COGNIZANT CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective as of November 1, 1996
COGNIZANT CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective as of November 1, 1996
INTRODUCTION
Effective as of November 1, 1996, the Cognizant Corporation Supplemental
Executive Retirement Plan (the "Plan") is established to provide a means of
ensuring the payment of a competitive level of retirement income and disability
and survivor benefits, and thereby attract, retain and motivate selected
executives of Cognizant Corporation and its affiliated employers.
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SECTION 1--DEFINITIONS
1.1 "Actuarial Equivalent Value": shall mean a benefit of equivalent value
computed on the basis of the 1983 Group Annuity Mortality Table and
interest equal to the yield on 30-year Treasury Bonds as of the last
business day of the Plan Year prior to the year in which the relevant
calculation occurs.
1.2 "Affiliated Employer": shall mean the Company and any other affiliated
entity.
1.3 "Average Final Compensation": means a Member's average annual
Compensation during the five consecutive 12-month periods in the last
ten consecutive 12-month periods of his or her Credited Service (or
during the total number of consecutive 12-month periods if fewer than
five), immediately prior to the Member's termination of or removal from
participation under this Plan, affording the highest such Average Final
Compensation. If actual monthly Compensation for any month during the
120-month computational period is unavailable, Compensation for such
month shall be determined by dividing the Member's annual rate of base
pay in the month preceding such unavailable month by 12.
1.4 "Basic Disability Plan": shall mean as to any Member the long-term
disability plan of the Company or an Affiliated Employer pursuant to
which long-term disability benefits are payable to such Member.
1.5 "Basic Disability Plan Benefit": shall mean the amount of benefits
payable to a Member from the Basic Disability Plan.
1.6 "Basic Plan": shall mean as to any Member or Vested Former Member the
defined benefit pension plan of the Company or an Affiliated Employer
intended to meet the requirements of Code Section 401(a) pursuant to
which retirement benefits are payable to such Member or Vested Former
Member or to the Surviving Spouse or designated beneficiary of a
deceased Member or Vested Former Member.
1.7 "Basic Plan Benefit": shall mean the amount of benefits payable from the
Basic Plan to a Member or Vested Former Member.
1.8 "Board": shall mean the Board of Directors of Cognizant Corporation,
except that any action authorized to be
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taken by the Board hereunder may also be taken by a duly authorized
committee of the Board or its duly authorized delegees.
1.9 "Change in Control":
(a) any "Person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of
the Company, becomes the "Beneficial Owner" (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities;
(b) during any period of 24 months (not including any period prior to
the Effective Date) individuals who at the beginning of such period
constitute the Board, and any new director (other than (i) a
director nominated by a Person who has entered into an agreement
with the Company to effect a transaction described in Sections
1.9(a), (c), or (d) hereof, (ii) a director nominated by any Person
(including the Company) who publicly announces an intention to take
or to consider taking actions (including, but not limited to, an
actual or threatened proxy contest) which if consummated would
constitute a Change in Control or (iii) a director nominated by any
Person who is the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company's securities) whose election by the
Board or nomination for election by the Company's stockholders was
approved in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof;
(c) the stockholders of the Company approve any transaction or series of
transactions under which the Company is merged or consolidated with
any other company, other than a merger or consolidation (i) which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than 66-2/3% of the combined voting
power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation,
and (ii)
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after which no "Person," holds 20% or more of the combined voting
power of the then outstanding securities of the Company or such
surviving entity; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
1.10 "Code": shall mean the Internal Revenue Code of 1986, as amended from
time to time.
1.11 "Committee": shall mean the Executive Compensation and Benefits
Committee of the Board, except that any action authorized to be taken by
the Committee hereunder may also be taken by another duly authorized
committee or duly authorized delegees.
1.12 "Company": shall mean Cognizant Corporation.
1.13 "Compensation": shall mean base salary, annual bonuses, commissions,
overtime and shift pay, in each case prior to reductions for pre-tax
contributions made to a plan or salary reduction contributions to a plan
or salary reduction contributions to a plan excludable from income under
Code Section 125 of the Code. Compensation excludes, however, severance
pay (including, without limitation to, salary continuation under the
Company's Career Transition Plan), special stay-on bonuses, long-term
bonuses, retirement income, change-in-control payments, contingent
payments, income derived from stock options, stock appreciation rights
and other equity based compensation and other forms of special
remuneration.
1.14 "Covered Earnings": shall mean a Member's Compensation in the 12 months
immediately preceding the onset of the Member's Disability.
1.15 "Deferred Vested Benefit": shall mean the benefits described in Section
3.2(b) hereof.
1.16 "Disability" or "Disabled": shall mean disability or disabled for
purposes of the Basic Disability Plan.
1.17 "Disability Benefits": shall mean the benefits provided as described in
Section 4.1(b) hereof.
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1.18 "Effective Date": shall mean November 1, 1996.
1.19 "Former Member": shall mean (i) a Member whose employment with the
Company or an Affiliated Employer terminates before he or she has
completed five or more years of Service, or (ii) a Member who was
removed from the Plan, in accordance with Section 2.2 hereof, before he
or she has completed five or more years of Service.
1.20 "Lump Sum Election": shall mean an election to receive all or portion of
the benefits payable hereunder in a lump sum pursuant to Section 3.4
hereof.
1.21 "Member": shall mean an employee of the Company or an Affiliated
Employer who becomes a participant in the Plan pursuant to Section 2.
1.22 "Other Disability Income": shall mean (i) the disability insurance
benefit that the Member is entitled to receive under the Federal Social
Security Act while he or she is receiving the Basic Disability Plan
Benefit and (ii) the disability income payable to a Member from any
supplemental executive disability plan of the Company or any Affiliated
Employer or from any other contract, agreement or other arrangement with
the Company or an Affiliated Employer (excluding any Basic Disability
Plan).
1.23 "Other Retirement Income": shall mean:
(a) the Social Security retirement benefit that the Member or Former
Member is entitled to receive under the Federal Social Security Act,
assuming that for years prior to the Member's employment with the
Company and for years following the Member's termination of
employment with the Company until the Member attains age 62, the
Member earned compensation so as to accrue the maximum Social
Security benefits, and
(b) the retirement income payable to a Member or Vested Former Member
from any "excess benefit plan" as that term is defined in Section
3(36) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), any plan described in Section 201(2), of ERISA
and any other contract, agreement or other arrangement, in any case,
maintained or entered into with the Company or an Affiliated
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Employer (excluding any Basic Plan and any defined contribution plan
intended to meet the requirements of Code Section 401(a)).
1.24 "Plan": shall mean the Cognizant Corporation Supplemental Executive
Retirement Plan, as embodied herein, and any amendments thereto.
1.25 "Predecessor to this Plan": shall mean the Supplemental Executive
Benefit Plan of The Dun & Bradstreet Corporation, as amended effective
December 21, 1994.
1.26 "Retirement": shall mean the termination of a Member's or Vested Former
Member's employment with the Company or an Affiliated Employer other
than by reason of death or Disability (i) after reaching age 55 and
completing ten years of Credited Service, or (ii) immediately following
the cessation of the payment of Disability Benefits under the Plan to
such Member or Vested Former Member while he or she is Disabled.
1.27 "Retirement Benefits": shall mean the benefits described in Section
3.1(b) hereof.
1.28 "Service": shall mean a Member's service defined as Vesting Service in
the Basic Plan, which is taken into account for vesting purposes
thereunder (including any such service prior to the date such individual
becomes a Member but not including any such service after participation
hereunder terminates), except that it will also include service while
the Member is receiving Disability Benefits under this Plan.
Notwithstanding the foregoing, (i) if a Member was employed by a company
acquired by the Company or an Affiliated Employer after the Effective
Date, such Member's service with that company prior to the date of
acquisition will not be taken into account hereunder and (ii) upon
commencement of participation hereunder in accordance with Section 2.1
hereof, the CEO (as defined in such section) may limit any service
otherwise to be taken into account hereunder with respect to periods
prior to the date of participation in the Plan.
1.29 "Surviving Spouse": shall mean the spouse of a deceased Member or Vested
Former Member to whom such Member or Vested Former Member is married
under applicable state law immediately preceding such Member or Vested
Former Member's death.
1.30 "Surviving Spouse's Benefits": shall mean the benefits described in
Section 5 hereof
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1.31 "Vested Former Member": shall mean (i) a Member whose employment with
the Company or an Affiliated Employer terminates on or after the date
on which he or she has completed five or more years of Service, or (ii)
a Member who was removed from the Plan, in accordance with Section 2.2
hereof, on or after the date on which he or she has completed five or
more years of Service.
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SECTION 2--PARTICIPATION
2.1 Commencement of Participation. The Chief Executive Officer ("CEO") of
the Company and such other key executives of the Corporation and its
Affiliated Employers as are designated by the CEO in writing and
approved by the Committee shall participate in the Plan as of a date
determined by the CEO.
2.2 Termination of Participation. A Member's participation in the Plan shall
terminate upon termination of his or her employment with the Company or
any Affiliated Employer. Prior to termination of employment, a Member
may be removed, upon written notice by the CEO as approved by the
Committee, from further participation in the Plan. As of the date of
termination or removal, no further benefits shall accrue to such
individual hereunder.
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SECTION 3--AMOUNT AND FORM OF BENEFITS
3.1 Retirement Benefits.
(a) Eligibility. Upon the Retirement of a Member or Vested Former Member
from the Company or an Affiliated Employer, he or she shall be
entitled to the Retirement Benefit described in Section 3.1(b)
hereof.
(b) Amount. The Retirement Benefit of a Member or Vested Former Member
shall be an annual benefit equal to the difference between (i) and
the sum of (ii), (iii), (iv) and (v) where:
(i) is 50% of his or her Average Final Compensation, plus 2% of
such Average Final Compensation multiplied by the number of
his or her years of Service over ten but not in excess of 15
years;
(ii) is the Basic Plan Benefit payable to the Member or Vested
Former Member as of the date of his or her Retirement
expressed in the form of an annual life annuity, or, if the
Basic Plan Benefit becomes payable after the Member's or
Vested Former Member's Retirement, the Actuarial Equivalent
Value as of such date of the Basic Plan Benefit that would
become payable in the form of an annual life annuity starting
on the earliest possible date under the terms of the Basic
Plan;
(iii) is the Other Retirement Income payable to the Member or Vested
Former Member as of the date of his or her Retirement
expressed in the form of an annual life annuity, or, if the
Other Retirement Income becomes payable after the Member's or
Vested Former Member's Retirement, the Actuarial Equivalent
Value as of such date of the Other Retirement Income that
would become payable in the form of an annual life annuity
starting on the earliest possible date under the terms of the
appropriate retirement arrangement; and
(iv) is the annual benefit payable to the Member or Vested Former
Member under the terms of the
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Predecessor to this Plan as of the date of his or her
Retirement, expressed in the form of an annual life annuity.
3.2 Deferred Vested Benefit.
(a) Eligibility. Each Member and Vested Former Member who has completed
five or more years of Service and whose employment with the Company
or an Affiliated Employer terminates prior to Retirement, other than
by reason of death or Disability, shall be entitled to the Deferred
Vested Benefit described in Section 3.2(b) hereof.
(b) Amount. The Deferred Vested Benefit of a Member or Vested Former
Member who terminates with the Company's consent shall be an annual
benefit equal to the difference between (i) and the sum of (ii),
(iii), and (iv), where:
(i) is 25% of his or her Average Final Compensation, plus 5% of
such Average Final Compensation multiplied by the number of
his or her years of Service over five (5) but not in excess of
ten (10), plus 2% of such Average Final Compensation
multiplied by the number of his or her years of Service over
ten but not in excess of 15;
(ii) is the Basic Plan Benefit payable to the Member or Vested
Former Member as of the date his or her Deferred Vested
Benefit commences expressed in the form of an annual life
annuity, or, if the Basic Plan Benefit becomes payable after
the Member's or Vested Former Member's Deferred Vested Benefit
commences, the Actuarial Equivalent Value as of such date of
the Basic Plan Benefit that would become payable in the form
of an annual life annuity starting on the earliest possible
date under the terms of the Basic Plan;
(iii) is the Other Retirement Income payable to the Member or Vested
Former Member as of the date his or her Deferred Vested
Benefit commences expressed in the form of an annual life
annuity, or, if the Other Retirement Income becomes payable
after the Member's or Vested Former Member's Deferred Vested
Benefit commences, the Actuarial Equivalent Value as of such
date of the Other Retirement Income that would become payable
in the form of an annual
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life annuity starting on the earliest possible date under the
terms of the appropriate retirement arrangement; and
(iv) is the annual benefit payable to the Member or Vested Former
Member under the terms of the Predecessor to this Plan as of
the date his or her Deferred Vested Benefit commences,
expressed in the form of an annual life annuity.
3.3 Form of Payment.
(a) Except as provided under Section 3.3(b) or Section 3.3(c), the
Retirement Benefit or Deferred Vested Benefit under this Plan, as
the case may be, shall be payable in monthly installments in the
form of a straight life annuity and without regard to any optional
form of benefits elected under the Basic Plan. Payments shall
commence on the first day of the calendar month coinciding with or
next following (i) the Member's or Vested Former Member's
Retirement, in the case of Retirement Benefits or (ii) the later of
the date the Member or Vested Former Member attains age 55 or
terminates employment, in the case of Deferred Vested Benefits.
(b) If a Member or Vested Former Member has made a Lump Sum Election
pursuant to Section 3.4 and such Lump Sum Election becomes effective
(i) prior to the date of such Member's or Vested Former Member's
Retirement or termination of employment with the Company or an
Affiliated Employer and (ii) while he or she was still a Member, the
Retirement Benefit, or Deferred Vested Benefit under this Plan, as
the case may be, shall be payable in the form or combination of
forms of payment elected pursuant to such Lump Sum Election under
Section 3.4 and without regard to any optional form of benefits
elected under the Basic Plan. Any portion of the benefits hereunder
payable in a lump sum shall be paid within 60 days following (i) the
Member's or Vested Former Member's Retirement, in the case of
Retirement Benefits or (ii) the later of the date the Member or
Vested Former Member attains age 55 or terminates employment, in the
case of Deferred Vested Benefits.
(c) Notwithstanding any Lump Sum Election made (or not made) under
Section 3.3, if the lump sum value, determined in the same manner
as provided under Section 3.4 (a), of a Member's or Vested Former
Member's Retirement, or Deferred Vested Benefit is $10,000 or less
at the time such benefit is payable
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under this Plan, such benefit shall be payable as a lump sum.
3.4 Lump Sum Election.
(a) A Member or Vested Former Member may elect to receive all, none, or
a specified portion, as provided in Section 3.4(c), of his or her
Retirement Benefit or Deferred Vested Benefit under the Plan as a
lump sum and to receive any balance of such benefit in the form of
an annuity; provided that any such Lump Sum Election shall be
effective for purposes of this Plan only if the conditions of
Section 3.4(b) are satisfied. A Member or Vested Former Member may
elect a payment form different than the payment form previously
elected by him or her under this Section 3.4(a) by filing a revised
election form; provided that any such new election shall be
effective only if the conditions of Section 3.4(b) are satisfied
with respect to such new election. Any prior Lump Sum Election made
by a Member that has satisfied the conditions of Section 3.4(b)
shall remain effective for purposes of the Plan until such Member
has made a new election satisfying the conditions of Section 3.4(b).
The amount of any portion of a Member's or a Vested Former Member's
Retirement Benefit or Deferred Vested Benefit payable as a lump sum
under this Section 3.4 shall equal the present value of such portion
of the benefit, and such present value shall be determined (i) based
on a discount rate equal to 85% of the average of the 15-year
non-callable U.S. Treasury bond yields as of the close of business
on the last business day of each of the three months immediately
preceding the date the annuity value is determined and (ii) using
the 1983 Group Annuity Mortality Table.
(b) A Member's Election under Section 3.4(a) becomes effective only if
all of the following conditions are satisfied: (i) such Member
remains in the employment of the Company or an Affiliated Employer,
as the
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case may be, for the full 12 calendar months immediately following
the date of such election (the "Election Date"), except in the case
of death or Disability of such Member (in which case Section 3.4(d)
shall apply) and (ii) such Member complies with the administrative
procedures set forth by the Committee with respect to the making of
a Lump Sum Election.
(c) A Member making an election under Section 3.4(a) may specify the
portion of his Retirement, or Deferred Vested Benefit under the Plan
to be received in a lump sum as follows: 0%, 25%, 50%, 75%, or 100%.
(d) In the event a Member who has made an Election pursuant to Section
3.4(a) dies or becomes Disabled while employed by the Company or an
Affiliated Employer and such death or total and permanent Disability
occurs during the 12 calendar-month period immediately following the
Election Date, the condition under Section 3.4(b)(i) shall be
deemed satisfied with respect to such Member.
3.5 Cessation of Benefits. Subject to Section 3.8 hereof, no benefits or no
further benefits, as the case may be, shall be paid to a Member, Vested
Former Member or Surviving Spouse if the Member or Vested Former Member
has:
(a) become a stockholder (unless such stock is listed on a national
securities exchange or traded on a daily basis in the
over-the-counter market and the Member's or Vested Former Member's
ownership interest is not in excess of 2% of the company whose
shares are being purchased), employee, officer, director or
consultant of or to a Company, or a member or an employee of or a
consultant to a partnership or any other business or firm, which
competes with any of the businesses owned or operated by the
Company, or if the Member or Vested Former Member becomes associated
with a company, partnership or individual which company, partnership
or individual acts as a consultant to businesses in competition with
the Company, such Member or Vested Former Member provided services
to such competing businesses, whether or not, in any of the
foregoing cases, such Member or Vested Former Member accepts any
form of compensation from such competing entity or consultant; or
(b) been discharged from employment with the Company or any Affiliated
Employer for "cause." "Cause" means (i) willful malfeasance or
willful misconduct by the Member or Former Vested Member in
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connection with his or her employment, (ii) continuing failure to
perform such duties as are requested by any employee to whom the
Member or Vested Former Member reports or the Board or (iii) the
commission by a Member or Vested Former Member of (I) any felony or
(II) any misdemeanor involving moral turpitude.
3.6 Notification of Cessation of Benefits. Subject to Section 3.8 hereof, in
any case described in Section 3.5, the Member, Vested Former Member or
Surviving Spouse shall be given prior written notice that no benefits or
no further benefits, as the case may be, will be paid to such Member,
Vested Former Member or Surviving Spouse. Such written notice shall
specify the particular act(s), or failures to act, and the basis on
which the decision to cease paying his or her benefits has been made.
3.7 Repayment of Benefits Paid as Lump Sum.
(a) Subject to Section 3.8 hereof, a Member or Vested Former Member
who receives in a lump sum any portion of his or her Retirement
Benefit or Deferred Vested Benefit pursuant to a Lump Sum
Election, shall receive such lump sum portion of such Retirement
Benefit or Deferred Vested Benefit subject to the condition that
if such Member or Vested Former Member engages in any of the acts
described in Section 3.5(a), then such Member or Vested Former
Member shall within 60 days after written notice by the Company
repay to the Company the amount described in Section 3.7(b).
(b) The amount described in this section shall equal the amount of the
Member's or Vested Former Member's lump sum benefit paid under
this Plan to which such Member or Vested Former Member would not
have been entitled, if such lump sum benefit had instead been
payable in the form of an annuity under this Plan and such annuity
payments were subject to the provisions of Section 3.5.
3.8 Change in Control. Notwithstanding anything to the contrary contained
herein, the provisions of Sections 3.5 through 3.7 shall be of no force
or effect from and after a Change in Control with respect to any Member
and Vested Former Member who is employed by the Company or an Affiliated
Employer as of such Change in Control.
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SECTION 4--DISABILITY BENEFITS
4.1 (a) Eligibility. A Member who is enrolled for the maximum disability
insurance coverage available under the Basic Disability Plan and who
has become Disabled shall be entitled to the Disability Benefit
described in Section 4.1(b).
(b) Amount. The Disability Benefit of a Member entitled thereto shall be
an annual benefit payable in monthly installments under this Plan
during the same period as disability benefits are actually paid by
the Basic Disability Plan, in an amount equal to 60% of the Member's
Covered Earnings, offset by the Member's (i) Basic Disability Plan
Benefit, (ii) Basic Plan Benefit, if the Basic Disability Plan
Benefit does not already include an offset for such Basic Plan
Benefit, and (iii) Other Disability Income.
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SECTION 5--SURVIVING SPOUSE'S BENEFITS
5.1 Death Prior to Benefit Commencement. Upon the death of a Member or
Vested Former Member, prior to the commencement of his or her Retirement
Benefit or Deferred Vested Benefit hereunder, his or her Surviving
Spouse will be entitled to a Surviving Spouse's Benefit under this Plan
equal to 50% of the Retirement or Deferred Vested Benefit that would
have been provided from the Plan had the Member or Vested Member retired
from or terminated employment with the Company or an Affiliated Employer
on the date of death.
5.2 Death On or After Benefit Commencement. Upon the death of a Vested
Former Member while he or she is receiving Retirement or Deferred Vested
Benefits, his or her Surviving Spouse shall receive a Surviving Spouse's
Benefit equal to 50% of the Benefit he or she was receiving at the time
of death. Notwithstanding the foregoing, no benefit shall be payable
under this Section 5.2 to the extent a Retirement Benefit or Deferred
Vested Benefit was previously paid to a Member or Vested Former Member
in the form of a lump sum.
5.3 Commencement of Surviving Spouse's Benefit. Except as provided in
Section 5.4, the Surviving Spouse's Benefit provided under Sections 5.1
or 5.2 will be payable monthly, commencing on the first day of the month
coincident with or next following the date of the Member's or Vested
Former Member's death, or, if the Member or Vested Former Member had not
attained age 55, on the date such Member or Vested Former Member would
have attained age 55 had he or she lived. Such benefits shall continue
until the first day of the month in which the Surviving Spouse dies.
5.4 Lump Sum Payment.
(a) If a Member or a Vested Former Member made an Election under Section
3.4 but such Member or Vested Former Member died prior to such lump
sum payment, the Surviving Spouse's Benefit payable under Section
5.1 hereof will be payable in the form or combination of forms of
payment so elected by such Member or Vested Former Member pursuant
to such Lump Sum Election. The amount of any lump sum payment under
the Plan, shall be determined using the actuarial assumptions set
forth in Section 3.4(a).
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(b) If the lump sum value, determined in the same manner as provided
under Section 3.4(a), of a Surviving Spouse's Benefit is $10,000 or
less at the time such Surviving Spouse's Benefit is payable under
this Plan, such benefit shall be payable as a lump sum.
(c) Any Surviving Spouse's Benefit which is payable as a lump sum shall
be paid, within 60 days after the date when any portion of such
benefit payable in annuity form commences or would commence if any
portion of such Surviving Spouse's Benefit were payable as an
annuity as set forth in Section 5.3.
5.5 Reduction. Notwithstanding the foregoing provisions of Section 5, the
amount of a Surviving Spouse's Benefit shall be reduced by one
percentage point for each year (where a half year or more is treated as
a full year) in excess of ten years that the age of the Member or Vested
Former Member exceeds the age of the Surviving Spouse.
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SECTION 6--COMMITTEES
6.1 Duties and Authority. The Committee shall be responsible for the
administration of the Plan and may delegate to any management committee,
employee, director or agent its responsibility to perform any act
hereunder, including, without limitation, those matters involving the
exercise of discretion, provided that such delegation shall be subject
to revocation at any time at the Committee's discretion. The Committee
shall have the authority to determine all questions arising in
connection with the Plan, to interpret the provisions of the Plan and to
construe all of its terms, to adopt, amend, and rescind rules and
regulations for the administration of the Plan, and generally to conduct
and administer the Plan and to make all determinations in connection
with the Plan as may be necessary or advisable. All such actions of the
Committee shall be conclusive and binding upon all Members, Former
Members, Vested Former Members and Surviving Spouses.
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SECTION 7--MISCELLANEOUS
7.1 Amendment; Termination. The Committee may, in its sole discretion,
terminate, suspend or amend this Plan at any time or from time to time,
in whole or in part; provided, however, that no termination, suspension
or amendment of the Plan may adversely affect (a) a Member's or Vested
Former Member's benefit under the Plan to which he or she is entitled
hereunder or, (b) a Vested Former Member's right or the right of a
Surviving Spouse to receive or to continue to receive a benefit in
accordance with the Plan, such benefits or rights as in effect on the
date immediately preceding the date of such termination, suspension or
amendment.
7.2 No Employment Rights. Nothing contained herein will confer upon any
Member, Former Member or Vested Former Member the right to be retained
in the service of the Company or any Affiliated Employee, nor will it
interfere with the right of the Company or any Affiliated Employer to
discharge or otherwise deal with Members, Former Members or Vested
Former Members with respect to matters of employment.
7.3 Payout in Discretion of the Committee. Notwithstanding anything herein
to the contrary, at any time following the termination of service of the
Member or Vested Former Member, the Committee may authorize, under
uniform rules applicable to all Members, Vested Former Members and
Surviving Spouses under the Plan, a lump sum distribution of a Member's,
Vested Former Member's and/or Surviving Spouse's Retirement Benefit or
Surviving Spouse's Benefit under the Plan in an amount equal to the
present value of such Retirement Benefit or Surviving Spouse's Benefit,
using the actuarial assumptions then in use for funding purposes under
the Cognizant Company Retirement Plan, in full satisfaction of all
present and future Plan liability with respect to such Member, Vested
Former Member and/or Surviving Spouse, if the amount of such present
value is less than $250,000. Such lump sum distribution may be made
without the consent of the Member, Vested Former Member or Surviving
Spouse.
7.4 Unfunded Status. Members and Vested Former Members shall have the status
of general unsecured creditors of the Company, and this Plan constitutes
a mere promise by the Company to make benefit payments at the time or
times required hereunder. It is the intention of the Company that this
Plan be unfunded for tax purposes and for purposes of Title I of ERISA
and any trust created by the Company and
19
any assets held by such trust to assist the Company in meeting its
obligations under the Plan shall meet the requirements necessary to
retain such unfunded status.
7.5 Arbitration. Any dispute or controversy arising under or in connection
with the Plan shall be settled exclusively by arbitration in New York,
New York in accordance with the rules of the American Arbitration
Association in effect at the time of such arbitration. The Company shall
pay the entire costs of any proceeding brought by a Member, Vested
Former Member, Former Member, or Surviving Spouse hereunder, including
the fees and expenses of counsel and pension experts engaged by such
person, and such expenses shall be reimbursed promptly upon evidence
that such expenses have been incurred without awaiting the outcome of
the proceedings; provided, however, that such costs and expenses shall
be repaid to the Company by the recipient of same if it is finally
determined by the arbitrators that the position taken by such person was
entirely without merit. Failure of such person to prevail in any dispute
or controversy shall not be the sole basis on which such determination
shall be made.
7.6 No Alienation. A Member's or Vested Former Member's right to benefit
payments under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors or such Member or
Vested Former Member or his or her Surviving Spouse.
7.7 Withholding. The Company may withhold from any benefit under the Plan an
amount sufficient to satisfy its tax withholding obligations.
7.8 Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and
to be performed in such state to the extent not preempted by federal
law.
20
In witness whereof, the Company has caused this document to be executed by its
officer effective November 1, 1996.
Cognizant Corporation
By:____________________________________
Its:___________________________________
Date:__________________________________
21
TABLE OF CONTENTS
PAGE
----
INTRODUCTION...................................................................1
SECTION 1--DEFINITIONS.........................................................2
1.1 "Actuarial Equivalent Value"..........................................2
1.2 "Affiliated Employer".................................................2
1.3 "Average Final Compensation"..........................................2
1.4 "Basic Disability Plan"...............................................2
1.5 "Basic Disability Plan Benefit".......................................2
1.6 "Basic Plan"..........................................................3
1.7 "Basic Plan Benefit"..................................................3
1.8 "Board"...............................................................3
1.9 "Change in Control"...................................................3
1.10 "Code"................................................................4
1.11 "Committee"...........................................................4
1.12 "Company".............................................................5
1.13 "Compensation"........................................................5
1.14 "Covered Earnings"....................................................5
1.15 "Deferred Vested Benefit".............................................5
1.16 "Disability" or "Disabled"............................................5
1.17 "Disability Benefits".................................................5
1.18 "Effective Date"......................................................5
1.19 "Former Member".......................................................6
1.20 "Lump Sum Election"...................................................6
1.21 "Member"..............................................................6
1.22 "Other Disability Income".............................................6
1.23 "Other Retirement Income".............................................6
1.24 "Plan"................................................................7
1.25 "Predecessor to this Plan"............................................7
1.26 "Retirement"..........................................................7
1.27 "Retirement Benefits".................................................7
1.28 "Service".............................................................7
1.29 "Surviving Spouse"....................................................8
1.30 "Surviving Spouse's Benefits".........................................8
1.31 "Vested Former Member"................................................8
SECTION 2--PARTICIPATION.......................................................9
2.1 Commencement of Participation.........................................9
2.2 Termination of Participation..........................................9
SECTION 3--AMOUNT AND FORM OF BENEFITS........................................10
3.1 Retirement Benefits..................................................10
3.2 Deferred Vested Benefit..............................................11
3.3 Form of Payment......................................................12
3.4 Lump Sum Election....................................................13
3.5 Cessation of Benefits................................................14
3.6 Notification of Cessation of Benefits................................15
3.7 Repayment of Benefits Paid as Lump Sum...............................16
3.8 Change in Control....................................................16
SECTION 4--DISABILITY BENEFITS................................................17
4.1 (a) Eligibility.....................................................17
(b) Amount..........................................................17
SECTION 5--SURVIVING SPOUSE'S BENEFITS........................................18
5.1 Death Prior to Benefit Commencement..................................18
5.2 Death On or After Benefit Commencement...............................18
5.3 Commencement of Surviving Spouse's Benefit...........................18
5.4 Lump Sum Payment.....................................................18
5.5 Reduction............................................................19
SECTION 6--COMMITTEE..........................................................20
6.1 Duties and Authority.................................................20
SECTION 7--MISCELLANEOUS......................................................21
7.1 Amendment; Termination...............................................21
7.2 No Employment Rights.................................................21
7.3 Payout in Discretion of the Committee................................21
7.4 Unfunded Status......................................................22
7.5 Arbitration..........................................................22
7.6 No Alienation........................................................22
7.7 Withholding..........................................................22
7.8 Governing Law........................................................23