DATRON SYSTEMS INCORPORATED
PROFIT SHARING AND SAVINGS PLAN
(Amended and Restated as of April 1, 1998)
TABLE OF CONTENTS
Page
1. DEFINITIONS 3
2. PARTICIPATION 11
2.1. Service Requirement and Commencement
Date. 11
2.2. Period of Participation 12
2.3. Suspended Participation 12
3. DEFERRED PAY CONTRIBUTIONS 12
3.1. General Rules 12
3.2. Limitations on Deferred Pay
Contributions 13
3.3. Administrative Committee May Modify
or Revoke Deferred Pay
Contribution Elections 13
3.4. Distribution of Excess Deferrals and
Excess Contributions 14
3.5. Special Employer Contributions 15
4. EMPLOYER MATCHING AND PROFIT SHARING
CONTRIBUTIONS 15
4.1. Matching Contributions 15
4.2. Profit Sharing Contributions 15
4.3. Time for Contributions 16
4.4. Limitations on Employer
Contributions 16
4.5. Administrative Committee May Reduce or
Discontinue Matching Contributions 16
4.6. Distribution of Excess Aggregate
Contributions 16
5. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS 17
5.1. Accounts 17
5.2. Valuation of Accounts 17
5.3. Allocation of Employer Contributions
and Forfeitures 18
5.4. Limitations on Allocations 19
6. VESTING AND TREATMENT OF FORFEITURES 21
6.1. Vesting 21
6.2. Forfeitures 22
7. INVESTMENT OF PLAN ASSETS 23
7.1. Options Available to Participants 23
7.2. No Investment in Securities of the
Company or in Real Estate Leased
to the Company 24
7.3. Certain Other Investments 24
8. DISTRIBUTION OF BENEFITS AND
WITHDRAWALS 24
8.1. Amount of Plan Benefit 24
8.2. Time of Distribution 25
8.3. Methods of Distribution 26
8.4. Valuation of Accounts for
Distribution 26
8.5. Distribution after Total Disability 27
8.6. Distribution Pursuant to a Qualified
Domestic Relations Order 27
8.7. Withdrawal After Age 59 1/2 27
8.8. Withdrawals in the Event of Financial
Hardship 27
8.9. Loans to Employees 29
8.10. Direct Benefit Transfers 29
9. DEATH BENEFITS AND BENEFICIARIES 30
9.1. Death Benefits 30
9.2. Designation of Beneficiary 31
9.3. Absence of Valid Designation of
Beneficiary 31
9.4. Direct Benefit Transfers 31
10. TRUST AND PAYMENT OF BENEFITS AND
EXPENSES 31
10.1. Trust 31
10.2. Payment of Benefits 32
10.3. Expenses of Plan Administration 32
11. ADMINISTRATION 32
11.1. Board of Directors 32
11.2. Administrative Committee 32
11.3. Appointment of Investment Managers 35
11.4. Funding Policy 35
11.5. Engagement of Advisors 35
11.6. Service in More than One Fiduciary
Capacity 35
11.7. Indemnification 35
12. CLAIMS AND REVIEW PROCEDURES 36
12.1. Claims Procedure 36
12.2. Review Procedure 37
13. AMENDMENT AND TERMINATION 37
13.1. Amendment 37
13.2. Termination, Partial Termination,
or Complete Discontinuance of
Contributions 38
14. MISCELLANEOUS 38
14.1. No Effect on Employment Relationship 38
14.2. Mergers and Transfer of Assets 38
14.3. Prohibition Against Assignment 39
14.4. Permissible Reversions 39
14.5. Masculine/Feminine; Singular/Plural 40
14.6. Missing Participant or Beneficiary 40
14.7. Notices and Elections 40
14.8. Top Heavy Rules 40
14.9. Rollovers and Direct Transfers from
Other Plans 42
14.10. Compliance with Section 401(a)(9) of
the Code 43
14.11. Benefits for Certain Reemployed
Participants Who Return from
Military Service 43
14.12. Applicable Law and Severability 43
DATRON SYSTEMS INCORPORATED
PROFIT SHARING AND SAVINGS PLAN
(Amended and Restated as of April 1, 1998
INTRODUCTION
i. Datron Systems Incorporated (the "Company")
originally adopted this Plan effective April 1, 1980,
and has amended and restated it from time to time
thereafter.
ii. Effective as of April 1, 1998, unless otherwise
indicated, the Plan was amended and restated to read as
set forth herein. The principal changes reflected in
this amendment and restatement are designed to reflect
the merger of the Datron World Communications Inc.
Profit Sharing and Savings Plan (the "Datron World
Plan") with and into this Plan effective as of February
1, 1998, but the Company has also adopted additional
changes that are deemed necessary or desirable.
iii. The primary purpose of the Plan is to provide
Eligible Employees with the opportunity to accumulate
funds for their retirement through a program of pre-tax
savings, which may be supplemented by contributions made
by their Participating Employer. In this regard, the
Plan and the trust established hereunder are intended to
qualify as a "profit sharing plan" under section 401(a)
of the Code and as a "qualified cash or deferred
arrangement" under section 401(k) of the Code. Another
purpose of the Plan is to provide security for
Participants and their Beneficiaries through the
provision of benefits in the event of a Participant's
death or Total Disability.
iv. Except as otherwise indicated, the provisions of
this amended and restated Plan shall apply only to
individuals who are Employees on or after February 1,
1998. The benefits payable under the Plan to (or with
respect to) any individual who ceased to be an Employee
prior to February 1, 1998, and the rights and
obligations of any such individual with respect to such
benefits, shall be determined under the terms of the
Plan as in effect on (or as of) the date such individual
ceased to be an Employee.
1. DEFINITIONS
The terms defined in this Section are indicated by
capitalized initial letters wherever they appear in the
Plan and, whenever used, shall have the following
meanings:
1.1 "Administrative Committee" shall mean the committee
described in Section 11.2.
1.2 "Beneficiary" shall mean the person or persons
entitled to receive any benefits payable hereunder after
the death of a Participant (determined under Section 9).
1.3 "Board of Directors" shall mean the board of
directors of the Company.
1.4 "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.5 "Company" shall mean Datron Systems Incorporated, a
Delaware corporation.
1.6 "Compensation" shall mean, with respect to any
Employee, the Employee's wages, salaries, fees for
professional services, and other amounts received for
personal services actually rendered in the course of
employment by the Company or any Related Company, plus
the amount, if any, of his Deferred Pay Contributions
and the amount of any Participating Employer
contributions to a "cafeteria plan" governed by section
125 of the Code that are made at the Employee's
election, but excluding the following:
(a) Contributions to this Plan and any other plan of
deferred compensation, to the extent deductible or not
includable in gross income by the Employee;
(b) Distributions from any plan of deferred
compensation other than an unfunded plan that is not
qualified under section 401 of the Code;
(c) Amounts realized from the exercise of a stock
option or the disposition of stock acquired on exercise
of a stock option;
(d) Amounts realized on the vesting of restricted
property; and
(e) All other amounts that receive special tax benefits
under the Code.
1.7 "Covered Compensation" shall mean an Eligible
Employee's Compensation. Notwithstanding the preceding
sentence: (i) except as otherwise provided herein, the
amount of any Eligible Employee's "Covered Compensation"
taken into account under the Plan for any Plan Year
shall not exceed $160,000 (or such larger amount as may
be prescribed for that Plan Year by the Secretary of the
Treasury pursuant to section 401(a)(17) of the Code);
and (ii) for purposes of determining the amount of any
Participant's Deferred Pay Contributions under Section
3, his "Covered Compensation" shall be limited to
amounts payable after the effective date of his election
to make such Contributions.
1.8 "Deferred Pay Account" shall mean the account
established pursuant to Section 5.1 for each Participant
who elects to make Deferred Pay Contributions to the
Plan, to which such Contributions are credited.
1.9 "Deferred Pay Contributions" shall mean, with
respect to any Participant, the amount of his
Compensation that he has elected to contribute to the
Plan pursuant to Section 3.1.
1.10 "Eligible Employee" shall mean each Employee of a
Participating Employer, except the following:
(a) any such person who is a "leased employee" within
the meaning of section 414(n) of the Code;
(b) any such person who is a member of a collective
bargaining unit that has entered into a collective
bargaining agreement with his Participating Employer
with respect to which there is evidence that retirement
benefits were the subject of good faith bargaining,
unless participation in this Plan is specifically
provided for in such agreement; and
(c) any such person who is not classified as an
Employee for tax purposes by his Participating Employer.
1.11 "Employee" shall mean any individual employed by
the Company or any Related Company any portion of whose
compensation is subject to withholding of income tax
and/or for whom social security contributions are made
by the Company or Related Company that employs him. The
term "Employee" shall also include individuals who are
"leased employees" within the meaning of section 414(n)
of the Code and who are providing services to the
Company or any Related Company, other than any such
individuals who are described in section 414(n)(5) of
the Code. An Employee's employment shall not be
considered terminated for purposes of the Plan while he
is on an unpaid leave of absence. "Leave of absence"
shall mean a leave granted by the Company or any Related
Company, in accordance with rules uniformly applied to
all of its Employees, for reasons of health or public
service, or for other reasons determined by the Company
or Related Company to be in its best interests, and
shall include periods of military service for which
reemployment rights are prescribed by law.
Notwithstanding the foregoing provisions of this
Section, Employees who do not return to the employ of
the Company or any Related Company within 30 days (or
such longer period as may be prescribed by law)
following the end of their leave of absence, or in the
case of military service within the period their
reemployment rights are protected by law, shall be
deemed to have terminated their employment as of the
earlier of (a) the date the leave ended, or (b) the
first anniversary of the date the leave began (unless
such failure to return was the result of death, Total
Disability or Normal Retirement, in which case
employment shall be deemed to have terminated on the
date of death, Total Disability or Normal Retirement, as
applicable).
1.12 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
1.13 "Highly Compensated Employee" shall mean, with
respect to any Plan Year, an Employee who performs
services for the Company or any Related Company during
such Plan Year and who:
(a) Is a 5% owner (within the meaning of section
416(i)(1)(B)(i) of the Code) of the Company or any
Related Company during that Plan Year or the preceding
Plan Year; or
(b) Receives Compensation in excess of $80,000 during
the preceding Plan Year and, if elected by the
Administrative Committee for such preceding Year, was in
the Top-Paid Group for such preceding Year.
1.14 "Hour of Service" shall mean, with respect to any
Employee:
(a) Each hour for which the Employee is paid or
entitled to payment by the Company or any Related
Company for the performance of duties. Hours of Service
credited under this paragraph shall be credited to the
Plan Year or Service Anniversary Year, as appropriate,
in which the duties are performed;
(b) Each hour for which the Employee is paid or
entitled to payment by the Company or any Related
Company on account of a period of time during which no
duties are performed due to vacation, holiday, sickness,
incapacity (including disability), leave of absence,
layoff, jury duty and military service; provided that no
more than 501 Hours of Service shall be credited under
this paragraph on account of any single continuous
period during which the Employee performs no duties, and
further provided that no Hours of Service shall be
credited under this paragraph if the only payments made
or due to the Employee with respect to such period arise
under a plan maintained solely to comply with applicable
worker's compensation, unemployment compensation or
disability insurance laws. The number of Hours of
Service credited under this paragraph and the Plan Year
or Service Anniversary Year, as appropriate, to which
they shall be credited shall be determined in accordance
with Department of Labor Regulations, section
2530.200b-2(b);
(c) Solely for purposes of determining whether the
Employee has had a One-Year Break in Service, each hour
for which the Employee is absent from work by reason of
a Maternity or Paternity Absence; provided that no more
than 501 Hours of Service shall be credited to the
Employee under this paragraph by reason of any one such
Absence. If the Employee needs any of the Hours of
Service credited under this paragraph to avoid a
One-Year Break in Service in the Plan Year or Service
Anniversary Year, as appropriate, in which the Maternity
or Paternity Absence begins, such Hours of Service shall
only be credited to such Year. If the Employee does not
need any of the Hours of Service credited under this
paragraph to avoid a One-Year Break in Service in the
Plan Year or Service Anniversary Year, as appropriate,
in which the Maternity or Paternity Absence begins, such
Hours of Service shall be credited to the next such
Year. For each day of Maternity or Paternity Absence
covered by this paragraph, the Employee shall be
credited with the number of Hours of Service with which
he would have been credited but for such Absence, based
on his normal work schedule for the pay period
immediately prior to the commencement of such Absence;
(d) Each hour for which the Employee receives (or is
entitled to receive) back pay from the Company or any
Related Company, irrespective of mitigation of damages;
provided that no Hour of Service shall be credited under
this paragraph that has previously been credited to the
Employee under paragraph (a), (b) or (c) above. The
number of Hours of Service credited under this paragraph
and the Plan Year or Service Anniversary Year, as
appropriate, to which they shall be credited shall be
determined in accordance with Department of Labor
Regulations, section 2530.200b-2(b); and
(e) Each hour during an unpaid leave of absence granted
in accordance with Section 1.11 (or during a period of
military service described in that Section) for which
the Employee would have been paid or entitled to payment
had he not been granted such leave of absence (or
performed such military service), based on the
Employee's normal work schedule for the pay period
immediately prior to the commencement of the leave (or
military service); provided that no more than 501 Hours
of Service shall be credited under this paragraph on
account of any one such unpaid leave of absence (or
period of military service), and further provided that
no Hours of Service shall be credited under this
paragraph for any period after the Employee's employment
is deemed to have terminated under the rules set forth
in Section 1.11. Hours of Service credited under this
paragraph shall be credited to the Plan Year(s) or
Service Anniversary Year(s), as appropriate, that
include the pay periods during which the leave (or
military service) occurs.
Any Employee with respect to whom an accurate record of
Hours of Service is not kept by the Company or any
Related Company shall be credited with 10 Hours of
Service for each day during which he completes at least
one Hour of Service.
1.15 "Limitation Year" shall mean the Plan Year.
1.16 "Matching Contributions" shall mean the amount, if
any, contributed to the Plan by the Participating
Employers pursuant to Section 4.1 as a function of
Participants' Deferred Pay Contributions.
1.17 "Matching Contributions Account" shall mean the
account established for each Participant pursuant to
Section 5.1, to which his share of any Matching
Contributions made by his Participating Employer is
credited.
1.18 "Maternity or Paternity Absence" shall mean an
Employee's absence from employment with the Company or
any Related Company:
(a) Because of the pregnancy of the Employee;
(b) Because of the birth of a child of the Employee;
(c) Because of the placement of a child with the
Employee in connection with his adoption of such child;
or
(d) For purposes of caring for a child described in
paragraph (b) or (c) for a period beginning immediately
following its birth or placement with the Employee.
An Employee shall submit to the Administrative Committee
such timely information as the Committee may reasonably
require to establish that an absence qualifies as a
Maternity or Paternity Absence.
1.19 "Normal Retirement" shall mean ceasing to be an
Employee upon or after attaining Normal Retirement Age.
1.20 "Normal Retirement Age" shall mean age 65.
1.21 "One-Year Break in Service" shall mean, with
respect to any Employee, a Service Anniversary Year or
Plan Year, as appropriate, during which the Employee
does not complete more than 500 Hours of Service.
1.22 "Participant" shall mean an Eligible Employee who
is participating in the Plan in accordance with Section
2.
1.23 "Participating Employer" shall mean the Company,
Datron/Transco Inc., Datron World Communications Inc.
and any other Related Company that has been authorized
by the Board of Directors to participate in this Plan
with respect to all or any portion of its Employees and
that has adopted this Plan by appropriate corporate
action.
1.24 "Plan" shall mean the Datron Systems Incorporated
Profit Sharing and Savings Plan, as set forth herein and
as it may be amended from time to time hereafter.
1.25 "Plan Accounts" shall mean a Participant's Deferred
Pay Account, Matching Contributions Account, Profit
Sharing Account, any Special Contribution Account
established for the Participant and any Rollover Account
established for the Participant, or any of such
Accounts, as applicable.
1.26 "Plan Benefit" shall have the meaning specified in
Section 8.1.
1.27 "Plan Year" shall mean each 12-consecutive month
period commencing April 1 and ending the next following
March 31.
1.28 "Profit Sharing Account" shall mean the account
established for each Participant pursuant to Section
5.1, to which his share of any Profit Sharing
Contribution made by his Participating Employer is
credited.
1.29 "Profit Sharing Contribution" shall mean the
amount, if any, contributed to the Plan by the
Participating Employers pursuant to Section 4.2.
1.30 "Qualified Domestic Relations Order" shall mean a
judgment, decree or order (including approval of a
property settlement agreement) issued pursuant to any
State domestic relations law (including a community
property law) that the Administrative Committee
determines is a "qualified domestic relations order"
within the meaning of section 414(p) of the Code. Such
determination shall be made under reasonable procedures
established by the Administrative Committee.
1.31 "Quarter" shall mean a calendar quarter, commencing
January 1, April 1, July 1 and October 1.
1.32 "Related Company" shall mean: (i) any corporation
that is a member of the same "controlled group of
corporations" (as defined in section 414(b) of the Code)
as the Company; (ii) a trade or business (whether or not
incorporated) that is under "common control" (as defined
in section 414(c) of the Code) with the Company; (iii) a
trade or business (whether or not incorporated) that is
a member of the same "affiliated service group" (as
defined in section 414(m) of the Code) as the Company;
and (iv) any other entity that must be combined with the
Company and treated as a single employer under
regulations issued under section 414(o) of the Code;
provided that, except as provided in the following
sentence, status as a Related Company shall be limited
to periods after the date of the affiliation with the
Company described in this Section. With respect to
individuals who are (or were) employed by Transco
Communications, Inc., the term "Related Company" shall
include any predecessor of that company.
1.33 "Rollover Account" shall mean the account
established pursuant to Section 5.1 for each Eligible
Employee who elects to roll over a distribution from
another tax-qualified retirement plan into this Plan or
who arranges to have an amount transferred directly from
another tax-qualified retirement plan into this Plan, in
either case in accordance with Section 14.9.
1.34 "Service Anniversary Year" shall mean, with respect
to any Employee, each 12-consecutive month period
commencing on the date the Employee first performs an
Hour of Service and anniversaries of such date.
1.35 "Special Contribution Account" shall mean the
account established pursuant to Section 5.1 for each
Eligible Employee who receives an allocation of any
special contribution to the Plan made pursuant to
Section 3.5.
1.36 "Top-Heavy Plan" shall have the meaning specified
in Section 14.8(b).
1.37 "Top-Paid Group" shall mean, with respect to any
Plan Year,
the top 20% of all Employees who perform services for
the Company or any Related Company during such Plan
Year, ranked on the basis of their Compensation for such
Plan Year. In determining the number of Employees in
the Top-Paid Group for any Plan Year:
(a) All Employees described in section 414(q)(5) of the
Code (and the regulations promulgated thereunder) shall
be included; and
(b) Nonresident aliens who receive no earned income
(within the meaning of section 911(d)(2) of the Code)
that constitutes income from sources within the United
States (within the meaning of section 861(a)(3) of the
Code) from the Company or any Related Company during
such Plan Year shall be excluded.
An individual described in paragraph (b) of this Section
shall also be excluded in determining the members of the
Top-Paid Group for any Plan Year.
1.38 "Total Disability" or "Totally Disabled" shall mean
a physical or mental incapacity that prevents a
Participant from performing his normal job and that a
medical examiner satisfactory to the Administrative
Committee certifies is likely to be
permanent.
1.39 "Trust" shall mean the trust described in Section
10.
1.40 "Trustee" shall mean the trustee(s) of the Trust
established pursuant to the Plan.
1.41 "Year of Service" shall mean, with respect to any
Employee:
(a) for purposes of determining vesting with respect to
periods
prior to April 1, 1991, a Service Anniversary Year
during which the Employee completes at least 1,000 Hours
of Service; and (b) for purposes of determining vesting
with respect to periods after March 31, 1991, a Plan
Year during which the Employee completes at least 1,000
Hours of Service, provided, however, that, if an
Employee completes at least 1,000 Hours of Service in
his Service Anniversary Year that ends on or after April
1, 1991 and also completes at least 1,000 Hours of
Service in the Plan Year that commences on such date, he
shall be credited with two Years of Service for purposes
of vesting at the end of such Plan Year (or on an
earlier date in such Plan Year on which he ceases to be
an Employee). Notwithstanding the foregoing provisions
of this Section, an Employee's Years of Service shall
not include the following:
(i) any Years of Service completed before the Employee
has five consecutive One-Year Breaks in Service, if the
Employee had not completed at least three Years of
Service before the first of such One-Year Breaks in
Service; or
(ii) any Years of Service completed prior to April 1,
1980.
2. PARTICIPATION
2.1 Service Requirement and Commencement Date.
(a) Current Participants. Each Employee who was a
Participant on February 1, 1998 shall continue to
participate on and after February 1, 1998 under and in
accordance with the terms of this Plan.
(b) Future Participants. Any Employee not described in
paragraph (a) of this Section shall automatically
commence participating in the Plan on the first day of
the first pay period next following the date he has been
an Employee for six months and has completed 500 Hours
of Service, provided he is an Eligible Employee on such
day. If 500 Hours of Service are not completed during
the first six months of employment, participation in the
Plan shall commence on the first day of the first pay
period next following the expiration of any succeeding
six-month period of employment during which 500 Hours of
Service are completed, provided the Employee is an
Eligible Employee on such day. If an Employee is not an
Eligible Employee on such day, he shall automatically
commence participating in the Plan on the day he becomes
an Eligible Employee.
(c) Special Rule for Rollover Accounts.
Notwithstanding the foregoing provisions of this
Section, an Eligible Employee who makes a rollover
contribution to this Plan (in accordance with Section
14.9) or who arranges for a direct transfer of funds
into this Plan (in accordance with Section 14.9) shall
automatically commence participating in the Plan with
respect to his Rollover Account (but not for purposes of
Sections 3 and 4) on the date such rollover or transfer
is made.
2.2 Period of Participation. A Participant's
participation in the Plan shall continue until the date
he has received the entire amount to which he is
entitled under the Plan or, if earlier, the date of his
death.
2.3 Suspended Participation. A Participant who
ceases to be an Eligible Employee but continues to be an
Employee shall become a suspended Participant. No
amounts shall be credited to a suspended Participant's
Plan accounts that are based on his Covered Compensation
for the period of his suspension. However, a suspended
Participant shall continue to vest and shall be entitled
to benefits in accordance with the other provisions of
the Plan throughout the period he is on suspended
status.
3. DEFERRED PAY CONTRIBUTIONS
3.1 General Rules.
(a) Written Election. Each Participant may elect to
make Deferred Pay Contributions to the Plan. Such an
election must be filed at least 10 days prior to the
desired commencement date.
(b) Amount of Deferred Pay Contributions. Subject to
any limitations imposed by the Administrative Committee
and to the contribution limitations set forth in Section
3.2 below, the amount of a Participant's Deferred Pay
Contributions may be any specified percentage, in 1%
increments, from 1% to 25% of his Covered Compensation.
(c) Deemed Employer Contributions. For federal income
tax purposes, Deferred Pay Contributions shall be deemed
to be Participating Employer contributions to the Plan,
and a Participant's election to make Deferred Pay
Contributions shall constitute an election to have the
amount that would otherwise constitute his Compensation
reduced by the amount of his Deferred Pay Contributions.
(d) Change in Amount of Deferred Pay Contributions.
Subject to any limitations imposed by the Administrative
Committee and to the contribution limitations set forth
in Section 3.2 below, a Participant may change the
percentage of his Deferred Pay Contributions to any
percentage allowed under paragraph (b) of this Section,
effective on the first day of the first pay period in
any month, by giving written notice to his Participating
Employer at least 10 days prior to the last day of the
month preceding the month the change is to become
effective.
(e) Stopping and Resuming Deferred Pay Contributions.
A Participant may elect to discontinue future Deferred
Pay Contributions at any time, and any such election
shall be effective as soon as reasonably practicable
after its receipt by the appropriate Participating
Employer. Following a discontinuance, a Participant may
resume making Deferred Pay Contributions, effective on
the first day of the first pay period in any Quarter, by
giving written notice to his Participating Employer at
least 10 days prior to the last day of the month
preceding the month contributions are to resume.
(f) Payment to Trust. A Participant's Deferred Pay
Contributions shall be paid to the Trust by his
Participating Employer as soon as reasonably
practicable, and no later than 15 days, after the amount
otherwise would have been paid to the Participant.
3.2 Limitations on Deferred Pay Contributions.
Notwithstanding any other provision of the Plan:
(a) Deferred Pay Contributions for any Plan Year shall
not exceed the amount the Administrative Committee
estimates will be deductible by the Participating
Employers for such Plan Year under section 404 of the
Code;
(b) No Participant shall be permitted to make Deferred
Pay Contributions for any calendar year in excess of the
maximum amount allowed under section 402(g)(1) of the
Code, as such amount is adjusted for increases in the
cost-of-living pursuant to section 402(g)(5) of the
Code;
(c) The "actual deferral percentage" (as defined in
section 401(k)(3) of the Code) for any Plan Year of
those Participants who are Highly Compensated Employees
shall not exceed the percentage allowed under section
401(k)(3) of the Code; and
(d) No Participant shall be permitted to make Deferred
Pay Contributions that would cause the annual additions
to his Plan Accounts to exceed the limitations set forth
in paragraphs (a)-(c) of Section 5.4.
3.3 Administrative Committee May Modify or Revoke
Deferred Pay Contribution Elections.
(a) General Rule. Notwithstanding any other provision
of the Plan, the Administrative Committee may modify or
revoke the Deferred Pay Contribution election of any
Participant at any time, if it determines that such
modification or revocation is necessary to ensure that
his Deferred Pay Contributions for any Plan Year will
not exceed any of the limitations set forth in Section
3.2. If Deferred Pay Contributions would have been made
under a Participant's election but for the application
of Section 2.3 (dealing with suspension), such election
shall be deemed modified so as not to require Deferred
Pay Contributions of an amount greater than the maximum
amount allowed under the terms of the Plan.
(b) Modification Priorities. Any modification of a
Participant's Deferred Pay Contribution election that is
required to satisfy section 402(g)(1) of the Code shall
be made before any modification is made to satisfy
section 401(k)(3) of the Code.
3.4 Distribution of Excess Deferrals and Excess
Contributions.
(a) Deferred Pay Contributions in Excess of Annual
Limitation. If any Participant's Deferred Pay
Contributions for any calendar year exceed the annual
limitation set forth in Section 3.2(b), the excess
amount, adjusted for income (or loss) attributable
thereto, shall be distributed to the Participant from
the Trust. Such distribution shall be made no later
than the April 15 following the close of the calendar
year with respect to which the excess Deferred Pay
Contributions were made.
(b) Deferred Pay Contributions of Highly Compensated
Employees in Excess of Nondiscrimination Limitation. If
the actual deferral percentage limitation for Highly
Compensated Employees set forth in Section 3.2(c) is
exceeded with respect to any Plan Year, the amount that
constitutes "excess contributions" (as defined in
section 401(k)(8)(B) of the Code) for such Plan Year,
adjusted for income (or loss) attributable thereto,
shall be distributed from the Trust to the appropriate
Participants who are Highly Compensated Employees on the
basis of the amount of each such Participant's excess
Deferred Pay Contributions determined in accordance with
section 401(k)(8)(C) of the Code, and shall be completed
by the last day of the Plan Year following the Plan Year
with respect to which such excess contributions were
made.
(c) Computation of Income (Loss) for Distributions.
The income (or loss) attributable to excess Deferred Pay
Contributions under paragraphs (a) and (b) of this
Section shall only include income (or loss) for the Plan
Year with respect to which the excess Deferred Pay
Contributions were made (and shall exclude any income or
loss for the period from the end of such Plan Year to
the date the excess amount is distributed). The amount
of such income (or loss) shall be computed in accordance
with regulations promulgated under section 401(k)(8)(A)
of the Code..
(d) Choice of Investment Funds for Distributions. In
accordance with equitable and nondiscriminatory rules
established by the Administrative Committee, each
Participant shall have the right to specify the
investment funds from which any distribution under
paragraph (a) or (b) of this Section shall be made. If
no such election is made in a timely manner, any such
distribution shall be made ratably from each investment
fund in which the Participant's Deferred Pay Account is
invested.
3.5 Special Employer Contributions.
(a) General Rule. In order to ensure that the
nondiscrimination tests imposed under section 401(k) of
the Code are met for any Plan Year, the Company may
determine that the Participating Employers will make a
special contribution to the Plan for such Plan Year.
(b) Contribution and Allocation. Any special
contribution to the Plan made pursuant to paragraph (a)
of this Section shall be contributed to the Trust no
later than the date prescribed for filing the Company's
federal income tax return for the Plan Year for which
such contribution is made (including extensions
thereof). Any such special contribution to the Plan
shall be allocated, as of the last day of the relevant
Plan Year, among the Deferred Pay Accounts of
Participants who are not Highly Compensated Employees
during such Plan Year (without regard to whether they
made Deferred Pay Contributions with respect to such
Plan Year). Such allocation shall be made in whatever
manner may be directed by the Administrative Committee
to enable the Plan to meet the nondiscrimination tests
of section 401(k) of the Code for the relevant Plan
Year.
(c) Treatment of Special Contributions. The Company
intends that any special contribution made pursuant to
paragraph (a) of this Section shall generally be treated
as Deferred Pay Contributions made pursuant to
Participants' Deferred Pay Contribution elections under
Section 3.1, except that such contribution: (1) shall
not be subject to the annual limit on Deferred Pay
Contributions set forth in Section 3.2(b); (2) may not
be withdrawn under the financial hardship withdrawal
provisions of Section 8.8; and (3) shall not affect
Participants' Compensation.
4. EMPLOYER MATCHING AND PROFIT SHARING
CONTRIBUTIONS
4.1 Matching Contributions. For each Plan Year, the
Company shall determine whether any or all of the
Participating Employers will make Matching Contributions
to the Plan and, if so, the amount or percentage
thereof. Each Participating Employer's Matching
Contributions for any Plan Year shall be a uniform
percentage of the Deferred Pay Contributions made by
each Participant employed by such Participating
Employer, subject to whatever maximum dollar amount or
percentage limitation the Company may choose to impose.
4.2 Profit Sharing Contributions. Without regard to
whether a Participating Employer makes Matching
Contributions to the Plan for a given Plan Year, the
Company may determine that any or all of the
Participating Employers will make a Profit Sharing
Contribution to the Plan for such Plan Year. The amount
of any Profit Sharing Contribution by any Participating
Employer shall be in the sole and absolute discretion of
the Company.
4.3 Time for Contributions. Any Matching and/or
Profit Sharing Contribution to the Plan for a given Plan
Year shall be contributed to the Trust no later than the
date prescribed for filing the Company's federal income
tax return for such Plan Year (including extensions
thereof).
4.4 Limitations on Employer
Contributions. Notwithstanding any other provision of
the Plan:
(a) Matching and Profit Sharing Contributions for any
Plan Year shall not exceed the amount the Administrative
Committee estimates will be deductible by the
Participating Employers for such Plan Year under section
404 of the Code; and
(b) With respect to Matching Contributions for any Plan
Year, the "contribution percentage" (as defined in
section 401(m)(3) of the Code) of those Participants who
are Highly Compensated Employees shall not exceed the
percentage allowed under section 401(m)(2) of the Code.
4.5 Administrative Committee May Reduce or
Discontinue Matching Contributions. Notwithstanding any
other provision of the Plan, the Administrative
Committee may reduce or discontinue Matching
Contributions on behalf of any Participant who is a
Highly Compensated Employee, if it determines that such
reduction or discontinuance is necessary to satisfy the
limitations imposed under section 415 or 401(m)(2) of
the Code.
4.6 Distribution of Excess Aggregate Contributions.
(a) General Rule. Notwithstanding any other provision
of the Plan, any Matching Contributions that constitute
"excess aggregate contributions" (as defined in section
401(m)(6)(B) of the Code) for any Plan Year, adjusted
for income (or loss) attributable thereto, shall be
distributed from the Trust to the appropriate
Participants who are Highly Compensated Employees. Such
distribution shall be made in accordance with section
401(m)(6)(C) of the Code, and shall be completed by the
last day of the Plan Year following the Plan Year with
respect to which such excess aggregate contributions
were made.
(b) Determination of Excess Aggregate Contributions.
The amount of excess aggregate contributions for any
Plan Year, and the amount of income (or loss)
attributable thereto, shall be determined in accordance
with section 401(m)(6)(B) of the Code, by applying (with
appropriate modifications) the rules for "excess
contributions" set forth in paragraphs (b) and (c) of
Section 3.4.
(c) Choice of Investment Funds for Distributions. In
accordance with equitable and nondiscriminatory rules
established by the Administrative Committee, each
Participant shall have the right to specify the
investment funds from which any distribution under
paragraph (a) of this Section will be made. If no such
election is made in a timely manner, any such
distribution shall be made ratably from each investment
fund in which the Participant's Matching Contributions
Account is invested.
5. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
5.1 Accounts. The Administrative Committee shall
establish and maintain any or all of the following Plan
Accounts, as appropriate, for each Participant:
(a) A Deferred Pay Account, which will be credited with
the Participant's Deferred Pay Contributions;
(b) A Matching Contributions Account, which will be
credited with the Participant's share of any Matching
Contributions made by his Participating Employer;
(c) A Profit Sharing Account, which will be credited
with the Participant's share of any Profit Sharing
Contributions made by his Participating Employer;
(d) A Special Contribution Account, which will be
credited with the Participant's share of any special
contribution to the Plan made pursuant to Section 3.5;
and
(e) A Rollover Account, which will be credited with any
amount that the Participant receives from another tax-
qualified retirement plan and rolls over into this Plan
in accordance with Section 14.9, and any amount that the
Participant arranges to have transferred from another
tax-qualified retirement plan into this Plan in
accordance with Section 14.9.
5.2 Valuation of Accounts. Within 90 days after the
end of each Plan Year and within 90 days after the
removal or resignation of the Trustee, the
Administrative Committee shall direct the valuation of
the assets of the Plan based on fair market values as of
the close of the Plan Year (or the close of the shorter
period ending with such removal or resignation). The
Administrative Committee in its sole discretion may
direct a valuation of the Plan's assets as of any other
date, if such valuation is considered to be in the
interest of equitable administration of the Plan, and
any such other date shall also constitute a valuation
date hereunder. As of any valuation date and prior to
the allocation of Deferred Pay Contributions, Matching
Contributions, Profit Sharing Contributions and
forfeitures for the period covered by the valuation, the
Administrative Committee shall allocate the increment or
profits to, and charge any losses against, the
appropriate Plan Accounts of Participants, in proportion
to the balances of such Accounts as of the last
preceding valuation date.
5.3 Allocation of Employer Contributions and
Forfeitures.
(a) Matching Contributions. Any Matching Contributions
to the Plan by any Participating Employer for any Plan
Year shall be allocated to the Matching Contribution
Accounts of those Participants who were employed by such
Participating Employer during some or all of the period
they made Deferred Pay Contributions to the Plan during
such Plan Year, and who:
(1) completed at least 500 Hours of Service during such
Plan Year and are Employees on the last day of such Plan
Year, or
(2) ceased to be Employees during such Plan Year
because of Normal Retirement, Total Disability, or death
(without regard to the number of Hours of Service they
completed during such Plan Year).
Such allocation shall be made as of the last day of the
Plan Year for which the Matching Contribution is made,
or as of such other date(s) in such Plan Year as the
Administrative Committee may direct, as a uniform
percentage of the Deferred Pay Contributions made by
each such Participant during the period he was so
employed, subject to whatever maximum dollar amount or
percentage limitation the Company may choose to impose.
(b) Profit Sharing Contributions and Forfeitures. Any
Profit Sharing Contribution to the Plan by any
Participating Employer for any Plan Year and, except as
provided in the last two sentences of Section 6.2(b),
any forfeitures attributable to Employees of such
Participating Employer for such Plan Year, shall be
allocated to the Profit Sharing Accounts of:
(1) those Participants who are Employees on the first
and last day of such Plan Year, who were employed by the
Participating Employer that makes the contribution for
all or a portion of the relevant Plan Year, and who
completed at least 1,000 Hours of Service during such
Plan Year; and
(2) those Participants or Employees who were Employees
on the first day of such Plan Year and who were employed
by the Participating Employer that makes the
contribution for all or a portion of the relevant Plan
Year, but ceased to be Employees during such Plan Year
because of Normal Retirement, Total Disability, or death
(without regard to the number of Hours of Service they
completed during such Plan Year).
Such allocation shall be made as of the last day of the
Plan Year for which the Profit Sharing Contribution is
made, in the ratio that each such Participant's or
Employee's Covered Compensation for the portion of the
relevant Plan Year that he was both employed by the
Participating Employer that makes the contribution and
was an Eligible Employee bears to the total Covered
Compensation of all such Participants or Employees who
were employed by the Participating Employer that makes
the contribution for the portion of such Plan Year that
they were Eligible Employees.
5.4 Limitations on Allocations.
(a) General Limitation. Notwithstanding any other
provision of the Plan, the total annual additions to a
Participant's Plan Accounts for any Limitation Year
shall not exceed the lesser of:
(1) $30,000 (or, if greater, one-fourth of the dollar
limitation on benefits payable under a defined benefit
plan set forth in section 415(b)(1)(A) of the Code); or
(2) 25% of the Participant's Compensation for such
Limitation Year.
(b) Aggregation of Other Plans. If any Participant in
this Plan is also a participant in another "defined
contribution plan" (as defined in section 414(i) of the
Code) maintained by the Company or any Related Company,
such Participant's annual additions under such other
plan(s) shall be aggregated with the Participant's
annual additions under this Plan for purposes of the
limitation set forth in paragraph (a) of this Section.
If such aggregate annual additions would exceed such
limitation, the limitation shall first be applied to
limit the Participant's annual additions under the other
plan(s).
(c) Combined Plan Limitation. If any Participant in
this Plan is also a participant in a "defined benefit
plan" (as defined in section 414(j) of the Code)
maintained by the Company or any Related Company, the
sum of the "defined benefit plan fraction" and the
"defined contribution plan fraction" (as defined in
section 415(e) of the Code) for such Participant for any
Limitation Year shall not exceed the combined plan
limitation set forth in section 415(e) of the Code. If
a restriction on benefits and annual additions for any
such Participant is required to comply with such
combined plan limitation, the restriction shall first be
applied to reduce the Participant's benefit under the
defined benefit plan.
(d) Treatment of Excess Annual Additions. If the
annual additions to a Participant's Plan Accounts for
any Limitation Year would exceed any of the limitations
described in paragraphs (a) -
(c) of this Section for such Limitation Year, and if the
excess is a result of the allocation of forfeitures
pursuant to Section 5.3(b), a reasonable error in
estimating the Participant's Taxable Compensation for
such Limitation Year, a reasonable error in determining
the amount of Deferred Pay Contributions that the
Participant may make for such Limitation Year under
section 415 of the Code, or such other limited facts and
circumstances as may be permitted by the Commissioner of
Internal Revenue, the excess amount shall be reduced as
follows:
(1) Excess amounts that are attributable to Deferred
Pay Contributions shall be returned to the Participant
as a cash bonus, and such amounts shall not thereafter
constitute annual additions for the relevant Limitation
Year;
(2) Excess amounts that are attributable to Matching
Contributions shall be held unallocated in a suspense
account, and shall be treated and allocated (in the
following Limitation Year(s)) as provided in the third
sentence of subparagraph (4) of this paragraph;
(3) Excess amounts remaining after the application of
subparagraphs (1) and (2) of this paragraph shall be
allocated and reallocated to the appropriate Plan
Accounts of all other Participants, in accordance with
Section 5.3(b), to the extent that such allocations
would not cause the annual additions to each other
Participant's Plan Accounts to exceed any of the
limitations provided in the Plan; and
(4) To the extent that the excess amounts described in
subparagraph (3) of this paragraph cannot be allocated
to other Participants' Plan Accounts, such amounts shall
be held unallocated in a suspense account. No
investment gains or losses shall be allocated to the
suspense account. All amounts held in the suspense
account shall be allocated and reallocated to
Participants' Profit Sharing Accounts in the following
Limitation Year (or Years, if necessary), in proportion
to their estimated Covered Compensation for such
Limitation Year(s). Such allocation shall be made
before any other amount that would constitute an annual
addition for such Limitation Year(s) (including Deferred
Pay Contributions) may be contributed to the Plan.
(e) Special Definitions.
(1) For purposes of this Section, the term "annual
additions" shall mean the aggregate amount credited to a
Participant's Plan Accounts from: (i) Deferred Pay
Contributions, Matching Contributions, any special
contribution to the Plan made pursuant to Section 3.5,
Profit Sharing Contributions and forfeitures; (ii)
amounts allocated under paragraph (d) of this Section
(dealing with excess annual additions); (iii) amounts
allocated under Section
14.6 (dealing with Missing Participants and
Beneficiaries); and
(iv) employer contributions made under Section 14.8
(dealing with Top-Heavy Plans).
(2) For purposes of this Section, the term "employer"
shall include all corporations that are members of the
same "controlled group" as the Company, determined under
section 1563(a) of the Code (without regard to sections
1563(a)(4) and 1563(e)(3)(C)), except that the phrase
"more than 50 percent" shall be substituted for the
phrase "at least 80 percent" wherever the latter phrase
appears in section 1563(a).
6. VESTING AND TREATMENT OF FORFEITURES
6.1 Vesting.
(a) Deferred Pay, Special Contribution and Rollover
Accounts. All amounts credited to a Participant's
Deferred Pay Account, Special Contribution Account (if
any) and Rollover Account (if any) shall be fully (100%)
vested and nonforfeitable at all times.
(b) Matching Contributions and Profit Sharing Accounts
(Effective February 1, 1998).
(1) All amounts credited to a Participant's Matching
Contributions and Profit Sharing Accounts shall become
fully (100%) vested and nonforfeitable when the
Participant attains Normal Retirement Age while he is
still an Employee, or when he becomes Totally Disabled
or dies.
(2) With respect to a Participant who was a participant
in the Datron World Plan on February 1, 1998, the
effective date of that plan's merger into the Plan, all
amounts attributable to employer matching contributions
on behalf of the Participant for periods ending on or
before March 31, 1998 will remain fully (100%) vested
and nonforfeitable. If such a Participant would have
been credited with at least "three years of service
under the terms of the Datron World Plan by April 1,
1998, the Participant's entire Matching Contributions
Account balance shall at all times be fully (100%)
vested and nonforfeitable.
(3) Subject to subparagraph (2) above, if a Participant
ceases to be an Employee prior to attaining Normal
Retirement Age for any reason other than death or Total
Disability, the Participant's vested interest in his
Matching Contributions and Profit Sharing Accounts shall
be determined under the following schedule:
YEARS OF SERVICE VESTED
PERCENTAGE
1 0%
2 0%
3 20%
4 40%
5 60%
6 80%
7 100%
6.2 Forfeitures.
(a) Forfeiture on Termination. When a Participant
ceases to be an Employee, the non-vested portion of his
Matching Contributions and Profit Sharing Accounts shall
be forfeited. Such forfeited portion shall be valued as
of the valuation date coinciding with or immediately
preceding the date the Participant ceases to be an
Employee. If the Participant is not re-employed by the
last day of the Plan Year in which he ceased to be an
Employee, the forfeited portion of such Accounts shall
be allocated as of such day in accordance with Section
5.3(b).
(b) Reemployment Before Five One-Year Breaks in
Service. The following rules, as applicable, shall be
applied to any Participant who ceases to be an Employee
when he is not fully (100%) vested in his Matching
Contributions and Profit Sharing Accounts and who is re-
employed before he has five consecutive One-Year Breaks
in Service:
(1) If the Participant is re-employed by the last day
of the Plan Year in which he ceased to be an Employee,
the amount forfeited as a result of the termination of
his employment (and any earnings thereon) shall be
restored to the appropriate Plan Accounts maintained for
the Participant, and shall not thereafter constitute a
forfeiture.
(2) If the Participant is re-employed after the last
day of the Plan Year in which he ceased to be an
Employee, an amount equal to the amount forfeited as a
result of the termination of his employment (determined
as of the date thereof) shall be credited to the
appropriate Plan Accounts maintained for the
Participant.
(3) Except in the case of a Participant described in
subparagraph (4) below, the Participant's vested interest in his
Matching Contributions and Profit Sharing Accounts at
the time he subsequently ceases to be an Employee shall
be determined under Section 6.1(b), on the basis of his
total Years of Service before and after reemployment.
(4) If the Participant had received a distribution of
any of the vested portion of his Matching Contributions
and Profit Sharing Accounts by the date he was re-
employed, his vested interest in such Accounts at the
time he subsequently ceases to be an Employee shall be
determined in accordance with paragraph (d) of this
Section.
The amount credited to a Participant's Plan Accounts
pursuant to subparagraph (2) of this paragraph shall, to
the maximum extent possible, consist of a special
allocation of the forfeitures attributable to the Plan
Year in which the Participant is re-employed (and shall
correspondingly reduce the amount of forfeitures
otherwise available for allocation to other Participants
for such Plan Year). If the amount to be so credited is
greater than the forfeitures attributable to the Plan
Year in which the Participant is re-employed, his
Participating Employer shall make a special contribution
to the Plan equal to the difference between such
amounts, which shall be credited to the appropriate Plan
Accounts maintained for the Participant.
(c) Reemployment After Five One-Year Breaks in Service.
If a Participant is not fully (100%) vested in his
Matching Contributions and Profit Sharing Accounts when
he ceases to be an Employee and he is not re-employed
until after he has five consecutive One-Year Breaks in
Service, his reemployment and subsequent Years of
Service shall have no effect on, and shall not provide
the Participant with any interest in or right to, the
amount that was forfeited as a result of his previous
termination of employment.
(d) Subsequent Termination Before Becoming Fully
Vested. Notwithstanding any other provision of the
Plan, if a re-employed Participant described in
subparagraph (b)(4) of this Section subsequently ceases
to be an Employee before he is fully (100%) vested in
his Matching Contributions and Profit Sharing Accounts
(based on his total Years of Service before and after
reemployment), his vested interest in such Accounts
shall be an amount "X", determined under the following
formula: X = P (AB + D) - D. For purposes of applying
this formula: P is the Participant's vested percentage
at the time he subsequently ceases to be an Employee
(determined under Section 6.1(b) on the basis of his
total Years of Service before and after reemployment);
AB is the balance in the Participant's Matching
Contributions and Profit Sharing Accounts at the time he
subsequently ceases to be an Employee; and D is the
amount that was distributed to the Participant from his
Matching Contributions and Profit Sharing Accounts as a
result of his previous termination of employment.
(e) Suspension of Payment Upon Reemployment.
Notwithstanding any other provision of the Plan, if a
Participant is re-employed before he has received a
distribution of the portion of his Plan Accounts that
was vested at the time he ceased to be an Employee, the
amount that was distributable as a result of his
termination of employment shall not be distributed and
shall remain in the Participant's Plan Accounts until he
subsequently ceases to be an Employee.
(f) Special Definitions. For purposes of this Section,
the terms "employment", "reemployed" and "reemployment"
shall only refer to employment by the Company or any
Related Company.
7. INVESTMENT OF PLAN ASSETS
7.1 Options Available to Participants. Each
Participant shall have the authority and the
responsibility to exercise investment management and
control over his Plan Accounts. By issuing written
investment directions to the Administrative Committee on
the forms prescribed for such purpose, each Participant
shall direct the investment of his Plan Accounts among
those investment vehicles that the Administrative
Committee makes available to Participants under the
Plan. The Administrative Committee shall establish and
communicate in writing to Participants equitable and
nondiscriminatory rules governing the time, method,
effective date and other items it deems necessary for
making or modifying investment directions; provided that
Participants shall be allowed to modify their investment
directions at least once during each Quarter. Any
Participant's change of investment directions shall
apply to his existing account balances, and/or to his
future Deferred Pay Contributions and any future
Matching and Profit Sharing Contributions and
forfeitures allocated to his Plan Accounts, as the
Participant may elect.
7.2 No Investment in Securities of the Company or in
Real Estate Leased to the Company. The assets of the
Plan shall not be invested in any security issued by the
Company or any Related Company, or in any real property
(and related personal property) which is leased to the
Company, any Related Company, or any other "disqualified
person" with respect to the Plan, as that term is
defined in section 4975(e)(2) of the Code.
7.3 Certain Other Investments. Assets of the Plan
may be invested in deposits that bear a reasonable rate
of interest in a bank or similar financial institution
supervised by the United States or any state thereof,
without regard to whether such bank or financial
institution is the Trustee or another fiduciary with
respect to the Plan. Cash temporarily awaiting
investment or payment of benefits or expenses of the
Plan may be retained in non-interest bearing deposits or
cash balances in a bank or similar financial institution
supervised by the United States or any state thereof,
without regard to whether such bank or financial
institution is the Trustee or another fiduciary with
respect to the Plan.
8. DISTRIBUTION OF BENEFITS AND WITHDRAWALS
8.1 Amount of Plan Benefit.
(a) Normal Retirement Age, Total Disability or Death.
If a Participant ceases to be an Employee upon or after
attaining Normal Retirement Age, or as a result of Total
Disability or death at any age, the Participant (or, in
the case of his death, his Beneficiary) shall be
entitled to a Plan Benefit equal to 100% of the balance
of each of the Participant's Plan Accounts.
(b) Other Terminations. If a Participant ceases to be
an Employee before he has attained Normal Retirement Age
for any reason other than death or Total Disability, he
shall be entitled to a Plan Benefit equal to the sum of:
(1) 100% of the balance of his Deferred Pay Account,
Special Contribution Account (if any) and Rollover
Account (if any); plus
(2) The vested portion of the balance of his Matching
Contributions and Profit Sharing Accounts, determined
under Section 6.1(b)(2) and (3).
8.2 Time of Distribution.
(a) General Rules. Subject to paragraph (b) below and
to Section 8.6:
(1) If a Participant ceases to be an Employee after
attaining Normal Retirement Age, distribution of his
Plan Benefit shall automatically be made in the form of
a single lump sum distribution of cash as soon as
practicable following his termination of employment,
unless the Participant properly elects a different form
of distribution within 10 days after he ceases to be an
Employee, or properly elects, in accordance with
subparagraph (3) below, to defer the distribution or
commencement to a later date;
(2) If a Participant has not attained Normal Retirement
Age when he ceases to be an Employee, distribution of
his Plan Benefit shall be made or commenced as soon as
practicable following the date he files a written
election for distribution. If no such election is made
before the Participant attains Normal Retirement Age,
distribution of his Plan Benefit shall automatically be
made in the form of a single lump sum distribution of
cash as soon as practicable after the date the
Participant attains such Age, unless the Participant
properly elects a different form of distribution within
10 days after he attains such Age, or properly elects,
in accordance with subparagraph (3) below, to defer the
distribution or commencement to a later date; and
(3) Any Participant who ceases to be an Employee may
elect to have the distribution of his Plan Benefit made
or commenced on a deferred date specified in such
election. To be effective, any such election must be
filed within 10 days after the Participant ceases to be
an Employee.
(b) Special Provisions. Notwithstanding any other
provision of the Plan:
(1) If the total value of a Participant's Plan Accounts
does not exceed $5,000 on the valuation date coinciding
with or immediately preceding the date he ceases to be
an Employee (and never exceeded $5,000 at the time of
any prior distribution), his Plan Benefit shall be
distributed in a single lump sum distribution of cash as
soon as practicable after the date he ceases to be an
Employee; and
(2) A Participant's Plan Benefit shall be distributed
(or distribution thereof shall commence) by April 1 of
the calendar year following the calendar year in which
he attains age 70-1/2 if the Participant is a "5% owner"
(as defined in section 416(i)(1)(B)(i) of the Code).
8.3 Methods of Distribution. Except as otherwise
provided in Section 8.2, each Participant may elect to
have his Plan Benefit distributed in either, or a
combination, of a single lump sum distribution of cash,
or monthly, Quarterly, semiannual or annual cash
installments of a fraction of his Plan Benefit, over a
period of years that does not exceed the lesser of 15 or
the life expectancy of the Participant at the time
payments are to commence. Such fraction shall be 1/x,
with x being, in the case of the first installment, the
total number of payments to be made, and thereafter
declining by one for each successive payment. Each
Participant who was a participant in the Datron World
Plan on or before February 1, 1998 may also elect to
have his Plan Benefit distributed in in either, or a
combination, of the following additional methods of
distribution:
(a) Payments in monthly, Quarterly, semiannual or
annual installments of a fraction of his Plan Benefit,
over a period of years certain, as elected by the
Participant. Such fraction shall be 1/x, with x being,
in the case of the first installment, the total number
of payments to be made, and thereafter declining by one
for each successive payment. Such period shall be
determined by the Participant, provided that the period
shall not exceed the life expectancy of the Participant
or the joint life expectancy of the Participant and his
Beneficiary, such life expectancy to be determined as of
the time payments begin; and further provided that the
present value of any such periodic installment payments
expected to be made to the Participant shall be more
than 50 percent of the present value of the total of
such installments expected to be made to the Participant
and a Beneficiary who is not his spouse determined as of
the date such payments commence.
(b) A nontransferable annuity contract purchased from
an insurance company at a cost equal to his Plan Benefit
payable for his life with, if he is married on the
annuity starting date, a survivor's annuity for the life
of his spouse that is 50 percent of the amount of the
annuity payable during the joint lives of the
Participant and his spouse (unless he elects a higher
percentage not to exceed 100 percent).
8.4 Valuation of Accounts for Distribution. When a
Participant's Plan Benefit is to be distributed, his
Plan Accounts shall be valued as of the valuation date
coinciding with or immediately preceding the date of
distribution.
8.5 Distribution after Total Disability. A
Participant who is Totally Disabled may elect to receive
a distribution of all or any portion of the balance of
his Plan Accounts, whether or not he has ceased to be an
Employee. Any such distribution shall be made as soon
as practicable after the election is filed.
8.6 Distribution Pursuant to a Qualified Domestic
Relations Order. Notwithstanding any other provision of
the Plan, any or all of the vested portion of a
Participant's Plan Accounts may be distributed to a
spouse, former spouse, child or other dependent of the
Participant pursuant to the terms of a Qualified
Domestic Relations Order, without regard to the
Participant's age or the fact that he has not ceased to
be an Employee.
8.7 Withdrawal After Age 59 1/2. At any time after a
Participant has attained age 59 1/2, he may elect to
withdraw all or any portion of the vested portion of his
Plan Accounts, even though he has not ceased to be an
Employee. A withdrawal under this Section shall be paid
only in a single lump sum distribution of cash, and
shall be paid as soon as practicable after the
Participant's election is filed. A withdrawal under
this Section shall not prevent the Participant from
continuing to participate in the Plan; provided that the
Participant may make no more than one additional
withdrawal under this Section in each Plan Year after
the Plan Year in which the first such withdrawal is
made.
8.8 Withdrawals in the Event of Financial Hardship.
(a) General Rules. Upon written application to the
Administrative Committee and subject to its consent, any
Participant, without regard to his age, may withdraw
funds from the vested portion of his Plan Accounts to
satisfy an immediate and heavy financial need arising
solely from one or more of the following:
(1) Expenses for medical care described in section
213(d) of the Code previously incurred by the
Participant, his spouse, or any of his dependents (as
defined in section 152 of the Code), or necessary for
any such person to obtain such medical care;
(2) Costs directly related to the purchase of a
principal residence for the Participant (excluding
mortgage payments);
(3) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant, or his spouse, children or dependents (as
defined in section 152 of the Code);
(4) Payments that are necessary to prevent the eviction
of the Participant from his principal residence or
foreclosure on the mortgage on that residence; or
(5) Any other expense that automatically qualifies as
an immediate and heavy financial need under regulations,
rulings or notices of general applicability issued under
section 401(k) of the Code.
The amount of any hardship withdrawal under this Section
may not exceed the lesser of: (i) the amount of the
expense(s) described in subparagraphs (1)-(5) of this
paragraph, plus any amounts necessary to pay federal,
state or local income taxes or penalties reasonably
anticipated to result from the withdrawal; or (ii) the
value of the vested portion of the Participant's Plan
Accounts (determined as of the valuation date coinciding
with or immediately preceding the date of the
withdrawal), minus the amount of any earnings in his
Deferred Pay Account that accrue after March 31, 1989.
A Participant may not make a withdrawal under this
Section unless he has first obtained all withdrawals
(other than hardship withdrawals) and all nontaxable
loans available under any tax-qualified retirement plan
maintained by the Company or any Related Company.
(b) Consequences of Hardship Withdrawal. If a
Participant makes a hardship withdrawal under this
Section, he shall be suspended from participation in
this Plan, and in any other plan maintained by the
Company or any Related Company that requires or allows
employee contributions (other than a plan that is a
welfare benefit plan under ERISA), for a period of 12
months following his receipt of the withdrawal. In
addition, such a Participant shall not be permitted to
make Deferred Pay Contributions for the Plan Year
immediately following the Plan Year in which the
withdrawal was made in excess of the difference between:
(1) the applicable limit under section 402(g) of the
Code for the Plan Year following the Plan Year in which
the withdrawal was made; and (2) the amount of the
Participant's Deferred Pay Contributions during the Plan
Year the withdrawal was made. A Participant who is
suspended under this paragraph shall automatically
resume making Deferred Pay Contributions, at the rate
that was in effect when his suspension began, as of the
first day of the first pay period in the Quarter that
begins 12 months after the commencement of his
suspension (unless the Participant makes an election to
stop making Deferred Pay Contributions under Section
3.1(e)).
(c) Effect on Future Distributions. If a Participant
who is not fully (100%) vested in his Matching
Contributions and Profit Sharing Accounts makes a
hardship withdrawal from either of such Accounts under
this Section and subsequently ceases to be an Employee
before he has become fully (100%) vested in such
Accounts, such Participant's vested interest in such
Accounts at the time he ceases to be an Employee shall
be determined under the formula set forth in Section
6.2(d).
8.9 Loans to Employees. Subject to such uniform and
nondiscriminatory rules as the Administrative Committee
may adopt and upon written application to the
Administrative Committee, an Employee may borrow from
his vested Plan Accounts the amount necessary to satisfy
an immediate and heavy financial need described in
Section 8.8. The minimum amount of any loan shall be
$1,000. The maximum aggregate amount of any loans shall
be the lesser of: (a) $50,000, reduced by the highest
outstanding balance of all of the Employee's loans from
all qualified retirement plans maintained by the Company
or any Related Company during the 12-month period ending
on the day before the loan is made; or (b) 50% of the
value of the Employee's vested interest in his Plan
Accounts (determined at the time of the loan). All
loans granted under this Section:
(a) Shall be available to all Employees on a reasonably
equivalent basis;
(b) Shall be secured by 50% of the value of the
Employee's vested interest in his Plan Accounts at the
time of the loan;
(c) Shall be for a fixed term of no more than five
years;
(d) Shall bear interest at a rate comparable to the
rate then being charged by institutional lenders for
loans made under similar circumstances, but in no event
shall the rate of interest exceed the maximum allowed
under applicable law;
(e) Shall require substantially equal periodic payments
of principal and interest, with all such payments to be
made at least quarterly and collected through payroll
withholding if possible;
(f) Shall be payable in advance without penalty;
(g) Shall be evidenced by the Employee's promissory
note, which shall be in such form as required by the
Administrative Committee;
(h) Shall be treated as a segregated investment
allocable solely to the borrowing Employee's Plan
Accounts; and
(i) Shall be due and payable on the date the Employee
ceases to be an Employee, and the Administrative
Committee shall direct foreclosure on the security for
the repayment of the loan if the loan is not paid in
full within 60 days following such date.
8.10 Direct Benefit Transfers.
(a) General Rule. In addition to the distribution
rules and options set forth in the preceding provisions
of this Section 8, any Participant who is entitled to
receive an "eligible rollover distribution" shall be
permitted to elect to have such distribution made in the
form of a direct transfer from the Trustee of this Plan
to the trustee or custodian of any other "eligible
retirement plan." Any such election shall be made in
such form and at such time as the Plan Administrator may
prescribe in accordance with section 401(a)(31) of the
Code and the regulations promulgated thereunder.
(b) Special Definitions. For purposes of this Section:
(1) An "eligible rollover distribution" means any
distribution to a Participant of all or any portion of
the balance to the credit of the Participant under the
Plan, other than: (i) any distribution that is one of a
series of substantially equal periodic payments made
(not less frequently than annually) for the life (or
life expectancy) of the Participant, for the joint lives
(or joint life expectancy) of the Participant and his
Beneficiary, or for a specified period of 10 years or
more; (ii) any distribution (or portion of a
distribution) that is required to be made under section
401(a)(9) of the Code; or (iii) any distribution (or
portion of a distribution) that would not be includible
in the Participant's gross income (determined without
regard to the exclusion for net unrealized appreciation
in employer securities provided under section 402 of the
Code); and
(2) An "eligible retirement plan" means: (i) an
individual retirement account described in section
408(a) of the Code; (ii) an individual retirement
annuity described in section 408(b) of the Code (other
than an endowment contract); (iii) an annuity plan
described in section 403(a) of the Code; or (iv) a
qualified trust described in section 401(a) of the Code
that provides for the acceptance of eligible rollover
distributions.
9. DEATH BENEFITS AND BENEFICIARIES
9.1 Death Benefits. If a Participant dies before his
entire vested interest in the Plan has been distributed,
the undistributed portion of such interest shall be
distributed to the Participant's Beneficiary. The
Beneficiary may elect to receive the distribution in a
single lump sum distribution of cash or in cash
installments. Such distribution shall be made or
commenced as soon as practicable following the
Participant's death and shall be completed within five
years following the Participant's death; provided,
however, that, if installment payments to the
Participant had begun prior to his death, the
Beneficiary may elect to receive such payments over a
period not longer than the period previously selected by
the Participant.
9.2 Designation of Beneficiary. Each Participant
shall have the right to designate a Beneficiary or
Beneficiaries to receive any amount payable under the
Plan in the event of his death, and shall have the right
at any time to revoke such designation or to substitute
another such Beneficiary or Beneficiaries. No
designation made pursuant to this Section shall be
effective unless the Participant's spouse consents to
such designation in a writing that acknowledges the
effects of the designation and that is witnessed by a
representative of the Administrative Committee or by a
notary public. Such consent shall not be required if
the Beneficiary is the Participant's spouse, or if the
Administrative Committee is satisfied that it cannot be
obtained because there is no spouse, because the spouse
cannot be located, or for such other reasons as may be
authorized under applicable regulations issued by the
Secretary of the Treasury.
9.3 Absence of Valid Designation of Beneficiary. If
there is no valid designation of a Beneficiary on file
with the Administrative Committee upon the death of a
Participant, such Participant's Beneficiary shall be
deemed to be his surviving spouse, or if there is no
surviving spouse, his estate.
9.4 Direct Benefit Transfers.
(a) General Rule. In addition to the distribution
rules and options set forth in the preceding provisions
of this Section 9, any Beneficiary who is entitled to
receive an "eligible rollover distribution" shall be
permitted to elect to have such distribution made in the
form of a direct transfer from the Trustee of this Plan
to the trustee or custodian of any other "eligible
retirement plan." Any such election shall be made in
such form and at such time as the Plan Administrator may
prescribe in accordance with section 401(a)(31) of the
Code and the regulations promulgated thereunder.
(b) Special Definitions. For purposes of this Section:
(1) An "eligible rollover distribution" means a
distribution described in Section 8.10(b)(1) when the
word "Beneficiary" is substituted for the word
"Participant" each place it appears in such Section; and
(2) An "eligible retirement plan" means: (i) an
individual retirement account described in section
408(a) of the Code; or (ii) an individual retirement
annuity described in section 408(b) of the Code (other
than an endowment contract).
10. TRUST AND PAYMENT OF BENEFITS AND EXPENSES
10.1 Trust. All contributions to the Plan and all
other assets of the Plan shall be held in trust under
one or more trust agreements entered into between the
Company and a named trustee or, at the direction of the
Company, under an annuity contract that meets the
requirements of section 401(f) of the Code. Custody of
Plan assets shall at all times be retained by the
Trustee or a custodian appointed by the Trustee in its
discretion.
10.2 Payment of Benefits. All Plan Benefits shall be
paid from the Trust upon the direction of the
Administrative Committee, in accordance with the Plan
and the Trust Agreement.
10.3 Expenses of Plan Administration. All expenses
of administering the Plan, including the fees of the
Trustee (if any), shall be paid from the Trust, unless
the Company chooses to pay such expenses. Although the
members of the Administrative Committee shall receive no
compensation for serving on such Committee, they shall
be reimbursed from the Trust for all necessary and
proper expenses incurred in carrying out the duties of
the Administrative Committee under the Plan, unless the
Company chooses to pay such expenses.
11. ADMINISTRATION
11.1 Board of Directors.
(a) Powers, Duties and Responsibilities. The Board of
Directors shall have the following powers, duties and
responsibilities in connection with the administration
of the Plan:
(1) Amending or terminating the Plan;
(2) Appointing and removing the Trustee;
(3) Appointing and removing the members of the
Administrative Committee; and
(4) Periodically reviewing the performance of the
Trustee, the Administrative Committee, persons to whom
any of its duties and responsibilities have been
allocated or delegated pursuant to paragraph (b) of this
Section, and any advisers engaged pursuant to Section
11.5.
(b) Allocation and Delegation of Responsibilities.
The Board of Directors may, by written resolution,
allocate or delegate its powers, duties and
responsibilities to any other person or persons;
provided, however, that any such allocation or
delegation shall be terminable upon such notice as the
Board of Directors deems reasonable and prudent under
the circumstances.
11.2 Administrative Committee.
(a) Designation of Administrative Committee. The
Administrative Committee shall administer the Plan and
shall be the Plan "administrator" as such term is
defined in ERISA. The Administrative Committee shall be
comprised of three or more persons who shall be
appointed by the Board of Directors and who may be
removed by the Board of Directors at any time, with or
without cause. All members of the Administrative
Committee are designated as agents of the Plan for the
service of legal process. The Company shall certify to
the Trustee the names and specimen signatures of the
members of the Administrative Committee. Any member of
the Administrative Committee may resign at any time by
submitting an appropriate written instrument to the
Company, and while any vacancy exists, the remaining
member(s) may perform any act which the Administrative
Committee is authorized to perform. All decisions
required to be made by the Administrative Committee
involving the interpretation, application and
administration of the Plan shall be resolved by majority
vote either at a meeting or in writing without a
meeting.
(b) Administrative Powers, Duties and Responsibilities.
The Administrative Committee shall have the following
powers, duties and responsibilities in connection with
the administration of the Plan:
(1) Determining the eligibility of Employees for
participation in the Plan;
(2) Exercising its duties and responsibilities under
Section 3 with respect to Deferred Pay Contributions;
(3) Determining the eligibility of Employees for
benefits provided by the Plan and the amount of the
benefit to which any Employee is entitled hereunder,
including such powers, duties and responsibilities as
are necessary and appropriate under the Plan's claims
and review procedures;
(4) Maintaining Plan Accounts and such other records as
it may determine are necessary or appropriate in
connection with the operation and administration of the
Plan;
(5) Communicating with Participants and other persons
with respect to the Plan;
(6) Complying with the reporting and disclosure
requirements imposed under ERISA;
(7) Authorizing, allocating and reviewing expenses
incurred by the Plan;
(8) Assuring that the bonding requirements imposed
under ERISA are
satisfied;
(9) Establishing and carrying out a funding policy as
described in Section 11.4;
(10) Establishing appropriate procedures to prevent the
Plan from engaging in transactions described in
sections 406 and 407 of ERISA or section 4975(c) of the
Code;
(11) Periodically reviewing any allocation or
delegation of duties and responsibilities made pursuant
to paragraph (d) of this Section and the performance of
any advisers engaged pursuant to Section 11.5; and
(12) Making recommendations to the Board of Directors
with respect to amendment or termination of the Plan.
The Administrative Committee shall establish such rules
and regulations, and shall take such other actions as it
deems necessary or appropriate to carry out its duties
and responsibilities.
(c) Investment Powers, Duties and Responsibilities.
The Administrative Committee shall have the following
powers, duties and responsibilities in connection with
the investment of the assets of the Plan:
(1) Making decisions with respect to the investment
options that are made available to Participants under
the Plan and communicating such options to the
Participants;
(2) Formulating rules governing the investment
directions of Participants;
(3) Selecting and removing investment managers
appointed pursuant to Section 11.3;
(4) Selecting and removing any insurance company or
companies that issue any life insurance policies or
annuity contracts that are made available for the
investment of Plan assets or the distribution of Plan
Benefits; and
(5) Periodically reviewing the performance of the
Trustee, any investment manager that has been appointed
under Section 11.3 and any insurance company appointed
under subparagraph (4) above.
Based on its review under subparagraph (5) above, the
Administrative Committee shall determine the
desirability of appointing, retaining or removing
investment managers or insurance companies described
therein, and shall advise the Board of Directors of any
matters that the Administrative Committee deems relevant
to the decision as to whether to retain the Trustee.
(d) Allocation and Delegation of Responsibilities. The
Administrative Committee may, by written resolution,
allocate any of its powers, duties and responsibilities
to one or more of its members, or delegate any of its
powers, duties and responsibilities to any other person
or persons; provided, however, that any such allocation
or delegation shall be terminable upon such notice as
the Administrative Committee deems reasonable and
prudent under the circumstances.
11.3 Appointment of Investment Managers. The
Administrative Committee may transfer the actual
investment management and control of all or any portion
of the assets of the Trust from the Trustee to one or
more investment managers. Any investment manager
appointed hereunder shall have the power to manage,
acquire or dispose of assets of the Plan, and shall be
an investment adviser registered under the Investment
Advisers Act of 1940, a bank, as defined in that Act,
or an insurance company empowered under the laws of more
than one State to manage, acquire or dispose of assets
of the Plan.
11.4 Funding Policy. At reasonable intervals, the
Administrative Committee shall make (or cause to be
made) an analysis of the future cash requirements of the
Plan for payment of benefits and expenses, and shall
include (or have included) in the analysis such
information as may be appropriate to enable the Trustee
and any investment manager that has been appointed under
Section 11.3 to design an investment policy that will
satisfy such requirements. Each such analysis shall be
communicated to, and discussed with, the Trustee and
each such investment manager.
11.5 Engagement of Advisors. The Board of Directors,
the Company, the Administrative Committee, or any person
to whom duties and responsibilities hereunder have been
allocated or delegated, may engage other persons to
render advice in connection with their respective duties
and responsibilities, including plan consultants,
investment advisers, accountants, and attorneys (who may
be counsel to the Company).
11.6 Service in More than One Fiduciary Capacity. Any
person may serve in more than one fiduciary or other
capacity with respect to the Plan.
11.7 Indemnification. The Company shall indemnify
and hold harmless the members of the Administrative
Committee from and against any and all liabilities,
claims, demands, costs and expenses, including
attorney's fees, arising out of an alleged breach in the
performance of its fiduciary duties under the Plan and
under ERISA, other than such liabilities, claims,
demands, costs and expenses as may result from willful
misconduct. The Company shall have the right, but not
the obligation, to conduct the defense of any member of
the Administrative Committee in any proceeding to which
this Section applies. In lieu of the foregoing, the
Company may satisfy its obligations under this Section
through the purchase of a policy or policies of
insurance providing equivalent protection.
12. CLAIMS AND REVIEW PROCEDURES
12.1 Claims Procedure.
(a) General Rule. The Administrative Committee shall
determine Participants' and Beneficiaries' rights to
benefits under the Plan. If a Participant or
Beneficiary disagrees with the Administrative
Committee's determination, he may file a written claim
for benefits with the Administrative Committee, provided
the claim is filed within 60 days of the date the
Participant or Beneficiary receives notification of the
determination.
(b) Notice if Claim is Denied. If any claim for
benefits is wholly or partially denied, the
Administrative Committee shall provide the claimant with
a notice of denial, written in a manner calculated to be
understood by the claimant and setting forth:
(1) The specific reason(s) for the denial;
(2) Specific references to the Plan provisions on which
the denial is based;
(3) A description of any additional material or
information necessary for the claimant to perfect the
claim, with an explanation of why the material or
information is necessary; and
(4) An explanation of the steps to be taken if the
claimant wishes to submit the claim for review.
A notice of denial shall be provided within 90 days
after the claim is filed, unless special circumstances
require an extension of time for processing the claim.
If an extension is required, written notice shall be
furnished to the claimant within 90 days of the date the
claim was filed, stating the special circumstances
requiring the extension and the date by which a
decision on the claim can be expected, which shall be no
more than 180 days from the date the claim was filed.
If no notice of denial or of the fact that an extension
of time is necessary for processing a claim is provided
within the time prescribed in this paragraph, the claim
shall be deemed to have been denied as of the last day
of the applicable period, and the claimant may appeal
such denial in accordance with the procedure for review
of denied claims set forth in Section 12.2 below.
12.2 Review Procedure.
(a) Request for Review. Any person whose claim for
benefits is denied (or deemed denied), in whole or in
part, or such person's duly authorized representative,
may appeal from such denial by submitting a written
request for a review of the claim to the Administrative
Committee within 60 days after receiving written notice
of the denial (or, in the case of a deemed denial,
within 60 days after the claim is deemed denied). The
Administrative Committee shall give the claimant or
representative an opportunity to review pertinent Plan
documents in preparing a request for review. A request
for review shall set forth all of the grounds on which
it is based, all facts in support of the request and any
other matters the claimant deems pertinent. The
Administrative Committee may require the claimant to
submit such additional facts, documents or other
material as it may deem necessary or appropriate in
making its review.
(b) Time for Response. The Administrative Committee
shall act on each request for review within 60 days
after receipt thereof, unless special circumstances
require an extension of time, up to an additional 60
days, for processing the request. If such an extension
is required, written notice of the extension shall be
furnished to the claimant within the initial 60-day
period.
(c) Notice of Decision on Review. The Administrative
Committee shall give prompt, written notice of its
decision to the claimant. In the event the
Administrative Committee affirms the denial of the claim
for benefits, in whole or in part, such notice shall set
forth, in a manner calculated to be understood by the
claimant, specific reasons for the denial and specific
references to the Plan provisions on which the decision
is based.
13. AMENDMENT AND TERMINATION
13.1 Amendment. The Board of Directors reserves the
right to amend the Plan at any time and for any reason,
in whole or in part, including without limitation,
retroactive amendments necessary or advisable to qualify
the Plan and Trust under the provisions of section
401(a) and 401(k) of the Code. However, no such
amendment shall: (a) cause any part of the assets of the
Plan to revert to or be recoverable by the Company or
any Related Company or be used for or diverted to
purposes other than the exclusive purposes of providing
benefits to Participants and Beneficiaries and paying
the reasonable expenses of administering the Plan; (b)
deprive any Participant or Beneficiary of any benefit
already vested; (c) alter, change or modify the duties,
powers or liabilities of the Trustee hereunder without
its written consent; (d) permit any part of the assets
of the Plan to be used to pay premiums or contributions
of the Company or any Related Company under any other
plan maintained by the Company or any Related Company
for the benefit of its Employees; or (e) eliminate an
optional form of distribution with respect to benefits
accrued before the amendment. No amendment to the
vesting schedule of the Plan shall provide that the
vesting percentage of the Plan Benefit of an Employee
who is a Participant in the Plan on the date the
amendment is adopted or effective, whichever is later,
shall be less than the vesting percentage of such
Participant's Plan Benefit (determined as of such date)
computed without regard to such amendment. Further, no
amendment to the vesting schedule of the Plan shall
reduce the rate of vesting with respect to future
vesting of any such Participant with at least three
Years of Service.
13.2 Termination, Partial Termination, or Complete
Discontinuance of Contributions. The Company has
established the Plan with the bona fide intention and
expectation that it will be continued indefinitely.
However, the Company shall not be under any obligation
or liability to continue its contributions to the Plan,
or to otherwise maintain the Plan, for any given length
of time, and the Board of Directors may terminate the
Plan at any time and for any reason, in its sole and
absolute discretion, without any liability for such
termination. The board of directors of any other
Participating Employer may, in its sole and absolute
discretion, terminate the Plan with respect to its
Employees at any time and for any reason, without any
liability for such termination. If the Plan shall be
terminated or partially terminated, or if contributions
to the Plan are completely discontinued, the Plan
Accounts of all affected Participants shall become fully
(100%) vested and nonforfeitable, and the Trust shall
continue until all affected Participants' accounts have
been completely distributed to or for the benefit of the
Participants in accordance with the Plan.
14. MISCELLANEOUS
14.1 No Effect on Employment Relationship. Neither
the establishment of the Plan and the Trust nor any
modification thereof, nor the creation of any investment
fund or Plan Account, nor the payment of any benefits
hereunder, shall be construed as modifying or affecting
in any way the terms of employment of any Employee, and
shall not affect any Participating Employer's right to
terminate the employment of any of its Employees, with
or without cause.
14.2 Mergers and Transfer of Assets.
(a) Merger of the Company. If the Company merges or
consolidates with or into another corporation, or if
substantially all of the assets of the Company shall be
transferred to another corporation, the Plan shall
terminate on the effective date of such merger,
consolidation or transfer; provided, however, that, if
the surviving corporation resulting from such merger or
consolidation, or the corporation to which the assets
have been transferred, adopts this Plan, the Plan shall
continue and said corporation shall succeed to all
rights, powers and duties of the Company hereunder. The
employment of any Employee who is continued in the
employ of such successor corporation shall not be deemed
to have been terminated for any purpose hereunder.
(b) Merger of the Plan or Transfer of Assets. In no
event shall this Plan be merged or consolidated with any
other employee benefit plan, nor shall there be any
transfer of assets or liabilities from this Plan to any
other such plan, unless immediately after such merger,
consolidation or transfer, each Participant's benefits,
if such other plan were then to terminate, would be at
least equal to the benefits to which the Participant
would have been entitled had this Plan been terminated
immediately before such merger, consolidation, or
transfer.
14.3 Prohibition Against Assignment. Except in
accordance with the terms of a Qualified Domestic
Relations Order and with respect to loans to Employees
under Section 8.9:
(a) The benefits provided by this Plan shall not be
assigned, transferred, mortgaged, pledged, hypothecated
or otherwise alienated by any Participant or
Beneficiary, and neither the Company nor the Trustee
shall recognize any attempted assignment, transfer,
mortgage, pledge, hypothecation or other alienation by
any Participant or Beneficiary of all or any part of his
interest hereunder; and
(b) The interest of any Participant or Beneficiary in
any benefits provided hereunder shall not be subject in
any manner to transfer by operation of law and shall be
exempt from the claims of creditors or other claimants
under any order, decree, levy, garnishment, execution or
other legal or equitable process or proceeding, to the
fullest extent permitted by law.
14.4 Permissible Reversions.
(a) General Rules. Notwithstanding any other provision
of the Plan:
(1) To the extent any contribution to the Plan is made
by reason of a mistake of fact, it may be returned to
the appropriate Participating Employer within one year
from the date of the contribution;
(2) All contributions to the Plan are hereby
conditioned on their deductibility under section 404 of
the Code, and to the extent such deduction is
disallowed, any contribution may be returned to the
appropriate Participating Employer within one year from
the date of the disallowance; and
(3) Upon termination of the Plan, any amount held in a
suspense account established under Section 5.4(d) may be
returned to the appropriate Participating Employer to
the extent such amount may not then be allocated to any
Participant's Plan Accounts.
(b) Treatment of Earnings/Losses. The amounts which
may be returned to a Participating Employer pursuant to
paragraph (a) of this Section shall be the excess of the
amounts contributed over the amounts that would have
been contributed had there not been a mistake of fact or
disallowance of deduction, as applicable. No earnings
on the mistaken or non-deductible contributions may be
returned to a Participating Employer, and losses
sustained by the Trust after the date of contribution
shall proportionately reduce the amount that may be
returned to a Participating Employer hereunder.
14.5 Masculine/Feminine; Singular/Plural. Wherever
used herein, the masculine gender shall include the
feminine, and the singular number or tense shall include
the plural.
14.6 Missing Participant or Beneficiary. If, after
reasonable efforts to do so, the Administrative
Committee is unable to locate any person to whom a
benefit is payable hereunder, the benefit payable to
such person shall be forfeited. If such person has not
been located by the last day of the Plan Year in which
such forfeiture occurs, the amount forfeited shall be
allocated as of such day in accordance with Section
5.3(b). Any benefit that has been forfeited pursuant to
this Section shall be restored and distributed if such
person provides the Administrative Committee with his
current address and any other information such Committee
determines is necessary or desirable in connection with
the restoration and distribution of the forfeited
amount. Any restoration of benefits required under this
Section shall be made in the manner described in the
last two sentences of Section 6.2(b).
14.7 Notices and Elections. Any notice, election or
designation required or permitted by Participants shall
be made on the form prescribed for such purpose by the
Administrative Committee. Except as otherwise provided
in the Plan, any notice, election or designation by a
Participant must be filed with the Administrative
Committee.
14.8 Top Heavy Rules.
(a) When Applicable. For any Plan Year the Plan is a
Top-Heavy Plan, the provisions of this Section shall
supersede any conflicting provisions in the Plan.
(b) Definition of Top-Heavy Plan. The Plan is a "Top-
Heavy Plan" for any Plan Year if, as of the
Determination Date for such Plan Year, the Top-Heavy
Ratio for the Aggregation Group exceeds 60%.
(c) Minimum Allocation. Except as provided in
paragraph (d) of this Section, for each Plan Year the
Plan is a Top-Heavy Plan, the Matching Contributions,
Profit Sharing Contributions, forfeitures and any
special contribution made pursuant to Section 3.5
allocated on behalf of each Participant who is not a Key
Employee and who is employed by the Company or any
Related Company on the last day of the Plan Year shall
not be less than the lesser of: (1) 3% of such
Participant's Covered Compensation; or (2) the highest
percentage of any Key Employee's Covered Compensation
that is provided by Deferred Pay Contributions, Matching
Contributions, Profit Sharing Contributions and
forfeitures allocated to such Key Employee under the
Plan for that Plan Year, unless the Participant is also
a participant in a "defined benefit plan" (as defined in
section 414(j) of the Code) to which contributions have
been made by the Company or any Related Company, in
which case the minimum allocation shall not be less than
5% of such Participant's Covered
Compensation.
(d) Minimum Benefit Under Other Plan. Paragraph (c) of
this Section shall not apply to any Participant who
participates in any other plan maintained by the Company
or any Related Company that is qualified under section
401(a) of the Code and provides that the minimum
allocation and vesting requirements of section 416 of
the Code shall be met therein.
(e) Effect on Combined Plan Limitation. For any Plan
Year the Plan is a Top-Heavy Plan, the "defined benefit
plan fraction" and the "defined contribution plan
fraction" (as defined in section 415(e) of the Code)
shall be computed, for purposes of Section 5.4(c), by
substituting "1.0" for "1.25" each place it appears in
section 415(e) of the Code; provided that such
substitution shall not have the effect of reducing any
Participant's accrued benefit under the Plan, determined
as of the last day of the Plan Year immediately
preceding the first Plan Year the Plan is a Top-Heavy
Plan.
(f) Special Definitions. The following terms are
defined for purposes of this Section:
(1) "Aggregation Group" shall mean the following group
of plans that are maintained by the Company or any
Related Company and are qualified under section 401(a)
of the Code:
(i) Each plan in which at least one Key Employee
participates (a "Key Plan"), plus each other plan that
enables a Key Plan to meet the requirements of section
401(a)(4) or 410 of the Code; or
(ii) At the Administrative Committee's election, all
plans described in (i) above, plus any other plan or
plans that meet the requirements of sections 401(a)(4)
and 410 of the Code when considered together with the
plans described in (i) above.
(2) "Determination Date" shall mean, for any Plan Year,
the last day of the preceding Plan Year.
(3) "Key Employee" shall mean a "key employee" as
defined in section 416(i) of the Code and the
regulations promulgated thereunder.
(4) "Top-Heavy Ratio" shall mean the "top-heavy ratio"
of the Aggregation Group, computed in accordance with
section 416(g) of the Code and the regulations
promulgated thereunder. Notwithstanding the foregoing:
(i) the accrued benefit of any Employee who has not
performed any services for the Company or any Related
Company during the five-year period ending on the
Determination Date shall be included in the
determination of the Top-Heavy Ratio in accordance with
section 416(g)(4)(E) of the Code; (ii) rollover
contributions shall be taken into account in accordance
with section 416(g)(4)(A) of the Code; (iii)
distributions from terminated plans shall be included in
accordance with section 416(g)(3) of the Code; and (iv)
the accrued benefit of any Employee who is not a Key
Employee for the current Plan Year, but was a Key
Employee for any prior Plan Year, shall be treated in
accordance with section 416(g)(4)(B) of the Code.
14.9 Rollovers and Direct Transfers from Other Plans.
(a) In General. Notwithstanding any other provision of
the Plan, the Trustee is authorized to accept a rollover
contribution from any Participant, if such contribution
is described in section 402(c)(1), 403(a)(4) or
408(d)(3) of the Code, or a direct transfer of an
eligible rollover distribution described in section
401(a)(31) of the Code. The receipt of a rollover
contribution or a direct transfer of assets under this
Section shall be subject to the following conditions:
(1) No rollover or direct transfer may be in an amount
less than $500;
(2) All rollovers and direct transfers must be made in
cash or other property approved by the Administrative
Committee; and
(3) No amount may be rolled over or transferred
directly to the Plan without the prior written consent
of the Administrative Committee.
(b) Credited to Rollover Account. Any amount rolled
over or transferred directly to this Plan pursuant to
paragraph (a) of this Section shall be credited to a
Rollover Account established for the Participant who
made the rollover contribution or directed the transfer
to be made.
(c) Investment of Rollover Accounts. Amounts credited
to a Participant's Rollover Account pursuant to
paragraph (b) of this Section shall be invested in
accordance with his investment directions given pursuant
to Section 7.
(d) Distribution of Rollover Accounts. A Participant's
Rollover Account shall be distributed at the same time,
in the same manner and to the same persons as the rest
of his Plan Accounts.
14.10 Compliance with Section 401(a)(9) of the
Code. Notwithstanding any other provision of the Plan
to the contrary, all distributions from the Plan shall
be made in accordance with section 401(a)(9) of the Code
and the regulations promulgated thereunder, including
the minimum distribution incidental death benefit
requirements of such regulations.
14.11 Benefits for Certain Reemployed Participants Who
Return from Military Service. Notwithstanding any
provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified
military service will be provided in accordance with
section 414(u) of the Code.
14.12 Applicable Law and Severability.
(a) Applicable Law. The Plan shall be construed,
administered and governed in all respects in accordance
with ERISA, and, to the extent not preempted by ERISA,
the laws of the State of California; provided, however,
that if any provision is susceptible of more than one
interpretation, the interpretation given thereto shall
be consistent with the Plan being a "qualified" plan
within the meaning of sections 401(a) and 401(k) of the
Code.
(b) Severability. If any provision of the Plan shall
be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
TO RECORD THE ADOPTION OF THIS AMENDMENT AND RESTATEMENT
OF THE PLAN, the Company has caused this document to be
executed by its duly authorized officer this 28th day of
September, 1998.
DATRON SYSTEMS INCORPORATED
By: /s/ WILLIAM L. STEPHAN