As filed with the Securities and Exchange Commission on May 30, 1996
Registration No. 33-
====================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------
COMPUTER ASSOCIATES INTERNATIONAL, INC.
(Exact name of Registrant as specified in its Charter)
--------------------------
Delaware 13-2857434
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
--------------------------
One Computer Associates Plaza 11788-7000
Islandia, New York
(Address of Principal Executive Offices) (Zip Code)
--------------------------
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
(Full title of the plan)
--------------------------
PETER A. SCHWARTZ
Senior Vice President - Chief Financial Officer
COMPUTER ASSOCIATES INTERNATIONAL, INC.
One Computer Associates Plaza, Islandia, New York 11788-7000
(Name and address of agent for service)
(516) 342-5224
(Telephone number, including area code, of agent for service)
---------------------------
CALCULATION OF REGISTRATION FEE
======================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Per Offering Registration
to be Registered(1) Registered(1) Unit(2) Price(2) Fee
- ------------------- ------------- --------- -------- ------
<S> <C> <C> <C> <C>
Common Stock, $.10 par 3,000,000 shares $71.9375 $215,812,500 $74,418
value per share,
together with the
associated right
to purchase shares of
Series One Junior
Participating Preferred
Stock, Class A, without
par value.
=======================================================================
<FN>
(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.
<FN>
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457, based on the average of the high and low sales
price of the Common Stock of the Registrant on May 28, 1996,
respectively, as reported on the New York Stock Exchange.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are hereby
incorporated by reference in this Registration Statement:
(a) The Registrant's annual report on Form 10-K for its
fiscal year ended March 31, 1996, filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Plan's annual report on Form 11-K for its plan year ended
March 30, 1995, filed pursuant to Section 13(a) or 15(d) of the Exchange
Act;
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by
the Registrant documents and the end of the plan year covered by the
Plan documents respectively referred to in (a) above; and
(c) The description of the Registrant's common stock, par
value $.10 per share, outlined in the Registrant's registration
statement on Form 8-A filed under the Exchange Act, which in turn
incorporates by reference the description in the Registrant's
Registration Statement on Form S-1 (Registration No. 2-74618) filed
under the Securities Act of 1933, as amended (the "Securities Act").
All documents subsequently filed by the Registrant and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
on or after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of
such documents. Any statement contained herein or in a document, all or
a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained in any subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Maria A. Di Pippo, Esq., who rendered the opinion as to
ERISA and Internal Revenue Code compliance with respect to the Third
Amendment to the Computer Associates Savings Harvest Plan, as amended
and restated effective March 31, 1992, is employed by the Registrant as
Counsel/Human Resources.
Item 6. Indemnification of Directors and Officers.
As permitted by Section 145 of the Delaware General
Corporation Law, Article NINTH of the Registrant's Restated Certificate
of Incorporation, as amended, provides:
"The Corporation shall to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as the same may
be amended and supplemented, indemnify any and all persons who it shall
have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered
by said section, and the indemnification provided for herein shall not
be deemed exclusive of any other rights to which those indemnified may
be entitled under any By-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person."
The Registrant's Restated Certificate of Incorporation, as
amended, also limits the personal liability of directors for monetary
damages in certain instances and eliminates director liability for
monetary damages arising from any breach of the director's duty of care.
The Registrant maintains insurance on behalf of any person
who is or was a director, officer, employee or agent of the Registrant,
or is or was serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Registrant would have the power
to indemnify him against such liability under the provisions of the
Registrant's Restated Certificate of Incorporation, as amended.
Item 7. Exemption From Registration Claimed.
Not Applicable.
II-2
<PAGE>
Item 8. Exhibits.
See the Exhibits Index attached hereto.
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;
(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; and
(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)
above do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant or
the Plan pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 initial bona
fide offering thereof.
(3) To remove the registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to
II-3
<PAGE>
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 and each filing of the Plan's annual report pursuant to
Section 15(d) of the Securities 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 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
The Registrant. 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 Town of Islip,
County of Suffolk and State of New York on the 30th day of May, 1996.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By: /s/Peter A. Schwartz
---------------------
Peter A. Schwartz
Senior Vice President
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose
signature appears below constitutes and appoints Charles B. Wang and
Peter A. Schwartz, and each of them, his true and lawful attorneys-in-
fact and agents with full power of substitution, 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 all exhibits thereto, and all
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 in and about the premises, 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 any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue thereof.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Name Title Date
- ----------------- --------------------- --------------
/s/Charles B. Wang
- ------------------
(Charles B. Wang) Chairman of the Board May 30, 1996
(Principal Executive Officer)
/s/Peter A. Schwartz
- --------------------
(Peter A. Schwartz) Senior Vice President-Chief May 30, 1996
Financial Officer(Principal
Financial and Accounting
Officer)
/s/Russell M. Artzt
- -------------------
(Russell M. Artzt) Director May 30, 1996
/s/Willem F.P. de Vogel
- -----------------------
(Willem F.P. de Vogel) Director May 30, 1996
/s/Irving Goldstein
- ---------------------
(Irving Goldstein) Director May 30, 1996
/s/Richard A. Grasso
- ---------------------
(Richard A. Grasso) Director May 30, 1996
/s/Shirley Strum Kenny
- ----------------------
(Shirley Strum Kenny) Director May 30, 1996
/s/Sanjay Kumar
- ---------------
(Sanjay Kumar) Director May 30, 1996
/s/Edward C. Lord
- -----------------
(Edward C. Lord) Director May 30, 1996
II-6
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act, the
Plan Committee has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the Town
of Islip, County of Suffolk, and State of New York on the 30th day of
May, 1996.
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
By: /s/Peter A. Schwartz
--------------------
Peter A. Schwartz
Member, Plan Committee
II-7
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION EXHIBITS TO
NUMBER THIS REPORT
4(a) Computer Associates Savings Harvest Filed herewith
Plan, as amended and restated as Exhibit
effective March 31, 1992 ("CASH 4(a).
Plan").
4(b) First Amendment to CASH Plan, dated Filed herewith
the 24th day of March, 1994. as Exhibit
4(b).
4(c) Second Amendment to CASH Plan, dated Filed herewith
the 21st day of April 1995. as Exhibit
4(c).
4(d) Third Amendment to CASH Plan dated Filed herewith
the 18th day of October, 1995. as Exhibit
4(d).
4(e) Trust Agreement, dated as of March Filed herewith
31, 1993, between Computer as Exhibit
Associates International, Inc. and 4(e).
Fidelity Management Trust Company
pursuant to the CASH Plan.
5(a) Copy of the Internal Revenue Service Filed herewith
Determination Letter that the CASH as Exhibit
Plan, including the First and Second 5(a).
Amendments thereto, is qualified
under Section 401 of the Internal
Revenue Code (the "Code").
5(b) Opinion of Maria A. Di Pippo, Esq. Filed herewith
as to ERISA and Code compliance with as Exhibit
respect to the Third Amendment to 5(b).
the CASH Plan.
23(a) Consent of Ernst & Young LLP. Filed herewith
as Exhibit
23(a).
23(b) Consent of Maria A. Di Pippo, Esq. Filed herewith
(contained in her opinion in Exhibit as Exhibit
5(b)). 5(b).
24 Power of Attorney. Filed herewith
on page II-5.
II-8
COMPUTER ASSOCIATES INTERNATIONAL INC.
Computer Associates Savings Harvest Plan
("CASH Plan")
[As Amended and Restated
Effective March 31, 1992]
[Incorporating All Amendments Adopted Through March 31, 1992]
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I
GENERAL DEFINITIONS
<S> <C> <C>
1.1(1) Beneficiary............................... 1
1.1(2) Code...................................... 1
1.1(3) Committee................................. 1
1.1(4) Compensation.............................. 1
1.1(5) Disability................................ 3
1.1(6) Early Retirement Age...................... 4
1.1(7) Employee.................................. 4
1.1(8) Employer.................................. 4
1.1(9) Hour of Service........................... 5
1.1(10) Normal Retirement Age..................... 5
1.1(11) One Year Break-in-Service................. 5
1.1(12) Participant............................... 6
1.1(13) Period of Separation...................... 6
1.1(14) Period of Service......................... 6
1.1(15) Period of Severance....................... 7
1.1(16) Plan...................................... 8
1.1(17) Plan Year................................. 8
1.1(18) Re-Employed Individual.................... 8
1.1(19) Related Company........................... 9
1.1(20) Trust..................................... 9
1.1(21) Trustee.................................... 10
1.1(22) Valuation Date............................. 10
1.2 Effective Date............................. 10
ARTICLE II
OBJECTIVE OF THE PLAN
2.1 .......................................... 11
2.2 .......................................... 11
ARTICLE III
PARTICIPATION
3.1 Eligibility............................... 12
3.2 Date of Participation..................... 13
3.3 Employment by Related Company............. 14
ARTICLE IV
CONTRIBUTIONS TO THE PLAN
4.1 Pre-Tax Contributions..................... 16
4.2 Employer Matching Contributions........... 18
<PAGE>
ARTICLE IV - CONTINUED
4.3 Employer Discretionary Contributions...... 18
4.4 Voluntary Contributions................... 19
4.5 Salary Reduction Agreements............... 19
4.6 Form and Payment of Contributions
to the Trust.............................. 20
4.7 Non-Discrimination Tests.................. 21
4.8 Amendments and Revocation of Salary
Reduction Agreements...................... 32
4.9 Make-Up Contributions..................... 33
4.10 Rollover Contributions.................... 34
4.11 Transfers From Another Qualified Plan..... 34
4.12 Transfer Procedures....................... 35
4.13 Transfer to Other Qualified Plans......... 35
ARTICLE V
PARTICIPANTS' ACCOUNTS
5.1 Separate Accounts......................... 37
5.2 Allocation of Employer Contributions...... 37
5.3 Allocation of Net Income or Net Loss...... 40
5.4 Forfeitures and Unallocated Trust Funds... 41
5.5(1) Limitations on Annual Additions........... 43
5.5(2) Removal of Excess Contributions........... 43
5.5(3) Definitions............................... 45
ARTICLE VI
VESTING
6.1 Vesting of Pre-Tax, Voluntary and
Rollover Contribution Accounts............ 47
6.2 Vesting of Employer Contribution
Accounts.................................. 47
6.3 Years of Service.......................... 48
ARTICLE VII
DISPOSITION OF VESTED INTERESTS IN ACCOUNTS
7.1 Termination Other Than by Reason of
Retirement, Disability or Death........... 49
7.2(1) Payment at Normal Retirement Age.......... 49
7.2(2) Early Retirement Age or Disability........ 50
7.2(3) Payment Upon Death........................ 50
7.3 Methods of Distribution................... 51
7.4 Designation of Beneficiary................ 52
7.5 Notification.............................. 54
7.6 Minimum Distribution Rules................ 55
7.7 Timing of Death Benefit Distributions..... 61
7.8 Valuation of Distribution................. 62
7.9 Direct Rollover of Eligible Rollover
Distributions............................. 63
<PAGE>
ARTICLE VIII
IN-SERVICE WITHDRAWALS AND LOANS
8.1 Withdrawals from Participants' Accounts... 67
8.2 Loans to Participants..................... 71
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Termination............................... 76
9.2 Merger or Consolidation................... 77
9.3 Alienation Prohibited..................... 77
9.4 Governing Law............................. 79
9.5 Plan Not Contract of Employment........... 80
9.6 Reversion of Certain Contributions........ 80
9.6(1) Disallowance of Deduction................. 80
9.6(2) Disqualification of Plan.................. 81
9.6(3) Mistake of Fact........................... 81
9.7 Participant or Beneficiary Unable
to be Found............................... 82
ARTICLE X
ADMINISTRATIVE PROVISIONS
10.1(1) Committee................................ 83
10.1(2) Quorum; Majority to Govern............... 83
10.1(3) Act of Committee......................... 83
10.1(4) By-Laws.................................. 83
10.1(5) Powers and Duties of Committee........... 83
10.1(6) Advisers................................. 85
10.1(7) Allocation of Fiduciary
Responsibilities......................... 85
10.1(8) Investment Manager....................... 85
10.1(9) Claims Procedure......................... 85
10.1(10) Indemnification.......................... 85
10.2 Employer................................. 86
10.2(1) Contributions............................ 86
10.2(2) Appointment Removal and Compensation
of Trustee............................... 86
10.2(3) Expenses................................. 86
10.2(4) Amendment of Plan........................ 86
10.3 Service in More Than One Capacity........ 87
10.4 Payments to the Trust and
Establishment of Investment Funds........ 87
10.5 Payments From the Trust.................. 87
10.6 Voting Rights with Respect to Company
Stock Fund............................... 88
<PAGE>
ARTICLE XI
INVESTMENT DIRECTIONS
11.1 Directed Investments..................... 90
11.2 Allocation of Employer Discretionary
Contributions Made in Computer Associates
International, Inc. Stock................ 91
11.3 Application of Securities Law............ 92
ARTICLE XII
SPECIAL TOP-HEAVY PROVISIONS
12.1 Purpose................................. 93
12.2 Determination of Top-Heaviness.......... 93
12.3 Key Employees........................... 95
12.4 Aggregation Rules....................... 96
12.5 Special Minimum Contribution Rules and
Vesting Rules Becoming Operative in the
Event the Plan Becomes Top-Heavy........ 97
12.6 Termination of Top-Heavy Status......... 99
ARTICLE XIII
SPECIAL SITUATIONS
13.1 Definitions.............................100
13.1(1) Annuity Starting Date...................100
13.1(2) Prior Company...........................100
13.1(3) Prior Plan..............................100
13.1(4) Transferred Employee....................101
13.2 Eligibility of Transferred Employees....101
13.3 Prior Plan Accounts and Money Purchase
Accounts................................102
13.4 Vesting of Transferred Employees........102
13.5 Distribution of Accounts of
Transferred Employees...................103
13.6 Assignment of Money Purchase Account
for Plan Loan...........................117
13.7 Rollover Contribution Account of
Non-Transferred Employees...............118
APPENDIX Effective Date Provisions...............A-1
</TABLE>
<PAGE>
PREAMBLE
The Computer Associates Savings Harvest Plan (the "CASH
Plan"), as amended and restated effective March 31, 1992, constitutes an
amendment, restatement and continuation of the CASH Plan as in effect on
March 30, 1992.
Initially, Computer Associates International, Inc. (the
"Company") adopted each of the Computer Associates International, Inc.
Employees' Money Purchase Pension Plan (the "Pension Plan") and the
Computer Associates International, Inc. Employees' Profit Sharing Plan
(the "Profit Sharing Plan") effective as of
January 1, 1981 (referred to collectively hereinafter as the "Prior
Plans"). In March of 1985, the Company amended the Pension Plan to
convert said Plan into a profit sharing plan ("Employees' Savings and
Thrift Plan") for the Plan Year ending March 31, 1985.
Effective August 1, 1985, the Company completely amended and
restated the Employees' Savings and Thrift Plan and merged the Profit
Sharing Plan with and into the aforesaid Plan, thereby creating the CASH
Plan.
The CASH Plan was subsequently amended from time to time as
a result of the acquisition by the Company of Software International
Corporation, BPI Systems, Inc. and UCCEL Corporation, to set forth the
rights of employees of the acquired companies who became employees of
the Company and participants in the CASH Plan, and was further amended
<PAGE>
to (a) comply with certain provisions of the Tax Reform Act of 1986
("TRA'86") in effect with respect to the Plan and (b) add a Guaranteed
Income Fund and a Company Stock Fund to the investment funds available
to participants.
Effective April 1, 1988, the CASH Plan was completely
amended and restated to incorporate all amendments made to the Plan
since the Plan's restatement effective April 1, 1985. Subsequent to
this restatement, the Plan was further amended from time to time as a
result of further acquisitions by the Company of Applied Data Research,
Inc., Cullinet Software, Inc., DBMS, Inc., CompuSystems, Inc., and On-
Line Software International, Inc., to set forth the rights of employees
of the acquired companies who became employees of the Company and
participants in the CASH Plan, and to (a) further comply with certain
provisions of TRA'86, such as provisions relating to vesting, in-service
hardship distributions, and the $200,000 limitation on Compensation, (b)
reflect certain changes in the investment funds available to Plan
participants, (c) change the Plan Year, (d) comply with the final
regulations issued by the Department of Labor relating to Plan loans,
and (e) set forth the rights of Employees of the Company who transferred
to Newco in connection with the joint venture entered into between the
Company and The Newtrend Group Limited Partnership.
The purpose of this amendment and restatement of the CASH
Plan is to (a) incorporate all amendments made to the Plan since its
most recent amendment and restatement, (b) set forth the rights of those
<PAGE>
employees of Pansophic Systems Incorporated and Nantucket Corporation
who became employees of the Company and participants in the CASH Plan in
connection with the acquisition by the Company of Pansophic Systems
Incorporated and Nantucket Corporation, respectively, (c) make certain
improvements to the Plan, including (i) permitting after-tax Voluntary
Contributions without Committee consent, (ii) removing the hardship
limitations with respect to Plan loans, (iii) permitting the
distribution of Computer Associates stock under the Computer Associates
Stock Fund either in cash or in kind pursuant to the participant's
election, (iv) changing the Plan's entry date to the first day of the
month following the date the participant satisfies the eligibility
requirements set forth in the Plan, and (v) permitting any amount of
Employer Discretionary Contributions that are made in shares of Computer
Associates stock to be allocated directly to a Computer Associates Stock
fund account on behalf of each eligible participant, regardless of the
participant's election in effect at such time, and (d) bring the
provisions of the CASH Plan into compliance with all of the relevant
provisions of TRA'86, the Omnibus Budget Reconciliation Act of 1986, the
Omnibus Budget Reconciliation Act of 1987, the Technical and
Miscellaneous Revenue Act of 1988, the Omnibus Reconciliation Act of
1989, and the Unemployment Compensation Amendments of 1992, and thereby
ensure that the Plan and the Trust created thereunder continue to be
qualified and tax-exempt, respectively, under Sections 401(a), 401(k)
and 501(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
<PAGE>
The terms of this amended and restated Plan shall apply only
with respect to Employees who are in the employ of the Company on or
after the effective date of this amendment and restatement, which
effective date shall, except as otherwise provided in the Appendix
attached to this Plan and made a part hereof, be March 31, 1992.
The purposes of the CASH Plan were, and continue to be, to
continue the benefits that were provided under the Prior Plans and to
allow participants to contribute a portion of their salaries, on a pre-
tax basis, in order to accumulate capital for their retirement. The
CASH Plan and the Trust created thereunder are intended to meet the
applicable requirements of Sections 401(a), 401(k) and 501(a) of the
Code.
<PAGE> 1
COMPUTER ASSOCIATES INTERNATIONAL, INC.
****************************************
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
****************************************
ARTICLE I
GENERAL DEFINITIONS
1.1 The following terms used in this Plan shall have the
respective meanings set forth below:
(1) Beneficiary shall mean an individual or other
entity designated by a Participant in accordance with the procedure
described in 7.4 hereof or, in the absence of any such designation, the
estate of such Participant.
(2) Code shall mean the Internal Revenue Code of
1986, as amended from time to time.
(3) Committee shall mean the individuals appointed
by the Employer pursuant to 10.1(1), and when appropriate, such term
shall include any individual to whom fiduciary responsibilities shall
have been delegated in accordance with 10.1(7) or (8).
(4) Compensation shall, except as otherwise provided
in the Plan, mean, for any Plan Year, the basic compensation (excluding
overtime pay, commissions or bonuses, but including Pre-Tax
Contributions made pursuant to 4.1 and elective contributions made by
<PAGE> 2
the Employer on behalf of an Employee that are not included in the
Employee's gross income under Section 125 of the Code) paid to an
Employee by the Employer during such Plan Year, except that in the case
of an Employee who is a Participant for only part of a Plan Year, such
term shall not include the basic compensation paid during such Plan Year
before he became a Participant or after he ceased to be a Participant.
Notwithstanding anything in this Plan to the contrary,
for the Plan Year beginning April 1, 1989 and for all Plan Years
thereafter, the amount of Compensation which may be taken into account
for any Participant in any Plan Year shall not exceed $200,000. This
$200,000 limitation shall be adjusted at the same time and in the same
manner as any adjustment by the Secretary of the Treasury under Section
415(d) of the Code, except that the dollar increase in effect on January
1 of any calendar year shall be effective for Plan Years beginning in
such calendar year, with the first adjustment to the $200,000 limitation
being effective on January 1, 1990. If Compensation shall be determined
over a period that contains less than twelve (12) calendar months, then
the annual Compensation limit shall be an amount equal to the annual
Compensation limit for the calendar year in which the Compensation
period begins multiplied by the ratio obtained by dividing the number of
<PAGE> 3
full months in the period by twelve (12). In determining the
Compensation of a Participant for the purpose of the $200,000
limitation, the provisions of Section 414(q)(6) of the Code shall apply,
except that the term "family" under said Section shall only include the
Participant's spouse and any lineal descendants of the Participant who
have not attained age nineteen (19) before the close of the Plan Year.
If, as a result of the application of such family member provisions, the
$200,000 limitation, as adjusted, is exceeded, then, except for the
purpose of determining a Participant's non-Excess Compensation under
5.2(2)(a), such limitation shall be prorated among the affected family
member Participants in proportion to each such Participant's
Compensation as determined under this 1.1(4) prior to the application
of the $200,000 limitation, as adjusted.
(5) Disability shall mean an inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death
or to be of long, continued and indefinite duration. For this purpose,
the Committee may require a certification from a physician regarding
<PAGE> 4
such Disability, and the Committee's determination as to whether
Disability exists shall be conclusive.
(6) Early Retirement Age shall mean, with respect to
any Participant whose employment terminates before Normal Retirement
Age, the later of:
(a) the first day of the month during which he
attains age fifty-five (55); or
(b) the tenth (10th) anniversary of the date
the Participant commenced participation in the Plan.
(7) Employee shall mean any individual employed on a
permanent full-time basis by the Employer, except that such term shall
not include an independent contractor.
(8) Employer shall mean Computer Associates
International, Inc., a Delaware corporation, any successor (by merger,
consolidation, purchase or otherwise) to such corporation which shall
have assumed the obligations of such corporation under this Plan, and,
except as otherwise provided, any Related Company which shall have
adopted the Plan with respect to its Employees with the prior written
approval of Computer Associates International, Inc. (For the period
prior to May 29, 1981, Computer Associates International, Inc. was known
<PAGE> 5
as Trans-American Computer Associates, Inc.)
(9) Hour of Service shall mean each hour for which
an Employee is paid, or entitled to payment, for the performance of
duties for the Employer or a Related Company.
(10) Normal Retirement Age shall mean, with respect
to any Participant, the first day of the month during which he attains
age sixty-five (65).
(11) One Year Break-in-Service shall mean a twelve
(12) consecutive-month Period of Severance; provided, however, that in
the case of an Employee who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive-month period beginning on
the first anniversary of the first date of such absence shall not
constitute a One Year Break-In-Service. For the purposes of this
subsection, an absence from work for maternity or paternity reasons
means an absence (a) because of the pregnancy of the Employee, (b)
because of the birth of a child of the Employee, (c) because of the
placement of a child with the Employee in connection with the adoption
of such child by such Employee, or (d) for the purpose of caring for
such child for a period beginning immediately after such birth or
placement.
<PAGE> 6
The Committee, within a reasonable period of time
after a maternity or paternity leave of absence as described above, may
require the Employee to furnish evidence satisfactory to the Committee,
such as a doctor's statement, which establishes that such absence was
taken for maternity or paternity reasons as set forth hereinbefore and
which sets forth the number of days of such absence. If the Employee
fails to submit such evidence within a reasonable period of time after
such request, such absence shall be deemed not to have occurred for
maternity or paternity reasons for purposes of this 1.1(11).
(12) Participant shall mean an Employee who
participates in the Plan pursuant to the provisions of Article III and
shall also include individuals whether or not Employees who have amounts
to their credit which have not been distributed to them or their
Beneficiaries.
(13) Period of Separation shall mean a period of time
commencing with the date an Employee separates from service with the
Employer and ending with the date such Employee resumes employment with
the Employer.
(14) Period of Service shall mean, for purposes of
determining an Employee's initial or continued eligibility to
participate in the Plan, the time period commencing with the Employee's
<PAGE> 7
Employment Commencement Date with the Employer and ending on the date a
Period of Severance begins. An Employee's Employment Commencement Date
shall be that date on which he renders his first Hour of Service for the
Employer. A Period of Service for these purposes includes a Period of
Separation of less than twelve (12) consecutive months. In the case of
an Employee who separates from service with the Employer and later
resumes employment with the Employer, the Period of Service prior to his
resumption of employment shall be aggregated only if such Employee is a
Re-employed Individual. In the case of an Employee who separates from
service with the Employer, later resumes employment with the Employer
and is not a Re-employed Individual, for the purpose of determining such
Employee's Period of Service, such Employee's Employment Commencement
Date shall be the date on which such Employee renders his first Hour of
Service with the Employer upon his resumption of employment. An
Employee's Period of Service shall include service with a Related
Company, and where required in order to compute any Employee's Period of
Service, the term Employer shall include a Related Company.
(15) Period of Severance shall mean a period of time
commencing with the earlier of:
<PAGE> 8
(a) the date an Employee separates from
service with the Employer by reason of quitting, retirement, death or
discharge, or
(b) the date twelve (12) months after the date
an Employee separates from service with the Employer for any other
reason,
and ending, in the case of an Employee who separates from
service with the Employer by reason other than death, with the date such
Employee resumes employment with the Employer.
(16) Plan shall mean the Computer Associates Savings
Harvest Plan (the "CASH Plan"), which is intended to be a profit sharing
plan for purposes of Sections 401(a), 402, 412 and 417 of the Code, and,
where applicable, shall also include prior plans referred to in the
PREAMBLE of this Plan document.
(17) Plan Year shall mean the taxable year of the
Plan commencing on March 31 and ending on the following March 30.
(18) Re-Employed Individual shall mean a person who,
after having separated from service, resumes employment with the
Employer,
(a) with any non-forfeitable interest in his
Employer Contribution Account, or
(b) with no such non-forfeitable interest, and
who resumes such employment either (i) before incurring five (5)
<PAGE> 9
consecutive One Year Breaks-in-Service, or (ii) after incurring five (5)
consecutive One Year Breaks-in-Service but before his latest Period of
Severance equals or exceeds his Period of Service.
(19) Related Company shall mean any corporation which
is (a) a member of a controlled group of corporations (within the
meaning of Section 414(b) of the Code, as modified by Section 415(h) of
the Code solely for purposes of 5.5) of which the Employer is a member,
(b) any trade or business (whether or not incorporated) which is under
common control (within the meaning of Section 414(c) of the Code, as
modified by Section 415(h) of the Code solely for purposes of 5.5) with
the Employer, (c) any business organization which together with the
Employer forms an affiliated service group (within the meaning of
Section 414(m) of the Code), and (d) any other entity required to be
aggregated with the Employer pursuant to regulations under Section
414(o) of the Code.
(20) Trust shall mean the trust organized in the
State of New York which forms a part of this Plan and to which
contributions are made by the Employer in respect of Participants and
from which payments are made to Participants and their Beneficiaries
pursuant to the provisions of this Plan.
<PAGE> 10
(21) Trustee shall mean, at any time, the trustee or
trustees of the Trust then in office.
(22) Valuation Date shall mean the last day of each
calendar month; provided, however, that effective June 1, 1993,
Valuation Date shall mean each day of each calendar year.
1.2 The Effective Date of this amended and restated Plan shall
mean March 31, 1992, except as otherwise provided in the Appendix
attached to, and made a part of, this Plan.
<PAGE> 11
ARTICLE II
OBJECTIVE OF THE PLAN
2.1 The objective of this Plan is to provide a source of
retirement income for Participants and their Beneficiaries, if any, and
to enable Participants to share in the profits of the Employer.
2.2 The Plan is for the exclusive benefit of Participants and
their Beneficiaries, if any, and, except as provided in 9.6, at no time
prior to the satisfaction of all liabilities under the Plan to them may
any Plan assets be used for or diverted to any purpose other than for
their exclusive benefit.
<PAGE> 12
ARTICLE III
PARTICIPATION
3.1 Eligibility.
(1) Each Employee who was a Participant in the Plan as of
March 30, 1992 shall continue to participate herein in accordance with
the terms of the Plan as amended and restated.
(2) Except as provided in paragraph (3) below, each other
Employee shall be eligible to participate on the March 31 or September
30 which coincides with or next succeeds the completion by such Employee
of a Period of Service of one year; provided, however, that effective
April 1, 1993, each other Employee shall be eligible to participate on
the first day of the month which follows the completion by such Employee
of a Period of Service of one year. A Re-employed Individual who
completed a Period of Service of one year before his Period of Severance
began shall become eligible to participate on the date his Period of
Severance ends, except as provided in paragraph (3) below. An eligible
Employee shall remain eligible so long as his employment continues.
(3) Notwithstanding anything herein to the contrary, an
Employee who:
(a) is not within the class of full-time permanent
employees; or
(b) is included in a unit of employees covered by a
collective bargaining agreement between employee representatives
<PAGE> 13
and the Employer (unless such collective bargaining agreement
calls for the inclusion of such employees herein); or
(c) is a non-resident alien and who received no
earned income [within the meaning of Section 911(d) (2) of the
Code] from the Employer which constitutes income from sources
within the United States [within the meaning of Section 861(a)(3)
of the Code]
shall not be eligible to participate in this Plan.
3.2 Date of Participation. An Employee who is eligible to
participate shall become a Participant on the date he first becomes
eligible; provided, however, that no Employee shall be eligible for Pre-
Tax Contributions and Employer Matching Contributions, until he has
filed an executed Salary Reduction Agreement with the Employer
specifying the percentage by which his Compensation is to be reduced to
provide for the Pre-Tax Contributions described in 4.1, and no Employee
shall be eligible for Voluntary Contributions, until he has filed an
executed payroll deduction agreement with the Employer specifying the
percentage by which his Compensation is to be reduced to provide for the
Voluntary Contributions described in 4.4. If an Employee fails to file
an executed Salary Reduction Agreement with respect to Pre-Tax
Contributions or an executed payroll deduction agreement with respect to
Voluntary Contributions prior to the date he first becomes eligible to
do so, he shall be eligible for Pre-Tax Contributions, Employer Matching
Contributions and Voluntary Contributions, as applicable, for the
payroll period immediately following the date he files an executed
<PAGE> 14
Salary Reduction Agreement or payroll deduction agreement, as
applicable, with the Employer.
3.3 Employment by Related Company. If an Employee who is an
active Participant in the Plan ceases to be employed by the Employer and
immediately following such cessation of employment becomes employed by
either (a) a Related Company which does not maintain the Plan or (b)
another entity in which the Employer maintains a fifty (50%) percent or
more ownership interest and which the Board of Directors of Computer
Associates International, Inc. designates as a Related Company for
purposes of this Section,
(i) such Employee shall not be considered to have
terminated employment with the Employer for purposes of Article VII or
to have separated from service with the Employer for purposes of 1(15)
and shall continue to be deemed an Employee hereunder, but solely for
the purpose of determining the Employee's nonforfeitable interest in his
Employer Contribution Account hereunder;
(ii) any Salary Reduction Agreement with respect to Pre-Tax
Contributions or payroll deduction agreement with respect to Voluntary
Contributions executed by such Employee shall be deemed canceled
effective as of the date of his cessation of employment with the
Employer and no further Contributions shall be made under the Plan on
behalf of or by such Employee with respect to any period during which
<PAGE> 15
the Employee ceases to be employed by the Employer as described above;
and
(iii) such Employee shall be deemed to have terminated
employment with the Employer only at such time as the Participant's
employment with the entity described in (a) or (b) above shall have
terminated.
<PAGE> 16
ARTICLE IV
CONTRIBUTIONS TO THE PLAN
4.1 Pre-Tax Contributions.
(a) Subject to the restrictions and limitations of 4.6(4),
4.7(1) and 5.5, the Employer shall make Pre-Tax Contributions on behalf
of each Participant in an amount equal to the amount by which such
Participant's Compensation has been reduced pursuant to the Salary
Reduction Agreement entered into between the Employer and the
Participant pursuant to 4.5; provided, however, that for the calendar
year beginning January 1, 1987 and for each calendar year thereafter, in
no event shall Pre-Tax Contributions made on behalf of any Participant
exceed $7,000, as may be adjusted from time to time by the Secretary of
the Treasury pursuant to Section 402(g)(5) of the Code. Pre-Tax
Contributions not exceeding five percent (5%) of the Participant's
Compensation shall be referred to as "Basic Pre-Tax Contributions" and
Pre-Tax Contributions in excess of five percent (5%) of the
Participant's Compensation shall be referred to as "Supplemental Pre-Tax
Contributions."
(b)(i) If the amount of Pre-Tax Contributions made on
behalf of a Participant for a calendar year exceeds $7,000, as adjusted,
such excess (and the income allocable thereto) shall be distributed to
such Participant no later than the April 15th first following such
calendar year. Notwithstanding anything herein to the contrary, (A) any
<PAGE> 17
excess Pre-Tax Contributions that may be distributed to a Participant
pursuant to this paragraph (b) for a calendar year shall be reduced by
any Excess Pre-Tax Contributions previously distributed to, or
recharacterized on behalf of, such Participant pursuant to 4.7(1)(d) for
the Plan Year beginning with or within such calendar year and (B) any
Pre-Tax Contributions distributed as excess Annual Additions pursuant to
5.5(2)(ii) shall be disregarded in determining whether the $7,000
limitation, as adjusted, is exceeded.
(ii) For the purpose of this paragraph (b), the income
allocable to excess Pre-Tax Contributions for a calendar year shall be
equal to the sum of the allocable gains or losses for such calendar
year, which shall be determined pursuant to (A) or (B) as follows:
(A) By multiplying the income or loss for the
calendar year allocable to the Participant's Pre-Tax Contribution
Account by a fraction, the numerator of which is the Participant's
excess Pre-Tax Contributions for the calendar year and the denominator
of which is the sum of (1) the Participant's Pre-Tax Contribution
Account as of the beginning of the calendar year and (2) the
Participant's Pre-Tax Contributions for said calendar year.
(B) Pursuant to the method of allocating income or
losses to Participants' Accounts as set forth in 5.3.
<PAGE> 18
The Committee shall have the complete discretion to determine which of
the methods set forth under (A) or (B) above shall be used with respect
to a calendar year, provided that the method chosen is applied in a
nondiscriminatory manner and consistently for all Participants and all
distributions of excess Pre-Tax Contributions for the calendar year.
4.2 Employer Matching Contributions. Subject to the restrictions
and limitations of 4.6(4), 4.7(2) and 5.5, the Employer shall
contribute to the Plan on behalf of each Participant as a "Matching
Contribution", an amount equal to fifty percent (50%) of such
Participant's Basic Pre-Tax Contribution, reduced by any amounts
allocated to such Participant's Account pursuant to 5.4; provided,
however, that if a Participant's Basic Pre-Tax Contributions during a
Plan Year shall be limited to an amount less than five (5%) percent of
the Participant's Compensation due to the $7,000 (as adjusted)
limitation set forth under 4.1(a), then such Employer Matching
Contribution shall be determined on the first five percent (5%) of the
aggregate of the Participant's Basic Pre-Tax Contributions and Voluntary
Contributions pursuant to 4.4. In no event shall the Employer Matching
Contribution for a Plan Year exceed two and one-half percent (2-1/2%) of
the Participant's Compensation.
4.3 Employer Discretionary Contributions. In addition to the
Contributions provided for in 4.1 and 4.2 and subject to the
restrictions and limitations of 4.6(4) and 5.5, the Employer may
<PAGE> 19
contribute to the Plan in respect of each Plan Year, as an "Employer
Discretionary Contribution", an amount as the Board of Directors of the
Employer shall, in its sole discretion, determine.
4.4 Voluntary Contributions. Subject to the restrictions and
limitations of 4.7(2) and 5.5, a Participant may, on such forms as
prescribed by the Committee, elect to make Voluntary Contributions to
the Plan on an after-tax basis through regular payroll deductions in an
amount equal to any whole percentage not less than two percent (2%) or
greater than fifteen percent (15%) of the Participant's Compensation for
the Plan Year. Notwithstanding anything in this Section or 4.5 to the
contrary, in no event shall the total amount of Pre-Tax Contributions,
pursuant to 4.1 and 4.5, and Voluntary Contributions for any Plan Year
exceed fifteen percent (15%) of the Participant's Compensation.
4.5 Salary Reduction Agreements. Each eligible Employee who
desires to have the Employer make Pre-Tax Contributions on his behalf
shall enter into a written Salary Reduction Agreement with the Employer
which, subject to the provisions of 4.8, will be applicable to payroll
periods commencing on and after the date the Salary Reduction Agreement
is executed. Subject to the provisions of 4.1, the terms of any Salary
Reduction Agreement shall provide that the Participant agrees to accept
a reduction in his Compensation equal to any whole percentage not less
<PAGE> 20
than two percent (2%) or greater than fifteen percent (15%). In
consideration of such Agreement, the Employer shall make Pre-Tax
Contributions to the Participant's Account for each payroll period
during which the Salary Reduction Agreement is in force, in an amount
equal to the total amount by which the Participant's Compensation was
reduced during such payroll period.
4.6 Form and Payment of Contributions to the Trust.
(1) Pre-Tax Contributions, Voluntary Contributions and
Employer Matching Contributions shall be made in cash; provided,
however, that Employer Matching Contributions to the Company Stock Fund
(as set forth in 10.4) may be made in shares of common stock of
Computer Associates International, Inc.
(2) Employer Discretionary Contributions may be made in
cash and/or in kind, including, in the case of such Contributions to the
Company Stock Fund (as set forth in 10.4), shares of common stock of
Computer Associates International, Inc.; provided, however, that no
Contribution in kind may be made which would violate the prohibited
transaction rules of Section 4975 of the Code, or the corresponding
rules under Section 406 of ERISA.
(3) Contributions pursuant to 4.4 and paragraphs (1) and
(2) above shall be deposited into the Trust Fund at the time and in
accordance with procedures established by the Committee, subject to the
following: (a) Contributions pursuant to 4.4 and paragraph (1) shall
be deposited into the Trust Fund as soon as practicable following the
<PAGE> 21
end of the payroll period with respect to which the Participant's
Compensation was reduced pursuant to the Salary Reduction Agreement or
payroll deduction agreement; (b) Contributions pursuant to 4.4 and
paragraph (1) shall be deposited into the Trust Fund no later than the
time prescribed by law for the contribution of such amounts to the Plan;
and (c) Contributions pursuant to 4.4 and paragraphs (1) and (2) above
shall be deposited into the Trust Fund no later than the time prescribed
by law for filing the Employer's Federal income tax return for the
taxable year for which the applicable Contribution is made, including
extensions thereof.
(4) The aggregate of Pre-Tax Contributions, Employer
Matching Contributions and Employer Discretionary Contributions for any
Plan Year shall not exceed the lesser of (a) the maximum amount
deductible by the Employer under Section 404(a)(3)(A) of the Code as in
effect for the Plan Year, including any carryover deduction allowed
thereunder, or (b) the maximum amount permissible under 5.5.
4.7 Non-discrimination Tests.
(1) (a) As of each Valuation Date (or at such other
intervals as it shall deem proper), the Committee shall review the
amount of Pre-Tax Contributions made to the Plan on behalf of
Participants in order to insure that one of the following non-
discrimination tests, pursuant to Section 401(k)(3) of the Code, will be
satisfied as of the end of the Plan Year:
<PAGE> 22
(i) the Actual Deferral Percentage (as hereinafter
defined) for Highly Compensated Employees eligible to participate in the
Plan is not more than the Actual Deferral Percentage for the group of
all other Employees eligible to participate in the Plan multiplied by
1.25; or
(ii) the Actual Deferral Percentage for Highly
Compensated Employees eligible to participate in the Plan does not
exceed the Actual Deferral Percentage for the group of all other
Employees eligible to participate in the Plan by more than two (2)
percentage points, and the Actual Deferral Percentage for the group of
Highly Compensated Employees eligible to participate in the Plan is not
more than the Actual Deferral percentage for the group of all other
Employees eligible to participate in the Plan multiplied by 2.
(b) For purposes of the preceding paragraph (1) (a):
(i) Actual Deferral Percentage means, with respect
to the group of Highly Compensated Employees eligible to participate in
the Plan and the group of all other Employees eligible to participate in
the Plan, the average of the ratios (calculated separately for each
Employee in each group) of the Pre-Tax Contributions made on behalf of
each such Employee for the Plan Year (including any excess Pre-Tax
Contributions distributed under 4.1(b) to Participants who are Highly
Compensated Employees and excluding any such distributions to
Participants who are not Highly Compensated Employees and any Pre-Tax
Contributions distributed as excess Annual Additions pursuant to
5.5(2)(ii)) to such Employee's Compensation for such Plan Year. For
purposes of this subparagraph (i), Compensation shall mean compensation
within the meaning of Section 414(s) of the Code and any regulations
promulgated thereunder by the Secretary of the Treasury. The period
which shall be used to determine Compensation for purposes of this
subparagraph (i) for a Plan Year shall, in the discretion of the
Committee, be either such Plan Year or the calendar year ending within
such Plan Year; provided, however, that selection of the period
described herein by the Committee shall be uniformly applied to
<PAGE> 23
determine the Compensation of each eligible Employee for such Plan Year.
(ii) Highly Compensated Employee means any Employee,
including an employee of a Related Company, who during the Plan Year for
which a determination is being made or the preceding Plan Year (A) was
at any time a five percent (5%) owner (as defined in Section 416(i)(l)
of the Code), (B) received Compensation from the Employer in excess of
$75,000, (C) received Compensation from the Employer in excess of
$50,000 and was in the group consisting of the top twenty percent (20%)
of the Employees ranked on the basis of Compensation paid during such
Plan Year, or (D) was at any time an officer and received Compensation
greater than fifty percent (50%) of the amount in effect under Section
415(b)(1)(A) of the Code for such Plan Year. The dollar amounts set
forth in clauses (B) and (C) herein shall be adjusted at the same time
and in the same manner as any adjustment by the Secretary of the
Treasury under Section 415(d) of the Code.
An Employee not described in clause (B), (C) or (D)
above for the preceding Plan Year shall not be treated as described in
any of said clauses for the Plan Year for which a determination is being
made unless such Employee is a member of the group consisting of the one
hundred (100) Employees paid the greatest Compensation during such Plan
Year.
For purposes of clause (D) above, no more than fifty
(50) Employees (or, if less, the greater of three (3) Employees or ten
percent (10%) of Employees) shall be treated as officers.
In determining the number of Employees in the top-paid
group under clause (C) above or the number of officers taken into
account under the immediately preceding paragraph, the following
Employees shall be excluded: (1) Employees who have not completed at
least six (6) months of service; (2) Employees who normally work less
than seventeen and one-half (17-1/2) hours per week; (3) Employees who
normally work during not more than six (6) months during any Plan Year;
(4) Employees who have not attained age twenty-one (21); and (5) except
to the extent provided in regulations, Employees who are included in a
unit of employees covered by an agreement which the Secretary of Labor
<PAGE> 24
finds to be a collective bargaining agreement between employee
representatives and the Employer.
If any individual is a Family Member (as defined in
Section 414(q)(6)(B) of the Code) of a five percent (5%) owner (as
defined above) or one of the top ten (10) Highly Compensated Employees
ranked by Compensation paid during the Plan Year, then for purposes of
determining Highly Compensated Employees and applying the non-
discrimination tests set forth under this 4.7, such individual shall
not be treated as a separate Employee, and any Compensation paid to, and
any Pre-Tax or Employer Matching Contributions made on behalf of, or any
Voluntary Contributions made by, such individual, shall be treated as if
paid to, or made on behalf of or by, such five percent (5%) owner or
Highly Compensated Employee. Family Members with respect to such Highly
Compensated Employees shall be disregarded as separate employees in
determining the Actual Deferral Percentage and the Contribution
Percentage both for Participants who are not Highly Compensated
Employees and Participants who are Highly Compensated Employees.
A former Employee shall be a Highly Compensated
Employee if such Employee was a Highly Compensated Employee upon
separation from service or at any time after attaining age fifty-five
(55).
For purposes of this subparagraph (ii), Compensation
means compensation within the meaning of Section 414(q)(7) of the Code.
In addition, the determination of Highly Compensated Employees,
including the determination of the number and identity of Employees in
the top-paid group, the top one hundred (100) Employees and the number
of Employees treated as officers, shall be made in accordance with the
regulations promulgated under Section 414(q) of the Code.
For purposes of this subparagraph (ii), Employees
shall not include Employees who are non-resident aliens and who
receive no earned income (within the meaning of Section 911(d)(2) of the
Code) from the Employer which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the Code).
<PAGE> 25
(c) In the event the Committee determines, based
upon a review of the Actual Deferral Percentages, that the non-
discrimination tests set forth in paragraph (1)(a) above will not be met
by the end of the Plan Year, it shall notify the Employer to take
measures pursuant to paragraph (1) of 4.8 in order to insure compliance
with the non-discrimination rules of Section 401(k)(3) of the Code.
(d)(i) If, after the close of a Plan Year, there are
Excess Pre-Tax Contributions (as defined in (iii) below) due to the
failure to meet either of the non-discrimination tests set forth in
paragraph (1)(a) of this 4.7, then, within two and one-half (2-1/2)
months of the close of such Plan Year, such Excess Pre-Tax Contributions
(and any income allocable thereto) shall be distributed to Highly
Compensated Employees on the basis of the respective portions of the
Excess Pre-Tax Contributions attributable to each such Employee by
reducing the Pre-Tax Contributions made on behalf of Highly Compensated
Employees in order of their Actual Deferral Percentages beginning with
the highest of such Percentages, until all of such Excess Pre-Tax
Contributions have been distributed; provided, however, that in lieu of
such distribution, such Highly Compensated Employees may be permitted,
in accordance with Section 401(k)(8)(A)(ii) of the Code and the
regulations promulgated thereunder, to elect to have such Excess Pre-Tax
Contributions recharacterized as Voluntary Contributions, subject to the
provisions of paragraph (2) of this 4.7 and 5.5. Excess Pre-Tax
Contributions of Participants who are subject to the Family Member
<PAGE> 26
aggregation rules set forth in 4.7(1)(b)(ii) shall be allocated among
the Family Members in proportion to the Pre-Tax Contributions (and
amounts treated as Pre-Tax Contributions pursuant to 4.7(1)(b)(ii)) of
each Family Member that is combined to determine the combined Actual
Deferral Percentage. Notwithstanding anything herein to the contrary,
any Excess Pre-Tax Contributions that may be distributed or
recharacterized pursuant to this paragraph (d) with respect to a
Participant for a Plan Year, shall be reduced by any excess Pre-Tax
Contributions previously distributed to such Participant pursuant to
4.1(b) for the calendar year ending with or within such Plan Year.
(ii) For the purpose of this paragraph (d), the income
allocable to Excess Pre-Tax Contributions for a Plan Year shall be equal
to the sum of the allocable gains or losses for such Plan Year, which
shall be determined pursuant to (A) or (B) as follows:
(A) By multiplying the income or loss for the Plan
Year allocable to the Participant's Pre-Tax Contribution Account by a
fraction, the numerator of which is the Participant's Excess Pre-Tax
Contributions for the Plan Year and the denominator of which is the sum
of (1) the Participant's Pre-Tax Contribution Account as of the
beginning of the Plan Year and (2) the Participant's Pre-Tax
Contributions for said Plan Year.
<PAGE> 27
(B) Pursuant to the method of allocating income or
losses to Participants' Accounts as set forth in 5.3. The Committee
shall have the complete discretion to determine which of the methods set
forth under (A) or (B) above shall be used with respect to a Plan Year,
provided that the method chosen is applied in a nondiscriminatory manner
and consistently for all Participants and all distributions of Excess
Pre-Tax Contributions for the Plan Year.
(iii) For purposes of this paragraph (d), "Excess
Pre-Tax Contributions" means, with respect to a Plan Year, the aggregate
amount of Pre-Tax Contributions actually paid over to the Plan on behalf
of Highly Compensated Employees for such Plan Year, over the maximum
amount of Pre-Tax Contributions permitted under the non-discrimination
tests set forth in paragraph (1)(a) of this 4.7 for such Plan Year.
(2) (a) As of each Valuation Date (or at such other
intervals as it shall deem proper), the Committee shall review the
amount of Employer Matching Contributions and Voluntary Contributions
made to the Plan during the Plan Year in order to insure that the
Contribution Percentage (as hereinafter defined) for Highly Compensated
Employees (as defined in subparagraph (ii) of the preceding paragraph
(1)(b) of this 4.7) eligible to participate in the Plan does not
exceed, pursuant to Section 401(m)(2)(A) of the Code, the greater of
<PAGE> 28
(i) one hundred twenty-five percent (125%) of
the Contribution Percentage for all other Employees eligible to
participate in the Plan, or
(ii) the lesser of (A) two hundred percent
(200%) of the Contribution Percentage for all other Employees eligible
to participate in the Plan, or (B) the Contribution Percentage for all
other Employees eligible to participate in the Plan plus two (2)
percentage points.
(b) For the purposes of the preceding
paragraph (2)(a), "Contribution Percentage" means, with respect to the
group of Highly Compensated Employees eligible to participate in the
Plan and the group of all other Employees eligible to participate in the
Plan, the average of the ratios (calculated separately for each Employee
in each group) of the sum of Employer Matching Contributions and
Voluntary Contributions allocated to each such Employee's Account for
the Plan Year (excluding any Voluntary Contributions distributed as
excess Annual Additions pursuant to 5.5(2)(ii)), to such Employee's
Compensation for such Plan Year. For purposes of this paragraph (b),
Compensation shall mean compensation within the meaning of Section
414(s) of the Code and any regulations promulgated thereunder by the
Secretary of the Treasury. The period which shall be used to determine
Compensation for purposes of this paragraph (b) for a Plan Year shall,
in the discretion of the Committee, be either such Plan Year or the
calendar year ending within such Plan Year; provided, however, that
selection of the period described herein by the Committee shall be
uniformly applied to determine the Compensation of each eligible
Employee for such Plan Year.
<PAGE> 29
(c)(i) If, after the close of a Plan Year, there are
Excess Aggregate Contributions (as defined in (iii) below) due to the
failure to meet the non-discrimination test set forth in the preceding
paragraph (2)(a) of this 4.7, then, within two and one-half (2-1/2)
months of the close of such Plan Year, such Excess Aggregate
Contributions (and any income allocable thereto) shall be distributed to
Highly Compensated Employees on the basis of the respective portions of
Excess Aggregate Contributions attributable to each such Employee by
reducing such Contributions for Highly Compensated Employees in order of
their Contribution Percentages beginning with the highest of such
Percentages until all of such Excess Aggregate Contributions have been
distributed. Excess Aggregate Contributions of Participants who are
subject to the Family Member aggregation rules set forth in
4.7(1)(b)(ii) shall be allocated among the Family Members in proportion
to the Employer Matching and Voluntary Contributions (or amounts treated
as Employer Matching and Voluntary Contributions pursuant to
4.7(1)(b)(ii)) of each Family Member that is combined to determine the
combined Contribution Percentage.
(ii) For the purpose of this paragraph (c), the income
allocable to Excess Aggregate Contributions for a Plan Year shall be
equal to the sum of the allocable gains or losses
for such Plan Year, which shall be determined pursuant to (A) or (B) as
follows:
(A) By multiplying the income or loss for the Plan
Year allocable to the Participant's Voluntary Contribution Account and
<PAGE> 30
the portion of the Participant's Employer Contribution Account which is
attributable to Employer Matching Contributions by a fraction, the
numerator of which is the Participant's Excess Aggregate Contributions
for the Plan Year and the denominator of which is the sum of (1) the
Participant's Employer Matching and Voluntary Contribution Accounts as
of the beginning of the Plan Year and (2) the Participant's Employer
Matching and Voluntary Contributions for said Plan Year.
(B) Pursuant to the method of allocating income or
losses to Participants' Accounts as set forth in 5.3.
The Committee shall have the complete discretion to determine which of
the methods set forth under (A) or (B) above shall be used with respect
to a Plan Year, provided that the method chosen is applied in a
nondiscriminatory manner and consistently for all Participants and all
distributions of Excess Aggregate Contributions for the Plan Year.
(iii) For purposes of this paragraph (c), "Excess
Aggregate Contributions" means, with respect to any Plan Year, the
aggregate amount of Employer Matching Contributions and Voluntary
Contributions actually paid to the Plan on behalf of Highly Compensated
Employees for the Plan Year over the maximum amount of such
Contributions permitted under the non-discrimination test set forth in
paragraph (2)(a) of this 4.7 for such Plan Year.
<PAGE> 31
(3) Notwithstanding anything herein to the contrary, all
or any portion of Employer Matching Contributions made to the Plan
during the Plan Year may, in accordance with the regulations promulgated
under Sections 401(k) and 401(m) of the Code, be treated as Pre-Tax
Contributions for purposes of the nondiscrimination test set forth in
paragraph (1) above for the Plan Year, and to the extent so treated
shall (a) not be subject to the nondiscrimination test set forth in
paragraph (2) above for the Plan Year, (b) be allocated to the
Participant's Pre-Tax Contribution Account, and (c) be subject to all of
the vesting and distribution requirements relating to Pre-Tax
Contributions under the terms of this Plan.
(4) The non-discrimination tests set forth under this
Section 4.7 shall be subject, if applicable, to the regulations set
forth under Section 401(m) of the Code relating to the multiple use of
alternative limitations under Sections 401(k)(3)(A)(ii)(II) and
401(m)(2)(A)(ii) of the Code.
(5) Notwithstanding anything in this Section or this
Article to the contrary and subject to the limitations set forth in
4.6(4) and 5.5, the Employer may, in accordance with the regulations
promulgated under Sections 401(k) and (m) of the Code, make Qualified
Nonelective Contributions (as defined hereinafter) to the Plan for any
Plan Year on behalf of eligible Employees who are not Highly Compensated
Employees and considered under such tests, if the Employer shall
determine that such Contributions are necessary to ensure that the non-
discrimination tests set forth in paragraphs (1) and (2) of this Section
<PAGE> 32
will be satisfied for the Plan Year. For purposes of this paragraph
(5), Qualified Nonelective Contributions means contributions made by the
Employer, other than Employer Matching Contributions, that (a) the
Participant may not elect to have paid in cash or other benefits instead
of being contributed to the Plan, (b) are designated by the Employer as
Qualified Nonelective Contributions, (c) are allocated to a
Participant's Pre-Tax Contribution Account, and (d) are subject to all
of the vesting and distribution requirements relating to Pre-Tax
Contributions under the terms of this Plan.
4.8 Amendment and Revocation of Salary Reduction Agreements.
(1) The Employer may amend or revoke its Salary Reduction
Agreement, with respect to Pre-Tax Contributions, and/or payroll
deduction agreement, with respect to Voluntary Contributions, with any
Participant who is a Highly Compensated Employee (as defined in
paragraph (1)(b) of 4.7) at any time if the Committee determines that
such amendment or revocation is necessary to insure that the non-
discrimination tests set forth in 4.7 are satisfied for any Plan Year.
(2) The Employer may at any time amend or revoke its
Salary Reduction Agreement, with respect to Pre-Tax Contributions,
and/or payroll deduction agreement, with respect to Voluntary
Contributions, with a Participant if the Employer determines that such
amendment or revocation is necessary to insure that a Participant's
Annual Additions will not exceed the limitations under 5.5.
<PAGE> 33
(3) A Participant may amend his Salary Reduction
Agreement, with respect to Pre-Tax Contributions, and/or payroll
deduction agreement, with respect to Voluntary Contributions, not more
than one time during each three (3) month period, to increase or
decrease the amount of Pre-Tax Contributions or Voluntary Contributions
made to the Plan on his behalf. Any such amendment shall become
effective for the payroll period immediately following receipt by the
Employer of notice of the amendment.
(4) A Participant may revoke his Salary Reduction
Agreement, with respect to Pre-Tax Contributions, and/or payroll
deduction agreement, with respect to Voluntary Contributions, at any
time during the Plan Year, and such revocation shall be effective for
the payroll period immediately following receipt by the Employer of
notice of the revocation. A Participant who revokes his Salary
Reduction Agreement and/or payroll deduction agreement shall not be
permitted to enter into a new Salary Reduction Agreement and/or payroll
deduction agreement, as applicable, with the Employer until the first
payroll period beginning after the end of a three (3) month period
commencing with the effective date of such revocation.
4.9 Make-Up Contributions. In the event that the Committee
determines prior to the close of any Plan Year that additional Pre-Tax
Contributions may be made on behalf of any Participant, or that any
Participant may make additional Voluntary Contributions without
violating the provisions of 4.7 or 5.5, such Participants may be
permitted, within the sole discretion of the Committee which shall be
granted in a uniform and nondiscriminatory manner, to revise their
<PAGE> 34
Salary Reduction Agreements, on a prospective basis only, or to make an
additional Voluntary Contribution, in accordance with a uniform
procedure for such Plan Year established by the Committee.
4.10 Rollover Contributions. If an Employee (whether or not a
Participant under this Plan) has received a distribution from a
retirement plan which meets the qualification requirements of Section
401(a) of the Code (hereinafter referred to as the "Transferor Plan"),
such Employee may, in accordance with procedures established by the
Committee, roll over the distribution received from the Transferor Plan
to this Plan, provided the following conditions are met:
(a) the rollover occurs on or before the 60th day
following his receipt of the distribution from the Transferor Plan;
(b) the rollover is in accordance with the provisions of
Section 402(a)(5) of the Code; and
(c) the amount rolled over is equal to all or a portion of
a "qualified total distribution", within the meaning of Section
402(a)(5)(E)(i) of the Code, received by the Employee from the
Transferor Plan, provided that such amount shall not include any
employee contributions contributed by the Employee to the Transferor
Plan other than deductible employee contributions within the meaning of
Section 72(o)(5) of the Code.
Such rolled over amount shall be allocated to the Employee's Account
hereunder in the manner described in 4.12 as if said Employee were a
Participant hereunder.
4.11 Transfers from Another Qualified Plan. With respect to an
Employee (whether or not a Participant under this Plan) who has an
undistributed balance to his credit in a Transferor Plan (as described
<PAGE> 35
in 4.10), the Committee may, in its sole discretion, approve a direct
transfer of such balance from such Transferor Plan to this Plan,
provided that the direct transfer shall satisfy the applicable
requirements of the Code. Such transferred amount shall be allocated to
the Employee's Account hereunder in the manner described in 4.12 as if
said Employee were a Participant hereunder.
4.12 Transfer Procedures. With respect to rollovers or transfers
to the Employee's Account pursuant to either 4.10 or 4.11, the
Committee shall develop such procedures and may require such information
from an Employee or the fiduciaries of the Transferor Plan desiring to
make such a rollover or transfer, as it deems necessary or desirable to
determine that the proposed rollover or transfer will meet the rollover
or transfer requirements under the Code. Upon approval by the
Committee, the amount rolled over or transferred shall be deposited in
the Trust Fund and shall be credited to the applicable Account
established in the Employee's name and administered in accordance with
the provisions of Article V. Rollovers made pursuant to 4.10 shall be
credited to the Employee's Rollover Contribution Account. Transfers
made pursuant to 4.11 shall be credited to the Employer's Rollover
Contribution Account, other than amounts which are attributable to
after-tax contributions which shall be credited to the Employee's
Voluntary Contribution Account.
4.13 Transfer to Other Qualified Plans. In the event of a
restructuring or reorganization of the Employer or the sale of a
<PAGE> 36
subsidiary or a division of the Employer pursuant to which Employees who
are Participants in the Plan become employed by the restructured or
acquiring entity, the Committee, upon the direction of the Board of
Directors of the Employer and to the extent permitted by law, shall
transfer the Accounts of such Participants to a plan maintained by the
restructured or acquiring entity, provided such plan meets the
qualification requirements under Section 401(a) of the Code.
<PAGE> 37
ARTICLE V
PARTICIPANTS' ACCOUNTS
5.1 Separate Accounts. Separate accounts in respect of each
Participant shall be maintained for:
(a) Pre-Tax Contributions made pursuant to 4.1; and
(b) Employer Contributions made pursuant to 4.2 and 4.3;
and
(c) Voluntary Contributions, if any, made pursuant to
4.4; and
(d) Rollover Contributions, if any, made pursuant to 4.10
or 4.11.
Such accounts shall be referred to respectively as the "Pre-Tax
Contribution Account", the "Employer Contribution Account", the
"Voluntary Contribution Account" and the "Rollover Contribution
Account", and shall be referred to collectively as the "Account".
5.2 Allocation of Employer Contributions.
(1) Any Pre-Tax Contributions, Employer Matching
Contributions and Voluntary Contributions which are deposited into the
Trust Fund in accordance with 4.6(3) shall be credited to Participants'
Accounts within the Plan Year in which they are contributed in a manner
determined by the Committee.
(2) Except as provided in 5.5 and paragraph (4) below,
for each Plan Year during which an Employer Discretionary Contribution
is made each Participant's Employer Contribution Account shall be
credited, at the end of such Year, with the following amounts
<PAGE> 38
attributable to Employer Discretionary Contributions:
(a) That portion of the Employer Discretionary
Contribution for such Plan Year which bears the same ratio that the
Participant's Compensation for such Plan Year which is non-Excess
Compensation bears to the Compensation of all Participants for such Plan
Year; plus
(b) That portion of the Employer Discretionary
Contributions for such Plan Year remaining after the allocation in
paragraph (a) above which bears the same ratio to such remaining
Employer Discretionary Contribution as such Participant's Excess
Compensation for such Plan Year bears to the Excess Compensation of all
Participants for such Plan Year; provided, however, that in no event
shall the percentage of a Participant's Excess Compensation allocated to
his Employer Contribution Account exceed the percentage of the
Participant's non-Excess Compensation so allocated by more than the
lesser of (i) the percentage of non-Excess Compensation allocated to the
Account or (ii) the greater of (A) 5.7% or (B) the percentage equal to
the portion of the rate of tax under Section 3111(a) of the Code (in
effect at the beginning of the Plan Year) which is attributable to old-
age insurance.
(c) To the extent of any Employer's Discretionary
Contributions remaining after the allocation in clauses (a) and (b)
above, that portion of such balance which bears the same ratio to such
<PAGE> 39
balance as each Participant's Compensation for such Plan Year bears to
the Compensation of all Participants for such Plan Year.
(3) For purposes of this 5.2, the term "Excess
Compensation" shall mean the amount, if any, by which the Compensation
of a Participant exceeds the maximum amount which may be considered
"wages" under Section 3121(a)(1) of the Code in effect as of the
beginning of the Plan Year.
(4) With respect to Employer Discretionary Contributions,
no allocation shall be made for any Plan Year with respect to any
Participant whose employment terminated during such Plan Year, unless
such Participant shall have resumed employment during such Plan Year and
shall be employed at the end of such Plan Year.
(5) Notwithstanding anything herein to the contrary, if
the Plan shall fail to meet the applicable requirements of either
Section 401(a)(26), Section 410(b)(1) or Section 410(b)(2)(A)(i) of the
Code and the regulations promulgated thereunder for any Plan Year
beginning after December 31, 1989 due to the fact that Employer
Discretionary Contributions for the Plan Year have not been allocated to
a sufficient number or percentage of Participants for such Plan Year,
then the following provisions shall apply:
(i) The group of Participants eligible to receive an
allocation of Employer Discretionary Contributions for the Plan Year
shall, to the extent necessary to satisfy the requirements described
above, be expanded to include Participants who are not actively employed
<PAGE> 40
by the Employer on the last day of the Plan Year, beginning with those
Participants whose date of termination during such Plan Year was closest
to the last day of such Plan Year.
(ii) In the event that the provisions of this
paragraph (5) shall be applied during a Plan Year, such provisions shall
be deemed to be a retroactive amendment to the Plan adopted by the last
day of such Plan Year. In no event shall the application of this
paragraph (5) result in the elimination or reduction of benefits under
Section 411(d)(6) of the Code and the regulations promulgated
thereunder.
5.3 Allocation of Net Income or Net Loss.
(1) At each Valuation Date, each Pre-Tax Contribution
Account, Employer Contribution Account, Voluntary Contribution Account
and Rollover Contribution Account shall be credited or charged with that
portion of the Net Income or Net Loss of the respective investment funds
in which said Accounts are invested pursuant to 10.4 and Article XI,
for such Date which bears the same ratio to such Net Income or Net Loss
as the value of such Account, determined at the preceding Valuation
Date, bears to the value of all such Accounts within each respective
fund, determined at such preceding Valuation Date.
(2) For purposes of this Section, the term "Net Income"
shall mean the excess, if any, of income and gains of the Trust for the
<PAGE> 41
Valuation Date over the expenses and losses of the Trust for such Date
and the term "Net Loss" shall mean the excess, if any, of expenses and
losses for such Valuation Date over income and gains for such Date.
(3) Notwithstanding paragraphs (1) and (2) above, the
amount of any Net Income or Net Loss attributable to the General Account
(as described under 5.1 of the Plan's Trust Agreement entered into
between the Company and the Trustees, as amended and in effect prior to
March 31, 1993) maintained under the Trust shall be credited or charged,
as the case may be, to such General Account.
5.4 Forfeitures and Unallocated Trust Funds.
(1) The balance which is forfeitable under Article VI in
the Employer Contribution Account of a Participant whose employment with
the Employer has terminated shall be forfeited as of the earlier of (a)
the date such Participant receives a distribution of his non-forfeitable
Account pursuant to Article VII or (b) the date such Participant incurs
five (5) consecutive One Year Breaks-in-Service. For purposes of this
Section, if a Participant terminates employment and has a zero percent
(0%) non-forfeitable interest in his Employer Contribution Account, such
Participant shall be deemed to have received a distribution of his non-
forfeitable Employer Contribution Account as of the date of his
termination of employment.
(2) If a former Participant suffers a forfeiture pursuant
to 5.4(1)(a), the amount of the forfeiture shall be restored to the
<PAGE> 42
Participant's Employer Contribution Account only if such Participant is
reemployed by the Employer prior to his incurring five (5) consecutive
One Year Breaks-in-Service and repays to the Plan the full amount of the
distribution attributable to his Employer Contribution Account prior to
the fifth (5th) anniversary of his reemployment date. If a Participant
shall be deemed to have received a distribution of his Employer
Contribution Account pursuant to paragraph (1) above, the forfeiture
shall be restored to such Participant's Employer Contribution Account if
the Participant is reemployed by the Employer prior to incurring five
(5) consecutive One Year Break-in-Service. Restored forfeitures shall
be credited to the Participant's Employer Contribution Account no later
than the Valuation Date next following either the Participant's
reemployment date or the date upon which the Participant's repayment to
his Employer Contribution Account is made, whichever is applicable.
Funds for restoration shall be taken from current forfeitures. To the
extent such current forfeitures are inadequate, additional contributions
shall be made by the Employer for this purpose.
(3) Any amounts held in the Trust Fund which have not been
credited to Participants' Accounts under the Plan may be applied in the
manner described in paragraph (4) below, in accordance with procedures
established by the Committee, provided that any amounts held in the
Trust Fund which have not been credited to Participants' Accounts under
the Plan as of the last day of the Plan Year shall be credited as of
such date by applying such amounts in the manner described in paragraph
(4) below.
<PAGE> 43
(4) Forfeitures shall be applied according to the
following priority schedule:
(a) First, to make restoration of prior forfeitures
pursuant to paragraph (2) above;
(b) Second, if funds remain, to defray
administrative costs of the Plan as determined by the Committee;
(c) Third, if funds remain, to the Matching
Contribution Accounts of remaining active Participants in lieu of
Matching Contributions which otherwise would have been made on or after
the date of the forfeiture.
5.5 (1) Limitations on Annual Additions. Notwithstanding any
other provision of the Plan, the sum of Annual Additions [as defined in
paragraph (3)] to a Participant's Account, when added to the Annual
Additions to the account of the Participant under any other Defined
Contribution Plan [as defined in paragraph (3)] maintained by the
Employer or a Related Company for any Limitation Year [as defined in
paragraph (3)], shall not exceed the lesser of (i) twenty-five percent
(25%) of such Participant's Limitation Year Compensation [as defined in
paragraph (3)], or (ii) the greater of Thirty Thousand Dollars
($30,000), or one-fourth (1/4) of the defined benefit dollar limitation
set forth under Section 415(b)(1)(A) of the Code as in effect for such
Limitation Year.
(2) Removal of Excess Contributions. In the event the
amount of Annual Additions made on behalf of a Participant during any
Limitation Year exceeds the maximum limitation on Annual Additions set
forth in paragraph (1), the following procedure shall be followed in
<PAGE> 44
order that such excess amount shall not be deemed an Annual Addition for
such Limitation Year:
(i) If the Participant with respect to whom the
excess amount was allocated has made Voluntary Contributions to a
Defined Contribution Plan maintained by the Employer for said Limitation
Year, all or a portion of such Voluntary Contributions (and any
increments attributable thereto) shall be returned to the Participant
in order to eliminate the excess amount.
(ii) If the Participant made no Voluntary
Contributions to a Defined Contribution Plan of the Employer during the
Limitation Year or, if after the return of Voluntary Contributions under
paragraph (i) above, an excess amount remains as a result of a
reasonable error in determining the amount of Pre-Tax Contributions that
the Participant could make under the limits set forth in paragraph (1),
Pre-Tax Contributions (and to the extent required by regulations or
rulings promulgated by the Department of the Treasury, any increments
attributable thereto) sufficient to eliminate the excess amount shall be
distributed to the Participant.
(iii) If, notwithstanding the procedures followed in
paragraphs (i) and (ii) above, an excess amount of Annual Additions
remains allocated to a Participant's Account under this Plan, and such
excess amount has resulted either from the allocation of forfeitures, a
reasonable error in estimating such Participant's Compensation, or such
other facts and circumstances which the Commissioner of the Internal
Revenue Service finds justify the utilization of the procedure
immediately following, Employer Discretionary Contributions or Employer
Matching Contributions on behalf of such Participant for the following
Limitation Year shall be reduced by the amount of such excess if the
Participant is entitled to such Contributions and is covered by the Plan
at the end of the next Limitation Year, and in the event that such
Participant is not covered by the Plan at the end of the next Limitation
Year, such excess amounts shall be held in an unallocated suspense
account for such Limitation Year and allocated to the Accounts of the
remaining Participants (to the extent permissible under this 5.5) in
proportion to their Compensation, determined as of the end of such
Limitation Year. Such allocation shall be made before any Employer
Discretionary or Matching Contributions may be made for such next
Limitation Year. Furthermore, the excess amounts shall be used to
reduce Employer Discretionary or Matching Contributions for the next
<PAGE> 45
Limitation Year (and succeeding Limitation Years, as necessary) for all
of the remaining Participants in the Plan. For purposes of this
subparagraph (iii), excess amounts shall not be distributed to
Participants or former Participants.
(iv) If, notwithstanding the procedures followed in
paragraphs (i), (ii) and (iii) above, an excess amount remains allocated
to a Participant's Account under this Plan, such excess shall be
considered a contribution made by a mistake of fact and shall be
returned to the Employer in order to eliminate such excess.
(3) Definitions. For the purpose of this 5.5, the
following definitions shall apply:
(i) Annual Additions shall mean the sum of the
following:
(A) The amount of Employer Matching
Contributions, Employer Discretionary Contributions, Pre-Tax
Contributions (other than excess Pre-Tax Contributions distributed
pursuant to 4.1(b)) and amounts allocated under 5.4 to a Participant's
Account during a Limitation Year.
(B) The amount of Employer Contributions, Pre-
Tax Contributions and forfeitures allocated to a Participant's account
under any other Defined Contribution Plan during the Limitation Year.
(C) The amount of Participant Voluntary
Contributions allocated to a Participant's Account during the Limitation
Year.
(D) Amounts described in Sections 415(l)(1)
and 419A(d)(2) of the Code.
Rollover Contributions under 4.10 and
amounts transferred under 4.11 shall not be counted as Annual
Additions, nor shall the earnings on such Contributions or amounts be
counted as Annual Additions.
<PAGE> 46
(ii) Defined Contribution Plan shall mean any plan
described in Section 401(a) or 403(a) of the Code which provides an
individual account for each Participant and under which benefits are
based solely on amounts (inclusive of forfeitures) contributed to the
Participant's account, plus any income, expenses, gains and losses
thereon. For purposes of this 5.5, (A) all Defined Contribution Plans,
as defined herein, and (B) all defined contribution plans described in
Treasury Regulation Section 1.415-3(d)(2) (relating to Voluntary
Contributions to defined benefit plans) maintained by the Employer or
Related Companies, whether or not terminated, are to be treated as a
Defined Contribution Plan maintained by the Employer.
(iii) Limitation Year shall mean the Plan Year.
(iv) Limitation Year Compensation shall mean
compensation within the meaning of Section 415(c)(3) of the Code (and
the regulations promulgated thereunder) for the Limitation Year.
<PAGE> 47
ARTICLE VI
VESTING
6.1 Vesting of Pre-Tax, Voluntary and Rollover Contribution
Accounts. A Participant's Pre-Tax Contribution Account, Voluntary
Contribution Account and Rollover Contribution Account shall be 100%
vested and non-forfeitable at all times.
6.2 Vesting of Employer Contribution Accounts.
(1)(a) Except as otherwise provided herein and in
paragraphs (2) and (3) below, the Employer Contribution Account of a
Participant who completes one (1) Hour of Service on or after January 1,
1989 shall become non-forfeitable in accordance with the following
schedule:
<TABLE>
<CAPTION>
Years of Service Non-Forfeitable Percentage
---------------- --------------------------
<S> <C>
Less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
</TABLE>
In no event shall such Participant's non-
forfeitable right to his Employer Contribution Account on or after
January 1, 1989 be less than such Participant's non-forfeitable right to
his Employer Contribution Account determined as of December 31, 1988 in
accordance with the vesting schedule set forth in the Plan as of such
date.
(2) Upon the attainment by a Participant of Normal
Retirement Age while employed by the Employer, or upon termination of
<PAGE> 48
employment by reason of death or Disability, a Participant's Employer
Contribution Account shall be non-forfeitable.
(3) In the event that:
(a) the Plan shall be terminated either wholly or
partially; or
(b) the Employer shall completely discontinue
contributions to the Plan,
the Employer Contribution Account of each Participant affected by such
termination or discontinuance of contributions shall be non-forfeitable.
6.3 Years of Service. For the purpose of 6.2 above, Years of
Service shall mean the number of whole years of an Employee's Period of
Service (as defined in 1.1(14)); provided, however, that in no event
shall Years of Service include Periods of Service prior to the date the
Employee attains age eighteen (18). Except as otherwise provided in
1.1(14) and the preceding sentence, in determining the number of whole
years of an Employee's Period of Service for the purpose of this 6.3,
all Periods of Service shall be aggregated and 365 days of service shall
be considered to be a whole Year of Service. After determining an
Employee's whole Years of Service for the purpose of 6.2, any remaining
less than 365-day Period of Service shall be disregarded.
<PAGE> 49
ARTICLE VII
DISPOSITION OF VESTED INTERESTS IN ACCOUNTS
7.1 Termination Other Than by Reason of Retirement, Disability
or Death.
(1) Except as provided in paragraph (2) below, the non-
forfeitable Account balance of a Participant who has terminated
employment with the Employer other than by reason of retirement,
Disability or death, shall be distributed to him in a lump sum no later
than 60 days following the end of the Plan Year in which his employment
terminated, provided that either (i) the value of such balance at the
date of distribution is $3,500 or less, or (ii) the Participant requests
such a distribution. If the value of such balance is greater than
$3,500 and the Participant does not request such a distribution, such
balance shall be held in the Fund until the Participant reaches his
Normal Retirement Age, at which time it shall be paid to him under any
method specified in 7.3 selected by such Participant.
(2) Paragraph (1) shall not apply if such Participant
shall be re-employed by the Employer before the end of such Plan Year,
and shall be so employed at the end of such Year.
7.2 (1) Payment at Normal Retirement Age. Upon a
Participant's termination of employment at or after Normal Retirement
Age, amounts credited to his Account shall be payable to him under any
method specified in 7.3 selected by such Participant. Except as
provided in 7.6(b), any payment under this subparagraph shall be made
or shall commence within 60 days following the end of the Plan Year in
<PAGE> 50
which occurs such termination of employment.
(2) Early Retirement Age or Disability. Except as
provided in 7.3(d), a Participant who terminates employment at or after
Early Retirement Age or due to Disability (before his attainment of
Normal Retirement Age) may elect to have the amounts credited to his
Pre-Tax, Voluntary and Rollover Contribution Accounts and the non-
forfeitable portion of his Employer Contribution Account paid to him
within 60 days following the end of the Plan Year in which occurs such
termination of employment under any method specified in 7.3 selected by
such Participant; provided, however that if the Participant does not
make the preceding election, such amounts shall be held in the Fund
until the Participant reaches his Normal Retirement Age, at which time
it shall be paid to him under any method specified in 7.3 selected by
the Participant.
(3) Payment Upon Death. In the event of the death of a
Participant prior to the commencement of benefit payments hereunder, the
Participant's non-forfeitable Account balance shall be paid to the
Beneficiary designated by the Participant in accordance with the
provisions of 7.4. The death benefit payable pursuant to this 7.2(3)
shall be paid either (i) in a lump sum, or (ii) in equal monthly
installments over a fixed period of years, provided such fixed period
does not exceed the life expectancy of such designated Beneficiary. The
method of payment shall be specified in the Beneficiary designation, or,
if not specified therein, may be selected by the Beneficiary, or if the
<PAGE> 51
Beneficiary is a minor, by the Beneficiary's legal guardian. In the
event the designated Beneficiary elects option (ii) immediately above
and dies prior to receiving the entire amount credited to the deceased
Participant's non-forfeitable Account, the balance of said non-
forfeitable Account shall be distributed to the estate of the designated
Beneficiary as soon as practicable following such Beneficiary's death.
Notwithstanding anything herein to the contrary, if the Participant's
non-forfeitable Account balance as of the date of death does not exceed
$3,500, the Committee shall pay the Participant's non-forfeitable
Account balance to his designated Beneficiary in a lump sum as soon as
practicable following the Participant's death.
7.3 Methods of Distribution. Distribution of amounts payable
under 7.2(1) or (2) shall be made in one of the following methods:
(a) in a lump sum; or
(b) in substantially equal monthly installments over a
fixed number of years not extending beyond the life expectancy of the
Participant or the life expectancy of the Participant and a designated
Beneficiary.
The Committee may provide for such installments by the
purchase and distribution to the Participant of a contract providing for
such installments, or may pay such installments directly from the Trust.
If the Participant commences to receive his vested Account
in installments and dies after his Required Beginning Date (as defined
<PAGE> 52
in 7.6(b)), the remaining installments shall be paid to the
Participant's designated Beneficiary at least as rapidly as under the
method of payment selected by the Participant and in accordance with
Section 401(a)(9) of the Code and the regulations promulgated
thereunder; provided, however, that the Beneficiary may elect to receive
the remaining installments in a single lump sum payment. If the
Participant commences to receive his vested Account in installments and
dies prior to his Required Beginning Date, the remaining installments
shall be distributed in accordance with 7.7.
(c) The Committee may, with the prior written consent of
the Participant, transfer part or all of the Trust assets credited to
his Account, to the Trustees of another plan qualified under either
Section 401(a) or Section 403(a) of the Code, which will accept such
transfer on behalf of the Participant.
(d) Notwithstanding anything in this Article to the
contrary, in the event the Participant's entire non-forfeitable Account
balance does not exceed $3,500, the Committee shall pay the Participant
a lump sum as soon as practicable following the Participant's
termination of employment.
7.4 Designation of Beneficiary.
(1) A Participant may designate one or more individuals or
one or more entities to receive the amounts payable pursuant to 7.2(3).
<PAGE> 53
Any such designation shall be written, signed by the Participant on a
form approved by the Committee, and shall be effective upon delivery to
the Committee. Any such designation and all subsequent designations may
be revoked at any time by delivery to the Committee of another
designation, executed in the same manner, which shall become effective
upon the same terms and conditions.
(2) (a) If a Participant is married at the time of his
death, his spouse shall be deemed to be his primary designated
Beneficiary unless he designates someone other than his spouse as
Beneficiary and his spouse consents, in writing, to such other
designation. Such spousal consent shall (i) acknowledge the effect of
such designation on the spouse's rights to benefits under the Plan, (ii)
acknowledge the specific non-spouse Beneficiary, if any, designated by
the Participant, including any class of Beneficiaries or contingent
Beneficiaries, which designations may not be changed without the
spouse's consent (unless the consent of the spouse expressly permits
such changes by the Participant without any requirement of further
consent by the spouse), and (iii) be witnessed by a notary public.
(b) Notwithstanding the provisions of subparagraph
(a) above, spousal consent to a designation of a Beneficiary other than
the spouse or to a subsequent change in Beneficiary shall not be
required if it is established to the satisfaction of the Committee that
such spousal consent cannot be obtained because (i) there is no spouse,
(ii) the spouse cannot be located, (iii) the Participant is legally
<PAGE> 54
separated or has been abandoned (within the meaning of local law) and
the Participant has a court order to such effect, or (iv) of such other
circumstances as the Secretary of the Treasury may, by regulations or
otherwise, prescribe. In the event the Participant's spouse is legally
incompetent to give such spousal consent hereunder, the spouse's legal
guardian, even if such guardian is the Participant, may give such
consent. A former spouse's consent shall not be binding on a new
spouse.
(3) In the event of the death of a Participant who shall
have no surviving Beneficiary pursuant to a Beneficiary designation in
effect, and who shall have no surviving spouse, the estate of the
Participant shall be the Beneficiary of such Participant, and
distribution of the amounts credited to the vested Account of such
Participant shall be made in such manner [described in 7.2(3)] as the
Participant's personal representative shall select.
(4) The rights of any spouse or Beneficiary hereunder
shall be extinguished to the extent that such rights are in conflict
with the provisions of any domestic relations order which is a
"Qualified Domestic Relations Order" within the meaning of Section
206(d)(3)(A) of ERISA.
7.5 Notification. The Committee shall provide each Participant
whose vested Account exceeds $3,500 with a written notice of
distribution no later than thirty (30) days and no more than ninety (90)
days prior to the date on which distributions are scheduled to commence.
Said notice shall set forth a general description of the material
features and an explanation of the relative values of, the optional
<PAGE> 55
forms of distribution set forth under 7.3 in a manner that would satisfy
the notice requirements of Section 417(a)(3) of the Code and the
regulations promulgated thereunder, and shall also inform the
Participant of his right, if any, to defer the commencement of his
distribution. Anything herein to the contrary notwithstanding, except
as provided in 7.6 below, (a) no benefit shall be payable under the
Plan to any Participant or Beneficiary hereunder unless and until such
Participant or Beneficiary shall submit a written application therefor,
on a form provided by the Committee, specifying the method in which such
benefit is to be paid, and (b) in the event that there shall be a change
in the investment funds available to Participants pursuant to 11.1 or a
change in the Plan Trustee, distributions under the Plan may be
suspended to the extent necessary to accomplish such changes.
7.6 Minimum Distribution Rules.
(a) Notwithstanding anything in this Plan to the contrary,
all distributions made pursuant to the provisions of this Article shall
be in accordance with the provisions of Section 401(a)(9) of the Code
and the Treasury Regulations promulgated thereunder, including the
minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of said Regulations. The aforesaid provisions and the
provisions of this 7.6 shall take precedence over any inconsistent
provisions set forth in this Plan.
(b) Notwithstanding anything in this Plan to the contrary,
the distribution of a Participant's vested Account hereunder shall
<PAGE> 56
commence no later than April 1st of the calendar year following the
calendar year in which the Participant attains age seventy and one-half
(70-1/2) (the "Required Beginning Date"); provided, however that if a
Participant has attained age seventy and one-half (70-1/2) before
January 1, 1988, said Participant's Required Beginning Date shall be the
April 1st of the calendar year following the calendar year in which such
Participant terminates employment, except that this proviso shall not
apply to a Participant who was a five percent (5%) owner (as defined in
Section 416(i) of the Code) at any time during the Plan Year ending with
or within the calendar year in which he attained age 66-1/2. A
Participant who is employed by the Employer upon attainment of age
seventy (70) may, upon attainment of such age, elect to receive a lump
sum distribution of his vested Account balance, which distribution shall
be made as soon as practicable thereafter; provided, however, that such
distribution shall be subject to 7.5(b) and to any of the applicable
provisions of 13.5 relating to distributions in the form of an Annuity
or Qualified Joint and Survivor Annuity. In addition, if a Participant
shall not have submitted a written application for benefits, as provided
in 7.5, at the time benefits become payable pursuant to this 7.6(b),
such Participant shall be deemed to have elected to receive a lump sum
payment of his Account, as described in 7.3(a), subject, however, to
any of the applicable provisions of 13.5 relating to distributions in
the form of an Annuity or Qualified Joint and Survivor Annuity.
<PAGE> 57
(c) The following minimum distribution rules shall apply
with respect to a Participant's vested Account on or after the
Participant's Required Beginning Date:
(i) The amount required to be distributed for
each calendar year, beginning with distributions for the first
Distribution Calendar Year and each succeeding Distribution Calendar
Year (as defined in subparagraph (v) below), shall be no less than the
quotient obtained by dividing the Participant's Benefit (as defined in
subparagraph (v) below) by the Applicable Life Expectancy (as defined in
subparagraph (v) below).
(ii) Notwithstanding anything herein to the
contrary, for calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Participant's designated Beneficiary,
the present value of any installment benefits payable to the Participant
shall be greater than fifty (50%) percent of the present value of the
total installment benefits payable to the Participant and his designated
Beneficiary.
(iii) Notwithstanding anything herein to the
contrary, for calendar years beginning after December 31, 1988, the
amount to be distributed during each Distribution Calendar Year,
beginning with distributions for the first Distribution Calendar Year,
shall not be less than the quotient obtained by dividing the
Participant's Benefit by the lesser of (A) the Applicable Life
<PAGE> 58
Expectancy or (B) if the Participant's spouse is not the
designated Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of Section 1.401(a)(9)-2 of the Treasury Regulations.
Distributions subsequent to the death of the Participant shall be
determined using the Applicable Life Expectancy as the relevant divisor
without regard to Section 1.401(a)(9)-2 of the Treasury Regulations.
(iv) The minimum distribution required for the
Participant's first Distribution Calendar Year shall be made on or
before the Participant's Required Beginning Date. The minimum
distribution for other Distribution Calendar Years, including the
minimum distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, shall be made on or before
December 31 of that Distribution Calendar Year.
(v) For the purpose of this paragraph (c), the
following definitions shall apply:
(A)(1) Applicable Life Expectancy shall
mean the Life Expectancy (or joint and last survivor expectancy)
calculated by using the attained age of the Participant (and designated
Beneficiary, if applicable) as of the Participant's (and designated
Beneficiary's, if applicable) birthday(s) in the applicable calendar
year, reduced by one for each calendar year which has elapsed since the
<PAGE> 59
date on which Life Expectancy (or joint and last survivor expectancy)
was first calculated; provided, however, that if Life Expectancy is
being recalculated pursuant to subparagraph (2) below, the Applicable
Life Expectancy shall be the Life Expectancy so recalculated. The
applicable calendar year shall be the first Distribution Calendar Year;
provided, however, that if Life Expectancy (or joint and last survivor
expectancy of the Participant and his spouse) is being recalculated
pursuant to subparagraph (2) below, the applicable calendar year
shall be each succeeding calendar year.
(2) Notwithstanding anything
hereinbefore to the contrary, a Participant may make a written election
no later than his Required Beginning Date, on the appropriate form
provided by the Plan Administrator, to have the permissive recalculation
rule set forth under Section 401(a)(9)(D) of the Code and the Treasury
Regulations promulgated thereunder apply with respect to the
determination of his Life Expectancy (and/or the Life Expectancy of his
spouse, if applicable). Such election shall become irrevocable as of
the Participant's Required Beginning Date. If the Participant fails to
make such election, the Life Expectancy of the Participant (and his
<PAGE> 60
spouse, if applicable) shall be determined without regard to such
provisions.
(B) Distribution Calendar Year shall mean a
calendar year for which a minimum distribution is required. Except as
otherwise provided under the Treasury Regulations promulgated under
Section 401(a)(9) of the Code, the first Distribution Calendar Year
shall be the calendar year immediately preceding the calendar year which
contains the Participant's Required Beginning Date.
(C) Life Expectancy shall mean the life
expectancy or the joint and last survivor expectancy, as applicable,
computed by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the Treasury Regulations.
(D) Participant's Benefit shall mean the
Participant's Account as of the last Valuation Date in the calendar year
immediately preceding a Distribution Calendar Year (the "Valuation
Calendar Year"), increased by the amount of any contributions or
forfeitures allocated to said Account during the Valuation Calendar Year
after the Valuation Date and decreased by distributions made during the
Valuation Calendar Year after the Valuation Date. For purposes of the
preceding sentence, if any portion of the minimum distribution for the
<PAGE> 61
first Distribution Calendar Year is made in the second Distribution
Calendar Year on or before the Participant's Required Beginning Date,
the amount of the minimum distribution made in the second Distribution
Calendar Year shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
7.7 Timing of Death Benefit Distributions.
(a) The distribution of death benefit payments hereunder
shall commence as soon as practicable following the Participant's date
of death, except as otherwise may be provided in this Section.
(b)(i) Notwithstanding anything in this Article to the
contrary and except as otherwise provided in subparagraph (ii) below, if
a Participant's date of death occurs prior to his Required Beginning
Date (as described in 7.6(b)), the distribution of his vested Account
shall be completed by December 31 of the calendar year which contains
the fifth anniversary of the Participant's date of death.
(ii) If any portion of the Participant's vested
Account is payable to a designated Beneficiary in installments,
distributions shall be made over a period not extending beyond the life
expectancy of the designated Beneficiary and shall commence (A) in the
case of a non-spouse Beneficiary, no later than December 31 of the
calendar year immediately following the calendar year during which
occurred the Participant's date of death, and (B) in the case of a
<PAGE> 62
surviving spouse, on or before the later of (1) December 31 of the
calendar year immediately following the calendar year during which
occurred the Participant's date of death or (2) December 31 of the
calendar year in which the Participant would have attained age 70-1/2.
(iii) For purposes of this paragraph (b), if the
surviving spouse dies before any payments to such spouse have commenced,
the provisions of subparagraph (ii) above, with the exception of clause
(B)(2) therein, shall be applied as if the surviving spouse were the
Participant.
(iv) For purposes of this paragraph (b), any amount
paid to a child of the Participant shall be treated as if it had been
paid to the surviving spouse if such amount shall become payable to the
surviving spouse upon such child reaching the age of majority (or other
designated event permitted under the regulations promulgated under
Section 401(a)(9) of the Code).
(v) The provisions of this paragraph (b) shall apply
with respect to the Participant's entire vested Account; provided,
however that if the Participant's vested Account is divided into
separate accounts as of his date of death (in accordance with the
Treasury Regulations promulgated under Section 401(a)(9) of the Code),
the provisions of this paragraph (b) may be separately applied to the
separate Beneficiaries (if any) of each such separate account.
Notwithstanding anything in this paragraph (b) to the contrary, if an
individual is designated as a Beneficiary in addition to the
Participant's surviving spouse, clause (2) of subparagraph (ii) above
<PAGE> 63
shall not apply, unless the Participant's vested Account is divided into
a separate account as described above and the only designated
Beneficiary with respect to such separate account is the surviving
spouse.
7.8 Valuation of Distributions.
(a) Commencing with distributions made subsequent to May
31, 1993, the Participant's vested Account balance to be distributed
pursuant to 7.1 or 7.2 of this Article VII or pursuant to any other
provision under this Plan, shall be determined as of the Valuation Date
coincident with the date of distribution. For purposes of this
paragraph (a), the date of distribution shall be the date the Trustee
liquidates the assets in the vested Account of the Participant in order
to effectuate the distribution of said vested Account.
(b) With respect to distributions made prior to June 1,
1993, the Participant's vested Account balance shall be determined as of
the Valuation Date immediately preceding the date of distribution;
provided, however, that in the event that any distribution from the
Company Stock Fund is, pursuant to 10.5, to be made in cash rather than
in shares of Computer Associates International, Inc. common stock
("Company Stock"), which distribution requires a sale of Company Stock
held in such Fund, and, if in the judgment of the Committee, the use of
the aforesaid Valuation Date could result in a loss to such Fund, then
the portion of such Participant's vested Account balance invested in
such Fund to be distributed in cash shall be determined, in the sole
discretion of the Committee, as of the Valuation Date immediately
<PAGE> 64
following the sale of Company Stock required to effectuate said
distribution.
7.9 Direct Rollover of Eligible Rollover Distributions.
(a) Except as otherwise provided in this Section, if the
"Distributee" (as defined in paragraph (f) below) of any "Eligible
Rollover Distribution" (as defined in paragraph (f) below) elects to
have such Distribution paid directly to an "Eligible Retirement Plan"
(as defined in paragraph (f) below) and specifies the Eligible
Retirement Plan to which such Distribution is to be paid (in such form
and at such time as the Committee may prescribe), such Distribution
shall be made in the form of a "Direct Rollover" (as defined in
paragraph (f) below).
(b) A Distributee may elect to have a portion of an
Eligible Rollover Distribution paid to an Eligible Retirement Plan in a
Direct Rollover and to have the remainder of said Distribution paid to
the Distributee.
(c) In no event may a Distributee elect a Direct Rollover
with respect to Eligible Rollover Distributions during a year that are
reasonably expected to total less than two hundred ($200) dollars or any
lower minimum amount specified by the Committee. For purposes of
determining whether the preceding limit is reached, all Eligible
Rollover Distributions received within one taxable year of the
Distributee under the Plan shall be aggregated; provided, however, that
if the Committee does not know at the time of the first Distribution of
less than two hundred ($200) dollars whether there will be additional
<PAGE> 65
Eligible Rollover Distributions during the year for which the
aggregation is required, a Direct Rollover of such Distribution may be
prohibited.
(d) A Distributee's election to make or not make a Direct
Rollover with respect to one payment in a series of periodic payments
shall apply to all payments in the series, provided that
(i) the Distributee is permitted at any time to
change, with respect to subsequent payments, a previous election to make
or not make a Direct Rollover; and
(ii) the written explanation provided pursuant to
Code 402(f) explains that the election to make or not make a Direct
Rollover will apply to all future payments unless the Distributee
subsequently changes the election.
(e) The Committee may, pursuant to regulations and rulings
promulgated by the Secretary of the Treasury, establish procedures for
the purpose of carrying out the provisions of this 7.9, including
establishing any reasonable procedure for the Distributee to elect a
Direct Rollover, establishing a default procedure, establishing a
deadline or time period after which the Distributee may not revoke an
election to make or not make a Direct Rollover, and limiting the
Distributee to a single Direct Rollover for each Eligible Rollover
Distribution.
(f) For the purpose of this 7.9, the following
definitions shall apply:
<PAGE> 66
(i) Direct Rollover shall mean a direct trustee-to-
trustee transfer to the Eligible Retirement Plan so specified by the
Distributee.
(ii) Distributee shall mean (A) a Participant, (B) a
Participant's surviving spouse, or (C) a Participant's spouse or former
spouse who is an alternate payee pursuant to a "Qualified Domestic
Relations Order" as described in 9.3.
(iii) Eligible Retirement Plan shall mean (A) an
individual retirement account described in Code 408(a), (B) an
individual retirement annuity described in Code 408(b), other than an
endowment contract, (C) a defined contribution plan which is qualified
under Code 401(a), the terms of which permit the acceptance of rollover
distributions, or (d) an annuity plan described in Code 403(a).
(iv) Eligible Rollover Distribution shall mean any
distribution from the Plan to a Distributee, except that such term shall
not include (A) any portion of a distribution which is attributable to
Voluntary Contributions, (B) any distribution which is one of a series
of substantially equal periodic payments, not less frequently than
annually, made (1) for the life (or life expectancy) of the Participant
or the joint lives (or life expectancies) of the Participant and his
designated Beneficiary, or (2) for a specified period of ten (10) years
or more, and (C) any distribution to the extent such distribution is
required under 7.6.
<PAGE> 67
ARTICLE VIII
IN-SERVICE WITHDRAWALS AND LOANS
8.1 Withdrawals From Participants' Accounts.
(1) Withdrawals from Voluntary Contribution Account. A
Participant who has not terminated employment with the Employer may, at
any time, upon thirty days written notice to the Committee, signed and
acknowledged by the Participant, elect to withdraw all or part of his
Voluntary Contribution Account.
(2) Hardship Withdrawals from Other Accounts.
(a) A Participant who has not terminated employment
with the Employer may, at any time, upon written notice to the
Committee, signed and acknowledged by the Participant, request the
withdrawal of additional amounts from his Account, which shall only be
permitted if the Committee shall find that such withdrawal is required
by the Participant for the purpose of satisfying any of the following
financial needs:
(i) medical expenses incurred by the Participant or a
member of his immediate family;
(ii) purchase or preservation of the primary residence
of the Participant; or
(iii) educational expenses of the Participant or a
member of his immediate family.
(b) Such hardship withdrawals shall be made from the
Participant's Account as follows:
<PAGE> 68
FIRST: From the Participant's Pre-Tax Contribution
Account; provided, however, that if the Participant has not attained age
59-1/2, the following conditions and limitations shall apply to said
withdrawals from the Pre-Tax Contribution Account:
(i) Such withdrawals shall not include any gains or
earnings of the Trust allocated to such Participant's Pre-Tax
Contribution Account subsequent to March 31, 1989.
(ii) Such withdrawals shall only be permitted if all
of the following requirements are satisfied:
(A) The withdrawal shall not exceed the amount
required by the Participant to satisfy the financial need set forth in
paragraph (a) above.
(B) The Participant has obtained all other
distributions under paragraph (1) of this Section.
(C) The Participant has obtained all nontaxable
(at the time of the loan) loans from the Plan, unless the Participant's
financial need cannot reasonably be relieved by obtaining such loans.
(D) The Participant acknowledges in writing to
the Committee, on such form as it shall require, that the financial need
<PAGE> 69
as set forth in paragraph (a) above cannot reasonably be relieved:
(1) through reimbursement or
compensation by insurance or otherwise;
(2) by liquidation of the Participant's
assets, which shall be deemed to include those assets of the
Participant's spouse and minor children that are reasonably available to
the Participant;
(3) by cessation of the Participant's
Pre-Tax and Voluntary Contributions;
(4) by nontaxable (at the time of the
loan) loans or other distributions or non-taxable loans from qualified
plans of any other employer; or
(5) by borrowing from commercial sources
on reasonable commercial terms in an amount necessary to satisfy the
financial need.
For purposes of this subparagraph (D), a
financial need cannot reasonably be relieved by one of the actions set
forth above if the effect of such action would be to increase the
<PAGE> 70
Participant's financial need. In no event may the Committee rely upon
the Participant's written representations as described above if the
Committee has actual knowledge that the Participant's financial need can
reasonably be relieved by one of the actions set forth above.
SECOND: From the Participant's Rollover Contribution
Account, if any; provided, however, that in no event shall a withdrawal
of any portion of the Money Purchase Account (as described in 13.3) of
a Transferred Employee (as defined in 13.1(4)) be permitted, unless
such Transferred Employee's spouse, if any, consents to such withdrawal
within the ninety (90) day period prior to said withdrawal. Such
spousal consent shall be in the manner described in 13.5(2)(c).
THIRD: From the Participant's Employer Contribution
Account, to the extent of the Participant's vested interest in such
Account.
(3) Any request for a withdrawal under this 8.1 must be
made in writing by the Participant on such forms as are provided by the
Committee, and shall be supported by any information which the Committee
requests from the Participant.
(4) Notwithstanding anything herein to the contrary, in
the event that there shall be a change in the investment funds available
to Participants pursuant to 11.1 or a change in the Plan Trustee,
withdrawals under this 8.1 may be suspended to the extent necessary to
accomplish such changes.
<PAGE> 71
8.2 Loans to Participants.
(1) Any Participant, other than a Participant who has
either (a) terminated employment with the Employer or (b) become
employed by a Related Company as described in 3.3(a) or (b), may, with
the consent of the Committee, take a loan from his Account; provided,
however, that in the event that there shall be a change in the
investment funds available to Participants pursuant to 11.1 or a change
in the Plan Trustee, loans under this 8.2 may be suspended to the
extent necessary to accomplish such changes. A request for a loan shall
be made on a loan application form to be provided by the Committee.
(2) In no event shall the total of any such loan or loans
which are made, renewed, renegotiated, modified, or extended after
December 31, 1986 with respect to any Participant under all plans of the
Employer exceed the lesser of (i) Fifty Thousand Dollars ($50,000),
reduced by the excess (if any) of the highest outstanding balance of
loans from such plans during the one (1) year period ending on the day
before the date on which such loan is made, over the outstanding balance
of loans from such plans on the date on which such loan is made, or (ii)
one-half the value of the Participant's vested Account balance as of the
most recent Valuation Date during the twelve (12) month period
immediately preceding the issuance of the loan, provided such valuation
is adjusted for any distributions or Contributions made after such
Valuation Date; provided, however, that no loan granted on or after July
1, 1993 shall be less than One Thousand Dollars ($1,000).
<PAGE> 72
(3) (a) No such loan or loans shall be made except for
the purpose of enabling a Participant to meet a special situation in his
financial affairs. Such situation shall include, but not be limited to,
the illness or disability of the Participant or a member of his family,
the establishment or preservation of the primary residence of the
Participant, the education of the Participant or his immediate family,
or such other reason that the Committee in their judgment may deem good
and sufficient.
(b) Effective July 1, 1993, (i) the provisions of
subparagraph (a) above shall not apply, and (ii) in no event may a
Participant have more than two (2) loans outstanding at any time under
the Plan.
(4) The rate of interest on loans to Participants shall be
at a reasonable rate fixed by the Committee at the time the loan is
approved. Such rate shall provide the Trust with a return commensurate
with the interest rates charged by persons in the business of lending
money for loans which would be made under similar circumstances.
(5) All loans shall be repaid at least quarterly in
substantially equal installments of both principal and interest, either
through payroll deduction or such other method as may reasonably be
selected by the Committee; provided, however, that any method selected
shall be sufficient to fully amortize the loan within the repayment
period. All such repayments shall be credited to the Participant's
Account. The maximum repayment period of a loan to a Participant shall
<PAGE> 73
be five (5) years. The term of the loan shall be arrived at by the
Committee pursuant to a uniform, nondiscriminatory policy.
Notwithstanding anything in this 8.2 to the contrary, in the event a
Participant separates from service with an outstanding loan balance and
defers the distribution of his vested Account pursuant to Article VII,
such outstanding loan balance (including any accrued but unpaid interest
thereon) as of the date of such Participant's separation from service
shall become due and payable within one (1) month of such separation
from service.
(6) Each loan shall be supported by collateral which shall
consist of the assignment of no more than fifty percent (50%) of the
Participant's vested Account in the Trust; provided, however, that the
Committee shall require such additional collateral as the Committee may
deem necessary in order to adequately secure the loan and insure against
a loss to the Plan.
(7) Upon the death, retirement or termination of
employment of the Participant, the Committee may deduct the total unpaid
balance of any such outstanding loan or any portion thereof from any
payment or distribution to which such Participant or his Beneficiary or
Beneficiaries may be entitled.
(8) Each Participant to whom a loan is granted under this
8.2 shall be required to execute a promissory note payable to the
Trustee. Such promissory note shall be in the form provided by the
Committee and shall set forth the material terms of the loan. Every
loan applicant shall receive a clear statement of the material terms of
each loan transaction.
<PAGE> 74
(9) (a) If a Participant (i) defaults on the payment of a
loan and such default continues for sixty (60) days, or (ii) in the
event of the Participant's bankruptcy, impending bankruptcy, insolvency,
or impending insolvency, the Committee shall issue a written notice of
default to the Participant, in which case the entire unpaid loan balance
shall become due and payable. The Committee may pursue collection of
the unpaid loan balance, plus accrued but unpaid interest thereon, by
foreclosing upon the collateral given to secure the loan's repayment and
reducing the Participant's Account, or by any other lawful means
generally available to creditors.
(b) Notwithstanding the preceding, (i) except in the
case of Employees who have been Participants for five (5) or more Plan
Years, the maximum amount by which an active Participant's Employer
Contribution sub-account balance may be reduced in connection with a
default shall be equal to the excess of such balance over the amount of
Employer Contributions made on his behalf for the two (2) Plan Years
ending prior to the default, and (ii) in no event shall any portion of a
Participant's Pre-Tax Contribution Account be reduced in connection with
a default prior to the earlier of (A) the Participant's separation from
service or (B) the date the Participant attains age 59-1/2.
(10) The Committee shall have the authority to adopt
additional terms and conditions including rules regarding the financial
ability of the Participant to repay the amount he seeks to borrow,
provided that the Committee shall permit loans to be available to all
Participants on a reasonably equivalent basis, and shall not make loans
<PAGE> 75
available to Participants who are Highly Compensated Employees (as
defined in 4.7(1)(b)(ii)) in an amount representing a greater
percentage of such Participants' vested Account than is made available
to other Participants.
<PAGE> 76
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Termination. (a) An Employer may terminate the Plan with
respect to its Employees at any time and the Board of Directors of
Computer Associates International, Inc. shall have the right to
terminate the Plan at any time. In the event of the termination or
partial termination (within the meaning of such term as used in Title IV
of the Employee Retirement Income Security Act of 1974 (hereinafter
called the "Act")) of the Plan, or in the event of a complete
discontinuance of contributions to the Plan, all Participants affected
thereby shall be fully vested in and have a 100% non-forfeitable right
to their Accounts.
(b) As soon as administratively feasible after the
termination of the Plan, the Committee shall direct the Trustee to
distribute each Participant's Account to the Participant or his
Beneficiary, as applicable, in a lump sum, subject, however, to the
applicable provisions of 13.5 relating to distributions in the form of
an Annuity or Qualified Joint and Survivor Annuity; provided, however,
that if the Employer or a Related Company maintains another defined
contribution plan which satisfies the qualification requirements under
Section 401(a) of the Code (other than an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code), no distribution of an
Account which exceeds $3,500 shall be made hereunder to a Participant
who has not attained his Normal Retirement Age without such
Participant's written consent, and if the Participant does not consent
to such distribution, the Committee shall direct the Trustee to directly
<PAGE> 77
transfer such Participant's Account to the trust created under such
other qualified plan in accordance with Section 411(d)(6) of the Code
and the regulations promulgated thereunder.
9.2 Merger or Consolidation. In the event of any merger or
consolidation with, or transfer of assets or liabilities to, any other
plan, each Participant shall be entitled to receive a benefit
immediately after such merger, consolidation or transfer (if the plan
then terminated) equal to or greater than the benefit to which he would
have been entitled immediately before such merger, consolidation or
transfer (if the Plan then terminated).
9.3 Alienation Prohibited.
(1) Except as provided by 8.2(6) of this Plan and by
paragraph (2) below, the rights of a Participant to receive benefits
hereunder shall not be anticipated, assigned (either at law or in
equity), alienated, or subject to attachment, garnishment, levy,
execution or other legal or equitable process.
(2) Notwithstanding the provisions of paragraph (1) above,
the Committee shall direct the Trustee to pay benefits from the Plan in
accordance with the applicable requirements of any Qualified Domestic
Relations Order. For the purposes of this paragraph (2), a Qualified
Domestic Relations Order means
(i) any judgment, decree or order (including
approval of a property settlement agreement) made pursuant to a State
domestic relations law, which relates to the provision of child support,
alimony payments, or marital property rights of a spouse, former spouse,
child or other dependent of a Participant;
<PAGE> 78
(ii) which creates or recognizes the existence of an
alternate payee's right to, or assigns to an alternate payee the right
to, receive all or a portion of a Participant's Account;
provided, however, that such Qualified Domestic Relations Order
must clearly specify
(iii) the name and last known mailing address of the
Participant and of each alternate payee covered by the order;
(iv) the amount or percentage of the Participant's
benefits to be paid to each alternate payee, or the method by which such
percentages are to be determined;
(v) the number of payments, or the period to which
the order applies; and
(vi) the name of the plan(s) to which such order
applies.
In no event will any domestic relations order be deemed to
be a Qualified Domestic Relations Order if such order purports to
require the payment of benefits in a form not otherwise provided under
the Plan, or to require the Plan to provide increased benefits, or to
require the payment to an alternate payee of benefits which are required
to be paid to another alternate payee under a previous Qualified
Domestic Relations Order.
(3) The Committee shall establish a reasonable procedure
for determining whether any domestic relations order is a "Qualified
Domestic Relations Order", and to administer distributions under such
Qualified Domestic Relations Order. Such procedure shall be in writing,
and shall provide for the prompt notification of each Participant and
<PAGE> 79
alternate payee named in the order of (i) the order's receipt and (ii)
the procedure for determining the qualified status of the order.
(4) During any period in which the issue of whether a
domestic relations order is "Qualified" is being determined, the
Committee shall segregate in a separate account any amounts that would
be payable to an alternate payee pursuant to such order, if "Qualified".
If within the eighteen (18) month period beginning with the date on
which the first payment would be required to be made under the order, if
"Qualified," it is determined that the order is a Qualified Domestic
Relations Order, the segregated account shall be distributed in
accordance with the order. If the order is not determined to be a
Qualified Domestic Relations Order within such eighteen (18) month
period beginning with the date on which the first payment would be
required to be made under the order, if "Qualified" , the segregated
account shall, at the end of the eighteen (18) month period, be restored
to the Account of the Participant and treated as if no order existed.
Any determination that an order is a Qualified Domestic Relations Order
which is made after the close of the eighteen (18) month period shall
only be applied prospectively.
9.4 Governing Law. This Plan shall be construed and enforced in
accordance with the relevant provisions of the Code and the Act, but to
the extent that their provisions shall not govern the Plan, it shall be
construed and enforced in accordance with the laws of the State of New
York, except the decisional or statutory law of such State concerning
conflicts of law or choice of law shall not be used in determining
applicable law.
<PAGE> 80
9.5 Plan Not Contract of Employment. No provision of this Plan
shall be construed as a contract of employment between the Employer and
any Employee, a right of continued employment by any Employee or as a
limitation of the right of the Employer to discharge any Employee for
any reason.
9.6 Reversion of Certain Contributions. All contributions made
by the Employer are made for the exclusive benefit of Participants and
their Beneficiaries, and such contributions shall not be used for or
diverted to purposes other than for the exclusive benefit of the
Participants and their Beneficiaries (including the costs of maintaining
and administering the Plan and Trust). Notwithstanding the foregoing,
amounts contributed to the Trust by the Employer may be refunded to the
Employer, to the extent that such refunds do not, in themselves, deprive
the Plan of its qualified status, under the following circumstances and
subject to the following limitations:
(1) Disallowance of Deduction. All Contributions made by
the Employer are conditioned on their deductibility pursuant to Section
404 of the Code. If the deduction of all or any portion of a
Contribution made by the Employer is disallowed, such Contribution (to
the extent so disallowed) shall be returned to the Employer within one
(1) year of the date of such disallowance. If such Contribution shall
include Pre-Tax Contributions, such Pre-Tax Contributions shall be paid
to the Participants on whose behalf they were made, as soon as
practicable thereafter.
<PAGE> 81
(2) Disqualification of Plan. The effectiveness of the
Plan and Trust created hereunder are based upon the condition precedent
that they shall be approved by the Internal Revenue Service as qualified
under Section 401(a) of the Code, and tax exempt under Section 501(a) of
the Code. Accordingly, notwithstanding anything herein contained to the
contrary, if an adverse determination letter shall be received in
writing from the Internal Revenue Service that this Plan and Trust do
not qualify under the provisions of Sections 401(a) and 501(a) of the
Code, the Plan and Trust shall be null and void ab initio. The
Trustees, upon receipt of written notice from the Employer together with
a copy of such adverse determination letter, shall transfer and pay over
to the Employer within one (1) year after the date of denial of
qualification of the Plan, all of the net assets so contributed by the
Employer which remains after deducting the proper expenses of
terminating the Plan, including any Pre-Tax Contributions, which shall
then be paid to the Participants in the Plan, in the manner described in
subparagraph (1) above. This paragraph (2) shall be operative only in
the event of initial non-qualification of the Plan.
(3) Mistake of Fact. In the case of a Contribution which
is made in whole or in part by reason of a mistake of fact (for example,
incorrect information as to the eligibility or compensation of a
Participant, or a mathematical error) that portion of such Contribution
as is attributable to the mistake of fact shall be returned to the
<PAGE> 82
Employer within one (1) year after the payment of the contribution to
which the mistake applies, including any Pre-Tax Contributions which
shall then be paid to the Participants in the Plan, in the manner
described in subparagraph (1) above.
All refunds pursuant to paragraphs (1), (2) and (3) shall be
limited in amount, circumstance and timing to the provisions of Section
403(c) of the Act, and no such refund shall be made if, solely on
account of such refund, the Plan would cease to be a qualified plan
pursuant to Section 401(a) of the Code.
9.7 Participant or Beneficiary Unable to be Found.
Notwithstanding anything else contained in this Plan to the
contrary, if the Committee is unable to direct payment of a benefit
hereunder to a Participant or Beneficiary entitled thereto because the
identity or whereabouts of such person cannot be ascertained,
notwithstanding the registered or certified mailing of notice to such
person at his last known address as indicated by the records of the
Committee or the Employer, then such benefit and any other benefits of
such person payable from the Trust shall be forfeited and applied in
accordance with 5.4(3); provided, however, that such benefits shall be
reinstated upon a proper claim being made by the Participant or
Beneficiary.
<PAGE> 83
ARTICLE X
ADMINISTRATIVE PROVISIONS
10.1 (1) Committee. The Plan shall be administered by a
Committee consisting of at least three individuals who shall be
appointed by and for the term specified by the Board of Directors of the
Employer. The Board of Directors of the Employer may remove any member
of the Committee from office at any time with or without cause.
(2) Quorum; Majority to Govern. Two-thirds of the members
of the Committee shall constitute a quorum. A vote of a majority of the
members present at a meeting, if a quorum is present, shall be the act
of the Committee.
(3) Act of Committee. The Committee may act at a meeting
or may act without a meeting, if each Committee member consents in
writing to the adoption of a resolution authorizing the action.
(4) By-Laws. The Committee may adopt by-laws to govern
the conduct of its internal affairs.
(5) Powers and Duties of Committee. The Committee shall
control and manage the operation and administration of the Plan. The
Committee shall administer the Plan in accordance with its terms and
shall have all powers necessary to carry out the provisions of the Plan.
Without limiting the generality of the foregoing, the Committee shall
have the following powers and duties which shall be performed in its
full and absolute discretion:
<PAGE> 84
(a) requiring any Participant or Beneficiary to
furnish such information or to execute any forms or documents as it may
request for the proper administration of the Plan, and to condition the
payment of any benefits under the Plan upon the furnishing by such
Participant or Beneficiary of the information so requested;
(b) adopting and enforcing such rules and regulations
and prescribing the use of such forms as it shall deem necessary for the
efficient administration of the Plan;
(c) interpreting the provisions of the Plan, and
resolving any ambiguities, inconsistencies and omissions in the Plan.
The Committee's interpretations and decisions shall be conclusive and
binding upon all parties affected thereby, except as otherwise expressly
provided herein;
(d) determining the eligibility of any Employee to
participate in the Plan;
(e) determining all questions relating to the status
and rights of Participants under the Plan;
(f) furnishing the Trustee with such information as it
may reasonably require to perform its duties hereunder;
(g) employing such clerical staff as it shall deem
necessary for the proper administration of the Plan;
(h) furnishing such reports to the Labor Department
and Internal Revenue Service as shall be required by law;
(i) furnishing such information to Participants and
Beneficiaries as shall be required by law;
(j) providing directions to the Trustee regarding
payment of benefits to Participants and Beneficiaries;
(k) preparing and maintaining adequate records to
accomplish the foregoing duties;
<PAGE> 85
(l) providing procedures and rendering necessary
decisions for claims for benefits under the Plan; and
(m) establishing and maintaining a funding policy
for the Plan and communicating such policy to the Trustee or any
investment adviser.
(6) Advisers. To assist in the performance of its duties,
the Committee may engage in such legal counsel, accountants, pension
consultants, actuaries or other advisers as the Committee may deem
necessary or advisable.
(7) Allocation of Fiduciary Responsibilities. The
Committee may, by a duly adopted resolution, allocate fiduciary
responsibilities among its members and may designate individuals other
than Committee members to carry out fiduciary responsibilities.
(8) Investment Manager. The Committee may appoint (and
may remove from office with or without cause) an investment manager to
manage (or acquire and dispose of) any assets of the Trust.
(9) Claims Procedure. The Committee shall provide written
notice (in terms calculated to be understood by the Participant and
setting forth specific reasons for the denial) of a denial of a
Participant's claim for benefits under the Plan and shall afford such
Participant a reasonable opportunity for a fair and plenary review of
such denial by the Committee.
(10) Indemnification. The Employer shall indemnify any
member of the Committee and those to whom the Committee has delegated
fiduciary duties pursuant to paragraph (7) of this 10.1, and shall hold
<PAGE> 86
such member or designated fiduciary harmless from and against any and
all claims, losses, damages, expenses and liability arising from any act
or failure to act unless the same is judicially determined to be the
result of the gross negligence or willful misconduct of such member or
designated fiduciary.
10.2 Employer. As used in subparagraphs (2) and (4) below,
the term "Employer" shall mean Computer Associates International, Inc.
and its successors, and shall not include any Related Company which
shall have adopted the Plan:
(1) Contributions. The Employer shall make
contributions to the Trust as specified in Article IV.
(2) Appointment, Removal and Compensation of
Trustee. The Employer shall appoint the Trustee and may remove the
Trustee from office with or without cause. The Trustee shall be
compensated either directly from the Employer or from the Trust Fund.
(3) Expenses. The Employer shall pay the expenses
of the Committee, including any expenses of retaining advisers;
provided, however, that if such expenses are not paid when due, the
Committee may direct that any such reasonable expenses shall be paid by
the Trustees directly from the Trust.
(4) Amendment of Plan. The Employer may amend the
Plan by a resolution by its Board of Directors adopted in accordance
with its certificate of incorporation and by-laws; provided, however,
<PAGE> 87
that any technical amendments to the Plan which may be necessary solely
to ensure that the Plan continues to qualify under the Code, ERISA, any
other statute, or any regulations or pronouncements promulgated by the
Internal Revenue Service, the United States Department of Labor, or any
other governmental agency with jurisdiction over the Plan, may be
adopted by proper resolution and execution of the appropriate documents
by the members of the Committee.
10.3 Service in More Than One Capacity. Any individual or group
of individuals may serve in more than one fiduciary capacity with
respect to the Plan, including service both as a Trustee and as a
Committee member.
10.4 Payments to the Trust and Establishment of Investment Funds.
The Employer shall pay all Contributions under the Plan to the Trustee.
The Trustee shall hold all Contributions received by it as Trustee in
various investment funds selected by the Committee, for the purpose of
enabling Participants to direct the investment of their Accounts
pursuant to Article XI. Such investment funds may include a Company
Stock Fund, which shall consist primarily of the common stock of
Computer Associates International, Inc.
10.5 Payments from the Trust. The Trustee shall, in accordance
with the written instructions of the Committee, pay all amounts directly
to the Employee, Participant or Beneficiary entitled to the amounts
specified in such instructions.
<PAGE> 88
Payments shall be made in money by check, except that payments from the
Company Stock Fund (as set forth in 10.4) prior to July 1, 1993 shall be
made in kind in full shares of Company Stock and in cash for any partial
shares; provided, however, that the right of any Employee, Participant,
or Beneficiary, if any, to a cash distribution of his Company Stock Fund
amount in effect as of December 31, 1988, shall be preserved to the
extent required by law. Notwithstanding anything herein to the
contrary, effective July 1, 1993, payments from the Company Stock Fund
may, at the Employee's, Participant's or Beneficiary's election, be made
either (a) in kind in full shares of Company Stock and in cash for any
partial shares, or (b) entirely in cash.
10.6 Voting Rights With Respect to Company Stock Fund.
(a) Notwithstanding anything in this Section or Plan to the
contrary, effective March 31, 1993 the provisions of Section 4(e)(v) of
the Trust Agreement entered into as of said date between Computer
Associates International, Inc. and the Trustee (Fidelity Management
Trust Company) relating to voting and tender offers of Company Stock
shall govern this Section, and paragraph (b) of this Section shall no
longer be effective.
(b) With respect to the voting of Company Stock prior to
March 31, 1993, the Trustee shall exercise all voting rights with
respect to the shares of Company Stock held in the Company Stock Fund
(as set forth in 10.4) and the Employer shall cause to be sent to the
Trustee all proxy solicitation materials relating thereto; provided,
<PAGE> 89
however, that in the case of any tender or exchange offer which shall be
pending or which shall be made in the future for all shares of Company
Stock or any portion thereof, each Participant shall have the right,
with respect to the Company Stock attributable to his or her Account, to
instruct the Trustee in writing as to the manner in which to respond to
any such offer. As soon as practicable after the commencement of any
tender or exchange offer, the Trustee shall provide each Participant
then participating in the Company Stock Fund all information distributed
to shareholders of the Employer in connection with any such tender or
exchange offer, and an instructions form for return to the Trustees. A
Participant's instructions shall remain in force until superseded in
writing by the Participant. The Trustees shall tender or exchange such
shares of Company Stock as and to the extent so instructed. If the
Trustee shall not receive instructions from a Participant regarding any
tender or exchange offer for Company Stock, the Trustees shall have no
discretion in such matter and shall take no action in response thereto.
Unless and until shares of Company Stock are tendered or exchanged, the
individual instructions received by the Trustees from Participants shall
be held by the Trustees in strict confidence and shall not be divulged
or released to any person, including officers or employees of the
Employer; provided, however, that the Trustee shall advise the Employer,
at any time upon request, of the total number of shares which it is
instructed to tender or exchange and the total number of shares not
subject to instructions to tender or exchange.
<PAGE> 91
ARTICLE XI
INVESTMENT DIRECTIONS
11.1 Directed Investments. Except as otherwise provided herein
and in 11.2, each Participant shall direct that all Contributions made
or allocated to his Account in accordance with 4.1, 4.2, 4.3, 4.4,
4.10 or 4.11 be invested in the various investment funds selected by
the Committee pursuant to 10.4. Any apportionment of investment
elections by a Participant among such funds shall be made in such
multiples as determined by the Committee and applied in a uniform manner
to all Participants. A direction made by a Participant pursuant to this
Article shall be made in writing on such form as prescribed by the
Committee, and shall be deemed to be a continuing direction by the
Participant, until changed by the Participant as described below. Each
Participant shall have the right, which may be exercised one time during
any "election period," as defined hereinafter, to transfer (in such
multiples as determined by the Committee and uniformly applied to all
Participants) all or any portion of the amounts then credited to his
Account from one investment fund to any of the other investment funds as
selected by the Committee. For purposes of this Article, "election
period" shall mean the period determined by the Committee, which shall
be at least a three-month period and applied to all Participants in a
uniform and nondiscriminatory manner; provided, however, that in the
event that the Committee shall change the investment funds available to
Participants hereunder or there shall be a change in the Plan Trustee,
such election period may be suspended to the extent necessary to
<PAGE> 91
accomplish such changes. In addition, effective March 9, 1993, each
Participant shall have the right, which may be exercised one time during
such "election period," to change any such direction (in such multiples
as determined by the Committee and uniformly applied to all
Participants) with respect to future Contributions. If any Participant
initially fails to designate the manner of investment of his Account or
any Contributions made on his behalf, such amounts shall be invested in
a money market fund pursuant to the terms of the Trust Agreement of the
Plan entered into between the Employer and the Trustee.
11.2 Allocation of Employer Discretionary Contributions Made in
Computer Associates International, Inc. Stock. In the event that all or
a portion of any Employer Discretionary Contributions for a Plan Year
shall be made in shares of common stock of Computer Associates
International, Inc. pursuant to 4.6(2), the Committee may, in its
discretion, direct that all or a portion of such Contributions be
allocated directly to the Company Stock Fund (as set forth in 10.4),
regardless of any Participant's investment election in effect under
11.1 at the time such Contributions are made to the Plan. If a
Participant has not directed, pursuant to 11.1, the investment of any
portion of his Account, or any portion of future Contributions to be
allocated thereto, to the Company Stock Fund at the time the aforesaid
Contributions are made to the Plan, the Committee shall establish such a
Company Stock Fund account on such Participant's behalf. Nothing
contained herein shall prevent a Participant from directing, pursuant to
<PAGE> 92
11.1 and procedures adopted by the Committee, the transfer of all or
any portion of the amounts deposited into such Company Stock Fund to any
of the other investment funds available pursuant to 11.1.
11.3 Application of Securities Law. With respect to any persons
subject to Section 16 of the Securities Exchange Act of 1934 (the "1934
Act"), transactions under this Article or any other provisions of the
Plan are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of
this Article or the Plan or any action of the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
<PAGE> 93
ARTICLE XII
SPECIAL TOP-HEAVY PROVISIONS
12.1 Purpose. The purpose of this Article is to comply with the
special rules applicable to top-heavy plans contained in Section 416 of
the Code and the regulations thereunder. In the event the Plan should
become top-heavy as defined in 12.2, the provisions of this Article
shall apply notwithstanding anything to the contrary elsewhere in this
Plan. In the event that any limitations imposed by this Article are no
longer necessary for the Plan to meet the requirements of Section 401(a)
or other applicable provisions of the Code, these rules shall
immediately become null and void and shall no longer apply without the
necessity of further amendment to the Plan.
12.2 Determination of Top-Heaviness. The Plan will be considered
to be top-heavy, if as of the most recent determination date:
(a) the sum of the Account balances, under all defined
contribution plans included in the aggregation group (described in
12.4), of all Participants who are key employees (as defined in 12.3)
for such Plan Year exceeds sixty percent (60%) of the sum of the Account
balances of all Participants, or
(b) the Plan is part of a top-heavy group.
The determination date shall be the last day of the first Plan
Year thereof, and thereafter, the last day of the preceding Plan Year.
For purposes of determining the amount of the Account of any
Participant, such amount shall, except as otherwise provided herein,
include the following:
<PAGE> 94
(i) any plan distributions made within the five (5)
year period ending on the determination date. All distributions,
including distributions under a terminated plan, which if it had not
been terminated would have been required to be included in an
aggregation group, will be counted.
(ii) with respect to unrelated rollovers and plan-to-
plan transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by another
employer), the plan providing the funds rolled over or transferred shall
always consider such rollovers or plan-to-plan transfers as a
distribution for purposes of this Section. The plan accepting such
unrelated rollovers or plan-to-plan transfers shall not count such
rollovers or plan-to-plan transfers accepted after December 31, 1983 as
part of the Employee's account. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984 shall be considered as part
of the Employee's account.
(iii) with respect to related rollovers and plan-to-
plan transfers (ones either not initiated by the Employee or made to a
plan maintained by the same employer), the plan providing the funds
rolled over or transferred shall not count such funds as a distribution
for purposes of this Section. The plan accepting such rollover or plan-
to-plan transfer shall consider such rollover or plan-to-plan transfer
<PAGE> 95
as part of the Employee's account, irrespective of the date on which
such rollover or plan-to-plan transfer is accepted.
(iv) for Plan Years beginning after December 31, 1984,
the account of any Employee who has not performed any service for the
Employer during the five (5) year period ending on the determination
date shall be disregarded.
12.3 Key Employees. The term "key employee" means any
Participant who at any time during the Plan Year or any of the four (4)
preceding Plan Years is, or was:
(1) an officer of the Employer having Compensation in
excess of fifty percent (50%) of the dollar limitation in effect on
under 415(b)(1)(A) of the Code for the calendar year in which such Plan
Year ends; provided, however, no more than the lesser of (i) fifty
Employees, or (ii) the greater of three (3) Employees or ten percent
(10%) of all Employees are to be treated as officers; and provided
further, that officers of any division of the Employer shall not be
deemed to be an officer of the Employer merely because of their
positions as officers of divisions;
(2) one of the ten (10) Employees having annual
Compensation from the Employer or more than the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends and owning (or considered as owning within the
meaning of Section 318 of the Code) more than a one-half (1/2%) percent
interest as well as one of the ten (10) largest interests in the
Employer;
(3) a five (5%) percent owner of the Employer; or
(4) a one (1%) percent owner of the Employer having an
annual Compensation from the Employer of more than $150,000.
An Employee shall be considered a five percent (5%) owner under
paragraph (3) above if the Employee owns more than five percent (5%) of
<PAGE> 96
the Employer's outstanding stock or stock possessing five percent (5%)
of the total combined voting power of all the stock of the Employer.
The term one (1%) percent owner under paragraph (4) above means any
person who would be described in the preceding sentence if "one (1%)
percent" were substituted for "five (5%) percent" each place it appears
in the preceding sentence. In determining percentage ownership for
purposes of this 12.3, the constructive ownership rules contained in
Section 318 of the Code (as modified by Section 416(i)(1)(B)(iii) of the
Code) shall be applicable, but the aggregation rules of Sections
414(b),(c) and (m) of the Code shall not apply. In determining the
number of officers taken into account under paragraph (1) above,
Employees described in Section 414(q)(8) of the Code shall be excluded.
For purposes of this 12.3, Compensation shall mean
compensation within the meaning of Section 414(q)(7) of the Code, and in
determining such Compensation, all Related Companies shall be included
with the Employer as a single employer.
12.4 Aggregation Rules. All Related Companies shall be included
with the Employer as a single employer for the purposes of determining
top-heaviness. All plans of the Employer in which a key employee
participates, and each other plan of the Employer which enables any plan
in which a key employee participates to meet the requirements of Section
401(a)(4) or Section 410 of the Code, will be aggregated as part of a
required aggregation group for the purpose of determining top-heaviness.
<PAGE> 97
Each plan in the required aggregation group will be top-heavy if
the group is top-heavy and no plan in the group will be top-heavy if the
group is not top-heavy.
Although not required, the Committee may elect to include as part
of the aggregation group any plans that are not part of the required
aggregation group as described above, but that satisfy the requirements
of Sections 401(a)(4) and 410 of the Code when considered together with
the plans constituting the required aggregation group. If the
aggregation group elected by the Committee is top-heavy, only those
plans that are part of the required aggregation group will be subject to
the additional requirements placed on top-heavy plans.
An aggregation group will be top-heavy if the sum (as of the
determination date) of:
(ii) the present value of the cumulative accrued benefits
for key employees under all defined benefit plans included in such
group, and
(ii) the aggregate of the accounts of key employees under
all defined contribution plans included in such group,
exceeds sixty (60%) percent of a similar sum determined for all
employees.
12.5 Special Minimum Contribution and Vesting Rules Becoming
Operative in the Event the Plan Becomes Top-Heavy. In the event that
the Plan shall be determined to be top-heavy in any Plan Year, the
following special minimum contribution and vesting requirements shall
become operative for such Plan Year:
<PAGE> 98
(1) The aggregate Employer Discretionary Contributions
allocated to the Account of a non-key employee for each Plan Year in
which the Plan is top-heavy shall equal the lesser of (i) three percent
(3%) of compensation [as defined in Treasury Regulation Section 1.415-
2(d)] for that Plan Year, or (ii) the largest percentage of compensation
of Pre-Tax Contributions, Employer Matching Contributions, and Employer
Discretionary Contributions allocated to the Account of a key employee
under the Plan for the Plan Year. All Employees who are either (i)
Participants or (ii) who have satisfied the eligibility requirements
pursuant to 3.1 but for whom no Account has been established under the
Plan, and who have not separated from the service of the Employer as of
the last day of the Plan Year shall receive the minimum contribution.
(2) The non-forfeitable portion of a Participant's
Employer Contribution Account, except for a Participant who does not
complete an Hour of Service after the Plan becomes top-heavy, will be
determined in accordance with the minimum vesting schedule set forth
below, if the application of such schedule would result in a greater
percentage of the Employer Contribution Account being non-forfeitable
than the application of the vesting provisions set forth in 6.2.
<TABLE>
Non-Forfeitable
Years of Service Percentage of Account
<S> <C>
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
<PAGE> 99
A Year of Service, for the purpose of this Section, shall
mean a Period of Service of 365 days, and Years of Service shall include
only those years of service required to be counted under Section 411(a)
of the Code, and shall not include those years of service permitted to
be disregarded under Section 411(a)(4).
12.6 Termination of Top-Heavy Status. If the Plan ceases to be
top-heavy, this Article XII shall be inoperative with respect to any
Plan Year for which the Plan is determined not to be top-heavy; except
that with respect to any Plan Participant who has completed three (3) or
more Years of Service, as defined in paragraph (2) of 12.5, as of the
beginning of the Plan Year for which the Plan is determined not to be
top-heavy, the minimum vesting schedule set forth in that paragraph will
continue to apply if, at any time, the application of such schedule
would result in a greater percentage of the Employer Contribution
Account being non-forfeitable than would the application of the vesting
provisions set forth in 6.2.
<PAGE> 100
ARTICLE XIII
SPECIAL SITUATIONS
13.1 Definitions. Solely for the purposes of this Article XIII,
the following definitions shall apply:
(1) Annuity Starting Date shall mean (a) the first day of
the first period for which a Transferred Employee's benefits under this
Article are payable as an annuity, or (b) in the event the Transferred
Employee's benefits under this Article are not payable as an annuity,
the first day on which all events have occurred which entitle the
Participant to such benefits.
(2) Prior Company shall mean Software International
Corporation, BPI Systems, Inc., UCCEL Corporation, Applied Data
Research, Inc., Cullinet Software, Inc., DBMS, Inc., CompuSystems, Inc.,
On-Line Software International, Inc., Pansophic Systems, Incorporated,
or Nantucket Corporation, whichever is applicable.
(3) Prior Plan shall mean the Software International
Corporation Retirement/Savings Plan and Trust as amended and restated
effective September 1, 1985, and as thereafter amended (hereinafter
referred to as the "Software Plan"), the BPI Systems, Inc. Deferred
Profit Sharing Plan and Trust as adopted by BPI Systems, Inc. effective
December 17, 1985, and as thereafter amended (hereinafter referred to as
the "BPI Plan"), the UCCEL Corporation Savings Plus Plan as effective
January 1, 1985, and as thereafter amended (hereinafter referred to as
<PAGE> 101
the "UCCEL Plan"), the ADR Savings and Security Plan as amended and
restated effective February 1, 1988, and as thereafter amended
(hereinafter referred to as the "ADR Plan"), the Cullinet Software, Inc.
Profit Sharing Retirement Plan as amended and restated effective May 1,
1987, and as thereafter amended, the DBMS, Inc. 401(k) Plan as amended
and restated effective September 1, 1989, and as thereafter amended, the
CompuSystems, Inc. Retirement Savings Plan as effective March 1, 1989,
and as thereafter amended (hereinafter referred to as the "CompuSystems
Plan"), the On-Line Software International, Inc. Capital Accumulation
Plan as amended and restated effective January 1, 1989, and as
thereafter amended (hereinafter referred to as the "On-Line Plan"), the
Pansophic Systems, Incorporated Profit-Sharing/Savings Investment Plan
as effective October 1, 1990, and as thereafter amended (hereinafter
referred to as the "Pansophic Plan"), or the Nantucket Corporation
401(k) Profit Sharing Plan as effective January 1, 1991, and as
thereafter amended (hereinafter referred to as the "Nantucket Plan"),
whichever is applicable with respect to a Transferred Employee.
(4) Transferred Employee shall mean an Employee who was
employed by the Prior Company immediately before he became an Employee.
13.2 Eligibility of Transferred Employees. A Transferred
Employee shall become a Participant in accordance with the provisions
of Article III hereof. In applying Article III to Transferred
<PAGE> 102
Employees, Periods of Service shall include service with the Prior
Company determined in accordance with the applicable provisions of the
Prior Plan.
13.3 Prior Plan Accounts and Money Purchase Accounts.
Amounts which are transferred to the Plan from the Prior
Plan (the "Rollover Contributions") shall be allocated to the Rollover
Contribution Account of the Transferred Employee; provided, however,
that in the event any portion of the Rollover Contributions are subject
to the provisions of Section 417 of the Code, said portion of the
Rollover Contributions, if any, shall be allocated to a separate account
for each Transferred Employee, hereinafter referred to as the "Money
Purchase Account". Each Money Purchase Account shall be credited or
charged with Net Income or Net Loss in the manner described in 5.3.
13.4 Vesting of Transferred Employees.
Each Transferred Employee shall at all times be one hundred
(100%) percent vested in his Rollover Contribution Account and Money
Purchase Account, if any. Any Contributions made under this Plan on
behalf of or by a Transferred Employee shall be vested in accordance
with the provisions of Article VI hereof. A Transferred Employee's
service under the Plan shall include service with the Prior Company,
determined in accordance with the applicable provisions of the Prior
Plan.
<PAGE> 103
13.5 Distribution of Accounts of Transferred Employees.
(1) Except as otherwise provided in the following
paragraphs, the Account balance of each Transferred Employee shall be
distributed in accordance with the provisions of Article VII.
(2) (a) If a Transferred Employee is married at the time
of distribution, such Transferred Employee's Money Purchase Account
shall, subject to the provisions of 7.3(d), be distributed hereunder in
the form of an annuity purchased with the entire Money Purchase Account
of the Transferred Employee (i) which is payable for the lifetime of the
Transferred Employee with a survivor annuity for the lifetime of the
Transferred Employee's spouse equal to at least fifty (50%) percent of
the annuity payable during the joint lives of the Transferred Employee
and the Transferred Employee's spouse, and (ii) which is the actuarial
equivalent of a single life annuity payable for the lifetime of the
Transferred Employee that could have been purchased by utilizing the
Transferred Employee's entire Money Purchase Account (hereinafter the
"Qualified Joint and Survivor Annuity"), unless the Transferred Employee
elects otherwise pursuant to the provision of paragraph (c).
(b) If a Transferred Employee is not married at the
time of distribution, such Transferred Employee's Money Purchase Account
shall, subject to the provisions of 7.3(d), be distributed hereunder in
the form of a single life annuity purchased with the entire Money
<PAGE> 104
Purchase Account of the Transferred Employee (hereinafter the
"Annuity"), unless the Transferred Employee elects otherwise pursuant to
the provisions of paragraph (c). The term Annuity shall, wherever it
appears hereinafter, mean an annuity purchased with the Transferred
Employee's entire Money Purchase Account, which is payable for the
lifetime of the Transferred Employee.
(c) A Transferred Employee may elect, in writing,
during an election period commencing ninety (90) days prior to his
Annuity Starting Date, to waive his right to a Qualified Joint and
Survivor Annuity or Annuity, as applicable, and to have his Money
Purchase Account payable under one of the applicable distribution
options set forth in Article VII and may revoke said election, in
writing, at any time prior to the end of said election period. The
number of revocations and subsequent new elections shall not be limited,
and any new election must comply with the requirements of this paragraph
(c). In the case of a married Transferred Employee, an election shall
not be given effect unless the Transferred Employee's spouse consents,
in writing, to the election during the ninety (90) day election period
described above. Such spousal consent shall acknowledge the effect of
the election on the spouse's rights to benefits under the Plan, and the
optional form of benefit and non-spouse Beneficiary, if any, designated
by the Transferred Employee under the optional form of benefit,
including any class of Beneficiaries or contingent Beneficiaries, which
designations may not be changed without spousal consent (unless such
<PAGE> 105
spousal consent expressly permits such designations without any
requirement of further consent by the spouse or unless the Participant
changes his election to the Qualified Joint and Survivor Annuity). Such
spousal consent shall be witnessed by a notary public. Spousal consent
to the election or to a subsequent change in the optional form of
benefit or non-spouse Beneficiary shall not be required if it is
established to the satisfaction of the Plan Administrator that such
spousal consent cannot be obtained because (i) there is no spouse, (ii)
the spouse cannot be located, (iii) the Participant is legally separated
or has been abandoned (within the meaning of local law) and the
Participant has a court order to such effect, or (iv) of such other
circumstances as the Secretary of the Treasury may, by regulations or
otherwise, prescribe. In the event the Participant's spouse is legally
incompetent to give such spousal consent hereunder, the spouse's legal
guardian, even if such guardian is the Participant, may give such
consent. A former spouse's consent shall not be binding on a new
spouse. Spousal consent to the Transferred Employee's revocation of an
election to waive the Qualified Joint and Survivor Annuity shall not be
required. A former spouse's consent shall not be binding on a new
spouse.
(d) The Committee shall, no later than thirty (30)
days and no more than ninety (90) days prior to the Annuity Starting
Date, provide each Transferred Employee whose vested Account exceeds
$3,500 and on whose behalf a Money Purchase Account is maintained under
<PAGE> 106
the Plan with a written explanation of:
(i) the terms and conditions of the Qualified Joint
and Survivor Annuity or Annuity;
(ii) the Transferred Employee's right to elect
another form of benefit, and the effect of such election;
(iii) the rights of the Transferred Employee's spouse
with respect to the Qualified Joint and Survivor Annuity, and any
election not to receive benefits in such form;
(iv) the Transferred Employee's right to revoke any
election not to receive benefits in the form of a Qualified Joint and
Survivor Annuity or Annuity and the effect of such revocation;
(v) the material features and relative values of the
optional forms of benefit available under the Plan; and
(vi) the Transferred Employee's right, if any, to
defer the commencement of his distribution.
(e) The rights of any spouse or Beneficiary
hereunder shall be extinguished to the extent that such rights are in
conflict with the provisions of any domestic relations order which is a
"Qualified Domestic Relations Order" within the meaning of Section
206(d)(3)(A) of ERISA.
(3) (a) If a married Transferred Employee shall die prior
to his Annuity Starting Date, the deceased Transferred Employee's Money
Purchase Account shall be applied toward the purchase of a lifetime
annuity for such Transferred Employee's spouse (hereinafter the "Pre-
<PAGE> 107
Retirement Survivor Annuity"), unless such Transferred Employee elects
otherwise pursuant to the election procedure set forth in paragraphs (b)
and (c) below. Annuity payments to the spouse shall commence no later
than the first day of the month following the date the Transferred
Employee would have attained his Normal Retirement Age, or, if later,
the date the Transferred Employee died; provided, however, that upon
written request from the spouse, the annuity may be paid commencing as
of the first day of any month following the Transferred Employee's
death. Notwithstanding the above, the Committee shall distribute the
Transferred Employee's entire Account to the surviving spouse in a lump
sum as soon as practicable following the Transferred Employee's death in
the event such Account does not exceed $3,500, and, to the extent
permitted by law, the surviving spouse may elect to receive the deceased
Transferred Employee's entire Account in accordance with the provisions
of 7.2(3), in lieu of the Pre-retirement Survivor Annuity described in
this paragraph (a).
(b) A Transferred Employee on whose behalf a Money
Purchase Account is maintained may elect to waive the Pre-retirement
Survivor Annuity described in paragraph (a) above and designate a
Beneficiary other than his spouse, during the election period described
in paragraph (c) below. If the Transferred Employee elects to waive the
Pre-retirement Survivor Annuity, then, in the event of the death of the
Transferred Employee prior to his Annuity Starting Date, the deceased
<PAGE> 108
Transferred Employee's Money Purchase Account shall be distributed in
accordance with the provisions of 7.2(3) hereof. A waiver by a
Transferred Employee of the Pre-retirement Survivor Annuity shall not be
effective unless the Transferred Employee's spouse consents in writing
to such waiver during the election period described in paragraph (c)
below. Such spousal consent shall acknowledge the effect of the waiver
on the spouse's rights to benefits under the Plan, and the specific non-
spouse Beneficiary, if any, designated by the Transferred Employee,
including any class of Beneficiaries or contingent Beneficiaries, which
designations may not be changed without the spouse's consent (unless
such spousal consent expressly permits such changes without any
requirement of further consent by the spouse or unless the Transferred
Employee charges his election to the Pre-Retirement Spouse's Annuity).
Such spousal consent shall be witnessed by a notary public. Spousal
consent to a waiver of the Pre-retirement Survivor Annuity or to a
subsequent change in Beneficiary shall not be required if it is
established to the satisfaction of the Committee that such spousal
consent cannot be obtained because (i) there is no spouse, (ii) the
spouse cannot be located, (iii) the Participant is legally separated or
has been abandoned (within the meaning of local law) and the Participant
has a court order to such effect or (iv) of such other circumstances as
the Secretary of the Treasury may, by regulations or otherwise,
prescribe. In the event the Participant's spouse is legally incompetent
to give such spousal consent hereunder, the spouse's legal guardian,
even if such guardian is the Participant, may give such consent.
<PAGE> 109
Spousal consent to the Transferred Employee's revocation of a waiver of
the Pre-retirement Survivor Annuity under paragraph (c) below is not
required. A former spouse's consent shall not be binding on a new
spouse.
(c) Each Transferred Employee on whose behalf a
Money Purchase Account is maintained shall have the right to waive the
Pre-retirement Survivor Annuity in accordance with paragraph (b), and to
revoke said waiver during an election period commencing on the first day
of the Plan Year in which the Transferred Employee attains age thirty-
five (35), or, if later, on the date the Transferred Employee first
becomes a Participant, and ending on the date of the Transferred
Employee's death; provided, however, that if the Transferred Employee's
employment with the Employer is terminated, the election period shall
commence no later than the date of termination of employment with
respect to amounts in the Money Purchase Account prior to such date.
The number of revocations, and subsequent new waivers shall not be
limited. Any new waivers shall comply with the requirements of
paragraph (b) above and this paragraph (c).
(d) The Committee shall provide to each Transferred
Employee on whose behalf a Money Purchase Account is maintained, within
the period beginning with the first day of the Plan Year in which the
Transferred Employee attains age thirty-two (32) and ending on the last
day of the Plan Year in which the Transferred Employee attains age
thirty-four (34), a written explanation of:
<PAGE> 110
(i) the terms and conditions of the Pre-retirement
Survivor Annuity;
(ii) the Transferred Employee's right to waive the
Pre-retirement Survivor Annuity and the effect of such waiver;
(iii) the rights of the Transferred Employee's spouse
with respect to the Pre-retirement Survivor Annuity and any waiver
thereof, and any designation of a Beneficiary other than the spouse; and
(iv) the Transferred Employee's right to revoke any
waiver of the Pre-retirement Survivor Annuity and the effect of such
revocation;
provided, however, that if the Transferred Employee becomes a
Participant after attaining age thirty-two (32), said written
explanation shall be provided to him by the end of the three (3) year
period beginning with the first day of the Plan Year of his entry, or,
if the Transferred Employee terminates service prior to age thirty-two
(32), said written explanation shall be provided to him within one (1)
year following such termination.
(4)(a) Except as otherwise provided in this 13.5, the
methods of distribution set forth in 7.3 shall include a life annuity
with respect to any Transferred Employee who was a former participant in
the Software Plan or the UCCEL Plan; provided, however, that if such
Transferred Employee is married at the time of distribution and elects a
life annuity as the method of distribution, such Transferred Employee's
distribution shall be paid in the form of a Qualified Joint and Survivor
Annuity as described in paragraph (2)(a) above, unless the Transferred
<PAGE> 111
Employee elects otherwise pursuant to the provisions of paragraph (2)(c)
above.
(b) Except as otherwise provided in 7.1(1) and 7.3(d),
a Transferred Employee who was a former participant in the ADR Plan and
who terminates employment with the Employer other than by reason of
retirement, disability or death, may elect to have his Rollover
Contribution Account paid to him no later than sixty (60) days following
the end of the Plan Year in which his employment terminates under the
method specified in 7.3(b); provided, however, that if such Transferred
Employee does not make the preceding election, or the election set forth
in 7.1(1), such Transferred Employee's vested Account balance shall be
held in the Fund until he reaches Normal Retirement Age, at which time
it shall be paid to him under any method specified in 7.3.
(c) Except as otherwise provided in 7.3(d) and 7.6, a
Transferred Employee who was a former participant in the ADR Plan may
elect to defer the distribution of his Rollover Contribution Account for
a specified number of calendar months up to one (1) year following such
Transferred Employee's termination of employment with the Employer, in
which case such Rollover Contribution Account shall be distributed to
him in a lump sum.
(d) Except as otherwise provided in 7.1(1) and 7.3(d),
a Transferred Employee who was a former participant in the On-Line Plan
<PAGE> 112
and who terminates employment with the Employer prior to his Normal
Retirement Age or due to Disability (before his attainment of Normal
Retirement Age), may elect to defer the distribution of his Rollover
Contribution Account until the later of (i) the date he attains age
sixty-two (62) or (ii) the later of (A) the date he attains age sixty
(60) or (B) the fifth anniversary of the date he commenced participation
in the On-Line Plan.
(5) Notwithstanding any other provision in this Plan to the
contrary and except as otherwise provided in 7.1(1) and 7.3(d), the
subparagraphs set forth below shall apply solely with respect to the
Rollover Contribution Account of any Transferred Employee who was a
former participant in the CompuSystems Plan.
(a) The methods of distribution set forth under 7.3
shall include the following:
(i) a straight life annuity;
(ii) a single life annuity with a period
certain of five (5), ten (10) or fifteen (15) years, as elected by the
Participant;
(iii) a single life annuity with installment
refund;
(iv) a survivorship life annuity with
installment refund and survivor percentages of fifty (50), sixty-six and
two-thirds (66-2/3) or one hundred (100);
<PAGE> 113
(v) a fixed period annuity for any period of
whole months which is not less than sixty (60) and does not exceed the
life expectancy of the Participant and his designated Beneficiary, where
life expectancy is not recalculated; and
(vi) a series of installments elected by the
Participant with a minimum payment each year beginning with the year
during which the Participant attains age seventy and one-half (70-1/2).
The payment for the first year in which a minimum payment is required
under this option shall be made by April 1 of the following calendar
year and the payment for the second year and each succeeding year shall
be made by December 31 of that year. The minimum payment shall be based
on a period equal to the joint and last survivor expectancy of the
Participant and the Participant's spouse, if any, where the joint and
last survivor expectancy is recalculated. If a Participant dies before
receiving all installment payments due under this option, any remaining
installments shall be paid to the Participant's Beneficiary in one lump
sum. If a Transferred Employee elects this method of distribution, he
may elect on any later date to have the balance of his Rollover
Contribution Account paid under any of the optional forms set forth
<PAGE> 114
above, including a single lump sum distribution.
(b) If the Transferred Employee elects an
annuity under subparagraph (a) above and is married at the time
distributions commence, distributions of his Rollover Contribution
Account shall be made in the form of a Qualified Joint and Survivor
Annuity as described in paragraph (2)(a) above, unless such Employee
elects otherwise in accordance with the spousal consent provisions set
forth in paragraph (2)(c) above.
(c)(i) If the Transferred Employee terminates
employment with the Employer on or after Normal Retirement Age, Early
Retirement Age (as defined herein) or due to Disability, distributions
shall commence in accordance with 7.2(1) or (2), whichever is
applicable; provided, however, that the Transferred Employee may elect
to defer the distribution of his Rollover Contribution Account until the
latest date distributions are required to commence under 7.6. For
purposes of this subparagraph (c)(i), Early Retirement Age means, with
respect to a Transferred Employee hereunder, the first day of the month
coinciding with or first following the date such Employee terminates
employment with the Employer on or after the later of the date he
attains age fifty-five (55) or his completion of seven (7) Years of
Service for vesting purposes, and prior to his Normal Retirement Age.
<PAGE> 115
(ii) If a Transferred Employee terminates
employment with the Employer other than by reason of retirement,
disability or death, distributions shall be made in accordance with
7.1(1); provided, however, that (A) the forms of distribution under
said Section shall, with respect to such Employee's Rollover
Contribution Account, include the methods of distribution set forth
under subparagraph (a) above, and (B) such Transferred Employee may
elect to defer the distribution of his Rollover Contribution Account
until the latest date distributions are required to commence under 7.6.
If such Transferred Employee terminates employment with at least seven
(7) Years of Service for vesting purposes, the Transferred Employee may
elect to commence the distribution of his Rollover Contribution Account
upon his attainment of age fifty-five (55).
(iii) If a Transferred Employee remains in
employment with the Employer on or after his Normal Retirement Age, such
Employee may elect to commence the distribution of his Rollover
Contribution Account at such Age, regardless of whether the Employee has
terminated employment with the Employer.
(d) If the Transferred Employee dies prior to the
commencement of benefit payments, the forms of distribution set forth
under 7.2(3) shall include the methods set forth under subparagraph (a)
above, except that a series of installments shall not be available under
<PAGE> 116
subparagraph (a) above if the Beneficiary is not the Transferred
Employee's surviving spouse.
(6) Except as otherwise provided in 7.1(1) and 7.3(d),
the subparagraphs set forth below shall apply solely with respect to the
Rollover Contribution Account of any Transferred Employee who was a
former participant in the Pansophic Plan.
(a) The methods of distribution which such
Transferred Employee may elect upon termination of employment for
any reason set forth under 7.1, 7.2(1) or 7.2(2) shall include the
following:
(i) a lump sum;
(ii) substantially equal annual or semi-
annual installments over a fixed number of years not extending
beyond the life expectancy of the Transferred Employee or the life
expectancy of the Transferred Employee and a designated Beneficiary; or
(iii) a life annuity; provided, however that
if such Transferred Employee is married at the time of
distribution and elects to receive his Rollover Contribution Account
under this life annuity option, such Transferred Employee's Rollover
Contribution Account shall be paid in the form of a Qualified Joint and
Survivor Annuity as described in paragraph (2)(a) above, unless the
Transferred Employee elects otherwise pursuant to the provisions of
paragraph (2)(c) above.
<PAGE> 117
(b) If such Transferred Employee dies prior to
to the commencement of benefit payments, the forms of distribution
set forth under 7.2(3) shall include the following:
(i) substantially equal annual or semi-
annual installments over a fixed number of years not extending
beyond the life expectancy of the designated Beneficiary; or
(iii) a life annuity.
(7) Except as otherwise provided in 7.1(1) and 7.3(d),
the subparagraphs set forth below shall apply solely with respect to the
Rollover Contribution Account of any Transferred Employee who was a
former participant in the Nantucket Plan.
(a) The methods of distribution which such
Transferred Employee may elect upon termination of employment for
the reasons set forth under 7.1 shall include the installment method
set forth under 7.3(b).
(b) Upon termination of employment for any reason set
forth under 7.1, 7.2(1) or 7.2(2), the Transferred Employee may elect
to defer the distribution of his Rollover Contribution Account until the
April 1 following the date upon which he attains age seventy and one-
half (70-1/2).
13.6 Assignment of Money Purchase Account for Plan Loan.
In no event shall any portion of the Money Purchase Account
of a married Transferred Employee be assigned as collateral for a loan
<PAGE> 118
pursuant to the provisions of 8.2(6), unless such Transferred
Employee's spouse consents, in writing, to such assignment, within the
ninety (90) day period prior to the distribution of the loan. Such
spousal consent shall be in the manner described in 13.5(2)(c).
13.7 Rollover Contribution Account of Non-Transferred Employees.
In the event that a Prior Plan maintained by a Prior Company
shall be terminated on or after such Prior Company becomes a Related
Company (as defined in 1.1(19), any amounts transferred to the Plan as
a result of the application of Treas. Reg. Section 1.411(a)-11(e)(1) on
behalf of employees who where participants in the Prior Plan but who are
not Transferred Employees, shall be allocated to a Rollover Contribution
Account on behalf of such employees. Such employees shall be one
hundred (100%) percent vested at all times in such Rollover Contribution
Accounts, the distribution of which shall be subject to the applicable
provisions of 13.5.
IN WITNESS WHEREOF, Computer Associates International, Inc., as
authorized by its Board of Directors, has caused these presents to be
signed by its proper officer this 20th day of May, 1993.
Attest: COMPUTER ASSOCIATES INTERNATIONAL, INC.
/s/Belden Frease By: /s/Peter A. Schwartz
- ---------------- ----------------------
Secretary Title: Sr. Vice President/CFO
<PAGE> A-1
APPENDIX
Effective Date Provisions
The provisions of this amended and restated Plan shall be
effective March 31, 1992, except as otherwise provided below or except
as otherwise provided in the Plan:
The definition of Code set forth under Article I shall be
effective as of January 1, 1987.
The definition of Compensation set forth under Article I
shall be effective with respect to contributions allocated for Plan
Years beginning after December 31, 1986, except as may otherwise be
provided under the Treasury Regulations promulgated under Section 414(s)
of the Code; provided, however, that the $200,000 limitation as set
forth in said definition shall be effective with respect to
contributions allocated for Plan Years beginning after December 31,
1988.
The definition of Plan set forth under Article I shall be
effective as of April 1, 1988.
Clause (d) in the definition of Related Company set forth
under Article I shall be effective with respect to Plan Years beginning
after December 31, 1984.
The last clause in the first sentence of Section 4.1(a),
paragraph (b) of Section 4.1, and Section 4.7 shall be effective with
respect to tax years beginning after December 31, 1986, except as may
otherwise be provided under the Tax Reform Act of 1986, as amended, and
any Treasury Regulations and other rulings and pronouncements
promulgated under Sections 401(k) and 402(g) of the Code.
The provisions relating to Voluntary Contributions set forth
in Sections 3.2, 3.3(ii), and 4.6 shall be effective July 1, 1993.
Section 4.4, paragraphs (3), (4) and (5) of Section 4.7, and
the proviso set forth in the first sentence of Section 4.2 shall be
effective July 1, 1993.
Paragraphs (3) and (4) of Section 4.8 shall be effective
January 1, 1992, except that any language set forth in Section 4.8
relating to Voluntary Contributions shall be effective July 1, 1993.
Paragraph (2) of Section 5.2 shall be effective with respect
to Plan Years beginning after December 31, 1988.
Section 5.2(5) shall be effective with respect to Plan Years
beginning after December 31, 1988, except as may otherwise be provided
under the Tax Reform Act of 1986, as amended, and any Treasury
<PAGE> A-2
Regulations and other rulings and pronouncements promulgated under
Sections 401(a)(26) and 410(b) of the Code.
Paragraphs (1) and (2) of Section 5.3 shall be effective
June 1, 1993, and said paragraphs as in effect under the terms of the
Plan prior to the adoption of this amendment and restatement shall be
effective from March 31, 1992 through May 31, 1993.
Paragraphs (1) and (2) of Section 5.4 shall be effective
with respect to Plan Years beginning after December 31, 1984.
Section 5.5(1) shall be effective with respect to Limitation
Years beginning after December 31, 1986.
The last paragraph of Section 7.3(b) shall be effective with
respect to Accounts in existence after December 31, 1984, except as may
otherwise be provided under the Treasury Regulations promulgated under
Section 401(a)(9) of the Code.
Clause (ii) in the second sentence of Section 7.4(2)(a) and
the comparable provisions of Section 13.5(2)(c) and (3)(b) shall be
effective with respect to Plan Years beginning after October 22, 1986.
Section 7.5 shall be effective with respect to Plan Years
beginning after December 31, 1988.
Section 7.6 shall be effective with respect to Accounts in
existence after December 31, 1984, except as may otherwise be provided
under the Treasury Regulations promulgated under Section 401(a)(9) of
the Code; provided, however, that paragraph (b) under said Section shall
be effective with respect to tax years beginning after December 31,
1988, except that the provisions of Section 401(a)(9)(C) of the Code as
in effect on December 31, 1988 shall apply in lieu of such paragraph (b)
with respect to tax years beginning after December 31, 1984 and prior to
such date, and except that the second sentence of said paragraph (b)
shall be effective July 1, 1993.
Paragraph (b) of Section 7.7 shall be effective with respect
to Accounts in existence after December 31, 1984, except as may
otherwise be provided under the Treasury Regulations promulgated under
Section 401(a)(9) of the Code.
Section 7.9 shall be effective with respect to distributions
made after December 31, 1992, except as may otherwise be provided under
any Treasury Regulations or other rulings and pronouncements promulgated
by the Secretary of the Treasury.
Paragraphs (2), (3) and (4) of Section 8.1 shall be
effective as of January 1, 1992.
Section 8.2 shall be effective with respect to loans made,
renewed or renegotiated after December 31, 1988, except that paragraphs
(2) and (5) therein shall be effective with respect to loans made,
<PAGE> A-3
renewed or renegotiated after December 31, 1986, and paragraphs (4) and
(6) therein shall be effective with respect to loans made, renewed or
renegotiated after October 18, 1989.
Section 9.1(b) shall be effective with respect to Plan Years
beginning after December 31, 1988.
Paragraph (1) of Section 9.6 shall be effective with respect
to Plan Years beginning after December 31, 1988.
The last sentence of Section 9.6(2) shall be effective with
respect to Plan Years beginning after December 31, 1986.
Paragraph (5) of Section 10.1 shall be effective with
respect to Plan Years beginning after December 31, 1988.
Section 11.2 shall be effective with respect to Plan Years
ending on or after March 30, 1993.
Paragraph (1) of Section 12.5 shall be effective with
respect to Plan Years beginning after December 31, 1988.
The exception set forth in Section 12.6 shall be effective
only with respect to Employees who have completed at least one (1) Hour
of Service during any Plan Year beginning after December 31, 1988.
Paragraph (1) of Section 12.3 shall be effective with
respect to Plan Years beginning after December 31, 1983.
The definition of Annuity Starting Date set forth under
Section 13.1 shall be effective with respect to Plan Years beginning
after December 31, 1984.
The spousal consent provisions set forth Section 13.6 shall
be effective with respect to loans made, renewed or renegotiated after
August 18, 1985.
Section 13.7 shall be effective with respect to Plan Years
beginning after December 31, 1988.
</TABLE>
FIRST AMENDMENT
TO THE
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
(As Amended and Restated Effective March 31, 1992)
WHEREAS, Computer Associates International, Inc. (the
"Employer") established and presently maintains the Computer Associates
Savings Harvest Plan (the "Plan") for its eligible employees; and
WHEREAS, the Employer desires to amend the Plan for the purposes
of (a) changing the allocation formula with respect to Employer
Discretionary Contributions, (b) complying with the limitation on
Compensation set forth in Section 401(a)(17) of the Internal Revenue
Code of 1986, as amended by the Omnibus Budget Reconciliation Act of
1993, and (c) permitting Participants to waive the thirty (30) day time
period for consent to a distribution under Section 411(a)(11) of the
Internal Revenue Code of 1986, as amended; and
WHEREAS, pursuant to Section 10.2(4) of the Plan, the Employer
is empowered to amend the Plan, in whole or in part, and at any time
from time to time;
NOW THEREFORE, the Plan is hereby amended in the following
respects:
1. A new sentence is hereby added to the end of Section
1.1(4), to read as follows:
<PAGE> 1
"For each Plan Year commencing after December 31, 1993, the $200,000
limitation (as adjusted) set forth above shall become $150,000, as
adjusted pursuant to Section 401(a)(17)(B) of the Code and any Treasury
Regulations or other notices or rulings promulgated thereunder."
2. Paragraph (2) of Section 5.2 is hereby amended in its
entirety, to read as follows:
"(2) Except as provided in 5.5 and paragraph (4) below,
for each Plan Year during which an Employer Discretionary Contribution
is made each Participant's Employer Contribution Account shall be
credited, at the end of such Year, with that portion of the Employer
Discretionary Contribution for such Plan Year which bears the same
ratio to such Contribution as each Participant's Compensation for such
Plan Year bears to the total Compensation of all Participants for such
Plan Year."
3. The provisions set forth under paragraph (3) of Section
5.2 are hereby deleted in their entirety therefrom, and said paragraph
(3) is hereby designated as "Reserved."
4. Section 7.5 is hereby amended in its entirety, to read as
follows:
"7.5 Notification. The Committee shall provide each
Participant whose vested Account exceeds $3,500 with a written notice
of distribution no later than thirty (30) days and no more than ninety
<PAGE> 3
(90) days prior to the date on which distributions are scheduled to
commence. Said notice shall set forth a general description of the
material features and an explanation of the relative values of, the
optional forms of distributions set forth under 7.3 in a manner that
would satisfy the notice requirements of Section 417(a)(3) of the Code
and the regulations promulgated thereunder, and shall also inform the
Participant of his right, if any, to defer the commencement of his
distribution. If a distribution is one to which Sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less
than thirty (30) days after such notice is provided by the Committee,
provided that the notice clearly informs the Participant of his right
to a period of at least thirty (30) days after receiving the notice to
consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and the Participant,
after receiving the notice, affirmatively elects a distribution.
Anything herein to the contrary notwithstanding, except as provided in
7.6 below, (a) no benefit shall be payable under the Plan to any
Participant or Beneficiary hereunder unless and until such Participant
or Beneficiary shall submit a written application therefor, on a form
provided by the Committee, specifying the method in which such benefit
is to be paid, and (b) in the event that there shall be a change in the
investment funds available to Participants pursuant to 11.1 or a change
in the Plan Trustee, distributions under the Plan may be suspended to
the extent necessary to accomplish such changes."
<PAGE> 4
5. The provisions of this Amendment shall be effective as of
March 31, 1993, except that Item 1 shall be effective with respect to
contributions allocated for Plan Years beginning after December 31,
1993 and, except as may otherwise be provided under any regulations,
notices or other rulings promulgated by the Secretary of the Treasury,
Item 4 shall be effective with respect to distributions made after
December 31, 1993.
IN WITNESS WHEREOF, Computer Associates International, Inc., as
authorized by its Board of Directors, has caused this Amendment to be
signed by its proper officer this 24th day of March, 1994.
ATTEST: COMPUTER ASSOCIATES INTERNATIONAL, INC.
/s/Belden Frease By: /s/Lisa Mars
- ---------------- ------------------
Secretary Title: Sr VP
SECOND AMENDMENT
TO THE
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
(As Amended and Restated Effective March 31, 1992)
WHEREAS, Computer Associates International, Inc. (the
"Employer") established and presently maintains the Computer
Associates Savings Harvest Plan (the "Plan") for its eligible
employees;
WHEREAS, the Employer recently acquired The ASK Group, Inc.
("ASK") and Newtrend L.P. ("Newtrend") and desires to amend the Plan
with respect to those ASK and Newtrend employees who became Employees
of the Employer pursuant to said acquisitions;
WHEREAS, the Employer also desires to amend the Plan for the
purposes of (a) clarifying that the classification of part-time
Employees who are excluded from participating in the Plan are those
Employees who are employed by the Employer on an hourly basis, (b)
permitting distributions pursuant to a Qualified Domestic Relations
Order prior to a Participant's earliest retirement age, and (c)
making certain technical changes to the Plan relating to hardship
distributions and the determination of Highly Compensated Employees;
and
WHEREAS, pursuant to 10.2(4) of the Plan, the Employer is
empowered to amend the Plan, in whole or in part, and at any time and
from time to time;
NOW THEREFORE, the Plan is hereby amended in the following
respects:
1. Paragraph (7) of Section 1.1 is hereby amended to read in
its entirety as follows:
"(7) Employee shall mean any individual employed by the
<PAGE> 1
Employer, except that such term shall not include an independent
contractor or any individual employed by the Employer on an hourly
basis."
2. Subparagraph (a) of Section 3.1(3) is hereby amended to
read in its entirety as follows:
"(a) is employed by the Employer on an hourly basis;
or."
3. The following paragraph is hereby added to the end of
Section 4.7(1)(b)(ii):
"Notwithstanding anything in this subparagraph (ii) to
the contrary, for purposes of determining Highly Compensated
Employees under this subparagraph (ii), the calendar year calculation
election set forth in paragraph (b) of Q&A-14 of Treas. Reg.
1.414(q)-1T shall apply."
4. The second full paragraph of Section 8.1(2)(b) is hereby
amended to read in its entirety as follows:
"SECOND: From the Participant's Rollover Contribution
Account, if any, but not including any portion of such Account which
is allocated to a Particant's Money Purchase Account (as described
in 13.3)."
5. The following new paragraph is hereby added to the end of
Section 8.1(2)(b):
"FOURTH: From the Money Purchase Account (as described
in 13.3), if any, of a Participant who is a Transferred Employee (as
defined in 13.1(4)); provided, however, that in no event shall a
withdrawal of any portion of such Account be permitted unless such
Transferred Employee's spouse, if any, consents to such withdrawal
within the ninety (90) day period prior to said withdrawal. Such
spousal consent shall be given in the manner described in
13.5(2)(c)."
<PAGE> 3
6. The following sentence is hereby added to the end of the
last paragraph of Section 9.3(2):
"Notwithstanding the preceding or anything in the Plan to
the contrary, a Qualified Domestic Relations Order may provide for
payment to an Alternate Payee prior to the Participant's earliest
retirement age, as said term is defined in Section 414(p)(4)(B) of
the Code."
7. The last sentence of Section 10.5 is hereby amended to
read in its entirety as follows:
"Notwithstanding anything herein to the contrary,
effective July 1, 1993, payments from the Company Stock Fund may, at
the Employee's, Participant's or Beneficiary's election, be made
either (a) in kind in full shares of Company Stock and in cash for
any partial shares, or (b) entirely in cash; provided, however, that
with respect to a distribution pursuant to 7.1(1)(i), the last
sentence of 7.2(3), or 7.3(d), if no election is made by the
Employee, Participant or Beneficiary within a reasonable period of
time prior to such distribution, as established by the Committee and
applied in a uniform and nondiscriminatory manner, then any payments
to such Employee, Participant or Beneficiary from the Company Stock
Fund shall be made in cash."
8. Paragraph (2) of Section 13.1 is hereby amended to read
in its entirety as follows:
"(2) Prior Company shall mean Software International
Corporation; BPI Systems, Inc.; UCCEL Corporation; Applied Data
Research, Inc.; Cullinet Software, Inc.; DBMS, Inc.; CompuSystems,
Inc.; On-Line Software International, Inc.; Pansophic Systems,
<PAGE> 4
Incorporated; Nantucket Corporation; The ASK Group, Inc.; or
Newtrend L.P., whichever is applicable."
9. The language set forth in the last five lines of
paragraph (3) of Section 13.1 commencing with the word "or" is hereby
deleted therefrom and the following language shall be substituted in
its place:
". . . the Nantucket Corporation 401(k) Profit Sharing
Plan as effective January 1, 1991, and as thereafter amended
(hereinafter referred to as the "Nantucket Plan"), The ASK Group
401(k) Plan as amended and restated effective January 1, 1992, and as
thereafter amended (hereinafter referred to as the "ASK Plan"), or
the Newtrend L.P. 401(k) Savings Plan as amended and restated
effective January 1, 1989, and as thereafter amended (hereinafter
referred to as the "Newtrend Plan"), whichever is applicable with
respect to a Transferred Employee."
10. A new paragraph (8) is hereby added to Section 13.5, to
read as follows:
"(8) Except as otherwise provided in 7.1(1), 7.2(3)
and 7.3(d), the subparagraphs set forth below shall apply solely
with respect to the Rollover Contribution Account of any Transferred
Employee who was a former participant in the ASK Plan.
(a) The methods of distribution available to such
Transferred Employee, or if applicable, his designated Beneficiary,
under 7.1 and 7.2 shall include equal monthly, quarterly or annual
installments over a fixed number of years not extending, in the case
of a Participant, beyond the life expectancy of the Participant or
the life expectancy of the Participant and a designated Beneficiary,
and, in the case of a designated Beneficiary, beyond the life
expectancy of the designated Beneficiary.
<PAGE> 5
(b) Such Transferred Employee may elect to
commence the distribution of his Rollover Contribution Account at any
time after his termination of employment and prior to his Normal
Retirement Age. Any such election shall be in writing on such forms
as may be prescribed by the Committee.
(c) Such Transferred Employee may, at any time
after attainment of age 59-1/2, elect to withdraw all or a portion of
his Rollover Contribution Account from the Plan, in accordance with
the procedures set forth in 8.1(3)."
11. A new paragraph (9) is hereby added to Section 13.5, to
read as follows:
"(9) Except as otherwise provided in 7.1(1) , 7.2(3) and
7.3(d), the subparagraphs set forth below shall apply solely with
respect to the Rollover Contribution Account, including any Money
Purchase Account as described in 13.3, of any Transferred Employee
who was a former participant in the Newtrend Plan.
(a)(i) The installment methods of distribution
available to such Transferred Employee, or, if applicable, his
designated Beneficiary, under 7.1 and 7.2 shall include equal
monthly, quarterly, semiannual or annual installments over a fixed
number of years not extending, in the case of a Participant, beyond
the life expectancy of the Participant or the life expectancy of the
Participant and a designated Beneficiary, and, in the case of a
designated Beneficiary, beyond the life expectancy of the designated
Beneficiary.
(ii) The Qualified Joint and Survivor
Annuity described in 13.5(2)(a) shall include an annuity payable for
the lifetime of the Transferred Employee with a survivor annuity for
the lifetime of the Transferred Employee's surviving spouse equal to,
pursuant to the Participant's election, seventy-five percent (75%)
or one hundred percent (100%) of the annuity payable during the
<PAGE> 6
joint lives of the Transferred Employee and the Transferred
Employee's spouse and which is equal in value to the Qualified Joint
and Survivor Annuity described in 13.5(2)(a). Notwithstanding
anything in this 13.5(9) to the contrary, the provisions of this
subparagraph (ii) shall apply only with respect to the Transferred
Employee's Money Purchase Account, if any.
(b) Such Transferred Employee may elect to
commence the distribution of his Rollover Contribution Account at any
time after his termination of employment and prior to his Normal
Retirement Age. Any such election shall be in writing on such forms
as may be prescribed by the Committee."
12. This Amendment shall be effective March 31, 1995;
provided, however, that Item 3 shall be effective April 1, 1987,
except as may otherwise be provided under the regulations promulgated
under Section 414(q) of the Code or pursuant to any other notices or
rulings, Item 10 and the references in Items 8 and 9 to The ASK
Group, Inc. and the ASK Plan, respectively, shall be effective June
23, 1994, and Item 11 and the references in Items 8 and 9 to Newtrend
L.P. and the Newtrend Plan, respectively, shall be effective October
20, 1994.
IN WITNESS WHEREOF, the Employer has caused this Amendment to
be signed by its proper officers this 21st day of April, 1995.
ATTEST: COMPUTER ASSOCIATES INTERNATIONAL, INC.
/s/Belden Frease By: /s/Lisa Mars
- ---------------- ------------------------
Secretary Title: Sr. Vice President
THIRD AMENDMENT
TO THE
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
(As Amended and Restated Effective March 31, 1992)
WHEREAS, Computer Associates International, Inc. (the
"Employer") established and presently maintains the Computer
Associates Savings Harvest Plan (the "Plan") for its eligible
employees;
WHEREAS, the Employer desires to amend the Plan to permit
eligible Employees of the Employer to commence participation in the
Plan with respect to Pre-Tax Contributions on the first day of the
calendar month following their date of hire, and to make certain
other technical changes to the Plan; and
WHEREAS, pursuant to 10.2(4) of the Plan, the Employer is
empowered to amend the Plan, in whole or in part, and at any time and
from time to time;
NOW THEREFORE, the Plan is hereby amended effective November 1,
1995, in the following respects:
1. Paragraph (2) of Section 3.1 is hereby amended to read in
its entirety as follows:
"(2)(a) Except as provided in paragraph (3) below,
each Employee shall be eligible to participate with respect to Pre-
Tax Contributions on the first day of the calendar month following
the date the Employee completes his first Hour of Service. An
Employee who separates from service with the Employer and resumes
employment with the Employer shall become eligible to participate
again on the first day of the calendar month following the date he
completes his first Hour of Service after his resumption of
<PAGE> 1
employment, except as provided in paragraph (3) below. An eligible
Employee hereunder shall remain eligible as long as his employment
continues.
(b) Except as provided in paragraph (3) below, each
Employee shall be eligible to participate with respect to Employer
Matching Contributions, Employer Discretionary Contributions, and
Voluntary Contributions on the first day of the month which follows
the completion by such Employee of a Period of Service of one year.
A Re-employed Individual who completed a Period of Service of one
year before his Period of Severance began shall become eligible to
participate on the date his Period of Severance ends, except as
provided in paragraph (3) below. An eligible Employee hereunder
shall remain eligible as long as his employment continues. "
2. The first sentence of paragraph (1) of Section 7.1 is
hereby amended to read in its entirety as follows:
" Except as otherwise provided in paragraph (2) below,
the non-forfeitable Account balance of a Participant who has
terminated employment with the Employer other than by reason of
retirement, Disability or death, shall be distributed to him in a
lump sum as soon as practicable following the Participant's
termination of employment but not later than 60 days following the
date such Participant incurs a One Year Break-in-Service, provided
that either (i) the value of such balance at the date of
distribution is $3,500 or less, or (ii) the Participant requests such
a distribution."
3. The text set forth in paragraph (2) of Section 7.1 is
hereby deleted its entirety therefrom, and said paragraph is hereby
designated as "[Reserved]."
<PAGE> 3
4. The first sentence of paragraph (2) of Section 7.2 is
hereby amended to read in its entirety as follows:
"Except as provided in 7.3(d), a Participant who
terminates employment at or after Early Retirement Age or due to
Disability (before his attainment of Normal Retirement Age) may elect
to have the amounts credited to his Pre-Tax, Voluntary and Rollover
Contribution Accounts and the non-forfeitable portion of his Employer
Contribution Account paid to him under any method specified in 7.3
selected by such Participant, in which case any such payments shall
be made or shall commence as soon as practicable following such
termination of employment, but no later than 60 days following the
date such Participant incurs a One Year Break-in-Service; provided,
however, that if the Participant does not make the preceding
election, such amounts shall be held in the Fund until the
Participant reaches his Normal Retirement Age, at which time it shall
be paid to him under any method specified in 7.3 selected by the
Participant."
IN WITNESS WHEREOF, the Employer has caused this Amendment to
be signed by its proper officers this 18 day of October, 1995.
ATTEST: COMPUTER ASSOCIATES INTERNATIONAL, INC.
/s/Belden Frease By: /s/Peter A. Schwartz
- ---------------- ---------------------
Secretary Title: SVP-Finance
Trust Agreement
Between
Computer Associates International, Inc.
And
Fidelity Management Trust Company
COMPUTER ASSOCIATES SAVINGS HARVEST PLAN
TRUST
Dated as of March 31, 1993
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
- ------- ----
<S><C> <C>
1 Trust ....................................................... 2
2 Exclusive Benefit and Reversion of
Sponsor Contributions ...................................... 2
3 Disbursements................................................ 3
(a) Directions from Administrator
(b) Limitations
4 Investment of Trust ......................................... 3
(a) Selection of Investment Options
(b) Available Investment Options
(c) Participant Direction
(d) Mutual Funds
(e) Sponsor Stock
(f) Notes
(f) Reliance of Trustee Directions
(g) Trustee Powers
5 Recordkeeping and Administrative Services to Be Performed.... 16
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
6 Compensation and Expenses ................................... 18
7 Directions and Indemnification .............................. 18
(a) Identity of Administrator and Named Fiduciary
(b) Directions from Administrator
(c) Directions from Named Fiduciary
(d) Co-Fiduciary Liability
(e) Indemnification
(f) Survival
8 Resignation or Removal of Trustee ........................... 20
(a) Resignation
(b) Removal
9 Successor Trustee ........................................... 20
(a) Appointment
(b) Acceptance
(c) Corporate Action
10 Termination ................................................. 21
- i -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Continued)
Section Page
<S><C> <C>
11 Resignation, Removal, and Termination Notices ................ 21
12 Duration ..................................................... 22
13 Amendment or Modification .................................... 22
14 General ...................................................... 22
(a) Performance by Trustee, its Agents or Affiliates
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
15 Governing Law ................................................ 23
(a) Massachusetts Law Controls
(b) Trust Agreement Controls
</TABLE>
<TABLE>
<CAPTION>
Schedules
<S> <C>
A. Recordkeeping and Administrative Services
B. Fee Schedule
C. Investment Options
D. Sponsor's Authorization Letter
E. Named Fiduciary's Authorization Letter
F. IRS Determination Letter or Opinion of Counsel
G. Telephone Exchange Procedures
</TABLE>
-ii-
<PAGE>
TRUST AGREEMENT, dated as of the thirty-first day of
March, 1993, between COMPUTER ASSOCIATES INTERNATIONAL,
INC., a Delaware corporation, having an office at One
Computer Associates Plaza, lslandia, NY 11788-7000 (the
"Sponsor"), and FIDELITY MANAGEMENT TRUST COMPANY, a
Massachusetts trust company, having an office at 82
Devonshire Street, Boston, Massachusetts 02109 (the
"Trustee").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the Computer
Associates Savings Harvest Plan (the "Plan"); and
WHEREAS, the Sponsor wishes to establish a trust to
hold and invest plan assets under the Plan for the
exclusive benefit of participants in the Plan and their
beneficiaries; and
WHEREAS, the Plan Committee (the "Named Fiduciary")
is the named fiduciary of the Plan (within the meaning of
section 402(a) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")); and
WHEREAS, the Trustee is willing to hold and invest the
aforesaid plan assets in trust among several investment
options selected by the Named Fiduciary; and
WHEREAS, the Sponsor wishes to have the Trustee
perform certain ministerial recordkeeping and
administrative functions under the Plan; and
WHEREAS, the Plan Committee (the "Administrator") is
the administrator of the Plan (within the meaning of
section 3(16)(A) of ERISA); and
<PAGE> 2
WHEREAS, the Trustee is willing to perform
recordkeeping and administrative services for the Plan
within a framework of plan provisions, guidelines and
interpretations conveyed in writing to the Trustee by the
Administrator.
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual covenants and agreements set forth
below, the Sponsor and the Trustee agree as follows:
Section 1. Trust. The Sponsor hereby establishes the
Computer Associates
Savings Harvest Plan Trust (the "Trust"), with the
Trustee. The Trust shall consist of an initial
contribution of money or other property acceptable to the
Trustee in its sole discretion, made by the Sponsor or
transferred from a previous trustee under the Plan, such
additional sums of money and Sponsor Stock (hereinafter
defined) as shall from time to time be delivered to the
Trustee under the Plan, all investments made therewith
and proceeds thereof, and all earnings and profits
thereon, less the payments that are made by the Trustee
as provided herein, without distinction between principal
and income. The Trustee hereby accepts the Trust on the
terms and conditions set forth in this Agreement. In
accepting this Trust, the Trustee shall be accountable
for the assets received by it, subject to the terms and
conditions of this Agreement.
Section 2. Exclusive Benefit and Reversion Of Sponsor
Contributions.
Except as provided under applicable law, no part of the
Trust may be used for, or diverted to, purposes other
than the exclusive benefit of the participants in the
Plan or their beneficiaries prior to the satisfaction of
all liabilities with respect to the participants and
their beneficiaries.
<PAGE> 3
Section 3. Disbursements.
(a) Directions from Administrator. The Trustee shall
make disbursements in the amounts and in the manner that
the Administrator directs from time to time in writing.
The Trustee shall have no responsibility to ascertain any
direction's compliance with the terms of the Plan or of
any applicable law or the direction's effect for tax
purposes or otherwise; nor shall the Trustee have any
responsibility to see to the application of any
disbursement.
(b) Limitations. The Trustee shall not be required to
make any disbursement in excess of the net realizable
value of the assets of the Trust at the time of the
disbursement. The Trustee shall not be required to make
any disbursement in cash unless the Administrator has
provided a written direction as to the assets to be
converted to cash for the purpose of making the
disbursement.
Section 4. Investment of Trust.
(a) Selection Of Investment Options. The Trustee
shall have no responsibility for the selection of
investment options under the Trust and shall not render
investment advice to any person in connection with the
selection of such options.
(b) Available Investment Options. The Named Fiduciary
shall direct the Trustee as to what investment options:
(i) the Trust shall be invested in during the participant
recordkeeping reconciliation period, and (ii) the
investment options in which Plan participants may invest
in, subject to the following limitations. The Named
Fiduciary may determine to offer as investment options
only (i) securities issued by the investment companies
advised by Fidelity Management & Research Company
("Mutual Funds"), (ii) equity securities issued by the
Sponsor or an affiliate which are publicly-traded and
which are "qualifying employer securities" within the
meaning of section 407(d)(5) of ERISA ("Sponsor Stock"),
(iii) notes evidencing loans to Plan participants in
<PAGE> 4
accordance with the terms of the Plan, and (iv)
collective investment funds maintained by the Trustee for
qualified plans; provided, however, that the Trustee
shall be considered a fiduciary with investment
discretion only with respect to Plan assets that are
invested in collective investment funds maintained by the
Trustee for qualified plans. The investment options
initially selected by the Named Fiduciary are identified
on Schedules "A" and "C" attached hereto. The Named
Fiduciary may add additional investment options with the
consent of the Trustee and upon mutual amendment of this
Trust Agreement and the Schedules thereto to reflect such
additions.
(c) Participant Direction. Each Plan participant
shall direct the Trustee in which investment option(s) to
invest the assets in the participant's individual
accounts. Such directions may be made by Plan
participants by use of the telephone exchange system
maintained for such purposes by the Trustee or its agent,
in accordance with written Telephone Exchange Guidelines
attached hereto as Schedule "G". Any directions made by a
Participant using the telephone exchange system shall be
treated as a direction made in writing by the Named
Fiduciary for purposes of Section 7 hereafter. In the
event that the Trustee fails to receive a proper
direction, the assets shall be invested in the securities
of the Mutual Fund set forth for such purpose on Schedule
"C", until the Trustee receives a proper direction and
the Trustee shall notify the Sponsor immediately. if such
situation occurs.
(d) Mutual Funds. The Sponsor hereby acknowledges
that it has received from the Trustee a copy of the
prospectus for each Mutual Fund selected by the Named
Fiduciary as a Plan investment option. Trust investments
in Mutual Funds shall be subject to the following
limitations:
<PAGE> 5
(i) Execution of Purchases and Sale. Purchases
and sales of Mutual Funds (other than for Exchanges)
shall be made on the date on which the Trustee receives
from the Sponsor in good order all information and
documentation necessary to accurately effect such
purchases and sales (or in the case of a purchase, the
date on which the Trustee has received a wire transfer of
funds necessary to make such purchase). Exchanges of
Mutual Funds shall be made in accordance with the
Telephone Exchange Guidelines attached hereto as Schedule
"G".
(ii) Voting. At the time of mailing of notice
of each annual or special stockholders' meeting of any
Mutual Fund, the Trustee shall send a copy of the notice
and all proxy solicitation materials to each Plan
participant who has shares of the Mutual Fund credited to
the participant's accounts, together with a voting
direction form for return to the Trustee or its designee.
The participant shall have the right to direct the
Trustee as to the manner in which the Trustee is to vote
the shares credited to the participant's accounts (both
vested and unvested). The Trustee shall vote the shares
as directed by the participant. The Trustee shall not
vote shares for which it has received no directions from
the participant. During the participant recordkeeping
reconciliation period, the Sponsor shall have the right
to direct the Trustee as to the manner in which the
Trustee is to vote the shares of the Mutual Funds in the
Trust. With respect to all rights other than the right to
vote, the Trustee shall follow the directions of the
participant and if no such directions are received, the
directions of the Named Fiduciary. The Trustee shall have
no duty to solicit directions from participants or the
Sponsor.
(e) Sponsor Stock. Trust investments in Sponsor Stock
shall be made via the Computer Associates Common Stock
Fund which shall consist of shares of Sponsor Stock and
short-term liquid investments, including a commingled
money market fund ("Fidelity Employee Benefit U.S.
Government Reserves Portfolio") maintained by the
Trustee, necessary to satisfy the
<PAGE> 6
Fund's cash needs for transfers and payments. A cash
target range shall be determined in conjunction with the
Sponsor for the cash portion of the Computer Associates
Common Stock Fund. The Trustee is responsible for
ensuring that the actual cash held in the Computer
Associates Common Stock Fund falls within the agreed upon
range over time. Each participant's proportional interest
in the Computer Associates Common Stock Fund shall be
measured in units of participation, rather than shares of
Sponsor Stock. Such units shall represent a proportionate
interest in all of the assets of the Computer Associates
Common Stock Fund, which includes shares of Sponsor
Stock, short-term investments and at times, receivables
for dividends and/or Sponsor Stock sold and payables for
Sponsor Stock purchased. A Net Asset Value ("NAV") per
unit will be determined daily for each unit outstanding
of the Computer Associates Common Stock Fund. The return
earned by the Computer Associates Common Stock Fund will
represent a combination of the dividends paid on the
shares of Sponsor Stock held by the Computer Associates
Common Stock Fund, gains or losses realized on sales of
Sponsor Stock, appreciation or depreciation in the market
price of those shares owned, and interest on the short-
term investments held by the Computer Associates Common
Stock Fund. Dividends received by the Computer Associates
Common Stock Fund are reinvested in additional shares of
Sponsor Stock. Investments in Sponsor Stock shall be
subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan,
the Trust may be invested in Sponsor Stock to the extent
necessary to comply with investment directions under
Section 4(c) of this Agreement.
(ii) Fiduciary Duty of Named Fiduciary. The
Trustee shall not be responsible for monitoring the
suitability under the fiduciary duty rules of section
404(a)(1) of ERISA (as modified by section 404(a)(2) of
ERISA) of acquiring and holding Sponsor Stock. The
Trustee shall not be liable for any loss, or by reason of
any breach, which arises from the
<PAGE> 7
directions of the Named Fiduciary with respect to the
acquisition and holding of Sponsor Stock, unless it is
clear on their face that the actions to be taken under
those directions would be prohibited by the foregoing
fiduciary duty rules or would be contrary to the terms of
the Plan or this Agreement.
(iii) Execution Of Purchases and Sales. (A)
Purchases and sales of Sponsor Stock (other than for
exchanges) shall be made on the open market on the date
on which the Trustee receives from the Named Fiduciary or
Administrator in good order all information and
documentation necessary to accurately effect such
purchases and sales (or, in the ease of purchases, the
subsequent date on which the Trustee has received a wire
transfer of the funds necessary to make such purchases)
in conjunction with the participants' individual account
information contained on the Trustee's recordkeeping
system. Exchanges of Sponsor Stock shall be made in
accordance with the Telephone Exchange Guidelines
attached hereto as Schedule "G". Such general rules shall
not apply in the following circumstances:
(1) If the Trustee is unable to
determine the number of shares required to be purchased or
sold on such day; or
(2) If the Trustee is unable to
purchase or sell the total number of shares required to
be purchased or sold on such day as a result of market
conditions; or
(3) If the Trustee is prohibited by the
Securities and Exchange Commission, the New York Stock
Exchange, or any other regulatory body from purchasing or
selling any or all of the shares required to be purchased
or sold on such day.
<PAGE> 8
In the event of the occurrence of the circumstances
described in (1), (2), or (3) above, the Trustee shall
purchase or sell such shares as soon as possible
thereafter and shall determine the price of such
purchases or sales to be the average purchase or sales
price of all such shares purchased or sold, respectively.
The Trustee may follow directions from the Named
Fiduciary to deviate from the above purchase and sale
procedures provided that such direction is made in
writing by the Named Fiduciary.
(B) Use of an Affiliated Broker. The Sponsor hereby
authorizes the Trustee to use Fidelity Brokerage
Services, Inc. ("FBSI") to provide brokerage services in
connection with any purchase or sale of Sponsor Stock in
accordance with directions from Plan participants. FBSI
shall execute such directions directly or through its
affiliate, National Financial Services Company ("NFSC").
The provision of brokerage services shall bc subject to
the following:
(i) As consideration for such
brokerage services, the Sponsor agrees that FBSI shall be
entitled to remuneration under this authorization
provision in the amount of three and one-half cents
($.035) commission on each share of Sponsor Stock. Any
change in such remuneration may be made only by a signed
agreement between Sponsor and Trustee.
(ii) Following the procedures set
forth in Department of Labor Prohibited Transaction Class
Exemption 86-128, the Trustee will provide the Sponsor
with the following documents: (1) a description of FBSI's
brokerage placement practices; (2) a copy of PTCE 86-128;
and (3) a form by which the Sponsor may terminate this
authorization to use a broker affiliated with the
Trustee. The Trustee will provide the Sponsor with this
termination form annually, as well as an annual report
which summarizes all securities transaction-related
charges incurred by the Plan, and the Plan's annualized
turnover rate.
<PAGE> 9
(iii) Any successor organization of
FBSI, through reorganization, consolidation, merger or
similar transactions, shall, upon consummation of such
transaction, become the successor broker in accordance
with the terms of this authorization provision.
(iv) The Trustee and FBSI shall
continue to rely on this authorization provision until
notified to the contrary. The Sponsor reserves the right
to terminate this authorization upon thirty (30) days
written notice to FBSI (or its successor) and the
Trustee, in accordance with Section 11 of this Agreement.
(iv) Securities Law Reports. The Named Fiduciary
shall be responsible for filing all reports required
under Federal or state securities laws with respect to
the Trust's ownership of Sponsor Stock, including,
without limitation, any reports required under section 13
or 16 of the Securities Exchange Act of 1934, and shall
immediately notify the Trustee in writing of any
requirement to stop purchases or sales of Sponsor Stock
pending the filing of any report. The Trustee shall
provide to the Named Fiduciary such information on the
Trust's ownership of Sponsor Stock as the Named Fiduciary
may reasonably request in order to comply with Federal or
State securities laws.
(v) Voting and Tender Offers. Notwithstanding any
other provision of this Agreement the provisions of this
Section shall govern the voting and tendering of Sponsor
Stock. The Sponsor, after consultation with the Trustee,
shall provide and pay for all printing, mailing,
tabulation and other costs associated with the voting and
tendering of Sponsor Stock.
<PAGE> 10
(A) Voting.
(1) When the issuer of the Sponsor Stock
files preliminary proxy solicitation materials with the
Securities and Exchange Commission, the Sponsor shall
cause a copy of all materials to be simultaneously sent
to the Trustee. Based on these materials the Trustee
shall prepare a voting instruction form. At the time of
mailing of notice of each annual or special stockholders'
meeting of the issuer of the Sponsor Stock, the Sponsor
shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Plan
participant with an interest in Sponsor Stock held in the
Trust, together with the foregoing voting instruction
form to be returned to the Trustee or its designee. The
form shall show the proportional interest in the number
of full and fractional shares of Sponsor Stock credited
to the participant's accounts held in the Computer
Associates Common Stock Fund. The Sponsor shall provide
the Trustee with a copy of any materials provided to the
participants and shall certify to the Trustee that the
materials have been mailed or otherwise sent to
participants.
(2) Each participant with an interest in the
Computer Associates Common Stock Fund shall have the
right, acting in the capacity of a named fiduciary within
the meaning of section 402 of ERISA, to direct the
Trustee as to the manner in which the Trustee is to vote
(including not to vote) that number of shares of Sponsor
Stock reflecting such participant's proportional interest
in the Computer Associates Common Stock Fund (both vested
and unvested). Directions from a participant to the
Trustee concerning the voting of Sponsor Stock shall be
communicated in writing, or by mailgram or similar means.
These directions shall be held in confidence by the
Trustee and shall not be divulged to the Sponsor, or any
officer or employee thereof, or any other person. Upon
its receipt of the directions, the Trustee shall vote
<PAGE> 11
the shares of Sponsor Stock reflecting the participant's
proportional interest in the Computer Associates Common
Stock Fund as directed by the participant. The Trustee
shall not vote shares of Sponsor Stock reflecting a
participant's proportional interest in the Computer
Associates Common Stock Fund for which it has received no
direction from the participant.
(B) Tender Offers.
(1) Upon commencement of a tender offer for
any securities held in the Trust that are Sponsor Stock,
the Sponsor shall notify each Plan participant with an
interest in such Sponsor Stock of the tender offer and
utilize its best efforts to timely distribute or cause to
be distributed to the participant the same information
that is distributed to shareholders of the issuer of
Sponsor Stock in connection with the tender offer, and,
after consulting with the Trustee, shall provide and pay
for a means by which the participant may direct the
Trustee whether or not to tender the Sponsor Stock
reflecting such participant's proportional interest in
the Computer Associates Common Stock Fund (both vested
and unvested). The Sponsor shall provide the Trustee with
a copy of any material provided to the participants and
shall certify to the Trustee that the materials have been
mailed or otherwise sent to participants.
(2) Each participant shall have the right to
direct the Trustee to tender or not to tender some or all
of the shares of Sponsor Stock reflecting such
participant's proportional interest in the Computer
Associates Common Stock Fund (both vested and unvested).
Directions from a participant to the Trustee concerning
the tender of Sponsor Stock shall be communicated in
writing, or by mailgram or such similar means as is
agreed upon by the Trustee and the Sponsor under the
preceding paragraph. These directions shall be held in
confidence by the
<PAGE> 12
Trustee and shall not be divulged to the Sponsor, or any
officer or employee thereof, or any other person except
to the extent that the consequences of such directions
are reflected in reports regularly communicated to any
such persons in the ordinary course of the performance of
the Trustee's services hereunder. The Trustee shall
tender or not tender shares of Sponsor Stock as directed
by the participant. The Trustee shall not tender shares
of Sponsor Stock reflecting a participant's proportional
interest in the Computer Associates Common Stock Fund for
which it has received no direction from the participant.
(3) A participant who has directed the
Trustee to tender some or all of the shares of Sponsor
Stock reflecting the participant's proportional interest
in the Computer Associates Common Stock Fund may, at any
time prior to the tender offer withdrawal date, direct
the Trustee to withdraw some or all of the tendered
shares reflecting the participant's proportional
interest, and the Trustee shall withdraw the directed
number of shares from the tender offer prior to the
tender offer withdrawal deadline. Prior to the
withdrawal deadline, if any shares of Sponsor Stock not
credited to participants' accounts have been tendered,
the Trustee shall redetermine the number of shares of
Sponsor Stock that would be tendered under Section
4(e)(v)(B)(3) if the date of the foregoing withdrawal
were the date of determination, and withdraw from the
tender offer the number of shares of Sponsor Stock not
credited to participants' accounts necessary to reduce
the amount of tendered Sponsor Stock not credited to
participants' accounts to the amount so redetermined. A
participant shall not be limited as to the number of
directions to tender or withdraw that the participant may
give to the Trustee.
(4) A direction by a participant to the
Trustee to tender shares of Sponsor Stock reflecting the
participant's proportional interest in the Computer
Associates Common Stock Fund shall not be considered a
written election under the Plan by the participant to
<PAGE> 13
withdraw, or have distributed, any or all of his
withdrawable shares. The Trustee shall credit to each
proportional interest of the participant from which the
tendered shares were taken the proceeds received by the
Trustee in exchange for the shares of Sponsor Stock
tendered from that interest. Pending receipt of
directions (through the Administrator) from the
participant or the Named Fiduciary, as provided in the
Plan, as to which of the remaining investment options the
proceeds should be invested in, the Trustee shall invest
the proceeds in the Mutual Fund described in Schedule
"C".
(vi) Shares Credited. For all purposes of this
Section, the number of shares of Sponsor Stock deemed
"credited" or "reflected" to a participant's proportional
interest shall be determined as of the last preceding
valuation date. The trade date is the date the
transaction is valued.
(vii) General. With respect to all rights other than
the right to vote, the right to tender, and the right to
withdraw shares previously tendered, in the case of
Sponsor Stock credited to a participant's proportional
interest in the Computer Associates Common Stock Fund,
the Trustee shall follow the directions of the
participant and if no such directions are received, the
directions of the Named Fiduciary. The Trustee shall
have no duty to solicit directions from participants.
With respect to all rights other than the right to vote
and the right to tender, in the case of Sponsor Stock not
credited to participants' accounts, the Trustee shall
follow the directions of the Named Fiduciary.
(viii) Conversion. All provisions in this Section 4(e)
shall also apply to any securities received as a result of
a conversion of Sponsor Stock.
<PAGE> 14
(f) Notes. The Administrator shall act as the
Trustee's agent for the purpose of holding all trust
investments in participant loan notes and related
documentation and as such shall (i) hold physical custody
of and keep safe the notes and other loan documents, (ii)
collect and remit all principal and interest payments to
the Trustee, (iii) keep the proceeds of such loans
separate from the other assets of the Administrator and
clearly identify such assets as Plan assets, and (iv)
cancel and surrender the notes and other loan
documentation when a loan has been paid in full. To
originate a participant loan, the Plan participant shall
direct the Trustee as to the type of loan to be made from
the participant's individual account. Such directions
shall be made by Plan participants by use of the
telephone exchange system maintained for such purpose by
the Trustee or its agent. The Trustee shall determine,
based on the current value of the participant's account,
the amount available for the loan. Based on the quarterly
interest rate supplied by the Administrator in accordance
with the terms of the Plan, the Trustee shall advise the
participant of such interest rate, as well as the
installment payment amounts. The Trustee shall forward
the loan document to the participant for execution and
submission for approval to the Administrator. The
Administrator shall have the responsibility for approving
the loan and instructing the Trustee to send the loan
proceeds to the Administrator or to the participant if so
directed by the Administrator. In all cases, such
instruction by the Administrator shall be made within
thirty (30) days of the participant's initial request
(the origination date).
(g) Reliance of Trustee on Directions. (i) The
Trustee shall not be liable for any loss, or by reason of
any breach, which arises from any participant's exercise
or non-exercise of rights under this Section 4 over the
assets in the participant's accounts except if the
Trustee is negligent in carrying out the directions of
the participant.
(ii) The Trustee shall not be liable for any loss, or
by reason of any breach, which arises from the Named
Fiduciary's exercise or non-exercise of rights under this
Section 4, unless it was clear on their face that the
actions to be taken under the Named Fiduciary's
directions
<PAGE> 15
were prohibited by the fiduciary duty rules of section
404(a) of ERISA or were contrary to the terms of the Plan
or this Agreement.
(h) Trustee Powers. The Trustee shall have the
following powers and
authority:
(i) Subject to paragraphs (b), (c), (d) and (e)
of this Section 4, to sell, exchange, convey, transfer,
or otherwise dispose of any property held in the Trust,
by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the
application of the purchase money or other property
delivered to the Trustee or to inquire into the validity,
expediency, or propriety of any such sale or other
disposition.
(ii) Subject to paragraphs (b) and (c) of this
Section 4, to invest in collective investment funds
maintained by the Trustee for qualified plans, in which
ease the provisions of each collective investment fund in
which the Trust is invested shall be deemed adopted by
the Sponsor and the provisions thereof incorporated as a
part of this Trust as long as the fund remains exempt
from taxation under Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended.
(iii) To cause any securities or other property
held as part of the Trust to be registered in the
Trustee's own name, in the name of one or more of its
nominees, or in the Trustee's account with the Depository
Trust Company of New York and to hold any investments in
bearer form, but the books and records of the Trustee
shall at all times show that all such investments are
part of the Trust.
(iv) To keep that portion of the Trust in cash
or cash balances as the Named Fiduciary or Administrator
may, from time to time, deem to be in the best interest
of the Trust.
<PAGE> 16
(v) To make, execute, acknowledge, and deliver any
and all documents of transfer or conveyance and to carry
out the powers herein granted.
(vi) To settle, compromise, or submit to
arbitration any claims, debts, or damages due to or
arising from the Trust; to commence or defend suits or
legal or administrative proceedings; to represent the
Trust in all suits and legal and administrative hearings;
and to pay all reasonable expenses arising from any such
action, from the Trust if not paid by the Sponsor;
provided, however, that the above is subject to the
approval of the Named Fiduciary or the Administrator.
(vii) To employ legal, accounting, clerical, and other
assistance
as may be required in carrying out the provisions of this
Agreement and to pay their reasonable expenses and
compensation from the Trust if not paid by the Sponsor;
provided, however, that the above is subject to the
approval of the Named Fiduciary or the Administrator.
(viii) To do all other acts although not
specifically mentioned herein, as the Trustee may deem
necessary to carry out any of the foregoing powers and
the purposes of the Trust.
Section 5. Recordkeeping and Administrative Services to
Be Performed.
(a) General. The Trustee shall perform those
recordkeeping and administrative functions described in
Schedule "A" attached hereto. These recordkeeping and
administrative functions shall be performed within the
framework of the Administrator's written directions
regarding the Plan's provisions, guidelines and
interpretations.
(b) Accounts. The Trustee shall keep accurate
accounts of all investments, receipts, disbursements, and
other transactions hereunder, and shall report the value
of the assets held in the Trust as of the last day of
each fiscal quarter of the Plan and, if not on the last
day of a fiscal quarter, the date on which the Trustee
resigns or is removed
<PAGE> 17
as provided in Section 8 of this Agreement or is
terminated as provided in Section 10 (the "Reporting
Date"). Within thirty (30) days following each Reporting
Date or within sixty (60) days in the case of a Reporting
Date caused by the resignation or removal of the Trustee,
or the termination of this Agreement, the Trustee shall
file with the Administrator a written account setting
forth all investments, receipts, disbursements, and other
transactions effected by the Trustee between the
Reporting Date and the prior Reporting Date, and setting
forth the value of the Trust as of the Reporting Date.
Except as otherwise required under ERISA, upon the
expiration of six (6) months from the date of filing such
account with the Administrator, the Trustee shall have no
liability or further accountability to anyone with
respect to the propriety of its acts or transactions
shown in such account, except with respect to such acts
or transactions as to which the Sponsor shall within such
six (6) month period file with the Trustee written
objections.
(c) Inspection and Audit. All records generated by
the Trustee in accordance with paragraphs (a) and (b)
shall be open to inspection and audit, during the
Trustee's regular business hours prior to the termination
of this Agreement, by the Administrator or any person
designated by the Administrator. Upon the resignation or
removal of the Trustee or the termination of this
Agreement, the Trustee shall provide to the
Administrator, at no expense to the Sponsor, in the
format regularly provided to the Administrator, a
statement of each participant's accounts as of the
resignation, removal, or termination, and the Trustee
shall provide to the Administrator or the Plan's new
recordkeeper such further records as are reasonable, at
the Sponsor's expense.
(d) Effect of Plan Amendment. A confirmation of the
current qualified status of the Plan is attached hereto
as Schedule "F". The Trustee's provision of the
recordkeeping and administrative services set forth in
this Section 5 shall be conditioned on the Sponsor
delivering to the Trustee a copy of any amendment to the
Plan as soon as administratively feasible following the
amendment's adoption, with, if requested, an IRS
determination letter or an opinion of counsel
<PAGE> 18
substantially in the form of Schedule "F" covering such
amendment, and on the Administrator providing the Trustee
on a timely basis with all the information the
Administrator deems necessary for the Trustee to perform
the recordkeeping and administrative services and such
other information as the Trustee may reasonably request.
(e) Returns, Reports and Information. The
Administrator shall be responsible for the preparation
and filing of all returns, reports, and information
required of the Trust or Plan by law. The Trustee shall
provide the Administrator with such information as the
Administrator may reasonably request to make these
filings. The Administrator shall also be responsible for
making any disclosures to Participants required by law
including, without limitation, such disclosures as may be
required under federal or state truth-in-lending laws
with regard to Participant loans.
Section 6. Compensation and Expenses. Within thirty (30)
days of receipt of the Trustee's bill, which shall be
computed and billed in accordance with Schedule 'B'
attached hereto and made a part hereof, as amended from
time to time, the Sponsor shall send to the Trustee a
payment in such amount. All expenses of the Trustee
relating directly to the acquisition and disposition of
investments constituting part of the Trust, and all taxes
of any kind whatsoever that may be levied or assessed
under existing or future laws upon or in respect of the
Trust or the income thereof, shall be a charge against
and paid from the appropriate Plan participants'
accounts.
Section 7. Directions and Indemnification.
(a) Identity of Administrator and Named Fiduciary.
The Trustee shall be fully protected in relying on the
fact that the Named Fiduciary and the Administrator under
the Plan are the individuals or persons named as such
above or such other individuals or persons as the Sponsor
may notify the Trustee in writing.
<PAGE> 19
(b) Directions from Administrator. Whenever the
Administrator provides a direction to the Trustee, the
Trustee shall not be liable for any loss, or by reason of
any breach, arising from the direction if the direction
is contained in a writing (or is oral and immediately
confirmed in a writing) signed by any individual whose
name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Administrator
in the form attached hereto as Schedule "D", provided the
Trustee reasonably believes the signature of the
individual to be genuine, unless it is clear on the
direction's face that the actions to be taken under the
direction would bc prohibited by the fiduciary duty rules
of section 404(a) of ERISA or would be contrary to the
terms of the Plan or this Agreement. Such direction may
also be made via EDT in accordance with procedures agreed
to by the Administrator and the Trustee; provided,
however, that the Trustee shall be fully protected in relying on such
direction as if it were a direction made in writing by the
Administrator. The Trustee shall have no responsibility to ascertain
any direction's (i) accuracy, (ii) compliance with the terms
of the Plan or any applicable law, or (iii) effect for
tax purposes or otherwise.
(c) Directions from Named Fiduciary. Whenever the
Named Fiduciary or Sponsor provides a direction to the
Trustee, the Trustee shall not be liable for any loss, or
by reason of any breach, arising from the direction (i)
if the direction is contained in a writing (or is oral
and immediately confirmed in a writing) signed by any
individual whose name and signature have been submitted
(and not withdrawn) in writing to the Trustee by the
Named Fiduciary in the form attached hereto as Schedule
"E" and (ii) if the Trustee reasonably believes the
signature of the individual to be genuine, unless it is
clear on the direction's face that the actions to be
taken under the direction would be prohibited by the
fiduciary duty rules of section 404(a) of ERISA or would
be contrary to the terms of the Plan or this Agreement.
(d) Co-Fiduciary Liability. In any other case, the
Trustee shall
<PAGE> 20
not be liable for any loss, or by reason of any breach,
arising from any act or omission of another fiduciary
under the Plan except as provided in section 405(a) of
ERISA.
(e) Indemnification. The Sponsor shall indemnify the
Trustee against, and hold the Trustee harmless from, any
and all loss, damage, penalty, liability, cost, and
expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred
by, imposed upon, or asserted against the Trustee by
reason of any claim, regulatory proceeding, or litigation
arising from any act done or omitted to be done by any
individual or person with respect to the Plan or Trust,
excepting only any and all loss, etc., arising from the
Trustee's negligence or bad faith.
(f) Survival. The provisions of this Section 7 shall
survive the termination of this Agreement.
Section 8. Resignation or Removal of Trustee.
(a) Resignation. The Trustee may resign at any time
upon sixty (60) days' notice in writing to the Sponsor,
unless a shorter period of notice is agreed upon by the
Sponsor.
(b) Removal. The Sponsor may remove the Trustee at
any time upon thirty (30) days' notice in writing to the
Trustee, unless a shorter period of notice is agreed upon
by the Trustee.
Section 9. Successor Trustee.
(a) Appointment. If the office of Trustee becomes
vacant for any reason, the Sponsor may in writing appoint
a successor trustee under this Agreement. The successor
trustee shall have all of the rights, powers, privileges,
obligations, duties, liabilities, and immunities granted
to the Trustee under this Agreement. The successor'
trustee and predecessor trustee shall not be liable for
the acts or omissions of the
other with respect to the Trust.
<PAGE> 21
(b) Acceptance. When the successor trustee accepts
its appointment under this Agreement, title to and
possession of the Trust assets shall immediately vest in
the successor trustee without any further action on the
part of the predecessor trustee. The predecessor trustee
shall execute all instruments and do all acts that
reasonably may be necessary or reasonably may be
requested in writing by the Sponsor or the successor
trustee to vest title to all Trust assets in the
successor trustee or to deliver all Trust assets to the
successor trustee.
(c) Corporate Action. Any successor of the Trustee or
successor trustee, through sale or transfer of the
business or trust department of the Trustee or successor
trustee, or through reorganization, consolidation, or
merger, or any similar transaction, shall, upon
consummation of the transaction, become the successor
trustee under this Agreement.
Section 10. Termination. This Agreement may be terminated
at any time by the Sponsor upon thirty (30) days' notice
in writing to the Trustee. On the date of the termination
of this Agreement, the Trustee shall forthwith transfer
and deliver to such individual or entity as the Sponsor
shall designate, all cash and assets then constituting
the Trust. If, by the termination date, the Sponsor has
not notified the Trustee in writing as to whom the assets
and cash are to be transferred and delivered, the Trustee
may bring an appropriate action or proceeding for leave
to deposit the assets and cash in a court-of competent
jurisdiction. The Trustee shall be reimbursed by the
Sponsor for all costs and expenses of the action or
proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
Section 11. Resignation, Removal, and Termination
Notices. All notices of resignation, removal, or
termination under this Agreement must be in
<PAGE> 22
writing and mailed to the party to which the notice is
being given by certified or registered mail, return
receipt requested, to the Sponsor c/o Lisa Mars, Computer
Associates International, Inc., One Computer Associates
Plaza, Islandia, NY 11788-7000, and to the Trustee c/o
John M. Kimpel, Fidelity Investments, 82 Devonshire
Street, Boston, Massachusetts 02109, or to such other
addresses as the parties have notified each other of in
the foregoing manner.
Section 12. Duration. This Trust shall continue in effect
without limit as to time, subject, however, to the
provisions of this Agreement relating to amendment,
modification, and termination thereof.
Section 13. Amendment or Modification. This Agreement may
be amended or modified at any time and from time to time
only by an instrument executed by both the Sponsor and
the Trustee. Notwithstanding the foregoing, to reflect
increased operating costs the Trustee may once each
calendar year amend Schedule "B' without the Sponsor's
consent upon seventy-five (75) days written notice to the
Sponsor; however, no such fee increase shall be made
prior to March 31, 1995.
Section 14. General.
(a) Performance by Trustee, its Agents or Affiliates.
The Sponsor acknowledges and authorizes that the services
to be provided under this Agreement shall be provided. by
the Trustee, its agents or affiliates, including Fidelity
Investments Institutional Operations Company or its
successor, and that certain of such services may be
provided pursuant to one or more other contractual
agreements or relationships.
(b) Entire Agreement. This Agreement contains all of
the terms agreed upon between the parties with respect to
the subject matter hereof.
(c) Waiver. No waiver by either party of any failure
<PAGE> 23
or refusal to comply with an obligation hereunder shall be
deemed a waiver of any other or subsequent failure or
refusal to so comply.
(d) Successors and Assigns. The stipulations in this
Agreement shall inure to the benefit of, and shall bind,
the successors and assigns of the respective parties.
(e) Partial Invalidity. If any term or provision of
this Agreement or the application thereof to any person
or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by
law.
(f) Section Headings. The headings of the various
sections and subsections of this Agreement have been
inserted only for the purposes of convenience and are not
part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the
provisions of this Agreement.
Section 15. Governing Law.
(a) Massachusetts Law Controls. The validity,
construction, effect and administration of this Agreement
shall be governed by and interpreted in accordance with
the banking laws of the Commonwealth of Massachusetts to
the extent they govern the activities of the Trustee and
otherwise in accordance with the laws of the State of New
York, except to the extent those laws are superseded
under Section 514 of ERISA.
(b) Trust Agreement Controls. The Trustee is not a
party to the Plan, and in the event of any conflict
between the provisions of the Plan and the provisions of
this Agreement, the provisions of this Agreement shall
control.
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
COMPUTER ASSOCIATES
INTERNATIONAL, INC.
Attest:/s/Belden Frease By:/s/Lisa Mars
---------------- ------------
Secretary Sr. Vice President
FIDELITY MANAGEMENT TRUST
COMPANY
Attest:/s/Douglas O. Kont By:/s/John P. O'Reilly
------------------ -------------------
Assistant Clerk Senior Vice President
<PAGE> 25
Schedule "C"
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary
hereby directs the Trustee that participants' individual
accounts may be invested in the following investment
options:
Fidelity Money Market Trust: Retirement Money Market Portfolio
Fidelity Intermediate Bond Fund
Fidelity Puritan Fund
Fidelity Magellan Fund
Fidelity Growth & Income Portfolio
Fidelity U.S. Equity Index Portfolio
Computer Associates Common Stock
The mutual fund advised by Fidelity Management &
Research Company referred to in Section 4(c) shall be
Fidelity Money Market Trust: Retirement Money Market
Portfolio.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By/s/Lisa Mars 3/23/93
--------------------------
Date
<PAGE> 26
Schedule "G"
TELEPHONE EXCHANGE PROCEDURES
The following telephone exchange procedures are currently
employed by Fidelity Investments Retirement Services
Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (EST) to 8:00 p.m.
on each business day. A "business day" is any day on
which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone
exchange procedures at its discretion.
Mutual Funds
Exchanges Between Mutual Funds
Participants may call on any business day to
exchange between the mutual funds. If the request
is received before 4:00 p.m. (EST), it will receive
that day's trade date. Calls received after 4:00
p.m. (EST) will be processed on a next day basis.
Computer Associates Common Stock Fund
Exchanges Between Mutual Funds and Computer Associates
Common Stock Fund
Participants may call on any business day to
exchange between the mutual funds and the Computer
Associates Common Stock Fund. If the request is
received before 4:00 p.m. (EST), it will receive
that day's trade date. Calls received after 4:00
p.m. (EST) will be processed on a next day basis.
Exchange Restriction
It is the intention of the Trustee to maintain a
sufficient liquidity reserve in the Computer
Associates Common Stock Fund to meet exchange,
redemption or withdrawal requests. However, if
there is insufficient liquidity in the Computer
Associates Common Stock Fund to allow for same day
exchanges, the Trustee will be required to sell
shares of Sponsor Stock to meet the exchange
requests. If this occurs, the subsequent exchange
into other Plan investment options will take place
five (5) business days later. This allows for
settlement of the stock trade at the custodian and
the corresponding transfer to Fidelity.
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By/s/Lisa Mars 3/23/93
---------------------------
Date
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NEW YORK 11202
Employer Identification Number:
Date: June 12, 1995 13-2857434
File Folder Number:
113019543
COMPUTER ASSOCIATES INTERNATIONAL Person to Contact:
INC RUSSELL PARKER
ONE COMPUTER ASSOCIATES PLAZA Contact Telephone Number:
ISLANDIA, NY 11788 (518)431-0372
Plan Name:
COMPUTER ASSOCIATES
SAVINGS HARVEST PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please
keep this letter in your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-
1(b)(3) of the Income Tax Regulations.) We will review the
status of the plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that
may affect the qualified status of your employee retirement
plan, and provides information on the reporting requirements
for your plan. It also describes some events that
automatically nullify it. It is very important that you read
the publication.
This letter relates only to the status of your plan under
the Internal Revenue Code. It is not a determination regarding
the effect of other federal or local statutes.
Your plan does not consider total compensation for
purposes of figuring benefits. In operation, the provision may
discriminate in favor of employees who are highly compensated.
If this occurs, your plan will not remain qualified.
This determination letter is applicable for the
amendment(s) adopted on May 20, 1993.
This determination letter is also applicable for the
amendment(s) adopted on March 24, 1994.
This plan has been mandatorily disaggregated, permissively
aggregated, or restructured to satisfy the nondiscrimination
requirements.
This plan satisfies the nondiscrimination in amount
requirement of section 1.401(a)(4)-1(b)(2) of the regulations
on the basis of a design-based safe harbor described in the
regulations.
This letter is issued under Rev. Proc. 93-39 and considers
the amendments required by the Tax Reform Act of 1986 except as
Letter 835 (DO/CG)
<PAGE> 2
-2-
COMPUTER ASSOCIATES INTERNATIONAL
otherwise specified in this letter.
This plan satisfies the nondiscriminatory current
availability requirements of section 1.401(a)(4)-4(b) of the
regulations with respect to those benefits, rights and features
that are currently available to all employees in the plan's
coverage group. For this purpose, the plan's coverage group
consists of those employees treated as currently benefiting for
purposes of demonstrating that the plan satisfies the minimum
coverage requirements of section 410(b) of the Code.
This plan also satisfies the requirements of section
1.401(a)(4)-4(b) of the regulations with respect to the
specific benefits, rights and features for which you have
provided information.
This plan qualifies for Extended Reliance described in
the last paragraph of Publication 794 under the caption
"Limitations of a Favorable Determination Letter".
This letter may not be relied upon with respect to
whether the plan satisfies the qualification requirements as
amended by the Uruguay Round Agreements Act, Pub. 103-465.
The information on the enclosed addendum is an integral
part of this determination. Please be sure to read and keep it
with this letter.
If you have any questions concerning this matter, please
contact the person whose name and telephone number are shown
above.
Sincerely yours,
/s/Herbert J. Huff
------------------
Herbert J. Huff
District
Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
Addendum
Letter 835 (DO/CG)
<PAGE> 3
-3-
COMPUTER ASSOCIATES INTERNATIONAL
This determination letter is also applicable for the amendments
adopted on April 21, 1995.
Letter 835 (DO/CG)
May 30, 1996
Computer Associates International, Inc.
One Computer Associates Plaza
Islandia, New York 11788-7000
Gentlemen:
I have reviewed the Third Amendment to the Computer Associates
Savings Harvest Plan, as amended and restated effective March 31, 1992
(the "Plan") in an effort to determine whether the Plan, as amended by
the Third Amendment complies with the provisions of the Employee
Retirement Security Act of 1974, as amended ("ERISA") and the Internal
Revenue Code of 1986, as amended (the"Code").
The Plan was first effective as of August 1, 1985. Computer
Associates International, Inc. (the "Company") applied for and received
a
determination letter from the Internal Revenue Service ("IRS") dated
January 13, 1987 to the effect that the Plan was qualified under
Sections
401(a) and 401(k) of the Code.
The Plan was subsequently amended from time to time and was
amended
and restated in its entirety effective April 1,1988 for the purposes of
incorporating all prior amendments, introducing certain new investment
funds, and conforming Plan provisions to those requirements of the Tax
Reform Act of 1986 ("TRA'86") that were in effect with respect to the
Plan. The Company applied for and received a determination letter from
the IRS dated December 21, 1988 to the effect that the Plan, as amended
and restated, continued to be qualified under Sections 401(a) and 401(k)
of the Code.
Subsequent to the aforesaid determination letter, the Plan was
again amended from time to time and was most recently amended and
restated in its entirety effective March 31, 1992 for the purposes of
incorporating all amendments thereto, setting forth special provisions
dealing with the rights of certain participants under the Plan whose
accounts from predecessor qualified plans were transferred to the Plan,
making certain improvements to the Plan, and conforming Plan provisions
to the relevant provisions of TRA'86, the Omnibus Budget Reconciliation
Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical
and Miscellaneous Revenue Act of 1988, the Omnibus Reconciliation Act of
1989, and the Unemployment Compensation Amendments of 1992. The amended
and restated Plan was subsequently amended by the First Amendment
thereto for the purposes of changing the allocation formula with
Computer Associates International, Inc.
<PAGE> 2
Page 2
May 30, 1996
respect to Employer Discretionary Contributions, complying with the
provisions of Section 401(a)(17) of the Code, as amended by the Omnibus
Reconciliation Act of 1993, and permitting participants to waive the
thirty (30) day time period for consent to a distribution under Section
411(a)(11) of the Code. The amended and restated Plan was also
subsequently amended by the Second Amendment thereto for the purposes of
clarifying the classification of part-time employees who were excluded
from participation, permitting distributions pursuant to a qualified
domestic relations order prior to a participant's earliest retirement
age, and making certain technical changes to the Plan relating to
hardship distributions and the determination of highly compensated
employees.
The Company applied for a determination letter from the IRS with
respect to the amended and restated Plan and the First and Second
Amendments thereto. The IRS issued a determination letter dated June
12, 1995 to the effect that the Plan, as amended and restated, and as
further amended by the First and Second Amendments thereto, continued to
be qualified under Sections 401(a) and 401(k) of the Code.
Since the most recent determination letter referred to above, the
Plan was amended by the Third Amendment thereto for the purposes of
permitting eligible employees to commence participation in the Plan with
respect to Pre-Tax Contributions on the first day of the calendar month
following their date of hire, and to make certain other technical
changes to the Plan.
After reviewing the documents relating to the Plan and the Third
Amendment thereto, it is my opinion that the provisions of the written
documents constituting the Plan, as amended by the Third Amendment,
continue to be in compliance with the applicable provisions of ERISA and
the Code.
I hereby consent to the reference to me in the Registration
Statement under the caption "Legal Opinion" and to the filing of this
opinion as an exhibit to the Registration Statement in connection with
the registration of 3,000,000 shares of common stock, $.10 par value per
share, pertaining to the Plan.
Very truly yours,
/s/Maria A. Di Pippo
---------------------
Maria A. Di Pippo
Counsel/Human Resources
Consent of Independent Auditors
We hereby consent to the incorporation by reference in the Registration
Statement (Form S-8 for an aggregate 3,000,000 shares of Common Stock,
$.10 par value pertaining to the Computer Associates Harvest Plan) of
our report dated May 24, 1996, with respect to the consolidated
financial statements and schedules of Computer Associates
International, Inc. and subsidiaries included in its Annual Report
(Form 10-K) for the fiscal year ended March 31, 1996, filed with the
Securities and Exchange Commission and of our report dated July 7, 1995
with respect to the financial statements and schedules of the Computer
Associates Savings Harvest Plan included in its Annual Report (Form 11-
K) for the fiscal year ended March 30, 1995.
Ernst & Young LLP
New York, New York
May 30, 1996
