§22.103PROXY STATEMENTS : STRATEGY & FORMS
22-119A © 1985 Jefren Publishing Company,
EXHIBIT C
BURROUGHS EMPLOYEES SAVINGS THRIFT PLAN INTRODUCTION
1. Purpose of the Plan
The Burroughs Employees Savings Thrift Plan has been established to encourage savings
and to provide retirement and other benefits by:
a. Permitting eligible Employees to defer a portion of their Compensation;
b. Providing Matching Contributions from the Company; andc. Permitting eligible Employees to make Additional Voluntary Employee
Contributions.
2. Trust
a. The Burroughs Employees Savings Trust has been established:
(i) To receive Tax Deferred Contributions elected by Members and subsequent earnings thereon:
(ii) To receive Matching Contributions from the Company and subsequent earnings thereon:
(iii) To receive Additional Voluntary Employee Contributions of Members and subsequent earnings thereon: and
(iv) To be the exclusive source of payment of benefits.
b. The Trust will be invested and managed under the terms of this Plan and under the terms of the related Trust Agreement.
EFFECTIVE DATE
3 . Effective Date
The Plan is effective July 1, 1984.
DEFINITIONS
4. Definitions
a. "Administrative Committee" shall mean the committee appointed by the Board of
Directors, charged with the general administration of the Plan as provided in section
32 hereof.
b. "Affiliate" shall mean any corporation which is a member of the controlled group of corporations, as defined in section 1563(a) of the Code (determined without regard to
section 1563(a)(4) and (e)(3)(C)). of which Burroughs Corporation is the common
parent.
c. "Associated Company" shall mean any corporation or organization which is not a member of the controlled group of corporations described in section 4.b., but of which
the Company directly or indirectly is the owner of 10% or more of any class of equity
securities, or which is a trade or business under common control (within the meaning
of section 414(c) of the Code) with the Company or an Affiliate, or which is a
member of an affiliated service group (within the meaning of section 414(m) of the
November 198522-119
Code) which includes the Company or an Affiliate.
d. "Beneficiary" shall mean the person or persons designated by a Member or determined under the applicable provisions of the Plan to receive the death benefit s, if
any, which may be payable thereunder.
e. "Board of Directors" shall mean the Board of Directors of Burroughs Corporation.
f. "Burroughs Stock" shall mean Burroughs Corporation common stock.
g. "Code" shall mean the Internal Revenue Code of 1954, as amended from time to time.
h. "Company" shall mean Burroughs Corporation and, where appropriate, any domestic Affiliate thereof (or any domestic Affiliate of a domestic Affiliate thereof) whic h has
adopted the Plan with the approval of the Board of Directors.
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i. "Compensation" shall mean the Employee's salary or wage from the Company,
including shift premiums, commissions, Company payments for time not worked
while in active employment status, and Tax Deferred Contributions under this Plan,
but excluding all other forms of compensation including, without limitation, overtime,
payments under the Burroughs Executive or Senior Manager Bonus Plans (including
any successor annual bonus plan), payments under the Burroughs Long-Term
Incentive Plan, lump sum payments under a termination plan or any similar
arrangement, overseas supplements, unused vacation (including banked vacation
days), prizes or other awards, and any payments or allowances for specific or
contingent expenses.
j. "Disability" or "Disabled" shall mean or refer to a Member who is unable to perform his regular job and who has exhausted his short-term disability benefits under the
Company's Group Insurance Plan or other Plan providing similar short-term disability
benefits.
k. "Earnings" shall mean the consolidated net income of Burroughs Corporation for financial reporting purposes, before deductions of Tax Deferred Contributions and
Matching Contributions under this Plan.
l. "Employee" shall mean any person, including any officer, employed by the Company, who receives Compensation from the Company other than in the form of a retirement
benefit, severance pay, retainer or fee under contract. The term "Employee" shall not
include:
(i) Any person who is covered by a collective bargaining agreement to which the Company is a party, and which agreement does not provide for participation in
this Plan;
(ii) Any person who is classified as a temporary, a Co-operative or an intern;
(iii) Any person who is not paid in the United States.
m. "Employment Commencement Date" shall mean the date on which an Employee first
performs an Hour of Service for the Company, an Affiliate or an Associated
Company, or the first date following a Period of Severance of 12 or more consecutive
months in which an Employee performs an Hour of Service for the Company, an
Affiliate, e, or an Associated Company.
n. "ERISA" shall mean the "Employee Retirement Income Security Act of 1974", as amended from time to time.
o. "Hour of Service" shall mean each hour computed and credited in accordance with Department of Labor Regulations Section 2530.200b-2 for which an Employee is paid
or is entitled to payment for the performance of duties for the Company, an Affiliate,
or an Associated Company or for which back pay has been awarded or agreed upon.
p. "Investment Committee" shall mean the committee appointed by the Board of
Directors, responsible for management of the Investment Funds and possessing these
rights and powers provided in section 32 hereof.
q. "Investment Fund" shall mean any fund established by the Investment Committee pursuant to section 35 in which Members may elect that their accounts be invested.
r. "Investment Manager" shall mean the individual(s), corporation(s), or other entity(ies) and their (its) successors appointed under agreements entered into between the
Company and the Investment Manager for the management of assets of the Trust.
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s. "Key Employee" shall have the meaning set forth in section 416(i) of the Code.
t. "Member" shall mean any eligible Employee who is participating in the Plan. or any
person who was formerly an eligible Employee and who has an account or accounts
under the Plan.
u. "Period of Service" shall mean the period commencing on an Employee's Employment Commencement Date and ending on the Employee's next Severance
from Service Date, including any Period of Severance of less than 12 consecutive
months.
v. "Period of Severance" shah mean the period of time commencing on the Severance from Service Date and ending on the date on which an Employee again performs an
hour of Service for the Company, an Affiliate, or an Associated Company.
w. "Plan shall mean the Burroughs Employees Savings Thrift Plan.
x. "Plan Year" shall mean the calendar year. y. "Service shall mean the aggregate of an Employee's Periods of Service, provided that:
(i) A Company-approved leave of absence will not constitute an interruption of Service until the earlier of:
(A) The Employee's retirement,
(B) The end of the Plan Year of the Employee's attainment of age 6.5, (C) The Employee's Termination of Employment.
(ii) A Member who is absent from work because of occupational injury or disease incurred in the course of employment with the Company or an Affiliate or an
Associated Company and on account of such absence receives workers'
compensation will be deemed to be on Company-approved leave of absence·
(iii) A Member who is given a leave of absence to enter duty in the Armed Forces of the United States will be deemed to be on Company-approved leave of absence
for the period of such duty provided the Member returns to active employment
upon termination of such duty.
(iv) A Member who is absent from work and receives short-term disability benefits under the Company's Group Insurance Plan or other plan of the Company, an
Affiliate or an Associated Company providing similar benefits, or a Disabled
Member, shall be deemed to be on Company-approved leave of absence for the
period of such short-term benefits or Disability.
(v) A period of lay-off will not constitute an interruption in Service for a Member in such status provided the Member has employment reinstatement rights and is
reinstated to active employment.
z. "Severance from Service Date" shall mean the earlier of: (i) The date on which an Employee quits, retires, is discharged, or dies, or
(ii) The first anniversary of the first date on which an Employee remains absent from employment with the Company, an Affiliate, or an Associated Company for any
reason other than those set forth in subdivision (i) of this section 4.z. or a
Company-approved leave of absence described in section 4.y.(i) or a lay-off
which does not constitute an interruption of Service under section 4.y.(v).
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22-119E © 1985 Jefren Publishing Company,
aa. "Termination of Employment" shall occur:
(i) If the Employee quits;
(ii) If the Employee is discharged or released:
(iii) If the Employee does not return to active employment upon expiration of a Company-approved leave of absence:
(iv) If the Employee refuses recall from a lay-off, or if his seniority is broken. A Termination of Employment shall not occur if the Employee tranfers from the
Company to an Affiliate or Associated Company, or resigns from or is laid off by the
Company in order to accept immediate employment by an Affiliate or Associated
Company.
bb. "Trust" shall mean the trust established by section 2 of the Plan. cc. "Trustee" shall mean the bank(s) or trust company(ies) or its (their) successors, under the Trust Agreement(s) entered into between the Company and the Trustee for the
purpose of managing the Trust.
dd. The "United States" shall be deemed to include the District of Columbia, Puerto Rico,
and the Virgin Islands
ee. "Wages" shall mean the amount of "compensation" of an Employee for a Plan Year, within the meaning of section 415 of the Code.
ff. The masculine pronoun wherever used herein shall include the feminine if applicable· 5. Eligibility on Effective Date
a. Each Employee who is employed by the Company on the Effective Date and who ha s
one year of Service is eligible to participate in the Plan on the Effective Date.
b. An Employee who was employed by System Development Corporation and who has an account balance in the SDC Savings and Stock Ownership Plan on the day prior to
the Effective Date is
automatically eligible to participate in the Plan on the Effective Date.
c. An Employee who was employed by the Company and who was a contributory member of the Burroughs Employees Retirement Income Plan on June 30, 1984, is
automatically eligible to participate in the Plan on the Effective Date.
6. Eligibility After Effective Date
An Employee who was not eligible to participate in the Plan on the Effective Date will be
eligible to participate on the first payday of the quarter following the completion by such
Employee of one year of Service.
PARTICIPATION
7. In General
Each Employee who is eligible under section 5 or section 6 may elect to have T ax
Deferred Contributions and Matching Contributions made on his behalf as of the first
payday of any quarter after the Effective Date for each payroll period during which he is
eligible under the Plan. Each eligible Employee who elects to have the maxi mum Tax
Deferred Contribution made on his behalf is eligible to make Additional Voluntary
Employee Contributions.
8. Tax Deferred Contributions
November 198522-119
a. A Tax Deferred Contribution shall be made by the Company on behalf of an eligible
Employee following the receipt of a signed election form, in accordance with
procedures established by the Administrative Committee, on which the Employee
elects to have Tax Deferred Contributions made on his behalf in an amount equal to a
percentage, designated to whole 1% increments, of his Compensation and on which
said employee authorizes his Compensation to be reduced by an equal amount. The
initial maximum percentage which may be elected for any Plan Year shall be 6% of
Compenstion. The initial percentage may be increased or decreased from time to time
by the Board of Directors as specified in a resolution passed at a meeting of the B oard
of Directors before the beginning of the Plan Year in which the increase or decrease is
first to take effect. Provided, however, that Tax Deferred Contributions shall not
exceed the maximum allowed by section 43 and deductible by the Company under
Code section 404, taking into account Matching Contributions under section 9.
b. Tax Deferred Contributions must be made from current or accumulated Earnings of the Company.
c. The election of an eligible Employee to have Tax Deferred Contributions made on his
behalf by the Company shall continue until the receipt of a signed notice of change or
discontinuance of said election, in accordance with procedures established by the
Administrative Committee, or earlier Termination of Employment.
(i) The Tax Deferred Contribution percentage elected on behalf of an eligible Employee may be increased or decreased by said Employee as of the first payday
of any calendar quarter, subject to the limitations of paragraph a, of this section 8.
(ii) Tax Deferred Contributions on behalf of an eligible Employee may be
discontinued by said Employee at any time.
d. In the event of a discontinuance of an Employee's election to have Tax Deferred Contributions made on his behalf in any manner specified in paragraph c. of this
section 8, said Employee will be suspended from active participation in this Plan and
will not be eligible to have Tax Deferred Contributions or Matching Contributions
made on his behalf or to make Additional Voluntary Employee Contributions for a
period of six months.
e. An eligible Employee who has elected that Tax Deferred Contributions made on his behalf by the Company under this Plan shall be discontinued may elect to re-enrol l
in the Plan on the first payday of any month following the month in which his
suspension has reached six full months; such re-enrollment shall be in accordance with
procedures established by the Administrative Committee and subject to the limit ation
of paragraph a. of this section 8.
f. Notwithstanding any provisions in this Plan to the contrary, the Actual Deferral Percentage for a Plan Year with respect to eligible Employees whose Compensation i s
among the highest one-third of all eligible Employees for said Plan Year shall not
exceed the greater of (i) or (ii) below:
(i) The Actual Deferral Percentage for the eligible Employees whose Compensation is
among the lowest two-thirds of all eligible Employees multiplied by 1.5;
(ii) The lesser of (A) or (B) below:
(A) The Actual Deferral Percentage for the eligible Employees whose Compensation is among the lowest two-thirds of all eligible Employees,
§22.103PROXY STATEMENTS : STRATEGY & FORMS
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multiplied by 2.5;
(B) The Actual Deferral Percentage for the eligible Employees whose Compensation is among the lowest two-thirds of all eligible Employees
increased by three percentage points.
g. For purposes of para ??aph f. of this section 8, the Actual Deferral Percentage for a specified group of eligible Employees for a Plan Year shall be the average of the rati os
(calculated separately for each Employee in the group) of:
(i) The sum of the amount of Tax Deferred Contributions actually paid to the Trust on behalf of each such Employee for such Plan Year, to
(ii) The Employee's Compensation for such Plan Year.
h. In the event that the elections under paragraph a. of this section 8 by eligible E mployees
whose Compensation is among the highest one-third of all eligible Employees would
cause the Actual Deferral Percentage for such Employee to exceed the limitat ion
specified in paragraph f. of this section 8, the percentages elected by said eligi ble
Employees whose Compensation is among the highest one-third of all eligible
Employees shall be reduced in 1/10% increments, commencing with elections by those
of the said Employees with the highest Actual Deferral Percentage then in effect, to the
extent necessary to eliminate such excess.
i. The Administrative Committee shall establish nondiscriminatory rules, consistent with
the regulations under the Code, whereby contributions may be decreased or suspended
to meet the requirements of paragraph f. of this section 8 or whereby contributions
which would otherwise exceed the allowable Tax Deferred Contributions may be treated
as Additional Voluntary Employee Contributions or refunded to Employees.
j. Any eligible Employee who has elected maximum Tax Deferred Contributions for a Plan year shall not cease to be eligible to make Additional Voluntary Employee
Contributions merely because such Employee's election is modified pursuant to
paragraph h. of this section 8.
9. Matching Contributions
a. A Matching Contribution shall be made for each Plan Year by the Company on behalf of
each eligible Employee who has a Tax Deferred Contribution election in effect duri ng
such Plan Year. The Matching Contribution shall be in an amount equal to a percentage
not in excess of 100% of the Tax Deferred Contributions made on behalf of such
Employee during said Plan Year. The initial percentage shall be 40% of such Tax
Deferred Contributions not in excess of 6% of such Employee's Compensation. The
initial percentage may be increased by the Board of Directors in a resolution passed at a
meeting of the Board of Directors held before the ??inning of the Plan Year in whic h the
increase or decrease is first to take effect.
b. Matching Contributions must be made from current or accumulated Earnings of the Company.
10. Additional Voluntary Employee Contributions
a. An Employee who is eligible under section 7 to make Additional Voluntary Employee Contributions may make such contributions following submission to the Company of a
signed form in accordance with procedures established by the Administrative
Committee, on which he elects to make Additional Voluntary Employee Contributions
November 198522-119
and authorizes payroll deductions from his Wages of a. percentage, designated in whole
1% increments of his Compensation. The initial maximum percentage which may be
elected for any Plan Year shall be 10%, subject to the limitations of section 43. The
maximum percentage may be increased or decreased from time to time by the Boa rd of
Directors in a resolution passed at a meeting of the Board of Directors held before t he
beginning of the Plan Year in which the increase or decrease is first to take effect (but
shall not exceed the maximum percentage permitted for qualification of the Plan under
the Code).
b. An eligible Employee shall continue Additional Voluntary Employee Contributions until a signed notice of change or discontinuance is filed in accordance with
procedures established by the Administrative Committee.
(i) The percentage of Additional Voluntary Employee Contributions made by an eligible Employee may be increased or decreased as of the first payday of any
quarter, by changing the percentage of Compensation subject to the election in
accordance with the limitations of paragraph a. of this section 10.
(ii) Additional Voluntary Employee Contributions may be discontinued by an eligible Employee at any time and shall be automatically discontinued if Tax Deferre d
Contributions on behalf of the Employee are discontinued or the Employee ceases
to be eligible to make Additional Voluntary Employee Contributions under the
rules of section 7.
c. In the event Of a discontinuance of an Employee's election to make Additional Voluntary Employee Contributions, said Employee will be suspended from eligibility
to make Additional Voluntary Employee Contributions under this Plan for a period of
six months.
d. An eligible Employee who has elected to discontinue Additional Voluntary Employee Contributions may elect to renew such Contributions on the first payday of any month
following the month in which his suspension has reached six full months: such renewal
shall be in accordance with procedures established by the Administrative Committee
and subject to the limitations of paragraph a. of this section 10.
e. This Plan may accept in the Additional Voluntary Employee Contributions account, directly o?? by employee rollover pursuant to section 402(a)(5) or section 408(d)(3) of
the Code, transfers of accounts from any qualified retirement plan, in accordance with
procedures established by the Administrative Committee.
RETIREMENT BENEFITS
11. Normal Retirement Date
A Member's Normal Retirement Date is the first day of the month following the Membe r's
65th birthday. Upon attaining age 65. a Member shall be 100% Vested in his Matching
Contribution account. Retirement on other than the Normal Retirement Date is provide d
for in section 12 and 13.
12. Postponed Retirement Date
A Members's Postponed Retirement Date is the first day of any month in which a Mem ber
retires following his Normal Retirement Date. A Member may postpone retirement beyond
his Normal Retirement Date in accordance with the Company established employment
policy and applicable law. Thereafter, the Member shall file with the Company a n
application for retirement in such form as the Administrative Committee shall prescribe.
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13.Early Retirement Date
A Member's Early Retirement Date is the date on which the Member retires, prior to his
Normal Retirement Date, under any Company defined benefit plan under which he is
entitled to immediate benefits. The Member shall file with the Company a n application for
early retirement in such form as the Administrative Committee shall prescribe.
14. Disability
a The retirement date for a Disabled Member shall be the first day of any month
following Disability.
November 198522-119
b. A Member who is on a Company approved disability leave of absence may not retire
during the continuance of short-term disability benefits under the Company's Group
Insurance Plan or other plan providing similar short-term disability benefits.
15. Retirement Benefits
The benefits of a Member who retires shall be based on the balances in his Tax Deferred
Contributions, Matching Contributions, and Additional Voluntary Employee Contributions
accounts on his retirement date.
16. Lump Sum Distribution
The normal form of distribution to each Member who retires from the Company, or
Affiliates, or Associated Company shall be a lump sum distribution of the Member's account
balances attributable to Tax Deferred Contributions, Matching Contributions, and
Additional Voluntary Employee Contributions. Distribution shall be in cash except that the
Member may elect to receive in kind all the Burroughs Stock allocated to hi s accounts,
excluding fractional shares.
17. Installments
Each Member who retires from the Company, an Affiliate, or an Associated Company may
prior to the commencement of benefits reject the normal form of distribution and, in
accordance with procedures established by the Administrative Committee, may elec t to
receive his distribution in cash in up to 15 annual installments (but no longer than the life
expectancy of the Member and the Member's spouse, if any, at the time of commenc ement
of payments) of the Member's account balances (and subsequent earnings thereon)
attributable to Tax Deferred Contributions, Matching Contributions, and Additional
Voluntary Employee Contributions, with the minimum payment in each year to be
calculated in a manner consistent with regulations under section 401(a)(9) of the Code. In
no case may an election of this optional form of benefits be changed after the
commencement date of payments, except in accordance with procedures established by the
Administrative Committee·
18. Normal Time of Distribution
Except as provided in section 19, distribution under section 16 or 17 to a Member who
retires from the Company, an Affiliate, or an Associated Company shall be made or
commence as soon as practicable but not later than the earlier of:
a. 60 days after the close of the Plan Year in which occurs the Member's retirement date, as
defined in section 11, 12, 13 or 14.
b. the last day of the Plan Year in which the retired or Disabled Member attai ns age 701
??1/2.
19. Delayed Distribution
A retired Member may elect at any time before distribution would otherwise commenc e
pursuant to section 18, to delay distribution or commencement thereof to a subsequent date
not later than the date specified in paragraph b. of section 18.
DEATH BENEFITS
20. Death
In the event of the death of a Member prior to his retirement date or Terminat ion of
Employment, his Matching Contribution account shall become 100% Vested, and the
Member's account balances (or remaining account balances in the case of a retire d Member
who has elected the optional form of distribution under section 17) attributable to Tax
§22.103PROXY STATEMENTS : STRATEGY & FORMS
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Deferred Contributions, Matching Contributions and Additional Voluntary Employee
Contributions shall be distributed pursuant to this section 20 to the Member's named
Beneficiary, or if none then living, to the Member's spouse, children, parents, brothers and
sisters, or estate, in that order.
a. Distribution of the accounts of a deceased Member shall commence as soon as
practicable but not later than 60 days after submission to the Company of all necessa ry
documents in accordance with sections 39 and 40.c.
b. The normal method of distribution shall be a lump sum distribution in cash except tha t
the Member's Beneficiary may elect to receive in kind all the Burroughs Stock allocated
to the Member's accounts, excluding fractional shares.
c. A Beneficiary of a deceased Member may reject the normal method of distribution and, in accordance with procedures established by the Administrative Committee, may
elect to receive distribution in cash in annual installments of the account ba lances
attributable to the deceased Member (including subsequent earnings thereon). In the
case of a Beneficiary who is the Member's spouse, an annual installment distribution
can be over a maximum period of 15 years, but not exceeding the spouse's life
expectancy at the date of the Member's death. In the case of any other Benefic iary,
such distribution must conclude no later than five years after the Member's death.
VESTED BENEFITS
21. Vesting
a. A Member is always 100% Vested in his Tax Deferred Contribution account.
b. A Member is Vested in his Matching Contributions account according to the following table:
Months of Contributions After Most
Recent Employment Commencement Date Vesting
Percentage
0-12 0%
13-24 20%
25-36 40%
37-48 60%
49-60 80%
61 or more 100%
Notwithstanding the foregoing, a Member is 100% Vested in his Matching
Contributions account upon the completion of 10 years of Service or upon reaching a
retirement date as defined in sections 11, 12, 13 or 14. A Member shall be 100%
Vested in his Matching Contributions account if he becomes Disabled.
c. A Member is always 100% Vested in his Additional Voluntary Employee Contributions
account.
TERMINATION DISTRIBUTIONS
22. Time of Distribution
The Distribution of Vested accounts of a Member who has had a Termination of
November 198522-119
Employment shall be made as soon as practicable but not later than 120 days after the end
of the Plan Year during which said Termination of Employment occurs.
23. Method of Distribution
Distribution to a member who has had a Termination of Employment shall be made in a
lump sum consisting of the Member's Vested account balances attributable to Tax Defe rred
Contributions, Matching Contributions, and Additional Voluntary Employee Contributions.
Distribution shall be in cash except that the Member may elect to receive in kind all the
Burroughs Stock allocated to his accounts, excluding fractional shares.
24. Forfeitures
The portion of the Matching Contribution account of a Member who has a Termination of
Employment which is not Vested in accordance with section 21 at the time of sa id
Termination of Employment is forfeited by said Member and shall, as soon as practic able,
be used to reinstate forfeitures for Members who are re-employed in accordance with
section 25 and to reduce Matching Contributions by the Company.
25. Re-employment
a. A Member who has had a Termination of Employment and is re-employed by the ??Company, an Affiliate or an Associated Company:
(i) prior to the occurrence of a 12 month Period of Severance, and
(ii) after distribution is made pursuant to sections 22 and 23, will have the portion of his Matching Contributions account which was not Vested at the time of his
Termination of Employment reinstated to his Matching Contributions account
if, within two years of his date of re-employment, he repays to the Trustee the
Matching Contributions amount distributed to him. The Company shall make
additional contributions, to the extent necessary, to provide funds for such
reinstatement. A Member who is re-employed by the Company shall be eligible
to elect to have Tax Deferred Contributions and Matching Contributions made
on his behalf and to make Additional Voluntary Employee Contributions as of
the first payday of the month occurring after the later of (a) his re-employment
date, or (b) the date six months after Termination of Employment.
b. A Member who has had a Termination of Employment and is re-employed by the Company, an Affiliate or an Associated Company after the occurrence of a 12 month
Period of Severance shall have no reinstatement rights to any previously forfeited
Matching Contributions.
IN-SERVICE WITHDRAWALS
26. Withdrawals from Additional Voluntary Employee Contributions Accounts
a. A Member may withdraw amounts from his Additional Voluntary Employee Contributions account at any time in accordance with procedures established by the
Administrative Committee and subject to such limitations as the Administrat ive
Committee may prescribe.
b. A withdrawal under this section 26 shall first be made from the portion of the Member's Additional Voluntary Employee Contributions account which is not subject
to Federal income tax.
c. Withdrawal may be made under this section 26 no more than once in any six-month
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22-119M © 1985 Jefren Publishing Company,
period.
27. Withdrawals from Matching Contribution Accounts
a. A Member who has withdrawn his entire Additional Voluntary Employee Contributions account pursuant to section 26 may withdraw the Vested amounts from
his Matching Contributions account if either:
(i) the Member has had at least 61 months of contributions to the Plan. or
(ii) the Member is eligible for a "hardship" withdrawal in accordance with the
following rules:
(A) For purposes of this section 27. the term "hardship" is defined as immediate and heavy needs of a Member, including amounts needed to
purchase a principal residence for the Member, to provide for the higher
education of the Member or a dependent of the Member, or to meet
extraordinary expenses incurred on account of serious illiness, injury,
accident, disability or other financial emergency of the Member or a
dependent of the Member.
(B) The amount of a "hardship" withdrawal cannot exceed the amount occasioned by the hardship.
(C) Notwithstanding the foregoing, no "hardship" withdrawal is available unless the Member reasonably utilizes other available funds.
(D) Withdrawal requests shall be made by a Member in accordance with procedures established by the Administrative Committee, including
demonstration of the hardship by the Member.
(E) The final determination of the existence of hardship of the Member shall be made by the Administrative Committee, which shall be under no
obligaiton to verify independently the facts of hardship submitted by the
Member.
b. In the case of a withdrawal under this section 27. the member will not be eligibl e to
have Tax Deferred Contributions or Matching Contributions made on his behalf or to
make Additional Voluntary Employee Contributions for a period of six months.
c. A Member who has made a withdrawal pursuant to this section 27 and who is otherwise then an eligible Employee may elect to re-enroll in the Plan, in accordance
with procedures established by the Administrative Committee and subject to the
limitations of section 8.a. and c.?? on the first payday of any month following the
month in which his suspension has reached six full months.
d. A withdrawal may be made under this section 27 no more than once in any Plan Year.
28. Withdrawals from Tax Deferred Contribution Accounts
A Member shall not be permitted to withdraw any amount from his Tax Deferred
Contributions account-prior to retirement, disability, death or Termination of Employment,
except that such withdrawals may be made in the case of "hardship" in accordance with
the rules of section 27.a.(ii) and 27.b. provided:
a. The available portion of the Member's Matching Contributions account and his
Additional Voluntary Employee Contributions account have been withdrawn.
November 198522-119
b. No withdrawal may be made by a Member under this section 28 to the extent that such
withdrawal would cause a violation of the maximum loan limitations of section 29.a.
for any loan(s) then outstanding.
c. A withdrawal may be made under this section 28 no more than once in any Plan Year.
LOANS
29. Loans from Tax Deferred Contribution Accounts
a. On and after January 1, 1986, an Employee may borrow from his Tax Deferred
Contributions account not less than a minimum amount set by the Administrative
Committee from time to time such that the aggregate amounts borrowed and not re paid
(including interest due and not paid) do not exceed the lesser of:
(i) $50,000, or
(ii) The greater of:
(A) One-half of the value of the Employee's Tax Deferred Contribution
account, or
(B) $10,000 , or
(iii) The value of the Employee's Tax Deferred Contributions account.
b. A loan under this section 29 must bear a reasonable rate of interest, as established by the Administrative Committee in a nondiscriminatory manner.
c. Except as provided in (i) and (ii) below, the term of a loan under this section 29 shall
be not less than one year and not more than five years:
(i) except as provided in (ii) below, in the case of a loan by an Employee in orde r to
purchase a principal residence for himself or a member of his family, the term of
the loan shall not exceed 10 years.
(ii) A loan under this section 29 shall be repaid upon the Employee's retirement, death. Termination of Employment, or upon the date the Member ceases to be
an Employee of the Company.
d. Repayment of a loan under this section 29 and payment of interest thereon shall be
accomplished by payroll deduction from the Wages of the Member according to an
amortization schedule established by the Administrative Committee in a
nondiscriminatory manner, commencing with the month following the month in which
the loan is taken out. An Employee shall have the right to accelerate repaym ents at any
time after the first year of the loan term without penalty.
e. A loan under this section 29 must be evidenced by a written note and must be adequately secured by the Employee's balance in his Tax Deferred Contribution
account. f. Loan requests shall be made by an Employee in accordance with
procedures established by the Administrative Committee.
g. A loan may be taken out under this section 29 no more than once in any Plan Year and
an Employee may have no more than three loans outstanding at any one time.
h. Interest on and repayments of the principal of an Employee's loan shall be allocate d to
the Employee's Tax Deferred Contribution account and invested in accordance with his
investment election then in effect pursuant to section 35.
§22.103PROXY STATEMENTS : STRATEGY & FORMS
22-119O © 1985 Jefren Publishing Company,
i. The Administrative Committee may establish such further rules and limitati ons as it
deems appropriate.
30. Loans from Other Accounts
Loans from a Member's Matching Contributions and Additional Voluntary Employee
Contributions accounts are not permitted.
ADMINISTRATION
31. Plan Administrator
The Company shall be the Plan Administrator within the meaning of ERISA.
32. Committees
a. The general administration of the Plan and the responsibility for carrying out the
provisions thereof shall be placed in an Administrative Committee which shall have the
right and power among other things:
(i) to authorize payment of the benefits provided by the Plan,
(ii) to make and enforce uniform and nondiscriminatory rules for the efficient
administration of the Plan, to interpret the Plan, and to decide finally and
conclusively any questions that may arise in connection with the Plan, provided,
however, that the Administrative Committee shall have no rights or powers with
respect to those matters which are the responsibility of the Investment Committee.
b. Responsibility for carrying out the provisions of the Plan relating to the Investment Funds shall be placed in an Investment Committee, which shall have the right and power
among other things:
(i) to direct the Trustee with respect to investment and the investment of the assets of
the Plan and to make any decision respecting assets of the Plan.
(ii) to remove the Trustee and appoint successor Trustees, following initial appointment of the Trustee by the Board of Directors.
(iii) to exercise the rights and responsibilities charged to it under the Plan inc luding
those specified in section 35, provided, however, that the Investment Committee
shall have no rights or powers with respect to those matters which are the
responsibility of the Administrative Committee. (iv) to have made any audit or
examination of the investment affairs of the Plan.
c. Either committee shall have the right and power among other things: (i) To elect a Secretary who may be but not need be a member of the committee.
(ii) To employ or appoint accountants and counsel and to obtain such other services as it may require from time to time in the administration of the Plan.
(iii) To delegate the performance of their duties as they deem appropriate.
(iv) The foregoing enumeration of powers is not in limitation, but is in furtherance of the implementation of the Plan, and each committee shall also possess and exe rcise
such additional powers as it shall from time to time deem advisable for the proper
exercise of its functions hereunder and the accomplishment of the purpose hereof.
d. Each committee shall consist of not less than three members (or alternates i n their
November 198522-119
absence) who may be employees of the Company, appointed by the Board of Directors
to serve without compensation for such terms as the Board of Directors may determine.
Any member of either committee may, but need not, be a member of both committees.
Any member of either committee may resign by delivering his written resignation to the
Board of Directors or to the Secretary of the Company, and said Board of Directors may
remove any member of either committee at any time.
e. Each committee ?? elect a chairman from its members. It shall est ablish from time to time
rules for the transaction of its business. It shall hold meetings upon such notice, at such
place or places, and at such time or times, as it may from time to time determine.
f. The decision of a majority of either committee and any action taken by it, within the
scope of the rights, responsibilities and powers of that committee as provided herein, in
respect of any question arising out of or in connection with the Plan, and the rules and
regulations made thereunder, will be final and conclusive and binding upon all persons
having any interest in the Plan subject to the provisions of section 39. No member of
either committee may act, vote or otherwise influence a decision of his commi ttee
specifically relating to his own membership in the Plan.
g. The members of each committee shall be free from all liability or responsi bility for
their actions and conduct as such members or default of any other fiduciary or party in
interest or any other person except in accordance with applicable federal law or to the
extent that such consequences result from their own gross negligence or willful
misconduct.
h. Each committee, the Board of Directors, the Company and its officers shall be ent itled
to rely upon all valuations, certificates and reports furnished by any accountant, and
upon the opinions given by any legal counsel, in each case duly selected.
f. The Corporation shall indemnify each member of the Board of Directors, each member of the Administrative Committee, each member of the Investment
Committee, and any Employee to whom any fiduciary responsibility with respect to
the Plan is allocated or delegated and may indemnify any other person to whom such
fiduciary responsibility is allocated or delegated, to the full extent permitted by the
Burroughs Corporation By-laws. For such purpose, the Corporation may obtain, pay
for and keep current a policy or policies of insurance, which insurance shall not,
however, release the Corporation of liability under this provision.
33. Named Fiduciary
The Company shall be the Named Fiduciary within the meaning of ERISA with respect t o
the Plan. Each Trustee shall be a fiduciary under ERISA. Additionally, each Invest ment
Manager with responsibility for investing and reinvesting the assets of the Fund shall be a
fiduciary within the meaning of ERISA, and must be either:
a. An investment adviser registered under the Investment Advisers Act of 1940, or
b. A bank as defined in the Investment Advisers Act of 1940, or
c. An insurance company qualified to manage, acquire or dispose of assets under the laws of more than one state.
FINANCING
34. Contributions
a. Tax Deferred Contributions shall be funded by reductions of the Member's
Compensation and contributions of the amounts of such reductions by the Company
§22.103PROXY STATEMENTS : STRATEGY & FORMS
22-119Q © 1985 Jefren Publishing Company,
on behalf of the Members.
b. Matching Contributions and contributions provided for in section 25 shall be funded by the payment by the Company in newly issued or treasury shares of Burroughs
Stock or cash to be used as expeditiously as possible for the purchase of Burroughs
Stock or application to other Investment Funds pursuant to paragraph e, of section 35.
c. Additional Voluntary Employees Contributions shall be funded by payroll deductions by the Company from the Wages of Members.
d. All contributions shall be turned over to the Trustee by the Company as soon as practicable to be held in separate accounts, with appropriate subaccounts, for each
Member in accordance with section 36, provided that the Trustee may comingle asset s
held in accounts or subaccounts of Members.
35. Investments
a. The Investment Committee shall have the sole authority to establish separat e
Investment Funds w?? may, but need not, include any one or more of the following:
(i) A Money Market Fund, which the Trustee or Investment Manager shall invest primarily with a view to preserving capital and maintaining liquidity by
investing in high quality money market instruments maturing in one year or less
or in shares of a Money Market Mutual Fund.
(ii) A Fixed Return Income Fund, which the Trustee or Investment Manager shall invest primarily in one or more insurance company products which offer a fixed
rate of return and preservation of principal with limitations of liquidity.
(iii) An Indexed Equity Fund, which the Trustee or Investment Manager shall invest primarily in shares of common stock selected to closely approximate the
performance of a well-established stock market index or in shares of a mutual
fund which invests primarily in such shares.
(iv) A Growth/Risk Equity Fund, which the Trustee or Investment Manager shall invest primarily in shares of common stock with an objective of maximizing
capital growth or in shares of several mutual funds which invest primarily in such
shares.
(v) A Burroughs Stock Fund, which the Trustee or Investment Manager shall invest primarily in Burroughs Stock.
Pending investment, reinvestment or distribution as provided in the Plan or pursuant to
Member elections, the Trustee or Investment Manager may temporarily retain the asse ts
of any one or more of the Investment Funds in cash, commercial paper, short-term
government obligations, or (unless directed to the contrary by the Investment
Committee) undivided interests or participations in common or collective funds
consisting of short-term investments, including funds of the Trustee or Investment
Manager. The Investment Committee, in its discretion, may establish (or direct the
Trustee or Investment Manager to establish) such Investment Funds or terminate (or
direct the termination of) any Investment Funds as it shall from time to time consi der
appropriate and in the best interests of the Members, and may select and termina te
Investment Managers.
b. Each Member may elect to have the current contributions to the Tax Deferre d
Contributions account invested by the Trustee or Investment Manager, in whole 10%
increments, in any one or more of the Investment Funds established in accordance with
November 198522-119
paragraph a. of this section 35. Elections or changes shall be made (effective as of the
first day of a quarter) no more than four times in a Plan Year.
c. A Member may elect to have the current contributions to the Additional Voluntary Employee Contributions account invested by the Trustee or Investment Manager, in
whole 10% increments in any one or more of the Investment Funds established in
accordance with paragraph a. of this section 35. Elections or changes shall be made
(effective as of the first day of a quarter) no more than four times in a Plan Year.
d. Members may elect to change the allocation of existing balances in Investme nt Funds in
accordance with procedures established by the Administrative Committee, provided that
changes in the Investment Funds for the Tax Deferred Contribution and Additional
Voluntary Employee Contributions accounts shall be made (effective as of the first day
of a quarter) no more than four times in a Plan Year.
e. The Matching Contributions account of a Member shall be invested solely in Burroughs Stock until the Member reaches age 55 and is 100% Vested, at which time the Membe r
may elect to have his Matching Contribution account and any future contributions
invested by the Trustee or Investment Manager in Investment Funds in whole 10%
increments established in accordance with paragraph a. of this section 35. Electi ons or
changes shall be made (effective as of the first day of a quarter) no more than four time s
in a Plan Year.
f. The Administrative Committee shah establish procedures whereby each Member may direct the Plan and the Trustee as to the manner in which shares of Burroughs Stock held
in any of his accounts under this Plan are to be voted, and procedures governing the
tendering of such shar?? in case of a tender offer. Such procedures shall provide that all
such shares credited to Member accounts as ?? which the Trustee does not receive
voting instructions, and all unallocated shares of Burroughs Stock held by the Trustee,
shall be voted by the Trustee proportionately in the same manner as it votes shares of
Burroughs Stock as ?? which the Trustee has received voting instructions. Such
procedure shah also provide that in th?? of a tender offer the Trustee shall request from
each such member instructions as to the tendering of shares of Burroughs Stock credited
to the Member's account and shall tender such shares as to which the Trustee has
received instructions to tender from Members within a reasonable time specified by the
Trustee. that shares credited to Member accounts as to which the Trustee has not
received instructions shall not be tendered, and that all unallocated shares hel d by the
Trustee shall be tendered in the same proportion as the shares as to which the Truste e
has received instructions to tender bear to all shares with respect to which the Truste e
has received instructions to tender and not to tender.
36. Accounts
a.Separate Accounts and Subaccounts
The Administrative Committee shall maintain separate Tax Deferred Contributi ons,
Matching Contributions and Additional Voluntary Employee Contributions accounts
for each Member, as applicable, and such additional account or subaccount is as it
deems appropriate.
b. Computation of Member Accounts
The accounting sequence to value Member accounts at the end of each month shall be:
§22.103PROXY STATEMENTS : STRATEGY & FORMS
22-119S © 1985 Jefren Publishing Company,
First, allocate and credit income during the month (including dividends on
Burroughs Stock and interest on loans pursuant to section 29) to the proper Member's
accounts;
Second, credit each Member's accounts with his pro rata share of any increase or
charge such accounts with his pro rata share of any decrease in the value of such
accounts since the preceding month:
Third, credit to each Member's Tax Deferred Contributions account, Matching
Contributions account, and Additional Voluntary Employee Contributions account, as
the case may be, any contributions for the month; and
Fourth, charge to the proper Member's accounts all payments or distributions
made since the preceding month;
Fifth, make appropriate investment fund transfers in accordance with section 35.
37. Costs of Administration
a.General
All costs of administration of the Plan, such as internal administrative costs,
recordkeeping fees for monitoring individual accounts and costs of communications,
materials and forms, will be paid by the Company. Expenses that are related to t he
operation of the Trust, such as Trustee's fees. investment management fees, brokerage
fees, transfer taxes and other expenses incidental to the purchase and sale of Trust
assets, or which are incurred subsequent to the termination of the Plan, will be paid by
the Trustee from the assets of the Trust, except to the extent that the Company e lects to
pay all or a part of such taxes and expenses.
b. Loan Fees
Nothwithstanding the provisions of subsection a. of this section 37, the Administrative
Committee may in its discretion determine that a reasonable loan fee sha ll be charged
by the Company to any Member who takes out a loan pursuant to section 29.
MISCELLANEOUS PROVISIONS
38. Proof of Age
a. Proof of Age in satisfactory form must be submitted to the Company for each Employee not later than 60 days after the date he becomes a Member of the Plan.
b. The Administrative Committee shall have the authority and power at any time to
correct any erroneous record of age of an Employee to make any necessary adjustment
on the basis of the correct age.
39. Benefit Claims Procedure
Benefits of the Plan and withdrawals and loans from the Plan shall be payable after receipt
of written application in a form prescribed by and pursuant to procedures established by
the Administrative Committee in compliance with ERISA. A?? in ??erpretati ons,
determinations and decisions of the Administrative Committee shall be final, conc lusive
and binding upon the Member, Beneficiaries, and all other persons claiming any interest
under the Plan, and shall be rendered in writing to the claimant stating the reasons for such
decision.
40. Payment of Benefits
November 198522-119
a. When a Member or Beneficiary becomes eligible to receive a benefit under the Plan, the
Company will direct the Trustee to make payment of such benefit out of the assets of the Trust,
specifying
