UNISYS CORPORATION
SAVINGS PLAN
Amended and Restated
Effective January 1, 2002
UNISYS CORPORATION
SAVINGS PLAN
Amended And Restated
Effective January 1, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I HISTORY AND SCOPE..........................................................................1
ARTICLE II DEFINITIONS................................................................................2
ARTICLE III ELIGIBILITY FOR PARTICIPATION.............................................................12
ARTICLE IV CONTRIBUTIONS.............................................................................13
ARTICLE V LIMITATIONS ON EMPLOYER CONTRIBUTIONS.....................................................18
ARTICLE VI INVESTMENT AND VALUATION OF ACCOUNTS......................................................23
ARTICLE VII VESTING...................................................................................26
ARTICLE VIII AMOUNT OF BENEFITS........................................................................28
ARTICLE IX PAYMENT AND FORM OF BENEFITS..............................................................28
ARTICLE X WITHDRAWALS AND LOANS.....................................................................32
ARTICLE XI SPECIAL PROVISIONS FOR TOP-HEAVY PLANS....................................................36
ARTICLE XII PLAN ADMINISTRATION.......................................................................36
ARTICLE XIII AMENDMENT AND TERMINATION.................................................................40
ARTICLE XIV MISCELLANEOUS.............................................................................42
-i-
UNISYS CORPORATION
SAVINGS PLAN
Amended and Restated
Effective January 1, 2002
ARTICLE I
HISTORY AND SCOPE
1.01 HISTORY. Unisys Corporation (formerly, Burroughs
Corporation), adopted the Burroughs Plan, effective July 1, 1984. Unisys
Corporation is successor by merger to Sperry Corporation which, prior to such
merger, established and maintained the Sperry Plan. Effective April 1, 1988, the
Burroughs Plan and Sperry Plan were merged to form the Plan. The Plan is
maintained for the benefit of eligible employees of Unisys Corporation and the
eligible employees of its subsidiaries that adopt the Plan.
Effective October 1, 1990, the Company's CTIP was merged into the Plan.Effective
November 30, 1992, the RIPII was merged into the Plan. Effective March 31, 1996,
the RIP was merged into the Plan.
This Plan was amended and restated, effective January 1, 1998, to bring the Plan
into compliance with the Uniformed Services Employment and Reemployment Act of
1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997, the IRS Restructuring and Reform Act of 1998, the Internal Revenue Service
Restructuring and Reform Act of 1998, the Community Renewal Tax Relief Act of
2000, and all other applicable law as in effect on the effective date of that
amendment and restatement of the Plan.
The Plan is hereby amended and restated herein, effective January 1, 2002, to
bring the Plan into compliance with he Economic Growth and Tax Relief
Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002,
and certain final regulations issued by the Department of Labor and the
Department of Treasury.
1.02 EFFECTIVE DATES. The effective date of the Plan is April 1,
1988, the original effective date of the Plan. This amendment and restatement of
the Plan is effective January 1, 2002.
1.03 RIGHTS AFFECTED. Unless provided to the contrary herein, the
provisions of the Plan shall apply to Employees who are credited with an Hour of
Service after December 31, 2001.
1
1.04 QUALIFICATION UNDER THE INTERNAL REVENUE CODE. It is intended
that the Plan be a qualified plan within the meaning of section 401(a) of the
Code and that the Trust be exempt from federal income taxation under the
provisions of section 501(a) of the Code.
1.05 DOCUMENTS. The Plan consists of the Plan document as set
forth herein and any subsequent amendments thereto.
ARTICLE II
DEFINITIONS
The following words and phrases as used herein have the following
meanings unless a different meaning is plainly required by the context:
2.01 "ACCOUNT" means a Participant's After-Tax Account, ESOP
Account, GPEP Account, Regular Account, Tax Deferred Account, Tax Deductible
Contribution Account, Qualified Nonelective ESOP Contribution Account, Qualified
Nonelective Non-ESOP Contribution Account, or Rollover Account.
2.02 "ACTUAL CONTRIBUTION PERCENTAGE" means, with respect to a
Plan Year, the ratio (expressed as a percentage) of the sum of the amount of (a)
Matching Contributions, (b) After-Tax Contributions, (c) Qualified Nonelective
ESOP Contributions, and (d) Tax Deferred Contributions recharacterized as
After-Tax Contributions, made on behalf of the Participant for the Plan Year to
the Participant's Testing Compensation for the Plan Year.
2.03 "ACTUAL DEFERRAL PERCENTAGE" means, with respect to a Plan
Year, the ratio (expressed as a percentage) of the amount of Tax Deferred
Contributions made pursuant to Section 4.01(a) and Qualified Nonelective
Non-ESOP Contributions made on behalf of the Participant for the Plan Year to
the Participant's Testing Compensation for the Plan Year.
2.04 "ADMINISTRATIVE COMMITTEE" means the committee appointed in
accordance with Section 12.02 which is responsible for the day-to-day
administration of the Plan.
2.05 "AFFILIATE" means any entity included with the Employer in
(a) a controlled group of employers or trades or businesses within the meaning
of section 414(b) or 414(c) of the Code; (b) an affiliated service group within
the meaning of section 414(m) of the Code; or (c) a group required to be
aggregated pursuant to the regulations under section 414(o) of the Code;
provided that any such employer shall be included within the term "Affiliate"
only while a member of a group including the Employer. For purposes of Section
5.05, whether a member of a controlled group is an Affiliate shall be determined
under section 1563(a) of the Code (as incorporated through application of
sections 414(b) and (c) of the Code) by substituting "50%" for "80%" everywhere
it appears in section 1563(a) of the Code.
2
2.06 "AFTER-TAX ACCOUNT" means a Participant's account to which
are credited After-Tax Contributions, if any, and earnings and losses thereon.
2.07 "AFTER-TAX CONTRIBUTION" means a contribution made by (a) an
Employee who is employed by an Employer domiciled in Puerto Rico in accordance
with a Participant's salary reduction agreement pursuant to Section 4.02(b), (b)
made by an Employee with respect to a Plan Year beginning before January 1,
1989.
2.08 "AGGREGATION GROUP" means the group of qualified plans
sponsored by the Employer or by an Affiliate formed by including in such group
(a) all such plans in which a Key Employee participates in the Plan Year
containing the Determination Date, or any of the four preceding Plan Years,
including any frozen or terminated plan that was maintained within the five-year
period ending on the Determination Date, (b) all such plans which enable any
plan described in clause (a) to meet the requirements of either section
401(a)(4) of the Code or section 410 of the Code, and (c) such other qualified
plans sponsored by the Employer or an Affiliate as the Employer elects to
include in such group, as long as the group, including those plans electively
included, continues to meet the requirements of sections 401(a)(4) and 410 of
the Code.
2.09 "ASSOCIATED COMPANY" means any entity that is not a member of
a controlled group of corporations within the meaning of section 1563(a) of the
Code (as incorporated through application of sections 414(b) and (c) of the
Code), of which the Company is the common parent, but which would be a member of
such controlled group of corporations if "50%" were substituted for "80%"
everywhere it appears in section 1563(a) of the Code.
2.10 "BENEFICIARY" means (a) the Participant's Spouse, or (b) the
person, persons or trust designated by the Participant, with the consent of his
Spouse, if any, as direct or contingent beneficiary. In order to be valid, the
Spouse's consent to a Beneficiary other than or in addition to the Participant's
Spouse, must be in writing, must consent to the specific Beneficiary designated,
must acknowledge the effect of such consent, and must be witnessed by a Plan
representative or notary public. If the Participant has no Spouse and no
effective beneficiary designation, his Beneficiary shall be the first of the
following classes in which there is any person surviving the Participant: (a)
the Participant's children, (b) the Participant's parents, and (c) the
Participant's brothers and sisters. If none of the foregoing classes include a
person surviving the Participant, the Participant's Beneficiary shall be his
estate.
2.11 "BENEFIT COMMENCEMENT DATE" means the first day on which all
events have occurred that entitle a Participant to the benefit.
2.12 "BOARD" means the Board of Directors of the Company.
2.13 "BURROUGHS PLAN" means the Burroughs Employees Savings Thrift
Plan, as in effect on March 30, 1988.
2.14 "CODE" means the Internal Revenue Code of 1986, as amended.
3
2.15 "COMPANY" means Unisys Corporation.
2.16 "COMPENSATION" means a Participant's wages or salary paid by
an Employer to an Employee, including amounts deducted in accordance with
sections 125 or 401(k) of the Code, overtime pay, shift differentials, overseas
hardship and war risk premiums, temporary promotional supplements, payments for
accrued but unused vacation, commissions paid under the terms of a written
ongoing sales commission plan, and paid bonuses paid under the terms of a
written ongoing bonus plan approved as such by the Administrative Committee, but
excluding any amounts received by an Employee while he is not a Participant, and
any other deferred compensation. A Participant's Compensation shall not exceed
the dollar limitation in effect under section 401(a)(17) of the Code with
respect to any Plan Year. Effective January 1, 2001, "Compensation" shall
include amounts deducted from a Participant's wages or salary in accordance with
section 132(f)(4) of the Code. Notwithstanding the foregoing, any amounts
deducted on a pre-tax basis for group health coverage because the Participant is
unable to certify that he or she has other health coverage, so long as the
Employer does not otherwise request or collect information regarding the
Participant's other health coverage as part of the enrollment process for the
Employer's health plan, shall be included as Compensation.
2.17 "COVERED EMPLOYEE" means any Employee other than:
(a) any Employee who is a member of a collective bargaining unit,
unless such collective bargaining agreement provides for the Employee's
participation in the Plan;
(b) any Employee who is a nonresident alien of the United States
(including the District of Columbia, Puerto Rico, or the Virgin Islands) and who
does not receive any United States (including the District of Columbia, Puerto
Rico or the Virgin Islands) source income from the Employer;
(c) an Employee who is (1) employed by an overseas subsidiary of
an Employer, (2) on temporary assignment to the Employer, and (3) not eligible
for participation in a defined benefit plan maintained by the Employer; and
(d) any Employee whose terms of employment with the Employer are
covered under the Contract Service Act, the Davis-Bacon Act, or a similar
government contracting statute, unless the terms of the statue or government
contract expressly provide for participation in this Plan.
(e) any individual who is not an employee of the Employer but who
provides services as described in section 414(n)(2) of the Code; and
(f) any individual who is classified as an independent contractor
by the Employer or any persons who are not treated by the Employer as employees
for purposes of withholding federal employment taxes, regardless of (1) how such
individual is classified by the Internal Revenue Service, other governmental
agency,
4
government or court, or (2) a contrary governmental or judicial determination
relating to such employment status or tax withholding.
2.18 "CTIP" means the Convergent Tax Investment Plan, as in effect
on September 30, 1990.
2.19 "DETERMINATION DATE" means the last day of the preceding Plan
Year.
2.20 "DISTRIBUTEE" means a Participant, the surviving Spouse of a
deceased Participant, or a Participant's Spouse or former Spouse who is an
alternate payee under a Qualified Domestic Relations Order.
2.21 "EMPLOYEE" means (a) an individual who is employed by the
Employer, (b) when required by context for purposes of crediting Hours of
Service under Section 2.29, a former Employee, and (c) a leased employee as
described under section 414(n)(2) of the Code.
2.22 "EMPLOYER" means the Company and any Affiliate listed on
Appendix A.
2.23 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.24 "ESOP ACCOUNT" means a Participant's account to which are
credited Matching Contributions made to the Plan after March 31, 1989, and
earnings and losses thereon.
2.25 "ESOP PORTION OF THE PLAN" means the portion of the Plan that
is both a stock bonus plan and an employee stock ownership plan intended to
qualify under sections 401(a) and 4975(e)(7) of the Code, the assets of which
are held in the ESOP Account and Qualified Nonelective ESOP Accounts of
Participants and invested primarily in shares of Unisys Stock that meet the
requirements of section 404(l) of the Code.
2.26 "FUND" means the assets and all earnings, appreciation and
additions thereto, less losses, depreciation and any proper payments made by the
Trustee, held under the Trust by the Trustee for the exclusive benefit of
Participants and their Beneficiaries.
2.27 "GPEP ACCOUNT" means a Participant's account to which are
credited GPEP contributions made with respect to Plan Years beginning before
January 1, 1998, if any, and earnings and losses thereon.
2.28 "HIGHLY COMPENSATED EMPLOYEE" means an Employee who either:
(a) was a 5% owner (as defined in section 416(i)(1) of the Code)
at any time during the Plan Year for which Highly Compensated Employees are
being identified or the preceding Plan Year; or
5
(b) with respect to the Plan Year preceding the calendar year for
which Highly Compensated Employees are being identified both (1) had Testing
Compensation in excess of the dollar amount under section 414(q)(1)(B)(i) of the
Code, as in effect for such Plan Year, and (2) was in the top 20% of all
Employees when ranked on the basis of Testing Compensation.
2.29 "HOUR OF SERVICE" means each hour for which an Employee is
directly or indirectly paid or entitled to payment by the Company, an Affiliate,
or an Associated Company for the performance of Service.
2.30 "INVESTMENT COMMITTEE" means the Pension Investment Review
Committee appointed pursuant to Section 12.02 which is responsible for the
control and management of the Investment Funds.
2.31 "INVESTMENT FUND" means a fund selected by the Investment
Committee in which the Fund or any portion thereof may be invested.
2.32 "INVESTMENT MANAGER" means the individual or entity, if any,
selected by the Trustee responsible for the investment of all or a portion of
the Fund.
2.33 "KEY EMPLOYEE" means a person employed or formerly employed
by the Employer or an Affiliate who, during the Plan Year or during any of the
preceding four Plan Years, was any of the following:
(a) an officer of the Employer having annual Testing Compensation
of more than $130,000, or such other amount as may be in effect under section
415(1)(A)(i) of the Code;
(b) a 5% owner of the Employer.
(c) a person who is both an employee whose annual Testing
Compensation exceeds $150,000 and who is a 1% owner of the Employer.
The Beneficiary of any deceased Participant who was a Key Employee shall be
considered a Key Employee for the same period as the deceased Participant would
have been so considered.
2.34 "KEY EMPLOYEE RATIO" means the ratio (expressed as a
percentage) for any Plan Year, calculated as of the Determination Date with
respect to such Plan Year, determined by dividing the amount described in
subsection (a) hereof by the amount described in subsection (b) hereof, after
deduction from both such amounts of the amount described in subsection (c)
hereof.
(a) The amount described in this subsection (a) is the sum of (1)
the aggregate of the present value of all accrued benefits of Key Employees
under all qualified defined benefit plans included in the Aggregation Group, (2)
the aggregate of the balances in all of the accounts standing to the credit of
Key Employees under all qualified defined contribution plans included in the
Aggregation Group, and (3) the
6
aggregate amount distributed from all plans in such Aggregation Group to or on
behalf of any Key Employee during the one-year period ending on the
Determination Date.
(b) The amount described in this subsection (b) is the sum of (1)
the aggregate of the present value of all accrued benefits of all Participants
under all qualified defined benefit plans included in the Aggregation Group, (2)
the aggregate of the balances in all of the accounts standing to the credit of
all Participants under all qualified defined contribution plans included in the
Aggregation Group, and (3) the aggregate amount distributed from all plans in
such Aggregation Group to or on behalf of any Participant during the one-year
period ending on the Determination Date.
(c) The amount described in this subsection (c) is the sum of (1)
all rollover contributions (or similar transfers) to plans included in the
Aggregation Group initiated by an Employee from a plan sponsored by an employer
which is not the Employer or an Affiliate, (2) any amount that would have been
included under subsection (a) or (b) hereof with respect to any person who has
not rendered service to any Employer at any time during the one-year period
ending on the Determination Date, and (3) any amount that is included in
subsection (b) hereof for, on behalf of, or on account of, a person who is a
Non-Key Employee as to the Plan Year of reference but who was a Key Employee as
to any earlier Plan Year.
The present value of accrued benefits under any defined benefit plan shall be
determined under the method used for accrual purposes for all plans maintained
by the Employer and all Affiliates if a single method is used by all such plans,
or otherwise, the slowest accrual method permitted under section 411(b)(1)(C) of
the Code.
2.35 "MATCHING CONTRIBUTION" means a contribution made by an
Employer in accordance with Section 4.03.
2.36 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee other
than a Highly Compensated Employee.
2.37 "NON-KEY EMPLOYEE" means any Employee or former Employee who
is not a Key Employee as to that Plan Year, or a Beneficiary of a deceased
Participant who was a Non-Key Employee.
2.38 "NORMAL RETIREMENT AGE" means age 65.
2.39 "NOTICE PERIOD" means the period beginning 90 days before and
ending 30 days before the Benefit Commencement Date. The 30-day minimum may be
waived by a Distributee; provided, however, that with respect to a Participant
scheduled to receive his benefit in the form of a Qualified Joint and Survivor
Annuity, the minimum Notice Period may not be less than seven days before the
date distribution is made.
2.40 "PARTICIPANT" means a Covered Employee who has met the
eligibility requirements of Section 3.01. An individual who is a Participant but
who ceases to be a Covered Employee shall nonetheless remain a Participant for
purposes of benefit payments only, until all amounts due him under the Plan have
been paid.
7
2.41 "PERIOD OF SEVERANCE" means a period beginning on the date of
an Employee's Severance from Service and ending on the date on which the
Employee again performs an Hour of Service.
Notwithstanding the foregoing, solely for the purpose of determining whether a
Period of Severance has occurred, in the case of an absence from employment by
reason of the pregnancy of the Employee, the birth of a child of the Employee,
the placement of a child with the Employee in connection with the adoption of
the child by the Employee or the caring for the child for a period beginning
immediately following that birth or placement, the period between the first and
second anniversary of the first day of such absence from employment shall
neither be construed as a Period of Severance nor a period of Service. In order
for an absence to be considered to be for the reasons described in the foregoing
sentence, an Employee shall provide the Administrative Committee or its designee
with information regarding the reasons for the absence and the length of the
absence. Nothing in this Section 2.41 shall be construed as expanding or
amending any maternity or paternity leave policy of an Employer or Affiliate.
2.42 "PLAN" means the profit sharing plan, known as the "Unisys
Savings Plan" set forth in this document, which includes a stock bonus plan and
employee stock ownership plan intended to qualify under sections 401(a) and
4975(e)(7) of the Code, and the related trust agreement pursuant to which the
Trust is maintained.
2.43 "PLAN YEAR" means the calendar year.
2.44 "PRIOR PLAN" means the Burroughs Plan, Sperry Plan, CTIP, RIP
or RIPII.
2.45 "QUALIFIED DOMESTIC RELATIONS ORDER" means a judgment, decree
or order that relates to a Participant's benefit under the Plan and meets the
requirements of section 414(p) of the Code.
2.46 "QUALIFIED JOINT AND SURVIVOR ANNUITY" means an annuity for
the life of the Participant with a survivor annuity for the life of the
Participant's Spouse equal to 50% of the monthly amount payable for the
Participant's life.
2.47 "QUALIFIED NONELECTIVE ESOP ACCOUNT" means a Participant's
account to which are credited Qualified Nonelective ESOP Contributions, if any,
and earnings and losses thereon.
2.48 "QUALIFIED NONELECTIVE ESOP CONTRIBUTION" means a
contribution made by the Employer pursuant to Section 4.05 for purposes of
satisfying the requirements of Section 5.03.
2.49 "QUALIFIED NONELECTIVE NON-ESOP ACCOUNT" means a
Participant's Account to which are credited Qualified Nonelective Non-ESOP
Contributions, if any, and earnings and losses thereon.
8
2.50 "QUALIFIED NONELECTIVE NON-ESOP CONTRIBUTION" means a
contribution made by the Employer pursuant to Section 4.05 for purposes of
satisfying the requirements of Section 5.02.
2.51 "REGULAR ACCOUNT" means a Participant's Account to which are
credited (a) Matching Contributions made before April 1, 1989, (b) matching
contributions made to a Prior Plan (other than CTIP) before April 1, 1989, (c)
matching contributions made to the CTIP before October 1, 1990, (d) employee
contributions made to the Sperry Plan, and (e) earnings and losses.
2.52 "RIP" means the Unisys Retirement Investment Plan, as in
effect on March 31, 1996.
2.53 "RIPII" means the Retirement Investment Plan II, as in effect
on November 30, 1996.
2.54 "ROLLOVER ACCOUNT" means a Participant's account to which are
credited the (a) Participant's Rollover Contributions, if any, (b) amounts, if
any, transferred to a Participant's Account from a Prior Plan which were derived
from such Participant's rollover contributions to such Prior Plan, and (c)
earnings and losses thereon.
2.55 "ROLLOVER CONTRIBUTION" means a contribution made by a
Participant pursuant to Section 4.06.
2.56 "SERVICE" means the periods determined in accordance with the
following provisions of this Section 2.55. An Employee's total period of Service
shall be determined from the first date the Employee performs an Hour of Service
until the date of his Separation from Service.
(a) Service shall include:
(1) periods of active employment with the Employer, an
Affiliate, or an Associated Company and with any entity that is a predecessor to
the Employer;
(2) periods during which no active duties are performed
by the Employee for the Company, an Affiliate, an Associated Company, or any
entity that is a predecessor to the Employer because the Employee is:
(A) absent from work because of occupational
injury or disease incurred in the course of employment with the Company, an
Affiliate, or an Associated Company and on account of such absence receives
workers' compensation;
(B) in the service of the Armed Forces of the
United States during a period with respect to which an Employer, Affiliate, or
an Associated Company is required to give reemployment rights by law, provided
the Employee returns to work with the Company, Affiliate, or an Associated
Company immediately after the termination of such military service;
9
(C) absent from work and receives short-term
disability benefits under an Employer's short-term disability plan or other plan
of the Company, an Affiliate, or an Associated Company providing similar
benefits;
(D) for vesting purposes under the Plan, service
performed for the Company, an Affiliate, or an Associated Company in a capacity
described under subsection (a), (b), (c), (d), or (e) of Section 2.17, prior to
the Employee becoming a Covered Employee;
(b) Service shall exclude service prior to the date on which a
business is acquired, merged, consolidated, or otherwise absorbed by the
Company, an Affiliate, or an Associated Company, or prior to the date the assets
of a business are acquired by the Company, an Affiliate, or an Associated
Company, unless otherwise provided herein or authorized by the Company.
(c) Notwithstanding any provision of the Plan to the contrary, if
a Participant was a participant in a Prior Plan as of the date of the Prior
Plan's merger with and into the Plan, such Participant's Service immediately
after such merger shall be the greater of:
(1) the Participant's service under the terms of the
Prior Plan immediately prior to the date of such Prior Plan's merger with and
into the Plan; or
(2) the Participant's Service determined under the Plan
without regard to this subsection (c).
(d) To the extent that a prior period of employment with
Burroughs Corporation, Memorex Corporation, System Development Corporation,
Sperry Corporation, or any Affiliate of the foregoing corporations was not
credited under the terms of a Prior Plan, such period shall be counted as
Service under the Plan; provided that the Plan has, or is furnished with,
evidence of such prior period of employment.
(e) If an Employee separates from Service but returns to
employment with the Employer before incurring a one-year Period of Severance,
the period between the date he separated from Service and his date of
reemployment by the Company, an Affiliate, or an Associated Company.
2.57 "SEVERANCE FROM SERVICE" means the earliest of (a) the date a
person quits, retires or is discharged from Service with the Company and all
Affiliates and Associated Companies, (b) the date a person dies, or (c) the date
following a one-year period during which a person is absent from Service for any
other reason. Notwithstanding the foregoing, however, the Severance from Service
of a Participant who incurs a Total Disability shall be the earlier of (a) the
date the Participant quits, retires, is discharged or dies, or (b) the date his
Total Disability ends, provided he does not return to active Service as of such
date.
2.58 "SPERRY PLAN" means the Sperry Retirement Program - Part B,
as in effect on March 30, 1988.
10
2.59 "SPOUSE" means the person to whom a Participant is married;
provided, however, that a former spouse shall be treated as the Spouse or
surviving Spouse to the extent provided under a Qualified Domestic Relations
Order.
2.60 "TAX DEDUCTIBLE CONTRIBUTION ACCOUNT" means a Participant's
account to which are credited tax deductible contributions, if any, made to the
Plan before April 1, 1989, and earnings and losses thereon.
2.61 "TAX DEFERRED ACCOUNT" means a Participant's account to which
are credited (a) Tax-Deferred Contributions, if any, (b) tax deferred
contributions made under a Prior Plan and transferred to the Plan, (c) basic
member contributions, if any, made under the Sperry Plan and transferred to the
Plan, and (d) earnings and losses thereon.
2.62 "TAX DEFERRED CONTRIBUTION" means a contribution made by an
Employer in accordance with a Participant's salary reduction agreement pursuant
to Section 4.01(a).
2.63 "TERMINATION OF EMPLOYMENT" means an Employee's cessation of
employment with the Company and all Affiliates and Associated Companies as a
result of quitting, retirement, discharge, release or placement on extended
lay-off with no expectation of recall, or failure to return to active employment
upon expiration of an approved leave of absence.
2.64 "TESTING COMPENSATION" means the total of a Participant's
wages, salary and other amounts paid by an Employer and reported in IRS Form
W-2, and any amounts deferred under section 402(g)(3) or 125 of the Code and,
effective January 1, 2001, section 132(f)(4) of the Code; provided, however, for
purposes of Sections 5.02, 5.03 and 5.04, the Administrative Committee may elect
to exclude amounts deducted in accordance with sections 125, 132(f)(4), and
402(e)(3) of the Code as Testing Compensation. Notwithstanding the foregoing,
any amounts deducted on a pre-tax basis for group health coverage because the
Participant is unable to certify that he or she has other health coverage, so
long as the Employer does not otherwise request or collect information regarding
the Participant's other health coverage as part of the enrollment process for
the Employer's health plan, shall be included as Testing Compensation.
2.65 "TOTAL DISABILITY" means a condition resulting from injury or
sickness that, in the judgement of the Administrative Committee or its designee:
(a) with regard to the first 24-months of an absence from Service
due to a condition resulting from the injury or sickness, constitutes a
condition likely to render the Participant unable to perform each of the
material duties of his regular occupation; and
(b) with regard to the period of an absence from Service due to a
condition resulting from the injury or sickness after the initial 24-months of
such absence, constitutes a condition which renders the Participant unable to
perform the material duties of any occupation for which he is reasonably fitted
by training, education or experience.
11
Notwithstanding the foregoing, however, in no event shall a Participant be
deemed to have incurred a Total Disability until he has exhausted all benefits
available under his Employer's short-term disability plan or other plan
providing short term disability benefits. For purposes of this Section 2.64, a
determination of a Participant's disabled status under the Unisys Long-Term
Disability Plan or similar long-term disability plan sponsored by an Employer
shall be deemed a conclusive and binding determination of the Participant's
Total Disability status under the Plan.
2.66 "TRUST" means the legal entity created by the trust agreement
between the Employer and the Trustee, fixing the rights and liabilities with
respect to controlling and managing the Fund for the purposes of the Plan.
2.67 "TRUSTEE" means the party or parties appointed by the Board
of Directors as trustee of the Trust and named as trustee pursuant to the Trust
Agreement or any successors thereto.
2.68 "UNISYS STOCK" means Unisys Corporation common stock, par
value $0.01 per share.
2.69 "VALUATION DATE" means each day of each calendar year.
ARTICLE III
ELIGIBILITY FOR PARTICIPATION
3.01 ELIGIBILITY REQUIREMENT. An Employee shall be eligible to
become a Participant if he is a Covered Employee.
3.02 PARTICIPATION COMMENCEMENT DATE. Each Covered Employee who
was a Participant as of December 31, 2001, shall continue to be a Participant on
January 1, 2002, if he is then a Covered Employee. Each other Covered Employee
shall be a Participant on his first day of employment as a Covered Employee.
3.03 TIME OF PARTICIPATION-EXCLUDED EMPLOYEES. An Employee who is
ineligible to be a Participant because he is not a Covered Employee, shall
become a Participant as of the first day on which he becomes a Covered Employee.
A Participant shall cease to be an active Participant on any date on which he
ceases to be a Covered Employee; however, a Participant who ceases to be a
Covered Employee will remain a Participant for distribution purposes under the
Plan until such time as he no longer has a vested interest under the Plan.
12
ARTICLE IV
CONTRIBUTIONS
4.01 TAX DEFERRED CONTRIBUTIONS.
(a) (1) Subject to the limitations contained in Article V,
each Employer, other than an Employer domiciled in Puerto Rico, shall make a Tax
Deferred Contribution for the Plan Year to the Tax Deferred Account of each of
its Covered Employees who, with respect to such Plan Year is a Participant and
has filed a salary reduction notice with the Employer that provides for a
reduction in Compensation otherwise payable to the Participant by a designated
whole percentage that does not exceed the limit described in paragraph (2), and
a contribution of that amount by the Employer to the Participant's Tax Deferred
Account.
(2) The amount of the Tax Deferred Contribution made for
a Participant with respect to any Plan Year pursuant to this subsection (a)
shall be the amount specified in the salary reduction notice. The percentage
specified shall be a whole percentage of the Participant's Compensation not to
exceed (A) 20% with respect to a Non-Highly Compensated Employee, or (B) 18%
with respect to a Highly Compensated Employee. The Administrative Committee may,
in its discretion, increase or decrease the maximum permissible amount of Tax
Deferred Contributions at any time and from time to time as it deems
appropriate. Any salary reduction notice shall relate only to Compensation as
yet unearned when the notice is filed and may not be amended during the period
to which it pertains, except that it may be terminated as to amounts unearned at
the date of a Participant's Termination of Employment.
(b) Each Employer, other than an Employer domiciled in Puerto
Rico, shall make an additional Salary Deferral Contribution for the Plan Year to
the Tax Deferred Account of each of its Covered Employees who, with respect to
such Plan Year is a Participant, is age 50 or older as of the last day of the
Plan Year, and has elected, in accordance with procedures established by the
Administrative Committee and subject to any limitations imposed by the
Administrative Committee, to make an additional Salary Deferral Contribution in
an amount not to exceed $1,000 for the Plan Year (or such other amount as may be
applicable under section 414(v) of the Code), reduced by, to the extent required
by the Code and applicable Treasury regulations, any other elective deferrals
contributed on the Participant's behalf pursuant to section 414(v) of the Code
for the Plan Year; provided, however, that elective deferrals shall be treated
for all Plan purposes as contributed under subsection (a) above in lieu of this
subsection, unless the Participant is unable to make additional Salary Deferral
Contributions under subsection (a) above for the Plan Year due to limitations
imposed by the Plan or applicable federal law.
(c) Salary reduction notices pursuant to this Section 4.01 must
be made within the time prescribed by the Administrative Committee and shall
become effective in accordance with the rules and procedures established by the
Administrative Committee.
13
(d) Subject to, and in accordance with, the rules and procedures
established by the Administrative Committee, a Participant may elect to change,
discontinue, or resume the percentage of Compensation under his salary reduction
notice. All such elections shall become effective in accordance with the rules
and procedures established by the Administrative Committee.
4.02 AFTER-TAX CONTRIBUTIONS.
(a) A Participant may make After-Tax Contributions to the Plan by
filing a salary reduction notice authorizing the Employer to reduce the
after-tax Compensation otherwise payable to the Participant by a designated
whole percentage (up to the limit specified in subsection (b)), and deposit such
amounts into the Participant's After-Tax Contribution Account.
(b) The amount of the After-Tax Contribution made by a
Participant with respect to any Plan Year shall be the amount specified in the
salary reduction notice. The percentage specified shall be a whole percentage of
the Participant's Compensation not to exceed the following:
(1) with respect to any Participant who is not employed
by an Employer domiciled in Puerto Rico, 5%; and
(2) with respect to any Participant who is employed by an
Employer domiciled in Puerto Rico, (A) 20% with respect to a Non-Highly
Compensated Employee, or (B) 18% with respect to a Highly Compensated Employee.
Any salary reduction notice shall relate only to Compensation as yet unearned
when the notice is filed and may not be amended during the period to which it
pertains, except that it may be terminated as to amounts unearned at the date of
a Participant's Termination of Employment.
(c) Salary reduction notices pursuant to this Section 4.05 must
be made within the time prescribed by the Administrative Committee and shall
become effective in accordance with the rules and procedures established by the
Administrative Committee.
(d) Subject to, and in accordance with, the rules and procedures
established by the Administrative Committee, a Participant may elect to change,
discontinue, or resume the percentage of Compensation under his salary reduction
notice. All such elections shall become effective in accordance with the ruled
and procedures established by the Administrative Committee.
4.03 MATCHING CONTRIBUTIONS. Subject to the limitations in
Article V, each Employer shall make a Matching Contribution for each Plan Year
to the ESOP Account of each of its Covered Employees who, with respect to such
Plan Year, is a Participant and has filed a salary reduction notice in
accordance with Section 4.01. In addition, subject to the limitations in Article
V, each Employer domiciled in Puerto Rico shall make a Matching Contribution for
each Plan Year to the ESOP Account of each of its
14
Covered Employees who made After-Tax Contributions with respect to such Plan
Year. The amount of Matching Contributions for pay periods beginning on or after
July 1, 1998 shall be the amount determined in accordance with subsections (a)
and (b) below.
(a) Subject to the minimum set forth in subsection (b), the
amount of the Matching Contribution made in accordance with this Section 4.03
with respect to each pay period in the Plan Year shall be an amount equal to 50%
of the first 4% of Compensation deferred Contributed as a Tax Deferred
Contribution made pursuant to Section 4.01(a), (or, with respect to Participants
employed by an Employer domiciled in Puerto Rico, as an After-Tax Contribution);
provided, that the maximum Matching Contribution payable to a Participant shall
not equal more than 2% of such Participant's Compensation for the period.
(b) Notwithstanding anything in subsection (a) to the contrary:
(1) each Participant who was employed by an Employer at any
time during the period beginning July 1, 1998 and ending December 31, 1998 who
had Tax Deferred Contributions made on his behalf for the Plan Year ending
December 31, 1998 shall receive a minimum Matching Contribution for such Plan
Year in an amount equal to the lesser of:
(A) 1% of the Participant's Compensation not in
excess of $80,000 for the period July 1, 1998 through December 31, 1998; or
(B) 25% of the total of the Tax Deferred
Contributions made on behalf of the Participant for the Plan Year (regardless of
when the Tax Deferred Contributions were made during such Plan Year).
(2) each Participant who was employed by an Employer on
December 31 of a Plan Year beginning on or after January 1, 1999 and who had Tax
Deferred Contributions made on his behalf shall receive a minimum Matching
Contribution, in accordance with procedures adopted by the Administrative
Committee, in an amount, when added to the Matching Contributions made on behalf
of such Participant (before application of this paragraph), equal to the lesser
of:
(A) 2% of the Participant's Compensation not in
excess of the limit described in section 401(a)(17) of the Code as in effect
with respect to such Plan Year; or
(B) 50% of the total of the Tax Deferred
Contributions made on behalf of the Participant for the Plan Year.
4.04 GPEP CONTRIBUTIONS. No contributions may be made to an
individual's GPEP Account with respect to any Plan Year beginning on or after
January 1, 1998. Amounts, if any, allocated to a Participant's GPEP Account
prior to January 1, 1998 shall continue to be held in the GPEP Account until
distributed in accordance with the terms of the Plan.
15
4.05 QUALIFIED NONELECTIVE CONTRIBUTIONS. Subject to the
limitations described in Article V, each Employer shall make a Qualified
Nonelective Non-ESOP Contribution, a Qualified Nonelective ESOP Contribution, or
both in such amount, if any, as the Board shall determine. Qualified Nonelective
Non-ESOP Contributions made by an Employer shall be allocated to the Qualified
Nonelective Non-ESOP Account of its employees who are both Participants and
Non-Highly Compensated Employees. Qualified Nonelective ESOP Contributions made
by an Employer shall be allocated to the Qualified Nonelective ESOP Account of
its employees who are both Participants and Non-Highly Compensated Employees.
4.06 ROLLOVER CONTRIBUTIONS. With the approval of the
Administrative Committee, a Participant may contribute to a Rollover Account all
or a portion of the amount payable to the Participant as an eligible rollover
distribution from an eligible retirement plan (as defined under section
401(a)(31) of the Code). Any payment to the Plan pursuant to this Section 4.06
shall be made as a direct rollover that satisfies section 401(a)(31) of the Code
or shall be made to the Plan within 60 days after the Participant's receipt of
the distribution from the plan or individual retirement account in such manner
as may be approved by the Administrative Committee.
4.07 CONTRIBUTION ATTRIBUTABLE TO MILITARY SERVICE. If a
Participant returns to employment with the Employer following a period of
service in the Armed Forces of the United States for which an Employer is
required to give reemployment rights by law, the Employer contributions to the
Plan with respect to such period shall be as follows:
(a) During the period that begins on the date of the
Participant's return to employment and lasts for the lesser of (1) the product
of 3 multiplied by the applicable period of military service; or (2) five years,
the Participant may elect a Compensation reduction in return for the
corresponding Tax Deferred Contributions on his behalf, or After-Tax
Contributions, as applicable, that could have been made if the Participant had
continued to be employed and received Compensation during the applicable period
of military service.
(b) The Employer shall contribute to the Plan, on behalf of each
Participant who has been credited under subsection (a) with Tax Deferred
Contributions or After-Tax Contributions, Matching Contributions equal to the
amount of Matching Contribution that would have been required under Section 4.02
had such Tax Deferred or After-Tax Contributions, as applicable, been made
during the applicable period of military service.
A Participant who is entitled to a contribution pursuant to this Section 4.07
shall not be entitled to receive corresponding retroactive earnings attributable
to such contribution nor shall he be entitled to participate in the allocation
of any forfeiture that occurred during his period of military service. For
purposes of this Section 4.07, an Employee's Compensation for the applicable
period of military service shall be deemed to equal the amount of Compensation
the Employee would have received from the Employer during such period, based on
the rate of pay the Employee would have received from the Employer but for the
absence due to military service, or, if such rate of pay is not reasonably
certain, the Employee's average Compensation during the 12-month period
16
immediately before the qualified military service or, if shorter, the period of
employment immediately before the qualified military service. The limitations
under Sections 5.01 and 5.04 are applicable to contributions made pursuant to
this Section 4.07 for the Plan Year to which the contributions relate. The
limitations under Sections 5.02 and 5.03 shall not apply to contributions made
pursuant to subsections (a) or (b) of this Section 4.07.
4.08 ALLOCATION OF PAYMENTS RELATING TO EXECUTIVE LIFE INSURANCE
COMPANY INSOLVENCY. To the extent the Plan is paid any amount from a state
guaranty association with regard to the insolvency of Executive Life Insurance
Company in 1991, such amount shall be allocated on a pro rata basis, in
accordance with procedures adopted by the Administrative Committee, to the
Accounts of any Participant who (a) resided in such state on the applicable
trigger date for coverage under the state's guaranty association statute, and
(b) had any portion of his Accounts invested, as of April 11, 1991, in a fund
that held an Executive Life Insurance Company guaranteed investment contract.
The specific Accounts to which a Participant's allocation shall be credited
shall be the Accounts which was invested in the guaranteed investment contract.
4.09 FORM AND TIMING OF CONTRIBUTIONS. Contributions shall be made
to the Fund as soon as administratively practicable after the close of the
payroll period to which they relate. In no event, however, shall Tax Deferred
and After-Tax Contributions be made to the Fund later than the date prescribed
under applicable regulations. In no event shall Matching Contributions be made
to the Fund later than the last date on which amounts so paid may be deducted
for federal income tax purposes by the contributing Employer for the taxable
year in which the Plan Year ends. Generally, contributions shall be made in
cash; provided, however, that Matching Contributions shall be made in the form
of Unisys Stock. The value of the Unisys Stock contributed as Matching
Contributions shall be equal to the fair market value of such stock at the time
of the market closing on the date such Matching Contributions is actually made
to the Fund.
4.10 RECOVERY OF EMPLOYER CONTRIBUTIONS. The Employer may recover
its contributions under the Plan as follows:
(a) if a contribution is made by an Employer under a mistake of
fact, the excess of the amount contributed over the amount that would have been
contributed had there not occurred a mistake of fact may be recovered by the
Employer within one year after payment of the contribution; or
(b) if the contribution is conditioned upon its deductibility
under section 404 of the Code, the contribution may be recovered, to the extent
a deduction is disallowed, within one year after the disallowance.
Earnings attributable to an excess contribution may not be recovered by the
Employer. Any losses attributable to the excess contribution shall reduce the
amount the Employer may recover.
17
ARTICLE V
LIMITATIONS ON EMPLOYER CONTRIBUTIONS
5.01 DOLLAR LIMITATION ON TAX DEFERRED CONTRIBUTIONS.
(a) The Tax Deferred Contribution made on behalf of a Participant
pursuant to Section 4.01(a) for a calendar year shall not exceed the dollar
limit specified under section 402(g) of the Code. This dollar limit shall be
reduced by the amount, if any, contributed on behalf of the Participant under
any other qualified cash or deferred arrangement, simplified employee pension or
annuity established under section 403(b) of the Code for the calendar year,
other than elective deferral contributions made pursuant to section 414(v) of
the Code.
(b) In the event the dollar limit described in subsection (a) is
exceeded for a Participant, the Administrative Committee shall direct the
Trustee to distribute the excess to the Employee by the April 15 following the
end of the calendar year with respect to which the excess occurred. The excess
returned to an Employee in accordance with this subsection (b), shall be
adjusted for any income or loss thereon up to the date of the distribution of
the excess, using the Plan's method for allocating income and loss.
5.02 LIMITATION ON TAX DEFERRED CONTRIBUTIONS FOR HIGHLY
COMPENSATED EMPLOYEES.
(a) For each Plan Year the average of the Actual Deferral
Percentages for Participants who are Highly Compensated Employees shall be
compared to the average of the Actual Deferral Percentages for the other
Participants for the preceding Plan Year; the average of the Actual Deferral
Percentages for Participants who are Highly Compensated Employees shall not
exceed the greater of:
(1) the average of the Actual Deferral Percentages for
Participants who are Non-Highly Compensated Employees for the preceding Plan
Year, multiplied by 1.25; or
(2) the lesser of:
(A) the average of the Actual Deferral
Percentages for Participants who are Non-Highly Compensated Employees for the
preceding Plan Year multiplied by two, or
(B) the average of the Actual Deferral
Percentages for Participants who are Non-Highly Compensated Employees for the
preceding Plan Year plus two.
In the event that the Plan satisfies the requirements of Code section 401(a)(4),
401(k) or 410(b) only if aggregated with one or more other qualified retirement
plans, or if one or more other qualified retirement plans satisfy the
requirements of these sections only if
18
aggregated with the Plan, then this subsection (a) shall be applied as if all
such plans were a single plan.
(b) If in the Plan Year, the average of the Actual Deferral
Percentages for Participants who are Highly Compensated Employees exceeds the
limit in subsection (a) for a Plan Year, the Administrative Committee shall:
(1) determine the amount by which the Actual Deferral
Percentage for Highly Compensated Employee or Employees with the highest Actual
Deferral Percentage or Percentages for the Plan Year would need to be reduced to
comply with the limit in subsection (a);
(2) convert the excess percentage amount determined under
clause (1) into a dollar amount; and
(3) reduce the Tax Deferred Contributions of the Highly
Compensated Employee with the greatest dollar amount of Tax Deferred
Contributions made on their behalf with respect to the Plan Year pursuant to
Section 4.01(a) by the lesser of (A) the amount by which the dollar amount of
the affected Highly Compensated Employee's Tax Deferred Contributions made
pursuant to Section 4.01(a) exceeds the dollar amount of the Highly Compensated
Employee with the next highest dollar amount of Tax Deferred Contributions made
pursuant to Section 4.01(a), or (B) the amount of the excess dollar amount
determined under clause (2); and
(4) either:
(A) direct the Trustee to return the excess Tax
Deferred Contributions, as adjusted in accordance with subsection (d), to the
individuals from whose Accounts the excess Tax Deferred Contributions were
obtained within two and one-half months following the close of the Plan Year, if
administratively practicable, but in no event later than the close of the
following Plan Year;
(B) recharacterize the Tax Deferred Contribution
as an After-Tax Contribution, to the extent permitted by the applicable Treasury
regulations, no later than two and one-half months following the close of the
Plan Year; or
(C) make Qualified Nonelective Non-ESOP
Contributions, as described under Section 4.04, to the extent necessary to
satisfy subsection (a).
(c) To the extent that a Matching Contribution relates to excess
Tax Deferred Contributions returned or recharacterized pursuant to subsection
(b)(4), such Matching Contributions, as adjusted in accordance with subsection
(d), shall be forfeited immediately. Amounts forfeited during the Plan Year
shall be used to reduce future Matching Contributions made by the Employer.
(d) The excess Tax Deferred Contributions returned or
recharacterized pursuant to subsection (b), and any Matching Contributions
forfeited pursuant to subsection (c) shall be adjusted for any income or loss
thereon up to the date of
19
distribution or forfeiture, as applicable, using the Plan's method for
allocating income and loss.
(e) The amount of the excess Tax Deferred Contributions to be
returned pursuant to subsection (b) for a Plan Year shall be reduced by the
amount of excess Tax Deferred Contributions previously distributed to the Highly
Compensated Employee pursuant to Section 5.01(b) for such Employee's taxable
year ending on or within the Plan Year for which the excess Tax Deferred
Contributions are returned pursuant to subsection (b).
5.03 LIMITATION ON AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS FOR HIGHLY COMPENSATED EMPLOYEES.
(a) For each Plan Year the average of the Actual Contribution
Percentages for Participants who are Highly Compensated Employees shall be
compared to the average of the Actual Contribution Percentages for the other
Participants; the average of the Actual Contribution Percentages for
Participants who are Highly Compensated Employees shall not exceed the greater
of:
(1) the average of the Actual Contribution Percentages
for Participants who are Non-Highly Compensated Employees for the preceding Plan
Year multiplied by 1.25; or
(2) the lesser of:
(A) the average of the Actual Contribution
Percentages for Participants who are Non-Highly Compensated Employees for the
preceding Plan Year multiplied by two, or
(B) the average of the Actual Contribution
Percentages for Participants who are Non-Highly Compensated Employees for the
preceding Plan Year plus two.
In the event that the Plan satisfies the requirements of Code section 401(a)(4),
401(m) or 410(b) only if aggregated with one or more other qualified retirement
plans, or if one or more other qualified retirement plans satisfy the
requirements of these sections only if aggregated with the Plan, then this
subsection (a) shall be applied as if all such plans were a single plan.
(b) If in any Plan Year the average of the Actual Contribution
Percentages for Participants who are Highly Compensated Employees exceeds the
limit in subsection (a) for a Plan Year, the Administrative Committee shall:
(1) determine the amount by which the Actual Contribution
Percentage for Highly Compensated Employee or Employees with the highest Actual
Contribution Percentage or Percentages for the Plan Year would need to be
reduced to comply with the limit in subsection (a);
20
(2) convert the excess percentage amount determined under
clause (1) into a dollar amount; and
(3) reduce the After-Tax Contributions (including any Tax
Deferred Contributions recharacterized as After-Tax Contributions pursuant to
Section 5.02(b)(4)(B)) and then, to the extent necessary, the Matching
Contributions of the Highly Compensated Employee with the greatest dollar amount
of aggregate After-Tax and Matching Contributions made on their behalf with
respect to the Plan Year by the lesser of (A) the amount by which the dollar
amount of the affected Highly Compensated Employee's aggregate After-Tax and
Matching Contributions exceeds the dollar amount of the Highly Compensated
Employee with the next highest dollar amount of After-Tax and Matching
Contributions, or (B) the amount equal to the excess dollar amount determined
under clause (2); and
(4) either:
(A) direct the Trustee to return the excess
After-Tax Contributions and vested Matching Contributions, as adjusted in
accordance with subsection (c), to the individuals from whose Accounts the
excess Matching Contributions were obtained within two and one-half months
following the close of the Plan Year, if administratively practicable, but in no
event later than the close of the following Plan Year; or
(B) make Qualified Nonelective Non-ESOP
Contributions, as described under Section 4.04, to the extent necessary to
satisfy the limit under subsection (a); and
(5) direct the Trustee to forfeit the excess unvested
Matching Contributions, as adjusted in accordance with subsection (c), to the
individuals from whose Accounts the excess Matching Contributions were obtained.
Amounts forfeited during the Plan Year shall be used to reduce future Matching
Contributions made by the Employer.
(c) To the extent that a Matching Contribution relates to excess
After-Tax Contributions returned pursuant to subsection (b)(4), such Matching
Contributions, as adjusted in accordance with subsection (d), shall be forfeited
immediately. Amounts forfeited during the Plan Year shall be used to reduce
future Matching Contributions made by the Employer.
(d) The excess After-Tax and Matching Contributions returned or
recharacterized pursuant to subsection (b) shall be adjusted for any income or
loss thereon up to the date of the distribution or forfeiture, as applicable,
using the Plan's method for allocating income and loss.
(e) Notwithstanding anything in this Section 5.03 to contrary,
the provisions of this Section 5.03 shall be applied separately to the After-Tax
Contributions of Employees in Puerto Rico by taking into account only such
After-Tax Contributions and, to the extent permitted by applicable Treasury
regulations, any Tax-Deferred
21
Contributions or Qualified Nonelective Non-ESOP Contributions or under any other
plan maintained by an Employer or an Affiliate that is or could be aggregated
with the non-ESOP Portion of the Plan for purposes of section 410(b) of the
Code. For purposes of this subsection (e), only Employees in Puerto Rico shall
be treated as Employees. In the event that such After-Tax Contributions fail to
satisfy the limit under subsection (a) for any Plan Year, the Administrative
Committee shall correct such failure in a manner comparable to one or more of
the correction methods described in paragraph (4) of subsection (b).
5.04 LIMITATIONS ON ALLOCATIONS.
(a) The maximum allowable addition to any Participant's Accounts
for any Plan Year shall be the lesser of:
(1) $40,000 (as adjusted under section 415(d) of the
Code); or
(2) 100% of the Participant's Testing Compensation for
the Plan Year.
For purposes of this Section 5.04, an addition shall not include Tax Deferred
Contributions made pursuant to Section 4.01(b) and Rollover Contributions but
shall include all other contributions and forfeitures allocated to a
Participant's Accounts for the Plan Year, and all contributions and forfeitures
under any other defined contribution plan of the Company or an Affiliate (other
than elective deferral contributions made pursuant to section 414(v) of the
Code).
(b) If the addition to any Participant's Accounts (other than his
Rollover Account) for any Plan Year exceeds the maximum annual allowable
addition to such Participant's Accounts under subsection (a), then the excess
amount shall be eliminated by reducing the additions made to such Participant's
account, by first reducing the Participant's After-Tax Contributions and related
Matching Contributions to the extent necessary or, if less, to the extent the
After-Tax Contributions made with respect to the Plan Year are exhausted. To the
extent there is an excess remaining after this reduction, the Tax Deferred
Contributions and related Matching Contributions made on behalf of such
Participant shall be reduced. To the extent that an excess remains after this
reduction, the Matching Contribution of the Participant shall be reduced. Any
After-Tax or Tax Deferred Contributions reduced pursuant to this subsection (b)
shall be returned to the Participant. Any Matching Contributions reduced
pursuant to this subsection (b) shall be held in a suspense account (which shall
share in the investment gains and losses of the Fund) by the Trustee until the
following Plan Year. Such amounts shall be used in the following Plan Year to
reduce the Matching Contributions otherwise payable by the Employer by which the
Participant is employed in such subsequent Plan Year.
(c) 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," as such terms are defined in
section 415(e) of the Code, to exceed 1.0,
22
or such other limitation as may be applicable under section 415 of the Code with
respect to any combination of qualified plans of the Employer or an without
disqualification of any such plan. In the event that the amount tentatively
available for allocation to the Account of any Participant in any Limitation
Year exceeds the maximum amount permissible hereunder, benefits under the
defined benefit plan or plans in which the Participant is participating shall be
adjusted to the extent necessary to satisfy the requirements of section 415(e)
of the Code. Notwithstanding the foregoing, the limitations described above in
this subsection (c) shall not apply with respect to payments due on or after the
first day of the limitation year beginning January 1, 2000; provided, however,
that the aggregate benefits payable to, or on account of, a Participant who is
not credited with an Hour of Service on or after January 1, 2000 shall continue
to be subject to the limitations described above in this subsection (c).
5.05 OVERALL DEDUCTIBILITY LIMIT. In no event may the aggregate
contribution made by an Employer under the Plan for a Plan Year exceed the
amount that may be deducted under section 404 of the Code with respect to such
Plan Year.
ARTICLE VI
INVESTMENT AND VALUATION OF ACCOUNTS
6.01 INVESTMENT DIRECTION BY PARTICIPANTS. Except as otherwise
provided in Section 6.02, each Participant shall direct the Trustee to invest
the amounts credited to his Accounts in one or more Investment Funds, subject to
the rules and procedures established by the Administrative Committee. A
Participant's investment direction shall be made at the time and in the manner
prescribed by the Administrative Committee. If any balance remains in a
Participant's Accounts after his death, his Beneficiary shall direct the
investment of the amounts credited to the Accounts as if the Beneficiary were
the Participant. To the extent required by a Qualified Domestic Relations Order,
the alternate payee of a Participant shall direct the investment of the amounts
credited to the Participant's Accounts as though the alternate payee were the
Participant. To the extent a Participant, Beneficiary or alternate payee directs
the investment of the amounts credited to his Accounts, this Plan is intended to
be subject to section 404(c) of ERISA, as described under Section 6.07.
6.02 RESTRICTIONS ON PARTICIPANT INVESTMENT DIRECTION.
Notwithstanding the investment direction otherwise provided to Participants
under Section 6.01, the restrictions set forth below shall apply to the
availability of investment direction to Participants.
(a) For periods prior to February 1, 2000, a Participant may not
direct the investment of amounts held under his GPEP Account. Instead, with
respect to such periods, a Participant's GPEP Account shall be invested solely
in the Unisys Common Stock Fund.
(b) A Participant's ESOP Account and Regular Account (excluding
amounts attributable to the Burroughs Plan or the Sperry Plan) shall be invested
solely in the
23
Unisys Common Stock Fund until the Participant's attainment of age 50. Upon his
attainment of age 50, a Participant may direct the investment of his ESOP
Account and Regular Account in accordance with Section 6.01.
(c) Generally, the portion of a Participant's Accounts
attributable to the Sperry Plan may be invested in accordance with Section 6.01;
provided, however, that any amounts which a Participant directs to have invested
in the Unisys Common Stock Fund must remain in such Investment Fund until the
Participant attains age 50.
6.03 INVESTMENT FUNDS. The Investment Funds available under the
Plan shall be designated by, and at the sole discretion of, the Investment
Committee. The Investment Committee, at its sole discretion, may from time to
time designate or establish new investment funds or eliminate existing
Investment Funds. Investment in any Investment Fund shall be made in accordance
with rules formulated by the Investment Committee and the accounting procedures
applied under the Plan shall be modified by the Investment Committee to the
extent they deem appropriate to reflect investments in that Investment Fund. The
Investment Committee has the authority to select and appoint Investment
Managers. The Investment Funds shall be managed by the Trustee or an Investment
Manager, as applicable. Pending investment, reinvestment or distribution, as
provided in the Plan, the Trustee or Investment Manager may temporarily retain
the assets of any one or more Investment Funds in cash, commercial paper,
short-term government obligations or, unless otherwise directed by the
Investment Committee, undivided interests or participations in common or
collective funds consisting of short-term investments, including funds of the
Trustee or Investment Manager.
6.04 VALUATION OF THE FUND. As of each Valuation Date, any
increase or decrease in the fair market value of each Investment Fund (net after
deduction of liabilities) since the preceding Valuation Date shall be credited
to or deducted from the Accounts, if any, of each Participant. The allocation
for each Investment Fund shall be made in the proportion that the balance in
each Account invested in the Investment Fund as of the Valuation Date bears to
the aggregate balance in all Accounts invested in the Investment Fund on that
date. For purposes of the preceding sentence, the Employer's contributions to
the Plan for the current year shall be excluded. The fair market value of
investments shall be determined in accordance with any reasonable method
permitted under regulations prescribed by the United States Department of the
Treasury and such reasonable and uniform rules as the Trustee may adopt.
6.05 UNISYS COMMON STOCK FUND. Unless subsequently discontinued by
the Investment Committee, the Investment Funds under the Plan shall include the
Unisys Common Stock Fund which is a Investment Fund providing for investment and
reinvestment exclusively in Unisys Stock, except to the extent cash is held to
facilitate purchases and sales within the fund. Investments in the Unisys Common
Stock Fund shall be accounted for on the basis of units of the Unisys Common
Stock Fund. Shares of Unisys Stock and cash received by the Unisys Common Stock
Fund that are attributable to dividends, stock dividends, stock splits or to any
reorganization or recapitalization of Unisys Corporation shall remain in or be
invested in, as applicable,
24
the Unisys Common Stock Fund and allocated to the Participant Accounts in
proportion to the number of units of the Unisys Common Stock Fund held in such
accounts. The transfer taxes, brokerage fees and other expenses incurred in
connection with the purchase, sale or distribution of Unisys Stock shall be paid
by the Unisys Common Stock Fund, and shall be deemed part of the cost of such
Unisys Stock, or deducted in computing the sale proceeds therefrom, as the case
may be, unless paid by an Employer. The Investment Committee shall determine to
what extent a Participant shall bear any other administrative fee incurred by
the Plan in connection with the transfer of the Participant's interest in the
Unisys Common Stock Fund and provide appropriate written notice to such
Participants. The voting and tendering of Unisys Stock held in the Unisys Common
Stock Fund shall be subject to the following:
(a) For purposes of this Section, shares of Unisys Stock shall be
deemed to be allocated and credited to each applicable Account of the
Participant in an amount to be determined based on the balance in such account
on the accounting date coincident with or next preceding the record date of any
vote or tender offer and the closing price of Unisys Stock on such accounting
date or if not traded on that date, on the business day on which shares of
Unisys Stock were last traded before that accounting date.
(b) Each Participant who has any amounts under his Account
invested in the Unisys Common Stock Fund shall be given notice by the Trustee of
the date and purpose of each meeting of the stockholders of the Company at which
shares of Unisys Stock are entitled to be voted, and instructions shall be
requested from each such Participant as to the voting at the meeting of such
Unisys Stock. If the Participant furnishes instructions within the time
specified in the notification given to him, the Trustee shall vote such Unisys
Stock in accordance with the Participant's instructions. Shares of Unisys Stock
that have not been credited to any Participant's Account or for which no
instructions were timely received by the Trustees, whether or not credited to
the Account of any Participant shall be voted by the Trustee in the same
proportion that the allocated and voted shares of Unisys Stock have been voted
by Participants. The Investment Committee shall establish procedures under which
notices shall be furnished to Participants as required by this subsection (b)
and under which the Participants' instructions shall be furnished to the
Trustee.
(c) Each Participant who has any amounts under his Account
invested in the Unisys Common Stock Fund shall be given notice of any tender
offer for, or a request or invitation for tenders of, Unisys Stock made to the
Trustees. Instructions shall be requested from each such Participant as to the
tendering of shares of Unisys Stock credited to his Account and for this purpose
Participants shall be provided with a reasonable period of time in which they
may consider any such tender offer for, or request or invitation for tenders of,
Unisys Stock made to the Trustees. The Trustees shall tender such Unisys Stock
as to which the Trustees have received instructions to tender from Participants
within the time specified. Unisys Stock credited to an Account as to which the
Trustee has not received instructions from a Participant shall not be tendered.
Shares of stock that have not been credited to any Participant's Account shall
be tendered by the Trustee in the same proportion that the allocated and
tendered shares of Unisys Stock have been tendered by Participants. The
Investment
25
Committee shall establish procedures under which notices shall be furnished to
Participants as required by this subsection (c) and under which the
Participants' instructions shall be furnished to the Trustee. In carrying out
their responsibilities under this subsection (c) the Trustees may rely on
information furnished to them by (or under procedures established by) the
Investment Committee.
(d) For all purposes of this Section 6.05, the number of shares
of Unisys Stock held in a Participant's Account which are invested in the Unisys
Common Stock Fund shall be the number of shares of Unisys Stock represented by
the number of units held in such accounts after reducing such number of units by
the number of units in such accounts which represent cash.
(e) With respect to Participants subject to Section 16 of the
Securities Exchange Act of 1934, the Investment Committee shall apply any
requirements or restrictions required for the Plan to obtain the protections of
Rule 16b-3 under the Securities Exchange Act of 1934 or any successor Rule or
regulation intended to replace Rule 16b-3.
6.06 SPECIAL RULE REGARDING APPRAISAL OF UNISYS STOCK. If at any
time the Unisys Stock held by the ESOP Portion of the Plan is not readily
tradable on an established securities market, all valuations of such Unisys
Stock with respect to activities carried on by the Plan shall be made by an
independent appraiser meeting the requirements of section 401(a)(28) of the
Code.
6.07 SECTION 404(C) COMPLIANCE. The Plan is intended to constitute
a plan described in section 404(c) of ERISA and section 2550.404c-1 of the DOL
regulations. Thus, no fiduciary of the Plan shall be liable for any loss, or by
reason of any breach, which results from any investment direction made by a
Participant, Beneficiary or alternate payee under a Qualified Domestic Relations
Order. The Company or its delegate shall comply with, or monitor compliance
with, as required, all disclosure and other responsibilities described in
sections 2550.404c-1(b)(2)(i)(A) and (b)(2)(i)(B)(1) of the DOL regulations
except that the Trustee shall monitor compliance with those procedures
established to provide confidentiality of information relating to the exercise
of voting and tender rights by Participants. If the Company determines that a
situation has potential for undue influence by the Company, the Company shall
direct an independent party to perform such activities as are necessary to
ensure the confidentiality of the rights of Participants.
ARTICLE VII
VESTING
7.01 VESTING SCHEDULE.
(a) A Participant shall at all times be fully vested in the
balance of his After-Tax Account, Tax Deferred Account, GPEP Account, Tax
Deductible Contribution Account, and Rollover Account.
26
(b) A Participant employed by an Employer on or after January 1,
2000 shall be fully vested in his ESOP Account and Regular Account. Before
January 1, 2000, a Participant generally was fully vested in his ESOP Account
and Regular Account upon his completion of a five-year period of Service;
provided, however, that:
(1) a Participant who was formerly a participant in CTIP
who incurs a Severance from Service after October 1, 1992 was at all times fully
vested in his Regular Account and ESOP Account.
(2) a Participant who was formerly a participant in the
Burroughs Plan who incurred a Termination of Employment after March 31, 1988,
before being credited with five years of Service, or who incurred a Termination
of Employment on or before March 31, 1988, before being credited with ten years
of Service, shall continue to be vested in the portion of his Account, if any,
attributable to his vested matching contributions previously made under the
Burroughs Plan in accordance with the terms of the Burroughs Plan on March 31,
1988.
Notwithstanding the foregoing, however, a Participant shall be 100% vested in
his ESOP and Regular Account upon the earliest of his attainment of Normal
Retirement Age or death, regardless of the number of his years of Service if
such event occurs prior to his Termination of Employment.
7.02 FORFEITURES.
(a) The unvested portion of a Participant's Accounts shall be
forfeited as of the earlier of the date described in paragraphs (1) and (2)
below:
(1) as of the last day of the Plan Year in which a
Participant first incurs a Period of Severance;
(2) the last day of the Plan Year following the Plan Year
in which the Participant receives a distribution of his entire vested interest
under the Plan.
(b) For purposes of subsection (a), a Participant who terminates
employment with the Employer and all Affiliates and has no vested interest in
his Accounts at such time, shall be deemed to have received a single sum payment
of his entire vested interest in his Accounts as of the date of his Termination
of Employment. Restorations pursuant to this subsection (b) shall be made from
currently forfeited accounts in accordance with subsection (d), or from
additional contributions by the employer.
(c) If a Participant whose unvested Account balance is forfeited
in accordance with this Section 7.02 is rehired by the Company, an Affiliate, or
an Associated Company before incurring a five-year Period of Severance, any
amount forfeited under this Section 7.02 shall be restored to his Accounts.
Restorations pursuant to this subsection (c) shall be made from currently
forfeited amounts in accordance with subsection (d) or from additional
contributions by the Employer.
27
(d) Amounts forfeited in accordance with this Section 7.02 with
respect to a Plan Year shall be used first to restore future amounts required to
be restored in accordance with subsections (b) or (c) with respect to the Plan
Year. After such restoration, if any, is made, such amounts shall be used to
reduce the Matching Contribution of the Employer of the Employee to whom the
forfeiture relates or pay Plan expenses.
ARTICLE VIII
AMOUNT OF BENEFITS
8.01 BENEFITS UPON SEVERANCE FROM SERVICE. A Participant who
incurs a Severance from Service for a reason other than death shall be entitled
to a distribution of the entire vested balance of his Accounts as of the
Valuation Date coincident with or immediately preceding his Benefit Commencement
Date.
8.02 DEATH BENEFITS. If a Participant's Severance from Service
occurs by reason of his death, his Beneficiary shall be entitled to a
distribution of the entire vested amount credited to the Participant's Accounts
as of the Valuation Date coincident with or next following his Benefit
Commencement Date.
ARTICLE IX
PAYMENT AND FORM OF BENEFITS
9.01 FORM OF BENEFIT PAID TO PARTICIPANT.
(a) Unless a Participant elects otherwise in accordance with
subsection (b), any benefit due a Participant under Article IX shall be paid in
a single sum, subject to 9.04. If the vested Account balance to which a
Participant is entitled is zero as of the date of the Participant's Severance
from Service, such Participant shall be deemed to have received a single sum
payment of his entire vested Account balance under the Plan as of such date.
(b) If a Participant's vested Account balance exceeds $1,000 as
of his Benefit Commencement Date, he may, in lieu of the single sum payment
prescribed under subsection (a), elect an optional form of distribution;
provided that such election must be in writing and be made within the Notice
Period in the manner prescribed by the Administrative Committee. The optional
forms of distribution among which a Participant may elect shall be determined as
follows:
(1) an annuity as described below:
(A) Unless an optional form of annuity is elected
under paragraph (B), the normal form of an annuity for a married participant is
a Qualified Joint and Survivor Annuity and the normal form of annuity for an
unmarried participant is a single life annuity.
28
(B) Subject to the election requirements
described in this paragraph (B), a Participant described under this paragraph
(B) may elect to receive one of the following forms of annuities in lieu of the
normal form of annuity described under paragraph (A):
(i) a reduced monthly pension payable to
the Participant for life and, after his death, 50% to his Beneficiary for life;
or
(ii) a single life annuity.
An election under this paragraph (B) is only valid if (i) it is in writing, (ii)
it is made within the Notice Period, and (iii) the Participant's Spouse, if any,
consents to the form of benefit in writing and such consent is witnessed by a
notary public or an authorized representative of the Plan. Such election will
not be valid, however, if it is made before the Participant receives, within the
Notice Period, an explanation from the Administrative Committee of (i) the terms
and conditions of the normal form of annuity and the other forms of benefit
available to him under the Plan, (ii) the Participant's ability to make, and the
effect of, an election to waive the normal form of annuity, (iii) to the extent
applicable, the rights of the Participant's Spouse; and (iv) the Participant's
ability to make, and the effect of, a revocation of a previous waiver of the
normal form of annuity.
(2) monthly, quarterly, semi-annual or annual
installments payable over a period of no less than one-year and no greater than
the joint life expectancy of the Participant and his Beneficiary.
9.02 BENEFIT COMMENCEMENT DATE.
(a) Except as provided under this Article IX, if the
Participant's vested Account balance as of his Benefit Commencement Date does
not exceed $1,000, his benefit under the Plan shall be paid in a single sum as
soon as administratively practicable following the Valuation Date coinciding
with or next following date of the Participant's termination of employment with
Employer.
(b) Except as otherwise provided under this Article IX, if the
Participant's vested Account balance as of his Benefit Commencement Date is
greater than $1,000 the benefit payable to a Participant in accordance with
Article VIII shall be paid or commence as of the first day of the month
following the Participant's attainment of Normal Retirement Age. If the
Participant's Severance from Service occurs before his attainment of Normal
Retirement Age, however, the Participant may elect, in writing, to have his
benefit paid or commence on the first day of any month following the month in
which his Severance from Service occurred.
9.03 FORM AND PAYMENT OF DEATH BENEFIT. A Participant shall
designate a Beneficiary or Beneficiaries to receive any benefits which may be
payable under the Plan in the event of his death. If the vested Account balance
to which a Beneficiary is entitled is $1,000 or less, such amount shall be paid
in a single sum, subject to Section 9.04. If the Account balance payable upon a
Participant's death is zero, the
29
Participant's Beneficiary shall be deemed to have received a single sum payment
of the Participant's entire Account balance under the Plan or on the date of the
Participant's death. If the vested Account balance exceeds $1,000, the form of
the death benefit shall be determined as follows:
(a) If a married Participant dies before his Benefit Commencement
Date:
(1) if the Participant dies after electing an annuity
payment in accordance with Section 9.01(b) and his sole Beneficiary is his
surviving Spouse, unless his surviving Spouse elects otherwise in accordance
with subsection (b), the Participant's vested Account balance shall be paid to
his surviving Spouse in the form of a single life annuity;
(2) if (A) a Participant is unmarried at the time of his
death, or (B) is married but either (i) did not elect an annuity form of payment
under Section 9.01(b) of the Plan prior to his death, or (ii) designated a
Beneficiary other than or in addition to his Spouse, the Participant's vested
Account balance shall be paid to his Beneficiary in a single sum, subject to
Section 9.04.
(b) If a Participant dies before his Benefit Commencement Date,
his Beneficiary may elect one of the following forms of payment in lieu of the
form described under subsection (a):
(1) an immediately payable single sum;
(2) a single life annuity; or
(3) monthly installment payments over a period of no less
than the life expectancy of the Beneficiary.
(c) If a Participant dies on or after his Benefit Commencement
Date but before the entire amount of his benefit has been paid, the remaining
amount shall be paid to his Beneficiary in the form and over the period being
used at the Participant's date of death.
With respect to a Benefit Commence Date beginning before March 22, 1999, the
$1,000 threshold under this Section 9.03 shall take into account all amounts
withdrawn or distributed prior to such Benefit Commencement Date.
9.04 FORM OF SINGLE SUM DISTRIBUTIONS. If a benefit under the Plan
is payable in a single sum, such amount shall generally be paid in cash.
However, a Participant or Beneficiary entitled to a distribution may elect, in
the form and manner prescribed by the Administrative Committee, to receive the
vested balance of the Account invested in the Unisys Common Stock Fund in the
form of whole shares of Unisys Stock (and cash with respect to fractional
shares). Before any distribution is made from the Plan in a single sum, the
portion of a Participant's ESOP Account that has been invested in Investment
Funds other than the Unisys Common Stock Fund, shall be automatically reinvested
in the Unisys Stock Fund before distribution.
30
9.05 PUT OPTIONS. If the Unisys Stock held under the ESOP Portion
of the Plan is not readily tradable on an established securities market (within
the meaning of section 409(h)(1)(B) of the Code), any Participant who is
entitled to a distribution of such shares from the Plan shall have a right to
require the Company to repurchase such shares in accordance with section
409(h)(1)(B) of the Code. Unisys Stock held under the ESOP Portion of the Plan
shall not be subject to a put, call, or other option, or a buy-sell or similar
arrangement either while held by the Plan or when distributed to or on account
of a Participant whether or not the Plan is then an Employee Stock Ownership
Plan.
9.06 DIRECT ROLLOVERS. In the event any payment or payments,
excluding any amount not includible in gross income, to be made to a Distributee
pursuant to this Article IX would constitute an "eligible rollover
distribution," such Distributee may elect, in accordance with this Section 9.06,
that, in lieu of payment to the Distributee, all or part of such "eligible
rollover distribution" be rolled over directly to the trustee or custodian of an
"eligible retirement plan." Any such request shall be made in writing, on the
form and subject to such requirements and restrictions as may be prescribed by
the Administrative Committee for such purpose pursuant to Treasury regulations,
at such time in advance of the date payment would otherwise be made as may be
required by the Administrative Committee. Within the Notice Period, the
Administrative Committee shall supply a Participant or other Distributee
entitled to receive an "eligible rollover distribution" with a written
explanation of the rollover rules and tax treatment applicable to his
distribution.
For purposes of this Section 9.06, an "eligible rollover distribution" means a
distribution from the Plan, excluding (i) any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) over the life (or life expectancy) of the individual, the joint lives
(or joint life expectancies) of the individual and the individual's designated
beneficiary, or a specified period of ten (10) or more years, (ii) any
distribution to the extent such distribution is required under section 401(a)(9)
of the Code, and (iii) effective January 1, 1999, any hardship distribution
described in section 401(k)(2)(B)(i)(IV) of the Code.
For purposes of this Section 9.06, an "eligible retirement plan" means (1) an
individual retirement account described in section 408(a) of the Code, (2) an
individual retirement annuity described in section 408(b) of the Code (other
than an endowment contract), (3) a qualified plan the terms of which permit the
acceptance of rollover distributions, or (4) an annuity plan described in
section 403(a) of the Code; provided, however, that the eligible retirement
plans described in clauses (3) and (4) shall not apply with respect to a
distribution made to a Beneficiary who is the surviving spouse of a Participant.
9.07 MINIMUM REQUIRED DISTRIBUTION. If a Participant is a 5% owner
of the Employer (as determined under section 416 of the Code), or if a
Participant attained age 70 1/2 before January 1, 2002, he shall receive, with
respect to each calendar year during which and following the calendar year in
which he attained age 70 1/2, the minimum required distribution amount described
under section 401(a)(9) of the Code and the regulations thereunder. In no event
shall the first minimum required distribution be made later than the April 1 of
the calendar year following the calendar year in which
31
he attained age 70 1/2. The amount of such distribution shall be determined in
accordance with section 401(a)(9) of the Code and the regulations thereunder.
The amount of minimum required distributions for calendar years prior to 2003
shall be determined and made in accordance with the regulations under section
401(a)(9) of the Code that were proposed in 1987, including the minimum
distribution incidental benefit requirement of section 1.401(a)(9)-2 of the
proposed regulations. The amount of minimum required distributions for the 2003
calendar year and thereafter shall be determined and made in accordance with the
final regulations promulgated under section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Q&A-1(d) of section
1.401(a)(9)-5 of the final regulations.
ARTICLE X
WITHDRAWALS AND LOANS
10.01 GENERAL. A Participant may withdraw amounts from his Account
to the extent provided under this Article X. Any withdrawal shall be considered
the distribution of a portion of the Participant's benefit and shall be paid in
a single sum. A withdrawal shall be disregarded, however, for purposes of
determining whether the Participant's Benefit Commencement Date has occurred. A
Participant's request for a withdrawal must be made in writing within the period
prescribed by the Administrative Committee. The amount of the withdrawal shall
be divided proportionally among the Investment Funds in which the Accounts from
which the withdrawal is to be made are invested. Withdrawals shall be made in
accordance with the procedures established by the Administrative Committee.
10.02 WITHDRAWALS FROM AFTER-TAX ACCOUNT. Subject to the
requirements set forth in Section 10.01, a Participant who is an Employee may
withdraw all or a portion of the balance of his After-Tax Account (other than
earnings on After-Tax Contributions made on or after January 1, 1987), up to one
time in any six-consecutive month period. Withdrawals from a Participant's
After-Tax Account shall be made in the following order:
(a) After-Tax Contributions made before January 1, 1987; then
(b) Amounts relating to After-Tax Contributions after
December 31, 1986, including a pro-rata portion of the earnings thereon; and
then
(c) Earnings on After-Tax Contributions made before January 1,
1987.
10.03 WITHDRAWALS FROM TAX DEDUCTIBLE CONTRIBUTION ACCOUNT AND
ROLLOVER ACCOUNT. Subject to the requirements set forth in Section 10.01, a
Participant may withdraw all or a portion of the balance of his Tax Deductible
Contribution Account or Rollover Account at any time.
10.04 WITHDRAWALS FROM REGULAR ACCOUNT. Subject to the requirements
set forth in Section 10.01, a Participant who is an Employee may withdraw all or
a portion of the balance of his Regular Account, up to one time in any
six-consecutive month period if the following requirements are met:
32
(a) the Participant has withdrawn the entire balance of his
After-Tax Account; and
(b) the Participant's aggregate years of participation in this
Plan and any Prior Plan is five years.
10.05 WITHDRAWALS FROM ESOP ACCOUNT. Subject to the requirements
set forth in Section 10.01, a Participant who is an Employee may withdraw all or
a portion of the vested balance of his ESOP Account, up to one time in any
six-consecutive month period if the following requirements are met:
(a) the Participant has withdrawn the entire balance of his
After-Tax Account and his Regular Account; and
(b) the Participant's aggregate years of participation in this
Plan and any Prior Plan is five years.
10.06 WITHDRAWALS FROM GPEP ACCOUNT. Subject to the requirements
set forth in Section 10.01, a Participant who is an Employee and who has
withdrawn the entire balance of his After-Tax Account and his Regular Account
may, up to one time in any six consecutive month period, withdraw the portion of
the balance of his GPEP Account attributable to Contributions made at least
36-months prior to the date the withdrawal is requested.
10.07 HARDSHIP WITHDRAWALS.
(a) Subject to the requirements set forth in Section 10.01 and in
subsection (b) of this Section 10.07, a Participant may elect a withdrawal from
his Tax Deferred Account (excluding any earnings credited after December 31,
1988), on account of an immediate and heavy financial hardship; provided,
however, that the amount of such withdrawal must be necessary to satisfy the
immediate and heavy financial need as determined under subsections (c) and (d).
(b) In the event a Participant receives a withdrawal under this
Section 10.07, the Participant shall be both ineligible to have Tax Deferred
Contributions made on his behalf and ineligible to make After-Tax Contribution
for the 6-month period following his receipt of the withdrawal.
(c) For purposes of this Section 10.07, an immediate financial
hardship is expenses incurred as a result of:
(1) medical expenses of the Participant, his spouse,
children or dependents, as described in section 152 of the Code, that are
deductible for federal income tax purposes under Code section 213(d);
(2) costs related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
33
(3) the payment of tuition (and related expenses) for the
next 12 months of post-secondary education for the Participant, his spouse,
children or dependents; or
(4) the need to prevent the eviction of the Participant
from, or foreclosure on the mortgage of, the Participant's principal residence.
The final determination of whether an immediate and heavy financial hardship
exists shall be determined by the Administrative Committee or its designee,
which shall be under no obligation to verify independently the facts of hardship
submitted by a Participant. Unless the Administrative Committee or its designee
has actual knowledge to the contrary, the Administrative Committee shall be
entitled to rely upon an affidavit signed by the Participant as proof of the
elements necessary for a hardship withdrawal.
(d) For purposes of this Section 10.07, a withdrawal shall be
deemed to be in the amount necessary to alleviate an immediate financial
hardship if:
(1) the amount of the withdrawal does not exceed the
amount required to satisfy the immediate and heavy financial need;
(2) the Participant has obtained all available
withdrawals and distributions from his Regular Account, ESOP Account, GPEP
Account, Tax Deductible Contribution Account, Rollover Account, and After-Tax
Contribution Account;
(3) the amount of the withdrawal under this Section 10.07
will not cause the a violation of the maximum loan limitations for any loan
outstanding at the time of the withdrawal request; and
(4) the Participant has obtained all nontaxable loans
currently available to the Participant from the Plan and all plans maintained by
the Company or an Affiliate.
10.08 WITHDRAWALS AFTER AGE 59 1/2. Subject to the requirements set
forth in 10.01, after he has attained age 59 1/2, a Participant may withdraw all
or any portion of his vested interest in his Account, up to one time in any
six-consecutive month period.
10.09 LOANS TO PARTICIPANTS. The Administrative Committee may in
its discretion cause the Plan to lend to any qualified Participant an amount, as
requested by the Participant, from his Accounts (excluding amounts held in his
Tax Deductible Contribution Account or GPEP Account), upon such terms as the
Administrative Committee may see fit.
(a) QUALIFICATION FOR LOANS. A Participant is eligible for a Plan
loan if he is (1) an Employee, or (2) a Participant who is a party in interest,
as determined under section 3(14) of ERISA.
(b) AMOUNT OF LOAN. The amount lent to any Participant shall not
exceed the lesser of:
34
(1) the lesser of $50,000 or 50% of the amount in the
Participant's vested interest in his Accounts; or
(2) the greater of $10,000, or one-half of the value of
the vested portion of the Employee's accounts under all plans maintained by the
Employer and all Affiliates. For purposes of determining the maximum amount of a
loan under this subsection (b), the balance of a Participant's Tax Deductible
Contribution Account and GPEP Account shall be disregarded. The minimum amount
of any loan made to a Participant shall be set by the Administrative Committee
from time to time, in a uniform and nondiscriminatory manner. A Participant may
not have more than one loan outstanding at any time.
(c) LOAN TERM; INTEREST RATES. Each loan shall be repaid within
no less than one year and no more than five years from the date the loan is
made, unless the loan proceeds are used to acquire a dwelling that is to be used
as the Participant's principal residence, in which event the term of the loan
may not be more than fifteen years. Each loan shall bear a fixed rate of
interest that is commercially reasonable, as determined by the Administrative
Committee.
(d) OTHER LOAN REQUIREMENTS. The amount lent to any Participant
shall be debited against all of the Participant's Accounts from which the loan
may be made (as determined under subsection (a)) such that the amount of the
loan is prorated among such Accounts on the basis of the balance of each Account
at the time the loan is made, and the interest paid to the Trustee by the
Participant on the loan shall be allocated to such Accounts and to the Account
of no other Participant. The amount of any loan, including accrued interest,
unrepaid at the time a Participant or his Beneficiary becomes entitled to a
distribution under Article IX shall be deducted from the amount otherwise
distributable to the Participant or Beneficiary. No note or other document
evidencing a loan shall be negotiable or otherwise assignable.
(e) ELECTIONS. In order to be valid, a Participant's request for
a loan must be made in the time and manner prescribed by the Administrative
Committee.
(f) EXPENSE OF LOAN. The Administrative Committee may charge a
reasonable loan processing fee as well as an annual loan administration fee for
each year the loan is outstanding. Such fee shall be applied on a uniform and
nondiscriminatory manner.
(g) REPAYMENT. Loans shall be repaid in equal installments (not
less frequently than quarterly) through payroll withholding or, in the case of a
Participant's unpaid authorized leave of absence or lay-off, by personal check.
A Participant may fully repay the loan at any time without penalty. Loans shall
become immediately due and payable upon a Participant's Termination of
Employment, retirement or death.
(h) LOAN SECURITY AND DOCUMENTATION. A loan shall be evidenced by
a written document containing such terms and conditions as the Administrative
Committee shall
35
determine, and shall be secured by the Participant's vested interest in his
Accounts (other than his Tax Deductible Contributions Account).
ARTICLE XI
SPECIAL PROVISIONS FOR TOP-HEAVY PLANS
11.01 DETERMINATION OF TOP-HEAVY STATUS. The Plan shall be
considered top-heavy for the Plan Year, if, as of the Determination Date:
(a) the Plan is not part of an Aggregation Group and the Key
Employee Ratio, determined by substituting the "Plan" for the "Aggregation
Group" each place it appears in Section 2.34, exceeds 60%, or
(b) the Plan is part of an Aggregation Group and the Key Employee
Ratio of such Aggregation Group exceeds 60%;
The Plan shall be deemed super top-heavy as to any Plan Year if, as of the
Determination Date with respect to such Plan Year, the conditions of subsections
(a) or (b) hereof are met with "90%" substituted for "60%" therein.
11.02 MINIMUM CONTRIBUTIONS. For any Plan Year in which the Plan is
determined to be top-heavy or super top-heavy within the meaning of Section
11.01, the Plan shall provide a minimum Employer contribution (consisting of
Matching Contributions, nonelective Employer contributions, or both) for each
Participant who is a Non-Key Employee and has not incurred a Severance from
Service by the end of the Plan Year in an amount equal to 5% of the
Participant's Testing Compensation.
11.03 ADJUSTMENTS TO MAXIMUM LIMITS ON BENEFITS AND CONTRIBUTIONS.
For any Plan Year in which the Plan is determined in accordance with Section
11.01 to be a top-heavy plan or a super top-heavy plan, the definitions of
"defined contribution fraction" and "defined benefit fraction" for purposes of
the limitation on benefits referenced in Section 5.05 shall be modified as
required under section 416 of the Code.
11.04 MINIMUM VESTING. For any Plan Year in which the Plan is
defined to be top-heavy or super top-heavy within the meaning of Section 11.01,
each Participant during such Plan Year shall become 100% vested in all of his
Accounts and shall remain fully vested in such Accounts after the Plan ceases to
be top-heavy.
ARTICLE XII
PLAN ADMINISTRATION
12.01 FIDUCIARY RESPONSIBILITY.
(a) The Plan shall be administered by the Administrative
Committee, which shall be the Plan's "named fiduciary" and "administrator," as
those terms are defined by ERISA, and its agent designated to receive service of
process. All matters relating to
36
the administration of the Plan, including the duties imposed upon the plan
administrator by law, except those duties relating to the control or management
of Plan assets, shall be the responsibility of the Administrative Committee. The
Administrative Committee shall have the power to interpret and construe the
provisions of the Plan, and to decide such questions as may rise in connection
with the operation of the Plan, including interpretation of ambiguous Plan
provisions, determination of disputed facts, and application of Plan provisions
to unanticipated circumstances. The determination of the Administrative
Committee shall be subject to review only for abuse of discretion. The duties
and responsibilities of the Administrative Committee also shall include, but not
be limited to, the selection of the Investment Funds and the monitoring of the
performance of the Trustee.
(b) The Investment Committee shall be responsible for all matters
relating to the control and management of Plan assets to the extent not assigned
to the Trustee in the Trust Agreement or other instrument. The duties and
responsibilities of the Investment Committee shall include, but not be limited
to, the selection of the Investment Funds, the selection of the Investment
Manager, and the monitoring of the performance of the Investment Manager and
Trustee. The Investment Committee shall be a "named fiduciary" as that term is
defined by ERISA.
12.02 APPOINTMENT AND REMOVAL OF COMMITTEE. The Administrative
Committee and the Investment Committee shall be appointed and may be removed by
the Board. Persons appointed to the Administrative Committee or the Investment
Committee may be, but need not be, employees of the Employer. Any Administrative
Committee or Investment Committee member may resign by giving written notice to
the Board, which notice shall be effective 30 days after delivery. An
Administrative Committee or Investment Committee member may be removed by the
Board by written notice to such Committee member, which notice shall be
effective upon delivery. The Board shall promptly select a successor following
the resignation or removal of any Administrative Committee or Investment
Committee member, if necessary to maintain both an Administrative Committee and
the Investment Committee of at least one member.
12.03 COMPENSATION AND EXPENSES OF THE COMMITTEE. Members of the
Administrative Committee and members of the Investment Committee who are
Employees shall serve without compensation. Members of the Administrative
Committee or Investment Committee who are not Employees may be paid reasonable
compensation for services rendered to the Plan. Such compensation, if any, and
all ordinary and necessary expenses of the Administrative Committee or
Investment Committee shall be paid from the Fund unless paid by the Employer.
12.04 COMMITTEE PROCEDURES. The Administrative Committee and
Investment Committee may enact such rules and regulations for the conduct of its
business and for the administration of the Plan as it may deem desirable. The
Administrative Committee and Investment Committee may act either at meetings at
which a majority of its members are present or by a writing signed by a majority
of its members without the holding of a meeting. Records shall be kept of the
meetings and actions of the Administrative Committee and the Investment
Committee. No Administrative
37
Committee or Investment Committee member who is a Participant in the Plan shall
vote upon, or take an active role in resolving, any question affecting only his
Accounts.
12.05 INDEMNIFICATION OF THE COMMITTEE. Each member of the
Administrative Committee and the Investment Committee shall be indemnified by
the Company against costs, expenses and liabilities (other than amounts paid in
settlement to which the Company 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 a member of the Administrative Committee or Investment Committee except in
relation to matters as to which he shall be adjudged in such action to be
personally guilty of 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 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 member of the Administrative Committee or
Investment Committee may be entitled pursuant to the bylaws of the Company.
Service on the Administrative Committee or Investment Committee shall be deemed
in partial fulfillment of the member's function as an employee, officer or
director of the Employer, if he serves in that capacity as well as in the role
of a member of the Administrative Committee or Investment Committee.
12.06 EXCLUSIVE BENEFIT RULE. The Administrative Committee and
Investment Committee shall administer the Plan for the exclusive benefit of
Participants and their Beneficiaries.
12.07 CONSULTANTS. The Administrative Committee and Investment
Committee may, and to the extent required for the preparation of reports shall,
employ accountants, actuaries, attorneys and other consultants or advisors. The
fees charged by such accountants, actuaries, attorneys and other consultants or
advisors shall represent reasonable compensation for services rendered and shall
be paid from the Fund unless paid by the Employer.
12.08 PAYMENT OF PLAN EXPENSES. The expenses incurred by the
Employer in connection with the operation of the Plan, including, but not
limited to, expenses incurred by reason of the engagement of professional
assistants and consultants, shall be expenses of the Plan and shall be payable
by the Plan at the direction of the Board. 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 Plan from the obligation of bearing such expenses.
Payment of any such expenses by the Employer on one occasion shall not bind the
Employer to pay any similar expenses on any subsequent occasion.
12.09 METHOD OF HANDLING PLAN FUNDS. All payments to the Fund shall
be made by the employee of the Employer charged with that responsibility by the
Board. All payments from the Fund shall be made by the Trustee.
38
12.10 DELEGATION AND ALLOCATION OF RESPONSIBILITY. To the extent
permitted under the terms of the Trust Agreement, the Trustee may, by unanimous
action in writing, delegate or assign any of its responsibilities for
administering the Plan to one or more individuals or entities. In the event of
any such delegation or allocation, the Trustee shall establish procedures for
the thorough and frequent review of the performance of such duties. Persons to
whom responsibilities have been delegated may not delegate to others any
discretionary authority or discretionary control with respect to the management
or administration of the Plan.
12.11 CLAIMS PROCEDURES.
(a) INITIAL CLAIM. In the event of a claim by a Participant or
his or her Beneficiary with respect to the Plan, such claimant shall present his
or her claim in writing to the Administrative Committee. The Administrative
Committee shall, within 90 days after receipt of such written claim, make a
determination and send a written or electronic notification to the claimant as
to its disposition. If warranted by special circumstances, the Administrative
Committee shall be allowed an extension of time not to exceed 90 days from the
end of the initial period and shall so notify the claimant. In the event the
claim is wholly or partially denied, such notification shall:
(1) state the specific reason or reasons for the denial;
(2) make specific reference to the pertinent provisions
of the Plan upon which the denial is based;
(3) provide a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary;
(4) set forth the procedure by which the claimant may
appeal the denial of his or her claim and the applicable time limitations; and
(5) a statement of the claimant's rights to bring a civil
action under section 502(a) of ERISA following an adverse benefit determination
on appeal.
(b) REVIEW OF DENIAL. In the event a claimant wishes to appeal
the denial of his claim, he may request a review of such denial by making
application in writing to the Administrative Committee within 60 days after
receipt of such denial. Such claimant (or his or her duly authorized
representative) may, upon written request to the Administrative Committee and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claim for benefits. In addition, the claimant
or his authorized representative may submit issues and comments to the
Administrative Committee in writing. Appeals not timely filed shall be barred.
Within 60 days after receipt of a written appeal the Administrative Committee
shall make a determination and notify the claimant of its final decision. If
warranted by special circumstances, the Administrative Committee shall be
allowed an extension of time not to exceed 120 days from the receipt of the
appeal and shall so notify the claimant. The final decision on review shall
contain:
39
(1) specific reasons therefor;
(2) specific Plan references upon which it is based;
(3) a description of the claimant's right to, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim for benefits;
(4) a description of any voluntary appeals procedures
offered by the Plan; and
(5) a statement of the claimant's rights to bring a civil
action under section 502(a) of ERISA.
If the Administrative Committee has not exceeded the time limitations set forth
in this Section 12.11, the decision shall be final and conclusive on all persons
claiming benefits under the Plan, subject to applicable law. If the claimant
challenges the decision of the Administrative Committee, a review by a court of
law shall be limited to the facts, evidence, and issues presented during the
claims procedure set forth above. The review process described herein must be
exhausted before the claimant can pursue the claim in federal court. Facts and
evidence that become known to the claimant after having exhausted the review
procedure may be submitted for reconsideration of the review in accordance with
the time limits established above. Issues not raised during the review process
shall be deemed waived.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.01 AMENDMENT. The Plan may be amended at any time and from time
to time by or pursuant to a formal written action of the Board, the Compensation
and Organization Committee of the Board, the Company's Chief Financial Officer,
the Company's Vice-President of Human Resources, or the Administrative
Committee, subject to the following restrictions:
(a) the Administrative Committee may make amendments only to the
extent that they are necessary or appropriate to maintain the Plan's compliance
with the applicable statutes or regulations;
(b) the Company's Chief Financial Officer and Vice-President of
Human Resources may make amendments only to the extent that the effect of the
amendments results in an annual cost of less than $1,000,000;
(c) the Company's Chief Executive Officer may make amendments
only to the extent that the effect of the amendments results in an annual cost
less than $25,000,000; and
40
(d) the Corporate Governance and Compensation Committee of the
Board may make amendments only to the extent that the affect of the amendments
results in an annual cost less than $50,000,000.
Notwithstanding the foregoing, however, to the extent that the Company's
Corporate Delegation Chart or other action of the Board modifies the amendatory
authority described in the preceding sentence, the Plan shall be deemed to have
been amended in accordance with the Delegation of Authority Chart or such Board
action. In no event shall an amendment be effective to the extent that it has
the effect of decreasing the balance of a Participant's Account or eliminating
an optional form of benefit payment for benefits attributable to service before
the later of the date the amendment is adopted or the date it becomes effective,
except to the extent permissible under section 411(d)(6) of the Code and the
regulations thereunder. If the vesting schedule of the Plan is amended, the
nonforfeitable interest of a Participant in his Accounts, determined as of the
later of the date the amendment is adopted or the date it becomes effective,
shall not be less than the Participant's nonforfeitable interest in his Accounts
determined without regard to such amendment. If the Plan's vesting schedule is
amended, each Participant with three or more Years of Service may elect to have
the nonforfeitable percentage of his Accounts computed under the Plan without
regard to such amendment. The Participant's election shall be made within 60
days after the latest of (1) the date the amendment is adopted, (2) the date the
amendment becomes effective, or (3) the date the Participant is given written
notice of the amendment by the Board or the Trustee.
13.02 TERMINATION OR PARTIAL TERMINATION.
(a) RIGHT TO TERMINATE RESERVED. While the Company intends to
continue the Plan indefinitely, it reserves the right to terminate the Plan at
any time by formal written action of the Board. Further, any Employer may, at
any time for any reason, withdraw from participation in the Plan, in whole or in
part, by action of its governing board.
(b) TREATMENT OF PARTICIPANTS UPON TERMINATION. If the Plan is
terminated or partially terminated, Accrued Benefits of the Participants
affected thereby shall immediately vest and be nonforfeitable, to the extent
funded. No employees of such Employer who are not then Participants may
thereafter be admitted to the Plan, and the Employer shall make no further
contributions to the Fund.
(c) LIABILITY OF EMPLOYER. The Employer shall have no liability
in respect of payment under the Plan, except to pay over to the Trustee the
contributions otherwise required under the Plan, and each Participant or his
Beneficiary shall look solely to the Trust for distribution of benefits under
the Plan.
(d) SUCCESSOR EMPLOYERS. Unless this Plan is terminated earlier,
a successor employer of the Employees of the Employer may continue this Plan and
Trust by joining with the Trustee in executing an appropriate supplemental
agreement. Such successor employer shall ipso facto succeed to all the rights,
powers, and duties of the Employer hereunder. In such event, the Plan shall not
be deemed to have terminated and the
41
employment of any Employee who is continued in the employ of such successor
Employer shall be deemed not to have been terminated or severed for any purposes
hereunder.
ARTICLE XIV
MISCELLANEOUS
14.01 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS OR LIABILITIES.
The Company reserves the right to merge or consolidate the Plan with any other
defined contribution plan qualified under section 401(a) of the Code, or to
transfer Plan assets or liabilities to any other qualified defined contribution
plan, provided that the amount standing to the credit of each Participant's
Accounts immediately after any such merger, consolidation or transfer of assets
or liabilities shall be at least equal to the amount standing to the credit of
the Participant's Accounts immediately before such merger, consolidation or
transfer, determined as if the Plan had then terminated.
14.02 LIMITED PURPOSE OF PLAN. The establishment or existence of
the Plan shall not confer upon any Employee the right to be continued as an
Employee. The Employer expressly reserves the right to discharge any Employee
whenever in its judgment its best interests so require.
14.03 NONALIENATION. No benefit payable under the Plan shall be
subject in any manner to anticipation, assignment, or voluntary or involuntary
alienation. This Section 14.03 shall not preclude the Trustee from complying
with the terms of (a) a Qualified Domestic Relations Order, (b) a federal tax
levy made pursuant to section 6331 of the Code, (c) subject to section
401(a)(13) of the Code, a judgement relating to the Participant's conviction of
a crime involving the Plan, or (d) subject to section 401(a)(13) of the Code, a
judgement, order, decree, or settlement agreement between the Participant and
the United States Department of Labor or the Pension Benefit Guaranty
Corporation relating to a violation (or an alleged violation) of part 4 subtitle
B or Title I of ERISA.
14.04 GENERAL DISTRIBUTION REQUIREMENTS. All distributions under
the Plan shall be determined and made in accordance with the minimum
distribution incidental death benefit requirements of the regulations under
section 401(a)(9) of the Code. Effective prior to January 1, 2003, all
distributions shall be determined and made in accordance with the minimum
distribution requirements of the regulations under section 401(a)(9) of the Code
that were proposed in 1987, including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed regulations.
Effective January 1, 2003, all distributions shall be determined and made in
accordance with the final regulations promulgated under section 401(a)(9) of the
Code, including the minimum distribution incidental benefit requirement of
Q&A-1(d) of section 1.401(a)(9)-5 of the final regulations; provided, however,
that the amount of any payments made to a Participant with a Benefit
Commencement Date prior to January 1, 2003 shall not be decreased by the
application of the final regulations.
42
14.05 FACILITY OF PAYMENT. If the Administrative Committee, in its
sole discretion, deems a Participant or Beneficiary who is entitled to receive
any payment hereunder to be incompetent to receive the same by reason of age,
illness, infirmity or incapacity of any kind, the Administrative Committee may
direct the Trustee to apply such payment directly for the benefit of such
person, or to make payment to any person selected by the Administrative
Committee to disburse the same for the benefit of the Participant or
Beneficiary. Payments made pursuant to this Section 14.05 shall operate as a
discharge, to the extent thereof, of all liabilities of the Employer, the
Trustee, the Administrative Committee and the Fund to the person for whose
benefit the payments are made.
14.06 IMPOSSIBILITY OF DIVERSION. All Plan assets shall be held as
part of the Fund until paid to satisfy allowable Plan expenses or to provide
benefits to Participants or their Beneficiaries. It shall be impossible, unless
Section 4.10 or 14.07 applies, for any part of the fund to be used for, or
diverted to, purposes other than the exclusive benefit of the Participants or
their Beneficiaries or the payment of the reasonable expenses of the
administration of the Plan or of the Fund or both, and the Fund shall continue
for such time as may be necessary to accomplish the purposes for which it was
established.
14.07 UNCLAIMED BENEFITS. If a Participant or Beneficiary to whom a
benefit is payable under the Plan cannot be located following a reasonable
effort to do so by the Trustee, such benefit shall be forfeited but shall be
reinstated if a claim therefor is filed by the Participant or Beneficiary.
14.08 CONTINGENT EFFECTIVENESS OF PLAN AMENDMENT AND RESTATEMENT.
The effectiveness of this amendment and restatement of the Plan shall be subject
to and contingent upon a determination by the District Director of the Internal
Revenue Service that the Plan and Trust continue to be qualified under the
applicable provisions of the Code, so that the contributions by the Employer are
deductible when made and the Trust continues to be exempt from federal income
tax. If the District Director determines that the amendment and restatement
adversely affect the existing qualified status of the Plan and Trust, then, upon
notice to the Trustee, the Board shall have the right further to amend the Plan
or to rescind the amendment and restatement.
43
14.09 CONTROLLING LAW. The Plan shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania to the extent not
preempted by federal law, which shall otherwise control.
IN WITNESS WHEREOF, and is evidence of the adoption of the Plan as amended and
restated herein, Unisys Corporation has caused this instrument to be executed by
its duly authorized representatives and corporate seal to be affixed hereto this
day of ______ 2002.
- ------------------------ ----------------------------
Janet Brutschea Haugen David O. Aker
44