FORM S-8
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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DST SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 43-1581814
- ----------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
333 West 11th Street, 5th Floor
Kansas City, Missouri 64105-1594
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(Address of Principal Executive Offices)
DST SYSTEMS, INC. 401(k) PROFIT SHARING PLAN
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(Full title of the plan)
ROBERT C. CANFIELD, ESQ.
Senior Vice President, General Counsel, and Secretary
DST Systems, Inc.
333 West 11th Street, 5th Floor
Kansas City, Missouri 64105-1594
(816) 435-1000
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(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering price aggregate Registration
registered registered per share offering price fee
- ---------- ---------- -------------- -------------- ------------
Common Stock, 500,000 N/A $26,375,000(1) $7,332(1)
par value
$0.01 per share
Interests in the (2) N/A N/A (3)
Plan
- ----------------------------------------------------------------------
Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933 based on the
average of the high and low prices of a share of Common Stock of DST Systems,
Inc. reported for trading on the New York Stock Exchange on October
19, 1999.
To the extent that the interests in the Plan constitute securities, pursuant
to Rule 416(c), this Registration Statement shall be deemed to register an
indeterminate amount of interests in the Plan.
Pursuant to Rule 457(h)(2), no registration fee is required with respect to
the interests in the Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
EXPLANATORY NOTE
As permitted by the rules of the United States Securities and Exchange
Commission (the "Commission") under the Securities Act, and under the General
Instructions to Part I of Form S-8, this Registration Statement omits the
information specified in Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed by DST Systems, Inc. (the
"Registrant") with the Commission are incorporated in and made a part of this
Registration Statement by reference, as of their respective dates:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 dated March 29, 1999 (SEC File No. 001-14036)
and any amendments thereto (the "Annual Report");
(b) The following reports and any amendments thereto filed by the
Registrant with the Commission pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") since the
Annual Report: (i) Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1999 and June 30, 1999; (ii) Amendment on Form
10-Q/A dated May 18, 1999 to the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1999; (iii) Current Reports
on Form 8-K dated February 2, 1999, February 16, 1999, April 23, 1999,
July 23, 1999, August 20, 1999 and October 22, 1999; (iv) Amendment on
Form 8-K/A dated March 25, 1999 to the Registrant's Current Report on Form
8-K dated March 15, 1996, amended and restated April 13, 1998, and
August 4, 1998.
(c) The description of the Registrant's Common Stock under the
headings "Description of Capital Stock" and "Dividend Policy" in the
Registrant's Registration Statement on Form S-1 dated September 1, 1995
(SEC File No. 33-96526), as amended, which is incorporated by reference
in the Registrant's Registration Statement on Form 8-A filed October 30,
1995 (SEC File No. 1-14036) ("The Rights 8-A");
(d) The description of the Preferred Stock Purchase Rights contained
in The Rights 8-A;
(e) The first amendment dated July 31, 1998 (the "July 8-A Amendment")
to The Rights 8-A (SEC File No. 1-14036);
(f) The second amendment dated September 27, 1999 (the "September 8-A
Amendment") o The Rights 8-A (SEC File No. 1-14036);
(g) The Rights Agreement dated as of October 6, 1995 (the "Rights
Agreement"), between the Registrant and State Street Bank and Trust
Company, as rights agent, which is attached as Exhibit 4.4 to the
Registrants Registration Statement on Form S-1 dated September 1, 1995
(SEC File No. 33-96526);
(h) The first amendment dated as of July 9, 1998 to the Rights
Agreement, which is attached as Exhibit 99 to the July 8-A Amendment;
(i) The second amendment dated as of September 10, 1999 to the Rights
Agreement, which is attached as Exhibit 99 to the September 8-A Amendment;
(j) All other reports subsequently filed by the Registrant with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act prior to the filing of a post-effective amendment to the Registration
Statement related to this Registration Statement, which indicates that all
securities registered thereunder have been sold or which deregisters all
of the securities offered then remaining unsold.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides,
generally, that a corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (except actions by or in the
right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation against all expenses,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interest of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful. A corporation may
similarly indemnify such person for expenses actually and reasonably incurred
by such person in connection with the defense or settlement of any action or
suit by or in the right of the corporation, provided such person acted in
good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, in the case of claims,
issues and matters as to which such person shall have been adjudged liable to
the corporation, provided that a court shall have determined, upon
application, that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which such court shall deem proper.
Section 102(b)(7) of the DGCL provides, generally, that the certificate
of incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under section 174
of Title 8 of the DGCL, or (iv) for any transaction from which the director
may eliminate or limit the liability of a director for any act or omission
occurring prior to the date when such provision becomes effective.
The DST Certification of Incorporation provides that the directors and
officers of DST, or persons who are or were serving at the request of DST as
directors or officers of other corporations, shall be indemnified to the
maximum extent permitted by law against expenses incurred by such individuals
in defending a civil or criminal action, suit or proceeding brought against
such officers and directors in their capacities as such. Such expenses shall
be paid by DST in advance of the final disposition of such action, suit or
proceeding. As to directors and officers, the DST Certificate of
Incorporation requires receipt by DST of an undertaking by or on behalf of
the director or officer to repay such amount if it is ultimately determined
that the director or officer is not entitled to be indemnified by DST as
authorized by the DGCL. The foregoing right of indemnification and
advancement of expenses is not exclusive of any other rights of
indemnification and advancement of expenses to which any such individual may
be entitled by by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this Registration Statement on Form S-8 are listed in the
Exhibit Index of this Registration Statement, which Exhibit Index is
incorporated herein by reference in response to this Item.
The Registrant will submit or has submitted the DST Systems, Inc. 401(k)
Profit Sharing Plan and all amendments thereto to the Internal Revenue
Service ("IRS") in a timely manner and has made or will make all changes
required by the IRS in order to qualify such plan.
ITEM 9. UNDERTAKINGS.
The Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(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 with the Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) (230.424(b) of this chapter) if, in the
aggregate, the changes in the volume and price represent no more than 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the annual report of
the Registrant pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this 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 Securities 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 Securities Act and will be governed by the
final adjudication of such issue.
(Remainder of page intentionally left blank.)
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 City of Kansas City, State of Missouri, on
October 25, 1999.
DST SYSTEMS, INC.
By
/s/ Thomas A. McDonnell
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Thomas A. McDonnell
President and Chief Executive Officer
Each person whose signature appears below hereby constitutes and appoints
each of the Company's Chief Executive Officer, General Counsel, and Chief
Financial Officer (currently Thomas A. McDonnell, Robert C. Canfield, and
Kenneth V. Hager respectively) as such person's true and lawful attorney-in-
fact and agent, each acting alone, with full power of substitution and
resubstitution, for and in such person's name, place and stead, in any and
all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any exchange on which the Registrant's
stock registered hereunder is traded, granting unto such attorneys-in-fact
and agents, each acting alone, full power and authority to do and perform
each and every act and thing required and necessary to be done in and about
the premises, as fully to all intents and purposes as such person might or
could do in person, hereby ratifying and confirming all that such attorneys-
in-fact and agents, each acting alone, or such person'' substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
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/s/ A. Edward Allinson Director October 25, 1999
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A. Edward Allinson
/s/ George L. Argyros Director October 25, 1999
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George L. Argyros
/s/ Michael G. Fitt Director October 25, 1999
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Michael G. Fitt
/s/ William C. Nelson Director October 25, 1999
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William C. Nelson
/s/ M. Jeannine Strandjord Director October 25, 1999
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M. Jeannine Strandjord
/s/ Thomas A. McDonnell President, Chief October 25, 1999
------------------------ Executive Officer
Thomas A. McDonnell (Principal Executive
Officer), and Director
/s/ Thomas A. McCullough Director October 25, 1999
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Thomas A. McCullough
/s/ James C. Castle Director October 25, 1999
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James C. Castle
/s/ Kenneth V. Hager Vice President, October 25, 1999
----------------------- Chief Financial ---
Kenneth V. Hager Officer, and Treasurer
(Principal Financial
Officer)
/s/ Gregg W. Givens Vice President and October 25, 1999
- ------------------------ Chief Accounting ---
Gregg W. Givens Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
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4.1 DST Systems, Inc. 401(k) Profit Sharing Plan.
4.2 DST's Delaware Certificate of Incorporation, as restated,
which is attached as Exhibit 3.1 to DST's Registration
Statement on Form S-1 dated September 1, 1995 (SEC File No.
33-96526) (the "IPO Registration Statement"), is hereby
incorporated by reference as Exhibit 4.2.
4.3 Amended and Restated By-Laws of DST Systems, Inc., which are
attached as Exhibit 3.2 to DST's IPO Registration Statement,
are hereby incorporated by reference as Exhibit 4.3.
4.4. The Certificate of Designations dated October 16, 1995,
establishing the Series A Preferred Stock of the Company,
which is attached as Exhibit 4.3 to the Company's S-1
Registration Statement, is hereby incorporated by reference
as Exhibit 4.4.1.
4.4.2 The Summary of the Preferred Stock Purchase Rights set forth
in Form 8-A dated November 15, 1995 (SEC File No. 1-14036)
(the "The Rights 8-A") is hereby incorporated by reference
as Exhibit 4.4.2.
4.4.3 The first amendment dated July 30, 1998 (the "July 8-A
Amendment") to The Rights 8-A is hereby incorporated by
reference as Exhibit 4.4.3.
4.4.4 The second amendment dated September 27, 1999 (the
"September 8-A Amendment") to The Rights 8-A is hereby
incorporated by reference as Exhibit 4.4.4.
4.4.5 The Rights Agreement dated as of October 6, 1995 (the
"Rights Agreement"), between the Company and State Street
Bank and Trust Company, as rights agent, which is attached
as Exhibit 4.4 to the Company's IPO Registration Statement,
is hereby incorporated by reference as Exhibit 4.4.5.
4.4.6 The first amendment dated as of July 9, 1998 to the Rights
Agreement, which is attached as Exhibit 99 to the July 8-A
Amendment, is hereby incorporated by reference as Exhibit
4.4.6.
4.4.7 The second amendment dated as of September 10, 1999 to the
Rights Agreement, which is attached as Exhibit 99 to the
September 8-A Amendment, is hereby incorporated by reference
as Exhibit 4.4.7.
4.5 The description of the Company's Common Stock, set forth
under the headings "Description of Capital Stock" and
"Dividend Policy" in the IPO Registration Statement, is
hereby incorporated by reference as Exhibit 4.5.
5.1 Opinion of Sonnenschein Nath & Rosenthal, counsel to DST,
regarding legality (including consent).
23.1 Consent of Sonnenschein Nath & Rosenthal (included in
Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.
24 Power of Attorney (included on signature page).
DST SYSTEMS, INC.
401(K) PROFIT SHARING PLAN
(Effective January 1, 2000)
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.3 Affiliated Company . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.4 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.5 Break in Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.8 Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.9 Company Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.10 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11 Date of Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12 Deferred Compensation. . . . . . . . . . . . . . . . . . . . . . . . . .5
1.13 Disability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.14 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.15 Elective Contribution. . . . . . . . . . . . . . . . . . . . . . . . . .5
1.16 Eligibility Computation Period. . . . . . . . . . . . . . . . . . . . . 5
1.17 Eligible Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
1.18 Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.19 Excess Aggregate Contributions. . . . . . . . . . . . . . . . . . . . . 6
1.20 Excess Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.21 Excess Deferred Compensation. . . . . . . . . . . . . . . . . . . . . . 6
1.22 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
1.23 Forfeiture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.24 Former Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.25 415 Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.26 Highly Compensated Employee. . . . . . . . . . . . . . . . . . . . . . .7
1.27 Highly Compensated Former Employee. . . . . . . . . . . . . . . . . . . 8
1.28 Highly Compensated Participant. . . . . . . . . . . . . . . . . . . . . 8
1.29 Hour of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.30 Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.31 Leased Employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.32 Leave of Absence. . . . . . . . . . . . . . . . . . . . . . . . . . . .10
1.33 Matching Contribution. . . . . . . . . . . . . . . . . . . . . . . . . 11
1.34 Non-Elective Contribution. . . . . . . . . . . . . . . . . . . . . . . 11
1.35 Non-Highly Compensated Participant. . . . . . . . . . . . . . . . . . .11
1.36 Normal Retirement Age. . . . . . . . . . . . . . . . . . . . . . . . . 11
1.37 Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.38 Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
1.39 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.40 Qualified Non-Elective Contribution. . . . . . . . . . . . . . . . . . 11
1.41 Termination of Employment. . . . . . . . . . . . . . . . . . . . . . . 11
1.42 Top Heavy Plan, Top Heavy Plan Year, Super Top Heavy Plan. . . . . . . 11
1.43 Transition Year of Service. . . . . . . . . . . . . . . . . . . . . . .12
1.44 Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.45 Trust Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
1.46 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.47 Valuation Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
1.48 Year of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Change in Employment Status. . . . . . . . . . . . . . . . . . . . . . 13
2.3 Termination of Active Participation. . . . . . . . . . . . . . . . . . 14
ARTICLE III
CONTRIBUTION AND ALLOCATION
3.1 Formula for Determining Company Contributions. . . . . . . . . . . . . 14
3.2 Time of Payment of Company's Contribution. . . . . . . . . . . . . . . 15
3.3 Participant's Salary Deferral Election. . . . . . . . . . . . . . . . .15
3.4 Actual Deferral Percentage Test. . . . . . . . . . . . . . . . . . . . 18
3.5 Adjustment to Actual Deferral Percentage Test. . . . . . . . . . . . . 20
3.6 Actual Contribution Percentage Test. . . . . . . . . . . . . . . . . . 21
3.7 Adjustment to Actual Contribution Percentage Test. . . . . . . . . . . 23
3.8 Transfers From Qualified Plans. . . . . . . . . . . . . . . . . . . . .24
ARTICLE IV
ACCOUNTS AND ALLOCATIONS
4.1 Allocations of Company Contributions. . . . . . . . . . . . . . . . . .25
4.2 Maximum Annual Additions. . . . . . . . . . . . . . . . . . . . . . . .27
4.3 Adjustment for Excessive Annual Additions. . . . . . . . . . . . . . . 28
4.4 Investment of Accounts. . . . . . . . . . . . . . . . . . . . . . . . .29
4.5 Adjustment of Accounts. . . . . . . . . . . . . . . . . . . . . . . . .30
4.6 Valuation of Trust Assets. . . . . . . . . . . . . . . . . . . . . . . 30
4.7 Reports to Participants. . . . . . . . . . . . . . . . . . . . . . . . 30
4.8 Allocation of Income, Loss, Appreciation or Depreciation. . . . . . . .30
ARTICLE V
VESTING
5.1 Immediate Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.2 Vesting Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.3 Restoration of Account Balances. . . . . . . . . . . . . . . . . . . . 33
5.4 Distributions to Partially-Vested Participants. . . . . . . . . . . . .34
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 Distribution Upon Termination of Employment. . . . . . . . . . . . . . 34
6.2 Distribution Upon Death. . . . . . . . . . . . . . . . . . . . . . . . 36
6.3 Manner of Distribution. . . . . . . . . . . . . . . . . . . . . . . . .37
6.4 General Limitations on Time of Payment of Benefits. . . . . . . . . . .38
6.5 Hardship Distribution - Elective Contribution Account. . . . . . . . . 39
6.6 Hardship Distribution - Other Accounts. . . . . . . . . . . . . . . . .40
6.7 Pre-Retirement Distributions. . . . . . . . . . . . . . . . . . . . . .41
6.8 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.9 Qualified Domestic Relations Order Distribution. . . . . . . . . . . . 43
6.10 Direct Rollover. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.11 Segregation of Account. . . . . . . . . . . . . . . . . . . . . . . . .45
6.12 Distribution for Minor Beneficiary. . . . . . . . . . . . . . . . . . .45
6.13 Location of Participant or Beneficiary Unknown. . . . . . . . . . . . .45
ARTICLE VII
AMENDMENT, TERMINATION AND MERGERS
7.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.2 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.3 Merger or Consolidation. . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
ADMINISTRATION
8.1 Establishment of Advisory Committee. . . . . . . . . . . . . . . . . . 46
8.2 Appointment of Investment Manager. . . . . . . . . . . . . . . . . . . 47
8.3 Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.4 Committee Procedures. . . . . . . . . . . . . . . . . . . . . . . . . .48
8.5 Plan Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.6 Claims Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.7 Claims Review Procedure. . . . . . . . . . . . . . . . . . . . . . . . 49
8.8 Bonding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.9 Compensation and Expenses. . . . . . . . . . . . . . . . . . . . . . . 50
8.10 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX
TRUSTEE
9.1 Acceptance of the Trust. . . . . . . . . . . . . . . . . . . . . . . . 50
9.2 Receipt of Contributions. . . . . . . . . . . . . . . . . . . . . . . .51
9.3 Investment Powers and Duties of the Trustee. . . . . . . . . . . . . . 51
9.4 Investment in Group Trust Fund. . . . . . . . . . . . . . . . . . . . .53
9.5 Duties of the Trustee Regarding Payments. . . . . . . . . . . . . . . .53
9.6 Trustee's Compensation and Expenses and Taxes. . . . . . . . . . . . . 53
9.7 Records and Statements. . . . . . . . . . . . . . . . . . . . . . . . .53
9.8 Resignation, Removal and Successor of Trustee. . . . . . . . . . . . . 54
9.9 Employer Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.10 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE X
TOP HEAVY PLAN PROVISIONS
10.1 Top Heavy Plan Requirements. . . . . . . . . . . . . . . . . . . . . .54
10.2 Top Heavy Definitions. . . . . . . . . . . . . . . . . . . . . . . . .55
10.3 Minimum Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.4 Top-Heavy Vesting Requirements. . . . . . . . . . . . . . . . . . . . 57
ARTICLE XI
MISCELLANEOUS
11.1 Prohibition Against Assignment and Alienation. . . . . . . . . . . . .58
11.2 Company-Employee Relationships. . . . . . . . . . . . . . . . . . . . 58
11.3 Notices to Interested Parties. . . . . . . . . . . . . . . . . . . . .59
11.4 Internal Revenue Service Approval. . . . . . . . . . . . . . . . . . .59
11.5 Liability for Payments. . . . . . . . . . . . . . . . . . . . . . . . 59
11.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
11.7 Prohibition Against Diversion of Funds. . . . . . . . . . . . . . . . 59
ARTICLE XII
PARTICIPATING COMPANIES
12.1 Adoption by Other Companies. . . . . . . . . . . . . . . . . . . . . .60
12.2 Requirements of Participating Companies. . . . . . . . . . . . . . . .60
12.3 Designation of Agent. . . . . . . . . . . . . . . . . . . . . . . . . 60
12.4 Participating Company's Contribution. . . . . . . . . . . . . . . . . 60
12.5 Participating Company Contribution For Affiliate. . . . . . . . . . . 61
12.6 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
12.7 Discontinuance of Participation. . . . . . . . . . . . . . . . . . . .61
12.8 Committee's Authority. . . . . . . . . . . . . . . . . . . . . . . . .61
ARTICLE XIII
CHANGE OF CONTROL
13.1 Definition of "Change of Control of DST". . . . . . . . . . . . . . . 62
13.2 Provisions Effective Upon Change of Control of DST. . . . . . . . . . 62
13.3 Right to Amend Article XIII Prior to Change of Control of DST. . . . .63
<PAGE>
DST SYSTEMS, INC.
401(k) PROFIT SHARING PLAN
THIS PLAN OF AGREEMENT is hereby entered into this _______day of
________________, 1999, by and between DST SYSTEMS, INC. ("DST"), a Delaware
corporation, and UMB BANK, N.A.
WITNESSETH:
WHEREAS, DST heretofore established a 401(k) plan known as the DST Systems,
Inc. 401(k) Plan (the "401(k) Plan"), which Plan was originally effective
January 1, 1990;
WHEREAS, DST heretofore established a profit sharing plan known as the DST
Systems, Inc. Profit Sharing Plan (the "Profit Sharing Plan"), which Plan was
originally effective January 1, 1970 (and which together with the 401(k) Plan
is collectively referred to herein as the "Plans");
WHEREAS, DST, pursuant to Sections 11.02 and 11.05 of the Plans, reserved
to itself the power to amend the Plans and/or to transfer the assets and
liabilities of the Plans to another qualified retirement plan; provided that
the Trustee's consent shall be required with regard to any amendment which
affects the rights, duties and responsibilities of the Trustee;
WHEREAS, in December 1998, DST acquired all of the stock of USCS
International, Inc. ("USCS");
WHEREAS, USCS sponsors a qualified retirement plan, namely the USCS
International, Inc. 401(k) Retirement Plan (the "USCS Plan"), which plan was
originally effective July 1, 1991; and
WHEREAS, USCS, pursuant to Section 17 of the USCS Plan, reserved to
itself the power to amend the Plan.
NOW, THEREFORE, effective January 1, 2000, except as otherwise set forth
herein, DST hereby merges the DST Systems, Inc. Profit Sharing Plan into the
DST Systems, Inc. 401(k) Plan, and amends and restates such Plans as the DST
Systems, Inc. 401(k) Profit Sharing Plan, as set forth herein; and
FURTHER, DST and USCS hereby amend and restate the USCS International, Inc.
401(k) Retirement Plan and merge such Plan into this DST Systems, Inc. 401(k)
Profit Sharing Plan, on the terms and conditions set forth herein, provided,
however, that such merger shall be subject to and effective on a determination
by the President of DST that such merger will not adversely affect the
qualification of the DST Systems, Inc. 401(k) Profit Sharing Plan.
ARTICLE I
DEFINITIONS
1.1 "ACCOUNT" means the Accounts established and maintained by the
Committee for each Participant with respect to his or her total interest in
the Plan and Trust. Each Participant shall have the following seven (7)
separate Accounts, if applicable, consisting of the amounts described below,
plus income and gains and less expenses and losses attributable thereto, and
reduced by any distributions therefrom. Other accounts for each Participant
may be established and maintained, as advisable or when required by law or
regulations.
(a) An "ELECTIVE CONTRIBUTION ACCOUNT" to which shall be credited
Elective Contributions as defined in Section 1.15 herein and also such
contributions previously made to the DST Systems, Inc. 401(k) Plan and the
USCS International, Inc. 401(k) Retirement Plan, when and to the extent such
contributions are transferred to this Plan. If necessary, a Participant's
"Elective Contribution Account" shall consist of a "DST Elective Contribution
Subaccount" to hold Elective Contributions made to this Plan and the DST
Systems, Inc. 401(k) Plan and a "USCS Elective Contribution Subaccount" to
hold Elective Contributions previously made to the USCS International, Inc.
401(k) Retirement Plan.
(b) A "MATCHING CONTRIBUTION ACCOUNT" to which shall be credited
Matching Contributions as defined in Section 1.33 herein and also such
contributions previously made to the USCS International, Inc. 401(k)
Retirement Plan, when and to the extent such contributions are transferred to
this Plan. If necessary, a Participant's "Matching Contribution Account"
shall consist of a "DST Matching Contribution Subaccount" to hold Matching
Contributions made to this Plan and a "USCS Matching Contribution Subaccount"
to hold Matching Contributions previously made to the USCS International,
Inc. 401(k) Retirement Plan.
(c) A "NON-ELECTIVE CONTRIBUTION ACCOUNT" to which shall be credited:
(1) Non-Elective Contributions as defined in Section 1.34 herein, (2) non-
elective contributions previously made to the DST Systems, Inc. Profit
Sharing Plan, (3) employer contributions previously made to the DST Systems,
Inc. Thrift Plan and Trust, to the extent such contributions were transferred
to the DST Systems, Inc. Profit Sharing Plan; and (4) non-elective
contributions previously made to the USCS International, Inc. 401(k)
Retirement Plan, when and to the extent such contributions are transferred to
this Plan. If necessary, a Participant's "Non-Elective Contribution Account"
shall consist of a "DST Non-Elective Contribution Subaccount" to hold Non-
Elective Contributions made to this Plan or to the DST Systems, Inc. Profit
Sharing Plan, a "Thrift Plan Non-Elective Contributions Subaccount" to hold
employer contributions previously made to the DST Systems, Inc. Thrift Plan
and Trust, and a "USCS Non-Elective Contributions Subaccount" to hold Non-
Elective Contributions previously made to the USCS International, Inc. 401(k)
Retirement Plan.
(d) A "ROLLOVER CONTRIBUTION ACCOUNT" to which shall be credited
Rollover Contributions made to this Plan pursuant to Section 3.8 and also
rollover contributions previously made to the DST Systems, Inc. 401(k) Plan,
the DST Systems, Inc. Profit Sharing Plan or the USCS International, Inc.
401(k) Retirement Plan, to the extent such contributions are transferred to
this Plan. If necessary, a Participant's "Rollover Contribution Account"
shall consist of a "DST Rollover Contribution Subaccount" to hold Rollover
Contributions made to this Plan, a "DST 401(k) Rollover Contribution
Subaccount" to hold Rollover Contributions made to the DST Systems, Inc.
401(k) Plan, a "DST Profit Sharing Rollover Contribution Subaccount" to hold
Rollover Contributions made to the DST Systems, Inc. Profit Sharing Plan, and
a "USCS Rollover Contribution Subaccount" to hold Rollover Contributions
previously made to the USCS International, Inc. 401(k) Retirement Plan.
(e) An "ESOP DIVERSIFICATION ACCOUNT" to which shall be credited
contributions originally made to the USCS International, Inc. Employee Stock
Ownership Plan and subsequently transferred to the USCS International, Inc.
401(k) Retirement Plan as part of the Participant's diversification election
pursuant to Code Section 401(a)(28)(B), when and to the extent such
contributions are transferred to this Plan.
(f) A "QVEC CONTRIBUTION ACCOUNT" to which shall be credited
deductible employee contributions made to the DST Systems, Inc. Profit
Sharing Plan and Trust for taxable years beginning prior to January 1, 1987.
(g) An "AFTER-TAX Contribution Account" to which shall be credited
after-tax contributions made to the DST Systems, Inc. Thrift Plan and Trust
and nondeductible voluntary contributions made to the Vantage Computer
Systems Savings Investment Plan as in effect on December 31, 1987, all of
which were previously transferred to the DST Systems, Inc. Profit Sharing
Plan and Trust. If necessary, a Participant's "After-Tax Contribution
Account" shall consist of a "Thrift Plan Subaccount" and a "Vantage Plan
Subaccount."
1.2 "ACT" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.3 "AFFILIATED COMPANY" shall mean any trade or business, whether or
not incorporated, which is a member of a controlled group of corporations,
trades or businesses of which the Company is a member. For purposes hereof the
principles contained in Sections 414(b) and 414(c) of the Code shall be applied
in determining membership of the controlled group. "Affiliated Company" shall
also include any organization, whether or not incorporated, which is a member
of an affiliated service group (as defined in Code Section 414(m)) which
includes the Company and any other entity required to be aggregated with the
Company under regulations issued under Code Section 414(o).
1.4 "BENEFICIARY" means a person to whom all or a portion of a deceased
Participant's Account is payable, as determined in Section 6.2.
1.5 "BREAK IN SERVICE" shall mean a Plan Year during which the Employee
does not complete more than 500 Hours of Service. If an Employee is absent
from work for any period (a) by reason of the pregnancy of the Employee, (b) by
reason of the birth of a child of the Employee, (c) by reason of the placement
of a child in connection with the adoption of the child by the Employee, or (d)
for purposes of caring for the child during the period immediately following
the birth or placement for adoption, such Employee shall be credited with up to
501 Hours of Service for the Plan Year in which the absence began solely for
the purpose of preventing such individual from incurring a Break in Service for
such period, or if not necessary for preventing a Break in Service for that
period, then for the following Plan Year. The Hours of Service credited for a
maternity or paternity leave of absence shall be those which would normally
have been credited but for such absence or, in any case in which the Committee
is unable to determine such hours normally credited, eight (8) hours of service
per day.
1.6 "CODE" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.7 "COMMITTEE" means the Administrative Committee provided for in
Section 8.1 herein.
1.8 "COMPANY" means DST Systems, Inc., a Delaware corporation, any
predecessor which has maintained this Plan, any successor which shall maintain
this Plan, any Affiliated Company which shall adopt this Plan, and any other
entity which adopts this Plan pursuant to Section 12.1.
1.9 "COMPANY STOCK" means shares of common stock of DST Systems, Inc.,
par value $0.01.
1.10 "COMPENSATION" with respect to any Participant means the total
salary, commissions, earnings or wages paid during any Plan Year for the
performance of duties for the Company to the extent includible in gross
income, including, but not limited to, payment for overtime and bonuses, and
including any amounts contributed by the Company pursuant to a salary
reduction agreement which are not includible in gross income under Code
Sections 125, 402(e)(3) or 402(h)(1)(B). A compensation payment includes
Compensation paid by the Company to an Employee through another person under
the common paymaster provisions of Code Sections 3121 and 3306(p).
"Compensation" shall not, however, include (even if includible in gross
income): (a) reimbursements of business or personal expenses, fringe benefits
(cash and noncash), parking and transportation allowances, moving expenses,
insurance premiums, deferred compensation, welfare benefits, expenses
allowances, or amounts allocated to an Employee's account from contributions to
any welfare or other retirement or deferred compensation plan; (b) Company
contributions under a simplified employee pension plan to the extent such
contributions are deductible by the Employee or any distributions from a plan
of deferred compensation; (c) amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (d) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and (e)
other amounts which receive special tax benefits, such as premiums for group
term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee), or contributions made by the
Company (whether or not under a salary reduction agreement) towards the
purchase of an annuity described in Section 403(b) of the Code (whether or not
the amounts are actually excludable from the gross income of the Employee).
Compensation in excess of the annual compensation limit in effect for the
Plan Year under Code Section 401(a)(17) shall be disregarded under the Plan.
For the Plan Year beginning January 1, 1997, the annual compensation limit is
$160,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with Code Section 401(a)(17)(B). The adjusted annual
compensation limit in effect for a calendar year shall be effective for the
Plan Year beginning in such calendar year.
Only Compensation paid to an Employee while the Employee is a Participant
in the Plan shall be recognized for Plan purposes.
1.11 "DATE OF EMPLOYMENT" means the first day on which an Employee
completes an Hour of Service with the Company or an Affiliated Company.
However, if an Employee incurs a Termination of Employment and as a result
incurs a Break in Service, an Employee's Date of Employment shall be the first
date thereafter on which the Employee completes an Hour of Service. For
purposes of Section 1.43 only, if an Employee incurs a Period of Severance of
more than twelve (12) months, his Date of Employment shall be the first date
thereafter on which the Employee completes an Hour of Service.
1.12 "DEFERRED COMPENSATION" with respect to any Participant means that
portion of the Participant's Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
3.3, excluding any such amounts distributed as excess "annual additions"
pursuant to Section 4.3.
1.13 "DISABILITY" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Committee considers will be of long continued
duration. The Committee may require the Participant to submit to a physical
examination in order to confirm disability. The Committee will apply the
provisions of this section in a nondiscriminatory, consistent and uniform
manner.
1.14 "EFFECTIVE DATE" means January 1, 2000, the effective date of the
Plan as amended and restated herein.
1.15 "ELECTIVE CONTRIBUTION" means the Company's contributions to the
Plan of Deferred Compensation, excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.3. In addition, any Company Qualified
Non-Elective Contribution made pursuant to Section 3.1(a)(4) and Section 3.5
and which is so designated by the Company shall be considered an Elective
Contribution for purposes of the Plan. Such Qualified Non-Elective
Contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 3.3(b) and 3.3(c), and shall be required to satisfy
the discrimination requirements of Code Section 401(k)(3), the provisions of
which are specifically incorporated herein by reference.
1.16 "ELIGIBILITY COMPUTATION PERIOD" for each Employee shall mean a 12-
consecutive month period beginning on the Employee's Date of Employment and, if
an Employee is not credited with 1,000 Hours of Service during such 12-month
period, the Plan Year within which is included the first anniversary of the
Employee's Date of Employment and each Plan Year thereafter. In the case of
any Employee who incurs a Termination of Employment and as a result suffers a
Break in Service, the Eligibility Computation Period shall be determined
beginning on the Employee's Date of Employment after such Break in Service.
1.17 "ELIGIBLE EMPLOYEE" means any Employee other than: (a) any
Employee whose employment is governed by the terms of a collective bargaining
agreement between employee representatives (within the meaning of Code Section
7701(a)(46)) and the Company under which retirement benefits were the subject
of good faith bargaining between the parties, unless such agreement expressly
provides for coverage in this Plan; (b) any Employee represented by a
collective bargaining representative after the Company has negotiated in good
faith to impasse with the representative on the question of the discontinuance
of coverage; (c) Leased Employees; (d) Employees of an Affiliated Company
unless such Affiliated Company has adopted this Plan in writing pursuant to
Article XII; (e) Employees who are nonresident aliens (within the meaning of
Code Section 7701(b)(1)(B)) and who receive no earned income (within the
meaning of Code Section 911(d)(2)) from the Company which constitutes income
from sources within the United States (within the meaning of Code Section
861(a)(3)); and (f) workers who are classified by the Company as independent
contractors, including those workers who are paid, directly or indirectly,
through the Company's accounts payable system, or leased employees, even if
such workers are later determined to be Employees.
1.18 "EMPLOYEE" means any common law employee of the Company or
Affiliated Company, but shall not include persons engaged as independent
contractors. Notwithstanding the foregoing, the term "Employee" shall include
Leased Employees unless such Leased Employees are covered by a plan described
in Code Section 414(n)(5) and such Leased Employees do not constitute more than
20% of the Company and its Affiliated Companies' non-highly compensated work
force.
1.19 "EXCESS AGGREGATE CONTRIBUTIONS" means, with respect to a Plan
Year, the excess of the aggregate amount of Matching Contributions made
pursuant to Section 3.1(a)(2) (to the extent such contributions are not used to
satisfy the "Actual Deferral Percentage" test) and any Qualified Non-Elective
contributions or elective deferrals taken into account pursuant to Section
3.7(b) on behalf of Highly Compensated Employees for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
3.6(a).
1.20 "EXCESS CONTRIBUTIONS" means the excess of Elective Contributions
made on behalf of Highly Compensated Employees for the Plan Year over the
maximum amount of such contributions permitted under Section 3.4(a). Excess
Contributions shall be treated as an "annual addition" pursuant to Section
4.2(b).
1.21 "EXCESS DEFERRED COMPENSATION" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 3.3(f)
actually made on behalf of such Participant for such taxable year, over $9,500
as adjusted for cost-of-living as provided in the Code, which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an
"annual addition" pursuant to Section 4.2(b).
1.22 "FISCAL YEAR" means the Company's accounting year of 12 months
commencing on January 1 of each year and ending the following December 31.
1.23 "FORFEITURE" means that portion of a Participant's Account that is
not vested, and occurs on the earlier of:
(a) the last day of the Plan Year in which the Participant incurs five
(5) consecutive Breaks in Service; or
(b) the date the Participant receives a distribution of the entire
vested portion of his or her Account.
In addition, the term "Forfeiture" shall also include amounts deemed to be
Forfeitures pursuant to any other provision of this Plan.
1.24 "FORMER PARTICIPANT" means any person who has been a Participant,
but who has ceased to be a Participant under Article II for any reason.
1.25 "415 COMPENSATION" means the Employee's wages, salaries, fees for
professional services and other amounts received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Company to the extent the amounts are includible
in gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips and bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Treasury
Regulation Section 1.62-2(c)) paid during the "limitation year". Effective for
Plan Years beginning after December 31, 1997, "415 Compensation" shall include
contributions by the Company pursuant to a salary reduction agreement which are
not includible in gross income under Code Sections 125, 402(a)(8) or
402(h)(1)(B).
"415 Compensation" shall exclude: (a) contributions made by the Company to
a plan of deferred compensation to the extent that the contributions are not
includible in the gross income of the Employee for the taxable year in which
contributed, (b) Company contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, (c) any
distributions from a plan of deferred compensation; (d) amounts realized from
the exercise of a nonqualified stock option or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture; (e) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (f) other amounts which receive special tax benefits, or
contributions made by the Company (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are excludable from the gross
income of the Employee).
1.26 "HIGHLY COMPENSATED EMPLOYEE" means, for Plan Years beginning after
December 31, 1996, an Employee described in Code Section 414(q) and the
regulations thereunder, and generally means an Employee who performed services
for the Company during the "determination year" and who: (a) at any time
during the "determination year" or "look-back year" was a "5% owner" of the
Company; or (b) received Compensation during the "look-back year" from the
Company in excess of $80,000 (as adjusted after December 31, 1996 for increases
in the cost-of-living pursuant to Code Section 414(q)(1)). The determination
year shall be the Plan Year for which testing is being performed, and the
"look-back year" shall be the immediately preceding twelve-month period. For
purposes of this Section 1.26, a "5% owner" is any person who owns (or is
considered as owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock possessing
more than five percent (5%) of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in the
Employer.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Company constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Companies shall be taken into account
as a single Company and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are
not covered in any qualified plan maintained by the Company. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Company's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.27 "HIGHLY COMPENSATED FORMER EMPLOYEE" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. For purposes of this Section,
"determination year" shall be determined in accordance with Section 1.26.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q) definition
is applicable.
1.28 "HIGHLY COMPENSATED PARTICIPANT" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.29 "HOUR OF SERVICE" means each hour during an applicable computation
period for which an Employee is directly or indirectly paid or entitled to
payment by the Company or an Affiliated Company for the performance of duties
or for reasons other than the performance of duties, including but not limited
to, any Leave of Absence with pay. Such Hours of Service shall be credited to
the Employee for the computation period in which such duties were performed or
in which occurred the period during which no duties were performed. An Hour of
Service also includes each hour, not credited above, for which backpay,
irrespective of mitigation of damages, has been either awarded or agreed to by
the Company or an Affiliated Company. These Hours of Service shall be credited
to the Employee for the computation period to which the award or agreement
pertains rather than the computation period in which the award, agreement or
payment is made. In determining an Employee's total Hours of Service during a
computation period, a fraction of an hour shall be deemed a full Hour of
Service.
The Company will credit Employees with Hours of Service on the basis of
"actual" hours worked or for which the Employee is entitled to payment;
provided, however, that, effective for the Plan Year beginning January 1, 1999
and for all Plan Years thereafter, any Employee who is compensated on a
salaried basis shall be credited with 95 Hours of Service for each semi-monthly
period in which such Employee would be credited with at least one (1) Hour of
Service under the above rules.
The number of Hours of Service to be credited to an Employee for any
computation period shall be governed by Section 2530.200b-2(b) and (c) of the
Labor Department Regulations relating to the Act. Notwithstanding any
provision of this Plan to the contrary, effective December 12, 1994,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.
Hours of Service shall also be credited for all purposes under the Plan in
accordance with the following:
(a) Employees shall be credited with Hours of Service with any Company
or any Affiliated Company after the time such Company became a Company or an
Affiliated Company;
(b) Employees shall be credited with an Hour of Service for each Hour of
Service credited to them under the USCS International, Inc. 401(k) Retirement
Plan prior to January 1, 2000; and
(c) Employees shall be credited with Hours of Service with any
corporation, partnership, joint venture, or other business entity, 25% or more
of the interests of which are owned directly or indirectly by DST or any
Affiliated Company, after the date such entity first became 25% or more owned
directly or indirectly by DST or any Affiliated Company.
1.30 "INCOME" means the income allocable to "excess amounts" which shall
equal the sum of the allocable gain or loss for the "applicable computation
period" and the allocable gain or loss for the period between the end of the
"applicable computation period" and the date of distribution ("gap period").
The income allocable to "excess amounts" for the "applicable computation
period" and the "gap period" is calculated separately and is determined by
multiplying the income for the "applicable computation period" or the "gap
period" by a fraction. The numerator of the fraction is the "excess amount"
for the "applicable computation period." The denominator of the fraction is
the total "account balance" attributable to "Company contributions" as of the
end of the "applicable computation period" or the "gap period," reduced by the
gain allocable to such total amount for the "applicable computation period" or
the "gap period" and increased by the loss allocable to such total amount for
the "applicable computation period" or the "gap period."
The provisions of this Section shall be applied: (a) for purposes of
Section 3.3(f), by substituting "Excess Deferred Compensation" for "excess
amounts," "taxable year of the Participant" for "applicable computation
period," "Deferred Compensation" for "Company contributions," and
"Participant's Account" for "account balance"; (b) for purposes of Section
3.5(a), by substituting "Excess Contributions" for "excess amounts," "Plan
Year" for "applicable computation period," "Elective Contributions" for
"Company contributions," and "Participant's Account" for "account balance"; and
(c) for purposes of Section 3.7(a), by substituting "Excess Aggregate
Contributions" for "excess amounts," "Plan Year" for "applicable computation
period," "Matching Contributions (to the extent such matching contributions are
not used to satisfy the "Actual Deferral Percentage" test), and any Qualified
Non-elective Contributions or elective deferrals taken into account pursuant to
Section 3.7(b) on behalf of Highly Compensated Employees for such Plan Year"
for "Company contributions," and "Participant's Account" for "account balance".
Income allocable to any distribution of Excess Deferred Compensation on or
before the last day of the taxable year of the Participant shall be calculated
from the first day of the taxable year of the Participant to the date on which
the distribution is made.
1.31 "LEASED EMPLOYEE", for Plan Years beginning after December 31,
1996, means any person (other than a common law employee of the Company or
Affiliated Company) who pursuant to an agreement between the Company or
Affiliated Company and any other person ("leasing organization") has performed
services for the Company or Affiliated Company on a substantially full-time
basis for a period of at least one year, and such services are performed under
the primary direction or control by the Company or Affiliated Company.
Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the Company or
Affiliated Company shall be treated as provided by the Company or Affiliated
Company. A Leased Employee shall not be considered an Employee of the Company
or Affiliated Company if:
(a) such individual is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least 10% of
compensation, as defined in Code Section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement and which are not
includible in the gross income of the individual under Code Sections 125,
402(e)(3), 402(h), 403(b) or 457, and individual contributions described
in Code Section 414(h)(2) that are treated as employer contributions;
(2) immediate participation; and
(3) full and immediate vesting; and
(b) Leased Employees do not constitute more than 20% of the Company and
Affiliated Company's non-highly compensated work force.
1.32 "LEAVE OF ABSENCE" means any absence authorized by the Company or
an Affiliated Company, whether it be for medical, military, emergency or any
other purpose as determined in accordance with approved Company or Affiliated
Company policies.
1.33 "MATCHING CONTRIBUTION" means any contribution made by the Company
pursuant to Section 3.1(a)(2).
1.34 "NON-ELECTIVE CONTRIBUTION" means the Company contributions to the
Plan other than Elective Contributions and Matching Contributions, and any
Qualified Non-Elective Contribution used in the "Actual Deferral Percentage"
test.
1.35 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who is
not a Highly Compensated Employee.
1.36 "NORMAL RETIREMENT AGE" means age 59 1/2.
1.37 "PARTICIPANT" shall mean an Eligible Employee who is and continues
to be eligible to participate in this Plan under the terms of Article II
hereof.
1.38 "PLAN" means the DST Systems, Inc. 401(k) Profit Sharing Plan as
herein set forth, as may be amended from time to time.
1.39 "PLAN YEAR" means the Plan's accounting year of twelve (12) months
commencing on January 1 of each year and ending the following December 31.
1.40 "QUALIFIED NON-ELECTIVE CONTRIBUTION" means the Company's
nonelective contributions to the Plan that are made pursuant to Section
3.1(a)(4). Such contributions shall be fully vested at all times and shall be
subject to the distribution restrictions described in Section 3.3(c). All or
part of such contributions may be designated by the Committee as Company
Elective Contributions for purposes of satisfying the "Actual Deferral
Percentage" test set forth in Section 3.4 or the "Actual Contribution
Percentage" test set forth in Section 3.6.
1.41 "TERMINATION OF EMPLOYMENT" means an Employee ceasing to be
actively employed by the Company or an Affiliated Company; provided, however, a
"Termination of Employment" shall not include the Participant's change of
employment between the Company and an Affiliated Company or between Affiliated
Companies, or a Leave of Absence unless the Participant fails to complete an
Hour of Service immediately after the expiration of such Leave of Absence. In
addition, "Termination of Employment" shall not include a Participant's change
of employment between the Company and any other any corporation, partnership,
joint venture, or other business entity 25% or more of the interests of which
are owned directly or indirectly by DST or any Affiliated Company. If an
Employee suffers a Disability, he or she shall be considered to have a
Termination of Employment on the first anniversary of the date such Employee
was determined by the Committee to be Disabled; provided, however, that if,
prior to such first anniversary, the Employee voluntary terminates his or her
employment with the Company, the Employee shall be considered to have a
Termination of Employment as of such date.
1.42 "TOP HEAVY PLAN," "Top Heavy Plan Year," "Super Top Heavy Plan" and
certain other definitions relating to top heavy plans as defined in Section 416
of the Code are contained in Article X hereof.
1.43 "TRANSITION YEAR OF SERVICE" means a one-year "Period of
Service." For this purpose, a "Period of Service" means the period beginning
on the Employee's Date of Employment and ending on the date a "Period of
Severance" begins. Fractional periods of a year will be expressed in months.
"Period of Severance" is a continuous period of time during which the
Employee is not employed by the Employer. A Period of Severance begins on
the date the Employee retires, quits or is discharged, or dies, or if
earlier, the twelve-month anniversary of the date on which the Employee was
first absent from work for any other reason; provided that if an Employee is
absent from work for any other reason and retires, quits or is discharged, or
dies within twelve (12) months, the Period of Severance begins on the day the
Employee retires, quits or is discharged, or dies. The Employee will receive
credit for any Period of Severance of less than twelve (12) consecutive
months. This Section 1.43 applies only to Eligible Employees hired by USCS
International, Inc., DST Innovis, Inc. (formerly CableData, Inc.) or Output
Technology Solutions of California, Inc. (formerly International Billing
Services, Inc.) on or before December 31, 1999 and classified as a temporary or
seasonal employees.
1.44 "TRUST" shall mean either or both of (a) the separate trust fund
created under Article IX of this Plan and (b) the Separate Plan Account (as
defined in the Master Trust) for this Plan under the DST Systems, Inc. Master
Trust created by the Master Trust Agreement between DST Systems, Inc. and UMB
Bank, N.A., as Trustee of the Master Trust effective as of January 1, 1998 (the
"Master Trust"), and any amendments thereto or successor or supplemental
agreements.
1.45 "TRUST FUND" means all property of every kind held or acquired by
the Trustee of the Separate Trust under this Agreement or by the Trustee of the
Master Trust under the Master Trust Agreement, other than incidental benefit
insurance contracts. This Plan, together with the Master Trust, creates two
separate trusts for purposes of the Plan, each of which applies to all
Companies participating under the Plan. The Trustee may combine the respective
Separate Trusts created under the Plans of all Companies participating under
this Plan into one (1) Trust Fund or one (1) Separate Trust. However, the
Trustee shall maintain separate records of account in order to properly reflect
each Participant's Account under the plan(s) in which he or she is a
Participant.
1.46 "TRUSTEE" with respect to the Separate Trust means UMB Bank, N.A.,
or any successor in office who in writing accepts the position of Trustee under
this Plan and the Separate Trust; and, with respect to the Master Trust, means
UMB Bank, N.A., or any successor in office who in writing accepts the position
of Trustee under the Master Trust. Unless otherwise specified in this Plan,
references to "Trustee" include either or both of the Trustee under the
Separate Trust and the Trustee under the Master Trust.
1.47 "VALUATION DATE" means the date as of which the Trust Fund is
valued and the Accounts maintained on behalf of each Participant or Beneficiary
is adjusted as provided hereunder. The Trust Fund shall be valued on the last
day of each Plan Year and on such additional dates as the Committee shall deem
appropriate.
1.48 "YEAR OF SERVICE" for eligibility purposes means an Eligibility
Computation Period during which an Employee is credited with at least 1,000
Hours of Service. "Year of Service" for all other Plan purposes is a Plan Year
during which an Employee is credited with at least 1,000 Hours of Service.
For purposes of vesting under this Plan, Participants shall be credited
with a Year of Service for each Year of Service credited to them under the USCS
International, Inc. 401(k) Retirement Plan prior to January 1, 2000 and with a
Year of Service for each Year of Service credited to them under the United
Micrographic Systems, Inc. Profit Sharing Plan. In addition, a Participant who
was employed by Sun Micrographic Systems, Inc. and who completed 1,000 Hours of
Service during the calendar year 1989 and completed 1,000 Hours of Service
during the period November 1, 1988 through October 31, 1989 shall be credited
with two (2) Years of Service for vesting purposes.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 ELIGIBILITY
(a) Any Eligible Employee who was a Participant in the DST Systems, Inc.
401(k) Plan, the DST Systems, Inc. Profit Sharing Plan or the USCS
International, Inc. 401(k) Retirement Plan on the day immediately preceding the
Effective Date shall become a Participant in the Plan as of the Effective
Date. Each other Eligible Employee, other than an Eligible Employee classified
by the Company as a temporary or seasonal employee, shall become a Participant
in the Plan as of the first day of the calendar month next following his or her
Date of Employment, but only if such Eligible Employee is employed as an
Eligible Employee on the date the Eligible Employee would become a
Participant as provided in this sentence. Each Eligible Employee who is
classified by the Company as a temporary or seasonal employee shall become a
Participant in the Plan as of the first day of the calendar month next following
his or her completion of one (1) Year of Service, but only if such Eligible
Employee is employed as an Eligible Employee on the date the Eligible Employee
would become a Participant as provided in this sentence; provided, however,
that any Eligible Employee who is hired by USCS International, Inc., DST
Innovis, Inc. formerly CableData, Inc.) or Output Technology Solutions of
California, Inc. (formerly International Billing Services, Inc.) on or before
December 31, 1999 and is classified as a temporary or seasonal employee shall
be eligible to participate in the Plan upon completion of one (1) Transition
Year of Service.
(b) If an Eligible Employee is not employed as an Eligible Employee on
the date the Eligible Employee would otherwise become a Participant under
Section 2.1(a) above, such Eligible Employee shall become a Participant upon
the date of his reemployment as an Eligible Employee. A Participant who incurs
a Termination of Employment shall again become a Participant on the date of his
reemployment as an Eligible Employee.
2.2 CHANGE IN EMPLOYMENT STATUS
(a) In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Participant shall cease to be
a Participant hereunder as of such date and shall thereafter be treated as a
Former Participant. No contribution shall be made by or on behalf of a Former
Participant for the period the Former Participant is employed in an ineligible
class of Employees. The Former Participant shall continue to be credited with
Years of Service for vesting purposes and the Former Participant's interests in
the Plan shall continue to share in earnings as provided in Section 4.4 until
such time as the Former Participant is entitled to a distribution hereunder.
(b) An Employee who has a Termination of Employment with a Company and
thereafter resumes employment with a Company as an Eligible Employee shall
become a Participant in the Plan on the date he or she resumes employment as
an Eligible Employee; provided, however, that if the Employee had not satisfied
the eligibility requirements of Section 2.1 as of his or her Termination of
Employment, the Employee shall become a Participant in the Plan on the later of
the date he or she resumes employment as an Eligible Employee or the date the
Employee would otherwise become a Participant under Section 2.1.
(c) In the event an Employee's classification with a Company changes so
that the Employee becomes employed in the class of Eligible Employees, such
Eligible Employee shall become a Participant in the Plan as of the later of:
(1) the date the Employee's employment classification changed to that of an
Eligible Employee; or (2) if the Employee has not satisfied the service
requirements of Section 2.1 as of the date the Employee's classification
changed to that of an Eligible Employee, then as of the date the Eligible
Employee would otherwise become a Participant under Section 2.1.
2.3 TERMINATION OF ACTIVE PARTICIPATION
Active participation in the Plan shall terminate upon a Participant's
Termination of Employment or otherwise ceasing to be employed within a class of
Eligible Employees.
ARTICLE III
CONTRIBUTION AND ALLOCATION
3.1 FORMULA FOR DETERMINING COMPANY CONTRIBUTIONS
(a) (1) For each Plan Year, the Company shall contribute to the
Plan the total Deferred Compensation of all Participants made pursuant
to salary deferral elections under Section 3.3(a), which amount shall be
deemed a Company Elective Contribution.
(2) For each Plan Year, the Company shall contribute on behalf
of each Participant a Matching Contribution equal to 100% of each such
Participant's Deferred Compensation for each pay period; provided,
however, in applying the percentage above, only salary reductions up to
3% of Compensation for such pay period shall be considered.
(3) For each Plan Year, DST Systems, Inc. shall determine in
its sole discretion the amount, if any, of the Company's Non-Elective
Contribution. Such determination shall be binding upon each Company.
The Non-Elective Contribution shall be in an amount equal to the same
percentage of all Participants' Compensation eligible to share in an
allocation for the Plan Year.
(4) For each Plan Year, DST Systems, Inc. shall determine in
its sole discretion the amount, if any, of the Company's Qualified Non-
Elective Contribution to be made on behalf of each eligible Participant
or Non-Highly Compensated Participant, as determined by DST Systems,
Inc. The Qualified Non-Elective Contribution shall be in an amount
equal to the same percentage of all Participants' or Non-Highly
Compensated Participants' Compensation eligible to share in an allocation
for the Plan Year.
(b) Notwithstanding anything herein to the contrary, the Company's
contributions for any Plan Year shall not exceed the maximum amount allowable
as a deduction to the Company under the provisions of Code Section 404;
provided, however, to the extent necessary to provide the top heavy minimum
allocations, the Company shall make a contribution even if it exceeds the
amount which is deductible under Code Section 404.
(c) Notwithstanding any provision of this Plan to the contrary,
effective December 12, 1994, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with
Section 414(u) of the Code.
3.2 TIME OF PAYMENT OF COMPANY'S CONTRIBUTION
The Company shall generally pay to the Trustee its contribution to the Plan
for each Plan Year within the time prescribed by law, including extensions of
time, for the filing of the Company's federal income tax return for the Fiscal
Year. However, Company Elective Contributions accumulated through payroll
deferrals shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Company's general assets.
The provisions of Department of Labor Regulations Section 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Company
contributions which are allocable to the Participant's Elective Contribution
Account for a Plan Year shall be paid to the Plan no later than the
twelve-month period immediately following the close of such Plan Year.
3.3 PARTICIPANT'S SALARY DEFERRAL ELECTION
(a) Each Participant may elect to defer from one percent (1%) to fifteen
percent (15%) (in whole percentages) of his or her Compensation which would
have been received, but for the deferral election. Notwithstanding the
preceding sentence, the Committee in its discretion may establish a lower
percent of Compensation which may be deferred by Highly Compensated
Participants. The limitations on the percentages of Compensation which may be
deferred shall apply on a per payroll, paycheck or payment basis, as the case
may be, and not on a cumulative Plan Year basis. A deferral election (or
modification of an earlier election) may not be made with respect to
Compensation which is currently available on or before the date the Participant
made such election. The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as a Company Elective
Contribution and allocated to that Participant's Elective Contribution Account.
(b) A Participant shall be fully vested at all times in the balance from
time to time in his or her Elective Contribution Account.
(c) Except as provided in Section 6.7, amounts held in the Participant's
Elective Contribution Account may not be distributable earlier than:
(1) A Participant's Termination of Employment or death;
(2) To the extent permitted under Section 6.5, a Participant's
financial hardship;
(3) The termination of the Plan without the establishment or
existence of a "successor plan", as that term is described in Treasury
Regulation Section 1.401(k)-1(d)(3);
(4) The date of disposition by the Company to an entity that is not
an Affiliated Company of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used in a trade or business of such
corporation if such corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues employment with
the corporation acquiring such assets; or
(5) The date of disposition by the Company or an Affiliated Company
who maintains the Plan of its interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) to an entity which is not an
Affiliated Company but only with respect to a Participant who continues
employment with such subsidiary.
(d) A Participant's Deferred Compensation made under this Plan and all
other plans, contracts or arrangements of the Company maintaining this Plan or
its Affiliated Company shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as in effect at the
beginning of such taxable year. This dollar limitation shall be adjusted
annually pursuant to the method provided in Code Section 415(d) in accordance
with Treasury Regulations. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the Committee of such excess amount
which shall be distributed in a manner consistent with Section 3.3(f).
(e) In the event a Participant has received a hardship distribution from
his or her Account pursuant to Section 6.5 or pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the Company
or an Affiliated Company, then such Participant shall not be permitted to elect
to have Deferred Compensation contributed to the Plan on his or her behalf or
to make contributions to any other qualified or nonqualified plan, including
stock option and stock purchase plans, maintained by the Company or an
Affiliated Company, for a period of twelve (12) months following the receipt of
the distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this Plan (and any
other plan maintained by the Company or an Affiliated Company) for the taxable
year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Treasury Regulation Section
1.402(g)-1(b)) under another qualified cash or deferred arrangement (as defined
in Code Section 401(k)), a simplified employee pension (as defined in Code
Section 408(k)), a salary reduction arrangement (within the meaning of Code
Section 3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or
a trust described in Code Section 501(c)(18), cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in accordance
with the method provided in Code Section 415(d) pursuant to Treasury
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1 following the close of his or her taxable year, notify the
Committee in writing of such excess and request that his or her Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Committee may direct the Trustee to distribute
such excess amount (and any Income allocable to such excess amount) to the
Participant not later than the first April 15th following the close of the
Participant's taxable year. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation under the
Plan for the taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following conditions:
(1) The Participant shall designate the distribution as Excess
Deferred Compensation;
(2) The distribution must be made after the date on which the Plan
received the Excess Deferred Compensation; and
(3) The Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
(g) Notwithstanding Section 3.3(f) above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any distribution
of Excess Contributions pursuant to Section 3.5(a) for the Plan Year beginning
with or within the taxable year of the Participant.
(h) The Company and the Committee shall implement the salary deferral
elections provided for herein in accordance with the following:
(1) A Participant may commence making elective deferrals to the Plan
only after first satisfying the eligibility and participation
requirements specified in Article II. A Participant may elect to commence
making elective deferrals by making an election in the form and manner
prescribed by the Committee. Such election shall initially be effective
as soon as administratively practicable following the date such election
is received by the Committee or its delegate, shall not have retroactive
effect and shall remain in force until revoked as provided herein.
(2) A Participant may modify a prior election at any time and
concurrently make a new election in the form and manner prescribed by the
Committee. Any such modification and new election will be effective as
soon as administratively practicable following the date such modification
and new election are received by the Committee or its delegate. Any
modification or new election shall not have retroactive effect and shall
remain in force until revoked or modified as provided herein.
(3) A Participant may elect to prospectively revoke his or her
deferral election in the form and manner prescribed by the Committee.
Such revocation shall become effective as soon as administratively
practicable following the date such revocation is received by the
Committee or its delegate. Furthermore, a Participant's cessation of
Plan participation shall be deemed to revoke any deferral election then
in effect, effective following the close of the pay period within which
such cessation occurs.
3.4 ACTUAL DEFERRAL PERCENTAGE TEST
(a) Maximum Annual Allocation: For the Plan Year ending December 31,
1997 and for each Plan Year beginning after December 31, 1998, the annual
allocation derived from Company Elective Contributions to a Participant's
Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group for the Plan Year shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Participant group for
the preceding Plan Year multiplied by 1.25; or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group for the preceding Plan Year
shall not be more than two percentage points. Additionally, the "Actual
Deferral Percentage" for the Highly Compensated Participant group shall
not exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group for the preceding Plan Year multiplied by
2. The provisions of Code Section 401(k)(3) and Treasury Regulations
Section 1.401(k)-1(b) are incorporated herein by reference.
(3) For the Plan Year ending December 31, 1998, the annual
allocation derived from Company Elective Contributions to a Participant's
Account shall satisfy one of the following tests:
(i) The "Actual Deferral Percentage" for the Highly
Compensated Participant group for the Plan Year shall not be more
than the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group for such Plan Year multiplied by 1.25; or
(ii) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group for
such Plan Year shall not be more than two percentage points.
Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group for
such Plan Year multiplied by 2. The provisions of Code Section
401(k)(3) and Treasury Regulations Section 1.401(k)-1(b) are
incorporated herein by reference.
However, in order to prevent the multiple use of the alternative method
described in (2) and (3)(ii) above and in Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant to Section
3.3 and to receive matching contributions under this Plan or under any other
plan maintained by the Company or an Affiliated Company shall have his or her
actual contribution ratio reduced pursuant to Treasury Regulation Section
1.401(m)-2, the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage" means,
with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Company Elective Contributions allocated to each Participant's Elective
Contribution Account for such Plan Year, to such Participant's Compensation for
such Plan Year. The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent. Company Elective Contributions allocated to each
Non-Highly Compensated Participant's Elective Contribution Account shall be
reduced by Excess Deferred Compensation to the extent such excess amounts are
made under this Plan or any other plan maintained by the Company.
(c) For the purposes of Sections 3.4(a) and 3.5, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to Section 3.3, whether or not
such deferral election was made or suspended pursuant to Section 3.3.
(d) For the purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(k), if two or more plans which include cash or deferred arrangements
are considered one plan for the purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii) as in effect for Plan Years beginning
after December 31, 1988), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more cash or
deferred arrangements may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections 401(a)(4),
410(b) and 401(k). In such a case, the cash or deferred arrangements included
in such plans and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k). Plans may be aggregated under this paragraph (d)
only if they have the same Plan Year. Notwithstanding the above, an employee
stock ownership plan described in Code Section 4975(e)(7) or 409 may not be
combined with this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections 401(a)(4),
410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7)) of the Company or an
Affiliated Company, all such cash or deferred arrangements shall be treated
as one cash or deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant. If the
cash or deferred arrangements have different Plan Years, this paragraph shall
be applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
3.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TEST
In the event that the initial allocations of the Company's Elective
Contributions made pursuant to Section 4.1 do not satisfy one of the tests set
forth in Section 3.4(a), the Committee shall adjust Excess Contributions
pursuant to any or all of the options set forth below, at its sole discretion:
(a) On or before the fifteenth day of the third month following the end
of each Plan Year beginning after December 31, 1996, the Highly Compensated
Participant having the highest Elective Contributions shall have Excess
Contributions distributed to such Participant, until the dollar amount of his
or her Elective Contributions equals the dollar amount of Elective
Contributions of the Highly Compensated Participant having the second highest
Elective Contributions. This process shall continue until the entire Excess
Contributions amount is distributed. The amount of Excess Contributions is
determined by reducing the actual deferral ratio of the Highly Compensated
Employee with the highest actual deferral ratio until one of the tests set
forth in Section 3.4(a) is satisfied or until his actual deferral ratio equals
the actual deferral ratio of the Highly Compensated Employee having the second
highest actual deferral ratio. This process shall continue until one of the
tests in Section 3.4(a) is satisfied. The total amount of such reductions
shall be the Excess Contributions. However, in determining the amount of
Excess Contributions to be distributed with respect to an affected Highly
Compensated Participant as defined herein, such amount shall be reduced by any
Excess Deferred Compensation previously distributed to such affected Highly
Compensated Participant for his or her taxable year ending with or within such
Plan Year.
With respect to the distribution of Excess Contributions pursuant to the
preceding paragraph above, such distribution:
(1) May be postponed but not later than the close of the Plan Year
following the Plan Year to which they are allocable;
(2) Shall be made first from Deferred Compensation;
(3) Shall be made from Qualified Non-Elective Contributions only to
the extent that Excess Contributions exceed the balance in the
Participant's Elective Contribution Account attributable to Deferred
Compensation;
(4) Shall be adjusted for Income; and
(5) Shall be designated by the Committee as a distribution of Excess
Contributions (and Income).
Any distribution of less than the entire amount of Excess Contribution
shall be treated as a pro rata distribution of Excess Contributions and Income.
(b) Within twelve (12) months after the end of the Plan Year, the
Company may designate all or part of a Qualified Non-Elective Contribution made
pursuant to Section 3.1(a)(4) as an Elective Contribution to satisfy one of the
tests set forth in Section 3.4(a).
(c) If during a Plan Year the projected aggregate amount of Elective
Contributions to be allocated to all Highly Compensated Participants under
this Plan would, by virtue of the tests set forth in Section 3.4(a), cause
the Plan to fail such tests, then the Committee may automatically reduce
proportionately or in the order provided in Section 3.5(a) each affected
Highly Compensated Participant's deferral election made pursuant to Section
3.3 by an amount it determines necessary or appropriate to satisfy one of the
tests set forth in Section 3.4(a).
3.6 ACTUAL CONTRIBUTION PERCENTAGE TEST
(a) Maximum Annual Allocation: For the Plan Year ending December 31,
1997 and for each Plan Year beginning after December 31, 1998, the annual
allocation derived from Company Matching Contributions to a Participant's
Account shall satisfy one of the following tests:
(1) The "Actual Contribution Percentage" for the Highly Compensated
Participant group for the Plan Year shall not be more than the "Actual
Contribution Percentage" of the Non-Highly Compensated Participant group
for the preceding Plan Year multiplied by 1.25; or
(2) The excess of the "Actual Contribution Percentage" for the
Highly Compensated Participant group over the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group for the
preceding Plan Year shall not be more than two percentage points.
Additionally, the "Actual Contribution Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group for the
preceding Plan Year multiplied by 2. The provisions of Code Section
401(m) and Treasury Regulations Sections 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(3) For the Plan Year ending December 31, 1998, the annual
allocation derived from Company Matching Contributions to a Participant's
Account shall satisfy one of the following tests:
(i) The "Actual Contribution Percentage" for the Highly
Compensated Participant group for the Plan Year shall not be more
than the "Actual Contribution Percentage" of the Non-Highly
Compensated Participant group for such Plan Year multiplied by
1.25; or
(ii) The excess of the "Actual Contribution Percentage" for
the Highly Compensated Participant group over the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group for such Plan Year shall not be more than two percentage
points. Additionally, the "Actual Contribution Percentage" for the
Highly Compensated Participant group shall not exceed the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group for such Plan Year multiplied by 2. The provisions of Code
Section 401(m) and Treasury Regulations Sections 1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
However, in order to prevent the multiple use of the alternative method
described in (2) and (3)(ii) above and in Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals pursuant to Section
3.3 or to receive matching contributions under this Plan or under any other
plan maintained by the Company or an Affiliated Company shall have his or her
actual contribution ratio reduced pursuant to Treasury Regulation Section
1.401(m)-2, the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Contribution Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Company Matching Contributions allocated to each Participant's Matching
Contribution Account for such Plan Year, to such Participant's Compensation for
such Plan Year. The actual contribution ratio for each Participant and the
"Actual Contribution Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent.
(c) For the purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans to which matching contributions, Employee
contributions, or both, are made are treated as one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii) as
in effect for Plan Years beginning after December 31, 1988), such plans shall
be treated as one plan. In addition, two or more plans of the Company to which
matching contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case, the
aggregated plans must satisfy this Section and Code Sections 401(a)(4), 410(b)
and 401(m) as thought such aggregated plans were a single plan. Plans may be
aggregated under this paragraph (c) only if they have the same Plan Year.
Notwithstanding the above, an employee stock ownership plan described in Code
Section 4975(e)(7) or 409 may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan satisfies
this Section and Code Sections 401(a)(4), 410(b) and 401(m).
(d) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)) which are
maintained by the Company or an Affiliated Company to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated Participant's
actual contribution ratio. If the plans have different Plan Years, this
paragraph shall be applied by treating all plans ending with or within the same
calendar year as a single plan.
(e) For purposes of Sections 3.6 and 3.7, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any Employee
eligible to have Matching Contributions (whether or not a deferral election was
made or suspended pursuant to Section 3.3) allocated to his account for the
Plan Year.
3.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TEST
In the event that the initial allocations of the Company's Matching
Contributions made pursuant to Section 4.1 do not satisfy one of the tests set
forth in Section 3.6(a), the Committee shall adjust Excess Aggregate
Contributions pursuant to any or all of the options set forth below, at its
sole discretion:
(a) On or before the fifteenth day of the third month following the end
of each Plan Year beginning after December 31, 1996, the Committee shall direct
the Trustee to distribute to the Highly Compensated Participant having the
highest Matching Contributions his vested portion of Excess Aggregate
Contributions and, if forfeitable, forfeit such non-vested Excess Aggregate
Contributions attributable to Matching Contributions until either one of the
tests in Section 3.6(a) is satisfied or until the dollar amount of his or her
Matching Contributions equals the dollar amount of Matching Contributions of
the Highly Compensated Participant having the second highest Matching
Contributions. This process shall continue until the entire Excess Aggregate
Contributions amount is distributed. The amount of Excess Aggregate
Contributions is determined by reducing the actual contribution ratio of the
Highly Compensated Employee with the highest actual contribution ratio, until
one of the tests set forth in Section 3.6(a) is satisfied, or until his actual
contribution ratio equals the actual contribution ratio of the Highly
Compensated Employee having the second highest actual contribution ratio. This
process shall continue until one of the tests in Section 3.6(a) is satisfied.
The total amount of such reductions shall be the Excess Aggregate
Contributions.
With respect to the distribution of Excess Aggregate Contributions pursuant
to the preceding paragraph above, such distribution:
(1) May be postponed but not later than the close of the Plan Year
following the Plan Year to which they are allocable;
(2) Shall be adjusted for Income; and
(3) Shall be designated by the Committee as a distribution of Excess
Aggregate Contributions (and Income).
Any distribution of less than the entire amount of Excess Aggregate
Contributions shall be treated as a pro rata distribution and/or forfeiture of
Excess Aggregate Contributions and Income. Forfeitures of Matching
Contributions under this Section 3.7 shall be allocated to Participants as
provided in Section 4.1(a)(5), except that no forfeiture shall be allocated to
a Highly Compensated Participant whose contributions are reduced pursuant to
this Section 3.7.
(b) Within twelve (12) months after the end of the Plan Year, the
Company may make a Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of the tests
set forth in Section 3.6(a).
(c) If during a Plan Year the projected aggregate amount of Matching
Contributions to be allocated to all Highly Compensated Participants under this
Plan would, by virtue of the tests set forth in Section 3.6(a), cause the Plan
to fail such tests, then the Committee may automatically reduce proportionately
or in the order provided in Section 3.7(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount necessary to
satisfy one of the tests set forth in Section 3.6(a).
3.8 TRANSFERS FROM QUALIFIED PLANS
(a) Rollover transfers of assets to the Plan may be made on the
following terms and conditions:
(1) With the consent of the Committee or its designee, amounts may
be transferred from other qualified plans by any Participant, provided
that the trust from which such funds are transferred permits the transfer
to be made and the transfer will not jeopardize the tax exempt status of
the Plan or Trust or create adverse tax consequences for the Company.
The amounts transferred shall be held in a separate account herein
referred to as a Participant's "Rollover Account."
(2) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) distributions
from another qualified plan which are eligible rollover distributions and
which are either transferred by the Participant to this Plan within sixty
(60) days following the Participant's receipt thereof or are transferred
pursuant to a direct rollover; (ii) amounts transferred to this Plan from
a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A)
were previously distributed to the Participant by another qualified plan
as a lump-sum distribution, (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other
than earnings on said assets; and (iii) amounts distributed to the
Participant from a conduit individual retirement account meeting the
requirements of clause (ii) above, and transferred by the Participant to
this Plan within sixty (60) days of his or her receipt thereof from such
conduit individual retirement account.
(b) Prior to accepting any transfers to which this Section applies, the
Committee or its designee may require the Participant to establish that the
amounts to be transferred to this Plan meet the requirements of this Section
and may also require the Participant to provide an opinion of counsel
satisfactory to the Committee or its designee that the amounts to be
transferred meet the requirements of this Section. In addition, the Committee
may require the Participant to provide a written statement from the plan
administrator or distributing plan that the distributing plan has received a
favorable determination letter from the IRS.
(c) The Trustee may receive and hold as a "Rollover Contribution
Account" for a Participant hereunder such Participant's account under another
profit sharing plan and trust, respectively, qualified under Section 401(a) and
exempt from tax under Section 501(a) of the Code, respectively, in which the
Participant formerly participated if such account is transferred by the trustee
of such other plan to the Trustee of this Plan to be held hereunder. This Plan
shall not accept any direct or indirect transfers (as that term is defined and
interpreted under Code Section 401(a)(11) and the regulations thereunder) from
a defined benefit plan, money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan which would otherwise have provided for a
joint and survivor life annuity form of payment to the Participant.
Notwithstanding anything herein to the contrary, a transfer directly to this
Plan from another qualified plan (or a transaction having the effect of such a
transfer) shall only be permitted if it will not result in the elimination or
reduction of any "Section 411(d)(6) protected benefit."
(d) The Trustee shall invest assets in a Participant's Rollover
Contribution Account as provided in Section 4.4.
(e) Each Rollover Contribution Account shall be fully vested at all
times in the Participant for whose benefit it is created.
(f) A Participant's Rollover Contribution Account shall be distributed
as provided in Article VI.
ARTICLE IV
ACCOUNTS AND ALLOCATIONS
4.1 ALLOCATIONS OF COMPANY CONTRIBUTIONS
(a) The Committee shall allocate contributions (including Forfeitures)
for a Plan Year to a Participant's Account in the following manner:
(1) The Company's Elective Contribution made pursuant to Section
3.1(a)(1) shall be allocated as of the Valuation Date such contribution
is received by the Trustee to each Participant's Elective Contribution
Account in an amount equal to each such Participant's Deferred
Compensation for the applicable deferral period.
(2) The Company's Matching Contribution made pursuant to Section
3.1(a)(2) shall be allocated as of the Valuation Date such contribution
is received by the Trustee to each Participant's Matching Contribution
Account in accordance with Section 3.1(a)(2).
(3) The Company's Non-Elective Contribution made pursuant to
Section 3.1(a)(3) shall be allocated as of the last day of the Plan Year
for which it is made to each Participant's Non-Elective Account in
accordance with Section 3.1(a)(3); provided, however, that only those
Participants (A) who have not incurred a Termination of Employment prior
to the last day of the Plan Year or, if applicable, the last business day
of the Plan Year, and (B) who are credited with a Year of Service during
the Plan Year for which allocations are to be made, shall be eligible to
share in this contribution and allocation; provided, however, that if the
Participant's Termination of Employment is on account of his death,
Disability or after attainment of Normal Retirement Age, the requirements
of (A) and (B) above shall not apply.
(4) The Company's Qualified Non-Elective Contribution made
pursuant to Section 3.1(a)(4) shall be allocated as of the last day of
the Plan Year for which it is made in accordance with Section 3.1(a)(4);
provided, however, that only those Participants (A) who have not incurred
a Termination of Employment prior to the last day of the Plan Year or, if
applicable, the last business day of the Plan Year, and (B) who are
credited with a Year of Service during the Plan Year for which
allocations are to be made, shall be eligible to share in this
contribution and allocation; provided, however, that if the Participant's
Termination of Employment is on account of his death, Disability or after
attainment of Normal Retirement Age, the requirements of (A) and (B)
above shall not apply.
(5) Forfeitures shall be added to the Company's Non-Elective
Contribution and allocated as provided in Section 4.1(a)(3) above for the
Plan Year in which such Forfeitures occur. Forfeitures arising under the
USCS International, Inc. 401(k) Retirement Plan which have not been
allocated under such Plan, and which are transferred to this Plan as part
of the plan merger, shall be treated as Forfeitures under this Plan
occurring during the 2000 Plan Year and shall be allocated as provided in
Section 4.1(b). Except as provided in Section 5.3, a Participant shall
not share in the allocation of any Forfeiture of any portion of his or
her Account.
(b) The Committee shall account separately for each Company's
contributions under the Plan. The Committee will allocate each Company's
contributions to the Accounts of those Participants employed by the Company and
to the Accounts of any Participants employed by any Affiliated Company of such
Company. A Forfeiture shall be allocated only to the Accounts of Participants
employed by the Company that actually employed the Participant to whose Account
the Forfeiture is attributable and to the Accounts of Participants employed by
any Affiliated Company of such Company.
(c) If, for any Plan Year, any Eligible Employee who should have been
included in the allocation of Company Non-Elective or Qualified Non-Elective
Contributions under Paragraph 4.1(a) is erroneously omitted and discovery is
not made until after the Company Non-Elective or Qualified Non-Elective
Contributions for the Plan Year have been allocated, Forfeitures for the Plan
Year in which discovery is made shall be allocated to, or if such Forfeitures
are insufficient an additional Company Qualified Non-Elective Contribution
shall be made on behalf of, the Participant in an amount equal to the Company
Non-Elective or Qualified Non-Elective Contributions which would have been
allocated under Paragraph 4.1(a) had the Eligible Employee not been omitted,
plus or minus earnings or losses which would have been allocated thereon if the
Company Non-Elective or Qualified Non-Elective Contributions had been allocated
as provided in Paragraph 4.1(a). For this purpose, earnings or losses shall be
determined as if the Participant made no affirmative investment election with
respect to his or her Account.
(d) If, for any Plan Year, any person who should not have been allocated
Company contributions under Section 4.1(a) is erroneously included in such
allocation and discovery thereof is not made until after such allocation is
made, such erroneously allocated contributions, plus or minus earnings or
losses thereon, shall immediately upon discovery be debited from the
Participant's Account and shall constitute a Forfeiture for the Plan Year the
debit is made. Such Forfeiture shall be held as part of the Trust Fund and
invested in accordance with Section 4.4(d) until applied pursuant to Section
4.1(a)(5). Notwithstanding the above, any such forfeited amounts attributable
to Deferred Compensation shall be distributed to such ineligible person as soon
as administratively practicable following discovery.
4.2 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's Account for any "limitation year" shall equal the
lesser of: (1) $30,000 (or, if greater, one-fourth of the dollar limitations
in effect under Code Section 415(b)(1)(A)) or (2) 25% of the Participant's 415
Compensation for such "limitation year."
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's Account for any
"limitation year" of: (1) Company contributions; (2) Employee contributions;
(3) forfeitures; (4) amounts allocated; after March 31, 1984, to an individual
medical account, as defined in Code Section 415(l)(2) which is part of a
pension or annuity plan maintained by the Company; and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Company. The 415 Compensation percentage limitation referred
to in paragraph (a)(2) above shall not, however, apply to: (1) any
contribution for medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is otherwise treated as an
"annual addition;" or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for the
purposes of this Section 4.2: (1) rollover contributions as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(b)(8) and 408(d)(3)); (2)
repayments of loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(7)(b)
(cash-outs); (4) repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable from gross income
under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Plan Year.
(e) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code Section
415(d) pursuant to the Treasury Regulations. The adjusted limitation is
effective as of January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(f) For the purpose of this Section, all qualified defined benefit plans
(whether terminated or not) ever maintained by the Company shall be treated as
one defined benefit plan, and all qualified defined contribution plans (whether
terminated or not) ever maintained by the Company shall be treated as one
defined contribution plan.
(g) For the purpose of this Section, if the Company is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)), is a member of an affiliated service group (as defined by
Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees of
such Companies shall be considered to be employed by a single Company.
(h) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, all employers of a Participant who maintain this Plan will be
considered to be a single employer.
(i) (1) If a Participant participates in more than one defined
contribution plan maintained by the Company which have different
allocation dates, the maximum "annual additions" under this Plan shall
equal the maximum "annual additions" for the "limitation year" minus any
"annual additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan not
subject to Code Section 412 maintained by the Company which have the same
allocation dates, "annual additions" will be credited to the
Participant's accounts under the defined contribution plan subject to
Code Section 412 prior to crediting "annual additions" to the
Participant's accounts under the defined contribution plan not subject to
Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 which have the same
allocation dates, "annual additions" will be credited to the
Participant's accounts under the other defined contribution plan prior to
crediting "annual additions" to the Participant's account under this Plan
and any amounts in excess of the limitation set forth in Section 4.2(a)
shall be adjusted in this Plan as provided herein.
(j) Notwithstanding anything contained in this Section to the contrary,
the limitations, adjustments and other requirements prescribed in this Section
shall at all times comply with the provisions of Code Section 415 and the
Treasury Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.3 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a Participant's
Compensation or other facts and circumstances to which Treasury Regulations
Section 1.415-6(b)(6) shall be applicable, the "annual additions" under this
Plan would cause the maximum "annual additions" to be exceeded for any
Participant, the Committee shall: (1) distribute any elective deferrals (within
the meaning of Code Section 402(g)(3)) to the extent that the return would
reduce the "excess amount" in the Participant's accounts; (2) hold any "excess
amount" remaining after the return of any elective deferrals in a "Section 415
suspense account;" (3) use the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary) to reduce
Company contributions for that Participant if that Participant is covered by
the Plan as of the end of the "limitation year," or if the Participant is not
so covered, allocate and reallocate the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation years" if necessary) to all
Participants in the Plan before any Company or Employee contributions which
would constitute "annual additions" are made to the Plan for such "limitation
year;" and (4) reduce Company contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated and
reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any Participant
for a "limitation year" shall mean the excess, if any, of (1) the "annual
additions" which would be credited to his account under the terms of the Plan
without regard to the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.3.
(c) For purposes of this Section, "Section 415 suspense account" shall
mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year." The Section 415
suspense account" shall not share in any earnings or losses of the Trust Fund.
4.4 INVESTMENT OF ACCOUNTS
(a) A Participant or Former Participant may direct the Trustee, in the
form and manner prescribed by the Committee, to invest any portion of his or
her Elective Contribution Account, Matching Contribution Account, Rollover
Contribution Account (other than the DST Profit Sharing Rollover Contribution
Subaccount), and any funds transferred from the USCS International, Inc. 401(k)
Retirement Plan, in specific assets or other available investment options as
determined under Section 4.4(b) below. That portion of the Account of any
Participant or Former Participant so directing shall thereupon be considered a
directed investment account, which shall not share in Trust Fund earnings, but
it shall be charged or credited as appropriate with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in market value
attributable to such account as provided in Section 4.5, but shall be charged
or credited with its allocable share of the general expenses of the Trust
Fund. Any costs and expenses related to compliance with the Participant's or
Former Participant's directions shall be charged or debited against the
individual's directed investment account.
(b) The Committee shall have the sole discretion to determine the
different investment fund choices to be made available to Participants and
Former Participants, which investment fund choices may include Company Stock.
(c) The Committee shall from time to time establish rules and procedures
which it determines necessary or appropriate for the proper administration of
the investment options available to Participants and Former Participants.
Neither the Committee, the Trustee nor any other persons including the
Administrator or otherwise shall be under any duty to question any such
direction of the Participant or Former Participant or to make any suggestions
to the Participant or Former Participant in connection therewith, and the
Trustee shall comply as promptly as practicable with directions given by the
Participant or Former Participant hereunder. Any such direction may be of a
continuing nature or otherwise and may be revoked by the Participant or Former
Participant at any time in such form and manner prescribed by the Committee.
(d) Any assets held in the Trust Fund, the investment of which is not
directed by a Participant pursuant to Section 4.4(a), shall be invested by the
Trustee as directed by the Committee.
4.5 ADJUSTMENT OF ACCOUNTS
As of each Valuation Date, the value of a Participant's Accounts shall be
equal to:
(a) the value of each such Account as of the preceding Valuation Date;
(b) plus or minus any increase or decrease in the net worth of the
investments or assets held in such Account (to the extent such Account is
available for investment direction by the Participant pursuant to Section
4.4(a)) since the preceding Valuation Date;
(c) plus or minus such Account's share of the appreciation or
depreciation and the net income or loss of that portion of the Trust Fund which
is not available for Participant investment direction (to the extent such
Account is not available for investment direction by the Participant pursuant
to Section 4.4(a)) since the preceding Valuation Date, as determined under
Section 4.8.
(d) plus or minus contributions to or distributions from each such
Account since the preceding Valuation Date; and
(e) minus the portion of Plan expenses allocable to such Account and
direct investment expenses of the Account.
4.6 VALUATION OF TRUST ASSETS
The Committee shall direct the Trustee, as of each Valuation Date, to
determine the net worth of the assets comprising the Trust Fund as it exists on
the Valuation Date. In determining such net worth, the Trustee shall value the
assets comprising the Trust Fund at their fair market value as of the Valuation
Date and shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Company or the Trust Fund.
4.7 REPORTS TO PARTICIPANTS
Each Participant shall be furnished annually, or on a more frequent basis
as determined by the Committee, a written statement setting forth the fair
market value of his or her Account as of the end of the Plan Year, together
with a statement of the amounts contributed by the Company and of the earnings
credited thereon.
4.8 ALLOCATION OF INCOME, LOSS, APPRECIATION OR DEPRECIATION
Allocation of income or loss and appreciation or depreciation on that
portion of the Trust Fund which is not available for participant investment
direction (called the "General Trust Fund" in for purposes of this Section)
will be allocated to each Participant's Account invested in the General Trust
Fund in the ratio in which the balance of each of the Participant's Accounts in
the General Trust Fund on the immediately preceding Valuation Date bears to the
sum of the balances for the Accounts of all Participants in the General Trust
Fund on that date. For purposes of this Section 4.8, the net income (or loss)
and appreciation or depreciation shall include the increase (or decrease) in
the fair market value of assets of the General Trust Fund, interest, dividends,
and other income and expenses since the preceding Valuation Date.
ARTICLE V
VESTING
5.1 IMMEDIATE VESTING
(a) A Participant shall become fully vested in his Accounts as of his
Normal Retirement Age, provided he or she is employed by the Company or an
Affiliated Company on such date. A Participant who remains in the employ of
the Company after attaining Normal Retirement Age will continue to participate
in Company contributions.
(b) If a Participant has a Termination of Employment on account of his
or her death or Disability, he or she shall become fully vested in his or her
Accounts as of such Termination of Employment.
5.2 VESTING SCHEDULE
(a) A Participant shall always be fully vested in his Elective
Contribution Account, his Rollover Contribution Account, the Thrift Plan Non-
Elective Contributions Subaccount of his Non-Elective Contributions Account,
his QVEC Contributions Account, his After-Tax Contributions Account and his
ESOP Diversification Account.
(b) Except as provided in Sections 5.2(b)(1) and (2) below, a
Participant shall become vested in his Matching Contribution Account according
to the following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
----------------- -----------------
Less than 3 0%
At least 3, but less than 4 30%
At least 4, but less than 5 60%
At least 5 100%
(1) Any Participant who was a participant in the USCS
International, Inc. 401(k) Retirement Plan and had at least three (3)
Years of Service under that Plan as of January 1, 2000 shall always be
fully vested in his or her Matching Contribution Account.
(2) Any Participant originally employed by a Company, other than
USCS International, Inc. or its subsidiaries, prior to January 1, 2000
shall become vested in his Matching Contribution Account according to the
following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
Less than 1 0%
At least 1, but less than 2 10%
At least 2, but less than 3 20%
At least 3, but less than 4 30%
At least 4, but less than 5 60%
At least 5 100%
(c) Except as provided in Section 5.2(c)(1) below, a Participant shall
become vested in his Non-Elective Contribution Account according to the
following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
Less than 3 0%
At least 1, but less than 2 30%
At least 4, but less than 5 60%
At least 5 100%
(1) Any Participant originally employed by a Company, other than
USCS International, Inc. or its subsidiaries prior to January 1, 2000
shall become vested in his Non-Elective Contribution Account according to
the following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
Less than 1 0%
At least 1, but less than 2 10%
At least 2, but less than 3 20%
At least 3, but less than 4 30%
At least 4, but less than 5 60%
At least 5 100%
(d) In the event the Plan is amended to change the vesting schedule
above, each Participant who has completed at least three (3) Years of Service
with the Company as of the expiration of the election period set forth below
may elect to have the percentage of his nonforfeitable Account determined under
the Plan without regard to the amendment. The Participant must file his
election with the Committee within sixty (60) days of the later of: (1) the
Company's adoption of the amendment; (2) the effective date of the amendment,
or (3) his receipt of a copy of the amendment. The Plan Administrator, as soon
as practicable, shall forward a copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form on which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment, and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule.
(e) The following special vesting provisions contained in the DST
Systems, Inc. Profit Sharing Plan shall also continue to apply:
(1) Each Participant who terminated employment with DST and became
an employee of Policyholder Service Corporation on or about July 1, 1990
shall be fully vested in his or her Account in the DST Systems, Inc.
Profit Sharing Plan as of December 31, 1990.
(2) Each Participant who terminated employment with the Vital
Records Storage group of Output Technologies Central Region, Inc. on or
about May 20, 1996 shall be fully vested in his or her Account in the DST
Systems, Inc. Profit Sharing Plan as of December 31, 1996.
(3) Each Participant who terminated employment with the Lincoln,
Nebraska facility of Output Technologies Central Region, Inc. on or about
April 25, 1996 shall be fully vested in his or her Account in the DST
Systems, Inc. Profit Sharing Plan as of December 31, 1996.
(4) Each Participant who had a separation from Service under the
DST Systems, Inc. Profit Sharing Plan on or about August 1, 1996 because
of the sale of stock of The Continuum Company, Inc. to Computer Sciences
Corporation shall be fully vested in his or her Account in the DST
Systems, Inc. Profit Sharing Plan as of December 31, 1996.
(5) As of July 31, 1996, certain former Participants employed as
of that date by Midland Data Systems, Inc. or Midland Loan Services, L.P.
had a separation from Service under the DST Systems, Inc. Profit Sharing
Plan because Kansas City Southern Industries, Inc. ceased to own any
interest in such companies. Each Participant who was still employed by
Midland Data Systems, Inc. or Midland Loan Services, L.P. as of January
1, 1996 shall be fully vested in his or her Account in the DST Systems,
Inc. Profit Sharing Plan as of December 31, 1996.
5.3 RESTORATION OF ACCOUNT BALANCES
(a) If any Former Participant is reemployed by the Company before five
(5) consecutive Breaks in Service and such Former Participant received a
distribution of the entire vested portion of his Account (including, for this
purpose, an account under the DST Systems, Inc. Profit Sharing Plan or the USCS
International, Inc. 401(k) Retirement Plan, to the extent such account was not
previously reinstated under such Plans), his or her forfeited account shall be
reinstated if he or she repays the full amount distributed to him or her before
the earlier of five (5) years after the first day on which the Participant is
subsequently reemployed by the Company or the close of the first period of five
(5) consecutive Breaks in Service commencing after the distribution. In the
event the Former Participant repays the full amount distributed, the
undistributed portion of his account shall be restored in full, unadjusted by
any gains or losses occurring subsequent to the Valuation Date coinciding with
or preceding his distribution. The source of such reinstatement shall first be
any Forfeitures occurring during the Plan Year. If such source is
insufficient, then the Company shall contribute an amount which is sufficient
to restore any such forfeited Accounts; provided, however, that if a
discretionary contribution is made for such Plan Year pursuant to Section
3.1(a)(3), such contribution shall first be applied to restore any such
Accounts and the remainder shall be allocated in accordance with Section
4.1(a)(3).
(b) For purposes of Section 5.3(a), a Participant whose Account derived
from Company contributions is entirely forfeitable at the time of his
Termination of Employment shall be deemed to have received a distribution of
his entire nonforfeitable Account as of the first day of the first Plan Year
beginning after the Plan Year in which his Termination of Employment occurs.
For purposes of applying the restoration provisions of Section 5.3(a), the
Committee will treat the 0% vested Participant as having repaid his
"distribution" on the first date of his reemployment with the Company.
(c) For purposes of determining "Years of Service", the Plan takes into
account all Years of Service an Employee completes with the Company. For the
sole purpose of determining a Participant's nonforfeitable percentage of his
Account derived from Company contributions which accrued for his benefit prior
to five (5) consecutive Breaks in Service, the Plan disregards any Years of
Service after the Participant incurs five (5) consecutive Breaks in Service.
5.4 DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS
If a distribution is made to a Participant (other than a distribution of
the entire vested portion of his Account or a deemed distribution pursuant to
Section 5.3(b)) at a time when the Participant is not fully vested in his
Account and the Participant may increase vesting in such Account, the Committee
will establish a separate account for the Participant's Account. At any
relevant time following the distribution, the Committee will determine the
Participant's nonforfeitable interest in such Account derived from Company
contributions according to the following formula:
X = P (AB + (R * D)) - (R * D)
For purposes of this formula, "P" is the Participant's current vested
percentage at the relevant time, "AB" is the Participant's Company-derived
account balance at the relevant time, "D" is the amount of the earlier
distribution, and "R" is the ratio of the account balance at the relevant time
to the account balance after the earlier distribution.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT
(a) A Participant's vested Account shall become distributable as of
the Participant's Termination of Employment (the "distribution date").
(b) If the value of a Participant's vested Account exceeds $3,500 (or
$5,000 with regard to distributions occurring after December 31, 1997) on the
distribution date, the Participant must consent to any distribution of his or
her Account prior to age 59 1/2. With regard to this required consent:
(1) No consent shall be valid unless the Participant has received a
general description of the material features and an explanation of the
relative values of the optional forms of benefit available under the Plan
that would satisfy the notice requirements of Code Section 417.
(2) The Participant must be informed of his or her right to defer
receipt of the distribution. If a Participant fails to consent, it shall
be deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits shall
not apply with respect to distributions which are required under Code
Section 401(a)(9) and Section 6.4.
(3) Notice of the rights specified under this Section shall be
provided no less than thirty (30) days and no more than ninety (90) days
before the date the distribution commences.
(4) Written consent of the Participant to the distribution must not
be made before the Participant receives the notice and must not be made
more than ninety (90) days before the date the distribution commences.
(5) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
Distribution may commence less than 30 days after the notices required
under Treasury Regulation Section 1.411(a)-11(c) and Code Section 402(f) are
given, provided that: (1) the Committee clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable a particular distribution option) or a direct rollover; and (2)
the Participant, after receiving the notice, affirmatively elects to receive
the distribution. Distribution shall be made to a Participant under this
provision on, or as soon as is administratively practicable after, the date the
Participant files his or her consent and/or waiver with the Committee in
accordance with this Section. If the Participant does not give his or her
consent to distribution as of the distribution date, his or her Account shall
remain in the Plan, subject to Section 6.11, until the Participant requests a
distribution complying with this Section 6.1(b). With regard to Terminations
of Employment occurring during January, February and March of 2000,
distribution shall not be made prior to March 31, 2000.
(c) If the Participant's vested Account does not exceed $3,500 (or
$5,000 with regard to distributions occurring after December 31, 1997) on the
distribution date, such Account shall be distributed on such date, or as soon
as administratively practicable thereafter, without the need for the
Participant's consent. Notwithstanding the preceding sentence, distribution
hereunder may not be made less than thirty (30) days after the date the Code
Section 402(f) notice is given, unless: (1) the Committee clearly informs
the Participant that the Participant has a right to a period of at least
thirty (30) days after receiving the notice to consider the decision of
whether to elect a distribution or a direct rollover; and (2) the
Participant, after receiving this notice, affirmatively elects (which need
not be in writing) an earlier distribution.
(d) Distributions of Accounts subject to investment direction by the
Participant pursuant to Section 4.4(a) shall be valued as of the date such
distribution is made. Distribution of all other Accounts shall be valued as
of the Valuation Date immediately preceding such distribution.
(e) If a previously terminated Participant is reemployed by the Company
prior to the date a distribution check is prepared and mailed to such
Participant pursuant to this Section 6.1, the distribution shall be suspended,
provided such reemployment is discovered within an administratively practicable
period before such mailing.
6.2 DISTRIBUTION UPON DEATH
(a) A Participant's Account shall become immediately distributable upon
his or her death (the "distribution date"). Payment shall be made under this
Section on, or as soon as administratively practicable after, the later of:
(1) the distribution date; or (2) the date the Committee has been provided
satisfactory evidence of the Participant's death, has established the
Participant's Beneficiary, and the notice and consent requirements of 6.2(b)
have been satisfied. Distributions of Accounts which were subject to
investment direction by the Participant pursuant to Section 4.4(a) shall be
valued as of the date such distribution is made. Distribution of all other
Accounts shall be valued as of the Valuation Date immediately preceding such
distribution.
(b) If the Beneficiary is the Participant's surviving spouse,
distribution may not be made prior to such Beneficiary's receipt of the notice
required under Code Section 402(f). Such notice shall be provided to the
Beneficiary no less than thirty (30) days and no more than ninety (90) days
before such distribution. Distribution may commence less than thirty (30) days
after such Beneficiary's receipt of such notice provided that: (1) the
Committee clearly informs the Beneficiary that he or she has the right to a
period of at least thirty (30) days after receiving the notice to consider the
decision of whether to elect a distribution or a direct rollover; and (2) the
Beneficiary, after receiving such notice affirmatively elects a distribution.
(c) If a Participant or Former Participant dies before receipt of the
Participant's entire Account and leaves no surviving spouse, or the
Participant's spouse consented to a Beneficiary designation, the Participant's
benefits shall be paid to the person or persons designated by the Participant
from time to time in a Beneficiary designation. Such Beneficiary or
Beneficiaries may be designated concurrently or successively, either
individually or in a fiduciary capacity, and may be an entity other than a
natural person. Each Beneficiary designation shall be in form prescribed by
the Committee and will be effective only when filed with the Company during the
Participant's or Former Participant's lifetime. The Participant's Beneficiary
shall be the Participant's spouse at the time of the Participant's death unless
the spouse has waived the right to be the Participant's Beneficiary and
consented to the Participant's Beneficiary designation. A Participant may
revoke or modify a Beneficiary designation previously consented to by the
Participant's spouse only if the new Beneficiary is the Participant's spouse or
the spouse consents to such change in Beneficiary designation. In lieu of the
preceding two sentences, the Plan may permit the spouse to execute a general
consent which permits the Participant to designate a Beneficiary and to change
such designation without any further consent of the spouse. A consent under
the preceding sentence shall be valid only if the consent acknowledges the
spouse had the right to limit consent to a specific Beneficiary and such spouse
voluntarily waived such rights. Each Beneficiary designation filed with the
Company will cancel all Beneficiary designations previously filed with the
Company. The revocation of a Beneficiary designation which designates a
Beneficiary other than the Participant's spouse, no matter how such revocation
is effected, shall not require the consent of such designated Beneficiary. In
the event that a Participant designates his or her spouse as Beneficiary, and
the Participant and that spouse are later divorced, such designation shall no
longer be in effect unless the Participant reaffirms such designation in
writing subsequent to the divorce. In the event that an unmarried Participant
marries, his or her beneficiary designation shall no longer be in effect unless
the Participant reaffirms such designation in writing subsequent to the
marriage. It shall be the responsibility of the Participant to keep the
Company informed of changes in the Participant's marital status and/or
Beneficiary designations. Neither the Committee nor the Company shall have any
liability for determining the identity of a surviving spouse or intended
beneficiary beyond the information provided by the Participant to the Company.
All spousal consents provided in this Section shall be in writing, must
acknowledge the effect of such consent/waiver, be witnessed by a notary public
or a Plan representative, and be irrevocable. The Committee may, in its
discretion, adopt any procedures reasonably necessary for the implementation
and administration of this Section 6.2(c), including the adoption of transition
rules in the event of a merger or transfer of plan assets and liabilities.
(d) If the Participant dies leaving no surviving spouse and (1) fails to
designate a Beneficiary in the manner provided above, or (2) if the Beneficiary
designated by a Participant or Former Participant dies before the Participant
or Former Participant and the Participant or Former Participant fails to
designate a new Beneficiary or (3) if the Beneficiary designated by a deceased
Participant or Former Participant dies before complete distribution of the
deceased Participant's or Former Participant's benefits, the Committee shall
direct the Trustee to distribute such Participant's or Former Participant's
benefits (or the balance thereof) to the Participant's children then living in
equal shares. If none of those persons survives the Participant, the
Participant's benefit shall be payable to the Participant's estate for
distribution in accordance with the terms of the Participant's last will and
testament or as a court of competent jurisdiction shall determine; provided,
however, that if the amount to be distributed does not exceed $3,500 (or $5,000
with regard to distributions occurring after August 5, 1997), the Committee in
its sole discretion may direct the Trustee to distribute such benefit to the
next of kin of the Beneficiary (if the Committee has reason to believe the
status of such person) in lieu of requiring a court determination.
(e) The Committee, in its discretion, may direct the Trustee to
segregate the Account of a deceased Participant and to invest such funds
separately. In the event such Account is not so segregated, the Account shall
remain in a separate account for the Beneficiary of such Participant and shall
continue to share in earnings allocations pursuant to Section 4.4 until such
time as distribution of such Account is made to the Beneficiary.
6.3 MANNER OF DISTRIBUTION
(a) The Committee, pursuant to the election of the Participant or, in
the case the Participant's death, the Participant's Beneficiary, shall direct
the Trustee to distribute to such Participant or Beneficiary any amount to
which he or she is entitled under the Plan in one or more of the following
methods:
(1) a single lump sum payment; or
(2) monthly, quarterly, or annual installment payments over a
fixed reasonable period of time, not to exceed the life expectancy of the
Participant, or the joint life and last survivor expectancy of the
Participant and his Beneficiary.
(b) Distributions shall be made in cash or, at the option of the
Participant, in cash plus the number of whole shares (with cash in lieu of
fractional shares) of Company Stock allocated to the Participant's Accounts.
A Participant electing distribution of Company Stock must elect distribution
of all Company Stock allocated to his Accounts; a partial distribution of
Company Stock is not available.
6.4 GENERAL LIMITATIONS ON TIME OF PAYMENT OF BENEFITS
Notwithstanding anything herein to the contrary, unless the Participant
otherwise elects, the payment of benefits under this Plan to a Participant will
begin not later than the sixtieth (60th) day after the latest of the close of
the Plan Year in which:
(a) the date on which the Participant attains age 59 1/2;
(b) the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or
(c) the date the Participant terminates service with the Company;
provided, however, the distribution of a Participant's Account shall be made in
accordance with the following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Treasury Regulations thereunder (including Treasury
Regulation Section 1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) With regard to any Participant who attained age 70 1/2 before
January 1, 1999, distribution of such Participant's benefits commenced
not later than April 1 of the calendar year following the calendar year
in which the Participant attained age 70 1/2 in accordance with Code
Section 401(a)(9) as in effect prior to the Small Business Job Protection
Act of 1996; provided, however, that for Plan Years after December 31,
1996, such Participant, other than a "five percent owner" (as defined
in Code Section 401(a)(9)), was permitted to make an annual election
to defer the receipt of his or her required minimum distribution for
such year until a date not later than April 1 of the calendar year
following the calendar year in which the Participant retires.
Distributions under this Section 6.4(c)(1) and the annual election
provided above shall be discontinued from and after January 1, 2000
and distribution of benefits of Participants described herein shall be
made in accordance with Section 6.4(c)(2) below.
(2) Effective as of January 1, 2000, a Participant's benefits shall
be distributed to him or her not later than April 1 of the calendar year
following the later of (i) the calendar year in which the Participant
attains age 70 1/2 or, (ii) the calendar year in which the Participant
retires; provided, however, that this clause (ii) shall not apply in the
case of a Participant who is a "five percent owner" at any time during
the five (5) Plan Year period ending in the calendar year in which he or
she attains age 70 1/2 or, in the case of a Participant who becomes a "five
percent owner" during any subsequent Plan Year, clause (ii) shall no
longer apply and the required beginning date shall be the April 1 of the
calendar year following the calendar year in which such subsequent Plan
Year ends. Alternatively, distributions to a Participant must begin no
later than the applicable April 1 as determined under the preceding
sentence and must be made over the life of the Participant (or the lives
of the Participant and the Participant's designated Beneficiary) or the
life expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations.
(3) Distributions to a Participant and his or her Beneficiaries
shall only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations thereunder.
(4) For purposes of this subsection, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in accordance
with Regulations. The election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and
VI of Treasury Regulation Section 1.72-9.
6.5 HARDSHIP DISTRIBUTION - ELECTIVE CONTRIBUTION ACCOUNT
(a) The Committee, at the election of the Participant, shall direct the
Trustee to distribute to any Participant up to the lesser of 100% of the
Participant's Elective Contribution Account, valued as of the distribution
date, or the amount necessary to satisfy the immediate and heavy financial need
of the Participant.
(b) Withdrawal from a Participant's Elective Contribution Account shall
be authorized only if the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) previously
incurred by the Participant, his or her spouse, or any of his or her
dependents (as defined in Code Section 152), or necessary for these
persons to obtain medical care described in Code Section 213(d);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition, related educational fees, and room and
board expenses, for the next twelve (12) months of post-secondary
education for the Participant, his or her spouse, or dependents (as
defined in Code Section 152); or
(4) The need to prevent the eviction of the Participant from his
or her principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(c) No distribution shall be made pursuant to this Section unless:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount of the
immediate and heavy finance need may include any amounts necessary to pay
any federal, state or local income taxes or penalties reasonably
anticipated to result from the distribution;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all Plans maintained by the Company or an Affiliated Company;
(3) Under the Plan, and all other plans (including nonqualified
plans) maintained by the Company or an Affiliated Company, the
Participant's elective deferrals and voluntary Employee contributions
will be suspended for at least twelve (12) months after receipt of the
hardship distribution; and
(4) Under the Plan, and all other plans maintained by the Company
or an Affiliated Company, the Participant may not make elective deferrals
for the Participant's taxable year immediately following the taxable year
of the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such
Participant's elective deferrals for the taxable year of the hardship
distribution.
(d) Notwithstanding the above, withdrawals from the Participant's
Elective Contribution Account pursuant to this Section shall be limited solely
to the Participant's total Deferred Compensation, reduced by the amount of any
previous distributions pursuant to this Article VI. In no event shall earnings
on such amounts be distributed pursuant to this Section 6.5.
(e) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the notice and consent
requirements of Code Sections 411(a)(11) and 402(f), and the Treasury
Regulations thereunder.
6.6 HARDSHIP DISTRIBUTION - OTHER ACCOUNTS
(a) The Committee, at the election of the Participant, shall direct the
Trustee to distribute to any Participant up to the lesser of 100% of the
Participant's Account (other than the Participant's Elective Contribution
Account), valued as of the distribution date, or the amount necessary to
satisfy the immediate and heavy financial need of the Participant.
(b) Withdrawal from a Participant's Account (other than from the
Participant's Elective Contribution Account) shall be authorized if the
distribution is on account of:
(1) A major illness or disability of the Participant or a
member of the Participant's family or a dependent of the Participant;
(2) College or other post-high school education for the
Participant or the Participant's dependent;
(3) The sickness, accident or death of a member of the Participant's
immediate family;
(4) Financing of the purchase, major repair or improvement of the
Participant's primary residence; or
(5) Any other purpose which the Committee determines constitutes a
financial hardship.
(c) Notwithstanding the above, amounts in the Participant's Account may
not be distributed pursuant to Section 6.6(b)(4) or 6.6(b)(5) unless the
Participant has been a participant in the Plan (including, for this purpose,
the DST Systems, Inc. Profit Sharing Plan and the USCS International, Inc.
401(k) Retirement Plan) for all or part of at least four (4) Plan Years;
further provided, that in no event shall the Committee grant a Participant's
request for a hardship distribution pursuant to such sections where such
Participant has previously made such a withdrawal unless, subsequent to the
Plan Year in which the Participant's most recent request was made and granted,
the Participant continued to be a participant in the Plan (including, for this
purpose, the DST Systems, Inc. Profit Sharing Plan and the USCS International,
Inc. 401(k) Retirement Plan) for all or part of at least four (4) additional
Plan Years.
(d) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the notice and consent
requirements of Code Sections 411(a)(11) and 402(f), and the Treasury
Regulations thereunder.
6.7 PRE-RETIREMENT DISTRIBUTIONS
(a) A Participant who has attained Normal Retirement Age may request a
distribution of all or any portion of his Account. In the event that the
Committee makes such distribution, the Participant shall continue to be
eligible to participate in the Plan on the same basis as any other Employee.
Any distribution made pursuant to this Section shall be made in a manner which
is consistent with and satisfies the notice and consent requirements of Code
Sections 411(a)(11) and 402(f), and the Treasury Regulations thereunder.
(b) A Participant may request a distribution of all or any portion of
his QVEC Contributions Account and his After-Tax Contributions Account at any
time. Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the notice and consent
requirements of Code Sections 411(a)(11) and 402(f), and the Treasury
Regulations thereunder.
6.8 LOANS
(a) A Participant may submit an application to the Committee to borrow
from any of his or her Accounts which are subject to investment direction by
the Participant pursuant to Section 4.4(a) an amount which, when added to the
outstanding balance of all other loans to the Participant from all plans of
the Company, is not in excess of the lesser of:
(1) $50,000 reduced by the excess (if any) of (i) the highest
outstanding balance of loans from the Plan or any other qualified
retirement plan maintained by the Company ("Plan Loans") during the one-
year period ending on the day before the date on which such loan was
made, over (ii) the outstanding balance of loans from the Plan and other
Plan Loans on the date on which such loan was made, or
(2) 50% of the vested portion of his or her Accounts as of the
Valuation Date coincident with or immediately preceding the receipt of
his or her loan application by the Administrator and the expiration of
such notice period as the Administrator may require.
(b) If approved, each such loan shall comply with the following
conditions:
(1) It shall be evidenced by a negotiable promissory note.
(2) The rate of interest payable on the unpaid balance of such
loan shall be a reasonable rate determined by the Administrator.
(3) The loan, by its terms, must require substantial level
amortization of repayments through payroll deductions (to be made not
less frequently than quarterly) within five (5) years; provided,
however, that if the proceeds of the loan are used to acquire any
dwelling unit which within any reasonable time (determined at the time
the loan is made) will be used as the principal residence of the
Participant, the repayment schedule, in the discretion of the
Administrator, may be for a term in excess of five (5) years.
(4) In the event of a default, foreclosure on the promissory
note will not occur until a distributable event occurs under the Plan.
(5) The loan shall be adequately secured and must be secured
by no more than 50% of the Participant's vested interest in the balance
of his or her Account.
(6) No more than one (1) Plan loan may be outstanding at any
given time.
(7) No Plan loan will be granted for amounts of less than
$1,000.
(8) A request for a Plan loan shall not be approved with
regard to a Participant if such Participant has received a Plan loan
within the preceding twenty-four (24) months.
(c) Any loan to a Participant shall be charged solely against the
Account of the borrowing Participant. Principal and interest payments with
respect to the loan shall be credited solely to the Account of the borrowing
Participant from which the loan was made. Any loss caused by non-payments or
other default on a Participant's loan obligations shall be borne solely by
those Accounts. Administrative fees associated with a loan may be charged to
the Participant, subject to such administrative requirements as the
Administrator may establish.
6.9 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
(a) If a Qualified Domestic Relations Order requires the distribution of
all or a part of a Participant's benefits under the Plan to an alternate payee,
the creation, recognition or assignment of the alternate payee's right to the
benefits shall not be considered an assignment or alienation of benefits under
Section 10.1 of the Plan, or the provisions of the Act. A Qualified Domestic
Relations Order is a judgment, decree or order which creates or recognizes the
existence of an alternate payee's right to, or assigns an alternate payee's
right to receive all or a portion of the benefits payable to Participant from
the Plan and which:
(1) Relates to the provision of child support, alimony payments, or
marital property rights to a Participant's spouse, former spouse,
child, or other dependent;
(2) Is made pursuant to a state domestic relations law;
(3) Specifies the name and last known mailing address of the
Participant and the payee covered by the order;
(4) Specifies the amount of or percentage of the benefits to be paid
by the Trustee to such alternate payee, or the formula for determining
such amount;
(5) Specifies the number of payments or period of time and the
plan to which the order applies;
(6) Does not require a type or form of benefit or option not
otherwise provided under the Plan;
(7) Does not require the Plan to provide increased benefits; and
(8) Does not require the payment of benefits to an alternate payee
which are required to be paid to another alternate payee under another
Qualified Domestic Relations Order.
Payments pursuant to a Qualified Domestic Relations Order, if permitted
or required by such Order, may be made to an alternate payee at any time
after the Qualified Domestic Relations Order becomes final, whether or not
the Participant in fact has retired or terminated employment.
(b) The Committee or its designee shall promptly notify the Participant
and any alternate payee of the receipt of a Qualified Domestic Relations Order
and the Plan's procedures for determining the Order's qualified status. The
Participant and any alternate payee shall be notified promptly of all
determinations regarding the qualified status of the Order.
(c) The cost of the Committee, the Trustee or the Plan with respect to
the administration of the matters referred to in this Section 6.9 (including
but not limited to legal fees to determine compliance and court appearances)
shall not be allocated directly to the Participant's Account. Such cost
shall be a general expense of the Plan.
6.10 DIRECT ROLLOVER
(a) Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributee may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) For the purposes of this section, the following definitions shall
apply:
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciate with respect to
Company securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees with regard to
the interest of the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan
to the eligible retirement plan specified by the distributee.
6.11 SEGREGATION OF ACCOUNT
In the event any Account has become distributable but cannot for any
reason be distributed within a reasonable time, the Committee may, in its
discretion, direct the Trustee to segregate such Account and to invest such
funds in accordance with Section 4.4(d).
6.12 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, the Committee may
direct that such distribution be paid to the legal guardian, or if none, to a
parent of such Beneficiary or a responsible adult with whom the Beneficiary
maintains his or her residence, or to the custodian for such Beneficiary under
the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by
the laws of the state in which said Beneficiary resides. Such a payment to the
legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Company, Committee and Plan from further liability on
account thereof.
6.13 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all or any portion of a distribution to be made under
this Article VI remains unpaid solely by reason of the Plan's inability to
ascertain the whereabouts of the individual entitled to receive such
distribution, then the amount so distributable may be treated as a Forfeiture
once the Plan has completed a diligent effort to locate such individual. Such
Forfeiture shall be held as part of the Trust Fund and invested in accordance
with Section 4.4(d) until applied pursuant to Section 4.1(a)(5). In the event
that this individual is located at any time subsequent to his or her
distribution being reallocated, such distribution shall be restored, unadjusted
for earning or losses, from Forfeitures otherwise arising under the Plan for
the Plan Year in which the individual is located or, if such Forfeitures are
insufficient, from an additional Company contribution.
ARTICLE VII
AMENDMENT, TERMINATION AND MERGERS
7.1 AMENDMENT
(a) This Plan may be modified or amended on behalf of all Companies
which have adopted this Plan at any time by the Board of Directors of DST.
Notwithstanding the above, no modification or amendment hereof which affects
the Trustee's duties shall become effective as to such duties until approved in
writing by the Trustee. Upon mutual agreement of DST, the Trustee and any
Participant, however, the accrued rights and benefits of such Participant may
be modified.
(b) Except as permitted by Treasury Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger, plan
transfer or similar transaction) shall be effective if it eliminates or reduces
any "Section 411(d)(6) protected benefit" or adds or modifies conditions
relating to "Section 411(d)(6) protected benefits" the result of which is a
further restriction on such benefit unless such protected benefits are
preserved with respect to benefits accrued as of the later of the adoption date
or effective date of the amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A).
7.2 TERMINATION
(a) DST, by action of its Board of Directors, may terminate this Plan at
any time but, in so doing, none of the funds heretofore paid by any Company
to the Trust shall revert to the Company but shall always be held and
distributed as provided herein for the benefit of the Participants. In the
event of a complete or partial termination of this Plan or a complete
discontinuance of contributions to it, the Accounts of the Participants
affected by such complete or partial termination or discontinuance of
contributions shall be fully and immediately vested and nonforfeitable, and
the Trust shall remain in effect (unless it is specifically terminated) and
the Trust assets shall be administered in the manner provided by the terms of
the Trust and distributed as soon as administratively practicable.
(b) If (1) the Plan does not provide an annuity option, (2) the Plan
is a profit sharing plan at the time of its termination, and (3) the Company
does not maintain any other defined contribution plan (other than an ESOP)
between the date of Plan termination and the final distribution of assets,
the Committee will direct the Trustee to distribute each Participants'
Account, in a single lump sum, as soon as administratively practicable after
the termination of the Plan, irrespective of the present value of the
Participant's Account and whether the Participant consents to such
distribution.
7.3 MERGER OR CONSOLIDATION
In the case of any merger or consolidation with, or transfer of assets or
liabilities to any other plan, each Participant shall (if the Plan is then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation or
transfer if the Plan had then terminated.
ARTICLE VIII
ADMINISTRATION
8.1 ESTABLISHMENT OF ADVISORY COMMITTEE
(a) DST shall appoint not less than three (3) nor more than ten (10)
persons to serve as the Advisory Committee (the "Committee"). The Committee
shall meet and assume its duties on an "as-needed" basis and shall enact such
rules and regulations as it may deem necessary and proper to implement the Plan
promptly after its adoption. A chairman and vice-chairman shall be designated
for the Committee. Each member of the Committee may, but need not, be a
director, officer, or Employee of the Company, and each shall serve until his
or her successor shall be appointed in like manner. Any member of the
Committee may resign by delivering written resignation to DST. DST may remove
any member by so notifying the member and other Committee members in writing.
(b) The Committee shall be the "Named Fiduciary" of the Plan and
generally shall be responsible for the management, interpretation and
administration of the Plan. The Committee shall have discretionary
authority with respect to the determination of benefits under the Plan and
the construction and interpretation of Plan provisions. In addition, the
Committee shall:
(1) Determine the names of those Employees who are eligible to
participate, together with their Compensation, Hours of Service,
Beneficiary designations, Termination of Employment and such other
matters as may be necessary to determine a Participant's benefits under
the Plan;
(2) Establish procedures for allocation of responsibilities among
fiduciaries of the Plan and Trust which are not allocated herein or in the
Trust Agreement;
(3) Establish a written investment policy, including a participant
directed investment policy under Section 404(c) of the Act; and
(4) Perform such other functions and take such other actions as
may be required by the Plan or may be necessary or advisable to
accomplish the purposes of the Plan.
(c) The Trustee may rely without question upon any certificates,
notices, directions or other documents received from the Committee or any
person designated in writing by the Committee as having the authority to act
on behalf of the Committee. The Company shall furnish the Committee with all
data and information available to such Company which the Committee may
reasonably require in order to perform its function hereunder. The Committee
may rely without questions upon any such data or information furnished by any
Company.
8.2 APPOINTMENT OF INVESTMENT MANAGER
(a) The Committee shall have the right to appoint an Investment
Manager for all or any part of the assets of the Trust Fund as the Committee
shall designate, provided that any firm so appointed shall be and shall
continue to be qualified to act as such in accordance with the Act. The
Committee may remove any Investment Manager at any time and need not specify
any cause for such removal.
(b) The Committee has appointed Ruane, Cunniff & Co., Inc. to serve as
Investment Manager. That firm, so long as it shall serve as Investment
Manager, and any other firm which shall hereafter be appointed and serving as
Investment Manager, shall have and exercise, with respect to the assets under
its management, the entire investment power otherwise given to the Trustee
with respect to the Trust Fund. It shall exercise such power by giving
orders and directing the acquisition and disposition of particular assets
for, or by, the Trust Fund. So long as Ruane, Cunniff & Co., Inc. is acting
as Investment Manager, it may, by itself or through an affiliate, execute any
of such orders as broker and agent, but it shall not, by itself or through an
affiliate, sell any securities to or purchase any securities from the Trust
Fund. The Investment Manager shall promptly advise the Trustee, in writing,
of every such transaction, as ordered.
(c) When and so long as an Investment Manager appointed by the
Committee is serving, the Trustee in respect of the funds under management
shall have no other duty except to conform promptly with the written
instructions of the Investment Manager, including any directions as to the
retention of cash or the purchase or sale of short-term cash equivalent
assets, and to make settlement of all such transactions as the Investment
Manager shall have ordered.
(d) The Trustee may assume that the appointment of any Investment
Manager is continuing unless and until the Committee shall advise the
Trustee, in writing, that it has removed the Manager or that the Manager's
appointment has otherwise terminated.
8.3 AGENTS
The Committee may appoint a secretary who may, but need not, be a member
of the Committee, and may employ such agents (who shall not be fiduciaries),
for clerical and other services, and such counsel, accountants and actuaries
as may be required for the purpose of administering the Plan.
8.4 COMMITTEE PROCEDURES
A majority of the members of the Committee shall constitute a quorum for
the transaction of business. No action shall be taken except upon a majority
vote of the Committee members. An individual shall not vote or decide upon
any matter relating solely to himself or herself or vote in any case in which
his or her individual right or claim to any benefit under the Plan is
specifically involved. If, in any case in which a Committee member is so
disqualified to act, the remaining members cannot agree, the Board of
Directors of DST shall appoint a temporary substitute member to exercise all
of the powers of the disqualified member concerning the matter in which he or
she is disqualified.
8.5 PLAN ADMINISTRATOR
DST shall be the administrator of the Plan, as defined in Section
3(16)(A) of the Act, and shall be responsible for the performance of all
reporting and disclosure obligations under the Act, and all other obligations
required to be performed by the plan administrator under the Act or the Code,
except such obligations and responsibilities delegated herein, or in the
Trust, to the Committee, Trustee or such other person or entity. DST shall
be the designated agent for service of legal process with respect to the Plan
and Trust.
8.6 CLAIMS PROCEDURE
(a) An Employee, Former Employee, Participant or Beneficiary who
believes he or she is entitled to a benefit which he or she has not received
may file a claim in writing with the Committee or its delegate. The
Committee or its delegate may require a claimant to submit additional
information if necessary to process the claim. The Committee or its delegate
shall review the claim and render its decision within ninety (90) days from
the date the claim is filed (or the requested additional information is
submitted, if later), unless special circumstances require an extension of
time for processing the claim. If such an extension is required, written
notice of the extension shall be furnished the claimant within the initial
ninety (90) day period. The notice shall indicate the special circumstances
requiring the extension and the date by which the Committee or its delegate
expects to reach a decision on the claim. In no event shall the extension
exceed a period of ninety (90) days from the end of the initial period. If
the Committee fails to render its decision under this Section 8.6, the claim
shall be deemed to have been denied as of the end of the applicable time
period.
(b) If the Committee or its delegate denies a claim, in whole or in
part, it shall provide the claimant with written notice of the denial within
the period specified in subparagraph (a). The notice shall be written in
language calculated to be understood by the claimant, and shall include the
following information:
(1) The specific reason for such denial;
(2) Specific reference to pertinent Plan provisions upon which the
denial is based;
(3) A description of any additional material or information which
may be needed to clarify or perfect the request, and an explanation of why
such information is required; and
(4) An explanation of the Plan's review procedure with respect to
the denial of benefits.
8.7 CLAIMS REVIEW PROCEDURE
Any claimant whose claim has been denied, in whole or in part, shall follow
those review procedures as set forth herein.
(a) A claimant whose claim has been denied, in whole or in part, may
request a full and fair review of the claim by the Committee by making written
request therefor within seventy-five (75) days of receipt of the notification
of denial. The Committee, for good cause shown, may extend the period during
which the request may be filed. The claimant shall be permitted to examine all
documents pertinent to the claim and shall be permitted to submit issues and
comments regarding the claim to the Committee in writing.
(b) The Committee shall render its decision within sixty (60) days after
receipt of the application for review, unless special circumstances (such as
the need to hold a hearing) require an extension of time for processing, in
which case the decision shall be rendered as soon as possible but not later
than one hundred and twenty (120) days after receipt of a request for review.
If an extension of time is necessary, written notice shall be furnished the
claimant before the extension period commences.
(c) The Committee shall decide whether a hearing shall be held on the
claim. If so, it shall notify the claimant in writing of the time and place
for the hearing. Unless the claimant agrees to a shorter period, the hearing
shall be scheduled at least fourteen (14) days after the date of the notice of
hearing. The claimant and/or the claimant's authorized representative may
appear at any such hearing. If the Committee does not notify the claimant that
a hearing will be held or notifies the claimant that no hearing will be made,
then no hearing shall be held.
(d) The Committee shall send its decision on review to the claimant in
writing within the time specified in this section. If the claim is denied, in
whole or in part, the decision shall specify the reasons for the denial in a
manner calculated to be understood by the claimant, referring to the specific
Plan provisions on which the decision is based. The Committee shall not be
restricted in its review to those provisions of the Plan cited in the original
denial of the claim and shall have discretionary authority with respect to the
determination of benefits under the Plan and of the constructions and
interpretation of Plan provisions. The decision of the Committee shall be
final and binding upon the claimant and any person claiming benefits under the
Plan on behalf or through the claimant.
(e) If the Committee does not furnish its decision on review within
the time specified in this Section 8.7, the claim shall be deemed denied on
review.
8.8 BONDING
Each Committee member, each person who is a fiduciary of the Plan and
each person who handles funds of the Plan shall be bonded in an amount no
less than amounts required by Section 412 of the Act and regulations issued
thereunder.
8.9 COMPENSATION AND EXPENSES
The members of the Committee and the Administrator shall serve without
compensation; provided, however, that the Company may pay or reimburse such
persons for any expenses reasonably incurred in the administration of the
Plan. If not so paid or reimbursed for such expenses, the Committee may
direct the Trustee to make such payments from the assets in the Trust.
8.10 INDEMNIFICATION
DST shall indemnify each Committee member, the Plan Administrator, as
well as any employee of DST to whom the Committee has delegated any
responsibility or work under the Plan, against any liability or loss
sustained by reason of any act or failure to act made in good faith. Such
indemnification shall include attorney's fees and other costs and expenses
reasonably incurred in defense of any action brought by reason of any such
act or failure to act.
ARTICLE IX
TRUSTEE
9.1 ACCEPTANCE OF THE TRUST
The Trustee accepts the Trust created under the Plan and agrees to perform
the obligations imposed. The Trustee must provide a bond for the faithful
performance of its duties under the Trust to the extent required by the Act.
9.2 RECEIPT OF CONTRIBUTIONS
The Trustee is accountable to the Company for the funds contributed to it
by the Company, but does not have any duty to collect any contributions from
the Company or to see that funds deposited with it are deposited according to
the provisions of the Plan. DST (or the Committee on behalf of DST) shall
direct contributions and transfers from time to time to this Separate Trust or
to the Master Trust and the Trustee of the Separate Trust does not have any
duty under the Separate Trust with respect to contributions and transfers so
directed to the Master Trust.
9.3 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
The Trustee has full discretion and authority with regard to the investment
of the Separate Trust, except with respect to a Plan asset under the control or
direction of a properly appointed Investment Manager or with respect to a Plan
asset subject to Company, Participant or Committee direction of investment.
The Trustee must coordinate its investment policy with Plan financial needs as
communicated to it by the Committee. The Trustee is authorized and empowered,
but not by way of limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call options
traded on a national exchange, United States retirement plan bonds, corporate
bonds, debentures, convertible debentures, commercial paper, U.S. Treasury
bills, U.S. Treasury notes and other direct or indirect obligations of the
United States Government or its agencies, improved or unimproved real estate
situated in the United States, limited partnerships, insurance contracts of
any type, mortgages, notes or other property of any kind, real or personal,
and to buy or sell options on common stock on a nationally recognized
exchange with or without holding the underlying common stock, and to make any
other investments the Trustee deems appropriate, as a prudent man would do
under like circumstances with due regard for the purposes of this Plan. Any
investment made or retained by the Trustee in good faith is proper but must
be of a kind constituting a diversification considered by law suitable for
trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any cash held
in the Trust Fund in a bank account at reasonable interest. If the Trustee
is a bank or similar financial institution supervised by the United States or
by a State, this paragraph (b) includes specific authority to invest in any
type of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code Section 414(b)) at a reasonable rate of interest or in a
common trust fund (the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference) as described in
Code Section 584 which the Trustee (or its affiliate, as defined in Code
Section 1504) maintains exclusively for the collective investment of money
contributed by the bank (or the affiliate) in its capacity as trustee and
which conforms to the rules of the Comptroller of the Currency.
(c) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Trustee decides.
(d) To credit and distribute the Trust as directed by the Committee.
The Trustee is not obliged to inquire as to whether any payee or distributee
is entitled to any payment or whether the distribution is proper or within
the terms of the Plan, or as to the manner of making any payment or
distribution. The Trustee is accountable only to the Committee for any
payment or distribution made by it in good faith on the order or direction of
the Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(g) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in any
voting trusts, mergers, consolidations or liquidations, and to exercise or
sell stock subscriptions or conversion rights.
(h) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests in
oil, gas and other minerals; and to enter into operating agreements and to
execute division and transfer Orders.
(i) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories or in another
form as it may deem best, with or without disclosing the trust relationship.
(j) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(k) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a court
of competent jurisdiction.
(l) To file all tax returns required of the Trustee.
(m) To furnish to the Company and the Committee an annual statement of
account showing the condition of the Trust Fund and all investments,
receipts, disbursements and other transactions effected by the Trustee during
the Plan Year covered by the statement and also stating the assets of the
Trust held at the end of the Plan Year, which accounts are conclusive on all
persons, including the Company and the Committee, except as to any act or
transaction concerning which the Company and the Committee files with the
Trustee written exceptions or objections within 90 days after the receipt of
the accounts or for which the Act authorizes a longer period within which to
object.
(n) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee is
not obliged or required to do so unless indemnified to its satisfaction.
(o) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem necessary
to carry out the purposes of the Plan.
9.4 INVESTMENT IN GROUP TRUST FUND
(a) The Trustee, for collective investment purposes, may combine into
one trust fund the Trust created under this Plan with the Trustee created under
any other qualified retirement plan maintained by the Company. However, the
Trustee must maintain separate records of account for the assets of each Trust
in order to properly reflect each Participant's Account under the plan(s) in
which he or she is a Participant.
(b) DST specifically authorizes the Trustee to invest all or any portion
of the assets comprising the Trust Fund in any group trust fund, so designated
by the Committee on behalf of DST, which at the time of the investment provides
for pooling of the assets of plans qualified under Code Section 401(a). This
authorization applies solely to a group trust fund exempt from taxation under
Code Section 501(a) and the trust agreement of which satisfies the requirements
of Revenue Ruling 81-100. The provision of the group trust fund agreement, as
amended from time to time, are by this reference incorporated within this Plan
and Trust. The provisions of the group trust fund will govern any investment
of Plan assets in that pool.
9.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Committee, the Trustee shall, from time to time, in
accordance with the terms of the Plan, make payments out of the Trust Fund.
The Trustee shall not be responsible in any way for the application of such
payments.
9.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from time
to time be agreed upon in writing by DST and the Trustee. An individual
serving as Trustee who already receives full time pay from the Company shall
not receive compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from
the Trust Fund unless paid or advanced by the Company. All taxes of any kind
and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
9.7 RECORDS AND STATEMENTS
The records of the Trustee pertaining to the Plan must be open to the
inspection of the Company and the Committee at all reasonable times and may be
audited from time to time by any person or persons as the Company or Committee
may specify in writing. The Trustee must furnish the Company or Committee with
whatever information relating to the Trust Fund the Company or the Committee
considers necessary.
9.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to DST and the
Committee, at least thirty (30) days before its effective date, a written
notice of its resignation.
(b) DST may remove any Trustee by delivering to the Trustee, at least
thirty (30) days before its effective date, a written notice of its removal.
(c) Upon the death, resignation, incapacity or removal of any Trustee, a
successor may be appointed by DST; and such successor, upon accepting such
appointment in writing and delivering same to DST, shall, without further act,
become vested with all the estate, rights, powers, discretions, and duties of
his predecessor with like respect as if he were originally named as a Trustee
herein. Until such a successor is appointed, the remaining Trustee or Trustees
shall have full authority to act under the terms of the Plan. A successor
Trustee is not personally liable for any act or failure of any predecessor
Trustee, except as required by the Act.
(d) DST may designate one or more successors prior to the death,
resignation, incapacity or removal of a Trustee. In the event a successor is
so designated by DST and accepts such designation, the successor shall, without
further act, become vested with all the estate, rights, powers, discretions and
duties of his predecessor with the like effect as if he were originally named
as Trustee herein immediately upon the death, resignation, incapacity or
removal of his predecessor.
9.9 EMPLOYER SECURITIES
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" as that term is defined in the Act, provided, however, that the
Trustee shall not be permitted to acquire any qualifying Employer securities,
the fair market value of all qualifying Employer securities held by the Trustee
hereunder shall amount to more than 100% of the fair market value of all the
assets in the Trust Fund.
9.10 LIMITATION OF LIABILITY
The Trustee is not liable for the acts or omissions of any Investment
Manager or Managers appointed by the Committee, nor is the Trustee under any
obligation to invest or otherwise manage any assets of the Plan which are
subject to the management of a properly appointed Investment Manager. The
Committee, the Trustee and any Investment Manager may execute a letter
agreement as part of this Plan delineating the duties, responsibilities, and
liabilities of the Investment Manager with respect to any part of the Trust
Fund under the control of the Investment Manager.
ARTICLE X
TOP HEAVY PLAN PROVISIONS
10.1 TOP HEAVY PLAN REQUIREMENTS
If the Plan is or becomes top-heavy in any Plan Year, the provisions of
this Article X will supersede any conflicting provisions in the Plan.
10.2 TOP HEAVY DEFINITIONS
(a) "Key-Employee" shall mean any Employee or Former Employee (and the
beneficiaries of such Employee) who at any time during the determination period
was an officer of the Company who earned more than 1 1/2 times the dollar
limit on annual additions as established pursuant to Section 415(c)(1)(A) of
the Code, an owner (or considered an owner under Section 318 of the Code) of
one of the ten largest interests in the Company if such individual's
compensation exceeds the dollar limitation under Section 415(c)(1)(A) of the
Code (provided that if two Employees have the same interest in the Company, the
Employee with greater annual Compensation will be considered to have a larger
interest), a 5% owner of the Company, or a 1% owner of the Company who has an
annual compensation of more than $150,000. The determination period is the
Plan Year containing the determination date and the four Plan Years. The
determination of who is a Key Employee will be made in accordance with Section
416(i) of the Code and the Treasury Department Regulations thereunder.
(b) "Top-Heavy Plan" shall mean this Plan for any Plan Year, if any
of the following conditions exist:
(1) If the top-heavy ratio for this Plan exceeds 60% of this Plan,
is not part of any required aggregation group or permissive aggregation
group of plans; or
(2) If this Plan is a part of a required aggregation group of
plans but not part of a permissive aggregation group and the top-heavy
ratio for the group of plans exceeds 60%; or
(3) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the top-heavy ratio
for the permissive aggregation group exceeds 60%.
(c) "Top-Heavy Ratio" shall mean:
(1) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Company
has not maintained any defined benefit plan which during the five-year
period ending on the determination date has or has had accrued benefits,
the top-heavy ratio for the Plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the numerator of which is
the sum of the account balances of all Key Employees as of the
determination date (including any part of any account balance distributed
in the five-year period ending on the determination date), and the
denominator of which is the sum of all account balances (including any
part of any account balance distributed in the five-year period ending on
the determination date) both computed in accordance with Section 416 of
the Code and the regulations thereunder. Both the numerator and
denominator of the top-heavy ratio shall be adjusted to reflect any
contribution not actually made as of the determination date, but which is
required to be taken into account on that date under Section 416 of the
Code and the regulations thereunder.
(2) If the Company maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the Company
maintains or has maintained one or more defined benefit plans which
during the five-year period ending on the determination date has or has
had any accrued benefits, the top-heavy ratio for any required or
permissive aggregation group as appropriate is a fraction, the numerator
of which is the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees determined in accordance
with (1) above, and the present value of accrued benefits under the
aggregated defined benefit plan or plans for all Key Employees as of the
determination date, and the denominator of which is the sum of the
account balances under the aggregated defined contribution plan or plans
for all Participants determined in accordance with (i) above, and the
present value of accrued benefits under the defined benefit plan or plans
for all Participants as of the determination date, all determined in
accordance with Section 416 of the Code and the regulations thereunder.
Both the numerator and denominator of the top-heavy ratio are adjusted
for any distribution of an account balance or an accrued benefit made in
the five-year period ending on the determination date and any
contribution due but unpaid as of the determination date.
(3) For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with the 12-
month period ending on the determination date except as provided in
Section 416 of the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a Participant who (i) is not a Key Employee but who
was a Key Employee in a prior year or (ii) who has not received any
Compensation from the Company or any Affiliated Company maintaining the
Plan at any time during the five-year period ending on the determination
date will be disregarded. The calculation of the top-heavy ratio, and
the extent to which distributions, rollovers, and transfers are taken
into account will be made in accordance with Section 416 of the Code and
the regulations thereunder. Deductible Employee contributions will not
be taken into account for computing the top-heavy ratio. When
aggregating plans the value of account balances and accrued benefits will
be calculated with reference to the determination dates that fall within
the same calendar year.
(d) "Permissive Aggregation Group" shall mean the required aggregation
group of plans plus any other plan or plans of the Company which, when
considered as a group with the required aggregation group, would continue to
satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) "Required Aggregation Group" shall mean (A) each qualified plan of
the Company in which at least one Key Employee participates, and (B) any other
qualified plan of the Company which enables a plan described in (A) to meet the
requirements of Sections 401(a)(4) of the Code.
(f) "Determination Date" shall mean for any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the determination date shall mean the last day of that Year.
(g) "Valuation Date" shall mean, for purposes of establishing present
value to compute the top-heavy ratio, the mortality tables and interest rates
as used by the Pension Benefit Guaranty Corporation for calculation of
immediate annuities for plans terminating on or after the Determination Date.
(h) "Present Value" shall mean for purposes of establishing present
value to compute the top-heavy ratio, the mortality tables and interest rates
as used by the Pension Benefit Guaranty Corporation for calculation of
immediate annuities for plans terminating on or after the Determination Date.
10.3 MINIMUM ALLOCATION
(a) Except as otherwise provided in the last sentence of this
subparagraph (a), the Company contributions and forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be less than the lesser
of (1) three percent (3%) of such Participant's compensation, or (2) in the
case where the Company has no defined benefit plan which designates this Plan
to satisfy Section 401 of the Code, the largest percentage of Company
contributions and forfeitures, as a percentage of the first $200,000 of the Key
Employee's compensation, allocated on behalf of any Key Employee for that
year. he minimum allocation shall be determined without any regard to any
Social Security contribution and shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the year because of
(i) the Participant's failure to complete 1,000 Hours of Service (or any
equivalent provided in the Plan), or (ii) the Participant's failure to make
mandatory employee contributions to the Plan, or (iii) compensation less than a
stated amount. The foregoing provisions of this subparagraph (a) shall not
apply to any Participant who was not employed by the Company on the last day of
the Plan Year.
(b) No minimum contribution will be required (or the minimum
contribution will be reduced, as the case may be) for a Participant under this
Plan for any Plan Year if the Company maintains another qualified plan under
which a minimum benefit or contribution is being accrued or made for such year
in whole or in part for the Participant in accordance with the Code Section
416(c).
(c) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) may not be forfeited under Section
411(a)(3)(B) or 411(a)(3)(D) of the Code.
10.4 TOP-HEAVY VESTING REQUIREMENTS
As of the first day of any Plan Year in which the Plan has become a Top-
Heavy Plan, the vesting schedule in Section 5.2 shall be amended (with respect
to any Employee who is credited with at least one Hour of Service after the
Plan has become a Top-Heavy Plan) to read as follows:
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
Less than 2 0%
At least 2, but less than 3 20%
At least 3, but less than 4 40%
At least 4, but less than 5 60%
5 or more 100%
If in any subsequent year, the Plan ceases to be a Top-Heavy Plan, the
Committee shall revert to the vesting schedule in effect before this Plan
became a Top-Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.
ARTICLE XI
MISCELLANEOUS
11.1 PROHIBITION AGAINST ASSIGNMENT AND ALIENATION
All funds, rights, titles, interest or property rights of every nature
whatsoever belonging to, owned or held by or inuring to the benefit of the
Trustee shall at all times during which the Trustee has any interest therein
and until said rights shall have been completely transferred and delivered to
any Participant, be held by the Trustee free and clear from any voluntary or
involuntary alienation, encumbrance, assignment, pledge or participation in
any manner by any Participant, and all of said funds, rights, titles,
interest and property shall be deliverable by the Trustee only at the times
and in the manner set forth herein, and the interest of any Participant prior
to such distribution or payments shall be solely a right to enforce the
provisions of this Plan and the Trust created in connection herewith. The
interests or rights of the Participants shall not be subject to any right,
claim, demand, lien or judgment of any creditor of any Participant, nor be
subject nor liable to any process in law or in equity, including garnishment,
attachment, execution, receivership, bankruptcy proceedings or any order,
judgment or decree of any court diminishing the interest of said Participant
or other beneficiaries or affecting the receipt of benefits hereof in the
manner and at the time provided for. For purposes of this paragraph, the
creation, assignment, or recognition of a right to any Participant's benefit
pursuant to a Qualified Domestic Relations Order (as defined in Section
414(p) of the Code) shall not be considered a prohibited assignment or
alienation. A Qualified Domestic Relations Order is a judgment, decree or
order made pursuant to a state domestic relations law that relates to the
provision of child support, alimony payments or marital property rights, and
which creates or recognizes the existence of a right on behalf of the
Participant's spouse, former spouse, child or other dependent, to receive
Plan benefits payable to the Participant, and which does not alter the amount
or form of the Plan benefits.
11.2 COMPANY-EMPLOYEE RELATIONSHIPS
Nothing herein contained shall in any way be construed to limit or affect
the rights of the Company in its relationship with any Participant, or to
affect its rights to discharge any Participant at any time, either with or
without cause, or to increase or reduce the salary paid to any Participant, but
such relationship or employer and employee shall continue in the same manner as
though this Plan had never been adopted by the Company.
11.3 NOTICES TO INTERESTED PARTIES
Prior to submitting any request to the Internal Revenue Service for
advance determination of the initial or continuing qualified status of the
Plan and Trust as respects any Company, such Company shall notify each
employee who qualified as an interested party under Treasury Regulations
prescribed under Section 7476(b)(1) of the Code for the application for such
determination.
11.4 INTERNAL REVENUE SERVICE APPROVAL
Notwithstanding anything herein to the contrary, contributions to the Plan
are conditioned upon the initial qualification of the Plan under Code Section
401. If the Plan receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the Company
within one (1) year after such determination, provided the application for the
determination is made by the time prescribed by law for filing the Company's
return for the taxable year in which the Plan was adopted, or such later date
as the Secretary of the Treasury may prescribe.
11.5 LIABILITY FOR PAYMENTS
The Company shall have no liability for payments under the Plan or
administration of the Trust Fund except to make the contributions required by
Article III hereof. Persons entitled shall look solely to the Trust Fund for
any payments under the Plan.
11.6 GOVERNING LAW
Construction, validity and administration of the Plan and Trust shall be
governed by the Code, the Act, and Regulations issued hereunder, and, to the
extent not so governed, by the laws of the State of Missouri.
11.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as specifically provided in Section 11.4 and this Section
11.7, and otherwise specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of either, by power of
revocation or amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or income of the
Trust maintained pursuant to this Plan or any funds contributed thereto to be
used for, or diverted to, purposes other than the exclusive benefit of
Participants or their beneficiaries.
(b) In the event the Company shall make an excessive contribution under
a mistake of fact pursuant to Act Section 403(c)(2)(A), the Company may demand
repayment of such excessive contribution at any time within one (1) year
following the time of payment and the Trustee shall return such amount to the
Company within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Company but any losses
attributable thereto must reduce the amount so returned.
(c) Notwithstanding any provisions to the contrary, except Section
3.1(b), any contribution by the Company to the Trust Fund is conditioned upon
the deductibility of the contribution by the Company under the Code and, to the
extent any such deduction is disallowed, the Company may, within one (1) year
following the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such contribution within
one (1) year following the disallowance. Earnings of the Plan attributable to
the excess contribution may not be returned to the Company, but any losses
attributable thereto must reduce the amount so returned.
ARTICLE XII
PARTICIPATING COMPANIES
12.1 ADOPTION BY OTHER COMPANIES
Notwithstanding anything herein to the contrary, with the consent of DST,
any company may adopt this Plan and all of the provisions hereof, and
participate herein as a Company, by a properly executed document evidencing
said intent and will of such Company.
12.2 REQUIREMENTS OF PARTICIPATING COMPANIES
(a) Each such Company shall be required to use the same Trustee as
provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Companies, as well as all
increments thereof. However, the assets of the Plan shall, on an ongoing basis,
be available to pay benefits to all Participants and Beneficiaries under the
Plan without regard to the Company.
(c) Any expenses of the Trust which are to be paid by the Company or
borne by the Trust Fund shall be paid by each Company in the same proportion
that the total amount standing to the credit of all Participants employed by
such Company bears to the total standing to the credit of all Participants, or
such other manner determined by DST.
12.3 DESIGNATION OF AGENT
Each Company shall be deemed to be a part of this Plan; provided, however,
that with respect to all of its relations with the Trustee and Committee for
the purpose of this Plan, each Company shall be deemed to have designated
irrevocably DST as its agent.
12.4 PARTICIPATING COMPANY'S CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall be
allocated among all Participants of all Companies in accordance with the
provisions of this Plan. On the basis of the information furnished by the
Committee, the Trustee shall keep separate books and records concerning the
affairs of each Company hereunder and as to the accounts and credits of the
Employees of each participating Company.
12.5 PARTICIPATING COMPANY CONTRIBUTION FOR AFFILIATE
If any Company is prevented in whole or in part from making a contribution
to the Trust Fund which it would otherwise have made under the Plan by reason
of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it would otherwise
have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Company was so prevented from making may be made for
the benefit of the participating employees of such Company by other Companies
who are members of the same affiliated group within the meaning of Code Section
1504 to the extent of their current or accumulated earnings or profits, except
that such contribution by each such other Company shall be limited to the
proportion of its total current and accumulated earnings or profits remaining
after adjustment for its contribution to the Plan made without regard to this
paragraph which the total prevented contribution bears to the total current and
accumulated earnings or profits of all the Companies remaining after adjustment
for all contributions made to the Plan without regard to this Section. A
Company on behalf of whose employees a contribution is made under this Section
shall not reimburse the other contributing Companies.
12.6 AMENDMENT
Amendment of this Plan by DST shall be binding upon each Company.
12.7 DISCONTINUANCE OF PARTICIPATION
Any Company shall be permitted to discontinue or revoke its participation
in the Plan with the consent of DST. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Trust Fund assets allocable to the Participants of
such Company to such new Trustee as shall have been designated by such Company,
in the event that it has established a separate pension plan for its Employees
provided, however, that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 7.1(b). If no successor is designated, the Trustee
shall retain such assets for the Employees of said Company pursuant to the
provisions of the Trust. In no such event shall any part of the corpus or
income of the Trust as it relates to such Company be used for or diverted for
purposes other than that of the Plan and its Participants and Beneficiaries.
12.8 COMMITTEE'S AUTHORITY
The Committee shall have authority to make any and all necessary rules or
regulations, binding upon all Companies and all Participants and Beneficiaries,
to effectuate the purpose of this Article.
ARTICLE XIII
CHANGE OF CONTROL
13.1 DEFINITIONS OF "CHANGE OF CONTROL OF DST"
For purposes of this Plan, a "Change of Control of DST" shall be deemed to
have occurred if: (a) for any reason at any time less than seventy-five percent
(75%) of the members of the Board of Directors of DST shall be individuals who
fall into any of the following categories: (1) individuals who were members of
such Board on September 1, 1995; (2) individuals whose election, or nomination
for election by DST's stockholders, was approved by a vote of at least seventy-
five percent (75%) of the members of the Board then still in office who were
members of such Board on September 1, 1995; or (3) individuals whose election,
or nomination for election by DST's stockholders, was approved by a vote of at
least seventy-five percent (75%) of the members of the Board then still in
office who were elected in the manner described in (1) or (2) above; or (b) any
"person" (as such term is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) shall have become, according to a public announcement or
filing, without the prior approval of the Board of Directors of DST, the
"beneficial owner" (as defined in Rule 13(d)-3 under the Securities Exchange
Act of 1934) directly or indirectly, of securities of DST representing forty
percent (40%) or more (calculated in accordance with Rule 13(d)-3) of the
combined voting power of DST's then outstanding voting securities (such person
hereafter referred to as a "Major Stockholder"); or (c) the stockholders of DST
shall have approved a merger, consolidation or dissolution of DST or a sale,
lease, exchange or disposition of all or substantially all of DST's assets, or
a Major Stockholder shall have proposed any such transaction, unless such
merger, consolidation, dissolution, sale, lease, exchange or disposition shall
have been approved by at least seventy-five percent (75%) of the members of the
Board of Directors of DST who are individuals falling into any combination of
the following categories: (1) individuals who were members of such Board on
September 1, 1995; (2) individuals whose election, or nomination for election
by DST's stockholders, was approved by a vote of at least seventy-five percent
(75%) of the members of the Board then still in office who were members of such
Board on September 1, 1995; or (3) individuals whose election, or nomination
for election by DST's stockholders, was approved by a vote of at least seventy-
five percent (75%) of the members of the Board then still in office who were
elected in the manner described in (1) or (2) above.
13.2 PROVISIONS EFFECTIVE UPON CHANGE OF CONTROL OF DST
Upon a Change of Control of DST as defined in Section 13.1, notwithstanding
any other provision of this Plan to the contrary, the following provisions will
supersede the indicated sections and otherwise govern the operation of the Plan
from that point forward:
(a) Section 5.2(a), "Vesting Schedule," shall provide as follows: A
Participant's Account shall be one hundred percent (100%) nonforfeitable at all
times.
(b) Section 4.4(a), "Investment of Accounts," shall provide as follows:
A Participant shall have the right to direct the Trustee with respect to the
investment or reinvestment of the assets comprising the Participant's Account
only if the Trustee consents in writing to permit such direction. If the
Trustee does not consent to the Participant direction of investment, the
Trustee and each Participant shall execute a letter agreement as a part of this
Plan containing such conditions, limitations, and other provisions they deem
appropriate before the Trustee shall follow any Participant direction as
respects the investment or reinvestment of any part of the Participant's
Account. The Trustee shall not be liable for any loss, or by reason of any
breach, resulting from a Participant's direction of investment of any part of
his or her Account.
(c) Except for the right to amend the Plan pursuant to Section 7.1(a) in
order to qualify or maintain the qualification of the Plan under appropriate
provisions of Code Section 401(a), the Company shall not exercise its right to
amend the Plan pursuant to Section 7.1(a), discontinue or terminate the Plan
pursuant to Section 7.2, or transfer assets of or merge the Plan pursuant to
Section 7.3, without the prior written consent to such aforesaid action by
seventy-five percent (75%) of the Participants on a per capita basis.
13.3 RIGHT TO AMEND ARTICLE XIII PRIOR TO CHANGE OF CONTROL OF DST
The Board of Directors of DST, or any duly-authorized committee thereof,
reserves the right to amend or eliminate this Article XIII prior to the date of
a Change of Control of DST.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
DST SYSTEMS, INC.
By
----------------------------------------
Title
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UMB BANK, N.A.
By
----------------------------------------
Title
----------------------------------------
Sonnenschein Nath & Rosenthal
4520 Main Street
Kansas City, Missouri 64111
October 25, 1999
DST Systems, Inc.
333 West 11th Street, 5th Floor
Kansas City, Missouri 64105-1594
Re: Registration Statement on Form S-8 in connection with the
registration of 500,000 shares (the "Shares") of common stock,
$0.01 par value (the "Common Stock") of DST Systems, Inc. to be
issued under the DST Systems, Inc. 401(k) Profit Sharing Plan (the
"Plan").
Ladies and Gentlemen:
In connection with the preparation of the above-referenced Registration
Statement (the "Registration Statement"), which is being filed on or about
the date of this letter on behalf of DST Systems, Inc., a Delaware
corporation (the "Corporation"), you have asked us to provide you this
opinion letter pursuant to Item 8 of Form S-8 and in accordance with
subsection (b)(5) of Item 601 of Regulation S-K promulgated by the Securities
and Exchange Commission.
In connection with this opinion, we have examined and relied upon,
without further investigation, the following in connection with rendering the
opinions expressed herein: (a) the Plan, including all amendments thereto;
(b) the Registration Statement, and (c) such other documents, certificates,
records, and oral statements of public officials and the officers of the
Corporation as we deemed necessary for the purpose of rendering the opinions
expressed herein.
In our examinations, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity, accuracy and
completeness of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed,
or photostatic copies or by facsimile or electronic mail, and the
authenticity of the originals from which such copies, facsimiles, or
electronic transmissions were made. In our examination of documents executed
by persons, legal or natural, other than the Corporation, we have assumed
that such persons had the power, corporate or otherwise, to enter into and
perform all obligations thereunder and that such documents are valid and
binding.
Based upon and subject to our examination described herein and the
assumptions, exceptions, qualifications, and limitations set forth herein, we
are of the opinion that the Shares to be issued under the Plan will, when
issued pursuant to and in accordance with the Plan and upon receipt by the
Corporation of the consideration therefor, be validly issued, fully paid, and
non-assessable. The foregoing opinion is limited to shares that are
originally issued under the Plan.
This opinion letter is limited to the specific legal issues that it
expressly addresses, and no opinion may be inferred or implied beyond the
matters expressly set forth herein. We express no opinion as to the law of
any jurisdiction other than the General Corporation Law of the State of
Delaware, as amended. We are not admitted to the Delaware Bar. In
expressing our opinions set forth herein, we have reviewed and relied upon,
without further investigation, such laws as published in generally available
sources.
We consent to the filing of this opinion letter, or a reproduction
thereof, as an exhibit to the Registration Statement. In giving such
consent, however, we are not admitting that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules or regulations promulgated by the Securities
and Exchange Commission thereunder.
This opinion letter is rendered on the date set forth above, and we have
no continuing obligation hereunder to inform you of changes in the applicable
law or the facts after such date or facts of which we have become aware after
the date hereof, even though such changes or facts could affect our opinions
expressed herein.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
/s/ John F. Marvin
By: John F. Marvin
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 25, 1999 relating to the
financial statements of DST Systems, Inc., which appears in DST Systems,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
October 25, 1999
