SAFEGUARD SCIENTIFICS, INC.
STOCK SAVINGS PLAN
(As Amended and Restated Effective January 1, 1989)
SAFEGUARD SCIENTIFICS, INC.
STOCK SAVINGS PLAN
TABLE OF CONTENTS
Page
PREAMBLE 1
ARTICLE I - DEFINITIONS 1
1.1 Account 1
1.2 Accrual Computation Period 1
1.3 Adjustment Factor 1
1.4 Affiliate 2
1.5 Anniversary Date 2
1.6 Beneficiary 2
1.7 Board of Directors 2
1.8 Break in Service 2
1.9 Code 3
1.10 Company 3
1.11 Compensation 3
1.12 Deferral Agreement 4
1.13 Deferral Amount 4
1.14 Deferred Retirement Date 4
1.15 Disregarded Prior Service 4
1.16 Effective Date 6
1.17 Eligibility Computation Period 6
1.18 Eligible Employee 6
1.19 Employee 7
1.20 Employer 7
1.21 Employment Commencement Date 7
1.22 Entry Date 7
1.23 ERISA 7
1.24 Excused Absence 7
1.25 Family Member 9
1.26 Fund 9
1.27 Highly Compensated Employee 9
1.28 Hour of Service 11
1.29 Investment Manager 13
1.30 Limitation Compensation 13
1.31 Limitation Year 15
1.32 Named Fiduciary 15
1.33 Non-Highly Compensated Employee 15
1.34 Normal Retirement Age 15
1.35 Normal Retirement Date 15
1.36 Novell 15
1.37 Parenthood Leave 15
1.38 Participant 16
1.39 Period of Service 16
1.40 Period of Severance 16
1.41 Plan 16
1.42 Plan Administrator 16
1.43 Plan Year 17
1.44 Predecessor Company 17
1.45 Quadro 17
1.46 Reemployment Commencement Date 17
1.47 Required Beginning Date 17
1.48 Severance from Service Date 17
1.49 Sponsoring Affiliate 17
1.50 Spouse 17
1.51 Stock 18
1.52 Total Disability 18
1.53 Trust Agreement 18
1.54 Trustee 18
1.55 Trust Fund 18
1.56 Valuation Date 18
1.57 Vesting Computation Period 18
1.58 Year of Eligibility Service 18
1.59 Year of Service 19
1.60 Year of Vesting Service 20
ARTICLE II - PARTICIPATION 20
2.1 Eligibility to Participate 20
2.2 Readmission after Period of Severance and
Employment Termination 21
2.3 Changes in Status 22
ARTICLE III - EMPLOYER CONTRIBUTIONS 23
3.1 Employer Contributions 23
3.2 Timing of Contributions 23
3.3 Contingent Nature of Contributions 24
3.4 Exclusive Benefit; Refund of Contributions 24
3.5 Investment of Employer Contributions 25
3.6 In Service Withdrawals 25
ARTICLE IV - PARTICIPANT CONTRIBUTIONS 26
4.1 Mandatory Contributions 26
4.2 Voluntary Contributions 26
4.3 Rollover Contributions 26
4.4 Restoration Contributions 27
4.5 Eligibility for Arrangement 27
4.6 Effective Date of Deferral Agreements 27
4.7 Deferral Amounts 28
4.8 Establishment of Separate Account 29
4.9 Distributions from Participant's Deferral
Contribution Subaccount 29
4.10 Hardship Withdrawals: Participant's Deferral
Contribution Subaccount 30
4.11 In-Service Withdrawals from After-Tax Voluntary
Contribution Subaccounts 31
4.12 Loans 31
4.13 Excused Absence from Service 34
ARTICLE V - LIMITATIONS ON CONTRIBUTIONS 34
5.1 Maximum Amount of Deferral Contributions 34
5.2 Limitations on Deferral Contributions of Highly
Compensated Participants 36
5.3 Limitations on Employer Matching Contributions and
Voluntary Contributions of Highly Compensated
Participants. 39
5.4 Code Section 415 Limitations 41
5.5 Order of Reductions 44
ARTICLE VI - ALLOCATION OF CONTRIBUTIONS 44
6.1 Allocation of Deferral Amounts 44
6.2 Allocations to Matching Contribution Subaccounts 44
6.3 Multiple Employers 45
6.4 Allocations to After-Tax Voluntary Contribution
Subaccounts 45
6.5 Allocations to Restoration Contribution Subaccounts 45
6.6 Allocations to Rollover Contribution Subaccounts 45
6.7 Determination of Active Participant Status for an
Accrual Computation Period 45
6.8 Non-vested Amounts 46
6.9 Special Rules for Top-Heavy Plans 47
ARTICLE VII - INVESTMENTS 48
7.1 Investment of Assets 48
7.2 Crediting of Contributions 48
7.3 Crediting of Investment Results 49
7.4 Investment Direction By Participants 50
ARTICLE VIII - RETIREMENT AND DISABILITY BENEFITS 53
8.1 Normal Retirement Benefit 53
8.2 Deferred Retirement Benefit 54
8.3 Disability Benefit 54
8.4 Effect of Quadro 54
ARTICLE IX - DEATH BENEFITS AND SURVIVING SPOUSE'S BENEFITS 54
9.1 Pre-Distribution Death Benefit 54
9.2 Death After Benefit Commencement Date 55
9.3 Spousal Consent to Designation of Alternative
Beneficiary 56
9.4 Beneficiary Designation 56
9.5 Effect of Quadro 56
ARTICLE X - NONFORFEITURE PROVISIONS (VESTING) 57
10.1 Full and Immediate Vested Interests 57
10.2 Employer Matching Contribution Subaccounts 57
10.3 Disregarded Service for Vesting Purposes 57
10.4 Amendments to the Vesting Schedule 58
ARTICLE XI - METHODS AND TIMING OF BENEFIT DISTRIBUTIONS 58
11.1 Forms of Benefit Payments 58
11.2 Benefit Commencement Dates 60
11.3 Post-Distribution Credits 62
11.4 Direct Rollovers. 62
11.5 Participant's Consent to Distribution of Benefits 63
ARTICLE XII - TOP-HEAVY PROVISIONS 64
12.1 Top-Heavy Definitions 64
12.2 Top-Heavy Rules 67
ARTICLE XIII - PLAN ADMINISTRATOR 69
13.1 Appointment and Tenure 69
13.2 Meetings; Majority Rule 69
13.3 Delegation 69
13.4 Authority and Responsibility of the Plan
Administrator 69
13.5 Reporting and Disclosure 70
13.6 Construction of the Plan 71
13.7 Engagement of Assistants and Advisers 71
13.8 Bonding 72
13.9 Compensation of the Plan Administrator 72
13.10 Indemnification of the Plan Administrator 72
ARTICLE XIV - ALLOCATION AND DELEGATION OF AUTHORITY 72
14.1 Authority and Responsibilities of Employer 72
14.2 Authority and Responsibilities of the Plan
Administrator 73
14.3 Authority and Responsibilities of the Trustee 73
14.4 Limitations on Obligations of Named Fiduciaries 73
ARTICLE XV - CLAIMS PROCEDURES 73
15.1 Application for Benefits 73
15.2 Appeals of Denied Claims for Benefits 74
15.3 Appointment of the Named Appeals Fiduciary 75
ARTICLE XVI - AMENDMENT AND TERMINATION 75
16.1 Amendment 75
16.2 Plan Termination 76
16.3 Complete Discontinuance of Employer Contributions 77
16.4 Suspension of Employer Contributions 77
16.5 Mergers and Consolidations of Plans 78
16.6 Adoption by Affiliates 78
ARTICLE XVII - NONALIENATION OF BENEFITS 79
17.1 Nonalienation of Benefits 79
ARTICLE XVIII - MISCELLANEOUS PROVISIONS 79
18.1 No Contract of Employment 79
18.2 Severability of Provisions 79
18.3 Heirs, Assigns and Personal Representatives 80
18.4 Headings and Captions 80
18.5 Gender and Number 80
18.6 Controlling Law 80
18.7 Funding Policy 80
18.8 Title to Assets 80
18.9 Payments to Minors, Etc 80
18.10 Reliance on Data and Consents 81
18.11 Lost Payees 81
18.12 Counterparts 81
APPENDIX A 83
APPENDIX B 84
SAFEGUARD SCIENTIFICS, INC. STOCK SAVINGS PLAN
WHEREAS, Safeguard Scientifics, Inc. (the "Company") established
the Safeguard Scientifics, Inc. Stock Savings Plan (the "Plan") for the
benefit of certain of its employees effective January 1, 1981; and
WHEREAS, the Company reserved to itself the right to amend the Plan
in Section 16.1 thereof; and
WHEREAS, the Company desires to amend and restate the Plan to
comply with the Omnibus Budget Reconciliation Act of 1986, the Tax
Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Miscellaneous Revenue Act of 1988, the Omnibus Budget Reconciliation Act
of 1993 and the final regulations under the Retirement Equity Act of
1984 and other changes in the law, to change the method of crediting
service for purposes of eligibility to participate and vesting,
effective January 1, 1995, and to make certain other changes;
NOW, THEREFORE, effective January 1, 1989 (except where other
effective dates are specifically provided herein), subject to approval
by the District Director of Internal Revenue, Safeguard Scientifics,
Inc. hereby sets forth the terms of the Safeguard Scientifics Stock
Savings Plan as follows:
ARTICLE I
DEFINITIONS
1.1 Account shall mean the entire interest of a Participant
in the Plan, including the Participant's Deferral Contribution
Subaccount, After-Tax Voluntary Contribution Subaccount, Matching
Contribution Subaccount, and Rollover Contribution Subaccount. Unless
otherwise specified, the value of a Participant's Account shall be
determined as of the Valuation Date coincident with or next following
the occurrence of the event to which reference is made.
1.2 Accrual Computation Period shall mean each calendar
month.
1.3 Adjustment Factor shall mean the cost of living
adjustment factor prescribed by the Secretary of the Treasury under
Code section 415(d) for years beginning after December 31, 1987, as
applied to such items and in such manner as the Secretary shall
provide.
1.4 Affiliate shall mean (a) any corporation that is a member
of a "controlled group of corporations" within the meaning of Code
section 414(b) of which the Employer is then a member; (b) any trade or
business, whether or not incorporated, that under the regulations
prescribed by the Secretary of the Treasury pursuant to Code section
414(c) is then under common control with the Employer; (c) an
organization which is part of an affiliated service group with the
Employer and the regulations thereunder; and (d) any other entity
required to be aggregated with the Employer pursuant to regulations
under Code section 414(o). An entity shall be considered an Affiliated
Company only with respect to such period as the relationship described
in the preceding sentence exists. For the purposes of applying Code
sections 414(b) and (c) to the limitations on benefits set forth in
Section 5.4, the phrase "more than 50 percent" shall be substituted for
the phrase "at least 80 percent" each place it appears in Code section
1563(a)(1).
1.5 Anniversary Date shall mean the first day of the Plan
Year.
1.6 Beneficiary shall mean: as to any Participant who is
married at the time of his death, the Participant's Spouse, except as
provided in paragraphs (b) and (c) hereof;
(a) as to any Participant who (A) is not married at
the time of his death, or (B) is married, but whose spouse has consented
to the designation of a Beneficiary other than such Spouse (to the
extent of such consent), the persons or entities designated by the
Participant in writing to be his Beneficiaries hereunder; and
(b) as to any Participant who has not designated a
Beneficiary (or who is not survived by such designated Beneficiary), as
provided in paragraph (b) above, and who has no surviving spouse, (1)
the Participant's issue (including stepchildren and adopted persons),
equally, with the issue of deceased issue to be by representation; (2)
if there be no such issue or children of issue, then the surviving
parents of the Participant (equally if there be more than one); and (3)
if there be neither children nor issue of children, and if there be no
surviving parents, then the Participant's estate.
1.7 Board of Directors shall mean the Board of Directors of
the Company.
1.8 Break in Service,effective January 1, 1995, shall mean
an Eligibility or Vesting Computation Period in which an Employee does
not have more than 500Hours of Service. However, no Break in Service
shall be deemed to have occurred until there occurs a termination of the
employer-employee relationship between the Employer and the Employee or
Participant involved. Any Break in Service shall be deemed to have
commenced on the first day of the Computation Period in which it occurs.
No Break in Service shall be deemed to occur during an Employee's
initial Eligibility Computation Period solely because of his failure to
complete more than 500 Hours of Service during any one Plan Year
occurring in part during such Period if the Employee completes one Year
of Service during such initial Eligibility Computation Period. A Break
in Service shall not be deemed to have occurred during any period of
Excused Absence if the Employee returns to the service of the Employer
within the time permitted pursuant to the provisions of the Plan setting
forth circumstances of Excused Absence.
1.9 Code shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.10 Company shall mean Safeguard Scientifics, Inc., a
Pennsylvania corporation, and any successor thereto which adopts the
Plan.
1.11 Compensation shall mean the base salary or wages paid to
or on behalf of a Participant by the Employer for services rendered as
an Eligible Employee during the Plan Year to which reference is made,
exclusive of compensation paid with respect to service performed prior
to the date on which the Employee became a Participant under the Plan,
but including without limitation, shift differentials and (in the case
of a Participant paid partly on a commission basis) the commissions paid
currently. Compensation shall include any contributions made pursuant
to a salary reduction agreement entered into by the Participant pursuant
to a plan described in Code sections 125 or 401(k). Compensation shall
not include overtime payments, bonuses, foreign service premiums,
differentials or allowances (other than shift differentials), relocation
payments, tuition payments, patent awards, or any other non-basic form
of current compensation, nor shall Compensation include Employer
contributions to this or any other plan of deferred compensation,
Employer contributions to Social Security, the value of any fringe
benefits provided by the Employer, amounts paid in reimbursement of, or
in lieu of, expenses incurred by the Participant in the performance of
his duties, nor the value of non- money awards or gifts made by the
Employer. Compensation shall, however, include compensation paid by the
Employer during a period of short term disability.
A Participant's Compensation shall in no event exceed $200,000
as adjusted in accordance with Code section 415(d), for the Plan Year.
In determining a Participant's Compensation 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 Plan Year.
Effective January 1, 1994, a Participant's Compensation for
any Plan Year shall in no event exceed $150,000 as adjusted by the
Commissioner of Internal Revenue for increases in the cost of living in
accordance with Code section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year shall apply to any period, not
exceeding twelve months, beginning in such calendar year over which
Compensation is determined (the "determination period"). If a
determination period consists of fewer than twelve months, the
applicable limit (as adjusted) shall be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is twelve.
In determining the Compensation of a Participant for purposes
of the limit set forth in the preceding paragraph, the rules of Code
section 414(q)(6) shall apply, except that 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 Plan Year. If, as a result of the application
of such rules, the adjusted $150,000 limit is exceeded, then the limit
shall be prorated among the affected individuals in proportion to each
such individual's Compensation as determined under this Section 1.11
prior to the application of the limit.
1.12 Deferral Agreement shall mean the written agreement
between the Participant and the Employer pursuant to which the
Participant agrees to accept a reduction in salary, wages or other
current remuneration, or declines an increase in the same, and pursuant
to which the Employer agrees to contribute the amount of such reduction
or declined increase as an Employer contribution to the Participant's
Deferral Contribution Subaccount under the Plan.
1.13 Deferral Amount shall mean the amount of remuneration
which is yielded or declined by the Participant pursuant to a Deferral
Agreement and which the Employer has agreed to contribute to this Plan
to the Participant's Deferral Contribution Subaccount.
1.14 Deferred Retirement Date shall mean the date of a
Participant's retirement from the service of the Employer subsequent to
his Normal Retirement Date.
1.15 Disregarded Prior Service shall mean Years of Service
completed prior to any Period of Severance where:
(a) the Participant had either
(1) no vested interest in that portion of his
Account under the Plan attributable to Employer contributions prior to
such Period of Severance, or
(2) a vested interest in that portion of his
Account under the Plan attributable to Employer contributions prior to
such Period of Severance, received a distribution of the full amount of
such vested interest, and failed to repay the amount of such vested
interest prior to experiencing a Period of Severance of at least five
year's duration; and
(b) the number of consecutive years of duration of
such Period of Severance experienced by the Participant (including in
such series of consecutive years the Period of Severance with regard to
which a determination is being made as to whether prior Years of Service
are Disregarded Prior Service hereunder) equals or exceeds both:
(1) five (5), and
(2) the number of Years of Service, other than
Disregarded Prior Service, completed by the Employee (whether or not
such Years of Service were completed as an employer), prior to the
commencement of such period.
Effective January 1, 1995, Disregarded Prior Service
shall mean Years of Service completed prior to any Break in Service,
where the Participant had either:
(a) no vested interest in that portion of his Account
under the Plan attributable to Employer contributions prior to such
Break in Service and the number of consecutive one-year Breaks in
Service experienced by the Participant (including in such series of
consecutive one-year Breaks in Service, the Break in Service with regard
to which a determination is being made as to whether prior Years of
Service are Disregarded Prior Service hereunder) equals or exceeds the
greater of (A) five, and (B) the number of Years of Service, other than
Disregarded Prior Service, completed by the Employee prior to such Break
in Service; or
(b) a vested interest in that portion of his Account
under the Plan attributable to Employer contributions prior to such
Break in Service, received a distribution of the full amount of such
vested interest, and failed to repay the amount of such vested interest
prior to experiencing five consecutive one-year Breaks in Service.
Notwithstanding the foregoing, in the case of a series of
consecutive Breaks in Service beginning before January 1, 1995, and
ending after January 1, 1995, Years of Service prior to such Breaks
shall not be Disregarded Prior Service if such Years of Service would
not have been Disregarded Prior Service had the provisions of the Plan
in effect on such date remained in effect.
1.16 Effective Date shall mean January 1, 1981. The
effective date of the amended and restated Plan as set forth herein is
January 1, 1989, except as otherwise provided herein.
1.17 Eligibility Computation Period, effective January 1,
1995, shall mean a 12-consecutive-month period. An Employee's first
Eligibility Computation Period shall begin on his Employment
Commencement Date (or Reemployment Commencement Date, as applicable),
and his succeeding Eligibility Computation Periods shall be the Plan
Year which includes the first anniversary of his Employment Commencement
Date (or Reemployment Commencement Date), and each Plan Year thereafter.
1.18 Eligible Employee shall mean each person in the employ
of the Employer who is not a leased employee, who is not a person whose
terms and conditions of employment are determined through collective
bargaining with a third party if the issue of retirement benefits has
been a bona fide subject of collective bargaining, unless the collective
bargaining agreement provides for the inclusion of such person as a
Participant in the Plan, and who performs services in an eligible
classification of Employees (as hereinafter defined). For purposes of
the Plan, the eligible classifications of Employees shall be as follows:
(a) salaried Employees and, effective January 1,
1994, hourly and salaried Employees of Safeguard Scientifics, Inc.
except Employees in the Phoenix division of Safeguard Scientifics, Inc.;
(b) hourly and salaried Employees of Norelkote, Inc.
a subsidiary of Safeguard Scientifics, Inc. until its merger into
Safeguard Scientifics, Inc. on November 30, 1990;
(c) effective January 1, 1992, hourly and salaried
Employees of Technology Leaders Management, Inc., a subsidiary of
Safeguard Scientifics, Inc.;
(d) effective March 17, 1994, hourly and salaried
Employees of Safeguard International Group, Inc., a subsidiary of
Safeguard Scientifics, Inc.;
(e) any additional one or more categories or
classifications of Employees which the Board of Directors determines at
any time shall be an eligible classification of Employees for one or
more Plan Years designated by the Board of Directors. Notwithstanding
the foregoing, Employees of any division or at any location of Safeguard
Scientifics, Inc. or either of the above designated subsidiaries that
was not in existence on December 31, 1994, shall not be Eligible
Employees unless and until the Board of Directors determines that such
Employees shall be an eligible classification of Employees. The Board
of Directors shall cause to be appended hereto, as Appendix A, a
description of each eligible classification of Employees that shall be
covered by the Plan pursuant to this subsection (e) and the period of
such coverage.
1.19 Employee shall mean each person who is employed by the
Employer or an Affiliate and, effective on or after January 1, 1987, any
leased employee within the meaning of Code section 414(n)(2).
Notwithstanding the foregoing, if such leased employees constitute less
than 20% of the non-highly compensated work force of the Employer and
the Affiliates within the meaning of Code section 414(n)(5)(C)(ii), the
term Employee shall not include those leased employees covered by a plan
described in Code section 414(n)(5). To the extent permitted under Code
section 414(r) and elected by the Company, Employee shall not include
any employees of an Affiliate which operates one or more separate lines
of business from the Employer.
1.20 Employer shall mean the Company and each Sponsoring
Affiliate.
1.21 Employment Commencement Date shall mean, with respect
to any individual, the first date on which that individual performs an
"Hour of Service" in the employ of the Employer, whether or not such
service was performed as an Employee.
1.22 Entry Date shall mean (a) the Effective Date, and (b)
with respect to each Employee, the first day of such Employee's first
payroll period coinciding with or next following the first day of any
calendar month.
1.23 ERISA shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.24 Excused Absence means any of the following:
(a) Absence on leave granted by the Employer for any
cause for the period stated in such leave or, if no period is stated,
then for six (6) months and any extensions that the Employer may grant
in writing. For the purposes of this provision, the Employer will give
similar treatment to all Employees in similar circumstances.
(b) Absence in any circumstance so long as the
Employee continues to receive his regular compensation from the
Employer.
(c) Absence in the armed forces of the United States
or government service in time of war or national emergency.
(d) Absence by reason of illness or disability until
such time as the employment relationship between Employer and Employee
is severed.
An "Excused Absence" shall cease to be an "Excused Absence"
and shall be deemed a Period of Severance commencing as of the
Employee's Severance from Service Date if the Employee fails to return
to the service of the Employer (A) within five (5) days of the
expiration of any leave of absence referred to in subsection (a) of this
Section; (B) at such time as the payment of regular compensation
referred to in subsection (b) of this Section is discontinued; (C)
within six (6) months after his discharge or release from active duty,
or, if the Employee does not return to the service of the Employer
within the said six (6) month period by reason of a disability incurred
while in the armed forces, if he returns to service with the Employer
upon the termination of such disability as evidenced by release from
confinement in a military or veterans health care facility; or (D) upon
recovery from illness or disability. The Employer shall be the sole
judge of whether or not recovery from illness or disability has occurred
for this purpose.
Effective January 1, 1995, an Excused Absence shall cease to
be an Excused Absence and shall be deemed a Break in Service as of the
later of (1) and (2), where
(1) is the first day of such absence if the
Employee fails to return to the service of the Employer (A) within five
(5) days of the expiration of any leave of absence referred to in
subsection (a) of this Section; (B) at such time as the payment of
regular compensation referred to in subsection (b) of this Section is
discontinued; (C) within six (6) months after his discharge or release
from active duty, or, if the Employee does not return to the service of
the Employer within the said six (6) month period by reason of a
disability incurred while in the armed forces, if he returns to service
with the Employer upon the termination of such disability as evidenced
by release from confinement in a military or veterans health care
facility; or (D) upon recovery from illness or disability; or
(2) is the first day of the first Plan Year in
which the Employee fails to complete more than five hundred (500) Hours
of Service.
The Employer shall be the sole judge of whether or not
recovery from illness or disability has occurred for this purpose.
1.25 Family Member shall mean, with respect to any Employee
or former Employee, the spouse and lineal ascendants and descendants
(and the spouses of such ascendants and descendants) of such Employee or
former Employee.
1.26 Fund shall mean all of the assets of the Plan held by
the Trustee (or any nominee thereof) at any time under the Trust
Agreement.
1.27 Highly Compensated shall mean a highly compensated
active Employee or a highly compensated former Employee. The
determination of who is a Highly Compensated Employee shall be made in
accordance with Code section 414(q) and Treasury regulations thereunder.
(a) Active Employees. A highly compensated active
Employee is any Employee who performs services for the Employers and
Affiliates during the Plan Year (calendar year) for which the
determination of who is highly compensated is being made and who:
(1) receives compensation from the Employers and
Affiliates in excess of $75,000 (as adjusted by the Adjustment Factor)
during the Plan Year;
(2) receives compensation from the Employers and
Affiliates in excess of $50,000 (as adjusted by the Adjustment Factor)
during the Plan Year and is a member of the top-paid group for the Plan
Year;
(3) is an officer (within the meaning of Code
section 416(i)) of an Employer or an Affiliate during the Plan Year and
receives compensation during the Plan Year that is greater than 50% of
the dollar limitation in effect under Code section 415(b)(1)(A)); or
(4) is a five-percent owner (within the meaning
of Code section 416(i)) of an Employer or an Affiliate at any time
during the Plan Year.
(b) Former Employees. A highly compensated former
Employee with respect to any Plan Year is any Employee who separated
from service (or was deemed to have separated from service) prior to
such Plan Year, performs no services for the Employers and Affiliates
during such Plan Year, and was a highly compensated active Employee for
either the year in which the separation from service occurred (the
"separation year") or any Plan Year ending on or after the Employee's
55th birthday.
Notwithstanding the foregoing, an Employee who separated
from service with an Employer or an Affiliate prior to January 1, 1987,
shall be a highly compensated former Employee in accordance with Q&A-
4(d) of section 1.414(q)-1T of Treasury regulations only if during the
separation year (or the Plan Year immediately preceding the separation
year) or any Plan Year ending on or after the Employee's 55th birthday
(or the Plan Year immediately preceding the Employee's 55th birthday):
(1) he or she was a five-percent owner of an
Employer or an Affiliate, as determined in accordance with Code section
414(q), at any time during such Plan Year; or
(2) he or she received compensation in excess of
$50,000 during such year.
(c) Top-Paid Group. An Employee is in the "top-paid
group" of Employees for any Plan Year if such Employee is in the group
consisting of the top 20% of the Employees when ranked on the basis of
compensation paid during such Plan Year. For purposes of determining
the number of Employees in the "top-paid group," Employees described in
Code section 414(q)(8) and Q&A-9(b) of section 1.414(q)-1T of Treasury
regulations shall be excluded.
(d) Officers. No more than 50 Employees (or, if
less, the greater of three Employees or 10% of the Employees) shall be
treated as officers.
(e) Compensation Defined. For purposes of this
Section 1.27, "compensation" shall mean Limitation Compensation plus
elective or salary deferral contributions to a plan described in Code
section 125 or section 401(k).
(f) Calendar Year Election. The determination of the
class of Highly Compensated Employees under the Plan for a Plan Year
shall be made pursuant to the "calendar year calculation election" set
forth in Q&A-14(b) of section 1.414(q)-1T of Treasury Regulations.
Accordingly, for purposes of this Section 1.27, both the "determination
year" and the "look-back year" (as defined in section 1.414(q)-1T of
Treasury Regulations) are the Plan Year for which the determination of
who is a Highly Compensated Employee is being made.
1.28 Hour of Service shall be defined in a manner consistent
with regulations published by the Secretary of Labor at Title 29, Code
of Federal Regulations, section 2530.200b-2, and shall mean (a) each
hour for which an employee is paid or entitled to payment for the
performance of duties for the Employer or an Affiliated Company during
the applicable Computation Period, (b) each hour for which an employee
is paid or entitled to payment by the Employer or an Affiliated Company
on account of a period of time during which no duties are performed
(irrespective of whether or not the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury or military duty, or leave of absence, and (c)
each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer or an Affiliate. Hours of
Service shall be credited to the computation period in which earned,
regardless of when determined or awarded.
Effective January 1, 1995, an Hour of Service shall be
determined as follows:
(a) Hours Credited. An Employee shall be credited
with an Hour of Service for the following hours:
(1) Each hour for which the Employee is directly
or indirectly paid or entitled to payment by the Employer or an
Affiliate for the performance of duties.
(2) Each hour for which back pay, irrespective
of mitigation of damages, has been either awarded or agreed to by the
Employer or an Affiliate.
(3) Each hour for which an Employee is directly
or indirectly paid or is entitled to payment by the Employer or an
Affiliate on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence;
provided that no Hours of Service shall be credited to an Employee for
retirement (including disability retirement) payments made pursuant to
this Plan or any other qualified retirement plan; and provided further,
that, except as provided in paragraph (4) below, the number of Hours of
Service to be credited for any single continuous period during which the
Employee performs no duties shall not exceed 501.
(4) Each week of absence for military service in
the armed forces of the United States from which service the Employee
returns to the Employer or an Affiliate within the period during which
he has legally protected reemployment rights shall count as a number of
Hours of Service equal to the number of Hours of Service that would have
been credited to the Employee with respect to the Employee's customary
week of employment during the month immediately preceding the date on
which absence for military service commenced. Service rendered at
overtime or other premium rates shall be credited at the rate of one
Hour of Service for each hour for which pay is earned, regardless of the
rate of compensation in effect with respect to such hour.
(5) Solely for the purpose of determining
whether an Employee has incurred a Break in Service, an Employee who is
absent from work on a Parenthood Leave shall receive credit for the
Hours of Service which would otherwise have been credited to such
Employee but for such absence, or, in any case in which such Hours of
Service cannot be determined, eight Hours of Service per day of such
absence. The total number of hours treated as Hours of Service under
this paragraph (5) for any Parenthood Leave, when aggregated with any
hours credited under any other provision of this Section 1.28 which
relate to the same absence, shall not exceed 501.
The Hours of Service credited under this paragraph
(5) shall be credited (A) in the Eligibility Computation Period in which
the absence begins if the crediting is necessary to prevent a Break in
Service in that Computation Period, or (B) in all other cases, in the
following Computation Period.
(b) Non-Credited Payments. Hours of Service shall
not be credited for payments made or due under a plan maintained solely
to comply with any worker's compensation, unemployment compensation or
disability insurance laws, nor for payments which solely reimburse an
Employee for medical or medically-related expenses.
(c) Non-Duplication of Credit. No Hours of Service
credited under any paragraph of subsection (a) shall be credited under
another such paragraph.
(d) Counting Hours for Non-Duty Periods. In the case
of a payment which is made or due on account of a period during which an
Employee performs no duties, and which results in the crediting of Hours
of Service under paragraph (a)(3), or in the case of an award or
agreement for back pay, to the extent that such award or agreement is
made with respect to a period described in paragraph (a)(3), the number
of Hours of Service to be credited shall be determined in accordance
with the applicable regulations prescribed by the Secretary of Labor set
forth in 29 CFR (section)2530.200b-2(b).
(e) Crediting Hours of Service to Eligibility
Computation Periods. Hours of Service described in paragraphs (a)(1),
(2) and (3) shall be credited to Eligibility Computation Periods in
accordance with the applicable regulations prescribed by the Secretary
of Labor set forth in 29 CFR (section)2530.200b-2(c).
(f) Crediting of Hours of Service. If an Employee's
payroll records are normally kept on other than an hourly basis, as
described below, the following equivalencies may be utilized in
determining the number of Hours of Service to which the Employee is
entitled to be credited:
Basis Upon Which the Credit Granted if Participant
Participant's Payroll Earns At Least One Hour
Records are Maintained of Service During Period
Shift Actual hours for full shift
Daily 10 Hours of Service
Weekly 45 Hours of Service
Biweekly 90 Hours of Service
Semimonthly 95 Hours of Service
Monthly 190 Hours of Service
Hours of Service may also be credited solely on the basis of
hours worked or regular time hours, in accordance with regulations
issued by the Secretary of Labor. For all purposes under this Plan, if
Hours of Service are credited solely on the basis of hours worked, 870
hours worked shall be treated as the equivalent of 1,000 Hours of
Service. If Hours of Service are credited solely on the basis of
regular time hours, 750 regular time hours shall be treated as the
equivalent of 1,000 Hours of Service.
1.29 Investment Manager shall mean any fiduciary (other than
a Trustee or Named Fiduciary) who has the power to manage, acquire, "or
dispose of any asset of the Plan and who has qualified as an "investment
manager" within the meaning of section 3(38) of ERISA.
1.30 Limitation Compensation shall mean the sum of the
amount included under (a) below, but excluding the amounts set forth
under (b) below:
(a) Inclusions. Limitation Compensation shall
include the following:
(1) wages, salaries, fees for professional
services and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment with an Employer or an Affiliate to the extent that
the amounts are includable in gross income;
(2) earned income (with respect to Employees of
an Employer or an Affiliate within the meaning of Code section
401(c)(1));
(3) for purposes of paragraphs (1) and (2),
earned income from sources outside the United States (as defined in Code
section 911(b);
(4) amounts described in Code sections
104(a)(3), 105(a) and 105(h), but only to the extent they are includible
in the Employee's gross income from an Employer or an Affiliate;
(5) amounts paid or reimbursed by an Employer or
an Affiliate for moving expenses incurred by the Employee to the extent
that such amounts are not deductible under Code section 217;
(6) the value of a nonqualified stock option
granted to the Employee by an Employer or an Affiliate to the extent the
value is includible in the Employee's gross income; and
(7) the amount includible in the Employee's
gross income from an Employer or an Affiliate upon making the election
in Code section 83(b).
(b) Exclusions. Limitation Compensation shall not
include the following:
(1) contributions made by an Employer or an
Affiliate to a deferred compensation plan which, without regard to Code
section 415, are not includible in the Employee's gross income for the
taxable year in which contributed;
(2) Employer contributions made on behalf of the
Employee to a simplified employee pension to the extent they are
deductible by the Employee under Code section 219(b)(7);
(3) distributions from a deferred compensation
plan (except from an unfunded nonqualified plan when includible in gross
income);
(4) amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held
by the Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(5) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and
(6) other amounts which receive special tax
benefits, such as premiums for group term life insurance (to the extent
excludable from gross income) or contributions by an Employer or an
Affiliate toward the purchase of an annuity contract described in Code
section 403(b).
For purposes of this Section 1.30, Limitation Compensation
shall only include compensation actually paid or made available during
the applicable Limitation Year.
1.31 Limitation Year shall mean the Plan Year.
1.32 Named Fiduciary shall mean the Employer, the Trustee,
the Plan Administrator (if other than the Employer) and the Named
Appeals Fiduciary. Each Named Fiduciary shall have only those
particular powers, duties, responsibilities and obligations as are
specifically delegated to him under this Plan and/or the Trust
Agreement. Any fiduciary, if so appointed, may serve in more than one
fiduciary capacity.
1.33 Non-Highly Compensated shall mean an Employee of an
Employer who is neither a Highly Compensated Employee nor a Family
Member.
1.34 Normal Retirement Age shall mean age 65.
1.35 Normal Retirement Date shall mean the first day of the
month immediately following the month in which the Participant attains
Normal Retirement Age.
1.36 Novell means Novell, Inc., a Delaware corporation.
1.37 Parenthood Leave shall mean an absence from work (a) due
to the pregnancy of the individual, (b) due to the birth of a child to
the individual, (c) due to the placement of a child in connection with
the adoption of that child by the individual, or (d) for the purposes of
caring for a child during the period immediately following the birth or
placement for adoption of such child.
1.38 Participant shall mean any person who has been or who is
an Employee and who has been admitted to participation in the Plan
pursuant to the provisions of Article III hereof. The term
"Participant" shall include Active Participants (those who are currently
eligible to share in Employer contributions to the Plan), Retired
Participants (those former Employees presently receiving benefits under
the Plan or entitled to receive such benefits), and Vested Participants
(employees who are no longer Active Participants, former Employees who
are undergoing a Period of Severance, and, if the Plan is terminated,
former Active Participants who remain employees of Employer, any of whom
are or may become entitled at some future date to the distribution of
benefits from the Plan by reason of their having been Active
Participants herein).
1.39 Period of Service shall mean the period from the
individual's Employment Commencement Date, or, if later, his
Reemployment Commencement Date following his Severance from Service with
respect to his most recent period of Disregarded Prior Service, to the
earlier of (a) the date of reference if the individual remains in the
employ of the Employer or an Affiliated Company, or (b) the individual's
most recent Severance from Service Date. For the purpose of computing
Years of Eligibility Service and Years of Vesting Service, a Period of
Severance of less than twelve (12) months shall be considered a Period
of Service if the reason for the severance was a quit, discharge or
retirement, and if the individual again performs service for the
Employer or an Affiliated Company entitling him to credit for at least
one (1) Hour of Service before the Period of Severance has extended for
twelve (12) months. Effective January 1, 1995, this Section 1.39 is
hereby deleted.
1.40 Period of Severance shall mean the period commencing on
the individual's Severance from Service Date and ending on the first
date after such Severance from Service Date on which the individual is
entitled to credit for one (1) or more Hours of Service for service
performed for the Employer or an Affiliated Company. Effective January
1, 1995, this Section 1.40 is hereby deleted.
1.41 Plan shall mean the Safeguard Scientifics, Inc. Stock
Savings Plan as set forth herein, and as the same may from time to time
hereafter be amended. The term "Plan" shall also include the Plan as it
existed at each date of reference between the Effective Date and the
date on which the restatement thereof, as set forth herein, became
effective.
1.42 Plan Administrator shall mean the person or committee
named as such pursuant to the provisions of Article XIII hereof, or, in
the absence of any such appointment, the Company.
1.43 Plan Year shall mean the calendar year.
1.44 Predecessor Company means any organization which, after
its acquisition by an Employer, has become an Affiliate.
1.45 Quadro shall mean a "qualified domestic relations order"
within the meaning of section 206(d)(3)(B) of ERISA.
1.46 Reemployment Commencement Date shall mean the first
date on which the individual performs service for the Employer or an
Affiliate entitling such individual to credit for at least one (1) Hour
of Service after such individual's Severance from Service Date.
1.47 Required Beginning shall mean the Plan Year ending in
the calendar year in which a Participant attains age 70-1/2, or the
April 1 of the calendar year next following the calendar year in which
he attains age 70-1/2 even if the Participant is still in the active
employ of the Employer.
1.48 Severance from Service Date shall mean the earlier of:
(a) the date on which the individual dies, retires,
quits or is discharged from employment; or
(b) the first anniversary of the first date of a
period in which an individual remains absent from service (with or
without pay) from the Employer and all Affiliated Companies for any
reason other than death, retirement, quit or discharge from employment,
such as vacation, holiday, sickness, disability, leave of absence, or
layoff; or
(c) the second anniversary of the first date in a
period in which an individual remains absent from service (with or
without pay) from the Employer and all Affiliated Companies where such
absence is due to Parenthood Leave.
Effective January 1, 1995, this Section 1.48 is hereby deleted.
1.49 Sponsoring Affiliate shall mean any Affiliate which
adopts the Plan pursuant to Section 16.6 hereof.
1.50 Spouse shall mean (a) the person to whom the Participant
was married on his Benefit Commencement Date, or (b) if the
Participant's Benefit Commencement Date had not occurred at the time of
his death, the person to whom the Participant was married at the time of
his death. When the word "spouse" is used without an initial capital
letter in the Plan, the term means the person to whom the Participant
was married or is married as of the date of reference.
1.51 Stock shall mean any class of capital stock of Safeguard
Scientifics, Inc.
1.52 Total Disability shall mean a physical or mental
condition of such severity and probable prolonged duration as to entitle
the Participant to disability retirement benefits (i) under the long-
term disability program of his Employer, or (ii) if his Employer does
not sponsor a long-term disability program covering the Employee or if
the Employee is not eligible for such program due to insufficient age or
years of service, then under the Federal Social Security Act. In the
event that Total Disability is determined under clause (i) of the
preceding sentence, then (a) the Plan Administrator shall rely, in
making any such determination, upon the judgment of one or more medical
practitioners selected by the Plan Administrator and upon such evidence
as is presented by the Participant, and (b) no determination of Total
Disability shall be made if the Participant fails to provide such
evidence as is required by the Plan Administrator and/or fails to submit
to examination by the medical practitioner(s) selected by the Plan
Administrator.
1.53 Trust Agreement shall mean the Safeguard Scientifics,
Inc. Stock Savings Plan Trust Agreement as the same is presently
constituted, as it may hereafter be amended, and such additional and
successor trust agreements as may be executed for the purpose of
providing for the management of the assets of the Plan.
1.54 Trustee shall mean the party or parties so designated
pursuant to the Trust Agreement and each of their respective successors.
1.55 Trust Fund shall mean all of the assets of the Plan held
by the Trustee (or any nominee thereof) at any time under the Trust
Agreement.
1.56 Valuation Date shall mean the last day of each calendar
quarter ("Quarterly Valuation Date") and any other date which shall be
so designated by the Plan Administrator. With respect to the valuation
of any Stock held by the Trustee under the Plan, in the event that a
Valuation Date occurs on a date on which the New York Stock Exchange is
not open for business, the Stock shall be valued as of the last day on
which such exchange was open immediately preceding such Valuation Date.
1.57 Vesting Computation , effective January 1, 1995, shall
mean the Plan Year.
1.58 Year of Eligibility Service shall have the meaning set
forth at subsection (a) under the definition of "Year of Service."
1.59 Year of Service shall have the following meanings when
used in the Plan:
(a) Eligibility.
(1) When applied to eligibility provisions, a
"Year of Service" shall be referred to as a "Year of Eligibility
Service" and shall mean each Period of Service with the Employer or any
Affiliated Company (singly or in combination) of twelve months between
(i) the individual's Employment Commencement Date, or, if later, his
Reemployment Commencement Date at which started his most recent Period
of Service which is not Disregarded Prior Service, and (ii) the date of
reference.
(2) Effective January 1, 1995, when applied to
eligibility provisions, a "Year of Service" shall be referred to as a
"Year of Eligibility Service" and shall mean:
(i) any full Year of Eligibility Service
credited as of December 31, 1994, under the provisions of the Plan in
effect on such date; plus
(ii) any Eligibility Computation Period ending
after December 31, 1994, in which an Employee completes at least 1,000
Hours of Service. For purposes of this paragraph, Eligibility
Computation Period shall include the twelve-month period measured from
an Employee's Employment Commencement Date or anniversary thereof which
includes January 1, 1995. In determining the Employee's Hours of
Service in an Eligibility Computation Period which begins prior to and
includes January 1, 1995, Hours of Service for the portion of such
Computation Period prior to January 1, 1995, shall be determined by
applying the applicable equivalency set forth in Section 1.28(f).
(b) Vesting.
(1) When applied to vesting or benefit accrual
provisions, a "Year of Service" (or "Year of Vesting Service") shall be
credited for each twelve-month Period of Service with the Employer or
any Affiliated Company (singly or in combination) between (i) the
individual's Employment Commencement Date, or, if later, his
Reemployment Commencement Date at which started his most recent Period
of Service which is not Disregarded Prior Service, and (ii) the date of
reference.
(2) Effective January 1, 1995, when applied to
vesting provisions, a "Year of Service" shall be referred to as a "Year
of Vesting Service" and shall mean:
(i) any full Year of Vesting Service
credited as of December 31, 1994, under the provisions of the Plan in
effect on such date; plus
(ii) any Vesting Computation Period ending
after December 31, 1994, in which an Employee completes at least 1,000
Hours of Service. For purposes of this paragraph, Vesting Computation
Period shall include the twelve-month period measured from an Employee's
Employment Commencement Date or anniversary thereof which includes
January 1, 1995. In determining the Employee's Hours of Service in a
Vesting Computation Period which begins prior to and includes January 1,
1995, Hours of Service for the portion of such Computation Period prior
to January 1, 1995, shall be determined by applying the applicable
equivalency set forth in Section 1.28(f).
(c) For the purposes of subsections (a)(1) and (b)(1)
hereof, an individual shall be credited with a month of service for any
calendar month with respect to which he is entitled to credit for at
least one (1) Hour of Service.
(d) All Years of Service which become Disregarded
Prior Service shall cease to be Years of Service for all purposes under
the Plan.
1.60 Year of Vesting Service shall have the meaning set
forth at subsection (b) under the definition of "Year of Service."
ARTICLE II
PARTICIPATION
2.1 Eligibility to Participate. Except as hereinafter
provided, each Eligible Employee of an Employer shall become a
Participant in the Plan on the Entry Date coincident with or next
following the date on which he completes one (1) Year of Eligibility
Service. Effective October 1, 1993, except as hereinafter provided,
each Eligible Employee of an Employer shall become a Participant in the
Plan for the sole purpose of making Deferral Amount Contributions on the
first Entry Date following his date of hire. For all other purposes
under the Plan (including the right to have Employer Matching
Contributions allocated to his Matching Contribution Subaccount) an
Eligible Employee shall be treated as a Participant only after the Entry
Date coincident with or next following the date on which he completes
one (1) Year of Eligibility Service. Notwithstanding the foregoing, no
person shall be admitted as a Participant prior to the date he becomes
an Eligible Employee, as provided in Section 2.3 below.
2.2 Readmission after Period of Severance and Employment
Termination.
(a) A person described in paragraph (1) or (2) below
shall be eligible to resume active participation under the Plan
upon the first date on which he accrues an Hour of Service as an
Employee after such Period of Severance or termination of employment.
(1) A person who has been an Active Participant
in the Plan and who either undergoes a Period of Severance or remains
absent from service for the Employer for a period of time for any
reason.
(2) Any person who satisfied the minimum service
requirements for Active Participant status, who experienced a
termination of employment prior to the payroll period containing the
Entry Date on which he would have assumed Active Participant status and
was not in the employ of the Employer on that Entry Date, and who
subsequently again becomes an Employee without experiencing a Severance
from Service Date.
(b) With respect to a person who has previously been
employed by the Employer or an Affiliate, who has never been an Active
Participant, and who has terminated such employment or has undergone a
Period of Severance, eligibility for participation in the Plan shall be
determined as follows.
(1) For the purposes of determining eligibility
to be an Active Participant, service prior to the occurrence of a Period
of Severance shall be combined with service subsequent to such Period of
Severance except where the service prior to the Period of Severance is
Disregarded Prior Service.
(2) Any individual who experiences a Period of
Severance, whose prior service is not protected under the provisions of
paragraph (a) of this Section, and who thereafter retains or resumes a
status as an Employee, shall be considered a new Employee upon
performance of one (1) Hour of Service subsequent to such Period of
Severance, and shall be required to satisfy the minimum service
requirements of Section 2.1(b) without regard to service prior to his
Reemployment Commencement Date.
2.3 Changes in Status.
(a) Changes to Covered Employment. In the event that
a person who has been in the employ of the Employer in a category
of employment not eligible for participation in the Plan (or who has
been employed by an Affiliated Company) becomes an Employee by reason of
a change in status (without experiencing a sufficiently long Period of
Severance to cause all prior service to become Disregarded Prior
Service) to a category of employment eligible for participation, and
subject to the provisions set forth in the remainder of this Section, he
or she shall become eligible to participate as of the date on which
occurs such change to Employee status. However, if on the date of such
change, he has not satisfied all of the requirements of Section 2.1(b)
hereof, he will not become an Active Participant until the date
specified in Section 2.1(b), and will then become a Participant only if
he is still then an Employee.
(b) Changes to Noncovered Employment. If an Active
Participant ceases to be an Employee because he is transferred to a non-
eligible category of employment with the Employer or is transferred to
employment with an Affiliate that is not an entity constituting Employer
under the Plan, such employee will thereupon cease to accrue benefits
under the Plan, and any Deferral Agreement, and any agreement concerning
withholding from pay any after-tax supplemental Participant
contributions, then in effect with respect to such Participant shall be
deemed to be terminated. With the consent of the Plan Administrator,
such an employee, on and after the date he ceases to be an Employee, may
elect to receive a distribution of any or all of the balance of his
After-Tax Voluntary Contribution Subaccount and the vested amount (if
any) of his Matching Contribution Subaccount. A person who ceases to be
an Employee by virtue of a transfer to a non-eligible category of
employment with the Employer or a transfer to employment with an
Affiliate shall not be eligible to elect to withdraw any funds from his
Deferral Contribution Subaccount except to the extent that such person
qualifies for such a withdrawal under Section 4.10.
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Employer Contributions.
(a) Deferral Amount Contributions. Subject to the
limitations set forth in Article V, the Participant may elect to have
his salary reduced, and to have the Employer make Deferral Contributions
to the plan on his behalf, in an amount equal to any whole percentage
which is not less than two percent (2%) nor greater than four percent
(4%) (or, effective October 1, 1991, 15%), (or effective January 1,
1994, 14%) of his Compensation; provided, however, that the Plan
Administrator may limit and may from time to time adjust the amount of
Deferral Contributions which may be made by any Highly Compensated
Employee in order to comply with the requirements of Article V.
(b) Matching Contributions. The Employer may elect
to contribute to the Trust an amount equal to fifty percent (50%) or, at
certain locations of the Employer as set forth in Appendix B, seventy-
five percent (75%), and, effective January 1, 1992, the Employer shall
contribute seventy-five percent (75%), of the aggregate of all Deferral
Amounts contributed for the Accrual Computation Period under subsection
(a) hereof which do not exceed four percent (4%) of a Participant's
Compensation. Amounts contributed by the Employer pursuant to this
subsection (b) shall be made without regard to profits. All amounts
contributed by the Employer to the Trust pursuant to this subsection (b)
shall be allocated to the Matching Contribution Subaccounts of
Participants pursuant to Section 6.2.
If Employer consists of more than one entity, this Section
shall apply separately as to each such entity.
3.2 Timing of Contributions.
(a) Contributions made pursuant to Section 3.1(a)
shall be made (effective January 1, 1989 through December 31, 1994, in
cash) no later than the date established for the filing of the
Employer's federal income tax return (including all extension of that
date) for the fiscal year with respect to which such contribution is
made, and may be made at any earlier date, provided, however that no
Amount shall be held by the Employer without contributing the same to
the Plan for a period longer than (i) sixty (60) days, or, (ii) if
shorter, the earliest date on which such amounts can reasonably be
segregated from the Employer's general assets. Amounts contributed
pursuant to Section 3.1(a) with respect to any Plan Year shall be
credited to the Deferral Contribution Subaccount of the Participant as
promptly as practicable after receipt thereof but in no event later than
the last day of the Plan Year.
(b) Contributions made pursuant to Section 3.1(b)
shall be made as soon as practicable after the end of the Accrual
Computation Period for which they are made, but in no event later than
the date established for the filing of the Employer's federal income tax
return (including any extensions of that date) for the fiscal year of
the Employer ending with or within the Plan Year with respect to which
such contribution is made.
(c) Effective January 1, 1995, contributions shall be
made in cash, except that contributions by the Company may be made in
cash, in common stock of the Company, or in any combination thereof, as
determined by the Company.
3.3 Contingent Nature of Contributions. To the extent that
the deductibility thereof is subsequently denied, each contribution made
by Employer pursuant to the provisions of Section 3.1 hereof is hereby
made expressly contingent on the deductibility thereof for federal
income tax purposes for the year with respect to which such contribution
is made.
3.4 Exclusive Benefit; Refund of Contributions. All
contributions made by the Employer are made for the exclusive benefit of
the Participants and their Beneficiaries, and such contributions shall
not be used for nor diverted to purposes other than for the exclusive
benefit of the Participants and their Beneficiaries (including the costs
of maintaining and administering the Plan and Trust). Notwithstanding
the foregoing, to the extent that such refunds do not, in themselves,
deprive the Plan of its qualified status, refunds of contributions shall
be made to the Employer under the following circumstances and subject to
the following limitations:
(a) Disallowance of Deduction. To the extent that a
federal income tax deduction is disallowed for any contribution made by
Employer, the Trustee shall refund to the Employer the amount so
disallowed within one (1) year of the date of such disallowance.
(b) Mistake of Fact. In the case of a contribution
which is made in whole or in part by reason of a mistake of fact (for
example, incorrect information as to the eligibility or compensation of
an Employee, or a mathematical error), so much of the Employer
contribution as is attributable to the mistake of fact shall be
returnable to the Employer upon demand, upon presentation of evidence of
the mistake of fact to the Trustee and of calculations as to the impact
of such mistake. Demand and repayment must be effectuated within one
(1) year after the payment of the contribution to which the mistake
applies.
In the event that any refund of amounts contributed pursuant
to Section 3.1(b) hereof is paid to the Employer hereunder, such refund
shall be made without interest and shall be deducted from among the
Accounts of the Participants only to the extent that the amount of the
refund can be identified to one or more specific Participants.
Notwithstanding any other provision of this Section, no refund
shall be made to the Employer which is specifically chargeable to the
Account(s) of any Participant(s) in excess of one hundred percent (100%)
of the amount in such Account(s) nor shall a refund be made by the
Trustee of any funds, otherwise subject to refund hereunder, which have
been distributed to Participants, to Beneficiaries or to Alternate
Payees. In the case that such distributions become refundable, Employer
shall have a claim directly against the distributees to the extent of
the refund to which it is entitled.
All refunds pursuant to this Section shall be limited in
amount, circumstance and timing to the provisions of section 403(c) of
ERISA, and no such refund shall be made if, solely on account of such
refund, the Plan would cease to be a qualified plan pursuant to section
401(a) of the Code.
3.5 Investment of Employer Contributions. All Employer
contributions pursuant to Section 3.1(b) hereof which are allocated to
Matching Contribution Subaccounts of Participants shall be invested in
Stock of Safeguard Scientifics, Inc. except, effective June 1, 1993, as
otherwise provided in Section 7.4. In the case of any such Employer
contributions pursuant to Section 3.1(b) which are paid to the Trustee
in cash, and with respect to any cash held by the Trustee in the
Safeguard Scientifics, Inc. Stock Sub-Fund (as a consequence of one or
more cash dividends on Stock, or otherwise), the Trustee shall be
empowered under the Trust Agreement to purchase additional Stock either
on the open market, by private purchase, or from the issuer, provided,
however, that no such private purchase or purchase from the issuer shall
be made at a price greater than the then-current market price.
3.6 In Service Withdrawals. No withdrawals shall be
permitted from the Participant's Matching Contribution Subaccount.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.1 Mandatory Contributions. No contributions shall be
required of any Participant.
4.2 Voluntary Contributions.
(a) Supplementary Contributions. Prior to October 1,
1991, a Participant may elect to designate 1%, 2%, 3%, 4%, 5% or 6% of
his Compensation as a supplementary contribution to be credited to his
After-Tax Voluntary Contribution Subaccount. Contributions hereunder
shall be aggregated with contributions made by the Participant to all
other plans sponsored or maintained by the Employer for the purposes of
applying the limitations hereunder. No contributions may be made to a
Participant's After-Tax Voluntary Contribution Subaccount with respect
to Compensation received on or after October 1, 1991.
(b) Date and Manner of Payment. All contributions
made by a Participant during any Plan Year pursuant to subsection (a) of
this Section shall be made by payroll deduction authorized in writing by
such Participant. The amount of all voluntary contributions which a
Participant elects during any Plan Year to contribute by means of
Compensation withholding pursuant to subsection (a) of this Section
shall be paid by the Employer to the Trustee not later than the last day
of such Plan Year and shall be credited to such Participant's After-Tax
Voluntary Contribution Subaccount as of the first day of the first Plan
Year next following the Plan Year in which such contribution is received
by the Trustee.
4.3 Rollover Contributions.
(a) Eligible Rollover Distributions. A Participant
may contribute or transfer, or cause any party to transfer, and the Plan
Administrator shall cause the Trustee to receive any assets from a
qualified employee benefit plan or IRA which constitute a "rollover
amount" within the meaning of Code section 402(a)(5). Effective January
1, 1993, a Participant may contribute or transfer, or cause any party to
transfer, and the Plan Administrator shall cause the Trustee to receive
any assets from a qualified employee benefit plan which constitute an
"eligible rollover distribution" within the meaning of Code Section
402(c)(4) or from an individual retirement arrangement which constitutes
a "rollover contribution" within the meaning of Code section
408(d)(3)(A)(ii). Amounts rolled over will be allocated to the
Participant's Rollover Subaccount.
(b) Direct Rollover. Effective January 1, 1993, if a
Participant entitled to receive an eligible rollover distribution (as
described in subsection (a) above) from another plan (1) elects to have
the amount paid directly to this Plan, and (2) specifies this Plan as
the plan to which the amount is to be paid (in such form and at such
time as the Plan Administrator may prescribe), the eligible rollover
distribution shall be paid directly to this Plan in the form of a direct
rollover.
4.4 Restoration Contributions. Any former Participant who
once again qualifies as an Active Participant and who has received a
"cash-out" of his vested interest attributable to his prior
participation in the Plan, may, after reinstatement to employment
covered by the Plan, "buy back" (or restore) his Account balance by
paying to the Trustee in cash the full amount of the "cash-out" he
previously received. The Account balance so restored shall be the sum
of (i) the restoration contribution made by the Participant, plus (ii)
the amount, if any, held by the Plan in the Participant's Account
attributable to that portion of the Participant's Account that was not
distributed to him as part of the "cash out." In the case of a
distribution upon separation from service, any such restoration
contribution must be made prior to the earlier of (i) the date on which
the Participant has five (5) consecutive one-year Breaks in Service or
(ii) the fifth anniversary of re-employment. In the case of any other
distribution, any such restoration contribution must be made prior to
five (5) years after the date of distribution. All such restoration
contributions shall be credited to the respective subaccounts of the
Participant from which originally distributed. Restoration contributions
shall be credited to the Account of the Participant as of the Valuation
Date coincident with or next following the date of which the restoration
contribution is made, or at such earlier date as determined
administratively feasible by the Plan Administrator. Any Participant
who fails to make a restoration contribution within the time limitations
herein established shall be deemed to have waived his right to make any
such contribution.
4.5 Eligibility for Arrangement. Any Employee who is an
Active Participant or who anticipates becoming a Participant as of an
Entry Date may enter into a written Deferral Agreement with the Employer
pursuant to which such Participant's Compensation shall be reduced by
his Deferral Amount.
4.6 Effective Date of Deferral Agreements.
(a) Initial Effective Date. Any Deferral Agreement
(and any change in any existing Deferral Agreement) shall become
effective as of the latest of:
(1) the date on which the Employee first
satisfies all other requirements for admission as a Participant in the
Plan;
(2) the first payroll period commencing after
the first day of the calendar month next following the date on which the
Deferral Agreement is executed by the parties, but not earlier than
thirty (30) days after the date on which the Deferral Agreement is
executed by the parties; or
(3) the date specified in such Deferral
Agreement.
(b) Cancellation and Reinstatement. A Deferral
Agreement may be cancelled or suspended by a Participant or by the
Employer as of the end of any pay period by delivery, not later than
thirty (30) days prior to the last day of such pay period, by either
party to the other, of written notice. In the event of such a
cancellation or suspension by or at the request of the Participant, no
Deferral Agreement may be reinstated or become effective with respect to
such Participant for at least six (6) months. A Participant may
thereafter reinstate a Deferral Agreement by completing any documents
required by the Plan Administrator for such purpose and delivering such
documents not less than thirty (30) days prior to the intended date of
reinstatement. A Participant may not make up contributions for any
prior periods, including, without limitation, any prior period during
which a Deferral Agreement was not in force or was suspended.
4.7 Deferral Amounts.
(a) As Stated in the Deferral Agreement. The
tentative Deferral Amount set forth in any Deferral Agreement shall
be as specified therein. Tentative Deferral Amounts shall become
Deferral Amounts only after the Employer or the Plan Administrator has
made such adjustments thereto as they (or either of them) deem necessary
to maintain the qualified status of this Plan and to satisfy all
requirements of Code section 401(k) .
(b) Minimum and Maximum Deferral Amounts. The
Deferral Amount stated in the Participant's Deferral Agreement shall be
not less than (2%) two percent of Compensation nor more than four
percent (4%) (or effective January 1, 1994, not more than 14%) of
Compensation, and all such Deferral Amounts shall be in full multiples
of one percent (1%).
(c) Changes of Deferral Amount. Not more than once
in any calendar quarter, a Participant may increase his Deferral Amount
(but not above the maximum Deferral Amount permissible under the Plan)
or may decrease his Deferral Amount (but not below the minimum Deferral
Amount permissible under the Plan) as of the first day of any pay
period, on at least thirty (30) days notice in writing to the Plan
Administrator. All increases and decreases of Deferral Amount shall be
prospective in effect only. Effective January 1, 1995, the preceding
sentence is hereby deleted. Any notice of increase or decrease in the
Participant's Deferral Amount shall be considered an amendment of the
Deferral Amount stipulated in the Deferral Agreement.
(d) Deductibility Limitation. The aggregate of all
Deferral Amounts with respect to any Plan Year shall not exceed amounts
determined by the Employer to be deductible to the Employer under Code
section 404(a) when contributed to the Plan for such Plan Year. If the
Employer deems it necessary to reduce the Deferral Amount called for in
any Deferral Agreement to satisfy the aforesaid limitation, the Deferral
Amounts of all Participants shall be reduced proportionately until the
aggregate of all Deferral Amounts are within the limitations of said
section 404(a) (after taking into account all other contributions made
by the Employer).
4.8 Establishment of Separate . The Trustee shall establish
on behalf of each Participant who enters into a Deferral Agreement a
Deferral Contribution Subaccount to which amounts shall be allocated
pursuant to the provisions of Section 6.1 hereof. Crediting of any
Deferral Amount shall not be contingent upon continued participation in
the Plan as of any date subsequent to the date on which such Deferral
Amount was earned by the Participant to whom it is to be credited.
4.9 Distributions from Participant's Deferral Contribution
Subaccount. No portion of a Participant's Deferral Contribution
Subaccount shall be distributable or withdrawn earlier than upon one of
the following events:
(a) the Participant's retirement, as provided in
Article VIII;
(b) the Participant's death, as provided in Article
IX;
(c) the Participant's Total Disability, as defined in
the Plan;
(d) the Participant's separation from service for the
Employer;
(e) the Participant's attainment of age 59-1/2;
(f) the Participant's hardship, as provided in
Section 4.10; or
(g) upon Plan termination or Employer disposition of
assets or subsidiary as described in Code section 401(k)(10).
4.10 Hardship Withdrawals: Participant's Deferral
Contribution Subaccount. Upon submission of a Participant's withdrawal
application establishing a hardship (as that term is hereinafter
defined), a withdrawal distribution may be made to the Participant of
the Deferral Contributions credited to his Deferral Contribution
Subaccount. Earnings credited to his Deferral Contribution Subaccount
may not be withdrawn. In his application, the Participant shall specify
the dollar amount to be withdrawn. The application shall be approved if
the conditions of subsections (a) and (b) below are met.
(a) The distribution must be made to alleviate one of
the following immediate and heavy financial needs:
(1) expenses for medical care described in Code
section 213(d) previously incurred by the Employee, the Employee's
spouse or any dependent of the Employee (as defined in Code section 152)
or necessary for such persons to obtain medical care described in Code
section 213(d);
(2) costs directly related to the purchase of a
principal residence for the Employee (excluding mortgage payments) ;
(3) payment of tuition and related educational
fees for the next twelve (12) months of post-secondary education for the
Employee, his spouse, children or dependents;
(4) prevention of the eviction of the Employee
from his principal residence of foreclosure on the mortgage of the
Employee's principal residence; or
(5) other events as specified by the
Commissioner of Internal Revenue in regulations, rulings, notices and
other documents of general applicability.
(b) The following conditions must be satisfied:
(1) the distribution is not in excess of the
amount of the immediate and heavy financial need of the Employee
(including any amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to result from the
distribution); and
(2) the Employee has obtained all distributions,
other than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer and any Affiliate.
(c) Any Participant who receives a hardship
distribution under this Plan shall have his right to make Deferral
Contributions under this Plan and any elective deferral contributions or
employee contributions under any other qualified or nonqualified
deferred compensation plans maintained by the Employer and any Affiliate
suspended for twelve (12) months after the date of receipt of the
hardship distribution. In addition, the applicable limit under Code
section 402(g) for the Participant's taxable year immediately following
the taxable year of the hardship distribution shall be reduced by the
amount of the Participant's Deferral Contributions and other elective
deferral contributions (under other plans maintained by the Employer and
any Affiliate) made during the taxable year of the hardship
distribution.
4.11 In-Service Withdrawals from After-Tax Voluntary
Contribution Subaccounts. A Participant may, by filing a written
request to the Plan Administrator, withdraw from the Trust, as of any
Valuation Date which follows by not less than thirty (30) days the
receipt of such request by the Plan Administrator, an amount not to
exceed the balance then standing to his credit in his After-Tax
Voluntary Contribution Subaccount, subject, however, to the provisions
of any Quadro then in effect as to the Participant; provided, however,
that (A) a Participant may make only one withdrawal from his After-Tax
Voluntary Contribution Subaccount in any twelve (12) month period, and
(B) the minimum withdrawal shall be $100.
4.12 Loans.
(a) General Rule. Upon receipt of a completed loan
application, the Plan Administrator shall direct the Trustee to make a
loan to a Participant who is an active employee and receiving
Compensation as of the loan date, provided such loan meets the
requirements of this Section and the requirements of such procedures and
guidelines as may be adopted by the Plan Administrator which are
consistent with this Section. Loans shall first become available to
Participants on or after January 1, 1992. Loans may be made as of any
Quarterly Valuation Date, provided the loan application is received at
least seven days before the Quarterly Valuation Date.
(b) Terms of Loan. Each loan granted or renewed
shall bear a rate of interest equal to the prime rate at Continental
Bank, Philadelphia, Pennsylvania, plus two percent (2%). The interest
rate and other conditions for the repayment of the loan shall be fixed
at the time the loan is made. All loans shall be repayable by their
terms within five years, except for a loan used to purchase a dwelling
unit which shall be repayable within fifteen (15) years.
(c) Limitations. The aggregate amount of all loans
outstanding to any Participant at any date shall not exceed the lesser
of:
(1) one-half of the amount of the Participant's
vested Accrued Benefit as of such date; or
(2) $50,000, reduced by the excess, if any, of -
(A) the highest outstanding balance of the
Participant's loans from the Plan during the one-year period ending on
the day before such loan is made, over
(B) the outstanding balance of the
Participant's loans from the Plan on the date on which such loan is
made.
The maximum amount of any loan under this Section shall
not exceed the amount credited to the Participant's Deferral
Contributions Subaccount, After-Tax Voluntary Subaccount and Rollover
Subaccount. The minimum amount of any loan under this Section shall be
$1,000.
A Participant may take out no more than one loan in any
Plan Year and may not have more than one loan outstanding at any time.
(d) Repayment Terms. Except as may be provided in
regulations issued by the Secretary of the Treasury, each loan shall
require substantially level amortization of the loan, with payments not
less frequently than quarterly over the term of the loan. A Participant
shall be required to repay any loans through payroll deduction, except
that he or she may elect to pre-pay the entire outstanding balance of
the loan in a single lump sum.
Each loan shall be evidenced by a promissory note and
shall be secured by the vested balance of the Participant's Accounts;
provided that, immediately after the origination of such loan, not more
than fifty percent (50%) of the vested balance of the Participant's
Accounts shall be used as security for the outstanding balance of all
loans to such Participant. Each loan shall also be secured by such
other collateral, if any, as may be required by the Plan Administrator.
If the Participant ceases to be actively employed and receiving
Compensation before the loan is repaid, as, for example, in the event of
a leave of absence or disability leave, the Plan Administrator may
permit the Employee to continue to make loan repayments or may, in his
discretion, accelerate the loan. If the Participant separates from
service, the loan shall be accelerated, and the unpaid amount of the
loan, and accrued interest thereon, shall be deducted from the amount of
any benefits which become payable to or on behalf of the Participant
under the Plan.
(e) General Requirements. All loans shall (i) be
available to all Participants and beneficiaries who are Employees on a
reasonably equivalent basis, (ii) not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Participants and Beneficiaries, (iii) be made in
accordance with this Section, and (iv) be adequately secured in
accordance with applicable law and regulations.
(f) Accounts Available for Loans.
(1) Order of Accounts. Any loan made to a
Participant under this Section shall be considered an earmarked
investment of such Participant's Accounts. Each loan shall be made from
the Participant's Accounts in the order listed below; and shall be
repaid in the reverse order:
(A) first, from the Participant's pre-1987
Voluntary Contributions;
(B) second, from the Participant's post-
1986 Voluntary Contributions and earnings thereon;
(C) third, from the earnings on the
Participant's pre-1987 Voluntary Contributions;
(D) fourth, from the Participant's Rollover
Subaccount; and
(E) fifth, from the Participant's Deferral
Contribution Subaccount.
(2) Investment of Participant's Account. Until
a loan to a Participant is repaid, the outstanding balance of the loan
shall be treated as an investment by such Participant for his Account(s)
only, and the interest paid by such Participant shall be credited to his
Account(s) only. The Account(s) shall not share in any other earnings
of the Plan with respect to the amount of the loan.
(3) Loan Date. Each loan shall be made as of
the Quarterly Valuation Date next following approval of the
Participant's loan application by the Plan Administrator. To the extent
that any loan is made from a particular Account of a Participant which
is invested partially in different Funds, such loan shall be made pro-
rata from the investments of such Account in each Fund, valued as of the
Valuation Date immediately preceding the loan date.
(4) Investment of Loan Repayments. Loan
repayments which are credited to a Member's Account(s) shall be re-
invested in accordance with the most recent investment direction under
Sections 3.5 and 7.4.
4.13 Excused Absence from Service. Notwithstanding any other
provisions of this Article IV, during any period in which a Participant
is on leave of absence with the consent of the Employer or in military
service in conformity with the Employer's policies, such Participant may
continue making voluntary contributions under Sections 4.2(a), to the
extent such contributions are otherwise permitted, and accumulating
Deferral Amounts under Section 4.7, for any payroll period in which such
Participant is credited with Compensation by the Employer. During any
such period of excused absence, the Participant may maintain, reduce,
suspend or resume, but may not increase, the percentage of Compensation
by which such contributions and Deferral Amounts shall be determined.
ARTICLE V
LIMITATIONS ON CONTRIBUTIONS
5.1 Maximum Amount of Deferral Contributions.
(a) Limitation on Amount. Effective January 1, 1987,
the aggregate amount of a Participant's Deferral Contributions during
any calendar year under this Plan and all other plans, contracts, and
arrangements of an Employer or an Affiliate shall not exceed $7,000
multiplied by the Adjustment Factor as provided by the Secretary of the
Treasury.
(b) Distribution of Excess Deferrals. Notwithstanding
any other provision of the Plan, the amount of any Deferral
Contributions for a calendar year which a Participant claims to be
excess deferrals pursuant to the procedure set forth in subsection (c)
(hereinafter "Excess Deferral Amounts"), plus any income and minus any
loss allocable thereto, shall be distributed no later than each April
15, to Participants to whose accounts Excess Deferral Amounts were
allocated for the preceding calendar year and who claim Excess Deferral
Amounts for such calendar year. Effective January 1, 1993,
notwithstanding any other provision of the Plan, the amount of any
Deferral Contributions for a calendar year which are made to this Plan
on behalf of a Participant and which exceed the limit under Section
5.1(a) above or which a Participant claims to be excess deferrals
pursuant to the procedure set forth in subsection (c) (hereinafter
"Excess Deferral Amounts"), plus any income and minus any loss allocable
thereto, shall be distributed no later than each April 15, to such
Participants. Excess Deferral Amounts shall be treated as Annual
Additions under the Plan, except as otherwise provided in Section
5.4(a).
(c) Claim for Distribution of Excess Deferral. The
Participant's claim shall be in writing; shall be submitted to the Plan
Administrator not later than February 28; shall specify the amount of
the Participant's Excess Deferral Amounts, when added to amounts
deferred under other plans or arrangements described in Code sections
401(k), or 408(k), or 403(b), will exceed the limit imposed on the
Participant by Code section 402(g) for the year in which the deferral
occurred.
(d) Adjustment of Amount of Excess Deferral. Excess
Deferral Amounts shall be adjusted for income or loss. Effective
January 1, 1989, the income or loss allocable to Excess Deferral Amounts
shall be determined by multiplying the income or loss allocable to the
Participant's Deferral Contribution Account for the Plan Year by a
fraction, the numerator of which is the Excess Deferral Amount on behalf
of the Participant for the preceding Plan Year and the denominator of
which is the closing balance of the Participant's Deferral Contribution
Account on the last day of such Plan Year, reduced by any gains and
increased by any losses allocable to the Deferral Contribution Account
during such Plan Year.
(e) Forfeiture of Matching Contributions. Effective
January 1, 1993, any Matching Contributions related to Excess Deferral
Amounts shall be forfeited.
(f) Deferral Contributions. Effective January 1,
1987, Deferral Contributions shall mean, with respect to any taxable
year of a Participant, the sum of all employer contributions made on
behalf of such Participant pursuant to an election to defer under any
qualified cash or deferred arrangement (as described in Code section
401(k)), any simplified employee pension cash or deferred arrangement
(as described in Code section 402(h)(1)(B)), any eligible deferred
compensation plan (as described in Code section 457), or any plan
described in Code section 501(c)(18), or any employer contributions made
on behalf of the Participant for the purchase of an annuity contract
under Code section 403(b) pursuant to a salary reduction agreement.
The income or loss allocable to Excess Deferral Amounts for
the period between the end of the Plan Year and the date of distribution
shall be determined in one of the following two methods as the Plan
Administrator shall elect: (1) by multiplying the income or loss
allocable to the participant's Deferral Contribution Account for such
period by a fraction, the numerator of which is the Excess Deferral
Amounts on behalf of the Participant for the preceding Plan Year and the
denominator of which is the Participant's Deferral Contribution Account
during such period, or (2) by multiplying 10 percent of the income or
loss allocable to Excess Reduction Amounts for the Plan Year by the
number of calendar months that have elapsed since the end of the Plan
Year (a distribution occurring on or before the fifteenth day of the
month will be deemed to have been made on the last day of the preceding
month and a distribution occurring after such fifteenth day will be
deemed to have been made on the first day of the next month).
5.2 Limitations on Deferral Contributions of Highly
Compensated Participants.
(a) Limitations. Effective January 1, 1987, the
Average Actual Deferral Percentage for Eligible Employees who are
Highly Compensated Employees for the Plan Year shall bear a relationship
to the Average Actual Deferral Percentage for all other Eligible
Employees for such Plan Year which meets one of the following tests:
(i) the Average Actual Deferral Percentage for
Eligible Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Employees who are Non-Highly Compensated Employees for the Plan
Year multiplied by 1.25; or
(ii) the Average Actual Deferral Percentage for
Eligible Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Actual Deferral Percentage for
Eligible Employees who are Non-Highly Compensated Employees for the Plan
Year multiplied by 2, provided that the Average Actual Deferral
Percentage for Eligible Employees who are Highly Compensated Employees
does not exceed the Average Actual Deferral Percentage for Eligible
Employees who are Non-Highly Compensated Employees by more than two
percentage points or, effective January l, 1989, in conjunction with the
Average Contribution Percentage test under Section 5.3, the aggregate
limit prescribed under section 1.401(m)-2 of Treasury Regulations to
prevent the multiple use of this alternative test.
(b) Definitions. For purposes of this Section the
following definitions shall apply:
(i) "Actual Deferral Percentage" shall mean the
ratio (expressed as a percentage) of the Deferral Contributions on
behalf of the Eligible Employee for the Plan Year to the Eligible
Employee's Statutory Compensation for the Plan Year.
(ii) "Average Actual Deferral Percentages" shall
mean the average (expressed as a percentage) of the Actual Deferral
Percentages of the Eligible Employees in a group.
(iii) "Eligible Employee" shall mean any
Covered Employee who has met the eligibility requirements of Article II
and is eligible to elect to have Deferral Contributions made to the Plan
on his behalf for the Plan Year.
(iv) "Statutory Compensation" shall mean all
compensation paid to or on behalf of an Eligible Employee during the
applicable period as reported on Treasury form W-2 plus any Compensation
deferred pursuant to the election of the Eligible Employee under this
Plan. With respect to the 1987 and 1988 Plan Years, the applicable
period shall mean the portion of the Plan Year during which the Eligible
Employee was eligible to participate in the Plan. Effective January 1,
1989, the applicable period shall be the Plan Year.
A Participant's Statutory Compensation for any Plan
Year beginning on or after January 1, 1989, but prior to January 1,
1994, shall in no event exceed $200,000 multiplied by the Adjustment
Factor as provided by the Secretary of the Treasury. A Participant's
Statutory Compensation for any Plan Year beginning on or after January
1, 1994, shall in no event exceed $150,000, as adjusted by the
Commissioner of Internal Revenue for increases in the cost of living in
accordance with Code section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year shall apply to any period, not
exceeding twelve months, beginning in such calendar year over which
Statutory Compensation is determined (the "determination period"). If a
determination period consists of fewer than twelve months, the
applicable limit (as adjusted) shall be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is twelve.
In determining the Statutory Compensation of a
Participant for purposes of these limitations, the rules of Code section
414(q)(6) shall apply, except that 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 Plan Year. If, as a result of the application of such
rules, the adjusted limit is exceeded, then the limit shall be prorated
among the affected individuals in proportion to each such individual's
Statutory Compensation as determined under this paragraph (iv) prior to
the application of the limit.
(c) Aggregation of Certain Plans. For purposes of
this Section, the Actual Deferral Percentage for any Eligible
Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to have elective deferrals or qualified nonelective
contributions allocated to his account under two or more plans or
arrangements described in Code section 401(k) that are maintained by the
Employer or an Affiliate shall be determined as if all such elective
deferrals and qualified nonelective contributions were made under a
single arrangement.
(d) Rule for Family Members of Highly Compensated
Employees. For purposes of determining the Actual Deferral Percentage of
an Eligible Employee who is a Highly Compensated Employee, the Deferral
Contributions and Compensation of such Eligible Employee shall include
the Deferral Contributions and Compensation of Family Members, and such
Family Members shall be disregarded in determining the Average Actual
Deferral Percentage for Eligible Employees who are Non-Highly
Compensated Employees.
(e) Compliance with Regulations. The determination
and treatment of the Deferral Contributions and Actual Deferral
Percentage of any Eligible Employee shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
(f) Distribution of Excess Contributions. The
following rules shall govern the distribution of any Excess
Contributions:
(i) Notwithstanding any other provision of the
Plan, Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each Plan
Year beginning after December 31, 1988, to Participants on whose behalf
such Excess Contributions were made for the preceding Plan Year.
(ii) For purposes of the Plan, "Excess
Contributions" shall mean the amount described in Code section
401(k)(8)(B).
(iii) Excess Contributions shall be adjusted
for income or loss. The income or loss allocable to Excess
Contributions shall be determined in the same manner as set forth in
Section 5.1(d) with regard to Excess Deferrals.
(g) Ordering Rules. The determination of Excess
Contributions shall be made after first determining the Excess Deferral
Amounts.
(h) Forfeiture of Matching Contributions. Effective
January 1, 1993, any Matching Contributions related to Excess
Contributions shall be forfeited.
5.3 Limitations on Employer Matching Contributions and
Voluntary Contributions of Highly Compensated Participants.
(a) Limitations. Effective January 1, 1987, the
Average Contribution Percentage for Eligible Employees who are Highly
Compensated Employees for the Plan Year shall bear a relationship to the
Average Contribution Percentage for all other Eligible Employees for
such Plan Year which meets one of the following tests:
(i) the Average Contribution Percentage for
Eligible Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution Percentage for Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(ii) the Average Contribution Percentage for
Eligible Employees who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution Percentage for Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 2, provided the Average Contribution Percentage for
Eligible Employees who are Highly Compensated Employees does not exceed
the Average Contribution Percentage for Eligible Employees who are Non-
Highly Compensated Employees by more than two percentage points or,
effective January 1, 1989, in conjunction with the Average Actual
Deferral Percentage test under Section 5.2, the aggregate limit
prescribed under section 1.401(m)-2 of Treasury Regulations to prevent
multiple use of this alternative test.
(b) Definitions. For purposes of this Section 5.3
the following definitions shall apply:
(i) "Contribution Percentage" shall mean the
ratio (expressed as a percentage) of the Employer Matching Contributions
and Voluntary Contributions on behalf of the Eligible Employee for the
Plan Year to the Eligible Employee's Statutory Compensation for the Plan
Year.
(ii) "Average Contribution Percentage" shall
mean the average (expressed as a percentage) of the Contribution
Percentages of the Eligible Employees in a group.
(iii) "Eligible Employee" shall mean any Covered
Employee who has met the eligibility requirements of Article II, who is
eligible to elect to have Deferral Contributions made to the Plan on his
behalf, and who, if he made such election, would have Employer Matching
Contributions allocated to his Employer Matching Contribution Account
for the Plan Year.
(iv) "Statutory Compensation" shall have the
same meaning as set forth in Section 5.2(b)(iv).
(c) Aggregation of Certain Plans. (i) For purposes
of this Section 5.3, the Contribution Percentage for any Eligible
Employee who is a Highly Compensated Employee for the Plan Year and who
is eligible to make employee contributions, or to have matching
contributions, qualified non-elective contributions or elective
deferrals allocated to his account under two or more plans described in
Code section 401(a) or arrangements described in Code section 401(k)
that are maintained by the Employer or an Affiliate shall be determined
as if all such contributions and elective deferrals were made under a
single plan.
(ii) In the event that this Plan satisfies the
requirements of Code section 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
5.3 shall be applied by determining the Contribution Percentages of
Eligible Employees as if all such plans were a single plan.
(d) Rule for Family Members of Highly Compensated
Employees. For purposes of determining the Contribution Percentage of
an Eligible Employee who is a Highly Compensated Employee, the Employer
Matching Contributions and Compensation of such Eligible Employee shall
include the Employer Matching Contributions and Compensation of Family
Members, and such Family Members shall be disregarded in determining the
Average Contribution Percentage for Eligible Employees who are Non-
Highly Compensated Employees.
(e) Compliance with Regulations. The determination
and treatment of the Contribution Percentage of any Eligible Employee
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(f) Distribution of Excess Aggregate Contributions.
The following rules shall govern the distribution of any Excess
Aggregate Contributions:
(i) Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year beginning after December 31,
1988, to Participants to whose Employer Matching Contribution Accounts
or Voluntary Contribution Accounts such Excess Aggregate Contributions
were made for the preceding Plan Year.
(ii) For purposes of the Plan, "Excess Aggregate
Contributions" shall mean the amount described in Code section
401(m)(6)(B).
(iii) Excess Aggregate Contributions shall be
adjusted for income or loss. The income or loss allocable to Excess
Aggregate Contributions shall be determined in the same manner as set
forth in Section 5.1(d) with regard to Excess Deferrals.
5.4 Code Section 415 Limitations.
(a) Maximum Annual Addition. Notwithstanding any
other provision in the Plan, effective January 1, 1987, the Annual
Addition to a Participant's Accounts for any Limitation Year shall in no
event exceed the lesser of:
(i) $30,000 (or such other limit as may be the
maximum permissible pursuant to the provisions of Code section
415(c)(l)(A) and the rulings, announcements and regulations issued
thereunder); or
(ii) twenty-five percent (25%) of such
Participant's Limitation Compensation for the Limitation Year.
However, the compensation limitation referred to in (ii) above
shall not apply to:
(1) any contribution for medical benefits
(within the meaning of Code section 419A(f)(2)) after separation from
service which to otherwise treated as an Annual Addition; or
(2) any amount otherwise treated as an Annual
addition under Code section 415(l)(1).
The "Annual Addition" shall be for such Year, the sum of:
(1) Employer contributions (other than excess
deferrals distributed in accordance with Treasury Regulations
(section)1.402(g)-1(e)(2) or (3));
(2) Employee contributions (determined without regard
to any rollover contributions to a simplified employee pension which are
excludable from gross income under Code section 408(d)(3));
(3) forfeitures; and
(4) amounts described in Code section 415(l)(1) and
section 419A(d)(2).
For the purposes of this Section, contributions to, and forfeitures
reallocable under any other qualified defined contribution plan
sponsored by the Employer or by an Affiliate shall be considered as
contributions to, or forfeitures under the Plan, as the case may be.
(b) Secondary Limitation. In no event shall the
amount allocated to the Account of any Participant for any Limitation
Year cause the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction, described in paragraphs (1) and (2) below, to exceed
1.0, or such other limitation as may be applicable under Code section
415 with respect to any combination of qualified plans without
disqualification of any such plan.
(1) "Defined Benefit Fraction" shall be a
fraction,
(A) the numerator of which is the sum of the
projected annual benefits of the Participant under all tax-qualified
defined benefit pension plans sponsored by the Employer and all
Affiliated Companies (as of the close of the Limitation Year), and
(B) the denominator of which is the lesser of (1)
1.25 multiplied by the dollar limitation in effect under Code section
415(b)(1)(A) for such Participant Limitation Year, or (2) the product of
(i) 1.4, multiplied by (ii) the amount which may be taken into account
under Code section 415(b)(1)(B) with respect to such individual for such
Limitation Year.
TEFRA Transition Rule. In the case of a Participant who
participated prior to January 1, 1983, in any defined benefit plan of
the Employer or an Affiliate which was in existence on July 1, 1982, the
transition rule set forth in section 235(g)(4) of TEFRA may be applied
in determining the Defined Benefit Plan Fraction.
(2) "Defined Contribution Fraction" shall be a
fraction,
(A) the numerator of which is the sum of the Annual
Additions to the Participant's Account as of the close of the Limitation
Period of reference, treating as an Annual Addition under the Plan all
amounts which satisfy the definition of Annual Addition hereunder but
which were accumulated under any other qualified defined contribution
plan sponsored by the Employer or any Affiliated Company; and
(B) the denominator of which is the sum of the
denominator increments (as of the close of the Limitation Year) for all
of the Participant's years of service with the Employer or any
Affiliated Company, where the denominator increment for each such year
of service is the lesser of (1) the product determined by multiplying
1.25 by the dollar limitation in effect under Code section 415(c)(l)(A)
for such year of service (determined without regard to Code section
415(c)(6)), or (2) the product determined by multiplying 1.4 by the
amount which may be taken into account under Code section 415(c)(1)(B)
(or Code sections 415(c)(7) or 415(c)(8), if applicable) with respect to
such individual for such year.
(C) Aggregation Rules. For purposes of applying the
limitations of this Section applicable to a Participant for a particular
Limitation Year:
(1) all tax-qualified defined benefit plans ever
maintained by the Employer will be treated as one defined benefit plan;
and all tax-qualified defined contribution plans ever maintained by the
Employer will be treated as one defined contribution plan; and
(2) any tax-qualified defined benefit plan or
defined contribution plan maintained by the Employer.
5.5 Order of Reductions. In the event that the amount
tentatively available for allocation to the Account of any Participant
in any Limitation Year exceeds the maximum permissible hereunder, there
shall first be returned to the Participant such portion of the
supplemental contributions he made pursuant to Section 4.2(a) during
such Limitation Year (if any such contributions were made) as is
necessary to reduce the Annual Addition to his Account to the maximum
allowable hereunder. If further reduction in the amount allocable to
the Participant's Account is required, the Participant's share of
Employer contributions and reallocable forfeitures shall be reduced to
the extent necessary to result in conformity to the limitations
expressed herein. Amounts released under this Plan pursuant to the
preceding sentence shall be placed in a suspense account, the earnings
and accretions of which shall be applied against the administrative
costs of the Plan and otherwise treated as investment yield of the Trust
Fund.
ARTICLE VI
ALLOCATION OF CONTRIBUTIONS
6.1 Allocation of Deferral Amounts. There shall be directly
and
promptly allocated to the Deferral Contribution Subaccount of each
Participant the Deferral Amounts contributed by the Employer to the Plan
by reason of any Deferral Agreement in force between the Employer and
that Participant.
6.2 Allocations to Matching Contribution Subaccounts. The
Employer contribution (if any) for an Accrual Computation Period shall
be allocated among the Matching Contribution Subaccounts of persons who
are Active Participants for such Accrual Computation Period for the
purposes of this Section (as determined pursuant to Section 6.7),
crediting each such Matching Contribution Subaccount with an amount
determined by multiplying the amount available for allocation hereunder
by a fraction, the numerator of which is the amount allocated to the
Participant's Deferral Contribution Subaccount pursuant to Section 6.1
hereof for such Accrual Computation Period, but not more than four
percent (4%) of his Compensation for such Accrual Computation Period,
and the denominator of which is the aggregate amount allocated to all
such Participants' Deferral Contribution Subaccounts pursuant to Section
6.1 hereof for such Accrual Computation Period to the extent such
amounts do not exceed four percent (4%) of the Compensation of the
Participant to whose Deferral Contribution Subaccount they are allocated
for such Accrual Computation Period.
6.3 Multiple Employers. If Employer consists of more than one
entity, the provisions of Section 6.2 shall apply separately to each
such entity, and, except as hereinafter provided, a contribution made by
any such entity shall be allocated as though the only Active
Participants in the Plan for the Accrual Computation Period with respect
to which such contribution was made were those Active Participants
employed by such entity, taking into account only the Compensation paid
to such Active Participants by such entity.
6.4 Allocations to After-Tax Voluntary Contribution
Subaccounts. All amounts received as supplemental Participant
contributions pursuant to Sections 4.2(a) hereof shall be allocated
directly to the After-Tax Voluntary Contribution Subaccount of the
Participant on whose behalf such amount was received. In addition,
amounts attributable to all contributions made by the Participant that
were designated as "Basic Contributions" under the Plan as it existed
prior to January 1, 1984, all contributions made by the Participant that
were designated as "Supplemental Contributions" under the Plan as it
existed prior to January 1, 1984, and all earnings and accretions
attributable to such contributions shall be maintained in the After-Tax
Voluntary Contribution Subaccount.
6.5 Allocations to Restoration Contribution Subaccounts. Any
amount received from a Participant as a restoration contribution shall
be allocated to the subaccounts of such Participant from which such
amount was originally distributed, provided, however, that the
aggregation of the amounts so allocated may, for bookkeeping purposes,
be tracked as a "restoration contribution subaccount."
6.6 Allocations to Rollover Contribution Subaccounts. Any
amounts received as Rollover Contributions under Section 4.3 shall be
allocated directly to the Rollover Contribution Subaccount of the
Participant on whose behalf such amount was received.
6.7 Determination of Active Participant Status for an Accrual
Computation Period.
(a) Entitlement to Share in Allocation. A
Participant shall be an Active Participant for the purposes of
Section 6.2 hereof, and shall be entitled to share in the allocation of
the Employer contribution for a specific Accrual Computation Period,
only if he did at least one of the following during the Accrual
Computation Period:
(1) remained in the employ of the Employer or of
an Affiliate through the end of the Accrual Computation Period;
(2) retired (at or after Normal Retirement
Date), experienced Total Disability, or died during the Accrual
Computation Period; or
(3) was on Excused Absence at the end of the
Accrual Computation Period, having received Compensation during the
Accrual Computation Period.
Except as otherwise provided above in this subsection (a)
and in subsection (b) of this Section, Participants not in the employ of
the Employer on the last day of the Accrual Computation Period (for
reasons such as resignation, discharge with or without cause, or
expiration of a period of Excused Absence followed by a failure to
return timely to the employ of the Employer) shall not share in the
allocation of the Employer contribution for such Accrual Computation
Period.
(b) Effect of Status Change. Any Participant who
remained in the employ of the Employer through the end of the Accrual
Computation Period, but who changed from an eligible to an ineligible
classification (or vice-versa) during the Computation Period, shall be
considered an Active Participant only with respect to his Compensation
paid for Hours of Service completed in an eligible status during such
Computation Period.
6.8 Non-vested Amounts. Amounts not vested in a Participant
who has experienced a Period of Severance of at least one (1) year and
who has not again achieved Active Participant status shall be applied as
promptly as practicable to reduce Employer contributions required
pursuant to Section 3.1(b) hereof, subject, however, to such rules for
amortization of experience gains as may apply where the Plan has
experienced unamortized funding deficiencies arising from waivers of
minimum funding requirements. If a Participant whose Account has been
reduced by such application of non- vested amounts returns to Active
Participant status prior to his having experienced a Period of Severance
of five (5) years, his Account shall be restored to the extent of the
reduction described herein by an additional contribution by the Employer
when and if he makes a restoration contribution as provided in Section
4.4. A Participant who had no vested interest at the time of his
Severance from Service Date and thereafter was deemed to have forfeited
his entire Matching Contribution Subaccount balance shall be deemed to
have made a restoration contribution pursuant to Section 4.4 on the date
of his return to service covered under the Plan if such return occurs
prior to the fifth anniversary of his Severance from Service Date.
6.9 Special Rules for Top-Heavy Plans.
(a) General Rule as to Participation in Allocations.
The allocation made under Section 6.2 hereof to the Matching
Contribution Subaccount of each Active Participant who is a Non-key
Employee for any Plan Year including a Plan Year in which the Plan is a
Top-Heavy Plan or a Super Top-Heavy Plan shall be not less than the
lesser of:
(1) three percent (3%) of his Limitation
Compensation, limited to the extent required under Code section 416(d),
of each such Participant for such Plan Year; or
(2) the percentage of Compensation so allocated
under said Section 6.2 to the Account of the Key Employee for whom such
percentage is the highest for such Plan Year.
(b) Special Rules. Subsection (a) hereof shall apply
as modified in this subsection (b) in the circumstances hereinafter set
forth:
(1) As to each Active Participant who is also a
Participant under a qualified defined benefit pension plan sponsored by
the Employer or by an Affiliated Company, if the accrued benefit under
such defined benefit plan for such Active Participant satisfies the
benefit accrual minimum under Code section 416(c)(1), subsection (a)
shall not apply.
(2) If the Plan is a Top-Heavy Plan but not a
Super Top-Heavy Plan, and if one or more Participants in the Plan are
also Participants in a qualified defined benefit pension plan sponsored
by the Employer or by an Affiliated Company, "seven and one-half percent
(7-l/2%)" shall be substituted for "three percent (3%)" in paragraph (1)
of subsection (a) hereof and paragraph (2) of subsection (a) hereof
shall not apply.
(3) If the Plan is a Super Top-Heavy Plan, and
if one or more Participants in the Plan are also Participants in a
qualified defined benefit pension plan sponsored by the Employer or by
an Affiliated Company, "five percent (5%)" shall be substituted for
"three percent (3%)" in paragraph (1) of subsection (a) hereof and
paragraph (2) of subsection (a) hereof shall not apply.
For the purposes of determining whether or not the provisions of this
Section have been satisfied, (i) contributions or benefits under chapter
2 of the Code (relating to tax on self-employment income), chapter 21 of
the Code (relating to Federal Insurance Contributions Act), title II of
the Social Security Act, or any other federal or state law shall be
disregarded; (ii) employer contributions made to the Plan under any
salary reduction or similar arrangement for Plan Years beginning prior
to January 1, 1985, shall be disregarded; and (iii) all defined
contribution plans in the Aggregation Group shall be treated as a single
plan. For the purposes of determining whether or not the requirements
of this Section have been satisfied, contributions allocable to the
account of the Participant under any other qualified defined
contribution plan that is part of the Aggregation Group shall be deemed
to be contributions made under the Plan, and, to the extent thereof, no
duplication of such contributions shall be required hereunder solely by
reason of this Section.
ARTICLE VII
INVESTMENTS
7.1 Investment of Assets. All contributions shall be paid
over to the Trustee and shall be invested by the Trustee in accordance
with the Plan and Trust Agreement. The Trustee shall invest all assets
held in all Matching Contribution Subaccounts in Employer Stock as
provided in Section 3.5 hereof. Effective June 1, 1993, the Trustee
shall invest all Employer contributions allocated to Matching
Contribution Subaccounts in Employer Stock as provided in Section 3.5
hereof. Notwithstanding the foregoing, effective June 1, 1993, a
Participant who is fully vested in his Matching Contribution Subaccount
may direct the Trustee to liquidate all or a portion of the value of the
assets held on his behalf in the Safeguard Scientifics, Inc. Stock Sub-
Fund and reinvest such amounts as provided in Section 7.4(f), other than
amounts attributable to Employer Matching Contributions made with
respect to the current or previous Plan Year. Amounts credited to the
Deferral Contribution Subaccounts, After- Tax Voluntary Contribution
Subaccounts and Rollover Subaccounts of Participants shall be invested
in the respective Fund or Funds elected by Participants in the manner
provided in Section 7.4.
7.2 Crediting of Contributions.
(a) Employer Contributions other than Deferral
Amounts. Any contribution made in respect of any Plan Year (or
fiscal year ending during a Plan Year) by the Employer for allocation
pursuant to Section 6.2 hereof shall be deemed to have been made
immediately after the valuation occurring at the end of the Plan Year
with respect to which such contribution was made or during which such
fiscal year ended.
(b) Contributions to Deferral Contribution
Subaccounts, After-Tax Voluntary Contribution Subaccounts and Rollover
Contribution Subaccounts. Contributions made during any Plan Year to a
Deferral Contribution Subaccount, an After-Tax Voluntary Contribution
Subaccount or a Rollover Contribution Subaccount shall be credited as
promptly as possible after receipt thereof, and, in the case of Deferral
Contribution Subaccount deposits, shall in no event be deemed to have
been made later than the last day of the Plan Year with respect to which
made. Notwithstanding the foregoing, if the Participant becomes
entitled to receive the entire vested amount standing to his credit
during any Plan Year and such amount is distributed to him (or to his
Beneficiary), the distribution shall include all amounts contributed for
his Account during the Plan Year in which the distribution occurs, as
though the same were credited to his Account as of the date of
distribution.
7.3 Crediting of Investment Results.
(a) General. As of any Valuation Date, the earnings
and accretions of the Fund attributable to investment of Fund
assets, reduced by losses experienced (whether or not realized) and
expenses incurred since the preceding Valuation Date shall be allocated
among the Accounts of the Participants and Beneficiaries in proportion
to the balances in such Accounts as of the prior Valuation Date, after
reducing such prior Valuation Date balance by any amounts withdrawn,
distributed, or transferred from that Account since such prior Valuation
Date and increasing such prior Valuation Date balance by the amount of
any contributions made since such prior Valuation Date multiplied by a
weighing factor based on the length of time from the date of the
contribution to the current Valuation Date. Each subaccount maintained
for a Participant's Account shall be considered a separate account for
the purpose of crediting investment results pursuant to this Section.
Each Fund of investments offered by the Plan shall be accounted for as a
separate Fund for the purposes of computing and crediting investment
results.
(b) Segregated Accounts. To the extent that the
Trustee maintains segregated accounts on behalf of any Participant or
Beneficiary, there shall be credited to the Account of such Participant
or Beneficiary all earnings and accretions, if any, generated by that
segregated account since the immediately preceding Valuation Date, and
there shall be deducted from such account all identifiable separate
expenses incurred in the operation and maintenance of such account.
(c) Amounts to be Distributed. Where a distribution
is to be made as of a particular Valuation Date, there shall be no
adjustment in the amount to be distributed by reason of the passage of
time or investment experience of the Fund between the Valuation Date as
of which the amount of such distribution is determined and the date of
payment; provided, however, that this subsection (c) shall not apply to
the Safeguard Scientifics, Inc. Stock Sub-Fund, the Novell Stock Sub-
Fund, or any other Stock Sub-Fund established pursuant to Section
7.4(e), all of which shall be valued as of the actual date of
distribution.
7.4 Investment Direction By Participants.
(a) Rights of Participants. Every Participant shall
have the right to designate the investment category or categories
in which the Trustee is to invest all or a portion of the aggregate
balance credited to such Participant's
(1) Deferral Contribution Subaccount,
(2) After-Tax Voluntary Contribution Subaccount,
and
(3) Rollover Contribution Subaccount.
A Participant may exercise investment discretion solely with
respect to the aggregate of the assets credited to the aforesaid
subaccounts. Amounts contributed by the Employer pursuant to Section
3.1 shall not be subject to investment direction by the Participant.
Effective June 1, 1993, a Participant may not exercise
investment discretion with respect to amounts credited to his Matching
Contribution Subaccount except that, subject to Section 7.4(f), any
Participant who is fully vested in his Matching Contribution Subaccount
may direct the Trustee to liquidate and reinvest in a designated
investment category or categories amounts credited to his Matching
Contribution Subaccount other than amounts attributable to Employer
Matching Contributions made with respect to the current or previous Plan
Year.
(b) Separate Investment Elections. The Plan
Administrator may, but need not, direct the Trustee to segregate the
assets allocated to the Deferral Contribution Subaccount, Rollover
Contribution Subaccount, and After-Tax Voluntary Contribution Subaccount
of each Participant. During any period in which the Trustee is
segregating such subaccounts, each Participant who has a balance to his
credit in each such subaccounts may exercise a separate investment Fund
election with respect to each such subaccount. In the absence of such
segregation of subaccounts by the Trustee, any investment election by a
Participant shall apply to the aggregate of the balances of such
subaccounts.
(c) Initial Investment Election. Not later than
thirty days after the Entry Date on which an Employee commences
participation in the Plan, such Participant shall complete, sign and
deliver to the Plan Administrator on a form provided by the Plan
Administrator for this purpose, an investment election form which shall
provide for the investment of such Participant's Deferral Contributions,
After-Tax Voluntary Contributions, and Rollover Contributions in one or
more of the investment funds then available to Participants under the
Plan. A Participant may exercise his investment election in 5%
increments of the contributions made on his behalf.
(d) Changes in Investment Directions. A Participant,
by filing a written election form, may change his investment election
effective as of any Quarterly Valuation Date with respect to
contributions paid by the Employer to the Trustee. Any such change in
investment election by a Participant shall be made in writing on forms
provided by the Plan Administrator and must be received by the Plan
Administrator not less than seven (7) days prior to the Quarterly
Valuation Date as of which it is to be effective. Designations and
changes in designations shall apply only to amounts paid to the Trustee
and allocated to the Participant's Account after such effective date.
(e) Available Investment Funds. There shall be
offered the following investment funds as investment options:
(1) Safeguard Scientifics, Inc. Stock Sub-Fund.
This fund is an unsegregated fund together with earnings thereon
invested in Stock of Safeguard Scientifics, Inc. (not including
Affiliate stock). Such Stock shall be purchased either on the open
market, by private purchase, or from the issuer, or effective January 1,
1995, shall be acquired by the receipt of treasury shares or the
issuance of new shares by the Company, provided, however, that no such
acquisition, private purchase or purchase from the issuer shall be made
at a price greater than the then-current market price.
(2) Money Market Sub-Fund This fund is designed
to seek high current income that is consistent with preservation of
capital and liquidity. The fund is invested in money market instruments
such as certificates of deposit and bankers acceptances, commercial
paper, and U.S. Government Agency securities.
(3) Bond Sub-Fund The fund seeks high current
income consistent with prudent investment risk and preservation of
capital. The fund invests primarily in securities guaranteed by the
U.S. Government. Typical holdings include obligations of various
maturities issued by the U.S. Treasury and obligations issued or
guaranteed by certain agencies and instrumentalities of the U.S.
Government such as GNMA certificates and FHA debentures.
(4) Balanced Sub-Fund The fund primarily seeks
to emphasize current income while secondarily striving for capital
growth. The fund has the flexibility to invest in stocks, bonds and
other fixed income securities. The mix of security types will fluctuate
between fixed-income and equity securities on the basis of existing and
anticipated economic conditions.
(5) Equity Growth Sub-Fund The fund seeks long
term growth of capital and income. When selecting securities for
investment, the possibilities of appreciation and potential dividends
are given more weight than future yield. The fund invests principally
in large company common stocks but can hold other investments when
deemed advisable.
In addition to the above investment funds, the Novell
Stock Sub-Fund shall continue to be maintained for Novell stock issued
pursuant to a rights offering to Participants investing in the Safeguard
Scientifics, Inc. Stock Sub-Fund. The Novell Stock Sub-Fund is not
available for new investments or reinvestments. The Plan Administrator
may establish similar Stock Sub-Funds in the future to hold stock of
other entities acquired through rights offerings.
The Plan Administrator, in its sole discretion, may offer
to all Participants additional investment Funds and may at any time or
times cease to offer such investment Funds as the Plan Administrator
deems appropriate.
(f) Liquidation and Reinvestment. Effective as of
each Quarterly Valuation Date, a Participant may instruct the Trustee,
in writing on forms provided by the Plan Administrator, to liquidate all
or a portion of the value of the assets held on his behalf in any
investment Fund or Funds and to reinvest such proceeds in one or more
other Funds; provided that such liquidation and reapportionment is done
in 5% increments of the Participant's aggregate balance of his Deferral
Contribution Subaccount, After-Tax Voluntary Contribution Subaccount and
Rollover Contribution Subaccount, and effective June 1, 1993, that
portion of his Matching Contribution Subaccount which is subject to his
investment direction as set forth in Section 7.4(a). Such instruction
for liquidation and reinvestment of funds already invested on behalf of
any Participant must be received by the Plan Administrator not less than
seven (7) days prior to the Quarterly Valuation Date of the Plan as of
which it is to become effective, and shall grant the Trustee a
reasonable period after such Quarterly Valuation Date to complete the
process of liquidation and reinvestment. The expenses of liquidation
and reinvestment of any assets on behalf of any Participant shall be
chargeable to the Account of that Participant and shall not be general
expenses of the Trust Fund.
Effective January 1, 1992, any stock offered through a
rights offering as set forth in Section 7.4(e) above and any exercises
of warrants are not subject to (i) the 5% increment requirement or (ii)
the requirement that liquidation and reinvestment occur only as of a
Quarterly Valuation Date, as set forth in this Section 7.4(f).
(g) Rights of the Trustee. Notwithstanding any
instruction from any Participant, the Trustee shall have the right to
hold invested in short-term fixed income investments any funds intended
for investment or reinvestment, or any funds the distribution of which
is contemplated in the reasonably foreseeable future.
ARTICLE VIII
RETIREMENT AND DISABILITY BENEFITS
8.1 Normal Retirement Benefit. The Normal Retirement Benefit
payable with respect to any Participant retiring at his Normal
Retirement Date shall be equal to one hundred percent (100%) of his
Account as of the Valuation Date coincident with or next following the
Participant's Normal Retirement Date.
8.2 Deferred Retirement Benefit. The Deferred Retirement
Benefit
shall be payable with respect to any Participant who retires after his
Normal Retirement Date, and shall be equal to one hundred percent (100%)
of his Account as of the Valuation Date coincident with or next
following the Participant's actual retirement, or, if earlier, the
Valuation Date preceding the Participant's Required Beginning Date.
There shall be added to the Participant's deferred retirement benefit
all amounts allocated to his Account after the Valuation Date as of
which the amount thereof is initially determined.
8.3 Disability Benefit. The Disability Benefit shall be
payable with respect to any Participant who has suffered Total
Disability and who is separated from service of the Employer by reason
of such Total Disability. The Disability Benefit shall be equal to one
hundred percent (100%) of the Participant's Account as of the Valuation
Date coincident with or next following the Participant's disability
separation date, subject, however, to increase to date of distribution
in the case of any Participant with respect to whom the distribution of
the disability benefit described herein is deferred for a period in
excess of one year after the date of his disability termination of
employment.
8.4 Effect of Quadro. All benefits provided under this
Article VIII are subject to the provisions of any Quadro in effect with
respect to the Participant at the Participant's Benefit Commencement
Date, and are subject to diminution thereby.
ARTICLE IX
DEATH BENEFITS AND SURVIVING SPOUSE'S BENEFITS
9.1 Pre-Distribution Death Benefit. If the death of the
Participant occurs prior to his Benefit Commencement Date, there shall
be paid a benefit having a value equal to his vested Account balance,
determined as of the Valuation Date of the Plan coincident with or, if
there be no such Valuation Date, the Valuation Date next following, the
date of his death. The benefit shall be payable as follows:
(a) Surviving Spouse's Benefit. If the Participant
is survived by his Spouse, the benefit hereunder shall be paid to such
surviving Spouse except (1) to the extent that the Spouse has consented,
in a written instrument complying with all of the provisions of Section
9.3 hereof, to the payment of such benefit to another Beneficiary (or
Beneficiaries) designated by the Participant, and (2) to the extent that
there is a Quadro applicable to such benefit.
(b) Benefit Payable to Others. If the Participant
(1) is not survived by a Spouse, (2) is survived by a Spouse who has
consented, in accordance with the provisions of Section 9.3 hereof, to
the designation of a Beneficiary or Beneficiaries other than such Spouse
(but only to the extent of the portion of the Participant's Account
subject to such consent), or (3) is subject to a Quadro at the time of
his death (but only to the extent of the Quadro), the benefit hereunder
shall be paid to the Participant's Beneficiary determined in accordance
with the provisions of Section 9.4 hereof, subject, however, to the
provisions of any Quadro then in force.
(c) Death of Surviving Spouse Prior to Benefit
Commencement. If the Spouse of a Participant dies subsequent to the
death of the Participant but prior to the Benefit Commencement Date,
there shall be paid to the estate of such deceased Spouse only the
amount, if any, that such Spouse would have received under the Plan to
the date of his or her death had there been placed in force at the
earliest date on which the Participant could have retired under the Plan
and commenced the receipt of benefits (the "earliest potential benefit
date"), or, if later, the date of the Participant's death, a single life
annuity for the benefit of such Spouse, applying to the purchase thereof
one hundred percent (100%) of the balance standing to the credit of the
Participant under the Plan at such earliest potential benefit date or
date of death, after such balance was reduced to reflect the applicable
provisions of any Quadro in force as to the Participant at the time of
his death. Any balance remaining in the Account of the Participant
after the payment (if any be due) to the estate of the deceased Spouse
of the benefit described above in this subsection (c), after the payment
of premiums for any annuity purchased before the death of such Spouse,
and after giving effect to any applicable Quadro, shall be payable to
the Beneficiary determined in accordance with the provisions of Section
9.4 hereof.
9.2 Death After Benefit Commencement Date. In the event of
the death of a Participant whose benefits are in a "pay status" (i.e.,
after his Benefit Commencement Date), the death benefit shall be
determined by the provisions of any installment payout provisions in
force at the time of his death. If there be no such provisions in
force, the death benefit shall be one hundred percent (100%) of the
undistributed balance of his Account, which undistributed balance shall
be treated in the same manner as a Pre-Distribution Death Benefit under
Section 9.1 hereof.
9.3 Spousal Consent to Designation of Alternative
Beneficiary. A spouse may consent to the designation by the Participant
of one or more Beneficiaries other than such spouse to receive benefits
in the event of the death of the Participant. Any such consent shall be
in writing, and shall:
(a) acknowledge the effect of such consent;
(b) be witnessed by a representative of the Plan or
by a notary public;
(c) be subject to any Quadro applicable to the
Participant at the time of his death or at the Benefit Commencement
Date;
(d) be subject to limitations expressed therein by
the Spouse as to the portion of the Participant's Account (expressed as
a percentage or in dollar terms) to which it applies;
(e) acknowledge the specific non-spouse Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries to
which it applies;
(f) be irrevocable; and
(g) become null and void upon the termination of the
marriage between the Participant and such spouse.
9.4 Beneficiary Designation. Participants may designate a
Beneficiary under the Plan by filing with the Plan Administrator a
written designation of such beneficiary (subject to such limitations as
to the classes and number of beneficiaries and contingent beneficiaries
as the Plan Administrator from time to time may prescribe) to receive
any benefit becoming payable pursuant to this Article IX. Subject to
the requirements regarding spousal consent in Section 9.3, a Participant
may from time to time revoke or change any such designation of
beneficiary.
9.5 Effect of Quadro. Notwithstanding any other provision of
this Article IX, the Plan Administrator and the Trustee shall give full
effect to any Quadro applicable at the time of the death of the
Participant, even to the extent that giving effect to such Quadro
defeats or diminishes the interest of any Spouse or other Beneficiary
hereunder.
ARTICLE X
NONFORFEITURE PROVISIONS (VESTING)
10.1 Full and Immediate Vested Interests. Each Participant
shall at all times be fully vested in such of the following subaccounts
as may exist for him: (a) Deferral Contribution Subaccount; (b) After-
Tax Voluntary Contribution Subaccount; and (c) Rollover Contribution
Subaccount. A Participant shall also be fully vested in any restoration
contributions made pursuant to Section 4.4.
10.2 Employer Matching Contribution Subaccounts.
(a) Vesting. A Participant shall be 100% vested in
his Matching Contribution Subaccount upon the earliest to occur of the
following:
(1) completion of twelve months (or, in the case
of any Employee who first became an Active Participant on or after
January 1, 1985, twenty-four months) of participation (whether or not
successive months) in the Plan, where in each of such months Deferral
Amounts were contributed for the Participant's Account;
(2) completion of three Years of Vesting
Service;
(3) the Participant's Normal Retirement Age
while actively employed by the Employer or any Affiliated Company;
(4) Total Disability while actively employed by
the Employer or any Affiliated Company; or
(5) death while actively employed by the
Employer or any Affiliated Company.
(b) Minimum Vesting. In no event shall the vested
interest of a Participant in his Matching Contribution Subaccount be
less than so much of such subaccount as is represented by the Employer
matching portion of his Restoration Contribution Subaccount, if any.
10.3 Disregarded Service for Vesting Purposes. Service after
a period of Disregarded Prior Service shall not increase the
Participant's vested interest in so much of his Account as was accrued
with respect to the period of Disregarded Prior Service. Otherwise,
service subsequent to one or more Severance from Service Dates shall be
aggregated with service prior to such Severance from Service Dates in
determining the Participant's vested interest in accruals to his Account
attributable to service both before and after such Severance from
Service Dates.
10.4 Amendments to the Vesting Schedule.
(a) If the vesting schedule under the Plan is
amended, each Participant who has completed at least three (3) Years of
Service with the Employer may elect, during the election period
specified in this Section, to have the vested percentage of his Account
derived from Employer contributions determined without regard to such
amendment.
(b) For the purposes of this Section, the election
period shall begin as of the date on which the amendment changing the
vesting schedule is adopted, and shall end on the latest of the
following dates:
(1) the date occurring sixty (60) days after the
Plan amendment is adopted; or
(2) the date which is sixty (60) days after the
day on which the Plan amendment becomes effective; or
(3) the date which is sixty (60) days after the
day the Participant is issued written notice of the Plan amendment by
the Plan Administrator or by the Employer; or
(4) such later date as may be specified by the
Plan Administrator.
The election provided for in this Section shall be made in
writing and shall be irrevocable when made.
ARTICLE XI
METHODS AND TIMING OF BENEFIT DISTRIBUTIONS
11.1 Forms of Benefit Payments. Benefits shall normally be
paid
as a single-sum distribution. However, Participants becoming eligible
for distributions of their respective vested interests may, not less
than thirty (30) days before the benefit first becomes distributable,
elect that, in lieu of single-sum distributions, their interests be paid
in installments over a fixed period if such payments do not constitute
an "annuity" within the meaning of section 205 of Title I of ERISA or
Code section 401(a).
The Participant (or, in the event of his death or incapacity,
his legal representative or Beneficiary(ies)) may request, subject to
the consent of the Plan Administrator, to receive any portion of the
Participant's Account which is, at the time of the distribution, held in
Employer Stock, to be distributed in Stock in lieu of cash.
If an installment distribution, as provided in the first
paragraph of this Section, is elected, the following rules shall apply:
(a) The payment period shall not exceed the life
expectancy of the Participant at his Benefit Commencement Date; or, if
the benefit is to be distributed to a married Participant, over the
joint life and survivorship expectancy of the Participant and his
Spouse.
(b) Payments shall be made in installments which are
as nearly equal as possible, and shall be made not less frequently than
annually nor more frequently than monthly, as determined by the Plan
Administrator.
(c) The total amount subject to installment payment
shall be segregated as a single account and shall not thereafter share
in the investment activity of the Fund. Such segregated account shall
be an interest bearing account, and all interest thereon shall inure to
the benefit of the Participant on whose behalf such account was
established.
(d) At any time during the installment period, the
Plan Administrator may accelerate the remaining installments by paying
the balance of such account to the distributee.
(e) Should the Participant die during the benefit
payment period prior to the completion of benefit distributions, the
remaining portion of his interest will be distributed to his designated
Beneficiary at least as rapidly as under the method of distributions
being used as of the date of his death.
(f) If the Account of the Participant is subject to a
Quadro, the provisions of such Quadro shall take precedence over any
installment or single-sum distribution arrangement otherwise in effect
hereunder, and such installment or single-sum distribution arrangement
shall be modified to accommodate such Quadro.
11.2 Benefit Commencement Dates.
(a) Retirement and Disability Benefits. Benefits
payable by reason of a Participant's retirement or Total Disability
shall normally be paid as promptly as practicable following the
Valuation Date of the Plan coincident with (or if there be none, the
Valuation Date next following) the event entitling the Participant to
such distribution.
In the event of Total Disability, however, benefit
payments shall not commence prior to the Participant's Normal Retirement
Age without the Participant's consent. A Participant who is Totally
Disabled may elect commencement as of any Valuation Date prior to his
Normal Retirement Age, provided such election is made within the 90 day
period ending on such Valuation Date. Notwithstanding the foregoing, if
the Participant's entire vested Account balance does not exceed $3,500,
distribution in a single-sum shall be made as promptly as practicable
after the Valuation Date next following such Participant's Total
Disability.
Unless the Participant elects to defer his Benefit
Commencement Date, retirement and disability benefits shall commence not
later than the sixtieth (60th) day after the latest of the close of the
Plan Year in which (1) occurs the date on which the Participant attains
age 65, (2) occurs the tenth anniversary of the year in which the
Participant commenced participation in the Plan, or (3) the Participant
terminates service with the Employer. Notwithstanding the foregoing,
the Participant's Benefit Commencement Date shall in no event be later
than his Required Beginning Date.
(b) Death Benefits. Benefits payable by reason of
the death of the Participant shall commence and be paid as follows:
(1) if to any Beneficiary after the commencement
of installment benefit payments to the Participant for a fixed period
during his lifetime, commencing upon the death of the Participant and
continuing in installments for the balance of the original installment
period, subject to acceleration at the election of the Beneficiary;
(2) if to the Participant's Spouse other than
under paragraph (1), if the Participant had so directed, in installments
commencing within one (1) year of the Participant's death and continuing
for over a period not to exceed the spouse's life expectancy; and
(3) if to any Beneficiary other than as set
forth in paragraphs (1) or (2) hereof, commencing within one (1) year of
the date of the Participant's death, in a single sum, or in installments
over a period not longer than four (4) years and eleven (11) months from
the date of the Participant's death.
If any portion of the Account of a Participant is payable after the
death of the Participant's Spouse, if the Participant's Spouse was the
sole primary Beneficiary with respect to such portion, and if the
Participant did not designate a contingent Beneficiary who survives the
Participant's Spouse to receive such portion, the Participant's Spouse
shall have the right to act on behalf of the deceased Participant to
designate one or more beneficiaries to receive such portion upon the
death of such Spouse. Failure on the part of the Spouse to exercise
this power of beneficiary designation and failure of the Participant's
designated contingent Beneficiaries to survive the Spouse shall result
in payment to the estate of the deceased Spouse of the amount subject to
the Spouse's power of beneficiary designation. All amounts payable
after the death of the Spouse shall be paid as promptly as practicable
after the death of the Spouse, with all such payments commencing within
one (1) year of such death and being completed within four (4) years and
eleven (11) months of such death.
(c) Deferred Vested Benefits.
(1) Termination of Employment. On and after the
Severance of Service Date of a Participant whose severance from service
is for any reason other than retirement, Total Disability, or
death, such Participant shall have the right to elect to receive a
distribution of the vested portion of his Account balance as of any
Valuation Date coincident with or following such severance from service.
Such election must be in writing and must be made within the 90 day
period ending on the elected Valuation Date. In the event that a
Participant elects to receive such a distribution, the Plan
Administrator shall cause such distribution to be made as promptly as
practicable following such Valuation Date.
(2) Election Not to Accept Distribution. In any
case in which a Participant does not elect to receive a distribution of
the full amount of his vested Account balance, Benefits payable to a
living Participant by reason of such severance from service (other than
due to retirement, death or Total Disability) and consequent
ineligibility to continue benefit accrual under the Plan shall normally
be payable as of the date that would have been the Participant's Normal
Retirement Date, and shall not, in any event, be deferred beyond the
Participant's Required Beginning Date.
Notwithstanding the foregoing, if the value of the
Participant's entire vested Account balance does not exceed $3,500,
distribution in a single-sum shall be made as promptly as practicable
after the Valuation Date next following his severance from service.
All benefit distributions under this Plan
shall be made in accordance with regulations under Section 401(a)(9),
including the minimum distribution incidental benefit rules of proposed
Treasury Regulation section 1.401(a)(9)-2, or any successor thereto.
(3) Notwithstanding any otherwise applicable
Required Beginning Date, if a five-percent owner, prior to January 1,
1984, made the election permitted by section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act of 1982, and such election remains in
force, his Required Beginning Date shall not be earlier than the Benefit
Commencement Date provided for pursuant to that election.
11.3 Post-Distribution Credits. In the event that, after
the payment of a single-sum distribution under this Plan, there shall
remain in the Participant's Account any funds, or any funds shall be
subsequently credited to such Account, such additional funds, to the
extent vested, shall be paid to the Participant or applied for the
Participant's Account as promptly as practicable. In the event that
after an installment payout has commenced there shall be additional
funds credited to the Account of a Participant, the Plan Administrator
shall direct adjustment of the remaining installment payments so as to
include all such credited amounts, as nearly evenly as possible, in the
remaining installment payments.
11.4 Direct Rollovers.
(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 Plan Administrator, 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.
(i) 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 of 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 includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(ii) 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), that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse,
an eligible retirement plan is an individual retirement account or
individual retirement annuity.
(iii) 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 section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a
payment by the Plan to the eligible retirement plan specified by the
distributee.
11.5 Participant's Consent to Distribution of Benefits.
Effective January 1, 1994:
(a) Except as provided in subsection (b) below, the
Plan Administrator shall provide each Participant, not more than 90 days
and (except as provided in subsection (c) below) not less than 30 days
prior to the date his interest in his Account shall be paid to him,
written notice of his right to defer receipt of the payment until on or
after his Normal Retirement Date. Payment shall not be made prior to
the Participant's Normal Retirement Date unless the Participant
affirmatively elects a distribution in writing, on a form filed with the
Plan Administrator.
(b) The written notice described in subsection (a)
above shall not apply to the payment if (1) the Participant's Account is
not greater than $3,500, or (2) the payment is made on or after the
Participant's Normal Retirement Date.
(c) A payment may be made less than 30 days after the
notice described in subsection (a) above is given to the Participant,
provided that:
(1) the Plan Administrator clearly informs the
Participant that he has a right to a period of at least 30 days after
receiving such notice to consider the decision of whether or not to
elect a distribution; and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
ARTICLE XII
TOP-HEAVY PROVISIONS
12.1 Top-Heavy Definitions. The following definitions apply
to the provisions of this Article:
(a) "Determination date" shall mean, with respect to
any Plan Year, the last day of the preceding Plan Year.
(b) "Determination period" shall mean, with respect
to any Plan Year, the Plan Year containing the determination date and
the four preceding Plan Years.
(c) "Key Employee" shall mean any Employee or former
Employee (and the beneficiaries of such Employee) who at any time during
a Plan Year included in the determination period was --
(1) an officer of the Employer or any Affiliate
having annual Top-Heavy Compensation from the Employer and the
Affiliates greater than 50% of the amount in effect under Code section
415(b)(1)(A) for such Plan Year;
(2) one of the ten Employees having annual Top-
Heavy Compensation from the Employer and the Affiliates greater than the
amount in effect under Code section 415(c)(1)(A) for such Plan Year and
owning (or considered as owning within the meaning of Code section 318)
both more than a 1/2% interest and the largest interests in the Employer
or any Affiliate;
(3) a five-percent owner of the Employer or any
Affiliate (within the meaning of Code section 416(i)(1)(B)(i)); or
(4) a one-percent owner of the Employer or any
Affiliate (within the meaning of Code section 416(i)(1)(B)(ii)) who has
an annual Top-Heavy Compensation from the Employer and the Affiliate of
more than $150,000.
For purposes of paragraph (1), no more than 50 employees (or if
less, the greater of three or 10% of the employees) shall be treated as
officers. The determination of who is a key Employee shall be made in
accordance with Code section 416(i) and regulations thereunder.
(d) "Non-key Employee" shall mean any Employee who is
not a key Employee.
(e) "Required aggregation group" shall mean, with
respect to any Plan Year:
(1) each defined contribution plan and each
defined benefit plan of the Employer or any Affiliate in which a key
Employee is a participant or was a participant at any time during the
determination period (regardless of whether the plan has been
terminated); and
(2) each other defined contribution plan and
each other defined benefit plan of the Employer or any Affiliate which,
during the determination period, enables any defined benefit plan or
defined contribution plan described in paragraph (i) to meet the
requirements of Code section 401(a)(4) or section 410(b).
(f) "Permissive aggregation group" shall mean, with
respect to any Plan Year, the required aggregation group plus any other
defined contribution plan or defined benefit plan which the Employer
elects to include, provided such permissive aggregation group meets the
requirements of Code section 401(a)(4) and section 410(b) with such
defined contribution plan or defined benefit plan being taken into
account.
(g) "Top-heavy Plan" shall mean, for any Plan Year
beginning on or after January l, 1984, this Plan if:
(1) this Plan is not part of a required or
permissive aggregation group, and the top-heavy ratio for the Plan
exceeds 60%;
(2) this Plan is part of a required aggregation
group and not part of a permissive aggregation group, and the top-heavy
ratio for the required aggregation group exceeds 60%; or
(3) this Plan is part of a required aggregation
group and part of a permissive aggregation group, and the top-heavy
ratio for the permissive aggregation group exceeds 60%.
(h) "Top-heavy ratio" shall mean a fraction. The
numerator of the fraction is the sum of the account balances of all key
Employees under the Plan, or, if the Plan is a member of a required or
permissive aggregation group, under all defined contribution plans in
such required or permissive aggregation group (hereinafter the
"aggregation group"), plus the sum of the present values of accrued
benefits of all key Employees under all defined benefit plans in the
aggregation group, as of the determination date or, in the case of a
plan other than this Plan, the determination date under such other plan
which falls within the same calendar year as the determination date
under this Plan. The denominator of the fraction is a similar sum
determined for all Employees. For purposes of determining the fraction,
the numerator and denominator shall include any part of any account
balance or accrued benefit distributed in the determination period. With
respect to Plan Years beginning after December 31, 1984, if any
individual has not been credited with at least one Hour of Service with
the Employer or any Affiliate at any time during the determination
period, any account balance or accrued benefit of, or distribution to,
such individual shall not be taken into account.
For purposes of the preceding paragraph, the sum of account
balances and the present values of accrued benefits shall be determined
as of the most recent valuation date that falls within the twelve month
period ending on the determination date. The present values of accrued
benefits shall be calculated using the interest rate which would be used
(for the month preceding the month in which the calculation is made) by
the Pension Benefit Guaranty Corporation to value immediate annuities
upon a plan termination, and using the mortality assumptions set forth
in the plan. The same actuarial assumptions shall be used in the case
of all defined benefit plans which are being tested to determine the
top-heavy ratio of the aggregation group. The calculation of the top-
heavy ratio shall be made in accordance with Code section 416 and the
regulations thereunder.
Effective January l, 1987, solely for the purpose of
determining if the Plan, or any other plan included in a required
aggregation group of which this Plan is a part, is top-heavy, the
accrued benefit of an Employee other than a key Employee shall be
determined under (i) the method, if any, that uniformly applies for
accrual purposes under all plans maintained by the Employers and
Affiliates 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 accrual rate of Code section 411(b)(l)(c).
(i) "Valuation date" shall mean, with respect to this
Plan, the last day of the Plan Year.
(j) "Top-Heavy Compensation" shall mean Limitation
Compensation plus elective or salary deferral contributions to a plan
described in Code section 125 or 401(k).
12.2 Top-Heavy Rules. Notwithstanding any other provision of
the Plan, the following rules shall apply for any Plan Year in which the
Plan is determined to be a top-heavy plan:
(a) Minimum Benefit. Each Employee who is or who is
eligible to be an Active Participant in this Plan and who is a non-key
Employee and who also participates in any defined benefit plan in the
aggregation group shall accrue a minimum benefit under such defined
benefit plan. The amount of such minimum benefit, expressed in the form
of a single life annuity (with no ancillary benefits), payable at normal
retirement age, shall be equal to the product of (i) 2% of the
Participant's average monthly Limitation Compensation during his five
highest-paid consecutive calendar years of employment (not including any
year beginning after the last plan year in which such plan is a top-
heavy plan), multiplied by (ii) each of his first ten years of service
in which such plan is a top-heavy plan for any plan year ending during
such year of service.
If any Employee who is or who is eligible to be an Active
Participant in this Plan and who is a non-key Employee does not also
participate in any defined benefit plan in the aggregation group, he
shall receive a minimum benefit under this Plan. The amount of the
minimum benefit shall not be less than the lesser of (i) 3% of such
Participant's Limitation Compensation for the Plan Year, or (ii) the
largest percentage of Employer contributions, as a percentage of the
first $200,000, or effective January 1, 1994, $150,000 (as adjusted by
the Commissioner of Internal Revenue for increases in the cost of living
in accordance with Code section 401(a)(17)(B)) of the key Employee's
compensation, allocated on behalf of any key Employee under the Plan for
such Plan Year. An Employee who is or who is eligible to be an Active
Participant in this Plan and who is a non-key Employee shall not be
entitled to a minimum benefit for a Plan Year if he has separated from
service by the end of such Plan Year. However, a non-key Employee who
is or is eligible to be an Active Participant shall not fail to receive
a minimum benefit because (i) he has failed to complete Year of Service
in the Plan Year, (ii) his compensation is less than a stated amount, or
(iii) he has failed to make contributions under the Plan.
(b) Vesting. Each Participant shall become vested in
the assets in his account attributable to Employer contributions in
accordance with the following schedule:
When the Participant Has
Completed the Following The Vested Amount
Years of Vesting Service: Will Be:
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
If the Plan ceases to be top-heavy, the above schedule shall
continue to apply in determining the vested percentage of any
Participant who had at least five years of vesting service, or effective
for a Participant with an Hour of Service on or after January 1, 1989,
three years of vesting service, as of December 31 of the last Plan Year
of top-heaviness. For other Participants, the schedule shall apply only
to their benefits as of such December 31.
(c) Impact on Maximum Benefits. For any Plan Year in
which the Plan is a top-heavy plan, Section 5.4 shall be read by
substituting the number "1.00" for the number "1.25" wherever such
number appears therein.
ARTICLE XIII
PLAN ADMINISTRATOR
13.1 Appointment and Tenure. The Plan Administrator shall
consist of a committee of one (1) or more persons who shall serve at the
pleasure of the Board of Directors. Any committee member may resign by
delivering his written resignation to the Employer. Vacancies arising
by the death, resignation or removal of a committee member shall be
filled by the Board of Directors. If the Board fails to act, and in any
event, until the Board so acts, the remaining members of the committee
may appoint an interim committee member to fill any vacancy occurring on
the committee. If no person has been appointed to the committee, or if
no person remains on the committee, the Employer shall be deemed to be
the Plan Administrator.
13.2 Meetings; Majority Rule. Any and all acts of the Plan
Administrator taken at a meeting shall be by a majority of all members
of the committee. The Plan Administrator may act by vote taken in a
meeting (at which a majority of members shall constitute a quorum) if
all members of the committee have been given at least ten (10) days'
written notice of such meeting or have waived notice. The Plan
Administrator may also act by unanimous consent in writing without the
formality of convening a meeting.
13.3 Delegation. The Plan Administrator may, by written
majority decision, delegate to each or any one of its number, or to the
Secretary of it, authority to sign any documents on its behalf, or to
perform ministerial acts, but no person to whom such authority is
delegated shall perform any act involving the exercise of any discretion
without first obtaining the concurrence of a majority of the members of
the committee, even though he alone may sign any document required by
third parties.
The Plan Administrator shall elect one of its number to serve
as Chairperson. The Chairperson shall preside at all meetings of the
committee or shall delegate such responsibility to another committee
member. The committee shall elect one person to serve as Secretary to
the committee. All third parties may rely on any communication signed
by the Secretary, acting as such, as an official communication from the
Plan Administrator.
13.4 Authority and Responsibility of the Plan Administrator.
The Plan Administrator shall have the following duties and
responsibilities:
(a) to maintain and preserve records relating to Plan
Participants, former Participants, and their Beneficiaries;
(b) to prepare and furnish to Participants all
information and notices required under federal law or the provisions of
this Plan;
(c) to prepare and furnish to the Trustee sufficient
employee data and the amount of contributions received from all sources
so that the Trustee may maintain separate Accounts for Participants and
make required payments of benefits;
(d) to prepare and file or publish with the Secretary
of Labor, the Secretary of the Treasury, their delegates and all other
appropriate government officials all reports and other information
required under law to be so filed or published;
(e) to provide directions to the Trustee with respect
to the purchase of life insurance, methods of benefit payment,
valuations at dates other than Annual Valuation Dates and on all other
matters where called for in the Plan or requested by the Trustee;
(f) to construe and interpret the provisions of the
Plan, to correct defects therein and to supply omissions thereto;
(g) to decide all questions of eligibility, and
determine the amount, manner and time of payment of any benefits
hereunder;
(h) to engage assistants and professional advisers;
(i) to arrange for bonding, if required by law;
(j) to provide procedures for determination of claims
for benefits;
(k) to determine whether any domestic relations order
constitutes a Quadro and to take such action as the Plan Administrator
deems appropriate in light of such domestic relations order; and
(l) to retain records on elections and waivers by
Participants, their spouses and their Beneficiaries, all as further set
forth herein.
13.5 Reporting and Disclosure. The Plan Administrator shall
keep all individual and group records relating to Plan Participants, and
Beneficiaries, and all other records necessary for the proper operation
of the Plan. Such records shall be made available to the Employer and
to each Participant and Beneficiary for examination during business
hours except that a Participant or Beneficiary shall examine only such
records as pertain exclusively to the examining Participant or
Beneficiary and those records and documents relating to all Participants
generally. The Plan Administrator shall prepare and shall file as
required by law or regulation all reports, forms, documents and other
items required by the Employee Retirement Income Security Act of 1974,
the Code, and every other relevant statute, each as amended, and all
regulations thereunder. This provision shall not be construed as
imposing upon the Plan Administrator the responsibility or authority for
the preparation, preservation, publication or filing of any document
required to be prepared, preserved or filed by the Trustee or by any
other Named Fiduciary to whom such responsibilities are delegated by law
or by the Plan.
13.6 Construction of the Plan. The Plan Administrator shall
take such steps as are considered necessary and appropriate to remedy
any inequity that results from incorrect information received or
communicated in good faith or as the consequence of an administrative
error. The Plan Administrator shall interpret the Plan and shall
determine the questions arising in the administration, interpretation
and application of the Plan. It shall endeavor to act, whether by
general rules or by particular decisions, so as not to discriminate in
favor of, or against, any person and so as to treat all persons in
similar circumstances uniformly. The Plan Administrator shall correct
any defect, reconcile any inconsistency, or supply any omission with
respect to the Plan. All such corrections, reconciliations,
interpretations and completions of Plan provisions shall be final and
binding upon the parties.
13.7 Engagement of Assistants and Advisers. The Plan
Administrator shall have the right to hire such professional assistants
and consultants as it, in its sole discretion, deems necessary or
advisable, including, but not limited to: (a) investment managers and/or
advisers; (b) accountants; (c) actuaries; (d) attorneys; (e)
consultants; (f) clerical and office personnel; and (g) medical
practitioners.
The expenses incurred by the Plan Administrator in connection
with the operation of the Plan, including, but not limited to, the
expenses incurred by reason of the engagement of professional assistants
and consultants, shall be expenses of the Plan and shall be payable from
the Fund at the direction of the Plan Administrator. The Employer shall
have the option, but not the obligation, to pay any such expenses, in
whole or in part, and by so doing, to relieve the Fund from the
obligation of bearing such expenses. Payment of any such expenses by
the Employer on any occasion shall not bind the Employer to thereafter
pay any similar expenses.
13.8 Bonding. The Plan Administrator shall arrange for such
bonding as is required by law, but no bonding in excess of the amount
required by law shall be considered required by the Plan.
13.9 Compensation of the Plan Administrator. The Plan
Administrator shall serve without compensation for its services as such,
but all expenses of the Plan Administrator shall be paid or reimbursed
by the Employer, and if not so paid or reimbursed, shall be proper
charges to the Fund and shall be paid therefrom.
13.10 Indemnification of the Plan Administrator. Each member
of the committee constituting the Plan Administrator shall be
indemnified by the Employer against costs, expenses and liabilities
(other than amounts paid in settlement to which the Employer does not
consent) reasonably incurred by him in connection with any action to
which he may be a party by reason of his service as Plan Administrator
except in relation to matters as to which he shall be adjudged in such
action to be personally guilty of gross negligence or willful misconduct
in the performance of his duties. The foregoing right to
indemnification shall be in addition to such other rights as the
committee member may enjoy as a matter of law or by reason of insurance
coverage of any kind, but shall not extend to costs, expenses and/or
liabilities otherwise covered by insurance or that would be so covered
by any insurance then in force if such insurance contained a waiver of
subrogation. Rights granted hereunder shall be in addition to and not
in lieu of any rights to indemnification to which the committee member
may be entitled pursuant to the by-laws of the Employer. Service on the
committee as a Plan Administrator shall be deemed in partial fulfillment
of the committee member's function as an employee, officer and/or
director of the Employer, if he serves in that capacity as well as in
the role of committee member.
ARTICLE XIV
ALLOCATION AND DELEGATION OF AUTHORITY
14.1 Authority and Responsibilities of Employer. The
Employer, as Plan sponsor, shall serve as a "Named Fiduciary" having the
following (and only the following) authority and responsibility:
(a) to establish and communicate to the Trustee a
funding policy for the Plan;
(b) to appoint the Trustee and the Plan Administrator
and to monitor each of their performances;
(c) to appoint an Investment Manager (or to refrain
from such appointment), to monitor the performance of the Investment
Manager so appointed, and to terminate such appointment (more than one
Investment Manager may be appointed and in office at any time pursuant
hereto);
(d) to communicate such information to the Plan
Administrator and to the Trustee as each needs for proper performance of
its duties; and
(e) to provide channels and mechanisms through which
the Plan Administrator and/or the Trustee can communicate with
Participants and their Beneficiaries.
In addition, the Employer shall perform such duties as are
imposed by law or by regulation and shall serve as Plan Administrator in
the absence of an appointed Plan Administrator.
14.2 Authority and Responsibilities of the Plan
Administrator. The Plan Administrator shall have the authority and
responsibilities imposed by Article XIII hereof. With respect to the
said authority and responsibility, the Plan Administrator shall be a
"Named Fiduciary," and as such, shall have no authority and
responsibility other than as granted in the Plan, or as imposed by law.
14.3 Authority and Responsibilities of the Trustee. The
Trustee shall be the "Named Fiduciary" with respect to investment of the
Fund assets and shall have the powers and duties set forth in the Trust
Agreement.
14.4 Limitations on Obligations of Named Fiduciaries. No
Named Fiduciary shall have authority or responsibility to deal with
matters other than as delegated to it under this Plan, under the Trust
Agreement, or by operation of law. A Named Fiduciary shall not in any
event be liable for breach of fiduciary responsibility or obligation by
another fiduciary (including Named Fiduciaries) if the responsibility or
authority of the act or omission deemed to be a breach was not within
the scope of the said Named Fiduciary's authority or delegated
responsibility.
ARTICLE XV
CLAIMS PROCEDURES
15.1 Application for Benefits. Each Participant and/or
Beneficiary believing himself or herself eligible for benefits under the
Plan shall apply for such benefits by completing and filing with the
Plan Administrator an application for benefits on a form supplied by the
Plan Administrator. Before the date on which benefit payments commence,
each such application must be supported by such information and data as
the Plan Administrator deems relevant and appropriate. Evidence of age,
marital status (and, in the appropriate instances, health, death or
disability), and location of residence shall be required of all
applicants for benefits.
15.2 Appeals of Denied Claims for Benefits. In the event
that any claim for benefits is denied in whole or in part, the
Participant or Beneficiary whose claim has been so denied shall be
notified of such denial in writing by the Plan Administrator. The
notice advising of the denial shall specify the reason or reasons for
denial, make specific reference to pertinent Plan provisions, describe
any additional material or information necessary for the claimant to
perfect the claim (explaining why such material or information is
needed), and shall advise the Participant or Beneficiary, as the case
may be, of the procedure for the appeal of such denial. All appeals
shall be made by the following procedure:
(a) The Participant or Beneficiary whose claim has
been denied shall file with the Plan Administrator a notice of desire to
appeal the denial. Such notice shall be filed within sixty (60) days of
notification by the Plan Administrator of claim denial, shall be made in
writing, and shall set forth all of the facts upon which the appeal is
based. Appeals not timely filed shall be barred.
(b) The Plan Administrator shall, within thirty (30)
days of receipt of the Participant's or Beneficiary's notice of appeal,
establish a hearing date on which the Participant or Beneficiary may
make an oral presentation to the Named Appeals Fiduciary in support of
his appeal. The Participant or Beneficiary shall be given not less than
ten (10) days' notice of the date set for the hearing.
(c) The Named Appeals Fiduciary shall consider the
merits of the claimant's written and oral presentations, the merits of
any facts or evidence in support of the denial of benefits, and such
other facts and circumstances as the Named Appeals Fiduciary shall deem
relevant. If the claimant elects not to make an oral presentation, such
election shall not be deemed adverse to his interest, and the Named
Appeals Fiduciary shall proceed as set forth below as though an oral
presentation of the contents of the claimant's written presentation had
been made.
(d) The Named Appeals Fiduciary shall render a
determination upon the appealed claim which determination shall be
accompanied by a written statement as to the reasons therefor. The
determination so rendered shall be binding upon all parties.
15.3 Appointment of the Named Appeals Fiduciary. The Named
Appeals Fiduciary shall be the person or persons named as such by the
Board of Directors, or, if no such person or persons be named, then the
person or persons named by the Plan Administrator as the Named Appeals
Fiduciary. Named Appeals Fiduciaries may at any time be removed by the
Board of Directors, and any Named Appeals Fiduciary named by the Plan
Administrator may be removed by the Plan Committee. All such removals
may be with or without cause and shall be effective on the date stated
in the notice of removal. The Named Appeals Fiduciary shall be a "Named
Fiduciary" within the meaning of ERISA, and, unless appointed to other
fiduciary responsibilities, shall have no authority, responsibility, or
liability with respect to any matter other than the proper discharge of
the functions of the Named Appeals Fiduciary as set forth herein.
ARTICLE XVI
AMENDMENT AND TERMINATION
16.1 Amendment. The provisions of the Plan may be amended at
any time and from time to time by the Board of Directors. Each entity
constituting Employer hereby delegates to the Board of Directors the
full authority to act in its stead and on its behalf with respect to
amendment of the Plan and the Trust Agreement, provided, however, that:
(a) No amendment shall increase the duties or
liabilities of the Plan Administrator or of the Trustee without the
consent of that party.
(b) No amendment shall cause any reduction in the
amount of any Participant's Accrued Benefit. For purposes of this
paragraph (b), an amendment which has effect of (i) eliminating or
reducing an early retirement benefit on a retirement-type subsidy, or
(ii) eliminating an optional form of benefit, with respect to benefits
attributable before the amendment, shall be treated as reducing Accrued
Benefits except as otherwise provided in Code section 411(d)(6) and the
regulations thereunder.
(c) No amendment shall provide for the use of funds
or assets held to provide benefits under the Plan other than for the
benefit of Participants and their Beneficiaries or to meet the
administrative expenses of the Plan, except as may be specifically
authorized by statute or regulation.
(d) No such amendment shall change any vesting
schedule unless, in the case of an Employee who is a Participant on -
(1) the date the amendment is adopted; or
(2) the date the amendment is effective, if later;
the nonforfeitable percentage of such Participant's right to his
Accrued Benefit is not less than his percentage computed under the Plan
without regard to such amendment. Furthermore, no such amendment shall
otherwise change any vesting schedule unless each Participant having
three or more Years of Service is permitted to elect, in accordance with
Internal Revenue Code regulations, to have the nonforfeitable percentage
of his Accrued Benefit determined under the Plan without regard to such
amendment; provided, that no election shall be given to any Participant
whose nonforfeitable percentage under the Plan as amended cannot at any
time be less than such percentage determined without regard to such
amendment.
(e) The formula set forth in Section 6.2 for
allocating the Employer contribution described in Section 3.1(b), and
the formulae for determining the amounts of Deferral Contributions under
Section 3.1(a) and Employer Matching Contributions under Section 3.1(b),
may not be amended more than once in any six-month period, except to
comport with changes in the Code or ERISA and the regulations
thereunder.
Each amendment shall be approved by the Board of Directors by
resolution. Notwithstanding the foregoing, any amendment necessary to
initially qualify the Plan under Code section 401(a) may be made without
the further approval of the Board of Directors if signed by the proper
officers of the Employer.
16.2 Plan Termination.
(a) Right Reserved. While it is the Employer's
intention to continue the Plan indefinitely in operation, the right
is, nevertheless, reserved to terminate the Plan in whole or in part.
Whole or partial termination of the Plan shall result in full and
immediate vesting in each affected Participant of the entire amount
standing to his credit in his Account, and there shall not thereafter be
any forfeitures with respect to any such affected Participant for any
reason. Plan termination shall be effective as of the date specified by
resolution of the Board of Directors, subject, however, to the
provisions of Section 16.4 hereof. (b) Effect on
Retired Persons, Etc. Termination of the Plan shall have no effect upon
payment of installments and benefits to former Participants, their
Beneficiaries and their estates, whose benefit payments commenced prior
to Plan termination. The Trustee shall retain sufficient assets to
complete any such payments, and shall have the right, upon direction by
the Employer, to purchase annuity contracts to assure the completion of
such payments or to pay the value of the remaining payments in a lump-
sum distribution.
(c) Effect on Remaining Participants. The Employer
shall instruct the Trustee either (1) to continue to manage and
administer the assets of the Trust for the benefit of the Participants
and their Beneficiaries pursuant to the terms and provisions of the
Trust Agreement, or (2) to pay over to each Participant (and former
Participant) the value of his vested interest, and to thereupon dissolve
the Trust.
16.3 Complete Discontinuance of Employer Contributions.
While it is the Employer's intention to make substantial and recurrent
contributions to the Fund required pursuant to the provisions of the
Plan, the right is, nevertheless, reserved to at any time completely
discontinue Employer contributions. Such complete discontinuance shall
be established by resolution of the Board of Directors and shall have
the effect of a termination of the Plan, as set forth in Section 16.2,
except that the Trustee shall not have the authority to dissolve the
Fund except upon adoption of a further resolution by the Board of
Directors to the effect that the Plan is terminated and upon receipt
from the Employer of instructions to dissolve the Fund pursuant to
Section 16.2(c) hereof.
16.4 Suspension of Employer Contributions. The Employer
shall have the right at any time, and from time to time, to suspend
Employer contributions to the Fund pursuant to the Plan. Such
suspension shall have no effect on the operation of the Plan except as
set forth below:
(a) If the Board of Directors determines by
resolution that such suspension shall be permanent, a permanent
discontinuance of contributions will be deemed to have occurred as of
the date of such resolution or such earlier date as is therein
specified.
(b) If such suspension becomes a plan termination, a
complete discontinuance of contributions will be imputed.
In such case, the permanent discontinuance, with resultant full
vesting for all affected Participants, shall be deemed to have occurred
on the earlier of:
(1) the date specified by resolution of the
Board of Directors or established as a matter of equity by the Plan
Administrator, or
(2) the last day of the first Plan Year which
meets both of the following criteria: (A) no Employer contributions were
made for that, or for any subsequent Plan Year, and (B) there existed
for such Plan Year Net Income out of which Employer contributions could
have been made, and the existence of such Net Income was known to the
Board of Directors in time to make deductible contributions for such
Plan Year.
16.5 Mergers and Consolidations of Plans. In the event of
any merger or consolidation with, or transfer of assets or liabilities
to, any other plan, each Participant shall have a benefit in the
surviving or transferee plan (determined as if such plan were then
terminated immediately after such merger, consolidation or transfer)
that is equal to or greater than the benefit he would have been entitled
to receive immediately before such merger, consolidation or transfer in
the Plan in which he was then a Participant (had such Plan been
terminated at that time). For the purposes hereof, former Participants
and Beneficiaries shall be considered Participants.
16.6 Adoption by Affiliates.
(a) Adoption with Approval. Any corporation
affiliated in ownership or management with the Company (herein
called the "principal sponsor") may adopt this Plan with the consent of
the principal sponsor and subject to such conditions as the principal
sponsor amy impose.
(b) Procedure for Adoption. Any such adopting
corporation shall initiate its adoption of this Plan by delivery of a
certified copy of the resolutions of its board of directors adopting
this Plan to the Board of Directors of the principal sponsor. Upon the
consent by said principal sponsor of the adoption by the adopting
corporation, and the delivery to the Trustee of written evidence of the
principal sponsor's consent, the adoption of this Plan by the adopting
corporation shall be effective as of the date specified by the principal
sponsor.
(c) Effect of Adoption. Upon the adoption of this
Plan by any adopting corporation as heretofore provided, the adopting
corporation shall be an Employer hereunder in all respects. Each such
adopting corporation shall have the power to discontinue its
contributions to this Plan, to terminate this Plan as applied to it or
to amend the Plan as applied to it by establishing a successor plan.
Each adopting corporation, as a condition of continued
participation in this Plan, delegates to the principal sponsor the sole
power and authority to: (1) appoint or terminate an Investment Manager
as provided in Section 14.1(c), (2) appoint and remove the Plan
Administrator and determine the scope and limitation of the
Administrator's duties, (3) consent to the adoption of this Plan by
affiliated corporations and establish conditions and limitations with
regard to such adoption, (4) amend and terminate this Plan as provided
in Article XI, and (5) to appoint or remove a Trustee or Trustees.
Forfeitures shall be used as provided in Article III only by
the corporation by whom the Participant was employed at the time of the
occurrence of the event giving rise to the forfeiture.
ARTICLE XVII
NONALIENATION OF BENEFITS
17.1 Nonalienation of Benefits. No right or interest of any
Participant under the Plan or in his Account shall be assignable or
transferable, in whole or in part, either directly or by operation of
law or otherwise, including without limitation by execution, levy,
garnishment, attachment, pledge or in any other manner except in accord
with a qualified domestic relations order within the meaning of section
206(d)(3)(B) of ERISA and Code section 414(p).
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.1 No Contract of Employment. Neither the establishment of
the Plan, nor any modification thereof, nor the creation of any fund,
trust or account, nor the payment of any benefits shall be construed as
giving any Participant or Employee, or any person whomsoever, the right
to be retained in the service of the Employer, and all Participants and
other Employees shall remain subject to discharge to the same extent as
if the Plan had never been adopted.
18.2 Severability of Provisions. If any provision of the
Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and the
Plan shall be construed and enforced as if such provisions had not been
included.
18.3 Heirs, Assigns and Personal Representatives. The Plan
shall be binding upon the heirs, executors, administrators, successors
and assigns of the parties, including each Participant and Beneficiary,
present and future and all persons for whose benefit there exists any
Quadro with respect to any Participant (except that no successor to the
Employer shall be considered a Plan sponsor unless that successor adopts
the Plan).
18.4 Headings and Captions. The headings and captions herein
are provided for reference and convenience only, shall not be considered
part of the Plan, and shall not be employed in the construction of the
Plan.
18.5 Gender and Number. Except where otherwise clearly
indicated by context, the masculine and the neuter shall include the
feminine and the neuter, the singular shall include the plural, and
vice-versa.
18.6 Controlling Law. The Plan shall be construed and
enforced according to the laws of the Commonwealth of Pennsylvania to
the extent not preempted by federal law, which shall otherwise control.
18.7 Funding Policy. The Plan Administrator, in consultation
with the Employer, shall establish and communicate to the Trustee a
funding policy consistent with the objectives of the Plan and of the
corresponding Trust. Such policy will be in writing and shall have due
regard for the emerging liquidity needs of the Fund. Such funding
policy shall also state the general investment objectives of the Fund
and the philosophy upon which maintenance of the Plan is based.
18.8 Title to Assets. No Participant, Beneficiary or
Alternate Payee shall have any right to, or interest in, any assets of
the Fund upon termination of his employment or otherwise, except as
provided from time to time under the Plan, and then only to the extent
of the benefits payable under the Plan to such Participant, Beneficiary
or Alternate Payee out of the assets of the Fund. All payments of
benefits as provided for in the Plan shall be made from the assets of
the Fund, and neither the Employer nor any other person shall be liable
therefor in any manner.
18.9 Payments to Minors, Etc. Any benefit payable to or for
the benefit of a minor, an incompetent person or other person incapable
of receipting therefor shall be deemed paid when paid to such person's
guardian or to the party providing or reasonably appearing to provide
for the care of such person, and such payment shall fully discharge the
Trustee, the Plan Administrator, the Employer and all other parties with
respect thereto.
18.10 Reliance on Data and Consents. The Employer, the
Trustee,
the Plan Administrator, all fiduciaries with respect to the Plan, and
all other persons or entities associated with the operation of the Plan,
the management of its assets, and the provision of benefits thereunder,
may reasonably rely on the truth, accuracy and completeness of all data
provided by the Participant, his Beneficiaries, and his Alternate
Payees, including, without limitation, data with respect to age, health
and marital status. Furthermore, the Employer, the Trustee, the Plan
Administrator and all fiduciaries with respect to the Plan may
reasonably rely on all consents, elections and designations filed with
the Plan or those associated with the operation of the Plan and its
corresponding Trust by any Participant, the spouse of any Participant,
any Beneficiary of any Participant, any Alternate Payee, or the
representatives of any such persons without duty to inquire into the
genuineness of any such consent, election or designation. None of the
aforementioned persons or entities associated with the operation of the
Plan, its assets and the benefits provided under the Plan shall have any
duty to inquire into any such data, and all may rely on such data being
current to the date of reference, it being the duty of the Participants,
spouses of Participants, Beneficiaries and Alternate Payees to advise
the appropriate parties of any change in such data.
18.11 Lost Payees. A benefit shall be deemed forfeited if
the Plan Administrator is unable to locate a Participant, a spouse, a
Beneficiary or an Alternate Payee to whom payment is due, provided,
however, that such benefit shall be reinstated if a claim is made by the
proper payee for the forfeited benefit.
18.12 Counterparts. The Plan instrument and amendments
thereto may be executed in several counterparts, each of which shall be
deemed an original. As to the Plan instrument and as to the instruments
of amendment thereto, the counterparts of the respective instruments
shall be considered a single instrument, which may be sufficiently
evidenced by one counterpart. Further, each amendment to the Plan shall
be deemed to have all counterpart Plan instruments, and, if applicable,
all counterparts of prior amendments.
IN WITNESS WHEREOF, and as evidence of the adoption of this
amendment and restatement of the Plan, the Employer has caused the same
to be executed by its duly authorized officers, effective as of January
1, 1989, and its corporate seal to be affixed this day of
December, 1994.
SAFEGUARD SCIENTIFICS, INC
Attest:
____________________________ By:________________________
Secretary President
(CORPORATE SEAL)
APPENDIX A
(See Section 1.18)
None
APPENDIX B
(See Section 3.1(b))
Locations at which
matching percentage is 75%
1. Effective January 1, 1989:
a. Norelkote, Inc. (until its merger into
Safeguard Scientifics, Inc. on November 30, 1990)
(all locations)
b. Pioneer Metal Finishing, a division of
Safeguard Scientifics, Inc.
(all locations)
2. Effective January 1, 1992: All locations