As filed with the Securities and Exchange Commission on November 25, 1998.
Registration No. 333- _______
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TRANSACTION SYSTEMS ARCHITECTS, INC.
(Exact name of registrant as specified in its
charter)
Delaware 47-0772104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
224 South 108th Ave., Omaha, Nebraska 68154
(Address of Principal Executive Offices) (Zip Code)
Transaction Systems Architects, Inc. Deferred
Compensation Plan
(Full title of the plan)
David P. Stokes, General Counsel and Secretary
Transaction Systems Architects, Inc.
224 South 108th Ave., Omaha,
Nebraska 68154
(Name and address of agent for service)
(402) 334-5101
(Telephone number, including area code, of agent
for service)
Calculation of Registration Fee
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Title of securities Amount to be Proposed Proposed Amount of
to be registered registered maximum offering maximum Registration fee
price per unit aggregate offering
price(1)
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Transaction Systems $30,000,000 100% $30,000,000 $8,340
Architects, Inc.
Deferred Compensation
Plan Obligations(2)
(1) Estimated solely for the purpose of determining the registration fee.
(2) The Transaction Systems Architects, Inc. Deferred Compensation Plan
obligations are unsecured obligations of Transaction Systems
Architects, Inc. to pay deferred compensation in the future in
accordance with the Transaction Systems Architects, Inc. Deferred
Compensation Plan.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Incorporation of Documents by Reference
The documents listed in (a) through (c) below are incorporated by
reference in this registration statement and all documents subsequently filed
by the registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in the registration
statement and to be part thereof from the date of filing of such documents.
(a) The registrant's latest annual report filed pursuant to
section 13(a) or 15(d) of the Exchange Act.
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the registrant
document referred to in (a) above.
(c) The description of the class of securities contained in a
registration statement filed under the Exchange Act, including any amendment
or report filed for the purpose of updating such description.
Description of Securities
Under the Transaction Systems Architects, Inc. Deferred Compensation
Plan (the "Plan"), certain management and highly compensated employees of
Transaction Systems Architects, Inc. (the "Company") and certain of its
subsidiaries may defer a portion of their base salary and variable
compensation (including without limitation bonus amounts, management incentive
compensation and commissions).
Amounts deferred by a participant under the Plan will be credited by
book entry to the participant's deferral contribution account. The Plan
permits the Company to make discretionary contributions to an employer
contribution account maintained for each Plan participant. The value of a
participant's accounts will be based on the performance of benchmark
investment funds selected by the participant under the Plan for purposes of
accounting (as if the deferred compensation had been so invested) and not for
actual investment. Since no participant deferrals or discretionary
contributions by the Company actually will be invested in any investment fund,
participants will not have any ownership interest in any investment fund. A
Benefits Committee appointed by the Board of Directors of the Company has the
sole discretion to determine the alternative benchmark investment funds
available under the Plan as the measurement mechanism to determine the rate of
return on amounts deemed invested in accordance with the terms of the Plan.
The obligations of the Company under the Plan (the "Obligations") are
unsecured general obligations to pay in the future the value of the vested
deferred compensation accounts adjusted to reflect the performance of the
selected measurement investment funds in accordance with the terms of the Plan.
The Obligations will rank without preference with other unsecured and
unsubordinated indebtedness of the Company from time to time outstanding and
are, therefore, subject to the risks of the Company's insolvency.
The Company is not required to fund or otherwise segregate assets to
be used for the payment of the Obligations. Notwithstanding the foregoing,
the Company may establish a trust to hold assets to be used for payment of
Obligations. The assets held by such trust will be subject to the claims of
the Company's general creditors.
Obligations are generally payable under the Plan upon (i) termination
of employment, (ii) death, (iii) a determination by the Benefits Committee
that a participant has suffered a financial hardship, (iv) the election of a
participant (subject to a 10% withdrawal penalty), and (v) at the election of
the participant, January of any year designated by the participant beginning
after the third anniversary of a participant's deferral.
The Obligations cannot be assigned, alienated, pledged or
encumbered. The Obligations are not convertible into any security of the
Company.
The Company may amend the Plan from time to time, except that no such
amendment may reduce the value of a participant's vested account balances to
less than the amount (as subsequently adjusted for earnings and losses) he
would be entitled to receive if he had resigned on the day of the amendment.
Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers and directors, subject to certain limitations.
The Certificate of Incorporation of the registrant expressly provides for
indemnification of an officer or director made a party or threatened to be
made a party to proceedings by reason of the fact that such person was an
officer or director. The Certificate of Incorporation also authorizes the
registrant to maintain officer and director liability insurance, and such a
policy is currently in effect.
Exhibits
4.1 Transaction Systems Architects, Inc. Deferred Compensation Plan
4.2 Transaction Systems Architects, Inc. Deferred Compensation Plan
Trust Agreement
5 Opinion of Legal Counsel
23 Consent of Arthur Andersen LLP
24 Power of Attorney (contained in signature page)
Undertakings
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.
2. That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Omaha, State of Nebraska, on
November 20, 1998.
TRANSACTION SYSTEMS ARCHITECTS, INC.
By: /s/ William E. Fisher
-------------------------------
William E. Fisher, Chief Executive
Officer, President and Director
POWER OF ATTORNEY
We, the undersigned officers and directors of Transaction Systems
Architects, Inc., hereby severally and individually constitute and appoint
William E. Fisher, Gregory J. Duman, and Dwight G. Hanson, and each of them,
the true and lawful attorneys and agents of each of us to execute in the name,
place and stead of each of us (individually and in any capacity stated below)
any and all amendments to this Registration Statement on Form S-8, and all
instruments necessary or advisable in connection therewith, and to file the
same with the Securities and Exchange Commission, each of said attorneys and
agents to have power to act with or without the other and to have full power
and authority to do and perform in the name and on behalf of each of the
undersigned every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any of the undersigned
might or could do in person, and we hereby ratify and confirm our signatures
as they may be signed by our said attorneys and agents and each of them to any
and all such amendments and other instruments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
- ------------------------- ------------------------- --------------------------
/s/ William E. Fisher Chief Executive Officer, November 20, 1998
- ------------------------- President and Director
William E. Fisher (Principal Executive Officer)
/s/ Gregory J. Duman Chief Financial Officer November 20, 1998
- ------------------------- (Principal Financial Officer)
Gregory J. Duman
/s/ Dwight G. Hanson Vice President November 20, 1998
- ------------------------- (Principal Accounting Officer)
Dwight G. Hanson
/s/ David C. Russell Director November 20, 1998
- -------------------------
David C. Russell
/s/ Promod Haque Director November 20, 1998
- -------------------------
Promod Haque
/s/ Charles E. Noell, III Director November 20, 1998
- -------------------------
Charles E. Noell, III
/s/ Jim D. Kever Director November 20, 1998
- -------------------------
Jim D. Kever
/s/ Larry G. Fendley Director November 20, 1998
- -------------------------
Larry G. Fendley
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Transaction Systems Architects, Inc. Deferred
Compensation Plan
4.2 Transaction Systems Architects, Inc. Deferred
Compensation Plan Trust Agreement
5 Opinion of Legal Counsel
23 Consent of Arthur Andersen LLP
24 Power of Attorney (contained in signature page)
TRANSACTION SYSTEMS ARCHITECTS, INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE 1 INTRODUCTION................................................1
1.1 Purpose of the Plan, Effective Date.........................1
1.2 Plan Administrator, Plan Year...............................1
1.3 The Employers...............................................1
1.4 Supplements.................................................1
ARTICLE 2 PLAN PARTICIPATION..........................................1
2.1 Eligibility.................................................1
2.2 Participation...............................................2
2.3 Cessation of Active Participation...........................2
ARTICLE 3 PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING.............3
3.1 Participants' Accounts......................................3
3.2 Deferral Contributions......................................3
3.3 Deferral Election...........................................4
3.4 Discretionary Contributions.................................5
3.5 Debiting of Distributions and Forfeitures...................5
3.6 Crediting of Earnings or Losses on Contributions............5
3.7 Errors in Accounts..........................................6
ARTICLE 4 INVESTMENT FUNDS............................................6
4.1 Selection by Committee......................................6
4.2 Participant Direction of Deemed Investments.................6
ARTICLE 5 PAYMENT OF ACCOUNT BALANCES.................................7
5.1 Benefit Payments Upon Termination of Service for
Reasons Other Than Death....................................7
5.2 Form of Distribution........................................8
5.3 Death Benefits..............................................9
5.4 InService Distributions.....................................9
5.5 Beneficiary Designation....................................11
ARTICLE 6 CLAIMS.....................................................12
6.1 Initial Claim..............................................12
6.2 Appeal.....................................................12
6.3 Satisfaction of Claims.....................................12
ARTICLE 7 NO FUNDING OF PLAN BENEFITS................................12
ARTICLE 8 COMMITTEE..................................................13
8.1 Committee's Duties.........................................13
8.2 Action by Plan Administration..............................14
8.3 Information Required for Plan Administration...............14
8.4 Decision of Committee Final................................14
8.5 Interested Committee Member................................14
8.6 Indemnification............................................15
ARTICLE 9 RELATING TO THE COMPANY....................................15
9.1 Action by Company..........................................15
ARTICLE 10 AMENDMENT AND TERMINATION..................................15
10.1 Amendment..................................................15
10.2 Termination................................................15
10.3 Distribution on Termination................................16
ARTICLE 11 GENERAL PROVISIONS.........................................16
11.1 Notices....................................................16
11.2 Nonalienation of Plan Benefits.............................16
11.3 Payment with Respect to Incapacitated Persons..............16
11.4 No Employment or Benefit Guaranty..........................16
11.5 Litigation.................................................17
11.6 Headings...................................................17
11.7 Evidence...................................................17
11.8 Gender and Number..........................................17
11.9 Waiver of Notice...........................................17
11.10 Applicable Law.............................................17
11.11 Severability...............................................17
11.12 Withholding for Taxes......................................17
11.13 Successors.................................................18
11.14 Effect on Other Employee Benefit Plans.....................18
CERTIFICATE
I, David P. Stokes, Secretary of Transaction Systems Architects, Inc.,
hereby certify that the attached document is a correct copy of the Transaction
Systems Architects, Inc. Deferred Compensation Plan effective as of January 1,
1999.
Dated this 20th day of November, 1998.
/s/ David P. Stokes
----------------------
David P. Stokes
(Corporate Seal)
TRANSACTION SYSTEMS ARCHITECTS, INC.
DEFERRED COMPENSATION PLAN
Article 1
Introduction
1.1 Purpose of the Plan, Effective Date. The Transaction
Systems Architects, Inc. Deferred Compensation Plan (the "Plan") has been
established by Transaction Systems Architects, Inc. (the "Company"), effective
as of January 1, 1999 (the "Effective Date"), with respect to Eligible
Employees (as defined in Section 2.1). The purpose of the Plan is to provide
certain Eligible Employees with an opportunity to defer the receipt and income
taxation of a portion of such employees' annual compensation. The Plan is
intended to be a plan that is unfunded and that is maintained primarily for
the purpose of providing deferred compensation to a select group of management
or highly compensated employees.
1.2 Plan Administrator, Plan Year. The Plan is administered by
the Compensation Committee of the Board of Directors of Transaction Systems
Architects, Inc. (the "Committee"). The Plan is administered on the basis of
a Plan Year which is the calendar year. Article 8 describes certain specific
powers, duties and responsibilities of the Committee with respect to the
administration of the Plan.
1.3 The Employers. The Company and its Subsidiaries are
referred to herein collectively as the "Employers" and individually as an
"Employer". A "Subsidiary" means any corporation more than 50 percent of the
voting stock of which is directly or indirectly owned by the Company.
1.4 Supplements. From time to time supplements may by amendment
be attached to and form a part of this Plan. Such supplements may modify or
supplement the provisions of the Plan as they apply to particular groups of
Eligible Employees (as defined in Section 2.1) or groups of Participants (as
defined in Section 2.2), shall specify the person affected by such supplements
and shall supersede the other provisions of the Plan to the extent necessary
to eliminate inconsistencies between the Plan provisions and the provisions of
such supplements.
Article 2.
Plan Participation.
2.1 Eligibility. Each employee of an Employer shall become an
Eligible Employee as of the date he is notified by the Committee that he has
been selected by the Committee to become an Eligible Employee. The Committee
shall consider such factors as it, in its sole discretion, considers pertinent
in selecting Eligible Employees. "Eligible Employee" means, for a Plan Year
or portion of a Plan Year, an individual:
(a) who is an employee of an Employer, exclusive of any
employee who provides services to an Employer under a contract or arrangement
with either the individual or with an agency or leasing organization that
treats the individual as either an individual contractor or an employee of
such agency or leasing organization, even if such individual is later
determined to have been a common law employee of the Employer rather than an
independent contractor or an employee of such agency or leasing organization;
(b) who is a member of a select group of management or
highly compensated employees; and
(c) either (i) who, for such Plan Year, has satisfied
such minimum compensation or other classification requirements established
from time to time by the Committee, or (ii) who otherwise is designated by the
Committee, in its sole discretion, as eligible to elect to participate in the
Plan.
2.2 Participation. Each Eligible Employee may irrevocably elect
to have Deferral Contributions made on his behalf for a Plan Year, or portion
of a Plan Year, pursuant to Section 3.2 and thereby become a Plan
Participant. "Participant" means any individual who has been admitted to, and
has not been removed from, participation in the Plan pursuant to this Article
2. A Participant must complete such forms and provide such data in a timely
manner as is required by the Committee. Such forms and data may include,
without limitation, his acceptance of the terms and conditions of the Plan and
his designation of a beneficiary to receive any death benefits payable
hereunder.
2.3 Cessation of Active Participation.
(a) Cessation of Eligible Status. A Participant shall
be considered an active Participant during any period when Deferral
Contributions are being made to the Plan on his behalf. A Participant's
active participation in the Plan shall cease as of the date his employment
with all Employers terminates. In addition, the Committee may remove a
Participant from active participation in the Plan if, as of any day during a
Plan Year, he ceases to satisfy the criteria which qualified him as an
Eligible Employee. Upon cessation of, or removal from, active participation in
the Plan, a Participant's deferrals under the Plan shall cease.
(b) Inactive Participant Status. 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 vested Plan Accounts (as defined in Section 3.1) is distributed from the
Plan, or (ii) the date he again recommences active participation in the Plan
as an Eligible Employee by electing to have Deferral Contributions made to the
Plan on his behalf pursuant to Section 3.2. During the period of time that an
employee is an inactive Participant in the Plan, his Plan Accounts shall
continue to be credited with earnings and losses pursuant to the terms of
Section 3.6, and he shall continue to be eligible to direct the manner in
which his Accounts shall be deemed invested pursuant to Section 4.2.
(c) Participation after Reemployment. If an Eligible
Employee terminates employment with all Employers (either before or after he
becomes a Participant) and then is reemployed by an Employer, he shall become
eligible to participate or to recommence his participation in the Plan as of
the date, on or after his reemployment date, that he is notified by the
Committee that he has been reselected by the Committee as an Eligible Employee
and that he may elect to have Deferral Contributions made to the Plan on his
behalf pursuant to Section 3.2.
(d) Application of ERISA. It is the intent of the
Company that the Plan be exempt from Parts 2, 3, and 4 of Subtitle B of Title
I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), as an unfunded plan that is maintained by the Company primarily for
the purpose of providing deferred compensation for a select group of
management or highly compensated employees (the "ERISA exemption").
Notwithstanding anything to the contrary in this Article 2 or in any other
provision of the Plan, the Committee may in its sole discretion exclude any
one or more Eligible Employees from eligibility to participate or from
participation in the Plan, may exclude any Participant from continued
participation in the Plan, and may take any further action it considers
necessary or appropriate if the Committee reasonably determines in good faith
that such exclusion or further action is necessary in order for the Plan to
qualify for, or to continue to qualify for, the ERISA exemption.
Article 3.
Participants' Accounts; Deferrals and Crediting
3.1 Participants' Accounts. The Committee shall establish and
maintain on behalf of each Participant the following separate bookkeeping
accounts (an "Account") under the Plan:
(i) Deferral Contribution Account. Each Participant
shall have a "Deferral Contribution Account" maintained on his behalf
under the Plan. With respect to any Participant, this Account shall
represent the amount of his Deferral Contributions (as defined in
Section 3.2) and earnings or losses attributable thereto.
(ii) Employer Contribution Account. Each Participant
shall have an "Employer Contribution Account" maintained on his
behalf under the Plan. With respect to any Participant, this Account
shall represent the amount of his Discretionary Contributions (as
defined in Section 3.4), if any, and earnings or losses attributable
thereto.
The Committee, in its discretion, may also establish and maintain
such additional separate bookkeeping accounts for the Participant as it shall
deem desirable. Each Participant shall at all times have a 100 percent vested
interest in his Deferral Contribution Account. A Participant's vested
interest in his Employer Contribution Account shall be determined by the
Committee, in its sole discretion, based on the vesting schedule specified by
the Company with respect to each Discretionary Contribution credited to the
Participant's Employer Contribution Account. Each Account of a Participant
shall be maintained until the value thereof has been distributed to or on
behalf of such Participant or his beneficiary.
3.2 Deferral Contributions. Each Participant may irrevocably
elect to have Deferral Contributions made on his behalf for a Plan Year by
completing and submitting to the Committee (or its designee) a Deferral
Election (as defined in Section 3.3) setting forth the terms of his election.
The Deferral Contribution made by a Participant with respect to any Plan Year
must be at least $5,000, or such Deferral Contribution, adjusted for earnings
or losses thereon in accordance with Section 3.6, will be automatically
distributed to the Participant on or before the last day of such Plan Year.
Notwithstanding the preceding sentence, if an Eligible Employee who first
becomes an Eligible Employee after the first day of a Plan Year elects to make
a Deferral Contribution with respect to such Plan Year, the minimum required
Deferral Contribution for such Participant shall be an amount equal to $5,000
multiplied by a fraction, the numerator of which is the number of full months
remaining in such Plan Year after the Deferral Election is effective and the
denominator of which is twelve. A "Deferral Contribution" means that portion
of a Participant's Base Salary and Variable Compensation that the Participant
elects to defer receipt of, in lieu of receiving such compensation currently.
"Base Salary" means the Participant's annual base salary from his Employer for
the Plan Year paid or payable in a regular salary paycheck while an active
Participant in the Plan. "Variable Compensation" means the Participant's
variable compensation, if any, from his Employer for the Plan Year, including
but not limited to, bonus amounts, management incentive compensation, and
sales commissions, paid or payable in a quarterly variable compensation
paycheck while an active Participant in the Plan. A Participant may elect to
defer, through pay reduction each payroll period, no less than one percent nor
more than 50 percent, in whole percentages, of his Base Salary for such
payroll period and may elect to defer, through pay reduction each calendar
quarter, no less than one percent nor more than 75 percent, in whole
percentages, of his Variable Compensation for such calendar quarter. Deferral
Contributions may only be made while the Participant is actively employed by
the Employer. For purposes of the Plan, a Participant will be considered
actively employed during a period of paid leave of absence or salary
continuation. A Participant will not be considered actively employed during a
period of unpaid leave of absence. Notwithstanding the foregoing, a
Participant's Deferral Contributions shall be reduced by the Committee, in its
sole discretion, to the extent necessary to provide the Participant with
sufficient Base Salary and Variable Compensation to satisfy his employment tax
deductions, wage withholding and any other payroll deductions.
3.3 Deferral Election. A Participant must complete and submit a
written Deferral Election to the Committee providing for the reduction of his
Base Salary and Variable Compensation for the appropriate amount of Deferral
Contributions. The following terms and conditions shall apply to Deferral
Elections:
(a) Initial Deferral Election. The Eligible Employee's
initial Deferral Election under the Plan with respect to his Base Salary for
any Plan Year shall be effective for the first regular salary paycheck earned
after the date the Deferral Election becomes effective. The Eligible
Employee's initial Deferral Election under the Plan with respect to his
Variable Compensation, if any, for any Plan Year shall be effective for the
first quarterly Variable Compensation paycheck earned after the date the
Deferral Election becomes effective. To be effective, the initial Deferral
Election under the Plan with respect to Base Salary must be made within the
time period prescribed by the Committee (generally, before the first day of
the Plan Year for which Deferral Contributions attributable to Base Salary
will be made or, if later during such Plan Year, within 30 days after the date
on which the Eligible Employee first becomes an Eligible Employee pursuant to
Section 2.1). To be effective, the initial Deferral Election under the Plan
with respect to Variable Compensation, if any, must be made within the time
period prescribed by the Committee (generally, before the first day of the
Plan Year for which the Variable Compensation to be deferred will be earned
or, if later during such Plan Year, within 30 days after the date on which the
Eligible Employee first becomes an Eligible Employee pursuant to Section
2.1). Until such time as an Eligible Employee submits an initial Deferral
Election in a timely manner, he shall be deemed to have elected not to make
Deferral Contributions and to have elected not to become a Participant in the
Plan.
(b) Subsequent Deferral Election. A Participant's
subsequent Deferral Election with respect to his Base Salary for any Plan Year
must be made before the first day of the Plan Year for which the Base Salary
to be deferred is payable. A Participant's subsequent Deferral Election with
respect to his Variable Compensation, if any, for any Plan Year must be made
before the first day of the Plan Year for which the Variable Compensation to
be deferred is earned.
(c) Term. Each Participant's Deferral Election shall
remain in effect for the Base Salary and Variable Compensation, if any, earned
during a Plan Year until the earlier of (i) the date the Participant ceases to
be an active Participant, or (ii) the automatic revocation of a Deferral
Election pursuant to Section 5.4(a) or 5.4(b). If a Participant is
transferred from the employment of one Employer to the employment of another
Employer, his Deferral Election with the first Employer will remain in effect
and will apply to his Base Salary and Variable Compensation, if any, from the
second Employer until the earlier of those events set forth in the preceding
sentence.
(d) Crediting Contributions. For each Plan Year that a
Participant has a Deferral Election in effect, the Committee shall credit the
amount of such Participant's Deferral Contributions to his Deferral
Contribution Account on the day such amount would have been paid to him but
for his Deferral Election (or such other date or time as the Committee, in its
sole discretion, determines from time-to-time).
3.4 Discretionary Contributions. As of the last business day of
each Plan Year (or such other date or time as the Committee, in its sole
discretion, determines from time-to-time), the Committee shall credit any
Discretionary Contributions made with respect to an active Participant for
such Plan Year to such Participant's Employer Contribution Account.
"Discretionary Contribution" means a discretionary amount contributed to the
Plan by the Company with respect to an active Participant who is making
Deferral Contributions for such Plan Year. The Company may, but is not
obligated to, make a Discretionary Contribution for a Plan Year for any one or
more active Participants, which Discretionary Contributions may be different
amounts or different percentages of compensation for each such active
Participant and which Discretionary Contributions will vest in accordance with
the vesting schedule specified by the Company on the date each such
Discretionary Contribution is made.
3.5 Debiting of Distributions and Forfeitures. As of each
business day, the Committee shall debit each Participant's Accounts for any
amount distributed or forfeited from such Accounts since the immediately
preceding business day.
3.6 Crediting of Earnings or Losses on Contributions. As of
each business day, the Committee shall credit to each Participant's Accounts
the amount of earnings or losses applicable thereto for the period since the
immediately preceding business day. To effect such crediting of earnings and
losses, the Committee shall, as of each business day, first subtract all
distributions since the immediately preceding business day from the Account,
add to the Account the amount of the contributions, and allocate the net
earnings or losses to the Participant's Account based on the individual
account activity of the Account during such period pursuant to a share
accounting method under which each Participant's deemed investment in an
Investment Fund (as defined in Section 4.1) shall be accounted for in deemed
shares in funds selected by the Committee and offered within the Plan for
purposes of calculating earnings and losses for Participants' Accounts. For
this purpose, the Committee shall adopt uniform rules which conform generally
to accepted accounting practices.
3.7 Errors in Accounts. If an error or omission is discovered
in the Account of a Participant, in the amount of a Participant's deferrals,
or in the amount of Discretionary Contributions credited to the Participant's
Account, the 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.
Article 4
Investment Funds
4.1 Selection by Committee. From time to time, the
Committee shall select two or more investment funds (the "Investment Funds")
for purposes of determining the rate of return on amounts deemed invested in
accordance with the terms of the Plan. The Committee will notify Participants
in writing prior to the beginning of each Plan Year and at such other times as
the Committee deems necessary or desirable of the Investment Funds available
under the Plan for such Plan Year. The Committee may change, add or remove
Investment Funds on a prospective basis at any time and in any manner it deems
appropriate.
4.2 Participant Direction of Deemed Investments. Each
Participant generally may direct the manner in which his Accounts 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 rate of return to be credited to his Accounts, 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 Accounts
hereunder.
(b) Investment of Contributions. Except as otherwise
provided in this Section 4.2, each Participant may make an investment
election, made in such form as the Committee may direct or permit, prescribing
the percentage of his future 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 or recommences participation in
the Plan and shall apply to all contributions credited to such Participant's
Accounts after such date. Such Participant may make subsequent investment
elections at such times as permitted by the Committee, and such elections
shall apply to all such specified contributions credited to such Participant's
Accounts 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.
Notwithstanding anything to the contrary in this subsection (b), the
Participant may make a separate investment election with respect to the
contributions credited to his Accounts for each and every Plan Year.
(c) Investment of Existing Account Balances. Each
Participant may make an investment election, effective as of the date the
Participant commences or recommences 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 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.
Notwithstanding anything to the contrary in this subsection (c), the
Participant may make a separate investment election with respect to that
portion of his existing Account balances attributable to the contributions
credited to his Accounts for each and every Plan Year.
(d) Committee Discretion. The 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 Committee that are inconsistent with the deadlines or procedures specified
in this Section 4.2 shall supersede such provisions of this Section 4.2
without the necessity of a Plan amendment.
Article 5
Payment of Account Balances
5.1 Benefit Payments Upon Termination of Service for Reasons
Other Than Death.
(a) General. In accordance with the terms of
subsection (b) hereof, if a Participant's employment with the Employers
terminates for any reason other than death, he (or his beneficiary, if he dies
after such termination of employment but before distribution of his vested
Accounts) shall be entitled to receive a distribution of the total of (i) the
entire vested amount credited to his Accounts, as adjusted for earnings or
losses attributable thereto, determined as of the last business day of the
calendar quarter in which his employment with the Employers terminates; plus
(ii) the amount of Deferral Contributions and vested Discretionary
Contributions, if any, made since such business day; and minus (iii) the
amount of any distributions made to the Participant since such business day.
(b) Timing of Distribution. The distribution of the
vested benefit payable to a Participant under this Section shall be made or
commence as soon as reasonably practicable after the last business day of the
calendar quarter in which the Participant's employment with the Employers
terminates for any reason other than death.
5.2 Form of Distribution.
(a) Lump Sum Payment. Except as provided in
subsection (b) hereof, the vested benefit payable to a Participant under
Section 5.1 shall be distributed in the form of a lump sum payment.
(b) Quarterly Installments. A Participant may elect,
in writing, at the time he makes his Deferral Election, or at any later time
that is at least one year before his retirement date, to have any vested
benefit payable under Section 5.1 on account of the Participant's retirement
on or after attainment of age 50 and accumulation of 60 Points (as described
below) paid in the form of quarterly installments over a five, ten or fifteen
year period; provided, if the Participant's vested Account balances are less
than $60,000 on his employment termination date, his entire vested Account
balances shall be paid in the form of a lump sum payment as provided in
Section 5.2(a) hereof. In the event a Participant elects to have any vested
benefit payable under Section 5.1 paid in the form of quarterly installments,
such Participant may elect, in writing, at any time that is at least one year
before his retirement date, to have his vested benefit paid in the form of a
lump sum payment. In the event a Participant elects to have any vested
benefit payable under Section 5.1 on account of his retirement on or after
attainment of age 50 and accumulation of 60 Points paid in the form of a lump
sum payment, such Participant may elect, in writing, at any time that is at
least one year before his retirement date, to have his vested benefit paid in
the form of annual installments over a five, ten or fifteen year period. A
Participant shall be credited with one Point for each whole year of his age
and for each whole year of his service as an employee of an Employer,
commencing with his date of hire by an Employer and ending with the date he
terminates employment with all of the Employers. The Committee shall have
complete discretion to adopt and revise rules for determining Participants'
years of service for purposes of the preceding sentence.
(i) The installment payments shall be made in
quarterly installments (adjusted for earnings or losses
between payments in accordance with Section 3.6), commencing
as soon as reasonably practicable after the last business
day of the calendar quarter in which the Participant
terminated employment, and continuing each successive
calendar quarter thereafter.
(ii) If a Participant dies after payment of his
vested Account balances from the Plan has begun, but before
his entire vested Account balances have been distributed,
the remaining amount of his vested Account balances shall
continue to be distributed to the Participant's beneficiary
on the same scheduled payment dates and using the
installment method of distribution elected by the
Participant.
(iii) Notwithstanding anything in this
subsection (b) to the contrary, if the Participant elected
at least one year before his employment termination date to
have any vested benefit payable under Section 5.1 paid in
the form of quarterly installments and the Committee, in its
sole discretion, determines the Participant has a
"Disability" at the time his employment terminates, his
entire vested Accounts shall be paid in the form of
quarterly installment payments as so elected by the
Participant. "Disability" shall have the same meaning as
when used in the TSA 401(k) Plan. The decision of the
Committee as to Disability shall be final and binding.
5.3 Death Benefits. If a Participant's employment with the
Employers terminates due to his death, the Participant shall have a 100
percent vested interest in his Employer Contribution Account, if any. Such
Participant's beneficiary shall be entitled to receive a lump sum distribution
of the total of (i) the entire amount credited to such Participant's Accounts,
as adjusted for earnings or losses attributable thereto, determined as of the
last business day of the calendar quarter in which the Participant died; plus
(ii) the amount of Deferral Contributions and Discretionary Contributions made
since such business day, if any; and minus (iii) the amount of any
distributions made to or on behalf of the Participant since such business
day. If such Participant was an active Participant on the day immediately
prior to his death (that is, Deferral Contributions were being made to the
Plan on behalf of the Participant for the Plan Year of his death), such active
Participant's beneficiary shall also receive a lump sum pre-retirement death
benefit equal to $100,000. The benefits payable under this Section 5.3 shall
be distributed to such beneficiary as soon as reasonably practicable after the
last business day of the calendar quarter in which the Participant died.
5.4 In-Service Distributions.
(a) Hardship Distributions. Upon receipt of a written
application for an in-service hardship distribution and the Committee's
decision, made in its sole discretion, that a Participant has suffered a
"Financial Hardship", the Participant shall be entitled to receive an
in-service distribution from his vested Account balances. "Financial
Hardship" shall mean a severe financial hardship to the Participant resulting
from a sudden and unexpected illness or accident of the Participant or the
Participant's dependent (as defined in Section 152(a) of the Internal Revenue
Code of 1986, as amended (the "Code")), 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 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
Committee; provided, the Participant will be deemed not to have a Financial
Hardship to the extent that such hardship is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise; (ii) by liquidation
of the Participant's assets, to the extent the liquidation of assets would not
itself cause severe financial hardship; or (iii) by cessation of deferrals
under the Plan. Examples of what are not considered to be Financial Hardships
include the need to send a Participant's child to college or the desire to
purchase a home. Such distribution shall be paid in a lump sum payment as
soon as reasonably practicable after the Committee determines that the
Participant has incurred a Financial Hardship. The amount of such lump sum
payment shall not exceed the total of (i) the entire vested amount credited to
the Participant's Accounts, as adjusted for earnings or losses attributable
thereto, determined as of the business day on which such distribution is
processed; plus (ii) the amount of Deferral Contributions and vested
Discretionary Contributions made since such business day, if any; and minus
(iii) the amount of any distributions made to the Participant since such
business day; and, the amount of such lump sum payment shall be further
limited to the amount that the Committee determines is reasonably necessary to
meet the Participant's requirements resulting from the Financial Hardship.
For purposes of this subsection, the "business day on which such distribution
is processed" refers to the business day established for such purpose by
administrative practice, even if actual payment is made at a later date due to
delays in valuation, administration or any other procedure. The amount of
such distribution shall reduce the Participant's Account balances as provided
in Section 3.5. A Participant who receives an in-service hardship
distribution shall not be eligible to make Deferral Contributions under the
Plan or be credited with any Discretionary Contributions for the remainder of
the Plan Year in which such distribution is made and for the next following
Plan Year, and such Participant's current Deferral Election, if any, shall be
automatically revoked. When such Participant is again eligible to make
Deferral Contributions, such Participant may resume active participation in
the Plan by making a new Deferral Election and satisfying any other procedures
for participation under Section 2.2.
(b) Distributions with Forfeiture. Notwithstanding any
other provision of this Article 5 to the contrary, a Participant may elect, in
writing, at any time prior to the complete distribution of his vested Plan
Accounts, to receive a distribution of 90 percent of the total of (i) the
entire vested amount credited to his Accounts, as adjusted for earnings or
losses attributable thereto, determined as of the last business day of the
month preceding the date of his distribution election; plus (ii) the amount of
Deferral Contributions and vested Discretionary Contributions made since such
business day, if any; and minus (iii) the amount of any distributions made to
the Participant since such business day. Such distribution shall be made as
soon as reasonably practicable after the date of the Participant's
distribution election under this subsection (b). As of the date such
distribution is made, an amount equal to ten percent of such Participant's
total Account balances determined as of the business day immediately prior to
the date such distribution is made, both vested and nonvested portions, shall
be permanently and irrevocably forfeited, and such Participant shall not be
eligible to make Deferral Contributions under the Plan or to be credited with
any Discretionary Contributions for the remainder of the Plan Year in which
such distribution is made and for the next following Plan Year, and such
Participant's current Deferral Election, if any, shall be automatically
revoked. When such Participant is again eligible to make Deferral
Contributions, such Participant may resume active participation in the Plan by
making a new Deferral Election and satisfying any other procedures for
participation under Section 2.2. The amount of the distribution and the
amount of the forfeiture under this subsection (b) shall reduce the
Participant's Account balances as provided in Section 3.5.
(c) Specified In-Service Distributions.
Notwithstanding any other provision of this Article 5 to the contrary, a
Participant may elect on his Deferral Election to receive an in-service
distribution of the aggregate Deferral Contributions made pursuant to such
Deferral Election, as adjusted for earnings or losses attributable thereto and
reduced for any distributions thereof under subsection (a) or (b) above,
determined as of the December 31 immediately preceding the date such
distribution is made. Such distribution shall be made in a lump sum payment
in January of the Plan Year designated by the Participant on his Deferral
Election provided that such Plan Year begins after the third anniversary of
the date the Deferral Contribution to be distributed would have been paid to
the Participant but for his Deferral Election. The amount of such
distribution shall reduce the Participant's Deferral Contribution Account
balance as provided in Section 3.5. Any portion of the Participant's Deferral
Contribution Account which is not distributed under this subsection (c) shall
be distributed in accordance with Section 5.1 or 5.3, whichever is applicable,
and shall remain available for distributions under this Section 5.4. If the
Participant's employment with the Employers terminates for any reason prior to
the payment of his in-service distribution hereunder, his in-service
distribution election shall be cancelled and of no effect and the
Participant's Deferral Contribution Account shall be distributed in accordance
with Section 5.1 or 5.3, whichever is applicable. In the event a Participant
elects to receive an in-service distribution under this subsection (c), such
Participant may elect, in writing, at any time that is at least one year
before the first day of the January that the in-service distribution would
otherwise be paid, to defer such in-service distribution to any succeeding
January.
(d) Deductible Limit. Notwithstanding anything in the
Plan to the contrary, the distribution of a Participant's benefit hereunder
shall be limited to an amount that would not cause the Participant to receive
compensation that the Committee determines would not be deductible under Code
Section 162(m). Any amount that is not distributed to the Participant
pursuant to the preceding sentence shall be distributed to the Participant, as
adjusted for earnings or losses attributable thereto, as soon as reasonably
practicable after the Committee determines that such distribution would be
permissible under the terms and conditions of the preceding sentence.
5.5 Beneficiary Designation. Participants shall designate and
from time to time may redesignate their beneficiaries to receive any death
benefits that may be payable under the Plan upon such Participant's death in
such form and manner as the Committee may determine. In the case of a
Participant who is legally married on the date of his death, his beneficiary
shall be his surviving spouse unless such spouse validly consents in writing
to a different beneficiary designation or the Participant establishes to the
satisfaction of the Committee that the consent cannot be obtained because
there is no spouse, the spouse cannot be found or some other reasonable
excuse. In the event that:
(i) a Participant dies without designating a
beneficiary;
(ii) the beneficiary designated by a
Participant is not alive when a payment is to be made to
such person under the Plan, and no contingent beneficiary
has been designated; or
(iii) the beneficiary designated by a
Participant cannot be located by the Committee within one
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.
Article 6
Claims
6.1 Initial Claim. Claims for benefits under the Plan may be
filed with the Committee on forms or in such other written documents, as the
Committee may prescribe. The Committee shall furnish to the claimant written
notice of the disposition of a claim within 90 days after the application
therefor 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 or submit the claim
for review.
6.2 Appeal. Any Participant or beneficiary who has been denied
a benefit shall be entitled, upon request to the 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 Committee's
possession in order to prepare the appeal. The request for review, together
with a written statement of the claimant's position, must be filed with the
Committee no later than 60 days after receipt of the written notification of
denial of a claim provided for in Section 6.1. The Committee's decision shall
be made within 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.
6.3 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 Committee and the Company, either 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
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 Committee or the
Company receives a proper receipt and release.
Article 7
No Funding of Plan Benefits
The Company may establish a trust (known as a "grantor trust" within
the meaning of the Code) for the purpose of accumulating funds to satisfy the
obligations incurred by the Company under the Plan. Notwithstanding the
preceding sentence, nothing herein shall require the Company to segregate or
set aside any funds or other property for the purpose of paying any benefits
under the Plan. Nothing contained in this Plan, and no action taken pursuant
to its provisions by the Company or the Committee shall create, nor be
construed to create, a trust of any kind or a fiduciary relationship between
the Company and the Participant, his beneficiary, or any other person.
Benefits hereunder shall be paid from assets which shall continue, for all
purposes, to be a part of the general, unrestricted assets of the Company.
The obligation of the Company hereunder shall be an unfunded and unsecured
promise to pay money in the future. To the extent that the Participant or his
beneficiary is entitled to receive payments from the Company under the
provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Company; no such person shall have nor
acquire any legal or equitable right, interest or claim in or to any property
or assets of the Company. It is intended that the Plan be unfunded for tax
purposes and for purposes of Title I of ERISA.
Article 8
Committee
8.1 Committee's Duties. The Committee is the plan
administrator. Except as otherwise specifically provided and in addition to
the powers, rights and duties specifically given to the Committee elsewhere in
the Plan, the Committee shall have the following discretionary powers, rights
and duties:
(a) To construe and interpret the Plan, to decide all
questions of Plan eligibility, to determine the amount, manner and time of
payment of any benefits under the Plan, and to remedy ambiguities,
inconsistencies or omissions in its sole and complete discretion.
(b) To adopt such rules of procedure as may be
necessary for the efficient administration of the Plan and as are consistent
with the Plan, and to enforce the Plan in accordance with its terms and such
rules.
(c) To make determinations as to the right of any
person to a benefit, to afford any person dissatisfied with such determination
the right to a hearing thereon, and to direct payments or distributions in
accordance with the provisions of the Plan.
(d) To furnish the Company and Participants with such
information as may be required by them for tax or other purposes in connection
with the Plan.
(e) To enroll Participants in the Plan, distribute and
receive Plan administration forms and comply with all applicable governmental
reporting and disclosure requirements.
(f) To employ agents, attorneys, accountants, actuaries
or other persons (who also may be employed by an Employer), and to allocate or
delegate to them such powers, rights and duties as the Committee considers
necessary or advisable to properly carry out the administration of the Plan,
provided that any such allocation or delegation and the acceptance thereof
must be in writing.
(g) To report at least annually to the Board of
Directors of the Company or to such person or persons as the Board of
Directors of the Company designates as to the administration of the Plan, any
significant problems which have developed in connection with the
administration of the Plan and any recommendations which the Committee may
have as to the amendment of the Plan or the modification of Plan
administration. At least once for each Plan Year, the Committee shall cause a
written statement of a Participant's Account balances to be distributed to the
Participant.
8.2 Action by Plan Administration. During a period in which two
or more Committee members are acting, any action by the Committee will be
subject to the following provisions:
(a) The Committee may act by meeting (including a
meeting from different locations by telephone conference) or by document
signed without meeting, and documents may be signed through the use of a
single document or concurrent documents; 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.
(b) A Committee member by writing may delegate part or
all of his rights, powers, duties and discretion to any other Committee
member, with such other Committee member's consent.
(c) No member of the Committee shall be liable or
responsible for an act or omission of other Committee members in which the
former has not concurred.
(d) The 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 other written direction on behalf of the Committee.
8.3 Information Required for Plan Administration. The Employers
shall furnish the Committee with such data and information as the Committee
considers necessary or desirable to perform its duties with respect to Plan
administration. The records of an Employer as to an employee's or
Participant's period or periods of employment, termination of employment and
the reason therefor, leaves of absence, reemployment and base salary and
variable compensation will be conclusive on all persons unless determined to
the Committee's satisfaction to be incorrect. Participants and other persons
entitled to benefits under the Plan also shall furnish the Committee with such
evidence, data or information as the Committee considers necessary or
desirable for the Committee to perform its duties with respect to Plan
administration.
8.4 Decision of Committee Final. Subject to applicable law and
Article 6, any interpretation of the provisions of the Plan and any decision
on any matter within the discretion of the Committee made by the Committee in
good faith shall be binding on all persons. A misstatement or other mistake
of fact shall be corrected when it becomes known and the Committee shall make
such adjustment on account thereof as the Committee considers equitable and
practicable.
8.5 Interested Committee Member. If a member of the Committee
is also a Participant in the Plan, he may not decide or determine any matter
or question concerning his benefits unless such decision or determination
could be made by him under the Plan if he were not a Committee member.
8.6 Indemnification. No person (including any present or former
Committee member, and any present or former director, officer or employee of
the Company) shall be personally liable for any act done or omitted to be done
in good faith in the administration of the Plan. Each present or former
director, officer or employee of the Company to whom the Committee or the
Company has delegated any portion of its responsibilities under the Plan and
each present or former Committee member shall be indemnified and saved
harmless by the Company (to the extent not indemnified or saved harmless under
any liability insurance or other indemnification arrangement with respect to
the Plan) from and against any and all claims of liability to which they are
subjected by reason of any act done or omitted to be done in good faith in
connection with the administration of the Plan, including all expenses
reasonably incurred in their defense if the Company fails to provide such
defense. 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 upon his own
part, excepting his own willful misconduct.
Article 9
Relating to the Company
9.1 Action by Company. Any action required or permitted of the
Company under the Plan shall be by resolution of its Board of Directors or by
a duly authorized committee of its Board of Directors, or by a person or
persons authorized by resolution of its Board of Directors or such committee.
Article 10
Amendment and Termination
10.1 Amendment. While the Company expects and intends to
continue the Plan, the Company must necessarily reserve and hereby does
reserve the right to amend the Plan from time to time. Any amendment of the
Plan will be by resolution of the Board of Directors of the Company or any
committee of the Board of Directors to whom such authority has been
delegated. Notwithstanding the preceding sentence, the Committee may amend
the Plan in the following respects without the approval of the Board of
Directors of the Company: (i) amendments required by law; (ii) amendments
that relate to the administration of the Plan and that do not materially
change the cost of the Plan; and (iii) amendments that are designed to resolve
possible ambiguities, inconsistencies, or omissions in the Plan and that do
not materially increase the cost of the Plan. No amendment shall reduce the
value of a Participant's vested Account balances to less than the amount (as
subsequently adjusted for earnings and losses attributable thereto) he would
be entitled to receive if he had resigned from the employ of all of the
Employers on the day of the amendment.
10.2 Termination. The Plan will terminate on the first to occur
of the following:
(a) The date it is terminated by the Company.
(b) The date the Company is judicially declared
bankrupt or insolvent.
(c) The dissolution, merger, consolidation or
reorganization of the Company, or the sale of all or substantially all of its
assets, except that in any such event arrangements may be made whereby the
Plan will be continued by any successor to the Company or any purchaser of all
or substantially all of its assets without a termination thereof, in which
case the successor or purchaser will be substituted for the Company under the
Plan.
10.3 Distribution on Termination. On termination of the Plan,
each affected Participant's Accounts shall be fully vested and shall be
distributed in a lump sum payment as soon as practicable after the date the
Plan is terminated. The amount of any such distribution shall be determined
as of the business day on which such distribution is processed. For purposes
of this Section, the "business day on which such distribution is processed"
refers to the business day established for such purpose by administrative
practice, even if actual payment is made at a later date due to delays in
valuation, administration or any other procedure. Such determination shall be
binding on all Participants and beneficiaries.
Article 11
General Provisions
11.1 Notices. Any notice or document relating to the Plan
required to be given to or filed with the Committee or the Company shall be
considered as given or filed if delivered or mailed by registered or certified
mail, postage prepaid, to the Committee, in care of the Company.
11.2 Nonalienation of Plan Benefits. The rights or interests of
any Participant or any Participant's beneficiaries to any benefits or future
payments under the Plan shall not be subject to attachment or garnishment or
other legal process by any creditor of any such Participant or beneficiary nor
shall any such Participant or beneficiary have any right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits or rights
which he may expect to receive under the Plan, except as may be required by
the tax withholding provisions of the Code or a state's income tax act.
11.3 Payment with Respect to Incapacitated Persons. If any
person entitled to benefits under the Plan is under a legal disability or, in
the Committee's opinion, is incapacitated in any way so as to be unable to
manage his financial affairs, the Committee may direct the payment of such
benefits to such person's legal representative or to a relative or friend of
such person for such person's benefit, or the Committee may direct the
application of such benefit for the benefit of such person in any manner which
the Committee may select that is consistent with the Plan. Any payments made
in accordance with the foregoing provisions of this Section 11.3 shall be a
full and complete discharge of any liability for such payments.
11.4 No Employment or Benefit Guaranty. None of the
establishment of the Plan, any modification thereof, the creation of any fund
or account, or the payment of any benefits shall be construed as giving to any
Participant or other person any legal or equitable right against the Company
or the Committee except as provided herein. Under no circumstances shall the
maintenance of this Plan constitute a contract of employment or shall the
terms of employment of any Participant be modified or in any way affected
hereby. Accordingly, participation in the Plan will not give any Participant
a right to be retained in the employ of any Employer.
11.5 Litigation. In any action or proceeding regarding any Plan
benefits or the administration of the Plan, employees or former employees of
the Employers, their beneficiaries and any other persons claiming to have an
interest in the Plan shall not be necessary parties and shall not be entitled
to any notice of process. Any final judgment which is not appealed or
appealable and which may be entered in any such action or proceeding shall be
binding and conclusive on the parties hereto and on all persons having or
claiming to have any interest in the Plan. Acceptance of participation in the
Plan shall constitute a release of the Company, the Committee and their agents
from any and all liability and obligation not involving willful misconduct or
gross neglect.
11.6 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.
11.7 Evidence. Evidence required of anyone under the Plan shall
be signed, made or presented by the proper party or parties and may be by
certificate, affidavit, document or other information which the person acting
thereon considers pertinent and reliable.
11.8 Gender and Number. Words denoting the masculine gender
shall include the feminine and neuter genders, the singular shall include the
plural and the plural shall include the singular wherever required by the
context.
11.9 Waiver of Notice. Any notice required under the Plan may be
waived by the person entitled to notice.
11.10 Applicable Law. The Plan shall be construed in accordance
with the laws of the State of Nebraska.
11.11 Severability. Whenever possible, each provision of the Plan
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or any other jurisdiction, and the Plan shall be
reformed, construed and enforced in such jurisdiction so as to best give
effect to the intent of the Company under the Plan.
11.12 Withholding for Taxes. Notwithstanding any other provisions
of the Plan, the Company may withhold from any payment to be made under the
Plan such amount or amounts as may be required for purposes of complying with
the tax withholding provisions of the Code, any state or local income tax act
or any applicable similar laws.
11.13 Successors. The Plan is binding on all persons entitled to
benefits hereunder and their respective heirs and legal representatives, on
the Committee and its successor and on the Company and its successor, whether
by way of merger, consolidation, purchase or otherwise.
11.14 Effect on Other Employee Benefit Plans. Any benefit paid or
payable under this Plan shall not be included in a Participant's or employee's
compensation for purposes of computing benefits under any employee benefit
plan maintained or contributed to by an Employer except as may otherwise be
required under the terms of such employee benefit plan.
TRANSACTION SYSTEMS ARCHITECTS, INC.
DEFERRED COMPENSATION PLAN TRUST
This Trust Agreement made effective this 1st day of January, 1999, by
and between Transaction Systems Architects, Inc. (hereinafter called the
"Company") and First American Trust Company (hereinafter called the "Trustee"),
as Trustee.
WITNESSETH:
WHEREAS, Company has adopted the Transaction Systems Architects, Inc.
Deferred Compensation Plan (the "Plan"), a nonqualified deferred compensation
plan; and
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan with respect to the individuals participating in such Plan;
and
WHEREAS, Company wishes to establish this trust (hereinafter called
the "Trust") and to contribute to the Trust assets which shall be held as
herein set forth, subject to the claims of Company's creditors in the event of
Company's Insolvency, as herein defined, until paid to Plan participants and
their beneficiaries in such manner and at such times as specified in the Plan;
and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of
1974; and
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan.
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held, and disposed of as follows:
Section 1. Establishment of Trust.
(a) Company hereby deposits with Trustee in trust the amount of
$1.00, which shall become the principal of the Trust to be held, administered,
and disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established is revocable by Company; it
shall become irrevocable upon a Change in Control, as defined in Section 13(d).
(c) The Trust is intended to be a grantor trust, of which
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon, shall
be held separate and apart from other funds of Company, and, after the Trust
has become irrevocable, shall be used exclusively for the uses and purposes of
Plan participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plan and this Trust Agreement shall be mere unsecured contractual
rights of the Plan participants and their beneficiaries against Company. Any
assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined
in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in trust with
Trustee to augment the principal to be held, administered, and disposed of by
Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan
participant or beneficiary shall have any right to compel such additional
deposits.
(f) Within thirty days following a Change in Control (as
defined in Section 13(d)), the Company shall make an irrevocable contribution
to the Trust in an amount that is sufficient to pay the Plan participants or
their beneficiaries the benefits to which the Plan participants or their
beneficiaries would be entitled pursuant to the terms of the Plan as of the
Change in Control. Within such thirty-day period, the Company shall also make
an irrevocable contribution to the Trust in the amount of $10,000 to fund an
expense reserve for the Trustee.
Section 2. Payments to Plan Participants and Their Beneficiaries.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or available under
the Plan), and the time of commencement for payment of such amounts. Except
as otherwise provided herein, Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment
Schedule. At the direction of Company, Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to
the terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by Company, or
such party as it shall designate under the Plan, and any claim for such
benefits shall be considered and reviewed under the procedures set out in the
Plan.
(c) Company may make payment of benefits directly to the Plan
participants or their beneficiaries as they become due under the terms of the
Plan. Company shall notify Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants or
their beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, Company shall make the balance of each
such payment as it falls due. Trustee shall notify Company where principal
and earnings are not sufficient.
Section 3. Trustee Responsibility Regarding Payments to the Trust
Beneficiary When Company is Insolvent.
(a) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if Company is Insolvent. Company shall
be considered "Insolvent" for purposes of this Trust Agreement if (i) Company
is unable to pay its debts as they become due, or (ii) Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the Trust shall
be subject to claims of general creditors of Company under federal and state
law as set forth below.
(1) The Board of Directors and the Chief Executive
Officer of Company shall have the duty to inform Trustee in writing of
Company's Insolvency. If a person claiming to be a creditor of Company alleges
in writing to Trustee that Company has become Insolvent, Trustee shall
promptly notify Company in writing of such allegation and, pending
determination of whether Company is Insolvent, Trustee shall discontinue
payment of benefits to Plan participants or their beneficiaries. Company
shall confirm or deny Insolvency in a writing delivered to Trustee within 15
days after receipt from Trustee of such notification. If Company denies the
allegation of Insolvency or fails to respond within such 15 day period,
Trustee shall thereupon determine whether Company is Insolvent. Company
agrees to reimburse Trustee for all reasonable fees and disbursements paid by
Trustee to accountants, financial consultants or other professionals to assist
it in performing its duties pursuant to this Section 3(b)(1).
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming to be a
creditor alleging that Company is Insolvent, Trustee shall have no duty to
inquire whether Company is Insolvent. Trustee may, in all events, rely on
such evidence concerning Company's solvency as may be furnished to Trustee and
that provides Trustee with a reasonable basis for making a determination
concerning Company's solvency. Evidence upon which Trustee may rely as
aforesaid includes but is not limited to written notice from any of Company's
Board of Directors, Chief Executive Officer, Chief Financial Officer, a Senior
Vice President or General Counsel, its current independent accountant or
outside attorney, or an accountant or outside attorney employed by Trustee, or
written notice of the appointment of a receiver of any of Company's property
by any court in the United States.
(3) If at any time Trustee has determined that Company
is Insolvent, Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of
Company's general creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their beneficiaries to pursue
their rights as general creditors of Company with respect to benefits due
under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to
Plan participants or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof, and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due to
Plan participants or their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any payments made
to Plan participants or their beneficiaries by Company in lieu of the payments
provided hereunder during any such period of discontinuance.
Section 4. Payments to Company.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payment
of benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plan.
Section 5. Investment Authority.
(a) With respect to the Trust Fund, Trustee shall have the
following powers and rights, in addition to those vested in it elsewhere in
this Trust Agreement or by law:
(1) To invest the Trust Fund in such bonds, notes,
debentures, mortgages, equipment trust certificates, investment trust
certificates, preferred or common stock, equity interests in other entities,
derivatives and futures contracts, insurance and annuity contracts, common or
collective trust funds, shares of investment companies, shares of open-ended
investment companies registered under the Investment Company Act of 1940, as
amended, including any such company for which Trustee, or an affiliate
thereof, is acting as an investment advisor, or in such other property, real
or personal, as Trustee may deem advisable, with the care, skill, prudence,
and diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; and
(2) To temporarily invest and reinvest the funds in
any marketable short- and medium-term fixed income securities (including
demand and short-term notes and those commonly known as "Master Notes"),
United States Treasury Bills, other short- and medium-term government
obligations, commercial paper, other money market instruments and part
interests in any one or more of the foregoing, or may maintain cash balances
consistent with the liquidity needs of the Plan; and
(3) To invest and reinvest all or any part of the
Trust Fund through the medium of any pooled investment fund or group trust
(which pooled investment fund or group trust may be trusteed by Trustee or one
or more affiliates of Trustee) which is invested principally in the property
of the kind authorized for investment of the Trust Fund; and
(4) To retain, manage, improve, repair, operate, and
control all property, real or personal, at any time comprising part of the
Trust Fund; and
(5) To manage, sell, contract to sell, grant options
to purchase, convey, exchange, partition, lease for any term (even though such
term commences in the future or may extend beyond the duration of the Trust),
and otherwise dispose of the Trust Fund from time to time in such a manner,
for such consideration, and upon such terms and conditions as Trustee, in its
discretion, shall determine; and
(6) Except as otherwise provided in Section 5(d) below
or directed pursuant to 5(c) below, to vote any corporate stock, either in
person or by proxy, for any person; to exercise or sell any stock subscription
or conversion right; to participate in voting trusts; to consent to, take any
action in connection with, and receive and retain any securities resulting
from any merger, consolidation, reorganization, readjustment of the financial
structure, liquidation, sale, lease or other disposition of the assets of any
corporation or other organization the securities of which may constitute a
portion of the Trust Fund; and
(7) To keep any property in the name of a nominee with
or without disclosure of any fiduciary relationship; and
(8) To take any action with respect to conserving or
realizing upon the value of any property in the Trust Fund; to collect, pay,
contest, compromise, or abandon demands of or against the Trust Fund; to pay
any tax, assessment or other charge attributable to the interest of any Plan
participant; and
(9) To deposit securities in a security depository and
permit the securities so deposited to be held in the name of the depository's
nominee, and to deposit securities issued or guaranteed by the United States
government or any agency or instrumentality thereof, including securities
evidenced by book entry rather than by certificate, with the United States
Department of the Treasury, a Federal Reserve Bank, or other appropriate
custodial entity, in the same account as Trustee's own property, provided
Trustee's records and accounts show that such securities are assets of the
Trust Fund; and
(10) Generally, to do all acts, whether or not
expressly authorized, which Trustee deems necessary or desirable, but acting
at all times according to the principles expressed in Section 8.
(b) Trustee shall place securities orders, settle securities
trades, hold securities in custody, and conduct other related activities on
behalf of the Trust in such a fashion so as to obtain for the Trust the best
execution of each securities transaction and full disclosure of all
relationships, including all forms of compensation arrangements, with any
broker or dealer that Trustee may use, including any affiliate of Trustee upon
condition that such broker or agent commission charged by any affiliate of
Trustee shall not exceed that normally charged by such affiliate to its
unaffiliated customers for similar securities transactions. Fees and
commissions paid to a broker or dealer shall be reviewed and approved by
Trustee, prior to using such broker or dealer, as part of its exercise of
care, skill, prudence, and diligence under Section 8(a).
Trustee is authorized to disclose such information as is necessary
to the operation and administration of the Trust to such persons or
organizations that Trustee determines have a legitimate business purpose for
obtaining such information.
(c) Company may direct the Trustee in writing to segregate all
or any portion of the assets of the Trust in a separate account or accounts
and may appoint one or more investment advisors or, prior to a Change in
Control, an investment committee established by Company to direct the
investment and reinvestment of each such account or accounts. Any such
appointment shall be in writing and shall delineate the duties,
responsibilities, and liabilities of the investment advisor or investment
committee with respect to the assets of the Trust under the control of the
investment advisor or investment committee. Any such investment advisor
appointed by Company shall be an independent person or entity, but members of
the investment committee may be employees of Company or any of its
affiliates. Notwithstanding the foregoing, subsequent to a Change in Control
(as defined in Section 13(d)), (i) any appointment or termination of
appointment of an investment advisor by Company requires the prior written
consent of a majority of the Plan participants; and (ii) any account that was
subject to the direction of an investment committee immediately prior to the
Change in Control shall be invested and reinvested by Trustee from and after
the Change in Control, either as a separate investment account or combined
with the other assets of the Trust, in accordance with Sections 5(a), 5(b) and
5(d) hereof unless and until an investment advisor is appointed by Company
with the prior written consent of a majority of the Plan participants for such
account.
Trustee shall be under no duty to question, or make inquiries as to,
any action or direction of any investment advisor or investment committee as
provided herein, or any failure to give directions, or to review the
securities subject to the investment direction of any investment advisor or
investment committee, or to make any suggestions to an investment advisor or
investment committee with respect to investment and reinvestment of, or
disposing of investments in, the assets of the Trust subject to the investment
discretion of any investment advisor or investment committee, unless Trustee
knows that by such action or failure to act it will be participating in a
breach of fiduciary duty by the investment advisor or investment committee.
Notwithstanding the foregoing, the Trustee, without obtaining prior
approval or direction from an investment advisor or investment committee,
shall invest cash balances held by it from time to time in short-term cash
equivalents and, furthermore, shall sell such short-term cash equivalents as
may be necessary to carry out the instructions of an investment advisor or
investment committee.
If the appointment of any investment advisor or investment committee
with respect to a separate account is terminated by the Company without the
appointment of a successor thereto, the separate account may continue to be
maintained as a separate account or may be combined with the other assets of
the Trust in the sole discretion of the Trustee and, in any event, shall be
invested and reinvested by the Trustee in accordance with Sections 5(a), 5(b),
and 5(d) hereof.
(d) Trustee may invest in securities (including stock or rights
to acquire stock) or obligations issued by Company; provided Trustee first
obtains the prior written consent of Company to such investments unless such
investment is a de minimis amount held in common investment vehicles in which
Trustee invests. Except as otherwise provided in Section 5(c), all rights
associated with assets of the Trust shall be exercised by Trustee or the
person designated by Trustee, and shall in no event be exercisable by or rest
with Plan participants, except that voting rights with respect to Trust assets
that are securities or obligations issued by Company will rest with Company.
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 assets
held by the Trust. This right is exercisable by Company in a nonfiduciary
capacity without the approval or consent of any person in a fiduciary capacity.
(e) Each insurance contract or policy issued shall provide that
Trustee shall be the owner thereof with the power to exercise all rights,
privileges, options and elections granted by or permitted under such contract
or policy or under the rules of the insurer. The exercise by Trustee of any
incidents of ownership under any contract or policy shall, prior to a Change
in Control, be subject to the direction of Company. After a Change in
Control, Trustee shall have the right to exercise any incidents of ownership
under any contract or policy in its sole discretion.
Trustee shall have no power to name a beneficiary of the contract or
policy other than the Trust, to assign the contract or policy (as distinct
from conversion of the contract or policy to a different form) other than to a
successor Trustee, or to loan to any person the proceeds of any borrowing
against an insurance contract or policy held in the Trust Fund. However,
notwithstanding the foregoing provisions of this Section 5(e), prior to a
Change in Control, Trustee may loan to Company the proceeds of any borrowing
against an insurance policy held as an asset of the Trust.
No insurer shall be deemed to be a party to the Trust and an
insurer's obligations shall be measured and determined solely by the terms of
contracts, policies and other agreements executed by the insurer.
Section 6. Disposition of Income.
During the term of this Trust, all income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.
Section 7. Accounting by Trustee.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within 60 days following the close of each calendar year
and within 60 days after the removal or resignation of Trustee, Trustee shall
deliver to Company a written account of its administration of the Trust during
such year or during the period from the close of the last preceding year to
the date of such removal or resignation, setting forth all investments,
receipts, disbursements, and other transactions reported to or effected by it.
Section 8. Responsibility of Trustee.
(a) Trustee shall act with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person acting
in like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
Trustee shall incur no liability to any person for any action taken pursuant
to a direction, request, or approval given by Company which is contemplated
by, and in conformity with, the terms of the Plan or this Trust, and is given
in writing by Company. The claim of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by the Plan
Committee (as such term is defined in the Plan) in its sole and absolute
discretion under the procedures set out in the Plan. If necessary the Trustee
may apply to a court of competent jurisdiction to resolve a dispute over such
benefit claims or to resolve a dispute between the Company or the Plan
Committee and any party other than the Trustee (or its affiliates), and the
Company shall reimburse the Trustee for all the reasonable costs and expenses
involved.
(b) Trustee may consult with legal counsel (who, prior to a
Change in Control (as defined in Section 13(d)), may also be counsel for
Company generally but who, following a Change in Control, must be independent
legal counsel) with respect to any of its duties or obligations hereunder.
(c) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants, or other professionals to assist it in
performing any of its duties or obligations hereunder.
(d) Trustee shall have, without exclusion, all powers conferred
on Trustee by applicable law, unless expressly provided otherwise herein.
(e) Notwithstanding any powers granted to Trustee pursuant to
this Trust Agreement or to applicable law, Trustee shall not have any power
which could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of Section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
(f) No Trustee shall be required to furnish bond or other
security except as herein expressly provided or except if required to do so
under applicable federal law.
(g) In the event of a garnishment, attachment, levy, or other
legal process by a creditor of Company of any of the assets of the Trust under
circumstances set out in Section 3(b) hereof where Trustee cannot ascertain
the Insolvency of Company, Trustee may interplead the assets of the Trust into
the court where the creditor has brought such action.
(h) To the extent permitted by law, Trustee shall be
indemnified and saved harmless by Company from and against any and all claims
of liability, damages, penalties, judgments, expenses, including reasonable
attorneys' fees, to which it is subjected by reason of any act done or omitted
to be done in good faith in connection with the Trust or the investment of the
Trust, including all expenses reasonably incurred in its defense if Company
fails to provide such defense (collectively "Damages"); provided, however,
Trustee shall not be indemnified and saved harmless with respect to Damages
caused by Trustee's willful misconduct, negligence, failure to follow
directions given in accordance with the provisions of the Trust by an
investment advisor, investment committee, Company or any person duly
authorized by Company or, if Trustee is required by law to act without the
receipt of such directions, by its failure to act in the absence of such
directions.
Section 9. Compensation and Expenses of Trustee.
Company shall pay all administrative and Trustee's fees and
expenses, including fees for services provided by persons appointed or hired
pursuant to Sections 3(b)(1), 5(c), 8(b) or 8(c). If not so paid, the fees
and expenses shall be paid from the Trust. Notwithstanding anything to the
contrary in this Section 9, prior to a Change in Control (as defined in
Section 13(d)) neither Company nor the Trust shall have any obligation to pay
any fee or expense attributable to services rendered by a third party unless
Company gave its prior written approval of the appointment, hiring or
retention of such third party. Such prior written consent shall not be
required following a Change in Control.
Section 10. Resignation and Removal of Trustee.
(a) Prior to a Change in Control (as defined in Section 13(d)),
Trustee may resign at any time by written notice to Company, which shall be
effective 60 days after receipt of such notice unless Company and Trustee
agree otherwise. Following a Change in Control, Trustee may resign only after
the appointment of a successor Trustee.
(b) Trustee may be removed by Company on one days notice prior
to a Change in Control. Subsequent to a Change in Control, Trustee may only
be removed by Company with the written consent of a majority of the Plan
participants.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 30 days after
resignation or removal.
(d) If the Trustee resigns or is removed, a successor shall be
appointed by Company, in accordance with Section 11 hereof, by the effective
date of resignation or removal under Sections 10(a) or 10(b). If no such
appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses
of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust to the same extent as though Trustee had
received the advance written consent of Company to incurring such expenses.
Section 11. Appointment of Successor.
If Trustee resigns or is removed in accordance with Section 10(a) or
10(b) hereof, Company may appoint, subject to Section 10, any third party
national banking association with capital and surplus exceeding $100,000,000
as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the successor
Trustee. The successor Trustee shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or the successor Trustee to evidence the transfer.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan unless sooner revoked in accordance with
Section 1(b) hereof. Upon termination of the Trust, any assets remaining in
the Trust shall be returned to Company.
(c) Notwithstanding the foregoing, subsequent to a Change in
Control (as defined in Section 13(d)), this Trust Agreement may only be
amended or terminated by Company with the written consent of a majority of the
Plan participants.
Section 13. Miscellaneous.
(a) Any provisions of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged, encumbered, or subjected to
attachment, levy, execution, or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with laws of the State of Nebraska.
(d) For purposes of this Trust Agreement, Change in Control
shall mean the purchase or other acquisition by any person, entity or group of
persons, within the meaning of section 13(d) or 14(d) of the Securities
Exchange Act of 1934 ("Act") , or any comparable successor provisions, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Act) of 30 percent or more of either the outstanding shares of common stock or
the combined voting power of Company's then outstanding voting securities
entitled to vote generally, or the approval by the stockholders of Company of
a reorganization, merger, or consolidation, in each case, with respect to
which persons who were stockholders of Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than 50 percent of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
Company's then outstanding securities, or of a liquidation or dissolution of
Company or of the sale of all or substantially all of Company's assets.
(e) Until further notice from either party hereto, any notices
delivered pursuant to this Trust Agreement and all other communications shall
be in writing and shall be delivered, sent or transmitted to the persons at
the addresses and facsimile numbers set forth hereunder. All notices and
other communications shall be effective when received. The party seeking to
rely on notice having been given under this paragraph shall be responsible for
ascertaining its receipt.
For Company:
Transaction Systems Architects, Inc.
224 S. 108th Avenue
Omaha, NE 68154
Attn.: Judith L. Miller
Facsimile No. 402-390-8077
For Trustee:
First American Trust Company
2100 Fifth Avenue
San Diego, CA 92101
Box 34666
San Diego, CA 92163-4666
Attn.: Denise C. Mehus
Facsimile No. 619-615-4966
(f) This Trust Agreement between Company and Trustee contains
the entire understanding between the parties with respect to its subject
matter and, as of the effective date of this Trust Agreement, it supersedes
and entirely replaces any and all prior agreements between Company and Trustee
with respect to the subject matter of this Trust Agreement.
(g) This Trust Agreement shall be binding upon and inure to the
benefit of the parties hereof and their heirs, successors, and assignees.
This Trust Agreement is not assignable by any party without the express
written consent of the other party.
(h) Titles and captions used in this Trust Agreement are
included for convenience of reference only and in no way define or delimit any
provisions or otherwise alter the construction or effect.
(i) Where the context permits, words in the masculine gender
shall include the feminine and neuter genders, the singular shall include the
plural, and the plural shall include the singular.
(j) Each of the parties to this Trust Agreement hereby
represents and warrants that it is duly authorized and empowered to execute,
deliver, and perform this Trust Agreement.
(k) This Trust Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
counterparts shall, together, constitute only one agreement.
Section 14. Effective Date.
The effective date of this Trust Agreement shall be the 1st day of
January, 1999.
IN WITNESS WHEREOF, this Trust Agreement is executed as of the day
and year first above written.
TRANSACTION SYSTEMS ARCHITECTS, INC.
ATTEST BY: /s/ Judith L. Miller By: /s/ Dwight G. Hanson
--------------------------------
Name: Dwight G. Hanson
Title: Chief Financial Officer
(Principal Financial Officer)
FIRST AMERICAN TRUST COMPANY
as Trustee
ATTEST BY: /s/ Patricia Schmitt By /s/ Denise Mehus
--------------------------------
Name: Denise Mehus
Title: Vice President
Erickson & Sederstrom
A Professional Corporation
Regency Westpointe
10330 Regency Parkway Drive, Suite 100
Omaha, Nebraska 68114-3761
November 20, 1998
Board of Directors
Transaction Systems Architects, Inc.
224 South 108th Avenue
Omaha, Nebraska 68154
Re: Transaction Systems Architects, Inc. (the "Company")
Gentlemen:
We refer to the registration, on a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of
$30,000,000 of deferred compensation obligations (the "Obligations") of the
Company under the Company's Deferred Compensation Plan (the "Plan"). We have
reviewed the Plan, the Deferred Compensation Plan Trust, the charter and by-laws
of the Company, corporate proceedings of the Board of Directors relating to the
Plan, and such other documents, corporate records and questions of laws as we
have deemed necessary to the rendering of the opinions expressed below.
Based upon the foregoing, we are of the opinion that the Obligations, when
issued in accordance with the provisions of the Plan, will be valid and binding
obligations of the Company, enforceable in accordance with their terms, except
as may be limited by the effect of bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting the rights and remedies of creditors
generally, by the effect of general principles of equity (whether in an action
at law or a proceeding in equity), or by the effect of the laws of usury or
other laws or equitable principles relating to or limiting the interest rate
payable on indebtedness.
We express on opinion as to the laws of any jurisdiction other than the
laws of the State of Nebraska.
We hereby consent to the filing of this opinion as a exhibit to the
Registration Statement.
Very truly yours,
Samuel E. Clark
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-8 Registration Statement of our reports dated
October 30, 1997, included in Transaction Systems Architects, Inc.'s Annual
Report on Form 10-K for the fiscal year ended September 30, 1997 and to all
references to our Firm included in this Registration Statement.
Arthur Andersen LLP
Omaha, Nebraska,
November 20, 1998
