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EXHIBIT 10.1
THE MEN'S WEARHOUSE, INC.
401(k) SAVINGS PLAN
AMENDMENT AND RESTATEMENT
EFFECTIVE JANUARY 1, 1998
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THE MEN'S WEARHOUSE, INC. 401(k) SAVINGS PLAN
THIS AGREEMENT adopted by The Men's Wearhouse, Inc., a Texas
corporation (the "Sponsor"),
WITNESSETH:
WHEREAS, effective February 1, 1978, the Sponsor established The Men's
Wearhouse, Inc. 401(k) Savings Plan (the "Plan").
WHEREAS, the K&G Men's Center 401(k) Savings Plan was merged into the
Plan effective August 1, 2000;
WHEREAS, the Sponsor desires to amend and restate the Plan;
NOW, THEREFORE, the Plan is hereby amended and restated in its entirety
as set forth below.
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TABLE OF CONTENTS
SECTION
ARTICLE I - DEFINITIONS
Account.............................................................................................1.01
Active Service......................................................................................1.02
Affiliated Employer.................................................................................1.03
Annual Compensation.................................................................................1.04
Annuity Starting Date...............................................................................1.05
Beneficiary or Beneficiaries........................................................................1.06
Board...............................................................................................1.07
Code................................................................................................1.08
Committee...........................................................................................1.09
Considered Compensation.............................................................................1.10
Contribution........................................................................................1.11
Direct Rollover.....................................................................................1.12
Distributee.........................................................................................1.13
Eligible Retirement Plan............................................................................1.14
Eligible Rollover Distribution......................................................................1.15
Employee............................................................................................1.16
Employer or Employers...............................................................................1.17
Entry Date..........................................................................................1.18
ERISA...............................................................................................1.19
Five Percent Owner..................................................................................1.20
Former K&G Plan Participant.........................................................................1.21
Highly Compensated Employee.........................................................................1.22
Hour of Service.....................................................................................1.23
K&G Plan............................................................................................1.24
Leased Employee.....................................................................................1.25
Matched Salary Deferral Contribution................................................................1.26
Member..............................................................................................1.27
Non-Highly Compensated Employee.....................................................................1.28
Period of Service...................................................................................1.29
Period of Severance.................................................................................1.30
Plan................................................................................................1.31
Plan Year...........................................................................................1.32
Qualified Domestic Relations Order..................................................................1.33
QJSA................................................................................................1.34
QPSA................................................................................................1.35
Regulation..........................................................................................1.36
Required Beginning Date.............................................................................1.37
Retirement Age......................................................................................1.38
Rollover Contribution...............................................................................1.39
Separation From Service.............................................................................1.40
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Service.............................................................................................1.41
Xxxxxx Service......................................................................................1.42
Sponsor.............................................................................................1.43
Sponsor Stock.......................................................................................1.44
Spouse..............................................................................................1.45
Trust...............................................................................................1.46
Trustee.............................................................................................1.47
Valuation Date......................................................................................1.48
ARTICLE II - ELIGIBILITY
Eligibility Requirements............................................................................2.01
Early Participation for Rollover Purposes...........................................................2.02
Eligibility Upon Reemployment.......................................................................2.03
Cessation of Participation..........................................................................2.04
Recommencement of Participation.....................................................................2.05
ARTICLE III - CONTRIBUTIONS
Salary Deferral Contributions.......................................................................3.01
Matching Contributions..............................................................................3.02
Supplemental Contributions..........................................................................3.03
Rollover Contributions and Plan-to-Plan Transfers...................................................3.04
QNECS - Extraordinary Employer Contributions........................................................3.05
Nondeductible Contributions Not Required............................................................3.06
Form of Payment of Contributions....................................................................3.07
Deadline for Payment of Employer Contributions......................................................3.08
Return of Contributions for Mistake,
Disqualification or Disallowance of Deduction.................................................3.09
ARTICLE IV - ALLOCATION AND VALUATION OF ACCOUNTS
Information Statements from Employer................................................................4.01
Allocation of Salary Deferral Contribution..........................................................4.02
Allocation of Matching Contribution.................................................................4.03
Allocation of Supplemental Contribution.............................................................4.04
Allocation of QNEC..................................................................................4.05
Valuation of Accounts...............................................................................4.06
No Rights Unless Otherwise Prescribed...............................................................4.07
ARTICLE V - BENEFITS
Retirement Benefit..................................................................................5.01
Death Benefit.......................................................................................5.02
Distribution Methods Available......................................................................5.03
Election of Distribution Method.....................................................................5.04
Qualified Joint and Survivor Annuity Requirements
for Former K&G Plan Participants..............................................................5.05
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Qualified Preretirement Survivor Annuity Requirements
for Former K&G Plan Participants..............................................................5.06
Lump Sum Payment of Small Amounts Upon Separation From Service......................................5.07
Form of Payment.....................................................................................5.08
Direct Rollover Option..............................................................................5.09
Time of Distributions...............................................................................5.10
Consent to Distributions Upon Separation From Service...............................................5.11
Information Provided to Members.....................................................................5.12
Designation of Beneficiary..........................................................................5.13
Distributions to Disabled Persons...................................................................5.14
Distributions Pursuant to Qualified Domestic Relations Orders.......................................5.15
Claims Procedure....................................................................................5.16
ARTICLE VI - IN-SERVICE DISTRIBUTIONS AND LOANS
In-Service Financial Hardship Distributions.........................................................6.01
In-Service Age 59 1/2 Distributions.................................................................6.02
In-Service Withdrawal of Rollover Contributions.....................................................6.03
Loans...............................................................................................6.04
ARTICLE VII - ACTIVE SERVICE
When Active Service Begins..........................................................................7.01
Aggregation of Service..............................................................................7.02
Period of Service of Less Than One Year.............................................................7.03
Periods of Severance Due to Child Birth or Adoption.................................................7.04
Transfers...........................................................................................7.05
Employment Records Conclusive.......................................................................7.06
Service Credit Required under Federal Law...........................................................7.07
ARTICLE VIII - INVESTMENT ELECTIONS
Investment Funds Established........................................................................8.01
Election Procedures Established.....................................................................8.02
ARTICLE IX - VOTING OF SPONSOR STOCK AND TENDER OFFERS
Voting of Sponsor Stock ............................................................................9.01
Tender Offers ......................................................................................9.02
Shares Credited.....................................................................................9.03
Conversion .........................................................................................9.04
Named Fiduciary.....................................................................................9.05
ARTICLE X - ADOPTION OF PLAN BY OTHER EMPLOYERS
Adoption Procedure.................................................................................10.01
No Joint Venture Implied...........................................................................10.02
All Trust Assets Available to Pay All Benefits.....................................................10.03
Qualification a Condition Precedent to Adoption and Continued Participation........................10.04
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ARTICLE XI- AMENDMENT AND TERMINATION
Right to Amend and Limitations Thereon.............................................................11.01
Mandatory Amendments...............................................................................11.02
Withdrawal of Employer.............................................................................11.03
Termination of Plan................................................................................11.04
Partial or Complete Termination or Complete Discontinuance of Contributions........................11.05
ARTICLE XII- MISCELLANEOUS
Plan Not an Employment Contract....................................................................12.01
Benefits Provided Solely From Trust................................................................12.02
Assignments Prohibited.............................................................................12.03
Requirements Upon Merger or Consolidation of Plans.................................................12.04
Merger of K&G Plan.................................................................................12.05
Forfeiture by Lost Members or Beneficiaries........................................................12.06
Gender of Words Used...............................................................................12.07
Severability.......................................................................................12.08
Reemployed Veterans................................................................................12.09
Governing Law......................................................................................12.10
APPENDIX A - LIMITATIONS ON CONTRIBUTIONS
APPENDIX B - TOP-HEAVY REQUIREMENTS
APPENDIX C - ADMINISTRATION OF THE PLAN
APPENDIX D - FUNDING
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ARTICLE I
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in the definition unless the context in which the word or phrase appears
reasonably requires a broader, narrower or different meaning.
1.01 "ACCOUNT" means all ledger accounts pertaining to a Member which
are maintained by the Committee to reflect the Member's interest in the Trust.
The Committee shall establish the following Accounts and any additional Accounts
that the Committee considers necessary to reflect the entire interest of the
Member in the Trust. Each of the Accounts listed below and any additional
Accounts established by the Committee shall reflect the Contributions or amounts
transferred to the Trust, if any, and the appreciation or depreciation of the
assets in the Trust and the income earned or loss incurred on the assets in the
Trust attributable to the Contributions and/or other amounts transferred to the
Account.
(a) Salary Deferral Contribution Account - the Member's
before-tax contributions.
(b) Matching Contribution Account - the Employer's matching
contributions, if any, made pursuant to Section 3.02.
(c) Supplemental Contribution Account - the Employer's
contributions, if any, made pursuant to Section 3.03.
(d) QNEC Account - the Employer's contributions, known as
"qualified nonelective employer contributions", made as a means of
passing the actual deferral percentage test of section 401(k) of the
Code or the actual contribution percentage test of section 401(m) of
the Code.
(e) Rollover Account - funds transferred from another
qualified plan or individual retirement account for the benefit of a
Member.
1.02 "ACTIVE SERVICE" means the Periods of Service which are counted
for eligibility purposes as calculated under Article VII.
1.03 "AFFILIATED EMPLOYER" means the Employer and any employer which is
a member of the same controlled group of corporations within the meaning of
section 414(b) of the Code or which is a trade or business (whether or not
incorporated) which is under common control (within the meaning of section
414(c) of the Code), which is a member of an affiliated service group (within
the meaning of section 414(m) of the Code) with the Employer, or which is
required to be aggregated with the Employer under section 414(o) of the Code.
For purposes of the limitation on allocations contained in Appendix A, the
definition of Affiliated Employer is modified by substituting the phrase "more
than 50 percent" in place of the phrase "at least 80 percent" each place the
latter phrase appears in section 1563(a)(1) of the Code.
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1.04 "ANNUAL COMPENSATION" means the Employee's wages from the
Affiliated Employers as defined in section 3401(a) of the Code for purposes of
federal income tax withholding at the source (but determined without regard to
any rules that limit the remuneration included in wages based on the nature or
location of the employment or the services performed) modified by including
elective contributions under a cafeteria plan described in section 125 of the
Code and elective contributions to any plan qualified under section 401(k),
408(k), or 403(b) of the Code. Except for purposes of Section A.4.1 of Appendix
A of the Plan, Annual Compensation in excess of $150,000.00 (as adjusted by the
Secretary of Treasury) shall be disregarded. If the Plan Year is ever less than
twelve months, the $150,000.00 limitation (as adjusted by the Secretary of
Treasury) will be prorated by multiplying the limitation by a fraction, the
numerator of which is the number of months in the Plan Year, and the denominator
of which is 12.
1.05 "ANNUITY STARTING DATE" means the first day of the first period
for which an amount is payable as an annuity, or in the case of a benefit
payable in the form of a lump sum, the date on which the Trustee disburses the
lump sum.
1.06 "BENEFICIARY" OR "BENEFICIARIES" means the person or persons, or
the trust or trusts created for the benefit of a natural person or persons or
the Member's or former Member's estate, designated by the Member or former
Member to receive the benefits payable under the Plan upon his death.
1.07 "BOARD" means the board of directors of the Sponsor.
1.08 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
1.09 "COMMITTEE" means the committee appointed by the Sponsor to
administer the Plan.
1.10 "CONSIDERED COMPENSATION" means as to each Employee, that
Employee's Annual Compensation modified by excluding the following items (even
if includable in gross income): awards, tax gross-up payments, reimbursements or
other expense allowances (such as the payment of moving expenses or automobile
mileage reimbursements), cash and noncash fringe benefits (such as the use of an
automobile owned by the Employer and club memberships), deferred compensation
(such as stock options and pay for accrued vacation upon Separation From
Service), compensation under a plan meeting the requirements of Section 423 of
the Code, and welfare benefits (such as severance pay). However, effective March
25, 2000, for purposes of determining the amount of Salary Deferral
Contributions the Employer shall make with respect to Members who receive
salaried remuneration, "Considered Compensation" shall not include bonuses.
Considered Compensation in excess of $150,000.00 (as adjusted by the Secretary
of Treasury) shall be disregarded. If the Plan Year is ever less than twelve
months, the $150,000.00 limitation (as adjusted by the Secretary of Treasury)
will be prorated by multiplying the limitation by a fraction, the numerator of
which is the number of months in the Plan Year, and the denominator of which is
12.
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1.11 "CONTRIBUTION" means the total amount of contributions made under
the terms of the Plan. Each specific type of Contribution shall be designated by
the type of contribution made as follows:
(a) Salary Deferral Contribution - a contribution made by the
Employer pursuant to the Employee's salary deferral agreement.
(b) Matching Contribution - a contribution made by the
Employer pursuant to Section 3.02.
(c) Supplemental Contribution - a contribution made by the
Employer pursuant to Section 3.03.
(d) QNEC - an extraordinary contribution, known as a
"qualified nonelective employer contribution", made by the Employer as
a means of passing the actual deferral percentage test of section
401(k) of the Code or the actual contribution percentage test of
section 401(m) of the Code.
(e) Rollover Contribution - a contribution made by a Member
which consists of any part of an eligible rollover distribution (as
defined in section 402 of the Code) from a qualified employee trust
described in section 401(a) of the Code.
1.12 "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.13 "DISTRIBUTEE" means an Employee or former Employee. In addition,
the Employee's or former Employee's surviving Spouse and the Employee's or
former Employee's Spouse or former Spouse who is the alternate payee under a
Qualified Domestic Relations Order, are Distributees with regard to the interest
of the Spouse or former Spouse.
1.14 "ELIGIBLE RETIREMENT PLAN" means an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the Distributee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the surviving Spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
1.15 "ELIGIBLE ROLLOVER DISTRIBUTION" as defined in section 402 of the
Code means any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution does not
include: (a) any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's Beneficiary, or for a specified period
of ten years or more; (b) any distribution to the extent the distribution is
required under section 401(a)(9) of the Code; (c) the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); and, effective for distributions after December 31, 1998, (d) any
financial hardship distribution described in section 401(k)(2) of the Code from
a Member's Salary Deferral Contribution Account or from
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the Member's QNEC Account (to the extent that QNECs were treated as Section
401(k) Contributions under Appendix A).
1.16 "EMPLOYEE" means, except as otherwise specified in this Section,
all common law employees of an Affiliated Employer and all Leased Employees.
1.17 "EMPLOYER" OR "EMPLOYERS" means the Sponsor, K&G Men's Center,
Inc., a Delaware corporation, K&G Men's Company Inc., a Delaware corporation,
TMW Purchasing LLC, a Delaware limited liability company, TMW Marketing Company,
Inc., a California corporation, The Men's Wearhouse of Texas LP, a Delaware
limited partnership, TMW Merchants LLC, a Delaware limited liability company,
The Men's Wearhouse of Michigan, Inc., a Delaware corporation, and TMW Finance
LP, a Delaware limited partnership, and any other business organization that
adopts the Plan.
1.18 "ENTRY DATE" means the first day of each calendar quarter, January
1, April 1, July 1, and October 1. Effective August 1, 2000, "Entry Date" means
the first day of any month.
1.19 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.20 "FIVE PERCENT OWNER" means an Employee who is a five percent owner
as defined in section 416(i) of the Code.
1.21 "FORMER K&G PLAN PARTICIPANT" means a Member whose account balance
under the K&G Plan was transferred to the Plan.
1.22 "HIGHLY COMPENSATED EMPLOYEE" means an Employee of an Affiliated
Employer who, during the Plan Year or the preceding Plan Year, (a) was at any
time a Five Percent Owner at any time during the Plan Year or the preceding Plan
Year or (b) had Annual Compensation from the Affiliated Employers in excess of
$80,000.00 (as adjusted from time to time by the Secretary of the Treasury) for
the preceding Plan Year.
1.23 "HOUR OF SERVICE" means each hour that an Employee is paid or
entitled to payment by an Affiliated Employer for the performance of duties.
1.24 "K&G PLAN" means the K&G Men's Center 401(k) Plan.
1.25 "LEASED EMPLOYEE" means any person who (a) is not a common law
employee of an Affiliated Employer, (b) pursuant to an agreement between an
Affiliated Employer and any other person, has performed services for an
Affiliated Employer (or for an Affiliated Employer and related persons
determined in accordance with section 414(n)(6) of the Code) on a substantially
full-time basis for a period of at least one year and (c) performs the services
under primary direction and control of the recipient.
1.26 "MATCHED SALARY DEFERRAL CONTRIBUTION" means that portion of the
Salary Deferral Contribution that the Board determines to match from time to
time in its sole discretion.
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1.27 "MEMBER" means the person or persons employed by an Employer
during the Plan Year and eligible to participate in the Plan.
1.28 "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee who is not a
Highly Compensated Employee.
1.29 "PERIOD OF SERVICE" means a period of employment with an
Affiliated Employer which commences on the day on which an Employee performs his
initial Hour of Service or performs his initial Hour of Service upon returning
to the employ of an Affiliated Employer, whichever is applicable, and ends on
the date the Employee Xxxxxx Service.
1.30 "PERIOD OF SEVERANCE" means the period of time commencing on the
date an Employee Xxxxxx Service and ending on the date the Employee again
performs an Hour of Service.
1.31 "PLAN" means The Men's Wearhouse, Inc. 401(k) Savings Plan, as
amended from time to time.
1.32 "PLAN YEAR" means the calendar year.
1.33 "QUALIFIED DOMESTIC RELATIONS ORDER" means a qualified domestic
relations order as defined in section 414(p) of the Code.
1.34 "QJSA" means a qualified joint and survivor annuity which is
purchased with the Member's or former Member's Account balance as of the date of
distribution to provide equal monthly payments for the life of the Member or
former Member, and after his death, monthly payments for the life of his
surviving Spouse in a monthly amount equal to one-half the amount of the monthly
payment made while he was alive.
1.35 "QPSA" means a qualified preretirement survivor annuity which is
purchased with the Member's Account balance as of the date of distribution that
will provide equal monthly payments for the life of his surviving Spouse.
1.36 "REGULATION" means the Department of Treasury regulation
specified, as it may be changed from time to time.
1.37 "REQUIRED BEGINNING DATE" means:
(a) effective January 1, 2001, in the case of an individual
who is not a Five Percent Owner in the Plan Year that ends in the
calendar year in which he attains age 70 1/2, the Required Beginning
Date is April 1 of the calendar year following the later of (i) the
calendar year in which the individual attains age 70 1/2, or (ii) the
calendar year in which the individual incurs a Separation From Service;
and
(b) in the case of an individual who is a Five Percent Owner
in the Plan Year that ends in the calendar year in which he attains age
70 1/2, the Required Beginning Date is April 1 of the calendar year
following the year in which he attains age 70 1/2.
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1.38 "RETIREMENT AGE" means age 59 1/2.
1.39 "ROLLOVER CONTRIBUTION" means the amount contributed by a Member
of the Plan which consists of any part of an Eligible Rollover Distribution from
a qualified employee trust described in section 401(a) of the Code.
1.40 "SEPARATION FROM SERVICE" means an individual's termination of
employment with an Affiliated Employer without commencing or continuing
employment with (a) any other Affiliated Employer or (b) any other entity under
circumstances where, under Regulations and Internal Revenue Service rulings, the
individual is not deemed to have incurred a Separation From Service within the
meaning of section 401(k)(2) of the Code.
1.41 "SERVICE" means the period or periods that a person is paid or is
entitled to payment for performance of duties with an Affiliated Employer.
1.42 "XXXXXX SERVICE" means the earlier of the following events: (a)
the Employee's quitting, retiring, dying or being discharged, (b) the completion
of a period of 365 continuous days in which the Employee remains absent from
Service (with or without pay) for any reason other than quitting, retiring,
dying or being discharged, such as vacation, holiday, sickness, disability,
leave of absence, layoff or any other absence or (c) the second anniversary of
the commencement of a continuous period of absence occasioned by the reason of
the pregnancy of the Employee, the birth of a child of the Employee, the
placement of a child with the Employee in connection with the adoption of the
child by the Employee or the caring for the child for a period commencing
immediately after the child's birth or placement.
1.43 "SPONSOR" means The Men's Wearhouse, Inc., a Texas corporation.
1.44 "SPONSOR STOCK" means the common stock of The Men's Wearhouse,
Inc., a Texas corporation, the Sponsor.
1.45 "SPOUSE" means the person to whom the Member or former Member is
married under applicable local law. In addition, to the extent provided in a
Qualified Domestic Relations Order, a surviving former spouse of a Member or
former Member will be treated as the Spouse of the Member or former Member, and
to the same extent any current spouse of the Member or former Member will not be
treated as a Spouse of the Member or former Member.
1.46 "TRUST" means the trust estate created to fund the Plan.
1.47 "TRUSTEE" means collectively one or more persons or corporations
with trust powers which have been appointed by the initial Sponsor and have
accepted the duties of Trustee and any successor appointed by the Sponsor.
1.48 "VALUATION DATE" means each business day of the Plan Year.
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ARTICLE II
ELIGIBILITY
2.01 ELIGIBILITY REQUIREMENTS. Each Employee who is employed by an
Employer shall be eligible to participate in the Plan beginning on the Entry
Date that occurs with or next follows the date on which the Employee completes
three months of Active Service. However, an Employee who is included in a unit
of Employees covered by a collective bargaining agreement between the Employees'
representative and the Employer shall be excluded, even if he has met the
requirements for eligibility, if there has been good faith bargaining between
the Employer and the Employees' representative pertaining to retirement benefits
and the agreement does not require the Employer to include such Employees in the
Plan. In addition, a Leased Employee shall not be eligible to participate in the
Plan unless the Plan's qualified status is dependent upon coverage of the Leased
Employee. An Employee who is a nonresident alien (within the meaning of section
7701(b) of the Code) and receives no earned income (within the meaning of
section 911(d)(2) of the Code) from any Affiliated Employer that constitutes
income from sources within the United States (within the meaning of section
861(a)(3) of the Code) is not eligible to participate in the Plan. During any
period in which an individual is classified by an Employer as an independent
contractor with respect to such Employer, the individual is not eligible to
participate in the Plan (even if he is subsequently reclassified by the Internal
Revenue Service as a common law employee of the Employer and the Employer
acquiesces to the reclassification). An Employee who is a nonresident alien
(within the meaning of section 7701(b) of the Code) and who does receive earned
income (within the meaning of section 911(d)(2) of the Code) from any Affiliated
Employer that constitutes income from sources within the United States (within
the meaning of section 861(a)(3) of the Code) all of which is exempt from United
States income tax under an applicable tax convention is not eligible to
participate in the Plan. An Employee who is expatriated to the United States
from another country is not eligible to participate in the Plan for so long as
he continues to accrue deferred compensation or retirement benefits under any
agreement or program to which an Affiliated Employer other than an Employer is a
party. Finally, an Employee who is employed outside the United States is not
eligible to participate in the Plan unless the Committee elects to permit him to
participate in the Plan.
2.02 EARLY PARTICIPATION FOR ROLLOVER PURPOSES. An Employee who
satisfies the eligibility requirements specified in Section 2.01 other than the
service requirement shall be eligible to make Rollover Contributions to the Plan
on the Entry Date next following (not coincident with) the date on which he
completes an Hour of Service.
2.03 ELIGIBILITY UPON REEMPLOYMENT. If an Employee incurs a Separation
From Service with the Employer prior to the date he initially begins
participating in the Plan, he shall be eligible to begin participation in the
Plan on the later of the date he would have become a Member if he did not incur
a Separation From Service or the date on which he performs an Hour of Service
after he incurs a Separation from Service. Subject to Section 2.04, once an
Employee becomes a Member, his eligibility to participate in the Plan shall
continue until he Xxxxxx Service.
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2.04 CESSATION OF PARTICIPATION. An individual who has become a Member
will cease to be a Member on the earliest of the date on which he (a) Xxxxxx
Service, (b) is transferred from the employ of an Employer to the employ of an
Affiliated Employer that has not adopted the Plan, (c) becomes included in a
unit of employees covered by a collective bargaining agreement that does not
require coverage of those employees under the Plan, (d) becomes a Leased
Employee, or (e) becomes included in another classification of Employees who,
under the terms of the Plan, are not eligible to participate. Under these
circumstances, the Member's Account becomes frozen; he cannot contribute to the
Plan or share in the allocation of any Contributions for the frozen period.
However, his Accounts shall continue to share in any Plan income allocable to
his Accounts during the frozen period of time.
2.05 RECOMMENCEMENT OF PARTICIPATION. A former Member will again become
a Member on the day on which he again becomes included in a classification of
Employees that, under the terms of the Plan, is eligible to participate.
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ARTICLE III
CONTRIBUTIONS
3.01 SALARY DEFERRAL CONTRIBUTIONS. The Employer shall make a Salary
Deferral Contribution in an amount equal to the amount by which its Members'
Considered Compensation was reduced as a result of salary deferral agreements.
Any such salary deferral agreement shall be an agreement in a form satisfactory
to the Committee to prospectively receive Considered Compensation from the
Employer in a reduced amount and to have the Employer contribute an amount equal
to the amount of the reduction to the Trust on account of the Member. A Member's
right to benefits derived from Salary Deferral Contributions made to the Plan on
his behalf shall be nonforfeitable. Any such salary deferral agreement shall be
revocable in accordance with its terms, provided that no revocation shall be
retroactive or permit payment to the Member of the amount required to be
contributed to the Trust. A Member shall be entitled to prospectively modify his
salary deferral agreement at least once a year. A Member shall be entitled to
revoke, on a prospective basis, his salary deferral agreement at any time. A
Member who revokes his salary reduction agreement may file a new salary
reduction agreement with an effective date no earlier than the first day of the
next Plan Year. A Member may increase or may decrease, on a prospective basis,
his salary reduction percentage or dollar amount as of the first day of each
calendar quarter.
Effective August 1, 2000, the following rules shall apply with respect
to a Member's salary deferral election: (a) a Member's election to reduce his
Considered Compensation may not exceed 25 percent of his Considered
Compensation; (b) a Member who revokes his salary reduction agreement may file a
new salary reduction agreement with an effective date as of the first day of any
month subsequent to the month in which he revoked the agreement; and (c) a
Member may increase or may decrease, on a prospective basis, his salary
reduction percentage or dollar amount as of the first day of each month.
Effective January 1, 2001, the maximum amount a Member may elect to
reduce his Considered Compensation under his salary deferral agreement shall be
determined by the Committee, in its sole discretion from time to time. In
addition, the election to have Salary Deferral Contributions made, the ability
to change the rate of Salary Deferral Contributions, the right to suspend Salary
Deferral Contributions, and the manner of commencing new Salary Deferral
Contributions shall be permitted under any uniform method determined by the
Committee from time to time.
3.02 MATCHING CONTRIBUTIONS. Each Employer will make a Matching
Contribution to be allocated to its Employees who are Members in an amount equal
to five percent of the first $2,000.00 of each such Member's Salary Deferral
Contribution for the Plan Year. Effective as of March 1, 1999, with respect to
Considered Compensation deferred on or after such date, each Employer will make
a Matching Contribution to be allocated to its Employees who are Members in an
amount equal to eight percent of the first $2,000.00 of each such Member's
Salary Deferral Contribution for the Plan Year. Effective as of March 1, 2000,
with respect to Considered Compensation deferred on or after such date, each
Employer will make a Matching Contribution to be allocated to its Employees who
are Members in an amount equal to ten percent of the first $2,000.00 of each
such Member's Salary Deferral Contribution for the Plan Year. Effective
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January 1, 2001, each Employer shall make a Matching Contribution in such
amount, and for such period, if any, as shall be determined by the Board. A
Member's right to benefits derived from Matching Contributions made to the Plan
on his behalf shall be nonforfeitable.
3.03 SUPPLEMENTAL CONTRIBUTIONS. Each Employer may contribute for a
Plan Year a Supplemental Contribution to be allocated among Members in such
amount, if any, as shall be determined by the Employer. The rate of the
Supplemental Contribution need not be uniform among all divisions of the
Employer. A Member's right to benefits derived from Supplemental Contributions
made to the Plan on his behalf shall be nonforfeitable.
3.04 ROLLOVER CONTRIBUTIONS AND PLAN-TO-PLAN TRANSFERS. The Committee
may permit Rollover Contributions by Members and/or direct transfers to or from
another qualified plan on behalf of Members from time to time. If Rollover
Contributions and/or direct transfers to or from another qualified plan are
permitted, the opportunity to make those contributions and/or direct transfers
must be made available to Members on a nondiscriminatory basis. For this purpose
only, all Employees who are included in a classification of Employees who are
eligible to participate in the Plan shall be considered to be Members of the
Plan even though they may not have met the Active Service requirements for
eligibility. However, they shall not be entitled to elect to have Salary
Deferral Contributions made or to share in Employer Contributions or forfeitures
unless and until they have met the requirements for eligibility, contributions
and allocations. A Rollover Contribution shall not be accepted unless it is
directly rolled over to the Plan in a rollover described in section 401(a)(31)
of the Code. A Member shall not be permitted to make a Rollover Contribution if
the property he intends to contribute is for any reason unacceptable to the
Trustee. A Member's right to benefits attributable to his Rollover Contributions
made to the Plan shall be nonforfeitable.
3.05 QNECS - EXTRAORDINARY EMPLOYER CONTRIBUTIONS. Any Employer may
make a QNEC in such amount, if any, as shall be determined by it. A Member's
right to benefits derived from QNECs made to the Plan on his behalf shall be
nonforfeitable. In no event will QNECs be distributed before Salary Deferral
Contributions may be distributed.
3.06 NONDEDUCTIBLE CONTRIBUTIONS NOT REQUIRED. Notwithstanding any
other provision of the Plan, no Employer shall be required to make any
contribution that would be a "nondeductible contribution" within the meaning of
section 4972 of the Code.
3.07 FORM OF PAYMENT OF CONTRIBUTIONS. Contributions may be paid to the
Trustee either in cash or in qualifying employer securities (as such term is
defined in section 407(d) of ERISA) or any combination thereof, provided that
payment may not be made in any form constituting a prohibited transaction under
section 4975 of the Code or section 406 of ERISA.
3.08 DEADLINE FOR PAYMENT OF EMPLOYER CONTRIBUTIONS. Salary Deferral
Contributions and Matching Contributions shall be paid to the Trustee in
installments. The installment for each payroll period shall be paid as soon as
administratively feasible. The Matching Contributions, the Supplemental
Contributions and QNECs for a Plan Year shall be paid to the Trustee in one or
more installments, as the Employer may from time to time determine; provided,
however, that such contributions may not be paid later than the time
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prescribed by law (including extensions thereof) for filing the Employer's
income tax return for its taxable year ending with or within such Plan Year.
3.09 RETURN OF CONTRIBUTIONS FOR MISTAKE, DISQUALIFICATION OR
DISALLOWANCE OF DEDUCTION. Subject to the limitations of section 415 of the
Code, the assets of the Trust shall not revert to any Employer or be used for
any purpose other than the exclusive benefit of the Members, former Members, and
their Beneficiaries and the reasonable expenses of administering the Plan
except:
(a) any Employer Contribution made because of a mistake of
fact may be repaid to the Employer within one year after the payment of
the Contribution; and
(b) all Employer Contributions are conditioned upon their
deductibility under section 404 of the Code; therefore, to the extent
the deduction is disallowed, the Contributions may be repaid to the
Employer within one year after the disallowance.
The Employer has the exclusive right to determine if a Contribution or
any part of it is to be repaid or is to remain as a part of the Trust except
that the amount to be repaid is limited, if the Contribution is made by mistake
of fact or if the deduction for the Contribution is disallowed, to the excess of
the amount contributed over the amount that would have been contributed had
there been no mistake or over the amount disallowed. Earnings which are
attributable to any excess contribution cannot be repaid. Losses attributable to
an excess contribution must reduce the amount that may be repaid. All repayments
of Contributions made due to a mistake of fact or with respect to which a
deduction is disallowed are limited so that the balance in a Member's or former
Member's Account cannot be reduced to less than the balance that would have been
in the Member's or former Member's Account had the mistaken amount or the amount
disallowed never been contributed.
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ARTICLE IV
ALLOCATION AND VALUATION OF ACCOUNTS
4.01 INFORMATION STATEMENTS FROM EMPLOYER. Upon request by the
Committee, the Employer shall provide the Committee with a schedule setting
forth the amount of its Salary Deferral Contribution, Supplemental Contribution,
QNEC, and restoration contribution; the names of its Members, the number of
years of Active Service of each of its Members, the amount of Considered
Compensation and Annual Compensation paid to each Member, and the amount of
Considered Compensation and Annual Compensation paid to all its Members. Such
schedules shall be conclusive evidence of such facts.
4.02 ALLOCATION OF SALARY DEFERRAL CONTRIBUTION. The Committee shall
allocate the Salary Deferral Contribution among the Members by allocating to
each Member the amount by which his Considered Compensation was reduced pursuant
to a salary deferral agreement (as described in Section 3.01) and shall credit
each such Member's share to his Salary Deferral Contribution Account.
4.03 ALLOCATION OF MATCHING CONTRIBUTION. The Committee shall
separately allocate the Matching Contribution made by an Employer among the
Employer's Members in the proportion which the Matched Salary Deferral
Contributions of each such Member bears to the total Matched Salary Deferral
Contributions of all such Members. Each Member's proportionate share shall be
credited to his Matching Contribution Account.
4.04 ALLOCATION OF SUPPLEMENTAL CONTRIBUTION. For each Plan Year, the
Committee shall allocate the Supplemental Contribution made by an Employer among
the Members who are employed by the Employer during the Plan Year, based upon
each such Member's Considered Compensation paid by the Employer as compared to
the Considered Compensation for all such Members employed by the Employer and
eligible for the allocation.
4.05 ALLOCATION OF QNEC. The Committee shall separately allocate the
QNEC among the Non-Highly Compensated Employees who are Members based upon each
such Member's Considered Compensation as compared to the Considered Compensation
of all such Members.
4.06 VALUATION OF ACCOUNTS. A Member's or former Member's Accounts
shall be valued at fair market value on each Valuation Date. The earnings and
losses attributable to any asset in the Trust will be allocated solely to the
Account of the Member or former Member on whose behalf the investment in the
asset was made. In determining the fair market value of the Members' or former
Member's Accounts, the Trustee shall utilize such sources of information as it
may deem reliable including, but not limited to, stock market quotations,
statistical evaluation services, newspapers of general circulation, financial
publications, advice from investment counselors or brokerage firms, or any
combination of sources which in the opinion of the Trustee will provide the
price such assets were last traded at on a registered stock exchange; provided,
however, that with respect to regulated investment company shares, the Trustee
shall rely exclusively on information provided to it by the investment adviser
to such funds.
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4.07 NO RIGHTS UNLESS OTHERWISE PRESCRIBED. No allocations,
adjustments, credits, or transfers shall ever vest in any Member or former
Member any right, title, or interest in the Trust except at the times and upon
the terms and conditions herein set forth.
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ARTICLE V
BENEFITS
5.01 RETIREMENT BENEFIT. Upon his Separation From Service, a Member or
former Member is entitled to receive 100 percent of all of his Account balances.
5.02 DEATH BENEFIT. Subject to Sections 5.05 and 5.06, if a Member or
former Member dies, the death benefit payable to his Beneficiary shall be 100
percent of the remaining amount of his Account balances.
5.03 DISTRIBUTION METHODS AVAILABLE. Effective with respect to a
distribution with an Annuity Starting Date that occurs on or after July 1, 2001,
the only distribution method available under the Plan is a lump sum payment.
With respect to a distribution with an Annuity Starting Date that occurs prior
to July 1, 2001, subject to Sections 5.05, 5.06 and 5.07, the distribution
methods available under the Plan are (a) a lump sum payment or (b) periodic
installment payments. If a Member or former Member elects periodic installment
payments, his Account balances shall be paid in substantially equal monthly,
quarterly, semi-annual or annual periodic installments (as elected by him) for a
specified number of years which may not exceed his life expectancy or the joint
and last survivor life expectancy of him and his Beneficiary. Life expectancies
will be determined, under Regulations issued under section 79 of the Code, as of
the time payments commence. If installments are elected, the Committee may
direct that the Member's or former Member's interest in the Plan be segregated
and invested separately. Upon the death of a Member or former Member prior to
the complete distribution of his Account balances, his Beneficiary may elect to
receive the Beneficiary's interest in the Account in (a) an immediate lump sum
cash payment or (b) installment payments for any period not in excess of the
period (if any) selected by the Member or former Member.
5.04 ELECTION OF DISTRIBUTION METHOD. Each Member or former Member
shall have the right to elect the method of distribution applicable to him. An
election of an option available under this Article shall be made within the
90-day period that ends on the Member's or former Member's Annuity Starting
Date, and may be rescinded or changed by a Member or former Member at any time
prior to the distribution. An election, change, or rescission of an option must
be made by executing and properly filing the form or forms approved by the
Committee. Proof of age and other information may be required by the Committee.
5.05 QUALIFIED JOINT AND SURVIVOR ANNUITY REQUIREMENTS FOR FORMER K&G
PLAN PARTICIPANTS. This Section shall be effective only with respect to a
distribution with an Annuity Starting Date that occurs prior to July 1, 2001.
Except for small benefits payable under Section 5.07, each Member or former
Member who (a) is a Former K&G Plan Participant, (b) is married on his Annuity
Starting Date, and (c) does not die before his Annuity Starting Date will be
paid in the form of a QJSA, unless he and his Spouse make a valid election to
waive this form of payment. Except for small benefits payable under Section
5.07, each other Member who does not die before the Annuity Starting Date, will
be paid in the form of a life only annuity unless he makes a valid election to
waive this form of payment. A Member's waiver of the QJSA form of payment will
not be effective unless the waiver (1) designates a specific nonspouse
Beneficiary who will receive Plan benefits and (2) specifies the particular
optional form of benefits selected
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instead of the QJSA. Also, a Member's or former Member's waiver of the QJSA will
not be effective unless his Spouse signs either a specific or a general consent
to his waiver. A specific spousal consent must (1) be in writing, (2) consent to
the waiver of the QJSA, (3) consent to the specific nonspouse Beneficiary
designated by the Member or former Member to receive Plan benefits, (4) consent
to the particular optional form of benefit selected by the Member or former
Member, (5) acknowledge the effect of the Spouse's consent to the Member's or
former Member's waiver of the QJSA, and (6) be witnessed by a notary public or a
Plan representative. A general spousal consent must (1) be in writing, (2)
consent to the Member's or former Member's waiver of the QJSA, (3) specify that
the Member or former Member can change the Beneficiary designated by him to
receive Plan benefits, without any requirement of further consent by the Spouse,
(4) specify that the Member or former Member can change the optional form of
benefit elected by the Member or former Member, without any requirement of
further consent by the Spouse, (5) acknowledge that the Spouse has the right to
limit consent to a specific Beneficiary and a specific optional form of benefit,
and that the Spouse voluntarily elects to relinquish both of those rights, (6)
acknowledge the effect of the Spouse's consent to the Member's or former
Member's waiver of the QJSA, and (7) be witnessed by a notary public or a Plan
representative. However, a Member's or former Member's election to waive the
QJSA shall be effective if it is established to the satisfaction of the
Committee that spousal consent to his waiver may not be obtained because (1)
there is no Spouse, (2) the Spouse cannot be located, or (3) there exist such
other circumstances which obviate the necessity of obtaining the spousal
consent. Any consent by the Member's or former Member's Spouse (or establishment
that the consent of the Member's or former Member's Spouse may not be obtained)
shall be effective only with respect to such Spouse.
5.06 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY REQUIREMENTS FOR FORMER
K&G PLAN PARTICIPANTS.
(a) General Rules. This Section shall be effective only with
respect to a distribution with an Annuity Starting Date that occurs
prior to July 1, 2001. Except for small benefits payable under Section
5.07, the death benefit of a Member or former Member who (1) is a
Former K&G Plan Participant, (2) is married on the date of his death
and (3) dies before his Annuity Starting Date will be paid in the form
of a QPSA, unless he and his Spouse make a valid election to waive this
form of payment. Subject to Section 5.10 the surviving Spouse of such a
Member or former Member may elect to have payments commence to her as
soon as administratively practicable, or at any later date selected by
her.
(b) Waivers. Any valid election to waive the QPSA must be made
in writing by the Member or former Member and consented to by the
Member's or former Member's Spouse. Any spousal consent to the waiver
must: (1) be witnessed by a member of the Committee, the Trustee, or a
notary public, and (2) consent to the specific nonspouse Beneficiary or
Beneficiaries selected by the Member or former Member (or permit future
changes in designations by the Member provided that general consent
requirements similar to those described in Section 5.05 are satisfied).
However, if the Member or former Member establishes to the satisfaction
of the Committee or the Trustee that the spouse's written consent
cannot be obtained because there is no Spouse or the Spouse cannot be
located, a waiver signed only by the Member or former Member
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will be considered a valid election. The consent to a waiver is valid
only with respect to the Spouse who signs it; therefore, if the Member
or former Member remarries after executing a waiver, the Member's or
former Member's new Spouse must execute a new consent. The Member or
former Member may revoke a prior waiver without his Spouse's consent at
any time before benefit payments begin. Except as specified below, an
election to waive the QPSA will be valid only if it is made after the
first day of the Plan Year in which the Member or former Member attains
age 35 and before the Member's or former Member's death.
(c) Pre-Age 35 Waivers. A Member or former Member may waive
the QPSA, with spousal consent, before the first day of the Plan Year
in which he attains age 35 if the Sponsor provides him a written
explanation of the QPSA (that meets the requirements of Section 5.12)
within the period beginning one year before he Xxxxxx Service and
ending one year after he Xxxxxx Service. However, any such waiver will
expire and become invalid beginning on the first day of the Plan Year
in which the Member or former Member attains age 35.
5.07 LUMP SUM PAYMENT OF SMALL AMOUNTS UPON SEPARATION FROM SERVICE.
Notwithstanding any other provision of the Plan other than Section 5.09,
effective August 1, 2000, each Member or former Member (a) who does not die
before the Annuity Starting Date and (b) whose Account balances at the time of a
distribution to him on account of his Separation From Service are, in the
aggregate, less than or equal to $5,000.00, shall be paid in the form of a
single sum payment. Subject to Section 5.09, effective August 1, 2000, if a
Member or former Member dies before he has received any payment from the Plan,
and the total of his Account balances at the time of the distribution is less
than or equal to $5,000.00, his Beneficiary shall be paid in the form of a lump
sum payment. For this purpose, for distributions prior to October 18, 2000, if
the aggregate value of a Member's or former Member's Account balances determined
at the time of any prior payment to him exceeded $5,000.00, then the benefit to
be distributed at any subsequent time shall be deemed to exceed that amount. If
a Distributee who is subject to this Section 5.07 does not furnish instructions
in accordance with Plan procedures to directly roll over his Plan benefit within
45 days after he has been given direct rollover forms, he will be deemed to have
elected a lump sum cash distribution of his entire Plan benefit.
5.08 FORM OF PAYMENT. All payments from the Plan shall be made in the
form of cash.
5.09 DIRECT ROLLOVER OPTION. To the extent required under Regulations,
a Distributee has the right to direct that any portion of his Eligible Rollover
Distribution will be directly paid to an Eligible Retirement Plan specified by
him that will accept the Eligible Rollover Distribution.
5.10 TIME OF DISTRIBUTIONS. Notwithstanding any other provision of the
Plan, all benefits payable under the Plan shall be distributed, or commence to
be distributed, in compliance with the following provisions:
(a) DISTRIBUTION DEADLINES FOR MEMBERS OR FORMER MEMBERS WHO
ARE 70 1/2 OR OLDER. If a Member or former Member attains 70 1/2 and
the Member or former
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Member is required to receive a distribution under section 401(a)(9) of
the Code, the Member or former Member must elect to receive a
distribution in one lump sum or in installments which must commence by
his Required Beginning Date. If installments are elected, each
installment paid must be equal to or greater than the minimum required
distribution under section 401(a)(9) of the Code.
(b) DISTRIBUTION DEADLINE FOR DEATH BENEFITS. If a Member or
former Member dies before the distribution of his Plan benefit has
commenced, his entire interest shall be distributed within five years
after his death. If a Member or former Member dies after the
distribution of his Plan benefit has commenced, the remaining portion
of his interest in the Plan, if any, will be distributed at least as
rapidly as under the method of distribution selected by him.
(c) LIMITATIONS ON DEATH BENEFITS. Benefits payable under the
Plan shall not be provided in any form that would cause a Member's
death benefit to be more than incidental. Any distribution required to
satisfy the incidental benefit requirement shall be considered a
required distribution for purposes of section 401(a)(9) of the Code.
(d) COMPLIANCE WITH SECTION 401(a)(9). All distributions under
the Plan will be made in accordance with the requirements of section
401(a)(9) of the Code and all Regulations promulgated thereunder. The
provisions of the Plan reflecting section 401(a)(9) of the Code
override any distribution options in the Plan inconsistent with such
Section.
(e) COMPLIANCE WITH SECTION 401(a)(14). Unless the Member or
former Member otherwise elects, the payment of benefits under the Plan
to the Member or former Member will begin not later than the 60th day
after the close of the Plan Year in which occurs the latest of (a) the
date on which the Member or former Member attains the later of age 62
or Retirement Age, (b) the tenth anniversary of the year in which the
Member or former Member commenced participation in the Plan, or (c) the
Member's or former Member's Separation From Service.
5.11 CONSENT TO DISTRIBUTIONS UPON SEPARATION FROM SERVICE.
Notwithstanding any other provision of the Plan, no benefit shall be distributed
or commence to be distributed to a Member or former Member prior to his
attainment of the later of age 62 or Retirement Age without his consent, unless
the benefit is payable in a single sum under Section 5.07. Any such consent
shall be valid only if given not more than 90 days prior to the Member's or
former Member's Annuity Starting Date and after his receipt of the notice
regarding benefits described in Section (a).
5.12 INFORMATION PROVIDED TO MEMBERS. Information regarding the form of
benefits available under the Plan shall be provided to Members or former Members
in accordance with the following provisions:
(a) General Information. Except as otherwise provided in
paragraph (c), the Sponsor shall provide each Member or former Member
with a written general explanation or description of (1) the
eligibility conditions and other material features of
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the optional forms of benefit available under the Plan, (2) the
relative values of the optional forms of benefit available under the
Plan, and (3) the Member's or former Member's right, if any, to defer
receipt of the distribution.
(b) Time for Giving Notice. The written general explanation or
description regarding any optional forms of benefit available under the
Plan shall be provided to a Member or former Member no less than 30
days and no more than 90 days before his Annuity Starting Date unless
he legally waives this requirement.
(c) Exception for Members with Small Benefit Amounts.
Notwithstanding the preceding provisions of this Section, no
information regarding any optional forms of benefit otherwise available
under the Plan shall be provided to the Member or former Member if his
benefit is payable in a single sum under Section 5.07.
(d) QJSA Notice. No less than 30 days (seven days if the
Member or former Member legally waives the 30-day notice requirement)
and no more than 90 days before the Annuity Starting Date of a Member
or former Member who is subject to Section 5.05, the Sponsor shall
provide him a written notice explaining the terms and conditions of
each retirement option, and in particular (1) the automatic QJSA or
life annuity, (2) the Member's or former Member's right to make, and
the effect of, a waiver of the automatic QJSA, (3) the right of the
Member's or former Member's Spouse to consent or not to consent to such
a waiver, (4) the right to make, and the effect of, a revocation of a
previous waiver or election, (5) the eligibility conditions and other
material features of the optional forms of benefit, (6) the relative
values of the optional forms of benefit, and (7) the Member's or former
Member's right to request a written explanation of the financial effect
upon a Member's or former Member's annuity of electing to waive the
QJSA or life annuity.
(e) QPSA Notice. The Sponsor will provide each Member or
former Member who is subject to Section 5.06 a written explanation of:
(a) the terms and conditions of the QPSA, (b) the Member's or former
Member's right to waive the QPSA and the effect of the waiver, (c) the
rights of the Member's or former Member's Spouse, and (d) the right to
revoke a prior waiver and the effect of the revocation. This written
explanation will be provided within the latest of the period (a)
beginning on the first day of the Plan Year in which the Member or
former Member attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Member or former Member attains
age 35, (b) ending one year after the individual becomes a Member, or
(c) ending one year after the QPSA rules first become effective with
respect to the Member or former Member.
5.13 DESIGNATION OF BENEFICIARY. Each Member has the right to designate
and to revoke the designation of his Beneficiary or Beneficiaries. Each
designation or revocation must be evidenced by a written document in the form
required by the Committee, signed by the Member and filed with the Committee. If
no designation is on file at the time of a Member's death or if the Committee
determines that the designation is ineffective, the designated Beneficiary shall
be the Member's Spouse, if living, or if not, the executor, administrator or
other personal representative of the Member's estate. If a Member is considered
to be married
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under local law, the Member's designation of any Beneficiary, other than the
Member's Spouse, shall not be valid unless the spouse acknowledges in writing
that she understands the effect of the Member's beneficiary designation and
consents to it. The consent must be to a specific Beneficiary. The written
acknowledgement and consent must be filed with the Committee, signed by the
Spouse and at least two witnesses, one of whom must be a member of the Committee
or a notary public. However, if the Spouse cannot be located or there exist
other circumstances as described in sections 401(a)(11) and 417(a)(2) of the
Code, the requirement of the Member's Spouse's acknowledgement and consent may
be waived. If a Beneficiary other than the Member's Spouse is named, the
designation shall become invalid if the Member is later determined to be married
under local law, the Member's missing Spouse is located or the circumstances
which resulted in the waiver of the requirement of obtaining the consent of the
Member's Spouse no longer exist.
5.14 DISTRIBUTIONS TO DISABLED PERSONS. If the Committee determines
that any person to whom a payment is due is unable to care for his affairs
because of physical or mental disability, it shall have the authority to cause
the payments to be made to the Spouse, brother, sister or other person the
Committee determines to have incurred, or to be expected to incur, expenses for
that person unless a prior claim is made by a qualified guardian or other legal
representative. The Committee and the Trustee shall not be responsible to
oversee the application of those payments. Payments made pursuant to this power
shall be a complete discharge of all liability under the Plan and the Trust and
the obligations of the Employer, the Trustee, the Trust and the Committee.
5.15 DISTRIBUTIONS PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS. The
Committee will instruct the Trustee to pay benefits in accordance with the terms
of any order that has been determined, in accordance with Plan procedures, to be
a Qualified Domestic Relations Order. A Qualified Domestic Relations Order may
require the payment of an immediate cash lump sum to an alternate payee even if
the Member or former Member is not then entitled to receive an immediate payment
of Plan benefits.
5.16 CLAIMS PROCEDURE. When a benefit is due, the Member, former
Member, or Beneficiary should submit his claim to the person or office
designated by the Committee to receive claims. Under normal circumstances, a
final decision shall be made as to a claim within 90 days after receipt of the
claim. If the Committee notifies the claimant in writing during the initial
90-day period, it may extend the period up to 180 days after the initial receipt
of the claim. The written notice must contain the circumstances necessitating
the extension and the anticipated date for the final decision. If a claim is
denied during the claims period, the Committee must notify the claimant in
writing. The denial must include the specific reasons for it, the Plan
provisions upon which the denial is based, and the claims review procedure. If
no action is taken during the claims period, the claim is treated as if it were
denied on the last day of the claims period.
If a Member's, former Member's, or Beneficiary's claim is denied and he
wants a review, he must apply to the Committee in writing. That application may
include any comment or argument the claimant wants to make. The claimant may
either represent himself or appoint a representative, either of whom has the
right to inspect all documents pertaining to the claim and
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its denial. The Committee may schedule any meeting with the claimant or his
representative that it finds necessary or appropriate to complete its review.
The request for review must be filed within 60 days after the denial.
If it is not, the denial becomes final. If a timely request is made, the
Committee must make its decision, under normal circumstances, within 60 days of
the receipt of the request for review. However, if the Committee notifies the
claimant prior to the expiration of the initial review period, it may extend the
period of review up to 120 days following the initial receipt of the request for
a review. All decisions of the Committee must be in writing and must include the
specific reasons for their action and the Plan provisions on which their
decision is based. If a decision is not given to the claimant within the review
period, the claim is treated as if it were denied on the last day of the review
period.
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ARTICLE VI
IN-SERVICE DISTRIBUTIONS AND LOANS
6.01 IN-SERVICE FINANCIAL HARDSHIP DISTRIBUTIONS.
(a) General. Prior to his Separation From Service, a Member is
entitled to receive a distribution from his Salary Deferral
Contribution Account (except for income that was not credited to his
Salary Deferred Contribution Account as of December 31, 1988), his
Rollover Account, his Matching Contribution Account and his
Supplemental Contribution Account in the event of an immediate and
heavy financial need incurred by the Member and the Committee's
determination that the withdrawal is necessary to alleviate that
hardship.
(b) Permitted Reasons For Financial Hardship Withdrawals. A
distribution shall be made on account of financial hardship only if the
distribution is for: (i) Expenses for medical care described in section
213(d) of the Code previously incurred by the Member, the Member's
Spouse, or any dependents of the Member (as defined in section 152 of
the Code) or necessary for these persons to obtain medical care
described in section 213(d) of the Code, (ii) costs directly related to
the purchase (excluding mortgage payments) of a principal residence for
the Member, (iii) payment of tuition and related educational fees for
the next 12 months of post-secondary education for the Member, his
Spouse, children, or dependents (as defined in section 152 of the
Code), (iv) payments necessary to prevent the eviction of the Member
from his principal residence or foreclosure on the mortgage of the
Member's principal residence, or (v) any other event added to this list
by the Commissioner of Internal Revenue.
(c) Amount. A distribution to satisfy an immediate and heavy
financial need shall not be made in excess of the amount of the
immediate and heavy financial need of the Member and the Member must
have obtained all distributions, other than hardship distributions, and
all nontaxable (at the time of the loan) loans currently available
under all plans maintained by the Employer. The amount of a Member's
immediate and heavy financial need includes any amounts necessary to
pay any federal, state or local income taxes or penalties reasonably
anticipated to result from the financial hardship distribution.
(d) Suspension of Participation in Certain Benefit Programs.
The Member's hardship distribution shall terminate his right to have
the Employer make any Salary Deferral Contributions on his behalf until
the next time Salary Deferral Contributions are permitted after the
lapse of 12 months following the hardship distribution and his timely
filing of a written request to resume his Salary Deferral
Contributions. In addition, for 12 months after he receives a hardship
distribution from the Plan, the Member is prohibited from making
elective contributions and employee contributions to or under all other
qualified and nonqualified plans of deferred compensation maintained by
the Employer, including stock option plans, stock purchase plans and
Code section 401(k) cash or deferred arrangements that are part of
cafeteria plans described in section 125 of the Code. However, the
Member is not prohibited from making contributions to a health
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or welfare benefit plan, including one that is part of a cafeteria plan
within the meaning of section 125 of the Code.
(e) Resumption of Salary Deferral Contributions. When the
Member resumes Salary Deferral Contributions, he cannot have the
Employer make any Salary Deferral Contributions in excess of the limit
in section 402(g) of the Code for that taxable year reduced by the
amount of Salary Deferral Contributions made by the Employer on the
Member's behalf during the taxable year of the Member in which he
received the hardship distribution.
(f) Order of Withdrawals. Financial hardship distributions
will be made in the following order: First withdrawals will be made
from the Member's Supplemental Contribution Account, then from his
Matching Contribution Account, then from his Rollover Account, and
finally, from his Salary Deferral Contribution Account. A Member shall
not be entitled to receive a financial hardship distribution of any
amount credited to his QNEC Account, or of any income that is allocable
or credited to his Member's Salary Deferral Contribution Account.
(g) Method of Payment. Distributions pursuant to this Section
6.01 will normally be paid in lump sums. However, the QJSA requirements
of Section 5.05 will apply to any distributions made prior to July 1,
2001 under this Section 6.01 with respect to a Member who is a Former
K&G Plan Participant.
6.02 IN-SERVICE AGE 59 1/2 DISTRIBUTIONS. Prior to his Separation From
Service, a Member may withdraw part or all of his Account balance on or after
the date that he attains age 59 1/2. Distributions pursuant to this Section 6.02
will normally be paid in lump sums in cash. However, the QJSA requirements of
Section 5.05 will apply to any distributions made prior to July 1, 2001 under
this Section 6.02 with respect to a Member who is a Former K&G Plan Participant.
6.03 IN-SERVICE WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Each Member may
withdraw part or all of his Rollover Account balance at any time. Withdrawals
pursuant to this Section 6.03 will normally be paid in lump sums in cash.
However, the QJSA requirements of Section 5.05 will apply to any distributions
made made prior to July 1, 2001 under this Section 6.03 with respect to a Member
who is a Former K&G Plan Participant.
6.04 LOANS. The Committee may direct the Trustees to make loans to
Members (and Beneficiaries who are "parties in interest" within the meaning of
ERISA) who have a vested interest in the Plan. The Loan Committee established by
the Committee will be responsible for administering the Plan loan program. All
loans will comply with the following requirements:
(a) All loans will be made solely from the Member's or
Beneficiary's Account.
(b) Loans will be available on a nondiscriminatory basis to
all Beneficiaries who are "parties in interest" within the meaning of
ERISA, and to all Members.
(c) Loans will not be made for less than $500.00.
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(d) The maximum amount of a loan may not exceed the lesser of
(A) $50,000.00 reduced by the person's highest outstanding loan balance
from the Plan during the preceding one-year period, or (B) one-half of
the present value of the person's Account balances under the Plan
determined as of the date on which the loan is approved by the Loan
Committee.
(e) Any loan from the Plan will be evidenced by a note or
notes (signed by the person applying for the loan) having such
maturity, bearing such rate of interest, and containing such other
terms as the Loan Committee will require by uniform and
nondiscriminatory rules consistent with this Section and proper lending
practices.
(f) All loans will bear a reasonable rate of interest which
will be established by the Loan Committee.
(g) Each loan will be fully secured by a pledge of the
borrowing person's Account balance. No more than 50 percent of the
person's Account balance (determined immediately after the origination
of the loan) will be considered as security for any loan.
(h) Generally, the term of the loan will not be more than five
years. The Loan Committee may agree to a longer term (but not more than
seven years) only if such term is otherwise reasonable and the proceeds
of the loan are to be used to acquire a dwelling which will be used
within a reasonable time (determined at the time the loan is made) as
the principal residence of the borrowing person.
(i) The loan agreement will require level amortization over
the term of the loan. A Member's loan agreement will also require that
loan repayments be made through payroll deductions.
(j) If a person fails to make required payments for two
calendar quarters, the loan will be in default.
(k) If a Member has an outstanding loan from the Plan at the
time of his Separation From Service, the outstanding loan principal
balance and any accrued but unpaid interest will become immediately due
in full. The Member will have the right to immediately pay the Trustee
that amount. If the Member fails to repay the loan, the Trustee will
foreclose on the loan and the Member will be deemed to have received a
Plan distribution of the amount foreclosed upon. The Trustee will not
foreclose upon a Member's Salary Deferral Contribution Account or QNEC
Account until the Member's Separation From Service.
(l) If a Beneficiary defaults on his loan, the Trustee will
foreclose on the loan and the Beneficiary will be deemed to have
received a Plan distribution of the amount foreclosed upon.
(m) No person shall be entitled to apply for a new Plan loan
until at least 60 days have transpired since he fully repaid his last
loan from the Plan.
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(n) No amount that is pledged as collateral for a Plan loan to
a Participant will be available for withdrawal before he has fully
repaid his loan.
(o) All interest payments made pursuant to the terms of the
loan agreement will be credited to the borrowing person's Account and
will not be considered as general earnings of the Trust to be allocated
to other Members.
(p) Prior to July 1, 2001, the Spouse of a Member who is a
Former K&G Plan Participant must consent to any loan from the Member's
Plan Account. The Spouse's consent must (1) be in writing, (2) consent
to the loan, (3) acknowledge the effect of the Spouse's consent to the
Member's borrowing from the Plan, and (4) be witnessed by a notary
public or a Plan representative.
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ARTICLE VII
ACTIVE SERVICE
7.01 WHEN ACTIVE SERVICE BEGINS. For purposes of eligibility, Active
Service begins when an Employee first performs an Hour of Service for an
Affiliated Employer. If an Employee who has begun Active Service Xxxxxx Service
he shall recommence Active Service when he again performs an Hour of Service for
an Affiliated Employer.
7.02 AGGREGATION OF SERVICE. When determining an Employee's Active
Service, all Periods of Service, whether or not completed consecutively, shall
be aggregated on a per day basis. For purposes of eligibility and vesting, only
full years of Active Service shall be counted. In aggregating Active Service, 30
days shall be counted as one month and 12 months shall be counted as one year.
No fractional years shall be counted for purposes of eligibility.
7.03 PERIODS OF SERVICE OF LESS THAN ONE YEAR. If an Employee performs
an Hour of Service within 12 months after he Xxxxxx Service, the intervening
Period of Severance shall be counted as a Period of Service.
7.04 PERIODS OF SEVERANCE DUE TO CHILD BIRTH OR ADOPTION. The period of
time between (a) the first anniversary of the first day of an absence from
Service by reason of the pregnancy of the Employee, the birth of a child of the
Employee, the placement of a child with the Employee in connection with the
adoption of the child by the Employee or for purposes of caring for the child
for a period beginning immediately following the birth or placement and (b) the
second anniversary of the first day of the absence shall not be counted as a
Period of Service or a Period of Severance.
7.05 TRANSFERS. If an Employee is transferred to the employ of an
Affiliated Employer, he will continue to earn Active Service for eligibility
purposes.
7.06 EMPLOYMENT RECORDS CONCLUSIVE. The employment records of the
Employer shall be conclusive for all determinations of Active Service.
7.07 SERVICE CREDIT REQUIRED UNDER FEDERAL LAW. An Employee shall be
credited with such additional years of Active Service as are required under any
applicable law of the United States.
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ARTICLE VIII
INVESTMENT ELECTIONS
8.01 INVESTMENT FUNDS ESTABLISHED. It is contemplated that the assets
of the Plan shall be invested in such categories of assets as may be determined
from time to time by the Committee and announced and made available on an equal
basis to all Members and former Members. In accordance with procedures
established by the Committee, each Member and former Member may designate the
percentage of his Employer Matching Contribution Account, QNEC Account, Rollover
Contribution Account and Salary Deferral Contribution Account to be invested in
each investment fund available under the Plan. Up to one hundred percent of the
Trust assets may be invested in Sponsor Stock.
8.02 ELECTION PROCEDURES ESTABLISHED. The Committee shall, from time to
time, establish rules to be applied in a nondiscriminatory manner as to all
matters relating to the administration of the investment of funds including, but
not limited to, the following:
(a) the percentage of a Member's or former Member's Account as
it exists, from time to time, that may be transferred from one fund to
another and the limitations based on amounts, percentages, time, or
frequency, if any, on such transfers;
(b) the percentage of a Member's future contributions, when
allocated to his Account, that may be invested in any one or more funds
and the limitations based upon amounts, percentages, time, or
frequency, if any, on such investments in various funds;
(c) the procedures for making investment elections and
changing existing investment elections;
(d) the period of notice required for making investment
elections and changing existing investment elections;
(e) the handling of income and change of value in funds when
funds are in the process of being transferred between investment funds
and to investment funds; and
(f) all other matters necessary to permit the orderly
operation of investment funds within the Plan.
When the Committee changes any previous applicable rule, it shall state the
effective time of the change and the procedures for complying with any such
change. Any change shall remain effective until such date as stated in the
change, or if none is stated, then until revoked or changed in a like manner.
VIII-1
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ARTICLE IX
VOTING OF SPONSOR STOCK AND TENDER OFFERS
9.01 VOTING OF SPONSOR STOCK. When the Sponsor files preliminary or
final proxy solicitation materials with the Securities and Exchange Commission,
the Sponsor shall cause a copy of all materials to be simultaneously sent to the
Trustee. Based on these materials, the Trustee shall prepare a voting
instruction form. At the time of mailing of notice of each annual or special
stockholders' meeting of the Sponsor, the Sponsor shall cause a copy of the
notice and all proxy solicitation materials to be sent to each Member with an
interest in Sponsor Stock held in the Trust, together with the foregoing voting
instruction form to be returned to the Trustee or its designee. The form shall
show the number of full and fractional shares of the Sponsor Stock credited to
each Member's or former Member's Account. The Sponsor shall provide the Trustee
with a copy of any materials provided to the Members and shall certify to the
Trustee that the materials have been mailed or otherwise sent to the Members and
former Members.
Each Member and former Member with an interest in Sponsor Stock held in
the Trust shall have the right to direct the Trustee as to the manner in which
the Trustee is to vote the number of shares of the Sponsor Stock reflecting such
Member's or former Member's proportional interest in the Sponsor Stock held in
the Trust. Directions from a Member or former Member to the Trustee concerning
the voting of the Sponsor Stock shall be communicated in writing, or by mailgram
or similar means. These directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any officer or employee thereof, or
any other person except to the extent that the Sponsor must have the safeguarded
information in order to comply with federal laws or state laws not preempted by
XXXXX. Upon its receipt of the directions, the Trustee shall vote the shares of
the Sponsor Stock reflecting the Member's or former Member's proportional
interest in the Sponsor Stock held in the Trust as directed by the Member or
former Member. The Trustee shall vote shares of the Sponsor Stock reflecting
such Member's or former Member's proportional interest in the Sponsor Stock held
in the Trust for which it has received no directions from the Member or former
Member in the same proportion on each issue as it votes those shares for which
it received voting directions from Members and former Members. The Trustee shall
vote shares of the Sponsor Stock not credited to Members' or former Members'
Accounts in the same proportion on each issue as it votes those shares credited
to Members' and former Members' Accounts for which it received voting directions
from Members and former Members.
9.02 TENDER OFFERS. Upon commencement of a tender offer for any
securities held in the Trust that are the Sponsor Stock, the Sponsor shall
notify each Member and former Member of the tender offer and utilize its best
efforts to timely distribute or cause to be distributed to each Member and
former Member the same information that is distributed to other stockholders of
the Sponsor in connection with the tender offer, and, after consulting with the
Trustee, shall provide and pay for a means by which the Member or former Member
may direct the Trustee whether or not to tender the Sponsor Stock credited to
the Member's or former Member's Accounts. The Sponsor shall provide the Trustee
with a copy of any material provided to the Members and former Members and shall
certify to the Trustee that the materials have been mailed or otherwise sent to
Members and former Members.
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Each Member and former Member shall have the right to direct the
Trustee to tender or not to tender some or all of the shares of the Sponsor
Stock reflecting his proportional interest in the Sponsor Stock held in the
Trust. Directions from a Member or former Member to the Trustee concerning the
tender of the Sponsor Stock shall be communicated in writing, or by mailgram or
such similar means as is agreed upon by the Trustee and the Sponsor under the
preceding paragraph. These directions shall be held in confidence by the Trustee
and shall not be divulged to the Sponsor, or any officer or employee thereof, or
any other person except to the extent that the consequences of such directions
are reflected in reports regularly communicated to any such persons in the
ordinary course of the performance of the Trustee's services hereunder. The
Trustee shall tender or not tender shares of Sponsor Stock as directed by the
Member or former Member. To the extent that Members or former Members fail to
affirmatively direct the Trustee or fail to issue valid directions to the
Trustee to tender shares of the Sponsor Stock credited to their Accounts, those
Members or former Members will be deemed to have instructed the Trustee not to
tender those shares. Accordingly, the Trustee shall not tender shares of Sponsor
Stock credited to a Member's or former Member's Accounts for which it has
received no directions or invalid directions from the Member or former Member.
The Trustee shall tender that number of shares of the Sponsor Stock not
credited to Members' or former Members' Accounts which is determined by
multiplying the total number of shares of the Sponsor Stock not credited to
Members' or former Members' Accounts by a fraction of which the numerator is the
number of shares of the Sponsor Stock credited to Members' or former Members'
accounts for which the Trustee has received valid directions from Members or
former Members to tender (which directions have not been withdrawn as of the
date of this determination) and of which the denominator is the total number of
shares of the Sponsor Stock credited to Members' or former Members' Accounts.
A Member or former Member who has directed the Trustee to tender some
or all of the shares of the Sponsor Stock credited to the Member's or former
Member's Accounts may, at any time prior to the tender offer withdrawal date,
direct the Trustee to withdraw some or all of the tendered shares, and the
Trustee shall withdraw the directed number of shares from the tender offer prior
to the tender offer withdrawal deadline. Prior to the withdrawal deadline, if
any shares of the Sponsor Stock not credited to Members' or former Members'
Accounts have been tendered, the Trustee shall redetermine the number of shares
of the Sponsor Stock that would be tendered under this Section if the date of
the foregoing withdrawal were the date of determination, and withdraw from the
tender offer the number of shares of the Sponsor Stock not credited to Members'
or former Members' Accounts necessary to reduce the amount of tendered Sponsor
Stock not credited to Members' or former Members' Accounts to the amount so
redetermined. A Member or former Member shall not be limited as to the number of
directions to tender or withdraw that the Member or former Member may give to
the Trustee.
A direction by a Member or former Member to the Trustee to tender
shares of the Sponsor Stock reflecting the Member's or former Member's
proportional interest in the Sponsor Stock held in the Trust shall not be
considered a written election under the Plan by the Member or former Member to
withdraw, or have distributed, any or all of his withdrawable shares. The
Trustee shall credit to each proportional interest of the Member or former
Member from which the tendered shares were taken the proceeds received by the
Trustee in exchange for the shares of the Sponsor Stock tendered from that
interest.
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9.03 SHARES CREDITED. For all purposes of this Article, the number of
shares of the Sponsor Stock deemed "credited" to a Member's or former Member's
Accounts as of the relevant date (the record date or the date specified in the
tender offer) shall be calculated by reference to the number of shares reflected
on the books of the transfer agent as of the relevant date. In the case of a
tender offer, the number of shares credited shall be determined as of a date as
close as administratively feasible to the relevant date.
9.04 CONVERSION. All provisions in this Article shall also apply to any
securities received as a result of a conversion of the Sponsor Stock.
9.05 NAMED FIDUCIARY. For purposes of ERISA, each Member or former
Member shall be the named fiduciary for purposes of section 403(a)(1) of ERISA
in connection with the exercise of voting and tender offer rights relating to
shares of the Sponsor Stock credited to his Accounts and any shares of the
Sponsor Stock not credited to his Accounts that may be affected by his voting or
tender decision.
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ARTICLE X
ADOPTION OF PLAN BY OTHER EMPLOYERS
10.01 ADOPTION PROCEDURE. Any business organization may, with the
approval of the Board, adopt the Plan by:
(a) a certified resolution or consent of the board of
directors of the adopting Employer or an executed adoption instrument
(approved by the board of directors of the adopting Employer) agreeing
to be bound as an Employer by all the terms, conditions and limitations
of the Plan except those, if any, specifically described in the
adoption instrument; and
(b) providing all information required by the Committee and
the Trustee.
10.02 NO JOINT VENTURE IMPLIED. The document which evidences the
adoption of the Plan by an Employer shall become a part of the Plan. However,
neither the adoption of the Plan and the Trust by an Employer nor any act
performed by it in relation to the Plan and the Trust shall ever create a joint
venture or partnership relation between it and any other Employer.
10.03 ALL TRUST ASSETS AVAILABLE TO PAY ALL BENEFITS. The Accounts of
Members employed by the Employers that adopt the Plan shall be commingled for
investment purposes. All assets in the Trust shall be available to pay benefits
to all Members employed by any Employer.
10.04 QUALIFICATION A CONDITION PRECEDENT TO ADOPTION AND CONTINUED
PARTICIPATION. The adoption of the Plan and the Trust by a business organization
is contingent upon and subject to the express condition precedent that the
initial adoption meets all statutory and regulatory requirements for
qualification of the Plan and the exemption of the Trust that are applicable to
it and that the Plan and Trust continue in operation to maintain their qualified
and exempt status. In the event the adoption fails to initially qualify, the
adoption shall fail retroactively for failure to meet the condition precedent
and the portion of the Trust assets applicable to the adoption shall be
immediately returned to the adopting business organization and the adoption
shall be void ab initio. In the event the adoption as to a given business
organization later becomes disqualified and loses its exemption for any reason,
the adoption shall fail retroactively for failure to meet the condition
precedent and the portion of the Trust assets allocable to the adoption by that
business organization shall be immediately spun off, retroactively as of the
last date for which the Plan qualified, to a separate trust for its sole benefit
and an identical but separate Plan shall be created, retroactively effective as
of the last date the Plan as adopted by that business organization qualified,
for the benefit of the Members covered by that adoption.
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ARTICLE XI
AMENDMENT AND TERMINATION
11.01 RIGHT TO AMEND AND LIMITATIONS THEREON. The Sponsor has the sole
right to amend the Plan. An amendment may be made by a certified resolution or
consent of the Board, or by an instrument in writing executed by the appropriate
officer of the Sponsor. The amendment must describe the nature of the amendment
and its effective date. No amendment shall:
(a) vest in an Employer any interest in the Trust;
(b) cause or permit the Trust assets to be diverted to any
purpose other than the exclusive benefit of the present or future
Members and their Beneficiaries except under the circumstances
described in Section 3.09;
(c) decrease the Account of any Employee, or eliminate an
optional form of payment in violation of section 411(d)(6) of the Code;
(d) increase substantially the duties or liabilities of the
Trustee without its written consent; or
(e) change the vesting schedule to one which would result in
the nonforfeitable percentage of a Member's Account (determined as of
the later of the date of the adoption of the amendment or of the
effective date of the amendment) of any Member being less than the
nonforfeitable percentage computed under the Plan without regard to the
amendment. If the Plan's vesting schedule is amended, if the Plan is
amended in any other way that affects the computation of the Member's
nonforfeitable percentage, or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each Member
with at least three years of Active Service as of the date of the
amendment or change shall have his nonforfeitable percentage computed
under the Plan without regard to the amendment or the change if that
results in a higher nonforfeitable percentage.
Each Employer shall be deemed to have adopted any amendment made by the
Sponsor unless the Employer notifies the Committee of its rejection in writing
within 30 days after it receives a copy of the amendment. A rejection shall
constitute a withdrawal from the Plan by that Employer unless the Sponsor
acquiesces in the rejection.
11.02 MANDATORY AMENDMENTS. The Contributions of each Employer to the
Plan are intended to be:
(a) deductible under the applicable provisions of the Code;
(b) except as otherwise prescribed by applicable law, exempt
from the Federal Social Security Act;
XI-1
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(c) except as otherwise prescribed by applicable law, exempt
from withholding under the Code; and
(d) excludable from any Employee's regular rate of pay, as
that term is defined under the Fair Labor Standards Act of 1938, as
amended.
The Sponsor shall make any amendment necessary to carry out this
intention, and it may be made retroactively.
11.03 WITHDRAWAL OF EMPLOYER. An Employer may withdraw from the Plan
and the Trust if the Sponsor does not acquiesce in its rejection of an amendment
or by giving written notice of its intent to withdraw to the Committee. The
Committee shall then determine the portion of the Trust assets that is
attributable to the Members employed by the withdrawing Employer and shall
notify the Trustee to segregate and transfer those assets to the successor
trustee when it receives a designation of the successor from the withdrawing
Employer.
A withdrawal shall not terminate the Plan and the Trust with respect to
the withdrawing Employer, if the Employer either appoints a successor trustee
and reaffirms the Plan and the Trust as its new and separate plan and trust
intended to qualify under section 401(a) of the Code, or establishes another
plan and trust intended to qualify under section 401(a) of the Code.
The determination of the Committee, in its sole discretion, of the
portion of the Trust assets that is attributable to the Members employed by the
withdrawing Employer shall be final and binding upon all parties; and, the
Trustee's transfer of those assets to the designated successor Trustee shall
relieve the Trustee of any further obligation, liability or duty to the
withdrawing Employer, the Members employed by that Employer and their
Beneficiaries, and the successor trustee.
11.04 TERMINATION OF PLAN. The Sponsor may terminate the Plan and the
Trust with respect to all Employers by executing and delivering to the Committee
and the Trustee, a notice of termination, specifying the date of termination.
11.05 PARTIAL OR COMPLETE TERMINATION OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS. Without regard to any other provision of the Plan, if there is a
partial or total termination of the Plan or there is a complete discontinuance
of the Employer's Contributions, each of the affected Members shall immediately
become 100 percent vested in his Account as of the end of the last Plan Year for
which a substantial Employer Contribution was made and in any amounts later
allocated to his Account. If the Employer then resumes making substantial
Contributions at any time, the appropriate vesting schedule shall again apply to
all amounts allocated to each affected Member's Account beginning with the Plan
Year for which they were resumed.
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ARTICLE XII
MISCELLANEOUS
12.01 PLAN NOT AN EMPLOYMENT CONTRACT. The maintenance of the Plan and
the Trust is not a contract between any Employer and its Employees which gives
any Employee the right to be retained in its employment. Likewise, it is not
intended to interfere with the rights of any Employer to discharge any Employee
at any time or to interfere with the Employee's right to terminate his
employment at any time.
12.02 BENEFITS PROVIDED SOLELY FROM TRUST. All benefits payable under
the Plan shall be paid or provided for solely from the Trust. No Employer
assumes any liability or responsibility to pay any benefit provided by the Plan.
12.03 ASSIGNMENTS PROHIBITED. No principal or income payable or to
become payable from the Trust assets shall be subject to anticipation or
assignment by a Member, former Member, or by a Beneficiary to attachment by,
interference with, or control of any creditor of a Member, former Member, or
Beneficiary; or to being taken or reached by any legal or equitable process in
satisfaction of any debt or liability of a Member, former Member, or Beneficiary
prior to its actual receipt by the Member, former Member, or Beneficiary. Any
attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of
any Trust assets, any part of it, or any interest in it by a Member, former
Member, or Beneficiary prior to distribution shall be void, whether that
conveyance, transfer, assignment, mortgage, pledge, or encumbrance is intended
to take place or become effective before or after any distribution of Trust
assets or the termination of the Trust itself. The Trustee shall never under any
circumstances be required to recognize any conveyance, transfer, assignment,
mortgage, pledge or encumbrance by a Member, former Member, or Beneficiary of
the Trust, any part of it, or any interest in it, or to pay any money or thing
of value to any creditor or assignee of a Member, former Member, or Beneficiary
for any cause whatsoever. These prohibitions against the alienation of a
Member's Account shall not apply to a Qualified Domestic Relations Order or to a
voluntary revocable assignment of benefits not in excess of ten percent of the
amount of any payment from the Plan if such assignment complies with Regulations
issued under 401(a)(13) of the Code. Further, these prohibitions shall not apply
to any offset of a Member's benefit under the Plan against an amount that the
Member or former Member is ordered or required to pay to the Plan if (a) the
order or requirement to pay arises (1) under a judgment of conviction for a
crime involving the Plan, (2) under a civil judgment (including a consent order
or decree) entered by a court in an action in connection with an alleged
violation of part 4 of subtitle B of title I of ERISA, or (3) is pursuant to a
settlement agreement between the Secretary of Labor and the Member or former
Member in connection with an alleged violation of part 4 of subtitle B of title
I of ERISA by a fiduciary or any other person and (b) the judgment, order,
decree or settlement agreement expressly provides for the offset of all or a
part of the amount ordered or required to be paid to the Plan against the
Member's or former Member's benefits provided under the Plan.
12.04 REQUIREMENTS UPON MERGER OR CONSOLIDATION OF PLANS. The Plan
shall not merge or consolidate with or transfer any assets or liabilities to any
other plan unless each Member would receive a benefit immediately after the
merger, consolidation, or transfer which
XII-1
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is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
12.05 MERGER OF K&G PLAN. Effective August 1, 2000, notwithstanding any
provision of the K&G Plan to the contrary, the provisions of the Plan shall
apply to each Employee employed by K&G Men's Center, Inc. and K&G Men's Company
Inc.; provided, however that the distribution options available under the K&G
Plan shall be preserved in the Plan in accordance with section 411(d)(6) of the
Code.
12.06 FORFEITURE BY LOST MEMBERS OR BENEFICIARIES. If a person who is
entitled to a distribution cannot be located during a reasonable search after
the Trustee has initially attempted making payment, that person's Account shall
be forfeited. Such amount shall be used to reduce the Employer's contribution
under the Plan. However, if at any time prior to the termination of the Plan and
the complete distribution of the Trust assets, the former Member or Beneficiary
files a claim with the Committee for the forfeited benefit, that benefit shall
be reinstated (without adjustment for trust income or losses during the
forfeited period) effective as of the date of the receipt of the claim. As soon
as appropriate following the Employer's Contribution of the reinstated amount,
it shall be paid to the former Member or Beneficiary in a single sum.
12.07 GENDER OF WORDS USED. If the context requires it, words of one
gender when used in the Plan shall include the other gender, and words used in
the singular or plural shall include the other.
12.08 SEVERABILITY. Each provision of this Agreement may be severed. If
any provision is determined to be invalid or unenforceable, that determination
shall not affect the validity or enforceability of any other provision.
12.09 REEMPLOYED VETERANS. The requirements of the Uniformed Services
Employment and Reemployment Rights Act of 1994 will be complied with in the
operation of the Plan in the manner permitted under section 414(u) of the Code.
12.10 GOVERNING LAW. The provisions of the Plan shall be construed,
administered, and governed under the laws of the United States unless the
specific matter in question is governed by state law in which event the laws of
the State of Texas shall apply.
XII-2
41
IN WITNESS WHEREOF, The Men's Wearhouse, Inc. has caused this Agreement
to be executed this 20th day of February, 2001, in multiple counterparts, each
of which shall be deemed to be an original, to be effective the 1st day of
January, 1998, except for those provisions which have an earlier effective date
provided by law, or as otherwise provided under applicable provisions of the
Plan.
THE MEN'S WEARHOUSE, INC.
By /s/ XXXXX X. XXXXX
-----------------------------------------
Title Senior Vice President, Chief Financial
--------------------------------------
Officer and Treasurer
---------------------------------------------
42
APPENDIX A
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
PART A.1 DEFINITIONS
DEFINITIONS. As used herein the following words and phrases have the
meaning attributed to them below:
A.1.1 "ACTUAL CONTRIBUTION RATIO" shall mean the ratio of Section
401(m) Contributions actually paid into the Trust on behalf of an Employee for a
Plan Year to the Employee's Annual Compensation for the same Plan Year. For this
purpose, Annual Compensation for any portion of the Plan Year in which the
Employee was not an eligible Employee (as defined in Section A.2.4) will not be
taken into account.
A.1.2 "ACTUAL DEFERRAL PERCENTAGE" means, for a specified group of
Employees for a Plan Year, the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(k) Contributions
actually paid into the Trust on behalf of the Employee for the Plan Year to the
Employee's Annual Compensation for the Plan Year.
A.1.3 "ACTUAL DEFERRAL RATIO" means the ratio of Section 401(k)
Contributions actually paid into the Trust on behalf of an Employee for a Plan
Year to the Employee's Annual Compensation for the same Plan Year. For this
purpose, Annual Compensation for any portion of the Plan Year in which the
Employee was not an eligible Employee (as defined in Section A.2.3) will not be
taken into account.
A.1.4 "ANNUAL ADDITIONS" means the sum of the following amounts
credited on behalf of a Member for the Limitation Year: (a) Employer
contributions, (b) Employee contributions and (c) forfeitures. Excess 401(k)
Contributions for a Plan Year are treated as Annual Additions for that Plan Year
even if they are corrected through distribution. Excess Deferrals that are
timely distributed as set forth in Section A.3.1 will not be treated as Annual
Additions.
A.1.5 "CONTRIBUTION PERCENTAGE" shall mean, for a specified group of
Employees for a Plan Year, the average of the ratios (calculated separately for
each Employee in the group) of the amount of Section 401(m) Contributions
actually paid into the Trust on behalf of the Employee for the Plan Year to the
Employee's Annual Compensation for the Plan Year.
A.1.6 "EXCESS AGGREGATE 401(m) CONTRIBUTIONS" means, with respect to
any Plan Year, the excess of (a) the aggregate amount of Section 401(m)
Contributions actually paid into the Trust on behalf of Highly Compensated
Employees for the Plan Year over (b) the maximum amount of those contributions
permitted under the limitations set out in the first sentence of Section A.2.4.
A.1.7 "EXCESS AMOUNT" shall mean the excess of the Annual Additions
credited to the Member's Account for the Limitation Year over the Maximum
Permissible Amount.
A.1.8 "EXCESS 401(k) CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of (a) the aggregate amount of Section 401(k) Contributions
actually paid to the Trustee on
A-1
43
behalf of Highly Compensated Employees for the Plan Year over (b) the maximum
amount of those contributions permitted under the limitations set out in the
first sentence of Section A.2.3.
A.1.9 "LIMITATION YEAR" shall mean the Plan Year. All qualified plans
maintained by any Affiliated Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the
amendment is made.
A.1.10 "MAXIMUM PERMISSIBLE AMOUNT" shall mean the lesser of (a) the
dollar limitation in effect under section 415(c)(1)(A) of the Code for the
Limitation Year, or (b) 25 percent of the Member's Annual Compensation for the
Limitation Year. The Annual Compensation limitation referred to in clause (b) of
the immediately preceding sentence shall not apply to any contribution for
medical benefits (within the meaning of section 401(h) or section 419(A)(f)(2)
of the Code) that is otherwise treated as an Annual Addition under section
415(l)(1) or section 419(A)(d)(2) of the Code. If a short Limitation Year is
created because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount shall not exceed the
dollar limitation in effect under section 415(c)(1)(A) of the Code multiplied by
a fraction, the numerator of which is the number of months in the short
Limitation Year, and the denominator of which is 12.
A.1.11 "SECTION 401(K) CONTRIBUTIONS" means the sum of Salary Deferral
Contributions made on behalf of the Member during the Plan Year, and QNECs that
the Employer elects to have treated as section 401(k) Contributions pursuant to
section 401(k)(3)(d)(ii) of the Code.
A.1.12 "SECTION 401(M) CONTRIBUTIONS" shall mean the sum of Employer
Matching Contributions made on behalf of the Member during the Plan Year and
other amounts that the Employer elects to have treated as Section 401(m)
Contributions pursuant to section 401(m)(3)(B) of the Code. However, Employer
Matching Contributions and Salary Deferral Contributions that the Employer could
otherwise elect to have treated as Section 401(m) Contributions are not Section
401(m) Contributions to the extent that they are used to enable the Plan to
satisfy the minimum contribution requirements of section 416 of the Code.
PART A.2 LIMITATIONS ON CONTRIBUTIONS
A.2.1 LIMITATIONS BASED UPON DEDUCTIBILITY AND THE MAXIMUM ALLOCATION
PERMITTED TO A MEMBER'S ACCOUNT. Notwithstanding any other provision of the
Plan, no Employer shall make any contribution that would be a nondeductible
contribution within the meaning of section 4972 of the Code or that would cause
the limitation on allocations to each Member's Account under section 415 of the
Code and Section A.4.1 to be exceeded.
A.2.2 DOLLAR LIMITATION UPON SALARY DEFERRAL CONTRIBUTIONS. The maximum
Salary Deferral Contribution that a Member may elect to have made on his behalf
during the Member's taxable year may not, when added to the amounts deferred
under other plans or arrangements described in sections 401(k), 408(k) and
403(b) of the Code, exceed $7,000 (as adjusted by the Secretary of Treasury).
For purposes of applying the requirements of Section A.2.3, Excess Deferrals
shall not be disregarded merely because they are Excess Deferrals or because
they are distributed in accordance with this Section. However, Excess Deferrals
made to the Plan on
A-2
44
behalf of Non-Highly Compensated Employees are not to be taken into account
under Section A.2.3.
A.2.3 LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE. The Actual
Deferral Percentage for eligible Highly Compensated Employees for any Plan Year
must bear a relationship to the Actual Deferral Percentage for all other
eligible Employees for the preceding Plan Year which meets either of the
following tests:
(a) the Actual Deferral Percentage of the eligible Highly
Compensated Employees is not more than the Actual Deferral Percentage
of all other eligible Employees multiplied by 1.25; or
(b) the excess of the Actual Deferral Percentage of the
eligible Highly Compensated Employees over that of all other eligible
Employees is not more than two percentage points, and the Actual
Deferral Percentage of the eligible Highly Compensated Employees is not
more than the Actual Deferral Percentage of all other eligible
Employees multiplied by two.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to make Salary Deferral Contributions for all or
part of the Plan Year. A person who is suspended from making Salary Deferral
Contributions because he has made a withdrawal is an eligible Employee. If no
Salary Deferral Contributions are made for an eligible Employee, the Actual
Deferral Ratio that shall be included for him in determining the Actual Deferral
Percentage is zero. If the Plan and any other plan or plans which include cash
or deferred arrangements are considered as one plan for purposes of section
401(a)(4) or 410(b) of the Code, the cash or deferred arrangements included in
the Plan and the other plans shall be treated as one plan for purposes of this
Section. If any Member who is a Highly Compensated Employee is a participant in
any other cash or deferred arrangements of the Employer, when determining the
deferral percentage of such Member, all such cash or deferred arrangements are
treated as one plan for these dates.
Notwithstanding the foregoing, an individual who is not a Highly
Compensated Employee will not be treated as an eligible Employee for purposes of
this Section A.2.3 if the Sponsor elects to apply section 401(b)(4)(3) of the
Code in defining whether the Plan meets the requirements of section 401(k)(3) of
the Code.
A Salary Deferral Contribution will be taken into account under the
Actual Deferral Percentage test of section 401(k) of the Code and this Section
for a Plan Year only if it relates to Considered Compensation that either would
have been received by the Employee in the Plan Year (but for the deferral
election) or is attributable to services performed by the Employee in the Plan
Year and would have been received by the Employee within 2 1/2 months after the
close of the Plan Year (but for the deferral election). In addition, a Section
401(k) Contribution will be taken into account under the Actual Deferral
Percentage test of section 401(k) of the Code and this Section for a Plan Year
only if it is allocated to an Employee as of a date within that Plan Year. For
this purpose a Section 401(k) Contribution is considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or
performance of services after
A-3
45
such date and the Section 401(k) Contribution is actually paid to the Trust no
later than 12 months after the Plan Year to which the Section 401(k)
Contribution relates.
Failure to correct Excess 401(k) Contributions by the close of the Plan
Year following the Plan Year for which they were made will cause the Plan's cash
or deferred arrangement to be disqualified for the Plan Year for which the
Excess 401(k) Contributions were made and for all subsequent years during which
they remain in the Trust. Also, the Employer will be liable for a ten percent
excise tax on the amount of Excess 401(k) Contributions unless they are
corrected within 2 1/2 months after the close of the Plan Year for which they
were made.
A.2.4 LIMITATION BASED UPON CONTRIBUTION PERCENTAGE. The Contribution
Percentage for eligible Highly Compensated Employees for any Plan Year must not
exceed the greater of the following:
(a) the Contribution Percentage for all other eligible
Employees for the preceding Plan Year multiplied by 1.25; or
(b) the lesser of the Contribution Percentage for all other
eligible Employees for the preceding Plan Year multiplied by two, or
the Contribution Percentage for all other eligible Employees for the
preceding Plan Year plus two percentage points.
For purposes of this test an eligible Employee is an Employee who is
directly or indirectly eligible to receive an allocation of Employer Matching
Contributions for all or part of the Plan Year. Except as provided below, an
Employee who would be eligible to receive an allocation of Employer Matching
Contributions but for his election not to participate is an eligible Employee.
An Employee who would be eligible to receive an allocation of Matching Employer
Contributions but for the limitations on his Annual Additions imposed by section
415 of the Code is an eligible Employee.
Notwithstanding the foregoing, an individual who is not a Highly
Compensated Employee will not be treated as an eligible Employee for purposes of
this Section A.2.4 if the Sponsor elects to apply section 401(b)(4)(B) of the
Code in determining whether the Plan meets the requirements of section 401(m)(2)
of the Code.
If no Section 401(m) Contributions are made on behalf of an eligible
Employee the Actual Contribution Ratio that shall be included for him in
determining the Contribution Percentage is zero. If the Plan and any other plan
or plans to which Section 401(m) Contributions are made are considered as one
plan for purposes of section 401(a)(4) or 410(b) of the Code, the Plan and those
plans are to be treated as one. The Actual Contribution Ratio of a Highly
Compensated Employee who is eligible to participate in more than one plan of an
Affiliated employer to which employee or matching contributions are made is
calculated by treating all the plans in which the Employee is eligible to
participate as one plan. However, plans that are not permitted to be aggregated
under Regulation section 1.410(m)-1(b)(3)(ii) are not aggregated for this
purpose.
An Employer Matching Contribution will be taken into account under this
Section for a Plan Year only if (1) it is allocated to the Employee's Account as
of a date within the Plan Year, (2) it is paid to the Trust no later than the
end of the 12-month period beginning after the close of
A-4
46
the Plan Year, and (3) it is made on behalf of an Employee on account of his
Salary Deferral Contributions for the Plan Year.
At the election of the Employer, a Member's Salary Deferral
Contributions, and XXXXx made on behalf of the Member during the Plan Year shall
be treated as Section 401(m) Contributions that are Employer Matching
Contributions provided that the conditions set forth in Regulation section
1.401(m)-1(b)(5) are satisfied. Salary Deferral Contributions may not be treated
as Employer Matching Contributions for purposes of the contribution percentage
test set forth in this Section unless such contributions, including those taken
into account for purposes of the test set forth in this Section, satisfy the
actual deferral percentage test set forth in Section A.2.3. Moreover, Salary
Deferral Contributions and QNECs may not be taken into account for purposes of
the test set forth in this Section to the extent that such contributions are
taken into account in determining whether any other contributions satisfy the
actual deferral percentage test set forth in Section A.2.3. Finally, Salary
Deferral Contributions and QNECs may be taken into account for purposes of the
test set forth in this Section only if they are allocated to the Employee's
Account as of a date within the Plan Year being tested within the meaning of
Regulation section 1.401(k)-1(b)(4).
Failure to correct Excess Aggregate 401(m) Contributions by the close
of the Plan Year following the Plan Year for which they were made will cause the
Plan to fail to be qualified for the Plan Year for which the Excess Aggregate
401(m) Contributions were made and for all subsequent years during which they
remain in the Trust. Also, the Employer will be liable for a ten percent excise
tax on the amount of Excess Aggregate 401(m) Contributions unless they are
corrected within 2 1/2 months after the close of the Plan Year for which they
were made.
A.2.5 ALTERNATIVE LIMITATION BASED UPON ACTUAL DEFERRAL PERCENTAGE AND
CONTRIBUTION PERCENTAGE. If the second alternative permitted in Sections A.2.3
and A.2.4 is used for both the actual deferral percentage test and the
contribution percentage test the following additional limitation on Salary
Deferral Contributions shall apply. The Actual Deferral Percentage plus the
Contribution Percentage of the eligible Highly Compensated Employees cannot
exceed the greater of (a) or (b), where
(a) is the sum of:
(i) 1.25 times the greater of the Actual Deferral Percentage
or the Contribution Percentage of the eligible Non-Highly Compensated
Employees for the preceding Plan Year, and
(ii) the lesser of (x) two percentage points plus the lesser
of the Actual Deferral Percentage or the Contribution Percentage of the
eligible Non-Highly Compensated Employees for the preceding Plan Year
or (y) two times the lesser of the Actual Deferral Percentage or the
Contribution Percentage of the group of eligible Non-Highly Compensated
Employees for the preceding Plan Year; and
A-5
47
(b) is the sum of:
(i) 1.25 times the lesser of the Actual Deferral Percentage or
the Contribution Percentage of the eligible Non-Highly Compensated
Employees for the preceding Plan Year, and
(ii) the lesser of (x) two percentage points plus the greater
of the Actual Deferral Percentage or the Contribution Percentage of the
eligible Non-Highly Compensated Employees for the preceding Plan Year
or (y) two times the greater of the Actual Deferral Percentage or the
Contribution Percentage of the group of eligible Non-Highly Compensated
Employees for the preceding Plan Year.
PART A.3 CORRECTION PROCEDURES FOR ERRONEOUS CONTRIBUTIONS
A.3.1 EXCESS DEFERRAL FAIL SAFE PROVISION. As soon as practical after
the close of each Plan Year, the Committee shall determine if there would be any
Excess Deferrals. If there would be an Excess Deferral by a Member, the Excess
Deferral as adjusted by any earnings or losses, will be distributed to the
Member no later than April 15 following the Member's taxable year in which the
Excess Deferral was made. The income allocable to the Excess Deferrals for the
taxable year of the Member shall be determined by multiplying the income for the
taxable year of the Member allocable to Salary Deferral Contributions by a
fraction. The numerator of the fraction is the amount of the Excess Deferrals
made on behalf of the Member for the taxable year. The denominator of the
fraction is the Member's total Salary Deferral Account balance as of the
beginning of the taxable year plus the Member's Salary Deferral Contributions
for the taxable year.
A.3.2 ACTUAL DEFERRAL PERCENTAGE FAIL SAFE PROVISION. As soon as
practicable after the close of each Plan Year, the Committee shall determine
whether the Actual Deferral Percentage for the Highly Compensated Employees
would exceed the limitation set forth in Section A.2.3. If the limitation would
be exceeded for a Plan Year, before the close of the following Plan Year (a) the
amount of Excess 401(k) Contributions for that Plan Year (and any income
allocable to those contributions as calculated in the specific manner required
by Section A.3.5) shall be distributed or (b) the Employer may make a Qualified
Nonelective Employer Contribution which it elects to have treated as a Section
401(k) Contribution.
The amount of Excess 401(k) Contributions to be distributed shall be
determined in the following manner:
First, the Plan will determine how much the Actual Deferral Ratio of
the Highly Compensated Employee with the highest Actual Deferral Ratio would
have to be reduced to satisfy the Actual Deferral Percentage Test or cause such
Actual Deferred Ratio to equal the Actual Deferral Ratio of the Highly
Compensated Employee with the next highest Actual Deferred Ratio. If a lesser
reduction would enable the Plan to satisfy the Actual Deferral Percentage Test,
only the lesser reduction may be made. Second, this process is repeated until
the Actual Deferral Percentage Test is satisfied. The amount of Excess 401(k)
Contributions is
A-6
48
equal to the sum of these hypothetical reductions multiplied, in each case, by
the Highly Compensated Employee's Annual Compensation.
Then, the total amount of Excess 401(k) Contributions shall be
distributed on the basis of the respective amounts attributable to each Highly
Compensated Employee. The Highly Compensated Employees subject to the actual
distribution are determined using the "dollar leveling method." The Salary
Deferral Contributions of the Highly Compensated Employee with the greatest
dollar amount of Salary Deferral Contributions and other contributions treated
as Section 401(k) Contributions for the Plan Year are reduced by the amount
required to cause that Highly Compensated Employee's Salary Deferral
Contributions to equal the dollar amount of the Salary Deferral Contributions
and other contributions treated as Section 401(k) Contributions for the Plan
Year of the Highly Compensated Employee with the next highest dollar amount.
This amount is then distributed to the Highly Compensated Employee with the
highest dollar amount. However, if a lesser deduction, when added to the total
dollar amount already distributed under this Section A.3.2 would equal the total
Excess 401(k) Contributions, the lesser reduction shall be distributed. This
process shall be continued until the amount of the Excess 401(k) Contributions
have been distributed. Recharacterized Excess 401(k) Contributions will first be
determined using the ratio leveling method, then the dollar method.
Qualified Nonelective Employer Contributions will be treated as Section
401(k) Contributions only if: (a) the conditions described in Regulation section
1.401(k)-1(b)(5) are satisfied and (b) they are allocated to Members' Accounts
as of a date within that Plan Year and are actually paid to the Trust no later
than the end of the 12-month period immediately following the Plan Year to which
the contributions relate. If the Employer makes a Qualified Nonelective Employer
Contribution that it elects to have treated as a Section 401(k) Contribution,
the Contribution will be in an amount necessary to satisfy the Actual Deferral
Percentage test and will be allocated first to those Non-Highly Compensated
Employees who had the lowest Actual Deferral Ratio. The Excess 401(k)
Contributions of Highly Compensated Employees will not be recharacterized to the
extent that the recharacterized amounts would exceed the Contribution Percentage
as determined prior to applying the Contribution Percentage limitations.
Any distributions of the Excess 401(k) Contributions for any Plan Year
are to be made to Highly Compensated Employees on the basis of the amount of
contributions by, or on behalf of, each Highly Compensated Employee. The amount
of Excess 401(k) Contributions to be distributed for any Plan Year must be
reduced by any excess Salary Deferral Contributions previously distributed for
the taxable year ending in the same Plan Year.
A.3.3 CONTRIBUTION PERCENTAGE FAIL SAFE PROVISION. If the limitation
set forth in Section A.2.4 would be exceeded for any Plan Year any one or more
of the following corrective action shall be taken before the close of the
following Plan Year as determined by the Committee in its sole discretion: (a)
the amount of the Excess Aggregate 401(m) Contributions for that Plan Year (and
any income allocable to those Contributions as calculated in the manner set
forth in Section A.3.5) shall be either distributed, or forfeited to the extent
they are not vested or (b) the Employer may make a QNEC which it elects to have
treated as a Section 401(m) Contribution. Forfeitures of Excess Aggregate 401(m)
Contributions shall be allocated to Members who are Non-Highly Compensated
Employees as if such Contributions were additional Employer Matching
Contributions for the Plan Year.
A-7
49
The amount of Excess Aggregate 401(m) Contributions to be distributed
shall be determined in the following manner:
First, the Plan will determine how much the Actual Contribution Ratio
of the Highly Compensated Employee with the highest Actual Contribution Ratio
would have to be reduced to satisfy the Actual Contribution Percentage Test or
cause such Actual Contribution Ratio to equal the Actual Contribution Ratio of
the Highly Compensated Employee with the next highest Actual Contribution Ratio.
If a lesser reduction would enable the Plan to satisfy the Actual Contribution
Percentage Test, only this lesser reduction may be made. Second, this process is
repeated until the Actual Contribution Percentage Test is satisfied. The amount
of Excess Aggregate 401(m) Contributions is equal to the sum of these
hypothetical reductions multiplied, in each case, by the Highly Compensated
Employee's Annual Compensation.
Then, the total amount of Excess Aggregate 401(m) Contributions shall
be distributed on the basis of the respective amounts attributable to each
Highly Compensated Employee. The Highly Compensated Employees subject to the
actual distribution are determined using the "dollar leveling method." The
After-Tax Contributions and Matching Contributions of the Highly Compensated
Employee with the greatest dollar amount of After-Tax Contributions and Matching
Contributions and other contributions treated as Section 401(m) Contributions
for the Plan Year are reduced by the amount required to cause that Highly
Compensated Employee's After-Tax and Matching Contributions and other
contributions treated as Section 401(m) Contributions for the Plan Year to equal
the dollar amount of After-Tax and Matching Contributions and other
contributions treated as Section 401(m) Contributions for the Plan Year of the
Highly Compensated Employee with the next highest dollar amount. This amount is
then distributed to the Highly Compensated Employee with the highest dollar
amount. However, if a lesser reduction, when added to the total dollar amount
already distributed under this Section A.3.3., would equal the total Excess
Aggregate 401(n) Contributions, the lesser reduction amount shall be
distributed. This process shall be continued until the amount of the Excess
Aggregate 401(m) Contributions have been distributed.
The corrective actions take under this Section A.3.3 must satisfy the
requirements of section 401(a)(4) of the Code. After correction, each level of
Employer Matching Contributions must be currently and effectively available to a
group of employees that satisfies the minimum coverage requirements of section
410(b) of the Code. A method under which employee contributions are distributed
to highly compensated employees to the extent necessary to meet the requirements
of section 401(m)(2) while matching contributions attributable to such employee
contributions remain allocated to the employee's account will not meet the
requirement of section 401(a)(4).
A.3.4 ALTERNATIVE LIMITATION FAIL SAFE. As soon as practicable after
the close of each Plan Year, the Committee shall determine whether the
alternative limitation would be exceeded. If the limitation would be exceeded
for any Plan Year, before the close of the following Plan Year the Actual
Deferral Percentage or Contribution Percentage of the eligible Highly
Compensated Employees, or a combination of both, shall be reduced by
distributions made in the manner described in the Regulations. These
distributions shall be in addition to and not in lieu of distributions required
for Excess 401(k) Contributions and Excess Aggregate 401(m) Contributions.
A-8
50
A.3.5 INCOME ALLOCABLE TO EXCESS 401(k) CONTRIBUTIONS AND EXCESS
AGGREGATE 401(m) CONTRIBUTIONS. The income allocable to Excess 401(k)
Contributions for the Plan Year shall be determined by multiplying the income
for the Plan Year allocable to Section 401(k) Contributions by a fraction. The
numerator of the fraction shall be the amount of Excess 401(k) Contributions
made on behalf of the Member for the Plan Year. The denominator of the fraction
shall be the Member's total Account balance attributable to Section 401(k)
Contributions as of the beginning of the Plan Year plus the Member's Section
401(k) Contributions for the Plan Year. The income allocable to Excess Aggregate
401(m) Contributions for a Plan Year shall be determined by multiplying the
income for the Plan Year allocable to Section 401(m) Contributions by a
fraction. The numerator of the fraction shall be the amount of Excess Aggregate
401(m) Contributions made on behalf of the Member for the Plan Year. The
denominator of the fraction shall be the Member's total Account balance
attributable to Section 401(m) Contributions as of the beginning of the Plan
Year plus the Member's Section 401(m) Contributions for the Plan Year.
PART A.4 LIMITATION ON ALLOCATIONS
A.4.1 BASIC LIMITATION ON ALLOCATIONS. The Annual Additions which may
be credited to a Member's Accounts under the Plan for any Limitation Year will
not exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Member's Account for the same Limitation Year under any other
qualified defined contribution plans maintained by any Affiliated Employer. If
the Annual Additions with respect to the Member under such other qualified
defined contribution plans are less than the Maximum Permissible Amount and the
Employer Contribution that would otherwise be contributed or allocated to the
Member's Accounts under the Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
under the Plan will be reduced so that the Annual Additions under all qualified
defined contribution plans maintained by any Affiliated Employer for the
Limitation Year will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Member under such other qualified defined
contribution plans in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the Member's
Account under the Plan for the Limitation Year.
A.4.2 ESTIMATION OF MAXIMUM PERMISSIBLE AMOUNT. Prior to determining
the Member's actual Annual Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount on the basis of a reasonable
estimation of the Member's Annual Compensation for such Limitation Year,
uniformly determined for all Members similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year shall be determined on the basis of
the Member's actual Annual Compensation for such Limitation Year.
A.4.3 ATTRIBUTION OF EXCESS AMOUNTS. If a Member's Annual Additions
under the Plan and all other qualified defined contribution plans maintained by
an Affiliated Employer result in an Excess Amount, the total Excess Amount shall
be attributed to the Plan.
A.4.4 TREATMENT OF EXCESS AMOUNTS. If an Excess Amount attributed to
the Plan is held or contributed as a result of or because of (i) the allocation
of forfeitures, (ii) reasonable error in estimating a Member's Considered
Compensation, (iii) reasonable error in calculating
A-9
51
the maximum Salary Deferral Contribution that may be made with respect to a
Member under section 415 of the Code or (iv) any other facts and circumstances
which the Commissioner of Internal Revenue finds to be justified, the Excess
Amount shall be reduced as follows:
(a) First, the Excess Amount shall be reduced to the extent
necessary by distributing to the Member all Salary Deferral
Contributions together with their earnings. These distributed amounts
are disregarded for purposes of the testing and limitations contained
in this Appendix A.
(b) Second, if the Member is still employed by the Employer at
the end of the Limitation Year, then such Excess Amounts shall not be
distributed to the Member, but shall be reallocated to a suspense
account and shall be reapplied to reduce future Employer Contributions
(including any allocation of forfeitures) under the Plan for such
Member in the next Limitation Year, and for each succeeding Limitation
Year, if necessary.
(c) If, after application of paragraph (b) of this Section, an
Excess Amount still exists, and the Member is not still employed by the
Employer at the end of the Limitation Year, then such Excess Amounts in
the Member's Accounts shall not be distributed to the Member, but shall
be reallocated to a suspense account and shall be reapplied to reduce
future Employer Contributions (including allocation of any
forfeitures), for all remaining Members in the next Limitation Year and
each succeeding Limitation Year if necessary.
(d) If a suspense account is in existence at any time during
the Limitation Year pursuant to this Section, it will not participate
in the allocation of the Trust's investment gains and losses. If a
suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated
and reallocated to Members' Accounts before any Employer Contribution
may be made to the Plan for that Limitation Year. Excess Amounts may
not be distributed to Members or former Members. If the Plan is
terminated while a suspense account described in this Section is in
existence, the amount in such suspense account shall revert to the
Employer(s) to which it is attributable.
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APPENDIX B
TOP-HEAVY REQUIREMENTS
PART B.1 DEFINITIONS
DEFINITIONS. As used herein, the following words and phrases have the
meaning attributed to them below:
B.1.1 "AGGREGATE ACCOUNTS" means the total of all Account balances
derived from Employer Contributions and Rollover Contributions.
B.1.2 "AGGREGATION GROUP" means (a) each plan of the Employer or any
Affiliated Employer in which a Key Employee is a Member and (b) each other plan
of the Employer or any Affiliated Employer which enables any plan in (a) to meet
the requirements of either section 401(a)(4) or 410 of the Code. Any Employer
may treat a plan not required to be included in the Aggregation Group as being a
part of the group if the group would continue to meet the requirements of
section 401(a)(4) and 410 of the Code with that plan being taken into account.
B.1.3 "DETERMINATION DATE" means for a given Plan Year the last day of
the preceding Plan Year or in the case of the first Plan Year the last day of
that Plan Year.
B.1.4 "KEY EMPLOYEE" means an Employee or former or deceased Employee
or Beneficiary of an Employee who at any time during the Plan Year or any of the
four preceding Plan Years is (a) an officer of an Employer or any Affiliated
Employer having Annual Compensation greater than 50 percent of the annual
addition limitation of section 415(b)(1)(A) of the Code for the Plan Year, (b)
one of the ten employees having Annual Compensation from an Employer or any
Affiliated Employer of greater than 100 percent of the annual addition
limitation of section 415(c)(1)(A) of the Code for the Plan Year and owning or
considered as owning (within the meaning of section 318 of the Code) the largest
interest in an Employer or any Affiliated Employer, treated separately, (c) a
Five Percent Owner of an Employer or any Affiliated Employer, treated
separately, or (d) a one percent owner of an Employer or any Affiliated
Employer, treated separately, having Annual Compensation from an Employer or any
Affiliated Employer of more than $150,000.00. For this purpose no more than 50
employees or, if lesser, the greater of three employees or ten percent of the
employees shall be treated as officers. Section 416(i) of the Code shall be used
to determine percentage of ownership. For the purpose of the test set out in (b)
above, if two or more employees have the same interest in an Employer, the
employee with the greater Annual Compensation from the Employer shall be treated
as having the larger interest.
B.1.5 "NON-KEY EMPLOYEE" means any Employee who is not a Key Employee.
B.1.6 "TOP-HEAVY PLAN" means any plan which has been determined to be
top-heavy under the test described in Appendix B of the Plan.
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PART B.2 APPLICATION
B.2.1 APPLICATION. The requirements described in this Appendix B shall
apply to each Plan Year that the Plan is determined to be a Top-Heavy Plan.
B.2.2 TOP-HEAVY TEST. If on the Determination Date the Aggregate
Accounts of Key Employees in the Plan exceed 60 percent of the Aggregate
Accounts of all Employees in the Plan, the Plan shall be a Top-Heavy Plan for
that Plan Year. In addition, if the Plan is required to be included in an
Aggregation Group and that group is a top-heavy group, the Plan shall be treated
as a Top-Heavy Plan. An Aggregation Group is a top-heavy group if on the
Determination Date the sum of (a) the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans in the Aggregation
Group which contains the Plan, plus (b) the total of all of the accounts of Key
Employees under all defined contribution plans included in the Aggregation Group
(which contains the Plan) is more than 60 percent of a similar sum determined
for all employees covered in the Aggregation Group which contains the Plan.
In applying the above tests, the following rules shall apply:
(a) in determining the present value of the accumulated
accrued benefits for any Employee or the amount in the account of any
Employee, the value or amount shall be increased by all distributions
made to or for the benefit of the Employee under the Plan during the
five-year period ending on the Determination Date;
(b) all rollover contributions made after December 31, 1983 by
the Employee to the Plan shall not be considered by the Plan for either
test;
(c) if an Employee is a Non-Key Employee under the plan for
the Plan Year but was a Key Employee under the plan for another prior
Plan Year, his Account shall not be considered; and
(d) benefits shall not be taken into account in determining
the top-heavy ratio for any Employee who has not performed services for
the Employer during the last five-year period ending upon the
Determination Date.
B.2.3 VESTING RESTRICTIONS IF PLAN BECOMES TOP-HEAVY. If a Member has
at least one Hour of Service during a Plan Year when the Plan is a Top-Heavy
Plan, he shall either vest under each of the normal vesting provisions of the
Plan or under the following vesting schedule, whichever is more favorable:
Percentage of Amount Vested
In Accounts Containing
Completed Years of Active Service Employer Contributions
---------------------------
Less than two years..................................................... 0
Two years but less than three years..................................... 20
Three years but less than four years.................................... 40
Four years but less than five years..................................... 60
Five years but less than six years...................................... 80
Six years or more....................................................... 100
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54
If the Plan ceases to be a Top-Heavy Plan, this requirement shall no longer
apply. After that date, the normal vesting provisions of the Plan shall be
applicable to all subsequent Contributions by the Employer.
B.2.4 MINIMUM CONTRIBUTIONS IF PLAN BECOMES TOP-HEAVY. If the Plan is a
Top-Heavy Plan and the normal allocation of the Employer Contribution and
forfeitures is less than three percent of any Non-Key Employee Member's Annual
Compensation, the Committee, without regard to the normal allocation procedures,
shall allocate the Employer Contribution and the forfeitures among the Members
who are in the employ of the Employer at the end of the Plan Year in proportion
to each Member's Annual Compensation as compared to the total Annual
Compensation of all Members for that Plan Year until each Non-Key Employee
Member has had an amount equal to the lesser of (i) the highest rate of
Contribution applicable to any Key Employee, or (ii) three percent of his Annual
Compensation allocated to his Account. At that time, any more Employer
Contributions or forfeitures shall be allocated under the normal allocation
procedures described earlier in the Plan. Salary Deferral Contributions made on
behalf of Key Employees are included in determining the highest rate of Employer
Contributions. Salary Deferral Contributions made on behalf of Non-Key Employees
are not included for that purpose. Amounts that may be treated as Section 401(k)
Contributions made on behalf of Non-Key Employees may not be included in
determining the minimum contribution required under this Section to the extent
that they are treated as Section 401(k) Contributions for purposes of the Actual
Deferral Percentage test.
In applying this restriction, the following rules shall apply:
(a) Each Employee who is eligible for membership (without
regard to whether he has made mandatory contributions, if any are
required, or whether his compensation is less than a stated amount)
shall be entitled to receive an allocation under this Section; and
(b) All defined contribution plans required to be included in
the Aggregation Group shall be treated as one plan for purposes of
meeting the three percent maximum; this required aggregation shall not
apply if the Plan is also required to be included in an Aggregation
Group which includes a defined benefit plan and the Plan enables that
defined benefit plan to meet the requirements of sections 401(a)(4) or
410 of the Code.
B.2.5 DISREGARD OF GOVERNMENT PROGRAMS. If the Plan is a Top-Heavy
Plan, it must meet the vesting and benefit requirements described in this
Article without taking into account contributions or benefits under Chapter 2 of
the Code (relating to the tax on self-employment income), Chapter 21 of the Code
(relating to the Federal Insurance Contributions Act), Title II of the Social
Security Act, or any other Federal or State law.
B-3
55
B.2.6 RESTRICTION IF PLAN BECOMES SUPER TOP-HEAVY. For Plan Years
beginning before January 1, 2000, the Plan is a super Top-Heavy Plan if as of
the Determination Date the Plan would continue to meet the test specified in
Section B.2.2 of this Appendix B for being a Top-Heavy Plan, if 90 percent were
substituted for 60 percent. In any Plan Year that the Plan is a super Top-Heavy
Plan, the limitations in section 415 of the Code and Appendix A of the Plan
shall be applied by substituting the number "1.00" for the number "1.25"
wherever it appears therein. Such substitution shall not cause a reduction in
any accrued benefit attributable to contributions for a Plan Year prior to the
Plan Year in which the Plan is a super Top-Heavy Plan.
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56
APPENDIX C
ADMINISTRATION OF THE PLAN
C.1 APPOINTMENT, TERM, RESIGNATION, AND REMOVAL. The Board shall
appoint an Committee of not less than two persons, the members of which shall
serve until their resignation, death, or removal. The Sponsor shall notify the
Trustee in writing of its composition from time to time. Any member of the
Committee may resign at any time by giving written notice of such resignation to
the Sponsor. Any member of the Committee may be removed by the Board, with or
without cause. Vacancies in the Committee arising by resignation, death,
removal, or otherwise shall be filled by such persons as may be appointed by the
Board.
C.2 POWERS. The Committee shall have exclusive responsibility for the
administration of the Plan, according to the terms and provisions of this
document, and shall have all powers necessary to accomplish such purposes,
including, but not by way of limitation, the right, power, and authority:
(a) to make rules and regulations for the administration of
the Plan which are not inconsistent with the terms and provisions
thereof, provided such rules and regulations are evidenced in writing;
(b) to construe all terms, provisions, conditions, and
limitations of the Plan; and its construction thereof made in good
faith and without discrimination in favor of or against any Member or
former Member shall be final and conclusive on all parties at interest;
(c) to correct any defect, supply any omission, or reconcile
any inconsistency which may appear in the Plan in such manner and to
such extent as it shall deem expedient to carry the Plan into effect
for the greatest benefit of all parties at interest, and its judgment
in such matters shall be final and conclusive as to all parties at
interest;
(d) to select, employ, and compensate from time to time such
consultants, actuaries, accountants, attorneys, and other agents and
employees as the Committee may deem necessary or advisable for the
proper and efficient administration of the Plan, and any agent, firm,
or employee so selected by the Committee may be a disqualified person,
but only if the requirements of section 4975(d) of the Code have been
met;
(e) to resolve all questions relating to the eligibility of
Employees to become Members, and to determine the period of Active
Service and the amount of Considered Compensation upon which the
benefits of each Member shall be calculated;
(f) to resolve all controversies relating to the
administration of the Plan, including but not limited to (1)
differences of opinion arising between the Employer and a Member or
former Member, and (2) any questions it deems advisable to determine in
order to promote the uniform and nondiscriminatory administration of
the Plan for the benefit of all parties at interest;
C-1
57
(g) to direct and instruct or to appoint an investment manager
or managers which would have the power to direct and instruct the
Trustee in all matters relating to the preservation, investment,
reinvestment, management, and disposition of the Trust; provided,
however, that the Committee shall have no authority that would prevent
the Trustee from being an "agent independent of the issuer," as that
term is defined in Rule 10b-18 promulgated under the Securities
Exchange Act of 1934, at any time that the Trustee's failure to
maintain such status would result in the Sponsor or any other person
engaging in a "manipulative or deceptive device or contrivance" under
the provisions of Rule 10b-6 of such Act;
(h) to direct and instruct the Trustee in all matters relating
to the payment of Plan benefits and to determine a Member's or former
Member's entitlement to a benefit should he appeal a denial of his
claim for a benefit or any portion thereof; and
(i) to delegate such of its clerical and recordation duties
under the Plan as it may deem necessary or advisable for the proper and
efficient administration of the Plan.
C.3 ORGANIZATION. The Committee shall select from among its members a
chairman, who shall preside at all of its meetings, and shall select a
secretary, without regard as to whether that person is a member of that
Committee, who shall keep all records, documents, and data pertaining to its
supervision of the administration of the Plan.
C.4 QUORUM AND MAJORITY ACTION. A majority of the members of the
Committee shall constitute a quorum for the transaction of business, and the
vote of a majority of the members present at any meeting will decide any
question brought before that meeting. In addition, the Committee may decide any
question by a vote, taken without a meeting, of a majority of its members.
C.5 SIGNATURES. The chairman, the secretary, and any one or more of the
members of the Committee to which the Committee has delegated the power, shall
each, severally, have the power to execute any document on behalf of the
Committee, and to execute any certificate or other written evidence of the
action of the Committee. The Trustee, after being notified of any such
delegation of power in writing, shall thereafter accept and may rely upon any
document executed by such member or members as representing the action of the
Committee until the Committee files with the Trustee a written revocation of
that delegation of power.
C.6 DISQUALIFICATION OF COMMITTEE MEMBERS. A member of the Committee
who is also a Member of the Plan shall not vote or act upon any matter relating
solely to himself, unless he is the sole member of the Committee.
C.7 DISCLOSURE TO MEMBERS. The Committee shall make available to each
Member, former Member, and Beneficiary for his examination such records,
documents, and other data as are required under ERISA, but only at reasonable
times during business hours. No Member, former Member, or Beneficiary shall have
the right to examine any data or records reflecting the compensation paid to any
other Member, former Member, or Beneficiary, and the Committee shall not be
required to make any data or records available other than those required by
XXXXX.
C-2
58
C.8 STANDARD OF PERFORMANCE. The Committee and each of its members
shall use 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 conducting his business as the administrator of the Plan;
shall, when exercising its power to direct investments, diversify the
investments of the Plan so as to minimize the risk of large losses, unless under
the circumstances it is clearly prudent not to do so; and shall otherwise act in
accordance with the provisions of the Plan and ERISA.
C.9 LIABILITY OF COMMITTEE AND LIABILITY INSURANCE. No member of the
Committee shall be liable for any act or omission of any other member of the
Committee, the Trustee, any investment manager, or any Member who directs the
investment of his Account or other agent appointed by the Committee except to
the extent required by the terms of ERISA, and any other applicable state or
federal law, which liability cannot be waived. No member of the Committee shall
be liable for any act or omission on his own part except to the extent required
by the terms of ERISA, and any other applicable state or federal law, which
liability cannot be waived. In this connection, each provision hereof is
severable and if any provision is found to be void as against public policy, it
shall not affect the validity of any other provision hereof.
Further, it is specifically provided that the Trustee may, at the
direction of the Committee, purchase out of the Trust assets hereof insurance
for the members of the Committee and any other fiduciaries appointed by the
Committee, and for the Trust itself to cover liability or losses occurring by
reason of the act or omission of any one or more of the members of the Committee
or any other fiduciary appointed by them under the Plan, provided such insurance
permits recourse by the insurer against the members of the Committee or the
other fiduciaries concerned in the case of a breach of a fiduciary obligation by
one or more members of the Committee or other fiduciary covered thereby.
C.10 BONDING. No member of the Committee shall be required to give bond
for the performance of his duties hereunder unless required by a law which
cannot be waived.
C.11 COMPENSATION. The Committee shall serve without compensation for
their services, but shall be reimbursed by the Employers for all expenses
properly and actually incurred in the performance of their duties under the Plan
unless the Employers elect to have such expenses paid out of the Trust assets.
C.12 PERSONS SERVING IN DUAL FIDUCIARY ROLES. Any person, group of
persons, corporations, firm, or other entity may serve in more than one
fiduciary capacity with respect to the Plan, including the ability to serve both
as a successor trustee and as a member of the Committee.
C.13 ADMINISTRATOR. For all purposes of ERISA, the administrator of the
Plan within the meaning of ERISA shall be the Sponsor. The Sponsor shall have
final responsibility for compliance with all reporting and disclosure
requirements imposed with respect to the Plan under any federal or state law, or
any regulations promulgated thereunder.
C.14 NAMED FIDUCIARY. The members of the Committee shall be the "named
fiduciary" for purposes of section 402(a)(1) of ERISA, and as such shall have
the authority to
C-3
59
control and manage the operation and administration of the Plan, except to the
extent such authority and control is allocated or delegated to other parties
pursuant to the terms of the Plan.
C.15 STANDARD OF JUDICIAL REVIEW OF COMMITTEE ACTIONS. The Committee
has full and absolute discretion in the exercise of each and every aspect of its
authority under the Plan, including without limitation, the authority to
determine any person's right to benefits under the Plan, the correct amount and
form of any such benefits; the authority to decide any appeal; the authority to
review and correct the actions of any prior administrative committee; and all of
the rights, powers, and authorities specified in this Appendix and elsewhere in
the Plan. Notwithstanding any provision of law or any explicit or implicit
provision of this document or, any action taken, or ruling or decision made, by
the Committee in the exercise of any of its powers and authorities under the
Plan will be final and conclusive as to all parties other than the Sponsor or
Trustee, including without limitation all Members, former Members, and
Beneficiaries, regardless of whether the Committee or one or more members
thereof may have an actual or potential conflict of interest with respect to the
subject matter of such action, ruling, or decision. No such final action,
ruling, or decision of the Committee will be subject to de novo review in any
judicial proceeding; and no such final action, ruling, or decision of the
Committee may be set aside unless it is held to have been arbitrary and
capricious by a final judgment of a court having jurisdiction with respect to
the issue.
C.16 INDEMNIFICATION OF COMMITTEE BY THE SPONSOR. The Sponsor shall
indemnify and hold harmless the Committee, the Committee members, and any
persons to whom the Committee has allocated or delegated its responsibilities in
accordance with the provisions hereof, as well as any other fiduciary who is
also an officer, director, or Employee of an Employer, and hold each of them
harmless from and against all claims, loss, damages, expense, and liability
arising from their responsibilities in connection with the administration of the
Plan which is not otherwise paid or reimbursed by insurance, unless the same
shall result from their own willful misconduct.
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60
APPENDIX D
FUNDING
D.1 BENEFITS PROVIDED SOLELY BY TRUST. All benefits payable under the
Plan shall be paid or provided for solely from the Trust, and the Employer
assumes no liability or responsibility therefor.
D.2 FUNDING OF PLAN. The Plan shall be funded by one or more separate
Trusts. If more than one Trust is used, each Trust shall be designated by the
name of the Plan followed by a number assigned by the Committee at the time the
Trust is established.
D.3 INCORPORATION OF TRUST. Each Trust is a part of the Plan. All
rights or benefits which accrue to a person under the Plan shall be subject also
to the terms of the agreements creating the Trust or Trusts and any amendments
to them which are not in direct conflict with the Plan.
D.4 AUTHORITY OF TRUSTEE. Each Trustee shall have full title and legal
ownership of the assets in the separate Trust which, from time to time, is in
his separate possession. No other Trustee shall have joint title to or joint
legal ownership of any asset in one of the other Trusts held by another Trustee.
Each Trustee shall be governed separately by the trust agreement entered into
between the Employer and that Trustee and the terms of the Plan without regard
to any other agreement entered into between any other Trustee and the Employer
as a part of the Plan.
D.5 ALLOCATION OF RESPONSIBILITY. To the fullest extent permitted under
section 405 of ERISA, the agreements entered into between the Employer and each
of the Trustees shall be interpreted to allocate to each Trustee its specific
responsibilities, obligations and duties so as to relieve all other Trustees
from liability either through the agreement, Plan or ERISA, for any act of any
other Trustee which results in a loss to the Plan because of his act or failure
to act.
D.6 TRUSTEE'S FEES AND EXPENSES. The Trustee shall receive for its
services as Trustee hereunder the compensation which from time to time may be
agreed upon by the Sponsor and the Trustee. All of such compensation, together
with the expenses incurred by the Trustee in connection with the administration
of this Trust, including fees for legal services rendered to the Trustee, all
other charges and disbursements of the Trustee, and all other expenses of the
Plan shall be charged to and deducted from the Trust assets, unless the Sponsor
elects in writing to have any part or all of such compensation, expenses,
charges, and disbursements paid directly by the Sponsor. The Trustee shall
deduct from and charge against the Trust assets any and all taxes paid by it
which may be levied or assessed upon or in respect of the Trust hereunder or the
income thereof, and shall equitably allocate the same among the several Members
and former Members.
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