UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CUBIC CORPORATION
(Exact name of registrant as specified in charter)
Delaware 95-1678055
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9333 Balboa Avenue
San Diego, California 92123
(619) 277-6780
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Cubic Corporation Employees' Profit-Sharing Plan
Cubic Applications, Inc. 401(k) Retirement Plan
(Full Title of Plan)
William C. Stewart, Jr., Secretary
Cubic Corporation
9333 Balboa Avenue
San Diego, California 92123
(619) 505-2276
(name and address, including zip code and telephone number,
including area code of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
To be Registered Registered Per Share(1) Offering Price Fee
- ------------------- ------------ -------------- -------------- ------------
Interests under the
Plans Indeterminate N/A N/A N/A
1
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by Cubic Corporation (the
"Registrant") with the Securities and Exchange Commission (the "Commission"),
are hereby incorporated by reference in this Registration Statement:
1. Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31, 1995,
and March 31, 1996, and June 30, 1996.
3. The description of the Common Stock contained in the Registrant's
Registration Statement on Form 8- A filed pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of updating
such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 subsequent to the date of the
Registration Statement and prior to the filing of a post-effective amendment,
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
respective dates of the filing of such documents.
The Registrant will provide without charge to any Plan participant, at the
request of such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents).
Requests should be directed to William C. Stewart, Jr., Secretary, Cubic
Corporation, 9333 Balboa Avenue, San Diego, California 92123.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Names Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, the Company has broad
powers to indemnify its directors and officers against liabilities that may
incur in such capacities, including liabilities under the Securities Act. The
Company's Bylaws require the Company to indemnify its directors and officers,
and permit the Company to indemnify its employees and other agents, to the
extent permitted by Delaware law. Under the Company's Bylaws, indemnified
parties are entitled to indemnification for negligence, gross negligence and
otherwise to the fullest extent permitted by law. The By-laws also require the
Company to advance litigation expenses in the case of stockholder derivative
actions or other actions, against an undertaking by the indemnified party to
repay such advances if it is ultimately determined that the indemnified party is
not entitled to indemnification.
The Company has entered into indemnity agreements with each of its directors and
executive officers. Such indemnity agreements contain provisions which are in
some respects broader than the specific indemnification provisions contained in
Delaware law.
The Registrant also maintains a policy of directors' and officers' liability
insurance.
2
<PAGE>
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit Nos. Description of Exhibits
- ------------ -----------------------
5 Opinion and Consent of Luce, Forward, Hamilton & Scripps, LLP
10.1 Cubic Corporation Employees' Profit-Sharing Plan
10.2 Cubic Applications, Inc. 401(k) Retirement Plan
23.1 Consent of Ernst & Young, LLP
Item 9. Undertakings.
1. The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, post-effective amendment to this Registration Statement to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(iii) 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act") may be permitted to directors, officers or
controlling persons of the registrant, pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding is asserted by
such director, officer or controlling person in connection with the
securities being registered hereunder, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the act and will be governed by the final adjudication of such issue.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for the filing on Form S-8 and has duly caused the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Diego, State of California, on the 31st day of
October 1996.
CUBIC CORPORATION
/s/ WALTER J. ZABLE
By: ----------------------------
Walter J. Zable, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
Signature Name and Title Date
- ------------------------- --------------------------- -----------------
Walter J. Zable, President,
Chief Executive Officer, and
/s/ WALTER J. ZABLE Chairman of the Board of
- ------------------------- Directors October 31, 1996
William W. Boyle, Chief
Financial Officer, Vice
/s/ WILLIAM W. BOYLE President of Finance and
- ------------------------- Director October 31, 1996
/s/ THOMAS A. BAZ Thomas A. Baz, Vice President
- ------------------------- and Corporate Controller October 31, 1996
Walter C. Zable, Vice
/s/ WALTER C. ZABLE President and Vice Chairman
- ------------------------- of the Board of Directors October 31, 1996
/s/ JACKSON D. ARNOLD
- ------------------------- Jackson D. Arnold, Director October 31, 1996
/s/ RICHARD G. DUNCAN
- ------------------------- Richard G. Duncan, Director October 31, 1996
/s/ ROBERT T. MONAGAN
- ------------------------- Robert T. Monagan, Director October 31, 1996
/s/ RAYMOND G. PEET
- ------------------------- Raymond G. Peet, Director October 31, 1996
4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CUBIC CORPORATION
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
5 Opinion and consent of Luce, Forward, Hamilton & Scripps LLP
10.1 Cubic Corporation Employees' Profit Sharing Plan
10.2 Cubic Applications, Inc. 401(k) Retirement Plan
23.1 Consent of Independent Accountants, Ernst & Young, LLP
5
<PAGE>
Cubic Corporation
9333 Balboa Avenue
San Diego, CA 92123
Ladies and Gentlemen:
In connection with the registration by Cubic Corporation (the "Company") of
interests under the Cubic Corporation Employees' Profit-Sharing Plan and Cubic
Applications, Inc. 401(k) Retirement Plan (the "Plans") on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, we
advise you that, in our opinion, if and when such shares of the Company's common
stock are issued and sold pursuant to the provisions of the Plans and in
accordance with the Registration Statement, such shares will be duly-authorized,
validly-issued, fully-paid and non- assessable shares of the Company's Common
Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
LUCE, FORWARD, HAMILTON & SCRIPPS LLP
San Diego, California
October 31, 1996
CUBIC CORPORATION
EMPLOYEES' PROFIT-SHARING PLAN
--------------------------------------------------------------------
Original Effective Date June 15, 1956,
Amended and Restated Effective October 1, 1989,
Amended and Restated Effective August 1, 1993
<PAGE>
TABLE OF CONTENTS
<PAGE>
INTRODUCTION
Cubic Corporation Employees' Profit-Sharing plan as restated here is effective
August 1, 1993. This is a full restatement of the original Plan and combines in
one document both Part I (Profit Sharing and Posttax Contributions) and Part II
(401(k) Pre-Contribution), as well as amendments and board resolutions
thereafter.
The purpose of this Plan is to provide Eligible Employees with a more
financially secure retirement. In addition to the profit-sharing contribution
which may be made at an Employer's discretion, Eligible Employees may also
participate by saving their own money on a pre- or posttax basis. Employer
contributions will be made from current or accumulated earnings and profits of
the Employer. As such, this Plan is intended to qualify as a profit-sharing plan
for purpose of Internal Revenue Code Sections 401(a), 402, 401(k), 412, and 417.
All Plan funds will be invested in a group annuity contract.
<PAGE>
ARTICLE 1
DEFINITIONS
When used in this document the following words and phrases have the meaning
specified below. Additional words and phrases may be defined in the text of the
Plan.
1.1 Accounts means a Member's Employer Profit-Sharing Accounts (Part I and
Part II), Member Pretax (Part III) Account, Member After-Tax (Part I)
Account, and Rollover Account.
1.2 Active Member means an Eligible Employee who currently has in effect
an election to make Savings contributions pursuant to Section 3.1.
1.3 Affiliated Employer means any entity that is included in a controlled
group of corporations or commonly controlled with Cubic Corporation or
is a member of an affiliated service group under Code Sections 414 and
1563.
1.4 Annuity means any form of benefit payment under Article 7 other than a
lump sum or installment distribution.
1.5 Beneficiary means the person, persons, or entity the Member designates
to receive any death benefit that may become payable under the Plan,
subject to Article 7. A Member may designate primary and contingent
Beneficiaries. If more than one Beneficiary is named the Member may
specify the sequence and/or proportion in which payments will be made
to each Beneficiary. In the absence of a specification of sequence or
proportions, payments will be made in equal shares to all named
Beneficiaries. A Member may change Beneficiaries, as well as any
primary or contingent Beneficiaries, from time to time by written
notice delivered to the Committee in the manner and form prescribed by
the Committee. If no Beneficiary has been designated, if the Committee
is unable to locate a designated Beneficiary, or if no designated
Beneficiary is living at the time of the Member's death, payment of
such death benefit, if any, to the extent permitted by law, will be
made to the Member's surviving Spouse or, if none, the Member's
estate. Any minor's share may be paid to such adult or adults as have,
in the Committee's opinion, assumed custody and support of such minor.
However, the Committee reserves the right to delay the payment of any
minor's share until receiving a court order designating the adult or
adults to whom such payment shall be made. Any death benefit that
becomes payable to executors or administrators will paid in one lump
sum. The Committee may require proof of death benefit before paying
any death benefit under the Plan.
<PAGE>
1.6 Board means the Board of Directors of Cubic Corporation.
1.7 Code means the Internal Revenue Code of 1986, as amended.
1.8 Committee means the Plan Committee described in Article 8.
1.9 Disability Retirement Date means the first day of the month following
the date on which the Member is determined to be Permanently and
Totally Disabled.
1.10 Early Retirement Date means the date after attaining age 55 upon which
a Member who has seven Years of Service elects to terminate employment
before age 65.
1.11 Earnings shall mean all remuneration received by an Employee from the
Employer during a Plan Year that is considered as wages reportable
under Code Section 6051(a)(3), prior to reductions for Pretax
Contributions made to the Plan or salary reduction contributions to a
plan excludable from income under Code Section 125. "Earnings"
shall not include amounts over two hundred thousand dollars
($200,000), as indexed under Section 401(a)(17) of the Code,
determined on an annual basis.
In determining g the Earnings of a Participant 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 Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
If, as a result of the application of such rules, the adjusted two
hundred thousand dollars ($200,000) limitation is exceeded, then the
limitation shall be pro-rated among the affected individuals in
proportion to each such individual's Earnings as determined under this
Section prior to the application of this limitation. Notwithstanding
the foregoing, Earnings earned but not paid in a Plan Year may include
amounts earned but not paid in a Plan Year because of the timing of
pay periods and pay days if such amounts are paid during the first few
weeks of the next following Plan Year, the amounts are included on a
uniform and consistent basis with respect to all similarly situated
Employees, and no Earnings are included in more than one Limitation
Year.
1.12 Effective Date means June 15, 1956 (for the original portion of this
Plan: Part I) and January 1, 1983 (for Part II). The effective date of
this amendment and restatement is October 1, 1989.
<PAGE>
1.13 Eligible Employee means any Employee whose earnings from the Employer
are subject to withholding of income tax or Social Security
contributions as well as qualifying common-law Employees, and
including leased employees as defined under Code Section 414(n).
However, the term "Eligible Employee" shall exclude the following:
(a) Any "leased employee" who participates in a plan described in
Code Section 414(n)(5) if less than 20% of all Eligible Employees
are "leased employees," 4.
(b) Any Employee included in a unit of Employees covered by a
collective bargaining agreement with the Employer if the
collective bargaining agreement at the Employer facility where
the Employee is employed does not provide for coverage under this
Plan, or
(c) Any Employee who has had a One-Year Break in Service during the
Plan Year.
1.14 Employee means any person who is employed by the Affiliated Employer.
1.15 Employer means Cubic Corporation and any other Affiliated Employer
that with the consent of Cubic Corporation has adopted this Plan by
appropriate action taken by its board of directors. An Affiliated
Employer may participate by adopting all or a portion of this Plan.
Such participating Employers are listed in Appendix A to this
document. For purposes of this Plan, Cubic Corporation will be deemed
the representative of each participating Employer and any action taken
with respect to the Plan by Cubic Corporation will be binding on each
participating Employer.
1.16 Employer (Part I) Profit-Sharing Account means the account maintained
for a Member that is:
(a) Credited with Employer Profit-Sharing Contributions to the Plan
as provided for under Section 3.2 and
(b) Adjusted for investment results and distributions, including
transfers to the Employer Part II Profit-Sharing Account.
<PAGE>
1.17 Employer (Part II) Profit-Sharing Account means the account maintained
for a Member that is:
(a) Credited with that portion of the Employer profit sharing
allocation, if any, that may be transferred from the Employer
(Part I) Profit-Sharing Account pursuant to an annual election by
(i) a Member, as provided under Section 3.2(a), or (ii) the
Employer as provided under Section 3.3(d).
(b) Adjusted for investment results and distributions.
1.18 Entry Date means the first day of each calendar quarter: January 1,
April 1, July 1, or October 1.
1.19 ERISA means the Employee Retirement Income Security Act of 1974, as
periodically amended.
1.20 Funding A means The Prudential Insurance Company of America or any
other legal reserve life insurance company or companies selected by
Cubic Corporation to receive Employer contributions and to pay the
annuities and other benefits in accordance with the Plan. Any group
annuity contract between the Employer and the Funding Agent may
provide for the contributions to be held in the Funding Agent's
general account and/or one or more of its separate accounts (including
separate accounts maintained for the collective investment of assets
of qualified retirement plans). The Funding Agent issuing such a
contract shall have exclusive responsibility for the investment and
management of any amounts held thereunder. Accordingly, the Funding
Agent shall, upon appointment by the Named Fiduciary and its
acceptance in writing of such appointment, be an investment manager
with respect to the funds it holds under such contract to the extent
that such funds are Plan assets within the meaning of ERISA and the
rules and regulations thereunder. The Named Fiduciary shall not be
liable for any loss which may result from the acts or omissions of the
Funding Agent acting as investment manager with respect to Plan assets
under its control.
1.21 Highly Compensated Employee shall mean an Employee who performs
service during the Determination Year and is described in one or more
of the following groups in accordance with IRS regulations:
(a) An Employee who is a five percent (5%) owner as defined in
Section 416(i)(l)(iii) of the Code, at any time during the
Determination Year or the Look-back Year.
<PAGE>
(b) An Employee who receives Compensation in excess of seventy-five
thousand dollars ($75,000) during the Look-back Year. (The
$75,000 limitation will be adjusted annually for increases in the
cost of living in accordance with Section 415(d) of the Code.)
(c) An Employee who receives Compensation in excess of fifty thousand
dollars ($50,000) during the Look-back Year and is a member of
the top-paid group for the Look-back Year. (The $50,000
limitation will be adjusted annually for increases in the cost of
living in accordance with Section 415(d) of the Code.)
(d) An Employee who is an officer within the meaning of Section
416(i) of the Code during the Look-back Year and who receives
Compensation in the Look- back Year greater than fifty percent
(50%) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code, for the calendar year in which the
Look-back Year begins. Notwithstanding the foregoing, no more
than fifty (50) or, if less, the greater of three (3) Employees
or ten percent (10%) of the Employees shall be treated as
officers; provided, however, if no officer is described in this
subparagraph (d), then the highest-paid officer for such year
shall be treated as herein described.
(e) An Employee who is (i) described in Paragraph (b), (c), or (d)
above, and (ii) one of the 100 Employees who receives the most
Compensation from the Employer during the Determination Year,
when the Determination Year is substituted for the Look-back Year
in Paragraph (b), (c), or (d).
A former Employee shall be treated as a Highly Compensated
Employee if such former Employee had a separation year prior to
the Determination Year and was a Highly Compensated active
Employee for either (1) such Employee's separation year or (2)
any Determination Year ending on or after the Employee's 55th
birthday.
A separation year is the Determination Year in which the Employee
separates from service. Notwithstanding the foregoing, an
Employee who separated from service before January 1, 1987 is a
Highly Compensated Employee only if he was a five percent (5%)
owner or received Compensation in excess of fifty thousand
dollars ($50,000) during (i) the Employee's separation year (or
the year preceding such separation year), or (ii) any year ending
on or after such Employee's 55th birthday (or the last year
ending before such Employee's 55th birthday).
<PAGE>
Notwithstanding anything to the contrary in this Plan, Sections
414(b), (c), (m), (n), and (o) of the Code are applied prior to
determining whether an Employee is a Highly Compensated Employee.
For purposes of this section,
(a) "Compensation" shall mean compensation as defined in Code Section
414(q)(7) and the regulations thereunder.
(b) "Determination Year" shall mean the Plan Year for which the
determination of who is Highly Compensated is being made.
(c) "Look-back Year" shall mean the twelve (12) month period
preceding the Determination Year.
(d) "Top-paid Group" shall mean the top twenty percent (20%) of
Employees when rated on the basis of Compensation paid during the
year. The number of Employees in the group will be determined in
accordance with Section 414(q)(8) of the Code.
The Employer shall have the right to elect to determine Highly
Compensated Employees by reference to calendar year Compensation,
in accordance with IRS regulations. If the Employer so elects,
the Employer must make such election with respect to all other
qualified plans it maintains.
1.22 Hour of Service means the following:
(a) Each hour for which an Employee is paid or entitled to payment
for performance of duties for the Affiliated Employer for the
applicable Plan Year.
(b) Each hour for which an Employee is paid or entitled to payment by
the Affiliated Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501 Hours of
Service will be credited under this subsection to an Employee on
account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single
computation period).
<PAGE>
(c) For purposes of the definition of Hour of Service in paragraph
(a) and (b) above, an Hour of Service is each hour for which back
pay, irrespective of mitigation of damages is either awarded or
agreed to by the Affiliated Employer, However, the same Hour of
Service shall not be credited by both this paragraph and
paragraphs (a) and (b) above.
(d) The rules regarding Hours of Service set forth in Department
of Labor Regulations Section 2530.200b-2(b) and Section
2530.200b-2 or any successor regulations are incorporated by
reference.
(e) For purposes of determining Hours of Service for any Employee
whose individual Hours of Service may not be determined on an
hourly basis, Hours of Service will be determined on the basis of
weeks of employment and the Employee will be credited with 45
Hours of Service for each week for which the Employee would be
required to be credited with at least one Hour of Service under
(a) and (b) above.
1.23 Late Retirement Date means the first day of the month following the
date on which a Member terminates employment after his Normal
Retirement Date.
1.24 Member means an Eligible Employee who is eligible to participate in
the Plan or who has participated in the Plan at any time in accordance
with Article 2 and for whom Accounts are being maintained.
1.25 Member After-Tax (Part I) Account means the account maintained for a
Member that is:
(a) Credited with contributions into the Plan attributable to the
Member's After- Tax Savings under Section 3.1(a),
(b) Adjusted for investment results, and
(c) Adjusted for withdrawals and distributions.
<PAGE>
1.26 Member Pretax (Part II) Account means the account maintained for a
Member that is:
(a) Credited with Employer contributions into the Plan attributable
to the Member's Pretax Savings under Section 3.1(b),
(b) Adjusted for investment results, and
(c) Adjusted for withdrawals and distributions.
1.27 Normal Retirement Date means the first day of the month following the
date a Member attains age 65.
1.28 One-Year Break in Service means:
A Year of Service in which an Employee completes less than 501 Hours
of Service. However, for purposes of preventing a One-Year Break in
Service from occurring, an Employee who is absent from work for any
period on or after January 1, 1984 because of:
(a) the pregnancy of the Employee,
(b) the birth of a child of the Employee,
(c) the placement Of a child with the Employee in connection with the
adoption of such child by the Employee, or
(d) for purposes of caring for such child for a period beginning
immediately after such birth or placement,
will be credited with the number of Hours of Service which otherwise
would normally have been credited to such individual but for such
absence, or, if the Hours of Service cannot be determined, then eight
Hours of Service per day of such absence. The total number of hours
treated as Hours of Service under this section by reason of any such
pregnancy or placement shall not exceed 501 hours. These hours shall
be credited to the year in which the absence from work begins if such
crediting would prevent the Employee from incurring a One-year Break
in Service or, in any other case, in the immediately following year.
No credit will be given unless the Employee furnishes to the Employer
such timely information as is reasonably necessary to establish that
the absence from work is for reasons referred to in this definition
and the number of days for which there was such an absence.
<PAGE>
1.29 Permanently and Totally Disabled means a physical or mental condition
that renders the Member incapable of continuing in employment with the
Employer. The determination of Permanently and Totally Disabled shall
be made by the Committee based on information provided by the Member's
physician. Such determination shall be submitted by the physician in
writing to the Employer.
1.30 Plan means the plan designated as the Cubic Corporation Employees'
Profit-Sharing Plan as described in this document and as it may be
periodically amended.
1.31 Plan Year means the period beginning on October 1 and ending on the
following September 30. The calendar year will be the limitation year
for purposes of Code Section 415 and Section 3.4 of the Plan,
1.32 Retirement Date means the date a Member attains his Normal, Early,
Late, or Disability Retirement Date, as applicable.
1.33 Rollover Account means the account maintained for a Member that is:
(a) Credited with any amount received by the Plan as a rollover, as
defined in Code Section 402(a)(5),
(b) Adjusted for investment results, and
(c) Adjusted for withdrawals and distributions.
1.34 Savings means amounts contributed to this Plan by an Employer in lieu
of being paid to a Member as salary or wages. Savings will be made
under payroll-deduction or salary reduction arrangements between each
Member and his Employer. Section 3.1 contains the provisions under
which Savings may be made. Savings consist of After- Tax Savings,
known as Part I Savings (described in Section 3.1(a)), and Pretax
deferrals, known as Part II Savings (described in Section 3.1(b)).
1.35 Spouse means the person to whom the Member is legally married for at
least one year on the date he receives his benefit payment from the
Plan, or his date of death, if earlier.
1.36 Trust means one or more Trusts established pursuant to the Trust
Agreement for purposes of funding the benefits of this Plan.
<PAGE>
1.37 Trust Agreement means one or more Trust Agreements executed by Cubic
Corporation and provided for the administration of the Trust.
1.38 Trust Fund or Fund means the total amount of contributions made by the
Members and the Employer, together with the net earnings on them, that
will be used to provide the benefits to Members and their
Beneficiaries under the Plan.
1.39 Trustee means the Trustee of the Trust and any successor Trustee as
appointed in the Trust Agreement.
1.40 Valuation Date means the close of business in the last day of each
Plan Year, and such interim dates upon which the Fund may be valued by
the Funding Agent or Trustee as directed by the Committee.
1.41 Vested means nonforfeitable. The Vested portion of a Member's Account
is determined under Article 6.
1.42 Year of Service means a 12-consecutive-month period beginning on the
date an Employee is first credited with an Hour of Service and ending
on the anniversary of that date and each anniversary of that date
thereafter, provided the Employee completes 1,000 Hours of Service
during such 12-month period.
Notwithstanding the foregoing, for purposes of this Section 1.42,
Eligible Joint Venture Affiliate shall mean any formal business
arrangement with a separate entity entered into in anticipation of
producing a business profit and deemed eligible for purposes of this
Section 1.42, by the Board.
Notwithstanding the foregoing, a Year of Service, as defined for
Vesting purposes in Section 6.4(d), shall include any Year of Service
after January 1, 1993 with an Eligible Joint Venture Affiliate of the
Employer if: (i) the Board, by formal resolution, authorizes the
granting uniformly and for vesting purposes only of a Year of Service
with an Eligible Joint Venture Affiliate of the Employer; (ii) that
such individual qualifying under this provision satisfy the Plan's
eligibility requirements in Article 2 and maintain an active Member
account in the Plan prior to the employment commencement date with the
Eligible Joint Venture Affiliate of the Employer; (iii) that such
service is performed in a period of time in which the Eligible Joint
Venture Affiliate is operating under a formal business arrangement
with Cubic Corporation; and (iv) that the Board's granting of a Year
of Service is provided in a manner consistent with the Code and/or
other applicable statute. Notwithstanding any provision of the Plan to
the contrary, such Individual credited with a Year of Service by
virtue of employment with an Eligible Joint Venture Affiliate shall
not be entitled to any Employer Profit-Sharing contribution by the
Employer during the period of employment with the Eligible Joint
Venture Affiliate.
<PAGE>
ARTICLE 2
PARTICIPATION
2.1 Eligibility to Become a Member
An Eligible Employee will be entitled to become a Member in the Plan
on the Entry Date following completion of one Year of Service. An
Eligible Employee may elect to become an Active Member by electing to
contribute Savings on an Entry Date.
2.2 Membership in the Plan
(a) Employer Profit-Sharing Contributions will be made on behalf of
all Eligible Employees who are Members on the last day of the
Plan Year.
(b) To become an Active Member, an Eligible Employee must (i) submit
an enrollment form to the Committee at least 15 days before the
Entry Date he elects to become an Active Member, (ii) agree to
make contributions to the Plan, (iii) authorize the Employer to
withhold such contributions from his Earnings and to pay the same
amount to the Funding Agent or Trustee, and (lv) designate a
Beneficiary.
2.3 Reemployment
(a) If an Employee who met the eligibility requirements of Section
2.1 and whose employment has terminated is later rehired as an
Eligible Employee, he may elect to become a Member pursuant to
Section 2.2 on the date he is rehired. A rehired Employee who had
not met the eligibility requirements of Section 2.1 before his
employment terminated will be eligible to enter the Plan on the
Entry Date after he satisfies the requirements of Section 2.1. If
an Employee terminates employment and is rehired and desires to
become an Active Member, he must reenroll as provided in
Section 2.2 above. An Eligible Employee who chooses to enter or
reenter the Plan must enroll or reenroll under Section 2.2(b)
above.
(b) A Member who had a Vested interest in an Account upon his
termination will reenter the Plan upon his reemployment date and
his prior Years of Service will be counted.
(c) An Employee who had no Vested interest in an Account under the
Plan, and whose number of consecutive One-Year Breaks in Service
is five or more will not have his previous Years of Service
counted if his number of One-Year Breaks in Service equals or
exceeds his previous Years of Service.
<PAGE>
(d) An Employee who had no Vested interest in an Account under the
Plan and whose number of consecutive One-Year Breaks in Service
is five or more will have his previous Years of Service counted
if his number of One-Year Breaks in Service is less than his
previous Years of Service.
(e) An Employee who had no Vested interest in an Account under the
Plan and whose number of Consecutive One-Year Breaks in Service
is less than five will have his previous Years of Service
counted.
2.4 Employment After Normal Retirement Age
A Member who continues in the employ of an Employer after attainment
of age 65 will continue to be eligible to be an Active Member.
<PAGE>
ARTICLE 3
CONTRIBUTIONS
3.1 Savings by Active Members
An Active Member may elect to save a Fixed whole percentage of his
Earnings as follows:
(a) Member After-Tax Savings (Part I).
An Active Member may elect to save as much as ten percent of his
Earnings. The Employer will make payments to the Plan in the
amount of the Savings by way of payroll deduction, to be credited
to the Member's After-Tax Account.
(b) Member Pretax Savings (Part II).
An Active Member may elect to defer as much as 15% of his
Earnings. Notwithstanding the foregoing, a Member's Earnings
reduction to his Pretax Account for any calendar year shall not
exceed the dollar limitations set forth in Code Section 402(g).
However, a Member's Earnings reductions to his Pretax Account for
any calendar year may not exceed $8,728 (1992 indexed maximum).
This dollar limitation will be adjusted automatically for each
calendar year to the amount prescribed by the Secretary of the
Treasury or his delegate in accordance with Code Section
402(g)(5).
(c) Change in Percentage of Savings.
An Active Member's Savings percentage will remain in effect until
the Member elects to change the percentage, or is subject to the
overall restrictions of Section 3.3. An Active Member may elect,
but not retroactively, to change his Savings percentage provided
he files the election with the Committee. Such election will be
effective at the start of the first payroll period beginning on
or after the first day of the next calendar quarter following
receipt of his request.
(d) Suspension of Savings.
An Active Member may elect, but not retroactively, to suspend his
Savings to the Plan or to resume his Savings to the Plan after
having suspended them, upon written notice to the Committee. The
suspension shall become effective immediately following receipt
of the written notice by the Committee. A resumption will become
effective as of the first payroll period beginning on or after
the next Entry Date.
<PAGE>
(e) Status of Savings.
Member Savings under this Section will be made by payroll
deductions or reductions authorized by the Member and will be
paid to the Plan by the Employer no later than 30 days after the
Plan Year to which they apply.
3.2 Employer Profit-Sharing Contributions
(a) An Employer may make a discretionary profit-sharing contribution,
as authorized by its board of directors, in an amount up to 15%
of the Earnings of its Members for the Plan Year. This
contribution will be allocated to the Employer Profit-Sharing
Account of each of its Members who are employed at Plan-Year-end
and whose Retirement Date did not occur during the Plan Year. The
Committee may authorize that employees who are not Highly
Compensated Employees and who are Active Members may have a
portion of the Employer Profit-Sharing Contributions that are
allocable to them transferred to their Member's Employer (Part
II) Profit-Sharing Account. Upon transfer, such amounts will
become 100% Vested as provided in Article 6 and will not be
available for in-service withdrawals.
(b) The amount allocated to each Member's Employer Part I
Profit-Sharing Account will be the ratio of the Member's Earnings
from such Employer during the Plan Year to the total amount of
all Members' Earnings from such Employer for the Plan Year. Such
allocation shall be equal to the lesser of (i), (ii), or (iii)
following, where (i) is that amount determined by resolution of
the Board of Directors of Cubic Corporation in its sole and
absolute discretion and adopted on or before the last day of the
taxable year, (ii) is 15% of the Earnings actually paid during
such Plan Year to all of its Members, as provided by the Code, as
the maximum amount deductible by the Employer for the current
taxable year, and (iii) the limitations on benefits and
contributions under Code Section 415.
(c) Payment of Employer Profit-Sharing Contributions will be made for
each Plan Year as soon as convenient after the close of such
year, but not later than the date, including extensions, on which
the Employer's federal income tax return is due with respect to
such taxable year.
(d) Each Employer Contribution is conditioned on its deductibility
under Code Section 404 and will be a complete discharge of its
financial obligations under the Plan with respect to the period
for which it is made.
<PAGE>
3.3 Limitations on Member Deferrals and Employer Contributions
(a) The Committee will estimate for purposes of the limitations under
Code Sections 401(k) and 401(m), as soon as practical before the
close of the Plan Year, the extent to which Member Pretax Savings
treatment under Code Section 401(k) or Employee After-Tax Savings
or Employer Profit-Sharing Contributions may not be available to
any Active Member or class of Active Members.
Notwithstanding the foregoing, the Plan will take into account
the actual deferral ratios of all eligible Members for purposes
of the Average Deferral Percentage (ADP) test in Code Section
401(k), For this purpose, an eligible Member is an Employee who
is directly or indirectly eligible to make a cash or deferred
election under the Plan for all or a portion of a Plan Year and
includes: an Employee who would be a Plan Member but for the
failure to make required contributions; a Member whose
eligibility 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 a Member who
cannot defer because of the Section 415 limits on annual
additions. In the case of an eligible Member who makes no
elective contributions, the deferral ratio that is to be included
in determining the ADP is zero.
Notwithstanding the foregoing, an elective contribution will be
taken into account under the Average Deferral Percentage test of
Section 401(k)(3)(A) of the Code for a Plan Year only if it
relates to compensation that either would have been received by
the Employee in the Plan Year (but for the deferral election) or
is attributable to services performed by the Member in the Plan
Year and would have been received by the Member within
two-and-one-half (2-1/2) months after the close of the Plan Year
(but for the deferral election).
Notwithstanding the foregoing, an elective contribution will be
taken into account under the Average Deferral Percentage test of
Section 401(k)(3)(A) of the Code for a Plan Year only if it is
allocated to the Member as of a date within that Plan Year. For
this purpose, an elective contribution is 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 elective contribution is actually paid to the trust no later
than twelve 12) months after the Plan Year to which the
contribution relates.
(b) An actual Deferral Percentage and a Contribution Percentage will
be determined for each Member in the Plan.
<PAGE>
(i) Member Deferral Percentage.
An Employee's Deferral Percentage will be equal to the ratio
of the total amount of the Employee's Part II Pretax Savings
for the Plan Year divided by his Compensation in the Plan
Year. With respect to Members who made no Pretax Savings
under this Plan, the percentage will be zero. The employer
may elect to include those Employer Contributions that the
Employer has elected to transfer to the Employer Part II
Profit Sharing Account in the Member Deferral Percentage.
(ii) Contribution Percentages.
An Employee's Contribution Percentage will be equal to the
ratio of the total amount of Part I After-Tax Savings for
the Plan Year divided by his Compensation in the Plan Year.
With respect to Members who received no After-Tax Savings,
such percentage will be zero. The Employer may elect to
include Active Member Pretax (Part II) Savings in
calculating the Contribution Percentage, to the extent not
utilized in (i).
Compensation for purposes of this subsection is defined in Code
Section 414(s) and will include Compensation for the entire Plan Year
regardless of when during the year a Member becomes eligible to
participate in the Plan.
(c) Nondiscrimination Requirements for Pretax Contributions.
For any Plan Year, the amount of Pretax Contributions must
satisfy either subsection (1) or subsection (2) as set forth
below:
(i) The Average Deferral Percentage for Highly Compensated
Employees may not exceed one and twenty-five one-hundredths
(1.25) times the Average Deferral Percentage for Nonhighly
Compensated Employees.
(ii) The Average Deferral Percentage for Highly Compensated
Employees
(A) may not exceed two (2) times the Average Deferral
Percentage for Nonhighly Compensated Employees, and
(B) may not exceed the Average Deferral Percentage for
Nonhighly Compensated Employees by more than two (2)
percentage points.
<PAGE>
The Committee is empowered to monitor the Plan throughout the
Plan Year and to decrease or suspend the amount of Pretax
Contributions by Highly Compensated Employees or any group of
Highly Compensated Employees made pursuant to Section 3.1. Any
such decrease or suspension shall also be effective for purposes
of determining Employer Profit-Sharing Contributions to be made
pursuant to Section 3.2.
The Employer may also, in its sole discretion, make Qualified
Nonelective Contributions on behalf of eligible Employees who are
Nonhighly Compensated Employees in an amount sufficient to
satisfy the nondiscrimination requirements of this Section. Such
contributions shall be allocated based on the ratio which each
such eligible Employee's Compensation bears to the total
Compensation of all such eligible Employees for the Plan Year.
Such additional contributions, if any, shall be fully vested.
Notwithstanding the foregoing, Qualified Nonelective
Contributions may be treated as matching contributions for
purposes of the Actual Contribution Percentage (ACP) test of Code
Section 401(m) only if such contributions are nonforfeitable when
made and distributable under the following circumstances:
(i) The Employee's retirement, death, disability, or separation
from service,
(ii) The termination of the Plan without the establishment or
maintenance of another defined contribution plan (other than
an ESOP or SEP),
(iii)In the case of a profit-sharing or stock bonus plan, the
Employee's attainment of age 59-1/2 or the Employee's
hardship,
(iv) The sale or other disposition by Cubic to an unrelated
corporation of substantially all of the assets used in its
trade or business, but only with respect to Employees who
continue employment with the acquiring corporation and the
acquiring corporation does not maintain the Plan after the
disposition, and
(v) The sale or other disposition by Cubic of its interest in a
subsidiary to an unrelated entity, but only with respect to
Employees who continue employment with the subsidiary and
the acquiring entity does not main the Plan after
disposition. Paragraphs (ii), (iv), and (v) above apply only
if the transferee or Cubic continues to maintain the Plan.
Qualified Nonelective Contributions that may be treated as
matching contributions must satisfy these requirements
without regard to whether they are actually taken into
account as matching contributions.
<PAGE>
Excess Pretax Contributions. If for any Plan Year it is
determined that the nondiscrimination requirements under
Section 3.3 are not satisfied:
(i) Certain Highly Compensated Employees shall have the Pretax
Contributions made on their behalf reduced retroactively in
accordance with the leveling method described in
Section 3.3(j);
(ii) At the Committee's sole discretion, a Highly Compensated
Employee who has had the Pretax Contributions made on his
behalf reduced under Subsection (1) shall have the amount of
such reduction treated in one (1) or both of the following
manners:
(A) All or a portion of the amount of such reduction plus
any investment earnings allocable to such reduction
shall be added to the Highly Compensated Employee's
After-tax Account and the amount of the reduction shall
be treated as an After-tax Contribution.
Recharacterization shall only be made within
two-and-one-half (2 1/2) months following the last day
of the Plan Year for which the reduction was necessary.
(B) or a portion of the amount of such reduction plus any
investment earnings allocable to such Pretax
Contributions shall be paid in cash to the Highly
Compensated Employee. Payment shall be made within
two-and-one-half (2 1/2) months following the last day
of the Plan Year for which the reduction was necessary,
if practicable, but in no event later than the last day
if the Plan Year following such Plan Year. For any Plan
Year, the amount of excess Pretax Contributions to be
distributed to any Participant shall be reduced by the
amount of excess deferrals distributed to such
Participant in accordance with Section 3.1 for the
Participant's taxable year ending with or within the
Plan Year. The income allocable to such excess Pretax
Contributions shall include income for the Plan Year
for which the Pretax Contributions were made,
determined in accordance with the alternative method
set forth in Reg. Section 1.401(k)-I(f)(4)(ii)(C) and
will include income for the period between the end of
such Plan Year and the date of the distribution,
determined in accordance with the safe harbor method
set forth in Reg. Section 1.401(k)- 1(f)(4)(ii)(D). Any
Employer Profit-Sharing Contributions attributable to
excess Pretax Contributions or excess deferrals (and
income allocable to such Employer Profit- Sharing
Contributions determined using the same method for
determining income on excess Pretax Contributions)
shall be forfeited within the period specified
immediately above and shall be used to reduce future
Employer Contributions under Section 3.2.
<PAGE>
(d) Family Aggregation Rules for Pretax Contributions.
The family aggregation rules of Section 414(q)(6) of the
Code shall apply to any eligible Employee who is Highly
Compensated and a five (5) percent owner or one of the ten
(10) most Highly Compensated Employees. The Average Deferral
Percentage for the Family Members, who are treated as one
eligible Employee who is Highly Compensated, shall be the
Average Deferral Percentage determined by combining the
Pretax Contributions and Compensation of all eligible Family
Members.
If the Average Deferral Percentage of a Highly Compensated
Employee is determined under the family aggregation rules,
excess Pretax Contributions shall be allocated among the
Family Members in proportion to the Pretax Contributions of
each Family Member that were combined to determine the
Average Deferral Percentage rates.
(e) Nondiscrimination Requirements for After-tax and Employer
Profit-Sharing Contributions. For any Plan Year, the amount
of After-tax and Employer Profit-Sharing Contributions must
satisfy either Subsection (1) or (2) as set forth below:
(i) The Average Contribution Percentage for Highly
Compensated Employees may not exceed one and
twenty-five one- hundredths(1.25) times the Average
Contribution Percentage for Nonhighly Compensated
Employees.
<PAGE>
(ii) The Average Contribution Percentage for Highly
Compensated Employees:
(A) may not exceed two (2) times the Average
Contribution Percentage for Nonhighly Compensated
Employees, and
(B) may not exceed the Average Contribution Percentage
for Nonhighly Compensated Employees by more than
two (2) percentage points.
Notwithstanding the foregoing, the Plan shall take into account
the actual contribution ratios of all eligible Employees for
purposes of the Average Contribution Percentage (ACP) test in
Code Section 401(m). For this purpose, an eligible Employee is
any Employee who directly or indirectly is eligible to receive an
allocation of matching contributions or to make Employee
Contributions and includes an Employee who would be a Plan
Participant but for the failure to make required contributions;
an Employee whose right to make Employee Contributions or receive
matching contributions has been suspended because of an election
(other than certain one-time elections) not to participate; and
an Employee who cannot make an Employee Contribution or receive a
matching contribution because Code Section 415(c) prevents the
Employee from receiving additional annual additions. In the case
of an eligible Employee who makes no Employee Contributions and
who receives no matching contributions, the contribution ratio
that is to be used in determining the ACP is zero.
Notwithstanding the foregoing, in performing the Average
Contribution Percentage (ACP) test of Code Section 401(m) for a
Plan Year, contributions will be taken into account as follows:
An Employee Contribution is to be taken into account if it is
paid to the Trust during the Plan Year or paid to an agent of the
Plan and transmitted to the Trust within a reasonable period
after the end of the Plan Year. An excess contribution to a cash
or deferred arrangement that is recharacterized is to be taken
into account in the Plan Year in which the contribution would
have been received in cash by the Employee had the Employee not
elected to defer the amounts. A matching contribution is taken
into account for a Plan Year only if it is:
(i) Made on account of the Employee's elective or Employee
Contributions for the Plan Year,
<PAGE>
(ii) Allocated to the Employee's Account as of a date within
that year, and
(iii)Paid to the Trust by the end of the 12th month
following the close of that year.
Qualified matching contributions that arc used to meet the
requirements of Code Section 401(k)(3)(A) are not to be taken
into account for purposes of the ACP test.
Notwithstanding the foregoing, for purposes of determining
whether a plan satisfies the actual contribution percentage test
of Code Section 401(m), all Employee and Matching Contributions
that are made under two or more plans that are aggregated for
purposes of Code Sections 401(a) and 410(b) (other than Code
Section 410(b)(2)(A)(ii)) are to be treated as made under a
single plan and that if two or more plans are permissively
aggregated for purposes of Code Section 401(m), the aggregated
plans must also satisfy Code Sections 401(a) and 410(b) as though
they were a single plan.
Notwithstanding the foregoing, in calculating the Average
Contribution Percentage for purposes of Code Section 401(m), the
actual contribution ratio of a Highly Compensated Employee will
be determined by treating all plans subject to Code Section
401(m) under the Highly Compensated Employee is eligible (other
than those that may not be permissively aggregated as a single
plan).
The Committee is empowered to monitor the Plan throughout the
Plan Year and to decrease or suspend the amount of
After-Contributions made by Highly Compensated Employees pursuant
to an election made pursuant to Article 3.
Employer may also, in its sole discretion, make Qualified
Nonelective Contributions on behalf of eligible Employees who are
Nonhighly Compensated Employees in an amount sufficient to
satisfy the nondiscrimination requirements of this Section. Such
contributions shall be allocated based on the ratio that each
such eligible Employee's Compensation bears to the total
Compensation of all such eligible Employees for the Plan Year.
Such additional Contributions shall be fully vested.
Notwithstanding the foregoing, Nonelective Contributions may be
treated as elective contributions only if the conditions
described in Reg. Section 1.401(K)l(b)(5) of the regulations are
satisfied.
<PAGE>
(f) Excess After-tax and Employer Profit-Sharing Contributions. If
for any Plan Year it is determined that the nondiscrimination
requirements under Section 3.3(c) are not satisfied:
(i) Certain Highly Compensated Employees shall have the total of
their After-tax and Employer Profit-Sharing Contributions
reduced retroactively in accordance with the leveling method
described in Section 3.3(j).
(ii) A Highly Compensated Employee who has had the total of his
After- tax and Employer Profit-Sharing Contributions reduced
in accordance with this Section 3.3(f) shall have the amount
of such reduction taken first from his After-Contributions
for the Plan Year. If a further reduction is necessary, it
shall be made from the Highly Compensated Employees Employer
Profit-Sharing Contributions for the Plan Year.
(iii)Reduced After-tax Contributions and nonforfeitable Employer
Profit-Sharing Contributions plus any investment earnings
allocable to such Contributions shall be paid in cash to the
Highly Compensated Employee. Payment shall be made within
two-and- one-half (2-1/2) months following last day of the
Plan Year for which the reduction was necessary, if
practicable, but in no event later than the last day of the
Plan Year following such Plan Year.
The income allowable to such reduced After-tax Contributions
and nonforfeitable Employer Profit-Sharing Contributions
shall be determined in accordance with the alternative
method set forth in Reg. Section 1.401(m)-l(e)(3)(ii)(C) and
will include income for the Plan Year for which the
After-tax Contributions and Employer Profit-Sharing
Contributions were made and for the period between the end
of such Plan Year and the date of distribution, determined
in accordance with the safe harbor method set forth in Reg.
Section 1.401(m)-1(c)(3)(ii)(D). Forfeitable Employer
Profit-Sharing Contributions (and income attributable to
such Profit-Sharing Contributions determined in the same
manner as for determining income on reduced After-
Contributions and Employer Profit- Sharing Contributions)
shall be forfeited within the period specified immediately
above and shall be used to reduce future Employer
Contributions under Section 3.2.
<PAGE>
(g) Family Aggregation Rules for After-tax and Employer
Profit-Sharing Contributions. The family aggregation rules of
Section 414(g)(6) of the Code shall apply to any eligible
Employee who is Highly Compensated Employee and a five (5)
percent owner or one of the ten (10) most Highly Compensated
Employees. The Average Contribution Percentage for the Family
Members, which are treated as one eligible Employee who is Highly
Compensated, shall be the Average Contribution Percentage
determined by combining After-tax and Employer Profit-Sharing
Contributions and Earnings of all eligible Family Members. Excess
After-tax and Employer Profit-Sharing Contributions shall be
allocated among such Family Members in proportion to the
After-tax and Profit-Sharing Contributions of each Family Member
that were combined to determine the Average Contribution
Percentage.
(h) Multiple Use Limitation. For any Plan Year commencing on or after
January 1, 1991, the multiple use of the alternative limitation
occurs if any Highly Compensated Employee who is eligible for a
cash or deferred arrangement (CODA) under this Plan exceeds the
aggregate limit. The aggregate limit is the greater of the
Following:
(i) The sum of:
(A) 1.25 times the greater of (i) the ADP for eligible
Nonhighly Compensated Employees under the CODA for the
Plan Year or the ACP for eligible Nonhighly Compensated
Employees for the 401(m) plan for the Plan Year
beginning with or within the Plan Year of the CODA, and
(B) two plus the lesser of (i) or (ii), above, but in no
event more than twice the law of (i) or (ii), above; or
<PAGE>
(ii) The sum of:
(A) 1.25 times the lesser of (i) the ADP for eligible
Nonhighly Compensated Employees under the CODA for the
Plan Year or the ACP for eligible Nonhighly Compensated
Employees for the 401(m) plan for the Plan Year
beginning with or within the Plan Year of the CODA, and
(B) two plus the greater of (i) or (ii), above, but in no
event more than twice the greater of (i) or (ii),
above.
Multiple use does not occur if either the ADP or the ACP of
the eligible Highly Compensated Employees does not exceed
125% of the respective percentages of the eligible Nonhighly
Compensated Employees.
For purposes of the multiple use test, the ADP and ACP of
eligible Highly Compensated Employees are determined after
correction (distribution, forfeiture, or recharacterization,
as applicable) of excess deferrals, excess contributions,
and excess aggregate contributions.
Notwithstanding the foregoing, the Committee is empowered to monitor
the Plan throughout the Plan Year and decrease or suspend the amount
of Pretax Contributions by Highly Compensated Employees or any group
of Highly Compensated Employees made pursuant to this Section 3.1. Any
such decrease or suspension shall also be effective for purposes of
determining Employer Profit-Sharing Contributions to be made pursuant
to Section 3.2.
The Employer may also, in its sole discretion, make Qualified
Nonelective Contributions on behalf of eligible Employees who am
Nonhighly Compensated Employees in an amount sufficient to satisfy the
multiple use limitation of this Section. Such Contributions shall be
allocated based on the ratio that each such eligible Employee's
Compensation bears to the total Compensation of all such eligible
Employees for the Plan Year. Such additional contributions, if any,
shall be fully vested.
<PAGE>
(i) Leveling Method. If the nondiscrimination requirements of
Sections 3.3(c) or 3.3(f) are not met, Pretax Contributions (or
After-tax and Employer Profit- Sharing Contributions) shall be
reduced retroactively under the leveling method as follows:
(i) The Highly Compensated Employee with the highest
Deferral Percentage (or Contribution Percentage) shall
have his total Pretax Contributions (or After-tax and
Employer Profit-Sharing Contributions) reduced to the
extent required to satisfy the nondiscrimination
requirements of Section 3.3(c) (or Section 3.3(f)) or
to cause such Highly Compensated Employees Deferral
Percentage (or Contribution Percentage) to equal that
of the Highly Compensated Employee with the next
highest Deferral Percentage (or Contribution
Percentage).
(ii) If the nondiscrimination requirements set forth in
Section 3.3(c) (or Section 3.3(c)) are still not
satisfied after the reduction in subsection (1) is
made, the Highly Compensated Employee with the highest
Deferral Percentage (or Contribution Percentage) shall
have his total Pretax Contributions (or After-tax and
Employer Profit-Sharing Contributions) reduced to the
extent required to meet the nondiscrimination
requirements of Section 3.3(c) (or Section 3.3(c)) or
to cause such Highly Compensated Employee's Deferral
Percentage (or Contribution Percentage) to equal that
of the Highly Compensated Employee with the
next-highest Deferral Percentage (or Contribution
Percentage).
(iii)If the nondiscrimination requirements set forth in
Section 3.3(c) (or Section 3.3(c)) are still not
satisfied after the reduction in subsection (2) is
made, the process shall be repeated until the
nondiscrimination requirements of Section 3.3(c) (or
Section 3.3(c)) are satisfied.
(j) Aggregation of Plans. In the event this Plan is aggregated with
any other plan maintained by an Affiliated Employer and treated
as a single plan for purposes of Code Sections 401(2)(4) and
410(b) (other than Section 410(b)(2)(A)(ii)), all Pretax
Contributions, After-tax Contributions, and Employer
Profit-Sharing Contributions made under the two Plans shall be
treated as made under a single plan, and if two (2) or more of
such plans are permissively aggregated for purposes of Sections
401(k) and 401(m) of the Code, such plans shall be treated as a
single plan for purposes of satisfying Sections 401(a)(4) and
410(b) of the Code.
<PAGE>
(k) Disaggregation of Plan. Notwithstanding anything contained in the
Plan to the contrary, in the event the mandatory disaggregation
rules of Reg. Section 1.401(k)l(g)(11)(iii) and/or
1.401(m)-l(b)(3)(ii) require that this Plan be treated as two (2)
or more separate plans, the provisions of the Plan shall be
applied separately with respect to each deemed separate plan, as
necessary and appropriate.
In the case of a deemed separate plan that covers eligible
Employees employed within a edification with respect to which
retirement benefits have been the subject of collective
bargaining, the provisions of Sections 3.3(c), 3.3(c), and 3.3(o
shall apply to such deemed separate plan effective for Plan Years
beginning on or after January 1, 1993 and the provisions of
Sections 3.3(f), 3.3(g), 3.3(h), and 3.3(i) shall be deemed
satisfied by such deemed separate plan.
(l) Code Section 415 Limits. Any annual additions made on behalf of a
Participant hereunder shall be limited to the extent required by
Section 415 of the Code and rulings, notices, and regulations
issued thereunder. To the extent applicable, Section 415 of the
Code and rulings, notices, and regulations issued thereunder am
hereby incorporated by reference into the Plan. In calculating
these limits, the following rules shall apply:
(i) In the event the Committee determines that the annual
additions made on behalf of a Participant during any
Limitation Year are in excess of the limitations of
this Section 3.3(m) as the result of a mistake in
estimating a Participants Compensation, a reasonable
error in determining the amount of Pretax Contributions
that may be made with respect to any Participant, or
under other limited facts and circumstances that the
Commissioner of Internal Revenue finds justify the use
of these rules, such annual additions shall be reduced
by returning the Participants After-tax Contributions
and/or Pretax Contributions, as appropriate, plus any
gains or losses, for such Limitation Year in such
amount so that the limitations of this Section 3.3(m)
are not exceeded. Any After-tax Contributions and
Pretax Contributions thus distributed shall be
disregarded for purposes of Sections 3.3(b)(i) and
3.3(b)(ii), as appropriate.
If, following the return of all the Participants After-tax
Contributions and/or Pretax Contributions that may be
refunded, the annual additions made on behalf of a
Participant during the Limitation Year are still exceeded,
such annual additions shall be reduced to the extent
necessary, first from unmatched Pretax Contributions, then
from Employer Profit-Sharing Contributions, then from any
remaining Pretax Contributions for such Limitation Year, so
that the limitations of this Section 3.3(m) are not
exceeded. The amount of such reduction shall be credited to
an unallocated Employer Contribution Account, shall not be
subject to adjustment in accordance with Section 4.1, and
shall be deemed to be an Employer Profit-Sharing
Contribution for the Participant for the next succeeding
Limitation Year (and succeeding Limitation Years as
necessary) and used to fulfill the Employer's obligation
under Section 3.2 in such following Limitation Year.
However, if the Participant is not covered under the Plan as
of the end of the Limitation Year, the excess amounts must
be held in the unallocated Employer Contribution Account and
reallocated in the next Limitation Year to all the remaining
Participants in the Plan.
<PAGE>
(ii) If the Participant is, or ever has been, covered under
one (1) or more qualified defined benefit plans
maintained by the Employer or Affiliated Employer, the
combined plan limits of Code Section 415(c) shall be
calculated by reducing the limits applicable to the
defined benefit plans first, prior to restricting
annual additions to this Plan.
(m) Excess Contributions. The amount of excess contributions to be
distributed or recharacterized shall be reduced by excess
deferrals previously distributed for the amble year ending in the
same Plan Year and excess deferrals to be distributed for a
taxable year will be reduced by excess contributions previously
distributed or recharacterized for the Plan beginning in such
taxable year. Failure to correct excess contributions by the
close of the Plan Year following the Plan Year for which they
were made will cause the cash or deferred arrangement to fail the
requirements of Code Section 401(k)(3) for the Plan Year for
which the excess contributions were made and for all subsequent
years they remain in the trust. Also, the employer will be liable
for a 10% excise tax on the amount of excess contributions unless
they are corrected within two-and-one-half (2-1/2) months after
the close of the Plan Year for which they were made.
Notwithstanding the foregoing, the recharacterized excess
contributions will remain subject to the nonforfeitability
requirements and distribution limitations that apply to elective
contributions.
<PAGE>
(n) Excess Aggregate Contributions. In the event of a Highly
Compensated Employee whose actual contribution ratio (ACR) is
determined under the family aggregation rules, the determination
of the amount of excess aggregate contributions shall be made as
follows: The ACR is reduced in accordance with the "leveling"
method described in Section 3.3(i) and the excess aggregated
contributions are allocated among family members in proportion to
the contributions of each family member that have been combined.
Notwithstanding the foregoing, the amount of excess aggregate
contributions for a Plan Year shall be determined only after
determining the excess contributions that are treated as Employee
contributions due to recharacterization. Distribution (or
forfeiture, if applicable) of excess aggregate contributions
shall be made on the basis of the respective portions of such
amounts attributable to each Highly Compensated Employee.
3.4 Limitation on Annual Additions
(a) Basic.
Notwithstanding Sections 3.1, 3.2, and 3.3, and subject to the
provisions of paragraphs (b) and (c) below, the amount of Annual
Additions allocated to any Member's Accounts for a Plan Year will
not exceed the law of 25% of a Member's Earnings paid in such
year, or the amount in Code Section 415(c)(1)(A).
For purposes of this section, "Annual Additions" means the total
amount of Employer Profit-Sharing Contributions, Member Savings,
and forfeitures allocated to the Member's Accounts during the
Plan Year.
(b) Participation in Other Defined Contribution Plans.
The limitation of this Section 3.4 for any Member who at any time
has participated in any other qualified defined contribution plan
(as defined in ERISA Section 3(34) and Code Section 414(i))
maintained by the Affiliated Employer will apply as if the total
contributions allocated under all such defined contribution plans
in which the Member has participated were allocated under one
plan.
(c) Participation in this Plan and Defined Benefit Plan.
If a Member has been a participant in a qualified defined benefit
plan (as defined in ERISA Section 3(35) and Code Section 414(j))
maintained by the Affiliated Employer, the sum of the Member's
Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction for any year will not exceed one. For purposes of this
subsection (c) only, the following words and phrases have the
meanings specified below:
<PAGE>
(i) "Defined Benefit Plan Fraction" for any Plan Year means a
fraction in which the numerator is the Member's Projected
Annual Benefit, as defined below, as of the end of the year,
and the denominator is the lesser of 1.25 multiplied by the
dollar limitation in effect under Code Section 415(b)(1)(A)
for such Plan Year or 1.40 multiplied by 100% of the
Member's average annual Earnings for the highest three
consecutive calendar years of participation.
(ii) "Defined Contribution Plan Fraction" for any Plan Year means
a fraction, not to exceed one, in which the numerator is the
sum of all Annual Additions made on behalf of the Member to
his Accounts in such Plan Year and for all previous Plan
Years, and the denominator is the sum of the lesser of (A)
or (B) determined for such Plan Year and for each previous
Plan Year during which the Member was employed by the
Affiliated Employer:
(A) 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for such Plan Year.
(B) 1.40 multiplied by 25% of the Member's Earnings in such
Plan Year.
(iii)"Member's Projected Annual Benefit" means the annual benefit
to which the Member would be entitled under all defined
benefit plans sponsored by the Affiliated Employers,
assuming the Member continues employment until Normal
Retirement Date, the Member's Earnings continue until Normal
Retirement Date at the rate in effect during the current
calendar year, and all other factors relevant for
determining benefits under the Plan remain constant at the
level in effect during the current calendar year.
In the event that the sum of the Member's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction for any Plan Year
exceed one, adjustments will be made by first reducing the amount
in the numerator of the Defined Benefit Plan Fraction, to the
extent possible, and then by reducing the amount in the numerator
of the Defined Contribution Plan Fraction.
<PAGE>
(d) Reduction in Allocation.
If the limitations described in Section 3.4(a), (b), and (c) are
not effective in limiting the amount to be allocated to the
Accounts of a Member for a Plan Year, the annual contributions
will be reduced as necessary to bring them within the limitation,
as follows:
(i) The Member's Part I After-Tax Savings under Section 3.1(a)
(ii) Interest or earnings on the Member's Part I After-Tax
Savings
(iii) The Member's Part II Pretax Savings under Section 3.1(b)
(iv) Interest or earnings on the Member's Pretax Savings
(v) The Employer's Profit-Sharing Contributions under Section
3.2
(vi) Interest or earning on the Employees Contributions.
Any such amounts will be returned by March 15 of the following
Plan Year.
(e) The determination of the limitation on Annual Additions described
in this Section 3.3 will be made considering the Employees of the
Affiliated Employers as employed by a single employer. Such
determination will be made assuming the phrase "more than fifty
percent" is substituted for the phrase "at least eighty percent"
wherever it appears in Code Section 1563 (a)(1).
3.5 Rollover Contributions
(a) Employee of Affiliated Employer.
A Member may transfer to this Plan any amounts attributable to
such Member under a prior qualified defined contribution
profit-sharing plan, as defined in ERISA Section 3(34),
maintained by the Affiliated Employer or from any other plan as
approved by the Committee that meets the requirements of Code
Section 402(a)(5). Such contributions will be allocated to the
Member's Rollover Account and will be subject to all the terms
and conditions of this Plan.
<PAGE>
ARTICLE 4
INVESTMENT OF CONTRIBUTIONS AND
VALUATION OF ACCOUNTS
4.1 Members Accounts.
Committee will establish and maintain in the name of each Member the
following Accounts, as applicable: Employer Profit-Sharing Accounts
(Parts I and II), a Pretax Account, an After-Tax Account, and a
Rollover Account. A Member's Accounts will be credited with
contributions, charged with withdrawals, distributions, and expenses,
and adjusted for investment results as determined under the Plan.
Member's Savings or Employer Profit-Sharing Contribution shad be paid
to the Funding Agent by the Employer and, after deduction of the
administrative expenses by the Funding Agent, credited to the Accounts
maintained for such Member by Funding Agent in accordance with the
group annuity contract or contracts. In lieu of deduction, the
Employer must pay all or a part of the administrative expenses by the
Funding Agent.
4.2 Investment.
Each Member will have his Accounts invested with the Funding Agent.
The Funding Agent provides the Investment Funds set forth in Appendix
B to this Plan. The Board may from time to time add or change the
Investment Funds offered by the Plan. Changes in Investment Funds made
by resolution of the Board will be reflected in Appendix B.
4.3 Investment of Savings.
Members will have the right upon enrollment to elect the Investment
Funds in which deferrals will be invested by delivering a written
notice to the Committee. Such written notice will include the
percentage, in 10% increments, of future contributions to invested in
each Investment Fund, with the total of the percentages to equal 100%.
To extent not specified, a Member's Savings Accounts will be invested
in Fund A.
4.4 Investment of Employer Contributions.
Members will have the right upon enrollment to elect the Investment
Funds separately under which future Employer Profit-Sharing
Contributions will be invested by delivering a written notice to the
Committee. Such written notice will include the percentage, in 10%
increments, of future Employer Profit-Sharing Contributions to be
invested separately each Investment Fund, with the total of the
percentages to equal 100%. Members may make a separate election for
the investment of any Employer (Part II) Profit-Sharing Contributions.
To the extent not specified, Employer Profit-Sharing Contributions
will be invested in Fund A.
<PAGE>
4.5 Investment of Rollover Contributions.
Members will have the right upon enrollment to elect the Investment
Funds in which Rollover Contributions will be invested by delivering a
written notice to the Committee. Such written notice will include the
percentage, in 10% increments, of future contributions to be invested
in each Investment Fund, with the total of the percentages to equal
100%. To the extent not specified, a Member's Rollover Account will be
invested in Fund A.
4.6 Change in Investment of Future Contributions.
A Member may change the percentage of future Savings, Employer
Profit-Sharing Contributions, and Rollover Contributions at any time
during the Plan Year by delivering written notice to the Committee or
by contacting the Funding Agent on their toll-free investment phone
fine.
No such change may be retroactive. Such changed proportion will apply
to such contributions received by the Funding Agent on or after the
later of the effective date of such change and the date of receipt of
such notification of change by the Funding Agent until any subsequent
change is made by the Member.
4.7 Transfer of Invested Accounts.
A Member may transfer amounts between his Accounts by notifying the
Committee in writing or by contacting the Funding Agent on their
toll-free investment phone line. Such transfer will be effective on
the Funding Agents receipt of the written request or the date the
telephone request, subject to any restrictions imposed by the Funding
Agent.
If a Member requests a transfer of a portion of an Account and if the
dollar value of such Account after such transfer would be less than
$1,000, the Member will be deemed to requested a transfer of the
entire Account.
A transfer may be made as frequently as requested by a Member without
restrictions, except those that may be imposed by the Funding Agent.
<PAGE>
4.8 Allocation of Investment
Income on a Valuation Date. As of each Valuation Date, the Funding
Agent will determine the net investment gain or after adjustment for
any applicable expense, of each Investment Fund since the preceding
Valuation Date. The net investment gain or loss of each Fund will be
allocated to each Member's Account balance in the ratio that the net
investment gain or loss of that Fund as the portion of such Member's
Account balance invested in the Fund bears to the total of all
Members' Account balances invested in such Fund.
<PAGE>
ARTICLE 5
WITHDRAWALS
5.1 Withdrawals from Member Accounts.
Withdrawals may be made only from Members' After-Tax and Rollover
Accounts. A Member may request up to two withdrawals from his Accounts
each Plan Year by submitting a written request to the Committee at
least 30 days in advance. A Member may only withdraw from his
After-Tax Savings Account and then his Rollover Account. Accounts will
be debited from Investment Funds in the same ratio as each Fund bears
the total Investment Funds in that Account.
5.2 Withdrawals from Employer (Part I) Profit-Sharing Contribution
Account.
A Member who has been a Member for at least 60 calendar months may
withdraw not than $1,500 and up to 65% of the Vested portion of his
Employer (Part I) Profit-Sharing Contribution Account. The request
must be in writing and submitted to the Committee at least 30 days
before the date the withdrawal is requested. This Account will debited
in the same ratio as each Fund bears to the total Investment Funds in
that Account. After a Member has made a withdrawal no subsequent
withdrawal may be made from this Account until the fifth anniversary
of such withdrawal.
5.3 Loans.
No loans are permitted from this Plan.
5.4 Withdrawals Subject to Spouse's Consent.
Before a married Member may receive a withdrawal, the Spouse of such
Member must consent to the withdrawal in writing, witnessed by a
notary public, the United States armed forces military equivalent of a
notary public, a Plan representative or such other individual and in
such manner as may be authorized by the Plan Administrator to witness
such consent.
<PAGE>
ARTICLE 6
RETIREMENT, DEATH, DISABILITY, AND
TERMINATION OF EMPLOYMENT BENEFITS
6.1 Retirement Benefits.
The retirement benefits payable for a Member on or after his
Retirement Date will equal 100% of the value of his Accounts, payable
in the form of an annuity or lump sum, as provided in Article 7. An
Employee will be 100% Vested in all his Accounts upon attainment of
age 65.
6.2 Death Benefits.
The death benefit payable to a Beneficiary for a Member whose
employment terminates of death will equal 100% of the value of the
Member's Accounts on the Valuation immediately following the Member's
death.
6.3 Disability Benefits.
The disability benefit for a Member who is Permanently and Totally
Disabled will be 100% of the value of his Accounts on the Valuation
Date immediately following the date on which the Committee determines
that he is Permanently and Totally Disabled.
6.4 Benefits upon Termination of Employment.
The benefit for a Member whose employment terminates for any reason
other than death, disability, or attainment of his Retirement Date
will be the Vested value of his Accounts on the Valuation Date
immediately following termination of employment. The Vested value of a
Member's Accounts will equal:
(a) Savings Accounts: 100%
(b) Employer (Part II) Profit-Sharing Account: 100%
(c) Rollover Account: 100%
<PAGE>
(d) Employer (Part I) Profit-Sharing Account: according to the
following schedule:
Years of Service Vested Percentage
------------------------------ --------------------------------
Less than 1 0
1 0
2 0
3 30
4 40
5 60
6 80
7 100
6.5 Prior Service Credited for Vesting Purposes.
If the Employee satisfies the eligibility requirements under this
Plan, his Year of Service for Vesting purposes shall include any prior
Service for a predecessor employer and/or Service as a leased
employee, within the meaning of Code Section 414(n), to any Employer
aggregated under Code Section 414(b), whether or not such individual
is eligible to participate in this Plan. "Service" means an Employee's
period of employment with the Employer or an affiliated Employer.
6.6 Forfeitures
The nonvested portion of a Member's Employer Profit-Sharing Account,
if any, will be forfeited the earlier of (i) distribution of the
vested portion of such Account to the Member (if less than the full
value), or (ii) when he has incurred five consecutive One- Year Breaks
in Service. Any such forfeitures will be applied first to restore the
forfeited portions of the Employer Profit-Sharing Account of rehired
Members described in Subsection 6.7(a). Any remaining forfeitures will
be allocated as of the last day of the Plan Year to the Employer
Profit-Sharing Account of each Active Member, employed on that date,
who received an Employer Contribution for that Plan Year. The amount
to be allocated for all such Members will be the ratio of (i) the
Employer Profit-Sharing contribution to the Member's account for such
Plan Year to (ii) the total amount of Employer Profit-Sharing
contributions to all Members' accounts for such Plan Year. If the
amount of forfeitures available is insufficient to restore the
Accounts required to be reinstated for rehired Members, the Employer
will make an additional contribution in an amount required to
reinstate such Accounts fully.
<PAGE>
6.7 Reinstatement of Forfeited Accounts
(a) For a Member whose termination of employment occurs before he is
100% Vested in his Employer Profit-Sharing Account and who is
rehired before incurring five consecutive One-Year Breaks in
Service, the value of his Account that was forfeited when his
employment terminated, in accordance with Section 6.4, will be
restored, without any interest thereon, only upon the repayment
of the amount of the distribution attributable to such
contributions, to the Member's applicable Accounts. Such
repayment must be made within five years of the Member's date of
reemployment.
(b) A Member whose termination of employment occurs before he is 100%
Vested in his Employer Profit-Sharing Account and who is rehired
after incurring five consecutive One-Year Breaks in Service will
not have the value of his Accounts restored that were forfeited
on his original termination.
(c) For a Member who was Vested in any portion of his Savings or
Employer Profit-Sharing Accounts, all pre-break service will
count toward Vesting in such Member's Accounts accrued after such
break, regardless of the number of One-Year Breaks in Service.
<PAGE>
ARTICLE 7
DISTRIBUTION OF BENEFITS
7.1 Normal Form of Retirement Benefit
(a) The Normal Form of Retirement Benefit for a Member who has no
Spouse is a single life annuity with monthly payments beginning
on his Retirement Date continuing to the first day of the month
in which the Member dies.
(b) The Normal Form of Retirement Benefit for Member who has a Spouse
is a 50% joint and survivor ten-year certain annuity, described
in Section 7.2(b), with the Spouse as the joint annuitant. Under
this form of benefit a Member will receive monthly payments for
life continuing to the first day of the month in which he dies.
Thereafter, 50% of the amount of such monthly payment will be
continued monthly for life to the surviving Spouse continuing to
the first day of the month in which the Spouse dies. If the
Member and Spouse both die before 120 monthly payments have been
received, the payments will continue to their Beneficiary until a
total of 120 payments have been made.
7.2 Optional Forms of Retirement
Benefit Not more than 90 days preceding the Member's actual Retirement
Date and instead of receiving benefits under the Normal Form of
Retirement Benefit, any Member may elect to receive his Retirement
Benefit payments under one of the options forms.
If a Member who has a Spouse elects an optional form of benefit
payment, his Spouse must consent to such election and acknowledge its
effect, and such consent must be witnessed by a notary public or Plan
representative. Such spousal consent is not required if the Member
elects the 50% or 100% joint and survivor ten-year certain annuity
option with his Spouse as joint annuitant or if it is established to
the satisfaction of a Plan representative that a Member has no Spouse
or the Spouse cannot be located, or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe. Any consent of a Spouse or the establishment that the
consent of a Spouse cannot be obtained shall be effective only with
respect to that particular Spouse. A Member may revoke the election of
an optional form of payment without his Spouse's consent at any time
before payments begin.
<PAGE>
Notwithstanding the foregoing, prior to the ninety (90) day period
ending on the annuity starting date, a Member may waive the Qualified
Joint and Survivor Annuity (QJSA) form of benefit provided that a
completed waiver form is filed with the Plan Administrator, and that
the following conditions are satisfied:
1. The Member's Spouse consents in writing to the election and the
Spouse's consent is witnessed by a Plan representative or Notary
Public;
2. The Member's waiver and the Spouse's consent state that the
specific nonspouse beneficiary (including any class of
beneficiaries or contingent beneficiaries) and the participant
optional form of benefits, neither of which may be further
modified (except back to a QJSA) without subsequent spousal
consent (unless expressly permitted by the spouse), and
3. The Spouse's consent acknowledges the effect of the election.
Notwithstanding the foregoing, payment in the form of a QJSA (or QPSA)
shall commence immediately upon formal notification of the surviving
Spouse's interest under this Section 7.2.
Any form of Retirement Benefit payment that is not a lump sum or an
installment payment will be made through a paid-up, non-transferable
annuity contract that is qualified for the payment of retirement
benefits under the terms of the Plan, the Code, and ERISA. The
Committee will instruct the Funding Agent or Trustee as to the insurer
and the form of any annuity contract to be purchased from the Accounts
of the Member.
(a) Single Life Annuity
Monthly payments will be made to the Member beginning on his
Retirement Date and continuing to the first day of the month in
which he dies.
(b) Joint and Survivor Ten-Year Certain Annuity
The Member will receive monthly payments for life. Such payments
shall continue until the first day of the month in which his
death occurs, at which time 50% or 100% (whichever the Member
selects) of the amount of such monthly payment will be continued
monthly for life to the person whom the Member designated as
joint annuitant. The last payment to the joint annuitant will be
made on the first day of the month in which the joint annuitant
dies. A contingent annuitant must be named at the time this form
is elected. The benefit a Member will receive will depend on the
percentage of the monthly amount that he elects to continue to
his joint annuitant as well as his age and his joint annuitant's
age. If the Member and joint annuitant both die before 120
payments have been received, the payments will continue to the
contingent annuitant until a total of 120 payments have been
made.
<PAGE>
(c) Ten-Year Certain and Life Annuity
The Member or his Beneficiary will receive monthly payments for
the greater of (i) 10 years, or (ii) the life of the Member.
(d) Ten-Year Certain Annuity
The Member will begin receiving monthly payments on his
Retirement Date which will continue until 120 payments have been
made. If the Member dies, his Beneficiary will receive the
balance of the payments.
(e) Time Period Installments
A Member will begin receiving on his Retirement Date month,
quarterly, semiannual, or annual payments over a specified period
of years not in excess of 20 years, as elected by the Member. The
distribution in any year shall be determined as a fraction of the
Member's total remaining Accounts value, such fraction being
determined as of the most recent Valuation Date as one divided by
the remaining number of years of the specified period, in
accordance with the election of the Member; provided, however,
that no arrangement may be made that would result in a periodic
payment of less than $50.00. Upon the death of the Member after
distributions commence, the Beneficiary may similarly elect to
receive the balance of the Accounts of the Member in installments
over not more than five years or in a lump sum, and upon the
Beneficiary's subsequent death, the balance, if any, in the
Accounts of the Members shall be paid in a lump sum to the estate
of the Beneficiary.
(f) Level Dollar Installments
A member will begin receiving payments on his Retirement Date
from the Member's Accounts, level monthly, quarterly, semiannual,
or annual payments of such amount as elected by the Member,
payable until there is no balance remaining in the Member's
Accounts. The total annual amount of such installments must equal
not less than 10% of the value of the Member's total Accounts as
of the Valuation Date immediately preceding the date the
distribution begins and that no single installment payment may be
less than $50.00, or which involves payments over more than 20
years. If the Member dies while payments are being made under
this option, the Beneficiary shall receive the balance of the
Member's Accounts in a lump sum.
<PAGE>
(g) Lump Sum (for amounts over $3,500)
Subject to the provisions of Section 7.5, if the value of a
Member's Accounts is over $3,500, determined as of the date of
employment termination, such benefit may be paid in a lump sum to
the Member, his Spouse, or Beneficiary, whichever is applicable.
Notwithstanding the foregoing, the Plan shall not distribute the
Member's accrued benefit in any form other that a QJSA (or QPSA)
without the consent of the Member's Spouse where the present
value, as determined under Section 7.5, of the nonforfeitable
benefit does not exceed $3,500.
The Plan shall not require a surviving Spouse to begin receiving
benefits under a QPSA prior to the time the Member would have
attained the later of age 62 or Normal Retirement Age (as defined
in Code Section 411(a)(8)), except where the present value of the
nonforfeitable benefit does not exceed $3,500, as determined
under Section 7.5.
Notwithstanding the following, a Member's surviving Spouse may
direct the commencement of payments under the Qualified
Preretirement Survivor Annuity within a reasonable time after the
Member's death.
(h) Optional Form of Benefit
Any optional form of benefit may be revoked by the Member at any
time before payments begin and will be deemed automatically
revoked by the death of either the Member or the joint annuitant
before the member's actual Retirement Date or his Normal
Retirement Date, whichever is earlier. A Member may designate his
Spouse or any other person as his joint annuitant provided that,
if he designates someone other than his Spouse as joint
annuitant, the optional form of payment he elects provided for
distributions to the Member which, as of his payment commencement
date, will provide for payments that satisfy the requirements for
minimum distribution of incidental benefits under Code Section
401(a)(9).
7.3 Notice to Members
At least thirty (30) days, but under no circumstances more than ninety
(90) days, prior to a Member first becoming eligible to elect an Early
Retirement Date or any earlier payment commencement date, the
Committee shall furnish the Member and Spouse with a written
explanation of:
<PAGE>
(a) The terms and conditions of the Normal Form of benefit under
Section 7.1,
(b) The right to elect to receive his benefit in an optional form
under Section 72., and the effect of such election,
(c) The rights of the Spouse if an optional form of benefit is
elected under Section 7.2, and
(d) The right to make, and the effect of, a revocation of an election
under subsection (b) above.
The notice and explanation will also inform the Member that additional
information is available upon written request to the Committee within
60 days after the original notice is received. The additional
information available upon such written request will consist of a
written explanation in nontechnical language of the terms and
conditions of the 50% joint and survivor ten-year certain annuity
option and the financial effect in terms of dollars per annuity
payment of making any other election. The Committee shall mail or
deliver the explanation to the Member within 30 days of his request.
However, the Committee shall not be required to comply with more than
one request for additional information by any Member.
In the event a Member chooses to continue employment after he becomes
eligible for an Early Retirement Date, the above information shall be
supplied to the Member at least nine months before his Normal
Retirement Date.
Notwithstanding the foregoing, a Member who has elected to waive the
QJSA by completing the designated waiver form and satisfying the
above-mentioned criteria may revoke the election at any time and any
number of times during the ninety (90) day period ending on the
annuity start date.
7.4 Form of Distribution Upon Death
The following terms apply with respect to benefits payable upon the
death of a Member prior to retirement or other termination:
<PAGE>
(a) The Beneficiary of a married Member will be his Spouse unless the
Member designates a Beneficiary other than his Spouse and the
Spouse consents in writing to such designation; the consent must
acknowledge the effect of the designation and must be witnessed
by a notary public or a Plan representative. The Committee may
dispense with the Spouse's consent if the Spouse cannot be
located, or for such other reasons as provided in Treasury
Regulations.
(b) Unless an optional form of benefit is selected pursuant to a
qualified election with the election period described below, if a
Member who is credited with at least one Hour of Service dies
before a distribution of his Account(s) has been made, then 50%
of the Vested amount of his Account(s) will be applied to
purchase an annuity for the life of his surviving Spouse. The
Spouse may elect a different form of benefit provided under the
Plan. The remaining 50% of the Vested amount of his Account(s)
will be paid to the Member's designated Beneficiary in the form
selected by him or his Beneficiary (his surviving Spouse may also
be his designated Beneficiary).
"Election period" means the period that begins on the first day
of the Plan Year in which the Member attains age 35 and ends on
the date of the Member's death. If a Member separates from
service before the first day of the Plan Year in which he attains
age 35, with respect to the amount of his Account(s) as of the
date of separation, the election period will begin on the date of
separation.
The Committee will provide each Member on or after the first day
of the Plan Year in which the Member attains age 35. A Member may
waive the Qualified Preretirement Survivor Annuity (QPSA)
provided that a completed waiver form is filed with the Plan
Administrator and that the following conditions are satisfied:
1. The Member's spouse consents in writing to the election and
the Spouse's consent is witnessed by a Plan representative
or Notary Public;
2. The Member's waiver and the Spouse's consent state the
specific nonspouse beneficiary (including any class of
beneficiaries or contingent beneficiaries), which may not be
modified (except back to a QPSA) without subsequent spousal
consent;
<PAGE>
3. The Spouse's consent acknowledges the effect of the
election. If the Member separates from service before the
Plan Year in which he attains age 35, the foregoing election
may be made on or after the date of separation with respect
to benefits accrued prior to separation.
(c) A "qualified election" is an election by the Member of a form of
distribution other than a joint and survivor annuity providing
for payments after his death to his surviving Spouse or of a form
of preretirement death benefit other than a life annuity to such
Spouse. Any waiver must be in writing and must be consented to by
the Member's Spouse. The Spouse's consent must be witnessed by a
notary public. However, if the Member establishes to the
satisfaction of a Plan representative that such written consent
may not be obtained because there is no Spouse or the Spouse
cannot be located, a waiver by the Member will be deemed a
qualified election. Any consent necessary under this subsection
will be valid only with respect to the Spouse who signs the
consent, or in the event of a deemed qualified election, the
designated Spouse. Additionally, a revocation of a prior waiver
may be made by a Member without the Spouse's consent at any time
before a distribution of the Member's Account(s) is made. The
number of revocations will not be limited.
(d) The information that the Committee must give each Member during
the election period that applies to the selection of a form of
distribution must include a written explanation of the rights of
the Member's Spouse.
7.5 Small Benefits
If the value of a Member's Accounts under the Plan is $3,500 or less,
determined as of the date of distribution or death, such benefit will
be automatically paid in a lump sum to the Member, his Spouse, or
Beneficiary, whichever is applicable. Such payment is in lieu of and
in full satisfaction of all benefits payable under the Plan to such
Member, Spouse, or Beneficiary. The applicable dollar amount will be
automatically increased if rulings or regulations issued by the
Internal Revenue Service so allow.
To determine the benefit of a Member who receives any benefit payment
in accordance with this Article and who later becomes entitled to
receive additional benefits from the Plan, such subsequent benefit
shall be reduced by the value of the payments he received earlier.
Notwithstanding the foregoing, if the present value of a Member's
Account at the date of distribution exceeds $3,500, then the present
value at any subsequent Determination Date shall be deemed to exceed
$3,500 for purposes of determining small benefits under this Section
7.5.
<PAGE>
7.6 Timing of Distributions
(a) Distributions under the Plan pursuant to Article 6 will begin as
soon as practical after the first Valuation Date following the
date the Member terminates employment with the Employer, but not
later than 60 days following the end of the Plan Year in which
the Member attains age 65 or terminates employment, if later. If
a Member is rehired by the Employer before his benefit is
distributed by the Funding Agent, any benefit payments he was
entitled to receive will continue during his subsequent period of
employment. When such a Member later again terminates employment,
his benefits payable from the Plan will include only the Vested
value of his Account attributable to his latest period of
employment to the extent he has not repaid his former
distribution in accordance with Section 6.6.
(b) If the Vested value of the terminated Member's Accounts exceeds
$3,500, the Member's consent is required for a distribution
beginning before he attains age 65. A Member may defer receipt of
his distribution up to the later of his Normal Retirement Date or
the date he makes a written election to receive his
nonforfeitable Account, but no later than allowed in 7.6(c). A
Member electing to defer receipt of his distribution will
continue to share in the allocation of investment income pursuant
to Article 4. Such Member should notify the Committee in writing
of subsequent changes in his investment election, beneficiary, or
address.
(c) Minimum Required Distributions. Notwithstanding any provision in
the Plan to the contrary, all distributions under the Plan shall
be made in accordance with the requirements of Code Section
401(a)(9) and the regulations thereunder, including the
incidental death benefit requirement of IRS Proposed Regulations
Section 1.401(a(9)-2. The provisions in this section override any
distribution options under the Plan if inconsistent with the
requirements of Code Section 401(a)(9).
(i) Pre-Death Distribution. Distributions to a participant shall
commence no later than the April 1 of the calendar year
following the calendar year in which a Participant attains
age seventy and one-half (70 1/2); however, if a Participant
attained age 70 1/2 before January 1, 1988, distributions to
such Participant shall commence no later than the April 1
following the calendar year in which such Participant
retires. Distributions shall be made in one of the forms
specified under Code Section 7.1 or 7.2. In no event shall
distributions be made for a period greater than the life
expectancy of the Participant or joint life expectancy of
the Participant and his Spouse determined as of the April 1
of the calendar year in which the Participant attains age
70 1/2 or retires, as the case may be.
<PAGE>
(ii) Post-Death Distributions. In the event of the death of the
Participant, any payments due following the death of the
Participant shall be made in accordance with Article 7. in
the case of a Participant who had begun to receive
distributions under Section 7.6(c), distributions shall be
made after such Participant's death at least as rapidly as
before his death. in the case of other Participants, in no
event shall distributions be made later than the end of the
calendar year that contains the fifth anniversary of the
date of the Participant's death.
(d) If an annuity is to be paid, the payments must be made over:
(i) The life of the Member,
(ii) The lives of the Member and his eligible Spouse if payments
are to be made to the Spouse, otherwise his designated
Beneficiary,
(iii)A period not extending beyond the Member's life expectancy,
or (iv) A period not extending beyond the life expectancy of
the Member and his eligible Spouse if applicable, otherwise
his designated Beneficiary.
(e) If a Member dies before his distribution date, the total value of
his Account(s) must be distributed within five years after his
death. However, this will not apply if:
(i) Annuity payments are to be made to the Member's eligible
Spouse as described in the Plan and will (a) be made over
the life of the Spouse and (b) begin to the Spouse no later
than the date on which the Member would have attained age
70 1/2, or
(ii) Annuity payments are to be made to the Member's designated
Beneficiary whether or not his eligible Spouse and will
(a) made over the life of the Beneficiary or over a period
not extending beyond the life expectancy of the Beneficiary
and (b) begin no later than one year after the Member's
death.
<PAGE>
7.7 Distributions Pursuant to a Qualified Domestic Relations Order
Notwithstanding any other provisions of this Plan, regardless of
whether the Member is eligible to receive a distribution of his/her
Accounts, an alternate payee (as defined in Section 414(p)(8) of the
Code) may elect to take a distribution of his/her interest in a
Member's Accounts as soon as administratively feasible from the date
on which the Committee determines that such distribution is permitted,
pursuant to a "qualified domestic relations order" as defined in
Section 414(p)(1)(A) of the Code.
If a qualified domestic relations order so provides, the Committee
shall establish a segregated account for that share of a Plan Member's
benefits assigned to the alternate payee under a qualified domestic
relations order and shall, to the extent allowed by law and as
provided under the Plan and qualified domestic relations order, treat
the alternate payee as a Plan Member for purposes of determining the
alternate payee's rights under the Plan.
7.8 Rollover Provision
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by the
plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. This provision applies to
distributions made on or after January 1, 1993. For purchases of this
Section the following terms shall apply.
(a) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: 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
Code Section 401(a)(9); and the portion of any distribution that
is not includable in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities).
(b) 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 Code Section
408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), 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.
<PAGE>
(c) 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 Code Section 414(p), are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
<PAGE>
ARTICLE 8
ADMINISTRATION
8.1 Plan Administrator and Fiduciary
The Plan Administrator and Fiduciary of the Plan, who shall have the
authority to control and manage the operation and administration of
the Plan, is Cubic Corporation.
8.2 Appointment of Committee
The Board will appoint a Plan Committee consisting of at least three
members to administer the Plan on the Employer's behalf. Vacancies int
he Committee will be filled from time to time by appointment of a new
Committee member by the Board.
A member of the Committee will hold office until he gives written
notice of his resignation to the Board, until death, or until removal
by the Board.
8.3 Powers and Duties
The Committee will have full power to administer the Plan and to
construe and apply all of its provisions on behalf of the Employer.
The Committee is the named fiduciary within the meaning of ERISA
Section 402(a) for purposes of Plan administration. The Committee's
powers and duties, unless properly delegated, will include, but will
not be limited to:
(a) Allocating fiduciary responsibilities, other than Trustee or
Funding Agent responsibilities as defined in ERISA Section
405(c), among the named fiduciaries and to designate one or more
other persons to carry out fiduciary responsibilities.
(b) Designating agents to carry out responsibilities relating to the
Plan, other than fiduciaries responsibilities.
(c) Deciding questions relating to eligibility, continuity of Years
of Service, and amounts of benefits.
(d) Deciding disputes that may arise with regard to the rights of
Employees, Members and their legal representatives, or
Beneficiaries under the terms of the Plan. Decisions by the
Committee will be deemed final in each case.
<PAGE>
(e) Obtaining information from the Employer with respect to its
Employees as necessary to determine the rights and benefits of
Members under the Plan. The Committee may rely conclusively on
such information furnished by the Employer.
(f) Compiling and maintaining all records necessary for the Plan.
(g) Authorizing the Funding Agent or Trustee to make payment of all
benefits as they become payable under the Plan.
(h) Engaging such legal, administrative, consulting, actuarial,
investment, accounting, and other professional services as the
Committee deems proper.
(i) Adopting rules and regulations for the administration of the Plan
that are not inconsistent with the Plan. The Committee may, in a
nondiscriminatory manner, waive the timing requirements of any
notice or other requirements described in the Plan. Any such
waiver will not obligate the Committee to waive any subsequent
timing or other requirements for other Members.
(j) Performing other actions provided for in other parts of this
Plan.
8.4 Actions by the Committee
A majority of the members composing the Committee at any time will
constitute a quorum. The Committee may act at a meeting, or in writing
without a meeting, by the vote or asset of a majority of its members.
The Committee will appoint a Committee Chairperson and a Secretary.
The Secretary will record all action taken by the Committee. The
Committee will have authority to designate in writing one of its
members or any other person as the person authorized to execute papers
and perform other ministerial duties on behalf of the Committee.
8.5 Interested Committee Members
No member of the Committee will participate in an action of the
Committee on a matter which applies solely to that member. Such
matters will be determined by a majority of the remainder of the
Committee.
8.6 Investment Manager
The Committee, by action reflected in its minutes, may appoint one or
more Investment Managers, as defined in ERISA Section 3(38), to manage
all or a portion of the assets of the Plan. An Investment Manager will
discharge its duties in accordance with applicable law and in
particular in accordance with ERISA Section 404(a)(1). An Investment
Manager, when appointed, will have full power to manage the assets of
the Plan for which it has responsibility, and neither the Employer nor
the Committee will thereafter have responsibility for the management
of such assets.
<PAGE>
8.7 Indemnification
The Employer, by this adoption, indemnifies and holds the members of
the Committee, jointly and severally, harmless from the effects and
consequences of their acts, omissions, and conduct in their official
capacities, except to the extent that the effects and consequences
result from their own willful misconduct, breach of good faith, or
gross negligence in the performance of their duties. The foregoing
right of indemnification will not be exclusive of other rights to
which each such member may be entitled by any contract or other
instrument or as a matter of law.
8.8 Conclusiveness of Action
Any action on matters within the discretion of the Committee will be
conclusive, final, and binding upon all Members in the Plan and upon
all persons claiming any rights, including Beneficiaries.
8.9 Payment of Expenses
The members of the Committee will serve without compensation for their
services. The compensation or fees of accounts, counsel, and other
specialists and any other costs of administering the Plan or Fund will
be paid by the Employer or charged to the Fund at the Employer's
discretion.
8.10 Claims Procedure
(a) Claim May Be Submitted
If a member or Beneficiary disagrees with the Committee's
determination of his right to Plan benefits, he may review
pertinent documents and submit a written claim for benefits that
should include the important reasons that the claim is being
made.
(b) Committee Response If It Denies Claim
If the claim is denied in whole or in part, the Committee shall
give an understandable, written response covering:
(i) The specific reasons why the claim is being denied, with
references to the pertinent Plan provisions, and
<PAGE>
(ii) The steps the claimant would need to take to obtain a final
review, and the information that would be necessary to
perfect his claim (and the reasons why).
(c) Claimant May Appeal Denial
The claimant may make a written appeal of the Committee's initial
decision and the Committee shall response in the same form as it
did in its initial decision.
(d) Time Limits
The claimant's claim and the Committee's decisions shall be made
promptly, subject to the following timetable:
Action Maximum Response Time
Committee's initial review 90 days after claim is filed
Claimant's appeal of review 60 days after initial review
Committee's final decision 60 days after appeal
(e) Time Limit Extensions
The Committee may extend its maximum response time to twice the
initial length of time if it responds to the claimant within the
normal time by giving an explanation of why an extension is
needed and when its decision will be forthcoming.
(f) Exhaustion of Remedies
If any dispute over benefits under this Plan occurs, all remedies
available to the disputing individual under this Article must be
exhausted before legal recourse of any type is sought.
<PAGE>
ARTICLE 9
AMENDMENT, TERMINATION, AND MERGER OF THE PLAN
9.1 Right to Amend the Plan and Define Powers of Committee
Cubic Corporation will have the right at any time and from time to
time to amend the Plan and/or define or redefine the powers of the
Committee to any extent it deems advisable. No such amendment,
definition, or redefinition of the powers of the Committee will be
inconsistent with ERISA, or increase the duties or responsibilities of
the Funding Agent or Trustee without the Funding Agent's or Trustee's
written consent. No amendment will be made to this Plan that attempts
to transfer any port of the corpus or income of the Fund to purposes
other than the exclusive benefit of Members and their Beneficiaries,
nor may any amendment reduce or diminish, either directly or
indirectly, the vested rights of any Member as of the date of such
amendment.
9.2 Right to Terminate the Plan
An Employer will have the right to terminate its participation in the
Plan, in whole or in part at any time. To the extent required under
the Code, upon termination, partial termination, or complete
discontinuance of contributions to the Plan, all Accounts of affected
Members will be 100% Vested.
9.3 Plan Merger and Consolidation
If the Plan is merged or consolidated with any other plan, or if the
assets or liabilities of the Plan are transferred to any other plan,
each Member will be entitled to a benefit immediately after the
merger, consolidated, or transfer, determined as if the Plan had then
terminated, at least equal to the benefit to which the Member would
have been entitled had the Plan terminated immediately before such
merger, consolidation, or transfer.
<PAGE>
ARTICLE 10
TOP-HEAVY PLAN REQUIREMENTS
10.1 General Rule. For any Plan Year for which the Plan is a Top-Heavy Plan
as defined in Section 10.5, any other provisions of the Plan to the
contrary notwithstanding, the Plan shall be subject to the provisions
of this Article 10.
10.2 Vesting Provision - Each Participant who has completed an Hour of
Service during the Plan year in which the Plan is a Top-Heavy Plan and
has completed the number of Years of Vesting Service specified in the
following table shall have a nonforfeitable right to the percentage of
his Employer Account (other than the Qualified Nonelective
Contribution subaccount) under this Plan, in accordance with the
following table:
Years of Vesting Service Vested Portion
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Each Participant's vested portion of his Employer Account shall not be
less than his vested Employer Account determined as of the last day of
the Last Plan Year in which the Plan was not a Top-Heavy Plan. If the
Plan ceases to be a Top-Heavy Plan, an Employee with three or more
years of employment, whether or not consecutive, shall have the vested
portion of his Employer Account determined in accordance with either
this Section 10.2 or Section 6.4.
10.3 Minimum Contribution Provisions. Each eligible Employee who (i) is a
Non-Key Employee, as defined in Section 10.7 and (ii) is employed on
the last day of the Plan Year, even if such Participant has failed to
complete one thousand (1,000) Hours of Service during such Plan Year,
shall be entitled to have an Employer Contribution of not less than
three percent (3%) of the Participant's Compensation, as defined for
purposes of Section 415 of the Code, allocated to his Employer
Account.
The minimum contribution percentage set forth above shall be reduced
for any Plan Year to the percentage at which contributions are made
under the Plan for the Plan Year for the Key Employee, as defined in
Section 10.7, for whom such percentage is the highest for such Plan
year. For this purpose, the percentage with respect to a Key Employee
shall be determined by dividing the contributions for such Key
Employee by his Compensation, as defined for purposes of Section 415
of the Code.
<PAGE>
Contributions taken into account under the immediately preceding
sentence shall include contributions under the Plan, including Pretax
Contributions, and under all other defined contribution and defined
benefit plans required to be included in an aggregation group, as
defined in Subsection 10.5(c), but shall not include any plan required
to be included in such aggregation group of such plan enables a
defined benefit plan required to be included in such group to meet the
requirements of Section 401(a)(4) and 410 of the Code.
Contributions taken into account under this Section 10.3 shall not
include any contributions under Social Security or any other federal
or state law.
10.4 Coordination with Other Plans. In the event that another defined
benefit or defined contribution plan maintained by the Employer or any
Affiliated Employer becomes top-heavy under Code Section 416, the
required minimum contribution and/or benefit under Reg. 1.416-(1)
shall be made under this Plan for purposes of satisfying Code Section
416.
10.5 Top-Heavy Plan Definition. The Plan shall be a Top-Heavy Plan for any
Plan Year if, as of the Determination Date, as defined in Subsection
9(a), the aggregate of the Accounts under the Plan for Participants
who are Key Employees, as defined in Section 10.7, exceeds sixty
percent (60%) of the present value of the aggregate of the Accounts
for all Participants, or if this Plan is required to be in an
aggregation group, as defined in Subsection (c), which for such Plan
year is a top-heavy group, as defined in Subsection (d). For purposes
of making this determination, the Accounts of a Participant (i) who is
not a Key Employee but who was a Key Employee in a prior Plan Year or
(ii) who has not performed any service for the Employer at any time
during the five (5) year period ending on the Determination Date,
shall be disregarded.
(a) "Determination Date" means for any Plan Year the last day of the
immediately preceding Plan Year.
(b) The present value shall be determined as of the most recent
Valuation Date that is within the twelve (12) month period ending
on the Determination Date, and as described in the regulations
prescribed under the Code.
<PAGE>
(c) "Aggregation group" means the group of plans, if any, that
includes both the group of plans that are required to be
aggregated and the group of plans that are permitted to be
aggregated.
(1) The group of plans that are required to be aggregated (the
"required aggregation group") includes:
(i) each plan of an Affiliated Employer, in which a Key
Employee is a participant, including collectively
bargained plans, and
(ii) each other plan of an Affiliated Employer, including
collectively bargained plans, which enables a plan in
which a Key Employee is a participant to meet the
requirements of Sections 401(a)(4) and 410 of the Code.
(2) The group of plans that are permitted to be aggregated (the
"permissive aggregation group") includes the required
aggregation group plus one (1) or more plans of an
Affiliated Employer that is not part of the required
aggregation group and that the Committee certifies as
constituting a plan within the permissive aggregation group.
Such plan or plans may be added to the permissive
aggregation group only if benefits are comparable to those
provided by the plans in the required aggregation group and,
if after the addition, the aggregation group as a whole
continues to meet the requirements of Sections 401(a)(4) and
410 of the Code.
(d) "Top-heavy group" means the aggregation group if, as of the
applicable determination date, the sum of the present value of
the cumulative accrued benefits for Key Employees under all
defined benefit plans included in the aggregation group plus the
aggregate of the accounts of Key Employees under all defined
contribution plans included in the aggregation group exceeds
sixty percent (60%) of the aggregate accrued benefits and
accounts for all Employees under such defined benefit and defined
contribution plans. If the aggregation group that is a top-heavy
group is a required aggregation group, each plan in the group
will be top-heavy. If the aggregation group that is a top-heavy
group is a permissive aggregation group, only those plans that
are part of the required aggregation group will be treated as
top-heavy. If the aggregation group is not a top-heavy group, no
plan within such group will be top-heavy.
<PAGE>
(e) In determining whether the Plan constitutes a Top-Heavy Plan, the
Committee shall make the following adjustments in connection
therewith:
(1) When more than one (1) plan is aggregated, the Committee
shall determine separately for each plan as of each plan's
determination date the present value of the accrued benefits
and account balances. The results shall then be aggregated
by adding the results of each plan as of the determination
dates for such plans that fall within the same calendar
year.
(2) In determining the present value of the cumulative accrued
benefits or the value of the account of any Employee, such
present value or account shall include the amount in dollar
value of the aggregate distributions made to such Employee
under the applicable plan during the five (5) year period
ending on the determination date, unless reflected in the
value of the accrued benefit or account balances as of the
most recent Valuation Date. Such amounts shall include
distributions to Employees which represented the entire
amount credited to their Accounts under the applicable plan,
and distributions made on account of the death of an
Employee to the extent such death benefits do not exceed the
present value of the account.
(3) Further, in making such determination, such present value or
Account shall include any Rollover Contribution, or similar
transfer, as follows:
(i) If the Rollover Contribution, or similar transfer, is
initiated by the Employee and made to or from a plan
maintained by another employer, the plan providing the
distribution shall include such distribution in the
present value or account; the plan accepting the
distribution shall not include such distribution in the
present value or Account unless the plan accepted it
before December 31, 1983.
(ii) If the Rollover Contribution, or similar transfer, is
not initiated by the Employee or made from a plan
maintained by an Affiliated Employer, the plan
accepting the distribution shall include such
distribution in the present value or account whether
the plan accepted the distribution before or after
December 31, 1983; the plan making the distribution
shall not include the distribution in the present value
or such account.
<PAGE>
10.6 Change in 415(e) Limits. In the event the Employer also maintains a
defined benefit plan that provides benefits to Participants in this
Plan, and if the Plan is a Top-Heavy Plan, the combined plan limit of
Section 415(e) of the Code shall be applied by substituting "1.0" for
"1.25" in Code Sections 415(3)(2)(B) and 415(e)(3)(b). However, this
provision does not apply if the Plan would not be a Top-Heavy Plan if
"ninety percent (90%)" were substituted for "sixty percent (60%)" in
Section 10.5 or if the Plan provides an Employer Contribution under
Section 10.3 of not less than four percent (4%) of the Participant's
Compensation, as defined for purposes of Section 415 of the Code.
10.7 Key Employee. The term "Key Employee" means any Employee, including
former Employees under the Plan, who, at any time during the Plan Year
containing the determination date or during any of the four (4)
preceding Plan Years, is or was one of the following:
(a) An officer of an Affiliated Employer, having annual Compensation
from the Affiliated Employer greater than fifty percent (50%) of
the dollar amount in effect under Code Section 415(b)(1)(A).
Whether an individual is an officer shall be determined by the
Committee on the basis of all the facts and circumstances, such
as an individual's authority, duties, and term of office, not on
the mere fact that the individual has the title of an officer.
For any such Plan Year, there shall be treated as officers no
more than the lesser of (i) fifty (50) Employees, or (ii) the
greater of three (3) Employees or ten percent (10%) of the
greatest number of Employees.
For this purpose, the highest-paid officers shall be selected.
(b) One of the ten (10) Employees having annual Compensation greater
than the dollar limitation in effect under Code Section
415(c)(1)(A) and owning (or considered as owning, within the
meaning of the constructive ownership rules of the Code) more
than one-half percent (.5%) interest in the value and the largest
percentage interests in an Affiliated Employer. An Employee who
has such an ownership interest is considered to have one (1) of
the largest interests in the Affiliated Employer unless at least
ten (10) other Employees own a greater interest than that
Employee during any year in the testing period and such other
employees have annual Compensation during such Plan Year of
ownership greater than the dollar limitation in effect under Code
Section 415(c)(1)(A) for the Plan Year. Ownership shall be
determined on the basis of percentage of ownership interest in
total ownership value and not dollar amounts.
<PAGE>
(c) Any person who owns (or is considered as owning within the
meaning of the constructive ownership rules of the Code) more
than five percent (5%) of the outstanding stock of an Affiliated
Employer or possessing more than five percent (5%) of the
combined total voting power of an Affiliated Employer.
(d) A one percent (1%) owner of the outstanding stock of an
Affiliated Employer having an annual Compensation from the
Affiliated Employer of more than one hundred fifty thousand
dollars $150,000).
For purposes of this Section 10.7, Compensation shall mean
compensation as defined in Section 414(q)(7) of the Code.
For purposes of Subsections (a), (b), (c), and (d), a Beneficiary
of a Key Employee shall be treated as a Key Employee. For
purposes of Subsections (c) and (d), each Affiliated Employer is
treated separately in determining ownership percentages, but in
determining the amount of Compensation, each Affiliated Employer
is taken into account.
10.8 Non-Key Employee. The term "Non-Key Employee" means any Employee and
any Beneficiary of an Employee who is not a Key Employee.
10.9 Collective Bargaining Rules. The provisions of Section 10.2, 10.3, and
10.4 do not apply with respect to any Employee included in a unit of
Employees covered by a collective bargaining agreement unless the
application of such Sections has been agreed on with the collective
bargaining agent.
10.10 Other Special Rules. If any individual has not performed services for
the Employer maintaining the Plan at any time during the five (5) year
period ending on the Determination Date, any accrued benefit for such
individual (and the Account of such individual) shall not be taken
into account.
<PAGE>
ARTICLE 11
MISCELLANEOUS
11.1 Limitation on Distributions
Notwithstanding any provision of this Plan regarding payment to
Beneficiaries, Members, or any other person, the Committee may
withhold payment to any person if the Committee determines that such
payment may expose the Plan to conflicting claims for payment.
As a condition for any payments, the Committee may require such
consent, representations, releases, waivers, or other information as
it deems appropriate. The Committee may, at its discretion, comply
with the terms of any judgment or other judicial decree, order,
settlement, or agreement including, but not limited to, a Qualified
Domestic Relations Order as defined in Code Section 414(p).
11.2 Limitation on Reversion of Contributions
Except as provided in subsections (a) through (c) below, Employer
contributions made under the Plan will be held for the exclusive
benefit of Members and their Beneficiaries and may not revert to the
Employer.
(a) In the case of a contribution that is made by a mistake of fact,
such contribution may be returned to the Employer within one year
after it is contributed to the Plan.
(b) In the case of a contribution conditioned upon its deductibility
under Section 404 of the Internal Revenue Code, to the extent the
deduction is disallowed, the amount disallowed may be returned to
the Employer within one year after the disallowance.
The maximum contribution that may be returned to the Employer will not
exceed the amount actually contributed to the Plan, or the value of
such contribution on the date it is returned, if less.
11.3 Voluntary Plan
The Plan is purely voluntary on the part of an Employer and neither
the establishment of the Plan nor any Plan amendment nor the creation
of any fund or account, nor the payment of any benefits, will be
construed as giving any Employee or any person legal or equitable
right against the Employer, the Funding Agent, the Trustee, or the
Committee unless specifically provided for in this Plan or conferred
by affirmative action of the Committee or the Employer according to
the terms and provisions of this Plan. Such actions will not be
construed as giving any Employee or Member the right to be retained in
the service of the Employer. All Employees and/or Members will remain
subject to discharge to the same extent as though this Plan had not
been established.
<PAGE>
11.4 Statement of Member's Account
The Committee shall as soon as practical after the end of each Plan
Year, mail to each Member a statement setting forth the account of
such Member in the respective funds as of the end of such Plan Year.
Such statement shall be deemed to have been accepted as complete
unless written notice to the contrary is received by the Committee
within 30 days after the mailing of such statement to the Member.
11.5 Notices and Communications
(a) All notices, reports, and statements given, made, delivered, or
transmitted to a Member shall be deemed duly given, made,
delivered, or transmitted when mailed, by such class as the
sender may deem appropriate, with postage prepaid and addressed
to the Member at the address last appearing on the records of the
Employer with respect to this Plan.
(b) All applications, notices, designations, elections, directions,
or other communications from a Member or Beneficiary to the
Funding Agent, Trustee, Committee, or Employer shall be in
writing on prescribed forms and shall not be deemed to have bene
duly given, made, delivered, transmitted, or received unless and
until actually received by the Funding Agent, Trustee, Committee,
or the Employer, whichever is applicable under the terms of this
Plan.
11.6 Records Conclusive
The records of the Funding Agent, Trustee, the Committee, and the
Employer shall be deemed conclusive in respect of all matters involved
in the administration of this Plan.
11.7 Nonalienation of Benefits
Members and their Beneficiaries are entitled to all the benefits
specifically set out under the terms of the Plan, but said benefits or
any of the property rights in the Plan will not be assignable or
distributable to any creditor or other claimant of such Member. A
Member will not have the right to anticipate, assign, pledge,
accelerate, or in any way dispose of or encumber any of the monies or
benefits or other property that may be payable or become payable to
such Member or his Beneficiary provided, however, the Employer,
Funding Agent, Trustee, or Committee shall recognize and comply with a
properly executed Qualified Domestic Relations Order as defined in
Code Section 414(p).
<PAGE>
11.8 Inability to Receive Benefits
If the Committee receives evidence that a person entitled to receive
any payment under the Plan is physically or mentally incompetent to
receive payment and to give a valid release, and another person or an
institution is maintaining or has custody of such person, and no
guardian, committee, or other representative of the estate of such
person has been duly appointed by a court of competent jurisdiction,
then any distribution made under the Plan may be made to such other
person or institution. the release of such other person or institution
will be a valid and complete discharge for the payment of such
distribution.
11.9 Unclaimed Benefits
If the Committee is unable, after reasonable and diligent effort, to
locate a Member or Beneficiary who is entitled to a distribution under
the Plan, the distribution due such person will be forfeited after
give years. If, however, the Member or Beneficiary later files a claim
for such benefit, it will be reinstated without any interest earned
thereon. Notification by certified or registered mail to the last
known address of the Member or Beneficiary will be deemed a reasonable
and diligent effort to locate such person.
11.10 Limitation of Rights
Nothing expressed or implied in the Plan is intended or will be
construed to confer upon or give to any person, firm, or association
other than the Employer, the Members, the Beneficiaries, and their
successors in interest any right, remedy, or claim under or by reason
of this Plan.
11.11 Payment of Expenses
All costs and expenses incurred in administering the Plan, including
the fees and expenses of the Funding Agent, Trustee, or the fees of
its counsel and other administrative expenses, including costs of
audit, shall be charged to and paid out of the Trust Fund unless paid
by the Employer.
11.12 Limitation of Liability
No director, or officer, or Employee of the Employer or any of its
subsidiaries, shall be personally liable for any act or omission to
act in connection with the operation or administration of the Plan,
except for his own willful misconduct.
11.13 Invalid Provisions
In case any provision of this Plan is held illegal or invalid for any
reason, the illegality or invalidity will not affect the remaining
parts of the Plan. The Plan will be construed and enforced as if the
illegal and invalid provisions had never been included.
<PAGE>
11.14 One Plan
This Plan may be executed in any number of counterparts, each of which
will be deemed an original and the counterparts will constitute one
and the same instrument and may be sufficiently evidenced by any one
counterpart.
11.15 Use and Form of Words
Whenever any words are used herein in the masculine gender, they will
be construed as though they were also used in the feminine gender in
all cases where they would apply, and vice versa. Whenever any words
are used herein in the singular form, they will be construed as though
they were also used in the plural form in all cases where they would
apply, and vice versa.
11.16 Headings
Headings of articles and sections are inserted solely for convenience
and reference, and constitute no part of the Plan.
11.17 Governing Law
The Plan will be governed by and construed according to the federal
laws governing employee benefit plans qualified under the Code and
according to the laws of the State of California, where such laws are
not in conflict with the federal laws.
IN WITNESS WHEREOF, Cubic Corporation has adopted this Plan effective
October 1, 1989.
CUBIC CORPORATION
By:
Title:
Date:
By:
Title:
<PAGE>
Appendix A
CUBIC CORPORATION
EMPLOYEES' PROFIT-SHARING PLAN
List of Participating Employers
Cubic Corporation
9333 Balboa Avenue
San Diego, CA 92123
Cubic Defense Systems
9333 Balboa Avenue
San Diego, CA 92123
Cubic Communications, Inc.
4285 Ponderosa Avenue
San Diego, CA 92123
Cubic Field Services
4285 Ponderosa Avenue
San Diego, CA 92123
Consolidated Converting Company
2601 Workman Mill Road
Whittier, CA 90607
Cubic Precision (Electro-Optical Division)
750 Huyler Street
Teterboro, NJ 07608
Cubic Automatic Revenue Collection Group (CARCG)
World Headquarters
5650 Kearny Mesa Road
San Diego, CA 92111
Toll Systems Division
89 Arkay Drive
Hauppauge, NY 11788
New York Revenue Automation
111 8th Avenue, Suite 700
New York, NY 10011
<PAGE>
Appendix B
CUBIC CORPORATION
EMPLOYEES' PROFIT-SHARING PLAN
Investment Funds
The following Investment Funds are provided by the Plan:
Fund 1: Money Market Account- consists of short-term debt instruments
which are essentially loans made by major corporations and the U.S.
Government.
Fund 2: Guaranteed Interest Account (GIA)- invests in high grade
public and private fixed income securities of varying maturities.
Fund 3: Long-Term Bond Index Account - comprised of long-term, high quality
bonds with a primary concentration in Treasury securities.
Fund 4: Jennison Balanced Account -a commingled account which follows a
performance-oriented dynamic approach, shifting among stocks, bonds,
and cash to maximize returns.
Fund 5 First Essex Stock Account - invests in a broad based stock portfolio
of large U.S. companies.
Fund 6: Jennison Equity Account - a commingled fund based on a growth stock
philosophy, focusing on large and medium sized companies.
!
11 September 1995
CUBIC APPLICATIONS, INC.
401(K) RETIREMENT PLAN
Amended and Restated
Effective April 8, 1994
<PAGE>
THE CUBIC APPLICATIONS, INC.
401(k) RETIREMENT PLAN
INTRODUCTION
The Cubic Applications, Inc. 401 (k) Retirement Plan (the "Plan") as described
herein is established for the benefit of Cubic Applications, Inc. employees. The
Plan was established as a continuation of the Titan Corporation 401(k)
Retirement Plan (as amended from time to time) for certain Titan Systems, Inc.
employees (affected by the sale of a portion of Titan Corporation to Cubic
Corporation) and Cubic Applications, Inc. employees.
The provisions of the Plan are subject to a determination by the Internal
Revenue Service that the Plan is qualified under Section 401 (a) of the Internal
Revenue Code of 1986, as amended. It is further intended that the Plan also
conform to the requirements of Title I of the Employee Retirement Income
Security Act of 1974, as amended from time to time.
<PAGE>
ARTICLE 1
Definitions
Whenever used herein, the following words and phrases shall have the meaning
specified below. Additional words and phrases may be defined in the text of the
Plan.
1.1 "Accounts" shall mean, with respect to any Participant, Participant's
Deferral Account, Voluntary Contributions Account, Employer
Discretionary Contribution Accounts, Employer Matching Contributions
Account, Rollover/transfer Account, and shall, as to each such
Account, include any subaccount established thereunder.
1.2 "Adjusted Factor" shall mean the cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Code Section 415(d),
as applied to the items and int he manner prescribed by the Secretary
of the Treasury.
1.3 "Average Contribution Percentage" shall mean the average (expressed as
a percentage) of the Contribution Percentages of every individual in
the Highly Compensated Employee group of the Non-highly Compensated
Employee group, as the case may be.
1.4 "Average Deferral Percentage" shall mean the average (expressed as a
percentage) of the Deferral Percentages of every individual in the
Highly Compensated Employee group or the Non-highly Compensated
Employee group as the case may be.
1.5 "Beneficiary" shall mean the person or persons, entity or entities
(including a trust(s)), or estate that shall be entitled to receive
benefits payable pursuant to the provisions of Section 2.5 by virtue
of a Participant's death.
1.6 "Board" shall mean the board of Directors of Cubic Corporation.
<PAGE>
1.7 "Break in Service" shall mean a Period of Severance of not less than
twelve (12) consecutive months in which an Employee is credited with
500 Hours of Service or less. An Employee shall not be deemed to have
incurred a one-year Break in Service if the Employee is absent from
Service because of an authorized leave of absence granted in writing
for medical, disability, vacation, education, or such other
circumstances either mandated by federal law or approved by the
Committee in a uniform and nondiscriminatory manner.
In the case of an Employee who is absent from work for any period on
or after the first day of the first Plan Year beginning after December
31, 1984, by reason of:
(a) The pregnancy of the Employee,
(b) The birth of a child of the Employee,
(c) The placement of a child with the Employee in connection with the
adoption of such child by the Employee, or
(d) The care of a child for a period beginning immediately following
such birth or placement,
the Plan shall include, solely for purposes of determining whether the
Employer has incurred a one-year Break in Service, the Hours of
Service that would normally have been credited to the Employee but for
such absence, or in any case in which the Committee is unable to
determine the Hours of Service that would normally have been credited
to the Employee, eight (8) Hours of Service per day of absence,
provided, however, that the total number of hours treated in this
manner as Hours of Service shall not exceed 501 Hours of Service. The
hours described in the preceding sentence shall be credited in the
Plan Year in which the absence from work begins if the Employee would
be prevented from incurring a one-year Break in Service in such period
solely because the period of absence is treated as Hours of Service as
described above. Otherwise, the Hours of Service shall be credited on
behalf of the Employee in the immediately following Plan Year.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.9 "Committee" shall mean the committee of individuals appointed by the
Board to be responsible for the operation and administration of the
Plan.
<PAGE>
1.10 "Compensation" shall mean all compensation paid by the Employer or
Participating Employer in cash to an Employee during the Plan Year,
and shall include Deferral Contributions described in Section 3.1 and
amounts contributed on the Participant's behalf pursuant to Code
Section 125, by reason of services performed while an Employee.
Compensation shall not include amounts paid to the Employee for any
reason other than as compensation for the performance of services,
such as expense reimbursements, any amounts designated by the Board as
amounts to be excluded from compensation for purposes of the Plan, or
any compensation paid by reason of services performed before the date
the Employee became a Participant. Notwithstanding the foregoing, for
Plan Years beginning after December 31, 1988, Compensation shall
exclude amounts in excess of two hundred thousand dollars ($200,000)
except as such limit is adjusted for cost of living in accordance with
the provisions of Code Section 401(a)(17). In determining the
Compensation of a Participant for purposes of this limitation, the
rules of Code Section 414(q)(6) shall apply, except in applying such
rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules the adjusted two hundred thousand dollars
($200,000) limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this Section prior to
the application of this limitation. Notwithstanding the above
provisions to the contrary, compensation earned but not paid in a Plan
Year may include amounts earned but not paid in a Plan Year because of
the timing of pay periods and pay days if such amounts are paid during
the first few weeks of the next following Plan Year, the amounts are
included on a uniform and consistent basis with respect to all
similarly situated Employees, and no Compensation is included in more
than one Limitation Year. If compensation for any prior Plan Year is
taken into account in determining a Participant's benefits for the
current year, the Compensation for such prior year is subject to the
applicable annual compensation limit in effect for that prior Plan
Year. If compensation for any prior Plan Year is taken into account in
determining a Participant's benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior Plan Year. For this
purpose, for years beginning before January 1, 1990, the applicable
annual compensation limit is two hundred thousand dollars ($200,000).
Notwithstanding the foregoing, effective for Plan Years commencing on
or after January 1, 1994, the applicable annual compensation limit is
one hundred and fifty thousand dollars ($150,000), as indexed for cost
of living in accordance with Code Section 401(a)(17).
<PAGE>
1.11 "Contribution Percentage" shall mean the ratio of the Employer
Matching Contributions under Section 3.4 made to the Plan on behalf of
the Participant for the Plan Year to the Participant's Compensation,
including Deferral Contributions, as defined in Code Section 414(s)
for such Plan Year.
1.12 "Deferral Contributions" shall mean contributions paid to the Trustee
by the Participating Employer at the election of a Participant in lieu
of cash Compensation pursuant to Section 3.1.
1.13 "Early Retirement Age" shall mean the date on which the Participant
has attained age fifty- five (55) and completed at least five Years of
Service.
1.14 "Effective Date" shall mean April 8, 1994.
1.15 "Eligible Employee" shall mean every employee other than:
(a) A leased Employee (within the meaning of Code Section 414(n)(2));
(b) A nonresident alien with no U.S. source earned income; or
(c) A person whose employment is covered by a collective bargaining
agreement to which the Employer or a Related Employer is a party
if retirement benefits were (or are presumed to have been) the
subject of good faith bargaining between the Employer (or Related
Employer) and the collective bargaining representative, unless
the collective bargaining agreement provides for coverage under
this Plan.
(d) The Employee of a Related Employer which is not a Participating
Employer.
(e) An Employee of a group, division, or other classification
designated by the Board as ineligible to participate in the Plan.
1.16 "Employee" shall mean an individual employed by the Employer or a
Related Employer, any portion of whose income is subject to
withholding of income tax and/or for whom Social Security
contributions are made by the Employer or a Related Employer, as well
as any other individual qualifying as a common-law employee of the
Employer or a Related Employer. For purposes of determining the number
or identity of Highly Compensated Employees and for purposes of the
requirements of Code Section 414(n)(3), "Employee" includes "leased
employees" as defined in Code Section 414(n)(2). If, however, such
leased employees constitute less than twenty percent (20%) of the
Employer's non-highly compensated work force within the meaning of
Code Section 414(n)(5)(C)(ii), "Employee" shall not include those
leased employees covered by a plan described in Code Section
414(n)(5).
<PAGE>
1.17 "Employer" shall mean Cubic Applications, Inc., and any other
Affiliated Employer that, with the consent of the Board, shall adopt
this Plan for some or all of its Eligible Employees. "Employer" when
used in this Plan shall refer to such adopting entities either
individually or collectively, as the context may require.
1.18 "Employer Matching Contribution" shall mean Employer contributions
made pursuant to Section 3.4 of the Plan.
1.19 "Employment Commencement Date" shall mean the date on which an
Employee is first credited with an Hour of Service.
1.20 "Entry Date" shall mean the first day of the payroll period coincident
with or immediately following January 1 and July 1 in every calendar
year during which the Plan is in effect, or such date as is
administratively feasible thereafter.
1.21 "ERISA" shall mean the Employee Retirement Income Security Act of 1974
(Public Law Section 93-406), as amended from time to time.
1.22 "Excess Aggregate Deferrals" shall mean with respect to any Plan Year,
the excess of the aggregate amount of Employer Matching Contributions
under Section 3.4 made for Highly Compensated Employees for such Plan
Year, over the maximum amount of such Contributions permitted under
the limitations of Code Section 401(m)(2)(A).
1.23 "Excess Compensation" shall mean all of a Participant's Compensation
as defined in Section 1.10 for a particular calendar year in excess of
the maximum amount of Compensation that may be considered as "wages"
under Code Section 3121(a) for that particular calendar year. In
determining whether any portion of an Employee's Compensation
constitutes Excess Compensation, amounts paid to an Employee while he
was not a Participant in this Plan shall not be taken into account.
<PAGE>
1.24 "Excess Contributions" shall mean with respect to a Plan Year, an
amount by which the sum of a Participant's Deferral Contributions
(prior to the return of any such contributions as provided for in
Section 3.2) exceed the maximum amount of such contributions permitted
under the limitations of Code Section 401(k)(3).
1.25 "Excess Deferrals" shall mean the amount by which contributions made
for a Participant under any qualified cash or deferred arrangements
described in Code Section 401(k), 408(k), or 403(b) for a taxable year
exceed the limitation set forth in Section 3.1(e) and that are
includable in the Participant's gross income under Code Section
492(g), which is incorporated herein by this reference.
1.26 "Family Member" shall mean an individual described in Code Section
414(q)(6)(B), except when determining whether Compensation paid to
Family Members exceeds two hundred thousand dollars ($200,000), as
indexed under Code Section 401(a)(17), the term "Family Member" shall
include only the Spouse of the Eligible Employee and any lineal
descendants who have not attained age 19 before the close of the Plan
Year. For Plan Years on or after January 1, 1994, Compensation paid to
Family Members shall be determined by using the one-hundred-and-fifty
thousand dollar ($150,000) rule, as indexed for cost of living in
accordance with Code Section 401(a)(17).
1.27 "Highly Compensated Employee" shall mean an Employee who performs
service during the Determination Year and is described in one or more
of the following categories in accordance with IRS regulations.
(a) An Employee who is a five percent (5%) owner, as defined in Code
Section 416(i)(1)(iii), at any time during the Determination Year
or the Look-back Year.
<PAGE>
(b) An Employee who receives Compensation in excess of $75,000 during
the Look- back Year. (The $75,000 limitation will be adjusted
annually for increases in the cost of living in accordance with
Code Section 415(d).)
(c) An Employee who receives Compensation in excess of $50,000 during
the Look- back Year and is a member of the top-paid group for the
Look-back Year. (The $50,000 limitation will be adjusted annually
for increases in the cost of living in accordance with Code
Section 415(d).)
(d) An Employee who is an officer within the meaning of Code Section
416(i) during the Look-back Year and who receives Compensation in
the Look-back Year greater than fifty percent (50%) of the dollar
limitation in effect under Code Section 415(b)(1)(A), for the
calendar year in which the Look-back Year begins. Notwithstanding
the foregoing, nor more than 50 or, if lesser, the greater of
three (3) Employees or ten percent (10%) of the Employees shall
be treated as officers; however, if no officer is described in
this subparagraph (d), then the highest-paid officer for such
year shall be treated as herein described.
(e) An Employee who is (i) described in paragraph (b), (c) or (d)
above, and (ii) one of the 100 Employees who receives the most
Compensation from the Employer during the Determination Year,
when the Determination Year is substituted for the Look-back Year
in paragraph (b), (c), or (d).
A former Employee shall be treated as a Highly Compensated Employee is
such former Employee had a separation year prior to the Determination
Year and was a Highly Compensated active Employee for either (i) such
Employee's separation year or (ii) any Determination Year ending on or
after the Employee's 55th birthday.
A separation year is the Determination Year in which the Employee
separates from service. Notwithstanding the foregoing, an Employee who
separated from service before January 1, 1987 is a Highly Compensated
Employee only if he was a five percent (5%) owner or received
Compensation in excess of $50,000 during (i) the Employee's separation
year (or the year preceding such separation year), or (ii) any year
ending on or after such Employee's 55th birthday (or the last year
ending before such Employee's 55th birthday). Notwithstanding anything
to the contrary in this Plan, Code Sections 414(b), (c), (m), (n) and
(o) are applied before determining whether an Employee is Highly
Compensated.
<PAGE>
For purposes of this section:
(a) "Compensation" shall mean compensation as defined in Code Section
414(q)(7) and the regulations thereunder.
(b) "Determination Year" shall mean the Plan Year for which the
determination of who is Highly Compensated is being made.
(c) "Look-back Year" shall mean the 12-month period preceding the
Determination Year.
(d) "Top-paid Group" shall mean the top twenty percent (20%) of
Employees when rated on the basis of Compensation paid during the
year. The number of Employees in the group will be determined in
accordance with Code Section 414(q)98).
The Employer shall have the right to elect to determine Highly
Compensated Employees by reference to calendar year Compensation, in
accordance with IRS regulations. If the Employer so elects, the
Employer must make such election with respect to all other qualified
plans it maintains.
1.28 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer or a Related
Employer. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer or a Related Employer, for a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty, or authorized leave of absence. No more than five
hundred and one (501) Hours of Service shall be credited under
this paragraph for any single continuous period (whether or not
such period occurs in a single computation period). Hours under
this paragraph shall be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor regulations, which
are incorporated herein by reference.
<PAGE>
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or a
Related Employer. An Hour of Service credited under subsection
(a) or (b) above will not be credited under this subsection (c).
These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement, or
payment is made.
(d) An Employee of the Employer or other Participating Employer who
is designated and authorized and placed on Leave of Absence under
a Federal mandate or specific assignment by the Employer shall be
credited with one thousand (1,000) Hours of Service of its
fractional equivalent for any Plan Year during which the Employee
is an authorized and designated to be on a Leave of Absence.
(e) For the purpose of applying subsections (b) and (c) above, the
following rules apply:
(i) In the event that the payment by the Employer or other
Participating Employer is calculated on the basis of units
of time, such as hours, days, weeks, or months, the number
of hours to be credited shall be the number of regularly
scheduled working hours included in the units of time on the
basis of which the payment is calculated. For purposes of
the preceding sentence, in the case where an Employee has no
regular work schedule, the calculation of the number of
hours to be credited shall be made on the basis of an eight
(8)-hour workday.
<PAGE>
(ii) In the event that the payment by the Employer or other
Participating Employer is not calculated on the basis of
units of time, the number of hours to be credited shall be
equal to the amount of the payment divided by the Employee's
most recent hourly rate of compensation (as determined
herein) before the period during which no duties were
performed.
(iii)For purposes of this subsection (e), an Employee's hourly
rate of compensation shall be determined as follows:
(A) In the case of an Employee whose compensation is
determined on the basis of an hourly rate, such hourly
rate shall be the Employee's most recent hourly rate of
compensation.
(B) In the case of an Employee whose compensation is
determined on the basis of a fixed rate for specified
periods of time (other than hours) such as days, weeks,
or months, the Employee's most recent rate of
compensation for a specified period of time (other than
an hour), divided by the number of hours regularly
scheduled for the performance of duties during such
period of time. For purposes of the preceding sentence,
in the case of an Employee without a regular work
schedule, the calculation of the Employee's hourly rate
of compensation shall be made on the basis of an eight
(8)-hour workday.
(f) Solely for the purpose of determining whether a Break in Service
has occurred, an Employee who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of
Service that would otherwise have been credited but for such
absence, to a maximum of five hundred and one (501) Hours of
Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence due to:
(i) the pregnancy of the Employee;
<PAGE>
(ii) the birth of a child of the Employee;
(iii)the placement of a child with the Employee in connection
with the adoption of such child by the Employee; or
(iv) the caring for of a child for a period beginning immediately
after birth or placement.
The Hours of Service credited under subsection (f) shall be
credited either in the Plan Year in which the absence begins, if
the crediting is necessary to prevent a Break in Service during
that period, or, in all other cases, in the following Plan Year.
1.29 "Inactive Participant" shall mean a Participant whose employment with
the Employer or Participating Employer has continued but whose
participation has been suspended (i) as a result of making a
withdrawal pursuant to Section 6.1 hereof, (ii) who has suspended his
Deferral Contributions pursuant to Section 3.1 hereof, or (iii) who is
no longer an Eligible Employee.
1.30 "Investment Funds" shall mean the investment funds, as determined by
the Plan Administrator, that are made available for the investment of
account balances under the terms of the Plan and the procedures
established by the Plan Administrator.
1.31 "Leased Employee" shall mean any person who renders professional
services to an Affiliated Employer and who is described in Code
Section 414(n)(2) by reason of providing such services, other than a
person described in Code Section 414(n)(5). Contributions or benefits
provided a Leased Employee by the leasing organization that are
attributable to services performed for the Affiliated Employer shall
be treated as provided by the Affiliated Employer. A Leased Employee
shall not be considered an Employee of the Affiliated Employer if
Leased Employees do not constitute more than 20 percent of the
Affiliated Employer's non-highly compensated workforce.
1.32 "Limitation Year" shall mean the 12-month period ending each December
31. All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12-consecutive-month period, the new Limitation Year must begin on a
date within the Limitation Year in which the amendment is made.
<PAGE>
1.33 "Non-highly Compensated Employee" shall mean an Eligible Employee
other than a Highly Compensated Employee.
1.34 "Normal Retirement Date" shall mean the later of the Participant's
sixty-fifth (65th) birthday and completion of five Years of Service.
1.35 "Participant" shall mean an Eligible Employee who meets the
requirements for participation under Section 3.3 or an Employee or
former Employee for whom an Account and/or an Employer Account is
maintained.
1.36 "Participating Employer" shall mean Cubic Application, Inc. and any
Related Employer which has adopted and is participating in the Plan in
accordance with the provisions of Section 2.4 hereof.
1.37 "Period of Severance" shall mean a continuous period of time during
which an individual is not employed by the Employer or a Related
Employer. Such period shall begin on the date the Employee retires,
quits, resigns, or is discharged or, if earlier, the twelve (12)-
month anniversary on which the Employee is otherwise first absent.
1.38 "Permanently and Totally Disabled" shall mean the mental or physical
inability of the Participant to perform his normal job as evidenced by
the certificate of a medical examiner satisfactory to the Plan
Administrator certifying such inability and certifying that such
condition is likely to be permanent.
1.39 "Plan" shall mean the Cubic Applications, Inc. 401(k) Retirement Plan,
as embodied herein, and any amendments thereto.
1.40 "Plan Administration" shall mean the individual appointed by the Board
of Directors or its designated agent to act on behalf of the Plan.
<PAGE>
1.41 "Plan Committee" shall mean the committee of individuals appointed by
the Board to be responsible for the operation and administration of
the Plan.
1.42 "Plan Sponsor" shall mean Cubic Corporation.
1.43 "Plan Year" shall mean the period beginning on April 8, 1994 and
ending December 31, 1994, and each January 1 through December 31
thereafter.
1.44 "Predecessor Employer" shall mean, with respect to an Employee, an
organization or unit previously under the control of the Employer, if
the Employee was previously employed under it.
1.45 "Predecessor to this Plan" shall mean any plan for which this Plan is
a restatement, any plan that has been merged into this Plan or any
Predecessor to this Plan, or any other plan sponsored by an entity
that became an Affiliated Employer by acquisition or merger, and that
adopted this Plan or a Predecessor to this Plan for any of its
employees who had been participants in such other plan.
1.46 "Prior Profit Sharing Plan" means the plans formally referred to as
the Titan Systems, Inc. Profit Sharing Plan, as amended from time to
time and/or the Titan Corporation Savings and Investment Plan
effective April 1, 1986, as amended from time to time.
1.47 "Related Employer" shall mean (a) any corporation that is included in
a controlled group of corporations, within the meaning of Code Section
414(b), that includes the Employer; (b) any trade or business that is
under common control with the Employer within the meaning of Code
Section 414(c); (c) any member of an affiliated service group, within
the meaning of Code Section 414(m), that includes the Employer; (d)
any entity required to be included under Code Section 414(o).
1.48 "Qualified Nonelective Contributions" shall mean the additional
contributions that an Employer may make to the Plan pursuant to
Article 6 to satisfy the nondiscrimination requirements on pretax
and/or Employer Matching Contributions.
<PAGE>
1.49 "Service" shall mean, the period(s) commencing with the Employee's
first day of employment or reemployment with the Employer or Related
Employer and ending on the date(s) a Break in Service begins. Service
also shall include any Period of Severance of less than twelve (12)
consecutive months and any period(s) of employment with a Related
Employer. Fractional periods of a year shall be expressed in terms of
days. Service shall not include any Break in Service. Service shall
include any periods an Employee was on leave of absence to pursue an
advanced degree as a Titan Fellow, assuming the Employee returns to
employment with the Employer or a Related Employer following such
leave of absence.
1.50 "Spouse" shall mean the person to whom the Participant is legally
married on the date the Participant receives the Participant's benefit
payment from the Plan, or the Participant's date of death, if earlier.
1.51 "Trustee" shall mean the bank, trust company, insurance company, or
individual(s) designated by the Board to hold and invest the Trust
Fund and to pay benefits and expenses as authorized by the Plan
Administrator in accordance with the terms and provisions of the
agreement by and between the Employer and such bank, trust company,
insurance company, or individual(s).
1.52 "Trust Agreement" shall mean the trust agreement for the Cubic
Applications, Inc. 401(k) Retirement Plan as set forth in such Trust
Agreement and as such agreement is amended from time to time.
1.53 "Trust Fund" shall mean the fund established pursuant to the terms of
the Trust Agreement, which fund may be composed of one or more
Investment Funds.
1.54 "Valuation Date" shall mean the date as of which the Trustee shall
determine the value of the assets in the Trust Fund and the value of
each Account, which shall be the last day of each Plan Year and such
other dates as may be established by rules set by the Plan
Administrator, which rules may set different dates for valuing the
assets of the various investment funds comprising the Trust Fund.
<PAGE>
1.55 "Voluntary Contributions" shall mean voluntary after-tax contributions
made by Participants to the Prior Profit Sharing Plan, before July 1,
1988.
1.56 "Vesting Service" shall mean Service as counted for determining a
Participant's right to vest in his/her Employer Account under Article
7, as determined under the rules of Article 2.
1.57 "Year(s) of Vesting Service" shall mean (a) with respect to each
person who is an Employee on December 31, 1990, years of Service that
would be credited to such Employee under the terms of the Plan in
effect on December 31, 1989, and (b) with respect to each person who
became an Employee on or after January 1, 1991, each period of Service
of three hundred and sixty five (365) days.
<PAGE>
ARTICLE 2
Participation
2.1 Eligibility and Election to Participate.
(a) Each Participant in the Prior Plan on April 7,1 994, who
continues as an Eligible Employee shall continue as a Participant
on April 8, 1994 in this Plan.
(b) Each Eligible Employee who was not a Participant on April 7,
1994, is eligible to make Deferral Contributions and to receive
Employer Matching Contributions and Employer Discretionary
Contributions beginning on any Entry Date on or after the later
of:
(i) the six (6) month anniversary of the date of hire; or
(ii) attainment of age twenty-one (21), provided such Employee is
an Eligible Employee on such Entry Date.
2.2 Reemployment. If a Participant whose employment has terminated is
subsequently reemployed as an Eligible Employee, he shall be eligible
to participate in the Plan as of his date of reemployment.
If an Employee who is not a Participant terminates his employment with
the Employer or Participating Employer and is reemployed as an
Eligible Employee, he shall be eligible to become a Participant in the
Plan pursuant to the provisions of Section 2.1. Previous employment
with the Employer or any Related Employer shall be included in the
determination of eligibility for participation.
2.3 Employment After Normal Retirement Date. A Participant who continues
in the employ of the Employer or Participating Employer after his
Normal Retirement Date shall continue to be a Participant for all
purposes of the Plan.
<PAGE>
2.4 Adoption of Plan by Related Employer. Any Related Employer may adopt
this Plan by proper action of its board of directors provided that the
Board has approved such participation. The administrative powers and
control of the Board, as provided in the Plan, shall not be deemed
diminished by reason of the participation of any other Participating
Employers; and such administrative powers and control specifically is
granted herein to the Board with respect to the appointment of the
Plan Administrator, amendment of the Plan, and other matters that
shall apply only with respect to the Board.
Each Participating Employer shall have the obligation to pay the
contributions for its own Employees and no other Participating
Employer shall have such obligation. Any failure by a Participating
Employer to live up to its obligation under the Plan shall have no
effect on any other Participating Employer.
Any Participating Employer may terminate its participation without
affecting the other Participating Employers in the Plan by furnishing
written notice to the Plan Administrator and the Trustee of its
determination to withdraw. The Board may, in its absolute discretion,
terminate any Participating Employer's participation at any time. The
procedures for implementing such termination of participation and
disposition of assets attributable to Employees of such Participating
Employer shall be determined by the Board.
2.5 Designation of Beneficiary.
(a) Beneficiary Designation Forms. Each Employee shall be provided
with a Beneficiary Designation Form when he becomes a Participant
and upon request.
(b) Consent to Beneficiary Designation. A married Participant will be
deemed to have designated Participant's spouse as the sole
primary Beneficiary unless the spouse consents on a form provided
by the Plan Administrator to the naming of another or additional
Beneficiary. The consent must acknowledge that the impact of the
effect of the designation is to waive the spouse's right to
receive benefits under the Plan and the consent must be witnessed
by a Plan representative or a notary public. Such consent is
valid only with respect to a specific alternate Beneficiary.
<PAGE>
(c) Revocation of Beneficiary Designation. A Participant may revoke a
Beneficiary designation at any time. Such revocation also revokes
the spouse's consent. If a new Beneficiary is to be named who is
not the Participant's spouse and the Participant is married at
the time, then the Participant must obtain Participant spouse's
consent to the new designation. Otherwise the Participant shall
be deemed to have designated the spouse as sole primary
Beneficiary. Any change in a Participant's legal marital status
automatically revokes a Participant's Beneficiary designation,
and the Participant may then file a new Beneficiary designation.
(d) No Valid Designation on File. If at any time a Participant does
not have a valid Beneficiary designation on file with the Plan,
the Participant's Beneficiary shall be (i) the Participant's
spouse if the Participant is married on the date of death and
survived by a spouse, or (ii) the Participant's estate if the
Participant is unmarried on the date of death.
(e) Reliance. The Plan Administrator is authorized to rely on the
designation last filed and on any other information in its
possession in determining a Participant's Beneficiary under this
Section 2.5. All such determinations shall be binding and final
upon all parties. The Participating Employer, the Trustee, and
the Plan shall bear no liability to any party for payment to a
person who the Plan Administrator has determined in good faith is
the proper Beneficiary entitled to the amounts paid.
<PAGE>
ARTICLE 3
Contributions
3.1 Participants' Deferral Contributions.
(a) Upon enrollment or re-enrollment in the Plan, each Participant
may elect to defer from one percent to ten percent, in a fixed
whole percentage, of his Compensation as Deferral Contributions.
The Participating Employer will make contributions to the Plan of
the amount deferred, to be credited to the Participant's Deferral
Account.
(b) Change in Percentage or Suspension of Deferral Contributions. A
Participant's Deferral Contribution percentage will remain in
effect, notwithstanding any change in the Participant's
Compensation, until the Participant elects to change such
percentage or until the Plan Administrator reduces such
percentage in accordance with subsection 3.1(c). A Participant
may elect to change the Participant's Deferral Contribution
percentage effective any January 1 or July 1, provided such
election is delivered to the Plan Administrator no less than
fifteen (15) days before the effective date of such change or
such other notice period as the Plan Administrator may specify.
A Participant may suspend the Participant's Deferral Contributions at
any time. Such suspension will be effective as soon as
administratively possible following receipt of an election form from
the Participant. A Participant who suspends all Deferral Contributions
shall be referred to as an Inactive Participant and shall be
ineligible to resume making Deferral Contributions until the first pay
date following the first day of any month that is at least six (6)
months after the effective date of such suspension.
(c) The Plan Administrator may reduce the percentage of Deferral
Contributions of any Participant at any time if the Plan
Administrator determines that such a reduction is necessary to
ensure that the limitations described in Sections 3.1(e) and 3.2
are satisfied.
<PAGE>
(d) Status of Deferral Contributions. Deferral Contributions under
this Section shall be made by payroll deductions authorized by
the Participant and shall be contributed to the Plan by the
Participating Employer. Deferral Contributions are intended to
qualify as elective contributions under Code Section 401(k).
(e) Calendar Year Limitation. Notwithstanding the provisions of
Subsections (a) and (b) above, the Deferral Contributions made by
any Participant for any calendar year shall not exceed seven
thousand dollars ($7,000), multiplied by the Adjusted Factor. If,
during a calendar year, an Employee participates in this Plan and
one or more other plans with a cash or deferred arrangement
described in Code Sections 401(k), 408(k)(6), or 403(b), and any
portion of the Deferral Contributions contributed on the
Participant's behalf under this Plan and contributions under such
other plan of plans for such year constitute Excess Deferrals,
the Plan Administrator shall not direct the Trustee to distribute
such Excess Deferrals to the Participant as permitted by Code
Section 402(g)(2)(i) even though the Participant provides written
notice to the Plan Administrator of the existence of Excess
Deferrals by March 1 following the close of the calendar year to
which the excess relates. Instead, Excess Deferrals shall be
retained in the Trust in the same manner as such Employee's
Deferral Contributions that do not constitute Excess Deferrals.
In no event shall Employer Matching Contributions pursuant to
Section 3.4 be made with respect to Excess Deferrals.
3.2 Limitation on Participant Deferrals.
(a) The Plan Administrator shall return Excess Contributions (which
shall be determined after determining Excess Deferrals) to Highly
Compensated Employees in accordance with Section 3.2(b) as
necessary to satisfy the deferral percentage test of either
subsection (a)(i) or (a)(ii) below:
(i) the Average Deferral Percentage of Participants who are
Highly Compensated Employees is not more than the Average
Deferral Percentage for all other Participants multiplied by
one and twenty-five hundredths (1.25); or
<PAGE>
(ii) the Average Deferral Percentage of participates who are
Highly Compensated Employees is not more than (A) two
hundred percent (200%) of the Average Deferral Percentage of
all other Participants and (B) the Average Deferral
Percentage of all other Participants plus two (2) percentage
points.
(b) Excess Contributions shall be distributed to the appropriate
Highly Compensated Employees within two and one-half (2-1/2)
months, but in no event later than twelve (12) months after the
close of the Plan Year to which they related. Excess
Contributions shall be treated as Annual Additions under Section
4.4 of the Plan:
(i) If the Plan terminates during a Plan Year in which there are
Excess Contributions, such distributions shall be made after
the date of the termination of the Plan and as soon as
administratively feasible, but in no event later than the
twelve (12) month period following the date of such
termination. The income allocable to Excess Contributions
shall be determined under the applicable regulations;
(ii) Distributions of Excess Contributions and income thereon
shall be made on the basis of the amount of the Excess
Contributions attributable to each Highly Compensated
Employee. Excess Contributions shall be distributed from the
Participant's Deferral Account. No distributions of Excess
Contributions and income thereon shall be made to any Highly
Compensated Employee as long as any other Highly Compensated
Employee has a higher Deferral Percentage;
(iii)Any decrease in the amount of Employer Deferral
Contributions of a Participant or any distribution of Excess
Contributions under this Subsection (b) shall also be
effective for purposes of determining the amount of Employer
Matching Contributions to be made on behalf of the
Participant under Section 3.4 below.
<PAGE>
(c) Special Rules.
(i) The Deferral Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who is eligible
to have Deferral Contributions allocated on Participant's
behalf under two or more plans or arrangements described in
Code Section 401(k) that are maintained by the Employer or a
Related Employer shall be determined by treating all such
cash or deferred arrangements as one arrangement. If a
Highly Compensated Employee participates in two or more cash
or deferred arrangements that have different plan years,
this Subsection (c)(i) shall be applied by treating all cash
or deferred arrangements ending with or within the same
calendar year as a single arrangement.
(ii) If the Plan satisfied the requirements of Code Sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of those Code Sections only if aggregated with
the Plan, the Average Deferral Percentages of the Employees
shall be determined as if all such plans are a single plan.
Only plans with the same Plan Year may be aggregated in
order to satisfy Code Section 401(k).
(iii)If an Employee eligible to participate in the Plan is
subject to the family aggregation rules of Code Section
414(q)(6) because such Employee is a five-percent owner or
one of the ten (10) most Highly paid Highly Compensated
Employees, the combined Deferral Percentage for the family
group (which shall be treated as one Highly Compensated
Employee) shall be the greater of:
(A) The Deferral Percentage determined on an aggregated
basis for all eligible Family Members who are Highly
Compensated Employees without regard to family
aggregation; and
(B) The Deferral Percentage determined for all eligible
Family Members individually.
<PAGE>
(iv) The Deferral Contributions and Compensation of all family
members shall be disregarded for purposes of determining the
Average Deferral Percentage for the Non-Highly Compensated
Employee group except to the extent needed to take into
account subsection (c)(ii) above.
(v) If an Employee is required to be aggregated as a member of
more than one family group, all Employees eligible to
participate in the Plan who are members of those family
groups that include such Employees shall be aggregated as
one family group in accordance with subsections (c)(iii) and
(iv) above.
(vi) If any Highly Compensated Employee is eligible to
participate in a cash or deferred arrangement subject to
Code Section 401(k) in addition to a plan subject to Code
Section 401(m) maintained by the Employer or a Related
Employer, the disparities between the Average Deferral
Percentages of the Highly Compensated Employee group and the
Non-Highly Compensated Employee group shall be reduced as
prescribed in Treasury Regulation Section 1.401(m)-2 as that
regulation, or a regulation of similar import, may be
amended, including the new aggregate limit provided [in]
Code Section 401(m).
(vii)The Employer, in its sole discretion, may divide Employees
into separate or component groups or otherwise restructure
this Plan in applying the tests set forth in Section 3.2, as
permitted pursuant to applicable regulations under Code
Sections 401(a)(4) and 401(k).
(d) Timing. Each Participating Employer shall pay to the Trustee in
cash the Deferral Contributions withheld from a Participant's
Compensation as soon as is practical, and in any event no later
than ninety (90) days from the date on which such amounts
otherwise would be payable to the Participant in cash.
3.3 Participant Voluntary Contributions. On and after July 1, 1988, a
Participant is no longer permitted to make Voluntary Contributions
under the Plan. Voluntary Contributions previously made to the Plan
shall continue to be held by the Trustee in the Participant's
Voluntary Contributions Account.
<PAGE>
3.4 Employer Matching Contributions.
(a) Each Participating Employer shall contribute no less frequently
than annually an amount that equals the sum of the amounts to be
allocated to the Employer Matching Contributions Account of each
of its Participants under Section 3.4(b).
(b) An amount shall be allocated no less frequently than annually to
the Employer Matching Contributions Account of Each Participant
who made Deferral Contributions in such period. Except as may be
modified pursuant to Section 3.4(d), the amount shall equal one
hundred percent (100%) of the portion of the Participant's
Deferral Contributions for such period that do not exceed five
percent (5%) of the Participant's Compensation.
(c) Notwithstanding subsection (b) above, Employer Matching
Contributions shall be modified as provided in subsection (d) or
distributed in accordance with subsection (e) so that the
requirements of either subsections (c)(i) or (c)(ii) are
satisfied:
(i) The Average Contribution Percentage of Participants who are
Highly Compensated Employees is no greater than the Average
Contribution Percentage for all other Participants
multiplied by one and twenty-five hundredths (1.25);
(ii) The Average Contribution Percentage of Participates who are
Highly Compensated Employees is no greater than:
(A) Two hundred percent (200%) of the Average Contribution
Percentage of all other Participants; and
(B) The Average Contribution Percentage of all other
Participants plus two (2) percentage points.
<PAGE>
(d) To the extent that the Average Contribution Percentage fails or
might fail to meet the requirements of subsection (c) above, the
Plan Administrator shall take such steps, consistent with Code
Section 401(m)(6) and Section 3.4(c) above, as may be required to
meet such requirements.
(e) In the event that there are Excess Aggregate Contributions, such
amounts shall be distributed to the appropriate Highly
Compensated Employees within two and one- half (2-1/2) months
after the close of the Plan Year to which such contributions
relate to the extent practicable, but in no event later than the
close of the twelve (12) month period following the date of such
termination. The income allocable to Excess Aggregate
Contributions shall be determined under the applicable
regulations.
Distributions of Excess Aggregate Contributions and income
thereon shall be made the basis of the amount of Excess Aggregate
Contributions attributable to each Highly Compensated Employee.
Excess Aggregate Contributions shall be distributed from the
Participant's Employer Matching Contributions Account. No
distribution shall be made of Excess Aggregate Contributions to
any Highly Compensated Employee as long as any other Highly
Compensated Employee has a higher Contribution Percentage.
(f) No benefit other than Employer Matching Contributions shall be
granted on condition (directly or indirectly) of an Employee's
election to make or not to make Deferral Contributions under the
Plan. However, the preceding sentence shall not apply to any
benefit that is provided at the Employee's election under a plan
described in Code Section 125 in lieu of an elective contribution
to a qualified cash or deferred arrangement.
(g) Special Rules:
(i) The Contribution Percentage of a Highly Compensated Employee
who is eligible to participate in two or more plans
maintained by the Employer or a Related Employer to which
Employer Matching Contributions or Voluntary Contributions
are made shall be aggregated for purposes of determining
such Employee's Contribution Percentage.
<PAGE>
(ii) If this Plan satisfies the requirements of Code Section
401(b), 401(s)(4), or 410(b) only if aggregated with one or
more other plans or if one or more other plans satisfy the
requirements of Code Section 410(b) only if aggregated with
this Plan, then this Section 3.4 shall be applied by
determining the Contribution Percentages of Participants as
if all such plans were a single plan. For plan years
beginning on and after July 1, 1990, plans may be aggregated
only if they have the same plan year.
(iii)If a Highly Compensated Employee who is eligible to
participate in the Plan is subject to the family aggregation
rules of Code Section 414(q)(6) because such Employee is
either a five-percent owner or one of the ten (10) most
Highly Compensated Employees, the combined Contribution
Percentage for the family group (which shall be treated as
one Highly Compensated Employee) shall be the greater of:
(A) the Contribution Percentage determined by combining the
Voluntary Contributions, Compensation, and Employer
Matching Contributions of all eligible family members
who are highly compensated without regard to family
aggregation; and
(B) the Contribution Percentage determined by combining the
Voluntary Employer Contributions, Compensation, and
amounts treated as Matching Contributions of all
eligible family members.
(iv) The Employee Contributions, Compensation, and amounts
treated as Employer Matching Contributions of all family
members shall be disregarded for purposes of determining the
Contribution Percentage for the Highly Compensated Employee
group and the Non-highly Compensated Employee group except
to the extent needed to take into account Section
3.4(g)(iii) above.
<PAGE>
(v) If an Employee is required to be aggregated as a member of
more than one family group, all Employees eligible to
participate in the Plan who are members of those family
groups that include the Employee shall be aggregated as one
family group in accordance with subsections (g)(iii) and
(g)(iv) above.
3.5 Employer Discretionary Contributions
(a) A Participating Employer may, at the sole discretion of its board
of directors and with the approval of the Board, contribute an
amount with respect to any Plan Year (which shall be referred to
as the "Employer Discretionary Contribution). The Employer
Discretionary Contribution hereunder shall be made to the Trust
Fund by not later than the date, including extensions, prescribed
by law for filing such Employer's federal income tax return for
the Plan Year. Such amount shall be allocated to the Employer
Discretionary Contributions Account of each Participant under
Section 3.5(b).
(b) Each Participant who is employed on the last day of the Plan Year
by the Participating Employer making an Employer Discretionary
Contribution, shall be eligible to receive a contribution
allocated to his Employer Discretionary Contributions Account, to
be allocated in the following manner, effective for plan years
commencing on or after January 1, 1989:
(i) First, each Participating Employer's Discretionary
Contribution shall be allocated, pro rata, according to each
such eligible Participant's Allocable Compensation since
becoming a Participant for the Plan Year involved up to a
percentage of Allocable Compensation (as defined in Section
3.5(b)(iii) below) equal to the greater of (A) the rate of
tax applicable on the first day of such Plan Year under Code
Section 3111(a) that is attributable to old age insurance;
or (B) five and seven-tenths percent (5.7%).
(ii) Next, if after the allocation in subparagraph (i) above, any
portion of a Participating Employer's Employer Discretionary
Contribution remains unallocated, such portion shall be
allocated to eligible Participants, pro rata, according to
their Compensation for the Plan Year.
<PAGE>
(iii)For purposes of this Section 3.5, "Allocable Compensation"
means the sum of Compensation and Excess Compensation for
each eligible Participant.
3.6 Transferred Contributions/Rollover Contributions
(a) The Plan Administrator may, at any time, authorize the Trustee to
accept a direct transfer of funds from any qualified Plan
maintained by a Related Employer to this Plan. The Plan
Administrator has previously authorized the Trustee to accept a
direct transfer of funds from the Prior Profit Sharing Plan to
this Plan and has established separate Prior Profit Sharing Plan
Accounts to hold the contribution and income thereon. The Plan
Administrator also has established a separate method of tracking
such Accounts.
(b) In addition, with the approval of the Plan Administrator an
Employee may contribute to the Plan all or a portion of the
amount due him from another plan qualified under Code Section
401(a) or from a tax-exempt individual retirement account that
consists solely of money or property transferred from a plan
qualified under Code Section 401(a), and any earnings on that
money or property (a "rollover" contribution). No rollover
contribution may be made to the Plan of money or property that
represents assets from a plan for self-employed individuals or an
individual retirement account that contains assets other than
those transferred to it from a plan qualified under Code Section
401(a).
3.7 Limitation of Liability. Each Employer contribution shall be i
complete discharge of the financial obligations of the Participating
Employer under the Plan with respect to the period for which it is
made.
<PAGE>
ARTICLE 4
Participant's Accounts: Allocations
4.1 Participant's Accounts. The Plan Administrator shall maintain Accounts
as follows for each Participant for each Investment Fund in which he
participates:
(a) A Deferral Account to record:
(i) The Participant's Deferral Contributions, minus any
withdrawals;
(ii) The Participant's contributions, if any, transferred
directly to this Plan, representing the Participant's
Deferral Account under The Titan 401(k) Retirement Plan,
minus any withdrawals; and
(iii)The Participant's contributions, if any, transferred
directly to this Plan, representing the Participant's Salary
Deferral Contributions and earnings accumulated under the
Spectron Development Laboratories, Inc. Cash or Deferred
Savings Plan, minus any withdrawals;
(iv) The Participant's contributions, if any, transferred
directly to this Plan, representing his Deferral Account
under The Titan Corporation Savings and Investment Plan,
minus any withdrawals; and
(v) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the assets
allocated to the Deferral Account.
(b) A Voluntary Contributions Account to record:
(i) Any amounts transferred to this Plan from The Titan 401(k)
Retirement Plan, minus any withdrawals; and
<PAGE>
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the assets
allocated to the Voluntary Contributions Account.
(c) An Employer Matching Contributions Account to record:
(i) The Participant's share of the Employer Matching
Contributions made on and after April 8, 1994, pursuant to
Section 3.4;
(ii) The Participant's contributions, if any, transferred
directly to this Plan, representing his Employer Matching
Contributions Account and Company Account under Prior Plan;
and
(iii)The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Employer Matching Contributions Account.
(d) An Employer Discretionary Contributions Account to record:
(i) The Participant's share of the Employer Discretionary
Contributions made pursuant to Section 3.5; and
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Employer Discretionary Contributions Account.
(e) A Rollover/Transfer Account to record:
(i) The amount transferred in this Plan as a transferred or
rollover contribution on behalf of a Participant pursuant to
Section 3.6; and
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Rollover/Transfer Account.
<PAGE>
The Plan Administrator may consolidate Accounts as may be
administratively desirable and to the extent that separate
accounting is no longer required.
4.2 Allocation of Employer Matching Contributions. Employer Matching
Contributions made under Section 3.4 shall be allocated to each
eligible Participant's Employer Matching Contributions Account within
thirty (30) days following their contribution to the Trust. Employer
Discretionary Contributions, if any, made under Section 3.5 shall be
allocated to each eligible Participant's Employer Discretionary
Contributions Account no later than the due date for the Employer's
tax return for the fiscal year ending with or within the Plan Year to
which such contributions relate.
4.3 Valuation of Accounts.
(a) Within sixty (60) days after each Valuation Date, within sixty
(60) days after the removal or resignation of the Trustee, and at
such other times as determined by the Plan Administrator, the
Trustee shall value the assets of the Trust on the basis of fair
market values. If the assets cannot be valued within the sixty
(60) day period specified in the preceding sentence, the assets
shall be valued as soon thereafter as is practicable.
(b) As soon as is reasonably possible after receipt of these
valuations from the Trustee, the Plan Administrator shall value
the Accounts of each Participant as of the applicable Valuation
Date so as to reflect the current fair market value of each
Account as of such Valuation Date. The valuation provisions of
this Section 4.3 shall be applied and implemented in accordance
with the following rules:
(i) If separate subaccounts have been established for separate
investment alternatives, each subaccount shall be valued
separately and the total value of a Participant's Account(s)
shall equal the total value of his interest in each of the
respective subaccounts in which his Account(s) have been
invested;
(ii) The fair market value of any guaranteed interest contract,
trust or fund holding such a contract, or similar program
entered into between an insurance company and the Plan shall
be determined on the basis of the principal amount of such
contract or program, plus the amount of the guaranteed
interest or other increase in value that is paid or credited
to the Plan pursuant to such contract or program;
<PAGE>
(iii)To the extent that a Participant's Account is invested in a
regulated investment company offered as an investment
alternative under the Trust, the value of that portion of
the Account shall be valued pursuant to rules prescribed by
the Plan Administrator on the basis of the unit or share
value of the regulated investment company on the applicable
Valuation Date; and
(iv) Administrative expenses charged to the Trust Fund, if any,
pursuant to Section 10.7 shall be offset against forfeitures
occurring during the Plan Year effective January 1, 1991. If
such forfeitures are not sufficient to pay for such
expenses, they may be charged to the Trust Fund pursuant to
Section 10.7, in which case the excess amount shall be
apportioned to each Participant's Accounts in proportion to
the value thereof as of the current or most recent Valuation
Date.
(c) The Participating Employers and Trustee do not in any manner or
to any extent whatsoever warrant, guarantee, or represent that
the value of a Participant's Accounts shall at any time equal or
exceed the amount previously contributed or allocated thereto, or
that any valuation or accounting method or practice will continue
to be applied.
(d) Accounting Procedures. The Plan Administrator shall establish
accounting procedures for the purpose of making the allocations,
valuations, and adjustments to Accounts provided for under this
Plan, as well as the implementation of Investment direction by
Participants and transfers between or distributions from
subaccounts. From time to time the Plan Administrator may modify
such accounting procedures for the purpose of achieving
equitable, nondiscriminatory, and administratively feasible
allocations among the Accounts in accordance with the general
concepts of the Plan and the provisions of this Section 4.3.
<PAGE>
A Participant or Beneficiary shall have no contractual or other
right to have a particular accounting procedure or convention
apply, or continue to apply, and the Plan Administrator shall be
free to alter any such procedure or convention without obligation
to any Participant or Beneficiary, consistent with the
requirements of code Section 411(d)(6).
(e) Inactive Participation. The Accounts of each Inactive Participant
shall be held intact and shall be valued on each Valuation Date
as provided in this Section 4.3, but shall not receive any
allocation of contributions except to the extent specifically
provided for herein.
(f) Accounting for Interest of an Alternate Payee. In the event an
alternate payee under a qualified domestic relations order is
awarded an interest in the Plan benefits of a Participant
pursuant to a qualified domestic relations order, such interest
shall be separated into one or more separate Accounts and
accounted for under rules prescribed by the Plan Administrator,
pending distribution to the alternate payee. Any limitation,
restriction, or rule applicable to the Account(s) of a
Participant shall apply to the Account(s) of the alternate payee,
as appropriate.
4.4 Limitation on Annual Additions.
(a) Maximum Annual Additions. The Annual Additions of a Participant,
as defined in Code Section 415(c)(2), shall not exceed the
maximum permissible amount specified in Code Section 415(c)(1).
(b) Effect of Participation in Other Employer Plans.
(i) If a Participant in this Plan also is a Participant in
another defined contribution plan maintained by the Employer
or a Related Employer, the aggregate Annual Additions of the
Participant under this Plan and such other plan(s) shall not
exceed the maximum permissible amount specified in Code
Section 415(c)(1). The Plan Administrator shall prescribe
such rules as may be necessary or appropriate with respect
to applying this limit to the respective plans involved so
as to ensure that the aggregate limit on Annual Additions is
not exceeded.
<PAGE>
(ii) If a Participant in this Plan also is a Participant in a
defined benefit plan maintained by the Employer or a Related
Employer, the sum of the Defined Contribution Plan Fraction
(as defined in Code Section 415(e)(3)) and the Defined
Benefit Plan Fraction (as defined in Code Section 415(e)(2))
shall not exceed one (1.0). The Participant's benefit under
such defined benefit plan shall be reduced, as necessary to
satisfy the requirement of the preceding sentence.
(c) Incorporation by Reference of Code Section 415. To ensure
compliance with Code Section 415, the Plan hereby incorporates
said section by reference as though it were set out as part of
this Plan. In applying Section 415 to this Plan, the Plan shall
include each grandfather or transition rule provided by such
section or any law amending such section, in order to allow the
largest benefit otherwise payable hereunder, or under other plans
maintained by the Employer or Related Employer, to be paid.
(d) No Contractual Right to Excess Contributions. If, in order to
comply with the limitations of this Section 4.4, it becomes
necessary to reduce a Participant's Account(s), to reduce or
reallocate amounts previously allocated to such Accounts, or
otherwise, such actions(s) may be taken by the Plan Administrator
and Trustee free of any contractual obligation to the Participant
(or Beneficiary) affected based on prior Account balances or
allocations.
4.5 Limitations on Reversion of Contributions. Except as provided in
subsections (a) and (b) below, contributions made under the Plan shall
be held for the exclusive benefit of Participants and their
Beneficiaries and may not revert to a Participating Employer.
(a) In the case of a contribution which is made by the Employer or a
Participating Employer by a mistake of fact, such contribution
shall be returned to the Participating Employer within one (1)
year after it is contributed to the Plan.
<PAGE>
(b) In the case of a contribution conditioned upon its deductibility
under Code Section 404, to the extent the deduction is
disallowed, the amount disallowed shall be returned to the
Participating Employer within one (1) year after the
disallowance. Unless otherwise specified by the Participating
Employer in writing at the time a contribution is made, each
contribution made to this Plan shall be deemed proper on
condition of its deductibility.
4.6 Family Aggregation Rules. The family aggregation rules of Code Section
414(q)(6) shall apply to any Eligible Employee who is Highly
Compensated and a five (5) percent (5%) owner or one of the ten (10)
most Highly Compensated Employees. The average deferral percentage of
the family members, who are treated as one Eligible Employee who is
Highly Compensated, shall be the Average Deferral Percentage
determined by combining the pretax contributions and Compensation of
all eligible family member.
<PAGE>
ARTICLE 5
Investment of Contributions
5.1 Investment Funds. All contributions to the Plan shall be invested as
provided in this Section 5.1. The Plan Administrator may establish a
choice of investment alternatives that each Participant may select
from in determining the manner in which his Account(s) will be
invested. The Plan Administrator shall prescribe procedures for
investment of amounts allocated an Account of an alternative payee.
(a) If such investment alternatives are established, each Participant
may elect to invest the assets of his Accounts in such
alternatives at such time, in such manner, and subject to such
restrictions as the Plan Administrator shall specify.
(b) Separate funds within the Trust Fund shall be established to
reflect the available alternatives, and separate subaccounts
shall be established for each investment alternative selected by
a Participant, and each such subaccount shall be valued
separately.
(c) The Plan Administrator, in its discretion, may permit
Participants to transfer amounts from one investment alternative
to one or more other investment alternatives. An election to
transfer such amounts shall be made only at such time, in such
manner, and subject to such restrictions as the Plan
Administrator may specify. The Plan Administrator may provide
that future contributions may be invested in a different
investment alternative than amounts already accumulated in the
Participant's Account(s).
(d) The Plan Administrator shall prescribe rules relating to the
investment of the assets in the Accounts of a Participant who
fails to make an effective election (as set forth by the Plan
Administrator), for any reason whatsoever, as to how all or a
portion of his Accounts shall be invested.
<PAGE>
(e) The Plan Administrator shall provide notice by arranging for
reports to be sent to Participants regarding the investment of
their funds pursuant to their investment elections. Failure of a
Participant to notify the Plan Administrator regarding
implementation of his investment election within thirty (30) days
following such notice shall be deemed to be an election to have
the Accounts invested in the manner shown on such report, even if
the manner of investment is different from that specified in the
Participant's election form or investment instructions. If a
Participant has not received a notice confirming his investment
election (or change therein) and does not notify the Plan
Administrator or its designated delegate within thirty (30) days
of the date such election (or change) was to be effective, the
Participant shall be deemed to have elected to have the Accounts
invested in the manner in which they are in fact invested, even
if that method differs from the Participant's election form or
investment instructions.
(f) The Plan Administrator shall have the option, in its sole
discretion, to revise the procedures or alter the investment
alternatives set forth in this Section 5.1.
<PAGE>
ARTICLE 6
Withdrawals and Loans
6.1 Financial Hardship/Post Age 59-1/2 Withdrawals. Upon thirty (30) days'
written notice to the Plan Administrator and subject to the Plan
Administrator's approval, a Participant may withdraw up to the value
of his Deferral Account as soon as administratively feasible following
the Participant's withdrawal request to the extent necessary to meet a
financial hardship provided, however, that the financial hardship
shall not be required as a condition for a withdrawal after the
Participant has attained age fifty-nine and one half (59-1/2).
A withdrawal request will be presumed to be on account of financial
hardship if the distribution is necessary in light f immediate and
heavy financial needs of the Participant. The amount approved
hereunder may not exceed the amount required to meet the immediate
financial need created by the hardship, and not be reasonably
available from other resources of the Participant. The Plan
Administrator's determination of the existence of financial hardship
and the amount required to meet the need created by the hardship shall
be based on the following causes:
(a) Medical expenses described in Code Section 213(d) incurred by the
Participant, the Participant's Spouse, or any dependents of the
Participant or necessary to incur such medical care;
(b) Purchase (excluding mortgage payments) of a principal residence
for the Participant;
(c) Payment of tuition and related educational fees for twelve (12)
months of post- secondary education for the Participant, the
Participant's Spouse, children, or dependents;
(d) Payment of amounts necessary to prevent eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
<PAGE>
(e) Other causes recognized as hardships justifying withdrawals
pursuant to applicable Treasury regulations.
A distribution shall be determined by the Plan Administrator to be
necessary to satisfy an immediate and heavy financial need of a
Participant if all of the following requirements are satisfied:
(a) Prior to the hardship distribution, the Participant has obtained
all non-hardship distributions and all non-taxable loans
currently available under all plans maintained by the
Participating Employer;
(b) All Deferral Contributions under this Plan and all elective
salary reduction contributions under other qualified retirement
plans maintained by the Participating Employer shall be suspended
for a twelve (12) month period following the effective date of
the hardship distribution; and
(c) The Participant's Deferral Contributions for the Participant's
taxable year immediately following the taxable year of the
hardship withdrawal (and elective salary reduction contributions
under all other qualified plans maintained by the Participating
Employer) shall be limited to:
(i) The applicable limit under Code Section 402(g) for such
following taxable year, minus
(ii) The amount of such Participant's Deferral Contributions or
other elective salary reduction contributions for the
taxable year in which the hardship withdrawal occurred.
The amount of any approved hardship withdrawal under this Section 6.1
shall not exceed the lesser of:
(i) The balance in the Participant's Deferral Account as of the
coincident or preceding Valuation Date, or
<PAGE>
(ii) The aggregate Deferral Contributions made by the Participant
as of the coincident or preceding Valuation Date, plus the
total income, if any, allocated to the Participant's
Deferral Account as of December 31, 1988.
6.2 Withdrawal of Voluntary Contributions. Upon thirty (30) days' written
notice to the Plan Administrator, a Participant may withdraw up to one
hundred percent (100%) of the balance in his Voluntary Contributions
Account as soon as administratively feasible following the withdrawal
request. A Participant shall be permitted to make such a withdrawal at
any time and for any reason.
The amount of the withdrawal shall be taken from such contacts in the
following order:
(a) Pre-1987 Voluntary Contributions;
(b) Post-1986 Voluntary Contributions and pro rata post-1986
earnings; and
(c) Pre-1987 earnings on Voluntary Contributions.
A Participant who makes withdrawals from his Voluntary Contributions
Account may resume making Voluntary Contributions on the first day of
any month thereafter, provided he is eligible to make such
contributions, by filing an election with the Plan Administrator no
less than thirty (30) days before the resumption is to be effective.
6.3 Amount and Payment of Withdrawals. All withdrawals under this
Article VI shall be effective as soon as administratively possible
following the date the Plan Administrator receives a withdrawal
request from the Participant. The amount of such withdrawal shall be
taken from the Participant's Account(s) at such time and paid to the
Participant in a single sum.
6.4 Loans to Participants. The Plan Administrator may authorize a loan
from the Trust Fund to Participants (including, for this purpose,
Inactive Participants) pursuant to rules prescribed by the Plan
Administrator. These rules shall be designed to ensure that these
Participant loans satisfy the requirements of Code Sections 4975(d)(1)
and 72(p), and any other provision of law that is, or may become,
applicable. These rules shall provide that:
<PAGE>
(a) The loans are available to all Participants on a reasonably
equivalent basis;
(b) The loans are not made available to Highly Compensated Employees
in amounts greater than the amounts made available for other
Employees. For this purpose, the rules prescribed by the Plan
Administrator may restrict the amount of the loan to a percentage
of the Participant's Account balance or use different percentages
depending upon the amount of the loan, provided the percentages
are applicable to all Participants;
(c) The loans bear a reasonable rate of interest commensurate with
the prevailing interest rate charged by persons in the business
of lending money for loans that would be made under similar
circumstances;
(d) The loans are adequately secured. For this purpose, the amount of
the security must be at least equal to the amount of the loan.
The rules to be prescribed by the Plan Administrator may permit a
Participant to use some or all of his interest under the Plan as
security for the loan;
(e) If the loan, or a loan from another qualified retirement plan
maintained by the Employer or a Related Employer, is to be
secured by some or all of the Participant's Accounts under the
Plan, the Participant and his spouse, if any, must consent to the
loan and the possible reduction in the Accounts in the event of a
set- off of the loan against the Account balances as a result of
nonpayment of the loan. Such consent must be given in writing
within a ninety (90) day period before the Plan Administrator
makes the loan. In the event the Participant defaults on the loan
and the Participant's Accounts are security for the loan, the
Account balances will not be used to satisfy the loan obligation
before the earlier of the Participant's termination of employment
with the Participating Employer or an event resulting in a
permissible distribution of his Accounts under the Plan. In the
event of default, the Participating Employer shall offset the
amount owed by the Participant against any amounts owed by the
Participating Employer to the Participant;
<PAGE>
(f) The loan must state the date on which the loan must be repaid,
which may not exceed five (5) years, and the loan must be
repayable in substantially level payments, with payments not less
frequently than quarterly;
(g) In connection with the making of any loan to a Participant
pursuant to the provisions of this Section 6.4, the Participant
receiving such a loan may be required to execute such documents
as may be required by the Committee and/or Trustee;
(h) The amount of the loan may not exceed the lesser of:
(i) $50,000 (reduced by the excess of the highest outstanding
balance of loans from the Plan during the one-year period
ending on the date preceding the date on which such loan is
made); or
(ii) One-half of the present value of the Participant's vested
interest in his Accounts.
The decision as to whether or not any Participant loans shall be made
under this Section 6.4 shall be made at the sole discretion of the
Plan Administrator, and the Participant shall not have a contractual
right to obtain a loan hereunder.
(i) In the event the Participant dies before distribution of his
Distributable Benefit, the amount payable to the Participant's
Beneficiary or spouse, as applicable, shall be reduced by the
amount of the security interest in the Participant's vested
interest held by the Plan by reason of a loan outstanding to such
Participant.
(j) If any loan to a Participant is unpaid on the date that the
Participant's Beneficiary becomes entitled to a distribution from
the Trust Fund, such loan shall on such date become due and
payable, and the amount thereof, together with any unpaid
interest thereon, shall be deducted form the amount of the
distribution to which he or his Beneficiary is entitled. If such
nonforfeitable interest is not sufficient to repay the balance
due, the borrower if living, or the Participant's estate if
deceased, shall be personally liable thereof.
<PAGE>
(k) Payment of a Participant's loan shall be made from, and shall be
considered an investment of, the Participant's Accounts. Interest
payments made by a Participant shall be credited to such Accounts
and shall be reinvested at the direction of the Participant, in
the manner prescribed for current contributions to the Trust
Fund.
6.5 Eligible Rollover Distributions.
(a) This section 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
section, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement
plan specified by the distributee 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 distributee, 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 Code Section
401(a)(9); and the portion of any distribution that is not
includable 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 Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section
401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving Souse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
<PAGE>
(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 Code
Section 414(p), 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.
<PAGE>
ARTICLE 7
Retirement, Disability and Death Benefits
7.1 Retirement Benefits. The retirement benefit payable under the Plan in
the case of a Participant whose employment with a Participating
Employer is terminated on or after his Early Retirement Date or the
Participant's Normal Retirement Date shall be one-hundred percent
(100%) of the Participant's Accounts. The Participant's Accounts will
be valued on the valuation date or dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
7.2 Disability Benefits. The disability benefit payable under the Plan in
the case of a Participant whose employment with a Participating
Employer is terminated because he is Permanently and Totally Disabled
shall be one-hundred percent (100%) of his Accounts. His Accounts will
be valued on the Valuation Date or Dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
7.3 Death Benefits. The death benefit payable to a Beneficiary under the
Plan in the case of a Participant whose employment with a
Participating Employer is terminated due to the Participant's Accounts
will be valued on the Valuation Date or Dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
<PAGE>
ARTICLE 8
Termination Benefits and Vesting Requirements
8.1 Benefits Upon Termination of Employment. The benefit payable under the
Plan un the case of a Participant whose employment is terminated for
any reason other than Permanent and Total Disability, death, or
retirement on or after attainment of his Early or Normal Retirement
Date shall be equal to the vested portion of the value of his
Accounts. His Accounts shall be valued on the Valuation Date
coincident with or immediately preceding the date of distribution.
8.2 Vesting Requirements.
(a) Participant shall be one-hundred percent (100%) vested at all
times in amounts held in the Participant's Voluntary
Contributions Account and Deferral Account.
(b) Participant for whom Accounts were transferred on the Effective
Date of this Plan shall be one-hundred percent (100%) vested in
all transferred Accounts as of that date.
(c) For Contributions made after the Effective date, the vested
percentage of the value of a Participant's Employer Discretionary
Contributions Account and Employer Matching Contributions Account
shall be based on the number of Participant's Years of Vesting
Service as of the date of the Participant's termination of
employment, as follows:
Years of Vesting Service Vested Percentage
Less than 2 years 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more years 100%
<PAGE>
In no event will the vested percentage of a Participant's Accounts be
less than the vested percentage of the Participant's account under The
Titan Corporation 401(k) Retirement Plan, which was transferred to
this Plan as of April 8. 1994.
(d) With respect to a Participant who terminates employment without
being one- hundred percent (100%) vested in his Employer Matching
Contributions Account and Employer Discretionary Contributions
Account and who is reemployed after incurring five (5) one-year
Breaks in Service, the Participant's Years of Service subsequent
to his Breaks in Service will not increase the vested percentage
of the amount in such Account(s).
8.3 Forfeitures.
(a) The nonvested portion of a Participant's Employer Matching
Contributions Account will be forfeited as of the earlier of
(i) the date of distribution to him of the vested portion of his
Employer Matching Contributions Account (the date of termination
of employment if he has no vested interest), or (ii) the date on
which he has five (5) consecutive Breaks in Service. Any such
forfeitures will be applied first to pay administrative expenses
pursuant to Section 4.3(b)(iv), second to restore forfeitures of
reemployed Participants as described in Section 8.3(c), and third
as allocations on behalf of each Participant eligible to receive
an Employer Matching Contribution for the Plan Year in which such
Break in Service occurs and who is employed as of the last day of
the Plan Year. Such forfeitures shall be allocated in the ratio
that such Participant's Employer Matching Contribution bears to
the total Employer Matching Contribution of all Participants
eligible to share therein for such Plan Year.
(b) The nonvested portion of a Participant's employer Discretionary
Contributions Account will be forfeited as of the earlier of
(i) the date of distribution to him of the vested portion of his
Employer Discretionary Contributions Account (the date of
termination of employment if he has no vested interest), or
(ii) the date on which he has five (5) consecutive Breaks in
Service. Any such forfeitures will be applied first to pay
administrative expenses pursuant to Section 4.3(b)(iv), second to
restore forfeitures of reemployed Participants as described in
Section 8.3(c), and third as allocations on behalf of each
Participant eligible to receive an Employer Discretionary
Contribution for the Plan Year in which such Break in Service
occurs and who has a currently established Employer Discretionary
Contributions Account and is employed as of the last day of the
Plan Year. Such forfeitures shall be allocated in the ratio that
such eligible Participant's Compensation bears to the total
Compensation of all Participants eligible to share therein for
such Plan Year.
<PAGE>
(c) If the Participant is reemployed by the Employer or a Related
Employer prior to his incurring his fifth consecutive Break in
Service or on (or before) the Anniversary Date of the Plan Year
in which his fifth consecutive Break in Service occurs, the
Participant shall be entitled to have the entire portion of his
Account (including the nonvested portion) reinstated by repaying
the total amount distributed to him. Such reinstatement shall be
made from current forfeitures or, if necessary, from Employer
Discretionary Contributions and shall not be treated as an Annual
Addition. However, this repayment must be made prior to the
earlier of (i) five (5) years following the date of reemployment
or (ii) five (5) consecutive Breaks in Service after the
distribution of the vested interest in his Account following such
termination of employment, provided he is an Eligible Employee
during that period. If such repayment is not made, then the
previously forfeited amounts shall not be restored to the
Participant's Account.
(d) In the case of a repayment made pursuant to the rules of Section
8.3(c) above:
(i) The Participant shall not be required to pay any interest
charge on the amounts repaid by him, and
(ii) The nonvested portion of his Account (which was not
distributed to him) shall not be adjusted for gains or
losses during the period between the forfeiture and the
repayment of the distributed amount.
<PAGE>
(e) In the case of a Participant with no Vested Interest in his
Account who is reemployed prior to incurring five (5) consecutive
Breaks in Service, his entire nonvested Account (unadjusted for
gains or losses during the period between the date of his
forfeiture and the date of his reemployment) shall be reinstated
upon his reemployment, without regard to the repayment
requirement of subsection (c) above.
(f) In no event shall a Participant who has received a distribution
that includes the balance in his Voluntary Account,
Transfer/Rollover Account, or any other fully vested Account be
entitled either to repay the Plan or to have the balance in such
Account(s) reinstated upon reemployment by the Employer or a
Related Employer. However, if the previous distribution otherwise
qualifies for a Rollover Contribution, the Participant may make a
Rollover Contribution upon reemployment.
<PAGE>
ARTICLE 9
Distribution of Benefits
9.1 Retirement. Amounts distributable pursuant to Section 7.1 will be
distributed at the Participant's election in one of the following
forms, subject to Section 9.4, provided the distributable amount
exceeds in value (or exceeded in value at the time of any prior
distribution from the Plan) three-thousand-five-hundred dollars
($3,500):
(a) A single lump sum payment in cash, Employer stock, or both,
provided that Employer stock distributions are limited to the
portion of the Participant's distributable Account balance as of
April 8, 1994 and provided further that fractional shares are
distributed in cash.
(b) Substantially equal monthly, quarterly, semiannual, or annual
installments in cash. The installments will be paid over a period
certain not to exceed the Participant's life expectancy or the
Participant's and his spouse's life expectancy. Unpaid
installments under this option shall be invested in the
Investment Funds selected by the Participant or as directed by
the Plan Administrator and share in the gains, losses, expenses,
and other adjustments pursuant to Section 4.3. If the Participant
dies before all remaining installments have been paid, the
remaining balance of his Account(s) amounts will be paid in a
single sum to the Participant's Beneficiary.
In the event the distributable benefit does not exceed three-thousand
five-hundred dollars ($3,500) (and did not exceed three-thousand
five-hundred dollars ($3,500) at the time of any prior distribution),
the amount will be distributed as a cash lump sum.
9.2 Death and Other Terminations. Amounts distributable pursuant to
Sections 7.2, 7.3, and 8.1 will be distributed to the Participant or
the Participant's Beneficiary, subject to Section 9.4, in cash or
stock or both, provided that Employer stock distributions are limited
to the portion of the Participant's distributable Account balance
before April 8, 1994 and provided further that fractional shares are
distributed in cash. Notwithstanding the foregoing, if the
distributable amount does not exceed three-thousand five-hundred
dollars ($3,500) (either at the time of distribution or at the time of
any prior distribution) the amount will be distributed in cash.
<PAGE>
9.3 Timing of Distributions.
(a) Distributions under the Plan pursuant to Articles VII and VIII
will begin as soon as possible following the Valuation Date
applying to such distribution. Notwithstanding the previous
sentence and the provisions of Articles VII and VIII, if a
Participant's employment terminates for any reason and the value
of the vested portion of his Accounts exceeds three-thousand
five-hundred dollars ($3,500) (at the time of termination of
employment or at the time of any prior distribution), the
Participant must consent to the receipt of the distribution if
the Participant has not attained age sixty-five (65). If the
Participant does not consent to such distribution, the
distribution shall be made as a cash lump sum as soon as
practicable following attainment of age sixty-five (65) based on
the value of his Accounts on the Valuation Date coinciding with
or immediately preceding the date of distribution.
(b) Unless the Participant elects otherwise, as permitted under the
Plan, distributions under the Plan shall in no event begin later
than sixty (60) days following the end of the Plan Year in which
the Participant attains age sixty-five (65), reaches the fifth
(5th) anniversary of the date the Participant commenced
participation, or terminates employment, whichever is latest.
9.4 Minimum Required Distributions. Notwithstanding any provision in the
Plan to the contrary, all distributions under the Plan shall be made
in accordance with the requirements of Code Section 401(a)(9) and the
regulations thereunder, including the incidental death benefit
requirement of IRS Proposed Regulations Section 1.401(a)(9)-2. The
provisions in this section override any distribution options under the
Plan if inconsistent with the requirements of Code Section 401(a)(9).
<PAGE>
(a) Pre-Death Distributions. Distributions to a Participant shall
commence no later than the April 1 of the calendar year following
the calendar year in which a Participant attains age seventy and
one-half (70-1/2). However, if a Participant attained age 70-1/2
before January 1, 1988, distributions to such Participant shall
commence no later than the April 1 following the calendar year in
which such Participant retires. Distributions shall be made in
one of the forms specified under Section 11.1. In no event shall
distributions be made for a period longer than the life
expectancy of the Participant or joint life expectancy of the
Participant and his Spouse, determined as of April 1 of the
calendar year in which the Participant attains age 70-1/2 or
retires, whichever the case may be.
(b) Post-Death Distributions. In the event of the death of a
Participant, any payments due following the death of the
Participant shall be made in accordance with Article 10. In the
case of a Participant who had begun to receive distributions
under Section 11.3(a), distributions shall be made after such
Participant's death at least as often as those made before his
death. In the case of all other Participants, in no event shall
distributions be made later than the end of the calendar year
that marks the fifth anniversary of the date of the Participant's
death.
<PAGE>
ARTICLE 10
Plan Administrator
10.1 Plan Administrator. The Plan Administrator shall administer the Plan
on behalf of the Participating Employers. The Plan Administrator may
delegate to a Committee, consisting of at least three (3) members, any
of its powers and duties with respect to operation of this Plan. If a
Committee is appointed, and a vacancy occurs on the Committee that
results from death, resignation or otherwise, the Plan Administrator
may appoint a new Committee member. A Committee member may be removed
at any time at the discretion of the Plan Administrator.
10.2 Powers and Duties.
(a) The Plan Administrator shall have full power to administer the
Plan and to construe and apply all of its provisions on behalf of
the Employer and each Participating Employer. It is the intent of
all Participating Employers in adopting this Plan to confer on
the Plan Administrator the maximum discretion permitted by law in
interpreting and administering this Plan. The Employer shall be
the Named Fiduciary within the meaning of Section 402(a) of ERISA
for purposes of Plan administration. The Plan Administrator may
delegate to any other person or organizations any of its powers
and duties with respect to the operation of this Plan. The Plan
Administrator's powers and duties, unless properly delegated,
shall include, but shall not be limited to:
(i) Deciding questions relating to eligibility, continuity of
service, and amount of benefits
(ii) Resolving disputes that may arise with regard to the rights
of employees, Participants and their legal representatives,
or Beneficiaries under the terms of the Plan. Such decisions
by the Plan Administrator shall be deemed final in each case
<PAGE>
(iii)Obtaining such information from each Participating Employer
with respect to its employees as shall be necessary to
determine the rights and benefits of such employees under
the Plan. The Plan Administrator may rely conclusively upon
such information furnished by such Employer
(iv) Compiling and maintaining all records necessary for the Plan
(v) Furnishing the Participating Employer, upon request, such
reports with respect to the administration of the Plan as
are reasonable and appropriate
(vi) Authorizing the Trustee to make payment of all benefits as
they become payable under the Plan
(vii)Engaging such legal, administrative, actuarial, investment,
accounting, consulting, and other professional services as
the Plan Administrator deems proper
(viii) Adopting rules and regulations for the administration of
the Plan not inconsistent with the Plan
(ix) Performing other such actions as may be provided for in
other parts of this Plan.
(b) The Plan Administrator shall determine whether domestic relations
orders represent "qualified domestic relations orders" as that
term is defined in Code Section 414(p) or a successor provision.
If the Plan Administrator determines the order is a qualified
domestic relations order, it shall direct the manner and time of
distribution pursuant to the order. Prior to such determination,
the Plan Administrator shall promptly notify the Participant
affected with respect to the order and any payee under the order
of the receipt of the order. The Plan Administrator shall send
such notice to the address set forth in the order, or if the
address are not set forth therein, to the last known address.
Such notice shall state that the Plan Administrator is in the
process of determining whether the order is a qualified domestic
relations order, and such notice also shall permit a reasonable
period under the circumstances for comment with respect to such
determination. During such period the Plan Administrator shall
cause the amounts otherwise payable under the order to be
segregated in a separate account. After the determination is
made, the Plan Administrator shall notify the Participant and any
payee under the order of such determination. Any payee may
designate a representative for receipt of copies of notices sent
to the payee with respect to the order.
<PAGE>
10.3 Actions by the Committee. The Committee may act at a meeting, or in
writing without a meeting, by the vote or assent of a majority of its
members. One member shall be appointed Chairman, who shall preside at
meetings, may call such meetings, and may allocate duties among other
members. The Chairman shall appoint one of its members to act as
Secretary to record all actions taken by it. The Chairman shall have
authority to designate in writing one or more of its members as the
person(s) authorized to execute papers and perform other ministerial
duties on behalf of the members of the Committee.
10.4 Interested Members. The member of the Committee, if any, shall
participate in any action of the Committee on a matter in which such
member has a specialized individual interest as a Participant in the
Plan. Such matters shall be determined by a majority of the remainder
of the members of the Committee.
10.5 Indemnification. The Employer shall and does by the following terms
indemnify and hold the members of the Committee, if any, and the Plan
Administrator and each of them,harmless from the effects and
consequences of their acts, omissions, and conduct in their official
capacities, except to the extent that the effects and consequences
thereof shall result from their own willful misconduct, breach of good
faith, or gross negligence in the performance of their duties. The
Employer shall have the right, but not the obligation, to conduct the
defense of such members in any proceeding to which this Section
applies. The foregoing right of indemnification shall not be exclusive
of other rights to which each such member may be entitled as a matter
of law or by other indemnity coverage provided by the emr.
The Employer's obligations under this Section may be satisfied through
purchase of a policy or policies of insurance providing equivalent
protection.
<PAGE>
10.6 Conclusiveness of Action. Any action on matters within the discretion
of the Plan Administrator shall be conclusive, final, and binding upon
all Participants of the Plan and upon all persons claiming any rights
hereunder, including Beneficiaries and alternate payees.
10.7 Payment of Expenses. The members of the Committee, if any, and the
Plan Administrator shall serve without compensation for services as
such. However, the Trust Fund shall reimburse such members for all
necessary and proper expenses incurred in carrying out their duties
under the Plan. The compensation or fees of accountants, counsel, and
other specialists and any other costs of administering the Plan or
Trust may be charged to the Trust and, at the discretion of the
Employer, such costs may be reimbursed by the Employer. Such fees and
costs may, at the discretion of the Employer, be paid directly by the
Employer. Costs and expenses applicable to particular investment
funds, Accounts or transactions (e.g., loan fees, brokerage expenses,
responses to tender or proxy matters) may, at the discretion of the
Plan Administrator, be charged to the particular fund(s), Account(s),
or transaction(s) involved.
10.8 Claims Procedure. The Plan Administrator shall give written notice to
any Participant or Beneficiary of the denial of a claim for the
commencement or continuation of benefits under the Plan. Such notice
shall be delivered to the claimant or sent to the claimant's last
known address and shall include a specific reference or references to
pertinent Plan provisions upon which the denial is based, a
description of any additional material or information required for the
claimant to perfect his claim, which description shall indicate why
such material or information is needed, and an explanation of the
Plan's claims review procedure.
In the event that the claimant wishes to appeal his claim's denial, he
or his duly authorized representative shall file a written request
with the Plan Administrator for a review. Such request must be made
within sixty (60) days of the receipt by the claimant of the notice of
his claim denial. The claimant or his representative may review
pertinent documents relating to the claim and its denial and may
submit issues and comments in writing to the Plan Administrator. The
Plan Administrator shall hear such appeal and shall make a decision on
the merits of the claim within sixty (60) days of receipt of a request
for review or, if circumstances require an extension of time for
processing, then as soon as practicable but not later than
one-hundred-and-twenty (120) days after receipt of a request for
review. The decision on review shall be in writing and shall include
specific reasons therefore and specific references to the pertinent
Plan provisions on which the decision is based.
<PAGE>
ARTICLE 11
Plan Amendment
11.1 Amendment. The Plan Sponsor reserves the right to amend this Plan and
Trust at any time to any extent and in any manner it may deem
necessary or appropriate without the consent of any Participant,
Beneficiary, Employer, or any other person. The Plan Sponsor (and not
the Trustee) shall be responsible for adopting any amendments
necessary to maintain the qualified status of this Plan and Trust
under Code Sections 401(a) and 501(a). If the Committee is acting as
the administrator in accordance with Section 11.1, it shall have the
authority to adopt Plan and Trust amendments that have no substantial
adverse financial impact on an Employer or the Plan. All interested
parties shall be bound by any amendment, provided that no amendment
shall:
(a) Become effective unless it has been adopted in accordance with
the procedures set forth in Section 14.6,
(b) Except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Trust assets to revert to an
Employer or to be used for, or diverted to, any purpose other
than for the exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable expenses of
administering the Plan, or
(c) Decrease the rights of any Employer to benefits accrued
(including the elimination of optional forms of benefits) to the
date on which the amendment is adopted or, if later, the date on
which the amendment becomes effective, except to the extent
permitted under ERISA and the Code.
<PAGE>
ARTICLE 12
Termination of the Plan
12.1 Plan Termination/Termination of Employer's Participation. The Plan
Sponsor may, at any time and for any reason, terminate the Plan or
completely discontinue making contributions. Following the occurrence
of either of these events, or in the event of a partial termination of
the Plan within the meaning of Code Section 411(d)(3), all affected
Participants shall be vested in accordance with the provisions of this
Plan. Any Employer may, at any time and for any reason, terminate its
Plan participation by action of its Board of Directors in accordance
with its normal procedures. Written notice of such action shall be
signed and dated by an authorized officer of the Employer and
delivered to the Plan Sponsor. If the effective date of such action is
not specified, it shall be effective on or, as soon as reasonably
practicable, after the date of delivery.
12.2 Right to Terminate the Plan. The Board, in its sole discretion, shall
have the right to terminate the Plan in whole or in part at any time.
Each Participating Employer explicitly disavows any contractual or
other commitment to continue the Plan or any aspect thereof. In the
event of a termination, partial termination or complete
discontinuation of contributions, each affected Participant shall be
one hundred percent (100%) vested in all his Accounts.
12.3 Plan Mergers, Consolidations, and Transfers. The Plan shall not be
automatically terminated by the Employer's acquisition by or merger
with any other company, trade, or business, but the Plan shall be
continued after such merger provided the successor Employer agrees to
continue the Plan with respect to affected Participants herein. All
rights to amend, modify, suspend, or terminate the Plan with respect
to Participants of the Employer shall be transferred to the successor
Employer, effective as of the date of the merger or acquisition. The
merger or consolidation with, or transfer of the allocable portion of
the assets and liabilities of the Fund to any other qualified
retirement plan trust shall be permitted only if the benefit each Plan
Participant would receive, if the Plan were terminated immediately
after such merger or consolidated, or transfer of the allocable
portion of the assets and liabilities, would be at least as great as
the benefit he would have received had this Plan been terminated
immediately before the date of merger, consolidation, or transfer.
<PAGE>
12.4 Amendment of Vesting Schedule. If the vesting provisions of this Plan
are amended, including the adoption of an amendment to take into
account the expiration of top-heavy status under the terms of Article
14, Participants with three (3) or more Years of Service, or three (3)
or more years of employment, whether or not consecutive, at the later
of the date the amendment is adopted or becomes effective, shall
automatically be vested, from the point forward, in the greater of the
amount vested under the vesting schedule as amended or the amount
vested under the vesting schedule before the amendment's adoption.
12.5 Amendment and Termination Procedures. The following procedural
requirements shall govern the adoption of any amendment or termination
(a "Change") of this Plan and Trust:
(a) The Plan Sponsor may adopt any Change by action of its Board of
Directors in accordance with its normal procedures. Any action
required to be taken by the Plan Sponsor's Board of Directors may
be taken by any Committee of the Board of Directors appointed in
accordance with the law of the Plan Sponsor's state of
incorporation. The Board of Directors may, by resolution,
delegate to another person any one or more of the powers reserved
to the Board of Directors under the Plan.
(b) The Committee, if acting as Plan Administrator in accordance with
the provisions of this Plan, may adopt any amendment within the
scope of its authority provided under the provisions of this
Plan.
(c) Any Change must be (1) set forth in writing, and (2) signed and
dated by an authorized officer of the Plan Sponsor or, in the
case of an amendment adopted by the Committee, by at least one of
its members.
<PAGE>
(d) If the effective date of any change is not specified in the
document setting forth the Change, it shall be effective as of
the date it is signed by the last person whose signature is
required under subsection (c)(2) above, except to the extent that
another effective date is necessary to maintain the qualified
status of this Plan and Trust under Code Sections 401(a) and
501(a).
(e) Unless an amendment expressly provides otherwise, all Employers
shall be bound by any amendment to the Plan.
<PAGE>
ARTICLE 13
Trust and the Trustee
13.1 Board to Select Trustee. The Board shall select a Trustee to hold and
invest the Trust Fund in accordance with the terms of a trust
agreement and/or other contract. The Trustee shall be an individual or
individuals, a bank or trust company incorporated under the laws of
the United States or of any state and qualified to operate as a
Trustee or shall be a legal reserve life insurance company or a
combination of such entities. The Board may, from time to time, change
the Trustee then serving under the trust agreement and/or other
contract to another Trustee or elect to terminate the trust and/or
other contract and hold the Plan assets in any other method acceptable
under ERISA.
The Trustee shall invest, manage, acquire, and dispose of the Plan's
assets. However, the Board may, in its sole discretion, retain full
authority to direct the manner in which some or all of the Plan's
assets are invested, managed, acquired, or disposed of by the Trustee,
to appoint an investment manager for that purpose, or to permit
individual Participants and Beneficiaries to select among Investment
Funds selected by the Plan Administrator. The Trustee shall be named
fiduciary within the meaning of ERISA with respect to investment,
management, and control of the Trust Fund, unless such duties are
retained by the Board or otherwise delegated under the terms of the
Trust Agreement and/or other contract. The Trust Agreement and/or
other contract may include provision for participation in a joint or
associated Trust Fund or pooled separate account for the purpose of
pooling investment experience.
<PAGE>
ARTICLE 14
Top-Heavy Plan Requirements
14.1 General Rule. For any Plan Year for which this Plan is a top-heavy
plan, as defined in Section 14.6, and notwithstanding any other
provisions of this Plan to the contrary, this Plan shall be subject to
the provisions of this Article XIV.
14.2 Minimum Contribution Provisions. Each Participant who (i) is a Non-Key
Employee, as defined in Section 14.6 and (ii) is employed on the last
day of the Plan Year, even if such individual has failed to complete
one thousand (1,000) Hours of Service during such Plan Year or did not
make Deferral Contributions in such Plan Year, will be entitled to
have the aggregate of contributions allocated to his Employer Matching
Contribution Account, Employer Discretionary Contributions Account,
and his Deferral Account equal to not less than three percent (3%)
(the Minimum Contribution Percentage) of his compensation. The
compensation considered hereunder is "compensation" as defined in
Section 4.4(a) adjusted as described in Section 14.3. The Minimum
Contribution Percentage will be reduced for any Plan Year to the
percentage at which such contributions are made or are required to be
made under the Plan for the Plan Year for the Key Employee for whom
such percentage is the highest for such Plan Year. For this purpose,
the percentage with respect to a Key Employee, as defined in Section
14.6, will be determined by dividing such contributions made for such
Key Employee by the amount of his total Compensation for the Plan Year
that does not exceed two-hundred-thousand dollars ($200,000)
(multiplied by the Adjusted Factor). Notwithstanding the foregoing,
for Plan Years beginning on or after January 1, 1994, the total
Compensation for purposes of this provision shall not exceed
one-hundred-and-fifty-thousand dollars ($150,000) (multiplied by the
Adjusted Factor).
Such amount will be adjusted in the same manner as the amount set
forth in Section 14.3 below.
<PAGE>
Contributions considered under the first paragraph of Section 14.2
will include the contributions described above under this Plan and
contributions under all other defined contribution plans required to
be included in an Aggregation Group (as defined in Section 14.6
below), but will not include any plan required in such Aggregation
Group if the plan enables a defined contribution plan required to be
included in such group to meet the requirements of the Code,
prohibiting discrimination as to contributions in favor of Employees
who are officers, shareholders, or highly compensated or prescribing
the minimum participation standards.
Contributions under this Section will not include any contributions
governed by the Social Security Act or any other federal or state law.
14.3 Limitation on Compensation. Annual Participant's Compensation taken
into account under this Article XIV for purposes of calculating
benefits under this Plan will not exceed the first
two-hundred-thousand dollars ($200,000) (multiplied by the Adjusted
Factor). Notwithstanding the foregoing, for Plan Years commencing on
or after January 1, 1994, Compensation taken into account under this
Article XIV for purposes of calculating benefits shall not exceed the
first one-hundred-and-fifty-thousand dollars ($150,000) (multiplied by
the Adjusted Factor). The Compensation considered under this Article
XIV shall be Compensation as defined in Section 4.4(a), but including
any amounts contributed by the Participating Employer under a salary
reduction agreement that are not includable in an Employee's gross
income under Code Sections 125, 402(a)(8), 402(h), or 403(b). The
dollar limitation will be adjusted automatically for each Plan Year to
the amount prescribed by the Secretary of the Treasury or his delegate
pursuant to regulations for the calendar year in which such Plan Year
commences.
14.4 Limitation on Contributions. In the event that the Employer or a
Related Employer also maintains a defined benefit plan providing
benefits on behalf of Participants in this Plan, one of the two
following provisions will apply:
(a) If for the Plan Year this would not be a Top-Heavy Plan if
"ninety percent" (90%) were substituted for "sixty percent" (60%)
in Section 14.6, then the percentage of three percent (3%) used
in Section 14.2 is changed to four percent (4%); or
<PAGE>
(b) If for the Plan Year the Plan would continue to be a Top-Heavy
Plan if "ninety percent" (90%) were substituted for "sixty
percent" (60%) in Section 14.6, then the denominator of both the
defined contribution plan fraction and the defined benefit plan
fraction will be calculated as set forth in Section 4.4(c) for
the limitation year ending in such Plan Year by substituting "one
(1)" for "one and twenty-five hundredths (1.25)" in each place
the first figure appears. This subsection (b) will not apply for
such Plan Year with respect to any individual for whom there are
no Employer contributions or forfeitures allocated to his
Employer Matching Contributions Account, Employers Discretionary
Contributions Account, or his Deferral Account or accruals earned
under the defined benefit plan.
14.5 Coordination with Other Plans. If another defined contribution or
defined benefit plan maintained by the Employer or a Related Employer
provides contributions or benefits on behalf of a Participant in this
Plan, the other plan will be treated as a part of this Plan pursuant
to applicable principles (such as Revenue Ruling 81-202 or any
successor ruling) in determining whether this Plan satisfies the
requirements of Sections 14.2, 14.3, and 14.4. The determination will
be made by the Employer on the advice of counsel.
14.6 Determination of Top-Heavy Status. The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of
the Value of Accounts under the Plan for Key Employees (including
former Employees who are Key Employees) exceeds sixty percent (60%) of
the aggregate of the Value of Accounts of all employees, including
former Non-Key Employees, or if this Plan is required to be in an
Aggregation Group, any such Plan Year within such Group is a Top-Heavy
Group.
For purposes of this Section, the capitalized words have the following
meaning:
(a) "Aggregation Group" means the group of plans, if any, that
includes both the group of plans required to be aggregated and
the group of plans permitted to be aggregated.
<PAGE>
The group of plans required to be aggregated (the "required
aggregation group") includes:
(i) Each plan of the Employer and/or Related Employer in which a
Key Employee is a Participant; and
(ii) Each other plan of the Employer and/or Related Employer that
enables a plan in which a Key Employee is a participant to
meet the requirements of the Code, prohibiting
discrimination as to contributions or benefits in favor of
Employees who are officers, shareholders, or highly
compensated or prescribing the minimum participation
standards.
The group of plans that are permitted to be aggregated (the
"permissive aggregation group") includes the required aggregation
group plus one or more plans of the Employer and/or a Related
Employer that is not part of the required aggregation group and
that the Employer certifies as a plan within the permissive
aggregation group. Such plan or plans may be added to the
permissive aggregation group only if, after the addition, the
aggregation group as a whole continues not to discriminate as to
contributions or benefits in favor of officers, shareholders, or
the highly compensated and to meet the minimum participation
standards under the Code.
(b) "Determination Date" means for any Plan Year the last day of the
immediately preceding Plan Year.
(c) "Key Employee" means any Employee or former Employee who, at any
time during the Plan Year in question or during any of the four
preceding Plan Years, is, or was one of the following:
(i) An officer of the Employer and/or a Related Employer having
annual Compensation in excess of fifty percent (50%) of the
dollar limitations under Code Section 415(b)(1)(A). Whether
an individual is an officer shall be determined by the
Employer on the basis of all the facts and circumstances,
such as an individual's authority, duties, and term of
office, not on the mere fact that the individual has the
title of an officer. For any such Plan Year, officers will
be no more than the fewer of:
<PAGE>
(A) Fifty employees; or
(B) The greater of three employees or ten percent (10%) of
the employees.
For this purpose, the highest-paid officers shall be
selected.
(ii) One of the ten (10) Employees having annual Compensation
from the Employer or from a Related Employer in excess of
the amount in effect under Code Section 415(c)(1)(A) and
owning (or considered as owning, within the meaning of the
constructive ownership rules of the Code) the largest
interests of the Employer in any Related Employer. If two
(2) employees have the same interest in the Employer or a
Related Employer, the employee having the greater annual
Compensation shall be treated as having the greater
interest. An Employee will not be considered a top ten owner
for a Plan Year if the Employee earns less than the maximum
dollar limitation on contributions and other annual
additions to a Participant's Account in a defined
contribution plan under the Code, as in effect for the
calendar year in which the Determination Date falls.
(iii)Any person who owns (or is considered as owning, within the
meaning of the constructive ownership rules of the Code)
more than five percent (5%) of the outstanding stock of the
Employer or a Related Employer or stock possessing more than
five percent (5%) of the combined voting power of all stock
of the Employer or Related Employer.
(iv) A one-percent (1%) owner of the Employer or a Related
Employer having annual Compensation form the Employer and
all Related Employers of more than
one-hundred-fifty-thousand dollars ($150,000) and possession
more than one percent (1%) of the combined total voting
power of all stock of the Employer and Related Employers or
more than one percent (1%) of the outstanding stock of the
Employer and Related Employers. For purposes of this
subsection, Compensation means all items includable as
Compensation for purposes of applying the limitations on
contributions and other annual additions to a Participant's
Account in a defined contribution plan and the maximum
benefit payable under a defined benefit plan under the Code.
<PAGE>
(d) "Non-Key Employee" means any employee (and any beneficiary of an
employee) who is not a Key Employee.
(e) "Top-Heavy Group" means the Aggregation Group, if as of the
applicable Determination Date, the sum of the present value of
the cumulative accrued benefits for Key Employees under all
defined benefit plans included in the Aggregation Group plus the
aggregate of the Value of Accounts of Key Employees under all
defined contribution plans included in the Aggregation Group
exceeds sixty percent (60%) of the sum of the present value of
the cumulative accrued benefits for all employees, excluding
former Key Employees, under all such defined benefit plans plus
the aggregate Value of Accounts for all employees, excluding
former Key Employees, under all such defined contribution plans.
If the Aggregation Group that is a To-Heavy Group is a required
aggregation group, each plan in the group will be a Top-Heavy
Plan. If the Aggregation Group that is a Top-Heavy Group is a
permissive aggregation group, only those plans that are part of
the required aggregation group will be treated as Top-heavy
Plans. If the Aggregation Group is not a To-Heavy Group, no plan
within such a group will be a Top-Heavy Plan. The accrued benefit
of a Participant other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the
Participating Employer, or (ii) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code Section 411
(b)(1)(C).
(f) "Value of Accounts" means the sum of (i) the value, as of the
most recent Valuation Date occurring within the twelve (12)
months ending on the Determination Date, of the Participant's
Accounts, and (ii) contributions due to such Accounts as of the
Determination Date, minus (iii) withdrawals from such Accounts
since such Valuation Date.
<PAGE>
In determining whether this Plan constitutes a Top-Heavy Plan,
the Employer (or its agent) will make the following adjustments:
(i) When more than one plan is aggregated, the Employer shall
determine separately for each plan as of each plan's
Determination Date the present value of the accrued benefits
or account balance. The results shall then be aggregated by
adding the results of each plan as of the Determination
Dates for such plans that fall within the same calendar
year.
(ii) In determining the present value of the cumulative accrued
benefit or the amount of the Account of any Employee, such
present value or account will include the amount in dollar
value of the aggregate distributions made to such employee
under the applicable plan during the five (5) year period
ending on the Determination Date unless reflected in the
value of the accrued benefit or account balance as of the
most recent Valuation Date.
The amounts will include distributions to Employees representing
the entire amount credited to their Accounts under the applicable
plan and distributions under a terminated plan, which if it had
not been terminated would have been required to be included in an
Aggregation Group.
(g) Furthermore, in making such determination, such present value of
such Account shall include any rollover contribution (or similar
transfer), as follows:
(i) If the rollover contribution (or similar transfer) is
initiated by the Employee and made to or from a plan
maintained by the Employer and/or a Related Employer, the
plan providing the distribution shall include such
distribution in the present value of such Account; the plan
accepting the distribution shall not include such
distribution, in the present value of such Account unless
the plan accepted it before December 31, 1983.
<PAGE>
(ii) If the rollover contribution (or similar transfer) is not
initiated by the Employee or is made from a plan maintained
by the Employer and/or a Related Employer, the plan
accepting the distribution shall include such distribution
in the present value of such Account, whether the plan
accepted the distribution before or after December 31, 1983;
the plan making the distribution shall not include the
distribution in the present value of such Account.
(iii)In any case in which an individual is a Non-Key Employee
with respect to an applicable plan but was a Key Employee
with respect to such plan for any previous Plan Year, any
accrued benefit and any Account of such Employee will be
altogether disregarded.
For this purpose, to the extent that a Key Employee is
deemed to be a Key Employee if he met the definition of Key
Employee within any of the four preceding Plan Years, this
provision will apply following the end of such period of
time.
(h) Furthermore, in making such determination, if an individual has
not performed any services for the Employer or Participating
Employer at any time during the five (5) year period previous to
the Determination Date, such present value of such Account will
be altogether disregarded.
<PAGE>
ARTICLE 15
Miscellaneous
15.1 Voluntary Plan. The Plan is purely voluntary on the part of each
Participating Employer and neither the establishment of the Plan nor
any amendment thereof, nor the creation of any Fund or Account, nor
the payment of any benefits shall be construed as giving any person a
legal or equitable right as against a Participating Employer, the
Trustee or the Plan Administrator unless the same shall be
specifically provided for in this Plan or conferred by affirmative
action of the Plan Administrator or the Employer in accordance with
the terms and provisions of this Plan. Nor shall such actions be
construed as giving any Employee or Participant the right to be
retained in the service of a Participating Employer. All Employees
and/or Participants shall remain subject to discharge to the same
extent as though this Plan had not been established.
15.2 Non-alienation of Benefits. Participants and their Beneficiaries shall
be entitled to all the benefits specifically set out under the terms
of the Plan, but said benefits or any of the property rights therein
shall not be assignable or distributable to any creditor or other
claimant of such Participant. Except as permitted under the loan
provisions of Section 6.4, a Participant shall not have the right to
anticipate, assign, pledge, accelerate, or in any way dispose of or
encumber any of the monies or benefits or other property that may be
payable or become payable to such Participant or his Beneficiary. The
preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is determined to be a qualified domestic relations order, as defined
in Code Section 414(p) and determined pursuant to Section 10.2(b) or
any domestic relations order entered before January 1, 1985.
15.3 Inability to Receive Benefits. If the Plan Administrator received
evidence that (a) a person entitled to receive any payment under the
Plan is physically or mentally incompetent to receive payment and to
give a valid release thereof, and (b) another person or an institution
is then maintaining or has custody of such person, and no guardian,
committee, or other representative of the estate of such person has
been duly appointed by a court of competent jurisdiction, such payment
may be made to such other person or institution referred to in (b)
above. The release to such other person or institution shall be a
valid and compete discharge for the payment.
<PAGE>
15.4 Lost Participants. If the Plan Administrator is unable, after
reasonable and diligent effort, to locate a Participant or Beneficiary
who is entitled to payment under the Plan, the payment due such person
shall become a forfeiture after three years; provided, however, that
if the Participant or Beneficiary later files a claim for his benefit
it shall be reinstated. Notification by certified or registered mail
to the last known address of the Participant or Beneficiary shall be
deemed a reasonable and diligent effort to locate such person.
15.5 Limitation of Rights. Nothing in the Plan expressed or implied is
intended or shall be construed to confer on or give to any person,
firm, or association other than the Employer, the Participating
Employer, the Participant, and their successors in interest any right,
remedy, or claim under or by reason of this Plan.
15.6 Invalid Provisions. In case any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining parts of this Plan, but this Plan shall be
construed and enforced as if said illegal and invalid provisions had
never been inserted herein.
15.7 One Plan. This Plan may be executed in any number of counterparts,
each of which shall be deemed an original and said counterparts shall
constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.
<PAGE>
15.8 Governing Law. The Plan shall be governed by and construed in
accordance with the federal laws governing employee benefit plans
qualified under the Code and in accordance with the laws of the State
of California where such laws are not permitted by the aforementioned
federal laws.
(CORPORATE SEAL) CUBIC CORPORATION
ATTEST: By:
Title:
By:
Title:
Secretary
Date:
Place:
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the Cubic Corporation Employees' Profit-Sharing Plan
and the Cubic Appications, Inc. 401(k) Retirement Plan of our report dated
November 29, 1995 with respect to the consolidated financial statements of Cubic
Corporation included in its Annual Report on Form 10-K for th eyear ended
September 30, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
___________________________
ERNST & YOUNG, LLP
San Diego, California
October 31, 1996
