As filed with the Securities and Exchange Commission on November 20, 1998.
Registration No. 333-________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-3630868
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10260 Campus Point Drive
San Diego, California 92121
(Address of Principal Executive Offices) (Zip Code)
AMSEC Corporation
EMPLOYEES 401(K) PROFIT SHARING PLAN
------------------------------------
(Full title of the plans)
Douglas E. Scott, Esq.
Senior Vice President and General Counsel
Science Applications International Corporation
10260 Campus Point Drive
San Diego, California 92121
(619) 546-6000
------------------------------------
(Name, address and telephone number, including
area code, of agent for service)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Title of Securities Amount Proposed Proposed Amount of
To Be Registered(1) To Be Registered(2) Maximum Offering Maximum Aggregate Registration
Price Per Share(3) Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $0.01 100,000 shares $58.87 $5,887,000 $1,636.59
per share................................
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Consists of 100,000 shares that are being registered pursuant to the AMSEC
Corporation Employees 401(k) Profit Sharing Plan.
(3) This estimate is made pursuant to Rule 457(h) under the Securities Act of
1933 solely for purposes of calculating the registration fee and is
determined using the Formula Price (as defined in the Prospectus which is
a part of this Registration Statement) of the SAIC Class A Common Stock on
the date hereof.
-----------------
The Registration Statement shall become effective upon filing in accordance
with Rule 462 under the Securities Act of 1933.
________________________________________________________________________________
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference in this
Registration Statement:
(1) Registrant's Annual Report on From 10-K for the fiscal year
ended January 31, 1998.
(2) Registrant's Quarterly Report on Form 10-Q for the period
ended April 30, 1998.
(3) Registrant's Quarterly Report on Form 10-Q for the period
ended July 31, 1998.
(4) Registrant's Current Report on Form 8-K, as filed with the
Commission on February 5, 1998.
(5) Registrant's Current Report on Form 8-K, as filed with the
Commission on April 15, 1998.
(6) Registrant's Current Report on Form 8-K, as filed with the
Commission on July 16, 1998.
(7) Registrant's Current Report on Form 8-K, as filed with the
Commission on October 14, 1998.
(8) The information with regard to the Registrant's capital stock
contained in Post-Effective Amendment No. 1 to the Registration
Statement on Form 8-A, as filed with the Commission on April 28, 1998.
In addition, all documents subsequently filed by Registrant or the
AMSEC Corporation Employees 401(k) Profit Sharing Plan pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, 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 in this Registration Statement and to
be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Class A Common Stock offered hereby has been passed
upon for the Registrant by Douglas E. Scott, Esquire, Senior Vice President and
General Counsel of the Registrant. As of October 31, 1998, Mr. Scott owned of
record 13,410 shares of Class A Common Stock, had the right to acquire an
additional 8,100 shares pursuant to previously granted stock options and
beneficially owned a total of 4,605 shares through certain retirement and stock
plans of the Registrant.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 ("Section 145") of the DGCL provides generally and in
pertinent part that a Delaware corporation may indemnify its directors,
officers, employees and agents against expenses (including attorneys' fees),
judgments, fines and settlements actually and reasonably incurred by them in
connection with any civil, criminal, administrative or investigative action,
suit or proceeding (except actions by or in the right of the corporation), if,
they acted in good faith and in a manner they reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal suit or proceeding, they had no reasonable cause to believe their
conduct was unlawful. Section 145 further provides that, in connection with the
defense or settlement of any action by or in the right of the corporation, a
Delaware corporation may indemnify its directors, officers, employees and agents
against expenses actually and reasonably incurred by them if they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, absent a determination by a court that
such indemnity is proper. Section 145 further permits a Delaware corporation to
grant its directors, officers, employees and agents additional rights of
indemnification through bylaw provisions and otherwise.
Section 145 further permits a Delaware corporation to purchase and
maintain insurance on behalf of any persons who are or were directors, officers,
employees or agents of the corporation, or are or were serving at the request
of the corporation as directors, officers, employees or agents of the
corporation, or are or were serving at the request of the corporation as
directors, officers, employees or agents of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
them and incurred by them in any such capacity, or arising out of their status
as such, whether or not the corporation would have the power to indemnify them
against such liability under the other provisions of Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
liability for unauthorized acquisitions or redemptions of, or dividends on,
capital stock) or (iv) for any transaction from which the director derived an
improper personal benefit.
Article FIFTEENTH of the Restated Certificate of Incorporation of the
Registrant provides for the indemnification of its directors and officers to the
fullest extent provided by the DGCL.
The Registrant also has directors and officers liability insurance,
with policy limits of $50 million, under which directors and officers of
Registrant are insured against certain liabilities which they may incur in such
capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933.
3
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20% change
in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby further 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 that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of McLean, State of Virginia, on October 9, 1998.
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION
By /S/ J.R. BEYSTER
-------------------------------------
J.R. Beyster
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J.D. Heipt and D.E. Scott, and each of
them, his or her true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or his substitute or substitutes,
may do or cause to be done by virtue hereof.
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 date indicated:
SIGNATURE TITLE DATE
/S/ J.R. BEYSTER Chairman of the Board and Chief October 9, 1998
- ---------------------------- Executive Officer (Principal
J. R. Beyster Executive Officer)
/S/ W.A. ROPER, JR. Principal Financial Officer October 9, 1998
- ----------------------------
W. A. Roper, Jr.
/S/ P.N. PAVLICS Principal Accounting Officer October 9, 1998
- ----------------------------
P. N. Pavlics
5
<PAGE>
/S/ D.P. ANDREWS Director October 9, 1998
- ----------------------------
D. P. Andrews
/S/ V.N. COOK Director October 9, 1998
- ----------------------------
V. N. Cook
/S/ W.H. DEMISCH Director October 9, 1998
- ----------------------------
W. H. Demisch
- ---------------------------- Director October _, 1998
D.W. Dorman
/S/ W.A. DOWNING Director October 9, 1998
- ----------------------------
W. A. Downing
/S/ J.E. GLANCY Director October 9, 1998
- ----------------------------
J. E. Glancy
/S/ B.R. INMAN Director October 9, 1998
- ----------------------------
B. R. Inman
/S/ A.K. JONES Director October 9, 1998
- ----------------------------
A. K. Jones
/S/ H.M.J. KRAEMER, JR. Director October 9, 1998
- ----------------------------
H. M. J. Kraemer, Jr.
/C/ C.B. MALONE Director October 9, 1998
- ----------------------------
C. B. Malone
/S/ J.W. MCRARY Director October 9, 1998
- ----------------------------
J. W. McRary
6
<PAGE>
/S/ S.D. ROCKWOOD Director October 9, 1998
- ----------------------------
S. D. Rockwood
/S/ R.C. SMITH Director October 9, 1998
- ----------------------------
R. C. Smith
/S/ E.A. STRAKER Director October 9, 1998
- ----------------------------
E. A. Straker
/S/ M.E. TROUT Director October 9, 1998
- ----------------------------
M. E. Trout
/S/ J.P. WALKUSH Director October 9, 1998
- ----------------------------
J. P. Walkush
/S/ J.H. WARNER, JR. Director October 9, 1998
- ----------------------------
J. H. Warner, Jr.
/S/ J.A. WELCH Director October 9, 1998
- ----------------------------
J. A. Welch
/S/ J.B. WIESLER Director October 9, 1998
- ----------------------------
J. B. Wiesler
/S/ A.T. YOUNG Director October 9, 1998
- ----------------------------
A. T. Young
Pursuant to the requirements of the Securities Act of 1933, the
Committee for the AMSEC Corporation Employees 401(k) Profit Sharing Plan has
duly caused this Registration Statement to be signed on behalf of such plan by
the undersigned, thereunto duly authorized, in the city of Virginia Beach,
State of Virginia.
AMSEC CORPORATION EMPLOYEES 401(K)
PROFIT SHARING PLAN
By /s/ L. Rene Hunter
------------------------------------
L. Rene Hunter
Chairman
Profit Sharing Plan Committee
7
<PAGE>
INDEX TO EXHIBITS
Exhibit Exhibit
Number -------
------
4.1 AMSEC Corporation 401(k) Profit Sharing Plan, filed herewith.
5.1 Opinion regarding legality of securities to be offered, filed
herewith.
23.1 Consent of Independent Accountants, filed herewith.
23.2 Consent of Douglas E. Scott, Esquire (included in Exhibit 5.1).
24.1 Power of Attorney (see page 5).
8
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
March 1993
<PAGE>
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
TABLE OF CONTENTS
ARTICLE PAGE
I. NAME, EFFECTIVE DATE AND PURPOSES .......................................1
1.1 Name and Effective Date .........................................1
1.2 Plan Purposes....................................................1
II. DEFINITIONS..............................................................2
2.1 Accounts ........................................................2
2.1A Additional Company Contribution .................................2
2.2 Adjustment Factor ...............................................2
2.3 Affiliated Company ..............................................2
2.4 Alternate Payee .................................................3
2.5 Alternate Payee Account .........................................3
2.6 Anniversary Date ................................................3
2.7 Applicable Valuation Date .......................................3
2.8 Annual Addition .................................................3
2.8A Average Deferral Percentage .....................................3
2.9 Beneficiary .....................................................3
2.10 Board of Directors ..............................................3
2.11 Break in Service ................................................3
2.12 Code.............................................................4
2.13 Reserved for Plan Modifications .................................4
2.14 Company .........................................................4
2.15 Company Contributions ...........................................4
2.16 Company Stock ...................................................4
2.17 Compensation ....................................................4
2.17A Contribution Percentage .........................................6
2.17B Deferral Account ................................................6
2.17C Deferral Percentage .............................................6
2.18 Disability ......................................................6
2.19 Distributable Benefit ...........................................6
2.20 Effective Date ..................................................6
2.20A Elective Deferrals ..............................................6
2.21 Eligible Employee ...............................................7
2.22 Employee ........................................................7
2.23 Employment Commencement Date ....................................8
2.24 ERISA............................................................8
2.24A Excess Aggregate Contributions...................................8
2.25 Excess Contributions ............................................8
2.25A Excess Deferrals ................................................9
2.25B Family Member ...................................................9
2.26 5% Owner ........................................................9
2.27 Highly Compensated Employee .....................................9
2.28 Hour of Service ................................................10
i
<PAGE>
2.29 Investment Manager .............................................11
2.30 IRP Contributions ..............................................11
2.31 Limitation Year ................................................12
2.31A Matching Contribution ..........................................12
2.32 Maternity or Paternity Absence .................................12
2.32A Nonhighly Compensated Employee .................................12
2.33 Normal Retirement ..............................................12
2.33A Normal Retirement Age ..........................................12
2.34 Normal Retirement Date .........................................12
2.35 Participant ....................................................12
2.36 Participation Commencement Date ................................12
2.37 Plan............................................................13
2.38 Reserved for Plan Modifications ................................13
2.39 Plan Administrator .............................................13
2.40 Plan Year ......................................................13
2.40A Profit Sharing Contribution ....................................13
2.41 Qualified Holder ...............................................13
2.42 Required Payment Commencement Date .............................13
2.43 Rollover Account ...............................................14
2.44 Rollover Contribution ..........................................14
2.45 Suspended Participant ..........................................14
2.46 Trust and Trust Fund ...........................................14
2.47 Trustee ........................................................14
2.48 Valuation Date .................................................14
2.49 Vested Interest ................................................14
2.50 Voluntary Contribution .........................................15
2.51 Voluntary Account ..............................................15
2.52 Years of Service ...............................................15
III. ELIGIBILITY AND PARTICIPATION ..........................................17
3.1 Eligibility to Participate .....................................17
3.2 Automatic Commencement of Participation ........................17
IV. TRUST FUND AND COMPANY CONTRIBUTIONS; VALUATION OF
COMPANY STOCK CONTRIBUTED; INVESTMENT DIRECTION BY
PARTICIPANTS; COMPANY STOCK TRANSACTIONS WITH
DISQUALIFIED PERSONS ...................................................18
4.1 Trust Fund .....................................................18
4.2 Permissible Types of Plan Investments ..........................18
4.3 Company Contributions ..........................................18
4.4 Form of Company Contributions ..................................19
4.5 Valuation of Company Contributions in the
Form of Company Stock .........................................19
4.6 Investment of Company Contributions and
Voluntary Contributions........................................19
4.7 Irrevocability .................................................20
ii
<PAGE>
4.8 Company, Plan Administrator and Trustee Not
Responsible for Adequacy of Trust Fund ........................21
4.9 Company Stock Transactions With Disqualified
Persons .......................................................21
V. ELECTIVE DEFERRALS, ROLLOVER CONTRIBUTIONS,
PLAN-TO-PLAN TRANSFERS, AND VOLUNTARY CONTRIBUTIONS ....................22
5.1 Election .......................................................22
5.2 Amount Subject to Election; Nondiscrimination
Requirement and Distribution of Excess
Contributions .................................................22
5.2A Matching Contributions; Nondiscrimination
Requirement and Distribution of Excess
Aggregate Contributions .......................................25
5.3 Termination of, Change in Rate of, or
Resumption of Deferrals .......................................28
5.4 Rollover Contributions From Other Plans ........................28
5.5 Plan-to-Plan Transfers .........................................29
5.6 Voluntary Contributions ........................................29
VI. ACCOUNTING AND ALLOCATION PROCEDURES ...................................30
6.1 Deferral Account ...............................................30
6.1A Company Contribution Account ...................................30
6.2 Voluntary Account ..............................................30
6.3 Rollover Account ...............................................30
6.4 Alternate Payee Account ........................................30
6.5 Allocation of Company Contributions ............................30
6.6 Valuation of Accounts ..........................................31
6.7 Allocation of Forfeitures ......................................34
6.8 Allocation of Income or Loss on Unallocated
Company Contributions; Company Contributions
to Defray Plan Expenses .......................................35
6.9 Accounting Procedures ..........................................35
6.10 Suspended Participants .........................................36
6.11 Accounting for Interest of an Alternate Payee ..................36
VII. VESTING IN ACCOUNTS ....................................................37
7.1 No Vested Rights Except as Herein Specified ....................37
7.2 Participant's Vested Interest--General Rule ....................37
7.3 Vested Percentage--Special Rules ...............................37
7.4 Nonforfeitable Accounts ........................................39
7.5 Alternate Payee Accounts .......................................39
VIII. PAYMENT OF PLAN BENEFITS ..............................................40
8.1 Retirement .....................................................40
8.2 Other Termination of Employment ................................40
8.3 Withdrawals Prior to Age 59-1/2 ................................40
8.4 Distributable Benefit ..........................................42
iii
<PAGE>
8.5 Optional Forms of Payment ......................................43
8.6 Direct Rollover ................................................44
8.7 Timing on Distributions ........................................44
8.8 Distribution Rules .............................................47
8.9 Reserved for Plan Modifications ................................51
8.10 Designation of Beneficiary .....................................51
8.11 Facility of Payment ............................................52
8.12 Distribution to Alternate Payees ...............................52
8.13 Additional Documents ...........................................52
8.14 Transfer of Distributed Company Stock--Right of
First Refusal for the Company and the Plan ....................53
IX. OPERATION AND ADMINISTRATION OF THE PLAN; VOTING AND
OTHER RIGHTS OF COMPANY STOCK ..........................................54
9.1 Plan Administration ............................................54
9.2 Plan Administrator Powers ......................................54
9.3 Investment Manager .............................................55
9.4 Periodic Review ................................................56
9.5 Reserved for Plan Modifications ................................56
9.6 Reserved for Plan Modifications ...............................56
9.7 Reserved for Plan Modifications ................................56
9.8 Reserved for Plan Modifications ................................56
9.9 Reserved for Plan Modifications ................................56
9.10 Reliance Upon Documents and Opinions ...........................56
9.11 Requirement of Proof ...........................................57
9.12 Reserved for Plan Modifications ................................57
9.13 Multiple Fiduciary Capacity ....................................57
9.14 Limitation on Liability ........................................57
9.15 Indemnification ................................................58
9.16 Allocation of Fiduciary Responsibility .........................58
9.17 Prohibition Against Certain Actions ............................59
9.18 Bonding and Insurance ..........................................60
9.19 Voting and Other Rights of Company Stock .......................60
9.20 Plan Expenses ..................................................62
X. MERGER OF COMPANY: MERGER OF PLAN ......................................63
10.1 Effect of Reorganization or Transfer of Assets .................63
10.2 Merger Restriction .............................................63
XI. PLAN TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS ...................64
11.1 Plan Termination ...............................................64
11.2 Discontinuance of Contributions ................................64
11.3 Rights of Participants .........................................65
11.4 Trustee's Duties on Termination ................................65
11.5 Partial Termination ............................................66
11.6 Failure to Contribute ..........................................66
iv
<PAGE>
XII. APPLICATION FOR BENEFITS ...............................................67
12.1 Application for Benefits; Claims Procedure .....................67
12.2 Action on Application ..........................................67
12.3 Appeals ........................................................67
XIII. LIMITATIONS ON ANNUAL ADDITIONS .......................................69
13.1 Maximum Annual Additions .......................................69
13.2 Effect of Participation in Other Company Plans .................69
13.3 Incorporation by Reference of Code Section 415 .................69
13.4 No Contractual Right to Excess Contributions ...................69
XIV. RESTRICTION ON ALIENATION; PARTICIPANT LOANS ...........................70
14.1 General Restrictions Against Alienation ........................70
14.2 Nonconforming Distributions Under Court Order ..................70
14.3 Authorized Participant Loans ...................................72
XV. PLAN AMENDMENTS ........................................................75
15.1 Amendments .....................................................75
15.2 Retroactive Amendments .........................................75
XVI. TOP-HEAVY PROVISIONS ...................................................76
16.1 Application ....................................................76
16.2 Criteria .......................................................76
16.3 Definitions ....................................................76
16.4 Adjustment to Fractions ........................................79
16.5 Vesting Requirements ...........................................79
16.6 Minimum Contribution ...........................................79
16.7 Ceiling on Includable Compensation .............................80
XVII. MISCELLANEOUS .........................................................81
17.1 No Enlargement of Employee Rights ..............................81
17.2 Mailing of Payments; Lapsed Benefits ...........................81
17.3 Addresses ......................................................82
17.4 Notices and Communications .....................................82
17.5 Reporting and Disclosure .......................................83
17.6 Governing Law ..................................................83
17.7 Interpretation .................................................83
17.8 Withholding For Taxes ..........................................83
17.9 Limitation on Company, Plan Administrator and
Trustee Liability .............................................83
17.10 Successors and Assigns .........................................83
17.11 Counterparts ...................................................83
17.12 No Implied Rights or Obligations ...............................84
v
<PAGE>
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
ARTICLE I
NAME, EFFECTIVE DATE AND PURPOSES
1.1 NAME AND EFFECTIVE DATE. Effective July 1, 1981, American Systems
Engineering Corporation (the "Company") established the American Systems
Engineering Corporation Employees 401(k) Profit Sharing Plan. This document
amends and restates the Plan in its entirety effective as of October 1, 1992,
except where a different date is specifically provided.
1.2 PLAN PURPOSES. This Plan is designed to constitute a tax-qualified
profit sharing plan for purposes of Code sections 401(a) and 501(a) which
provides a vehicle whereby eligible employees of the Company may elect to defer
the receipt of some portion of their income and instead to have those amounts
contributed to the Plan on their behalf under a "cash or deferred arrangement"
within the meaning of Code section 401(k).
1
<PAGE>
ARTICLE II
DEFINITIONS
2.1 ACCOUNTS. The term "Accounts" shall include the following Accounts
that are maintained pursuant to the terms of this Plan:
(a) The Deferral Account maintained for each Participant who has
made Elective Deferrals pursuant to the provisions of Section 5.1.
(b) Company Contribution Account maintained for each Participant on
whose behalf Matching Contributions or Profit Sharing Contributions are made
pursuant to Sections 5.2A or 4.3.
(c) The Voluntary Account maintained for each Participant who has
made Voluntary Contributions pursuant to the provisions of Section 5.6.
(d) The Rollover Account maintained for each Participant who has
made Rollover Contributions pursuant to Section 5.5.
(e) The Alternate Payee Account maintained for each Alternate Payee
who is awarded an interest in a Participant's benefits under the Plan pursuant
to the provisions of Sections 6.11 and 14.2.
(f) The IRP Account maintained for periods prior to January 1, 1991
for each Participant who made IRP Contributions under the provisions of the Plan
in effect prior to January 1, 1987.
2.1A ADDITIONAL COMPANY CONTRIBUTION. "Additional Company Contribution"
shall mean a contribution made by the Company pursuant to Section 4.3 which is
intended to qualify as a qualified nonelective contribution pursuant to Code
section 401(k)(3)(D)(ii)(II).
2.2 ADJUSTMENT FACTOR. "Adjustment Factor" shall mean the cost of living
adjustment factor prescribed by the Secretary of the Treasury under Code section
415(d) for years beginning after December 31, 1987, as applied to the items and
in the manner prescribed by the Secretary of the Treasury.
2.3 AFFILIATED COMPANY. "Affiliated Company" 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
Company;
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(b) Any trade or business that is under common control with the
Company 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 Company; and
(d) Any entity required to be included under Code section 414(o).
2.4 ALTERNATE PAYEE. "Alternate Payee" shall mean an individual awarded
a portion of a Participant's benefits under the Plan pursuant to a qualified
domestic relations order, as defined in Code section 414(p) and Section 14.2 of
the Plan. Any limitation or condition imposed by the Plan upon a Participant or
his rights hereunder shall, unless expressly indicated otherwise, also serve to
limit or condition the rights of an Alternate Payee of the Participant's
Account(s).
2.5 ALTERNATE PAYEE ACCOUNT. "Alternate Payee Account" shall mean the
account maintained to reflect the interest of an Alternate Payee under the Plan.
2.6 ANNIVERSARY DATE. "Anniversary Date" shall mean the last day of each
Plan Year.
2.7 APPLICABLE VALUATION DATE. "Applicable Valuation Date" shall mean
the most recent date on which the Trust assets were valued in accordance with
the rules of Article VI.
2.8 ANNUAL ADDITION. "Annual Addition" shall mean "annual addition" as
defined in Code section 415(c)(2).
2.8A AVERAGE DEFERRAL PERCENTAGE. "Average Deferral Percentage" shall
mean the average of the Deferral Percentages of the Participants who are in the
Highly Compensated Employee group or the Nonhighly Compensated Employee group,
as applicable.
2.9 BENEFICIARY. "Beneficiary" or "Beneficiaries" means the person or
persons designated pursuant to Section 8.10 to receive the interest of a
deceased Participant.
2.10 BOARD OF DIRECTORS. "Board of Directors" shall mean the Board of
Directors (or its delegate, to the extent the duties of the Board of Directors
are delegated to such person) of the Company as it may from time to time be
constituted.
2.11 BREAK IN SERVICE. "Break in Service" shall mean for vesting and
participation purposes, with respect to an Employee, a Plan Year in which the
Employee completes no more than 500 Hours of Service.
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2.12 CODE. "Code" shall mean the Internal Revenue Code of 1986, as in
effect on the date of execution of this Plan document and as thereafter amended
from time to time.
2.13 RESERVED FOR PLAN MODIFICATIONS.
2.14 COMPANY. "Company" shall mean American Systems Engineering
Corporation, or any successor thereof, if its successor shall adopt this Plan.
In addition, unless the context indicates otherwise, as used in this Plan the
term Company shall also mean and include any Affiliated Company (or similar
entity) which has been granted permission by the Board of Directors to
participate in this Plan. This permission shall be granted upon such terms and
conditions as the Board of Directors deems appropriate.
2.15 COMPANY CONTRIBUTIONS. "Company Contributions" shall mean all
amounts (whether in cash or other property, including Company Stock) paid by the
Company into the Trust Fund established and maintained under the provisions of
this Plan for the purpose of providing benefits for Participants and their
Beneficiaries, and shall include Elective Deferrals, Profit Sharing
Contributions, Matching Contributions, Additional Company Contributions and any
contributions to pay Plan expenses as provided in Section 6.8.
2.15A COMPANY CONTRIBUTION ACCOUNT. "Company Contribution Account" shall
mean the Account opened up and maintained for the Participant pursuant to
Section 6.1A.
2.16 COMPANY STOCK. "Company Stock" shall mean Class A Common Stock par
value $.01 per share ("Class A Common Stock"), and to the extent accounted for
pursuant to Section 4.2 of the Plan and solely for such purpose, shall also mean
Class B Common Stock, par value $.05 per share ("Class B Common Stock"), of
Science Applications International Corporation.
2.17 COMPENSATION.
(a) For purposes of determining the allocation of Profit Sharing
Contributions pursuant to Section 6.5(e) and the amount of the Participant's
permissible Elective Deferrals under Section 5.2, "Compensation" shall mean the
amounts described in subsection (b) below paid by the Company during a Plan Year
by reason of services performed by an Employee less any compensation paid by
reason of services performed during any period in which the Employee is not a
Participant under this Plan, but including any elective contributions that are
made by the Company on behalf of an Employee pursuant to an arrangement
described in Code sections 125, 402(a)(8), 402(h) or 403(b).
(b) For purposes of applying the limitation on Annual Additions
pursuant to Article XIII of the Plan, "Compensation" shall mean a Participant's
earned income, wages, salaries and fees for professional services and other
amounts received for personal services actually rendered in the course of
employment
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with the Company (including, but not limited to, commissions paid salespersons,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), and excluding the
following:
(i) Company contributions to a plan of deferred compensation
that are not includable in the Employee's gross income for the taxable year in
which contributed, or Company contributions under a simplified employee pension
(within the meaning of Code section 408(k)) to the extent such contributions are
excludable from gross income by the Employee, or any distributions from a plan
of deferred compensation;
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified or incentive stock option; and
(iv) Other amounts that received special tax benefits, or
Company contributions (whether or not under a salary reduction agreement)
towards the purchase of an annuity described in Code section 403(b) (whether or
not the amounts are actually excludable from the gross income of the Employee).
(c) For purposes of determining whether an Employee is a Highly
Compensated Employee and whether the Plan is top heavy under Article XVI,
"Compensation" shall have the meaning set forth in subsection (b) above
(substituting "Employee" for "Participant" therein), but without regard to Code
sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of contributions made
pursuant to a salary reduction agreement, Code section 403(b).
(d) For purposes of determining the Deferral Percentage and
Contribution Percentage of a Participant, "Compensation" shall mean the amounts
specified in subsection (a) above provided that for an Employee's first year of
participation in the Plan, Compensation shall include only amounts earned while
a Participant.
(e) The amount considered as Compensation for any purpose hereunder
shall be limited to $200,000, multiplied by the Adjustment Factor for Plan Years
after 1988.
2.17A CONTRIBUTION PERCENTAGE. "Contribution Percentage" shall mean the
ratio (expressed as a percentage) of (i) a Participant's Matching Contributions
plus any Additional Contributions allocated to the Participant's Deferral
Account for the Plan Year that are taken into account in the
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nondiscrimination test described in Section 5.2A and (ii) the Participant's
Compensation for the Plan Year.
2.17B DEFERRAL ACCOUNT. "Deferral Account" shall mean the Account opened
up and maintained for each Employee who has made Elective Deferrals pursuant to
Section 5.1.
2.17C DEFERRAL PERCENTAGE. "Deferral Percentage" shall mean the ratio
(expressed as a percentage) of (i) a Participant's Elective Deferrals (including
Excess Deferrals) plus any Additional Company Contributions allocated to the
Participant's Deferral Account that are taken into account in the
nondiscrimination test described in Section 5.2(c) for the Plan Year to (ii) the
Participant's Compensation for the Plan Year.
2.18 DISABILITY. "Disability" or "Disabled" shall mean the status of
disability determined conclusively by the Plan Administrator based on
certification of disability by the Social Security Administration, effective
upon receipt of such certification by the Plan Administrator.
2.19 DISTRIBUTABLE BENEFIT. "Distributable Benefit" shall mean the
interest of a Participant in this Plan that is determined and distributable to
him in accordance with the provisions of Article VIII and which shall include
his nonforfeitable interest in his Deferral Account, Company Contribution
Account, Voluntary Account and Rollover Account, if any. In the case of an
Alternate Payee, the Distributable Benefit shall mean the nonforfeitable balance
in the Alternate Payee Account.
2.20 EFFECTIVE DATE. The original effective date of this Plan was July
1, 1981. The effective date of this amendment and restatement of the Plan is
October 1, 1992, except where a different Effective Date is specified. The
effective date of any prior or subsequent amendments is the date specified
therein or in any accompanying resolutions adopting such amendment. The rights
of an Employee who has terminated employment shall be governed by the terms of
the Plan in effect at the time of such termination, unless otherwise specified
in any subsequent amendment.
2.20A ELECTIVE DEFERRALS. "Elective Deferrals" shall mean contributions
paid over by the Company to the Trustee at the election of a Participant in lieu
of cash Compensation pursuant to Section 5.1.
2.21 ELIGIBLE EMPLOYEE. "Eligible Employee" shall include any Employee
except the following:
(a) Any Employee who is covered by a collective bargaining agreement
to which the Company or an Affiliated
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Company is a party if there is evidence that retirement benefits were the
subject of good faith bargaining between the Company (or an Affiliated Company)
and the collective bargaining representative, unless the collective bargaining
agreement provides for coverage under this Plan.
(b) Any Employee within a group or classification within the Company
designated by the President of the Company as ineligible for participation in
this Plan.
(c) Any Employee of an Affiliated Company which has not been granted
permission by the Board of Directors to participate in this Plan.
(d) Any Employee who becomes an Employee on or after January 1, 1992
and who is hired or becomes an Employee as part of a division, operating unit,
geographical location or other identified unit of the Company, unless such new
division, unit or location has been determined by the President of the Company
to be eligible for participation in this Plan.
(e) Any Employee who is a nonresident alien and who receives no
earned income (within the meaning of Code section 911(d)(2)) from the Company
which constitutes income from sources within the United States (within the
meaning of Code section 861(a)(3)), unless the Employee is within a group or
classification of nonresident alien Employees designated as eligible to
participate in the Plan by the Board of Directors or its delegate.
(f) Any individual who is not treated as an Employee on the
Company's payroll records during the applicable Plan Year or other applicable
computation or eligibility period, notwithstanding the fact that such individual
is subsequently classified as a common-law employee of the Company.
2.22 EMPLOYEE. "Employee" shall mean each person currently employed as a
common-law employee of the Company or Affiliated Company. For services performed
after December 31, 1986 for purposes of determining the number or identity of
Highly Compensated Employees and for purposes of the requirements of Code
sections 414(n)(3)(A) and (B), the term "Employee" shall include any person who
is a leased employee within the meaning of Code section 414(n)(2) unless (i)
such leased employees constitute less than 20% of the Company's nonhighly
compensated workforce within the meaning of Code section 414(n)(5)(C)(ii) and
(ii) such person is covered by a plan meeting the requirements of Code section
414(n)(5)(B). A leased employee includes any person (other than an employee of
the recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with
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Code section 4l4(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer.
2.23 EMPLOYMENT COMMENCEMENT DATE. "Employment Commencement Date" shall
mean each of the following:
(a) The date on which an Employee first performs an Hour of Service
in any capacity for the Company or an Affiliated Company with respect to which
the Employee is compensated or is entitled to compensation by the Company or the
Affiliated Company.
(b) In the case of an Employee whose employment is terminated and
who is subsequently reemployed by the Company or an Affiliated Company, the term
"Employment Commencement Date" shall also mean the first day following the
termination of employment on which the Employee performs an Hour of Service for
the Company or an Affiliated Company with respect to which he is compensated or
entitled to compensation by the Company or Affiliated Company.
Unless the Board of Directors or its delegate shall expressly determine
otherwise, an Employee shall not, for the purposes of determining his Employment
Commencement Date, be deemed to have commenced employment with an Affiliated
Company prior to the effective date on which the entity became an Affiliated
Company.
2.24 ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
2.24A EXCESS AGGREGATE CONTRIBUTIONS. "Excess Aggregate Contributions"
shall mean the aggregate amount of contributions with respect to a Plan Year
which are taken into account in computing the Contribution Percentages of Highly
Compensated Employees and which are actually made on behalf of such Employees in
excess of the maximum amount of such contributions permitted under the
nondiscrimination test set forth in Section 5.2A of the Plan.
2.25 EXCESS CONTRIBUTIONS. "Excess Contributions" shall mean the
aggregate amount of contributions with respect to a Plan Year which are taken
into account in computing the Deferral Percentages of Highly Compensated
Employees and which are actually made on behalf of such Employees in excess of
the maximum amount of such contributions permitted under the nondiscrimination
test set forth in Section 5.2(c) of the Plan.
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2.25A EXCESS DEFERRALS. "Excess Deferrals" shall mean the contributions
made on behalf of a Participant under any qualified cash or deferred
arrangements described in Code sections 401(k), 408(k) or 403(b) for a calendar
year which exceed the limitation set forth in Section 5.2(b) of the Plan and
which are includable in the Participant's gross income under Code section
402(g).
2.25B FAMILY MEMBER. "Family Member" shall mean an individual who is a
member of the family of a Highly Compensated Employee. For this purpose,
"family" shall mean, with respect to an Employee, such Employee's spouse and
lineal ascendants or descendants and the spouses of such ascendants or
descendants.
2.26 5% OWNER. "5% Owner" shall mean an individual who owns (or is
considered as owning, within the meaning of Code section 318) more than 5% of
the outstanding stock of the Company or stock possessing more than 5% of the
total combined voting power of all stock of the Company.
2.27 HIGHLY COMPENSATED EMPLOYEE. "Highly Compensated Employee" shall
mean any Employee who, during the Plan Year or the preceding Plan Year --
(a) was at any time a 5% Owner;
(b) received Compensation from the Company in excess of $75,000
(adjusted by the Adjustment Factor);
(c) received Compensation from the Company in excess of $50,000
(adjusted by the Adjustment Factor) and was in the top-paid group of Employees
(i.e., group consisting of the top 20% of Employees when ranked on the basis of
Compensation paid during such Plan Year); or
(d) was at any time an officer and received Compensation greater
than 50% of the amount in effect under Code section 415(b)(1)(A) for such Plan
Year.
For purposes of determining Highly Compensated Employees in the current
Plan Year, an Employee not described in subsection 2.27(b), (c) or (d) above for
the preceding Plan Year shall not be considered a Highly Compensated Employee
for the current Plan Year unless such Employee is a member of the group
consisting of the one hundred (100) Employees paid the greatest Compensation
during the current Plan Year.
If the Company makes the election specified in Code section 414(q)(12)
to apply the simplified method of determining Highly Compensated Employees, then
for any Plan Year governed by the election, in determining whether an Employee
is a Highly Compensated Employee for such Plan Year, (i) subsection 2.27(b)
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above shall be applied by substituting "$50,000" for "$75,000," and (ii)
subsection 2.27(c) shall not apply.
The election by the Company under Code section 414(q)(12) shall not
apply for any Plan Year unless, at all times during the Plan Year, (i) the
Company maintained significant business activities (and employed Employees) in
at least two significantly separate geographic areas, and (ii) the Company
satisfies such other conditions as the Secretary of Treasury has prescribed.
2.28 HOUR OF SERVICE.
(a) "Hour of Service" of an Employee shall mean the following:
(i) Each hour for which the Employee is paid by the Company or
an Affiliated Company (while it is an Affiliated Company) or entitled to payment
for the performance of services as an Employee. An Employee will not be
considered as being entitled to payment, for purposes of determining the
computation period to which hours are to be credited, until the date the Company
or Affiliated Company, as applicable, would normally make payment to the
Employee for such hour based on normal payroll practices.
(ii) Each hour in or attributable to a period of time during
which the Employee performs no duties (irrespective of whether he has terminated
his Employment) due to a vacation, holiday, illness, incapacity (including
pregnancy or disability), layoff, jury duty, military duty or a leave of
absence, for which he is so paid or so entitled to payment, whether direct or
indirect. However, no such hours shall be credited to an Employee if such
Employee is directly or indirectly paid or entitled to payment for such hours
and if such payment or entitlement is made or due under a plan maintained solely
for the purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws or is a payment which
solely reimburses the Employee for medical or medically related expenses
incurred by him.
(iii) Each hour for which an Employee is entitled to back pay,
irrespective of mitigation of damages, whether awarded or agreed to by the
Company or an Affiliated Company, provided that such Employee has not previously
been credited with an Hour of Service with respect to such hour under paragraph
(i) or (ii) above.
(iv) Absence while on an authorized leave of absence shall count
as employment with the Company provided such leave of absence is not of more
than two years duration. Absence from employment on account of active duty with
the Armed Forces of the United States shall be counted as employment with the
Company.
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If the Employee does not return to active employment with the Company, his
employment with the Company shall be deemed to have ceased on the date the Plan
Administrator receives notice that such Employee will not return to active
employment with the Company. Hours shall be credited for the computation period
or periods in which the authorized leave takes place. However, no more than 501
hours shall be credited under this subsection for each such computation period.
(v) The term "Hour of Service" shall also include (for those
purposes designated by the applicable officer specified below) hours credited to
an Employee for service with a predecessor employer provided that such service
has been approved by the President, Chief Operating Officer, or Senior Vice
President for Administration of the Company for recognition under this Plan,
which approval shall apply on a nondiscriminatory basis to all Employees with
service during the recognition period for such predecessor employer.
(b) Hours of Service under subsections (a)(ii), (a)(iii), and
(a)(iv) shall be calculated in accordance with Department of Labor Regulation 29
C.F.R. Section 2530.200b-2(b). Hours of Service shall be credited to the
appropriate computation period according to the Department of Labor Regulation
29 C.F.R. Section 2530.200b-2(c).
(c) To the extent not otherwise credited under this Section 2.28,
Hours of Service determined with respect to a Maternity or Paternity Absence
shall be credited as follows: the Employee shall be credited (solely for
purposes of Section 2.11) with those Hours of Service that otherwise would
normally have been credited to such Employee but for such absence, except that
(i) the total number of Hours of Service so credited shall not exceed 501 and
(ii) such Hours of Service shall be credited as Hours of Service in the Plan
Year in which the absence from work commences only if the Employee would be
prevented from incurring a Break in Service in such Plan Year solely by virtue
of such crediting, and shall otherwise be credited in the Plan Year immediately
following the Plan Year in which the absence from work commences.
2.29 INVESTMENT MANAGER. "Investment Manager" shall mean the one or more
Investment Managers, if any, appointed pursuant to Section 9.3.
2.30 IRP CONTRIBUTIONS. "IRP Contributions" shall mean voluntary amounts
contributed by a Participant prior to January 1, 1987 which the Participant
designated in writing were eligible for a tax deduction under Code section 219.
All such IRP Contributions have been distributed by January 1, 1991 in
accordance with the provisions regarding IRP Contributions in the Plan in effect
as of October 1, 1989.
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2.31 LIMITATION YEAR. "Limitation Year" shall mean the calendar year.
2.31A MATCHING CONTRIBUTION. "Matching Contribution" shall mean a
contribution paid by the Company (other than Profit Sharing Contributions,
Elective Deferrals or Additional Company Contributions) that is made on account
of a Participant's Elective Deferrals pursuant to Section 5.2A and which is
intended to qualify as a Matching Contribution pursuant to Code section
401(m)(4)(A). Such Matching Contributions, and the Plan provisions regarding
them, became effective as of January 1, 1990.
2.32 MATERNITY OR PATERNITY ABSENCE. "Maternity or Paternity Absence"
shall mean an absence from work for any period by reason of (a) an Employee's
pregnancy, (b) the birth of a child of such Employee, (c) the placement of a
child with the Employee in connection with the adoption of such child by such
Employee, or (d) the caring for a natural or adopted child for a period
beginning immediately following such birth or placement.
2.32A NONHIGHLY COMPENSATED EMPLOYEE. "Nonhighly Compensated Employee"
shall mean an Employee who is not a Highly Compensated Employee or a Family
Member.
2.33 NORMAL RETIREMENT. "Normal Retirement" shall mean a Participant's
termination of employment with the Company as a result of such Participant
attaining his Normal Retirement Date.
2.33A NORMAL RETIREMENT AGE. "Normal Retirement Age" shall be the day on
which a Participant attains age 65.
2.34 NORMAL RETIREMENT DATE. "Normal Retirement Date" means the first
day of the month coinciding with or next following the date a Participant
attains his Normal Retirement Age.
2.35 PARTICIPANT. "Participant" shall mean any Eligible Employee who has
satisfied the eligibility requirements set forth in Section 3.1 and has been
enrolled in this Plan in accordance with procedures established by the Plan
Administrator.
2.36 PARTICIPATION COMMENCEMENT DATE. "Participation Commencement Date"
shall mean the day on which an Employee's participation in this Plan commences
in accordance with the provisions of Article III.
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2.37 PLAN. "Plan" shall mean the American Systems Engineering
Corporation Employees 401(k) Profit
Sharing Plan herein set forth, and as it may be amended from time to time.
2.38 RESERVED FOR PLAN MODIFICATIONS.
2.39 PLAN ADMINISTRATOR. "Plan Administrator" shall mean the
administrator of the Plan, within the meaning of Section 3(16)(A) of ERISA. For
Plan Years beginning on or after January 1, 1989, the Plan Administrator shall
be the Company.
2.40 PLAN YEAR. "Plan Year" shall mean the calendar year.
2.40A PROFIT SHARING CONTRIBUTION. "Profit Sharing Contribution" shall
mean the contributions paid by the Company (other than Additional Company
Contributions, Elective Deferrals or Matching Contributions) to the Trustee as
provided in Article IV.
2.41 QUALIFIED HOLDER. "Qualified Holder" shall mean:
(a) The Participant, Beneficiary or Alternate Payee receiving a
distribution of Company Stock under this Plan;
(b) Any other party to whom the distributed Company Stock is
transferred by gift or by reason of death; and
(c) Any trustee of an Individual Retirement Account (as defined
under Code section 408) to which all or any portion of the distributed Company
Stock is transferred pursuant to a tax-free "rollover" transaction satisfying
the requirements of Code section 402.
2.42 REQUIRED PAYMENT COMMENCEMENT DATE. "Required Payment Commencement
Date" in the case of a Participant other than a 5% Owner, shall be the sixtieth
day after the close of the latest Plan Year in which occurs:
(a) The Participant's Normal Retirement Date;
(b) The tenth anniversary of the date the Participant commenced
participation in the Plan; or
(c) The Participant's termination of employment with the Company or
an Affiliated Company, unless a Participant who retires on or after his Normal
Retirement Date elects to defer distribution for a period of up to five years
following his
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Normal Retirement Date; but in no event beyond April 1 following the calendar
year in which the Participant attains age 70-1/2.
In the case of a 5% Owner (and in all cases after December 31, 1988),
the Required Payment Commencement Date shall be the earlier of the date
specified in the preceding sentence and April 1 following the calendar year in
which the Participant attains age 70-1/2, whether or not the Participant has
retired. If a Participant becomes a 5% Owner after attaining age 70-1/2, the
Required Payment Commencement Date shall not be later than the last day of the
calendar year in which the Participant becomes a 5% Owner.
2.43 ROLLOVER ACCOUNT. "Rollover Account" shall mean the Account opened
up and maintained for an Employee making a Rollover Contribution as provided in
Section 5.4 or on whose behalf a plan-to-plan transfer is made pursuant to
Section 5.5.
2.44 ROLLOVER CONTRIBUTION. "Rollover Contribution" shall mean a
contribution to the Plan by an Eligible Employee of amounts which qualify for
exclusion from gross income pursuant to Code section 402(a)(5), subject to the
timing, maximum amount limitations, and other requirements of Code section
402(a)(5).
2.45 SUSPENDED PARTICIPANT. "Suspended Participant" shall mean any
Participant who remains an Employee but who ceases to be eligible to participate
in this Plan by virtue of ceasing to be an Eligible Employee. Status as a
Suspended Participant shall commence as of the date such Participant ceases to
be an Eligible Employee. A Suspended Participant shall not be deemed a
Participant except for those purposes specified in this Plan or as required by
law.
2.46 TRUST AND TRUST FUND. "Trust" or "Trust Fund" shall mean the one or
more trusts or SubTrusts created for funding purposes under the Plan. The Trust
Fund may be commingled for investment purposes with the assets of other
qualified retirement plans maintained by the Company by investing through a
master trust fund operated pursuant to a master trust agreement between the
Company and the Trustee.
2.47 TRUSTEE. "Trustee" shall mean the individual or individuals or
corporation named by the Board of Directors to act as Trustee or any successor
to such individual or individuals or corporation.
2.48 VALUATION DATE. "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 determined in rules prescribed by the Plan Administrator,
which
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rules may prescribe different dates for the various investment funds comprising
the Trust Fund.
2.49 VESTED INTEREST. "Vested Interest" shall mean the nonforfeitable
interest of a Participant in his Profit Sharing and Matching Contribution
Accounts which has become vested in accordance with Article VII and the entire
balance of his Deferral Account, Voluntary Account and Rollover Account, if any.
The Vested Interest of an Alternate Payee in his Alternate Payee Account shall
be determined as set forth in Article VII.
2.50 VOLUNTARY CONTRIBUTION. "Voluntary Contribution" shall mean a
nondeductible employee contribution made by a Participant to the Plan in
accordance with the rules of Article V.
2.51 VOLUNTARY ACCOUNT. "Voluntary Account" shall mean the Account in
which a Participant's Voluntary Contributions to the Plan are held pursuant to
Section 6.2
2.52 YEAR OF SERVICE. "Year of Service" means a period of twelve
consecutive months during which an employee completes at least 1,000 Hours of
Service.
(a) For purposes of determining a Participant's Years of Service and
Breaks in Service for vesting purposes, the twelve-consecutive-month period
shall be the Plan Year. The Participant shall not be required to be an Employee
on the last day of the Plan Year in order to receive credit for a Year of
Service for such year for vesting purposes. If a Participant completes less than
1,000 Hours of Service during a Plan Year, but remains an employee of the
Company, his vested percentage shall not be increased for such Plan Year. If an
individual terminates employment with the Company, and is subsequently rehired
as an Employee, upon his participation or subsequent participation, his vesting
percentage shall take into account all Years of Service subject to subsection
(c).
(b) In determining the vested percentage of an Employee, all Years
of Service shall be taken into account except (i) Plan Years during which a
Participant does not complete at least 1,000 Hours of Service, (ii) Years of
Service completed prior to a Participant's Breaks in Service if the Participant
had no Vested Interest in his Company Contribution Account at the time he
terminated employment with the Company, and the number of Breaks in Service
incurred by the Participant exceed the greater of (A) five and (B) the
Participant's Years of Service completed before the Breaks in Service, (iii) for
Plan Years after 1991, all Years of Service completed after a Participant has
incurred five consecutive Breaks in Service for purposes of determining the
Vested Interest of the Participant's Company Contribution Account attributable
to
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contributions made prior to such Breaks, and (iv) Years of Service completed
prior to July 1, 1981.
(c) Service with a predecessor organization of the Company shall be
treated as service with the Company in any case in which the Company maintains
the plan of such predecessor organization. Employees who transferred to the
Company from Science Applications International Corporation, who had a hire date
with the Company on or after September 8, 1987, shall receive credit for Hours
of Service and Years of Service with Science Applications International
Corporation under the Plan. Employees who transfer to the Company from
corporations or business divisions as designated by the President of the Company
shall be credited with five Years of Service for purposes of this Plan.
(d) For purposes of this Section 2.52, if any Plan Year is less than
twelve consecutive months, the number of Hours of Service required to accrue a
Year of Service (or to incur a Break in Service) in such short Plan Year shall
bear the same ratio to 1,000 (or, in the case of a Break in Service, (500) as
the number of days in the short Plan Year bears to 365.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY TO PARTICIPATE.
(a) Each Employee who was a Participant as of the Effective Date
shall continue participation in the Plan.
(b) Each other Eligible Employee shall become a Participant as
provided in Section 3.2.
3.2 AUTOMATIC COMMENCEMENT OF PARTICIPATION.
(a) Each Eligible Employee described in Section 3.l(b) shall be
entitled to commence participation in this Plan as of his applicable
Participation Commencement Date, which shall be the January l or July l which
immediately follows such Employee's Employment Commencement Date provided he is
an Eligible Employee as of that date.
(b) A former Participant who is reemployed by the Company as an
Eligible Employee, or a Suspended Participant who again becomes an Eligible
Employee, shall commence participation immediately upon becoming an Eligible
Employee.
(c) If an Eligible Employee's employment with the Company terminates
before his Participation Commencement Date and the Employee subsequently is
reemployed by the Company, the following rules apply:
(i) If the Employee is reemployed prior to incurring a Break in
Service, he shall become eligible to become a Participant in the Plan upon the
Participation Commencement Date coinciding with or immediately following his
Employment Commencement Date which occurs after the termination of his
employment, provided that he is an Eligible Employee.
(ii) If the Employee is reemployed after incurring a Break in
Service, the Employee shall be treated as a new Employee and his prior Hours of
Service shall be disregarded for purposes of this Article III.
(d) For periods prior to January 1, 1990, the Participation
Commencement Dates were October 1 and April 1, provided, however, that with
respect to Elective Deferrals, the relevant date was the next pay period
commencing after the applicable October 1 or April 1 Participation Commencement
Date.
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ARTICLE IV
TRUST FUND AND COMPANY CONTRIBUTIONS; VALUATION OF
COMPANY STOCK CONTRIBUTED; INVESTMENT DIRECTION BY
PARTICIPANTS; COMPANY STOCK TRANSACTIONS
WITH DISQUALIFIED PERSONS
4.1 TRUST FUND. The Company has established the Trust pursuant to a
Trust Agreement under which the Trustee has agreed to hold and administer in
trust all amounts previously accumulated under the Plan together with the
additional funds deposited with the Trustee pursuant to the terms of this Plan.
The Company shall have the authority to select the Trustee to act under the
Trust Agreement and to enter into new or amended Trust Agreements as it deems
advisable.
4.2 PERMISSIBLE TYPES OF PLAN INVESTMENTS. The assets of the Plan may be
invested in the following types of assets as determined by the Plan
Administrator and described in a notification to the Trustee:
(a) Company Stock. The Plan Administrator, in its discretion, may
direct the Trustee to hold up to one hundred percent (100%) of the assets of the
Trust in Company Stock;
(b) Other "Qualifying Employer Securities," as that term is defined
in ERISA section 407(d)(5);
(c) "Qualifying Employer Real Property," as that term is defined in
ERISA section 407(d)(4);
(d) Cash; or
(e) Any other property that is a permissible plan investment under
applicable law.
4.3 COMPANY CONTRIBUTIONS. The Company shall pay over to the Trustee in
cash an amount equal to the aggregate of the amounts that each Participant
elects (pursuant to Article V) to have contributed to the Plan on his behalf as
Elective Deferrals. Such contributions shall be made no later than 30 days after
such amounts are withheld from the Participant's Compensation. If necessary or
appropriate, the Company, in its sole discretion, may make contributions to the
Trust in excess of the amounts required under the preceding sentence as Profit
Sharing Contributions or Additional Company Contributions. In addition, the
Company shall pay over to the Trustee Matching Contributions in the amount
determined under Section 5.2A. Company Contributions shall be made no later than
the due date for filing the federal income tax return (including extensions) of
the Company for the taxable year with respect to which the contribution is made.
The Company may, in its discretion, make
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contributions at any time to defray Plan expenses as provided in Section 6.8.
4.4 FORM OF COMPANY CONTRIBUTIONS. The Company Contributions to the
Trust Fund shall be paid in cash, Company Stock, or such other property as the
Board of Directors may from time to time determine.
4.5 VALUATION OF COMPANY CONTRIBUTIONS IN THE FORM OF COMPANY STOCK.
Company Stock contributed by the Company to the Trust Fund shall be valued as of
the date of contribution using the rules set forth in Section 6.6(b)(ii),
treating the date of contribution as the Valuation Date.
4.6 INVESTMENT OF COMPANY CONTRIBUTIONS AND VOLUNTARY CONTRIBUTIONS. All
contributions to the Plan (whether Company Contributions, Voluntary
Contributions, Rollover Contributions or plan-to-plan transfers) shall be
invested as provided in this Section 4.6.
(a) 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 to an Alternate Payee Account.
Company Contributions may be directed to be invested in a Company Stock fund
within the Trust, subject to the direction of the Plan Administrator.
(b) 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.
(c) 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.
(d) 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 which in any event shall not be less frequent
than once each month. 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).
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(e) 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, for any reason whatsoever, as to how all or a portion of his
Accounts shall be invested.
(f) The Plan Administrator shall provide notice by arranging for
reports 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.
4.7 IRREVOCABILITY. The Company shall have no right or title to, nor
interest in, the contributions made to the Trust Fund, and no part of the Trust
Fund shall revert to the Company except that funds may be returned to the
Company as follows:
(a) In the case of a Company Contribution which is made by a mistake
of fact, that contribution shall be returned to the Company within one (1) year
after such contribution is made.
(b) If the Commissioner of the Internal Revenue Service determines
that the Plan is not initially qualified under the Code, any contribution made
incident to that initial qualification by the Company shall be returned to the
Company within one year after the date the initial qualification is denied, but
only if the application for the qualification is made by the time prescribed by
law for filing the Company's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may prescribe.
(c) All Company Contributions to the Plan are conditioned upon the
deductibility of those contributions under Code section 404. To the extent a
deduction is disallowed, the contribution shall, at the election of the Company,
be returned to the Company within one year after the disallowance.
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4.8 COMPANY, PLAN ADMINISTRATOR AND TRUSTEE NOT RESPONSIBLE FOR ADEQUACY
OF TRUST FUND.
(a) Neither the Company nor the Trustee shall be liable or
responsible for the adequacy of the Trust Fund to meet and discharge any or all
payments and liabilities hereunder. All Plan benefits will be paid from the
Trust assets, and neither the Company nor the Trustee shall have any duty or
liability to furnish the Trust with any funds, securities or other assets except
as expressly provided in the Plan.
(b) Except as required under the Plan or Trust or under Part 4 of
Title I of ERISA, the Company shall not be responsible for any decision, act or
omission of the Trustee or the Investment Manager (if applicable), and shall not
be responsible for the application of any moneys, securities, investments or
other property paid or delivered to the Trustee.
(c) The Company expressly disavows any contractual obligation,
implied or explicit, to make any contribution to the Plan or to contribute any
specified amount.
4.9 COMPANY STOCK TRANSACTIONS WITH DISQUALIFIED PERSONS. Acquisition or
sale by the Plan of Company Stock or other qualifying employer securities (as
defined in ERISA section 407(a)(5)), from or to a "disqualified person" (as
defined in Code section 4975(e)(2)), shall be at a price which represents
"adequate consideration" (as defined in ERISA section 3(18)) or, in the event
such Company Stock or other qualifying employer security is a marketable
obligation (as defined in ERISA section 407(e)), at a price not less favorable
to the Plan than the price determined under ERISA section 407(e)(1). No
commission shall be charged to the Plan in connection with any such sale or
acquisition. The determination as to whether or not such a sale or acquisition
satisfies the requirements of this Section 4.9 shall be made by the Plan
Administrator.
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ARTICLE V
ELECTIVE DEFERRALS, ROLLOVER CONTRIBUTIONS,
PLAN-TO-PLAN TRANSFERS AND VOLUNTARY CONTRIBUTIONS
5.1 ELECTION. At dates established by the Plan Administrator, each
Participant may elect, on forms prescribed by the Plan Administrator, to defer
the receipt of a portion of his Compensation for that Plan Year and to have the
deferred amount contributed directly by the Company to the Trust Fund as
Elective Deferrals.
5.2 AMOUNT SUBJECT TO ELECTION; NONDISCRIMINATION REQUIREMENT AND
DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(a) The amount of an individual's Compensation that may be deferred
subject to the election provided in Section 5.1 shall be a percentage of the
individual's Compensation, not to exceed the maximum percentage established by
the Plan Administrator. For purposes of this Section 5.2(a), (i) the amount of
the individual's Compensation shall be determined prior to the reduction caused
by the deferral (if any) of a portion of his Compensation pursuant to this
Article V and (ii) Compensation shall not include bonuses, income from stock
options, vesting stock or non-cash remuneration.
(b) The maximum amount of Elective Deferrals contributed on behalf
of a Participant under the Plan shall not exceed $7,000 (multiplied by the
Adjustment Factor) during any calendar year. Effective for Plan Years beginning
on and after January 1, 1992, if, during a calendar year, (i) the Employee
participates in this Plan and one or more other plans with a qualified cash or
deferred arrangement described in Code sections 401(k), 408(k)(6), 125 or
403(b), (ii) the Employee's Elective Deferrals under all such plans (including
this Plan) exceed $7,000 (multiplied by the Adjustment Factor), and (iii) all or
any portion of such Employee's Elective Deferrals under this Plan constitute
Excess Deferrals by virtue of an allocation and notification by the Employee
pursuant to Code section 402(g)(2)(A)(i), such Excess Deferrals shall not be
distributed to such Employee as permitted by Code section 402(g)(2)(A)(ii),
notwithstanding that the Employee may request such distribution, but rather
shall be held in the Trust Fund in the same manner as such Employee's Elective
Deferrals which do not constitute Excess Deferrals.
(c) The Company shall distribute Excess Contributions to Highly
Compensated Employees as provided in subsection (e) below to the extent
necessary to satisfy one of the deferral percentage tests described below:
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(i) The Average Deferral Percentage of Highly Compensated
Employees who are Participants is not more than the product of 1.25 and the
Average Deferral Percentage of all other Participants.
(ii) The Average Deferral Percentage of Highly Compensated
Employees who are Participants is not more than the lesser of (A) 200% of the
Average Deferral Percentage of all other Participants and (B) the Average
Deferral Percentage of all other Participants plus two percentage points.
In determining the Average Deferral Percentages, the Deferral
Percentages of all "Qualified Employees" shall be taken into account. For this
purpose, a Qualified Employee is any Employee who is directly or indirectly
eligible under the Plan to make Elective Deferrals for all or a portion of a
Plan Year and includes:
(A) an Employee who would be a Participant but for the
failure to make Elective Deferrals;
(B) an Employee whose eligibility to make Elective
Deferrals has been suspended because of an election not to participate or
receipt of a distribution or a loan; and
(C) an Employee who is unable to make an Elective Deferral
because his Compensation is less than a stated dollar amount. In the case of a
Qualified Employee who makes no Elective Deferrals, the Deferral Percentage that
is to be included in determining the Average Deferral Percentage shall be zero.
(d) Excess Contributions for the preceding Plan Year plus any income
allocable to such contributions shall be distributed no later than the last day
of each Plan Year to the Highly Compensated Employees to whose accounts such
Excess Contributions were allocated. Excess Contributions shall be treated as
Annual Additions. The income allocable to such contributions shall include the
income accrued during the Plan Year for which the Excess Contributions were made
and income for the period between the end of the Plan Year and the date of the
distribution. Such income shall be determined pursuant to procedures established
by the Plan Administrator consistent with Code section 401(k)(8)(A) and Income
Tax Regulations section 1.401(k)-1(f)(4).
(e) Distribution of Excess Contributions (plus income) shall be made
on the basis of the respective portions of the Excess Contributions attributable
to each Highly Compensated Employee. Distribution shall be made first from the
Deferral Account of the Highly Compensated Employee whose Elective Deferrals
represent the highest Deferral Percentage for the Plan
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Year. No distribution shall be made of Excess Contributions to any Highly
Compensated Employee as long as any other Highly Compensated Employee has a
higher Deferral Percentage. Any decrease in the amount of Elective Deferrals to
be made on behalf of a Participant or a distribution of Excess Contributions
under this subsection (d) will also be effective for purposes of determining the
amount of Matching Contributions, if any, allocated to such Participant under
Section 5.2A.
(f) The Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have salary
deferrals described in Code section 402(g)(3)(A) or qualified nonelective
contributions described in Code section 401(m)(4)(C) allocated on his behalf
under two or more plans or arrangements described in Code section 401(k) that
are maintained by the Company or any Affiliated Company shall be determined as
if all such deferrals and contributions were made under a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code section 401(k).
(g) If a Highly Compensated Employee who is eligible to participate
in the Plan is subject to the family aggregation of Code section 414(q)(6)
because such Employee is either a 5% Owner or one of the ten (l0) most highly
compensated employees, the combined Deferral Percentage for the family group
(which shall be treated as one Highly Compensated Employee) shall be determined
by combining the Elective Deferrals, Compensation and Additional Company
Contributions treated as Elective Deferrals of all Family Members. The Elective
Deferrals, Compensation and Additional Company Contributions treated as Elective
Deferrals of all Family Members shall be disregarded for purposes of determining
the Average Deferral Percentage for the Highly Compensated Employee group and
the Nonhighly Compensated Employee group except to the extent taken into account
in the preceding sentence. 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 the prior two sentences.
(h) The Plan Administrator may prescribe such rules as it deems
necessary or appropriate regarding the maximum amount that a Participant may
elect to defer and the timing of such an election. These rules may prescribe a
maximum percentage of Compensation that may be deferred, or may provide that the
maximum percentage of Compensation that a Participant may defer will be a lower
percentage of his Compensation above a certain dollar amount of Compensation
than the maximum deferral percentage below that dollar amount of Compensation.
These rules shall apply to all individuals eligible to make the election
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described in Section 5.1, except to the extent that the Plan Administrator
prescribes special or more stringent rules applicable only to Highly Compensated
Employees.
(i) The Plan Administrator may, in its discretion, estimate, as soon
as is reasonably possible prior to the close of the Plan Year, the extent (if
any) to which deferral treatment under Code section 401(k) may not be available
to any Participant (or class of Participants). If, pursuant to these estimates
by the Plan Administrator, a Participant (or a class of Participants) is not
eligible for deferral treatment for any or all of the amounts deferred pursuant
to the election set forth above in Section 5.1, then the Plan Administrator may
authorize a suspension of Elective Deferrals made pursuant to the provisions of
Article V. This suspension shall be made pursuant to rules promulgated by the
Plan Administrator. These rules may include provisions authorizing the
suspension of Elective Deferrals above a specified dollar amount of
Compensation, or any other means that the Plan Administrator believes will help
to ensure that deferral treatment will be available for all Participants.
(j) In the event that the Plan Administrator determines that an
amount to be deferred pursuant to the election provided in Section 5.1 would
cause the Company Contributions under this and any other tax-qualified
retirement plan maintained by the Company or any Affiliated Company to exceed
the applicable deduction limitations contained in Code section 404, or to exceed
the maximum Annual Addition determined in accordance with Article XIII, the Plan
Administrator may treat such amount in accordance with the rules set forth above
in Section 5.2(i).
5.2A MATCHING CONTRIBUTIONS; NONDISCRIMINATION REQUIREMENT AND
DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(a) Effective for Plan Years beginning on or after January 1, 1990,
the Company may, in its discretion, make a Matching Contribution in an amount
equal to a percentage (determined each year in the Company's discretion) for
each $1 of a Participant's Elective Deferrals up to a maximum of $5,000 of such
Elective Deferrals, subject to the limitations specified in Article XIII. Such
contribution for any Plan Year shall be paid to the Trustee on the last day of
the Plan Year, or as soon as possible thereafter, but in any event no later than
the date which is prescribed by law for filing the Company's federal income tax
return, including any extensions for the taxable year with respect to which such
contribution is made. A Matching Contribution shall be allocated as of the last
day of the Plan Year for which such contribution is made to each Participant who
is performing duties as a wage earning Employee for the Company as of the last
day of the Plan Year and any Participant who dies, retires or becomes disabled
during such Plan Year.
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(b) The Company shall distribute Excess Aggregate Contributions to
Highly Compensated Employees as provided in subsection (e) below to the extent
necessary to satisfy one of the contribution percentage tests prescribed below:
(i) The Average Contribution Percentage of Highly Compensated
Employees who are Participants is not more than the product of 1.25 and the
Average Contribution Percentage of all other Participants.
(ii) The Average Contribution Percentage of Highly Compensated
Employees who are Participants is not more than the lesser of (A) 200 percent of
the Average Contribution Percentage of all other Participants and (B) the
Average Contribution Percentage of all other Participants plus two percentage
points.
(c) In determining the Average Contribution Percentages, the
Contribution Percentages of all "Qualified Employees" shall be taken into
account. For this purpose, a Qualified Employee is any Employee who is directly
or indirectly eligible under the Plan to receive an allocation of Matching
Contributions for all or a portion of a Plan Year and includes:
(i) an Employee who would be a Plan Participant but for the
failure to make Elective Deferrals;
(ii) an Employee whose eligibility to make Elective Deferrals
has been suspended because of an election not to participate or receipt of a
hardship distribution;
In the case of a Qualified Employee who makes no Elective
Deferrals, and thus receives no Matching Contributions, the Contribution
Percentage that is to be included in determining the Average Contribution
Percentage shall be zero.
(d) Excess Aggregate Contributions for the preceding Plan Year plus
any income allocable to such contributions shall be distributed no later than
the last day of each Plan Year to the Highly Compensated Employees to whose
account such Excess Aggregate Contributions were allocated. Excess Aggregate
Contributions shall be treated as Annual Additions. The allocable income to such
contributions shall include the income allocable for the Plan Year for which the
Excess Aggregate Contributions were made and income for the period between the
end of the Plan Year and the date of distribution. Such income shall be
determined pursuant to procedures established by the Plan Administrator
consistent with Code section 401(m)(6) and Income Tax Regulations section
1.401(m)-1(e)(3).
(e) Distribution of Excess Aggregate Contributions (plus income
thereon) shall be made on the basis of the respective portions of the Excess
Aggregate Contributions
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attributable to each Highly Compensated Employee. Distributions shall be made
first from the Matching Contribution Account of the Highly Compensated Employee
whose Matching Contributions represent the highest Contribution Percentage for
the Plan Year. 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) The Contribution Percentage of a Highly Compensated Employee who
is eligible to participate in two or more plans described in Code section 401(a)
or arrangements described in Code section 401(k) maintained by the Company or an
Affiliated Company to which Matching Contributions or employee after-tax
contributions are made shall be aggregated for purposes of determining such
Employee's Contribution Percentage.
(g) If a Highly Compensated Employee who is eligible to participate
in the Plan is subject to the family aggregation of Code section 414(q)(6)
because such Employee is either a 5% Owner or one of the ten most highly
compensated employees, the combined Contribution Percentage for the family group
(which shall be treated as one Highly Compensated Employee) shall be determined
by combining the Matching Contributions, Compensation and any Additional Company
Contributions treated as Matching Contributions of all Family Members. The
Matching Contributions, after-tax employee contributions, Compensation and
amounts treated as Matching Contributions of all Family Members shall be
disregarded for purposes of determining the Contribution Percentage for the
Highly Compensated Employee group and the Nonhighly Compensated Employee group
except to the extent taken into account in the preceding sentence. 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 the prior two sentences. Excess Aggregate Contributions of
Participants who are subject to the Family Member aggregation rules shall be
allocated among Family Members in proportion to the Matching Contributions and
after-tax employee contributions (or amounts treated as Matching Contributions)
of each Family Member that is combined under the aggregation rules.
(h) Any Excess Aggregate Contributions that are forfeited shall be
added to Company Contributions and allocated as provided in Section 6.7(a).
(i) Effective for Plan Years beginning on and after January 1, 1988,
if one or more Highly Compensated Employees participates in a cash or deferred
arrangement subject to the nondiscrimination test in Code section 401(k) and a
plan subject to the nondiscrimination test in Code section 401(m) that are
maintained by the Company or an Affiliated Company, and the sum
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of the Average Deferral Percentage and Average Contribution Percentage of the
Highly Compensated Employees subject to either or both of those tests exceeds
the aggregate limit defined below, the Average Contribution Percentage of the
Highly Compensated Employees who also participate in the cash or deferred
arrangement shall be reduced (beginning with the Highly Compensated Employee
whose Contribution Percentage is the highest) to the extent necessary to come
within the Applicable Limit. The amount by which each Highly Compensated
Employee's Contribution Percentage is reduced shall be treated as an Excess
Aggregate Contribution. The Average Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees shall be determined after any
corrections required to meet the Average Deferral Percentage test and the
Average Contribution Percentage test. Multiple use does not occur if either the
Average Deferral Percentage or the Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average Deferral
Percentage and Average Contribution Percentage of the Nonhighly Compensated
Employees.
5.3 TERMINATION OF, CHANGE IN RATE OF, OR RESUMPTION OF DEFERRALS.
(a) A Participant may submit on form(s) prescribed by the Plan
Administrator a request to the Plan Administrator that he wishes to terminate,
alter the rate of, or resume his Elective Deferrals made pursuant to this
Article V. Such changes may be made once each month.
(b) This request for termination, alteration, or resumption shall be
effective as soon as practicable, subject to Section 5.2(i), and shall be
effective on the later of the date specified in the notice of the change and the
date which is fifteen days after the notice is received by the Plan
Administrator.
5.4 ROLLOVER CONTRIBUTIONS FROM OTHER PLANS. An Eligible Employee,
regardless of whether he has satisfied the participation requirements of Section
3.1, may contribute to the Trust Fund a Rollover Contribution pursuant to
procedures approved by the Plan Administrator. The Plan Administrator shall
develop such procedures and may require such information from an Employee
desiring to make such a contribution as it deems necessary or desirable to
determine that the proposed contribution will meet the requirements of a
Rollover Contribution. Upon approval by the Plan Administrator, the amount
contributed shall be deposited in the Trust Fund and shall be credited to a
Rollover Account. Such account shall be one hundred percent (100%) vested in the
Employee, shall be valued in accordance with Section 6.6, but shall not share in
allocations of any Profit Sharing Contributions. Upon termination of
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employment, the total amount of the Voluntary Account shall be distributed as
soon as practicable following termination of employment or, if the Employee so
elects, treated as part of the Employee's "Distributable Benefit" under Section
8.4 and distributed in accordance with Sections 8.1 through 8.6, as applicable.
Upon such contribution by an Employee who is otherwise eligible to
participate in the Plan, but who has not yet completed the participation
requirements of Section 3.1, his Rollover Account shall represent his sole
interest in the Plan until he becomes a Participant.
5.5 PLAN-TO-PLAN TRANSFERS. In its sole discretion, the Plan
Administrator may authorize (subject to procedures established by the Plan
Administrator) the Trustee to accept a transfer, from a plan qualified under
Code section 401(a), of a Participant's account balance under such transferee
plan, but only to the extent such account balance satisfies each of the
following requirements:
(a) It consists of cash only;
(b) It is 100% vested; and
(c) It is comprised solely of pre-tax contributions and/or earnings.
Any such transfer shall be allocated to a Rollover Account of the Participant.
5.6 VOLUNTARY CONTRIBUTIONS. No Voluntary Contributions are permitted
subsequent to December 31, 1986. Voluntary Contributions made prior to such date
shall be maintained in a Voluntary Account as set forth herein.
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ARTICLE VI
ACCOUNTING AND ALLOCATION PROCEDURES
6.1 DEFERRAL ACCOUNT. The Plan Administrator shall open and maintain a
separate Deferral Account for each Participant in the Plan who has made Elective
Deferrals.
6.1A COMPANY CONTRIBUTION ACCOUNT. The Plan Administrator shall open up
and maintain a separate Company Contribution Account for each Participant in the
Plan who has been allocated a Profit Sharing Contribution or Matching
Contribution.
6.2 VOLUNTARY ACCOUNT. The Plan Administrator shall continue to maintain
a separate Voluntary Account for each Participant who has made a Voluntary
Contribution to the Plan.
6.3 ROLLOVER ACCOUNT. The Plan Administrator shall open and maintain a
separate Rollover Account for each Participant in the Plan who has made a
Rollover Contribution or plan-to-plan transfer to the Plan.
6.4 ALTERNATE PAYEE ACCOUNT. The Plan Administrator shall open and
maintain a separate Alternate Payee Account for each Alternate Payee who is
awarded benefits under this Plan pursuant to a qualified domestic relations
order within the meaning of Code section 414(p).
6.5 ALLOCATION OF COMPANY CONTRIBUTIONS.
(a) All Company Contributions on account of Elective Deferrals shall
be allocated to Participants' Deferral Accounts as soon as practicable following
their contribution to the Trust, but in no event later than ninety (90) days
after such amounts were deferred.
(b) All Company Contributions which constitute Matching
Contributions shall be allocated to Participants' Company Contribution Accounts
within ninety (90) days following their contribution to the Trust. An allocation
shall be made on behalf of a Participant who is otherwise eligible to receive a
Matching Contribution only if such Participant is a wage-earning Employee of the
Company on the last day of the Plan Year, or if such Participant dies, retires
or becomes disabled during the Plan Year.
(c) Any Company Contributions which constitute Profit Sharing
Contributions shall be allocated to the Company Contribution Account of each
Participant who is performing duties as a wage-earning Employee of the Company
on the last day of the Plan Year. An allocation also shall be made for any
Participant who dies, retires or becomes disabled during the Plan Year. The
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Profit Sharing Contribution shall be allocated to each Participant eligible to
receive a share of such contribution in the proportion that the Compensation
paid to each such Participant during the Plan Year bears to the Compensation
paid to all such Participants.
(d) Any Company Contributions for a Plan Year which constitute
Additional Company Contributions shall be held on an unallocated basis until
allocated to Participants' Deferral Accounts as provided under this Plan. Prior
to allocation, these contributions shall not be adjusted for any income, gain or
loss thereon, which shall be allocated separately pursuant to Section 6.8.
(e) Company Contributions in the form of Additional Company
Contributions shall be allocated to Participants' Deferral Accounts so as to
allow the Plan to satisfy the nondiscrimination test set forth in Code section
401(k)(3)(A)(ii) and Section 5.2(c) of the Plan as applied to Elective Deferrals
and the nondiscrimination test set forth in Code section 401(m)(2) and Section
5.2A of the Plan as applied to Matching Contributions. Subject to the
limitations of Article XIII of this Plan and to the requirements of Code
sections 401(k)(3)(A)(ii) and 401(m)(2), effective January 1, 1992, Additional
Company Contributions shall be allocated as an equal dollar amount to Deferral
Accounts of all Eligible Employees who are Nonhighly Compensated Employees who
are taken into account in the nondiscrimination tests set forth in Sections 5.2
and 5.2A of the Plan.
(f) Company Contributions made pursuant to Section 6.8 shall not be
allocated to Accounts of Participants, but (together with any gains or income
thereon) shall be applied to defray Plan expenses.
(g) In no event shall amounts be allocated which would cause the
limitation on Annual Additions set forth in Article XIII to be exceeded.
(h) Company Contributions in the form of Company Stock shall be
allocated to the Accounts of the Participants based on the fair market dollar
value of such contributed Company Stock as determined under the provisions of
Section 6.6(b)(ii), unless a different valuation method shall be required under
the applicable Treasury Regulations.
6.6 VALUATION OF ACCOUNTS.
(a) As of each Valuation Date and 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
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shall value the assets of the Trust on the basis of fair market values.
(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, Suspended Participant and Alternate Payee 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 6.6 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) Company Stock allocated and credited to an Account or
subaccount, or to a separate fund within the Trust Fund in which Participants'
Accounts or subaccounts are invested as provided in Section 4.6, as well as
Company Stock held on an unallocated basis in the Trust Fund, shall be valued as
of the applicable Valuation Date, according to the following rules:
(A) Company Stock acquired by the Trust Fund with cash
shall initially be valued at the purchase price paid for such stock. On any
subsequent Valuation Date, such Company Stock, as well as all other Company
Stock held in, or contributed to, the Trust Fund, shall be valued in accordance
with Section 6.6(b)(ii)(B) or 6.6(b)(ii)(C) below, as applicable.
(B) If any Company Stock does not consist of securities
listed on a national securities exchange, or traded on a regular basis, as
determined by the Company, in the over-the-counter market, the fair market value
of such stock shall be determined using the formula price for such stock, as
described in the August 24, 1987 Prospectus for Science Applications
International Corporation (or the most recent prospectus that supersedes that
prospectus), on the applicable Valuation Date. The Plan Administrator may at any
time, and from time to time, change the method of determining the fair market
value of Company Stock, provided that the replacement method is consistent with
applicable provisions of ERISA and the Code. A Participant, Beneficiary or
Alternate Payee shall have no right to have a particular valuation method
applied (or continue to be applied) to his Account(s).
(C) If any Company Stock consists of securities listed on a
national securities exchange, fair market value of such Company Stock shall be
considered to be equal to
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the closing price of such Company Stock (as reported in the consolidated
transaction reporting system, or if not so reported, as reported on the
principal exchange market for such Company Stock by such exchange or on any
system sponsored by such exchange) on the trading day immediately preceding the
day applicable Valuation Date. If any Company Stock consists of securities
traded on a regular basis, as determined by the Company, in the over-the-counter
market, the fair market value of such Company Stock shall be considered to be
equal to the average between the high bid price and the low asked price quoted
by the automatic quotation system of a securities association registered under
the federal securities laws for the trading day immediately preceding the
applicable Valuation Date.
(iii) 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 based on the principal
amount of such contract or program, plus the amount of the guaranteed interest
or other increase in value which is paid or credited to the Plan pursuant to
such contract or program. The provisions of this subparagraph (iii) shall apply
to any investment alternative established under Section 4.6 which is invested in
such a contract or program.
(iv) 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, based on the unit or share value of
the regulated investment company on the applicable Valuation Date.
(c) The Company, the Plan Administrator and Trustee do not in any
manner or to any extent whatsoever warrant, guarantee or represent that the
value of a Participant's Account shall at any time equal or exceed the amount
previously contributed thereto, or that any valuation or accounting method or
practice will continue to be applied.
(d) ALLOCATION OF COMPANY STOCK RECEIVED PURSUANT TO STOCK
DIVIDENDS, SPLITS, RECAPITALIZATIONS, ETC. Any Company Stock received by the
Trustee as a stock split, dividend, or as a result of a reorganization or other
recapitalization of the Company shall be allocated as of the day on which the
stock is received by the Trustee in the same manner as the Company Stock to
which it is attributable is then allocated.
(e) ALLOCATION OF STOCK RIGHTS, WARRANTS OR OPTIONS.
(i) In the event any rights, warrants or options are issued on
Company Stock held in the Trust Fund, the Trustee
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shall exercise them for the acquisition of additional Company Stock as directed
by the Plan Administrator and to the extent that cash is then available in the
Trust Fund.
(ii) Any Company Stock acquired in this fashion shall be treated
as Company Stock purchased by the Trustee for the net price paid and shall be
allocated in the same manner as the funds used to purchase the Company Stock
were or would be allocated under the provisions of this Plan, pursuant to
directions of the Plan Administrator.
(iii) Any rights, warrants, or options on Company Stock which
cannot be exercised for lack of cash may, as directed by the Plan Administrator,
be sold by the Trustee and the proceeds allocated in accordance with the source
of the Company Stock with respect to which the rights, warrants or options were
issued.
(f) ALLOCATION OF CASH DIVIDENDS AND OTHER DISTRIBUTIONS RECEIVED IN
THE TRUST FUND.
(i) All cash dividends paid to the Trustee with respect to
Company Stock that has been allocated to an Account (if any) as of the date the
dividend is received by the Trustee shall be allocated to such Account. If the
Company Stock in the Trust Fund is held in a Company Stock fund as an investment
alternative pursuant to Section 4.6, such that Participants have an interest in
such Company Stock only indirectly through an interest in such fund held in a
subaccount, the cash dividends shall be allocated to such fund and shall
thereafter be invested in accordance with the investment practices of such fund,
and shall not be allocated directly to a Participant's Account or subaccount.
(ii) All cash dividends paid to the Trustee with respect to
unallocated Company Stock shall be allocated as provided in Section 6.8.
(iii) Other distributions received by the Trustee with respect
to investments of the Trust shall be allocated to the applicable fund(s)
established pursuant to Section 4.6, as prescribed by the Plan Administrator.
6.7 ALLOCATION OF FORFEITURES. The treatment of all amounts that are
forfeited by reason of the termination of the employment of a Participant shall
be governed by the following rules, effective January 1, 1992:
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(a) Forfeitures shall be used to offset the Company's obligation to
make Company Contributions and shall be allocated to the Matching Contribution
Accounts of those Participants who are entitled to receive an allocation of
Matching Contributions for the Plan Year in the manner prescribed in Section
6.5(b).
(b) No forfeitures shall be allocated to any Voluntary Account,
Rollover Account, Deferral Account or Alternate Payee Account.
(c) The forfeitures to be allocated shall be the amount of
forfeitures occurring since the next preceding allocation under this Section 6.7
and prior to the date prescribed by the Plan Administrator as the cutoff date
for such allocation, which shall be a date falling between the Anniversary Date
and the actual date in which the allocations are made. Such date may be changed
from time to time by the Plan Administrator.
(d) Pending allocation, forfeitures shall be accounted for in the
same manner as unallocated Company Contributions and shall not be adjusted for
income, gain or loss on such forfeitures. Such income, gain or loss shall be
considered and accounted for in the same fashion as income, gain or loss on
unallocated Company Contributions.
(e) For periods prior to January 1, 1991, forfeitures occurring
during a Plan Year were allocated in the same manner as Profit Sharing
Contributions.
6.8 ALLOCATION OF INCOME OR LOSS ON UNALLOCATED COMPANY CONTRIBUTIONS;
COMPANY CONTRIBUTIONS TO DEFRAY PLAN EXPENSES. At the time Company Profit
Sharing Contributions are allocated to Company Contribution Accounts, the
income, gain or loss on unallocated Company Contributions (determined as of the
end of the Plan Year preceding the actual allocation date), adjusted for any
Plan expenses paid or accrued as of the end of the Plan Year preceding the
actual allocation date (except for Plan expenses paid through Company
Contributions pursuant to the following sentence), shall be allocated to those
Participants eligible to receive an allocation of Profit Sharing Contributions
for such Plan Year, pro rata, according to each such Participant's entitlement
to such allocation. The Company may, in its discretion, make a Plan contribution
at any time for the purpose of defraying Plan expenses. Such contribution shall
be used to defray Plan expenses and shall not be allocated to Accounts of
Participants.
6.9 ACCOUNTING PROCEDURES. The Plan Administrator shall establish
accounting procedures for the purpose of making the allocations, valuations and
adjustments to Accounts provided for in this Article VI, as well as the
implementation of investment direction by Participants pursuant to Section 4.6
and transfers
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between or distributions from subaccounts established pursuant to
Section 4.6(b). 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 Article VI.
A Participant, Beneficiary or Alternate Payee 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, Beneficiary or
Alternate Payee, consistent with the requirements of Code section 411(d)(6).
6.10 SUSPENDED PARTICIPANTS. The Accounts of each Suspended Participant
shall be held intact and shall be valued on each Valuation Date as provided in
Section 6.6, but shall not receive any allocation of Company Contributions;
provided, however, that if the Participant completes, during the Plan Year in
which he becomes a Suspended Participant, 1,000 or more Hours of Service during
such Plan Year, his Company Contribution Account shall participate in the
allocation of Profit Sharing Contributions for such Plan Year, if he otherwise
would have been eligible for such an allocation.
6.11 ACCOUNTING FOR INTEREST OF AN ALTERNATE PAYEE. In the event an
Alternate Payee is awarded an interest in the Plan benefits of a Participant
pursuant to a qualified domestic relations order, as defined in Section 14.2,
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.
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ARTICLE VII
VESTING IN ACCOUNTS
7.1 NO VESTED RIGHTS EXCEPT AS HEREIN SPECIFIED. No Participant,
Beneficiary or Alternate Payee shall have any vested right or interest to, or
any right of payment of, any assets of the Trust Fund, except as provided in
this Plan. Neither the making of any allocations nor the crediting of any
amounts to the Account of a Participant, Beneficiary or Alternate Payee shall
vest in any Participant, Beneficiary or Alternate Payee any right, title, or
interest in or to any assets of the Trust Fund.
7.2 PARTICIPANT'S VESTED INTEREST--GENERAL RULE. Subject to the
provisions of Section 7.3, the Vested Interest of each Participant or Suspended
Participant in his Company Contribution Account shall be determined by
multiplying the balance in each such account as of the applicable date by the
Vested Percentage determined in accordance with the rules of Section 7.3 and the
following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
Less than three years 0
Three years but less than five years 50%
Five years or more 100%
7.3 VESTED PERCENTAGE--SPECIAL RULES. The determination of a
Participant's or Suspended Participant's Vested Percentage in his Company
Contribution Account shall be subject to the following special rules:
(a) During an Employee's period of employment with the Company or an
Affiliated Company (including periods while on an approved leave of absence or a
Maternity or Paternity absence), in the event of his death, Disability,
attainment of Normal Retirement Age, or a judicial declaration of his mental
incompetence, the Employee's Vested Percentage shall become one hundred percent
(100%), regardless of his number of Years of Service.
(b) For Plan Years beginning on and after January l, l992, the
following rules shall apply:
(i) If a Participant terminates employment with the Company
before becoming fully vested in his Accounts, and does not elect to receive a
distribution, the nonvested portion of his Accounts shall be forfeited at the
time the Participant incurs five consecutive Breaks in Service. If the
Participant resumes employment with the Company prior to incurring five
consecutive Breaks in Service, his Vested Percentage shall be determined as if
he had not terminated employment.
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(ii) If a Participant terminates employment with the Company
before becoming fully vested in his Company Contribution Account, and
voluntarily elects to receive a distribution at termination, the nonvested
portion of such Participant's Company Contribution Account shall be forfeited at
the time the Participant incurs a Break in Service.
(iii) If the nonvested portion of a Participant's Company
Contribution Account is forfeited as described in clause (ii), and the
Participant returns to employment prior to incurring five consecutive Breaks in
Service, the amount forfeited shall be restored to his Company Contribution
Account if the Participant repays to the Plan the full amount of the
distribution attributable to contributions made by the Company before the
earlier of (A) five years after the first date on which the Participant is
subsequently reemployed by the Company, or (B) the date on which the Participant
incurs five consecutive Breaks in Service. Reinstatement shall be made on the
last day of the Plan Year coinciding with or following the Employee's
Reemployment Commencement Date. Restoration shall be made from available funds
in the following order: first from forfeitures occurring on the last day of the
Plan Year coinciding with or following the Employee's Reemployment Commencement
Date, and second, from extraordinary contributions made by the Company.
(iv) If a Participant terminates employment with the Company
when the value of the Participant's Distributable Benefit is $3,500 or less, the
Participant shall receive such Distributable Benefit as soon as practicable
following termination of employment. The nonvested portion of such Participant's
Accounts shall be forfeited at the date the Participant receives distribution of
his Distributable Benefit. If the Participant resumes employment with the
Company prior to incurring five consecutive Breaks in Services, and repays the
amount distributed, as described in clause (iii), the nonvested portion shall be
restored as provided in clause (iii). If a Participant has no vested interest in
his Accounts, the Participant shall be deemed to have received a distribution of
his Distributable Benefit.
(v) An Employee's aggregate Years of Service shall not include
any Years of Service not required to be taken into account under this Section
7.3(b) by reason of any prior Break in Service.
(c) An Employee's Vested Percentage as of January 1, 1992 shall be
equal to his Vested Percentage determined as of December 31, 1991, under the
terms of the Amended and Restated Plan as in effect on September 30, 1989.
(d) In the event of a divestiture of an operating group or division,
the Plan Administrator or the Plan
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Administrator's designee may, in their sole discretion, determine, with respect
to Eligible Employees whose employment with the Company terminates as a result
of such divestiture and in lieu of the otherwise applicable determination of
Vested Percentage specified in this Article VII, (1) treat the Eligible
Employees' Vested Percentage as 100%, notwithstanding their Years of Service
prior to termination; or (2) treat such Eligible Employees as Suspended
Participants but credit Years of Service with the new employer to whom such
group is divested for purposes of determining such Eligible Employees' Vested
Percentage. Any such determination for a particular group or division shall not
bind the Company in any way with respect to any subsequent determination
relating to a different group or division. In the event of a subsequent
divestiture from the new employer, the Plan Administrator or the Plan
Administrator's designee may make a similar determination regarding vesting
acceleration.
7.4 NONFORFEITABLE ACCOUNTS. The Vested Interest of each Participant in
his Deferral Account, Voluntary Account and Rollover Contributions Account shall
at all times be 100 percent.
7.5 ALTERNATE PAYEE ACCOUNTS. In the event that an Alternate Payee is
awarded an interest in the Accounts of a Participant whose Vested Percentage in
any such Account is less than 100%, the Vested Percentage at any time of the
Alternate Payee in that portion of the Alternate Payee Account attributable to
such awarded interest shall be the same percentage as the Participant's Vested
Percentage in his Account at that time, determined in accordance with Sections
7.1 through 7.3.
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ARTICLE VIII
PAYMENT OF PLAN BENEFITS
8.1 RETIREMENT.
(a) A Participant who attains Normal Retirement Age shall be fully
vested in his Accounts and shall be entitled to receive a distribution of his
Distributable Benefit as of his Normal Retirement Date. The value of his
Distributable Benefit shall be based on the value of his Account as of the
Applicable Valuation Date.
(b) If the Participant continues in the service of the Company
beyond his Normal Retirement Date with the consent of the Company consistent
with applicable legal requirements, he shall continue to participate in the Plan
in the same manner as Participants who have not reached their Normal Retirement
Dates. At the subsequent termination of the Participant's employment with the
Company, his Distributable Benefit shall be based upon the value of his Accounts
as of the Applicable Valuation Date determined with reference to his date of
termination of employment as though that were his Normal Retirement Date.
8.2 OTHER TERMINATION OF EMPLOYMENT. A Participant who terminates
employment with the Company for any other reason other than retirement on or
after Normal Retirement Age, shall be entitled to receive a distribution of his
Distributable Benefit as of the first day of the month following his termination
of employment. A Participant shall be deemed to have terminated employment on
the date the Plan Administrator determines the Participant has incurred a
Disability. The value of his Distributable Benefit shall be based on the value
of his Account as of the Applicable Valuation Date.
8.3 WITHDRAWALS PRIOR TO AGE 59-1/2.
(a) A Participant shall be entitled to make a withdrawal from his
Voluntary Account at any time, subject to procedures established by the Plan
Administrator. Further, a Participant may withdraw amounts from his Deferral
Account that are attributable to Elective Deferrals, excluding all earnings
attributable thereto, upon incurring a financial hardship as determined by the
Plan Administrator. A withdrawal will be deemed made on account of financial
hardship only if the distribution is made on account of an immediate and heavy
financial need and is necessary to satisfy such financial need. Any withdrawal
made pursuant to this paragraph shall be made in accordance with rules
prescribed by the Plan Administrator that are consistent with Regulations under
Code section 401(k), and the following rules:
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(i) The determination of whether an Employee has an immediate
and heavy financial need is to be made by the Plan Administrator on the basis of
all relevant facts and circumstances. A distribution will be deemed to be made
on account of an immediate and heavy financial need of the Employee if the
distribution is on account of:
(A) Medical expenses of the Employee or his dependent(s)
not covered by insurance;
(B) Purchase of the principal residence for the Employee;
(C) Payment of tuition for the next twelve months of
post-secondary education for the Employee or his dependent(s);
(D) The need to prevent the eviction from the Employee's
principal residence or foreclosure on the mortgage of the Employee's principal
residence; or
(E) Other financial circumstances as the Plan Administrator
may determine, consistent with applicable regulations and rulings of the
Treasury Department and the Internal Revenue Service.
(ii) To receive a hardship withdrawal, the following
requirements must first be met by the applicant:
(A) The applicant must sign the forms provided by the Plan
Administrator and certify all information requested on that form;
(B) The applicant must have withdrawn, or must withdraw at
the same time that an application for hardship withdrawal is submitted, all
voluntary account balances in other Company retirement plans, if any;
(C) The applicant must have applied for all eligible loans
from this Plan or from any other Company retirement plans which permit
Participant loans;
(D) The hardship withdrawal normally cannot be less than
$500.00;
(E) The applicant must suspend all Elective Deferrals for
twelve (12) months after receiving the hardship withdrawal pursuant to rules
prescribed by the Plan Administrator; and
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(F) The maximum amount of Elective Deferrals for the
calendar year following the year of the hardship withdrawal will be the maximum
amount permitted by Code section 402(g) for such calendar year less the amount
of any Elective Deferrals made by the Participant during the calendar year in
which such Hardship withdrawal is made.
(iii) In the event that a Participant has elected to have his
Deferral Account invested in more than one investment alternative, then the
withdrawal shall be made pro rata from the subaccounts in which his Accounts are
invested.
(iv) The timing of the payment of the withdrawal shall be made
as soon as practicable following the request in accordance with the rules
established by the Plan Administrator.
(b) Upon fifteen (l5) days' written notice to the Plan
Administrator, and not more than once each Plan Year, a Participant may withdraw
up to one hundred percent (l00%) of the balance in his Voluntary Account as soon
as administratively feasible following submission of the withdrawal request.
(c) Any withdrawal made under this Section 8.3 shall be subject to
the restrictions on distributions set forth in Sections 8.5 through 8.7.
8.4 DISTRIBUTABLE BENEFIT.
(a) A Participant's "Distributable Benefit" shall be his entire
nonforfeitable interest in his Accounts. This amount shall be distributable in
the forms described in Section 8.5, subject to the restrictions on distributions
set forth in Sections 8.6 and 8.7.
(b) Reserved for Plan Modifications.
(c) For purposes of determining the amount of Distributable Benefit
that will be distributed to a Participant or Beneficiary pursuant to the rules
of this Article VIII, the value of the Participant's Accounts shall be
determined in accordance with rules prescribed by the Plan Administrator.
However, the value of the Participant's Accounts shall be increased or decreased
(as appropriate) by any contributions or distributions properly allocable under
the terms of this Plan to his Accounts that occurred on or after the Applicable
Valuation Date or for any other reason were not otherwise properly reflected in
the valuation of his Account on such Valuation Date.
(d) Neither the Plan Administrator, the Company, nor the Trustee
shall have any responsibility for any increase or decrease in the value of a
Participant's Account as a result of any valuation made under the terms of this
Plan after the date of his termination of employment and before the date
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of the distribution of his Distributable Benefit to him or his Beneficiary.
Also, neither the Plan Administrator, the Company, nor the Trustee shall have
any responsibility for failing to make any interim valuation of a Participant's
Accounts between the date of distribution to the Participant of his
Distributable Benefit and the immediately preceding Valuation Date, even though
the Plan assets may have been revalued in that interim for a purpose other than
to revalue the Accounts under this Plan.
8.5 OPTIONAL FORMS OF PAYMENT.
(a) Each Participant may elect, with his spouse's consent if
required and subject to (b) below, to receive his Distributable Benefit in one
of the following forms, or a combination of such forms, subject to the
provisions of Sections 8.6 and 8.7:
(i) A single sum.
(ii) l0 or l5 year certain and life annuity.
(iii) Contingent annuity--l0 year certain and life annuity.
(iv) Flexible installment refund annuity.
(v) Installment refund annuity.
(b) Any distribution not made in a single sum shall be made over a
term that does not exceed any one (or a combination) of the following periods:
(i) A period certain not extending beyond the life expectancy of
the Participant.
(ii) A period certain not extending beyond the joint life and
last survivor expectancy of the Participant and a designated Beneficiary.
(iii) The Participant's life.
(iv) The lives of the Participant and the Participant's
designated Beneficiary.
(b) With respect to any Participant whose Plan Accounts contain no
allocations made prior to January 1, 1992, the only available benefit option is
a single sum distribution.
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8.6 DIRECT ROLLOVER.
(a) This Section 8.6 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 8.6, 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 a "eligible retirement plan" specified by the distributee in a
direct rollover.
(b) "Eligible rollover distribution" means any distribution of all
or any portion of the balance of 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 section 401(a)(9)
of the Code; 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).
(c) "Eligible retirement plan" means an individual retirement
account described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
(d) 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 an Alternate
Payee are distributees with regard to the interest of the spouse or former
spouse.
(e) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
8.7 TIMING ON DISTRIBUTIONS.
(a) The Participant's ability to elect the form of payment (or the
Beneficiary's ability, in the event of the Participant's death before the date
on which distributions commence) shall be subject to the following rules:
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(i) Notwithstanding any other provision of the Plan, if the
value of the Participant's Distributable Benefit determined as of the
Participant's termination date does not exceed $3,500, and did not exceed $3,500
at the time of any prior distribution, the Participant (or Beneficiary in the
event of the Participant's death) shall receive a single sum distribution of the
entire value as soon as practicable following the Participant's termination of
employment. If the Participant's Distributable Benefit is zero, the Participant
shall be deemed to have received a distribution of his entire Distributable
Benefit. Such distribution shall not require consent by the Participant or the
Participant's spouse.
(ii) If the value of the Participant's Distributable Benefit
determined as of the date the Participant terminates employment exceeds $3,500,
or at the time of any prior distribution exceeded $3,500, no distribution shall
be made to the Participant during the Participant's lifetime without the
Participant's consent (and the consent of the Participant's spouse to the extent
that Section 8.7(b) applies) before the Participant attains Normal Retirement
Age, or distributions are made at the termination of the Plan. Unless the
Participant (and the Participant's spouse, if applicable) elects to defer
distribution to the extent authorized, payment shall be made or commence no
later than sixty (60) days after the close of the Plan Year in which (A) the
Participant attains Normal Retirement Age or (B) the Participant terminates
employment with the Company, whichever occurs later. The failure of a
Participant (and the Participant's spouse, if applicable) to consent to a
distribution prior to such time shall be deemed to be an election to defer
commencement of payment. In no event shall distributions to a Participant
commence later than the Participant's Required Payment Commencement Date.
(iii) If the value of the Participant's Distributable Benefit
determined as of the date of the Participant's death does not exceed $3,500 and
did not exceed $3,500 at the time of any prior distribution, the Participant's
benefits shall be distributed to the Participant's Beneficiary in a single sum
as soon as practicable following receipt of notice of the Participant's death.
(iv) If the Participant's Distributable Benefit determined as of
the date of the Participant's death exceeds $3,500, or at the time of any prior
distribution exceeded $3,500, the Participant's entire benefit shall be
distributed to the Participant's Beneficiary by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the extent
that the Beneficiary elects to receive distributions in accordance with
subparagraph (A) or (B) below.
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(A) If any portion of the Participant's benefits are
payable to a designated Beneficiary, distributions may be made over the life, or
over a period certain that does not exceed the life expectancy, of the
designated Beneficiary if distributions are made or commence on or before
December 31 of the calendar year which immediately follows the calendar year in
which the Participant dies. The Beneficiary may elect one of the annuity options
described in Section 8.4.
(B) If the designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to be made or begin in
accordance with subparagraph (A) above shall not be earlier than the later of
(l) December 31 of the calendar year immediately following the calendar year in
which the Participant dies and (2) December 31 of the calendar year in which the
Participant would have attained age seventy and one-half (70-1/2). The
Beneficiary may select from the annuity options described in Section 8.4.
(v) If the surviving spouse dies after the Participant, but
before payments to the spouse begin, the above provisions shall apply as if the
surviving spouse were the Participant.
(vi) Any amount paid to a child of the Participant shall be
treated as if it had been paid to the surviving spouse if the amount becomes
payable to the surviving spouse when the child reaches the age of majority.
(b) If the Participant dies after distributions under one of the
annuity options have begun, the remaining payments shall continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Participant's death.
(c) Distributions shall be made in accordance with proposed Treasury
Regulations section 1.401(a)(9), including the minimum distribution incidental
benefit rules of section 1.401(a)(9)-2 as they may be amended. If the
Participant's interest is distributed in a form other than a single sum, the
following minimum distribution rules shall apply on or after the Required
Payment Commencement Date.
(i) The amount to be distributed each year must be an amount
equal to the quotient obtained by dividing the Participant's Distributable
Benefit by the applicable life expectancy.
(ii) Payments will be calculated by use of the return multiples
in Treasury Regulations section l.72-9. The life expectancy of a surviving
spouse may be recalculated annually, but the life expectancy of any other
designated
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Beneficiary shall be calculated at the time payment first commences
without further recalculation.
8.8 DISTRIBUTION RULES. The provisions of Section 8.7(a) shall apply to
the Distributable Benefit of a Participant who does not elect, and has not
previously elected, a life annuity under the Plan. The provisions of Section
8.7(b) shall apply to the Distributable Benefit of a Participant who elects, or
has previously elected, a life annuity under the Plan.
(a)(i) Upon termination of employment with the Company for any
reason other than death, a Participant who does not elect to receive a life
annuity under the Plan shall be entitled to a single sum payment of his entire
Distributable Benefit. Payment shall be made in the form and at the time
determined under Sections 8.5 and 8.6.
(ii) If the Participant has a Distributable Benefit remaining at
his death, and has not elected a life annuity under the Plan, the Participant's
benefit shall be paid to the Participant's surviving spouse. If there is no
surviving spouse, or if the surviving spouse has consented in a manner
conforming to the requirements of a Qualified Election as described below to a
different Beneficiary designation, the Participant's Distributable Benefit shall
be paid to the Participant's designated Beneficiary. The Participant's spouse
may waive the spousal death benefit described above at any time, but the waiver
shall not be effective unless it satisfies the requirements for a Qualified
Election with respect to a Qualified Preretirement Survivor Annuity. The Plan
Administrator shall direct the Trustee to pay out the Participant's benefits in
the form elected by the Beneficiary subject to the provisions of Sections 8.5
and 8.6.
(b)(i) If a married Participant who has elected to receive a life
annuity under the Plan dies prior to his Annuity Starting Date, is survived by a
spouse and has not made a Qualified Election within the Election Period, the
Participant's Distributable Benefit shall be used to provide a Qualified
Preretirement Survivor Annuity providing for payments over the life of the
Participant's surviving spouse. The surviving spouse may elect to have
distributions commence within a reasonable period after the Participant's death
or to defer distribution as provided in Section 8.5.
(ii) If a married Participant is alive on his Annuity Starting
Date and does not make a Qualified Election within the Election Period, the
Participant's Distributable Benefit shall be used to provide a Qualified Joint
and Survivor Annuity providing payments over the joint life of the Participant
and the Participant's spouse and the life of the survivor. The Participant shall
designate on the form provided by the Plan
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Administrator the amount of the survivor annuity expressed as a percentage of
the amount payable during the joint life of the Participant and his spouse. The
Participant may elect to have such annuity distributed upon attainment of the
earliest date on which the Participant may elect to receive retirement benefits.
(iii) If the Participant is unmarried on his or her Annuity
Starting Date, or has certified that his or her spouse cannot be located, and
does not make a Qualified Election within the Election Period, the Participant's
Distributable Benefit shall be used to provide a single life annuity providing
payments over the life of the Participant.
(iv) Within the Applicable Notice Period, the Plan Administrator
shall provide each Participant with a written explanation of the terms and
conditions of the Qualified Preretirement Survivor Annuity and the Qualified
Joint and Survivor Annuity; the Participant's right to make, and the effect of,
an election to waive such annuities; the requirement for spousal consent to the
election to waive such annuities; the material features and optional forms of
benefit; and the right to make, and the effect of, a revocation of an election
to waive such annuities.
(v) If the Participant makes a Qualified Election within the
Election Period, the Participant, or the Participant's designated Beneficiary in
the event of the Participant's death, may elect to receive benefits in one of
the forms described in Section 8.5.
(c) The following definitions shall apply with respect to this
Section 8.8 in addition to the definitions in Article II of the Plan:
(i) "Annuity Starting Date" means the first day of the first
period for which an amount is payable as an annuity or in any other form.
(ii) "Applicable Notice Period" means:
(A) For a Qualified Preretirement Survivor Annuity,
whichever of the following periods ends last:
(1) The period beginning on the first day of the Plan
Year in which the Employee attains age thirty-two (32) and ending with the
close of the Plan Year preceding the Plan Year in which the Employee
attains age thirty-five (35).
(2) A reasonable period ending after the individual
becomes a Participant.
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(3) Notwithstanding clause (i), a reasonable period
ending after the date the Participant terminates employment with the
Company, if the Participant terminates employment before attaining age
thirty-five (35).
(B) For a Qualified Joint and Survivor Annuity, a
reasonable period which shall not be less than thirty (30) days nor more than
ninety (90) days before the Participant's Annuity Starting Date.
(C) For purposes of clause (ii), a "reasonable period"
shall be the end of the two-year period beginning one year before the described
event occurs and ending one year after that date. For purposes of clause (iii),
a "reasonable period" shall include the two-year period beginning one year
before the Participant terminates employment with the Participating Employer and
ending one year after such termination. If the Participant returns to employment
with the Participating Employer, the Applicable Notice Period shall be
redetermined.
(iii) "Election Period" means:
(A) For a Qualified Preretirement Survivor Annuity, the
period which begins on the first day of the Plan Year in which the Participant
attains age thirty-five (35) and ends on the date of the Participant's death. If
a Participant terminates employment with the Company before the first day of
such period, the Election Period shall begin on the date on which the
Participant terminates employment with the Company with respect to benefits
previously accrued. A Participant who will not yet attain age thirty-five (35)
as of the end the current Plan Year may make a special Qualified Election to
waive the Qualified Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan Year in which
the Participant will attain age thirty-five (35). Such election shall not be
valid unless the Participant receives a written explanation of the Qualified
Preretirement Survivor Annuity in terms similar to those described in subsection
(c) above. Qualified Preretirement Survivor Annuity coverage shall be reinstated
as of the first day of the Plan Year in which the Participant attains age
thirty-five (35). Any waiver after such date must meet the requirements of a
Qualified Election in order to be valid.
(B) For a Qualified Joint and Survivor Annuity, the
ninety-day period ending on the Participant's Annuity Starting Date.
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(iv) "Qualified Election" means an election by a Participant to
waive a Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor
Annuity which meets the following requirements:
(A) The Participant's spouse consents in writing to the
election.
(B) The election designates a specific Beneficiary,
including any class of Beneficiaries or contingent Beneficiaries, which may not
be changed without spousal consent, or the spouse expressly permits designations
by the Participant without further spousal consent.
(C) The election designates a form of benefit payment that
may not be changed without spousal consent (or the spouse expressly permits
designation by the Participant without any further spousal consent). If it is
established to the satisfaction of a Plan representative that there is no
spouse, or that the spouse cannot be located, a waiver shall be deemed a
Qualified Election.
(D) The spouse's consent acknowledges the effect of the
election.
(E) The spouse's consent is witnessed by a Plan
representative or a notary public.
(F) The Participant has received notice as described in
clause (iv) within the Applicable Notice Period. Any consent made by a spouse to
a Participant's election to waive an annuity shall be effective only with
respect to such spouse. A consent which permits designation by the Participant
without any requirement of further consent by such spouse shall acknowledge that
the spouse has the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the spouse voluntarily
elects to relinquish either or both such rights. A revocation of a prior waiver
may be made by a Participant without the consent of the spouse at any time
before the commencement of benefits. The number of revocations shall not be
limited.
(v) "Qualified Joint and Survivor Annuity" means an immediate
annuity for the life of the Participant with a survivor annuity for the life of
the spouse which is not less than 50 percent and not more than 100 percent of
the amount of the annuity that is payable during the joint life of the
Participant and the spouse. The percentage of the survivor annuity shall be 50
percent unless the Participant designates a different percentage.
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(vi) "Qualified Preretirement Survivor Annuity" means an
immediate annuity for the life of the surviving spouse of the Participant.
8.9 RESERVED FOR PLAN MODIFICATIONS.
8.10 DESIGNATION OF BENEFICIARY.
(a) Subject to the provisions of Section 8.10(e), each Participant
shall have the right to designate a Beneficiary or Beneficiaries to receive his
Distributable Benefit. This designation is to be made on the form prescribed by
and delivered to the Plan Administrator or its delegate.
(b) Subject to the provisions of Section 8.10(e), a Participant
shall have the right to change or revoke any such designation by filing a new
designation or notice of revocation with the Committee. Subject to the
provisions of Section 8.10(e), no notice to any Beneficiary nor consent by any
Beneficiary shall be required to effect any such change or revocation.
(c) If a deceased Participant shall have failed to designate a
Beneficiary, if the Plan Administrator shall be unable to locate a designated
Beneficiary after reasonable efforts have been made, if for any reason the
designation shall be legally ineffective, or if the Beneficiary shall have
predeceased the Participant (and no legally effective contingent Beneficiary
shall have been named), any distribution required to be made under the
provisions of this Plan shall be payable to the Participant's estate (except as
provided in Section 8.10(e)), and the estate shall be considered the Beneficiary
under this Plan.
(d) In the event that the deceased Participant was not a resident of
Virginia at the date of his death, the Plan Administrator, in its discretion,
may require the establishment of ancillary administration in Virginia. In the
event that a Participant shall predecease his Beneficiary and on the subsequent
death of the Beneficiary a remaining distribution is payable under the
applicable provisions of this Plan, the distribution shall be payable to the
Beneficiary's estate.
(e) If a Participant shall be married at the time of his death, the
designation by the Participant under Section 8.10 of a person other than the
current spouse as his Beneficiary shall not take effect (and the entire
Distributable Benefit shall be paid to such spouse) (i) unless the spouse of the
Participant consents in writing to such designation, and the spouse's consent
acknowledges the effect of such designation and is witnessed by the Plan
Administrator (or its delegate), a notary, or (ii) unless it is established to
the satisfaction of the Plan Administrator that such consent is not required
because there is no spouse, because the spouse cannot be located, or because of
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such other circumstances as the Secretary of the Treasury may by regulations
prescribe.
(f) The Company, the Plan Administrator and the Trustee shall have
no duty to determine whether a Beneficiary designation or spousal consent made
pursuant to this Section 8.10 was an informed designation or consent or was
freely given, and shall be entitled to rely upon the Beneficiary form filed with
the Plan Administrator, as well as such other documents as may be required
pursuant to Section 8.13, and shall be under no duty or obligation to protect
the rights of a spouse or former spouse of a Participant, except as may be
required by law.
8.11 FACILITY OF PAYMENT. If any payee under the Plan is a minor or if
the Plan Administrator reasonably believes that any payee is legally incapable
of giving a valid receipt and discharge for any payment due him, the Plan
Administrator may have the payment, or any part thereof, made to the person (or
persons or institution) whom it reasonably believes is caring for or supporting
the payee, unless it has received due notice of claim therefor from a duly
appointed guardian or committee of the payee. Any payment shall be a payment
from the Accounts of the payee and shall, to the extent thereof, be a complete
discharge of any liability under the Plan to the payee.
8.12 DISTRIBUTION TO ALTERNATE PAYEES. If an Alternate Payee is entitled
to a distribution of benefits from this Plan pursuant to a qualified domestic
relations order, as defined in Section 14.2, the benefits payable to such
Alternate Payee shall be distributed pursuant to such qualified domestic
relations order under rules or procedures described by the Plan Administrator.
If permitted by applicable law and regulations, the Plan Administrator may
require or permit immediate distribution of such benefits to an Alternate Payee
at any time following the determination by the Plan Administrator that such an
order is a qualified domestic relations order. In the event that an Alternate
Payee dies prior to receipt of the amounts due him from an Alternate Payee
Account, such amounts shall be distributed to the estate of the Alternate Payee
as soon as practicable following the date such amounts would have been
distributed to such Alternate Payee.
8.13 ADDITIONAL DOCUMENTS.
(a) The Plan Administrator or Trustee, or both, may require (and
rely upon) the execution and delivery of such documents, papers and receipts as
the Plan Administrator or Trustee may determine necessary or appropriate in
order to establish the fact of death of the deceased Participant and of the
right and identity of any Beneficiary or other person or persons claiming any
benefits under this Article VIII.
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(b) The Plan Administrator or the Trustee, or both, may, as a
condition precedent to the payment of death benefits hereunder, require an
inheritance tax release and/or such security as the Plan Administrator or
Trustee, or both, may deem appropriate as protection against possible liability
for state or federal death taxes attributable to any death benefits.
8.14 TRANSFER OF DISTRIBUTED COMPANY STOCK--RIGHT OF FIRST REFUSAL FOR
THE COMPANY AND THE PLAN.
(a) Any Company Stock distributed from the Plan which is Class B
Common stock shall be subject to a right of first refusal by the Company. The
terms and conditions of the right of first refusal shall be those applied to
Class A Common stock by the Company's Certificate of Incorporation, as in effect
from time to time.
(b) Any Company Stock distributed from the Plan, in addition to the
right of first refusal imposed by the Company's Certificate of Incorporation,
shall also be subject to a right of first refusal in favor of the Plan,
subordinate to that of the Company, the terms and conditions of which (except
for the right being in favor of the Plan) shall be the same as the Company's
right of first refusal, modified as necessary to comply with applicable Treasury
regulations.
(c) In administering the rights of first refusal with respect to
such Company Stock, the rights shall be modified, as necessary, to comply with
applicable Treasury regulations.
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ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN;
VOTING AND OTHER RIGHTS OF COMPANY STOCK
9.1 PLAN ADMINISTRATION.
(a) The Plan Administrator has authority to control and manage the
operation and administration of the Plan.
(b) For purposes of ERISA section 402(a), the Plan Administrator,
the Trustee and any Investment Manager appointed pursuant to Section 9.3 shall
be Named Fiduciaries of this Plan.
(c) The Plan Administrator shall cause to be maintained in its
office for the purpose of inspection an accurate schedule listing the names of
all persons from time to time serving as members of any committee to which the
Plan Administrator delegates its duties and all Named Fiduciaries of the Plan.
9.2 PLAN ADMINISTRATOR POWERS. The Plan Administrator shall have all
powers necessary to supervise the administration of the Plan and control its
operations. In addition to any powers and authority conferred on the Plan
Administrator elsewhere in the Plan or by law, the Plan Administrator shall
have, by way of illustration but not by way of limitation, the following powers
and authority:
(a) To allocate fiduciary responsibilities (other than trustee
responsibilities) among the Named Fiduciaries and to designate one or more other
persons to carry out fiduciary responsibilities (other than trustee
responsibilities). However, no allocation or delegation under this Section
9.2(a) shall be effective until the person or persons to whom the
responsibilities have been allocated or delegated agree to assume the
responsibilities. The term "trustee responsibilities" as used herein shall have
the meaning set forth in ERISA section 405(c). The preceding provisions of this
Section 9.2(a) shall not limit the authority of the Plan Administrator to
appoint one or more Investment Managers in accordance with Section 9.3:
(b) To designate agents to carry out responsibilities relating to
the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical, accounting, clerical,
administrative and ministerial and other assistance as it may deem appropriate
in carrying out the provisions of this Plan, including one or more persons to
render advice with regard to any responsibility any Named Fiduciary or any other
fiduciary may have under the Plan.
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(d) To establish rules and regulations from time to time for the
conduct of the Plan Administrator's business and the administration and
effectuation of this Plan.
(e) To administer, interpret, construe and apply this Plan and the
Plan's claims procedure and to decide all questions which may arise or which may
be raised under this Plan by any employee, Participant, former Participant,
Beneficiary, Alternate Payee or other person whatsoever, including but not
limited to all questions relating to eligibility to participate in the Plan, the
amount of service of any Participant, and the amount of benefits to which any
Participant or his Beneficiary may be entitled on or after the Effective Date
hereof.
(f) To determine the manner in which the assets of this Plan, or any
part thereof, shall be distributed.
(g) To direct the Trustee, in writing, from time to time, to invest
and reinvest the Trust Fund, or any part thereof, or to purchase, exchange, or
lease any property, real or personal, which the Plan Administrator may
designate. This shall include the right to direct the investment of all or any
part of the Trust in any one security or any one type of securities permitted
hereunder. Among the securities which the Plan Administrator may direct the
Trustee to purchase are "employer securities" as defined in Code section 409(1)
or any successor statute thereto.
(h) To select alternative investment options from which Participants
may select from in determining investment of their Accounts, and to establish
rules and procedures regarding such investment options.
(i) To satisfy accounting, auditing, record keeping, insurance,
bonding and reporting and disclosure requirements.
(j) To perform or cause to be performed such further acts as it may
deem to be necessary, appropriate or convenient in the efficient administration
of the Plan.
Any action taken in good faith by the Plan Administrator in the
exercise of authority conferred upon it by this Plan shall be conclusive and
binding upon the Participants and their Beneficiaries and any Alternate Payees.
All discretionary powers conferred upon the Plan Administrator shall be
absolute, but shall be exercised in a uniform and nondiscriminatory manner.
9.3 INVESTMENT MANAGER.
(a) The Plan Administrator, by action reflected in the minutes
thereof, may appoint one or more Investment Managers, as
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defined in ERISA section 3(38), to manage all or a portion of the assets of the
Plan.
(b) An Investment Manager shall discharge its duties in accordance
with applicable law and in particular in accordance with ERISA section
404(a)(1).
(c) An Investment Manager, when appointed, shall have full power to
manage the assets of the Plan for which it has responsibility, and neither the
Company nor the Plan Administrator shall thereafter have any responsibility for
the management of those assets, except to the extent such power or
responsibility shall have been reserved to the Company or Plan Administrator in
the documents governing the relationship between or among the Plan, the Company
and the Investment Manager.
9.4 PERIODIC REVIEW.
(a) At periodic intervals, not less frequently than annually, the
Plan Administrator shall review the long-run and short-run financial needs of
the Plan and shall determine a funding policy for the Plan consistent with the
objectives of the Plan and the minimum funding standards of ERISA, if
applicable. In determining the funding policy, the Plan Administrator shall take
into account, at a minimum, not only the long-term investment objectives of the
Trust Fund consistent with the prudent management of the assets thereof, but
also the short-run needs of the Plan to pay benefits.
(b) All actions taken by the Plan Administrator with respect to the
funding policy of the Plan, including the reasons therefor, shall be fully
reflected in the minutes of the Plan Administrator's actions.
9.5 RESERVED FOR PLAN MODIFICATIONS.
9.6 RESERVED FOR PLAN MODIFICATIONS.
9.7 RESERVED FOR PLAN MODIFICATIONS.
9.8 RESERVED FOR PLAN MODIFICATIONS.
9.9 RESERVED FOR PLAN MODIFICATIONS.
9.10 RELIANCE UPON DOCUMENTS AND OPINIONS.
(a) The Plan Administrator, the Board of Directors, the Company and
any Employee of the Company delegated under the provisions hereof to carry out
any fiduciary responsible under the Plan ("Delegated Fiduciary"), shall be
entitled to rely upon any tables, valuations, computations, estimates,
certificates and reports furnished by any consultant, or firm or corporation
which
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employs one or more consultants, upon any opinions furnished by legal counsel,
and upon any reports furnished by the Trustee. The Plan Administrator, the Board
of Directors, the Company and any Delegated Fiduciary shall not be liable in any
manner whatsoever for anything done or action taken or suffered in reliance from
any such consultant or firm or corporation which employs one or more
consultants, trustee, or counsel.
(b) Any and all such things done or actions taken or suffered by the
Plan Administrator, the Board of Directors, the Company and any Delegated
Fiduciary shall be conclusive and binding on all Employees, Participants,
Beneficiaries, Alternate Payees and any other persons whomsoever, except as
otherwise provided by law.
(c) The Plan Administrator and any Delegated Fiduciary may, but are
not required to, rely upon all records of the Company with respect to any matter
or thing whatsoever, and may likewise treat those records as conclusive with
respect to all Employees, Participants, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law.
9.11 REQUIREMENT OF PROOF. The Plan Administrator or the Company may, in
its (or their) sole discretion, require satisfactory proof of any matter under
this Plan from or with respect to any Employee, Participant, Beneficiary or
Alternate Payee, and no benefits under this Plan need be paid until the required
proof shall be furnished.
9.12 RESERVED FOR PLAN MODIFICATIONS.
9.13 MULTIPLE FIDUCIARY CAPACITY. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
9.14 LIMITATION ON LIABILITY.
(a) Except as provided in Part 4 of Title I of ERISA, neither the
Company, the Board of Directors (or any member thereof), nor the Plan
Administrator shall be subject to any liability with respect to his duties under
the Plan unless he or it acts fraudulently or in bad faith.
(b) Neither the Company, the Board of Directors (or any member
thereof) nor the Plan Administrator shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any other fiduciary or any
person to whom fiduciary responsibilities have been allocated or delegated,
except as provided in Part 4 of Title I of ERISA.
(c) Neither the Company, the Board of Directors (or any member
thereof), the Plan Administrator, nor the Trustee
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shall be liable to the extent relief from liability is provided pursuant to
ERISA section 404(c).
(d) The Company in this Plan document does not intend to create
additional fiduciary liability, or to characterize actions or responsibilities
as fiduciary in nature, beyond that required by ERISA or other applicable law.
9.15 INDEMNIFICATION.
(a) To the extent permitted by law, the Company hereby indemnifies
each member of the Board of Directors, and any Employee of the Company with
duties under the Plan, against expenses (including any amount paid in
settlement) reasonably incurred by him in connection with any claims against him
by reason of his conduct in the performance of his duties under the Plan, except
in relation to matters as to which he acted fraudulently or in bad faith in the
performance of such duties. The preceding right of indemnification shall pass to
the estate of such a person.
(b) The preceding right of indemnification shall be in addition to
any other right to which the Board of Directors or other person may be entitled
as a matter of law or otherwise.
9.16 ALLOCATION OF FIDUCIARY RESPONSIBILITY.
(a) ERISA section 405(c) permits the division, allocation and
delegation among Plan fiduciaries of the fiduciary responsibilities owed to the
Plan Participants and Beneficiaries. Under this concept, each fiduciary,
including a Named Fiduciary, is accountable only for its own functions, except
to the extent of his co-fiduciary liability under ERISA section 405. It is the
intent of the Company in establishing this Plan to comply with Section 405(c)
and to have the limitation on liability set forth in ERISA section 405(c)(2)
apply to the maximum extent allowed by law.
(b) Pursuant to ERISA section 405(c), the authority to control and
manage the operation and administration of the Plan is allocated to the Plan
Administrator. Except to the extent expressly provided to the contrary in this
Plan document, and the Trust Agreement, the responsibilities allocated to the
Plan Administrator include:
(i) Responsibilities identified as Plan Administrator authority
and powers in Sections 9.2(a) - (j); and
(ii) Responsibilities identified elsewhere in this Plan document
as applicable to the Plan Administrator.
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(c) The Board of Directors is allocated the following
responsibilities, acting with the advice and assistance of the Plan
Administrator:
(i) Appointing the Trustee;
(ii) Adopting Plan amendments;
(iii) Determining the amount of Company Contributions;
(iv) Determining whether to terminate the Plan or suspend
contributions thereto;
(v) Determining which Affiliated Companies shall participate in
the Plan, and the conditions on which any such Affiliated Company shall
participate;
(vi) Determining the form of Company Contributions; and
(vii) Performing those duties specifically allocated to it
elsewhere in this Plan document.
(d) The Trustee shall have only those responsibilities which have
been specifically allocated to it under this Plan document and related Trust
Agreement, plus any "trustee responsibilities," under ERISA section 405(c),
which may not legally be allocated to another person or fiduciary. Any
Investment Manager appointed pursuant to Section 9.3 may be granted exclusive
authority and discretion to manage and control all or any portion of the assets
of the Plan, subject to such limitations as may be provided in the documents
governing the relationship between or among the Plan, the Company (if
applicable) and the Trustee or Investment Manager.
9.17 PROHIBITION AGAINST CERTAIN ACTIONS.
(a) To the extent prohibited by law, in administering this Plan the
Plan Administrator shall not discriminate in favor of any class of Employees and
particularly it shall not discriminate in favor of Highly Compensated Employees.
(b) The Plan Administrator shall not cause the Plan to engage in any
transaction that constitutes a nonexempt prohibited transaction under Code
section 4975(c) or ERISA section 406(a).
(c) All individuals who are fiduciaries with respect to the Plan (as
defined in ERISA section 3(21)) shall discharge their fiduciary duties in
accordance with applicable law, and in
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particular, in accordance with the standards of conduct contained in ERISA
section 404.
9.18 BONDING AND INSURANCE.
(a) Except as provided in ERISA section 412, as may be required
under any other applicable law, or as may be required by the Plan Administrator
in its sole discretion, no bond or other security shall be required by any
member of any fiduciary under this Plan.
(b) For purposes of satisfying its indemnity obligations under
Section 9.15, the Company may (but need not) purchase and pay premiums for one
or more policies of insurance. However, this insurance shall not release the
Company of its liability under the indemnification provisions.
9.19 VOTING AND OTHER RIGHTS OF COMPANY STOCK.
(a) All voting rights of Company Stock held in the Trust Fund shall
be exercised in accordance with the following provisions:
(i) Each Participant (which term shall include, for purposes of
this Section 9.19, Beneficiaries and Alternate Payees having an interest in an
Account or fund holding Company Stock) shall be given the opportunity to
instruct the Trustee confidentially on a form prescribed and provided by the
Company as to how to vote those shares (including fractional shares) of Company
Stock allocated to his Account(s) under the Plan (directly or indirectly through
an interest in a Company Stock fund) on the date immediately preceding the
record date for the meeting of shareholders of the Company. The Trustee shall
not divulge to the Company the instructions of any Participant. The Company may
require verification of the Trustee's compliance with such confidential voting
instructions by an independent auditor elected by the Company.
(ii) All Participants entitled to direct such voting shall be
notified by the Plan Administrator (or the Company, pursuant to its normal
communications with shareholders) of each occasion for the exercise of these
voting rights within a reasonable time (but not less than the time period that
may be required by any applicable state of federal law) before these rights are
to be exercised. The notification shall include all information distributed by
the Company to other shareholders regarding the exercise of such rights.
(iii) The Participants shall be so entitled to direct the voting
of fractional shares (or fractional rights to shares). However, the Plan
Administrator may, to the extent possible, direct the Trustee to vote the
combined fractional shares (or
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fractional rights to shares) so as to reflect the aggregate direction of all
Participants giving directions with respect to fractional shares (or fractional
rights to shares).
(iv) In the event that a Participant shall fail to direct the
Trustee, in whole or in part, as to the exercise of voting rights arising under
any Company Stock allocated to his Account, then these voting rights, together
with voting rights as to shares of Company Stock which have not been allocated,
shall be exercised by the Trustee in the same proportion as the number of shares
of Company Stock for which the Trustee has received direction in such matter
(e.g., to vote for, against or abstain from voting on a proposal, or to grant or
withhold authority to vote for a director or directors), and the Trustee shall
have no discretion in such matter.
(v) Except as provided in paragraph (b) below, all rights (other
than voting rights) of Company Stock held in the Trust Fund shall be exercised
in the same manner and to the same extent as provided above with respect to the
voting rights of the Company Stock, subject to the rules prescribed by the Plan
Administrator, which rules, among other matters, may prescribe that no action
shall be taken with respect to shares as to which no direction is received from
Participants. The Trustee shall have no discretion with respect to the exercise
of any such rights.
(vi) Neither the Plan Administrator nor the Trustee shall make
any recommendation to any Participant regarding the exercise of the
Participant's voting rights or any other rights under the provisions of this
Section 9.19, nor shall the Plan Administrator or Trustee make any
recommendation as to whether any such rights should or should not be exercised
by the Participant.
(b) All responses to tender and exchange for Company Stock offers
shall be made in accordance with the following provisions:
(i) Each Participant shall be given the opportunity, to the
extent that shares of Company Stock are allocated to his Account, to direct the
Trustee in writing as to the manner in which to respond to a tender or exchange
offer with respect to Company Stock, and the Trustee shall respond in accordance
with the instructions so received. The Trustee shall not divulge to the Company
the instructions of any Participant. The Plan Administrator shall utilize its
best efforts to timely distribute or cause to be distributed to each Participant
such information as will be distributed to shareholders of the Company in
connection with any such tender or exchange offer, together with a form
addressed to the Trustee requesting confidential instructions on whether or not
such shares will be tendered or
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exchanged. If the Trustee shall not receive timely direction from a Participant
as to the manner in which to respond to such a tender or exchange offer, the
Trustee shall not tender or exchange any shares of Company Stock with respect to
which such Participant has the right of direction, and the Trustee shall have no
discretion in such matter.
(ii) Unallocated shares of Company Stock and shares of Company
Stock held by the Trustee pending allocation to Participants' Accounts shall be
tendered or exchanged (or not tendered or exchanged) by the Trustee in the same
proportion as shares with respect to which Participants have been given the
opportunity to direct the Trustee pursuant to paragraph (i) above are tendered
or exchanged, and the Trustee shall have no discretion in such matter.
9.20 PLAN EXPENSES.
(a) Except as provided in Section 9.20(b), all expenses incurred in
the establishment, administration and operation of the Plan, to the extent these
expenses are not paid by the Company, shall be charged to the Trust Fund and
accounted for pursuant to the provisions of Article VI.
(b) Costs or expenses which are particular to a specific asset or
group of assets in the Trust Fund, such as interest and brokerage charges which
are included in the cost of securities purchased by the Trustee (or charged to
proceeds in the case of sales), as determined by the Plan Administrator, shall
be charged or allocated in a fair and equitable manner to the Accounts,
subaccounts or funds to which those assets are allocated pursuant to rules
prescribed by the Plan Administrator.
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ARTICLE X
MERGER OF COMPANY: MERGER OF PLAN
10.1 EFFECT OF REORGANIZATION OR TRANSFER OF ASSETS. In the event of a
consolidation, merger, sale, liquidation, or other transfer of the operating
assets of the Company to any other company, the ultimate successor or successors
to the business of the Company shall automatically be deemed to have elected to
continue this Plan in full force and effect, in the same manner as if the Plan
had been adopted by resolution of its board of directors, unless the
successor(s), by resolution of its board of directors, shall elect not to so
continue this Plan in effect, in which case the Plan shall automatically be
deemed terminated as of the applicable effective date set forth in the board
resolution.
10.2 MERGER RESTRICTION. This Plan and its related Trust shall not in
whole or in part merge or consolidate with, or transfer its assets or
liabilities to any other plan or trust unless each affected Participant in this
Plan would receive a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
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ARTICLE XI
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS
11.1 PLAN TERMINATION.
(a) Subject to the following provisions of this Section 11.1, the
Company may terminate the Plan and the Trust Agreements at any time and for any
reason by an instrument in writing executed in the name of the Company by an
officer or officers duly authorized to execute such an instrument, and delivered
to the Trustee. The Company expressly disavows any contractual obligation,
implied or otherwise, to continue this Plan.
(b) The Plan and Trust Agreements may terminate if the Company
merges into any other corporation, if as a result of the merges the entity of
the Company ceases, and the Plan is terminated pursuant to the rules of Section
10.1.
(c) Upon and after the effective date of the termination, the
Company shall make no further contributions under the Plan and no contributions
need be made by the Company applicable to the Plan Year in which the termination
occurs, except as may otherwise be required by law.
(d) The rights of all affected Participants to benefits accrued to
the date of termination of the Plan, to the extent funded as of the date of
termination, shall automatically become fully vested as of that date.
11.2 DISCONTINUANCE OF CONTRIBUTIONS.
(a) The Company by resolution of its Board of Directors may
discontinue contributions to the Plan at any time and for any reason in the
Board's sole discretion. Upon and after the effective date of this
discontinuance, the Company shall make no further Company contributions under
the Plan and no Company contributions need be made by the Company with respect
to the Plan Year in which the discontinuance occurs, except as may otherwise be
required by law.
(b) The discontinuance of Company contributions on the part of the
Company shall not terminate the Plan as to the funds and assets then held by the
Trustee, or operate to accelerate any payments of distributions to or for the
benefit of Participants, Beneficiaries or Alternate Payees, and the Trustee
shall continue to administer the Trust Fund in accordance with the provisions of
the Plan until all of the obligations under the Plan shall have been discharged
and satisfied.
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(c) However, if this discontinuance of Company contributions shall
cause the Plan to lose its status as a qualified plan under Code section 401(a),
the Plan shall be terminated in accordance with the provisions of this Article
XI.
(d) On and after the effective date of a discontinuance of Company
contributions, the rights of all affected participants to benefits accrued to
that date, to the extent funded as of that date, shall automatically become
fully vested as of that date.
11.3 RIGHTS OF PARTICIPANTS. In the event of the termination of the Plan,
for any cause whatsoever, all assets of the Plan, after payment of expenses,
shall be used for the exclusive benefit of Participants and their Beneficiaries
and no part thereof shall be returned to the Company, except as provided in
Section 4.7 of this Plan or as otherwise permitted by law.
11.4 TRUSTEE'S DUTIES ON TERMINATION.
(a) Upon termination of the Plan, the Plan Administrator shall
determine whether to continue the Trust, to distribute the assets of the Trust
to Participants, Beneficiaries and Alternate Payees, to transfer the assets in
the Trust to another qualified plan maintained by the Company, or to take other
action consistent with applicable law.
(b) If so directed by the Plan Administrator upon termination of
this Plan, the Trustee shall proceed as soon as possible to reduce all of the
assets of the Trust Fund to cash and/or common stock and other securities in
such proportions as the Plan Administrator shall determine (after approval by
the Internal Revenue Service, if necessary or desirable, with respect to any
portion of the assets of the Trust Fund held in common stock or securities of
the Company). After first deducting the estimated expenses for liquidation and
distribution chargeable to the Trust Fund, and after setting aside a reasonable
reserve for expenses and liabilities (absolute or contingent) of the Trust, the
Plan Administrator shall make the allocations required under Article VI, where
applicable, with the same effect as though the date of completion of liquidation
were an Anniversary Date of the Plan. Following these allocations, the Trustee
shall promptly, after receipt of appropriate instructions from the Plan
Administrator, distribute in accordance with such instructions to each former
Participant, or Beneficiary or Alternate Payee, a benefit equal to the amount
credited to his Accounts as of the date of completion of the liquidation.
(c) The Trustee and the Plan Administrator shall continue to
function as such for such period of time as may be necessary for the winding up
of this Plan and for the making of distributions in accordance with the
provisions of this Plan.
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11.5 PARTIAL TERMINATION.
(a) In the event of a partial termination of the Plan within the
meaning of Code section 411(d)(3), the interest of affected Participants in the
Trust Fund, as of the date of the partial termination, shall become
nonforfeitable as of that date.
(b) That portion of the assets of the Plan affected by the partial
termination shall be used exclusively for the benefit of the affected
Participants and their Beneficiaries, and no part thereof shall otherwise be
applied.
(c) With respect to Plan assets and Participants affected by a
partial termination, the Plan Administrator and the Trustee shall follow the
same procedures and take the same actions prescribed in this Article XI in the
case of a total termination of the Plan.
11.6 FAILURE TO CONTRIBUTE. The failure of the Company to contribute to
the Trust in any year, shall not, in and of itself, constitute a complete
discontinuance of contributions to the Plan.
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ARTICLE XII
APPLICATION FOR BENEFITS
12.1 APPLICATION FOR BENEFITS; CLAIMS PROCEDURE. The Plan Administrator
may require any person claiming benefits under the Plan to submit an application
therefor, together with such documents and information as the Plan Administrator
may require. In the case of any person suffering from a disability which
prevents the claimant from making personal application for benefits, the Plan
Administrator may, in its discretion, permit another person acting on his behalf
to submit the application.
12.2 ACTION ON APPLICATION.
(a) Within ninety (90) days following receipt of an
application and all necessary documents and information, the Plan
Administrator's authorized delegate reviewing the claim shall furnish the
claimant with written notice of the decision rendered with respect to the
application.
(b) In the case of a denial of the claimant's application, the
written notice shall set forth:
(i) The specific reasons for the denial, with reference to the
Plan provisions upon which the denial is based;
(ii) A description of any additional information or material
necessary for perfection of the application (together with an explanation why
the material or information is necessary); and
(iii) An explanation of the Plan's claim review procedure.
(c) A claimant who wishes to contest the denial of his application
for benefits or to contest the amount of benefits payable to him shall follow
the procedures for an appeal of benefits as set forth in Section 12.3 below, and
shall exhaust such administrative procedures prior to seeking any other form of
relief.
12.3 APPEALS.
(a)(i) A claimant who does not agree with the decision rendered with
respect to his application may appeal the decision to the Plan Administrator.
(ii) The appeal shall be made, in writing, within sixty-five
(65) days after the date of notice of the decision with respect to the
application.
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(iii) If the application has neither been approved nor denied
within the ninety-day period provided in Section 12.2 above, then the appeal
shall be made within sixty-five days (65) after the expiration of the ninety-day
period.
(b) The claimant may request that his application be given full and
fair review by the Plan Administrator. The claimant may review all pertinent
documents and submit issues and comments in writing in connection with the
appeal.
(c) The decision of the Plan Administrator shall be made promptly,
and not later than sixty (60) days after the Plan Administrator's receipt of a
request for review, unless special circumstances require an extension of time
for processing, in which case a decision shall be rendered as soon as possible,
but not later than one hundred twenty (120) days after receipt of a request for
review.
(d) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant with specific reference to the pertinent Plan
provisions upon which the decision is based.
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ARTICLE XIII
LIMITATIONS ON ANNUAL ADDITIONS
13.1 MAXIMUM ANNUAL ADDITIONS. The Annual Additions of a Participant
shall not exceed the maximum permissible amount specified in Code section
415(c)(1). To the extent necessary to reduce an excess amount in a Participant's
Accounts, the Plan Administrator may distribute such Participant's Elective
Deferrals to the Participant. Any such amounts shall be disregarded for purposes
of the nondiscrimination test in Section 5.2 of the Plan and for purposes of
determining whether the Participant has any Excess Deferrals for the Plan Year.
13.2 EFFECT OF PARTICIPATION IN OTHER COMPANY PLANS.
(a) If a Participant in this Plan is also a Participant in another
defined contribution plan maintained by the Company, 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 or Annual Additions is not exceeded.
(b) If a Participant in this Plan is also a Participant in a defined
benefit plan maintained by the Company, 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 1.0. The
Participant's benefit under such defined benefit plan shall be reduced, as
necessary to satisfy the requirement of the preceding sentence.
13.3 INCORPORATION BY REFERENCE OF CODE SECTION 415. In order 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 Company, to be paid.
13.4 NO CONTRACTUAL RIGHT TO EXCESS CONTRIBUTIONS. If, in order to comply
with the limitations of this Article XIII, it becomes necessary to reduce a
Participant's Account(s), to reduce or reallocate amounts previously allocated
to such Accounts, or otherwise, such action(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.
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ARTICLE XIV
RESTRICTION ON ALIENATION; PARTICIPANT LOANS
14.1 GENERAL RESTRICTIONS AGAINST ALIENATION. Except as otherwise
provided by law and as otherwise provided by Sections 14.2 and 14.3:
(a) The interest of any Participant, Beneficiary or Alternate Payee
in the income, benefits, payments, claims or rights hereunder, or in the Trust
Fund shall not in any event be subject to sale, assignment, hypothecation, or
transfer. Each Participant, Beneficiary or Alternate Payee is prohibited from
anticipating, encumbering, assigning, or in any manner alienating his or her
interest under the Trust Fund, and is without power to do so, except as may
otherwise be provided for in the Trust Agreement. The interest of any
Participant, Beneficiary or Alternate Payee shall not be liable or subject to
his debts, liabilities, or obligations, now contracted, or which may be
subsequently contracted. The interest of any Participant, Beneficiary or
Alternate Payee shall be free from all claims, liabilities, bankruptcy
proceedings, or other legal process now or hereafter incurred or arising; and
the interest or any part thereof, shall not be subject to any judgment rendered
against the Participant, Beneficiary or Alternate Payee.
(b) In the event any person attempts to take any action contrary to
this Article XIV, that action shall be void and the Company, the Plan
Administrator, the Trustee and all Participants, their Beneficiaries and
Alternate Payees may disregard that action and are not in any manner bound
thereby, and they, and each of them separately, shall suffer no liability for
any disregard of that action, and shall be reimbursed on demand out of the Trust
Fund for the amount of any loss, cost or expense incurred as a result of
disregarding or of acting in disregard of that action.
(c) The preceding provisions of this Section 14.1 shall be
interpreted and applied by the Plan Administrator in accordance with the
requirements of Code section 401(a)(13) as construed and interpreted by
authoritative judicial and administrative rulings and regulations.
14.2 NONCONFORMING DISTRIBUTIONS UNDER COURT ORDER. Benefits shall be
paid to an Alternate Payee if such payment is required pursuant to a qualified
domestic relations order, as defined in Code sections 401(a)(13) and 414(p).
In the event that the Plan receives a domestic relations order, the
Plan Administrator or its delegate shall promptly notify the Participant and any
Alternate Payee (i.e., spouse, former spouse, child or other dependent of a
participant who is
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recognized by a domestic relations order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to such
Participant) of the receipt of such order and the Plan's procedures for
determining the qualified status of such orders, and within a reasonable period
of time after receipt of such order, the Plan Administrator shall determine
whether such order is a qualified domestic relations order and notify the
Participant and each Alternate Payee of such determination. In determining the
qualified status of a domestic relations order and in administering
distributions under such qualified orders, the Plan Administrator shall follow
the following procedures:
(a) When the Plan receives a domestic relations order affecting Plan
benefits, the Plan Administrator or its delegate shall promptly notify each
person specified in the order as entitled to benefits under the Plan (using the
address(es) included in the domestic relations order) of the Plan procedure as
set forth herein (and as supplemented, if necessary, by Plan Administrator
procedures).
(b) The Plan shall permit an Alternate Payee to designate a
representative for receipt of copies of notices that are sent to the Alternate
Payee with respect to a domestic relations order.
(c) The Plan Administrator shall review any domestic relations order
to determine if it satisfies the requirements of being a qualified domestic
relations order. In making such determination, the Plan Administrator may seek
the advice of legal counsel to the Plan and may rely upon the legal opinion of
such counsel in determining the qualified status of domestic relations orders
and appropriate measures to resist or implement such orders. The Plan
Administrator may, but need not, enter an appearance on behalf of the Plan in
the domestic relations lawsuit, if any, and may pursue such legal remedies as
may be desirable for resisting unqualified orders or in modifying proposed
orders.
(d) During any period in which the issue of whether a domestic
relations order is a qualified domestic relations order is being determined by
the Plan Administrator, by a court of competent jurisdiction, or otherwise, the
Plan Administrator shall segregate in a separate account in the Plan or in an
escrow account the amounts, if any, which would have been payable to the
Alternate Payee during such period if the order had been determined to be a
qualified domestic relations order. If, within eighteen (18) months it is
determined that the order is not a qualified domestic relations order or the
issue as to whether such order is a qualified domestic relations order is not
resolved, than the Plan Administrator shall pay the segregated amounts (plus any
interest thereon) to the person or persons who would have been entitled to such
amounts if there had been no
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order. Any determination that an order is a qualified domestic relations order
which is made after the close of the aforementioned eighteen (18) month period
shall be applied prospectively only, should there be any undistributed benefits
of the Participant to which the order related.
(e) If the Plan Administrator or other fiduciary of the Plan acts in
accordance with the foregoing procedures in treating a domestic relations order
as being (or not being) a qualified domestic relations order or taking action to
segregate an account and ultimately make payment thereof in accordance with
subparagraph (d) above, then the Plan's obligations to the Participant and each
Alternate Payee shall be discharged to the extent of any payment made pursuant
to such act.
14.3 AUTHORIZED PARTICIPANT LOANS. The Plan Administrator may authorize a
loan from the Trust Fund to Participants (including, for this purpose, Suspended
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), 72(p), and any other provision of law
that is, or may become applicable. These rules shall provide that:
(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 to use
different percentages depending upon the amount of the loan, provided the
percentages are applicable to all Participants. The Plan Administrator may also
prescribe rules pursuant to which the portion of an individual's Account that is
invested in Company Stock (or a fund within the Trust to which Company Stock is
allocated) may (or may not) be taken into account in determining the maximum
loan he may obtain.
(c) The loans bear a reasonable rate of interest.
(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, provided that the
Participant's interest in his Accounts attributable to Company Stock may not be
used as collateral for a loan.
(e) If the loan, or a loan from another qualified retirement plan
maintained by the Company, is to be secured by
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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-day period before the Plan Administrator makes the loan. In the event the
Participant defaults on the loan and Participant's Accounts are security for the
loan, the Account balances will not be used to satisfy the loan obligation prior
to the earlier of the Participant's termination of employment with the Company
or an event resulting in a permissible distribution of his Accounts under the
Plan.
(f) The loan must state the date upon which the loan must be repaid,
which may not exceed five years (except in the case of loans used to acquire a
dwelling unit which, within a reasonable time after the loan is made, is to be
used as the principal residence of the Participant), 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 14.3, the Participant receiving such
a loan may be required to execute such documents as may be required by the Plan
Administrator 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. For purposes of this Section 14.3(h), the
Participant's vested interest and outstanding loan balances in all qualified
employer plans (as such term is defined in Code section 72(p)(3)) of the Company
shall be aggregated to determine whether a loan shall be permissible hereunder
and the maximum permissible amount thereof.
The decision as to whether or not any Participant Loans shall be made
under this Section 14.3 shall be made in 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 prior to distribution of his
Distributable Benefit, the amount payable to
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his 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 a Participant is subject to the requirements of Section
8.5(a), a loan shall be granted to a Participant only if the Participant obtains
the consent of his spouse, if any, to use his Accounts as security for the loan.
Spousal consent shall be obtained no earlier than the beginning of the 90-day
period that ends on the date the loan is to be secured. The consent must be in
writing, must acknowledge the effect of the loan and must be witnessed by a plan
representative or notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the Participant's Accounts are used for
renegotiation, extension, renewal or other revision of the loan.
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ARTICLE XV
PLAN AMENDMENTS
15.1 AMENDMENTS. The Board of Directors in its sole discretion may at
any time, and from time to time, amend the Plan by an instrument in writing
executed in the name of the Company by an officer or officers duly authorized to
execute such instrument, and delivered to the applicable Trustee. However,
except as provided in Section 15.2 no amendment shall be made at any time, the
effect of which would be:
(a) To cause any assets of the Trust Fund to be used for or diverted
to purposes other than providing benefits to the Participants and their
Beneficiaries, and defraying reasonable expenses of administering the Plan,
except as provided in Section 4.7 or as otherwise permitted by law;
(b) To have any retroactive effect so as to deprive any Participant
or Beneficiary of any benefit to which he would be entitled under this Plan if
his employment were terminated immediately before the amendment; or
(c) To increase the responsibilities or liabilities of a Trustee or
an Investment Manager without its written consent.
15.2 RETROACTIVE AMENDMENTS. The Plan may be amended prospectively or
retroactively (as provided in Code section 401(b)) to make the Plan conform to
any provision of ERISA, any Code provisions dealing with tax-qualified
employees' trusts, or any regulation under either.
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ARTICLE XVI
TOP-HEAVY PROVISIONS
16.1 APPLICATION. If the Plan is or becomes top heavy in any Plan Year,
the provisions of this Article XVI will supersede any conflicting provisions in
the Plan.
16.2 CRITERIA. The Plan shall be top heavy for any Plan Year if any of
the following conditions exist:
(a) The Top-Heavy Ratio for the Plan exceeds 60% and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group of
Plans.
(b) This Plan is part of a Required Aggregation Group of plans, but
not part of a Permissive Aggregation Group, and the Top-Heavy Ratio for the
group of plans exceeds 60%.
(c) This Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
16.3 DEFINITIONS. For purposes of this Article XVI, the following terms
shall have the following meanings:
(a) Determination Date: With respect to any Plan Year, (i) the
Determination Date shall be the last day of the preceding Plan Year, or (ii) in
the case of the first Plan Year of the Plan, the last day of such Plan Year.
(b) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employees) who, pursuant to the rules of Code section
416(i) and the Regulations thereunder, is or was:
(i) An officer of the Company having an annual Compensation
greater than 50% of the dollar limitation under Code section 415(b)(1)(A);
(ii) One of the ten Employees having annual Compensation from
the Company of more than the dollar limitation under Code section 415(c)(1)(A),
and owning (or considered as owning) under Code section 318 the largest interest
in the Company;
(iii) A 5% Owner of the Company; or
(iv) A 1% owner of the Company having annual Compensation from
the Company of more than $150,000.
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The determination period is the Plan Year containing the Determination Date and
the four preceding Plan Years.
(c) Permissive Aggregate Group: The Required Aggregation Group of
plans plus any other plan or plans of the Company that, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code sections 401(a)(4) and 410, and which are designated by the
Company to constitute a Permissive Aggregate Group.
(d) Required Aggregation Group: (1) Each plan of the Company in
which a Key Employee is a Participant or was a Participant at any time during
the determination period (regardless of whether the Plan has terminated) and (2)
any other qualified plan of the Company that enables a plan described in (1) to
meet the requirements of Code section 401(a)(4) or 410.
(e) Top-Heavy Ratio:
(i) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension) and the Company has not
maintained any defined benefit plan that during the five-year period ending on
the Determination Date has or has had accrued benefits, the Top-Heavy Ratio for
this Plan alone or for the Required Aggregation Group or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of which is the sum of the
account balances of Key Employees as of the Determination Date (including any
part of any account balance distributed in the five-year period ending on the
Determination Date), and the denominator of which is the sum of all account
balances (including any part of any account balance distributed in the five-year
period ending on the Determination Date), both computed in accordance with Code
section 416 and regulations thereunder. Both the numerator and denominator of
the Top-Heavy Ratio are adjusted to reflect any contributions not actually made
as of the Determination Date, but which is to be taken into account on that date
under Code section 416 and regulations thereunder.
(ii) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension) and the Company maintains or
has maintained one or more defined benefit plans that during the five-year
period ending on the Determination Date has or has had any accrued benefits, the
Top-Heavy Ratio for any Required or Permissive Aggregation Group, as
appropriate, is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans for all Key
Employees determined in accordance with (1) above and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date, and the denominator of which is the sum
of the account balances under the aggregated defined
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contribution plan or plans for all Participants determined in accordance with
(1) above, and the present value of accrued benefits under the defined benefit
plan or plans for all Participants as of the Determination Date, all determined
in accordance with Code section 416 and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator and denominator of
the Top-Heavy Ratio are adjusted for any distribution of an accrued benefit made
in the five-year period ending on the Determination Date. Solely for the purpose
of determining if the Plan, or any other plan included in a Required Aggregation
Group is top-heavy (within the meaning of Code section 416(g)), the accrued
benefit of an Employee other than a Key Employee shall be determined under (i)
the method, if any, that uniformly applies for accrual purposes under all plans
maintained by the Company and any Affiliated Companies 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 accrual rate of Code section
411(b)(1)(C).
(iii) For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the twelve-month
period ending on the Determination Date, except as provided in Code section 416
and regulations thereunder for the first and second Plan Years of a defined
benefit plan. The account balances and accrued benefits of a Participant (A) who
is not a Key Employee but who was a Key Employee in a prior year or (B) who has
not been credited with at least one Hour of Service with any Company maintaining
the Plan at any time during the five-year period ending on the Determination
Date will be disregarded. The calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers and transfers are taken into account, will be
made in accordance with Code section 416 and regulations thereunder. Voluntary
deductible contributions will not be taken into account in computing the
Top-Heavy Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
(iv) For purposes of establishing the present value in order to
compute the Top-Heavy Ratio any benefit shall be discounted only for mortality
and interest based on the interest rate that would be used as of the date of
distribution by the Pension Benefit Guaranty Corporation to determine the
present value of a lump-sum distribution on plan termination.
(f) Valuation Date: The date described in Section 2.1 as of which
Account balances or accrued benefits are valued for purposes of calculating the
Top-Heavy Ratio.
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16.4 ADJUSTMENT TO FRACTIONS. In any Plan Year in which the Plan is
Top-Heavy, in applying the limitations of Code section 415, the denominator of
the Defined Benefit Fraction shall be computed using 100% of the dollar
limitation instead of 125%, and the maximum aggregate amount used with respect
to the denominator of the Defined Contribution Fraction shall be computed by
using 100% of the dollar limitation instead of 125%.
16.5 VESTING REQUIREMENTS. If the Plan is determined to be a Top-Heavy
Plan in any Plan Year, then a Participant's right to his Accounts derived from
Company Contributions, determined as of the end of such Plan Year, shall vest in
accordance with the following schedule, unless a more rapid vesting schedule is
then in effect under the terms of the Plan:
YEARS OF VESTING SERVICE VESTING PERCENTAGE
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the Plan ceases to be a Top-Heavy Plan in any Plan Year, then the vesting
schedule set forth in Article VII shall apply for such Plan Year with respect to
any portion of a Participant's Accounts that is forfeitable as of the beginning
of such Plan Year; provided, however, that a Participant with five or more years
of vesting service shall be given the option of remaining under the vesting
schedule set forth above.
16.6 MINIMUM CONTRIBUTION. If this Plan is a Top-Heavy Plan in any Plan
Year, the Company Contributions for such year for each "participant" (as defined
for the purpose of providing mandatory minimum contributions under regulations)
who is not a Key Employee shall not be less than three percent (3%) of such
participant's compensation. If, however, the Plan does not enable a defined
benefit plan to meet the requirements of Section 401(a)(4) or 410, the Company
Contributions shall not exceed that percentage of each participant's
compensation which is equal to the highest percentage of compensation at which
Company Contributions are made for the Plan Year for any Key Employee (a) under
the Plan or (b) if the Plan is part of an Aggregation Group, under any defined
contribution plan in such Group. The percentage of compensation at which Company
Contributions are made for a Key Employee shall be computed without regard to
compensation in excess of the ceiling on includable compensation set forth in
Section 16.7 of this Article XVI. For Plan Years beginning before January 1,
1989, for purposes of this Section 16.6, Company Contributions attributable to a
salary reduction or similar arrangement and contributions made pursuant to
Chapter 21 of Title II of the
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Social Security Act shall be disregarded. For Plan Years beginning after
December 31, 1988, Company Contributions attributable to a salary reduction or
similar arrangement made by Employees other than Key Employees shall not be
taken into account under this Section 16.6.
16.7 CEILING ON INCLUDABLE COMPENSATION. If this Plan is determined to
be a Top-Heavy Plan in any Plan Year, then only the first $200,000 of a
Participant's Compensation shall be taken into account in determining the
allocation to the Accounts of such Participant for the Plan Year. The $200,000
limit shall automatically be adjusted for such Plan Years and to such extent as
is permitted by the Secretary of the Treasury.
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ARTICLE XVII
MISCELLANEOUS
17.1 NO ENLARGEMENT OF EMPLOYEE RIGHTS.
(a) This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the Company and
any Employee, or to be consideration for, or an inducement to, or a condition
of, the employment of any Employee.
(b) Nothing contained in this Plan or the Trust shall be deemed to
give any Employee the right to be retained in the employ of the Company or to
interfere with the right of the Company to discharge or retire any Employee at
any time.
(c) No Employee, or any other person, shall have any right to or
interest in any portion of the Trust Fund other than as specifically provided in
this Plan, and no Employee or any other person shall be entitled to rely upon
any representations, whether oral or in writing, including representations made
in the summary plan description, any prospectus or other document, which are
inconsistent with this Plan document.
17.2 MAILING OF PAYMENTS; LAPSED BENEFITS.
(a) All payments under the Plan shall be delivered in person or
mailed to the last address of the Participant or Beneficiary furnished pursuant
to Section 17.3 below.
(b) In the event that a benefit is payable under this Plan to a
Participant or Beneficiary and after reasonable efforts such individual cannot
be located for the purpose of paying the benefit during a period of three
consecutive years following the date payment would otherwise have been made, the
benefit shall be forfeited and allocated in the same manner as Additional
Company Contributions. If the Participant or Beneficiary later makes a valid
claim for the benefit, the claim shall be paid pursuant to directions by the
Plan Administrator.
(c) For purposes of this Section 17.2, the term "Beneficiary" shall
include any person entitled under Section 8.10 to receive the interest of a
deceased Participant or deceased designated Beneficiary and shall also include
an Alternate Payee.
(d) The Accounts of a Participant shall continue to be maintained
until the amounts in the Accounts are paid to the Participant or his
Beneficiary. In the event that the Plan is terminated and the Plan Administrator
directs the Trustee to the
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Trust and distribute the assets of the Trust Fund, the following rules shall
apply:
(i) All Participants and Beneficiaries (including Participants
and Beneficiaries who have not previously claimed their benefits under the Plan)
shall be notified of their right to receive a distribution of their interests in
the Plan.
(ii) All Participants and Beneficiaries shall be given a
reasonable length of time, which shall be specified in the notice, in which to
claim their benefits.
(iii) All Participants (and their Beneficiaries) who do not
claim their benefits within the designated time period shall be presumed to be
dead. The Accounts of such Participants shall be forfeited at such time. These
forfeitures shall be disposed of according to rules prescribed by the Plan
Administrator, which rules shall be consistent with applicable law.
Alternatively the Plan Administrator may, but shall not be required to, deposit
such funds in an applicable state unclaimed property or similar fund, pursuant
to applicable state law.
(iv) The Plan Administrator shall prescribe such rules as it may
deem necessary or appropriate with respect to the notice, deposit or forfeiture
rules stated above.
(e) Should it be determined that the preceding rules relating to
forfeiture of benefits upon Plan termination are inconsistent with any of the
provisions of the Code and/or ERISA, these provisions shall become inoperative
without the need for a Plan amendment and the Plan Administrator shall prescribe
rules that are consistent with the applicable provisions of the Code and/or
ERISA.
17.3 ADDRESSES. Each Participant shall be responsible for furnishing the
Plan Administrator with his correct current address and the correct current name
and address of his Beneficiary or Beneficiaries.
17.4 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections, and other
communications from Participants, Beneficiaries and Alternate Payees shall be in
writing, on forms prescribed by the Plan Administrator and shall be mailed or
delivered to the office designated by the Plan Administrator, and shall be
deemed to have been given when received by that office.
(b) Each notice, report, remittance, statement and other
communication directed to a Participant, Beneficiary or Alternate Payee shall be
in writing and may be delivered in person or by mail. An item shall be deemed to
have been delivered
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and received by the Participant, Beneficiary or Alternate Payee when it is
deposited in the United States mail with postage prepaid, addressed to the
Participant, Beneficiary or Alternate Payee at his last address of record with
the Plan Administrator.
17.5 REPORTING AND DISCLOSURE. The Plan Administrator shall be
responsible for the reporting and disclosure of information required to be
reported or disclosed by the Plan Administrator pursuant to ERISA or any other
applicable law.
17.6 GOVERNING LAW. All legal questions pertaining to the Plan shall be
determined in accordance with the provisions of ERISA and, to the extent not
preempted by ERISA, the laws of the State of Virginia. All contributions made
hereunder shall be deemed to have been made in Virginia.
17.7 INTERPRETATION.
(a) Article and Section headings are for convenient reference only
and shall not be deemed to be part of the substance of this instrument or in any
way to enlarge or limit the content of any Article or Section. Unless the
context clearly indicates otherwise, masculine gender shall include the
feminine, and the singular shall include the plural and the plural the singular.
(b) The provisions of this Plan shall in all cases be interpreted in
a manner that is consistent with this Plan satisfying the requirements of Code
section 401(a).
17.8 WITHHOLDING FOR TAXES. Any payments out of the Trust Fund may be
subject to withholding for taxes as may be required by any applicable federal or
state law.
17.9 LIMITATION ON COMPANY, PLAN ADMINISTRATOR AND TRUSTEE LIABILITY.
Any benefits payable under this Plan shall be paid or provided for solely from
the Trust Fund and neither the Company, the Plan Administrator nor the Trustee
assume any responsibility for the sufficiency of the assets of the Trust to
provide the benefits payable hereunder.
17.10 SUCCESSORS AND ASSIGNS. This Plan and the Trust established
hereunder shall inure to the benefit of, and be binding upon, the parties hereto
and their successors and assigns.
17.11 COUNTERPARTS. This Plan document may be executed in any number of
identical counterparts, each of which shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purpose without
the production of any other counterparts.
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17.12 NO IMPLIED RIGHTS OR OBLIGATIONS. The Company, in establishing and
maintaining this Plan as a voluntary and unilateral undertaking, expressly
disavows the creation of any rights in Employees, Beneficiaries or Alternate
Payees or any obligations on the part of the Company or the Plan Administrator,
except as expressly provided herein.
IN WITNESS WHEREOF, in order to record the adoption of this document,
AMERICAN SYSTEMS ENGINEERING CORPORATION has caused this instrument to be
executed by its duly authorized officer this day of , 19 .
AMERICAN SYSTEMS ENGINEERING CORPORATION
a Delaware Corporation
By: ____________________________________________
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AMENDMENT TO THE
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The American Systems Engineering Corporation Employees 401(k) Profit
Sharing Plan is hereby amended, effective as of January 1, 1997 unless otherwise
provided, as follows:
(1) Section 3.2 is hereby amended to read in its entirety as follows:
3.2 AUTOMATIC COMMENCEMENT OF PARTICIPATION.
(a) Each Eligible Employee described in Section 3.1(b) shall be
entitled to commence participation in this Plan as of his
applicable Participation Commencement Date, which shall be the
later of his Employment Commencement Date or the date he
becomes an Eligible Employee.
(b) A former Employee who is reemployed by the Company as an
Eligible Employee, or a Suspended Participant who again becomes
an Eligible Employee, shall commence participation as of the
date he is reemployed as an Eligible Employee or again becomes
an Eligible Employee, as applicable.
(c) In the case of an acquisition by the Company of a new division
or geographical unit of Employees, or any other acquisition of
an identifiable group of Employees, the President of the
Company may determine that Employees of such division,
geographical unit or other new unit shall be immediately
eligible to participate in the Plan effective on the date they
become Employees of the Company (or a later date specified by
the President of the Company, on or before the date
participation would otherwise commence under this Section 3.2).
(2) Article 7 is hereby amended to add a new subjection 7.6 to read in its
entirety as follows:
7.6 PARTICIPANTS VESTED INTEREST -- EFFECTIVE JANUARY 1, 1997.
Notwithstanding the above, effective January 1, 1997, the Vested Interest
in the Company Contribution of each Participant actively employed on
January 1, 1997 shall be at all times 100%.
<PAGE>
AMENDMENT TO THE
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The American Systems Engineering Corporation Employees 401(k) Profit
Sharing Plan is hereby amended, effective as of January 1, 1995, as follows:
Section 5.2A is amended by deleting the second and third sentences of
subsection (a) and substituting therefore the following:
Such contribution shall be paid to the Trustee on the last day
of the calendar quarter, or as soon as possible thereafter,
but in any event no later than the date which is prescribed by
law for filing the Company's federal income tax return,
including any extensions for the taxable year with respect to
which such contributions are made. A Matching Contribution
shall be allocated as of the last day of the calendar quarter
for which such contribution is made to each Participant who is
performing duties as a wage earning Employee for the Company
as of the last day of such quarter and any Participant who
dies, retires or becomes disabled during such quarter.
Notwithstanding the above, for the period of January 1, 1995
through June 30, 1995, Matching Contributions will be paid to
the Trustee and allocated to each Participant's account as of
June 30, 1995 for those Participants who are employed on June
30, 1995.
<PAGE>
AMENDMENT NUMBER ONE
TO THE
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The American Systems Engineering Corporation Employees 401(k) Profit
Sharing Plan is hereby amended, effective as of January 1, 1989 except as
otherwise indicated, in the following particulars:
1. Section 2.17 is amended by deleting subsection (e) thereof and
substituting therefor the following:
(e) The amount considered as Compensation for any purpose hereunder
shall be limited to $200,000, multiplied by the Adjustment Factor,
for Plan Years after 1988 and prior to 1994. Commencing with Plan
Years beginning in 1994, Compensation shall be limited to $150,000,
adjusted as provided in Code section 401(a)(17)(B). For purposes of
applying the foregoing $200,000 or $150,000 (as adjusted) limits,
the family unit of an Employee who is either (i) a 5% owner or (ii)
a Highly Compensated Employee who is one of the ten most Highly
Compensated Employees of the Company, will be treated as a single
Employee with one Compensation and the annual Compensation limit
shall be allocated among the members of the family unit in
proportion to the Compensation of each member thereof. For this
purpose, a family unit is the affected Employee plus the Employee's
spouse and lineal descendants under age 19 as of the close of the
applicable year.
2. Section 5.2A is amended by deleting subsection (b) thereof and
substituting therefor the following:
(b) Excess Aggregate Contributions, plus any income or minus any
loss allocable thereto shall be forfeited, if forfeitable, or if not
forfeitable, distributed to the Highly Compensated Employees to
whose Accounts they were allocated, as set forth in subsections (d)
and (e) below to the extent necessary to satisfy one of the
following contribution percentage tests:
(i) The Average Contribution Percentage of Highly Compensated
Employees who are Participants is not more than the product of 1.25
and the Average Contribution Percentage of all other Participants.
-1-
<PAGE>
(ii) The Average Contribution Percentage of Highly Compensated
Employees who are Participants is not more than the lesser of (A)
200 percent of the Average Contribution Percentage of all other
Participants and (B) the Average Contribution Percentage of all
other Participants plus two percentage points.
3. Section 5.2A is further amended by deleting subsections (d) and (e)
thereof and substituting therefor the following:
(d) Excess Aggregate Contributions (plus any income or minus any
loss allocable thereto) for a Plan Year, to the extent not vested
pursuant to Article VII, shall be forfeited and to the extent
vested, they shall be distributed no later than the last day of the
next succeeding Plan Year to those Highly Compensated Employees to
whose accounts such Excess Aggregate Contributions were allocated.
Excess Aggregate Contributions shall be treated as Annual Additions.
(e) Income or loss attributable to such Excess Aggregate
Contributions shall be determined based on the income or loss in the
Company Contribution Account of each Highly Compensated Employee to
whom such Excess Aggregate Contributions are distributed (or from
whose accounts such Excess Aggregate Contributions are forfeited)
for the Plan Year for which the Excess Aggregate Contributions were
made. Such income or loss shall be determined pursuant to procedures
established by the Plan Administrator consistent with Code section
401(m)(6) and Income Tax Regulations section 1.401(m)-1(e)(3).
-2-
<PAGE>
AMENDMENT I
AMERICAN SYSTEMS ENGINEERING CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The American System Engineering Corporation Employees 401(k) Profit
Sharing Plan is hereby amended, effective January 1, 1994, in the following
particulars:
Section 3.2 is hereby amended to add a new subsection 3.2(e) to read in
its entirety as follows:
(e) In the case of an acquisition by the Company of a new
division or geographical unit of Employees, or any other acquisition of
an identifiable group of Employees, the President of the Company may
determine that Employees of such division, geographical unit or other
new unit shall be immediately eligible to participate in the Plan
effective on the date they become Employees of the Company (or a later
date specified by the President of the Company, but on or before the
date participation would otherwise commence under this Section 3.2.
<PAGE>
AMENDMENT TO THE
AMSEC CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The AMSEC Corporation Employees 401(k) Profit Sharing Plan is hereby
amended, effective as of January 1, 1999 except as otherwise provided, as
follows:
1. Section 2.17(b) is hereby amended by adding the following paragraph at the
end thereof:
"Notwithstanding the foregoing, effective for Plan Years
beginning after December 31, 1997, "Compensation" for purposes
of this subsection 2.17(b) shall include Elective Deferrals
under Code section 402(g)(3) and amounts contributed under
Code section 125, by the Company at the Employee's election
that are not included in the Employee's gross income."
2. Section 2.17(c) is hereby amended to read in its entirety as follows:
"(c) For purposes of determining whether an Employee is a
Highly Compensated Employee, "Compensation" shall be
"Compensation" as defined in subsection (b) above, but
determined without regard to Code sections 125, 402(e)(3) and
402(h)(1)(B) and, in the case of Company Contributions made
pursuant to a salary reduction agreement, without regard to
Code section 403(b). Thus, Compensation for purposes of this
subsection 2.17(c) includes elective or salary reduction
contributions to any Company section 125 flex plans, this
Plan, or any tax-sheltered annuity, even for periods prior to
January 1, 1998 (when such items are also includible under
subsection 2.17(b))."
3. Section 4.6(a) is hereby amended to insert the words "or a specific
portion thereof" in the last sentence of the paragraph. The sentence
will now read in its entirety as follows:
"Company contributions or a specific portion thereof may be
directed to be invested in a Company Stock fund within the
Trust, subject to the direction of the Plan Administrator."
4. The Heading to Section 8.3 is hereby amended to read "Withdrawals of
Voluntary Contributions, Hardship Withdrawals."
5. A new Section 8.3A is hereby added which reads in its entirety as follows:
"8.3A WITHDRAWALS AFTER AGE 59 1/2. On or after a Participant reaches
the age of 59 1/2, he or she may make one (1) withdrawal of any amount
from one (1) of his or her Accounts as set forth in Section 2.1,
including his or her Deferral Account, Company Contribution Account,
Voluntary Account or Rollover Account. On or after a Participant
reaches the age of 70 1/2, he or she may make unlimited withdrawals
from his or her Accounts as that term is defined in Section 2.1."
6. Section 8.7(a)(i) is hereby amended by deleting the word "$3,500" which
appears twice and replacing it both times with "$5,000 or such other amount
described in Code section 411(a)(11)(A)".
7. Section 8.7(a)(ii) is hereby amended by deleting the word "$3,500" which
appears twice and replacing it both times with "$5,000 or such other amount
described in Code section 411(a)(11)(A)".
8. Section 8.7(a)(iii) is hereby amended by deleting the word "$3,500" which
appears twice and replacing it both times with "$5,000 or such other
amount described in Code section 411(a)(11)(A)".
9. Section 8.7(a)(iv) is hereby amended by deleting the word "$3,500" which
appears twice and replacing it both times with "$5,000 or such other
amount described in Code section 411(a)(11)(A)".
10. Section 14.3(f) is hereby amended to read as follows:
"(f) The loan must state the date upon which the loan must be
repaid, which may not exceed five years (except in the case of
loans used to acquire a dwelling unit which, within a
reasonable time after the loan is made, is to be used as the
principal residence of the Participant). The loan must be
repayable in substantially level payments, with payments not
less frequently than quarterly. However, if a Participant is
on an approved, unpaid leave of absence, the loan repayments
may be suspended for a period not longer than one year. In the
case of this exception to the level payments requirement, the
loan must be repaid within the five year period and the
remaining installment payments cannot be less than those
required under the terms of the original loan."
<PAGE>
AMENDMENT TO THE
AMSEC CORPORATION
EMPLOYEES' 401(K) PROFIT SHARING PLAN
The AMSEC Corporation Employees' 401(k) Profit Sharing Plan is hereby
amended, effective as of January 1, 1998, as follows:
Section 2.21(f) is hereby amended in its entirety to read as follows:
(f) Any individual who is not classified for the relevant eligibility
period by the Company or Affiliated Company on its payroll records as
an employee of the Company or Affiliated Company under Code section
3121(d) (including, but not limited to an individual classified by the
Company or Affiliated Company as an independent contractor, a
non-employee consultant or as an employee of an entity other than the
Company or Affiliated Company), even if such classification is
determined to be erroneous, or is retroactively revised by a
governmental agency, by court order or as a result of litigation, or
otherwise. In the event the classification of an individual who was
excluded from the definition of Eligible Employee under the preceding
sentence is determined to be erroneous or is retroactively revised, the
individual shall nonetheless continue to be excluded from treatment as
an Eligible Employee for all periods prior to the date the Company
determines that its classification of the individual was erroneous or
should be revised or is otherwise required to revise such
classification.
<PAGE>
AMENDMENT TO THE
AMSEC CORPORATION
EMPLOYEES 401(K) PROFIT SHARING PLAN
The AMSEC Corporation Employees 401(k) Profit Sharing Plan is hereby
amended, effective as of January 1, 1997 except as otherwise provided, as
follows:
1. Section 1.1 is hereby amended by substituting "AMSEC Corporation Employees
401(k) Profit Sharing Plan" for "American Systems Engineering
Corporation Employee 401(k) Profit Sharing Plan".
2. Section 2.17(e) is hereby amended by deleting the last two sentences at the
end thereof to eliminate the references to the family unit.
3. Section 2.17A is hereby amended to read in its entirety as follows:
"2.17A CONTRIBUTION PERCENTAGE. "Contribution Percentage" shall mean
the ratio (expressed as a percentage) of (i) a Participant's Matching
Contributions plus any Additional Company Contributions allocated to
the Participant's Deferral Account that are taken into account in the
nondiscrimination test described in Section 5.2A for the Plan year and
(ii) the Participant's Compensation for the Plan Year."
4. Section 2.21 is hereby amended by adding a new subsection (g) to the end
thereof to read as follows:
"(g) Any Leased Employee."
5. Section 2.22 is amended by deleting the last clause of the next to last
sentence that begins with the words "and such services are of a type
historically performed..." and substituting the following therefor to
read as follows:
"...and such services are performed under the primary direction or
control by the recipient employer."
6. Section 2.25B is hereby deleted.
7. Section 2.27 is hereby amended to read in its entirety as follows:
2.27 HIGHLY COMPENSATED EMPLOYEE "Highly Compensated Employee"
shall mean, for Plan Years beginning after December 31, 1996:
(a) The following Employees:
(i) Any Employee who was a 5% Owner at any time during the
Plan Year or the preceding Plan Year, or
(ii) For the preceding Plan Year --
A) Any Employee who had Compensation from the Employer
in excess of $80,000 multiplied by the Adjustment
Factor, and
B) If the Employer elects the application of this
clause for such preceding Plan Year, any Employee
in the "top-paid group" of Employees for such
preceding Plan Year.
(b) For purposes of this Section 2.27, the "top-paid
group" shall be the group consisting of the top
twenty percent (20%) of Employees when ranked on the
basis of Compensation during the applicable year.
(c) For purposes of this Section 2.27, "Compensation"
shall mean Compensation within the meaning of Code
section 415(c)(3), plus elective or salary reduction
contributions to a cafeteria plan, cash or deferred
arrangement or tax-sheltered annuity.
8. Section 2.32A is hereby amended by deleting the last clause, "or a Family
Member."
9. Section 2.37 is hereby amended by substituting "AMSEC Corporation Employees
401(k) Profit Sharing Plan" for "American Systems Engineering Corporation
Employees 401(k) Profit Sharing Plan".
10. Section 2.42 is hereby amended by deleting the parenthetical clause in the
first sentence of the flush paragraph beginning after subsection 2.42(c).
11. Subsections 5.2(c)(i) and (ii) are hereby amended by substituting the
phrase "all Non-Highly Compensated Employees for the prior Plan Year (or
the current Plan Year if so elected by the Employer)" for the phrase "all
other Participants" each time that phrase appears.
12. Subsection 5.2(e) is hereby deleted and the following is substituted
therefor to read as follows.
(e) Distribution of Excess Contributions (plus any income
or minus any loss allocable thereto) shall be made to
Highly Compensated Employees on the basis of the amount of the
Excess Contributions by, or on behalf of, each Highly
Compensated Employee. Excess Contributions shall be
distributed from the Participant's Deferral Account as
follows:
(i) Calculate the dollar amount of Excess Contributions for each
Highly Compensated Employee consistent with the provisions
of Code section 401(k)(8)(B).
(ii) Add the dollar amounts calculated in subsection (i) above
to arrive at the total dollar amount of the Excess
Contributions for the Plan Year, and distribute such total
amount in accordance with subsections (iii)-(v) below.
(iii) The Deferral Account of the Highly Compensated Employee
with the highest dollar amount of Elective Deferrals for the
Plan Year shall be reduced by the dollar amount required to
cause such Highly Compensated Employee's Elective Deferrals
for the Plan Year to equal the dollar amount of the Elective
Deferrals of the Highly Compensated Employee with the next
highest dollar amount of Elective Deferrals. Such reduction
amount shall be distributed from the Deferral Account of the
Highly Compensated Employee. However, if a lesser
reduction, when added to the total dollar amount already
distributed pursuant to this subsection (iii) would equal
the total Excess Contributions as determined pursuant to
subsection (ii) above, then the lesser reduction amount
shall be distributed from such Highly Compensated Employee's
Deferral Account.
(iv) If the total amount distributed in subsection (iii) is less
than the total Excess Contributions determined pursuant to
subsection (ii) above, then the reduction and distribution
process in subsection (iii) above shall be repeated.
(v) No distributions of Excess Contributions (plus income) shall
be made to any Highly Compensated Employee as long as any
other Highly Compensated Employee has a higher amount of
Elective Deferrals.
Any reduction in the amount of Elective Deferrals to be made
on behalf of a Participant or any distribution of Excess
Contributions under this subsection (e) will also be
effective for purposes of determining the amount of Matching
Contributions, if any, allocated to such Participant under
Section 5.2A.
13. Section 5.2(g) is hereby deleted.
14. Subsections 5.2A(b)(i) and (ii) are hereby amended by substituting the
phrase "all Nonhighly Compensated Employees for the prior Plan Year (or the
current Plan Year if so elected by the Employer)" for the phrase "all other
Participants" each time that phrase appears. 15. Subsection 5.2A(e) is
hereby deleted and the following is substituted therefor to read as
follows:
(e) Distribution of Excess Aggregate Contributions (plus any
income or minus any loss allocable thereto) shall be
made to Highly Compensated Employees on the basis of the
amount of the Matching Contributions on behalf of each
Highly Compensated Employee. Excess Contributions shall be
distributed from the Participant's Matching Contribution
Account as follows:
(i) Calculate the dollar amount of Excess Aggregate
Contributions for each Highly Compensated Employee
consistent with the provisions of Code section 401(m)(6)(D).
(ii) Add the dollar amounts calculated in
subsection (i) above to arrive at the total dollar amount of
the Excess Aggregate Contributions for the Plan Year, and
distribute such amount in accordance with subsections
(iii)-(vi) below.
(iii) The Matching Contribution Account of the Highly Compensated
Employee with the highest dollar amount of Matching
Contributions for the Plan Year shall be reduced by the
dollar amount required to cause such Highly Compensated
Employee's Matching Contributions for the Plan Year to equal
the dollar amount of the Matching Contributions of the
Highly Compensated Employee with the next highest dollar
amount of Matching Contributions. Such reduction amount
shall be distributed from the Matching Contribution Account
of the Highly Compensated Employee. However, if a lesser
reduction, when added to the total dollar amount already
distributed pursuant to this subsection (iii) would equal
the total Excess Aggregate Contributions as determined
pursuant to subsection (ii) above, then the lesser reduction
amount shall be distributed from such Highly Compensated
Employee's Matching Contribution Account.
(iv) If the total amount distributed in subsection (iii) is less
than the total Excess Aggregate Contributions determined
pursuant to subsection (ii) above, then the reduction and
distribution process in subsection (iii) above shall be
repeated.
(v) Income or loss attributable to such Excess Aggregate
Contributions shall be determined based on the income or
loss in the Company Contribution Account of each
Highly Compensated Employee to whom such Excess Aggregate
Contributions are distributed (or from whose accounts such
Excess Aggregate Contributions are forfeited) for the Plan
Year for which the Excess Aggregate Contributions were made.
Such income or loss shall be determined pursuant to
procedures established by the Plan Administrator consistent
with Code section 401(m)(6) and Income Tax Regulations
section 1.401(m)-1(e)(3).
(vi) No distributions of Excess Aggregate Contributions (plus
income) shall be made to any Highly Compensated Employee as
long as any other Highly Compensated Employee has a higher
amount of Matching Contributions.
16. Subsection 5.2A(g) is hereby deleted.
17. Subsection 5.2(h) is hereby amended to read as follows in its entirety:
Any Excess Aggregate Contributions that are forfeited shall be added
to Company Contributions and allocated as provided in Section 6.7(a);
provided, however, that forfeitures of Excess Aggregate
Contributions shall not be allocated to the Account of any Highly
Compensated Employee whose Matching Contributions Account is reduced
pursuant to Subsection 5.2A(e).
18. Section 5.2A(i) is hereby amended to read as follows:
(i) If one or more Highly Compensated Employees participates
in a cash or deferred arrangement subject to the
nondiscrimination test in Code section 401(k) and a plan
subject to the nondiscrimination test in Code section 401(m)
that are maintained by the Company or an Affiliated Company,
and the sum of the Average Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees
subject to either or both of those tests exceeds the aggregate
limit defined below, the Matching Contribution Account of the
Highly Compensated Employees who also participate in the cash
or deferred arrangement shall be reduced (beginning with the
Highly Compensated Employee whose Matching Contributions for
the Plan Year are the highest) to the extent necessary to come
within the Applicable Limit. The amount by which each Highly
Compensated Employee's Matching Contribution Account is
reduced shall be treated as an Excess Aggregate Contribution.
The Average Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees shall be
determined after any corrections required to meet the Average
Deferral Percentage test and the Average Contribution
Percentage test. Multiple use does not occur if either the
Average Deferral Percentage or the Average Contribution
Percentage of the Highly Compensated Employee does not exceed
1.25 multiplied by the Average Deferral Percentage and Average
Contribution Percentage of the Nonhighly Compensated Employees
for the Prior Plan Year (or the current Plan Year if so
elected by the Employer).
19. A new Section 6.10A is hereby added to the Plan effective for
reemployment commencing on or after December 12, 1994 and immediately
follows Section 6.10 to read as follows in its entirety:
"6.10A QUALIFIED MILITARY SERVICE. Notwithstanding any provision of
this Plan to the contrary, Company Contributions, benefits and service
credit with respect to qualified military service will be provided in
accordance with Section 414(u) of the Code."
20. Section 14.3(f) is hereby amended by adding the following sentence to the
end thereof to read as follows:
"Notwithstanding the foregoing, loan repayments will be suspended under
this Plan as permitted under Section 414(u)(4) of the Code."
EXHIBIT 5.1
November 19, 1998
Science Applications
International Corporation
10260 Campus Point Drive
San Diego, CA 92121
Gentlemen:
I am the Senior Vice President and General Counsel of Science
Applications International Corporation (the "Company"). As such, I have acted as
your counsel in connection with the Prospectus of the Company covering the offer
and sale of up to 100,000 shares (the "Company Shares") of its Class A Common
Stock, par value $0.01 per share (the "Class A Common Stock"), by the Company to
its employees under the AMSEC Corporation Employees 401(k) Profit Sharing Plan
(hereinafter referred to as the "Plan"). The Company Shares are being offered
pursuant to a prospectus which constitutes a part of the Registration Statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission") on November 20, 1998 under the Securities
Act of 1933, as amended (the "Securities Act").
I am generally familiar with the affairs of the Company. In addition, I
have examined and am familiar with originals or copies, certified or otherwise
identified to my satisfaction, of (i) the Registration Statement, (ii) the
Restated Certificate of Incorporation and Bylaws of the Company as currently in
effect, (iii) resolutions adopted by the Board of Directors and the Operating
Committee thereof relating to the filing of the Registration Statement and the
issuance of the Company Shares thereunder, (iv) the Plan and (v) such other
documents as I have deemed necessary or appropriate as a basis for the opinions
set forth below. In my examination, I have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to me as originals, the conformity to original documents of
all documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such copies.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Company Shares that are being issued pursuant to the Plan have
been duly authorized for issuance.
2. When certificates for the Company Shares to be issued pursuant to
the Plan have been duly executed and delivered in accordance with the terms of
the Plan, the Company Shares will be legally issued, fully paid and
nonassessable.
I hereby consent to the use of my name in the Registration Statement
under the caption "Legal Opinion" and to the filing of this opinion as an
exhibit to the Registration Statement. In giving such consent, I do not thereby
admit that I come within the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
/s/ Doug Scott
Douglas E. Scott
Senior Vice President
and General Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 3, 1998 appearing on page F-2 of
Science Applications International Corporation's Annual Report on Form 10-K for
the year ended January 31, 1998. We also consent to the incorporation by
reference in the Registration Statement of our report dated February 27, 1998
appearing on page F-2 of the Annual Report on Form 11-K of the Science
Applications International Corporation Employee Stock Purchase Plan for the year
ended January 31, 1998. We also consent to the incorporation by reference in the
Registration Statement of our report dated April 3, 1998 appearing on page F-2
of the Annual Report on Form 11-K of the Science Applications International
Corporation Cash or Deferred Arrangement for the year ended December 31, 1997.
We also consent to the incorporation by reference in the Registration Statement
of our report dated April 3, 1998 appearing on page F-2 of the Annual Report on
Form 11-K of the TransCore Retirement Savings Plan for the year ended December
31, 1997. We also consent to the incorporation by reference in the Registration
Statement of our report dated April 3, 1998 appearing on page F-2 of the Annual
Report on Form 11-K of the Bell Communications Research Savings and Security
Plan for the year ended December 31, 1997. We also consent to the incorporation
by reference in the Registration Statement of our report dated April 3, 1998
appearing on page F-2 of the Annual Report on Form 11-K of the Bell
Communications Research Savings Plan for Salaried Employees for the year ended
December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
San Diego, California
November 13, 1998
