<PAGE> 1
As filed with the Securities and Exchange Commission on October 28, 1999
Registration No. 333-_________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DANKA BUSINESS SYSTEMS PLC
(Exact Name of Registrant as Specified in Its Charter)
ENGLAND 98-0052869
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
11201 Danka Circle North
St. Petersburg, Florida 33716
(Address of Principal Executive Offices) (Zip Code)
DANKA 401(k) PROFIT SHARING PLAN
(Full Title of the Plan)
Larry K. Switzer
Chief Executive Officer
Danka Business Systems PLC
c/o Danka Industries, Inc.
11201 Danka Circle North
St. Petersburg, Florida 33716
(Name and Address of Agent for Service)
(727) 576-6003
(Telephone Number, Including Area Code, of Agent for Service)
Copies to:
John E. Lowe, Esq.
Michael H. Altman, Esq.
Altheimer & Gray
10 S. Wacker Drive
Chicago, Illinois 60606
(312) 715-4000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED AMOUNT TO BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------- ----------------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Ordinary shares, 1.25 p each 20,000,000 shares $2.4138805 per share $48,277,610 $13,421.18
represented by American
Depositary Shares.(2)(3)
American Depositary Shares 5,000,000 ADSs N/A N/A N/A
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</TABLE>
1. Inserted solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h), the fee is calculated on the basis of the Mid
Market Price for the Registrant's ordinary shares on the London Stock
Exchange on October 27, 1999. Dollar amounts have been calculated from
pence trading prices at the rate of 1.6477 dollars per pound, which was the
noon buying rate in New York City for cable transfers in pounds sterling
on October 27, 1999, as certified for customs purposes by the Federal
Reserve Bank of New York.
2. In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the 401(k) Profit Sharing Plan described
herein.
3. Pursuant to Rule 416(a) under the Securities Act of 1933, this Registration
Statement registers such indeterminate number of additional shares as may
be issuable under the Plan in connection with share splits, share dividends
or similar transactions.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Danka Business Systems PLC
(the "Registrant") with the Securities and Exchange Commission (the
"Commission") are incorporated by reference into this Registration Statement:
(a) Annual Report on Form 10-K for the period ended March 31,
1999, filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") on July 14, 1999.
(b) Amendment to Annual Report on Form 10-K/A, filed by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act on July
29, 1999.
(c) Form 8-K Current Report of the Registrant filed on July
16, 1999 regarding amendments to the Registrant's credit agreements.
(d) Form 8-K Current Report of the Registrant filed on August
5, 1999 regarding the sale of the Registrant's Omnifax division.
(e) Form 10-Q Quarterly Report of the Registrant for the
period ended June 30, 1999, as filed on August 16, 1999.
(f) The description of the Registrant's Ordinary shares
contained in Amendment No. 2 to Form 20-F filed by the Registrant
pursuant to Section 12(g) of the Exchange Act and declared effective
by the Commission on December 17, 1992.
All documents subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange
Act, or filed with the Commission by the Danka 401(k) Profit Sharing Plan (the
"Plan") pursuant to Section 15(d) of the Exchange Act, after the date of this
Registration Statement, but prior to the filing of a post-effective amendment
to this Registration Statement which indicates that all securities offered by
this Registration Statement have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement. Each document incorporated by
reference into this Registration Statement shall be deemed to be a part of this
Registration Statement from the date of the filing of such document with the
Commission until the information contained therein is superseded, modified or
updated by any subsequently filed document which is incorporated by reference
into this Registration Statement or by any document which constitutes part of
the prospectus relating to the Plan which is used to satisfy the requirements
of Section 10(a) of the Securities Act and Rule 428 promulgated thereunder.
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ITEM 4. DESCRIPTION OF SECURITIES.
The classes of securities to be offered under this
Registration Statement, other than interests of participation in the Plan, are
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 154 of the Registrant's current Articles of
Association provides:
"Subject to the provisions of the Statutes, every Director or
other officer or Auditor for the time being of the Company shall be
indemnified out of the assets of the Company against all costs,
charges, expenses, losses or liabilities which he may sustain or incur
in or about the actual or purported execution of the duties of his
office or otherwise in relation thereto, including (without prejudice
to the generality of the foregoing) any liability incurred by him in
defending any proceedings, whether civil or criminal, in which
judgment is given in his favor or in which he is acquitted or in
connection with any application in which relief is granted to him by
the Court from liability for negligence, default, breach of duty or
breach of trust in relation to the affairs of the Company."
The relevant provisions of the Statutes are Section 310 and
727 of the Companies Act 1985, as amended by the Companies Act of 1989.
Section 310 provides:
"(1) This section applies to any provision, whether confined
in a company's articles or in any contract with the company or
otherwise, for exempting any officer of the company or any person
(whether an officer or not) employed by the company as auditor from,
or indemnifying him against any liability which by virtue of any rule
of law would otherwise attach to him in respect of any negligence,
default, breach of duty or breach of trust of which he may be guilty
in relation to the company.
(2) Except as provided by the following subsection, any such
provision is void.
(3) This section does not prevent a company:
(a) from purchasing and maintaining for any such officer
or auditor insurance against any such liability, or
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(b) from indemnifying any such officer or auditor against
any liability incurred by him -
(i) in defending any proceedings (whether civil or
criminal) in which judgment is given in his favor or he is acquitted,
or
(ii) in connection with any application under Section
144(3) or (4) (acquisition of shares by innocent nominee) or Section
727 (general power to grant relief in case of honest and reasonable
conduct) in which relief is granted to him by the court."
Section 727 provides:
"(1) If in any proceedings for negligence, default, breach of
duty or breach of trust against an officer of a company or a person
employed by a company as auditor (whether he is or is not an officer
of the company) it appears to the court hearing the case that the
officer or person is or may be liable in respect of the negligence,
default, breach of duty or breach of trust, but that he has acted
honestly and reasonably, and that having regard to all the
circumstances of the case (including those connected with his
appointment) he ought fairly to be excused for the negligence,
default, breach of duty or breach of trust, that court may relieve him
either wholly or partly, from his liability on such terms as it thinks
fit.
"(2) If any such officer or person as above mentioned has
reason to apprehend that any claim will or might be made against him
in respect of any negligence, default, breach of duty or breach of
trust, he may apply to the court for relief; and the court on the
application has the same power to relieve him as under this section it
would have had if it had been a court before which proceedings against
that person for negligence, default, breach of duty or breach of trust
had been brought.
"(3) Where a case to which subsection (1) applies is being
tried by a judge with a jury, the judge, after hearing the evidence,
may, if he is satisfied that the defendant or defender ought in
pursuance of that subsection to be relieved either in whole or in part
from the liability sought to be enforced against him, withdraw the
case in whole or in part from the jury and forthwith direct judgment
to be entered for the defendant or defender on such terms as to costs
or otherwise as the judge may think proper."
Directors and officers of the Registrant are, subject to
policy terms and limitations, indemnified against directors' and officers'
liability under insurance contracts.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. EXHIBITS.
The following are filed herewith as part of this Registration
Statement:
EXHIBIT NO. EXHIBIT
----------- -------
4.1(1) Memorandum of Association of the Registrant.
4.2(1) Articles of Association of the Registrant.
4.3 Resolution approving increase in authorized
share capital of the Registrant, approved of the
Annual General Meeting of Shareholders of the
Registrant on July 19, 1996.
4.4 Danka 401(k) Profit Sharing Plan, and amendments 1
and 2 thereto.
4.5(2) Deposit Agreement dated June 25, 1992, form of
Amendment No. 1 dated February 26, 1993, form of
Amendment No. 2 dated July 2, 1993, and form of
Amendment No. 3 dated August 16, 1994 between The Bank
of New York Company and Owners and Holders of American
Depositary Receipts.
4.6(2) Form of American Depositary Receipt.
4.7(2) Form of Ordinary Share Certificate.
5.1 Danka has submitted or will submit the Plan and any
amendments thereto to the Internal Revenue Service
("IRS") in a timely manner and has made or will make
all changes required by the IRS in order to quality the
Plan.
5.2 Opinion of Clifford Chance.
23.1 Consent of KPMG LLP.
23.2 The consent of Clifford Chance to inclusion of their
legal opinion as an exhibit to this Registration
Statement is included in the opinion filed as Exhibit
5.2.
- ---------------
(1) Previously filed as an exhibit to the Registrant's Registration Statement
on Form 20-F filed with the Commission on November 10, 1992, File No.
O-20828.
(2) Previously filed as exhibits, to the Registration Statement on Form S-1
the Registrant filed with the Commission on September 2, 1993,
Registration No. 33-68278, which is incorporated by reference.
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<PAGE> 6
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification
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against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Petersburg, State of
Florida, on this 28th day of October, 1999
DANKA BUSINESS SYSTEMS PLC
By: /s/ Larry K. Switzer
----------------------------------
Larry K. Switzer,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the following
persons (or by their designated attorney-in-fact) in the capacities indicated
on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ David W. Kendall Chairman and Director October 28, 1999
- ------------------------------------
David W. Kendall
/s/ Larry K. Switzer Director and Chief Executive Officer October 28, 1999
- ------------------------------------
Larry K. Switzer
/s/ Brian L. Merriman Director and President and October 28, 1999
- ------------------------------------ Chief Operating Officer
Brian L. Merriman
/s/ Michael B. Gifford Director October 28, 1999
- ------------------------------------
Michael B. Gifford
/s/ Richard C. Lappin Director October 28, 1999
- ------------------------------------
Richard C. Lappin
/s/ Keith J. Merrifield Director October 28, 1999
- ------------------------------------
Keith J. Merrifield
/s/ J. Ernest Riddle Director October 28, 1999
- ------------------------------------
J. Ernest Riddle
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ C. Anthony Wainwright Director October 28, 1999
- ------------------------------------
C. Anthony Wainwright
/s/ James F. White, Jr. Director October 28, 1999
- ------------------------------------
James F. White, Jr.
/s/ F. Mark Wolfinger Executive Vice President and October 28, 1999
- ------------------------------------ Chief Financial Officer
F. Mark Wolfinger (principal financial officer)
</TABLE>
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THE PLAN
Pursuant to the requirements of the Securities Act of 1933,
as amended, the plan administrator have duly caused this Registration Statement
to be signed on the Plan's behalf by the undersigned, thereunto duly authorized,
in the City of St. Petersburg, State of Florida, on October 28, 1999.
DANKA 401(k) PROFIT SHARING PLAN
By: DANKA Office Imaging Company,
as Plan Administrator
By: /s/ David Berg
---------------------------------------------
Its: Executive Vice President and General Counsel
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<PAGE> 1
EXHIBIT 4.3
RESOLVED that the authorized share capital of the Company be and hereby is
increased from (pound)5,000,000 to (pound)6,250,000 by the creation of
100,000,000 additional Ordinary Shares of 1.25 pence each.
<PAGE> 1
Exhibit 4.4
DANKA CORPORATION
401(k) PROFIT SHARING PLAN
as amended and restated
effective as of January 1, 1997
--------------------------------
<PAGE> 2
TABLE OF CONTENTS
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PAGE
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<S> <C> <C> <C>
DEFINITIONS....................................................................................................................2
ARTICLE II
ELIGIBILITY AND ENROLLMENT.....................................................................................................8
2.1 Eligible Employees.....................................................................................8
2.2 Time of Participation..................................................................................8
2.3 Application for Participation..........................................................................8
2.4 Re-employed Participant................................................................................8
2.5 Change in Employment Status............................................................................9
2.6 Cessation of Participation.............................................................................9
2.7 Treatment of Leased Employees..........................................................................9
2.8 Omission of Eligible Employee..........................................................................9
2.9 Credit for Service With Prior Employers................................................................9
ARTICLE III
CONTRIBUTIONS.................................................................................................................10
3.1 Company Profit Sharing Contributions..................................................................10
3.2 Matching Contributions................................................................................10
3.3 Wage or Salary Deferral Contributions.................................................................10
3.4 Rollover Contributions................................................................................11
3.5 No Voluntary Employee Contributions...................................................................12
3.6 Allocation of Contributions...........................................................................12
3.7 Time and Method of Funding............................................................................12
3.8 Trust Fund............................................................................................13
3.9 Section 415 Limits on Account Contributions...........................................................13
3.10 Excess Contributions..................................................................................13
3.11 Limitation of Benefits Under All Plans................................................................14
ARTICLE IV
POWERS AND DUTIES OF THE TRUSTEE..............................................................................................16
ARTICLE V
PLAN INVESTMENTS..............................................................................................................17
5.1 Investment of Funds...................................................................................17
5.2 Investment Funds......................................................................................17
5.3 Change of Investment Elections........................................................................18
5.4 Investment in Qualified Employee Securities...........................................................19
5.5 Loans.................................................................................................19
</TABLE>
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<TABLE>
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ARTICLE VI
RETIREMENT BENEFITS...........................................................................................................21
6.1 Normal or Early Retirement............................................................................21
6.2 Late Retirement.......................................................................................21
6.3 Benefits on Permanent Disability......................................................................21
6.4 Vesting on Other Termination of Employment............................................................21
6.5 Forms of Benefit Payments.............................................................................22
6.6 Required Beginning Date...............................................................................24
6.7 Waiver of Joint and Survivor Annuity..................................................................24
6.8 Installment Payments..................................................................................25
6.9 Direct Rollovers......................................................................................25
6.10 Latest Date for Commencement of Benefits..............................................................25
6.11 Earliest Date Payment May Commence....................................................................26
6.12 Notice with Respect to Joint and Survivor Annuity Option..............................................26
6.13 In-Service Withdrawals. ..............................................................................27
ARTICLE VII
DEATH BENEFITS................................................................................................................29
7.1 Designation of Beneficiary............................................................................29
7.2 Payments to Beneficiaries.............................................................................29
7.3 Required Minimum Distributions........................................................................29
7.4 Spousal Annuities.....................................................................................30
7.5 Distribution to Minors................................................................................30
ARTICLE VIII
ADMINISTRATION................................................................................................................31
8.1 Designation...........................................................................................31
8.2 Notice to Trustee.....................................................................................31
8.3 Powers and Duties.....................................................................................31
8.4 Finality of Action....................................................................................31
8.5 Nondiscriminatory Action..............................................................................32
8.6 Information Furnished to Plan Administrator...........................................................32
8.7 Information to be Furnished to Trustee................................................................32
8.8 Examination of Records................................................................................32
8.9 Bonding...............................................................................................32
8.10 Prohibited Transactions...............................................................................32
8.11 Procedures for Domestic Relations Order...............................................................32
ARTICLE IX
AMENDMENT AND TERMINATION.....................................................................................................34
9.1 Amendment.............................................................................................34
9.2 Termination...........................................................................................34
9.3 Rights of Participants................................................................................34
ARTICLE X
MISCELLANEOUS PROVISIONS......................................................................................................35
10.1 Governing Law.........................................................................................35
10.2 No Specific Interest..................................................................................35
10.3 Action by Board of Directors..........................................................................35
</TABLE>
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<TABLE>
<S> <C> <C> <C>
10.4 Merger or Transfer of Assets..........................................................................35
10.5 Claims Procedure......................................................................................35
10.6 Appeals Procedure.....................................................................................35
10.7 Participant's Rights..................................................................................35
10.8 Short Plan Year.......................................................................................36
10.9 Failure to Qualify....................................................................................36
10.10 Inalienability of Benefits............................................................................36
10.11 Continuation of Plan by Successor Employer............................................................36
10.12 USERRA Requirements for Reemployed Veterans...........................................................36
ARTICLE XI
PARTICIPATING EMPLOYERS.......................................................................................................37
11.1 Adoption by Other Employers...........................................................................37
11.2 Requirements of Participating Employers...............................................................37
11.3 Designation of Agent..................................................................................37
11.4 Employee Transfers....................................................................................37
11.5 Participating Employer's Contribution.................................................................37
11.6 Discontinuance of Participation.......................................................................37
11.7 Plan Administrator's Authority........................................................................37
ARTICLE XII
TOP HEAVY PROVISIONS..........................................................................................................38
12.1 Determination of Top Heavy Status.....................................................................38
12.2 Consequences of Top Heavy Status......................................................................38
12.3 Definitions...........................................................................................38
12.4 Miscellaneous.........................................................................................40
12.5 Super Top Heavy.......................................................................................40
12.6 Consequences of Super Top Heavy Status................................................................40
ARTICLE XIII
SPECIAL LIMITATIONS APPLICABLE................................................................................................41
13.1 Definitions...........................................................................................41
13.2 Actual Deferral Percentage Limitation.................................................................42
13.3 Corrective Distributions..............................................................................43
13.4 Discrimination Test with Respect to Matching Contributions............................................43
13.5 Multiple Use of Alternate Limits......................................................................44
13.6 Correction of Excess Deferrals........................................................................44
APPENDIX A
LIST OF PREDECESSOR EMPLOYERS.................................................................................................46
APPENDIX B
GRANDFATHERED OPTIONAL FORMS OF BENEFIT.......................................................................................47
</TABLE>
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DANKA CORPORATION
401(k) PROFIT SHARING PLAN
The Danka Corporation 401(k) Profit Sharing Plan was adopted by Danka
Industries, Inc., effective January 1, 1984.
The Plan is amended in this restated 401(k) Profit Sharing Plan
document in order to incorporate certain provisions required by the Internal
Revenue Code, as amended by the Small Business Job Protection Act of 1986 and
by other subsequent federal tax legislation, and, effective as of January 1,
1997, to incorporate the various plan changes made in connection with the
acquisition of the Danka Office Imaging Division from Eastman Kodak Company.
The primary purposes of this Plan are to enable eligible employees to
participate in the profits of the Company and to enable eligible employees of
the Company to defer receipt of a portion of their wages or salary as more
fully set forth in the Plan.
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<PAGE> 6
ARTICLE I
DEFINITIONS
The words which follow shall have the following meanings unless the
context clearly indicates otherwise.
1.1 "ACCOUNTS" means the accounts created to record a Participant's
interest in the Plan, including a Company Contributions Account, a
separate Matching Contributions Account, a Deferral Account, and if applicable,
a Rollover Account.
1.2 "AFFILIATED EMPLOYER" means any corporation, partnership or other
entity which is a member of a controlled group of corporations (within the
meaning of Section 414(b) of the Code), a group of entities under common
control (within the meaning of Section 414(c) of the Code) or an affiliated
service group (within the meaning of Section 414(m) of the Code), which
includes the Company, or any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code.
1.3 "ANNUAL COMPENSATION" means the wages and other compensation
reported for an Employee pursuant to Code Section 3401 for services rendered to
the Company during the Plan Year while a Participant, and, for periods after
June 30, 1997, reduced by reimbursements or other expense allowances, moving
expenses, taxable fringe benefits and similar items (even if includable in
gross income). For purposes of Sections 3.2, 3.3, 3.6 and Article XIII, Annual
Compensation shall include Elective Contributions deferred by the Participant
pursuant to a wage or salary reduction agreement with the Company pursuant to
Section 3.3 or amounts withheld from the Participant's pay pursuant to the
Company's section 125 cafeteria plan.
The Annual Compensation of any Participant which may be taken into
account under the Plan for any Plan Year shall not exceed $160,000, or such
other limit as may be applicable to such Plan Year pursuant to the annual
adjustments announced by the Internal Revenue Service in accordance with Code
Sections 401(a)(17) and 415(d).
1.4 "ANNUITY STARTING DATE" means (a) the first day of the first
period for which any benefits are payable to a Participant as an annuity, or
(b) in the case of a benefit not payable in the form of an annuity, the first
day on which all events have occurred which entitle the Participant to receive
such benefit.
1.5 "BENEFICIARY" means the person or entity a Participant or Former
Participant has designated to receive any benefits derived from his or her
Accounts which may be payable after his or her death, pursuant to Section 7.1.
1.6 "BOARD OF DIRECTORS" means the current Board of Directors of the
Company.
1.7 "CODE" means the Internal Revenue Code of 1986, as amended.
1.8 "COMPANY" means Danka Corporation or any other U.S. subsidiary of
Danka Business Systems, PLC, which shall adopt the Plan.
1.9 "CONTINUOUS EMPLOYMENT." For purposes of the eligibility
requirements of Section 2.2, an Employee will be credited with "Continuous
Employment" for the aggregate of all time periods beginning with the Employee's
Employment Commencement Date and ending on the date the Employee incurs a Break
in Service. An Employee will also receive credit for any period of severance of
less than 12 consecutive months. For purposes of this Section 1.9 only, a
"Break in Service" is a period of severance of at least 12 consecutive months,
and a "period of severance" is a continuous period of time during which the
Employee is not employed by the Company or any Affiliated Employer, beginning
on the date the Employee quits, retires
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<PAGE> 7
or is discharged, or, if earlier, the 12-month anniversary of the date on which
the Employee was first absent from service.
1.10 "DOMESTIC RELATIONS ORDER" means any judgment, decree or order
(including approval of a property settlement agreement) which relates to the
provision of child support, alimony payments or marital property rights to a
spouse, former spouse, child or other dependent of a Participant or Former
Participant, and which is made pursuant to a state domestic relations law
(including a community property law).
1.11 "EARLY RETIREMENT" means the termination of employment on or
after the date a Participant has attained age 55 and completed at least 10
years of vesting service.
1.12 "ELECTIVE CONTRIBUTIONS" means the amounts an Employee elects to
have contributed to this Plan on his or her behalf pursuant to a salary or wage
reduction agreement made under Section 3.3 of the Plan.
1.13 "ELECTIVE DEFERRALS" means, with respect to any taxable year of a
Participant, the sum of (i) the Elective Contributions the Participant has made
to this Plan during such year, (ii) all other contributions made by or on
behalf of such Participant for such year by any employer pursuant to a salary
or wage deferral election under any qualified cash or deferred arrangement (as
defined in Section 401(k) of the Code) under any plan of any employer, (iii)
any employer contributions to a simplified employee pension arrangement
described in Code Section 408(k)(6), and (iv) any amounts used to purchase a
tax-sheltered annuity contract under Code Section 403(b), made by any employer
on the Participant's behalf for such year pursuant to a salary or wage
reduction agreement.
1.14 "ELIGIBILITY COMPUTATION PERIOD". For purposes of Section 2.2, an
Employee's initial Eligibility Computation Period shall be the 12-month period
commencing with the Employee's Employment Commencement Date. Thereafter, the
Eligibility Computation Period shall be the Plan Year, commencing with the Plan
Year which includes the first anniversary of the Employment Commencement Date.
"Eligible Employee" means any Employee who is not a member of a classification
of Employees excluded from participation under Section 2.1.
1.15 "EMPLOYEE" means an individual employed by the Company or another
Participating Employer but shall not include (i) any employee of the Company
who is a member of a bargaining unit unless the relevant collective bargaining
agreement provides for members to participate in this Plan, (ii) any Leased
Employee, or (iii) any individual employed by an Affiliated Employer which is
not another Participating Employer.
1.16 "EMPLOYMENT COMMENCEMENT DATE" means the date an Employee first
performs an Hour of Service for the Company, for another Participating Employer
or for any Affiliated Employer.
1.17 "ENROLLMENT DATE" means the January 1 or July 1 following the
date on which an Employee has satisfied the eligibility requirements set forth
in Sections 2.1 and 2.2 of this Plan. For periods after December 1, 1997, the
Plan shall instead apply quarterly enrollment dates on each January 1, April 1,
July 1, and October 1.
1.18 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.19 "FORMER PARTICIPANT" means a person whose participation in the
Plan has ceased pursuant to Section 2.6, but who has a balance credited to his
or her Accounts.
1.20 "HIGHLY COMPENSATED EMPLOYEE" shall mean any Employee who was (i)
a "5 percent owner" of the Company at any time during the Plan Year for which
the determination is being made (the "Determination Year") or the 12-month
period immediately preceding such Determination Year (the "Look-back Year"), or
(ii) received
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<PAGE> 8
Section 415 Compensation [as defined in Code Section 415(c)(3) and Section 3.9
below] in excess of $80,000 from the Company during the Look-back Year. For
this purpose, the Company and all Affiliated Employers [as defined in Section
1.2 above] shall be treated as a single employer.
1.21 "HOUR OF SERVICE" means:
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties. These hours shall be credited to the
Employee for the computation period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to
payment, on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. However, no more than 501 Hours of
Service shall be credited under this subparagraph (b) to an Employee for any
single continuous period (whether or not such period occurs in a single
computation period). An hour for which an Employee is directly or indirectly
paid, or entitled to payment, on account of a period during which no duties are
performed shall not be credited to the Employee if such payment is made by or
due under a plan maintained solely for the purpose of complying with applicable
worker's compensation, unemployment or disability insurance laws. Hours of
Service shall not be credited for a payment which solely reimburses an Employee
for medical or medically related expenses incurred. For purposes of this
subparagraph (b), a payment shall be deemed to be made or due regardless of
whether such payment is made or due directly, or indirectly through, among
others, a trust fund or insurer to which contributions are made or premiums are
paid, regardless of whether contributions made or due to the trust fund,
insurer or other entity are for the benefit of particular Employees or are on
behalf of a group of Employees in the aggregate;
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either agreed to or awarded. No more than 501 Hours of Service
shall be credited for payments of back pay, to the extent that such back pay is
agreed to or awarded for a period of time during which an Employee did not or
would not have performed duties; and
(d) Each hour for which an Employee is absent from work due to
(1) such Employee's pregnancy, (2) the birth of such Employee's child, (3) the
placement of a child with such Employee in connection with the adoption of such
child by the Employee, or (4) caring for such child for a period beginning
immediately after such birth or placement. Hours of Service pursuant to this
subparagraph (d) shall be credited only to the extent they would have been
credited but for such absence, or if such number of Hours of Service cannot be
determined, at the rate of eight Hours of Service per day of absence. In no
event, however, shall the number of Hours of Service credited pursuant to this
subparagraph (d) exceed the minimum number of Hours of Service needed to
prevent the occurrence of a One Year Break in Service in the Plan Year such
absence begins. However, if in the Plan Year such absence begins, the Employee
has earned a sufficient number of Hours of Service to prevent the occurrence of
a One Year Break in Service without regard to this subparagraph (d), the
Employee shall be credited with the minimum number of Hours of Service needed
to prevent the occurrence of a One Year Break in Service during the Plan Year
which immediately follows the Plan Year in which the absence begins.
Notwithstanding the foregoing, no Hours of Service shall be credited under this
subparagraph (d) unless the Employee furnishes the Plan Administrator with such
information as the Administrator may require to establish (i) that the
Employee's absence from work is due to the reasons described herein and (ii)
the number of days for which there was such an absence. Hours of Service under
this subparagraph (d) shall be credited solely for purposes of preventing the
occurrence of a One Year Break in Service. However, the provisions of this
subparagraph (d) shall apply only if (1) the Employee was in the active service
of the Company or of an Affiliated Employer immediately prior to such absence
and (2) such absence begins in a Plan Year beginning after December 31, 1984.
* * *
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Department of Labor Regulation Section 2530.200b-2(b) and Section
2530.200b-2(c) are hereby incorporated by reference.
If the Company maintains a plan of a predecessor, Hours of Service
with the predecessor shall be treated as Hours of Service with the Company.
Hours worked at overtime, premium pay hours or shift differentials shall be
considered straight-time hours.
The same Hours of Service shall not be credited under more than one
subsection of this Section 1.21.
1.22 "JOINT AND SURVIVOR ANNUITY" means an immediate annuity issued by
an insurance company licensed to do business in the State of Florida, which
contract provides (1) monthly payments to the Former Participant for life, and
(2) upon the Former Participant's death, monthly payments for life to the
spouse to whom the Former Participant was married at the Former Participant's
Annuity Starting Date commenced in an amount equal to one half of the amount
being paid to the former Participant (provided such spouse survives the Former
Participant). The Joint and Survivor Annuity will be the amount of the benefit
which can be purchased with the account balance of the Participant or Former
Participant.
1.23 "LEASED EMPLOYEE" means any individual (other than a common law
employee of the Company) who (i) performs services for the Company pursuant to
an agreement between the Company and any other person which is a leasing
organization within the meaning of Treasury Regulation Section 1.414(n)-1 or
any similar regulation, (ii) who has performed such services for the Company on
a substantially full-time basis for a period of at least one year, and (iii)
who performs such services under primary direction or control by the Company.
For this purpose, an individual will be considered to have performed services
for the Company on a substantially full-time basis during any twelve
consecutive month period if he has completed a number of Hours of Service for
the Company at least equal to the lesser of (a) 1,500 Hours of Service or (b)
75 percent of the median number of Hours of Service completed by Employees
(other than Leased Employees) of the Company in equivalent positions during
such twelve-month period. An individual will not be entitled to treatment as a
Leased Employee unless he or she provides the Plan Administrator with
satisfactory evidence that he or she has satisfied the conditions in this
Section 1.23.
1.24 "LIMITATION YEAR" means the Plan Year.
1.25 "NON-HIGHLY COMPENSATED EMPLOYEE" means any Employee who is not a
Highly Compensated Employee.
1.26 "NORMAL RETIREMENT AGE" means age 65.
1.27 "NORMAL RETIREMENT DATE" means the first day of the month
following the date on which a Participant attains age 65.
1.28 "ONE YEAR BREAK IN SERVICE" means any Vesting Computation Period
during which the Participant has failed to complete more than 500 Hours of
Service with the Company, another Participating Employer, an Affiliated
Employer or with a combination of each. However, a One Year Break in Service
shall not occur because of a Temporary Absence.
1.29 "PARTICIPANT" means an Employee who has satisfied the eligibility
provisions of Sections 2.1 and 2.2, who has enrolled in the Plan, and who has
not terminated participation pursuant to Section 2.6.
1.30 "PERMANENT DISABILITY" means any medically determinable physical
or mental impairment which, in the opinion of the Plan Administrator (based on
medical reports and other evidence acceptable to the Plan Administrator), will
result in the Participant's inability to engage in any substantial gainful
activity, and can be expected to last for the remainder of the Participant's
life or for a continuous period of at least twelve (12) months.
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<PAGE> 10
1.31 "PLAN" means this Danka Corporation 401(k) Profit Sharing Plan
established by the Company, as set forth herein and as amended from time to
time.
1.32 "PLAN ADMINISTRATOR" means the person or Committee of appointed
by the Company to handle the administrative responsibilities of the Plan.
1.33 "PLAN YEAR" means the 12-month period ending December 31st, any
other 12-month period established by the Company and any period of less than 12
months which results from a change in the Plan Year by the Company.
1.34 "QUALIFIED DOMESTIC RELATIONS ORDER" means a Domestic Relations
Order entered after December 31, 1984, which creates or recognizes the
existence of an alternate payee's right to, or assigns to an alternate payee
the right to, receive all or a portion of the benefits payable with respect to
a Participant or Former Participant, which clearly specifies (i) the name and
the last known mailing address (if any) of the Participant or Former
Participant and the name and mailing address of each alternate payee covered by
the order, (ii) the amount or percentage of the Participant's or Former
Participant's benefits to be paid by the Plan to each such alternate payee, or
the manner in which such amount or percentage is to be determined, (iii) the
number of payments or period to which such order applies, and (iv) each plan to
which such order applies. In addition, a Domestic Relations Order will be a
Qualified Domestic Relations Order only if such Domestic Relations Order (i)
does not require the Plan to provide any type or form of benefit, or any
option, not otherwise provided under the Plan, (ii) does not require the Plan
to provide increased benefits, and (iii) does not require the payment of
benefits to an alternate payee which are required to be paid to another
alternate payee under another Domestic Relations Order previously determined to
be a Qualified Domestic Relations Order. A Domestic Relations Order otherwise
satisfying the provisions hereof shall be a Qualified Domestic Relations Order
even though such order requires payment of benefits to be made to an alternate
payee no earlier than the date the Participant or Former Participant attains
(or would have attained) the date which is the Participant's earliest
retirement age, as if the Participant or Former Participant had retired on the
date on which such payment is to begin under such order, and in any form in
which such benefits may be paid under the Plan to the Participant or Former
Participant. The prior sentence shall apply notwithstanding any provisions in
the Plan requiring a termination of employment prior to eligibility for the
payment of benefits.
As used in this Section, an "alternate payee" means any spouse, former
spouse, child or other dependent of a Participant or Former Participant who was
recognized by a Domestic Relations Order as having a right to receive all, or a
portion of, the benefits payable under the Plan with respect to such
Participant or Former Participant.
1.35 "QUALIFIED MILITARY SERVICE" means any service in the United
States uniformed services (as defined in Chapter 43 of Title 38, United States
Code) by any Employee if such Employee is entitled to reemployment rights under
such chapter of the United States Code with respect to such service.
1.36 "TEMPORARY ABSENCE" means absence because of temporary illness,
disability or leave granted by the Company, another Participating Employer, or
an Affiliated Employer in accordance with its nondiscriminatory leave policy,
provided the Employee returns to work with the Company or with an Affiliated
Employer prior to the expiration of the absence. If the Employee does not
return to work with the Company or with an Affiliated Employer prior to such
time, no Temporary Absence will be deemed to have occurred.
An Employee who leaves the active service of the Company or an
Affiliated Employer to enter the Armed Forces of the United States of America
shall be deemed to be on Temporary Absence during the period reemployment
rights are guaranteed by law, provided such Employee returns to the service of
the Company or an Affiliated Employer within such time. If such Employee does
not return to the employment of the Company or an Affiliated Employer prior to
the expiration of said reemployment rights, employment shall be deemed to have
terminated upon entry into the Armed Forces.
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<PAGE> 11
1.37 "TRUST FUND" means the fund established herein to hold and invest
assets of the Plan.
1.38 "TRUSTEE" means the person or entity designated to hold and
invest the Trust Fund. The Trustee of the Plan shall be Merrill Lynch Trust
Company, and any successors thereto which may be appointed by the Board of
Directors.
1.39 "VALUATION DATE" means such date or dates on which the Plan
Administrator may deem it to be advisable to have the fair market value of the
Trust Fund determined. Unless the Plan Administrator determines otherwise,
daily Valuation Dates (on each business day on which trading occurs in the U.S.
stock markets) shall be used in the administration of this Plan.
1.40 "VESTING COMPUTATION PERIOD" means the Plan Year.
1.41 "YEAR OF ELIGIBILITY SERVICE" means an Eligibility Computation
Period during which an Employee completes at least 1,000 Hours of Service.
1.42 "YEAR OF VESTING SERVICE" means a Vesting Computation Period
during which the Employee completes at least 1,000 Hours of Service with the
Company, any other Participating Employer, with any Affiliated Employer or with
a combination of each. Service completed by an Employee prior to incurring a
One Year Break in Service shall be taken into account only if the Employee has
completed at least one Year of Vesting Service subsequent the One Year Break in
Service. Service before incurring a period of five or more consecutive One Year
Breaks in Service shall be disregarded when determining Years of Vesting
Service unless (and only as long as) (i) a Former Participant has a vested
balance in his or her Company Contributions and/or Matching Contributions
Accounts and (ii) the number of consecutive One Year Breaks in Service within
such period does not exceed the number of Years of Vesting Service completed
before such period.
* * *
Unless a different construction and interpretation is clearly required
by the context:
(a) The masculine pronoun, wherever used, includes the feminine
pronoun.
(b) The singular includes the plural and vice versa.
(c) The word "or" is employed both in the disjunctive and
conjunctive sense.
(d) The words "hereby," "herein," "hereof," "hereto" and
"hereunder" and any compounds thereof shall be construed as referring
to this Plan generally and not merely to the particular article,
paragraph or subdivision in which they occur.
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<PAGE> 12
ARTICLE II
ELIGIBILITY AND ENROLLMENT
2.1 ELIGIBLE EMPLOYEES. Each Employee of the Company (or any
Participating Employer) shall be eligible to participate in this Plan once he
or she has satisfied the applicable age and service requirements set forth in
Section 2.2, unless the Employee is a member of one or more of the following
classifications of excluded employees:
(a) Employees included in a unit of employees covered by a
collective bargaining agreement between the relevant employer and one or more
collective bargaining representatives, unless such collective bargaining
agreement calls for members of such bargaining unit to participate in this
Plan;
(b) Nonresident aliens.
(c) Foreign nationals working in the United States on temporary
assignments.
(d) Employees classified by the Company as "contract employees"
or "temporary employees" who are employed only for specific projects.
2.2 TIME OF PARTICIPATION.
(a) For periods prior to January 1, 1998, each Eligible Employee
of the Company shall become a Participant in this Plan on the first Enrollment
Date coinciding with or next following the first date on which he or she has
both attained age 21 and completed a Year of Eligibility Service.
(b) Effective for periods beginning on and after January 1, 1998,
each Eligible Employee of the Company shall become a Participant in the portion
of this Plan permitting Elective Contributions on the first quarterly
Enrollment Date coinciding with or next following the date on which he or she
has completed at least three (3) months of Continuous Employment. No
Participant shall be eligible to participate in the portion of the Plan
providing for Matching Contributions during any period prior to the first
Enrollment Date following his or her completion of a Year of Eligibility
Service during an Eligibility Computation Period.
(c) Any Employee who has not completed a Year of Eligibility
Service on the Enrollment Date following the end of his or her initial
Eligibility Computation Period shall become a Participant (or after January 1,
1998, a Participant with respect to Matching Contributions) as of the first
Enrollment Date after all of the foregoing eligibility requirements are
satisfied.
2.3 APPLICATION FOR PARTICIPATION. In order to become a Participant
hereunder, each Eligible Employee shall file an application with the Company
for participation in the Plan on such application form as may be prescribed by
the Plan Administrator.
2.4 RE-EMPLOYED PARTICIPANT. An Employee who has satisfied the
participation requirements of Section 2.2, who terminates employment with the
Company and who is later reemployed by the Company shall participate again on
the first quarterly Enrollment Date following such reemployment unless such
person's prior Years of Vesting Service are disregarded pursuant to Section
1.42, in which case the Employee shall be treated as newly-hired.
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<PAGE> 13
2.5 CHANGE IN EMPLOYMENT STATUS. A Participant who becomes a member of
a collective bargaining unit shall cease participation at such time, unless the
collective bargaining agreement specifically permits continued participation.
However, such person will continue to earn Years of Service during such time
and shall resume participation in the Plan immediately upon return to an
eligible class of Employees. If an Employee who is a member of a collective
bargaining unit subsequently becomes a member of the eligible class of
Employees, such person shall participate on the next quarterly Enrollment Date
if the person has satisfied the age and service requirements of Section 2.2.
Otherwise, the general eligibility provisions of Section 2.2 shall apply.
2.6 CESSATION OF PARTICIPATION. Participation shall cease when a
Participant quits, dies, becomes disabled, retires, transfers to another
Participating Employer or to an Affiliated Employer, becomes a member of a
collective bargaining unit (subject to Section 2.5), is terminated (on the
Company's payroll records) or incurs a One Year Break in Service. However, a
person whose participation ceases may become a Former Participant.
2.7 TREATMENT OF LEASED EMPLOYEES. A Leased Employee shall not be
eligible to participate in this Plan until such time as the Leased Employee has
(a) become an Employee of the Company and (b) satisfied any applicable service
and age requirements set forth in Section 2.2. Any other individual classified
by the Company as an independent contractor shall not be eligible to
participate in this Plan even if he or she is held to be a common law employee
of the Company for payroll tax purposes or any similar context.
2.8 OMISSION OF ELIGIBLE EMPLOYEE. If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution by the
Company for the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which the
Company would have contributed with respect to him had he not been omitted.
2.9 CREDIT FOR SERVICE WITH PRIOR EMPLOYERS. Each time employees of
another employer become Employees of the Company as the result of the Company's
acquisition of an existing business from such other employers, whether as a
merger with an Affiliated Employer, a purchase of the stock of the business, a
purchase of the operating assets of the business, or the purchase of a division
or other business unit from another employer, the Plan Administrator may, with
the consent of the Company, designate the prior employer as a "Predecessor
Employer" for purposes of this Plan. All such Predecessor Employers shall be
listed in Appendix A to this Plan, as amended from time to time.
Any Employee who was employed by a Predecessor Employer listed in
Appendix A immediately prior to the time he or she became an Employee of the
Company shall be credited, for purposes of the eligibility requirements in
Section 2.2, and for purposes of the vesting provisions of Section 6.4., with
past service credit for all service completed with the Predecessor Employer
prior to the effective date of the acquisition.
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<PAGE> 14
ARTICLE III
CONTRIBUTIONS
3.1 COMPANY PROFIT SHARING CONTRIBUTIONS. Each Plan Year, the Company
may contribute to the Trust Fund such amounts as may be approved by the Board
of Directors of the Company out of the Company's current or accumulated
profits.
3.2 MATCHING CONTRIBUTIONS. The Company shall also make Matching
Contributions to the Trust Fund on behalf of those Participants who have made
Elective Contributions to the Plan for the Plan Year. The amount the Company
will contribute as a Matching Contribution on behalf of each Participant
(expressed as percentage of each of the Participant's Elective Contributions
for a Plan Year) and the maximum amount (expressed as a percentage of pay)
which will be contributed as a Matching Contribution for such Participant, for
each Plan Year shall be determined by the Board of Directors. Unless the Board
of Directors determines otherwise, the Matching Contributions made on behalf of
each Participant for a Plan Year shall be equal to the following amounts:
(a) For Plan Years beginning before January 1, 1997, 50 percent
of the Participant's Elective Contributions to the Plan, up to a maximum
Matching Contribution of 3 percent of the Participant's Annual Compensation for
the Plan Year;
(b) For Plan Years beginning on or after January 1, 1997, 100
percent of the Elective Contributions made by the Participant for the Plan
Year, up to the first 3 percent of the Participant's Annual Compensation for
the Plan Year, plus an additional 50 percent of any Elective Contributions in
excess of 3 percent of the Participant's Annual Compensation, up to a maximum
total Matching Contribution of 4.5 percent of Annual Compensation.
Unless the Company determines otherwise, these Matching Contributions will be
made to the Trust Fund on a monthly basis, at or after the end of each calendar
month of the applicable Plan Year.
3.3 WAGE OR SALARY DEFERRAL CONTRIBUTIONS.
(a) Each Participant may elect to enter into a wage or salary
deferral agreement with the Company. Such agreement shall apply to all future
payroll periods during the year. The agreement shall specify what percentage
(not less than 2 percent and not in excess of 15 percent) of the Participant's
future Annual Compensation shall be deferred as Elective Contributions to the
Plan. However, such deferrals shall be made in integral amounts of 1 percent of
the Participant's Annual Compensation for the relevant pay periods. A
Participant's Elective Contributions for any Plan Year shall be subject to the
limitations set forth in Section 3.3(f) and Section 13.2. Except as otherwise
provided in this Section 3.3, the Company shall contribute to the Trust Fund on
behalf of the Participant Elective Contributions equal to the full amount of
the wage or salary deferral authorized by the Participant. The amounts a
Participant has elected to have contributed to the Plan in his or her deferral
agreement shall be deducted from the Participant's Annual Compensation by means
of
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<PAGE> 15
regular payroll deductions each pay period, and the amounts deducted each pay
period shall be paid to the Trustee as Elective Contributions promptly pursuant
to procedures established by the Plan Administrator, but in no event later than
fifteen (15) business days after the last day of the calendar month which
includes the end of the applicable pay period.
(b) The amount of the wage or salary deferral may be changed by
the Participant on a prospective basis by notifying the Plan Administrator (or
the Trustee's Voice Response System) of such change, in such manner as may be
prescribed in any procedures for Participant elections adopted by the Company
and Plan Administrator. Subject to such procedures, a Participant's change
shall become effective as of the next Enrollment Date, or, effective on and
after January 1, 1998, the next payroll period beginning after such
notification. The wage or salary deferral agreement may be terminated by the
Participant at any time by notifying the Plan Administrator in writing.
The wage or salary deferral agreement shall immediately terminate
if the Participant leaves the employment of the Company.
(c) It is intended that Elective Contributions made pursuant to
this Section 3.3 shall not constitute income to the Participant under the Code
and shall be treated as if made by the Company.
(d) To the extent necessary to comply with the nondiscrimination
requirements of Section 401(k) of the Code, as set forth in Section 13.2 below,
the Company may prospectively amend or revoke a wage or salary deferral
agreement with any Participant at any time. If the Plan Administrator
determines during the course of a Plan Year that such amendments are necessary,
the Plan Administrator shall reduce the Elective Contributions to be made as
salary or wage deferrals by those Highly Compensated Employees whose deferrals
have caused such discriminatory condition, in the amounts necessary to bring
the wage or salary deferral percentage for Highly Compensated Employees (as a
group) for the Plan Year within the limits set forth in Section 13.2. The
Company shall notify each such Participant of any amendment or revocation of
the wage or salary deferral agreement.
If the foregoing deferral reductions do not bring the percentage
of wages or salary deferred for the Highly Compensated Employees (as a group)
into compliance with the limits set forth in Section 13.2, the Company and the
Plan Administrator shall take the corrective actions provided for in Section
13.3 below.
(e) All Elective Contributions contributed to the Trust Fund on
behalf of a Participant pursuant to this Section 3.3, and the earnings credited
to the Participant's Deferral Account with respect to those amounts shall be,
at all times, nonforfeitable.
(f) Notwithstanding the foregoing, the amount of the wage or
salary deferrals which a Participant may direct the Company to make to this
Plan as Elective Contributions during any calendar year shall not, when
aggregated with all other Elective Deferrals made by or on behalf of the
Participant during such calendar year under any plan of any employer, exceed
$9,500 or such greater annual limit under Code Section 402(g) as may result
from adjustments to this limit made from time to time by the Secretary of the
Treasury pursuant to Sections 402(g)(5) and 415(d) of the Code. In the event an
Employee has, during a calendar year, made Elective Contributions to this Plan
which, when aggregated with any Elective Deferrals made on his or her behalf
under other plans for the same calendar year, exceed this limit, the Employee
may request a corrective distribution from the Plan in accordance with Section
13.6.
3.4 ROLLOVER CONTRIBUTIONS. Subject to such procedures for rollover
contributions as the Plan Administrator may adopt, a Participant, or an
eligible Employee who has not yet become a Participant pursuant to Section 2.2,
may elect to transfer any amounts he or she has received as a lump sum
distribution from another tax-qualified retirement plan to this Plan within 60
days of receipt from such other qualified plan,
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<PAGE> 16
or to have any amounts he or she would be entitled to receive from another
tax-qualified plan as an "Eligible Rollover Distribution" [as defined in
Section 6.9] transferred directly to the Trust Fund as a direct rollover to
this Plan. In addition, an Eligible Employee who has received a distribution
from an individual retirement account may elect to contribute any part of the
distribution to this Plan as a rollover contribution but only if:
(a) the amount received from the individual retirement account
represents the entire amount in the IRA,
(b) no part of the IRA is attributable to any source other than
(i) a rollover contribution from another plan which was qualified under the
Code, and (ii) earnings on the rollover contribution, and
(c) the Participant was not self-employed when contributions were
made to the qualified plan mentioned in subparagraph (b).
All amounts transferred pursuant to this Section 3.4 and earnings
on those amounts shall be credited to a Rollover Account, and shall be
nonforfeitable at all times.
3.5 NO VOLUNTARY EMPLOYEE CONTRIBUTIONS. Participants are not
permitted to make any employee contributions to this Plan, other than Elective
Contributions pursuant to Section 3.3, or Rollover Contributions pursuant to
Section 3.4.
3.6 ALLOCATION OF CONTRIBUTIONS. An allocation of the Company's profit
sharing contributions made under Section 3.1 shall be made for each Eligible
Participant as of the last day of the Plan Year for which the profit sharing
contribution is made. Each Participant's allocated share of the Company's
contribution made pursuant to Section 3.1, if any, shall be equal to that
portion of the total profit sharing contribution for the Plan Year calculated
by multiplying the total amount of such contribution by a fraction, the
numerator of which is the Participant's Annual Compensation for the Plan Year
and the denominator of which is the aggregate amount of the Annual Compensation
of all Participants for the Plan Year.
No allocation of the Company profit sharing contributions (if
any) made pursuant to Section 3.1 shall be credited to a Participant's Accounts
for a Plan Year unless the Participant (a) has completed at least 1,000 Hours
of Service during the Plan Year and remains in the active service of the
Company on the last day of the Plan Year, (b) is on an approved Temporary
Absence on the last day of the Plan Year; or (c) has been terminated during the
Plan Year because of retirement, termination of employment on or after age 62,
disability or death.
The Plan Administrator shall advise the Trustee of the
allocations of the Company contributions made pursuant to Section 3.1, the
amount of the Matching Contributions made on behalf of each Participant
pursuant to Section 3.2, the amount of each Participant's Elective
Contributions made pursuant to Section 3.3, and any amounts contributed as
Rollover Contributions pursuant to Section 3.4.
3.7 TIME AND METHOD OF FUNDING. Subject to the rules for Matching
Contributions and Elective Contributions set forth in Sections 3.2 and 3.3, the
Company may make a contribution by single payment or in partial payments at any
time during the Plan Year or during the period permitted by law (including
extensions) for filing the tax return for the preceding taxable year. The
Employer and the named fiduciaries of the Plan will not be subject to any
liability because of the timing of the payment of contributions to the Trustee
or because of the payment of those contributions by the Trustee to any person
for investment.
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<PAGE> 17
3.8 TRUST FUND. All contributions made to the Plan and all income
from those contributions must be held in trust by the Trustee for the exclusive
benefit of Participants, Former Participants and Beneficiaries. However, the
Trustee has no duty to determine that contributions it receives comply with the
provisions of this document, and no obligation to collect any contributions
from the Company or any Participating Employer.
3.9 SECTION 415 LIMITS ON ACCOUNT CONTRIBUTIONS. The contributions and
other additions (the "Annual Additions") made to this Plan and credited to the
accounts of a Participant in a Limitation Year, when aggregated with the Annual
Additions to the Participant's accounts under any other defined contribution
plan maintained by the Company, by any Participating Employer or by both during
such Limitation Year, must not exceed the lesser of:
(a) $30,000.00; or
(b) 25 percent of the Participant's Section 415 Compensation for
the Limitation Year.
For purposes of this Section 3.9, "Annual Additions" shall mean
the sum of the following amounts credited to the Participant's accounts for the
Limitation Year under any defined contribution plan maintained by the Company,
by any Participating Employer or by both:
(a) Company (or Employer) contributions (including matching
contributions and the Elective Contributions made pursuant to Section 3.3);
(b) Forfeitures; and
(c) Any non-deductible voluntary contributions made by the
Participant.
(d) Amounts allocated to an individual medical account [as
defined in section 415(1)(2) of the Code] which is part of a defined benefit
plan maintained by the Company or an Affiliated Employer; and
(e) Amounts derived from contributions paid or accrued in Plan
Years ending after December 31, 1985 which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee [as
defined in section 419A(d)(3) of the Code] under any welfare fund [as defined
in section 419(e) of the Code] maintained by the Company or an Affiliated
Employer.
For purposes of this Section 3.9, the term Section 415
Compensation shall mean a Participant's earned income, wages, salaries and fees
for professional services and other amounts received during the Limitation Year
(whether or not paid in cash) for personal services actually rendered in the
course of employment with the Company or any Affiliated Employer (including,
but not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, tips and
bonuses, and taxable fringe benefits or reimbursements). The term Section 415
Compensation does not include contributions to this Plan or to any other plan
of deferred compensation. It also does not include amounts which receive
special tax benefits (such as premiums for group term life insurance, but only
to the extent premiums are not includable in the Participant's gross income).
For this purpose, the Section 415 Compensation of any Participant which may be
taken into account under this Plan for any Limitation Year shall not exceed
$160,000 or such other limit as may be applicable to such Limitation Year
pursuant to the annual adjustments announced pursuant to Code Sections
401(a)(17) and 415(d).
3.10 EXCESS CONTRIBUTIONS. If a Participant's Annual Additions for a
Limitation Year are greater than the amount permitted by Section 3.9, due to
the allocation of forfeitures, a reasonable error in estimating a Participant's
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<PAGE> 18
annual compensation, or a reasonable error in determining the amount of
Elective Deferrals [within the meaning of Section 402(g)(3) of the Code], the
Plan Administrator shall return to the Participant that portion of the
Participant's Elective Contributions for the Limitation Year necessary to
reduce the excess Annual Additions, to the extent permitted by IRS Regulation
1.415-6(b)(6)(iv). If, after such distribution, the limit on Annual Additions
is still exceeded, the Plan Administrator will reallocate the excess amount
added to the Participant's Company Contributions Account attributable to the
Company profit sharing contributions for the current Plan year among the
accounts of the remaining Participants in the same manner as Company
contributions. If the Annual Additions to all Participants' accounts exceeds
the amount permitted by Section 3.9, after any corrective distributions of
Elective Distributions, the excess amounts shall be transferred to a suspense
account and shall be used to reduce Employer contributions during the next Plan
Year. If the Plan terminates while funds are in the suspense account, those
funds shall be returned to the Company.
If excess contributions result because the Participant is
participating in more than one defined contribution plan, the excess shall be
deemed to have occurred in the plan which is not a pension plan, and shall be
reallocated in accordance with the provisions of said plan. Otherwise, the
provisions of this Section 3.10 shall apply.
3.11 LIMITATION OF BENEFITS UNDER ALL PLANS. If a Participant is also
participating in a defined benefit plan maintained by the Company, by an
Affiliated Employer, or by both, for Plan Years beginning prior to January 1,
2000, the sum of the "defined benefit plan fraction" and the "defined
contribution plan fraction" for that person shall not exceed 1.0 for any
Limitation Year.
The defined benefit plan fraction for any Limitation Year is a
fraction, the numerator of which is the Participant's projected annual benefit
under the defined benefit plan (determined as of the close of the Limitation
Year) and the denominator of which is the lesser of the following amounts for
the particular Limitation Year:
(a) The product of 1.25 (or, if the Plan is top-heavy under
Section 12.1 for that Limitation Year, 1.0) times the maximum dollar limitation
in effect for that Limitation Year.
(b) The product of 1.4 times the amount of Section 415
Compensation which may be taken into account for that Limitation Year for
purposes of calculating the maximum defined benefit payable under the Code.
The defined contribution plan fraction for any Limitation Year is
a fraction, the numerator of which is the sum of the Annual Additions to the
Participant's accounts as of the close of the Limitation Year and all prior
Limitation Years, and the denominator of which is the lesser of the following
amounts for the particular Limitation Year and for each prior Year of Service
with the Company:
(a) The product of 1.25 (or, if the Plan is top-heavy under
Section 12.1 for that Limitation Year, 1.0) times the maximum dollar limitation
in effect for that Limitation Year.
(b) The product of 1.4 times 25 percent of the Participant's
Section 415 Compensation for the Limitation Year.
If these limitations are exceeded for any Participant, the Plan
Administrator shall adjust benefits, contributions, or both, for that person to
satisfy the limitations. However, in making such adjustments, accruals under
the defined benefit plan shall be adjusted first.
For purposes of applying these limits, all defined contribution
plans maintained by the Company, an Affiliated Employer and by both shall be
treated as one defined contribution plan, and all defined
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<PAGE> 19
benefit plans maintained by the Company, an Affiliated Employer and by both
shall be treated as one defined benefit plan.
The foregoing limitations shall apply regardless of whether the
defined benefit plan or the defined contribution plan has been terminated.
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<PAGE> 20
ARTICLE IV
POWERS AND DUTIES OF THE TRUSTEE
The powers and responsibilities of the Trustee with respect to this
Plan are set forth in a separate Trust Agreement between the Company and the
Trustee, as amended from time to time.
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<PAGE> 21
ARTICLE V
PLAN INVESTMENTS
5.1 INVESTMENT OF FUNDS. A Participant, Former Participant or
Beneficiary shall have the right to direct the Trustee with respect to the
investment or reinvestment of any or all of the amounts credited to his or her
Accounts, including, to the extent permitted by Sections 5.4 and 5.5, in
qualifying employer securities or participant loans; provided said direction is
effected by notifying the Plan Administrator and Trustee (or the Trustee's
Voice Response System) in such manner as may be prescribed in the procedures
for Participant elections adopted by the Plan Administrator and the Company.
The Trustee shall follow those instructions, unless they are contrary to the
provisions of this Section 5.1, or of Sections 5.4 and/or 5.5 respectively. By
doing so, the Trustee shall, to the extent permitted by Section 404(c) of
ERISA, bear no responsibility or liability for the subsequent investment
performance of that account or for any losses occurring because of the
Participant's investment directions. Any fees or expenses incurred by Trustee
attributable to personal investment direction shall be billed separately to the
Company by the Trustee and shall be paid by the Company or by deduction from
the affected Account pursuant to direction from the Plan Administrator.
The Plan Administrator may establish reasonable time intervals
when Participant investment directions may be given, and the Trustee shall have
a reasonable time period to effect such directions. Any Participant may direct
the Trustee to invest all or any portion of his or her Accounts in any of the
Investment Funds described in Section 5.2 below.
If an investment manager is appointed pursuant to Section 8.3(g),
the Trustee shall invest the assets of the Trust Fund (or that portion of the
Trust Fund over which the investment manager has investment authority) in
accordance with the instructions which may from time to time be given by the
investment manager, provided the instructions are consistent with the
investment authority in this Article V and the Trust Agreement. Subject to the
foregoing, the Trustee shall not be obligated to inquire into the competency of
the person so designated as investment manager, nor shall the Trustee be
obligated to review the desirability, prudence, reasonableness or soundness of
any instructions rendered by such investment manager. The Trustee shall not be
responsible nor shall the Trustee incur any liability for any depreciation or
loss which may be realized by the Trust Fund as a result of investments made
pursuant to the instructions of such investment manager, and the Trustee shall
have no duty to review or to make recommendations with respect thereto. The
fees of the investment manager shall be paid from the Trust Fund or by the
Company as directed by the Plan Administrator.
The Trustee and the Plan Administrator shall cause the assets of
the Trust Fund to be valued at least annually, as of the last day of each Plan
Year, at their fair market value.
5.2 INVESTMENT FUNDS. The Investment Funds in which a Participant's
Accounts may be invested under the Plan shall consist of the following:
(a) Retirement Preservation Trust. The Merrill Lynch Retirement
Preservation Trust is a collective trust fund that invests primarily
in guaranteed investment contracts (generally with insurance companies
or banks which agree to return principal and a stated rate of return
over a specific period of time) and U.S. Government and U.S.
Government Agency securities.
(b) Federal Securities Trust. The Merrill Lynch Federal
Securities Trust seeks a high current return through investments in
U.S. Government and Government agency securities including U.S.
Government National Mortgage Association ("GNMA"). The Fund will seek
to enhance its return through the use of certain portfolio strategies
involving options, and to hedge its portfolio through the use of
options and futures transactions, which involve certain risk.
(c) Global Allocation Fund. The Merrill Lynch Global Allocation
Fund seeks a high total investment return, consistent with prudent
risk, through a fully managed investment policy utilizing
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<PAGE> 22
United States and foreign equity, debt and money market securities,
the combination of which will be varied from time to time both with
respect to types of securities and markets in response to changing
market and economic trends.
(d) Templeton Foreign Fund. The primary investment objective of
Templeton Foreign Fund is long-term capital growth. The Fund seeks to
achieve its objective by investing mainly in common stocks of
companies outside the United States. The Fund may also invest in bonds
of foreign companies and governments.
(e) Equity Index Trust. The Merrill Lynch Equity Index Trust is a
collective trust fund that seeks to provide investment results that,
so far as possible, duplicate the total return, meaning capital
appreciation and income, of the Standard & Poor's 500 Composite Stock
Price Index. The portfolio consists of common stocks that, so far as
possible, duplicate the composition of Standard & Poor's Index of 500
stocks.
(f) Davis New York Venture Fund. New York Venture Fund seeks to
achieve growth of capital. The Fund invests primarily in common stock
and securities convertible into common stock. The fund ordinarily
invests in securities which its management believes have above-average
appreciation potential.
(g) AIM Constellation Fund. AIM Constellation Fund seeks capital
appreciation. The Fund aggressively seeks to increase shareholders'
capital by investing principally in common stock, with emphasis on
medium-sized and smaller emerging growth companies.
(h) Danka Stock Fund. This fund invests in American Depository
Receipts (ADRs), representing shares of stock in Danka Business
Systems PLC, the parent company of Danka Corporation (Danka).
(i) Kodak Stock Fund. This fund is invested in shares of the
common stock of Eastman Kodak Company transferred to the Trust Fund
from one of the 401(k) plans maintained by Eastman Kodak Company. A
Participant's Account may be invested in the Kodak Stock Fund only if
the Participant participated in a 401(k) savings plan maintained by
Eastman Kodak Company or one of its subsidiaries immediately prior to
becoming an Employee. Only amounts transferred from an Eastman Kodak
Company 401(k) plan may be invested in the Kodak Stock Fund.
Contributions to this Plan may not be invested in the Kodak Stock
Fund, and no transfers from other Investment Funds to the Kodak Stock
Fund will be permitted. Dividends and other earnings of the Kodak
Stock Fund shall not be reinvested in this Fund; the Participant's
share of any such earnings attributable to the portion of his or her
Account invested in the Kodak Stock Fund shall instead be invested in
one or more other Investment Funds in accordance with the
Participant's overall investment election.
If a Participant fails to return written investment instructions,
the Trustee shall invest the allocations to his or her Accounts in the
Retirement Preservation Trust.
The Company reserves the authority to make additional Investment
Funds available, or to replace one or more of the Investment Funds identified
in paragraphs (a) through (g), from time to time, as it may deem to be
appropriate.
5.3 CHANGE OF INVESTMENT ELECTIONS. A Participant may change the
investment directions to be followed by the Trustee in investing the
Participant's future Elective Contributions, Matching Contributions and Company
Contributions made to his or her Accounts on a prospective basis, effective as
of any Valuation Date.
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<PAGE> 23
If a Participant so directs in his or her new investment
election, the Trustee shall also transfer the existing balance (if any) already
credited to the Participant's Accounts to any one or more of the Investment
Funds (other than the Kodak Stock fund) identified in the Participant's new
investment instructions, effective as of the next Valuation Date.
5.4 INVESTMENT IN QUALIFIED EMPLOYEE SECURITIES. The Trustee may
purchase and hold for such Participant's individual investment Account shares
of any class of qualifying employer securities of the Company. The term
"qualifying employer security" shall mean an employer security as defined in
Section 407(d)(5) of ERISA, and certain marketable debt securities of the
Company as defined in Section 407(e) of ERISA.
5.5 LOANS. Subject to such Participant Loan Procedures as may be
adopted by the Plan Administrator, and to the requirements set forth in this
Section 5.5, effective on and after January 1, 1997, a Participant may apply to
borrow from his or her Accounts.
Any loan made to a Participant under this Section 5.5 shall be
subject to the following conditions:
(a) The total amount which any Participant may borrow under this
provision shall in no event, when added to any amounts borrowed under an
equivalent provision of any other retirement plan maintained by the Company or
any Affiliated Employer, exceed the lesser of (a) one-half of the
nonforfeitable balance credited to such person's Accounts at the time the loan
is made, or (b) $50,000. If the Participant had any prior loans outstanding
from the Plan at any time during the twelve (12) month period preceding the
date of the loan, the $50,000 limit shall be reduced by the excess, if any, of
the highest outstanding loan balance for all prior loans to the Participant
from the Plan at any time during such twelve (12) month period over the
Participant's outstanding loan balance from the Plan on the date of the loan.
(b) Each loan from the Plan to a Participant shall bear interest
at a commercially reasonable rate for loans of similar type and purpose at the
time the loan is made. Unless the Trustee determines that a different rate is
advisable, any loan from the Plan shall bear interest at a fixed rate equal to
one percent above the prevailing prime rate/published in the Wall Street
Journal on the last business day of the calendar month prior to the month in
which the loan is requested.
(c) Each loan shall require by its terms that the repayment of
principal and interest be amortized in level biweekly or monthly payments over
a period not extending beyond five years from the date of the loan.
(d) All loans shall be evidenced by promissory notes and such
other documents as the Trustee may reasonably require under the circumstances.
(e) Each person who receives a loan hereunder shall be provided a
clear statement of the charges involved in each loan transaction. This
statement shall include the dollar amount and the annual interest rate of the
financial charge.
(f) Each loan shall be adequately secured, the nature of such
security and the amount thereof to be determined solely by the Administrator
and the Trustee. Each loan shall be made against the assignment of such portion
of the Participant's right, title and interest in and to his or her Accounts as
the Plan Administrator deems appropriate, and the posting of such other
collateral by the Participant as the Plan Administrator may deem advisable or
appropriate. Simultaneously with the delivery of promissory note, any
Participant shall also provide the Plan Administrator with any payroll
deduction needed to authorize the
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<PAGE> 24
Company to withhold the amount of the interest and principal payments on the
loan from the Participant's wages and forward them to the Trust Fund as
repayment of the loan. Notwithstanding the foregoing, a married Participant's
interest in his or her Accounts may not be used as collateral for the loan
unless the Participant's spouse consents in writing to the use of the
Participant's Accounts as security for the loan within the 90-day period ending
on the date on which the loan is to be secured.
(g) If a loan to a Participant is approved, a separate
"Participant Loan Fund" shall be established for the Participant. The
Participant shall transfer amounts required for such loan from the portion of
his or her Accounts invested in other Investment Funds in accordance with rules
and regulations established by the Plan Administrator. The promissory note
obtained by the Trustee as evidence of such loan shall be allocated to the
borrowing Participant's "Participant Loan Fund" and interest and principal
payments in respect of such note shall be allocated to the borrowing
Participant. Such interest and principal payments received by the Trust Fund
from the Participant under the promissory note shall be reinvested in
accordance with the Participant's current investment election.
(h) The eligibility requirements a Participant must satisfy to
qualify for a loan under this Section 5.5, the number of loans a Participant
may have outstanding from the Plan at any one time, and the maximum and minimum
amounts for such loans, may be further restricted in such manner as the Company
and Plan Administrator determine to be advisable and set forth in the Plan's
Participant Loan Procedures.
(i) The Trustee shall be entitled to exercise all legal and
equitable rights available to it in order to enforce the collection of such
unpaid loan balance. If any portion of a loan is overdue and unpaid, the Plan
shall take all action necessary to collect such loan, including, but not
limited to, the liquidation of any security in which it has an interest under
the provisions of paragraph (i) above.
(j) If, before any loan to the Participant has been repaid in
full, the Participant dies, retires or otherwise terminates his or her
employment with the Company, then the Plan shall accelerate repayment of the
loan and the Plan Administrator shall demand repayment of the total amount of
principal and interest then outstanding within thirty (30) days after the date
of such termination of employment. If such a Participant fails to make payment
in full of the total amount of principal and interest then outstanding by the
last day of the calendar quarter after such amounts have become due and
payable, whether by acceleration or otherwise, the Plan Administrator, in its
discretion, may (i) reduce the vested amount credited to the Participant's
Accounts in order to recover the outstanding loan balance plus all unpaid
interest accrued to date, or (ii) if distribution of the Participant's Accounts
is not then permissible, may reduce the amount credited to the Accounts at such
time as distribution is permissible in order to recover the outstanding loan
balance plus unpaid interest through the date the Participant's Account balance
may be reduced.
(k) The Plan Administrator may require Participants receiving
loans from the Plan under this Section 5.5 to reimburse the Trust Fund for any
administrative fees or expenses the Trust Fund incurs in connection with such
loans, and may require a Participant to pay any portion of such fee to the Plan
before the proceeds of the loan are disbursed to the Participant.
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<PAGE> 25
ARTICLE VI
RETIREMENT BENEFITS
6.1 NORMAL OR EARLY RETIREMENT. When a Participant reaches his or her
Normal or Early Retirement Date and retires from the service of the Company and
all Affiliated Employers, the Participant is entitled to receive the full value
of his or her Accounts, payable in the manner provided in Section 6.5.
6.2 LATE RETIREMENT. A Participant whose employment with the Company
or with an Affiliated Employer continues after his or her Normal Retirement
Date shall not be entitled to receive benefits from this Plan until the earlier
of (a) such time as the Participant actually retires from his or her continued
employment with the Company or with such Affiliated Employer, (b) the end of
the calendar year in which such Participant attains age 70-1/2, or (c) such
time as an in-service withdrawal is permitted under Section 6.13 below.
However, the Participant will have a totally nonforfeitable interest in his or
her Accounts at all times after his or her Normal Retirement Age. A Participant
shall be entitled to participate in the Plan after such Normal Retirement Age,
make Elective Contributions pursuant to Section 3.3, and share in all Company
contributions made after such date as otherwise provided herein. When the
Participant retires from the service of the Company and of all Affiliated
Employers, the Participant is entitled to receive the full value of his or her
Accounts, payable in the manner provided in Section 6.5.
6.3 BENEFITS ON PERMANENT DISABILITY. Upon the Permanent Disability
of a Participant, the full value of the Participant's Accounts shall be paid to
the Participant, or to his or her guardian, in a lump sum or such other manner
as may be provided in Section 6.5.
If the Plan Administrator determines that a disabled Participant
or Former Participant is not legally competent or lacks the capacity to
administer his or her own financial affairs, any distribution to such
Participant or Former Participant may be made, in the Plan Administrator's
discretion, directly to the Participant or to the legally appointed guardian or
custodian of the Participant.
6.4 VESTING ON OTHER TERMINATION OF EMPLOYMENT.
(a) If the employment of a Participant is terminated for reasons
other than retirement, death or Permanent Disability, such person shall be
entitled to receive the full value of his or her Deferral Account and the full
value of his or her Rollover Account, if any.
If the employment of a Participant is terminated on or after
January 1, 1997 for any reason other than retirement, death or Permanent
Disability, the terminated Participant's vested interest in the balances
credited to his or her Matching Contributions Account and Company Contributions
Account shall be based on the Participant's number of Years of Service as
follows:
<TABLE>
<CAPTION>
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
<S> <C>
Less than 1 year -0-
1 but less than 2 years 25%
2 but less than 3 years 50%
3 but less than 4 years 75%
4 years or more 100%
</TABLE>
For any terminated Participant whose employment with the Company terminated
prior to January 1, 1997, the Participant's vested interest in the balances
credited to his or her Company Contributions Account and Matching Contributions
Account shall be based upon the Participant's number of Years of Service, as
follows:
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<PAGE> 26
<TABLE>
<CAPTION>
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
<S> <C>
Less than 1 year -0-
1 but less than 2 years 20%
2 but less than 3 years 30%
4 but less than 5 years 50%
5 but less than 6 years 70%
6 but less than 7 years 90%
7 years or more 100%
</TABLE>
(b) If a distribution is made when a Former Participant is not
fully vested in his or her Company Contributions and Matching Contributions
Accounts, and prior to the fifth of five consecutive One Year Breaks in
Service, a separate accounting shall be maintained for the nonvested portion of
such Former Participant's Company Contributions and Matching Contributions
Accounts. Such accounting shall include the allocation of subsequent gains and
losses other than for the Plan Year in which a forfeiture occurs. If such
Former Participant again becomes a Participant before incurring five
consecutive One Year Breaks in Service, the amount payable from the Company
Contributions and Matching Contributions Accounts (as a result of such separate
accounting) upon the occurrence of a subsequent event permitting a distribution
shall be an amount (X) determined pursuant to the following formula:
X = P [AB+ (R x D)] - (R x D)
where P is the vested percentage at the time of distribution, AB is the account
balance (determined pursuant to the separate accounting) at the time of
distribution, D is the amount of the prior distribution, and R is the ratio of
the account balance at the relevant time to the account balance immediately
after the prior distribution.
(c) As of the last day of the Plan Year in which the fifth of
five consecutive One Year Breaks in Service occurs, or, if earlier, the last
day of the Plan Year in which the Former Participant received a lump sum
distribution of his entire vested account balance, any nonvested amount shall
be forfeited. Amounts forfeited from Matching Contribution Accounts shall be
used to pay the Plan's administrative expenses for the Plan Year, to make such
"qualified nonelective contributions" [within the meaning of Treasury
Regulation section 1.401(k) - 1(g)(7)] to the Accounts of Non-Highly
Compensated Employees [or select groups of Non-Highly Compensated Employees
identified by the Plan Administrator] as the Plan Administrator may determine
to be necessary or advisable to enable the Plan to satisfy the discriminations
tests set forth in Sections 13.2 and 13.4, or to reduce the amount of the
Company's Matching Contributions for the Plan Year. Amounts forfeited from
Company Contributions Accounts, and to the extent the aggregate amount of
forfeitures exceeds the Company's Matching Contribution for the Plan Year,
excess forfeitures from Matching Contributions Accounts, shall be used to pay
Plan administrative expenses, to make qualified nonelective contributions, or
reallocated among the Company Contributions Accounts of Participants sharing in
the Company's contributions for the Plan Year in which the forfeiture occurs,
in the same manner as the Company contributions made for the Plan Year under
Section 3.1.
If a Former Participant has received a distribution which is less
than the value of such person's Company Contributions and Matching
Contributions Accounts and later returns to employment with the Company, such
Former Participant's Company Contributions and Matching Contributions Accounts
and number of Years of Service will be restored to the amount on the date of
distribution if such Former Participant repays to the Plan the full amount of
the distribution previously received before such Former Participant incurs the
fifth of five consecutive One Year Breaks in Service (or, if earlier, the fifth
anniversary of the date of rehire by the Company).
6.5 FORMS OF BENEFIT PAYMENTS.
(a) Basic Benefit Options. Subject to Section 6.5(b) and Section
6.7 below, a Participant or Former Participant entitled to receive a
distribution from the Plan may elect, on such benefit election form as may be
prescribed by the Plan Administrator, to have the vested balances credited to
such
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<PAGE> 27
person's Accounts distributed in one of the following forms, as selected by the
Participant or Former Participant:
(1) a lump sum payment;
(2) a Direct Rollover, as described in Section 6.9 below; or
(3) in installment payments not exceeding one of the following
periods (or a combination thereof):
(i) Over a period not extending beyond the life expectancy
of such Participant or Former Participant; or
(ii) Over a period not extending beyond the joint life and
last survivor expectancy of such Participant or Former
Participant and designated beneficiary.
All such distributions shall be made in accordance with the requirements of
Section 401(a)(9) of the Code and any applicable Treasury Regulations
promulgated thereunder, including Treasury Regulation Sections 1.401(a)(9)-1
and 1.401(a)(9)-2.
(b) Grandfathered Annuity Forms of Benefit. Any Participant or
Former Participant who first became a Participant in this Plan prior to January
1, 1997 may also elect, on such benefit election form as may be prescribed by
the Plan Administrator, to have the vested balances credited to his or her
Accounts applied to purchase a Joint and Survivor Annuity (if he or she is
married at his or her Annuity Starting Date), or subject to the restrictions
set forth in Section 6.7 below, distributed in any of the other optional forms
of benefit permitted by the terms of the Plan as in effect prior to January 1,
1997, as described in prior restatements of the Plan and in Appendix B to this
Plan document, which is hereby incorporated into the Plan by this reference.
If any such Participant or Former Participant who became a
Participant in the Plan prior to January 1, 1997, is married at his or her
Annuity Starting Date, at any time elected to receive benefits from the Plan in
the form of an annuity, and has not waived the Joint and Survivor Annuity in
the manner described in Section 6.7 below before his or her Annuity Starting
Date, then the Trustee shall promptly apply the Participant's Account balance
to purchase a single-premium, annuity contract qualifying as a Joint and
Survivor Annuity from a commercial insurer.
If such a Participant or Former Participant who is not married at
any time elected to receive his or her benefits from the Plan in the form of an
annuity, and does not revoke this election and elect to receive an alternate
form of benefit described in Subsection 6.5(a) before his Annuity Starting
Date, the Trustee shall apply the Participant's Account balance to purchase a
single-premium single-life annuity contract from a commercial insurer or such
other optimal form of annuity benefit listed in Appendix B as the Participant
or Former Participant may select.
(c) Form of Payment - Cash or Stock. Benefit distributions will
normally be paid in the form of cash. If, however, any portion of the
Participant's Accounts is invested in the Kodak Stock Fund pursuant to Section
5.2(i) of the Plan, and the Participant expressly requests that this portion of
his or her Accounts be distributed in the form of shares of Eastman Kodak
Company stock, then the Trustee may distribute such investments to the
Participant in kind in lieu of a cash payment of the value of the affected
portion of the Participant's Accounts.
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<PAGE> 28
6.6 REQUIRED BEGINNING DATE.
(a) Payment of each Participant's benefits must commence no later
than April 1 of the calendar year following the calendar year in which the
Participant or Former Participant retires or attains the age of 70-1/2,
whichever occurs later, provided that, for any Participant who is a 5-percent
owner of the Company [as defined in Section 416(i) of the Code], benefits shall
commence no later than April 1 of the calendar year following the year in which
he or she attains the age of 70 1/2, whether or not he or she has retired. If a
Participant becomes a 5-percent owner after attaining age 70 1/2 but before
retiring, such Participant must begin to receive benefits from the Plan by
April 1 of the calendar year following the year in which he or she becomes a
5-percent owner.
(b) Required Minimum Installments After Age 70 1/2. If the
balance credited to a Former Participant's Accounts has not been completely
distributed by the end of the calendar year in which he or she attains age 70
1/2, or in the case of an active Participant who is not a 5 percent owner, the
calendar year in which he or she retires, if later (this calendar year to be
referred to as the Participant's "70 1/2 Year"), the Participant or Former
Participant shall be required to receive a benefit distribution of not less
than the amount required under the following paragraphs (b)(1) and (2) (a
"Minimum Required Distribution") by the first day of April of the following
calendar year, and must receive a Minimum Required Distribution for each
calendar year subsequent to such year in which he or she has an undistributed
account balance under the Plan (a "Distribution Year"), no later than December
31 of such year.
(1) The amount of such person's Minimum Required Distribution
for each Distribution Year, beginning with the 70 1/2 Year, shall be
the lesser of (i) the remaining balance in his or her Accounts or (ii)
an amount equal to the quotient obtained by dividing the balance
credited to his or her Accounts at the last Valuation Date in the
preceding calendar year, by the person's life expectancy of or the
joint life and last survivor expectancy of the person and his or her
designated Beneficiary. If the person has designated more than one
individual as his or her Beneficiary, the life expectancy of the
oldest such Beneficiary shall be used in this calculation.
(2) Notwithstanding the foregoing paragraph (1), if the
Participant or Former Participant has designated a Beneficiary other
than his or her spouse, the Minimum Required Distribution for each
Distribution Year, beginning with his or her 70 1/2 Year, shall be the
greater of (i) the amount determined under the preceding paragraph
(e)(1), or (ii) the amount obtained by dividing the balance credited
to the person's Accounts, determined as in the preceding paragraph
(b)(1), by the applicable divisor prescribed by the table set forth in
Q&A-4 of Treasury Regulation Section 1.401(a)(9)-2.
For purposes of this Section 6.6, life expectancies and joint and
last survivor life expectancies shall be calculated by use of the return
multiples specified in the relevant Tables in Treasury Regulation Section
1.72-9, and life expectancies of Participants, Former Participants and their
surviving spouses may be recalculated annually, if they do not elect otherwise.
The life expectancy of any Beneficiary other than a surviving spouse shall be
calculated at the time payment first commences without further recalculation.
6.7 WAIVER OF JOINT AND SURVIVOR ANNUITY. If the Participant or Former
Participant is married at his or her Annuity Starting Date, is eligible for any
of the optional forms of benefits referenced in Section 6.5(b), and has at any
time elected to receive his or her benefits from the Plan in the form of an
annuity, the Participant (or Former Participant) shall have a period of at
least 90 days before such Annuity Starting Date during which to elect to waive
the Joint and Survivor Annuity, and to instead receive benefits in the form of
one of the other forms available under the Plan. This waiver of the Joint and
Survivor Annuity must be signed by the Participant or Former Participant.
However, the waiver of the Joint and Survivor Annuity shall not be effective
unless the spouse to whom the Participant or Former Participant is married at
his or her Annuity Starting Date consents in writing to the waiver and to the
election of an alternate form of payment, the spouse's consent acknowledges the
effect of the waiver and election, and such consent is witnessed by a
representative of the Plan or by a notary public. However, the election to
waive the Joint and Survivor Annuity
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shall be effective in the absence of a consent if it is established to the
satisfaction of the Plan Administrator that a spousal consent cannot be
obtained because there is no spouse, because the spouse cannot be located, or
because of such other circumstances as are prescribed by the Secretary of
Treasury in regulations.
A revocation of a prior waiver may be made by a Participant
without the consent of the spouse at any time before the Participant's Annuity
Starting Date. (The number of revocations prior to the Participant's Annuity
Starting Date shall not be limited.)
Any consent by a spouse to the payment of benefits in a form
other than a Joint and Survivor Annuity shall be effective only with respect to
such spouse and may not be revoked by such spouse without the consent of the
Participant or Former Participant.
To the extent provided in a Qualified Domestic Relations Order,
for purposes of this Section 6.7 the former spouse of a Participant or Former
Participant will be treated as such person's spouse.
6.8 INSTALLMENT PAYMENTS. If a distribution will be paid in
installments (other than in the form of an annuity) the Trustee shall invest
the amount of the distribution in one of the Investment Funds designed for the
production of income, rather than growth (and which are otherwise a proper
investment), subject, however, to the right to self-direct investments pursuant
to Article V. All interest earned on those investments shall be added to the
amount to be distributed, and all disbursements shall be charged against that
amount. The amount to be distributed may be held in cash for a limited period
between investments, or as a reserve to meet installment distributions. If a
Former Participant to whom periodic installments are being paid, or are due to
be paid, dies before receiving the distribution, the remainder shall be paid in
cash at the time elected by the Former Participant's Beneficiary.
6.9 DIRECT ROLLOVERS. Notwithstanding any provision of this Article
VI to the contrary, effective on and after January 1, 1993, any Participant or
Former Participant who is entitled to receive an Eligible Rollover Distribution
(as defined below) from the Plan, may elect, at that time and in the manner
prescribed by the Plan Administrator, to have such Eligible Rollover
Distribution (or a portion of such Eligible Rollover Distribution consisting of
$500 or more) paid directly, in a direct rollover, to the trustee or custodian
of a single individual retirement account described in Section 408(a) of the
Code of a single qualified trust described in Section 401(a) of the Code
specified by the Participant or Former Participant, provided that the trustee
or custodian of such account or qualified trust is willing to accept such
amount of behalf of the Participant or Former Participant.
For purposes of this Article VI, Eligible Rollover Distribution
means any distribution of all or any portion of the balance credited to the
Accounts of a Participant or Former Participant under this Plan, except that an
Eligible Rollover Distribution shall not include: (i) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made over the life (or life expectancy) of the Participant or
Former Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's designated beneficiary, or over a specified
period of ten years or more; (ii) any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and (iii) the
portion of any distribution that is not includable in the Participant's income.
6.10 LATEST DATE FOR COMMENCEMENT OF BENEFITS. Unless a Participant
(or Former Participant) elects otherwise, distribution of his or her benefits
will begin no later than the 60th day after the close of the Plan Year in which
occurs the latest of:
(a) the date the Participant attains Normal Retirement Age;
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
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(c) the date the Participant terminates service with the Company
and all Affiliated Employers.
An election under this Section 6.10 must be made by a Participant
by submitting to the Plan Administrator a written statement signed by the
Participant which describes the benefit and the date on which the payment of
such benefit shall commence. An election shall not be effective if the election
would violate the payment restrictions contained in Sections 6.6 and 6.11.
If the amount of a Participant's or Former Participant's benefit
payment required to be made on a date determined under this Section 6.10 cannot
be reasonably ascertained by the Plan Administrator by such date, or if it is
not possible to make such benefit payment on such date because the Plan
Administrator has been unable to locate the Participant or Former Participant
after making reasonable efforts to do so, the distribution, together with the
credited investment earnings, may instead be made no later than 60 days after
the earliest date on which the Plan Administrator can ascertain the amount of
such benefit or can locate such Participant or Former Participant.
6.11 EARLIEST DATE PAYMENT MAY COMMENCE. Notwithstanding any provision
of this Plan to the contrary, if the value of a Participant's or Former
Participant's vested interest in his or her Accounts exceeds (or has at any
prior time exceeded) $3,500 or, on or after January 1, 1998, $5,000,
distribution of such vested interest shall not be made prior to the time the
Participant or Former Participant reaches age sixty-two (62) unless (i) the
Participant or Former Participant and his or her spouse, if any, have consented
in writing to such distribution, or (ii) the distribution is by reason of the
Participant's death.
Distributions of amounts which are attributable to the Participant's
Elective Contributions under Section 3.3, or to contributions made pursuant to
Sections 3.1 or 3.2 which have been designated as qualified non-elective
contributions and/or as qualified matching contributions, respectively, shall
not be made earlier than upon one of the following events: retirement, death,
disability, separation from service, financial hardship, or attainment of age
59-1/2.
6.12 NOTICE WITH RESPECT TO JOINT AND SURVIVOR ANNUITY OPTION. If a
Participant who first became a Participant in the Plan prior to January 1,
1997, has elected to receive his or her benefits from the Plan in the form of
an annuity, during the period of ninety (90) days prior to the Participant's
Annuity Starting Date, and in any event within a reasonable period before the
payment of benefits to the Participant begins, the Plan Administrator shall
deliver to such Participant (either by first class mail or personally) a
written explanation of (1) the terms and conditions of the Joint and Survivor
Annuity and/or single life annuity, (2) such person's right to make, and the
effect of, an election to waive the Joint and Survivor Annuity and single life
annuity, (3) the right of the spouse of the Participant to waive the Joint and
Survivor Annuity, and (4) the right to make, and the effect of, a revocation of
a previous election to waive the Joint and Survivor Annuity. The written
explanation shall also inform the Participant of the availability of the
following information, and of the fact that it may be obtained from the Plan
Administrator only upon written request:
(a) A written explanation in nontechnical language of the terms
and conditions of the Joint and Survivor Annuity and Single Life
Annuity; and
(b) The financial effect upon the benefit of an election not to
receive benefits in the form of a Joint and Survivor Annuity.
However, the Plan Administrator need not comply with more than one request made
by a particular Participant or Former Participant.
The foregoing shall not apply if the amount in such person's
Accounts has not at any time exceeded $3,500, or at any time on or after
January 1, 1998, $5,000.
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Notwithstanding the foregoing, a distribution from the Plan to
the Participant may commence less than 30 days after the notice described in
the preceding paragraph is given, provided that:
(1) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after the
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects an immediate distribution.
6.13 IN-SERVICE WITHDRAWALS. (a) After Age 59 1/2. Subject to the
restrictions in Sections 6.7 and 6.11, a Participant who has attained age 59
1/2, but is still employed by the Company may request a distribution of all or
any part of the vested balances credited to his or her Deferral Account,
Rollover Account, if any, Matching Contributions Account, and/or Company
Contributions Account by completing such application for an in-service
withdrawal as may be prescribed by the Plan Administrator.
(b) Financial Hardship. A Participant who incurs a financial
hardship may request a distribution from his or her Deferral Account and
Rollover Account, if any. The amount of the distribution from the Deferral
Account and Rollover Account, if any, pursuant to this Section 6.13(b) shall
not exceed the amount required to meet the immediate and heavy financial need
of the Participant and shall not be made if the amount needed to meet such
financial need is reasonably available from other financial resources of the
Participant. (For purposes of this Section 6.13, the amount needed to meet the
financial need shall be deemed to include the amount of any federal or state
income tax liability the Participant will incur as a result of the hardship
distribution). In addition, the amount of any financial hardship distribution
shall be limited to the amount credited to the Participant's Deferral Account
and Rollover Account, if any, as of December 31, 1988 plus the total of the
Elective Contributions made by the Participant after such date.
For purposes of this Section 6.13(b), the following shall be
deemed to constitute immediate and heavy financial needs of the Participant:
(1) Expenses for medical care described in Section 213(d) of the
Code incurred by the Participant, or his or her spouse or dependents
(or medical expenses not yet incurred but necessary for these persons
to obtain such medical care) which are not covered by any available
insurance policy or employee benefit plan;
(2) Costs directly related to the purchase of a principal
residence to be occupied by the Participant, excluding regular
mortgage payments;
(3) Payment of tuition (and related educational fees) for up to
twelve months of post-secondary education for the Participant or his
or her spouse, children or dependents; and
(4) Payments necessary to prevent the foreclosure of a mortgage
on the Participant's principal residence or the eviction of the
Participant from his or her principal residence.
In determining that a requested distribution is necessary to
satisfy the Participant's financial need, the Plan Administrator shall be
entitled to rely, without further investigation, upon the Participant's
application if:
(1) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans available under this
plan and under all other plans maintained by the Employer;
(2) The Participant's Elective Deferrals (and employee
contributions) will be suspended for twelve months after the date of
receipt of the hardship distribution;
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(3) The distribution is not in excess of the amount of the
Participant's immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution); and
(4) The Participant may not make Elective Deferrals for the
Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under
section 402(g) of the Code for such taxable year less the amount of
such Participant's Elective Deferrals for the taxable year of the
hardship distribution.
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ARTICLE VII
DEATH BENEFITS
7.1 DESIGNATION OF BENEFICIARY. When an Employee becomes a
Participant, he or she shall designate one or more primary beneficiaries and
one or more contingent beneficiaries on such beneficiary designation form as
may be prescribed by the Plan Administrator. If a Participant or Former
Participant has designated as a primary beneficiary an entity or person other
than (or in addition to) the person to whom he or she is married at the date of
his or her death, such designation shall not be effective unless the spouse to
whom the Participant or Former Participant is married at the date of death has
consented in writing to such designation, such spouse's consent acknowledges
the effect of such designation, the consent states that any future change in
the designated beneficiary may be made only with the spouse's consent, and such
consent is witnessed by a representative of the Plan or by a notary public. The
consent of such spouse shall be irrevocable by such spouse in connection with
the beneficiary designation with respect to which such consent is given. (To
the extent the designation of a non-spouse beneficiary is not effective, the
primary beneficiary shall be the spouse to whom the Participant or Former
Participant is married at the date of the Participant's or Former Participant's
death.)
If no valid beneficiary designation form has been filed with the
Plan Administrator or the Trustee at the date of the death of the Participant
or Former Participant (or if a deceased Participant or Former Participant is
not survived by either the designated primary beneficiary or a contingent
beneficiary), the death benefit shall be paid to the surviving spouse of the
Participant or Former Participant, or, if none, to either:
(a) the issue of the Participant or Former Participant, per
stirpes, or
(b) the estate of the Participant or Former Participant for
distribution to such persons then living who would take the personal
property of the Participant or Former Participant under his or her
will and the statutes of descent and distribution of the state of
legal domicile of the Participant or Former Participant (at the time
of such person's death).
To the extent provided in a Qualified Domestic Relations Order,
the former spouse of a Participant or Former Participant shall be treated as
such person's spouse or Beneficiary.
7.2 PAYMENTS TO BENEFICIARIES. Subject to Section 7.4, if a
Participant (or Former Participant) dies prior to his or her Annuity Starting
Date, the balance credited to the Participant's or Former Participant's
Accounts shall be distributed to (or for the benefit of) the Participant's
designated Beneficiary in a lump sum.
Notwithstanding any provisions of this Article VII to the
contrary, any beneficiary who is entitled to receive an Eligible Rollover
Distribution (as defined in Section 6.9 above) from the Plan as a surviving
spouse of a Participant or Former Participant may elect, at any time and in the
manner prescribed by the Plan Administrator, to have such Eligible Rollover
Distribution (or a portion of such Eligible Rollover Distribution consisting of
$500 or more) paid directly, in a direct rollover, to the trustee or custodian
of a single individual retirement account described in Section 408(a) of the
Code specified by the beneficiary provided that the trustee or custodian of
such account is willing to accept such amount on behalf of the beneficiary.
7.3 REQUIRED MINIMUM DISTRIBUTIONS. Payment of death benefits under
this Plan must be made no later than December 31 of the calendar year which
includes the fifth anniversary of the date of the Participant's or Former
Participant's death, unless the Beneficiary is the spouse to whom the
Participant or Former Participant was married at the date of death, in which
case the payment shall be made no later than December 31 of the year in which
the Participant or Former Participant would have attained the age of 70 1/2.
(If the spouse dies before the lump sum payment has been made, the payment
shall then be made as if the spouse were the Participant or Former
Participant.)
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7.4 SPOUSAL ANNUITIES. However, the foregoing provisions of Section
7.2 shall be inapplicable, and the following paragraph shall apply, if the
following conditions apply:
(a) The Participant was married at the date of his or her death;
(b) The Participant became a Participant in this Plan prior to
January 1, 1997 and was eligible for any of the optional forms of
annuity benefit referenced in Section 6.5(b);
(c) The Participant had previously elected to receive his
benefits in the form of a Joint and Survivor Annuity or any other form
of annuity benefit;
(d) The Participant's surviving spouse had not consented to the
immediate distribution of the value of the Participant's Accounts to
such spouse in another form of payment or to a person (or entity)
other than the spouse designated as the Participant's Beneficiary.
(Such consent shall be in writing, witnessed by a representative of
the Plan or by a notary public and shall acknowledge the effect of
such consent). The Participant and spouse may waive the spousal
annuity on or after the first day of the Plan Year in which the
Participant attains age 35. The waiver and spousal consent shall
identify in writing the specific nonspouse beneficiary (including any
class of beneficiaries or contingent beneficiaries), which designated
beneficiary may not be modified (except back to the spousal annuity)
without further spousal consent. If a Participant separates from his
or her employment before the Plan Year in which he or she attains age
35, this waiver may be made on or after the date of separation. A
Participant who has elected to waive the qualified preretirement
survivor annuity with spousal consent may revoke this waiver at any
time, and any number of times, during the period between the first day
of the Plan Year in which he or she attains age 35 and the date of
death; and
(e) The balance credited to the Participant's Accounts exceeds
$3,500, or, effective on and after January 1, 1998, $5,000.
If the foregoing conditions apply, the Plan Administrator shall
use the amount credited to such person's Accounts to purchase an annuity
contract from an insurance company licensed to do business in the State of
Florida. Such annuity contract shall provide monthly payments for life to the
spouse to whom the Participant or Former Participant was married at the date of
the Participant's or Former Participant's death. The amount of such monthly
payments shall be the amount which can be provided to the spouse by the balance
credited to the decedent's Accounts. Monthly payments to the surviving spouse
shall commence as of the date requested by such spouse (subject to the
remaining provisions of this Article VII, and to any administrative delays
encountered in obtaining the annuity contract) and shall be paid monthly
thereafter, ceasing with the last day of the month in which the death of such
spouse occurs.
7.5 DISTRIBUTION TO MINORS. Distribution to minors or persons under
legal disability may be made, as directed by the Plan Administrator (1)
directly to that person, (2) to the guardian or custodian of that person, or
(3) for the education and maintenance of that person. Except as to (3), the
Trustee shall not be required to see to the application of any distributions
made to any of those persons.
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ARTICLE VIII
ADMINISTRATION
8.1 DESIGNATION. The Board of Directors shall appoint a Committee
composed of one or more persons to handle the administrative duties associated
with the operation of the Plan. Each member of any Committee appointed for such
purpose shall serve at the pleasure of the Board of Directors and may be
removed at any time by the Board of Directors, with or without cause. Upon the
death, resignation, or removal of a member of such Committee, the Board of
Directors shall name a successor. The Committee may consist of one person.
8.2 NOTICE TO TRUSTEE. The Company shall notify the Trustee in writing
of the name of the Plan Administrator and/or the person(s) comprising the
Committee. Any changes in the composition of the Committee shall be
communicated to the Trustee.
8.3 POWERS AND DUTIES. The Plan Administrator shall have the power and
duty to do those things necessary or convenient to carry out the intent and
purpose of the Plan, as long as the Plan Administrator's actions are not
inconsistent with any of the provisions of this document or the Trust
Agreement. For example, the Plan Administrator shall have power to:
(a) Adopt rules and regulations.
(b) Construe this document, the construction of which in good
faith shall be final and binding.
(c) Correct any defect or supply any omission or reconcile any
inconsistency in this document in such manner and to such extent as
the Plan Administrator believes is necessary.
(d) Determine all questions that shall arise under this document,
including directions to and questions submitted by the Trustee on all
matters necessary for it to discharge its powers and duties.
(e) Authorize all disbursements by the Trustee from the Trust
Fund. (However, no person who receives full-time pay from the Company
or any Participating Employer shall receive compensation or fees from
the Plan, excepting reimbursement of expenses properly and actually
incurred.)
(f) Purchase fiduciary responsibility insurance covering the Plan
Administrator. The insurance premiums may be paid from Company
contributions or, at the option of the Company, by the Company.
However, the Trust Fund shall not bear the cost of a nonrecourse
endorsement.
(g) Appoint an investment manager [as defined in Section 3(38) of
ERISA] to direct the investment of some or all of the assets of the
Trust Fund, subject to Article V.
The Plan Administrator shall have sole and exclusive
responsibility for establishing and carrying out a funding policy for the Plan
based on the provisions of ERISA and all regulations issued thereunder. The
Plan Administrator shall have sole discretion to allocate and to delegate, with
written notice to the Company and the Trustee, any or all of his fiduciary
responsibilities to persons designated by the Plan Administrator. To the extent
those responsibilities are allocated or delegated, the Plan Administrator shall
be relieved of liability for acts or omissions of the person or persons to whom
those responsibilities are allocated or delegated to the fullest extent
permitted by law.
8.4 FINALITY OF ACTION. The Plan Administrator shall have the
discretion to interpret the provisions of the Plan, and, subject to Section
10.6, the acts and determinations of the Plan Administrator
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shall be final and conclusive. The Company, Employees, Participants, Former
Participants, Beneficiaries, Trustee, and all others having any interest under
the Plan shall be bound by the Plan Administrator's acts and determinations.
8.5 NONDISCRIMINATORY ACTION. The Plan Administrator shall not take
any action or direct the Trustee to take any action which would be
discriminatory among employees in substantially similar situations or under
substantially similar sets of facts.
8.6 INFORMATION FURNISHED TO PLAN ADMINISTRATOR. The Company shall
furnish the Plan Administrator in writing with any information it may request
in the exercise of its powers and duties in the administration of the Plan. The
Plan Administrator shall be entitled to rely on the information without any
investigation, although the Plan Administrator may correct any errors
discovered in the information.
8.7 INFORMATION TO BE FURNISHED TO TRUSTEE. The Plan Administrator
shall provide the Trustee with any information the Trustee may request to carry
out its duties with the provisions of this document. The Trustee shall be
entitled to rely on the accuracy of any information provided by the Plan
Administrator without any investigation.
8.8 EXAMINATION OF RECORDS. When requested by a Participant, a Former
Participant or Beneficiary, the Plan Administrator shall make available to the
person a copy of the Plan and any records which pertain to any benefits of that
person.
8.9 BONDING. The Plan Administrator shall be bonded as required by
statute or regulation. The cost of such bond shall be paid by the Trust Fund
only if not paid by the Company.
8.10 PROHIBITED TRANSACTIONS. The Plan Administrator shall not cause
the Plan or the Trust Fund to engage in a prohibited transaction, as defined in
Section 406 of ERISA, unless a statutory exemption exists, or unless the Plan
Administrator has obtained an administrative exemption.
8.11 PROCEDURES FOR DOMESTIC RELATIONS ORDER. If the Plan receives a
Domestic Relations Order, the Plan Administrator shall promptly notify the
Participant (or Former Participant) and any alternate payee [as defined in
Section 414(p) of the Code] of the receipt of such order and of the Plan's
procedures for determining whether the Domestic Relations Order is a Qualified
Domestic Relations Order. Within a reasonable period of time (as determined by
the Secretary of the Treasury or the Secretary of Labor in regulations or
announcements) after the receipt of the Domestic Relations Order, the Plan
Administrator shall determine whether the order is a Qualified Domestic
Relations Order and shall notify the Participant (or Former Participant) and
each alternate payee of such determination. The Plan Administrator may request
the assistance of counsel, including the Company's attorneys or submit the
determination of the qualified status of a Domestic Relations Order be made by
a court of competent jurisdiction.
During any period in which the issue of whether a Domestic
Relations Order is a Qualified Domestic Relations Order is being determined (by
the Plan Administrator, by a court of competent jurisdiction or otherwise), the
Plan Administrator shall segregate in a separate account within the Plan or in
an escrow account the amounts which would have been payable to the alternate
payee during such period if the Domestic Relations Order had been determined to
be a Qualified Domestic Relations Order. If within 18 months the Domestic
Relations Order (or modification thereof) is determined to be a Qualified
Domestic Relations Order, the Plan Administrator shall pay the segregated
amounts (plus any earnings thereon) to the person or persons entitled thereto.
If within 18 months it is determined that the Domestic Relations Order is not a
Qualified Domestic Relations Order, or if the issue as to whether the Domestic
Relations Order is a Qualified Domestic Relations Order has not been resolved,
the Plan Administrator shall pay the segregated amounts (plus any earnings
thereon) to the person or persons who would have been entitled to such amounts
if there had been no Domestic Relations Order. Any determination that a
Domestic Relations Order is a Qualified Domestic Relations Order made after the
close of the 18-month period shall be applied prospectively only.
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To the extent the Plan Administrator acts in accordance with the
provisions of this Section in treating a Domestic Relations Order as being (or
not being) a Qualified Domestic Relations Order, the Plan's obligation to the
Participant (or Former Participant) and to each alternate payee shall be
discharged to the extent of any payment made pursuant to such order.
Payments to an alternative payee required by a Qualified Domestic
Relations Order may be made at such times or times as are specified by the
terms of such Qualified Domestic Relations Order, and immediate lump sum
payments at a time prior to the Participant's earliest retirement date are
authorized to the extent expressly required by terms of the Qualified Domestic
Relations Order.
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ARTICLE IX
AMENDMENT AND TERMINATION
9.1 AMENDMENT. No part of the corpus or income of the Fund shall be
used (a) for purposes other than for the exclusive benefit of Participants,
Former Participants and Beneficiaries, or (b) to deprive any one of them of his
or her interest in the Trust Fund, and (c) for defraying the proper expenses of
administration. There shall be no reversion of funds to the Company except as
expressly provided in Section 10.9 below. (The application of forfeitures or
excess contributions to reduce the Company's Matching Contributions shall not
be deemed a reversion.) Otherwise, the Plan may be amended at any time by the
Board of Directors. The Board of Directors may give any amendment retroactive
effect, although no amendment shall decrease any account balance or eliminate
an optional form of benefit distribution.
If the Plan's vesting schedule is amended or if the Plan is
amended in any way that directly or indirectly affects the computation of the
nonforfeitable percentage, each affected person with at least three Years of
Service may elect, within a reasonable period after the adoption of the
amendment or change, to have the nonforfeitable percentage computed under the
Plan without regard to such amendment or change.
The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and shall end on
the latest of the following:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after written notice of the amendment is issued by
the Administrator.
An amendment to the Plan shall be evidenced by an instrument in
writing signed by authorized officers of the Company, and shall be delivered to
the Trustee.
9.2 TERMINATION. The Board of Directors of the Company may terminate
the Plan at any time. No further contributions shall be made after the
effective date of the Plan's termination. The Trustee shall continue to act
until the Trust Fund has been distributed according to the provisions of this
document. The trust shall continue until the Trust Fund has been distributed in
accordance with the terms and provisions of this document.
9.3 RIGHTS OF PARTICIPANTS. When a termination or partial termination
of the Plan occurs, or in the event of a complete discontinuance of
contributions, the Company Contributions and Matching Contributions Accounts of
each affected Participant shall become fully nonforfeitable.
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 GOVERNING LAW. This document shall be administered, construed and
enforced in accordance with ERISA and, to the extent that ERISA has not
preempted the laws of the State of Florida, in accordance with the laws of the
State of Florida.
10.2 NO SPECIFIC INTEREST. Nothing in this document shall be construed
to give any Participant, Former Participant or Beneficiary any interest in the
Trust Fund, other than the right to receive payment in accordance with the
provisions of the Plan.
10.3 ACTION BY BOARD OF DIRECTORS. Any action by the Board of
Directors in connection with the Plan shall be evidenced by a resolution of the
Board. If action in connection with the administration of the Plan must be
taken by the Company or by the Plan Administrator, that action may be taken by
persons designated by the Plan Administrator. The Trustee shall be fully
protected by the Company in relying on instructions from the Plan Administrator
or any other person designated by the Board of Directors.
10.4 MERGER OR TRANSFER OF ASSETS. In the case of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan,
each Participant and Former Participant shall receive a benefit immediately
after the merger, consolidation or transfer which is at least equal to the
benefit he or she would have been entitled to receive immediately before the
merger, consolidation or transfer (if the Plan then terminated).
10.5 CLAIMS PROCEDURE. If any Participant, Former Participant or
Beneficiary ("claimant") desires to present a claim for benefits, that person
may submit a detailed, written claim to any officer of the Company ("claim
recipient"). The claim recipient shall refer the claim to the Plan
Administrator within seven days, and the Plan Administrator shall act on the
claim and respond in writing to the claimant within 90 days after receiving the
claim. The written response shall be mailed by first class mail to the
claimant's last known address. If the amount claimed under the Plan is denied,
the written notification to the claimant shall state, in a manner calculated to
be understood by the claimant, the specific reasons for the denial, the
specific reference to Plan provisions on which the denial is based, a
description of any additional material or information necessary for the
claimant to perfect the claim, an explanation of why such material or
information is necessary, and an explanation of the Plan's appeal procedure.
A claimant may appeal the denial of the claim to the
Administrator within 90 days after receipt by the claimant of written
notification of denial of a claim. The Plan Administrator shall make its
decision on the appeal not later than 60 days after the Plan Administrator
receives the appeal, unless special circumstances (such as the need to hold a
hearing) require an extension of time. In that case, a decision shall be made
not later than 120 days after the Plan Administrator receives the appeal. The
Plan Administrator shall notify the claimant of its decision in writing.
10.6 APPEALS PROCEDURE. A claimant, his or her duly authorized
representative, or either of them, may appeal a denied claim by requesting the
Plan Administrator in writing to review its decision. The written request shall
be mailed first class mail to the Plan Administrator at the address of the
Company. The claimant, a duly authorized representative, or both, may request
and shall be permitted to review pertinent documents and may submit issues and
comments in writing to the Plan Administrator.
10.7 PARTICIPANT'S RIGHTS. Each Participant shall have only the
rights, privileges and benefits which are provided under this document. This
Plan shall not (1) create any contract of employment with any Participant, (2)
grant any Participant the right to continued employment with the Company, or
(3) limit the right of the Company, any Affiliated Employer or of both to
terminate a Participant's employment.
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10.8 SHORT PLAN YEAR. If the Plan Year is changed, the number of Hours
of Service described in this document shall be prorated for the short plan year
which results. The proration shall be based on a fraction, the numerator of
which is the number of months in the short plan year, and the denominator of
which is 12. This fraction shall than be multiplied by the appropriate number
of Hours of Service applicable for a 12-month Plan Year to determine the number
of Hours of Service applicable for the short plan year.
10.9 NO REVERSIONS. The corpus or income of the Trust Fund shall in no
event revert to the Company. Notwithstanding the foregoing, any contribution
made to the Plan by the Company may be returned to the Company if (1) the
contribution was made by the Company by reason of a bona fide mistake of fact
and is returned to the Company within one year of the date of contribution, or
(2) the contribution was conditioned on its deductibility under Section 404 of
the Code and the Company's deduction for the contribution is disallowed, and
the contribution (to the extent disallowed) is be returned to the Company
within one year of the disallowance of the deduction.
10.10 INALIENABILITY OF BENEFITS. No benefit or interest available
from the Plan will be subject to assignment or alienation, either voluntary or
involuntary. However, this provision does not apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a Participant
or Former Participant pursuant to a Qualified Domestic Relations Order, or to
any Domestic Relations Order entered before January 1, 1985.
10.11 CONTINUATION OF PLAN BY SUCCESSOR EMPLOYER. If the Company is
reorganized by way of merger or consolidation, and another corporation succeeds
to all or substantially all of the business, the successor corporation shall be
substituted for the Company under this document by adopting the Plan and
becoming a party to the trust agreement. If the successor corporation has
elected not to become a party to the Plan within 90 days following the
effective date of reorganization, or if the Company adopts a plan of complete
liquidation other than in connection with a reorganization, the Plan shall be
terminated with respect to Employees of the Company as of the close of business
on the 90th day following the effective date of the reorganization, or as of
the close of business on the date of adoption of the plan of complete
liquidation, as the case may be.
10.12 USERRA REQUIREMENTS FOR REEMPLOYED VETERANS. This Plan shall
comply with the requirements of the Uniformed Services Employment and
Reemployment Rights Act (USERRA) and Section 414(u) of the Code, including the
following:
(a) An Employee reemployed under USERRA shall be treated as not
having incurred a One-Year Break in Service with the Company by reason
of such Employee's Qualified Military Service.
(b) Each period of Qualified Military Service served by an
Employee is, upon reemployment, deemed to constitute service with the
Company for purposes of vesting and the accrual of benefits under the
Plan.
(c) An Employee reemployed under USERRA is entitled to accrued
benefits that are contingent on the making of, or derived from,
Elective Contributions during a period of Qualified Military Service
only to the extent the Employee makes payment to the Plan with respect
to such Elective Contributions; provided, however, that no such
payment may exceed the amount the Employee would have been permitted
or required to contribute during the period had the Employee remained
continuously employed by the Company throughout the period of
Qualified Military Service. Any payment to the Plan under this
Subsection (c) shall be made during the period beginning with the date
of reemployment and whose duration is 3 times the period of the
Qualified Military Service (but not greater than 5 years), but shall
be deemed to have been made to the Plan during a Plan Year included in
the period of the Employee's Qualified Military Service.
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ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS. With the consent of the Company, any
Affiliated Employer may adopt this Plan and all the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent of such Participating Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.
(a) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
Participating Employers. However, the assets of the Plan shall, on an
ongoing basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Company or
Participating Employer who contributed such assets.
(c) Any expenses of the Trust which are to be paid by the Company
or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total Account balances
standing to the credit of all Participants employed by such Employer
bears to the total Account balances standing to the credit of all
Participants.
11.3 DESIGNATION OF AGENT. With respect to all of its relations with
the Trustee and Plan Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Company as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Company" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS. In the event that an Employee may be
transferred between Participating Employers, the Employee involved shall carry
with him his accumulated Years of Service. No such transfer shall be considered
a termination of employment hereunder, and the Participating Employer to which
the Employee is transferred shall thereupon assume all obligation under this
Plan with respect to such Employee.
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION. Any contribution subject
to allocation during each Plan Year shall be allocated among all Participants
of all Participating Employers in accordance with the provisions of this Plan.
On the basis of the information furnished by the Plan Administrator, the
Trustee shall keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of the
Employees of each Participating Employer.
11.6 DISCONTINUANCE OF PARTICIPATION. Any Participating Employer shall
be permitted to discontinue or revoke its participation in the Plan. At the
time of any such discontinuance or revocation, satisfactory evidence thereto
and of any applicable conditions imposed shall be delivered to the Plan
Administrator or Trustee. The Trustee shall thereafter transfer, deliver and
assign Trust Fund assets allocable to the Participants of such Participating
Employer to such new trustee as shall have been designated by such
Participating Employer, in the event that it has established a separate pension
plan for its Employees provided. However, that no such transfer shall be made
if the result is the elimination or reduction of any "Section 411(d)(6)
protected benefits." If no successor Trustee is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer. In no such
event shall any part of the corpus or income of the Trust as it relates to such
Participating Employer be used for or diverted for purposes other than for the
exclusive benefit of the Employees of such Participating Employer.
11.7 PLAN ADMINISTRATOR'S AUTHORITY. The Plan Administrator shall have
authority to made any and all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the purpose of this
Article XI.
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ARTICLE XII
TOP HEAVY PROVISIONS
12.1 DETERMINATION OF TOP HEAVY STATUS. The Plan will be considered to
be "top heavy" for a Plan Year if the sum of (i) the cumulative present value
of the Accrued Benefits of Key Employees (excluding former Key Employees) in
all defined benefit plans comprising the Aggregation Group, and (ii) the
aggregate of the Account Balances of Key Employees (excluding Former Key
Employees) in all defined contribution plans comprising the Aggregation Group,
determined as of the Determination Date for the Plan Year, exceeds 60 percent
of such sums for all Employees. Notwithstanding the foregoing, if a Permissive
Aggregation Group is top heavy, the provisions of Section 12.2 shall apply only
to the qualified plans comprising the Required Aggregation Group.
The Account Balances and Accrued Benefits of a Former Participant
who has not performed any services for the Employer during the five-year period
ending on the Determination Date will be disregarded. However, should such
person later become a Participant, the Account Balance and Accrued Benefit
shall be recognized for purposes of determining the Plan's top-heavy status
unless the prior sentence applies.
12.2 CONSEQUENCES OF TOP HEAVY STATUS.
(a) Benefits. If the Plan is top heavy for any Plan Year pursuant
to Section 12.1, the minimum allocation for each Participant shall be equal to
at least 3 percent of such Participant's Annual Compensation during the Plan
Year. However, if during such Plan Year the highest amount allocated to the
accounts of any Key Employee (other than Rollover Contributions allocated
pursuant to Section 3.4) is less than 3 percent of such person's Annual
Compensation, the allocation to the account of a Participant who is not a Key
Employee shall be the same percentage as that allocated to the accounts of the
Key Employee whose allocation for the Plan Year, stated as a percentage of
Annual Compensation, was the highest, including any Elective Contributions made
by Key Employees in determining the contributions made on behalf of Key
Employees for this purpose.
The foregoing allocation requirements shall apply only to a
Participant who
(1) is a Participant in the Plan during the Plan Year it is top
heavy,
(2) has not separated from service by the last day of the Plan
Year,
(3) is not a Key Employee, and
(4) participates only in this defined contribution plan.
No such allocation shall be required under this Plan for any
Participant who participates in another defined contribution plan subject to
Code Section 412 included with this Plan in an Aggregation Group and for whom a
contribution of at least three percent (3%) is made under such other defined
contribution plan.
Non-key Employees who have become Participants but who have
subsequently failed to complete at least 1,000 Hours of Service for a Plan Year
must receive the defined contribution minimum. A Non-key Employee may not fail
to receive a defined contribution minimum because either (1) the Employee is
excluded from participation (or accrues no benefit) merely because the
Employee's compensation is less than a stated amount, or (2) the Employee is
excluded from participation (or accrues no benefit) merely because of a failure
to make mandatory employee contributions or, in the case of a cash or deferred
arrangement, Elective Contributions.
12.3 DEFINITIONS. The following definitions shall apply only to this
Article XII:
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(a) Account Balance. Account Balance means the sum of (i) the
Participant's account balance in a defined contribution plan as of the most
recent Valuation Date which ends with or within the Determination Date, and
(ii) an adjustment for contributions due on behalf of the Participant as of the
Determination Date, as more fully described in the regulations to Section 416
of the Code.
(b) Aggregation Group. Aggregation Group means the Required
Aggregation Group or the Permissive Aggregation Group, as determined by the
Administrator.
(c) Annual Compensation. For purposes of this Article XII, Annual
Compensation means the amount determined under Section 1.415-2(d) of the
Internal Revenue Service regulations [subject to the annual limitations set
forth in Section 1.4]. However, for purposes of this Article, Annual
Compensation shall not include Compensation before December 31, 1983, or
Compensation in Plan Years after the close of the last Plan Year in which the
Plan is top heavy.
(d) Determination Date. Determination Date means the last day of
the preceding Plan Year, or in the case of the first Plan Year, the last day of
such Plan Year.
(e) Key Employee. Key Employee means any Participant or Former
Participant, (and the Beneficiaries of either), who at any time during the
determination period was (1) one of the 10 Employees with annual Compensation
greater than the limit then in effect under Section 415(c)(1)(A) of the Code
who own or may be considered to own (within the meaning of Section 318 of the
Code) the largest interests in the Company, (2) a 5 percent owner of the
Company, (3) a 1 percent owner of the Company who receives annual Compensation
from the Company of more than $150,000, or (4) an officer of the Company having
annual Compensation from the Company for the Plan Year greater than fifty
percent of the dollar limitation in effect under Section 415(b)(1)(A) of the
Code for such Plan Year. For purposes of this subparagraph (e), the
"determination period" is the Plan Year containing the Determination Date, and
the four preceding Plan Years. For purposes of clause (1), only those Employees
who hold at least a one-half percent (0.5%) interest in the Company will be
considered, and if two Employees have the same ownership interest in the
Company, the Employee having the greater annual Compensation shall be treated
as having the larger interest.
The determination of who is a Key Employee will be made in
accordance with Section 416(i) of the Code and the regulations thereunder.
(f) Non-key Employee. Non-key employee means any Employee who is
not a Key Employee.
(g) Permissive Aggregation Group. Permissive Aggregation Group
means the Required Aggregation Group, and one or more other the qualified plans
maintained by the Company which, together with the Required Aggregation Group,
satisfy the provisions of Section 401(a)(4) and Section 410 of the Code.
(h) Present Value of the Accrued Benefit. Present Value of the
Accrued Benefit means the value of a Participant's benefit under a defined
benefit plan, determined as of the most recent Valuation Date within the
12-month period ending on the Determination Date, and determined as if the
Participant terminated service at that Valuation Date. Notwithstanding the
foregoing, during a Plan's first Plan Year, the value shall be determined as if
the Participant terminated service as of the Determination Date, or as if the
Participant terminated service as of the valuation date, but taking into
account the estimated accrued benefit as of the Determination Date, and using
the accrual rate specified in the plan. The Valuation Date shall be the
valuation date used for computing costs for purposes of the minimum funding
provisions of the Code. The actuarial assumptions used under this subparagraph
(h) shall be reasonable, as determined by the enrolled actuary.
(i) Required Aggregation Group. Required Aggregation Group means
(1) any qualified plan maintained by the Employer in which a Key Employee
participates (whether or not terminated),
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and (2) any other plan maintained by the Employer which enables any qualified
plan in which a Key Employee participates to satisfy the provisions of Section
401(a)(4) or Section 410 of the Code.
12.4 MISCELLANEOUS. For purposes of this Article XII, the
determination of the Present Value of the Accrued Benefit and the Account
Balance shall include any voluntary and mandatory contributions (excluding
voluntary deductible contributions, if otherwise permitted), and distributions
to the Participant and the Beneficiary made within the Plan Year which includes
the Determination Date, as well as within the four preceding Plan Years.
Rollovers and plan-to-plan transfers which are not initiated by the Participant
or which are made to a plan maintained by the Company shall be counted by the
receiving plan in determining the Present Value of the Accrued Benefit and the
Account Balance. Rollovers and plan-to-plan transfers which are initiated by
the Participant and which are transferred to another company's plan shall be
counted by the distributing plan when determining the Present Value of the
Accrued Benefit and the Account Balance. (These latter amounts shall also be
counted by the receiving plan only if accepted prior to January 1, 1984.)
12.5 SUPER TOP HEAVY. The Plan will be considered to be "super top
heavy" for a Plan Year if the sum of (i) the cumulative Present Value of the
Accrued Benefit of Key Employees (excluding former Key Employees) in all
defined benefit plans comprising the Aggregation Group, and (ii) the aggregate
of the Account Balances of Key Employees (excluding former Key Employees) in
all defined contribution plans comprising the Aggregation Group, exceeds 90
percent of such sums for all participants.
12.6 CONSEQUENCES OF SUPER TOP HEAVY STATUS. If the Plan is super top
heavy for any Plan Year, the provisions of Section 12.2(a) shall apply. In
addition, the dollar limitation in Section 3.11 shall be multiplied by 1.0,
rather than 1.25 (as indicated in such section) for such Plan Year. However,
the preceding provision shall apply only if a Key Employee is participating in
both a defined benefit plan and a defined contribution plan maintained by the
Company.
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ARTICLE XIII
SPECIAL LIMITATIONS APPLICABLE
TO ELECTIVE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
INTRODUCTION. The purpose of this Article XIII is to comply with
the special non-discrimination rules applicable to Elective Contributions and
Matching Contributions contained in Sections 401(k)(3) and 401(m) of the Code
and the Treasury Regulations published thereunder.
13.1 DEFINITIONS. For purposes of this Article XIII only, the
following terms shall have the meanings set forth below:
(a) "Actual Deferral Percentage" shall mean for any group of
Eligible Employees, the average of the Actual Deferral Ratios for each Eligible
Employee in the group for the Plan Year.
(b) "Actual Deferral Ratio" shall mean the ratio for an Eligible
Employee for the Plan Year of: (i) the Eligible Employee's Elective
Contributions for the Plan Year, plus any Company Contributions made to the
Plan on behalf of the Eligible Employee for the Plan Year which constitute
"qualifying nonelective contributions" within the meaning of Treasury
Regulation Section 1.401(k)-1(g)(7), to (ii) the Eligible Employee's
Compensation for the Plan Year.
(c) For purposes of Article XIII, "Compensation" shall mean an
Eligible Employee's Annual Compensation for the Plan Year (regardless of
whether the Employee was eligible to participate in the Plan for the entire
Plan Year), subject to the limitation described in the second paragraph of
Section 1.4. Compensation may, at the Plan Administrator's option, include or
exclude the amount of the Eligible Employee's Elective Contributions for the
Plan Year.
(d) For purposes of Article XIII, "Contribution Percentage" shall
mean, for any group of Eligible Employees, the average of the following ratio
(the "Contribution Ratio") for each Eligible Employee in the group for the Plan
Year under consideration: (i) the Matching Contributions made on behalf of the
Eligible Employee during such Plan Year pursuant to Section 3.2, over (ii) the
Compensation of the Eligible Employee for the Plan Year.
(e) "Eligible Employee" shall mean any Employee who has satisfied
the eligibility requirements to participate in this Plan, whether or not the
Employee has entered into a wage or salary deferral agreement pursuant to
Section 3.3.
(f) "Excess Contributions" shall mean that portion of each Highly
Compensated Employee's total Elective Contributions for a Plan Year which
exceeds the amount determined by multiplying such Highly Compensated Employee's
Compensation for the Plan Year by the Highly Compensated Employee's adjusted
Actual Deferral Ratio, as determined pursuant to Section 401(k)(8) of the Code,
Treasury Regulations 1.401(k)-1(f)(2) or any successor regulation, and the
following sentence. The adjustments which shall be made to the Actual Deferral
Ratio of each Highly Compensated Employee for a Plan Year in which the limits
in Section 13.2 are not satisfied shall be determined by successively reducing
the Elective Contributions of the Highly Compensated Employee with the highest
Actual Deferral Ratio for the Plan Year to the extent required to either
(1) enable the Actual Deferral Percentage of all eligible Highly
Compensated Employees, as a group, for the Plan Year to satisfy the
Actual Deferral Percentage test of Section 13.2, or
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(2) reduce such Highly Compensated Employee's Actual Deferral
Ratio for the Plan Year to equal the Actual Deferral Ratio of the
Highly Compensated Employee with the next highest Actual Deferral
Ratio,
and repeating for each Highly Compensated Employee (or Employees), in the order
of their Actual Deferral Ratios for the Plan Year, until the Actual Deferral
Percentage test set forth in Section 12.2 is satisfied.
The Plan's total Excess Contributions for the Plan Year, which
shall be equal to the sum of the amounts (if any) determined for each Highly
Compensated Employee for the Plan Year under the preceding paragraph, shall be
distributed to the Highly Compensated Employees in the manner set forth in
Section 13.3.
(g) "Excess Matching Contributions" shall mean, for each Highly
Compensated Employee, the sum of the Highly Compensated Employee's Matching
Contributions for a Plan Year minus the product obtained by multiplying such
Highly Compensated Employee's Compensation for the Plan Year by the Highly
Compensated Employee's adjusted Contribution Ratio, as determined pursuant to
the following sentence (and Treasury Regulation 1.401(m))-1(e)(2)). The
adjustments which shall be made to the Contribution Ratio of each Highly
Compensated Employee for a Plan Year in which the limit in Section 12.4(a) is
not satisfied shall be determined by successively reducing the Contribution
Ratio of the Highly Compensated Employee with the highest Matching
Contributions for the Plan Year to the extent required to either
(1) enable the average of the Contribution Ratios of all eligible
Highly Compensated Employees, as a group, for the Plan Year to satisfy
limits set forth in Section 13.4(a), or
(2) reduce such Highly Compensated Employee's Contribution Ratio
for the Plan Year to equal the Contribution Ratio of the Highly
Compensated Employee with the next highest Contribution Ratio for the
Plan Year,
and repeating for each Highly Compensated Employee (or Employees), in the order
of their Contribution Ratios for the Plan Year, until the limit set forth in
Section 13.4(a) is satisfied.
(j) "Matching Contributions" shall mean any contributions made by
the Company pursuant to Section 3.2 above.
(k) For purposes of Sections 13.2 and 13.4, all Elective
Contributions under Section 401(k) of the Code and Matching Contributions made
on behalf of an Eligible Employee to another qualified plan maintained by the
Company (or any Employer) shall be considered to be Elective Contributions and
Matching Contributions, respectively, made to this Plan, if (i) the Company has
elected or is required to aggregate such other qualified plan with this Plan
for purposes of Sections 401(a)(4) or 410(b) of the Code, or (ii) any Highly
Compensated Employee who is an Eligible Employee in this Plan is also eligible
to participate in such other qualified plan.
(1) For the 1997 Plan Year, the limits set forth in Sections
13.2, 13.4 and 13.5 shall be applied by using current Plan Year data for
Non-Highly Compensated Employees instead of prior Plan Year data.
13.2 ACTUAL DEFERRAL PERCENTAGE LIMITATION. For any Plan Year, the
Elective Contributions made on behalf of Highly Compensated Employees shall be
limited so that the Actual Deferral Percentage for Highly Compensated Employees
may not exceed the greater of the limits set forth in (a) or (b) below:
(a) One hundred twenty-five percent (125%) of the Actual Deferral
Percentage for Non-Highly Compensated Employees for the prior Plan Year.
(b) The lesser of (i) Two hundred percent (200%) of the Actual
Deferral Percentage for Non-Highly Compensated Employees or (ii) the Actual
Deferral Percentage for Non-Highly Compensated Employees for the prior Plan
Year plus two (2) percentage points.
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13.3 CORRECTIVE DISTRIBUTIONS.
(a) If, at or after the end of a Plan Year, the Plan
Administrator determines that the Actual Deferral Percentage of the Highly
Compensated Employees for the Plan Year exceeded both of the limits set forth
in Section 13.2, notwithstanding any corrective actions taken by the Plan
Administrator during the Plan Year, including designating all or a portion of
the contributions for the Plan Year under Sections 3.1 and/or 3.2 as qualified
non-elective contributions or qualified matching contributions, respectively,
then the Plan Administrator shall determine each Highly Compensated Employee's
Excess Contributions for the Plan Year and distribute such Excess
Contributions, together with the amount of trust income allocable to such
Excess Contributions, determined in accordance with paragraph (b) below, no
later than 2-1/2 months after the end of the Plan Year.
The portion of each Highly Compensated Employee's Elective
Contributions for the Plan Year that is to be distributed under this Section
shall be calculated in the following manner. The Elective Contributions made by
the Highly Compensated Employee or Employees with the highest dollar amount of
Elective Contributions for the Plan Year shall be reduced by that dollar amount
required to cause such Highly Compensated Employee's Elective Contributions to
equal the Elective Contributions made by the Highly Compensated Employee or
Employees with the next highest dollar amount of Elective Contributions for the
Plan Year. The amount of this reduction shall then be distributed to the Highly
Compensated Employee (or Employees) with the highest Elective Contributions.
However, if this amount, when added to any dollar amounts already distributed
under this paragraph, would exceed the Plan's total Excess Contributions for
the Plan Year, the amount to be distributed shall instead be to such lesser
amount as may be necessary to cause only the amount of the Plan's total Excess
Contributions to be distributed. If the total amount distributed pursuant to
this paragraph is less than the Plan's total Excess Contributions for the Plan
Year, this reduction shall be repeated, until the Plan's total Excess
Contributions for the Plan Year have been distributed.
In addition, the portion of any Highly Compensated Employee's
Matching Contributions for a Plan Year which are attributable to Elective
Contributions distributed as Excess Contributions under the preceding paragraph
shall be forfeited.
(b) Any corrective distribution to a Highly Compensated Employee
for a Plan Year shall include any income (or loss) allocable thereto for the
Plan Year. The allocable income (or loss) for the Plan Year may, at the Plan
Administrator's option, be determined by multiplying the total income (or loss)
allocable to the Highly Compensated Employee's Deferral Account for the Plan
Year by a fraction, the numerator being the Employee's share of the Plan's
Excess Contributions for the Plan Year and the denominator being the total
balance credited to the Employee's Deferral Account as of the end of the Plan
Year, reduced by any income thereof (and increased by any loss thereon) for the
Plan Year.
13.4 DISCRIMINATION TEST WITH RESPECT TO MATCHING CONTRIBUTIONS.
(a) For each Plan Year in which Matching Contributions have been
made to the Plan under Sections 3.2(a), the Plan Administrator shall act to
limit the Contribution Percentage for the Highly Compensated Employees as a
group to the greater of:
(1) 125% of the average Contribution Percentage for Non-Highly
Compensated Employees, as a group for the prior Plan Year; or
(2) 200% of the average Contribution Percentage for Non-Highly
Employees for the prior Plan Year, provided that the excess of the
average Contribution Percentage of Highly Compensated Employees over
the Contribution Percentage for Non-Highly Compensated Employees for
the prior Plan Year is not more than 2 percentage points.
(b) In the event that, for any Plan Year, the average
Contribution Percentage for the Highly Compensated Employees as a group exceeds
the above limits, then, as soon as practicable after the close
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<PAGE> 48
of the Plan Year, the Plan Administrator shall (i) determine the portion of the
Matching Contributions allocated to each Highly Compensated Employee which
constitute that Highly Compensated Employee's respective share of the Excess
Matching Contributions for the Plan Year, (ii) notify each such Highly
Compensated Employee of such reduction, and (iii) distribute the amount of such
reduction in Matching Contributions to the Highly Compensated Employee, to the
extent permitted under Code Section 401(m) and any Treasury Regulations adopted
thereunder.
13.5 MULTIPLE USE OF ALTERNATE LIMITS. The sum of the Actual Deferral
Percentage and the Contribution Percentage of the Highly Compensated Employees,
as a group, for any Plan Year shall not (after any corrective action taken
pursuant to Sections 13.3, 13.4(b) or 13.6 below) exceed the sum of:
(a) 125 percent of the lesser of (A) the Actual Deferral
Percentage for the Non-Highly Compensated Employees for the prior Plan
Year, or (B) the Contribution Percentage for the Non-Highly
Compensated Employees for the prior Plan Year, and
(b) Two (2) percent plus the greater of the amounts specified in
(1)(A) or (1)(B) above, but not in excess of 200% of the lesser of
(1)(A) or (1)(B).
If such limit is exceeded for any Plan Year, the Contribution Percentage for
Highly Compensated Employees for the Plan Year shall be corrected in a manner
consistent with Section 13.4(b) above and consistent with the requirements of
Treasury Regulation ss.1.401(m)-2, or any successor regulation then in effect.
13.6 CORRECTION OF EXCESS DEFERRALS. In the event that a Participant
has, during a single calendar year, made Elective Contributions to the Plan
which, when aggregated with all other Elective Deferrals made by or on behalf
of the Participant during such calendar year under any plan of any employer,
exceed the annual limit described in Section 3.3(f), the Participant may
request a corrective distribution from the Plan by filing a written statement
with the Plan Administrator on or before the first day of March of the next
calendar year. Such written notice shall:
(a) state that the Participant has had Elective Deferrals made on
his or her behalf for the calendar year in excess of the maximum
permitted annual amount;
(b) specify the total amount of such excess Elective Deferrals;
and
(c) specify the amount of the portion of such total excess
Elective Deferrals, not in excess of the sum of the Participant's
Elective Contributions under this Plan for the calendar year, which
the Participant will allocate to this Plan.
If the Plan Administrator receives such a notice, in proper form,
from the Participant on or before March 1st of the succeeding calendar year,
the Plan shall distribute to the affected Participant the amount of excess
Elective Contributions designated in such notice as allocated to the Plan, plus
any earnings attributable thereto, no later than April 15 of such succeeding
calendar year. Such distribution may be made without regard to any other
provisions of this Plan.
A Participant will be deemed to have provided the Plan
Administrator with a notice under this Section 13.6 if the Participant has made
Elective Deferrals in excess of the amount permitted under Section 3.3(f) for
the calendar year, calculated by taking into account Elective Deferrals made
under this Plan or any other plans maintained by the Company or an Affiliated
Employer. The Plan Administrator may then direct the Trustee to distribute that
amount from the Participant's Deferral Account necessary to eliminate the
excess Elective Deferral, plus any earnings attributable thereto, no later than
April 15 of the succeeding year. Such distribution may be made without regard
to other provisions of this Plan.
-44-
<PAGE> 49
IN WITNESS WHEREOF, Danka Corporation has caused this document to
be executed by its authorized officer on this _____ day of _______________,
1997, to be effective as of January 1, 1997, except as otherwise stated herein.
COMPANY:
DANKA CORPORATION
By: /s/ David C. Sell
--------------------------------
David C. Sell
Title:
-45
<PAGE> 50
APPENDIX A
LIST OF PREDECESSOR EMPLOYERS
For purposes of vesting and eligibility, any Eligible Employee
who was employed by one of the following Predecessor Employers immediately
prior to the time he or she became an Employee of the Company will be given
credit for all service completed with such Predecessor Employer prior to the
effective date of the acquisition:
<TABLE>
<CAPTION>
<S> <C>
Leslie Supply Company Kodak Imaging Services, Inc.
Office Imaging and CES Divisions of Eastman Kodak Co. Garden State Business Machine, Inc.
</TABLE>
-46-
<PAGE> 51
APPENDIX B
GRANDFATHERED OPTIONAL FORMS OF BENEFIT
Subject to the consent requirements of Section 6.7, all Employees
who first became Participants in the Plan prior to January 1, 1997, shall be
entitled to elect to receive their benefits from the Plan in one of the
following optional forms of benefit provided under the terms of prior restated
documents for the Plan:
1. Life Annuity Option - Under this option, the Participant will
receive monthly benefit payments for as long as the Participant lives. No death
benefits are payable after Participant's death. If the Participant is married
and elect this option, the consent of the Participant's spouse is required.
2. Contingent Beneficiary Option - Under this option, the
Participant will receive monthly benefit payments for as long as the
Participant lives. When the Participant dies, the Participant's beneficiary
will receive 100%, 66-2/3%, or 50% (the Participant chooses the percent) of the
monthly amount that was being paid to the Participant. If the Participant is
married and elects this option, the consent of the Participant's spouse is
required.
3. Life Annuity with Payments Certain Option - Under this option,
the Participant will receive monthly benefit payments for as long as the
Participant lives. If the Participant dies before receiving 60 or 120 monthly
payments (the Participant chooses the number), the Participant's beneficiary
will receive the remainder of the payments. If the Participant is married and
elects this option, the consent of the Participant's spouse is required.
4. Full Cash Refund Option - Under this option, the Participant
will receive monthly payments for as long as the Participant lives. When the
Participant dies, the Participant's beneficiary will receive a lump sum payment
equal to the amount remaining from the purchase of this benefit. If the
Participant is married and elects this option, the consent of the Participant's
spouse is required.
5. Joint and Survivor Annuity Option - Under this option, the
Participant and Participant's beneficiary will receive monthly benefit
payments. When either Participant or Participant's beneficiary dies, the
survivor will continue to receive 100%, 66-2/3%, or 50% (the Participant
chooses the percent) of the monthly amount that was being paid to the
Participant and Participant's beneficiary for life. If the Participant is
married and elects this option, the consent of the Participant's spouse is
required.
-47-
<PAGE> 52
FIRST AMENDMENT TO THE
DANKA CORPORATION 401(k) PROFIT SHARING PLAN
Danka Office Imaging Company (the "Company") hereby amends
the Danka Corporation 401(k) Profit Sharing Plan, as amended and restated
effective January 1, 1997 (the "Plan"), in the following respects, effective as
of January 1, 1997 (except where otherwise stated), in order to make certain
revisions to the Plan document requested by the Internal Revenue Service as
conditions to the issuance of a favorable determination letter on the
tax-qualified status of the Plan, as restated:
1. Section 1.20, defining the term "Highly Compensated Employee," is
amended to read as follows:
1.20 "Highly Compensated Employee" shall mean any Employee
who was (i) a "5 percent owner" of the Company at any time during the
Plan Year for which the determination is being made (the
"Determination Year") or the 12-month period immediately preceding
such Determination Year (the "Look-back Year"), or (ii) received
Section 415 Compensation [as defined in Code Section 415(c)(3) and
Section 3.9 below] in excess of $80,000 from the Company during the
Look-back Year. For this purpose, the Company and all Affiliated
Employers [as defined in Section 1.2 above] shall be treated as a
single employer.
2. Section 3.10 of the Plan, entitled "Excess Contributions," is
amended by replacing the phrase "...due to a reasonable error in estimating the
Participant's earnings or due to the allocation of forfeitures," with the
following:
"...due to the allocation of forfeitures, a reasonable error
in estimating a Participant's annual compensation, or a reasonable
error in determining the amount of Elective Deferrals [within the
meaning of Section 402(g)(3) of the Code]..."
3. Section 5.1 of the Plan, entitled "Investment of Funds," is amended
by adding the following sentence to the end of such section:
The Trustee and the Plan Administrator shall cause the assets
of the Trust Fund to be valued at least annually, as of the last day of
each Plan Year, at their fair market value.
<PAGE> 53
4. Section 5.5 of the Plan, entitled "Loans," is amended by adding the
following new sentence at the end of subsection 5.5(f):
Notwithstanding the foregoing, a married Participant's
interest in his or her Accounts may not be used as collateral for the
loan unless the Participant's spouse consents in writing to the use of
the Participant's Accounts as security for the loan within the 90-day
period ending on the date on which the loan is to be secured.
5. Section 6.13, "In-Service Withdrawals," is amended by inserting
"Rollover Account, if any," into subsection 6.13(a) immediately after the
phrase "Deferral Account." Section 6.13 is further amended by replacing the
first two references to "Deferral Account" in subsection 6.13(b) with the
phrase "Deferral Account and Rollover Account, if any." This shall apply for
withdrawals made on or after October 14, 1998.
6. Section 7.4 of the Plan, entitled "Spousal Annuities," is amended
by adding the following to the end of subsection 7.4(d):
The Participant and spouse may waive the spousal annuity on
or after the first day of the Plan Year in which the Participant
attains age 35. The waiver and spousal consent shall identify in
writing the specific nonspouse beneficiary (including any class of
beneficiaries or contingent beneficiaries), which designated
beneficiary may not be modified (except back to the spousal annuity)
without further spousal consent. If a Participant separates from his
or her employment before the Plan Year in which he or she attains age
35, this waiver may be made on or after the date of separation. A
Participant who has elected to waive the qualified preretirement
survivor annuity with spousal consent may revoke this waiver at any
time, and any number of times, during the period between the first day
of the Plan Year in which he or she attains age 35 and the date of
death.
7. Section 9.1 of the Plan is amended by replacing the phrase
"...except as expressly provided in the Agreement of Trust" in the second
sentence thereof with "except as expressly provided in Section 10.9 below."
8. Section 10.9 of the Plan is deleted and replaced by the following
new Section 10.9:
10.9 No Reversions. The corpus or income of the Trust Fund
shall in no event revert to the Company. Notwithstanding the
foregoing, any contribution made to the Plan by the Company may be
returned to the Company if (1) the contribution was made by the
Company by reason of a bona fide mistake of fact and is returned to
the Company within one year of the date of contribution, or (2) the
contribution was conditioned on its deductibility under Section 404 of
the Code and the Company's deduction for the contribution is
disallowed, and the contribution (to the extent disallowed) is be
returned to the Company within one year of the disallowance of the
deduction.
<PAGE> 54
9. Section 12.2(a) is amended by restating the second and third
sentences of subsection (a) as follows:
However, if during such Plan Year the highest amount allocated to the
accounts of any Key Employee (other than Rollover Contributions
allocated pursuant to Section 3.4) is less than 3 percent of such
person's Annual Compensation, the allocation to the account of a
Participant who is not a Key Employee shall be the same percentage as
that allocated to the accounts of the Key Employee whose allocation
for the Plan Year, stated as a percentage of Annual Compensation, was
the highest, including any Elective Contributions made by Key
Employees in determining the contributions made on behalf of Key
Employees for this purpose.
10. In all other respects, the provisions of the Plan, as amended and
restated effective January 1, 1997, shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this First Amendment to the
Plan to be executed by its duly authorized officer, effective as of January 1,
1999.
DANKA OFFICE IMAGING COMPANY
By: _______________________________
Title: ________________________
<PAGE> 55
SECOND AMENDMENT TO THE
DANKA 401(k) PROFIT SHARING PLAN
Danka Office Imaging Company (the "Company") hereby amends
the Danka 401(k) Profit Sharing Plan, as amended and restated effective January
1, 1997 (the "Plan"), in the following respects.
1. Section 1.8, defining the term "Company," is amended effective as
of March 31, 1997, to read as follows:
1.8 "Company" means Danka Office Imaging Company or any other
U.S. subsidiary of Danka Business Systems, PLC which shall adopt the
Plan.
2. Section 1.31, defining the term "Plan," is amended to read as
follows:
1.31. "Plan" means this Danka 401(k) Profit Sharing Plan
established by the Company, as it may be amended from time to time.
All other references in the text of the Plan to the name of the Plan shall be
revised accordingly.
3. Section 3.2 of the Plan, entitled "Matching Contributions," is
amended by replacing subsection (b) with the following:
(b) For Plan Years beginning after December 31, 1996, 100
percent of the Elective Contributions made by the Participant, up to
the first 3 percent of the Participant's Annual Compensation, plus an
additional 50 percent of any Elective Contributions in excess of 3
percent of the Participant's Annual Compensation, up to a maximum
total Matching Contribution of 4.5 percent of Annual Compensation.
(c) No matching contributions shall be made for a Participant
for periods beginning after January 31, 1999, and ending before
October 19, 1999, except as follows. Retroactive matching
contributions will be made on behalf of each Participant after October
18, 1999, with respect to the Elective Contributions made by the
Participant between January 31 and October 18, 1999. The matching
contributions shall be calculated in the manner described in paragraph
(b), but shall be made in the form of American Depositary Receipts
representing ordinary shares of Danka Business Systems PLC.
4. Section 3.2 is further amended by adding the following new sentence
to the end thereof:
Unless the Company determines otherwise, all Matching Contributions
made to the Trust Fund after October 18, 1999 will be made in the form
of American Depositary Receipts representing ordinary shares of the
stock of Danka Business Systems PLC, and will be added to the Danka
Stock Fund described in Section 5.2(h).
<PAGE> 56
5. Section 5.5 of the Plan, entitled "Loans," is amended, effective on
and after September 20, 1999, by adding the following new paragraph to the end
of Subsection 5.1(j):
Notwithstanding the preceding paragraph, if a Participant's employment
with the Company terminates solely as a result of the sale of his or
her division or other business unit to another employer, the Plan need
not accelerate repayment of the loan if the following three conditions
are met:
1. the Participant becomes a participant in a qualified
retirement plan of the successor employer;
2. the Participant's Account balance will be transferred to
such other plan through a direct rollover or plan-to-plan
transfer; and
3. the Participant loan will be transferred to the other plan
as part of such transfer.
6. In all other respects, the provisions of the Plan, as amended and
restated effective January 1, 1997, shall remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Second Amendment to
the Plan to be executed by its duly authorized officer on this 27 day of
October, 1999.
DANKA OFFICE IMAGING COMPANY
By: _______________________________
Title: ________________________
<PAGE> 1
EXHIBIT 5.2
[LETTERHEAD OF CLIFFORD CHANCE]
KGT/D2067/480 27 October 1999
020 7282 6035
Danka Business Systems PLC
Masters House
107 Hammersmith Road
London
W14 0QH
ALSO SENT BY FAX
Dear Sirs
SECTION 401(k) PROFIT SHARING PLAN ("THE PLAN")
We write to confirm that, on the basis of the information available to us,
shares in Danka Business Systems PLC ("the Company") which are issued to the
Plan Trustee will be legally issued by the Company as fully-paid ordinary
shares in the Company which are "nonassessable". We understand that, for US
purposes, the word "nonassessable" means that the shares in question are not
subject to any encumbrances (e.g. by way of a call) under which the Company
could require a shareholder to pay up further amounts in relation to such
shares.
We consent to the inclusion of this letter as an exhibit to the Company's
Form S-8 Registration Statement.
Yours faithfully,
/s/ Clifford Chance
- -------------------
Clifford Chance
<PAGE> 1
EXHIBIT 23.1
[LETTERHEAD OF KPMG]
The Board of Directors
Danka Business Systems PLC:
We consent to incorporation by reference in the registration statement (No.
33-xxxx) on Form S-8 of Danka Business Systems PLC of our report dated
July 14, 1999, relating to the consolidated balance sheets of Danka Business
Systems PLC and subsidiaries as of March 31, 1999 and 1998, and the related
consolidated statements of operations, shareholders' equity, and cash flows
for each of the years in the three-year period ended March 31, 1999, and all
related schedules, which report appears in the March 31, 1999 annual report
on Form 10-K of Danka Business Systems PLC.
/s/ KPMG AUDIT PLC
- -------------------
KPMG AUDIT PLC
London, England
October 28, 1999
