Document:

exv10w15

 

Exhibit 10.15

AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

EFFECTIVE AS OF JULY 1, 2000

 

 

AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE
	 	PAGE

	ARTICLE I
	 	DEFINITIONS	 	 	1	 
	 
	 	1.1	 	Account	 	 	1	 
	 
	 	1.2	 	Administrative Committee	 	 	1	 
	 
	 	1.3	 	Base Pay	 	 	1	 
	 
	 	1.4	 	Beneficiary	 	 	2	 
	 
	 	1.5	 	Board	 	 	2	 
	 
	 	1.6	 	Bonus	 	 	2	 
	 
	 	1.7	 	Business Day	 	 	2	 
	 
	 	1.8	 	Code	 	 	2	 
	 
	 	1.9	 	Company	 	 	2	 
	 
	 	1.10	 	Compensation	 	 	2	 
	 
	 	1.11	 	Controlled Group	 	 	2	 
	 
	 	1.12	 	Controlling Company	 	 	2	 
	 
	 	1.13	 	Deferral Election	 	 	2	 
	 
	 	1.14	 	Deferred Compensation	 	 	2	 
	 
	 	1.15	 	Effective Date	 	 	2	 
	 
	 	1.16	 	Eligible Employee	 	 	2	 
	 
	 	1.17	 	Entry Date	 	 	3	 
	 
	 	1.18	 	ERISA	 	 	3	 
	 
	 	1.19	 	Financial Hardship	 	 	3	 
	 
	 	1.20	 	401(k) Plan	 	 	3	 
	 
	 	1.21	 	Investment Return	 	 	4	 
	 
	 	1.22	 	Matching Contributions	 	 	4	 
	 
	 	1.23	 	Participant	 	 	4	 
	 
	 	1.24	 	Plan	 	 	4	 
	 
	 	1.25	 	Plan Year	 	 	4	 
	 
	 	1.26	 	Retirement	 	 	4	 
	 
	 	1.27	 	Salary	 	 	4	 
	 
	 	1.28	 	Surviving Spouse	 	 	4	 
	 
	 	1.29	 	Trust or Trust Agreement	 	 	4	 
	 
	 	1.30	 	Trustee	 	 	4	 
	 
	 	1.31	 	Trust Fund	 	 	4	 
	 
	 	1.32	 	Valuation Date	 	 	4	 

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AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

TABLE OF CONTENTS (CONTINUED)

	 	 	 	 	 	 	 	 	 
	ARTICLE
	 	PAGE

	ARTICLE II	 	ELIGIBILITY AND PARTICIPATION	 	 	5	 
	 
	 	2.1	 	Eligibility	 	 	5	 
	 
	 	2.2	 	Procedure for Admission	 	 	5	 
	 
	 	2.3	 	Cessation of Eligibility	 	 	5	 
	ARTICLE III	 	PARTICIPANTS’ ACCOUNTS: DEFERRALS AND CREDITING	 	6	 
	 
	 	3.1	 	Participants’ Accounts	 	 	6	 
	 
	 	3.2	 	Deferral Elections	 	 	6	 
	 
	 	3.3	 	Crediting of Matching Contributions	 	 	7	 
	 
	 	3.4	 	Debiting of Distributions	 	 	8	 
	 
	 	3.5	 	Crediting of Investment Return	 	 	8	 
	 
	 	3.6	 	Vesting	 	 	8	 
	 
	 	3.7	 	Notice to Participants of Account Balances	 	 	9	 
	 
	 	3.8	 	Good Faith Valuation Binding	 	 	9	 
	 
	 	3.9	 	Errors and Omissions in Accounts	 	 	9	 
	ARTICLE IV	 	PARTICIPANT DIRECTION OF ACCOUNT BALANCES	 	10	 
	 
	 	4.1	 	Selection of Investment Funds	 	 	10	 
	 
	 	4.2	 	Participant Direction of Deemed Investments	 	 	10	 
	 
	 	4.3	 	Participation Direction Not Binding	 	 	11	 
	ARTICLE V	 	PAYMENT OF ACCOUNT BALANCES	 	 	12	 
	 
	 	5.1	 	Benefit Payments upon Termination of Service for Reasons Other than Death	 	12	 
	 
	 	5.2	 	Benefits Payable Upon Death	 	 	12	 
	 
	 	5.3	 	Retirement Benefits	 	 	12	 
	 
	 	5.4	 	In Service Distributions	 	 	13	 
	 
	 	5.5	 	Accelerated Distributions	 	 	14	 
	 
	 	5.6	 	Hardship Distributions	 	 	14	 
	 
	 	5.7	 	Beneficiary Designation	 	 	15	 
	 
	 	5.8	 	Taxes	 	 	15	 

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AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

TABLE OF CONTENTS (CONTINUED)

	 	 	 	 	 	 	 	 	 
	ARTICLE
	 	PAGE

	ARTICLE VI	 	CLAIMS	 	 	16	 
	 
	 	6.1	 	Claims	 	 	16	 
	 
	 	6.2	 	Exhaustion of Administrative Remedies	 	 	16	 
	 
	 	6.3	 	Action for Recovery	 	 	17	 
	 
	 	6.4	 	Participant’s Responsibilities	 	 	17	 
	 
	 	6.5	 	Unclaimed Benefits	 	 	17	 
	ARTICLE VII	 	SOURCE OF FUNDS: TRUST	 	 	18	 
	 
	 	7.1	 	Source of Funds	 	 	18	 
	 
	 	7.2	 	Trust	 	 	18	 
	ARTICLE VIII	 	ADMINISTRATIVE COMMITTEE	 	 	19	 
	 
	 	8.1	 	Action	 	 	19	 
	 
	 	8.2	 	Rights and Duties	 	 	19	 
	 
	 	8.3	 	Compensation, Indemnity and Liability	 	 	20	 
	ARTICLE IX	 	AMENDMENT AND TERMINATION	 	 	21	 
	 
	 	9.1	 	Amendments	 	 	21	 
	 
	 	9.2	 	Termination of Plan	 	 	21	 
	ARTICLE X	 	MISCELLANEOUS	 	 	22	 
	 
	 	10.1	 	Taxation	 	 	22	 
	 
	 	10.2	 	Withholding	 	 	22	 
	 
	 	10.3	 	No Employment Contract	 	 	22	 
	 
	 	10.4	 	Headings	 	 	22	 
	 
	 	10.5	 	Gender and Number	 	 	22	 
	 
	 	10.6	 	Assignment of Benefits	 	 	22	 
	 
	 	10.7	 	Legally Incompetent	 	 	23	 
	 
	 	10.8	 	Governing Law	 	 	23	 
	 
	 	10.9	 	Severability	 	 	23	 
	 
	 	10.10	 	Overpayments	 	 	23	 
	 
	 	10.11	 	Entire Plan	 	 	23	 
	 	 	SIGNATURES	 	 	24	 

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AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

     Effective as of the 1st day of July, 2000, Affiliated Computer
Services, Inc. (the “Controlling Company”) hereby adopts the Affiliated
Computer Services, Inc. 401(k) Supplemental Plan (the “Plan”).

BACKGROUND AND PURPOSE

     A. GENERAL PURPOSE. The Controlling Company desires to provide its
designated key management and highly compensated employees (and those of its
affiliated companies that participate in the Plan) with an opportunity to defer
the receipt and income taxation of a portion of such employees’ annual
compensation. The purpose of the Plan is to set forth the terms and conditions
pursuant to which these deferrals may be made and to describe the nature and
extent of the employees’ rights to their deferred amounts.

     B. TYPE OF PLAN. The Plan constitutes an unfunded, nonqualified deferred
compensation plan that benefits certain designated employees who are within a
select group of key management or highly compensated employees. This Plan and
the participation in the Plan by Eligible Employees is not intended to create
and shall not be deemed to create a security which would be subject to
regulation by the United States Securities and Exchange Commission or any state
agency.

STATEMENT OF AGREEMENT

     To establish the Plan with the purposes and goals as hereinabove
described, the Controlling Company hereby sets forth the terms and provisions
as follows:

ARTICLE I

DEFINITIONS

     For purposes of the Plan, the following terms, when used with an initial
capital letter, shall have the meaning set forth below unless a different
meaning plainly is required by the context.

     1.1 ACCOUNT shall mean, with respect to a Participant or Beneficiary, the
total dollar amount or value evidenced by the last balance posted in accordance
with the terms of the Plan to the account record established for such
Participant or Beneficiary.

     1.2 ADMINISTRATIVE COMMITTEE shall mean the administrative committee of
the 401(k) Plan, or such other committee as shall be appointed by the Board of
Directors of Affiliated Computer Services, Inc., which shall act on behalf of
the Controlling Company to administer the Plan, all as provided in Article
VIII.

     1.3 BASE PAY shall mean the Participant’s regular annual salary plus
commissions.

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     1.4 BENEFICIARY shall mean, with respect to a Participant, the
person(s) designated in accordance with Section 5.6 to receive any benefits
that may be payable under the Plan upon the death of the Participant.

     1.5 BOARD shall mean the Board of Directors of the Controlling Company.

     1.6 BONUS shall mean the actual bonus paid to the Participant under the
ACS Management Bonus Plan (or comparable plan of the Company employing the
Participant).

     1.7 BUSINESS DAY shall mean each day on which national banks generally
operate and are open to the public for business.

     1.8 CODE shall mean the Internal Revenue Code of 1986, as amended, and any
succeeding federal tax provisions.

     1.9 COMPANY shall mean Affiliated Computer Services, Inc. or other member
of the Controlled Group of the Controlling Company who actually employs the
Participant.

     1.10 COMPENSATION shall mean, for a Participant for any Plan Year, such
Participant’s Base Pay plus Bonus.

     1.11 CONTROLLED GROUP shall mean all of the companies that are either (i)
members of the same controlled group of corporations (within the meaning of ode
Section 414(b)) or (ii) under common control (within the meaning of Code
Section 414(c)), with the Controlling Company.

     1.12 CONTROLLING COMPANY shall mean Affiliated Computer Services, Inc., a
Delaware corporation with its principal place of business in Dallas, Texas.

     1.13 DEFERRAL ELECTION shall mean a written election form on which a
Participant may elect to defer under the Plan a portion of his Compensation.

     1.14 DEFERRED COMPENSATION shall mean the amount of Compensation that a
Participant elects to defer under this Plan pursuant to a timely, written
Deferral Election for a given period.

     1.15 EFFECTIVE DATE shall mean July 1, 2000, the date that the Plan
initially shall be effective.

     1.16 ELIGIBLE EMPLOYEE shall mean, for a Plan Year, an individual:

          (a) Who is a member of a select group of key management or highly
compensated employees of a Company;

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          (b) Whose Salary at the date or dates the Administrative Committee makes
its determination of eligibility for such Plan Year (as described below), or
for newly hired employees, whose Salary on the date of his hire is at least
$85,000, or such higher or lower threshold as the Administrative Committee in
its sole discretion may establish from time to time; and

          (c) Who is designated and notified by the Administrative Committee as
eligible to participate in this Plan.

The Administrative Committee shall determine, from time to time and in its sole
discretion, which employees satisfy said criteria and the Administrative
Committee’s determination, whether or not accurate, shall be binding.

     1.17 ENTRY DATE shall mean the first day of every calendar quarter during
the period in which the Plan remains in effect.

     1.18 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.

     1.19 FINANCIAL HARDSHIP shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of the Participant’s dependent (as defined in Code Section
152(a)), loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. Financial Hardship shall be determined
by the Administrative Committee on the basis of the facts of each case,
including information supplied by the Participant in accordance with uniform
guidelines prescribed from time to time by the
Administrative Committee; provided, the Participant will be deemed not to have
a Financial Hardship to the extent that such hardship is or may be relieved:

          (a) Through reimbursement or compensation by insurance or otherwise;

          (b) By liquidation of the Participant’s assets, to the extent the
liquidation of assets would not itself cause severe financial hardship; or

          (c) By cessation of deferrals under the Plan.

Examples of what are not considered to be unforeseeable emergencies include the
need to send a Participant’s child to college or the desire to purchase a home.

     1.20 401(k) PLAN shall mean the Affiliated Computer Services, Inc. 401(k)
Plan, as amended from time to time, regardless of the 401(k) plan in which the
Participant actually participates.

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     1.21 INVESTMENT RETURN shall mean the amounts credited (as income, gains
or appreciation on the deemed investments provided under Article IV) or charged
(as losses or depreciation on the deemed investments provided under Article IV)
to the balances in the Participant’s Accounts pursuant to Section 3.5.

     1.22 MATCHING CONTRIBUTIONS shall mean, for each Plan Year, the amount
credited to a Participant’s Account pursuant to Section 3.3.

     1.23 PARTICIPANT shall mean any person who has been admitted to, and has
not been removed from, participation in the Plan pursuant to the provisions of
Article II.

     1.24 PLAN shall mean the Affiliated Computer Services, Inc.
401(k)Supplemental Plan, as contained herein and all amendments hereto. For tax
purposes and purposes of Title I of ERISA, the Plan is intended to be an
unfunded, nonqualified deferred compensation plan covering certain designated
employees who are within a select group of key management or highly compensated
employees.

     1.25 PLAN YEAR shall mean the 12-consecutive month period ending on
December 31 of each year. The first Plan Year shall be a short Plan Year
beginning on the Effective Date, July 1, 2000, and ending on December 31, 2000.

     1.26 RETIREMENT shall mean the termination of employment with the Company
and all other members of the Controlled Group on or after age fifty-five (55)
with five (5) or more years of service (determined in accordance with the
401(k) Plan).

     1.27 SALARY shall mean an Employee’s regular annual salary.

     1.28 SURVIVING SPOUSE shall mean, with respect to a Participant, the
person who is treated as married to such Participant under the laws of the
state in which the Participant resides. The determination of a Participant’s
Surviving Spouse shall be made as of the date of such Participant’s death.

     1.29 TRUST OR TRUST AGREEMENT shall mean a separate agreement or
agreements between the Controlling Company and the Trustee governing the
creation of the Trust Fund, if any, and any amendments thereto.

     1.30 TRUSTEE shall mean the party or parties so designated from time to
time pursuant to the terms of the Trust Agreement, if any.

     1.31 TRUST FUND shall mean the total amount of cash and other property
held by the Trustee (or any nominee thereof) at any time under the Trust
Agreement, if any.

     1.32 VALUATION DATE shall mean each Business Day.

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ARTICLE II

ELIGIBILITY AND PARTICIPATION

     2.1 ELIGIBILITY.

          (a) ANNUAL PARTICIPATION. Each individual who is an Eligible Employee for
a Plan Year as of the first day of such Plan Year shall be eligible to
participate in the Plan for the entire Plan Year. Such individual’s
participation shall become effective as of the first day of such Plan Year
(assuming he satisfies the procedures for admission described below).

          (b) INTERIM PLAN YEAR PARTICIPATION. Each newly hired employee who becomes
an Eligible Employee during a Plan Year shall be eligible to participate in the
Plan for a portion of such Plan Year. Such individual’s participation shall
become effective as of the Entry Date coinciding with or next following the
date he becomes an Eligible Employee (assuming he satisfies the procedures for
admission described below). If the newly Eligible Employee does not make a
Deferral Election prior to the first Entry Date for which he is eligible, the
newly Eligible Employee may make a Deferral Election to defer Compensation for
services to be performed subsequent to the Deferral Election within thirty (30)
days after the date the Employee first becomes an Eligible Employee.

     2.2 PROCEDURE FOR ADMISSION.

     Each Eligible Employee shall become a Participant for a Plan Year by
completing such forms and providing such data in a timely manner, as are
required by the Administrative Committee as a precondition of participation in
the Plan. Such forms and data may include, without limitation, a Deferral
Election, the Eligible Employee’s acceptance of the terms and conditions of the
Plan, and the designation of a Beneficiary to receive any benefits payable
hereunder.

     2.3 CESSATION OF ELIGIBILITY.

     The Administrative Committee may remove an employee from active
participation in the Plan if, as of any day during a Plan Year, he ceases to
satisfy the criteria that qualified him as an Eligible Employee, in which case
his deferrals under the Plan shall cease. Even if his active participation in
the Plan ends, an employee shall remain an inactive Participant in the Plan
until the earlier of (i) the date the full amount of his Account (if any) is
distributed from the Plan, or (ii) the date he again becomes an Eligible
Employee and recommences participation in the Plan. During the period of time
that an employee is an inactive Participant in the Plan his Account shall
continue to be credited with Investment Return as provided for in Section 3.5.

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ARTICLE III.

PARTICIPANTS’ ACCOUNTS: DEFERRALS AND CREDITING

     3.1 PARTICIPANTS’ ACCOUNTS.

          (a) ESTABLISHMENT OF ACCOUNTS. The Administrative Committee shall
establish and maintain, on behalf of each Participant, an Account. The Account
shall be credited with (i) the Participant’s Deferred Compensation, (ii) the
Participant’s Matching Contributions, and (iii) Investment Return attributable
to such Account.

          (b) NATURE OF CONTRIBUTIONS AND ACCOUNTS. The Deferred Compensation and
the Matching Contributions and Investment Return credited to a Participant’s
Account shall, at the Controlling Company’s election, either, (i) be
represented solely by bookkeeping entries, and no moneys or other assets shall
actually be set aside for such Participant or (ii) credited to a Trust
established pursuant to Section 7.2. The Administrative Committee or the Board
shall allocate the total liability to pay benefits under the Plan among the
Controlling Company and the members of its Controlled Group comprising the
Company in such manner and amount as the Administrative Committee or the Board
(as applicable) in its sole discretion deems appropriate. Any assets, which may
be acquired by the Controlling Company in anticipation of its obligations under
the Plan, shall be part of the general assets of the Controlling Company. The
Controlling Company’s obligation to pay benefits under the Plan constitutes a
mere promise of the Controlling Company to pay such benefits, and a Participant
or Beneficiary shall be and remain no more than an unsecured, general creditor
of the Controlling Company.

     3.2 DEFERRAL ELECTIONS.

     Each Eligible Employee who is or becomes eligible to participate in the
Plan for all or any portion of a Plan Year may elect to become an active
Participant for such Plan Year by completing and delivering to the Controlling
Company (or its designee) a Deferral Election setting forth the terms of his
election and such other forms as required by the Administrative Committee.
Subject to the terms and conditions set forth below, a Deferral Election shall
provide for the reduction of an Eligible Employee’s Compensation paid during
the Plan Year for which the Deferral Election is in effect. Each Participant
shall make a Deferral Election for each Plan Year, with such Deferral Elections
being made and effective at the times provided below. Subject to any
modifications, additions or exceptions that the Administrative Committee, in
its sole discretion, deems necessary, appropriate or helpful, the following
shall apply to such Deferral Elections:

          (a) EFFECTIVE DATE. A Participant’s initial Deferral Election with respect
to his Compensation for any Plan Year shall be effective for the first paycheck
earned after the date the Deferral Election becomes effective. To be effective,
a Participant’s initial Deferral Election must be made within the time period
prescribed by the Administrative Committee (generally, on or before the first
day of the Plan Year, or, if later, on or before the Entry Date coinciding with
or next following the date he first becomes eligible to participate in the
Plan, subject to Section 2.1).

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An Eligible Employee’s subsequent Deferral Election with respect to his
Compensation for any Plan Year must be made on or before the last day of the
Plan Year immediately preceding the Plan Year for which he desires to
participate. If an Eligible Employee fails to submit a Deferral Election in a
timely manner, he shall be deemed to have elected not to participate in the
Plan for that Plan Year. Notwithstanding the foregoing, each Eligible Employee
may make an initial Deferral Election for the Plan prior to or within the first
thirty (30) days after (i) the Effective Date of the Plan or (ii) the Entry
Date coinciding with or next following the date that the individual first
becomes an Eligible Employee, provided that the initial Deferral Election shall
be effective for the first paycheck earned after the date the Deferral Election
is received.

          (b) TERM. Each Eligible Employee’s Deferral Election for a Plan Year shall
remain in effect for all such Compensation paid during such Plan Year unless
prior to the end of such Plan Year the Participant ceases to be an active
Participant.

          (c) AMOUNT. An Eligible Employee may elect to defer his Compensation (i)
payable as Base Pay by a minimum of 1 percent and a maximum of 15 percent and
(ii) payable as Bonus by a minimum of 1 percent and a maximum of 50 percent (or
such other minimum or maximum percentage and/or amount, if any, established by
the Administrative Committee from time-to-time).

          (d) MINIMUM DEFERRAL AMOUNT. An Eligible Employee must elect to defer at
least $2,000 of Compensation each Plan Year (or such other minimum or maximum
percentage and/or amount, if any, established by the Administrative Committee
from time-to-time). If an Eligible Employee’s deferral election is projected to
result in less than an annual deferral of the minimum amount established under
this Section, the Eligible Employee’s Deferral Election shall not be given
effect and the Participant shall not be an active Participant for
such Plan Year.

          (e) CREDITING OF DEFERRED COMPENSATION. For each Plan Year that a
Participant has a Deferral Election in effect, the Administrative Committee
shall credit the amount of such Participant’s Deferred Compensation to his
Account on, or as soon as practicable after, the Valuation Date such amount
would have been paid to him but for his Deferral Election.

     3.3 CREDITING OF MATCHING CONTRIBUTIONS.

          (a) MATCH. As of each Valuation Date within the Plan Year that Deferred
Compensation is credited to the Participant’s Account (or such other date or
time as the Administrative Committee, in its sole discretion, determines from
time-to-time), a Matching Contribution attributable to such Deferred
Compensation, if any, shall also be credited to the Participant’s Account. The
Administrative Committee shall determine the amount of the Matching
Contribution, if any, to be credited to each Participant’s Account. The amount
of the Matching Contribution to be credited to a Participant, if any, shall be
an amount equal to the Matching Contribution that would have been

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credited to the Participant under the 401(k) plan in which the Participant
participates if the Participant’s Deferred Compensation payable as Base Pay had
been contributed as 401(k) contributions to such plan, but which were not
credited to such plan due to IRS limitations, provided that the Matching
Contributions credited to the Participant’s Account for the Plan Year shall not
exceed the maximum limits described in Section 3.3(b).

          (b) LIMITATIONS. Notwithstanding anything to the contrary contained
herein, Matching Contributions shall not be credited to a Participant’s Account
to the extent that doing so would cause the following limits to be exceeded:

               (1) Compensation shall not be taken into account to the extent it exceeds
the limitation of Code Section 401(a)(17)$170,000 for 2000); and

               (2) The elective deferral limitation of Code Section 402(g) ($10,500 for
2000 shall be applied).

     3.4 DEBITING OF DISTRIBUTIONS.

     As of each Valuation Date, the Administrative Committee shall debit each
Participant’s Account for any amount distributed from such Account since the
immediately preceding Valuation Date.

     3.5 CREDITING OF INVESTMENT RETURN.

          (a) INVESTMENT RETURN. The Administrative Committee shall credit to each
Participant’s Account as of each Valuation Date the amount of Investment Return
applicable thereto for the period since the immediately preceding Valuation
Date.

          (b) TIMING. Investment Return shall ordinarily be credited as of each
Valuation Date, provided the Administrative Committee may, in its sole
discretion, designate another date or dates for crediting of Investment Return.

     3.6 VESTING.

     A Participant shall at all times be fully vested in his Deferred
Compensation and the Investment Return credited to his Account with respect to
such Deferred Compensation. The Matching Contributions credited to a
Participant’s Account and the Investment Return credited with respect thereto
shall vest in accordance with the vesting schedule under the Affiliated
Computer Services, Inc. Savings Plan, two “years of service” — 50% vested;
three “years of service” — 100% vested. For purposes of determining “years of
service” for this Plan, a Participant shall be credited with the same number of
years of service as the Participant is credited with in the 401(k) plan in
which the Participant participates. Notwithstanding the foregoing, a
Participant shall become immediately 100 percent vested upon the occurrence of
any of the following: (i) death, (ii) total and permanent disability (as
defined in the ACS Long-Term Disability Plan), (iii) Retirement, or (iv) Change
of Control of the Controlling Company.

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If a Participant terminates employment with the Company and all Controlled
Group Members before becoming 100 percent fully vested, the unvested portion of
the Participant’s account shall be immediately forfeited.

A “Change of Control” shall have occurred if the Controlling Company is merged,
consolidated, or reorganized into or with another person, entity, or group of
entities under common control or if a majority of the outstanding capital stock
or all or substantially all of the assets of the Controlling Company are sold
to any other person, entity, or group of entities under common control and as a
result of such merger, consolidation, reorganization, or sale of capital stock
or assets, more than 51% of the combined voting power of the then outstanding
voting securities of the surviving person or entity immediately after such
transaction are held in the aggregate by a person, entity, or group of entities
under common control who beneficially owned less than 51% of the combined
voting power of the Company prior to such transaction.

Upon distribution of a Participant’s entire vested Account balance under
Section 5.1, any unvested amounts in the Participant’s Account shall be
immediately forfeited. Forfeitures shall be applied to pay administrative
expenses of the Plan or to reduce Matching Contributions payable to the Plan,
as determined by the Administrative Committee, in its sole discretion.

     3.7 NOTICE TO PARTICIPANTS OF ACCOUNT BALANCES.

     At least once for each Plan Year, the Administrative Committee shall cause
a written statement of a Participant’s Account balance to be distributed to the
Participant.

     3.8 GOOD FAITH VALUATION BINDING.

     In determining the value of the Accounts, the Administrative Committee
shall exercise its best judgment, and all such determinations of value (in the
absence of bad faith) shall be binding upon all Participants and their
Beneficiaries.

     3.9 ERRORS AND OMISSIONS IN ACCOUNTS.

     If an error or omission is discovered in the Account of a Participant or
in the amount of a Participant’s deferrals, the Administrative Committee, in
its sole discretion, shall cause appropriate, equitable adjustments to be made
as soon as administratively practicable following the discovery of such error
or
omission.

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ARTICLE IV

PARTICIPANT DIRECTION OF ACCOUNT BALANCES

     4.1 SELECTION OF INVESTMENT FUNDS.

     From time to time, the Administrative Committee shall select two or more
investment funds (the “Investment Funds”) for purposes of determining the
Investment Return on amounts deemed invested in accordance with the terms of
the Plan. The Administrative Committee will notify Participants in writing
prior to the beginning of each Plan Year and at such other times as the
Administrative Committee deems necessary or desirable of the Investment Funds
available under the Plan for such Plan Year. The Administrative Committee may
change, add or remove Investment Funds on a prospective basis at any time and in any manner it
deems appropriate. In the discretion of the Administrative Committee, the
Investment Funds available under the Plan for Participant direction may be
mirrored by investment funds that are actually maintained under the Trust, if
any, but shall not be required to do so. In the event that such investment
funds are maintained under the Trust, the Trustee shall invest the assets of
the Trust as directed by the Administrative Committee in accordance with the
Trust Agreement.

     4.2 PARTICIPANT DIRECTION OF DEEMED INVESTMENTS.

     Each Participant generally may direct the manner in which his Account
shall be deemed invested in and among the Investment Funds, provided, such
investment directions shall be made in accordance with the following terms:

          (a) NATURE OF PARTICIPANT DIRECTION. The selection of
Investment Funds by a Participant shall be for the sole purpose of determining
the Investment Return to be credited to his Account, and shall not be treated
or interpreted in any manner whatsoever as a requirement or direction to
actually invest assets in any Investment Fund or any other investment media.
The Plan, as an unfunded, nonqualified deferred compensation plan, at no time
shall have any
actual investment of assets relative to the benefits or Account hereunder.

          (b) INVESTMENT OF CONTRIBUTIONS. Except as otherwise provided in this
Section, each Participant may make an investment election prescribing the
percentage of his future Deferred Compensation and Matching Contributions that
will be deemed invested in each Investment Fund. An initial investment election
of a Participant shall be made as of the date the Participant commences
participation in the Plan and shall apply to all Deferred Compensation and
Matching Contributions credited to such Participant’s Account after such date.
Such Participant may make subsequent investment elections at such times as
permitted by the Administrative Committee, and such elections shall apply to
all such specified Deferred Compensation and Matching Contributions credited to
such Participant’s Account after the effective date of such election. Any
investment election timely and properly made pursuant to this subsection with
respect to future contributions shall remain effective until changed by the
Participant.

10

 

          (c) INVESTMENT OF EXISTING ACCOUNT BALANCES. Each Participant may make an
investment election, effective as of the date the Participant commences
participation in the Plan, prescribing a different percentage of his existing
Account balances that will be deemed invested in each Investment Fund. Such
Participant may make subsequent investment elections at such times as permitted
by the Administrative Committee prescribing a different percentage of
his existing Account balances that will be deemed invested in each Investment
Fund. Each such election which is timely and properly made shall remain in
effect until changed by such Participant.

          (d) PROCEDURES FOR INVESTMENT DIRECTION. Except as otherwise provided
herein, with respect to deemed investments made available under the Trust, if
any, the Administrative Committee (or its delegate) shall then relate to the
Trustee the directions of each Participant as to which deemed investments are
to be made for each Participant. The Participant’s directions, if any, shall be
in a form and manner and in the minimum increments prescribed by the
Administrative Committee. The Administrative Committee may, in its sole
discretion, permit such Participant to communicate directly with the Trustee or
his delegate to direct a change in the investment fund or funds in which his
Account is invested. The Administrative Committee may prescribe the fund in
which the Participants’ Account shall be deemed invested in the absence of a
direction by any such Participant.

          (e) ADMINISTRATIVE COMMITTEE DISCRETION. The Administrative Committee
shall have complete discretion to adopt and revise procedures to be followed in
making such investment elections. Such procedures may include, but are not
limited to, the process of making elections, the permitted frequency of making
elections, the incremental size of elections, the deadline for making elections
and the effective date of such elections. Any procedures adopted by
the Administrative Committee that are inconsistent with the deadlines or
procedures specified in this Section shall supersede such provisions of this
Section without the necessity of a Plan amendment.

     4.3 PARTICIPATION DIRECTION NOT BINDING

     Notwithstanding any provision of the Plan to the contrary, neither the
Administrative Committee nor the Trustee of the Trust, if any, shall be bound
to follow investment directions of each Participant, but the Participant
nevertheless shall be credited with the deemed performance in the deemed
investment or investments selected by the Participant with respect to the
Investment Funds made available under the Plan. The Company shall have the
right, at any time and from time to time, in its sole discretion, to substitute
assets of equal fair market value for any asset held by the Trust, if any.

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ARTICLE V

PAYMENT OF ACCOUNT BALANCES

     5.1 BENEFIT PAYMENTS UPON TERMINATION OF SERVICE FOR REASONS
OTHER THAN DEATH OR RETIREMENT.

     If a Participant terminates his employment with the Company and all other
members of the Controlled Group for any reason other than death or Retirement,
he (or his Beneficiary, if he dies after such termination of employment but
before distribution of his Account) shall be entitled to received a
distribution of the total of: (i) the entire vested amount credited to his
Account, determined as of the Valuation Date coinciding with or next following
the date on which the Participant terminated employment; plus (ii) the vested
amount of Deferred Compensation and Matching Contributions, deferred and/or
credited to his Account since such Valuation Date plus (iii) Investment Return
on such amounts since such Valuation Date. The vested benefit payable to a
Participant under this Section shall be distributed in a single lump sum cash
payment as soon as administratively feasible after the date the Participant
terminates his employment with the Company and all other members of the
Controlled Group for any reason other than death or Retirement.

     5.2 BENEFITS PAYABLE UPON DEATH.

     If a Participant dies before payment of his benefit from the Plan is made
or commenced, the Beneficiary or Beneficiaries designated by such Participant
in his latest beneficiary designation form filed with the Administrative
Committee shall be entitled to receive a distribution of the total of (i) the
entire vested amount credited to such Participant’s Account, determined as of
the Valuation Date coinciding with or next following the date of the
Participant’s death; plus (ii) the vested amount of Compensation and Matching
Contributions, deferred and/or credited to his Account since such Valuation
Date plus (iii) Investment Return on such amounts since such Valuation Date.
The benefit shall be distributed to such Beneficiary or Beneficiaries, as
soon as administratively feasible after the date of the Participant’s death, in
the form of a single lump sum payment.

     5.3 RETIREMENT BENEFITS.

     If a Participant terminates his employment with the Company and all other
members of the Controlled Group due to Retirement, he (or his Beneficiary, if
he dies after such termination of employment but before full distribution of
his Account) shall be entitled to receive or begin receiving a distribution of
the total of: (i) the entire vested amount credited to his Account, determined
as of the Valuation Date coinciding with or next following the date on which
such Participant terminated employment; plus (ii) the vested amount of Deferred
Compensation and Matching Contributions, deferred and/or credited to his
Account since such Valuation Date plus (iii) Investment Return on such amounts
since such Valuation Date. The vested benefit payable to a Participant under
this Section shall be distributed or distribution shall commence as soon as

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administratively feasible after the Participant’s Retirement and shall be
payable in one of the following forms:

          (a) SINGLE-SUM PAYMENT. Except as provided in subsection (b) hereof the
benefit payable to a Participant following Retirement shall be distributed in
the form of a single lump sum payment.

          (b) ANNUAL INSTALLMENTS. A Participant may elect, at the time he makes his
initial Deferral Election, to have his benefit payable in the event of
Retirement paid in the form of annual installment payments. The following terms
and conditions shall apply to installment payments made under the Plan:

               (1) The installment payments shall be made annually as soon as practicable
after December 31st of each year during the installment term (the first
installment shall be paid as soon as practicable after the Participant’s
termination of employment). The installment term shall be either a five
(5) year period or a ten (10) year period, as elected by the
Participant at the time of his Initial Election. The initial value of
the obligation for the installment payments shall be equal to the
amount of the Participant’s Account balance calculated in accordance
with the terms of this Section 5.3 and the amount of the initial
installment payment shall be an amount equal to 1/5th or 1/10th, as the
case may be, of such value. The amount of each subsequent installment
shall be determined by dividing the Participant’s remaining Account
balance as of the preceding December 31st by the number of remaining
installments.

               (2) If a Participant dies after payment of his benefit from the Plan has
begun, but before his entire benefit has been distributed, the remaining amount
of his Account balance shall be distributed to the Participant’s
designated Beneficiary in the form of a single lump sum payment.

               (3) Notwithstanding anything to the contrary contained herein, if
the Account balance of the Participant as of the Valuation Date
coinciding with or next following the date of the Participant’s
Retirement is $50,000 or less, the entire benefit shall be paid in a
single lump sum cash payment as soon as practicable following the date
of the Participant’s Retirement as provided in Section 5.3(a).

     5.4 IN SERVICE DISTRIBUTIONS.

     At the time a Participant makes a Deferral Election, the Participant may
elect to have all or a portion of his Account balance attributable to his
Deferred Compensation credited pursuant to such Deferral Election paid in a
specified future year that is not earlier than the third Plan Year after the
Plan Year for which such Deferral Election applies. A Participant may make a
separate election under this Section 5.4 for each annual Deferral Election.
After a Participant makes his Deferral Election choosing a Plan Year for
payment, a Participant may not subsequently elect to change the time of payment
specified in such Deferral Election.

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Provided that the Participant has not terminated employment prior to the time
for payment of a portion of his Deferred Compensation subject to this Section
5.4, the applicable portion of his Account balance shall be paid to the
Participant as soon as administratively practicable after January 1st of the
Plan Year chosen by the Participant. If the Participant has terminated
employment with the Company and all other members of the Controlled Group prior
to the time for payment of a portion of his Account under this Section 5.4, the
time of payment shall be accelerated and paid in accordance with the provisions
of Sections 5.1, 5.2 or 5.3, as applicable. In no event, shall a Participant be
permitted to have any portion of his Account attributable to Matching
Contributions paid prior to his termination of employment with the Company and
all members of the Controlled Group.

It is expressly contemplated that a Participant may elect separate, fixed
payment dates with regard to all or a portion of the annual Deferral Election
for each Plan Year. Notwithstanding anything to the contrary contained herein,
the Administrative Committee may establish limits on the payment dates
available to Participants.

     5.5 ACCELERATED DISTRIBUTIONS.

     Subsequent to making a Deferral Election and prior to the time that
payment is to commence under this Article V, a Participant may elect to have
the accelerated payment of part or all of his vested Account balance. Upon
receipt of an application for an accelerated distribution and approval of the
distribution by the Administrative Committee, made in its sole discretion, the
Controlling Company shall pay the accelerated distribution to such Participant.
Such distribution shall be paid in a single lump sum payment as soon as
administratively practicable after the Administrative Committee approves the
distribution. In determining whether or not to approve an accelerated
distribution, the Committee shall treat similarly situated Participants
similarly.

Effective with the date of distribution, the Participant’s Deferral Election
shall be discontinued and the Participant shall not be permitted to elect to
defer any additional Compensation for the remainder of that Plan Year and all
of the following Plan Year. Upon payment, the amount of such distribute on,
plus an additional 10% of such amount, shall be deducted from the Participant’s
Account balance in accordance with Section 3.4. The additional 10% deducted and
any unvested portions of the Participant’s Account Balance associated with the
accelerated distribution amount from the Account of a Participant receiving an
accelerated distribution under this Section 5.5 shall be added to forfeitures
and applied as provided in Section 3.6.

     5.6 HARDSHIP DISTRIBUTIONS.

     Upon receipt of an application for a hardship distribution, the
Administrative Committee shall make a decision, in its sole discretion, whether
the Participant has suffered a Financial Hardship

14

 

and the distribution amount necessary to satisfy the Financial Hardship. If the
Administrative Committee determines that the Participant has suffered a
Financial Hardship, distribution of the amount determined to be necessary to satisfy the Financial Hardship
shall be made in a single lump sum payment as soon as administratively feasible
after the Administrative Committee’s determination. The
amount of such distribution shall reduce the Participant’s Account balance as
provided in Section 3.4.

     5.7 BENEFICIARY DESIGNATION.

          (a) GENERAL. Participants shall designate and from time to time may
redesignate their Beneficiaries in such form and manner as the Administrative
Committee may determine.

          (b) NO DESIGNATION OR DESIGNEE DEAD OR MISSING. In the event that:

               (1) a Participant dies without designating a
Beneficiary;

               (2) the Beneficiary designated by a Participant is not surviving when a
payment is to be made to such person under the Plan, and no contingent
Beneficiary has been designated; or

               (3) the Beneficiary designated by a Participant cannot be located by the
Administrative Committee within one (1) year from the date benefits are to be
paid to such person;
then, in any of such events, the Beneficiary of such Participant with respect
to any benefits that remain payable under the Plan shall be the Participant’s
Surviving Spouse, if any, and if not, the estate of the Participant.

     5.8 TAXES.

     If the whole or any part of any Participant’s or Beneficiary’s benefit
hereunder shall become subject to any estate, inheritance, income or other tax
which the Company shall be required to pay or withhold, the Company shall have
the full power and authority to withhold and pay such tax out of any monies or
other property in its hand for the account of the Participant or Beneficiary
whose interests hereunder are so affected. Prior to making any payment, the
Company may require such releases or other documents from any lawful taxing
authority as it shall deem necessary.

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ARTICLE VI

CLAIMS

     6.1 CLAIMS.

          (a) INITIAL CLAIM. Claims for benefits under the Plan may be filed with
the Administrative Committee on forms or in such other written documents, as
the Administrative Committee may prescribe. The Administrative Committee shall
furnish to the claimant written notice of the disposition of a claim within
ninety (90) days after the application therefore is filed In the event the
claim is denied, the notice of the disposition of the claim shall provide the
specific reasons for the denial, citations of the pertinent provisions of the
Plan, and, where appropriate, an explanation as to how the claimant can perfect
the claim and/or submit the claim for review.

          (b) APPEAL. Any Participant or Beneficiary who has been denied a benefit
shall be entitled, upon request to the Administrative Committee, to appeal the
denial of his claim. The claimant (or his duly authorized representative) may
review pertinent documents related to the Plan and in the Administrative
Committee’s possession in order to prepare the appeal. The request for review,
together with written statement of the claimant’s position, must be filed with
the Administrative Committee no later than sixty (60) days after receipt of the
written notification of denial of a claim provided for in subsection (a). The
Administrative Committee’s decision shall be made within sixty (60) days
following the filing of the request for review. If unfavorable, the notice of
the decision shall explain the reasons for denial and indicate the provisions
of the Plan or other documents used to arrive at the decision.

          (c) SATISFACTION OF CLAIMS. Any payment to a Participant or Beneficiary
shall to the extent thereof be in full satisfaction of all claims hereunder
against the Administrative Committee and the Company, any of whom may require
such Participant or Beneficiary, as a condition to such payment, to execute a
receipt and release therefor in such form as shall be determined by the
Administrative Committee or the Company. If receipt and release is required but
the Participant or Beneficiary (as applicable) does not provide such receipt
and release in a timely enough manner to permit a timely distribution in
accordance with the general timing of distribution provisions in the Plan, the
payment of any affected distribution may be delayed until the Administrative
Committee or the Company receive a proper receipt and release.

     6.2 EXHAUSTION OF ADMINISTRATIVE REMEDIES.

     No action at law or in equity may be brought to recover under this Plan
until all administrative remedies under the Plan have been exhausted . If a
claimant fails to file a timely claim or, if a claim is denied, fails to timely
appeal to the Administrative Committee and timely request review by the
Administrative Committee in accordance with the procedures outlined here in,
such claimant shall have no rights of review and shall have no right to bring
any action in any court and the claim decision shall become final and binding
on all persons for all purposes.

16

 

     6.3 ACTION FOR RECOVERY.

     No action at law or in equity may be brought for recovery under this Plan
sooner than the date that the Plan’s administrative appeals pursuant to Section
6.1 have been exhausted nor later than two (2) years from the time the claim
for benefit was made.

     6.4 PARTICIPANT’S RESPONSIBILITIES.

     Each Participant shall be responsible for providing the Administrative
Committee with the Participant’s and each Beneficiary’s current address. Any
notices required or permitted to be given hereunder shall be deemed given if
directed to such address and mailed by regular United States mail. The
Administrative Committee and the Company shall not have any obligation or duty
to locate a Participant or Beneficiary. In the event that a Participant or
Beneficiary becomes entitled to a payment under this Plan and such payment is
delayed or cannot be made:

          (a) because the current address according to Company records is
incorrect;

          (b) because the Participant, Dependent or Beneficiary fails to
respond to the notice sent to the current address according to
Company records;

          (c) because of conflicting claims to such payments; or

          (d) because of any other reason;

the amount of such payment, if and when made, shall be determined under the
provisions of this Plan without payment of any Investment Return for the period
of delay.

     6.5 UNCLAIMED BENEFITS.

     If, within twelve (12) months after any amount becomes payable
hereunder to a Participant or Beneficiary and the same shall not have been
claimed or any check issued under the Plan remains uncashed, provided
reasonable care shall have been exercised in attempting to make such payments,
the amount thereof shall be forfeited and shall cease to be a liability of the
Plan. Notwithstanding the foregoing, if the Participant or Beneficiary
thereafter makes a claim for benefit in accordance with this Article VI, the
amount payable shall be restored and shall be paid to the Participant or
Beneficiary without payment of any Investment Return from the date of
forfeiture. The amount forfeited under this Section 6.6 shall be added to
forfeitures and applied as provided in Section 3.6.

17

 

ARTICLE VII

SOURCE OF FUNDS: TRUST

     7.1 SOURCE OF FUNDS.

     Except
as provided in this Section and Section 7.2, the Company shall
provide the benefits described in the Plan from the general assets of the
Company. The Controlling Company may, but shall not be required to, establish a
Trust and may pay over funds from time to time to such Trust (as described in
Section 7.2), and, to the extent that funds in such Trust allocable to the
benefits payable under the Plan are sufficient, the Trust assets shall be used
to pay benefits under the Plan. If such Trust assets are not sufficient to pay
all benefits due under the Plan, then the Company shall have the obligation,
and the Participant or Beneficiary, who is due such benefits, shall look to the
Company to provide such benefits. The Administrative Committee shall allocate
the total liability to pay benefits under the Plan among the Controlling
Company and the members of its Controlled Group comprising the Company in such
manner and amount as the Administrative Committee or the Board (as applicable)
in its sole discretion deems appropriate. To the extent that either the Company
or the Trust pays an amount to the Participant or a Beneficiary, such payment
shall operate as a complete discharge for such amount.

     7.2 TRUST.

     The Controlling Company may transfer all or any portion of the funds
necessary to fund benefits accrued hereunder to the Trustee to be held and
administered by the Trustee pursuant to the terms of the Trust Agreement. The
assets contributed for the Eligible Employees of each Company, and earnings and
losses thereon, shall be accounted for separately under the Trust. The assets
held by the Trust, to the extent attributable to contributions for the Eligible
Employees of a given Company, are and shall remain at all times subject to the
claims of the general creditors of such Company. No Participant or Beneficiary
shall have any interest in the assets held by the Trust or in the general
assets of the Company other than as a general, unsecured creditor. Accordingly,
the Controlling Company shall not grant a security interest in the assets held
by the Trust in favor of the Participants, Beneficiaries or any creditor.

18

 

ARTICLE VIII

ADMINISTRATIVE COMMITTEE

     8.1 ACTION.

     Action of the Administrative Committee may be taken with or without a
meeting of committee members; provided, action shall be taken only upon the
vote or other affirmative expression of a majority of the committee members
qualified to vote with respect to such action If a member of the committee is a
Participant or Beneficiary, he shall not participate in any decision which
solely affects his own benefit under the Plan. For purposes of administering
the Plan, the Administrative’ Committee shall choose a secretary who shall keep
minutes of the committee’s proceedings and all records and documents pertaining
to the administration of the Plan. The secretary may execute any certificate or
any other written direction on behalf of the Administrative Committee.

     8.2 RIGHTS AND DUTIES.

     The Administrative Committee shall administer the Plan and shall have all
powers necessary to accomplish that purpose, including (but not limited to) the
following:

          (a) To construe, interpret and administer the Plan;

          (b) To make determinations required by the Plan, and to maintain records
regarding Participants’ and Beneficiaries’ benefits hereunder;

          (c) To compute and certify to the Controlling Company or the Trustee, if
any, the amount and kinds of benefits payable to Participants and
Beneficiaries, and to determine the time and manner in which such benefits are
to be paid;

          (d) To authorize all disbursements by the Controlling Company pursuant to
the Plan;

          (e) To maintain all the necessary records of the
administration of the Plan;

          (f) To make and publish such rules for the regulation of the Plan as are
not inconsistent with the terms hereof;

          (g) To delegate to other individuals or entities from time to time the
performance of any of its duties or responsibilities hereunder;

          (h) To hire agents, accountants, actuaries, consultants and legal counsel
to assist in operating and administering the Plan.

19

 

The Administrative Committee shall have the exclusive right to construe and
interpret the Plan, to decide all questions of eligibility for benefits and to
determine the amount of such benefits, and its decisions on such matters shall
be final and conclusive on all parties.

     8.3 COMPENSATION, INDEMNITY AND LIABILITY.

     The Administrative Committee and its members shall serve as such without
bond and without compensation for services hereunder. All expenses of the
Administrative Committee shall be paid by the Company. No member of the
committee shall be liable for any act or omission of any other member of the
committee, nor for any act or omission on his own part, excepting his own
willful misconduct. The Company shall indemnify and hold harmless the
Administrative Committee and each member thereof against any and all expenses
and liabilities, including reasonable legal fees and expenses, arising out of
his membership on the committee, excepting only expenses and liabilities
arising out of his own willful misconduct.

20

 

ARTICLE IX

AMENDMENT AND TERMINATION

     9.1 AMENDMENTS.

          (a) The Controlling Company, through action of the Board, shall have the
right, in its sole discretion, to amend the Plan in whole or in part at any
time and from time to time. Any amendment shall be in writing and executed by a
duly authorized officer of the Controlling Company. An amendment to the Plan
may modify its terms in any respect whatsoever, and may include, without
limitation, a permanent or temporary freezing of the Plan such that the Plan
shall remain in effect with respect to existing Account balances without
permitting any new contributions, provided, no such action may reduce the
amount already credited to a Participant’s Account without the affected
Participant’s written consent. All Participants and Beneficiaries shall be
bound by such amendment.

          (b) The Administrative Committee may make administrative amendments to the
Plan including but not limited to amendments to clarify the Plan language and
to simplify and implement various administrative procedures, including matters
relating to the calculation of benefits and payments to Beneficiaries, which
the Administrative Committee determines are consistent with the purpose and
intent of the Plan.

     9.2 TERMINATION OF PLAN.

     The Controlling Company expects to continue the Plan but reserves the
right to discontinue and terminate the Plan at any time, for any reason. Any
action to terminate the Plan shall be taken by the Board in the form of a
written Plan amendment executed by a duly authorized officer of the Controlling
Company. If the Plan is terminated, each Participant shall become 100 percent
vested in his Account which shall be distributed in a single-sum as soon as
practicable after the date the Plan is terminated. The amount of any such
distribution shall be determined as of the date such termination distribution
is processed. Such termination shall be binding on all Participants and
Beneficiaries.

21

 

ARTICLE X

MISCELLANEOUS

     10.1 TAXATION.

     It is the intention of the Company that the benefits payable hereunder
shall not be deductible by the Company nor taxable for federal income tax
purposes to Participants or Beneficiaries until such benefits are paid by the
Company, or the Trust, as the case may be, to such Participants or
Beneficiaries. When such benefits are so paid, it is the intention of the
Company that they shall be deductible by the Company under Code Section 162.

     10.2 WITHHOLDING.

     All payments made to a Participant or Beneficiary hereunder shall be
reduced by any applicable federal, state or local withholding or other taxes or
charges as may be required under applicable law.

     10.3 NO EMPLOYMENT CONTRACT.

     Nothing herein contained is intended to be nor shall be construed as
constituting a contract or other arrangement between the Company and any
Participant to the effect that the Participant will be employed by the Company
for any specific period of time.

     10.4 HEADINGS.

     The headings of the various articles and sections in the Plan are solely
for convenience and shall not be relied upon in construing any provisions
hereof. Any reference to a section shall refer to a section of the Plan unless
specified otherwise.

     10.5 GENDER AND NUMBER.

     Use of any gender in the Plan will be deemed to include all genders when
appropriate, and use of the singular number will be deemed to include the
plural when appropriate, and vice versa in each instance.

     10.6 ASSIGNMENT OF BENEFITS.

     Neither the Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage, or otherwise
encumber, transfer, hypothecate, or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony, or
separate maintenance owed by the Participant or any other person, nor be
transferable by operation of law in the event of the Participant’s or any other
person’s bankruptcy or insolvency.

22

 

     10.7 LEGALLY INCOMPETENT.

     The Administrative Committee, in its sole discretion, may direct that
payment be made to an incompetent or disabled person, whether because of
minority or mental or physical disability, to the guardian of such person or to
the person having custody of such person, without further liability on the part
of the Company for the amount of such payment to the person on whose account
such payment is made.

     10.8 GOVERNING LAW.

     The Plan shall be construed, administered and governed in all respects in
accordance with applicable federal law (including ERISA) and, to the extent not
preempted by federal law, in accordance with the laws of the State of Texas.
Exclusive jurisdiction and venue of all disputes arising out of and relating to
the Plan shall be in any court of appropriate jurisdiction in Dallas County,
Texas.

     10.9 SEVERABILITY.

     If any provision of the Plan is held invalid or unenforceable, its
invalidity or unenforceability shall not affect any other provision of the
Plan, and the Plan shall be construed and enforced as if such invalid or
unenforceable provision had not been included herein.

     10.10 OVERPAYMENTS.

     If for any reason, any benefit under this Plan is erroneously paid to a
Participant or Beneficiary, the Participant or Beneficiary, as the case may be,
shall be responsible for refunding the overpayment to this Plan. The refund
shall be a lump-sum payment paid directly by the Participant or Beneficiary, a
reduction of the amount of future benefits otherwise payable, or any other
method which the Administrative Committee shall deem appropriate, including
payroll deduction in which case the Participant shall execute such forms
authorizing payroll deduction as the Administrative Committee shall request.

     10.11 ENTIRE PLAN.

     This document constitutes the entire Plan and there are no oral items or
conditions to the contrary. Any change, modification or amendment to the Plan
must be in writing.

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     IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be
executed by its duly authorized officer effective as of the 1st day of July,
2000.

	 	 	 	 	 
	 	 	AFFILIATED COMPUTER SERVICES, INC.
	 	 	 
	

	 	By:
	 	/s/ LORA VILLAREAL
	 	 	 
	

	 	Title:
	 	SR. VP – HR

24

 

AMENDMENT

TO AFFILIATED COMPUTER SERVICES, INC.

401(K) SUPPLEMENTAL SAVINGS PLAN

     WHEREAS, Affiliated Computer Services, Inc. (the “Company”) maintains the
Affiliated Computer Services, Inc. 401(k) Supplemental Savings Plan (“Plan”)
and

     WHEREAS, the Company desires to amend certain provisions of the Plan to
clarify that the disposition of a Company subsidiary by stock sale shall
constitute a termination of employment with the controlled group of the
employees of such subsidiary for purposes of the plan, that such disposition
shall be a distributable event under the Plan;

     NOW THEREFORE, the Plan is hereby amended as follows, effective as of
January 1, 2003:

1. Section 5.1 of the Plan is amended to read in its entirety as
follows:

               “If a Participant terminates his employment with the Company and all other
members of the Controlled Group for any reason (including the consummation of
any transaction that causes such Participant’s employer to no longer be a
member of the Controlled Group), other than death or Retirement, he (or his
Beneficiary, if he dies after such termination of employment but before
distribution of his Account) shall be entitled to receive a distribution of the
total of: (i) the entire vested amount credited to his Account, determined as
of the Valuation Date coinciding with or next following the date on which the
participant terminated employment; plus (ii) the vested amount of Deferred
Compensation and Matching Contributions, deferred and/or credited to his
Account since such Valuation Date; plus (ii) Investment Return on such amounts
since such Valuation Date. The vested benefit payable to a Participant under
this Section shall be distributed in a single lump sum cash payment as soon as
administratively feasible after the date the Participant terminates his
employment with the Company and all other members of the Controlled Group in
accordance with this section 5.1.”

END OF AMENDMENT

     IN WITNESS WHEREOF, the undersigned has executed this Amendment on this
the 15th day of August 2003, to be effective as provided herein.

	 	 	 	 	 
	 	 	Affiliated Computer Services, Inc.
	 
	

	 	By:
	 	/s/ LORA VILLAREAL

	

	 	Its:
	 	Sr. V.P. – HR

 

 

AMENDMENT

TO

ACS SUPPLEMENTAL SAVINGS PLAN

WHEREAS, Affiliated Computer Services, Inc. (the “Company”) maintains the ACS
Supplemental Savings Plan (the “Plan”);

WHEREAS, the Company desires that the Plan be amended before the 2004 and 2005
open enrollment seasons to make certain modifications to enhance the
flexibility of the Plan;

WHEREAS, the Company desires that the Plan be amended to conform certain Plan
provisions applicable to ACS Commercial (“Commercial”) and ACS Government
(“Government”) business units with certain Plan provisions applicable to
eligible employees of ACS State and Local Solutions, Inc. (“SLS”);

NOW THEREFORE, the Plan is amended as follows:

1. The Plan is amended to allow eligible employees of the Commercial and
Government business units to participate in the Plan effective January 1,
2004 as follows:

a. Eligible employees in the Commercial and Government business
units may defer up to 100% of base pay and up to 100% of bonus per
plan year provided that the maximum amount of base pay or bonus that
can be deferred by a participating Commercial or Government business
unit employee in any given plan year will be reduced by required
withholding of any and all applicable federal, state or other taxes,
and normal benefit deductions, including 401(k) and health and
welfare contributions;

b. The Plan is amended to allow eligible Commercial or Government
business unit employees to make deferrals of base pay either:

i) A fixed amount or a fixed percentage of base pay into the
Plan;

ii) Sequentially into the ACS Savings Plan or ACS Government
Savings Plan until such time as additional deferrals into the
ACS Savings Plan or ACS Government Savings Plan are prohibited
due to certain plan limits, Company imposed caps or § 402(g)
and then make deferrals into the Plan; or

iii) Simultaneously into the Plan and the ACS Savings Plan or
ACS Government Savings Plan. In the event deferrals into the
ACS Savings Plan or ACS Government Savings Plan reach certain
plan limits, Company imposed caps, or the § 402(g) limit,
subsequent deferrals would be made solely into the Plan.

     2. Section 1.17 is amended to read as follows:

     “1.17 Entry Date shall mean the first day of every year during the
period in which the Plan remains in effect and, with respect to employees
of newly acquired businesses only, such other date as may be determined by
the Administrative Committee.”

     3. Section 2.2 is amended to read as follows:

 

 

     “2.2 Procedure for Admission.

     Each Eligible Employee shall become a Participant in the Plan
by completing such forms and providing such data in a timely manner,
as are required by the Administrative Committee as a precondition of
participation in the Plan. Such forms and data may include, without
limitation, a Deferral Election, the Eligible Employee’s acceptance
of the terms and conditions of the Plan, and the designation of a
Beneficiary to receive any benefits payable hereunder.”

     4. Section 3.2 is amended to read as follows:

     “3.2 Deferral Elections.

     Each Eligible Employee who is or becomes eligible to
participate in the Plan for all or any portion of a Plan Year may
elect to become an active Participant for such Plan Year by
completing and delivering to the Controlling Company (or its
designee) a Deferral Election setting forth the terms of his
election and such other forms as required by the Administrative
Committee. Subject to the terms and conditions set forth below, a
Deferral Election shall provide for the reduction of an Eligible
Employee’s Compensation paid during the Plan Year for which the
Deferral Election is in effect. Subject to any modifications,
additions or exceptions that the Administrative Committee, in its
sole discretion, deems necessary, appropriate or helpful, the
following shall apply to such Deferral Elections:

          (a) Effective Date. A Participant’s initial Deferral Election
with respect to his Compensation for any Plan Year shall be
effective for the first paycheck earned after the date the Deferral
Election becomes effective. To be effective, a Participant’s
initial Deferral Election must be made within the time period
prescribed by the Administrative Committee (generally, on or before
the first day of the Plan Year, or, if later, on or before the Entry
Date coinciding with or next following the date he first becomes
eligible to participate in the Plan, subject to Section 2.1). An
Eligible Employee’s initial Deferral Election with respect to his
Compensation for a Plan Year shall remain in effect for each
subsequent Plan Year unless revoked, or modified and such
modification must be made on or before the last day of the Plan Year
immediately preceding the Plan Year for which he desires to modify
his Deferral Election. Notwithstanding the foregoing, each Eligible
Employee may make an initial Deferral Election for the Plan prior to
or within the first thirty (30) days after (i) the Effective Date of
the Plan or (ii) the Entry Date coinciding with or next following
the date that the individual first becomes an Eligible Employee,
provided that the initial Deferral Election shall be effective for
the first paycheck earned after the date the Deferral Election is
received.

          (b) Term. Each Eligible Employee’s Deferral Election for a
Plan Year shall remain in effect for all such Compensation paid
during such Plan Year unless prior to the end of such Plan Year the
Participant ceases to be an active Participant.

          (c) Deleted In Its Entirety.

          (d) Minimum Deferral Amount. An Eligible Employee must elect
to defer at least $2,000 of Compensation each Plan Year (or such
other minimum or maximum percentage and/or amount, if any,
established by the Administrative Committee from time-to-time). If
an Eligible Employee’s deferral election is projected

 

 

to result in less than an annual deferral of the minimum amount
established under this Section, the Eligible Employee’s Deferral
Election shall not be given effect and the Participant shall not be
an active Participant for such Plan Year.

          (e) Crediting of Deferred Compensation. For each Plan Year
that a Participant has a Deferral Election in effect, the
Administrative Committee shall credit the amount of such
Participant’s Deferred Compensation to his Account on, or as soon as
practicable after, the Valuation Date such amount would have been
paid to him but for his Deferral Election.”

     5. Section 3.3(a) is amended to read as follows:

     “3.3 Crediting of Matching Contributions.

          (a) Match. As of each Valuation Date within the Plan Year that
Deferred Compensation is credited to the Participant’s Account (or
such other date or time as the Administrative Committee, in its sole
discretion, determines from time-to-time), a Matching Contribution
attributable to such Deferred Compensation, if any, shall also be
credited to the Participant’s Account. The Administrative Committee
shall determine the amount of the Matching Contribution, if any, to
be credited to each Participant’s Account. The amount of the
Matching Contribution to be credited to a Participant, if any, shall
be an amount equal to the difference between (i) the matching
contribution that would have been credited to the Participant under
the 401(k) plan in which the Participant participates if the
Participant’s Deferred Compensation payable as Base Pay had been
contributed as 401(k) contributions to such plan, but which were not
credited to such plan due to IRS limitations and Company imposed
caps, and (ii) the amount of matching contribution actually
contributed to the 401(k) plan. Notwithstanding the foregoing, the
Matching Contributions credited to the Participant’s Account for the
Plan Year shall not exceed the maximum limits described in Section
3.3(b).”

6. Article V is hereby amended by modifying Sections 5.3(a) and (b) and
adding Section 5.3(c) to read as follows:

“(a) Single-Sum Payment. Except as provided in subsections (b) and
(c) hereof the benefit payable to a Participant following Retirement
shall be distributed in the form of a single lump sum payment.”

“(b) Annual Installments. A Participant may elect, at the time he
makes his initial Deferral Election, to have his benefit payable in
the event of Retirement paid in the form of annual installment
payments. The following terms and conditions shall apply to
installment payments made under the Plan:

(1) The installment payments shall be made annually as soon as
practicable after December 31st of each year during the
installment term (the first installment shall be paid as soon
as practicable after the Participant’s termination of
employment). The installment term shall be no less than a two
(2) year period or greater than a fifteen (15) year period, as
elected by the Participant at the time of his Initial
Election. The initial value of the obligation for the
installment payments shall be equal to the amount of the
Participant’s Account balance calculated in accordance with
the terms of this Section 5.3 and the amount of the

 

 

initial installment payment shall be an amount between 1/2 or
1/15th, as the case may be, of such value. The amount of each
subsequent installment shall be determined by dividing the
Participant’s remaining Account balance as of the preceding
December 31st by the number of remaining installments.

(2) If a Participant dies after payment of his benefit from
the Plan has begun, but before his entire benefit has been
distributed, the remaining amount of his Account balance shall
be distributed to the Participant’s designated Beneficiary in
the form of a single lump sum payment.

(3) Notwithstanding anything to the contrary contained herein,
if the Account balance of the Participant as of the Valuation
Date coinciding with or next following the date of the
Participant’s Retirement is $50,000 or less, the entire
benefit shall be paid in a single lump sum cash payment as
soon as practicable following the date of the Participant’s
Retirement as provided in Section 5.3(a).

(4) A Participant shall be permitted to change his election of
annual installment payments at any time by filing a new
Deferral Election reflecting a new installment payment
election (or by following such procedures as are set by the
Plan Administrator regarding using the Participant website,
when available), provided such request for change is made at
least thirteen (13) months prior to the Participant’s date of
Retirement. Any change to installment payments made within
thirteen months of Retirement shall be null and void, and the
most recent election which is dated at least thirteen months
prior to Retirement will be in effect. If no such election is
in effect, then distribution shall be made in a single lump
sum.”

“(c) Partial Lump Sum and Partial Annual Installments. A
Participant may elect, at the time he makes his initial Deferral
Election, to have his benefit payable in the event of Retirement
paid in the form of a partial lump sum and the remaining balance
paid in the form of annual installment payments. The partial lump
sum shall be paid as soon as administratively feasible after the
Participant’s Retirement. The following terms and conditions shall
apply to installment payments paid after the lump sum payment made
under the Plan:

(1) The installment payments shall be made annually as soon as
practicable after December 31st of each year during the
installment term (the first installment shall be paid as soon
as practicable after December 31st of the year of the
installment term). The installment term shall be no less than
a two (2) year period or greater than a fifteen (15) year
period, as elected by the Participant at the time of his
Initial Election. The initial value of the obligation for the
installment payments shall be equal to the amount of the
Participant’s Account balance remaining after payment of the
partial lump sum calculated in accordance with the terms of
this Section 5.3 and the amount of the initial installment
payment shall be an amount between 1/2 or 1/15th, as the case
may be, of such value. The amount of each subsequent
installment shall be determined by dividing the Participant’s
remaining Account balance as of the preceding
December 31st by
the number of remaining installments.

(2) If a Participant dies after payment of his benefit from
the Plan has begun, but before his entire benefit has been
distributed, the remaining amount of his

 

 

Account balance shall be distributed to the Participant’s
designated Beneficiary in the form of a single lump sum
payment.

(3) Notwithstanding anything to the contrary contained herein,
if the Account balance of the Participant as of the Valuation
Date coinciding with or next following the date of the
Participant’s Retirement is $50,000 or less, the entire
benefit shall be paid in a single lump sum cash payment as
soon as practicable following the date of the Participant’s
Retirement as provided in Section 5.3(a).

(4) A Participant shall be permitted to change his election of
annual installment payments at any time by filing a new
Deferral Election reflecting a new installment payment
election (or by following such procedures as are set by the
Plan Administrator regarding using the Participant website,
when available), provided such request for change is made at
least thirteen (13) months prior to the Participant’s date of
Retirement. Any change to installment payments made within
thirteen months of Retirement shall be null and void, and the
most recent election which is dated at least thirteen months
prior to Retirement will be in effect. If no such election is
in effect, then distribution shall be made in a single lump
sum.”

     7. The effective dates for the provisions of this Amendment are as
follows:

	a.	 	Sections 1, 2, 5 and 6 are effective January 1, 2004.
	 
	b.	 	Sections 3 and 4 are effective January 1, 2005.

[SIGNATURE ON NEXT PAGE]

 

 

IN
WITNESS WHEREOF, the undersigned has executed this Amendment on the
6th day of November 2003, to be effective as provided herein.

	 	 	 	 	 
	 	 	Affiliated Computer Services, Inc.
	 
	 	 	 	 
	

	 	By:
	 	/s/ LORA VILLAREAL
	

	 	 	 	
 
	

	 	Name:
	 	Lora Villareal
	

	 	Its:
	 	Senior Vice President – HR

 

 

AMENDMENT

TO

AFFILIATED COMPUTER SERVICES, INC.

401(k) SUPPLEMENTAL PLAN

WHEREAS, Affiliated Computer Services, Inc. (the “Company”) maintains the
Affiliated Computer Services, Inc. 401(k) Supplemental Plan (the “Plan”);

WHEREAS, the Company desires that the Plan be amended to change the Plan’s name
to the “ACS Supplemental Savings Plan” and to make certain other modifications
to enhance the flexibility of the Plan;

WHEREAS, the Company desires that the Plan be amended to reflect the
participation of eligible employees of ACS State and Local Solutions, Inc.
(“SLS”) and modifications to the Plan affecting these employees;

NOW THEREFORE, the Plan is amended as follows:

1. The Plan shall hereinafter be called the “ACS Supplemental Savings
Plan”.

2. The Plan is amended to allow eligible employees of SLS to participate
in the Plan effective January 1, 2002 as follows:

1. The Plan is amended to reflect the matching contribution formula
applicable to SLS employees under the ACS Savings Plan;

2. SLS employees who were employed by SLS on January 1, 2002 shall
be fully vested in their contributions under the Plan and SLS
employees hired after January 1, 2002 shall have matching
contributions and the investment return credited with respect
thereto vest in accordance with the ACS Savings Plan (less than 2
years of service = 0%; 2 years of service but less than 3 years of
service = 50%; and 3 or more years of service = 100%);

3. The Plan is amended to allow SLS employees to defer up to 100% of
base pay and bonus per plan year provided that the maximum amount of
base pay or bonus that can be deferred by a participating SLS
employee in any given plan year will be reduced by required
withholding of any and all applicable federal, state or other taxes,
and normal benefit deductions, including 401(k) and health and
welfare contributions;

4. The Plan is amended to allow SLS employees to make deferrals of
base pay either:

1. Solely into the Plan;

2. Sequentially into the ACS Savings Plan until such time as
additional deferrals into the ACS Savings Plan are prohibited
due to certain plan limits or § 402(g) and then make deferrals
into the Plan; or

 

 

3. Simultaneously into the Plan and the ACS Savings Plan. In
the event deferrals into the ACS Savings Plan reach the 402(g)
limit, subsequent deferrals would be made solely into the
Plan.

5. The Plan is amended to include a one year eligibility period for
SLS employees before a SLS employee may receive matching
contributions. For this purpose, service is determined the same as
under the ACS Savings Plan as applicable to SLS employees.

3. Article I is hereby amended by adding Sections 1.21, 1.22, and 1.23 to
read as follows:

“1.21 In-Service Distribution. In-Service Distribution shall mean
a payment by the Company to the Participant following a date elected
by the Participant (the “In-Service Distribution Date”) of the
amount represented by the account balance in the In-Service Account
pertaining to that In-Service Distribution. In-Service
Distributions shall be made in accordance with Participants’
In-Service Distribution form of payment election.”

“1.22 In-Service Account. In-Service Account shall mean a division
of the Participant’s Account maintained as a separate sub-Account,
created whenever a Participant elects a new In-Service Distribution
Date (not already established with an Account) with respect to a
portion, or all, of his or her deferral contributions, to which such
portion of deferral specified by the Participant is credited and
deemed invested in the investment funds elected by the Participant
for each In-Service Account.”

“1.23 In-Service Distribution Date. In-Service Distribution Date
shall mean the date selected by the Participant, following which the
In-Service Distribution account balance corresponding to that
In-Service Distribution Date shall be distributed in accordance with
the Plan.”

4. Article I, existing Sections 1.21 through 1.32 are hereby renumbered to
Sections 1.24 through 1.35 respectively.

5. V, Section 5.3 is hereby amended by adding the following sub-section
(b)(4):

“A Participant shall be permitted to change his election of annual
installment payments at any time by filing a new Deferral Election
reflecting a new installment payment election (or by following such
procedures as are set by the Plan Administrator regarding using the
Participant website, when available), provided such request for
change is made at least thirteen (13) months prior to the
Participant’s date of Retirement. Any change to installment
payments made within thirteen months of Retirement shall be null and
void, and the most recent election which is dated at least thirteen
months prior to Retirement will be in effect. If no such election
is in effect, then distribution shall be made in a single lump sum.”

6. Article V, Section 5.4 is hereby deleted in its entirety and replaced
by the following:

“5.4 The annual Deferral Election shall also indicate the
Participant’s election of In-Service Distribution Date(s) (if any).
An In-Service Distribution election shall pertain to such portion of
Deferred Compensation for the Plan Year as elected by the
Participant and shall cause an In-Service Account to be established
(unless such Account already exists), to which such portion of
Deferred Compensation shall be credited. In the event an In-Service
Account has already been established for the In-Service Distribution
Date

 

 

referred to in the Deferral Election, such portion of Deferred
Compensation shall be credited to the existing In-Service Account.”

“(a) A Participant may maintain up to four (4) In-Service
Accounts.”

“(b) A Participant may change or cancel an In-Service
Distribution Date once only, as follows:”

“(i) An In-Service Distribution Date change (including a
cancellation) may be made by submitting a new Deferral
Election or such other form as may be provided for
In-Service Distribution Date changes by the Plan
Administrator (or completing and electronically
submitting the appropriate screen on the Participant
website, when available) at any time, so long as the
date that such form is submitted to the Plan
Administrator is at least thirteen (13) months prior to
the In-Service Distribution Date being changed;”

“(ii) The In-Service Distribution Date may be extended
to a subsequent year (and must be extended by at least
one year), but it may not be made to occur sooner than
the original date;”

“(iii) The In-Service Distribution Date may be
cancelled, even after a change. A cancellation of an
In-Service Distribution Date shall cause the In-Service
Sub-Account associated with it to be merged into the
undivided portion of the Participant’s Account; and”

“(iv) Making an In-Service Distribution Date change or
cancellation in accordance with the Plan is specific to
the In-Service Distribution to which it refers, and
shall not affect other In-Service Distributions or the
ability of the Participant to make new In-Service
Distribution elections with respect to new deferral
contributions.”

“(c) Any portion of a deferral not credited to an In-Service
Distribution Account will be credited to the undivided portion
of the Participant’s Account.”

“(d) The Deferral Election shall also indicate the
Participant’s election of payment schedule for each In-Service
Distribution Date. Permitted payment schedules for In-Service
Distributions are a single lump sum or (assuming the
In-Service Distribution Account Balance is at least $10,000)
from two (2) to five (5) annual installment payments. A
Participant shall be permitted to change his or her payment
schedule election for an In-Service Distribution at any time
by filing a new Deferral Election (or by following such
procedures as are set by the Plan Administrator regarding
using the Participant website, when available), provided such
election is made at least thirteen (13) months prior to the
In-Service Distribution Date. If the In-Service Account
Balance is less than $10,000 at the time the distribution (or
first installment of the distribution) is payable, the
In-Service Distribution shall be made in a single lump sum
regardless of the Participant’s election of installment
payments.”

“(e) In the event a Participant terminates his employment with
the Company, dies, or terminates his employment with the
Company due to Retirement, and at the time of termination,
death or Retirement, he has undistributed balances in In-

 

 

Service Accounts, the In-Service Accounts will be dissolved
and combined with his undivided Participant account balance
for purposes of distribution under Section 5.1, 5.2 or 5.3, as
the case may be.”

7. The effective dates for the provisions of this Amendment are as
follows:

1. Sections 1 and 2 are effective January 1, 2002.

2. Sections 3 through 6 are effective January 1, 2003.

[END OF AMENDMENT]

[SIGNATURE ON NEXT PAGE]

 

 

IN WITNESS WHEREOF, the undersigned has executed this Amendment on the 1st day
of January 2003, to be effective as provided herein.

	 	 	 	 	 
	 	Affiliated Computer Services, Inc.

 	 
	 	By:  	/s/ LORA VILLAREAL	 
	 	Name:  	Lora Villareal	 
	 	Its:  	Sr. V.P. – HRexv10wxay

 

EXHIBIT 10(a)

Digi International Inc.

ID: _______________

11001 Bren Road East

Minnetonka, MN 55343

Notice of Grant of Stock Options

and Option Agreement

 

 

	 	 	 
	[Optionee]

	 	Option Number:
	[Address]

	 	Plan:
	[City, State, Zip]

	 	ID:

Effective [date], you have been granted a(n) Non-Qualified Stock Option to buy
[number of shares] shares of Digi International Inc. (the Company) stock at
$[per share exercise price]- per share.

The total option price of the shares granted is $[aggregate exercise price].

Shares in each period will become fully vested on the date shown.

	 	 	 	 	 	 	 
	Shares
	 	Vest Type
	 	Full Vest
	 	Expiration

	 

	 	 
	 	 
	 	 
	 

	 	 
	 	 
	 	 
	 

	 	 
	 	 
	 	 
	 

	 	 
	 	 
	 	 
	 

	 	 
	 	 
	 	 

 

By your signature and the Company’s signature below, you and the Company agree
that these options
are granted under and governed by the terms and conditions of the Company’s
Stock Option Plan as
amended and the Option Agreement, all of which are attached and made a part of
this document.

 

	 	 	 
	 
	 	 
	
 

	 	
 
	Digi International Inc.

	 	Date
	 
	 	 
	 
	 	 
	
 

	 	
 
	[Optionee]

	 	Date

 

 

DIGI INTERNATIONAL INC.

___________________________ PLAN

 

Terms and Conditions of Nonstatutory Stock Option Agreement

 

     These are the terms and conditions applicable to the NONSTATUTORY STOCK
OPTION AGREEMENT between Digi International Inc., a Delaware corporation (the
“Company”), and the optionee (the “Optionee”) listed on the cover page hereof
(the “Cover Page”) effective as of the date of grant. The Cover Page together
with these terms and conditions of Nonstatutory Stock Option Agreement
constitute the “Nonstatutory Stock Option Agreement.”

     WHEREAS, the Company desires to carry out the purposes of its Digi
International Inc. ___________________ Plan as amended from time to time
(the “Plan”), by affording the Optionee an opportunity to purchase Common Stock
of the Company, par value $.01 per share (the “Common Shares”), according to
the terms set forth herein and on the Cover Page;

     NOW THEREFORE, the Company hereby grants this Option to the Optionee under
the terms and conditions as follows.

     1.   Grant of Option. Subject to the terms of the Plan, the Company hereby
grants to the Optionee the right and option (the “Option”) to purchase the
number of Common Shares specified on the Cover Page, on the terms and
conditions hereinafter set forth. The Option is not intended by the Company to
be an “incentive stock option” within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended (the “Code”).

     2.   Purchase Price. The purchase price of each of the Common Shares
subject to the Option shall be the exercise price per share specified on the
Cover Page, which price has been specified in accordance with the Plan and
shall not be less than 50% of the Fair Market Value (as defined in paragraph
5(c) of the Plan) of a common share as of the date of grant.

     3.   Option Period.

     (a)  Subject to the provisions of paragraphs 5(a), 5(b) and 6(b) hereof,
the Option shall become exercisable as to the number of shares and on the dates
specified in the exercise schedule on the Cover Page. The exercise schedule
shall be cumulative; thus, to the extent the Option has not already been
exercised and has not expired, terminated or been canceled, the Optionee may at
any time, and from time to time, purchase all or any portion of the Common
Shares then purchasable under the exercise schedule. Notwithstanding the
foregoing or any other provision herein to the contrary, the Option shall
become immediately exercisable:

       (i)  upon the occurrence of the death or disability within the
meaning of Section 22(e)(3) of the Code, of the Optionee (as more
particularly described in paragraphs 5(a)(ii) or 5(b) and 6(a)
hereof); or

       (ii)  in the event that the committee under the Plan (the
“Committee”) shall declare pursuant to paragraph 6(b) hereof that
the Option shall be canceled at the time of, or immediately prior
to the occurrence of an Event, as defined in paragraph 6(b) hereof.

     (b) The Option and all rights to purchase shares thereunder shall cease on
the earliest of:

       (i)  the expiration date specified on the Cover Page (which
date shall not be more than ten years after the date of this
Nonstatutory Stock Option Agreement);

       (ii)  the expiration of the period after the termination of the
Optionee’s employment (as defined in paragraph 4 of the Plan)
within which the Option is exercisable as specified in paragraph
5(a) or 5(b), whichever is applicable; or

-2-

 

       (iii)  the date, if any, fixed for cancellation pursuant to
paragraph 6(b) hereof.

Notwithstanding any other provision in this Nonstatutory Stock Option
Agreement, in no event may anyone exercise the Option, in whole or in part,
after its original expiration date.

     4.   Manner of Exercising Option.

     (a)   Subject to the terms and conditions of this Nonstatutory Stock Option
Agreement, the Option may be exercised by delivering written notice of exercise
to the Company at its principal executive office, to the attention of its
President. The notice shall state the election to exercise the Option and the
number of Common Shares in respect of which it is being exercised, and shall be
signed by the person exercising the Option. If the person exercising the
Option is not the Optionee, he or she also shall send with the notice
appropriate proof of his or her right to exercise the Option. Such notice
shall be accompanied by either:

       (i)  payment (by check, bank draft or money order payable to
the Company) of the full purchase price of the Common Shares being
purchased; or

       (ii)  certificates for unencumbered Common Shares having an
aggregate Fair Market Value on the date of exercise equal to the
purchase price of the Common Shares to be purchased; provided,
however, that the person exercising this Option shall not be
permitted to pay any portion of the purchase price with Common
Shares if, in the opinion of the Committee, payment in such manner
could have adverse financial accounting consequences for the
Company; or

       (iii)  a combination of cash and such uencumbered Common
Shares; provided, however, that the person exercising this Option
shall not be permitted to pay any portion of the purchase price
with Common Shares if, in the opinion of the Committee, payment in
such manner could have adverse financial accounting consequences
for the Company.

The Optionee shall duly endorse all certificates delivered to the Company
pursuant to the foregoing subparagraphs (a)(ii) or (a)(iii) in blank and shall
represent and warrant in writing that he or she is the owner of the Common
Shares so delivered free and clear of all liens, security interests and other
restrictions or encumbrances.

     (b)   As soon as practicable after receipt of the purchase price provided
for above, the Company shall deliver to the person exercising the Option, in
the name of the Optionee or his or her estate or heirs, as the case may be, a
certificate or certificates representing the Common Shares being purchased.
The Company shall pay all original issue or transfer taxes, if any, with
respect to the issue or transfer of the Common Shares to the person exercising
the Option and all fees and expenses necessarily incurred by the Company in
connection therewith. All Common Shares so issued shall be fully paid and
nonassessable. Notwithstanding anything to the contrary in this Nonstatutory
Stock Option Agreement, the Company shall not be required, upon the exercise of
this Option or any part thereof, to issue or deliver any Common Shares prior to
the completion of such registration or other qualification of such Common
Shares under any State law, rule or regulation as the Company shall determine
to be necessary or desirable.

     5.   Exercisability of Option After Termination of Employment.

     (a)   During the lifetime of the Optionee, the Option may be exercised only
while the Optionee is employed (as defined in paragraph 4 of the Plan) by the
Company or a parent or subsidiary thereof, and only if the Optionee has been
continuously so employed since the date of this Nonstatutory Stock Option
Agreement, except that:

       (i)  if the Optionee is not an Outside Director (as defined in
paragraph 4 of the Plan), the Option shall continue to be
exercisable for three months after termination of the Optionee’s
employment but only to the extent that the Option was exercisable
immediately prior to the Optionee’s termination of employment, and
if the Optionee is an Outside Director, the Option shall continue
to be exercisable after the Optionee ceases to be a director of the
Company but only to the extent that the Option was exercisable
immediately prior to the Optionee’s ceasing to be a director;

       (ii)  in the event the Optionee is disabled (within the meaning
of Section 22(e)(3) of the Code) while employed, the Optionee or
his or her legal representative may exercise the Option within one
year after the termination of the Optionee’s employment; and

-3-

 

       (iii)  if the Optionee’s employment terminates after a
declaration pursuant to paragraph 6(b) of this Nonstatutory Stock
Option Agreement, the Optionee may exercise the Option at any time
permitted by such declaration.

     (b)  In the event of the Optionee’s death while employed by the Company or
a parent or subsidiary thereof, or within three months after his or her
termination of employment, the legal representative, heirs or legatees of the
Optionee’s estate or the person who acquired the right to exercise the Option
by bequest or inheritance may exercise the Option within one year after the
death of the Optionee.

     (c)   Neither the transfer of the Optionee between any combination of the
Company, its parent and any subsidiary of the Company, nor a leave of absence
granted to the Optionee and approved by the Committee, shall be deemed a
termination of employment. The terms “parent” and “subsidiary” as used herein
shall have the meaning ascribed to “parent corporation” and “subsidiary
corporation,” respectively, in Sections 425(e) and (f) (or successor
provisions) of the Code.

     6.  Acceleration of Option.

     (a)   Disability or Death. If paragraph 5(a)(ii) or 5(b) of this
Nonstatutory Stock Option Agreement is applicable, the Option, whether or not
previously exercisable, shall become immediately exercisable in full if the
Optionee shall have been employed continuously by the Company or a parent or
subsidiary thereof between the date the Option was granted and the date of such
disability or, in the event of death, a date not more than three months, prior
to such death.

     (b)   Dissolution, Liquidation, Merger. In the event of (i) a proposed
merger or consolidation of the Company with or into any other corporation,
regardless of whether the Company is the surviving corporation, unless
appropriate provision shall have been made for the protection of the Option by
the substitution, in lieu of the Option, of an option to purchase appropriate
voting common stock (the “Survivor’s Stock”) of the corporation surviving any
such merger or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation, or, alternatively, by the delivery of a
number of shares of the Survivor’s Stock which has a Fair Market Value as of
the effective date of such merger or consolidation equal to the product of (A)
the excess of (x) the Event Proceeds per Common Share (as hereinafter defined)
covered by the Option as of such effective date, over (y) the Option exercise
price per Common Share, times (B) the number of Common Shares covered by the
Option, or (ii) the proposed dissolution or liquidation of the Company (such
merger, consolidation, dissolution or liquidation being herein called an
“Event”), the Committee shall declare, at least ten days prior to the actual
effective date of an Event, and provide written notice to the Optionee of the
declaration, that the Option, whether or not then exercisable, shall be
canceled at the time of, or immediately prior to the occurrence of, the Event
(unless it shall have been exercised prior to the occurrence of the Event) in
exchange for payment to the Optionee, within ten days after the Event, of cash
equal to the amount (if any), for each Common Share covered by the canceled
Option, by which the Event Proceeds per Common Share (as hereinafter defined)
exceeds the exercise price per Common Share covered by the Option. At the time
of the declaration provided for in the immediately preceding sentence, the
Option shall immediately become exercisable in full and the Optionee shall have
the right, during the period preceding the time of cancellation of the Option,
to exercise the Option as to all or any part of the Common Shares covered
thereby. The Option, to the extent it shall not have been exercised prior to
the Event, shall be canceled at the time of, or immediately prior to, the
Event, as provided in the declaration, and this Plan shall terminate at the
time of such cancellation, subject to the payment obligations of the Company
provided in this paragraph 6(b). For purposes of this paragraph, “Event
Proceeds per Common Share” shall mean the cash plus the fair market value, as
determined in good faith by the Committee, of the non-cash consideration to be
received per Common Share by the stockholders of the Company upon the
occurrence of the Event.

     7.   Limitation on Transfer. During the lifetime of the Optionee, only the
Optionee or his or her guardian or legal representative may exercise the
Option. The Optionee shall not assign or transfer the Option otherwise than by
will or the laws of descent and distribution, and the Option shall not be
subject to pledge, hypothecation, execution, attachment or similar process.
Any attempt to assign, transfer, pledge, hypothecate or otherwise dispose of
the Option contrary to the provisions hereof, and the levy of any attachment or
similar process upon the Option, shall be null and void.

     8.  Stockholder Rights Before Exercise. The Optionee shall have none of
the rights of a stockholder of the Company with respect to any share subject to
the Option until the share is actually issued to him or her upon exercise of
the Option.

-4-

 

     9.   Discretionary Adjustment. The Committee may in its sole discretion
make appropriate adjustments in the number of shares subject to the Option and
in the purchase price per share to give effect to any adjustments made in the
number of outstanding Common Shares of the Company through a merger,
consolidation, recapitalization, reclassification, combination, stock dividend,
stock split or other relevant change, provided that fractional shares shall be
rounded to the nearest whole share.

     10.   Tax Withholding. The parties hereto recognize that the Company or a
parent or subsidiary thereof may be obligated to withhold federal and state
income taxes and social security or other taxes upon the Optionee’s exercise of
the Option. The Optionee agrees that, at the time he or she exercises the
Option, if the Company or a parent or subsidiary thereof is required to
withhold such taxes, he or she will promptly pay in cash upon demand to the
Company, or the parent or subsidiary having such obligation, such amounts as
shall be necessary to satisfy such obligation; provided, however, that in lieu
of all or any part of such a cash payment, the Committee may, but shall not be
required to, (or, in the case of an Optionee who is an Outside Director (as
defined in paragraph 4 of the Plan), the Committee shall) permit the Optionee
to elect to cover all or any part of the required withholdings, and to cover
any additional withholdings up to the amount needed to cover the Optionee’s
full FICA and federal, state and local income tax with respect to income
arising from the exercise of the Option, through a reduction of the number of
Common Shares delivered to the Optionee or through a subsequent return to the
Company of shares delivered to the Optionee.

     11.  Interpretation of this Nonstatutory Stock Option Agreement. All
decisions and interpretations made by the Committee with regard to any question
arising hereunder or under the Plan shall be binding and conclusive upon the
Company and the Optionee. In the event that there is any inconsistency between
the provisions of this Nonstatutory Stock Option Agreement and the Plan, the
provisions of the Plan shall govern.

     12.  Discontinuance of Employment. This Nonstatutory Stock Option
Agreement shall not give the Optionee a right to continued employment with the
Company or any parent or subsidiary thereof, and the Company or any such parent
or subsidiary thereof employing the Optionee may terminate his or her
employment and otherwise deal with the Optionee without regard to the effect it
may have upon him or her under this Nonstatutory Stock Option Agreement.

     13.  General. The Company shall at all times during the term of this
Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Nonstatutory Stock Option
Agreement. This Nonstatutory Stock Option Agreement shall be binding in all
respects on the Optionee’s heirs, representatives, successors and assigns.
This Nonstatutory Stock Option Agreement is entered into under the laws of the
State of Minnesota and shall be construed and interpreted thereunder.

-5-

 

[Certain of the options have an addendum regarding acceleration of vesting substantially similar to the following]

ADDENDUM I

TO

TERMS AND CONDITIONS

     Paragraph 6, entitled “Acceleration of Option,” is amended to add new
subparagraph (c) which provide as follows:

       (c)  Change in Control. The Option, whether or not previously
exercisable, shall become immediately exercisable in full upon the
occurrence of any “Change in Control”. A “Change in Control” shall be
deemed to have occurred upon the occurrence of either of the following
events:

       (i)  any person, as defined in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934 (the
“Exchange Act”), becomes the “beneficial owner” (as defined
in Rule 13d-3 promulgated pursuant to the Exchange Act),
directly or indirectly, of securities of the Company having
25% or more of the voting power in the election of directors
of the Company, excluding, however, Optionee (or a group of
persons, including Optionee, acting in concert); or

       (ii)  the occurrence within any period, commencing
immediately after an Annual Meeting of Stockholders and
continuing to and including the Annual Meeting of
Stockholders occurring on or about the third anniversary date
of the commencement of such period, of a change in the Board
of Directors of the Company with the result that the
Incumbent Members (as defined below) do not constitute a
majority of the Company’s Board of Directors. The term
“Incumbent Members” shall mean the members of the Board on
the date of the commencement of such period, provided that
any person becoming a director during such period whose
election or nomination for election was approved by a
majority of the directors who, on the date of such election
or nomination for election, comprised the Incumbent Members
shall be considered one of the Incumbent Members in respect
of such period.

-6-

 

[Certain of the options have an addendum regarding acceleration of vesting substantially similar to the following

ADDENDUM I

TO

TERMS AND CONDITIONS

     Paragraph 6, entitled “Acceleration of Option,” is amended to add new
subparagraphs (c) and (d) which provide as follows:

       (c)  Termination Without Cause. The Option, whether or not
previously exercisable, shall become immediately exercisable in full
immediately prior to any termination of Optionee’s employment by the
Company without cause (as defined below or as may be subsequently defined
in any Employment Agreement between Optionee and the Company). The term
“cause” shall mean only the following: (i) indictment or conviction of,
or a plea of nolo contendere to, (A) any felony (other than any felony
arising out of negligence) or any misdemeanor involving moral turpitude,
or (B) any crime or offense involving dishonesty with respect to the
Company or any of its subsidiaries; (ii) theft or embezzlement of Company
property or commission of similar acts involving dishonesty or moral
turpitude; (iii) repeated material negligence in the performance of your
duties; (iv) if you are a full-time employee, your failure to devote
substantially all of you working time and efforts during normal business
hours to the Company’s business; (v) knowing engagement in conduct which
is materially injurious to the Company; (vi) knowing failure, for your
own benefit, to comply with the Company’s policies concerning
confidentiality; (vii) knowingly providing materially misleading
information concerning the Company to the Company’s Chief Executive
Officer or Board of Directors, any governmental body or regulatory agency
or to any lender or other financing source or proposed financing source
of the Company; or (viii) any other failure by you to substantially
perform your material duties (excluding nonperformance resulting from
your disability) which failure is not cured within thirty (30) days after
written notice from the Chairman of the Board or the Chief Executive
Officer of the Company specifying the act of nonperformance or within
such longer period (but no longer than ninety (90) days in any event) as
is reasonably required to cure such nonperformance.

       (d)  Change in Control. The Option, whether or not previously
exercisable, shall become immediately exercisable in full upon the
occurrence of any “Change in Control”. A “Change in Control” shall be
deemed to have occurred upon the occurrence of either of the following
events:

       (i)  any person, as defined in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934 (the
“Exchange Act”), becomes the “beneficial owner” (as defined
in Rule 13d-3 promulgated pursuant to the Exchange Act),
directly or indirectly, of securities of the Company having
25% or more of the voting power in the election of directors
of the Company, excluding, however, Optionee (or a group of
persons, including Optionee, acting in concert); or

       (ii)  the occurrence within any period, commencing
immediately after an Annual Meeting of Stockholders and
continuing to and including the Annual Meeting of
Stockholders occurring on or about the third anniversary date
of the commencement of such period, of a change in the Board
of Directors of the Company with the result that the
Incumbent Members (as defined below) do not constitute a
majority of the Company’s Board of Directors. The term
“Incumbent Members” shall mean the members of the Board on
the date of the commencement of such period, provided that
any person becoming a director during such period whose
election or nomination for election was approved by a
majority of the directors who, on the date of such election
or nomination for election, comprised the Incumbent Members
shall be considered one of the Incumbent Members in respect
of such period.

-7-

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