NICHOLS RESEARCH CORPORATION
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
Between
NICHOLS RESEARCH CORPORATION
and
MICHAEL J. MRUZ
Dated: December 16, 1997
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
THIS SUPPLEMENTAL RETIREMENT BENEFIT PLAN (the "Plan") is
made and entered into this 16th day of December, 1997, by and
between NICHOLS RESEARCH CORPORATION, a Delaware corporation,
having its principal place of business at 4040 South Memorial
Parkway, Huntsville, Alabama (the "Company") and MICHAEL J. MRUZ,
residing in the City of Huntsville, Alabama (the "Employee").
W I T N E S S E T H:
The Company adopted a defined contribution plan containing a
cash or deferred arrangement which plan is known as the Nichols
Research Corporation 401(k) Plan (the "401(k) Plan").
Contributions to the 401(k) Plan by and on behalf of participants
are based, in part, on the compensation received by such
participants. Under Section 404(l) of the Internal Revenue Code
of 1986 (the "Code"), the amount of compensation which may be
taken into account is limited to $150,000, plus cost-of-living
increases (the "Section 404 Limit"). The Employee's compensation
is expected to exceed the Section 404 Limit, and accordingly, the
amount contributed to the 401(k) Plan for the Employee's benefit
is limited. The Company desires to supplement the Employee's
retirement benefits by contributing to a nonqualified retirement
plan for the benefit of the Employee.
THEREFORE, to provide the Employee with additional incentive
and to supplement the deferred compensation benefits payable to
the Employee, the Company hereby adopts this Plan and the parties
agree as follows:
1. The Company shall supplement the Company provided
benefits available under the 401(k) Plan by crediting to a book
reserve or deferred compensation account during the period of
Employee's employment by the Company commencing September 1,
1997, a sum equal to seven percent (7%) of the Employee's
compensation for each such fiscal year above the Section 404
Limit. For this purpose, compensation shall mean all taxable
wages reported on Form W-2.
2. The amount credited to the deferred compensation
account as provided in Section 1 above shall be paid to the
trustee under that certain agreement of trust between the Company
and Fidelity Management Trust Company, dated as of the date
hereof and shall be held, administered and disposed in accordance
with such trust. Any appreciation or depreciation with respect
to the funds invested in accordance with the trust shall be
credited or charged to the Employee's deferred compensation
account. The Employee shall assume the risk of diminution in the
value of his deferred compensation account in the event any
invested funds depreciate in value. Nothing contained in this
Plan and no action taken pursuant to the provisions of this Plan
shall create or be construed to create a fiduciary relationship
between the Company and the Employee or any other person. Any
funds which may be invested under the provisions of this Plan
shall continue for all purposes to be part of the general funds
of the Company and no person other than the Company by virtue of
the provisions of this Plan shall have any interest in such
funds. To the extent that any person acquires the right to
receive payments from the Company under this Plan, such rights
shall be no greater than the right of any unsecured general
creditor of the Company. The trust referred to above (and any
amendment thereof) shall conform in all material respects to the
terms and provisions of the model trust described in Revenue
Procedure 92-64 adopted by the Internal Revenue Service. It is
the intention of the parties that the Plan constitute an unfunded
deferred compensation plan for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974.
3. The benefit to be paid as deferred compensation shall
be as follows:
(a) Commencing one month after termination of employ
ment and for the next 120 months thereafter, the Company shall
pay or cause to be paid to Employee an amount equal to the quo
tient of the fair market value of his deferred compensation
account as of the end of each month divided by 120 less the
number of full months since termination of employment. The
balance of his deferred compensation account shall be paid to the
Employee 120 months after termination of employment. The total
amount payable to the Employee shall be increased or decreased as
the case may be, to reflect the appreciation or depreciation in
value of the deferred compensation account which remains
invested. Notwithstanding the foregoing, the Board of Directors
of the Company shall have the right in its discretion to
accelerate the installment payments due hereunder and may make
such distribution in lump sum or over a shorter period of time
than 120 months as it may find appropriate.
(b) If the Employee should die before the entire
supplemental benefit has been credited, the Company shall be
obligated to pay the balance of the benefits due hereunder. If
the Employee should die prior to termination of his employment or
after termination of his employment but before his entire
deferred compensation account has been paid to him, the unpaid
benefit due hereunder will be paid in a lump sum to a beneficiary
or beneficiaries designated in writing to the Company by the
Employee. If no designation of beneficiary has been made by the
Employee, or if such designation has been revoked, the unpaid
balance shall be paid to the Employee's estate.
(c) The right of the Employee to payments under this
Plan shall be fully vested and nonforfeitable at all times. The
right of Employee or any other person to the payment of deferred
compensation or other benefits under this Plan shall not be
subject in any manner to anticipation, alienation, sale, trans
fer, assignment, pledge, encumbrance, attachment or the garnish
ment by creditors of the Employee or the Employee's beneficiary.
(d) If the Board of Directors shall determine that
the Employee is unable to care for his affairs because of any
physical or mental impairment, any payment due (unless a
prior claim therefore shall have been made by a duly
appointed guardian, conservator or other legal representative)
may be paid to or for the benefit of the Employee in such
manner as the Board may determine. Any such payment shall be
in complete discharge of the liabilities of the Company under
this Plan.
4. Nothing contained herein shall be construed as confer
ring upon the Employee the right to continue in the employ of the
Company as an executive or in any other capacity.
5. Any deferred compensation payable under this Plan shall
not be deemed salary or other compensation to the Employee for
the purpose of computing benefits to which he may be entitled
under any other pension plan or other deferred compensation
arrangement of the Company for the benefit of its employees.
6. The Board of Directors of the Company shall have full
power and authority to interpret, construe and administer this
Plan and the Board's interpretation and construction thereof, and
actions thereunder, including any valuation of the deferred
compensation account, or the amount or recipient of the payment
to be made therefrom, shall be binding and conclusive upon all
persons for all purposes. No member of the Board shall be liable
to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan unless
attributable to willful misconduct. The Company shall indemnify
and hold harmless the members of the Board of Directors against
any liability or threatened liability, including attorneys' fees,
court costs, and damages, related or in any manner connected with
decisions and actions or inactions taken by such Board member in
connection with the Plan, except for such Board member's willful
misconduct.
7. This Plan shall be binding upon and inure to the bene
fit of the Company, successors and assigns, and the Employee, his
heirs, executors, administrator and legal representatives.
8. This Plan shall be construed in accordance with and
governed by the laws of the State of Alabama.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its duly authorized officers and the Employee has
hereunto set his hand and seal as of the date and year first
above written.
NICHOLS RESEARCH CORPORATION
By /s/ Patsy L. Hattox
-----------------------
Its Corporate Secretary
/s/ Michael J. Mruz
------------------------
MICHAEL J. MRUZ, Employee