Exhibit 10.7
USCS INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
(FORMERLY, U.S. COMPUTER SERVICES DEFERRED COMPENSATION PLAN)
(JANUARY 1, 1998 RESTATEMENT)
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
1.1 "AFFILIATE" . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . 2
1.3 "Board of Directors". . . . . . . . . . . . . . . . . . 2
1.4 "Code". . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 "Committee" . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Company" . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Compensation". . . . . . . . . . . . . . . . . . . . . 2
1.8 "Compensation Deferrals". . . . . . . . . . . . . . . . 3
1.9 "Disability" or "Disabled". . . . . . . . . . . . . . . 3
1.10 "Eligible Employee" . . . . . . . . . . . . . . . . . . 3
1.11 "Employers" . . . . . . . . . . . . . . . . . . . . . . 3
1.12 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 "Participant" . . . . . . . . . . . . . . . . . . . . . 4
1.14 "Participant's Account" or "Account". . . . . . . . . . 4
1.15 "Plan". . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 "Plan Year" . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2 PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . 4
2.1 Participation . . . . . . . . . . . . . . . . . . . . . 4
2.1.1 Initial Elections by Current Employees . . . . . 4
2.1.2 Initial Elections by New Eligible Employees. . . 5
2.1.3 Elections for Subsequent Plan Years. . . . . . . 5
2.1.4 No Election Changes During Plan Year . . . . . . 5
2.1.5 Specific Timing and Method of Election . . . . . 6
2.2 Hardship Suspension of Participation. . . . . . . . . . 6
2.3 Termination of Participation. . . . . . . . . . . . . . 7
SECTION 3 COMPENSATION DEFERRAL ELECTIONS. . . . . . . . . . . . . 7
3.1 Compensation Deferrals. . . . . . . . . . . . . . . . . 7
3.2 Crediting of Compensation Deferrals . . . . . . . . . .
3.3 Deemed Investment Return on Accounts. . . . . . . . . . 8
3.4 Form of Payment . . . . . . . . . . . . . . . . . . . . 8
3.5 Normal Time for Payment . . . . . . . . . . . . . . . . 9
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3.6 In-Service Withdrawals. . . . . . . . . . . . . . . . . 9
SECTION 4 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Participants' Accounts. . . . . . . . . . . . . . . . . 10
4.2 Participants Remain Unsecured Creditors . . . . . . . . 10
4.3 Accounting Methods. . . . . . . . . . . . . . . . . . . 10
4.4 Reports . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . 10
5.1 Normal Time for Distribution. . . . . . . . . . . . . . 10
5.1.1 Termination Date . . . . . . . . . . . . . . . . 11
5.1.2 Rules for Installment Payments . . . . . . . . . 11
5.1.3 Special Rule for Disability. . . . . . . . . . . 11
5.2 Death of the Participant. . . . . . . . . . . . . . . . 12
5.3 Beneficiary Designations. . . . . . . . . . . . . . . . 12
5.3.1 Changes. . . . . . . . . . . . . . . . . . . . . 12
5.3.2 Failed Designations. . . . . . . . . . . . . . . 12
5.4 Financial Hardship. . . . . . . . . . . . . . . . . . . 12
5.5 Payments to Incompetents. . . . . . . . . . . . . . . . 13
5.6 Undistributable Accounts. . . . . . . . . . . . . . . . 13
5.7 Committee Discretion. . . . . . . . . . . . . . . . . . 14
SECTION 6 PARTICIPANT'S INTEREST IN ACCOUNT. . . . . . . . . . . . 14
6.1 Compensation Deferral Contributions . . . . . . . . . . 14
SECTION 7 ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . 14
7.1 Plan Administrator. . . . . . . . . . . . . . . . . . . 14
7.2 Committee . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Actions by Committee. . . . . . . . . . . . . . . . . . 14
7.4 Powers of Committee . . . . . . . . . . . . . . . . . . 15
7.5 Decisions of Committee. . . . . . . . . . . . . . . . . 16
7.6 Administrative Expenses . . . . . . . . . . . . . . . . 16
7.7 Eligibility to Participate. . . . . . . . . . . . . . . 17
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . 17
SECTION 8 FUNDING.17
8.1 Unfunded Plan . . . . . . . . . . . . . . . . . . . . . 17
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SECTION 9 MODIFICATION OR TERMINATION OF PLAN. . . . . . . . . . . 17
9.1 Employers' Obligations Limited. . . . . . . . . . . . . 17
9.2 Right to Amend or Terminate . . . . . . . . . . . . . . 18
9.3 Disposition of Affiliates . . . . . . . . . . . . . . . 18
9.4 Effect of Termination . . . . . . . . . . . . . . . . . 18
SECTION 10 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 19
10.1 Participation by Affiliates . . . . . . . . . . . . . . 19
10.2 Inalienability. . . . . . . . . . . . . . . . . . . . . 19
10.3 Rights and Duties . . . . . . . . . . . . . . . . . . . 20
10.4 No Enlargement of Employment Rights . . . . . . . . . . 20
10.5 Apportionment of Costs and Duties . . . . . . . . . . . 20
10.6 Compensation Deferrals Not Counted Under Other
Employee Benefit Plans. . . . . . . . . . . . . . . . . 20
10.7 Applicable Law. . . . . . . . . . . . . . . . . . . . . 20
10.8 Severability. . . . . . . . . . . . . . . . . . . . . . 21
10.9 Captions. . . . . . . . . . . . . . . . . . . . . . . . 21
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USCS INTERNATIONAL, INC.
DEFERRED COMPENSATION PLAN
(FORMERLY, U.S. COMPUTER SERVICES DEFERRED COMPENSATION PLAN)
(JANUARY 1, 1998 RESTATEMENT)
USCS International, Inc. (formerly, U.S. Computer Services), a
Delaware corporation, having established the USCS International, Inc.
Deferred Compensation Plan (formerly, the U.S. Computer Services Deferred
Compensation Plan), effective September 1, 1994, for the benefit of a select
group of management employees of the Company and its participating
Affiliates, in order to provide such employees with certain deferred
compensation benefits, hereby amends and restates the Plan effective as of
January 1, 1998. The Plan is an unfunded deferred compensation plan that is
intended to qualify for the exemptions provided in sections 201, 301, and 401
of ERISA.
SECTION 1
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
1.1 "AFFILIATE" shall mean (a) the Company, and (b) each corporation,
trade or business which is, together with any Employer, a member of a
controlled group of corporations or an affiliated service group or under
common control (within the meaning of section 414(b), (c) or (m) of the
Code), but only for the period during which such other entity is so
affiliated with any Employer.
1.2 "BENEFICIARY" shall mean the person or persons entitled to receive
the balance credited to a Participant's Account under the Plan upon the death
of the Participant, as provided in Section 5.4.
1.3 "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
1.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
1.5 "COMMITTEE" shall mean the committee appointed by the Board of
Directors to administer the Plan. The members of the Committee shall serve
at the pleasure of the Board of Directors.
1.6 "COMPANY" shall mean USCS International, Inc. (formerly, U.S.
Computer Services), a Delaware corporation.
1.7 "COMPENSATION" shall mean the base salary (including car allowance)
of a Participant, but reduced by welfare plan contributions and deductions,
elected deferrals and deductions (e.g., 401(k) contributions, 401(k) loan
repayments, Section 125 flexible benefits deductions, and Company cafeteria
charges), and any other amounts required to be withheld for taxes or
otherwise (e.g., pursuant to an order for garnishment). A Participant's
Compensation shall not include any other type of remuneration.
2
1.8 "COMPENSATION DEFERRALS" shall mean the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections
made in accordance with Section 2.1.
1.9 "DISABILITY" OR "DISABLED" shall mean a physical or mental
impairment that (a) renders a Participant incapable of performing the
functions of his or her position for a period of two years, and (b)
thereafter, based on factors such as the Participant's education and
training, renders him or her incapable of performing work in any capacity. A
Participant shall be Disabled only if he or she is determined to be disabled
by a third party or parties designated from time to time by the Committee.
1.10 "ELIGIBLE EMPLOYEE" shall mean an employee of an Employer who holds
the title of Director or above. Notwithstanding the preceding, the Board of
Directors, in its sole discretion, may (a) change the required title for
purposes of determining eligibility for the Plan, and (b) determine that one
or more otherwise eligible employees of an Employer shall not be Eligible
Employees.
1.11 "EMPLOYERS" shall mean the Company and each of its Affiliates that
adopts the Plan with the approval of the Board of Directors. With respect to
an individual Participant, "Employer" shall mean the Company or its Affiliate
that (a) directly employs such Participant, and (b) has adopted the Plan
(with the approval of the Board of Directors).
1.12 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. Reference to a specific section of ERISA shall include
such section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding
such section.
3
1.13 "PARTICIPANT" shall mean an Eligible Employee who (a) has become a
Participant in the Plan pursuant to Section 2.1 and (b) has not ceased to be
a Participant pursuant to Section 2.3.
1.14 "PARTICIPANT'S ACCOUNT" OR "ACCOUNT" shall mean as to any
Participant the separate account maintained on the books of the Employers in
order to reflect his or her interest under the Plan.
1.15 "PLAN" shall mean the USCS International, Inc. Deferred
Compensation Plan (formerly, the U.S. Computer Services Deferred Compensation
Plan), as set forth in this instrument and as hereafter amended from time to
time.
1.16 "PLAN YEAR" shall mean the calendar year. Notwithstanding the
preceding, the 1994 Plan Year shall be the period September 1, 1994 (the
effective date of the Plan), through December 31, 1994.
SECTION 2
PARTICIPATION
2.1 PARTICIPATION. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.
2.1.1 INITIAL ELECTIONS BY CURRENT EMPLOYEES. An Eligible
Employee may elect to become a Participant in the Plan by electing, no later
than September 1, 1994, to make Compensation Deferrals under the Plan. An
election under this Section 2.1.1 to make Compensation Deferrals shall be
effective for the Plan Year beginning September 1, 1994, and for the Plan
Year beginning January 1, 1995.
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2.1.2 INITIAL ELECTIONS BY NEW ELIGIBLE EMPLOYEES. Each
employee who becomes an Eligible Employee after January 1, 1998 (whether by
hire or promotion) may elect to become a Participant in the Plan by electing,
within 30 days of the date of his or her hire or promotion (as the case may
be), to make Compensation Deferrals under the Plan. An election under this
Section 2.1.2 to make Compensation Deferrals shall be effective (a) as of the
first day of the first calendar month which begins after the Eligible
Employee has been such for 30 consecutive days, and (b) for the immediately
following Plan Year. Notwithstanding clause (b) of the preceding sentence,
prior to the beginning of such immediately following Plan Year, and pursuant
to such procedures as the Committee may specify from time to time, the
Eligible Employee may increase or decrease the amount of his or her deferral
for such Plan Year, provided that the Participant may not decrease the amount
of his or her deferral below the $5,000 minimum required by Section 3.1 (unless
the Participant ceases making Compensation Deferrals under the plan).
2.1.3 ELECTIONS FOR SUBSEQUENT PLAN YEARS. An Eligible
Employee may elect to become a Participant (or to continue or reinstate his
or her active participation) in the Plan for any subsequent Plan Year by
electing, no later than December 31 of the preceding Plan Year, to make
Compensation Deferrals under the Plan. An election under this Section 2.1.3
to make Compensation Deferrals shall be effective only for the Plan Year with
respect to which the election is made.
2.1.4 NO ELECTION CHANGES DURING PLAN YEAR. A Participant
shall not be permitted to change or revoke his or her election for a Plan
Year after the beginning of such Plan Year, except that (a) pursuant to such
procedures as the Committee may specify from time to time, a Participant may
increase his or her deferrals for the remainder of the Plan Year (but only
5
with respect to Compensation that is not yet earned), (b) to the limited
extent provided in Sections 2.1.2 and 2.2, a Participant may change or revoke
his or her election, and (c) if a Participant's job changes to a position
which is ineligible for the Plan, his or her deferrals under the Plan shall
cease.
2.1.5 SPECIFIC TIMING AND METHOD OF ELECTION. Notwithstanding
any contrary provision of this Section 2.1, the Committee, in its sole
discretion, shall determine the manner and deadlines for Participants to make
Compensation Deferral elections. The deadlines prescribed by the Committee
may be earlier than the deadlines specified in Sections 2.1.1, 2.1.2, and
2.1.3, but shall not be later than the deadlines prescribed in such Sections.
2.2 HARDSHIP SUSPENSION OF PARTICIPATION. In the event that a
Participant incurs a "financial hardship" (as defined in this Section 2.2),
the Committee, in its sole discretion, may suspend the Participant's
Compensation Deferrals for the remainder of the Plan Year. However, an
election to make Compensation Deferrals under Section 2.1 shall be
irrevocable as to amounts deferred as of the effective date of any suspension
in accordance with this Section 2.2. For purposes of the Plan, a "financial
hardship" shall mean a severe financial emergency which is caused by a sudden
and unexpected accident, illness or other event beyond the control of the
Participant which would, if no suspension of deferrals (or accelerated
distribution under Section 5.5) were made, result in severe financial burden
to the Participant or a member of his or her immediate family. Also, a
financial hardship does not exist to the extent that the hardship may be
relieved by (a) reimbursement or compensation by insurance, (b) liquidation
of the Participant's other assets (to the extent such liquidation would not
itself cause severe financial hardship), or
6
(c) any loan available to the Participant (to the extent the payments on such
loan would not themselves cause severe financial hardship).
2.3 TERMINATION OF PARTICIPATION. An Eligible Employee who has become
a Participant shall remain a Participant until his or her entire vested
Account balance is distributed. However, an Eligible Employee who has become
a Participant may or may not be an active Participant making Compensation
Deferrals for a particular Plan Year, depending upon whether he or she has
elected to make Compensation Deferrals for such Plan Year.
SECTION 3
COMPENSATION DEFERRAL ELECTIONS
3.1 COMPENSATION DEFERRALS. At the times and in the manner prescribed
in Section 2.1, each Eligible Employee may elect to defer portions of his or
her Compensation and to have the amounts of such deferrals credited to his or
her Account under the Plan on the books of the Employer. For each Plan Year,
an Eligible Employee may elect to defer an amount equal to any specific
dollar amount (in whole dollar increments) of the Participant's Compensation,
provided that the percentage or dollar amount elected by the Participant
shall result in an expected deferral of not less than $5,000 of his or her
Compensation. Notwithstanding the preceding sentence, the minimum deferral
amount shall, in such manner as the Committee may determine from time to
time, be prorated (a) for the Plan Year beginning September 1, 1994, and (b)
with respect to each Participant who becomes a Participant under Section
2.1.2, for his or her first year of active participation in the Plan. Also,
notwithstanding any contrary provision of the Plan, the Committee may reduce
a Participant's Compensation Deferrals to the extent necessary to satisfy
applicable withholding tax requirements and employee welfare plan
contributions.
7
3.2 CREDITING OF COMPENSATION DEFERRALS. The amounts deferred pursuant
to Section 3.1 shall reduce the Participant's Compensation during the Plan
Year and shall be credited to the Participant's Account as of the date on
which the amounts (but for the deferral) would have been paid to the
Participant. For each Plan Year, the exact dollar amount to be deferred from
each Compensation payment shall be determined by the Committee under such
formulae as it shall adopt from time to time.
3.3 DEEMED INVESTMENT RETURN ON ACCOUNTS. Although no assets will be
segregated or otherwise set aside with respect to a Participant's Account,
effective January 1, 1998, the amount that is ultimately payable to the
Participant with respect to his or her Account shall be determined as if such
Account had been invested in accordance with the Participant's deemed
investment elections (provided that such elections must comply with the
procedures established by the Committee pursuant to this Section 3.3). The
Committee, in its sole discretion shall adopt (and may modify from time to
time) such rules and procedures as it deems necessary or appropriate to
implement and or re-direct the deemed investment of the Participants'
Accounts. Such procedures generally shall provide that a Participant shall
be entitled to make deemed investment elections as to the deemed investment
of his or her Account subject to any limitations determined by the Committee.
Such procedures may differ among Participants or classes of Participants, as
determined by the Committee in its discretion.
3.4 FORM OF PAYMENT. Each Participant shall indicate on his or her
first deferral election made pursuant to Section 3.1 the form of payment for
his or her Account. Effective January 1, 1998, a Participant may elect (a) a
lump sum payment or (b) five annual installment payments. Subject to the
following sentence, each Participant who elected payments in ten annual
installment payments or fifteen annual installment payments with respect to
Compensation Deferrals made prior to January 1, 1998 shall automatically have
a lump sum
8
payment as the form of payment for his or her Account, unless such
Participant elected payment in five annual installment payments. On any
subsequent deferral election (i.e., an election for a subsequent Plan Year),
each Participant may choose a different form of payment (from the above
choices); provided, however, that a Participant may not choose a more rapid
form of payment than has previously been elected. A Participant's last
effective election shall apply to all amounts credited to the Participant's
Account, without regard to the Plan Year in which such amounts are credited
(except as provided in Section 3.6).
3.5 NORMAL TIME FOR PAYMENT. Each Participant's Account shall be
distributed at the time(s) provided in Section 5, except as provided in
Section 3.6.
3.6 IN-SERVICE WITHDRAWALS. Notwithstanding any contrary provision of
the Plan, and pursuant to such procedures as the Committee may adopt from
time to time, a Participant may indicate on his or her deferral election
(made pursuant to Section 3.1) the time for payment of all or a portion of
the Compensation Deferrals to be made for the specific Plan Year covered by
such deferral election. Payment of such deferrals (as increased or decreased
by any deemed earnings or losses) will be made in four equal installments,
commencing on the date elected by the Participant. A Participant may elect
to commence receiving payment of such deferrals after any whole number of
calendar years (not less than five) specified by the Participant in his or
her deferral election. A Participant's election as to the time for
commencement of payment shall be irrevocable and shall apply to the elected
portion of the amounts credited to the Participant's Account (as increased or
decreased by any deemed earnings or losses) during the Plan Year with respect
to which the election is made, provided that if the Participant terminates
employment prior to the final scheduled payment under this Section 3.6,
distribution of the entire remaining balance credited to his or her Account
shall instead be made in the time and manner provided in Section 5.
9
SECTION 4
ACCOUNTING
4.1 PARTICIPANTS' ACCOUNTS. At the direction of the Committee, there
shall be established and maintained on the books of the Employer a separate
Account for each Participant to which shall be credited all Compensation
Deferrals made by the Participant, and deemed investment, gains or losses on
such Compensation Deferrals.
4.2 PARTICIPANTS REMAIN UNSECURED CREDITORS. All amounts credited to a
Participant's Account under the Plan shall continue for all purposes to be a
part of the general assets of the Employer. Each Participant's interest in
the Plan shall make him or her only a general, unsecured creditor of the
Employer.
4.3 ACCOUNTING METHODS. The accounting methods or formulae to be used
under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting of deemed returns, gains and losses,
shall be determined by the Committee, in its sole discretion. The accounting
methods or formulae selected by the Committee may be revised from time to
time.
4.4 REPORTS. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her
interest in the Plan, at least annually.
SECTION 5
DISTRIBUTIONS
5.1 NORMAL TIME FOR DISTRIBUTION. Subject to Sections 3.6, 5.2, and
5.3, distribution of the balance credited to a Participant's Account shall
commence no later than January 15 of the Plan Year following the
Participant's "termination date" (as defined in Section 5.1.1).
10
5.1.1 TERMINATION DATE. A Participant's "termination date"
means the date of the Participant's termination of employment with all
Employers and Affiliates for any reason, except as provided in the following
sentence. However, if (a) the Participant's termination of employment with
all Employers and Affiliates occurs on account of the sale of the stock or
assets of the Affiliate employing the Participant, or due to a spin-off,
split-up or other similar change in the capital structure of the Affiliate,
and (b) the Participant continues in employment with the new non-Affiliate
(or its successor), then the Participant's "termination date" means the date
of the Participant's termination of employment for any reason from such
non-Affiliate.
5.1.2 RULES FOR INSTALLMENT PAYMENTS. If, pursuant to Section
3.4, the Participant elected to receive five annual installment payments, his
or her first installment shall be equal to 1/5th of the balance then credited
to his or her Account. Each subsequent annual installment shall be paid to
the Participant as near as administratively practicable to each anniversary
of the first installment payment. The amount of each subsequent installment
shall be equal to the balance then credited to the Participant's Account,
divided by the number of installments remaining to be made. While a
Participant's Account is in installment payout status, the unpaid balance
credited to the Participant's Account shall continue to be credited with
deemed investment returns under Section 3.3.
5.1.3 SPECIAL RULE FOR DISABILITY. If a Participant becomes
Disabled prior to his or her termination of employment with all Employers and
Affiliates, the balance then credited to his or her Account shall be
distributed to him or her at the time specified in Section 5 and in the form
and manner elected under Section 3.4.
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5.2 DEATH OF THE PARTICIPANT. If a Participant dies, the balance then
credited to his or her Account shall be distributed to his or her Beneficiary
or Beneficiaries, in the same form and manner elected by the Participant
under Sections 3.4 and 3.6.
5.3 BENEFICIARY DESIGNATIONS. Each Participant may, pursuant to such
procedures as the Committee may specify, designate one or more Beneficiaries.
Primary and secondary Beneficiaries are permitted.
5.3.1 CHANGES. A Participant may designate different
Beneficiaries (or may revoke a prior Beneficiary designation) at any time by
delivering a new designation (or revocation of a prior designation) in like
manner. Any designation or revocation shall be effective only if it is
received by the Committee. However, when so received, the designation or
revocation shall be effective as of the date the notice is executed (whether
or not the Participant still is living), but without prejudice to the
Committee on account of any payment made before the change is recorded. The
last effective designation received by the Committee shall supersede all
prior designations.
5.3.2 FAILED DESIGNATIONS. If a Participant dies without
having effectively designated a Beneficiary, or if no Beneficiary (primary or
secondary) survives the Participant, the Participant's Account shall be
payable to his or her surviving spouse, or, if the Participant is not
survived by his or her spouse, the Account shall be paid to his or her estate.
5.4 FINANCIAL HARDSHIP. In the event that a Participant incurs a
"financial hardship" (as defined in Section 2.2), the Committee, in its sole
discretion and notwithstanding any contrary provision of the Plan, may
determine that all or part of the Participant's Account shall
12
be paid to him or her immediately; provided, however, that the amount paid to
the Participant pursuant to this Section 5.5 shall be limited to the amount
reasonably necessary to alleviate the Participant's hardship. Also, payment
under this Section 5.5 may not be made to the extent that the hardship may be
relieved by suspension of the Participant's Compensation Deferrals in
accordance with Section 2.2.
5.5 PAYMENTS TO INCOMPETENTS. If any individual to whom a benefit is
payable under the Plan is a minor or legally incompetent, the Committee shall
determine whether payment shall be made directly to the individual, any
person acting as his or her custodian or legal guardian under the California
Uniform Transfers to Minors Act, his or her legal representative or a near
relative, or directly for his or her support, maintenance or education.
5.6 UNDISTRIBUTABLE ACCOUNTS. Each Participant and (in the event of
death) his or her Beneficiary shall keep the Committee advised of his or her
current address. If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant's Account is payable under this Section 5,
the Participant's Account shall continue to be credited with deemed
investment returns in accordance with Section 3.3. Accounts that, in
accordance with the preceding sentence, have been undistributable for a
period of 35 months shall be forfeited as of the end of the 35th month. If a
Participant whose Account was forfeited under this Section 5.7 (or his or her
Beneficiary) files a claim for distribution of the Account after the date
that it was forfeited, and if the Committee determines that such claim is
valid, then the forfeited balance shall be paid by the Employer in a lump sum
cash payment as soon as practicable thereafter.
13
5.7 COMMITTEE DISCRETION. Within the specific time periods described
in this Section 5, the Committee shall have sole discretion to determine the
specific timing of the payment of any Account balance under the Plan.
SECTION 6
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 COMPENSATION DEFERRAL CONTRIBUTIONS. Subject to Sections 8.1
(relating to creditor status) and 9.2 (relating to amendment and/or
termination of the Plan), a Participant's interest in the balance credited to
his or her Account at all times shall be 100% vested and nonforfeitable.
SECTION 7
ADMINISTRATION OF THE PLAN
7.1 PLAN ADMINISTRATOR. The Company is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
7.2 COMMITTEE. The Plan shall be administered by the Committee. The
Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any
time by notice in writing mailed or delivered to the Secretary of the Company.
7.3 ACTIONS BY COMMITTEE. Each decision of a majority of the members
of the Committee then in office shall constitute the final and binding act of
the Committee. The
14
Committee may act with or without a meeting being called or held and shall
keep minutes of all meetings held and a record of all actions taken by
written consent.
7.4 POWERS OF COMMITTEE. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the
Plan and to control its operation in accordance with its terms, including,
but not by way of limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or
any amendment thereto;
(b) To determine any and all considerations affecting the eligibility
of any employee to become a Participant or remain a Participant in the
Plan;
(c) To cause one or more separate Accounts to be maintained for each
Participant;
(d) To cause Compensation Deferrals and deemed gains or losses to be
credited to Participants' Accounts;
(e) To establish and revise an accounting method or formula for the
Plan, as provided in Section 4.3;
(f) To determine the manner and form in which any distribution is to
be made under the Plan;
(g) To determine the status and rights of Participants and their
spouses, Beneficiaries or estates;
15
(h) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or appropriate
in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the performance of its
powers and duties and for the administration of the Plan;
(j) To arrange for annual distribution to each Participant of a
statement of benefits accrued under the Plan;
(k) To publish a claims and appeal procedure satisfying the minimum
standards of section 503 of ERISA pursuant to which individuals or estates
may claim Plan benefits and appeal denials of such claims;
(l) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf of
the Committee one or more of the functions of the Committee under the Plan;
and
(m) to decide all issues and questions regarding Account balances,
and the time, form, manner and amount of distributions to Participants.
7.5 DECISIONS OF COMMITTEE. All actions, interpretations, and
decisions of the Committee shall be conclusive and binding on all persons,
and shall be given the maximum possible deference allowed by law.
7.6 ADMINISTRATIVE EXPENSES. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal
fees and expenses, shall be paid and borne by the Employers.
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7.7 ELIGIBILITY TO PARTICIPATE. No member of the Committee who is also
an employee of an Employer shall be excluded from participating in the Plan
if otherwise eligible, but he or she shall not be entitled, as a member of
the Committee, to act or pass upon any matters pertaining specifically to his
or her own Account under the Plan.
7.8 INDEMNIFICATION. Each of the Employers shall, and hereby does,
indemnify and hold harmless the members of the Committee, from and against
any and all losses, claims, damages or liabilities (including attorneys' fees
and amounts paid, with the approval of the Board of Directors, in settlement
of any claim) arising out of or resulting from the implementation of a duty,
act or decision with respect to the Plan, so long as such duty, act or
decision does not involve gross negligence or willful misconduct on the part
of any such individual.
SECTION 8
FUNDING
8.1 UNFUNDED PLAN. All amounts credited to a Participant's Account
under the Plan shall continue for all purposes to be a part of the general
assets of the Employer. The interest of the Participant in his or her
Account, including his or her right to distribution thereof, shall be an
unsecured claim against the general assets of the Employer. Nothing
contained in the Plan shall give any Participant or beneficiary any interest
in or claim against any specific assets of the Employer.
SECTION 9
MODIFICATION OR TERMINATION OF PLAN
9.1 EMPLOYERS' OBLIGATIONS LIMITED. The Employers intend to continue
the Plan indefinitely, and to maintain each Participant's Account until it is
scheduled to be paid to him or
17
her in accordance with the provisions of the Plan. However, the Plan is
voluntary on the part of the Employers, and the Employers do not guarantee to
continue the Plan. The Company at any time may, by amendment of the Plan,
suspend Compensation Deferrals or may discontinue Compensation Deferrals,
with or without cause. Complete discontinuance of all Compensation Deferrals
shall be deemed a termination of the Plan.
9.2 RIGHT TO AMEND OR TERMINATE. The Board of Directors reserves the
right to alter, amend or terminate the Plan, or any part thereof, in such
manner as it may determine, at any time and for any reason.
9.3 DISPOSITION OF AFFILIATES. Notwithstanding any contrary provision
of the Plan, in the event that one or more Participants transfer employment
to a non-Affiliate pursuant to an agreement regarding the sale of the stock
or assets of an Affiliate, or a spin-off, split-up or other change in the
capital structure of an Affiliate (each, an "affected Participant"), the
Board of Directors, in its sole discretion, may determine that (a) the
liability for amounts credited to an affected Participant's Account shall be
assigned or transferred to such non-Affiliate (or an affiliate thereof), and
upon acceptance by the non-Affiliate (or affiliate thereof) of such
liability, no Employer shall have any liability under the Plan to such
affected Participant, or (b) the amounts credited to an affected
Participant's Account shall be distributed to him or her (in a single lump
sum) no later than January 15 of the Plan Year following the affected
Participant's termination of employment with all Employers and Affiliates.
9.4 EFFECT OF TERMINATION. If the Plan is terminated pursuant to this
Section 9, the balances credited to the Accounts of the affected Participants
shall be distributed to them at the
18
time and in the manner set forth in Section 5; provided, however, that the
Committee, in its sole discretion, may authorize accelerated distribution of
Participants' Accounts as of any earlier date.
SECTION 10
GENERAL PROVISIONS
10.1 PARTICIPATION BY AFFILIATES. One or more Affiliates of the Company
may become participating Employers by adopting the Plan and obtaining
approval for such adoption from the Board of Directors. By adopting the
Plan, an Affiliate shall be deemed to agree to all of its terms, including
(but not limited to) the provisions granting exclusive authority (a) to the
Board of Directors to amend the Plan, and (b) to the Committee to administer
and interpret the Plan. Any Affiliate may terminate its participation in the
Plan at any time. The liabilities incurred under the Plan to the
Participants employed by each Employer shall be solely the liabilities of
that Employer, and no other Employer shall be liable for benefits accrued by
a Participant during any period when he or she was not employed by such
Employer. A list of participating Employers, and the effective dates of
their participation, is attached hereto as AppendixA.
10.2 INALIENABILITY. In no event may either a Participant, a former
Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or
interest under the Plan; and such rights and interests shall not at any time
be subject to the claims of creditors nor be liable to attachment, execution
or other legal process. Accordingly, for example, a Participant's interest
in the Plan is not transferable pursuant to a domestic relations order.
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10.3 RIGHTS AND DUTIES. Neither the Employers nor the Committee shall
be subject to any liability or duty under the Plan except as expressly
provided in the Plan, or for any action taken, omitted or suffered in good
faith.
10.4 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. Neither the establishment or
maintenance of the Plan, the making of any Compensation Deferrals nor any
action of any Employer or the Committee, shall be held or construed to confer
upon any individual any right to be continued as an employee of the Employer
nor, upon dismissal, any right or interest in any specific assets of the
Employers other than as provided in the Plan. Each Employer expressly
reserves the right to discharge any employee at any time.
10.5 APPORTIONMENT OF COSTS AND DUTIES. All acts required of the
Employers under the Plan may be performed by the Company for itself and its
Affiliates, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employer who is thereunto duly authorized by the board of directors of
the Employer.
10.6 COMPENSATION DEFERRALS NOT COUNTED UNDER OTHER EMPLOYEE BENEFIT
PLANS. Compensation Deferrals under the Plan will not be considered for
purposes of contributions or benefits under any other employee benefit plan
sponsored by the Employers.
10.7 APPLICABLE LAW. The provisions of the Plan shall be construed,
administered and enforced in accordance with ERISA, and to the extent not
preempted by ERISA, with the laws of the State of California.
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10.8 SEVERABILITY. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and in lieu of each provision which is held invalid
or unenforceable, there shall be added as part of the Plan a provision that
shall be as similar in terms to such invalid or unenforceable provision as
may be possible and be valid, legal, and enforceable.
10.9 CAPTIONS. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or
intent of the Plan nor in any way shall affect the construction of any
provision of the Plan.
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EXECUTION
IN WITNESS WHEREOF, USCS International, Inc. (formerly, U.S.
Computer Services), by its duly authorized officer, has executed this Plan on
the date indicated below.
USCS INTERNATIONAL, INC.
Dated: March 20, 1998 By: James C. Castle
------------------------- -----------------------------------
Title: Chairman and CEO
/s/ James C. Castle
-----------------------------------
Signature
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APPENDIX A
List of Participating Employers
Employer Effective Date
of Participation
------------------------- -----------------------
1. USCS International, Inc. September 1, 1994
(formerly, U.S. Computer
Services)
A-1