<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1998
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
TRAMMELL CROW COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 75-2721454
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 ROSS AVENUE, SUITE 3400
DALLAS, TEXAS 75201
(Address of principal executive offices, including zip code)
-----------------
TRAMMELL CROW COMPANY
RETIREMENT SAVINGS PLAN
(Full title of the plan)
GEORGE L. LIPPE
CHIEF EXECUTIVE OFFICER
TRAMMELL CROW COMPANY
2001 ROSS AVENUE, SUITE 3400
DALLAS, TEXAS 75201
(214) 863-3000
(Name, address and telephone number of agent for service)
copy to:
DEREK R. MCCLAIN J. CHRISTOPHER KIRK
GENERAL COUNSEL VINSON & ELKINS L.L.P.
TRAMMELL CROW COMPANY 3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE, SUITE 3400 2001 ROSS AVENUE
DALLAS, TEXAS 75201 DALLAS, TEXAS 75201-2975
(214) 863-3000 (214) 220-7700
CALCULATION OF REGISTRATION FEE
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered price per unit (1) offering price (1) registration fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value per share 300,000 shares (2) $28.625 $8,587,500 $2,534
- -------------------------------------------------------------------------------------------------------------------
Interest in the Trammell Crow
Company Retirement Savings Plan (3) (4) (4) (4)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 and based on
the average of the high and low prices reported on the New York Stock
Exchange on May 19, 1998.
(2) If, as a result of stock splits, stock dividends or similar transactions,
the number of securities purported to be registered on this Registration
Statement changes, the provisions of Rule 416 shall apply to this
Registration Statement, and this Registration Statement shall be deemed to
cover the additional securities resulting from the split of, or dividend
on, the securities covered by this Registration Statement.
(3) Pursuant to Rule 416(c) under the Securities Act of 1993, this Registration
Statement also covers an indeterminate amount of plan interests to be
offered or sold pursuant to the Trammell Crow Company Retirement Savings
Plan.
(4) Pursuant to Rule 457(h)(2) under the Securities Act of 1933, no separate
fee is required to registered plan interests.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed with the Securities and Exchange
Commission by Trammell Crow Company, a Delaware corporation (the "Company"), and
are incorporated herein by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed with the Commission pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") on March 31,
1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998, filed with the Commission pursuant to the
Exchange Act on May 15, 1998; and
(c) The description of the Company's Common Stock, $0.01 par value per
share, contained in Item 1 of the Company's Registration Statement on
Form 8-A filed with the Commission pursuant to the Exchange Act on
October 23, 1997.
All documents subsequently filed by the Company and the Trammell Crow
Company Retirement Savings Plan (the "Plan") pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment that indicates that all securities offered have been sold, or that
deregisters all securities then remaining unsold, shall also be deemed to be
incorporated by reference herein and to be a part hereof from the dates of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement. Upon the written or oral request of any person to whom
a copy of this Registration Statement has been delivered, the Company and the
Plan will provide without charge to such person a copy of any and all documents
(excluding exhibits thereto unless such exhibits are specifically incorporated
by reference into such documents) that have been incorporated by reference into
this Registration Statement but not delivered herewith. Requests for such
documents should be addressed to Trammell Crow Company, 2001 Ross Avenue, Suite
3400, Dallas, Texas 75201, Attention: Secretary, (214) 863-3000.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that no director of the
Company shall be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases; or (iv)
for any transaction from which the director derived an improper personal
benefit. The effect of these provisions is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from grossly
negligent behavior), except in the situations described above.
Section 145 ("Section 145") of the Delaware General Corporation Law (the
"DGCL") permits indemnification of directors, officers, agents and controlling
persons of a corporation under certain conditions and subject to certain
limitations. Article Eleventh of the Certificate of Incorporation of the
Company provides that the Company shall indemnify its officers and directors to
the maximum extent allowed by the DGCL. Pursuant to Section 145, the Company
generally has the power to indemnify its present and former directors and
officers against expenses and liabilities incurred
2
<PAGE>
by them in connection with any suit to which they are, or are threatened to
be made, a party by reason of their serving in those positions so long as
they acted in good faith and in a manner they reasonably believed to be in,
or not opposed to, the best interests of the Company, and with respect to any
criminal action, so long as they had no reasonable cause to believe their
conduct was unlawful. With respect to suits by or in the right of the
Company, however, indemnification is generally limited to attorneys' fees and
other expenses and is not available if the person is adjudged to be liable to
the Company, unless the court determines that indemnification is appropriate.
The statute expressly provides that the power to indemnify authorized
thereby is not exclusive of any rights granted under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Company
also has the power to purchase and maintain insurance for its directors and
officers. The Company maintains officers' and directors' liability insurance
which insures against liabilities that officers and directors of the Company
may incur in such capacities. Additionally, Article Eleventh of the
Certificate of Incorporation provides that, in the event that an officer or
director files suit against the Company seeking indemnification of
liabilities or expenses incurred, the burden will be on the Company to prove
that the indemnification would not be permitted under the DGCL. The preceding
discussion of the Company's Certificate of Incorporation and Section 145 of the
DGCL is not intended to be exhaustive and is qualified in its entirety by the
Company's Certificate of Incorporation and Section 145 of the DGCL.
The Company has entered into indemnity agreements with its directors and
officers. Pursuant to such agreements, the Company will, to the extent
permitted by applicable law, indemnify such persons against all expenses,
judgments, fines and penalties incurred in connection with the defense or
settlement of any actions brought against them by reason of the fact that they
were directors or officers of the Company or assumed certain responsibilities at
the direction of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company with the Commission, each of the following
exhibits is filed herewith:
4.1 -- Trammell Crow Company Retirement Savings Plan
5.1 -- (a) Opinion of Vinson & Elkins L.L.P.
(b) The Company will submit the Trammell Crow Company
Retirement Savings Plan and any amendment thereto to
the Internal Revenue Service ("IRS") in a timely manner
and will make all changes required by the IRS in order
to qualify the plan.
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Vinson & Elkins L.L.P. (included as
part of Exhibit 5.1)
24.1 -- Powers of Attorney (included on the signature
pages of this Registration Statement)
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
3
<PAGE>
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant
to section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purposes of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 21st day of May, 1998.
TRAMMELL CROW COMPANY
By: /s/ George L. Lippe
------------------------------------
George L. Lippe, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints George L. Lippe, Asuka Nakahara and
William P. Leiser and each of them, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments, including pre- and post-effective amendments, to this Registration
Statement, and any registration statement relating to the offering covered by
this Registration Statement and filed pursuant to Rule 462(b) under the
Securities Act, and to file the same, with exhibits thereto and other documents
in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that each of said attorneys-in-fact and
agents or their substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Capacity Date
--------- -------- ----
/s/ George L. Lippe President and Chief Executive May 21, 1998
- -------------------------------- Executive Officer (Principal
George L. Lippe Executive Officer)
/s/ Asuka Nakahara Chief Financial Officer May 21, 1998
- -------------------------------- (Principal Financial Officer)
Asuka Nakahara
/s/ William P. Leiser Executive Vice-President May 21, 1998
- -------------------------------- and Treasurer (Principal
William P. Leiser Accounting Officer)
/s/ Harlan R. Crow Director May 21, 1998
- --------------------------------
Harlan R. Crow
/s/ J. McDonald Williams Director May 21, 1998
- --------------------------------
J. McDonald Williams
/s/ James D. Carreker Director May 21, 1998
- --------------------------------
James D. Carreker
/s/ William F. Concannon Director May 21, 1998
- --------------------------------
William F. Concannon
S-1
<PAGE>
/s/ James R. Erwin Director May 21, 1998
- --------------------------------
James R. Erwin
/s/ Jeffrey M. Heller Director May 21, 1998
- --------------------------------
Jeffrey M. Heller
/s/ Rowland T. Moriarty Director May 21, 1998
- --------------------------------
Rowland T. Moriarty
/s/ Robert E. Sulentic Director May 21, 1998
- --------------------------------
Robert E. Sulentic
TRAMMELL CROW COMPANY
RETIREMENT SAVINGS PLAN
By: Trammell Crow Company,
Plan Sponsor
By: /s/ Asuka Nakahara
- --------------------------------
Name: Asuka Nakahara
Title: Executive Vice President and Chief Financial Officer
S-2
<PAGE>
EXHIBIT INDEX
4.1 -- Trammell Crow Company Retirement Savings Plan
5.1 -- (a) Opinion of Vinson & Elkins L.L.P.
(b) The Company will submit the Trammell Crow
Company Retirement Savings Plan and any
amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and will
make all changes required by the IRS in order
to qualify the plan.
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Vinson & Elkins L.L.P. (included as
part of Exhibit 5.1)
24.1 -- Powers of Attorney (included on the signature
pages of this Registration Statement)
<PAGE>
TRAMMELL CROW COMPANY
RETIREMENT SAVINGS PLAN
(As amended and restated, generally effective January 1, 1997)
<PAGE>
TRAMMELL CROW COMPANY
RETIREMENT SAVINGS PLAN
Trammell Crow Company, a Texas corporation, adopts the Trammell
Crow Company Retirement Savings Plan (the "Plan") as an amendment and
restatement of the Plan, effective as of January 1, 1997, except as otherwise
expressly provided. As amended and restated, the Plan is a profit sharing
plan with a cash or deferred arrangement intended to qualify under Code
section 401(a) and to meet the requirements of Code section 401(k). The
Trust Agreement established pursuant to the Plan is an employees' trust
intended to constitute a tax-exempt organization under Code section 501(a).
Words and phrases with initial capital letters used throughout the
Plan are defined in Article 1.
(i)
<PAGE>
TABLE OF CONTENTS
<TABLE>
PAGE
----
<S> <C>
Article 1 Definitions 1
Article 2 Participation 7
Article 3 Contributions 9
Article 4 Allocations to Participants' Accounts 13
Article 5 Vesting 15
Article 6 Distributions to Participants 17
Article 7 Distributions to Beneficiaries 22
Article 8 Provisions Regarding Company Stock
and Other Securities 24
Article 9 Administration of the Plan and Trust
Agreement 26
Article 10 Limitations on Contributions and
Allocations to Participants' Accounts 31
Article 11 Restrictions on Distributions to
Participants and Beneficiaries 41
Article 12 Top-Heavy Provisions 43
Article 13 Adoption of Plan by Controlled Group
Members 48
Article 14 Amendment of the Plan 49
Article 15 Termination, Partial Termination and
Complete Discontinuance of Contributions 51
Article 16 Miscellaneous 52
Appendix A Participating Employers 55
</TABLE>
(ii)
<PAGE>
ARTICLE 1
DEFINITIONS
1.1 "ACCOUNT" means the records, including subaccounts, maintained
by the Benefits Committee in the manner provided in Article 4 to determine
the interest of each Participant in the assets of the Plan and may refer to
any or all of the Participant's Deferral Contribution Account, Nonelective
Contribution Account and Rollover Account.
1.2 "BENEFICIARY" means the one or more persons or entities
entitled to receive a distribution of a Participant's interest in the Plan in
the event of his death as provided in Article 7.
1.3 "BENEFITS COMMITTEE" means the Committee appointed pursuant to
Section 9.1(a).
1.4 "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors
of the Company.
1.5 "CODE" means the Internal Revenue Code of 1986, as amended
from time to time. References to "regulations" are to regulations published
by the Secretary of the Treasury under applicable provisions of the Code,
unless otherwise expressly indicated.
1.6 "COMPANY" means Trammell Crow Company, a Texas corporation (a
subsidiary of Trammell Crow Company, a Delaware corporation).
1.7 "COMPANY STOCK" means the common stock, par value $0.01 per
share, of Trammell Crow Company, a Delaware corporation, which is the parent
corporation of the Company.
1.8 "COMPENSATION" means the wages (within the meaning of Code
section 3401(a) for purposes of income tax withholding at the source but
determined without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed) paid to any Employee by the Participating Employers during the
Plan Year, reduced by all of the following items (even if includible in gross
income): reimbursements or other expense allowances, fringe benefits (cash
and non-cash), moving expenses, deferred compensation, income related to
stock options or other stock awards, and welfare benefits (such as health
benefits and severance pay). In addition, Compensation includes any
contributions made by the Participating Employers on behalf of an Employee
pursuant to a deferral election under the Plan or under any other employee
benefit plan that are not includable in income under Code section 402(a)(8)
and any contributions made by the Participating Employers on behalf of an
Employee to a cafeteria plan that are not includable in income under Code
section 125. The annual Compensation of an Employee taken into account for
any purpose under the Plan will not exceed $150,000, as adjusted by the
Secretary of the Treasury.
1.9 "CONTROLLED GROUP" means the Company and all other
corporations, trades and businesses, the employees of which, together with
employees of the Company, are required by
<PAGE>
the first sentence of subsection (b), by subsection (c), by subsection (m) or
by subsection (o) of Code section 414 to be treated as if they were employed
by a single employer.
1.10 "CONTROLLED GROUP MEMBER" means each corporation or
unincorporated trade or business that is or was a member of the Controlled
Group, but only during such period as it is or was such a member.
1.11 "DEFERRAL CONTRIBUTION" means the amount of a Participant's
Compensation that he elects to have contributed to the Plan by the
Participating Employers rather than paid to him directly in cash.
1.12 "DEFERRAL CONTRIBUTION ACCOUNT" means the Account established
for each Participant, the balance of which is attributable to the
Participant's Deferral Contributions, and earnings and losses of the Trust
Fund with respect to such contributions.
1.13 "DISABILITY" OR "DISABLED" means a medically determinable
physical or mental impairment or condition which may be expected to result in
death or be of long continue duration and which, in the judgment of the
Benefits Committee, will permanently render the Participant incapable of
performing his usual duties with a Controlled Group Member.
1.14 "EFFECTIVE DATE" means January 1, 1997, except as otherwise
expressly provided.
1.15 "ELIGIBILITY COMPUTATION PERIOD" means, with respect an
Employee's initial eligibility determination, the period of 12 consecutive
months beginning on the date an Employee first performs an Hour of Service.
If an Employee does not complete 1,000 Hours of Service during the initial
12-month computation period, the Eligibility Computation period will switch
to the Plan Year, effective for the first Plan Year beginning after the date
the Employee first performed an Hour of Service.
1.16 "EMPLOYEE" means any person who is: (i) employed by any
Controlled Group Member if their relationship is, for federal income tax
purposes, that of employer and employee, or (ii) a "leased employee" of a
Controlled Group Member within the meaning of Code section 414(n)(2) but only
for purposes of the requirements of Code section 414(n)(3).
1.17 "ENTRY DATE" means the first day of the each calendar month
during the Plan Year.
1.18 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
-2-
<PAGE>
1.19 "HOUR OF SERVICE" means each hour credited in accordance with
the following rules:
(a) CREDIT FOR SERVICES PERFORMED. An Employee will be
credited with one Hour of Service for each hour for which he is paid, or
entitled to payment, by one or more Controlled Group Members for the
performance of duties.
(b) CREDIT FOR PERIODS IN WHICH NO SERVICES ARE PERFORMED.
An Employee will be credited with one Hour of Service for each hour for which
he is paid, or entitled to payment, by one or more Controlled Group Members
on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated); except
that (i) no more than 501 Hours of Service will be credited under this
subsection (b) to an Employee on account of any single continuous period
during which he performs no duties (whether or not such period occurs in a
single Plan Year), (ii) 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 will not be credited to the Employee if the payment
is made or due under a plan maintained solely for the purpose of complying
with applicable workers' compensation or unemployment compensation or
disability insurance laws, and (iii) Hours of Service will not be credited
for a payment which solely reimburses an Employee for medical or medically
related expenses incurred by the Employee. For purposes of this subsection
(b), an Employee will be credited with Hours of Service on the basis of his
regularly scheduled working hours per week (or per day if he is paid on a
daily basis) or, in the case of an Employee without a regular work schedule,
on the basis of 40 Hours of Service per week (or 8 Hours of Service per day
if he is paid on a daily basis) for each week (or day) during the period of
time during which no duties are performed; except that an Employee will not
be credited with a greater number of Hours of Service for a period during
which no duties are performed than the number of hours for which he is
regularly scheduled for the performance of duties during the period or, in
the case of an Employee without a regular work schedule, on the basis of 40
Hours of Service per week (or 8 Hours of Service per day if he is paid on a
daily basis).
(c) CREDIT FOR BACK PAY. An Employee will be credited with
one Hour of Service for each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by one or more
Controlled Group Members; except that an hour will not be credited under both
subsection (a) or (b), as the case may be, and this subsection (c), and Hours
of Service credited under this subsection (c) with respect to periods
described in subsection (b) will be subject to the limitations and
provisions under subsection (b).
(d) CREDIT FOR CERTAIN ABSENCES. If an Employee is absent
from work on or after the Effective Date for any period by reason of the
pregnancy of the Employee, by reason of the birth of a child of the Employee,
by reason of the placement of a child with the Employee, or for purposes of
caring for a child for a period beginning immediately following the birth or
placement of that child, the Employee will be credited with Hours of Service
(solely for the purpose of determining whether he has a One Year Break in
Service under the Plan) equal to (i) the number of Hours of Service which
otherwise would normally have been credited to him but for his absence, or
(ii) if the number of Hours of Service under clause (i) is not determinable,
8 Hours of Service per normal workday of the absence, provided, however, that
the total number of Hours of Service credited to an Employee under this
subsection (d) by reason of any pregnancy, birth or placement
-3-
<PAGE>
will not exceed 501 Hours of Service. Hours of Service will not be credited
to an Employee under this subsection (d) unless the Employee furnishes to the
Benefits Committee such timely information as the Benefits Committee may
reasonably require to establish that the Employee's absence from work is for
a reason specified in this subsection (d) and the number of days for which
there was such an absence.
(e) MANNER OF COUNTING HOURS. No hour will be counted more
than once or be counted as more than one Hour of Service even though the
Employee may receive more than straight-time pay for it. With respect to
Employees whose compensation is not determined on the basis of certain
amounts for each hour worked during a given period and for whom hours are not
required to be counted and recorded by any federal law (other than ERISA),
Hours of Service will be credited on the basis of 45 Hours of Service weekly
for each week in which the Employee would be credited with at least one Hour
of Service under this Section. Except as otherwise provided in subsection
(d), Hours of Service will be credited to Eligibility Computation Periods and
Plan Years in accordance with the provisions of 29 C.F.R. Section
2530.200b-2, which provisions are incorporated in this Plan by reference.
(f) AUTHORIZED LEAVE OF ABSENCE. If an Employee is absent from
work on or after the Effective Date for any period by reason of an authorized
leave of absence, the Employee will be credited with Hours of Service equal
to (i) the number of Hours of Service which otherwise would normally have
been credited to him but for his absence, or (ii) if the number of Hours of
Service under clause (i) is not determinable, 8 Hours of Service per normal
workday of the absence.
(g) SERVICE WITH PREDECESSORS. The Benefits Committee may, in its
sole discretion, grant an Employee or group of Employees credit for service
with a predecessor employer or employers for purposes of eligibility to
participate and/or vesting under the Plan, provided such Employee or
Employees became employed by a Participating Employer in connection with (i)
a purchase, merger, consolidation or other business transaction in which a
group of employees or a business entity is acquired by a Participating
Employer, or (ii) a transfer of employment from an employer that is
designated by the Benefits Committee as an affiliated or related employer for
such purpose or purposes.
1.20 "INVESTMENT COMMITTEE" means the Committee appointed pursuant
to Section 9.1(b).
1.21 "MATCHING CONTRIBUTION" means the Participating Employer
Matching Contribution made to the Plan on behalf of a Participant pursuant to
Article 3.
1.22 "MATCHING CONTRIBUTION ACCOUNT" means the Account established
for each Participant, the balance of which is attributable to Matching
Contributions made pursuant to Article 3, and earnings and losses of the
Trust Fund with respect to such contributions.
1.23 "NONELECTIVE CONTRIBUTION" means the Participating Employer
Nonelective Contribution made to the Plan on behalf of a Participant pursuant
to Article 3.
-4-
<PAGE>
1.24 "NONELECTIVE CONTRIBUTION ACCOUNT" means the Account
established for each Participant, the balance of which is attributable to
Nonelective Contributions made pursuant to Article 3, and earnings and losses
of the Trust Fund with respect to such contributions.
1.25 "NORMAL RETIREMENT AGE" means the date the Participant attains
age 55, or if later, the fifth anniversary of the Participants earliest
employment date with a Controlled Group Member.
1.26 "ONE YEAR BREAK IN SERVICE" means, for purposes of determining
vesting, a Plan year in which the Participant fails to complete more than 500
Hours of Service. One Year Breaks in Service are not calculated for purposes
of determining eligibility to participate because all periods of service and
Hours of Service are taken into account under Article 2.
1.27 "PARTICIPANT" means an Employee or former Employee who has met
the applicable eligibility requirements of Article 2 and who has not yet
received a distribution of the entire amount of his vested interest in the
Plan.
1.28 "PARTICIPATING EMPLOYER" means the Company and each other
Controlled Group Member set forth on Appendix A and any other Controlled
Group Member or organizational unit of the Company or a Controlled Group
Member which is designated as a Participating Employer under the Plan by the
Board of Directors.
1.29 "PLAN" means the plan set forth herein, as amended from time
to time.
1.30 "PLAN YEAR" means the period with respect to which the records
of the Plan are maintained, which will be the 12-month period beginning on
January 1 and ending on December 31.
1.31 "QUALIFIED PLAN" means an employee benefit plan that is
qualified under Code section 401(a).
1.32 "ROLLOVER ACCOUNT" means the Account established for each
Participant, the balance of which is attributable to rollover and transfer
contributions made pursuant to Article 3, and the earnings and losses of the
Trust Fund with respect to such amounts.
1.33 "TRUST AGREEMENT" means the agreement or agreements executed
by the Company and one or more Trustees which establishes a trust fund to
provide for the investment, reinvestment, administration and distribution of
all or a specified portion of the assets of the Plan and the earnings
thereon, as amended from time to time.
1.34 "TRUST FUND" means the assets of the Plan held by one or more
Trustees pursuant to the Trust Agreements.
1.35 "TRUSTEE" means the one or more individuals or organizations
who have entered into a Trust Agreement as Trustee, and any duly appointed
successor.
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1.36 "VALUATION DATE" means the date with respect to which the fair
market value of the assets comprising the Trust Fund or any portion thereof
is determined by the Benefits Committee (or, if the Trust Agreement so
provides, by the Trustee). The regular Valuation Date will be each business
day during the year with respect to all assets of the Trust Fund other than
individual life insurance policies, and will be the last day of each Plan
Year with respect to such policies. If the Benefits Committee determines
that the fair market value of any asset comprising the Trust Fund has changed
substantially since the previous Valuation Date, or if the Benefits Committee
determines it to be in the best interests of the Plan and the Participants to
value any asset of the Trust Fund at a time other than the regular Valuation
date, the Benefits Committee may fix, in a uniform and nondiscriminatory
manner, one or more interim Valuation Dates.
1.37 "YEAR OF SERVICE" means a Plan Year (including Plan Years
prior to the Effective Date) in which an Employee completes at least 1,000
Hours of Service, whether or not he has terminated employment prior to the
end of the Plan Year. The Benefits Committee may, in its sole discretion,
grant an Employee or group of Employees credit for service with a predecessor
employer or employers for purposes of eligibility to participate and/or
vesting under the Plan, provided such Employee or Employees became employed
by a Participating Employer in connection with (i) a purchase, merger,
consolidation or other business transaction in which a group of employees or
a business entity is acquired by a Participating Employer, or (ii) a transfer
of employment from an employer that is designated by the Benefits Committee,
in procedures applicable to Employees on a uniform basis, as an affiliated or
related employer for such purpose or purposes.
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ARTICLE 2
PARTICIPATION
2.1 ELIGIBILITY TO PARTICIPATE. Each Employee who was a
Participant in the Plan immediately prior to the Effective Date will be a
Participant on the Effective Date. Prior to March 1, 1998, each other
Employee will become a Participant on the first Entry Date following the end
of the Eligibility Computation Period during which the Employee first
completes 1,000 Hours of Service, if he is then employed by a Participating
Employer. Effective March 1, 1998, each Employee will become a Participant
on the first Entry Date following the 90-day period beginning on the date the
Employee first performs an Hour of Service, if he is then employed by a
Participating Employer.
2.2 EXCLUSIONS FROM PARTICIPATION.
(a) INELIGIBLE EMPLOYEES. An Employee who is otherwise
eligible to participate in the Plan will not become or continue as an active
Participant if (i) he is a nonresident alien who receives no earned income
(within the meaning of Code section 911(d)(2)) from a Participating Employer
which constitutes income from sources within the United States (within the
meaning of Code section 861(a)(3)); (ii) he is an Employee who is covered by
a collective bargaining agreement that does not expressly provide for
participation in the Plan, provided that the representative of the Employees
with whom the collective bargaining agreement is executed has had an
opportunity to bargain concerning retirement benefits for those Employees;
(iii) he is represented by a bargaining representative but is not covered by
a collective bargaining agreement, unless the Company and the bargaining
representative agree in writing that the Employee will be eligible to
participate in the Plan; (iv) he is employed by a Controlled Group Member or
an organizational unit thereof that has not been designated as a
Participating Employer by the Board; (v) he is a leased employee required to
be treated as an Employee under Code section 414(n) or he otherwise performs
services for a Participating Employer under an arrangement with an employment
agency, leasing organization or other organization, (vi) he is classified by
a Participating Employer as an independent contractor whose compensation for
services is reported on a form other than Form W-2 or any successor form for
reporting wages paid to employees (regardless of whether he is later
determined to have been a common law employee); or (vii) he is then on an
approved leave of absence without pay or in the service of the armed forces
of the United States.
(b) EXCLUSION AFTER PARTICIPATION. A Participant who becomes
ineligible under subsection (a) may not elect to have Deferral Contributions
made or continued to the Plan.
(c) PARTICIPATION AFTER EXCLUSION. An Employee or
Participant who is excluded from active participation is eligible to
participate in the Plan and will become a Participant on the first day he is
no longer described in subsection (a) and is credited with one or more Hours
of Service by a Participating Employer, provided that he has otherwise met
the requirements of Section 2.1. This subsection will apply to an Employee
who returns from an approved leave of absence or from military leave and who
would otherwise be treated as a new Employee under Section 2.3 only if he
returns to employment with a Controlled Group Member immediately
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following the expiration of the leave of absence or, in the case of an
Employee on military leave, during the period in which reemployment rights
are guaranteed by law.
2.3 REEMPLOYMENT PROVISIONS. All service and Hours of Service are
counted in determining eligibility to participate.
(a) TERMINATION OF EMPLOYMENT BEFORE PARTICIPATION. If an
Employee terminates employment before becoming a Participant and is
reemployed by a Controlled Group Member, he will receive credit for his
service and Hours of Service completed before his termination of employment
and will become a Participant on the later of the date initially determined
under Section 2.1 or the date of his reemployment by a Participating Employer.
(b) TERMINATION OF EMPLOYMENT AFTER PARTICIPATION. A
Participant who terminates employment will again become a Participant
immediately upon his reemployment by a Participating Employer.
2.4 VETERANS' REEMPLOYMENT RIGHTS.
(a) SERVICE CREDIT. An Employee who returns to employment with a
Controlled Group member following a period of Qualified Military Service (as
hereinafter defined) will not be treated as having incurred any One Year
Break in Service because of his period of Qualified Military Service. In
addition, each period of Qualified Military Service will, upon reemployment
with a Controlled Group Member, be deemed to be employment with such
Controlled Group Member for purposes of the Plan.
(b) COMPENSATION. An Employee described in subsection (a) above
will be treated for Plan purposes as having received compensation from the
Controlled Group member during each period of Qualified Military Service
equal to (i) the compensation the Employee would have received during such
period of Qualified Military Service if he were not in Qualified Military
Service, based on the rate of pay the Employee would have received from the
Controlled Group Member but for his absence during the period of Qualified
Military Service or (ii) if the compensation the Employee would have received
during his period of Qualified Military Service is not reasonably certain,
the Employee's average compensation from the employer during the 12-month
period immediately preceding the Qualified Military Service, or if shorter,
during the period of employment immediately preceding the Qualified Military
Service.
(c) QUALIFIED MILITARY SERVICE. For purposes of the Plan, the
term "Qualified Military Service" means service in the uniformed services
(within the meaning of the Uniformed Services Employment and Reemployment
Rights Act ("USERRA")), provided the Employee is entitled under USERRA to
reemployment rights with a Controlled Group Member and the Employee returns
to employment with the Controlled Group Member within the period in which
such reemployment rights are guaranteed.
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<PAGE>
ARTICLE 3
CONTRIBUTIONS
3.1 PARTICIPANT DEFERRAL CONTRIBUTIONS.
(a) AMOUNT OF DEFERRAL CONTRIBUTIONS. A Participant may
elect, in accordance with procedures established by the Benefits Committee
from time to time, to defer from 1% to 15% (in whole percent increments) of
his Compensation for each payroll period and to have the amount deferred
contributed to the Plan by the Participating Employers as a Deferral
Contribution.
(b) MODIFICATION AND SUSPENSION OF DEFERRAL CONTRIBUTIONS. A
Participant may increase or decrease the amount of his Deferral Contributions
with respect to a subsequent payroll period at any time, effective as of the
following payroll period or as soon thereafter as practicable. A Participant
may suspend his Deferral Contributions at any time, effective as of the
following payroll period or as soon thereafter as practicable, and a
suspension of his Deferral Contributions will not be considered a
modification for purposes of this subsection (b). A Participant who suspends
his Deferral Contributions may resume Deferral Contributions to the Plan as
of any payroll period following the payroll period in which the suspension
occurred, effective as of the first payroll period following the election to
resume Deferral Contributions, or as soon thereafter as practicable. The
Benefits Committee will adopt from time to time procedures for administering
the rules contained in this subsection, which will apply in a uniform and
nondiscriminatory manner to all Participants.
(c) NO DEFERRAL CONTRIBUTIONS AFTER TERMINATION OF
EMPLOYMENT. Effective July 1, 1997, no Deferral Contributions will be made
with respect to any Compensation paid to a Participant after termination of
employment, and a Participant's Deferral Contribution election will be
discontinued automatically upon termination of employment. Any Deferral
Contribution election in effect with respect to a Participant who terminated
employment before July 1, 1997 will be discontinued automatically as of July
1, 1997, and no additional Deferral Contributions will be made from
Compensation paid to the Participant after such date. For periods prior to
July 1, 1997, Deferral Contributions will be discontinued automatically as
soon as administratively practicable with respect to Compensation paid to a
Participant after termination of employment unless the Participant files a
separate election in a manner approved by the Benefits Committee, but in no
event will Deferral Contributions be made with respect to a former
Participant who has received a distribution of his entire vested interest in
the Plan.
(d) LIMITATIONS ON DEFERRAL CONTRIBUTIONS. The sum of a
Participant's Deferral Contributions and his elective deferrals (within the
meaning of Code section 402(g)(3)) under any other plans, contracts or
arrangements of any Controlled Group Member will not exceed $9,500 (as
adjusted for cost of living increases in the manner described in Code section
415(d)) for any taxable year of the Participant. A Participant's Deferral
Contributions also will be subject to the deferral percentage limitation set
forth in Section 10.6. In the event a Participant's Deferral Contributions
and other elective deferrals (whether or not under a plan, contract or
arrangement of
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a Controlled Group Member) for any taxable year exceed the foregoing $9,500
limitation, the excess allocated by the Participant to Deferral Contributions
(adjusted for Trust Fund earnings and losses in the manner described in
Section 10.6(d)) may, in the discretion of the Benefits Committee, be
distributed to the Participant no later than April 15 following the close of
such taxable year. The amount of Deferral Contributions distributed
pursuant to this Section with respect to a Participant for a Plan Year will
be reduced by any excess Deferral Contributions previously distributed to the
Participant pursuant to Section 10.6(c) for the same Plan Year.
3.2 MATCHING CONTRIBUTIONS.
(a) AMOUNT OF MATCHING CONTRIBUTIONS. Each Participating
Employer may make a Matching Contribution for each payroll period during the
Plan Year if authorized by its board of directors, but no Participating
Employer will be required to make a Matching Contribution for any payroll
period or Plan Year. As of the Effective Date, the rate of Matching
Contributions will be equal to 50% of each Participant's Deferral
Contributions, but only to the extent that the Participant's Deferral
Contributions do not exceed 6% of the Participant's Compensation for the
payroll period. The rate of Matching Contributions may be changed by the
Company effective as of any subsequent payroll period by providing notice of
the change at least 30 days before the payroll period when the change will
become effective.
(b) CALCULATION OF MATCHING CONTRIBUTIONS. Matching
Contributions initially will be calculated on the basis of Deferral
Contributions and Compensation for each payroll period within the Plan Year.
As of one or more dates within each Plan Year, the Participating Employers
will make an additional matching contribution for a Participant to the extent
necessary to cause the Matching Contributions for such Participant for the
Plan Year to be equal to the amount required by Section 3.2(a) calculated on
the basis of the Participant's Deferral Contributions and Compensation for
the entire Plan Year (excluding Compensation earned before the Participant
was eligible to participate under Section 2.1).
(c) ADDITIONAL MATCHING CONTRIBUTIONS. In addition to the
Matching Contributions provided for in subsections (a) and (b) above, each
Participating Employer may make an additional Matching Contribution for any
Plan Year if authorized by its board of directors, but no Participating
Employer will be required to make an additional Matching Contribution for any
Plan Year.
(d) QUALIFIED MATCHING CONTRIBUTIONS. The Participating
Employer may designate at the time of contribution that a Matching
Contribution will be fully vested at all times and will be subject to the
distribution limitations of the Plan that apply to Deferral Contributions, in
which event the contribution may be treated as a Deferral Contribution for
purposes of the deferral percentage limitation set forth in Section 10.6.
(e) LIMITATION ON MATCHING CONTRIBUTIONS. Matching
Contributions will be subject to the contribution percentage limitation set
forth in Section 10.7.
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3.3 NONELECTIVE CONTRIBUTIONS.
(a) CONTRIBUTIONS NOT REQUIRED. Each Participating Employer
may make a Nonelective Contribution to the Plan for any Plan Year if
authorized by its board of directors, but no Participating Employer will be
required to make a contribution for any Plan Year.
(b) QUALIFIED NONELECTIVE CONTRIBUTIONS. The Participating
Employer may designate at the time of making a Nonelective Contribution that
the contribution will be fully vested at all times and will be subject to the
distribution limitations of the Plan that apply to Deferral Contributions, in
which event the contribution may be treated as a Deferral Contribution for
purposes of the deferral percentage limitation set forth in Section 10.6.
3.4 TIME OF PAYMENT. Deferral Contributions will be paid to the
Trustee as soon as practicable, but in no event later than 15 days after the
end of the calendar month in which such contributions are withheld or would
otherwise have been paid to the Participant. Matching Contributions will be
paid to the Trustee as soon as practicable after the end of the payroll
period to which such Matching Contributions relate, but may be paid more
frequently if administratively desirable. Additional Matching Contributions
(including the adjustment described in Section 3.2(b)) and Nonelective
Contributions may be paid to the Trustee on any date or dates selected by the
Participating Employer, but in no event later than the time prescribed by law
(including extensions) for filing the Participating Employer's federal income
tax return for its tax year ending with or within the Plan Year.
3.5 INVESTMENT OF CONTRIBUTIONS.
(a) PARTICIPANT DIRECTION. Each Participant may direct the
Trustee to invest the balance of his Accounts in the investment funds
designated by the Investment Committee from time to time in accordance with
the provisions of the Trust Agreement. The Investment Committee and/or the
Benefits Committee from time to time will establish rules and procedures
regarding Participant investment directions, including, without limitation,
rules and procedures with respect to the manner in which such directions may
be furnished, the frequency with which such directions may be changed during
the Plan Year and the minimum portion of a Participant's Accounts that may be
invested in any one investment fund.
(b) LIFE INSURANCE POLICIES IN ROLLOVER ACCOUNT. A
Participant may direct the Trustee of the Trust Fund holding any life
insurance policy that was transferred in kind directly from another plan to
the Participant's Rollover Account to continue to hold such policy. The
Participant may elect, in a manner established by the Benefits Committee, to
pay any required premium with respect to such policy from the vested portion
of the Participant's Accounts, other than from amounts attributable to
Deferral Contributions, qualified Matching Contributions under Section 3.2(d)
or qualified Nonelective Contributions under Section 3.3(b), or the earnings
thereon.
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3.6 ROLLOVER AND TRANSFER CONTRIBUTIONS. The Benefits Committee,
in its sole discretion, may authorize the Trustee to accept (i) any part of
the cash or other assets distributed to a Participant from a Qualified Plan
or from an individual retirement account or annuity described in Code section
408, or (ii) a direct transfer of assets to the Plan on behalf of a
Participant from the trustee or other funding agent of a Qualified Plan. The
Participant will make application for the rollover or transfer in writing
according to rules and procedures prescribed by the Benefits Committee with
the concurrence of the Trustee. Any amounts contributed to the Plan pursuant
to this Section will be allocated to the Participant's Rollover Account.
3.7 CONTRIBUTIONS MADE WITHOUT REGARD TO PROFITS. Contributions
to the Plan will be made without regard to the current or accumulated profits
of any Participating Employer.
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ARTICLE 4
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
4.1 ESTABLISHMENT OF ACCOUNTS. The Benefits Committee will
establish a Deferral Contribution Account and a Matching Contribution Account
for each Participant. The Benefits Committee will also establish a Rollover
Account and a Nonelective Contribution Account for applicable Participants.
The Benefits Committee may establish one or more subaccounts of a
Participant's Accounts if the Benefits Committee determines that subaccounts
are necessary or desirable in administering the Plan.
4.2 ALLOCATION OF CONTRIBUTIONS.
(a) DEFERRAL CONTRIBUTIONS AND MATCHING CONTRIBUTIONS.
Deferral Contributions made by a Participating Employer on behalf of a
Participant will be allocated by the Benefits Committee to the Participant's
Deferral Contribution Account. Matching Contributions made by a
Participating Employer with respect to a payroll period during the Plan Year
will be allocated by the Benefits Committee to the Matching Contribution
Accounts of Participants who were Participants in the Plan at any time during
such payroll period, in the ratio that the Deferral Contributions made on
behalf of each such Participant for the month bear to the total Deferral
Contributions made on behalf of all such Participants for the month, taking
into account for purposes of this ratio only Deferral Contributions that do
not exceed 6% of each Participant's Compensation for the month. Any
adjustment to Matching Contribution required to be made by Section 3.2(b)
with respect to a Participant will also be allocated to the Participant's
Matching Contribution Account.
(b) NONELECTIVE CONTRIBUTIONS. Any Nonelective Contribution
made by a Participating Employer with respect to a Plan Year will be
allocated by the Benefits Committee to Participants' Accounts in the ratio
that the Compensation for the Plan Year of each participant eligible to share
in the allocation bears to the total Compensation for the Plan Year of all
Participants eligible to share in the allocation. Each Participant who is
not excluded from participation on the last day of the Plan Year under
Article 2, who completed at least 1,000 Hours of Service during the Plan Year
and who is an Employee on the last day of the Plan Year will be eligible to
share in the allocation of any Nonelective Contribution for the Plan Year.
Notwithstanding the preceding sentence, the Participating Employers may
designate at the time of making a Nonelective Contribution that the
Participants eligible to share in the allocation of the contribution will be
limited to Participants who are Nonhighly Compensated Employees (as defined
in Article 10), or a designated group of Nonhighly Compensated Employees.
4.3 LIMITATION ON ALLOCATIONS. Article 10 sets forth certain
rules under Code sections 401(k), 401(m) and 415 that limit the amount of
contributions and forfeitures that may be allocated to a Participant's
Accounts for a Plan Year.
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4.4 ALLOCATION OF TRUST FUND INCOME AND LOSS.
(a) ACCOUNTING RECORDS. The Benefits Committee, through its
accounting records, will clearly segregate each Account and subaccount and
will maintain a separate and distinct record of all income and losses of the
Trust Fund attributable to each Account or subaccount. Income or loss of the
Trust Fund will include any unrealized increase or decrease in the fair
market value of the assets of the Trust Fund.
(b) METHOD OF ALLOCATION. The share of net income or net
loss of the Trust Fund to be credited to, or deducted from, each Account will
be the allocable portion of the net income or net loss of the Trust Fund
attributable to each Account determined by the Benefits Committee as of each
Valuation Date in a uniform and nondiscriminatory manner, based upon the
ratio that each Account balance as of the previous Valuation Date bears to
all Account balances after adjustment for withdrawals, distributions and
other additions or subtractions that may be appropriate. The share of net
income or net loss to be credited to, or deducted from, any subaccount will
be an allocable portion of the net income or net loss credited to or deducted
from the Account under which the subaccount is established.
4.5 VALUATION OF TRUST FUND. The fair market value of the total
net assets comprising the Trust Fund will be determined as of each Valuation
Date by the Benefits Committee (or, if the Trust Agreement so provides, by
the Trustee).
4.6 NO GUARANTEE. The Participating Employers, the Benefits
Committee and the Trustee do not guarantee the Participants or their
Beneficiaries against loss or depreciation or fluctuation of the value of the
assets of the Trust Fund.
4.7 STATEMENT OF ACCOUNTS. The Benefits Committee will furnish
each Participant and each Beneficiary of a deceased Participant, at least
annually, a statement showing (i) the value of his Accounts at the end of the
Plan Year, (ii) the allocations to and distributions from his Accounts during
the Plan Year, and (iii) his vested and nonforfeitable interest in his
Accounts at the end of the Plan Year. If the Benefits Committee elects to
provide statements more frequently than annually, the statements will include
the specified information as of the end of the designated portion of the Plan
Year. No statement will be provided to a Participant or Beneficiary after
the Participant's entire vested and nonforfeitable interest in his Accounts
has been distributed.
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ARTICLE 5
VESTING
5.1 DETERMINATION OF VESTED INTEREST.
(a) ACCOUNTS WHICH ARE 100% VESTED. Except as provided in
Section 5.3, the interest of each Participant in his Deferral Contribution
Account and his Rollover Account will be 100% vested and nonforfeitable at
all times.
(b) MATCHING AND NONELECTIVE CONTRIBUTIONS. The interest of
each Participant in his Matching Contribution Account and Nonelective
Contribution Account will become vested and nonforfeitable in accordance with
the following schedule (subject to Section 10.6(e) with respect to
discriminatory Matching Contributions):
<TABLE>
Percent Vested
Years of Service and Nonforfeitable
---------------- ------------------
<S> <C>
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
</TABLE>
(c) ACCELERATED VESTING. A Participant's interest in his
Matching Contribution Account and Nonelective Contribution Account will
become 100% vested and nonforfeitable without regard to his Years of Service
(i) on attainment of Normal Retirement Age if he is then an Employee, (ii)
upon his death while he is an Employee, (iii) upon his Disability while he is
an Employee or (iv) he is part of a group of Participants that the Benefits
Committee determines, in its sole discretion, will become 100% vested in
connection with a disposition, sale, merger, reorganization or similar
transaction which causes such Participants to cease to participate in the
Plan.
(d) QUALIFIED MATCHING AND NONELECTIVE CONTRIBUTIONS.
Without regard to a Participant's vested interest in his Matching
Contribution Account and Nonelective Contribution Account as a whole, a
Participant will have a 100% vested and nonforfeitable interest at all times
in any subaccount attributable to Matching Contributions or Nonelective
Contributions that were designated as qualified contributions in accordance
with Section 3.2(d) or Section 3.3(b).
5.2 FORFEITURE OF NONVESTED AMOUNTS. A Participant's nonvested
interest in his Matching Contribution Account and Nonelective Contribution
Account will be forfeited on the earlier of (i) the date of distribution to
the Participant of his vested balance attributable to such Accounts in
connection with termination of employment, or (ii) the last day of the Plan
Year in which the Participant incurs five consecutive One Year Breaks in
Service. If the nonvested portion
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of a Participant's Matching Contribution Account or Nonelective Contribution
Account is forfeited on account of a distribution and the Participant again
becomes an Employee and re-enrolls in the Plan before he incurs five
consecutive One Year Breaks in Service, the forfeited amount will be restored
(without adjustment for gain or loss since the date of forfeiture) if he
repays to the Plan the full amount of the distribution attributable to
Matching Contributions and Nonelective Contributions before the earlier of
the date on which the Participant incurs five consecutive One Year Breaks in
Service after such distribution or five years after the date on which the
Participant again becomes an Employee.
5.3 UNCLAIMED DISTRIBUTION. If the Benefits Committee cannot
locate a person entitled to receive a benefit under the Plan within a
reasonable period (as determined by the Benefits Committee in its
discretion), the amount of the benefit will be treated as a forfeiture during
the Plan Year in which the period ends. If, before final distributions are
made from the Trust Fund following termination of the Plan, a person who was
entitled to a benefit which has been forfeited under this Section makes a
claim to the Benefits Committee or the Trustee for his benefit, he will be
entitled to receive, as soon as administratively feasible, a benefit in an
amount equal to the value of the forfeited benefit on the date of forfeiture.
This benefit will be reinstated from Participating Employer contributions
made to the Plan for this purpose.
5.4 APPLICATION OF FORFEITED AMOUNTS. The amount of a
Participant's Matching Contribution Account or Nonelective Contribution
Account which is forfeited will be applied as soon as practicable after the
close of each Plan Year to reduce Participating Employer contributions
pursuant to Article 3 or to pay Plan expenses.
5.5 REEMPLOYMENT PROVISIONS. If a Participant terminates
employment and again becomes an Employee, his Years of Service completed
before his reemployment will be included in determining his vested and
nonforfeitable interest after he again becomes an Employee.
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ARTICLE 6
DISTRIBUTIONS TO PARTICIPANTS
6.1 BASIC RULES GOVERNING DISTRIBUTIONS.
(a) TIMING OF DISTRIBUTIONS. Except as set forth in Sections
6.2 and 6.3, distribution of a Participant's vested Account balances will be
made as soon as practicable following the Participant's termination of
employment, including termination due to Disability. If a loan is
outstanding from the Trust Fund to the Participant on the date of a
distribution, the amount distributed will be reduced by any security interest
in the Participant's Accounts held by the Plan by reason of the loan.
(b) FORM OF DISTRIBUTIONS. Distributions will be made solely
in the form of a single lump sum cash payment, except that any life insurance
policy that is held in the Participant's Account at the time of distribution
will be distributed in kind.
(c) PARTICIPANT'S CONSENT TO CERTAIN PAYMENTS. If the amount
of a Participant's vested Account balances exceeds $3,500 ($5,000 for Plan
Years beginning after December 31, 1997), the Benefits Committee will not
distribute the Participant's vested Account balances to him prior to the
later of Normal Retirement Age or age 62 unless he consents to the
distribution. A distribution may be made less than 30 days after the
Participant has been furnished an explanation of his distribution options
provided that (i) the Committee clearly informs the Participant that he has
the right to consider whether to accept a distribution and whether to consent
to a particular form of distribution for at least 30 days after he has been
provided the relevant information, and (ii) the Participant affirmatively
elects to waive the 30-day notice period and receive a distribution. The
foregoing provision will not apply to any distributions required under
Sections 10.6 and 10.7.
6.2 HARDSHIP DISTRIBUTIONS.
(a) GENERAL RULE. A Participant who has not terminated
employment may request a distribution from his Deferral Contribution Account
and Rollover Account in the event of the Participant's hardship. A
distribution will be on account of hardship only if the distribution is
necessary to satisfy an immediate and heavy financial need of the
Participant, as defined below, and satisfies all other requirements of this
Section.
(b) DEEMED FINANCIAL NEED. For purposes of this subsection,
a distribution is made on account of an immediate and heavy financial need of
the Participant only if the distribution is for (i) the payment of medical
expenses described in Code section 213(d) previously incurred by the
Participant, the Participant's spouse or any dependents of the Participant
(as defined in Code section 152) or necessary for those persons to obtain
medical care described in section 213(d); (ii) the purchase (excluding
mortgage payments) of a principal residence for the Participant; (iii) the
payment of tuition and related educational fees for the next 12 months of
post-secondary education for the Participant, his or her spouse, children, or
dependents; (iv) the need
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to prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; (v) the
payment of funeral expenses of a family member; or (vi) the payment of a
federal tax levy against the Participant made pursuant to Section 6331 of the
Code (or any successor provision), or the payment of an unpaid federal tax
assessment.
(c) RELIANCE ON PARTICIPANT REPRESENTATION. A distribution
will be considered necessary to satisfy an immediate and heavy financial need
of the Participant only if (i) the Participant represents in writing, on
forms provided by the Benefits Committee, (A) that the distribution is not in
excess of the amount required to relieve the immediate and heavy financial
need of the Participant (which may include federal, state or local income
taxes or penalties reasonably anticipated to result from the distribution),
and (B) that the need cannot be relieved through reimbursement or
compensation by insurance or otherwise, by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not itself cause
an immediate and heavy financial need, by cessation of Deferral Contributions
under the Plan, or by distributions other than hardship distributions or
nontaxable (at the time of the loan) loans from plans maintained by any
Controlled Group Member or any other entity by which the Participant is
employed, or by borrowing from commercial sources on reasonable commercial
terms, and (ii) the Benefits Committee does not have actual knowledge
contrary to the Participant's representation.
(d) SOURCE OF HARDSHIP DISTRIBUTIONS. The cumulative amount
distributed from a Participant's Deferral Contribution Account on account of
hardship will not exceed the balance of the Participant's Deferral
Contribution Account as of December 31, 1988, plus the amount of Deferral
Contributions made after that date (but not earnings on such contributions).
6.3 WITHDRAWALS.
(a) WITHDRAWALS AFTER AGE 59-1/2. A Participant who has
attained age 59-1/2 may elect to withdraw up to 100% of the vested balance of
his Accounts without regard to whether the Participant has suffered a
hardship as described in Section 6.2. A Participant may not make an
application for a withdrawal under this subsection more than once in any
calendar quarter.
(b) WITHDRAWALS FROM ROLLOVER ACCOUNT. A Participant may
elect to withdraw up to 100% of the vested balance of his Rollover Account.
A Participant may not make an application for a withdrawal under this
subsection more than once in any calendar quarter.
(c) DISTRIBUTIONS TO ALTERNATE PAYEES. Distribution to an
alternate payee pursuant to a "qualified domestic relations order" within the
meaning of Code section 414(p) may be made in an immediate lump sum payment
without regard to the age or employment status of the Participant to whom
such order relates.
6.4 DISTRIBUTION PROCEDURES. Distributions pursuant to Sections
6.2 and 6.3 will be made as soon as practicable following approval of the
Participant's request for distribution or withdrawal in accordance with
procedures established by the Benefits Committee, and will be made in the
form described in Section 6.1(b). No distribution under this Section will be
made in an amount that is greater than the excess of the Participant's vested
interest in the Accounts from which
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the distributions are made over the aggregate amount of outstanding loans,
plus accrued interest, secured by such Accounts.
6.5 LOANS TO PARTICIPANTS.
(a) GENERAL PROVISIONS. A Participant may, subject to the
provisions of this Section, borrow from the vested interest in his Accounts.
All such loans will be subject to the requirements of this Section and such
other rules as the Benefits Committee may from time to time prescribe,
including without limitation any rules restricting the purposes for which
loans will be approved. The Benefits Committee will have complete discretion
as to the procedures for approval of a loan hereunder and as to the terms
thereof, provided that its decisions will be made on a uniform and
nondiscriminatory basis and in accordance with this Section. Nothing in this
Section will require the Benefits Committee to make loans available to
Participants.
(b) TERMS AND CONDITIONS. Loans to Participants will be made
according to the following terms and conditions and such additional terms and
conditions as the Benefits Committee may from time to time establish: (i) no
loan will be for a term of longer than five years, unless the loan is used to
acquire a dwelling unit which will within a reasonable time be used as the
principal residence of the Participant (provided that the rules prescribed by
the Benefits Committee permit principal residence loans); (ii) all loans will
become due and payable in full upon termination (by death or otherwise) of
the Participant's employment with the Employer and upon the occurrence of
such other events as the Benefits Committee may from time to time specify;
(iii) all loans will bear a reasonable rate of interest as determined by the
Benefits Committee from time to time; (iv) all loans will be made only upon
receipt of adequate security (the security for a loan will be the
Participant's interest in the separate investment fund established under
subsection (f) for that loan in an amount that does not exceed 50% of the
Participant's vested interest under the Plan); (v) payments of principal and
interest will be made through payroll deductions sufficient to provide for
substantially level amortization of principal and interest with payments not
less frequently than quarterly (subject to reasonable rules adopted by the
Benefits Committee with respect to authorized leaves of absence) and such
payroll deductions will be irrevocably authorized by the Participant in a
manner approved by the Benefits Committee; (vi) the amount of any
indebtedness (including accrued and unpaid interest) under any loan will be
deducted from a Participant's interest in the Trust Fund if and only if such
indebtedness or any installment thereof is not paid when due (including
amounts due by acceleration), provided that no such deduction will be made
until such time as, and only to the extent that, the Participant could
otherwise receive a distribution under the Plan; (vii) no more than one
outstanding loan will be permitted with respect to a Participant at any time,
unless the Benefits Committee adopts a rule that permits more than one
outstanding loan at a time (subject to the limitations of subsection (c));
(viii) a Participant may not borrow more than once during any one calendar
year, unless the Benefits Committee adopts a rule that permits more frequent
borrowing; and (ix) all loans will be evidenced by a loan and security
agreement containing such additional terms and conditions as the Benefits
Committee determines.
(c) MAXIMUM AMOUNT OF LOANS. The amount of any loan made
pursuant to this Section, when added to the outstanding balance of all other
loans to the Participant from all qualified employer plans (as defined in
Code section 72(p)(4)) of the Controlled Group, will not exceed the lesser
of (i) 50% of the nonforfeitable interest in his Accounts, or (ii) $50,000
reduced
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by the excess, if any, of (A) the highest outstanding balance of all other
loans from qualified employer plans of the Employer and any controlled group
member to the Participant during the 1-year period ending on the date on
which such loan was made, over (B) the outstanding balance of all loans from
qualified employer plans of the Employer and controlled group to the
Participant on the date on which such loan was made.
(d) MINIMUM LOAN. The minimum loan permitted under this
Section is $1,000.00, unless the Benefits Committee adopts a rule setting a
lower minimum loan amount. If such minimum amount exceeds the limitations of
subsection (c), no loan will be made.
(e) SOURCE OF LOANS. All loans will be made from the portion
of a Participant's vested Account (including earnings) attributable to the
following: first, from Matching Contributions, next from Nonelective
Contributions, next from Rollover Contributions (including plan to plan
transfers), and last from Deferral Contributions. Loans made from a
subaccount will be made pro rata from the investment funds within such
subaccount unless the Benefits Committee adopts a different ordering rule.
(f) INVESTMENT OF LOAN PAYMENTS. All loans will be treated
as a separate investment fund of the borrowing Participant. All payments
with respect to a loan will be credited to the borrowing Participant's loan
account and will be invested in accordance with the Participant's investment
directions in effect under the Plan, or if none, as directed by the Benefits
Committee.
6.6 REEMPLOYMENT OF PARTICIPANT. If a Participant who terminated
employment again becomes an Employee before receiving a distribution of his
Account balances, no distribution from the Trust Fund will be made while he
is an Employee, and amounts distributable to him on account of his prior
termination will be held in the Trust Fund until he is again entitled to a
distribution under the Plan.
6.7 VALUATION OF ACCOUNTS. A Participant's distributable Account
balances will be valued as of the latest Valuation Date prior to distribution
of the Accounts.
6.8 RESTRICTIONS ON DISTRIBUTIONS. Article 11 sets forth certain
rules under various provisions of the Code relating to restrictions on
distributions to Participants, to which all distributions under this Article
6 are subject.
6.9 DIRECT ROLLOVERS.
(a) DIRECT ROLLOVER OPTION. Notwithstanding any other
provision of the Plan, a Distributee (as hereinafter defined) may elect, at
any time and in the manner prescribed by the Benefits Committee, to have any
portion of an Eligible Rollover Distribution (as hereinafter defined) paid
directly to an Eligible Retirement Plan (as hereinafter defined) specified by
the Distributee.
(b) DEFINED TERMS. (i) An Eligible Rollover Distribution is
any distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not include
(A) any distribution that is one of a series of substantially
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equal periodic payments (not less frequently than annually) made for the life
of life expectancy of the Distributee or the joint lives or life expectancies
of the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more, (B) any distribution to the extent
such distribution is required by Code section 401(a)(9), and (C) the portion
of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect
to employer securities).
(ii) An Eligible Retirement Plan is an individual
retirement account described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan described in Code
section 403(a), or a qualified trust described in Code section 401(a) that is
a Defined Contribution Plan within the meaning of Section 10.2(l), that
accepts the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to a Participant's surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(iii) A Distributee includes a Participant, the
Participant's spouse, or a Participant's former spouse who is an alternate payee
under a qualified domestic relations order, as defined in Code section 414(p).
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ARTICLE 7
DISTRIBUTIONS TO BENEFICIARIES
7.1 DESIGNATION OF BENEFICIARY. Each Participant will have the
right to designate a Beneficiary or Beneficiaries to receive his vested
Account balances upon his death. The designation will be made on forms
prescribed by the Benefits Committee and will be effective upon receipt by
the Benefits Committee. A Participant will have the right to change or
revoke any designation by filing a new designation or notice of revocation
with the Benefits Committee, but the revised designation or revocation will
be effective only upon receipt by the Benefits Committee.
7.2 CONSENT OF SPOUSE REQUIRED. A Participant who is married may
not designate a Beneficiary other than, or in addition to, his spouse unless
his spouse consents to the designation by means of a written instrument that
is signed by the spouse, identifies the specific Beneficiary (including any
class of Beneficiaries or any contingent Beneficiaries) elected, contains an
acknowledgment by the spouse of the effect of the consent, and is witnessed
by a member of the Benefits Committee (other than the Participant) or by a
notary public. The designation will be effective only with respect to the
consenting spouse, whose consent will be irrevocable. A Beneficiary
designation to which a spouse has consented under this Section will be
effective only if it states that it may not be changed by the Participant,
other than to designate the spouse as the Beneficiary, without spousal
consent, unless the spouse's prior consent expressly permits Beneficiary
designations by the Participant without any further consent of the spouse, in
which case the prior consent will be effective as to subsequent changes only
if it acknowledges that the spouse has the right to limit consent to a
specific Beneficiary, and states that the spouse voluntarily elects to
relinquish such right.
7.3 FAILURE TO DESIGNATE BENEFICIARY. In the event a Participant
has not designated a Beneficiary, or in the event no Beneficiary survives a
Participant, the distribution of the Participant's vested Account balances
upon his death will be made (i) to the Participant's spouse, if living, (ii)
if his spouse is not then living, to his then living children in equal shares
(including the issue of any deceased children by right of representation),
(iii) if neither his spouse nor any of his issue are then living, to his
estate.
7.4 DISTRIBUTIONS TO BENEFICIARIES. Distribution of a
Participant's vested Account balances to the Participant's Beneficiary will
be made as soon as practicable after the Participant's death. The
Participant's vested Account balances will be distributed to the Beneficiary
in a single lump sum payment in cash. The Participant's Account balances
will be valued as of the latest Valuation Date prior to distribution of the
Accounts. If a loan is outstanding from the Trust Fund to the Participant on
the date of his death, the amount distributed to his Beneficiary will be
reduced by any security interest in the Participant's Accounts held by the
Plan by reason of the loan.
7.5 RESTRICTIONS ON DISTRIBUTIONS. Article 11 sets forth certain
rules under various provisions of the Code relating to restrictions on
distributions to Beneficiaries, to which distributions under this Article 7
are subject.
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ARTICLE 8
PROVISIONS REGARDING COMPANY STOCK AND OTHER SECURITIES
8.1 NAMED FIDUCIARIES.
(a) INVESTMENT COMMITTEE AS NAMED FIDUCIARY. The Investment
Committee will be the named fiduciary within the meaning of ERISA section
402(a)(2) for purposes of directing the Trustee with respect to (i)
exercising any options, warrants or other rights in connection with shares of
Company Stock held in the Trust Fund; and (ii) exercising any appraisal
rights, dissenters' rights or similar rights granted by applicable law to the
registered or beneficial holders of Company Stock. The Investment Committee
will adopt from time to time whatever procedures it determines to be
appropriate in order to exercise its powers and duties under this subsection
(a) and may retain advisors and consultants (including, without limitation,
legal counsel and financial advisors) who are independent of the Company, the
Board and the Trustee to the extent the Investment Committee determines such
independent advice to be necessary or appropriate.
(b) DELEGATION OF POWERS AND DUTIES. The Investment
Committee may, in its discretion, delegate any power or duty allocated to it
pursuant to subsection (a) above to another person or entity, who will act as
an independent fiduciary and will exercise such power or duty to the same
extent as it could have been exercised by the Investment Committee. The
persons or entities to which such powers and duties may be delegated will
include, without limitation, the Board or any committee of the Board, the
Trustee, any other person or entity that meets the requirements of an
investment manager under ERISA section 3(38), or any other person or entity
that the Investment Committee determines in good faith has the requisite
knowledge and experience concerning the matter with respect to which the
delegation is made. The Investment Committee may also remove any fiduciary
to whom it has delegated any power or duty and exercise such power or duty
itself or appoint a successor fiduciary. For purposes of Sections 8.2 and
8.3, the term "Investment Committee" will also mean any fiduciary to which
the Investment Committee has delegated any power or duty pursuant to this
subsection (b).
(c) PARTICIPANTS AND BENEFICIARIES AS NAMED FIDUCIARIES.
Each Participant and Beneficiary who furnishes instructions to the Trustee
on any matter relating to Company Stock held in the Trust Fund in accordance
with the provisions of Section 8.2 or Section 8.3 will be a named fiduciary
within the meaning of ERISA section 402(a)(2) with respect to such matter.
8.2 VOTING OF COMPANY STOCK BY PARTICIPANTS AND BENEFICIARIES.
Before each annual or special meeting of the Company's shareholders, the
Investment Committee will cause to be sent to each Participant and
Beneficiary who has Company Stock allocated to his Accounts on the record
date of such meeting a copy of the proxy solicitation material for the
meeting, together with a form requesting confidential instructions to the
Trustee on how to vote the shares of Company Stock allocated to his Accounts.
Upon receipt of such instructions, the Trustee will vote the shares
allocated to such Participant's or Beneficiary's Accounts as instructed. The
Trustee will vote allocated shares of Company Stock for which it does not
receive timely instructions from Participants or Beneficiaries and any shares
of Company Stock that have not been allocated to
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Participants' Accounts in the same manner and proportions that it voted the
shares for which timely instruction were received. A Participant's or
Beneficiary's right to instruct the Trustee with respect to voting shares of
Company Stock will not include rights concerning the exercise of any
appraisal rights, dissenters' rights or similar rights granted by applicable
law to the registered or beneficial holders of Company Stock. These matters
will be exercised by the Trustee in accordance with the Investment
Committee's instructions.
8.3 TENDER OFFER FOR COMPANY STOCK. In the event of a tender
offer for shares of Company Stock subject to Section 14(d)(1) of the
Securities Exchange Act of 1934 or subject to Rule 13e-4 promulgated under
that Act (as those provisions may from time to time be amended or replaced by
successor provisions of federal securities laws), the Investment Committee
will advise each Participant and Beneficiary who has shares of Company Stock
allocated to his Accounts in writing of the terms of the tender offer as soon
as practicable after its commencement and will furnish each Participant and
Beneficiary with a form by which he may instruct the Trustee confidentially
to tender shares allocated to his Accounts. The Trustee will tender those
shares it has been properly instructed to tender, and will not tender those
shares which it has been properly instructed not to tender or for which it
has not received timely instructions. The Investment Committee will also
advise Participants and Beneficiaries that the terms of the Plan provide that
the Trustee will not tender allocated shares for which no instructions are
received from Participants and Beneficiaries and will furnish such related
documents as are prepared by any person and provided to the shareholders of
the Company pursuant to the Securities Exchange Act of 1934. The Investment
Committee may also provide Participants with such other material concerning
the tender offer as such Committee in its discretion determines to be
appropriate. The number of shares to which a Participant's instructions
apply will be the total number of shares allocated to his Accounts as of the
latest date for which Participant statements were prepared, or as of any
later date for which Account information is available in the normal course of
Plan administration. The Investment Committee will advise the Trustee of the
commencement date of any tender offer and, until receipt of that advice, the
Trustee will not be obligated to take any action under this Section. Funds
received in exchange for tendered stock will be credited to the Accounts of
the Participant or Beneficiary whose stock was tendered and will be invested
as directed by the Participant or Beneficiary in investment funds permitted
under the Trust Agreement, or if no investment directions are furnished to
the Trustee, as directed by the Investment Committee.
8.4 VOTING AND TENDER DECISIONS FOR OTHER SECURITIES. Voting,
tender and similar decisions which are incidental to a Participant's or
Beneficiary's ownership interest in any investment fund under the Plan (other
than the Company Stock fund) will be exercised by the Trustee only in
accordance with instructions received from the Participant or Beneficiary,
who are named fiduciaries for such purposes within the meaning of ERISA
section 402(a)(2). The Trustee will not exercise any such voting, tender or
similar rights for which no instructions are received from the Participant or
Beneficiary. The Investment Committee will cause to be sent to each such
Participant and Beneficiary any materials provided to the Plan with respect
to such voting, tender and similar rights within a reasonable time before
such rights must be exercised.
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ARTICLE 9
ADMINISTRATION OF THE PLAN AND TRUST AGREEMENT
9.1 APPOINTMENT OF THE COMMITTEES.
(a) BENEFITS COMMITTEE. The Board will appoint a Benefits
Committee to administer the Plan in accordance with this Article 9, which
will consist of at least three members who will hold office at the pleasure
of the Board. The Benefits Committee will be responsible for the overall
administration and operation of the Plan and the Trust, except for those
matters that are within the responsibility of the Investment Committee. The
Benefits Committee will administer the Plan and will have all of the powers
necessary to accomplish that purpose, including without limitation the
authority and discretion to (i) resolve all questions relating to the
eligibility of Employees to become Participants, (ii) determine the amount of
benefits payable to Participants or their Beneficiaries, and determine the
time and manner in which such benefits are to be paid, (iii) authorize and
direct all disbursements by the Trustee from the Trust Fund, (iv) construe
and interpret the Plan and the Trust Agreement, supply omissions from,
correct deficiencies in, and resolve ambiguities in the language of the Plan
and the Trust Agreement and adopt rules for the administration of the Plan
and the Trust Agreement which are not inconsistent with the terms of such
documents, (v) engage any administrative, legal, accounting, clerical, or
other services it deems appropriate; (vi) compile and maintain all records it
determines to be necessary, appropriate or convenient in connection with the
administration of the Plan and the Trust Agreement, (vii) determine the
disposition of assets in the Trust Fund in the event the Plan is terminated,
(viii) review the performance of the Trustee with respect to the Trustee's
administrative duties, responsibilities and obligations under the Plan and
the Trust Agreement, report to the Board regarding such administrative
performance of the Trustee, and recommend to the Board, if necessary, the
removal of the Trustee and the appointment of a successor Trustee, and (ix)
resolve all questions of fact relating to any matter for which it has
administrative responsibility.
(b) INVESTMENT COMMITTEE. The Board will appoint an
Investment Committee which will consist of at least three members who will
hold office at the pleasure of the Board. The Investment Committee will be
responsible for the selection of investment funds and investment managers for
the Plan and Trust, for monitoring the performance of investment funds and
investment managers, and for all other matters directly related to the
investment of the assets of the Plan, including the powers set forth in
Article 8 with respect to Company Stock and other securities held in the
Trust Fund. The Investment Committee and each Participant will be named
fiduciaries for purposes of ERISA with respect to the management and control
of the assets of the Plan, but only to the extent that the Investment
Committee or Participant exercises any discretionary authority or
discretionary control with respect to the management or disposition of assets
of the Trust Fund. The Investment Committee will prepare, or cause to be
prepared, and will submit to the Board an annual investment performance
report with respect to the investment funds maintained in the Plan and such
other reports as the Board may from time to time request. In carrying out
its responsibilities under the Plan and Trust Agreement, the Investment
Committee will have the authority and discretion to (i) establish and
implement objectives and policies relating to the investment funds of the
Plan; (ii) direct the investment of any portion of the Trust Fund assets that
are not under the control of
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Participants, the discretionary authority of a Trustee or an investment
manager appointed pursuant to a Trust Agreement; (iii) appoint, remove,
approve investment guidelines for, approve the fee arrangements of and review
the performance of the Plan's investment funds, investment advisors and
investment managers; (iv) make recommendations to the Board and the Benefits
Committee concerning the adoption of Plan amendments relating to the
investment of Plan assets; (v) compile and maintain all records it determines
to be necessary, appropriate or convenient; and (vi) resolve all questions of
fact relating to any matter for which it has administrative responsibility.
9.2 ORGANIZATION OF THE COMMITTEES. Each Committee may choose
from its members a Chairman and a Secretary. Each Committee may employ and
suitably compensate such persons or organizations to render advice with
respect to the duties of the Committee under the Plan as the Committee
determines to be necessary or desirable. Members of the Committees may be
Employees or Participants, but are not required to be. Any member of a
Committee may resign by giving notice, in writing, filed with the Board.
9.3 ACTION OF THE COMMITTEES. Action of each Committee may be
taken with or without a meeting of Committee members, provided that action
will be taken only upon the vote or other affirmative expression of a
majority of the Committee's members qualified to vote with respect to such
action. The Chairman or the Secretary of the Committee may execute any
certificate or other written direction on behalf of the Committee, or the
Committee may expressly authorize any other member to take such action. In
the event the Committee members qualified to vote on any question are unable
to determine such question by a majority vote or other affirmative expression
of a majority of the Committee members qualified to vote on such question,
such question will be determined by the Board. A member of the Committee who
is a Participant may not vote on any question relating specifically to
himself unless he is the sole member of the Committee.
9.4 EXPENSES AND COMPENSATION. The expenses of administering the
Plan, including without limitation the expenses of each Committee properly
incurred in the performance of its duties under the Plan, will be paid from
the Trust Fund, and all such expenses paid by the Participating Employers on
behalf of the Plan will be reimbursed from the Trust Fund, unless the
Participating Employers in their own discretion elect not to submit such
expenses to the Trustee for reimbursement. In addition, (i) all fees charged
by the Trustee or any administrator that are directly related to a
Participant's loan pursuant to Section 6.5 will be paid from the Accounts of
the Participant requesting the loan, and (ii) all fees charged by the Trustee
or any administrator that are directly related to maintaining the account of
a Participant in a deferred status after the Participant has elected to defer
distribution in accordance with Section 6.1(c) will be paid from the Accounts
of such Participant. Notwithstanding the foregoing, the members of the
Committees will not be compensated by the Plan for their services as
Committee members.
9.5 GENERAL POWERS AND DUTIES OF THE COMMITTEES. Each Committee
will have the full power and responsibility to administer the Plan and the
Trust Agreement to the extent set forth in Section 8.1. In addition, each
Committee will have the powers and duties granted by the terms of the Trust
Agreement. Each Committee, and all other persons with discretionary control
respecting the operation, administration, control, and/or management of the
Plan, the Trust Agreement, and/or the Trust Fund, will perform their duties
under the Plan and the Trust Agreement solely in the interests of
Participants and their Beneficiaries.
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9.6 ALLOCATION OF FIDUCIARY RESPONSIBILITY. Each Committee from
time to time may allocate to one or more of its members and may delegate to
any other persons or organizations any of its rights, powers, duties and
responsibilities with respect to the operation and administration of the Plan
and the Trust Agreement that are permitted to be delegated under ERISA. Any
such allocation or delegation will be made in writing, will be reviewed
periodically by the Committee, and will be terminable upon such notice as the
Committee in its discretion deems reasonable and proper under the
circumstances. Whenever a person or organization has the power and authority
under the Plan or the Trust Agreement to delegate discretionary authority
respecting the administration of the Plan or the Trust Fund to another person
or organization, the delegating party's responsibility with respect to such
delegation is limited to the selection of the person to whom authority is
delegated and the periodic review of such person's performance and compliance
with applicable law and regulations. Any breach of fiduciary responsibility
by the person to whom authority has been delegated which is not proximately
caused by the delegating party's failure to properly select or supervise, and
in which breach the delegating party does not otherwise participate, will not
be considered a breach by the delegating party.
9.7 INFORMATION TO BE SUBMITTED TO THE COMMITTEES. To enable the
Committees to perform their functions, the Participating Employers will
supply full and timely information to each Committee on all matters relating
to Employees and Participants as the Committee may require and will maintain
such other records required by the Committee to determine the benefits due to
Participants or their Beneficiaries under the Plan.
9.8 NOTICES, STATEMENTS AND REPORTS. The Company will be the
"administrator" of the Plan as defined in ERISA section 3(16)(A) for purposes
of the reporting and disclosure requirements imposed by ERISA and the Code.
The Benefits Committee will assist the Company, as requested, in complying
with such reporting and disclosure requirements.
9.9 CLAIMS PROCEDURE.
(a) FILING CLAIM FOR BENEFITS. If a Participant or
Beneficiary does not receive the benefits which he believes he is entitled to
receive under the Plan, he may file a claim for benefits with the Benefits
Committee. All claims will be made in writing and will be signed by the
claimant. If the claimant does not furnish sufficient information to
determine the validity of the claim, the Benefits Committee will indicate to
the claimant any additional information which is required.
(b) NOTIFICATION BY THE COMMITTEE. Each claim will be
approved or disapproved by the Benefits Committee within 90 days following
the receipt of the information necessary to process the claim. In the event
the Benefits Committee denies a claim for benefits in whole or in part, the
Committee will notify the claimant in writing of the denial of the claim.
Such notice by the Benefits Committee will also set forth, in a manner
calculated to be understood by the claimant, the specific reason for such
denial, the specific Plan provisions on which the denial is based, a
description of any additional material or information necessary to perfect
the claim with an explanation of why such material or information is
necessary, and an explanation of the Plan's claim review procedure as set
forth in subsection (c). If no action is taken by the Benefits Committee on
a claim within 90 days, the claim will be deemed to be denied for purposes of
the review procedure.
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(c) REVIEW PROCEDURE. A claimant may appeal a denial of his
claim by requesting a review of the decision by the Benefits Committee or a
person designated by such Committee, which person will be a named fiduciary
under ERISA section 402(a)(2) for purposes of this Section. An appeal must
be submitted in writing within 90 days after the denial and must (i) request
a review of the claim for benefits under the Plan, (ii) set forth all of the
grounds upon which the claimant's request for review is based and any facts
in support thereof, and (iii) set forth any issues or comments which the
claimant deems pertinent to the appeal. The Benefits Committee or the named
fiduciary designated by such Committee will make a full and fair review of
each appeal and any written materials submitted in connection with the
appeal. The Benefits Committee or the named fiduciary designated by such
Committee will act upon each appeal within 60 days after receipt thereof
unless special circumstances require an extension of the time for processing,
in which case a decision will be rendered as soon as possible but not later
than 120 days after the appeal is received. The claimant will be given the
opportunity to review pertinent documents or materials upon submission of a
written request to the Benefits Committee or named fiduciary, provided the
Benefits Committee or named fiduciary finds the requested documents or
materials are pertinent to the appeal. On the basis of its review, the
Benefits Committee or named fiduciary will make an independent determination
of the claimant's eligibility for benefits under the Plan. The decision of
the Benefits Committee or named fiduciary on any claim for benefits will be
final and conclusive upon all parties thereto. In the event the Benefits
Committee or named fiduciary denies an appeal in whole or in part, it will
give written notice of the decision to the claimant, which notice will set
forth in a manner calculated to be understood by the claimant the specific
reasons for such denial and which will make specific reference to the
pertinent Plan provisions on which the decision was based.
9.10 SERVICE OF PROCESS. The Benefits Committee may from time to
time designate an agent of the Plan for the service of legal process. The
Benefits Committee will cause such agent to be identified in materials it
distributes or causes to be distributed when such identification is required
under applicable law. In the absence of such a designation, the Company and
the Trustee will be the agent of the Plan for the service of legal process.
9.11 CORRECTION OF PARTICIPANTS' ACCOUNTS. If an error or omission
is discovered in the Accounts of a Participant, or in the amount distributed
to a Participant, the Benefits Committee will make such equitable adjustments
in the records of the Plan as may be necessary or appropriate to correct such
error or omission as of the Plan Year in which such error or omission is
discovered. Further, a Participating Employer may, in its discretion, make a
special contribution to the Plan which will be allocated by the Benefits
Committee only to the Account of one or more Participants to correct such
error or omission.
9.12 PAYMENT TO MINORS OR PERSONS UNDER LEGAL DISABILITY. If any
benefit becomes payable to a minor or to a person under a legal disability,
payment of such benefit will be made only to the guardian of the person or
the estate of such minor, provided the guardian acknowledges in writing, in a
form acceptable to the Benefits Committee, receipt of the payment on behalf
of the minor. If any benefit becomes payable to any other person under a
legal disability, payment of such benefit will be made only to the
conservator or the guardian of the estate of such person appointed by a court
of competent jurisdiction. Any payment made in accordance with the
provisions of this Section on behalf of a minor or other person under a legal
disability will fully discharge the Plan's obligation to such person.
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9.13 UNIFORM APPLICATION OF RULES AND POLICIES. Each Committee in
exercising its discretion granted under any of the provisions of the Plan or
the Trust Agreement will do so only in accordance with rules and policies
established by it which will be uniformly applicable to all Participants and
Beneficiaries.
9.14 FUNDING POLICY. The Plan is to be funded through
Participating Employer contributions and earnings on such contributions; and
benefits will be paid to Participants and Beneficiaries as provided in the
Plan.
9.15 THE TRUST FUND. The Trust Fund will be held by the Trustee
for the exclusive benefit of Participants and Beneficiaries. The assets held
in the Trust Fund will be invested and reinvested in accordance with the
terms of the Trust Agreement, which is hereby incorporated into and made a
part of the Plan. All benefits will be paid solely out of the Trust Fund, and
no Participating Employer will be otherwise liable for benefits payable under
the Plan.
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ARTICLE 10
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS TO
PARTICIPANTS' ACCOUNTS
10.1 PRIORITY OVER OTHER CONTRIBUTION AND ALLOCATION PROVISIONS.
The provisions set forth in this Article will supersede any conflicting
provisions of Articles 3 and 4.
10.2 DEFINITIONS USED IN THIS ARTICLE. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "ANNUAL ADDITION" means the sum of the following amounts
with respect to all Qualified Plans and Welfare Benefit Funds maintained by
the Controlled Group Members:
(i) the amount of Controlled Group Member contributions
with respect to the Limitation Year allocated to the Participant's account;
(ii) the amount of any forfeitures for the Limitation
Year allocated to the Participant's account;
(iii) the amount, if any, carried forward pursuant to
Section 10.4 or a similar provision in another Qualified Plan and allocated
to the Participant's account;
(iv) the amount of a Participant's voluntary
nondeductible contributions for the Limitation Year, provided, however, that
the Annual Addition for any Limitation Year beginning before January 1, 1987
will not be recomputed to treat all of the Participant's nondeductible
voluntary contributions as part of the Annual Addition;
(v) the amount allocated after March 31, 1984 to an
individual medical benefit account (as defined in Code section 415(1)(2)) which
is part of a Defined Benefit Plan or an annuity plan; and
(vi) the amount derived from contributions paid or
accrued after December 31, 1985 in taxable years ending after such date that
are attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code section 4l9A(d)(3))
under a Welfare Benefit Fund. A Participant's Annual Addition will not
include any nonvested amounts restored to his account following his
reemployment before incurring five consecutive One Year Breaks in Service,
and a corrective allocation pursuant to Section 9.12 will be considered an
Annual Addition for the Limitation Year to which it relates.
(b) "AVERAGE CONTRIBUTION PERCENTAGE" means the average of
the Contribution Percentages of each Participant in a group of Participants.
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(c) "AVERAGE DEFERRAL PERCENTAGE" means the average of the
Deferral Percentages of each Participant in a group of Participants.
(d) "COMPENSATION" means the wages (as defined in Code
section 3401(a) for purposes of income tax withholding at the source but
determined without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the services
performed) paid to an Employee by the Controlled Group Members during the
Plan Year, reduced by all of the following items (even if includible in gross
income): reimbursements or other expense allowances, fringe benefits (cash
and non-cash), moving expenses, deferred compensation, and welfare benefits
(such as health benefits and severance pay). In addition, Compensation
includes any contributions made by the Controlled Group Members on behalf of
an Employee pursuant to a deferral election under the Plan or under any other
employee benefit plan that are not includable in income under Code section
402(a)(8) and any contributions made by the Controlled Group Members on
behalf of an Employee to a cafeteria plan that are not includable in income
under Code section 125. The annual Compensation of an Employee taken into
account for any purpose under the Plan will not exceed $150,000, as adjusted
by the Secretary of the Treasury. For the Plan year in which an Employee
becomes a Participant and the Plan Year in which an Employee ceases to be a
Participant, Compensation will be determined on the basis of the portion of
the Plan Year during which the Employee is a Participant.
(e) "CONTRIBUTION PERCENTAGE" means the ratio (expressed as a
percentage) determined by dividing the Matching Contributions made to the
Plan on behalf of a Participant who is eligible to receive Matching
Contributions for a Plan Year (but only to the extent such Matching
Contributions are not taken into account in determining the Participant's
Deferral Percentage for the Plan Year) by the Participant's Compensation for
the Plan Year. In addition, all or a portion of a Participant's Deferral
Contributions may be treated as Matching Contributions for purposes of
determining the Participant's Contribution Percentage, to the extent needed
to satisfy the limitation contained in Section 10.7. A Participant is
eligible for purposes of determining his Contribution Percentage even though
no Matching Contributions are made to the Plan on his behalf because of the
suspension of his Deferral Contributions under the terms of the Plan, because
of an election not to participate, or because of the limitations contained in
Sections 10.3 through 10.5 of the Plan.
(f) "DEFERRAL PERCENTAGE" means the ratio (expressed as a
percentage) determined by dividing the Deferral Contributions made to the
Plan on behalf of a Participant who is eligible to make Deferral
Contributions for all or a portion of a Plan Year (but only to the extent
such Deferral Contributions are not taken into account in determining the
Participant's Contribution Percentage for the Plan Year) by the Participant's
Compensation for the Plan Year. In addition, if the Matching Contributions
to the Plan for any Plan Year satisfy the requirements of Code section
401(k)(2)(B) and (C), a Participant's Deferral Percentage will be determined
by aggregating the Deferral Contributions and Matching Contributions made to
the Plan on his behalf for such Plan Year. A Participant is eligible to make
Deferral Contributions for purposes of determining his Deferral Percentage
even though he may not make Deferral Contributions because of the suspension
of his Deferral Contributions under the terms of the Plan, because of an
election not to participate, or because of the limitations contained in
Sections 10.3 through 10.5 of the Plan. A Deferral Contribution will be taken
into account for a Plan Year only if (i) the allocation of such contribution
is not contingent on participation in the Plan or the performance of services
after the Plan Year, (ii)
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such contribution is paid to the Trustee within 12 months after the end of
the Plan Year, and (iii) such contribution relates to Compensation that
either would have been received by the Participant in the Plan Year, or that
is attributable to services performed during the Plan Year and that would
have been received within two and one-half months after the Plan Year, but
for the election to defer.
(g) "DEFINED BENEFIT DOLLAR LIMITATION" means for any
Limitation Year, $90,000 or such amount as determined by the Commissioner of
Internal Revenue under Code section 415(d)(1) as of the January 1 falling
within such Limitation Year.
(h) "DEFINED BENEFIT FRACTION" means a fraction, the
numerator of which is the Projected Annual Benefit of a Participant under all
Defined Benefit Plans maintained by a Controlled Group Member determined as
of the close of the Limitation Year and the denominator of which is the
lesser of (i) 140% of the Participant's average Includable Compensation that
may be taken into account for the Limitation Year under Code section
415(b)(1)(B), or (ii) 125% of the Defined Benefit Dollar Limitation,
determined as of the close of the Limitation Year. If the Participant was a
participant in a Defined Benefit Plan maintained by a Controlled Group Member
in existence on July 1, 1982, or on May 6, 1986, the denominator of the
Defined Benefit Fraction will not be less than 125% of the greater of the
Participant's accrued Projected Annual Benefit under such plan as of the end
of the last Limitation Year beginning before January 1, 1983, or his accrued
Projected Annual Benefit of the end of the last Limitation Year beginning
January 1, 1987. The preceding sentence applies only if the Defined Benefit
Plan satisfied the requirements of Code section 415 as in effect at the end
of such Limitation Year.
(i) "DEFINED BENEFIT PLAN" means a Qualified Plan other than
a Defined Contribution Plan.
(j) "DEFINED CONTRIBUTION DOLLAR LIMITATION" means for any
Limitation Year, $30,000 or, if greater, 25% of the Defined Benefit Dollar
Limitation for the same Limitation Year. If a short Limitation Year is
created because of a Plan amendment changing the Limitation Year to a
different 12-consecutive month period, the Defined Contribution Dollar
Limitation for the short Limitation Year will not exceed the amount
determined in the preceding sentences multiplied by a fraction, the numerator
of which is the number of months in the short Limitation Year and the
denominator of which is 12.
(k) "DEFINED CONTRIBUTION FRACTION" means a fraction, the
numerator of which is the sum of the Annual Additions allocated to the
Participant's accounts for the applicable Limitation Year and each prior
Limitation Year, and the denominator of which is the sum of the lesser of the
following products for each Limitation Year in which the Participant was an
Employee (regardless of whether a Defined Contribution Plan was in existence
for such Limitation Year) (i) the Defined Contribution Dollar Limitation
(determined for this purpose without regard to the provisions of Code section
415(c)(6)) effective for the Limitation Year multiplied by 125%, or (ii) 35%
of the Participant's Includable Compensation for such Limitation Year.
(l) "DEFINED CONTRIBUTION PLAN" means a Qualified Plan
described in Code section 414(i).
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(m) "FAMILY MEMBER" means, with respect to an Employee, the
Employee's spouse and lineal ascendants or descendants and the spouses of
such lineal ascendants or descendants.
(n) "HIGHLY COMPENSATED EMPLOYEE" means, for a particular
Plan Year, any Employee who (i) during the current or the preceding Plan
year, was at any time a 5-percent owner (within the meaning of Code section
416(i)(1)), or (ii) for the preceding Plan Year received Compensation from a
Controlled Group Member in excess of $80,000 (as adjusted pursuant to Code
section 415(d)). A Highly Compensated Employee also includes a former
Employee whose termination of employment occurred prior to the Plan year and
who was a Highly Compensated Employee for the Plan Year in which his
termination of employment occurred or for any Plan year ending on or after
his 55th birthday.
(o) "INCLUDABLE COMPENSATION" means the wages paid to an
Employee (as defined in Code section 3401(a) for purposes of income tax
withholding at the source but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of
the employment or the services performed) by the Participating Employers
during the Plan Year. Effective for Plan Years beginning on or after January
1, 1998, Includable Compensation also includes any contributions made by the
Participating Employers on behalf of an Employee pursuant to a deferral
election under the Plan or under any other employee benefit plan that are not
includable in income under Code section 402(a)(8) and any contributions made
by the Participating Employers on behalf of an Employee to a cafeteria plan
that are not includable in income under Code section 125.
(p) "LIMITATION YEAR" means the 12-consecutive-month period
used by a Qualified Plan for purposes of computing the limitations on
benefits and annual additions under Code section 415. The Limitation Year
for this Plan is the Plan Year.
(q) "MAXIMUM ANNUAL ADDITION" means with respect to a
Participant for any Limitation Year an amount equal to the lesser of (i) the
Defined Contribution Dollar Limitation or (ii) 25% of the Participant's
Includable Compensation.
(r) "NONHIGHLY COMPENSATED EMPLOYEE" means an Employee who is
neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
(s) "PROJECTED ANNUAL BENEFIT" means the annual benefit (as
defined in Code section 415(b)(2)) to which a Participant would be entitled
under the terms of a Defined Benefit Plan maintained by a Controlled Group
Member, assuming that the Participant will continue employment until his
normal retirement age under the Defined Benefit Plan (or current age, if
later) and that the Participant's Includable Compensation for the current
Limitation Year and all other relevant factors used to determine benefits
under the Defined Benefit Plan will remain constant for all future Limitation
Years.
(t) "WELFARE BENEFIT FUND" means an organization described in
paragraph (7), (9), (17) or (20) of Code section 501(c), a trust, corporation
or other organization not exempt from federal income tax, or to the extent
provided in regulations, any account held for an employer by any
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person, which is part of a plan of an employer through which the employer
provides benefits to employees or their beneficiaries, other than a benefit
to which Code sections 83(h), 404 (determined without regard to Section
404(b)(2)) or 404A applies, or to which an election under Code section 463
applies.
10.3 GENERAL ALLOCATION LIMITATION. The Annual Addition of a
Participant for any Limitation Year will not exceed the Maximum Annual
Addition. If, except for the application of this Section, the Annual Addition
of a Participant for any Limitation Year would exceed the Maximum Annual
Addition, the excess Annual Addition attributable to this Plan will not be
allocated to the Participant's Account for the Plan Year included in such
Limitation Year, but will be subject to the provisions of Section 10.4. The
limitations contained in this Article will apply on an aggregate basis to all
Defined Contribution Plans and all Defined Benefit Plans (whether or not any
of such plans have terminated) established by the Controlled Group Members.
10.4 EXCESS ALLOCATIONS.
(a) PARTICIPANTS COVERED BY ONE DEFINED CONTRIBUTION PLAN.
If the Participant is not covered under another Defined Contribution Plan or
a Welfare Benefit Fund maintained by a Controlled Group Member during the
Limitation Year and the amount otherwise allocable to his Account would
exceed the Maximum Annual Addition, the Participating Employer contributions
and forfeitures which would cause the Participant's Annual Addition to exceed
the Maximum Annual Addition will be successively allocated in the manner
described in Section 4.2 among the Accounts of eligible Participants whose
Annual Additions do not exceed the Maximum Annual Addition. If, after such
allocations have been made, there remain Participating Employer contributions
or forfeitures which cannot be allocated without causing the Annual Addition
of a Participant to exceed the Maximum Annual Addition, the forfeitures which
cause the Annual Addition to exceed the Maximum Annual Addition and the
Participating Employer contributions which result from a reasonable error in
estimating the Participant's Includable Compensation or from any other
limited facts and circumstances which the Commissioner of Internal Revenue
finds justifiable under Section 1.415-6(b)(6) of the regulations and which
cause the Participant's Annual Addition to exceed the Maximum Annual Addition
will be held in a suspense account in the Trust Fund to be carried forward
and used in subsequent Limitation Years to reduce Participating Employer
contributions to the Plan. If a suspense account is in existence at any time
during a Limitation Year, all amounts in the suspense account must be
allocated before any contributions which would constitute Annual Additions
will be made to the Plan for that Limitation Year.
(b) PARTICIPANTS COVERED BY TWO OR MORE DEFINED CONTRIBUTION
PLANS. If, in addition to this Plan, the Participant is covered under
another Defined Contribution Plan or a Welfare Benefit Fund maintained by a
Controlled Group Member during the Limitation Year, the following provisions
will apply. The Annual Addition which may be credited to a Participant's
Account under this Plan for any such Limitation Year will not exceed the
Maximum Annual Addition reduced by the Annual Addition credited to a
Participant's accounts under the other Defined Contribution Plans and Welfare
Benefit Funds for the same Limitation Year. If the Annual Addition with
respect to the Participant under the other Defined Contribution Plans and
Welfare Benefit Funds maintained by a Controlled Group Member is less than
the Maximum Annual Addition and the Participating Employer contribution that
would otherwise be contributed or allocated to the Participant's Account
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under this Plan would cause the Annual Addition for the Limitation Year to
exceed the Maximum Annual Addition, the amount to be contributed or allocated
to the Participant's Account under this Plan will be reduced so that the
Annual Addition under all such Defined Contribution Plans and Welfare Benefit
Funds for the Limitation Year will equal the Maximum Annual Addition. If the
aggregate Annual Addition with respect to the Participant under such other
Defined Contribution Plans and Welfare Benefit Funds is equal to or greater
than the Maximum Annual Addition, no amount will be contributed or allocated
to the Participant's Account under this Plan for the Limitation Year. An
excess Annual Addition will be reduced in the manner described in subsection
(c).
(c) REDUCTION OF EXCESS ALLOCATIONS. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Annual Addition for the Limitation Year will be determined on the basis of
the Participant's Includable Compensation for the Limitation Year. If a
Participant's Annual Addition under this Plan and the other Defined
Contribution Plans and Welfare Benefit Funds maintained by Controlled Group
Members would result in the Annual Addition exceeding the Maximum Annual
Addition for the Limitation Year, the excess amount will be deemed to consist
of the Annual Addition last allocated. In making this determination, the
Annual Addition attributable to a Welfare Benefit Fund will be deemed to have
been allocated first regardless of the actual date of allocation. If an
excess amount was allocated to a Participant on an allocation date of this
Plan that coincides with an allocation date of another plan, the excess
amount attributed to this Plan will be the product of (i) the total excess
amount allocated as of such date and (ii) the ratio of the Annual Addition
allocated to the Participant for the Limitation Year as of such date under
this Plan to the total Annual Addition allocated to the Participant for the
Limitation Year as of such date under this and all the other Defined
Contribution Plans. Any excess amount attributed to this Plan will be
disposed of in the manner described in subsection (a).
10.5 AGGREGATE BENEFIT LIMITATION.
(a) LIMITATION REPEALED EFFECTIVE JANUARY 1, 2000. The
provisions of subsection (b) below will not apply to any Limitation Year
beginning on or after January 1, 2000.
(b) RULE THROUGH 1999. If a Controlled Group Member
maintains, or at any time maintained, one or more Defined Benefit Plans
covering any Participant in this Plan, the sum of the Defined Benefit
Fraction and the Defined Contribution Fraction for any Limitation Year will
equal no more than one (1.0). The provisions of the Defined Benefit Plans
will govern the order of reduction of Annual Additions or benefit accruals
necessary to meet this limitation. If the provisions of the Defined Benefit
Plans are silent, the current Annual Addition under this Plan will be reduced
first, and then the rate of accrual under the Defined Benefit Plans will be
reduced, if necessary to meet this limitation. If the Defined Contribution
Plans taken into account in determining the Participant's Annual Addition
under this Article satisfied the requirements of Code section 415 as in
effect for all Limitation Years beginning before January 1, 1987, an amount
will be subtracted from the numerator of the Defined Contribution Fraction
(not exceeding such numerator) as prescribed in regulations so that the sum
of the Defined Contribution Fraction and the Defined Benefit Fraction does
not exceed 1.0. For purposes of this Section, a Participant's voluntary
nondeductible contributions to a Defined Benefit Plan will be treated as
being part of a separate Defined Contribution Plan.
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10.6 LIMITATION ON DEFERRAL CONTRIBUTIONS.
(a) AVERAGE DEFERRAL PERCENTAGE TEST. Notwithstanding any
other provision of the Plan, the Average Deferral Percentage for a Plan Year
for Participants who are Highly Compensated Employees will not exceed the
greater of: (i) 125% of the Average Deferral Percentage for the preceding
Plan Year of Participants who were Nonhighly Compensated Employees in such
year; or (ii) the lesser of (A) the Average Deferral Percentage for the
preceding Plan Year of Participants who were Nonhighly Compensated Employees
in such year, plus two percentage points or (B) 200% of the Average Deferral
Percentage for the preceding Plan Year of Participants who were Nonhighly
Compensated Employees in such year. The multiple use of the alternative test
contained in clause (ii) of this subsection will be restricted as provided in
regulations. For purposes of testing Average Deferral Percentages for the
1997 Plan Year, the Average Deferral Percentage test may be applied either on
the basis of current year data for Nonhighly Compensated Employees or on the
basis of such data for the preceding year.
(b) SUSPENSION OF DEFERRAL CONTRIBUTIONS. If at any time
during a Plan Year the Benefits Committee determines, on the basis of
estimates made from information then available, that the limitation described
in subsection (a) above will not be met for the Plan Year, the Benefits
Committee in its discretion may reduce or suspend the Deferral Contributions
of one or more Participants who are Highly Compensated Employees to the
extent necessary (i) to enable the Plan to meet such limitation or (ii) to
reduce the amount of excess Deferral Contributions that would otherwise be
distributed pursuant to subsection (c) below.
(c) REDUCTION OF EXCESS DEFERRAL CONTRIBUTIONS. If, for any
Plan Year, the Average Deferral Percentage for Participants who are Highly
Compensated Employees exceeds the limitation described in subsection (a)
above, the dollar amount of excess contributions for each Highly Compensated
Employee will be calculated in the manner described in Code section
401(k)(8)(B) and the regulations thereunder, and the excess will be
distributed on the basis of the amount of Deferral Contributions for each
such Participant until the aggregate amount of excess contributions (and
income allocable thereto) has been distributed. The Deferral Contributions
of the Highly Compensated Employee with the highest dollar amount of Deferral
Contributions will be reduced first by the amount required to cause that
Participant's Deferral Contributions to equal the next highest dollar amount,
and the process will be repeated until the total amount of excess
contributions has been distributed. Upon distribution of the total excess
Deferral Contributions in this manner, the Plan will be treated as satisfying
the percentage limitations of subsection (a) of this Section. Matching
Contributions made with respect to a Participant's excess Deferral
Contributions (and any income allocable thereto) will be forfeited and
applied as provided in Section 5.4. All distributions under this subsection
will be made within two and one-half months following the close of the Plan
Year, if practicable, but in no event later than the last day of the
immediately following Plan Year. The amount of excess Deferral Contributions
distributed pursuant to this Section with respect to a Participant for the
Plan Year will be reduced by any Deferral Contributions previously
distributed to the Participant for the same Plan Year pursuant to Section
3.1(d).
(d) DETERMINATION OF EARNINGS AND LOSSES. The earnings and
losses of the Trust Fund for the Plan Year allocable to the portion of a
Participant's Deferral Contributions that are distributed pursuant to
subsection (c) above will be determined by multiplying the Trust Fund
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earnings or losses for the Plan Year allocable to the Participant's Deferral
Contribution Account by a fraction, the numerator of which is the amount of
Deferral Contributions to be distributed to the Participant and the
denominator of which is the balance of the Participant's Deferral
Contribution Account on the last day of the Plan Year, reduced by the
earnings and increased by the losses allocable to such Account for the Plan
Year. The earnings and losses of the Trust Fund for the period between the
end of the Plan Year and the date of such distribution will not be taken into
account when determining income allocable to excess contributions.
(e) DISCRIMINATORY MATCHING CONTRIBUTIONS. If the allocation
of Matching Contributions to a Participant's Matching Contribution Account
results in a discriminatory matching contribution (as determined under Code
sections 401(a)(4) or 401(m) and the regulations thereunder) for such
Participant because the Matching Contribution relates to a Deferral
Contribution that exceeds the limitations described in Section 3.1(d) or this
Section 10.6, or because of any other reason, and such discriminatory
Matching Contribution cannot be distributed as an excess Matching
Contribution pursuant to Section 10.7, such discriminatory Matching
Contribution, or the portion thereof that results in prohibited
discrimination, will be forfeited notwithstanding any other provision of the
Plan to the contrary.
10.7 LIMITATION ON MATCHING CONTRIBUTIONS.
(a) AVERAGE CONTRIBUTION PERCENTAGE TEST. Notwithstanding
any other provision of the Plan, the Average Contribution Percentage for a
Plan Year for Participants who are Highly Compensated Employees will not
exceed the greater of: (i) 125% of the Average Contribution Percentage for
the preceding Plan Year of Participants who were Nonhighly Compensated
Employees in such year; or (ii) the lesser of (A) the Average Contribution
Percentage Test for the preceding Plan Year of Participants who were
Nonhighly Compensated Employees in such Year, plus two percentage points or
(B) 200% of the Average Contribution Percentage for the preceding Plan Year
of Participants who were Nonhighly Compensated Employees in such year. The
multiple use of the alternative test contained in clause (ii) of this
subsection will be restricted as provided in regulations. For purposes of
testing Average Contribution Percentages for the 1997 Plan Year, the Average
Contribution Percentage test may be applied either on the basis of current
year data for Nonhighly Compensated Employees or on the basis of such data
for the preceding year.
(b) REDUCTION OF EXCESS MATCHING CONTRIBUTIONS. If, for any
Plan Year, the Average Contribution Percentage for Participants who are
Highly Compensated Employees exceeds the limitation described in subsection
(a) above, the dollar amount of excess Matching Contributions for each Highly
Compensated Employee will be calculated in the manner described in Code
section 401(m)(6)(B) and the regulations thereunder, and the excess (and
income allocable thereto) will be forfeited (if forfeitable), or (if not
forfeitable) will be distributed to the Highly Compensated Employees on the
basis of the amount of excess Matching Contributions for each such
Participant until the aggregate amount of such excess contributions and
allocable income has been distributed. The excess Matching Contributions of
the Highly Compensated Employee with the highest dollar amount of Matching
Contributions will be reduced first by the amount required to cause that
Participant's Matching Contributions to equal the next highest dollar amount,
and the process will be repeated until the total amount of excess Matching
Contributions has been distributed. Upon distribution of the total excess
Matching Contributions in this manner, the Plan will be treated as
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satisfying the percentage limitations of subsection (a) of this Section. All
distributions of excess Matching Contributions under this subsection (and
income allocable thereto) will be made within two and one-half months
following the close of the Plan Year, if practicable, but in no event later
than the last day of the immediately following Plan Year. The determination
of excess Matching Contributions under this Section will be made after first
determining excess Deferral Contributions under Section 3.1(d) and Section
10.6.
(c) DETERMINATION OF EARNINGS AND LOSSES. The earnings and
losses of the Trust Fund for the Plan Year allocable to the portion of a
Participant's Matching Contributions that are forfeited or distributed
pursuant to Section 10.6 or subsection (b) above will be determined by
multiplying the Trust Fund earnings or losses for the Plan Year allocable to
the Participant's Matching Contribution Account by a fraction, the numerator
of which is the amount of Matching Contributions to be distributed and the
denominator of which is the balance of the Participant's Matching
Contribution Account on the last day of the Plan Year, reduced by the
earnings and increased by the losses allocable to such Account for the Plan
Year. The earnings and losses of the Trust Fund for the period between the
end of the Plan Year and the date of such distribution will not be taken into
account when determining income allocable to excess contributions.
10.8 AGGREGATION RULES.
(a) CODE SECTION 415. For purposes of the allocation
limitations under Code section 415 set forth in this Article, (i) all Defined
Benefit Plans ever maintained by a Controlled Group Member will be treated as
one Defined Benefit Plan, and all Defined Contribution Plans ever maintained
by a Controlled Group Member will be treated as one Defined Contribution
Plan, and (ii) Controlled Group Members will be determined in accordance with
the 50% control rule of Code section 415(h).
(b) CODE SECTION 401(k). For purposes of the limitation on
Deferral Contributions set forth in this Article, the Average Deferral
Percentage for any Participant who is a Highly Compensated Employee for the
Plan Year and who is eligible to have deferral contributions allocated to his
account under two or more plans or arrangements described in Code section
401(k) that are maintained by the Company or any Controlled Group Member will
be determined as if all such deferral contributions were made under a single
arrangement (unless such plans or arrangements may not be permissively
aggregated under applicable regulations). Plans that are aggregated for
purposes of satisfying the minimum coverage rules of Code section 410(b)
(other than for purposes of the average benefits percentage test) will be
treated as a single plan for such purposes.
(c) CODE SECTION 401(m). The Contribution Percentage of a
Participant who is a Highly Compensated Employee for a Plan Year and who is
eligible to make voluntary Employee contributions or receive deferral
contributions or matching employer contributions allocated to his account
under two or more Defined Contribution Plans maintained by the Company or a
Controlled Group Member will be determined as if all such contributions were
made to a single plan (unless such plans may not be permissively aggregated
under applicable regulations). Plans that are aggregated for purposes of
satisfying the minimum coverage rules of Code section 410(b) (other than
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for purposes of the average benefits percentage test) will be treated as a
single plan for such purposes.
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ARTICLE 11
RESTRICTIONS ON DISTRIBUTIONS TO
PARTICIPANTS AND BENEFICIARIES
11.1 PRIORITY OVER OTHER DISTRIBUTION PROVISIONS. The provisions set
forth in this Article will supersede any conflicting provisions of Article 6 or
Article 7.
11.2 GENERAL RESTRICTIONS.
(a) DISTRIBUTIONS PRIOR TO A SEPARATION FROM SERVICE. Except
for distributions permitted under Sections 6.2 and 6.3, a Participant's interest
in the Plan will not be distributed before the Participant's separation from
service, Disability or death unless: (i) the Plan is terminated without the
establishment or maintenance by the Participating Employers of another defined
contribution plan (other than an employee stock ownership plan as defined in
Code section 4975(e)(7)) (ii) a Participating Employer that is a corporation
disposes of all or substantially all of the assets used by the Participating
Employer in a trade or business to a person other than a Controlled Group Member
but only if the Participant continues employment with the acquiring employer; or
(iii) a Participating Employer that is a corporation disposes of its interest in
a subsidiary to a person other than a Controlled Group Member but only if the
Participant continues employment with the subsidiary. An event will not be
treated as described in clause (ii) or (iii) above unless the Participating
Employer continues to maintain the Plan after the disposition.
(b) LUMP SUM DISTRIBUTION REQUIRED. An event described in
subparagraph (a) that would otherwise permit distribution of a Participant's
interest in the Plan will not be treated as described in subparagraph (a) unless
the Participant receives a lump sum distribution by reason of the event. A lump
sum distribution for this purpose will be a distribution described in Code
section 402(e)(4), without regard to clauses (i), (ii), (iii), and (iv) of
subparagraph (A), subparagraph (B), or subparagraph (H) thereof.
11.3 RESTRICTIONS ON COMMENCEMENT OF DISTRIBUTIONS. The provisions of
this Section will apply to restrict the Benefits Committee's ability to delay
the commencement of distributions. Unless a Participant elects otherwise in
writing, distribution of the Participant's vested interest in his Account will
begin no later than the 60th day after the close of the Plan Year in which
occurs the latest of (i) the date on which the Participant attains age 65,
(ii) the tenth anniversary of the Plan Year in which the Participant began
participation in the Plan, or (iii) the Participant's termination of employment.
11.4 RESTRICTIONS ON DELAY OF DISTRIBUTIONS. To the extent required
under Code section 401(a)(9), the entire vested and nonforfeitable interest of a
Participant who is a 5% owner (as defined in Code section 416) will be
distributed in a lump sum not later than April 1 following the calendar year in
which he attains age 70-1/2 unless the Participant makes a withdrawal under
Article 6 that is sufficient to satisfy the minimum distribution requirements of
Code section 401(a)(9) and the regulations thereunder. On or before December 31
of such calendar year and of each succeeding calendar year, distribution of the
entire amount of any additional balances
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in the Participant's Accounts (determined as of the latest Valuation Date
prior to the date of distribution) will be made in a lump sum unless the
Participant makes a withdrawal under Article 6 that is sufficient to satisfy
the minimum distribution requirements of Code section 401(a)(9) and the
regulations thereunder.
11.5 LIMITATION TO ASSURE BENEFITS PAYABLE TO BENEFICIARIES ARE
INCIDENTAL. In the event that any payments under this Plan are to be made to
someone other than the Participant or jointly to the Participant and his spouse
or other payee, such payments must conform to the "incidental benefit" rules of
Code section 401(a)(9)(G) and the regulations thereunder.
11.6 RESTRICTIONS IN THE EVENT OF DEATH. Upon the death of a
Participant, the following distribution provisions will apply to limit the
Beneficiary's ability to delay distributions. Upon a Participant's death, the
remaining portion of his benefit will be distributed in a lump sum in accordance
with Article 6.
11.7 COMPLIANCE WITH REGULATIONS. Distributions under the Plan to
Participants or Beneficiaries will be made in accordance with the regulations
issued under Code section 401(a)(9).
11.8 DELAYED PAYMENTS. If the amount of a distribution required to
begin on a date determined under the applicable provisions of the Plan cannot be
ascertained by such date, or if it is not possible to make such payment on such
date because the Benefits Committee has been unable to locate a Participant or
Beneficiary after making reasonable efforts to do so, a payment retroactive to
such date may be made no later than 60 days after the earliest date on which the
amount of such payment can be ascertained or the date on which the Participant
or Beneficiary is located (whichever is applicable).
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ARTICLE 12
TOP-HEAVY PROVISIONS
12.1 PRIORITY OVER OTHER PLAN PROVISIONS. If the Plan is or becomes a
Top-Heavy Plan in any Plan Year, the provisions of this Article will supersede
any conflicting provisions of the Plan. However, the provisions of this Article
will not operate to increase the rights or benefits of Participants under the
Plan except to the extent required by Code section 416 and other provisions of
law applicable to Top-Heavy Plans.
12.2 DEFINITIONS USED IN THIS ARTICLE. The following words and
phrases, when used with initial capital letters, will have the meanings set
forth below.
(a) "DEFINED BENEFIT DOLLAR LIMITATION" means the limitation
described in Section 10.2(g).
(b) "DEFINED BENEFIT PLAN" means the Qualified Plan described in
Section 10.2(i).
(c) "DEFINED CONTRIBUTION DOLLAR LIMITATION" means the
limitation described in Section 10.2(j).
(d) "DEFINED CONTRIBUTION PLAN" means the Qualified Plan
described in Section 10.2(l).
(e) "DETERMINATION DATE" means for the first Plan Year of the
Plan the last day of the Plan Year and for any subsequent Plan Year the last day
of the preceding Plan Year.
(f) "DETERMINATION PERIOD" means the Plan Year containing the
Determination Date and the four preceding Plan Years.
(g) "INCLUDABLE COMPENSATION" means the compensation described
in Section 10.2(o).
(h) "KEY EMPLOYEE" means any Employee or former Employee (and
the Beneficiary of a deceased Employee) who at any time during the Determination
Period was (i) an officer of a Controlled Group Member, if such individual's
Includable Compensation (modified as described below) exceeds 50% of the Defined
Benefit Dollar Limitation, (ii) an owner (or considered an owner under Code
section 318) of one of the ten largest interests in a Controlled Group Member,
if such individual's Includable Compensation exceeds the Defined Contribution
Dollar Limitation, (iii) a 5-percent owner of a Controlled Group Member, or
(iv) a 1-percent owner of a Controlled Group Member who has annual Includable
Compensation of more than $150,000. The determination of who is a Key Employee
will be made in accordance with Code section 416(i). For purposes of this
subsection only, Includable Compensation will include salary reduction
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contributions pursuant to a cash or deferred arrangement under Code
section 401(k) or a cafeteria plan meeting the requirements of Code section 125.
(i) "MINIMUM ALLOCATION" means the allocation described in the
first sentence of Section 12.3(a).
(j) "PERMISSIVE AGGREGATION GROUP" means the Required
Aggregation Group of Qualified Plans plus any other Qualified Plan or Qualified
Plans of a Controlled Group Member which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the requirements of Code
sections 401(a)(4) and 410 (including simplified employee pension plans).
(k) "PRESENT VALUE" means present value based only on the
interest and mortality rates specified in a Defined Benefit Plan.
(l) "REQUIRED AGGREGATION GROUP" means the group of plans
consisting of (i) each Qualified Plan (including simplified employee pension
plans) of a Controlled Group Member in which at least one Key Employee
participates, and (ii) any other Qualified Plan (including simplified employee
pension plans) of a Controlled Group Member which enables a Qualified Plan to
meet the requirements of Code sections 401(a)(4) or 410.
(m) "TOP-HEAVY PLAN" means the Plan for any Plan Year in which
any of the following conditions exists: (i) if the Top-Heavy Ratio for the Plan
exceeds 60% and the Plan is not a part of any Required Aggregation Group or
Permissive Aggregation Group of Qualified Plans; (ii) if the Plan is a part of a
Required Aggregation Group but not part of a Permissive Aggregation Group of
Qualified Plans and the Top-Heavy Ratio for the Required Aggregation Group
exceeds 60%; or (iii) if the Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of Qualified Plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60%.
(n) "TOP-HEAVY RATIO" means a fraction, the numerator of which
is the sum of the Present Value of accrued benefits and the account balances
(as required by Code section 416)) of all Key Employees with respect to such
Qualified Plans as of the Determination Date (including any part of any accrued
benefit or account balance distributed during the five-year period ending on the
Determination Date), and the denominator of which is the sum of the Present
Value of the accrued benefits and the account balances (including any part of
any accrued benefit or account balance distributed in the five-year period
ending on the Determination Date) of all Employees with respect to such
Qualified Plans as of the Determination Date. The value of account balances and
the Present Value of accrued benefits will be determined as of the most recent
Top-Heavy Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Code section 416 for the
first and second Plan Years of a Defined Benefit Plan. The account balances and
accrued benefits of a participant who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, transfers and
contributions unpaid as of the Determination Date are taken into account will be
made in accordance with Code section 416. Employee contributions described in
Code section 219(e)(2) will not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans, the value of account balances and
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accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year. The accrued benefit of any Employee
other than a Key Employee will be determined under the method, if any, that
uniformly applies for accrual purposes under all Qualified Plans maintained by
all Controlled Group Members and included in a Required Aggregation Group or a
Permissive Aggregation Group or, if there is no such method, as if the benefit
accrued not more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Code section 411(b)(1)(C). Notwithstanding the
foregoing, the account balances and accrued benefits of any Employee who has not
performed services for an employer maintaining any of the aggregated plans
during the five-year period ending on the Determination Date will not be taken
into account for purposes of this subsection.
(o) "TOP-HEAVY VALUATION DATE" means the last day of each Plan
Year.
12.3 MINIMUM ALLOCATION.
(a) CALCULATION OF MINIMUM ALLOCATION. For any Plan Year in
which the Plan is a Top-Heavy Plan, each Participant who is not a Key Employee
will receive an allocation of Participating Employer contributions and
forfeitures of not less than the lesser of 3% of his Includable Compensation for
such Plan Year or the percentage of Includable Compensation that equals the
largest percentage of Participating Employer contributions (including Deferral
Contributions) and forfeitures allocated to a Key Employee. The Minimum
Allocation is determined without regard to any Social Security contribution.
Deferral Contributions made on behalf of Participants who are not Key Employees
will not be treated as Participating Employer contributions for purposes of the
Minimum Allocation in Plan Years beginning after December 31, 1988. Matching
Contributions that are allocated to Participants who are not Key Employees and
that are taken into account in determining a Participant's Deferral Percentage
or Contribution Percentage for a Plan Year beginning after December 31, 1988
will not be treated as Participating Employer contributions for such Plan Year
for purposes of the Minimum Allocation. The Minimum Allocation applies even
though under other Plan provisions the Participant would not otherwise be
entitled to receive an allocation, or would have received a lesser allocation
for the Plan Year because (i) the non-Key Employee fails to make mandatory
contributions to the Plan, (ii) the non-Key Employee's Includable Compensation
is less than a stated amount, or (iii) the non-Key Employee fails to complete
1,000 Hours of Service in the Plan Year.
(b) LIMITATION ON MINIMUM ALLOCATION. No Minimum Allocation
will be provided pursuant to subsection (a) to a Participant who is not employed
by a Controlled Group Member on the last day of the Plan Year.
(c) MINIMUM ALLOCATION WHEN PARTICIPANT IS COVERED BY ANOTHER
QUALIFIED PLAN. If a Controlled Group Member maintains one or more other
Defined Contribution Plans covering Employees who are Participants in this Plan,
the Minimum Allocation will be provided under this Plan, unless such other
Defined Contribution Plans make explicit reference to this Plan and provide that
the Minimum Allocation will not be provided under this Plan, in which case the
provisions of subsection (a) will not apply to any Participant covered under
such other Defined Contribution Plans. If a Controlled Group Member maintains
one or more Defined Benefit Plans covering Employees who are Participants in
this Plan, and such Defined Benefit Plans provide that
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Employees who are participants therein will accrue the minimum benefit
applicable to top-heavy Defined Benefit Plans notwithstanding their
participation in this Plan then the provisions of subsection (a) will not
apply to any Participant covered under such Defined Benefit Plans. If a
Controlled Group Member maintains one or more Defined Benefit Plans covering
Employees who are Participants in this Plan, and the provisions of the
preceding sentence do not apply, then each Participant who is not a Key
Employee and who is covered by such Defined Benefit Plans will receive a
Minimum Allocation determined by applying the provisions of subsection (a)
with the substitution of "5%" in each place that "3%" occurs therein.
(d) NONFORFEITABILITY. The Participant's Minimum Allocation, to
the extent required to be nonforfeitable under Code section 416(b) and the
special vesting schedule provided in this Article, may not be forfeited under
Code section 411(a)(3)(B) (relating to suspension of benefits on reemployment)
or 411(a)(3)(D) (relating to withdrawal of mandatory contributions).
12.4 MODIFICATION OF AGGREGATE BENEFIT LIMIT.
(a) MODIFICATION. Subject to the provisions of subsection (b),
in any Plan Year in which the Top-Heavy Ratio exceeds 60%, the aggregate benefit
limit described in Article 10 will be modified by substituting "100%" for "125%"
in Sections 10.2(h) and (k).
(b) EXCEPTION. The modification of the aggregate benefit limit
described in subsection (a) will not be required if the Top-Heavy Ratio does not
exceed 90% and one of the following conditions is met: (i) Employees who are
not Key Employees do not participate in both a Defined Benefit Plan and a
Defined Contribution Plan which are in the Required Aggregation Group, and the
Minimum Allocation requirements of Section 12.3(a) are met when such
requirements are applied with the substitution of "4%" for "3%"; (ii) the
Minimum Allocation requirements of Section 12.3(c) are met when such
requirements are applied with the substitution of "7 1/2%" for "5%"; or
(iii) Employees who are not Key Employees have an accrued benefit of not less
than 3% of their average Includable Compensation for the five consecutive Plan
Years in which they had the highest Includable Compensation multiplied by their
Years of Service in the which the Plan is a Top-Heavy Plan (not to exceed a
total such benefit of 30%), expressed as a life annuity commencing at the
Participant's normal retirement age in a Defined Benefit Plan which is in the
Required Aggregation Group.
12.5 MINIMUM VESTING.
(a) REQUIRED VESTING. For any Plan Year in which this Plan is a
Top-Heavy Plan, the minimum vesting schedule set forth in subsection (b) will
automatically apply to the Plan to the extent it provides a higher vested
percentage than the vesting provisions of Article 5. The minimum vesting
schedule applies to all Account balances including amounts attributable to Plan
Years before the effective date of Code section 416 and amounts attributable to
Plan Years before the Plan became a Top-Heavy Plan. Further, no reduction in
vested Account balances may occur in the event the Plan's status as a Top-Heavy
Plan changes for any Plan Year, and any change in the effective vesting schedule
from the schedule set forth in subsection (b) to the regular schedule set forth
in Article 5 will be treated as an amendment subject to Section 14.1(iii).
However, this subsection does not apply to the Account balances of any Employee
who does not have an Hour of
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Service after the Plan has initially become a Top-Heavy Plan, and such
Employee's Account balances will be determined without regard to this Section.
(b) MINIMUM VESTING SCHEDULE.
<TABLE>
PERCENTAGE VESTED
YEARS OF SERVICE AND NONFORFEITABLE
---------------- ------------------
<S> <C>
Less than 3 0
3 or more 100
</TABLE>
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ARTICLE 13
ADOPTION OF PLAN BY CONTROLLED GROUP MEMBERS
13.1 ADOPTION PROCEDURE. Any Controlled Group Member may become a
Participating Employer under the Plan provided that (i) the Board approves the
adoption of the Plan by the Controlled Group Member and designates the
Controlled Group Member as a Participating Employer; (ii) the Controlled Group
Member adopts the Plan and Trust Agreement together with all amendments then in
effect by appropriate resolutions of the board of directors of the Controlled
Group Member; and (iii) the Controlled Group Member by appropriate resolutions
of its board of directors agrees to be bound by any other terms and conditions
which may be required by the Board, provided that such terms and conditions are
not inconsistent with the purposes of the Plan.
13.2 EFFECT OF ADOPTION BY CONTROLLED GROUP MEMBER. A Controlled
Group Member that adopts the Plan pursuant to this Article will be deemed to be
a Participating Employer for all purposes hereunder, unless otherwise specified
in the resolutions of the Board designating the Controlled Group Member as a
Participating Employer. In addition, the Board may provide, in its discretion
and by appropriate resolutions, that the Employees of the Controlled Group
Member will receive credit for their employment with the Controlled Group Member
prior to the date it became a Controlled Group Member for purposes of
determining either or both the eligibility of such Employees to participate in
the Plan and the vested and nonforfeitable interest of such Employees in their
Account balances, provided that such credit will be applied in a uniform and
nondiscriminatory manner with respect to all such Employees.
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ARTICLE 14
AMENDMENT OF THE PLAN
14.1 RIGHT OF COMPANY TO AMEND PLAN.
(a) IN GENERAL. The Company reserves the right to the Board to
amend the Plan at any time and from time to time to the extent it may deem
advisable or appropriate, provided that (i) no amendment will increase the
duties or liabilities of the Trustee without its written consent; (ii) no
amendment will cause a reversion of Plan assets to the Participating Employers
not otherwise permitted under the Plan; (iii) no amendment will have the effect
of reducing the percentage of the vested and nonforfeitable interest of any
Participant in his Account nor will the vesting provisions of the Plan be
amended unless each Participant with at least three Years of Service (including
Years of Service disregarded pursuant to the reemployment provisions (if any) of
Article 5) is permitted to elect to continue to have the prior vesting
provisions apply to him, within 60 days after the latest of the date on which
the amendment is adopted, the date on which the amendment is effective, or the
date on which the Participant is issued written notice of the amendment; and
(iv) no amendment will be effective to the extent that it has the effect of
decreasing a Participant's Account balance or eliminating an optional form of
distribution as it applies to an existing Account balance.
(b) AMENDMENTS BY BENEFITS COMMITTEE. Subject to the
limitations set forth in subsection (a), the Benefits Committee also has the
authority without further action by the Board to amend the Plan at any time and
from time to time to the extent it may deem advisable or appropriate, provided,
however, that any amendment which would substantially increase the cost of the
Plan to the Company will not be effective unless and until such amendment has
been approved by the Board.
(c) COMPLIANCE AMENDMENTS. Notwithstanding the provisions of
subsection (a), the Benefits Committee has the authority without further action
by the Board to adopt any amendments to the Plan and the Trust Agreement that
are of an administrative or technical nature or that the Benefits Committee
deems to be necessary, appropriate or desirable to obtain or maintain the
qualification of the Plan and the tax-exempt status of the Trust Fund under the
Code or to comply with any requirement of ERISA.
14.2 AMENDMENT PROCEDURE. Any amendment to the Plan will be made only
pursuant to action of the Board or, where the amendment may be adopted by the
Benefits Committee, by action of the Benefits Committee. A copy of the
resolutions adopting any amendment and a copy of the executed amendment will be
delivered to the Benefits Committee and to the Company. Upon such action by the
Board or the Benefits Committee, as the case may be, the Plan will be deemed
amended as of the date specified as the effective date by such action or in the
instrument of amendment. The effective date of any amendment may be before, on
or after the date of such action of the Board or Benefits Committee.
14.3 EFFECT ON PARTICIPATING EMPLOYERS. Unless an amendment expressly
provides otherwise, all Participating Employers will be bound by any amendment
to the Plan.
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ARTICLE 15
TERMINATION, PARTIAL TERMINATION AND
COMPLETE DISCONTINUANCE OF CONTRIBUTIONS
15.1 CONTINUANCE OF PLAN. The Participating Employers expect to
continue the Plan indefinitely, but they do not assume an individual or
collective contractual obligation to do so, and the right is reserved to the
Company, by action of the Board, to terminate the Plan or to completely
discontinue contributions thereto at any time. In addition, subject to
remaining provisions of this Article, any Participating Employer at any time may
discontinue its participation in the Plan with respect to its Employees.
15.2 COMPLETE VESTING. If the Plan is terminated, or if there is a
complete discontinuance of contributions to the Plan by the Participating
Employers, the amounts allocated or to be allocated to the Accounts of all
affected Participants will become 100% vested and nonforfeitable without regard
to their Years of Service. For purposes of this Section, a Participant who has
terminated employment and is not again an Employee at the time the Plan is
terminated or there is a complete discontinuance of Participating Employer
contributions will not be an affected Participant entitled to full vesting if
the Participant had no vested interest in his Account balance attributable to
Participating Employer contributions at his termination of employment. In the
event of a partial termination of the Plan, the amounts allocable to the
Accounts of those Participants who cease to participate on account of the facts
and circumstances which result in the partial termination will become 100%
vested and nonforfeitable without regard to their Years of Service.
15.3 DISPOSITION OF THE TRUST FUND. If the Plan is terminated, or if
there is a complete discontinuance of contributions to the Plan, the Benefits
Committee will instruct the Trustee either (i) to continue to administer the
Plan and pay benefits in accordance with the Plan until the Trust Fund has been
depleted, or (ii) to distribute the assets remaining in the Trust Fund, unless
distribution is prohibited by Section 11.2. If the Trust Fund is to be
distributed, the Benefits Committee will make, after deducting estimated
expenses for termination of the Trust Fund and distribution of its assets, the
allocations required under the Plan as though the date of completion of the
Trust Fund termination were a Valuation Date. The Trustee will distribute to
each Participant the amount credited to his Account as of the date of
completion of the Trust Fund termination.
15.4 WITHDRAWAL BY A PARTICIPATING EMPLOYER. A Participating Employer
may withdraw from participation in the Plan or completely discontinue
contributions to the Plan only with the approval of the Board. If any
Participating Employer withdraws from the Plan or completely discontinues
contributions to the Plan, a copy of the resolutions of the board of directors
of the Participating Employer adopting such action, certified by the secretary
of such board of directors and reflecting approval by the Board, will be
delivered to the Retirement Benefits Committee as soon as it is administratively
feasible to do so, and the Retirement Benefits Committee will communicate such
action to the Trustee and to the Employees of the Participating Employer.
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ARTICLE 16
MISCELLANEOUS
16.1 REVERSION PROHIBITED.
(a) GENERAL RULE. Except as provided in subsections (b), (c)
and (d), it will be impossible for any part of the Trust Fund either (i) to be
used for or diverted to purposes other than those which are for the exclusive
benefit of Participants and their Beneficiaries (except for the payment of taxes
and administrative expenses), or (ii) to revert to a Controlled Group Member.
(b) DISALLOWED CONTRIBUTIONS. Each contribution of the
Participating Employers under the Plan is expressly conditioned upon the
deductibility of the contribution under Code section 404. If all or part of a
Participating Employer's contribution is disallowed as a deduction under Code
section 404, such disallowed amount (reduced by any Trust Fund losses
attributable thereto) may be returned by the Trustee to the Participating
Employer with respect to which the deduction was disallowed (upon the direction
of the Benefits Committee) within one year after the disallowance.
(c) MISTAKEN CONTRIBUTIONS. If a contribution is made by a
Participating Employer by reason of a mistake of fact, then so much of the
contribution as was made as a result of the mistake (reduced by any Trust Fund
losses attributable thereto) may be returned by the Trustee to the Participating
Employer (upon direction of the Benefits Committee) within one year after the
mistaken contribution was made.
(d) FAILURE TO QUALIFY. In the event the Internal Revenue
Service determines that the Plan and the Trust Agreement, as amended by
amendment acceptable to the Company, initially fail to constitute a qualified
plan and establish a tax-exempt trust under the Code, then notwithstanding any
other provisions of the Plan or the Trust Agreement, the contributions
made by the Participating Employers prior to the date of such determination will
be returned to the Participating Employers within one year after such
determination and the Plan and Trust Agreement will terminate, but only if the
application for determination is made within the time prescribed by law for
filing the Company's income tax return for the taxable year in which the Plan
and the Trust Agreement were adopted, or such later date as the Secretary of the
Treasury may prescribe.
16.2 BONDING, INSURANCE AND INDEMNITY.
(a) BONDING. To the extent required under ERISA, the
Participating Employers will obtain, pay for and keep current a bond or bonds
with respect to each member of the Benefits Committee and the Investment
Committee and each Employee who receives, handles, disburses, or otherwise
exercises custody or control of, any of the assets of the Plan.
(b) INSURANCE. The Participating Employers, in their
discretion, may obtain, pay for and keep current a policy or policies of
insurance, insuring the members of the Committees, the members of the board of
directors of each Participating Employer and other Employees to whom
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any fiduciary responsibility with respect to the administration of the Plan
has been delegated against any and all costs, expenses and liabilities
(including attorneys' fees) incurred by such persons as a result of any act,
or omission to act, in connection with the performance of their duties,
responsibilities and obligations under the Plan and any applicable law.
(c) INDEMNITY. If the Participating Employers do not obtain,
pay for and keep current the type of insurance policy or policies referred to in
subsection (b), or if such insurance is provided but any of the parties referred
to in subsection (b) incur any costs or expenses which are not covered under
such policies, then the Participating Employers will indemnify and hold
harmless, to the extent permitted by law, such parties against any and all
costs, expenses and liabilities (including attorneys' fees) incurred by such
parties in performing their duties and responsibilities under this Plan,
provided that such party or parties were acting in good faith within what was
reasonably believed to have been the best interests of the Plan and its
Participants.
16.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. There will be no
merger or consolidation of all or any part of the Plan with, or transfer of the
assets or liabilities of all or any part of the Plan to, any other Qualified
Plan unless each Participant who remains a Participant hereunder and each
Participant who becomes a participant in the other Qualified Plan would receive
a benefit immediately after the merger, consolidation or transfer (determined as
if the other Qualified Plan and the Plan were then terminated) which is equal to
or greater than the benefit they would have been entitled to receive under the
Plan immediately before the merger, consolidation or transfer if the Plan had
then terminated.
16.4 SPENDTHRIFT CLAUSE. The rights of any Participant or Beneficiary
to and in any benefits under the Plan will not be subject to assignment or
alienation, and no Participant or Beneficiary will have the power to assign,
transfer or dispose of such rights, nor will any such rights to benefits be
subject to attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal or equitable process. This Section will not apply
to a "qualified domestic relations order". A "qualified domestic relations
order" means a judgment, decree or order made pursuant to a state domestic
relations law which satisfies the requirements of Code section 414(p). Payment
to an alternate payee pursuant to a qualified domestic relations order may be
made in an immediate lump sum payment without regard to the age or employment
status of the Participant to whom the order relates.
16.5 RIGHTS OF PARTICIPANTS. Participation in the Plan will not give
any Participant the right to be retained in the employ of a Controlled Group
Member or any right or interest in the Plan or the Trust Fund except as
expressly provided herein.
16.6 GENDER, TENSE AND HEADINGS. Whenever any words are used herein
in the masculine gender, they will be construed as though they were also used in
the feminine gender in all cases where they would so apply. Whenever any words
used herein are in the singular form, they will be construed as though they were
also used in the plural form in all cases where they would so apply. Headings
of Articles, Sections and subsections as used herein are inserted solely for
convenience and reference and constitute no part of the Plan.
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16.7 GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE PLAN MAY BE SUBJECT
TO THE PROVISIONS OF ERISA, THE PLAN WILL BE CONSTRUED AND ENFORCED ACCORDING TO
THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF. EXCEPT AS OTHERWISE REQUIRED BY ERISA, EVERY RIGHT OF
ACTION BY AN EMPLOYEE (OR THE EMPLOYEE'S BENEFICIARY) WITH RESPECT TO THE PLAN
WILL BE BARRED AFTER THE EXPIRATION OF THREE YEARS FROM THE DATE OF TERMINATION
OF THE EMPLOYEE'S EMPLOYMENT OR THE DATE OF RECEIPT OF THE NOTICE OF DENIAL OF A
CLAIM FOR BENEFITS, IF EARLIER. IN THE EVENT ERISA'S LIMITATION ON LEGAL ACTION
DOES NOT APPLY, THE LAWS OF THE STATE OF TEXAS WITH RESPECT TO THE LIMITATIONS
OF LEGAL ACTIONS WILL APPLY AND THE CAUSE OF ACTION MUST BE BROUGHT NO LATER
THAN FOUR YEARS AFTER THE DATE THE ACTION ACCRUES.
Executed this 4th day of March, 1998.
TRAMMELL CROW COMPANY, a
Texas corporation
By: TRAMMELL CROW COMPANY
BENEFITS COMMITTEE
By /s/ Diane Tucker
---------------------------------
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<PAGE>
APPENDIX A
PARTICIPATING EMPLOYERS
TRAMMELL CROW COMPANY,
A TEXAS CORPORATION
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<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF VINSON & ELKINS L.L.P.]
(214) 220-7700 (214) 999-7700
May 21, 1998
Trammell Crow Company
2001 Ross Avenue, Suite 3400
Dallas, Texas 75201
Ladies and Gentlemen:
We have acted as counsel for Trammell Crow Company, a Delaware
corporation (the "COMPANY"), in connection with the Company's registration
under the Securities Act of 1933, as amended (the "ACT"), of 300,000 shares
of common stock, par value $0.01 per share, of the Company which may be
purchased in the open market and offered from time to time under the Trammell
Crow Company Retirement Savings Plan (the "PLAN") and of an indeterminate
amount of interests in the Plan (the "INTERESTS") under the Company's
Registration Statement on Form S-8 (the "REGISTRATION STATEMENT") filed with
the Securities and Exchange Commission (the "COMMISSION") on May ___, 1998.
In reaching the opinions set forth herein, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of such documents and records of the Company and such statutes,
regulations and other instruments as we deemed necessary or advisable for
purposes of this opinion, including (i) the Registration Statement, (ii) the
Restated Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware, (iii) the Bylaws of the Company,
(iv) certain minutes of meetings of, and resolutions adopted by, the Board of
Directors of the Company relating to the Plan, and (v) the Plan.
We have assumed that (i) all information contained in all documents we
reviewed is true, correct and complete, (ii) all signatures on all documents
we reviewed are genuine, (iii) all documents submitted to us as originals are
true and complete, (iv) all documents submitted to us as copies are true and
complete copies of the originals thereof, and (v) all persons executing and
delivering the documents we examined were competent to execute and deliver
such documents.
Based on the foregoing, and having due regard for the legal
considerations we deem relevant, we are of the opinion that the Interests,
when offered and issued by the Company pursuant to the terms of the Plan,
will be legally issued, fully paid and non-assessable.
<PAGE>
Trammell Crow Company
May 21, 1998
Page 2
This opinion is limited in all respects to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the
United States of America. You should be aware that we are not admitted to
the practice of law in the State of Delaware.
This opinion letter may be filed as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Vinson & Elkins L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Retirement Savings Plan of Trammell
Crow Company of our report dated March 4, 1998, with respect to the
consolidated financial statements of Trammell Crow Company and Subsidiaries
included in its Annual Report (Form 10-K) for the year ended December 31,
1997, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Dallas, Texas
May 19, 1998
