Attached files
Exhibit 4.31
Fourth Amendment to
Alion Science and Technology Corporation
Employee Ownership, Savings and Investment Plan
Employee Ownership, Savings and Investment Plan
WHEREAS, Alion Science and Technology Corporation (the Company) maintains the Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Plan (the Plan) for the
benefit of its employees and employees of other adopting employers, and was last amended and
restated as of October 1, 2006; and
WHEREAS, the Board of Directors of the Company desires to amend the Plan to comply with
Internal Revenue Service comments in response to the Companys application for a favorable
determination under Section 401(a) of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Board of Directors of the Company, pursuant to Plan Section 15.1 of the Plan, has
delegated authority to amend the Plan to the undersigned officer, provided he determines that the
amendment would not materially increase costs of the Plan to the Company or any Adopting Employer.
NOW, THEREFORE, pursuant to the powers of amendment reserved under Section 15.1 of the Plan,
the Plan is hereby amended by the Company, effective October 1, 2007, unless otherwise provided, by
the adoption of the following provisions:
1. | Section 2.2 is hereby amended by adding the following sentences to the end
thereof: |
To the extent an Acquisition Loan is made by a party in interest or a disqualified
person, it shall be an exempt loan, as such term is defined in Treas. Reg.
§54.4975-7(b)(1). Any such exempt loan shall be primarily for the benefit of
Participants and Beneficiaries.
2. | Section 2.11 is hereby amended in its entirety to read as follows: |
2.11 Common Stock.
Alion Science and Technology Corporation common stock issued by the Company (or
a member of its controlled group, within the meaning of Section 409(l)(4) of the
Code) which has voting power equal to that of the class of Company common stock
having the greatest voting power, and dividend rights equal to that of the class of
Company common stock having the greatest dividend rights, and otherwise satisfies
the definition of a qualifying employer security under Section 4975(e)(8) of the
Code.
3. | Subsection 2.13(a)(4) is hereby amended, effective as of October 1, 2006, by
deleting the following phrase therefrom: |
under any plan described in Section 401(k) or 125 of the Code
and substituting the following phrase therefore:
under any plan described in Sections 402(g), 125 or 457 of the Code
4. | The last two sentences of Section 2.69 are hereby amended in their entirety to
read as follows: |
For Common Stock that is not readily tradeable on an established securities market,
the term Valuation Date means the semiannual date on which Common Stock is valued
by an independent appraiser (which shall generally be as of March 31 and September
30), and such other interim Valuation Dates as declared by the ESOP Committee;
provided that the term independent appraiser means an appraiser meeting the
requirements of the Treasury regulations under Section 170 of the Code, pursuant to
Section 401(a)(28)(C) of the Code. Notwithstanding the foregoing, in the case of a
transaction between the Plan and a disqualified person (within the meaning of
Section 4975(e)(2) of the Code), the Valuation Date shall be the date of the
transaction.
5. | The last sentence of subsection 4.6(b) is hereby amended in its entirety to
read as follows: |
Exhibit B to this Plan lists the special provisions that must be preserved under
Section 411(d)(6)of the Code, if any, following the transfer of assets from the
Human Factors Applications, Inc. Profit Sharing and 401(k) Plan and the Innovative
Technology Solutions 401(k) Profit Sharing Plan & Trust in accordance with this
subsection (b).
6. | The second sentence of subsection 4.10(c)(2) is hereby amended, effective as of
October 1, 2006, in its entirety to read as follows: |
Such Qualified Nonelective Contributions shall be allocated in accordance with
Section 1.401(k)-2(a)(6)(iv) of the Treasury Regulations, and may not exceed five
percent (5%) of a Participants Compensation.
7. | The second sentence of subsection 4.10(d) is hereby amended, effective as of
October 1, 2006, in its entirety to read as follows: |
Such distributions shall be adjusted for income (gain or loss), including, for Plan
Years beginning on or after January 1, 2006 and before January 1, 2008, an
adjustment for income for the period between the end of the Plan Year and a date
that is no more than seven days before the date of distribution.
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8. | The second sentence of subsection 4.12(d) is hereby amended, effective as of
October 1, 2006, in its entirety to read as follows: |
Such distribution shall include earnings or losses (if any) attributable to such
amounts, as determined by the ESOP Committee, in accordance with Section
1.401(m)-2(b)(2)(iv), including, for Plan Years beginning on or after January 1,
2006 and before January 1, 2008, earnings or losses for the period between the end
of the Plan Year and a date that is no more than seven days before the date of
distribution.
9. | The fourth sentence of subsection 4.12(f) is hereby amended, effective as of
October 1, 2006, in its entirety to read as follows: |
Such distribution shall include the income allocable to the amounts so distributed,
as determined under this subsection, including, for Plan Years beginning on or after
January 1, 2006 and before January 1, 2008, the income for the period between the
end of the Plan Year and a date that is no more than seven days before the date of
distribution.
10. | A new subsection 5.6(a)(2) is hereby added to read as follows: |
In all cases, the valuation of employer securities which are not readily tradeable
on an established securities market shall be made by an independent appraiser
meeting the requirements of the Treasury regulations under Section 170 of the Code,
pursuant to Section 401(a)(28)(C) of the Code.
11. | Subsection 5.7(a) is hereby amended by adding the following sentence to the end
thereof: |
Notwithstanding the foregoing, in no event shall the rate of interest of an
Acquisition Loan or the price of Financed Shares be such that Plan assets may be
drained off.
12. | Subsection 5.7(d) is hereby amended in its entirety to read as follows: |
In the event of a default upon an Acquisition Loan, the value of Plan assets
transferred in satisfaction of such Acquisition Loan must not exceed the amount of
the default. If the lender is a disqualified person (as defined in the Code), the
Acquisition Loan must provide for a transfer of Plan assets upon default only upon
and to the extent of the Plans failure to meet the payment schedule of such
Acquisition Loan.
13. | Subsection 5.8(b) is hereby amended in its entirety to read as follows: |
The payments made by the Trustee with respect to an Acquisition Loan for a Plan
Year must not exceed the sum of such Profit Sharing Contributions, earnings and
dividends (including distributions (as defined in Code Section 1368)) for that Plan
Year and prior Plan Years, less the amount of such payments for prior Plan
Years, and must be accounted for separately in the ESOP Components books until such
Acquisition Loan is repaid.
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14. | The first sentence of Section 5.8(c) is hereby deleted in its entirety. |
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15. | Section 5.9 is hereby amended in its entirety to read as follows: |
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[Reserved.] |
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16. | Section 5.12 is hereby amended in its entirety to read as follows: |
(a) For purposes of this Section 5.12, the following terms shall have the
meanings stated below:
(1) Deemed Owned Shares shall mean, with respect to any Participant:
(A) | Shares of stock
in an S Corporation that are allocated to a
Participants ESOP Accounts; |
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(B) | Such
Participants share of the Common Stock of an S
Corporation that is held by the ESOP Component but is
not allocated to the ESOP Accounts of any Participant or
Beneficiary; and |
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(C) | Synthetic Equity
Shares. |
(2) Deemed 10% Shareholder shall mean a Participant who owns at least ten
percent (10%) of the Deemed Owned Shares of an S Corporation.
(3) Disqualified Person shall mean any person if:
(A) | The aggregate
number of Deemed-Owned Shares of such person and the
persons Members of the Family is at least twenty
percent (20%) of the number of Deemed-Owned Shares of
stock in the S Corporation; or |
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(B) | In the case of a
person other than one described in paragraph (1)
immediately above, a Deemed 10% Shareholder. |
In the case of a Disqualified Person described in paragraph (A) immediately above,
any persons Member of the Family shall be treated as a Disqualified Person if not
otherwise treated as a Disqualified Person under paragraphs (A) or (B) immediately
above.
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(4) Members of the Family shall mean, with respect to any individual:
(A) | The spouse of the
individual; |
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(B) | An ancestor or
lineal descendant of the individual or the individuals
spouse; |
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(C) | A brother or
sister of the individual or the individuals spouse and
any lineal descendant of the brother or sister; and |
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(D) | The spouse of any
individual described in paragraphs (B) or (C)
immediately above. |
For purposes of this Section 5.12, a spouse of an individual who is legally
separated from such individual under a decree of divorce or separate maintenance
shall not be treated as such individuals spouse for purposes of this Section 5.12.
(5) Nonallocation Year shall mean any Plan Year if, at any time during such
Plan Year:
(A) | The Plan holds
Company Stock consisting of shares of stock in an S
Corporation; and |
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(B) | Disqualified
Persons own at least fifty percent (50%) of the number
of shares of stock in the S Corporation. For purposes
of this paragraph (B), stock includes Company Stock
owned directly by the Disqualified Person, Deemed-Owned
Shares of the Disqualified Person, and Synthetic Equity
of the Disqualified Person. |
For purposes of this definition, the following attribution rules shall apply:
(i) | The rules of
Section 318(a) of the Code shall apply for purposes of
determining ownership except that: |
(I) | In applying paragraph (1) of Section 318(a) of
the Code, the members of an individuals family
shall include Members of the Family; and |
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(II) | Paragraph (4) of Section 318(a) of the Code
thereof shall not otherwise apply; and |
(ii) | Notwithstanding
the employee trust exception in Code Section
318(a)(2)(B)(i), an individual shall be
treated as owning Deemed-Owned Shares of the
individual. |
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(4) Impermissible Accrual shall mean any holding of Common Stock of an S
Corporation by the ESOP Component, and assets attributable thereto, for the benefit
of a Disqualified Person during a Nonallocation Year. For purposes of this
subsection (b)(7), assets attributable to S Corporation Common Stock owned by the
ESOP Component include any distributions, within the meaning of Section 1368 of the
Code, made on S Corporation Common Stock held in the ESOP Accounts of a Disqualified
Person (including earnings thereon) such that, in the event of a Nonallocation Year,
all Common Stock of the S Corporation and other assets of the ESOP Component
attributable to such S Corporation Common Stock, including distributions and sales
proceeds (and earnings thereon), held in the ESOP Accounts of such Disqualified
Person for such year constitute an Impermissible Accrual for the benefit of the
Disqualified Person, whether attributable to contributions in the current year or in
prior years.
(5) Impermissible Allocation shall mean (i) any contribution or other annual
addition (within the meaning of Section 415(c)(2) of the Code) made to the account
of a Disqualified Person, or (ii) any other accrual of additional benefits, directly
or indirectly, under the Plan or any other qualified plan under Section 401(a) of
the Code (including any release and allocation from a Loan Suspense Account, as
described in Treas. Reg. §54.4975-11(c) and (d)) that, for the Nonallocation Year,
would have been added to the ESOP Accounts of such Disqualified Person and invested
in S Corporation Common Stock owned by the ESOP Component, but for a Plan provision
precluding such addition to the ESOP Accounts of a Disqualified Person and
investment in S Corporation Common Stock during a Nonallocation Year.
(6) Prohibited Allocation shall mean an Impermissible Accrual or an
Impermissible Allocation.
(7) Restricted Participant shall mean a Disqualified Person whose stock
ownership (including Deemed-Owned Shares) could result in a Nonallocation Year.
(8) S Corporation shall mean an S corporation as defined by Code Section
1361(a)(1).
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(9) Synthetic Equity Shares shall mean any stock options, warrants,
restricted stocks, deferred insurance stock rights, or similar interests or rights
that give the holder the right to acquire or receive Common Stock of an S
Corporation in the future. Except to the extent provided in the Treasury
regulations, Synthetic Equity Shares shall also include:
(A) | any rights to
future payments (payable in cash or any other form other
than stock of the S Corporation) (e.g., stock
appreciation rights, phantom stock units, or similar
rights to future cash payments) based on the value of
such stock or appreciation in such value; |
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(B) | any rights to
acquire stock or other similar interests in a related
entity if such interests in the related entity are the
only significant asset of the S Corporation and the S
Corporation is the only significant owner of the related
entity (e.g., partnership, trust, or Qualified
Subchapter S Subsidiary under Section 1361(b)(3)of the
Code); |
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(C) | any remuneration
for services rendered to the S Corporation, or a related
entity, to which Section 404(a)(5) of the Code applies
(including remuneration for which a deduction would be
permitted under Section 404(a)(5) of the Code if
separate accounts were maintained); |
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(D) | any rights to
receive property (to which Section 83 of the Code
applies) in a future year for the performance of
services to an S Corporation, or a related entity; |
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(E) | any transfers of
property (to which Section 83 of the Code applies) in
connection with the performance of services to an S
Corporation, or a related entity, to the extent that the
property is not substantially vested within the meaning
of Treas. Reg. §1.83-3(i) by the end of the Plan Year in
which transferred; and |
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(F) | any remuneration
for services rendered to an S Corporation, or a related
entity, under a plan, or method or arrangement,
deferring the receipt of compensation to a date that is
after the 15th day of the 3rd
calendar month after the end of the entitys taxable
year in which the related services are rendered, other
than a plan that is an eligible retirement plan within
the meaning of Section 402(c)(7)(B) of the Code. |
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Notwithstanding the above, Synthetic Equity Shares do not include shares that are
deemed-owned ESOP shares. In the case of a person who owns Synthetic Equity
Shares of an S Corporation, except to the extent provided in regulations, the shares
of stock in the S Corporation on which such Synthetic Equity Shares are based shall
be treated as outstanding stock in such corporation and Deemed-Owned Shares of such
person if such treatment of Synthetic Equity Shares of one or more persons results
in (i) the treatment of any person as an S Corporation Disqualified Person; or (ii)
the treatment of any Plan Year as a Nonallocation Year.
For purposes of this definition, Synthetic Equity Shares shall be treated as owned
by a person in the same manner as stock is treated as owned by a person under the
rules of paragraphs (2) and (3) of Section 318(a) of the Code. If, without regard
to this definition, a person is treated as a Disqualified Person or a Plan Year is
treated as a Nonallocation Year, this definition shall not be construed to result in
the person or year not being so treated.
(b) Notwithstanding any provision of this Plan to the contrary, during any Plan
Year in which the Company is an S Corporation and Company Stock held under the ESOP
Component consists of stock in an S Corporation, any portion of the assets held by
the Trust, either attributable to or allocable in lieu of such Company Stock,
accruing or being allocated (either directly or indirectly) under this Plan or any
plan qualified under Section 401(a) of the Code that is maintained by the Company
for the benefit of a Disqualified Person shall constitute a Prohibited Allocation
and shall be null and void ab initio.
(c) Any part of a Restricted Participants accrued benefit that is held by the
ESOP Component may be converted into cash:
(1) During any Plan Year following the close of the Plan Year in which the
Restricted Participant incurs a termination of employment with the Company for any
reason, provided at such time the Trust has an adequate amount of cash to convert
(in whole or part) the Restricted Participants ESOP Account; or
(2) During any Plan Year in which an allocation to a Disqualified Person could
result in a Nonallocation Year, prior to such allocation and solely to the extent
required to prevent a Nonallocation Year from occurring.
The value of the Restricted Participants Account may be determined as of the end of
the Plan Year in which the Restricted Participant incurs a Termination Date, as of
the end of the Plan Year immediately preceding the potential Nonallocation Year, or
as of the more recent valuation, if any. However, except in the case of
reemployment, none of a Restricted Participants accrued benefit will be credited
with any further Company contributions, forfeitures, dividends on Company Stock or
gain on the sale of Company Stock held in a Loan Suspense Account.
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(d) This Section 5.12 is intended to satisfy the provisions under Section
409(p) of the Code and the Treasury regulations promulgated and in
effect thereunder. To the extent that any provision of this Section 5.12 is
inconsistent with Section 409(p) of the Code or the related Treasury regulations,
such provision shall be operated in accordance with the Code and Treasury
regulations, not with this Plan document.
17. | Effective as of October 1, 2006, a new sentence is hereby added between the
third and fourth sentences of subsection 9.2(c) to read as follows: |
In the event that the nonforfeitable portion of a Participants Account is less
than the maximum amount prescribed in Section 411(a)(11) of the Code, any
distribution thereof that is greater than $1,000, and is made without the
Participants written consent before attaining the later of Normal Retirement Age or
age 62, shall be paid in a direct rollover to an individual retirement account
designated by the Trustee to the extent the Participant does not otherwise elect to
receive such distribution directly or have it paid to an eligible retirement plan in
a direct rollover.
18. | The second and third sentences of subsection 9.14(d) are hereby amended in
their entirety to read as follows: |
Alternatively, Common Stock may be distributed subject to the requirement that it
be resold to the Company (or to the Trust) under payment terms that comply with
Section 9.15. If Company Stock is distributed from the Trust to a Participant who
directs that such Company Stock be distributed to his individual retirement
arrangement in a direct rollover, the Companys S corporation status shall not be
affected, provided that, upon the distribution of the Company Stock to the
Participants individual retirement arrangement, the Company repurchases the Company
Stock contemporaneously with, and on the same day as, such distribution.
19. | The last sentence of subsection 9.15(a)(1) is hereby amended in its entirety to
read as follows: |
The right of first refusal shall provide that, prior to any subsequent transfer,
the Common Stock must first be offered for purchase in writing to the Company, and
then to the Trust, for a price and under such other terms no less favorable to the
seller than the greater of the value of the Common Stock determined in accordance
with Treas. Reg. §54.4975-11(d)(5), or the purchase price and other terms offered by
a buyer, other than the Company or the Trust, making a good faith offer to purchase
such Common Stock.
20. | Subsection 9.15(a)(2) is hereby amended in its entirety to read as follows: |
The Company and the Trust shall have a total of fourteen (14) days to exercise the
right of first refusal under the terms provided in subsection (a)(1).
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21. | A new subsection 9.15(b)(6) is hereby added to read as follows: |
Notwithstanding any other provision of this Plan to the contrary, in no event shall
the Company be obligated to acquire Common Stock from a Participant or Beneficiary
at an indefinite time subject to the occurrence of an event, as provided under
Treas. Reg. §54.4975-11(a)(7)(i).
22. | The last sentence of Section 12.5(a) is hereby amended, effective as of October
1, 2006, by deleting the following phrase therefrom: |
separation from service
and substituting the following phrase therefore:
severance from employment
IN WITNESS WHEREOF, Alion Science and Technology Corporation has caused this Amendment to the
Plan to be executed on its behalf by the Chief Executive Officer as of the 6th day of
May, 2010.
Alion Science and Technology Corporation |
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By: | /s/ Bahman Atefi | |||
Its: Chief Executive Officer |
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