Exhibit 10(e)(iv)
TRUST, RECORDKEEPING AND ADMINISTRATIVE SERVICES AGREEMENT
Between
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LIZ CLAIBORNE, INC.
And
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY, INC.
And
FIDELITY MANAGEMENT TRUST COMPANY
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THE LIZ CLAIBORNE 401(K) SAVINGS AND PROFIT SHARING PLAN
TRUST
Dated as of October 1, 2003
TABLE OF CONTENTS
Section 1. Definitions........................................................2
Section 2. Trust..............................................................8
Section 3. Exclusive Benefit and Reversion of Sponsor Contributions...........8
Section 4. Disbursements......................................................9
(a) Administrator-Directed Disbursements.................................9
(b) Participant Withdrawal Requests......................................9
(c) Limitations..........................................................9
Section 5. Investment of Trust...............................................10
(a) Selection of Investment Options.....................................10
(b) Available Investment Options........................................10
(c) Participant Direction...............................................11
(d) Mutual Funds........................................................11
(i) Execution of Purchases and Sales.................................11
(ii) Voting...........................................................12
(e) Sponsor Stock.......................................................12
(i) Acquisition Limit................................................13
(ii) Fiduciary Duty...................................................13
(iii) Purchases and Sales of Sponsor Stock.............................13
(iv) Execution of Purchases and Sales of Units........................15
(v) Securities Law Reports...........................................15
(vi) Voting and Tender Offers.........................................16
(vii) General..........................................................18
(viii) Conversion.......................................................18
(f) Participant Loans...................................................18
(g) BrokerageLink.......................................................19
(h) Stable Value Investments............................................20
(i) Collective Investment Funds Managed by the Trustee...............20
(ii) Managed Income Fund..............................................20
(iii) Liquidity Reserve................................................20
(i) Trustee Powers......................................................21
Section 6. Recordkeeping and Administrative Services to Be Performed.........22
(a) General.............................................................22
(b) Accounts............................................................22
(c) Inspection and Audit................................................23
(d) Notice of Plan Amendment............................................23
(e) Returns, Reports and Information....................................23
(f) Plan Administration Manual..........................................24
(g) Compliance..........................................................24
(h) Updates.............................................................24
(i) Errors..............................................................25
(j) On-Site Visits......................................................25
(k) Fiduciary Status....................................................25
(l) Retention of Records................................................25
(m) Compliance with Applicable Laws.....................................26
(n) Plan Data...........................................................26
(o) Recording System....................................................27
Section 7. Compensation and Expenses.........................................27
Section 8. Directions and Indemnification....................................28
(a) Identity of Administrator and Named Fiduciary.......................28
(b) Directions from Administrator.......................................28
(c) Directions from Named Fiduciary.....................................28
(d) Co-Fiduciary Liability..............................................29
(e) Indemnification.....................................................29
(f) Option to Defend....................................................30
(g) Standard of Care....................................................30
(h) Survival............................................................30
Section 9. Resignation or Removal of Trustee and Recordkeeper and
Termination.......................................................31
(a) Resignation and Removal.............................................31
(b) Termination.........................................................31
(c) Notice Period.......................................................31
(d) Transition Assistance...............................................31
(e) Failure to Appoint Successor........................................32
Section 10. Successor Trustee.................................................32
(a) Appointment.........................................................32
(b) Acceptance..........................................................32
(c) Corporate Action....................................................33
Section 11. Resignation, Removal, and Termination Notices.....................33
Section 12. Duration of Trust.................................................33
Section 13. Amendment or Modification.........................................33
Section 14. Electronic Services...............................................34
Section 15. Assignment........................................................35
Section 16. Force Majeure.....................................................36
Section 17. Confidentiality...................................................36
Section 18. General...........................................................37
(a) Performance by Trustee and Recordkeeper, their Agents or
Affiliates..........................................................37
(b) Entire Agreement....................................................37
(c) Waiver..............................................................37
(d) Successors and Assigns..............................................37
(e) Partial Invalidity..................................................38
(f) Section Headings....................................................38
Section 19. Governing Law.....................................................39
(a) Massachusetts Law Controls..........................................39
(b) Agreement Controls..................................................39
Section 20. Plan Qualification................................................39
SCHEDULES.....................................................................41
Schedule "A" - Administrative Services.....................................41
Schedule "B" - Fee Schedule................................................46
Schedule "C" - Investment Options..........................................49
Schedule "D" - Authorized Signers (Administrator)..........................50
Schedule "E" - Authorized Signers (Named Fiduciary)........................51
Schedule "F" - Statement of Qualified Status...............................52
Schedule "G" - Existing Stable Value Funds.................................54
Schedule "H" - Exchange Guidelines.........................................55
Schedule "I" - Operational Guidelines for Non-Fidelity Mutual Funds........58
Schedule "J" - Securities That May Be Purchased Under the BrokerageLink
Option.....................................................................60
Schedule "K" - BrokerageLink Administrative Procedures.....................61
Schedule "L" - Operational Procedures for Hardship Withdrawals by Phone....65
Schedule "M" - Available Liquidity Procedures for Unitized Stock Fund......67
Schedule "N" - Operating Procedures for the Managed Income Fund of the
Liz Claiborne 401(K) Savings & Profit Sharing Plan.........................68
Schedule "O" - Form 5500 Service...........................................70
-ii-
TRUST AGREEMENT, dated as of the 1st day of October, 2003, among LIZ
CLAIBORNE, INC., a Delaware corporation, having an office at Xxx Xxxxxxxxx
Xxxxxx, Xxxxx Xxxxxx, XX 00000 (the "Sponsor"), and FIDELITY MANAGEMENT TRUST
COMPANY, a Massachusetts trust company, having an office at 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Trustee") and FIDELITY INVESTMENTS
INSTITUTIONAL OPERATIONS COMPANY, INC. a Massachusetts corporation, having an
office at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Recordkeeper").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the Liz Claiborne 401(k) Savings
and Profit Sharing Plan (the "Plan"); and
WHEREAS, the Sponsor has established a single trust to hold and invest
assets of the Plan for the exclusive benefit of Participants, as defined herein,
in the Plan and their beneficiaries; and
WHEREAS, the Trustee, as successor trustee, is willing to hold and
invest the aforesaid Plan assets in trust among several investment options
selected by the Named Fiduciary, as defined herein; and
WHEREAS, such trust shall constitute a continuation, by means of an
amendment and restatement, of the prior trust from which Plan assets are
transferred to the Trustee; and
WHEREAS, the Sponsor also wishes to have the Recordkeeper, perform
certain ministerial recordkeeping and administrative functions under the Plan;
and
WHEREAS, the Recordkeeper is willing to perform recordkeeping and
administrative services for the Plan that are ministerial in nature and are
provided within a framework of plan provisions, guidelines and interpretations
conveyed in writing to the Recordkeeper by the Administrator (as defined herein)
and as documented in the Plan Administration Manual.
WHEREAS, the trustee services provided under this Agreement shall be
performed by the Trustee and the recordkeeping and administrative services
provided under this Agreement shall be performed by the Recordkeeper. To the
extent possible, the provisions of this Agreement distinguish the trustee
services provided by the Trustee from the recordkeeping and administrative
services that will be provided by the Recordkeeper; and
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor, the Trustee and
the Recordkeeper agree as follows:
Section 1. Definitions.
The following terms as used in this Trust, Recordkeeping and Administrative
ServicesAgreement have the meaning indicated unless the context clearly requires
otherwise:
(a) "Administrator"
"Administrator" shall mean the Committee, identified in the Plan document as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
(b) "Agreement"
"Agreement" shall mean this Trust, Recordkeeping and Administrative Services
Agreement, and the Schedules attached hereto, as the same may be amended and in
effect from time to time.
(c) "Available Liquidity"
"Available Liquidity" shall mean the amount of short-term investments held in
the Stock Fund decreased by any outgoing cash for expenses then due, payables
for loan principal, and obligations for pending stock purchases, and increased
by incoming cash (such as contributions, exchanges in, loan repayments) and to
the extent credit is available and allocable to the Stock Fund, receivables for
pending stock sales.
(d) "BrokerageLink"
"BrokerageLink" shall mean the Participant directed brokerage option offered
under the plan.
(e) "BrokerageLink Core Account"
"BrokerageLink Core Account" shall mean the cash portion of a Participant's
BrokerageLink account in which all brokerage transactions are settled. In
addition, all contributions and additional BrokerageLink investments are first
deposited in a Participant's core account.
(f) "Business Day"
"Business Day" shall mean each day the NYSE is open.
(g) "Closing Price"
"Closing Price" shall mean either (1) the closing price of the stock on the
principal national securities exchange on which the Sponsor Stock is traded or,
in the case of stocks traded over the counter, the last sale price of the day;
or, if (1) is unavailable, (2) the latest available price as reported by the
principal
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national securities exchange on which the Sponsor Stock is traded or, for an
over the counter stock, the last bid price prior to the close of the New York
Stock Exchange (generally 4:00 p.m. Eastern time).
(h) "Code"
"Code" shall mean the Internal Revenue Code of 1986, as it has been or may be
amended from time to time, and applicable regulations thereunder.
(i) "Confidential Information"
"Confidential Information" shall mean (individually and collectively)
proprietary information of the parties to this Agreement, including but not
limited to, their inventions, confidential information, know how, trade secrets,
business affairs, prospect lists, product designs, product plans, business
strategies, finances, fee structures, etc.
(j) "Declaration of Separate Fund"
"Declaration of Separate Fund" shall mean the declaration of separate trust for
each separate fund of the Group Trust.
(k) "EDT"
"EDT" shall mean electronic data transfer.
(l) "Electronic Products"
"Electronic Products" shall mean software products made available via electronic
media.
(m) "Electronic Services"
"Electronic Services" shall mean communications and services made available via
electronic media.
(n) "ERISA"
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it
has been or may be amended from time to time, and applicable regulations
thereunder.
(o) "External Account Information"
"External Account Information" shall mean account information, including
retirement savings account information, from third party websites or other
websites maintained by Fidelity or its affiliates.
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(p) "FAST"
"FAST" shall mean Fidelity Automated Service Telephone, the voice response
system for retail fund customers to make transactions and inquiries.
(q) "FBSLLC"
"FBSLLC" shall mean Fidelity Brokerage Services LLC.
(r) "Fidelity Mutual Fund"
"Fidelity Mutual Fund" shall mean any investment company advised by Fidelity
Management & Research Company or any of its affiliates.
(s) "FIFO"
"FIFO" shall mean First In First Out.
(t) "FIIOC"
"FIIOC" shall mean Fidelity Investments Institutional Operations Company, Inc.
(u) "Group Trust"
"Group Trust" shall mean the Fidelity Group Trust for Employee Benefit Plans for
qualified plans.
(v) "In Good Order"
"In Good Order" shall mean in a state or condition acceptable to the Trustee
and/or the Recordkeeper in their sole discretion, which the Trustee and/or the
Recordkeeper determines is reasonably necessary for accurate execution of the
intended transaction.
(w) "Losses"
"Losses" shall mean any and all loss, damage, penalty, liability, cost and
expense, including without limitation, reasonable attorney's fees and
disbursements.
(x) "Mutual Fund"
"Mutual Fund" shall refer both to Fidelity Mutual Funds and Non-Fidelity Mutual
Funds.
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(y) "Named Fiduciary"
"Named Fiduciary" shall mean with respect to the application of any provision of
this Agreement to the Plan, the person or entity which is the relevant named
fiduciary under the Plan with respect to such matter (within the meaning of
section 402(a) of ERISA).
(z) "NAV"
"NAV" shall mean Net Asset Value.
(aa) "NFSLLC"
"NFSLLC" shall mean National Financial Services LLC.
(bb) "Non-Fidelity Mutual Fund"
"Non-Fidelity Mutual Fund" shall mean certain investment companies not advised
by Fidelity Management & Research Company or any of its affiliates.
(cc) "NYSE"
"NYSE" shall mean the New York Stock Exchange.
(dd) "Participant"
"Participant" shall mean, with respect to the Plan, any employee, former
employee, or alternate payee with an account under the Plan, which has not yet
been fully distributed and/or forfeited, and shall include the designated
beneficiary(ies) with respect to the account of any deceased employee, former
employee, or alternate payee until such account has been fully distributed
and/or forfeited.
(ee) "Participant Recordkeeping Reconciliation Period"
"Participant Recordkeeping Reconciliation Period" shall mean the period
beginning on the date of the initial transfer of assets to the Trust and ending
on the date of the completion of the reconciliation of Participant records.
(ff) "Participation Agreement"
"Participation Agreement" shall mean the participation agreement for the Group
Trust.
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(gg) "PIN"
"PIN" shall mean personal identification number.
(hh) "Plan"
"Plan" shall mean the Liz Claiborne 401(k) Savings and Profit Sharing Plan.
(ii) "Plan Administration Manual"
"Plan Administration Manual" shall mean a written manual and any other policies,
procedures or documents developed and maintained by the Sponsor and Recordkeeper
pursuant to this Agreement which describes in detail processes and functions
integral to the administration of the Plan that are to be performed by the
Recordkeeper pursuant to this Agreement..
(jj) "Plan Data"
"Plan Data" shall mean (i) all records, data and information provided to the
Recordkeeper by the Sponsor or the Plan's previous recordkeeper and (ii) all
data and information created by the Recordkeeper by processing the records, data
and information provided by the Sponsor or its agent or as a result of providing
the recordkeeping services.
(kk) "Plan Sponsor Webstation"
"Plan Sponsor Webstation" shall mean the graphical windows based application
that provides current Plan and Participant information including indicative
data, account balances, activity and history.
(ll) "Recordkeeper"
"Recordkeeper" shall mean Fidelity Investments Institutional Operations Company,
Inc. ("FIIOC"), and any other subsidiary or affiliate of FIIOC.
(mm) "Recordkeeping Services"
"Recordkeeping Services" shall mean those recordkeeping and administrative
services that are ministerial in nature and are provided within a framework of
plan provisions, guidelines and interpretations conveyed in writing to the
Recordkeeper by the Administrator and as documented in the Plan Administration
Manual that the Recorkeeper has agreed to perform pursuant to this Agreement.
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(nn) "Reporting Date"
"Reporting Date" shall mean the last day of each calendar quarter of the Plan,
the date as of which the Trustee resigns or is removed pursuant to Section 9
hereof or the date as of which this Agreement terminates pursuant to Section 11
hereof.
(oo) "SEC"
"SEC" shall mean the Securities and Exchange Commission.
(pp) "Specified Hierarchy"
"Specified Hierarchy" shall mean the Stock Fund processing order set forth in
Schedule "M" that gives precedence to distributions, loans and withdrawals, and
otherwise on a FIFO basis.
(qq) "SPO"
"SPO" shall mean, for the BrokerageLink option, the Standard Plan Options which
are the basic non-brokerage investment options available in the Plan.
(rr) "Sponsor"
"Sponsor" shall mean Liz Claiborne, Inc., a Delaware corporation, or any
successor to all or substantially all of its businesses which, by agreement,
operation of law or otherwise, assumes the responsibility of the Sponsor under
this Agreement.
(ss) "Sponsor Stock"
"Sponsor Stock" shall mean the common stock of the Sponsor, or such other
publicly traded stock of the Sponsor, or such other publicly-traded stock of the
Sponsor's affiliates as meets the requirements of section 407(d)(5) of ERISA
with respect to the Plan.
(tt) "Stock Fund"
"Stock Fund" shall mean the investment option consisting primarily of Sponsor
Stock and cash or short term liquid investments.
(uu) "Trust"
"Trust" shall mean the Liz Claiborne 401(k) Savings and Profit Sharing Plan
Trust, being the trust established and maintained by the Sponsor and the Trustee
pursuant to the provisions of this Agreement.
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(vv) "Trustee"
"Trustee" shall mean Fidelity Management Trust Company, a Massachusetts trust
company and any successor to all or substantially all of its trust business as
described in Section 10(c). The term Trustee shall also include any successor
trustee appointed pursuant to Section 10 to the extent such successor agrees to
serve as Trustee under this Agreement.
(ww) "VRS"
"VRS" shall mean Voice Response System.
Section 2. Trust.
The Sponsor hereby appoints the Trustee as successor trustee with respect to the
Trust. The Trust shall consist of an initial transfer of money or other property
acceptable to the Trustee in its sole discretion, from a previous trustee under
the Plan, such additional sums of money or other property acceptable to the
Trustee in its sole discretion, as shall from time to time be delivered to the
Trustee under the Plan, all investments made therewith and proceeds thereof, and
all earnings and profits thereon, less the payments that are made by the Trustee
as provided herein. The Trustee hereby accepts the Trust on the terms and
conditions set forth in this Agreement. In accepting this Trust, the Trustee
shall be accountable for the assets received by it, subject to the terms and
conditions of this Agreement.
Section 3. Exclusive Benefit and Reversion of Sponsor Contributions.
Except as provided under applicable law and the terms of the Plan as
communicated by the Sponsor to the Trustee, no part of the Trust may be used
for, or diverted to, purposes other than the exclusive benefit of the
Participants in the Plan or their beneficiaries or the reasonable expenses of
Plan administration. No assets of the Plan shall revert to the Sponsor, except
as specifically permitted by the terms of the Plan.
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Section 4. Disbursements.
(a) Administrator-Directed Disbursements.
The Trustee through the Recordkeeper shall make disbursements in the amounts and
in the manner that the Administrator directs from time to time in writing. The
Trustee and the Recordkeeper shall have no responsibility to ascertain such
direction's compliance with the terms of the Plan (except to the extent the
terms of the Plan have been communicated to the Trustee and the Recordkeeper in
writing) or of any applicable law or the direction's effect for tax purposes or
otherwise; nor shall the Trustee and the Recordkeeper have any responsibility to
see to the application of any disbursement.
(b) Participant Withdrawal Requests.
The Sponsor hereby directs that, pursuant to the Plan, a Participant withdrawal
request (in-service or post-termination, full or partial withdrawal) may be made
by the Participant to the Trustee through the Recordkeeper by telephone or such
other electronic means as mutually agreed upon by the Sponsor, Trustee and the
Recordkeeper, and the Trustee through the Recordkeeper shall process such
request only after the identity of the Participant is verified by use of a PIN
and social security number or such other personal identifier as may be agreed to
from time to time by the Sponsor , the Trustee and the Recordkeeper. The Trustee
through the Recordkeeper shall process such withdrawal in accordance with
written guidelines provided by the Sponsor and documented in the Plan
Administration Manual. In the case of a hardship withdrawal request, the Trustee
through the Recordkeeper shall forward the withdrawal document to the
Participant for execution and submission for processing to the Trustee through
the Recordkeeper in accordance with the guidelines attached hereto as Schedule
"L".
(c) Limitations.
The Trustee through the Recordkeeper shall not be required to make any
disbursement in excess of the net realizable value of the assets of the Trust at
the time of the disbursement. The Trustee through the Recordkeeper shall be
required to make all disbursements in accordance with the applicable source and
fund withdrawal hierarchy and as documented in the Plan Administration Manual,
unless the Administrator has provided a written direction to the contrary.
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Section 5. Investment of Trust.
(a) Selection of Investment Options.
The Trustee and the Recordkeeper shall have no responsibility for the selection
of investment options under the Trust and shall not render investment advice to
any person in connection with the selection of such options.
It is the intent of the Sponsor and the Trustee that, except as expressly
set forth herein, the Trustee shall function as a directed trustee and shall not
have discretionary authority over the management and investment of Plan assets.
It is also the intent of the Sponsor, the Trustee and the Recordkeeper that,
subject to the provisions of ERISA, the Trustee and the Recordkeeper will not be
responsible for any loss resulting from any action taken (or not taken) by the
Trustee or the Recordkeeper in accordance with a direction properly given (or
properly withheld) by any person (including Participants) authorized to give
such direction under the terms of this Agreement.
(b) Available Investment Options.
The Named Fiduciary shall direct the Trustee and the Recordkeeper as to the
investment options in which the Trust shall be invested during the Participant
Recordkeeping Reconciliation Period and the investment options in which
Participants may invest following the Participant Recordkeeping Reconciliation
Period. The Named Fiduciary may determine to offer as investment options only:
(i) Mutual Funds, (ii) Sponsor Stock, (iii) notes evidencing loans to
Participants in accordance with the terms of the Plan, (iv) BrokerageLink, (v)
existing stable value funds, and (vi) collective investment funds maintained by
the Trustee for qualified plans.
Unless otherwise set forth on Schedule "G", the Named Fiduciary hereby directs
the Trustee to continue to hold such existing stable value funds until contract
maturity or until the Named Fiduciary directs otherwise, it being expressly
understood that such direction is given in accordance with section 403(a) of
ERISA. The Trustee shall be considered a fiduciary with investment discretion
only with respect to Plan assets (including the proceeds from any existing
stable value funds) that are invested in investment contracts chosen by the
Trustee or in collective investment funds maintained by the Trustee for
qualified plans.
The investment options initially selected by the Named Fiduciary are identified
on Schedule "C" attached hereto. Upon transfer to the Trust, Plan assets will be
invested in the investment option(s) as directed by the Sponsor. The Named
Fiduciary may change investment options with the consent of the Trustee
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and the Recordkeeper to reflect administrative considerations and upon mutual
amendment of this Agreement, and the Schedules thereto, to reflect such changes.
(c) Participant Direction.
Upon initial transfer from the predecessor trustee, Plan assets will be invested
in the investment options within the Trust by use of a mapping procedure
directed by the Sponsor after consultation with the Trustee and the
Recordkeeper. Thereafter, as authorized under the Plan, each Participant shall
be entitled to direct the Trustee through the Recordkeeper in which investment
option(s) to invest the assets in the Participant's individual accounts. Such
directions may be made by Participants by use of the telephone exchange system,
the internet or in such other manner as may be agreed upon from time to time by
the Sponsor, the Recordkeeper and the Trustee. Such direction shall be made in
accordance with written exchange guidelines attached hereto as Schedule "H". In
the event that the Trustee or the Recordkeeper fails to receive a proper
direction from the Participant, the assets shall be invested in the investment
option set forth for such purpose on Schedule "C", until the Trustee or the
Recordkeeper receives a proper direction.
(d) Mutual Funds.
On the effective date of this Agreement, in lieu of receiving a printed copy of
the prospectus for each Fidelity Mutual Fund selected by the Named Fiduciary as
a Plan investment option or short-term investment fund, the Named Fiduciary
hereby consents to receiving such documents electronically. Named Fiduciary
shall access each prospectus on the internet after receiving notice from the
Trustee that a current version is available online at a website maintained by
the Trustee or its affiliate. Trustee represents that on the effective date of
this Agreement, a current version of each such prospectus is available at
xxxxx://xxx.xxxxxxxx.xxx or such successor website as Trustee may notify Named
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Fiduciary of in writing from time to time. Named Fiduciary represents that it
has accessed/will access each such prospectus at xxxxx://xxx.xxxxxxxx.xxx or
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such successor website as Trustee may notify Named Fiduciary of in writing from
time to time as of the effective date of this Agreement. All transactions
involving Non-Fidelity Mutual Funds shall be done in accordance with the
Operational Guidelines attached hereto as Schedule "I". Trust investments in
Mutual Funds shall be subject to the following limitations:
(i) Execution of Purchases and Sales.
Purchases and sales of Mutual Funds (other than for exchanges) shall be made on
the date on which the Trustee receives from the Administrator In Good Order all
information, documentation and wire transfer of funds (if applicable), necessary
to accurately effect such transactions. Exchanges of Mutual Funds shall be made
in accordance with the exchange guidelines attached hereto as Schedule "H".
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(ii) Voting.
At the time of mailing of notice of each annual or special stockholders' meeting
of any Mutual Fund, the Trustee shall send a copy of the notice and all proxy
solicitation materials to each Participant who has shares of such Mutual Fund
credited to the Participant's accounts, together with a voting direction form
for return to the Trustee or its designee. The Participant shall have the right
to direct the Trustee as to the manner in which the Trustee is to vote the
shares credited to the Participant's accounts (both vested and unvested). The
Trustee shall vote the shares as directed by the Participant. The Trustee shall
not vote shares for which it has received no directions from the Participant.
During the Participant Recordkeeping Reconciliation Period, the Named Fiduciary
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote the shares of the Mutual Funds in the Trust, including Mutual Fund
shares held in any short-term investment fund for liquidity reserve. Following
the Participant Recordkeeping Reconciliation Period, the Named Fiduciary shall
continue to have the right to direct the Trustee as to the manner in which the
Trustee is to vote any Mutual Funds shares held in a short-term investment fund
for liquidity reserve. The Trustee shall not vote any Mutual Fund shares for
which it has received no directions from the Named Fiduciary.
With respect to all rights other than the right to vote, the Trustee shall
follow the directions of the Participant and if no such directions are received,
the directions of the Named Fiduciary. The Trustee shall have no further duty to
solicit directions from Participants or the Named Fiduciary.
(e) Sponsor Stock.
Trust investments in Sponsor Stock shall be made via the Stock Fund. Investments
in the Stock Fund shall consist primarily of shares of Sponsor Stock. The Stock
Fund shall also include cash or short-term liquid investments, in accordance
with this paragraph, in amounts designed to satisfy daily Participant exchange
or withdrawal requests. Such holdings will include Colchester Street Trust:
Money Market Portfolio: Class I or such other Mutual Fund or commingled money
market pool as agreed to in writing by the Named Fiduciary and Trustee. The
Named Fiduciary shall, after consultation with the Trustee, establish and
communicate to the Trustee in writing a target percentage and drift allowance
for such short-term liquid investments. Subject to its ability to execute
open-market trades in Sponsor Stock or to otherwise trade with the Sponsor, the
Trustee shall be responsible for ensuring that the short-term investments held
in the Stock Fund fall within the agreed-upon range over time. Each
Participant's proportional interest in the Stock Fund shall be measured in units
of participation, rather than shares of Sponsor Stock. Such units shall
represent a proportionate interest in all of the assets of the Stock Fund, which
includes shares of Sponsor Stock, short-term investments and at times,
receivables and payables
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(such as receivables and payables arising out of unsettled stock trades). The
Trustee shall determine a NAV for each unit outstanding of the Stock Fund.
Valuation of the Stock Fund shall be based upon: (a) the Closing Price or, if
not available, (b) the price determined in good faith by the Trustee. The NAV
shall be adjusted for gains or losses realized on sales of Sponsor Stock,
appreciation or depreciation in the value of those shares owned, dividends paid
on Sponsor Stock to the extent not used to purchase additional units of the
Stock Fund for affected Participants, and interest on the short-term investments
held by the Stock Fund, payables and receivables for pending stock trades,
receivables for dividends not yet distributed, and payables for other expenses
of the Stock Fund, including principal obligations, if any, and expenses that,
pursuant to Sponsor direction, the Trustee accrues or pays from the Stock Fund.
(i) Acquisition Limit.
Pursuant to the Plan, the Trust may be invested in Sponsor Stock to the extent
necessary to comply with investment directions in accordance with this
Agreement. The Sponsor shall be responsible for providing specific direction on
any acquisition limits required by the Plan or applicable law.
(ii) Fiduciary Duty.
(A) The Named Fiduciary shall continually monitor the
suitability of acquiring and holding Sponsor Stock under the fiduciary duty
rules of section 404(a) of ERISA (as modified by section 404(a)(2) of ERISA).
The Trustee shall not be liable for any loss or expense which arises from the
directions of the Named Fiduciary with respect to the acquisition and holding of
Sponsor Stock, unless it is clear on their face that the actions to be taken
under those directions would be prohibited by the foregoing fiduciary duty rules
or would be contrary to the terms of this Agreement.
(iii) Purchases and Sales of Sponsor Stock.
Unless otherwise directed by the Named Fiduciary in writing pursuant to
directions that the Trustee can administratively implement, the following
provisions shall govern purchases and sales of Sponsor Stock.
(A) Open Market Purchases and Sales. Purchases and sales of
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Sponsor Stock shall be made on the open market in accordance with the Trustee's
standard trading guidelines, as they may be amended by the Trustee from time to
time, as necessary to honor exchange and withdrawal activity and to maintain the
target cash percentage and drift allowance for the Stock Fund, provided that:
(1) If the Trustee is unable to purchase or sell the total
number of shares required to be purchased or sold on such day as a result of
market conditions; or
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(2) If the Trustee is prohibited by the SEC, the NYSE or
principal exchange on which the Sponsor Stock is traded, or any other regulatory
body from purchasing or selling any or all of the shares required to be
purchased or sold on such day,
then, under the circumstances set forth in either (1) or (2), the Trustee shall
purchase or sell such shares as soon thereafter as administratively feasible.
(B) Purchases and Sales from or to Sponsor. If directed by the
--------------------------------------
Named Fiduciary in writing prior to the trading date, the Trustee may purchase
or sell Sponsor Stock from or to the Sponsor if the purchase or sale is for
adequate consideration (within the meaning of section 3(18) of ERISA) and no
commission is charged. If Sponsor contributions (employer) or contributions made
by the Sponsor on behalf of the Participants (employee) under the Plan are to be
invested in Sponsor Stock, the Sponsor may transfer Sponsor Stock in lieu of
cash to the Trust.
(C) Use of an Affiliated Broker. The Named Fiduciary hereby
---------------------------
directs the Trustee to use Fidelity Capital Markets, a division of NFSLLC, to
provide brokerage services in connection with any purchase or sale of Sponsor
Stock on the open market, except in circumstances where the Trustee has
determined, in accordance with its standard trading guidelines or pursuant to
Sponsor direction, to seek expedited settlement of the trades. Fidelity Capital
Markets shall execute such directions directly or through any of its affiliates.
The provision of brokerage services shall be subject to the following:
(1) As consideration for such brokerage services, the Named
Fiduciary agrees that Fidelity Capital Markets shall be entitled to remuneration
under this direction provision in an amount of no more than three and one-fifth
cents ($.032) commission on each share of Sponsor Stock. Any increase in such
remuneration may be made only by a signed agreement between the Named Fiduciary
and Trustee.
(2) The Trustee will provide the Named Fiduciary with
periodic reports which summarize all securities transaction-related charges
incurred with respect to trades of Sponsor Stock for such Plan.
(3) Any successor organization of Fidelity Capital Markets,
through reorganization, consolidation, merger or similar transactions, shall,
upon consummation of such transaction, become the successor broker in accordance
with the terms of this direction provision.
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(4) The Trustee and Fidelity Capital Markets shall continue
to rely on this direction provision until notified to the contrary. The Named
Fiduciary reserves the right to terminate this direction upon written notice to
Fidelity Capital Markets (or its successor) and the Trustee.
(iv) Execution of Purchases and Sales of Units.
Unless otherwise directed in writing pursuant to directions that the Trustee can
administratively implement, purchases and sales of units shall be made as
follows:
(A) Subject to subparagraphs (B) and (C) below, purchases and
sales of units in the Stock Fund (other than for exchanges) shall be made on the
date on which the Trustee receives from the Administrator In Good Order all
information, documentation, and wire transfers of funds (if applicable),
necessary to accurately effect such transactions. Exchanges of units in the
Stock Fund shall be made in accordance with the Exchange Guidelines attached
hereto as Schedule "H".
(B) Aggregate sales of units in the Stock Fund on any day shall
be limited to the Stock Fund's Available Liquidity for that day. In the event
that the requested sales exceed the Available Liquidity, then transactions shall
be processed giving precedence to distributions, loans and withdrawals, and
otherwise on a FIFO basis, as provided in Schedule "M" (the "Specified
Hierarchy"). So long as the Stock Fund is open for such transactions, sales of
units that are requested but not processed on a given day due to insufficient
Available Liquidity shall be suspended until Available Liquidity is sufficient
to honor such transactions in accordance with the Specified Hierarchy.
(C) The Trustee shall close the Stock Fund to sales or purchases
of units, as applicable, on any date on which trading in the Sponsor Stock has
been suspended or substantial purchase or sale orders are outstanding and cannot
be executed.
(v) Securities Law Reports.
The Named Fiduciary shall be responsible for filing all reports required under
Federal or state securities laws with respect to the Trust's ownership of
Sponsor Stock, including, without limitation, any reports required under section
13 or 16 of the Securities Exchange Act of 1934, and shall immediately notify
the Trustee in writing of any requirement to stop purchases or sales of Sponsor
Stock pending the filing of any report. The Trustee shall provide to the Named
Fiduciary such information on the Trust's ownership of Sponsor Stock as the
Named Fiduciary may reasonably request in order to comply with Federal or state
securities laws.
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(vi) Voting and Tender Offers.
Notwithstanding any other provision of this Agreement the provisions of this
Section shall govern the voting and tendering of Sponsor Stock. The Sponsor
shall pay for all printing, mailing, tabulation and other costs associated with
the voting and tendering of Sponsor Stock. The Trustee, after consultation with
the Sponsor, shall prepare the necessary documents associated with the voting
and tendering of Sponsor Stock.
(A) Voting.
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(1) When the issuer of Sponsor Stock prepares for any
annual or special meeting, the Sponsor shall notify the Trustee at least thirty
(30) days in advance of the intended record date and shall cause a copy of all
proxy solicitation materials to be sent to the Trustee. If requested by the
Trustee, the Sponsor shall certify to the Trustee that the aforementioned
materials represent the same information that is distributed to shareholders of
Sponsor Stock. Based on these materials the Trustee shall prepare a voting
instruction form and shall provide a copy of all proxy solicitation materials to
be sent to each Participant 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 proportional interest in the
number of full and fractional shares of Sponsor Stock credited to the
Participant's accounts held in the Stock Fund.
(2) Each Participant with an interest in the Stock Fund
shall have the right to direct the Trustee as to the manner in which the Trustee
is to vote (including not to vote) that number of shares of Sponsor Stock
reflecting such Participant's proportional interest in the Stock Fund (both
vested and unvested). Directions from a Participant to the Trustee concerning
the voting of Sponsor Stock shall be communicated in writing, or by such other
means as is agreed upon by the Trustee and the Sponsor. 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. Upon its receipt of the directions, the
Trustee shall vote the shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund as directed by the Participant. Except
as otherwise required by law, the Trustee shall vote shares of Sponsor Stock
credited to a Participant's account for which it has received no direction from
the Participant in the same proportion on each issue as it votes those shares
credited to Participants' accounts for which it has received voting directions
from Participants.
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(3) Except as otherwise required by law, the Trustee shall
vote that number of shares of Sponsor Stock not credited to Participants'
accounts in the same proportion on each issue as it votes those shares credited
to Participants' accounts for which it received voting directions from
Participants.
(B) Tender Offers.
-------------
(1) Upon commencement of a tender offer for any securities
held in the Trust that are Sponsor Stock, the Sponsor shall timely notify the
Trustee in advance of the intended tender date and shall cause a copy of all
materials to be sent to the Trustee. The Sponsor shall certify to the Trustee
that the aforementioned materials represent the same information distributed to
shareholders of Sponsor Stock. Based on these materials and after consultation
with the Sponsor the Trustee shall prepare a tender instruction form and shall
provide a copy of all tender materials to be sent to each Participant with an
interest in the Stock Fund, together with the foregoing tender instruction form,
to be returned to the Trustee or its designee. The tender instruction form shall
show the number of full and fractional shares of Sponsor Stock that reflect the
Participants proportional interest in the Stock Fund (both vested and unvested).
(2) Each Participant with an interest in the Stock Fund
shall have the right to direct the Trustee to tender or not to tender some or
all of the shares of Sponsor Stock reflecting such Participant's proportional
interest in the Stock Fund (both vested and unvested). Directions from a
Participant to the Trustee concerning the tender of Sponsor Stock shall be
communicated in writing, or by such other means as is agreed upon by the Trustee
and the Sponsor. 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 Participant.
Except as otherwise required by law, the Trustee shall not tender shares of
Sponsor Stock reflecting a Participant's proportional interest in the Stock Fund
for which it has received no direction from the Participant.
(3) Except as otherwise required by law, the Trustee shall
tender that number of shares of Sponsor Stock not credited to Participants'
accounts in the same proportion as the total number of shares of Sponsor Stock
credited to Participants' accounts for which it has received instructions from
Participants.
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(4) A Participant who has directed the Trustee to tender
some or all of the shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund may, at any time prior to the tender
offer withdrawal date, direct the Trustee to withdraw some or all of the
tendered shares reflecting the Participant's proportional interest, 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 Sponsor Stock not credited to Participants' accounts have been
tendered, the Trustee shall redetermine the number of shares of Sponsor Stock
that would be tendered under Section 5(e)(vi)(B)(3) if the date of the foregoing
withdrawal were the date of determination, and withdraw from the tender offer
the number of shares of Sponsor Stock not credited to Participants' accounts
necessary to reduce the amount of tendered Sponsor Stock not credited to
Participants' accounts to the amount so redetermined. A Participant shall not be
limited as to the number of directions to tender or withdraw that the
Participant may give to the Trustee.
(5) A direction by a Participant to the Trustee to tender
shares of Sponsor Stock reflecting the Participant's proportional interest in
the Stock Fund shall not be considered a written election under the Plan by the
Participant to withdraw, or have distributed, any or all of his withdrawable
shares. The Trustee shall credit to each proportional interest of the
Participant from which the tendered shares were taken the proceeds received by
the Trustee in exchange for the shares of Sponsor Stock tendered from that
interest. Pending receipt of directions (through the Administrator) from the
Participant or the Named Fiduciary, as provided in the Plan, as to which of the
remaining investment options the proceeds should be invested in, the Trustee
shall invest the proceeds in the investment option described in Schedule "C".
(vii) General.
Except as required by ERISA, with respect to all shareholder rights other than
the right to vote, the right to tender, and the right to withdraw shares
previously tendered, in the case of Sponsor Stock, the Trustee shall follow the
procedures set forth in subsection (A), above.
(viii) Conversion.
All provisions in this Section 5(e) shall also apply to any securities received
as a result of a conversion of Sponsor Stock.
(f) Participant Loans.
The Administrator shall (i) separately account for repayments of such loans and
clearly identify such assets as Plan assets and (ii) collect and remit all
principal and interest payments to the Trustee through
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the Recordkeeper. To originate a "general purpose" loan, the Participant shall
direct the Trustee through the Recordkeeper as to the term and amount of the
loan to be made from the Participant's individual account. Such directions shall
be made by Participants by use of the system maintained for such purpose by the
Trustee and the Recordkeeper or their agents. The Trustee through the
Recordkeeper shall determine, based on the current value of the Participant's
account on the date of the request and any guidelines provided by the Sponsor,
the amount available for the loan. Based on the interest rate supplied by the
Sponsor in accordance with the terms of the Plan, the Trustee through the
Recordkeeper shall advise the Participant of such interest rate, as well as the
installment payment amounts. The Trustee through the Recordkeeper shall
distribute the loan agreement and truth-in-lending disclosure with the proceeds
check to the Participant. To facilitate recordkeeping, the Trustee through the
Recordkeeper may destroy the original of any proceeds check (including the
promissory note) made in connection with a loan to a Participant under the Plan,
provided that the Trustee through the Recordkeeper or its agent first creates a
duplicate by a photographic or optical scanning or other process yielding a
reasonable facsimile of the proceeds check (including the promissory note) and
the Participant's signature thereon, which duplicate may be reduced or enlarged
in size from the actual size of the original.
(g) BrokerageLink.
Under the BrokerageLink option, the Named Fiduciary hereby directs the Trustee
and the Recordkeeper to use FBSLLC to purchase or sell individual securities for
Participant accounts in accordance with investment directions provided by the
Participants. The provision of brokerage services shall be subject to the
following:
(i) Any successor organization of FBSLLC, through reorganization,
consolidation, merger or similar transactions, shall, upon consummation of such
transaction, become the successor broker in accordance with the terms of this
authorization provision.
(ii) The Trustee, Recordkeeper and FBSLLC shall continue to rely on
this direction provision until notified to the contrary. The Named Fiduciary
reserves the right to terminate this direction upon written notice to FBSLLC (or
its successor) and the Trustee and the Recorkeeper.
(iii) The types of securities which may be purchased under
BrokerageLink are listed on Schedule "J". Administrative procedures governing
investment in and withdrawals from BrokerageLink are attached hereto as Schedule
"K".
(iv) A Participant may authorize the use of an agent to have limited
trading authority over assets in their BrokerageLink account provided that the
Participant completes and files with
19
FBSLLC the brokerage services limited trading authorization and indemnification
form or a comparable form.
(v) A copy of the notice and all proxy solicitation materials,
together with a voting direction form, will be sent to each Participant with
BrokerageLink account balances. FBSLLC shall provide all proxies and other
shareholder materials to each Participant with such securities allocated to his
or her account. The Participant shall have the authority to direct the exercise
of all shareholder rights attributable to the securities allocated to his or her
account. The Trustee shall not exercise such rights in the absence of direction
from the Participant.
(h) Stable Value Investments.
Stable value investments in the Trust shall be subject to the following
limitations:
(i) Collective Investment Funds Managed by the Trustee.
To the extent that the Named Fiduciary selects as an investment option the
Managed Income Portfolio II of the Group Trust, the Sponsor hereby (A)
acknowledges that it has received from the Trustee a copy of the Group Trust,
the Participation Agreement and the Declaration of Separate Fund for the Managed
Income Portfolio II, and (B) adopts the terms of the Group Trust, the
Participation Agreement and the Declaration of Separate Fund as part of this
Agreement.
(ii) Managed Income Fund.
The Managed Income Fund shall consist of the American Express Trust Income Fund
II, a collective investment trust maintained for qualified retirement plans
blended with the Managed Income Portfolio II. All transactions involving the
Managed Income Fund shall be done in accordance with the Operating Procedures
attached hereto as Schedule "N".
(iii) Liquidity Reserve
To provide the necessary monies for exchanges or redemptions from the stable
value investment option, if any, under the Plan, the Sponsor agrees that the
Plan shall maintain a liquidity reserve for the Plan's stable value investment
options consisting of Colchester Street Trust: Money Market Portfolio: Class I
or such other Mutual Fund or commingled money market pool as agreed to by the
Sponsor and the Trustee.
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(i) Trustee Powers.
The Trustee shall have the following powers and authority:
(i) Subject to this Section 5, to sell, exchange, convey, transfer,
or otherwise dispose of any property held in the Trust, by private contract or
at public auction. No person dealing with the Trustee shall be bound to see to
the application of the purchase money or other property delivered to the Trustee
or to inquire into the validity, expediency, or propriety of any such sale or
other disposition.
(ii) To cause any securities or other property held as part of the
Trust to be registered in the Trustee's own name, in the name of one or more of
its nominees, or in the Trustee's account with the Depository Trust Company of
New York and to hold any investments in bearer form, but the books and records
of the Trustee shall at all times show that all such investments are part of the
Trust.
(iii) To keep that portion of the Trust in cash or cash balances as
the Named Fiduciary or Administrator may, from time to time, deem to be in the
best interest of the Trust.
(iv) To make, execute, acknowledge, and deliver any and all documents
of transfer or conveyance and to carry out the powers herein granted.
(v) To borrow funds from a bank not affiliated with the Trustee in
order to provide sufficient liquidity to process Plan transactions in a timely
fashion; provided that the cost of such borrowing shall be allocated in a
reasonable fashion to the investment fund(s) in need of liquidity. The Sponsor
shall receive notice of such as soon as administratively feasible.
(vi) To settle, compromise, or submit to arbitration any claims,
debts, or damages due to or arising from the Trust; to commence or defend suits
or legal or administrative proceedings; to represent the Trust in all suits and
legal and administrative hearings; and to pay all reasonable expenses arising
from any such action, from the Trust if not paid by the Sponsor.
(vii) To employ legal, accounting, clerical, and other assistance as
may be required in carrying out the provisions of this Agreement and to pay
their reasonable expenses and compensation from the Trust if not paid by the
Sponsor.
(viii) To invest all or any part of the assets of the Trust in
guaranteed investment contracts and short term investments (including interest
bearing accounts with the Trustee or money market mutual funds advised by
affiliates of the Trustee) and in any collective investment trust or group
trust, including any collective investment trust or group trust maintained by
the Trustee, which then provides for the pooling of the assets of plans
described in Section 401(a) and exempt from tax under
21
Section 501(a) of the Code, or any comparable provisions of any future
legislation that amends, supplements, or supersedes those sections, provided
that such collective investment trust or group trust is exempt from tax under
the Code or regulations or rulings issued by the Internal Revenue Service. The
provisions of the document governing such collective investment trusts or group
trusts, as it may be amended from time to time, shall govern any investment
therein and are hereby made a part of this Trust Agreement.
(ix) To do all other acts, although not specifically mentioned herein,
as the Trustee may deem necessary to carry out any of the foregoing powers and
the purposes of the Trust.
Section 6. Recordkeeping and Administrative Services to Be Performed.
(a) General.
The Recordkeeper shall perform those recordkeeping and administrative functions
described in Schedule "A" attached hereto or as otherwise agreed to in writing
(or by means of a secure electronic medium) between Sponsor and the
Recordkeeper. These recordkeeping and administrative functions shall be
performed within the framework of the Administrator's written directions
regarding the Plan's provisions, guidelines and interpretations and as
documented in the Plan Administration Manual. The Recordkeeper will not perform
any service that the Recordkeeper, in its sole judgment, considers might cause
the Recordkeeper to be treated as a fiduciary of the Plan (within the meaning of
Section 3(21) of ERISA). The Recordkeeper shall have the duty and responsibility
to perform all functions necessary to provide such recordkeeping and
administrative services in a professional and workmanlike manner in accordance
with the terms of the Plan as documented in the Plan Administration Manual and
this Agreement.
(b) Accounts.
The Trustee and the Recordkeeper shall keep accurate accounts in compliance with
federal law of all investments, receipts, disbursements, and other transactions
hereunder, and shall report the value of the assets held in the Trust as of each
Reporting Date. Within thirty (30) days following each Reporting Date or within
sixty (60) days in the case of a Reporting Date caused by the resignation or
removal of the Trustee and the Recordkeeper, or the termination of this
Agreement, the Trustee and/or the Recordkeeper shall file with the Administrator
a written account setting forth all investments, receipts, disbursements, and
other transactions effected by the Trustee and the Recordkeeper between the
Reporting Date and the prior Reporting Date, and setting forth the value of the
Trust as of the Reporting Date. The Administrator shall use all reasonable
efforts to bring to the Trustee's and the Recordkeeper's attention, as soon as
22
possible, any concerns or objections it may have relating to the accounts.
Notwithstanding the previous sentence, and except as otherwise required under
ERISA, upon the expiration of twelve (12) months from the date of filing such
account, the Trustee shall have no liability or further accountability to the
Administrator with respect to the propriety of its acts or transactions shown in
such account (or any Participant-level report provided to a Participant), except
with respect to such acts or transactions as to which a written objection shall
have been filed with the Trustee and the Recordkeeper within such twelve (12)
month period.
(c) Inspection and Audit.
Prior to the termination of this Agreement, all records generated by the Trustee
and the Recordkeeper in accordance with paragraphs (a) and (b), above, shall be
open to inspection and audit by the Sponsor or any persons designated by the
Sponsor, during the Trustee's and the Recordkeeper's regular business hours.
Notwithstanding the previous sentence, should any records be retained by the
Trustee and the Recordkeeper that were generated by the Trustee and the
Recordkeeper in accordance with paragraphs (a) and (b), above, post termination
of this Agreement, the Sponsor may request the inspection and audit of such
records by the Sponsor or any persons designated by the Sponsor, during the
Trustee's and the Recordkeeper's regular business hours for a period of up to
one (1) year after the termination of this Agreement. Upon the resignation or
removal of the Trustee or the Recordkeeper or the termination of this Agreement,
the Trustee and the Recordkeeper shall provide to the Sponsor, at no expense to
the Sponsor, in the format regularly provided to the Sponsor, a statement of
each Participant's accounts as of the resignation, removal, or termination, and
the Trustee and the Recordkeeper shall provide to the Sponsor or the Plan's new
recordkeeper such further records as may be reasonably requested, at the
Sponsor's expense.
(d) Notice of Plan Amendment.
The Recordkeeper's provision of the recordkeeping and administrative services
set forth in this Section 6 shall be conditioned on the Sponsor delivering to
the Trustee and the Recordkeeper a copy of any amendment to the Plan as soon as
administratively feasible following the amendment's adoption and on the
Administrator providing the Trustee and the Recordkeeper, on a timely basis,
with all the information the Recordkeeper deems necessary for it to perform the
recordkeeping and administrative services set forth herein, and such other
information as the Trustee or the Recordkeeper may reasonably request.
(e) Returns, Reports and Information.
Except as set forth on Schedule "A", the Administrator shall be responsible for
the preparation and filing of all returns, reports, and information required of
the Trust or Plan by law. The Trustee and
23
the Recordkeeper shall provide the Administrator with such information as the
Administrator may reasonably request to make these filings. The Administrator
shall also be responsible for making any disclosures to Participants required by
law, except such disclosure as may be required under federal or state
truth-in-lending laws with regard to Participant loans, which shall be provided
by the Trustee through the Recordkeeper.
(f) Plan Administration Manual.
The Recordkeeper and the Sponsor shall mutually develop and maintain the Plan
Administration Manual, which shall reflect the terms of the Plan as provided by
the Sponsor to the Recordkeeper. The Recordkeeper shall update the Plan
Administration Manual, or portions thereof, upon notice from the Sponsor of
amendments to the Plan, and to reflect administrative or legal changes or to
correct operational or administrative errors. The Recordkeeper shall provide a
copy of the Plan Administration Manual, as amended from time to time, to the
Sponsor.
After termination of this Agreement, the Sponsor may provide a copy of the
Plan Administration Manual to a successor vendor only for reference or for the
ongoing administration of the Plan; provided, however, prior to delivery, the
Trustee or Recordkeeper may redact any Fidelity Confidential Information and may
require the successor vendor to execute a confidentiality agreement.
(g) Compliance.
The Recordkeeper represents and warrants that the Recordkeeping Services will be
performed in accordance with applicable federal laws and regulations. The
Recordkeeper shall monitor changes in federal law to the extent applicable to
its provision of Recordkeeping Services.
(h) Updates.
To the extent that the Recordkeeper updates the technology it uses for
recordkeeping and administrative services, the Recordkeeper shall provide such
updates to the Sponsor to the extent such updates are offered to other clients
of the Recordkeeper. Notwithstanding the previous sentence, the Sponsor
acknowledges that the Recordkeeper, from time to time, for pilot testing
purposes or otherwise, may offer certain changes to other clients without first
offering them to the Sponsor. The Recordkeeper shall use its best efforts to
maintain its recordkeeping system so that Recordkeeping Services are furnished
in a manner which complies with all applicable federal laws and regulations as
are in effect from time to time. The Recordkeeper shall communicate legal
changes and make system and service modifications, where appropriate, to
accommodate such changes. To the extent that any statutory or regulatory change
permits
24
a discretionary response by the Sponsor, the Recordkeeper and the Sponsor shall
agree as to the manner in which any such change will be implemented with respect
to the Plan, and if the Sponsor makes a choice for the Plan that requires
customization of the Recordkeeper's system, the Sponsor shall reimburse the
Recordkeeper for its reasonable cost in making the requested adaptation; in no
event, however, shall the Sponsor be billed for fees pertaining to the
development of the base system used by the Recordkeeper to service its customers
generally.
(i) Errors.
The Recordkeeper will adhere to an error correction policy, which will be made
available to the Sponsor, from time to time, upon request. The Recordkeeper
shall attempt to correct errors resulting from the Sponsor's error, errors by
the Sponsor's employees or officers, as soon as reasonably practicable after
such errors are discovered by the Recordkeeper or the Sponsor (and Sponsor
notifies the Recordkeeper of such). The Sponsor shall reimburse the Recordkeeper
for the actual cost of such corrections.
(j) On-Site Visits.
Upon reasonable notice from the Sponsor, the Sponsor shall be permitted to make
on-site inspection visits of the Recordkeeper's service centers. Such
inspections will be conducted during the Recordkeeper's normal business hours.
(k) Fiduciary Status.
It is the intent of the parties that the Recordkeeper serve in a purely
ministerial capacity and, therefore that the Recordkeeper not serve in fiduciary
capacity or exercise any discretionary authority which would cause the
Recordkeeper to be treated as a fiduciary (within the meaning of Section 3(21)
of ERISA) with respect to the Plan. If and to the extent that, notwithstanding
the previous sentence, the Recordkeeper is deemed to be a fiduciary by a
competent authority, the Recordkeeper agrees to exercise its fiduciary authority
in accordance with the requirements of ERISA, including without limitation, the
requirements of Section 404 and 411 thereof.
(l) Retention of Records.
The Recordkeeper shall maintain and preserve all records in accordance with its
record retention policy.
25
(m) Compliance with Applicable Laws.
The Recordkeeper shall conduct its business in compliance with all applicable
laws and regulations relating to employment and employment practices.
(n) Plan Data.
(i) Prior to the commencement of Recordkeeping Services specified in
this Agreement, the Sponsor shall furnish or cause to be furnished to the
Recordkeeper all information and data in the Sponsor's possession regarding
Participant accounts necessary for the Recordkeeper's performance of the
Recordkeeping Services.
(ii) The Sponsor shall be solely responsible for the accuracy and
completeness of any Plan Data provided to the Recordkeeper by the Sponsor or its
agent. The Sponsor shall promptly furnish or cause to be furnished to
Recordkeeper accurate and complete Plan Data to correct any inaccuracies or
incompleteness with respect to Plan Data previously provided to the Recordkeeper
upon discovery by the Sponsor or request by the Recordkeeper. Upon request, the
Recordkeeper shall assist the Sponsor in correcting or recalculating inaccurate
Plan Data that is provided to the Recordkeeper. The Sponsor may be required to
reimburse the Recordkeeper for the actual cost of such corrections or
recalculations.
(iii) The Recordkeeper shall process the Plan Data provided by the
Sponsor appropriate for its systems. The Sponsor shall review the processed Plan
Data promptly after receipt thereof. The Sponsor shall notify the Recordkeeper
in writing of any error with respect to any Plan Data or report promptly after
discovery thereof.
(iv) All Plan Data is and will remain the property of the Sponsor. The
Plan Data will not be (A) used by the Recordkeeper for any purpose other than
providing the Recordkeeping Services, (B) disclosed, sold, assigned, leased, or
otherwise provided to third parties by the Recordkeeper, or (C) commercially
exploited by or on behalf of the Recordkeeper or any affiliate of the
Recordkeeper, except as authorized by the Sponsor.
(v) At no cost to the Sponsor and upon the Sponsor's reasonable
request, the Recordkeeper shall promptly deliver to the Sponsor, in the format
and on the media in use by the Recordkeeper as of the date of the request, a
standard extract of all Plan Data. At the Sponsor's request,
26
the Recordkeeper shall prepare ad hoc reports (covering a portion of the Plan
Data). The Sponsor shall pay any reasonable fees for such reports.
(o) Recording System.
The Recordkeeper represents to the Sponsor that the the Recordkeeper has all
rights and licenses needed to use the recordkeeping system or systems it employs
to provide all of the Recordkeeping Services as set forth in this Agreement and
to perform its other obligations hereunder without violating any rights of any
third party, and there is currently no actual or threatened suit by any such
third party based on an alleged violation of such rights by the Recordkeeper.
Section 7. Compensation and Expenses.
Sponsor shall pay to Trustee and the Recordkeeper, within thirty (30) days of
receipt of the Trustee's or Recordkeeper's xxxx, the fees for services in
accordance with Schedule "B". Fees for services are specifically outlined in
Schedule "B" and are based on all of the assumptions identified therein. The
Trustee and the Recordkeeper shall maintain their fees for three (3) years;
provided, however, in the event that the Plan characteristics referenced in the
assumptions outlined in Schedule "B" change significantly by either falling
below or exceeding current or projected levels, such fees shall be subject to
revision. To reflect increased operating costs, Trustee and Recordkeeper may
once each calendar year, but not prior to October 1, 2006, amend Schedule "B"
without the Sponsor's consent upon ninety (90) days prior notice to the Sponsor.
All reasonable expenses of plan administration as shown on Schedule "B" attached
hereto, as amended from time to time, shall be a charge against and paid from
the appropriate Participants' accounts, except to the extent such amounts are
paid by the Sponsor in a timely manner.
All expenses of the Trustee and the Recordkeeper relating directly to the
acquisition and disposition of investments constituting part of the Trust, all
taxes of any kind whatsoever that may be levied or assessed under existing or
future laws upon or in respect of the Trust or the income thereof, and any other
reasonable expenses of Plan administration as determined and directed by the
Administrator, shall be a charge against and paid from the appropriate
Participants' accounts.
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Section 8. Directions and Indemnification.
(a) Identity of Administrator and Named Fiduciary.
The Trustee and the Recordkeeper shall be fully protected in relying on the fact
that the Named Fiduciary and the Administrator under the Plan are the
individuals or entities named as such above, or such other individuals or
persons as the Sponsor may notify the Trustee and the Recordkeeper in writing.
(b) Directions from Administrator.
Whenever the Administrator provides a direction to the Trustee and/or the
Recordkeeper, the Trustee and the Recordkeeper shall not be liable for any loss
or expense arising from the direction (i) if the direction is contained in a
writing (or is oral and immediately confirmed in a writing) signed by any
individual whose name and signature have been submitted (and not withdrawn) in
writing to the Trustee and the Recordkeeper by the Administrator in the form
attached hereto as Schedule "D", and (ii) if the Trustee and the Recordkeeper
reasonably believe the signature of the individual to be genuine, unless (on the
part of the Trustee) it is clear on the direction's face that the actions to be
taken under the direction would be prohibited by the fiduciary duty rules of
Section 404(a) of ERISA or would be contrary to the terms of this Agreement or
the Plan as documented in the Plan Administration Manual. For purposes of this
Section, such direction may also be made EDT or other electronic means in
accordance with procedures agreed to by the Administrator, the Trustee and the
Recordkeeper; provided, however, that the Trustee and the Recordkeeper shall be
fully protected in relying on such direction as if it were a direction made in
writing by the Administrator.
(c) Directions from Named Fiduciary.
Whenever the Named Fiduciary or Sponsor provides a direction to the Trustee
and/or the Recordkeeper, the Trustee and the Recordkeeper shall not be liable
for any loss or expense arising from the direction (i) if the direction is
contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee and the Recordkeeper by the Named Fiduciary
in the form attached hereto as Schedule "E" and (ii) if the Trustee and the
Recordkeeper reasonably believe the signature of the individual to be genuine,
unless (on the part of the Trustee) it is clear on the direction's face that the
actions to be taken under the direction would be prohibited by the fiduciary
duty rules of Section 404(a) of ERISA or would be contrary to the terms of this
Agreement or the Plan as documented in the Plan Administration Manual. Such
direction may also be made via EDT or other electronic means in accordance with
procedures agreed to by the Named Fiduciary, the Trustee
28
and the Recordkeeper; provided, however, that the Trustee and the Recordkeeper
shall be fully protected in relying on such direction as if it were a direction
made in writing by the Named Fiduciary.
(d) Co-Fiduciary Liability.
In any other case, the Trustee shall not be liable for any loss or expense
arising from any act or omission of another fiduciary under the Plan except as
provided in section 405(a) of ERISA.
(e) Indemnification.
(i) Indemnification of Trustee. The Sponsor shall indemnify the
--------------------------
Trustee against, and hold the Trustee harmless from, Losses, that may be
incurred by, imposed upon, or asserted against the Trustee by reason of any
claim, regulatory proceeding, or litigation arising from any act done or omitted
to be done by any individual or person with respect to the Plan or Trust,
excepting only any and all Losses arising solely from the Trustee's negligence,
bad faith, breach of fiduciary duty or breach of this Agreement or the
Recordkeeper's negligence, bad faith or breach of this Agreement.
(ii) Indemnification of the Sponsor. The Recordkeeper agrees to
------------------------------
indemnify and hold harmless the Plan and the Sponsor (including any subsidiaries
and affiliates of the Sponsor) and their respective directors, officers,
employees and agents (each an "indemnitee") against any losses, claims, damages,
liabilities or expenses to which an indemnitee may become subject insofar as
those losses, claims, damages, liabilities or expenses (or actions in respect
thereof), arise out of or are based upon (i) the Recordkeeper's willful
misconduct, bad faith or negligence in performing or in failing to perform its
duties and obligations as the Recordkeeper under this Agreement; (ii) any
material breach by the Recordkeeper of its obligations under this Agreement;
(iii) any claim that the system used by the Recordkeeper in providing
Recordkeeping Services violates or infringes any copyright, trade secret, patent
or other intellectual property right of any third party; or (iv) any breach by
the Recordkeeper of a material representation, warranty or covenant contained in
this Agreement; and, except as provided in subsection (h) below, shall reimburse
the indemnities for any legal fees or other expenses reasonably incurred, as
incurred, by them in connection with investigating or defending such loss, claim
or action. This indemnity agreement shall be in addition to any liability which
the Recordkeeper otherwise may have.
(iii) Indemnification of the Recordkeeper. The Sponsor shall indemnify
-----------------------------------
the Recordkeeper against, and hold the Recordkeeper harmless from, Losses, that
may be incurred by, imposed upon, or asserted against the Recordkeeper by reason
of any claim, regulatory proceeding, or litigation arising from any act done or
omitted to be done by any individual or person with respect to the Plan or
Trust, excepting only any and all Losses arising solely from the Recordkeeper's
negligence, bad
29
faith or breach of this Agreement or the Trustee's negligence, bad faith breach
of fiduciary duty or breach of this Agreement.
(f) Option to Defend.
If any third party threatens to commence or commences any action for which one
party (the "Indemnifying Party") may be required to indemnify another person
hereunder (the "Indemnified Party"), the Indemnified Party will promptly give
notice thereof to the Indemnifying Party. The Indemnifying Party will be
entitled, at its own expense and without limiting its obligations to indemnify
the Indemnified Party, to assume control of the defense of such action with
counsel selected by the Indemnifying Party which counsel will be reasonably
satisfactory to the Indemnified Party. If the Indemnifying Party assumes the
control of the defense, the Indemnified Party may participate in the defense of
such claim at its own expense. Without the prior written consent of the
Indemnified Party, which consent will not be unreasonably withheld, the
Indemnifying Party may not settle or compromise the liability of the Indemnified
Party in such action or consent to or permit the entry of any judgment in
respect thereof in payment and without unconditional release in favor of each
Indemnified Party from all liability in respect of such claim.
(g) Standard of Care.
In performing any of the duties agreed to under this Agreement, the Trustee
shall be held to the same standard of care as a fiduciary under ERISA and shall
discharge its duties with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of like
character and with like aims. If the Recordkeeper is deemed to be a fiduciary,
the above standard shall apply in the context and to the extent it is so deemed.
(h) Survival.
The provisions of this Section 8 shall survive the termination of this
Agreement.
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Section 9. Resignation or Removal of Trustee and Recordkeeper and Termination.
(a) Resignation and Removal.
The Trustee and the Recordkeeper may resign at any time in accordance with the
notice provisions set forth below. The Sponsor may remove the Trustee and the
Recordkeeper at any time in accordance with the notice provisions set forth
below.
(b) Termination.
This Agreement may be terminated in full, or with respect to only a portion of
the Plan (i.e., a "partial deconversion") at any time by the Sponsor upon prior
written notice to the Trustee or the Recordkeeper in accordance with the notice
provisions set forth below.
(c) Notice Period.
In the event that the Trustee desires to terminate this Agreement or any
Services hereunder, the Trustee shall provide at least sixty (60) days prior
written notice of the termination date to the Sponsor; provided, however, that
the Sponsor may agree, in writing, to a shorter notice period.
In the event that the Recordkeeper desires to terminate this Agreement or any
Services hereunder, the Recordkeeper shall provide at least one hundred and
eighty (180) days prior written notice of the termination date to the Sponsor;
provided, however, that the Sponsor may agree, in writing, to a shorter notice
period.
In the event that the Sponsor desires to terminate this Agreement or any
Services hereunder, the Sponsor shall provide at least sixty (60) days prior
written notice of the termination date to the Trustee and/or the Recordkeeper;
provided, however, that the receiving party may agree, in writing, to a shorter
notice period.
(d) Transition Assistance.
In the event of termination of this Agreement, if requested by Sponsor, the
Trustee and the Recordkeeper shall assist the Sponsor in developing a plan for
the orderly transition of the Plan data, cash and assets then constituting the
Trust and services provided by the Trustee or the Recordkeeper hereunder to the
Sponsor or its designee. The Trustee and the Recordkeeper shall provide such
assistance for a period not extending beyond sixty (60) days from the
termination date of this Agreement. The Trustee and the Recordkeeper shall
provide to the Sponsor, or to any person designated by the Sponsor, at a
mutually agreeable time, one file of the Plan data prepared and maintained by
the Trustee and the Recordkeeper in
31
the ordinary course of business, in the Trustee's format. The Trustee and the
Recordkeeper may provide other or additional transition assistance as mutually
determined for additional fees, which shall be due and payable by the Sponsor
prior to any termination of this Agreement.
(e) Failure to Appoint Successor.
If, by the termination date, the Sponsor has not notified the Trustee and the
Recordkeeper in writing as to the individual or entity to which the assets and
cash are to be transferred and delivered, the Trustee and the Recordkeeper may
bring an appropriate action or proceeding for leave to deposit the assets and
cash in a court of competent jurisdiction. The Trustee and the Recordkeeper
shall be reimbursed by the Sponsor for all costs and expenses of the action or
proceeding including, without limitation, reasonable attorneys' fees and
disbursements.
(f) Insurance.
The Trustee shall maintain insurance to cover liability or losses occurring by
reason or acts or omissions of fiduciaries, specifically, to cover the
following: losses sustained as the direct result of dishonest or fraudulent acts
committed by its employees; losses which are the result of fraudulent input,
modification or destruction of electronic data media or instructions when
committed by non-employees; and losses resulting from errors or omissions
committed by its employees. Upon request by the Sponsor, the Trustee will
provide a Statement of insurance confirming its liability coverage.
Section 10. Successor Trustee.
(a) Appointment.
If the office of Trustee becomes vacant for any reason, the Sponsor may in
writing appoint a successor trustee under this Agreement. The successor trustee
shall have all of the rights, powers, privileges, obligations, duties,
liabilities, and immunities granted to the Trustee under this Agreement. The
successor trustee and predecessor trustee shall not be liable for the acts or
omissions of the other with respect to the Trust.
(b) Acceptance.
As of the date the successor trustee accepts its appointment under this
Agreement, title to and possession of the Trust assets shall immediately vest in
the successor trustee without any further action on the part of the predecessor
trustee, except as may be required to evidence such transition. The predecessor
trustee
32
shall execute all instruments and do all acts that may be reasonably necessary
and requested in writing by the Sponsor or the successor trustee to vest title
to all Trust assets in the successor trustee or to deliver all Trust assets to
the successor trustee.
(c) Corporate Action.
Any successor to the Trustee or successor trustee, either through sale or
transfer of the business or trust department of the Trustee or successor
trustee, or through reorganization, consolidation, or merger, or any similar
transaction of either the Trustee or successor trustee, shall, upon consummation
of the transaction, become the successor trustee under this Agreement.
Section 11. Resignation, Removal, and Termination Notices.
All notices of resignation, removal, or termination under this Agreement must be
in writing and mailed to the party to which the notice is being given by
certified or registered mail, return receipt requested, to the Sponsor c/o
Retirement Plan Specialist, Liz Claiborne, Inc., Xxx Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, XX 00000, and to the Trustee and the Recordkeeper c/o FESCo Business
Compliance, Contracts Administration, 00 Xxxxxxxxxx Xxxxxx, XX0X, Xxxxxx,
Xxxxxxxxxxxxx 00000, or to such other addresses as the parties have notified
each other of in the foregoing manner.
Section 12. Duration of Trust.
This Trust shall continue in effect without limit as to time, subject, however,
to the provisions of this Agreement relating to amendment, modification, and
termination thereof.
Section 13. Amendment or Modification.
This Agreement may be amended or modified at any time and from time to time only
by an instrument executed by the Sponsor, the Trustee and the Recordkeeper. The
individuals authorized to sign such instrument shall be those authorized by the
Sponsor on Schedule "E."
33
Section 14. Electronic Services.
(a) The Trustee and the Recordkeeper may provide Electronic Services
and/or Electronic Products, including, but not limited to Fidelity Plan Sponsor
WebStation. The Sponsor and its agents agree to use such Electronic Services and
Electronic Products only in the course of reasonable administration of or
participation in the Plan and to keep confidential and not publish, copy,
broadcast, retransmit, reproduce, commercially exploit or otherwise
redisseminate the Electronic Products or Electronic Services or any portion
thereof without the Trustee's and the Recordkeeper's written consent, except, in
cases where Trustee and/or the Recordkeeper has specifically notified the
Sponsor that the Electronic Products or Services are suitable for delivery to
Participants, for non-commercial personal use by Participants or beneficiaries
with respect to their participation in the Plan or for their other retirement
planning purposes.
(b) The Sponsor shall be responsible for installing and maintaining all
Electronic Products, (including any programming required to accomplish the
installation) and for displaying any and all content associated with Electronic
Services on its computer network and/or intranet so that such content will
appear exactly as it appears when delivered to Sponsor. All Electronic Products
and Services shall be clearly identified as originating from the Trustee, the
Recordkeeper or their affiliates. The Sponsor shall promptly remove Electronic
Products or Services from its computer network and/or intranet, or replace the
Electronic Products or Services with updated products or services provided by
the Trustee and the Recordkeeper, upon written notification (including written
notification via facsimile) by the Trustee and/or the Recordkeeper.
(c) All Electronic Products shall be provided to the Sponsor without any
express or implied legal warranties or acceptance of legal liability by the
Trustee and the Recordkeeper , and all Electronic Services shall be provided to
the Sponsor without acceptance of legal liability related to or arising out of
the electronic nature of the delivery or provision of such Services. Except as
otherwise stated in this Agreement, no rights are conveyed to any property,
intellectual or tangible, associated with the contents of the Electronic
Products or Services and related material. The Trustee and the Recordkeeper
hereby grant to the Sponsor a non-exclusive, non-transferable revocable right
and license to use the Electronic Products and Services in accordance with the
terms and conditions of this Agreement.
(d) To the extent that any Electronic Products or Services utilize
internet services to transport data or communications, the Trustee and the
Recordkeeper will take, and Sponsor agrees to follow, reasonable security
precautions, however, the Trustee and the Recordkeeper disclaim any liability
for interception of any such data or communications. The Trustee and the
Recordkeeper reserves the right not to accept data or communications transmitted
via electronic media by the Sponsor or a third party if it
34
determines that the media does not provide adequate data security, or if it is
not administratively feasible for the Trustee and the Recordkeeper to use the
data security provided. The Trustee and the Recordkeeper shall not be
responsible for, and makes no warranties regarding access, speed or availability
of internet or network services, or any other service required for electronic
communication. The Trustee and the Recordkeeper shall not be responsible for any
loss or damage related to or resulting from any changes or modifications to the
Electronic Products or Services after delivering it to the Sponsor.
(e) The Trustee and the Recordkeeper will provide to Participants the
FullViewSM service via NetBenefitsSM, through which Participants may elect to
consolidate and manage any retirement account information available through
NetBenefits as well as External Account Information. To the extent not provided
by the Trustee and the Recordkeeper or their affiliates, the data aggregation
service will be provided by Xxxxxx.xxx, Inc. or such other independent provider
as the Trustee and the Recordkeeper may select, pursuant to a contract that
requires the provider to take appropriate steps to protect the privacy and
confidentiality of information furnished by users of the service. The Sponsor
acknowledges that Participants who elect to use FullViewSM must provide
passwords and PINs to the provider of data aggregation services. The Trustee and
the Recordkeeper will use External Account Information to furnish and support
FullViewSM or other services provided pursuant to this Agreement, and as
otherwise directed by the Participant. The Trustee and the Recordkeeper will not
furnish External Account Information to any third party, except pursuant to
subpoena or other applicable law. The Sponsor agrees that the information
accumulated through FullViewSM shall not be made available to the Sponsor,
provided, however, that the Trustee and the Recordkeeper shall provide to the
Sponsor, upon request, aggregate usage data that contains no personally
identifiable information.
Section 15. Assignment.
This Agreement, and any of its rights and obligations hereunder, may not be
assigned by any party without the prior written consent of the other party(ies),
and such consent may be withheld in any party's sole discretion, however, such
consent shall not be unreasonably withheld. Notwithstanding the foregoing,
Trustee and the Recordkeeper may assign this Agreement in whole or in part, and
any of its rights and obligations hereunder, to a subsidiary or affiliate of
Trustee or the Recordkeeper without consent of the Sponsor. All provisions in
this Agreement shall extend to and be binding upon the parties hereto and their
respective successors and permitted assigns.
35
Section 16. Force Majeure.
No party shall be deemed in default of this Agreement to the extent that any
delay or failure in performance of its obligation(s) results, without its fault
or negligence, from any cause beyond its reasonable control, such as acts of
God, acts of civil or military authority, embargoes, epidemics, war, riots,
insurrections, fires, explosions, earthquakes, floods, unusually severe weather
conditions, power outages or strikes. This clause shall not excuse any of the
parties to the Agreement from any liability which results from failure to have
in place reasonable disaster recovery and safeguarding plans adequate for
protection of all data each of the parties to the Agreement are responsible for
maintaining for the Plan.
Section 17. Confidentiality.
(i) All parties to this Agreement recognize that in the course of
implementing and providing the services described herein, each party may
disclose to the other Confidential Information. All such Confidential
Information, individually and collectively, and other proprietary information
disclosed by any party shall remain the sole property of the party disclosing
the same, and the receiving party shall have no interest or rights with respect
thereto if so designated by the disclosing party to the receiving party. Each
party agrees to maintain all such Confidential Information in trust and
confidence to the same extent that it protects its own proprietary information,
and not to disclose such Confidential Information to any third party without the
written consent of the other party. Each party further agrees to take all
reasonable precautions to prevent any unauthorized disclosure of Confidential
Information. In addition, each party agrees not to disclose or make public to
anyone, in any manner, the terms of this Agreement, except as required by law,
without the prior written consent of the other party.
(ii) Each party shall have the right to disclose Confidential Information
of the other party to a limited number of employees, attorneys, accountants,
auditors or other advisors and its affiliates on a need-to-know basis.
(iii) The obligation to treat information as confidential will not apply to
information which:
(A) is already known at the time of the disclosure;
(B) is publicly known at the time of the disclosure or becomes
publicly known through no wrongful act or failure of any party to the Agreement;
(C) is subsequently disclosed on a non-confidential basis by a third
party not having a confidential relationship with any party to this Agreement
which rightfully acquired such information;
36
(D) is independently developed by a third party;
(E) is required to be disclosed to any governmental agency or is
required by subpoena, summons, order or other judicial process.
(iv) The Trustee and the Recordkeeper agree not to disclose, advertise or
otherwise publish this Agreement or include the name of the Sponsor in any
marketing or sales material (other than lists, verbal communications, proposals,
RFP responses, or similar documents provided by the Recordkeeper to clients or
prospective clients) without the prior consent of the Sponsor.
(v) The provisions of this Section 17 shall survive the termination of
this Agreement.
Section 18. General.
(a) Performance by Trustee and Recordkeeper, their Agents or Affiliates.
The Sponsor acknowledges and authorizes that the services to be provided under
this Agreement shall be provided by the Trustee and the Recordkeeper, their
agents or affiliates, including but not limited to FBSLLC, or the successor to
any of them, and that certain of such services may be provided pursuant to one
or more separate contractual agreements or relationships.
(b) Entire Agreement.
This Agreement together with the schedules attached hereto, which are hereby
incorporated by reference herein, contains all of the terms agreed upon between
the parties with respect to the subject matter hereof.
(c) Waiver.
No waiver by either party of any failure or refusal to comply with an obligation
hereunder shall be deemed a waiver of any other obligation hereunder or any
subsequent failure or refusal to comply with any other obligation hereunder.
(d) Successors and Assigns.
The stipulations in this Agreement shall inure to the benefit of, and shall
bind, the successors and assigns of the respective parties.
37
(e) Partial Invalidity.
If any term or provision of this Agreement or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
(f) Section Headings.
The headings of the various sections and subsections of this Agreement have been
inserted only for the purposes of convenience and are not part of this Agreement
and shall not be deemed in any manner to modify, explain, expand or restrict any
of the provisions of this Agreement.
(g) Communications.
(i) Content
The Sponsor shall provide all information requested by the Trustee to help it
prepare Participant communications necessary to allow the Trustee to meet its
obligations under this Agreement. The Sponsor represents that Participant
communications prepared by the Sponsor will include any information required by
applicable regulations to afford Plan fiduciaries protection under ERISA
ss.404(c). The Trustee shall have no responsibility or liability for any Losses
resulting from the use of information provided by or from communications
prepared by the Sponsor.
(ii) Delivery
In the event that the Sponsor retains any responsibility for delivering
Participant communications to some or all Participants and beneficiaries, the
Sponsor agrees to furnish the communications to such Participants in a timely
manner as determined under applicable law (including ERISA ss.404(c) and the
Xxxxxxxx-Xxxxx Act requirements for "blackout" notices). The Sponsor also
represents that such communications will be delivered to such Participants and
beneficiaries in a manner permitted by applicable law, including electronic
delivery that is consistent with applicable regulations regarding electronic
transmission (for example, DOL Regulation ss.2501.104b-1). The Trustee and its
affiliates shall have no responsibility or liability for any Losses resulting
from the failure of the Sponsor to furnish any such communications in a manner
which is timely and consistent with applicable law.
38
Section 19. Governing Law.
(a) Massachusetts Law Controls.
This Agreement is being made in the Commonwealth of Massachusetts, and the Trust
shall be administered as a Massachusetts trust. The validity, construct, effect
and administration of the Agreement shall be governed by and interpreted in
accordance with the banking laws of the Commonwealth of Massachusetts to the
extent they govern the activities of the Trustee and otherwise in accordance
with the laws of New York, except to the extent those laws are superseded under
section 514 of ERISA..
(b) Agreement Controls.
The Trustee and the Recordkeeper are not parties to the Plan, and in the event
of any conflict between the provisions of the Plan and the provisions of this
Agreement, the provisions of this Agreement shall control.
Section 20. Plan Qualification.
The Plan is intended to be qualified under section 401(a) of the Code and the
Trust established hereunder is intended to be tax-exempt under section 501(a) of
the Code. The Sponsor represents that to the extent Participants are able to
instruct the investment of their account, the Plan is intended to constitute a
plan described in section 404(c) of ERISA and Title 29 of the Code of Federal
Regulations Section 2550.404c-1. A confirmation of the Plan's current qualified
status is attached hereto as Schedule "F," and the Sponsor shall provide proof
of the Plan's continued qualification upon request by the Trustee. The Sponsor
has the sole responsibility for ensuring the Plan's qualified status and full
compliance with the applicable requirements of ERISA. The Sponsor hereby
certifies that it has furnished to the Trustee a complete copy of the Plan and
all amendments thereto in effect as of the date of this Agreement.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
LIZ CLAIBORNE, INC.
By: /s/Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------------
Title: Senior VP Finance, CFO
-----------------------------------
Date: 9/29/03
-----------------------------------
FIDELITY MANAGEMENT TRUST COMPANY
By: /s/Xxxxxxx Xxxx
-----------------------------------
FMTC Authorized Signatory
Name: Xxxxxxx Xxxx
-----------------------------------
Date: 10/9/03
-----------------------------------
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY, INC.
By: /s/Xxxxxxx Xxxx
-----------------------------------
FIIOC Authorized Signatory
Name: Xxxxxxx Xxxx
-----------------------------------
Date: 10/9/03
-----------------------------------
40
SCHEDULES
SCHEDULE "A" - Administrative Services
Administration
--------------
* Establishment and maintenance of Participant account and election
percentages.
* Maintenance of the Plan investment options set forth on Schedule "C."
* Maintenance of the following money classifications:
o 401(k) Tax Saver
o 401(k) Company Match
o After-Tax Buyback
o Profit Sharing
o Prior Profit Sharing
o QNEC
o Rollover
o Catch-Up
o Catch-Up Match
o Lucky Match
o Laundry Match
* The Recordkeeper will provide the recordkeeping and administrative services
set forth on this Schedule "A" or as otherwise agreed to in writing (or by
means of a secure electronic medium) between Sponsor, Trustee and the
Recordkeeper. The Trustee or the Recordkeeper may unilaterally add or
enhance services, provided there is no impact on the fees set forth in
Schedule "B."
A) Participant Services
1. Participant service representatives are available each business day
from 8:30 a.m. ET - 8:00 p.m. in the Participant's time zone in the
continental United States to provide toll free telephone service for
Participant inquiries and transactions.
2. Through the automated voice response system and on-line account access
via the world wide web, Participants also have virtually 24 hour
account inquiry and transaction capabilities.
3. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of a PIN
or such other personal identifier as may be agreed to from time to
time by the Sponsor, the Trustee and the Recordkeeper.
4. The following services are available via the telephone or such other
electronic means as may be agreed upon from time to time by the
Sponsor, the Trustee and the Recordkeeper:
o Enroll new Participants. Confirmation of enrollment will be
provided on-line or if requested, by mail (generally within five
(5) calendar days of the request).
41
o Provide Plan investment option information.
o Provide and maintain information and explanations about Plan
provisions.
o Respond to requests for literature.
o Allow Participants to change their deferral percentages and
establish/change catch-up contributions, if applicable. Provide
updates via EDT for the Sponsor to apply to its payrolls
accordingly.
o Maintain and process changes to Participants' contribution
allocations for all money sources.
o Process exchanges (transfers) between investment options on a
daily basis.
o Process in-service withdrawals due to certain circumstances
previously approved by the Sponsor.
o Process hardship withdrawals due to certain circumstances
previously approved by the Sponsor and in accordance with the
procedures set forth in Schedule "L" attached hereto.
o Consult with Participants on various loan scenarios and generate
all documentation.
B) Plan Accounting
1. Process consolidated payroll contributions according to the Sponsor's
payroll frequency via EDT, consolidated magnetic tape or diskette. The
data format will be provided by Trustee.
2. Maintain and update employee data necessary to support Plan
administration. The data will be submitted according to payroll
frequency.
3. Provide daily Plan and Participant level accounting for all Plan
investment options.
4. Provide daily Plan and Participant level accounting for all money
classifications for the Plan.
5. Audit and reconcile the Plan and Participant accounts daily.
6. Reconcile and process Participant withdrawal requests and
distributions as approved and directed by the Sponsor. All requests
are paid based on the current market values of Participants' accounts,
not advanced or estimated values. A distribution report will accompany
each check.
7. Track individual Participant loans; process loan withdrawals;
re-invest loan repayments; and prepare and deliver comprehensive
reports to the Sponsor to assist in the administration of Participant
loans.
8. Maintain and process changes to Participants' deferral percentage and
prospective and existing investment mix elections.
42
C) Participant Reporting
1. Provide confirmation to Participants of all Participant initiated
transactions either online or via the mail. Online confirms are
generated upon submission of a transaction and mail confirms are
available by mail within three to five calendar days of the
transaction.
2. Provide Participants with opportunity to generate electronic
statements via NetBenefits for activity for the requested time period.
Upon Participant request, Fidelity will provide paper statements to
the Participant via first class mail.
3. Provide Participants with required Code Section 402(f) notification
for distributions from the Plan. This notice advises Participants of
the tax consequences of their Plan distributions.
4. Provide Participants with required Code Section 411(a)(11)
notification for distributions from the Plan. This notice advises
Participants of the normal and optional forms of payment of their Plan
distributions.
D) Plan Reporting
1. Prepare, reconcile and deliver a monthly Trial Balance Report
presenting all money classes and investments. This report is based on
the market value as of the last business day of the month. The report
will be delivered not later than twenty (20) calendar days after the
end of each month in the absence of unusual circumstances.
E) Government Reporting
1. Process year-end tax reports for Participants - Forms 1099-R, as well
as preparation of Form 5500 in accordance with the guidelines set
forth on Schedule "O".
F) Communication & Education Services
1. Design, produce and distribute a customized comprehensive
communications program for employees. The program may include
multimedia informational materials, investment education and planning
materials, access to Fidelity's homepage on the internet and STAGES
magazine. Additional fees for such services may apply as mutually
agreed upon between Sponsor and Trustee.
2. Provide Fidelity PortfolioPlannerSM an internet-based educational
service for Participants that generates target asset allocations and
model portfolios customized to investment options in the Plan based
upon methodology provided by Strategic Advisers, Inc., an affiliate of
the Trustee. The Sponsor acknowledges that it has received the ADV
Part II for Strategic Advisers, Inc. more than 48 hours prior to
executing the Trust agreement.
G) Other
1. Non-Discrimination Testing: Perform non-discrimination limitation
--------------------------
testing upon request. In order to obtain this service, the client
shall be required to provide the information identified in the
Fidelity Discrimination Testing Package Guidelines. Any fees and
restrictions associated with this testing service shall be addressed
in such guidelines.
43
2. Plan Sponsor Webstation: The Fidelity Participant Recordkeeping System
-----------------------
is available on-line to the Sponsor via the Plan Sponsor Webstation.
PSW is a graphical, Windows-based application that provides current
plan and Participant-level information, including indicative data,
account balances, activity and history
3. Change of Address by Telephone: The Trustee shall allow terminated and
------------------------------
retired Participants to make address changes via Fidelity's toll-free
telephone service.
4. De Minimis Distributions: After a Participant terminates employment
------------------------
and is eligible for a distribution, the Trustee through the
Recordkeeper will determine whether the vested account balance exceeds
$5,000, exceeded $5,000 at any prior distribution or in-service
withdrawal date in the account history at Fidelity or exceeds $5,000
at the end of the warning period (at least 30 days, but not more than
70 days, from the determination date). If not, the Trustee through the
Recordkeeper will process a mandatory and immediate cashout, subject
only to the requirement to offer a rollover opportunity. The $5,000
threshold will be determined based on criteria provided by the Sponsor
and will increase or decrease as Congress may from time to time amend
this threshold in Code Section 411(a)(11).
5. Roll-In Processing. The Trustee through the Recordkeeper shall process
------------------
the qualification of rollover contributions to the Trust. The
procedures for qualifying a rollover are directed by the Sponsor and
the Trustee through the Recordkeeper shall accept or deny each
rollover based upon the Plan's written criteria and any written
guidelines provided by the Sponsor and documented in the Plan
Administration Manual.
Requests that do not meet the specified criteria will be returned to
the Participant with further explanation as to why the request cannot
be processed. If the Sponsor or the Trustee through the Recordkeeper
determine that a request is not a valid rollover, the full amount of
the requested rollover will be distributed to the Participant.
6. Minimum Required Distributions: Monitor and process minimum required
------------------------------
distribution ("MRD") amounts as follows: the Trustee through the
Recordkeeper shall notify the MRD Participant and, upon notification
from the MRD Participant, shall use the MRD Participant's information
to process their distribution. If the MRD Participant has terminated
employment and does not respond to the Trustee's notification, the
Sponsor hereby directs the Trustee through the Recordkeeper to
automatically begin the required distribution for the MRD Participant.
In the case of any other MRD Participant who does not respond to the
Recordkeeper's notification, the Recordkeeper shall not proceed with
the distribution.
7. Qualified Domestic Relations Order Processing: The Recordkeeper will
---------------------------------------------
provide Qualified Domestic Relations Order support by supplying
interested parties with plan and benefit information, suspending
payments upon notification that a domestic relations order has been
submitted, and executing all administrative action required by that
order after it has been qualified by the Administrator.
44
LIZ CLAIBORNE, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx 9/29/03 By: /s/ Xxxxxxx Xxxx 10/9/03
-------------------------------- --------------------------------
Date FMTC Authorized Signatory Date
FIDELITY INVESTMENTS
INSTITUTIONAL OPERATIONS
COMPANY, INC.
By: /s/ Xxxxxxx Xxxx 10/9/03
--------------------------------
FIIOC Authorized Signatory Date
45
SCHEDULE "B" - Fee Schedule
Annual Participant Fee: $0 per Participant.
Loan Fee: Establishment fee of $35.00 per loan
account; annual fee of $15.00 per loan
account.
Minimum Required Distribution: $25.00 per Participant per MRD
Withdrawal.
In-Service Withdrawals: $20.00 per withdrawal.
Return of Excess Contribution Fee: $25.00 per Participant, one-time charge
per calculation and check generation.
Non-Fidelity Mutual Funds: Fees paid directly to Fidelity
Investments Institutional Operations
Company, Inc. (FIIOC) or its affiliates
by Non-Fidelity Mutual Fund vendors
shall be posted and updated quarterly on
Plan Sponsor Webstation at
xxxxx://xxx.xxxxxxxx.xxx or a successor
-------------------------
site.
Self Directed Brokerage: Fidelity BrokerageLink Plan Related
-----------------------------------
Account Fee:
------------
Annual Account Fee of $100 per account
within each plan per year. To be
calculated and deducted quarterly from
the SPO if sufficient funds are
available in the SPO. If there are
insufficient funds in the SPO, fees
shall be deducted from the BrokerageLink
Core Account. Fidelity BrokerageLink
Plan account minimum initial investment
is $2,500; subsequent transfer minimum
is $1,000. Brokerage fees and
commissions for individual trades will
be charged in accordance with a separate
commission schedule.
Signature Ready 5500: The standard fee is waived; provided,
however, if all required information is
not received until after 5 1/2months
following the Plan's year-end, there
will be a late processing charge of
$1,000 per Plan affected. Any revisions
requested by the Plan Sponsor after
Fidelity has initially prepared and
submitted the Form 5500 to the
46
Plan Sponsor will be processed at a rate
of $100 per hour.
* Other Fees: Separate charges may apply for extraordinary expenses resulting
from large numbers of simultaneous manual transactions, from errors not
caused by Fidelity, reports not contemplated in this Agreement, corporate
actions, or the provision of communications materials in hard copy which
are also accessible to Participants via electronic services in the event
that the provision of such material in hard copy would result in an
additional expense deemed to be material. Fees for corporate actions will
be negotiated separately, based on the characteristics of the project as
well as the overall relationship at the time of the project.
Stable Value Fees:
-----------------
* Existing Stable Value Fund Administration Fee: 0.05% (5 basis points) on
all existing stable value funds.
* Expenses associated with the custody of assets underlying synthetic
investment contracts will be borne by the portfolio.
Stock Administration Fee:
------------------------
* To the extent that assets are invested in Sponsor Stock, 0.05% (5 basis
points) of such assets in the Trust payable pro rata quarterly on the basis
of such assets as of the calendar quarter's last valuation date, but no
less than $5,000 nor more than $17,500 per year.
Note: These fees have been negotiated and accepted based on the following Plan
----
characteristics: 1 plan in the relationship, current plan assets of $170.6
million, current participation of 5,778 Participants, current assets in
investment contracts of $41.1 million, current stock assets of $17.2 million,
total Fidelity actively managed Mutual Fund assets of $24.8 million, total
Fidelity non-actively managed Mutual Fund assets of $43.0 million, total
Non-Fidelity Mutual Fund assets of $ 40.8 million, Self Directed Brokerage
assets of $3.7 million and projected net cash flows of $7.0 million per year.
Fees will be subject to revision if these Plan characteristics change
significantly by either falling below or exceeding current or projected levels.
Fees also have been based on the use of up to 16 investment options, and such
fees will be subject to revision if additional investment options are added.
47
LIZ CLAIBORNE, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx 9/29/03 By: /s/ Xxxxxxx Xxxx 10/9/03
-------------------------------- --------------------------------
Date FMTC Authorized Signatory Date
FIDELITY INVESTMENTS
INSTITUTIONAL OPERATIONS
COMPANY, INC.
By: /s/ Xxxxxxx Xxxx 10/9/03
--------------------------------
FIIOC Authorized Signatory Date
48
SCHEDULE "C" - Investment Options
In accordance with Section 5(b), the Named Fiduciary hereby directs the
Trustee that Participants' individual accounts may be invested in the following
investment options:
o Liz Claiborne Company Stock Fund
o Managed Income Fund
o BrokerageLink(R)
o Fidelity Freedom 2000 Fund(R)
o Fidelity Freedom 2010 Fund(R)
o Fidelity Freedom 2020 Fund(R)
o Fidelity Freedom 2030 Fund(R)
o Fidelity Freedom 2040 Fund(R)
o Fidelity Freedom Income Fund(R)
o Fidelity U.S. Bond Index Fund
o Spartan(R) U.S. Equity Index Fund
x Xxxxx Mid Cap Growth Institutional Portfolio - Institutional Class
o Growth Fund of America - Class R4
x Xxxxxx Xxxxxxx Institutional Fund, Inc. - International Equity
Portfolio - Class B
o Royce Total Return Fund
o The Oakmark Fund - Class I
The Named Fiduciary hereby directs that the investment option referred to
in Section 5(c) and Section 5(e)(vi)(B)(5) shall be Managed Income Fund.
LIZ CLAIBORNE, INC.
By: /s/ Xxxxxxx Xxxxxx 9/29/03
-------------------------------------
Date
49
SCHEDULE "D" - Authorized Signers (Administrator)
[Sponsor's Letterhead]
[Date]
Xx. Xxxxxxx Xxxxxx
FESCo Business Compliance
Contracts Administration
00 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxx, XX 00000
[Name of Plan]
--------------
*** NOTE: This schedule should contain names and signatures for
ALL individuals who will be providing directions to Fidelity
representatives in connection with the Plan.
Fidelity representatives will be unable to accept directions from
any individual whose name does not appear on this schedule.***
Dear Xxxxxx:
This letter is sent to you in accordance with Section 8(b) of the Trust
Agreement, dated as of [date], among [name of Plan Sponsor] and Fidelity
Management Trust Company and Fidelity Investments Institutional Operations
Company, Inc. [I or We] hereby designate [name of individual], [name of
individual], and [name of individual], as the individuals who may provide
directions on behalf of the Administrator upon which Fidelity Management Trust
Company and Fidelity Investments Institutional Operations Company, Inc. shall be
fully protected in relying. Only one such individual need provide any direction.
The signature of each designated individual is set forth below and certified to
be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[SPONSOR]
By:
[signature of designated individual]
-----------------------------------
[name of designated individual]
[signature of designated individual]
-----------------------------------
[name of designated individual]
[signature of designated individual]
-----------------------------------
[name of designated individual]
50
SCHEDULE "E" - Authorized Signers (Named Fiduciary)
[Sponsor's Letterhead]
[Date]
Xx. Xxxxxxx Xxxxxx
FESCo Business Compliance
Contracts Administration
00 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxx, XX 00000
[Name of Plan]
--------------
*** NOTE: This schedule should contain names and signatures for
ALL individuals who will be providing directions to Fidelity
representatives in connection with the Plan.
Fidelity representatives will be unable to accept directions from
any individual whose name does not appear on this schedule.***
Dear Xx. Xxxxxx:
This letter is sent to you in accordance with Section 8(c) of the Trust
Agreement, dated as of [date], among [name of Plan Sponsor] and Fidelity
Management Trust Company and Fidelity Investments Institutional Operations
Company, Inc. [I or We] hereby designate [name of individual], [name of
individual], and [name of individual], as the individuals who may provide
directions on behalf of the Named Fiduciary upon which Fidelity Management Trust
Company and Fidelity Investments Institutional Operations Company, Inc. shall be
fully protected in relying. Only one such individual need provide any direction.
The signature of each designated individual is set forth below and certified to
be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
[SPONSOR]
By
[signature of designated individual]
-----------------------------------
[name of designated individual]
[signature of designated individual]
-----------------------------------
[name of designated individual]
[signature of designated individual]
-----------------------------------
[name of designated individual]
51
SCHEDULE "F" - Statement of Qualified Status
[Law Firm Letterhead]
**Note: This Schedule is not necessary if the Plan's IRS determination letter is
not more than two (2) years old.
Xx. Xxxxxxx Xxxxxx
FESCo Business Compliance
Contracts Administration
00 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxx, XX 00000
[Name of Plan]
--------------
Dear Xx. Xxxxxx:
In accordance with your request, this letter sets forth our opinion with
respect to the qualified status under section 401(a) of the Internal Revenue
Code of 1986 (including amendments made by the Employee Retirement Income
Security Act of 1974) (the "Code"), of the [name of plan], as amended to the
date of this letter (the "Plan").
The material facts regarding the Plan as we understand them are as follows.
The most recent favorable determination letter as to the Plan's qualified status
under section 401(a) of the Code was issued by the [location of Key District]
District Director of the Internal Revenue Service and was dated [date] (copy
enclosed). The version of the Plan submitted by [name of company] (the
"Company") for the District Director's review in connection with this
determination letter did not contain amendments made effective as of [date].
These amendments, among other matters, [brief description of amendments].
[Subsequent amendments were made on [date] to amend the provisions dealing with
[brief description of amendments].]
The Company has informed us that it intends to submit the Plan to the
[location of Key District] District Director of the Internal Revenue Service and
to request from him a favorable determination letter as to the Plan's qualified
status under section 401(a) of the Code. The Company may have to make some
modifications to the Plan at the request of the Internal Revenue Service in
order to obtain this favorable determination letter, but we do not expect any of
these modifications to be material. The Company has informed us that it will
make these modifications.
Based on the foregoing statements of the Company and our review of the
provisions of the Plan, it is our opinion that the Internal Revenue Service will
issue a favorable determination letter as to the qualified status of the Plan,
as modified at the request of the Internal Revenue Service, under section 401(a)
of the Code, subject to the customary condition that continued qualification of
the Plan, as modified, will depend on its effect in operation.
[Furthermore, in that the assets are in part invested in common stock
issued by the Company or an affiliate, it is our opinion that the Plan is an
"eligible individual account plan" (as defined under Section 407(d)(3) of ERISA)
and that the shares of common stock of the Company held and to be purchased
under the Plan are "qualifying employer securities" (as defined under Section
407(d)(5) of ERISA). Finally, it is our opinion that interests in the Plan are
not required to be registered under the Securities Act of 1933, as amended, or,
if such registration is required, that such interests are effectively registered
under said Act.]
52
Sincerely,
[name of law firm]
By: [signature]
-----------
[name of partner]
53
SCHEDULE "G" - Existing Stable Value Funds
A. In accordance with Section 5(b), the Named Fiduciary hereby directs the
Trustee to continue to hold the following existing stable value fund until such
time as the Named Fiduciary directs otherwise. FMTC agrees to act as directed
trustee for the following existing stable value fund and such other assets or
securities as evidenced by the certified trustee statement where FMTC has
assumed custodianship:
-- Issuer: American Express Trust Company
-- Name: American Express Trust Income Fund II
LIZ CLAIBORNE, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx 9/29/03 By: /s/ Xxxxxxx Xxxx 10/9/03
--------------------------------- -----------------------------------
Date FMTC Authorized Signatory Date
54
SCHEDULE "H" - Exchange Guidelines
The following exchange guidelines are currently employed by FIIOC.
Participants may initiate exchanges, via a Fidelity Participant service
representative, from 8:30 a.m. (ET) to 8:00 p.m. in the Participant's time zone
in the continental United States on each Business Day.
Participants may initiate exchanges, via VRS and the internet (NetBenefitsSM)
virtually 24 hours a day.
FIIOC reserves the right to change these exchange guidelines at its discretion.
Note: The NYSE's normal closing time is 4:00 p.m. (ET); in the event the NYSE
closes before such time or alters its closing time, all references below to 4:00
p.m. (ET) shall mean the actual or altered closing time of the NYSE.
General Rule for Plan Investment Options
----------------------------------------
Exchanges Between Plan Investment Options
-----------------------------------------
Except as otherwise described below, exchanges between Plan investment
options are processed on a daily cycle, market conditions permitting.
Participants may contact Fidelity on any day to initiate an exchange
between the Plan's investment options. If the request is confirmed
before the close of the market (generally 4:00 p.m. (ET)), on a
Business Day, it will receive that day's trade date. Requests
confirmed after the close of the market on a Business Day (or on any
day other than a Business Day) will be processed on a next Business
Day basis.
Exceptions or Other Restrictions
--------------------------------
Sponsor Stock:
-------------
Provided that the Sponsor Stock Fund is open for purchases and sales
of units, the following rules will govern exchanges:
o Exchanges From Other Plan Investment Options into Sponsor Stock
---------------------------------------------------------------
Participants may contact Fidelity on any day to initiate an exchange
into Sponsor Stock from another Plan investment option. If the request
is confirmed before the close of the market (generally 4:00 p.m.
(ET)), on a Business Day, it will receive that day's trade date.
Requests confirmed after the close of the market on a Business Day (or
on any day other than a Business Day) will be processed on a next
Business Day basis.
55
o Exchanges From Sponsor Stock into Other Plan Investment Options
---------------------------------------------------------------
If Fidelity receives the request before the close of the market on any
Business Day and Available Liquidity is sufficient to honor the trade
after Specified Hierarchy rules are applied, it will receive that
day's trade date. Requests received by Fidelity after the close of the
market on any Business Day (or on any day other than a Business Day)
will be processed on a next Business Day basis, subject to Available
Liquidity for such day after application of Specified Hierarchy rules.
If Available Liquidity on any day is insufficient to honor the trade
after application of Specified Hierarchy rules, it will be suspended
until Available Liquidity is sufficient, after application of
Specified Hierarchy rules, to honor such trade, and it will receive
the trade date and Closing Price of the date on which it was
processed.
Competing Fund Restriction:
--------------------------
o Equity Wash
-----------
Participants will not be permitted to make direct transfers between the
Managed Income Fund into a competing fund. Participants who wish to
exchange between the Managed Income Fund into a competing fund must first
exchange into a non-competing fund for a period of 90 days.
BrokerageLink Option:
---------------------
o Exchanges from Investment Options (Standard Plan Option) into BrokerageLink
---------------------------------------------------------------------------
Option
------
If a request to exchange into BrokerageLink is confirmed before the
close of the market (generally 4:00 p.m. ET) on any Business Day, the
SPO investment option redemption will receive that day's trade date.
The purchase into the BrokerageLink Core Account, Fidelity Cash
Reserves, will receive the next Business Day's trade date. Requests
confirmed after the close of the market on a Business Day will be
processed on a next Business Day basis.
Although there is a one day lag in the trade date of the purchase into
the BrokerageLink Core Account, Participants can trade in their
BrokerageLink account prior to the actual exchanged assets being
credited to the BrokerageLink Core Account, if the Participant
initiates the exchange via a Participant services representative.
Participants who initiate an exchange will have 90% of the assets
immediately available to trade through a brokerage representative. The
next Business Day 100% of the exchanged amount will be available for
trading through a brokerage representative, FAST or the world wide web
(Xxxxxxxx.xxx).
56
o Exchanges from BrokerageLink Option into Mutual Funds (Standard Plan
--------------------------------------------------------------------
Option)
-------
Each Plan must designate a SPO Option as the default fund to which all
exchanged assets from BrokerageLink to SPO are credited. Participants
will have no choice as to where these assets are invested upon
transfer from the FBSLLC system. If a Participant wants to reallocate
to other investment options, he/she must call after they have been
credited to Fidelity's Participant Recordkeeping System ("FPRS").
A Participant may call on any Business Day to transfer from their
BrokerageLink account to their SPO default fund. Participants must
speak to a brokerage representative to exchange from their
BrokerageLink account into the SPO. The transfer will involve a
redemption from the BrokerageLink Core Account (Fidelity Cash
Reserves). If the request is confirmed before the close of market on a
Business Day, the BrokerageLink Core Account redemption will receive
that day's trade date. The purchase into the SPO default fund will
receive that day's trade date. Requests confirmed after the close of
the market on a Business Day (or on any day other than a Business Day)
will be processed on a next Business Day basis.
When placing the sell order in his/her BrokerageLink account, the
Participant may not request that upon settlement of the sell, assets
be transferred from BrokerageLink to the SPO default fund. The
Participant must call back after each settlement to transfer funds
from Fidelity Cash Reserves into the SPO default fund.
LIZ CLAIBORNE, INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
---------------------------
Title: Senior VP Finance, CFO
--------------------------
Date: 9/29/03
---------------------------
57
SCHEDULE "I" - Operational Guidelines for Non-Fidelity Mutual Funds
Pricing
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual Fund
Vendor (Fund Vendor) will transmit the following information ("Price
Information") to FIIOC: (1) the NAV for each Fund prior to the close of trading
on the New York Stock Exchange ("Close of Trading"), (2) the change in each
Fund's NAV from the Close of Trading on the prior Business Day, (3) in the case
of an income fund or funds, the daily accrual for interest rate factor ("mil
rate"), and (4) on ex dividend date, if applicable, dividend and capital gain
information. FIIOC must receive Price Information each Business Day. If on any
Business Day the Fund Vendor does not provide such Price Information to FIIOC,
FIIOC shall pend all associated transaction activity in the Plan until the
relevant Price Information is made available by Fund Vendor.
Trade Activity and Wire Transfers
Each Business Day following Trade Date ("Trade Date plus One"), FIIOC or
National Financial Services Corporation LLC ("NFS"), an affiliate of FIIOC, will
provide, via facsimile, to the Fund Vendor a consolidated report of net purchase
or net redemption activity that occurred in each of the Funds at the Close of
Trading on the prior Business Day. The report will reflect the dollar amount of
assets and shares to be invested or withdrawn for each Fund. FIIOC or NFS will
transmit this report to the Fund Vendor each Business Day, regardless of
processing activity. In the event that data contained in the facsimile
transmission represents estimated trade activity, FIIOC or NFS shall provide a
final facsimile to the Fund Vendor. Any resulting adjustments shall be processed
by the Fund Vendor at the net asset value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC or NFS transaction confirms
for all daily activity in each of the Funds. The Fund Vendor shall also send via
regular mail to FIIOC or NFS, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC and NFS agree to
notify the Fund Vendor of any balance discrepancies within twenty (20) Business
Days of receipt of the monthly statement.
For purposes of wire transfers, FIIOC or NFS shall transmit a daily wire for
aggregate purchase activity and the Fund Vendor shall transmit a daily wire for
aggregate redemption activity, in each case including all activity across all
Funds occurring on the same day.
Prospectus Delivery
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Participants, and shall retain
the services of a third-party vendor to handle such mailings. The Fund Vendor
shall be responsible for all materials and production costs, and agrees to
provide the Required Materials to the third-party vendor selected by FIIOC. The
Fund Vendor shall bear the costs of mailing annual Fund reports to Participants.
FIIOC shall bear the costs of mailing prospectuses to Participants.
58
Proxies
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a third-party
vendor to handle proxy solicitation mailings and vote tabulation. Expenses
associated with such services shall be billed directly to the Fund Vendor by the
third-party vendor.
Participant Communications
The Fund Vendor shall provide internally-prepared fund descriptive information
approved by the Funds' legal counsel for use by FIIOC in its written Participant
communication materials. FIIOC shall utilize historical performance data
obtained from third-party vendors (currently Morningstar, Inc., FACTSET Research
Systems and Lipper Analytical Services) in telephone conversations with
Participants and in quarterly Participant statements. The Sponsor hereby
consents to FIIOC's use of such materials and acknowledges that FIIOC is not
responsible for the accuracy of such third-party information. FIIOC shall seek
the approval of the Fund Vendor prior to retaining any other third-party vendor
to render such data or materials under this Agreement.
Compensation
FIIOC shall be entitled to fees as set forth in a separate agreement with the
Fund Vendor.
59
Schedule "J" - Securities That May Be Purchased Under the BrokerageLink Option
Fidelity Mutual Funds
Fundsnetwork(R) Funds
60
SCHEDULE "K" - BrokerageLink Administrative Procedures
This Schedule spells out the actions that FIIOC or its successor will take to
rectify various situations that might arise in BrokerageLink accounts as an
option in the Plan(s). By signing this Schedule, the Plan agrees to the terms of
this Schedule as standing instructions for FIIOC to take the appropriate action
to comply with the Trust document and to facilitate customer service and
operations processing.
General
As necessary, FIIOC will initiate a transaction in the Participant's
BrokerageLink Core Account to rectify a situation in the Participant's SPO.
FIIOC will initiate a sell trade in the Participant's BrokerageLink security
position, if the terms of the Trust agreement have been violated. In the case
where FIIOC initiates a sell trade to collect account fees FIIOC will look to
the BrokerageLink Core Account. In problem resolution situations that are not
violations of the Trust agreement, then FIIOC will look to the Sponsor for
direction with regard to the Participant's BrokerageLink account. The
Participant will be notified of these transactions by a confirmation.
All purchases or sales of individual securities must be made by FBSLLC.
Participants must complete and submit a BrokerageLink application prior to the
transfer of any funds into BrokerageLink.
Unsecured debit or overdraft
If there is an unsecured debit or overdraft, then FIIOC will place a sell trade
order(s) in the Participant's BrokerageLink account to raise enough cash to
cover the unsecured debit or overdraft. The securities that will be sold will be
selected on a last in - first out basis. Only enough shares/par of the
security(ies) will be sold to cover the unsecured debit or overdraft. Any trade
related expenses (commissions, other fees) and realized gain or loss will be
borne by the Participant. The Participant will be notified of these transactions
by a confirmation.
Restricted sources
A Plan may restrict sources from being transferred to BrokerageLink. If FIIOC
identifies any restricted source assets that have been transferred to
BrokerageLink, then FIIOC will take action to return the original transferred
amount related to the restricted source(s) to SPO.
61
If there are enough assets in the Participant's BrokerageLink Core Account, then
FIIOC will initiate a trade order to transfer the assets from the BrokerageLink
Core Account to SPO. The assets will be credited to the SPO default fund. The
Participant will be notified of these transactions by a confirmation.
If there are not enough assets, FIIOC will place a sell trade order(s) in the
Participant's BrokerageLink account to raise enough cash to cover the restricted
source assets. The securities that will be sold will be selected on a last in -
first out basis. Only enough shares/par of the security(ies) will be sold to
cover the restricted source assets. Any trade related expenses (commissions,
other fees) and realized gain or loss will be borne by the Participant. The
assets will be returned to the SPO default fund. The Participant will be
notified of these transactions by a confirmation.
Non-vested assets
A Plan may restrict non-vested assets from being transferred to BrokerageLink.
If FIIOC identifies any non-vested assets that have been transferred to
BrokerageLink, then FIIOC will take action to return the original transferred
amount related to the non-vested assets to SPO.
If there are enough assets in the Participant's BrokerageLink Core Account, then
FIIOC will initiate a trade order to transfer the assets from the BrokerageLink
Core Account to SPO. The assets will be credited to the SPO default fund. The
Participant will be notified of these transactions by a confirmation.
If there are not enough assets, FIIOC will place a sell trade order in the
Participant's BrokerageLink account to raise enough liquid assets to cover the
non-vested assets. The securities that will be sold will be selected on a last
in - first out basis. Only enough shares/par of the security(ies) will be sold
to cover the non-vested assets. Any trade related expenses (commissions, other
fees) and realized gain or loss will be borne by the Participant. The assets
will be returned to the SPO default fund. The Participant will be notified of
these transactions by a confirmation.
Restricted or ineligible securities
The Plan has designated that certain securities or security types be restricted
from being purchased by Participants. If FIIOC identifies a restricted security
that has been purchased by a Participant, then FIIOC will place a sell trade
order in the Participant's BrokerageLink account to remove that security from
the Plan. Any trade related expenses (commissions, other fees) and realized gain
or loss will be borne by the Participant. The liquidated assets will be credited
to the BrokerageLink Core Account. The Participant will be notified of these
transactions by a confirmation.
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Unauthorized channel deposits
Participants may deposit money into their BrokerageLink account only through the
SPO recordkeeping system. A Participant may not deposit money to the
BrokerageLink account by any other means than payroll deduction to the SPO.
Money that is deposited to the BrokerageLink account in any other way is
considered to be an unauthorized channel.
If money is deposited to a BrokerageLink account via an unauthorized channel,
then FIIOC will initiate the removal of that money. If there are enough assets
in the Participant's BrokerageLink Core Account, then FIIOC will request that a
check be cut in the amount of the original deposit. The check will be mailed to
the Participant.
If there are not enough assets in the Participant's BrokerageLink Core Account,
then FIIOC will place a sell trade order(s) in the Participant's BrokerageLink
account to raise enough liquid assets to cover the unauthorized channel deposit.
The securities that will be sold will be selected on a last in - first out
basis. Only enough shares/par of the security(ies) will be sold to cover the
unauthorized channel deposit. Any trade related expenses (commissions, other
fees) and realized gain or loss will be borne by the Participant. Once the sell
transactions have settled, FIIOC will request that a check be cut for the
original amount. The check will be mailed to the Participant.
Unauthorized channel withdrawals
Participants may withdraw money from their BrokerageLink account only through
the SPO recordkeeping system (FPRS). A Participant may not withdraw money from
the BrokerageLink account by any other means than by speaking to a Fidelity
phone representative. Money that is withdrawn from the BrokerageLink account in
any other way is considered to be an unauthorized channel.
If money is withdrawn through an unauthorized channel, FIIOC will contact the
Participant and request that the withdrawn assets be returned to FIIOC. FIIOC
will redeposit the assets in the Participant's BrokerageLink account.
Non-discrimination testing
If a distribution of excess contribution (all are not excess contributions -
this term is meant as catch-all) needs to be made from a Participant's
retirement savings account due to discrimination testing reasons, FIIOC will
first look to SPO for available assets. If there are not enough assets in SPO,
then FIIOC will look to the BrokerageLink account.
If there are ample assets in the Participant's BrokerageLink Core Account, then
FIIOC will initiate the transfer of the assets to the SPO default fund. The
distribution of excess contributions will then be made from SPO according to the
appropriate hierarchy.
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Qualified Domestic Relation Orders ("QDRO's")
FIIOC will comply with the terms of the QDRO. If a BrokerageLink account is
involved in a QDRO situation, then FIIOC will take direction from the Sponsor as
to the actions to be taken with regards to potentially splitting the
BrokerageLink account.
Deaths
FIIOC will comply with the terms of the applicable legal documents in the event
of a Participant death. If an BrokerageLink account is involved in a death, then
FIIOC will take direction from the Sponsor as to the action to be taken with
regards to any potential activity in the BrokerageLink account.
Systematic Withdrawal Payments/Minimum Required Distributions
All withdrawals, systematic or otherwise, are debited from the Participant's
SPO. If a Participant wants their balances in BrokerageLink included in the
withdrawal they must move all balances out of brokerage and into the SPO.
Fees
All Plan related fees that are paid by the Participant are debited from the
Participant's SPO. If there are not enough assets in SPO to pay fees of any
nature, then FIIOC will look to the BrokerageLink account.
If there are ample assets in the Participant's BrokerageLink Core Account, then
FIIOC will initiate the transfer of the fee plus 10% , to cover market value
fluctuations, to the SPO default fund to cover the current fees.
LIZ CLAIBORNE, INC.
By /s/ Xxxxxxx Xxxxxx 9/29/03
------------------------------------
Date
64
SCHEDULE "L" - Operational Procedures for Hardship Withdrawals by Phone
1. The Participant calls the Trustee to request a hardship withdrawal.
2. Assuming the Participant has met initial Plan requirements, the Participant
Services Representative enters the hardship request.
Plan requirements are as follows:
o The individual is an active Participant with an available pre-tax
balance;
o All other non-hardship, in-service withdrawals have been made
(including from protected sources and age 59 1/2 withdrawals);
o All loanable assets have been exhausted;
o The Participant declares that the hardship withdrawal meets one of the
IRS's four safe harbor provisions.
3. The Trustee mails the hardship withdrawal application and procedures to the
Participant's home.
4. The Participant adheres to the following procedures to execute the
transaction:
o Reviews the application carefully and notes the expiration date.
o Signs the application and procedures page.
o Makes copies of the required documentation noted on the second page of
the procedures.
o Submits the signed application, signed procedures and required
documentation to:
Regular Mail:
Fidelity Investments
Liz Claiborne, Inc.
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Overnight Mail:
Fidelity Investments
Liz Claiborne, Inc.
000 Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
5. The Trustee receives the Participant's application and reviews it for the
Participant's signature and required documentation.
65
The required documentation includes one of the following:
o Purchase (excluding mortgage payments) of primary residence
A copy of the Purchase and Sale Agreement signed by both the buyer and
seller, or a copy of the Construction Contract for new construction
and a copy of estimated closing costs.
o Payment of tuition for the next year of post-secondary education for
the Participant, his/her spouse, children or dependents.
A copy of the xxxx from the educational institution or a letter from
the educational institution (must be on the school's letterhead)
attesting to the fact the student is enrolled for the next 12 months
and providing the costs for tuition, room and board, and books.
o Payment of deductible medical or dental expenses not covered by
insurance for the Participant, his/her spouse, children or dependents
An Explanation of Benefits (EOB) form from the Participant's insurance
carrier, or a copy of the letter from the Participant's HMO, detailing
any out-of pocket deductibles, copayments or denial of coverage for
services rendered.
o Payment needed to prevent eviction under the terms of a lease
agreement or foreclosure on the mortgage of the Participant's primary
residence.
A Notice of Eviction or Foreclosure in writing from the landlord or
mortgage holder, including the amount in arrears that must be paid in
order to avoid eviction or foreclosure.
6. If the application and documentation meet the requirements, the
Trustee will execute the transaction and mail the check directly to
the Participant's home.
7. If the application and documentation do not meet the requirements, the
Trustee will send a letter to the Participant indicating that the
hardship request was rejected and the reason for rejection (i.e. no
signature, improper documentation).
8. If the Trustee is unsure whether the Participant's documentation meets
the requirements, the Trustee will forward the hardship request to the
Sponsor for direction (written approval or rejection).
9. Suspensions shall be processed in accordance with the Plan
Administration Manual.
LIZ CLAIBORNE, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
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SCHEDULE "M" - Available Liquidity Procedures for Unitized Stock Fund
The following procedures shall govern sales of the Sponsor Stock Fund requested
for a day on which Available Liquidity is insufficient:
1. Loans, withdrawals and distributions will be aggregated and placed first in
the hierarchy. If Available Liquidity is sufficient for the aggregate of
such transactions, all such loans, withdrawals and distributions will be
honored. If Available Liquidity is not sufficient for the aggregate of such
transactions, then such transactions will be suspended, and no transactions
requiring the sale of Sponsor Stock Fund units shall be honored for that
day.
2. If Available Liquidity has not been exhausted by the aggregate of loans,
withdrawals and distributions, then all remaining transactions involving a
sale of units in the Sponsor Stock Fund (exchanges out) shall be grouped on
the basis of when such requests were received, in accordance with standard
procedures maintained by the Trustee for such grouping as they may be
amended from time to time. To the extent of Available Liquidity, groups of
exchanges out of the Sponsor Stock Fund shall be honored, by group, on a
FIFO basis. If Available Liquidity is insufficient to honor all exchanges
out within a group, then none of the exchanges out in such group shall be
honored, and no exchanges out in a later group shall be honored.
3. Transactions not honored on a particular day due to insufficient Available
Liquidity shall be honored, using the hierarchy specified above, on the
next business day on which there is Available Liquidity.
67
SCHEDULE "N" - Operating Procedures for the Managed Income Fund of the Liz
Claiborne 401(K) Savings & Profit Sharing Plan
I. Description of Investment Option
The Managed Income Fund (the "Portfolio") will be comprised of units in the
Colchester Street Trust: Money Market Portfolio: Class I ("STIF") if
required as described below, units in the Fidelity Group Trust for Employee
Benefit Plans Managed Income Portfolio II ("MIP2"), and units in the
existing American Express Trust Income Fund II purchased prior to the
effective date of the Trust Agreement between Fidelity Management Trust
Company (the "Trustee") and Liz Claiborne (the "Sponsor").
II. Investment Option Transactions
All transactions for the Portfolio will be coordinated by the Trustee based
on the procedures outlined in this document.
III. Valuation
The Trustee will value the Portfolio at a net asset value of $1 per share,
on a daily basis and produce a blended mil rate to reflect the net income
earned by the Portfolio.
Income will accrue in accordance with the actual crediting rate practices
of each underlying asset in the Portfolio. Accrued interest will be posted
to participant accounts at month end.
IV. Money Movement
All money transfers to and from the Portfolio will be made through the
STIF. At such time that Portfolio assets in MIP2 are equal to or greater
than 20% then the STIF will be removed and henceforth all money transfers
to and from the Portfolio will be made through MIP2. If at anytime the
percentage of Portfolio assets invested in MIP2 falls below 5% a STIF will
be reintroduced to the Portfolio. This STIF will remain in place until the
percentage of Portfolio assets invested in MIP2 increase to or are above
20%. If a STIF is utilized then all money transfers to and from the
Portfolio will be made through the STIF portion of the Portfolio. Plan
level transactions representing cumulative participant level transactions
will update nightly to the STIF portion to ensure next day settlement of
all transactions.
V. STIF Management
The Sponsor will maintain approximately 3% of the Portfolio in STIF if the
Portfolio assets in the MIP2 position are less than 20% initially. Once the
20% threshold is reached a STIF is not required unless the Portfolio assets
subsequently drop to below 5%. If a STIF is required the Trustee will
monitor the cashflows and the balance of the STIF portion. If the STIF
balance exceeds 3%, the Trustee will transfer the excess to the MIP2. If
the STIF balance falls below 3%, the Trustee will request money first from
MIP2 then from the American Express Trust Income Fund II to replenish the
balance to 3%. The STIF percentage may be unilaterally modified by the
Trustee if it is determined that the STIF cash policy is not sufficient to
maintain cash liquidity in a daily environment.
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VI. Investment Contract Maturities
The proceeds from the liquidation of units in the American Express Trust
Income Fund II will be transferred to MIP2 unless a STIF component is
required. If the Portfolio requires a STIF then proceeds from the
liquidation of units in the American Express Trust Income Fund II will be
transferred to the STIF portion of the Portfolio for subsequent
reinvestment in accordance with Section V. The Trustee will provide wiring
instructions to the investment contract carriers.
VII. Reconciliation
The Fidelity Participant Recordkeeping System ("FPRS") will be reconciled
to the Managed Income Group Accounting System ("GUIDE") on a daily and
monthly basis. The investment contract portion will be reconciled on GUIDE
to the carrier balances on a monthly basis.
VIII. Fee Collection for Accounting Services
Accounting fees for the Portfolio will accrue daily and be deducted from
the portfolio on a monthly basis.
IX. Changes to the Schedule
This Schedule may be amended or modified at any time and from time to time
only by an instrument executed by both the Trustee and the Sponsor.
X. Discontinuance of Accounting Services
The Trustee will discontinue accounting services for the Portfolio upon the
earlier of the date all participant balances in the Portfolio are exchanged
or withdrawn, the termination of this agreement or the final liquidation of
the units in the American Express Trust Income Fund II.
LIZ CLAIBORNE, INC. FIDELITY MANAGEMENT TRUST
COMPANY
By: /s/ Xxxxxxx Xxxxxx 9/29/03 By: /s/ Xxxxxxx Xxxx 10/9/03
---------------------------------- ----------------------------
Date Date
69
SCHEDULE "O" - Form 5500 Service
Effective for the Signature Ready Form 5500 Service ("Service") and the Summary
Annual Report ("SAR") prepared for plan year ending December 31, 2003 and
thereafter, Fidelity Management Trust Company ("Fidelity") agrees to provide
this Service, in accordance with the following:
The Sponsor hereby agrees to:
* Submit the following required information ("Required Information")
annually:
- Completed plan questionnaire ("Questionnaire");
- Draft or final copy of the audited financial statements; and
- Copy of the prior year Form 5500 filed with the Department of
Labor (DOL) (applicable only if Fidelity did not prepare the
plan's prior year Form 5500)
* Provide Fidelity with the Required Information, in the format
requested by Fidelity, as soon as possible after the plan's year end -
but in no event later than the last day of the 8th month following the
plan's year-end (assuming a filing extension has been requested);
* Authorize Fidelity to prepare and execute IRS Form 5558 (Application
for Extension) on behalf of the Plan Administrator and file Form 5558
with the IRS in order to obtain an extension of the filing deadline in
the event that Fidelity has not received a completed plan
Questionnaire within five and one-half (5 1/2) months after the plan's
year end;
* Review, sign and mail the Form 5500 prepared by Fidelity to the DOL in
a timely manner;
* Distribute the SAR to participants and beneficiaries in a timely
manner; and
* Respond to and provide any other information requested by Fidelity,
including soliciting any information from the prior recordkeeper,
related to the Form 5500.
Fidelity hereby agrees to:
* Provide the Sponsor with the Questionnaire within one and one-half
(1 1/2) months after the Plan's year-end;
* File Form 5558 to request an extension of time to file Form 5500 if
requested by the Plan Sponsor or if the completed Questionnaire is not
received from the Sponsor within five and one half (5 1/2) months
after the Plan's year end, as specified above;
* Provide the Sponsor with the Form 5500 at least ten (10) days prior to
the required filing date and SAR at least ten (10) days prior to the
required mailing date, assuming the Plan Sponsor has submitted the
Required Information and has met the filing deadlines as outlined in
this agreement;
70
* Respond to inquiries from the DOL or IRS received by the Sponsor,
related to any Form 5500 prepared by Fidelity.
The Plan Sponsor understands that the Form 5500 will be prepared based upon the
information provided in the Questionnaire and acknowledges that Fidelity shall
have no responsibility for verifying the authenticity or accuracy of the data
submitted by the Sponsor on the Questionnaire.
In the event that Fidelity does not receive all Required Information within 8
months after the plan's year-end, Fidelity will not prepare the Form 5500 and
the Sponsor shall be responsible for completing the Form 5500 for filing with
the DOL. Fidelity will not be held responsible for any late fees or penalties
for incomplete filings caused by it not receiving the Required Information
within 8 months after the plan's year-end.
Fees related to this Service are set out on Schedule "B" to the Agreement to
which this schedule is attached. Further, Signature-Ready 5500 service will
continue until the Plan Sponsor provides Fidelity with written direction to the
contrary.
LIZ CLAIBORNE, INC.
By: /s/ Xxxxxxx Xxxxxx 9/29/03
---------------------------------
Date
71
