<PAGE> 1
As filed with the Commission on December 30, 1998 File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------
ORBITAL SCIENCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-1209561
- ------------------------------ -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
21700 Atlantic Boulevard
Dulles, Virginia 20166
-----------------------
(Address of principal executive offices, including zip code)
DEFERRED SALARY & PROFIT SHARING PLAN FOR EMPLOYEES OF
ORBITAL SCIENCES CORPORATION (1998 RESTATEMENT)
MAGELLAN SYSTEMS' RETIREMENT SAVINGS PLAN (1998 RESTATEMENT)
----------------------------------------------------------------------
(Full title of the plans)
Leslie C. Seeman, Esq.
Senior Vice President, General Counsel and Secretary
Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
(703) 406-5000
--------------
(Name, address and telephone number of agent for service)
--------------
Copy to:
Eve N. Howard, Esq.
Hogan & Hartson L.L.P.
555 13th Street, N.W.
Washington, D.C. 20004-1109
(202)637-5600
-------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Title of Amount Proposed maximum Proposed Amount of
Securities to be offering maximum registration
to be registered(1) price per aggregate fee
registered share(2) offering
price(2)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 500,000 $39.22 $19,610,000 $5,452
par value, $.01
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(c), this registration statement covers an
indeterminate amount of interests to be offered or sold pursuant to each
of the Deferred Salary and Profit Sharing Plan for Employees of Orbital
Sciences Corporation (1998 Restatement)(the "Orbital Plan") and the
Magellan Systems' Retirement Savings Plan (1998 Restatement) (the
"Magellan Plan").
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933, based on the average
of the high and low prices of the Common Stock, par value $.01 per
share, of Orbital Sciences Corporation, reported on the New York Stock
Exchange on December 23, 1998.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in this Part I will
be sent or given to employees participating in each of the Orbital Plan and the
Magellan Plan as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with the instructions to Part I of
Form S-8, such documents will not be filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities
Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Orbital Sciences Corporation (the "Registrant" or the "Company")
hereby incorporates the following documents, all of which have previously been
filed with the Securities and Exchange Commission, herein by reference:
a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
b) The Company's Quarterly Report on Form 10-Q for the quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998;
and
c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed under
Section 12 of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), and all amendments or reports
filed for the purpose of updating such description.
All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in
any subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
The Orbital Plan and the Magellan Plan (collectively, the "Plans")
hereby incorporate by reference into this Registration Statement all documents
and reports filed by the Plans subsequent to the date hereof pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities remaining unsold. \
Item 4. Description of Securities.
Not required.
Item 5. Interests of Named Experts and Counsel.
Not required.
Item 6. Indemnification of Directors and Officers.
The Company is a Delaware corporation. Section 145 of the Delaware
General Corporation Law sets forth provisions that define the extent to which a
corporation organized under the laws of Delaware may indemnify directors,
officers, employees or agents. Section 145 provides as follows:
(a) A corporation shall have 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, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that
the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts
paid in
<PAGE> 3
settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in
good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe the person's conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith
and in a manner which the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe
that the person's conduct was unlawful.
(b) A corporation shall have 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 or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of
such action or suit if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine 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 the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b)of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee
or agent is proper in the circumstances because the person has met
the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made, with respect
to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not
parties to such action, suit or proceeding even though less than a
quorum, or (2) by a committee of such directors designated by majority
vote of such directors, even though less than a quorum, or (3) if
there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative,
or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the
corporation as authorized in this Section. Such expenses (including
attorneys' fees) incurred by former directors and officers or other
employees and agents may be so paid upon such terms and conditions, if
any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section
shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled
under any by-
<PAGE> 4
law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
(h) For purposes of this Section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority
to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of
such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as such person
would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner
such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
Paragraph Ten of the Company's Restated Certificate of Incorporation
provides that the Company shall, to the maximum extent permitted by Delaware
law, indemnify and, upon request, advance expenses to any person:
...who is or was a party or is threatened to be made a party to
any threatened, pending or completed action, suit, proceeding or
claim, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was or has agreed to be a
director or officer of this Corporation or while a director or officer
is or was serving at the request of this Corporation as a director,
officer, partner, trustee, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, against expenses
(including attorney's fees and expenses), judgments, fines, penalties
and amount paid in settlement incurred in connection with the
investigation, preparation to defend or defense of such action, suit,
proceeding or claim, provided, however, that the foregoing shall not
require this Corporation to indemnify or advance expenses to any
person in connection with any action, suit, proceeding, claim or
counterclaim initiated by or on behalf of such person. Such
indemnification shall inure to the benefit of the heirs and legal
representatives of such person. Any person seeking indemnification
under this Paragraph 10
<PAGE> 5
shall be deemed to have met the standard of conduct required for such
indemnification unless the contrary shall be established.
Section 102(b)(7) of the Delaware General Corporation Law permits
corporations to eliminate or limit the personal liability of their directors by
adding to the Certificate of Incorporation a provision eliminating or limiting
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director for (a) any
breach of any director's duty of loyalty to the corporation or its
stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) payment of dividends
or repurchases or redemptions of stock other than from lawfully available
funds, or (d) any transaction from which the director derived an improper
personal benefit. Paragraph Nine of the Company's Restated Certificate of
Incorporation provides that no director of the Company shall be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, except to the extent that exculpation from liability is not
permitted under the Delaware General Corporation Law as in effect at the time
such liability is determined.
In addition, the Company has entered into substantially identical
indemnification agreements with each of its Directors and Executive Officers
and certain other officers. The Company has agreed, to the full extent
permitted by the Delaware General Corporation Law, as amended from time to
time, to indemnify each indemnitee against all loss and expense incurred by the
indemnitee because he was, is or is threatened to be made a party to any
completed, pending or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he was a
director, officer, employee or agent of the Company or any of its affiliates,
or because the Company has a right to judgment in its favor because of his
position with the Company or any of its affiliates. The indemnitee will be
indemnified so long as he acted in good faith and in a manner reasonably
believed by him to be in or not opposed to the Company's best interests. The
agreement further provides that the indemnification thereunder is not exclusive
of any other rights the indemnitee may have under the Company's Restated
Certificate of Incorporation, By-Laws or any agreement or vote of stockholders,
nor may the Restated Certificate of Incorporation or By-Laws be amended to
effect adversely the rights of any indemnitee.
Item 7. Exemption from Registration Claimed.
Not applicable.
<PAGE> 6
Item 8. Exhibits.
The following exhibits are filed as a part of this Registration
Statement.
<TABLE>
<CAPTION>
Exhibit
No._ Description
------- -----------
<S> <C> <C>
4.1 Deferred Salary & Profit Sharing Plan
for Employees of Orbital Sciences
Corporation (1998 Restatement)
4.2 Magellan Systems' Retirement Savings Plan
(1998 Restatement)
5 The registrant hereby undertakes to submit
the Orbital Plan and the Magellan Plan and
any amendments thereto to the Internal Revenue
Service ("IRS") in a timely manner and to
make all changes required by the IRS in order
to qualify the plans.
23 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney (contained on the
Signature Page of this Registration
Statement).
</TABLE>
<PAGE> 7
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(A) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(B) 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
(C) 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)(A) and (a)(1)(B) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act and each filing of the Plans' annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Company certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of Loudoun, the Commonwealth of Virginia, on
this 30th day of December, 1998.
ORBITAL SCIENCES CORPORATION
By /s/ David W. Thompson
---------------------
David W. Thompson, Chairman
of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
Orbital Sciences Corporation, plan administrator of the Deferred Salary & Profit
Sharing Plan for Employees of Orbital Sciences Corporation (1998 Restatement),
has duly caused this Registration Statement to be signed on behalf of the
Orbital Plan by the undersigned, thereunto duly authorized, in the County of
Loudoun, Commonwealth of Virginia on December 30, 1998.
Deferred Salary & Profit
Sharing Plan for Employees of
Orbital Sciences Corporation (1998
Restatement)
By: Orbital Sciences Corporation,
Plan Administrator
By: /s/ David W. Thompson
--------------------
David W. Thompson
President, Chief Executive Officer
and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933,
Orbital Sciences Corporation, plan administrator for the Magellan Systems'
Retirement Savings Plan (1998 Restatement) has duly caused this Registration
Statement to be signed on behalf of the Magellan Plan by the undersigned,
thereunto duly authorized, in the County of London, Commonwealth of Virginia on
December 30, 1998.
Magellan Systems' Retirement Savings
Plan (1998 Restatement)
By: Orbital Sciences Corporation,
Plan Administrator
By: /s/ DAVID W. THOMPSON
---------------------------------
David W. Thompson, President,
Chief Executive Officer and
Chairman
Each person whose signature appears below hereby constitutes
and appoints David W. Thompson, Bruce W. Ferguson and Leslie C. Seeman, or any
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for them and in their name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below on the dates indicated by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C>
/s/ DAVID W. THOMPSON Chairman of the Board, Chief Executive 12/30/98
- ------------------------------------------------------- Officer and Director (Principal Executive ------------
DAVID W. THOMPSON Officer)
/s/ JEFFREY V. PIRONE Executive Vice President and Chief Financial 12/30/98
- ------------------------------------------------------- Officer (Principal Financial Officer) ------------
JEFFREY V. PIRONE
/s/ MICHAEL P. KEEGAN Vice President and Controller 12/30/98
- ------------------------------------------------------- ------------
MICHAEL P. KEEGAN
/s/ FRED C. ALCORN Director 12/30/98
- ------------------------------------------------------- ------------
FRED C. ALCORN
/s/ KELLY H. BURKE Director 12/30/98
- ------------------------------------------------------- ------------
KELLY H. BURKE
/s/ BRUCE W. FERGUSON Director 12/30/98
- ------------------------------------------------------- ------------
BRUCE W. FERGUSON
/s/ DANIEL J. FINK Director 12/30/98
- ------------------------------------------------------- ------------
DANIEL J. FINK
/s/ LENNARD A. FISK Director 12/30/98
- ------------------------------------------------------- ------------
LENNARD A. FISK
Director
- ------------------------------------------------------- ------------
JACK L. KERREBROCK
Director
- ------------------------------------------------------- ------------
DOUGLAS S. LUKE
/s/ JOHN L. MCLUCAS Director 12/30/98
- ------------------------------------------------------- ------------
JOHN L. MCLUCAS
Director
- ------------------------------------------------------- ------------
JANICE I. OBUCHOWSKI
/s/ FRANK L. SALIZZONI Director 12/30/98
- ------------------------------------------------------- ------------
FRANK L. SALIZZONI
/s/ HARRISON H. SCHMITT Director 12/30/98
- ------------------------------------------------------- ------------
HARRISON H. SCHMITT
/s/ JAMES R. THOMPSON Director 12/30/98
- ------------------------------------------------------- ------------
JAMES R. THOMPSON
/s/ SCOTT L. WEBSTER Director 12/30/98
- ------------------------------------------------------- ------------
SCOTT L. WEBSTER
</TABLE>
<PAGE> 9
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
No._ Description
------- -----------
<S> <C> <C>
4.1 Deferred Salary & Profit Sharing Plan
for Employees of Orbital Sciences
Corporation (1998 Restatement)
4.2 Magellan Systems' Retirement Savings
Plan (1998 Restatement).
23 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney (contained on the
Signature Page of this Registration
Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
DEFERRED SALARY & PROFIT SHARING PLAN
FOR
EMPLOYEES OF ORBITAL SCIENCES CORPORATION
(1998 RESTATEMENT)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. INTRODUCTION................................................................................................. 1
1.1. In General............................................................................................ 1
1.2. Defined Terms......................................................................................... 1
ARTICLE 2. DEFINITIONS.................................................................................................. 2
2.1. "Accounts".............................................................................................. 2
2.2. "Administrator" or "Plan Administrator"................................................................. 2
2.3. "Affiliated Employer"................................................................................... 2
2.4. "Annuity"............................................................................................... 2
2.5. "Beneficiary"........................................................................................... 2
2.6. "Board of Directors".................................................................................... 3
2.7. "Code".................................................................................................. 3
2.8. "Compensation".......................................................................................... 3
2.9. "Contribution Agreement"................................................................................ 3
2.10. "Disabled "............................................................................................ 4
2.11. "Discretionary Contribution"........................................................................... 4
2.12. "Elective Contribution"................................................................................ 4
2.13. "Eligible Employee..................................................................................... 4
2.14. "Employee"............................................................................................. 4
2.15. "Employee Contribution"................................................................................ 4
2.16. "Employer"............................................................................................. 4
2.17. "ERISA"................................................................................................ 4
2.18. "Highly Compensated Employee".......................................................................... 4
2.19. "Hour of Service"...................................................................................... 5
2.20. "Matching Contribution"................................................................................ 6
2.21. "Normal Retirement Age"................................................................................ 6
2.22. "Participant".......................................................................................... 6
2.23. "Plan"................................................................................................. 6
2.24. "Plan Sponsor"......................................................................................... 6
2.25. "Plan Year"............................................................................................ 6
2.26. "Qualified Domestic Relations Order"................................................................... 6
2.27. "Qualified Nonelective Contribution"................................................................... 6
2.28. "Regulation"........................................................................................... 6
2.29. "Rollover Contribution"................................................................................ 6
2.30. "Section".............................................................................................. 7
2.31. "Trust"................................................................................................ 7
2.32. "Trustee".............................................................................................. 7
2.33. "Valuation Date"....................................................................................... 7
2.34. "Year of Service for Participation".................................................................... 7
2.35. "Year of Service for Vesting".......................................................................... 7
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE 3. ELIGIBILITY AND PARTICIPATION.................................................................................. 8
3.1. Eligibility............................................................................................. 8
3.2. Duration of Participation............................................................................... 8
3.3. Reclassification of employment status................................................................... 8
ARTICLE 4. CONTRIBUTIONS................................................................................................ 9
4.1. Elective Contributions and Employee Contributions..................................................... 9
4.2. Form and Manner of Elections.......................................................................... 9
4.3. Matching Contributions................................................................................ 9
4.4. Discretionary Contributions........................................................................... 9
4.5. Qualified Nonelective Contributions................................................................... 10
4.6. Rollover Contributions................................................................................ 10
4.7. Crediting of and Time for Making Contributions........................................................ 10
4.8. Certain Limits Apply.................................................................................. 10
4.9. Return of Contributions............................................................................... 11
4.10. Establishment of Trust................................................................................ 11
ARTICLE 5. PARTICIPANT ACCOUNTS........................................................................................ 12
5.1. Accounts............................................................................................. 12
5.2. Adjustment of Accounts............................................................................... 12
5.3. Investment of Accounts............................................................................... 12
ARTICLE 6. VESTING OF ACCOUNTS........................................................................................... 14
6.1. Immediate Vesting of Certain Accounts................................................................ 14
6.2. Deferred Vesting of Other Accounts................................................................... 14
6.3. Special Vesting Rules................................................................................ 14
6.4. Distribution of Less Than Entire Vested Percentage................................................... 14
6.5. Changes in Vesting Schedule.......................................................................... 14
6.6. Forfeitures.......................................................................................... 15
ARTICLE 7. DISTRIBUTIONS AND WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE.............................................. 17
7.1. Employee Contributions............................................................................... 17
7.2. Hardship Withdrawals................................................................................. 17
7.3. Withdrawals After Age 59 1/2......................................................................... 18
7.4. Withdrawals on Account of Disability................................................................. 19
7.5. Spousal Consent...................................................................................... 19
7.6. Distributions Required by a Qualified Domestic Relations Order....................................... 19
7.7. Loans to Participants................................................................................ 19
7.8. Loan Procedures...................................................................................... 20
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE.............................................................. 21
8.1. Separation from Service for Reasons Other Than Death................................................. 21
8.2. Time of Distributions................................................................................ 21
8.3. Certain Distribution Options Protected............................................................... 21
8.4. Distributions After a Participant's Death............................................................ 21
8.5. Designation of Beneficiary........................................................................... 22
8.6. Certain Dispositions................................................................................. 23
8.7. Optional Direct Transfer of Eligible Rollover Distributions.......................................... 23
ARTICLE 9. ADMINISTRATION.............................................................................................. 24
9.1. Administrator........................................................................................ 24
9.2. Powers of Administrator.............................................................................. 24
9.3. Effect of Interpretation or Determination............................................................ 25
9.4. Nondiscriminatory Exercise of Authority.............................................................. 25
9.5. Reliance on Tables, etc.............................................................................. 25
9.6. Claims and Review Procedures......................................................................... 25
9.7. Indemnification of Designated Representatives, Administrator and Assistants.......................... 25
9.8. Payment of Plan expenses............................................................................. 26
9.9. Correcting operational defects....................................................................... 26
ARTICLE 10. AMENDMENT AND TERMINATION.................................................................................. 27
10.1. Amendment........................................................................................... 27
10.2. Termination......................................................................................... 27
10.3. Distributions upon Termination of the Plan.......................................................... 27
10.4. Merger or Consolidation of Plan; Transfer of Plan Assets............................................ 27
10.5. Plan Mergers and Spinoffs........................................................................... 28
10.6. Treatment of Certain Transferred Participants....................................................... 29
ARTICLE 11. LIMITS ON CONTRIBUTIONS.................................................................................... 31
11.1. Code Section 404 Limits............................................................................. 31
11.2. Code Section 415 Limits............................................................................. 31
11.3. Code Section 402(g) Limits.......................................................................... 32
11.4. Code Section 401(k)(3) Limits........................................................................ 33
11.5. Code Section 401(m) Limits........................................................................... 37
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS............................................................................... 42
12.1. Provisions to apply................................................................................. 42
12.2. Minimum Contribution................................................................................ 42
12.3. Special Vesting Schedule............................................................................ 43
12.4. Adjustment to Limitation on Benefits................................................................ 43
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
12.5. Definitions......................................................................................... 43
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE 13. MISCELLANEOUS.............................................................................................. 47
13.1. Exclusive Benefit Rule.............................................................................. 47
13.2. Limitation of Rights................................................................................ 47
13.3. Nonalienability of Benefits......................................................................... 47
13.4. Veterans' reemployment and benefit rights........................................................... 47
13.5. Governing Law....................................................................................... 47
</TABLE>
-v-
<PAGE> 7
ARTICLE 1. INTRODUCTION.
1.1. IN GENERAL. This document amends, restates and replaces the
provisions of the Deferred Salary & Profit Sharing Plan for Employees of
Orbital Sciences Corporation (1994 Restatement). Except as otherwise provided
in the Plan, the provisions of this document are generally effective as of
January 1, 1998. Any provision of the Plan which is required by law to be
effective as of a date prior to January 1, 1998 is effective as of such date.
The rights to benefits of an individual who was a Participant in the Plan prior
to January 1, 1998 and who is not credited with an Hour of Service after that
date will be determined in accordance with the provisions of the Plan as in
effect from time to time prior to January 1, 1998. The Plan and its related
Trust are intended to qualify as a profit-sharing plan and trust under Code
sections 401(a) and section 501(a), and the cash or deferred arrangement
forming part of the Plan is intended to qualify under Code section 401(k). The
Plan is also intended to be an ERISA section 404(c) plan. The provisions of the
Plan and Trust shall be construed and applied accordingly. The purpose of the
Plan is to provide benefits to Participants in a manner consistent and in
compliance with such Code sections and Title I of ERISA.
1.2. DEFINED TERMS. All capitalized terms used in the following
provisions of the Plan have the meanings given them under the Article entitled
"Definitions."
-1-
<PAGE> 8
ARTICLE 2. DEFINITIONS.
Wherever used in the Plan, the following terms have the following
meanings:
2.1. "ACCOUNTS" mean, for any Participant, the accounts established
under the Plan to which contributions made for the Participant's benefit, and
any allocable income, expense, gain and loss, are allocated. References to a
Participant's Elective Contribution Account, Matching Contribution Account,
Discretionary Contribution Account, Employee Contribution Account, and Rollover
Contribution Account, respectively, refer to those Accounts established for a
Participant to which the respective contributions are allocated. References to
a Participant's Qualified Nonelective Contribution Account refer to the Account
to which Qualified Nonelective Contributions made on behalf of the Participant
are allocated. References to a Participant's Employer Stock Account refer to
that portion, if any, of the Participant's Account which is invested in shares
of the Plan Sponsor's stock. Such Participant's Employer Stock Account shall be
credited with dividends paid, if any.
2.2. "ADMINISTRATOR" OR "PLAN ADMINISTRATOR" means the Plan Sponsor
or such other person, committee of persons or entities appointed by the Plan
Sponsor to serve as Plan Administrator. The Administrator shall also have the
authority to appoint persons and entities to act as designated representatives
on its behalf in administering the Plan pursuant to its provisions.
2.3. "AFFILIATED EMPLOYER" means (a) the Plan Sponsor, (b) any
corporation that is a member of a controlled group of corporations (as defined
in Code section 414(b)) of which the Plan Sponsor is also a member, (c) any
trade or business, whether or not incorporated, that is under common control
(as defined in Code section 414(c)) with the Plan Sponsor, (d) any trade or
business that is a member of an affiliated service group (as defined in Code
section 414(m)) of which the Plan Sponsor is also a member, or (e) to the
extent required by Regulations issued under Code section 414(o), any other
organization; provided, that the term "Affiliated Employer" shall not include
any corporation or unincorporated trade or business prior to the date on which
such corporation, trade or business satisfies the affiliation or control tests
of (b), (c) (d) or (e) above. In identifying any "Affiliated Employers" for
purposes of the Code section 415 limits, the definitions in Code sections
414(b) and (c) shall be modified as provided in Code section 415(h).
2.4. "ANNUITY" means a series of payments made over a specified
period of time which, for a fixed annuity are, of equal, specified amounts, and
for a
-2-
<PAGE> 9
variable annuity increase or decrease to reflect changes in investment
performance of the underlying portfolio.
2.5. "BENEFICIARY" means any person entitled to receive benefits
under the Plan upon the death of a Participant.
2.6. "BOARD OF DIRECTORS" means the Plan Sponsor's board of
directors or other comparable governing body, or persons, committees or
entities delegated by the Board with authority to act on its behalf.
2.7. "CODE" means the Internal Revenue Code of 1986, as amended
from time to time. Reference to any section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such section or subsection, and also includes
reference to any Regulation issued pursuant to or with respect to such section
or subsection.
2.8. "COMPENSATION" means, except as otherwise specifically
provided in the Plan, the amount required to be reported for the Participant on
Form W-2 as wages for federal income tax purposes, but (i) increased by any
amounts that would have been received by the individual as wages from an
Affiliated Employer but for an election under Code sections 125 and 401(k) and
(ii) decreased by the following amounts to the extent they are included as
wages:
(A) cash awards or other cash payments made
under any stock option plan maintained by an Affiliated
Employer;
(B) cash payments made under a bonus,
incentive or similar plan in lieu of the distribution of
stock;
(C) payments under supplemental unemployment
plans or other severance arrangements and termination
allowances of an Affiliated Employer;
(D) reimbursement by an Affiliated Employer
for expenses, including without limitation, moving
expenses, travel pay, and tax assistance payments;
(E) cash payments received under an
Affiliated Employer's flexible benefits program; and
(F) any other prizes, merchandise awards,
special incentive or cash bonus awards from an
Affiliated Employer.
-3-
<PAGE> 10
Compensation shall include only that Compensation which is actually paid to the
Participant during the applicable Plan Year. A Participant's Compensation shall
be limited for all purposes under the Plan to the dollar amount determined from
time to time under section 401(a)(17) of the Code. The Administrator may
prescribe such rules or procedures as it determines appropriate to apply said
limit consistent with the requirements of Code section 401(a)(17) and the
Regulations promulgated thereunder.
2.9. "CONTRIBUTION AGREEMENT" means an agreement entered into
between a Participant and his or her Employer pursuant to which Elective and/or
Employee Contributions shall be made for the Participant's benefit.
2.10. "DISABLED " means a Participant's incapacity to engage in any
substantial gainful activity because of a medically determinable physical or
mental impairment which can be expected to result in death, or to be of long,
continued and indefinite duration. Such determination shall be made by the
Administrator with the advice of competent medical authority. All Participants
in similar circumstances will be treated alike.
2.11. "DISCRETIONARY CONTRIBUTION" means a contribution (other than
a Qualified Nonelective Contribution) made for the benefit of a Participant by
the Employer in the discretion of the Plan Sponsor.
2.12. "ELECTIVE CONTRIBUTION" means a pretax contribution made to
the Plan for the benefit of a Participant pursuant to a Contribution Agreement.
2.13. "ELIGIBLE EMPLOYEE" means any Employee who is employed by the
Employer, other than (a) an Employee covered by a collective bargaining
agreement, unless such agreement specifically provides for participating in the
Plan, (b) an Employee at one or more employment units (i.e., an identifiable
division, subsidiary or affiliate, subdivision, plant, location, or group of
Employees) determined by the Plan Sponsor to be ineligible to participate in
the Plan, (c) an Employee employed on a casual or temporary basis, (d) an
Employee who is a foreign national designated by the Plan Sponsor as ineligible
to participate in the Plan and (e) a leased employee within the meaning of Code
section 414(n).
2.14. "EMPLOYEE" means any individual employed by an Affiliated
Employer, including any leased employee. but only to the extent and for the
purposes required under Code section 414(n).
2.15. "EMPLOYEE CONTRIBUTION" means the voluntary after-tax
contribution made by a Participant under the Plan.
-4-
<PAGE> 11
2.16. "EMPLOYER" means Orbital Sciences Corporation (other than the
Chandler Operation) and any successor organization to such Employer which
elects to continue the Plan and such other Affiliated Employer that shall adopt
the Plan with the approval of the Plan Sponsor.
2.17. "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended, and any successor statute or statutes of
similar import.
2.18. "HIGHLY COMPENSATED EMPLOYEE" means an employee of an
Affiliated Employer who is a "highly compensated employee" within the meaning
of Code section 414(q), the provisions of which are expressly incorporated
herein.
-5-
<PAGE> 12
2.19. "HOUR OF SERVICE" means, with respect to any Employee,
(a) Each hour for which the Employee is paid or
entitled to payment for the performance of duties for an Affiliated
Employer, each such hour to be credited to the Employee for the
computation period in which the duties were performed;
(b) Each hour for which the Employee is directly or
indirectly paid or entitled to payment by any Affiliated Employer
(including payments made or due from a trust fund or insurer to
which the Affiliated Employer contributes or pays premiums) on
account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty, or leave of absence,
each such hour to be credited to the Employee for the computation
period in which such period of time occurs, subject to the
following rules;
(i) No more than 501 Hours of Service shall
be credited under this paragraph (b) to the Employee on
account of any single continuous period during which
the Employee performs no duties;
(ii) Hours of Service shall not be credited
under this paragraph (b) to an Employee for a payment
which solely reimburses the Employee for medically
related expenses incurred by the Employee, or which is
made or due under a plan maintained solely for the
purpose of complying with applicable worker's
compensation, unemployment compensation or disability
insurance laws; and
(iii) If the period during which the
Employee performs no duties falls within two or more
computation periods, and if the payment made on account
of such period is not calculated on the basis of units
of time, the number of Hours of Service credited with
respect to such period shall be allocated between not
more than the first two such periods based on the
amount of the payment divided by the Employee's most
recent hourly rate of Compensation before the period
during which no duties were performed;
(c) Each hour not counted under paragraph (a) or (b)
for which back pay, irrespective of mitigation of damages, has been
either awarded or agreed to be paid by any Affiliated Employer,
each such hour to be credited to the Employee for the computation
period to which the award or agreement for back pay pertains,
provided that crediting of Hours of Service under this paragraph
(c) with respect to periods
-6-
<PAGE> 13
described in paragraph (b) above shall be subject to the
limitations and special rules set forth in clauses (i), (ii) and
(iii) of paragraph (b); and
(d) Each noncompensated hour while an Employee during a
period of absence from any Affiliated Employer (i) in the armed
forces of the United States to the extent such hour is required to
be credited under Code section 414(u), and (ii) on family leave to
the extent such hour is required to be credited under the Family
Medical Leave Act of 1994.
Hours of Service to be credited to an Employee under (a), (b) and (c) above will
be calculated and credited pursuant to paragraphs (b) and (c) of Section
2530.200b-2 of the Department of Labor Regulations, which are incorporated
herein by reference. The Hours of Service to be credited to an Employee during a
period described in (d) above will be determined by the Administrator with
reference to the individual's most recent normal work schedule, or at the rate
of eight Hours per day in the event the Administrator is unable to establish
such schedule.
2.20. "MATCHING CONTRIBUTION" means a contribution made for the
benefit of a Participant under the Plan on account of the Participant's
Elective Contribution.
2.21. "NORMAL RETIREMENT AGE" means age 65.
2.22. "PARTICIPANT" means each Eligible Employee who participates
in the Plan pursuant to its provisions.
2.23. "PLAN" means The Deferred Salary & Profit Sharing Plan for
Employees of Orbital Sciences Corporation.
2.24. "PLAN SPONSOR" means Orbital Sciences Corporation. The
"Plan Sponsor" may delegate any of its responsibilities under the Plan to any
person, committee of persons or entity.
2.25. "PLAN YEAR" means the calendar year.
2.26. "QUALIFIED DOMESTIC RELATIONS ORDER" means any judgment,
decree or order (including approval of a property settlement agreement) which
constitutes a "qualified domestic relations order" within the meaning of Code
section 414(p). A judgment, decree or order shall not be considered not to be a
Qualified Domestic Relations Order merely because it requires a distribution to
an
-7-
<PAGE> 14
alternate payee (or the segregation of accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled to a distribution
under the Plan.
2.27. "QUALIFIED NONELECTIVE CONTRIBUTION" means a contribution
made in the discretion of the Plan Sponsor which is designated by the Plan
Sponsor as a Qualified Nonelective Contribution.
2.28. "REGULATION" means a regulation issued by the Department of
Treasury, including any final regulation, proposed regulation, temporary
regulation, as well as any modification of any such regulation contained in any
notice, revenue procedure, or similar pronouncement issued by the Internal
Revenue Service.
2.29. "ROLLOVER CONTRIBUTION" means a contribution made by a
Participant which satisfies the requirements for rollover contributions as set
forth in the Plan.
2.30. "SECTION" means a section of the Plan.
2.31. "TRUST" means The Orbital Sciences Corporation Savings Trust
established in conjunction with the Plan, together with any and all amendments
thereto.
2.32. "TRUSTEE" mean the person or persons who are at any time the
acting Trustee under the Trust.
2.33. "VALUATION DATE" means such day or days during the Plan Year
as specified by the Administrator.
2.34. "YEAR OF SERVICE FOR PARTICIPATION" means each 12 consecutive
month period, beginning with the Employee's employment commencement date with
an Affiliated Employer and each anniversary thereof, during which an Employee
is credited with 1000 or more Hours of Service.
2.35. "YEAR OF SERVICE FOR VESTING" means each calendar year during
which an Employee is credited with 1000 or more Hours of Service. A "Year of
Service for Vesting" will also mean each year of service, if any, credited to
an Employee by the Administrator on a nondiscriminatory basis for service
rendered by the Employee to a prior employer.
-8-
<PAGE> 15
ARTICLE 3. ELIGIBILITY AND PARTICIPATION.
3.1. ELIGIBILITY. Each Eligible Employee shall become a Participant
as of the date he or she first meets the following requirements:
(a) is scheduled to work 1000 hours during a
12-consecutive month period, or is not so scheduled but in fact
completes a Year of Service for Participation, and
(b) attains age 21.
3.2. DURATION OF PARTICIPATION. An individual who has become a
Participant under the Plan will remain a Participant for as long as an Account
is maintained under the Plan for his or her benefit, or until his or her death,
if earlier. Notwithstanding the preceding sentence and unless otherwise
expressly provided for under the Plan, no contributions shall be made, nor
shall any forfeitures be allocated with respect to a Participant who is not an
Eligible Employee. In the event a Participant remains an Employee but ceases to
be an Eligible Employee and becomes ineligible to receive contributions, such
Employee will again become eligible to receive contributions immediately upon
returning to the class of Eligible Employees. In the event an Employee who is
not an Eligible Employee becomes an Eligible Employee, such Employee may become
a Participant immediately if such Employee has otherwise satisfied the minimum
age and service requirements (if any) and would have otherwise previously
become a Participant. A Participant or former Participant who is reemployed as
an Eligible Employee shall again become eligible to receive contributions
immediately upon reemployment.
3.3. RECLASSIFICATION OF EMPLOYMENT STATUS. Notwithstanding
anything herein to the contrary, an individual who is not characterized or
treated as a common law employee of the Employer shall not be eligible to
participate in the Plan. However, in the event that such an individual is
reclassified or deemed to be reclassified as a common law employee of the
Employer, the individual shall be eligible to participate in the Plan as of the
Entry Date coinciding with or next following the actual date of such
reclassification (to the extent such individual otherwise qualifies as an
Eligible Employee hereunder). If the effective date of any such
reclassification is prior to the actual date of such reclassification, in no
event shall the reclassified individual be eligible to participate in the Plan
retroactively to the effective date of such reclassification.
-9-
<PAGE> 16
ARTICLE 4. CONTRIBUTIONS.
4.1. ELECTIVE CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS. Each
Participant may enter into a Contribution Agreement with the Employer to make
Elective Contributions to the Trust in such amounts and subject to such limits
as the Administrator may specify. By agreeing to Elective Contributions, the
Participant agrees to a reduction in pay in the amount designated and the
Employer agrees in consideration of such reduction to contribute an equivalent
amount to the Trust. Effective as of January 1, 1999, each Participant may make
Employee Contributions in such manner, at such time and in such amounts as the
Administrator may specify.
4.2. FORM AND MANNER OF ELECTIONS. Each Contribution Agreement
shall be in a form prescribed or approved by the Administrator, and may be
entered into, changed or revoked by the Participant, with such prior notice as
the Administrator may prescribe, as of such time or times as the Administrator
may prescribe. Elective Contributions will commence (or recommence) under a
Contribution Agreement at such times as the Administrator may prescribe.
4.3. MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution for a Participant with respect to his or her Elective
Contributions in such amount and in such manner as the Board of Directors shall
determine.
The Employer may designate at the time of contribution that all or a portion of
such Matching Contributions be treated as Qualified Nonelective Contributions.
4.4. DISCRETIONARY CONTRIBUTIONS. The Employer may make a
contribution under the Plan for any Plan Year of an amount that the Board of
Directors shall determine.
Such Discretionary Contributions shall be allocated as of the last day of the
Plan Year for which such contributions are made to each Participant who is an
Eligible Employee of the Employer on the last day of the Plan Year, regardless
of his or her active status in making Elective Contributions during any portion
of the Plan Year.
For each Plan Year the contribution shall be allocated to each Participant in
the proportion that the Compensation (increased by the amount of any bonus
awards during the Plan Year used in
-10-
<PAGE> 17
the calculation) paid to each Participant during the Plan Year bears to the
Compensation (increased by the amount of any bonus awards during the Plan Year
used in the calculation) paid to all such Participants.
The contribution as described above, for any Plan Year, shall be paid to the
Trust after the end of the Plan Year as soon as administratively possible after
its approval by the Board of Directors, but in any event not later than the
date which is prescribed by law for filing the Employer's income tax return,
including any extension thereof.
The Employer may designate at the time of such a Discretionary Contribution
that all or a portion thereof be treated as a Qualified Nonelective
Contribution.
4.5. QUALIFIED NONELECTIVE CONTRIBUTIONS. To satisfy the Code
section 401(k)(3) limits with respect to Elective Contributions or the Code
section 401(m) limits with respect to Matching Contributions, the Plan Sponsor,
in its discretion, may determine whether a Qualified Nonelective Contribution
shall be made to the Trust for a Plan Year. If the Plan Sponsor decides to make
a Qualified Nonelective Contribution, the Plan Sponsor will designate the
Participants on whose behalf the Contribution is to be made, the amount to be
contributed for each designated Participant, and the amount to be contributed
by the Employer. Qualified Nonelective Contributions shall be fully vested and
subject to the same distribution rules as Elective Contributions as of the time
such Qualified Nonelective Contributions are made to the Plan.
4.6. ROLLOVER CONTRIBUTIONS. The Administrator in its sole
discretion shall determine if Rollover Contributions are to be permitted. If
permitted, an Eligible Employee may make a Rollover Contribution to the Plan
upon demonstration to the Administrator that the contribution is eligible for
transfer to the Plan pursuant to the rollover or direct transfer provisions of
the Code. In accordance with rules and procedures prescribed by the
Administrator, a rollover contribution may consist of cash or other property,
including without limitation a note evidencing a loan made by the Eligible
Employee under another employer's tax qualified plan.
4.7. CREDITING OF AND TIME FOR MAKING CONTRIBUTIONS. Elective
Contributions and Employee Contributions shall be paid by the Employer to the
Trust as soon as administratively possible after the payroll date on which such
Contributions would have been paid to the Participant but for the Contribution
Agreement, but in no event later than the deadline prescribed under the
applicable provisions of the Code and ERISA.
Any Matching Contributions, Discretionary Contributions, or Qualified
Nonelective Contributions for a Plan Year will be contributed to the Trust at
such time as the Plan Sponsor determines, but in any event no later than the
time prescribed by law (including extensions) for filing the Employer's federal
income tax return for its taxable year in or with which the Plan
-11-
<PAGE> 18
Year ends. In addition, Qualified Nonelective Contributions and Matching
Contributions for a Plan Year must be made no later that the last day of the
12-month period immediately following the Plan Year. Elective Contributions,
Matching Contributions, Discretionary Contributions, Employee Contributions and
Qualified Nonelective Contributions will be credited to the Accounts of
eligible Participants for whom they are made as soon as practicable after they
are paid to the Trust.
4.8. CERTAIN LIMITS APPLY. All contributions to the Plan are
subject to the applicable limits set forth under Code sections 401(k), 402(g),
401(m), 404, and 415, as further described elsewhere in the Plan. In addition,
certain minimum allocations may be required under Code section 416 as also
further described elsewhere in the Plan.
4.9. RETURN OF CONTRIBUTIONS. If any contribution by the
Employer to the Trust is
(a) made by reason of a good faith mistake of fact, or
(b) believed by the Employer in good faith to be deductible
under Code section 404, but the deduction is disallowed, the
Trustee shall, upon request by the Employer, return to the Employer
the excess of the amount contributed over the amount, if any, that
would have been contributed had there not occurred a mistake of
fact or a mistake in determining the deduction. Such excess shall
be reduced by the losses of the Trust attributable thereto, if and
to the extent such losses exceed the gains and income attributable
thereto. In no event shall the return of a contribution hereunder
cause any Participant's Accounts to be reduced to less than they
would have been had the mistaken or nondeductible amount not been
contributed. No return of a contribution hereunder shall be made
more than one year after the mistaken payment of the contribution,
or disallowance of the deduction, as the case may be.
4.10. ESTABLISHMENT OF TRUST. The Plan Sponsor will establish a
Trust to accept and hold contributions made under the Plan. The Trust shall be
governed by an agreement between the Plan Sponsor and the Trustee, the terms of
which shall be consistent with the Plan provisions and intended qualification
under Code sections 401(a) and 501(a).
-12-
<PAGE> 19
ARTICLE 5. PARTICIPANT ACCOUNTS.
5.1. ACCOUNTS. The Administrator will establish and maintain (or
cause the Trustee to establish and maintain) for each Participant, such
Accounts as are necessary to carry out the purposes of this Plan.
5.2. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date, each
Account will be adjusted to reflect the fair market value of the assets
allocated to the Account. In so doing,
(a) each Account balance will be increased by the amount of
contributions, income and gain allocable to such Account since the
prior Valuation Date; and
(b) each Account balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable to
the Account since the prior Valuation Date.
Income, expense, gain and loss which are generated by a particular investment
within the Trust shall be allocated to an Account participating in such
investment in the ratio to which the portion of the Account which is invested
in the fund bears to the entire amount of Trust assets invested in the fund.
Any expenses relating to a specific Account or Accounts, or commissions or
sales charges with respect to an investment in which the Account participates,
may be charged to the particular Account or Accounts.
5.3. INVESTMENT OF ACCOUNTS. Participant's Accounts will be
invested in accordance with the provisions of the Plan and Trust. Under the
Plan and Trust, each Participant shall have the right to direct the Trustee to
invest his or her Accounts from among such investment options, including
without limitation, fixed, equity and balanced fund investments, as the Plan
Administrator may make available from time to time. In accordance with the
procedures established by the Plan Administrator, the Participant shall elect
to have a specified percentage invested in one or more investment funds, as
long as the designated percentage for each fund is a whole number, and the sum
of the percentages allocated is equal to 100%. A Participant may also designate
amounts invested pursuant to this section to be transferred between the
investment options in accordance with the procedures established by the Plan
Administrator. Notwithstanding the above, the transfer of amounts between
investment options shall be subject to the rules of the investment funds in
which the Participant's Account is invested or is to be invested.
The Plan Sponsor may also permit (or require) all or a portion of Participants'
Accounts to be invested in "stock" of the Plan Sponsor. If investment of such
stock is permitted or required,
-13-
<PAGE> 20
the Plan Administrator shall prescribe rules and procedures for such
investments consistent with the applicable requirements of the Code, ERISA and
securities laws.
The Plan is intended to be an "ERISA section 404(c) plan" as described in
section 404(c) of ERISA and Regulations section 2550.404c-1, and shall be
administered and interpreted in a manner consistent with that intent. The
investment direction requirements of Regulation section
2550.404c-1(b)(2)(i)(B)(1)(iv) and (b)(2)(i)(A) and the requirements relating
to the investment alternatives under the Plan are intended to be satisfied by
this Section, in each case taking into account related communications to
Participants and beneficiaries under the summary plan description for the Plan
and other communications. For purposes of ERISA section 404(c), the "identified
plan fiduciary" obligated to comply with Participant and Beneficiary investment
instructions (except as provided in such section and Regulations thereunder),
the identified plan fiduciary obligated to provide Participants and
Beneficiaries with the materials set forth in Regulations section
2550.404c-1(b)(2)(i)(B) and the identified plan fiduciary obligated to comply
with the confidentiality requirements and procedures under Regulations section
2550.404c-1(d)(2)(ii)(E)(4)(viii) relating to employer securities shall be the
Administrator. The Administrator may decline to implement Participant and
Beneficiary investment instructions which would result in a prohibited
transaction described in ERISA section 406 or section 4975 of the Code or which
would generate income that would be taxable to the Plan.
-14-
<PAGE> 21
ARTICLE 6. VESTING OF ACCOUNTS.
6.1. IMMEDIATE VESTING OF CERTAIN ACCOUNTS. A Participant will at
all times be 100% vested in his or her Elective Contribution Account, Qualified
Nonelective Contribution Account, Employee Contribution Account and Rollover
Contribution Account.
6.2. DEFERRED VESTING OF OTHER ACCOUNTS. Each Participant will have
a vested interest in a percentage of his or her Matching Contribution Account
and Discretionary Contribution Account determined in accordance with the
following schedule and based on his or her Years of Service for Vesting:
<TABLE>
<CAPTION>
Years of Service Applicable
for Vesting Percentage
---------------- ----------
<S> <C>
fewer than 1 0%
1 but fewer than 2 20%
2 but fewer than 3 40%
3 but fewer than 4 60%
4 but fewer than 5 80%
5 or more 100%
</TABLE>
6.3. SPECIAL VESTING RULES. Notwithstanding any provision of the
Plan to the contrary, a Participant will be fully vested in 100% of the
Accounts maintained for his or her benefit upon the happening of any one of the
following events:
(a) the Participant attained the Normal Retirement Age while
an Employee;
(b) the Participant died or became Disabled while an Employee;
(c) the termination or partial termination of the Plan or the
complete cessation of contributions to the Plan as determined by
the Administrator consistent with the applicable requirements of
the Code, but only to the extent that the Participant is affected
by such termination, partial termination, or complete
discontinuance.
6.4. DISTRIBUTION OF LESS THAN ENTIRE VESTED PERCENTAGE. If a
distribution has been made to a Participant from an Account at a time when he or
she has a vested percentage in such Account
-15-
<PAGE> 22
equal to less than 100%, at any relevant time after the distribution, the
Participant's vested percentage will be equal to (P*(AB+D))-D, where P is the
Participant's vested percentage at the relevant time, AB is the Account balance
at the relevant time, and D is the amount of the distribution.
6.5. CHANGES IN VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that affects directly or indirectly
the computation of a Participant's vested percentage (or if the Plan changes to
or from a top-heavy vesting schedule), each Participant who is negatively
affected by such amendment and who has completed three (3) Years of Service for
Vesting at the time of such amendment may elect, within the period described
below, to have his or her vested percentage determined without regard to such
amendment or change. The period referred to in the preceding sentence will
begin on the date the amendment of the vesting schedule is adopted and will end
60 days thereafter, or, if later, 60 days after the later of
(a) the date on which such amendment becomes effective;
and
(b) the date on which the Participant is issued written
notice of such amendment by the Administrator.
6.6. FORFEITURES.
(a) In general. Any portion of a Participant's Account in
which he or she is not vested upon separation from service for any
reason will be forfeited as of the earliest of
(i) the expiration of 5 consecutive Plan Years
during each of which the Participant does not complete 500
hours of service,
(ii) termination of employment, or
(iii) the complete distribution of the vested
portion of the Account if such distribution is made as a
result of the Participant's separation from service.
(b) Certain Restorations. Notwithstanding the preceding
paragraph, if a Participant forfeits any portion of an Account as a
result of the complete distribution of the vested portion of the
Account or his or her termination from employment but thereafter
returns to the employ of an Affiliated Employer prior to the close
of the fifth consecutive Plan Year in which the Participant does
not complete at least 500 Hours of Service, the amount forfeited
will be recredited to the Participant's Account; provided, if the
forfeiture was a result of a complete distribution of the vested
portion of his or her Account, he or she repays to the Plan the
entire amount previously distributed,
-16-
<PAGE> 23
without interest, prior to the earlier of (i) the close of the
fifth consecutive Plan Year in which the Participant does not
complete at least 500 Hours of Service or (ii) the fifth
anniversary of the date on which the Participant is reemployed. The
Participant's vested percentage in the amount so recredited will
thereafter be determined under the terms of the Plan as if no
forfeiture had occurred. The money required to effect the
restoration of a Participant's Account shall come from other
Accounts forfeited during the Plan Year of restoration, and to the
extent such funds are inadequate, from a special contribution by
the Participant's Employer.
(c) Application of forfeitures. Any forfeitures occurring
in a Plan Year with respect to an Employee
(i) may be applied to the restoration of any
Accounts of Employees of the Employer as required for such
Year; and
(ii) may be applied by the Employer in its
discretion against the Employer's Matching Contributions or
Discretionary Contributions or to pay reasonable expenses
of administering the Plan, at the earliest opportunity
after such forfeitures become available.
-17-
<PAGE> 24
ARTICLE 7. DISTRIBUTIONS AND WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE.
7.1. EMPLOYEE CONTRIBUTIONS. A Participant may make a withdrawal
from his or her Employee Contribution Account, but with such prior notice and
subject to such other limitations as the Administrator may prescribe. Any
withdrawal under this Section shall be in the amount specified by the
Participant up to the value of such Account, determined as of the Valuation
Date next following the Administrator's receipt of written notice of the
withdrawal, and shall be made as soon as practicable after such Valuation Date.
7.2. HARDSHIP WITHDRAWALS.
(a) Immediate and heavy financial need. A Participant may
make a withdrawal from his or her Accounts in the event of an
immediate and heavy financial need arising from
(i) expenses for medical care described in Code
section 213(d) previously incurred by the Participant, his
or her spouse, children or dependents (as defined in Code
section 152) or necessary care for these persons to obtain
such medical care;
(ii) costs directly related to the purchase of a
principal residence of the Participant (excluding mortgage
payments);
(iii) the payment of tuition and related educational
fees for the next 12- months of post-secondary education
for the Participant, his or her spouse, children or
dependents (as defined in Code section 152);
(iv) payments necessary to prevent the eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage on that principal residence; or
(v) expenses for the funeral of a member of the
Participant's family.
The Administrator's determination of whether there is an immediate and heavy
financial need as defined above shall be made solely on the basis of written
evidence furnished by the Participant. Such evidence must also indicate the
amount of such need.
-18-
<PAGE> 25
(b) Withdrawal of amount necessary to meet need. As soon as
practicable after the Administrator's determination that an
immediate and heavy financial need exists with respect to the
Participant and that the Participant has obtained all other
distributions (other than hardship distributions) and all
nontaxable loans currently available under the Plan and all other
plans maintained by the Affiliated Employers, the Administrator
will direct the Trustee to pay to the Participant the amount
necessary to meet the need created by the hardship (but not in
excess of the value of the vested portion of the Participant's
Accounts, determined as of the Valuation Date next following the
Administrator's determination). The amount necessary to meet the
need may include any amounts necessary to pay any federal, state,
or local income taxes or penalties reasonably anticipated to result
from the distribution. Withdrawal from the Participant's Accounts
in the event of a hardship will be made in the following order:
(i) from the portion of his or her Employee
Contribution Account attributable to income,
(ii) from his or her Elective Contribution Account,
(provided that no portion of an Elective Contribution
Account attributable to income earned after December 31,
1988 may be distributed due to a financial hardship). In no
event may a hardship withdrawal be made from a Qualified
Nonelective Contribution Account.
(iii) from his or her Rollover Contribution Account,
(iv) from his or her Matching Contribution Account,
(v) from his or her Discretionary
Contribution Account.
(c) Effect of hardship distribution. If a Participant
receives a hardship withdrawal from his or her Elective
Contribution Account, then any Elective Contribution election,
Employee Contribution election, or any other cash-or-deferred or
employee contribution election in effect with respect to the
Participant under the Plan or any other qualified plan maintained
by an Affiliated Employer shall be suspended for the 12-month
period beginning with the pay period after the hardship withdrawal
is approved. In addition, the amount of Elective Contributions made
for the benefit of the Participant, together with any elective
deferrals made on behalf of the Participant under any other plan
maintained by the Affiliated Employers for the calendar year
immediately following the calendar year of the hardship withdrawal
must not exceed the applicable limit under Code section 402(g) for
such next calendar year, less the amount of such contributions made
on behalf of the Participant for the calendar
-19-
<PAGE> 26
year of the hardship distribution. Withdrawals made pursuant to
this section of the Plan may not be repaid.
7.3. WITHDRAWALS AFTER AGE 59 1/2. A Participant who is an Employee
and has attained age 59 1/2 may make a withdrawal from any one or more of his
or her Accounts for any reason, but with such prior notice as the Administrator
may prescribe. Any such withdrawal shall be in the amount specified by the
Participant, up to the value of the Participant's vested portion of the
particular Account determined as of the Valuation Date next following the
Administrator's receipt of notice of the withdrawal. Payment to the Participant
shall be made as soon as practicable after such Valuation Date.
7.4. WITHDRAWALS ON ACCOUNT OF DISABILITY. A Participant who
becomes entitled to disability benefits under his or her Employer's long term
disability plan but who has not otherwise separated from service from an
Affiliated Employer may make a withdrawal from any one or more of his or her
Accounts for any reason, but with such prior notice as the Administrator may
prescribe. Any such withdrawal shall be in the amount specified by the
Participant, up to the value of the Participant's vested portion of the
particular Account determined as of the Valuation Date next following the
Administrator's receipt of notice of the withdrawal. Payment to the Participant
shall be made as soon as practicable after such Valuation Date.
7.5. SPOUSAL CONSENT. Notwithstanding the foregoing provisions of
this Article, a married Participant must obtain the consent of his or her
spouse for a withdrawal of his or her Account if such consent is required by
Code sections 401(a)(11) and 417 or by the Plan Administrator.
7.6. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS
ORDER. To the extent required by a Qualified Domestic Relations Order, the
Administrator shall make distributions from a Participant's Accounts to
alternate payees named in such order in a manner consistent with the
distribution options otherwise available under the Plan, regardless of whether
the Participant is otherwise entitled to a distribution at such time under the
Plan.
7.7. LOANS TO PARTICIPANTS. The Plan Administrator may make a bona
fide loan to a Participant (with his or her spouse's consent, if applicable),
in an amount which, when added to the outstanding balance of all other loans to
the Participant from all qualified plans of the Employer, does not exceed the
lesser of (a) $50,000 reduced by the excess of the Participant's highest
outstanding loan balance during the 12 months preceding the date on which the
loan is made over the outstanding loan balance on the date the new loan is
made, or (b) 50% of the Participant's vested interest in his or her Account.
-20-
<PAGE> 27
The loan shall be made under such terms, security interest, and conditions as
the Plan Administrator deems appropriate, provided, however, that all loans
granted hereunder:
(a) are available to all Participants and Beneficiaries, who
are parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(b) are not made available to Highly Compensated Employees
on a basis greater than the basis made available to other
Employees;
(c) bear a reasonable rate of interest;
(d) are adequately secured;
(e) to the extent required by Code sections 401(a)(11) or
417 or by the Plan Administrator, are made only after a Participant
obtains the consent of his spouse, if any, to use his Participant's
Account as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan. A new consent
shall be required if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan;
and
(f) are made in accordance with and subject to all of the
provisions of this Article.
7.8. LOAN PROCEDURES. The Plan Administrator shall establish a
written set of procedures, set forth in the summary plan description, by which
all loans will be administered. Such rules, which are incorporated herein by
reference, will include, but not be limited to, the following:
(a) the person or persons authorized to administer the loan
program, identified by name or position;
(b) the loan application procedure;
(c) the basis for approving or denying loans;
(d) any limits on the types of loans permitted;
-21-
<PAGE> 28
(e) the procedure for determining a "reasonable" interest
rate;
(f) acceptable collateral;
(g) default conditions; and
(h) steps which will be taken to preserve Plan assets in
the event of default.
-22-
<PAGE> 29
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE
8.1. SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH.
Following a Participant's separation from the service of the Affiliated
Employers for any reason other than death, each Participant may elect, with his
or her spouse's consent if required by Code sections 401(a)(11) or 417 or by
the Plan Administrator, a distribution in the form of an Annuity, one or more
cash payments, or a combination of the above. An Annuity form of distribution
will be accomplished by applying the specified portion of the Participant's
Account balance to the purchase of an annuity contract from an insurance
company. The type of Annuity to be provided under the contract will be selected
by the Participant, with his or her spouse's consent if required by Code
sections 410(a)(11) or 417 or by the Plan Administrator, from alternatives made
available by the Plan Administrator.
Distributions in the form of Plan Sponsor stock may also be made available by
the Administrator at the Administrator's sole discretion for election by
Participants and are limited to the value of the Participant's Employer Stock
Account.
The amount of the distribution shall be determined as of the Valuation Date
that immediately precedes or coincides with the date distribution is to be made
as described below.
All amounts payable under the Plan will be payable in accordance with the
applicable requirements of Code section 401(a)(9), including the incidental
benefit rule, all of which are expressly incorporated herein by reference.
8.2. TIME OF DISTRIBUTIONS. Subject to the applicable requirements
of Code section 401(a)(9), distribution with respect to a Participant's
separation from service normally will be made at such time as the Participant
elects to receive, or commence to receive, his or her distribution, with his or
her spouse's consent if required by Code sections 401(a)(11) or 417 or by the
Plan Administrator. Such election will be made in such form and such manner as
the Administrator may prescribe.
Unless the Participant otherwise elects consistent with the requirements of
Code section 401(a)(9), however, distribution under this Section in all events
will be made no later than the 60th day after the close of the Plan Year in
which occurs the later of the Participant's separation from service or the
Participant's attainment of the Normal Retirement Age.
-23-
<PAGE> 30
8.3. CERTAIN DISTRIBUTION OPTIONS PROTECTED. Notwithstanding any
provision to the contrary, in addition to the distribution options described in
this Plan, in the event that any distribution option available under the Plan
prior to this restatement is an optional form of benefit within the meaning of
Code section 411(d)(6), such option shall continue to be available to the
extent required by such section.
8.4. DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH. If a Participant
dies, the Participant's Beneficiary may elect to receive a distribution of the
vested portion of the Participant's Accounts, if any, in the form of an
Annuity, one or more cash payments or a combination of the above.
In accordance with Code section 401(a)(9)(B), benefits payable upon the death
of the Participant before his or her benefit payments have begun will be
distributed in full within five years after the death of the Participant unless
an exemption specified in Code section 401(a)(9)(B) applies, in which case
benefits may be payable over the period (and starting at such time) specified
in Code section 401(a)(9)(B). Benefits, if any, payable upon the death of the
Participant after his or her benefit payments have begun will be distributed at
least as rapidly as under the method of distribution in effect for the
Participant at the time of his or her death.
8.5. DESIGNATION OF BENEFICIARY. Subject to the provisions of this
Section, a Participant's Beneficiary shall be the person or persons and entity
or entities, if any, designated by the Participant from time to time on a form
approved by the Administrator. In the absence of an effective beneficiary
designation, a Participant's Beneficiary shall be his or her surviving spouse,
if any, or if none, the Participant's estate. A non-spouse beneficiary
designation by a Participant who is married at the time of his or her death
shall not be effective unless;
(a) prior to the Participant's death, the Participant's
surviving spouse consented to and acknowledged the effect of the
Participant's designation of a specific non-spouse Beneficiary
(including any class of Beneficiaries or any contingent
Beneficiaries) on a written form approved by the Administrator and
witnessed by a notary public or a duly authorized Plan
representative, or
(b) it is established to the satisfaction of the Administrator
that spousal consent may not be obtained because there is no
spouse, because the spouse has died (evidenced by a certificate of
death), because the spouse cannot be located (based on information
supplied by a government agency or independent investigator), or
because of such other circumstances as the Secretary of the
Treasury may prescribe, or
-24-
<PAGE> 31
(c) the spouse had earlier executed a general consent form
permitting the Participant (i) to select from among certain
specified beneficiaries without any requirement of further consent
by the spouse (and the Participant designates a Beneficiary from
the specified list), or (ii) to change his or her beneficiary
without any requirement of further consent by the spouse. Any such
general consent shall be on a form approved by the Administrator,
and must acknowledge that the spouse has the right to limit consent
to a specific beneficiary and that the spouse voluntarily elects to
relinquish such right.
In the event a spouse is legally incompetent to give consent, the spouse's
legal guardian, even if the guardian is the Participant, may give consent on
behalf of the spouse. Any consent and acknowledgment by (or on behalf of) a
spouse, or the establishment that the consent and acknowledgment cannot be
obtained, shall be effective only with respect to such spouse, but shall be
irrevocable once made.
8.6. CERTAIN DISPOSITIONS. In connection with the disposition by
the Employer of at least 85 percent of the assets used by the Employer in a
trade or business to an unrelated corporation or entity, or the disposition of
the Employer's interest in a subsidiary to an unrelated entity, distribution of
the entire vested Account balance of an Employee who continues employment with
such unrelated corporation or entity may be made to the Employee in a single
sum, but only if such unrelated corporation or entity does not maintain the
Plan after the disposition, and only if such distribution is otherwise made in
accordance with Code section 401(k)(10).
8.7. OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. The terms used in this
Section will have the same meaning as under Code section 401(a)(31).
-25-
<PAGE> 32
ARTICLE 9. ADMINISTRATION.
9.1. ADMINISTRATOR. The Plan will be administered by the
Administrator. The Administrator shall have the discretionary authority to
appoint designated representatives to serve at its pleasure. The Administrator
will be a "named fiduciary" for purposes of section 402(a)(1) of ERISA with
authority to control and manage the operation and administration of the Plan,
and will be responsible for complying with all of the reporting and disclosure
requirements of Part 1 of Subtitle B of Title I of ERISA. The Administrator
will not, however, have any authority over the investment of assets of the
Trust in its capacity as Administrator.
Each fiduciary of the Plan shall discharge his or her duties hereunder solely
in the interest of the Participants and their Beneficiaries and for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and defraying reasonable expenses of administering the Plan. Each fiduciary
shall act with the care, skill, prudence and diligence under the circumstances
that a prudent person acting in a like capacity and familiar with such matters
would use in conducting an enterprise of like character and with like aims, in
accordance with the documents and instruments governing the Plan, insofar as
such documents and instruments are consistent with this standard.
Nothing in the Plan shall be construed to prevent any fiduciary from receiving
any benefit to which he or she may be entitled as a Participant or Beneficiary
in the Plan, so long as the benefit is computed and paid on a basis that is
consistent with the terms of the Plan as applied to all other Participants and
Beneficiaries. Nor shall the Plan be interpreted to prevent any Fiduciary from
receiving any reasonable compensation for services rendered, or for the
reimbursement of expenses properly and actually incurred in the performance of
his duties with the Plan; except that no person so serving who already receives
full-time pay from the Employer shall receive compensation from the Plan,
except for reimbursement of expenses properly and actually incurred.
9.2. POWERS OF ADMINISTRATOR. The Administrator will have full
discretionary power to administer the Plan in all of its details, subject to the
requirements of ERISA. The Administrator's discretionary power will include, but
will not be limited to, the following authority:
(a) to make and enforce such rules and regulations as it
deems necessary or proper for the efficient administration of the
Plan or required to comply with applicable law;
-26-
<PAGE> 33
(b) to interpret the Plan;
(c) to decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan;
(d) to compute the amounts to be distributed under the Plan,
and to determine the person or persons to whom such amounts will be
distributed;
(e) to authorize the payment of distributions;
(f) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be
required under the Code and applicable regulations, or under other
federal, state or local law and regulations;
(g) to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants
and consultants as may be required or desired to assist in
administering the Plan; and
(h) by written instrument, to allocate and delegate its
fiduciary responsibilities in accordance with section 405 of ERISA.
(i) such other authority as may be assigned or delegated to
it from time to time by the Board of Directors.
9.3. EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation
of the Plan or other determination with respect to the Plan by the
Administrator shall be final and conclusive on all persons in the absence of
clear and convincing evidence that the Administrator acted arbitrarily and
capriciously.
9.4. NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.
9.5. RELIANCE ON TABLES, ETC. In administering the Plan, the
Administrator will be entitled, to the extent permitted by law, to rely
conclusively on all tables, valuations, certificates, opinions and reports
which are furnished by any accountant, trustee, counsel or other expert who is
employed or engaged by the Administrator or by the Plan Sponsor on the
Administrator's behalf.
-27-
<PAGE> 34
9.6. CLAIMS AND REVIEW PROCEDURES. The Administrator shall adopt
procedures for the filing and review of claims in accordance with section 503
of ERISA.
9.7. INDEMNIFICATION OF DESIGNATED REPRESENTATIVES, ADMINISTRATOR
AND ASSISTANTS. The Employer agrees, jointly and severally, to indemnify and
defend to the fullest extent of the law any Employee or former Employee (a) who
serves or has served as Administrator, (b) who has been appointed to assist the
Administrator in administering the Plan, or (c) to whom the Administrator has
delegated any of its duties or responsibilities against any liabilities,
damages, costs and expenses (including attorneys' fees and amounts paid in
settlement of any claims approved by the Plan Sponsor) occasioned by any act or
omission to act in connection with the Plan, unless such act or omission to act
is in bad faith or involved willful misconduct.
9.8. PAYMENT OF PLAN EXPENSES. The Administrator may direct the
Trustee to pay from the Trust any and all expenses of administering the Plan,
to the extent such expenses are reasonable. The Administrator will determine in
its sole discretion what constitutes a reasonable expense of administering the
Plan, and whether such expenses shall be paid from the Trust. Any such expenses
not paid from the Trust shall be paid by the Employer as determined by the
Administrator. To the extent permitted by the Code and ERISA, the Administrator
may direct the Trustee to reimburse the Employer from the Trust for a
reasonable expense of administering the Plan which is paid by the Employer
prior to a determination with respect to such expense.
9.9. CORRECTING OPERATIONAL DEFECTS. The Administrator will have
the full discretionary power and authority to correct any "operational defect"
in any manner or by any method it deems appropriate in its sole discretion in
order to cause the Plan (i) to operate in accordance with its terms or, (ii) to
maintain its tax-qualified status under the Code. For purposes of this Section,
an "operational defect" is any operational or administrative action (or
inaction) in connection with the Plan which, in the judgment of the
Administrator, fails to conform with the terms of the Plan or causes or could
cause the Plan to lose its tax-qualified status under the Code.
-28-
<PAGE> 35
ARTICLE 10. AMENDMENT AND TERMINATION.
10.1. AMENDMENT. The Plan Sponsor or its delegate reserves the
power at any time or times to amend the provisions of the Plan and Trust to any
extent and in any manner that it may deem advisable. However, the Plan Sponsor
will not have the power:
(a) to amend the Plan or Trust in such manner as would cause
or permit any part of the assets of the Trust to be diverted to
purposes other than for the exclusive benefit of each Participant
and his or her Beneficiary, unless such amendment is required or
permitted by law, governmental regulation or ruling; or
(b) to amend the Plan or Trust retroactively in such a manner
as would reduce the accrued benefit of any Participant, except as
otherwise permitted or required by law.
10.2. TERMINATION. The Plan Sponsor has established the Plan and
authorized the establishment of the Trust with the bona fide intention and
expectation that contributions will be continued indefinitely, but may
discontinue contributions under the Plan or terminate the Plan at any time
without liability whatsoever for any such discontinuance or termination. In
addition, the Employer will have no obligation or liability whatsoever to
maintain the Plan for any given length of time and may cease to be an Employer
in a manner acceptable to the Plan Sponsor.
10.3. DISTRIBUTIONS UPON TERMINATION OF THE PLAN. Upon termination
of the Plan by the Plan Sponsor, the Trustee will distribute to each Participant
(or other person entitled to distribution) the value of the Participant's
Accounts in a single sum as soon as practicable following such termination. The
amount of such distribution shall be determined as of the Valuation Date
immediately preceding or coinciding with the date distribution is to be made.
Notwithstanding the preceding sentence, if any Affiliated Employer maintains or
establishes a defined contribution plan (other than an ESOP or a SEP) that
benefits at least 2 percent of the employees in the terminated Plan, Accounts
shall be distributed to Participants and their Beneficiaries only in a manner
consistent with Code sections 401(k)(2)(B)(i)(I), (III) and (IV), and
401(k)(10)(A)(ii) and (iii). In such case, a Participant's Accounts will be
transferred, without the Participant's consent, to the other plan pending
distribution.
10.4. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In
case of any merger or
-29-
<PAGE> 36
consolidation of the Plan with, or transfer of assets and liabilities of the
Plan to, any other plan, provision must be made so that each Participant would,
if the Plan 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.
10.5. PLAN MERGERS AND SPINOFFS. This Section sets forth special
provisions applicable to mergers of other plans into the Plan, and spinoffs of
portions of the Plan to other plans, which occur from time to time.
(a) Merger of Savings Plan For Employees of Fairchild Space
and Defense Corporation. Effective as of January 1, 1997, the
Savings Plan For Employees of Fairchild Space and Defense
Corporation is hereby merged with and into the Plan. In connection
with the merger, all of the provisions of the Plan are substituted
for the provisions of the Savings Plan For Employees of Fairchild
Space and Defense Corporation except those provisions of said
Fairchild Savings Plan which constitute a protected benefit right
or feature within the meaning of Code section 411(d)(6), which
provisions of said Fairchild Savings Plan shall continue to be in
effect under the Plan to the extent required by section 411(d)(6)
and are incorporated herein by reference. Furthermore, the rights
to benefits of an individual who was a participant in said
Fairchild Savings Plan prior to January 1, 1997 and who is not
credited with an Hour of Service after that date will be determined
in accordance with the provisions of said Fairchild Savings Plan as
in effect from time to time prior to January 1, 1997.
(b) Merger of Savings Plan For Bargaining Unit Employees of
Fairchild Space and Defense Corporation. Effective as of January 1,
1997, the Savings Plan For Bargaining Unit Employees of Fairchild
Space and Defense Corporation is hereby merged with and into the
Plan. In connection with the merger, all of the provisions of the
Plan are substituted for the provisions of the Savings Plan For
Bargaining Unit Employees of Fairchild Space and Defense
Corporation except those provisions of said Fairchild Bargaining
Unit Savings Plan which constitute a protected benefit right or
feature within the meaning of Code section 411(d)(6), which
provisions of said Fairchild Bargaining Unit Savings Plan shall
continue to be in effect under the Plan to the extent required by
section 411(d)(6) and are incorporated herein by reference.
Furthermore, the rights to benefits of an individual who was a
participant in said Fairchild Bargaining Unit Savings Plan prior to
January 1, 1997 and who is not credited with an Hour of Service
after that date will be determined in accordance with the
provisions of said Fairchild Bargaining Unit Savings Plan as in
effect from time to time prior to January 1, 1997.
(c) Merger of Orbital Sciences Corporation/Chandler
Operations Retirement Savings Plan (1994 Restatement). Effective as
of January 1, 1997, the Orbital Sciences
-30-
<PAGE> 37
Corporation/Chandler Operations Retirement Savings Plan (1994
Restatement) is hereby merged with and into the Plan. In connection
with the merger, all of the provisions of the Plan are substituted
for the provisions of the Orbital Sciences Corporation/Chandler
Operations Retirement Savings Plan (1994) Restatement) except those
provisions of said Chandler Operations Savings Plan which
constitute a protected benefit right or feature within the meaning
of Code section 411(d)(6), which provisions of said Chandler
Operations Savings Plan shall continue to be in effect under the
Plan to the extent required by section 411(d)(6) and are
incorporated herein by reference. Furthermore, the rights to
benefits of an individual who was a participant in said Chandler
Operations Savings Plan prior to January 1, 1997 and who is not
credited with an Hour of Service after that date will be determined
in accordance with the provisions of said Chandler Operations
Savings Plan as in effect from time to time prior to January 1,
1997.
(d) Merger of Other Tax Qualified Defined Contribution Plans
into the Plan. From time to time, the Plan Sponsor or its delegate
may permit, in such manner as it deems appropriate, a tax qualified
defined contribution plan of another employer (the "other plan") to
be merged with and into the Plan. In connection with such merger,
all of the provisions of the Plan are substituted for the
provisions of the other plan, except those provisions of the other
plan which constitute a protected benefit right or feature within
the meaning of Code section 411(d)(6), which provisions of the
other plan shall continue to be in effect under the Plan to the
extent required by Code section 411(d)(6) and are incorporated
herein by reference. Furthermore, the rights to benefits of an
individual who was a participant in the other plan prior to the
effective date of the merger will be determined in accordance with
the provisions of the other plan as in effect from time to time
prior to the effective date of the merger.
10.6. TREATMENT OF CERTAIN TRANSFERRED PARTICIPANTS.
(a) Optional Direct Transfer to ORBCOMM Retirement Savings
Plan. Notwithstanding any provision of the Plan to the contrary,
each Plan Participant who becomes an employee of ORBCOMM Global,
L.P. or any of its affiliates shall be entitled to elect, with his
or her spouse's consent if required, to have the Trustee of the
Plan transfer to the trustee of the ORBCOMM Retirement Savings Plan
all assets held in his or her Accounts under the Plan, vested and
unvested. A Participant who makes such election shall cease to be a
Participant under the Plan on such transfer, shall have no further
rights under the Plan with respect to such transferred amounts, and
shall look solely to the provisions of the ORBCOMM Retirement
Savings Plan for such rights. A Participant who does not make the
election described in this Section will continue to be a
Participant in the Plan to the extent provided under the Plan and
-31-
<PAGE> 38
subject to all applicable Plan provisions, including without
limitation, the Plan's forfeiture and distribution rules.
(b) Optional Direct Transfer to Orbital Imaging Corporation
Retirement Savings Plan. Notwithstanding any provision of the Plan
to the contrary, each Plan Participant who becomes an employee of
Orbital Imaging Corporation or any of its affiliates shall be
entitled to elect, with his or her spouse's consent if required, to
have the Trustee of the Plan transfer to the trustee of the Orbital
Imaging Corporation Retirement Savings Plan all assets held in his
or her Accounts under the Plan, vested and unvested. A Participant
who makes such election shall cease to be a Participant under the
Plan on such transfer, shall have no further rights under the Plan
with respect to such transferred amounts, and shall look solely to
the provisions of the Orbital Imaging Corporation Retirement
Savings Plan for such rights. A Participant who does not make the
election described in this Section will continue to be a
Participant in the Plan to the extent provided under the Plan and
subject to all applicable Plan provisions, including without
limitation, the Plan's forfeiture and distribution rules.
(c) Mandatory Direct Transfer to Plans of Certain Affiliated
Employers. Notwithstanding any provision to the contrary, on behalf
of each Plan Participant who becomes an employee of an Affiliated
Employer which has not adopted the Plan and which has its own
tax-qualified defined contribution plan which permits receipt of
transferred amounts from this Plan, the Trustee of the Plan shall
transfer to the trustee of such Affiliated Employer's plan all
assets held in his or her Accounts under the Plan, vested and
unvested. Such Participant shall cease to be a Participant under
the Plan on such transfer, shall have no further rights under the
Plan with respect to such transferred amounts, and shall look
solely to the provisions of the transferee plan for such rights.
(d) Direct Transfer From Plans of Certain Related Employers.
Notwithstanding any provision of the Plan to the contrary, the
Trustee of the Plan shall accept a transfer from the ORBCOMM
Retirement Savings Plan or from the tax-qualified defined
contribution plan of an Affiliated Employer of all assets held,
vested and unvested, for the benefit of each such Participant who
was formerly a participant in such other plan and on whose behalf
amounts are being transferred from said plan to the Plan. Such
transferred amounts shall be credited to the applicable Account or
Accounts of the Participant under the Plan which corresponds to the
type of account or accounts to which such transferred amounts were
credited under the former employer's plan. Following such transfer,
such Participant shall have no further rights under such former
employer's plan with respect to such transferred amounts, and shall
look solely to the provisions of this Plan for such rights. To the
extent not otherwise provided under this Plan, (i) each such
Participant shall be credited under this Plan with the number of
years (or portions thereof) of his or her eligibility and vesting
service
-32-
<PAGE> 39
accumulated under such former employer's plan and (ii) if such
transfer was a mandatory direct transfer, any optional form of
benefit, or any other protected right or feature within the meaning
of Code section 411(d)(6) shall continue to be available under the
Plan with respect to such transferred amounts to the extent
required by such section.
-33-
<PAGE> 40
ARTICLE 11. LIMITS ON CONTRIBUTIONS.
11.1. CODE SECTION 404 LIMITS. The sum of the contributions made by
the Employer under the Plan for any Plan Year shall not exceed the maximum
amount deductible under the applicable provisions of the Code. All
contributions under the Plan made by the Employer are expressly conditioned on
their deductibility under Code section 404 for the taxable year when paid (or
treated as paid under Code section 404(a)(6).
11.2. CODE SECTION 415 LIMITS.
(a) Incorporation by reference. Code section 415 is hereby
incorporated by reference into the Plan.
(b) General limitation on annual additions. The annual
addition (within the meaning of Code section 415) of a Participant
for any limitation year, when added to the annual additions to his
or her accounts for such year under all other defined contribution
plans maintained by the Affiliated Employers, shall not exceed the
lesser of (i) $30,000 (increased from time to time in accordance
with Code section 415(d)), or (ii) 25% of the Participant's
compensation (as defined under Code section 415) for such
limitation year.
(c) Combined limitations. In the case of a Participant who
also participates in a defined benefit plan maintained by an
Affiliated Employer, the combined plan limitations of Code section
415 shall apply in such manner as the Administrator shall determine
consistent with Code section 415, unless and until such limitations
are repealed.
(d) Limitation year. For purposes of determining the Code
section 415 limits under the Plan, the "limitation year" shall be
the Plan Year.
(e) Treatment of excess contributions. If, as a result of a
reasonable error in estimating a Participant's Compensation for a
Plan Year or limitation year, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code section
402(g)(3)) that may be made with respect to any individual under
the limits of Code section 415, or under such other facts and
circumstances as may be permitted under Regulation or by the
Internal Revenue Service, the annual addition under the Plan for a
Participant would cause the Code section 415 limitations for a
limitation year to be exceeded, the excess amounts shall be held in
an unallocated
-34-
<PAGE> 41
suspense account and allocated in subsequent years in accordance
with the Regulations under Code section 415. Alternatively, such
excess amounts may be returned to the Employer or the Participant
in accordance with the Regulations under Code section 415.
-35-
<PAGE> 42
11.3. CODE SECTION 402(G) LIMITS.
(a) In general. The maximum amount of Elective
Contributions made on behalf of any Participant for any calendar
year, when added to the amount of elective deferrals under all
other plans, contracts and arrangements of an Affiliated Employer
with respect to the Participant for the calendar year, shall in no
event exceed the maximum applicable limit in effect for the
calendar year under Code section 402(g).
A Participant will be considered to have made "excess deferrals"
for a taxable year to the extent that the Participant's elective
deferrals for the taxable year exceed the applicable limit
described above for the year.
(b) Distribution of excess deferrals. In the event that an
amount is included in a Participant's gross income for a taxable
year as a result of an excess deferral under Code section 402(g),
and the Participant notifies (or is deemed to have notified) the
Administrator on or before the March 1 following the taxable year
that all or a specified part of an Elective Contribution made for
his or her benefit represents an excess deferral, the Administrator
shall make every reasonable effort to cause such excess deferral,
adjusted for allocable income, to be distributed to the Participant
no later than the April 15 following the calendar year in which
such excess deferral was made. The Participant will be deemed to
have notified the Administrator before March 1 of any excess
deferral arising under a plan maintained by an Affiliated Employer.
The income allocable to excess deferrals is equal to the allocable
gain or loss for the taxable year of the individual, but not the
allocable gain or loss for the period between the end of the
taxable year and the date of distribution (the "gap period").
Income allocable to excess deferrals for the taxable year shall be
determined by multiplying the gain or loss attributable to the
Participant's Elective Contribution Account for the taxable year by
a fraction, the numerator of which is the Participant's excess
deferrals for the taxable year, and the denominator of which is the
sum of the Participant's Elective Contribution Account balance as
of the beginning of the taxable year plus the Participant's
Elective Contributions for the taxable year. No distribution of an
excess deferral shall be made during the taxable year of a
Participant in which the excess deferral was made unless the
correcting distribution is made after the date on which the Plan
received the excess deferral and both the Participant and the Plan
designates the distribution as a distribution of an excess
deferral. The amount of any excess deferrals that may be
distributed to a Participant for a taxable year shall be reduced by
the amount of Elective Contributions that were excess contributions
and were previously distributed to the Participant or
recharacterized for the Plan Year beginning with or within such
taxable year.
-36-
<PAGE> 43
(c) Treatment of excess deferrals. For other purposes of
the Code, including Code sections 401(a)(4), 401(k)(3), 404, 409,
411, 412, and 416, excess deferrals must be treated as employer
contributions even if they are distributed in accordance with
paragraph (b) above. However, excess deferrals of a non-Highly
Compensated Employee are not to be taken into account for purposes
of Code section 401(k)(3) (the actual deferral percentage test) to
the extent the excess deferrals are prohibited under Code section
401(a)(30). Excess deferrals are also to be treated as employer
contributions for purposes of Code section 415 unless distributed
under paragraph (b) above.
11.4. CODE SECTION 401(K)(3) LIMITS.
(a) In General. Elective Contributions made under the
Plan are subject to the limits of Code section 401(k)(3), as more
fully described below. The Plan provisions relating to the
401(k)(3) limits are to be interpreted and applied in accordance
with Code sections 401(k)(3) and 401(a)(4), which are hereby
incorporated by reference, and in such manner as to satisfy such
other requirements relating to Code section 401(k) as may be
prescribed by the Secretary of the Treasury from time to time. The
term "Compensation" as used in this Section has the meaning given
such term by Code section 414(s) as determined by the Administrator
in its sole discretion.
(b) Actual deferral ratios. For each Plan Year, the
Administrator will determine the "actual deferral ratio" for each
Participant who is eligible for Elective Contributions. The actual
deferral ratio shall be the ratio, calculated to the nearest
one-hundredth of one percent, of the Elective Contributions (plus
any Qualified Nonelective Contributions treated as Elective
Contributions) made on behalf of the Participant for the Plan Year
to the Participant's Compensation for the applicable period. For
purposes of determining a Participant's actual deferral ratio,
(i) Elective Contributions will be taken into
account only if each of the following requirements are
satisfied:
(A) the Elective Contribution is allocated to
the Participant's Elective Contribution Account as
of a date within the Plan Year, is not contingent
upon participation in the Plan or performance of
services on any date subsequent to that date, and
is actually paid to the Trust no later than the end
of the 12-month period immediately following the
Plan Year to which the contribution relates; and
(B) the Elective Contribution relates to
compensation that either would have been received
by the Participant in the Plan Year but
-37-
<PAGE> 44
for the Participant's election to defer under the
Plan. or is attributable for services performed in
the Plan Year and, but for the Participant's
election to defer, would have been received by the
Participant within 2 1/2 months after the close of
the Plan Year.
To the extent Elective Contributions which meet the requirements of
(A) and (B) above constitute excess deferrals, they will be taken
into account for each Highly Compensated Employee, but will not be
taken into account for any non-Highly Compensated Employee.
(ii) in the case of a Participant who is a
Highly Compensated Employee for the Plan Year and is
eligible to have elective deferrals (and qualified
nonelective or qualified matching contributions, to the
extent treated as elective deferrals) allocated to his
or her accounts under two or more cash or deferred
arrangements described in Code section 401(k)
maintained by an Affiliated Employer, the Participant's
actual deferral ratio shall be determined as if such
elective deferrals (as well as qualified nonelective or
qualified matching contributions) are made under a
single arrangement, and if two or more of the cash or
deferred arrangements have different Plan Years, all
cash or deferred arrangements ending with or within the
same calendar year shall be treated as a single
arrangement;
(iii) the applicable period for determining
Compensation for each Participant for a Plan Year shall
be the 12-month period ending on the last day of such
Plan Year; provided, that to the extent permitted under
Regulations, the Administrator may choose, on a uniform
basis, to treat as the applicable period only that
portion of the Plan Year during which the individual
was a Participant;
(iv) Qualified Nonelective Contributions made
on behalf of Participants who are eligible to receive
Elective Contributions shall be treated as Elective
Contributions to the extent permitted by Regulation
section 1.401(k) 1(b)(5);
(v) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or
410(b) only if aggregated with one or more other plans
with the same plan year, or if one or more other plans
with the same Plan Year satisfy such Code sections only
if aggregated with this Plan, then this section shall
be applied by determining the actual deferral ratios as
if all such plans were a single plan;
-38-
<PAGE> 45
(vi) an employee who would be a Participant but
for the failure to make Elective Contributions shall be
treated as a Participant on whose behalf no Elective
Contributions are made; and
(vii) Elective Contributions which are made on
behalf of non-Highly Compensated Employees which could
be used to satisfy the Code section 401(k)(3) limits
but are not necessary to be taken into account in order
to satisfy such limits, may instead be taken into
account for purposes of the Code section 401(m) limits
to the extent permitted by Regulation sections
1.401(m)-1(b)(5).
(c) Actual deferral percentages. The actual deferral
ratios for all Highly Compensated Employees who are eligible for
Elective Contributions for a Plan Year shall be averaged to
determine the actual deferral percentage for the highly compensated
group for the Plan Year, and the actual deferral ratios for all
Employees who are not Highly Compensated Employees but are eligible
for Elective Contributions for the Plan Year shall be averaged to
determine the actual deferral percentage for the nonhighly
compensated group for the Plan Year.
(d) Actual deferral percentage tests. For a Plan Year,
at least one of the following tests must be satisfied.
(i) the highly compensated group's actual deferral
percentage for the Plan Year does not exceed 125% of
the prior year actual deferral percentage for the prior
year nonhighly compensated group; or
(ii) the excess of the actual deferral percentage
for the highly compensated group for the Plan Year over
the prior year actual deferral percentage for the prior
year nonhighly compensated group does not exceed two
percentage points, and the actual deferral percentage
for the highly compensated group for the Plan Year does
not exceed twice the prior year actual deferral
percentage of the prior year nonhighly compensated
group.
For purposes of satisfying the above tests for a Plan
Year, the "prior year actual deferral percentage for the
prior year nonhighly compensated group" refers to the
actual percentage determined for the immediately
preceding Plan Year for the nonhighly compensated group
existing during such preceding Plan
-39-
<PAGE> 46
Year. Notwithstanding the foregoing, in satisfying the
above tests, the Administrator may elect, in accordance
with Code section 401(k)(3) and applicable Regulations,
to use the actual deferral percentage for the nonhighly
compensated group determined for the current Plan Year.
(e) Adjustments by Administrator. If, prior to the time
all Elective Contributions for a Plan Year have been contributed to
the Trust, the Administrator determines that Elective Contributions
are being made at a rate which will cause the Code section
401(k)(3) limits to be exceeded for the Plan Year, the
Administrator may, in its sole discretion, limit the amount of
Elective Contributions to be made with respect to one or more
Highly Compensated Employees for the balance of the Plan Year by
suspending or reducing Elective Contribution elections to the
extent the Administrator deems appropriate. Any Elective
Contributions which would otherwise be made to the Trust shall
instead be paid to the affected Participant in cash.
(f) Excess contributions. If the Code section 401(k)(3)
limits have not been met for a Plan Year after all contributions
for the Plan Year have been made, the Administrator will determine
the amount of excess contributions with respect to Participants who
are Highly Compensated Employees in the manner prescribed by Code
section 401(k)(9) and by applicable Regulations.
(g) Distribution of excess contributions. Unless a
Participant elects to have his or her excess contributions
recharacterized, the Participant's excess contributions, adjusted
for income, will be designated by the Employer as a distribution of
excess contributions and distributed to the Participant. The income
allocable to excess contributions is equal to the allocable gain or
loss for the Plan Year, but not the allocable gain or loss for the
period between the end of the Plan Year and the date of distribution
(the "gap period"). Income allocable to excess contributions for the
Plan Year shall be determined by multiplying the gain or loss
attributable to the Participant's Elective Contribution Account and
Qualified Nonelective Contribution Account balances by a fraction,
the numerator of which is the excess contributions for the
Participant for the Plan Year, and the denominator of which is the
sum of the Participant's Elective Contribution Account and Qualified
Nonelective Contribution Account balances as of the beginning of the
Plan Year plus the Participant's Elective
-40-
<PAGE> 47
Contributions and Qualified Nonelective Contributions for the Plan
Year. Distribution of excess contributions will be made after the
close of the Plan Year to which the contributions relate, but
within 12 months after the close of such Plan Year. Excess
contributions shall be treated as annual additions under the Plan,
even if distributed under this paragraph.
(h) Recharacterization. In lieu of receiving a
distribution of excess contributions, a Highly Compensated Employee
may elect, at such time and in such manner as the Administrator may
prescribe, to have all or a portion of his or her excess
contributions recharacterized as Employee Contributions. Excess
contributions may be recharacterized only to the extent that
additional Employee Contributions otherwise could have been
contributed by the Highly Compensated Employee for the Plan Year
under the Plan, and must be recharacterized no later than two and
one-half months after the close of the Plan Year to which the
recharacterization relates. If a Highly Compensated Employee elects
recharacterization, the Administrator will (i) timely provide such
forms to the Highly Compensated Employee and his or her Employer,
and take such other action, as the Internal Revenue Service shall
require, and (ii) account for such recharacterized amounts as
contributions by the Highly Compensated Employee for purposes of
Code sections 72 and 6047. Recharacterized excess contributions
shall continue to be treated as Elective Contributions for all
purposes under the Plan other than determination of the Code
section 401(k)(3) and 401(m) limits.
(i) Special rules. For purposes of recharacterizing or
distributing excess contributions, the amount of excess
contributions that may be recharacterized or distributed with
respect to a Highly Compensated Employee for a Plan Year shall be
reduced by the amount of excess deferrals previously distributed to
the Highly Compensated Employee for his or her taxable year ending
with or within such Plan Year.
(j) Recordkeeping requirement. The Administrator, on
behalf of the Employer, shall maintain such records as are
necessary to demonstrate compliance with the Code section 401(k)(3)
limits including the extent to which Qualified Nonelective
Contributions are taken into account in determining the actual
deferral ratios.
(k) Effect on Matching Contributions. A Participant's
Elective Contributions which are returned or recharacterized as a
result of the Code section 401(k)(3) limits for a Plan Year shall
not be taken into account in determining the amount of Matching
Contributions to be made for the Participant's benefit for the Year.
To the extent Matching Contributions have already been made with
respect to the Elective Contributions at the time the Elective
Contributions are determined to be excess contributions, such
Matching Contributions shall be forfeited to the extent they are not
vested, or distributed to the extent they
-41-
<PAGE> 48
are vested to the Participant at the same time as the Elective
Contributions are returned or recharacterized.
(l) Excise tax where failure to correct. If the excess
contributions are not corrected within 2 1/2 months after the close
of the Plan Year to which they relate, the Employer will be liable
for a 10 percent excise tax on the amount of excess contributions
attributable to them, to the extent provided by Code section 4979.
Qualified Nonelective Contributions properly taken into account
under this Section for the Plan Year may enable the Plan to avoid
having excess contributions, even if the contributions are made
after the close of the 2 1/2 month period.
(m) Special rule for early participation. Effective
January 1, 1999, the Administrator may elect to follow the rules
set forth in Code section 401(k)(3)(F) for purposes of determining
the applicable Code section 401(k)(3) limits.
11.5. CODE SECTION 401(M) LIMITS.
(a) In General. Employee and Matching Contributions
made under the Plan are subject to the limits of Code section
401(m), as more fully described below. The Plan provisions relating
to the 401(m) limits are to be interpreted and applied in
accordance with Code sections 401(m) and 401(a)(4), which are
hereby incorporated by reference, and in such manner as to satisfy
such other requirements relating to Code section 401(m) as may be
prescribed by the Secretary of the Treasury from time to time. The
term "Compensation" as used in this Section has the meaning given
such term by Code section 414(s) as determined by the Administrator
in its sole discretion.
(b) Actual contribution ratios. For each Plan Year, the
Administrator will determine the "actual contribution ratio" for
each Participant who is eligible for Employee Contributions or
Matching Contributions. The actual contribution ratio shall be the
ratio, calculated to the nearest one-hundredth of one percent, of
the sum of the Employee Contributions, Matching Contributions, and
Qualified Nonelective Contributions which are not treated as
Elective Contributions made by and on behalf of the Participant for
the Plan Year, to the Participant's Compensation for the Plan Year.
For purposes of determining a Participant's actual contribution
ratio,
(i) an Employee Contribution shall be taken into
account for the Plan Year in which the Contribution is
made to the Trust. A payment by the Participant to an
agent of the Trustee (including the Employer) shall be
treated as a contribution to the Trust at the time of
payment to the agent if the funds are transmitted to
the Trust within the time allotted by the Plan. A
Matching Contribution will be taken into account only
if the Contribution is allocated to a
-42-
<PAGE> 49
Participant's Account as of a date within the Plan
Year, is actually paid to the Trust no later than 12
months after the close of the Plan Year, and is made on
behalf of a Participant on account of the Participant's
Elective Contributions for the Plan Year;
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible
to have matching contributions or employee
contributions (including amount treated as matching
contributions) allocated to his or her accounts under
two or more plans maintained by an Affiliated Employer
which may be aggregated for purposes of Code sections
410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined as if such
contributions are made under a single plan, and if two
or more of the plans have different Plan Years, all
plans ending with or within the same calendar year
shall be treated as a single plan;
(iii) the applicable period for determining
Compensation for each Participant for a Plan Year shall
be the 12-month period ending on the last day of such
Plan Year; provided, that to the extent permitted under
Regulations, the Administrator may choose, on a uniform
basis, to treat as the applicable period only that
portion of the Plan Year during which the individual
was a Participant.
(iv) Elective Contributions not applied to satisfy
the Code section 401(k)(3) limits and Qualified
Nonelective Contributions not treated as Elective
Contributions may be treated as Matching Contributions
to the extent permitted by Regulation section
1.401(m)-1(b)(5).
(v) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or
410(b) only if aggregated with one or more other plans
with the same plan year, or if one or more other plans
with the same Plan Year satisfy such Code sections only
if aggregated with this Plan, then this section shall
be applied by determining the actual deferral ratios as
if all such plans were a single plan;
(vi) Elective Contributions which are
recharacterized as Employee Contributions shall be
taken into account as Employee Contributions for the
Plan Year that includes the time at which the excess
contributions are includible in the gross income of the
Participant;
(c) Actual contribution percentages. The actual
contribution ratios for all Highly Compensated Employees who are
eligible for Employee Contributions or Matching Contributions for a
Plan Year shall be averaged to determine the actual contribution
percentage for the highly compensated group for the Plan Year, and
the
-43-
<PAGE> 50
actual contribution ratios for all Employees who are not Highly
Compensated Employees but are eligible for Employee Contributions
or Matching Contributions for the Plan Year shall be averaged to
determine the actual contribution percentage for the nonhighly
compensated group for the Plan Year.
(d) Actual contribution percentage tests. For a Plan
Year, at least one of the following tests must be satisfied:
(i) the highly compensated group's actual
contribution percentage for the Plan Year does not
exceed 125% of the prior year actual contribution
percentage for the prior year nonhighly compensated
group; or
(ii) the excess of the actual contribution
percentage for the highly compensated group for the
Plan Year over the prior year actual contribution
percentage for the prior year nonhighly compensated
group does not exceed two percentage points, and the
actual contribution percentage for the highly
compensated group for the Plan Year does not exceed
twice the prior year actual contribution percentage for
the prior year nonhighly compensated group.
For purposes of satisfying the above tests for a Plan Year, the
"prior year actual contribution percentage for the prior year
nonhighly compensated group" refers to the actual contribution
percentage determined for the immediately preceding Plan Year for
the nonhighly compensated group existing during such preceding Plan
Year. Notwithstanding the foregoing, in satisfying the above tests,
the Administrator may elect, in accordance with Code section
401(m)(2) and applicable regulations, to use the actual contribution
percentage for the nonhighly compensated group calculated for the
current Plan Year.
(e) Multiple use test. In the event that (i) the actual
deferral percentage and actual contribution percentage for the
highly compensated group each exceed 125% of the respective actual
deferral and actual contribution percentages for the nonhighly
compensated group, and (ii) the sum of the actual deferral
percentage and the actual contribution percentage for the highly
compensated group exceeds the "aggregate limit" within the meaning
of Regulation section 1.401(m)-2(b)(3), the Administrator shall
reduce the actual contribution ratios of Highly Compensated
Employees who had both an actual deferral ratio and an actual
contribution ratio for the Plan Year to the extent required by such
section and in the same manner as described below.
(f) Adjustments by Administrator. If, prior to the time
all Employee Contributions or Matching Contributions for a Plan
Year have been contributed to the Trust, the Administrator
determines that such Contributions are being made at a rate
which will cause the Code section 401(m) limits to be exceeded for
the Plan Year, the
-44-
<PAGE> 51
Administrator may, in its sole discretion, limit the amount of such
Contributions to be made with respect to one or more Highly
Compensated Employees for the balance of the Plan Year by limiting
the amount of such Contributions to the extent the Administrator
deems appropriate.
(g) Excess aggregate contributions. If the Code section
401(m) limits have not been satisfied for a Plan Year after all
contributions for the Plan Year have been made, the excess of the
aggregate amount of the Employee and Matching Contributions (and
any Qualified Nonelective Contribution or elective deferral taken
into account in computing the actual contribution percentages)
actually made on behalf of Highly Compensated Employees for the
Plan Year over the maximum amount of such contributions permitted
under Code section 401(m)(2)(A) shall be considered to be "excess
aggregate contributions". The Administrator shall determine the
amount of excess aggregate contributions made with respect to each
Participant who is a Highly Compensated Employee in the manner
prescribed by Code section 401(m)(6)(C) and by applicable
Regulations.
(h) Distribution of excess aggregate contributions. A
Participant's excess aggregate contributions, adjusted for income
will be designated by the Employer as a distribution of excess
aggregate contributions, and distributed to the Participant. The
income allocable to excess aggregate contributions is equal to the
allocable gain or loss for the taxable year of the individual, but
not the allocable gain or loss for the period between the end of
the taxable year and the date of distribution (the "gap period").
Income allocable to excess aggregate contributions for the taxable
year shall be determined by multiplying the gain or loss
attributable to the Participant's Matching Contribution Account and
Employee Contribution Account balances by a fraction, the numerator
of which is the excess aggregate contributions for the Participant
for the Plan Year, and the denominator of which is the sum of the
Participant's Matching Contribution Account and Employee
Contribution Account balances as of the beginning of the Plan Year
plus the Participant's Employee Contributions and Matching
Contributions for the Plan Year. Distribution of excess aggregate
contributions will be made after the close of the Plan Year to
which the contributions relate, but within 12 months after the
close of such Plan Year. Excess aggregate contributions shall be
treated as employer contributions for purposes of Code sections
401(a)(4), 404, and 415 even if distributed from the Plan.
(i) Special Rules. For purposes of distributing excess
aggregate contributions, distribution of excess aggregate
contributions (in each case adjusted for income or loss) shall be
accomplished in the following order:
(1) unmatched Employee Contributions;
-45-
<PAGE> 52
(2) matched Employee Contributions and
Matching Contributions attributable to such Employee
Contributions; and
(3) Matching Contributions attributable to
Elective Contributions.
(j) Recordkeeping requirement. The Administrator, on
behalf of the Employer, shall maintain such records as are
necessary to demonstrate compliance with the Code section 401(m)
limits, including the extent to which Elective Contributions and
Qualified Nonelective Contributions are taken into account in
determining the actual contribution ratios.
(k) Excise tax where failure to correct. If the excess
aggregate contributions are not corrected within 2 1/2 months after
the close of the Plan Year to which they relate, the Employer will
be liable for a 10 percent excise tax on the amount of excess
aggregate contributions attributable to them, to the extent
provided by Code section 4979. Qualified Nonelective Contributions
properly taken into account under this section for the Plan Year
may enable the Plan to avoid having excess aggregate contributions,
even if the contributions are made after the close of the 2 1/2
month period.
(l) Special rule for early participation. Effective
January 1, 1999, the Administrator may elect to follow the rules
set forth in Code section 401(m)(5)(C) for purposes of determining
the applicable Code section 401(m) limits.
-46-
<PAGE> 53
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS.
12.1. PROVISIONS TO APPLY. The provisions of this Article shall
apply for any top-heavy Plan Year notwithstanding anything to the contrary in
the Plan.
12.2. MINIMUM CONTRIBUTION. For any Plan Year which is a top-heavy
plan year, the Employer shall contribute to the Trust a minimum contribution on
behalf of each Participant who is not a key employee for such year and who has
not separated from service from the Affiliated Employers by the end of the Plan
Year, regardless of whether or not the Participant has elected to make Elective
Contributions for the Year. The minimum contribution shall, in general, equal
three percent (3%) of each such Participant's compensation (within the meaning
of Code section 416), but shall be subject to the following special rules:
(a) if the largest contribution on behalf of a key employee
for such year, taking into account only Elective Contributions,
Qualified Nonelective Contributions, Matching Contributions, and
Discretionary Contributions (including forfeitures applied to
reduce any such Employer Contributions), is equal to less than 3%
of the key employee's compensation, such lesser percentage shall be
the minimum contribution percentage for Participants who are not
key employees. This special rule shall not apply, however, if the
Plan is required to be included in an aggregation group and enables
a defined benefit plan to meet the requirements of Code section
410(a)(4) or 410.
(b) No minimum contribution will be required with respect to
a Participant who is also covered by another top-heavy defined
contribution plan of an Affiliated Employer which meets the vesting
requirements of Code section 416(b) and under which the Participant
receives the top-heavy minimum contribution.
(c) If a Participant is also covered by a top-heavy defined
benefit plan of an Affiliated Employer, "5%" shall be substituted
for "3%" above in determining the minimum contribution.
(d) The minimum contribution with respect to any Participant
who is not a key employee for the particular year will be offset by
any Discretionary Contributions and any Qualified Nonelective
Contributions (including forfeitures applied to reduce
Discretionary Contributions), but not any other type of
contribution, otherwise made for the Participant's benefit for such
year.
-47-
<PAGE> 54
(e) If additional minimum contributions are required under
this Section, the Administrator will establish (or cause the
Trustee to establish) a special Account to which such contributions
will be allocated. Distributions from such Account will be made in
accordance with the rules applicable to Discretionary Contribution
Accounts.
(f) A minimum contribution required under this Section shall
be made even though, under other Plan provisions, the Participant
would not otherwise be entitled to receive an 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 contributions or
Elective Contributions to the Plan, or (iii) compensation less than
a stated amount.
12.3. SPECIAL VESTING SCHEDULE. Each Employee who is a Participant
at any time during a top-heavy plan year shall be vested in not less than the
percentage of each of his or her Accounts as set forth in the following vesting
schedule (or the Plan's general vesting schedule, if faster), based on the
Participant's Years of Service for Vesting:
<TABLE>
<CAPTION>
Years of Service Vested
for Vesting Percentage
---------------- ----------
<S> <C>
fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 but fewer than 6 80%
6 or more 100%
</TABLE>
Further, no decrease in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as top-heavy changes for any Plan Year. If the
vesting schedule under the Plan shifts in or out of the above schedule for any
Plan Year because of the Plan's top-heavy status, such shift shall be
considered to be an amendment to the vesting schedule for all purposes of the
Plan.
12.4. ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the Code
section 415 limits, the definitions of "defined contribution plan fraction" and
"defined benefit plan fraction" contained therein shall be modified, for any
Plan Year which is a top-heavy Plan Year, by substituting "1.0" for "1.25" in
Code sections 415(e)(2)(B) and 415(e)(3)(B).
12.5. DEFINITIONS. For purposes of these top-heavy provisions, the
following terms have the following meanings:
-48-
<PAGE> 55
(a) "key employee" means a key employee described in
Code section 416(i)(l), and "non-key employee" means any
employee who is not a key employee (including employees who
are former key employees);
(b) "top-heavy plan year" means a Plan Year if any of
the following conditions exist:
(i) the top-heavy ratio for the Plan exceeds 60
percent and the Plan is not part of any required
aggregation group or permissive aggregation group of
plans;
(ii) 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 percent; or
(iii) the Plan is 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 percent.
(c) "top-heavy ratio":
(i) if the Affiliated Employer maintains one or
more defined contribution plans (including any
Simplified Employee Pension Plan) and the Affiliated
Employer has not maintained any defined benefit plan
which during the 5-year period ending on the
determination date(s) 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 on the
determination date(s) (including any part of any account
balance distributed in the 5-year period ending on the
determination date(s)), and the denominator of which is
the sum of all account balances (including any part of
an account balance distributed in the 5-year period
ending on the determination date(s), both computed in
accordance with Code section 416. Both the numerator and
the denominator of the top-heavy ratio are increased 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 Code section 416.
(ii) If the Affiliated Employer maintains one or
more defined contribution plans (including any
Simplified Employee Pension Plan) and the Affiliated
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on
the determination date(s) has or
-49-
<PAGE> 56
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 the account balances under the aggregated
defined contribution plan or plans for all key
employees , determined in accordance with (i) 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(s), 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 all accrued benefits
under the defined benefit plan or plans for all
participants as of the determination date(s), all
determined in accordance with Code section 416. The
accrued benefits under a defined benefit plan in both
the numerator and denominator of the top-heavy ratio
are increased for any distribution of an accrued
benefit made in the 5-year period ending on the
determination date.
(iii) For purposes of (i) and (ii) 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 Code section 416 for the first
and second plan years of a defined benefit plan. The
account balances and accrued benefits of a participant
(A) who is not a key employee but who was a key
employee in a prior year, or (B) who has not been
credited with at least one hour of service with any
employer maintaining the plan at any time during the 5-
year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Code section 416. Deductible employee
contributions will not be taken into account for
purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances and
accrued benefits will be calculated with reference to
the determination dates that fall within the same
calendar year.
(iv) The accrued benefit of a participant other
than a key employee shall be determined under (A) the
method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by
the employer, or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of
Code section 411(b)(1)(C).
(d) The "permissive aggregation group" is the required
aggregation group of plans plus any other plan or plan of the
employer which, when considered as a group with the required
aggregation group, would continue to satisfy the requirements
of Code sections 401(a)(4) and 410.
-50-
<PAGE> 57
(e) The "required aggregation group" is (i) each
qualified plan of the employer in which at least one key
employee participates or participated at any time during the
determination period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the
employer which enables a plan described in (i) to meet the
requirements of Code sections 401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio, the
valuation date shall be the last day of the applicable plan
year.
(g) the term "determination date" means, with respect
to the initial plan year of a plan, the last day of such plan
year and, with respect to any other plan year of a plan, the
last day of the preceding plan year of such plan. The term
"applicable determination date" means, with respect to the
Plan, the determination date for the Plan Year of reference
and, with respect to any other plan, the determination date
for any plan year of such plan which falls within the same
calendar year as the applicable determination date of the
Plan.
-51-
<PAGE> 58
ARTICLE 13. MISCELLANEOUS.
13.1. EXCLUSIVE BENEFIT RULE. No part of the corpus or income of the
Trust forming part of the Plan will be used for or diverted to purposes other
than for the exclusive benefit of each Participant and Beneficiary, except as
otherwise provided under Code section 401(a)(13) and the provisions of the Plan
relating to Qualified Domestic Relations Orders, the payment of reasonable
expenses of administering the Plan, the return of contributions upon
nondeductibility or mistake of fact, or the failure of the Plan to qualify
initially.
13.2. LIMITATION OF RIGHTS. Neither the establishment of the Plan or
the Trust, nor any amendment thereof, nor the creation of any fund or account,
nor the payment of any benefits, will be construed as giving to any Participant
or other person any legal or equitable right against any Employer or
Administrator or Trustee, except as provided herein, and in no event will the
terms of employment or service of any Participant be modified or in any way be
affected hereby. It is a condition of the Plan, and each Participant expressly
agrees by his or her participation herein, that each Participant will look
solely to the assets held in the Trust for the payment of any benefit to which
he or she is entitled under the Plan.
13.3. NONALIENABILITY OF BENEFITS. The benefits provided hereunder
will not be subject to the voluntary or involuntary alienation, assignment,
garnishment, attachment, execution or levy of any kind, and any attempt to
cause such benefits to be so subjected will not be recognized, except to such
extent as may be permitted or required under Code section 401(a)(13), as
determined by the Administrator.
13.4. VETERANS' REEMPLOYMENT AND BENEFIT RIGHTS. Notwithstanding any
provision of the Plan to the contrary, contributions, benefits and service
credit with respect to military service will be provided in accordance with
Code section 414(u).
13.5. GOVERNING LAW. The Plan and Trust will be construed,
administered and enforced according to the laws of the Commonwealth of Virginia
to the extent such laws are not preempted by ERISA.
IN WITNESS WHEREOF, the Plan Sponsor has caused this instrument to be
signed in its name and on its behalf by its duly authorized officer, this ____
day of ______________, 1998.
-52-
<PAGE> 59
ORBITAL SCIENCES CORPORATION
By:
-------------------------
-53-
<PAGE> 1
EXHIBIT 4.2
DRAFT 12/10/98
MAGELLAN SYSTEMS' RETIREMENT SAVINGS PLAN
(1998 RESTATEMENT)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. "Accounts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2. "Administrator" or "Plan Administrator" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. "Affiliated Employer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4. "Annuity" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5. "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6. "Board of Directors" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.7. "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.8. "Compensation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9. "Contribution Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.10. "Disabled " . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.11. "Discretionary Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12. "Elective Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13. "Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.14. "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.15. "Employee Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.16. "Employer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.17. "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.18. "Highly Compensated Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.19. "Hour of Service" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.20. "Matching Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.21. "Normal Retirement Age" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.22. "Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.23. "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.24. "Plan Sponsor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.25. "Plan Year" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.26. "Qualified Domestic Relations Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.27. "Qualified Nonelective Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.28. "Regulation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.29. "Rollover Contribution" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.30. "Section" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.31. "Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.32. "Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.33. "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.34. "Year of Service for Participation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.35. "Year of Service for Vesting" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE 3. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2. Duration of Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3. Reclassification of employment status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 4. CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1. Elective Contributions and Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Form and Manner of Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3. Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4. Discretionary Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5. Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.6. Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.7. Crediting of and Time for Making Contributions . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8. Certain Limits Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9. Return of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.10. Establishment of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 5. PARTICIPANT ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1. Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2. Adjustment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3. Investment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 6. VESTING OF ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1. Immediate Vesting of Certain Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2. Deferred Vesting of Other Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3. Special Vesting Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4. Distribution of Less Than Entire Vested Percentage . . . . . . . . . . . . . . . . . . . . . . 14
6.5. Changes in Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6. Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7. DISTRIBUTIONS AND WITHDRAWALS PRIOR TO
SEPARATION FROM SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.1. Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2. Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3. Withdrawals After Age 59 1/2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4. Withdrawals on Account of Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.5. Spousal Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.6. Distributions Required by a Qualified Domestic Relations Order . . . . . . . . . . . . . . . . 19
7.7. Loans to Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.8. Loan Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
8.1. Separation from Service for Reasons Other Than Death . . . . . . . . . . . . . . . . . . . . 21
8.2. Time of Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.3. Certain Distribution Options Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.4. Distributions After a Participant's Death. . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5. Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.6. Certain Dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.7. Optional Direct Transfer of Eligible Rollover Distributions . . . . . . . . . . . . . . . . . 23
ARTICLE 9. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1. Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.2. Powers of Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.3. Effect of Interpretation or Determination . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.4. Nondiscriminatory Exercise of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.5. Reliance on Tables, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.6. Claims and Review Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.7. Indemnification of Designated Representatives, Administrator and Assistants . . . . . . . . . 25
9.8. Payment of Plan expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.9. Correcting operational defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10. AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3. Distributions upon Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.4. Merger or Consolidation of Plan; Transfer of Plan Assets . . . . . . . . . . . . . . . . . . 27
10.5. Merger of Other Tax Qualified Defined Contribution Plans into the Plan. . . . . . . . . . . . 27
10.6. Treatment of Certain Transferred Participants . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 11. LIMITS ON CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1. Code Section 404 Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2. Code Section 415 Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.3. Code Section 402(g) Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4. Code Section 401(k)(3) Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.5. Code Section 401(m) Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.1. Provisions to apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.2. Minimum Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12.3. Special Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.4. Adjustment to Limitation on Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.5. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE 13. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.1. Exclusive Benefit Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.2. Limitation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.3. Nonalienability of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.4. Veterans' reemployment and benefit rights . . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
-iv-
<PAGE> 6
ARTICLE 1. INTRODUCTION.
1.1. IN GENERAL. This document amends, restates and replaces the
provisions of the Magellan Systems' Retirement Savings Plan (1995 Restatement).
Except as otherwise provided in the Plan, the provisions of this document are
generally effective as of January 1, 1998. Any provision of the Plan which is
required by law to be effective as of a date prior to January 1, 1998 is
effective as of such date. The rights to benefits of an individual who was a
Participant in the Plan prior to January 1, 1998 and who is not credited with
an Hour of Service after that date will be determined in accordance with the
provisions of the Plan as in effect from time to time prior to January 1, 1998.
The Plan and its related Trust are intended to qualify as a profit-sharing plan
and trust under Code sections 401(a) and section 501(a), and the cash or
deferred arrangement forming part of the Plan is intended to qualify under Code
section 401(k). The Plan is also intended to be an ERISA section 404(c) plan.
The provisions of the Plan and Trust shall be construed and applied
accordingly. The purpose of the Plan is to provide benefits to Participants in
a manner consistent and in compliance with such Code sections and Title I of
ERISA.
1.2. DEFINED TERMS. All capitalized terms used in the following
provisions of the Plan have the meanings given them under the Article entitled
"Definitions."
<PAGE> 7
ARTICLE 2. DEFINITIONS.
Wherever used in the Plan, the following terms have the following
meanings:
2.1. "ACCOUNTS" mean, for any Participant, the accounts established
under the Plan to which contributions made for the Participant's benefit, and
any allocable income, expense, gain and loss, are allocated. References to a
Participant's Elective Contribution Account, Matching Contribution Account,
Discretionary Contribution Account, Employee Contribution Account, and Rollover
Contribution Account, respectively, refer to those Accounts established for a
Participant to which the respective contributions are allocated. References to
a Participant's Qualified Nonelective Contribution Account refer to the Account
to which Qualified Nonelective Contributions made on behalf of the Participant
are allocated. References to a Participant's Employer Stock Account refer to
that portion, if any, of the Participant's Account which is invested in shares
of the Plan Sponsor's stock. Such Participant's Employer Stock Account shall be
credited with dividends paid, if any.
2.2. "ADMINISTRATOR" OR "PLAN ADMINISTRATOR" means the Plan Sponsor
or such other person, committee of persons or entities appointed by the Plan
Sponsor to serve as Plan Administrator. The Administrator shall also have the
authority to appoint persons and entities to act as designated representatives
on its behalf in administering the Plan pursuant to its provisions.
2.3. "AFFILIATED EMPLOYER" means (a) the Plan Sponsor, (b) any
corporation that is a member of a controlled group of corporations (as defined
in Code section 414(b)) of which the Plan Sponsor is also a member, (c) any
trade or business, whether or not incorporated, that is under common control
(as defined in Code section 414(c)) with the Plan Sponsor, (d) any trade or
business that is a member of an affiliated service group (as defined in Code
section 414(m)) of which the Plan Sponsor is also a member, or (e) to the
extent required by Regulations issued under Code section 414(o), any other
organization; provided, that the term "Affiliated Employer" shall not include
any corporation or unincorporated trade or business prior to the date on which
such corporation, trade or business satisfies the affiliation or control tests
of (b), (c) (d) or (e) above. In identifying any "Affiliated Employers" for
purposes of the Code section 415 limits, the definitions in Code sections
414(b) and (c) shall be modified as provided in Code section 415(h).
2.4. "ANNUITY" means a series of payments made over a specified
period of time which, for a fixed annuity are, of equal, specified amounts, and
for a variable annuity increase or decrease to reflect changes in investment
performance of the underlying portfolio.
-2-
<PAGE> 8
2.5. "BENEFICIARY" means any person entitled to receive benefits
under the Plan upon the death of a Participant.
2.6. "BOARD OF DIRECTORS" means the Plan Sponsor's board of directors
or other comparable governing body, or persons, committees or entities
delegated by the Board with authority to act on its behalf.
2.7. "CODE" means the Internal Revenue Code of 1986, as amended from
time to time. Reference to any section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation which
amends, supplements or replaces such section or subsection, and also includes
reference to any Regulation issued pursuant to or with respect to such section
or subsection.
2.8. "COMPENSATION" means, except as otherwise specifically provided
in the Plan, the amount required to be reported for the Participant on Form W-2
as wages for federal income tax purposes, but (i) increased by any amounts that
would have been received by the individual as wages from an Affiliated Employer
but for an election under Code sections 125 and 401(k) and (ii) decreased by
the following amounts to the extent they are included as wages:
(A) cash awards or other cash payments made under
any stock option plan maintained by an Affiliated Employer;
(B) cash payments made under a bonus, incentive or
similar plan in lieu of the distribution of stock;
(C) payments under supplemental unemployment plans
or other severance arrangements and termination allowances of
an Affiliated Employer;
(D) reimbursement by an Affiliated Employer for
expenses, including without limitation, moving expenses,
travel pay, and tax assistance payments;
(E) cash payments received under an Affiliated
Employer's flexible benefits program; and
(F) any other prizes, merchandise awards, special
incentive or cash bonus awards from an Affiliated Employer.
Compensation shall include only that Compensation which is actually paid to the
Participant during the applicable Plan Year. A Participant's Compensation
shall be limited for all purposes under the Plan to the dollar amount
determined from time to time under section
-3-
<PAGE> 9
401(a)(17) of the Code. The Administrator may prescribe such rules or
procedures as it determines appropriate to apply said limit consistent with the
requirements of Code section 401(a)(17) and the Regulations promulgated
thereunder.
2.9. "CONTRIBUTION AGREEMENT" means an agreement entered into between
a Participant and his or her Employer pursuant to which Elective and/or
Employee Contributions shall be made for the Participant's benefit.
2.10. "DISABLED " means a Participant's incapacity to engage in any
substantial gainful activity because of a medically determinable physical or
mental impairment which can be expected to result in death, or to be of long,
continued and indefinite duration. Such determination shall be made by the
Administrator with the advice of competent medical authority. All Participants
in similar circumstances will be treated alike.
2.11. "DISCRETIONARY CONTRIBUTION" means a contribution (other than a
Qualified Nonelective Contribution) made for the benefit of a Participant by
the Employer in the discretion of the Plan Sponsor.
2.12. "ELECTIVE CONTRIBUTION" means a pretax contribution made to the
Plan for the benefit of a Participant pursuant to a Contribution Agreement.
2.13. "ELIGIBLE EMPLOYEE" means any Employee who is employed by the
Employer, other than (a) an Employee covered by a collective bargaining
agreement, unless such agreement specifically provides for participating in the
Plan, (b) an Employee at one or more employment units (i.e., an identifiable
division, subsidiary or affiliate, subdivision, plant, location, or group of
Employees) determined by the Plan Sponsor to be ineligible to participate in
the Plan, (c) an Employee employed on a casual or temporary basis, (d) an
Employee who is a foreign national designated by the Plan Sponsor as ineligible
to participate in the Plan and (e) a leased employee within the meaning of Code
section 414(n).
2.14. "EMPLOYEE" means any individual employed by an Affiliated
Employer, including any leased employee. but only to the extent and for the
purposes required under Code section 414(n).
2.15. "EMPLOYEE CONTRIBUTION" means the voluntary after-tax
contribution made by a Participant under the Plan.
2.16. "EMPLOYER" means Magellan Systems Corporation and any successor
organization to such Employer which elects to continue the Plan and such other
Affiliated Employer that shall adopt the Plan with the approval of the Plan
Sponsor.
-4-
<PAGE> 10
2.17. "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended, and any successor statute or statutes of
similar import.
2.18. "HIGHLY COMPENSATED EMPLOYEE" means an employee of an
Affiliated Employer who is a "highly compensated employee" within the meaning
of Code section 414(q), the provisions of which are expressly incorporated
herein.
-5-
<PAGE> 11
2.19. "HOUR OF SERVICE" means, with respect to any Employee,
(a) Each hour for which the Employee is paid or entitled
to payment for the performance of duties for an Affiliated Employer,
each such hour to be credited to the Employee for the computation
period in which the duties were performed;
(b) Each hour for which the Employee is directly or
indirectly paid or entitled to payment by any Affiliated Employer
(including payments made or due from a trust fund or insurer to which
the Affiliated Employer contributes or pays premiums) on account of a
period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation,
holiday, illness, incapacity, disability, layoff, jury duty, military
duty, or leave of absence, each such hour to be credited to the
Employee for the computation period in which such period of time
occurs, subject to the following rules;
(i) No more than 501 Hours of Service shall be
credited under this paragraph (b) to the Employee on account
of any single continuous period during which the Employee
performs no duties;
(ii) Hours of Service shall not be credited under
this paragraph (b) to an Employee for a payment which solely
reimburses the Employee for medically related expenses
incurred by the Employee, or which is made or due under a plan
maintained solely for the purpose of complying with applicable
worker's compensation, unemployment compensation or disability
insurance laws; and
(iii) If the period during which the Employee
performs no duties falls within two or more computation
periods, and if the payment made on account of such period is
not calculated on the basis of units of time, the number of
Hours of Service credited with respect to such period shall be
allocated between not more than the first two such periods
based on the amount of the payment divided by the Employee's
most recent hourly rate of Compensation before the period
during which no duties were performed;
(c) Each hour not counted under paragraph (a) or (b) for
which back pay, irrespective of mitigation of damages, has been either
awarded or agreed to be paid by any Affiliated Employer, each such
hour to be credited to the Employee for the computation period to
which the award or agreement for back pay pertains, provided that
crediting of Hours of Service under this paragraph (c) with respect to
periods
-6-
<PAGE> 12
described in paragraph (b) above shall be subject to the limitations
and special rules set forth in clauses (i), (ii) and (iii) of
paragraph (b); and
(d) Each noncompensated hour while an Employee during a
period of absence from any Affiliated Employer (i) in the armed forces
of the United States to the extent such hour is required to be
credited under Code section 414(u), and (ii) on family leave to the
extent such hour is required to be credited under the Family Medical
Leave Act of 1994.
Hours of Service to be credited to an Employee under (a), (b) and (c) above
will be calculated and credited pursuant to paragraphs (b) and (c) of Section
2530.200b-2 of the Department of Labor Regulations, which are incorporated
herein by reference. The Hours of Service to be credited to an Employee during
a period described in (d) above will be determined by the Administrator with
reference to the individual's most recent normal work schedule, or at the rate
of eight Hours per day in the event the Administrator is unable to establish
such schedule.
2.20. "MATCHING CONTRIBUTION" means a contribution made for the
benefit of a Participant under the Plan on account of the Participant's
Elective Contribution.
2.21. "NORMAL RETIREMENT AGE" means age 65.
2.22. "PARTICIPANT" means each Eligible Employee who participates in
the Plan pursuant to its provisions.
2.23. "PLAN" means the Magellan Systems' Retirement Savings Plan.
2.24. "PLAN SPONSOR" means Orbital Sciences Corporation. The "Plan
Sponsor" may delegate any of its responsibilities under the Plan to any person,
committee of persons or entity.
2.25. "PLAN YEAR" means the calendar year.
2.26. "QUALIFIED DOMESTIC RELATIONS ORDER" means any judgment, decree
or order (including approval of a property settlement agreement) which
constitutes a "qualified domestic relations order" within the meaning of Code
section 414(p). A judgment, decree or order shall not be considered not to be
a Qualified Domestic Relations Order merely because it requires a distribution
to an
-7-
<PAGE> 13
alternate payee (or the segregation of accounts pending distribution
to an alternate payee) before the Participant is otherwise entitled to a
distribution under the Plan.
2.27. "QUALIFIED NONELECTIVE CONTRIBUTION" means a contribution made
in the discretion of the Plan Sponsor which is designated by the Plan Sponsor
as a Qualified Nonelective Contribution.
2.28. "REGULATION" means a regulation issued by the Department of
Treasury, including any final regulation, proposed regulation, temporary
regulation, as well as any modification of any such regulation contained in any
notice, revenue procedure, or similar pronouncement issued by the Internal
Revenue Service.
2.29. "ROLLOVER CONTRIBUTION" means a contribution made by a
Participant which satisfies the requirements for rollover contributions as set
forth in the Plan.
2.30. "SECTION" means a section of the Plan.
2.31. "TRUST" means The Magellan Systems' Savings Trust established
in conjunction with the Plan, together with any and all amendments thereto.
2.32. "TRUSTEE" mean the person or persons who are at any time the
acting Trustee under the Trust.
2.33. "VALUATION DATE" means such day or days during the Plan Year as
specified by the Administrator.
2.34. "YEAR OF SERVICE FOR PARTICIPATION" means each 12 consecutive
month period, beginning with the Employee's employment commencement date with
an Affiliated Employer and each anniversary thereof, during which an Employee
is credited with 1000 or more Hours of Service.
2.35. "YEAR OF SERVICE FOR VESTING" means each calendar year during
which an Employee is credited with 1000 or more Hours of Service. A "Year of
Service for Vesting" will also mean each year of service, if any, credited to
an Employee by the Administrator on a nondiscriminatory basis for service
rendered by the Employee to a prior employer.
-8-
<PAGE> 14
ARTICLE 3. ELIGIBILITY AND PARTICIPATION.
3.1. ELIGIBILITY. Each Eligible Employee shall become a
Participant as of the date he or she first meets the following requirements:
(a) is scheduled to work 1000 hours during a 12-consecutive
month period, or is not so scheduled but in fact completes a Year of
Service for Participation, and
(b) attains age 21.
3.2. DURATION OF PARTICIPATION. An individual who has become a
Participant under the Plan will remain a Participant for as long as an Account
is maintained under the Plan for his or her benefit, or until his or her death,
if earlier. Notwithstanding the preceding sentence and unless otherwise
expressly provided for under the Plan, no contributions shall be made, nor
shall any forfeitures be allocated with respect to a Participant who is not an
Eligible Employee. In the event a Participant remains an Employee but ceases
to be an Eligible Employee and becomes ineligible to receive contributions,
such Employee will again become eligible to receive contributions immediately
upon returning to the class of Eligible Employees. In the event an Employee
who is not an Eligible Employee becomes an Eligible Employee, such Employee may
become a Participant immediately if such Employee has otherwise satisfied the
minimum age and service requirements (if any) and would have otherwise
previously become a Participant. A Participant or former Participant who is
reemployed as an Eligible Employee shall again become eligible to receive
contributions immediately upon reemployment.
3.3. RECLASSIFICATION OF EMPLOYMENT STATUS. Notwithstanding
anything herein to the contrary, an individual who is not characterized or
treated as a common law employee of the Employer shall not be eligible to
participate in the Plan. However, in the event that such an individual is
reclassified or deemed to be reclassified as a common law employee of the
Employer, the individual shall be eligible to participate in the Plan as of the
Entry Date coinciding with or next following the actual date of such
reclassification (to the extent such individual otherwise qualifies as an
Eligible Employee hereunder). If the effective date of any such
reclassification is prior to the actual date of such reclassification, in no
event shall the reclassified individual be eligible to participate in the Plan
retroactively to the effective date of such reclassification.
-9-
<PAGE> 15
ARTICLE 4. CONTRIBUTIONS.
4.1. ELECTIVE CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS. Each
Participant may enter into a Contribution Agreement with the Employer to make
Elective Contributions to the Trust in such amounts and subject to such limits
as the Administrator may specify. By agreeing to Elective Contributions, the
Participant agrees to a reduction in pay in the amount designated and the
Employer agrees in consideration of such reduction to contribute an equivalent
amount to the Trust. Effective as of January 1, 1999, each Participant may
make Employee Contributions in such manner, at such time and in such amounts as
the Administrator may specify.
4.2. FORM AND MANNER OF ELECTIONS. Each Contribution Agreement
shall be in a form prescribed or approved by the Administrator, and may be
entered into, changed or revoked by the Participant, with such prior notice as
the Administrator may prescribe, as of such time or times as the Administrator
may prescribe. Elective Contributions will commence (or recommence) under a
Contribution Agreement at such times as the Administrator may prescribe.
4.3. MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution for a Participant with respect to his or her Elective
Contributions in such amount and in such manner as the Board of Directors shall
determine.
The Employer may designate at the time of contribution that all or a
portion of such Matching Contributions be treated as Qualified Nonelective
Contributions.
4.4. DISCRETIONARY CONTRIBUTIONS. The Employer may make a
contribution under the Plan for any Plan Year of an amount that the Board of
Directors shall determine.
Such Discretionary Contributions shall be allocated as of the last day
of the Plan Year for which such contributions are made to each Participant who
is an Eligible Employee of the Employer on the last day of the Plan Year,
regardless of his or her active status in making Elective Contributions during
any portion of the Plan Year.
For each Plan Year the contribution shall be allocated to each
Participant in the proportion that the Compensation (increased by the amount of
any bonus awards during the Plan Year used in the calculation) paid to each
Participant during the Plan Year bears to the
-10-
<PAGE> 16
Compensation (increased by the amount of any bonus awards during the
Plan Year used in the calculation) paid to all such Participants.
The contribution as described above, for any Plan Year, shall be paid
to the Trust after the end of the Plan Year as soon as administratively
possible after its approval by the Board of Directors, but in any event not
later than the date which is prescribed by law for filing the Employer's income
tax return, including any extension thereof.
The Employer may designate at the time of such a Discretionary
Contribution that all or a portion thereof be treated as a Qualified
Nonelective Contribution.
4.5. QUALIFIED NONELECTIVE CONTRIBUTIONS. To satisfy the Code
section 401(k)(3) limits with respect to Elective Contributions or the Code
section 401(m) limits with respect to Matching Contributions, the Plan Sponsor,
in its discretion, may determine whether a Qualified Nonelective Contribution
shall be made to the Trust for a Plan Year. If the Plan Sponsor decides to
make a Qualified Nonelective Contribution, the Plan Sponsor will designate the
Participants on whose behalf the Contribution is to be made, the amount to be
contributed for each designated Participant, and the amount to be contributed
by the Employer. Qualified Nonelective Contributions shall be fully vested and
subject to the same distribution rules as Elective Contributions as of the time
such Qualified Nonelective Contributions are made to the Plan.
4.6. ROLLOVER CONTRIBUTIONS. The Administrator in its sole
discretion shall determine if Rollover Contributions are to be permitted. If
permitted, an Eligible Employee may make a Rollover Contribution to the Plan
upon demonstration to the Administrator that the contribution is eligible for
transfer to the Plan pursuant to the rollover or direct transfer provisions of
the Code. In accordance with rules and procedures prescribed by the
Administrator, a rollover contribution may consist of cash or other property,
including without limitation a note evidencing a loan made by the Eligible
Employee under another employer's tax qualified plan.
4.7. CREDITING OF AND TIME FOR MAKING CONTRIBUTIONS. Elective
Contributions and Employee Contributions shall be paid by the Employer to the
Trust as soon as administratively possible after the payroll date on which such
Contributions would have been paid to the Participant but for the Contribution
Agreement, but in no event later than the deadline prescribed under the
applicable provisions of the Code and ERISA.
Any Matching Contributions, Discretionary Contributions, or Qualified
Nonelective Contributions for a Plan Year will be contributed to the Trust at
such time as the Plan Sponsor determines, but in any event no later than the
time prescribed by law (including extensions) for filing the Employer's federal
income tax return for its taxable year in or with which the Plan
-11-
<PAGE> 17
Year ends. In addition, Qualified Nonelective Contributions and Matching
Contributions for a Plan Year must be made no later that the last day of the
12-month period immediately following the Plan Year. Elective Contributions,
Matching Contributions, Discretionary Contributions, Employee Contributions and
Qualified Nonelective Contributions will be credited to the Accounts of eligible
Participants for whom they are made as soon as practicable after they are paid
to the Trust.
4.8. CERTAIN LIMITS APPLY. All contributions to the Plan are
subject to the applicable limits set forth under Code sections 401(k), 402(g),
401(m), 404, and 415, as further described elsewhere in the Plan. In addition,
certain minimum allocations may be required under Code section 416 as also
further described elsewhere in the Plan.
4.9. RETURN OF CONTRIBUTIONS. If any contribution by the Employer
to the Trust is
(a) made by reason of a good faith mistake of fact, or
(b) believed by the Employer in good faith to be deductible
under Code section 404, but the deduction is disallowed, the Trustee
shall, upon request by the Employer, return to the Employer the excess
of the amount contributed over the amount, if any, that would have
been contributed had there not occurred a mistake of fact or a mistake
in determining the deduction. Such excess shall be reduced by the
losses of the Trust attributable thereto, if and to the extent such
losses exceed the gains and income attributable thereto. In no event
shall the return of a contribution hereunder cause any Participant's
Accounts to be reduced to less than they would have been had the
mistaken or nondeductible amount not been contributed. No return of a
contribution hereunder shall be made more than one year after the
mistaken payment of the contribution, or disallowance of the
deduction, as the case may be.
4.10. ESTABLISHMENT OF TRUST. The Plan Sponsor will establish a
Trust to accept and hold contributions made under the Plan. The Trust shall be
governed by an agreement between the Plan Sponsor and the Trustee, the terms of
which shall be consistent with the Plan provisions and intended qualification
under Code sections 401(a) and 501(a).
-12-
<PAGE> 18
ARTICLE 5. PARTICIPANT ACCOUNTS.
5.1. ACCOUNTS. The Administrator will establish and maintain (or
cause the Trustee to establish and maintain) for each Participant, such
Accounts as are necessary to carry out the purposes of this Plan.
5.2. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date, each
Account will be adjusted to reflect the fair market value of the assets
allocated to the Account. In so doing,
(a) each Account balance will be increased by the amount of
contributions, income and gain allocable to such Account since the
prior Valuation Date; and
(b) each Account balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable to
the Account since the prior Valuation Date.
Income, expense, gain and loss which are generated by a particular
investment within the Trust shall be allocated to an Account participating in
such investment in the ratio to which the portion of the Account which is
invested in the fund bears to the entire amount of Trust assets invested in the
fund. Any expenses relating to a specific Account or Accounts, or commissions
or sales charges with respect to an investment in which the Account
participates, may be charged to the particular Account or Accounts.
5.3. INVESTMENT OF ACCOUNTS. Participant's Accounts will be
invested in accordance with the provisions of the Plan and Trust. Under the
Plan and Trust, each Participant shall have the right to direct the Trustee to
invest his or her Accounts from among such investment options, including
without limitation, fixed, equity and balanced fund investments, as the Plan
Administrator may make available from time to time. In accordance with the
procedures established by the Plan Administrator, the Participant shall elect
to have a specified percentage invested in one or more investment funds, as
long as the designated percentage for each fund is a whole number, and the sum
of the percentages allocated is equal to 100%. A Participant may also
designate amounts invested pursuant to this section to be transferred between
the investment options in accordance with the procedures established by the
Plan Administrator. Notwithstanding the above, the transfer of amounts between
investment options shall be subject to the rules of the investment funds in
which the Participant's Account is invested or is to be invested.
The Plan Sponsor may also permit (or require) all or a portion of
Participants' Accounts to be invested in "stock" of the Plan Sponsor. If
investment of such stock is
-13-
<PAGE> 19
permitted or required, the Plan Administrator shall prescribe rules and
procedures for such investments consistent with the applicable requirements of
the Code, ERISA and securities laws.
The Plan is intended to be an "ERISA section 404(c) plan" as described
in section 404(c) of ERISA and Regulations section 2550.404c-1, and shall be
administered and interpreted in a manner consistent with that intent. The
investment direction requirements of Regulation section
2550.404c-1(b)(2)(i)(B)(1)(iv) and (b)(2)(i)(A) and the requirements relating
to the investment alternatives under the Plan are intended to be satisfied by
this Section, in each case taking into account related communications to
Participants and beneficiaries under the summary plan description for the Plan
and other communications. For purposes of ERISA section 404(c), the
"identified plan fiduciary" obligated to comply with Participant and
Beneficiary investment instructions (except as provided in such section and
Regulations thereunder), the identified plan fiduciary obligated to provide
Participants and Beneficiaries with the materials set forth in Regulations
section 2550.404c-1(b)(2)(i)(B) and the identified plan fiduciary obligated to
comply with the confidentiality requirements and procedures under Regulations
section 2550.404c-1(d)(2)(ii)(E)(4)(viii) relating to employer securities shall
be the Administrator. The Administrator may decline to implement Participant
and Beneficiary investment instructions which would result in a prohibited
transaction described in ERISA section 406 or section 4975 of the Code or which
would generate income that would be taxable to the Plan.
-14-
<PAGE> 20
ARTICLE 6. VESTING OF ACCOUNTS.
6.1. IMMEDIATE VESTING OF CERTAIN ACCOUNTS. A Participant will at
all times be 100% vested in his or her Elective Contribution Account, Qualified
Nonelective Contribution Account, Employee Contribution Account and Rollover
Contribution Account.
6.2. DEFERRED VESTING OF OTHER ACCOUNTS. Each Participant will
have a vested interest in a percentage of his or her Matching Contribution
Account and Discretionary Contribution Account determined in accordance with
the following schedule and based on his or her Years of Service for Vesting:
<TABLE>
<CAPTION>
Years of Service Vested
for Vesting Percentage
----------- ----------
<S> <C>
fewer than 1 0%
1 but fewer than 2 33%
2 but fewer than 3 66%
3 or more 100%
</TABLE>
6.3. SPECIAL VESTING RULES. Notwithstanding any provision of the
Plan to the contrary, a Participant will be fully vested in 100% of the
Accounts maintained for his or her benefit upon the happening of any one of the
following events:
(a) the Participant attained the Normal Retirement Age while
an Employee;
(b) the Participant died or became Disabled while an
Employee;
(c) the termination or partial termination of the Plan or
the complete cessation of contributions to the Plan as determined by
the Administrator consistent with the applicable requirements of the
Code, but only to the extent that the Participant is affected by such
termination, partial termination, or complete discontinuance.
6.4. DISTRIBUTION OF LESS THAN ENTIRE VESTED PERCENTAGE. If a
distribution has been made to a Participant from an Account at a time when he
or she has a vested percentage in such Account equal to less than 100%, at any
relevant time after the distribution, the Participant's vested percentage will
be equal to (P*(AB+D))-D, where P is the Participant's vested percentage at
-15-
<PAGE> 21
the relevant time, AB is the Account balance at the relevant time,
and D is the amount of the distribution.
6.5. CHANGES IN VESTING SCHEDULE. If the Plan's vesting schedule
is amended, or the Plan is amended in any way that affects directly or
indirectly the computation of a Participant's vested percentage (or if the Plan
changes to or from a top-heavy vesting schedule), each Participant who is
negatively affected by such amendment and who has completed three (3) Years of
Service for Vesting at the time of such amendment may elect, within the period
described below, to have his or her vested percentage determined without regard
to such amendment or change. The period referred to in the preceding sentence
will begin on the date the amendment of the vesting schedule is adopted and
will end 60 days thereafter, or, if later, 60 days after the later of
(a) the date on which such amendment becomes effective; and
(b) the date on which the Participant is issued written
notice of such amendment by the Administrator.
6.6. FORFEITURES.
(a) In general. Any portion of a Participant's Account in
which he or she is not vested upon separation from service for any
reason will be forfeited as of the earliest of
(i) the expiration of 5 consecutive Plan Years
during each of which the Participant does not complete 500
hours of service,
(ii) termination of employment, or
(iii) the complete distribution of the vested
portion of the Account if such distribution is made as a
result of the Participant's separation from service.
(b) Certain Restorations. Notwithstanding the preceding
paragraph, if a Participant forfeits any portion of an Account as a
result of the complete distribution of the vested portion of the
Account or his or her termination from employment but thereafter
returns to the employ of an Affiliated Employer prior to the close of
the fifth consecutive Plan Year in which the Participant does not
complete at least 500 Hours of Service, the amount forfeited will be
recredited to the Participant's Account; provided, if the forfeiture
was a result of a complete distribution of the vested portion of his
or her Account, he or she repays to the Plan the entire amount
previously distributed,
-16-
<PAGE> 22
without interest, prior to the earlier of (i) the close of the fifth
consecutive Plan Year in which the Participant does not complete at least 500
Hours of Service or (ii) the fifth anniversary of the date on which the
Participant is reemployed. The Participant's vested percentage in the amount
so recredited will thereafter be determined under the terms of the Plan as if
no forfeiture had occurred. The money required to effect the restoration of a
Participant's Account shall come from other Accounts forfeited during the Plan
Year of restoration, and to the extent such funds are inadequate, from a
special contribution by the Participant's Employer.
(c) Application of forfeitures. Any forfeitures occurring in
a Plan Year with respect to an Employee
(i) may be applied to the restoration of any
Accounts of Employees of the Employer as required for such
Year; and
(ii) may be applied by the Employer in its
discretion against the Employer's Matching Contributions or
Discretionary Contributions or to pay reasonable expenses of
administering the Plan, at the earliest opportunity after such
forfeitures become available.
-17-
<PAGE> 23
ARTICLE 7.
DISTRIBUTIONS AND WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE.
7.1. EMPLOYEE CONTRIBUTIONS. A Participant may make a withdrawal
from his or her Employee Contribution Account, but with such prior notice and
subject to such other limitations as the Administrator may prescribe. Any
withdrawal under this Section shall be in the amount specified by the
Participant up to the value of such Account, determined as of the Valuation
Date next following the Administrator's receipt of written notice of the
withdrawal, and shall be made as soon as practicable after such Valuation Date.
7.2. HARDSHIP WITHDRAWALS.
(a) Immediate and heavy financial need. A Participant may
make a withdrawal from his or her Accounts in the event of an
immediate and heavy financial need arising from
(i) expenses for medical care described in Code
section 213(d) previously incurred by the Participant, his or
her spouse, children or dependents (as defined in Code section
152) or necessary care for these persons to obtain such
medical care;
(ii) costs directly related to the purchase of a
principal residence of the Participant (excluding mortgage
payments);
(iii) the payment of tuition and related educational
fees for the next 12-months of post-secondary education for
the Participant, his or her spouse, children or dependents (as
defined in Code section 152);
(iv) payments necessary to prevent the eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage on that principal residence; or
(v) expenses for the funeral of a member of the
Participant's family.
The Administrator's determination of whether there is an immediate and
heavy financial need as defined above shall be made solely on the basis of
written evidence furnished by the Participant. Such evidence must also
indicate the amount of such need.
-18-
<PAGE> 24
(b) Withdrawal of amount necessary to meet need. As soon as
practicable after the Administrator's determination that an immediate
and heavy financial need exists with respect to the Participant and
that the Participant has obtained all other distributions (other than
hardship distributions) and all nontaxable loans currently available
under the Plan and all other plans maintained by the Affiliated
Employers, the Administrator will direct the Trustee to pay to the
Participant the amount necessary to meet the need created by the
hardship (but not in excess of the value of the vested portion of the
Participant's Accounts, determined as of the Valuation Date next
following the Administrator's determination). The amount necessary to
meet the need may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably anticipated to
result from the distribution. Withdrawal from the Participant's
Accounts in the event of a hardship will be made in the following
order:
(i) from the portion of his or her Employee
Contribution Account attributable to income,
(ii) from his or her Elective Contribution Account,
(provided that no portion of an Elective Contribution Account
attributable to income earned after December 31, 1988 may be
distributed due to a financial hardship). In no event may a
hardship withdrawal be made from a Qualified Nonelective
Contribution Account.
(iii) from his or her Rollover Contribution Account,
(iv) from his or her Matching Contribution Account,
(v) from his or her Discretionary Contribution
Account.
(c) Effect of hardship distribution. If a Participant
receives a hardship withdrawal from his or her Elective Contribution
Account, then any Elective Contribution election, Employee
Contribution election, or any other cash-or-deferred or employee
contribution election in effect with respect to the Participant under
the Plan or any other qualified plan maintained by an Affiliated
Employer shall be suspended for the 12-month period beginning with the
pay period after the hardship withdrawal is approved. In addition,
the amount of Elective Contributions made for the benefit of the
Participant, together with any elective deferrals made on behalf of
the Participant under any other plan maintained by the Affiliated
Employers for the calendar year immediately following the calendar
year of the hardship withdrawal must not exceed the applicable limit
under Code section 402(g) for such next calendar year, less the amount
of such contributions made on behalf of the Participant for the
calendar
-19-
<PAGE> 25
year of the hardship distribution. Withdrawals made pursuant
to this section of the Plan may not be repaid.
7.3. WITHDRAWALS AFTER AGE 59 1/2. A Participant who is an
Employee and has attained age 59 1/2 may make a withdrawal from any one or more
of his or her Accounts for any reason, but with such prior notice as the
Administrator may prescribe. Any such withdrawal shall be in the amount
specified by the Participant, up to the value of the Participant's vested
portion of the particular Account determined as of the Valuation Date next
following the Administrator's receipt of notice of the withdrawal. Payment to
the Participant shall be made as soon as practicable after such Valuation Date.
7.4. WITHDRAWALS ON ACCOUNT OF DISABILITY. A Participant who
becomes entitled to disability benefits under his or her Employer's long term
disability plan but who has not otherwise separated from service from an
Affiliated Employer may make a withdrawal from any one or more of his or her
Accounts for any reason, but with such prior notice as the Administrator may
prescribe. Any such withdrawal shall be in the amount specified by the
Participant, up to the value of the Participant's vested portion of the
particular Account determined as of the Valuation Date next following the
Administrator's receipt of notice of the withdrawal. Payment to the
Participant shall be made as soon as practicable after such Valuation Date.
7.5. SPOUSAL CONSENT. Notwithstanding the foregoing provisions of
this Article, a married Participant must obtain the consent of his or her
spouse for a withdrawal of his or her Account if such consent is required by
Code sections 401(a)(11) and 417 or by the Plan Administrator.
7.6. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS
ORDER. To the extent required by a Qualified Domestic Relations Order, the
Administrator shall make distributions from a Participant's Accounts to
alternate payees named in such order in a manner consistent with the
distribution options otherwise available under the Plan, regardless of whether
the Participant is otherwise entitled to a distribution at such time under the
Plan.
7.7. LOANS TO PARTICIPANTS. The Plan Administrator may make a bona
fide loan to a Participant (with his or her spouse's consent, if applicable),
in an amount which, when added to the outstanding balance of all other loans to
the Participant from all qualified plans of the Employer, does not exceed the
lesser of (a) $50,000 reduced by the excess of the Participant's highest
outstanding loan balance during the 12 months preceding the date on which the
loan is made over the outstanding loan balance on the date the new loan is
made, or (b) 50% of the Participant's vested interest in his or her Account.
-20-
<PAGE> 26
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided, however, that
all loans granted hereunder:
(a) are available to all Participants and Beneficiaries, who
are parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis;
(b) are not made available to Highly Compensated Employees on
a basis greater than the basis made available to other Employees;
(c) bear a reasonable rate of interest;
(d) are adequately secured;
(e) to the extent required by Code sections 401(a)(11) or 417
or by the Plan Administrator, are made only after a Participant
obtains the consent of his spouse, if any, to use his Participant's
Account as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the
date on which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting spouse or
any subsequent spouse with respect to that loan. A new consent shall
be required if the Participant's Account is used for renegotiation,
extension, renewal or other revision of the loan; and
(f) are made in accordance with and subject to all of the
provisions of this Article.
7.8. LOAN PROCEDURES. The Plan Administrator shall establish a
written set of procedures, set forth in the summary plan description, by which
all loans will be administered. Such rules, which are incorporated herein by
reference, will include, but not be limited to, the following:
(a) the person or persons authorized to administer the loan
program, identified by name or position;
(b) the loan application procedure;
(c) the basis for approving or denying loans;
-21-
<PAGE> 27
(d) any limits on the types of loans permitted;
(e) the procedure for determining a "reasonable" interest
rate;
(f) acceptable collateral;
(g) default conditions; and
(h) steps which will be taken to preserve Plan assets in the
event of default.
-22-
<PAGE> 28
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE
8.1. SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH.
Following a Participant's separation from the service of the Affiliated
Employers for any reason other than death, each Participant may elect, with his
or her spouse's consent if required by Code sections 401(a)(11) or 417 or by
the Plan Administrator, a distribution in the form of an Annuity, one or more
cash payments, or a combination of the above. An Annuity form of distribution
will be accomplished by applying the specified portion of the Participant's
Account balance to the purchase of an annuity contract from an insurance
company. The type of Annuity to be provided under the contract will be
selected by the Participant, with his or her spouse's consent if required by
Code sections 410(a)(11) or 417 or by the Plan Administrator, from alternatives
made available by the Plan Administrator.
Distributions in the form of Plan Sponsor stock may also be made
available by the Administrator at the Administrator's sole discretion for
election by Participants and are limited to the value of the Participant's
Employer Stock Account.
The amount of the distribution shall be determined as of the Valuation
Date that immediately precedes or coincides with the date distribution is to be
made as described below.
All amounts payable under the Plan will be payable in accordance with
the applicable requirements of Code section 401(a)(9), including the incidental
benefit rule, all of which are expressly incorporated herein by reference.
8.2. TIME OF DISTRIBUTIONS. Subject to the applicable requirements
of Code section 401(a)(9), distribution with respect to a Participant's
separation from service normally will be made at such time as the Participant
elects to receive, or commence to receive, his or her distribution, with his or
her spouse's consent if required by Code sections 401(a)(11) or 417 or by the
Plan Administrator. Such election will be made in such form and such manner as
the Administrator may prescribe.
Unless the Participant otherwise elects consistent with the
requirements of Code section 401(a)(9), however, distribution under this
Section in all events will be made no later than the 60th day after the close
of the Plan Year in which occurs the later of the Participant's separation from
service or the Participant's attainment of the Normal Retirement Age.
8.3. CERTAIN DISTRIBUTION OPTIONS PROTECTED. Notwithstanding any
provision to the contrary, in addition to the
-23-
<PAGE> 29
distribution options described in this Plan, in the event that any distribution
option available under the Plan prior to this restatement is an optional form
of benefit within the meaning of Code section 411(d)(6), such option shall
continue to be available to the extent required by such section.
8.4. DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH. If a Participant
dies, the Participant's Beneficiary may elect to receive a distribution of the
vested portion of the Participant's Accounts, if any, in the form of an
Annuity, one or more cash payments or a combination of the above.
In accordance with Code section 401(a)(9)(B), benefits payable upon
the death of the Participant before his or her benefit payments have begun will
be distributed in full within five years after the death of the Participant
unless an exemption specified in Code section 401(a)(9)(B) applies, in which
case benefits may be payable over the period (and starting at such time)
specified in Code section 401(a)(9)(B). Benefits, if any, payable upon the
death of the Participant after his or her benefit payments have begun will be
distributed at least as rapidly as under the method of distribution in effect
for the Participant at the time of his or her death.
8.5. DESIGNATION OF BENEFICIARY. Subject to the provisions of this
Section, a Participant's Beneficiary shall be the person or persons and entity
or entities, if any, designated by the Participant from time to time on a form
approved by the Administrator. In the absence of an effective beneficiary
designation, a Participant's Beneficiary shall be his or her surviving spouse,
if any, or if none, the Participant's estate. A non-spouse beneficiary
designation by a Participant who is married at the time of his or her death
shall not be effective unless;
(a) prior to the Participant's death, the Participant's
surviving spouse consented to and acknowledged the effect of the
Participant's designation of a specific non-spouse Beneficiary
(including any class of Beneficiaries or any contingent Beneficiaries)
on a written form approved by the Administrator and witnessed by a
notary public or a duly authorized Plan representative, or
(b) it is established to the satisfaction of the
Administrator that spousal consent may not be obtained because there
is no spouse, because the spouse has died (evidenced by a certificate
of death), because the spouse cannot be located (based on information
supplied by a government agency or independent investigator), or
because of such other circumstances as the Secretary of the Treasury
may prescribe, or
-24-
<PAGE> 30
(c) the spouse had earlier executed a general consent form
permitting the Participant (i) to select from among certain specified
beneficiaries without any requirement of further consent by the spouse
(and the Participant designates a Beneficiary from the specified
list), or (ii) to change his or her beneficiary without any
requirement of further consent by the spouse. Any such general
consent shall be on a form approved by the Administrator, and must
acknowledge that the spouse has the right to limit consent to a
specific beneficiary and that the spouse voluntarily elects to
relinquish such right.
In the event a spouse is legally incompetent to give consent, the
spouse's legal guardian, even if the guardian is the Participant, may give
consent on behalf of the spouse. Any consent and acknowledgment by (or on
behalf of) a spouse, or the establishment that the consent and acknowledgment
cannot be obtained, shall be effective only with respect to such spouse, but
shall be irrevocable once made.
8.6. CERTAIN DISPOSITIONS. In connection with the disposition by
the Employer of at least 85 percent of the assets used by the Employer in a
trade or business to an unrelated corporation or entity, or the disposition of
the Employer's interest in a subsidiary to an unrelated entity, distribution of
the entire vested Account balance of an Employee who continues employment with
such unrelated corporation or entity may be made to the Employee in a single
sum, but only if such unrelated corporation or entity does not maintain the
Plan after the disposition, and only if such distribution is otherwise made in
accordance with Code section 401(k)(10).
8.7. OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Administrator, to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. The terms used in this
Section will have the same meaning as under Code section 401(a)(31).
-25-
<PAGE> 31
ARTICLE 9. ADMINISTRATION.
9.1. ADMINISTRATOR. The Plan will be administered by the
Administrator. The Administrator shall have the discretionary authority to
appoint designated representatives to serve at its pleasure. The Administrator
will be a "named fiduciary" for purposes of section 402(a)(1) of ERISA with
authority to control and manage the operation and administration of the Plan,
and will be responsible for complying with all of the reporting and disclosure
requirements of Part 1 of Subtitle B of Title I of ERISA. The Administrator
will not, however, have any authority over the investment of assets of the
Trust in its capacity as Administrator.
Each fiduciary of the Plan shall discharge his or her duties hereunder
solely in the interest of the Participants and their Beneficiaries and for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and defraying reasonable expenses of administering the Plan. Each fiduciary
shall act with the care, skill, prudence and diligence under the circumstances
that a prudent person acting in a like capacity and familiar with such matters
would use in conducting an enterprise of like character and with like aims, in
accordance with the documents and instruments governing the Plan, insofar as
such documents and instruments are consistent with this standard.
Nothing in the Plan shall be construed to prevent any fiduciary from
receiving any benefit to which he or she may be entitled as a Participant or
Beneficiary in the Plan, so long as the benefit is computed and paid on a basis
that is consistent with the terms of the Plan as applied to all other
Participants and Beneficiaries. Nor shall the Plan be interpreted to prevent
any Fiduciary from receiving any reasonable compensation for services rendered,
or for the reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan; except that no person so serving who
already receives full-time pay from the Employer shall receive compensation
from the Plan, except for reimbursement of expenses properly and actually
incurred.
9.2. POWERS OF ADMINISTRATOR. The Administrator will have full
discretionary power to administer the Plan in all of its details, subject to
the requirements of ERISA. The Administrator's discretionary power will
include, but will not be limited to, the following authority:
(a) to make and enforce such rules and regulations as it
deems necessary or proper for the efficient administration of the Plan
or required to comply with applicable law;
(b) to interpret the Plan;
-26-
<PAGE> 32
(c) to decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan;
(d) to compute the amounts to be distributed under the Plan,
and to determine the person or persons to whom such amounts will be
distributed;
(e) to authorize the payment of distributions;
(f) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required
under the Code and applicable regulations, or under other federal,
state or local law and regulations;
(g) to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants and
consultants as may be required or desired to assist in administering
the Plan; and
(h) by written instrument, to allocate and delegate its
fiduciary responsibilities in accordance with section 405 of ERISA.
(i) such other authority as may be assigned or delegated to
it from time to time by the Board of Directors.
9.3. EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation
of the Plan or other determination with respect to the Plan by the
Administrator shall be final and conclusive on all persons in the absence of
clear and convincing evidence that the Administrator acted arbitrarily and
capriciously.
9.4. NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.
9.5. RELIANCE ON TABLES, ETC. In administering the Plan, the
Administrator will be entitled, to the extent permitted by law, to rely
conclusively on all tables, valuations, certificates, opinions and reports
which are furnished by any accountant, trustee, counsel or other expert who is
employed or engaged by the Administrator or by the Plan Sponsor on the
Administrator's behalf.
-27-
<PAGE> 33
9.6. CLAIMS AND REVIEW PROCEDURES. The Administrator shall adopt
procedures for the filing and review of claims in accordance with section 503
of ERISA.
9.7. INDEMNIFICATION OF DESIGNATED REPRESENTATIVES, ADMINISTRATOR
AND ASSISTANTS. The Employer agrees, jointly and severally, to indemnify and
defend to the fullest extent of the law any Employee or former Employee (a) who
serves or has served as Administrator, (b) who has been appointed to assist the
Administrator in administering the Plan, or (c) to whom the Administrator has
delegated any of its duties or responsibilities against any liabilities,
damages, costs and expenses (including attorneys' fees and amounts paid in
settlement of any claims approved by the Plan Sponsor) occasioned by any act or
omission to act in connection with the Plan, unless such act or omission to act
is in bad faith or involved willful misconduct.
9.8. PAYMENT OF PLAN EXPENSES. The Administrator may direct the
Trustee to pay from the Trust any and all expenses of administering the Plan,
to the extent such expenses are reasonable. The Administrator will determine
in its sole discretion what constitutes a reasonable expense of administering
the Plan, and whether such expenses shall be paid from the Trust. Any such
expenses not paid from the Trust shall be paid by the Employer as determined by
the Administrator. To the extent permitted by the Code and ERISA, the
Administrator may direct the Trustee to reimburse the Employer from the Trust
for a reasonable expense of administering the Plan which is paid by the
Employer prior to a determination with respect to such expense.
9.9. CORRECTING OPERATIONAL DEFECTS. The Administrator will have
the full discretionary power and authority to correct any "operational defect"
in any manner or by any method it deems appropriate in its sole discretion in
order to cause the Plan (i) to operate in accordance with its terms or, (ii) to
maintain its tax-qualified status under the Code. For purposes of this
Section, an "operational defect" is any operational or administrative action
(or inaction) in connection with the Plan which, in the judgment of the
Administrator, fails to conform with the terms of the Plan or causes or could
cause the Plan to lose its tax-qualified status under the Code.
-28-
<PAGE> 34
ARTICLE 10. AMENDMENT AND TERMINATION.
10.1. AMENDMENT. The Plan Sponsor or its delegate reserves the
power at any time or times to amend the provisions of the Plan and Trust to any
extent and in any manner that it may deem advisable. However, the Plan Sponsor
will not have the power:
(a) to amend the Plan or Trust in such manner as would cause
or permit any part of the assets of the Trust to be diverted to
purposes other than for the exclusive benefit of each Participant and
his or her Beneficiary, unless such amendment is required or permitted
by law, governmental regulation or ruling; or
(b) to amend the Plan or Trust retroactively in such a manner
as would reduce the accrued benefit of any Participant, except as
otherwise permitted or required by law.
10.2. TERMINATION. The Plan Sponsor has established the Plan and
authorized the establishment of the Trust with the bona fide intention and
expectation that contributions will be continued indefinitely, but may
discontinue contributions under the Plan or terminate the Plan at any time
without liability whatsoever for any such discontinuance or termination. In
addition, the Employer will have no obligation or liability whatsoever to
maintain the Plan for any given length of time and may cease to be an Employer
in a manner acceptable to the Plan Sponsor.
10.3. DISTRIBUTIONS UPON TERMINATION OF THE PLAN. Upon termination
of the Plan by the Plan Sponsor, the Trustee will distribute to each
Participant (or other person entitled to distribution) the value of the
Participant's Accounts in a single sum as soon as practicable following such
termination. The amount of such distribution shall be determined as of the
Valuation Date immediately preceding or coinciding with the date distribution
is to be made. Notwithstanding the preceding sentence, if any Affiliated
Employer maintains or establishes a defined contribution plan (other than an
ESOP or a SEP) that benefits at least 2 percent of the employees in the
terminated Plan, Accounts shall be distributed to Participants and their
Beneficiaries only in a manner consistent with Code sections
401(k)(2)(B)(i)(I), (III) and (IV), and 401(k)(10)(A)(ii) and (iii). In such
case, a Participant's Accounts will be transferred, without the Participant's
consent, to the other plan pending distribution.
10.4. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In
case of any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other
-29-
<PAGE> 35
plan, provision must be made so that each Participant would, if the
Plan 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.
10.5. MERGER OF OTHER TAX QUALIFIED DEFINED CONTRIBUTION PLANS INTO
THE PLAN. From time to time, the Plan Sponsor or its delegate may permit, in
such manner as it deems appropriate, a tax qualified defined contribution plan
of another employer (the "other plan") to be merged with and into the Plan. In
connection with such merger, all of the provisions of the Plan are substituted
for the provisions of the other plan, except those provisions of the other plan
which constitute a protected benefit right or feature within the meaning of
Code section 411(d)(6), which provisions of the other plan shall continue to be
in effect under the Plan to the extent required by Code section 411(d)(6) and
are incorporated herein by law. Furthermore, the rights to benefits of an
individual who was a participant in the other plan prior to the effective date
of the merger will be determined in accordance with the provisions of the other
plan as in effect from time to time prior to the effective date of the merger.
10.6. TREATMENT OF CERTAIN TRANSFERRED PARTICIPANTS.
(a) Optional Direct Transfer to ORBCOMM Retirement Savings
Plan. Notwithstanding any provision of the Plan to the contrary, each
Plan Participant who becomes an employee of ORBCOMM Global, L.P. or
any of its affiliates shall be entitled to elect, with his or her
spouse's consent if required, to have the Trustee of the Plan transfer
to the trustee of the ORBCOMM Retirement Savings Plan all assets held
in his or her Accounts under the Plan, vested and unvested. A
Participant who makes such election shall cease to be a Participant
under the Plan on such transfer, shall have no further rights under
the Plan with respect to such transferred amounts, and shall look
solely to the provisions of the ORBCOMM Retirement Savings Plan for
such rights. A Participant who does not make the election described
in this Section will continue to be a Participant in the Plan to the
extent provided under the Plan and subject to all applicable Plan
provisions, including without limitation, the Plan's forfeiture and
distribution rules.
(b) Optional Direct Transfer to Orbital Imaging Corporation
Retirement Savings Plan. Notwithstanding any provision of the Plan to
the contrary, each Plan Participant who becomes an employee of Orbital
Imaging Corporation or any of its affiliates shall be entitled to
elect, with his or her spouse's consent if required, to have the
Trustee of the Plan transfer to the trustee of the Orbital Imaging
Corporation Retirement Savings Plan all assets held in his or her
Accounts under the Plan, vested
-30-
<PAGE> 36
and unvested. A Participant who makes such election shall cease to be
a Participant under the Plan on such transfer, shall have no further
rights under the Plan with respect to such transferred amounts, and
shall look solely to the provisions of the Orbital Imaging Corporation
Retirement Savings Plan for such rights. A Participant who does not
make the election described in this Section will continue to be a
Participant in the Plan to the extent provided under the Plan and
subject to all applicable Plan provisions, including without limitation,
the Plan's forfeiture and distribution rules.
(c) Mandatory Direct Transfer to Plans of Certain Affiliated
Employers. Notwithstanding any provision to the contrary, on behalf of
each Plan Participant who becomes an employee of an Affiliated
Employer which has not adopted the Plan and which has its own
tax-qualified defined contribution plan which permits receipt of
transferred amounts from this Plan, the Trustee of the Plan shall
transfer to the trustee of such Affiliated Employer's plan all assets
held in his or her Accounts under the Plan, vested and unvested. Such
Participant shall cease to be a Participant under the Plan on such
transfer, shall have no further rights under the Plan with respect to
such transferred amounts, and shall look solely to the provisions of
the transferee plan for such rights.
(d) Direct Transfer From Plans of Certain Related Employers.
Notwithstanding any provision of the Plan to the contrary, the Trustee
of the Plan shall accept a transfer from the tax-qualified defined
contribution plan of an Affiliated Employer of all assets held, vested
and unvested, for the benefit of each such Participant who was
formerly a participant in such other plan and on whose behalf amounts
are being transferred from said plan to the Plan. Such transferred
amounts shall be credited to the applicable Account or Accounts of the
Participant under the Plan which corresponds to the type of account or
accounts to which such transferred amounts were credited under the
former employer's plan. Following such transfer, such Participant
shall have no further rights under such former employer's plan with
respect to such transferred amounts, and shall look solely to the
provisions of this Plan for such rights. To the extent not otherwise
provided under this Plan, (i) each such Participant shall be credited
under this Plan with the number of years (or portions thereof) of his
or her eligibility and vesting service accumulated under such former
employer's plan and (ii) if such transfer was a mandatory direct
transfer, any optional form of benefit, or any other protected right
or feature within the meaning of Code section 411(d)(6) shall continue
to be available under the Plan with respect to such transferred
amounts to the extent required by such section.
-31-
<PAGE> 37
ARTICLE 11. LIMITS ON CONTRIBUTIONS.
11.1. CODE SECTION 404 LIMITS. The sum of the contributions made by
the Employer under the Plan for any Plan Year shall not exceed the maximum
amount deductible under the applicable provisions of the Code. All
contributions under the Plan made by the Employer are expressly conditioned on
their deductibility under Code section 404 for the taxable year when paid (or
treated as paid under Code section 404(a)(6).
11.2. CODE SECTION 415 LIMITS.
(a) Incorporation by reference. Code section 415 is hereby
incorporated by reference into the Plan.
(b) General limitation on annual additions. The annual
addition (within the meaning of Code section 415) of a Participant for
any limitation year, when added to the annual additions to his or her
accounts for such year under all other defined contribution plans
maintained by the Affiliated Employers, shall not exceed the lesser of
(i) $30,000 (increased from time to time in accordance with Code
section 415(d)), or (ii) 25% of the Participant's compensation (as
defined under Code section 415) for such limitation year.
(c) Combined limitations. In the case of a Participant who
also participates in a defined benefit plan maintained by an
Affiliated Employer, the combined plan limitations of Code section
415 shall apply in such manner as the Administrator shall determine
consistent with Code section 415, unless and until such limitations
are repealed.
(d) Limitation year. For purposes of determining the Code
section 415 limits under the Plan, the "limitation year" shall be the
Plan Year.
(e) Treatment of excess contributions. If, as a result of a
reasonable error in estimating a Participant's Compensation for a Plan
Year or limitation year, a reasonable error in determining the amount
of elective deferrals (within the meaning of Code section 402(g)(3))
that may be made with respect to any individual under the limits of
Code section 415, or under such other facts and circumstances as may
be permitted under Regulation or by the Internal Revenue Service, the
annual addition under the Plan for a Participant would cause the Code
section 415 limitations for a limitation year to be exceeded, the
excess amounts shall be held in an unallocated suspense account and
allocated in subsequent years in accordance with the Regulations
-32-
<PAGE> 38
under Code section 415. Alternatively, such excess amounts may be
returned to the Employer or the Participant in accordance with the
Regulations under Code section 415.
-33-
<PAGE> 39
11.3. CODE SECTION 402(g) LIMITS.
(a) In general. The maximum amount of Elective
Contributions made on behalf of any Participant for any calendar year,
when added to the amount of elective deferrals under all other plans,
contracts and arrangements of an Affiliated Employer with respect to
the Participant for the calendar year, shall in no event exceed the
maximum applicable limit in effect for the calendar year under Code
section 402(g).
A Participant will be considered to have made "excess deferrals" for a
taxable year to the extent that the Participant's elective deferrals
for the taxable year exceed the applicable limit described above for
the year.
(b) Distribution of excess deferrals. In the event that
an amount is included in a Participant's gross income for a taxable
year as a result of an excess deferral under Code section 402(g), and
the Participant notifies (or is deemed to have notified) the
Administrator on or before the March 1 following the taxable year that
all or a specified part of an Elective Contribution made for his or
her benefit represents an excess deferral, the Administrator shall
make every reasonable effort to cause such excess deferral, adjusted
for allocable income, to be distributed to the Participant no later
than the April 15 following the calendar year in which such excess
deferral was made. The Participant will be deemed to have notified
the Administrator before March 1 of any excess deferral arising under
a plan maintained by an Affiliated Employer. The income allocable to
excess deferrals is equal to the allocable gain or loss for the
taxable year of the individual, but not the allocable gain or loss for
the period between the end of the taxable year and the date of
distribution (the "gap period"). Income allocable to excess deferrals
for the taxable year shall be determined by multiplying the gain or
loss attributable to the Participant's Elective Contribution Account
for the taxable year by a fraction, the numerator of which is the
Participant's excess deferrals for the taxable year, and the
denominator of which is the sum of the Participant's Elective
Contribution Account balance as of the beginning of the taxable year
plus the Participant's Elective Contributions for the taxable year.
No distribution of an excess deferral shall be made during the taxable
year of a Participant in which the excess deferral was made unless the
correcting distribution is made after the date on which the Plan
received the excess deferral and both the Participant and the Plan
designates the distribution as a distribution of an excess deferral.
The amount of any excess deferrals that may be distributed to a
Participant for a taxable year shall be reduced by the amount of
Elective Contributions that were excess contributions and were
previously distributed to the Participant or recharacterized for the
Plan Year beginning with or within such taxable year.
-34-
<PAGE> 40
(c) Treatment of excess deferrals. For other purposes of
the Code, including Code sections 401(a)(4), 401(k)(3), 404, 409, 411,
412, and 416, excess deferrals must be treated as employer
contributions even if they are distributed in accordance with
paragraph (b) above. However, excess deferrals of a non-Highly
Compensated Employee are not to be taken into account for purposes of
Code section 401(k)(3) (the actual deferral percentage test) to the
extent the excess deferrals are prohibited under Code section
401(a)(30). Excess deferrals are also to be treated as employer
contributions for purposes of Code section 415 unless distributed
under paragraph (b) above.
11.4. CODE SECTION 401(k)(3) LIMITS.
(a) In General. Elective Contributions made under the
Plan are subject to the limits of Code section 401(k)(3), as more
fully described below. The Plan provisions relating to the 401(k)(3)
limits are to be interpreted and applied in accordance with Code
sections 401(k)(3) and 401(a)(4), which are hereby incorporated by
reference, and in such manner as to satisfy such other requirements
relating to Code section 401(k) as may be prescribed by the Secretary
of the Treasury from time to time. The term "Compensation" as used in
this Section has the meaning given such term by Code section 414(s) as
determined by the Administrator in its sole discretion.
(b) Actual deferral ratios. For each Plan Year, the
Administrator will determine the "actual deferral ratio" for each
Participant who is eligible for Elective Contributions. The actual
deferral ratio shall be the ratio, calculated to the nearest
one-hundredth of one percent, of the Elective Contributions (plus any
Qualified Nonelective Contributions treated as Elective Contributions)
made on behalf of the Participant for the Plan Year to the
Participant's Compensation for the applicable period. For purposes of
determining a Participant's actual deferral ratio,
(i) Elective Contributions will be taken into
account only if each of the following requirements are
satisfied:
(A) the Elective Contribution is
allocated to the Participant's Elective Contribution
Account as of a date within the Plan Year, is not
contingent upon participation in the Plan or
performance of services on any date subsequent to
that date, and is actually paid to the Trust no later
than the end of the 12-month period immediately
following the Plan Year to which the contribution
relates; and
(B) the Elective Contribution relates to
compensation that either would have been received by
the Participant in the Plan Year but
-35-
<PAGE> 41
for the Participant's election to defer under
the Plan. or is attributable for services performed
in the Plan Year and, but for the Participant's
election to defer, would have been received by the
Participant within 2 1/2 months after the close of
the Plan Year.
To the extent Elective Contributions which meet the requirements of
(A) and (B) above constitute excess deferrals, they will be taken into
account for each Highly Compensated Employee, but will not be taken
into account for any non-Highly Compensated Employee.
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to have
elective deferrals (and qualified nonelective or qualified
matching contributions, to the extent treated as elective
deferrals) allocated to his or her accounts under two or more
cash or deferred arrangements described in Code section 401(k)
maintained by an Affiliated Employer, the Participant's actual
deferral ratio shall be determined as if such elective
deferrals (as well as qualified nonelective or qualified
matching contributions) are made under a single arrangement,
and if two or more of the cash or deferred arrangements have
different Plan Years, all cash or deferred arrangements ending
with or within the same calendar year shall be treated as a
single arrangement;
(iii) the applicable period for determining
Compensation for each Participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Administrator may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was a Participant;
(iv) Qualified Nonelective Contributions made on
behalf of Participants who are eligible to receive Elective
Contributions shall be treated as Elective Contributions to
the extent permitted by Regulation section 1.401(k) 1(b)(5);
(v) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
plan year, or if one or more other plans with the same Plan
Year satisfy such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single
plan;
(vi) an employee who would be a Participant but
for the failure to make Elective Contributions shall be treated
as a Participant on whose behalf no Elective Contributions
are made; and
-36-
<PAGE> 42
(vii) Elective Contributions which are made on
behalf of non-Highly Compensated Employees which could be used
to satisfy the Code section 401(k)(3) limits but are not
necessary to be taken into account in order to satisfy such
limits, may instead be taken into account for purposes of the
Code section 401(m) limits to the extent permitted by
Regulation sections 1.401(m)-1(b)(5).
(c) Actual deferral percentages. The actual deferral
ratios for all Highly Compensated Employees who are eligible for
Elective Contributions for a Plan Year shall be averaged to determine
the actual deferral percentage for the highly compensated group for
the Plan Year, and the actual deferral ratios for all Employees who
are not Highly Compensated Employees but are eligible for Elective
Contributions for the Plan Year shall be averaged to determine the
actual deferral percentage for the nonhighly compensated group for the
Plan Year.
(d) Actual deferral percentage tests. For a Plan Year,
at least one of the following tests must be satisfied.
(i) the highly compensated group's actual
deferral percentage for the Plan Year does not exceed 125% of
the prior year actual deferral percentage for the prior year
nonhighly compensated group; or
(ii) the excess of the actual deferral percentage
for the highly compensated group for the Plan Year over the
prior year actual deferral percentage for the prior year
nonhighly compensated group does not exceed two percentage
points, and the actual deferral percentage for the highly
compensated group for the Plan Year does not exceed twice the
prior year actual deferral percentage of the prior year
nonhighly compensated group.
For purposes of satisfying the above tests for a Plan Year,
the "prior year actual deferral percentage for the prior year
nonhighly compensated group" refers to the actual percentage
determined for the immediately preceding Plan Year for the
nonhighly compensated group existing during such preceding
Plan Year. Notwithstanding the foregoing, in satisfying the
above tests, the
-37-
<PAGE> 43
Administrator may elect, in accordance with Code section
401(k)(3) and applicable Regulations, to use the actual
deferral percentage for the nonhighly compensated group
determined for the current Plan Year.
(e) Adjustments by Administrator. If, prior to the time
all Elective Contributions for a Plan Year have been contributed to
the Trust, the Administrator determines that Elective Contributions
are being made at a rate which will cause the Code section 401(k)(3)
limits to be exceeded for the Plan Year, the Administrator may, in its
sole discretion, limit the amount of Elective Contributions to be made
with respect to one or more Highly Compensated Employees for the
balance of the Plan Year by suspending or reducing Elective
Contribution elections to the extent the Administrator deems
appropriate. Any Elective Contributions which would otherwise be made
to the Trust shall instead be paid to the affected Participant in
cash.
(f) Excess contributions. If the Code section 401(k)(3)
limits have not been met for a Plan Year after all contributions for
the Plan Year have been made, the Administrator will determine the
amount of excess contributions with respect to Participants who are
Highly Compensated Employees in the manner prescribed by Code section
401(k)(9) and by applicable Regulations.
(g) Distribution of excess contributions. Unless a
Participant elects to have his or her excess contributions
recharacterized, the Participant's excess contributions, adjusted for
income, will be designated by the Employer as a distribution of excess
contributions and distributed to the Participant. The income
allocable to excess contributions is equal to the allocable gain or
loss for the Plan Year, but not the allocable gain or loss for the
period between the end of the Plan Year and the date of distribution
(the "gap period"). Income allocable to excess contributions for the
Plan Year shall be determined by multiplying the gain or loss
attributable to the Participant's Elective Contribution Account and
Qualified Nonelective Contribution Account balances by a fraction, the
numerator of which is the excess contributions for the Participant for
the Plan Year, and the denominator of which is the sum of the
Participant's Elective Contribution Account and Qualified Nonelective
Contribution Account balances as of the beginning of the Plan Year
plus the Participant's Elective Contributions and Qualified
Nonelective Contributions for the Plan Year. Distribution of excess
contributions will be made after the close of the Plan Year to which
the contributions relate, but within 12 months after the close of such
Plan Year. Excess
-38-
<PAGE> 44
contributions shall be treated as annual additions under the Plan,
even if distributed under this paragraph.
(h) Recharacterization. In lieu of receiving a
distribution of excess contributions, a Highly Compensated Employee
may elect, at such time and in such manner as the Administrator may
prescribe, to have all or a portion of his or her excess contributions
recharacterized as Employee Contributions. Excess contributions may
be recharacterized only to the extent that additional Employee
Contributions otherwise could have been contributed by the Highly
Compensated Employee for the Plan Year under the Plan, and must be
recharacterized no later than two and one-half months after the close
of the Plan Year to which the recharacterization relates. If a Highly
Compensated Employee elects recharacterization, the Administrator will
(i) timely provide such forms to the Highly Compensated Employee and
his or her Employer, and take such other action, as the Internal
Revenue Service shall require, and (ii) account for such
recharacterized amounts as contributions by the Highly Compensated
Employee for purposes of Code sections 72 and 6047. Recharacterized
excess contributions shall continue to be treated as Elective
Contributions for all purposes under the Plan other than determination
of the Code section 401(k)(3) and 401(m) limits.
(i) Special rules. For purposes of recharacterizing or
distributing excess contributions, the amount of excess contributions
that may be recharacterized or distributed with respect to a Highly
Compensated Employee for a Plan Year shall be reduced by the amount of
excess deferrals previously distributed to the Highly Compensated
Employee for his or her taxable year ending with or within such Plan
Year.
(j) Recordkeeping requirement. The Administrator, on
behalf of the Employer, shall maintain such records as are necessary
to demonstrate compliance with the Code section 401(k)(3) limits
including the extent to which Qualified Nonelective Contributions are
taken into account in determining the actual deferral ratios.
(k) Effect on Matching Contributions. A Participant's
Elective Contributions which are returned or recharacterized as a
result of the Code section 401(k)(3) limits for a Plan Year shall not
be taken into account in determining the amount of Matching
Contributions to be made for the Participant's benefit for the Year.
To the extent Matching Contributions have already been made with
respect to the Elective Contributions at the time the Elective
Contributions are determined to be excess contributions, such Matching
Contributions shall be forfeited to the extent they are not vested, or
distributed to the extent they are vested to the Participant at the
same time as the Elective Contributions are returned or
recharacterized.
-39-
<PAGE> 45
(l) Excise tax where failure to correct. If the excess
contributions are not corrected within 2 1/2 months after the close of
the Plan Year to which they relate, the Employer will be liable for a
10 percent excise tax on the amount of excess contributions
attributable to them, to the extent provided by Code section 4979.
Qualified Nonelective Contributions properly taken into account under
this Section for the Plan Year may enable the Plan to avoid having
excess contributions, even if the contributions are made after the
close of the 2 1/2 month period.
(m) Special rule for early participation. Effective
January 1, 1999, the Administrator may elect to follow the rules set
forth in Code section 401(k)(3)(F) for purposes of determining the
applicable Code section 401(k)(3) limits.
11.5. CODE SECTION 401(m) LIMITS.
(a) In General. Employee and Matching Contributions made
under the Plan are subject to the limits of Code section 401(m), as
more fully described below. The Plan provisions relating to the
401(m) limits are to be interpreted and applied in accordance with
Code sections 401(m) and 401(a)(4), which are hereby incorporated by
reference, and in such manner as to satisfy such other requirements
relating to Code section 401(m) as may be prescribed by the Secretary
of the Treasury from time to time. The term "Compensation" as used in
this Section has the meaning given such term by Code section 414(s) as
determined by the Administrator in its sole discretion.
(b) Actual contribution ratios. For each Plan Year, the
Administrator will determine the "actual contribution ratio" for each
Participant who is eligible for Employee Contributions or Matching
Contributions. The actual contribution ratio shall be the ratio,
calculated to the nearest one-hundredth of one percent, of the sum of
the Employee Contributions, Matching Contributions, and Qualified
Nonelective Contributions which are not treated as Elective
Contributions made by and on behalf of the Participant for the Plan
Year, to the Participant's Compensation for the Plan Year. For
purposes of determining a Participant's actual contribution ratio,
(i) an Employee Contribution shall be taken into
account for the Plan Year in which the Contribution is made to
the Trust. A payment by the Participant to an agent of the
Trustee (including the Employer) shall be treated as a
contribution to the Trust at the time of payment to the agent
if the funds are transmitted to the Trust within the time
allotted by the Plan. A Matching Contribution will be taken
into account only if the Contribution is allocated to a
Participant's Account as of a date within the Plan Year, is
actually paid to the Trust no later than 12 months after the
close of the Plan Year, and is made on behalf of a Participant
on account of the Participant's Elective Contributions for the
Plan Year;
-40-
<PAGE> 46
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to have
matching contributions or employee contributions (including
amount treated as matching contributions) allocated to his or
her accounts under two or more plans maintained by an
Affiliated Employer which may be aggregated for purposes of
Code sections 410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined as if such
contributions are made under a single plan, and if two or more
of the plans have different Plan Years, all plans ending with
or within the same calendar year shall be treated as a single
plan;
(iii) the applicable period for determining
Compensation for each Participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Administrator may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was a Participant.
(iv) Elective Contributions not applied to satisfy
the Code section 401(k)(3) limits and Qualified Nonelective
Contributions not treated as Elective Contributions may be
treated as Matching Contributions to the extent permitted by
Regulation section 1.401(m)-1(b)(5).
(v) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
plan year, or if one or more other plans with the same Plan
Year satisfy such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single
plan;
(vi) Elective Contributions which are
recharacterized as Employee Contributions shall be taken into
account as Employee Contributions for the Plan Year that
includes the time at which the excess contributions are
includible in the gross income of the Participant;
(c) Actual contribution percentages. The actual
contribution ratios for all Highly Compensated Employees who are
eligible for Employee Contributions or Matching Contributions for a
Plan Year shall be averaged to determine the actual contribution
percentage for the highly compensated group for the Plan Year, and the
actual contribution ratios for all Employees who are not Highly
Compensated Employees but are eligible for Employee Contributions or
Matching Contributions for the Plan Year shall be averaged to
determine the actual contribution percentage for the nonhighly
compensated group for the Plan Year.
-41-
<PAGE> 47
(d) Actual contribution percentage tests. For a Plan
Year, at least one of the following tests must be satisfied:
(i) the highly compensated group's actual
contribution percentage for the Plan Year does not exceed 125%
of the prior year actual contribution percentage for the prior
year nonhighly compensated group; or
(ii) the excess of the actual contribution
percentage for the highly compensated group for the Plan Year
over the prior year actual contribution percentage for the
prior year nonhighly compensated group does not exceed two
percentage points, and the actual contribution percentage for
the highly compensated group for the Plan Year does not exceed
twice the prior year actual contribution percentage for the
prior year nonhighly compensated group.
For purposes of satisfying the above tests for a Plan Year, the "prior
year actual contribution percentage for the prior year nonhighly
compensated group" refers to the actual contribution percentage
determined for the immediately preceding Plan Year for the nonhighly
compensated group existing during such preceding Plan Year.
Notwithstanding the foregoing, in satisfying the above tests, the
Administrator may elect, in accordance with Code section 401(m)(2) and
applicable regulations, to use the actual contribution percentage for
the nonhighly compensated group calculated for the current Plan Year.
(e) Multiple use test. In the event that (i) the actual
deferral percentage and actual contribution percentage for the highly
compensated group each exceed 125% of the respective actual deferral
and actual contribution percentages for the nonhighly compensated
group, and (ii) the sum of the actual deferral percentage and the
actual contribution percentage for the highly compensated group
exceeds the "aggregate limit" within the meaning of Regulation section
1.401(m)-2(b)(3), the Administrator shall reduce the actual
contribution ratios of Highly Compensated Employees who had both an
actual deferral ratio and an actual contribution ratio for the Plan
Year to the extent required by such section and in the same manner as
described below.
(f) Adjustments by Administrator. If, prior to the time
all Employee Contributions or Matching Contributions for a Plan Year
have been contributed to the Trust, the Administrator determines that
such Contributions are being made at a rate which will cause the Code
section 401(m) limits to be exceeded for the Plan Year, the
Administrator may, in its sole discretion, limit the amount of such
Contributions to be made with respect to one or more Highly
Compensated Employees for the balance of the Plan Year by limiting the
amount of such Contributions to the extent the Administrator deems
appropriate.
-42-
<PAGE> 48
(g) Excess aggregate contributions. If the Code section
401(m) limits have not been satisfied for a Plan Year after all
contributions for the Plan Year have been made, the excess of the
aggregate amount of the Employee and Matching Contributions (and any
Qualified Nonelective Contribution or elective deferral taken into
account in computing the actual contribution percentages) actually
made on behalf of Highly Compensated Employees for the Plan Year over
the maximum amount of such contributions permitted under Code section
401(m)(2)(A) shall be considered to be "excess aggregate
contributions". The Administrator shall determine the amount of
excess aggregate contributions made with respect to each Participant
who is a Highly Compensated Employee in the manner prescribed by Code
section 401(m)(6)(C) and by applicable Regulations.
(h) Distribution of excess aggregate contributions. A
Participant's excess aggregate contributions, adjusted for income will
be designated by the Employer as a distribution of excess aggregate
contributions, and distributed to the Participant. The income
allocable to excess aggregate contributions is equal to the allocable
gain or loss for the taxable year of the individual, but not the
allocable gain or loss for the period between the end of the taxable
year and the date of distribution (the "gap period"). Income
allocable to excess aggregate contributions for the taxable year shall
be determined by multiplying the gain or loss attributable to the
Participant's Matching Contribution Account and Employee Contribution
Account balances by a fraction, the numerator of which is the excess
aggregate contributions for the Participant for the Plan Year, and the
denominator of which is the sum of the Participant's Matching
Contribution Account and Employee Contribution Account balances as of
the beginning of the Plan Year plus the Participant's Employee
Contributions and Matching Contributions for the Plan Year.
Distribution of excess aggregate contributions will be made after the
close of the Plan Year to which the contributions relate, but within
12 months after the close of such Plan Year. Excess aggregate
contributions shall be treated as employer contributions for purposes
of Code sections 401(a)(4), 404, and 415 even if distributed from the
Plan.
(i) Special Rules. For purposes of distributing excess
aggregate contributions, distribution of excess aggregate
contributions (in each case adjusted for income or loss) shall be
accomplished in the following order:
(1) unmatched Employee Contributions;
(2) matched Employee Contributions and Matching
Contributions attributable to such Employee Contributions; and
(3) Matching Contributions attributable to
Elective Contributions.
-43-
<PAGE> 49
(j) Recordkeeping requirement. The Administrator, on
behalf of the Employer, shall maintain such records as are necessary
to demonstrate compliance with the Code section 401(m) limits,
including the extent to which Elective Contributions and Qualified
Nonelective Contributions are taken into account in determining the
actual contribution ratios.
(k) Excise tax where failure to correct. If the excess
aggregate contributions are not corrected within 2 1/2 months after
the close of the Plan Year to which they relate, the Employer will be
liable for a 10 percent excise tax on the amount of excess aggregate
contributions attributable to them, to the extent provided by Code
section 4979. Qualified Nonelective Contributions properly taken into
account under this section for the Plan Year may enable the Plan to
avoid having excess aggregate contributions, even if the contributions
are made after the close of the 2 1/2 month period.
(l) Special rule for early participation. Effective
January 1, 1999, the Administrator may elect to follow the rules set
forth in Code section 401(m)(5)(C) for purposes of determining the
applicable Code section 401(m) limits.
-44-
<PAGE> 50
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS.
12.1. PROVISIONS TO APPLY. The provisions of this Article shall
apply for any top-heavy Plan Year notwithstanding anything to the contrary in
the Plan.
12.2. MINIMUM CONTRIBUTION. For any Plan Year which is a top-heavy
plan year, the Employer shall contribute to the Trust a minimum contribution on
behalf of each Participant who is not a key employee for such year and who has
not separated from service from the Affiliated Employers by the end of the Plan
Year, regardless of whether or not the Participant has elected to make Elective
Contributions for the Year. The minimum contribution shall, in general, equal
three percent (3%) of each such Participant's compensation (within the meaning
of Code section 416), but shall be subject to the following special rules:
(a) if the largest contribution on behalf of a key
employee for such year, taking into account only Elective
Contributions, Qualified Nonelective Contributions, Matching
Contributions, and Discretionary Contributions (including forfeitures
applied to reduce any such Employer Contributions), is equal to less
than 3% of the key employee's compensation, such lesser percentage
shall be the minimum contribution percentage for Participants who are
not key employees. This special rule shall not apply, however, if the
Plan is required to be included in an aggregation group and enables a
defined benefit plan to meet the requirements of Code section
410(a)(4) or 410.
(b) No minimum contribution will be required with respect
to a Participant who is also covered by another top-heavy defined
contribution plan of an Affiliated Employer which meets the vesting
requirements of Code section 416(b) and under which the Participant
receives the top-heavy minimum contribution.
(c) If a Participant is also covered by a top-heavy
defined benefit plan of an Affiliated Employer, "5%" shall be
substituted for "3%" above in determining the minimum contribution.
(d) The minimum contribution with respect to any
Participant who is not a key employee for the particular year will be
offset by any Discretionary Contributions and any Qualified
Nonelective Contributions (including forfeitures applied to reduce
Discretionary Contributions), but not any other type of contribution,
otherwise made for the Participant's benefit for such year.
-45-
<PAGE> 51
(e) If additional minimum contributions are required
under this Section, the Administrator will establish (or cause the
Trustee to establish) a special Account to which such contributions
will be allocated. Distributions from such Account will be made in
accordance with the rules applicable to Discretionary Contribution
Accounts.
(f) A minimum contribution required under this Section
shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an 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 contributions or
Elective Contributions to the Plan, or (iii) compensation less than a
stated amount.
12.3. SPECIAL VESTING SCHEDULE. Each Employee who is a Participant
at any time during a top-heavy plan year shall be vested in not less than the
percentage of each of his or her Accounts as set forth in the following vesting
schedule (or the Plan's general vesting schedule, if faster), based on the
Participant's Years of Service for Vesting:
<TABLE>
<CAPTION>
Years of Service Vested
for Vesting Percentage
----------- ----------
<S> <C>
fewer than 2 0%
2 but fewer than 3 20%
3 but fewer than 4 40%
4 but fewer than 5 60%
5 but fewer than 6 80%
6 or more 100%
</TABLE>
Further, no decrease in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as top-heavy changes for any Plan Year. If the
vesting schedule under the Plan shifts in or out of the above schedule for any
Plan Year because of the Plan's top-heavy status, such shift shall be
considered to be an amendment to the vesting schedule for all purposes of the
Plan.
12.4. ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the
Code section 415 limits, the definitions of "defined contribution plan
fraction" and "defined benefit plan fraction" contained therein shall be
modified, for any Plan Year which is a top-heavy Plan Year, by substituting
"1.0" for "1.25" in Code sections 415(e)(2)(B) and 415(e)(3)(B).
12.5. DEFINITIONS. For purposes of these top-heavy provisions, the
following terms have the following meanings:
-46-
<PAGE> 52
(a) "key employee" means a key employee described in Code
section 416(i)(l), and "non-key employee" means any employee who is not
a key employee (including employees who are former key employees);
(b) "top-heavy plan year" means a Plan Year if any of the
following conditions exist:
(i) the top-heavy ratio for the Plan exceeds 60
percent and the Plan is not part of any required aggregation
group or permissive aggregation group of plans;
(ii) 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
percent; or
(iii) the Plan is 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 percent.
(c) "top-heavy ratio":
(i) if the Affiliated Employer maintains one or
more defined contribution plans (including any Simplified
Employee Pension Plan) and the Affiliated Employer has not
maintained any defined benefit plan which during the 5-year
period ending on the determination date(s) 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 on the
determination date(s) (including any part of any account
balance distributed in the 5-year period ending on the
determination date(s)), and the denominator of which is the
sum of all account balances (including any part of an account
balance distributed in the 5-year period ending on the
determination date(s), both computed in accordance with Code
section 416. Both the numerator and the denominator of the
top-heavy ratio are increased 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 Code
section 416.
(ii) If the Affiliated Employer maintains one or
more defined contribution plans (including any Simplified
Employee Pension Plan) and the Affiliated Employer maintains
or has maintained one or more defined benefit plans which
during the 5-year period ending on the determination date(s)
has or
-47-
<PAGE> 53
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 the account
balances under the aggregated defined contribution plan or
plans for all key employees , determined in accordance with
(i) 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(s), 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 all accrued benefits under the defined benefit plan or
plans for all participants as of the determination date(s),
all determined in accordance with Code section 416. The
accrued benefits under a defined benefit plan in both the
numerator and denominator of the top-heavy ratio are increased
for any distribution of an accrued benefit made in the 5-year
period ending on the determination date.
(iii) For purposes of (i) and (ii) 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 Code section 416 for
the first and second plan years of a defined benefit plan.
The account balances and accrued benefits of a participant (A)
who is not a key employee but who was a key employee in a
prior year, or (B) who has not been credited with at least one
hour of service with any employer maintaining the plan at any
time during the 5-year period ending on the determination date
will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance
with Code section 416. Deductible employee contributions will
not be taken into account for purposes of computing the
top-heavy ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same
calendar year.
(iv) The accrued benefit of a participant other
than a key employee shall be determined under (A) the method,
if any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the employer, or (B) if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Code section 411(b)(1)(C).
(d) The "permissive aggregation group" is the required
aggregation group of plans plus any other plan or plan of the employer
which, when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Code sections 401(a)(4)
and 410.
-48-
<PAGE> 54
(e) The "required aggregation group" is (i) each
qualified plan of the employer in which at least one key employee
participates or participated at any time during the determination
period (regardless of whether the plan has terminated), and (ii) any
other qualified plan of the employer which enables a plan described in
(i) to meet the requirements of Code sections 401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio, the
valuation date shall be the last day of the applicable plan year.
(g) the term "determination date" means, with respect to
the initial plan year of a plan, the last day of such plan year and,
with respect to any other plan year of a plan, the last day of the
preceding plan year of such plan. The term "applicable determination
date" means, with respect to the Plan, the determination date for the
Plan Year of reference and, with respect to any other plan, the
determination date for any plan year of such plan which falls within
the same calendar year as the applicable determination date of the
Plan.
-49-
<PAGE> 55
ARTICLE 13. MISCELLANEOUS.
13.1. EXCLUSIVE BENEFIT RULE. No part of the corpus or income of
the Trust forming part of the Plan will be used for or diverted to purposes
other than for the exclusive benefit of each Participant and Beneficiary,
except as otherwise provided under Code section 401(a)(13) and the provisions
of the Plan relating to Qualified Domestic Relations Orders, the payment of
reasonable expenses of administering the Plan, the return of contributions upon
nondeductibility or mistake of fact, or the failure of the Plan to qualify
initially.
13.2. LIMITATION OF RIGHTS. Neither the establishment of the Plan
or the Trust, nor any amendment thereof, nor the creation of any fund or
account, nor the payment of any benefits, will be construed as giving to any
Participant or other person any legal or equitable right against any Employer
or Administrator or Trustee, except as provided herein, and in no event will
the terms of employment or service of any Participant be modified or in any way
be affected hereby. It is a condition of the Plan, and each Participant
expressly agrees by his or her participation herein, that each Participant will
look solely to the assets held in the Trust for the payment of any benefit to
which he or she is entitled under the Plan.
13.3. NONALIENABILITY OF BENEFITS. The benefits provided hereunder
will not be subject to the voluntary or involuntary alienation, assignment,
garnishment, attachment, execution or levy of any kind, and any attempt to
cause such benefits to be so subjected will not be recognized, except to such
extent as may be permitted or required under Code section 401(a)(13), as
determined by the Administrator.
13.4. VETERANS' REEMPLOYMENT AND BENEFIT RIGHTS. Notwithstanding
any provision of the Plan to the contrary, contributions, benefits and service
credit with respect to military service will be provided in accordance with
Code section 414(u).
13.5. GOVERNING LAW. The Plan and Trust will be construed,
administered and enforced according to the laws of the Commonwealth of Virginia
to the extent such laws are not preempted by ERISA.
IN WITNESS WHEREOF, the Plan Sponsor has caused this instrument to be
signed in its name and on its behalf by its duly authorized officer, this
day of , 1998. -----
--------------
-50-
<PAGE> 56
<TABLE>
<S> <C>
ORBITAL SCIENCES CORPORATION
By:_________________________________
</TABLE>
-51-
<PAGE> 1
Exhibit 23
ACCOUNTANTS' CONSENT
The Board of Directors
Orbital Sciences Corporation:
We consent to the use of our reports incorporated herein by reference, which
reports are included in the Company's 1997 Annual Report on Form 10-K.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Washington, D.C.
December 30, 1998
