UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-20244
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DATA RESEARCH ASSOCIATES, INC.
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(Exact name of registrant as specified in its charter)
MISSOURI 43-1063230
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1276 NORTH WARSON RD. ST. LOUIS, MISSOURI 63132
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(Address of principal executive offices) (Zip Code)
1-314-432-1100
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-- --
APPLICABLE ONLY TO CORPORATE ISSUERS:
At July 15, 1997 there were 5,538,870 shares of the registrant's common stock
outstanding.
INDEX
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets -June 30, 1997
and September 30, 1996
Consolidated statements of income -Three months ended June 30,
1997 and 1996
-Nine months ended June 30,
1997 and 1996
Consolidated statements of cash flows -Nine months ended June 30,
1997 and 1996
Notes to the unaudited consolidated financial statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
- --------------------------
Item 5. Other Information
Item 6. Exhibits
SIGNATURES
2
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, September 30,
1997 1996
(Unaudited)
----------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,442 $ 4,855
Short-term investments 11,743 6,968
Accounts receivable less allowance for doubtful
accounts of $81 at June 30, 1997 and
$269 at September 30, 1996:
Billed 6,817 10,803
Unbilled 1,880 3,878
------ ------
8,697 14,681
Inventories 156 178
Prepaid expenses 1,016 679
Deferred income taxes 184 166
Other current assets 167 153
------ ------
TOTAL CURRENT ASSETS 27,405 27,680
PROPERTY AND EQUIPMENT
Land and improvements 504 504
Buildings and improvements 2,498 2,219
Data processing equipment 5,232 4,407
Furniture, fixtures, and other 3,671 2,982
------ ------
11,905 10,112
Less accumulated depreciation 5,364 4,517
------ ------
6,541 5,595
NOTE RECEIVABLE 126 296
DEFERRED SOFTWARE COSTS (net of accumulated
amortization of $1,254 at June 30, 1997
and $1,057 at September 30, 1996) 1,425 522
INTANGIBLE ASSETS (net of accumulated
amortization of $3,381 at June 30, 1997
and $2,744 at September 30, 1996) 2,156 2,568
------ ------
$37,653 $36,661
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,996 $ 1,705
Employee compensation 413 694
Deferred revenue 2,860 3,787
Customer deposits 962 1,164
Other accrued liabilities 460 777
Income taxes payable 445 615
------ ------
TOTAL CURRENT LIABILITIES 7,136 8,742
DEFERRED INCOME TAXES 813 473
SHAREHOLDERS' EQUITY
Preferred stock, par value $.01 per share--
1,000,000 shares authorized, no shares issued - -
Common stock, par value $.01 per share--10,000,000
shares authorized, 5,538,870 shares issued at
June 30, 1997, 5,777,520 shares issued at
September 30, 1996 55 58
Additional paid-in capital 5,581 5,700
Foreign currency translation adjustment (85) 53
Retained earnings 24,153 21,910
------ ------
29,704 27,721
Less cost of 265,100 shares of treasury stock - 275
------ ------
TOTAL SHAREHOLDERS' EQUITY 29,704 27,446
------ ------
$37,653 $36,661
====== ======
See notes to unaudited consolidated financial statements.
3
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except share data)
Three months ended Nine months ended
June 30, June 30,
1997 1996 1997 1996
------ ------ ------ ------
REVENUES
Hardware $ 2,027 $ 1,765 $ 6,658 $ 9,025
Software 1.831 2,382 5,329 6,227
Service and other 4,844 4,764 13,700 12,559
------ ------ ------ ------
8,702 8,911 25,687 27,811
EXPENSES
Cost of revenues
Hardware 1,378 1,007 4,586 6,739
Software 416 202 1,066 780
Service and other 1,165 1,106 3,307 2,982
------ ------ ------ ------
2,959 2,315 8,959 10,501
Salaries and employee benefits 2,238 2,736 7,262 7,781
General and administrative expenses 1,686 1,777 4,822 4,756
Depreciation and amortization 337 284 960 821
------ ------ ------ ------
7,220 7,112 22,003 23,859
INCOME FROM OPERATIONS 1,482 1,799 3,684 3,952
OTHER INCOME 195 100 601 451
------ ------ ------ ------
Income before income taxes 1,677 1,899 4,285 4,403
PROVISION FOR INCOME TAXES 646 725 1,491 1,665
------ ------ ------ ------
NET INCOME $ 1,031 $ 1,174 $ 2,794 $ 2,738
====== ====== ====== ======
Earnings per share $ 0.19 $ 0.21 $ 0.51 $ 0.50
====== ====== ====== ======
Weighted average number
of common shares 5,538,870 5,488,692 5,531,813 5,488,692
========= ========= ========= =========
Dividends declared
per share $ - $ - $ .10 $ -
========= ========= ========= =========
See notes to unaudited consolidated financial statements.
4
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Nine months ended
June 30,
1997 1996
------- -------
OPERATING ACTIVITIES
Net income $ 2,794 $ 2,738
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,542 1,592
Provision for deferred income taxes 321 180
Gain on disposal of property and equipment (4) -
Changes in operating assets
and liabilities:
Accounts receivable 5,904 (4,449)
Inventories 21 (243)
Prepaid expenses and
other current assets (361) (254)
Accounts payable and
other current liabilities (1,473) (1,380)
Note receivable 170 88
------- -------
NET CASH PROVIDED BY (USED BY)
OPERATING ACTIVITIES 8,914 (1,728)
------- -------
INVESTING ACTIVITIES
Purchase of property and equipment (1,847) (1,505)
Purchase of short-term investments (50,175) (8,525)
Proceeds from sales of short-term investments 45,400 6,929
Purchased software (65) (249)
Deferred software cost (1,100) (298)
------- -------
NET CASH USED BY INVESTING ACTIVITIES (7,787) (3,648)
------- -------
FINANCING ACTIVITIES
Proceeds from options exercised 154 70
Dividends paid (552) -
------- -------
NET CASH (USED BY) PROVIDED BY
FINANCING ACTIVITIES (398) 70
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (142) (24)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 587 (5,330)
------- -------
Cash and cash equivalents at
beginning of period 4,855 9,036
------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 5,442 $ 3,706
======= =======
See notes to unaudited consolidated financial statements.
5
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
1. Basis of Presentation
The unaudited consolidated financial statements of Data Research Associates,
Inc. (the "Company" or "DRA") have been prepared in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements and,
therefore, should be read in conjunction with the Company's consolidated
financial statements and the notes thereto for the year ended September 30,
1996, contained in the Company's annual report for the year ended
September 30, 1996. In the opinion of management, all adjustments (consisting
only of normal recurring items) considered necessary for a fair presentation
have been included. The results of operations for the nine months ended
June 30, 1997, are not necessarily indicative of the results that may be
expected for the year ending September 30, 1997.
2. Inventories
Inventories consist primarily of computer equipment and supplies which are
stated at the lower of cost (first-in, first-out method) or market and the
unamortized cost of computer software purchased for resale. The Company had
only finished goods in inventory at June 30, 1997, and September 30, 1996.
3. Income Taxes
The provision for income taxes is computed using the liability method. The
difference between the effective income tax rate and the U.S. federal income
tax rate is a result of state taxes and the difference between the financial
statement and federal income tax recognition of foreign losses.
4. Treasury Stock Retirement
On February 12, 1997, the Company retired the 265,100 shares of common stock
held in treasury.
6
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The Company's revenues are derived from three sources: (i) computer
hardware sales; (ii) software licenses; and (iii) sales of services,
including training, conversion, networking, database access, system support
and product maintenance. Revenue is recognized on hardware sales and software
licenses upon shipment of the product. Revenue from hardware and software
maintenance contracts is recognized monthly over the term of the maintenance
contract. Other service revenues are recognized upon completion of the
services. The components of the cost for development of software primarily
include salaries and employee benefits and are expensed as incurred. All
costs qualifying for deferral are reported on the balance sheet as deferred
software costs and amortized over the estimated useful life of the product.
The amortization of capitalized software is allocated as a direct cost of
licensing DRA software. The Company typically experiences greater gross
margin on software licenses than on sales of hardware or services. The
Company's profitability depends in part on the mix of its revenue components
and not necessarily on total revenues.
The Company's revenues and earnings can fluctuate from quarter to quarter
depending upon, among other things, such factors as the complexity of
customers' procurement processes, new product and service introductions by
the Company and other vendors, delays in customer purchases due to timing
of library professional conferences and trade shows, installation scheduling
and customer delays in facilities preparation. In addition, a substantial
portion of the Company's revenues for each quarter is attributable to a
limited number of orders and tends to be realized towards the end of each
quarter. Thus, even short delays or deferrals of sales near the end of a
quarter can cause quarterly results to fluctuate substantially.
The Company generally operates with little backlog and most of its revenues
in each quarter result from orders booked in that quarter; however, currently
the Company has a backlog related to two significant contracts. These customers
are awaiting completion of the Company's next-generation system named TAOS.
Delays in the release of TAOS could have a significantly negative impact
on the Company's sales and results of operations. Because of the
complexities inherent in developing software products as sophisticated as
those sold by the Company and the lengthy testing periods associated with
such products, no assurance can be given that future product introductions
by the Company will not be delayed. In the future, the Company's revenues
will be increasingly dependent on sales of TAOS which is currently being
developed. The timing of the completion of this system, which is based on
object-oriented client/server design, may be affected by multiple factors,
including rapid technological change, dependence on third-party suppliers and
the relative scarcity of qualified technical staff.
Except for the historical information and statements contained in
Management's Discussion and Analysis of Financial Condition and Results
of Operations ("MD&A"), the matters and items contained in this document,
including MD&A, contain forward looking statements that involve uncertainties
and risks. The Company's future results could differ materially from those
discussed in this document. Factors that could cause a contribution to such
differences, include, but are not limited to, those presented in the Company's
Form 10K for the year ended September 30, 1996.
Results of Operations
Three Months Ended June 30, 1997 compared to Three Months Ended
June 30, 1996
Hardware revenues increased $.2 million, or 15%, to $2.0 million in the
three months ended June 30, 1997, from $1.8 million in the three months
ended June 30, 1996. The increase was primarily due to shipment of hardware
to the Company's current customers. The gross margin percentage on hardware
was 32% in the three months ended June 30, 1997, and 43% in the three
months ended June 30, 1996. The decrease is due primarily to a larger
percentage of hardware sales being derived from PC's in the three months
ended June 30, 1997. PC's have historically had a lower gross margin than
other components of integrated hardware systems.
7
Software license revenues decreased $.6 million, or 23%, to $1.8 million in
the three months ended June 30, 1997, from $2.4 million for the three months
ended June 30, 1996. The decrease is primarily due to the shipment of one large
contract in the three months ended June 30, 1996. The gross margin percentage
on software decreased to 77% in the three months ended June 30, 1997, from 92%
in the three months ended June 30, 1996. The decrease is primarily due to the
mix of third party software sold. While all third party software typically
has a lower gross margin than DRA developed software, the margin of third party
software varies according to the type of software and the terms that DRA has
negotiated with the developer of the product. These margins currently range
from 50% to 80% of the list price of the product. Increased amortization
expense charged to software cost of revenues in the three months ended June
30, 1997, also contributed to the decrease in gross margin.
Service and other revenues remained consistent at $4.8 million in
the three months ended June 30, 1997, and in the three months ended
June 30, 1996. Management expects that maintenance revenues will
increase as the base of licensed software products increases. The gross
margin percentage on service and other revenues decreased to 76%
for the three months ended June 30, 1997, from 77% for the three months
ended June 30, 1996. This decrease is primarily due to the increase in the
three months ended June 30, 1997, of DRA Net revenues which have a lower
margin than other service revenues.
Salaries and employee benefits decreased $.5 million, or 18%, to $2.2
million in the three months ended June 30, 1997, from $2.7 million in the
three months ended June 30, 1996. Annual salary increases in 1997 were
offset by higher capitalization of salaries and employee benefits related
to software development in the three months ended June 30, 1997, than
in the three months ended June 30, 1996.
General and administrative expenses remained consistent at $1.7 million
in the three months ended June 30, 1997, and $1.8 million in the three
months ended June 30, 1996.
Income from operations decreased $.3 million, or 18%, to $1.5 million in the
three months ended June 30, 1997, from $1.8 million in the three months ended
June 30, 1996. The decrease is primarily due to a reduction in software sales
in the three months ended June 30, 1997 as compared to the three months ended
June 30, 1996.
The Company's consolidated effective tax rate was 38% for the three month
period ended June 30, 1997, and the three month period ended June 30, 1996.
8
Results of Operations
Nine Months Ended June 30, 1997 compared to Nine Months Ended
June 30, 1996
Hardware revenues decreased $2.3 million, or 26%, to $6.7 million in the
nine months ended June 30, 1997, from $9.0 million in the nine months
ended June 30, 1996. The decrease was primarily due to the shipment of two
large full service contracts that generated $3.5 million in revenue in the
nine months ended June 30, 1996. The gross margin percentage on hardware
was 32% in the nine months ended June 30, 1997, and 25% in the nine months
ended June 30, 1996. The increase is due primarily to a smaller percentage
of hardware sales being derived from PC's in the nine months ended June 30,
1997, PC's have historically had a lower gross margin than other components
of integrated hardware systems.
Software license revenues decreased $.9 million, or 14%, to $5.3 million in
the nine months ended June 30, 1997 from $6.2 million in the nine months ended
June 30, 1996. The decrease is primarily due to the shipment of one large
contract in the nine months ended June 30, 1996. The gross margin percentage
on software was 80% in the nine months ended June 30, 1997, and 87% in
the nine months ended June 30, 1996. The decrease in gross margin is
primarily due to increased amortization expense charged to software cost of
revenues in the nine months ended June 30, 1997.
Service and other revenues increased $1.1 million, or 9%, to $13.7 million
in the nine months ended June 30, 1997, from $12.6 million in the nine months
ended June 30, 1996. Management expects that maintenance revenues will
continue to increase as the base of licensed software products increases.
The gross margin percentage on service and other revenues remained consistent
at 76% for the nine months ended June 30, 1997, and for the nine months
ended June 30, 1996.
Salaries and employee benefits decreased $.5 million, or 7%, to $7.3 million
in the nine months ended June 30, 1997, from $7.8 million in the nine months
ended March 31, 1996. Annual salary increases in 1997 were offset by higher
capitalization of salaries and employee benefits related to software
development in the nine months ended June 30, 1997, than in the nine months
ended June 30, 1996.
General and administrative expenses remained consistent at $4.8 million,
for the nine months ended June 30, 1997, and for the nine months ended
June 30, 1996.
Income from operations decreased $.3 million, or 7%, to $3.7 million in the
nine months ended June 30, 1997, from $4.0 million the nine months ended
June 30, 1996.
The Company's consolidated effective tax rate was 35% for the nine month
period ended June 30, 1997, and 38% for the nine month period ended
June 30, 1996. The rates reflect the change in the valuation of the Company's
foreign subsidiaries' losses. The Company expects to utilize net operating
losses of certain of the Company's foreign subsidiaries in 1997. Accordingly,
the Company's effective tax rate for the nine month period ended June 30,
1997, reflects a reduction in the effective tax rate in order to approximate
the expected effective rate for the fiscal year ending September 30, 1997.
9
Liquidity and Capital Resources
The Company's cash needs are primarily for working capital and capital
expenditures and historically have been met by cash flows from operations,
bank borrowings, and equipment leases. At June 30, 1997, the Company's
working capital was $20.3 million and its ratio of current assets to current
liabilities was 3.8 to 1, as compared to working capital of $18.9 million
and a ratio of current assets to current liabilities of 3.2 to 1 at
September 30, 1996.
Net cash provided by operating activities was $8.9 million for
the nine months ended June 30, 1997, compared to $1.7 million used by
operating activities for the nine months ended June 30, 1996. The
increase in cash provided by operating activities is primarily due to
the reduction of accounts receivable to $8.7 million at June 30,
1997, from $15.5 million June 30, 1996. This amount related
to two contracts and has been collected as of June 30, 1997.
Net cash used by investing activities was $7.8 million for the nine months
ended June 30, 1997, compared to $3.6 million for the nine months ended
June 30, 1996. The increase in net cash used by investing activities is
primarily a result of an increase net purchases of short-term investments
in the nine months ended June 30, 1997, compared to the nine months ended
June 30, 1996.
Financing activities for the nine months ended June 30, 1997, include the
payment of a $.10 per share dividend in January 1997. Also in January 1997,
management extended the Company's $6.0 million line of credit to January 1998
All terms remain the same. The line of credit bears interest at federal
funds rate plus 200 basis points payable monthly on outstanding balances.
There have been no borrowings against the Company's line of credit since
May 1991.
Management believes that, with the current cash position of $5.4 million,
short-term investments of $11.7 million, accounts receivable of $8.7 million,
continued cash flow from operations, availability of the $6.0 million line of
credit, and total current liabilities of $7.1 million, the Company will be
able to meet both its short-term liquidity needs and short-term capital
expenditure needs. The Board of Directors has authorized management to
repurchase its Common Stock in an aggregate amount of up to $4 million.
The Company has made no material commitments with respect to capital
expenditures planned for fiscal 1997. Management believes that with
total long-term liabilities of approximately $.8 million and no other known
long-term commitments or demands, the Company will be able to satisfy its
known long-term liabilities and liquidity needs through the funding sources
identified above.
10
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
On July 17, 1997, the Board of Directors authorized the repurchase
of the Company's Common Stock in an aggregate amount of up to $4
million in purchase price.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.1 First Amendment to Employment Agreement
10.2 Data Research Associates, Inc. Cafeteria Plan as Amended to include
the Data Research Associates, Inc. Dependent Care Assistance Plan
27 Financial Data Schedule
99 Press Release
(b) No reports on Form 8-K were required to be filed during the three
months ended June 30, 1997.
11
DATA RESEARCH ASSOCIATES, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATA RESEARCH ASSOCIATES, INC.
August 8, 1997 /s/ Michael J. Mellinger
- ----------------- ------------------------------
Date Michael J. Mellinger
Chairman, President, and
Chief Executive Officer
(Principal Executive Officer)
August 8, 1997 /s/ Katharine W. Biggs
- ----------------- ------------------------------
Date Katharine W. Biggs
Vice President, and
Chief Financial Officer
(Principal Accounting Officer)
12
EXHIBIT 10.1
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into as of
the 15th day of May, 1997 (the "First Amendment"), by and between MICHAEL J.
MELLINGER (hereinafter referred to as "Employee") and DATA RESEARCH
ASSOCIATES, INC. (hereinafter referred to as "Employer"), in connection
with that certain Employment Agreement dated April 17, 1997
(the "Agreement").
WHEREAS, Employee wishes to amend the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained therein,
the Agreement is amended as follows:
The first sentence of paragraph THIRD, section (j) shall be deleted
in its entirety and the following language substituted in lieu thereof:
"To the extent not otherwise provided by the Employer in
subparagraph (f) of this paragraph THIRD, Employee shall,
at Employer's sole cost and expense, maintain in full force
and effect an insurance policy or policies providing term
life insurance coverage on the life of Employee in an aggregate
amount of not less than Five Hundred Thousand Dollars ($500,000),
for the benefit of the beneficiaries named by Employee, or such
beneficiaries as may be otherwise designated from time to time
by Employee."
The Agreement otherwise shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
day and year first above written.
EMPLOYEE:
/s/ Michael J. Mellinger
- -----------------------------
Michael J. Mellinger
President and Chief Executive Officer
EMPLOYER:
DATA RESEARCH ASSOCIATES, INC.
/s/ Katharine W. Biggs
By:-------------------------
Katharine W. Biggs
Vice President and Chief Financial Officer
EXHIBIT 10.2
DATA RESEARCH ASSOCIATES, INC. CAFETERIA PLAN
The Data Research Associates, Inc. Cafeteria Plan (the "Plan") is designed
to provide eligible Employees with a choice between current compensation and
the payment by their Employer of certain medical insurance premiums and
dependent care assistance expenses. The Plan is intended to qualify as a
cafeteria plan under section 125 of the Internal Revenue Code of 1986, as
amended, and is to be interpreted in a manner consistent with the requirements
of that section. In connection with the Dependent Care Assistance Trust
established hereunder Michael J. Mellinger has agreed to serve as Trustee
thereof and has agreed that Such Trust shall be governed by the terms set
forth herein.
ARTICLE I
DEFINITIONS
1.01 "Anniversary Date" means the first day of any subsequent Plan Year.
1.02 "Annual Benefit" means a benefit elected hereunder and provided
during the Plan Year.
1.03 "Benefit Election Form" means the form promulgated by the Plan
Administrator by which a Participant enrolls and elects Benefits
in accordance with Article III and otherwise agrees to a reduction
of his salary or other compensation to provide funds for the benefits
described in this Plan.
1.04 "Benefits" means those benefits or coverages available for election
by a Participant under Article VI.
1.05 "Board of Directors" means the duly elected Board of Directors of
the Company, as constituted from time to time.
1.06 "Code" means the Internal Revenue Code of 1986, as amended.
1.07 "Company" means Data Research Associates, Inc., the sponsor of the
Plan.
1.08 "Compensation" means the salary paid to an Employee by an Employer,
including:
(a)any elective contribution made to the 401(k) Plan maintained
by the Company as the result of any salary reduction agreement
entered into by the Participant under Section 401(k) of the
Code; and
(b)any Employer contributions made to the Plan as the result of a
salary reduction agreement pursuant to Section 5.01.
1.09 "Effective Date" means May 1, 1991 with respect to the Plan. This
restatement of the Plan shall be effective July 1, 1997.
1.10 "Election Period" means the 30-day period immediately preceding
any Anniversary Date.
1.11 "Employee" means any individual who is employed by an Employer.
1.12 "Employer" means Data Research Associates, Inc. or any affiliate
or successor of either that subsequently adopts this Plan. Such
term includes any other organization that is a member of a controlled
group of businesses with any Employer within the meaning of Sections
414(b), (c), and (m) of the Code.
1.13 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.14 "Fiduciary" means any person who has discretionary authority with
respect to administration of the Plan, handling of the Plan's assets,
or acts as a professional investment advisor or fund manager with
respect to the Plan's assets.
1.15 "Life Event" means, and is limited to a Participant's marriage
or divorce; the death of a Participant's spouse or child; the
birth or adoption of a Participant's child; or the termination
of employment of the Participant's spouse; a change in employment
status from full-time to part-time (or vice versa) by the
Participant or the Participant's spouse; taking of an unpaid leave
of absence by either the Participant or the Participant's spouse;
or a significant change in the Participant's health benefits
coverage, or of such coverage related to the spouse's employment.
1.16 "Named Fiduciary" means the Company, an Employer, the Plan
Administrator, and the Trustee.
1.17 "Participant" means an Employee who becomes a Participant
pursuant to Article II.
1.18 "Plan" means the Data Research Associates, Inc. Cafeteria
Plan and related Trust created by this Agreement, as it may
hereafter be amended from time to time.
1.19 "Plan Administrator" means the person appointed by the
Company with authority and responsibility to manage and direct
the operation and administration of the Plan. If no such person
is named, the Plan Administrator shall be the Company.
1.20 "Plan Year" means the annual accounting period of the Plan,
which shall begin January 1 of each year and end on December 31
of each year.
1.21 "Qualified Benefit" means any benefit excluded from taxation
under Chapter I of the Code (other than Sections 117, 124, 127,
or 132), including (a) any group-term life insurance coverage that
is includible in gross income only by virtue of exceeding the dollar
limitation on nontaxable coverage under Section 79 of the Code; and
(b) any other benefit permitted by the Income Tax Regulations.
1.22 "Reimbursable Expense" means any out-of-pocket expense of a
Participant that qualifies for reimbursement under the Dependent
Care Assistance Benefit.
1.23 "Service" means the performance of service for an Employer as an
Employee for at least one hour during a month in the 12-consecutive
month period beginning on an Employee's hire date, and each
anniversary thereof, for which the Employee is compensated or
entitled to be compensated.
1.24 "Trustee" means the person, persons or institution (and their
successors) appointed by the Board of Directors as provided in
Article VIII hereof and empowered to hold and disburse the funds
that are created hereunder.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility to Participate
Each Employee of the Company shall be eligible to participate in the
Plan on the first day of the month coincident with, or next following, the day
on which the Employee has completed and filed a Benefit Election Form in
accordance with Article III.
Notwithstanding the elective provisions as to benefits contained
herein, it is provided that participation in the Insurance Premium Benefits
described in Article VI shall be automatic for any Employee who has previously
elected any form of payroll deduction for insurance premiums for any benefit
described in Article VI, and the adjustments to any such Employee's taxable
wages occasioned by the salary reduction provisions of the proposed or final
Income Tax Regulations under Section 125 of the Code shall be deemed to have
been consented to, unless the Employee has elected to cancel any such insurance
coverage during any applicable enrollment period for health insurance or has
filed a negative election with the Plan Administrator relative to the
applicability of Section 125 to such payroll deductions.
2.02 Termination of Participation
Participation shall terminate on the last day of the month
that an Employee ceases to be an Employee.
Subject to any specific limitations for any particular benefit
which the Participant has elected, (a) participation shall be continued
during a leave of absence for which the Participant continues to receive a
salary from his or her employer and (b) participation shall be suspended
during an unpaid leave of absence; provided, however, nothing in this Section
shall prevent a Participant on unpaid leave from utilizing any available
Reimbursement Account benefits, as provided below, as if such Participant
were otherwise actively employed by the Company.
Notwithstanding any other provision herein, nothing contained in
this Plan shall have the effect of negating the rights of any Participant, or
beneficiary of any Participant, to continuation of medical-type benefits, as
may otherwise be required by Code or by ERISA.
ARTICLE III
BENEFIT ELECTIONS
3.01 Benefit Election and Salary Reduction Agreement Form Contents
The Benefit Election and Salary Reduction Agreement form shall
contain the following information:
(a) Name of the Participant;
(b) Benefits elected by the Participant pursuant to Article VI, including
any negative election relative to any Insurance Premium Benefit;
(c) The Plan Year, or other period of time, for which such elections are
effective;
(d) Specific amounts to be allocated to the Benefit Account for each elected
Benefit (provided that an election to participate in the Insurance Premium
Benefits of the Plan shall be deemed to be made at the Participant's share of
the insurance premium expense);
A provision by which an Employee agrees to a salary reduction to the
extent that employee contributions are required to purchase benefits elected
under the Plan;
Such additional information as the Plan Administrator shall deem
appropriate.
3.02 Election of Benefits
(a) An Employee who is a Participant must complete, sign and file an Benefit
Election Form
with the Plan Administrator prior to July 1, 1997 in order to become a
Participant for the
1997 Plan Year; provided, however, no affirmative election shall be required
by a Participant
who is participating only in the Insurance Premium Benefit portion of the Plan.
(b) An Employee who becomes eligible to become a Participant after the July 1,
1997 must
complete, sign and file an initial Benefit Election Form with the Plan
Administrator during
the 30 day period beginning on the day the Employee first becomes eligible to
participate in
the Plan. If an Employee first becomes eligible to become a Participant after
the end of an
annual Election Period, the elections made on the initial Benefit Election
Form shall be
effective, subject to Section 3.05, for the period beginning on the first
day of
participation and ending on the last day of the Plan Year within which such
participation began.
(c) An Eligible Employee who fails to complete, sign and file a Benefit
Election Form with
the Plan Administrator in accordance with paragraph (a) or (b) above during
an initial
election period may become a participant on a later date in accordance with
Section 3.03 or 3.04.
3.03 Annual Benefit Election Period
Each Employee who is a Participant or who is eligible to become a
Participant must complete, sign and file a Benefit Election Form during the
Election Period. The elections made by the Participant on this Benefit Election
Form shall be effective, subject to Section 3.04, for entire Plan Year beginning
on the Anniversary Date. An Employee who is a Participant and who fails to
complete, sign and file a Benefit Election Form as required by this Section 3.03
shall seemed to have elected to continue the same benefits and coverages then in
effect for such Participant.
3.04 Changes of Benefit Elections
A Participant may change or terminate the election of benefits (and any
salary reduction agreement referenced in Section 5.01) within 30 days of the
occurrence of a Life Event. An Employee who is eligible to become a Participant
but failed to complete a Benefit Election Form during the initial Election
Period pursuant to Section 3.02(a) or (b) may become a Participant and file a
Benefit Election Form within 30 days of the occurrence of a Life Event.
Elections made pursuant to this Section 3.04 shall be effective for the balance
of the Plan Year in which the election is made and beginning on the first
day of
the pay period next following the day the new Benefit Election Form is filed
with
the Plan Administrator, other than as provided in Section 3.04(b), below.
A Participant may revoke a prior election, or elect alternate coverage,
with respect to the balance of the Plan Year if any independent, third-party
provider of medical benefits previously elected by the Participant either
significantly
increases the premiums for such coverage, or significantly
curtails or terminates such plans, during the Plan Year coverage period. A
Participant otherwise entitled to make a revocation or alternate election under
this Section must do so within 30 days of receipt of written notice from the
Plan Administrator of the significant change in cost or composition of the
benefit originally elected. Accordingly, the Plan Administrator shall have the
affirmative duty of providing Participants with written notification of such
changes as soon as is administratively feasible.
3.05 Termination of Election
A Participant may revoke a prior election upon termination of
employment. Likewise, failure to make required contributions for any benefit
elected under this Plan shall automatically terminate any prior election with
respect to such benefit, unless delinquent contributions are brought current
within 30 days of the date that they became delinquent. If revocation occurs
under this Section 3.05, no new election may be made by such Participant during
the remaining coverage period of the Plan Year.
ARTICLE IV
PARTICIPANT BENEFIT ACCOUNTS
4.01 Provision for Participant Accounts
The Plan Administrator shall maintain a Participant Account for each
Participant. The Participant Account may be divided into subaccounts
(hereinafter referred to as "Individual Benefit Accounts"). If Dependent Care
Expense benefits are elected, a Dependent Care Expense Individual Benefit
Account shall be created.
4.02 Accounting For Participant Accounts
Amounts shall be credited to the Participant Account in accordance with
Article
V and allocated to Individual Benefit Accounts in accordance with Section 5.02.
Individual
Benefit Accounts shall be debited in accordance with Sections 5.04, 5.06,
and 6.01(a)-(b).
4.03 Nature of Participant Accounts
No money shall actually be allocated to any Participant Account
or Individual Benefit Account; any such Account shall be of a memorandum
nature, maintained by the Administrator for accounting purposes, and shall not
be representative of any identifiable trust assets. No interest will be
credited to or paid on amounts credited to the Participant Account or any
Benefit Account.
ARTICLE V
CREDITS AND DEBITS TO ACCOUNTS
5.01 Source of Credits to Participant Accounts
During the applicable Election Period determined under Article III,
an Employee may enter into a salary reduction agreement with an Employer. The
maximum amount of such salary reduction shall not exceed the limitation
contained in Section 6.03. No money or other contribution shall be paid by any
Participant to his or her Participant Account, other than as provided in this
Article V.
5.02 Allocations to Participant Subaccounts
Amounts credited to a Participant's Account shall be allocated, on
the date credited, to the respective Individual Benefit Accounts of the
Participant pursuant to the elections made by the Participant in accordance
with, Article VI. All payments of benefit amounts under the Plan shall be
debited against the appropriate Benefit Account.
5.03 Allocations Irrevocable During Plan Year
Except as provided in Section 3.04, neither (a) the amounts to be
credited to a Participant Account during a Plan Year pursuant to Sections 5.01
and 5.02, nor (b) the allocation of such amounts to the appropriate Individual
Benefit Accounts of a Participant pursuant to Section 5.02, can be changed
during the Plan Year.
5.04 Unused Benefits
No current or former Participant shall have any right or interest
in unused benefit credits that have not been applied to the payment of
benefits elected hereunder for that Plan Year. Accordingly, any resulting
excess of Participants' contributions over benefits elected plus the
reasonable administrative expenses will be refunded by the Trust to the
Company after the expiration of days after the close of the Plan Year, and
the Company shall be free to apply such refund in any manner it sees fit.
5.05 Reduction of Certain Elections to Prevent Discrimination
The Plan Administrator shall have the unilateral authority to reduce
the benefit elections of certain employees if such a reduction is necessary to
prevent the Plan from becoming discriminatory within the meaning of Section
125(b) of the Code. The Administrator's power to reduce benefits extends to the
following cases:
(a) In the case that Dependent Care Assistance Benefits have been elected by an
Employee who is a highly compensated individual or an owner within the meaning
of Section 129(d)(2) and (4) of the Code, as amended by the Tax Reform Act of
1986; and
(b) In each other case of benefits elected, the Employee is considered to be
"Highly Compensated" within the meaning of Section 125(e) of the Code, or is
otherwise a "Key Employee" within the meaning of Section 416(i)(1) of the Code,
and the regulations thereunder.
5.06 Modification of Elections due to Premium Increases
The Plan Administrator may automatically increase or decrease the
amount of a Participant's Salary Reduction during the Plan Year in response to
an appropriate change in the premiums charged by an insurer for any of the
insured benefits elected hereunder, commensurate with the time that the insurer
has made such premium change effective. Unless the Participant is entitled to a
change of election under Section 3.04(b), the adjusted salary reduction amount
shall be in effect until the end of the Plan Year coverage period, or earlier
change in premiums required by the insurer, or by another insurer providing
substituted coverage during the Plan Year.
ARTICLE VI
BENEFITS
6.01 Benefits Available Under the Plan
The Qualified Benefits available for election are one or more
of the following:
(a) Dependent Care Expense Reimbursement Benefit. Pursuant to a separate,
written document, the Company maintains a Dependent Care Assistance Plan. Under
such Plan, payment shall be made to the Participant in the form of an Employer-
provided amount through, and in accordance with the provisions of, the
Company's Dependent Care Assistance Plan, a copy of which is attached hereto and
made a part hereof, established and maintained under Section 129 of the Code.
The maximum amount provided under this form of benefit during any Plan Year may
not exceed the earned income of an unmarried Participant, or the lesser of the
earned income of the Participant or the Participant's spouse, if he or she is
married. In no event may the annual benefit provided for any Participant during
any Plan Year under this Section exceed $5,000, or, if the Participant is
married and files a separate tax return, $2,500. To receive benefits under
this Section, the Participant must file a written claim for benefits with the
Plan Administrator which shall include substantiation of any such claims prior
to being eligible to receive reimbursement for eligible dependent care expenses
under this part. The Plan Administrator shall be entitled to rely on any written
statements made by the Participant or any of his dependents concerning
compliance with Sections 21 and 129 of the Code, and shall be under no duty to
make investigation of the accuracy of such statements.
(b) Insurance Premium Benefit. Payments shall be made to the appropriate
Insurer of amounts equal to the premiums otherwise payable by (or on behalf of)
the Participant during the Plan Year, for coverage of the Participant, or the
Participant's spouse or dependents, under the insurance programs maintained by
the Company pursuant to this Plan, as set out below. Each Participant shall
have the right to select that portion of his or her available benefit funds
to be used to provide such benefit. The maximum benefit under this Section
shall be the amount of premiums due during the Plan Year. In the event of
premium changes that become effective during a Plan Year, a Participant's
existing election as to a salary reduction shall automatically be adjusted
to reflect the increases or decreases, as provided in Section 5.06, above.
6.02 Cash Benefit
In lieu of the Qualified Benefits herein provided, to the extent
that a Participant waives benefits thereunder, such Participant shall be
deemed to have elected to receive equivalent amounts as a taxable benefit
in the form of cash compensation.
6.03 Overall Limitation on Annual Benefits
The maximum dollar amount of Employer contributions that may be
applied for the benefit of any individual Participant hereunder toward the
purchase of nontaxable benefits provided herein during any Plan Year shall
be the sum of the limitations set forth in paragraphs (a) and (b) of Section
6.01.
6.04 Requirement that Participant Contributions Be by Salary Reduction
Any employee contributions required toward the purchase of the
qualified benefits selected under Article VI shall be made by a reduction
in the Participant's taxable compensation (to the extent such benefits would
be considered to be tax-free under Chapter I of the Code), and by after tax
salary deduction where the elected benefit is not tax-free, as indicated on
the Participant's benefit Election and Salary Reduction Agreement.
6.05 Continuation of Coverage
Each benefit plan made available under Article VI that is considered
to be a "group health plan" under Section 5000(b)(1) of the Code, because
employees and their families are provided with health care benefits within
the meaning of Section 213(d)(1) of the Code shall contain the necessary
provisions required by Section 4980B of the Code and Section 601 of ERISA,
to assure that such benefits may be continued on or after the occurrence of
the qualifying events defined in Section 498OB(f)(3) of the Code.
ARTICLE VII
PLAN ADMENISTRATION
7.01 Allocation of Authority
Except as to those functions reserved within the Plan to the
Company or the Board of Directors, the Plan Administrator shall control
and manage the operation and Administration of the Plan and shall direct
the Trustee in the discharge of the duties enumerated in Article VIII,
below. The Plan Administrator shall have the exclusive right (except as
to matters reserved to the Board of Directors by the Plan or which the
Board may reserve to itself) to interpret the Plan and to decide all
matters arising thereunder, including the right to remedy possible
ambiguities, inconsistencies, or omissions. All determinations of the
Plan Administrator or the Board of Directors with respect to any matter
hereunder shall be conclusive and binding on all persons. Without limiting
the generality of the foregoing, the Plan Administrator shall have the
following powers and duties:
(a) To require any person to furnish such reasonable information as he may
request for the
purpose of the proper administration of the Plan as a condition to
receiving any benefits under the Plan;
(b) To make and enforce such rules and regulations and prescribe the use of
such forms as he shall deem necessary for the efficient administration of
the Plan;
(c) To decide on questions concerning the Plan and the eligibility of any
Employee to
participate in the Plan, in accordance with the provisions of the Plan;
(d) To determine the amount of benefits which shall be payable to any person
in accordance with the provisions of the Plan; to inform the Company, Insurer
or Trustee (if any), as appropriate, of the amount of such Benefits; and to
provide a full and fair review to any Participant whose claim for benefits
has been denied in whole or in part;
(e) To designate other persons to carry out any duty or power which would
otherwise be a fiduciary responsibility of the Plan Administrator, under the
terms of the Plan.
7.02 Provision for Third-Party Plan Service Providers
The Plan Administrator, subject to approval of the Board of
Directors, may employ the services of such persons as it may deem necessary
or desirable in connection with operation of the Plan. The Plan Administrator,
the Company (and any person to whom it may delegate any duty or power in
connection with the administration of the Plan), and all persons connected
therewith may rely upon all tables, valuations, certificates, reports and
opinions furnished by any duly appointed actuary, accountant, (including
Employees who are actuaries or accountants), consultant, third party
administration service provider, legal counsel, or other specialist, and
they shall be fully protected in respect to any action taken or permitted in
good faith in reliance thereon. All actions so taken or permitted shall be
conclusive and binding as to all persons.
7.03 Several Fiduciary Liability
To the extent permitted by law, neither the Plan Administrator nor
any other person shall incur any liability for any acts or for failure to act
except for his own willful misconduct or willful breach of this Plan.
7.04 Compensation of Plan Administrator
Unless otherwise agreed to by the Board of Directors, the Plan
Administrator shall serve without compensation for services rendered in such
capacity, but all reasonable expenses incurred in the performance of his duties
shall be paid by the Company.
7.05 Bonding
Unless otherwise determined by the Board of Directors, or unless
required by any Federal or State law, the Plan Administrator shall not be
required to give any bond or other security in any jurisdiction in connection
with the administration of this Plan.
7.06 Payment of Administrative Expenses
All reasonable expenses incurred in administering the Plan, including
but not limited to administrative fees and expenses owing to any third party
administrative service provider, actuary, consultant, accountant, attorney,
specialist, or other person or organization that may be employed by the Plan
Administrator in connection with the Administration thereof, shall be paid by
the Company, provided, however that each Participant shall bear the monthly
cost (if any) charged by a third party administrator for maintenance of his
Benefit Account unless otherwise paid by the Company.
7.07 Funding Policy
The Company shall have the right to enter into a contract with one
or more insurance companies for the purposes of providing any benefits under
the Plan and to replace any of such insurance companies or contracts. Any
dividends, retroactive rate adjustments or other refunds of any type which
may become payable under any such insurance contract shall not be assets of
the Plan but shall be the property of, and shall be retained by the Company.
7.08 Source of Payments
The Company, the Employers, Trust Fund, and any insurance company
contracts purchased or held by the Company or the Trustees shall be the sole
sources of benefits due under the Plan. No employee or beneficiary shall have
any right to, or interest in, any assets of the Company or an Employer in
connection with the benefits provided under the Plan either during
participation in the Plan, or upon termination of participation, other than as
provided in the Plan.
7.09 Disbursement Reports
The Plan Administrator shall issue directions to the Company
concerning all benefits which are to be paid from the Company's general
assets pursuant to the provisions of the Plan.
7.10 Timeliness of Payments
Payments shall be made as soon as administratively feasible
after the required forms and documentation have been received by the Plan
Administrator.
7.11 Requirement that Participants Substantiate Reimbursable Expenses
Each Participant must submit a written Claim Voucher to the Plan
Administrator to receive reimbursements from his Medical Expense
Reimbursement Benefit Account, or Dependent Care Benefit Account, on a form
provided by the Plan Administrator, along with such evidence as the Plan
Administrator shall reasonably deem necessary as to substantiate the nature,
the amount, and timeliness of any expenses that may be reimbursed. Such
request must be submitted by the fourth (4th) Friday of the month in order
to receive a reimbursement for his Reimbursable Expenses in the following
month. Year-end expense reimbursement claims must be submitted to the Plan
Administrator within 90 days of the close of the Plan Year for which the
Benefit election is effective, and during which such expense was incurred,
in order to be eligible for reimbursement. Likewise, if a Participant
terminates participation in the Plan with a credit balance in any Benefit
Account, such Participant shall be entitled to submit to the Plan
Administrator any claims for reimbursement for Reimbursable Expenses incurred
during the Plan Year in which the Participant terminated his or her
employment (up to the amount of such balance) at any time within 90 days
after the close of the Plan Year in which the Participant terminated
participation.
7.12 Limit on Coverage
Any coverage elected by a Participant under this Plan shall
cease if the Participant fails to make any required contributions toward
such coverage.
ARTICLE VIII
TRUST PROVISIONS
8.01 Establishment and Acceptance of Trust
A Trust is hereby created hereunder for the purposes of holding and
administering the assets necessary to provide the benefits stated herein. The
Trust shall receive all contributions from the Employers in cash, or in such
other form that may subsequently be approved by the U.S. Department of Labor.
All amounts so received, together with any earnings thereon (hereinafter called
the "Trust Fund") shall be held, managed, and administered by the Trustee in
accordance with the terms of the Plan and related Trust. By execution of this
Agreement, the Trustee hereby accepts the Trust created hereunder, and agrees
to perform all duties specified herein.
8.02 Investment of Trust Assets
The Trustee shall keep all the assets held in Trust in one or more
demand account or accounts in a federally insured bank, savings and loan
association or other similar financial institution. In addition, at the
direction of the Company, the Trustee may serve as the nominal contract holder
on one or more form or forms of group life or health insurance offered by an
insurer authorized to transact business in the domicile state of the Trust
created herein for purposes of providing benefits hereunder.
8.03 Powers of the Trustee
In addition to other powers expressly invested in the Trustee in
other parts hereof, the Trustee shall have the following powers:
(a) To exercise any of the incidents and rights of ownership with respect to
any financial accounts created and held hereunder, as well as to any insurance
contracts held by the Trustee, subject to the written direction of the Plan
Administrator.
(a) To cause all financial accounts to be registered in the name of the
Trustee or its nominee in bearer form, provided that the books and records of
the Trustee shall at all times reflect the security or other property physically
held by another in bearer form as part of the Trust Fund.
(c) To make, execute, acknowledge and deliver such documents as may be
necessary to carry out the purposes of this Trust.
(d) To settle, compromise or submit to arbitration any claims, debts or
damages due or owing from the Trust; to commence or defend lawsuits or other
legal proceedings; and to represent the Trust in all lawsuits or other legal
proceedings.
(e) To employ suitable agents and legal counsel (who may be counsel for the
Company) and to pay their reasonable fees, expenses and other just compensation.
To perform all such acts and exercise all such rights and privileges,
including those not mentioned herein, as the Trustee may deem necessary to
administer the Trust Fund and to carry out the purposes of this Trust.
8.04 Payments from the Fund
Upon written direction from the Plan Administrator, the Trustee
shall disburse such amounts and at such times as may be necessary to pay the
benefits due under the Plan.
8.05 Trustee Compensation; Trust Expenses
The Trustee shall serve without compensation, unless otherwise agreed
by the Company, but shall be reimbursed by the Company for all reasonable
expenses incurred by it in connection with operation of the Trust. The Company
shall pay all expenses of establishing and maintaining this Plan and Trust
unless the Company directs the Trustee to do so out of the Trust Fund. Any taxes
levied against the Trust fund shall be paid by the Trustee out of such Fund.
8.06 Accounting
The Trustee shall keep detailed records of all receipts,
disbursements, transactions and investments, and shall permit their examination
during reasonable business hours by any officer or employee of the Company
authorized in writing by the Company to do so, or as may be required by law.
Within 180 days following the close of the Plan Year, the Trustee shall submit
to the Plan Administrator a detailed, written report of all financial
activities of the Trust for the most recent Plan Year, including the fair
market value of all assets held by the Trust on the last day of such previous
Plan Year. Upon the expiration of 60 days from the filing of the annual report
with the Plan Administrator as required by this Section 8.06, the Trustee
shall be forever absolved from responsibility to the Company or the Plan
Administrator for the propriety or accuracy of such report, or the transactions
reflected therein, except with respect to acts of commission or omission for
which the Company or the Plan Administrator files a written exception within
said 60 day period.
8.07 Trustee Liability
(a) The Trustee shall be fully protected in relying on the written instructions
and representations of any officer or agent of the Company, or of the Plan
Administrator, after first having made prudent inquiry as to the truth or
accuracy of such instructions or representations.
(b) The Company shall indemnify the Trustee and the Trust Fund against any
liability imposed as a result of a claim asserted by any person or persons
under state or federal law where the Trustee has acted in good faith in
reliance on the written direction of the Company or the Plan Administrator.
(c) The Company may purchase "Errors and Omissions" liability Insurance
for any Trustee.
8.08 Removal and Resignation; Successor Trustee
Any Trustee may resign at any time by delivering to the Company a
written notice of such resignation to take effect not less than 60 days after
such delivery, unless the Company shall accept as adequate a shorter notice.
Any Trustee may be removed by the Company by mailing a certified copy of such
resolution by certified or registered mail addressed to the Trustee at the
Trustee's last known address, or by delivery of said certified copy to the
Trustee, in either instance the certified copy to be accompanied by a written
notification that removal is to take effect on the date specified therein,
unless the Trustee shall accept as adequate a shorter notice. No such removal
shall become effective until the appointment by the Company and the
qualification of a successor Trustee.
Upon the resignation or removal of a Trustee, the Trustee shall
have the right to a settlement of its accounts at the expense of the Company
or the Trust. Upon completion of such accounting and payment to the Trustee
of its expenses, such Trustee shall transfer, assign, convey and deliver such
Trust as it may then be constituted and shall thereupon be discharged from
further accountability for the Trust. The Company covenants that it will
forthwith appoint a successor Trustee in case of resignation or removal of a
Trustee.
Any successor Trustee shall qualify as such by executing,
acknowledging and delivering to the Company an instrument accepting such
appointment hereunder on a form acceptable to the Company, and thereupon
such successor Trustee shall become vested with all title, rights, powers,
discretion, duties and obligations of its predecessor Trustee with the same
effect as if originally named as Trustee herein except that no successor
Trustee shall be liable for the acts or omissions of any other Trustee.
8.09 Term of Trusteeship
Each Trustee shall serve at the pleasure of the Board of Directors
without specific term of trusteeship until removal or resignation occurs.
ARTICLE IX
INSURERS
9.01 Provision Relating to Insurers
No insurer shall be required or permitted to issue an insurance
policy or contract that is inconsistent with the purposes of this Plan, nor be
bound to take any action nor in accordance with the terms of any policy or
contract issued in connection with this Plan. The insurer shall not be deemed
to be a party to this Agreement, nor shall it be bound to interpret the
construction or validity of the Plan or Trust. The insurer shall be protected
from its good faith reliance on the written representations and instructions
of the Trustee and the Plan Administrator, and shall not be responsible for
the initial or continued qualified status of the Plan.
9.02 Definition of Insurer
"Insurer" means any legal reserve life insurance company authorized
to transact business in the domicile state of the Trust.
9.03 Conflicting Provisions
If any provision of any insurance policy or contract conflicts with
the provisions of this Plan and Trust, the provisions of the Plan and Trust
shall prevail.
ARTICLE X
CLAIMS PROCEDURES
10.01 Procedure if Benefits are Denied Under the Plan
Any Employee, beneficiary, or his duly authorized representative may
file a claim for a plan benefit to which the claimant believes that he is
entitled, but that has been previously denied by the Plan Administrator. Such
a claim must be in writing and delivered to the Plan Administrator in person
or by mail, postage prepaid. Within 90 days after receipt of such claim, the
Plan Administrator shall send to the claimant by mail, postage prepaid, notice
of the granting or denying, in whole or in part, of such claim, unless special
circumstances require an extension of time for processing the claim. In no
event may the extension exceed 90 days from the end of the initial period. If
such extension is necessary, the claimant will be given a written notice to
this effect prior to the expiration of the initial 90-day period. The Plan
Administrator shall have full discretion to deny or grant a claim in whole or
in part. If notice of the denial of a claim is not furnished in accordance with
this Section 10.01, the claim shall be deemed denied and the claimant shall be
permitted to exercise his right to review pursuant to Sections 10.03 and 10.04.
10.02 Requirement for Written Notice of Claim Denial
The Plan Administrator shall provide to every claimant who is denied
a claim for benefits a written notice setting forth in a manner calculated to
be understood by the claimant, containing the following information:
(a) The specific reason or reasons for denial;
(b) Specific reference to pertinent Plan provisions on which the denial is
based;
(c A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material is
necessary; and
(d) An explanation of the Plan's claim review procedure.
10.03 Right to Request Hearing on Benefit Denial
Within 60 days after the receipt by the claimant of written
notification of the denial (in whole or in part) of his claim, the claimant
or his duly authorized representative may make a written application to
the Plan Administrator, in person or by certified mail, postage prepaid, to
be afforded a review of such denial; may review pertinent documents; and
may submit issues and comments in writing.
10.04 Disposition of Disputed Claims
Upon receipt of a request for review, the Plan Administrator shall
make a prompt decision on the review matter. The decision on such review
shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references
to the pertinent plan or insurance policy provisions on which the decision was
based. The decision upon review shall be made not later than 60 days after
the Plan Administrator's receipt of a request for a review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered not later than 120 days after receipt of a request
for review. If an extension is necessary, the claimant shall be given written
notice of the extension prior to the expiration of the initial 60 day period.
If notice of the decision on the review is not furnished in accordance with
this Section 10.04, the claim shall be deemed denied and the Claimant shall
be permitted to exercise his right to legal remedy pursuant to Section 10.05.
10.05 Preservation of Remedies
After exhaustion of the claims procedure as provided under this Plan,
nothing shall prevent any person from pursuing any other legal or equitable
remedy.
ARTICLE XI
AMENDMENT OR TERMINATION OF PLAN
11.01 Permanency
While the Company fully expects that this Plan will continue
indefinitely, due to unforeseen, future business contingencies, permanency
of the Plan will be subject to the Company's right to amend or terminate the
Plan, as provided in Sections 11. 02 and 1 1.03, below.
11.02 Company's Right to Amend .
The Company reserves the right to amend the Plan at any time and
from time-to-time, and retroactively if deemed necessary or appropriate to
meet the requirements of Section 125 of the Code, or any similar provisions
of subsequent revenue or other laws, or the rules and regulations from time
to time in effect under any of such laws or to conform with governmental
regulations or other policies, to modify or amend in whole or in part any or
all of the provisions of the Plan; provided, however, that, subject to
Section 5.04, no such modification or amendment shall make it possible for
any Accrued Benefit Account Balance to be used for, or diverted to, purposes
other than for the exclusive benefit of the Participants and their
beneficiaries under the Plan. Any amendments to this Plan may be effected by
a written resolution adopted by a majority of the Board of Directors of the
Company.
11.03 Employer's Right to Terminate
The Company reserves the right to discontinue or terminate the Plan
without prejudice at any time without prior notice. Termination of the Plan
shall be effected by a written resolution adopted by a majority of the
Company's Board of Directors. Furthermore, the Plan will also automatically
terminate if the Company (1) is legally dissolved, (2) makes a general
assignment for the benefit of its creditors, (3) files for liquidation under
the Bankruptcy Code, (4) merges or consolidates with any other entity and it
is not the surviving entity, or if it sells or transfers substantially all of
its assets, or goes out of business, unless the Company's successor in
interest agrees to assume the liabilities under this Plan as to the
Participants and Eligible Dependents.
11.04 Determination of Effective Date of Amendment or Termination
Any such amendment, discontinuance or termination shall be effective
as of such date as the Board of Directors shall determine. Subject to Section
5.06, no amendment discontinuance or termination shall allow the return to any
Employer of any Account Balance nor its use for any purpose other than for the
exclusive benefit of the Participants and Eligible Dependents.
ARTICLE XII
GENERAL PROVISIONS
12.01 Not an Employment Contract
Neither this Plan nor any action taken with respect to it shall
confer upon any person the right to continued employment with any Employer.
12.02 Applicable Laws
The provisions of the Plan shall be construed, administered and
enforced according to applicable Federal law and the laws of the State of
Missouri.
12.02 Post-Mortem Payments
Any Benefit payable under the Plan after the death of a Participant
shall be paid to his surviving spouse (if any), otherwise, to his estate. If
there is doubt as to the right of any beneficiary to receive any amount, the
Plan Administrator may retain such amount until the rights thereto are
determined, without liability for any interest thereon, or it may pay such
amount into any court of appropriate jurisdiction, in either of which events
neither the Plan Administrator, nor any Employer, shall be under any further
liability to any person.
12.04 Nonalienation of Benefits
No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to do so shall be void. No benefit under the Plan
shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person. If any person entitled to
benefits under the Plan becomes bankrupt or attempts to anticipate, alienate,
sell, transfer, assign, pledge, encumber or charge any benefit under the
Plan, or if any attempt is made to subject any such benefit to the debts,
contracts, liabilities, engagements or torts of the person entitled to any
such benefit, except as specifically provided in the Plan, then such benefit
shall cease and terminate at the discretion of the Plan Administrator, and he
may hold or apply the same or any part thereof for the benefit of any dependent
or beneficiary of such person, in such manner and proportion as he may deem
proper.
12.05 Mental or Physical Incompetency
If the Plan Administrator determines that any person entitled to
payments under the Plan is incompetent by reason of physical or mental
disability, he may cause all payments hereafter become due to such person to
be made to any other person for his benefit, without responsibility to follow
the application of amounts so paid. Payments made pursuant to this Section
shall completely discharge the Plan Administrator and Employer from further
liability hereunder.
12.06 Inability to Locate Payee
If the Plan Administrator is unable to make payment to any
Participant or other person to whom a payment is due under the Plan because
he cannot ascertain the identity or whereabouts of such Participant or other
person after reasonable efforts have been made to identify or locate such
person (including a notice of the payment so due) mailed to the last known
address of such Participant or other person as shown on the records of the
Employer), such payment and all subsequent payments otherwise due to such
Participant or other person shall be forfeited seven years after the date of
any such payment first became due.
12.07 Requirement for Proper Forms
All communications in connection with the Plan made by a Participant
shall become effective only when duly executed on any forms as may be required
and furnished by, and filed with, the Plan Administrator.
12.08 Multiple Functions
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
12.09 Tax Effects
Neither the Company, the Plan Administrator nor the Trustee makes
any warranty or other representation as to whether any payments made to or on
behalf of any Participant hereunder will be treated as excludable from gross
income for state or federal income tax purposes.
12.10 Gender and Number
Masculine pronouns include the feminine as well as the neuter
genders, and the singular shall include the plural, unless indicated otherwise
by the context.
12.11 Headings
The Article and Section headings contained herein are for convenience
of reference only, and shall not-be construed as defining or limiting the
matter contained thereunder.
12.12 Incorporation by Reference
The actual terms and conditions of the separate benefits offered
under this Plan are contained in separate, written documents governing each
respective benefit, and shall govern in the event of a conflict between the
individual plan document and this Agreement as to substantive content. To
that end, each such separate document, as amended or subsequently replaced,
is hereby incorporated by reference as if fully recited herein.
12.13 Severability
Should any part of this Plan subsequently be invalidated by a
court of competent jurisdiction, the remainder thereof shall be given
effect to the maximum extent possible.
IN WITNESS WHEREOF, Data Research Associates, Inc., as the Company, has
adopted the foregoing amended and restated Cafeteria Plan this day 17th of
April 1997.
DATA RESEARCH ASSOCIATES, INC.
/s/Katharine W. Biggs
- ------------------------
Name: Katharine W. Biggs
Title: Vice President and Chief Financial Officer
ATTEST:
/s/Laura Haralson
- -----------------
The undersigned, as Trustee of the Cafeteria Plan Trust, hereby acknowledges
receipt of the foregoing instrument this 17th day of April 1997 and agrees to
serve as Trustee thereunder.
/s/ Michael J. Mellinger
- ---------------------------------------
Michael J. Mellinger, President and CEO
DATA RESEARCH ASSOCIATES, INC. DEPENDENT CARE ASSISTANCE PLAN
ARTICLE I
PURPOSE
Data Research Associates, Inc. (hereinafter referred to as the "Company")
has established the Data Research Associates, Inc. Dependent Care Assistance
Plan, as of the Effective Date.
This Plan has been established to reimburse the eligible employees of the
Employer for the cost of dependent care expenses incurred by them incidental
to their being employed. It is intended that the Plan meet the requirements
for qualification under Section 129(d)(1) of the Code, and that benefits paid
employees hereunder be excludable from their gross incomes by virtue of
Section 129(a) of the Code.
ARTICLE II
DEFINITIONS
2.01 "Benefits" means any amounts paid to a Participant in the Plan as
reimbursement for Qualifying Employment Related Expenses paid or incurred by
the Participant during a Plan Year.
2.02 "Code" means the Internal Revenue Code of 1986, as amended.
2.03 "Company" means Data Research Associates, Inc. the sponsor of the
Plan.
2.04 "Dependent" means any individual who is a dependent of a
Participant within the meaning of Section 152(a) of the Code.
2.05 "Earned Income" means all income derived from wages, salaries,
tips, self-employment, and other employee compensation (such as disability or
wage continuation benefits),but does not include (a) any amounts received
pursuant to this Plan or any other dependent care assistance program under
Section 129 of the Code, (b) any amount received as a pension or annuity, or
(c) unemployment or workers compensation.
2.06 "Educational Institution" means any college or university, the
primary function of which is the conduct of formal instruction, and which
routinely maintains a regular faculty and curriculum and normally has an
enrolled student body in attendance at the location where its educational
activities are regularly presented.
2.07 "Effective Date" means July 1, 1997.
2.08 "Eligible Employment Related Expenses" means those Qualifying
Employment-Related Expenses (as defined below) paid or incurred incident to
maintaining employment, other than amounts paid to:
(a) an individual with respect to whom a deduction is allowable
under Code Sec. 151(e) to the Participant or his spouse; or
(b) the Participant's spouse; or
(c) a child of the Participant who is under 19 years of age.
2.09 "Employee" means any individual who is employed by an Employer.
2.10 "Employer" means Data Research Associates, Inc. or any affiliate
or successor of either that subsequently adopts this Plan. Such term includes
any other organization that is a member of a controlled group of businesses
with any Employer within the meaning of Sections 414(b), (c), and (m) of the
Code.
2.11 "Participant" means any Employee who has met the eligibility
requirements contained in Article III, below.
2.12 "Plan" means the Data Research Associates, Inc. Dependent Care
Assistance Plan.
2.13 "Plan Administrator" means the person appointed by the Company
having the authority and responsibility to manage and direct the operation and
administration of the Plan.
2.14 "Plan Year" means the annual accounting period of the Plan, which
begins on January 1 of each year and ends on December 31 of each year.
2.15 "Qualifying Daycare Center" means (a) a child daycare center which
complies with all applicable state and local licensing laws and regulations of
the jurisdiction in which it is operated; (b) provides care for more than six
individuals (other than individuals who reside at such daycare center); and (c)
receives a fee, payment or grant in return for services to individuals for
whom it provides services, without regard to whether such facility is operated
for a profit.
2.16 "Qualifying Employment-Related Expenses" means those expenses
that would be considered to be employment-related expenses under Section
21(b)(2) of the Code (relating to expenses for household and dependent care
services necessary for gainful employment) if paid for by the Employee.
2.17 "Qualifying Individual" means:
(a) a Dependent of the Participant who is under the age of 13;
(b) a Dependent of a Participant who is mentally or physically
incapable of caring for himself or herself; or
(c) the Spouse of a Participant who is mentally or physically
incapable of caring for himself or herself.
2.18 "Qualifying Services" means services performed:
(a) in the Participant's home; or
(b) outside the Participant's home for (1) the care of a Dependent
of the Participant who is under age 13, or (2) the care of any other
Qualifying Individual who resides at least eight hours per day in the
Participant's household.
2.19 "Services" means the services performed relating to the care of a
Qualifying Individual that enables the Participant or his spouse to remain
gainfully employed.
2.20 "Spouse" means an individual who is legally married to a
Participant, but shall not include an individual legally separated from the
Participant under a divorce or separate maintenance decree.
2.21 "Student" means an individual who, during each of five or more
calendar months during the Plan Year, is a full time student at an Educational
Institution.
ARTICLE III
ELIGIBILITY
Each Employee who meets the eligibility requirements of the Data Research
Associates, Inc. Cafeteria Plan shall be eligible to participate in the Plan.
ARTICLE IV
BENEFITS
4.01 Eligibility for Benefits
Each Participant in the Plan shall be entitled to a benefit hereunder for all
Eligible Employment Related Expenses incurred by him or her on or after the
effective date of participation, subject to the limitations contained in
Article V, below.
4.02 Claims for Benefits
No benefit shall be paid hereunder unless a Participant has
first submitted a written claim for benefits to the Plan Administrator on a
form specified by the Plan Administrator, and pursuant to the procedures set
out in the Data Research Associates, Inc. Cafeteria Plan. Upon receipt of a
properly documented claim, the Employer shall pay the Participant the benefits
provided under this Plan within the time specified for payment under Data
Research Associates, Inc. Cafeteria Plan. A Participant may submit a claim for
reimbursement for a Qualifying Expense arising during the Plan Year at any
time during the period that begins when the expense is incurred, and ends 90
days after the close of the Plan Year.
4.03 Required Information
Each Participant's claim for benefits shall contain a written
statement containing the following information:
(a) the Dependent or Dependents for whom services are to be or
have been performed;
(b) the nature of the services performed on behalf of the
Participant;
(c) the amount of the requested reimbursement;
(d) the relationship of the service provider to the
Participant, if any;
(e) if the services are performed by a child of the Participant,
the age of such child;
(f) the place where any services are being or will be performed;
(g) if services are to be performed outside the Participant's
household, a statement as to whether the Dependent being provided with such
services spends at least eight hours per day in such household;
(h) if services are being or are to be performed in a daycare
center that regularly provides dependent care services for more than 6
individuals on a nonresident basis, a statement the such facility meets the
criteria for qualification set out in Section 2.15, above, and Code Sec.
21(b)(2)(C); and
(i) if the Participant is married, a statement of (1) the
Spouse's salary or wages, if employed, or (2) if the Spouse is not employed, a
statement that (i) he or she is incapacitated, or (ii) he or she is a full time
student at an Educational Institution and the months of the Plan Year that such
Spouse will be in attendance at such Institution.
4.04 Payment of Benefits
The Plan Administrator shall make the reimbursement payments provided
herein to a Participant as soon as is administratively feasible.
4.05 Repayment of Excess Reimbursements
If, as of the end of any Plan Year, it is determined that a
Participant has received payments under this Plan that exceed the amount of
Qualifying Expenses that have been substantiated by such Participant during
the Plan Year, the Plan Administrator shall give the Participant prompt
written notice of any such excess amount, and the Participant shall repay the
amount of such excess to the Employer within 60 days of receipt of such
notification.
4.06 Termination of Benefits
If a Participant ceases to be an employee of the Employer, such
Participant shall continue to be treated as an active Participant for the
remainder of the Plan Year in which termination occurs to the extent of any
outstanding credit balance remaining in such employee's Reimbursement Account.
Such Participant shall have the right to submit a claim for reimbursement for
any Eligible Dependent Care Expense arising during the Plan Year of
termination at any time prior to the expiration of the 90-day period following
the close of such Plan Year.
ARTICLE V
BENEFIT LIMITATIONS
5.01 Source of Payments
All benefits derived hereunder shall be paid exclusively from the
Participant's Dependent Care Expense Reimbursement Account under the Data
Research Associates, Inc. Cafeteria Plan. In no event shall benefit payments
hereunder exceed the amounts available for reimbursement under such Dependent
Care Expense Reimbursement Account, net of any required administrative service
fees and charges.
5.02 Earned Income Limitation
(a) No payment otherwise due a Participant hereunder shall
exceed the lesser of:
(1) the Participant's earned income for the applicable month;
(2) the earned income of the Participant's Spouse for such
month; or
(3) the balance standing to the Participant's credit in his
Dependent Care Expense Reimbursement Account under the Data Research
Associates, Inc. Cafeteria Plan.
(b) For purposes of paragraph (a), a Spouse of a Participant who
is not employed during a month in which the Participant incurs Eligible
Employment Related Expenses and which Spouse is either incapacitated or is a
Student shall be deemed to have earned income for such month equal to:
(1) $200, if there is one Qualifying Individual for whom the
Participant incurs Eligible Employment Related Expenses; or
(2) $400, if there are more than one Qualifying Individuals
for whom the Participant incurs Eligible Employment Related Expenses.
5.03 Dollar Limitation
In no event may benefits provided for any Participant during any
Plan Year exceed $5,000, or if the Participant is married and files a
separate income tax return, $2,500.
ARTICLE VI
PLAN ADMINISTRATION
6.01 Administrative Functions
The Plan Administrator shall be responsible for the day-to-day
operation of the Plan, including verification of Eligible Employment Related
Dependent Care Expenses, and determine the amounts that are eligible for
reimbursement. The Plan Administrator may retain such consultants,
actuaries, legal counsel and third party administrators as it deems necessary
to fulfill its administrative functions hereunder.
6.02 Annual Statements
The Plan Administrator shall indicate the amount of reimbursement
benefits made pursuant to this Plan during the precedent calendar year on the
Form W-2 Wage and Tax Statement of each Participant electing benefits
hereunder on or before January 31 of each year that this Plan is in effect.
ARTICLE VII
CLAIMS PROCEDURE
7.01 Procedure if Benefits are Denied Under the Plan
Any Participant, beneficiary, or his duly authorized
representative may file a claim for a plan benefit to which the claimant
believes that he is entitled. Such a claim must be in writing on a Benefit
Claim Form and delivered to the Plan Administrator, in person or by mail,
postage paid. Within 90 days after receipt of such claim, the Plan
Administrator shall send to the claimant, by mail, postage prepaid, notice of
the granting or denying, in whole or in part, of such claim, unless special
circumstances require an extension of time for processing the claim. In no
event may the extension exceed 90 days from the end of the initial period. If
such extension is necessary, the claimant will be given a written notice to
this effect prior to the expiration of the initial 90-day period. The Plan
Administrator shall have full discretion to deny or grant a claim in whole or
in part. If notice of the denial of a claim is not furnished in accordance
with the Section 7.01, the claim shall be deemed denied and the claimant shall
be permitted to exercise his right to review pursuant to Sections 7.03 and
7.04.
7.02 Requirement for Written Notice of Claim Denial
The Plan Administrator shall provide, to every claimant who is
denied a claim or benefits, written notice setting forth in a manner
calculated to be understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the
denial is based;
(c) A description of any additional material of information
necessary for the claimant to perfect the claim and an explanation
of why such material is necessary, and
(d) An explanation of the Plan's claim review procedure.
7.03 Right to Request Hearing on Benefit Denial
Within 60 days after the receipt by the claimant of written
notification of the denial (in whole or in part) of his claim, the claimant or
his duly authorized representative, upon written application to the Plan
Administrator, in person or by certified mail, postage prepaid, may request a
review of such denial, may review pertinent documents, and may submit issues
and comments in writing.
7.04 Disposition of Disputed Claims
Upon its receipt of notice of a request for review, the Plan
Administrator shall make a prompt decision on the review. The decision on
review shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent plan or insurance policy provisions on which the
decision is based. The decision on review shall be made not later than 60 days
after the Plan Administrator's receipt of a request for a review, unless
special circumstances require an extension of time for processing, in which
case a decision shall be rendered not later than 120 days after receipt of a
request for review. If an extension is necessary, the claimant shall be given
written notice of the extension prior to the expiration of the initial 60 day
period. If notice of the decision on the review is not furnished in accordance
with this Section 7.04, the claim shall be deemed denied and the Claimant
shall be permitted to exercise his right to legal remedy pursuant to Section
7.05.
7.05 Preservation of Other Remedies
After exhaustion of the claims procedures provided under this
Plan, nothing shall prevent any person from pursuing any other legal or
equitable remedy otherwise available.
ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
8.01 Permanency
While the Employer fully expects that this Plan will continue
indefinitely, due to unforeseen, future business contingencies, permanency
of the Plan will be subject to the Company's right to amend or terminate
the Plan, as provided in Sections 8.02 and 8.03, below.
8.02 Employer's Right to Amend
The Company reserves the right to amend the Plan at any time and
from time-to-time, and retroactively if deemed necessary or appropriate to
meet the requirements of Code Sec. 129, or any similar provisions of
subsequent revenue or other laws, or the rules and regulations in effect under
any of such laws or to conform with governmental regulations or other
policies, to modify or amend in whole or in part any 'or all of the
provisions of the Plan; provided, however, that no such modification or
amendment shall make it possible or any Expense Reimbursement Account Balance
to be used for, or diverted to, purposes other than for the exclusive benefit
of Participants and their beneficiaries under the Plan. This Plan may be
amended by a written resolution adopted by a majority of the Board of
Directors of the Company.
8.03 Employer's Right to Terminate
The Company reserves the right to discontinue or terminate the
Plan at any time without prejudice. This Plan may be ten-terminated by a written
resolution adopted by a majority of the Board of Directors of the Company.
This Plan also shall terminate automatically if the Company (1) is legally
dissolved, (2) makes a general assignment for the benefit of its creditors,
(3) files for liquidation under the Bankruptcy Code, (4) merges or
consolidates with any other entity and it is not the surviving entity, or
if it sells or transfers substantially all of its assets, or goes out of
business, unless the Company's successor in interest agrees to assume the
liabilities under this Plan as to the Participants and Eligible Dependents.
8.04 Determination of Effective Date of Amendment or Termination
Any such amendment, discontinuance or termination shall be
effective at such date as the Board of Directors of the Employer shall
determine. Subject to Section 4.06, no amendment, discontinuance or
termination shall allow the return to any Employer of any Account Balance nor
its use for any purpose other than for the exclusive benefit of Participants
and their beneficiaries.
ARTICLE IX
GENERAL PROVISIONS
9.01 No Employment Rights Conferred
Neither this Plan nor any action taken with respect to it shall
confer upon any person the right to be continued in the employment of the
Employer.
9.02 Post-Mortem Payments
Any Benefit payable under the Plan after the death of a
Participant shall be paid to his surviving spouse (if any), otherwise, to his
estate. If there is doubt as to the right of any person to receive any amount,
the Administrator may retain such amount until the rights thereto are
determined, without liability or any interest thereon, or it may pay such
amount into any court of appropriate jurisdiction, in either of which events
neither the Administrator, nor any Employer, shall be under any further
liability to any person.
9.03 Nonalienation of Benefits
No benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to do so shall be void. No benefit under the Plan
shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person. If any person entitled to
benefits under the Plan becomes bankrupt or attempts to anticipate, alienate,
sell, transfer, assign, pledge, encumber or charge any benefit under the Plan,
or if any attempt is made to subject any such benefit to the debts, contracts,
liabilities, engagements or torts of the person entitled to any such benefit,
except as specifically provided in the Plan, then such benefit shall cease and
terminate in the discretion of the Plan Administrator, and he may hold or
apply the same or any part thereof to the benefit of any dependent or
beneficiary of such person, in such manner and proportion as he may deem
proper.
9.04 Mental or Physical Incompetency
If the Plan Administrator determines that any person entitled to
payments under the Plan is incompetent by reason of physical or mental
disability, as established by a court of competent jurisdiction, the
Administrator may cause all payments thereafter becoming due to such person to
be made to any other person for his benefit, without responsibility to follow
the application of amounts so paid. Payments made pursuant to this Section
shall completely discharge the Plan Administrator and the Employer.
9.05 Inability to Locate Payee
If the Plan Administrator is unable to make payment to any
Participant or other person to whom a payment is due under the Plan because he
cannot ascertain the identity or whereabouts of such Participant or other
person after reasonable efforts have been made to identify or locate such
person (including a notice of the payment so due mailed to the last known
address of such Participant or other person as shown on the records of the
Employer), such payment and all subsequent payments otherwise due to such
Participant or other person shall be forfeited seven years after the date such
payment first became due.
9.06 Requirement of Proper Forms
All communications in connection with the Plan made by a
Participant shall become effective only when duly executed on forms provided
by an filed with the Plan Administrator.
9.07 Source of Payments
The Employer shall be the sole source of benefits under the Plan.
No Employee or beneficiary shall have any right to, or interest in, any assets
of the Employer upon termination of employment or otherwise, except as
provided from time to time under the Plan, and then only to the extent of the
benefits payable under the Plan to such Employee or beneficiary.
9.08 Tax Effects
Neither the Employer nor the Plan Administrator make any
warranty or other representation as to whether or not any payments received
by a Participant hereunder will be treated as includible in gross income for
federal or state income tax purposes.
9.09 Multiple Functions
Any person or group or persons may serve in more than one
fiduciary capacity with respect to the Plan.
9.10 Gender and Number
Masculine pronouns include the feminine as well as the masculine
gender, and the singular shall include the plural, unless indicated otherwise
by the context.
9.11 Headings
The Article and Section headings contained herein are for
convenience of reference only, and shall not be construed as defining or
limiting the matter contained thereunder.
9.12 Applicable Laws
This Plan shall, as to matters not otherwise preempted by federal
law, be construed according to the laws of the State of Missouri.
9.13 Severability
Should any part of this Plan subsequently be invalidated by a
court of competent jurisdiction, the remainder thereof shall be given effect
to the maximum extent possible.
Press Release.
Data Research Associates Announces Stock Repurchase Plan
ST. LOUIS, July 17 -- Data Research Associates, Inc. (Nasdaq:DRAI) announced
today that its Board of Directors had authorized the repurchase of its Common
Stock in an aggregate amount of up to $4 million in purchase price.
Purchases would be made from time to time over the next twelve months in the
open market and through privately negotiated transactions, subject to general
market and other conditions. The buyback would be financed out of existing
cash, cash equivalents and short-term investments. As of the June 30 conclusion
of the company's third fiscal quarter, these totaled $17.1 million (unaudited),
and the company had no long-term debt.
"This plan reflects the board's confidence in our long-term prospects,"
said Michael J. Mellinger, Chairman, President and CEO. "We view the repurchase
of our shares as an attractive investment opportunity and a further means of
returning value to our shareholders."
DRA, headquartered in St. Louis, is a leading systems integrator for libraries
and other information providers, offering its own proprietary information
services software; third-party software and hardware; Internet, World Wide Web
and other networking services; and other related support services. Its World
Wide Web page is located at http://www.dra.com.
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The schedule contains summary financial information extracted from
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