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11 September 1995
CUBIC APPLICATIONS, INC.
401(K) RETIREMENT PLAN
Amended and Restated
Effective April 8, 1994
THE CUBIC APPLICATIONS, INC.
401(k) RETIREMENT PLAN
INTRODUCTION
The Cubic Applications, Inc. 401 (k) Retirement Plan (the "Plan") as described
herein is established for the benefit of Cubic Applications, Inc. employees. The
Plan was established as a continuation of the Titan Corporation 401(k)
Retirement Plan (as amended from time to time) for certain Titan Systems, Inc.
employees (affected by the sale of a portion of Titan Corporation to Cubic
Corporation) and Cubic Applications, Inc. employees.
The provisions of the Plan are subject to a determination by the Internal
Revenue Service that the Plan is qualified under Section 401 (a) of the Internal
Revenue Code of 1986, as amended. It is further intended that the Plan also
conform to the requirements of Title I of the Employee Retirement Income
Security Act of 1974, as amended from time to time.
ARTICLE 1
Definitions
Whenever used herein, the following words and phrases shall have the meaning
specified below. Additional words and phrases may be defined in the text of the
Plan.
1.1 "Accounts" shall mean, with respect to any Participant, Participant's
Deferral Account, Voluntary Contributions Account, Employer
Discretionary Contribution Accounts, Employer Matching Contributions
Account, Rollover/transfer Account, and shall, as to each such
Account, include any subaccount established thereunder.
1.2 "Adjusted Factor" shall mean the cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Code Section 415(d),
as applied to the items and int he manner prescribed by the Secretary
of the Treasury.
1.3 "Average Contribution Percentage" shall mean the average (expressed as
a percentage) of the Contribution Percentages of every individual in
the Highly Compensated Employee group of the Non-highly Compensated
Employee group, as the case may be.
1.4 "Average Deferral Percentage" shall mean the average (expressed as a
percentage) of the Deferral Percentages of every individual in the
Highly Compensated Employee group or the Non-highly Compensated
Employee group as the case may be.
1.5 "Beneficiary" shall mean the person or persons, entity or entities
(including a trust(s)), or estate that shall be entitled to receive
benefits payable pursuant to the provisions of Section 2.5 by virtue
of a Participant's death.
1.6 "Board" shall mean the board of Directors of Cubic Corporation.
1.7 "Break in Service" shall mean a Period of Severance of not less than
twelve (12) consecutive months in which an Employee is credited with
500 Hours of Service or less. An Employee shall not be deemed to have
incurred a one-year Break in Service if the Employee is absent from
Service because of an authorized leave of absence granted in writing
for medical, disability, vacation, education, or such other
circumstances either mandated by federal law or approved by the
Committee in a uniform and nondiscriminatory manner.
In the case of an Employee who is absent from work for any period on
or after the first day of the first Plan Year beginning after December
31, 1984, by reason of:
(a) The pregnancy of the Employee,
(b) The birth of a child of the Employee,
(c) The placement of a child with the Employee in connection with the
adoption of such child by the Employee, or
(d) The care of a child for a period beginning immediately following
such birth or placement,
the Plan shall include, solely for purposes of determining whether the
Employer has incurred a one-year Break in Service, the Hours of
Service that would normally have been credited to the Employee but for
such absence, or in any case in which the Committee is unable to
determine the Hours of Service that would normally have been credited
to the Employee, eight (8) Hours of Service per day of absence,
provided, however, that the total number of hours treated in this
manner as Hours of Service shall not exceed 501 Hours of Service. The
hours described in the preceding sentence shall be credited in the
Plan Year in which the absence from work begins if the Employee would
be prevented from incurring a one-year Break in Service in such period
solely because the period of absence is treated as Hours of Service as
described above. Otherwise, the Hours of Service shall be credited on
behalf of the Employee in the immediately following Plan Year.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.9 "Committee" shall mean the committee of individuals appointed by the
Board to be responsible for the operation and administration of the
Plan.
1.10 "Compensation" shall mean all compensation paid by the Employer or
Participating Employer in cash to an Employee during the Plan Year,
and shall include Deferral Contributions described in Section 3.1 and
amounts contributed on the Participant's behalf pursuant to Code
Section 125, by reason of services performed while an Employee.
Compensation shall not include amounts paid to the Employee for any
reason other than as compensation for the performance of services,
such as expense reimbursements, any amounts designated by the Board as
amounts to be excluded from compensation for purposes of the Plan, or
any compensation paid by reason of services performed before the date
the Employee became a Participant. Notwithstanding the foregoing, for
Plan Years beginning after December 31, 1988, Compensation shall
exclude amounts in excess of two hundred thousand dollars ($200,000)
except as such limit is adjusted for cost of living in accordance with
the provisions of Code Section 401(a)(17). In determining the
Compensation of a Participant for purposes of this limitation, the
rules of Code Section 414(q)(6) shall apply, except in applying such
rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules the adjusted two hundred thousand dollars
($200,000) limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this Section prior to
the application of this limitation. Notwithstanding the above
provisions to the contrary, compensation earned but not paid in a Plan
Year may include amounts earned but not paid in a Plan Year because of
the timing of pay periods and pay days if such amounts are paid during
the first few weeks of the next following Plan Year, the amounts are
included on a uniform and consistent basis with respect to all
similarly situated Employees, and no Compensation is included in more
than one Limitation Year. If compensation for any prior Plan Year is
taken into account in determining a Participant's benefits for the
current year, the Compensation for such prior year is subject to the
applicable annual compensation limit in effect for that prior Plan
Year. If compensation for any prior Plan Year is taken into account in
determining a Participant's benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior Plan Year. For this
purpose, for years beginning before January 1, 1990, the applicable
annual compensation limit is two hundred thousand dollars ($200,000).
Notwithstanding the foregoing, effective for Plan Years commencing on
or after January 1, 1994, the applicable annual compensation limit is
one hundred and fifty thousand dollars ($150,000), as indexed for cost
of living in accordance with Code Section 401(a)(17).
1.11 "Contribution Percentage" shall mean the ratio of the Employer
Matching Contributions under Section 3.4 made to the Plan on behalf of
the Participant for the Plan Year to the Participant's Compensation,
including Deferral Contributions, as defined in Code Section 414(s)
for such Plan Year.
1.12 "Deferral Contributions" shall mean contributions paid to the Trustee
by the Participating Employer at the election of a Participant in lieu
of cash Compensation pursuant to Section 3.1.
1.13 "Early Retirement Age" shall mean the date on which the Participant
has attained age fifty- five (55) and completed at least five Years of
Service.
1.14 "Effective Date" shall mean April 8, 1994.
1.15 "Eligible Employee" shall mean every employee other than:
(a) A leased Employee (within the meaning of Code Section 414(n)(2));
(b) A nonresident alien with no U.S. source earned income; or
(c) A person whose employment is covered by a collective bargaining
agreement to which the Employer or a Related Employer is a party
if retirement benefits were (or are presumed to have been) the
subject of good faith bargaining between the Employer (or Related
Employer) and the collective bargaining representative, unless
the collective bargaining agreement provides for coverage under
this Plan.
(d) The Employee of a Related Employer which is not a Participating
Employer.
(e) An Employee of a group, division, or other classification
designated by the Board as ineligible to participate in the Plan.
1.16 "Employee" shall mean an individual employed by the Employer or a
Related Employer, any portion of whose income is subject to
withholding of income tax and/or for whom Social Security
contributions are made by the Employer or a Related Employer, as well
as any other individual qualifying as a common-law employee of the
Employer or a Related Employer. For purposes of determining the number
or identity of Highly Compensated Employees and for purposes of the
requirements of Code Section 414(n)(3), "Employee" includes "leased
employees" as defined in Code Section 414(n)(2). If, however, such
leased employees constitute less than twenty percent (20%) of the
Employer's non-highly compensated work force within the meaning of
Code Section 414(n)(5)(C)(ii), "Employee" shall not include those
leased employees covered by a plan described in Code Section
414(n)(5).
1.17 "Employer" shall mean Cubic Applications, Inc., and any other
Affiliated Employer that, with the consent of the Board, shall adopt
this Plan for some or all of its Eligible Employees. "Employer" when
used in this Plan shall refer to such adopting entities either
individually or collectively, as the context may require.
1.18 "Employer Matching Contribution" shall mean Employer contributions
made pursuant to Section 3.4 of the Plan.
1.19 "Employment Commencement Date" shall mean the date on which an
Employee is first credited with an Hour of Service.
1.20 "Entry Date" shall mean the first day of the payroll period coincident
with or immediately following January 1 and July 1 in every calendar
year during which the Plan is in effect, or such date as is
administratively feasible thereafter.
1.21 "ERISA" shall mean the Employee Retirement Income Security Act of 1974
(Public Law Section 93-406), as amended from time to time.
1.22 "Excess Aggregate Deferrals" shall mean with respect to any Plan Year,
the excess of the aggregate amount of Employer Matching Contributions
under Section 3.4 made for Highly Compensated Employees for such Plan
Year, over the maximum amount of such Contributions permitted under
the limitations of Code Section 401(m)(2)(A).
1.23 "Excess Compensation" shall mean all of a Participant's Compensation
as defined in Section 1.10 for a particular calendar year in excess of
the maximum amount of Compensation that may be considered as "wages"
under Code Section 3121(a) for that particular calendar year. In
determining whether any portion of an Employee's Compensation
constitutes Excess Compensation, amounts paid to an Employee while he
was not a Participant in this Plan shall not be taken into account.
1.24 "Excess Contributions" shall mean with respect to a Plan Year, an
amount by which the sum of a Participant's Deferral Contributions
(prior to the return of any such contributions as provided for in
Section 3.2) exceed the maximum amount of such contributions permitted
under the limitations of Code Section 401(k)(3).
1.25 "Excess Deferrals" shall mean the amount by which contributions made
for a Participant under any qualified cash or deferred arrangements
described in Code Section 401(k), 408(k), or 403(b) for a taxable year
exceed the limitation set forth in Section 3.1(e) and that are
includable in the Participant's gross income under Code Section
492(g), which is incorporated herein by this reference.
1.26 "Family Member" shall mean an individual described in Code Section
414(q)(6)(B), except when determining whether Compensation paid to
Family Members exceeds two hundred thousand dollars ($200,000), as
indexed under Code Section 401(a)(17), the term "Family Member" shall
include only the Spouse of the Eligible Employee and any lineal
descendants who have not attained age 19 before the close of the Plan
Year. For Plan Years on or after January 1, 1994, Compensation paid to
Family Members shall be determined by using the one-hundred-and-fifty
thousand dollar ($150,000) rule, as indexed for cost of living in
accordance with Code Section 401(a)(17).
1.27 "Highly Compensated Employee" shall mean an Employee who performs
service during the Determination Year and is described in one or more
of the following categories in accordance with IRS regulations.
(a) An Employee who is a five percent (5%) owner, as defined in Code
Section 416(i)(1)(iii), at any time during the Determination Year
or the Look-back Year.
(b) An Employee who receives Compensation in excess of $75,000 during
the Look- back Year. (The $75,000 limitation will be adjusted
annually for increases in the cost of living in accordance with
Code Section 415(d).)
(c) An Employee who receives Compensation in excess of $50,000 during
the Look- back Year and is a member of the top-paid group for the
Look-back Year. (The $50,000 limitation will be adjusted annually
for increases in the cost of living in accordance with Code
Section 415(d).)
(d) An Employee who is an officer within the meaning of Code Section
416(i) during the Look-back Year and who receives Compensation in
the Look-back Year greater than fifty percent (50%) of the dollar
limitation in effect under Code Section 415(b)(1)(A), for the
calendar year in which the Look-back Year begins. Notwithstanding
the foregoing, nor more than 50 or, if lesser, the greater of
three (3) Employees or ten percent (10%) of the Employees shall
be treated as officers; however, if no officer is described in
this subparagraph (d), then the highest-paid officer for such
year shall be treated as herein described.
(e) An Employee who is (i) described in paragraph (b), (c) or (d)
above, and (ii) one of the 100 Employees who receives the most
Compensation from the Employer during the Determination Year,
when the Determination Year is substituted for the Look-back Year
in paragraph (b), (c), or (d).
A former Employee shall be treated as a Highly Compensated Employee is
such former Employee had a separation year prior to the Determination
Year and was a Highly Compensated active Employee for either (i) such
Employee's separation year or (ii) any Determination Year ending on or
after the Employee's 55th birthday.
A separation year is the Determination Year in which the Employee
separates from service. Notwithstanding the foregoing, an Employee who
separated from service before January 1, 1987 is a Highly Compensated
Employee only if he was a five percent (5%) owner or received
Compensation in excess of $50,000 during (i) the Employee's separation
year (or the year preceding such separation year), or (ii) any year
ending on or after such Employee's 55th birthday (or the last year
ending before such Employee's 55th birthday). Notwithstanding anything
to the contrary in this Plan, Code Sections 414(b), (c), (m), (n) and
(o) are applied before determining whether an Employee is Highly
Compensated.
For purposes of this section:
(a) "Compensation" shall mean compensation as defined in Code Section
414(q)(7) and the regulations thereunder.
(b) "Determination Year" shall mean the Plan Year for which the
determination of who is Highly Compensated is being made.
(c) "Look-back Year" shall mean the 12-month period preceding the
Determination Year.
(d) "Top-paid Group" shall mean the top twenty percent (20%) of
Employees when rated on the basis of Compensation paid during the
year. The number of Employees in the group will be determined in
accordance with Code Section 414(q)98).
The Employer shall have the right to elect to determine Highly
Compensated Employees by reference to calendar year Compensation, in
accordance with IRS regulations. If the Employer so elects, the
Employer must make such election with respect to all other qualified
plans it maintains.
1.28 "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer or a Related
Employer. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer or a Related Employer, for a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty, or authorized leave of absence. No more than five
hundred and one (501) Hours of Service shall be credited under
this paragraph for any single continuous period (whether or not
such period occurs in a single computation period). Hours under
this paragraph shall be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor regulations, which
are incorporated herein by reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or a
Related Employer. An Hour of Service credited under subsection
(a) or (b) above will not be credited under this subsection (c).
These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement, or
payment is made.
(d) An Employee of the Employer or other Participating Employer who
is designated and authorized and placed on Leave of Absence under
a Federal mandate or specific assignment by the Employer shall be
credited with one thousand (1,000) Hours of Service of its
fractional equivalent for any Plan Year during which the Employee
is an authorized and designated to be on a Leave of Absence.
(e) For the purpose of applying subsections (b) and (c) above, the
following rules apply:
(i) In the event that the payment by the Employer or other
Participating Employer is calculated on the basis of units
of time, such as hours, days, weeks, or months, the number
of hours to be credited shall be the number of regularly
scheduled working hours included in the units of time on the
basis of which the payment is calculated. For purposes of
the preceding sentence, in the case where an Employee has no
regular work schedule, the calculation of the number of
hours to be credited shall be made on the basis of an eight
(8)-hour workday.
(ii) In the event that the payment by the Employer or other
Participating Employer is not calculated on the basis of
units of time, the number of hours to be credited shall be
equal to the amount of the payment divided by the Employee's
most recent hourly rate of compensation (as determined
herein) before the period during which no duties were
performed.
(iii)For purposes of this subsection (e), an Employee's hourly
rate of compensation shall be determined as follows:
(A) In the case of an Employee whose compensation is
determined on the basis of an hourly rate, such hourly
rate shall be the Employee's most recent hourly rate of
compensation.
(B) In the case of an Employee whose compensation is
determined on the basis of a fixed rate for specified
periods of time (other than hours) such as days, weeks,
or months, the Employee's most recent rate of
compensation for a specified period of time (other than
an hour), divided by the number of hours regularly
scheduled for the performance of duties during such
period of time. For purposes of the preceding sentence,
in the case of an Employee without a regular work
schedule, the calculation of the Employee's hourly rate
of compensation shall be made on the basis of an eight
(8)-hour workday.
(f) Solely for the purpose of determining whether a Break in Service
has occurred, an Employee who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of
Service that would otherwise have been credited but for such
absence, to a maximum of five hundred and one (501) Hours of
Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence due to:
(i) the pregnancy of the Employee;
(ii) the birth of a child of the Employee;
(iii)the placement of a child with the Employee in connection
with the adoption of such child by the Employee; or
(iv) the caring for of a child for a period beginning immediately
after birth or placement.
The Hours of Service credited under subsection (f) shall be
credited either in the Plan Year in which the absence begins, if
the crediting is necessary to prevent a Break in Service during
that period, or, in all other cases, in the following Plan Year.
1.29 "Inactive Participant" shall mean a Participant whose employment with
the Employer or Participating Employer has continued but whose
participation has been suspended (i) as a result of making a
withdrawal pursuant to Section 6.1 hereof, (ii) who has suspended his
Deferral Contributions pursuant to Section 3.1 hereof, or (iii) who is
no longer an Eligible Employee.
1.30 "Investment Funds" shall mean the investment funds, as determined by
the Plan Administrator, that are made available for the investment of
account balances under the terms of the Plan and the procedures
established by the Plan Administrator.
1.31 "Leased Employee" shall mean any person who renders professional
services to an Affiliated Employer and who is described in Code
Section 414(n)(2) by reason of providing such services, other than a
person described in Code Section 414(n)(5). Contributions or benefits
provided a Leased Employee by the leasing organization that are
attributable to services performed for the Affiliated Employer shall
be treated as provided by the Affiliated Employer. A Leased Employee
shall not be considered an Employee of the Affiliated Employer if
Leased Employees do not constitute more than 20 percent of the
Affiliated Employer's non-highly compensated workforce.
1.32 "Limitation Year" shall mean the 12-month period ending each December
31. All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12-consecutive-month period, the new Limitation Year must begin on a
date within the Limitation Year in which the amendment is made.
1.33 "Non-highly Compensated Employee" shall mean an Eligible Employee
other than a Highly Compensated Employee.
1.34 "Normal Retirement Date" shall mean the later of the Participant's
sixty-fifth (65th) birthday and completion of five Years of Service.
1.35 "Participant" shall mean an Eligible Employee who meets the
requirements for participation under Section 3.3 or an Employee or
former Employee for whom an Account and/or an Employer Account is
maintained.
1.36 "Participating Employer" shall mean Cubic Application, Inc. and any
Related Employer which has adopted and is participating in the Plan in
accordance with the provisions of Section 2.4 hereof.
1.37 "Period of Severance" shall mean a continuous period of time during
which an individual is not employed by the Employer or a Related
Employer. Such period shall begin on the date the Employee retires,
quits, resigns, or is discharged or, if earlier, the twelve (12)-
month anniversary on which the Employee is otherwise first absent.
1.38 "Permanently and Totally Disabled" shall mean the mental or physical
inability of the Participant to perform his normal job as evidenced by
the certificate of a medical examiner satisfactory to the Plan
Administrator certifying such inability and certifying that such
condition is likely to be permanent.
1.39 "Plan" shall mean the Cubic Applications, Inc. 401(k) Retirement Plan,
as embodied herein, and any amendments thereto.
1.40 "Plan Administration" shall mean the individual appointed by the Board
of Directors or its designated agent to act on behalf of the Plan.
1.41 "Plan Committee" shall mean the committee of individuals appointed by
the Board to be responsible for the operation and administration of
the Plan.
1.42 "Plan Sponsor" shall mean Cubic Corporation.
1.43 "Plan Year" shall mean the period beginning on April 8, 1994 and
ending December 31, 1994, and each January 1 through December 31
thereafter.
1.44 "Predecessor Employer" shall mean, with respect to an Employee, an
organization or unit previously under the control of the Employer, if
the Employee was previously employed under it.
1.45 "Predecessor to this Plan" shall mean any plan for which this Plan is
a restatement, any plan that has been merged into this Plan or any
Predecessor to this Plan, or any other plan sponsored by an entity
that became an Affiliated Employer by acquisition or merger, and that
adopted this Plan or a Predecessor to this Plan for any of its
employees who had been participants in such other plan.
1.46 "Prior Profit Sharing Plan" means the plans formally referred to as
the Titan Systems, Inc. Profit Sharing Plan, as amended from time to
time and/or the Titan Corporation Savings and Investment Plan
effective April 1, 1986, as amended from time to time.
1.47 "Related Employer" shall mean (a) any corporation that is included in
a controlled group of corporations, within the meaning of Code Section
414(b), that includes the Employer; (b) any trade or business that is
under common control with the Employer within the meaning of Code
Section 414(c); (c) any member of an affiliated service group, within
the meaning of Code Section 414(m), that includes the Employer; (d)
any entity required to be included under Code Section 414(o).
1.48 "Qualified Nonelective Contributions" shall mean the additional
contributions that an Employer may make to the Plan pursuant to
Article 6 to satisfy the nondiscrimination requirements on pretax
and/or Employer Matching Contributions.
1.49 "Service" shall mean, the period(s) commencing with the Employee's
first day of employment or reemployment with the Employer or Related
Employer and ending on the date(s) a Break in Service begins. Service
also shall include any Period of Severance of less than twelve (12)
consecutive months and any period(s) of employment with a Related
Employer. Fractional periods of a year shall be expressed in terms of
days. Service shall not include any Break in Service. Service shall
include any periods an Employee was on leave of absence to pursue an
advanced degree as a Titan Fellow, assuming the Employee returns to
employment with the Employer or a Related Employer following such
leave of absence.
1.50 "Spouse" shall mean the person to whom the Participant is legally
married on the date the Participant receives the Participant's benefit
payment from the Plan, or the Participant's date of death, if earlier.
1.51 "Trustee" shall mean the bank, trust company, insurance company, or
individual(s) designated by the Board to hold and invest the Trust
Fund and to pay benefits and expenses as authorized by the Plan
Administrator in accordance with the terms and provisions of the
agreement by and between the Employer and such bank, trust company,
insurance company, or individual(s).
1.52 "Trust Agreement" shall mean the trust agreement for the Cubic
Applications, Inc. 401(k) Retirement Plan as set forth in such Trust
Agreement and as such agreement is amended from time to time.
1.53 "Trust Fund" shall mean the fund established pursuant to the terms of
the Trust Agreement, which fund may be composed of one or more
Investment Funds.
1.54 "Valuation Date" shall mean the date as of which the Trustee shall
determine the value of the assets in the Trust Fund and the value of
each Account, which shall be the last day of each Plan Year and such
other dates as may be established by rules set by the Plan
Administrator, which rules may set different dates for valuing the
assets of the various investment funds comprising the Trust Fund.
1.55 "Voluntary Contributions" shall mean voluntary after-tax contributions
made by Participants to the Prior Profit Sharing Plan, before July 1,
1988.
1.56 "Vesting Service" shall mean Service as counted for determining a
Participant's right to vest in his/her Employer Account under Article
7, as determined under the rules of Article 2.
1.57 "Year(s) of Vesting Service" shall mean (a) with respect to each
person who is an Employee on December 31, 1990, years of Service that
would be credited to such Employee under the terms of the Plan in
effect on December 31, 1989, and (b) with respect to each person who
became an Employee on or after January 1, 1991, each period of Service
of three hundred and sixty five (365) days.
ARTICLE 2
Participation
2.1 Eligibility and Election to Participate.
(a) Each Participant in the Prior Plan on April 7,1 994, who
continues as an Eligible Employee shall continue as a Participant
on April 8, 1994 in this Plan.
(b) Each Eligible Employee who was not a Participant on April 7,
1994, is eligible to make Deferral Contributions and to receive
Employer Matching Contributions and Employer Discretionary
Contributions beginning on any Entry Date on or after the later
of:
(i) the six (6) month anniversary of the date of hire; or
(ii) attainment of age twenty-one (21), provided such Employee is
an Eligible Employee on such Entry Date.
2.2 Reemployment. If a Participant whose employment has terminated is
subsequently reemployed as an Eligible Employee, he shall be eligible
to participate in the Plan as of his date of reemployment.
If an Employee who is not a Participant terminates his employment with
the Employer or Participating Employer and is reemployed as an
Eligible Employee, he shall be eligible to become a Participant in the
Plan pursuant to the provisions of Section 2.1. Previous employment
with the Employer or any Related Employer shall be included in the
determination of eligibility for participation.
2.3 Employment After Normal Retirement Date. A Participant who continues
in the employ of the Employer or Participating Employer after his
Normal Retirement Date shall continue to be a Participant for all
purposes of the Plan.
2.4 Adoption of Plan by Related Employer. Any Related Employer may adopt
this Plan by proper action of its board of directors provided that the
Board has approved such participation. The administrative powers and
control of the Board, as provided in the Plan, shall not be deemed
diminished by reason of the participation of any other Participating
Employers; and such administrative powers and control specifically is
granted herein to the Board with respect to the appointment of the
Plan Administrator, amendment of the Plan, and other matters that
shall apply only with respect to the Board.
Each Participating Employer shall have the obligation to pay the
contributions for its own Employees and no other Participating
Employer shall have such obligation. Any failure by a Participating
Employer to live up to its obligation under the Plan shall have no
effect on any other Participating Employer.
Any Participating Employer may terminate its participation without
affecting the other Participating Employers in the Plan by furnishing
written notice to the Plan Administrator and the Trustee of its
determination to withdraw. The Board may, in its absolute discretion,
terminate any Participating Employer's participation at any time. The
procedures for implementing such termination of participation and
disposition of assets attributable to Employees of such Participating
Employer shall be determined by the Board.
2.5 Designation of Beneficiary.
(a) Beneficiary Designation Forms. Each Employee shall be provided
with a Beneficiary Designation Form when he becomes a Participant
and upon request.
(b) Consent to Beneficiary Designation. A married Participant will be
deemed to have designated Participant's spouse as the sole
primary Beneficiary unless the spouse consents on a form provided
by the Plan Administrator to the naming of another or additional
Beneficiary. The consent must acknowledge that the impact of the
effect of the designation is to waive the spouse's right to
receive benefits under the Plan and the consent must be witnessed
by a Plan representative or a notary public. Such consent is
valid only with respect to a specific alternate Beneficiary.
(c) Revocation of Beneficiary Designation. A Participant may revoke a
Beneficiary designation at any time. Such revocation also revokes
the spouse's consent. If a new Beneficiary is to be named who is
not the Participant's spouse and the Participant is married at
the time, then the Participant must obtain Participant spouse's
consent to the new designation. Otherwise the Participant shall
be deemed to have designated the spouse as sole primary
Beneficiary. Any change in a Participant's legal marital status
automatically revokes a Participant's Beneficiary designation,
and the Participant may then file a new Beneficiary designation.
(d) No Valid Designation on File. If at any time a Participant does
not have a valid Beneficiary designation on file with the Plan,
the Participant's Beneficiary shall be (i) the Participant's
spouse if the Participant is married on the date of death and
survived by a spouse, or (ii) the Participant's estate if the
Participant is unmarried on the date of death.
(e) Reliance. The Plan Administrator is authorized to rely on the
designation last filed and on any other information in its
possession in determining a Participant's Beneficiary under this
Section 2.5. All such determinations shall be binding and final
upon all parties. The Participating Employer, the Trustee, and
the Plan shall bear no liability to any party for payment to a
person who the Plan Administrator has determined in good faith is
the proper Beneficiary entitled to the amounts paid.
ARTICLE 3
Contributions
3.1 Participants' Deferral Contributions.
(a) Upon enrollment or re-enrollment in the Plan, each Participant
may elect to defer from one percent to ten percent, in a fixed
whole percentage, of his Compensation as Deferral Contributions.
The Participating Employer will make contributions to the Plan of
the amount deferred, to be credited to the Participant's Deferral
Account.
(b) Change in Percentage or Suspension of Deferral Contributions. A
Participant's Deferral Contribution percentage will remain in
effect, notwithstanding any change in the Participant's
Compensation, until the Participant elects to change such
percentage or until the Plan Administrator reduces such
percentage in accordance with subsection 3.1(c). A Participant
may elect to change the Participant's Deferral Contribution
percentage effective any January 1 or July 1, provided such
election is delivered to the Plan Administrator no less than
fifteen (15) days before the effective date of such change or
such other notice period as the Plan Administrator may specify.
A Participant may suspend the Participant's Deferral Contributions at
any time. Such suspension will be effective as soon as
administratively possible following receipt of an election form from
the Participant. A Participant who suspends all Deferral Contributions
shall be referred to as an Inactive Participant and shall be
ineligible to resume making Deferral Contributions until the first pay
date following the first day of any month that is at least six (6)
months after the effective date of such suspension.
(c) The Plan Administrator may reduce the percentage of Deferral
Contributions of any Participant at any time if the Plan
Administrator determines that such a reduction is necessary to
ensure that the limitations described in Sections 3.1(e) and 3.2
are satisfied.
(d) Status of Deferral Contributions. Deferral Contributions under
this Section shall be made by payroll deductions authorized by
the Participant and shall be contributed to the Plan by the
Participating Employer. Deferral Contributions are intended to
qualify as elective contributions under Code Section 401(k).
(e) Calendar Year Limitation. Notwithstanding the provisions of
Subsections (a) and (b) above, the Deferral Contributions made by
any Participant for any calendar year shall not exceed seven
thousand dollars ($7,000), multiplied by the Adjusted Factor. If,
during a calendar year, an Employee participates in this Plan and
one or more other plans with a cash or deferred arrangement
described in Code Sections 401(k), 408(k)(6), or 403(b), and any
portion of the Deferral Contributions contributed on the
Participant's behalf under this Plan and contributions under such
other plan of plans for such year constitute Excess Deferrals,
the Plan Administrator shall not direct the Trustee to distribute
such Excess Deferrals to the Participant as permitted by Code
Section 402(g)(2)(i) even though the Participant provides written
notice to the Plan Administrator of the existence of Excess
Deferrals by March 1 following the close of the calendar year to
which the excess relates. Instead, Excess Deferrals shall be
retained in the Trust in the same manner as such Employee's
Deferral Contributions that do not constitute Excess Deferrals.
In no event shall Employer Matching Contributions pursuant to
Section 3.4 be made with respect to Excess Deferrals.
3.2 Limitation on Participant Deferrals.
(a) The Plan Administrator shall return Excess Contributions (which
shall be determined after determining Excess Deferrals) to Highly
Compensated Employees in accordance with Section 3.2(b) as
necessary to satisfy the deferral percentage test of either
subsection (a)(i) or (a)(ii) below:
(i) the Average Deferral Percentage of Participants who are
Highly Compensated Employees is not more than the Average
Deferral Percentage for all other Participants multiplied by
one and twenty-five hundredths (1.25); or
(ii) the Average Deferral Percentage of participates who are
Highly Compensated Employees is not more than (A) two
hundred percent (200%) of the Average Deferral Percentage of
all other Participants and (B) the Average Deferral
Percentage of all other Participants plus two (2) percentage
points.
(b) Excess Contributions shall be distributed to the appropriate
Highly Compensated Employees within two and one-half (2-1/2)
months, but in no event later than twelve (12) months after the
close of the Plan Year to which they related. Excess
Contributions shall be treated as Annual Additions under Section
4.4 of the Plan:
(i) If the Plan terminates during a Plan Year in which there are
Excess Contributions, such distributions shall be made after
the date of the termination of the Plan and as soon as
administratively feasible, but in no event later than the
twelve (12) month period following the date of such
termination. The income allocable to Excess Contributions
shall be determined under the applicable regulations;
(ii) Distributions of Excess Contributions and income thereon
shall be made on the basis of the amount of the Excess
Contributions attributable to each Highly Compensated
Employee. Excess Contributions shall be distributed from the
Participant's Deferral Account. No distributions of Excess
Contributions and income thereon shall be made to any Highly
Compensated Employee as long as any other Highly Compensated
Employee has a higher Deferral Percentage;
(iii)Any decrease in the amount of Employer Deferral
Contributions of a Participant or any distribution of Excess
Contributions under this Subsection (b) shall also be
effective for purposes of determining the amount of Employer
Matching Contributions to be made on behalf of the
Participant under Section 3.4 below.
(c) Special Rules.
(i) The Deferral Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who is eligible
to have Deferral Contributions allocated on Participant's
behalf under two or more plans or arrangements described in
Code Section 401(k) that are maintained by the Employer or a
Related Employer shall be determined by treating all such
cash or deferred arrangements as one arrangement. If a
Highly Compensated Employee participates in two or more cash
or deferred arrangements that have different plan years,
this Subsection (c)(i) shall be applied by treating all cash
or deferred arrangements ending with or within the same
calendar year as a single arrangement.
(ii) If the Plan satisfied the requirements of Code Sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of those Code Sections only if aggregated with
the Plan, the Average Deferral Percentages of the Employees
shall be determined as if all such plans are a single plan.
Only plans with the same Plan Year may be aggregated in
order to satisfy Code Section 401(k).
(iii)If an Employee eligible to participate in the Plan is
subject to the family aggregation rules of Code Section
414(q)(6) because such Employee is a five-percent owner or
one of the ten (10) most Highly paid Highly Compensated
Employees, the combined Deferral Percentage for the family
group (which shall be treated as one Highly Compensated
Employee) shall be the greater of:
(A) The Deferral Percentage determined on an aggregated
basis for all eligible Family Members who are Highly
Compensated Employees without regard to family
aggregation; and
(B) The Deferral Percentage determined for all eligible
Family Members individually.
(iv) The Deferral Contributions and Compensation of all family
members shall be disregarded for purposes of determining the
Average Deferral Percentage for the Non-Highly Compensated
Employee group except to the extent needed to take into
account subsection (c)(ii) above.
(v) If an Employee is required to be aggregated as a member of
more than one family group, all Employees eligible to
participate in the Plan who are members of those family
groups that include such Employees shall be aggregated as
one family group in accordance with subsections (c)(iii) and
(iv) above.
(vi) If any Highly Compensated Employee is eligible to
participate in a cash or deferred arrangement subject to
Code Section 401(k) in addition to a plan subject to Code
Section 401(m) maintained by the Employer or a Related
Employer, the disparities between the Average Deferral
Percentages of the Highly Compensated Employee group and the
Non-Highly Compensated Employee group shall be reduced as
prescribed in Treasury Regulation Section 1.401(m)-2 as that
regulation, or a regulation of similar import, may be
amended, including the new aggregate limit provided [in]
Code Section 401(m).
(vii)The Employer, in its sole discretion, may divide Employees
into separate or component groups or otherwise restructure
this Plan in applying the tests set forth in Section 3.2, as
permitted pursuant to applicable regulations under Code
Sections 401(a)(4) and 401(k).
(d) Timing. Each Participating Employer shall pay to the Trustee in
cash the Deferral Contributions withheld from a Participant's
Compensation as soon as is practical, and in any event no later
than ninety (90) days from the date on which such amounts
otherwise would be payable to the Participant in cash.
3.3 Participant Voluntary Contributions. On and after July 1, 1988, a
Participant is no longer permitted to make Voluntary Contributions
under the Plan. Voluntary Contributions previously made to the Plan
shall continue to be held by the Trustee in the Participant's
Voluntary Contributions Account.
3.4 Employer Matching Contributions.
(a) Each Participating Employer shall contribute no less frequently
than annually an amount that equals the sum of the amounts to be
allocated to the Employer Matching Contributions Account of each
of its Participants under Section 3.4(b).
(b) An amount shall be allocated no less frequently than annually to
the Employer Matching Contributions Account of Each Participant
who made Deferral Contributions in such period. Except as may be
modified pursuant to Section 3.4(d), the amount shall equal one
hundred percent (100%) of the portion of the Participant's
Deferral Contributions for such period that do not exceed five
percent (5%) of the Participant's Compensation.
(c) Notwithstanding subsection (b) above, Employer Matching
Contributions shall be modified as provided in subsection (d) or
distributed in accordance with subsection (e) so that the
requirements of either subsections (c)(i) or (c)(ii) are
satisfied:
(i) The Average Contribution Percentage of Participants who are
Highly Compensated Employees is no greater than the Average
Contribution Percentage for all other Participants
multiplied by one and twenty-five hundredths (1.25);
(ii) The Average Contribution Percentage of Participates who are
Highly Compensated Employees is no greater than:
(A) Two hundred percent (200%) of the Average Contribution
Percentage of all other Participants; and
(B) The Average Contribution Percentage of all other
Participants plus two (2) percentage points.
(d) To the extent that the Average Contribution Percentage fails or
might fail to meet the requirements of subsection (c) above, the
Plan Administrator shall take such steps, consistent with Code
Section 401(m)(6) and Section 3.4(c) above, as may be required to
meet such requirements.
(e) In the event that there are Excess Aggregate Contributions, such
amounts shall be distributed to the appropriate Highly
Compensated Employees within two and one- half (2-1/2) months
after the close of the Plan Year to which such contributions
relate to the extent practicable, but in no event later than the
close of the twelve (12) month period following the date of such
termination. The income allocable to Excess Aggregate
Contributions shall be determined under the applicable
regulations.
Distributions of Excess Aggregate Contributions and income
thereon shall be made the basis of the amount of Excess Aggregate
Contributions attributable to each Highly Compensated Employee.
Excess Aggregate Contributions shall be distributed from the
Participant's Employer Matching Contributions Account. No
distribution shall be made of Excess Aggregate Contributions to
any Highly Compensated Employee as long as any other Highly
Compensated Employee has a higher Contribution Percentage.
(f) No benefit other than Employer Matching Contributions shall be
granted on condition (directly or indirectly) of an Employee's
election to make or not to make Deferral Contributions under the
Plan. However, the preceding sentence shall not apply to any
benefit that is provided at the Employee's election under a plan
described in Code Section 125 in lieu of an elective contribution
to a qualified cash or deferred arrangement.
(g) Special Rules:
(i) The Contribution Percentage of a Highly Compensated Employee
who is eligible to participate in two or more plans
maintained by the Employer or a Related Employer to which
Employer Matching Contributions or Voluntary Contributions
are made shall be aggregated for purposes of determining
such Employee's Contribution Percentage.
(ii) If this Plan satisfies the requirements of Code Section
401(b), 401(s)(4), or 410(b) only if aggregated with one or
more other plans or if one or more other plans satisfy the
requirements of Code Section 410(b) only if aggregated with
this Plan, then this Section 3.4 shall be applied by
determining the Contribution Percentages of Participants as
if all such plans were a single plan. For plan years
beginning on and after July 1, 1990, plans may be aggregated
only if they have the same plan year.
(iii)If a Highly Compensated Employee who is eligible to
participate in the Plan is subject to the family aggregation
rules of Code Section 414(q)(6) because such Employee is
either a five-percent owner or one of the ten (10) most
Highly Compensated Employees, the combined Contribution
Percentage for the family group (which shall be treated as
one Highly Compensated Employee) shall be the greater of:
(A) the Contribution Percentage determined by combining the
Voluntary Contributions, Compensation, and Employer
Matching Contributions of all eligible family members
who are highly compensated without regard to family
aggregation; and
(B) the Contribution Percentage determined by combining the
Voluntary Employer Contributions, Compensation, and
amounts treated as Matching Contributions of all
eligible family members.
(iv) The Employee Contributions, Compensation, and amounts
treated as Employer Matching Contributions of all family
members shall be disregarded for purposes of determining the
Contribution Percentage for the Highly Compensated Employee
group and the Non-highly Compensated Employee group except
to the extent needed to take into account Section
3.4(g)(iii) above.
(v) If an Employee is required to be aggregated as a member of
more than one family group, all Employees eligible to
participate in the Plan who are members of those family
groups that include the Employee shall be aggregated as one
family group in accordance with subsections (g)(iii) and
(g)(iv) above.
3.5 Employer Discretionary Contributions
(a) A Participating Employer may, at the sole discretion of its board
of directors and with the approval of the Board, contribute an
amount with respect to any Plan Year (which shall be referred to
as the "Employer Discretionary Contribution). The Employer
Discretionary Contribution hereunder shall be made to the Trust
Fund by not later than the date, including extensions, prescribed
by law for filing such Employer's federal income tax return for
the Plan Year. Such amount shall be allocated to the Employer
Discretionary Contributions Account of each Participant under
Section 3.5(b).
(b) Each Participant who is employed on the last day of the Plan Year
by the Participating Employer making an Employer Discretionary
Contribution, shall be eligible to receive a contribution
allocated to his Employer Discretionary Contributions Account, to
be allocated in the following manner, effective for plan years
commencing on or after January 1, 1989:
(i) First, each Participating Employer's Discretionary
Contribution shall be allocated, pro rata, according to each
such eligible Participant's Allocable Compensation since
becoming a Participant for the Plan Year involved up to a
percentage of Allocable Compensation (as defined in Section
3.5(b)(iii) below) equal to the greater of (A) the rate of
tax applicable on the first day of such Plan Year under Code
Section 3111(a) that is attributable to old age insurance;
or (B) five and seven-tenths percent (5.7%).
(ii) Next, if after the allocation in subparagraph (i) above, any
portion of a Participating Employer's Employer Discretionary
Contribution remains unallocated, such portion shall be
allocated to eligible Participants, pro rata, according to
their Compensation for the Plan Year.
(iii)For purposes of this Section 3.5, "Allocable Compensation"
means the sum of Compensation and Excess Compensation for
each eligible Participant.
3.6 Transferred Contributions/Rollover Contributions
(a) The Plan Administrator may, at any time, authorize the Trustee to
accept a direct transfer of funds from any qualified Plan
maintained by a Related Employer to this Plan. The Plan
Administrator has previously authorized the Trustee to accept a
direct transfer of funds from the Prior Profit Sharing Plan to
this Plan and has established separate Prior Profit Sharing Plan
Accounts to hold the contribution and income thereon. The Plan
Administrator also has established a separate method of tracking
such Accounts.
(b) In addition, with the approval of the Plan Administrator an
Employee may contribute to the Plan all or a portion of the
amount due him from another plan qualified under Code Section
401(a) or from a tax-exempt individual retirement account that
consists solely of money or property transferred from a plan
qualified under Code Section 401(a), and any earnings on that
money or property (a "rollover" contribution). No rollover
contribution may be made to the Plan of money or property that
represents assets from a plan for self-employed individuals or an
individual retirement account that contains assets other than
those transferred to it from a plan qualified under Code Section
401(a).
3.7 Limitation of Liability. Each Employer contribution shall be i
complete discharge of the financial obligations of the Participating
Employer under the Plan with respect to the period for which it is
made.
ARTICLE 4
Participant's Accounts: Allocations
4.1 Participant's Accounts. The Plan Administrator shall maintain Accounts
as follows for each Participant for each Investment Fund in which he
participates:
(a) A Deferral Account to record:
(i) The Participant's Deferral Contributions, minus any
withdrawals;
(ii) The Participant's contributions, if any, transferred
directly to this Plan, representing the Participant's
Deferral Account under The Titan 401(k) Retirement Plan,
minus any withdrawals; and
(iii)The Participant's contributions, if any, transferred
directly to this Plan, representing the Participant's Salary
Deferral Contributions and earnings accumulated under the
Spectron Development Laboratories, Inc. Cash or Deferred
Savings Plan, minus any withdrawals;
(iv) The Participant's contributions, if any, transferred
directly to this Plan, representing his Deferral Account
under The Titan Corporation Savings and Investment Plan,
minus any withdrawals; and
(v) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the assets
allocated to the Deferral Account.
(b) A Voluntary Contributions Account to record:
(i) Any amounts transferred to this Plan from The Titan 401(k)
Retirement Plan, minus any withdrawals; and
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the assets
allocated to the Voluntary Contributions Account.
(c) An Employer Matching Contributions Account to record:
(i) The Participant's share of the Employer Matching
Contributions made on and after April 8, 1994, pursuant to
Section 3.4;
(ii) The Participant's contributions, if any, transferred
directly to this Plan, representing his Employer Matching
Contributions Account and Company Account under Prior Plan;
and
(iii)The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Employer Matching Contributions Account.
(d) An Employer Discretionary Contributions Account to record:
(i) The Participant's share of the Employer Discretionary
Contributions made pursuant to Section 3.5; and
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Employer Discretionary Contributions Account.
(e) A Rollover/Transfer Account to record:
(i) The amount transferred in this Plan as a transferred or
rollover contribution on behalf of a Participant pursuant to
Section 3.6; and
(ii) The Participant's share of the net income, net losses, or
other adjustments resulting from the valuation of the
Rollover/Transfer Account.
The Plan Administrator may consolidate Accounts as may be
administratively desirable and to the extent that separate
accounting is no longer required.
4.2 Allocation of Employer Matching Contributions. Employer Matching
Contributions made under Section 3.4 shall be allocated to each
eligible Participant's Employer Matching Contributions Account within
thirty (30) days following their contribution to the Trust. Employer
Discretionary Contributions, if any, made under Section 3.5 shall be
allocated to each eligible Participant's Employer Discretionary
Contributions Account no later than the due date for the Employer's
tax return for the fiscal year ending with or within the Plan Year to
which such contributions relate.
4.3 Valuation of Accounts.
(a) Within sixty (60) days after each Valuation Date, within sixty
(60) days after the removal or resignation of the Trustee, and at
such other times as determined by the Plan Administrator, the
Trustee shall value the assets of the Trust on the basis of fair
market values. If the assets cannot be valued within the sixty
(60) day period specified in the preceding sentence, the assets
shall be valued as soon thereafter as is practicable.
(b) As soon as is reasonably possible after receipt of these
valuations from the Trustee, the Plan Administrator shall value
the Accounts of each Participant as of the applicable Valuation
Date so as to reflect the current fair market value of each
Account as of such Valuation Date. The valuation provisions of
this Section 4.3 shall be applied and implemented in accordance
with the following rules:
(i) If separate subaccounts have been established for separate
investment alternatives, each subaccount shall be valued
separately and the total value of a Participant's Account(s)
shall equal the total value of his interest in each of the
respective subaccounts in which his Account(s) have been
invested;
(ii) The fair market value of any guaranteed interest contract,
trust or fund holding such a contract, or similar program
entered into between an insurance company and the Plan shall
be determined on the basis of the principal amount of such
contract or program, plus the amount of the guaranteed
interest or other increase in value that is paid or credited
to the Plan pursuant to such contract or program;
(iii)To the extent that a Participant's Account is invested in a
regulated investment company offered as an investment
alternative under the Trust, the value of that portion of
the Account shall be valued pursuant to rules prescribed by
the Plan Administrator on the basis of the unit or share
value of the regulated investment company on the applicable
Valuation Date; and
(iv) Administrative expenses charged to the Trust Fund, if any,
pursuant to Section 10.7 shall be offset against forfeitures
occurring during the Plan Year effective January 1, 1991. If
such forfeitures are not sufficient to pay for such
expenses, they may be charged to the Trust Fund pursuant to
Section 10.7, in which case the excess amount shall be
apportioned to each Participant's Accounts in proportion to
the value thereof as of the current or most recent Valuation
Date.
(c) The Participating Employers and Trustee do not in any manner or
to any extent whatsoever warrant, guarantee, or represent that
the value of a Participant's Accounts shall at any time equal or
exceed the amount previously contributed or allocated thereto, or
that any valuation or accounting method or practice will continue
to be applied.
(d) Accounting Procedures. The Plan Administrator shall establish
accounting procedures for the purpose of making the allocations,
valuations, and adjustments to Accounts provided for under this
Plan, as well as the implementation of Investment direction by
Participants and transfers between or distributions from
subaccounts. From time to time the Plan Administrator may modify
such accounting procedures for the purpose of achieving
equitable, nondiscriminatory, and administratively feasible
allocations among the Accounts in accordance with the general
concepts of the Plan and the provisions of this Section 4.3.
A Participant or Beneficiary shall have no contractual or other
right to have a particular accounting procedure or convention
apply, or continue to apply, and the Plan Administrator shall be
free to alter any such procedure or convention without obligation
to any Participant or Beneficiary, consistent with the
requirements of code Section 411(d)(6).
(e) Inactive Participation. The Accounts of each Inactive Participant
shall be held intact and shall be valued on each Valuation Date
as provided in this Section 4.3, but shall not receive any
allocation of contributions except to the extent specifically
provided for herein.
(f) Accounting for Interest of an Alternate Payee. In the event an
alternate payee under a qualified domestic relations order is
awarded an interest in the Plan benefits of a Participant
pursuant to a qualified domestic relations order, such interest
shall be separated into one or more separate Accounts and
accounted for under rules prescribed by the Plan Administrator,
pending distribution to the alternate payee. Any limitation,
restriction, or rule applicable to the Account(s) of a
Participant shall apply to the Account(s) of the alternate payee,
as appropriate.
4.4 Limitation on Annual Additions.
(a) Maximum Annual Additions. The Annual Additions of a Participant,
as defined in Code Section 415(c)(2), shall not exceed the
maximum permissible amount specified in Code Section 415(c)(1).
(b) Effect of Participation in Other Employer Plans.
(i) If a Participant in this Plan also is a Participant in
another defined contribution plan maintained by the Employer
or a Related Employer, the aggregate Annual Additions of the
Participant under this Plan and such other plan(s) shall not
exceed the maximum permissible amount specified in Code
Section 415(c)(1). The Plan Administrator shall prescribe
such rules as may be necessary or appropriate with respect
to applying this limit to the respective plans involved so
as to ensure that the aggregate limit on Annual Additions is
not exceeded.
(ii) If a Participant in this Plan also is a Participant in a
defined benefit plan maintained by the Employer or a Related
Employer, the sum of the Defined Contribution Plan Fraction
(as defined in Code Section 415(e)(3)) and the Defined
Benefit Plan Fraction (as defined in Code Section 415(e)(2))
shall not exceed one (1.0). The Participant's benefit under
such defined benefit plan shall be reduced, as necessary to
satisfy the requirement of the preceding sentence.
(c) Incorporation by Reference of Code Section 415. To ensure
compliance with Code Section 415, the Plan hereby incorporates
said section by reference as though it were set out as part of
this Plan. In applying Section 415 to this Plan, the Plan shall
include each grandfather or transition rule provided by such
section or any law amending such section, in order to allow the
largest benefit otherwise payable hereunder, or under other plans
maintained by the Employer or Related Employer, to be paid.
(d) No Contractual Right to Excess Contributions. If, in order to
comply with the limitations of this Section 4.4, it becomes
necessary to reduce a Participant's Account(s), to reduce or
reallocate amounts previously allocated to such Accounts, or
otherwise, such actions(s) may be taken by the Plan Administrator
and Trustee free of any contractual obligation to the Participant
(or Beneficiary) affected based on prior Account balances or
allocations.
4.5 Limitations on Reversion of Contributions. Except as provided in
subsections (a) and (b) below, contributions made under the Plan shall
be held for the exclusive benefit of Participants and their
Beneficiaries and may not revert to a Participating Employer.
(a) In the case of a contribution which is made by the Employer or a
Participating Employer by a mistake of fact, such contribution
shall be returned to the Participating Employer within one (1)
year after it is contributed to the Plan.
(b) In the case of a contribution conditioned upon its deductibility
under Code Section 404, to the extent the deduction is
disallowed, the amount disallowed shall be returned to the
Participating Employer within one (1) year after the
disallowance. Unless otherwise specified by the Participating
Employer in writing at the time a contribution is made, each
contribution made to this Plan shall be deemed proper on
condition of its deductibility.
4.6 Family Aggregation Rules. The family aggregation rules of Code Section
414(q)(6) shall apply to any Eligible Employee who is Highly
Compensated and a five (5) percent (5%) owner or one of the ten (10)
most Highly Compensated Employees. The average deferral percentage of
the family members, who are treated as one Eligible Employee who is
Highly Compensated, shall be the Average Deferral Percentage
determined by combining the pretax contributions and Compensation of
all eligible family member.
ARTICLE 5
Investment of Contributions
5.1 Investment Funds. All contributions to the Plan shall be invested as
provided in this Section 5.1. The Plan Administrator may establish a
choice of investment alternatives that each Participant may select
from in determining the manner in which his Account(s) will be
invested. The Plan Administrator shall prescribe procedures for
investment of amounts allocated an Account of an alternative payee.
(a) If such investment alternatives are established, each Participant
may elect to invest the assets of his Accounts in such
alternatives at such time, in such manner, and subject to such
restrictions as the Plan Administrator shall specify.
(b) Separate funds within the Trust Fund shall be established to
reflect the available alternatives, and separate subaccounts
shall be established for each investment alternative selected by
a Participant, and each such subaccount shall be valued
separately.
(c) The Plan Administrator, in its discretion, may permit
Participants to transfer amounts from one investment alternative
to one or more other investment alternatives. An election to
transfer such amounts shall be made only at such time, in such
manner, and subject to such restrictions as the Plan
Administrator may specify. The Plan Administrator may provide
that future contributions may be invested in a different
investment alternative than amounts already accumulated in the
Participant's Account(s).
(d) The Plan Administrator shall prescribe rules relating to the
investment of the assets in the Accounts of a Participant who
fails to make an effective election (as set forth by the Plan
Administrator), for any reason whatsoever, as to how all or a
portion of his Accounts shall be invested.
(e) The Plan Administrator shall provide notice by arranging for
reports to be sent to Participants regarding the investment of
their funds pursuant to their investment elections. Failure of a
Participant to notify the Plan Administrator regarding
implementation of his investment election within thirty (30) days
following such notice shall be deemed to be an election to have
the Accounts invested in the manner shown on such report, even if
the manner of investment is different from that specified in the
Participant's election form or investment instructions. If a
Participant has not received a notice confirming his investment
election (or change therein) and does not notify the Plan
Administrator or its designated delegate within thirty (30) days
of the date such election (or change) was to be effective, the
Participant shall be deemed to have elected to have the Accounts
invested in the manner in which they are in fact invested, even
if that method differs from the Participant's election form or
investment instructions.
(f) The Plan Administrator shall have the option, in its sole
discretion, to revise the procedures or alter the investment
alternatives set forth in this Section 5.1.
ARTICLE 6
Withdrawals and Loans
6.1 Financial Hardship/Post Age 59-1/2 Withdrawals. Upon thirty (30) days'
written notice to the Plan Administrator and subject to the Plan
Administrator's approval, a Participant may withdraw up to the value
of his Deferral Account as soon as administratively feasible following
the Participant's withdrawal request to the extent necessary to meet a
financial hardship provided, however, that the financial hardship
shall not be required as a condition for a withdrawal after the
Participant has attained age fifty-nine and one half (59-1/2).
A withdrawal request will be presumed to be on account of financial
hardship if the distribution is necessary in light f immediate and
heavy financial needs of the Participant. The amount approved
hereunder may not exceed the amount required to meet the immediate
financial need created by the hardship, and not be reasonably
available from other resources of the Participant. The Plan
Administrator's determination of the existence of financial hardship
and the amount required to meet the need created by the hardship shall
be based on the following causes:
(a) Medical expenses described in Code Section 213(d) incurred by the
Participant, the Participant's Spouse, or any dependents of the
Participant or necessary to incur such medical care;
(b) Purchase (excluding mortgage payments) of a principal residence
for the Participant;
(c) Payment of tuition and related educational fees for twelve (12)
months of post- secondary education for the Participant, the
Participant's Spouse, children, or dependents;
(d) Payment of amounts necessary to prevent eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
(e) Other causes recognized as hardships justifying withdrawals
pursuant to applicable Treasury regulations.
A distribution shall be determined by the Plan Administrator to be
necessary to satisfy an immediate and heavy financial need of a
Participant if all of the following requirements are satisfied:
(a) Prior to the hardship distribution, the Participant has obtained
all non-hardship distributions and all non-taxable loans
currently available under all plans maintained by the
Participating Employer;
(b) All Deferral Contributions under this Plan and all elective
salary reduction contributions under other qualified retirement
plans maintained by the Participating Employer shall be suspended
for a twelve (12) month period following the effective date of
the hardship distribution; and
(c) The Participant's Deferral Contributions for the Participant's
taxable year immediately following the taxable year of the
hardship withdrawal (and elective salary reduction contributions
under all other qualified plans maintained by the Participating
Employer) shall be limited to:
(i) The applicable limit under Code Section 402(g) for such
following taxable year, minus
(ii) The amount of such Participant's Deferral Contributions or
other elective salary reduction contributions for the
taxable year in which the hardship withdrawal occurred.
The amount of any approved hardship withdrawal under this Section 6.1
shall not exceed the lesser of:
(i) The balance in the Participant's Deferral Account as of the
coincident or preceding Valuation Date, or
(ii) The aggregate Deferral Contributions made by the Participant
as of the coincident or preceding Valuation Date, plus the
total income, if any, allocated to the Participant's
Deferral Account as of December 31, 1988.
6.2 Withdrawal of Voluntary Contributions. Upon thirty (30) days' written
notice to the Plan Administrator, a Participant may withdraw up to one
hundred percent (100%) of the balance in his Voluntary Contributions
Account as soon as administratively feasible following the withdrawal
request. A Participant shall be permitted to make such a withdrawal at
any time and for any reason.
The amount of the withdrawal shall be taken from such contacts in the
following order:
(a) Pre-1987 Voluntary Contributions;
(b) Post-1986 Voluntary Contributions and pro rata post-1986
earnings; and
(c) Pre-1987 earnings on Voluntary Contributions.
A Participant who makes withdrawals from his Voluntary Contributions
Account may resume making Voluntary Contributions on the first day of
any month thereafter, provided he is eligible to make such
contributions, by filing an election with the Plan Administrator no
less than thirty (30) days before the resumption is to be effective.
6.3 Amount and Payment of Withdrawals. All withdrawals under this
Article VI shall be effective as soon as administratively possible
following the date the Plan Administrator receives a withdrawal
request from the Participant. The amount of such withdrawal shall be
taken from the Participant's Account(s) at such time and paid to the
Participant in a single sum.
6.4 Loans to Participants. The Plan Administrator may authorize a loan
from the Trust Fund to Participants (including, for this purpose,
Inactive Participants) pursuant to rules prescribed by the Plan
Administrator. These rules shall be designed to ensure that these
Participant loans satisfy the requirements of Code Sections 4975(d)(1)
and 72(p), and any other provision of law that is, or may become,
applicable. These rules shall provide that:
(a) The loans are available to all Participants on a reasonably
equivalent basis;
(b) The loans are not made available to Highly Compensated Employees
in amounts greater than the amounts made available for other
Employees. For this purpose, the rules prescribed by the Plan
Administrator may restrict the amount of the loan to a percentage
of the Participant's Account balance or use different percentages
depending upon the amount of the loan, provided the percentages
are applicable to all Participants;
(c) The loans bear a reasonable rate of interest commensurate with
the prevailing interest rate charged by persons in the business
of lending money for loans that would be made under similar
circumstances;
(d) The loans are adequately secured. For this purpose, the amount of
the security must be at least equal to the amount of the loan.
The rules to be prescribed by the Plan Administrator may permit a
Participant to use some or all of his interest under the Plan as
security for the loan;
(e) If the loan, or a loan from another qualified retirement plan
maintained by the Employer or a Related Employer, is to be
secured by some or all of the Participant's Accounts under the
Plan, the Participant and his spouse, if any, must consent to the
loan and the possible reduction in the Accounts in the event of a
set- off of the loan against the Account balances as a result of
nonpayment of the loan. Such consent must be given in writing
within a ninety (90) day period before the Plan Administrator
makes the loan. In the event the Participant defaults on the loan
and the Participant's Accounts are security for the loan, the
Account balances will not be used to satisfy the loan obligation
before the earlier of the Participant's termination of employment
with the Participating Employer or an event resulting in a
permissible distribution of his Accounts under the Plan. In the
event of default, the Participating Employer shall offset the
amount owed by the Participant against any amounts owed by the
Participating Employer to the Participant;
(f) The loan must state the date on which the loan must be repaid,
which may not exceed five (5) years, and the loan must be
repayable in substantially level payments, with payments not less
frequently than quarterly;
(g) In connection with the making of any loan to a Participant
pursuant to the provisions of this Section 6.4, the Participant
receiving such a loan may be required to execute such documents
as may be required by the Committee and/or Trustee;
(h) The amount of the loan may not exceed the lesser of:
(i) $50,000 (reduced by the excess of the highest outstanding
balance of loans from the Plan during the one-year period
ending on the date preceding the date on which such loan is
made); or
(ii) One-half of the present value of the Participant's vested
interest in his Accounts.
The decision as to whether or not any Participant loans shall be made
under this Section 6.4 shall be made at the sole discretion of the
Plan Administrator, and the Participant shall not have a contractual
right to obtain a loan hereunder.
(i) In the event the Participant dies before distribution of his
Distributable Benefit, the amount payable to the Participant's
Beneficiary or spouse, as applicable, shall be reduced by the
amount of the security interest in the Participant's vested
interest held by the Plan by reason of a loan outstanding to such
Participant.
(j) If any loan to a Participant is unpaid on the date that the
Participant's Beneficiary becomes entitled to a distribution from
the Trust Fund, such loan shall on such date become due and
payable, and the amount thereof, together with any unpaid
interest thereon, shall be deducted form the amount of the
distribution to which he or his Beneficiary is entitled. If such
nonforfeitable interest is not sufficient to repay the balance
due, the borrower if living, or the Participant's estate if
deceased, shall be personally liable thereof.
(k) Payment of a Participant's loan shall be made from, and shall be
considered an investment of, the Participant's Accounts. Interest
payments made by a Participant shall be credited to such Accounts
and shall be reinvested at the direction of the Participant, in
the manner prescribed for current contributions to the Trust
Fund.
6.5 Eligible Rollover Distributions.
(a) This section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
section, a distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(b) Definitions.
(1) Eligible rollover distribution -- An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee
and the distributee's designated Beneficiary, or for a
specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section
401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan -- An eligible retirement plan is
an individual retirement account described in Code Section
408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section
401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving Souse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(3) Distributee -- A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse and the Employee's or former Employee's
Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the interest
of the Spouse or former Spouse.
(4) Direct rollover -- A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
ARTICLE 7
Retirement, Disability and Death Benefits
7.1 Retirement Benefits. The retirement benefit payable under the Plan in
the case of a Participant whose employment with a Participating
Employer is terminated on or after his Early Retirement Date or the
Participant's Normal Retirement Date shall be one-hundred percent
(100%) of the Participant's Accounts. The Participant's Accounts will
be valued on the valuation date or dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
7.2 Disability Benefits. The disability benefit payable under the Plan in
the case of a Participant whose employment with a Participating
Employer is terminated because he is Permanently and Totally Disabled
shall be one-hundred percent (100%) of his Accounts. His Accounts will
be valued on the Valuation Date or Dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
7.3 Death Benefits. The death benefit payable to a Beneficiary under the
Plan in the case of a Participant whose employment with a
Participating Employer is terminated due to the Participant's Accounts
will be valued on the Valuation Date or Dates coincident with or
immediately preceding the date of distribution under rules prescribed
by the Plan Administrator.
ARTICLE 8
Termination Benefits and Vesting Requirements
8.1 Benefits Upon Termination of Employment. The benefit payable under the
Plan un the case of a Participant whose employment is terminated for
any reason other than Permanent and Total Disability, death, or
retirement on or after attainment of his Early or Normal Retirement
Date shall be equal to the vested portion of the value of his
Accounts. His Accounts shall be valued on the Valuation Date
coincident with or immediately preceding the date of distribution.
8.2 Vesting Requirements.
(a) Participant shall be one-hundred percent (100%) vested at all
times in amounts held in the Participant's Voluntary
Contributions Account and Deferral Account.
(b) Participant for whom Accounts were transferred on the Effective
Date of this Plan shall be one-hundred percent (100%) vested in
all transferred Accounts as of that date.
(c) For Contributions made after the Effective date, the vested
percentage of the value of a Participant's Employer Discretionary
Contributions Account and Employer Matching Contributions Account
shall be based on the number of Participant's Years of Vesting
Service as of the date of the Participant's termination of
employment, as follows:
Years of Vesting Service Vested Percentage
Less than 2 years 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more years 100%
In no event will the vested percentage of a Participant's Accounts be
less than the vested percentage of the Participant's account under The
Titan Corporation 401(k) Retirement Plan, which was transferred to
this Plan as of April 8. 1994.
(d) With respect to a Participant who terminates employment without
being one- hundred percent (100%) vested in his Employer Matching
Contributions Account and Employer Discretionary Contributions
Account and who is reemployed after incurring five (5) one-year
Breaks in Service, the Participant's Years of Service subsequent
to his Breaks in Service will not increase the vested percentage
of the amount in such Account(s).
8.3 Forfeitures.
(a) The nonvested portion of a Participant's Employer Matching
Contributions Account will be forfeited as of the earlier of
(i) the date of distribution to him of the vested portion of his
Employer Matching Contributions Account (the date of termination
of employment if he has no vested interest), or (ii) the date on
which he has five (5) consecutive Breaks in Service. Any such
forfeitures will be applied first to pay administrative expenses
pursuant to Section 4.3(b)(iv), second to restore forfeitures of
reemployed Participants as described in Section 8.3(c), and third
as allocations on behalf of each Participant eligible to receive
an Employer Matching Contribution for the Plan Year in which such
Break in Service occurs and who is employed as of the last day of
the Plan Year. Such forfeitures shall be allocated in the ratio
that such Participant's Employer Matching Contribution bears to
the total Employer Matching Contribution of all Participants
eligible to share therein for such Plan Year.
(b) The nonvested portion of a Participant's employer Discretionary
Contributions Account will be forfeited as of the earlier of
(i) the date of distribution to him of the vested portion of his
Employer Discretionary Contributions Account (the date of
termination of employment if he has no vested interest), or
(ii) the date on which he has five (5) consecutive Breaks in
Service. Any such forfeitures will be applied first to pay
administrative expenses pursuant to Section 4.3(b)(iv), second to
restore forfeitures of reemployed Participants as described in
Section 8.3(c), and third as allocations on behalf of each
Participant eligible to receive an Employer Discretionary
Contribution for the Plan Year in which such Break in Service
occurs and who has a currently established Employer Discretionary
Contributions Account and is employed as of the last day of the
Plan Year. Such forfeitures shall be allocated in the ratio that
such eligible Participant's Compensation bears to the total
Compensation of all Participants eligible to share therein for
such Plan Year.
(c) If the Participant is reemployed by the Employer or a Related
Employer prior to his incurring his fifth consecutive Break in
Service or on (or before) the Anniversary Date of the Plan Year
in which his fifth consecutive Break in Service occurs, the
Participant shall be entitled to have the entire portion of his
Account (including the nonvested portion) reinstated by repaying
the total amount distributed to him. Such reinstatement shall be
made from current forfeitures or, if necessary, from Employer
Discretionary Contributions and shall not be treated as an Annual
Addition. However, this repayment must be made prior to the
earlier of (i) five (5) years following the date of reemployment
or (ii) five (5) consecutive Breaks in Service after the
distribution of the vested interest in his Account following such
termination of employment, provided he is an Eligible Employee
during that period. If such repayment is not made, then the
previously forfeited amounts shall not be restored to the
Participant's Account.
(d) In the case of a repayment made pursuant to the rules of Section
8.3(c) above:
(i) The Participant shall not be required to pay any interest
charge on the amounts repaid by him, and
(ii) The nonvested portion of his Account (which was not
distributed to him) shall not be adjusted for gains or
losses during the period between the forfeiture and the
repayment of the distributed amount.
(e) In the case of a Participant with no Vested Interest in his
Account who is reemployed prior to incurring five (5) consecutive
Breaks in Service, his entire nonvested Account (unadjusted for
gains or losses during the period between the date of his
forfeiture and the date of his reemployment) shall be reinstated
upon his reemployment, without regard to the repayment
requirement of subsection (c) above.
(f) In no event shall a Participant who has received a distribution
that includes the balance in his Voluntary Account,
Transfer/Rollover Account, or any other fully vested Account be
entitled either to repay the Plan or to have the balance in such
Account(s) reinstated upon reemployment by the Employer or a
Related Employer. However, if the previous distribution otherwise
qualifies for a Rollover Contribution, the Participant may make a
Rollover Contribution upon reemployment.
ARTICLE 9
Distribution of Benefits
9.1 Retirement. Amounts distributable pursuant to Section 7.1 will be
distributed at the Participant's election in one of the following
forms, subject to Section 9.4, provided the distributable amount
exceeds in value (or exceeded in value at the time of any prior
distribution from the Plan) three-thousand-five-hundred dollars
($3,500):
(a) A single lump sum payment in cash, Employer stock, or both,
provided that Employer stock distributions are limited to the
portion of the Participant's distributable Account balance as of
April 8, 1994 and provided further that fractional shares are
distributed in cash.
(b) Substantially equal monthly, quarterly, semiannual, or annual
installments in cash. The installments will be paid over a period
certain not to exceed the Participant's life expectancy or the
Participant's and his spouse's life expectancy. Unpaid
installments under this option shall be invested in the
Investment Funds selected by the Participant or as directed by
the Plan Administrator and share in the gains, losses, expenses,
and other adjustments pursuant to Section 4.3. If the Participant
dies before all remaining installments have been paid, the
remaining balance of his Account(s) amounts will be paid in a
single sum to the Participant's Beneficiary.
In the event the distributable benefit does not exceed three-thousand
five-hundred dollars ($3,500) (and did not exceed three-thousand
five-hundred dollars ($3,500) at the time of any prior distribution),
the amount will be distributed as a cash lump sum.
9.2 Death and Other Terminations. Amounts distributable pursuant to
Sections 7.2, 7.3, and 8.1 will be distributed to the Participant or
the Participant's Beneficiary, subject to Section 9.4, in cash or
stock or both, provided that Employer stock distributions are limited
to the portion of the Participant's distributable Account balance
before April 8, 1994 and provided further that fractional shares are
distributed in cash. Notwithstanding the foregoing, if the
distributable amount does not exceed three-thousand five-hundred
dollars ($3,500) (either at the time of distribution or at the time of
any prior distribution) the amount will be distributed in cash.
9.3 Timing of Distributions.
(a) Distributions under the Plan pursuant to Articles VII and VIII
will begin as soon as possible following the Valuation Date
applying to such distribution. Notwithstanding the previous
sentence and the provisions of Articles VII and VIII, if a
Participant's employment terminates for any reason and the value
of the vested portion of his Accounts exceeds three-thousand
five-hundred dollars ($3,500) (at the time of termination of
employment or at the time of any prior distribution), the
Participant must consent to the receipt of the distribution if
the Participant has not attained age sixty-five (65). If the
Participant does not consent to such distribution, the
distribution shall be made as a cash lump sum as soon as
practicable following attainment of age sixty-five (65) based on
the value of his Accounts on the Valuation Date coinciding with
or immediately preceding the date of distribution.
(b) Unless the Participant elects otherwise, as permitted under the
Plan, distributions under the Plan shall in no event begin later
than sixty (60) days following the end of the Plan Year in which
the Participant attains age sixty-five (65), reaches the fifth
(5th) anniversary of the date the Participant commenced
participation, or terminates employment, whichever is latest.
9.4 Minimum Required Distributions. Notwithstanding any provision in the
Plan to the contrary, all distributions under the Plan shall be made
in accordance with the requirements of Code Section 401(a)(9) and the
regulations thereunder, including the incidental death benefit
requirement of IRS Proposed Regulations Section 1.401(a)(9)-2. The
provisions in this section override any distribution options under the
Plan if inconsistent with the requirements of Code Section 401(a)(9).
(a) Pre-Death Distributions. Distributions to a Participant shall
commence no later than the April 1 of the calendar year following
the calendar year in which a Participant attains age seventy and
one-half (70-1/2). However, if a Participant attained age 70-1/2
before January 1, 1988, distributions to such Participant shall
commence no later than the April 1 following the calendar year in
which such Participant retires. Distributions shall be made in
one of the forms specified under Section 11.1. In no event shall
distributions be made for a period longer than the life
expectancy of the Participant or joint life expectancy of the
Participant and his Spouse, determined as of April 1 of the
calendar year in which the Participant attains age 70-1/2 or
retires, whichever the case may be.
(b) Post-Death Distributions. In the event of the death of a
Participant, any payments due following the death of the
Participant shall be made in accordance with Article 10. In the
case of a Participant who had begun to receive distributions
under Section 11.3(a), distributions shall be made after such
Participant's death at least as often as those made before his
death. In the case of all other Participants, in no event shall
distributions be made later than the end of the calendar year
that marks the fifth anniversary of the date of the Participant's
death.
ARTICLE 10
Plan Administrator
10.1 Plan Administrator. The Plan Administrator shall administer the Plan
on behalf of the Participating Employers. The Plan Administrator may
delegate to a Committee, consisting of at least three (3) members, any
of its powers and duties with respect to operation of this Plan. If a
Committee is appointed, and a vacancy occurs on the Committee that
results from death, resignation or otherwise, the Plan Administrator
may appoint a new Committee member. A Committee member may be removed
at any time at the discretion of the Plan Administrator.
10.2 Powers and Duties.
(a) The Plan Administrator shall have full power to administer the
Plan and to construe and apply all of its provisions on behalf of
the Employer and each Participating Employer. It is the intent of
all Participating Employers in adopting this Plan to confer on
the Plan Administrator the maximum discretion permitted by law in
interpreting and administering this Plan. The Employer shall be
the Named Fiduciary within the meaning of Section 402(a) of ERISA
for purposes of Plan administration. The Plan Administrator may
delegate to any other person or organizations any of its powers
and duties with respect to the operation of this Plan. The Plan
Administrator's powers and duties, unless properly delegated,
shall include, but shall not be limited to:
(i) Deciding questions relating to eligibility, continuity of
service, and amount of benefits
(ii) Resolving disputes that may arise with regard to the rights
of employees, Participants and their legal representatives,
or Beneficiaries under the terms of the Plan. Such decisions
by the Plan Administrator shall be deemed final in each case
(iii)Obtaining such information from each Participating Employer
with respect to its employees as shall be necessary to
determine the rights and benefits of such employees under
the Plan. The Plan Administrator may rely conclusively upon
such information furnished by such Employer
(iv) Compiling and maintaining all records necessary for the Plan
(v) Furnishing the Participating Employer, upon request, such
reports with respect to the administration of the Plan as
are reasonable and appropriate
(vi) Authorizing the Trustee to make payment of all benefits as
they become payable under the Plan
(vii)Engaging such legal, administrative, actuarial, investment,
accounting, consulting, and other professional services as
the Plan Administrator deems proper
(viii) Adopting rules and regulations for the administration of
the Plan not inconsistent with the Plan
(ix) Performing other such actions as may be provided for in
other parts of this Plan.
(b) The Plan Administrator shall determine whether domestic relations
orders represent "qualified domestic relations orders" as that
term is defined in Code Section 414(p) or a successor provision.
If the Plan Administrator determines the order is a qualified
domestic relations order, it shall direct the manner and time of
distribution pursuant to the order. Prior to such determination,
the Plan Administrator shall promptly notify the Participant
affected with respect to the order and any payee under the order
of the receipt of the order. The Plan Administrator shall send
such notice to the address set forth in the order, or if the
address are not set forth therein, to the last known address.
Such notice shall state that the Plan Administrator is in the
process of determining whether the order is a qualified domestic
relations order, and such notice also shall permit a reasonable
period under the circumstances for comment with respect to such
determination. During such period the Plan Administrator shall
cause the amounts otherwise payable under the order to be
segregated in a separate account. After the determination is
made, the Plan Administrator shall notify the Participant and any
payee under the order of such determination. Any payee may
designate a representative for receipt of copies of notices sent
to the payee with respect to the order.
10.3 Actions by the Committee. The Committee may act at a meeting, or in
writing without a meeting, by the vote or assent of a majority of its
members. One member shall be appointed Chairman, who shall preside at
meetings, may call such meetings, and may allocate duties among other
members. The Chairman shall appoint one of its members to act as
Secretary to record all actions taken by it. The Chairman shall have
authority to designate in writing one or more of its members as the
person(s) authorized to execute papers and perform other ministerial
duties on behalf of the members of the Committee.
10.4 Interested Members. The member of the Committee, if any, shall
participate in any action of the Committee on a matter in which such
member has a specialized individual interest as a Participant in the
Plan. Such matters shall be determined by a majority of the remainder
of the members of the Committee.
10.5 Indemnification. The Employer shall and does by the following terms
indemnify and hold the members of the Committee, if any, and the Plan
Administrator and each of them,harmless from the effects and
consequences of their acts, omissions, and conduct in their official
capacities, except to the extent that the effects and consequences
thereof shall result from their own willful misconduct, breach of good
faith, or gross negligence in the performance of their duties. The
Employer shall have the right, but not the obligation, to conduct the
defense of such members in any proceeding to which this Section
applies. The foregoing right of indemnification shall not be exclusive
of other rights to which each such member may be entitled as a matter
of law or by other indemnity coverage provided by the emr.
The Employer's obligations under this Section may be satisfied through
purchase of a policy or policies of insurance providing equivalent
protection.
10.6 Conclusiveness of Action. Any action on matters within the discretion
of the Plan Administrator shall be conclusive, final, and binding upon
all Participants of the Plan and upon all persons claiming any rights
hereunder, including Beneficiaries and alternate payees.
10.7 Payment of Expenses. The members of the Committee, if any, and the
Plan Administrator shall serve without compensation for services as
such. However, the Trust Fund shall reimburse such members for all
necessary and proper expenses incurred in carrying out their duties
under the Plan. The compensation or fees of accountants, counsel, and
other specialists and any other costs of administering the Plan or
Trust may be charged to the Trust and, at the discretion of the
Employer, such costs may be reimbursed by the Employer. Such fees and
costs may, at the discretion of the Employer, be paid directly by the
Employer. Costs and expenses applicable to particular investment
funds, Accounts or transactions (e.g., loan fees, brokerage expenses,
responses to tender or proxy matters) may, at the discretion of the
Plan Administrator, be charged to the particular fund(s), Account(s),
or transaction(s) involved.
10.8 Claims Procedure. The Plan Administrator shall give written notice to
any Participant or Beneficiary of the denial of a claim for the
commencement or continuation of benefits under the Plan. Such notice
shall be delivered to the claimant or sent to the claimant's last
known address and shall include a specific reference or references to
pertinent Plan provisions upon which the denial is based, a
description of any additional material or information required for the
claimant to perfect his claim, which description shall indicate why
such material or information is needed, and an explanation of the
Plan's claims review procedure.
In the event that the claimant wishes to appeal his claim's denial, he
or his duly authorized representative shall file a written request
with the Plan Administrator for a review. Such request must be made
within sixty (60) days of the receipt by the claimant of the notice of
his claim denial. The claimant or his representative may review
pertinent documents relating to the claim and its denial and may
submit issues and comments in writing to the Plan Administrator. The
Plan Administrator shall hear such appeal and shall make a decision on
the merits of the claim within sixty (60) days of receipt of a request
for review or, if circumstances require an extension of time for
processing, then as soon as practicable but not later than
one-hundred-and-twenty (120) days after receipt of a request for
review. The decision on review shall be in writing and shall include
specific reasons therefore and specific references to the pertinent
Plan provisions on which the decision is based.
ARTICLE 11
Plan Amendment
11.1 Amendment. The Plan Sponsor reserves the right to amend this Plan and
Trust at any time to any extent and in any manner it may deem
necessary or appropriate without the consent of any Participant,
Beneficiary, Employer, or any other person. The Plan Sponsor (and not
the Trustee) shall be responsible for adopting any amendments
necessary to maintain the qualified status of this Plan and Trust
under Code Sections 401(a) and 501(a). If the Committee is acting as
the administrator in accordance with Section 11.1, it shall have the
authority to adopt Plan and Trust amendments that have no substantial
adverse financial impact on an Employer or the Plan. All interested
parties shall be bound by any amendment, provided that no amendment
shall:
(a) Become effective unless it has been adopted in accordance with
the procedures set forth in Section 14.6,
(b) Except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Trust assets to revert to an
Employer or to be used for, or diverted to, any purpose other
than for the exclusive benefit of Participants and Beneficiaries
entitled to Plan benefits and to defray reasonable expenses of
administering the Plan, or
(c) Decrease the rights of any Employer to benefits accrued
(including the elimination of optional forms of benefits) to the
date on which the amendment is adopted or, if later, the date on
which the amendment becomes effective, except to the extent
permitted under ERISA and the Code.
ARTICLE 12
Termination of the Plan
12.1 Plan Termination/Termination of Employer's Participation. The Plan
Sponsor may, at any time and for any reason, terminate the Plan or
completely discontinue making contributions. Following the occurrence
of either of these events, or in the event of a partial termination of
the Plan within the meaning of Code Section 411(d)(3), all affected
Participants shall be vested in accordance with the provisions of this
Plan. Any Employer may, at any time and for any reason, terminate its
Plan participation by action of its Board of Directors in accordance
with its normal procedures. Written notice of such action shall be
signed and dated by an authorized officer of the Employer and
delivered to the Plan Sponsor. If the effective date of such action is
not specified, it shall be effective on or, as soon as reasonably
practicable, after the date of delivery.
12.2 Right to Terminate the Plan. The Board, in its sole discretion, shall
have the right to terminate the Plan in whole or in part at any time.
Each Participating Employer explicitly disavows any contractual or
other commitment to continue the Plan or any aspect thereof. In the
event of a termination, partial termination or complete
discontinuation of contributions, each affected Participant shall be
one hundred percent (100%) vested in all his Accounts.
12.3 Plan Mergers, Consolidations, and Transfers. The Plan shall not be
automatically terminated by the Employer's acquisition by or merger
with any other company, trade, or business, but the Plan shall be
continued after such merger provided the successor Employer agrees to
continue the Plan with respect to affected Participants herein. All
rights to amend, modify, suspend, or terminate the Plan with respect
to Participants of the Employer shall be transferred to the successor
Employer, effective as of the date of the merger or acquisition. The
merger or consolidation with, or transfer of the allocable portion of
the assets and liabilities of the Fund to any other qualified
retirement plan trust shall be permitted only if the benefit each Plan
Participant would receive, if the Plan were terminated immediately
after such merger or consolidated, or transfer of the allocable
portion of the assets and liabilities, would be at least as great as
the benefit he would have received had this Plan been terminated
immediately before the date of merger, consolidation, or transfer.
12.4 Amendment of Vesting Schedule. If the vesting provisions of this Plan
are amended, including the adoption of an amendment to take into
account the expiration of top-heavy status under the terms of Article
14, Participants with three (3) or more Years of Service, or three (3)
or more years of employment, whether or not consecutive, at the later
of the date the amendment is adopted or becomes effective, shall
automatically be vested, from the point forward, in the greater of the
amount vested under the vesting schedule as amended or the amount
vested under the vesting schedule before the amendment's adoption.
12.5 Amendment and Termination Procedures. The following procedural
requirements shall govern the adoption of any amendment or termination
(a "Change") of this Plan and Trust:
(a) The Plan Sponsor may adopt any Change by action of its Board of
Directors in accordance with its normal procedures. Any action
required to be taken by the Plan Sponsor's Board of Directors may
be taken by any Committee of the Board of Directors appointed in
accordance with the law of the Plan Sponsor's state of
incorporation. The Board of Directors may, by resolution,
delegate to another person any one or more of the powers reserved
to the Board of Directors under the Plan.
(b) The Committee, if acting as Plan Administrator in accordance with
the provisions of this Plan, may adopt any amendment within the
scope of its authority provided under the provisions of this
Plan.
(c) Any Change must be (1) set forth in writing, and (2) signed and
dated by an authorized officer of the Plan Sponsor or, in the
case of an amendment adopted by the Committee, by at least one of
its members.
(d) If the effective date of any change is not specified in the
document setting forth the Change, it shall be effective as of
the date it is signed by the last person whose signature is
required under subsection (c)(2) above, except to the extent that
another effective date is necessary to maintain the qualified
status of this Plan and Trust under Code Sections 401(a) and
501(a).
(e) Unless an amendment expressly provides otherwise, all Employers
shall be bound by any amendment to the Plan.
ARTICLE 13
Trust and the Trustee
13.1 Board to Select Trustee. The Board shall select a Trustee to hold and
invest the Trust Fund in accordance with the terms of a trust
agreement and/or other contract. The Trustee shall be an individual or
individuals, a bank or trust company incorporated under the laws of
the United States or of any state and qualified to operate as a
Trustee or shall be a legal reserve life insurance company or a
combination of such entities. The Board may, from time to time, change
the Trustee then serving under the trust agreement and/or other
contract to another Trustee or elect to terminate the trust and/or
other contract and hold the Plan assets in any other method acceptable
under ERISA.
The Trustee shall invest, manage, acquire, and dispose of the Plan's
assets. However, the Board may, in its sole discretion, retain full
authority to direct the manner in which some or all of the Plan's
assets are invested, managed, acquired, or disposed of by the Trustee,
to appoint an investment manager for that purpose, or to permit
individual Participants and Beneficiaries to select among Investment
Funds selected by the Plan Administrator. The Trustee shall be named
fiduciary within the meaning of ERISA with respect to investment,
management, and control of the Trust Fund, unless such duties are
retained by the Board or otherwise delegated under the terms of the
Trust Agreement and/or other contract. The Trust Agreement and/or
other contract may include provision for participation in a joint or
associated Trust Fund or pooled separate account for the purpose of
pooling investment experience.
ARTICLE 14
Top-Heavy Plan Requirements
14.1 General Rule. For any Plan Year for which this Plan is a top-heavy
plan, as defined in Section 14.6, and notwithstanding any other
provisions of this Plan to the contrary, this Plan shall be subject to
the provisions of this Article XIV.
14.2 Minimum Contribution Provisions. Each Participant who (i) is a Non-Key
Employee, as defined in Section 14.6 and (ii) is employed on the last
day of the Plan Year, even if such individual has failed to complete
one thousand (1,000) Hours of Service during such Plan Year or did not
make Deferral Contributions in such Plan Year, will be entitled to
have the aggregate of contributions allocated to his Employer Matching
Contribution Account, Employer Discretionary Contributions Account,
and his Deferral Account equal to not less than three percent (3%)
(the Minimum Contribution Percentage) of his compensation. The
compensation considered hereunder is "compensation" as defined in
Section 4.4(a) adjusted as described in Section 14.3. The Minimum
Contribution Percentage will be reduced for any Plan Year to the
percentage at which such contributions are made or are required to be
made under the Plan for the Plan Year for the Key Employee for whom
such percentage is the highest for such Plan Year. For this purpose,
the percentage with respect to a Key Employee, as defined in Section
14.6, will be determined by dividing such contributions made for such
Key Employee by the amount of his total Compensation for the Plan Year
that does not exceed two-hundred-thousand dollars ($200,000)
(multiplied by the Adjusted Factor). Notwithstanding the foregoing,
for Plan Years beginning on or after January 1, 1994, the total
Compensation for purposes of this provision shall not exceed
one-hundred-and-fifty-thousand dollars ($150,000) (multiplied by the
Adjusted Factor).
Such amount will be adjusted in the same manner as the amount set
forth in Section 14.3 below.
Contributions considered under the first paragraph of Section 14.2
will include the contributions described above under this Plan and
contributions under all other defined contribution plans required to
be included in an Aggregation Group (as defined in Section 14.6
below), but will not include any plan required in such Aggregation
Group if the plan enables a defined contribution plan required to be
included in such group to meet the requirements of the Code,
prohibiting discrimination as to contributions in favor of Employees
who are officers, shareholders, or highly compensated or prescribing
the minimum participation standards.
Contributions under this Section will not include any contributions
governed by the Social Security Act or any other federal or state law.
14.3 Limitation on Compensation. Annual Participant's Compensation taken
into account under this Article XIV for purposes of calculating
benefits under this Plan will not exceed the first
two-hundred-thousand dollars ($200,000) (multiplied by the Adjusted
Factor). Notwithstanding the foregoing, for Plan Years commencing on
or after January 1, 1994, Compensation taken into account under this
Article XIV for purposes of calculating benefits shall not exceed the
first one-hundred-and-fifty-thousand dollars ($150,000) (multiplied by
the Adjusted Factor). The Compensation considered under this Article
XIV shall be Compensation as defined in Section 4.4(a), but including
any amounts contributed by the Participating Employer under a salary
reduction agreement that are not includable in an Employee's gross
income under Code Sections 125, 402(a)(8), 402(h), or 403(b). The
dollar limitation will be adjusted automatically for each Plan Year to
the amount prescribed by the Secretary of the Treasury or his delegate
pursuant to regulations for the calendar year in which such Plan Year
commences.
14.4 Limitation on Contributions. In the event that the Employer or a
Related Employer also maintains a defined benefit plan providing
benefits on behalf of Participants in this Plan, one of the two
following provisions will apply:
(a) If for the Plan Year this would not be a Top-Heavy Plan if
"ninety percent" (90%) were substituted for "sixty percent" (60%)
in Section 14.6, then the percentage of three percent (3%) used
in Section 14.2 is changed to four percent (4%); or
(b) If for the Plan Year the Plan would continue to be a Top-Heavy
Plan if "ninety percent" (90%) were substituted for "sixty
percent" (60%) in Section 14.6, then the denominator of both the
defined contribution plan fraction and the defined benefit plan
fraction will be calculated as set forth in Section 4.4(c) for
the limitation year ending in such Plan Year by substituting "one
(1)" for "one and twenty-five hundredths (1.25)" in each place
the first figure appears. This subsection (b) will not apply for
such Plan Year with respect to any individual for whom there are
no Employer contributions or forfeitures allocated to his
Employer Matching Contributions Account, Employers Discretionary
Contributions Account, or his Deferral Account or accruals earned
under the defined benefit plan.
14.5 Coordination with Other Plans. If another defined contribution or
defined benefit plan maintained by the Employer or a Related Employer
provides contributions or benefits on behalf of a Participant in this
Plan, the other plan will be treated as a part of this Plan pursuant
to applicable principles (such as Revenue Ruling 81-202 or any
successor ruling) in determining whether this Plan satisfies the
requirements of Sections 14.2, 14.3, and 14.4. The determination will
be made by the Employer on the advice of counsel.
14.6 Determination of Top-Heavy Status. The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of
the Value of Accounts under the Plan for Key Employees (including
former Employees who are Key Employees) exceeds sixty percent (60%) of
the aggregate of the Value of Accounts of all employees, including
former Non-Key Employees, or if this Plan is required to be in an
Aggregation Group, any such Plan Year within such Group is a Top-Heavy
Group.
For purposes of this Section, the capitalized words have the following
meaning:
(a) "Aggregation Group" means the group of plans, if any, that
includes both the group of plans required to be aggregated and
the group of plans permitted to be aggregated.
The group of plans required to be aggregated (the "required
aggregation group") includes:
(i) Each plan of the Employer and/or Related Employer in which a
Key Employee is a Participant; and
(ii) Each other plan of the Employer and/or Related Employer that
enables a plan in which a Key Employee is a participant to
meet the requirements of the Code, prohibiting
discrimination as to contributions or benefits in favor of
Employees who are officers, shareholders, or highly
compensated or prescribing the minimum participation
standards.
The group of plans that are permitted to be aggregated (the
"permissive aggregation group") includes the required aggregation
group plus one or more plans of the Employer and/or a Related
Employer that is not part of the required aggregation group and
that the Employer certifies as a plan within the permissive
aggregation group. Such plan or plans may be added to the
permissive aggregation group only if, after the addition, the
aggregation group as a whole continues not to discriminate as to
contributions or benefits in favor of officers, shareholders, or
the highly compensated and to meet the minimum participation
standards under the Code.
(b) "Determination Date" means for any Plan Year the last day of the
immediately preceding Plan Year.
(c) "Key Employee" means any Employee or former Employee who, at any
time during the Plan Year in question or during any of the four
preceding Plan Years, is, or was one of the following:
(i) An officer of the Employer and/or a Related Employer having
annual Compensation in excess of fifty percent (50%) of the
dollar limitations under Code Section 415(b)(1)(A). Whether
an individual is an officer shall be determined by the
Employer on the basis of all the facts and circumstances,
such as an individual's authority, duties, and term of
office, not on the mere fact that the individual has the
title of an officer. For any such Plan Year, officers will
be no more than the fewer of:
(A) Fifty employees; or
(B) The greater of three employees or ten percent (10%) of
the employees.
For this purpose, the highest-paid officers shall be
selected.
(ii) One of the ten (10) Employees having annual Compensation
from the Employer or from a Related Employer in excess of
the amount in effect under Code Section 415(c)(1)(A) and
owning (or considered as owning, within the meaning of the
constructive ownership rules of the Code) the largest
interests of the Employer in any Related Employer. If two
(2) employees have the same interest in the Employer or a
Related Employer, the employee having the greater annual
Compensation shall be treated as having the greater
interest. An Employee will not be considered a top ten owner
for a Plan Year if the Employee earns less than the maximum
dollar limitation on contributions and other annual
additions to a Participant's Account in a defined
contribution plan under the Code, as in effect for the
calendar year in which the Determination Date falls.
(iii)Any person who owns (or is considered as owning, within the
meaning of the constructive ownership rules of the Code)
more than five percent (5%) of the outstanding stock of the
Employer or a Related Employer or stock possessing more than
five percent (5%) of the combined voting power of all stock
of the Employer or Related Employer.
(iv) A one-percent (1%) owner of the Employer or a Related
Employer having annual Compensation form the Employer and
all Related Employers of more than
one-hundred-fifty-thousand dollars ($150,000) and possession
more than one percent (1%) of the combined total voting
power of all stock of the Employer and Related Employers or
more than one percent (1%) of the outstanding stock of the
Employer and Related Employers. For purposes of this
subsection, Compensation means all items includable as
Compensation for purposes of applying the limitations on
contributions and other annual additions to a Participant's
Account in a defined contribution plan and the maximum
benefit payable under a defined benefit plan under the Code.
(d) "Non-Key Employee" means any employee (and any beneficiary of an
employee) who is not a Key Employee.
(e) "Top-Heavy Group" means the Aggregation Group, if as of the
applicable Determination Date, the sum of the present value of
the cumulative accrued benefits for Key Employees under all
defined benefit plans included in the Aggregation Group plus the
aggregate of the Value of Accounts of Key Employees under all
defined contribution plans included in the Aggregation Group
exceeds sixty percent (60%) of the sum of the present value of
the cumulative accrued benefits for all employees, excluding
former Key Employees, under all such defined benefit plans plus
the aggregate Value of Accounts for all employees, excluding
former Key Employees, under all such defined contribution plans.
If the Aggregation Group that is a To-Heavy Group is a required
aggregation group, each plan in the group will be a Top-Heavy
Plan. If the Aggregation Group that is a Top-Heavy Group is a
permissive aggregation group, only those plans that are part of
the required aggregation group will be treated as Top-heavy
Plans. If the Aggregation Group is not a To-Heavy Group, no plan
within such a group will be a Top-Heavy Plan. The accrued benefit
of a Participant other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the
Participating Employer, or (ii) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Code Section 411
(b)(1)(C).
(f) "Value of Accounts" means the sum of (i) the value, as of the
most recent Valuation Date occurring within the twelve (12)
months ending on the Determination Date, of the Participant's
Accounts, and (ii) contributions due to such Accounts as of the
Determination Date, minus (iii) withdrawals from such Accounts
since such Valuation Date.
In determining whether this Plan constitutes a Top-Heavy Plan,
the Employer (or its agent) will make the following adjustments:
(i) When more than one plan is aggregated, the Employer shall
determine separately for each plan as of each plan's
Determination Date the present value of the accrued benefits
or account balance. The results shall then be aggregated by
adding the results of each plan as of the Determination
Dates for such plans that fall within the same calendar
year.
(ii) In determining the present value of the cumulative accrued
benefit or the amount of the Account of any Employee, such
present value or account will include the amount in dollar
value of the aggregate distributions made to such employee
under the applicable plan during the five (5) year period
ending on the Determination Date unless reflected in the
value of the accrued benefit or account balance as of the
most recent Valuation Date.
The amounts will include distributions to Employees representing
the entire amount credited to their Accounts under the applicable
plan and distributions under a terminated plan, which if it had
not been terminated would have been required to be included in an
Aggregation Group.
(g) Furthermore, in making such determination, such present value of
such Account shall include any rollover contribution (or similar
transfer), as follows:
(i) If the rollover contribution (or similar transfer) is
initiated by the Employee and made to or from a plan
maintained by the Employer and/or a Related Employer, the
plan providing the distribution shall include such
distribution in the present value of such Account; the plan
accepting the distribution shall not include such
distribution, in the present value of such Account unless
the plan accepted it before December 31, 1983.
(ii) If the rollover contribution (or similar transfer) is not
initiated by the Employee or is made from a plan maintained
by the Employer and/or a Related Employer, the plan
accepting the distribution shall include such distribution
in the present value of such Account, whether the plan
accepted the distribution before or after December 31, 1983;
the plan making the distribution shall not include the
distribution in the present value of such Account.
(iii)In any case in which an individual is a Non-Key Employee
with respect to an applicable plan but was a Key Employee
with respect to such plan for any previous Plan Year, any
accrued benefit and any Account of such Employee will be
altogether disregarded.
For this purpose, to the extent that a Key Employee is
deemed to be a Key Employee if he met the definition of Key
Employee within any of the four preceding Plan Years, this
provision will apply following the end of such period of
time.
(h) Furthermore, in making such determination, if an individual has
not performed any services for the Employer or Participating
Employer at any time during the five (5) year period previous to
the Determination Date, such present value of such Account will
be altogether disregarded.
ARTICLE 15
Miscellaneous
15.1 Voluntary Plan. The Plan is purely voluntary on the part of each
Participating Employer and neither the establishment of the Plan nor
any amendment thereof, nor the creation of any Fund or Account, nor
the payment of any benefits shall be construed as giving any person a
legal or equitable right as against a Participating Employer, the
Trustee or the Plan Administrator unless the same shall be
specifically provided for in this Plan or conferred by affirmative
action of the Plan Administrator or the Employer in accordance with
the terms and provisions of this Plan. Nor shall such actions be
construed as giving any Employee or Participant the right to be
retained in the service of a Participating Employer. All Employees
and/or Participants shall remain subject to discharge to the same
extent as though this Plan had not been established.
15.2 Non-alienation of Benefits. Participants and their Beneficiaries shall
be entitled to all the benefits specifically set out under the terms
of the Plan, but said benefits or any of the property rights therein
shall not be assignable or distributable to any creditor or other
claimant of such Participant. Except as permitted under the loan
provisions of Section 6.4, a Participant shall not have the right to
anticipate, assign, pledge, accelerate, or in any way dispose of or
encumber any of the monies or benefits or other property that may be
payable or become payable to such Participant or his Beneficiary. The
preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is determined to be a qualified domestic relations order, as defined
in Code Section 414(p) and determined pursuant to Section 10.2(b) or
any domestic relations order entered before January 1, 1985.
15.3 Inability to Receive Benefits. If the Plan Administrator received
evidence that (a) a person entitled to receive any payment under the
Plan is physically or mentally incompetent to receive payment and to
give a valid release thereof, and (b) another person or an institution
is then maintaining or has custody of such person, and no guardian,
committee, or other representative of the estate of such person has
been duly appointed by a court of competent jurisdiction, such payment
may be made to such other person or institution referred to in (b)
above. The release to such other person or institution shall be a
valid and compete discharge for the payment.
15.4 Lost Participants. If the Plan Administrator is unable, after
reasonable and diligent effort, to locate a Participant or Beneficiary
who is entitled to payment under the Plan, the payment due such person
shall become a forfeiture after three years; provided, however, that
if the Participant or Beneficiary later files a claim for his benefit
it shall be reinstated. Notification by certified or registered mail
to the last known address of the Participant or Beneficiary shall be
deemed a reasonable and diligent effort to locate such person.
15.5 Limitation of Rights. Nothing in the Plan expressed or implied is
intended or shall be construed to confer on or give to any person,
firm, or association other than the Employer, the Participating
Employer, the Participant, and their successors in interest any right,
remedy, or claim under or by reason of this Plan.
15.6 Invalid Provisions. In case any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining parts of this Plan, but this Plan shall be
construed and enforced as if said illegal and invalid provisions had
never been inserted herein.
15.7 One Plan. This Plan may be executed in any number of counterparts,
each of which shall be deemed an original and said counterparts shall
constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.
15.8 Governing Law. The Plan shall be governed by and construed in
accordance with the federal laws governing employee benefit plans
qualified under the Code and in accordance with the laws of the State
of California where such laws are not permitted by the aforementioned
federal laws.
(CORPORATE SEAL) CUBIC CORPORATION
ATTEST: By:
Title:
By:
Title:
Secretary
Date:
Place: