Exhibit 10.36
XXXXXX ASSET MANAGEMENT, LTD.
PROFIT-SHARING AND SAVINGS PLAN AND TRUST AGREEMENT
(As Amended and Restated Effective January 1, 1997)
Xxxxxxx, Carton & Xxxxxxx
Chicago, Illinois
TABLE OF CONTENTS
ARTICLE I. Definitions and Designations........................................1
Section 1.1. "Agent for Service of Process"...............................1
Section 1.2. "Agreement"..................................................1
Section 1.3. "Board"......................................................1
Section 1.4. "Code".......................................................1
Section 1.5. "Company"....................................................1
Section 1.6. "Compensation"...............................................1
Section 1.7. "Computation Period".........................................2
Section 1.8. "Effective Date".............................................2
Section 1.9. "Employee"...................................................2
Section 1.10. "Employer"...................................................2
Section 1.11. "ERISA"......................................................2
Section 1.12. "Xxxxxx Profit-Sharing Plan".................................2
Section 1.13. "Leased Employee"............................................2
Section 1.14. "One Year Break in Service"..................................2
Section 1.15. "Participant"................................................3
Section 1.16. "Plan".......................................................3
Section 1.17. "Plan Manager"...............................................3
Section 1.18. "Plan Year"..................................................3
Section 1.19. "Prior Plan".................................................3
Section 1.20. "Related Entity".............................................3
Section 1.21. "Spouse".....................................................3
Section 1.22. "Termination of Employment"..................................3
Section 1.23. "Transferred Employees"......................................4
Section 1.24. "Trust" or "Trust Fund"......................................4
Section 1.25. "Trustee"....................................................4
Section 1.26. Additional Definitions.......................................4
ARTICLE II. Hours of Service...................................................5
Section 2.1. Hour of Service Defined......................................5
Section 2.2. Determination of Hours of Service............................6
Section 2.3. Determination of Hours of Service for Reasons Other
Than the Performance of Duties...............................6
Section 2.4. Crediting of Hours of Service to Computation Periods.........7
Section 2.5. Service with Xxxxxx Associates, L.P..........................7
ARTICLE III. Participation.....................................................7
Section 3.1. Participation Requirements...................................7
Section 3.2. Compensation for Plan Year of Entry..........................8
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Section 3.3. Notification to Participants.................................8
Section 3.4. Reemployment.................................................8
ARTICLE IV. Contributions......................................................8
Section 4.1. Amount of Employer Contributions.............................8
Section 4.2. Timing of Employer Contributions.............................9
Section 4.3. Participants Entitled to Share in Employer Contributions.....9
Section 4.4. Allocation of Employer Contribution and Forfeitures..........9
Section 4.5. Rollover Contributions to the Plan...........................9
Section 4.6. Prevented Contributions.....................................10
Section 4.7. Participant Voluntary Contributions.........................11
ARTICLE V. Limitation on Annual Additions.....................................11
Section 5.1. Limitation on Annual Additions..............................11
Section 5.2. Additional Limitation in Case of Participation in Defined
Benefit and Defined Contribution Plans......................12
Section 5.3. Definitions Relating to Annual Addition Limitations.........12
Section 5.4. Reduction of Annual Additions...............................13
ARTICLE VI. Plan Accounting, Recordkeeping and Directed Investments...........14
Section 6.1. Plan Accounting Records.....................................14
Section 6.2. Valuation Dates.............................................14
Section 6.3. Account Adjustments.........................................14
Section 6.4. Trust Fund Earnings.........................................14
Section 6.5. Directed Investment Accounts................................15
Section 6.6. Directed Investments - Operations...........................17
ARTICLE VII. Vesting and Payment of Benefits..................................18
Section 7.1. Normal Retirement Date......................................18
Section 7.2. Disability Retirement.......................................18
Section 7.3. Vesting.....................................................18
Section 7.4. Payments to Participants....................................20
Section 7.5. Direct Rollovers from the Plan..............................21
Section 7.6. Vesting Years of Service....................................21
ARTICLE VIII. Settlement Options..............................................22
Section 8.1. Methods of Distribution.....................................22
Section 8.2. Medium of Payment...........................................23
Section 8.3. Date for Determining Value of Account Balance...............23
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ARTICLE IX. Beneficiaries.....................................................23
Section 9.1. Payment on Death of a Participant Who Is Not Married........23
Section 9.2. Payment on Death of a Married Participant...................24
Section 9.3. Minors and Persons under Other Legal Disability.............24
Section 9.4. Limitation When Death Occurs before Retirement Benefits
Commence....................................................24
Section 9.5. Limitation When Death Occurs after Benefits Commence........25
Section 9.6. Minimum Distribution Requirements...........................25
ARTICLE X. Insurance Policies.................................................25
ARTICLE XI. Loans to Participants.............................................25
Section 11.1. Limitation..................................................25
Section 11.2. Repayment -- Collection.....................................25
Section 11.3. Interest....................................................25
Section 11.4. Security....................................................26
Section 11.5. Loan Procedures.............................................26
ARTICLE XII. Plan Management..................................................26
Section 12.1. General Rights, Powers and Duties of Plan Manager...........26
Section 12.2. Plan Manager................................................27
Section 12.3. Fiduciary Obligations.......................................27
Section 12.4. Information to Be Furnished to Plan Manager.................27
Section 12.5. Uniform Application.........................................28
Section 12.6. Allocation and Delegation of Certain Fiduciary Duties.......28
Section 12.7. Funding Policy..............................................28
Section 12.8. Compensation and Expenses...................................28
Section 12.9. Indemnification of the Plan Manager by the Employers........28
Section 12.10. Limitation on Responsibilities..............................29
Section 12.11. Agent for Service of Process................................29
ARTICLE XIII. Claims for Benefits.............................................29
Section 13.1. Claim for Benefits..........................................29
Section 13.2. Request for Review of a Denial of a Claim for Benefits......29
Section 13.3. Decision upon Claim for Review of a Denial of a Claim
for Benefits................................................29
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ARTICLE XIV. Trustee Powers, Rights and Duties................................30
Section 14.1. Exclusive Authority.........................................30
Section 14.2. General Powers..............................................30
Section 14.3. Directions to Trustee.......................................33
Section 14.4. Fiduciary Obligations.......................................33
Section 14.5. Allocation of Trustee Responsibilities, Obligations
and Duties..................................................33
Section 14.6. Compensation and Expenses...................................33
Section 14.7. Actions by Trustees.........................................33
Section 14.8. Persons Dealing with Trustee................................33
Section 14.9. Indemnification of the Trustee by the Employers.............34
Section 14.10. Limitation on Responsibilities..............................34
Section 14.11. Common Trust Fund...........................................34
Section 14.12. Change of Trustee...........................................34
ARTICLE XV. Limitation upon Reversion.........................................35
Section 15.1. Exclusive Benefit...........................................35
Section 15.2. Permissible Reversions......................................35
ARTICLE XVI. Amendment........................................................36
Section 16.1. In General..................................................36
Section 16.2. Amendments to Vesting Schedule..............................36
ARTICLE XVII. Termination of the Plan and Trust...............................37
Section 17.1. Right to Terminate Plan and Trust...........................37
Section 17.2. Right to Discontinue Contributions..........................37
Section 17.3. Vesting upon Termination of Plan or Complete
Discontinuance of Contributions.............................37
Section 17.4. Merger or Consolidation of Plan and Trust...................37
ARTICLE XVIII. Miscellaneous..................................................38
Section 18.1. Inalienability of Benefits..................................38
Section 18.2. No Implied Rights...........................................38
Section 18.3. Status of Employment Relations..............................38
Section 18.4. No Guarantee................................................38
Section 18.5. Service in More Than One Capacity...........................38
Section 18.6. Actions by Company..........................................38
Section 18.7. Binding Effect..............................................39
Section 18.8. Governing Laws..............................................39
Section 18.9. Counterparts................................................39
Section 18.10. Number and Gender...........................................39
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Section 18.11. Payments Pursuant to a Qualified Domestic Relations
Order.......................................................39
Section 18.12. Rights of Veterans..........................................40
ARTICLE XIX. Special Top-Heavy Rules..........................................40
Section 19.1. Application.................................................40
Section 19.2. Special Terms...............................................40
Section 19.3. Minimum Contribution........................................43
Section 19.4. Maximum Benefit Accrual.....................................44
Section 19.5. Termination of Top-Heavy Status.............................44
ARTICLE XX. Adoption and Withdrawal from Plan.................................44
Section 20.1. Procedure for Adoption......................................44
Section 20.2. Procedure for Withdrawal....................................44
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INTRODUCTION
This document is an amendment, restatement and continuation, effective as
of January 1, 1997 of the Xxxxxx Asset Management, Ltd. Profit-Sharing and
Savings Plan and Trust Agreement, which was originally adopted effective as of
March 24, 1992 and amended three times thereafter. The rights and duties of any
person under the plan at any time prior to January 1, 1997 shall be determined
under the provisions of the Plan as in effect on that date, and not under this
document.
ARTICLE I.
Definitions and Designations
Section 1.1. "Agent for Service of Process." Any officer of the Company is
designated as the agent for service of process.
Section 1.2. "Agreement" means this Plan and Trust.
Section 1.3. "Board" means the Board of Directors of Xxxxxx Asset
Management, Ltd.
Section 1.4. "Code" means the Internal Revenue Code of 1986, as amended.
Section 1.5. "Company" means Xxxxxx Asset Management, Ltd., an Illinois
corporation. In addition, solely for purposes of Article III and Article VII,
the term "Company" also means an organization which is a predecessor of the
Company, including Xxxxxx Associates, L.P.
Section 1.6. "Compensation" means, with respect to an Employee, the
aggregate of all payments by an Employer to an Employee for services, including
bonuses, commissions, overtime pay, vacation pay and disability pay if paid by
an Employer, but excluding amounts of deferred compensation, stock options and
other distributions which receive special tax benefit, to the extent these are
excluded from "compensation" under Treasury Reg. ss.1.415-2(d)(3).
For Plan Years beginning on or after January 1, 1994, "Compensation" shall
be determined by excluding compensation for any year in excess of $150,000 (or
such greater amount as may be determined by the Commissioner of Internal Revenue
for that year). For Plan Years beginning before January 1, 1994, "Compensation"
shall be determined by excluding compensation for any year in excess of $200,000
(or such greater amount as may be determined by the Commissioner of Internal
Revenue for that year). For purposes of the dollar limitation on compensation
set forth in the two preceding sentences, the family aggregation rules set forth
in Section 414(q)(6) of the Code, as modified by Section 401(a)(17) thereof,
shall apply in Plan Years beginning before January 1, 1997.
Compensation shall be calculated under the same method of accounting (cash
or accrual) used by the Company for federal income tax purposes. For any "short"
Plan Year of fewer than 12 months, the applicable annual compensation limit will
be multiplied by a fraction, the
1
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
Any reference in this Plan to the limitation under Code Section 401(a)(17)
means the annual compensation limit set forth in this provision.
Section 1.7. "Computation Period" means, for purposes of determining
Vesting Years of Service and One Year Breaks in Service, the Plan Year.
Section 1.8. "Effective Date" of this amendment and restatement of the
Plan means January 1, 1997.
Section 1.9. "Employee" means any person who is employed by an Employer,
excluding any person who is an independent contractor with respect to an
Employer, and excluding any person who is a Leased Employee. In addition, a
"Highly Compensated Employee" is any Employee who: (i) was a 5 percent owner (as
defined in Section 19.2(g)(iii)) at any time during the current or prior Plan
Year; or (ii) for the prior Plan Year had 415 Compensation of more than $80,000
(adjusted annually under Code Section 414(q)(1)) and who was a member of the
group of the top-paid 20% of all Employees (ranked by 415 Compensation) for a
Plan Year. In determining the top-paid 20% group, any Employee will be excluded
if he has not completed 6 months of service, normally works less than 17-1/2
hours per week or less than 6 months per year, is not yet age 21, is covered by
a bona fide collective bargaining agreement or is a nonresident alien with no
U.S. source earned income.
Section 1.10. "Employer" means, on and after the Effective Date, the
Company and any Related Entity which, pursuant to Article XXI of the Plan, has
adopted the Plan.
Section 1.11. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
Section 1.12. "Xxxxxx Profit-Sharing Plan" means the Xxxxxx Associates,
L.P. Profit-Sharing and Savings Plan and any predecessor to that plan.
Section 1.13. "Leased Employee" means any person who is not an Employee of
an Employer, but who has provided services to an Employer, under the primary
direction of the Employer, on a substantially full-time basis for a period of at
least one year pursuant to an agreement between the Employer and a leasing
organization. The period during which a Leased Employee performs services for an
Employer shall be taken into account for purposes of Article III and Article VII
of the Plan, unless (i) such Leased Employee is a participant in a money
purchase pension plan maintained by the leasing organization which provides a
non-integrated employer contribution rate of at least 10 percent of
compensation, immediate participation for all employees and full and immediate
vesting, and (ii) Leased Employees do not constitute more than 20 percent of the
Employer's nonhighly compensated workforce.
Section 1.14. "One Year Break in Service" means a Computation Period
during which a Participant completes 500 or fewer Hours of Service with an
Employer or a Related Entity.
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Section 1.15. "Participant" means an Employee who becomes a Participant in
accordance with the provisions of the Plan.
Section 1.16. "Plan" means the Xxxxxx Asset Management Ltd. Profit-Sharing
and Savings Plan, as set out in this document and as subsequently amended.
Section 1.17. "Plan Manager" means the Plan Manager provided for by
Article XII. The Plan Manager has the duties and obligations of the
"administrator" (as defined in Section 3(16)(A) of ERISA) and of the "plan
administrator" (as defined in Section 414(g) of the Code).
Section 1.18. "Plan Year" means the calendar year, except that the initial
Plan Year was a "short" plan year beginning on March 24, 1992 and ending on
December 31, 1992.
Section 1.19. "Prior Plan" means the Xxxxxx Asset Management, Ltd.
Profit-Sharing and Savings Plan, as established effective March 24, 1992 and as
amended through December 31, 1996.
Section 1.20. "Related Entity" means any organization which is either (i)
a member of a controlled group of corporations (as determined under Section
414(b) of the Code) of which an Employer is a member, or (ii) a member of a
group of trades or businesses (whether or not incorporated) which are under
common control with an Employer (as determined under Section 414(c) of the
Code), or (iii) a member of an affiliated service group (as defined under
Section 414(m) of the Code) of which an Employer is a member; provided, however,
that in defining the term "Related Entity" for purposes of the limitations set
forth in Article V, the phrase "more than 50%" shall be substituted for the
phrase "at least 80%" in accordance with the provisions of Section 415(h) of the
Code.
Section 1.21. "Spouse" means the person who is living and married to the
Participant as of any relevant date within the meaning of the laws of the State
of the Participant's residence or evidenced by a valid marriage certificate or
other proof acceptable to the Plan Manager. A spouse who was the Spouse on the
date payment of benefits commenced but who is divorced from the Participant at
the date of the Participant's death will be the Spouse at the date of the
Participant's death except as otherwise provided in a "Qualified Domestic
Relations Order" as defined in Section 18.11.
Section 1.22. "Termination of Employment" occurs when an Employee ceases
to be on the payroll of any Employer. Transfer of employment from an Employer to
another Employer shall not constitute a Termination of Employment; provided,
however, where an Employer ceases to be such with respect to an Employee as a
result of either an asset sale or stock sale and the Employee is deemed not to
have incurred a separation from service for purposes of Section 402(e)(4) of the
Code, then Termination of Employment shall be deemed not to occur until such
Employee ceases to be employed by the successor to the Employer, unless the Plan
Manager in its discretion, uniformly applied to all similarly situated
Employees, determines not to apply this provision.
3
Section 1.23. "Transferred Employees" means employees of Xxxxxx
Associates, L.P. who became Employees of the Company prior to July 1, 1992 and
who were participating in the prior Plan.
Section 1.24. "Trust" or "Trust Fund" means the trust fund which is
established by this Agreement and which forms a part of the Plan.
Section 1.25. "Trustee" means any individual or corporation duly appointed
as a Trustee of this Plan who is serving in that capacity at any time, including
any additional or successor Trustee.
Section 1.26. Additional Definitions. The following terms are defined in
subsequent Sections in this document, as indicated:
Definition Appears in Section
"Adjusted Account Balance" 6.4(c)
"Aggregate Benefit" 19.2(a)
"Aggregation Group" 19.2(b)
"Aggregation Group Plan" 19.2(c)
"Annual Additions" 5.1(b)
"Current Plan Year" 19.2(d)
"Defined Benefit Plan Fraction" 5.2
"Defined Benefit Plan" 5.3(c)
"Defined Contribution Plan Fraction" 5.2
"Defined Contribution Plan" 5.3(b)
"Designated Fund" 6.5(a)(iv)
"Determination Date" 19.2(e)
"Disability Retirement" 7.2
"Eligible Retirement Plan" 7.5(a)
"Eligible Rollover Distribution" 7.5(a)
"Excess Contribution" 15.2(b)
"Former Key Employee" 19.2(f)
"415 Compensation" 5.3(d)
"Hour of Service" 2.1
"Key Employee" 19.2(g)
"Limitation Year" 5.3(e)
"Normal Retirement Date" 7.1
"Qualified Domestic Relations Order" 18.11
"Retirement Plan" 5.3(a)
"Rollover Contribution" 4.5(a)
"Top-Heavy Plan" 19.2(h)
"Trust Fund Earnings" 6.4(a)
"Valuation Date" 6.2(a)
"Valuation Period" 6.2(b)
"Vesting Year of Service" 7.6(a)
4
ARTICLE II.
Hours of Service
Section 2.1. Hour of Service Defined. "Hour of Service" means each hour
for which an Employee is:
(a) paid, or entitled to payment, for the performance of duties;
(b) awarded back pay or for which back pay has been agreed to,
irrespective of mitigation of damages; provided, however, that the
same Hour of Service shall not be credited both under Subsection
2.1(a) or Subsection 2.1(c), as the case may be, and under this
Subsection 2.1(b);
(c) paid, or entitled to payment, on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence; provided, however, that --
(i) an hour for which an Employee is directly or indirectly paid,
or entitled to payment, on account of a period during which no
duties are performed shall not be credited to him if such
payment is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws, and
(ii) Hours of Service shall not be credited for a payment which
solely reimburses an Employee for medical or medical-related
expenses incurred by him,
and for purposes of this Subsection 2.1(c), a payment shall be
deemed to be made by or due from an Employer regardless of whether
such payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund or insurer to which
the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity
are for the benefit of particular employees or are on behalf of a
group of employees in the aggregate;
(d) solely for purposes of determining whether an Employee has incurred
a One Year Break in Service as defined at Section 1.14, an Employee
will be credited with each hour which would normally have been
credited as an Hour of Service except that the Employee was absent
from work because of her pregnancy, the birth of his/her child, the
placement of a child with him/her following adoption or caring for
his/her child immediately following such birth or placement;
provided, however, that Hours of Service will be credited under this
paragraph only to the extent that (after counting Hours of Service
already credited under paragraphs (a)-
5
(c)) credit under this paragraph is necessary to prevent the
Employee or Participant from having a One Year Break in Service
either (i) in the Computation Period during which the absence began
or (ii) if no Hours of Service are credited under (i), in the
Computation Period immediately following the period described in
(i); and
(e) solely for purposes of determining whether an Employee has incurred
a One Year Break in Service as defined at Section 1.14, an Employee
will be credited with Hours of Service for any customary period of
work, based on a 35-hour work week or pro rata portion thereof,
during which he is absent due to an Employer-approved non-paid leave
of absence.
Section 2.2. Determination of Hours of Service.
(a) Periodic Payroll Periods. The Plan Manager, in its sole discretion,
may require that Hours of Service credited be determined on the
basis of periodic payroll periods. The Plan Manager's determination
shall be made on a nondiscriminatory basis and shall be uniformly
and consistently applied to all Employees and Participants of each
classification covered under the Plan; provided, however, that such
classifications shall themselves be reasonable and consistently
determined and applied. In such event, if an Employee is compensated
on the basis of one of the following periodic payroll periods he
shall be credited with the Hours of Service for such period during
which he would be credited with at least one Hour of Service in
accordance with Section 2.1, determined as follows:
If the Employee's Periodic
Payroll Period Is He Shall Be Credited With
----------------- -------------------------
Day of employment 10 Hours of Service
Week of employment 45 Hours of Service
Semi-monthly employment period 95 Hours of Service
Monthly employment period 190 Hours of Service
If an Employee is not compensated on one of the above periodic
payroll periods, he shall be credited with 10 Hours of Service for
each day of employment during which he would be credited with at
least one Hour of Service in accordance with Section 2.1.
(b) Non-Periodic Payroll Periods. In the event Subsection 2.2(a) is not
applicable, Hours of Service shall be determined from the records
maintained by the Employer.
Section 2.3. Determination of Hours of Service for Reasons Other Than the
Performance of Duties. In the case of a payment which is made or due on account
of a period during which an Employee performs no duties, and which results in
the crediting of Hours of Service under Subsection 2.1(c), or in the case of an
award or agreement for back pay, to the
6
extent that such award or agreement is made with respect to a period described
in Subsection 2.1(b), the number of Hours of Service to be credited shall be
determined in accordance with the provisions of Department of Labor Regulation
ss.2530.200b-2(b). In determining Hours of Service to be credited under
Subsection 2.1(c), the number of regularly scheduled working hours included in
the customary work week is 35 hours per week.
Section 2.4. Crediting of Hours of Service to Computation Periods.
(a) Except as provided in Subsection 2.4(d), Hours of Service described
in Subsection 2.1(a) shall be credited to the Computation Period in
which the duties are performed.
(b) Except as provided in Subsection 2.4(d), Hours of Service described
in Subsection 2.1(b) shall be credited to the Computation Period(s)
to which the award or agreement for back pay pertains, rather than
to the Computation Period in which the award, agreement or payment
is made.
(c) Except as provided in Subsection 2.4(d), Hours of Service described
in Subsection 2.1(c) shall be credited as follows:
(i) Hours of Service credited to an Employee on account of a
payment which is calculated on the basis of units of time,
such as hours, days, weeks or months, shall be credited to the
Computation Period or Computation Periods in which the period
during which no duties are performed occurs, beginning with
the first unit of time to which the payment relates.
(ii) Hours of Service credited to an Employee by reason of a
payment which is not calculated on the basis of units of time
shall be credited to the Computation Period in which the
period during which no duties are performed occurs.
(d) In the case of Hours of Service to be credited to an Employee in
connection with a period of no more than 31 days which extends
beyond one Computation Period, all such Hours of Service shall be
credited to the second such Computation Period.
Section 2.5. Service with Xxxxxx Associates, L.P. For employees who
commenced employment with the Company on or before June 30, 1992, Hours of
Service with Xxxxxx Associates, L.P. and any predecessor company shall be
credited for all purposes under this Plan in accordance with the terms of this
Article in the same manner as Hours of Service with the Company.
7
ARTICLE III.
Participation
Section 3.1. Participation Requirements. Each Employee of the Company who
was participating in the Prior Plan on the day immediately preceding the
Effective Date shall continue to participate herein in accordance with the
provisions of this Plan. Each other Employee of an Employer who:
(a) commences Service on or before June 30 in any Plan Year shall become
a Participant on the last day (December 31 Entry Date) of the then
current Plan Year, or
(b) commences Service on or after July 1 in any Plan Year shall become a
Participant on the first day (January 1 Entry Date) of the following
Plan Year;
provided, however, if he is not employed by an Employer on his applicable Entry
Date, he will not become a Participant until the first Entry Date thereafter on
which he is so employed.
Section 3.2. Compensation for Plan Year of Entry. For purposes of Article
IV, the Compensation of a Participant for the Plan Year in which he becomes a
Participant shall include all of his Compensation during that Plan Year.
Section 3.3. Notification to Participants. Within 90 days after the date
on which an Employee becomes a Participant (or at such later date as is
prescribed by regulations issued by the Secretary of Labor) the Plan Manager
shall furnish him with a summary plan description and a statement of any
modifications and changes thereto.
Section 3.4. Reemployment. Any Participant who is reemployed following his
Termination of Employment shall become a Participant again as of the date he
first completes an Hour of Service with an Employer after his reemployment.
ARTICLE IV.
Contributions
Section 4.1. Amount of Employer Contributions.
(a) Contributions. With respect to each Plan Year and subject to the
limitations of this Article IV and Article V, the Company shall
contribute to the Trust such amount or amounts, if any, as its Board
in its discretion shall determine, but not exceeding 15% of
Participants' Compensation for the fiscal year of the Company. The
Board shall designate the Plan Year on account of which the
contribution is made and shall specify the amount of the
contribution or a definite basis or formula by which the
contribution can be determined within a reasonable time after the
end of that Plan Year.
8
(b) Subject to this Article IV and Articles V, XVI and XVII, each
other Employer will contribute to the Trust for each Plan Year
for all Participants who are Employees of that Employer an
amount which is equal to the product of (i) the total
Compensation for the Plan Year paid to such Participants by
such Employer, multiplied by (ii) a fraction, the numerator of
which is the Company's contribution for the Plan Year and the
denominator of which is the total Compensation for the Plan
Year paid to Participants by the Company.
Section 4.2. Timing of Employer Contributions. Employer contributions to
the Trust for each Plan Year shall be paid not later than the time prescribed by
law (including any extensions thereof) for filing the Employer's Federal income
tax return for its taxable year which coincides with such Plan Year.
Notwithstanding the date or dates payments to the Trust are actually made,
Employer contributions with respect to each Plan Year shall be deemed made as of
the last day of that Plan Year. With respect to any contributions paid by an
Employer to the Trust after the last day of the Employer's taxable year but
before the time prescribed by law (including any extensions thereof) for filing
the Employer's Federal income tax return for such taxable year, such payments
shall be considered to be on account of such preceding taxable year and the Plan
Year which coincides therewith, if the Employer claims such payments as a
deduction on its Federal income tax return for such preceding taxable year or
the Employer designates such payments in writing to the Plan Manager or Trustee
as payments on account of the preceding taxable year.
Section 4.3. Participants Entitled to Share in Employer Contributions. All
Participants who are employed by an Employer on the last day of the Plan Year
shall be entitled to share in the allocation of the Employer contribution and
Forfeitures for the Plan Year, except Participants who do not complete 1,000 or
more Hours of Service with the Employers during the Plan Year; provided,
however, that a Participant who would have completed 1,000 or more Hours of
Service with the Employers during the Plan Year but whose Normal Retirement,
death or Disability Retirement occurred during such Plan Year while in the
employ of the Employers shall be entitled to share in the allocation of Employer
contributions and Forfeitures for the Plan Year based upon his Compensation
during the Plan Year of his death, Normal Retirement or Disability Retirement.
Section 4.4. Allocation of Employer Contribution and Forfeitures. Subject
to the limitations of Article V, Employer contributions for each Plan Year and
Forfeitures arising during the Plan Year shall be allocated among the
Participants entitled to allocations under Section 4.3 and will be credited to
each such Participant's Company Contribution Accounts in the same proportion as
his Compensation for the Plan Year bears to the total Compensation of all such
Participants for the Plan Year.
Section 4.5. Rollover Contributions to the Plan.
(a) Acceptance of Rollover Contributions. The Plan Manager, upon the
written request of an Employee, may direct the Trustee to accept a
"Rollover Contribution," which is either of the following: (i) a
direct transfer to this Plan and Trust of a rollover contribution
received by the Employee of the Employee's
9
benefits under an individual retirement account or individual
retirement annuity if such amount would otherwise qualify as a
"rollover contribution" under Section 408(d)(3)(A)(ii) of the Code
including all applicable requirements under Code Section 408(d)(3),
or from another plan intended to meet the requirements of Section
401 of the Code, including any nondeductible employee contributions
made by the Employee to such a plan, which transfer may be in cash
or in property, or partly in each; or (ii) a rollover contribution
of an amount (or portion thereof) received by the Employee as a
distribution from another plan intended to meet the requirements of
Section 401 of the Code, or of an Employee's benefits under an
individual retirement account or individual retirement annuity if
such amount would otherwise qualify as a "rollover contribution"
under Section 408(d)(3)(A)(ii) of the Code including all applicable
requirements under Code Section 408(d)(3), which rollover may be in
cash or in property, or partly in each. Such distribution shall be
treated as a Rollover Contribution for all purposes of the Plan and
Trust, including, but not limited to, the provisions of Subsection
4.5(b). No part of any distribution received pursuant to this
Subparagraph may be attributable to a trust forming part of a plan
under which the Employee was, at any time, an employee within the
meaning of Section 401(c)(1) of the Code.
As used herein, a "direct transfer" means an amount paid directly by
a trustee of one trust to a trustee of another trust and a "rollover
contribution" means an amount received by an Employee from the
trustee of one trust (or from an individual retirement account or
annuity) and paid by the Employee to the trustee of another trust.
Any Rollover Contribution which is accepted will be held in a
separate Rollover Contribution Account.
(b) Vesting in Rollover Contribution Account. The Employee shall at all
times have a nonforfeitable right in 100% of his Rollover
Contribution Account.
(c) Limited Participation. An Employee who makes a Rollover Contribution
shall be deemed to be a Participant with respect to his Rollover
Contribution Account for all purposes of the Plan except for Article
III and this Article (other than this Section).
Section 4.6. Prevented Contributions. If for any Plan Year an Employer is
prevented from making the full amount of its contribution as determined under
Section 4.1 because such Employer does not have sufficient current or
accumulated profits, the other Employers (by action of their respective boards
of directors) may contribute, to the extent of their respective current or
accumulated profits, on behalf of such Employer that portion of such Employer's
contributions which such Employer is prevented from making.
For any Plan Year in which a consolidated federal income tax return will
not be filed by the Employers, the amount of the prevented contribution which
may be made by the Company
10
and each other Employer under this Section 4.6, if it is necessary to allow a
deduction therefor for federal income tax purposes, shall be limited to that
proportion of its current or accumulated profits (remaining after deducting the
contribution made under Section 4.1) which its current or accumulated profits
(remaining after deducting the contribution made under Section 4.1) bears to the
total current or accumulated profits of all Employers (remaining after deducting
the contributions made under Section 4.1).
Section 4.7. Participant Voluntary Contributions.
(a) In General. No Participant Voluntary Contributions were made or
accepted for periods beginning after December 31, 1992. The
following rules apply to Participant Voluntary Contributions made
under Section 4.7 of the Prior Plan.
(b) Separate Account. Each Participant's Voluntary Contributions will be
held in a separate Voluntary Contributions Account.
(c) Vesting. A Participant shall at all times have a nonforfeitable
right in 100% of his Voluntary Contributions Account.
(d) Withdrawals of Voluntary Contributions. Amounts voluntarily
contributed by a Participant pursuant to this Section may be
withdrawn by him, in whole or in part, at any time prior to his
Termination of Employment by making a written request to the Plan
Manager; provided, however, that his cumulative withdrawals shall
not exceed his cumulative voluntary contributions. Withdrawals under
this Subsection shall be made from that portion of the balance in a
Participant's Voluntary Contributions Account which equals his
unwithdrawn Voluntary Contributions and the earnings on such
contributions on a pro rata basis.
ARTICLE V.
Limitation on Annual Additions
Section 5.1. Limitation on Annual Additions.
(a) General Rule. Notwithstanding any other provision of the Plan, the
sum of the Annual Additions (as defined below) for each Participant
for any Limitation Year beginning after March 31, 1984 shall not
exceed the lesser of:
(i) $30,000 (or, if greater, 1/4 of the dollar limitation in
effect under Section 415(b)(1)(A) of the Internal Revenue Code
for the calendar year which begins with or within that Plan
Year); or
(ii) 25% of the Participant's 415 Compensation (as defined below).
(b) Annual Additions Defined. The term "Annual Additions" means the sum
of Voluntary Contributions, Employer contributions and Forfeitures
allocated to a Participant's accounts as of any date during the
Limitation Year under this Plan or
11
any other Defined Contribution Plan maintained by the Company or a
Related Company.
(c) Short Plan Year. With respect to any Plan Year except for the
initial Plan Year (and coexistent Limitation Year) the duration of
which is less than 12 consecutive months, the dollar limitation of
Subparagraph 5.1(a)(i) for such Plan Year shall be determined by
multiplying such dollar amount by a fraction, the numerator of which
is the number of months (including fractional parts of a month) in
the Plan Year, and the denominator of which is 12.
Section 5.2. Additional Limitation in Case of Participation in Defined
Benefit and Defined Contribution Plans. In the event that any Participant under
this Plan is a participant under one or more Defined Benefit Plans maintained by
an Employer, then for any Limitation Year beginning after March 31, 1984 the sum
of his Defined Benefit Plan Fraction (as defined by Section 415(e)(2) of the
Code) for all such plans and his Defined Contribution Plan Fraction (as defined
by Sections 415(e)(3), (e)(4), and (e)(6) (if chosen by the Plan Manager) of the
Code and the transitional rule of Section 235(g)(3) of the Tax Equity and Fiscal
Responsibility Act of 1982) for all such plans for such Limitation Year shall
not exceed 1.0 (the "Combined Fraction"). If the Combined Fraction of such
Participant exceeds 1.0 and if the Defined Benefit Plan permits it, the
Participant's Defined Benefit Plan Fraction shall be reduced by limiting the
Participant's annual benefits payable from the Defined Benefit Plan in which he
participates to the extent necessary to reduce the Combined Fraction of such
Participant to 1.0. If the Defined Benefit Plan does not permit the reduction
described above, the Participant's Defined Contribution Plan Fraction shall be
reduced in accordance with Section 5.4 below to the extent necessary to reduce
the Combined Fraction of such Participant to 1.0.
Section 5.3. Definitions Relating to Annual Addition Limitations. For
purposes of the Plan, the following definitions shall apply:
(a) "Retirement Plan" means (i) any pension, profit-sharing, or stock
bonus plan described in Section 401(a) of the Code, which includes a
trust exempt from tax under Section 501(a) of the Code, (ii) any
annuity plan or annuity contract described in Sections 403(a) or
403(b) of the Code, (iii) any qualified bond purchase plan described
in Section 405(a) of the Code and (iv) any individual retirement
account, individual retirement annuity or retirement bond described
in Sections 408(a), 408(b) or 409 of the Code.
(b) "Defined Contribution Plan" means a Retirement Plan (whether or not
terminated) which provides for an individual account for each
participant and for benefits based solely on the amount contributed
to the participant's account, and any income, expenses, gains and
losses, and any forfeitures of accounts of other participants which
may be allocated to such participant's account.
(c) "Defined Benefit Plan" means any Retirement Plan (whether or not
terminated) which is not a Defined Contribution Plan; provided,
however, that if a Defined Benefit Plan provides for voluntary
employee contributions, such voluntary
12
employee contributions shall be considered as a separate Defined
Contribution Plan for purposes of applying the limitations of
Section 415 of the Code and the provisions of this Article.
(d) "415 Compensation" means a Participant's wages, salaries and fees
for professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with an Employer to
the extent that the amounts may be included in gross income
(including, but not limited to, commissions paid to salespersons,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances), and excluding the following:
(i) Employer contributions to a plan of deferred compensation that
shall not be included in the Participant's gross income for
the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the Participant,
or any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
described in Code Section 403(b) (whether or not the amounts
are actually excludable from the gross income of the
Participant).
Effective for Plan Years beginning after December 31, 1997, 415
Compensation shall include elective deferrals to 401(k) plans and other similar
arrangements, elective contributions to Code Section 457 nonqualified deferred
compensation plans, and salary reduction contributions made to a cafeteria plan.
(e) "Limitation Year" means the Plan Year.
Section 5.4. Reduction of Annual Additions. In the event it is determined
that the Annual Additions to a Participant's accounts for any Limitation Year
would be in excess of the limitations of this Article, such Annual Additions
shall be reduced to the extent necessary to bring them within such limitations
in the following manner:
13
(a) The Participant's allocable share of the Employer contribution and
Forfeitures for the Plan Year ending within the Limitation Year
shall be reduced. The amount of such reduction shall be allocated to
each other Participant entitled to share in the Employer
contribution and Forfeitures and credited to their respective
Company Contribution Accounts in the same proportion as each such
other Participant's Compensation for the Plan Year bears to the
total Compensation of all such other Participants for the Plan Year.
If such reallocation results in the Annual Additions to another
Participant's accounts for such Limitation Year also exceeding the
limitations of this Article, the provisions of this Subsection
5.4(a) shall then be applied to such Participant(s).
(b) If further reductions are necessary, then the amount of the Employer
contribution and Forfeitures for the Plan Year ending within the
Limitation Year which cannot be allocated hereunder shall be
credited to an Unallocated Company Contribution Account. Such
Account shall not be subject to adjustment pursuant to Article VI
and shall be deemed an Employer Contribution for the succeeding Plan
Year and allocated before any other Employer contributions for that
Plan Year.
ARTICLE VI.
Plan Accounting, Recordkeeping and Directed Investments
Section 6.1. Plan Accounting Records. The Plan Manager shall establish and
maintain a set of accounting records for the Plan for the purpose of accounting
for the benefits of Participants and their beneficiaries under the Plan and for
all receipts, disbursements and liabilities of the Plan. Such accounting records
shall include one or more Company Contribution Accounts, Voluntary Contribution
Accounts, Rollover Contribution Accounts and Suspense Accounts for each
Participant and such other accounts as the Plan Manager determines are
necessary. All accounts maintained for a Participant may be collectively
referred to as "Account" or "Accounts." All of the same type of Accounts
maintained for a Participant shall sometimes be collectively referred to in the
singular.
Section 6.2. Valuation Dates.
(a) "Valuation Date" means the last day of each Plan Year.
(b) "Valuation Period" with respect to any Valuation Date means the
period since the preceding Valuation Date.
Section 6.3. Account Adjustments. As of each Valuation Date, the Plan
Manager shall credit or charge, as the case may be, the applicable Account of
each Participant with:
(a) distributions and loans, and loan repayments made during the
Valuation Period;
(b) Rollover contributions made by him during the Valuation Period;
(c) Trust Fund Earnings allocated to him for the Valuation Period; and
14
(d) Employer contributions and Forfeitures allocated to him pursuant to
Article IV.
Section 6.4. Trust Fund Earnings.
(a) Definition. With respect only to that portion of the Trust Fund
which does not represent Designated Funds, the term "Trust Fund
Earnings" means the net of the Trust Fund's earnings, gains, losses
and expenses during the Valuation Period and the net of the
appreciation or depreciation in the fair market value of each asset
of the Trust Fund on the Valuation Date (as compared to the
valuation of such assets as of the preceding Valuation Date, or
cost, in the case of assets acquired since the preceding Valuation
Date).
(b) Allocation of Trust Fund Earnings. As of each Valuation Date, Trust
Fund Earnings shall be allocated among all Participants in the same
proportion as each Participant's Adjusted Account Balance bears to
the total of all Participants' Adjusted Account Balances.
(c) Adjusted Account Balance. With respect to any Valuation Date, a
Participant's "Adjusted Account Balance" means his Account balance
as of the preceding Valuation Date --
(i) decreased by all distributions and loans made from the Account
during the Valuation Period;
(ii) increased by any Rollover Contributions, Voluntary
Contributions or loan repayments which are received during the
Valuation Period, determined by multiplying each such amount
received by a fraction, the numerator of which is the number
of days during the Valuation Period subsequent to the date of
receipt and the denominator of which is the total number of
days during the Valuation Period.
(d) This Section 6.4 is to be interpreted consistently with Section 6.5.
Section 6.5. Directed Investment Accounts.
(a) Direction of Investments. Subject to the provisions of Section 6.6,
Participants shall have the right to direct the investment of their
Accounts in specific assets, by giving such direction to the Plan
Manager in writing, on a form provided by the Plan Manager. The Plan
Manager, in its discretion, shall establish and communicate to the
Participants uniform and nondiscriminatory rules and policies in
connection with Participants' investment directions which, by way of
illustration and not by way of limitation, may:
(i) limit the right of direction to the investment of Rollover
Contribution Accounts;
15
(ii) require that each Participant who directs the investment of
his Accounts must direct the investment of his entire Account
and that such direction include a provision that until
otherwise directed, any subsequent additions to such Account
will be invested in a Designated Fund (as defined in Section
6.5(iv)) specified by the Plan Manager;
(iii) limit the right of direction to Participants who are within 5
years of their Normal Retirement Date or to beneficiaries of
deceased Participants;
(iv) limit the right of direction to investment in a specified
category of assets ("Designated Funds"), such as shares of
investment companies registered under the Investment Company
Act of 1940; and
(v) limit the number and frequency of transfers between Designated
Funds.
Notwithstanding anything herein to the contrary, a Participant may
direct the investment of his Accounts only in investments which are
permitted under the provisions of the Plan and Trust without regard
to Section 14.4 and which would not constitute a prohibited
transaction pursuant to the Act or Code.
(b) Notifications. Upon receipt of a Participant's written direction,
the Plan Manager shall direct the Trustee to acquire the specified
investment for the Participant's benefit.
(c) Accounting.
(i) Establishment of Directed Investment Accounts. If a
Participant directs the investment of his Accounts, the Plan
Manager shall establish for him one or more Directed
Investment Accounts, such as a Voluntary Contribution Directed
Investment Account, Company Contribution Directed Investment
Account and a Rollover Contribution Directed Investment
Account. All such accounts maintained for each Participant
shall sometimes be collectively referred to as "Directed
Investment Account" or "Directed Investment Accounts."
(ii) Account Adjustments. A Participant's Directed Investment
Accounts shall not share in Trust Fund Earnings, and
accordingly, for purposes of Section 6.4, the Adjusted Account
Balance of a Participant's Directed Investment Accounts shall
not be taken into consideration.
(iii) Valuation of Directed Investment Accounts. As of each
valuation date, subsequent to the adjustment of Participants'
Accounts under Section 6.3, the net of the earnings, gains,
losses and expenses during the Valuation Period attributable
to a Participant's Directed Investment Accounts and the net of
the appreciation or depreciation in the fair market value of
each
16
asset in such Accounts owned on the Valuation Date (as
compared to the valuation of such assets as of the preceding
Valuation Date, or cost, in the case of assets acquired since
the preceding Valuation Date) shall be credited or charged, as
the case may be, to the applicable Directed Investment Account
and shall not be considered in determining Trust Fund Earnings
pursuant to Section 6.4.
Section 6.6. Directed Investments - Operations.
(a) Investments in Designated Funds. Except as provided in Subsection
(b), each Participant shall be given the opportunity to direct the
Trustee in writing to invest all or part of such Participant's
Voluntary Contribution Account, Company Contribution Account and/or
Rollover Contribution Account in one or more Designated Funds;
provided, however, that no direction may be made which would have
the effect of investing the lesser of: (i) the Participant's entire
Account balance or (ii) $500 in any one Designated Fund. In the
event any Participant fails to direct the manner of investment of
any Voluntary Employer or Rollover Contribution, such contribution
may be invested by the Trustee in the Designated Fund specified by
the Plan Manager as the "default" Designated Fund.
(b) Real Estate Trust or Partnership Investments.
(i) As Additional Directed Investments. Notwithstanding anything
herein to the contrary, each Participant shall be given the
opportunity to request in writing that all or part of his
Voluntary Contribution, Company Contribution or Rollover
Contribution Accounts be invested in an investment medium
constituting a group trust for the investment of qualified
plan funds in real estate or real estate loan participations,
whether in the form of trust or partnership (limited or
otherwise) participations. Any such request shall be subject
to the Plan Manager's sole and absolute discretion, applied in
a uniform and nondiscriminatory manner, to approve or deny. In
considering such request, the Plan Manager may consider, among
other things, the sophistication of the Participant to
evaluate the type of investment in question, the potential
impact upon the Participant or his beneficiaries of a
temporarily illiquid investment, and the portion of the
Participant's Accounts which he requests be invested in such
manner.
(ii) Automatic Election of Deferred Distribution. Because the
investments permitted under this Subsection 6.6(b) are, in
general, less liquid than other investments, any request for
directed investment under Subsection 6.6(b) shall contain the
Participant's election of a deferred distribution date, such
date being later than his Termination of Employment date but
not later than his required commencement date under Section
7.4(a). The Participant shall indicate on his written request
whether his election to defer applies to his entire
nonforfeitable interest in the Plan or only to such part as
may be invested under this Subsection 6.6(b).
17
(c) Procedures. Investments in Designated Funds may be shifted by a
Participant from one such fund to another in accordance with the
following procedure:
(i) The Participant shall direct the Plan Manager in writing to
cause the Trustee to withdraw a specified amount from one
Designated Fund and invest it in another Designated Fund.
(ii) Such direction shall be effective as soon as administratively
feasible after the date the Plan Manager receives such
direction.
(iii) No other shifting of investments shall be permitted except as
provided for by the Plan Manager in rules it establishes under
Section 6.5(a).
ARTICLE VII.
Vesting and Payment of Benefits
Section 7.1. Normal Retirement Date. The "Normal Retirement Date" of a
Participant shall be the date on which he attains age 65. A Participant who
continues employment beyond his Normal Retirement Date shall continue to
participate herein.
Section 7.2. Disability Retirement. "Disability Retirement" shall mean the
Participant's Termination of Employment because of disability. A Participant
will have a "disability" for this purpose if, on account of physical or mental
disability, he no longer is capable of performing the duties assigned to him
and, in the opinion of a physician selected by the Plan Manager, such disability
will continue indefinitely or for a substantial period of time.
Section 7.3. Vesting.
(a) Company Contribution Account.
(i) Based upon Service. Subject to the provisions of this Article
and based upon his Vesting Years of Service (determined
pursuant to Section 7.6), each Participant shall have a
nonforfeitable right in the following percentage of his
Company Contribution Account:
Vesting Years of Service Percentage
------------------------ ----------
Less than 2 years 0%
2 years but less than 3 years 33-1/3%
3 years or more 100%
(ii) Full Vesting. Notwithstanding a Participant's Vesting Years of
Service, he shall have a nonforfeitable right in 100% of his
Company Contribution Account upon his Termination of
Employment:
(A) by reason of his death;
18
(B) by reason of his Disability Retirement; or
(C) on or after his Normal Retirement Date.
(b) Forfeitures.
If a Participant's nonforfeitable right in his Company Contribution
Account is not 100% on his Termination of Employment, the
forfeitable portion in his Company Contribution Account will be
transferred to a Forfeiture Suspense Account as of the last day of
the Plan Year coincident with or next following his Termination of
Employment. The Forfeiture Suspense Account will be invested in the
"default" Designated Fund described in Section 6.6(a) and each
former Participant's interest in the Forfeiture Suspense Account
will be separately accounted for. Investment earnings on the
Forfeiture Suspense Account shall be treated as Trust Fund Earnings
under Section 6.4.
If a former Participant who had an amount transferred to the
Forfeiture Suspense Account becomes a Participant again before he
has five consecutive One Year Breaks in Service following his
Termination of Employment, then his interest in the Forfeiture
Suspense Account will be credited back to his Company Contributions
Account as of the date he becomes a Participant again.
If a former Participant who had an amount transferred to the
Forfeiture Suspense Account does not become a Participant again
before he has five consecutive One Year Breaks in Service following
his Termination of Employment, then his interest in the Forfeiture
Suspense Account will be treated as a Forfeiture as of the last day
of the Plan Year coincident with the date he has five consecutive
Breaks in Service.
(c) Special Rule for Forfeitures Upon Cashout of Small Account Balance.
Notwithstanding the above, if a Participant has a Termination of
Employment, and, pursuant to Section 7.4(a), receives an automatic
lump sum distribution because the total nonforfeitable balance in
the Participant's Accounts does not exceed $5,000 ($3,500 in Plan
Years beginning before January 1, 1998), then there shall not be any
transfer of the forfeitable portion of the Participant's Company
Contribution Account to a Forfeiture Suspense Account; instead that
forfeitable portion shall be treated as an immediate Forfeiture as
of the Valuation Date that is used to determine the amount of the
distribution to the Participant.
For any Forfeiture described in this Section 7.3(c), if the former
Participant becomes a Participant again before he has five
consecutive One Year Breaks in Service following his Termination of
Employment, and if the returning Participant repays to the Plan the
amount of his previous distribution from the Plan, pursuant to
procedures established by the Plan Manager that are in accordance
with the requirements of Section 411(a)(7) of the Code, then the
amount of
19
the Participant's Forfeiture will be restored to his Company
Contributions Account as of the date he becomes a Participant again.
Any amount necessary to make such a restoration will be taken first
from the Forfeitures that are allocable in the Plan Year in which
the Participant again becomes a Participant. If the Forfeitures
available for this purpose are insufficient, the Company shall make
a timely supplemental contribution to the Plan in an amount
sufficient to allow the restoration.
(d) Application of Forfeitures. Subject to Section 7.3(c), Forfeitures
occurring as of the last day of a Plan Year shall be allocated among
and credited to the Company Contribution Accounts of Participants in
accordance with the provisions of Section 4.4 for the Plan Year in
which the Forfeitures occur. All earnings on any Forfeiture Suspense
Account for a Plan Year shall be treated as Forfeitures occurring on
the last day of that Plan Year and allocated as described in the
previous sentence.
Section 7.4. Payments to Participants.
(a) Commencement of Benefits. Except as provided below in this Section,
distribution of the nonforfeitable portion of a Participant's
Accounts shall be made or commence (in accordance with Article VIII)
within a reasonable time after the date of his Termination of
Employment, but not later than 60 days after (i) the end of the Plan
Year in which such date occurs, or (ii) such later date on which the
amount of the payment can be ascertained by the Plan Manager. If the
nonforfeitable balance in the Participant's Accounts exceeds $5,000
($3,500 in Plan Years beginning before January 1, 1998),
distributions may not be made to the Participant's Normal Retirement
Age without his written consent.
A Participant's Accounts shall be distributed, or commence to be
distributed, by April 1 of the calendar year next following the
calendar year in which the Participant's Termination of Employment
occurs (his "required commencement date"). Notwithstanding the
preceding sentence, the required commencement date of a Participant
who is (i) a 5% owner of an Employer (within the meaning of Article
XIX), or (ii) a Participant who will attain age 70 1/2 before
January 1, 1999, must be no later than April 1 of the calendar year
following the calendar year in which the Participant attains age 70
1/2, even if he is still employed; provided, however that the Plan
Manager may, on a uniform basis, permit Participants (other than
such 5% owners) who reach age 70 1/2 in 1997 or 1998 to elect to
receive their payments without regard to this sentence."
(b) Failure to Request Distribution. If a Participant fails to submit a
distribution request form by the last date permitted under this
Article VII, a notice shall be issued to his last known address as
soon as administratively possible. If the Participant cannot be
located, his Accounts determined on the Valuation Date which
immediately precedes the latest date of distribution permitted under
this Article VII (called the "Default Valuation Date") shall be held
for a period of two
20
years beginning on the Default Valuation Date. If the Accounts are
not claimed by the Valuation Date that follows the Default Valuation
Date by two years, the Accounts shall be treated as a Forfeiture and
shall be applied as a Forfeiture for the period in which it arises
pursuant to Article IV. If the Participant subsequently files a
claim for benefits under the Plan, the amount forfeited shall be
reinstated to his Accounts and distributed, and such payment shall
be accounted for by charging it against Forfeitures arising during
the Plan Year which have not been allocated or by a special
contribution from an Employer as determined by the Plan Manager. The
foregoing procedure shall also apply to Accounts payable to a
Beneficiary under the provisions of Article IX.
(c) Distribution at Age 59-1/2. A Participant who has attained age
59-1/2 and is credited with three Vesting Years of Service (as
defined in Section 7.6(a)) may request a distribution of the
nonforfeitable portion of the Participant's Accounts which shall be
distributed in accordance with this Article VII and Article VIII
during the 6-month period following the last day of the Plan Year
during which the Participant requests such distribution or earlier,
if administratively feasible.
Section 7.5. Direct Rollovers from the Plan.
(a) To Eligible Retirement Plan. Upon the written request of (A) a
Participant, (B) the Spouse of a Participant entitled to receive
payments after the Participant's death, or (C) the Spouse or former
spouse of a Participant who is an alternate payee under a Qualified
Domestic Relations Order (as defined in Section 414(p) of the Code),
the Plan Manager shall direct the Trustee to transfer any "Eligible
Rollover Distribution" (as defined in Section 402(c)(4) of the Code)
directly to the trustee of an "Eligible Retirement Plan" (as defined
below) of such Participant in a lump sum in accordance with Article
VIII. Such distribution shall not be made unless the Participant
specifies the Eligible Retirement Plan to which such distribution is
to be paid. An "Eligible Retirement Plan" means an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the
Code (other than an endowment contract), an annuity plan described
in Section 403(a) of the Code, or an employee's trust described in
Section 401(a) of the Code which is exempt from tax under Section
501(a) (but only if the plan which is funded by such employee's
trust is a defined contribution plan, the terms of which permit the
acceptance of rollover distributions). Notwithstanding the
foregoing, if the distributee is the Spouse of the Participant
receiving the distribution after the Participant's death, the
definition of an "eligible retirement plan" shall include only an
individual retirement account described in Section 408(a) of the
Code or an individual retirement annuity described in Section 408(b)
of the Code.
Section 7.6. Vesting Years of Service.
(a) Vesting Year of Service Defined. A "Vesting Year of Service" means
any Plan Year during which an Employee or Participant completes
1,000 or more Hours of
21
Service with an Employer. In addition, Vesting Years of Service
shall include (i) Vesting Years of Service credited to Transferred
Employees for vesting purposes under the Prior Plan, and (ii)
Vesting Years of Service based on Hours of Service described in
Section 2.5.
(b) Determination of Vesting Years of Service. For purposes of Section
16.2, all of a Participant's Vesting Years of Service shall be taken
into account. For all other purposes, the following rules shall
apply:
(i) Reemployment before One Year Break in Service. If an Employee
has a Termination of Employment and is reemployed before he
incurs a One Year Break in Service, his Vesting Years of
Service will not be deemed to have been interrupted during
such year and, if he was a Participant in the Plan, he will
continue as such upon his reemployment if he then meets the
requirements of Section 3.1.
(ii) Reemployment after One Year Break in Service. If a Participant
is reemployed following his Termination of Employment, he will
recommence participation as provided in Section 3.4. If an
Employee who is not a Participant in the Plan is reemployed
following his Termination of Employment, his eligibility for
participation shall be determined in accordance with Section
3.1. The Vesting Years of Service accrued prior to Termination
of Employment by a Participant who had no nonforfeitable right
in his Company Contributions Account, or by an Employee who
was not a Participant, shall be disregarded for purposes of
Section 7.3 only if his number of consecutive Breaks in
Service occurring after his Termination of Employment equal or
exceed five. In the case of a Participant who has five
consecutive Breaks in Service, his Vesting Years of Service
accrued after such five consecutive Breaks in Service shall be
disregarded for purposes of determining his nonforfeitable
right in the balance of his Company Contribution Account (as
adjusted by Trust Fund Earnings) that accrued before such
breaks, but both pre-break and post-break service will count
for the purposes of determining his nonforfeitable right in
the balance of his Company Contribution Account balance that
accrues after such breaks.
ARTICLE VIII.
Settlement Options
Section 8.1. Methods of Distribution. Distribution by the Trustee of the
nonforfeitable portion of a Participant's Accounts will be made or commence at
the time prescribed by Article IV or Article VII in any one or a combination of
the following methods:
(a) a lump sum;
22
(b) a fixed number of substantially equal annual or more frequent
installments over a period not exceeding the life expectancy of the
Participant or the joint life expectancy of the Participant and his
beneficiary; provided that, if such beneficiary is not the
Participant's Spouse and is more than 10 years younger than the
Participant, the installments shall be paid over a period not
exceeding the joint life expectancy of the Participant and a
beneficiary 10 years younger than the Participant; or
(c) a fixed number of annual installments each of which is equal to the
balance in the Participant's Accounts as of the Valuation Date
preceding such installment multiplied by a fraction, the numerator
of which is one and the denominator of which is the number of
remaining installments; provided, however, that the present value of
the distributions to the Participant, based on his life expectancy
at the date the distributions commence, shall exceed 50% of the then
present value of the total distributions to be made to the
Participant and his beneficiaries; or
(d) pursuant to Subparagraph 7.5 of the Plan, a direct rollover to an
eligible retirement plan of the portion of the Participant's
Accounts that qualifies for such a direct transfer.
Each Participant may designate the method of distribution, and may also permit
his Beneficiary to designate the method of distribution. If a Participant fails
to specify a method of distribution to his Beneficiary, the Beneficiary shall
designate the method of distribution to be made to such Beneficiary. The life
expectancy of a Participant, his Spouse or his designated Beneficiary shall be
determined by use of the expected return multiples contained in the regulations
under Section 72 of the Internal Revenue Code. If a Participant so elects, the
life expectancy of the Participant and his Spouse shall be recalculated
annually. In the absence of such an election, life expectancies shall not be
recalculated.
Section 8.2. Medium of Payment. The Plan Manager may direct the Trustee to
make distributions in cash or in property, or partly in each, provided property
is distributed at its fair market value on the date of distribution.
Section 8.3. Date for Determining Value of Account Balance.
Notwithstanding the date or dates upon which distributions from a Participant's
Accounts are made, such distributions shall be based upon the value of his
Accounts as of the Valuation Date as of which distributions are made under
Section 7.4.
ARTICLE IX.
Beneficiaries
Section 9.1. Payment on Death of a Participant Who Is Not Married. On the
death, either before or after his Normal Retirement Date, of a Participant who
does not have a surviving spouse, the Participant's Accounts shall be paid in
accordance with Article VIII to the Beneficiary or Beneficiaries designated by
the Participant. The Participant may change such
23
designation of Beneficiary from time to time by filing a new Beneficiary
designation form with the Plan Manager. No designation of Beneficiary or change
of Beneficiary shall be effective until filed with the Plan Manager. If a
Participant shall fail to file a valid Beneficiary designation form, or if all
persons designated on the Beneficiary designation form shall have predeceased
the Participant, the Trustee shall distribute such Participant's Accounts in one
lump sum to his estate.
Section 9.2. Payment on Death of a Married Participant. On the death,
either before or after his Normal Retirement Date, of a Participant who has a
surviving spouse, the Participant's Accounts shall be paid in accordance with
Article VIII to such surviving spouse, notwithstanding any prior Beneficiary
designation, unless such surviving spouse consents to such prior Beneficiary
designation. Such consent shall be effective only with respect to a Beneficiary
designation if it (i) is in writing; (ii) acknowledges the effect of such
election; (iii) acknowledges the Beneficiary designated; and (iv) is witnessed
by the Plan Manager (or its delegate) or a notary public. In the event of a
valid consent, the Participant's Accounts shall be paid in accordance with
Article VIII to such Beneficiary or Beneficiaries. Provided the Participant's
spouse consents thereto in the manner described herein, a Participant may change
such designation of Beneficiary from time to time by filing a new Beneficiary
designation form with the Plan Manager. No designation of a Beneficiary or
change of Beneficiary shall be effective until filed with the Plan Manager. If a
Participant shall fail to file a valid Beneficiary designation form, or if all
persons designated in the Beneficiary designation form shall have predeceased
the Participant, the Trustee shall distribute such Participant's Accounts in one
lump sum to his surviving spouse.
Section 9.3. Minors and Persons under Other Legal Disability.
Distributions to a minor or a person under other legal disability shall be made
by the Trustee at the direction of the Plan Manager:
(a) to either one or both of the natural or adoptive parents, the legal
guardian or conservator of such person, or any other person in loco
parentis to such person;
(b) to a custodian for such person under any Uniform Gifts to Minors Act
or Gifts of Securities to Minors Act; or
(c) by expenditures for the education and support of such person.
Section 9.4. Limitation When Death Occurs before Retirement Benefits
Commence. If a Participant dies before his required commencement date (as
defined in Subsection 7.4(a)), the Accounts payable with respect to such
Participant shall be fully distributed, in accordance with and subject to the
terms of this Article IX, within five years after the Participant's death,
except that such five-year limitation shall not apply with respect to any
Accounts payable to or for a Beneficiary who is a "designated Beneficiary" under
Section 401(a)(9)(E) of the Code which are to be distributed over the
Beneficiary's life expectancy, provided such Accounts commence to be paid not
later than one year after the Participant's death. If the Beneficiary is the
Participant's Spouse, the date by when distributions of the Accounts must
commence to be paid may be deferred until the date on which the Participant
would have attained age 70-1/2, had he survived,
24
provided that if the Spouse shall die before distribution commences, the
Accounts shall be paid not later than five years after the date of the Spouse's
death. An amount payable to a child as a Beneficiary shall be treated as if paid
to the Spouse if such amount shall become payable to the Spouse upon the child's
reaching majority. If a Beneficiary shall fail to request a distribution of any
death benefits provided under this Article IX, such death benefits shall be paid
in accordance with the procedure described in Subsection 7.4(b).
Section 9.5. Limitation When Death Occurs after Benefits Commence. If a
Participant shall die before his Accounts have been distributed to him in their
entirety but after his required commencement date, the remaining portion of his
Accounts shall be distributed at least as rapidly as under the method in effect
at the time of his death, any provision herein to the contrary notwithstanding.
Section 9.6. Minimum Distribution Requirements. Notwithstanding the
foregoing, all distributions under the Plan shall comply with the requirements
of Section 401(a)(9) of the Internal Revenue Code and the regulations
thereunder.
ARTICLE X.
Insurance Policies
No Plan assets shall be invested in individual life insurance contracts.
ARTICLE XI.
Loans to Participants
Section 11.1. Limitation. If the Plan Manager, in his sole discretion,
determines that Trust Fund assets should be invested in loans to Participants,
he may, upon the application of any Participant who has completed three (3) or
more Vesting Years of Service, and in accordance with a uniform and
nondiscriminatory policy, direct the Trustee to make a loan or loans to such
Participant. The amount of any loan granted hereunder, when added to the
outstanding balance of all other loans from the Plan or a plan maintained by an
Employer, shall not exceed the lesser of (a) $50,000, reduced by the excess (if
any) of the highest outstanding balance during the one-year period ending
immediately preceding the date of the loan over the outstanding balance on the
date of the loan of all such loans from all such plans, or (b) 50% of the sum of
a Participant's vested Accounts at the time such loan is made to the
Participant. The term of any loan granted hereunder shall not exceed 60 months
except that such 60-month limit shall not apply to any loan, or portion thereof,
used to acquire a principal residence of the Participant.
Section 11.2. Repayment -- Collection. Any such loan or loans shall be
repaid by the Participant in such manner as the Plan Manager shall determine
including but not limited to payroll deductions authorized by the Participant,
and shall require substantially level amortization (with payments at least
quarterly) over the term of the loan.
25
Section 11.3. Interest. All such loans shall be considered investments of
such Participants' Accounts, and interest shall be charged at a rate not less
than the "prime rate" for prime borrowers then being charged for loans of the
same duration and amount, such rate to be adjusted to the prime rate in effect
at the beginning of each calendar quarter thereafter; provided, that in no event
shall the rate of interest on any loan exceed that permissible under applicable
State usury laws.
Section 11.4. Security. Each such loan shall be evidenced by a note,
payable to the order of the Trustee, for the amount of the loan including
interest. Such loan shall be secured by adequate collateral, subject to the
following:
(a) Notwithstanding the provisions of Section 18.1, the collateral shall
include the assignment of all of the Participant's then existing and
thereafter acquired nonforfeitable rights in his Accounts except to
the extent other collateral is provided by the Participant. By
accepting the loan, the Participant automatically assigns, as
security for the loan, such nonforfeitable rights in his Accounts.
(b) If any loan, when added to the outstanding balance of any other
loans made to the Participant, exceeds the value of the collateral
described in Subsection (a), then the Participant shall pledge
additional collateral of sufficient value to adequately secure
repayment of such loans.
Section 11.5. Loan Procedures. The Plan Manager may adopt and
administer such Loan Procedures as it determines are necessary to effect this
Article XI and which are not inconsistent with Department of Labor Regulation
Section 2550.408b-1.
ARTICLE XII.
Plan Management
Section 12.1. General Rights, Powers and Duties of Plan Manager. The Plan
Manager shall be responsible for the management, operation and administration of
the Plan. In addition to any powers, rights and duties set forth elsewhere in
the Plan, he shall:
(a) adopt such rules and regulations consistent with the provisions of
the Plan as he deems necessary for the proper and efficient
administration of the Plan;
(b) enforce the Plan in accordance with its terms and any rules and
regulations he establishes;
(c) maintain records concerning the Plan adequate to prepare reports,
returns and other information required by the Plan or by law;
(d) construe disputed, doubtful or uncertain terms under the Plan and
interpret the Plan to determine all benefits and resolve all
questions pertaining to the administration, interpretation and
application of the Plan provisions;
26
(e) direct the Trustee as to the payment of benefits under the Plan and
give such other directions and instructions necessary for the proper
administration of the Plan;
(f) employ or retain agents, attorneys, actuaries, accountants or other
persons (who also may be employed by or represent the Company).
(g) respond to Qualified Domestic Relations Orders in the manner
described in Section 18.11.
Section 12.2. Plan Manager.
(a) The Plan Manager shall be a committee of at least three members as
designated in writing by the Company. Any member of the committee
may resign upon 30 days' prior written notice to the Company. The
Company may remove any member of the committee by written notice to
him, and the Trustee. The Company shall fill any vacancy as soon as
possible in the committee and shall give written notice thereof to
the Trustee. In the interim, the other members of the committee
shall have full authority to act. If at any time there is no person
appointed or serving as Plan Manager, then the Board of the Company
shall serve as Plan Manager.
(b) All actions of the Plan Manager shall be taken pursuant to the
decision of a majority of the committee which then is the Plan
Manager. Any member of the committee which is the Plan Manager may
execute any document in the name of and on behalf of the Plan
Manager.
(c) The committee serving as Plan Manager may adopt such rules and
procedures as it deems necessary for its operations.
Section 12.3. Fiduciary Obligations. Subject to the provisions of Article
XV, the Plan Manager (and any other fiduciary with respect to the Plan) shall
discharge his duties hereunder solely in the interest of the Participants and
their beneficiaries and --
(a) for the exclusive purposes of:
(i) providing benefits to Participants and their beneficiaries;
and
(ii) defraying reasonable expenses of administering the Plan and
Trust; and
(b) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of like character and with like aims.
Section 12.4. Information to Be Furnished to Plan Manager. The Employers
shall furnish the Plan Manager such data and information as it may require. The
records of the Employers shall be determinative as to an Employee's or
Participant's period of employment,
27
Termination of Employment and the reason therefor, leave of absence,
reemployment and Compensation. Participants and their beneficiaries shall
furnish to the Plan Manager such evidence, data or information and execute such
documents as the Plan Manager requests.
Section 12.5. Uniform Application. In managing, operating and
administering the Plan, the Plan Manager shall apply the provisions of the Plan
and any rules and procedures adopted by it in a uniform and nondiscriminatory
manner so that all persons similarly situated shall be similarly treated.
Section 12.6. Allocation and Delegation of Certain Fiduciary Duties.
(a) If there shall be more than one person serving as Plan Manager, the
Company may allocate any of the rights, powers and duties of the
Plan Manager hereunder among the persons serving as Plan Manager.
Such allocation shall be in writing, shall be signed by the Company
and all persons serving as Plan Manager and shall set forth the
particular rights, powers and duties being allocated and to which
person they are being allocated. The Company may revoke any
allocation made pursuant to this Subsection by written notification
to all persons serving as Plan Manager.
(b) The Plan Manager, shall have the authority to delegate any of his
rights, powers and duties hereunder. Such delegation shall be in
writing, shall be signed on behalf of the Plan Manager and the
person or persons being designated, and shall set forth the rights,
powers and duties being delegated. The Plan Manager may revoke any
delegation made pursuant to this Subsection by written notification
to the person or persons to whom the delegation has been made [and
to the Company (if the revocation is made by the Plan Manager) or to
all persons serving as Plan Manager (if the revocation is made by
the Company).]
(c) Copies of all instruments allocating or delegating rights, powers
and duties of the Plan Manager or the revocation thereof shall be
provided to the Trustee, at the Trustee's request, by the Company.
Section 12.7. Funding Policy. The Plan Manager shall verify that the
annual contributions of the Employers are made in the form, time and manner
consistent with the provisions of the Plan.
Section 12.8. Compensation and Expenses. The Employers shall pay the
expenses of the Plan Manager and, if such are not paid by the Employers, such
expenses shall be paid when due from the Trust Fund; provided, however, that any
person serving as Plan Manager who is an Employee of the Company or a Related
Entity shall not be entitled to any compensation for his services as Plan
Manager from the Trust Fund or the Employers, except for the reimbursement of
expenses properly and actually incurred.
Section 12.9. Indemnification of the Plan Manager by the Employers. To the
extent permitted by law, the Employers hereby agree to indemnify each member of
the committee which
28
is the Plan Manager who is also an employee of the Company or a Related Entity
for and to hold him harmless against any and all liabilities, losses, costs or
expenses (including legal fees and expenses) of whatsoever kind and nature which
may be imposed on, incurred by or asserted against him at any time by reason of
his service under the Plan if he did not act dishonestly or otherwise in willful
violation of the law under which such liability, loss, cost or expense arises.
This indemnity shall not preclude such other indemnities as may be available
under insurance purchased or provided by the Employers or under any by-law,
agreement, action of stockholders or disinterested directors or otherwise, to
the extent permitted by law. Payments of any indemnity, expenses or fees under
this Section shall be made solely from assets of the Employers and shall not be
made directly or indirectly from Trust Fund assets.
Section 12.10. Limitation on Responsibilities. The functions of any agent,
attorney, actuary, accountant or other person engaged pursuant to Section
12.1(f) shall be limited to the specific services and duties for which they are
engaged, and such persons shall have no other duties or obligations under the
Plan or Trust. Such persons shall exercise no discretionary authority or
discretionary control respecting management of the Plan and Trust and, unless
engaged as the Qualified Investment Manager, shall exercise no authority or
control respecting management or disposition of the assets of the Trust. A
member of the committee which is the Plan Manager who is an employee of the
Company or a Related Entity shall be free from all liability for his acts and
conduct in the administration of the Plan and Trust except for acts of willful
misconduct; provided, however, that the foregoing shall not relieve him from any
responsibility or liability for any responsibility, obligation or duty he may
have pursuant to ERISA.
Section 12.11. Agent for Service of Process. Any officer of the Company
may be designated as the agent for service of process with respect to the Plan.
ARTICLE XIII.
Claims for Benefits
Section 13.1. Claim for Benefits. Any claim for benefits under the Plan by
a person (a "claimant") shall be made in writing to the Plan Manager. If such
claim for benefits is wholly or partially denied by the Plan Manager, it shall,
within a reasonable period of time, but no later than 60 days after receipt of
the claim, notify the claimant of the denial of the claim. Such notice of denial
shall be in writing and shall contain (a) the specific reason or reasons for
denial of the claim, (b) a specific reference to the pertinent Plan and Trust
provisions upon which the denial is based, (c) a description of any additional
material or information necessary for the claimant to perfect the claim,
together with an explanation of why such material or information is necessary
and (d) an explanation of the Plan's claim review procedure.
Section 13.2. Request for Review of a Denial of a Claim for Benefits. Upon
the receipt by the claimant of the written notice of denial of the claim or if
the claim has not been granted within 60 days, the claimant may, not later than
90 days thereafter, file a written request with the Plan Manager that the Plan
Manager conduct a full and fair review of the denial of the claimant's claim for
benefits, which shall include a hearing if deemed necessary by the Plan Manager.
In
29
connection with the claimant's appeal of the denial of his claim, he may review
pertinent documents and may submit issues and comments in writing.
Section 13.3. Decision upon Claim for Review of a Denial of a Claim for
Benefits. The Plan Manager shall render a decision on the claim review promptly,
but not later than 60 days after the receipt of the claimant's request for
review, unless special circumstances (such as the need to hold a hearing, if
necessary) require an extension of time for processing, in which case the 60-day
period shall be extended to 120 days. Such decision shall (a) include specific
reasons for the decision, (b) be written in a manner calculated to be understood
by the claimant and (c) contain specific references to the pertinent Plan and
Trust provisions upon which the decision is based.
ARTICLE XIV.
Trustee Powers, Rights and Duties
Section 14.1. Exclusive Authority. Subject entirely to Sections 6.5 and
6.6, the Trustee shall have the authority and discretion to manage and control
the Trust Fund assets.
Section 14.2. General Powers. Subject to the provisions of Section 14.4,
the Trustee shall have the following powers, rights and duties with respect to
the Trust Fund in addition to those provided elsewhere in the Plan and Trust or
by law:
(a) To receive and hold all contributions paid to him under the Plan;
provided, however, that he shall have no duty to require any
contributions to be made to him or to determine that the
contributions he receives comply with the Plan and Trust or with any
resolution of the Board of the Company.
(b) Subject to the provisions of Sections 6.5 and 6.6, to invest and
reinvest the Trust Fund assets in bonds, notes, mortgages,
commercial paper, preferred or common stocks, mutual funds or other
securities, rights, obligations or other property, real or personal,
including shares of participation issued by investment companies or
investment trusts; to engage in the writing, sale, purchase and
exercise of covered call and put option contracts; and to loan money
to a Participant pursuant to the provisions of Article XI.
(c) To manage, sell, contract to sell, grant options with respect to,
convey, exchange, partition, transfer, abandon, improve, repair,
insure, lease for any term (although commencing in the future or
extending beyond the term of this Trust), mortgage or pledge and
otherwise deal with all property, real or personal, in such way, for
such considerations and on such terms and conditions as he decides.
(d) To borrow money with or without mortgaging or pledging the assets of
the Trust Fund.
30
(e) To retain in cash a portion of the Trust Fund either awaiting
investment or to meet contemplated payments of benefits hereunder
and to deposit funds (in savings accounts or checking accounts) in
any financial institution supervised by the United States or a State
including, if the Trustee is a bank, its own banking department.
(f) To make payments from the Trust Fund to such persons, in such
manner, at such times and in such amounts as the Plan Manager shall
direct without inquiring as to whether a payee is entitled to the
payment, or as to whether a payment is proper, and without liability
for a payment made in good faith without actual notice or knowledge
of the changed condition or status of the payee.
(g) To compromise, contest, arbitrate, settle or abandon claims and
demands.
(h) To begin, maintain or defend any litigation necessary in connection
with the investment, reinvestment and administration of the Trust
Fund.
(i) To have all rights of an individual owner, including the powers to
give proxies to vote stocks, to join in or oppose (alone or jointly
with others) voting trusts, mergers, consolidations, foreclosures,
reorganizations, recapitalizations or liquidations, and to exercise
or sell stock subscription or conversion rights.
(j) To hold securities or other property in his name as Trustee or in
the name of his nominee or nominees, or in such other form as he
determines best, with or without disclosing the Trust relationship
and to execute such documents as are necessary to accomplish the
foregoing; provided, however, that (i) the records of the Trustee
shall indicate the actual ownership of such securities or other
property, and (ii) except as authorized by regulations promulgated
by the Secretary of the United States Department of Labor, he shall
not maintain the indicia of ownership of any assets of the Trust
Fund outside the jurisdiction of the district courts of the United
States.
(k) If a bank is acting as Trustee, to deposit securities with a
clearing corporation. The certificates representing securities,
including those in bearer form, may be held in bulk form with, and
may be merged into certificates of the same class of the same issuer
which constitute assets of other accounts or owners without
certification as to the ownership attached. Utilization of a
book-entry system may be made for the transfer or pledge of
securities held by the Trustee or by a clearing corporation. The
Trustee shall at all times, however, maintain a separate and
distinct record of the securities owned by the Trust Fund.
(l) If a bank is acting as Trustee, to participate in and use the
Federal Book-Entry Account System, a service provided by the Federal
Reserve Bank for its member banks for deposit of Treasury
securities.
31
(m) To retain any funds or property subject to any dispute without
liability for the payment of interest, or to decline to make payment
or delivery thereof until final adjudication is made by a court of
competent jurisdiction.
(n) To report to the Plan Manager and the Company on each Valuation Date
(or as soon thereafter as practicable), or at such other times as
may be required under the Plan, the Trust Fund Earnings and the net
worth of the Trust Fund, that is, the fair market value of all
property held in the Trust Fund, reduced by any liabilities other
than liabilities to Participants in the Plan and their
beneficiaries.
(o) To furnish to the Plan Manager and the Company a written accounting
for each Valuation Period detailing all investments, receipts,
disbursements and other transactions of the Trust Fund during such
Period, and such other information as the Trustee may possess which
the Plan Manager and the Company require in order to prepare reports
and returns required under the Plan or by law. All accounts of the
Trustee shall be kept on a cash basis. If the Department of Labor
prescribes regulations under ERISA regarding the valuation of
securities or other assets for purposes of the reports required by
ERISA, the Trustee shall use such valuation methods for purposes of
the accounting described by this Subparagraph.
(p) To require before making any payment such release or other document
from any taxing authority and such indemnity from the intended payee
as he deems necessary for his protection.
(q) To employ or retain agents, attorneys, accountants or other persons
(who also may be employed by or represent the Company).
(r) To pool all or any of the assets of this Trust Fund from time to
time with assets of any other qualified plan and exempt trust under
Sections 401(a) and 501(a), respectively, of the Code created by the
Company and to commingle such assets and make joint or common
investments and carry joint accounts on behalf of this Trust and
such other trust or trusts, allocating undivided shares or interests
in such investments or accounts or in any pooled assets to the two
or more trusts in accordance with their respective interests. The
Trustee may also buy or sell any assets or undivided interests
therein, in this Trust or in any other trust with which the assets
of this Trust may be pooled, to or from this Trust or such other
trusts.
(s) To assume, until advised to the contrary, that the Plan and Trust is
qualified under Section 401(a) of the Code and exempt from tax under
Section 501(a) thereof.
(t) To perform any and all other acts in his judgment necessary or
appropriate for the proper and advantageous management, investment
and distribution of the Trust Fund.
(u) To invest all or any part of the assets of the Trust Fund in any
collective investment trust which then provides for the pooling of
the assets of plans and
32
trusts qualified under Section 401(a) of the Code and exempt from
tax under Section 501(a) thereof (whether or not such collective
investment trust provides for the pooling of assets of other
tax-exempt trusts), provided that such collective investment trust
is exempt from tax under the Code. The provisions of the document
governing such collective investment trust as it may be amended from
time to time shall govern any investment therein and are hereby made
a part hereof.
Section 14.3. Directions to Trustee. The Plan Manager shall advise the
Trustee of any events which require the taking of any action by the Trustee
under this Agreement. When any person serving as Trustee is not an Employee of
the Company or a Related Entity, the Secretary of the Company will certify to
the Trustee from time to time the person or persons who are the Plan Manager,
and the Trustee may rely on the latest certificate without further inquiry or
verification.
Section 14.4. Fiduciary Obligations. Subject to the provisions of Article
XV, the Trustee (and any other fiduciary with respect to the Plan) shall
discharge its duties hereunder solely in the interest of the Participants and
their beneficiaries and --
(a) for the exclusive purposes of:
(i) providing benefits to Participants and their beneficiaries;
and
(ii) defraying reasonable expenses of administering the Trust;
(b) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of like character and with like aims; and
(c) by diversifying investments of the Trust Fund so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
Section 14.5. Allocation of Trustee Responsibilities, Obligations and
Duties. If there is more than one Trustee, they shall jointly manage and control
the assets of the Trust Fund unless the Company shall by an agreement in
writing, signed by the Company and the Trustees, allocate specific
responsibilities, obligations or duties among them. The Company shall deliver a
copy of such agreement to the Plan Manager.
Section 14.6. Compensation and Expenses. The Trustee is authorized to pay
from the Trust Fund all of his expenses, taxes and charges (including fees of
persons employed or retained by him) incurred in connection with the collection,
administration, management, investment, protection and distribution of the Trust
Fund and the expenses of the Plan Manager pursuant to Section 12.8 to the extent
they are not paid by the Employers. The Employers shall pay the Trustee
reasonable compensation and, if such compensation is not paid by the Employers,
it shall be paid when due from the Trust Fund; provided, however, that a Trustee
who is an employee of the Company or a Related Entity shall not be entitled to
any compensation for his services as
33
Trustee from the Trust Fund or the Employers, except for the reimbursement of
expenses properly and actually incurred.
Section 14.7. Actions by Trustees. If there shall be two or more persons
serving as Trustee, they shall act by a majority. Any person serving as Trustee
may execute any document in the name of and on behalf of the Trust Fund and the
other persons serving as Trustee.
Section 14.8. Persons Dealing with Trustee. No person contracting or in
any way dealing with the Trustee shall be under any obligation to ascertain or
inquire (a) into any powers of the Trustee, (b) whether such powers have been
properly exercised or (c) about the source or application of any funds received
from or paid to the Trustee and such person may rely on the Trustee's exercise
of any power or authority as the conclusive evidence that he possesses such
power and authority. This Section shall not apply to any person who is a
fiduciary with respect to the Plan.
Section 14.9. Indemnification of the Trustee by the Employers. To the
extent permitted by law, the Employers hereby agree to indemnify a Trustee who
is not compensated for his services as Trustee for and to hold him harmless
against any and all liabilities, losses, costs or expenses (including legal fees
and expenses) of whatsoever kind and nature which may be imposed on, incurred by
or asserted against him at any time by reason of his service under the Plan if
he did not act dishonestly or otherwise in willful violation of the law under
which such liability, loss, cost or expense arises. This indemnity shall not
preclude such other indemnities as may be available under insurance purchased or
provided by the Employers or under any by-law, agreement, action of stockholders
or disinterested directors or otherwise, to the extent permitted by law.
Payments of any indemnity, expenses or fees under this Section shall be made
solely from assets of the Employers and shall not be made directly or indirectly
from Trust Fund assets.
Section 14.10. Limitation on Responsibilities. The functions of any agent,
attorney, accountant or other person engaged by the Trustee pursuant to this
Article shall be limited to the specific services and duties for which he is
engaged and such person shall have no other duties or obligations under the Plan
and Trust. Such persons shall exercise no discretionary authority or
discretionary control respecting management of the Plan and Trust and shall
exercise no authority or control respecting management or disposition of the
assets of the Trust. Any Trustee who is not compensated for his services as
Trustee shall be free from all liability for his acts and conduct in the
management and control of the Trust Fund assets, except for acts of willful
misconduct; provided, however, that the foregoing shall not relieve him from any
responsibility or liability for any responsibility, obligation or duty he may
have pursuant to ERISA.
Section 14.11. Common Trust Fund. The fact that separate records may be
maintained for each Participant shall not be deemed to segregate for or give to
such Participant or his beneficiaries any direct interest in any specific assets
of the Trust Fund. All Trust Fund assets shall be held and administered by the
Trustee as a commingled fund.
Section 14.12. Change of Trustee.
34
(a) Resignation. A Trustee may resign at any time by giving 30 days'
advance written notice to the Company.
(b) Removal of Trustee. The Company may remove any Trustee by giving
written notice to him, and if the removed Trustee is the sole
Trustee at the time of his removal, the Company shall also notify
him of the identity of the successor Trustee and of the successor
Trustee's acceptance of the trusteeship.
(c) Duties of Resigning or Removed Trustee and of Successor Trustee. If
a Trustee resigns or is removed, he shall promptly transfer and
deliver the assets of the Trust Fund to the successor Trustee.
Within 120 days the resigned or removed Trustee shall furnish to the
Company, the Plan Manager and the successor Trustee an accounting of
his administration of the Trust from the date of his last
accounting. Each successor Trustee shall succeed to the title to the
Trust Fund vested in his predecessor without the signing or filing
of any further instrument, but any resigning or removed Trustee
shall execute all documents and do all acts necessary to vest such
title of record in any successor Trustee. Each successor shall have
all the powers, rights and duties conferred by this Plan and Trust
as if originally named Trustee. No successor Trustee shall be
personally liable for any act or failure to act of a predecessor
Trustee.
(d) Power to Add Trustees. The Company shall have the power, at any time
and from time to time, to add one or more Trustees by an instrument
in writing delivered to the existing Trustee and to the person being
added as Trustee.
(e) Notification to Plan Manager. Copies of all instruments involving
the resignation, removal, appointment or addition of a Trustee who
is not an Employee of the Company or a Related Entity shall be
delivered to the Plan Manager by the Company.
ARTICLE XV.
Limitation upon Reversion
Section 15.1. Exclusive Benefit. Except as otherwise provided by the Code
and this Article, no part of the corpus or income of the Trust Fund shall revert
to the Employers or be used for, or directed to, purposes other than for the
exclusive benefit of Participants and their beneficiaries and defraying
reasonable expenses of administering the Plan and Trust.
Section 15.2. Permissible Reversions.
(a) Mistake of Fact. If an Employer contribution is made to the Trust
due to a good faith mistake of fact, then within one year of the
date of payment of such Employer contribution to the Trust an amount
equal to the excess of (i) the amount of such Employer contribution
over (ii) the amount which would have been contributed had a mistake
of fact not occurred (the "Excess Contribution"),
35
shall be returned to the Employer. If Trust Fund Earnings
attributable to such Excess Contribution are a net loss, then the
amount of such Excess Contribution shall be reduced by such Trust
Fund Earnings.
(b) Disallowance of Deduction. If an Employer contribution is made to
the Trust conditioned upon its deductibility under Section 404 of
the Code and a good faith mistake is made in determining the
deductibility of such contribution, then within one year of the date
of disallowance of the deduction of such Employer contribution to
the Trust an amount equal to the excess of (i) the amount of such
Employer contribution over (ii) the amount which would have been
contributed had a mistake not occurred in determining the
deductibility of such contribution (the "Excess Contribution"),
shall be returned to the Employer. If Trust Fund Earnings
attributable to such Excess Contribution are a net loss, then the
amount of such Excess Contribution shall be reduced by such Trust
Fund Earnings.
(c) Plan Not Qualified. If the Internal Revenue Service initially
determines that the Plan does not meet the requirements of Section
401(a) of the Code, any Trust assets attributable to contributions
made by an Employer shall be returned to the Employer within one
year after the date initial qualification is denied, but only if the
application for qualification is made by the time prescribed by law
for filing the Employer's return for the taxable year in which the
Plan is adopted, or such later date as the Secretary of the Treasury
may prescribe.
ARTICLE XVI.
Amendment
Section 16.1. In General. The Plan and Trust Agreement is subject to
amendment by the Company at any time; provided, however, that no amendment
shall:
(a) vest in the Employers, directly or indirectly, any interest,
ownership or control in any assets of the Trust;
(b) with respect to an Employee who is a Participant on the later of the
date such amendment is adopted or effective, have the effect of
reducing his nonforfeitable percentage as of such date in his
Company Contribution Account; provided, however, that any rights
accrued or vested under the Plan and Trust may be adjusted among
Participants by amendments made prior to securing or in order to
secure the approval of the Plan and Trust by the Internal Revenue
Service as a qualified plan and exempt trust under Sections 401(a)
and 501(a), respectively, of the Code; or
(c) be made which affects the rights, responsibilities or duties of the
Trustee without the Trustee's written consent. A copy of any
amendment shall be delivered to the Plan Manager and the Trustee.
36
Section 16.2. Amendments to Vesting Schedule.
(a) Availability of Election. If the Plan's vesting schedule is amended,
each Participant whose nonforfeitable percentage in his Company
Contribution Account is determined under such schedule as amended,
and who has completed at least five Vesting Years of Service (prior
to the expiration of the election period described in this Section)
may irrevocably elect to have such nonforfeitable percentage
determined under the Plan without regard to such amendment. The Plan
Manager shall provide each such Participant with written notice of
the adoption of the amendment and the availability of the election.
(b) Election Requirements. The election referred to in Subsection (a)
must be in writing and must be filed with the Plan Manager during
the period beginning on the date the amendment is adopted and ending
on the latest of the following:
(i) the date 60 days after the date the amendment is adopted;
(ii) the date 60 days after the date the amendment becomes
effective; or
(iii) the date 60 days after the date the Participant is issued
written notice of the amendment by the Company or the Plan
Manager.
ARTICLE XVII.
Termination of the Plan and Trust
Section 17.1. Right to Terminate Plan and Trust. The Company reserves the
right to terminate the Plan and Trust at any time by written notification to the
Plan Manager and the Trustee. Upon receipt of such notice, the Trustee shall
proceed to pay all liabilities of the Trust other than to Participants or their
beneficiaries. On a date mutually determined by the Plan Manager and the
Trustee, the Plan Manager shall make the Account adjustments provided for by
Article VI as if such date were a Valuation Date. As soon thereafter as
practicable, the Trustee shall completely distribute each Participant's Accounts
to him or his beneficiaries.
Section 17.2. Right to Discontinue Contributions. Each Employer reserves
the right to permanently discontinue contributions to the Trust at any time by
written notification to the Plan Manager and the Trustee. Thereafter, the
provisions of the Plan and Trust shall continue in full force and effect (other
than the provisions relating to contributions by the Employers) until the
benefits of all Participants and beneficiaries have been distributed to them in
accordance with the provisions of the Plan, at which time the Plan and Trust
shall terminate.
Section 17.3. Vesting upon Termination of Plan or Complete Discontinuance
of Contributions. Upon the termination of the Plan or the complete
discontinuance of contributions by the Employers, each Participant shall have a
nonforfeitable right in 100% of his Company Contribution Account. Upon a partial
termination of the Plan each affected Participant shall have a nonforfeitable
right in 100% of his Company Contribution Account.
37
Section 17.4. Merger or Consolidation of Plan and Trust. Neither the Plan
or Trust may be merged or consolidated with, nor may their assets or liabilities
be transferred to, any other plan or trust, unless each Participant would (if
the Plan and Trust then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan and Trust had then terminated).
ARTICLE XVIII.
Miscellaneous
Section 18.1. Inalienability of Benefits. Except as may otherwise be
provided herein, the right of any Participant or beneficiary to any benefit or
payment under the Plan or Trust or to any separate account maintained as
provided by the Plan shall not be subject to voluntary or involuntary transfer,
alienation, pledge, assignment or other disposition and shall not be subject to
attachment, execution, garnishment, sequestration or other legal or equitable
process. Any attempt to transfer, alienate, pledge, assign or otherwise dispose
of such right or any attempt to subject such right to attachments, execution,
garnishment, sequestration or other legal or equitable process shall be null and
void.
Section 18.2. No Implied Rights. Neither the establishment of the Plan and
Trust nor any modification thereof, nor the creation of any fund, trust or
account, shall be construed as giving any Participant, Employee, beneficiary or
other person any legal or equitable right unless such right shall be
specifically provided for in the Plan and Trust or conferred by affirmative
action of the Employer in accordance with the terms and provisions of the Plan
and Trust.
Section 18.3. Status of Employment Relations. The adoption and maintenance
of the Plan and Trust shall not be deemed to constitute a contract between the
Employers and their Employees or to be consideration for, or an inducement or
condition of, the employment of any person. Nothing contained herein shall be
deemed to:
(a) give to any Employee the right to be retained in the employ of an
Employer;
(b) affect the right of an Employer to discipline or discharge any
Employee at any time;
(c) give an Employer the right to require any Employee to remain in its
employ; or
(d) affect any Employee's right to terminate his employment at any time.
Section 18.4. No Guarantee. Nothing contained in the Plan and Trust shall
constitute a guarantee by an Employer, Plan Manager or Trustee that the assets
of the Trust Fund will be sufficient to pay any benefit to any person. Prior to
the time that distributions are made, in conformity with the Plan and Trust, the
Participants, employees, beneficiaries or other persons shall receive no
distribution of cash or other thing of current or exchangeable value, either
from
38
the Employers, Plan Manager or Trustee, on account of, or as a result of the
Trust Fund created hereunder.
Section 18.5. Service in More Than One Capacity. Any person or groups of
persons may serve in more than one fiduciary capacity with respect to the Plan
and Trust.
Section 18.6. Actions by Company. All actions by the Company under this
Plan and Trust shall be by resolution of its Board or by a person or persons
designated by its Board.
Section 18.7. Binding Effect. The provisions of the Plan and Trust shall
be binding on the Employers, the Trustee, the Plan Manager and their successors
and on all persons entitled to benefits under the Plan and their respective
heirs, legal representatives and successors in interest.
Section 18.8. Governing Laws. The Plan and Trust shall be construed and
administered according to the laws of the State in which the Company is
incorporated to the extent that such laws are not preempted by the laws of the
United States of America.
Section 18.9. Counterparts. The Plan and Trust may be executed in any
number of counterparts, each of which shall be deemed an original, and no other
counterpart need be produced.
Section 18.10. Number and Gender. Wherever appropriate, words used in this
Plan and Trust in the singular may mean the plural, the plural may mean the
singular, and the masculine may mean the feminine or neuter.
Section 18.11. Payments Pursuant to a Qualified Domestic Relations Order.
Notwithstanding the provisions of Section 18.1, the Plan will recognize a
"Qualified Domestic Relations Order" which shall be a judgment, decree or order
(including approval of a property settlement agreement) that meets the
requirements of (a), (b) and (c) below:
(a) the order must relate to child support, alimony, property rights of
a spouse, former spouse, child or dependent of a Participant and
must be issued pursuant to a state domestic relations law;
(b) the order must include (i) the name and address of the Participant
and alternate payee, (ii) the amount or percentage of benefits
payable to the alternate payee (or the manner in which the amount or
percentage is to be determined), (iii) the period or number of
payments involved and (iv) the exact name of the plan to which the
order applies; and
(c) the order cannot require a type or form of benefit or option not
otherwise offered under the Plan, cannot require the Plan to provide
increased benefits (determined on an actuarial basis) and cannot
affect benefits already the subject of a previous Qualified Domestic
Relations Order.
39
Subsection (c) above shall be interpreted to mean that an order can require a
distribution of the portion of a Participant's Accounts that could be
immediately withdrawn upon proper application.
A Qualified Domestic Relations Order can order the Plan to commence
payments to an alternate payee as of or following the Participant's Earliest
Retirement Date, as defined in Section 414(p)(4)(B) of the Internal Revenue
Code. If the Participant dies before the above-mentioned date, benefits are
payable to the alternate payee only if the order specifically provides for such
benefits.
An alternate payee may elect any form of payment to which the Participant
would be entitled at the time of the alternate payee's benefit commencement;
provided, however, an alternate payee cannot elect to cover such alternate
payee's spouse under any joint and survivor form of payment.
The Plan Manager shall notify any Participant and alternate payee of the
receipt of any order by the Plan and shall inform such Participant and alternate
payee of the Plan's procedures for determining whether the order meets the
requirements described above in this Section 18.11. Such procedures shall comply
with the requirements set forth in Code Section 414(p) and ERISA Section 206(d).
The provisions of this Section 18.11 shall apply to payments made on or
after January 1, 1985 if such payments are made pursuant to a Qualified Domestic
Relations Order entered into before January 1, 1985, or if the Plan Manager in
its sole discretion, elects to treat an order entered into before January 1,
1985 under this Section even though such order does not satisfy the requirements
hereof.
Section 18.12. Rights of Veterans. Notwithstanding any provision of the
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. In addition, loan repayments under the Plan will be suspended as
permitted under Section 414(u) of the Code.
ARTICLE XIX.
Special Top-Heavy Rules
Section 19.1. Application. Notwithstanding any provisions of this Plan to
the contrary, the provisions of this Article XIX shall apply and be effective
for any Plan Year for which the Plan shall be determined to be a "Top-Heavy
Plan" as provided and defined herein.
Section 19.2. Special Terms. For purposes of this Article XIX, the
following terms shall have the following meanings:
(a) "Aggregate Benefit" means the sum of:
40
(i) the present value of the accrued benefit under each and all
defined benefit plans in the Aggregation Group determined on
each plan's individual Determination Date as if there were a
termination of employment on the most recent date the plan is
valued by an actuary for purposes of computing plan costs
under Section 412 of the Code within the 12-month period
ending on the Determination Date of each such plan, but with
respect to the first plan year of any such plan determined by
taking into account the estimated accrued benefit as of the
Determination Date; provided, the actuarial assumptions to be
applied for purposes of this Paragraph (i) shall be the same
assumptions as those applied for purposes of determining the
actuarial equivalents of optional benefits under the
particular plan, except that the interest rate assumption
shall be 5 percent;
(ii) the present value of the accrued benefit (i.e., account
balances) under each and all defined contribution plans in the
Aggregation Group, valued as of the valuation date coinciding
with or immediately preceding the Determination Date of each
such plan, including (A) contributions made after the
valuation date but on or prior to the Determination Date, (B)
with respect to the first plan year of any plan, any
contribution made subsequent to the Determination Date but
allocable as of any date in the first plan year, or (C) with
respect to any defined contribution plan subject to Section
412 of the Code, any contribution made after the Determination
Date that is allocable as of a date on or prior to the
Determination Date; and
(iii) the sum of each and all amounts distributed (other than a
rollover or plan-to-plan transfer) from any Aggregation Group
Plan, plus a rollover or plan-to-plan transfer initiated by
the Employee and made to a plan which is not an Aggregation
Group Plan within the Current Plan Year or within the
preceding four plan years of any such plan, provided such
amounts are not already included in the present value of the
accrued benefits as of the valuation date coincident with or
immediately preceding the Determination Date.
The Aggregate Benefit shall not include the value of any rollover or
plan-to-plan transfer to an Aggregation Group Plan, the contribution or
transfer of which was initiated by a Participant, was from a plan which
was not an Aggregation Group Plan and was made after December 31, 1983,
nor shall the Aggregate Benefit include the value of employee
contributions which are deductible pursuant to Section 219 of the Code.
(b) "Aggregation Group" means the Plan and one or more plans (including
plans that terminated) which are described in Section 401(a) of the
Code, is an annuity contract described in Section 403(a) of the Code
or is a simplified employee pension described in Section 408(k) of
the Code maintained or adopted by the Company or a Related Company
in the Current Plan Year or one of the four
41
preceding Plan Years which is either a "Required Aggregation Group"
or a "Permissive Aggregation Group".
(i) A "Required Aggregation Group" means all Aggregation Group
Plans in which either (A) a Key Employee (as defined below)
participates or (B) which enables any Aggregation Group Plan
in which a Key Employee participates to satisfy the
requirements of Section 401(a)(4) or Section 410 of the Code.
(ii) A "Permissive Aggregation Group" means all Aggregation Group
Plans included in the Required Aggregation Group, plus one or
more other Aggregation Group Plans as designated by the Board
of the Company in its sole discretion, which satisfy the
requirements of Section 401(a)(4) and Section 410 of the Code
when considered with the other component plans of the Required
Aggregation Group.
(c) "Aggregation Group Plan" means the Plan and each other plan in the
Aggregation Group.
(d) "Current Plan Year" means (i) with respect to the Plan, the Plan
Year in which the Determination Date occurs, and (ii) with respect
to each other Aggregation Group Plan, the plan year of such other
plan in which occurs the Determination Date of such other plan.
(e) "Determination Date" means (i) with respect to the Plan and its Plan
Year, the last day of the preceding Plan Year or March 31, 1984,
whichever is later; or (ii) with respect to any other Aggregation
Group Plan in any calendar year during which the Plan is not the
only component plan of an Aggregation Group, the determination date
of each plan in such Aggregation Group to occur during the calendar
year as determined under the provisions of each such plan.
(f) "Former Key Employee" means an Employee (including a terminated
Employee) who is not a Key Employee in the Current Plan Year or
during the four preceding Plan Years but who was a Key Employee at
any time prior to the four preceding Plan Years.
(g) "Key Employee" means an Employee (including a terminated Employee)
who at any time during the Current Plan Year or at any time during
the four preceding Plan Years is:
(i) an officer of an Employer whose total compensation from all
Employers during the Plan Year is greater than 50% of the
amount specified in Section 415(b)(1)(A) of the Code (as
adjusted for cost-of-living increases by the Secretary of the
Treasury) for the calendar year in which the Plan Year ends;
provided, however, that no more than the lesser of (A) 50
Employees, or (B) the greater of (i) three Employees or (ii)
10 percent
42
(rounded to the next whole integer) of the greatest number of
Employees during the Current Plan Year or any of the preceding
four Plan Years shall be considered as officers for this
purpose. Such officers considered will be those with the
greatest annual compensation as an officer during the
five-year period ending on the Determination Date;
(ii) One of the ten employees who owns (or is considered to own
within the meaning of Section 318 of the Code) more than a 1/2
percent interest in value and the largest percentage ownership
interest in value in an Employer, and whose total annual
compensation from all Employers is not less than the amount
specified in Section 415(c)(1)(A) of the Code (as adjusted for
cost-of-living increases by the Secretary of the Treasury) for
the calendar year in which the Plan Year ends;
(iii) A person who owns more than 5 percent of the value of the
outstanding stock of an Employer or more than 5 percent of the
total combined voting power of all stock of an Employer (each
Employer being considered separately); or
(iv) A person who owns more than 1 percent of the value of the
outstanding stock of an Employer or more than 1 percent of the
total combined voting power of all stock of an Employer (each
Employer being considered separately) and whose total annual
compensation (as defined in Section 1.415-2(d) of the Treasury
Regulations) from all Employers is in excess of $150,000.
The rules of Section 416(i)(1)(B) and (C) of the Code shall be applied for
purposes of determining an Employee's ownership interest in an Employer
for purposes of Subparagraphs (iii) and (iv) herein. For purposes of this
Subsection 19.2(g), "compensation" is that defined in Section 1.415-2(d)
of the Treasury Regulations and "value" means fair market value. A
beneficiary (who would not otherwise be considered a Key Employee) of a
deceased Key Employee shall be deemed to be a Key Employee in substitution
for such deceased Key Employee.
(h) "Top-Heavy Plan" means the Plan with respect to any Plan Year if the
Aggregate Benefit of all Key Employees or the beneficiaries of Key
Employees determined on the Determination Date is an amount in
excess of 60 percent of the Aggregate Benefit of all persons who are
Employees within the Current Plan Year, excluding Former Key
Employees, plus the Aggregate Benefit of persons who have been
Employees (but are not Former Key Employees) within the four
preceding Plan Years but who are not Employees in the Current Plan
Year (and have performed no services for the Employer within the
four preceding Plan Years). With respect to any calendar year during
which the Plan is not the only Aggregation Group Plan, the ratio
determined under the preceding sentence shall be computed based on
the sum of the Aggregate Benefits of each Aggregation Group Plan
totaled as
43
of the last Determination Date of any Aggregation Group Plan to
occur during the calendar year.
Section 19.3. Minimum Contribution. For any Plan Year that the Plan shall
be a Top-Heavy Plan, each Participant who is (a) an Eligible Employee but who is
neither a Key Employee nor a Former Key Employee and (b) an Employee on the last
day of the Plan Year regardless of how many Hours of Service he earned during
the Plan Year shall have allocated to his Company Contribution Account the sum
of Company Contributions and Forfeitures in an amount equal to not less than the
lesser of 3 percent of such Participant's compensation (as defined in Section
1.415-2(d) of the Treasury Regulations), or an amount which is the same ratio or
percentage of Company Contributions and Forfeitures to compensation for the Plan
Year as for the Key Employee who has the highest such ratio or percentage for
the Plan Year. The amount of Company Contributions and Forfeitures required to
be allocated under this Section 19.3 for any Plan Year shall be reduced by the
amount of employer contributions and forfeitures allocated on behalf of the
Participant under any other defined contribution plan in the Aggregation Group
for the Plan Year.
Section 19.4. Maximum Benefit Accrual. For any Plan Year that the Plan is
a Top-Heavy Plan, the denominator of the "Defined Benefit Plan Fraction" and the
denominator of the "Defined Contribution Plan Fraction" (as defined in Section
5.2) shall be determined by substituting "1.0" for "1.25". The preceding
sentence shall not apply with respect to any Plan Year that the Plan is a
Top-Heavy Plan if (a) Section 19.3 is applied by substituting "4 percent" for "3
percent" and (b) the Plan would not be a Top-Heavy Plan if "90 percent" were
substituted for "60 percent" in Subsection 19.2(h). This Section 19.4 shall not
apply with respect to an Employee for any Plan Year during which he accrues no
benefit under any plan of the Aggregation Group.
Section 19.5. Termination of Top-Heavy Status. If the Plan has been
determined to be a Top-Heavy Plan for one or more Plan Years and thereafter
ceases to be a Top-Heavy Plan, the provisions of this Article XIX shall cease to
apply to such Plan effective as of the Determination Date on which the Plan is
not a Top-Heavy Plan.
ARTICLE XX.
Adoption and Withdrawal from Plan
Section 20.1. Procedure for Adoption. Any Related Entity may by resolution
of such Related Entity's board of directors adopt the Plan for the benefit of
its employees as of the date specified in the board resolution and, if
applicable, in the Appendix. If the board of directors of any Related Entity
which is adopting this Plan desires to amend this Plan as to its employees, it
may do so by use of an Appendix. No such adoption shall be effective until such
adoption and any Appendix to be used in connection therewith have been approved
by the Board of Directors of the Company. Notwithstanding any term or provision
of this Plan to the contrary (including but not limited to terms and conditions
concerning eligibility service and Compensation), the terms and provisions as
may be imposed by such board of directors and attached hereto in any Appendix
shall govern.
44
Section 20.2. Procedure for Withdrawal. Any Employer (other than the
Company) may, by resolution of the board of directors of such Employer, with the
consent of the Board of Directors and subject to such conditions as may be
imposed by the Board of Directors, terminate its adoption of the Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and attested and said Trustees have hereunto set their hands, all on the
_________ day of __________, 1997.
XXXXXX ASSET MANAGEMENT, LTD.
By: ____________________________________
Its:____________________________________
ATTEST:
____________________________________ ________________________________________
Xxxxx X. Xxxxx
________________________________________
Xxxxxx X. Xxxxxxxxxxxx
________________________________________
Xxxxxxx X. XxXxxxx
45
SUPPLEMENT A
TO
XXXXXX ASSET MANAGEMENT, LTD. PROFIT-SHARING AND SAVINGS PLAN AND
TRUST AGREEMENT
A-1. Purpose. The purpose of this Supplement A is to provide for the
administration of Accounts transferred to this Plan effective as of March 24,
1992 from the Xxxxxx Associates, L.P. Profit-Sharing and Savings Plan (the
"Prior Plan").
A-2. Effective Date. The effective date of this Supplement is March
24, 1992 (the "transfer date").
A-3. Eligibility. Any employee who was a participant in the Prior
Plan immediately prior to the transfer date and whose account balance in the
Prior Plan is transferred to this Plan shall be eligible to participate in this
Supplement and shall be known as a "Supplement A Participant."
A-4. Supplement A Participants' Accounts.
(a) The Plan Manager shall maintain, for each Supplement A
Participant, an Account reflecting the amount transferred to
this Plan on his behalf from the Prior Plan and the income,
losses, appreciation and depreciation attributable thereto (a
"Prior Plan Account"). Each Prior Plan Account shall be
invested in the same Directed Investment Accounts and/or
Designated Funds in which it was invested immediately prior to
the transfer date, if applicable.
(b) The Plan Merger shall adjust the Prior Plan Accounts of
Supplement A Participants in accordance with the provisions of
Article VI of the Plan.
(c) A Supplement A Participant's Prior Plan Account will be fully
vested in the Supplement A Participant at all times.
A-5. Distribution. A Supplement A Participant shall be entitled to
receive the balance in his Prior Plan Account after his Termination of
Employment Date, in the manner described in Articles VIII and IX of the Plan.
A-6. Use of Terms. All terms and provisions of the Plan shall apply
to this Supplement A, except that where the terms and provisions of the Plan and
this Supplement conflict, the terms and provisions of this Supplement shall
control.
46
