (a) a contribution made by the Company under a
mistake of fact, such contribution shall, upon direction of the Plan
Administrator, be returned to the Company within one (1) year after its payment;
(b) contributions made conditional upon deductibility under the Code, to the
extent the deduction is disallowed such contributions shall be returned to the
Company within one (1) year of the disallowance; and (c) upon denial of the
initial qualification of the Plan, all contributions shall be refunded within
one (1) year after the date of the denial, including the final resolution of any
appeals before the Internal Revenue Service or the courts, unless before the
expiration of such time the Plan shall subsequently be granted qualification.
Upon termination of the Plan and this Trust and full satisfaction of all
liabilities thereunder, any remaining assets shall be returned to the Company.
All contributions under the Plan are conditioned upon the initial qualification
of the Plan and the deductibility of such contributions.
12.2 Invalidity of Certain Provisions. If any provision of this Trust
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof and this Trust shall be construed
and enforced as if such provision had not been included.
12.3 Multiple Trustees. In the event that there is more than one
Trustee, any action taken by the Trustee must be agreed to in writing by a
majority of the Trustees. Any action taken by a Trustee without proper
notification to all of the Trustees and the agreement of a majority of the
Trustees, will not be deemed to be a legal action of the Trustees. Notification
shall be made in writing on a timely basis. Any Trustee may, if and when so
authorized by the Trustees, issue directives to any person or entity and sign
such documents as may be required from time to time in the care and management
of this Trust Fund in accordance with the terms and conditions of this Trust
Agreement.
12.4 Conflict with Plan. In the event of any conflict between the
provisions of the Plan and those of this Trust Agreement, the former shall
prevail.
12.5 Gender. The use of any gender shall include any other gender, and
the use of the singular shall include plural, and vice versa, whenever the
context shall so require.
12.6 Mailing Notices. Notices, accountings, and reports required to be
given by the Trustee may be given by personal delivery or by mail addressed to
the party involved at the last address of such party recorded on the general
address files of the Trustee. If given by mail, the date of mailing shall be
deemed to be the date as of which the same was given or furnished to the
addressee. Any notice required under this Trust Agreement may be waived in
writing by the person entitled to notice.
12.7 Submitting Notices. All notices, designations, and elections of
Members shall be submitted to the Company for transmittal to the Trustee. All
notices, designations, and elections to be transmitted to the Trustee shall be
on forms and to the address specified by the Trustee.
12.8 Governing Law. Except to the extent otherwise required by ERISA,
this Trust Agreement and this Trust shall be construed, administered and
enforced in accordance with the laws of the State of New York (without regard to
conflicts of law).
<PAGE>
Computer Horizons Corp., by its duly appointed officers, and
the Trustees have caused this Trust Agreement to be executed this ____ day of
__________, 1995.
COMPUTER HORIZONS CORP.
Attest: ______________________ By: _________________________
(CORPORATE SEAL)
Witnesses: COMPUTER HORIZONS CORP.
EMPLOYEE'S SAVINGS PLAN
- ------------------------------- ------------------------------
John J. Cassese, as Trustee
- ------------------------------- ------------------------------
Bernhard D. Hubert, as Trustee
EXHIBIT 5.1
PROSKAUER ROSE GOETZ & MENDELSOHN LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036
December 5, 1995
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
Computer Horizon Corp.
Employee's Saving Plan
c/o Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046
Re: Computer Horizons Corp. (the "Company")
Ladies and Gentlemen:
You have requested our opinion in connection with the
registration statement on Form S-8 (the "Registration Statement") being filed by
the Company and the Computer Horizons Corp. Employee's Savings Plan (the "Plan")
with the Securities and Exchange Commission for the purpose of registering under
the Securities Act of 1933 an aggregate of 250,000 shares of the Company's
common stock, par value $.10 (the "Shares"), which may be acquired by the
trustee under the Plan (the "Trustee"), together with an indeterminate amount of
plan interests to be offered under the Plan.
On the basis of such investigation as we have deemed
necessary, we are of the opinion that any of the Shares which may be issued by
the Company to the Trustee will be, when issued and acquired by the Trustee in
accordance with the provisions of the Plan, legally issued, fully paid and
non-assessable, and that the interests in the Plan will be, when issued in
accordance with the Plan, legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. In giving this Consent, we do not hereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
PROSKAUER ROSE GOETZ & MENDELSOHN LLP
By: /s/ ROBERT A. CANTONE
--------------------------------
EXHIBIT 23.2
Consent of Independent Certified Public Accountants
---------------------------------------------------
We have issued our report dated January 31, 1995, accompanying
the consolidated financial statements of Computer Horizons Corp. (the "Company")
appearing in the 1994 Annual Report of the Company to its shareholders and the
accompanying schedule included in the Annual Report on Form 10-K for the year
ended December 31, 1994, which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report.
GRANT THORNTON LLP
Parsippany, New Jersey
December 5, 1995
